reglab/statecodes huggingface dataset:
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-3 - Insurance business exclusive; exceptions.

A. Except as provided in this section, no domestic insurer shall engage in any business other than the insurance business and in business activities reasonably and necessarily incidental to such insurance business.
B. A title insurer may also engage in business as an escrow agent.
C. Any insurer may also engage in business activities reasonably related to the management, supervision, servicing of and protection of its interests as to its lawful investments, and to full utilization of its facilities.
D. An insurer may own subsidiaries which may engage in such businesses as are provided for in Section 145 [59A-9-12 NMSA 1978] of the Insurance Code.
History:
Laws 1984, ch. 127, § 549.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-4 - Incorporation.

A. Seven (7) or more individuals who have reached the age of majority may incorporate a stock insurer; ten (10) or more such individuals may incorporate a mutual insurer. Not less than two-thirds of the incorporators shall be citizens of the United States and residents of New Mexico. The articles of incorporation shall be signed by all incorporators and acknowledged by not less than three (3) of the incorporators as deeds are required to be acknowledged.
B. The articles of incorporation shall state:
(1) the name of the corporation; if a mutual, the word "mutual" shall be part of the name;
(2) the duration of its existence, which may be perpetual;
(3) if a stock corporation, the number of shares of authorized capital stock and the par value of each such share;
authorized capital stock shall consist solely of one class of common stock with par value of not less that five dollars ($5) per share, and shares without par value shall not be authorized; the extent, if any, to which each share shall be liable to assessment;
(4) if a mutual corporation, the maximum contingent liability of each member for payment of losses and expenses incurred, which liability shall be prominently stated in the articles of incorporation, and such conditions applicable to nonassessable policies as may be consistent with law;
(5) the limitations, if any, on the corporation's indebtedness;
(6) designation of the superintendent as an agent of the corporation upon whom may be served all process in any action or proceeding against the corporation;
(7) the kinds of insurance the corporation is formed to transact, according to the definitions set forth in Article 7 [Chapter 59A, Article 7 NMSA 1978] of the Insurance Code;
(8) the number of directors, not less than five (5), who shall conduct the corporation's affairs, and the names and addresses of the corporation's first directors and officers for a stated term of office of not less than six (6) months or more than one year's duration from date of incorporation;
(9) the date and time of the annual meeting of stockholders or members;
(10) the city or town in New Mexico in which is to be located the corporation's principal place of business;
(11) such other provisions, not inconsistent with law, as deemed appropriate by the incorporators; and
(12) the names and addresses of the incorporators.
History:
Laws 1984, ch. 127, § 550.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance §§ 105, 107, 303.
44 C.J.S. Insurance § 115.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-5 - Filing, recording of articles; authority to raise capital or transact insurance required.

A. When executed and acknowledged by the incorporators, the articles of incorporation shall be filed with the secretary of state, and copies thereof certified by the secretary of state shall be filed with the superintendent and recorded in the office of the county clerk in the county of New Mexico wherein the corporation proposes to have its principal place of business.
B. Upon completion of such filings and recording, the secretary of state shall issue to the corporation a certificate of incorporation, and incorporation shall be deemed effective as of date of issuance of such certificate.
C. The corporation shall not raise any capital through sale of shares or otherwise except in compliance with Chapter 59A, Article 35 NMSA 1978, and shall not transact business as an insurer until it has applied for and received from the superintendent a certificate of authority as provided for under Chapter 59A, Article 5 NMSA 1978.
History:
Laws 1984, ch. 127, § 551; 2013, ch. 75, § 20.
ANNOTATIONS
The 2013 amendment,
effective July 1, 2013, required that articles of incorporation be filed with the secretary of state; in Subsection A, after "shall be filed", deleted "in the office of the corporation commission" and added "with the secretary of state" and after "certified by the", deleted "corporation commission" and added "secretary of state"; in Subsection B, after "filings and recording, the", deleted "corporation commission" and added "secretary of state"; and in Subsection C, after "compliance with", added "Chapter 59A", after "Article 35" deleted "(sale of insurance securities) of the insurance code" and added "NMSA 1978", after "provided for under", added "Chapter 59A", and after "Article 5", deleted "(authorization of insurers and general requirements) of the Insurance Code" and added "NMSA 1978".
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-6 - Amendment of articles of incorporation.

