ARSD 20:06:30:08. Agreements -- Reporting of surplus increases

Any increase in surplus net of federal income tax resulting from arrangements described in § 20:06:30:07 must be identified separately on the insurer's financial statement required by SDCL 58-6-75 as a surplus item in aggregate write-ins for gains and losses in surplus in the Capital and Surplus Account, line 46, page 4 of the Annual Statement for the year ended December 31, 1994. Recognition of the surplus increase as income must be reflected on a net of tax basis in "Commissions and expense allowances on reinsurance ceded," line 5, page 4 of the Annual Statement for the year ended December 31, 1994, as earnings emerge from the business reinsured. See the examples at the end of this section.