NMSA 1978, § 59A-41-1 Short title
59A-41-1. Short title
This article [Chapter 59A, Article 41 NMSA 1978] constitutes and may be cited as the Insurers Conservation, Rehabilitation, and Liquidation Law.
Laws 1984, ch. 127, § 694.
Conservation, Rehabilitation and Liquidation
NMSA 1978 ch. 59A, art. 41
in effectNMSA 1978, § 59A-41-2 Scope of article
59A-41-2. Scope of article
The provisions of Chapter 59A, Article 41 NMSA 1978 as applicable shall apply as to:
A. all insurers that are transacting or have transacted insurance in this state and against whom claims arising from that business may exist now or in the future;
B. all insurers that purport to do insurance business in this state;
C. all insurers having insureds resident in this state;
D. all persons in process of organization, or holding themselves out as organizing, or proposing to organize in this state for the purpose of becoming an insurer;
E. all nonprofit health care plans and fraternal benefit societies;
F. all title insurance companies;
G. all health maintenance organizations and prepaid dental or other prepaid health care delivery plans;
H. all Lloyds insurers, mandatory state pooling plans, mutual assessment companies, insurance exchanges, stipulated premium insurance companies, prearranged funeral plans, motor clubs, reciprocal insurers, surplus lines insurers, alien insurers or reinsurers with assets in trust or located in New Mexico, multiple employer welfare arrangements, risk retention groups, risk purchasing groups or surety companies; and
I. all other persons to whom such provisions may otherwise be made expressly applicable by law.
Laws 1984, ch. 127, § 693; 1991, ch. 125, § 29.
NMSA 1978, § 59A-41-3 Definitions
59A-41-3. Definitions
As used in this article and unless context otherwise requires, the words and terms defined in Sections 696 through 708 [59A-41-4 to 59A-41-16 NMSA 1978] of this article shall have the meanings ascribed to them respectively in such sections.
Laws 1984, ch. 127, § 695.
NMSA 1978, § 59A-41-4 "Ancillary state" defined
59A-41-4. "Ancillary state" defined
"Ancillary state" means any state other than a domiciliary state.
Laws 1984, ch. 127, § 696.
NMSA 1978, § 59A-41-5 "Creditor" defined
59A-41-5. "Creditor" defined
"Creditor" means a person having a claim, whether matured or unmatured, liquidated or unliquidated, secured or unsecured, or absolute, fixed or contingent.
Laws 1984, ch. 127, § 697.
NMSA 1978, § 59A-41-6 "Delinquency proceeding" defined
59A-41-6. "Delinquency proceeding" defined
"Delinquency proceeding" means any proceeding commenced against an insurer pursuant to this article for the purpose of conserving, rehabilitating, reorganizing or liquidating the insurer.
Laws 1984, ch. 127, § 698.
NMSA 1978, § 59A-41-7 "Domiciliary state" defined
59A-41-7. "Domiciliary state" defined
"Domiciliary state" means the state in which an insurer is incorporated or organized or, as to an alien insurer, the state in which at commencement of delinquency proceedings the larger amount of the insurer's assets are held in trust or on deposit for the benefit of its policyholders and creditors in the United States.
Laws 1984, ch. 127, § 699.
NMSA 1978, § 59A-41-8 "Foreign country" defined
59A-41-8. "Foreign country" defined
"Foreign country" means territory not in any state.
Laws 1984, ch. 127, § 700.
NMSA 1978, § 59A-41-9 "General assets" defined
59A-41-9. "General assets" defined
"General assets" means all property, real, personal or otherwise, not specifically mortgaged, pledged, deposited or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons, and as to such specifically encumbered property the term includes all such property or its proceeds in excess of the amount necessary to discharge the sums secured thereby. Assets held in trust or on deposit for the security or benefit of all policyholders or all policyholders and creditors in the United States are deemed general assets.
Laws 1984, ch. 127, § 701.
NMSA 1978, § 59A-41-10 "Impairment" defined
59A-41-10. "Impairment" defined
"Impairment" exists as to:
A. a stock, mutual, reciprocal, or foreign Lloyds insurer, when its basic capital is less than that required to be maintained by it under Section 83 [59A-5-16 NMSA 1978] of the Insurance Code;
B. a domestic Lloyds insurer, when its surplus is less than as required under Section 83 or Article 38 [Chapter 59A, Article 38 NMSA 1978] of the Insurance Code;
C. a nonprofit health care plan, when its assets are in amount less than the sum of its required trust deposit, required reserves and other liabilities;
D. a prepaid dental care plan, when its assets are in amount less than the sum of its required bond or deposit in lieu thereof, its required reserves, and its other liabilities;
E. a motor club, when its assets are in amount less than the sum of its required bond or deposit in lieu thereof, its required reserves, and its other liabilities; and
F. any other corporation, when its assets are in amount less than the sum of its surplus required, if any, to be maintained, its paid-in capital stock, if any, and its other liabilities.
Laws 1984, ch. 127, § 702.
NMSA 1978, § 59A-41-11 "Insolvency" defined
59A-41-11. "Insolvency" defined
"Insolvency" exists as to:
A. any organization, when it is unable to meet its obligations as they mature; or
B. a stock insurer or other stock corporation, when its assets are in amount less than its liabilities, exclusive of paid-in capital stock; or
C. a mutual, reciprocal, or foreign Lloyds insurer, when its assets are in amount less than its liabilities exclusive of the minimum paid-in basic capital required under Section 83 [59A-5-16 NMSA 1978] of the Insurance Code for its authority to transact insurance; or
D. a domestic Lloyds insurer, nonprofit health care plan, prepaid dental care plan, motor club, or other corporation other than any referred to in Subparagraphs B or C, above, when its assets are in amount less than its liabilities, exclusive of surplus, guaranty fund or deposit required to be maintained under the Insurance Code for its authority to transact insurance in this state.
Laws 1984, ch. 127, § 703.
NMSA 1978, § 59A-41-12 "Preferred claim" defined
59A-41-12. "Preferred claim" defined
"Preferred claim" means any claim accorded priority of payment from the insurer's or organization's general assets under applicable law.
Laws 1984, ch. 127, § 704.
NMSA 1978, § 59A-41-13 "Receiver" defined
59A-41-13. "Receiver" defined
"Receiver" means a receiver, liquidator, rehabilitator or conservator, as context may require.
Laws 1984, ch. 127, § 705.
NMSA 1978, § 59A-41-14 "Reciprocal state" defined
59A-41-14. "Reciprocal state" defined
"Reciprocal state" means any state other than this state in which in substance and effect the provisions of the Uniform Insurers Liquidation Act [59A-41-17 to 59A-41-23 NMSA 1978] are in force, including provisions requiring that the commissioners, director, superintendent of insurance or the equivalent insurance supervisory officer be the receiver of a delinquent insurer; and in which effective provisions exist for avoidance of fraudulent conveyances and unlawful preferential transfer.
Laws 1984, ch. 127, § 706.
NMSA 1978, § 59A-41-15 "Secured claim" defined
59A-41-15. "Secured claim" defined
"Secured claim" means any claim secured by mortgage, trust deed, pledge, deposit as security, escrow or otherwise, but not including special deposit claims or claims against general assets. "Secured claims" also include claims which more than four (4) months prior to commencement of delinquency proceedings in the state of the insurer's domicile have become liens upon specific assets through judicial process and not invalidated.
Laws 1984, ch. 127, § 707.
NMSA 1978, § 59A-41-16 "Special deposit claim" defined
59A-41-16. "Special deposit claim" defined
"Special deposit claim" means any claim secured by a deposit made under a statute for the security or benefit of a limited class or classes of persons, but not including any general assets.
Laws 1984, ch. 127, § 708.
NMSA 1978, § 59A-41-17 Uniform Insurers Liquidation Act; composition, severability and interpretation
59A-41-17. Uniform Insurers Liquidation Act; composition, severability and interpretation
A. Sections 695 [709] through 715 [59A-41-17 to 59A-41-23 NMSA 1978] of this article comprise and may be cited as the Uniform Insurers Liquidation Act.
B. If any provision of the Uniform Insurers Liquidation Act or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of the act are declared to be severable.
C. The Uniform Insurers Liquidation Act shall be so interpreted as to effectuate its general purpose to make uniform the laws of those states which enact it. To the extent that its provisions, when applicable, conflict with other provisions of the Insurance Code, the provisions of the Uniform Insurers Liquidation Act shall control.
Laws 1984, ch. 127, § 709.
NMSA 1978, § 59A-41-18 Conduct of delinquency proceedings against domestic insurers
59A-41-18. Conduct of delinquency proceedings against domestic insurers
A. Whenever under the laws of this state a receiver is to be appointed in delinquency proceedings for an insurer domiciled in this state, the court shall appoint the superintendent as such receiver. The court shall direct the superintendent forthwith to take possession of the assets of the insurer and to administer the same under the orders of the court.
B. As domiciliary receiver the superintendent and his successors in office shall be vested by operation of law with the title to all of the property, contracts and rights of action, and all of the books and records of the insurer wherever located, as of the date of entry of the order directing him to liquidate a domestic insurer or the United States branch of an alien insurer domiciled in the state and he shall have the right to recover the same and reduce the same to possession; except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are hereinafter prescribed for ancillary receivers appointed in this state as to assets located in this state. The filing or recording of the order directing possession to be taken, or a certified copy thereof, in the office where instruments affecting title to property are required to be filed or recorded shall impart the same notice as would be imparted by a deed, bill of sale or other evidence of title duly filed or recorded. The superintendent as domicilary [domiciliary] receiver shall be responsible on his official bond for the proper administration of all assets coming into his possession or control. The court may at any time require an additional bond from him or his deputies if deemed desirable for the protection of the assets.
