2011 New Mexico Statutes
Chapter 59A: Insurance Code
Article 5A: Risk-Based Capital, 59A-5A-1 through 59A-5A-13
Section 59A-5A-4: Company action level event.

59A-5A-4. Company action level event.

A. As used in the Risk-Based Capital Act [Chapter 59A, Article 5A NMSA 1978], a "company action level event" means any one or more of the following events:

(1) the filing of a risk-based capital report by an insurer which indicates that:

(a) the insurer has total adjusted capital greater than or equal to its regulatory action level risk-based capital but less than its company action level risk-based capital; or

(b) a life or health insurer has total adjusted capital greater than or equal to its company action level risk-based capital but less than two hundred fifty percent of its authorized control level risk-based capital and has a negative trend;

(2) the superintendent's notification to an insurer that its adjusted risk-based capital report indicates the existence of an event described in Paragraph (1) of this subsection, unless the insurer challenges the adjusted report pursuant to Section 59A-5A-8 NMSA 1978; or

(3) if an insurer challenges the adjusted report, notification to the insurer that the superintendent has, after hearing, rejected the challenge.

B. In the event of a company action level event, the insurer shall prepare and submit to the superintendent a risk-based capital plan, which shall:

(1) identify the conditions which contribute to the company action level event;

(2) contain proposals of corrective actions which the insurer intends to take to eliminate the company action level event;

(3) provide projections of the insurer's expected financial results in the current year and at least the four succeeding years, both in the absence of and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital and surplus. Projections for new and renewal business may, if appropriate, include separate projections for each major line of business and separately identify each significant income, expense and benefit component;

(4) identify the key assumptions impacting the insurer's projections and the sensitivity of the projections to the assumptions; and

(5) identify the quality of, and problems associated with, the insurer's business, including but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case.

C. The risk-based capital plan shall be submitted on or before the later of the following dates:

(1) forty-five days after the company action level event; or

(2) if the insurer challenges the adjusted risk-based capital report pursuant to Section 59A-5A-8 NMSA 1978, forty-five days after the date of the notification to the insurer that the superintendent has, after hearing, rejected the insurer's challenge.

D. Within sixty days after the submission of an insurer's risk-based capital plan, the superintendent shall notify the insurer whether the plan shall be implemented or is, in the superintendent's judgment, unsatisfactory. If the superintendent determines the risk-based capital plan is unsatisfactory, the notification to the insurer shall set forth the reasons for the determination, and may set forth proposed revisions that will render the plan satisfactory. Upon notification, the insurer shall prepare a revised risk-based capital plan, which may incorporate by reference any revisions proposed by the superintendent, and shall submit the revised plan to the superintendent. The revised plan shall be submitted on or before the last of the following dates:

(1) forty-five days after the date of the superintendent's notification; or

(2) if the insurer challenges the notification pursuant to Section 59A-5A-8 NMSA 1978, forty-five days after the date of the notification to the insurer that the superintendent has, after hearing, rejected the insurer's challenge.

E. A notification that the insurer's risk-based capital plan or revised risk-based capital plan is unsatisfactory may include a statement that the notification constitutes a regulatory action level event, subject to the insurer's right to a hearing pursuant to Section 59A-5A-8 NMSA 1978.

F. Every domestic insurer which files a risk-based capital plan or revised risk-based capital plan with the superintendent shall file a copy of the risk-based capital plan and any revised risk-based capital plan with the insurance commissioner of each state in which the insurer is authorized to do business if:

(1) the state has confidentiality provisions substantially similar to those in Subsection A of Section 59A-5A-9 NMSA 1978; and

(2) the insurance commissioner for that state has notified the insurer of his request in writing. The insurer shall file a copy of the risk-based capital plan or revised risk-based capital plan with each such commissioner on or before the later of the following dates:

(a) fifteen days after the receipt of notice to file a copy of its risk-based capital plan or revised risk-based capital plan with the state; or

(b) the date the risk-based capital plan or revised risk-based capital plan is filed under Subsections C and D of this section.