All insurance and insurance transactions in this territory, or affecting subjects located wholly or in part or to be performed within this territory, and all persons having to do therewith are governed by this title; and where there is a conflict or inconsistency between this title and any other law, this title governs.
 The business of insurance is one affected by the public interest, requiring that all persons be actuated by good faith, abstain from deception, and practice honesty and equity in all insurance matters. Upon the insurer, the insured, and their representatives rests the duty of preserving inviolate the integrity of insurance.
 Insurance is a contract whereby one party undertakes to indemnify another for loss, damage, or liability, or to pay or provide a specified or ascertainable benefit, upon determinable contingencies.
 Insurer, as used in this title, means a corporation or association which is engaged as principal in the business of making contracts of insurance, but shall not include an insurance broker acting as a broker.
 Insurance transaction includes any (1) solicitation; (2) negotiations preliminary to execution; (3) execution of an insurance contract; (4) transaction of matters subsequent to execution of the contract and arising out of it, except the investigation and adjustment of or litigation on any claim in this territory arising out of an insurance contract issued by an unauthorized insurer which is represented in such investigation, adjustment, or litigation solely by an adjuster or attorney at law in his professional capacity; and; (5) insuring.
 United States when used in this title to signify place, means the states and territories of the United States, other than this territory where pertinent, and the District of Columbia and the Commonwealth of Puerto Rico.
 In addition to any other penalty provided in this title, violation of any provision of this title or of any order, rule, or regulation issued by the Commissioner pursuant to this title is punishable by a fine of not less than $500 nor more than $2,000, or by imprisonment.
 Provisions of this title relating to a particular kind of insurance or a particular type of insurer or to a particular matter prevail over provisions relating to insurance in general or insurers in general or to such matter in general.
 The purpose of this chapter is to provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, and to provide an association to assess the cost of such protection among insurers.
 This chapter shall apply to all kinds of direct insurance, except life, title, surety, disability, credit, mortgage guaranty and ocean marine insurance.
 This chapter shall be liberally construed to effect the purpose propounded in section 231 of this title which shall constitute an aid and guide to interpretation.
 As used in this chapter, unless the context clearly indicates otherwise: (a) Association means the Virgin Islands Insurance Guaranty Association created in section 235 of this title. (b) Commissioner means the Commissioner of Insurance. (c) Covered claim means an unpaid claim or judgment, including an unearned premium claim, that has been timely filed with the liquidators as provided in section 237 of this title, which arises out of and is within the coverage of an insurance policy to which this chapter applies, and which is issued by an insurer if such insurer becomes an insolvent insurer after the effective date of this chapter and (1) the claimant or insured is a resident of this territory at the time of the insured event; or (2) the property from which the claim arises is permanently located in this territory. Covered claim shall not include: (1) any amount due any reinsurer, insurer, insurance pool, or underwriting association, as subrogation recoveries or otherwise, and (2) supplementary payment obligations including but not limited to adjustment fees and expenses, attorney fees and expenses, court costs, interest and bond premiums, prior to the appointment of a liquidator. (d) Insolvent insurer means (1) an insurer which holds a certificate of authority to transact insurance in this territory either at the time the policy was issued or when the insured event occurred and (2) determined to be insolvent by a court of competent jurisdiction. Insolvent insurer shall not be construed to mean an insurer with respect to which an order, decree, judgment or finding of insolvency, whether preliminary or temporary in nature, or order of rehabilitation or conservation has been issued by a court of competent jurisdiction prior to July 2, 1984, or which was otherwise in fact insolvent prior to July 2, 1984. (e) Member insurer means any person who (1) writes any kind of insurance to which this chapter applies pursuant to section 232 of this title, including the exchange of reciprocal or inter-insurance contracts, and (2) holds a certificate of authority to transact insurance in this territory. However, an exchange or reciprocal formed in accordance with chapter 18 of this title shall not be required to be a member insurer for the purposes of this chapter. (f) Net direct written premiums means direct gross premiums written in this territory on insurance policies to which this chapter applies, less return premiums thereon and dividends paid or credited to policyholders on such direct business. Net direct written premiums does not include premiums or contracts between insurers and reinsurers. (g) Person means any individual, corporation, partnership, association or voluntary organization.
 There is created a nonprofit unincorporated legal entity to be known as the Virgin Islands Insurance Guaranty Association. All insurers defined as member insurers by subsection (e) of section 234 of this title shall be and remain members of the Association as a condition of their authority to transact insurance in this territory. The Association shall perform its functions under a plan of operation established and approved pursuant to section 238 of this title and shall exercise its powers through a board of directors established pursuant to section 236 of this title.
 (a) The Board of Directors of the Association shall consist of not less than five nor more than nine persons serving terms as established in the plan of operation. The members of the Board shall be selected by member insurers subject to the approval of the Commissioner. Vacancies on the Board shall be filled for the remaining period of the term in the same manner as initial appointments. If no members are selected within 60 days after July 2, 1984, the Commissioner may appoint the initial members of the Board of Directors. (b) In approving selections to the Board, the Commissioner shall consider, among other things, whether all member insurers are fairly represented. (c) Members of the Board may be reimbursed from the assets of the Association for expenses incurred by them as members of the Board of Directors.
 (a) The Association shall: (1) Be obligated to the extent of the covered claims existing prior to the determination of insolvency, or arising within 30 days after the determination of insolvency, before the policy expiration date if less than 30 days after the determination, or before the insured replaces the policy or on request effects cancellation, if he does so within 30 days of the determination, but such obligation shall include only that amount of each covered claim which is in excess of $50 and less than $50,000. In no event shall the association be obligated to a policyholder or claimant in an amount in excess of the face amount of the policy from which the claim arises; (2) Be deemed the insurer to the extent of its obligation on the covered claims and to such extent shall have all rights, duties, and obligations of the insolvent insurer as if the insurer had not become insolvent; (3)  (A) [Effective until September 30, 2019] Assess insurers amounts necessary to pay the obligations of the Association under paragraph (1) of this subsection subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, and the cost of examinations under section 243 of this title and other expenses authorized by this section. The Association shall not be required to make assessments pursuant to subsection (a)(3)(A) of this section at any time that the amount contained in the Insurance Guaranty Fund is less than $10,000,000, and the shortfall is due to appropriations, disbursements, expenditures or other transfers from the Insurance Guaranty Fund for purposes other than pursuant to this chapter 10 of this title. In the event of the shortfall, assessments shall not be made of any member insurer unless and until the Government repays and transfers to the Insurance Guaranty Fund the lesser of (i) the amounts arising from appropriations, disbursements, expenditures or other transfers from the Insurance Guaranty Fund, or (ii) the amount that is necessary to restore the Fund balance to $10,000,000, and under any circumstance excluding appropriations, disbursements or expenditures or other transfers made pursuant to this chapter. Each member insurer shall be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any year an amount greater than 3% of that member insurer's net direct written premiums for the preceding calendar year. If the maximum assessment, together with the other assets of the Association, does not provide in any one year an amount sufficient to make all necessary payments, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. The Association may defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurer's financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance; Provided, however, That during the period of deferment, no dividends shall be paid to shareholders or policyholders. Deferred assessments shall be paid when such payment will not reduce capital or surplus below required minimums. Such payments shall be refunded to those companies receiving larger assessments by virtue of such deferment, or, in the discretion of any such company, credited against future assessments. (A) [Effective September 30, 2019] Assess insurers amounts necessary to pay the obligations of the Association under paragraph (1) of this subsection subsequent to an insolvency, the expenses of handling covered claims subsequent to an insolvency, and the cost of examinations under section 243 of this title and other expenses authorized by this section. The Association shall not be required to make assessments pursuant to subsection (a)(3)(A) of this section at any time that the amount contained in the Insurance Guaranty Fund is less than $50,000,000, and the shortfall is due to appropriations, disbursements, expenditures or other transfers from the Insurance Guaranty Fund for purposes other than pursuant to this chapter 10 of this title. In the event of the shortfall, assessments shall not be made of any member insurer unless and until the Government repays and transfers to the Insurance Guaranty Fund the lesser of (i) the amounts arising from appropriations, disbursements, expenditures or other transfers from the Insurance Guaranty Fund, or (ii) the amount that is necessary to restore the Fund balance to $50,000,000, and under any circumstance excluding appropriations, disbursements or expenditures or other transfers made pursuant to this chapter. Each member insurer shall be notified of the assessment not later than 30 days before it is due. No member insurer may be assessed in any year an amount greater than 3% of that member insurer's net direct written premiums for the preceding calendar year. If the maximum assessment, together with the other assets of the Association, does not provide in any one year an amount sufficient to make all necessary payments, the funds available shall be prorated and the unpaid portion shall be paid as soon thereafter as funds become available. The Association may defer, in whole or in part, the assessment of any member insurer, if the assessment would cause the member insurer's financial statement to reflect an amount of capital or surplus less than the minimum amounts required for a certificate of authority by any jurisdiction in which the member insurer is authorized to transact insurance; Provided, however, That during the period of deferment, no dividends shall be paid to shareholders or policyholders. Deferred assessments shall be paid when such payment will not reduce capital or surplus below required minimums. Such payments shall be refunded to those companies receiving larger assessments by virtue of such deferment, or, in the discretion of any such company, credited against future assessments. (B) Solely for the purpose of determining assessments, and not for the purpose of determining refunds under paragraph (7) of subsection (b) of this section or for any other purpose, the Association shall consider the amounts contained in the Virgin Islands Insurance Guaranty Fund established pursuant to Title 33, section 3061 of this Code, as an asset of the Association and the Association shall first utilize amounts contained therein in paying the obligations of insolvent insurers. The Association shall request in writing of the Commissioner of Insurance and the Commissioner of Finance transfer to the Association of any amounts contained in said Fund needed to pay such obligations, and the Commissioner of Finance shall promptly make such amounts available to the Association upon the written certification of the Commissioner of Insurance that such funds are in fact needed to pay such obligations. In the event that amounts in excess of the Association's requirements are transferred, the Association shall promptly refund the excess to the Commissioner of Finance for redeposit in the said Fund. (C) The rates and premiums charged for insurance policies to which this chapter applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the Association by the member insurer less (1) any amounts returned to the member insurer by the Association and (2) any amounts collected under the following proviso, and such rates shall not be deemed excessive because they contain an amount reasonably calculated to recoup assessments paid by the member insurer; Provided, however, if the total amount assessed member insurers in any year exceeds 14 of 1% of the member insurers' net direct written premiums for the preceding calendar year, the total amount so assessed shall be recovered during a reasonable period of time by member insurers by a surcharge on the net direct written premium on insurance policy for which such assessment was made. Any such surcharge shall be authorized by regulations promulgated by the Commissioner. Any such surcharge shall not be considered premium for purposes of (1) accounting, (2) premium or other tax and (3) agent and broker compensation, nor shall it be considered a deposit, penalty, fee, charge or tax for purposes of any retaliatory law. The Commissioner may authorize such a surcharge even if the total amount assessed member insurers in any account in any year does not exceed 14 of 1%; (4) Investigate, adjust, compromise, settle, and pay covered claims to the extent of the Association's obligation and deny all other claims; (5) Notify such persons as the Commissioner directs pursuant to paragraphs (1) and (2) of subsection (b), section 239 of this title; (6) Handle claims through its employees or through one or more insurers or other persons designated as servicing facilities. Designation of a servicing facility shall be subject to the approval of the Commissioner, but such designation may be declined by a member insurer; (7) Reimburse each servicing facility for obligations of the Association paid by the facility and for expenses incurred by the facility while handling claims on behalf of the Association and pay the other expenses of the Association authorized by this chapter. (b) The Association may: (1) Appear in, defend, and appeal any action on a covered claim or on a claim brought against the Association; (2) Employ or retain such persons as are necessary to handle claims and perform other duties; (3) Borrow funds necessary to effect the purposes of this chapter in accordance with the plan of operation; (4) Sue or be sued; (5) Negotiate and become party to such contracts as are necessary to carry out the purposes of this chapter; (6) Perform such other acts as are necessary or proper to effectuate the purposes of this chapter; (7) Refund to the member insurers in proportion to the contribution of each member insurer to the Association that amount by which the assets of the Association exceed the liabilities, if at the end of any calendar year, the Board of Directors finds that the assets of the Association exceed the liabilities of the Association as estimated by the Board of Directors for the coming year.
 (a)  (1) The Association shall submit to the Commissioner a plan of operation and any amendments thereto necessary or suitable to assure the fair, reasonable, and equitable administration of the Association. The plan of operation or any amendments thereto shall become effective upon approval in writing by the Commissioner. (2) If the Association fails to submit a suitable plan of operation within 120 days following July 2, 1984, or if at any time thereafter the Association fails to submit suitable amendments to the plan, the Commissioner shall, after notice and hearing, adopt and promulgate such reasonable rules as are necessary or advisable to effectuate the provisions of this chapter. Such rules shall continue in force until modified by the Commissioner or superseded by a plan submitted by the Association and approved by the Commissioner. (b) All member insurers shall comply with the plan of operation. (c) The plan of operation shall: (1) Establish the procedures whereby all the powers and duties of the Association enumerated in section 237 of this title will be performed; (2) Establish procedures for handling assets of the Association; (3) Establish the amount and method of reimbursing members of the Board of Directors created pursuant to the provisions of section 236 of this title; (4) Establish procedures by which claims may be filed with the Association and establish acceptable forms of proof of covered claims. Notice of claims to the receiver or liquidator of the insolvent insurer shall be deemed notice to the Association or its agent and a list of such claims shall be periodically submitted to the Association or similar organization in another state by the receiver or liquidator; (5) Establish regular places and times for meetings of the Board of Directors; (6) Establish procedures for records to be kept of all financial transactions of the Association, its agents, and the Board of Directors; (7) Provide that any member insurer aggrieved by any final action or decision of the Association may appeal to the Commissioner within 30 days after the action or decision; (8) Establish the procedures whereby selections for the Board of Directors will be submitted to the Commissioner; (9) Contain additional provisions necessary or proper for the execution of the power and duties of the Association. (d) The plan of operation may provide that any or all powers and duties of the Association, except those enumerated in paragraphs (a)(3) and (b)(3) of section 237, are delegated to a corporation, association, or other organization which performs or will perform functions similar to those of this Association, or its equivalent, in two or more states, territories, or the Commonwealth of Puerto Rico. Such a corporation, association, or organization shall be reimbursed as a servicing facility would be reimbursed and shall be paid for its performance of any other functions of the Association. A delegation under this subsection shall take effect only with the approval of both the Board of Directors and the Commissioner, and may be made by only a corporation, association, or organization which extends protection not substantially less favorable and effective than that provided by this chapter.
 (a) The Commissioner shall: (1) Notify the Association of the existence of an insolvent insurer not later than three days after he receives notice of the determination of the insolvency; (2) Upon request of the Board of Directors, provide the Association with a statement of the net direct written premiums of each member insurer. (b) The Commissioner may: (1) Require that the Association notify the insureds of the insolvent insurer and any other interested parties of the determination of insolvency and of their rights under this chapter. Such notification shall be by first-class mail at their last known address, where available, but if sufficient information for notification by mail is not available, notice by publication in a newspaper of general circulation shall be sufficient; (2) Require each agent of the insolvent insurer to give prompt written notice by first-class mail of the insured's last known address to each insured of the insolvent insurer for whom he was the agent of record; (3) Suspend or revoke, after notice and hearing, the certificate of authority to transact insurance in this territory of any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative, the Commissioner may levy a fine on any member insurer which fails to pay an assessment when due or fails to comply with the plan of operation. Such fine shall not exceed 5% of the unpaid assessment per month, except that no fine shall be less than $100 per month. (c) Any final action or order of the Commissioner issued pursuant to this chapter shall be subject to judicial review in a court of competent jurisdiction.
 (a) Any person recovering under this chapter shall be deemed to have assigned his rights under the policy to the Association to the extent of his recovery from the Association. Every insured or claimant seeking the protection of this chapter shall cooperate with the Association to the same extent as such person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out, except such causes of action as the insolvent insurer would have had if such sums had been paid by the insolvent insurer. In the case of an insolvent insurer operating on a plan with assessment liability, payments of claims of the Association shall not operate to reduce the liability of insurers to the receiver, liquidator, or statutory successor for unpaid assessments. (b) The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the Association or a similar organization in another state. The court having jurisdiction shall grant such claims priority equal to that to which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the Association or similar organization in handling claims shall be accorded the same priority as the liquidator's expenses. (c) The Association shall periodically file with the receiver or liquidator of the insolvent insurer statements of the covered claims paid by the Association and estimates of anticipated claims on the Association which shall preserve the rights of the Association against the assets of the insolvent insurer.
 (a) Any person having a claim against an insurer under any provision in his insurance policy which is also a covered claim shall be required to exhaust first his right under such policy. Any amount payable on a covered claim pursuant to this chapter shall be reduced by the amount of such recovery under the claimant's insurance policy. (b) Any person having a claim which may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the Association of the place of residence of the insured except that if it is a first party claim for damage to property with a permanent location, from the Association of the location of the property. Any recovery pursuant to this chapter shall be reduced by the amount of the recovery from any other insurance guaranty association or its equivalent.
 The Board of Directors of the Association may make recommendations to the Commissioner for the detection and prevention of insurer insolvencies.
 The Association shall be subject to examination and regulation by the Commissioner. The Board of Directors shall submit, not later than March 30 of each year, a financial report for the preceding calendar year in a form approved by the Commissioner.
 The Association shall be exempt from payment of all fees and all taxes levied by this territory except taxes levied on real or personal property.
 There shall be no liability on the part of and no cause of action of any nature shall arise against any member insurer, the Association or its agents or employees, the Board of Directors, or the Commissioner or his representatives for any authorized action taken by them in performance of their powers and duties pursuant to this chapter.
 All proceedings in which the insolvent insurer is a party in any court in this territory shall be stayed for 60 days from the date the insolvency is determined to permit proper defense by the Association of all pending causes of action. As to any covered claims arising from a judgment under any decision, verdict, or finding based on the default of the insolvent insurer or its failure to defend an insured, the Association, either on its own behalf or on behalf of such insured, may apply to have such judgment, order, decision, verdict, or finding set aside by the same court or administrator that made such judgment, order, decision, verdict, or finding and shall be permitted to defend against such claim on the merits.
 (a) Except as provided in subsection (b) of this section, the provisions of this chapter are severable. If any provision of this chapter or its application to any person or circumstances is held invalid, the invalidity shall not affect other provisions or applications of this chapter which can be given effect without the invalid provision or application. (b) The provisions of section 237(a)(3)(B) of this title are nonseverable. If any provision of that paragraph or its application to any person or circumstances is held invalid, the remaining provisions or applications of this chapter are void.
 An insurer formed in this territory shall be either (1) an incorporated stock insurer; (2) an incorporated mutual insurer; (3) an incorporated specific risks mutual property insurer; (4) an incorporated mutual assessment property insurer only; (5) an incorporated farm mutual assessment property insurer only; or (6) a reciprocal insurer, with respective powers, duties, and restrictions as provided in this title.
 Except for mutual assessment property insurers and farm mutual assessment property insurers, no insurer shall be formed or be authorized in this territory to issue contracts of insurance the performance of which is contingent upon the payment of assessments, assessment premiums, or calls made upon its members.
 (a) No person forming or proposing to form in this territory an insurer, or insurance holding corporation, or stock corporation to finance an insurer or insurance production therefor, or corporation to manage an insurer, or a syndicate for any of such purposes, shall advertise, or solicit or receive any funds, agreement, stock subscription, or membership on account thereof unless he has applied for and has received from the Commissioner a solicitation permit. (b) Any person violating this section shall be subject to a fine of not more than $10,000 or imprisonment for not more than ten years, or by both fine and imprisonment.
 (a) To apply for a solicitation permit the applicant shall file with the Commissioner a request therefor showing (1) name, type, and purpose of insurer, corporation or syndicate proposed to be formed; (2) names, addresses, and business records of each person associated or to be associated in the formation of the proposed insurer, corporation, or syndicate; (3) full disclosure of the terms of all understandings and agreements existing or proposed among persons so associated relative to the proposed insurer, corporation, or syndicate, or the formation thereof; (4) the plan according to which solicitations are to be made; and (5) such additional information as the Commissioner may reasonably require. (b) Such applicant shall also file with the Commissioner (1) original and copies in triplicate of proposed articles of incorporation or syndicate agreement; or, if the proposed insurer is a reciprocal, original and duplicate of the proposed subscribers' agreement and attorney in fact agreement; (2) original and duplicate copy of any proposed bylaws; (3) copy of any security proposed to be issued and copy of application or subscription agreement therefor; (4) copy of any insurance contract proposed to be offered and copy of application therefor; (5) copy of any prospectus, advertising, or literature proposed to be used; and (6) copy of proposed form of any escrow agreement required. (c) Such applicant shall deposit with the Commissioner the fees required by law to be paid for the application, for filing of the articles of incorporation of an insurer, for filing the subscribers' agreement for the solicitation permit, if granted, and for filing articles of incorporation with the Government Secretary.
 (a) The Commissioner shall expeditiously examine the application for a solicitation permit and make any investigation relative thereto deemed necessary. If the Commissioner finds that (1) the application is complete; (2) the documents therewith filed are equitable in terms and proper in form; and (3) the agreements made or proposed are equitable to present and future shareholders, subscribers, members or policyholders, he shall give notice to the applicant that he will issue a solicitation permit, stating the terms to be contained therein, upon the filing of the bond required by section 261 of this title. (b) If the Commissioner does not so find, or if he finds that any of the persons named in the application as being associated or to be associated in the formation of the insurer, corporation or syndicate are untrustworthy, he shall give notice to the applicant that the permit will not be granted, stating the grounds therefor, and shall refund to the applicant all sums so deposited except the application fee.
 Upon the filing of any bond required by section 261 of this title and after notice by the Commissioner, the Commissioner shall file the articles of incorporation of the proposed incorporated insurer with the Lieutenant Governor, and issue to the applicant a solicitation permit.
 Every solicitation permit issued by the Commissioner shall (1) expire two years from its date, unless earlier terminated by the Commissioner, and shall so state; (2) state the securities for which subscriptions are to be solicited, the number, classes, par value, and selling price thereof, or identify the insurance contract for which applications and advance premiums or deposits are to be solicited; (3) limit the portion of funds received on account of stock or syndicate subscriptions, if any are proposed to be taken, which may be used for promotion and organization expenses to such amount as he deems adequate, but in no event to exceed 15 percent of such funds as and when actually received; (4) if to be a mutual insurer, limit the portion of funds received on account of applications for insurance which may be used for promotion or organization expenses to the kind of insurance and policy involved and to the costs incurred by insurers generally in the production of similar business, and provide that no such commission shall be deemed to be earned nor be paid until the insurer has received its certificate of authority and the policies applied for and upon which such commission is to be based, have been actually issued and delivered; and (5) contain such other information required by this chapter or reasonable conditions relative to accounting and reports or otherwise as the Commissioner deems necessary.
 The granting of a solicitation permit is permissive only and shall not constitute an endorsement by the Commissioner of any person or thing related to the proposed insurer, corporation, or syndicate and the existence of the permit shall not be advertised or used as an inducement in any solicitation. The substance of this section in bold-faced type not less than ten point shall be printed at the top of each solicitation permit.
 Solicitation for sale of securities to members of the public under a solicitation permit shall be made only by individuals licensed therefor, when such license is required pursuant to the provisions of any applicable federal or Virgin Islands securities act or blue sky law.
 (a) The Commissioner may, for cause, modify a solicitation permit, or may, after a hearing, revoke any solicitation permit for violation of any provision of this title, or of the terms of the permit, or of any proper order of the Commissioner, or for misrepresentation. (b) The Commissioner shall revoke a solicitation permit if requested in writing by a majority of the syndicate members, or by a majority of the incorporators and two-thirds of the subscribers to stock or applicants for insurance in the proposed incorporated insurer or corporation, or if he is so requested by a majority of the subscribers of a proposed reciprocal insurer.
 (a) The Commissioner shall not issue a solicitation permit until the person applying therefor files with him a corporate surety bond in the penalty of $10,000, in favor of the Government of the Virgin Islands and for the use and benefit of such Government and of subscribers and creditors of the proposed organization. The bond shall be conditioned upon the payment of costs incurred by the Government of the Virgin Islands in event of any legal proceedings for liquidation or dissolution of the proposed organization before completion of organization or in event a certificate of authority is not granted; and upon a full accounting for funds received until the proposed insurer has been granted its certificate of authority, or until the proposed corporation or syndicate has completed its organization as defined in the solicitation permit. (b) In lieu of filing such bond, the person may deposit with the Commissioner of Finance through the Commissioner of Insurance $10,000 in cash or in United States Government bonds at par value, to be held in trust upon the same conditions as required for the bond. (c) The Commissioner may waive the requirement for a bond or deposit in lieu thereof if the permit provides that  (1) the proposed securities are to be distributed solely and finally to those few persons who are the active promoters intimate to the formation of the insurer, or other corporation or syndicate; or (2) the securities are to be issued in connection with subsequent financing as provided in section 267 of this title, and distribution thereof is not to be made to the general public. (d) Any bond filed or deposit or remaining portion thereof held under this section shall be released and discharged upon settlement or termination of all liabilities against it.
 (a) All funds received pursuant to a solicitation permit shall be deposited and held in escrow in a bank or trust company under an agreement approved by the Commissioner. No part of any such deposit shall be withdrawn, except (1) for the payment of promotion and organization expenses as authorized by the solicitation permit; (2) for the purpose of making any deposit with the Commissioner required for the issuance of a certificate of authority to an insurer; (3) if the proposed organization is not to be an insurer, upon completion of payments on stock or syndicate subscriptions made under the solicitation permit and deposit or appropriation of such funds to the purposes specified in the solicitation permit; or (4) for making of refunds as provided in section 266 of this title. (b) When the Commissioner has issued a certificate of authority to an insurer any such funds remaining in escrow for its account shall be released to the insurer.
 (a) The incorporators of any insurer or other corporation, or the persons proposing to form a reciprocal insurer, or a syndicate, shall be jointly and severally liable for its debts or liabilities until it has secured a certificate of authority, if an insurer, or has completed its organization if a corporation other than an insurer or a syndicate. (b) Any portion of funds received on account of stock or syndicate subscriptions which is allowed therefor under the solicitation permit, may be applied concurrently toward the payment of promotion and organization expense theretofore incurred.
 (a) No such proposed stock insurer, corporation, or syndicate shall issue any share of stock or participation agreement except for payment in cash or in securities eligible for investment of funds of insurers. No such shares or agreement shall be issued until all subscriptions received under the solicitation permit have been so fully paid, nor, if an insurer, until a certificate of authority has been issued to it. (b) Every subscription contract to shares of a stock insurer or other corporation calling for payment in installments, together with all amounts paid thereon may be forfeited at the option of the corporation, upon failure to make good a delinquency in any installment upon not less than 45 days' notice in writing, and every such contract shall so provide.
 All applications for insurance obtained in forming a mutual insurer shall provide that (1) issuance of the policy is contingent upon completion of organization of the insurer and issuance to it of a certificate of authority; (2) the prepaid premium or deposit will be refunded in full to the applicant if the organization is not completed and certificate of authority issued prior to the solicitation permit's date of expiration; and (3) the agreement for insurance is not effective until a policy has been issued under it.
 The Commissioner shall withdraw all funds held in escrow and refund to subscribers or applicants all sums paid in on stock or syndicate subscriptions, less that part of such sums paid in on subscriptions as has been allowed and used for promotion and organization expenses, and all sums paid in on insurance applications, and shall dissolve the proposed insurer, corporation or syndicate if the proposed insurer, corporation or syndicate fails to complete its organization and obtain full payment for subscriptions and applications, and, if an insurer, it fails to secure its certificate of authority, all before expiration of the solicitation permit; or if the Commissioner revokes the solicitation permit.
 (a) No domestic insurer, or insurance holding corporation, or stock corporation for financing operations of a mutual insurer, after (1) it has received a certificate of authority, if an insurer; or (2) it has completed its initial organization and financing, if a corporation other than an insurer, shall solicit or receive funds in exchange for any new issue of its corporate securities, other than through a stock dividend, until it has applied to the Commissioner for, and has been granted a solicitation permit. (b) The Commissioner shall issue such a permit unless he finds that (1) the funds proposed to be secured are excessive in amount for the purpose intended; (2) the proposed securities or the manner of their distribution are inequitable; or (3) the issuance of the securities would jeopardize the interests of policyholders or the holders of other securities of the insurer or corporation. (c) Any such solicitation permit granted by the Commissioner shall be for such duration, and shall contain such terms and be issued upon such conditions as the Commissioner may reasonably specify or require.
 (a) This section applies to insurers hereafter incorporated in this territory. (b) The incorporators shall be individuals who are United States citizens, of whom two-thirds shall be residents of this territory. The number of incorporators shall be not less than five if a stock insurer, nor less than ten if a mutual insurer. (c) The incorporators shall execute articles of incorporation in quadruplicate and acknowledge their signatures thereunto before an officer authorized to take acknowledgements of deeds. (d) After approval of the articles by the Commissioner, one copy shall be filed in the office of the Lieutenant Governor, another in the office of the Commissioner, another with the Clerk of the District Court in which the insurer's principal offices are to be located, and the fourth copy shall be retained by the insurer. (e) The articles of incorporation shall state (1) the names and addresses of the incorporators; (2) the name of the insurer. If a mutual insurer the name shall include the word mutual. (3) the objects for which the insurer is formed; whether it is a stock or mutual insurer, and if a mutual property insurer only, whether it will insure on the cash premium or assessment plan; and the kinds of insurance it will issue, according to the designations made in this title; (4) if a stock insurer, the amount of its capital, the aggregate number of shares, and the par value of each share, which par value shall be not less than $10. If a mutual insurer, the maximum contingent liability of its policyholders for the payment of its expenses and losses occurring under its policies. (5) the duration of its existence, which may be perpetual; (6) the names and addresses of the directors, not less than five in number, who shall constitute the board of directors of the insurer for the initial term, not less than two nor more than six months, as designated in the articles of incorporation; (7) the name of the city or town of this territory in which the insurer's principal place of business is to be located; and (8) other provisions not inconsistent with law as may be deemed proper by the incorporators.
 Existing authorized domestic insurers shall continue to insure only in accordance with the provisions of this title.
 Every domestic insurer shall establish and maintain in this territory its principal office and place of business.
 The laws of this territory relating to private corporations, except where inconsistent with the express provisions of this title, shall govern the corporate powers, duties, and relationships of incorporated domestic insurers.
 Each incorporated domestic insurer shall, in the month of January, or February, or March, hold the annual meeting of its shareholders or members for the purpose of receiving reports of its affairs, to elect directors, and to act upon such other matters as properly be brought before it.
 Not less than three-fourths of the directors of an incorporated domestic insurer shall be United States citizens, and a majority of the board of directors shall be residents of this territory.
 No person shall buy or sell or barter a vote or proxy, relative to any meeting of shareholders or members of an incorporated domestic insurer, or engage in any corrupt or dishonest practice in or relative to the conduct of any such meeting. Violation of this section shall constitute a gross misdemeanor.
 (a) Amendments to the articles of incorporation of a domestic insurer shall be made by a majority vote of its board of directors and the vote or written assent of two-thirds of its voting capital stock, or two-thirds of the members (if a mutual insurer) voting at a valid meeting of members. (b) The president and secretary of the insurer shall, under the corporate seal, certify the amendment in quadruplicate, and file it in the offices of the Lieutenant Governor, the Commissioner, the Clerk of the District Court, and the insurer, as required under this title for original articles of incorporation. Thereupon, subject to the requirements of section 351 of this title relative to increase of capital stock of a stock insurer, the amendment shall become effective.
 No domestic insurer or its affiliates or subsidiaries shall guarantee the financial obligation of any director or officer of such insurer or affiliate or subsidiary in his personal capacity, and any such guaranty attempted shall be void. This prohibition shall not apply to obligations of the insurer under surety bonds or insurance contracts issued in the regular course of business.
 (a) No incorporated domestic insurer shall enter into any contract the effect of which would be to grant or surrender the control and management of the insurer to any person. (b) No incorporated domestic insurer shall make any contract whereby any person is granted or is to enjoy in fact the controlling or preemptive right to produce substantially all insurance business for the insurer unless such contract is filed with and approved by the Commissioner. The contract shall be deemed approved unless disapproved by the Commissioner within 60 days after date of filing. Any disapproval shall be delivered to the insurer in writing, stating the grounds therefor. (c) The Commissioner shall not approve any contract referred to in subsection (b) of this section which (1) subjects the insurer to excessive charges for expenses or commissions; (2) vests in any person any control over the general affairs of the insurer tantamount to the exclusion of control by its board of directors or officers; (3) is to extend for an unreasonable length of time; or (4) contains other inequitable provisions or provisions which may jeopardize the security of policyholders.
 (a) No domestic insurer shall make any disbursement of $25 or more, unless evidenced by a voucher correctly describing the consideration for the payment and supported by a check or receipt endorsed or signed by or on behalf of the person receiving the money. (b) If the disbursement is for services and reimbursement, the voucher shall describe the services and itemize the expenditures. (c) If the disbursement is in connection with any matter pending before any Legislature or public body or before any public official, the voucher shall also correctly describe the nature of the matter and of the insurer's interest therein.
 The funds of a domestic insurer shall not be deposited in any bank or banking institution which has not first been approved as a depositary by the insurer's board of directors or by a committee thereof designated for the purpose.
 (a) No person having any authority in the investment or disposition of the funds of a domestic insurer shall accept, except for the insurer, or be the beneficiary of any fee, brokerage, gift, or other emolument because of any investment, loan, deposit, purchase, sale, payment, or exchange made by or for the insurer, or be pecuniarily interested therein in any capacity; except, that such a person may procure a loan from the insurer direct upon approval by two-thirds of its directors and upon the pledge of securities eligible for the investment of the insurer's funds under this title. (b) This section does not prohibit a life insurer from making a policy loan to such person on a life insurance contract issued by it and in accordance with the terms thereof. (c) The Commissioner may, by regulations from time to time, define and permit additional exceptions to the prohibition contained in subsection (a) of this section solely to enable payment of reasonable compensation to a director who is not otherwise an officer or employee of the insurer, or to a corporation or firm in which the director is interested, for necessary services performed or sales or purchases made to or for the insurer in the ordinary course of the insurer's business and in the usual private professional or business capacity of such director or such corporation or firm.
 Any domestic insurer doing business in another territory, state or sovereignty may design and issue insurance contracts and transact insurance in such territory, state or sovereignty as required or permitted by the laws thereof, any provision of the insurer's articles of incorporation or bylaws notwithstanding.
 (a) No domestic insurer shall knowingly solicit insurance business in any reciprocating state in which it is not then licensed as an authorized insurer. (b) This section shall not prohibit advertising through publications and radio and television broadcasts originating outside such reciprocating state, if the insurer is licensed in a majority of the states in which such advertising is disseminated, and if such advertising is not specifically directed to residents of such reciprocating state. (c) This section shall not prohibit insurance, covering persons or risks located in a reciprocating state, under contracts solicited and issued in states in which the insurer is then licensed. Nor shall it prohibit insurance effectuated by the insurer as unauthorized insurer in accordance with the laws of the reciprocating state. (d) A reciprocating state, as used herein, is one under the laws of which a similar prohibition is imposed upon and is enforced against insurers domiciled therein. (e) The Commissioner shall suspend or revoke the certificate of authority of a domestic insurer found by him, after a hearing, to have violated this section.
 This chapter may be cited as The Virgin Islands Insurance Holding Company System Regulatory Act.
 As used in this chapter: (a) Affiliate means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. (b) Commissioner means the Commissioner of Insurance of the Virgin Islands. (c) Control, controlling, controlled by and under common control with means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by section 325(k) of this chapter. The Commissioner may determine, after furnishing all persons in interest with notice and opportunity to be heard and making specific findings of fact to support the determination that control exists in fact, notwithstanding the absence of a presumption to that effect. (d) Enterprise Risk means any activity, circumstance, event or series of events involving one or more affiliates of an insurer that, if not remedied promptly, is likely to have a material adverse effect upon the financial condition or liquidity of the insurer or its insurance holding company system as a whole, including, anything that would cause the insurers Risk-Based Capital to fall into company action level as set forth in section 473 of chapter 20 of this title or would cause the insurer to be in hazardous financial condition as set forth in section 519 of chapter 21 of this title. (e) Group-wide supervisor means the regulatory official authorized to engage in conducting and coordinating group-wide supervision activities who is determined or acknowledged by the Commissioner under section 329 to have sufficient significant contacts with the internationally active insurance group. (f) Insurance Holding Company System means insurance holding company system consisting of two or more affiliated persons, one or more of which is an insurer. (g) Insurer has the meaning set forth in chapter 1, section 4 of this title. The term as used in this chapter does not include insurers regulated under title 22 virgin Islands Code, chapter 55 and 66, unless specifically provided otherwise in this chapter and it also does not include agencies, authorities or instrumentalities of the United States, its possessions and territories, the Commonwealth of Puerto Rico, the District of Columbia, or a state or political subdivision of a state. (h) Internationally active insurance group means an insurance holding company system that includes an insurer registered under section 325 and meets the following criteria: (1) Premiums are written in at least three countries; (2) The percentage of gross premiums written outside the United States is at least ten percent of the insurance holding company systems total gross written premiums; and (3) Based on a three-year rolling average, the total assets of the insurance holding company system are at least $50,000,000,000 or the total gross written premiums of the insurance holding company system are at least $10,000,000,000. (i) Merger means combining two or more companies, generally by offering the stockholders of one company securities in the acquiring company in exchange for the surrender of their stock. (j) NAIC means National Association of Insurance Commissioners. (k) Person means an individual, a corporation, a limited liability company, a partnership, an association, a joint stock company, a trust, an unincorporated organization, any similar entity or any combination of the foregoing acting in concert, but does not include any joint venture partnership exclusively engaged in owning, managing, leasing or developing real or tangible personal property. (l) SEC means the Security Exchange Commission. (m) Security holder means a specified person who owns any security of such person, including common stock, preferred stock, debt obligations and any other security convertible into or evidencing the right to acquire any of the foregoing. (n) Subsidiary means an affiliate controlled by such person directly or indirectly through one or more intermediaries. (o) Voting Security includes any security convertible into or evidencing a right to acquire a voting security.
