A. If upon entry of an order of liquidation of a domestic insurer or United States branch of an alien insurer domiciled in this state under Chapter 59A, Article 41 NMSA 1978 or at any time thereafter during liquidation proceedings the insurer is not clearly solvent, the court shall, upon a hearing after such notice as it deems proper, make and enter an order adjudging the insurer to be insolvent.

B. After entry of order of insolvency and regardless of any prior notice given to creditors, the superintendent shall notify all persons who may have claims against the insurer to file such claims, at a place and within the time specified in the notice, or that such claims may be forever barred. The time specified in the notice shall be fixed by the court for filing of claims, which shall be not less than six months after entry of the order of insolvency. The notice shall be given in such manner and for such reasonable period of time as the court may order.

C. The liquidator may permit a claimant making a late filing to share in distributions, whether past or future, as if he were not late, to the extent that any such payment will not prejudice the orderly administration of the liquidation, under the following circumstances:

(1) the existence of the claim was not known to the claimant and the claim was filed as promptly thereafter as reasonably possible after learning of it;

(2) a transfer to a creditor was avoided under Sections 59A-41-42 through 59A-41-43.1 NMSA 1978, or was voluntarily surrendered under Section 59A-41-43.3 NMSA 1978 and the filing satisfies the conditions of Section 59A-41-43.3 NMSA 1978;

(3) the valuation of security held by a secured creditor shows a deficiency, which is filed within thirty days after the valuation and deficiency is determined by the court in accordance with the provisions of Subsection D of Section 59A-41-22 NMSA 1978; or

(4) the claim is from a guaranty association for reimbursement of covered claims paid or expenses incurred subsequent to the last day for filing where such payments were made and expenses incurred as provided by law.

History: Laws 1984, ch. 127, § 733; 1993, ch. 320, § 92.

The 1993 amendment, effective June 18, 1993, substituted "Chapter 59A, Article 37 NMSA 1978" for "this article" in Subsection A; in Subsection B, substituted "claims may be forever barred" for "claims shall be forever barred" in the first sentence and made a stylistic change in the second sentence; and added Subsection C.