New Mexico Life Insurance Guaranty Association v. Moore
New Mexico Supreme Court
596 P.2d 260 (1979)
- Written by Noah Lewis, JD
Facts
The purpose of New Mexico’s Life Insurance Guaranty Act was to protect policyholders from insurance companies becoming insolvent and failing to pay claims. The act applied to all life and health insurance policies. The act created the New Mexico Life Insurance Guaranty Association (plaintiff). To engage in the business of insurance, all covered insurers were required to be members of the association. The association levied assessments on member organizations because if a member insurer became insolvent, the association covered the policies of the insolvent insurer to assure payment of the policyholder’s claims. New Mexico Blue Cross-Blue Shield, Inc. (Blue Cross) (defendant) was a nonprofit health plan with 200,000 members that contracted with doctors and hospitals to provide medical services to its members at minimum cost. The association sought a judgment declaring three health plans, Blue Cross and two health maintenance organizations (HMOs) (defendants), subject to the guaranty act. Although the health plans were explicitly subject to other state insurance laws, including the Insurance Company Insolvency Act and the Unfair Insurance Practices Act, the district court found that the guaranty act did not apply because the health plans were not insurers. The association appealed.
Rule of Law
Issue
Holding and Reasoning (Sosa, C.J.)
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