reglab/statecodes huggingface dataset:
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 5 - ANNUAL AUDITED FINANCIAL REPORTS › Section 13.2.5.24 - INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S LETTER OF QUALIFICATIONS

Current through Register Vol. 35, No. 13, July 16, 2024
The ICPA shall furnish the insurer with a letter stating
				  that:
A. that the ICPA is independent
				with respect to the insurer and conforms to the standards of the profession as
				contained in the
code of professional ethics
of the AICPA and
				the code of ethics and rules of professional conduct of the New Mexico state
				board of public accountancy, or similar code;
B. the background and experience in general,
				and the experience in audits of insurer's, of the staff assigned to the
				examination and whether each is an ICPA (however, nothing in this rule shall be
				construed as prohibiting the ICPA from utilizing such staff as is deemed
				appropriate if such use is consistent with generally accepted auditing
				standards);
C. the ICPA understands
				that the annual audited financial report and opinion shall be submitted in
				compliance with this rule and that the superintendent will rely on this
				information in the monitoring of the financial condition of
				insurer's;
D. the ICPA consents to
				the requirements of this rule regarding ICPA workpapers and agrees to make them
				available for review by the superintendent, or the superintendent's designee or
				appointed agent;
E. the ICPA is
				properly licensed by an appropriate state licensing authority and is a member
				in good standing of the AICPA; and
F. the ICPA is in compliance with the
				requirements of this rule.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 5 - ANNUAL AUDITED FINANCIAL REPORTS › Section 13.2.5.25 - INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT'S WORKPAPERS

Current through Register Vol. 35, No. 13, July 16, 2024
A. For purposes of this rule, workpapers are
				the records kept by the ICPA of the procedures followed, the tests performed,
				the information obtained, and the conclusions reached pertinent to the ICPA's
				examination of the financial statements of an insurer. Workpapers may include,
				without limitation, audit planning documentation, work programs, analyses,
				memoranda, letters of confirmation and representation, abstracts of company
				documents and schedules or commentaries prepared or obtained by the ICPA in the
				course of the ICPAs examination of the financial statements of an insurer and
				which support the ICPA's opinion.
B. An insurer required by this rule to submit
				an audited financial report, shall require the ICPA to make available for
				review by OSI examiners and examiners designated by the superintendent all
				workpapers prepared during the course of the ICPA's examination and any
				communications related to the audit between the ICPA and the insurer, at the
				offices of the insurer, at the OSI or at any other reasonable place designated
				by the superintendent. The insurer shall require that the ICPA retain the audit
				workpapers and communications until the OSI has filed a final report of
				examination covering the period of the audit but no longer than seven years
				from the date of the audit report.
C. Reviews by OSI examiners shall be
				considered investigations, and all and communications obtained during the
				course of such investigations shall be afforded the same confidentiality as
				examination workpapers generated by the OSI. Photocopies of pertinent audit
				workpapers may be made and retained by the OSI.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 5 - ANNUAL AUDITED FINANCIAL REPORTS › Section 13.2.5.26 - CONDUCT OF INSURER IN CONNECTION WITH THE PREPARATION OF REQUIRED REPORTS AND DOCUMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
A. No
				director or officer of an insurer shall, directly or indirectly:
(1) make or cause to be made a materially
				false or misleading statement to an ICPA in connection with any audit, review
				or communication required under this rule; or
(2) omit to state, or cause another person to
				omit to state, any material fact necessary in order to make statements made, in
				light of the circumstances under which the statements were made, not misleading
				to an accountant in connection with any audit, review or communication required
				under this rule.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 5 - ANNUAL AUDITED FINANCIAL REPORTS › Section 13.2.5.27 - HARDSHIP EXEMPTIONS

Current through Register Vol. 35, No. 13, July 16, 2024
A. Upon
				written application of any insurer, the superintendent may grant an exemption
				from compliance with any and all provisions of this rule if the superintendent
				finds, upon review of the application, that compliance with this rule would
				constitute a financial or organizational hardship upon the insurer.
B. An exemption may be granted at any time
				and from time to time for a specified period or periods.
C. Within 10 days from a denial of an
				insurer's written request for an exemption from this rule, such insurer may
				request in writing a hearing on its application for an exemption. Such hearing
				shall be held in accordance with the New Mexico Insurance Code, Chapter 59A,
				Article 4, NMSA 1978.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 5 - ANNUAL AUDITED FINANCIAL REPORTS › Section 13.2.5.28 - CANADIAN AND BRITISH COMPANIES

Current through Register Vol. 35, No. 13, July 16, 2024
A.
				As regards Canadian and British insurer's, the annual audited financial report
				shall be defined as the annual statement of total business on the form filed by
				such companies with their domiciliary supervisory authority, duly audited by an
				independent chartered accountant.
B. For such insurer's, the letter of
				compliance required by
				13.2.5.13
				NMAC shall state that the accountant is aware of the requirements relating to
				the annual audited statement filed with the superintendent pursuant to this
				rule and shall affirm that the opinion expressed is in conformity with such
				requirements.
C. For purposes of
				compliance with this rule, a Canadian insurer may submit to OSI accountant's
				reports as filed with the Canadian office of superintendent of financial
				institutions.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.2 - SCOPE

