Texas Administrative Code
Title 28 - INSURANCE
Part 1 - TEXAS DEPARTMENT OF INSURANCE
Chapter 7 - CORPORATE AND FINANCIAL REGULATION
Subchapter B - INSURANCE HOLDING COMPANY SYSTEMS
Section 7.213 - Form C
Universal Citation: 28 TX Admin Code § 7.213
Current through Reg. 50, No. 13; March 28, 2025
(a) Notice of Ordinary and Extraordinary Dividends and Other Distributions. Complete subsections (a) and (b) of this section for an Ordinary Dividend under § 7.203(o) of this title (relating to Registration of Insurers) and complete subsections (a) - (c) of this section for an Extraordinary Dividend under § 7.204(d) of this title (relating to Transactions Subject to Prior Notice).
(b) Dividend or distribution.
(1) Name of
insurer.
(2) Address of
insurer.
(3) Declaration of
dividend:
(A) Amount of declared dividend or
distribution: $
(B) Recipient of
declared dividend or distribution.
(C) Declaration date.
(D) Proposed payment date.
(4) The dividend or distribution
is in compliance with the Act and is indicated in subparagraphs (A) and (B) of
this paragraph:
(A) Calculation.
(i) Amount of current dividend or
distribution: $
(ii) Dividends or
distributions paid during preceding 12 months, excluding current dividend or
distribution but including declaration date, payment date, type of dividend or
distribution, and amount: $
(iii)
Total of (i) and (ii): $
(iv)
Surplus as regards policyholders (net worth for HMO) as of preceding December
31: $
(I) 10 percent of (iv) for Life,
P&C, and HMO: $
(II) 20 percent
of (iv) for Title: $
(v)
Operating income:
(I) Net gain from operations
before realized capital gains as of preceding December 31 for Life, Title and
HMO: $
(II) Net income as of
preceding December 31 for P&C: $
(vi) Greater of calculated surplus from (iv)
or the operating income from (v): $
(B) If the amount from (iii) exceeds the
amount from (vi), then provide the information required by subsection (c)
relating to extraordinary dividend and distribution.
(5) Earned surplus, defined as the unassigned
funds (surplus), must be greater than the current dividend or distribution
amount stated in (4)(A)(i) of this subsection. Earned surplus must be
calculated as of the most recent financial information available.
(6) Supporting documentation of the balance
sheet, summary of operations including capital and surplus account, and cash
flow statement of the most recently filed monthly, quarterly, or annual
statement, together with documentation to support the standards specified in
Insurance Code §
823.008.
(7) Additional requirements are as follows:
(A) Identify property, including bank
accounts, to be used to pay the dividend or distribution or to be converted to
pay the dividend or distribution.
(B) Provide insurer's ratio of net written
premium to capital and surplus for 12 months as of the end of the last calendar
year. In addition, provide the same ratio after deducting the total amount of
the present dividend or distribution.
(C) Identify and describe any reason (other
than general business trends) that earnings are expected to decrease.
(D) Identify any investment or contribution
by the insurer to subsidiaries made since the last calendar year or to be made
in the immediate future.
(E) Give a
brief statement as to the effect upon the insurer's capital and surplus or
HMO's net worth and the reasonableness of remaining capital and surplus or net
worth after payment of dividend or distribution in relation to the insurer's
outstanding liabilities and the adequacy of capital and surplus or net worth
relative to the insurer's financial needs.
(8) Certification that there has been no
material adverse change in the financial condition of the insurer since the
date of the most recent financial statement filed with the department and the
payment of the dividend or distribution does not adversely affect the interest
of policyholders.
(9) Certification
that the declaration or payment of the dividend or distribution does not
violate any of the provisions of Insurance Code Chapter 403 or §841.253,
as applicable, and that the amount of the dividend or distribution declared was
calculated based on the amount of cash and the current fair market value of any
other property to be paid or distributed.
(10) Signature.
(c) Extraordinary Dividend and Distribution.
(1) State purpose of dividend or
distribution.
(2) On request of the
commissioner, furnish a copy of directors' resolution declaring dividend and
any shareholders resolution supporting the declaration are to be attached to
this form.
(3) Effect of
declaration.
(A) Give the total amount of
dividend or distribution in dollars when so expressed, or if declared in some
other terms, the approximate dollar value and identify the exact property in
which the dividend or distribution is payable if not cash (include method of
valuing the property other than cash).
(B) Explain any difference in treatment and
basis with regard to any share of issued and outstanding stock that will not be
treated equally in distribution of dividend, excluding treatment of classes of
stock.
(C) Explain basis concerning
the different treatment in distribution of dividend given by class of
stock.
(D) Give number of shares by
class to whom proposed dividend is payable, the dividend per share of each
class and total amount of dividend by class of stock.
(E) By class of stock, give total amount of
each dividend declared, the amount payable per share, and the date of
declaration for the five calendar years preceding this notice.
(F) Give the net gain or loss from operations
after dividends to policyholders and federal income taxes, excluding capital
gains and losses of the insurer for each of the last five calendar years as
reported in the insurer's annual statement to the
department.
(4) Provide a
balance sheet, income statement, and cash flow statement for the interim period
from the last annual statement to the end of the month preceding the month in
which this application is submitted.
(5) Provide the National Association of
Insurance Commissioners authorized control level Risk Based Capital Ratio
before and after dividend or distribution and projected for year end and the
following year end.
(6) Explain any
restrictions on the volume of the insurer's underwritings within the last year
or in the immediate future that did not previously exist.
(7) Explain any limitations and reasons for
limitations established for geographical underwriting within the last year or
in immediate future that did not previously exist.
(8) Describe the existing reinsurance program
of insurer, including limits of retention.
(9) Identify and describe any deviation of
more than 10 percent in value of any loans or investments held by insurer
(other than replacement of maturing securities with comparable securities) from
that disclosed in your last annual statement.
(10) Signature and certification of the
following form is required:
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