2023 New Mexico Statutes › Chapter 59A - Insurance Code › Article 37 - Insurance Holding Companies › Section 59A-37-6 - Approval by superintendent; review.

A. The superintendent shall approve any merger or other acquisition of control referred to in Section 59A-37-4 NMSA 1978 unless, after a public hearing on it, the superintendent finds that:
(1) after the change of control, the domestic insurer would not be able to satisfy the requirements for the issuance of a certificate of authority to write the line or lines of insurance for which it is presently authorized;
(2) the effect of the merger or other acquisition of control would be substantially to lessen competition in insurance in New Mexico or tend to create a monopoly in insurance. In applying this paragraph:
(a) the informational requirements of Paragraph (1) of Subsection C of Section 59A-37-29 NMSA 1978 and the standards of Paragraph (1) of Subsection D of Section 59A-37-29 NMSA 1978 apply;
(b) the superintendent shall approve the merger or acquisition if the superintendent finds that any of the situations meeting the criteria provided in Paragraph (2) of Subsection D of Section 59A-37-29 NMSA 1978 exists; and
(c) the superintendent may condition the approval of the merger or acquisition on the removal, to take place within a specified period of time, of the circumstances that formed the basis for disapproval;
(3) the financial condition of any acquiring party is such as might jeopardize the financial stability of the insurer or prejudice the interests of its policyholders or the interests of any remaining security holders who are unaffiliated with the acquiring party;
(4) the plans or proposals that the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any other person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest;
(5) the competence, experience and integrity of those persons who would control the operation of the insurer are such that it would not be in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control;
(6) the applicable provisions of Chapter 59A, Article 34 NMSA 1978 would be violated; or
(7) the acquisition is likely to be hazardous or prejudicial to the insurance-buying public.
B. The superintendent may retain at the acquiring party's expense any attorneys, actuaries, accountants and other experts not otherwise a part of the superintendent's staff that are reasonably necessary to assist the superintendent to review the proposed acquisition of control.
C. The superintendent shall ensure, by imposition of conditions, if necessary, that New Mexico charitable assets are protected and preserved for the benefit of the people of New Mexico.
D. The public hearing held pursuant to Subsection A of this section shall be held within thirty days after the statement required by Section 59A-37-4 NMSA 1978 is filed, and the superintendent shall notify the person filing the statement at least twenty days before the hearing. The person filing the statement shall notify the insurer, and other persons whom the superintendent designates, no fewer than seven days before the hearing. The superintendent shall make a determination within the sixty days before the effective date of the proposed transaction. At the hearing, the person filing the statement, the insurer, a person to whom notice of hearing was sent and any other person whose interests may be affected shall be entitled to present evidence, examine and cross-examine witnesses, offer oral and written arguments and conduct discovery proceedings according to the Rules of Civil Procedure for the District Courts [Rule 1-001 NMRA et seq.]. All discovery proceedings shall conclude no later than three days before the public hearing.
E. If the proposed acquisition of control requires the approval of one or more insurance supervisory officials in other states, and if requested by the person filing the statement required by Section 59A-37-4 NMSA 1978, the public hearing held pursuant to Subsection A of this section may be conducted as a consolidated hearing. Within five days of a person's request for a consolidated hearing, that person shall file the statement referred to in Section 59A-37-4 NMSA 1978 with the national association of insurance commissioners. If the superintendent or an insurance supervisory official of another state elects not to participate in a consolidated hearing, then within ten days of receipt of the statement required by Section 59A-37-4 NMSA 1978, the superintendent or insurance supervisory official shall provide notice to the applicant of that person's election not to participate. A consolidated hearing shall be public and held within the United States before the insurance supervisory officials of the states in which the insurers are domiciled. Participating insurance supervisory officials shall hear and receive evidence. The superintendent may attend the hearing in person or by telecommunication.
F. For the change of control of a domestic insurer, a determination by the superintendent that the person acquiring control of the insurer must maintain or restore the capital of the insurer to the level required by the laws and rules of New Mexico shall be made no later than sixty days after the date of notice of the change of control submitted pursuant to Subsection A of Section 59A-37-4 NMSA 1978.
History:
Laws 1984, ch. 127, § 621; 1993, ch. 320, § 75; 1999, ch. 133, § 1; 2014, ch. 59, § 33.
ANNOTATIONS
The 2014 amendment,
effective July 1, 2014, expanded regulatory requirements involved in the acquisition of a controlling interest in a domestic insurer; required the superintendent to consider factors that lessen competition; provided for public hearings by the superintendent and by multistate insurance officials; in Subsection A, in the introductory sentence, after "after a public hearing", deleted "thereon, he" and added "on it, the superintendent", in Subsection A, Paragraph (2), after "create a monopoly", added "in insurance", and added the second introductory sentence; in Subsection A, Paragraph (2), added Subparagraphs (a), (b) and (c); and added Subsections D, E and F.
Severability.
— Laws 2014, ch. 59, § 54 provided that if any part or application of the provisions of Laws 2014, ch. 59 is held invalid, the remainder or its application to other situations or persons shall not be affected.
The 1999 amendment,
effective June 18, 1999, added Subsection A(6), redesignated former Subsection A(6) as Subsection A(7), and added Subsection C.
The 1993 amendment,
effective June 18, 1993, designated the former introductory language as Subsection A; in the introductory language in Subsection A, inserted "merger or other" and substituted "Section 59A-37-4 NMSA 1978" for "Section 619 of this article"; redesignated former Subsections A through E as Paragraphs (1) through (5) of Subsection A and added a Paragraph (6); substituted "authorized" for "licensed" in Paragraph (1); inserted "merger or other" in Paragraph (2); substituted "condition" for "position" in Paragraph (3); substituted "person" for "business entity" in Paragraph (4); inserted "merger or other" in Paragraph (5); added Subsection B; and made stylistic changes throughout the section.
Am. Jur. 2d, A.L.R. and C.J.S. references. —
43 Am. Jur. 2d Insurance §§ 52, 56, 57.
44 C.J.S. Insurance § 15 et seq.