A. The articles of incorporation of a stock insurer may be amended in accordance with the general statutes of New Mexico applying to corporations formed for profit. A copy of the amendment, certified by the secretary of state, shall be filed with the superintendent, and a copy likewise certified shall be recorded in the county clerk's office of the county of the corporation's principal place of business. No amendment shall reduce authorized capital below the amount of paid-in capital stock required under Section 59A-5-16 NMSA 1978 for the certificate of authority covering the kinds of insurance immediately thereafter to be transacted by the insurer.
B. The articles of incorporation of a mutual insurer may be amended by the affirmative vote of two-thirds of its members present in person or by proxy at a regular or special meeting of its members of which notice in writing of the proposed amendment was mailed to all members at least thirty days in advance, unless notice shall otherwise be provided for as approved by the superintendent. A certificate of the amendment, signed and acknowledged by the president and attested by the secretary of the corporation, shall be filed and recorded as required of original articles of incorporation.
History:
Laws 1984, ch. 127, § 552; 2013, ch. 75, § 21.
ANNOTATIONS
The 2013 amendment,
effective July 1, 2013, required the secretary of state to certify amendments of articles of incorporation of stock insurers; and in Subsection A, in the second sentence after "certified by the", deleted "corporation commission" and added "secretary of state", and in the third sentence, after "Section", deleted "83 of the Insurance Code" and added "59A-5-16 NMSA 1978".
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 104.
44 C.J.S. Insurance § 117.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-7 - Nonuser of corporate charter.

A. Any domestic insurer which within one year from date of incorporation has not completed its organization and obtained a certificate of authority from the superintendent to transact insurance, shall unless granted an extension as hereinafter provided, forfeit its corporate charter, and the superintendent shall thereupon commence a proceeding for liquidation and dissolution of the corporation pursuant to the applicable provisions of Article 41 [Chapter 59A, Article 41 NMSA 1978] (conservation, rehabilitation, liquidation) of the Insurance Code. Upon written request by the corporation filed with him prior to the expiration of one year from its date of incorporation and for good cause shown, the superintendent may extend for an additional year the period within which the corporation shall qualify for and secure its certificate of authority as an insurer.
B. Any insurer which ceases to write and issue new insurance business for a continuous period of two years shall forfeit its right to resume the writing of new business except with the prior written approval of the superintendent granted upon reasonable grounds. Unless such approval is granted, the superintendent shall commence a proceeding pursuant to Article 41 (conservation, rehabilitation, liquidation) of the Insurance Code to liquidate and dissolve the insurer.
History:
Laws 1984, ch. 127, § 553.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 125.
44 C.J.S. Insurance § 19.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-8 - Prohibited interest of officers, directors and employees in certain transactions.

A. No officer or director of an insurer, or any employee of the insurer shall accept, except for the insurer, or be beneficiary of, any fee, brokerage, gift or other emolument in addition to fixed salary or compensation, because of any investment, loan, deposit, purchase, sale, exchange, reinsurance or other similar transaction made by or for the insurer, or be pecuniarily interested therein in any capacity except on behalf of the insurer.
B. No insurer shall guarantee the financial obligation of any of its officers, directors, or employees.
C. This section shall not prohibit such a director, officer, or employee from:
(1) being a policyholder of the insurer and enjoying the rights customarily provided for holders of such policies;
(2) participating as beneficiary in any pension or deferred compensation plan, profit-sharing plan, stock option plan or similar plan authorized by the insurer and to which he may be eligible;
(3) receiving a fee in reasonable amount, if a director and not a salaried officer or employee, for special services rendered to the insurer in the usual independent practice of the profession of the director as attorney, accountant or physician; or
(4) owning shares in a mutual fund or similar pooled investment through which he possesses an indirect interest in other corporations with which the insurer may directly or indirectly transact business, so long as such investment is in kind or amount not material to such transactions of the insurer.
History:
Laws 1984, ch. 127, § 554.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 107.
44 C.J.S. Insurance §§ 119 to 122.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-9 - Salaries of officers, directors.

No insurer shall pay any salary, compensation or emolument to any officer or director thereof unless such payment has been duly authorized by the insurer's board of directors.
History:
Laws 1984, ch. 127, § 555.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-10 - Records and accounts.

