A. A domestic stock insurer shall not pay any cash dividend to stockholders except out of that part of its available and accumulated surplus funds otherwise unrestricted and derived from realized net operation profits and realized capital gains.
B. A cash dividend otherwise lawful may be so paid out of the insurer's earned surplus which is in excess of the amount of surplus required to be maintained by it under the Insurance Code.
C. A stock dividend may be paid out of any available surplus. Upon payment of a stock dividend the insurer shall transfer to its paid-in capital stock account funds equal to the aggregate of the par value of shares so distributed.
D. No dividend shall be declared or paid which would reduce the insurer's surplus funds below an amount reasonably required to sustain the insurer's normal operations currently and for the reasonably foreseeable future.
E. This section is subject to the provisions of Section 59A-37-22 NMSA 1978 relative to dividends by insurers which are subject to The Insurance Holding Company Law [Chapter 59A, Article 37 NMSA 1978].
History: Laws 1984, ch. 127, § 564; 1993, ch. 320, § 67.
ANNOTATIONSCross references. — For the Insurance Code, see 59A-1-1 NMSA 1978 and notes thereto.
The 1993 amendment, effective June 18, 1993, substituted "Section 59A-37-22" for "Section 637 of Article 37 of the Insurance Code" in Subsection E.
Am. Jur. 2d, A.L.R. and C.J.S. references. — 43 Am. Jur. 2d Insurance § 100.
44 C.J.S. Insurance § 127 et seq.