SB0007

SENATE BILL 7

51st legislature - STATE OF NEW MEXICO - second session, 2014

INTRODUCED BY

Carrol H. Leavell

AN ACT

RELATING TO INSURANCE; CLARIFYING THE PROVISIONS OF THE RISK-BASED CAPITAL ACT AS THEY APPLY TO CERTAIN INSURERS; SUBJECTING HEALTH ORGANIZATIONS TO THE RISK-BASED CAPITAL ACT; INCORPORATING TREND TESTS FOR CERTAIN INSURERS IN THE RISK-BASED CAPITAL ACT; REVISING CERTAIN TRIGGERS FOR REGULATORY INTERVENTION IN THE RISK-BASED CAPITAL ACT; CLARIFYING THAT FRATERNAL BENEFIT ORGANIZATIONS ARE SUBJECT TO THE RISK-BASED CAPITAL ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

SECTION 1. Section 59A-5A-2 NMSA 1978 (being Laws 1995, Chapter 149, Section 2) is amended to read:

"59A-5A-2. DEFINITIONS.--As used in the Risk-Based Capital Act:

A. "adjusted risk-based capital report" means a risk-based capital report adjusted in accordance with Subsection E of Section 59A-5A-3 NMSA 1978;

B. "authorized control level risk-based capital" means the number determined under the risk-based capital formula in accordance with the risk-based capital instructions bearing the same designation;

C. "company action level risk-based capital" means an amount equal to two hundred percent of an insurer's or health organization's authorized control level risk-based capital;

D. "corrective order" means an order issued by the superintendent specifying required corrective actions;

E. "domestic insurer or health organization" means an insurer, fraternal benefit society or health organization domiciled in New Mexico;

F. "foreign insurer or health organization" means an insurer, fraternal benefit society or health organization that is authorized to do business in New Mexico but is not domiciled in New Mexico;

G. "fraternal benefit society" means an incorporated society, order or supreme lodge, without capital stock, including one exempted pursuant to the provisions of Paragraph (2) of Subsection A of Section 59A-44-40 NMSA 1978, whether incorporated or not, conducted solely for the benefit of its members and their beneficiaries and not for profit, operated on a lodge system with ritualistic form of work, having a representative form of government and that provides benefits in accordance with Chapter 59A, Article 44 NMSA 1978;

H. "health organization" means a health maintenance organization; nonprofit health care plan; limited health service organization; dental or vision plan; hospital, medical and dental indemnity or service corporation; or other managed care organization, but does not mean an organization that is licensed as either a life or health insurer or as a property and casualty insurer and that is otherwise subject to either the life or property and casualty risk-based capital requirements;

[E.] I. "life or health insurer" means any authorized life insurer, health insurer or a property and casualty insurer writing only health insurance [or nonprofit health care plan];

[F.] J. "mandatory control level risk-based capital" means an amount equal to seventy percent of an insurer's or health organization's authorized control level risk-based capital;

[G.] K. "property [or] and casualty insurer" means any insurer authorized to write property, marine and transportation, casualty, vehicle or surety insurance, but does not include any insurer writing only one of the following:

(1) mortgage guaranty insurance;

(2) financial guaranty insurance;

(3) title insurance; or

(4) health insurance;

[H.] L. "negative trend" means, with respect to a life or health insurer or a fraternal benefit society, negative trend over a period of time, as determined in accordance with the trend test calculation included in the life or fraternal risk-based capital instructions;

[I.] M. "regulatory action level risk-based capital" means an amount equal to one hundred fifty percent of an insurer's or health organization's authorized control level risk-based capital;

[J.] N. "revised risk-based capital plan" means a risk-based capital plan that has been rejected by the superintendent and revised by the insurer or health organization, with or without the superintendent's recommendation;

[K.] O. "risk-based capital instructions" means the risk-based capital report, including risk-based capital instructions, adopted by the national association of insurance commissioners, as they may be amended by the national association of insurance commissioners from time to time, and not disapproved by the superintendent;

[L.] P. "risk-based capital level" means an insurer's or health organization's company action level risk-based capital, regulatory action level risk-based capital, authorized control level risk-based capital or mandatory control level risk-based capital;

[M.] Q. "risk-based capital plan" means a comprehensive financial plan as specified in Subsection B of Section 59A-5A-4 NMSA 1978;

[N.] R. "risk-based capital report" means the report specified in Section 59A-5A-3 NMSA 1978; and

[O.] S. "total adjusted capital" means the sum of:

(1) an insurer's or health organization's capital and surplus as determined in accordance with statutory accounting principles applicable to annual financial statements required to be filed under Section 59A-5-29 NMSA 1978; and

(2) such other items, if any, as the risk-based capital instructions may provide."