A. Every domestic insurer shall keep at its principal place of business in this state its original books, records, documents, accounts and vouchers in such manner that its financial condition can be ascertained, its financial statements filed with the superintendent readily verified, and its compliance with law determined. A domestic insurer the records of which on January 1, 1983 and on the effective date of the Insurance Code were being lawfully maintained outside this state shall for good cause shown be allowed by the superintendent a reasonable period, not to exceed one (1) year after such effective date, to return such records to its principal place of business in this state.
B. The insurer may destroy records which have become obsolete in accordance with such classifications and schedule for destruction as may be adopted by the insurer and approved in writing by the superintendent.
C. This section shall not be deemed to prohibit safekeeping arrangements for computerized and other records of the insurer outside such principal place of business and in the same general locality of this state so long as readily available to the insurer, and, for purposes of examination, to the superintendent.
History:
Laws 1984, ch. 127, § 556.
ANNOTATIONS
Compiler's notes.
— Laws 1984, ch. 127, § 999 made the Insurance Code effective January 1, 1985.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-11 - Vouchers for expenditures.

No insurer shall make any disbursement of one hundred dollars ($100) or more unless evidenced by a voucher or other document correctly describing the consideration for the payment and supported by a check or receipt endorsed or signed by or on behalf of the recipient. If the disbursement is for services and reimbursement the voucher or document or other writing referred to therein shall describe the services and itemize the expenditures. If the disbursement is in connection with any matter pending before any legislature or public body or public officer, the voucher or other document shall also correctly describe the nature of the matter and of the insurer's interest therein.
History:
Laws 1984, ch. 127, § 557.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-12 - Assets to be kept in state; exceptions.

A. Every domestic insurer shall keep its assets within this state except as requisite for normal transaction of business.
B. An insurer may maintain in or in connection with its branch office located outside this state furniture, fixtures, supplies and funds normally required for operation of the branch office.
C. An insurer may maintain on deposit with or through the insurance supervisory officer of another state, province or country securities as required for authority to transact insurance therein.
D. An insurer may have on deposit temporarily with established securities brokerage firms outside this state securities as required for purchase or sale of securities on the insurer's account, and shall have in its records adequate written receipt evidencing such deposit.
E. An insurer may be owner of book-entry securities of the Federal Reserve Bank.
History:
Laws 1984, ch. 127, § 558.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-13 - Removal, concealment of records, assets.

A. No person shall remove all or any material part of the records or assets of a domestic insurer from this state except pursuant to a plan of merger, consolidation or bulk reinsurance approved by the superintendent under this article, or for such other reasonable purposes and periods of time as may be permissible under Section 558 [59A-34-12 NMSA 1978] of this article, or as may have been approved by the superintendent in writing in advance of such removal.
B. No person shall conceal any such records or assets from the superintendent.
C. Any person who unlawfully removes or attempts to remove such records or assets or such material part thereof from its lawful location, or who unlawfully conceals or attempts to conceal the same from the insurer or superintendent, is upon conviction thereof guilty of a felony.
D. Upon any unlawful removal or attempted removal of such records or assets, or upon retention of such record [records] or assets or material part thereof outside this state in violation of this section, or upon any unlawful concealment of or attempt to conceal records or assets the superintendent may, in his discretion, institute delinquency proceedings against the insurer pursuant to Article 41 [Chapter 59A, Article 41 NMSA 1978] (conservation, rehabilitation, liquidation) of the Insurance Code.
History:
Laws 1984, ch. 127, § 559.
ANNOTATIONS
Bracketed material.
— The bracketed material was inserted by the compiler and is not part of the law.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-14 - Information to stockholders and proxy regulations.

A. This section and Sections 561 and 562 [59A-34-15 and 59A-34-16 NMSA] of this article apply to all domestic stock insurers except:
(1) a domestic stock insurer having of record less than one hundred (100) holders of any class of equities securities; but if ninety-five percent or more of the insurer's equity securities are owned or controlled by a parent or an affiliated insurer, this section and the sections referred to in Subsection A, above, do not apply to the insurer unless its remaining securities are held of record by five hundred (500) or more persons; and
(2) domestic stock insurers which, relative to voting or other securities involved, file with the Securities and Exchange Commission forms of proxies, consents and authorizations pursuant to the Securities Exchange Act of 1934, as amended.
B. The superintendent may promulgate reasonable rules and regulations for effectuation of this section and the sections referred to in Subsection A, above.
History:
Laws 1984, ch. 127, § 560.
ANNOTATIONS
Cross references.
— For the Securities Exchange Act of 1934,
see
15 U.S.C. § 78a et seq.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-15 - Information in advance of stockholder meetings.

