New Mexico Statutes Chapter 59A. Insurance Code § 59A-34-19. Participating policies

A. If provided for in its articles of incorporation a stock or mutual insurer may issue any or all of its policies with or without participation in profits, savings or unabsorbed portions of premiums, may classify policies issued on a participating or nonparticipating basis and may determine the right to participate and the extent of participation of any class or classes of policies.  Any such classification or determination shall be reasonable, and shall not unfairly discriminate as between policyholders within the same classification.

B. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.

C. After the first policy year no dividend, otherwise earned, shall be made contingent upon payment of the renewal premium on any policy or contract;  but a participating life or health insurance policy providing for participation at the end of the first or second policy year or the first and second policy year may provide that such dividend or dividends will be paid subject to payment of the premium for the year next ensuing such first or second policy year.

D. As to life insurance policies, this section is subject to Section 393 (special requirements as to participating policies) of the Insurance Code.