 (a) Any domestic insurer, either by itself or in cooperation with one or more persons. may organize or acquire one or more subsidiaries engaged in the following kinds of business: (1) any kind of insurance business authorized by the jurisdiction in which it is incorporated; (2) acting as an insurance broker or as an insurance agent for its parent or for any of its parents insurer subsidiaries; (3) investing, reinvesting or trading in securities for its own account, that of its parent, a subsidiary of its parent, or an affiliate or subsidiary; (4) management of an investment company subject to or registered pursuant to the Investment Company Act of 1940, 15 U.S.C.  80a-1-80a-64, as amended, including related sales and services; (5) acting as a broker-dealer subject to or registered pursuant to the Securities Exchange Act of 1934, 15 U.S.C. 78a et seq., as amended; (6) rendering investment advice to governments, government agencies, corporations or other organizations or groups; (7) rendering other services related to the operations of an insurance business, such as actuarial, loss prevention, safety engineering, data processing, accounting, claims, appraisal and collection services; (8) ownership and management of assets that the parent corporation could itself own or manage; (9) acting as administrative agent for a governmental instrumentality that is performing an insurance function; (10) financing of insurance premiums, agents and other forms of consumer financing; (11) any other business activity determined by the Commissioner to be reasonably ancillary to an insurance business; and (12) owning a corporation or corporations engaged or organized to engage exclusively in one or more of the businesses specified in this section. (b) The aggregate investment by the insurer and its subsidiaries acquired or organized pursuant to this subsection must not exceed the limitations applicable to such investments by the insurer. (c) In addition to investments in common stock, preferred stock, debt obligations and other securities permitted under all other sections of this title, a domestic insurer may also: (1) invest in common stock, preferred stock, debt obligations, and other securities of one or more subsidiaries, amounts which do not exceed the lesser of 10 percent of the insurers assets or 50 percent of the insurers surplus as regards policyholders, if after these investments, the insurers surplus as regards policyholders is reasonable in relation to the insurers outstanding liabilities and adequate to meet its financial needs. In calculating the amount of those investments, investments in domestic or foreign insurance subsidiaries and health maintenance organizations are excluded, and included are: (A) total net monies or other consideration expended and obligations assumed in the acquisition or formation of a subsidiary, including all organizational expenses and contributions to capital and surplus of the subsidiary whether or not represented by the purchase of capital stock or issuance of other securities, and (B) all amounts expended in acquiring additional common stock, preferred stock, debt obligations, and other securities; and all contributions to the capital or surplus of a subsidiary subsequent to its acquisition or formation; (2) invest any amount in common stock, preferred stock, debt obligations and other securities of one or more subsidiaries engaged or organized to engage exclusively in the ownership and management of assets authorized as investments for the insurer if each subsidiary agrees to limit its investments in any asset so that such investments may not cause the amount of the total investment of the insurer to exceed any of the investment limitations specified in paragraph (1) of this subsection or in chapter 23 of this title applicable to the insurer. For the purpose of this subsection, the total investment of the insurer includes: (A) any direct investment by the insurer in an asset, and (B) the insurers proportionate share of any investment in an asset by any subsidiary of the insurer, that are calculated by multiplying the amount of the subsidiarys investment by the percentage of the ownership of the subsidiary; (3) With the approval of the Commissioner, invest any greater amount in common stock, preferred stock, debt obligations, or other securities of one or more subsidiaries; if after the investment the insurers surplus as regards policyholders will be reasonable in relation to the insurers outstanding liabilities and adequate to its financial needs. (d) Investments in common stock, preferred stock, debt obligations or other securities of subsidiaries made pursuant to subsection (c) may not be subject to any of the otherwise applicable restrictions or prohibitions contained in this title applicable to such investments of insurers. (e) Whether any investment made pursuant to subsection (c) meets the applicable requirements of that subsection is determined before the investment is made, by calculating the applicable investment limitations as though the investment had already been made, taking into account the then outstanding principal balance on all previous investments in debt obligations, and the value of all previous investments in equity securities as of the day they were made, net of any return of capital invested, not including dividends. (f) If an insurer ceases to control a subsidiary, it shall dispose of any investment made pursuant to this section within three years after the cessation of control or within such further time as the Commissioner may prescribe, unless at any time after the investment is made, the investment meets the requirements for investment under any other section of this chapter, and the insurer has so notified the Commissioner.
 (a)  (1) No person other than the issuer may make a tender offer for or a request or invitation for tenders of, or enter into any agreement to exchange securities for, seek to acquire, or acquire, in the open market or otherwise, any voting security of a domestic insurer if, after the consummation thereof, such person would, directly or indirectly or by conversion or by exercise of any right to acquires, be in control of the insurer, and no person may enter into an agreement to merge with or otherwise to acquire control of a domestic insurer or any person controlling a domestic insurer unless, at the time the offer, request or invitation is made or the agreement is entered into, or prior to the acquisition of the securities if no offer or agreement is involved, such person has filed with the Commissioner and has sent to the insurer, a statement containing the information required by this section and the offer, request, invitation, agreement or acquisition has been approved by the Commissioner in the manner prescribed in this chapter. (2) For purposes of this section, any controlling person of a domestic insurer seeking to divest its controlling interest in the domestic insurer, in any manner, shall file with the Commissioner, with a copy to the insurer, confidential notice of its proposed divestiture at least 30 days prior to the cessation of control. The Commissioner shall determine those instances in which the party seeking to divest or to acquire a controlling interest in an insurer, is required to file for and obtain approval of the transaction. The information remains confidential until the conclusion of the transaction unless the Commissioner, in the Commissioners discretion determines that confidential treatment will interfere with enforcement of this section. If the statement referred to in paragraph (1) is otherwise filed, this paragraph does not apply. (3) With respect to a transaction subject to this section, the acquiring person must also file a pre-acquisition notification with the Commissioner, which must contain the information set forth in section 324(c)(1). A failure to file the notification subjects the person to penalties specified in section 324(e)(3) of this chapter. (4) For purposes of this section, a domestic insurer includes any person controlling a domestic insurer unless the person, as determined by the Commissioner, is either directly or through its affiliates primarily engaged in business other than the business of insurance. For the purposes of this section, person does not include any securities broker holding, in the usual and customary brokers function, less than 20 percent of the voting securities of an insurance company or of any person which controls an insurance company. (b) The statement to be filed with the Commissioner must be made under oath or affirmation and must contain the following: (1) the name and address of each person by whom or on whose behalf the merger or other acquisition of control referred to subsection (a) is effected hereinafter called the acquiring party, and (A) if the person is an individual, the principal occupation and all offices and positions held during the past five years, and any conviction of crimes other than minor traffic violations during the past 10 years; (B) if the person is not an individual, a report of the nature of its business operations during the past five years or for the lesser period as the person and any predecessors are in existence; an informative description of the business intended to be done by the person and the persons subsidiaries; and a list of all individuals who are directors or executive officers or who are selected to become directors or executive officers of the person, or who perform or will perform functions appropriate to such positions. The list must include for each individual the information required by subsection (b)(1)(A); (2) the source, nature and amount of the consideration used or to be used in effecting the merger or other acquisition of control, a description of any transaction where funds were or are to be obtained for any such purpose, including any pledge of the insurers stock, or the stock of any of its subsidiaries or controlling affiliates, and the identity of persons furnishing consideration: where a source of consideration is a loan made in the lenders ordinary course of business, the identity of the lender remains confidential, if the person filing the statement so requests; (3) fully audited financial information regarding the earnings and financial condition of each acquiring party for the preceding five fiscal years of each acquiring party or for such lesser period as the acquiring party and any predecessors are in existence, and similar unaudited information as of a date not earlier than 90 days prior to the filing of the statement; (4) any plans or proposals which each acquiring party may have to liquidate the insurer, to sell its assets or merge or consolidate it with any person, or to make any other material change in its business or corporate structure or management; (5) the number of shares of any security referred to in subsection (a) which each acquiring party proposes to acquire, and the terms of the offer, request, invitation, agreement or acquisition referred to in subsection (a), and a statement as to the method by which the fairness of the proposal was arrived at; (6) the amount of each class of any security referred to in subsection (a) which is beneficially owned or concerning which there is a right to acquire beneficial ownership by each acquiring party; (7) a full description of any contracts, arrangements or understandings with respect to any security referred to in subsection (a) in which any acquiring party is involved, including but not limited to transfer of any of the securities, joint ventures, loan or option arrangements, puts or calls, guarantees of loans, guarantees against loss or guarantees of profits, division of losses or profits, or the giving or withholding of proxies. The description must identify the persons with whom the contracts, arrangements or understandings have been entered into; (8) a description of the purchase of any security referred to in subsection (a) during the 12 calendar months before the filing of the statement by any acquiring party, including the dates of purchase, names of the purchasers and consideration paid or agreed to be paid; (9) a description of any recommendations to purchase any security referred to in subsection (a) made during the 12 calendar months preceding the filing of the statement by any acquiring party, or by anyone based upon interviews or at the suggestion of the acquiring party; (10) copies of all tender offers for, requests, or invitations for tenders of, exchange offers for, and agreements to acquire or exchange any securities referred to in subsection (a), and, if distributed, of additional soliciting material relating to them; (11) the term of any agreement, contract or understanding made with or proposed to be made with any broker-dealer as to solicitation of securities referred to in subsection (a) for tender, and the amount of any fees, commissions or other compensation to be paid to broker-dealers with regard thereto; (12) an agreement by the person required to file the statement referred to in subsection (a) that it will provide the annual report, specified in section 325(l), for so long as control exists. The insurer may alternatively file the most recently filed parent corporation reports that have been filed with the Security Exchange Commission, if appropriate; (13) an acknowledgement by the person required to file the statement referred to in subsection (a) that the person and all subsidiaries within its control in the insurance holding company system will provide information to the Commissioner upon request as necessary to evaluate enterprise risk to the insurer. The insurer may alternatively file most recently filed parent corporation reports that have been filed with the SEC, if appropriate; and (14) such additional information as the Commissioner may by rule prescribe as necessary or appropriate for the protection of policyholders of the insurer or in the public interest. (c) If the person required to file the statement referred to in subsection (a) is a partnership, limited partnership, syndicate or other group, the Commissioner may require that the information required under subsection (b), paragraphs (1) through (14) be provided for each partner of the partnership or limited partnership, each member of the syndicate or group, and each person who controls the partner or member. If any partner, member or person is a corporation or the person required to file the statement referred to in subsection (a) is a corporation, the Commissioner may require that the information required under subsection (b), paragraphs (1) through (14) be provided with respect to the corporation, each officer and director of the corporation, and each person who is directly or indirectly the beneficial owner of more than 10 percent of the outstanding voting securities of the corporation. (d) If there are any material changes to the facts set forth in the statement filed with the Commissioner and sent to the insurer pursuant to this section, an amendment setting forth the change, together with copies of all documents and other material relevant to the change, must be filed with the Commissioner and sent to the insurer within two business days after the person learns of the change. (e) If any offer, request, invitation, agreement or acquisition referred to in subsection (a) is proposed to be made by means of a registration statement under the Securities Act of 1933, 15 U.S.C.  77a et seq., or in circumstances requiring the disclosure of similar information under the Securities Exchange Act of 1934, 15 U.S.C.  78a et seq., as amended, or under a state law requiring similar registration or disclosure, the person required to file the statement referred to in subsection (a) may use the documents in furnishing the information called for by that statement. (f)  (1) The Commissioner shall approve any merger or other acquisition of control referred to in subsection (a) unless, after a public hearing, the Commissioner finds that: (A) After the change of control, the domestic insurer referred to in subsection (a) may not be able to satisfy the requirements for the issuance of a license to write the line or lines of insurance for which it is presently licensed; (B) The effect of the merger or other acquisition of control would substantially lessen competition in insurance in this Territory or tend to create a monopoly. In applying the competitive standard in this subparagraph: (i) The informational requirements of section 324(c)(1) and the standards of section 324(d)(2) apply; (ii) The merger or other acquisition may not be disapproved if the Commissioner finds that any of the situations meeting the criteria provided by section 324(d)(3) exist; and (iii) The Commissioner may condition the approval of the merger or other acquisition on the removal of the basis of disapproval within a specified period of time; (C) The financial condition of any acquiring party is such as may jeopardize the financial stability of the insurer, or prejudice the interest of its policyholders; (D) The plans or proposals that the acquiring party has to liquidate the insurer, sell its assets or consolidate or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to policyholders of the insurer and not in the public interest; (E) The competence, experience and integrity of those persons who controls the operation of the insurer are such that it is not in the interest of policyholders of the insurer and of the public to permit the merger or other acquisition of control; or (F) The acquisition is likely to be hazardous or prejudicial to the insurance-buying public. (2) The public hearing referred to in subsection (f)(1) must be held not later than 30 days after the statement required by subsection (a) is filed, and at least 20 days notice must be given by the Commissioner to the person filing the statement. Not less than seven days notice of the public hearing must be given by the person filing the statement to the insurer and to such other persons as may be designated by the Commissioner. The Commissioner shall make a determination within the 60-day period preceding the effective date of the proposed transaction. At the hearing, the person filing the statement, the insurer, any person to whom notice of hearing was sent, or any other person whose interest may be affected, has the right to present evidence, examine and cross-examine witnesses, and offer oral and written arguments and in connection with the hearing, is entitled to conduct discovery proceedings in the same manner as is presently allowed in the appropriate court of the Virgin Islands. All discovery proceedings must be concluded not later than three days prior to the commencement of the public hearing. (3) If the proposed acquisition of control will require the approval of more than one Commissioner, the public hearing referred to in subsection (f) may be held on a consolidated basis upon request of the person filing the statement referred to in subsection (a). The person shall file the statement referred to in subsection (a) with the NAIC within five days of making the request for a public hearing. A Commissioner may opt out of a consolidated hearing, and shall provide notice to the applicant of the opt-out within 10 days of the receipt of the statement referred to in subsection (a). A hearing conducted on a consolidated basis must be public and must be held within the United States before the commissioners of the states in which the insurers are domiciled. The Commissioners shall hear and receive evidence. A commissioner may attend such hearing, in person or by telecommunication. (4) In connection with a change of control of a domestic insurer, any determination by the Commissioner that the person acquiring control of the insurer is required to maintain or restore the capital of the insurer to the level required by the laws and regulations of the Virgin Islands must be made not later than 60 days after the date of notification of the change in control submitted pursuant to subsection (a)(1). (5) The Commissioner may hire at the acquiring persons expense any attorneys, actuaries, accountants and other experts not otherwise a part of the Commissioners staff as may be reasonably necessary to assist the Commissioner in reviewing the proposed acquisition of control. (g) The provisions of this section do not apply to any offer, request, invitation, agreement or acquisition that the Commissioner by order exempts as not having been made or entered into for the purpose and not having the effect of changing or influencing the control of a domestic insurer, or as otherwise not comprehended within the purposes of this section. (h) The following are violations of this section: (1) the failure to file any statement, amendment or other material required to be filed pursuant to subsection (a) or (b); or (2) the effectuation or any attempt to effectuate an acquisition of, control of, divestiture of, or merger with, a domestic insurer unless the Commissioner has given approval. (i) The courts of this Territory are vested with jurisdiction over every person not resident, domiciled or authorized to do business in the Virgin Islands who files a statement with the Commissioner under this section, and overall actions arising out of violations of this section, and each person is considered to have performed acts equivalent to and constituting an appointment by the person of the Commissioner to be the persons true and lawful attorney in fact upon whom may be served all lawful process in any action, suit or proceeding arising out of violations of this section. Copies of all lawful process must be served on the Commissioner and transmitted by registered or certified mail by the Commissioner to the person at his last known address.
 (a) The following definitions apply for the purposes of this section only: (1) Acquisition means any agreement, arrangement or activity the consummation of which results in a persons acquiring directly or indirectly the control of another person, and includes but is not limited to the acquisition of voting securities, the acquisition of assets, bulk reinsurance and mergers. (2) An involved insurer includes an insurer that either acquires or is acquired, is affiliated with an acquirer or an acquired insurer, or is the result of a merger. (b)  (1) Except as exempted in paragraph (2) of this subsection, this section applies to any acquisition in which there is a change in control of an insurer authorized to do business in the Territory. (2) This section does not apply to the following: (A) A purchase of securities solely for investment purposes so long as the securities are not used by voting or otherwise to cause or attempt to cause the substantial lessening of competition in any insurance market in the Territory. If a purchase of securities results in a presumption of control under section 321(c), it is not solely for investment purposes unless the commissioner of the insurers state of domicile accepts a disclaimer of control or affirmatively finds that control does not exist and the disclaimer action or affirmative finding is communicated by the domiciliary commissioner to the Commissioner. (B) The acquisition of a person by another person when both persons are neither directly nor through affiliates primarily engaged in the business of insurance, if pre-acquisition notification is filed with the Commissioner in accordance with subsection (c)(1) 30 days before to the proposed effective date of the acquisition. However, such pre-acquisition notification is not required for exclusion from this section if the acquisition would otherwise be excluded from this section by any other subparagraph of paragraph (2). (C) The acquisition of already affiliated persons. (D) An acquisition if, as an immediate result of the acquisition: (i) In no market would the combined market share of the involved insurers exceed five percent of the total market. (ii) There would be no increase in any market share, or (iii) In no market would: (I) The combined market share of the involved insurers exceed 12 percent of the total market, and (II) The market share increases by more than two percent of the total market. For the purpose of paragraph (2)(D), a market means direct written insurance premium in the Territory for a line of business as contained in the annual statement required to be filed by insurers licensed to do business in the Territory; (E) An acquisition for which a pre-acquisition notification is required pursuant to this section due solely to the resulting effect on the ocean marine insurance line of business; (F) An acquisition of an insurer whose domiciliary commissioner affirmatively finds that the insurer is in failing condition; there is a lack of feasible alternative to improving such condition; the public benefits of improving the insurers condition through the acquisition exceed the public benefits that would arise from not lessening competition; and the findings are communicated by the domiciliary commissioner to the Commissioner. (c) An acquisition covered by subsection (b) may be subject to an order pursuant to subsection (c) unless the acquiring person files a pre-acquisition notification and the waiting period has expired. The acquired person may file a pre-acquisition notification. The Commissioner shall give confidential treatment to information submitted under this section in the same manner as provided in section 330. (1) The pre-acquisition notification must be in the form and contain information as prescribed by the NAIC relating to those markets which, under subsection (b)(2)(D), cause the acquisition not to be exempted from the provisions of this section. The Commissioner may require such additional material and information as considered necessary to determine whether the proposed acquisition, if consummated, would violate the competitive standard of subsection (d). The required information may include an opinion of an economist as to the competitive impact of the acquisition in the Virgin Islands accompanied by a summary of the education and experience of the person indicating the persons ability to render an informed opinion. (2) The waiting period required begins on the date of receipt by the Commissioner of a pre-acquisition notification and ends on the earlier of the thirtieth day after the date of receipt, or termination of the waiting period by the Commissioner. Before the end of the waiting period, the Commissioner on a one-time basis may require the submission of additional needed information relevant to the proposed acquisition, if the waiting period ends on the earlier of the thirtieth day after receipt of the additional information by the Commissioner or termination of the waiting period by the Commissioner. (d)  (1) The Commissioner may enter an order under subsection (e)(1) with respect to an acquisition if there is substantial evidence that the effect of the acquisition may be substantially to lessen competition in any line of insurance in the territory or tend to create a monopoly or if the insurer fails to file adequate information in compliance with subsection (c). (2) In determining whether a proposed acquisition would violate the competitive standard of paragraph (d)(1), the Commissioner shall consider the following: (A) Any acquisition covered under subsection (b) involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standards. (i) If the market is highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B4%4% or more10%2% or more15%1% more   (ii) Or, if the market is not highly concentrated and the involved insurers possess the following shares of the market:Insurer AInsurer B5%5% or more10%4% or more15%3% or more19%1% or more   (iii) A highly concentrated market is one in which the share of the four largest insurers is 75 percent or more of the market. Percentages not shown in the tables are interpolated proportionately to the percentages that are shown. If more than two insurers are involved, exceeding the total of the two columns in the table is prima facie evidence of violation of the competitive standard in paragraph (1) of this subsection. For the purpose of this item, the insurer with the largest share of the market is deemed to be Insurer A. (B) There is a significant trend toward increased concentration when the aggregate market share of any grouping of the largest insurers in the market, from the two largest to the eight largest, has increased by seven percent or more of the market over a period of time extending from any base year five to ten years before to the acquisition up to the time of the acquisition. Any acquisition or merger covered under subsection (b) involving two or more insurers competing in the same market is prima facie evidence of violation of the competitive standard in paragraph (1) if: (i) There is a significant trend toward increased concentration in the market; (ii) One of the insurers involved is one of the insurers in a grouping of large insurers showing the requisite increase in the market share; and (iii) Another involved insurers market is two percent or more. (C) For the purposes of paragraph (2) of this subsection: (i) The term insurer includes any company or group of companies under common management, ownership or control; (ii) The term market means the relevant product and geographical markets. In determining the relevant product and geographical markets, the Commissioner shall give due consideration to, among other things, the definitions or guidelines, if any, promulgated by the NAIC and to information, if any, submitted by parties to the acquisition. In the absence of sufficient information to the contrary, the relevant product market is assumed to be the direct written insurance premium for a line of business, such line being that used in the annual statement required to be filed by insurers doing business in the Territory, and the relevant geographical market is assumed to be the Territory. (iii) The burden of showing prima facie evidence of violation of the competitive standard rests upon the Commissioner. (D) Even though an acquisition is not prima facie violative of the competitive standard under subparagraph (A) and (B), the Commissioner may establish the requisite anticompetitive effect based upon other substantial evidence. Even though an acquisition is prima facie violative of the competitive standard under subparagraph (A) and (B), a party may establish the absence of the requisite anticompetitive effect based upon other substantial evidence. Relevant factors in making a determination under this section include, but are not limited to, the following: market shares, volatility of ranking of market leaders, number of competitors, concentration, trend of concentration in the industry, and ease of entry and exit into the market. (3) An order may not be entered under subsection (e)(1) if: (A) The acquisition will yield substantial economies of scale or economies in resource utilization that cannot be feasibly achieved in any other way, and the public benefits which would arise from such economies exceed the public benefits which would arise from not lessening competition; or (B) The acquisition will substantially increase the availability of insurance, and the public benefits of the increase exceed the public benefits which would arise from not lessening competition. (e)  (1)  (A) If an acquisition violates the standards of this section, the Commissioner may enter an order: (i) requiring an involved insurer to cease and desist from doing business in the Territory with respect to the line or lines of insurance involved in the violation; or (ii) imposing a reasonable monetary penalty, including any fees, costs and expenses associated with the hearing as allowed pursuant to this chapter; or (iii) denying the application of an acquired or acquiring insurer for a license to do business in the Territory. (B) The order may not be entered unless: (i) there is a hearing; (ii) notice of the hearing is issued before the end of the waiting period and not less than 15 days before the hearing; and (iii) the hearing is concluded and the order is issued no later than 60 days after the date of the filing of the pre-acquisition notification with the Commissioner. (C) Every order must be accompanied by a written decision of the Commissioner setting forth findings of fact and conclusions of law. (D) An order pursuant to this subsection may not apply if the acquisition is not consummated. (2) Any person who violates a cease and desist order of the Commissioner issued under paragraph (1) and while the order is in effect may, after notice and hearing and upon order of the Commissioner, be subject at the discretion of the Commissioner to one or more of the following: (A) a monetary penalty of at least $1,000 for every day of violation; or (B) suspension or revocation of the persons license. (3) Any insurer or other person who fails to make any filing required by this section and who also fails to demonstrate a good faith effort to comply with any filing requirement, is subject to a fine of not less than $25,000. (f) Sections 335(b), 335(c), and 337 do not apply to acquisitions covered under subsection (b) of this section.
 (a) Every insurer authorized to do business in the Territory and is a member of an insurance holding company system shall register with the Commissioner, except a foreign insurer subject to registration requirements and standards adopted by statute or regulation in the jurisdiction of its domicile which are substantially similar to those contained in: (1) this section; (2) sections 326(a)(1), 326(b), 326(d); and (3) either section 326(a)(2) or a provision such as the following: (A) Each registered insurer shall keep current the information required to be disclosed in its registration statement by reporting all material changes or additions not more than 15 days after the end of the month in which it learns of each change or addition. (B) Any insurer subject to registration under this section shall register no later than 90 days after the effective date of this chapter or 15 days after it becomes subject to registration, whichever is later, and annually thereafter by March 15th of each year for the previous calendar year ending December 31st, unless the Commissioner for good cause shown extends the time for registration, and then within the extended time. (C) The Commissioner may require any insurer authorized to do business in the state which is a member of an insurance holding company system, and which is not subject to registration under this section, to furnish a copy of the registration statement, the summary specified in subsection (c) or other information filed by the insurance company with the insurance regulatory authority of its domiciliary jurisdiction. (b) Every insurer subject to registration shall file the registration statement with the Commissioner on a form and in a format prescribed by the NAIC and must contain the following current information: (1) the capital structure, general financial condition, ownership and management of the insurer and any person controlling the insurer; (2) the identity and relationship of every member of the insurance holding company system; (3) the following agreements in force, and transactions currently outstanding or which have occurred during the last calendar year between the insurer and its affiliates: (A) loans, other investments, or purchases, sales or exchanges of securities of the affiliates by the insurer or of the insurer by its affiliates; (B) purchases, sales or exchange of assets; (C) transactions not in the ordinary course of business; (D) guarantees or undertakings for the benefit of an affiliate which result in an actual contingent exposure of the insurers assets to liability, other than insurance contracts entered into in the ordinary course of the insurers business; (E) all management agreements, service contracts and all cost-sharing arrangements; (F) reinsurance agreements; (G) dividends and other distributions to shareholders; and (H) consolidated tax allocation agreements; (4) any pledge of the insurers stock, including stock of any subsidiary or controlling affiliate, for a loan made to any member of the insurance holding company system; (5) if requested by the Commissioner, the insurer shall include financial statements of or within an insurance holding company system, including all affiliates. Financial statements may include but are not limited to annual audited financial statements filed with the SEC pursuant to the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended. An insurer required to file financial statements pursuant to this paragraph may satisfy the request by providing the Commissioner with the most recently filed parent corporation financial statements filed with the SEC; (6) other matters concerning transactions between registered insurers and any affiliates as may be included from time to time in any registration forms adopted or approved by the Commissioner; (7) statements that the insurers board of directors is responsible for and oversees corporate governance and internal controls and that the insurers officers or senior management have approved, implemented, and continue to maintain and monitor corporate governance and internal control procedures; and (8) any other information required by the Commissioner by regulations. (c) All registration statements must contain a summary outlining all items in the current registration statement representing changes from the prior registration statement. (d) No information need be disclosed on the registration statement filed pursuant to subsection (b) if the information is not material for the purposes of this section. Unless the Commissioner by rule, regulation or order provides otherwise sales, purchases, exchanges, loans or extensions of credit, investments, or guarantees involving one-half of one percent or less of an insurers admitted assets as of the 31st day of December next preceding are not material for purposes of this section. (e) Subject to section 326(b), each registered insurer shall report to the Commissioner all dividends and other distributions to shareholders within 15 business days following the declaration of dividends. (f) Any person within an insurance holding company system subject to registration is required to provide complete and accurate information to an insurer, where the information is reasonably necessary to enable the insurer to comply with the provisions of this chapter. (g) The Commissioner shall terminate the registration of any insurer that demonstrates that it no longer is a member of an insurance holding company system. (h) The Commissioner may require or allow two or more affiliated insurers subject to registration to file a consolidated registration statement. (i) The Commissioner may allow an insurer that is authorized to do business in the Territory and is part of an insurance holding company system to register on behalf of any affiliated insurer is required to register under subsection (a) and to file all information and material required to be filed under this section. (j) The provisions of this section are not applicable to any insurer, information or transaction if and to the extent that the Commissioner by rule, regulation or order exempts the same from the provisions of this section. (k) Any person may file with the Commissioner a disclaimer of affiliation with any authorized insurer or a disclaimer may be filed by the insurer or any member of an insurance holding company system. The disclaimer must fully disclose all material relationships and bases for affiliation between the person and the insurer as well as the basis for disclaiming the affiliation. A disclaimer of affiliation is deemed to have been granted unless the Commissioner, within 30 days following receipt of a complete disclaimer, notifies the filing party the disclaimer is disallowed. If there is a disallowance, the disclaiming party may request an administrative hearing, which must be granted. The disclaiming party must be relieved of its duty to register under this section if approval of the disclaimer has been granted by the Commissioner, or if the disclaimer is considered to have been approved. (l) The ultimate controlling person of every insurer subject to registration shall also file an annual enterprise risk report. The report must, to the best of the ultimate controlling persons knowledge and belief, identify the material risks within the insurance holding company system that could pose enterprise risk to the insurer. The report must be filed with the lead state commissioner of the insurance holding company system as determined by the procedures within the Financial Analysis Handbook adopted by the NAIC. (m) Failure to file a registration statement or any summary of the registration statement or enterprise risk filing required by this section within the time specified for filing is a violation of this section.
 (a)  (1) Transactions within an insurance holding company system to which an insurer subject to registration is a party are subject to the following standards: (A) The terms must be fair and reasonable; (B) Agreements for cost sharing services and management must include provisions as required by rule issued by the Commissioner; (C) Charges or fees for services performed must be reasonable; (D) Expenses incurred and payment received must be allocated to the insurer in conformity with customary insurance accounting practices consistently applied; (E) The books, accounts and records of each party to all the transactions must be so maintained as to clearly and accurately disclose the nature and details of the transactions including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties; and (F) The insurers surplus as regards policyholders following any dividends or distributions to shareholder affiliates must be reasonable in relation to the insurers outstanding liabilities and adequate to meet its financial needs. (2) The following transactions involving a domestic insurer and any person in its insurance holding company system, including amendments or modifications of affiliate agreements previously filed pursuant to this section, which are subject to any materiality standards contained in subparagraphs (A) through (F), may not be entered into unless the insurer has notified the Commissioner in writing of its intention to enter into the transaction not less than 30 days prior thereto, or such shorter period as the Commissioner may permit, and the Commissioner has not disapproved it within that period. The notice for amendments or modifications must include the reasons for the change and the financial impact on the domestic insurer. Informal notice must be reported, within 30 days after a termination of a previously filed agreement, to the Commissioner for determination of the type of filing required, if any. (A) Sales, purchases, exchanges, loans, extensions of credit, or investments, provided the transactions are equal to or exceed: (i) with regarding nonlife insurers, the lesser of three percent of the insurers admitted assets or 25 percent of surplus as regards policyholders as of the 31st day of December next preceding; (ii) with regarding to life insurers, three percent of the insurers admitted assets as of the 31st day of December next preceding; (B) Loans or extensions of credit to any person who is not an affiliate, where the insurer makes loans or extensions of credit with the agreement or understanding that the proceeds of the transactions, in whole or in substantial part, are to be used to make loans or extensions of credit to, to purchase assets of, or to make investments in, any affiliate of the insurer making the loans or extensions of credit provided the transactions are equal to or exceed: (i) regarding nonlife insurers, the lesser of three percent of the insurers admitted assets or 25 percent of surplus as regards policyholders as of the 31st day of December next preceding; (ii) regarding life insurers, three percent of the insurers admitted assets as of the 31st day of December next preceding; (C) Reinsurance agreements or modifications thereto, including: (i) all reinsurance pooling agreements; and (ii) agreements in which the reinsurance premium or a change in the insurers liabilities, or the projected reinsurance premium or a change in the insurers liabilities in any of the next three years, equals or exceeds five percent of the insurers surplus as regards policyholders, as of the 31st day of December next preceding, including those agreements which may require as consideration the transfer of assets from an insurer to a non-affiliate, if an agreement or understanding exists between the insurer and non-affiliate that any portion of the assets will be transferred to one or more affiliates of the insurer; (D) All management agreements, service contracts, tax allocation agreements, guarantees and all cost-sharing arrangements; (E) Guarantees made by a domestic insurer, but a guarantee that is quantifiable as to amount is not subject to the notice requirements of this subparagraph unless it exceeds the lesser of one-half of one percent of the insurers admitted assets or ten percent of surplus as regards policyholders as of the 31st day of December next preceding. Further, all guarantees that are not quantifiable as to the amount are subject to the notice requirements of this subparagraph; (F) Direct or indirect acquisitions or investments in a person that controls the insurer or in an affiliate of the insurer in an amount which, together with its present holdings in such investments, exceeds two and one-half percent of the insurers surplus to policyholders. Direct or indirect acquisitions or investments in subsidiaries acquired pursuant to section 322, or authorized under any other section of this title, or in non-subsidiary insurance affiliates that are subject to the provisions of this chapter, are exempt from this requirement. When reviewing the notification required to be submitted pursuant to this section, the Commissioner shall examine prior and existing investments of this type to establish that the investments separately or together with other transactions, are not being made to contravene the dividend limitations set forth in subsection (b). However, an investment in a controlling person or in an affiliate may not be considered a dividend or distribution to shareholders when applying subsection (b); (G) Any material transactions, specified by regulation, that the Commissioner determines may adversely affect the interests of the insurers policyholders; and (H) Nothing in this subparagraph authorizes or permits any transactions which, in the case of an insurer not a member of the same insurance holding company system, would be otherwise contrary to law. (3) A domestic insurer may not enter into transactions which are part of a plan or series of like transactions with persons within the insurance holding company system if the purpose of those separate transactions is to avoid the statutory threshold amount and thus avoid the review that would occur otherwise. If the Commissioner determines that separate transactions were entered into over any 12-month period for that purpose, the Commissioner may exercise the Commissioners authority under section 333. (4) The Commissioner, in reviewing transactions subject to paragraph (2), shall consider whether the transactions comply with the standards set forth in paragraph (1) and whether they may adversely affect the interests of policyholders. (5) The Commissioner must be notified no later than 30 days after any investment of a domestic insurer in any one corporation if the total investment in the corporation by the insurance holding company system exceeds 10 percent of the corporations voting securities. (b) Dividends and other Distributions (1) No domestic insurer shall pay any extraordinary dividend or make any other extraordinary distribution to its shareholders until 30 days after the Commissioner has received notice of the declaration thereof and has not within that period disapproved the payment, or until the Commissioner has approved the payment not later than the thirty-day period. An emergency situation shall be considered on a cases-by-case basis at the discretion of the Commissioner. If an emergency situation occurs, the Commissioner may, at his discretion on a case-by-case basis, give due consideration to a request for an expedited review of the proposed transaction. (2) For purposes of this subsection, an extraordinary dividend or distribution includes any dividend or distribution of cash or other property, whose fair market value, together with that of other dividends or distributions, made within the period of 12 consecutive months ending on the date on which the proposed dividend is scheduled for payment or distribution exceeds the greater of: (A) 10% of the insurers surplus as regards policyholders as of the 31 day of December next preceding; or (B) The net income of the insurer for the 12-month period ending the 31 day of December next preceding, but does not include pro rata distributions of any class of the insurers own securities. (3) For the purposes of this subsection, the following requirements also apply: (A) All dividends must be reasonable in relation to policyholder surplus, in accordance with rules promulgated by the Commissioner; (B) The insurer is required to provide prior notice to the Commissioner five days after the declaration of the dividend and 10 days prior to the payment of the dividend; and (C) There is an earned surplus restriction on all dividends. In determining whether a dividend or distribution is extraordinary, an insurer other than a life insurer may carry forward net income from the previous two calendar years that has not already been paid out as dividends. This carry-forward must be computed by taking the net income from the second and third preceding calendar years, not including realized capital gains, less dividends paid in the second and immediate preceding calendar years. Notwithstanding any other provision of law, an insurer may declare an extraordinary dividend or distribution which is conditional upon the Commissioners approval, and the declaration confers no rights upon shareholders until the Commissioner has approved the payment of the dividend or distribution or the Commissioner has not disapproved payment within the thirty-day period referred to in paragraph (1). (c)  (1) Notwithstanding the control of a domestic insurer by any person, the officers and directors of the insurer may not thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer must be managed so as to assure its separate operating identity consistent with this chapter. (2) Nothing in this section may preclude a domestic insurer from having or sharing a common management or cooperative or joint use of personnel, property or services with one or more other persons under arrangements meeting the standards of subsection (a)(1). (3) Not less than one-third of the directors of a domestic insurer, and not less than one-third of the members of each committee of the board of directors of any domestic insurer must be persons who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or entity. At least one such person must be included in any quorum for the transaction of business at any meeting of the board of directors or any committee thereof. (4) The board of directors of a domestic insurer shall establish one or more committees comprised solely of directors who are not officers or employees of the insurer or of any entity controlling, controlled by, or under common control with the insurer and who are not beneficial owners of a controlling interest in the voting stock of the insurer or any such entity. The committee or committees have the responsibility of nominating candidates for director for election by shareholders or policyholders, evaluating the performance of officers considered principal officers of the insurer and recommending to the board of directors the selection and compensation of the principal officers. (5) The provisions of paragraphs (3) and (4) do not apply to a domestic insurer if the person controlling the insurer, such as an insurer, a mutual insurance holding company, or a publicly held corporation, has a board of directors and committees that meet the requirements of paragraphs (3) and (4) with respect to such controlling entity. (6) An insurer may make application to the Commissioner for a waiver from the requirements of this subsection, if the insurers annual direct written and assumed premium, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, is less than $300,000,000. An insurer may also make application to the Commissioner for a waiver from the requirements of this subsection based upon unique circumstances. The Commissioner may consider various factors including, but not limited to, the type of business entity, volume of business written, availability of qualified board members, or the ownership or organizational structure of the entity. (d) For purposes of this chapter, in determining whether an insurers surplus as regards policyholders is reasonable in relation to the insurers outstanding liabilities and adequate to meet its financial needs, the following factors, among others, must be considered: (1) the size of the insurer as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria; (2) the extent to which the insurers business is diversified among several lines of insurance; (3) the number and size of risks insured in each line of business; (4) the extent of the geographical dispersion of the insurers insured risks; (5) the nature and extent of the insurers reinsurance program; (6) the quality, diversification and liquidity of the insurers investment portfolio; (7) the recent past and projected future trend in the size of the insurers investment portfolio; (8) the surplus as regards policyholders maintained by other comparable insurers; (9) the adequacy of the insurers reserves; and (10) the quality and liquidity of investments in affiliates, which the Commissioner may treat as a disallowed asset whenever in the judgment of the Commissioner the investment so warrants.
 (a) Subject to the limitation contained in this section and in addition to the powers which the Commissioner has under chapters 3 and 5 of this title relating to the examination of insurers, the Commissioner has the power to examine any insurer registered under section 325 and its affiliates to ascertain the financial condition of the insurer, including the enterprise risk to the insurer by the ultimate controlling party, or by any entity or combination of entities within the insurance holding company system, or by the insurance holding company system on a consolidated basis. (b)  (1) The Commissioner may order any insurer registered under section 325 to produce such records, books, or other information papers in the possession of the insurer or its affiliates as are reasonably necessary to determine compliance with this chapter. (2) To determine compliance with this chapter, the Commissioner may order any insurer registered under section 325 to produce information not in the possession of the insurer if the insurer can obtain access to such information pursuant to contractual relationships, statutory obligations, or other method. If the insurer cannot obtain the information requested by the Commissioner, the insurer shall provide the Commissioner a detailed explanation of the reason that the insurer cannot obtain the information and the identity of the holder of information. Whenever it appears to the Commissioner that the detailed explanation is without merit, the Commissioner may require, after notice and hearing, the insurer to pay a maximum penalty of $5,000, or may suspend or revoke the insurers license. (c) The Commissioner may hire at the registered insurers expense such attorneys, actuaries, accountants and other experts not otherwise a part of the Commissioners staff as are reasonably necessary to assist in the conduct of the examination under subsection (a). Any persons so retained is under the direction and control of the Commissioner and shall act in a purely advisory capacity. (d) Each registered insurer producing for examination records, books and papers pursuant to subsections (a) and (b) are liable for and shall pay the expense of examination in accordance with chapter 5, section 106 of this title. (e) If the insurer fails to comply with an order, the Commissioner may examine the affiliates to obtain the information. The Commissioner also may issue subpoenas, to administer oaths, and to examine under oath any person for purposes of determining compliance with this section. Upon the failure or refusal of any person to obey a subpoena, the Commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order is punishable as contempt of court. Every person is obliged to attend as a witness at the place specified in the subpoena, when subpoenaed, anywhere within the Territory. A person is entitled to the same fees and mileage, if claimed, as a witness in any court of competent jurisdiction in the Territory, and fees, mileage, and actual expense, if any, necessarily incurred in securing the attendance of witnesses, and their testimony must be itemized and charged against, and be paid by, the company being examined.
