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304.15-100 Dividends.
(1)
(2)
(3)
(4)
There shall be a provision in participating policies that, beginning not later than the
end of the third policy year, the insurer shall annually ascertain and apportion the
divisible surplus, if any, that will accrue on the policy anniversary or other dividend
date specified in the policy provided the policy is in force and all premiums to that
date are paid. Except as hereinafter provided, any dividend becoming payable shall
at the option of the party entitled to elect such option be either:
(a) Payable in cash, or
(b) Applied to any one (1) of such other dividend options as may be provided by
the policy. If any such other dividend options are provided, the policy shall
further state which option shall be automatically effective if such party shall
not have elected some other option. If the policy specifies a period within
which such other dividend option may be elected, such period shall be not less
than thirty (30) days following the date on which such dividend is due and
payable. The annually apportioned dividend shall be deemed to be payable in
cash within the meaning of paragraph (a) of this subsection even though the
policy provides that payment of such dividend is to be deferred for a specified
period, provided such period does not exceed six (6) years from the date of
apportionment and that interest will be added to such dividend at a specified
rate.
Renewable term policies of ten (10) years or less may provide that the surplus
accrued to such policies shall be determined and apportioned each year after the
second policy year, and accumulated during each renewal period, and that at the end
of the renewal period, on renewal of the policy by the insured, the insurer shall
apply the accumulated surplus as an annuity for the next succeeding renewal term in
the reduction of premiums.
In participating industrial life insurance policies, in lieu of the provision required in
subsection (1) of this section, there shall be a provision that, beginning not later
than the end of the fifth policy year, the policy shall participate annually in the
divisible surplus, if any, in the manner set forth in the policy.
This section does not apply as to insurance issued in consideration of lapsed or
surrendered policies.
Effective: June 18, 1970
History: Created 1970 Ky. Acts ch. 301, subtit. 15, sec. 10, effective June 18, 1970.
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