Every insurer to which Section 560 [59A-34-14 NMSA 1978] applies shall timely furnish to its stockholders, in advance of stockholder meetings, information in writing reasonably adequate to inform them relative to all matters to be presented by the insurer's management for consideration of stockholders at the meeting.
History:
Laws 1984, ch. 127, § 561.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-16 - Solicitation of proxies.

A. No person shall solicit a proxy, consent or authorization in respect of any stock or other voting security of such an insurer unless he furnishes the person so solicited with written information reasonably adequate as to:
(1) the material matters in regard to which the powers so solicited are proposed to be used; and
(2) the person or persons on whose behalf the solicitation is made and the interest of such person or persons in relation to such matters.
B. No person shall so furnish information which the informer knows or has reason to believe in [is] false or misleading as to any material fact, or which fails to state any material fact reasonably necessary to prevent any other statement made from being misleading.
C. The form of all such proxies shall:
(1) conspicuously state on whose behalf the proxy is solicited;
(2) provide for dating the proxy;
(3) impartially identify each matter or group of related matters intended to be acted upon;
(4) provide means for the principal to instruct the vote of his shares as to approval or disapproval of each matter of [or] group, other than election to office; and
(5) be legibly printed, with context suitably organized;
but a proxy may confer discretionary authority as to matters as to which a choice is not specified pursuant to Paragraph (4), above, if the form conspicuously states how it is intended to vote the proxy or authorization in each such case, and may confer discretionary authority as to other matters which may come before the meeting but [were] unknown for a reasonable time prior to the solicitation by the persons on whose behalf the solicitation is made.
D. No proxy shall confer authority to:
(1) vote for election of any person to any office for which a bona fide nominee is not named in the proxy statement; or
(2) vote in any annual meeting (or adjournments thereof) other than the annual meeting next following the date on which the proxy statement and form were furnished stockholders.
E. Any proxy, consent or authorization obtained in violation of, or which violates, this section or the lawful rules and regulations of the superintendent relating thereto, is void.
History:
Laws 1984, ch. 127, § 562.
ANNOTATIONS
Bracketed material.
— The bracketed material was inserted by the compiler and is not part of the law.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-17 - Management, compensation and agency contracts.

A. No domestic insurer shall make, amend or renew any contract whereby any person is granted or is to enjoy in fact the management of the insurer to the material exclusion of its board of directors or to have the controlling or preemptive right to produce substantially all insurance business for the insurer, or, if an officer, director or otherwise part of the insurer's management, is to receive any commission, bonus or compensation based upon the volume of the insurer's business or transactions, unless the contract is filed with and not disapproved by the superintendent. The contract amendment or renewal shall become effective in accordance with its terms unless disapproved by the superintendent within thirty days after date of filing, subject to such reasonable extension of time as the superintendent may require by written notice given within such thirty days. Any disapproval shall be delivered to the insurer in writing stating the grounds therefor.
B. Any such contract when made, amended, or renewed shall provide that any such manager, producer of its business or contract holder shall within ninety days after expiration of each calendar year furnish the insurer's board of directors a written statement of amounts received under or on account of the contract and amounts expended thereunder during such calendar year, with specification of the emoluments received therefrom by the respective directors, officers, and other principal management personnel of the manager, producer, contract holder or insurer, and with such classification of items and further detail as the insurer's board of directors may reasonably require.
C. The superintendent shall disapprove any such contract, amendment or renewal thereof if he finds that the contract:
(1) subjects the insurer to excessive charges;
(2) is to extend for an unreasonable length of time;
(3) does not contain fair and adequate standards of performance; or
(4) contains other inequitable provisions or provisions which impair the reasonable and proper interests of the insurer's stockholders, policyholders or members.
D. The superintendent may, after a hearing held thereon, disapprove or withdraw his approval of any such contract theretofore permitted to become effective or amended or renewed, if he finds that the contract should be disapproved on any of the grounds specified in Subsection C of this section.
E. Any contract or relationship with and any person who is a managing general agent as defined in the Managing General Agents Law [Chapter 59A, Article 12B NMSA 1978], shall be subject to the provisions of that law.
History:
Laws 1984, ch. 127, § 563; 1993, ch. 320, § 66.
ANNOTATIONS
The 1993 amendment,
effective June 18, 1993, added Subsection E and made minor stylistic changes throughout the section.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-18 - Dividends to stockholders.