Current through Register Vol. 35, No. 13, July 16, 2024
A. This rule shall
				apply to all life insurance companies and fraternal benefit societies doing
				business in this State and to all life insurance companies and fraternal
				benefit societies that are authorized to reinsure life insurance, annuities or
				accident and health insurance business in this state. This rule shall be
				applied in a manner that allows the appointed actuary to utilize his or her
				professional judgment in performing the asset analysis and developing the
				actuarial opinion and supporting memoranda, consistent with relevant actuarial
				standards of practice. However, the superintendent shall have the authority to
				specify specific methods of actuarial analysis and actuarial assumptions when,
				in the superintendent's judgment, these specifications are necessary for an
				acceptable opinion to be rendered relative to the adequacy of reserves and
				related items.
B. This rule shall
				be applicable to all annual statements filed with the office of the
				superintendent after the effective date of this rule. A statement of opinion on
				the adequacy of the reserves and related actuarial items based on an asset
				adequacy analysis in accordance with 13.2.6.9 NMAC, and a memorandum in support
				thereof in accordance with 13.2.6.10 NMAC, shall be required each
				year.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.3 - STATUTORY AUTHORITY

Current through Register Vol. 35, No. 13, July 16, 2024
Section 59A-2-9 and 59A-8-7 NMSA 1978 .
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.5 - EFFECTIVE DATE

Current through Register Vol. 35, No. 13, July 16, 2024
October 1, 2003, unless a later date is cited at the end of a
				  section.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.6 - OBJECTIVE

Current through Register Vol. 35, No. 13, July 16, 2024
The purpose of this rule is to prescribe:
A. Requirements for statements of actuarial
				opinion that are to be submitted in accordance with Section 59A-8-7 NMSA 1978,
				and for memoranda in support thereof;
B. Rules applicable to the appointment of an
				appointed actuary; and
C. Guidance
				as to the meaning of "adequacy of reserves."
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.7 - DEFINITIONS

Current through Register Vol. 35, No. 13, July 16, 2024
For the purpose of this rule:
A.
"actuarial opinion"
means
				the opinion of an appointed actuary regarding the adequacy of the reserves and
				related actuarial items based on an asset adequacy analysis in accordance with
				13.2.6.9 NMAC and with applicable actuarial standards of practice.
B.
"actuarial standards board"
means the board established by the American academy of actuaries to develop and
				promulgate standards of actuarial practice.
C.
"annual statement"
means
				that statement required by Section 59A-5-29 NMSA 1978 to be filed by the
				company with the office of the superintendent annually.
D.
"appointed actuary"
means an
				individual who is appointed or retained in accordance with the requirements set
				forth in Subsection C of 13.2.6.8 NMAC to provide the actuarial opinion and
				supporting memorandum as required by Section 59A-8-7 NMSA 1978.
E.
"asset adequacy analysis"
means an analysis that meets the standards and other requirements referred to
				in Subsection D of 13.2.6.8 NMAC .
F.
"company"
means a life
				insurance company, fraternal benefit society or reinsurer subject to the
				provisions of this rule.
G.
"qualified actuary"
means an individual who meets the requirements set
				forth in Subsection B of 13.2.6.8 NMAC.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.8 - GENERAL REQUIREMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
A.
Submission of Statement of Actuarial Opinion.
(1) There is to be included on or attached to
				Page 1 of the annual statement for each year beginning with the year in which
				this rule becomes effective the statement of an appointed actuary, entitled
				"Statement of Actuarial Opinion," setting forth an opinion relating to reserves
				and related actuarial items held in support of policies and contracts, in
				accordance with 13.2.6.9 NMAC.
(2)
				Upon written request by the company, the superintendent may grant an extension
				of the date for submission of the statement of actuarial opinion.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.9 - STATEMENT OF ACTUARIAL OPINION BASED ON ASSET ADEQUACY ANALYSIS

