2018 New Mexico Statutes
Chapter 59A - Insurance Code
Article 8 - Assets and Liabilities
Section 59A-8-3 - Disallowance of "wash" transactions.
A. The superintendent shall disallow as an asset or as a credit against liabilities of an insurer, any sale or transfer of property or accounts or any reinsurance found by him after a hearing thereon to have been arranged for the purpose principally of an apparent but temporary betterment as to the transferor, vendor or ceding insurer's financial condition as of the date of any financial statement of the insurer. Without limiting the general purport of the foregoing provision, transfer, sale or reinsurance contracted for in fact within six (6) months prior to the date of any such financial statement and reversed or cancelled in fact within six (6) months after the date of such statement, or reinsurance under which the reinsurer bears no substantial insurance risk or chance of net loss to itself, shall prime [prima] facie be deemed to have been arranged principally for the purpose of such apparent betterment.
B. The superintendent shall disallow as an asset any deposit, funds or other property of the insurer found by him after a hearing thereon:
(1) not to be in good faith the property of the insurer; and
(2) if other than a deposit required to be made and held under or pursuant to statute, not freely subject to withdrawal or liquidation by the insurer at any time for payment or discharge of claims or other obligations arising under its policies; and
(3) to be resulting from arrangements made principally for the purpose of such apparent betterment as to the insurer's financial condition as at the date of any financial statement of the insurer.
C. The superintendent may suspend or revoke the certificate of authority of any insurer which has knowingly been party to any such transaction or attempt thereat.
History: Laws 1984, ch. 127, § 120.
Bracketed material. — The bracketed material was inserted by the compiler and is not part of the law.