Key Takeaways
- The New Mexico Life and Health Insurance Guaranty Association protects policyholders when insurers become insolvent
- Coverage limits are \$300,000 for life insurance death benefits and \$100,000 for cash values
- Health insurance coverage is limited to \$500,000 per individual
- Annuity coverage is limited to \$250,000 per contract owner
- Producers cannot use guaranty association coverage as a selling point
Last updated: January 2026
New Mexico Life and Health Insurance Guaranty Association
The New Mexico Life and Health Insurance Guaranty Association protects New Mexico residents when life and health insurance companies become insolvent.
Purpose and Function
The Association was established under New Mexico law to:
- Protect policyholders of insolvent insurers
- Continue coverage or pay claims up to limits
- Funded by assessments on member insurers
- Operates under state law supervision
Coverage Limits
The Association provides coverage up to specific limits:
Life Insurance
| Benefit Type | Maximum Coverage |
|---|---|
| Death Benefit | $300,000 per insured life |
| Cash Surrender Value | $100,000 per insured life |
Annuities
| Benefit Type | Maximum Coverage |
|---|---|
| Present Value | $250,000 per contract owner |
Health Insurance
| Coverage Type | Maximum Coverage |
|---|---|
| Major Medical | $500,000 per individual |
Producer Restrictions
Producers cannot:
- Use guaranty association coverage as a selling point
- Advertise guaranty association protection
- Imply policies are "guaranteed" by the association
- Compare guaranty association to FDIC insurance
Exam Tip: Remember that producers CANNOT use guaranty association coverage as a selling point.
Test Your Knowledge
What is the maximum death benefit coverage provided by the New Mexico Guaranty Association?
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Test Your Knowledge
Can a New Mexico insurance producer use guaranty association coverage as a selling point?
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B
C
D
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