§431:4-207  Participating policies. (a)  Any domestic stock insurer may, if its charter so provides, issue policiesentitled to participate from time to time in the earnings of the insurerthrough dividends.

(b)  The directors of a stock insurer may fromtime to time apportion and pay to the holders of participating policiesdividends only out of that part of its surplus which is in excess of itsrequired capital and minimum surplus.  The dividends may be paid or creditedaccording to a reasonable classification of its policies.  No dividend shall bepaid which unfairly discriminates among policies within the sameclassification.

(c)  No such insurer shall issue in this Stateboth participating and nonparticipating policies for the same class of risks, unlessthe right or absence of right to participate is reasonably related to thepremium charge or the special character of the risk assumed.

(d)  Dividends to participating life insurancepolicies issued by the insurer shall be paid only out of its surplus funds asdefined in section 431:4-101.  Dividends to participating policies for otherclasses of insurance shall be paid only out of that part of the surplus fundswhich is derived from any realized net profits.

(e)  No dividend, otherwise earned, shall bemade contingent upon the payment of renewal premium on any policy. [L 1987, c347, pt of §2]