2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 5A - Risk-Based Capital › Section 59A-5A-3 - Risk-based capital reports.

A. On or before March 1 each year, every domestic insurer and health organization shall prepare and submit to the superintendent a report of its risk-based capital levels as of December 31 of the immediately preceding calendar year, in a form and containing such information as is required by the risk-based capital instructions. In addition, every domestic insurer and health organization shall file its risk-based capital report with:
(1) the national association of insurance commissioners in accordance with the risk-based capital instructions; and
(2) the insurance commissioner of each state in which the insurer or health organization is authorized to do business, if the insurance commissioner for that state has notified the insurer or health organization of the request in writing. The insurer or health organization shall file a copy of its risk-based capital report with each commissioner not later than March 1 each year or fifteen days from receipt of the notice, whichever is later.
B. A life or health insurer's or a fraternal benefit society's risk-based capital shall be determined in accordance with the formula in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following factors:
(1) asset risk;
(2) the risk of adverse insurance experience with respect to the insurer's liabilities and obligations;
(3) the interest rate risk with respect to the insurer's business; and
(4) all other business risks and other relevant risks set forth in the risk-based capital instructions.
C. A health organization's or property and casualty insurer's risk-based capital shall be determined in accordance with the appropriate formula in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following factors:
(1) asset risk;
(2) credit risk;
(3) underwriting risk; and
(4) all other business risks and other relevant risks set forth in the risk-based capital instructions.
D. Capital in excess of the amount produced by the risk-based capital requirements contained in the Risk-Based Capital Act and formulas, schedules and instructions referenced in the Risk-Based Capital Act is desirable in the business of insurance. Additional capital is used and useful in the insurance business and helps to secure an insurer or health organization against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in the Risk-Based Capital Act. Accordingly, insurers and health organizations should seek to maintain capital above the risk-based capital levels required by that act.
E. If a domestic insurer or health organization files a risk-based capital report that in the superintendent's judgment is inaccurate, then the superintendent shall adjust the risk-based capital report to correct the inaccuracy and shall notify the insurer or health organization of the adjustment. The notice shall contain a statement of the reason for the adjustment.
History:
1978 Comp., § 59A-5A-3, enacted by Laws 1995, ch. 149, § 3; 2014, ch. 59, § 3.
ANNOTATIONS
The 2014 amendment,
effective July 1, 2014, subjected health organizations and fraternal benefit organizations to the Risk-Based Capital Act; in Subsection A, in the first sentence, after "year, every domestic insurer", added "and health organization", and in the second sentence, after "addition, every domestic insurer" added "and health organization"; in Subsection A, Paragraph (2), in the first sentence, after "in which the insurer", added "or health organization", and after "notified the insurer", added "or health organization", and in the second sentence, after "The insurer", added "or health organization"; in Subsection B, in the first sentence, after "health insurer's", added "or a fraternal benefit society's"; in Subsection C, in the first sentence, after "A", added "health organization's or", after "organization's or property", deleted "or" and added "and", and after "in accordance with the", added "appropriate"; in Subsection D, in the first sentence, deleted "An excess of", after "Capital", deleted "over" and added "in excess of", after "in excess of the amount", deleted "calculated" and added "produced", after "produced by the", added "risk-based capital requirements contained in the Risk-Based Capital Act and", in the second sentence, after "secure an insurer", added "or health organization", and in the third sentence, after "insurers", added "and health organizations"; and in Subsection E, in the first sentence, after "domestic insurer", added "or health organization", and after "notify the insurer", added "or health organization".
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.