Utah Code 31A-5-418. Dividends and other distributions

(1)

Subject to the requirements of Section 16-10a-842 and Subsection 31A-16-106(2), a stock corporation may make distributions under Section 16-10a-640 if all the following conditions are satisfied:

Terms Used In Utah Code 31A-5-418

Insurance: includes :

(i)	a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;

(ii)	a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and

(iii)

a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301

Order: means an order of the commissioner. See Utah Code 31A-1-301

Property: includes both real and personal property. See Utah Code 68-3-12.5

Surplus: means the excess of assets over the sum of paid-in capital and liabilities. See Utah Code 31A-1-301

Total adjusted capital: means the sum of an insurer's or health organization's statutory capital and surplus as determined in accordance with:

(a)	the statutory accounting applicable to the annual financial statements required to be filed under Section 31A-4-113; and

(b)	another item provided by the RBC instructions, as RBC instructions is defined in Section 31A-17-601. See Utah Code 31A-1-301
(a)	A dividend may not be paid that would reduce the insurer’s total adjusted capital below the insurer’s company action level RBC as defined in Subsection 31A-17-601(8)(b).

(b)	Except as to excess surplus, or unless the commissioner issues an order allowing otherwise, a dividend may not be paid that exceeds the insurer’s net gain from operations or net income for the period ending December 31 of the preceding year.

(2)	Title 67, Chapter 4a, Revised Uniform Unclaimed Property Act, applies to unclaimed dividends and distributions in insurance corporations.

Amended by Chapter 116, 2001 General Session

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