Section R. 500.90 - Extraordinary dividends and reporting of all dividendsRule 20.
(1) Requests for approval of extraordinary dividends or another extraordinary distribution to shareholders must include all of the following: (a) The amount of the proposed dividend.(b) The date established for payment of the dividend.(c) A statement as to whether the dividend is to be in cash or other property and, if in property, a description of the property, its cost, and its fair market value together with an explanation of the basis for valuation.(d) A copy of the calculations determining whether the proposed dividend is extraordinary. The work paper must include all of the following information:(i) The amounts, dates, and form of payment of all dividends or distributions, including regular dividends but excluding distributions of the insurers own securities, paid within the period of 12 consecutive months ending on the date fixed for payment of the proposed dividend for which approval is sought and commencing on the day after the same day of the same month in the last preceding year.(ii) Surplus as regards policyholders, which is the total capital and surplus, as of the preceding December 31.(iii) If the insurer is a life insurer, the net gain from operations for the 12-month period ending the preceding December 31.(iv) If the insurer is not a life insurer, the net income less realized capital gains for the 12-month period ending the preceding December 31 and the 2 preceding 12-month periods.(v) If the insurer is not a life insurer, the dividends paid to stockholders excluding distributions of the insurer's own securities in the preceding 2 calendar years.(e) A balance sheet and statement of income for the period intervening from the last annual statement filed with the director and the end of the month preceding the month in which the request for dividend approval is submitted.(f) A brief statement as to the effect of the proposed dividend upon the insurer's surplus and the reasonableness of surplus in relation to the insurer's outstanding liabilities and the adequacy of surplus relative to the insurer's financial needs.(2) Subject to section 1343(4) of the act, MCL 500.1343, a domestic insurer that is a member of an insurance holding company system and declares a shareholder dividend shall report the dividend to the director within 5 business days after declaring the dividend and not less than 10 business days before the payment.(3) Subject to section 1343(5) of the act, MCL 500.1343, an insurer subject to registration under section 1324 of the act, MCL 500.1324, shall not pay an extraordinary dividend or make another extraordinary distribution to its shareholders until 30 days after the director has received notice of the declaration and has not disapproved or has approved the payment within that period.(4) All filings pursuant to section 1343 of the act, MCL 500.1343, that either report the declaration of all dividends before payment or request approval of an extraordinary dividend must be directed to the attention of the Office of Insurance Financial and Market Regulation.Mich. Admin. Code R. 500.90
2024 MR 6, Eff. March 20, 2024