692C.390 - Extraordinary distributions to shareholders: Notice; approval.
692C.390 Extraordinary distributions to shareholders: Notice; approval.
1. An insurer subject to registration under NRS 692C.260 to 692C.350, inclusive, shall not pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until:
(a) Thirty days after the Commissioner has received notice of the declaration thereof and has not within that period disapproved the payment; or
(b) The Commissioner approves the payment within the 30-day period.
2. A request for approval of an extraordinary dividend or any other extraordinary distribution pursuant to subsection 1 must include:
(a) A statement indicating the amount of the proposed dividend or distribution;
(b) The date established for the payment of the proposed dividend or distribution;
(c) A statement indicating whether the proposed dividend or distribution is to be paid in the form of cash or property and, if it is to be paid in the form of property, a description of the property, its cost and its fair market value together with an explanation setting forth the basis for determining its fair market value;
(d) A copy of a work paper or other document setting forth the calculations used to determine that the proposed dividend or distribution is extraordinary, including:
(1) The amount, date and form of payment of each regular dividend or distribution paid by the insurer, other than any distribution of a security of the insurer, within the 12 consecutive months immediately preceding the date established for the payment of the proposed dividend or distribution;
(2) The amount of surplus, if any, as regards policyholders, including total capital and surplus, as of December 31 next preceding;
(3) If the insurer is a life insurer, the amount of any net gains obtained from the operations of the insurer for the 12-month period ending December 31 next preceding;
(4) If the insurer is not a life insurer, the amount of net income of the insurer less any realized capital gains for the 12-month period ending on the December 31 of the year next preceding and the two consecutive 12-month periods immediately preceding that period; and
(5) If the insurer is not a life insurer, the amount of each dividend paid by the insurer to shareholders, other than a distribution of any securities of the insurer, during the preceding 2 calendar years;
(e) A balance sheet and statement of income for the period beginning on the date of the last annual statement filed by the insurer with the Commissioner and ending on the last day of the month immediately preceding the month in which the insurer files the request for approval; and
(f) A brief statement setting forth:
(1) The effect of the proposed dividend or distribution upon the insurer’s surplus;
(2) The reasonableness of the insurer’s surplus in relation to the insurer’s outstanding liabilities; and
(3) The adequacy of the insurer’s surplus in relation to the insurer’s financial requirements.
3. Each insurer specified in subsection 1 that pays an extraordinary dividend or makes any other extraordinary distribution to its shareholders shall, within 15 days after declaring the dividend or making the distribution, report that fact to the Commissioner. The report must include the information specified in paragraph (d) of subsection 2.
(Added to NRS by 1973, 1047; A 2003, 3328)