Welcome to our first legislative update of the 2026 budget session. While insurance-related legislation has been relatively quiet so far, a few bills have been introduced that we want to be sure our membership is aware of.

Senate Bill 154 would amend the New Mexico Insurance Code to require that any property insurance policy covering wildfire damage must also cover flooding, mudslides, debris flows, and similar water-related damage when those losses are causally related to a wildfire. The required coverage would apply for five years following the wildfire event and is intended to address post-fire flooding risks that often occur after vegetation loss and soil destabilization. The bill does not replace traditional flood insurance, but instead mandates expanded property coverage tied specifically to wildfire-related conditions, potentially affecting underwriting, policy forms, claims handling, and premiums for properties in wildfire-prone areas.

House Bill 28 would establish an Artificial Intelligence Transparency Act requiring businesses to provide notice to consumers when an artificial intelligence system is used to make or materially influence a “consequential decision,” including decisions related to insurance coverage, pricing, underwriting, or claims. The bill requires disclosure that AI was used, basic information about the system, and an opportunity for consumers to appeal or seek human review of adverse decisions. While HB 28 does not amend the Insurance Code directly, it could significantly impact insurers and producers by adding new compliance, documentation, and disclosure obligations wherever AI tools are used in underwriting, rating, claims processing, or customer interactions, and by creating potential enforcement and litigation risk if notice or appeal requirements are not met.

 You can review the full text of these bills at www.nmlegis.gov. If you have any questions, please do not hesitate to reach out to me. I will continue to monitor legislation and keep you informed of new bills, amendments, committee hearings, and any other issues that may impact our industry.