A. The control of a domestic insurer by a person does not relieve the insurer's officers and directors of an obligation or a liability to which they are otherwise subject by law. An insurer shall be managed so that its separate operating identity is consistent with the Insurance Holding Company Law.
B. Nothing in this section precludes a domestic insurer from participating in a common management function, a cooperative or the joint use of personnel if that participation meets the standards of Subsection A of Section 59A-37-20 NMSA 1978.
C. At least two-thirds of the directors and two-thirds of the members of each committee of the board of directors of a domestic insurer shall not be officers or employees of the insurer or of an entity that controls, is controlled by or is under common control with the insurer and shall not be beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one person in that group of two-thirds of the directors shall be present prior to the transaction of business at a meeting of the board of directors or a committee of the board of directors.
D. The board of directors of a domestic insurer shall establish at least one committee composed solely of directors who are not officers or employees of the insurer or of an entity that controls, is controlled by or is under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. The committee or committees shall:
(1) nominate the candidates for director, who shall be elected by the shareholders or policyholders;
(2) evaluate the performance of officers deemed to be principal officers of the insurer; and
(3) recommend to the board of directors the selection and compensation of the principal officers.
E. The provisions of Subsections C and D of this section do not apply to a domestic insurer if the person controlling the insurer, such as an insurer, a mutual insurance holding company or a publicly held corporation, has a board of directors and committees of the board of directors that meet the requirements of Subsections C and D of this section.
F. An insurer whose annual direct written and assumed premium, excluding premiums reinsured with the federal crop insurance corporation and the national flood insurance program, is less than three hundred million dollars ($300,000,000) may apply to the superintendent for a waiver from the requirements of this section. An insurer whose circumstances are unusual may apply to the superintendent for a waiver from the requirements of this section. In determining whether the insurer qualifies for a waiver, the superintendent may consider, among other factors, the insurer's type of business entity, the volume of its business written, the availability of qualified board members and its ownership or organizational structure.
History: 1978 Comp., § 59A-37-31, enacted by Laws 2014, ch. 59, § 45.
ANNOTATIONSEffective dates. — Laws 2014, ch. 59, § 55 made Laws 2014, ch. 59, § 45 effective July 1, 2014.
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.