New Mexico Administrative Code
Title 13 - INSURANCE
Chapter 2 - INSURANCE COMPANY LICENSING AND OPERATION
Part 8 - CREDIT FOR REINSURANCE
Section 13.2.8.7 - DEFINITIONS

Universal Citation: 13 NM Admin Code 13.2.8.7

Current through Register Vol. 35, No. 6, March 26, 2024

As used in this rule:

A. "Annual financial statement" means the statement required by Section 59A-5-29 NMSA 1978.

B. "Beneficiary" means the entity for whose sole benefit the trust has been established and any successor of the beneficiary by operation of law, including without limitation any liquidator, rehabilitator, receiver or conservator except that, if a court of law appoints a successor in interest to a domestic insurer for whose benefit a letter of credit qualified under 13.2.8.24 NMAC has been established, then the named beneficiary includes and is limited to the court-appointed domiciliary receiver.

C. "Commissioner" means the individual or regulatory agency in a jurisdiction other than New Mexico who has jurisdiction over banking, financial services, the business of insurance, or other relevant business.

D. "Form" means a form, including any applicable instructions, that is posted on the official OSI website or, if the form is generated by an agency or entity other than OSI, an official form to be obtained from such other agency or entity. Forms AR-1, CR-1, CR-F, CR-S and RJ-1 as referenced in this rule will be posted on the official OSI website.

E. "Grantor" means the entity that has established a trust for the sole benefit of the beneficiary. When established in conjunction with a reinsurance agreement, the grantor is the unlicensed, unaccredited assuming insurer.

F. "Jurisdiction" means any state, district or territory of the U.S. and any lawful national government.

G. "Liabilities" means the assuming insurer's gross liabilities attributable to reinsurance ceded by U.S. domiciled insurers excluding liabilities that are otherwise secured by acceptable means, and shall include:

(1) for business ceded by domestic insurers authorized to write accident and health, and property and casualty insurance:
(a) losses and allocated loss expenses paid by the ceding insurer, recoverable from the assuming insurer;

(b) reserves for losses reported and outstanding;

(c) reserves for losses incurred but not reported;

(d) reserves for allocated loss expenses; and

(e) unearned premiums; or

(2) for business ceded by domestic insurers authorized to write life, health and annuity insurance:
(a) aggregate reserves for life policies and contracts net of policy loans and net due and deferred premiums;

(b) aggregate reserves for accident and health policies;

(c) deposit funds and other liabilities without life or disability contingencies; and

(d) liabilities for policy and contract claims.

H. "Mortgage-related security" means an obligation that is rated AA or higher (or the equivalent) by a securities rating agency recognized by the SVO and that either:

(1) represents ownership of one or more promissory notes or certificates of interest or participation in the notes (including any rights designed to assure servicing of, or the receipt or timeliness of receipt by the holders of the notes, certificates, or participation of amounts payable under, the notes, certificates, or participation of amounts payable under, the notes, certificates or participation), that:
(a) are directly secured by a first lien on a single parcel of real estate, including stock allocated to a dwelling unit in a residential cooperative housing corporation, upon which is located a dwelling or mixed residential and commercial structure, or on a residential manufactured home as defined in 42 U.S.C.A. Section 5402(6), whether the manufactured home is considered real or personal property under the laws of the state in which it is located; and

(b) were originated by a savings and loan association, savings bank, commercial bank, credit union, insurance company, or similar institution that is supervised and examined by a federal or state housing authority, or by a mortgagee approved by the secretary of housing and urban development pursuant to 12 U.S.C.A. Sections 1709 and 1715 -b, or, where the notes involve a lien on the manufactured home, by an institution or by a financial institution approved for insurance by the secretary of housing and urban development pursuant to 12 U.S.C.A. Section 1703; or

(2) is secured by one or more promissory notes or certificates of deposit or participations in the notes (with or without recourse to the insurer of the notes) and, by its terms, provides for payments of principal in relation to payments, or reasonable projections of payments, or notes meeting the requirements of Subparagraph (1)(a) of this Subsection.

I. "NAIC" means the national association of insurance commissioners.

J. "Obligations" means:

(1) reinsured losses and allocated loss expenses paid by the ceding company, but not recovered from the assuming insurer;

(2) reserves for reinsured losses reported and outstanding;

(3) reserves for reinsured losses incurred but not reported; and

(4) reserves for allocated reinsured loss expenses and unearned premiums.

K. "OECD" means the organization for economic cooperation and development.

L. "Promissory note" when used in connection with a manufactured home, shall also include a loan, advance or credit sale as evidenced by a retail installment sales contract or other instrument.

M. "Qualified U.S. financial institution" has the meaning given in Subsection E of Section 59A-12E-2 NMSA 1978.

N. "Reciprocal jurisdiction" means a jurisdiction, as designated by the superintendent pursuant to Subsection D of 13.2.8.16 NMAC, that meets one of the criteria set forth in Subsection B of 13.2.8.16 NMAC.

O. "Solvent scheme of arrangement" means a foreign or alien statutory or regulatory compromise procedure subject to requisite majority creditor approval and judicial sanction in the assuming insurer's home jurisdiction either to finally commute liabilities of duly noticed classed members or creditors of a solvent debtor, or to reorganize or restructure the debts and obligations of a solvent debtor on a final basis, and which may be subject to judicial recognition and enforcement of the arrangement by a governing authority outside the ceding insurer's home jurisdiction.

P. "Substantially similar standards" means credit for reinsurance standards which the superintendent determines are equal to or exceed the standards of the Credit for Reinsurance Act and this rule.

Q. "Statutory financial statement" means quarterly, annual or other financial statements required by state law.

R. "SVO" means the securities valuation office of the NAIC.

S. "Superintendent" means the superintendent of insurance, the office of superintendent of insurance or employees of the office of superintendent of insurance acting within the scope of the superintendent's official duties and with the superintendent's authorization.

Disclaimer: These regulations may not be the most recent version. New Mexico may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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