2011 New Mexico Statutes
Chapter 59A: Insurance Code
Article 41: Conservation, Rehabilitation and Liquidation, 59A-41-1 through 59A-41-57
Section 59A-41-25: Requirements of insurer in hazardous financial condition.

59A-41-25. Requirements of insurer in hazardous financial condition.

A. Whenever he finds an insurer authorized to transact insurance in this state to be in hazardous financial condition, as referred to in Section 59A-41-24 NMSA 1978, the superintendent may order the insurer to take such action as he deems reasonably necessary to rectify the hazardous condition, including but not limited to one or more of the following measures:

(1) require the insurer to reduce the volume of new business being accepted to an amount, for the period of time, and in a manner prescribed in the superintendent's order;

(2) require submission of reinsurance contracts for approval and make such further requirements as to the insurer's reinsurance arrangements as the superintendent deems necessary;

(3) require the insurer to bulk-reinsure all or any part of its New Mexico business with another insurer authorized to transact such business in this state;

(4) require a contribution to the insurer's surplus on such terms, in such amount, and in such manner as the superintendent deems necessary;

(5) require the insurer to maintain with the superintendent a special deposit in cash or securities eligible for investment of funds of a like domestic insurer under Chapter 59A, Article 9 NMSA 1978 and in amount not less than the lesser of:

(a) the amounts required to be maintained as: 1) reserves for losses and loss adjustment expenses on New Mexico business; and 2) reserves for unearned premiums on New Mexico business. In determining the amount of deposit required, the reserves for losses, loss adjustment expenses and unearned premiums shall be reduced only for reinsurance ceded to authorized or accredited reinsurers which maintain with an independent custodian cash or marketable securities in amount not less than the sum of the reinsurer's reserves for losses, loss adjustment expenses and unearned premiums as to reinsurance assumed; or

(b) five hundred thousand dollars ($500,000). Any deposit required by this paragraph shall be for the protection and benefit only of New Mexico policyholders or claimants, or both, and shall not be withdrawn until the superintendent terminates the requirement of the deposit. This paragraph shall not apply as to any domestic insurer, and Subparagraph (b) of this paragraph shall not apply as to any life insurer;

(6) require the insurer to reduce general insurance and commission expenses by specified methods;

(7) require the insurer to suspend or limit the declaration and payment of dividends to its stockholders or to its policyholders;

(8) require the insurer to file reports in a form acceptable to the superintendent concerning the market value of an insurer's assets;

(9) require the insurer to limit or withdraw from certain investments or discontinue certain investment practices to the extent the superintendent deems necessary;

(10) require the insurer to document the adequacy of premium rates in relation to the risks insured; or

(11) require the insurer to file, in addition to regular annual statements, interim financial reports on the form adopted by the national association of insurance commissioners or on such format as required by the superintendent.

B. The insurer may request a hearing to review the order in accordance with Chapter 59A, Article 4 NMSA 1978; however, the superintendent shall give written notice of the hearing not less than ten days in advance of the hearing, and the hearing shall be held privately unless the insurer requests a public hearing, in which case the hearing shall be public.