SECTION 2. Section 59A-5A-3 NMSA 1978 (being Laws 1995, Chapter 149, Section 3) is amended to read:

"59A-5A-3. RISK-BASED CAPITAL REPORTS.--

A. On or before March 1 each year, every domestic insurer and health organization shall prepare and submit to the superintendent a report of its risk-based capital levels as of December 31 of the immediately preceding calendar year, in a form and containing such information as is required by the risk-based capital instructions. In addition, every domestic insurer and health organization shall file its risk-based capital report with:

(1) the national association of insurance commissioners in accordance with the risk-based capital instructions; and

(2) the insurance commissioner of each state in which the insurer or health organization is authorized to do business, if the insurance commissioner for that state has notified the insurer or health organization of [his] the request in writing. The insurer or health organization shall file a copy of its risk-based capital report with each [such] commissioner not later than March 1 each year or fifteen days from receipt of the notice, whichever is later.

B. A life or health insurer's or a fraternal benefit society's risk-based capital shall be determined in accordance with the formula in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following factors:

(1) asset risk;

(2) the risk of adverse insurance experience with respect to the insurer's liabilities and obligations;

(3) the interest rate risk with respect to the insurer's business; and

(4) all other business risks and other relevant risks set forth in the risk-based capital instructions.

C. A health organization's or property or casualty insurer's risk-based capital shall be determined in accordance with the appropriate formula in the risk-based capital instructions. The formula shall take into account and may adjust for the covariance among the following factors:

(1) asset risk;

(2) credit risk;

(3) underwriting risk; and

(4) all other business risks and other relevant risks set forth in the risk-based capital instructions.

D. [An excess of] Capital [over] in excess of the amount [calculated] produced by the risk-based capital requirements contained in the Risk-Based Capital Act and formulas, schedules and instructions referenced in the Risk-Based Capital Act is desirable in the business of insurance. Additional capital is used and useful in the insurance business and helps to secure an insurer or health organization against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in the Risk-Based Capital Act. Accordingly, insurers and health organizations should seek to maintain capital above the risk-based capital levels required by that act.

E. If a domestic insurer or health organization files a risk-based capital report [which] that in the superintendent's judgment is inaccurate, then the superintendent shall adjust the risk-based capital report to correct the inaccuracy and shall notify the insurer or health organization of the adjustment. The notice shall contain a statement of the reason for the adjustment."

SECTION 3. Section 59A-5A-4 NMSA 1978 (being Laws 1995, Chapter 149, Section 4) is amended to read:

"59A-5A-4. COMPANY ACTION LEVEL EVENT.--

A. As used in the Risk-Based Capital Act, a "company action level event" means any [one or more] of the following events:

(1) the filing of a risk-based capital report by an insurer [which] or health organization that indicates [that]:

(a) that the insurer or health organization has total adjusted capital greater than or equal to its regulatory action level risk-based capital but less than its company action level risk-based capital; [or]

(b) in the case of a life or health insurer or fraternal benefit society, that the insurer has total adjusted capital greater than or equal to its company action level risk-based capital but less than [two hundred fifty] three hundred percent of its authorized control level risk-based capital and has a negative trend;

(c) in the case of a property and casualty insurer, that the insurer has total adjusted capital greater than or equal to its company action level risk-based capital but less than three hundred percent of its authorized control level risk-based capital and triggers the trend test determined in accordance with the trend test calculation included in the property and casualty risk-based capital instructions; or

(d) in the case of a health organization, that the health organization has total adjusted capital greater than or equal to its company action level risk-based capital but less than three hundred percent of its authorized control level risk-based capital and triggers the trend test determined in accordance with the trend test calculation included in the health risk-based capital instructions;

(2) the superintendent's notification to an insurer or health organization that its adjusted risk-based capital report indicates the existence of an event described in Paragraph (1) of this subsection, unless the insurer or health organization challenges the adjusted report pursuant to Section 59A-5A-8 NMSA 1978; or

(3) if an insurer or health organization challenges the adjusted report, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge.