Current through Register Vol. 35, No. 13, July 16, 2024
A.
General
				Description.
The statement of actuarial opinion submitted in accordance
				with this section shall consist of:
(1) A
				paragraph identifying the appointed actuary and his or her qualifications (see
				Paragraph (1) of Subsection B of this section);
(2) A scope paragraph identifying the
				subjects on which an opinion is to be expressed and describing the scope of the
				appointed actuary's work, including a tabulation delineating the reserves and
				related actuarial items that have been analyzed for asset adequacy and the
				method of analysis, (see Paragraph (2) of Subsection B of this section) and
				identifying the reserves and related actuarial items covered by the opinion
				that have not been so analyzed;
(3)
				A reliance paragraph describing those areas, if any, where the appointed
				actuary has deferred to other experts in developing data, procedures or
				assumptions, (e.g., anticipated cash flows from currently owned assets,
				including variation in cash flows according to economic scenarios (see
				Paragraph (3) of Subsection B of this section), supported by a statement of
				each such expert in the form prescribed by Subsection E of this section;
				and
(4) An opinion paragraph
				expressing the appointed actuary's opinion with respect to the adequacy of the
				supporting assets to mature the liabilities (see Paragraph (6) of Subsection B
				of this section).
(5) One or more
				additional paragraphs will be needed in individual company cases as follows:
(a) If the appointed actuary considers it
				necessary to state a qualification of his or her opinion;
(b) If the appointed actuary must disclose an
				inconsistency in the method of analysis or basis of asset allocation used at
				the prior opinion date with that used for this opinion;
(c) If the appointed actuary must disclose
				whether additional reserves as of the prior opinion date are released as of
				this opinion date, and the extent of the release;
(d) If the appointed actuary chooses to add a
				paragraph briefly describing the assumptions that form the basis for the
				actuarial opinion.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 6 - ACTUARIAL OPINIONS AND MEMORANDA › Section 13.2.6.11 - TABLE A

Current through Register Vol. 35, No. 13, July 16, 2024
Asset Adequacy Tested Amounts--Reserves and
						  Liabilities
Statement Item
Formula Reserves (1)
Additional Actuarial Reserves (a) (2)
Analysis Method (b)
Other Amount (3)
Total Amount (1)+(2)+(3) (4)
Exhibit 8 A Life Insurance
B Annuities
C Supplementary Contracts Involving Life Contingencies
D Accidental Death Benefit
E Disability - Active
F Disability - Disabled
G Miscellaneous
Total (Exhibit 8 Item 1, Page 3)
Exhibit 9 A Active Life Reserve
B Claim Reserve
Total (Exhibit 9 Item 2, Page 3)
Exhibit 10 Premium and Other Deposit Funds (Column 5,
						  Line 14)
Guaranteed Interest Contracts (Column 2, Line 14)
Other (Column 6, Line 14)
Supplemental Contracts and Annuities Certain (Column 3,
						  Line 14)
Dividend Accumulations or Refunds (Column 4, Line 14)
Total Exhibit 10 (Column 1, Line 14)
Exhibit 11 Part 1 1 Life (Page 3, Line 4.1)
2 Health (Page 3, Line 4.2)
Total Exhibit 11, Part 1
Separate Accounts (Page 3 of the Annual Statement of the
						  Separate Accounts, Lines 1, 2, 3.1, 3.2, 3.3)
TOTAL RESERVES
IMR (GIMR (General Account, Page ___ Line ___)
(Separate Accounts, Page ___ Line ___)
AVR (Page ___ Line ___)
(c)
Net Deferred and Uncollected Premium
(a) The additional actuarial reserves are the reserves
						  established under Paragraphs (2) of Subsection E of
						  13.2.6.8
						  NMAC.
(b) The appointed actuary should indicate the method of
						  analysis, determined in accordance with the standards for asset adequacy
						  analysis referred to in Subsection D of
						  13.2.6.8
						  NMAC, by means of symbols that should be defined in footnotes to the table.
(c) Allocated amount of Asset Valuation Reserve (AVR).
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.1 - ISSUING AGENCY

Current through Register Vol. 35, No. 13, July 16, 2024
New Mexico State Corporation Commission [Public Regulation
				  Commission], Department of Insurance, Post Office Box 1269, Santa Fe, NM
				  87504-1269.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.2 - SCOPE

Current through Register Vol. 35, No. 13, July 16, 2024
This rule applies to all domestic life and accident and
				  health insurers and to all other licensed life and accident and health insurers
				  which are not subject to a substantially similar rule in their domiciliary
				  state. This rule similarly applies to licensed property and casualty insurers
				  with respect to their accident and health business. This rule does not apply to
				  assumption reinsurance, yearly renewable term reinsurance or certain
				  nonproportional reinsurance such as stop loss or catastrophe
				  reinsurance.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.5 - EFFECTIVE DATE

Current through Register Vol. 35, No. 13, July 16, 2024
January 1, 1994 unless a later date is cited at the end of a
				  section or paragraph. Repromulgated in NMAC format effective July 1,
				  1997.
Compiler's note: The words or paragraph, above, are no
					 longer applicable. Later dates are now cited only at the end of sections, in
					 the history notes appearing in
					 brackets.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.6 - OBJECTIVE

