2011 New Mexico Statutes
Chapter 59A: Insurance Code
Article 5A: Risk-Based Capital, 59A-5A-1 through 59A-5A-13
Section 59A-5A-7: Mandatory control level event.

59A-5A-7. Mandatory control level event.

A. As used in the Risk-Based Capital Act [Chapter 59A, Article 5A NMSA 1978], "mandatory control level event" means any of the following events:

(1) the filing of a risk-based capital report which indicates that an insurer's total adjusted capital is less than its mandatory control 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; or

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

B. In the event of a mandatory control level event, the superintendent shall:

(1) with respect to a life insurer, take such actions as are necessary to place the insurer under regulatory control pursuant to Chapter 59A, Article 41 NMSA 1978. In that event, the mandatory control level event shall constitute sufficient grounds for the superintendent to take action pursuant to Chapter 59A, Article 41 NMSA 1978, and the superintendent shall have the rights, powers and duties with respect to the insurer set forth in Chapter 59A, Article 41 NMSA 1978. Notwithstanding the foregoing provisions of this paragraph, the superintendent may forego action for up to ninety days after the mandatory control level event if the superintendent finds there is a reasonable expectation that the mandatory control level event can be eliminated within the ninety-day period; or

(2) with respect to a property or casualty insurer, take such actions as are necessary to place the insurer under regulatory control pursuant to Chapter 59A, Article 41 NMSA 1978, or, in the case of an insurer that is writing no business and that is running off its existing business, may allow the insurer to continue its run off under the superintendent's supervision. In either event, the mandatory control level event shall constitute sufficient grounds for the superintendent to take action pursuant to Chapter 59A, Article 41 NMSA 1978, and the superintendent shall have the rights, powers and duties with respect to the insurer as are set forth in Chapter 59A, Article 41 NMSA 1978. Notwithstanding the foregoing provisions of this paragraph, the superintendent may forego action for up to ninety days after the mandatory control level event if the superintendent finds there is a reasonable expectation that the mandatory control level event can be eliminated within the ninety-day period.