§ 27-43-12 - Limitations on dividends. - Rhode Island Statutes

SECTION 27-43-12

   § 27-43-12  Limitations on dividends.– (a) An "extraordinary dividend or distribution" is defined as cash or otherproperty, whose fair market value together with other dividends ordistributions made within the preceding twelve (12) months exceeds the lesserof: (1) ten percent (10%) of the captive insurance company's surplus as of thepreceding December 31st; or (2) net income, not including realized capitalgains for the twelve (12) months ending the preceding December 31st, excludingpro rata distribution of any class of the captive insurance company's ownsecurities.

   (b) Each captive insurance company may carry forward the netincome from the preceding two (2) years (as calculated in subsection (a) ofthis section for each year) less any dividends paid in the two (2) precedingyears in determining whether the dividend or distribution is extraordinary.