§ 8003 — Dividend practices

§ 8003. Dividend practices. (a) Following the effective date of the\nplan, the reorganized insurer may, with respect to its participating\nindividual policies and contracts, either:\n (1) continue the dividend practices of the reorganizing insurer;\n (2) continue the dividend practices of the reorganizing insurer and\nadopt such other dividend practices as, at the effective date or at any\ntime thereafter, may be permitted under applicable law or regulation or\napproved by the superintendent; or\n (3) adopt such other alternative with respect to dividend practices as\nthe superintendent may approve.\n (b) Following the effective date of the plan, the reorganized insurer\nshall, on or before the date on which the mutual holding company holds,\ndirectly or indirectly through one or more stock holding companies, less\nthan seventy-five percent of the issued and outstanding voting stock of\nthe reorganized insurer, either:\n (1) (A) establish a closed block, for policyholder dividend purposes\nonly, consisting of all of the participating individual policies and\ncontracts of the mutual life insurer or the reorganized insurer, as the\ncase may be, in force on the effective date and for which the insurer\nhad an experience-based dividend scale payable in the year of the\nimplementation date, to which closed block, on or before the\nimplementation date, shall be allocated assets of the insurer in an\namount that produces cash flows, together with anticipated revenues from\nthe closed block business, expected to be sufficient to support the\nclosed block business including provision for payment of claims and\nthose expenses and taxes specified in the terms for the establishment of\nthe closed block and to provide for continuation of the dividend\npractices in effect on the effective date if the closed block is\nestablished on or before the one hundred eightieth day after the\neffective date, or otherwise the dividend practices in effect on the\nimplementation date, provided, however, that no policies or contracts\nentering into force after the implementation date will be included in\nthe closed block, and provided, further, that, in determining dividend\npractices of the reorganizing insurer, the superintendent shall review\ndividend scales in effect for at least two years prior to the filing of\nthe reorganization plan; and\n (B) the terms for the establishment of the closed block may provide\nfor conditions under which, with the approval of the superintendent, the\nreorganized insurer may cease to maintain the closed block and\nallocation of assets thereto, but regardless of such a cessation the\npolicies and contracts constituting closed block business shall remain\nobligations of the reorganized insurer and any dividends on such\npolicies and contracts shall be determined and apportioned by the board\nof directors of the reorganized insurer in accordance with the terms of\nsuch policies and contracts and applicable provisions of this chapter;\nor\n (2) provide as to participating individual policies and contracts of\nthe reorganizing or reorganized insurer in such manner as the\nsuperintendent may approve.\n (c) The general terms for the establishment of the closed block or\nsuch alternative provision under subsection (b) of this section and the\nproposed dividend policy shall be included in the plan under section\neight thousand two of this article.\n (d) The superintendent may appoint one or more consultants as the\nsuperintendent shall reasonably deem necessary to advise the\nsuperintendent regarding the proposed terms for the establishment of the\nclosed block or the alternative provision under subsection (a) or (b) of\nthis section; and the reorganizing insurer shall be responsible for the\nreasonable fees and expenses of any such consultants.\n (e) For purposes of this section, "implementation date" means the date\nas of which the closed block is established, as specified in the terms\nfor the establishment of the closed block.\n