<html> <head> <title>Rule 20:06:23:03 Criteria for dividends.</title> <META NAME="Keywords" Content="Administrative Rules 20:06:23:03"> <META NAME="Description" Content="Administrative Rules 20:06:23:03 Criteria for dividends."> <meta name=Generator content="Microsoft Office HTML Filter 2.0"> <meta http-equiv=Content-Type content="text/html; charset=windows-1252"> <meta name=Originator content="Microsoft Word 10"> <style> <!-- --> </style> </head> <body lang=EN-US> <div> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>20:06:23:03.&nbsp;&nbsp;Criteria for dividends.</b> In determining whether any dividend should be paid, disallowed, or limited by an insurer, the director may consider the following:</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (1)&nbsp;&nbsp;If the insurer is in a hazardous financial condition under §&nbsp;20:06:23:02;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (2)&nbsp;&nbsp;If the insurer would become impaired, financially distressed or troubled, or insolvent after the payment;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (3)&nbsp;&nbsp;If the insurer could not meet its obligations;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4)&nbsp;&nbsp;If the insurer cannot meet the requirements of SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-5A-34">58-5A-34</A>;</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (5)&nbsp;&nbsp;If the insurer's surplus as regards policyholders is not reasonable in relation to the company's outstanding liabilities and adequate to its financial needs; or</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (6)&nbsp;&nbsp;If the dividends paid are reasonable based on the adequacy of the level of surplus remaining after the dividend payment or the quality of the company's earnings and the extent to which the reported earnings include extraordinary items, such as surplus relief reinsurance transactions and reserve destrengthening.</p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Source:</b> 19 SDR 160, effective April 27, 1993. </p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>General Authority:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-5A-70">58-5A-70.</A></p> <p>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <b>Law Implemented:</b> SDCL <A HREF="/statutes/DisplayStatute.aspx?Type=Statute&Statute=58-5A-70">58-5A-70.</A></p> </div> </body> </html>