Rule 120-2-45-.15. Dividends to Stockholders

1. (1) Dividends Generally.

   All shareholder dividends or distributions shall be filed with the Commissioner for approval using the form provided by the Commissioner at least thirty (30) days prior to the proposed payment or distribution date. No dividend payment or distribution can be made unless the Commissioner approved the payment or the Commissioner does not object to the payment or distribution prior to the lapse of the thirty (30) days' notice period.

2. (2) Extraordinary Dividends.

   1. (a) For purposes of this Rule, an "extraordinary dividend" means any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding twelve (12) months exceeds the lesser of ten percent (10%) of such company's surplus or retained earnings with regard to policyholders as of December 31 next preceding, or the net income, not including realized capital gains, for the twelve (12) month period ending December 31 next preceding. Extraordinary dividend shall not include pro rata distributions of any class of the company's own securities.
   2. (b) No company shall pay or distribute any extraordinary dividend until the Commissioner approves the proposed extraordinary dividend in writing.

3. (3) Rejection Due To Hazardous Financial Condition.

   The Commissioner may reject any proposed dividend if he or she finds that the dividend or distribution would create a hazardous financial condition. For the purposes of this Regulation the standards set forth in Regulation 120-2-54-.03 to determine the existence of a hazardous condition may be relied upon by the Commissioner to determine if, after giving effect to the propose dividend or distribution, the company would create a hazardous financial condition.

Editor's Note: In accordance with O.C.G.A. Section 50-13-21, the contents of this Rule is not filed with or published by the Secretary of State; only names and designations are filed, printed and distributed. This Regulation is on file in the Office of Commissioner of Insurance and is open for public examination and copying. (See Editor's Note, p. 88.03.)Note: "Editor's Note" rescinded. Eff. October 11, 2015.

Authority: O.C.G.A. § 33-41-23.

History. Original Rule entitled "Dividends to Stockholders" f. Feb. 9, 1989; eff. Mar. 1, 1989, as specified by the Agency.

Repealed: New Rule of same title adopted. F. Sep. 21, 2015; eff. Oct. 11, 2015.