(a) A request for
approval of an extraordinary dividend or an extraordinary distribution to
shareholders must 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 that valuation;
(4) a work paper showing the calculations
used to determine whether the proposed dividend is extraordinary; the work
paper must include the following information:
(A) the amounts, dates, and form of payment
of all dividends and distributions, including regular dividends but excluding
distributions of the insurer's own securities, paid or declared and unpaid
within the period of 12 consecutive months ending on the date fixed for payment
of the proposed dividend for which approval is sought and commencing on the day
after the same day of the same month in the previous year;
(B) policyholder surplus as of the 31st day
of the December preceding the date on which the request for dividend approval
is submitted;
(C) if the insurer is
a life insurer, the net gain from operations for the 12-month period ending the
31st day of the December preceding the date on which the request for dividend
approval is submitted;
(D) if the
insurer is not a life insurer, the net investment income for the 12-month
period ending the 31st day of the December preceding the date on which the
request for dividend approval is submitted and net income for each of the two
preceding 12-month periods;
(E) if
the insurer is not a life insurer, the dividends paid to stockholders,
excluding distributions of the insurer's own securities, in the two calendar
years preceding the calendar year in which the request for dividend approval is
submitted;
(5) a balance
sheet and statement of income for the period between the last annual statement
filed with the director and the end of the month preceding the month in which
the request for dividend approval is submitted;
(6) a brief statement as to the effect of the
proposed dividend upon the insurer's surplus, the reasonableness of surplus in
relation to the insurer's outstanding liabilities, and the adequacy of surplus
relative to the insurer's financial needs.