 (a) With respect to any insurer registered under section 325, and in accordance with subsection (c), the Commissioner may participate in a supervisory college for any domestic insurer that is part of an insurance holding company system with international operations in order to determine compliance by the insurer with this chapter. The powers of the Commissioner with respect to supervisory colleges include, but are not limited to, the following: (1) initiating the establishment of a supervisory college; (2) clarifying the membership and participation of other supervisors in the supervisory college; (3) clarifying the functions of the supervisory college and the role of other regulators, including the establishment of a group-wide supervisor; (4) coordinating the ongoing activities of the supervisory college, including planning meetings, supervisory activities, and processes for information sharing; and (5) establishing a crisis management plan. (b) Each registered insurer subject to this section is liable for and shall pay the reasonable expenses of the Commissioners participation in a supervisory college in accordance with section 328(c), including reasonable travel expenses. For purposes of this section, a supervisory college may be convened as either a temporary or permanent forum for communication and cooperation between the regulators charged with the supervision of the insurer or its affiliates, and the Commissioner may establish a regular assessment to the insurer for the payment of these expenses. (c) In order to assess the business strategy, financial position, legal and regulatory position, risk exposure, risk management and governance processes, and as part of the examination of individual insurers in accordance with section 327, the Commissioner may participate in a supervisory college with other regulators charged with supervision of the insurer or its affiliates, including other state, federal and international regulatory agencies. The Commissioner may enter into agreements in accordance with section 330(c) providing the basis for cooperation between the Commissioner and the other regulatory agencies, and the activities of the supervisory college. Nothing in this section delegates to the supervisory college the authority of the Commissioner to regulate or supervise the insurer or its affiliates within its jurisdiction.
 (a) The Commissioner may act as the group-wide supervisor for any internationally active insurance group in accordance with the provisions of this section. However, the Commissioner may otherwise acknowledge another regulatory official as the group-wide supervisor where the internationally active insurance group: (1) does not have substantial insurance operations in the United States; (2) has substantial insurance operations in the United States, but not in the Virgin Islands; (3) has substantial insurance operations in the United States and the Virgin Islands, but the Commissioner has determined pursuant to the factors set forth in subsections (b) and (f) that the other regulatory official is the appropriate group-wide supervisor; or (4) an insurance holding company system that does not otherwise qualify as an internationally active insurance group may request that the Commissioner make a determination or acknowledgment as to a group-wide supervisor pursuant to this section. (b) In cooperation with other state, federal and international regulatory agencies, the Commissioner shall identify a single group-wide supervisor for an internationally active insurance group. The Commissioner may determine that the Commissioner is the appropriate group-wide supervisor for an internationally active insurance group that conducts substantial insurance operations concentrated in the Territory. However, the Commissioner may acknowledge that a regulatory official from another jurisdiction is the appropriate group-wide supervisor for the internationally active insurance group. The Commissioner shall consider the following factors when making a determination or acknowledgment under this subsection: (1) the place of domicile of the insurers within the internationally active insurance group that hold the largest share of the groups written premiums, assets or liabilities; (2) the place of domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group; (3) the location of the executive offices or largest operational offices of the internationally active insurance group; (4) whether another regulatory official is acting or is seeking to act as the group-wide supervisor under a regulatory system that the Commissioner determines to be: (A) substantially similar to the system of regulation provided under the laws of the Virgin Islands; or (B) otherwise sufficient in terms of providing for group-wide supervision, enterprise risk analysis, and cooperation with other regulatory officials; and (5) whether another regulatory official acting or seeking to act as the group-wide supervisor provides the Commissioner with reasonably reciprocal recognition and cooperation. (6) However, a commissioner identified under this section as the group-wide supervisor may determine that it is appropriate to acknowledge another supervisor to serve as the group-wide supervisor. The acknowledgment of the group-wide supervisor must be made after consideration of the factors listed in paragraph (1) through (5), and must be made in cooperation with and subject to the acknowledgment of other regulatory officials involved with supervision of members of the internationally active insurance group, and in consultation with the internationally active insurance group. (c) Notwithstanding any other provision of law, when another regulatory official is acting as the group-wide supervisor of an internationally active insurance group, the Commissioner shall acknowledge that regulatory official as the group-wide supervisor. However, if a material change in the internationally active insurance group results in the internationally active insurance groups insurers domiciled in the Virgin Islands holding the largest share of the groups premiums, assets or liabilities, or the Virgin Islands being the place of domicile of the top-tiered insurers in the insurance holding company system of the internationally active insurance group, the Commissioner shall make a determination or acknowledgment as to the appropriate group-wide supervisor for such an internationally active insurance group pursuant to subsection (b). (d) Pursuant to section 327, the Commissioner may collect from any insurer registered pursuant to section 325 all information necessary to determine whether the Commissioner may act as the group-wide supervisor of an internationally active insurance group or if the Commissioner may acknowledge another regulatory official to act as the group-wide supervisor. Before issuing a determination that an internationally active insurance group is subject to group-wide supervision by the Commissioner, the Commissioner shall notify the insurer registered pursuant to section 325 and the ultimate controlling person within the internationally active insurance group. The internationally active insurance group has not less than 30 days to provide the Commissioner with additional information pertinent to the pending determination. The Commissioner shall publish on its internet website the identity of internationally active insurance groups that the Commissioner has determined are subject to group-wide supervision by the Commissioner. (e) If the Commissioner is the group-wide supervisor for an internationally active insurance group, the Commissioner may engage in any of the following group-wide supervision activities: (1) assess the enterprise risks within the internationally active insurance group to ensure that: (A) the material financial condition and liquidity risks to the members of the internationally active insurance group that are engaged in the business of insurance are identified by management; and (B) reasonable and effective mitigation measures are in place; (2) request, from any member of an internationally active insurance group subject to the Commissioners supervision, information necessary and appropriate to assess enterprise risk, including, but not limited to, information about the members of the internationally active insurance group regarding: (A) governance, risk assessment and management; (B) capital adequacy, and (C) material intercompany transactions; (3) coordinate and, through the authority of the regulatory officials of the jurisdictions where members of the internationally active insurance group are domiciled, compel development and implementation of reasonable measures designed to ensure that the internationally active insurance group is able to timely recognize and mitigate enterprise risks to members of such internationally active insurance group that are engaged in the business of insurance; (4) communicate with other state, federal and international regulatory agencies for members within the internationally active insurance group and share relevant information subject to the confidentiality provisions of section 330, through supervisory colleges as set forth in section 328 or otherwise; (5) enter into agreements with or obtain documentation from any insurer registered under section 325, any member of the internationally active insurance group, and any other state, federal and international regulatory agencies for members of the internationally active insurance group, providing the basis for or otherwise clarifying the Commissioners role as group-wide supervisor, including provisions for resolving disputes with other regulatory officials. Such agreements or documentation may not serve as evidence in any proceeding that any insurer or person within an insurance holding company system not domiciled or incorporated in the Virgin Islands is doing business in the Virgin Islands or is otherwise subject to jurisdiction of the Virgin Islands; and (6) other group-wide supervision activities, consistent with the authorities and purposes enumerated above, as considered necessary by the Commissioner. (f) If the Commissioner acknowledges that another regulatory official from a jurisdiction that is not accredited by the NAIC is the group-wide supervisor, the Commissioner may reasonably cooperate, through supervisory colleges or otherwise, with group-wide supervision undertaken by the group-wide supervisor, if: (1) The Commissioners cooperation is in compliance with the laws of the Virgin Islands; and (2) The regulatory official acknowledged as the group-wide supervisor also recognizes and cooperates with the Commissioners activities as a group-wide supervisor for other internationally active insurance groups where applicable. Where such recognition and cooperation is not reasonably reciprocal, the Commissioner may refuse recognition and cooperation. (g) The Commissioner may enter into agreements with or obtain documentation from any insurer registered under section 325, any affiliate of the insurer, and other state, federal and international regulatory agencies for members of the internationally active insurance group that provide the basis for or otherwise clarify a regulatory officials role as group-wide supervisor. (h) The Commissioner may promulgate regulations necessary for the administration of this section. (i) A registered insurer subject to this section is liable for and shall pay the reasonable expenses of the Commissioners participation in the administration of this section, including the engagement of attorneys, actuaries and any other professionals and all reasonable travel expenses.
 (a) Documents, materials or other information in the possession or control of the Division of Banking, Insurance and Financial Regulations that are obtained by or disclosed to the Commissioner or any other person in the course of an examination or investigation made pursuant to section 327 and all information reported or provided to the Division Banking, Insurance and Financial Regulation pursuant to section 323(b)(12) and (13), section 325, section 326 and section 329 are confidential by law and privileged, are not subject to examination by the public, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. However, the Commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. The Commissioner may not otherwise make the documents, materials or other information public without the prior written consent of the insurer to which it pertains unless the Commissioner, after giving the insurer and its affiliates who are affected thereby notice and opportunity to be heard, determines that the interest of policyholders shareholders or the public is served by the publication thereof, in which event the Commissioner may publish all or any part in such manner as may be considered appropriate. (b) Neither the Commissioner nor any person who received documents, materials or other information while acting under the authority of the Commissioner or with whom the documents, materials or other information are shared, are permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject to subsection (a). (c) In order to assist in the performance of the Commissioners duties: (1) The Commissioner may share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (a), with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with local, state, federal, and international law enforcement authorities, including members of any supervisory college described in section 328. if the recipient agrees in writing to maintain the confidentiality and privileged status of the document, material or other information, and has verified in writing the legal authority to maintain confidentiality. (2) Notwithstanding paragraph (1), the Commissioner may share confidential and privileged documents, material, or information reported pursuant to section 325(l) only with commissioners of states having statutes or regulations substantially similar to subsection (a) and who have agreed in writing not to disclose such information. (3) The Commissioner may receive documents, materials or information, including otherwise confidential and privileged documents, materials or information from the NAIC and its affiliates and subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and (4) The Commissioner shall enter into written agreements with the NAIC governing sharing and use of information provided pursuant to this chapter consistent with this subsection that must: (A) specify procedures and protocols regarding the confidentiality and security of information shared with the NAIC and its affiliates and subsidiaries, including procedures and protocols for sharing by the NAIC with other state, federal or international regulators; (B) specify that ownership of information shared with the NAIC and its affiliates and subsidiaries remains with the Commissioner and the NAICs use of the information is subject to the direction of the Commissioner; (C) require prompt notice to be given to an insurer whose confidential information in the possession of the NAIC is subject to a request or subpoena to the NAIC for disclosure or production; and (D) require the NAIC and its affiliates and subsidiaries to consent to intervention by an insurer in any judicial or administrative action in which the NAIC and its affiliates and subsidiaries may be required to disclose confidential information about the insurer shared with the NAIC and its affiliates and subsidiaries. (d) The sharing of information by the Commissioner does not constitute a delegation of regulatory authority or rulemaking, and the Commissioner is solely responsible for the administration, execution and enforcement of the provisions of this chapter. (e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information may occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subsection (c). (f) Documents, materials or other information in the possession or control of the NAIC are confidential by law and privileged, are not subject to examination by the public, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action.
 The Commissioner may, upon notice and opportunity for all interested persons to be heard, issue such rules, regulations and orders as are necessary to carry out the provisions of this chapter.
 (a) Whenever it appears to the Commissioner that any insurer or any director, officer, employee or agent thereof has committed or is about to commit a violation of this chapter or of any rule, or order issued by the Commissioner, the Commissioner may, in accordance with the provisions of chapter 3, section 55 of this title, apply to any appropriate court of competent jurisdiction in order to obtain an order enjoining the insurer or director, officer, employee or agent thereof from violating or continuing to violate this chapter or any rule, or order, and for such other equitable relief as the nature of the case and the interest of the insurers policyholders, creditors and shareholders or the public may require. (b) No security that is the subject of any agreement or arrangement regarding acquisition, or which is acquired or to be acquired, in contravention of the provisions of this chapter or of any rule, or order issued by the Commissioner may be voted at any shareholders meeting, or may be counted for quorum purposes, and any action of shareholders requiring the affirmative vote of a percentage of shares may be taken as though the securities were not issued and outstanding; but no action taken at any such meeting may be invalidated by the voting of the securities, unless the action materially affects control of the insurer or unless the courts of this Territory have so ordered. If an insurer or the Commissioner has reason to believe that any security of the insurer has been or is about to be acquired in contravention of this chapter or of any rule, or order issued by the Commissioner; the insurer or the Commissioner may apply to any appropriate court of competent jurisdiction in the jurisdiction in which the insurer has its principle place of business to enjoin any offer, request, invitation, agreement or acquisition made in contravention of section 323 or any rule, or order issued by the Commissioner to enjoin the voting of any security so acquired, to void any vote of the security already cast at any meeting of shareholders and for such other equitable relief as the nature of the case and the interest of the insurers policyholders, creditor and shareholders or the public may require. (c) If a person has acquired or is proposing to acquire any voting securities in violation of this chapter or any rule, or order issued by the Commissioner, any appropriate court of competent jurisdiction in the jurisdiction in which the insurer has its principal place of business may, on such notice as the court deems appropriate, upon the application of the insurer or the Commissioner, seize or sequester any voting securities of the insurer owned directly or indirectly by the person, and issue such order as may be appropriate to effectuate this chapter. (d) Notwithstanding any other provisions of law, for the purposes of this chapter the situs of the ownership of the securities of domestic insurers in the Virgin Islands.
 (a) Any insurer failing, without just cause, to file any registration statement as required in this chapter shall, after notice and hearing, pay a penalty of not more than $1,000 for each days delay, to be recovered by the Commissioner of Insurance and the penalty so recovered must be paid into the Insurance Guaranty Fund. The maximum penalty under this section is $25,000. The Commissioner may reduce the penalty if the insurer demonstrates to the Commissioner that the imposition of the penalty constitutes a financial hardship to the insurer. (b) Every director and officer of an insurance holding company system who knowingly violates, participates in. or assents to. or who knowingly permits any of the officers or agents of the insurer to engage in transactions or make investments that are not properly reported or submitted pursuant to sections 325(a), 326(a)(2), or 326(b), or which violate this chapter, shall pay, in their individual capacity, a civil forfeiture of not more than $5,000 per violation, after notice and hearing before the Commissioner. In determining the amount of the civil forfeiture, the Commissioner shall take into account the appropriateness of the forfeiture with respect to the gravity of the violation, the history of previous violations, and such other matters as justice may require. (c) Whenever it appears to the Commissioner that any insurer subject to this chapter or any director, officer, employee or agent thereof has engaged in any transaction or entered into a contract that is subject to section 326 and that would not have been approved had the approval been requested, the Commissioner may order the insurer to cease and desist immediately any further activity under that transaction or contract. After notice and hearing, the Commissioner may also order the insurer to void any contracts and restore the status quo if the action is in the best interest of the policyholders, creditors or the public. (d) Whenever it appears to the Commissioner that any insurer or any director, officer, employee or agent thereof has committed a willful violation of this chapter, the Commissioner may cause criminal proceedings to be instituted, in any appropriate court of competent jurisdiction in the jurisdiction in which the principle office of the insurer is located, against the insurer or the responsible director, officer, employee or agent thereof. Any insurer that willfully violates this chapter may be fined not more than $25,000. Any individual who willfully violates this chapter may be fined in the individuals individual capacity not more than $25,000 or be imprisoned for not less than one year or more than three years, or both. (e) Any officer, director or employee of an insurance holding company system who willfully and knowingly subscribes to or makes or causes to be made any false statements or false reports or false filings with the intent to deceive the Commissioner in the performance of the Commissioners duties under this chapter, upon conviction must be imprisoned for not more than one year or fined not more than $25,000, or both. Any fines imposed must be paid by the officer, director or employee in his individual capacity. (f) Whenever it appears to the Commissioner that any person has committed a violation of section 323 and which prevents the full understanding of the enterprise risk to the insurer by affiliates or by the insurance holding company system, the violation may serve as an independent basis for disapproving dividends or distributions and for placing the insurer under an order of supervision in accordance with chapter 51 of this title.
 Whenever it appears to the Commissioner that any person has committed a violation of this chapter which so impairs the financial condition of a domestic insurer as to threaten insolvency or make the further transaction of business by it hazardous to its policyholders, creditors, shareholders or the public, the Commissioner may proceed as provided in chapter 51 of this title to take possessions of the property of the domestic insurer and to conduct its business.
 (a) If an order for liquidation or rehabilitation of a domestic insurer has been entered, the receiver appointed under the order shall have a right to recover on behalf of the insurer: (1) from any parent corporation or holding company or person or affiliate who otherwise controlled the insurer, the amount of distributions other than distributions of shares of the same class of stock paid by the insurer on its capital stock, or (2) any payment in the form of a bonus, termination settlement or extraordinary lump sum salary adjustment made by the insurer or its subsidiary to a director, officer or employee, where the distribution or payment pursuant to (1) or (2) is made at any time during the one year preceding the petition for liquidation, conservation or rehabilitation, as the case may be, subject to the limitations of section 335(b), (c), and (d). (b) No distribution may be recoverable if the parent or affiliate shows that when paid the distribution was lawful and reasonable, and that the insurer did not know and could not reasonably have known that the distribution might adversely affect the ability of the insurer to fulfil its contractual obligations. (c) Any person who was a parent corporation or holding company or a person who otherwise controlled the insurer or affiliate at the time the distributions were paid are liable up to the amount of distributions or payments under section 335(a) which the person received. Any person who otherwise controlled the insurer at the time the distributions were declared is liable up to the amount of distributions that would have been received if they had been paid immediately. If two or more persons are liable with respect to the same distributions, they are jointly and severally liable. (d) The maximum amount recoverable under this section is the amount needed in excess of all other available assets of the impaired or insolvent insurer to pay the contractual obligations of the impaired or insolvent insurer and to reimburse any guaranty funds. (e) If any person liable under section 335(c) is insolvent or otherwise fails to pay claims due from it, its parent corporation or holding company or person who otherwise controlled it at the time the distribution was paid, is jointly and severally liable for any resulting deficiency in the amount recovered from the parent corporation or holding company or person who otherwise controlled it.
 Whenever it appears to the Commissioner that any person has committed a violation of this chapter that makes the continued operation of an insurer contrary to the interests of policy holders or the public, the Commissioner may, after giving notice and an opportunity to be heard, suspend, revoke or refuse to renew the insurers license or authority to do business in the Territory for such period as the Commissioner finds is required for the protection of policyholders or the public. Any such determination may be accompanied by specific findings of fact and conclusions of law.
 Any person aggrieved by determination, rule, regulation or order or any other action of the Commissioner pursuant to this chapter may appeal in accordance with the procedures set forth in chapter 7 of this title.
 All laws and parts of laws of the Territory inconsistent with this chapter are superseded with respect to matters covered by this chapter.
 If any provision of this chapter or the application thereof to any person or circumstances is held invalid, the invalidity does not affect other provisions or applications of this chapter which can be given effect without the invalid provisions or application, and for this purpose the provisions of this chapter are separable.
 (a) Increase of the capital stock of a domestic stock insurer shall be by amendment of its articles of incorporation. The increase shall not be effective unless and until within six months after filing such amendment with the Lieutenant Governor, as required by section 307 of this title, nor until the increased capital has been fully paid in, in cash, and a certificate certifying such payments has been made in quadruplicate under oath by the insurer's president and secretary and the corporate seal and is filed in the public offices named in section 307 of this title. (b) If the entire increase of the capital stock is purchased in good faith by employees, directors, and agents of the insurer or of its affiliated corporations under an installment purchase plan approved by the Commissioner in advance of the amendment, the Commissioner may extend a period not exceeding twelve months the time within which such increase of capital must be so fully paid in and such certificate so filed. (c) If the increased capital stock is to be distributed as a stock dividend, such increased capital stock may be fully paid in out of any available surplus funds as is provided in section 353 of this title, and such payment shall be effected by a transfer on the insurer's books from its surplus account to its capital account.
 (a) Reduction of the capital stock of a domestic stock insurer shall be by amendment of its articles of incorporation. No such reduction shall be made which results in capital stock less in amount than the minimum required by this title for the kinds of insurance thereafter to be transacted by the insurer. (b) No surplus funds of the insurer resulting from a reduction of its capital stock shall be distributed to stockholders, except as a stock dividend on a subsequent increase of capital stock, or upon dissolution of the insurer, or upon approval by the Commissioner of a distribution upon proof satisfactory to him that the distribution will not impair the interests of policyholders or the insurer's solvency. (c) Upon such reduction of capital stock, the insurer's directors shall call in any outstanding stock certificates required to be changed pursuant thereto, and issue proper certificates in their stead.
 (a) No domestic stock insurer shall pay any cash dividend to stockholders except out of that part of its available surplus funds which is derived from any realized net profit on its business. (b) Such an insurer may pay a stock dividend out of any available surplus funds. (c) Payment of any dividend to stockholders of a domestic stock insurer shall also be subject to all the limitations and requirements governing the payment of dividends by other domestic private corporations. (d) No dividend shall be declared or paid which would reduce the insurer's surplus to an amount less than the minimum required for the kinds of insurance thereafter to be transacted. (e) For the purposes of this chapter surplus funds means the excess of the insurer's assets over its liabilities, including its capital stock as a liability, and available surplus means the excess over the minimum amount of surplus required for the kinds of insurance the insurer is authorized to transact.
 Any director of a domestic stock insurer who votes for or concurs in the declaration or payment of any dividend to stockholders or a reduction of capital stock not authorized by law shall, in addition to any other liability imposed by law, be guilty of a gross misdemeanor.
 (a) If the capital stock of a domestic stock insurer becomes impaired, the Commissioner shall at once determine the amount of the deficiency and serve notice upon the insurer to require its stockholders to make good the deficiency within 90 days after service of such notice. (b) The deficiency shall be made good in cash, or in assets eligible under this title for the investment of the insurer's funds, or by reduction of the insurer's capital stock to an amount not below the minimum required for the kinds of insurance to be thereafter transacted. (c) If the deficiency is not made good and proof thereof filed with the Commissioner within such 90-day period, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title. (d) After service of notice as provided in subsection (a) of this section the insurer shall not issue or deliver any policy until after the deficiency shall have been corrected and proof thereof filed with the Commissioner and approved by him. Any officer or director who violates or knowingly permits the violation of this provision shall be subject to a fine of from $50 to $1,000 for each violation.
 Contributions to the surplus of a domestic stock insurer other than resulting from sale of its capital stock shall not be subject to repayment except out of surplus in excess of the minimum surplus initially required of such an insurer transacting like kinds of insurance.
 (a) Any domestic stock insurer may, if its charter so provides, issue policies entitled to participate from time to time in the earnings of the insurer through dividends. (b) Any classification of its participating policies and of risks assumed thereunder which the insurer may make shall be reasonable. No dividend shall be paid which is inequitable or which unfairly discriminates as between such classifications or as between policies within the same classification. (c) No such insurer shall issue in this territory both participating and nonparticipating policies for the same class of risks; except, that both participating and nonparticipating life insurance policies may be issued if the right or absence of the right to participate is reasonably related to the premium charged. (d) Dividends to participating life insurance policies issued by such insurer shall be paid only out of its surplus funds as defined in subsection (e) of section 353 of this title. Dividends to participating policies for other kinds of insurance shall be paid only out of that part of such surplus funds which is derived from any realized net profits from the insurer's business. (e) No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy.
 (a) Any domestic stock insurer may become a domestic mutual insurer pursuant to such plan and procedure as are approved by the Commissioner in advance of such mutualization. (b) The Commissioner shall not approve any such plan, procedure, or mutualization unless (1) it is equitable to both shareholders and policyholders; (2) it is approved by vote of the holders of not less than three-fourths of the insurer's capital stock having voting rights, and by vote of not less than two-thirds of the insurer's policyholders who vote on such plan, pursuant to such notice and procedure as may be approved by the Commissioner. Such vote may be registered in person, by proxy, or by mail; (3) if a life insurer, the right to vote thereon is limited to those policyholders whose policies have face amounts of not less than $1,000 and have been in force one year or more; (4) mutualization will result in retirement of shares of the insurer's capital stock at a price not in excess of the fair value thereof as determined by competent disinterested appraisers; (5) the plan provides for appraisal and purchase of the shares of any nonconsenting stockholder in accordance with the laws of this territory relating to the sale or exchange of all the assets of a private corporation; (6) the plan provides for definite conditions to be fulfilled by a designated early date upon which such mutualization will be deemed effective; and (7) the mutualization leaves the insurer with surplus funds reasonably adequate to preserve the security of its policyholders and its ability to continue successfully in business in the states in which it is then authorized, and in the kinds of insurance it is then authorized to transact.
 (a) The Commissioner shall not issue a certificate of authority to a domestic mutual insurer unless it has fully qualified therefor under this title, and unless it has met the minimum requirements for the kind of insurance it proposes to transact as provided in this chapter. (b) All applications for insurance submitted by such an insurer as fulfilling qualification requirements shall be bona fide applications from persons resident in this territory covering lives, property, or risks resident or located in this territory. (c) All qualifying premiums collected and initial surplus funds of such an insurer shall be in cash. Any deposit made by such an insurer in lieu of applications, premiums, and initial surplus funds, shall be in cash or in securities eligible for the investment of the capital of a domestic stock insurer transacting the same kind of insurance.
 (a) When newly organized a domestic mutual insurer may be authorized to transact any one of the kinds of insurance listed in the schedule contained in subsection (b) of this section. (b) When applying for an original certificate of authority the insurer must be otherwise qualified therefor under this title, and must have received and accepted bona fide applications as to substantial insurable subjects for insurance coverage of a substantial character of the kind of insurance proposed to be transacted; must have collected in cash the full premium therefor at a rate not less than usually charged by stock insurers for comparable coverages; and must have surplus funds on hand as of the date such insurance coverages are to become effective, or, in lieu of such applications, premiums, and surplus, may deposit surplus, all in accordance with that part of the following schedule which applies to the one kind of insurance the insurer then proposes to transact: SCHEDULE (A)(B)(C)(D)(E)(F)(G)(H)Kind ofinsur-anceMinimumno. ofapplicantsacceptedMinimumno. ofsubjectscoveredMinimumpremiumcollectedMinimumamountins. eachsubjectMaximumamount ofins. eachsubject (v)MinimumSurplusFundsDepositof sur-plus inlieu (vi)Life (i)500500annual$1,000$2,500$25,000$50,000    1025  Disability (ii)500500quart.weeklyindem.weeklyindem.25,00050,000Property (iii)100250annual1,0003,00025,00050,000Vehicle (iv)200500annual1,00010,000150,000150,000Casualty (v)250250annual1,00010,000150,000200,000 The following provisos are respectively applicable to the foregoing schedule and provisions as indicated by like roman numerals appearing in such schedule: (1) No group insurance, nor term policies for terms of less than ten years shall be included. (2) No group or blanket or family plans of insurance shall be included. In lieu of weekly indemnity a like premium value in medical, surgical and hospital benefits may be provided. Any accidental death or dismemberment benefit provided shall not exceed $2,500. (3) Only insurance of the owner's interest in real property may be included, and all such coverages must be in compliance with the provisions of section 464(b) of this title. (4) Must include insurance of legal liability for bodily injury and property damage, to which the maximum and minimum insured amounts apply. (5) The maximums provided for in column (F) are net of applicable reinsurance. (6) The deposit of surplus in the amount specified in column (H) must thereafter be maintained unimpaired. The deposit is subject to the provisions of chapter 29 of this title (deposits of insurers).
 A domestic mutual insurer may be authorized to transact kinds of insurance in addition to that for which it was originally authorized, if it has otherwise complied with the provisions of this title therefor, and while it possesses and maintains surplus funds in aggregate amount not less than the minimum amount of capital and special surplus, if any, required under this title of a domestic stock insurer authorized to transact like kinds of insurance.
 A domestic mutual insurer on the cash premium plan shall at all times have and maintain surplus funds, representing the excess of its assets over its liabilities, in amount not less than the aggregate of  (1) the amount of any surplus funds deposited by it with the Commissioner to qualify for its original certificate of authority; and (2) the amount of any additional surplus required of it pursuant to sections 403, 461 and 462 of this title for authority to transact additional kinds of insurance.
 (a) Each holder of one or more insurance contracts issued by a domestic mutual insurer, other than a contract of reinsurance, is a member of the insurer, with the rights and obligations of such membership, and each insurance contract so issued shall effectively so stipulate. (b) Any person, government or governmental agency, state or political subdivision thereof, public or private corporation, board, association, estate, trustee or fiduciary may be a member of a mutual insurer.
 (a) A domestic mutual insurer is owned by and shall be operated in the interest of its members. (b) Each member is entitled to one vote in the election of directors and on matters coming before corporate meetings of members, subject to such reasonable minimum requirements as to duration of membership and amount of insurance held as may be made in the insurer's bylaws. The person named as the policyholder in any group insurance policy issued by such insurer shall be deemed the member, and shall have but one such vote regardless of the number of individuals insured by such policy. (c) With respect to the management, records, and affairs of the insurer, a member shall have the same character of rights and relationship as a stockholder has toward a domestic stock insurer.
 A domestic mutual insurer shall adopt bylaws for the conduct of its affairs. Such bylaws, and any modification thereof, shall forthwith be filed with the Commissioner. The Commissioner shall disapprove any such bylaws, or modifications thereof, if he finds after a hearing thereon, that it is not in compliance with the laws of this territory, and he shall forthwith communicate such disapproval to the insurer. No such bylaws, or modification, so disapproved shall be effective during the existence of such disapproval.
 (a) Notice of the time and place of the annual meeting of members of a domestic mutual insurer shall be given by imprinting such notice plainly on the policies issued by the insurer. (b) Except as provided in subsection (c) of this section, any change of the time or place of the annual meeting shall be made only by annual meeting of members. Notice of such change may be given (1) by imprinting such new time or place on all policies which will be in effect as of the time of such changed meeting; or (2) unless the Commissioner otherwise orders, notice of the new time or place need be given only through policies issued after the time of the annual meeting at which such change was made and in premium notices and renewal certificates issued during the 24 months immediately following such meeting. (c) In the event of an emergency the board of directors of such insurer, with the approval of the Commissioner, may change the time and place of the annual meeting. Notice of such change shall be given by mailing the details of the change to policyholders two weeks prior to the meeting.
 (a) A member of a domestic mutual insurer may vote in person or by proxy given another member on any matter coming before a corporate meeting of members; Provided, however, That an officer of the insurer shall not hold or vote the proxy of any member. (b) No such proxy shall be valid beyond the earlier of the following dates (1) the date of expiration set forth in the proxy; (2) the date of termination of membership; or (3) five years from the date of execution of the proxy. (c) No member's vote upon any proposal to divest the insurer of its business and assets, or the major part thereof, shall be registered or taken except in person or by a proxy newly executed and specific as to the matter to be voted upon.
 No individual shall be disqualified to be a director of a domestic mutual insurer by reason of his holding public office. Adjudication as a bankrupt or taking the benefit of any insolvency law or making a general assignment for the benefit of creditors disqualifies an individual from being or acting as a director.
 (a) For any calendar year after its first two full calendar years of operation, no domestic mutual insurer on the cash premium plan, other than one issuing nonassessable policies, shall incur any costs or expense in the writing or administration of property, disability, and casualty insurance (other than boiler and machinery or elevator) transacted by it which, exclusive of losses paid, loss adjustment expenses, investment expenses, dividends, and taxes exceeds the sum of (1) forty percent of the net premium income during that year after deducting therefrom net earned reinsurance premiums for such year, plus (2) all of the reinsurance commissions received on reinsurance ceded by it. (b) The bylaws of every domestic mutual property insurer on the assessment premium plan shall impose a reasonable limitation upon its expenses.
 The officers and directors of an insurer violating section 411 of this title shall be jointly and severally liable to the insurer for any excess of expenses incurred. If the insurer fails to exercise reasonable diligence or refuses to enforce such liability, the Commissioner may prosecute action thereon for the benefit of the insurer. Such failure or refusal constitutes grounds for revocation of the insurer's certificate of authority.
 No action to recover, or on account of, any salary or other compensation due or claimed to be due any officer or director of a domestic mutual insurer, or on any note or agreement relative thereto, shall be brought against such insurer after 12 months after the date on which such salary or compensation, or any installment thereof, first accrued.
 (a) Each member of a domestic mutual insurer, except as otherwise provided in this chapter, shall have a contingent liability, pro rata and not one for another, for the discharge of its obligations. The contingent liability shall be in such maximum amount as is stated in the insurer's articles of incorporation, but shall be not less than one, nor more than five, additional premiums for the member's policy at the annual premium rate and for a term of one year. (b) Every policy issued by the insurer shall contain a statement of the contingent liability. (c) Termination of the policy of any such member shall not relieve the member of contingent liability for his proportion of the obligations of the insurer which accrued while the policy was in force.
 (a) If at anytime the assets of a domestic mutual insurer doing business on the cash premium plan are less than its liabilities and the minimum surplus, if any, required of it by this title as prerequisite for continuance of its certificate of authority, and the deficiency is not cured from other sources, its directors may, if approved by the Commissioner, make an assessment only on its members who at any time within the 12 months immediately preceding the date such assessment was authorized by its directors held policies providing for contingent liability. (b) Such an assessment shall be for such an amount of money as is required, in the opinion of the Commissioner, to render the insurer fully solvent, but not to result in surplus in excess of 5 percent of the insurer's liabilities as of the date of the assessment. (c) A member's proportionate part of any such assessment shall be computed by applying to the premium earned, during the period since the deficiency first appeared, on his contingently liable policy or policies the ratio of the total assessment to the total premium earned during such period on all contingently liable policies which are subject to the assessment. (d) No member shall have an offset against any assessment for which he is liable on account of any claim for unearned premium or losses payable.
 The contingent liability of members of a domestic mutual insurer doing business on the assessment premium plan shall be called upon and enforced by its directors as provided in its bylaws.
 Any contingent liability of members of a domestic mutual insurer to assessment does not constitute an asset of the insurer in any determination of its financial condition.
 As to life insurance, any portion of an assessment of contingent liability upon a policyholder which remains unpaid following notice of such assessment, demand for payment, and lapse of a reasonable waiting period as specified in such notice, may, if approved by the Commissioner, be secured by placing a lien on the reserves held by the insurer to the credit of such policyholder.
 (a) A domestic mutual insurer on the cash premium plan, after it has established a surplus not less in amount than the minimum capital funds required of a domestic stock insurer to transact like kinds of insurance, and for so long as it maintains such surplus, may extinguish the contingent liability of its members to assessment and omit provisions imposing contingent liability in all policies currently issued. (b) Any deposit made with the Commissioner as a prerequisite to the insurer's certificate of authority may be included as part of the surplus required in this section. (c) When the surplus has been so established and the Commissioner has so ascertained, he shall issue to the insurer, at its request, his certificate authorizing the extinguishment of the contingent liability of its members and the issuance of policies free therefrom. (d) While it maintains surplus funds in amount not less than the minimum capital required of a domestic stock insurer authorized to transact like kinds of insurance, and subject to the requirements of section 462(b) of this title as to special surplus, a foreign or alien mutual insurer on the cash premium plan may, if consistent with its charter and the laws of its domicile, issue nonassessable policies covering subjects located, resident, or to be performed in this territory.
 The Commissioner shall not authorize a domestic mutual insurer so to extinguish the contingent liability of any of its members or in any of its policies to be issued, unless it qualifies to and does extinguish such liability of all its members and in all such policies for all kinds of insurance transacted by it. Except, that if required by the laws of a state in which such an insurer is transacting insurance as an authorized insurer, the insurer may issue policies providing for the contingent liability of such of its members as may acquire such policies in such state, and need for extinguishing the contingent liability applicable to policies theretofore in force in such state.
 (a) The Commissioner shall revoke the authority of a domestic mutual insurer so to extinguish the contingent liability of its members if (1) at any time the insurer's assets are less than the sum of its liabilities and the surplus required for such authority; or (2) the insurer, by resolution of its directors approved by its members, requests that the authority be revoked. (b) Upon revocation of such authority for any cause, the insurer shall not thereafter issue any policies without contingent liability, nor renew any policies then in force without written endorsement thereon providing for contingent liability.
 (a) The directors of a domestic mutual insurer on the cash premium plan may from time to time apportion and pay to its members as entitled thereto, dividends only out of that part of its surplus funds which are in excess of its required minimum surplus and which represent net realized savings and net realized earnings from its business. (b) Any classification of its participating policies and of risks assumed thereunder which the insurer may make shall be reasonable. No dividend shall be paid which is inequitable, or which unfairly discriminates as between such classifications or as between policies within the same classification. (c) No dividend, otherwise earned, shall be made contingent upon the payment of renewal premium on any policy.
 (a) If its articles of incorporation so provide, a domestic mutual insurer on the cash premium plan may, while it is authorized to issue policies without contingent liability to assessment, issue policies not entitled to participate in the insurer's savings and earnings. (b) Such insurer shall not issue in this territory both participating and nonparticipating policies for the same class of risks; except, that both participating and nonparticipating life insurance policies may be issued if the right or absence of the right to participate is reasonably related to the premium charged.
 (a) A domestic mutual insurer on the cash premium plan may, with the Commissioner's advance approval and without the pledge of any of its assets, borrow money to defray the expenses of its organization or for any purpose required by its business, upon an agreement that such money and such interest thereon as may be agreed upon, but not exceeding 6 percent per annum, shall be repaid only out of the insurer's earned surplus in excess of its required minimum surplus. (b) Any money so borrowed shall not form a part of the insurer's legal liabilities or be the basis of any setoff; but until repaid, financial statements filed or published by the insurer shall show as a footnote thereto the amount thereof then unpaid together with interest thereon accrued but unpaid. (c) The Commissioner's approval of such loan, if granted, shall specify the amount to be borrowed, the purpose for which the money is to be used, the terms and form of the loan agreement, the date by which the loan must be completed, and such other related matters as the Commissioner shall deem proper. If the money is to be borrowed upon multiple agreements, the agreements shall be serially numbered. No loan agreement or series thereof shall have or be given any preferential rights over any other such loan agreement or series. No commission or promotional expense shall be incurred or be paid on account of any such loan.
 (a) The insurer may repay any loan received pursuant to section 424 of this title, or any part thereof as approved by the Commissioner, only out of its funds which represent such loan or realized net earned surplus. No repayment shall be made which reduces the insurer's surplus below the minimum surplus required for the kinds of insurance transacted. (b) The insurer shall repay any such loan or the largest possible part thereof when the purposes for which such funds were borrowed have been fulfilled and when the insurer's surplus is adequate to so repay without unreasonable impairment of the insurer's operations. (c) No repayment of such loan shall be made unless approved by the Commissioner. The insurer shall notify the Commissioner in writing, not less than 60 days in advance, of its intention to repay such loan or any part thereof, and the Commissioner shall forthwith ascertain whether the insurer's financial condition is such that the repayment can properly be made. (d) Upon dissolution and liquidation of the insurer, after the retirement of all its other outstanding obligations the holders of any such loan agreements then remaining unpaid shall be entitled to payment before any distribution of surplus is made to the insurer's members.
 (a) If the assets of a domestic mutual insurer on the cash premium plan fall below the amount of its liabilities, plus the amount of any surplus required by this title for the kinds of insurance authorized to be transacted, the Commissioner shall at once ascertain the amount of the deficiency and serve notice upon the insurer to cure the deficiency within 90 days after such service of notice. (b) If the deficiency is not made good in cash or in assets eligible under this title for the investment of the insurer's funds, and proof thereof filed with the Commissioner within such 90-day period, the insurer shall be deemed insolvent and shall be proceeded against as authorized by this title. (c) If the deficiency is not made good the insurer shall not issue or deliver any policies after the expiration of such 90-day period. Any officer or director who violates or knowingly permits the violating of this provision shall upon conviction, be subject to a fine of from $50 to $1,000 for each violation.
