26.1-10-05.1. Dividends and other distribution

26.1-10-05.1. Dividends and other distribution

1. The board of directors of any company subject to this chapter may declare and the

company may pay dividends and other distributions on its outstanding shares and

cash, property, or its own shares and on its treasury stock in its own shares, subject to

the following provisions:

a. No dividend or other distribution may be declared or paid at any time except out

of earned, as distinguished from contributed, surplus, nor when the surplus of the

company is less than the surplus required by law for the kind or kinds of business

authorized to be transacted by the insurer, nor when the payment of a dividend or

other distribution would reduce its surplus to less than such amount.

b. Except in the case of share dividends, surplus for determining whether dividends

or other distributions may be declared may not include surplus arising from

unrealized appreciation in value, or revaluation of assets, or from unrealized

profits upon investments.

c. No dividend or other distribution may be declared or paid contrary to any

restriction contained in the articles of incorporation.

d. No dividend or other distribution may be declared or paid contrary to section

26.1-10-05.

2. No payment may be made to policyholders by way of dividends unless the insurer

possesses admitted assets in the amount of such payment in excess of its capital,

minimum required surplus, and all liabilities.