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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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