Current through Register Vol. 35, No. 13, July 16, 2024
The superintendent recognizes that licensed insurers
				  routinely enter into reinsurance agreements that yield legitimate relief to the
				  ceding insurer from strain to surplus. However, it is improper for a licensed
				  insurer, in the capacity of ceding insurer, to enter into reinsurance
				  agreements for the principal purpose of producing significant surplus aid for
				  the ceding insurer, typically on a temporary basis, if all of the significant
				  risks inherent in the business being reinsured are not transferred. In
				  substance or effect, the expected potential liability to the ceding insurer
				  remains basically unchanged by the reinsurance transaction, notwithstanding
				  certain risk elements in the reinsurance agreement, such as catastrophic
				  mortality or extraordinary survival. The objective of this rule is to
				  prevent:
A. violation of Section
				59A-16-8 NMSA 1978 relating to financial statements which do not properly
				reflect the financial condition of the ceding insurer;
B. violation of Sections 59A-7-11 and 59A-8-3
				NMSA 1978 relating to reinsurance reserve credits, thus resulting in a ceding
				insurer improperly reducing liabilities or establishing assets for reinsurance
				ceded; and
C. creation of a
				situation that may be hazardous to policyholders and the people of this state
				as defined in Section 59A-41-24 NMSA 1978.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.9 - EXCEPTION WITH SUPERINTENDENT APPROVAL

Current through Register Vol. 35, No. 13, July 16, 2024
Notwithstanding 13 nmac 2.7.8 [now
				  13.2.7.8
				  NMAC], an insurer subject to this rule, may, with the prior approval of the
				  superintendent, take such reserve credit or establish such asset as the
				  superintendent deems consistent with the Insurance Code and department of
				  insurance rules or regulations, including actuarial interpretations or
				  standards deemed appropriate by the superintendent.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.10 - FILING REQUIREMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
Agreements entered into after the effective date of this rule
				  which involve the reinsurance of business issued prior to the effective date of
				  the agreements, including any subsequent amendments, shall be filed by the
				  ceding company with the superintendent within thirty days from its date of
				  execution. Each filing shall include data detailing the financial impact of the
				  transaction. The ceding insurer's actuary who signs the financial statement
				  actuarial opinion with respect to valuation of reserves shall consider this
				  rule and any applicable actuarial standards of practice when determining the
				  proper credit to be taken in financial statements filed with the
				  superintendent. The actuary should maintain adequate documentation and be
				  prepared upon request to describe the actuarial work performed for inclusion in
				  the financial statements and to demonstrate that such work conforms to this
				  rule.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.11 - SURPLUS INCREASE REQUIREMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
Any increase in surplus net of federal income tax resulting
				  from arrangements described in 13 nmac 2.7.10 [now
				  13.2.7.10
				  NMAC] shall be identified separately on the insurer's statutory financial
				  statement as a surplus item (aggregate write-ins for gains and losses in
				  surplus in the capital and surplus account, page 4 of the annual statement) and
				  recognition of the surplus increase as income shall be reflected on a
				  net-of-tax basis on the "reinsurance ceded" line, page 4 of the annual
				  statement as earnings emerge from the business reinsured. [For example, on the
				  last day of calendar year N, company XYZ pays a $20 million initial commission
				  and expense allowance to company ABC for reinsuring an existing block of
				  business. Assuming a 34 percent tax rate, the net increase in surplus at
				  inception is $13.2 million ($20 million - $6.8 million) which is reported on
				  the "aggregate write-ins for gains and losses in surplus" line in the capital
				  and surplus account. $6.8 million (34 percent of $20 million) is reported as
				  income on the "commissions and expense allowances on reinsurance ceded" line of
				  the summary of operations. At the end of year N+1 the business has earned $4
				  million. ABC had paid $.5 million in profit and risk charges in arrears for the
				  year and has received a $1 million experience refund. Company ABC's annual
				  statement would report $1.65 million (66 percent of ($4 million - $1 million -
				  $.5 million) up to a maximum of $13.2 million) on the "commissions and expense
				  allowance on in reinsurance ceded" line of the summary of operations, and $1.65
				  million on the "aggregate write-ins for gains and losses in surplus" line of
				  the capital and surplus account. The experience refund would be reported
				  separately as a miscellaneous income item in the summary of
				  operations.]
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.12 - WRITTEN AGREEMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
A. No
				reinsurance agreement or amendment to any agreement may be used to reduce any
				liability or to establish any asset in any financial statement filed with the
				superintendent, unless the agreement, amendment or a binding letter of intent
				has been duly executed by both parties no later than the "as of date" of the
				financial statement.
B. In the case
				of a letter of intent, a reinsurance agreement or an amendment to a reinsurance
				agreement must be executed within a reasonable period of time, not exceeding
				ninety days from the execution date of the letter of intent, in order for
				credit to be granted for the reinsurance ceded.
C. The reinsurance agreement shall provide
				that:
(1) the agreement shall constitute the
				entire agreement between the parties with respect to the business being
				reinsured thereunder and that there are no understandings between the parties
				other than as expressed in the agreement; and
(2) any change or modification to the
				agreement shall be null and void unless made by amendment to the agreement and
				signed by both parties.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.13 - EXISTING AGREEMENTS

