Key Takeaways
- New Mexico producers must act in the best interest of clients
- Producers must disclose compensation arrangements and conflicts of interest
- Trust funds and premiums must be handled according to strict requirements
- Producers must maintain accurate records
- Continuing education includes ethics requirements
Last updated: January 2026
Producer Conduct and Fiduciary Duties
New Mexico insurance producers have legal and ethical obligations to their clients and the public.
Producer Duties
Insurance producers owe duties to their clients:
Key Duties
| Duty | Description |
|---|---|
| Loyalty | Put client's interests first |
| Disclosure | Reveal all material information |
| Competence | Maintain professional knowledge |
| Confidentiality | Protect client information |
| Good Faith | Act honestly in all dealings |
Handling of Funds
Producers must handle premiums and client funds according to strict rules:
Premium Collection
| Requirement | Rule |
|---|---|
| Deposit | Promptly to insurer or trust account |
| Commingling | Cannot mix with personal funds |
| Trust Account | Required for holding premiums |
| Records | Must maintain detailed records |
Consequences of Mishandling
| Consequence | Detail |
|---|---|
| License Suspension | Immediate suspension pending investigation |
| License Revocation | Permanent loss of license |
| Restitution | Must repay all misappropriated funds |
| Civil Liability | Subject to lawsuits from harmed parties |
| Criminal Charges | Potential felony prosecution |
| OSI Reporting | Reported to NIPR and other states |
Disclosure Requirements
New Mexico requires producers to make certain disclosures:
Required Disclosures
| Disclosure | When Required |
|---|---|
| Producer Status | Before application |
| Compensation | If requested by client |
| Conflicts of Interest | When conflicts exist |
| Insurer Relationship | Agent vs. broker status |
| Policy Limitations | Material limitations and exclusions |
Compensation Disclosure
| Situation | Requirement |
|---|---|
| Upon Request | Must disclose compensation arrangement |
| Annuity Sales | Best interest standard requires disclosure |
| Fee-Based Services | Must disclose all fees |
Record Keeping Requirements
New Mexico requires producers to maintain records:
| Record Type | Retention Period |
|---|---|
| Applications | 5 years |
| Policy Documents | 5 years after expiration |
| Correspondence | 5 years |
| Replacement Documents | 5 years |
| Commission Records | 5 years |
| Complaint Files | 5 years |
Exam Tip: The general rule is to retain records for at least 5 years. This protects both the producer and consumers in case of disputes.
Test Your Knowledge
What is the consequence of a New Mexico producer commingling client funds with personal funds?
A
B
C
D