2005 North Carolina Code - General Statutes § 58-7-130. Dividends and distributions to stockholders.

§ 58‑7‑130.  Dividends and distributions to stockholders.

(a)       Each domestic insurance company in North Carolina shall be restricted by the Commissioner from the payment of any dividends or other distributions to its stockholders whenever the Commissioner determines from examination of the company's financial condition that the payment of future dividends or other distributions would cause a hazardous financial condition, impair the financial soundness of the company or be detrimental to its policyholders, and those restrictions shall continue in force until the Commissioner specifically permits the payment of dividends or other distributions to stockholders by the company through a written authorization.

(b)       No domestic stock insurance company shall declare or pay dividends to its stockholders except from the unassigned surplus of the company as reflected in the company's most recent financial statement filed with the Commissioner under G.S. 58‑2‑165.

(c)       A transfer out of paid‑in and contributed surplus to common or preferred capital stock will be permitted on a case‑by‑case basis, with the Commissioner's prior approval, depending on the necessity for a company to make the transfer.

(d)       Nothing in this section and no action taken by the Commissioner in any way restricts the liability of stockholders under G.S. 58‑7‑125.

(e)       Dividends and other distributions paid to stockholders are subject to the requirements and limitations of G.S. 58‑19‑25(d) and G.S. 58‑19‑30(c). (1945, c. 386; 1991, c. 720, s. 9; 2001‑223, s. 5.2; 2002‑187, s. 2.5.)