Current through Register Vol. 35, No. 13, July 16, 2024
Insurers subject to this rule shall reduce to zero by
				  December 31, 1995 any reserve credits or assets established with respect to
				  reinsurance agreements entered into prior to the effective date of this rule
				  which, under the provisions of this rule would not be entitled to recognition
				  of the reserve credits or assets; provided, however, that the reinsurance
				  agreements shall have been in compliance with laws or rules in existence
				  immediately preceding the effective date of this rule.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 7 - LIFE AND HEALTH REINSURANCE AGREEMENTS › Section 13.2.7.14 - TABLE A - RISK CATEGORIES

Current through Register Vol. 35, No. 13, July 16, 2024
A.
				Morbidity.
B. Mortality.
C. Lapse: This is the risk that a policy will
				voluntarily terminate prior to the recoupment of a statutory surplus strain
				experienced at issue of the policy.
D. Credit Quality (C1). This is the risk that
				invested assets supporting the reinsured business will decrease in value. The
				main hazards are that assets will default or that there will be a decrease in
				earning power. It excludes market value declines due to changes in interest
				rate.
E. Reinvestment (C2). This is
				the risk that interest rates will fall and funds reinvested (coupon payments or
				monies received upon asset maturity or call) will therefore earn less than
				expected. If asset durations are less than liability durations, the mismatch
				will increase.
F. Disintermediation
				(C3). This is the risk that interest rates rise and policy loans and surrenders
				increase or maturing contracts do not renew at anticipated rates of renewal. If
				asset durations are greater than the liability durations, the mismatch will
				increase. Policyholders will move their funds into new products offering higher
				rates. The company may have to sell assets at a loss to provide for these
				withdrawals.
+ = Significant 0 = Insignificant
RISK CATEGORY
A
B
C
D
E
F
Health insurance - other than LTC/LTD*
+
0
+
0
0
0
Health insurance - LTC/LTD*
+
0
+
+
+
0
Immediate annuities
0
+
0
+
+
0
Single premium deferred annuities
0
0
+
+
+
+
Flexible premium deferred annuities
0
0
+
+
+
+
Guaranteed interest contracts
0
0
0
+
+
+
Other annuity deposit business
0
0
+
+
+
+
Single premium whole life
0
+
+
+
+
+
Traditional non-par permanent
0
+
+
+
+
+
Traditional non-par term
0
+
+
0
0
0
Traditional par permanent
0
+
+
+
+
+
Traditional par term
0
+
+
0
0
0
Adjustable premium permanent
0
+
+
+
+
+
Indeterminate premium permanent
0
+
+
+
+
+
Universal life flexible premium
0
+
+
+
+
+
Universal life fixed premium
0
+
+
+
+
+
Universal life fixed premium - dump-in premiums
							 allowed
0
+
+
+
+
+
* LTC = Long Term Care
LTD = Long Term Disability
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.3 - STATUTORY AUTHORITY

Current through Register Vol. 35, No. 13, July 16, 2024
Section 59 A-2-9 NMSA 1978 and the Credit for Reinsurance Act
				  ("CFR Act"), Sections 59A-12E-1 to 59A-12E-18 NMSA 1978.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.5 - EFFECTIVE DATE

Current through Register Vol. 35, No. 13, July 16, 2024
July 1, 2022, unless a later date is cited at the end of a
				  section.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.6 - OBJECTIVE

Current through Register Vol. 35, No. 13, July 16, 2024
The purpose of this rule is to implement the Credit for
				  Reinsurance Act ("CFR Act"), Sections 59A-12E-1 to 59A-12E-18 NMSA
				  1978.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.7 - DEFINITIONS

Current through Register Vol. 35, No. 13, July 16, 2024
As used in this rule:
A.
"Annual financial statement"
means the statement required by Section
				59A-5-29 NMSA
				1978.
B.
"Beneficiary"
means the entity for whose sole benefit the trust has been established and any
				successor of the beneficiary by operation of law, including without limitation
				any liquidator, rehabilitator, receiver or conservator except that, if a court
				of law appoints a successor in interest to a domestic insurer for whose benefit
				a letter of credit qualified under
				13.2.8.24 NMAC has
				been established, then the named beneficiary includes and is limited to the
				court-appointed domiciliary receiver.
C.
"Commissioner"
means the
				individual or regulatory agency in a jurisdiction other than New Mexico who has
				jurisdiction over banking, financial services, the business of insurance, or
				other relevant business.
D.
"Form"
means a form, including any applicable instructions, that
				is posted on the official OSI website or, if the form is generated by an agency
				or entity other than OSI, an official form to be obtained from such other
				agency or entity. Forms AR-1, CR-1, CR-F, CR-S and RJ-1 as referenced in this
				rule will be posted on the official OSI website.
E.
"Grantor"
means the entity
				that has established a trust for the sole benefit of the beneficiary. When
				established in conjunction with a reinsurance agreement, the grantor is the
				unlicensed, unaccredited assuming insurer.
F.
"Jurisdiction"
means any
				state, district or territory of the U.S. and any lawful national
				government.
G.
"Liabilities"
means the assuming insurer's gross liabilities
				attributable to reinsurance ceded by U.S. domiciled insurers excluding
				liabilities that are otherwise secured by acceptable means, and shall include:
(1) for business ceded by domestic insurers
				authorized to write accident and health, and property and casualty insurance:
(a) losses and allocated loss expenses paid
				by the ceding insurer, recoverable from the assuming insurer;
(b) reserves for losses reported and
				outstanding;
(c) reserves for
				losses incurred but not reported;
(d) reserves for allocated loss expenses;
				and
(e) unearned premiums;
				or
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.8 - CREDIT FOR REINSURANCE - REINSURER LICENSED IN THIS STATE

