Section 40.18. Extraordinary dividends and other distributions.

  Requests for approval of extraordinary dividends or any other extraordinary distribution to shareholders shall include the following:

(1)  The amount of the proposed dividend;

(2)  The date established for payment of the dividend;

(3)  A statement as to whether the dividend is to be in cash or other property and, if in property, a description of the property, its cost, and its fair market value together with an explanation of the basis for valuation;

(4)  A copy of the calculations determining that the proposed dividend is extraordinary. The calculations shall include the following information:

(a) The amounts, dates and form of payment of all dividends or distributions, including regular dividends but excluding distributions of the insurer's own securities, paid within the period of 12 consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and commencing on the day after the same day of the same month in the previous calendar year;

(b) Policyholder surplus as of the 31st day of December of the immediately preceding calendar year;

(c) If the insurer is a life insurer, the net income less realized capital gains for the previous calendar year;

(d) If the insurer is not a life insurer, the net income less realized capital gains for the previous calendar year and the 2 calendar years preceding that calendar year; and

(e) If the insurer is not a life insurer, the dividends paid to stockholders excluding distributions of the insurer's own securities in the preceding 3 calendar years.

(5)  A balance sheet and statement of income for the period intervening from the last annual statement filed with the commissioner and the end of the month preceding the month in which the request for dividend approval is submitted.

(6)  A brief statement as to the effect of the proposed dividend upon the insurer's policyholder surplus and the reasonableness of policyholder surplus in relation to the insurer's outstanding liabilities and the adequacy of policyholder surplus relative to the insurer's financial needs.

History: Cr. Register, July, 1993, No. 451 , eff. 8-1-93.