§16-14-10 - Extraordinary dividends and other distributions.
§16-14-10 Extraordinary dividends and other distributions.
(a) Requests to the commissioner 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 the valuation;
(4) A copy of the calculations determining that the proposed dividend is extraordinary, including:
(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 during the previous twelve consecutive months;
(B) Surplus as regards policyholders (total capital and surplus) as of the preceding December 31;
(C) If the insurer is not a life insurer, the net income less realized capital gains for the twelve month period ending on the preceding December 31 and the two preceding twelve month periods; and
(D) If the insurer is not a life insurer, the dividends paid to stockholders, excluding distributions of the insurer's own securities in the preceding two calendar years;(5) A balance sheet and statement of income for the period between 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; and
(6) A brief statement as to the effect of the proposed dividend upon the insurer's surplus, the reasonableness of the surplus in relation to the insurer's outstanding liabilities, and the adequacy of the surplus relative to the insurer's financial needs.
(b) Subject to section 431:11-106(b), HRS, no insurer shall pay any extraordinary dividend or make any other distribution to its shareholders until:
(1) Thirty days after the commissioner has received notice of the declaration thereof and has not within the period disapproved the payment; or
(2) The commissioner shall have approved the payment within the thirty-day period.
(c) An insurer shall report to the commissioner all dividends and other distributions to shareholders made pursuant this section and section 431:11-106, HRS, within fifteen days following the payment.
[Eff 3/14/94; am and ren §16-14-9; 10/15/16] (Auth: HRS §§431:2-201, 431:11-109) (Imp: HRS §431:11-106)
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