New Mexico grants subpoena power to superintendent of insurance

In a legislative move that enhances regulatory oversight within the state’s insurance sector, New Mexico has enacted Senate Bill 124 (SB 124), granting the superintendent of insurance expanded powers to investigate potential violations of the Insurance Code. This new law equips the superintendent with the authority to issue civil investigative subpoenas prior to initiating formal administrative actions—an enhancement poised to significantly strengthen pre-enforcement inquiries.

Previously, the Office of Superintendent of Insurance (OSI) was limited in its capacity to compel information before filing a notice of contemplated action. Under the amended Section 59A-2-8 of the New Mexico Statutes, the superintendent can now issue a civil investigative subpoena during the early stages of an investigation. This tool can be used to secure documents, testimony, or other relevant information even before formal enforcement proceedings are underway.

Specifically, the law provides that “when examining or investigating such insurance matters, the superintendent may issue a civil investigative subpoena prior to the issuance of a notice of contemplated action.”

Additionally, if a person fails to comply with such a subpoena without lawful excuse, the superintendent may seek enforcement through the courts. This marks a notable expansion of OSI’s investigatory capabilities and places new emphasis on early cooperation from insurers and other regulated entities.

SB 124 also restates and clarifies the superintendent’s emergency powers during a state of emergency declared under either the All Hazard Emergency Management Act or the Public Health Emergency Response Act. In such cases, the superintendent may issue emergency rules or orders to ensure access to insurance and maintain market stability.

Permissible emergency actions include:

• grace periods for premium payments and performance of other insured duties
• premium refunds
• waivers of cost sharing or deductibles
• temporary postponement of cancellations and non-renewals
• reporting requirement adjustments for claims
• the suspension of compliance with statutes, rules, or contracts if strict compliance would hinder emergency response

However, these emergency rules are explicitly limited in scope. Each must:

1. specify the line of insurance affected
2. define the geographic area of applicability
3. state effective and termination dates

The law also ensures that:

• emergency orders “shall not apply retroactively”
• “shall not apply outside the geographic area designated in the governor's order”
• “shall not extend beyond the end date of the governor’s order”

These provisions aim to balance responsive regulatory flexibility with clearly defined temporal and geographic boundaries.

This statutory change will likely prompt insurers and industry stakeholders to review and bolster their internal compliance programs, especially their capacity to respond swiftly to investigative demands.

Further, the clarified emergency rulemaking authority provides OSI with a mechanism to ensure market stability in times of crisis—an authority that has gained heightened relevance in the wake of the COVID-19 pandemic and other disruptive events.