A. No domestic insurer shall participate in any underwriting of the purchase or sale of securities in advance of their issuance or enter into any transaction for such purchase or sale on account of the insurer jointly with any other person.

B. No domestic insurer shall enter into any agreement to withhold from sale any of its property. Except as to statutory deposits required to be made by the insurer, disposition of the insurer's property shall at all times be within control of its board of directors, in accordance with its charter and bylaws.

C. Except as otherwise specifically provided by law, no domestic insurer shall pledge or transfer any of its securities as collateral for a loan if such loan with all other outstanding loans secured by pledge or deposit of its securities aggregates, or will aggregate if such a loan is made, more than five percent of its admitted assets as shown by its last sworn financial statement filed with the superintendent, unless the superintendent first gives his written permission for such loan as necessary in conduct of the business of the insurer; but in no event shall any pledge or transfer of securities for a loan be made by the insurer if the insurer does not receive the proceeds of the loan, or if such proceeds are to be used, directly or indirectly, for investment in other securities. Nothing in this subsection shall prohibit a domestic insurer:

(1) from depositing or maintaining a deposit of any of its securities with the authorities of any other state in accordance with the laws thereof, for authority to transact insurance in such state; or

(2) from depositing securities as collateral for any surety or fidelity bond required for the insurer's business; or

(3) from entering into an agreement with a securityholder's protective committee or from depositing any of its securities with a depository under such agreement or under a plan of reorganization, for the purpose of protecting the insurer's interests.

D. No domestic insurer shall purchase its own stock, except as provided in Section 568 [59A-34-22 NMSA 1978] of this article.

E. No domestic insurer shall in connection with sale of any property agree to repurchase such property or any part thereof.

F. Subsections D and E of this section shall not apply as to purchase or sale of directors' qualifying shares.

G. No domestic insurer shall make any loan or other advance of funds if the insurer knows or reasonably should have known that the proceeds of such loan or advance in whole or part are to be used directly or indirectly for purchase of any stock or other securities of the insurer.

H. No domestic insurer shall dispose or attempt to dispose of more than ten percent of its assets out of regular course of business without advance written approval of the superintendent.

History: Laws 1984, ch. 127, § 578.