C. Upon taking possession of the assets of a delinquent insurer the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take such steps as are authorized by the laws of this state for the purposes of liquidating, rehabilitating, reorganizing or conserving the affairs of the insurer. In connection with delinquency proceedings he may appoint one or more special deputy superintendents to act for him, and may employ such counsel, clerks and assistants as he deems necessary. The compensation of the special deputies, counsel, clerks or assistants and all expenses of taking possession of the delinquent insurer and of conducting the delinquency proceedings shall be fixed by the receiver, subject to the approval of the court, and shall be paid out of the funds or assets of the insurer. Within the limits of the duties imposed upon them special deputies shall possess all the powers given to, and, in the exercise of those powers, shall be subject to all of the duties imposed upon the receiver with respect to delinquency proceedings.
D. Upon the issuance of an order of liquidation with a finding of insolvency against a domestic insurer, the superintendent shall make application to the court requesting authority to disburse funds to the life insurance guaranty association or the property and casualty insurance guaranty association, as applicable, from time to time out of the insurer's marshalled assets as funds become available in amounts equal to disbursements made by the association for claims handling expense and covered claims obligations on the presentation of evidence that such disbursements have been made by the guaranty association. Such application shall request authority for the superintendent to make disbursements to similar associations or state funds in other states provided the life insurance guaranty association or the property and casualty insurance guaranty association, as applicable, is entitled to like payment under the laws of the association's or state fund's state of domicile in respect to insolvent insurers domiciled in the state.
E. The superintendent in determining the amounts available for disbursements to the life insurance guaranty association or property and casualty insurance guaranty association, as applicable, and similar associations or funds in other states shall reserve sufficient assets for the payment of the expenses of administration. The superintendent shall establish procedures for the ratable allocation of disbursements to the life insurance guaranty association or property and casualty insurance guaranty association and similar associations or funds in other states, and shall secure from the life insurance guaranty association or property and casualty guaranty association and each eligible similar association or fund in other states as a condition to advances in reimbursement of covered claims obligations and claim handling expenses, an agreement to return to the superintendent on demand funds previously advanced as may be required to pay the expenses of administration.
Laws 1984, ch. 127, § 710.
NMSA 1978, § 59A-41-19 Conduct of delinquency proceedings against nondomestic insurers; domiciliary receiver may sue
59A-41-19. Conduct of delinquency proceedings against nondomestic insurers; domiciliary receiver may sue
A. Whenever under the laws of this state an ancillary receiver is to be appointed in delinquency proceedings for an insurer not domiciled in this state, the court shall appoint the superintendent as ancillary receiver. The superintendent shall file a petition requesting the appointment:
(1) if he finds that there are sufficient assets of such insurer located in this state to justify the appointment of an ancillary receiver; or
(2) if ten (10) or more persons resident in this state having claims against such insurer file a petition with the superintendent requesting the appointment of such ancillary receiver.
B. The domiciliary receiver for the purpose of liquidating an insurer domiciled in a reciprocal state, shall be vested by operation of law with the title to all of the property, contracts and rights of action, and all of the books and records of the insurer located in this state, and he shall have the immediate right to recover balances due from the local agents and to obtain possession of any books and records of the insurer found in this state. He shall also be entitled to recover the other assets of the insurer located in this state except that upon the appointment of an ancillary receiver in this state, the ancillary receiver shall during the ancillary receivership proceedings have the sole right to recover such other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this state, and shall pay the necessary expenses of the proceedings. All remaining assets he shall promptly transfer to the domiciliary receiver. Subject to the foregoing provisions the ancillary receiver and his deputies shall have the same powers and be subject to the same duties with respect to the administration of such assets, as a receiver of an insurer domiciled in this state.
C. The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this state to recover any assets of such insurer to which he may be entitled under the laws of this state.
Laws 1984, ch. 127, § 711.
NMSA 1978, § 59A-41-20 Filing, proving claims of nonresidents against delinquent domestic insurers
59A-41-20. Filing, proving claims of nonresidents against delinquent domestic insurers
A. In a delinquency proceeding begun in this state against an insurer domiciled in this state, claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings.
B. Controverted claims belonging to claimants residing in reciprocal states may either:
(1) be proved in this state as provided by law; or
(2) if ancillary proceedings have been commenced in such reciprocal states, may be proved in those proceedings.
In the event a claimant elects to prove his claim in ancillary proceedings, if notice of the claim and opportunity to appear and be heard is afforded the domiciliary receiver of this state as provided in Section 713 [59A-41-21 NMSA 1978] of this article with respect to ancillary proceedings in this state, the final allowance of such claim by the courts in the ancillary state shall be accepted in this state as conclusive as to its amount, and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within the ancillary state.
Laws 1984, ch. 127, § 712.
NMSA 1978, § 59A-41-21 Filing, proving claims of residents against delinquent insurers domiciled in reciprocal states
59A-41-21. Filing, proving claims of residents against delinquent insurers domiciled in reciprocal states
A. In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants against such insurer who reside within this state or an insurance guaranty fund of this state, may file claims either with the ancillary receiver, if any, appointed in this state, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceeding.
B. Controverted claims belonging to claimants residing in this state may either:
(1) be proved in the domiciliary state as provided by the law of that state; or
(2) if ancillary proceedings have been commenced in this state, be proved in those proceedings.
In the event that any such claimant elects to prove his claim in this state, he shall file his claim with the ancillary receiver in the manner provided by the law of this state for the proving of claims against insurers domiciled in this state, and he shall give notice in writing to the receiver in the domiciliary state, either by registered mail or by personal service at least forty (40) days prior to the date set for the hearing. The notice shall contain a concise statement of the amount of the claim, the facts on which the claim is based and the priorities asserted, if any. If the domiciliary receiver, within thirty (30) days after the giving of such notice, shall give notice in writing to the ancillary receiver and to the claimant, either by registered mail or by personal service, of his intention to contest such claim, he shall be entitled to appear or to be represented in any proceeding in this state involving the adjudication of the claim. The final allowance of the claim by the courts of this state shall be accepted as conclusive as to its priority, if any, against special deposits or other security located within this state.
Laws 1984, ch. 127, § 713.
NMSA 1978, § 59A-41-22 Priority of preferred claims, special deposit claims and secured claims
59A-41-22. Priority of preferred claims, special deposit claims and secured claims
A. In a delinquencey [delinquency] proceeding against an insurer domiciled in this state, claims owing to residents of ancillary states shall be preferred claims if like claims are preferred under the laws of that state. All such claims, whether owing to residents or nonresidents, shall be given equal priority of payment from general assets regardless of where such assets are located.
B. In a delinquency proceeding against an insurer domiciled in a reciprocal state, claims owing to residents of this state shall be preferred if like claims are preferred by the laws of that state.
C. The owners of special deposit claims against an insurer for which a receiver is appointed in this or any other state shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of such deposits. If there is a deficiency in any such deposit so that the claims secured thereby are not fully discharged therefrom, the claimants may share in the general assets, but such sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit.
D. The owner of a secured claim against an insurer for which a receiver has been appointed in this or any other state may surrender his security and file his claim as a general creditor, or the claim may be discharged by resort to the security, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. If the amount of the deficiency has been adjudicated in ancillary proceedings as provided in this act, or if it has been adjudicated by a court of competent jurisdiction in proceedings in which the domiciliary receiver has had notice and opportunity to be heard, such amount shall be conclusive; otherwise the amount shall be determined in the delinquency proceeding in the domiciliary state.
E. The claims of policyholders and subrogated claims of a guaranty fund shall be preferred over the claims of unsecured creditors.
Laws 1984, ch. 127, § 714.
NMSA 1978, § 59A-41-23 Attachment, garnishment of assets
59A-41-23. Attachment, garnishment of assets
During pendency of delinquency proceedings in this or any reciprocal state no action or proceeding in the nature of an attachment, garnishment or execution shall be commenced or maintained in the courts of this state against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within four (4) months prior to the commencement of any such delinquency proceeding or at any time thereafter shall be void as against any rights arising in such delinquency proceeding.
Laws 1984, ch. 127, § 715.
NMSA 1978, § 59A-41-24 Hazardous financial condition; determination
59A-41-24. Hazardous financial condition; determination
A. For the purposes of Sections 59A-41-25 and 59A-41-26 NMSA 1978, an insurer may be deemed to be in a hazardous financial condition when the superintendent has determined, after notice and hearing, that the loss experience of the insurer, when reviewed in conjunction with the kinds and characteristics of risks insured, or the insurer's financial condition, or its ownership, or the ratio of its annual premium volume in relation to its policyholders' surplus, would make further assumption of risks by the insurer hazardous to those persons doing business with the insurer or to the general public.
