§ 44-221. Domestic company; surplus notes; repayment; interest rate.
AI-assisted research summary: Surplus notes may be repaid or paid from surplus only under stated surplus conditions and with prior approval from the Director of Insurance.
(1) Except as provided in this subsection, surplus notes issued prior to September 9, 1995, and the indebtedness which they represent shall not be a liability or claim against any of the assets of the company. The principal of such notes may be paid from time to time, either in full or in part, from available surplus funds of the company only when the amount of the surplus of the company over all liabilities is double that of the principal amount then being paid. The company shall have the right to make such repayments whenever it is able to do so, except that the company shall first receive the prior approval of the Director of Insurance for any such repayments. The director shall use the standards set forth in section 44-2136 relating to adequacy of surplus in determining whether or not to approve such repayments. The interest on such notes shall only be payable from the surplus and shall not exceed such sum as may be fixed. Upon a dissolution of the company, the principal and accrued and unpaid interest shall be payable from the surplus. (2) Except as provided in this subsection, the principal of surplus notes issued on or after September 9, 1995, and the indebtedness which such notes represent shall not be a liability or claim against any of the assets of the company. The principal of and interest on such notes may be paid from time to time, either in full or in part, from available surplus funds of the company only when the amount of the surplus of the company over all liabilities is double that of the amount of principal and interest then being paid. The company shall have the right to make such payments whenever it is able to do so, except that the company shall first receive the prior approval of the Director of Insurance for any such payments. The director shall use the standards set forth in section 44-2136 relating to adequacy of surplus in determining whether or not to approve such payments. Upon a dissolution of the company, the principal and accrued and unpaid interest shall be payable from the surplus. History: Laws 1913, c. 154, § 84, p. 430; R.S.1913, § 3221; Laws 1919, c. 190, tit. V, art. V, § 7, p. 610; C.S.1922, § 7820; C.S.1929, § 44-407; Laws 1941, c. 83, § 1, p. 330; R.S.Supp.,1941, § 44-407; R.S.1943, § 44-221; Laws 1973, LB 405, § 1; Laws 1989, LB 92, § 67; Laws 1991, LB 236, § 36; Laws 1994, LB 1222, § 49; Laws 1995, LB 162, § 1.