§ 4207. Dividends to shareholders of life, and accident and health\ninsurance companies. (a)(1) For purposes of this subsection, "earned\nsurplus" means an amount equal to an insurer's positive unassigned\nfunds, excluding eighty-five percent of the change in net unrealized\ncapital gains or losses less capital gains tax, for the immediately\npreceding calendar year as set forth in the insurer's most recent annual\nstatutory financial statement filed with the superintendent pursuant to\nsection three hundred seven of this chapter.\n (2) Notwithstanding paragraph five of this subsection, any domestic\nstock life insurance company may distribute a dividend to its\nshareholders out of earned surplus where the aggregate amount of such\ndividends in any calendar year does not exceed the greater of:\n (A) ten percent of its surplus to policyholders as of the immediately\npreceding calendar year; or\n (B) its net gain from operations for the immediately preceding\ncalendar year, not including realized capital gains, not to exceed\nthirty percent of its surplus to policyholders as of the immediately\npreceding calendar year; provided, however, that, notwithstanding this\nparagraph, in no event may a dividend be distributed without approval of\nthe superintendent, in accordance with paragraph five of this\nsubsection, in the calendar year immediately following a calendar year\nfor which its net gain from operations, not including realized capital\ngains, was negative.\n (3) Notwithstanding paragraph five of this subsection, any domestic\nstock life insurance company may distribute a dividend to its\nshareholders where the aggregate amount of such dividends in any\ncalendar year does not exceed the lesser of:\n (A) ten percent of its surplus to policyholders as of the immediately\npreceding calendar year; or\n (B) its net gain from operations for the immediately preceding\ncalendar year, not including realized capital gains.\n (4) An insurer shall not distribute a dividend pursuant to both\nparagraph two and paragraph three of this subsection.\n (5) Except as provided in paragraphs two and three of this subsection,\nno domestic stock life insurance company shall distribute any dividend\nto its shareholders unless a notice of its intention to declare such\ndividend and the amount thereof shall have been filed with the\nsuperintendent not less than thirty days in advance of such proposed\ndeclaration. The superintendent may disapprove such distribution by\ngiving written notice to such company within thirty days after such\nfiling that the superintendent finds that the financial condition of the\ncompany does not warrant such distribution.\n (6) With respect to dividends to shareholders distributed pursuant to\nparagraph two of this subsection, every domestic stock life insurance\ncompany shall report to the superintendent all such dividends within\nfive business days following the declaration thereof and at least ten\ndays prior to the payment thereof.\n (7) A domestic stock life insurance company's surplus to policyholders\nfollowing any distribution of dividends to its shareholders under\nparagraph two of this subsection shall be reasonable in relation to the\ncompany's outstanding liabilities and adequate to meet its financial\nneeds.\n (8) With respect to dividends to shareholders distributed pursuant to\nparagraph two of this subsection, the superintendent may limit or\ndisallow dividends if the superintendent determines that the:\n (A) domestic stock life insurance company's surplus to policyholders\nis not reasonable in relation to the company's outstanding liabilities\nand not adequate to meet its financial needs; or\n (B) domestic stock life insurance company is financially distressed or\ntroubled.\n (b) (1) Except as provided in paragraph three hereof, no domestic\nstock accident and health insurance company shall declare or distribute\nany dividend on its capital stock, except out of earned surplus, as\ndefined i
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