2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 12E - Credit for Reinsurance › Section 59A-12E-13 - Agreements of reciprocal jurisdiction reinsurers.

A. With respect to reciprocal jurisdiction reinsurers, credit may be taken pursuant to this section only for reinsurance agreements entered into, amended or renewed on or after the effective date of the Credit for Reinsurance Act and only with respect to losses incurred and reserves reported on or after the later of:
(1) the date on which the assuming insurer has met all eligibility requirements pursuant to Section 10 [59A-12E-10 NMSA 1978] of the Credit for Reinsurance Act; and
(2) the effective date of the new reinsurance agreement, amendment or renewal.
B. This section does not alter or impair a ceding insurer's right to take credit for reinsurance, to the extent that credit is not available pursuant to this section, as long as the reinsurance qualifies for credit pursuant to any other applicable provision of the Credit for Reinsurance Act.
C. Nothing in this section shall authorize an assuming insurer to withdraw or reduce the security provided pursuant to any reinsurance agreement except as permitted by the terms of the agreement.
D. Nothing in this section shall limit, or in any way alter, the capacity of parties to any reinsurance agreement to renegotiate the agreement.
E. Credit shall be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of Sections 3 [59A-12E-3 NMSA 1978] through 12 [59A-12E-12 NMSA 1978] and Subsections A through D of Section 13 [59A-12E-13 NMSA 1978] of the Credit for Reinsurance Act, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction.
F. If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this state, the credit permitted by Paragraphs (2) and (3) of Subsection D of Section 3, Section 4 [59A-12E-4 NMSA 1978] and Subsections A through C of Section 6 [59A-12E-6 NMSA 1978] of the Credit for Reinsurance Act shall not be allowed unless the assuming insurer agrees in the reinsurance agreements:
(1) that in the event of the failure of the assuming insurer to perform its obligations pursuant to the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States; will comply with all requirements necessary to give the court jurisdiction; and will abide by the final decision of the court or of any appellate court in the event of an appeal; and
(2) to designate the superintendent or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding insurer; provided that this subsection is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement.
G. If the assuming insurer does not meet the requirements of this section, Subsections B and D of Section 3 and Sections 10 [59A-12E-10 NMSA 1978] through 13 of the Credit for Reinsurance Act, the credit permitted by Paragraph (3) of Subsection D of Section 3, Subsection E of Section 3 and Sections 4 and 6 of the Credit for Reinsurance Act shall not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions:
(1) notwithstanding any other provision in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by Section 6 of the Credit for Reinsurance Act, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings pursuant to the laws of its state or country of domicile, the trustee shall comply with an order of the government agency with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the government agency with regulatory oversight all of the assets of the trust fund;
(2) the assets shall be distributed by and claims shall be filed with and valued by the government agency with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies;
(3) if the government agency with regulatory oversight determines that the assets of the trust fund or any part of the fund are not necessary to satisfy the claims of the United States ceding insurers of the grantor of the trust, the assets or part of the assets shall be returned by the government agency with regulatory oversight to the trustee for distribution in accordance with the trust agreement; and
(4) the grantor shall waive any right otherwise available to it pursuant to United States law that is inconsistent with this subsection.
History:
Laws 2022, ch. 35, § 13.
ANNOTATIONS
Compiler's notes.
— Laws 2022, ch. 35, § 13 was not enacted as part of the Insurance Code, but was compiled there for the convenience of the user.
Emergency clauses.
— Laws 2022, ch. 35, § 20 contained an emergency clause and was approved March 2, 2022.