HRS §431:4-204
Rules for paying dividends to insurance company stockholders
This section limits how a domestic stock insurance company can pay dividends to its stockholders. Cash dividends must come from realized net profits, and stock dividends can come from any available surplus. A dividend cannot reduce the company's surplus below the minimum required for its insurance business. If a company breaks these rules, the insurance commissioner can take away its license to operate.
The statute, as written — Dividends to stockholders
(a) No domestic stock insurer shall pay any cash dividend to stockholders except out of that part of its available surplus funds which is derived from any realized net profits. (b) Such an insurer may pay a stock dividend out of any available surplus funds. (c) No dividend shall be declared or paid which would reduce the insurer's surplus to an amount less than the minimum required for the classes of insurance thereafter to be transacted. (d) The commissioner may revoke the certificate of authority of any insurer violating this section.
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