"Insurance" is a contract whereby one undertakes to pay or indemnify another as to loss from certain specified contingencies or perils, or to pay or grant a specified amount or determinable benefit in connection with ascertainable risk contingencies, or to act as surety.

History: Laws 1984, ch. 127, § 5.

Compiler's notes. — The annotations appearing below were abstracted from attorney general opinions decided under former 59-1-1 NMSA 1978 which defined "insurance" as "any form of insurance, bond or indemnity contract, the issuance of which is legal in the state of New Mexico."

Contract to defend and indemnify was an insurance contract. — Where defendant's insured sued defendant and plaintiff; defendant agreed to defend and indemnify plaintiff without any further elaboration or condition, the principal object and purpose of the agreement was the defense and indemnification of plaintiff and the agreement was an insurance contract. Guest v. Allstate Ins. Co., 2010-NMSC-047, 149 N.M. 74, 244 P.3d 342, aff'g in part, rev'g in part 2009-NMCA-037, 145 N.M. 797, 205 P.3d 844.

Indemnification contract. — Where an insured sued the insured's insurer and the insurer's attorney for claims that arose out of the handling of the insured's uninsured motorist claim and the insurer agreed to defend and indemnity the attorney in the insured's suit, the contract was not a contract of insurance, because the contract to defend and indemnify the attorney shifted the risk of litigation to the insurer and did not involve distribution, or sharing, of the risk among others. Guest v. Allstate Ins. Co., 2009-NMCA-037, 145 N.M. 797, 205 P.3d 844, aff'd in part, rev'd in part, 2010-NMSC-047, 149 N.M. 74, 244 P.3d 342.

Term "insurance" not restrictive. — Definition of "insurance" appears to express an intent that the term not be restrictive. 1971 Op. Att'y Gen. No. 71-82; 1978 Op. Att'y Gen. No. 78-20.

Test for insurance. — Test as to whether certain business constitutes insurance is whether the certificate of membership or other contract issued constitutes a contract of insurance or indemnity. 1933 Op. Att'y Gen. No. 33-569.

Contract of insurance must be for security against risk of loss, which risk, originally resting with the insured, be shifted and assumed by the insurer, and the risk must be covered by a general fund consisting of deposits made by persons having similar contractual arrangements with the insurer. 1971 Op. Att'y Gen. No. 71-82.

Indemnification required for insurance. — If a contract is for services and not indemnification, then it is not an insurance transaction. 1971 Op. Att'y Gen. No. 71-82.

Third-party indemnification. — Indemnification under an insurance contract does not necessarily have to be made directly to the insured. 1971 Op. Att'y Gen. No. 71-82.

Service contracts constitute a form of insurance. 1978 Op. Att'y Gen. No. 78-20.

Variable annuities not insurance. — Variable annuities are subject to regulation by the commissioner of securities rather than by the superintendent of insurance, inasmuch as they are not "insurance" within the meaning of this section, but rather are "securities". 1960 Op. Att'y Gen. No. 60-137.

Prepaid medical fees. — Agreement between individual and physician for personal services in return for certain monthly payments involved prepayment of medical fees and not insurance. 1957 Op. Att'y Gen. No. 57-29.

Furnishing of ambulance service not insurance. — Furnishing of ambulance service by association which sells memberships to the public entitling members to free ambulance service from any contract operator in event of sickness or injury does not amount to the doing of an insurance business, as it does not assume as its primary purpose a risk, hazard or peril but merely constitutes a contract to furnish services. 1960 Op. Att'y Gen. No. 60-58.

Setting up of contract to indemnify the public for loss suffered by reason of necessity to utilize ambulance services was insurance. 1954 Op. Atty's Gen. No. 54-5990.

Where a person operating an ambulance proposes to offer ambulance service to the general public pursuant to an agreement which in substance recites that in consideration of $15.00 the ambulance service will be provided to and from a named hospital within a 25 mile radius for a period of one year to the subscribers of such agreement, such an arrangement is not insurance so as to be amenable to regulation under the insurance laws of New Mexico. 1961 Op. Att'y Gen. No. 61-30.

Automobile club services as insurance. — Various services furnished members by an automobile club, including furnishing of bond, attorney fees for defense or collection of damages, reward for return of stolen vehicle, protection against lost credit cards, emergency road service and reimbursement for expenses due to automobile disability, constituted practice of insurance. 1971 Op. Att'y Gen. No. 71-82.

Law reviews. — For note, "Nonprofit Health Care Corporations Are Not Insurance Providers," see 10 N.M.L. Rev. 481 (1980).

Am. Jur. 2d, A.L.R. and C.J.S. references. — 43 Am. Jur. 2d Insurance § 1.

Undertaking to defend suit or furnish legal services in certain future contingencies as insurance, 71 A.L.R. 695.

What constitutes insurance, 119 A.L.R. 1241.

Doctrine of unconscionability as applied to insurance contracts, 86 A.L.R.3d 862.

Prepaid legal services plans, 93 A.L.R.3d 199.

44 C.J.S. Insurance § 1 et seq.