A. No nonrenewal, cancellation or revision of a ceded reinsurance program need be reported pursuant to Section 59A-34-44 NMSA 1978 if the nonrenewal, cancellation or revision is not material. For purposes of this section and Section 59A-34-44 NMSA 1978, a material nonrenewal, cancellation or revision is one that, on an annualized basis as indicated in the insurer's most recently filed financial statement, affects more than fifty percent of an insurer's ceded written premium for property or casualty business, including accident and health business when written by a casualty insurer, or affects more than fifty percent of the total reserve credit taken for business ceded for life, annuity, or accident and health business written by an insurer other than a casualty insurer; but the transaction is not material if the insurer's ceded written premium or the total reserve credit taken for business ceded represents, on an annualized basis, less than ten percent of direct plus assumed written premium or ten percent of the statutory reserve requirement prior to any cession, respectively.
B. Notwithstanding the provisions of Subsection A of this section, and without regard to which part has initiated the nonrenewal, cancellation or revision of ceded reinsurance, a report is to be filed whenever:
(1) the entire cession has been canceled, nonrenewed or revised, and ceded indemnity and loss adjustment expense reserves after any nonrenewal, cancellation or revision represent less than fifty percent of the comparable reserves that would have been ceded had the nonrenewal, cancellation or revision not occurred;
(2) an authorized or accredited reinsurer has been replaced on an existing cession by an unauthorized or nonaccredited reinsurer; or
(3) previously established collateral requirements for unauthorized or nonaccredited reinsurers have been reduced or waived, either as to an existing reinsurer or reinsurers or to one or more reinsurers newly participating in an existing cession.
C. The following information is required to be disclosed in the report of a material nonrenewal, cancellation or revision of a ceded reinsurance program:
(1) the effective date of the nonrenewal, cancellation or revision;
(2) a description of the transaction with an identification of the initiator thereof;
(3) the purpose of, or reason for, the transaction; and
(4) if applicable, the identity of the replacement reinsurers.
D. Insurers are required to report all material nonrenewals, cancellations or revisions of ceded reinsurance programs on a non-consolidated basis unless the insurer is part of a consolidated group of insurers which utilizes an intercompany pooling agreement or arrangement or a one hundred percent reinsurance agreement under which the ceding company has ceded substantially all of its direct and assumed business to a pool, and the group reports in accordance with Section 59A-34-44 NMSA 1978 on behalf of the members of the group on a consolidated basis. For purposes of this subsection an insurer is deemed to have ceded substantially all of its direct and assumed business to a pool if the insurer has less than one million dollars ($1,000,000) of total direct plus assumed written premiums during a calendar year that are not subject to the pooling agreement or arrangement and the net income of the business not subject to the pooling agreement or arrangement represents less than five percent of the insurer's capital and surplus. If a group of insurers reports on a consolidated basis as allowed by this subsection, the report shall identify every insurer that is a member of the group.
History: 1978 Comp., § 59A-34-46, enacted by Laws 1993, ch. 320, § 70.
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.