11-A. Extraordinary dividends. For purposes of this subsection, an extraordinary dividend or distribution is any dividend or distribution that exceeds the greater of:

A. Ten percent of the insurer's surplus to policyholders as of December 31st of the preceding year; or

B. The net gain from operations for the 12-month period ending December 31st of the preceding year.

In addition to the provisions of paragraphs A and B, any dividend or distribution declared at any time within 5 years following any acquisition of control of a domestic insurer or by any person controlling that insurer, as long as that is an extraordinary dividend that is an extraordinary dividend if it has not been approved by a number of continuing directors equal to a majority of the continuing directors in office immediately preceding that acquisition of control is an extraordinary dividend.

A pro rata distribution of any class of the insurer's own securities is not considered an extraordinary dividend or distribution for purposes of this section. An insurer subject to registration under this section may pay an extraordinary dividend or make any other extraordinary distribution to its stockholders upon the expiration of 60 days from the time the superintendent is notified of the declaration if within that period the superintendent has not disapproved the payment or upon the superintendent's approval of that payment within the 60-day period. Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution that is conditional upon the superintendent's approval and such a declaration does not confer any rights to stockholders until the superintendent has approved the payment of the dividend or distribution or the superintendent has not disapproved that payment within the 60-day period. The insurer's surplus following any dividends or distributions to shareholders under this subsection must be reasonable in relation to the insurer's outstanding liabilities and adequate to meet the insurer's financial needs. An extraordinary dividend or distribution that is permissible under statutory terms and conditions in the insurer's state of domicile is deemed to meet the requirements of this section if the value of that dividend or distribution does not materially exceed the value that would be permissible under this section.

Sec. 13. 24-A MRSA §222, sub-§12, śC is enacted to read: