Participating policies.
1. If provided for in its articles of incorporation or charter, a stock insurer or mutual insurer may:
(a) Issue any or all of its policies or contracts with or without participation in profits, savings, unabsorbed portions of premiums or surplus;
(b) Classify policies issued and perils insured on a participating and nonparticipating basis; and
(c) Determine the right to participate and the extent of participation of any class or classes of policies.
ÊAny such classification or determination shall be reasonable, and shall not unfairly discriminate as between policies so classified.
2. A life insurer may issue both participating and nonparticipating policies or contracts if the right or absence of the right to participate is reasonably related to the premium charged.
3. After the first policy year, no dividend, otherwise earned, shall be made contingent upon the payment of the renewal premium on any policy or contract; but a participating life or health insurance policy providing for participation at the end of the first or second policy year or the first and second policy year may provide that such dividend or dividends will be paid subject to payment of the premium for the next ensuing year.
Last modified: February 27, 2006