Current through Register Vol. 35, No. 13, July 16, 2024
Pursuant to Paragraph (1) of Subsection D of Section
				  59A-12E-3 NMSA 1978, the superintendent will allow credit for reinsurance ceded
				  by a domestic insurer to an assuming insurer that was licensed in this state as
				  of any date on which statutory financial statement credit for reinsurance is
				  claimed.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.9 - CREDIT FOR REINSURANCE - ACCREDITED REINSURERS

Current through Register Vol. 35, No. 13, July 16, 2024
A. Pursuant to Paragraph (1) of Subsection D
				of Sections 59A-12E-3 and 59A-12E-5 NMSA 1978, the superintendent will allow
				credit for reinsurance ceded by a domestic insurer to an assuming insurer that
				is accredited as a reinsurer in this state as of the date on which statutory
				financial statement credit for reinsurance is claimed. An accredited reinsurer
				shall:
(1) File a properly executed Form AR-1
				as evidence of its submission to this state's jurisdiction and to this state's
				authority to examine its books and records;
(2) File with the superintendent a certified
				copy of a certificate of authority or other acceptable evidence that it is
				licensed to transact insurance or reinsurance in at least one state, or, in the
				case of a U.S. branch of an alien assuming insurer, is entered through and
				licensed to transact insurance or reinsurance in at least one state;
(3) File annually with the superintendent a
				copy of its annual statement filed with the insurance department of its state
				of domicile or, in the case of an alien assuming insurer, with the state
				through which it is entered and in which it is licensed to transact insurance
				or reinsurance, and a copy of its most recent audited financial statement;
				and
(4) Maintain a surplus as
				regards policyholders in an amount not less than $20,000,000, or obtain the
				affirmative approval of the superintendent upon a finding that it has adequate
				financial capacity to meet its reinsurance obligations and is otherwise
				qualified to assume reinsurance from domestic insurers.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.10 - CREDIT FOR REINSURANCE - REINSURER DOMICILED IN ANOTHER STATE

Current through Register Vol. 35, No. 13, July 16, 2024
A. Pursuant to
				Paragraph (2) of Subsection D of Section 59A-12E-3 NMSA 1978, the
				superintendent will allow credit for reinsurance ceded by a domestic insurer to
				an assuming insurer that as of any date on which statutory financial statement
				credit for reinsurance is claimed:
(1) Is
				domiciled in (or, in the case of a U.S. branch of an alien assuming insurer, is
				entered through) a state that employs standards regarding credit for
				reinsurance substantially similar to those applicable under the Act and this
				rule;
(2) Maintains a surplus as
				regards policyholders in an amount not less than $20,000,000; and
(3) Files a properly executed Form AR-1 with
				the superintendent as evidence of its submission to this state's authority to
				examine its books and records.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.12 - INVESTMENT OF TRUST ASSETS

