A. No policy of life insurance shall be delivered or issued for delivery in this state if it contains any of the following provisions:

(1) a provision for a period of not less than five years within which an action at law or in equity may be commenced after the cause of action shall accrue; or

(2) a provision which excludes or restricts liability for death caused in a certain specified manner or occurring while the insured has a specified status, except that a policy may contain provisions excluding or restricting coverage as specified therein in the event of death under any one or more of the following circumstances:

(a) death as a result, directly or indirectly, of war, declared or undeclared, or of action by military forces, or of any act or hazard of such war or action, or of service in the military, naval or air forces or in civilian forces auxiliary thereto, or from any cause while a member of such military, naval or air forces of any country engaged in such military action;

(b) death as a result of aviation or any air travel or flight;

(c) death as a result of a specified hazardous occupation or occupations;

(d) death while the insured is a resident outside the continental United States and Canada; or

(e) death within two years from the date of issue of the policy as a result of suicide, while sane or insane.

B. A policy which contains any exclusion or restriction pursuant to Subsection A of this section shall also provide that in the event of death under the circumstances to which any such exclusion or restriction is applicable, the insurer will pay an amount not less than a reserve determined according to the national association of insurance commissioners reserve valuation method upon the basis of the mortality table and interest rate specified in the policy for the calculation of nonforfeiture benefits (or if the policy provides for no such benefits, computed according to a mortality table and interest rate determined by the insurer and either specified in the policy or filed with the superintendent) with adjustment for indebtedness or dividend credit.

C. This section shall not apply to group life insurance, health insurance, reinsurance or annuities, or to any provision in a life insurance policy or contract supplemental thereto relating to disability benefits or to additional benefits in the event of death by accident or accidental means.

D. Nothing contained in this section shall prohibit any provision which in the opinion of the superintendent is more favorable to the policyholder than a provision permitted by this section.

History: Laws 1984, ch. 127, § 390; 1987, ch. 259, § 19.

Applicability to limitations period in policy. — Subsection A(1) did not apply to invalidate the three-year limitation period in a credit life and disability policy. Willey v. United Mercantile Life Ins. Co., 1999-NMCA-137, 128 N.M. 98, 990 P.2d 211.

No liability where insured, understanding nature and consequences of act, shot himself. — Insurer was not liable for payment of the face value of a policy which included a "suicide, while sane or insane" clause, where the evidence, on motion for summary judgment, could only support a finding or conclusion that the insured, who shot himself, understood the physical nature or consequences of his act. Estate of Galloway v. Guaranty Income Life Ins. Co., 1986-NMSC-065, 104 N.M. 627, 725 P.2d 827.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 43 Am. Jur. 2d Insurance §§ 239, 279; 44 Am. Jur. 2d Insurance §§ 1321, 1322, 2072.

Liability insurance: intoxication or other mental incapacity avoiding application of clause in liability policy specifically exempting coverage of injury or damage caused intentionally by or at direction of insured, 33 A.L.R.4th 983.

46 C.J.S. Insurance § 1426 et seq.