B. In the event of a company action level event, the insurer or health organization shall prepare and submit to the superintendent a risk-based capital plan, which shall:

(1) identify the conditions [which] that contribute to the company action level event;

(2) contain proposals of corrective actions [which] that the insurer or health organization intends to take to eliminate the company action level event;

(3) provide projections of the insurer's or health organization's expected financial results in the current year and at least the four succeeding years, both in the absence of and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital and surplus. Projections for new and renewal business may, if appropriate, include separate projections for each major line of business and separately identify each significant income, expense and benefit component;

(4) identify the key assumptions impacting the insurer's or health organization's projections and the sensitivity of the projections to the assumptions; and

(5) identify the quality of, and problems associated with, the insurer's or health organization's business, including [but not limited to] its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case.

C. The risk-based capital plan shall be submitted on or before the later of the following dates:

(1) forty-five days after the company action level event; or

(2) if the insurer or health organization challenges the adjusted risk-based capital report pursuant to Section 59A-5A-8 NMSA 1978, forty-five days after the date of the notification to the insurer or health organization that the superintendent has, after hearing, rejected the insurer's or health organization's challenge.

D. Within sixty days after the submission of an insurer's or health organization's risk-based capital plan, the superintendent shall notify the insurer or health organization whether the plan shall be implemented or is, in the superintendent's judgment, unsatisfactory. If the superintendent determines that the risk-based capital plan is unsatisfactory, the notification to the insurer or health organization shall set forth the reasons for the determination and may set forth proposed revisions that will render the plan satisfactory. Upon notification, the insurer or health organization shall prepare a revised risk-based capital plan, which may incorporate by reference any revisions proposed by the superintendent, and shall submit the revised plan to the superintendent. The revised plan shall be submitted on or before the last of the following dates:

(1) forty-five days after the date of the superintendent's notification; or

(2) if the insurer or health organization challenges the notification pursuant to Section 59A-5A-8 NMSA 1978, forty-five days after the date of the notification to the insurer or health organization that the superintendent has, after hearing, rejected the insurer's or health organization's challenge.

E. A notification that the insurer's or health organization's risk-based capital plan or revised risk-based capital plan is unsatisfactory may include a statement that the notification constitutes a regulatory action level event, subject to the insurer's or health organization's right to a hearing pursuant to Section 59A-5A-8 NMSA 1978.

F. Every domestic insurer [which] or health organization that files a risk-based capital plan or revised risk-based capital plan with the superintendent shall file a copy of the risk-based capital plan and any revised risk-based capital plan with the insurance commissioner of each state in which the insurer or health organization is authorized to do business if:

(1) the state has confidentiality provisions substantially similar to those in Subsection A of Section 59A-5A-9 NMSA 1978; and

(2) the insurance commissioner for that state has notified the insurer or health organization of [his] the request in writing. The insurer or health organization shall file a copy of the risk-based capital plan or revised risk-based capital plan with each [such] commissioner on or before the later of the following dates:

(a) fifteen days after the receipt of notice to file a copy of its risk-based capital plan or revised risk-based capital plan with the state; or

(b) the date that the risk-based capital plan or revised risk-based capital plan is filed under Subsections C and D of this section."

SECTION 4. Section 59A-5A-5 NMSA 1978 (being Laws 1995, Chapter 149, Section 5) is amended to read:

"59A-5A-5. REGULATORY ACTION LEVEL EVENT.--

A. For purposes of the Risk-Based Capital Act, "regulatory action level event" means any of the following events:

(1) the filing of a risk-based capital report by an insurer [which] or health organization that indicates that the insurer's or health organization's total adjusted capital is greater than or equal to its authorized control level risk-based capital but less than its regulatory action level risk-based capital;

(3) if an insurer or health organization challenges the adjusted report, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge;

(4) an insurer's or health organization's failure to file a risk-based capital report by the filing date, unless the insurer or health organization has provided an explanation satisfactory to the superintendent and has cured the failure within ten days after the filing date;

(5) an insurer's or health organization's failure to submit a risk-based capital plan to the superintendent by the date specified in Subsection C of Section 59A-5A-4 NMSA 1978;

(6) the superintendent's notification to an insurer or health organization that:

(a) the risk-based capital plan or revised risk-based capital plan submitted by the insurer or health organization is, in the superintendent's judgment, unsatisfactory; and

(b) the notification constitutes a regulatory action level event with respect to the insurer or health organization, unless the insurer or health organization has challenged the determination pursuant to Section 59A-5A-8 NMSA 1978;

(7) if an insurer or health organization challenges the superintendent's determination made pursuant to Paragraph (6) of this subsection, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge;

(8) the superintendent's notification to an insurer or health organization that the insurer or health organization has failed to adhere to its risk-based capital plan or revised risk-based capital plan and that the failure has had or will have a substantial adverse effect on the ability of the insurer or health organization to eliminate the company action level event, unless the insurer or health organization has challenged the determination pursuant to Section 59A-5A-8 NMSA 1978; or

(9) if an insurer or health organization challenges the superintendent's determination made pursuant to Paragraph (8) of this subsection, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge.

