S.D. Admin. R. 20:06:09:27

Current through Register Vol. 51, page 57, November 12, 2024

Section 20:06:09:27 - Information required of extraordinary dividends or other distributions

Requests for approval of extraordinary dividends or any other extraordinary distribution to shareholders must include the following:

(1) The amount of the proposed dividend;

(2) The information required by SDCL 58-5A-35 and 58-5A-36;

(3) A copy of the calculations determining that the proposed dividend is extraordinary which must 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 12 consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and starting on the day after the same day of the same month in the preceding year;

(b) Surplus as regards policyholders, including total capital and surplus as of the last December 31;

(c) Earned surplus, excluding surplus arising from unrealized capital gains or revaluation of assets as of the last December 31;

(d) If the insurer is a life insurer, the net gain from operations for the 12-month period ending the last December 31^st, including net realized capital gains in an amount not to exceed 20 percent of net unrealized capital gains;

(e) If the insurer is not a life insurer, the net income less realized capital gains in an amount not to exceed 20 percent of net unrealized capital gains for the 12 month period ending the last December 31 and the two preceding calendar years; and

(f) Evidence that the dividends paid to stockholders do not include pro rata distributions of any class of the insurer's own securities;

(4) A balance sheet and statement of income for the period intervening from the last annual statement filed with the director and the end of the month preceding the month in which the request for the dividend approval is submitted; and

(5) A brief statement as to the effect of the proposed dividend upon the insurers surplus and the reasonableness of surplus in relation to the insurers outstanding liabilities and the adequacy of surplus relative to the insurers financial needs.

Each registered insurer must file the information in this section pursuant to SDCL 58-5A-35 and 58-5A-36 with the director within 15 business days following the declaration of a dividend.

S.D. Admin. R. 20:06:09:27

20 SDR 36, effective 9/19/1993.

42 SDR 83, effective 12/3/2015

General Authority: SDCL 58-5A-70.

Law Implemented: SDCL 58-5A-35, 58-5A-36, 58-5A-54, 58-5A-70.