2018 New Mexico Statutes
Chapter 59A - Insurance Code
Article 22 - Health Insurance Contracts
Section 59A-22-5 - Time limit on certain defenses.
A. There shall be a provision for comprehensive major medical policies as follows: As of the date of issue of this policy, no misstatements, except willful or fraudulent misstatements, made by the applicant in the application for this policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy). In the event a misstatement in an application is made that is not fraudulent or willful, the issuer of the policy may prospectively rate and collect from the insured the premium that would have been charged to the insured at the time the policy was issued had such misstatement not been made.
B. There shall be a provision for policies other than comprehensive major medical policies as follows: After two years from the date of issue of this policy, no misstatements, except fraudulent misstatements, made by the applicant in the application for this policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of such two-year period.
C. The foregoing policy provisions shall not be so construed as to affect any initial two-year period nor to limit the application of Sections 59A-22-17 through 59A-22-19, 59A-22-21 and 59A-22-22 NMSA 1978 in the event of misstatement with respect to age or occupation or other insurance.
D. A policy that the insured has the right to continue in force subject to its terms by the timely payment of premium (1) until at least age fifty or (2) in the case of a policy issued after age forty-four, for at least five years from its date of issue, may contain in lieu of the foregoing the following provision, from which the clause in parentheses may be omitted at the insurance company's option, under the caption "Incontestable":
After this policy has been in force for a period of two years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.
E. For individual policies that do not reimburse or pay as a result of hospitalization, medical or surgical expenses, no claim for loss incurred or disability (as defined in the policy) shall be reduced or denied on the ground that a disease or physical condition disclosed on the application and not excluded from coverage by name or a specific description effective on the date of loss had existed prior to the effective date of coverage of this policy. As an alternative, those policies may contain provisions under which coverage may be excluded for a period of six months following the effective date of coverage as to a given covered insured for a preexisting condition, provided that:
(1) the condition manifested itself within a period of six months prior to the effective date of coverage in a manner that would cause a reasonably prudent person to seek diagnosis, care or treatment; or
(2) medical advice or treatment relating to the condition was recommended or received within a period of six months prior to the effective date of coverage.
F. Individual policies that reimburse or pay as a result of hospitalization, medical or surgical expenses may contain provisions under which coverage is excluded during a period of six months following the effective date of coverage as to a given covered insured for a preexisting condition, provided that:
(1) the condition manifested itself within a period of six months prior to the effective date of coverage in a manner that would cause a reasonably prudent person to seek diagnosis, care or treatment; or
(2) medical advice or treatment relating to the condition was recommended or received within a period of six months prior to the effective date of coverage.
G. The preexisting condition exclusions authorized in Subsections E and F of this section shall be waived to the extent that similar conditions have been satisfied under any prior health insurance coverage if the application for new coverage is made not later than thirty-one days following the termination of prior coverage. In that case, the new coverage shall be effective from the date on which the prior coverage terminated.
H. Nothing in this section shall be construed to require the use of preexisting conditions or prohibit the use of preexisting conditions that are more favorable to the insured than those specified in this section.
History: Laws 1984, ch. 127, § 426; 1990, ch. 110, § 3; 1993, ch. 126, § 4; 1994, ch. 75, § 27; 2008, ch. 87, § 1.
The 2008 amendment, effective July 1, 2008, in Subsection A, required that comprehensive major medical policies provide that no misstatements made by the applicant shall be used to void the policy or to deny a claim and that if the misstatement was not fraudulent or willful, authorized the issuer to prospectively rate and collect the premium that would have been due if the misstatement had not been made; and in Subsection B, required that policies other than comprehensive major medical policies contain the stated provision.
The 1994 amendment, effective January 1, 1995, in Subsection B, inserted the language beginning "For individual" preceding "no claim" in the first sentence, added the second sentence, and added Paragraphs B(1) and B(2); rewrote the introductory language of Subsection C preceding "contain provisions", which formerly read "An individual policy may, in lieu of the provisions stated in Subsection B of this section,"; deleted the former second sentence in Paragraph C(2), which read "This shall not be construed to prohibit preexisting condition provisions that are more favorable to the insured"; and added Subsections D and E.
Applicability. — Laws 1994, ch. 75, § 36 makes the provisions of §§ 26 to 34 of the act applicable to all plans and policies delivered, issued for delivery or renewed on or after January 1, 1995.
The 1993 amendment, effective June 18, 1993, inserted "disclosed on the application" in Subsection B.
Law reviews. — For note and comment, "Why the Recession of Health Insurance Policies is not an 'Equitable' Remedy," see 40 N.M. L. Rev. 363 (2010).