 (a) No domestic mutual insurer shall hereafter be converted, changed, or reorganized as a stock corporation. (b) Such an insurer may be wholly reinsured in and its assets transferred to and its liabilities assumed by another mutual or stock insurer under such terms and conditions as are approved by the Commissioner in advance of such reinsurance. (c) The Commissioner shall not approve any such reinsurance agreement which does not determine the amount of and make adequate provision for paying to policyholders of such mutual insurer, reasonable compensation for their equities as owners of such insurer, such compensation to be apportioned to policyholders as identified and in the manner prescribed in section 428 of this title.
 (a) Upon the liquidation of a domestic mutual insurer, its assets remaining after discharge of its indebtedness and policy obligations shall be distributed to its members who were such within the 36 months prior to the last termination of its certificate of authority. (b) The distributive share of each such member shall be in the proportion that the aggregate premiums earned by the insurer on the policies of the member during the combined periods of his membership, bear to the aggregate of all premiums so earned on the policies of all such members. If a life insurer, the insurer shall make a reasonable classification of its life insurance policies so held by such members and a formula based upon such classification for determining the equitable distributive share of each such member. Such classification and formula shall be subject to the Commissioner's approval.
 Individuals, partnerships, trustees and all corporations of this Territory, herein designated subscribers, are hereby authorized to exchange reciprocal or interinsurance contracts with each other and with individuals, partnerships, trustees and corporations of other States, districts, provinces and countries, for any or all of the kinds of business for which a company may be formed or authorized to transact under the provisions of this title, except life insurance. Such contracts and the exchange thereof and such subscribers, their attorneys in fact and representatives shall be regulated by this chapter, and by no other statute of this Territory relating to insurance, except as herein otherwise provided.
 Such contracts may be executed by an attorney in fact, herein designated attorney, duly authorized and acting for such subscribers, and such attorney may be a corporation. The office or offices of such attorney, herein defined as an exchange, shall be maintained at such place or places as may be designated by the subscribers in the power of attorney.
 Such attorney shall file with the Commissioner of Insurance of this Territory a declaration, verified by the oath of its president or oaths of its treasurer and secretary setting forth: (a) The name of the attorney and the name or designation of the exchange under which such contracts are to be issued, which name or designation shall not be so similar to any other name or designation therefore adopted by any attorney or by any insurance organization in this Territory so as to confuse or deceive; (b) The kind or kinds of insurance to be effected or exchanged; (c) A copy of the form of policy contract or agreement under or by which such insurance is to be effected or exchanged and forms of application therefor; (d) A certified copy of the power of attorney or other authorization of such attorney under or by which such attorney is to effect or exchange such insurance contracts; (e) The location of the office or offices from which such contracts or agreements are to be issued; (f) That except as to the kinds of insurance hereinafter specifically mentioned in this paragraph, applications have been made for indemnity upon at least twenty-five (25) separate risks aggregating not less than one million dollars ($1,000,000) represented by executed contracts or bona fide applications to become concurrently effective. In the case of automobile insurance, applications shall have been made for indemnity upon at least five hundred motor vehicles or for insurance aggregating not less than one-half million dollars ($500,000.00) represented by executed contracts or bona fide applications to become concurrently effective on any or all classes of automobile insurance effected by said subscribers through said attorneys. The Commissioner of Insurance, in his discretion, may require greater or fewer applications aggregating higher or lesser sums; (g) That there shall be maintained at the exchange, available for the payment of losses, assets conforming to the requirements of section 435 of this chapter; (h) A financial statement under oath in form prescribed by the Commissioner of Insurance; (i) An instrument authorizing service of process as provided for in this chapter; and (j) Where the principal office of the attorney is located in another jurisdiction, a certificate from the proper official of the jurisdiction where the principal office is maintained, that the subscribers and the attorney have complied with all provisions of law and are authorized in that jurisdiction to transact the classes of business which are sought to be transacted in this Territory.
 Concurrently with the filing of the declaration provided for by section 433 of this chapter, the attorney shall file with the Commissioner of Insurance an instrument in writing duly executed by him for said subscribers, conditioned that upon the issuance of a Certificate of Authority provided for in section 411 of this chapter action may be brought in the Territory, and service of process may be had upon the Commissioner of Insurance in all actions or proceedings in this Territory arising out of any policies, contracts or agreements issued, which service shall be valid and binding upon all subscribers exchanging at any time reciprocal or inter-insurance contracts through such attorney. Three copies of such process shall be served and the Commissioner of Insurance shall file one copy in his office, forward one copy to said attorney, and return one copy with his admission of service. Where the principal office of the attorney is located in this Territory, service of process may also be had upon all subscribers by serving the attorney at said office. Service of process shall not be had upon subscribers or any of them in any action or proceeding in this Territory, except in the manner provided in this section and any action or other proceeding may be begun and prosecuted or defended by them under the name or designation adopted by them. A service fee of two dollars ($2) shall accompany each such service and be paid to the Commissioner of Insurance.
 There shall be maintained at all times by the exchange, a reinsurance reserve in cash or securities authorized by the laws of the jurisdiction in which the principal office of the attorney is located for the investment of similar funds of insurance companies doing the same kind of business, in an amount equal to fifty percent (50%) of the net annual premium deposits collected and credited to the accounts of subscribers on policies having one year or less to run and pro rated on those for longer periods, or, in lieu thereof, one hundred percent (100%) of the net unearned premium deposits collected and credited to the accounts of subscribers calculated separately for each policy in force as of any given date. In addition to the reserves provided for in this section, there shall be maintained at all times at the exchange, as assets, a surplus in cash or such securities as aforesaid of not less than the amount of minimum capital and surplus required of a domestic stock insurance company to do the kind or kinds of insurance which it is authorized to write under section 431 of this chapter. There shall also be maintained at all times in the hands of the attorney, as a claim or loss reserve, in cash or such securities as aforesaid, assets sufficient to discharge all liabilities on all outstanding or accrued losses arising under policies issued, which are to be calculated in accordance with the laws of the Territory relating to similar reserves for companies insuring similar risks. If at any time the amounts on hand are less than the foregoing requirements, the subscribers, or their attorney, shall make up the deficiency. Net premium deposits, as used in this chapter, shall be construed to mean the premium deposits made by subscribers after deducting therefrom the amount paid as return premiums upon canceled contracts and reinsurance. If it appears that the amount of funds required in this section has not been accumulated, then the subscribers, or the attorney for them, shall immediately advance such sums as are needed to comply with the provisions of this section, and the funds so advanced shall not be treated as a liability at the exchange, and shall not be withdrawn except with the approval of the chief insurance officer of the jurisdiction wherein the exchange is domiciled, and such advances shall be repaid only out of the surplus, over and above the minimum required by this section. If the subscribers, or their attorney, shall fail to advance sums necessary for the maintenance of such minimum reserves and surplus, within thirty days after receipt of notice from the Commissioner of Insurance to do so, then said Commissioner of Insurance shall take charge of and liquidate or rehabilitate such exchange in the manner provided by law in the case of other insurers; and in the case of an exchange of another jurisdiction said Commissioner of Insurance may revoke its license to transact business in this Territory.
 Each domestic and foreign exchange transacting business in this Territory shall keep and maintain with the Commissioner of Insurance a bond as required by section 207 of this title.
 Such attorney shall, within the time limited for filing the annual statement by insurance companies, transacting the same kind of business, make a report, under oath, to the Commissioner of Insurance for each calendar year in such form as he may prescribe, showing the financial condition of affairs at the office where such contracts are issued, and shall at any reasonable time furnish such additional information and reports as may be required by said Commissioner; provided, however, that the attorney shall not be required to furnish the names and addresses of any subscribers, except in the case of unpaid final judgments. The records, affairs and financial condition of the exchange shall be subject to examination by the Commissioner of Insurance, and such examination shall be at the expense of the office examined. Where the principal office of the attorney is located in another jurisdiction, the Commissioner of Insurance may, in lieu of the examination provided for in this section, accept a certified copy of the report of examination made by the insurance department of the jurisdiction where the principal office is located, or by the insurance department of any other jurisdiction.
 (a) Any corporation now or hereafter organized under the laws of this Territory shall, in addition to the rights, powers and franchises specified in its articles of incorporation, have full power and authority as a subscriber to exchange insurance contracts of the kind and character herein mentioned. The right to exchange such contracts is hereby declared to be incidental to the purposes for which such corporations are organized, and as much granted as the rights and powers expressly conferred. (b) All persons, firms or corporations holding property in trust may insure the same at a reciprocal exchange and, in their representative capacity, be entitled to the rights of a subscriber.
 Any attorney who shall exchange any contracts of insurance of the kind and character specified in this chapter, or any attorney or representative of such attorney who shall solicit or negotiate any applications for same, without the attorney first complying with the foregoing provisions, shall be subject to a fine of not less than $100 nor more than $1,000 if so ordered, after hearing, by the Commissioner of Insurance. The District Court shall have jurisdiction to restrain any violation of this chapter in an action brought for that purpose by the Commissioner of Insurance, and may appoint a receiver for such assets of any person, partnership, corporation, or association of persons as are actually employed in the conduct of business in violation of this chapter. For the purposes of organization, and upon issuance of a permit by the Commissioner of Insurance of this Territory, and under such conditions as he may impose, powers of attorney and applications for such insurance contracts may be solicited without compliance with the provisions of this chapter, but no attorney or other person shall execute or issue any such contracts of insurance until all the provisions of this chapter shall have been complied with and a Certificate of Authority issued by the Commissioner of Insurance.
 Before issuing any such contracts in this Territory, the attorney shall procure from the Commissioner of Insurance a Certificate of Authority showing that the exchange has complied with all the requirements of this chapter and is authorized to transact business in this Territory, which said Certificate shall expire on the thirty-first day of December, and shall be renewed each year as of the first day of January thereof. Such Certificate shall specify the name or designation under which such contracts of insurance are issued. The Commissioner of Insurance may, after hearing, revoke or suspend any Certificate of Authority issued hereunder in the violation of any of the provisions of this chapter, after reasonable notice has been given such attorney in writing, so that he may appear and show cause why such action should not be taken. Any order of the Commissioner of Insurance may be appealed as provided by the insurance laws of the Territory.
 The attorney may insert in any form of policy any provisions or conditions required by the plan of reciprocal or inter-insurance; provided, however, that the same shall not be in conflict with the laws of this Territory.
 Such exchanges shall be subject to the same fees and taxes, as are provided by the laws of the Territory, now or hereafter enacted, applicable to insurance companies organized or admitted to do the same kind or kinds of business under the laws of this Territory. Exchanges or reciprocals organized under this chapter shall not be required to be member insurers of the Insurance Guaranty Association under chapter 10 of this title.
 The provisions of the general insurance laws of this Territory regarding the appointment, licensing, qualification and regulation of insurance agents and solicitors shall not apply to an exchange or its attorney, or executive officer of such attorney, if a corporation, but shall apply to any other person, partnership or corporation representing any such reciprocal or inter-insurance exchange in soliciting, negotiating or affecting of business in this Territory.
 (a) Domestic stock insurers may transact different kinds of insurance in the territory upon qualifying therefor and by having paid-in capital and surplus represented by assets, as follows: MinimumcapitalrequiredMinimumsurplusinitiallyrequired(1) Life insurance$1,000,000500,000(2) Disability insurance1,000,000250,000  (A) Life and disability insurance1,250,000750,000(3) Property insurance2,000,000950,000(4) Marine and transportation insurance2,500,0001,250,000(5) Casualty insurance:    (A) Vehicle only2,000,0001,000,000  (B) General casualty3,000,0001,500,000(6) Surety insurance:    (A) Surety1,000,0004,000,000  (B) Bail bonds only500,000250,000(7) Title insurance:    In accordance with the provisions of Chapter 49 of this title.  (8) All insurance, except life and title insurance4,500,0002,500,000 (b) Domestic stock insurers engaging in business on the date of enactment of this Act shall have sixty (60) months from the date of enactment to come into compliance with the minimum paid-in capital and surplus requirements specified in subsection (a) of this Section. (c) In accordance with chapter 20 of this title, the Commissioner may require additional capital and surplus above the minimum capital and surplus requirements set forth in this section, or any other section of this Code based upon the type, volume and nature of the insurance business transacted. (d) Notwithstanding the provisions of this section, the Commissioner may in his discretion and when warranted by particular circumstance, waive the minimum capital and surplus requirements for any insurer doing business in the Territory.
 Life insurance is insurance on human lives and insurances appertaining thereto or connected therewith. For the purposes of this title the transacting of life insurance includes the granting of annuities and endowment benefits; additional benefits in event of death by accident; additional benefits in event of the total and permanent disability of the insured; and optional modes of settlement of proceeds.
 Disability insurance is insurance against bodily injury, disablement or death by accident, against disablement resulting from sickness, and every insurance appertaining thereto.
 Property insurance is insurance against loss of or damage to real or personal property of every kind and any interest therein, from any or all hazard or cause, and against loss consequential upon such loss or damage.
 (a) Marine and transportation insurance is insurance against loss of or damage to (1) vessels, craft, aircraft, vehicles, goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, securities, choses in action, evidences of debt, valuable papers, bottomry, and respondentia interest and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit or transportation, or while being assembled, packed, crated, baled, compressed or similarly prepared for shipment or while awaiting shipment, or during any delays, storage, transshipment, or reshipment incident thereto, including war risks, marine builder's risks, and all personal property floater risks; (2) person or property in connection with or appertaining to a marine, transit or transportation insurance, including liability for loss of or damage to either incident to the construction repair operation, maintenance or use of the subject matter of such insurance (but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to any person arising out of the ownership, maintenance, or use of automobiles); (3) precious stones, jewels, jewelry, precious metals, whether in course of transportation or otherwise; and (4) bridges, tunnels and other instrumentalities of transportation and communication (excluding buildings, their furniture and furnishings, fixed contents and supplies held in storage); piers, wharves, docks and slips, and other aids to navigation and transportation, including dry docks and marine railways, dams and appurtenant facilities for the control of waterways. (b) Marine protection and indemnity insurance is insurance against, or against legal liability of the insured for loss, damage, or expense incident to ownership, operation, chartering, maintenance, use, repair or construction of any vessel, craft or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death or for loss of or damage to the property of another person.
 (a) Vehicle insurance is insurance against loss or damage to any land vehicle or aircraft or any draft or riding animal or to property while contained therein or thereon or being loaded or unloaded therein or therefrom, and against any loss or liability resulting from or incident to ownership, maintenance, or use of any such vehicle or aircraft or animal. (b) Insurance against accidental death or accidental injury to individuals while in, entering, alighting from, adjusting, repairing, or cranking, or caused by being struck by a vehicle, aircraft, or draft or riding animal, if such insurance is issued as part of insurance on the vehicle, aircraft, or draft or riding animal, shall be deemed to be vehicle insurance.
 General casualty insurance includes vehicle insurance as defined in section 456 of this title and in addition is insurance (1) against legal liability for the death, injury, or disability of any human being, or for damage to property; (2) of medical, hospital, surgical and funeral benefits to persons injured, irrespective of legal liability of the insured, when issued with or supplemental to insurance against legal liability for the death, injury or disability of human beings; (3) of the obligations accepted by, imposed upon, or assumed by employers under law for Workmen's Compensation Administration. (4) against loss or damage by burglary, theft, larceny, robbery, forgery, fraud, vandalism, malicious mischief, confiscation or wrongful conversion, disposal or concealment, or from any attempt of any of the foregoing; also insurance against loss of or damage to moneys, coins, bullion, securities, notes, drafts, acceptances or any other valuable papers or documents, resulting from any cause, except while in the custody or possession of and being transported by any carrier for hire or in the mail; (5) upon personal effects against loss or damage from any cause; (6) against loss or damage to glass, including its lettering, ornamentation and fittings; (7) against any liability and loss or damage to property resulting from accidents to or explosions of boilers, pipes, pressure containers, machinery, or apparatus and to make inspection of and issue certificates of inspection upon elevators, boilers, machinery, and apparatus of any kind; (8) against loss or damage to any property caused by the breakage or leakage of sprinklers, water pipes and containers, or by water entering through leaks or openings in buildings; (9) against loss or damage resulting from failure of debtors to pay their obligations to the insured (credit insurance); and (10) against any other kind of loss, damage, or liability properly the subject of insurance and not within any other kind or kinds of insurance as defined in this chapter, if such insurance is not contrary to law or public policy.
 Surety insurance includes (1) credit insurance as defined in section 457(9) of this title; (2) bail bond insurance as defined in section 459 of this title; (3) fidelity insurance, which is insurance guaranteeing the fidelity of persons holding positions of public or private trust; (4) guaranteeing the performance of contracts, other than insurance policies, and guaranteeing and executing bonds, undertakings, and contracts of suretyship; and (5) indemnifying banks, bankers, brokers, financial or moneyed corporations or associations against loss resulting from any cause of bills of exchange, notes, bonds, securities, evidence of debts, deeds, mortgages, warehouse receipts, or other valuable papers, documents, money, precious metals and articles made therefrom, jewelry, watches, necklaces, gems, precious and semiprecious stones, including any loss while the same are being transported in armored motor vehicles, or by messenger, but not including any other risks of transportation or navigation; also against loss or damage to such an insured's premises, or to his furnishings, fixtures, equipment, safes and vaults therein, caused by burglary, robbery, theft, vandalism or malicious mischief, or any attempt thereat.
 Bail bond insurance is the guaranteeing that any person, in or in connection with any proceedings in any court, will attend in court when required, or will obey the orders or judgment of the court, as a condition to the release of such person from confinement, and the execution of bail bonds for any such purpose. The making of property or cash bail does not constitute the transacting of bail bond insurance.
 Title insurance is insurance of owners of property or others having an interest therein, against loss by encumbrance, or defective titles, or adverse claim to title, and services connected therewith.
 Authority shall be granted or denied insurers, already authorized to transact one kind of insurance, to transact additional kinds of insurance as follows: (1) an insurer authorized to transact life insurance may also transact disability insurance and may be authorized to transact additional kinds of insurance subject to such regulation as the Commissioner may prescribe, but a Lloyd's insurer may not transact life insurance; (2) an insurer authorized to transact title insurance shall not be authorized to transact any additional kind of insurance; (3) a domestic mutual insurer may be authorized to transact additional kinds of insurance as provided in section 403 of this title; and (4) an insurer authorized to transact general casualty insurance shall be authorized to transact disability insurance and fidelity insurance without requiring additional financial qualifications.
 (a) Insurers, except as provided in section 461 of this title, shall be authorized to transact kinds of insurance in addition to kinds already authorized upon otherwise qualifying therefor, and subject to special surplus requirements set forth in subsection (c) of this section, possessing capital stock, if a stock insurer, or surplus, if a mutual insurer, in addition to that required under this title to be maintained to qualify for the kinds of insurance theretofore authorized, in amount as required under the following schedule:  A domestic mutual life or disability insurer may be authorized to transact both life and disability insurances when it has acquired and while it maintains surplus funds in amount not less than $100,000. (b) Special surplus shall be possessed as follows: (1) an insurer shall not be authorized to transact any one of the following insurancesvehicle, or general casualty (other than disability and fidelity), or marine and transportation, or surety (other than bail bond and fidelity)with any additional kind of insurance unless it maintains at all times a special surplus of not less than $100,000 in addition to the capital stock (if a stock insurer) or surplus (if a mutual insurer) otherwise required; and (2) an insurer shall not be authorized to transact all kinds of insurance exclusive of life, title, and disability insurance, unless it possesses when first so authorized, a special surplus of not less than $250,000 in addition to the capital stock (if a stock insurer) or surplus (if a mutual insurer) otherwise required. Such special surplus shall be inclusive of the special surplus required pursuant to paragraph (1) of this subsection. For the purpose of this subsection, general casualty insurances as defined in section 457 of this title, and surety insurances as defined in section 458 of this title shall not be subdivided. The insurer after being so authorized, may use in the development of its business that part of such special surplus which exceeds the amount required pursuant to paragraph (1) of this subsection. (c) In applying the schedule set forth in subsection (a) of this section to a domestic mutual insurer, the additional surplus required is the lesser amount thereof as determined by using property or disability insurance, if a mutual insurer, if such insurance is to be included in the kinds proposed to be transacted as the initial kind authorized; and to which such lesser amount shall be added any additional surplus required pursuant to subsection (b) of this section.
 A domestic mutual assessment insurer shall not have authority to accept reinsurance. Any other domestic insurer may accept reinsurance only of such kinds of insurance as it is authorized to transact direct.
 (a) No insurer, other than a title insurer, may retain any risk on any one subject of insurance, regardless of where located or to be performed, in an amount exceeding 10 percent of its surplus to policyholders. (b) For the purposes of this section, a subject of insurance as to insurance against fire includes all properties insured by the same insurer which are reasonably subject to loss or damage from the same fire. (c) Reinsurance in an alien reinsurer not qualified under section 226 of this title may not be deducted in determining risk retained for the purposes of this section. (d) In the case of surety insurance, the net retention shall be computed after deduction of reinsurances, the amount assumed by any co-surety, the value of any security deposited, pledged, or held subject to the consent of the surety and for the protection of the surety. (e) [Deleted.]
 After qualifying for authority to transact a kind of insurance, a domestic stock insurer may make use of its surplus for the development of its business, subject to subsection (b) of section 462 of this title.
 (a) Subject to the special surplus requirements of subsection (b) of section 462 of this title, foreign stock insurers may be authorized to transact insurance in this territory upon otherwise qualifying therefor and while possessing capital stock in amount not less than the minimum capital required of a domestic insurer authorized to transact like kinds of insurance. (b) Subject to special surplus requirements provided by subsection (b) of section 462 of this title, alien insurers and foreign mutual insurers may be authorized to transact insurance in this territory upon otherwise qualifying therefor and while possessing capital funds in amount not less than the minimum capital required of a domestic stock insurer authorized to transact like kinds of insurance; Provided, however, That a foreign or alien insurer which as an authorized insurer has transacted insurance in the state or country of its domicile for less than five years shall not be authorized to transact insurance in this territory unless it possesses, when first so authorized in this territory: (1) capital stock and surplus, if a foreign stock insurer, in amounts not less than that required under section 451 of this title, of a newly formed domestic stock insurer to transact like kinds of insurance; or (2) surplus or capital funds, if an alien insurer or foreign mutual insurer, in amount not less than the aggregate of the capital stock and surplus required under section 451 of this title, of a newly formed domestic stock insurer to transact like kinds of insurance.
 This chapter may be cited as The Virgin Islands Risk-Based Capital for Insurers Act or The RBC Act.
 As used in this chapter: (a) Adjusted RBC Report means Risk-Based Capital report that has been adjusted by the Commissioner of Insurance in accordance with section 472(e). (b) Commissioner means the Commissioner of Insurance. (c) Corrective order means an order issued by the Commissioner of Insurance specifying corrective actions that the Commissioner has determined are required. (d) Domestic insurer means any insurance company domiciled in this Territory. (e) Filing date means March 1 of each year. (f) Foreign insurer means any insurance company that is licensed to do business in the Territory under this title but is not domiciled in the Territory. (g) Fraternal benefit society means a corporation, society or voluntary association operating as a mutual nonprofit benefit society and licensed under chapter 53, section 1304 of this title. (h) Life health insurer means any insurance company licensed under chapter 9, section 209 of this title, or a licensed property and casualty insurer writing only accident and health insurance. (i) NAIC means the National Association of Insurance Commissioners. (j) Negative trend means, with respect to a life or health insurer or a fraternal benefit society, negative trend over a period of time, as determined in accordance with the Trend Test Calculation included in the Life or Fraternal RBC Instructions. (k) Property and casualty insurer means any insurance company licensed under chapter 9, section 209 of this title, but does not include mono line mortgage guaranty insurers, financial guaranty insurers and title insurers. (l) RBC means Risk-Based Capital, a method of measuring an insurers appropriate minimum amount of capital needed to support its overall business operations in consideration of its size and risk profile and limits the amount of risk a company can take. (m) RBC instructions means the RBC Report including risk-based capital instructions adopted by the NAIC, as such RBC Instructions may be amended by the NAIC from time to time in accordance with the procedures adopted by the NAIC; (n) RBC Level means an insurers Company Action Level RBC, Regulatory Action Level RBC, Authorized Control Level RBC, or Mandatory Control Level RBC where: (1) Company Action Level RBC means, with respect to any insurer, the product of 2.0 and its Authorized Control Level RBC; (2) Regulatory Action Level RBC means the product of 1.5 and its Authorized Control Level RBC; (3) Authorized Control Level RBC means the number determined under the risk-based capital formula in accordance with the RBC Instructions; (4) Mandatory Control Level RBC means the product of .70 and the Authorized Control Level RBC; (o) RBC Plan means a comprehensive financial plan containing the elements specified in section 473(b). If the Commissioner rejects the RBC Plan, and it is revised by the insurer, with or without the Commissioners recommendation, the plan is called the Revised RBC Plan; (p) RBC Report means the report required in section 472; (q) Risk-Based Capital Ratio means the insurers ratio of total adjusted capital, actual capital, divided by its authorized control level RBC, required capital. (r) Total adjusted capital means the sum of: (1) an insurers statutory capital and surplus as determined in accordance with the statutory accounting applicable to the annual financial statements required to be filed under chapter 9, section 222 of this title; and (2) such other items, if any, as the RBC instructions may provide. (s) Territory means the Virgin Islands.
 (a) Every domestic insurer on or before each filing date shall prepare and submit to the Commissioner a report of its RBC Levels as of the end of the calendar year just ended, in a form and containing such information as is required by the RBC instructions. In addition, every domestic insurer shall file its RBC Report with: (1) the NAIC in accordance with the RBC instructions; and (2) the insurance Commissioner in any state in which the insurer is authorized to do business, if the insurance Commissioner has notified the insurer of its request in writing, in which case the insurer shall file its RBC Report not later than the later of: (A) 15 days from the receipt of notice to file its RBC Report with that state; or (B) the filing date. (b) A life and health insurers or fraternal benefit societys RBC is determined in accordance with the formula set forth in the RBC instructions. The formula must take into account, and may be adjusted for the covariance between the following factors determined in each case by applying the factors in the manner set forth in the RBC instructions: (1) the risk with respect to the insurers assets; (2) the risk of adverse insurance experience with respect to the insurers liabilities and obligations; (3) the interest rate risk with respect to the insurers business; and (4) all other business risks and other relevant risks set forth in the RBC instructions. (c) A property and casualty insurers RBC is determined in accordance with the formula set forth in the RBC instructions. The formula must take the following into account and may adjust for the covariance as determined in each case by applying the following factors in the manner set forth in the RBC instructions: (1) asset risk; (2) credit risk; (3) underwriting risk; and (4) all other business risks and such other relevant risks as are set forth in the RBC instructions. (d) An excess of capital over the amount produced by the risk-based capital requirements contained in this chapter and the formulas, schedules and instructions referenced in this chapter are desirable in the business of insurance. Insurers must seek to maintain capital above the RBC levels required by this chapter. Additional capital is useful in the insurance business and helps to secure an insurer against various risks inherent in, or affecting, the business of insurance and not accounted for or only partially measured by the risk-based capital requirements contained in this chapter. (e) If a domestic insurer files an RBC Report which in the judgment of the Commissioner is inaccurate, the Commissioner shall adjust the RBC Report to correct the inaccuracy and shall notify the insurer of the adjustment. The notice must contain a statement of the reason for the adjustment. An RBC Report so adjusted is referred to as an Adjusted RBC Report.
 (a) Company Action Level Event means any of the following events: (1) The filing of an RBC Report by an insurer that indicates that: (A) The insurers total adjusted capital is greater than or equal to its Regulatory Action Level RBC, but less than its Company Action Level RBC; (B) If a life or health insurer or a fraternal benefit society, the insurer or society has total adjusted capital that is greater than or equal to its Company Action Level RBC, but less than the product of its Authorized Control Level RBC and 3.0 and has a negative trend; or (C) If a property and casualty insurer, the insurer has total adjusted capital that is greater than or equal to its Company Action Level RBC, but less than the product of its Authorized Control Level RBC and 3.0 and triggers the trend test determined in accordance with the trend test calculation included in the Property and Casualty RBC instructions; (2) The notification by the Commissioner to the insurer of an Adjusted RBC Report that indicates an event in section 472(e) of this section, if the insurer does not challenge the Adjusted RBC Report under section 477; or (3) If, pursuant to section 477, an insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1) of this subsection, the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (b) If a Company Action Level Event occurs, the insurer shall prepare and submit to the Commissioner an RBC Plan that must: (1) identify the conditions that contribute to the Company Action Level Event; (2) contain proposals of corrective actions that the insurer intends to take and expects to result in the elimination of the Company Action Level Event; (3) provide projections of the insurers financial results in the current year and at least the four succeeding years, both in the absence of proposed corrective actions and giving effect to the proposed corrective actions, including projections of statutory operating income, net income, capital and surplus. The projections for both new and renewal business may include separate projections for each major line of business and separately identify each significant income, expense and benefit component; (4) identify the key assumptions impacting the insurers projections and the sensitivity of the projections to the assumptions; and (5) identify the quality of, and problems associated with, the insurers business, including, but not limited to its assets, anticipated business growth and associated surplus strain, extraordinary exposure to risk, mix of business and use of reinsurance, if any, in each case. (c) The RBC Plan must be submitted: (1) no later than 45 days after the Company Action Level Event; or (2) if the insurer challenges an Adjusted RBC Report pursuant to section 477, no later than 45 days after notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (d) No later than 60 days after the submission by an insurer of an RBC Plan to the Commissioner, the Commissioner shall notify the insurer whether the RBC Plan must be implemented or is, in the judgment of the Commissioner, unsatisfactory. If the Commissioner determines the RBC Plan is unsatisfactory, the notification to the insurer must set forth the reasons for the determination, and may set forth proposed revisions renders the RBC Plan satisfactory, in the judgment of the Commissioner. Upon notification from the Commissioner, the insurer shall prepare a Revised RBC Plan that may incorporate by reference any revisions proposed by the Commissioner, and shall submit the Revised RBC Plan to the Commissioner: (1) no later than 45 days after the notification from the Commissioner; or (2) if the insurer challenges the notification from the Commissioner under section 477, no later than 45 days after a notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (e) If the Commissioner notifies an insurer that the insurers RBC Plan or Revised RBC Plan is unsatisfactory, the Commissioner may at the Commissioners discretion, subject to the insurers right to a hearing under section 477, specify in the notification that the notification constitutes a Regulatory Action Level Event. (f) Every domestic insurer that files an RBC Plan or Revised RBC Plan with the Commissioner shall file a copy of the RBC Plan or Revised RBC Plan with the insurance Commissioner in any state in which the insurer is authorized to do business if: (1) the state has an RBC provision substantially similar to section 478(a); and (2) the insurance Commissioner of that state has notified the insurer of its request for the filing in writing, in which case the insurer shall file a copy of the RBC Plan or Revised RBC Plan in that state no later than the later of: (A) 15 days after the receipt of notice to file a copy of its RBC Plan or Revised RBC Plan with the state; or (B) the date on which the RBC Plan or Revised RBC Plan is filed under subsections (c) and (d).
 (a) Regulatory Action Level Event means, with respect to any insurer, any of the following events: (1) the filing of an RBC Report by the insurer that indicates that the insurers total adjusted capital is greater than or equal to its Authorized Control Level RBC but less than its Regulatory Action Level RBC; (2) the notification by the Commissioner to an insurer of an Adjusted RBC Report that indicates the event in paragraph (1), if insurer does not challenge the Adjusted RBC Report under section 477; (3) if, pursuant to section 477, the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1), the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge; (4) the failure of the insurer to file an RBC Report by the filing date, unless the insurer has provided an explanation for such failure which is satisfactory to the Commissioner and has cured the failure not later than 10 days after the filing date; (5) the failure of the insurer to submit an RBC Plan to the Commissioner within the period set forth in section 473(c); (6) notification by the Commissioner to the insurer that: (A) the RBC Plan or revised RBC Plan submitted by the insurer is, in the judgment of the Commissioner, unsatisfactory; and (B) the notification constitutes a Regulatory Action Level Event with respect to the insurer, if the insurer has not challenged the determination under section 477; (7) if, pursuant to section 477, the insurer challenges a determination by the Commissioner under paragraph (6), the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected such challenge; (8) notification by the Commissioner to the insurer that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan, but only if the failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event in accordance with its RBC Plan or Revised RBC Plan, and the Commissioner has so stated in the notification, if the insurer has not challenged the determination under section 477; or (9) if, pursuant to section 477, the insurer challenges a determination by the Commissioner under paragraph (8), the notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the challenge. (b) If a Regulatory Action Level Event occurs, the Commissioner shall: (1) require the insurer to prepare and submit an RBC Plan or, if applicable, a Revised RBC Plan; (2) perform such examination or analysis as the Commissioner considers necessary of the assets, liabilities, and operations of the insurer including a review of its RBC Plan or Revised RBC Plan; and (3) subsequent to the examination or analysis, issue a corrective order specifying the corrective action the Commissioner determines are required. (c) In determining corrective actions, the Commissioner may take into account the factors that are relevant with respect to the insurer based upon the Commissioners examination or analysis of the assets, liabilities and operations of the insurer, including, but not limited to, the results of any sensitivity tests undertaken pursuant to the RBC instructions. The RBC Plan or Revised RBC Plan must be submitted: (1) no later than 45 days after the occurrence of the Regulatory Action Level Event; (2) if the insurer challenges an Adjusted RBC Report pursuant to section 477 and the challenge is not frivolous in the judgment of the Commissioner, no later than 45 days after the notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge; or (3) if the insurer challenges a Revised RBC Plan pursuant to section 477 and the challenge is not frivolous in the judgment of the Commissioner, no later than 45 days after the notification to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (d) The Division of Banking, Insurance and Financial Regulation may hire any necessary, additional staff to carry out the duties and obligations under this section. The staff of the Division shall receive the training necessary to carry out the duties and obligations under this section including, but not limited to, training in conducting the examination required in this section. All fees, costs and expenses associated with the examination of an insurer are borne by the affected insurer or another party as directed by the Commissioner. (e) The Commissioner may hire actuaries and investment experts and other consultants to review the insurers RBC Plan or Revised RBC Plan, examine or analyze the assets, liabilities and operations of the insurer, and formulate the corrective order with respect to the insurer. The fees, costs and expenses relating to consultants are borne by the affected insurer or another party as directed by the Commissioner.
 (a) Authorized Control Level Event means any of the following events: (1) the filing of an RBC Report by the insurer which indicates that the insurers total adjusted capital is greater than or equal to its Mandatory Control Level RBC, but less than its Authorized Control Level RBC; (2) the notification by the Commissioner to the insurer of an Adjusted RBC Report that indicates the event in paragraph (1), if the insurer does not challenge the Adjusted RBC Report under section 477; (3) if, pursuant to section 477, the insurer challenges an Adjusted RBC Report that indicates the event in paragraph (1), notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge; (4) the failure of the insurer to respond to a corrective order, in a manner satisfactory to the Commissioner; but the insurer has not challenged the corrective order under section 477; (5) if the insurer has challenged a corrective order under section 477 and the Commissioner has, after a hearing, rejected the challenge or modified the corrective order, the failure of the insurer to respond, in a manner satisfactory to the Commissioner, to the corrective order subsequent to rejection or modification by the Commissioner. (b) If an Authorized Control Level Event occurs, the Commissioner shall: (1) take the actions required under section 474 regarding an insurer with respect to which an Regulatory Action Level Event has occurred; or (2) if the Commissioner considers it to be in the best interests of the policyholders and creditors of the insurer and of the public, take such actions necessary to cause the insurer to be placed under regulatory control pursuant to chapter 51 of this title. If the Commissioner takes such actions, the Authorized Control Level Event is sufficient grounds for the Commissioner to take action under chapter 51 of this title. If the Commissioner takes action under this paragraph pursuant to an Adjusted RBC Report, the insurer is entitled to the protections afforded under section 477, pertaining to summary proceedings.
 (a) Mandatory Control Level Event means any of the following events: (1) the filing of an RBC Report that indicates that the insurers total adjusted capital is less than its Mandatory Control Level RBC; (2) notification by the Commissioner to the insurer of an Adjusted RBC Report that indicates that the insurers total adjusted capital is less than its Mandatory Control Level RBC, if the insurer does not challenge the Adjusted RBC Report under section 477; or (3) if, pursuant to section 477, the insurer challenges an Adjusted RBC Report that indicates that the insurers total adjusted capital is less than its Mandatory Control Level RBC notification by the Commissioner to the insurer that the Commissioner has, after a hearing, rejected the insurers challenge. (b) If a Mandatory Control Level Event occurs: (1) Regarding a life insurer or fraternal benefit society, the Commissioner shall take the necessary action to place the insurer under regulatory control pursuant chapter 51 of this title. The Mandatory Control Level Event is sufficient grounds for the Commissioner to take action under chapter 51 of this title. If the Commissioner takes action pursuant to an Adjusted RBC Report, the insurer is entitled to the protections of section 477, notwithstanding any of the foregoing, the Commissioner may forego action for up to 90 days after the Mandatory Control Level Event if the Commissioner finds that there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within a 90-day period. (2) Regarding a property and casualty insurer, the Commissioner shall take the action necessary to place the insurer under regulatory control pursuant to chapter 51 of this title, or, in the case of an insurer that is writing no business and that is running-off its existing business, the Commissioner may allow the insurer to continue its run-off under the supervision of the Commissioner. In either event, the Mandatory Control Level Event is sufficient grounds for the Commissioner to take action under chapter 51 of this title, and if the Commissioner takes action pursuant to an Adjusted RBC Report, the insurer is entitled to the protections of section 477, pertaining to summary proceedings. (3) Notwithstanding any of the foregoing, the Commissioner may forego action for up to 90 days after the Mandatory Control Level Event, if the Commissioner finds there is a reasonable expectation that the Mandatory Control Level Event may be eliminated within a 90-day period.
 (a) The insurer has the right to a confidential departmental hearing, on a record, where the insurer may challenge any determination or action taken by the Commissioner upon any of the following: (1) notification to an insurer by the Commissioner of an Adjusted RBC Report; or (2) notification to an insurer by the Commissioner that: (A) The insurers RBC Plan or Revised RBC Plan is unsatisfactory; and (B) The notification constitutes a Regulatory Action Level Event with respect to such insurer; or (3) notification to any insurer by the Commissioner that the insurer has failed to adhere to its RBC Plan or Revised RBC Plan and that such failure has a substantial adverse effect on the ability of the insurer to eliminate the Company Action Level Event with respect to the insurer in accordance with its RBC Plan or Revised RBC Plan; or (4) notification to an insurer by the Commissioner of a corrective order with respect to the insurer. (b) The insurer shall notify the Commissioner of its request for a hearing not more than five days after the notification from the Commissioner. Upon receipt of the insurers request for a hearing, the Commissioner shall set a date for the hearing. The date of the hearing may not be less than 10 days nor more than 30 days after the date of the insurers request. The appeals procedure set forth in chapter 7 of this title applies to an appeal of the Commissioners order.
