Rules for paying dividends on participating policies

(a) Any domestic stock insurer may, if its charter so provides, issue policies entitled to participate from time to time in the earnings of the insurer through dividends. (b) The directors of a stock insurer may from time to time apportion and pay to the holders of participating policies dividends only out of that part of its surplus which is in excess of its required capital and minimum surplus. The dividends may be paid or credited according to a reasonable classification of its policies. No dividend shall be paid which unfairly discriminates among policies within the same classification. (c) No such insurer shall issue in this State both participating and nonparticipating policies for the same class of risks, unless the right or absence of right to participate is reasonably related to the premium charge or the special character of the risk assumed. (d) Dividends to participating life insurance policies issued by the insurer shall be paid only out of its surplus funds as defined in section 431:4-101. Dividends to participating policies for other classes of insurance shall be paid only out of that part of the surplus funds which is derived from any realized net profits. (e) No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy.