A. A domestic mutual insurer shall not merge or consolidate with a stock insurer.
B. A domestic mutual insurer may merge or consolidate with another domestic or foreign mutual insurer under applicable procedures prescribed by the laws of this state governing private business corporations as modified by this section.
C. If the insurer is then unimpaired, the plan and agreement for merger or consolidation shall be submitted to and approved by at least two-thirds of the members of each mutual insurer voting thereon at meetings called for the purpose pursuant to reasonable notice and procedure. The plan and agreement may provide for giving such notice to members by publishing the same once a week for two (2) consecutive weeks in newspapers of general circulation in two (2) out of the four (4) cities of greatest population according to the last preceding national census by an agency of the United States government, in each of the states in which the insurer in [is] authorized to transact insurance; or notice may be given by depositing the same in the United States mail, postage prepaid, addressed to the member at his address last of record with the insurer, or by personal delivery. As to a life insurer, the right to vote may be limited to members whose policies are other than term or group and have been in effect for more than one year.
D. No such merger or consolidation shall be effectuated unless in advance thereof the plan and agreement therefor have been filed with the superintendent and approved by him in writing. Prior to or at time of filing the plan a foreign insurer party to the plan if not then an authorized insurer shall file with the superintendent the documents and information required as for application for certificate of authority under Paragraphs (1), (3), (4), (5) and (7) of Subsection A, and under Subsection B, of Section 88 [59A-5-21 NMSA 1978] of the Insurance Code. The superintendent shall not act upon the plan and agreement until after a hearing thereon. The superintendent shall give such approval unless he finds such plan or agreement:
(1) inequitable to policyholders of any insurer involved; or
(2) would substantially reduce the security of and service to policyholders of the insurers, or result in a surviving insurer which does not meet the basic surplus requirements for certificate of authority of a like insurer under Section 83 [59A-5-16 NMSA 1978] of the Insurance Code or is otherwise inadequately financed for reasonable continuing conduct of its business; or
(3) would materially tend to lessen competition in the insurance business in this state or elsewhere as to the kinds of insurance involved or would materially tend to create a monopoly as to such business; or
(4) is unlawful or subject to other material and reasonable objections.
E. No director, officer, agent or employee of any insurer party to such merger or consolidation, or any other person, shall receive any fee, commission or other special valuable consideration whatsoever for in any manner aiding, promoting or assisting therein except as set forth in the plan and agreement as approved by the superintendent.
F. Subsection D of Section 582 [59A-34-36 NMSA 1978] (merger, consolidation of domestic stock insurers) of this article shall also apply as to merger or consolidation under this section.
History: Laws 1984, ch. 127, ยง 584.
Structure New Mexico Statutes
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-34-6 - 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.