Code of Massachusetts Regulations
211 CMR - DIVISION OF INSURANCE
Title 211 CMR 7.00 - Massachusetts Insurance Holding Company System
Section 7.08 - Extraordinary Dividends and Other Distributions

Universal Citation: 211 MA Code of Regs 211.7

Current through Register 1531, September 27, 2024

(1) Requests for approval of extraordinary dividends or any other extraordinary distribution to shareholders shall include the following:

(a) The amount of the proposed dividend or distribution;

(b) The date established for payment of the dividend or distribution;

(c) A statement as to whether the dividend or distribution is to be in cash or other property and, if in property, a description thereof, its cost, and its fair market value together with an explanation of the basis for valuation;

(d) A copy of the calculations determining that the proposed dividend or distribution is extraordinary. The work paper shall include the following information:
1. The amounts, dates and form of payment of all dividends paid or distributions made (including regular dividends but excluding distributions of the insurers own securities) within the period of 12 consecutive months ending on the date fixed for payment of the proposed dividend or distribution for which approval is sought and commencing on the day after the same day of the same month in the last preceding year;

2. Surplus as regards policyholders (total capital and surplus) and that portion of which constitutes unassigned funds, as of the 31st day of December next preceding;

3. If the insurer is a life insurer, the net gain from operations for the 12-month period ending the 31st day of December next preceding;

4. If the insurer 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

5. 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;

(e) A balance sheet and statement of income for the period intervening from 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

(f) A brief statement as to the effect of the proposed dividend upon the insurer's surplus and the reasonableness of surplus in relation to the insurer's outstanding liabilities and the adequacy of surplus relative to the insurer's financial needs.

(2) Subject to M.G.L. c. 175, § 206C(r), each registered insurer shall report to the Commissioner all dividends and other distributions to shareholders within five business days following the declaration thereof, and at least ten days, commencing from the date of the receipt by the Commissioner, prior to the payment thereof, including the same information required by 211 CMR 7.08(1)(d)1. through 4.

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