2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 4 - Examinations, Hearings and Appeals › Section 59A-4-5 - Examination of insurers.

A. For the purpose of determining financial condition, fulfillment of contractual obligations, methods of doing business, treatment accorded policyholders and compliance with law, the superintendent shall, as often as the superintendent deems advisable, examine or investigate the affairs, transactions, accounts, records and assets of each authorized insurer and of any other person as to any matter that the superintendent in the superintendent's sole discretion has determined to be relevant to the financial affairs of the insurer or to the examination. Except as expressly otherwise provided, the superintendent shall so examine each domestic insurer not less frequently than every five years. In scheduling and determining the nature, scope and frequency of the examinations, the superintendent may consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants, evidence of market practices, policyholder complaints and other criteria as set forth in the handbooks for financial or market conduct examiners adopted by the national association of insurance commissioners in effect when the superintendent exercises discretion under this section.
B. For like purposes, the superintendent shall examine each insurer, or proposed insurer, applying for an initial certificate of authority to transact insurance in this state. The initial examination shall be completed prior to issuance of a certificate of authority.
C. Whenever the superintendent examines the affairs of a domestic insurer, the superintendent may invite the representative of the insurance supervisory agency of at least one other state, if any, in which the insurer is an authorized insurer, to participate in the examination.
D. Until January 1, 1994, in lieu of making the superintendent's own examination of a foreign or alien insurer, the superintendent may accept a full report of an examination of the insurer made by competent examiners as of a date not more than one year prior and participated in by at least two states in which the insurer was authorized to transact insurance. The report shall be certified by the insurance supervisory official of the state under whose jurisdiction the examination was conducted. The superintendent may, at the superintendent's discretion, so accept the report of examination as of a date more than one year but not more than three years prior; and with respect to an alien insurer, the superintendent may at the superintendent's discretion so accept a report of recent examination made by the insurance supervisory official of the port of entry state of the insurer into the United States without participation therein of another state.
E. After January 1, 1994, examination reports prepared by examiners employed by other state insurance departments may be accepted only if:
(1) made as of a date not more than five years prior to acceptance and the examiner in charge was employed by and under the direction of the insurance commissioners of the insurer's state of domicile or port of entry, which insurance department was at the time of the examination accredited under the financial regulation standards and accreditation program of the national association of insurance commissioners; or
(2) made as of a date not more than three years prior to acceptance and the examination was performed under the supervision of an accredited insurance department or with the participation of one or more examiners who were employed by an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
F. As far as practical the superintendent shall conduct examination of a foreign or alien insurer in cooperation with the insurance supervisory officials of other states in which the insurer is authorized to transact business.
History:
Laws 1984, ch. 127, § 49; 1993, ch. 320, § 3; 2011, ch. 127, § 1.
ANNOTATIONS
The 2011 amendment,
effective July 1, 2011, in Subsection B, required the initial examination to be completed prior to issuance of a certificate of authority.
The 1993 amendment,
effective June 18, 1993, in Subsection A, in the first sentence, inserted "or investigate" preceding "the affairs" and inserted "which the superintendent in his sole discretion has determined to be ", substituted "five" for "three" in the second sentence, and added the last sentence; in Subsection D, added "Until January 1, 1994," and made minor stylistic changes; inserted present Subsection E; and redesignated former Subsection E as Subsection F.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance § 56.
44 C.J.S. Insurance § 15 et seq.