A. The superintendent may, at his discretion, suspend, limit or revoke an insurer's certificate of authority if he finds after a hearing thereon, or upon waiver of hearing by the insurer, that the insurer has:

(1) violated or failed to comply with any lawful order of the superintendent;

(2) willfully violated or willfully failed to comply with any lawful regulation of the superintendent;

(3) violated any provision of the Insurance Code other than those for violation of which suspension or revocation is mandatory; or

(4) reinsured all or substantially all of its risks, or all or substantially all of its risks in a particular kind of insurance, in another insurer.

B. In lieu of suspension or revocation of certificate of authority as provided in Subsection A of this section, the superintendent may, at his discretion, levy upon the insurer and the insurer shall forthwith pay to the superintendent, an administrative fine of not more than five thousand dollars ($5,000). The superintendent shall promptly deposit with the state treasurer to the credit of the general fund all money received under this subsection.

C. The superintendent shall suspend or revoke an insurer's certificate of authority on any of the following grounds, if found after a hearing thereon that the insurer:

(1) is in unsound condition, or being fraudulently conducted, or in such condition or using such methods and practices in conduct of its business as to render its further transaction of insurance in this state currently or prospectively hazardous or injurious to policyholders or the public;

(2) with such frequency as to indicate its general business practice in this state:

(a) has without just cause failed to pay, or delayed payment of, claims arising under its policies, whether the claim is in favor of an insured or in favor of a third person with respect to the liability of an insured to such third person; or

(b) without just cause compels insureds or claimants to accept less than amount due them or to employ attorney or to bring suit against the insurer or such an insured to secure full payment or settlement of a claim;

(3) refuses to be examined, or if its directors, officers, employees or representatives refuse to submit to examination relative to its affairs, or to produce books, papers, records, contracts, correspondence or other documents for examination by the superintendent when required, or refuses or fails to pay expenses of the examination or to perform any other legal obligation relative to the examination; or

(4) has failed to pay any final judgment rendered against it in this state upon any policy, bond, recognizance or undertaking as issued or guaranteed by it, within thirty days after the judgment becomes final.

D. The superintendent may, at his discretion and without advance notice or hearing thereon, immediately suspend the certificate of authority of an insurer as to which proceedings for receivership, conservation, rehabilitation or other delinquency proceedings have been commenced in any state by the public insurance supervisory officer of that state.

History: Laws 1984, ch. 127, § 93; 1997, ch. 121, § 3.

Cross references. — For the Insurance Code, see 59A-1-1 NMSA 1978 and notes thereto.

The 1997 amendment, effective June 20, 1997, added Paragraph A(4) and made stylistic changes throughout the section.