382.210. Extraordinary dividend, notice of--payment from earned surplus, when--allowed, when.
Extraordinary dividend, notice of--payment from earned surplus,when--allowed, when.
382.210. 1. No insurer subject to registration under section 382.100shall pay any extraordinary dividend or make any other extraordinarydistribution to its shareholders until thirty days after the director hasreceived notice of the declaration thereof and has not within such perioddisapproved such payment, or the director has approved the payment withinsuch thirty-day period. For purposes of this section, net income excludesnet realized capital gains to the extent that realized capital gains exceedrealized capital losses, and an extraordinary dividend or distributionincludes any dividend or distribution of cash or other property, whose fairmarket value together with that of dividends or distributions made withinthe period of twelve consecutive months ending on the date on which theproposed dividends are scheduled for payment or distribution:
(1) For life, title, and property and casualty insurance companies,such amount exceeds the greater of ten percent of the insurer's surplus asregards policyholders as of the thirty-first day of December nextpreceding, or the net gain from operations of the insurer, if the insureris a life insurer, or the net investment income, if the insurer is a titleinsurer, or the net income, if the insurer is a property and casualtyinsurer, for the twelve-month period ending the thirty-first day ofDecember next preceding, but shall not include pro rata distributions ofany class of the insurer's own securities;
(2) For all other insurers, such amount exceeds the lesser of tenpercent of the insurer's surplus as regards policyholders as of thethirty-first day of December next preceding, or the net investment incomefor the twelve-month period ending the thirty-first day of December nextpreceding, but shall not include pro rata distributions of any class of theinsurer's own securities.
2. A life, title, or property and casualty insurer subject toregistration under section 382.100 may only pay a shareholder dividend fromearned surplus. With the prior approval of the director, a dividend may bedeclared from other than earned surplus.
3. No life, title, or property and casualty insurer subject toregistration under section 382.100 shall pay any extraordinary dividendunless, after the transaction is completed, the company's surplus asregards policyholders is reasonable in relation to the company'soutstanding liabilities and adequate to its financial needs. In makingthis determination, the director shall use the factors found in section382.200 and may consider:
(1) The quality of the company's earnings and the extent to which thereported earnings include extraordinary items; or
(2) The recent past and projected future trend in the company'ssurplus as regards policyholders.
4. Notwithstanding any other provision of law, an insurer may declarean extraordinary dividend or distribution which is conditional upon thedirector's approval thereof, and the declaration shall confer no rightsupon shareholders until the director has approved the payment of thedividend or distribution, or the director has not disapproved the paymentwithin the thirty-day period referred to above.
(L. 1971 S.B. 101 § 24, A.L. 1992 H.B. 1574, A.L. 1993 H.B. 709, A.L. 2004 H.B. 1198 merged with S.B. 1078)