NY Ins L § 4105 (2021)
2021 New York Laws ISC - Insurance Article 41 - Property/casualty Insurance Companies 4105 - Domestic Stock Companies; Declaration and Payment of Dividends.

§   4105.   Domestic  stock  companies;  declaration  and  payment  of dividends.  (a) Except as provided in subsection (c) of this section  no domestic  stock  property/casualty  insurance  company  shall declare or distribute any dividend to shareholders except out  of  earned  surplus. Notwithstanding  the foregoing, the superintendent may permit a domestic stock property/casualty insurance company to restate its earned  surplus under  a  plan of quasi-reorganization in accordance with regulations as may  be  promulgated  by   the   superintendent.   No   domestic   stock property/casualty  insurance  company  shall  declare  or distribute any dividend to shareholders which, together with all dividends declared  or distributed  by  it during the next preceding twelve months, exceeds the lesser of ten percent of its surplus to policyholders as  shown  by  its last  statement  on file with the superintendent, or one hundred percent of adjusted net investment income during such period unless, upon  prior application  therefor,  the  superintendent  approves a greater dividend distribution based  upon  his  finding  that  the  insurer  will  retain sufficient surplus to support its obligations and writings.   In this section, (1) "earned surplus" means the portion of the surplus that  represents  the net earnings, gains or profits, after deduction of all losses, that have  not  been  distributed  to  the  shareholders  as dividends,  or  transferred  to  stated  capital  or  capital surplus or applied to  other  purposes  permitted  by  law  but  does  not  include unrealized appreciation of assets;  (2) "adjusted  net  investment income" means net investment income for the twelve months immediately preceding the declaration or  distribution of  the  current  dividend  increased  by  the  excess,  if  any, of net investment income over dividends  declared  or  distributed  during  the period   commencing  thirty-six  months  prior  to  the  declaration  or distribution of the current dividend  and  ending  twelve  months  prior thereto; and  (3) "surplus"  means  the  amount  of the insurer's admitted assets in excess of its capital and liabilities, and both "surplus"  and  "surplus to  policyholders"  include any voluntary reserves, or any part thereof, which are not required by law.  (b) If the superintendent finds, after notice and  hearing,  that  any such  company has distributed any dividend in violation of this section, he may order the company to cease  doing  any  new  business  until  the amount  of  the dividend has been restored to the company. The directors of  any  such  company  who  vote  in  favor  of  the  declaration   and distribution  of  any  dividend  in  violation of this section shall, in addition to all other liabilities or penalties  prescribed  by  law,  be jointly  and  severally  liable to the creditors, including policyholder creditors, of the company to the extent of the dividend so declared  and distributed,  and every shareholder receiving any such dividend shall be liable to the creditors of the company to the  extent  of  the  dividend received by such shareholder.  (c)  Such  company  may declare and distribute a stock dividend to its shareholders whenever it shall have a surplus, as defined in  subsection (a)  hereof,  in an amount at least equal to the sum of the dividend and thirty percent of its unearned premium liability as shown  by  its  last statement  on  file  with  the superintendent and, for such purpose, the company may increase its capital stock from such surplus in  the  manner prescribed  in section one thousand two hundred six of this chapter, and it  shall  distribute  the  additional  or  increased   stock   to   its shareholders in proportion to the stock held by each, respectively.