 (a) Except information that is required to be set forth in a publicly available annual statement schedule or RBC Plans, all RBC Reports are confidential and privileged and are not subject to examination by the public, to a subpoena, to discovery or admissible as evidence in any private civil action. The privilege extends to any corrective order issued by the Commissioner pursuant to examination or analysis of any domestic insurer or foreign insurer and any results or report of any examination or analysis of an insurer in the possession or control of the Division of Banking of Insurance and Financial Regulation. However, the Commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. (b) Neither the Commissioner nor any person who received documents, materials or other information while acting under the authority of the Commissioner is permitted or required to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (a). (c) In order to assist in the performance of the Commissioners duties, the Commissioner may: (1) share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (a), with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with state, federal and international law enforcement authorities, if the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information; (2) receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and (3) enter into agreements governing sharing and use of information consistent with this subsection. (d) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information may occur as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in subsection (c). (e) The Commissioners use of the comparison of an insurers Total Adjusted Capital to any of its RBC Levels is a regulatory tool that may indicate the need for possible corrective action with respect to the insurer, and is not intended as a means to rank insurers generally. Except as otherwise required under this chapter, the making, publishing, disseminating, circulating or placing before the public, or causing, directly or indirectly to be made, published, disseminated, circulated or placed before the public, in a newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio or television station, or in any other way, an advertisement, announcement or statement containing an assertion, representation or statement with regard to the RBC Levels of any insurer, or of any component derived in the calculation, by any insurer, agent, broker or other person engaged in any manner in the insurance business would be misleading and is prohibited; but if any materially false statement regarding the comparison of an insurers Total Adjusted Capital to its RBC Levels or any of them or an inappropriate comparison of any other amount to the insurers RBC Levels is published in any written publication and the insurer is able to demonstrate to the Commissioner with substantial proof the falsity of such statement, or the inappropriateness, as the case may be, then the insurer may publish an announcement in a written publication if the sole purpose of the announcement is to rebut the materially false statement. (f) The RBC instructions, RBC reports, adjusted RBC reports, RBC plans and revised RBC plans are intended solely for use by the Commissioner in monitoring the solvency of insurers and the need for possible corrective action with respect to insurers and may not be used by the Commissioner for ratemaking or considered or introduced as evidence in any rate proceeding or used by the Commissioner to calculate or derive any elements of an appropriate premium level or rate of return for any line of insurance that an insurer or any affiliate may write.
 (a) The provisions of this chapter are supplemental to any other law of the Territory, and may not preclude or limit any other powers or duties of the Commissioner under the laws, including, but not limited to, the powers and duties bestowed upon the Commissioner in chapter 3 of this title. (b) The Commissioner may adopt reasonable regulations necessary for the implementation of this chapter. (c) The Commissioner may establish appropriate, reasonable fees to carry out the intent of this chapter.
 (a) Any foreign insurer shall, upon the written request of the Commissioner, submit to the Commissioner an RBC Report as of the end of the calendar year just ended the later of: (1) the date an RBC Report is required to be filed by a domestic insurer under this chapter; or (2) fifteen days after the request is received by the foreign insurer. (b) Any foreign insurer at the written request of the Commissioner, shall promptly submit to the Commissioner a copy of any RBC Plan that is filed with the insurance Commissioner of any other state. (c) If a Company Action Level Event, Regulatory Action Level Event or Authorized Control Level Event occurs with respect to any foreign insurer as determined under the RBC statute applicable in the state of domicile of the insurer or, if no RBC statute is in force in that state, under the provisions of this chapter, or if the insurance commissioner of the state of domicile of the foreign insurer fails to require the foreign insurer to file an RBC Plan in the manner specified under that states RBC statute or, if no RBC statute is in force in that state, under section 473, the Commissioner may require the foreign insurer to file an RBC Plan with the Commissioner. In such event, the failure of the foreign insurer to file an RBC Plan with the Commissioner is ground to order the insurer to cease writing new insurance business in the Territory. In addition, the Commissioner may impose an appropriate fine on the foreign insurer for failure to submit an RBC plan upon request. (d) If a Mandatory Control Level Event occurs with respect to any foreign insurer, and no domiciliary receiver has been appointed under the rehabilitation and liquidation statute applicable in the state of domicile of the foreign insurer, the Commissioner may make application to the court of the Virgin Islands as permitted under chapter 51 of this title regarding the liquidation of property of foreign insurers found in the Territory, and the occurrence of the Mandatory Control Level Event is considered adequate grounds for the application.
 No liability or cause of action arises against the Commissioner or the insurance division or its employees or agents for any action taken by them in the performance of their duties under this chapter.
 If any provision of this chapter, or its application to any person or circumstance is held invalid, that determination does not affect the other provision or applications of this chapter that can be given effect without the invalid provision or application.
 All notices by the Commissioner to an insurer that results in regulatory action are effective upon dispatch, if transmitted by registered or certified mail. Any other transmission is effective upon the insurers receipt of the notice.
 In any determination of the financial condition of any insurer there shall be allowed as assets only such assets as belong wholly and exclusively to the insurer, which are registered, recorded, or held under the insurer's name, and which consist of (1) cash in the possession of the insurer or in transit under its control, and the true balance of any deposit of the insurer in a solvent bank or trust company; (2) investments, securities, properties, and loans acquired or held in accordance with this title, and in connection therewith the following items: (A) interest due or accrued on any bond or evidence of indebtedness which is not in default and which is not valued on a basis including accrued interest; (B) declared and unpaid dividends on stocks and shares unless such amount has otherwise been allowed as an asset; (C) interest due or accrued upon a collateral loan in an amount not to exceed one year's interest thereon; (D) interest due or accrued on deposits in solvent banks and trust companies, and interest due or accrued on other assets if such interest is in the judgment of the Commissioner a collectible asset; (E) interest due or accrued on a mortgage loan, in amount not exceeding in any event the amount, if any, of the difference between the unpaid principal and the value of the property less delinquent taxes thereon; but if any interest on the loan is in default more than 18 months, or if any interest on the loan is in default and any taxes or any installment thereon on the property are and have been due and unpaid for more than 18 months, no allowance shall be made for any interest on the loan; and (F) rent due or accrued on real property if such rent is not in arrears for more than three months. (3) premium notes, policy loans, and other policy assets and liens on policies of life insurance, in amount not exceeding the legal reserve and other policy liabilities carried on each individual policy; (4) the net amount of uncollected and deferred premiums in the case of a life insurer which carries the full annual mean tabular reserve liability; (5) premiums in the course of collection, other than for life insurance, not more than 90 days past due, less commissions payable thereon. The foregoing limitation shall not apply to premiums payable directly or indirectly by the United States Government or any of its instrumentalities or by the Virgin Islands Government or any of its instrumentalities; (6) installment premiums other than life insurance premiums, in accordance with regulations prescribed by the Commissioner consistent with practice formulated or adopted by the National Association of Insurance Commissioners; (7) notes and like written obligations not past due, taken for premiums other than life insurance premiums, on policies permitted to be issued on such basis, to the extent of the unearned premium reserves carried thereon and unless otherwise required by regulation prescribed by the Commissioner; (8) the full amount of reinsurance recoverable by a ceding insurer from a solvent reinsurer not disqualified to take such reinsurance under this title; or, in the case of reinsurers disqualified under this title, so much of reinsurance recoverable from such reinsurer as does not exceed the liabilities carried by the ceding insurer for amounts withheld under a reinsurance treaty with such reinsurer as security for the payment of obligations thereunder of such funds are held subject to withdrawal by, and under the control of, the ceding insurer; (9) amounts receivable by an assuming insurer representing funds withheld by a solvent ceding insurer under a reinsurance treaty; (10) deposits or equities recoverable from underwriting associations, syndicates and reinsurance funds, or from any suspended banking institution, to the extent deemed by the Commissioner available for the payment of losses and claims and at values to be determined by him; and (11) other assets, not inconsistent with the foregoing provisions, deemed by the Commissioner available for the payment of losses and claims, at values to be determined by him.
 In addition to assets impliedly excluded under section 501 of this title the following expressly shall not be allowed as assets in any determination of the financial condition of an insurer: (1) goodwill, trade names, agency plants and other like intangible assets; (2) prepaid or deferred charges for expenses and commissions paid by the insurer; (3) advances to officers (other than policy loans or loans made pursuant to section 312 of this title whether secured or not, and advances to employees, agents and other persons on personal security only); (4) stock of such insurer, owned by it, or any equity therein or loans secured thereby, or any proportionate interest in such stock through the ownership by such insurer of an interest in another firm, corporation or business unit; (5) furniture, furnishings, fixtures, safes, equipment, vehicles, library, stationery, literature, and supplies except, such personal property as the insurer is permitted to hold pursuant to paragraph (5) of subsection (b) of section 566 of this title or which is acquired through foreclosure or chattel mortgages acquired pursuant to section 565 of this title or which is reasonably necessary for the maintenance and operation of real estate lawfully acquired and held by the insurer other than real estate used by it for home office, branch office, and similar purposes; (6) the amount, if any, by which the aggregate book value of investments as carried in the ledger assets of the insurer exceeds the aggregate value thereof as determined under this title.
 In any determination of the financial condition of an insurer, liabilities to be charged against its assets shall include (1) the amount of its capital stock outstanding, if any; (2) the amount, estimated consistent with the provisions of this chapter, necessary to pay all of its unpaid losses and claims incurred on or prior to the date of statement, whether reported or unreported, together with the expense of adjustment or settlement thereof; and (3) with reference to life and disability insurance, and annuity contracts: (A) the amount of reserves on life insurance policies and annuity contracts in force, valued according to the tables of mortality, rates of interest, and methods adopted pursuant to this chapter which are applicable thereto; (B) reserves for disability benefits, for both active and disabled lives; (C) reserves for accidental death benefits; and (D) any additional reserves which may be required by the Commissioner, consistent with practice formulated or approved by the National Association of Insurance Commissioners, on account of such insurances; (4) with reference to insurances other than those specified in paragraph (3) of this section, and other than title insurance, the amount of reserves equal to the unearned portions of the gross premiums charged on policies in force, computed in accordance with this chapter; (5) taxes, expenses, and other obligations accrued at the date of the statement; and (6) any additional reserve set up by the insurer for a specific liability purpose or required by the Commissioner consistent with practices adopted or approved by the National Association of Insurance Commissioners.
 (a) With reference to insurances against loss or damage to property, except as provided in section 505 of this title and with reference to all general casualty insurances, disability insurance except as provided in section 506 of this title and surety insurance, every insurer shall maintain an unearned premium reserve on all policies in force. (b) The Commissioner may require that such reserve shall be equal to the unearned portions of the gross premiums in force after deducting authorized reinsurance, as computed on each respective risk from the policy's date of issue. If the Commissioner does not so require, the portions of the gross premiums in force, less authorized reinsurance, to be held as a premium reserve, shall be computed according to the following table:Term for which policy was writtenReserve for unearned premiumOne year, or less 12Two yearsFirst year34 Second year14Three yearsFirst year56 Second year12 Third year16Four yearsFirst year78 Second year58 Third year38 Fourth year18Five yearsFirst year910 Second year710 Third year12 Fourth year310 Fifth year110Over five yearsPro rata  (c) In lieu of computation according to such table, all of such reserves may be computed, at the insurer's option, on a monthly pro rata basis. (d) After adopting any one of the methods for computing such reserve an insurer shall not change methods without the Commission's approval.
 With reference to marine and transportation insurance, premiums on trip risks not terminated shall be deemed unearned and the Commissioner may require the insurer to carry a reserve thereon equal to 100 percent on trip risks written during the month ended as of the date of statement and computed upon a pro rata basis or, with the Commissioner's consent, in accordance with the alternative methods provided in section 504 of this title for all other risks.
 (a) The legal minimum standard for computing the active life reserve, including the unearned premium reserve of noncancellable disability policies shall be based on Conference Modification of Class III Disability Experience with interest at not to exceed 3 12 percent per annum on the full preliminary term basis. (b) For policies with a waiting period of less than three months or providing benefits at ages beyond the limits of Conference Modification of Class III Disability Experience, the table shall be extended to cover the provisions of such policies on such basis as the Commissioner may approve. (c) The reserve for losses under noncancellable disability policies shall be based on Conference Modification of Class III Disability Experience, except that for claims of less than 27 months duration the reserve may be taken as equivalent to the prospective claim payments for three and one-half times the elapsed period of disability; but in no case shall the reserve be less than the equivalent of seven weeks claim payments. (d) The Commissioner shall modify the application of the tables and requirements prescribed in this section to policies or to claims arising under policies in accordance with the waiting period contained in such policies and in accordance with any limitation as to the time for which indemnity is payable.
 An insurer shall maintain a complete and itemized record showing all losses and claims as to which it has received notice, including with regard to property, casualty, surety, and marine and transportation insurances, all notices received of the occurrence of any event which may result in a loss.
 (a) If the Commissioner determines that an insurer's unearned premium reserves, however computed, are inadequate, he may require the insurer to compute such reserves or any part thereof according to such other method or methods as are prescribed in this chapter. (b) If the loss experience of an insurer shows that its loss reserves, however estimated, are inadequate, the Commissioner shall require the insurer to maintain loss reserves in such increased amount as is needed to make them adequate.
 The reserves for outstanding losses and loss expense under policies of personal injury liability insurance and under policies of employer's liability insurance shall be computed as follows: (1) for all liability suits being defended under policies written: (A) ten years or more prior to the date of determination, $1,500 for each suit; (B) five or more and less than ten years prior to the date of determination, $1,000 for each suit; and (C) three or more and less than five years prior to the date of determination, $850 for each suit. In any event the total loss and loss expense reserves for all such liability policies written more than three years prior to the date of determination shall not be less than the aggregate of the estimated unpaid losses and loss expenses under such policies computed on an individual case basis. (2) For all liability policies written during the three years immediately preceding the date of determination, such reserves shall be the sum of the reserves for each such year, which shall be 60 percent of the earned premiums on liability policies written during such year less all loss and loss expense payments made under such policies written in such year. In any event such reserves for each of such three years shall be not less than the aggregate of the estimated unpaid losses and loss expenses for claims incurred under liability policies written in the corresponding year computed on an individual case basis.
 (a) All unallocated liability loss expense payments shall be distributed as follows: (1) if made in a given calendar year subsequent to the first four years in which an insurer has been issuing liability policies, 35 percent shall be charged to the policies written that year, 40 percent to the policies written in the preceding year, 10 percent to the policies written in the second year preceding, 10 percent to the policies written in the third year preceding and 5 percent to the policies written in the fourth year preceding; (2) if made in each of the first four calendar years in which an insurer issues liability policies, in the first calendar year 100 percent shall be charged to the policies written in that year; in the second calendar year 50 percent shall be charged to the policies written in that year and 50 percent to the policies written in the preceding year; in the third calendar year 40 percent shall be charged to the policies written in that year, 40 percent to the policies written in the preceding year, and 20 percent to the policies written in the second year preceding; and in the fourth calendar year 35 percent shall be charged to the policies written in that year, 40 percent to the policies written in the preceding year, 15 percent to the policies written in the second year preceding and 10 percent to the policies written in the third year preceding. (b) A schedule showing such distribution shall be included in the annual statement.
 Any insurer transacting liability insurance shall include in its annual statement filed with the Commissioner, a schedule of its experience thereunder in such form as the Commissioner may prescribe.
 Loss payments and loss expense payments as used with reference to liability insurance shall include all payments to claimants, payments for medical and surgical attendance, legal expense, salaries and expenses of investigators, adjusters and claims field men, rents, stationery, telegraph and telephone charges, postage, salaries and expenses of office employees, home office expenses and all other payments made on account of claims, whether such payments are allocated to specific claims or are unallocated.
 (a) This section constitutes and may be cited as the Standard Valuation Law. (b) Annual valuation: The Commissioner shall annually value, or cause to be valued, the reserve liabilities (hereinafter called reserves) for all outstanding life insurance policies and annuity and pure endowment contracts of every life insurer doing business in this territory, except that in the case of an alien insurer such valuation shall be limited to its insurance transactions in the United States, and may certify the amount of any such reserves, specifying the mortality table or tables, rate or rates of interest and methods (net level premium method or others) used in the calculation of such reserves. In calculating such reserves, the Commissioner may use group methods and approximate averages for fractions of a year or otherwise. He may accept, in his discretion, the insurer's calculation of such reserves. In lieu of the valuation of the reserves herein required of any foreign or alien insurer, he may accept any valuation made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when such valuation complies with the minimum standard herein provided and if the official of such state or jurisdiction accepts as sufficient and valid for all legal purposes the certificate of valuation of the Commissioner when such certificate states the valuation to have been made in a specified manner according to which the aggregate reserves would be at least as large as if they had been computed in the manner prescribed by the law of that state or jurisdiction. (c) Minimum valuation standard:  (1) The minimum standard for the valuation of all such policies and contracts issued prior to the operative date of section 984 of this title, shall be as follows: (A) for policies issued prior to the operative date no standard of valuation for ordinary policies, whether on the net level premium, preliminary term, or select and ultimate reserve basis, shall be less than that determined upon such basis according to the American Experience Table of Mortality with 3 12 percent interest; except, that when the preliminary term basis is used it shall not exceed one year. The Commissioner may vary the standard of valuation in particular cases of invalid lives and other extra hazards; Provided, That the interest rate used is not greater than 3 12 percent; (B) the legal minimum standard for the valuation of annuities issued on or after January 1, 1912, and prior to the operative date of section 984 of this title, shall be McClintock's Table of Mortality Among Annuitants, with interest at 3 12 percent per annum, but annuities deferred ten or more years and written in connection with life or term insurance may be valued on the same mortality table from which the consideration or premiums were computed, with interest not higher than 3 12 percent per annum; (C) the legal minimum standard for the valuation of industrial policies issued on or after the first day of January 1912, and prior to the operative date of section 984 of this title, shall be the American Experience Table of Mortality with interest at 3 12 percent per annum; except, that any life insurer may voluntarily value such industrial policies according to the Standard Industrial Mortality Table or the Substandard Industrial Mortality Table; and (D) the legal minimum standard for the valuation of group life insurance policies under which premium rates are not guaranteed for a period in excess of five years shall be, at the option of the life insurer issuing such policies, either the American Men Ultimate Table of Mortality, the Commissioners 1941 Standard Ordinary Mortality Table, or any other table approved by the Commissioner, with interest at 3 12 percent per annum. (2) The minimum standard for the valuation of all such policies and contracts issued on or after the operative date of section 984 of this title shall be the Commissioners Reserve Valuation Method defined in subsection (d) of this section, 3 12 percent interest, and the following tables: (A) for all ordinary policies of life insurance issued on the standard basis, excluding any disability and accidental death benefits in such policies, the Commissioners 1941 Standard Ordinary Mortality Table for such policies issued prior to the operative date of section 984(f) of this title, and the Commissioners 1958 Standard Ordinary Mortality Table for such policies issued on or after such operative date; Provided, That for any category of such policies issued on female risks on or after July 1, 1957, modified net premiums and present values, referred to in subsection (d) of this section, may be calculated according to an age not more than three years younger than the actual age of the insured; (B) for all industrial life insurance policies issued on the standard basis, excluding any disability and accidental death benefits in such policies, the 1941 Standard Industrial Mortality Table; (C) for individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the 1937 Standard Annuity Mortality Table or, at the option of the insurer, the Annuity Mortality Table for 1949, Ultimate, or any modification of either of these tables approved by the Commissioner; (D) for group annuity and pure endowment contracts, excluding any disability and accidental death benefits in such policies, the Group Annuity Mortality Table for 1951, any modification of such table approved by the Commissioner, or, at the option of the insurer, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts; (E) for total and permanent disability benefits in or supplementary to ordinary policies or contracts, for policies or contracts issued on or after January 1, 1966, the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit; for policies or contracts issued on or after January 1, 1961, and prior to January 1, 1966, either such tables or, at the option of the insurer, the Class (3) Disability Table (1926); and for policies issued prior to January 1, 1961, the Class (3) Disability Table (1926). Any such table shall, for active lives, be combined with a mortality table permitted for calculating the reserves for life insurance policies; (F) for accidental death benefits in or supplementary to policies, for policies issued on or after January 1, 1966, the 1959 Accidental Death Benefits Table; for policies issued on or after January 1, 1961, and prior to January 1, 1966, either such table or, at the option of the insurer, the Inter-Company Double Indemnity Mortality Table; and for policies issued prior to January 1, 1961, the Inter-Company Double Indemnity Mortality Table. Either table shall be combined with a mortality table permitted for calculating the reserves for life insurance policies; and (G) for group life insurance, life insurance issued on the substandard basis and other special benefits, such tables as may be approved by the Commissioner. (d) Commissioners Reserve Valuation Method: Reserves according to the Commissioners Reserve Valuation Method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, shall be the excess, if any, of the present value, at the date of valuation, of such future guaranteed benefits provided for by such policies, over the then present value of any future modified net premiums for any such policy shall be such uniform percentage of the respective contract premiums for such benefits (excluding extra premiums on a substandard policy) that the present value, at the date of issue of the policy, of all such modified net premiums shall be equal to the sum of the then present value of such benefits provided for by the policy and the excess of (1) over (2) as follows: (1) at net level annual premium equal to the present value, at the date of issue, of such benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one percent per annum payable on the first and each subsequent anniversary of such policy on which a premium falls due; Provided, however, That such net level annual premium shall not exceed the net level annual premium on the nineteen-year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of such policy; (2) a net one-year term premium for such benefits provided for in the first policy year. Reserves according to the Commissioners Reserve Valuation Method for: (1) life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums, (2) annuity and pure endowment contracts, (3) disability and accidental death benefits in all policies and contracts, and (4) all other benefits, except life insurance and endowment benefits in life insurance policies, shall be calculated by a method consistent with the principles of this subsection. (e) Minimum aggregate reserves: In no event shall an insurer's aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after the operative date of section 984 of this title, be less than the aggregate reserves calculated in accordance with the method set forth in subsection (d) and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for such policies. (f) Optional reserve basis: Reserves for all policies and contracts issued prior to the operative date of section 984 of this title, may be calculated, at the option of the insurer, according to any standards which produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by the laws in effect immediately prior to such date. For any category of policies, contracts or benefits specified in subsection (c) of this section, issued on or after the operative date of section 984 of this title, reserves may be calculated, at the option of the insurer, according to any standard or standards which produce greater aggregate reserves for such category than those calculated according to the minimum standard herein provided, but the rate or rates of interest used shall not be higher than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided for therein; Provided, That reserves for participating life insurance policies issued on or after the operative date of section 984 of this title, may, with the consent of the Commissioner, be calculated according to a rate of interest lower than the rate of interest used in calculating the nonforfeiture benefits in such policies, with the further proviso that if such lower rate differs from the rate used in the calculation of the nonforfeiture benefits by more than one-half percent the insurer issuing such policies shall file with the Commissioner a plan for such equitable increases, if any, in the cash surrender values and nonforfeiture benefits in such policies as the Commissioner shall approve. Any such insurer which at any time had adopted any standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard herein provided may, with the approval of the Commissioner, adopt any lower standard of valuation, but not lower than the minimum herein provided. (g) Deficiency reserve: If the gross premium charged by any life insurer on any policy or contract is less than the net premium for the policy or contract according to the mortality table, rate of interest and method used in calculating the reserve thereon, there shall be maintained on such policy or contract a deficiency reserve in addition to all other reserves required by law. For each such policy or contract the deficiency reserve shall be the present value, according to such standard, of an annuity of the difference between such net premium and the premium charged for such policy or contract, running for the remainder of the premium-paying period.
 (a) An insurer may take credit for reserves on risks ceded to a reinsurer to the extent reinsured, except that no credit shall be allowed, as an asset or as a deduction from liability, to any ceding insurer for reinsurance unless the reinsurance is payable by the assuming insurer on the basis of the liability of the ceding insurer under the contracts reinsured without diminution because of the insolvency of the ceding insurer not unless under the contract of reinsurance the liability for such reinsurance is assumed by the assuming insurer or insurers as of the same effective date. (b) A reinsurance agreement may provide that the liquidator or receiver or statutory successor of an insolvent ceding insurer shall give written notice of the pendency of a claim against the insolvent ceding insurer on the policy or bond reinsured within a reasonable time after such claim is filed in the insolvency proceeding and that during the pendency of such claim any assuming insurer may investigate such claim and interpose, at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses which it may deem available to the ceding insurer or its liquidator or receiver or statutory successor. The expense thus incurred by the assuming insurer shall be chargeable, subject to court approval, against the insolvent ceding insurer as a part of the expense of liquidation to the extent of a proportionate share of the benefit which may accrue to the ceding insurer solely as a result of the defense undertaken by the assuming insurer. (c) Where two or more assuming insurers are involved in the same claim and a majority in interest elect to interpose to such claim, the expense shall be apportioned in accordance with the terms of the reinsurance agreement as though such expense had been incurred by the ceding insurer.
 (a) All bonds or other evidences of debt having a fixed term and rate held by any insurer may, if amply secured and not in default as to principal or interest, be valued as follows: (1) if purchased at par, at the par value; (2) if purchased above or below par, on the basis of the purchase price adjusted so as to bring the value to par at the earliest date callable at par or maturing at par so as to yield in the meantime the effective rate of interest at which the purchase was made; or in lieu of such method, according to such accepted method of valuation as is approved by the Commissioner; (3) purchase price shall in no case be taken at a higher figure than the actual market value at the time of purchase; and (4) unless otherwise provided by a valuation established or approved by the National Association of Insurance Commissioners, no such security shall be carried at above call price for the entire issue during any period within which the security may be so called. (b) Such securities not amply secured or in default as to principal or interest shall be carried at market value. (c) The Commissioner shall have full discretion in determining the method of calculating values according to the rules set forth in this section, and not inconsistent with any such methods then currently formulated or approved by the National Association of Insurance Commissioners.
 (a) Securities, other than those referred to in section 515 of this title, held by an insurer shall be valued, in the discretion of the Commissioner, at their market value, or at their appraised value, or at prices determined by him as representing their fair market value, all consistent with any current method for the valuation of any such security formulated or approved by the National Association of Insurance Commissioners. (b) Preferred or guaranteed stocks or shares while paying full dividends may be carried at a fixed value in lieu of market value, at the discretion of the Commissioner and in accordance with such method of computation as he may approve. (c) The stock of a subsidiary of an insurer shall be valued on the basis of the value of only such of the assets of such subsidiary as would constitute lawful investments for the insurer if acquired or held directly by the insurer.
 (a) Real property acquired pursuant to a mortgage loan or a contract for a deed, in the absence of a recent appraisal deemed by the Commissioner to be reliable, shall not be valued at an amount greater than the unpaid principal of the defaulted loan or contract at the date of such acquisition, together with any taxes and expenses paid or incurred in connection with such acquisition, and the cost of improvements thereafter made by the insurer and any amounts thereafter paid by the insurer on assessments levied for improvements in connection with the property. (b) Other real property held by an insurer shall not be valued at any amount in excess of fair value. (c) Personal property acquired pursuant to chattel mortgages made under section 565 of this title shall not be valued at an amount greater than the unpaid balance of principal on the defaulted loan at date of acquisition together with taxes and expenses incurred in connection with such acquisition, or the fair value of such property, whichever amount is the lesser.
 Purchase money mortgages shall be valued in an amount not exceeding the acquisition cost of the real property covered thereby or 90 percent of the fair value of such real property, whichever is less.
 The Commissioner may consider the following standards, either singly or as a combination of two or more, to determine whether the continued operation of any insurer transacting an insurance business in this Territory may be hazardous to its policyholders, creditors or the public: (1) Adverse findings reported in financial condition and market conduct examination reports, audit reports, and actuarial opinions, reports or summaries; (2) NAIC Insurance Regulatory Information System and its other financial analysis solvency tools and reports; (3) Whether the insurer has made adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the insurer, when considered in light of the assets held by the insurer with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on such assets, and the considerations anticipated to be received and retained under such policies and contracts; (4) The ability of an assuming reinsurer to perform and whether the insurers reinsurance program provides sufficient protection for the insurers remaining surplus after considering the insurers cash flow and the classes of business written as well as the financial condition of the assuming reinsurer; (5) Whether the insurers operating loss in the last twelve-month period or any shorter period, including but not limited to net capital gain or loss, change in non-admitted assets, and cash dividends paid to shareholders, is greater than 50 percent of the insurers remaining surplus as regards policyholders in excess of the minimum required; (6) Whether the insurers operating loss in the last twelve-month period or any shorter period, excluding net capital gains, is greater than 20 percent of the insurers remaining surplus in regards policyholders in excess of the minimum required; (7) Whether a reinsurer, obligor or any entity within the insurers insurance holding company system, is insolvent, threatened with insolvency or delinquent in payment of its monetary or other obligations, and which in the opinion of the Commissioner may affect the solvency of the insurer; (8) Contingent liabilities, pledges or guaranties that either individually or collectively involve a total amount which in the opinion of the Commissioner may affect the solvency of the insurer; (9) Whether any controlling person of an insurer is delinquent in the transmitting to, or payment of, net premiums to the insurer; (10) The age and collectability of receivables; (11) Whether the management of an insurer, including officers, directors, or any other person who directly or indirectly controls the operation of the insurer, fails to possess and demonstrate the competence, fitness and reputation deemed necessary to serve the insurer in such position; (12) Whether management of an insurer has failed to respond to inquiries relative to the condition of the insurer or has furnished false and misleading information concerning an inquiry; (13) Whether the insurer has failed to meet financial and holding company filing requirements in the absence of a reason satisfactory to the Commissioner; (14) Whether management of an insurer either has filed any false or misleading sworn financial statement, or has released false or misleading financial statement to lending institutions or to the public, or has made a false or misleading entry, or has omitted an entry of material amount in the books of the insurer; (15) Whether the insurer has grown so rapidly and to such an extent that it lacks adequate financial and administrative capacity to meet its obligations in a timely manner; (16) Whether the insurer has experienced or will experience in the foreseeable future cash flow or liquidity problems; (17) Whether management has established reserves that do not comply with minimum standards established by territorial insurance laws, regulations, statutory accounting standards, sound actuarial principles and standards of practice; (18) Whether management persistently engages in material under reserving that results in adverse development; and (19) Whether transactions among affiliates, subsidiaries or controlling persons for which the insurer receives assets or capital gains, or both, do not provide sufficient value, liquidity or diversity to assure the insurers ability to meet its outstanding obligations as they mature.
 (a) For the purposes of making a determination of an insurers financial condition under section 519, the Commissioner may: (1) disregard any credit or amount receivable resulting from transactions with a reinsurer that is insolvent, impaired or otherwise subject to a delinquency proceeding; (2) make appropriate adjustments including disallowance to asset values attributable to investments in or transactions with parents, subsidiaries or affiliates consistent with the NAIC Accounting Practices and Procedures Manual, and Virgin Islands law and regulations; (3) refuse to recognize the stated value of accounts receivable if the ability to collect receivables is highly speculative in view of the age of the account or the financial condition of the debtor; and (4) increase the insurers liability in an amount equal to any contingent liability, pledge, or guarantee not otherwise included if there is a substantial risk that the insurer will be called upon to meet the obligation undertaken within the next twelve-month period. (b) If the Commissioner determines that the continued operation of the insurer licensed to transact business in this Territory may be hazardous to its policyholders, creditors or the public, then the Commissioner may, upon a determination, issue an order requiring the insurer to: (1) reduce the total amount of present and potential liability for policy benefits by reinsurance: (2) reduce, suspend or limit the volume of business being accepted or renewed; (3) reduce general insurance and commission expenses by specified methods; (4) increase the insurers capital and surplus; (5) suspend or limit the declaration and payment of dividend by an insurer to its stockholders or to its policyholders; (6) file reports in a form acceptable to the Commissioner concerning the market value of an insurers assets; (7) limit or withdraw from certain investments or discontinue certain investment practices to the extent the Commissioner deems necessary; (8) document the adequacy of premium rates in relation to the risks insured; (9) file, in addition to regular annual statements, interim financial reports on the form adopted by the National Association of Insurance Commissioners or in such format as promulgated by the Commissioner; (10) correct corporate governance practice deficiencies, and adopt and utilize governance practices acceptable to the Commissioner; (11) provide a business plan to the Commissioner to continue to transact business in the Territory; and (12) notwithstanding any other provision of law limiting the frequency or amount of premium rate adjustments, adjust rates for any non-life insurance product written by the insurer that the Commissioner considers necessary to improve the financial condition of the insurer. If the insurer is a foreign insurer, the Commissioners order may be limited to the extent provided by statute.
 An insurer subject to an order issued under subsection 520(b) may request a hearing to review the order in accordance with the procedures set forth in chapter 7 of this title.
 This subchapter may be cited as the Standard Valuation Act of 2018.
 In this subchapter: (a) Accident and health insurance means contracts that incorporate morbidity risk and provide protection against economic loss resulting from accident, sickness, or medical conditions and as may be specified in the valuation manual. (b) Alien company means an insurer as defined in 22 V.I.C.  201(3). (c) Appointed actuary means a qualified actuary who is appointed by a company in accordance with the valuation manual to prepare an actuarial opinion required under section 535, subsections (a), (b) and (c). (d) Company means an entity that has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in the Territory and has at least one of these policies in force or on claim or has written, issued, or reinsured life insurance contracts, accident and health insurance contracts, or deposit-type contracts in any state and is required to hold a certificate of authority to write life insurance, accident and health insurance, or deposit-type contracts in the Territory. (e) Commissioner means the Commissioner of Insurance of the Virgin Islands. (f) Deposit-type contract means a contract that does not incorporate mortality or morbidity risks and other contracts that may be specified in the valuation manual. (g) Foreign company means an insurer as defined in 22 V.I.C.  201(2). (h) Life insurance means contracts that incorporate mortality risk, including annuity and pure endowment contracts, and other contracts as may be specified in the valuation manual. (i) NAIC means the National Association of Insurance Commissioners. (j) Policyholder behavior means any action a policyholder, contract holder or any other person with the right to elect options, such as a certificate holder, may take under a policy or contract including, lapse, withdrawal, transfer, deposit, premium payment, loan, annuitization, or benefit elections prescribed by the policy or contract, but excluding events of mortality or morbidity that result in benefits prescribed in their essential aspects by the terms of the policy or contract. (k) Principle-based valuation means a reserve valuation that uses one or more methods, or one or more assumptions determined by the insurer and is required to comply with section 538 as specified in the valuation manual. (l) Qualified actuary means an individual who is qualified to sign the applicable statement of actuarial opinion in accordance with the American Academy of Actuaries qualification standards for actuaries and who meets the requirements specified in the valuation manual. (m) Tail risk means a risk that occurs either where the frequency of low probability events is higher than expected under a normal probability distribution or where there are observed events of very significant size or magnitude. (n) Territory means the Virgin Islands of the United States as described in the Revised Organic Act of the Virgin Islands, section 2, subsection (a). (o) Valuation manual means the NAIC manual of valuation instructions that became operative on January 1, 2017.
 (a) The minimum standard for the valuation of policies and contracts issued before March 29, 1968 is the minimum standard provided by the laws in effect immediately before March 29, 1968. (b) Notwithstanding any other requirements as provided in this subchapter, the Standard Valuation Law adopted on March 29, 1968 and encoded at title 22 Virgin Islands Code, section 513 is applicable to the reserves required under all policies issued before the effective date of this subchapter.
 (a) The Commissioner shall annually value, or cause to be valued, the reserve for all outstanding life insurance contracts, annuity and pure endowment contracts, accident and health contracts, and deposit-type contracts of every company issued on or after the effective date of this subchapter. In making a valuation, the Commissioner may use the Departments actuary or employ an actuary for that purpose. Upon demand by the Commissioner, the insurer shall pay the reasonable compensation and expenses of the actuary, at a rate approved by the Commissioner, which is supported by an itemized statement of the compensation and expenses. (b) The Commissioner may accept a valuation of the reserves of a foreign or alien company made, or caused to be made, by the insurance supervisory official of any state or other jurisdiction when the valuation complies with the minimum standard provided in this subchapter. (c) Sections 546 and 547 apply to all policies and contracts issued on or after the effective date of this subchapter.
 (a)  (1) Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in the Virgin Islands and subject to regulation by the Commissioner shall annually submit the opinion of the appointed actuary stating whether the reserves and related actuarial items held in support of the policies and contracts are: (A) computed appropriately; (B) based on assumptions that satisfy contractual provisions; (C) consistent with prior reported amounts; and (D) comply with applicable laws of this Territory. (2) The valuation manual prescribes the specifics of this opinion, including any items necessary to its scope. (b) Every company with outstanding life insurance contracts, accident and health insurance contracts or deposit-type contracts in the Virgin Islands, subject to regulation by the Commissioner, except as exempted in the valuation manual, shall annually include in the opinion required by subsection (a), an opinion by the same appointed actuary stating whether the reserves and related actuarial items held in support of the policies and contracts specified in the valuation manual made adequate provision for the companys obligations under the policies and contracts, including the benefits under and expenses associated with the policies and contracts, when considered in light of the assets held by the company with respect to the reserves and related actuarial items, including the investment earnings on the assets and the considerations anticipated to be received and retained under the policies and contracts. (c)  (1) Each opinion required by subsection (a) is governed by the following provisions: (A) A memorandum, in form and substance as specified in the valuation manual, and acceptable to the Commissioner, must be prepared to support each actuarial opinion. (B) The opinion must be in form and substance as specified in the valuation manual and acceptable to the Commissioner. (C) The opinion must be submitted with the annual statement reflecting the valuation of the reserve liabilities for each year ending on or after the operative date of the valuation manual. (D) The opinion applies to all policies and contracts subject to subsection (b), plus other actuarial liabilities as may be specified in the valuation manual. (E) The opinion must be based on standards adopted from time to time by the Actuarial Standards Board or its successor, and on such additional standards as may be prescribed in the valuation manual. (2) If the insurance company fails to provide a supporting memorandum at the request of the Commissioner within a period specified in the valuation manual or the Commissioner determines that the supporting memorandum provided by the insurance company fails to meet the standards prescribed by the valuation manual or is otherwise unacceptable to the Commissioner, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting memorandum required by the Commissioner. (d) For any opinion required under subsection (a), the following applies: (1) For an opinion required to be submitted by a foreign or alien company, the Commissioner may accept the opinion filed by that company with the insurance supervisory official of another state if the Commissioner determines that the opinion reasonably meets the requirements applicable to a company domiciled in the Territory. (2) Neither the appointed actuary nor the qualified actuary is liable for damages to any person, other than the insurance company and the Commissioner for any act, error, omission, decision or conduct with respect to the actuarys opinion, except in cases of fraud or willful misconduct. (3) The Commissioner may take disciplinary action against a company, a qualified actuary, or an appointed actuary as provided in the regulations promulgated by the Commissioner.
 Except as provided in sections 537, 538, and 545, the minimum standard for the valuation of policies and contracts issued before the effective date of this subchapter is that provided by the laws in effect immediately before that date. Except as otherwise provided in sections 537, 538, and 545, the minimum standard for the valuation of all policies and contracts issued on or after the effective date of this subchapter is the Commissioners reserve valuation methods defined in sections 539, 540, 543, and 545, plus 3 1/2 percent interest, and the following tables: (1) For all policies of life insurance issued on or after the effective date of section 997 of the Standard Nonforfeiture Law of 2018 for Life Insurance, 22 V.I.C., subch. III: (A) The Commissioners 1980 Standard Ordinary Mortality Table; (B) At the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors; or (C) Any ordinary mortality table adopted after 1980 by the NAIC that is approved by the Commissioner for use in determining the minimum standard of valuation for the policies. (2) For individual annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies: (A) the 1937 Standard Annuity Mortality Table; or (B) at the option of the company, the Annuity Mortality Table for 1949 Ultimate; or (C) any modification of either of these tables approved by the Commissioner. (3) For group annuity and pure endowment contracts, excluding any disability and accidental death benefits in the policies: (A) The Group Annuity Mortality Table for 1951; (B) a modification of the table approved by the Commissioner; or (C) at the option of the company, any of the tables or modifications of tables specified for individual annuity and pure endowment contracts. (4) For total and permanent disability benefits in or supplementary to ordinary policies or contracts, or policies or contracts issued on or after the effective date of this subchapter: the tables of Period 2 disablement rates and the 1930 to 1950 termination rates of the 1952 Disability Study of the Society of Actuaries, with due regard to the type of benefit or any tables of disablement rates and termination rates adopted after 1980 by the NAIC that are approved by the Commissioner for use in determining the minimum standard of valuation for those policies; (5) For accidental death benefits in or supplementary to policies issued on or after the effective date of this subchapter: the 1959 Accidental Death Benefits Table or any accidental death benefits table adopted after 1980 by the NAIC that is approved by regulation promulgated by the Commissioner for use in determining the minimum standard of valuation; and (6) For group life insurance, life insurance issued on the substandard basis and other special benefits: tables approved by the Commissioner.
