§ 10-12-409 — Dividends

(1) The board of directors or trustees of any company
which is subject to the provisions of this part 4 and which writes life, accident, or
accident and health insurance may declare dividends to its members.

(2) After retaining sufficient funds for the payment by the company of all
outstanding policy and other obligations, the board of directors or trustees of any
company which is subject to the provisions of this article and which writes casualty,
fidelity and surety, fire, elements and marine, or similar insurance may from time to
time fix and determine the amount of dividends payable, or of unabsorbed or
unused premiums or premium deposits to be returned, to each policyholder, may
establish reasonable classifications or groupings of policyholders and plans for the
distribution of such dividends or refunds upon each general kind of insurance or
groups or classes thereof, and may establish reasonable territorial divisions upon
policies expiring during a fixed period.

(3) The declaration and payment of dividends by any company subject to the
provisions of this part 4 shall be subject to the following conditions:

(a) No dividends shall be declared or paid at any time except out of the
earned, as distinguished from contributed, surplus nor when the surplus of the
company is less than the original surplus required for the kind or kinds of insurance
the company is authorized to write nor when the payment of such dividends will
reduce its surplus to less than such amount.

(b) No dividends shall be declared or paid contrary to any restriction
contained in the articles of incorporation.

Legislative History

Source: L. 91: Entire part added, p. 1221, � 1, effective May 24.