B. In the event of a regulatory action level event, the superintendent shall:

(1) require the insurer or health organization to prepare and submit a risk-based capital plan or, if applicable, a revised risk-based capital plan;

(2) perform such examination or analysis as the superintendent deems necessary of the assets, liabilities and operations of the insurer or health organization, including a review of its risk-based capital plan or revised risk-based capital plan; and

(3) subsequent to the examination or analysis, issue an order specifying such corrective actions as the superintendent determines are required.

C. In determining corrective actions, the superintendent may take into account such factors as are deemed relevant based upon the superintendent's examination or analysis of the assets, liabilities and operations of the insurer or health organization, including [but not limited to] the results of any sensitivity tests undertaken pursuant to the risk-based capital instructions. The risk-based capital plan or revised risk-based capital plan shall be submitted on or before the later of the following dates:

(1) forty-five days after the occurrence of the regulatory action level event; or

(2) if the insurer or health organization challenges an adjusted or revised risk-based capital report or plan pursuant to Section 59A-5A-8 NMSA 1978 and the challenge is not frivolous in the superintendent's judgment, forty-five days after notification to the insurer or health organization that the superintendent has, after hearing, rejected the insurer's or health organization's challenge.

D. The superintendent may retain actuaries and investment experts and other consultants as [he may deem] the superintendent deems necessary to review the insurer's or health organization's risk-based capital plan or revised risk-based capital plan, examine or analyze the assets, liabilities and operations of the insurer or health organization and formulate the corrective order with respect to the insurer or health organization. The fees, costs and expenses incurred by consultants shall be paid by the affected insurer or health organization or such other party as the superintendent directs."

SECTION 5. Section 59A-5A-6 NMSA 1978 (being Laws 1995, Chapter 149, Section 6) is amended to read:

"59A-5A-6. AUTHORIZED CONTROL LEVEL EVENT.--

A. As used in the Risk-Based Capital Act, "authorized control level event" means any of the following events:

(1) the filing of a risk-based capital report by an insurer [which] or health organization that indicates that the insurer's or health organization's total adjusted capital is greater than or equal to its mandatory control level risk-based capital but less than its authorized control level risk-based capital;

(3) if an insurer or health organization challenges the adjusted capital report, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge;

(4) an insurer's or health organization's failure to respond, in a manner satisfactory to the superintendent, to a corrective order unless the insurer or health organization has challenged the order pursuant to Section 59A-5A-8 NMSA 1978; or

(5) if an insurer or health organization has challenged a corrective order and the superintendent has, after hearing, rejected the challenge or modified the corrective order, the failure of the insurer or health organization to respond, in a manner satisfactory to the superintendent, to the corrective order subsequent to rejection or modification.

B. In the event of an authorized control level event with respect to an insurer or health organization, the superintendent shall:

(1) take such actions as are required pursuant to Section 59A-5A-5 NMSA 1978 regarding an insurer or health organization with respect to which a regulatory action level event has occurred; or

(2) if the superintendent deems it to be in the best interests of the insurer's or health organization's policyholders and creditors and of the public, take such actions as are necessary to cause the insurer or health organization to be placed under regulatory control pursuant to Chapter 59A, Article 41 NMSA 1978. The authorized control level event [shall constitute] constitutes sufficient grounds for the superintendent to take action pursuant to Chapter 59A, Article 41 NMSA 1978, and the superintendent [shall have] has the rights, powers and duties with respect to the insurer or health organization set forth in Chapter 59A, Article 41 NMSA 1978."

SECTION 6. Section 59A-5A-7 NMSA 1978 (being Laws 1995, Chapter 149, Section 7) is amended to read:

"59A-5A-7. MANDATORY CONTROL LEVEL EVENT.--

A. As used in the Risk-Based Capital Act, "mandatory control level event" means any of the following events:

(1) the filing of a risk-based capital report [which] that indicates that an insurer's or health organization's total adjusted capital is less than its mandatory control level risk-based capital;

(3) if the insurer or health organization challenges the adjusted report, notification to the insurer or health organization that the superintendent has, after hearing, rejected the insurer's or health organization's challenge.

