Pennsylvania Code › Title 31 - INSURANCE › Part I - General Provisions › Subpart B - Securities and Stock Transactions › Chapter 25 - RULES AND PROCEDURAL REQUIREMENTS FOR INSURANCE HOLDING COMPANY SYSTEMS › Section 25.22 - All dividends and other distributions

Current through Register Vol. 54, No. 28, July 13, 2024
(a) Under section 1404(e) of the act
				  (40
				  P. S. §
											991.1404(e)) a
				  registered insurer is required to report to the Department all dividends and
				  other distributions to shareholders within 5 business days following the
				  declaration thereof and at least 10 days, commencing from the date of receipt
				  by the Department, prior to payment thereof. The report shall include the
				  information set forth in section 1404(e) of the act and subsection (c)(1)-(6)
				  except that the information set forth in subsection (c)(6) is not required for
				  dividends other than dividends reported under section 1405(b) of the act
				  (40
				  P. S. §
											991.1405(b))
				  and dividends and other distributions filed under section
				  337.8 of the act (40 P. S. §
											459.8).
(b) Under section
				  337.8 of the act a domestic
				  insurance company, association or exchange may pay dividends and other
				  distributions to shareholders only out of unassigned funds as defined in
				  section 337.8(e) of the
				  act or upon approval of the Commissioner. Information filed with the
				  Commissioner under section
				  337.8 of the act shall include the
				  information set forth in subsection (c)(1)-(6).
(c) Requests for approval of extraordinary
				  dividends or another extraordinary distribution to shareholders under section
				  1405(b) of the act shall include the following:
(1) The amount of the proposed dividend or
				  other distribution.
(2) The date
				  established for payment of the dividend or other distribution.
(3) A statement as to whether the dividend or
				  other distribution 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 or other distribution is or is not extraordinary.
				  The work paper shall include the following information with respect to the
				  domestic insurer:
(i) The amounts, dates and
				  form of payment of all dividends and other distributions made within the
				  previous 12 consecutive months ending on the date fixed for payment of the
				  proposed dividend and commencing on the day after the same day of the same
				  month in the last preceding year.
(ii) Surplus, total capital and surplus, as
				  of the 31st day of December next preceding.
(iii) The net income for the 12-month period
				  ending the 31st of December next preceding.
(5) A statement demonstrating the
				  transaction's compliance with section 1405(d) of the act by describing the
				  effect of the proposed dividend or other distribution 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.
(6) A balance
				  sheet and statement of income for the period intervening from the last annual
				  statement filed with the Commissioner and the end of the month preceding the
				  month in which the request for dividend or other distribution approval is
				  submitted.