The New Mexico Superintendent of Insurance published a press release announcing that statute 13.19.2 NMAC, Writing Surplus Line Business, has been finalized and effective April 21, 2026.
The statute governs surplus lines insurance business in the state. The first requirement is that the surplus lines market cannot be used simply because a lower premium is offered; if an admitted insurer is willing to write a policy at a higher premium, a broker must remain in the standard market.
Brokers are also prohibited from artificially splitting a single class of coverage into multiple policies to gain a rate advantage. If an authorized insurer is willing to take the entire risk as a single contract, it should not be split. However, combining primary and excess coverage between admitted and non-admitted insurers is allowed.
Brokers are required to guarantee the financial soundness of an authorized insurer by confirming the insurer is on the Superintendent's list of eligible surplus lines insurers and sufficiently researching the insurer to ensure their financial stability and good standing.
An unauthorized foreign insurer can apply to be an eligible surplus lines insurer with a $1,000 registration fee, proof of minimum capital and surplus of $15 million, and a certified document from their home state showing they are compliant and authorized to write insurance.
The Superintendent may refuse or withdraw a surplus line insurer's eligibility for the following reasons: financial instability or questionable financial condition, questionable actions from the insurer's management, among other reasons. An insurer has the right to appeal the Superintendent's action through a hearing.
A producer broker must sign a sworn affidavit that certifies a diligent search was made and coverage could not be found in the standard market, and that they informed the insured that coverage was placed with an unauthorized insurer that is not subject to supervision by the state and not protected by the state guaranty association.