Mississippi Administrative Code › Title 19 - Department of Insurance › Part 1 - General › Chapter 18 - (89-105) Regulation of Corporation Allocations With Respect to Credit Insurers and Certain Insurance Holding Companies and Bank Deposits › Rule 19-1-18.05 - Regulation of Corporate Allocations, Dividends and Distributions

Current through June 25, 2024
A. Insurers engaged in credit insurance
				operations and credit insurance holding companies affiliated in any way with
				any such insurer, may make corporate allocations for or to the benefit of any
				class or series of stock or other equity interest in such insurer or credit
				insurance holding company which is issued to a creditor writing credit
				insurance business with the insurer. Permitted corporate allocations are only
				those with respect to common stock or other equivalent equity interests of
				surplus which remains after all corporate allocations to preferred
				stockholders; preferred stock if such corporate allocations provide a fixed or
				variable rate of return which is reasonably related to the investment by the
				creditor and the risk associated with the investment; or common or preferred
				stock which represents the actual consideration paid by a creditor for such
				interest or surplus arising from credit insurance business written by the
				creditor.
B. Insurers and credit
				insurance holding companies with more than one class or series of stock may
				make corporate allocations or dividends only in accordance with specific and
				express provisions set forth in the articles of association, articles of
				incorporation, bylaws or resolutions of the insurer or credit insurance holding
				company. Each insurer and credit insurance holding company must file copies of
				its articles, bylaws, and resolutions in the office of the Commissioner of
				Insurance of the State of Mississippi.
C. Insurers and credit insurance holding
				companies may pay dividends on or make distributions with respect to its shares
				of stock or other equity interests, including payments to redeem or purchase
				shares of stock or other equity interests, to any creditor only form corporate
				allocations made in accordance with this regulation to the benefit of the class
				or series of stock or other equity interest with respect to which the payment
				or distribution is made.
D. No
				insurer or credit insurance holding company shall make a distribution of
				capital and/or paid-in surplus with respect to any class or series of stock or
				other equity interest to any creditor, whether as a partial or complete
				distribution of the capital and/or paid-in surplus attributable to such stock
				or other equity interest, without notification to the creditor that the payment
				source of such distribution is the capital and/or paid-in surplus attributable
				to such stock or other equity interest along with an explanation of the effect
				of the distribution on the capital and/or paid-in surplus attributable to such
				stock or other equity interest.
E.
				No insurer or credit insurance holding company may recapitalize or reorganize
				its capital structure for the purpose of making available for dividends or
				distributions to creditors with respect to any class or series of its stock or
				other equity interest any of the capital and/or surplus which has been
				previously allocated to another class or series of its stock or other equity
				interest without prior approval of the Commissioner of Insurance.
F. No insurer shall make a dividend, either
				in cash or stock certificates, except from its actual net surplus computed as
				required by law in its annual statements. No such dividend may be paid unless
				and until the insurer has filed with the Commissioner the annual statement of
				the insurer for the year(s) in which such surplus was earned.
G. Dividends or distributions to be paid to
				stockholders, once declared by the board of directors of an insurer or credit
				insurance holding company, are charged directly to unassigned surplus and must
				be carried as a liability of such insurer or credit insurance holding company
				until paid. An approval or ratification of corporate allocations by the board
				of directors of an insurer or credit insurance holding company shall not
				constitute a dividend or distribution.
H. The Commissioner of Insurance hereby
				reserves the right, after notice and hearing, to declare corporate allocation
				or dividend methods or other equity interest programs, other than those which
				conform to the requirements of this Regulation and statutes of the State of
				Mississippi, to be in violation of in Mississippi Code of 1972, Annotated,
				Title 83, Chapter 53, Section 25, and to order and require appropriate remedial
				action, including, but not limited to, rescission of the sale of such stock or
				other equity interest and penalties and fines provided in the statutes of the
				State of Mississippi.
Miss. Code Ann. §
										83-53-25
				  (Rev. 2011)