2011 New Mexico Statutes
Chapter 59A: Insurance Code
Article 5A: Risk-Based Capital, 59A-5A-1 through 59A-5A-13
Section 59A-5A-3: Risk-based capital reports.

59A-5A-3. Risk-based capital reports.

A. On or before March 1 each year, every domestic insurer shall prepare and submit to the superintendent a report of its risk-based capital levels as of December 31 of the immediately preceding calendar year, in a form and containing such information as is required by the risk-based capital instructions. In addition, every domestic insurer shall file its risk-based capital report with:

(1) the national association of insurance commissioners in accordance with the risk-based capital instructions; and

(2) the insurance commissioner of each state in which the insurer is authorized to do business, if the insurance commissioner for that state has notified the insurer of his request in writing. The insurer shall file a copy of its risk-based capital report with each such commissioner not later than March 1 each year or fifteen days from receipt of the notice, whichever is later.

B. A life or health insurer's risk-based capital shall be determined in accordance with the formula in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following factors:

(1) asset risk;

(2) the risk of adverse insurance experience with respect to the insurer's liabilities and obligations;

(3) the interest rate risk with respect to the insurer's business; and

(4) all other business risks and other relevant risks set forth in the risk-based capital instructions.

C. A property or casualty insurer's risk-based capital shall be determined in accordance with the formula in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following factors:

(1) asset risk;

(2) credit risk;

(3) underwriting risk; and

(4) all other business risks and other relevant risks set forth in the risk-based capital instructions.

D. An excess of capital over the amount calculated by the formulas, schedules and instructions referenced in the Risk-Based Capital Act [Chapter 59A, Article 5A NMSA 1978] is desirable in the business of insurance. Additional capital is used and useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in the Risk-Based Capital Act. Accordingly, insurers should seek to maintain capital above the risk-based capital levels required by that act.

E. If a domestic insurer files a risk-based capital report which in the superintendent's judgment is inaccurate, then the superintendent shall adjust the risk-based capital report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice shall contain a statement of the reason for the adjustment.