No person shall make, publish, issue or circulate any estimate, illustration, circular, statement, sales presentation or comparison which:

1. A. misrepresents the benefits, advantages, conditions or terms of any policy;
2. B. misrepresents the premium overcharge commonly called dividends or share of the surplus to be received on any policy;
3. C. makes any false or misleading statement as to dividends or share of surplus previously paid on any policy;
4. D. is misleading or a misrepresentation as to the financial condition of any person, or as to the reserve system upon which any life insurer operates;
5. E. uses any name or title of any policy or class of policies misrepresenting the true nature thereof;
6. F. misrepresents any policy as being shares of stock; or
7. G. fails to disclose material facts reasonably necessary to prevent other statements made from being misleading.

History: Laws 1984, ch. 127, § 272.

ANNOTATIONS

Many factors figure into issue of materiality. Smoot v. Physicians Life Ins. Co., 2004-NMCA-027, 135 N.M. 265, 87 P.3d 545.

Unfair Insurance Practices Act imposes duty to disclose material facts reasonably necessary to prevent any statements from being misleading. Smoot v. Physicians Life Ins. Co., 2004-NMCA-027, 135 N.M. 265, 87 P.3d 545.

Existence of duty is dependent on materiality of the facts. Smoot v. Physicians Life Ins. Co., 2004-NMCA-027, 135 N.M. 265, 87 P.3d 545.

Violation of act shown. — A claim under this act was supported by evidence that defendant insurer knew that the rates were inadequate prior to the time the agreement went into effect and did not disclose its method for deciding whether to add a surcharge to the preliminary premium or increase annual rates, and that plaintiff would not have contracted with defendant if it had that information. Woodworker's Supply, Inc. v. Principal Mut. Life Ins. Co., 170 F.3d 985 (10th Cir. 1999).

Disclosures related to modal premium charges. — Under both the Unfair Practices Act and the Unfair Insurance Practices Act, an insurer may have a duty to disclose information about "finance charges" and "APR" rates when insureds pay modal premium charges, depending on the materiality of the facts. Azar v. Prudential Ins. Co., 2003-NMCA-062, 133 N.M. 669, 68 P.3d 909, cert. denied, 133 N.M. 539, 65 P.3d 1094.

The filed rate doctrine does not apply to misleading business practices. — Where plaintiff, an insured, brought an action alleging her insurer sold her illusory underinsured motorist insurance and asserted claims for violations of New Mexico's Unfair Insurance Practices Act, and where the insurer moved to dismiss plaintiff's action, claiming that the relevant rates were filed with the insurance department and therefore the filed rate doctrine barred plaintiff's claims, the motion to dismiss was denied because the filed rate doctrine, which provides that any filed rate that is approved by the governing regulatory agency is per se reasonable and unassailable in judicial proceedings brought by ratepayers, does not apply to claims where a consumer alleges that an insurer misrepresents material facts about a policy when making the sale. Bhasker v. Casualty Ins. Co., 284 F.Supp.3d 1191 (D. N.M. 2018).

Am. Jur. 2d, A.L.R. and C.J.S. references. — Liability of insurance agent or broker to insured for misrepresentation of cash surrender value or accumulated value benefits of life insurance policy, 44 A.L.R.4th 1030.