 Except as provided in section 538, the minimum standard of valuation for individual annuity and pure endowment contracts issued on or after the effective date of this subchapter and for annuities and pure endowments under group annuity and pure endowment contracts purchased on or after the effective date of this subchapter is the Commissioners reserve valuation methods defined in sections 539 and 540 and the following tables and interest rates: (1) For individual single premium immediate annuity contracts issued on or after the effective date of this subchapter, excluding any disability and accidental death benefits in those contracts: the 1971 Individual Annuity Mortality Table or any individual annuity mortality table adopted after 1980 by the NAIC that is approved by the Commissioner for use in determining the minimum standard of valuation for these contracts, or any modification of these tables approved by the Commissioner and 7 1/2 percent interest; (2) For individual annuity and pure endowment contracts issued on or after the effective date of this subchapter, other than single premium immediate annuity contracts, excluding any disability and accidental death benefits in those contracts: the 1971 Individual Annuity Mortality Table or any individual annuity mortality table adopted after 1980 by the NAIC that is approved by the Commissioner for use in determining the minimum standard of valuation for those contracts, or any modification of these tables approved by the Commissioner, and 5 1/2 percent interest for single premium deferred annuity and pure endowment contracts and 4 1/2 percent interest for all other individual annuity and pure endowment contracts; and (3) For annuities and pure endowments purchased on or after the effective date of this subchapter under group annuity and pure endowment contracts, excluding any disability and accidental death benefits purchased under those contracts: the 1971 Group Annuity Mortality Table, or any group annuity mortality table adopted after 1980 by the NAIC that is approved by the Commissioner for use in determining the minimum standard of valuation for annuities and pure endowments, or any modification of these tables approved by the Commissioner and 7 1/2 percent interest.
 (a) The interest rates used in determining the minimum standard for the valuation as provided in subsections (b), (c) and (d) are the calendar year statutory valuation interest rates for the following: (1) Life insurance policies issued in a particular calendar year, on or after the effective date of section 997 of the Standard Nonforfeiture Law of 2018 for Life Insurance; (2) Individual annuity and pure endowment contracts issued in a particular calendar year on or after January 1 of the calendar year next following the effective date of this subchapter; (3) Annuities and pure endowments purchased in a particular calendar year on or after January 1 of the calendar year next following the effective date of this subchapter under group annuity and pure endowment contracts; and (4) The net increase, if any, in a particular calendar year after January 1 of the calendar year next following the effective date of this subchapter, in amounts held under guaranteed interest contracts. (b)  (1) The calendar year statutory valuation interest rates, I, are determined as follows and the results rounded to the nearer 1/4 of 1 percent: (A) For life insurance: I = .03 + W  (R - .03) + W/2  (R - .09) (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and from guaranteed interest contracts with cash settlement options: I = .03 + W  (R - .03) Where R is the lesser of R and .09, R is the greater of R and .09, R is the reference interest rate defined in this section, W is the weighting factor defined in this section; (C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on an issue year basis, except as stated in subparagraph (B), the formula for life insurance stated in subparagraph (A) applies to annuities and guaranteed interest contracts with guarantee durations in excess of 10 years and the formula for single premium immediate annuities stated in subparagraph (B) applies to annuities and guaranteed interest contracts with guarantee duration of 10 years or less; (D) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the formula for single premium immediate annuities stated in subparagraph (B) applies. (E) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, the formula for single premium immediate annuities stated in subparagraph (B) applies. (2) However, if the calendar year statutory valuation interest rate for a life insurance policy issued in any calendar year determined without reference to this sentence differs from the corresponding actual rate for similar policies issued in the immediately preceding calendar year by less than 1/2 of 1 percent, the calendar year statutory valuation interest rate for the life insurance policies is equal to the corresponding actual rate for the immediately preceding calendar year. For purposes of applying the immediately preceding sentence, the calendar year statutory valuation interest rate for life insurance policies issued in a calendar year must be determined for 1980 using the reference interest rate defined in 1979 and must be determined for each subsequent calendar year regardless of when section 997 of the Standard Nonforfeiture Law of 2018 for Life Insurance became operative. (c)  (1) The weighting factors referred to in the formulas are given in the following tables: (A) Weighting Factors for Life Insurance:Guarantee Duration (Years)Weighting Factors  10 or less.50More than 10, but not more than 20.45More than 20.35 For life insurance, the guarantee duration is the maximum number of years the life insurance can remain in force on a basis guaranteed in the policy or under options to convert to plans of life insurance with premium rates or nonforfeiture values or both which are guaranteed in the original policy; (B) Weighting factor for single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options: (D) Weighting factors for other annuities and for guaranteed interest contracts, except as stated in subparagraph (B), are specified in clauses (i), (ii) and (iii), according to the rules and definitions in clauses (iv), (v) and (vi): (i) For annuities and guaranteed interest contracts valued on an issue year basis:Guarantee DurationWeighting Factor forPlan Type(Years)ABC5 or less:.80.60.50More than 5, but not more than 10:.75.60.50More than 10, but not more than 20:.65.50.45More than 20:.45.35.35     Plan Type ABC(ii) For annuities and guaranteed interest contracts valued on a change in fund basis, the factors shown in item (i) above increased by:.15.25.05     Plan Type ABC(iii) For annuities and guaranteed interest contracts valued on an issue year basis other than those with no cash settlement options that do not guarantee interest on considerations received more than one year after issue or purchase and for annuities and guaranteed interest contracts valued on a change in fund basis that do not guarantee interest rates on considerations received more than 12 months beyond the valuation date, the factors shown in clause (i) or derived in clause (ii) increased by:.05.05.05 (iv) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the guarantee duration is the number of years for which the contract guarantees interest rates in excess of the calendar year statutory valuation interest rate for life insurance policies with guarantee duration in excess of 20 years. For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the guaranteed duration is the number of years from the date of issue or date of purchase to the date annuity benefits are scheduled to commence. (v) Plan type as used in the tables is defined as follows: a. Plan Type A: At any time, policyholder may withdraw funds only: 1. with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or 2. without an adjustment but installments over five years or more, or 3. as an immediate life annuity, or 4. no withdrawal permitted. b. Plan Type B: At the end of interest rate guarantee, funds may be withdrawn without an adjustment in a single sum or installments over less than five years; but before expiration of the interest rate guarantee, policyholder may withdraw funds only: 1. with an adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or 2. without an adjustment but in installments over five years or more, or 3. no withdrawal permitted. c. Plan Type C: Policyholder may withdraw funds before expiration of interest rate guarantee in a single sum or installments over less than five years either: 1. without adjustment to reflect changes in interest rates or asset values since receipt of the funds by the insurance company, or 2. subject only to a fixed surrender charge stipulated in the contract as a percentage of the fund. (vi) A company may elect to value guaranteed interest contracts with cash settlement options and annuities with cash settlement options on either an issue year basis or on a change in fund basis. Guaranteed interest contracts with no cash settlement options and other annuities with no cash settlement options must be valued on an issue year basis. As used in this section, an issue year basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard for the entire duration of the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of issue or year of purchase of the annuity or guaranteed interest contract and the change in fund basis of valuation refers to a valuation basis under which the interest rate used to determine the minimum valuation standard applicable to each change in the fund held under the annuity or guaranteed interest contract is the calendar year valuation interest rate for the year of the change in the fund. (d)  (1) The interest rate referred to in subsection (b) is defined as follows: (A) For life insurance, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year preceding the year of issue, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moodys Investors Service, Inc. (B) For single premium immediate annuities and for annuity benefits involving life contingencies arising from other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or year of purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moodys Investors Service, Inc. (C) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subparagraph (B), with guarantee duration in excess of 10 years, the lesser of the average over a period of 36 months and the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moodys Investors Service, Inc. (D) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a year of issue basis, except as stated in subparagraph (B), with guarantee duration of 10 years or less, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moodys Investors Service, Inc. (E) For other annuities with no cash settlement options and for guaranteed interest contracts with no cash settlement options, the average over a period of 12 months, ending on June 30 of the calendar year of issue or purchase, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moodys Investors Service, Inc. (F) For other annuities with cash settlement options and guaranteed interest contracts with cash settlement options, valued on a change in fund basis, except as stated in subparagraph (B), the average over a period of 12 months, ending on June 30 of the calendar year of the change in the fund, of the monthly average of the composite yield on seasoned corporate bonds, as published by Moodys Investors Service, Inc. (2) If the monthly average of the composite yield on seasoned corporate bonds is no longer published by Moodys Investors Service, Inc. or if the NAIC determines that the monthly average of the composite yield on seasoned corporate bonds as published by Moodys Investors Service, Inc. is no longer appropriate for the determination of the reference interest rate, then an alternative method for determination of the reference interest rate adopted by the NAIC and approved by regulation promulgated by the Commissioner may be substituted.
 (a) Except as otherwise provided in sections 540, 543, and 545, reserves according to the Commissioners reserve valuation method, for the life insurance and endowment benefits of policies providing for a uniform amount of insurance and requiring the payment of uniform premiums, are the excess, if any, of the present value, at the date of valuation, of the future guaranteed benefits provided for by those policies, over the then present value of any future modified net premiums therefor. The modified net premiums for a policy is the uniform percentage of the respective contract premiums for the benefits such that the present value, at the date of issue of the policy, of all modified net premiums is equal to the sum of the then present value of the benefits provided for by the policy and the excess of paragraph (1) over paragraph (2), as follows: (1) A net level annual premium equal to the present value, at the date of issue, of the benefits provided for after the first policy year, divided by the present value, at the date of issue, of an annuity of one per annum payable on the first and each subsequent anniversary of the policy on which a premium falls due. However, the net level annual premium may not exceed the net level annual premium on the 19-year premium whole life plan for insurance of the same amount at an age one year higher than the age at issue of the policy. (2) A net one-year term premium for the benefits provided for in the first policy year. (b)  (1) For a life insurance policy issued on or after January 1 of the fourth calendar year commencing after the effective date of this subchapter for which the contract premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value or a combination in an amount greater than the excess premium, the reserve according to the Commissioners reserve valuation method as of any policy anniversary occurring on or before the assumed ending date defined in this subchapter as the first policy anniversary on which the sum of any endowment benefit and any cash surrender value then available is greater than the excess premium, except as otherwise provided in section 543, is the greater of the reserve as of the policy anniversary calculated as described in subsection (a) and the reserve as of the policy anniversary calculated as described in subsection (a), but with: (A) the value defined in subsection (a) being reduced by 15% percent of the amount of such excess first year premium, (B) all present values of benefits and premiums being determined without reference to premiums or benefits provided for by the policy after the assumed ending date, (C) the policy being assumed to mature on that date as an endowment, and (D) the cash surrender value provided on that date being considered as an endowment benefit. (2) In making the above comparison the mortality and interest bases stated in sections 536 and 538 must be used. (c) Reserves according to the Commissioners reserve valuation method must be calculated by a method consistent with the principles in subsections (a) and (b) for: (1) Life insurance policies providing for a varying amount of insurance or requiring the payment of varying premiums; (2) Group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation established or maintained by an employer including a partnership or sole proprietorship or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code; (3) Disability and accidental death benefits in all policies and contracts; and (4) All other benefits, except life insurance and endowment benefits in life insurance policies and benefits provided by all other annuity and pure endowment contracts.
 (a) This section applies to all annuity and pure endowment contracts other than group annuity and pure endowment contracts purchased under a retirement plan or plan of deferred compensation, established or maintained by an employer including a partnership or sole proprietorship or by an employee organization, or by both, other than a plan providing individual retirement accounts or individual retirement annuities under section 408 of the Internal Revenue Code. (b) Reserves according to the Commissioners annuity reserve method for benefits under annuity or pure endowment contracts, excluding any disability and accidental death benefits in the contracts, is the greatest of the respective excesses of the present values, at the date of valuation, of the future guaranteed benefits, including guaranteed nonforfeiture benefits, provided for by the contracts at the end of each respective contract year, over the present value, at the date of valuation, of any future valuation considerations derived from future gross considerations, required by the terms of the contract, that become payable before the end of the respective contract year. The future guaranteed benefits must be determined by using the mortality table, if any, and the interest rate, or rates, specified in the contracts for determining guaranteed benefits. The valuation considerations are the portions of the respective gross considerations applied under the terms of the contracts to determine nonforfeiture values.
 (a) A companys aggregate reserves for all life insurance policies, excluding disability and accidental death benefits, issued on or after the effective date of this subchapter, may not be less than the aggregate reserves calculated in accordance with the methods set forth in sections 539, 540, 543 and 544 and the mortality table or tables and rate or rates of interest used in calculating nonforfeiture benefits for the policies. (b) The aggregate reserves for all policies, contracts and benefits may not be less than the aggregate reserves determined by the appointed actuary to be necessary to render the opinion required by section 535.
 (a) Reserves for policies and contracts issued before the effective date of this subchapter may be calculated, at the option of the company, according to any standards that produce greater aggregate reserves for all such policies and contracts than the minimum reserves required by the laws in effect immediately before the effective date of this subchapter. (b) Reserves for any category of policies, contracts or benefits established by the Commissioner, issued on or after the effective date of this subchapter, may be calculated, at the option of the company, according to any standards that produce greater aggregate reserves for the category than those calculated according to the minimum standard provided in this subchapter, but the rate or rates of interest used for policies and contracts, other than annuity and pure endowment contracts may not be greater than the corresponding rate or rates of interest used in calculating any nonforfeiture benefits provided in the policies or contracts. (c) A company that adopts a standard of valuation producing greater aggregate reserves than those calculated according to the minimum standard provided under this subchapter, may adopt a lower standard of valuation with the approval of the Commissioner, but not lower than the minimum provided in this subchapter; but, for the purposes of this section, the holding of additional reserves previously determined by the appointed actuary to be necessary to render the opinion required by section 535 may not be considered the adoption of a higher standard of valuation.
 (a) If in any contract year the gross premium charged by a company on a policy or contract is less than the valuation net premium for the policy or contract calculated by the method used in calculating the reserve, but using the minimum valuation standards of mortality and rate of interest, the minimum reserve required for the policy or contract is the greater of either the reserve calculated according to the mortality table, rate of interest, and method actually used for the policy or contract, or the reserve calculated by the method actually used for the policy or contract but using the minimum valuation standards of mortality and rate of interest and replacing the valuation net premium by the actual gross premium in each contract year for which the valuation net premium exceeds the actual gross premium. The minimum valuation standards of mortality and rate of interest referred to in this section are those standards stated in sections 536 and 538. (b) For a life insurance policy issued on or after January 1 of the fourth calendar year commencing after the effective date of this subchapter for which the gross premium in the first policy year exceeds that of the second year and for which no comparable additional benefit is provided in the first year for the excess and which provides an endowment benefit or a cash surrender value or a combination in an amount greater than the excess premium, the provisions of this section must be applied as if the method actually used in calculating the reserve for the policy was the method described in section 539, ignoring 539(b). The minimum reserve at each policy anniversary of such a policy is the greater of the minimum reserve calculated in accordance with section 539, including section 539(b), and the minimum reserve calculated in accordance with this section.
 (a) For a plan of life insurance that provides for future premium determination, the amounts of which are to be determined by the insurance company based on then estimates of future experience, or for a plan of life insurance or annuity that is of a nature that the minimum reserves cannot be determined by the methods described in sections 539, 540, and 543, the reserves that are held under the plan must: (1) Be appropriate in relation to the benefits and the pattern of premiums for that plan; and (2) Be computed by a method that is consistent with the principles of this subchapter, as determined by regulations promulgated by the Commissioner. (b) Notwithstanding section 810 of this title or any other provision in the laws of this Territory, a policy, contract or certificate providing a plan described in subsection (a), must be affirmatively approved by the Commissioner before it can be marketed, issued, delivered or used in this Territory.
 For accident and health insurance contracts issued on or after the effective date of this subchapter, the standard prescribed in the valuation manual is the minimum standard of valuation required under section 534(a). For disability, accident and health or sickness insurance contracts issued on or after March 29, 1968, and before the effective date of this subchapter, the minimum standard of valuation is the standard adopted by the Commissioner by regulation.
 (a) For policies issued on or after the effective date of this subchapter, the standard prescribed in the valuation manual is the minimum standard of valuation required under section 534(a), except as provided under subsections (e) or (g). (b) The operative date of the valuation manual is January 1, 2017. (c) Unless a change in the valuation manual specifies a later effective date, changes to the valuation manual are effective on January 1 following the date when all of the following have occurred: (1) The change to the valuation manual has been adopted by the NAIC by an affirmative vote representing: (A) At least 3/4 of the members of the NAIC voting, but not less than a majority of the total membership, and (B) Members of the NAIC representing jurisdictions totaling greater than 75 percent of the direct premiums written as reported in the following annual statements most recently available before the vote referred to in paragraph (1)(A): life, accident and health annual statements, health annual statements, or fraternal annual statements. (2) The valuation manual becomes effective pursuant to an order issued by or by regulation of the Commissioner. (d) The valuation manual must specify all of the following: (1) Minimum valuation standards for and definitions of the policies or contracts subject to section 534(a). The minimum valuation standards must be: (A) The Commissioners reserve valuation method for life insurance contracts, other than annuity contracts, subject to section 534(a); (B) The Commissioners annuity reserve valuation method for annuity contracts subject to section 534(a); and (C) Minimum reserves for all other policies or contracts subject to section 534(a). (2) Which policies or contracts or types of policies or contracts that are subject to the requirements of a principle-based valuation provided for in section 547(a) and the minimum valuation standards consistent with those requirements; (3) For policies and contracts subject to a principle-based valuation under section 547: (A) Requirements for the format of reports to the Commissioner under section 547(b)(3) and which must include information necessary to determine if the valuation is appropriate and in compliance with this subchapter; (B) Assumptions must be prescribed for risks over which the company does not have significant control or influence. (C) Procedures for corporate governance and oversight of the actuarial function, and a process for appropriate waiver or modification of such procedures. (4) For policies not subject to a principle-based valuation under section 547, the minimum valuation standard must either: (A) Be consistent with the minimum standard of valuation before the operative date of the valuation manual; or (B) Develop reserves that quantify the benefits and guarantees, and the funding, associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring. (5) Other requirements, including those relating to reserve methods, models for measuring risk, generation of economic scenarios, assumptions, margins, use of company experience, risk measurement, disclosure, certifications, reports, actuarial opinions and memorandums, transition rules and internal controls; and (6) The data and form of the data required under section 548, with whom the data must be submitted, and may specify other requirements, including data analyses and reporting of analyses. (e) In the absence of a specific valuation requirement or if a specific valuation requirement in the valuation manual is not, in the opinion of the Commissioner, in compliance with this subchapter, then the company shall, with respect to such requirements, comply with minimum valuation standards prescribed by the Commissioner. (f) The Commissioner may engage a qualified actuary, at the expense of the company, to perform an actuarial examination of the company and opine on the appropriateness of any reserve assumption or method used by the company, or to review and opine on a companys compliance with any requirement set forth in this subchapter. The Commissioner may rely upon the opinion of a qualified actuary engaged by the Commissioner from another state, district or territory of the United States regarding provisions contained within this subchapter. As used in this subsection, the term engage includes employment and contracting. (g) The Commissioner may require a company to change any assumption or method that in the opinion of the Commissioner is necessary in order to comply with the requirements of the valuation manual or this subchapter; and the company shall adjust the reserves as required by the Commissioner. The Commissioner may take other disciplinary action as permitted pursuant to chapters 7 and 9 of this title.
 (a) A company shall establish reserves using a principle-based valuation that meets the following conditions for policies or contracts as specified in the valuation manual: (1) Quantify the benefits and guarantees, and the funding associated with the contracts and their risks at a level of conservatism that reflects conditions that include unfavorable events that have a reasonable probability of occurring during the lifetime of the contracts. Policies or contracts with significant tail risk must reflect conditions appropriately adverse to quantify the tail risk. (2) Incorporate assumptions, risk analysis methods and financial models and management techniques that are consistent with, but not necessarily identical to, those utilized within the companys overall risk assessment process, while recognizing potential differences in financial reporting structures and any prescribed assumptions or methods. (3) Incorporate assumptions that are derived in one of the following manners: (A) The assumption is prescribed in the valuation manual. (B) For assumptions that are not prescribed, the assumptions must: (i) Be established utilizing the companys available experience, to the extent it is relevant and statistically credible; or (ii) if that company data is not available, relevant, or statistically credible, be established utilizing other relevant, statistically credible experience. (4) Provide margins for uncertainty including adverse deviation and estimation error, such that the greater the uncertainty the larger the margin and resulting reserve. (b) A company using a principle-based valuation for one or more policies or contracts subject to this section as specified in the valuation manual shall: (1) Establish procedures for corporate governance and oversight of the actuarial valuation function consistent with those described in the valuation manual. (2) Provide to the Commissioner and the board of directors for the company an annual certification of the effectiveness of the internal controls with respect to the principle-based valuation. The internal controls must be designed to assure that all material risks inherent in the liabilities and associated assets subject to the valuation are included in the valuation, and that valuations are made in accordance with the valuation manual. The certification must be based on the controls in place as of the end of the preceding calendar year. (3) Develop and file with the Commissioner upon request a principle -based valuation report that complies with standards prescribed in the valuation manual. (c) A principle-based valuation may include a prescribed formulaic reserve component.
 A company shall submit mortality, morbidity, policyholder behavior, or expense experience and other data as prescribed in the valuation manual.
 (a) For purposes of this section, Confidential Information means: (1) A memorandum in support of an opinion submitted under section 535 and any other documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with the memorandum; (2) All documents, materials and other information, including, all working papers, and copies, created, produced or obtained by or disclosed to the Commissioner or any other person in the course of an examination made under section 546(f); but if an examination report or other material prepared in connection with an examination made under chapter 5 of this title is not held as private and confidential information under chapter 5 of this title, an examination report or other material prepared in connection with an examination made under section 546(f) is not Confidential Information if the examination report or other material had been prepared under chapter 5 of this title; (3) Any reports, documents, materials and other information developed by a company in support of, or in connection with, an annual certification by the company under section 547(b)(2), evaluating the effectiveness of the companys internal controls with respect to a principle-based valuation and any other documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such reports, documents, materials and other information; (4) Any principle-based valuation report developed under section 547(b)(3) and any other documents, materials and other information, including, but not limited to, all working papers, and copies thereof, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such report; and (5) Any documents, materials, data and other information submitted by a company under section 548, collectively, experience data; and any other documents; material; data and other information; including, all working papers; and copies of working papers, created or produced in connection with such experience data, in each case that includes any potentially company-identifying or personally identifiable information, that is provided to or obtained by the Commissioner together with any experience data, and any other documents, materials, data and other information, including, all working papers, and copies of working papers, created, produced or obtained by or disclosed to the Commissioner or any other person in connection with such experience materials. (b)  (1) As provided in this section, a companys Confidential Information in the possession or control of the Division of Banking, Insurance and Financial Regulation or the Commissioner is confidential and privileged, and is not subject to examination by the public, subject to subpoena, to discovery, or admissible in evidence in any private civil action; but the Commissioner may use the Confidential Information in the furtherance of any regulatory or legal action brought against the company by the Commissioner. (2) Neither the Commissioner nor any person who receives Confidential Information while acting under the authority of the Commissioner is permitted or required to testify in any private civil action concerning any Confidential Information. (3) The Commissioner may share Confidential Information with state, federal and international regulatory agencies and with the NAIC and its affiliates and subsidiaries. The Commissioner may share Confidential Information specified in subsection (a)(1) and (4) with the Actuarial Board for Counseling and Discipline or its successor, or the American Academy of Actuaries or its successor upon request stating that the Confidential Information is required for the purpose of professional disciplinary proceedings, and with state, territorial, federal and international law enforcement officials; but the recipient shall agree to maintain the confidentiality and privileged status of such documents, materials, data and other information in the same manner and to the same extent as required for the Commissioner. (4) The Commissioner may receive documents, materials, data and other information from the NAIC and its affiliates and subsidiaries, from regulatory or law enforcement officials of other foreign or domestic jurisdictions and from the Actuarial Board for Counseling and Discipline or its successor and shall maintain as confidential or privileged any document, material, data or other information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or other information. (5) The Commissioner may enter into agreements governing sharing and use of information consistent with this section. (6) No waiver of any applicable privilege or claim of confidentiality in the Confidential Information occurs as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in paragraph (3). (7) A privilege established under the law of any state or jurisdiction which is substantially similar to the privilege established under this section is available and enforceable in any proceeding in, and in any court of this Territory. (8) In this section, regulatory agency, law enforcement agency and the NAIC include their employees, agents, consultants and contractors. (c) Notwithstanding subsection (b), any Confidential Information specified in subsection (a)(1) and (4): (1) May be subject to subpoena for the purpose of defending a proceeding brought pursuant to this subchapter seeking damages from the appointed actuary who submitted a memorandum in support of an opinion required under section 535 or a principle-based valuation report provided under section 547(b)(3) by reason of an action required by this subchapter or by regulations promulgated hereunder; (2) May otherwise be released by the Commissioner with the written consent of the company; and (3) Once any portion of a memorandum in support of an opinion submitted under section 535 or a principle-based valuation report developed under section 547(b)(3) is cited by the company in its marketing or is publicly volunteered to or before a governmental agency other than a state insurance department or is released by the company to the news media, all portions of such memorandum or report are no longer confidential.
 (a) Domestic insurers shall invest in or loan their funds on the security of, and shall hold as assets, only eligible investments as prescribed in this chapter. (b) Any particular investment of a domestic insurer held by it on the effective date of this title and which was a legal investment immediately prior thereto, shall be deemed a legal investment hereunder. (c) The eligibility of an investment shall be determined as of the date of its making or acquisition. (d) Except as to section 583 of this title, this chapter applies only to domestic insurers.
 (a) No security or other investment shall be eligible for purchase or acquisition under this chapter unless it is interest bearing or interest accruing or dividend or income paying, is not then in default in any respect, and the insurer is entitled to receive for its exclusive account and benefit the interest or income accruing thereon, except, that it may acquire real property for occupancy by the insurer for home and branch office purposes. (b) No security shall be eligible for purchase at a price above its market value. (c) No provision of this chapter shall prohibit the acquisition by an insurer of other or additional securities or property if received as a dividend or as a lawful distribution of assets, or if acquired pursuant to a lawful and bona fide agreement of bulk reinsurance or consolidation. Any investments so acquired through bulk reinsurance or consolidation, which are not otherwise eligible under this chapter, shall be disposed of pursuant to section 579 of this title if personal property or securities, or pursuant to section 567 of this title if real property.
 An insurer shall not, except with the consent of the Commissioner, have at any time any combination of investments in or loans upon the security of the obligations, property, and securities of any one person, institution, or municipal corporation aggregating an amount exceeding 4 percent of the insurer's assets. This section shall not apply to investments in, or loans upon the security of general obligations of the Government of the United States or of any jurisdiction of the United States, nor to investments in foreign securities pursuant to subsection (a) of section 568 of this title nor include policy loans made pursuant to section 569 of this title.
 An insurer may invest any of its funds in bonds or other evidences of debt, not in default as to principal or interest, which are valid and legally authorized obligations issued, assumed or guaranteed by the United States or by any jurisdiction of the United States or by any political subdivision thereof or by any civil division or public instrumentality of one or more of the foregoing, if, by statutory or other legal requirements applicable thereto, such obligations are payable, as to both principal and interest, (1) from taxes levied or required to be levied upon all taxable property or all taxable income within the jurisdiction of such governmental unit or, (2) from adequate special revenues pledged or otherwise appropriated or by law required to be provided for the purpose of such payment, but not including any obligation payable solely out of special assessments on properties benefited by local improvements unless adequate security is evidenced by the ratio of assessment to the value of the property or the obligation is additionally secured by an adequate guaranty fund required by law.
 An insurer may invest any of its funds in obligations other than those eligible for investment under section 561 of this title if they are issued, assumed, or guaranteed by any solvent institution created or existing under the laws of the United States or of any jurisdiction of the United States, and are qualified under any of the following: (1) obligations which are secured by adequate collateral security and bear fixed interest if during each of any three, including the last two, of the five fiscal years next preceding the date of acquisition by the insurer, the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges, as defined in section 556 of this title, have been not less than one and one-fourth times the total of its fixed charges for such year. In determining the adequacy of collateral security, not more than one-third of the total value of such required collateral shall consist of stock other than stock meeting the requirements of section 558 of this title; (2) fixed interest bearing obligations, other than those described in paragraph (1) of this section, if the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by the insurer have averaged per year not less than one and one-half times its average annual fixed charges applicable to such period and if during the last year of such period such net earnings have been not less than one and one-half times its fixed charges for such year; or (3) adjustment, income or other contingent interest obligations if the net earnings of the issuing, assuming or guaranteeing institution available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by the insurer have averaged per year not less than one and one-half times the sum of its average annual fixed charges and its average annual maximum contingent interest applicable to such period and if during each of the last two years of such period such net earnings have not been less than one and one-half times the sum of its fixed charges and maximum contingent interest for such year.
 (a) Certain terms used are defined for the purposes of this chapter as follows: Fixed charges includes interest on funded and unfunded debt, amortization of debt discount, and rentals for leased properties. Institution includes corporations, joint stock associations, and business trusts. Net earnings available for fixed charges means net income after deducting operating and maintenance expense, taxes other than federal and state income taxes, depreciation and depletion, but excluding extraordinary nonrecurring items of income or expense appearing in the regular financial statements of such institution. Obligation includes bonds, debentures, notes or other evidences of indebtedness. (b) If net earnings are determined in reliance upon consolidated earnings statements of parent and subsidiary institutions, such net earnings shall be determined after provision for income taxes of subsidiaries and after proper allowance for minority stock interest, if any, and the required coverage of fixed charges shall be computed on a basis including fixed charges and preferred dividends of subsidiaries other than those payable by such subsidiaries to the parent corporation or to any other of such subsidiaries, except that if the minority common stock interest in the subsidiary corporation is substantial, the fixed charges and preferred dividends may be apportioned in accordance with regulations prescribed by the Commissioner.
 In applying the earnings test set forth in section 556 of this title to any such institution, whether or not in legal existence during the whole of such five years next preceding the date of investment by the insurer, which has at any time during the five-year period acquired substantially all of the assets of any other institution or institutions by purchase, merger, consolidation or otherwise, or has been reorganized pursuant to bankruptcy law, the earnings of the predecessor or constituent institutions, or of the institution so reorganized, available for interest and dividends for such portion of the five-year period as may have preceded such acquisition, or such reorganization, may be included in the earnings of such issuing, assuming or guaranteeing institution for such portion of such period as may be determined in accordance with adjusted or pro forma consolidated earnings statements covering such portion of such period and giving effect to all stock or shares outstanding, and all fixed charges existing, immediately after such acquisition, or such reorganization.
 (a) An insurer may invest any of its funds, in an aggregate amount not exceeding 10 percent of its assets, if a life insurer, or not exceeding 15 percent of such assets if other than a life insurer, in preferred or guaranteed stocks or shares, other than common stocks, of solvent institutions existing under the laws of the United States or of any jurisdiction of the United States if all of the prior obligations and prior preferred stocks, if any, of such institution at the date of acquisition by the insurer are eligible as investments under this chapter; and if qualified under either of the following: (1) Preferred stocks or shares shall be deemed qualified if both these requirements are met: (A) the net earnings of the institution available for its fixed charges for a period of five fiscal years next preceding the date of acquisition by the insurer must have averaged per year not less than one and one-half times the sum of its average annual fixed charges, if any, its average annual maximum contingent interest, if any, and its average annual preferred dividend requirements applicable to such period; and (B) during each of the last two years of such period such net earnings must have been not less than one and one-half times the sum of its fixed charges, contingent interest and preferred dividend requirements for such year. The term preferred dividend requirements shall be deemed to mean cumulative or noncumulative dividends whether paid or not. (2) Guaranteed stocks or shares shall be deemed qualified if the assuming or guaranteeing institution meets the requirements of paragraph (1) of section 555 of this title, construed so as to include as a fixed charge the amount of guaranteed dividends of such issue or the rental covering the guarantee of such dividends. (b) An insurer shall not invest in or loan upon any preferred stock having voting rights, of any one institution, in excess of such proportion of the total issued and outstanding preferred stock of such institution having voting rights, as would, when added to any common shares of such institution, directly or indirectly held by it, exceed 15 percent of all outstanding shares of such institution having voting rights, nor an amount in excess of the limit provided by section 553 of this title. This limitation shall not apply to such shares of a corporation which is the subsidiary of an insurer, and which corporation is engaged exclusively in a kind of business properly incidental to the insurance business of the insurer.
 An insurer may invest any of its funds, in an aggregate amount not exceeding 2 percent of its assets, in certificates, notes, or other obligations issued by trustees or receivers of institutions, existing under the laws of the United States or of any jurisdiction of the United States, which, or the assets of which, are being administered under the direction of any court having jurisdiction, if such obligation is adequately secured as to principal and interest.
 An insurer may invest any of its funds, in an aggregate amount not exceeding 10 percent of its assets, in equipment trust obligations or certificates which are adequately secured, or in other adequately secured instruments evidencing an interest in transportation equipment wholly or in part within the United States and the right to receive determined portions of rental, purchase or other fixed obligatory payments for the use or purchase of such transportation equipment.
 An insurer may invest any of its funds in: (1) bonds or evidences of debt which are secured by first mortgages or deeds of trust on improved unencumbered real property located in the United States; (2) chattel mortgages in connection therewith pursuant to section 565 of this title; (3) the equity of the seller of any such property in the contract for a deed, covering the entire balance due on a bona fide sale of such property, in amount not to exceed $10,000 or the amount permissible under section 553 of this title, whichever is greater, in any one such contract for deed, nor in any amount in excess of the following percentages of the actual sale price or fair value of the property, whichever is the smaller: (A) if a dwelling primarily designed for single family occupancy and occupied by the purchaser under such contract, 75 percent; (B) in all other cases, 66 23 percent; (4) purchase money mortgages or like securities received by it upon the sale or exchange of real property acquired pursuant to section 566 of this title; (5) bonds or notes secured by mortgage or trust deed guaranteed or insured by the Federal Housing Administration under the terms of the Act of Congress of the United States, June 27, 1934, entitled the National Housing Act, as amended; and (6) bonds or notes secured by mortgage or trust deed guaranteed or insured as to principal in whole or in part by the Administrator of Veterans' Affairs pursuant to the provisions of Title III of the Act of Congress of the United States, June 22, 1944, entitled the Servicemen's Readjustment Act of 1944, as amended.
 (a) No mortgage loan or investment therein upon any one parcel of real property shall exceed in amount at the time of acquisition: (1) seventy-five percent of the fair value of the property if the property is a dwelling house primarily intended for occupancy by one family and the loan is required to be amortized within not more than 25 years by payment of installments thereon at regular intervals not less frequent than every three months; or (2) sixty-six and two-thirds percent of the fair value of the property in all other cases. (b) The extent to which a mortgage loan made under paragraph (5) or (6) of section 561 of this title is guaranteed or insured by the Federal Housing Administration or guaranteed by the Administrator of Veterans' Affairs may be deducted before application of the limitations contained in subsection (a) of this section.
 (a) Real property shall not be deemed to be encumbered within the meaning of section 561 of this title by reason of the existence of: (1) instruments reserving mineral, oil, timber or similar rights, rights of way, sewer rights, or rights in walls; (2) liens for taxes or assessments not delinquent, or liens not delinquent for community recreational facilities, or for the maintenance of community facilities, or for service and maintenance of water rights; (3) building restrictions or other restrictive covenants; (4) encroachments, if such encroachments are taken into consideration in determining the fair value of the property; (5) a lease under which rents or profits are reserved to the owner if in any event the security for the loan or investment is a first lien upon the real property; or (6) with respect to loans secured by mortgage, deed of trust, or other collateral guaranteed or insured in full or in part by the Government of the United States, such encumbrances as are allowed as exceptions in title by the administrator or administration of the division of such government so guaranteeing or insuring. (b) if under any of the exceptions set forth in subsection (a) of this section there is any sum owing but not due or delinquent, the total amount of such sum shall be deducted from the amount which otherwise might be loaned on the property. The value of any mineral, oil, timber or similar right reserved shall not be included in the fair value of the property.
 (a) The fair value of property shall be determined by appraisal by a competent appraiser at the time of the making or acquiring of a mortgage loan or investing in a contract for the deed thereon, except, that as to bonds or notes secured by mortgage or trust deed guaranteed or insured by the Federal Housing Administration, or guaranteed or insured as to principal in full or in part by the Administrator of Veterans' Affairs, or guaranteed or insured by the Farmers Home Administration, the valuation made by such administration or administrator shall be deemed to have been made by a competent appraiser for the purposes of this subsection. (b) Buildings and other improvements located on the mortgaged premises shall be kept insured for the benefit of the mortgagee against loss or damage from fire in an amount not less than the unpaid balance of the obligation, or the insurable value of the property, whichever is the lesser. (c) An insurer shall not make or acquire a loan or loans upon the security of any one parcel of real property in aggregate amount in excess of $25,000 or more than the amount permissible under section 553 of this title, whichever is the greater.
 (a) In connection with a mortgage loan on the security of real property designed and used primarily for residential purposes only, acquired pursuant to section 561 of this title, an insurer may loan or invest an amount not exceeding 20 percent of the amount loaned on or invested in such real property mortgage, on the security of a chattel mortgage for a term of not more than five years representing a first and prior lien, except for taxes not then delinquent, on personal property constituting durable equipment owned by the mortgagor and kept and used in the mortgaged premises. (b) The term durable equipment shall include only mechanical refrigerators, mechanical laundering machines, heating and cooking stoves and ranges, mechanical kitchen aids, vacuum cleaners, and fire extinguishing devices; and in addition in the case of apartment houses and hotels, room furniture and furnishings. (c) Prior to acquisition of a chattel mortgage, items of property to be included shall be separately appraised by a competent appraiser and the fair market value thereof determined. No such chattel mortgage loan shall exceed in amount the same ratio of loan to the value of the property as is applicable to the companion loan on the real property.
 (a) An insurer may own and invest or have invested in its home office and branch office buildings any of its funds in aggregate amount not to exceed 10 percent of its assets unless approved by the Commissioner, or if a mutual insurer not to exceed 10 percent of its assets nor such amount as would reduce its surplus, exclusive of such investment, below $50,000 unless approved by the Commissioner. (b) An insurer may own real property acquired in satisfaction or on account of loans, mortgages, liens, judgments, or other debts previously owing to the insurer in the course of its business, and may invest or have invested in aggregate amount not exceeding 3 percent of its assets in other real property, and in the repair, alteration, furnishing, or improvement thereof, as follows only: (1) other real property requisite for its accommodation in the convenient transaction of its business if approved by the Commissioner; (2) real property acquired by gift or devise; (3) real property acquired in exchange for real property owned by it. If necessary in order to consummate such an exchange, the insurer may put up cash in amount not to exceed 20 percent of the fair value of its real property to be so exchanged, in addition to such property. (4) real property acquired through a lawful merger or consolidation with it of another insurer and not required for the purposes specified in subsection (a) of this section and in paragraph (1) of this subsection; and (5) upon approval of the Commissioner, in real property and equipment incident to real property, requisite or desirable for the protection or enhancement of the value of other real property owned by the insurer.
