(1) As used in RCW 48.08.030(1), "earned surplus" means that part of surplus that represents net earnings, gains, or profits, after deduction of all losses, that have not been distributed to share holders as dividends or transferred to stated capital or capital surplus or lawfully applied to other purposes. It does not include unrealized appreciation of assets, unrealized capital gains, or reevaluation of assets.

(2) Earned surplus can be determined from the annual statement.

(a) For stock life companies, earned surplus is unassigned funds less any unrealized gains included in that figure; and

(b) For property and casualty stock companies, earned surplus is unassigned funds, less any unrealized gains included in that figure.