(a)  An “extraordinary dividend or distribution” is defined as cash or other property whose fair market value together with other dividends or distributions made within the preceding twelve (12) months exceeds the lesser of: (1) Ten percent (10%) of the captive insurance company‘s surplus as of the preceding December 31; or (2) Net income, not including realized capital gains for the twelve (12) months ending the preceding December 31, excluding pro rata distribution of any class of the captive insurance company’s own securities.

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Terms Used In Rhode Island General Laws 27-43-12

  • Captive insurance company: means any subsidiary captive insurance company, association captive insurance company, or industrial insured captive insurance company formed or licensed under the provisions of this chapter, including a captive insurance company that is organized as a protected cell company under the Protected Cell Companies Act, chapter 64 of this title. See Rhode Island General Laws 27-43-1
  • Fair market value: The price at which an asset would change hands in a transaction between a willing, informed buyer and a willing, informed seller.

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

History of Section.
P.L. 1996, ch. 232, § 1; P.L. 1996, ch. 256, § 1.