B. The following items may be considered by the superintendent to determine whether the continued operation of an insurer transacting an insurance business in New Mexico is hazardous to the policyholders, the creditors or the general public:
(1) adverse findings reported in financial condition and market conduct examination reports, audit reports and actuarial opinions, reports or summaries;
(2) the national association of insurance commissioners insurance regulatory information system and its other financial analysis solvency tools and reports;
(3) ratios of commission expense, general insurance expense, policy benefits and reserve increases to annual premium and net investment income;
(4) whether, according to currently accepted actuarial standards of practice, the insurer has made adequate provision for the anticipated cash flows required by the insurer's contractual obligations and related expenses, when considered in light of the insurer's assets and investment earnings on assets held for reserves and related actuarial items and the considerations anticipated to be received and retained through the insurer's policies and contracts;
(5) the ability of an assuming reinsurer to perform and whether the insurer's reinsurance program provides sufficient protection for the insurer's remaining surplus after taking into account the insurer's cash flow and the classes of business written as well as the financial condition of the assuming reinsurer;
(6) whether the insurer's operating loss in the last twelve-month period or any shorter period of time, including net capital gain or loss, change in non-admitted assets and cash dividends paid to shareholders is greater than fifty percent of the insurer's remaining surplus as regards policyholders in excess of the minimum required;
(7) whether the insurer's operating loss, excluding net capital gains, in the last twelve months or a shorter period of time is greater than twenty percent of the insurer's remaining surplus as regards policyholders in excess of the minimum required;
(8) whether a reinsurer, an obligor or an entity within the insurer's insurance holding company system is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations and that, in the superintendent's opinion, might affect the solvency of the insurer;
(9) contingent liabilities, pledges or guaranties that individually or collectively involve a total amount that, in the superintendent's opinion, may affect the solvency of the insurer;
(10) whether any person having control of an insurer is delinquent in transmitting or paying net premiums to the insurer;
(11) the age and collectibility of receivables;
(12) whether the management of an insurer, including officers, directors or any other person who directly or indirectly controls the operation of the insurer, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the insurer in such position;
(13) whether management of an insurer has failed to respond to inquiries relative to the condition of the insurer or has furnished false or misleading information concerning an inquiry;
(14) whether the insurer, for a reason not satisfactory to the superintendent, has failed to meet financial and holding company filing requirements;
(15) whether management of an insurer has filed with any regulatory authority or released to lending institutions or to the general public any false or misleading financial statements or has made a false or misleading entry or has omitted an entry of material amount in the books of the insurer;
(16) whether the insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner;
(17) whether the insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems;
(18) whether management of the insurer has established reserves that do not meet the minimum standards established by New Mexico's insurance laws and rules and by statutory accounting standards, sound actuarial principles and standards of practice;
(19) whether management of the insurer persistently engages in material under-reserving that results in adverse development;
(20) whether transactions among affiliates, subsidiaries or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to ensure that the insurer can meet its outstanding obligations as they mature;
(21) risk-based capital reports and other information obtained pursuant to the Risk-Based Capital Act [Chapter 59A, Article 5A NMSA 1978]; or
(22) such other material information and data as the superintendent may deem relevant.
C. For the purposes of making a determination of an insurer's financial condition under this section, the superintendent may:
(1) disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise subject to a delinquency proceeding;
(2) make appropriate adjustments, including disallowance, to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates that are consistent with the national association of insurance commissioners' accounting practices and procedures manual and with state laws and rules;
(3) refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; or
(4) increase the insurer's liability in an amount equal to any contingent liability, pledge or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve-month period.
Laws 1984, ch. 127, § 716; 1993, ch. 320, § 90; 1995, ch. 149, § 15; 2014, ch. 59, § 47.
NMSA 1978, § 59A-41-25 Requirements of insurer in hazardous financial condition
59A-41-25. Requirements of insurer in hazardous financial condition
A. Whenever the superintendent finds an insurer authorized to transact insurance in New Mexico to be in hazardous financial condition, as referred to in Section 59A-41-24 NMSA 1978, the superintendent may order the insurer to take such action as the superintendent deems reasonably necessary to rectify the hazardous condition, including requiring the insurer to:
(1) reduce, suspend or limit the volume of business being accepted or renewed;
(2) submit its reinsurance contracts for approval and make such further requirements as to the insurer's reinsurance arrangements as the superintendent deems necessary;
(3) bulk-reinsure all or any part of its New Mexico business with another insurer authorized to transact such business in New Mexico;
(4) increase the insurer's capital and surplus on such terms, in such amount and in such manner as the superintendent deems necessary;
(5) maintain with the superintendent a special deposit in cash or securities eligible for investment of funds of a like domestic insurer under Chapter 59A, Article 9 NMSA 1978 and in amount not less than the lesser of:
(a) the amounts required to be maintained as: 1) reserves for losses and loss adjustment expenses on New Mexico business; and 2) reserves for unearned premiums on New Mexico business. In determining the amount of deposit required, the reserves for losses, loss adjustment expenses and unearned premiums shall be reduced only for reinsurance ceded to authorized or accredited reinsurers that maintain with an independent custodian cash or marketable securities in amount not less than the sum of the reinsurer's reserves for losses, loss adjustment expenses and unearned premiums as to reinsurance assumed; or
(b) five hundred thousand dollars ($500,000).
Any deposit required by this paragraph shall be for the protection and benefit only of New Mexico policyholders or claimants, or both, and shall not be withdrawn until the superintendent terminates the requirement of the deposit. This paragraph shall not apply as to any domestic insurer, and Subparagraph (b) of this paragraph shall not apply as to any life insurer;
(6) reduce general insurance and commission expenses by specified methods;
(7) suspend or limit the declaration and payment of dividends to its stockholders or to its policyholders;
(8) file reports in a form acceptable to the superintendent concerning the market value of an insurer's assets;
(9) limit or withdraw from certain investments or discontinue certain investment practices to the extent the superintendent deems necessary;
(10) document the adequacy of premium rates in relation to the risks insured;
(11) file, in addition to regular annual statements, interim financial reports on the form adopted by the national association of insurance commissioners or on such format as required by the superintendent;
(12) correct corporate governance practice deficiencies and adopt and use governance practices acceptable to the superintendent;
(13) provide to the superintendent a business plan in order to continue to transact business in the state; or
(14) notwithstanding another provision of law limiting the frequency or amount of premium rate adjustments, adjust rates for a non-life insurance product written by the insurer that the superintendent considers necessary to improve the financial condition of the insurer.
B. The insurer may request a hearing to review the order in accordance with Chapter 59A, Article 4 NMSA 1978; however, the superintendent shall give written notice of the hearing not less than ten days in advance of the hearing, and the hearing shall be held privately unless the insurer requests a public hearing, in which case the hearing shall be public.
Laws 1984, ch. 127, § 717; 1993, ch. 320, § 91; 2014, ch. 59, § 48.
NMSA 1978, § 59A-41-26 Hazardous financial condition; failure of insurer to comply with requirements
59A-41-26. Hazardous financial condition; failure of insurer to comply with requirements
If an insurer found by the superintendent to be in hazardous financial condition and subjected to certain requirements by the superintendent pursuant to Section 717 [59A-41-25 NMSA 1978] of this article fails to comply with any such requirement, the superintendent may suspend, revoke, or refuse to continue the insurer's certificate of authority, and take such further lawful action as he may deem advisable, including, but not limited to, commencement of delinquency proceedings against the insurer.
Laws 1984, ch. 127, § 718.
NMSA 1978, § 59A-41-27 Deposit of foreign insurer during examination; impoundment of assets
59A-41-27. Deposit of foreign insurer during examination; impoundment of assets
A. This section shall apply as to any foreign insurer authorized to transact insurance in this state, which as shown by its most recent annual statement filed with the superintendent has thirty-five percent or more of its insurance in force issued on New Mexico risks or that thirty-five percent or more of its required reserves are applicable to New Mexico risks.
B. If during an examination of the insurer by the superintendent or by any other state the superintendent cannot pending completion of the examination determine with certainty that the insurer is financially sound, and in the superintendent's opinion additional protection for New Mexico policyholders should be required, the superintendent may require the insurer to deposit with the state treasurer assets of kinds eligible for investment of funds of a like domestic insurer and in amount equal to the total required reserves of the insurer applicable to its New Mexico risks.
C. If the insurer fails to make the deposit within thirty (30) days after such demand to do so, the superintendent may record in the office of the county clerk of any county in this state in which assets of the insurer may be located a notice to the effect that all assets of the insurer located in such county are impounded by the superintendent, and thereafter all transactions involving such assets, including release of mortgages and transfers of title to real estate, shall be invalid unless approved and consented to in writing on the face of the instrument by the superintendent. The superintendent may thereafter, as a condition precedent to approval of a transaction, require the entire proceeds of the transaction to be deposited with the state treasurer for the further protection of the insurer's policyholders in this state.
Laws 1984, ch. 127, § 719.
