Utah Admin. Code R590-70-20 - Extraordinary Dividends and Other Distributions

(1) A request for approval of an extraordinary dividend or any other extraordinary distribution to shareholders shall include the following:

(a) the amount of the proposed dividend;

(b) the date established for payment of the dividend;

(c) a statement as to whether the dividend is to be in cash or other property ;

(d) for dividends in property, the statement referenced in Subsection (1)(c) shall include:

(i) a description of the property;

(ii) the cost of the property;

(iii) the fair market value of the property; and

(iv) an explanation of the basis for the valuation of the property;

(e) a work paper that shall include the following information:

(i) the calculations used to determine that the proposed dividend is extraordinary;

(ii) the amounts of the proposed dividend;

(iii) the date of the proposed dividend;

(iv) the form of payment of all dividends or distributions, including regular dividends , except for distributions of the insurer's own securities that are paid within a consecutive 12-month period that:

(A) ends on the date fixed for payment of the proposed dividend for which approval is sought; and

(B) begins on the day after the same day of the same month in the last preceding year;

(v) surplus as regards policyholders, total capital and surplus, as of the 31st day of December next preceding;

(vi) for a life insurer, the net gain from operations for the 12-month period ending the 31st day of December next preceding;

(vii) for an insurer that is not a life insurer, the net income less realized capital gains for the 12-month period ending the 31st day of December next preceding and the two preceding 12-month periods; and

(viii) for an insurer that is not a life insurer, the dividends paid to stockholders in the preceding two calendar years, excluding distributions of the insurer's own securities ;

(f) a balance sheet and income statement for the period beginning on the date the last annual statement was filed with the commissioner and concluding at the end of the month preceding the month in which the request for dividend approval is submitted; and

(g) a brief statement regarding the proposed dividend's effect upon:

(i) the insurer's surplus and reasonableness of surplus in relation to the insurer's outstanding liabilities; and

(ii) the adequacy of the insurer's surplus relative to the insurer's financial needs.

(2)

(a) Subject to Subsection 31A-16-106(2), each registered insurer shall report to the commissioner all dividends and other distributions to shareholders within 15 business days of declaring the dividend or other distribution.

(b) The report to the commissioner in Subsection (2)(a) shall include the information required by Subsection (1)(e).

Notes

Utah Admin. Code R590-70-20

Adopted by Utah State Bulletin Number 2017-3, effective 1/10/2017 Amended by Utah State Bulletin Number 2021-21, effective 10/25/2021