A. A domestic stock insurer shall not pay any cash dividend to stockholders except out of that part of its available and accumulated surplus funds otherwise unrestricted and derived from realized net operation profits and realized capital gains.
B. A cash dividend otherwise lawful may be so paid out of the insurer's earned surplus which is in excess of the amount of surplus required to be maintained by it under the Insurance Code.
C. A stock dividend may be paid out of any available surplus. Upon payment of a stock dividend the insurer shall transfer to its paid-in capital stock account funds equal to the aggregate of the par value of shares so distributed.
D. No dividend shall be declared or paid which would reduce the insurer's surplus funds below an amount reasonably required to sustain the insurer's normal operations currently and for the reasonably foreseeable future.
E. This section is subject to the provisions of Section 59A-37-22 NMSA 1978 relative to dividends by insurers which are subject to The Insurance Holding Company Law [Chapter 59A, Article 37 NMSA 1978].
History:
Laws 1984, ch. 127, § 564; 1993, ch. 320, § 67.
ANNOTATIONS
Cross references.
— For the Insurance Code,
see
59A-1-1 NMSA 1978 and notes thereto.
The 1993 amendment,
effective June 18, 1993, substituted "Section 59A-37-22" for "Section 637 of Article 37 of the Insurance Code" in Subsection E.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 100.
44 C.J.S. Insurance § 127 et seq.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-19 - Participating policies.

A. If provided for in its articles of incorporation a stock or mutual insurer may issue any or all of its policies with or without participation in profits, savings or unabsorbed portions of premiums, may classify policies issued on a participating or nonparticipating basis and may determine the right to participate and the extent of participation of any class or classes of policies. Any such classification or determination shall be reasonable, and shall not unfairly discriminate as between policyholders within the same classification.
B. A life insurer may issue both participating and nonparticipating policies only if the right or absence of right to participate is reasonably related to the premium charged.
C. After the first policy year no dividend, otherwise earned, shall be made contingent upon payment of the renewal premium on any policy or contract; but a participating life or health insurance policy providing for participation at the end of the first or second policy year or the first and second policy year may provide that such dividend or dividends will be paid subject to payment of the premium for the year next ensuing such first or second policy year.
D. As to life insurance policies, this section is subject to Section 393 [59A-20-28 NMSA 1978] (special requirements as to participating policies) of the Insurance Code.
History:
Laws 1984, ch. 127, § 565.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 120.
44 C.J.S. Insurance § 123 et seq.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-20 - Dividends to policyholders.

A. The directors of a domestic mutual insurer may from time to time apportion and pay or credit to its members dividends only out of that part of its surplus funds which represents net realized savings, net realized earnings and net realized capital gains, all in excess of the surplus required by law to be maintained by the insurer.
B. Subject to Section 393 [59A-20-28 NMSA 1978] (special requirements as to participating policies) of the Insurance Code, a domestic stock insurer may pay dividends to holders of its participating policies out of its available surplus.
C. No such dividend shall be paid which is inequitable or which unfairly discriminates between classifications or policies within the same classification.
History:
Laws 1984, ch. 127, § 566.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 120.
44 C.J.S. Insurance § 127 et seq.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-21 - Illegal dividends; penalty.

A. Any director of a domestic stock or mutual insurer who wilfully votes for or concurs in declaration or payment of an illegal dividend to stockholders or members shall upon conviction thereof be guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars ($500) and shall be jointly and severally liable, together with other such directors, for any loss thereby sustained by the insurer.
B. The stockholders or members receiving such an illegal dividend shall be liable in the amount thereof to the insurer.
C. The superintendent may revoke or suspend the certificate of authority of an insurer which has declared or paid an illegal dividend.
History:
Laws 1984, ch. 127, § 567.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-22 - Purchase of own shares by stock insurer.

A. A domestic stock insurer shall have the right to purchase or acquire shares of its own stock only as follows:
(1) for elimination of fractional shares;
(2) incidental to enforcement of rights of the insurer as to lawful transactions previously entered into in good faith for purposes other than acquisition of such shares;
(3) for purposes of a general savings and investment plan for the insurer's personnel;
(4) for mutualization of the insurer as provided in Section 580 [59A-34-34 NMSA 1978] of this article;
(5) for purposes of cancellation in connection with plan of recapitalization or reduction or reclassification of outstanding shares, or under other plan submitted to and approved in writing by the superintendent. The superintendent shall not approve a plan unless found by him to be for reasonable purposes, to be equitable as to the remaining stockholders of the insurer and not materially adverse to protection of policyholders; or
(6) as result of gift or bequest of the shares to the insurer.
B. Its own shares held by the insurer shall be part of paid-in capital stock, but shall not be voted or constitute an asset for financial statement purposes.
History:
Laws 1984, ch. 127, § 568.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-23 - Borrowed capital funds.

