A. Any insurer failing, without just cause, to file any registration statement as required in the Insurance Holding Company Law shall be required, after notice and hearing, to pay a penalty of fifty dollars ($50.00) for each day's delay, not to exceed a total penalty of ten thousand dollars ($10,000). The superintendent may reduce the penalty if the insurer demonstrates to the superintendent that the imposition of the penalty would constitute a financial hardship to the insurer.

B. Every director or officer of an insurance holding company system who knowingly violates, participates in, or assents to, or who knowingly permits any officer or agent of the insurer to engage in transactions or make investments that have not been properly reported or submitted pursuant to Section 59A-37-11 NMSA 1978, Subsection B of Section 59A-37-20 NMSA 1978 or Section 59A-37-22 NMSA 1978, or that violate the Insurance Company Holding Law, shall pay, in their individual capacity, a penalty of not more than ten thousand dollars ($10,000) per violation, after notice and hearing before the superintendent. In determining the amount of the penalty, the superintendent shall take into account the appropriateness of the penalty with respect to the gravity of the violation, the history of previous violations and such other matters as justice may require.

C. Whenever it appears to the superintendent that any insurer subject to the provisions of the Insurance Holding Company Law or any director, officer, employee or agent thereof has engaged in any transaction or entered into a contract that is subject to the provisions of Sections 59A-37-20 through 59A-37-22 NMSA 1978 and that would not have been approved had the approval been requested, the superintendent may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the superintendent may also order the insurer to void any contracts and restore the status quo if the action is in the best interest of the policyholders, creditors or the public.

D. Whenever it appears to the superintendent that an insurer or any director, officer, employee or agent thereof has committed a willful violation of the Insurance Holding Company Law, the superintendent may cause criminal proceedings to be instituted in the district court for the county in which the principal office of the insurer is located or, if the insurer has no such office in the state, then in the district court for Santa Fe county against the insurer or the responsible director, officer, employee or agent thereof. Any insurer that willfully violates that law may be fined not more than twenty thousand dollars ($20,000). Any individual who willfully violates that law may be fined not more than ten thousand dollars ($10,000).

E. Any officer, director or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the superintendent in the performance of the superintendent's duties under the Insurance Holding Company Law, upon conviction thereof, shall be imprisoned for not more than twenty years or fined not more than one million dollars ($1,000,000), or both. Any fines imposed shall be paid by the officer, director or employee in the officer's, director's or employee's individual capacity.

F. If the superintendent suspects that a person has violated a provision of Sections 59A-37-4 through 59A-37-10 NMSA 1978, and if that violation prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation alone may provide the basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with the Insurers Conservation, Rehabilitation and Liquidation Law [Chapter 59A, Article 41 NMSA 1978].

History: Laws 1984, ch. 127, § 641; 1993, ch. 320, § 87; 2014, ch. 59, § 42.

The 2014 amendment, effective July 1, 2014, authorized the superintendent to disapprove dividends or distributions and to place insurers under supervision if the superintendent suspects a person has violated provisions of the Insurance Holding Company Law; and added Subsection F.

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 1993 amendment, effective June 18, 1993, added Subsections A, B, and C; designated the former section as Subsection D; in Subsection D, in the first sentence, substituted "committed a willful violation of Chapter 59A, Article 37, NMSA 1978" for "committed a wilful violation of this article" and made a stylistic change, and rewrote the second and third sentences; and added Subsection E.

Am. Jur. 2d, A.L.R. and C.J.S. references. — 43 Am. Jur. 2d Insurance §§ 59, 180.

44 C.J.S. Insurance §§ 96, 97.