Section 52-1-28.1 - Unfair claim-processing practices; bad faith. - New Mexico Statutes

52-1-28.1. Unfair claim-processing practices; bad faith.

A.     Claims may be filed under the Workers' Compensation Act [this article] alleging unfair claim-processing practices or bad faith by an employer, insurer or claim-processing representative relating to any aspect of the Workers' Compensation Act.  The director may also investigate allegations of unfair claim processing or bad faith on his own initiative.   

B.     If unfair claim processing or bad faith has occurred in the handling of a particular claim, the claimant shall be awarded, in addition to any benefits due and owing, a benefit penalty not to exceed twenty-five percent of the benefit amount ordered to be paid.   

C.     If an employer, insurer or claim-processing representative has a history or pattern of repeated unfair claim-processing practices or bad faith, the director or a  workers' compensation judge may impose a civil penalty of up to one thousand dollars ($1,000) for each violation.  The civil penalty shall be deposited in the workers' compensation administration fund.   

D.     Any person aggrieved by an order under this section may request a hearing pursuant to the Workers' Compensation Act.   

E.     The director shall adopt by regulation definitions of unfair claim-processing practices and bad faith.   

F.     This section shall not be construed as limiting or interfering with the authority of the superintendent of insurance as provided by law to regulate any insurer, including his jurisdiction over unfair claim settlement practices.