NMSA 1978, § 59A-35-1 Short title
59A-35-1. Short title
This article [Chapter 59A, Article 35 NMSA 1978] constitutes and may be cited as the "Sale of Insurance Securities Law".
Laws 1984, ch. 127, § 591.
Sale of Insurance Securities
NMSA 1978 ch. 59A, art. 35
in effectNMSA 1978, § 59A-35-2 Scope of article
59A-35-2. Scope of article
This article shall apply as to sale or offer of sale in this state of any insurance security issued or proposed to be issued by any corporation or person whether or not organized under the laws of this state or authorized to transact business in this state.
Laws 1984, ch. 127, § 590.
NMSA 1978, § 59A-35-3 "Security" defined
59A-35-3. "Security" defined
For the purposes of this article and except as context requires otherwise, "security" means any note, stock, treasury stock, share, bond, debenture, evidence of indebtedness, surplus note, contribution certificate, certificate of deposit for a security, certificate of interest or participation, voting trust certificate, reorganization certificate, investment contract (whether or not included as a provision in an insurance policy), or other similar instrument of an insurer or other person for financing formation or operations or management or acquisition of an insurer or interest therein, whether stock, mutual, reciprocal, Lloyds plan or other type of insurer.
Laws 1984, ch. 127, § 592.
NMSA 1978, § 59A-35-4 "Affiliate" defined
59A-35-4. "Affiliate" defined
For the purposes of this article an "affiliate" is a person controlling or controlled by or under common control with an insurer or issuer of securities.
Laws 1984, ch. 127, § 593.
NMSA 1978, § 59A-35-5 "Promoter" defined
59A-35-5. "Promoter" defined
For the purposes of this article a "promoter" is any person who, acting alone or with others, initiates or participates in founding an insurer or organization to acquire financial interest in or to finance, manage or control an insurer, other than as policyholder.
Laws 1984, ch. 127, § 594.
NMSA 1978, § 59A-35-6 Registration of security; permit required
59A-35-6. Registration of security; permit required
No person shall sell or offer for sale in this state any security not exempt under Section 596 [59A-35-7 NMSA 1978] of this article, unless registered with the superintendent, covered by a subsisting securities permit issued by the superintendent and otherwise in compliance with requirements of this article.
Laws 1984, ch. 127, § 595.
NMSA 1978, § 59A-35-7 Exemptions
59A-35-7. Exemptions
No such registration or permit shall be required as to:
A. isolated sales of securities in private transactions, whether or not effected through a broker-dealer;
B. non-issuer distribution of an outstanding security by a registered broker-dealer;
C. transactions in due and regular discharge of responsibilities and duties by an executor, administrator, sheriff, marshal, receiver, trustee in bankruptcy, guardian or conservator;
D. securities distributed to existing holders of securities of the distributing entity as a dividend, stock split or reverse stock split, paid in whole or in part in such distributed securities;
E. securities distributed to existing holders of securities of the distributing entity without payment of additional consideration pursuant to a right of conversion, or exchange, or pursuant to reclassification, recapitalization, reorganization, sale of assets, or liquidation of the distributing entity;
F. offer and sale of securities by a newly-formed domestic corporation not involving a public offering and so offered and sold to not over twenty-five (25) persons if:
(1) upon completion of such offering and sale the domestic corporation has not in excess of twenty-five (25) security holders;
(2) all purchasers of the securities do so for investment purposes only and not with a view to further distribution, and so declare in writing to the domestic corporation;
(3) no commission or other compensation is paid or to be paid in connection with any such sale; and
(4) prior to any such offer and sale the domestic corporation files with the superintendent in writing the plan, purposes, and manner of conduct of the proposed offer and sale, uses to be made of proceeds thereof, and information in writing proposed to be given offerees, and such filing is not disapproved by the superintendent within twenty (20) days after filing. The superintendent may disapprove the filing upon reasonable grounds. Failure of the superintendent so to disapprove shall not be deemed, inferred, or represented to be an approval of the proposal;
G. sales of securities by an insurance holding corporation for purposes which do not include the financing, directly or indirectly, of an insurer;
H. securities issued or proposed to be issued pursuant to any merger, consolidation, bulk reinsurance, conversion, or mutualization approved by the superintendent under Article 34 [Chapter 59A, Article 34 NMSA 1978] (domestic stock and mutual insurers) of the Insurance Code; or
I. fractional share interests in stock of the issuer offered and sold for purpose of rounding out to whole shares in connection with any stock dividend or other distribution of shares to existing security holders of the issuer.