NMSA 1978, § 59A-41-28 Grounds for rehabilitation, liquidation of domestic insurer
59A-41-28. Grounds for rehabilitation, liquidation of domestic insurer
The superintendent may apply under Chapter 59A, Article 41 NMSA 1978 for an order directing him to rehabilitate or liquidate a domestic insurer or the United States branch of an alien insurer having trusteed assets in this state upon any one or more of the following grounds, that the insurer:
A. is insolvent as determined from an examination of the insurer conducted by the superintendent;
B. has refused to submit its books, papers, accounts or affairs to the reasonable inspection of the superintendent or his deputy or examiner;
C. has failed or refused to comply, within the time designated by the superintendent, with an order of the superintendent, pursuant to law, to make good an impairment of its capital, if a stock insurer, or an impairment of its minimum surplus, if a mutual, reciprocal or Lloyds insurer;
D. has, by contract of reinsurance or otherwise, transferred or attempted to transfer substantially its entire property or business or entered into any transaction the effect of which is to merge substantially its entire property or business in the property or business of any other person, without having first obtained the written approval of the superintendent;
E. is found, after an examination, to be in such condition that its further transaction of business will be hazardous to its policyholders, or to its creditors, or to the public;
F. has willfully violated its charter or any law of the state;
G. has an officer who has refused to be examined under oath, concerning its affairs;
H. after examination, is found to no longer meet the requirements for organization and incorporation to do business under the laws of this state;
I. has ceased to do business for a period of two years;
J. has commenced voluntary liquidation or dissolution, or attempts to commence or prosecute any action or proceeding to liquidate its business or affairs, or to dissolve its corporate charter, or to procure the appointment of a receiver, trustee, custodian or sequestrator under any law except Chapter 59A, Article 41 NMSA 1978;
K. has been the subject of an application for the appointment of a receiver, trustee, custodian or sequestrator of the insurer or its property, or if a receiver, trustee, custodian or sequestrator is appointed by a federal court or if such appointment is imminent;
L. has consented to such an order through a majority of its directors, stockholders or members;
M. has not organized or completed its organization and obtained a certificate authorizing it to commence the doing of an insurance business within one year from the date of its incorporation or within such further period as may have been allowed under Section 59A-34-7 NMSA 1978;
N. has failed or refused to take such steps as may be necessary to remove from office any officer or director whom the superintendent has found, after notice to and hearing of such insurer and of such officer or director, to be a dishonest or untrustworthy person; or
O. has failed to maintain adequate risk-based capital levels as determined by the superintendent pursuant to the Risk-Based Capital Act [Chapter 59A, Article 5A NMSA 1978].
Laws 1984, ch. 127, § 720; 1995, ch. 149, § 16.
NMSA 1978, § 59A-41-29 Order of rehabilitation; termination
59A-41-29. Order of rehabilitation; termination
A. An order to rehabilitate a domestic insurer shall direct the superintendent and his successors in office forthwith to take possession of the property of such insurer and to conduct the business thereof, and to take such steps toward the removal of the causes and conditions which have made such proceeding necessary as the court shall direct.
B. If at any time the superintendent shall deem that further efforts to rehabilitate the insurer would be futile, he may apply to the court for an order of liquidation.
C. The superintendent or any interested person upon due notice to the superintendent, at any time may apply for an order terminating any rehabilitation proceeding and permitting such insurer to resume possession of its property and the conduct of its business, but no such order shall be granted except when, after a full hearing, the court shall determine that the purposes of the proceeding have been fully accomplished.
D. The superintendent may apply for an order directing him to liquidate the business of a domestic insurer or the United States branch of an alien insurer having trusteed assets in this state, upon any one or more of the grounds specified in Section 720 [59A-41-28 NMSA 1978] of this article regardless of whether or not there has been a prior order directing him to rehabilitate such insurer.
Laws 1984, ch. 127, § 721.
NMSA 1978, § 59A-41-30 Order of liquidation of domestic insurer; rights, liabilities
59A-41-30. Order of liquidation of domestic insurer; rights, liabilities
A. An order to liquidate the business of a domestic insurer shall direct the superintendent and his successors in office forthwith to take possession of the property of such insurer and to liquidate the business of the same and to deal with the property and business of such insurer in their own names as superintendents or in the name of the insurer as the court before whom such order is returnable may direct, and to give notice to all creditors who may have claims against such insurers to present the same.
B. The superintendent and his successors shall be vested by operations of law with the title to all of the property, contracts and rights of action of such insurer as of the date of the entry of the order so directing them to liquidate. The filing or recording of such order in the office of the clerk of any county shall impart the same notice that a deed, bill of sale or other evidence of title duly filed or recorded by such insurer would have imparted. The rights and liabilities of any such insurer and of its creditors, policyholders, stockholders, members and all other persons interested in its estate shall, unless otherwise directed by the court, be fixed as of the date of the entry of the order directing the liquidation of such insurer in the office of the clerk of the county where such insurer had its principal office for the transaction of business upon the date of the institution of proceedings under this article.
C. An order to liquidate the business of the United Sates [States] branch of an alien insurer having trusteed assets in this state shall be in the same terms as those hereinbefore prescribed, except that only the assets of the business of such United States branch shall be included therein.
D. Where the trustee or trustees of a mortgage series consisting in whole or in part of certified mortgage investments guaranteed by such domestic insurer have distributed all of the trust estate collateral, or have been permitted by court order to abandon all or part of such collateral not distributed, the court, by order, may, upon the consent of the superintendent as liquidator of such domestic insurer, direct that the superintendent, upon being furnished with a list of certificate holders certified to by the trustee or trustees, record subsequent transfers of certificates and charge and collect a reasonable fee therefor, and distribute dividends applicable thereto upon liquidation of insurer assets in his hands, to the record owners of such certificates, and make and deduct from such dividend payments a reasonable charge for such services.
The duty of the superintendent under such order shall terminate upon the termination of the liquidation proceedings of such domestic insurer.
Laws 1984, ch. 127, § 722.
NMSA 1978, § 59A-41-31 Grounds for conservation of assets of foreign insurer
59A-41-31. Grounds for conservation of assets of foreign insurer
The superintendent may apply under Chapter 59A, Article 41 NMSA 1978 for an order directing him to conserve the assets within the state of a foreign insurer upon any one or more of the grounds specified in Subsection A, B, C, D, E, F, G, J, K or O of Section 59A-41-28 NMSA 1978 or upon the ground that such foreign insurer has consented to such an order through a majority of its directors, stockholders or members, or has had its property sequestrated in its domiciliary country or state or in any other country or state. The superintendent may apply under Chapter 59A, Article 41 NMSA 1978 for an order directing him to conserve the assets within this state of an alien insurer, other than one which has its trusteed assets in this state, on any one or more of the grounds specified in Subsections A, B, C, D, E, F, G, J, K or O of Section 59A-41-28 NMSA 1978 or upon the ground that such alien insurer has failed or refused to comply, within the time designated by the superintendent, with an order of the superintendent, pursuant to law, to make good an impairment of its trusteed surplus, or that such alien insurer has consented to such an order through a majority of its directors, stockholders or members, or that it has had its property sequestrated in its domiciliary country or elsewhere.
Laws 1984, ch. 127, § 723; 1995, ch. 149, § 17.
NMSA 1978, § 59A-41-32 Order of conservation or ancillary liquidation of foreign or alien insurer
59A-41-32. Order of conservation or ancillary liquidation of foreign or alien insurer
An order to conserve the assets of a foreign or alien insurer shall direct the superintendent and his successors in office forthwith to take possession of the property of the insurer within this state and to conserve the same subject to further direction of the court. Whenever a domiciliary receiver is appointed for the insurer in its domiciliary state which is also a reciprocal state as defined in Section 706 [59A-41-14 NMSA 1978] of this article, the court may on the superintendent's application appoint the superintendent an ancillary receiver in this state, subject to the provisions of Section 711 [59A-41-19 NMSA 1978] of this article and other provisions of the Uniform Insurers Liquidation Act [59A-41-17 through 59A-41-23 NMSA] included within this article. Subject to the provisions of the Uniform Insurers Liquidation Act the rights and duties of the superintendent as to the insurer and its assets shall include those exercised by and imposed upon ancillary receivers of foreign corporations under the general corporation laws of this state.
Laws 1984, ch. 127, § 724.
NMSA 1978, § 59A-41-33 Grounds for dissolution of domestic insurer
59A-41-33. Grounds for dissolution of domestic insurer
The superintendent may apply under this article for an order dissolving the corporate existence of a domestic insurer:
A. upon his application for an order for liquidation, or at any time after such order has been granted; or
B. upon the grounds specified in Section 720 [59A-41-28 NMSA 1978] of this article whether or not an order of liquidation is sought or has been obtained.
Laws 1984, ch. 127, § 725.
NMSA 1978, § 59A-41-34 Commencement of a delinquency proceeding
59A-41-34. Commencement of a delinquency proceeding
A. The superintendent, the attorney general or an insurance department staff attorney representing him, shall commence any proceeding under this article by an application to the district court in the judicial district in which the principal office of the insurer or organization involved is located, for an order directing the superintendent to proceed with delinquency proceedings provided for in this article. Such order with a copy of the petition therein shall be served upon the insurer or organization named in such order, if it be a domestic corporation by delivering to the president or other head of the corporation, secretary or clerk to the corporation, the cashier, the treasurer or any director or managing agent; if it be a foreign or alien corporation by delivering to the president, vice president, treasurer or assistant treasurer, secretary or assistant secretary, or any director of or managing agent, or, if the corporation lacks any of those officers within the state, to the officer performing corresponding functions under another name; if it be a voluntary, unincorporated or a joint stock association, order or society, by delivering to the president, vice president, treasurer, director, trustee or other officer or a member with managerial powers; if it be a reciprocal insurer or Lloyds underwriters, by delivering to the duly designated attorney-in-fact, a true copy of said order and petition and leaving the same with any such person within the state.
