As used in the Insurance Holding Company Law:
A. "acquire" means to come into possession or control of, and "acquisition" means any agreement, arrangement or activity the consummation of which results in a person acquiring directly or indirectly the control of another person and includes the acquisition of voting securities or assets, bulk reinsurance and mergers;
B. "affiliate" means a person that directly or indirectly is controlled by, is under common control with or controls another person;
C. "control" means the possession of the power to direct or cause the direction of the management and policies of a person, whether directly or indirectly, through the ownership of voting securities, through licensing or franchise agreements, by contract other than a commercial contract for goods or nonmanagement services, or otherwise, unless the power is the result of an official position with or corporate office held by an individual. Control shall be presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote or holds proxies representing ten or more percent of the voting securities of any other person. This presumption may be rebutted by a showing, in the manner provided by Section 59A-37-19 NMSA 1978, that control does not in fact exist. The superintendent may determine, after furnishing all persons in interest notice and an opportunity to be heard, that control exists in fact, notwithstanding the absence of a presumption to that effect, provided the determination is based on specific findings of fact in its support;
D. "enterprise risk" means an activity, a circumstance, an event or a series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its whole insurance holding company system and includes a situation that would cause a company action level event as defined in Section 59A-5A-4 NMSA 1978 or would cause the insurer to be in a hazardous financial condition as defined in Section 59A-41-24 NMSA 1978;
E. "health maintenance organization" means a person that undertakes to provide or arrange for the delivery of basic health care services to enrollees on a prepaid basis; provided that "prepaid basis" may include the payment of copayments and deductibles by enrollees;
F. "insurance holding company" is a person that controls an insurer; "insurance holding company system" means a combination of two or more affiliated persons, at least one of which is an insurer;
G. "insurer" means a person that undertakes, under contract, to indemnify a person against loss, damage or liability arising from an unknown or contingent future event. The term does not include agencies, authorities or instrumentalities of the United States, its possessions or territories, the commonwealth of Puerto Rico, the District of Columbia, a state or any of its political subdivisions or a fraternal benefit society;
H. "person" means an individual, corporation, association, partnership, joint stock company, trust, unincorporated organization or any similar entity or combination of entities;
I. "securityholder" means the owner of any security of a person, including common stock, preferred stock, debt obligations and any other security convertible into or evidencing the right to acquire any of the foregoing;
J. "subsidiary" means an affiliate of a person controlled by the person either directly or indirectly through one or more intermediaries; and
K. "voting security" means a certificate evidencing the ownership or indebtedness of a person, to which is attached a right to vote on the management or policymaking of that person and includes any security convertible into or evidencing a right to acquire such a voting security.
History: Laws 1984, ch. 127, § 617; 1993, ch. 320, § 71; 1996, ch. 73, § 1; 1997, ch. 248, § 1; 1999, ch. 289, § 30; 2014, ch. 59, § 29.
ANNOTATIONSThe 2014 amendment, effective July 1, 2014, added definitions to expand regulatory requirements involved in holding company transactions; in the introductory sentence, after "As used in", deleted "Chapter 59A, Article 37 NMSA 1978" and added "the Insurance Holding Company Law"; in Subsection C, in the second sentence, after "to vote or holds", added "proxies representing"; added Subsections D and E; and deleted former Subsection J, which defined "health maintenance organization" to mean a person who provides or arranges for the delivery of basic health care services to enrollees on a prepaid basis.
Severability. — Laws 2014, ch. 59, § 54 provided that if any part or application of the provisions of Laws 2014, ch. 59 is held invalid, the remainder or its application to other situations or persons shall not be affected.
The 1999 amendment, effective June 18, 1999, deleted "or a nonprofit medical and hospital service association" at the end of the definition of "insurer".
The 1997 amendment, effective June 20, 1997, in Subsection A, deleted "but is not limited to" following "includes", inserted "through licensing or franchise agreements," near the middle of the first sentence of Subsection C, and made minor stylistic changes throughout the section.
The 1996 amendment, added Subsection J and made stylistic changes. Laws 1996, ch. 73 contains no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, is effective May 15, 1996, 90 days after adjournment of the legislature. See Volume 14 NMSA 1978 for "Adjournment Dates of Sessions of Legislature" table.
The 1993 amendment, effective June 18, 1993, rewrote the introductory language; added Subsection A; redesignated former Subsection A as Subsection B; deleted former Subsection B, which defined "business entity"; substituted "Section 59A-37-19 NMSA 1978" for "Section 634 of this article" in Subsection C; inserted "joint stock company" in Subsection F; substituted "of that person" for "of that entity" in Subsection I; substituted "person" for "business entity" and "persons" for "business entities" throughout the section; and made minor stylistic changes throughout the section.