Laws 1984, ch. 127, § 596.
NMSA 1978, § 59A-35-8 Registration procedure
59A-35-8. Registration procedure
A. The person desiring to register a security under this article shall file with the superintendent a registration statement in form as prescribed and furnished by the superintendent appropriate to the proposed offering. In prescribing the registration statement form the superintendent shall give due consideration to the circumstances of the offering, whether by a newly-formed domestic corporation or entity, whether covered by registration or other appropriate filing with the Securities and Exchange Commission under which an offering may be made of the securities, and to practices of administrators of state laws governing offer and sale of corporate securities relative to registration by coordination, or qualification, or upon notification.
B. As to registrants in general the registration statement and documents required to be filed therewith may, and as to newly-formed proposed insurers or newly-formed entities shall, require disclosure of:
(1) name and address of proposed issuer, business in which engaged or to engage, business history and financial condition;
(2) name and residence address of each promoter, director, officer and other management personnel and ultimate controlling stockholder or owner of the issuer, insurer or registrant, together with business experience, biographical information and proof of identity;
(3) affiliates, if any, of registrant or issuer, business in which engaged, financial condition, and material arrangements and transactions between such affiliates and registrant or issuer;
(4) use to be made of proceeds of proposed sale of securities;
(5) underwriting arrangements, if any, of the securities, or plan under which securities are proposed to be offered and sold, together with copies of contracts made or proposed to be made relating thereto;
(6) information proposed to be furnished offerees as shown by copy of any proposed prospectus or other printed information to be given offerees;
(7) management or agency contracts, whether or not exclusive, existing or proposed as to issuer or registrant;
(8) description of the securities, number and price thereof proposed to be sold and sales costs; and
(9) such other reasonably pertinent information as required by the superintendent.
C. When filed, the registration statement shall be accompanied by payment of the applicable filing fee as specified in Section 598 [59A-35-9 NMSA 1978] of this article.
Laws 1984, ch. 127, § 597.
NMSA 1978, § 59A-35-9 Registration fee
59A-35-9. Registration fee
A. With filing of the registration statement the superintendent shall collect, and the registrant shall pay to the superintendent the applicable registration statement filing fee in amount as follows:
(1) for registration by coordination or similar thereto, one hundred dollars ($100);
(2) for registration by notification or similar thereto, one hundred dollars ($100);
(3) for registration by qualification or similar thereto, fee computed upon gross proposed offering price of all securities covered by the registration as follows:
(a) one-tenth (1/10) of one percent of first million dollars ($1,000,000); and
(b) one-twentieth (1/20) of one percent of amounts in excess of the first one million dollars ($1,000,000).
B. All such fees shall be deemed earned when paid and shall not be subject to refund.
Laws 1984, ch. 127, § 598.
NMSA 1978, § 59A-35-10 Issuance, denial of permit
59A-35-10. Issuance, denial of permit
A. The superintendent shall expeditiously examine a newly-filed registration statement and make such investigation of the registrant and related matters as he deems advisable.
B. Unless the superintendent finds that the permit should be denied on any of the grounds stated in Subsection C of this section, he shall promptly issue to the registrant a securities permit in appropriate form covering the offering of securities.
C. The superintendent may deny a permit on the ground that:
(1) the registration statement is incomplete and has not been completed within a reasonable time allowed therefor by the superintendent and communicated to the registrant;
(2) the proposed sale or issuance of securities would be in violation of law;
(3) the conditions or circumstances of the registrant or insurer, or the terms and conditions of the offering, would make the offering unfair or inequitable as to existing or proposed security holders or investors;
(4) funds proposed to be secured by the offering are inadequate or excessive for the purposes intended;
(5) proposed costs of the offering are excessive;
(6) any of the individuals associated or to be associated in the registrant or insurer or any affiliate thereof, or the ultimate controlling stockholder or owner of the registrant, issuer or insurer is not of good reputation as to business affairs or financial responsibility;
(7) the existing or proposed insurer would not be able to qualify for or continue to hold a certificate of authority to transact insurance in this state for any of the reasons stated in Section 59A-5-13 NMSA 1978;
(8) if an insurance holding corporation, its plan of capitalization or security options or financing are such as would be prohibited under the Insurance Code as to a newly formed domestic stock insurer;
(9) there is material variance, adverse to the registrant, as between information furnished by the registrant in the registration statement and that determined by the superintendent on investigation;
(10) information proposed to be furnished investors is incomplete, untrue, or would tend to mislead; or
(11) grant of the permit would be contrary to the best interest of the people of New Mexico, for reasons stated in the order denying the permit.