B. When it is satisfactorily proved by the verified report of the examiner made to the superintendent or by affidavit of any other person familiar with the facts that the officers, directors, trustees or managing agents or members of the corporation, association, order or society named in such order, upon whom service is required to be made as provided, or if a reciprocal insurer or Lloyds underwriters be named in the order, that the duly designated attorney-in-fact or its officers and managing agents have departed from the state or have kept themselves concealed therein or if such of the persons residing in this state and upon whom service is required to be made as above provided have resigned from their offices within forty (40) days prior to the application for an order under the provisions of this article, or that service cannot be made immediately by the exercise of reasonable diligence, such an order may provide for service thereof in such manner as the court or justice by whom the same is made, shall direct.
C. Failure of any such insurer to appear or plead before the court within five (5) days after proper service of the order and petition shall be deemed a waiver to the right to have a hearing upon the allegation contained in the petition.
Laws 1984, ch. 127, § 726.
NMSA 1978, § 59A-41-35 Change of venue
59A-41-35. Change of venue
At any time after commencement of a proceeding under this article the superintendent may apply to the court for an order changing the venue of the proceedings to any other county of this state when good cause is shown. Upon the filing of such an application for removal, the court shall direct the clerk of the county wherein such proceeding is then pending to transmit all of the papers filed therein with such clerk to the clerk of the county to which such proceeding is removed and the proceeding shall thereafter be conducted in such other county as though it has been commenced in such county.
Laws 1984, ch. 127, § 727.
NMSA 1978, § 59A-41-36 Right of guaranty association to participate in delinquency proceeding
59A-41-36. Right of guaranty association to participate in delinquency proceeding
A. A guaranty association referred to in Article 42 [Chapter 59A, Article 42 NMSA 1978] (life and health insurance guaranty fund) or in Article 43 [Chapter 59A, Article 43 NMSA 1978] (property and casualty insurance guaranty fund) of the Insurance Code may be made a party to a delinquency proceeding by the superintendent in commencing the proceeding or by its intervention thereafter. If the superintendent does not make the association a party at the commencement of the proceedings, the superintendent shall give written notice of the commencement of the proceedings to the association.
B. A guaranty association shall not be required to bear any of the costs of such a proceeding other than such expenses for its attorney and expense related to its participation in the proceeding as are directly incurred by it.
C. The association shall have the right at any time during the delinquency proceedings to apply to the court for an appropriate order dismissing it as a party to the proceeding on such terms as the court finds proper.
Laws 1984, ch. 127, § 728.
NMSA 1978, § 59A-41-37 Exemption from filing fees
59A-41-37. Exemption from filing fees
The superintendent shall not be required to pay any fee to any public officer in this state for filing, recording, issuing a transcript or certificate or authenticating any paper or instrument pertaining to the exercise by the superintendent of any of the powers or duties conferred upon him under this article, whether or not such paper or instrument be executed by the superintendent or his deputies, employees or attorneys of record and whether or not it is connected with the commencement of an action or proceeding by or against the superintendent, or with the subsequent conduct of such an action or proceeding.
Laws 1984, ch. 127, § 729.
NMSA 1978, § 59A-41-38 Deposit of monies collected
59A-41-38. Deposit of monies collected
The superintendent shall from time to time deposit in one or more state or national banks, savings banks or trust companies the monies collected by him in a proceeding under this article. The superintendent may deposit such monies or any part thereof in a national bank or trust company as a trust fund.
Laws 1984, ch. 127, § 730.
NMSA 1978, § 59A-41-39 Borrowing on pledge of assets
59A-41-39. Borrowing on pledge of assets
For the purpose of facilitating the rehabilitation, liquidation, conservation or dissolution of an insurer pursuant to this article, the superintendent may, subject to the approval of the court, borrow money and execute, acknowledge and deliver notes or other evidences of indebtedness therefor and secure the repayment of the same by the mortgage, pledge, assignment, transfer in trust or hypothecation of any or all of the property whether real, personal or mixed of such insurer, and the superintendent, subject to the approval of the court, may take any and all other action necessary and proper to consummate any such loans and to provide for the repayment thereof. The superintendent shall be under no obligation personally or in his official capacity as superintendent to repay any loan made pursuant to this section.
Laws 1984, ch. 127, § 731.
NMSA 1978, § 59A-41-40 Sale, disposition of assets and compromise of certain claims
59A-41-40. Sale, disposition of assets and compromise of certain claims
A. The superintendent may, subject to the approval of the court:
(1) sue or be sued;
(2) sell or otherwise dispose of the real or personal property, or any part thereof, of an insurer against whom a proceeding has been brought under this article; and
(3) sell or compound all doubtful or uncollectible debts or claims owed by or owing to such insurer including claims based upon assessment levied against a member of a mutual or reciprocal insurer.
B. Whenever the amount of any such debt or claim owed by or owing to such insurer does not exceed two hundred dollars ($200), the superintendent may compromise or compound the same upon such terms as he may deem for the best interests of the insurer without obtaining the approval of the court. The superintendent may, subject to the approval of the court, sell or agree to sell, or offer to sell, any assets of such an insurer to such of its creditors who may desire to participate in the purchase thereof, to be paid for, in all or in part, out of dividends payable to such creditors, and, upon the application of the superintendent, the court may designate representatives to act for such creditors in the purchase, holding and/or management of such assets, and the superintendent may, subject to the approval of the court, advance the expenses of such representatives against the security of the claims of such creditors.
Laws 1984, ch. 127, § 732.
NMSA 1978, § 59A-41-41 Time to file claims
59A-41-41. Time to file claims
A. If upon entry of an order of liquidation of a domestic insurer or United States branch of an alien insurer domiciled in this state under Chapter 59A, Article 41 NMSA 1978 or at any time thereafter during liquidation proceedings the insurer is not clearly solvent, the court shall, upon a hearing after such notice as it deems proper, make and enter an order adjudging the insurer to be insolvent.
B. After entry of order of insolvency and regardless of any prior notice given to creditors, the superintendent shall notify all persons who may have claims against the insurer to file such claims, at a place and within the time specified in the notice, or that such claims may be forever barred. The time specified in the notice shall be fixed by the court for filing of claims, which shall be not less than six months after entry of the order of insolvency. The notice shall be given in such manner and for such reasonable period of time as the court may order.
C. The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he were not late, to the extent that any such payment will not prejudice the orderly administration of the liquidation, under the following circumstances:
(1) the existence of the claim was not known to the claimant and the claim was filed as promptly thereafter as reasonably possible after learning of it;
(2) a transfer to a creditor was avoided under Sections 59A-41-42 through 59A-41-43.1 NMSA 1978, or was voluntarily surrendered under Section 59A-41-43.3 NMSA 1978 and the filing satisfies the conditions of Section 59A-41-43.3 NMSA 1978;
(3) the valuation of security held by a secured creditor shows a deficiency, which is filed within thirty days after the valuation and deficiency is determined by the court in accordance with the provisions of Subsection D of Section 59A-41-22 NMSA 1978; or
(4) the claim is from a guaranty association for reimbursement of covered claims paid or expenses incurred subsequent to the last day for filing where such payments were made and expenses incurred as provided by law.
Laws 1984, ch. 127, § 733; 1993, ch. 320, § 92.
NMSA 1978, § 59A-41-42 Fraudulent transfers prior to petition
59A-41-42. Fraudulent transfers prior to petition
A. Every transfer made or suffered and every obligation incurred by an insurer within one (1) year prior to the filing of a successful petition for rehabilitation or liquidation under the Insurance Code is fraudulent as to then existing and future creditors if made or incurred without fair consideration, or with actual intent to hinder, delay, or defraud either existing or future creditors. A transfer made or an obligation incurred by an insurer ordered to be rehabilitated or liquidated under the Insurance Code, which is fraudulent under this section, may be avoided by the receiver, except as to a person who in good faith is a purchaser, lienor, or obligee for a present fair equivalent value, and except that any purchaser, lienor, or obligee, who in good faith has given a consideration less than fair for such transfer, lien, or obligation, may retain the property, lien or obligation as security for repayment. The court may, on due notice, order any such transfer or obligation to be preserved for the benefit of the estate, and in that event, the receiver shall succeed to and may enforce the rights of the purchaser, lienor, or obligee.
B. (1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.
(2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.
(3) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.
(4) Any transfer not perfected prior to the filing of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.
(5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained any liens or persons who might have become bona fide purchasers.
C. Any transaction of the insurer with a reinsurer shall be deemed fraudulent and may be avoided by the receiver under Subsection A if:
(1) the transaction consists of the termination, adjustment, or settlement of a reinsurance contract in which the reinsurer is released from any part of its duty to pay the originally specified share of losses that had occurred prior to the time of the transaction, unless the reinsurer gives a present fair equivalent value for the release; and
(2) any part of the transaction took place within one year prior to the date of filing of the petition through which the receivership was commenced.
Laws 1984, ch. 127, § 734.
NMSA 1978, § 59A-41-43 Fraudulent transfer after petition
59A-41-43. Fraudulent transfer after petition
A. After a petition for rehabilitation or liquidation has been filed a transfer of any of the real property of the insurer made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred. The commencement of a proceeding in rehabilitation or liquidation shall be constructive notice upon the recording of a copy of the petition for or order of rehabilitation or liquidation with the recorder of deeds in the county where any real property in question is located. The exercise by a court of the United States or any state or jurisdiction to authorize or effect a judicial sale of real property of the insurer within any county in any state shall not be impaired by the pendency of such a proceeding unless the copy is recorded in the county prior to the consummation of the judicial sale.
