SENATE COMMERCE COMMITTEE

STATEMENT TO

SENATE COMMITTEE SUBSTITUTE FOR

SENATE, No. 933

STATE OF NEW JERSEY

DATED: MARCH 21, 1996

      The Senate Commerce Committee reports favorably the Senate Committee Substitute for Senate Bill No. 933.

      This bill amends the law which provides for the domestication of certain foreign insurers to clarify the accounting treatment of dividends paid in excess of earned surplus by certain foreign property-casualty insurers that became domestic insurers in 1995. The bill provides that the amount by which those dividends exceed earned surplus is to be considered return of capital and not negative earnings for accounting purposes.