B. In the event of a mandatory control level event, the superintendent shall:

(1) with respect to a life or health insurer, fraternal benefit society or health organization, take such actions as are necessary to place the life or health insurer, fraternal benefit society or health organization under regulatory control pursuant to Chapter 59A, Article 41 NMSA 1978. In that event, the mandatory control level event [shall constitute] constitutes sufficient grounds for the superintendent to take action pursuant to Chapter 59A, Article 41 NMSA 1978, and the superintendent [shall have] has the rights, powers and duties with respect to the insurer set forth in Chapter 59A, Article 41 NMSA 1978. Notwithstanding the foregoing provisions of this paragraph, the superintendent may [forego] forgo action for up to ninety days after the mandatory control level event if the superintendent finds that there is a reasonable expectation that the mandatory control level event can be eliminated within the ninety-day period; or

(2) with respect to a property [or] and casualty insurer, take such actions as are necessary to place the insurer under regulatory control pursuant to Chapter 59A, Article 41 NMSA 1978, or, in the case of an insurer that is writing no business and that is running off its existing business, may allow the insurer to continue its run off under the superintendent's supervision. In either event, the mandatory control level event [shall constitute] constitutes sufficient grounds for the superintendent to take action pursuant to Chapter 59A, Article 41 NMSA 1978, and the superintendent [shall have] has the rights, powers and duties with respect to the insurer as are set forth in Chapter 59A, Article 41 NMSA 1978. Notwithstanding the foregoing provisions of this paragraph, the superintendent may [forego] forgo action for up to ninety days after the mandatory control level event if the superintendent finds that there is a reasonable expectation that the mandatory control level event can be eliminated within the ninety-day period."

SECTION 7. Section 59A-5A-8 NMSA 1978 (being Laws 1995, Chapter 149, Section 8) is amended to read:

"59A-5A-8. CHALLENGE HEARINGS.--Any insurer or health organization has the right to a confidential administrative hearing of record in accordance with Chapter 59A, Article 4 NMSA 1978 at which the insurer or health organization may challenge any determination or action by the superintendent pursuant to the Risk-Based Capital Act.

A. The insurer or health organization shall file and serve on the superintendent its request for hearing within five days after any of the following events:

(1) the superintendent's notification to the insurer or health organization of an adjusted risk-based capital report;

(2) the superintendent's notification to the insurer or health organization that:

(a) the insurer's or health organization's risk-based capital plan or revised risk-based capital plan is unsatisfactory; and

(b) such notification constitutes a regulatory action level event with respect to [such] the insurer or health organization;

(3) the superintendent's notification to the insurer or health organization that the insurer or health organization has failed to adhere to its risk-based capital plan or revised risk-based capital plan and that such failure has had or will have a substantial adverse effect on the ability of the insurer or health organization to eliminate the company action level event; or

(4) the superintendent's notification to an insurer or health organization of a corrective order with respect to the insurer or health organization.

B. Upon receipt of the insurer's or health organization's request for hearing, the superintendent shall set a hearing date, which shall be not less than ten nor more than thirty days after the date of the insurer's or health organization's request."

SECTION 8. Section 59A-5A-9 NMSA 1978 (being Laws 1995, Chapter 149, Section 9) is amended to read:

"59A-5A-9. CONFIDENTIALITY--PROHIBITION ON ANNOUNCEMENTS--PROHIBITION ON USE IN RATEMAKING.--

A. To the extent not set forth in any other form accessible to the public, all information in risk-based capital reports, risk-based capital plans, results or reports of any examination or analysis of an insurer or health organization performed [pursuant to] exclusively for the purposes required by the Risk-Based Capital Act and all corrective orders issued by the superintendent pursuant to such examination or analysis [is] are and shall be kept confidential by the superintendent. This information shall not be made public. [or be subject to subpoena, other than by the superintendent and then only for the purpose of enforcement actions taken by the superintendent pursuant to the Insurance Code.]

