Connecticut Administrative Code › Title 38a - Insurance Department › 138 - Insurance Holding Company Act › Section 38a-138-14 - Ordinary dividends; extraordinary dividends and other distributions

Current through July 10, 2024
(a) Notice of Ordinary Dividends. Any
			 domestic insurance company required, pursuant to section 38a-136(h) of the
			 Connecticut General Statutes, to notify the Commissioner of a dividend or other
			 distribution to its securityholders shall notify the Commissioner of the
			 proposed dividend or distribution in writing within five (5) business days
			 following declaration and no less than ten (10) business days prior to payment
			 thereof. The ten (10) day period shall begin the day the notice is received by
			 the Insurance Department. Such notice shall be deemed incomplete unless all the
			 information required by this section has been included therein. The domestic
			 insurance company shall provide to the Commissioner the information required
			 by, and in the format specified by, Form D-1 (Appendix D of sections
			 38a-138-1
			 to
			 38a-138-16,
			 inclusive, of the Regulations of Connecticut State Agencies).
(b) Approval of Extraordinary Dividends or
			 Other Extraordinary Distributions. Any domestic insurance company required,
			 pursuant to section 38a-136(f) of the Connecticut General Statutes, to notify
			 the Commissioner of an extraordinary dividend or other extraordinary
			 distribution to its stockholders shall notify the Commissioner of the proposed
			 dividend or distribution in writing within five (5) business days following
			 declaration and no less than thirty (30) days prior to payment thereof. The
			 thirty (30) day period shall begin the day the notice is received by the
			 Insurance Department. Such notice shall be deemed incomplete unless all the
			 information required by this section has been included therein. The domestic
			 insurance company shall file a request with the Commissioner for approval of
			 any extraordinary dividend or any other extraordinary distribution to
			 shareholders, and shall include the information required by, and in the format
			 specified by, Form D-1 (Appendix D of sections
			 38a-138-1
			 to
			 38a-138-16,
			 inclusive, of the Regulations of Connecticut State Agencies).
(c) Information Required. Notice of ordinary
			 dividends and requests for approval of extraordinary dividends or any other
			 extraordinary distribution to shareholders shall 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 thereof, its cost, and its fair market value
			 together with an explanation of the basis for valuation;
(4) A copy of the calculations determining
			 that the proposed dividend is extraordinary. The work paper shall include the
			 following information:
(A) The amounts, dates
			 and form of payment of all dividends or distributions (including regular
			 dividends but excluding distributions of the insurer's own securities) paid
			 within the period of twelve (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 last
			 preceding year;
(B) Surplus as
			 regards policyholders (total capital and surplus) as of the 31st day of
			 December next preceding;
(C) If the
			 insurer is a life insurer, the net gain from operations for the twelve (12)
			 month period ending the 31st day of December next preceding;
(D) If the insurer is not a life insurer, the
			 net income for the twelve (12) month period ending the 31st day of December
			 next preceding and the two preceding twelve (12) month periods; and
(E) 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 (2) calendar years.
(5) The insurer's most recent annual or
			 quarterly balance sheet and statement of income filed pursuant to section
			 38a-53 of the Connecticut General Statutes, a statement as to whether there has
			 been a material change in the financial condition of the insurer since such
			 financial report was filed with the Commissioner; and
(6)
(A) 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; and
(B) In the
			 case of a proposed payment of extraordinary dividends pursuant to section
			 38a-136(f) of the Connecticut General Statutes, the Commissioner may require
			 supplemental information in addition to the information required by Form D-1
			 (Appendix D of sections
			 38a-138-1
			 to
			 38a-138-16,
			 inclusive, of the Regulations of Connecticut State Agencies). Supplemental
			 information required by the Commissioner may include but is not limited to: a
			 statement in narrative form of the effects of the proposed dividends on the
			 company's most recent management discussion and analysis; a statement of
			 financial position; a statement of operations; a statement of cash flows; a
			 statement of changes in capital and surplus accounts; a statement in schedule
			 form of risk-based capital requirements; and a statement of significant trends
			 in reinsurance programs, premium volume and mix, losses, benefits, and general
			 expenses.