Unpaid insurance taxes start coming in
$17.9 million of $65 million received
SANTA FE — A state agency has already collected more than one-quarter of the nearly $65 million in unpaid premium taxes owed by insurance companies, giving New Mexico a cash infusion just in time for the holidays.
A spokeswoman for the Office of the Superintendent of Insurance told the Journal the agency has collected more than $17.9 million from six insurers as of Thursday. She did not provide the names of the companies but said they would eventually be made public.
The agency began sending invoices to the insurance companies last month, after a special audit released in October by then-State Auditor Tim Keller identified $65 million in underpaid premium taxes from 2003 to 2016.
Specifically, the audit looked at premium tax filings from 30
companies — primarily health insurers — and found that 17 of them owed money to the state.
The Office of the Superintendent of Insurance then began sending insurance companies claims last month about unpaid taxes. The companies have the option of requesting an administrative hearing if they dispute the tax claims and filing a court appeal if they don’t agree with the hearing’s outcome.
Heather Widler, a spokeswoman for the agency, said no administrative hearings have been requested or scheduled.
The issue of underpaid premium taxes has sparked several audits and prompted talk of potential legislation during the coming 30-day session to shift collection responsibility from the insurance agency to the Taxation and Revenue Department, which already collects most other types of state taxes.
More than a third of the money in question — nearly $29 million — is owed by New Mexico’s largest health insurer, Presbyterian Health Plan, according to the outside audit, which was ordered after disagreement over previous estimates.
Presbyterian recently reached a settlement agreement with the Attorney General’s Office for part of the money at issue. It will pay the state $18.5 million under the settlement’s terms.
Meanwhile, State Insurance Superintendent John Franchini told lawmakers last year that some companies may have “gamed” the state’s tax collection system. He has vowed to recover as much of the money as possible.
New Mexico has weathered several consecutive years of spending cuts and other budget belt-tightening due to lower-than-expected revenue collections. But new revenue estimates unveiled this week project there will be $199 million in “new” money available in the coming fiscal year, a figure that does not include money collected by the insurance agency.