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.
Cross 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.
Structure New Mexico Statutes
Article 34 - Domestic Stock and Mutual Insurers
Section 59A-34-1 - Scope of article.
Section 59A-34-2 - Application of general corporation statutes.
Section 59A-34-3 - Insurance business exclusive; exceptions.
Section 59A-34-4 - Incorporation.
Section 59A-34-6 - Amendment of articles of incorporation.
Section 59A-34-7 - Nonuser of corporate charter.
Section 59A-34-8 - Prohibited interest of officers, directors and employees in certain transactions.
Section 59A-34-9 - Salaries of officers, directors.
Section 59A-34-10 - Records and accounts.
Section 59A-34-11 - Vouchers for expenditures.
Section 59A-34-12 - Assets to be kept in state; exceptions.
Section 59A-34-13 - Removal, concealment of records, assets.
Section 59A-34-14 - Information to stockholders and proxy regulations.
Section 59A-34-15 - Information in advance of stockholder meetings.
Section 59A-34-16 - Solicitation of proxies.
Section 59A-34-17 - Management, compensation and agency contracts.
Section 59A-34-18 - Dividends to stockholders.
Section 59A-34-19 - Participating policies.
Section 59A-34-20 - Dividends to policyholders.
Section 59A-34-21 - Illegal dividends; penalty.
Section 59A-34-22 - Purchase of own shares by stock insurer.
Section 59A-34-23 - Borrowed capital funds.
Section 59A-34-24 - Mutual membership.
Section 59A-34-25 - Mutual members, corporate rights.
Section 59A-34-26 - Mutual insurer bylaws.
Section 59A-34-27 - Mutual members, quorum.
Section 59A-34-28 - Mutual members, contingent liability.
Section 59A-34-29 - Mutual members, levy of contingent liability.
Section 59A-34-30 - Mutual members, enforcement of contingent liability.
Section 59A-34-31 - Mutual insurers; nonassessable policies.
Section 59A-34-32 - Prohibited transactions.
Section 59A-34-33 - Unauthorized business in other states.
Section 59A-34-34 - Mutualization of stock insurer.
Section 59A-34-35 - Conversion to ordinary business corporation.
Section 59A-34-36 - Merger, consolidation of stock insurers.
Section 59A-34-37 - Preservation of old charter in merger, consolidation.
Section 59A-34-38 - Merger, consolidation of mutual insurers.
Section 59A-34-39 - Conversion of mutual to stock insurer.
Section 59A-34-40 - Bulk reinsurance.
Section 59A-34-41 - Bulk reinsurance; fees and commissions.
Section 59A-34-42 - Expense to be borne by parties.
Section 59A-34-43 - Mutual member's share of assets on liquidation.