N.Y. Insurance Law § 8003: Dividend practices

§ 8003. Dividend practices. (a) Following the effective date of the

plan, the reorganized insurer may, with respect to its participating

individual policies and contracts, either:

(1) continue the dividend practices of the reorganizing insurer;

(2) continue the dividend practices of the reorganizing insurer and

adopt such other dividend practices as, at the effective date or at any

time thereafter, may be permitted under applicable law or regulation or

approved by the superintendent; or

(3) adopt such other alternative with respect to dividend practices as

the superintendent may approve.

(b) Following the effective date of the plan, the reorganized insurer

shall, on or before the date on which the mutual holding company holds,

directly or indirectly through one or more stock holding companies, less

than seventy-five percent of the issued and outstanding voting stock of

the reorganized insurer, either:

(1) (A) establish a closed block, for policyholder dividend purposes

only, consisting of all of the participating individual policies and

contracts of the mutual life insurer or the reorganized insurer, as the

case may be, in force on the effective date and for which the insurer

had an experience-based dividend scale payable in the year of the

implementation date, to which closed block, on or before the

implementation date, shall be allocated assets of the insurer in an

amount that produces cash flows, together with anticipated revenues from

the closed block business, expected to be sufficient to support the

closed block business including provision for payment of claims and

those expenses and taxes specified in the terms for the establishment of

the closed block and to provide for continuation of the dividend

practices in effect on the effective date if the closed block is

established on or before the one hundred eightieth day after the

effective date, or otherwise the dividend practices in effect on the

implementation date, provided, however, that no policies or contracts

entering into force after the implementation date will be included in

the closed block, and provided, further, that, in determining dividend

practices of the reorganizing insurer, the superintendent shall review

dividend scales in effect for at least two years prior to the filing of

the reorganization plan; and

(B) the terms for the establishment of the closed block may provide

for conditions under which, with the approval of the superintendent, the

reorganized insurer may cease to maintain the closed block and

allocation of assets thereto, but regardless of such a cessation the

policies and contracts constituting closed block business shall remain

obligations of the reorganized insurer and any dividends on such

policies and contracts shall be determined and apportioned by the board

of directors of the reorganized insurer in accordance with the terms of

such policies and contracts and applicable provisions of this chapter;

or

(2) provide as to participating individual policies and contracts of

the reorganizing or reorganized insurer in such manner as the

superintendent may approve.

(c) The general terms for the establishment of the closed block or

such alternative provision under subsection (b) of this section and the

proposed dividend policy shall be included in the plan under section

eight thousand two of this article.

(d) The superintendent may appoint one or more consultants as the

superintendent shall reasonably deem necessary to advise the

superintendent regarding the proposed terms for the establishment of the

closed block or the alternative provision under subsection (a) or (b) of

this section; and the reorganizing insurer shall be responsible for the

reasonable fees and expenses of any such consultants.

(e) For purposes of this section, "implementation date" means the date

as of which the closed block is established, as specified in the terms

for the establishment of the closed block.