New Mexico House Bill HB44

New Mexico 2023 Regular Session

• Introduced: 1/17/23
• Report Pass: 1/30/23
• Report Pass: 2/7/23
• Engrossed: 2/13/23
• Report Pass: 3/4/23

Caption

Federal Home Loan Banks

Impact

If enacted, HB44 would have significant implications for the rights and operations of federal home loan banks, particularly during the rehabilitation or liquidation of insurers. The legislation establishes that certain transactions made by these banks within a specified timeframe cannot be voided by a receiver, ensuring that federal home loan banks can assert their rights over collateral without the threat of retroactive annulment. This legal clarity is intended to bolster the stability of federal home loan banks and maintain their operational integrity during the financial distress of member insurers.

Summary

House Bill 44 seeks to amend the Insurers Conservation, Rehabilitation, and Liquidation Law in New Mexico. A key focus of this legislation is to clarify the status of federal home loan banks with respect to their rights regarding collateral pledged by insurers that enter delinquency proceedings. The primary goal is to provide specific rights to these banks in connection with secured claims against insurers that may undergo rehabilitation or liquidation under the state's insurance laws. This aims to protect federal home loan banks from losing their collateral during such proceedings.

Contention

One point of potential contention surrounding HB44 may involve the balance of power between insurance regulators and financial institutions like federal home loan banks. Critics may argue that the bill could create an uneven playing field favoring these banks over other creditors, potentially undermining consumer safeguards during the often complex and sensitive processes of insurer rehabilitation and liquidation. Therefore, stakeholders within the insurance sector might closely scrutinize how HB44 influences their rights and the obligations of the insurers, as well as the broader implications for insurance market stability.