B. After a petition for rehabilitation or liquidation has been filed and before either the receiver takes possession of the property of the insurer or an order of rehabilitation or liquidation is granted:
(1) a transfer of any of the property of the insurer, other than real property, made to a person acting in good faith shall be valid against the receiver if made for a present fair equivalent value, or, if not made for a present fair equivalent value, then to the extent of the present consideration actually paid therefor, for which amount the transferee shall have a lien on the property so transferred;
(2) a person indebted to the insurer or holding property of the insurer may, if acting in good faith, pay the indebtedness or deliver the property, or any part thereof, to the insurer or upon his order, with the same effect as if the petition were not pending;
(3) a person having actual knowledge of the pending rehabilitation or liquidation shall be deemed not to act in good faith; and
(4) a person asserting the validity of a transfer under this section shall have the burden of proof. Except as elsewhere provided in this section, no transfer by or on behalf of the insurer after the date of the petition for liquidation by any person other than the liquidator shall be valid against the liquidator.
C. Nothing in Chapter 59A, Article 41 NMSA 1978 shall impair the negotiability of currency or negotiable instruments.
D. Nothing in this section shall be constructed to give authority to any person to act on behalf of a receiver.
Laws 1984, ch. 127, § 735; 1993, ch. 320, § 93.
NMSA 1978, § 59A-41-43.1 Voidable preferences and liens
59A-41-43.1. Voidable preferences and liens
A. (1) A preference is a transfer of any of the property of an insurer to or for the benefit of a creditor, for or on account of an antecedent debt, made or suffered by the insurer within one year before the filing of a successful petition for rehabilitation or liquidation under Chapter 59A, Article 41 NMSA 1978, the effect of which transfer may be to enable the creditor to obtain a greater percentage of this debt than another creditor of the same class would receive. If a liquidation order is entered while the insurer is already subject to a rehabilitation order, then such transfers shall be deemed preferences if made or suffered within one year before the filing of the petition for rehabilitation, or within two years before the filing of the petition for liquidation, whichever time is shorter.
(2) Any preference may be avoided by the rehabilitator or liquidator if:
(a) the insurer was insolvent at the time of the transfer;
(b) the transfer was made within four months before the filing of the petition;
(c) the creditor receiving it or to be benefited thereby or his agent acting with reference thereto had, at the time when the transfer was made, reasonable cause to believe that the insurer was insolvent or was about to become insolvent; or
(d) the creditor receiving it was an officer, or any employee or attorney or other person who was in fact in a position of comparable influence in the insurer to an officer, whether or not he held such position, or any shareholder holding directly or indirectly more than five percent of any class of any equity security issued by the insurer, or any other person, firm, corporation, association or aggregation of persons with whom the insurer did not deal at arm's length.
(3) Where the preference is voidable, the rehabilitator or liquidator may recover the property or, if it has been converted, its value from any person who has received or converted the property; except where a bona fide purchaser or lienor has given less than fair equivalent value, he shall have a lien upon the property to the extent of the consideration actually given by him. Where a preference by way of lien or security title is voidable, the court may on due notice order the lien or title to be preserved for the benefit of the estate, in which event the lien or title shall pass to the liquidator.
B. (1) A transfer of property other than real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent lien obtainable by legal or equitable proceedings on a simple contract could become superior to the rights of the transferee.
(2) A transfer of real property shall be deemed to be made or suffered when it becomes so far perfected that no subsequent bona fide purchaser from the insurer could obtain rights superior to the rights of the transferee.
(3) A transfer which creates an equitable lien shall not be deemed to be perfected if there are available means by which a legal lien could be created.
(4) A transfer not perfected prior to the filling of a petition for liquidation shall be deemed to be made immediately before the filing of the successful petition.
(5) The provisions of this subsection apply whether or not there are or were creditors who might have obtained liens or persons who might have become bona fide purchasers.
C. (1) A lien obtainable by legal or equitable proceedings upon a simple contract is going one [sic] arising in the ordinary course of such proceedings upon the entry or docketing of a judgment or decree, or upon attachment, garnishment, execution, or like process, whether before, upon, or after judgment or decree and whether before or upon levy. It does not include liens which under applicable law are given a special priority over other liens which are prior in time.
(2) A lien obtainable by legal or equitable proceedings could become superior to the rights of a transferee, or a purchaser could obtain rights superior to the rights of transferee within the meaning of Subsection B of this section, if such consequences would follow only from the lien or purchase itself, or from the lien or purchase followed by any step wholly within the control of the respective lienholder or purchaser, with or without the aid of ministerial action by public officials. Such a lien could not, however, become superior and such a purchase could not create superior rights for the purpose of Subsection B of this section through any acts subsequent to the obtaining of such a lien or subsequent to such a purchase which require the agreement or concurrence of any third party or which require any further judicial action or ruling.
D. A transfer of property for or on account of a new and contemporaneous consideration which is deemed under Subsection B of this section to be made or suffered after the transfer because of delay in perfecting it does not thereby become a transfer for or on account of an antecedent debt if any acts required by the applicable law to be performed in order to perfect the transfer as against liens or bona fide purchasers' rights are performed within twenty-one days or any period expressly allowed by law, whichever is less. A transfer to secure a future loan, if such a loan is actually made, or a transfer which becomes security for a future loan, shall have the same effect as a transfer for [sic] on account of a new and contemporaneous consideration.
E. If any lien deemed voidable under Paragraph (2) of Subsection A of this section has been dissolved by the furnishing of a bond or other obligation, the surety on which has been indemnified directly or indirectly by the transfer of or the creation of a lien upon any property of an insurer before the filing of a petition under Chapter 59A, Article 41 NMSA 1978 which results in a liquidation order, the indemnifying transfer or lien shall also be deemed voidable.
F. The property affected by any lien deemed voidable under Subsections A and E of this section shall be discharged from such lien, and that property and any of the indemnifying property transferred to or for the benefit of a surety shall pass to the liquidator, except that the court may on due notice order any such lien to be preserved for the benefit of the estate and the court may direct that such conveyance be executed as may be proper or adequate to evidence the title of the liquidator.
G. The court before which the rehabilitation or liquidation proceeding is pending shall have summary jurisdiction of any proceeding by the liquidator to hear and determine the rights of any parties under this section. Reasonable notice of any hearing in the proceeding shall be given to all parties in interest, including the obligee of a releasing bond or other like obligation. Where an order is entered for the recovery of indemnifying property in kind or for the avoidance of an indemnifying lien, the court, upon application of any party in interest, shall in the same proceeding ascertain the value of the property or lien, and if the value is less than the amount for which the property is indemnity or less than the amount of the lien, the transferee or lienholder may elect to retain the property or lien upon payment of its value, as ascertained by the court, to the rehabilitator or liquidator, within such reasonable times as the court shall fix.
H. The liability of the surety under a releasing bond or other like obligation shall be discharged to the extent of the value of the indemnifying property recovered or the indemnifying lien nullified and avoided by the rehabilitator or liquidator, or where the property is retained under Subsection G of this section to the extent of the amount paid to the rehabilitator or liquidator.
I. If a creditor has been preferred, and afterward in good faith gives the insurer further credit without security of any kind, for property which becomes a part of the insurer's estate, the amount of the new credit remaining unpaid at the time of the petition may be set off against the preference which would otherwise be recoverable from him.
J. If an insurer shall, directly or indirectly, within four months before the filing of a successful petition for rehabilitation or liquidation under Chapter 59A, Article 41 NMSA 1978, or at any time in contemplation of a delinquency proceeding, pay money or transfer property to an attorney-at-law for services rendered or to be rendered, the transactions may be examined by the court on its own motion or shall be examined by the court on petition of the rehabilitator or liquidator and shall be held valid only to the extent of a reasonable amount to be determined by the court, and the excess may be recovered by the rehabilitator or liquidator for the benefits of the estate; provided that where the attorney is in a position of influence in the insurer or an affiliate thereof payment of any money or the transfer of any property to the attorney-at-law for services rendered or to be rendered shall be governed by the provisions of Subparagraph (d) of Paragraph (2) of Subsection A.
1978 Comp., § 59A-41-43.1, enacted by Laws 1993, ch. 320, § 94.
NMSA 1978, § 59A-41-43.2 Liability for participation in fraudulent transfer or voidable preference
59A-41-43.2. Liability for participation in fraudulent transfer or voidable preference
A. Every officer, manager, employee, shareholder, member, subscriber, attorney or any other person acting on behalf of the insurer who knowingly participates in giving any preference or in any fraudulent transfer when he has reasonable cause to believe the insurer is or is about to become insolvent at the time of the preference or transfer shall be personally liable to the rehabilitator or liquidator for the amount of the preference or transfer. It shall be a rebuttable presumption that such was the case if the transfer was made within four months before the date of filing of a successful petition for rehabilitation or liquidation.
B. Every person receiving any property from the insurer or the benefit thereof as a voidable preference or as a fraudulent transfer shall be personally liable therefor and shall be bound to account to the rehabilitator or liquidator.
