Coercing the purchase of insurance from particular broker consists of any person engaged in selling real or personal property, or the lending of money, requiring as a condition precedent to the sale, financing the purchase of such property or the lending of money, or the renewal of extension of any loan or mortgage, that the purchaser of such property, or recipient of the financial assistance negotiate any policy of insurance or renewal thereof through a particular insurance company, agent, solicitor or broker.

Nothing in this section shall be construed to prevent the exercise by any person [of] the right to designate minimum standards as to the company, the terms and provisions of the policy and the adequacy of the coverage with respect to insurance on property pledged or mortgaged to such person.

Whoever commits coercing the purchase of insurance from particular broker is guilty of a petty misdemeanor.

History: 1953 Comp., § 40A-16-15, enacted by Laws 1963, ch. 303, § 16-15.

Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.

Debtor's executed contract, as condition precedent to loan, illegal. — Where an insurance creditor makes the execution of an insurance contract by the debtor a condition precedent to granting a loan, the contract is clearly illegal. Capo v. Century Life Ins. Co., 1980-NMSC-058, 94 N.M. 373, 610 P.2d 1202.

Contract not voided by violation. — Although requirement in loan agreement that borrowers purchase life insurance from named company as a condition precedent to the lending of money was illegal, directly contravening this section, that part of the contract was separable without materially affecting the remainder dealing with the note, mortgage and loan, which were not made unenforceable thereby. Forrest Currell Lumber Co. v. Thomas, 1970-NMSC-018, 81 N.M. 161, 464 P.2d 891.

But refund required. — This section, prohibiting the coercing of the purchase of insurance from a particular broker, placed a penalty on the party coercing but not on the other; hence, amount obtained by insurance company through the illegal agreement should be returned to the insureds, even though the insurance company could not have avoided liability on its policies because of the illegality. Forrest Currell Lumber Co. v. Thomas, 1970-NMSC-018, 81 N.M. 161, 464 P.2d 891.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 43 C.J.S. Innkeepers § 28.