Insurance industry opposes change to offset rules; committee vote rejects amended uninsured/underinsured motorist bill

The committee heard extended testimony and debate on the committee substitute for House Code 97, which concerns uninsured and underinsured motorist (UM/UIM) insurance. The sponsor explained that the revised bill no longer mandates UM/UIM coverage but would prevent insurers from offsetting an at‑fault driver’s liability policy against an injured party’s UM/UIM coverage — a change the sponsor described as ensuring consumers "get the product that they're paying for." (Representative (sponsor)).

Attorney Andrea Harris, who said she practices insurance litigation in Albuquerque, described how current offsets can render underinsured coverage effectively illusory. Consumer advocates and the sponsor provided scenarios in a handout illustrating cases where a policyholder pays for UM/UIM coverage yet receives little or no recovery because of offsets.

Representatives of State Farm (Anne Conway), the National Association of Mutual Insurance Companies (Jason Espinosa), and other business groups (Larry Sonntag, New Mexico Business Coalition; Mike Morris, mayor of Clovis and licensed insurance agent) testified in opposition, saying the change would raise premiums. Anne Conway told the committee that analysis by her company predicted premium increases for customers and that removing offsets “could be up to...63%” for many policyholders. Jason Espinosa warned that prohibiting offsets could increase premiums and exacerbate the existing uninsured-driver rate in the state.

Committee discussion focused on whether the sub (amended in Transportation earlier) had removed a prior mandate to require UM/UIM coverage; the sponsor confirmed the mandate had been removed and that the substitute merely removes offsets so that consumers who buy UM/UIM “receive the benefit of that underinsured coverage.” Several committee members asked whether premiums would rise; the sponsor said that premium-change estimates cited by lobbyists referred to an earlier version of the bill that would have mandated coverage and did not apply to the current committee substitute.

The committee took a roll call on a motion that the committee substitute (as amended) "do pass." The roll call recorded five yes votes and six no votes; the motion failed in committee. Yes votes were cast by Representatives De La Cruz, Patajone, Serrano, the vice chair, and the chair. No votes were recorded from Representatives Armstrong, Hernandez, Valente, Mason, Matthews and Murphy.

The committee did not advance the measure; members also discussed obtaining additional data from other states on premium outcomes and the bill’s potential effects before future consideration.