 (a) Real property acquired by an insurer pursuant to paragraph (1) of subsection (b) of section 566 of this title shall be disposed of within five years after it has ceased being necessary for the use of the insurer in the transaction of its business. Real property acquired by an insurer pursuant to such loans, mortgages, liens, judgments, or other debts, or pursuant to paragraphs (2), (3), (4), and (5) of subsection (b) of section 566 of this title shall be disposed of within five years after date of acquisition. The time for any such disposal may be extended by the Commissioner for a definite additional period or periods upon application and proof that forced sale of the property, otherwise necessary, would be against the best interests of the insurer. (b) Any such real property held by the insurer without the Commissioner's consent beyond the time permitted for its disposal shall not be carried or allowed as an asset.
 (a) An insurer authorized to transact insurance in a foreign country may invest any of its funds, in aggregate amount not exceeding its deposit and reserve obligations incurred in such country, in securities of or in such country possessing characteristics and of a quality similar to those required pursuant to this chapter for investments in the United States. (b) An insurer may invest any of its funds, in an aggregate amount not exceeding 5 percent of its assets, in addition to any amount permitted pursuant to subsection (a) of this section, in obligations of the governments of the Dominion of Canada or of Canadian provinces or municipalities, and in obligations of Canadian corporations, which have not been in default during the five years next preceding date of acquisition, and which are otherwise of equal quality to like United States public or corporate securities as prescribed in this chapter.
 A life insurer may loan to its policyholder upon the pledge of the policy as collateral security, any sum not exceeding the legal reserve maintained on the policy.
 An insurer may invest or deposit any of its funds in share or savings accounts of savings and loan associations, or in savings accounts of banks, and in any one such institution only to the extent that such an account is insured by the Federal Savings and Loan Insurance Corporation or the Federal Deposit Insurance Corporation, unless such investment or deposit is with a bank or banks approved by the Commissioner as reputable and solvent.
 (a) An insurer other than a life insurer may invest a portion of its surplus funds in an aggregate amount not exceeding 50 percent of its surplus over its capital stock and other liabilities, or 35 percent of its capital funds, whichever is greater, in the stocks of other insurers organized and existing under the laws of any jurisdiction of the United States. Indirect or proportionate interests in insurance stocks held by an insurer through any intermediate subsidiary or subsidiaries shall be included in applying the limitations provided in this subsection and in subsections (b) and (c) of this section. (b) A life insurer may invest in such insurance stocks in an aggregate amount not exceeding the smaller of the following amounts: 5 percent of its assets; or 25 percent of its surplus over its capital stock and other liabilities, or of surplus over its required minimum surplus if a mutual life insurer. (c) An insurer shall not purchase or hold as an investment more than 5 percent of the voting stocks of any one other insurer, and subject further to the investment limits of section 553 of this title. This limitation shall not apply if such other insurer is the subsidiary of, and substantially all its shares having voting powers are owned by, an insurer other than a life insurer. (d) No such insurance stock shall be eligible as an investment unless it meets the qualifications for stocks of other corporations as set forth in section 572 of this title. (e) The limitations on investment in insurance stocks set forth in this chapter shall not apply to stocks acquired under a plan for merger of the insurers which has been approved by the Commissioner or to shares received as stock dividends upon shares already owned.
 (a) After satisfying the requirements of section 576 of this title, an insurer may invest any of its funds in common shares of stock in solvent United States corporations that qualify as a sound investment, except, that as to life insurers such investments shall further not aggregate an amount in excess of 50 percent of the insurer's surplus over its minimum required surplus. (b) The insurer shall not invest in or loan upon the security of more than 10 percent of the outstanding common shares of any one such corporation, subject further to amount invested as limited by section 553 of this title. This limitation shall not apply to investment in the securities of any subsidiary corporation of the insurer which is engaged exclusively in a kind of business properly incidental to the insurance business of the insurer.
 An insurer may loan its funds upon the pledge of securities or evidences of debt eligible for investment under this chapter. As at date made, no such loan shall exceed in amount 90 percent of the market value of such collateral pledged, except that loans upon pledges of United States government bonds may be equal to the market value of the bonds pledged. The amount so loaned shall be included in the maximum percentage of funds permitted to be invested in the kinds of securities or evidences of debt pledged or permitted by section 553 of this title.
 (a) An insurer may loan or invest its funds in an aggregate amount not exceeding the lesser of the following sums: 5 percent of its assets, or 50 percent of its surplus over its capital and other liabilities, or if a mutual insurer 50 percent of its surplus over minimum required surplus, in kinds of loans or investments not otherwise specifically made eligible for investment and not specifically prohibited or made ineligible by this section or other provisions of this title. (b) No such loan or investment shall be represented by (1) any item described in section 502 of this title; (2) any loan or investment of a kind specifically made eligible under any other provision of this title; or (3) any loan, investment, or asset theretofore acquired or held by the insurer under any other category of loans or investments. (c) No one such investment or loan shall exceed the amount specified in subsection (a) of this section or one percent of the insurer's assets, whichever is the lesser. (d) The insurer shall keep a separate record of all investments acquired under this section.
 Upon advance approval of the Commissioner and in compliance with section 552 of this title, an insurer may make any investment or kind of investment or exchange of assets otherwise prohibited or not eligible under any other section of this chapter. The Commissioner's order of approval if granted shall specify whether the investment or any part thereof may be credited to required minimum capital or surplus investments, or to investment of reserves.
 (a) An insurer shall invest and keep invested its funds aggregating in amount, if a stock insurer, not less than 100 percent of its minimum required capital, or if a mutual insurer, not less than 100 percent of its required minimum surplus, in cash or investments eligible in accordance with section 554 of this title (public obligations), and in mortgage loans on real property located within this territory, pursuant to section 561 of this title. (b) In addition to the investments required by subsection (a) of this section, an insurer shall invest and keep invested its funds aggregating not less than 100 percent of its reserves required by this title in cash or premiums in course of collection or in investments eligible in accordance with the following sections of this title: 554 (public obligations), 555 (corporate obligations), 558 (preferred or guaranteed stocks), 559 (trustees' or receivers obligations), 560 (equipment trust certificates), 561 (mortgages, mortgage bonds, notes, contracts), 565 (auxiliary chattel mortgages), 566 (real property owned; home office building, etc.), 568 (foreign securities), 569 (policy loans), 570 (savings and share accounts), 573 (collateral loans), and 575 (special consent investments). (c) This section shall not apply to title insurers nor to mutual insurers on the assessment premium plan.
 An insurer shall not invest or have invested at any one time more than 65 percent of its assets in investments in real estate, real estate contracts, and notes, bonds and other evidences of debt, secured by mortgage on real estate, as described in sections 561 and 566 of this title. Any insurer which, on the effective date of this title, has in excess of 65 percent of its assets so invested shall not make any further such investments while such excess exists.
 In addition to investments excluded under other provisions of this title, an insurer shall not, except with the Commissioner's approval in advance, invest in or loan its funds upon the security of, or hold (1) issued shares of its own capital stock, except for the purpose of mutualization in accordance with section 358 of this title; (2) securities issued by any corporation, except as specifically authorized by this chapter directly or by exception, if a majority of the outstanding stock of such corporation, or a majority of its stock having voting powers, is or will be after such acquisition, directly or indirectly owned by the insurer, or by any combination of the insurer and the insurer's directors, officers, parent corporation, and subsidiaries; (3) securities issued by any corporation if a majority of its stock having voting power is owned directly or indirectly by or for the benefit of any one or more of the insurer's officers and directors; (4) any investment or loan ineligible under the provisions of section 553 of this title; (5) securities issued by any insolvent corporation; or (6) any investment or security which is found by the Commissioner to be designed to evade any prohibition of this title.
 No insurer shall participate in the underwriting of the marketing of securities in advance of their issuance or enter into any transaction for such underwriting for the account of such insurer jointly with any other person; or enter into any agreement to withhold from sale any of its property, or to repurchase any property sold by it.
 (a) Any personal property or securities lawfully acquired by an insurer, which it could not otherwise have invested in or loaned its funds upon at the time of such acquisition, shall be disposed of by the insurer within one year from date of acquisition, unless within such period the security has attained to the standard for eligibility. The Commissioner, upon application and proof that forced sale of any such property or security would be against the best interests of the insurer, may extend the disposal period for an additional reasonable time. (b) While any such property or security remains so ineligible it shall not be allowed as an asset of the insurer. (c) Any ineligible property or security unlawfully acquired by an insurer shall be disposed of forthwith, and for failure so to do within 30 days after order of the Commissioner requiring such disposal, the Commissioner may revoke or suspend the insurer's certificate of authority. (d) For the purposes of subsection (c) of this section, an investment otherwise eligible shall not be deemed ineligible for the reason that it is in excess of the amount permitted under this chapter to be invested in the category of investments to which it belongs; and any such excess investment shall be disposed of within the time prescribed in subsection (a) of this section.
 Except for policy loans of a life insurer, no domestic insurer shall sell or exchange any investment or loan unless authorized or approved by its board of directors or by a committee charged by the board of directors or the bylaws with the duty of making such investment, loan, sale or exchange. The minutes of any such committee shall be recorded and reports thereof shall be submitted to the board of directors for approval or disapproval.
 (a) As to each investment or loan of the funds of a domestic insurer a written record in permanent form showing the authorization thereof shall be made and signed by an officer of the insurer or by the chairman of such committee authorizing the investment or loan. (b) As to each such investment or loan the insurer's records shall contain: (1) In the case of loans: the name of the borrower; the location and legal description of the property; a physical description, and the appraised value of the security; the amount of the loan, rate of interest and terms of repayment. (2) In the case of securities: the name of the obligor; a description of the security and the record of earnings; the amount invested, the rate of interest or dividend, the maturity and yield based upon the purchase price. (3) In the case of real estate: the location and legal description of the property; a physical description and the appraised value; the purchase price and terms. (4) In the case of all investments: (A) the amount of expenses and commissions if any incurred on account of any investment or loan and by whom and to whom payable if not covered by contracts with mortgage loan representatives or correspondents which are part of the insurer's records; and (B) the name of any officer or director of the insurer having any direct, indirect, or contingent interest in the securities or loan representing the investment, or in the assets of the person in whose behalf the investment or loan is made, and the nature of such interest.
 The investments of a foreign or alien insurer shall be as permitted by the laws of its domicile but shall be of a quality substantially as high as those required under this chapter for similar funds of like domestic insurers.
 (a) The Commissioner may establish by regulation such reasonable filing fees, initial and renewal application licensing fees, examination fees, and other administrative fees necessary for the implementation, administration and enforcement of all programs under the jurisdiction of the Commissioner. (b) All fees and penalties collected pursuant to this section shall be deposited into the Virgin Islands Insurance Guaranty Fund established at 33 V.I.C.  3061.
 Each insurer now and hereafter doing business in the Virgin Islands must file with the Commissioner on or before March 1st in each year a statement of all insurance business written or contracted for, by the insurer making such statement, in the Virgin Islands during the year ending December 31st next preceding, setting forth: (1) the amounts of premiums received or contracted for; (2) the amounts of premiums received as returned premiums; (3) the amounts paid policyholders as returned premiums; (4) the amounts paid policyholders as dividends; (5) the amounts of insurance reinsured in companies, naming them, not authorized to do business in the Virgin Islands and the amount of premiums paid therefor; and (6) the amount of reinsurance accepted from admitted companies and the premiums received for such reinsurance on risks located in the Virgin Islands, with the names of the companies so reinsuring.
 (a) Commissioner as used in this section means the Commissioner of Insurance. (b) Each insurer shall, on or before the first day of February, May, August and November of each year, pay to the Office of the Commissioner of Insurance a tax of five percent (5%) on the quarterly gross receipts premiums on all types of insurance, except for annuities, transacted in the Virgin Islands or covering risks resident, located or to be performed in the Virgin Islands, less return premiums relating thereto and less reinsurance premiums on such business received from insurance companies authorized to do business in the Virgin Islands. (c) The tax imposed under this section shall be in lieu of any gross receipts taxes that would otherwise be levied on the insurer. (d) Taxes collected under subsection (b) of this section, other than taxes collected with respect to contracts of insurance regulated under chapter 18 of this title, shall be disposed of as follows: (1) One-half of such taxes shall be designated as a special fund for the Commissioner of Insurance to administer the Division of Insurance, but not to exceed an annual amount of $3,000,000. All monies allocated to the special fund of the Commissioner of Insurance shall remain available until expended. (2) The remainder of taxes collected shall be deposited into the Insurance Guaranty Fund (the Fund), and when the funds exceed the amount required to fund the Insurance Guaranty Fund as specified in Title 33, chapter 111, section 3061, the Commissioner of Insurance shall deposit such excess into the General Fund. (3) [Repealed.] (4) [Repealed.] (e) All premiums taxes paid with respect to contracts of insurance regulated under chapter 18 of this title shall be deposited in the Special Fund for the Commissioner of Insurance provided under subsection (d), paragraph (2)(A) of this section.
 Contracts for health and/or life insurance procured by the Government of the Virgin Islands pursuant to the provisions of Title 3, Chapter 25, Subchapter VIII, Virgin Islands Code, shall be exempt from the payment of premium tax requirements as provided in section 603 of this chapter.
 An insurer failing to file the statements and information required and to pay the taxes specified in this chapter, on the dates set forth herein, shall be assessed a penalty of $1,000 or 10% of the taxes due, whichever is greater, plus interest at the rate of 12% per annum, and shall be prohibited from doing any business in the Virgin Islands until such taxes and penalties are paid: Provided, That, if the insurer's failure to file the requisite statements and pay the tax, or any underpayment related thereto, is due to (1) negligence or (2) the intentional disregard of the law, the Commissioner may, in the case of negligence, reduce the penalty to $250 or 5% of the taxes due, whichever is greater, or, in the case of the intentional disregard of the law, increase the penalty to $5,000 or 15% of the taxes due, whichever is greater.
 As used in this chapter  (a) Accountant or independent certified public accountant means an independent certified public accountant or accounting firm in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which public accountant or firm is licensed to practice; for Canadian and British companies, the term means a Canadian-chartered or British-chartered accountant; for companies domiciled in all other countries it means an independent qualified accountant certified or chartered in the companys country of domicile. (b) Affiliate of, or person affiliated with means a specific person, a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified. (c) Audit committee means a committee or equivalent body established by the board of directors of an entity for the purpose of overseeing the accounting and financial reporting processes of an insurer or group of insurers, the internal audit function of an insurer or group of insurers, if applicable, and external audits of financial statements of the insurer or group of insurers. The audit committee of any entity that controls a group of insurers is considered the audit committee for one or more of these controlled insurers solely for the purposes of this chapter at the election of the controlling person. If an audit committee is not designated by the insurer, the insurers entire board of directors constitutes the audit committee. (d) Audited financial report includes those items specified in section 625. (e) Division means the Division of Banking, Insurance and Financial Regulation. (f) Indemnification means an agreement of indemnity or a release from liability where the intent or effect is to shift or limit in any manner the potential liability of the person or firm for failure to adhere to applicable auditing or professional standards, whether or not resulting in part from knowing of other misrepresentations made by the insurer or its representatives. (g) Independent board member has the same meaning as described in section 634, subsection (d). (h) Insurer means a licensed insurer as defined in chapter 1, section 4 of this title. (i) Group of insurers means those licensed insurers included in the reporting requirements of the Virgin Islands Insurance Holding Company System Regulatory Act, or a set of insurers as identified by management, for the purpose of assessing the effectiveness of Internal control over financial reporting. (j) Internal audit function means a person or persons that provide independent, objective and reasonable assurance designed to add value and improve an organizations operations and accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the effectiveness of risk management, control and governance processes. (k) Internal control over financial reporting means a process effected by an entitys board of directors, management and other personnel designed to provide reasonable assurance regarding the reliability of the financial statements with respect to the items specified in section 625(b)(2) through (b)(7), and the policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of the financial statements, with respect to the items specified in section 625(b)(2) through (b)(7), and that receipts and expenditures are being made only in accordance with authorizations of management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of assets that could have a material effect on the financial statements with respect to the items specified in section 625(b)(2) through (b)(7). (l) SEC means the United States Securities and Exchange Commission. (m) Section 404 means section 404 of the Sarbanes-Oxley Act of 2002 and the SECs rules and regulations promulgated thereunder. (n) Section 404 Report means managements report on internal control over financial reporting as defined by the SEC and the related attestation report of the independent certified public accountant. (o) SOX Compliant Entity means an entity that either is required to be compliant with, or voluntarily is compliant with, all of the following provisions of the Sarbanes-Oxley Act of 2002: (i) the preapproval requirements of Section 201 (Section 10A(i) of the Securities Exchange Act of 1934); (ii) the audit committee independence requirements of Section 301 (Section 10A(m)(3) of the Securities Exchange Act of 1934); and (iii) the internal control over financial reporting requirements of Section 404 (Item 308 of SEC Regulation S-K).
 (a) All insurers shall have an annual audit by an independent certified public accountant and shall file an audited financial report with the Commissioner on or before June 1 for the year ended December 31 immediately preceding. The Commissioner may require an insurer to file an audited financial report earlier than June 1 with 90 days advance notice to the insurer. (b) Extensions of the June 1 filing date may be granted by the Commissioner for 30-day periods upon a showing by the insurer and its independent certified public accountant of the reasons for requesting an extension and determination by the Commissioner of good cause for an extension. The request for extension must be submitted in writing not later than 10 days before the due date in sufficient detail to permit the Commissioner to make an informed decision with respect to the requested extension. (c) If an extension is granted in accordance with subsection (b), a similar extension of 30 days is granted to the filing of Managements Report of Internal Control over Financial Reporting. (d) Every insurer required to file an annual audited financial report pursuant to the requirements of this chapter shall designate a group of individuals as constituting its audit committee. The audit committee of an entity that controls an insurer is considered to be the insurers audit committee for purposes of this chapter at the election of the controlling person.
 (a) Every insurer is subject to the requirements of this chapter. Insurers having direct premiums written in this Territory of less than $1,000,000 in any calendar year and less than 1,000 policyholders or certificate holders of direct written policies nationwide at the end of the calendar year are exempt from these requirements for the year, unless the Commissioner makes a specific finding that compliance is necessary for the Commissioner to carry out statutory responsibilities, but insurers having assumed premiums pursuant to contracts or treaties of reinsurance of $1,000,000 or more are not exempt from the requirements. (b) The Commissioner shall suspend or revoke the certificate of authority of any insurer who fails to timely file its audited annual report unless an extension is requested and granted in accordance with section 622.
 (a) Foreign insurers filing the audited financial report in another state, pursuant to that states requirement for filing of audited financial reports, which has been found by the Commissioner to be substantially similar to the requirements of this chapter, are exempt from sections 622 through 633 if: (1) A copy of the audited financial report, Communication of Internal Control Related Matters Noted in an Audit, and the Accountants Letter of Qualifications that are filed with the other state are filed with the Commissioner in accordance with the filing dates specified in required in sections 622, and 631-632, respectively. Canadian insurers may submit accountants reports as filed with the Office of the Superintendent of Financial Institutions, Canada. (2) A copy of any Notification of Adverse Financial Condition Report filed with the other state is filed with the Commissioner within the time specified in section 630. (b) Foreign insurers required to file the Managements Report on Internal Control over Financial Reporting in another state are exempt from filing the report in this Territory provided the other state has substantially similar reporting requirements and the report is filed with the commissioner of the other state within the time specified. (c) The requirements of this chapter do not prohibit, preclude or in any way limit the Commissioner of Insurance from ordering or conducting or performing examinations of insurers under the rules and regulations and practices and procedures of the Virgin Islands Office of the Lieutenant Governor, Division of Banking, Insurance and Financial Regulation.
 (a) The annual audited financial report must state the financial position of the insurer as of the end of the most recent calendar year and the results of its operations, cash flows and changes in capital and surplus for the year then ended in conformity with statutory accounting practices prescribed, or otherwise permitted, by the department of insurance of the state/territory of domicile. (b) The annual audited financial report must include the following: (1) Report of independent certified public accountant; (2) Balance sheet reporting admitted assets, liabilities, capital and surplus; (3) Statement of operations: (4) Statement of cash flow; (5) Statement of changes in capital and surplus; (6) Notes to financial statements that, are required by the appropriate NAIC Annual Statement Instructions and the NAIC Accounting Practices and Procedures Manual and must include a reconciliation of differences, if any, between the audited statutory financial statements and the annual statement filed pursuant to section 222 of this title, with a written description of the nature of these differences; and (7) The financial statements included in the audited financial report must be prepared in a form and using language and groupings substantially the same as the relevant sections of the annual statement of the insurer filed with the Commissioner, and the financial statement must be comparative, presenting the amounts as of December 31 of the current year and the amounts as of the immediately preceding December 31. In the discretion of the Commissioner, the comparative data may be omitted in the first year in which an insurer is required to file an audited financial report.
 (a) Each insurer required by this chapter to file an annual audited financial report must, no later than 60 days after becoming subject to the requirement, register with the Commissioner in writing the name and address of the independent certified public accountant or accounting firm retained to conduct the annual audit set forth in this chapter. Insurers not retaining an independent certified public accountant on the effective date of this chapter shall register the name and address of their retained independent certified public accountant not less than six months before the date when the first audited financial report is to be filed. (b) The insurer shall obtain a letter from the accountant, and file a copy with the Commissioner stating that the accountant is aware of the provisions of the insurance code and the regulations of the insurance department of the state of domicile that relate to accounting and financial matters and affirming that the accountant will express an opinion on the financial statements in terms of their conformity to the statutory accounting practices prescribed or otherwise permitted by that insurance department, specifying such exceptions as the accountant may believe appropriate. (c) If an accountant who was the accountant for the immediately preceding filed audited financial report is dismissed or resigns, the insurer has five business days to notify the Commissioner of this event. The insurer shall also furnish the Commissioner with a separate letter no later than 10 business days of the above notification stating whether in the 24 months preceding the event if there were any disagreements with the former accountant on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure; which disagreements, if not resolved to the satisfaction of the former accountant, would have caused the former accountant to make reference to the subject matter of the disagreement in connection with the former accountants opinion. The disagreements required to be reported in response to this subsection include both those resolved to the former accountants satisfaction and those not resolved to the former accountants satisfaction. Disagreements contemplated by this subsection are those that occur at the decision-making level, i.e., between personnel of the insurer responsible for presentation of its financial statements and personnel of the accounting firm responsible for rendering its report. The insurer shall also in writing request the former accountant to furnish a letter addressed to the insurer stating whether the accountant agrees with the statements contained in the insurers letter and, if not, stating the reasons for which the former accountant does not agree; and the insurer shall furnish the responsive letter from the former accountant to the Commissioner together with its own.
 (a) The Commissioner may not recognize a person or firm as a qualified independent certified public accountant if the person or firm: is not in good standing with the American Institute of Certified Public Accountants (AICPA) and in all states in which the accountant is licensed to practice, or, for a Canadian or British company, that is not a chartered accountant; or has either directly or indirectly entered into an agreement of indemnity or release from liability with respect to the audit of the insurer. (b) Except as otherwise provided in this section, the Commissioner shall recognize an independent certified public accountant as qualified as long as the independent certified public accountant conforms to the standards of the independent certified public accountants profession, as contained in the Code of Professional Ethics of the AICPA and Rules and Regulations and Code of Ethics and Rules of Professional Conduct of the Virgin Islands Board of Accountancy, or similar code. (c) A qualified independent certified public accountant may contract with an insurer to have disputes relating to an audit resolved by mediation or arbitration. However, if a delinquency proceeding is commenced against the insurer under chapter 51 of this title, the mediation or arbitration provisions operate at the option of the statutory successor. (d)  (1) The lead or coordinating audit partner having primary responsibility for the audit may not act in that capacity for more than five consecutive years. The person is disqualified from acting in that or a similar capacity for the same company or its insurance subsidiaries or affiliates for a period of five consecutive years. An insurer may make application to the Commissioner for relief from the rotation requirement under this subsection on the basis of unusual circumstances. This application must be made at least 30 days before the end of the calendar year. The Commissioner may consider the following factors in determining if the relief should be granted: (A) Number of partners, expertise of the partners or the number of insurance clients in the currently registered firm; (B) Premium volume of the insurer; or (C) Number of jurisdictions in which the insurer transacts business. (2) The insurer shall file, with its annual statement filing, the approval for relief from paragraph (1) with the states that it is licensed in or doing business in and with the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC. (e) The Commissioner may neither recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by, a natural person who has: (1) been convicted of fraud, bribery, a violation of the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. Sections 1961 to 1968, or any dishonest conduct or practices under federal, territorial or state law; (2) been found to have violated the insurance laws of this territory with respect to any previous reports submitted under this chapter; or (3) demonstrated a pattern or practice of failing to detect or disclose material information in previous reports filed under this chapter. (f) The Commissioner of Insurance may hold a hearing, in accordance with chapter 7 of this title, to determine whether an independent certified public accountant is qualified and, considering the evidence presented, may rule that the accountant is not qualified for purposes of expressing the accountants opinion on the financial statements in the annual audited financial report made pursuant to this chapter and require the insurer to replace the accountant with another whose relationship with the insurer is qualified within the meaning of this chapter. (g)  (1) The Commissioner may not recognize as a qualified independent certified public accountant, nor accept an annual audited financial report, prepared in whole or in part by an accountant who provides to an insurer, contemporaneously with the audit, the following non-audit services: (A) Bookkeeping or other services related to the accounting records or financial statements of the insurer; (B) Financial information systems design and implementation; (C) Appraisal or valuation services, fairness opinions, or contribution-in-kind reports; (D) Actuarially-oriented advisory services involving the determination of amounts recorded in the financial statements; (E) Internal audit outsourcing services; (F) Management functions or human resources; (G) Broker or dealer, investment adviser, or investment banking services; (H) Legal services or expert services unrelated to the audit; or (I) Any other services that the Commissioner determines, by regulation, are impermissible. (2) The accountant may assist an insurer in understanding the methods. assumptions and inputs used in the determination of amounts recorded in the financial statement only if it is reasonable to conclude that the services provided will not be subject to audit procedures during an audit of the insurers financial statements. An accountants actuary may also issue an actuarial opinion or certification on an insurers reserves if the following conditions have been met: (A) Neither the accountant nor the accountants actuary has performed any management functions or made any management decisions; (B) The insurer has competent personnel or engages a third party actuary to estimate the reserves for which management takes responsibility; and (C) The accountants actuary tests the reasonableness of the reserves after the insurers management has determined the amount of the reserves. (3) Accountants may not function in the role of management, cannot audit their own work, and cannot serve in an advocacy role for the insurer. (h) Insurers having direct written and assumed premiums of less than $100,000,000 in any calendar year may request an exemption from subsection (g)(1). The insurer shall file with the Commissioner a written statement discussing the reasons why the insurer should be exempt from these provisions. If the Commissioner finds, upon review of this statement, that compliance with this section would constitute a financial or organizational hardship upon the insurer, an exemption may be granted. (i) A qualified independent certified public accountant who performs the audit may engage in other non-audit services, including tax services, that are not described in subsection (g)(1) or that do not conflict with subsection (g)(3), only if the audit committee is in compliance with the SECs Final Rule No. 33-8183, Strengthening the Commissions Requirements Regarding Auditor Independence, adopted January 28, 2003 and any amendments thereto and if the audit committee approves the activity in advance, in accordance with subsection (j). (j) All auditing services and non-audit services provided to an insurer by the qualified independent certified public accountant of the insurer must be preapproved by the audit committee. The preapproval requirement is waived with respect to non-audit services if the insurer is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity or: (1) The aggregate amount of all such non-audit services provided to the insurer constitutes not more than five percent of the total amount of fees paid by the insurer to its qualified independent certified public accountant during the fiscal year in which the non-audit services are provided: (2) The services were not recognized by the insurer at the time of the engagement to be non-audit services; and (3) The services are promptly brought to the attention of the audit committee and approved prior to the completion of the audit by the audit committee or by one or more members of the audit committee who are the members of the board of directors to whom authority to grant such approvals has been delegated by the audit committee. (k) The audit committee may delegate to one or more designated members of the audit committee the authority to grant the preapprovals required by subsection (j). The decisions of any member to whom this authority is delegated must be presented to the full audit committee at each of its scheduled meetings. (l)  (1) The Commissioner may not recognize an independent certified public accountant as qualified for a particular insurer if a member of the board, president, chief executive officer, controller, chief financial officer, chief accounting officer, or any person serving in an equivalent position for that insurer, was employed by the independent certified public accountant and participated in the audit of that insurer during the one-year period preceding the date that the most current statutory opinion is due. This subsection applies only to partners and senior managers involved in the audit. An insurer may make application to the Commissioner for relief from the above requirement on the basis of unusual circumstances. (2) The insurer shall file, with its annual statement filing, the approval for relief from paragraph (I) of this subsection with the states that it is licensed in or doing business in and the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC.
 An insurer may make a written application to the Commissioner for approval to file audited consolidated or combined financial statements in lieu of separate annual audited financial statements if the insurer is part of a group of insurance companies that utilizes a pooling or 100 percent reinsurance agreement that affects the solvency and integrity of the insurers reserves and the insurer cedes all of its direct and assumed business to the pool. In such cases, a columnar consolidating or combining worksheet must be filed with the report, as follows: (1) Amounts shown on the consolidated or combined audited financial report must be shown on the worksheet; (2) Amounts for each insurer subject to this subsection must be stated separately; (3) Noninsurance operations may be shown on the worksheet on a combined or individual basis; (4) Explanations of consolidating and eliminating entries must be included; and (5) A reconciliation must be included of any differences between the amounts shown in the individual insurer columns of the worksheet and comparable amounts shown on the annual statements of the insurers.
 Financial statements furnished pursuant to section 625 must be examined by the independent certified public accountant. The audit of the insurers financial statements must be conducted in accordance with generally accepted auditing standards. In accordance with AU Section 319 of the Professional Standards of the AICPA, Consideration of Internal Control in a Financial Statement Audit, the independent certified public accountant shall obtain an understanding of internal control sufficient to plan the audit. To the extent required by AU 319, for those insurers required to file a Managements Report of Internal Control over Financial Reporting pursuant to section 2637, the independent certified public accountant shall consider as that term is defined in Statement on Auditing Standards (SAS) No. 102, Defining Professional Requirements in Statements on Auditing Standards or its replacement the most recently available report in planning and performing the audit of the statutory financial statements. Consideration must be given to the procedures illustrated in the Financial Condition Examiners Handbook promulgated by the National Association of Insurance Commissioners as the independent certified public accountant considers necessary.
 (a) The insurer required to furnish the annual audited financial report shall require the independent certified public accountant to report, in writing, within five business days to the board of directors or its audit committee any determination by the independent certified public accountant that the insurer has materially misstated its financial condition as reported to the Commissioner as of the balance sheet date currently under audit or that the insurer does not meet the minimum capital and surplus requirement of the Virgin Islands insurance code as of that date. An insurer that has received a report pursuant to this paragraph shall forward a copy of the report to the Commissioner not later than five business days of receipt of the report and shall provide the independent certified public accountant making the report with evidence of the report being furnished to the Commissioner. If the independent certified public accountant fails to receive the evidence within the required five business day period, the independent certified public accountant shall furnish to the Commissioner a copy of its report within the next five business days. (b) No independent certified public accountant is liable in any manner to any person for any statement made in connection with the above paragraph if the statement is made in good faith in compliance with subsection (a). (c) If the accountant, subsequent to the date of the audited financial report filed pursuant to this section, becomes aware of facts that may have affected the accountants report, the accountant is required to take action as prescribed in Volume 1, Section AU 561 of the Professional Standards of the AICPA.
 (a) In addition to the annual audited financial report, each insurer shall furnish the Commissioner with a written communication as to any unremediated material weaknesses in its internal control over financial reporting noted during the audit. The communication must be prepared by the accountant not later than 60 days after the filing of the annual audited financial report, and must contain a description of any unremediated material weakness, as the term material weakness is defined by Statement on Auditing Standard 60, Communication of Internal Control Related Matters Noted in an Audit, or its replacement, as of December 31 immediately preceding, so as to coincide with the audited financial report discussed in section 622(a) in the insurers internal control over financial reporting noted by the accountant during the course of their audit of the financial statements. If no unremediated material weaknesses were noted, the communication must so state. (b) The insurer is required to provide a description of remedial actions taken or proposed to correct unremediated material weaknesses, if the actions are not described in the accountants communication.
 The accountant shall furnish the insurer in connection with, and for inclusion in, the filing of the annual audited financial report, a letter stating: (1) That the accountant is independent with respect to the insurer and conforms to the standards of the profession as contained in the Code of Professional Ethics and pronouncements of the AICPA and the Rules of Professional Conduct of the Virgin Islands Board of Accountancy, or similar code; (2) A general description of the accountants background and experience, and a description of the insurer auditing experience of the staff assigned to the engagement and whether each is an independent certified public accountant. Nothing within this Chapter shall be construed as prohibiting the accountant from utilizing such staff as the accountant considers appropriate where use is consistent with the standards prescribed by generally accepted auditing standards; (3) That the accountant understands the annual audited financial report and the accountants opinion thereon will be filed in compliance with this Chapter and that the Commissioner will be relying on this information in the monitoring and regulation of the financial position of insurers; (4) That the accountant consents to the requirements of section 633 of this Chapter and that the accountant consents and agrees to make available for review by the Commissioner, or the Commissioners designee or appointed agent, the workpapers, as defined in section 633; (5) A representation that the accountant is properly licensed by an appropriate state licensing authority and is a member in good standing in the AICPA; and (6) A representation that the accountant is in compliance with the requirements of section 627.
 (a) Work papers are the records kept by the independent certified public accountant of the procedures followed, the tests performed, the information obtained, and the conclusions reached pertinent to the accountants audit of the financial statements of an insurer. Work papers, accordingly, may include audit planning documentation, work programs, analyses, memoranda, letters of confirmation and representation, abstracts of company documents and schedules or commentaries prepared or obtained by the independent certified public accountant in the course of their audit of the financial statements of an insurer and which support the accountants opinion. (b) Every insurer required to file an audited financial report pursuant to this Chapter, shall require the accountant to make available for review by examiners of the Division, all work papers prepared in the conduct of the accountants audit and any communications related to the audit between the accountant and the insurer, at the offices of the insurer, at the Division or at any other reasonable place designated by the Commissioner. The insurer shall require that the accountant retain the audit work papers and communications until the Division has filed a report on examination covering the period of the audit but no longer than seven years from the date of the audit report. (c) In the conduct of a review under subsection (b), photocopies of pertinent audit work papers may be made and retained by the Division. The reviews by the Divisions examiners are considered investigations and all working papers and communications obtained during the course of the investigations must be afforded the same confidentiality as other examination work papers generated by the Division.
 This section does not apply to foreign or alien insurers licensed in this Territory or an insurer that is a SOX Compliant Entity or a direct or indirect wholly-owned subsidiary of a SOX Compliant Entity. (a) The audit committee is directly responsible for the appointment, compensation and oversight of the work of any accountant including resolution of disagreements between management and the accountant regarding financial reporting for the purpose of preparing or issuing the audited financial report or related work pursuant to this Chapter. Each accountant shall report directly to the audit committee. (b) The audit committee of an insurer or group of insurers is responsible for overseeing the insurers Internal audit function and granting the person or persons performing the function suitable authority and resources to fulfill their responsibilities if required by section 635. (c) Each member of the audit committee is a member of the board of directors of the insurer or a member of the board of directors of an entity elected pursuant to section (f) and section 621(c). (d) To be considered independent for purposes of this subsection, a member of the audit committee may not, other than in the members capacity as a member of the audit committee, the board of directors, or any other board committee, accept any consulting, advisory or other compensatory fee from the entity or be an affiliated person of the entity or any subsidiary thereof. However, if the law requires board participation by otherwise non-independent members, that law prevails and the members may participate in the audit committee and be designated as independent for audit committee purposes, unless they are an officer or employee of the insurer or one of its affiliates. (e) If a member of the audit committee ceases to be independent for reasons outside the members reasonable control, that person, with notice by the responsible entity to the state or territory, may remain an audit committee member of the responsible entity until the earlier of the next annual meeting of the responsible entity or one year from the occurrence of the event that caused the member to be no longer independent. In determining independence, the Commissioner shall consider utilizing guidance provided in the SECs Final Rule No. 33-8220, Standards Relating to Listed Company Audit Committees adopted April 9, 2003 and any amendments thereto. (f) To exercise the election of the controlling person to designate the audit committee for purposes of this Chapter, the ultimate controlling person shall provide written notice to the commissioners of the affected insurers. Notification must be made timely prior to the issuance of the statutory audit report and include a description of the basis for the election. The election can be changed through notice to the Commissioner by the insurer, which must include a description of the basis for the change. The election remains in effect for perpetuity, until rescinded. (g)  (1) The audit committee shall require the accountant that performs for an insurer any audit required by this Chapter to timely report to the audit committee in accordance with the requirements of SAS 61, Communication with Audit Committees, or its replacement, including: (A) All significant accounting policies and material permitted practices; (B) All material alternative treatments of financial information within statutory accounting principles that have been discussed with management officials of the insurer, ramifications of the use of the alternative disclosures and treatments, and the treatment preferred by the accountant; and (C) Other material written communications between the accountant and the management of the insurer, such as any management letter or schedule of unadjusted differences. (2) If an insurer is a member of an insurance holding company system, the reports required by paragraph (1) may be provided to the audit committee on an aggregate basis for insurers in the holding company system, provided that any substantial differences among insurers in the system are identified to the audit committee. (h) The proportion of independent audit committee members must meet or exceed the following criteria:Prior Calendar Year Direct Written and Assumed Premiums $0 - $300,000,000Over $300,000,000 - $500,000,000Over $500,000,000No minimum requirements. See also Note A and B.Majority (50% or more) of members shall be independent. See also Note A and B.Supermajority of members (75% or more) shall be independent. See also Note A. Note A: The Commissioner has authority afforded by law to require the entitys board to enact improvements to the independence of the audit committee membership if the insurer is in a RBC action level event, meets one or more of the standards of an insurer deemed to be in hazardous financial condition, or otherwise exhibits qualities of a troubled insurer. Note B: All insurers with less than $500,000,000 in prior year direct written and assumed premiums are encouraged to structure their audit committees with at least a supermajority of independent audit committee members. Note C: Prior calendar year direct written and assumed premiums must be the combined total of direct premiums and assumed premiums from non-affiliates for the reporting entities. (i) An insurer with direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000 may make application to the Commissioner for a waiver from the requirements of this section based upon hardship. The insurer shall file, with its annual statement filing, the approval for relief from the requirements of this section with the states that it is licensed in or doing business in and the NAIC. If the nondomestic state accepts electronic filing with the NAIC, the insurer shall file the approval in an electronic format acceptable to the NAIC. (j) The company officer responsible for financial reporting under section 637 may not be a member of the audit committee. (k) The independent committee members shall meet periodically, with no management present, with the independent certified public accountant to discuss the strengths and weaknesses of the insurers or group of insurers internal control environments.
