2006 New Mexico Statutes - Section 59A-42-8 — Assessments.

59A-42-8. Assessments.

A.     For the purpose of providing the funds necessary to carry out the powers and duties of the association, the board of directors shall assess the member insurers, separately for each account, at such times and for such amounts as the board finds necessary. The board shall collect the assessments after thirty (30) days' written notice to the member insurers before payment is due.   

B.     There are three (3) classes of assessments:   

(1)     class A assessments shall be made for the purpose of meeting administrative costs and other general expenses not related to a particular insolvent insurer;   

(2)     class B assessments shall be made to the extent necessary to carry out the powers and duties of the association with regard to domestic insurers; and   

(3)     class C assessments shall be made to the extent necessary to carry out the powers and duties of the association with regard to foreign and alien insurers.   

C.     Computations of assessments are as follows:   

(1)     the amount of any class A assessment for each account shall be determined by the board. The amount of any class B or C assessment shall be divided among the accounts in the proportion that the premiums received by the insolvent insurer on the policies covered by each account bear to the premiums received by such insurer on all covered policies;   

(2)     class C assessments against member insurers for each account shall be in the proportion that the premiums received on business in this state by each assessed member insurer on policies covered by each account bear to such premiums received on business in this state by all assessed member insurers;   

(3)     class B assessments for each account shall be made separately for each state in which the insolvent domestic insurer was authorized to transact insurance at any time, in the proportion that the premiums received on business in that state by the insolvent insurer on policies covered by such account bear to such premiums received in all the states. The assessments against member insurers shall be in the proportion that the premiums received on business in each state by each assessed member insurer on policies covered by each account bear to such premiums received on business in each state by all assessed member insurers;   

(4)     assessments for funds to meet the requirements of the association with respect to an insolvent insurer shall not be made until necessary to implement the purposes of this article. Classification of assessments under Subsection B of this section and computation of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible.   

D.     The association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. The total of all assessments upon a member insurer for each account shall not in any one calendar year exceed two percent of the member insurer's premiums in this state on the policies covered by the account.   

E.     In the event an assessment against a member insurer is abated or deferred in whole or in part because of the limitations set forth in Subsection D of this section, the amount by which the assessment is abated or deferred shall be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. If the maximum assessment, together with the other assets of the association in any account, does not provide in any one year in any account an amount sufficient to carry out the responsibilities of the accociation [association], the necessary additional funds shall be assessed as soon thereafter as permitted by this article.   

F.     The board may, by an equitable method as established in the plan of operation, refund to member insurers, in proportion to the contribution of each member insurer to that account, the amount by which the assets of the account exceed the amount the board finds is necessary to carry out during the coming year the obligations of the association, including assets accruing from net realized gains and income from investments. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the association and for future losses.   

G.     The association shall issue to each insurer paying an assessment under this article a certificate of contribution in a form prescribed by the superintendent for the amount paid. All outstanding certificates are of equal dignity and priority without reference to amounts or dates of issue.   

H.     The accumulation of class A assessments beyond the amount necessary to meet current obligations under this article shall be maintained as trust funds deposited in one or more federally insured financial institutions. These funds may be securely invested so as to generate income. The superintendent shall be a party to the deposit, and no withdrawal shall be made without his authorization, either specifically or on a standing basis pursuant to a written plan.   

I.     As used in this section, "premiums" means those for the calendar year preceding the determination of impairment.