D. The superintendent shall deny the permit if the securities are of, or for financing, a foreign insurer not qualified for authority to transact insurance in New Mexico.
E. The superintendent's order denying a permit shall state the grounds therefor and be delivered to the registrant or mailed addressed to registrant at its address last of record with the superintendent.
Laws 1984, ch. 127, § 599; 1987, ch. 259, § 23.
NMSA 1978, § 59A-35-11 Terms of permit; compliance
59A-35-11. Terms of permit; compliance
A. Each such securities permit issued by the superintendent shall, or may, contain provisions, as applicable, as follows:
(1) it shall state the securities which are to be offered, the number and selling price thereof;
(2) it may require that the purchase price shall be payable in lawful money of the United States or in such other securities as may be specified by class or description in the permit;
(3) it may require that all securities offered shall be offered and sold at the same price to all parties, subject, at the option of the registrant, as to subscriptions to be paid in installments, to a reasonable additional charge to cover expense and loss of interest earnings attributable to such installment subscriptions;
(4) it shall limit the portion of funds received for the securities which may be used for organization, securities sales and promotion expenses to such amount as the superintendent deems reasonably adequate under the proposed plan of sale, but in no event to exceed fifteen percent of such funds when and as actually received;
(5) it may require the founders, promoters, incorporators, or other persons directly involved in the proposed insurer or offering to subscribe and pay for immediately and in cash, at the proposed public offering price, a reasonable proportion of the same securities, and to withhold resale, transfer, assignment, or encumbrance of securities so purchased for a reasonable period, as specified in the permit, after completion of the offering, except by an executor or administrator of the estate of a deceased purchaser;
(6) it may prohibit, limit or control the granting of options to buy the securities or any of them for such reasonable period as is specified in the permit;
(7) it may require impoundment of funds received on sale of the securities, after deduction therefrom of applicable organization and sales expense as allowed under the permit, until the offering is completed, or, as to a proposed new insurer, the insurer has qualified for and received a certificate of authority to transact insurance as proposed in the registration statement, or for other reasonable period;
(8) it may make reasonable requirements as to accounting, reports, deposits and other matters as the superintendent deems advisable for protection of existing or prospective investors or policyholders;
(9) it shall specify an expiration date of the permit. In the case of a proposed new domestic insurer, the expiration date shall be one (1) year from date of incorporation, subject to extension by the superintendent for an additional one year upon good cause shown;
(10) it may require filing of a surety bond in adequate principal sum as determined by the superintendent for protection of investors or other reasonable purposes as specified by the superintendent; and
(11) it may contain other reasonable provisions which the superintendent deems advisable.
B. The registrant and all associated or affiliated directors, officers, employees, agents, founders, promoters, incorporators, and representatives shall comply with the terms of the permit.
Laws 1984, ch. 127, § 600.
NMSA 1978, § 59A-35-12 Permit as inducement
59A-35-12. Permit as inducement
A. The granting of a securities permit is permissive only and shall not constitute an endorsement or approval by the superintendent or any other agency or department of the state of New Mexico of any person or thing related to the offering of securities or constitute evidence of the completeness or accuracy of information presented in any prospectus or other sales publicity or literature, or a recommendation of purchase of any securities offered. The existence of the permit shall not be advertised or used as an inducement in any solicitation.
B. Each permit issued by the superintendent shall state conspicuously in boldface type the substance of Subsection A of this section in terminology prescribed by the superintendent.
Laws 1984, ch. 127, § 601; 1999, ch. 289, § 28; 2013, ch. 74, § 31.
NMSA 1978, § 59A-35-13 Public announcements of offering
59A-35-13. Public announcements of offering
A. No registrant, issuer, or other person proposing to sell in this state any securities covered by a securities permit issued by the superintendent under this article shall publish or disseminate in this state in any manner any advertising, announcement or literature regarding the offering unless the proposed advertising, announcement or literature has first been filed with and not disapproved by the superintendent.
