2023 New York Laws › ISC - Insurance › Article 80 - Mutual Holding Company › 8003 - Dividend Practices.

§  8003.  Dividend  practices. (a) Following the effective date of the
plan, the reorganized insurer may, with  respect  to  its  participating
individual policies and contracts, either:
(1) continue the dividend practices of the reorganizing insurer;
(2)  continue  the  dividend practices of the reorganizing insurer and
adopt such other dividend practices as, at the effective date or at  any
time  thereafter, may be permitted under applicable law or regulation or
approved by the superintendent; or
(3) adopt such other alternative with respect to dividend practices as
the superintendent may approve.
(b) Following the effective date of the plan, the reorganized  insurer
shall,  on or before the date on which the mutual holding company holds,
directly or indirectly through one or more stock holding companies, less
than seventy-five percent of the issued and outstanding voting stock  of
the reorganized insurer, either:
(1)  (A)  establish a closed block, for policyholder dividend purposes
only, consisting of all of the  participating  individual  policies  and
contracts  of the mutual life insurer or the reorganized insurer, as the
case may be, in force on the effective date and for  which  the  insurer
had  an  experience-based  dividend  scale  payable  in  the year of the
implementation  date,  to  which  closed  block,  on   or   before   the
implementation  date,  shall  be  allocated  assets of the insurer in an
amount that produces cash flows, together with anticipated revenues from
the closed block business, expected to  be  sufficient  to  support  the
closed  block  business  including  provision  for payment of claims and
those expenses and taxes specified in the terms for the establishment of
the closed block  and  to  provide  for  continuation  of  the  dividend
practices  in  effect  on  the  effective  date  if  the closed block is
established on or  before  the  one  hundred  eightieth  day  after  the
effective  date,  or  otherwise  the dividend practices in effect on the
implementation date, provided, however, that no  policies  or  contracts
entering  into  force  after the implementation date will be included in
the closed block, and provided, further, that, in  determining  dividend
practices  of  the reorganizing insurer, the superintendent shall review
dividend scales in effect for at least two years prior to the filing  of
the reorganization plan; and
(B)  the  terms  for the establishment of the closed block may provide
for conditions under which, with the approval of the superintendent, the
reorganized  insurer  may  cease  to  maintain  the  closed  block   and
allocation  of  assets  thereto,  but regardless of such a cessation the
policies and contracts constituting closed block business  shall  remain
obligations  of  the  reorganized  insurer  and  any  dividends  on such
policies and contracts shall be determined and apportioned by the  board
of  directors of the reorganized insurer in accordance with the terms of
such policies and contracts and applicable provisions of  this  chapter;
or
(2)  provide  as to participating individual policies and contracts of
the  reorganizing  or  reorganized  insurer  in  such  manner   as   the
superintendent may approve.
(c)  The  general  terms  for the establishment of the closed block or
such alternative provision under subsection (b) of this section and  the
proposed  dividend  policy  shall  be included in the plan under section
eight thousand two of this article.
(d) The superintendent may appoint one  or  more  consultants  as  the
superintendent   shall   reasonably   deem   necessary   to  advise  the
superintendent regarding the proposed terms for the establishment of the
closed block or the alternative provision under subsection (a) or (b) of

this section; and the reorganizing insurer shall be responsible for  the
reasonable fees and expenses of any such consultants.
(e) For purposes of this section, "implementation date" means the date
as  of  which the closed block is established, as specified in the terms
for the establishment of the closed block.