C. Nothing in this section shall prejudice any other claim by the rehabilitator or liquidator against any person.
1978 Comp., § 59A-41-43.2, enacted by Laws 1993, ch. 320, § 95.
NMSA 1978, § 59A-41-43.3 Claims of holders of void or voidable rights
59A-41-43.3. Claims of holders of void or voidable rights
A. No claims of a creditor who has received or acquired a preference, lien, conveyance, transfer, assignment or encumbrance voidable under Chapter 59A, Article 41 NMSA 1978 shall be allowed unless he surrenders the preference, lien, conveyance, transfer, assignment or encumbrance. If the avoidance is effected by a proceeding in which a final judgment has been entered, the claim shall not be allowed unless the money is paid or the property is delivered to the rehabilitator or liquidator within thirty days from the date of the entering of the final judgment, except that the court having jurisdiction over the rehabilitation or liquidation may allow further time if there is an appeal or other continuation of the proceeding.
B. A claim allowable under Subsection A of this section by reason of the avoidance, whether voluntary or involuntary, or a preference, lien, conveyance, transfer, assignment or encumbrance may be filed as an excused late filing under Section 59A-41-41 NMSA 1978 if filed within thirty days from the date of the avoidance, or within the further time allowed by the court under Subsection A of this section.
1978 Comp., § 59A-41-43.3, enacted by Laws 1993, ch. 320, § 96.
NMSA 1978, § 59A-41-44 Priorities in distribution
59A-41-44. Priorities in distribution
The priority of claims and order of distribution of the insurer's assets on liquidation shall be as stated in this section. The first fifty dollars ($50.00) of the amount allowed on each property, casualty or fidelity claim in the classes under Subsections B through F of this section, shall be deducted from the claim and included in the class under Subsection I of this section. Claims may not be cumulated by assignment to avoid application of the fifty dollar ($50.00) deductible provision. Subject to the fifty dollar ($50.00) deduction, every claim in each class shall be paid in full or adequate funds retained for payment before the members of the next class receive any payment. No subclasses shall be established within any class. Subject to the foregoing, the order of distribution and of priority shall be as follows:
A. administration costs. The costs and expenses of administration, including but not limited to the actual and necessary costs of preserving or recovering the assets of the insurer, compensation for all services rendered in the liquidation, necessary filing fees, fees and mileage payable to witnesses, attorney's fees in reasonable amount and the reasonable expenses of a guaranty association for unallocated loss adjustment expense;
B. wages. Debts due to employees of the insurer for services performed, not to exceed one thousand dollars ($1,000) to each employee, and earned within three months before commencement of delinquency proceedings. The insurer's officers shall not be entitled to the benefit of this priority. Such priority shall be in lieu of any other similar priority authorized by law as to wages or compensation of employees;
C. loss claims. All claims under policies or contracts for losses incurred, including third party claims and all claims of guaranty associations not specified in Subsection A of this section. That portion of any loss for which indemnification is provided by other benefits or advantages recovered or recoverable by the claimant shall not be included in this class, other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment made by an employer to his employee shall be treated as a gratuity;
D. unearned premiums. Claims under nonassessable policies for unearned premiums or other premium refunds;
E. residual classification. All other claims, including claims of the federal or any state or local government, not falling within other classes under this section. Claims, including those of any governmental body, for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of such claims shall be postponed to the class of claims under Subsection K of this section;
F. judgments. Claims based solely on judgments. If a claimant files a claim and bases it both on the judgment and on the underlying facts, the claim shall be considered by the liquidator, who shall give the judgment such weight as he deems appropriate. The claim as allowed shall receive the priority it would receive in absence of the judgment. If the judgment is larger than the allowance on the underlying claim, the remaining portion of the judgment shall be treated as if it were a claim based solely on a judgment, except that, to the extent such judgment was obtained through fraud or collusion, it shall be disallowed;
G. interest on claims already paid. Interest at the legal rate compounded annually on all claims in the classes under Subsections A through I of this section, from date of petition for liquidation or the date on which the claim becomes due, whichever is later, until the date on which the dividend is declared. The liquidator, with the court's approval, may make reasonable classifications of claims for purposes of computing interest, may make approximate computations and may ignore certain classifications and time periods as de minimis;
H. miscellaneous subordinated claims. The remaining claims or portions of claims not already paid, with interest as in Subsection G of this section:
(1) the first fifty dollars ($50.00) of each claim in the classes under Subsections B through F of this section, subordinated under this section;
(2) claims subordinated by Section 59A-41-45 NMSA 1978;
(3) claims filed late except as provided otherwise in Subsection C of Section 59A-41-41 NMSA 1978;
(4) portions of claims subordinated under Subsection E of this section;
(5) claims or portions of claims payment of which is provided by other benefits or advantages recovered or recoverable by the claimant; and
(6) claims not otherwise provided for in this section;
I. preferred ownership claims. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Interest at the legal rate shall be added to each claim, as in Subsections G and H of this section; and
J. proprietary claims. The claims of shareholders or other owners.
Laws 1984, ch. 127, § 736; 1993, ch. 320, § 97.
NMSA 1978, § 59A-41-45 Offsets
59A-41-45. Offsets
A. In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this article, such credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in Subsection B of this section.
B. No offset shall be allowed in favor of any such person where:
(1) the obligation of the insurer to such person would not at the date of entry of any liquidation order, or otherwise, as provided in Section 722 [59A-41-30 NMSA 1978] of this article entitle him to share as a claimant in the assets of the insurer; or
(2) the obligation of the insurer to such person was purchased by or transferred to such person with a view to its being used as an offset;
(3) the obligation of such person is to pay an assessment levied against the members of a mutual insurer, or against the subscribers of a reciprocal insurer, or is to pay a balance upon a subscription to the capital stock of a stock insurer; or
(4) the obligation of the person is to pay premiums, whether earned or unearned, to the insurer.
Laws 1984, ch. 127, § 737.
NMSA 1978, § 59A-41-45.1 Recovery from affiliates
59A-41-45.1. Recovery from affiliates
The receiver shall have a right to recover from an affiliate of the insurer property of the insurer transferred to or for the benefit of the affiliate within the five years preceding the initial petition for receivership. No transfer is recoverable under this section if the affiliate shows that, when the transfer was made:
A. the insurer was solvent;
B. the transfer was lawful; and
C. neither the insurer nor the affiliate knew or should have known that the transfer, under then-applicable statutory accounting standards, would:
(1) place the insurer in violation of applicable capital or surplus requirements;
(2) place the insurer below the risk-based capital level as defined in the Risk-Based Capital Act [Chapter 59A, Article 5A NMSA 1978];
(3) cause the insurer's filed financial statements not to present fairly the capital and surplus of the insurer; or
(4) otherwise cause the insurer to be in a hazardous financial condition.
Laws 2012, ch. 9, § 3.
NMSA 1978, § 59A-41-46 Report for assessment; domestic mutual, reciprocal insurers
59A-41-46. Report for assessment; domestic mutual, reciprocal insurers
Within three (3) years from the date an order of rehabilitation or liquidation of a domestic mutual insurer or domestic reciprocal insurer was filed in the office of the clerk of the court by which such order was made, the superintendent may make a report to the court setting forth:
A. the reasonable value of the assets of the insurer;
B. the insurer's probable liabilities; and
C. the probable necessary assessment, if any, to pay all claims and expenses in full, including expenses of administration.
Laws 1984, ch. 127, § 738.
NMSA 1978, § 59A-41-47 Levy of assessment; domestic mutual, reciprocal insurers
59A-41-47. Levy of assessment; domestic mutual, reciprocal insurers
A. Upon the basis of the report provided for in Section 738 [59A-41-46 NMSA 1978] of this article including any amendments thereof, the court, ex parte, may levy one or more assessments against all persons who, as shown by the record of the insurer, were members (if a mutual insurer) or subscribers (if a reciprocal insurer) at any time within one year prior to the date of issuance of the court's order under Section 725 [59A-41-33 NMSA 1978] of this article.
B. Such assessment shall cover the excess of the probable liabilities over the reasonable value of the assets, together with the estimated cost of collection and percentage of incollectibility thereof. The total of all assessments against any member or subscriber with respect to any policy, whether levied pursuant to this article or pursuant to any other provisions of the laws of New Mexico, shall be for no greater amount than specified in the policy or policies of the member or subscriber and as limited under the laws of New Mexico; except that if the court finds that the policy was issued at a rate of premium below the minimum rate lawfully permitted for the risk insured, the court may determine the upper limit of such assessment upon the basis of such minimum rate.
C. No assessment shall be levied against any member or subscriber with respect to any nonassessable policy issued in accordance with the Insurance Code.
D. Where the insurer has levied an assessment prior to the court's order under the proceeding in Section 725 of this article and the superintendent has ratified such assessment with the court's approval such ratification shall in no way be deemed an assessment as set out in Subsections A, B and C of this section.
Laws 1984, ch. 127, § 739.
NMSA 1978, § 59A-41-48 Order for payment of assessment; domestic mutual, reciprocal insurers
59A-41-48. Order for payment of assessment; domestic mutual, reciprocal insurers
After levy of assessment as provided in Section 739 [59A-41-47 NMSA 1978] of this article, upon the filing of a further detailed report by the superintendent, the court shall issue an order directing each member (if a mutual insurer) or each subscriber (if a reciprocal insurer) if he shall not pay the amount assessed against him to the superintendent on or before the day to be specified in the order, to show cause why he should not be held liable to pay such assessment together with costs as set out in Section 742 [59A-41-50 NMSA 1978] of this article and why the superintendent should not have judgment therefor.
