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

59A-5A-5. Regulatory action level event.

A. For purposes of the Risk-Based Capital Act [Chapter 59A, Article 5A NMSA 1978], "regulatory action level event" means any of the following events:

(1) the filing of a risk-based capital report by an insurer which indicates that the insurer's total adjusted capital is greater than or equal to its authorized control level risk-based capital but less than its regulatory action level risk-based capital;

(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;

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

(4) an insurer's failure to file a risk-based capital report by the filing date, unless the insurer has provided an explanation satisfactory to the superintendent and has cured the failure within ten days after the filing date;

(5) an insurer's failure to submit a risk-based capital plan to the superintendent by the date specified in Subsection C of Section 59A-5A-4 NMSA 1978;

(6) the superintendent's notification to an insurer that:

(a) the risk-based capital plan or revised risk-based capital plan submitted by the insurer is, in the superintendent's judgment, unsatisfactory; and

(b) the notification constitutes a regulatory action level event with respect to the insurer, unless the insurer has challenged the determination pursuant to Section 59A-5A-8 NMSA 1978;

(7) if an insurer challenges the superintendent's determination made pursuant to Paragraph (6) of this subsection, notification to the insurer that the superintendent has, after hearing, rejected the challenge;

(8) the superintendent's notification to an insurer that the insurer has failed to adhere to its risk-based capital plan or revised risk-based capital plan and that the failure has had or will have a substantial adverse effect on the ability of the insurer to eliminate the company action level event, unless the insurer has challenged the determination pursuant to Section 59A-5A-8 NMSA 1978; or

(9) if an insurer challenges the superintendent's determination made pursuant to Paragraph (8) of this subsection, notification to the insurer that the superintendent has, after hearing, rejected the challenge.

B. In the event of a regulatory action level event the superintendent shall:

(1) require the insurer to prepare and submit a risk-based capital plan or, if applicable, a revised risk-based capital plan;

(2) perform such examination or analysis as the superintendent deems necessary of the assets, liabilities and operations of the insurer, including a review of its risk-based capital plan or revised risk-based capital plan; and

(3) subsequent to the examination or analysis, issue an order specifying such corrective actions as the superintendent determines are required.

C. In determining corrective actions, the superintendent may take into account such factors as are deemed relevant based upon the superintendent's examination or analysis of the assets, liabilities and operations of the insurer, including but not limited to the results of any sensitivity tests undertaken pursuant to the risk-based capital instructions. The risk-based capital plan or revised risk-based capital plan shall be submitted on or before the later of the following dates:

(1) forty-five days after the occurrence of the regulatory action level event; or

(2) if the insurer challenges an adjusted risk-based capital report or plan pursuant to Section 59A-5A-8 NMSA 1978 and the challenge is not frivolous in the superintendent's judgment, forty-five days after notification to the insurer that the superintendent has, after hearing, rejected the insurer's challenge.

D. The superintendent may retain actuaries and investment experts and other consultants as he may deem necessary to review the insurer's risk-based capital plan or revised risk-based capital plan, examine or analyze the assets, liabilities and operations of the insurer and formulate the corrective order with respect to the insurer. The fees, costs and expenses incurred by consultants shall be paid by the affected insurer or such other party as the superintendent directs.