B. The proposed advertising, announcement or literature may be used after expiration of thirty (30) days after filing with the superintendent unless disapproved in writing by the superintendent within such thirty (30) day period. The superintendent shall disapprove any such advertising, announcement, or literature if found by him to be untrue, misleading, or likely to deceive the public. Failure of the superintendent to disapprove shall not constitute or be deemed to constitute an approval of the advertising, announcement or literature.
C. The superintendent may require insertion in any such advertising, announcement, or literature of a disclaimer similar to that required for securities permit under Section 601 [59A-35-12 NMSA 1978] of this article in terminology prescribed or accepted by the superintendent.
Laws 1984, ch. 127, § 602.
NMSA 1978, § 59A-35-14 Modification, revocation of permit
59A-35-14. Modification, revocation of permit
The superintendent may for cause modify a securities permit theretofore issued; and may after a hearing thereon revoke the permit for violation of law or the terms of the permit or any proper order of the superintendent, or for material misrepresentation or practices injurious to the public interest in the offering or sale of the securities.
Laws 1984, ch. 127, § 603.
NMSA 1978, § 59A-35-15 Exclusive jurisdiction
59A-35-15. Exclusive jurisdiction
Securities registered with the superintendent under this article shall not be subject to registration or similar filing with any other governmental department or agency, or under any other law, of this state.
Laws 1984, ch. 127, § 604.
NMSA 1978, § 59A-35-16 Securities salespersons, license required
59A-35-16. Securities salespersons, license required
No person shall in this state solicit subscription to or purchase of any security covered by a securities permit issued under this article unless such securities salesperson is licensed therefor. If the security is not one to be issued by a newly-formed or proposed new domestic insurer or holding company proposing to acquire or form a domestic insurer, the license shall be one issued by the securities division of the department of financial institutions under the laws of this state applying to public offering and sale of securities in general; otherwise, the license shall be one issued by the superintendent under the provisions of this article.
Laws 1984, ch. 127, § 605.
NMSA 1978, § 59A-35-17 Qualifications, procedure for security salesperson license
59A-35-17. Qualifications, procedure for security salesperson license
A. Applicants for license as securities salesperson shall be qualified as follows:
(1) be an individual not less than twenty-one years of age;
(2) be honest and trustworthy, of good personal and business reputation and financially responsible;
(3) take and pass an examination as given by the superintendent, reasonably testing the knowledge of the applicant of the securities to be sold, the responsibilities of a salesperson relative thereto and competence of the applicant to act as a securities salesperson; and
(4) file with the superintendent along with application for license and thereafter maintain in force while so licensed, a surety bond issued by an authorized surety insurer or deposit of cash or cash-equivalent in lieu of the bond, in reasonable penal sum fixed by the superintendent but not less than ten thousand dollars ($10,000), for protection of the registrant, persons purchasing securities through the salesperson and the state of New Mexico and to assure compliance with law and the applicable regulations of the superintendent.
B. Procedure for application for license, examination of applicant, issuance, terms, duration and suspension or revocation of license and related matters shall be as provided by applicable provisions of Chapter 59A, Article 11 NMSA 1978. Fee for license and examination shall be as fixed in Section 59A-6-1 NMSA 1978.
C. This section shall not apply as to securities broker-dealers registered as such under the Securities Exchange Act of 1934, as amended, or as to securities the sale of which is underwritten (other than on a best efforts basis) by such a broker-dealer.
Laws 1984, ch. 127, § 606; 1987, ch. 259, § 24; 1999, ch. 272, § 20; 1999, ch. 289, § 29.
NMSA 1978, § 59A-35-18 Penalty for violation
59A-35-18. Penalty for violation
Any person violating any of the following provisions of this article shall upon conviction thereof be guilty of a felony punishable by a fine of not less than five hundred dollars ($500) or more than twenty thousand dollars ($20,000):
A. Section 595 [59A-35-6 NMSA 1978] (registration of security, permit required);
B. Subsection B of Section 600 [59A-35-11 NMSA 1978] (terms of permit; compliance);
C. Section 601 [59A-35-12 NMSA 1978] (permit as inducement);
D. Section 602 [59A-35-13 NMSA 1978] (public announcements of offering); and
E. Section 605 [59-35-16 NMSA 1978] (securities salesmen, license required).
Laws 1984, ch. 127, § 607.
Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18562/index.doFetched: 10/20/2026