2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 12E - Credit for Reinsurance › Section 59A-12E-3 - Credit allowed a domestic ceding insurer.

A. Credit for reinsurance shall be allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of the Credit for Reinsurance Act. The superintendent shall adopt and promulgate rules for:
(1) specific additional requirements relating to or setting forth the valuation of assets or reserve credits;
(2) the amount and forms of security supporting reinsurance arrangements described in Section 17 [59A-12E-17 NMSA 1978] of the Credit for Reinsurance Act; and
(3) the circumstances pursuant to which credit shall be reduced or eliminated.
B. Credit for reinsurance shall be allowed a domestic ceding insurer pursuant to this section only for cessions of those kinds or classes of business for which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance.
C. Credit for reinsurance shall be allowed a domestic ceding insurer pursuant to this section only if the applicable requirements of Subsection F of Section 13 [59A-12E-13 NMSA 1978] of the Credit for Reinsurance Act have been satisfied.
D. Credit for reinsurance shall be allowed a domestic ceding insurer when the reinsurance is ceded to an assuming insurer:
(1) that is licensed to transact insurance or reinsurance in this state or is accredited by the superintendent as a reinsurer in this state; or
(2) that is domiciled in, or in the case of a United States branch of an alien assuming insurer, is entered through, a state that employs standards regarding credit for reinsurance substantially similar to those applicable pursuant to the Credit for Reinsurance Act and the assuming insurer or United States branch of an alien assuming insurer maintains a surplus as regards policyholders in an amount not less than twenty million dollars ($20,000,000) and submits to the authority of the superintendent to examine its books and records; provided that the requirements of this paragraph shall not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers within a single holding company system; and
(3) that maintains a trust fund in a qualified United States financial institution as defined in Paragraph (2) of Subsection E of Section 2 [59A-12E-2 NMSA 1978] of the Credit for Reinsurance Act for the payment of the valid claims of its United States ceding insurers, their assigns and successors in interest; provided that to enable the superintendent to determine the sufficiency of the trust fund, the assuming insurer shall report annually to the superintendent information substantially the same as that required to be reported on the national association of insurance commissioners annual statement form by licensed insurers; and further provided that the assuming insurer shall submit to examination of its books and records by the superintendent and bear the expense of examination.
E. Credit for reinsurance shall not be allowed pursuant to Paragraph (3) of Subsection D of Section 3 [59A-12E-3 NMSA 1978] of the Credit for Reinsurance Act unless the form of the trust pursuant to Subsection D of this section and any amendments to the trust have been approved by:
(1) the regulator of insurance of the state where the trust is domiciled; or
(2) the regulator of insurance of another state that, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust.
History:
Laws 2022, ch. 35, § 3.
ANNOTATIONS
Compiler's notes.
— Laws 2022, ch. 35, § 3 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.