(1) No domestic insurer shall pay any extraordinary dividend or make any other extraordinary
distribution to its shareholders until (a) thirty days after the director has received
notice of the declaration thereof and the director has not within such period disapproved
such payment or (b) the director has approved such payment within such thirty-day
(2) For purposes of this section, an extraordinary dividend or distribution shall
include any dividend or distribution of cash or other property the fair market value
of which together with that of other dividends or distributions made within the preceding
twelve months exceeds the greater of (a) ten percent of such insurer's policyholders
surplus as of December 31 next preceding or (b) the net gain from operations of such
insurer if such insurer is a life insurer or the net income if such insurer is not
a life insurer, not including realized capital gains, for the twelve-month period
ending December 31 next preceding but shall not include pro rata distributions of
any class of the insurer's own securities. In determining whether a dividend or distribution is extraordinary, an insurer other
than a life insurer may carry forward net income from the previous two calendar years
that has not already been paid out as dividends. This carryforward shall be computed by taking the net income from the second and third
preceding calendar years, not including realized capital gains, less dividends paid
in the second and immediate preceding calendar years.
(3) Notwithstanding any other provision of law, an insurer may declare an extraordinary
dividend or distribution which is conditional upon the director's approval thereof,
and such a declaration shall confer no rights upon shareholders until (a) the director
has approved the payment of such a dividend or distribution or (b) the director has
not disapproved such payment within the thirty-day period referred to in subsection
(1) of this section.
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