US Laws, Codes, Statutes & Cases

                                  TITLE  41
                                  INSURANCE
                                  CHAPTER 19
                           LIFE INSURANCE POLICIES
                            AND ANNUITY CONTRACTS
    41-1908.  DIVIDENDS. (1) 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 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 (a) above 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. If a participating policy provides that the benefit under any paid-up
nonforfeiture provision is to be participating, it may provide that any
divisible surplus becoming payable or apportioned while the insurance is in
force under such nonforfeiture provision shall be applied in the manner set
forth in the policy.
    (2)  In participating industrial life insurance policies, in lieu of the
provision required in subsection (1) above, 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.