N.M. Admin. Code § 13.2.8.18 - ASSET OR REDUCTION FROM LIABILITY FOR REINSURANCE CEDED TO AN UNAUTHORIZED ASSUMING INSURER NOT MEETING THE REQUIREMENTS OF SECTIONS 13.2.8.8 THROUGH 13.2.8.17 NMAC
A.
Pursuant to Section
59A-12E-6 NMSA 1978, the
superintendent will allow a reduction from liability for reinsurance ceded by a
domestic insurer to an assuming insurer not meeting the requirements of
Sections 59A-12E-3 through
59A-12E-15 NMSA 1978 in an amount
not exceeding the liabilities carried by the ceding insurer. The reduction
shall be in the amount of funds held by or on behalf of the ceding insurer,
including funds held in trust for the exclusive benefit of the ceding insurer,
under a reinsurance contract with such assuming insurer as security for the
payment of obligations under the reinsurance contract. The security shall be
held in the U.S. subject to withdrawal solely by, and under the exclusive
control of, the ceding insurer or, in the case of a trust, held in a qualified
U.S. financial institution as defined in Paragraph (2) of Subsection E of
Section 59A-12E-2 NMSA 1978. This
security may be in the form of any of the following:
(1) cash;
(2) securities listed by the Securities
Valuation Office of the NAIC, including those deemed exempt from filing as
defined by the Purposes and Procedures Manual of the Securities Valuation
Office, and qualifying as admitted assets;
(3) clean, irrevocable, unconditional and
"evergreen" letters of credit issued or confirmed by a qualified U.S.
institution, as defined in Paragraph (1) of Subsection E of Section
59A-12E-2 NMSA 1978, effective no
later than December 31 of the year for which filing is being made, and in the
possession of, or in trust for, the ceding insurer on or before the filing date
of its annual statement. Letters of credit meeting applicable standards of
issuer acceptability as of the dates of their issuance (or confirmation) shall,
notwithstanding the issuing (or confirming) institution's subsequent failure to
meet applicable standards of issuer acceptability, continue to be acceptable as
security until their expiration, extension, renewal, modification or amendment,
whichever first occurs; or
(4) any
other form of security acceptable to the superintendent.
Notes
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