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2022 Florida Statutes (including 2022C, 2022D, 2022A, and 2023B)

Title XXXVII INSURANCE
Chapter 641 HEALTH CARE SERVICE PROGRAMS Entire Chapter
SECTION 365
Dividends.
F.S. 641.365
641.365 Dividends.—
(1)(a) A health maintenance organization shall not pay any dividend or distribute cash or other property to stockholders except out of that part of its available and accumulated surplus funds which is derived from realized net operating profits on its business and net realized capital gains.
(b) Unless prior written approval is obtained from the office, a health maintenance organization may not pay or declare any dividend or distribute cash or other property to or on behalf of any stockholder if, immediately before or after such distribution, the health maintenance organization’s available and accumulated surplus funds, which are derived from realized net operating profits on its business and net realized gains, are or would be less than zero.
(c) A health maintenance organization may make dividend payments or distributions to stockholders without the prior written approval of the office when:
1. The dividend is equal to or less than the greater of:
a. Ten percent of the health maintenance organization’s accumulated surplus funds which are derived from realized net operating profits on its business and net realized capital gains as of the immediate preceding calendar year; or
b. The health maintenance organization’s entire net operating profit and realized net capital gains derived during the immediately preceding calendar year.
2. The health maintenance organization will have surplus equal to or exceeding 115 percent of the minimum required statutory surplus after the dividend or distribution is made.
3. The health maintenance organization has filed a notice with the office at least 30 days prior to the dividend payment or distribution, or such shorter period of time as approved by the office on a case-by-case basis.
4. The notice includes a certification by an officer of the health maintenance organization attesting that after payment of the dividend or distribution the health maintenance organization will have at least 115 percent of required statutory surplus.
5. The health maintenance organization has negative retained earnings, statutory surplus in excess of $50 million, and statutory surplus greater than or equal to 150 percent of its required statutory surplus before and after the dividend distribution is made based upon the health maintenance organization’s most recently filed annual financial statement.
(2) The office shall not approve a dividend or distribution in excess of the maximum amount allowed in subsection (1) unless it determines that the distribution or dividend would not jeopardize the financial condition of the health maintenance organization, considering:
(a) The liquidity, quality, and diversification of the health maintenance organization’s assets and the effect on its ability to meet its obligations.
(b) Any reduction of investment portfolio and investment income.
(c) History of capital contributions.
(d) Prior dividend distributions of the health maintenance organization.
(e) Whether the dividend is only a pass-through dividend from a subsidiary of the health maintenance organization.
(3) Any director of a health maintenance organization who knowingly votes for or concurs in declaration or payment of a dividend to stockholders when such declaration is in violation of this section is guilty of a misdemeanor of the second degree, punishable as provided in s. 775.082 or s. 775.083, and shall be jointly and severally liable, together with other such directors likewise voting for or concurring, for any loss thereby sustained by creditors of the health maintenance organization to the extent of such dividend.
(4) Any stockholder receiving such an illegal dividend shall be liable in the amount thereof to the health maintenance organization.
(5) The office may revoke or suspend the certificate of authority of a health maintenance organization which has declared or paid such an illegal dividend.
History.—ss. 19, 24, ch. 88-388; ss. 187, 188, ch. 91-108; s. 4, ch. 91-429; s. 9, ch. 2002-247; s. 1588, ch. 2003-261.