A. A domestic insurer may without pledge of assets borrow money to defray expense of organization, provide surplus funds or for any purpose of its business, upon a written agreement that such money is required to be repaid only out of the insurer's surplus in excess of that stipulated in such agreement. The agreement may provide for interest on unpaid balance of principal at a reasonable rate approved by the superintendent, which interest shall or shall not constitute a liability of the insurer as to its funds other than such excess of surplus, as stipulated in the agreement. No commission or promotion expense shall be paid in connection with any such loan, except that if a public offering and sale is made of the loan securities the insurer may pay the reasonable costs thereof approved by the superintendent.
B. Money so borrowed, together with the interest thereon if so provided in the agreement, shall not be part of the insurer's legal liabilities except as to its surplus in excess of the amount of surplus stipulated in the agreement, or be basis of any setoff; but until repaid, financial statements filed or published by the insurer shall show as a footnote thereto the amount of the loan then unpaid together with any interest thereon accrued but unpaid.
C. Any such loan shall be subject to the superintendent's approval. The insurer, in advance of the loan, shall file with the superintendent a statement of the amount proposed to be so borrowed and the purposes thereof together with a copy of the proposed loan agreement. The loan and agreement shall be deemed approved unless within thirty (30) days after date of such filing the insurer is notified of the superintendent's disapproval and reasons therefor. The superintendent shall disapprove any proposed loan or agreement if he finds the loan unnecessary or excessive for purposes intended or that the terms of the agreement are not fair and equitable to the parties and to other similar lenders, if any, to the insurer, or that the information so filed by the insurer is inadequate.
D. Any such loan or substantial portion thereof shall be repaid by the insurer when no longer reasonably necessary for the purposes intended. No such repayment shall be made unless approved in advance by the superintendent upon his finding that repayment would not deprive the insurer of funds reasonably required for its operations or protection of its policyholders.
E. Such loan agreements when offered for purchase by the public shall for purposes of Article 35 [Chapter 59A, Article 35 NMSA 1978] (sale of insurance securities) of the Insurance Code be deemed to be securities.
F. This section does not apply to other kinds of loans obtained by the insurer in ordinary course of business, or to loans secured by pledge or mortgage of assets.
History:
Laws 1984, ch. 127, § 569.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-24 - Mutual membership.

A. Each holder of one or more insurance policies of a domestic mutual insurer, other than holder of a reinsurance contract, is a member of the insurer with all the rights and obligations of such membership, and each such policy so issued shall so specify.
B. Any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, firm, estate, trustee or fiduciary may be a member of a mutual insurer.
History:
Laws 1984, ch. 127, § 570.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance §§ 108 to 112.
44 C.J.S. Insurance § 118.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-25 - Mutual members, corporate rights.

A. As to management, records and affairs of the insurer a member of a domestic mutual insurer shall have the same character of rights and relationship as a stockholder has toward a domestic stock insurer.
B. Subsection A above shall not be deemed to:
(1) subject the mutual insurer to requirements of Sections 560 [59A-34-14 NMSA 1978] (information to stockholders and proxy regulations), 561 [59A-34-15 NMSA 1978] (information in advance of stockholder meetings) or 562 [59A-34-16 NMSA 1978] (solicitation of proxies) of this article; or
(2) give mutual members the right of dissent and appraisal on any merger, consolidation, bulk reinsurance, or sale of assets of the insurer.
History:
Laws 1984, ch. 127, § 571.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance §§ 110, 111.
44 C.J.S. Insurance § 118.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-26 - Mutual insurer bylaws.