Current through Register Vol. 35, No. 13, July 16, 2024
A. Assets
				deposited in trusts established pursuant to Subsections A and B of Section
				59A-12E-3 NMSA 1978 and this Section shall be valued according to their current
				fair market value and shall consist only of cash in U.S. dollars, certificates
				of deposit issued by a qualified U.S. financial institution as defined in
				Paragraph (1) of Subsection E of Section 59A-12E-2 NMSA 1978, clean,
				irrevocable, unconditional and "evergreen" letters of credit issued or
				confirmed by such qualified U.S. financial institution, and investments of the
				type specified in this subsection, but investments in or issued by an entity
				controlling, controlled by or under common control with either the grantor or
				beneficiary of the trust shall not exceed five percent of total investments. No
				more than twenty percent of the total of the investments in the trust may be
				foreign investments authorized under Subparagraph (e) of Paragraphs (1) or (3)
				of this subsection or the equity interest requirements of Subsection B or
				Subsection D of 13.2.8.12 NMAC, and no more than ten percent of the total of
				the investments in the trust may be securities denominated in foreign
				currencies. For purposes of applying the preceding sentence, a depository
				receipt denominated in U.S. dollars and representing rights conferred by a
				foreign security shall be classified as a foreign investment denominated in a
				foreign currency. The assets of a trust established to satisfy the requirements
				of Subsections A and B of Section 59A-12E-3 NMSA 1978 shall be invested only as
				follows:
(1) Government obligations that are
				not in default as to principal or interest, that are valid and legally
				authorized and that are issued, assumed or guaranteed by:
(a) the U.S. or by any agency or
				instrumentality of the U.S.;
(b) a
				state of the U.S.;
(c) a territory,
				possession or other governmental unit of the U.S.;
(d) an agency or instrumentality of a
				governmental unit referred to in Subparagraphs (b) and (c) of this paragraph if
				the obligations shall be by law (statutory or otherwise) payable, as to both
				principal and interest, from taxes levied or by law required to be levied or
				from adequate special revenues pledged or otherwise appropriated or by law
				required to be provided for making these payments, but shall not be obligations
				eligible for investment under this paragraph if payable solely out of special
				assessments on properties benefited by local improvements; or
(e) the government of any other country that
				is a member of the organization for economic cooperation and development and
				whose government obligations are rated A or higher, or the equivalent, by a
				rating agency recognized by the securities valuation office of the
				NAIC.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.13 - CREDIT FOR REINSURANCE - CERTIFIED REINSURERS

Current through Register Vol. 35, No. 13, July 16, 2024
A. Pursuant to Sections 59A-12E-7 through
				59A-12E-9 NMSA 1978, the superintendent will allow credit for reinsurance ceded
				by a domestic insurer to an assuming insurer that has been certified as a
				reinsurer in this state at all times for which statutory financial statement
				credit for reinsurance is claimed under this Section or
				13.2.8.14
				NMAC. The credit allowed shall be based upon the security held by or on behalf
				of the ceding insurer in accordance with a rating assigned to the certified
				reinsurer by the superintendent. The security shall be in a form consistent
				with the provisions of Sections 59A-12E-7 through 59A-12E-9 and Section
				59A-12E-16 NMSA 1978 and
				13.2.8.19
				through
				13.2.8.26
				NMAC. The amount of security required in order for full credit to be allowed
				shall correspond with the following requirements:
Ratings Security
Required
Secure - 1
0%
Secure - 2
10%
Secure - 3
20%
Secure - 4
50%
Secure - 5
75%
Vulnerable - 6
100%
B.
				Affiliated reinsurance transactions shall receive the same opportunity for
				reduced security requirements as all other reinsurance transactions.
C. The superintendent will require the
				certified reinsurer to post one hundred percent, for the benefit of the ceding
				insurer or its estate, security upon the entry of an order of rehabilitation,
				liquidation or conservation against the ceding insurer.
D. In order to facilitate the prompt payment
				of claims, a certified reinsurer shall not be required to post security for
				catastrophe recoverables for a period of one year from the date of the first
				instance of a liability reserve entry by the ceding company as a result of a
				loss from a catastrophic occurrence as recognized by the superintendent. The
				one-year deferral period is contingent upon the certified reinsurer continuing
				to pay claims in a timely manner. Reinsurance recoverables for only the
				following lines of business as reported on the NAIC annual financial statement
				related specifically to the catastrophic occurrence will be included in the
				deferral:
(1) Line 1: Fire;
(2) Line 2: Allied lines;
(3) Line 3: Farmowners multiple
				peril
(4) Line 4: Homeowners
				multiple peril;
(5) Line 5:
				Commercial multiple peril;
(6) Line
				9: Inland marine;
(7) Line 12:
				Earthquake; and
(8) Line 21: Auto
				physical damage.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.14 - CERTIFICATION PROCEDURE

Current through Register Vol. 35, No. 13, July 16, 2024
A. The
				superintendent will post notice on the OSI website promptly upon receipt of any
				application for certification, including instructions on how members of the
				public may respond to the application. The superintendent will not take final
				action on the application until at least 30 days after posting the notice
				required by this paragraph.
B. The
				superintendent will issue written notice to an assuming insurer that has made
				application and been approved as a certified reinsurer. Included in such notice
				shall be the rating assigned the certified reinsurer in accordance with
				13.2.8.13
				NMAC. The superintendent will publish a list of all certified reinsurers and
				their ratings.
C. In order to be
				eligible for certification, the assuming insurer shall meet the following
				requirements:
(1) the assuming insurer shall
				be domiciled and licensed to transact insurance or reinsurance in a Qualified
				Jurisdiction, as determined by the superintendent pursuant to
				13.2.8.15
				NMAC;
(2) the assuming insurer
				shall maintain capital and surplus, or its equivalent, of no less than
				$250,000,000 calculated in accordance with Subsection E, Paragraph (8) of this
				section. This requirement may also be satisfied by an association including
				incorporated and individual unincorporated underwriters having minimum capital
				and surplus equivalents (net of liabilities) of at least $250,000,000 and a
				central fund containing a balance of at least $250,000,000;
(3) the assuming insurer shall maintain
				financial strength ratings from two or more rating agencies deemed acceptable
				by the superintendent. These ratings shall be based on interactive
				communication between the rating agency and the assuming insurer and shall not
				be based solely on publicly available information. These financial strength
				ratings will be one factor used by the superintendent in determining the rating
				that is assigned to the assuming insurer. Acceptable rating agencies include
				the following:
(a) Standard &
				Poor's;
(b) Moody's investors
				service;
(c) Fitch
				ratings;
(d) A.M. Best company;
				or
(e) Any other nationally
				recognized statistical rating organization.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.17 - CREDIT FOR REINSURANCE REQUIRED BY LAW

