New Mexico Statutes
Article 34 - Domestic Stock and Mutual Insurers
Section 59A-34-23 - Borrowed capital funds.

A. A domestic insurer may without pledge of assets borrow money to defray expense of organization, provide surplus funds or for any purpose of its business, upon a written agreement that such money is required to be repaid only out of the insurer's surplus in excess of that stipulated in such agreement. The agreement may provide for interest on unpaid balance of principal at a reasonable rate approved by the superintendent, which interest shall or shall not constitute a liability of the insurer as to its funds other than such excess of surplus, as stipulated in the agreement. No commission or promotion expense shall be paid in connection with any such loan, except that if a public offering and sale is made of the loan securities the insurer may pay the reasonable costs thereof approved by the superintendent.
B. Money so borrowed, together with the interest thereon if so provided in the agreement, shall not be part of the insurer's legal liabilities except as to its surplus in excess of the amount of surplus stipulated in the agreement, or be basis of any setoff; but until repaid, financial statements filed or published by the insurer shall show as a footnote thereto the amount of the loan then unpaid together with any interest thereon accrued but unpaid.
C. Any such loan shall be subject to the superintendent's approval. The insurer, in advance of the loan, shall file with the superintendent a statement of the amount proposed to be so borrowed and the purposes thereof together with a copy of the proposed loan agreement. The loan and agreement shall be deemed approved unless within thirty (30) days after date of such filing the insurer is notified of the superintendent's disapproval and reasons therefor. The superintendent shall disapprove any proposed loan or agreement if he finds the loan unnecessary or excessive for purposes intended or that the terms of the agreement are not fair and equitable to the parties and to other similar lenders, if any, to the insurer, or that the information so filed by the insurer is inadequate.
D. Any such loan or substantial portion thereof shall be repaid by the insurer when no longer reasonably necessary for the purposes intended. No such repayment shall be made unless approved in advance by the superintendent upon his finding that repayment would not deprive the insurer of funds reasonably required for its operations or protection of its policyholders.
E. Such loan agreements when offered for purchase by the public shall for purposes of Article 35 [Chapter 59A, Article 35 NMSA 1978] (sale of insurance securities) of the Insurance Code be deemed to be securities.
F. This section does not apply to other kinds of loans obtained by the insurer in ordinary course of business, or to loans secured by pledge or mortgage of assets.
History: Laws 1984, ch. 127, ยง 569.

Structure New Mexico Statutes

New Mexico Statutes

Chapter 59A - Insurance Code

Article 34 - Domestic Stock and Mutual Insurers

Section 59A-34-1 - Scope of article.

Section 59A-34-2 - Application of general corporation statutes.

Section 59A-34-3 - Insurance business exclusive; exceptions.

Section 59A-34-4 - Incorporation.

Section 59A-34-5 - Filing, recording of articles; authority to raise capital or transact insurance required.

Section 59A-34-6 - Amendment of articles of incorporation.

Section 59A-34-7 - Nonuser of corporate charter.

Section 59A-34-8 - Prohibited interest of officers, directors and employees in certain transactions.

Section 59A-34-9 - Salaries of officers, directors.

Section 59A-34-10 - Records and accounts.

Section 59A-34-11 - Vouchers for expenditures.

Section 59A-34-12 - Assets to be kept in state; exceptions.

Section 59A-34-13 - Removal, concealment of records, assets.

Section 59A-34-14 - Information to stockholders and proxy regulations.

Section 59A-34-15 - Information in advance of stockholder meetings.

Section 59A-34-16 - Solicitation of proxies.

Section 59A-34-17 - Management, compensation and agency contracts.

Section 59A-34-18 - Dividends to stockholders.

Section 59A-34-19 - Participating policies.

Section 59A-34-20 - Dividends to policyholders.

Section 59A-34-21 - Illegal dividends; penalty.

Section 59A-34-22 - Purchase of own shares by stock insurer.

Section 59A-34-23 - Borrowed capital funds.

Section 59A-34-24 - Mutual membership.

Section 59A-34-25 - Mutual members, corporate rights.

Section 59A-34-26 - Mutual insurer bylaws.

Section 59A-34-27 - Mutual members, quorum.

Section 59A-34-28 - Mutual members, contingent liability.

Section 59A-34-29 - Mutual members, levy of contingent liability.

Section 59A-34-30 - Mutual members, enforcement of contingent liability.

Section 59A-34-31 - Mutual insurers; nonassessable policies.

Section 59A-34-32 - Prohibited transactions.

Section 59A-34-33 - Unauthorized business in other states.

Section 59A-34-34 - Mutualization of stock insurer.

Section 59A-34-35 - Conversion to ordinary business corporation.

Section 59A-34-36 - Merger, consolidation of stock insurers.

Section 59A-34-37 - Preservation of old charter in merger, consolidation.

Section 59A-34-38 - Merger, consolidation of mutual insurers.

Section 59A-34-39 - Conversion of mutual to stock insurer.

Section 59A-34-40 - Bulk reinsurance.

Section 59A-34-41 - Bulk reinsurance; fees and commissions.

Section 59A-34-42 - Expense to be borne by parties.

Section 59A-34-43 - Mutual member's share of assets on liquidation.

Section 59A-34-44 - Material transactions; report.

Section 59A-34-45 - Acquisition and disposition of assets; materiality; scope; reporting requirements.

Section 59A-34-46 - Nonrenewals, cancellations or revisions of ceded reinsurance programs; materiality; scope; reporting requirements.