§ 4219. Limitation on accumulation of surplus of life insurance
companies. (a) (1) Any domestic mutual life insurance company may
maintain a surplus, above all of its reserves and liabilities required
or specifically permitted by this chapter, not exceeding the greatest of
(A) eight hundred fifty thousand dollars, or (B) ten percent of its
policy reserves and policy liabilities, or (C) ten percent of its policy
reserves and policy liabilities plus (i) the product of three and its
authorized control level RBC as determined in accordance with section
one thousand three hundred twenty-two of this chapter minus (ii) the
asset valuation reserve as reported in its annual statement, or (D) the
minimum amount of capital and surplus required by law of another state
in which the company is authorized to do business.

(2) Any domestic stock life insurance company issuing participating
policies only or both participating and non-participating policies or
contracts in accordance with subsection (f) of section four thousand two
hundred thirty-one of this article, may maintain a participating
policyholders' surplus, above all of its reserves and liabilities
arising out of participating policies, required or specifically
permitted by the provisions of this chapter, not exceeding the greatest
of (A) two hundred fifty thousand dollars, or (B) ten percent of such
policy reserves and such policy liabilities, or (C) ten percent of such
policy reserves and policy liabilities plus the amount derived by
prorating, based upon the ratio of participating assets to admitted
assets, (i) the product of three and its authorized control level RBC as
determined in accordance with section one thousand three hundred
twenty-two of this chapter minus (ii) the asset valuation reserve as
reported in its annual statement.

(3) In this section, "policy reserves and policy liabilities" includes
reserves and liabilities on outstanding life insurance policies,
accident and health insurance policies and annuity contracts, contracts
supplemental thereto or in connection therewith or provisions included
therein insuring against disability or against death by accident and
including liabilities required under optional modes of settlement and
for dividends left on deposit, after deducting the net value of its
risks reinsured by other solvent assuming insurers. Policy reserves and
liabilities shall also include the reserves and liabilities of the
domestic life insurance company and the policy reserves and liabilities
of any and all wholly-owned subsidiary life insurance companies of the
domestic life insurance company, to the extent that the surpluses of
such subsidiary life insurance companies are included in the surplus of
the domestic life insurance company for purposes of determining the
limit pursuant to this section.

(4) In the case of a mutual life insurance company that is reorganized
into a stock life insurance company under section seven thousand three
hundred twelve of this chapter, the limitation contained in paragraph
one of this subsection shall not affect that part of the existing
surplus of such reorganized company that is allocated to participating
policies and contracts of the mutual life insurance company which is in
excess of such limitation on the effective date of the reorganization,
provided such excess, in addition to any further accretions occurring in
the normal course of business, shall be equitably distributed to these
participating policyholders and contractholders over a period not to
exceed ten years.

(b) The superintendent may, for good cause shown, by order, permit any
such company to maintain a surplus in excess of the maximum prescribed
by subsection (a) hereof, for a specified period, not exceeding one year
under any one order. The superintendent shall state in such order his
reasons therefor and shall cause a statement of such order and such
reasons to be published in his next annual report to the legislature.

(c) This section shall not apply to any stock life insurance company
doing exclusively a non-participating business.