A. The initial board of directors of a domestic mutual insurer shall adopt original bylaws for government of the corporation and conduct of its business. Such bylaws shall be subject to approval of the insurer's members at the next annual meeting of members and no bylaw provision shall thereafter be effective which is not so approved. Bylaws shall be revoked or modified only by vote of the insurer's members at a meeting of which notice was given as provided in the bylaws.
B. The bylaws shall provide that each of the insurer's members is entitled to one vote in election of corporate directors and on each matter voted on at membership meetings, and that such right to vote may be exercised in person or pursuant to written proxy.
C. The insurer shall promptly file with the superintendent a copy, certified by the insurer's secretary, of such bylaws and of every modification thereof or addition thereto.
D. The bylaws and modifications thereof or additions thereto shall be subject to the superintendent's approval. The superintendent shall not disapprove any such bylaw, modification or addition unless found by him, after a hearing thereon, to be unlawful, unreasonable, inadequate, unfair or injurious to the proper interests or protection of the insurer's members or any class thereof. The insurer shall not, after receiving written notice of disapproval and during the existence thereof, effectuate any bylaw provision so disapproved.
History:
Laws 1984, ch. 127, § 572.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance §§ 103, 104.
44 C.J.S. Insurance § 117.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-27 - Mutual members, quorum.

A domestic mutual insurer may in its bylaws adopt a reasonable provision for determining a quorum of members at any meeting thereof, but no provision recognizing a quorum of fewer than a simple majority in person or proxy of all the insurer's members shall be effective unless approved as reasonable by the superintendent. This section shall not affect any other provision of law requiring vote of a different percentage of members for a specified purpose.
History:
Laws 1984, ch. 127, § 573.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
44 C.J.S. Insurance § 117.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-28 - Mutual members, contingent liability.

A. Except as to nonassessable policies as provided for in Section 577 [59A-34-31 NMSA 1978] of this article, each member of a domestic mutual insurer shall have contingent liability, pro rata and not one for another, for discharge of the insurer's obligation incurred while the member was a policyholder, which liability shall be in such maximum amount, not less than one nor more than six (6) times the premium for the member's policy at the annual premium rate, as specified in the insurer's articles of incorporation.
B. Every policy issued by the insurer shall contain a statement of the contingent liability.
C. Termination of the policy shall not relieve the member of contingent liability as to liabilities of the insurer incurred while the policy was in force.
D. Unrealized contingent liability of members does not constitute an asset of the insurer in any determination of financial condition.
History:
Laws 1984, ch. 127, § 574.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-29 - Mutual members, levy of contingent liability.

A. If at any time the assets of a domestic mutual insurer are less than its liabilities and the minimum amount of surplus required of it under the Insurance Code for authority to transact the kinds of insurance being transacted, and the deficiency is not otherwise cured, its directors may, if approved by the superintendent as being reasonable and in the best interests of the insurer and its members, levy an assessment only on its members who held policies providing for contingent liability at any time within the twelve (12) months next preceding the date the levy was authorized by the board of directors, and such members shall be liable to the insurer for the amount so assessed.
B. The assessment shall be for the amount required to cure the deficiency and to provide working funds in reasonable amount above such minimum surplus.
C. As to the respective policies subject to the levy, the assessment shall be computed upon the basis of premium earned by the insurer thereon during such twelve (12) month period.
D. No member shall have an offset against any assessment on account of any claim for unearned premiums or loss payable.
E. As to life insurance, any part of the assessment upon a member which remains unpaid following notice of assessment, demand for payment and lapse of a reasonable waiting period as specified in the notice may, if approved by the superintendent as being in the best interest of the insurer and its members, be secured by placing a lien upon the cash surrender values and accumulated dividends held or to be held by the insurer to the credit of the member's policy.
History:
Laws 1984, ch. 127, § 575.
ANNOTATIONS
Cross references.
— For the Insurance Code,
see
59A-1-1 NMSA 1978 and notes thereto.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-30 - Mutual members, enforcement of contingent liability.

A. Upon levy of an assessment upon its members the mutual insurer shall notify each member of the amount of the assessment as to such member by written notice mailed to the member at his address last of record with the insurer. Failure of the member to receive the notice so mailed, within the time specified therein for payment of the assessment or at all, shall be no defense in any action to collect the assessment.
B. If a member fails to pay the assessment within the period specified in the notice, which period shall not be less than thirty (30) days after the mailing, the insurer may institute suit to collect the same.
History:
Laws 1984, ch. 127, § 576.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-31 - Mutual insurers; nonassessable policies.