B. To assist in the performance of the superintendent's duties, the superintendent may:

(1) share documents, materials or other information, including the confidential and privileged documents, materials or information identified in Subsection A of this section, with other state, federal and international regulatory agencies, with the national association of insurance commissioners, its affiliates or its subsidiaries and with state, federal and international law enforcement authorities if the recipient agrees in writing to maintain the confidentiality and privilege of the documents, materials or other information;

(2) receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the national association of insurance commissioners, its affiliates or its subsidiaries and from regulatory and law enforcement officials of foreign or domestic jurisdictions, except that the superintendent shall maintain as confidential or privileged documents, materials or other information received with notice or the understanding that the content is confidential or privileged pursuant to the laws of the jurisdiction from which the information originates; and

(3) enter into agreements governing the sharing and use of information that are consistent with this subsection.

[B.] C. The comparison of an insurer's or health organization's total adjusted capital to any of its risk-based capital levels is a regulatory tool that may indicate the need for possible corrective action by the superintendent with respect to the insurer or health organization and is not intended as a means to rank insurers or health organizations generally or to compare insurers or health organizations for marketing purposes. Use of such comparisons for such purposes is inherently misleading and deceptive. Except as otherwise required under the provisions of the Risk-Based Capital Act or applicable law, no insurer, health organization, agent, broker or other person engaged in any manner in the business of insurance shall make, publish, disseminate, circulate or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or placed before the public in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to the risk-based capital levels of any insurer or health organization, or of any component derived in their calculation; provided, however, that if any materially false statement with respect to the comparison regarding an insurer's or health organization's total adjusted capital to its risk-based capital levels or an inappropriate comparison of any other amount to the insurer's or health organization's risk-based capital levels is published in any written publication and the insurer or health organization is able to demonstrate to the superintendent's satisfaction the falsity or inappropriateness of the statement, then the insurer or health organization may publish an announcement approved in advance by the superintendent in a written publication whose sole purpose is to rebut the materially false statement.

[C.] D. The risk-based capital instructions, risk-based capital reports, adjusted risk-based capital reports, risk- based capital plans and revised risk-based capital plans are intended solely for use by the superintendent in monitoring the solvency of insurers and health organizations and the need for possible corrective action with respect to insurers and health organizations. They shall not be used by the superintendent for ratemaking, considered or introduced as evidence in any rate proceeding or used to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance [which] that an insurer, health organization or any affiliate is authorized to write."

SECTION 9. Section 59A-5A-11 NMSA 1978 (being Laws 1995, Chapter 149, Section 11) is amended to read:

"59A-5A-11. FOREIGN INSURERS.--

A. Any foreign insurer or health organization shall, upon the superintendent's written request, submit to the superintendent a risk-based capital report, as of the end of the most recent calendar year, on the same date risk-based capital reports are required to be filed by domestic insurers and health organizations under the Risk-Based Capital Act or fifteen days after the request is received by the foreign insurer or health organization, whichever is later. Any foreign insurer or health organization shall, upon the superintendent's written request, promptly submit to the superintendent a copy of any risk-based capital plan filed with the insurance commissioner of any other state.

B. In the event of a company action level event, regulatory action level event or authorized control level event with respect to any foreign insurer or health organization as determined pursuant to the risk-based capital statute applicable in an insurer's or health organization's state of domicile, or, if no risk-based capital requirements are in force in that state, under the provisions of the Risk-Based Capital Act, the superintendent may require the foreign insurer or health organization to file a risk-based capital plan with the superintendent unless the insurance commissioner of the insurer's or health organization's state of domicile has previously so required. The failure of the foreign insurer or health organization to timely file a risk-based capital plan with the superintendent shall be grounds to order the insurer or health organization to cease and desist from writing new insurance business in this state or to suspend or revoke its certificate of authority.

C. In the event of a mandatory control level event with respect to any foreign insurer or health organization, the superintendent may proceed in accordance with Subsection B of Section 59A-5A-7 NMSA 1978."

SECTION 10. Section 59A-5A-13 NMSA 1978 (being Laws 1995, Chapter 149, Section 13) is amended to read:

"59A-5A-13. NOTICES.--The superintendent's notices to an insurer or health organization pursuant to the Risk-Based Capital Act shall be effective upon mailing by certified mail or, in the case of any other mode of transmission, shall be effective upon the insurer's or health organization's receipt."

SECTION 11. A new section of the Risk-Based Capital Act is enacted to read:

"[NEW MATERIAL] SEVERABILITY.--If any part or application of the Risk-Based Capital Act is held invalid, the remainder or its application to other situations or persons shall not be affected."

SECTION 12. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2014.