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F I S C A L I M P A C T R E P O R T
SPONSOR Rawson
ORIGINAL DATE
LAST UPDATED
1/20/06
HB
SHORT TITLE Permit Certain Insurance Code Investments
SB 11
ANALYST Earnest
APPROPRIATION (dollars in thousands)
Appropriation
Recurring
or Non-Rec
Fund
Affected
FY06
FY07
NFI
(Parenthesis ( ) Indicate Expenditure Decreases)
SOURCES OF INFORMATION
LFC Files
Responses Received From
Public Regulation Commission (PRC)
SUMMARY
Synopsis of Bill
Senate Bill 11, “An Act Relating to Insurance; Amending the New Mexico Insurance Code to
Expressly Permit Investment in Asset-backed Securities,” would create a new section of the NM
Insurance Code (Chapter 59A, Article 9 NMSA 1978) to define the amount an insurer may in-
vest in asset-backed securities.
FISCAL IMPLICATIONS
None
SIGNIFICANT ISSUES
According to the PRC, this bill would restrict the amount of assets that an insurance company
may hold in asset-backed securities to 20 percent of the insurance company’s total assets.
The current Article 9 of the Insurance Code, which regulates insurance company investments, is
based directly on a model act of the National Association of Insurance Commissioners. Adop-
tion of this bill would put New Mexico at variance with almost all other states in the handling of
asset-backed securities in insurer portfolios.