New Mexico Insurance Regulator Says No to Dividend Freeze

New Mexico’s top insurance regulator said Thursday he would not put a freeze on insurance provider payments to investors and parent companies while auditors investigate how much the state is owed in unpaid premium taxes.

New Mexico Insurance Superintendent John Franchini said he has so far declined a request from the state auditor to suspend approval of certain dividend payments by insurance providers.

State Auditor Tim Keller has urged insurance regulators to pause the dividend approvals as a precaution while authorities await results of an independent audit of unpaid premium taxes dating back to 2000. Keller’s chief of staff reiterated the advice Thursday at a meeting of a committee that oversees the insurance superintendent.

A preliminary audit turned up at least $193 million in possible underpayments by five top insurance companies.

“As recent as the spring of 2017, the Office of the Superintendent of Insurance approved millions of dollars of dividend requests from insurance companies,” Keller wrote to Franchini last week.

On July 11, Franchini requested that the State Auditor’s Office provide supporting documentation to “fully address any potential concerns and discuss possible remedies.”

New Mexico Attorney General Hector Balderas sued one of the state’s largest healthcare companies, saying that it underpaid its taxes by tens of millions of dollars over a 15-year period.

Officials with the Presbyterian health network dispute the allegations, saying they have been audited numerous times and have been working with state regulators to determine their tax liability.

At least two other insurance providers have been notified of unpaid premium taxes, under notices that were later rescinded by the superintendent’s office pending further review.

A new audit of insurance premium taxes dating back to 2000 is underway to determine what the state may be owed by specific companies, with results due out at the end of September.

The audit is designed to examine companies with annual premium tax obligations of $1 million or more – addressing roughly 90 percent of the state insurance market.

Keller is a candidate for mayor of Albuquerque in October elections.