A. For purposes of the Risk-Based Capital Act, “regulatory action level event” means any of the following events:

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(1)     the filing of a risk-based capital report by an insurer or health organization that indicates that the insurer’s or health organization’s total adjusted capital is greater than or equal to its authorized control level risk-based capital but less than its regulatory action level risk-based capital;

(2)     the superintendent’s notification to an insurer or health organization that its adjusted risk-based capital report indicates the existence of an event described in Paragraph (1) of this subsection, unless the insurer or health organization challenges the adjusted report pursuant to Section 59A-5A-8 N.M. Stat. Ann.;

(3)     if an insurer or health organization challenges the adjusted risk-based capital report, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge;

(4)     an insurer’s or health organization’s failure to file a risk-based capital report by the filing date, unless the insurer or health organization has provided an explanation satisfactory to the superintendent and has cured the failure within ten days after the filing date;

(5)     an insurer’s or health organization’s failure to submit a risk-based capital plan to the superintendent by the date specified in Subsection C of Section 59A-5A-4 N.M. Stat. Ann.;

(6)     the superintendent’s notification to an insurer or health organization that: (a) the risk-based capital plan or revised risk-based capital plan submitted by the insurer or health organization is, in the superintendent’s judgment, unsatisfactory;

and (b) the notification constitutes a regulatory action level event with respect to the insurer or health organization, unless the insurer or health organization has challenged the determination pursuant to Section 59A-5A-8 N.M. Stat. Ann.;

(7)     if an insurer or health organization challenges the superintendent’s determination made pursuant to Paragraph (6) of this subsection, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge;

(8)     the superintendent’s notification to an insurer or health organization that the insurer or health organization has failed to adhere to its risk-based capital plan or revised risk-based capital plan and that the failure has had or will have a substantial adverse effect on the ability of the insurer or health organization to eliminate the company action level event, unless the insurer or health organization has challenged the determination pursuant to Section 59A-5A-8 N.M. Stat. Ann.; or

(9)     if an insurer or health organization challenges the superintendent’s determination made pursuant to Paragraph (8) of this subsection, notification to the insurer or health organization that the superintendent has, after hearing, rejected the challenge.

B. In the event of a regulatory action level event, the superintendent shall:

(1)     require the insurer or health organization to prepare and submit a risk- based capital plan or, if applicable, a revised risk-based capital plan;

(2)     perform such examination or analysis as the superintendent deems necessary of the assets, liabilities and operations of the insurer or health organization, including a review of its risk-based capital plan or revised risk-based capital plan; and

(3)     subsequent to the examination or analysis, issue an order specifying such corrective actions as the superintendent determines are required.

C. In determining corrective actions, the superintendent may take into account such factors as are deemed relevant based upon the superintendent’s examination or analysis of the assets, liabilities and operations of the insurer or health organization, including the results of any sensitivity tests undertaken pursuant to the risk-based capital instructions. The risk-based capital plan or revised risk-based capital plan shall be submitted on or before the later of the following dates:

(1)     forty-five days after the occurrence of the regulatory action level event; or

(2)     if the insurer or health organization challenges an adjusted or revised risk- based capital report or plan pursuant to Section 59A-5A-8 N.M. Stat. Ann. and the challenge is not frivolous in the superintendent’s judgment, forty-five days after notification to the insurer or health organization that the superintendent has, after hearing, rejected the insurer’s or health organization’s challenge.

D. The superintendent may retain actuaries and investment experts and other consultants as the superintendent deems necessary to review the insurer’s or health organization’s risk-based capital plan or revised risk-based capital plan, examine or analyze the assets, liabilities and operations of the insurer or health organization and formulate the corrective order with respect to the insurer or health organization. The fees, costs and expenses incurred by consultants shall be paid by the affected insurer or health organization or such other party as the superintendent directs.