Guam § 15310 - Requirements on Declaration of Dividends.

§ 15310. Requirements on Declaration of Dividends.

(a) In accordance to rules and regulations promulgated by the

Commissioner pursuant to the Administrative Adjudication Law

found in Chapter 9, Title 5 Guam Code Annotated, no domestic

company may pay any extraordinary dividend or make any other

extraordinary distribution to its shareholders until:

(1) thirty (30) days after the Commissioner has received

notice of the declaration thereof and has not within such

period disapproved the payment; or

(2) the Commissioner approves such payment within

the thirty (30)-day period.

(b) For purposes of this Section, an extraordinary dividend or

distribution is any dividend or distribution of cash or other

property whose fair market value, together with that of other

dividends or distributions, made within the period of twelve (12)

consecutive months ending on the date on which the proposed

dividend is scheduled for payment or distribution exceeds the

lesser of:

(1) ten percent (10%) of the company's surplus as

regards to policyholders as of the 31st day of December next

preceding; or

(2) the net income of the company for the twelve (12)-

month period ending on the 31st day of December next

preceding, but does not include pro rata distributions of any

class of the company's own securities.

(c) Notwithstanding any other provision of law, the company

may declare an extraordinary dividend or distribution which is

conditional upon the Commissioner's approval, and such a

declaration confers no rights upon security holders until:

(1) the Commissioner has approved the payment of the

dividend or distribution; or

(2) the Commissioner has not disapproved the payment

within the thirty (30)-day period referred to in this Section.