Bulletin 2020-003 imposed a moratorium in New Mexico on excepted benefits filings until rules could be promulgated pursuant to Section 59A-23G NMSA 1978. Recent notices out of the NM Office of Superintendent of Insurance address this moratorium and clarify any actions going forward.
Effective October 1st, Bulletin 2020-017 partially lifted the moratorium based on the promulgation of 13.10.34 NMAC. The lifting is only in effect for the following products:
- Coverage-only for accident insurance
- Coverage-only for specified disease or illness
- Hospital indemnity or other fixed indemnity insurance
- Champus/TRICARE supplement plans that provide one or more of the coverages specified above
Other excepted benefit forms and rates such as dental and vision will still be withdrawn and rejected in SERFF if submitted as stated in Bulletin 2020-003.
Bulletin 2020-018 rescinded Bulletin 2019-006, which stated that insurers who offer excepted benefit products to NM residents through a master policy issued to group out-of-state must provide a listing of those policy forms and a certification that those forms are in compliance with NM law. The recission stemmed from the central issue that this directive could be construed to suggest that the superintendent cannot (or will not) review the described forms for compliance with NM law. In truth, the superintendent has that authorization, whether the excepted benefits are sold individually or through an out-of-state group.
Bulletin 2020-019, effective October 1, 2020, addressed Regulation 13.10.34 , also effective October 1st, 2020, which provided for standards for accident only, specified disease, and hospital indemnity products. This new excepted benefit rule applied to plans “issued in this state, and to any such contract issued to a group located outside of this state, if any covered person resides in this state." This rule clarified that a carrier cannot sell a New Mexico resident excepted benefits under a plan issued to an out-of-state group, unless the plan complies with New Mexico law and has been approved by the superintendent. Because that directive was contrary to the guidance in Bulletin 2019-006, the superintendent rescinded that bulletin. See Bulletin 2020-018.
The purpose of Regulation 13.10.34 is as follows: to establish regulatory requirements for the named excepted benefit plans, to standardize and simplify the terms and coverages, to facilitate public understanding and comparison of coverage, to eliminate provisions that may be misleading or confusing in connection with the purchase and renewal of the coverages or with the settlement of claims, and to require disclosures in the marketing and sale of excepted benefit plans.
Effective October 15th, Bulletin 2020-020 stated that the superintendent has not promulgated rules for excepted benefits of dental, vision, or disability. The moratorium is still in effect. It is not expected that rules will be promulgated until 2021 for these products. However, the Superintendent will accept updated advertising for these previously approved products until the rules are promulgated.