Current through Register Vol. 35, No. 13, July 16, 2024
Pursuant to Subsection E of Section 59A-12E-13 NMSA, the
				  superintendent will allow credit for reinsurance ceded by a domestic insurer to
				  an assuming insurer not meeting the requirements of Sections 59A-12E-3 through
				  59A-12E-13 NMSA 1978, but only as to the insurance of risks located in
				  jurisdictions where the reinsurance is required by the applicable law or rule
				  of that jurisdiction.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.18 - ASSET OR REDUCTION FROM LIABILITY FOR REINSURANCE CEDED TO AN UNAUTHORIZED ASSUMING INSURER NOT MEETING THE REQUIREMENTS OF SECTIONS 13.2.8.8 THROUGH 13.2.8.17 NMAC

Current through Register Vol. 35, No. 13, July 16, 2024
A. Pursuant to
				Section 59A-12E-6 NMSA 1978, the superintendent will allow a reduction from
				liability for reinsurance ceded by a domestic insurer to an assuming insurer
				not meeting the requirements of Sections 59A-12E-3 through 59A-12E-15 NMSA 1978
				in an amount not exceeding the liabilities carried by the ceding insurer. The
				reduction shall be in the amount of funds held by or on behalf of the ceding
				insurer, including funds held in trust for the exclusive benefit of the ceding
				insurer, under a reinsurance contract with such assuming insurer as security
				for the payment of obligations under the reinsurance contract. The security
				shall be held in the U.S. subject to withdrawal solely by, and under the
				exclusive control of, the ceding insurer or, in the case of a trust, held in a
				qualified U.S. financial institution as defined in Paragraph (2) of Subsection
				E of Section 59A-12E-2 NMSA 1978. This security may be in the form of any of
				the following:
(1) cash;
(2) securities listed by the Securities
				Valuation Office of the NAIC, including those deemed exempt from filing as
				defined by the Purposes and Procedures Manual of the Securities Valuation
				Office, and qualifying as admitted assets;
(3) clean, irrevocable, unconditional and
				"evergreen" letters of credit issued or confirmed by a qualified U.S.
				institution, as defined in Paragraph (1) of Subsection E of Section 59A-12E-2
				NMSA 1978, effective no later than December 31 of the year for which filing is
				being made, and in the possession of, or in trust for, the ceding insurer on or
				before the filing date of its annual statement. Letters of credit meeting
				applicable standards of issuer acceptability as of the dates of their issuance
				(or confirmation) shall, notwithstanding the issuing (or confirming)
				institution's subsequent failure to meet applicable standards of issuer
				acceptability, continue to be acceptable as security until their expiration,
				extension, renewal, modification or amendment, whichever first occurs;
				or
(4) any other form of security
				acceptable to the superintendent.
New Mexico Administrative Code › Title 13 - INSURANCE › Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION › Part 8 - CREDIT FOR REINSURANCE › Section 13.2.8.19 - REQUIRED CONDITIONS FOR TRUST AGREEMENTS QUALIFIED UNDER SECTION 18 OF 13.2.8 NMAC

Current through Register Vol. 35, No. 13, July 16, 2024
A. The trust
				agreement shall be entered into between the beneficiary, the grantor and a
				trustee, which shall be a qualified U.S. financial institution as defined in
				Paragraph (2) of Subsection E of Section 59A-12E-2 NMSA 1978.
B. The trust agreement shall create a trust
				account into which assets shall be deposited.
C. All assets in the trust account shall be
				held by the trustee at the trustee's office in the U.S.
D. The trust agreement shall provide that:
(1) the beneficiary shall have the right to
				withdraw assets from the trust account at any time, without notice to the
				grantor, subject only to written notice from the beneficiary to the
				trustee;
(2) no other statement or
				document is required to be presented to withdraw assets, except that the
				beneficiary may be required to acknowledge receipt of withdrawn
				assets;
(3) it is not subject to
				any conditions or qualifications outside of the trust agreement; and
(4) it shall not contain references to any
				other agreements or documents except as provided for in Subsections J and K of
				this section.