Rule 19-1-18.05 - Regulation of Corporate Allocations, Dividends and DistributionsA. 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.19 Miss. Code. R. 1-18.05
Miss. Code Ann. § 83-53-25 (Rev. 2011)