2011 New Mexico Statutes
Chapter 59A: Insurance Code
Article 42: Life and Health Insurance Guaranty Fund, 59A-42-1 through 59A-42-16
Section 59A-42-7: Powers and duties of association.

59A-42-7. Powers and duties of association.

A. If a member insurer is insolvent, the association, with respect to domestic insurers or covered policies of residents issued by foreign or alien insurers, shall, subject to any conditions imposed by the association other than those which impair the contractual obligations of the insolvent insurer and subject to approval of the superintendent:

(1) guarantee or reinsure or cause to be guaranteed or reinsured, all the covered policies of the insolvent insurer;

(2) provide money, pledges, notes, guarantees or other means to assure payment of the contractual obligations of the insolvent insurer, or

(3) loan money to the insolvent insurer.

If the association fails to act within a reasonable time, the superintendent shall assume the powers and duties of the association and cause it to act.

B. The association may take action as provided in Subsection A of this section prior to a member insurer being declared insolvent by a court where the insurer may be potentially unable to fulfill its contractual obligations and the superintendent has so reported that status under Section 760 [59A-42-11 NMSA 1978] of this article.

C. The association shall have no liability under this section for any covered policy of a foreign or alien insurer whose domiciliary jurisdiction or state of entry provides, by statute or regulation, for residents of this state protection substantially similar to that provided by this article for residents of other states.

D. The association may:

(1) employ or retain persons or designate servicing facilities necessary to handle claims and perform other duties of the association;

(2) borrow funds necessary to effect the purposes of this article in accord with the plan of operation;

(3) sue or be sued and intervene in any court having jurisdiction over an insolvent insurer;

(4) negotiate and become a party to contracts necessary to carry out the purpose of this article;

(5) perform other acts necessary or proper to effectuate the purpose of this article; and

(6) refund to the member insurers in proportion to the contribution of each member insurer to that account that amount by which the assets of the account exceed the liabilities if, at the end of any calendar year, the board of directors finds that the assets of the association in any account exceed the liabilities of that account as estimated by the board of directors for the coming year.

E. Any person receiving benefits under this article shall be deemed to have assigned his rights under the covered policy to the association to the extent of the benefits received whether the benefits are payments of contractual obligations or continuation of coverage. The association may require an assignment to it of such rights by any payee, beneficiary, insured or annuitant as a condition precedent to the receipt of any rights or benefits conferred by this article. The association shall be subrogated to these rights against the assets of any insolvent insurer. The subrogation rights shall have the same priority against the assets of the insolvent insurer as that possessed by the person entitled to receive benefits under this article.

F. The contractual obligations of the insolvent insurer for which the association becomes or may become liable shall be as great as but no greater than the contractual obligations would have been in the absence of insolvency, but the aggregate liability of the association shall not exceed one hundred thousand dollars ($100,000) in cash or cash surrender value, or three hundred thousand dollars ($300,000) for all benefits, including cash or cash surrender values, with respect to any one life or such higher amounts as the superintendent may set by regulation.