Utah Code 31A-5-420. Payment of dividends by mutual insurers
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(1) When it is in the best interests of the company, the directors of a domestic mutual insurer shall declare, apportion, and pay to its members dividends from its net savings and earnings.
Terms Used In Utah Code 31A-5-420
- Insurance: includes :(96)(b)(i) a risk distributing arrangement providing for compensation or replacement for damages or loss through the provision of a service or a benefit in kind;(96)(b)(ii) a contract of guaranty or suretyship entered into by the guarantor or surety as a business and not as merely incidental to a business transaction; and(96)(b)(iii) a plan in which the risk does not rest upon the person who makes an arrangement, but with a class of persons who have agreed to share the risk. See Utah Code 31A-1-301
- Mutual: means a mutual insurance corporation. See Utah Code 31A-1-301
- Participating: means a plan of insurance under which the insured is entitled to receive a dividend representing a share of the surplus of the insurer. See Utah Code 31A-1-301
- Policy: includes a service contract issued by:
(150)(b)(i) a motor club under Chapter 11, Motor Clubs;(150)(b)(ii) a service contract provided under Chapter 6a, Service Contracts; and(150)(b)(iii) a corporation licensed under:(150)(b)(iii)(A) Chapter 7, Nonprofit Health Service Insurance Corporations; or(150)(b)(iii)(B) Chapter 8, Health Maintenance Organizations and Limited Health Plans. See Utah Code 31A-1-301- Premium: includes , however designated:
(156)(b)(i) an assessment;(156)(b)(ii) a membership fee;(156)(b)(iii) a required contribution; or(156)(b)(iv) monetary consideration. See Utah Code 31A-1-301- United States: includes each state, district, and territory of the United States of America. See Utah Code 68-3-12.5
(2) The insurer shall make a reasonable classification of its participating policies and its assumed risks. No dividend shall be paid that is inequitable, unfairly discriminates between classifications of insurance contracts, or unfairly discriminates between policies within the same classification.(3) Unless stated in the policy, no dividend, otherwise earned, shall be contingent upon the payment of the renewal premium on any policy.(4) Subsection (1) may not be construed to require an insurer determined by the United States Internal Revenue Service to be a nonprofit organization to pay a dividend in a manner which would jeopardize that status.