A. A domestic mutual insurer while maintaining unimpaired surplus funds not less in amount than the minimum paid-in capital stock and surplus required to be maintained by a domestic stock insurer for authority to transact the same kind or kinds of insurance, may, upon receipt of the superintendent's order so authorizing, extinguish the contingent liability of members to assessment under all its policies then in force and, so long as such surplus is maintained, may omit provisions imposing contingent liability in all policies currently issued or renewed. Each such policy so issued or renewed shall contain a statement of nonassessability on its face or by endorsement attached.
B. The superintendent shall not authorize a domestic insurer to extinguish such contingent liability unless the extinction applies to all of the policies of the insurer.
C. The superintendent shall revoke the authority of a domestic mutual insurer to issued policies without contingent liability if:
(1) the insurer's surplus is less than that required under Subsection A, above, or
(2) the insurer, by resolution of its board of directors approved by a majority of the insurer's members at a meeting of the members of which the notice contained notice of the proposed change, requests that the authority to issue nonassessable policies be revoked.
D. During absence of such authority the insurer shall not issue any policy without providing therein for contingent liability of the policyholder, or renew or accept premium on any policy which is then in force without endorsing the same to provide for contingent liability.
History:
Laws 1984, ch. 127, § 577.
ANNOTATIONS
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 109.
44 C.J.S. Insurance § 118.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-32 - Prohibited transactions.

A. No domestic insurer shall participate in any underwriting of the purchase or sale of securities in advance of their issuance or enter into any transaction for such purchase or sale on account of the insurer jointly with any other person.
B. No domestic insurer shall enter into any agreement to withhold from sale any of its property. Except as to statutory deposits required to be made by the insurer, disposition of the insurer's property shall at all times be within control of its board of directors, in accordance with its charter and bylaws.
C. Except as otherwise specifically provided by law, no domestic insurer shall pledge or transfer any of its securities as collateral for a loan if such loan with all other outstanding loans secured by pledge or deposit of its securities aggregates, or will aggregate if such a loan is made, more than five percent of its admitted assets as shown by its last sworn financial statement filed with the superintendent, unless the superintendent first gives his written permission for such loan as necessary in conduct of the business of the insurer; but in no event shall any pledge or transfer of securities for a loan be made by the insurer if the insurer does not receive the proceeds of the loan, or if such proceeds are to be used, directly or indirectly, for investment in other securities. Nothing in this subsection shall prohibit a domestic insurer:
(1) from depositing or maintaining a deposit of any of its securities with the authorities of any other state in accordance with the laws thereof, for authority to transact insurance in such state; or
(2) from depositing securities as collateral for any surety or fidelity bond required for the insurer's business; or
(3) from entering into an agreement with a securityholder's protective committee or from depositing any of its securities with a depository under such agreement or under a plan of reorganization, for the purpose of protecting the insurer's interests.
D. No domestic insurer shall purchase its own stock, except as provided in Section 568 [59A-34-22 NMSA 1978] of this article.
E. No domestic insurer shall in connection with sale of any property agree to repurchase such property or any part thereof.
F. Subsections D and E of this section shall not apply as to purchase or sale of directors' qualifying shares.
G. No domestic insurer shall make any loan or other advance of funds if the insurer knows or reasonably should have known that the proceeds of such loan or advance in whole or part are to be used directly or indirectly for purchase of any stock or other securities of the insurer.
H. No domestic insurer shall dispose or attempt to dispose of more than ten percent of its assets out of regular course of business without advance written approval of the superintendent.
History:
Laws 1984, ch. 127, § 578.
2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 34 - Domestic Stock and Mutual Insurers › Section 59A-34-33 - Unauthorized business in other states.

A. No domestic insurer shall transact insurance in any other state without first being legally authorized to do so under the laws of such state.
B. Subsection A above shall not apply to:
(1) contracts entered into where the prospective insured when he signs the application for the insurance is personally present in a state in which the insurer is then authorized to transact the kind of insurance involved;
(2) issuance of certificates under a lawfully transacted group life or group health insurance policy where the master policy or contract was entered into in a state in which the insurer was then authorized to transact the insurance involved and in which the policyholder was then domiciled or otherwise had a bona fide situs; or
(3) renewal or continuance in force, with or without modification, of policies and insurance contracts otherwise lawful and not originally issued in violation of Subsection A above.
C. The superintendent may revoke the certificate of authority of an insurer which violates this section, and may require the insurer to pay to the state in which the business was so unlawfully written the premium taxes otherwise applicable as provided by the laws of such state.
History:
Laws 1984, ch. 127, § 579.