2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 5A - Risk-Based Capital › Section 59A-5A-7 - Mandatory control level event.

A. As used in the Risk-Based Capital Act, "mandatory control level event" means any of the following events:
(1) the filing of a risk-based capital report that indicates that an insurer's or health organization's total adjusted capital is less than its mandatory control level risk-based capital;
(2) the superintendent's notification to an insurer or health organization that its adjusted risk-based capital report indicates the existence of an event described in Paragraph (1) of this subsection, unless the insurer or health organization challenges the adjusted report pursuant to Section 59A-5A-8 NMSA 1978; or
(3) if the insurer or health organization challenges the adjusted risk-based capital report, notification to the insurer or health organization that the superintendent has, after hearing, rejected the insurer's or health organization's challenge.
B. In the event of a mandatory control level event, the superintendent shall:
(1) with respect to a life or health insurer, fraternal benefit society or health organization, take such actions as are necessary to place the life or health insurer, fraternal benefit society or health organization under regulatory control pursuant to Chapter 59A, Article 41 NMSA 1978. In that event, the mandatory control level event constitutes sufficient grounds for the superintendent to take action pursuant to Chapter 59A, Article 41 NMSA 1978, and the superintendent has 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 forgo action for up to ninety days after the mandatory control level event if the superintendent finds that 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 and 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 constitutes sufficient grounds for the superintendent to take action pursuant to Chapter 59A, Article 41 NMSA 1978, and the superintendent has 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 forgo action for up to ninety days after the mandatory control level event if the superintendent finds that there is a reasonable expectation that the mandatory control level event can be eliminated within the ninety-day period.
History:
1978 Comp., § 59A-5A-7, enacted by Laws 1995, ch. 149, § 7; 2014, ch. 59, § 7.
ANNOTATIONS
The 2014 amendment,
effective July 1, 2014, subjected health organizations and fraternal benefit organizations to the Risk-Based Capital Act; in Subsection A, Paragraph (1), after "an insurer's", added "or health organization's"; in Subsection A, Paragraph (2), after "notification to an insurer", added "or health organization", and after "unless the insurer", added "or health organization"; in Subsection A, Paragraph (3), after "if the insurer", added "or health organization", after "adjusted", added "risk-based capital", after "notification to the insurer", added "or health organization", and after "rejected the insurer's", added "or health organization's"; in Subsection B, Paragraph (1), after "with respect to a life", added "or health", after "with respect to a life or health insurer", added "fraternal benefit society or health organization", after "necessary to place the", added "life or health", and after "necessary to place the life or health insurer", added "fraternal benefit society or health organization"; and in Subsection B, Paragraph (2), in the first sentence, after "respect to a property", deleted "or" and added "and".
Severability.
— Laws 2014, ch. 59, § 12 provided that if any part or application of the provisions of the Risk-Based Capital Act is held invalid, the remainder or its application to other situations or persons shall not be affected.