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Bill Number: 3283 Ratification Number: 392 Act Number 370 Introducing Body: House Subject: Determination of extraordinary dividend or distributions
(A370, R392, H3283)
AN ACT TO AMEND SECTION 38-21-270, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO NOTICE AND APPROVAL OF EXTRAORDINARY DIVIDENDS OR DISTRIBUTIONS BY DOMESTIC INSURERS BEING REQUIRED, SO AS TO REVISE WHAT CONSTITUTES AN EXTRAORDINARY DIVIDEND OR DISTRIBUTION AND THE MANNER IN WHICH AN EXTRAORDINARY DIVIDEND OR DISTRIBUTION IS DETERMINED FOR PURPOSES OF THIS SECTION.
Be it enacted by the General Assembly of the St,ate of South Carolina:
Determination of extraordinary dividend or distributions
SECTION 1. Section 38-21-270 of the 1976 Code is amended to read:
"Section 38-21-270. No domestic insurer shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until (i) the Commissioner has approved the payment or (ii) the Commissioner has not disapproved the payment within thirty days after receiving notice of the declaration.
For purposes of this section, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value together with that of other dividends or distributions made within the preceding twelve months exceeds the greater of (a) ten perCent of the insurer's surplus as regards policyholders as of the previous December thirty-first, or (b) the net gain from operations of the insurer, if the insurer is a life insurer, or the net investment income, the insurer is not a life insurer not including realized capital gains, for the year ending the previous December thirty-first but does not include pro rata distributions of any class of the insurer's own securities.
An insurer may declare an extraordinary dividend or distribution which is conditional upon the Commissioner's approval. The declaration confers no rights upon shareholders until (1) the Commissioner has approved the payment of the dividend or distribution or (2) the Commissioner has not disapproved the payment within thirty days after receiving notice of the declaration."
SECTION 2. This act takes effect upon approval by the Governor.