Laws 1984, ch. 127, § 740.
NMSA 1978, § 59A-41-49 Assessment order, publication and transmittal
59A-41-49. Assessment order, publication and transmittal
The superintendent shall cause a notice of an assessment order, issued pursuant to Section 740 [59A-41-48 NMSA 1978] of this article, setting forth a brief summary of the contents of such order to be:
A. published in such manner as shall be directed by the court; and
B. enclosed in a sealed envelope, addressed and mailed postage prepaid to each member or subscriber liable thereunder at his address last of record with the insurer, at least twenty (20) days before the return day of the order to show cause provided for in Section 740 of this article.
Laws 1984, ch. 127, § 741.
NMSA 1978, § 59A-41-50 Judgment upon the assessment
59A-41-50. Judgment upon the assessment
A. On the return day of the order to show cause provided for in Section 740 [59A-41-48 NMSA 1978] of this article if the member or subscriber does not appear and serve verified objections upon the superintendent, the court shall make an order adjudging that such member or subscriber is liable for the amount of the assessment against him together with ten dollars ($10) costs, and that the superintendent may have judgment against the member or subscriber therefor.
B. If on such return day the member or subscriber shall appear and serve verified objections upon the superintendent there shall be a full hearing before the court or a referee to hear and determine, who, after such hearing, shall make an order either negating or affirming his liability to pay the whole or some part thereof together with twenty-five dollars ($25) costs and the necessary disbursements incurred at such hearing, and directing that the superintendent in the latter case may have judgment therefor.
C. A judgment upon any such order shall have the same force and effect, and may be entered and docketed, and may be appealed from as if it were a judgment in an original action brought in the court in which the proceeding is pending.
Laws 1984, ch. 127, § 742.
NMSA 1978, § 59A-41-51 Summary proceedings; superintendent's corrective orders authorized
59A-41-51. Summary proceedings; superintendent's corrective orders authorized
A. If the superintendent determines after a hearing that any insurer has committed or engaged in, or is committing or engaging in, or is about to commit or engage in any act, practice or transaction that would subject it to formal delinquency proceedings under this article, he shall make and serve upon the insurer and other persons involved, such orders (other than seizure orders under Sections 746 and 747 [59A-41-54 and 59A-41-55 NMSA 1978] of this article) as he deems reasonably necessary to correct, eliminate, or remedy such conduct, condition or ground. Orders to cure impairment of capital or surplus are subject to Section 92 [59A-5-25 NMSA 1978] of the Insurance Code.
B. If the superintendent believes that irreparable harm to the insurer or its policyholders, creditors or the public may occur unless his order is issued with immediate effect, he may make and serve his order without notice and before hearing, and shall simultaneously therewith serve upon the insurer and other persons involved a notice of hearing.
C. The superintendent's order and notice of hearing shall be served by personal service in any manner provided by the New Mexico Rules of Civil Procedure.
D. This section, and Sections 744 through 749 [59A-41-52 to 59A-41-57 NMSA 1978] of this article, are supplemental to and not in contradiction or modification of Sections 716 through 718 [59A-41-24 to 59A-41-26 NMSA 1978] or any other sections of this article as to insurers in hazardous financial condition.
Laws 1984, ch. 127, § 743.
NMSA 1978, § 59A-41-52 Summary proceedings; appeal from superintendent's order
59A-41-52. Summary proceedings; appeal from superintendent's order
If the superintendent has issued a summary order before hearing as provided in Subsection B of Section 743 [59A-41-51 NMSA 1978] of this article, any person upon whom such order is served may waive the superintendent's hearing and apply for an immediate judicial relief available under law and without first exhausting his administrative remedies.
Laws 1984, ch. 127, § 744.
NMSA 1978, § 59A-41-53 Summary proceedings; enforcement; penalty
59A-41-53. Summary proceedings; enforcement; penalty
A. The superintendent may apply for and the district court for Santa Fe county or the county in which the insurer has its principal office may grant such restraining orders, temporary and permanent injunctions and other orders as may be deemed necessary to enforce the superintendent's order.
B. Violation of any order of the superintendent issued under Section 59A-41-51 NMSA 1978 by any person as to whom the order is in effect shall subject such person to a penalty of not more than ten thousand dollars ($10,000), to be collected in a civil action brought by the attorney general in the name of the state of New Mexico. The attorney general shall deposit all funds so collected with the state treasurer for credit as provided for insurance department receipts in general under Section 59A-6-5 NMSA 1978.
Laws 1984, ch. 127, § 745; 1987, ch. 259, § 25.
NMSA 1978, § 59A-41-54 Summary proceedings; seizure under court order
59A-41-54. Summary proceedings; seizure under court order
A. Upon filing by the superintendent in the district court for Santa Fe county or the county in which the insurer has its principal office of his verified petition alleging any ground for a formal delinquency proceeding against an insurer under this article and that the interests of the insurer's policyholders or creditors or the public will be jeopardized by delay, and setting forth the order deemed necessary by the superintendent, the court shall, ex parte and without notice or hearing, issue the requested order. The requested order may:
(1) direct the superintendent to take possession and control of all or part of the property, books, accounts and records of the insurer and the premises occupied by it for transaction of its business in this state; and
(2) until further order of the court, enjoin the insurer and its officers, managers, agents and employees from removal, concealment or other disposition of its property, and from transaction of its business, except with the superintendent's written consent.
B. The court's order shall be for such duration, specified in the order, as the court deems necessary to enable the superintendent to ascertain the insurer's condition. On motion of any party or on its own motion, the court may hold such hearings as it deems desirable after such notice as it deems appropriate, and extend or shorten the duration or modify the terms of the order. The court shall vacate the seizure order if the superintendent fails to commence a formal proceeding under this article after reasonable opportunity to do so; and a seizure order is automatically terminated by issuance of the court's order pursuant to formal delinquency proceedings under this article.
C. Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer.
Laws 1984, ch. 127, § 746.
NMSA 1978, § 59A-41-55 Summary proceedings; seizure under superintendent's order
59A-41-55. Summary proceedings; seizure under superintendent's order
A. If it appears to the superintendent that the interests of policyholders, creditors or the public will be jeopardized by delay incident to requesting a court seizure order, then on any ground which would justify a court seizure order under Section 59A-41-54 NMSA 1978, and without notice and without applying to the court, the superintendent may issue a seizure order which must contain a statement verified by him of the grounds for his action. As directed by the seizure order, the superintendent's representatives shall forthwith take possession and control of all or part of the property, books, accounts and records of the insurer and of the premises in this state occupied by the insurer for transaction of its business. The superintendent shall retain possession and control until the order is vacated or is replaced by an order of court pursuant to Subsection B of this section, or pursuant to a formal proceeding under Chapter 59A, Article 41 NMSA 1978.
B. At any time after seizure under Subsection A of this section, the insurer may apply to the district court for Santa Fe county. The court shall thereupon order the superintendent to appear forthwith and shall thereafter proceed as if the order were a court seizure order issued under Section 59A-41-54 NMSA 1978.
C. Every peace officer of this state shall assist the superintendent in making and enforcing any such seizure, and every sheriff and police department shall furnish the superintendent with such deputies, patrolmen or officers as may be necessary for the purpose.
D. Entry of a seizure order under this section does not constitute an anticipatory breach of any contract of the insurer.
Laws 1984, ch. 127, § 747; 1987, ch. 259, § 26.
NMSA 1978, § 59A-41-56 Summary proceedings; conduct of administrative and judicial hearings
59A-41-56. Summary proceedings; conduct of administrative and judicial hearings
A. The superintendent shall hold all hearings in summary proceedings privately unless the insurer requests a public hearing, in which case the hearing shall be public.
B. The court may hold all hearings in summary proceedings and judicial reviews thereof privately in chambers, and shall do so on request of the insurer proceeded against.
C. In all summary proceedings and judicial reviews thereof, all records of the insurer, other documents, and all insurance department files and court records and papers, so far as they pertain to or are part of the record of the summary proceedings, shall be and remain confidential except as necessary to obtain compliance therewith, unless the court after hearing arguments by the parties in chambers, orders otherwise, or unless the insurer requests that the matter be made public. Until the court otherwise orders, all papers filed with the clerk of the court in the matter shall be held by him in a confidential file.
D. If at any time it appears to the court that any person whose interest is or will be substantially affected by an order did not appear at the hearing and has not been served, the court may order that notice be given and the proceedings be adjourned to give such person an opportunity to appear, on such terms as may be reasonable.
Laws 1984, ch. 127, § 748.
NMSA 1978, § 59A-41-57 Summary proceedings; penalty for refusal to deliver property, records
59A-41-57. Summary proceedings; penalty for refusal to deliver property, records
Any person having possession or custody of and refusing to deliver to the superintendent or his representative upon request any of the property, books, accounts, documents or other records of an insurer against which a seizure order has been issued by the superintendent or by the court, as provided in Sections 743 through 748 [59A-41-51 to 59A-41-56 NMSA 1978] of this article, unless a greater monetary or other applicable penalty is provided by other law, is upon conviction thereof guilty of a misdemeanor punishable by a fine not to exceed five hundred dollars ($500).
Laws 1984, ch. 127, § 749.
Source: New Mexico Compilation Commission (nmonesource.com)URL: https://nmonesource.com/nmos/nmsa-unanno/en/item/18562/index.doFetched: 10/20/2026