 (a) Exemption  An insurer is exempt from the requirements of this subsection if: (1) The insurer has annual direct written and unaffiliated assumed premium, including international direct and assumed premium but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $500,000,000; or (2) If the insurer is a member of a group of insurers that has annual direct written and unaffiliated assumed premium including international direct and assumed premium, but excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, less than $1,000,000,000. (b) Function  The insurer or group of insurers shall establish an internal audit function that provides independent, objective and reasonable assurance to the audit committee and the insurers management regarding the, insurers governance, risk management and internal controls. This assurance is provided by performing general and specific audits, reviews and tests and by employing other techniques deemed necessary to protect assets, evaluate control effectiveness and efficiency, and evaluate compliance with policies and regulations. (c) Independence  To ensure that internal auditors remain objective, the internal audit function must be organizationally independent. Specifically, the internal audit function will not defer ultimate judgment on audit matters to others and shall appoint an individual to head the internal audit function who will have direct and unrestricted access to the board of directors. Organizational independence does not preclude dual-reporting relationships. (d) Reporting  The head of the internal audit function shall report to the audit committee regularly, but no less than annually, on the periodic audit plan, factors that may adversely impact the internal audit functions independence or effectiveness, material findings from completed audits and the appropriateness of corrective actions implemented by management as a result of audit findings. (e) Additional Requirements  If an insurer is a member of an insurance holding company system or included in a group of insurers, the insurer may satisfy the internal audit function requirements set forth in this section at the ultimate controlling parent level, an intermediate holding company level or the individual legal entity level.
 (a) No director or officer of an insurer shall, directly or indirectly: (1) Make or cause to be made a materially false or misleading statement to an accountant in connection with any audit, review or communication required under this chapter; or (2) Omit to state, or cause another person to omit to state, any material fact necessary in order to make statements made, in light of the circumstances under which the statements were made, not misleading to an accountant in connection with any audit, review or communication required under this chapter. (b) No officer or director of an insurer, or any other person acting under the direction thereof, shall directly or indirectly take any action to coerce, manipulate, mislead or fraudulently influence any accountant engaged in the performance of an audit pursuant to this chapter if that person knew or should have known that the action, if successful, could result in rendering the insurers financial statements materially misleading. (c) For purposes of subsection (b), actions that, if successful, could result in rendering the insurers financial statements materially misleading include, but are not limited to, actions taken at any time with respect to the professional engagement period to coerce, manipulate, mislead or fraudulently influence an accountant: (1) To issue or reissue a report on an insurers financial statements that is not warranted in the circumstances due to material violations of statutory accounting principles prescribed by the Commissioner, generally accepted auditing standards, or other professional or regulatory standards; (2) Not to perform an audit, review or other procedures required by generally accepted auditing standards or other professional standards; (3) Not to withdraw an issued report; or (4) Not to communicate matters to an insurers audit committee.
 (a) Every insurer required to file an audited financial report pursuant to this chapter that has annual direct written and assumed premiums, excluding premiums reinsured with the Federal Crop Insurance Corporation and Federal Flood Program, of $500,000,000 or more, shall prepare a report of the insurers or group of insurers internal control over financial reporting. The report shall be filed with the Commissioner along with the Communication of Internal Control Related Matters Noted in an Audit described under section 631. Managements Report of Internal Control over Financial Reporting must be prepared as of December 31 immediately preceding. (b) Notwithstanding the premium threshold in subsection(a), the Commissioner may require an insurer to file Managements Report of Internal Control over Financial Reporting if the insurer is in any RBC level event or meets any one or more of the standards of an insurer deemed to be in hazardous financial condition as defined in chapter 21, section 519 of this title. (c) An insurer or a group of insurers that is: (1) directly subject to Section 404; (2) part of a holding company system whose parent is directly subject to Section 404; (3) not directly subject to Section 404 but is a SOX Compliant Entity; or (4) a member of a holding company system whose parent is not directly subject to Section 404 but is a SOX Compliant Entity; may file its or its parents Section 404 Report and an addendum in satisfaction of this section requirement provided that those internal controls of the insurer or group of insurers having a material impact on the preparation of the insurers or group of insurers audited statutory financial statements (those items included in section 625(b)(2) through (b)(7)) were included in the scope of the Section 404 Report. The addendum must be a positive statement by management that there are no material processes with respect to the preparation of the insurers or group of insurers audited statutory financial statements (those items included in section 625(b)(2) through (b)(7)) excluded from the Section 404 Report. If there are internal controls of the insurer or group of insurers that have a material impact on the preparation of the insurers or group of insurers audited statutory financial statements and those internal controls were not included in the scope of the Section 404 Report, the insurer or group of insurers may either file (i) a report under this section, or (ii) the Section 404 Report and a report under this section for those internal controls that have a material impact on the preparation of the insurers or group of insurers audited statutory financial statements not covered by the Section 404 Report. (d) Managements Report of Internal Control over Financial Reporting must include: (1) A statement that management is responsible for establishing and maintaining adequate internal control over financial reporting; (2) A statement that management has established internal control over financial reporting and an assertion, to the best of managements knowledge and belief, after diligent inquiry, as to whether its internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles; (3) A statement that briefly describes the approach or processes by which management evaluated the effectiveness of its internal control over financial reporting; (4) A statement that briefly describes the scope of work that is included and whether any internal controls were excluded; (5) Disclosure of any unremediated material weaknesses in the internal control over financial reporting identified by management as of December 31 immediately preceding. Management is not permitted to conclude that the internal control over financial reporting is effective to provide reasonable assurance regarding the reliability of financial statements in accordance with statutory accounting principles if there is one or more unremediated material weaknesses in its internal control over financial reporting; (6) A statement regarding the inherent limitations of internal control systems; and (7) Signatures of the chief executive officer and the chief financial officer, or equivalent position or title. (e) Management shall document and make available upon financial condition examination the basis upon which its assertions, required in subsection (d), are made. Management may base its assertions, in part, upon its review, monitoring and testing of internal controls undertaken in the normal course of its activities. (1) Management shall have discretion as to the nature of the internal control framework used, and the nature and extent of documentation, in order to make its assertion in a cost effective manner and, as such, may include assembly of or reference to existing documentation. (2) Managements Report on Internal Control over Financial Reporting, required by subsection (a), and any documentation provided in support thereof during the course of a financial condition examination, shall be kept confidential by the Division.
 (a) Upon written application of any insurer, the Commissioner may grant an exemption from compliance with any and all provisions of this Chapter if the Commissioner finds, upon review of the application, that compliance with this Chapter would constitute a financial or organizational hardship upon the insurer. An exemption may be granted at any time and from time to time for a specified period or periods. Not more than 10 days after a denial of an insurers written request for an exemption from this Chapter, the insurer may request in writing a hearing on its application for an exemption. The hearing shall be held in accordance with the regulations of the Division pertaining to administrative hearing procedures. (b) Domestic insurers retaining a certified public accountant who qualifies as independent on the effective date of this Chapter shall comply with this section for the end of the year following the effective date of this Chapter, and each year thereafter unless the Commissioner permits otherwise. (c) Domestic insurers not retaining a certified public accountant who qualifies as independent on the effective date of this Chapter may meet the following schedule for compliance unless the Commissioner permits otherwise: (1) As of the end of the year following the effective date of this Chapter, file with the Commissioner an audited financial report (2) For each year thereafter, insurers shall file with the Commissioner all reports and communication required by this section. (d) Foreign insurers shall comply with this Chapter for the end of the year following the effective date of this Chapter, and each year thereafter, unless the Commissioner permits otherwise. (e) The requirements of section 627(d)(1) apply to audits occurring January 1 of the second calendar year following the effective date of this Chapter. (f) The requirements of section 634 are effective January 1 of the second calendar year following the effective date of this Chapter. An insurer or group of insurers that is not required to have independent audit committee members or only a majority of independent audit committee members, as opposed to a supermajority, because the total written and assumed premium is below the threshold and subsequently becomes subject to one of the independence requirements due to changes in premium shall have one year following the year the threshold is exceeded, but not earlier than January 1 of the second calendar year following the enactment of this Chapter, to comply with the independence requirements. Likewise, an insurer that becomes subject to one of the independence requirements as a result of a business combination shall have 1 calendar year following the date of acquisition or combination to comply with the independence requirements. (g) The requirements of section 637 and other modified sections, except for section 634 covered above, are effective beginning with the reporting period ending December 31 of the second calendar year following the effective date of this Chapter, and each year thereafter. An insurer or group of insurers that is not required to file a report because the total written premium is below the threshold and subsequently becomes subject to the reporting requirements has two years following the year the threshold is exceeded to file a report. Likewise, an insurer acquired in a business combination has two calendar years following the date of acquisition or combination to comply with the reporting requirements. (h) The requirements of section 635 are effective January 1 of the second calendar year following the effective date of this Chapter. If an insurer or group of insurers that is exempt from the section 635 requirements no longer qualifies for that exemption, it has one year after the year the threshold is exceeded to comply with the requirements of this Chapter.
 (a) Canadian, British and all other alien insurers shall file each year an audited financial report with the Commissioner on or before September 30 for the year ended December 31 immediately preceding. The Commissioner may waive any provision of this section which may be inapplicable to alien insurers. (b) The annual audited financial report must be defined as the annual statement of total business on the form filed by such companies with their supervision authority duly audited by an independent chartered accountant, chartered or certified. (c) For such insurers, the letter required in section 626(b) must state that the accountant is aware of the requirements relating to the annual audited financial report filed with the Commissioner pursuant to section 622 and shall affirm that the opinion expressed is in conformity with those requirements.
 If any section or portion of a section of this Law or its applicability to any person or circumstance is held invalid by a court, the remainder of this Chapter or the applicability of the provision to other persons or circumstances are not be affected.
 (a) An insurer not thereunto authorized by the Commissioner shall not solicit insurance business in this territory, nor transact insurance business in this territory except as provided in this chapter. (b) No person may, in this territory, represent an unauthorized insurer or solicit, negotiate, or effectuate any insurance with or place any risks with any such unauthorized insurer, or in any way or manner aid any such insurer in effecting any insurance, except as specifically provided in this chapter. This provision does not prohibit an adjuster or attorney at law from representing such an unauthorized insurer from time to time in this territory in his professional capacity. (c) Each violation of this section shall constitute a separate offense punishable by a fine of not less than $50 nor more than $1,000.
 (a) No contract of insurance placed by a surplus line broker shall be binding upon the insured and no premium charged therefor shall be due and payable until the surplus line broker shall have notified the insured in writing, a copy of which shall be maintained by the broker with records of the contract and available for examination, that: (1) the insurer with which the broker has placed the insurance is not licensed in this Territory and is not subject to its supervision; and (2) in the event of the insolvency of the unauthorized insurer, losses will not be paid by the Virgin Islands Guaranty Fund. (b) A contract of insurance effectuated by an unauthorized insurer in violation of the provisions of this title shall be voidable except at the instance of the insurer.
 (a) If certain insurance coverages cannot be procured from authorized insurers, such coverages, hereinafter designated as surplus lines, may be procured from unauthorized insurers subject to the following conditions: (1) the insurance must be procured through a licensed surplus line broker; and (2) the insurance must not be procurable, after diligent effort has been made to do so from among a majority of the insurers authorized to transact that kind of insurance in this territory and placing the insurance in an unauthorized insurer must not be for the purpose of securing a lower premium rate than would be accepted by any authorized insurer. (b) Within 30 days after the procuring of any surplus line insurance, the surplus line broker must execute and shall file with the Commissioner: (1) a written report, which shall be kept confidential and which shall include the following: (A) the name and address of the insured; (B) the identity of the insurer or insurers; (C) a description of the subject and location of the risk; (D) the amount of premium charged for the insurance; and (E) such other pertinent information as the Commissioner may reasonably require; and (2) an affidavit setting forth the facts referred to in subsection (a), paragraph (2), of this section. Such affidavit shall be open to public inspection.
 Every insurance contract procured and delivered as a surplus line coverage pursuant to this chapter shall have stamped upon it and be initialed by or bear the name of the surplus line broker who procured it, the following: This contract is registered and delivered as a surplus line coverage under the Insurance Code of the Virgin Islands. It is not covered by the Guaranty Fund established pursuant to Title 33, section 3061, V.I.C.
 Insurance contracts procured as surplus line coverage from unauthorized insurers in accordance with this chapter shall be fully valid and enforceable as to all parties, and shall be given recognition in all matters and respects to the same effect as like contracts issued by authorized insurers.
 Any person deemed by the Commissioner to be competent and trustworthy and while maintaining an office at a designated location in this territory may be licensed as a surplus line broker, as follows: (1) application to the Commissioner for the license shall be made on forms furnished by the Commissioner; (2) the license fee shall be $300 for each license year during any part of which the license is in force; and (3) prior to issuance of license the applicant shall file with the Commissioner and thereafter for as long as the license remains in effect he shall keep in force a bond in favor of the Government of the Virgin Islands in the penal sum of $10,000, with authorized corporate sureties approved by the Commissioner, conditioned that he will conduct business under the license in accordance with the provisions of this chapter and that he will promptly remit the taxes provided in section 662 of this title. No such bond shall be terminated unless not less than 30 days prior written notice thereof is filed with the Commissioner.
 A licensed surplus line broker may accept and place surplus line business for any insurance agent or broker licensed in this territory for the kind of insurance involved, and may compensate such agent or broker therefor.
 (a) If pursuant to the surplus lines provisions of this chapter an insurer has assumed direct risk under a coverage and the premium therefor has been paid to the broker who placed such insurance, the insurer shall be liable to the insured for unearned premiums payable upon cancellation of the insurance, whether or not the broker is indebted to the insurer for such premium or otherwise. This provision shall not affect rights as between the insurer and the broker. (b) Each such insurer shall be deemed to have subjected itself to this section by acceptance of such direct risk.
 (a) A surplus line broker shall not place any coverage with an unauthorized insurer unless, at the same time of placement, such insurer: (1) has established satisfactory evidence of good repute and financial integrity; (2) has caused to be provided to the Commissioner, no more than six months after the close of the period reported upon, a certified copy of its current annual statement which is either: (A) filed with and approved by the regulatory authority in the domicile of the unauthorized insurer; or (B) certified by an accounting or auditing firm licensed in the jurisdiction of the insurer's domicile; and (3) has been deemed eligible for the placement of risks by the Commissioner. (b) In order to be deemed eligible by the Commissioner, the unauthorized insurer must have capital and surplus in an amount not less than $7,000,000 in the aggregate; Provided, that in order to qualify under this section, an alien insurer must maintain in the United States an irrevocable trust fund in either a national bank or a member of the Federal Reserve System, in an amount not less than $2,500,000 for the protection of all its policyholders in the United States. Such trust fund, which shall be included in any calculation of capital and surplus, shall: (1) consist of cash, securities, letters of credit, or of investments substantially the same character and quality as those which are eligible investments for the capital and statutory reserves of admitted insurers authorized to write like kinds of insurance in this Territory; and (2) have an expiration date which at no time shall be less than (5) years. (c) If at any time the Commissioner has reason to believe that an unauthorized insurer: (1) is in unsound financial condition; (2) has wilfully violated the laws of this Territory, or (3) does not make reasonably prompt payment of just losses and claims in the Virgin Islands or elsewhere, the Commissioner may declare such insurer ineligible. The Commissioner shall promptly mail notice of all such declarations to each surplus line broker. (d) For representing or aiding an unauthorized insurer in violation of this chapter, a surplus line broker shall be fined not more than $1,000 per offense, his surplus line broker's license may be revoked, his other insurance licenses may be revoked, and the broker may not again be so licensed within a period of two years thereafter.
 (a) Each licensed surplus line broker shall keep a full and true record of each surplus line contract procured by him including a copy of the daily report, if any, showing such of the following items as may be applicable: (1) amount of the insurance; (2) gross premiums charged; (3) return premium paid, if any; (4) rate of premium charged upon the several items of property; (5) effective date of the contract, and the terms thereof; (6) name and address of the insurer; (7) name and address of the insured; (8) brief general description of property insured and where located; (9) other information as may be required by the Commissioner. (b) All such records as to any particular transaction shall be kept available and open to the inspection of the Commissioner at any business time during the five years next following the date of completion of such transaction.
 (a) Each surplus line broker shall on or before the first day of March of each year file with the Commissioner a verified statement of all surplus line insurance transacted by him during the preceding calendar year. (b) The statement shall be on forms as prescribed and furnished by the Commissioner and shall show the aggregate of net premiums and additional information as required by the Commissioner.
 (a) On or before the first day of February, May, August and November of each year, each surplus line broker shall remit to the Commissioner of Insurance a tax of five percent (5%) on the quarterly premiums of surplus line insurance transacted by him on risks located in the territory: (b) If a surplus line policy covers risks or exposures only partially in this territory the tax so payable shall be computed upon the proportion of the premium which is properly allocable to the risks or exposures located in this territory. (c) All taxes collected pursuant to this section, as well as any penalty related thereto, shall be deposited into the Insurance Guaranty Fund.
 If any surplus line broker fails to file his annual statement, or fails to remit the tax provided by section 662 of this title, he shall be subject to the terms and conditions of the penalties set forth in chapter 25, section 604 of this title. The tax may be collected by distraint, or the tax and fine may be recovered by an action instituted by the Commissioner in any court of competent jurisdiction.
 (a) The Commissioner shall revoke any surplus line broker's license if the broker fails to file his annual statement or to remit the tax as required by this chapter; or if the broker fails to maintain an office in this territory, or to keep the records, or to allow the Commissioner to examine his records as required by this chapter; or for any of the causes for which a general broker's license may be revoked. (b) The Commissioner may suspend or revoke any such license whenever he deems suspension or revocation to be for the best interests of the people of this territory. (c) The procedures provided by this title for the suspension or revocation of general brokers' licenses shall be applicable to suspension or revocation of a surplus line broker's license. (d) No broker whose license has been so revoked or suspended shall again be so licensed within one year thereafter, nor until any fines or delinquent taxes owing by him have been paid.
 (a) An unauthorized insurer may be sued, upon any cause of action arising in this territory under any contract issued by it as a surplus line contract, pursuant to this chapter, in the District Court of the Virgin Islands in that judicial division in which the cause of action arose. (b) Service of legal process against the insurer may be made in any such action by service upon the Commissioner. At the time of such service the plaintiff shall pay to the Commissioner $5, taxable as costs in the action if the plaintiff shall prevail therein. The Commissioner shall forthwith mail the documents of process served, or a true copy thereof, to the person designated by the insurer in the policy for the purpose of prepaid registered mail with return receipt requested. The insurer shall have 40 days from the date of service upon the Commissioner within which to plead, answer, or otherwise defend the action. Upon service of process upon the Commissioner in accordance with this provision, the court shall be deemed to have jurisdiction in personam of the insurer.
 (a) The provisions of this chapter controlling the placing of insurance with unauthorized insurers shall not apply to reinsurance or to the following insurances when so placed by licensed agents or brokers of this territory: (1) ocean marine and foreign trade insurances; (2) insurance on subjects located, resident, or to be performed wholly outside of this territory, or on vehicles or aircraft owned and principally garaged outside this territory; and (3) insurance of aircraft owned or operated by manufacturers of aircraft, or of aircraft operated in scheduled interstate flight, or cargo of such aircraft, or against liability, other than employer's liability, arising out of the ownership, maintenance or use of such aircraft. (b) Agents and brokers so placing any such insurance with an unauthorized insurer shall keep a full and true record of each such coverage in detail as required of surplus line insurance under this chapter. The record shall be preserved for not less than five years from the effective date of the insurance and shall be kept available in this territory and open to the examination of the Commissioner. The agent or broker shall furnish to the Commissioner at his request and on forms as designated and furnished by him a report of all such coverages so placed in a designated calendar year.
 Every person for whom insurance has been placed with an unauthorized insurer pursuant to or in violation of this chapter shall, upon the Commissioner's order, produce for his examination all policies and other documents evidencing the insurance, and shall disclose to the Commissioner the amount of the gross premiums paid or agreed to be paid for the insurance. For each refusal to obey such order, such person shall be liable to a fine of not more than $500.
 The Commissioner of Finance shall accept, when made through the Commissioner of Insurance, deposits of securities or funds by insurers as follows: (1) Deposits in amount as required to be made as prerequisite to a certificate of authority to transact insurance in this territory; (2) Deposits of domestic, foreign or alien insurers in amount as required to be made by the laws of other jurisdictions as prerequisite for authority to transact insurance in such other jurisdictions; and (3) Deposits in other additional amounts permitted to be made by this title.
 Each such deposit shall be held by the Commissioner of Finance in trust for the protection of all policyholders in the United States of the insurer making it; except that deposits of alien insurers shall be so held for the security of such insurer's obligations arising out of its insurance transactions in the United States.
 All such deposits shall consist of cash funds or other assets comprised of securities which are eligible for the investment of the funds of insurers under chapter 23 of this title, and representing public obligations, corporate bonds, and mortgages on real property located in this territory.
 (a) The Commissioner of Finance shall deliver to the insurer a receipt for all funds and securities so deposited by it. (b) The Commissioner of Insurance shall keep a record in permanent form of all funds and securities so deposited. This record shall be open to the inspection of the Commissioner of Finance during all office hours. (c) The Commissioner of Finance shall keep a record in permanent form of all such funds and securities, and which record shall be open to the inspection of the Commissioner of Insurance during all office hours. The Commissioner of Finance shall state in his report to the Governor the aggregate amount of all such deposits held by him and of any transfers thereof countersigned by him.
 (a) No transfer of any funds or security so held on deposit, whether voluntary or by operation of law, shall be valid unless approved in writing by the Commissioner of Insurance and countersigned by the Commissioner of Finance or by his authorized deputy or agent. (b) A statement of each such transfer shall be entered on the records of the Commissioner of Finance and of the Commissioner of Insurance, showing the name of the insurer from whose deposit such transfer is made, the name of the transferee, the par value of securities having par value, and the asset value of other securities as at last recent valuation.
 The Commissioner of Finance may designate any solvent trust company or other solvent financial institution having trust powers domiciled in this territory, as the Commissioner of Finance's depositary to receive and hold any such deposit of a domestic or foreign insurer, or of an alien insurer for which this territory is the port of entry into the United States. Any deposit so held shall be at the expense of the insurer.
 The Government of the Virgin Islands shall be responsible for the safekeeping and return of all funds and securities deposited pursuant to this chapter with the Commissioner of Finance or in any such depositary so designated by him.
 While solvent and complying with this title an insurer shall be entitled to collect and receive interest and dividends accruing on the securities so held on deposit for its account, and from time to time exchange and substitute for any of such securities, other securities eligible for deposit and of at least equal value.
 (a) Any such required deposit shall be released in these instances only: (1) upon extinguishment of all liabilities of the insurer for the security of which the deposit is held, by reinsurance contract or otherwise; (2) if any such deposit or portion thereof is no longer required under this title; and (3) upon proper order of a court of competent jurisdiction the deposit shall be released to the receiver, conservator, rehabilitator, or liquidator of the insurer for whose account the deposit is held. (b) No such release shall be made except on application to and written order of the Commissioner of Insurance made upon proof satisfactory to him of the existence of one of such grounds therefor. The Commissioner of Insurance shall have no personal liability for any such release of any deposit or part thereof so made by him in good faith. (c) All releases of deposits or any part thereof shall be made to the person then entitled thereto upon proof of title satisfactory to the Commissioner of Insurance. (d) Deposits held on account of title insurers are subject further to the provisions of chapter 47 of this title.
 Any part of any deposit of an insurer held by the Commissioner of Finance on the effective date of this title which is in amount in excess of the deposit required or permitted to be made by such insurer under this title, shall, upon written order of the Commissioner of Insurance, be released, except, that no deposit held on account of any registered policies heretofore issued by the insurer shall be released except in accordance with the conditions under which such deposit was made.
 An insurer may deposit and maintain on deposit with the Commissioner of Finance through the Commissioner of Insurance funds and eligible securities in amount exceeding its required deposit under this title by not more than $100,000, for the purpose of absorbing fluctuations in the value of securities held in its required deposit, and to facilitate the exchange and substitution of such required securities. During the solvency of the insurer any such excess deposit or any part thereof shall be released to it upon its request, transmitted through the Commissioner of Insurance. During the insolvency of the insurer such excess deposit shall be released only as provided in section 709 of this title.
 No judgment creditor or other claimant of an insurer shall levy upon any deposit held pursuant to this chapter, or upon any part thereof.
 (a) As used throughout this title, Commissioner means the Lieutenant Governor of the Virgin Islands serving as the Commissioner of Insurance and Division means the Division of Banking, Insurance and Financial Regulation. (b) Commissioner of Insurance, the Division as established in chapter 3, section 32 of title 3 of the Virgin Islands Code, is administered by the Lieutenant Governor of the Virgin Islands as the Commissioner of Insurance.
 The Commissioner shall be bonded, with a good and sufficient surety, to be approved by the Governor, in an amount not less than $5,000 conditioned that he faithfully account for and dispose of any funds received into his custody or control as Commissioner, in accordance with applicable law. The premiums on such fidelity bond shall be paid by the Government of the Virgin Islands.
 (a) The Commissioner shall have the authority expressly conferred upon him by or reasonably implied from the provisions of this title. (b) The Commissioner shall execute his duties and shall enforce the provisions of this title. (c) The Commissioner may (1) adopt regulations and increase fees necessary to carry out the administration of this title; (2) conduct investigations to determine whether any person has violated any provision of this title; (3) conduct examinations, investigations and hearings, in addition to those specifically provided for, which are useful and proper for the efficient administration of any provision of this title; (4) employ such personnel and incur such expenses as may be necessary in the discharge of his duties as imposed by law, and shall fix the compensation of such employees; (5) issue subpoenas, examine persons, administer oaths and require production of papers and records; and (6) issue orders as authorized by or necessary to administer and carry out the purpose of this title. (d) It is unlawful during the term in office or while employed with the Division for the Commissioner, Director or any employee of the Division to be an officer, director organizer, employee of or attorney for, or otherwise be directly or indirectly interested in any insurance company or insurance business in the Territory, except as a policyholder.
 (a) The Commissioner may review any health property or casualty insurance rate to determine if there is an actuarial basis for it and if it is supported by actual and credible loss and expense statistics or, if new coverage, by reasonable projections of losses and expenses. Pre-approval of rates is not required, but the Commissioner shall be notified 30 days in advance of the effective date of any rate increase. (b) If the Commissioner determines that there is not sufficient evidence to justify a new rate, he may disallow the rate increase. The reason for the rejection must be in writing. An aggrieved carrier may demand a hearing pursuant to this chapter to reconsider the ruling and may appeal from the Commissioner's order refusing a hearing or an order on hearing to the District Court. The appeal must be taken within 30 days.
 (a) Orders of the Commissioner shall not be effective unless made in writing and signed by him or by his authority. Every order shall contain a concise statement of the grounds upon which it is based. (b) Every notice required to be given by the Commissioner to any person shall (1) be in writing in detail sufficient reasonably to inform the person of the action taken or proposed; and (2) designate the provisions of this title pursuant to which action is so taken or proposed; and (3) state the grounds for such action. (c) An order or a notice may be given by delivery to the person to be ordered or notified or by mailing it, postage prepaid, addressed to him at his residence or principal place of business as last of record in the Commissioner's office.
 (a) The Commissioner may prosecute an action in any court of competent jurisdiction to enforce any order made by him pursuant to any provision of this title. (b) If the Commissioner has cause to believe that any person has violated any penal provision of this title or of other laws relating to insurance he shall certify the facts of the violation to the Attorney General of the Virgin Islands. (c) If the Commissioner has cause to believe that any person is violating or is about to violate any provision of this title or any order of the Commissioner, he may bring an action in any court of competent jurisdiction to enjoin the person from continuing the violation or doing any action in furtherance thereof. (d) The Attorney General shall prosecute or defend all proceedings brought pursuant to the provisions of this title when requested by the Commissioner.
 (a) The Commissioner shall preserve in permanent form records of his proceedings, hearings, investigations, and examinations, and shall file such records in his office. (b) The records of the Commissioner and insurance filings in his office shall be open to public inspection, except as otherwise provided in this title. (c) Five years after conclusion of transactions to which they relate, the Commissioner may destroy any correspondence, claim files, working papers of examinations of insurers, reports of examination of insurers by insurance supervisory officials of other jurisdictions, void or obsolete filings relating to rates, license applications, cards, and records, expired bonds, records of hearings, investigations, and any similar records, documents, or memoranda now or hereafter in his possession. (d) Ten years after the year to which they relate, the Commissioner may destroy any foreign or alien insurer's annual statements, valuation reports, tax reports, or similar records or reports now or hereafter in his possession. (e) The Commissioner shall concurrently execute and file in a separate, permanent office file a certificate listing and giving a summary description of the records, files, documents, memoranda, as they are destroyed.
 (a) Any certificate or license issued by the Commissioner shall bear the seal of his office. (b) Copies of records or documents in his office certified to by the Commissioner shall be received as evidence in all courts in the same manner and to the same effect as if they were the originals. (c) When required for evidence in court, the Commissioner shall furnish his certificate as to the authority of an insurer or other licensee in this territory on any particular date, and the court shall receive the certificate in lieu of the Commissioner's testimony.
 (a) The Commissioner shall to the extent he deems useful for the proper discharge of his responsibilities under the provisions of this title (1) consult and cooperate with the public officials having supervision over insurance in the states of the United States; (2) share jointly with states in the employment of actuaries, statisticians, and other insurance technicians whose services or the products thereof are made available and are useful to the participating states and to the Commissioner. (3) share jointly with states in establishing and maintaining offices and clerical facilities for purposes useful to the participating states and to the Commissioner. (b) All arrangements made jointly with states under items (2) and (3) of subsection (a) of this section shall be in writing executed on behalf of this territory by the Commissioner. Any such arrangement, as to participation of this territory therein, shall be subject to termination by the Commissioner at any time upon reasonable notice. (c) For the purposes of this title National Association of Insurance Commissioners means that voluntary organization of the states, districts, and territories of the United States, whatever other name such organization may hereafter adopt, and in the affairs of which each of such public officials is entitled to participate subject to the constitution and bylaws of such organization.
 The Commissioner shall purchase at the expense of the government and in the manner provided by law (1) printing, books, reports, furniture, equipment, and supplies as he deems necessary to the proper discharge of his duties under this title; (2) convention form insurers' annual statement blanks, which he may purchase from any printer manufacturing the forms for the various states.
 The Commissioner shall as early each year as accurate preparation enables, transmit to the Legislature and to the Governor a report of his official transactions during the preceding calendar year, containing for the year reported (1) a list of all insurers authorized to transact insurance in this territory, showing for each insurer its name, location, date of incorporation, date of admission into this territory, capital funds and kinds of insurance transacted; (2) tabulated abstracts of the annual statements of all authorized insurers as filed with the Commissioner; (3) a statement as to insurers whose authority to transact insurance in this territory was terminated, the reasons for each termination, and if for insolvency the amount of the insurer's assets and liabilities as latest ascertained; (4) a statement of his receipts and the sum of his expenditures; and (5) his recommendations for amendment of this title, and such additional information and recommendations relative to insurance as he deems proper.
 (a) There is hereby created an Insurance Advisory Committee for the purpose of providing information and advice on all insurance matters affecting the Territory. The Committee shall be chaired by the Insurance Commissioner and shall issue reports from time to time as required by the Commissioner. (b) The Committee shall consist of seven members in addition to its Chairman. It shall have the following composition: (1) two members shall represent property and casualty insurers doing business in the Territory and shall be selected by the V.I. Insurance Guaranty Association; (2) one member shall represent mortgage lenders and shall be selected by the V.I. Bankers Association; (3) one member shall represent realtors and shall be selected by the V.I. Board of Realtors; (4) one member shall represent independent insurance agents and shall be selected by the V.I. Insurance Agents Association; and (5) two members shall be selected by the Insurance Commissioner. All members shall be appointed by the Insurance Commissioner and shall serve terms concurrent with that of the Insurance Commissioner. (c) Members of the Committee shall serve without compensation but shall be reimbursed for necessary expenses incurred in the performance of their duties from funds provided for in the operation of the Division of Insurance. The Committee shall meet at the call of the chairman.
 (a) This chapter governs the qualifications and procedures for the licensing of insurance producers and adjusters. It simplifies and organizes some statutory language to improve efficiency, permits the use of new technology and reduces costs associated with issuing and renewing insurance licenses. (b) This chapter does not apply to excess and surplus lines brokers licensed pursuant to chapter 27 of this title, except as provided in sections 763(b) and 764 of this chapter.
 As used in this chapter: (1) Adjuster means any person who, for compensation as an independent contractor or as an employee of an independent contractor, or for fee or commission, investigates or reports to the adjusters principal relative to claims arising under insurance contracts, on behalf solely of either the insurer or the insured. The term does not apply to an attorney-at-law who adjusts insurance losses from time to time incidental to the practice of the attorneys or the adjusters profession, or an adjuster of marine losses, or a salaried employee of an insurer or of a general agent. (2) Independent adjuster means a person licensed as an all-lines adjuster who is self-appointed or appointed and employed by an independent adjusting firm or other independent adjuster, and who undertakes on behalf of an insurer to ascertain and determine the amount of any claim, loss, or damage payable under an insurance contract or undertakes to effect settlement of such claim, loss, or damage. (3) Public adjuster means a person, who for money, commission, or any other thing of value, prepares, completes, or files an insurance claim form for an insured in negotiating for or effecting the settlement of a claim or claims for loss or damage covered by an insurance contract or who advertises for employment as an adjuster of such claims. (b) Agent means any person appointed by an insurer to solicit application for insurance on its behalf, and if authorized so to do, to effectuate and countersign insurance contracts except as to life or disability insurances, and to collect premiums on insurance so applied for or effectuated. (c) Bail bond insurance has the meaning used in section 459 of chapter 19 of this title. (d) Broker means any person who, on behalf of the insured, for compensation as an independent contractor, for commission, or fee, and not being an agent of the insurer, solicits, negotiates, or procures insurance or reinsurance or the renewal or continuance thereof, or in any manner aids therein, for insureds or prospective insured other than himself. (e) Business entity means a corporation, association, partnership, limited liability company, limited liability partnership, sole proprietor or any other legal entity. (f) Commissioner means the Commissioner of Insurance. (g) Home state means the District of Columbia and any state or territory of the United States in which an insurance producer maintains his principal place of residence or principal place of business and is licensed to act as an insurance producer. (h) Insurance has the same meaning as provided in section 3 of chapter 1 of this title. (i) Insurance producer means a person required to be licensed under the laws of the Virgin Islands to sell, solicit or negotiate insurance. It does not include excess and surplus line brokers licensed under chapter 27 of this title or adjusters as defined in this section. (j) Insurer has the meaning as provided in section 4 of chapter 1 of this title. (k) License means a document issued by the Commissioner authorizing a person to act as an insurance producer for the lines of authority specified in the document. The license itself does not create any authority, actual, apparent or inherent, in the holder to represent or commit to an insurer. (l) Limited lines credit insurance includes life, credit disability, credit property, credit unemployment, involuntary unemployment, mortgage life, mortgage guaranty, mortgage disability, automobile protection gap insurance, and any other form of insurance offered in connection with an extension of credit that is limited to partially or wholly extinguishing that credit obligation that the Commissioner determines should be designated a form of limited line credit insurance. (m) Limited lines insurance means those lines of insurance defined in section 759(a)(7)-(12) of this chapter or any other line of insurance that the Commissioner considers necessary to recognize for the purposes of complying with section 763(g) of this chapter. (n) Limited lines producer means a person authorized by the Commissioner to sell, solicit or negotiate limited lines insurance. (o) Managing General Agent means an individual, firm or business entity that manages all or part of the insurance business of an insurer, including the management of a separate division, department or underwriting office; and acts as an agent for such insurer whether known as a managing general agent, manager or other similar term, who, with or without the authority, either separately or together with affiliates, produces, directly or indirectly, and underwrites an amount of gross direct written premium equal to or more than five percent of the policyholder surplus as reported in the last annual statement of the insurer in any one quarter or year together with the following activity related to the business produced, adjusts or pays claims in excess of $10,000 per claim or negotiates reinsurance on behalf of the insurer. (p) NAIC means National Association of Insurance Commissioners. (q) Negotiate means the act of conferring directly with or offering advice directly to a purchaser or prospective purchaser of a particular contract of insurance concerning any of the substantive benefits, terms or conditions of the contract, if the person engaged in that act either sells insurance or obtains insurance from insurers for purchasers. (r) Person means an individual or a business entity. (s) Policyholders surplus means assets in excess of the liabilities of a company or net income above any monies indebted to legal obligation. (t) Sell means to exchange a contract of insurance by any means, for money or its equivalent, on behalf of an insurance company. (u) Solicit means attempting to sell insurance or asking or urging a person to apply for a particular kind of insurance from a particular company. (v) Solicitor means an individual authorized by an agent or broker or insurance producer to solicit applications for insurance as a representative of such agent or broker and to collect premiums in connection wherewith. An individual employed by, and devoting full time to clerical work with incidental taking of insurance applications and receiving premiums in the office of the agent or broker is not deemed to be solicitor if the individuals compensation is not related to the volume of such applications, insurances, or premiums. (w) Terminate means the cancellation of the relationship between an insurance producer and the insurer or between a solicitor and an agent or broker or the termination of an insurance producers authority to transact insurance. (x) Title insurance agent means a person licensed under the laws of the Virgin Islands and appointed by an authorized title insurance company to sell, solicit, or negotiate insurance on behalf of the title insurance company. (y) Uniform Application means the current version of the NAIC Uniform Application for resident and nonresident producer licensing. (z) Uniform Business Entity Application means the current version of the NAIC Uniform Business Entity Application for resident and nonresident business entities.
 (a) It is unlawful for a person to perform any act as an insurance producer in the Virgin Islands unless then licensed in the Virgin Islands. (b) It is unlawful for a person to sell, solicit or negotiate insurance in the Virgin Islands for any class or classes of insurance unless the person is licensed for that line of authority in accordance with this chapter. (c) It is unlawful for a person to act as or hold himself out as an adjuster in the Virgin Islands unless licensed by the Commissioner or otherwise authorized to act as an adjuster under this chapter.
 (a) For the purpose of section 752, an act is committed in the Virgin Islands if it is committed, in whole or in part, in the Virgin Islands, or affects persons or property within the Virgin Islands and relates to or involves an insurance contract, health care services contract, or health maintenance agreement. (b) If a person violates provisions of section 752, the Commissioner may: (1) issue and enforce a cease and desist order in accordance with sections 54 and 55 of this title; or (2) suspend or revoke a license; or (3) both issue cease and desist order and suspend or revoke the license. (c) Any person violating this section may be fined up to $10,000 or imprisonment for not more than one year, or both, for each instance of violation, in addition to any other penalty or forfeiture provided by law. Notwithstanding any other provision of this title, the penalties and fines provided in this chapter for violation of this chapter control, unless specifically provided otherwise. (d) Upon failure to pay a civil penalty when due, the Attorney General may bring a civil action on behalf of the Commissioner to recover the unpaid penalty. (e) The Commissioner may suspend or revoke the license of an insurance producer or adjuster or issue a cease and desist order, or may do both, if, after notice and opportunity for hearing, the Commissioner finds that an insurance producer or adjuster: (1) is using such methods or practices in the conduct of its business so as to render its further transaction of business in the Virgin Islands hazardous or injurious to insured persons or the public; (2) has failed to pay any judgment rendered against it in the territory within 60 days after the judgment has become final; (3) has, in the transaction of business under its license, used fraudulent, coercive or dishonest practices, or has demonstrated untrustworthiness or financial irresponsibility; or is not of good personal and business reputation; (4) has obtained or attempted to obtain a license through misrepresentation or fraud; (5) has violated any lawful rule or order of the Commissioner or any provision of the insurance laws of the Virgin Islands; (6) has refused to be examined or to produce its accounts, records and files for examination, or has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to an examination, when required by the Commissioner; (7) has failed to appear without reasonable cause or excuse in response to a subpoena, examination warrant or any other order lawfully issued by the Commissioner; (8) has misappropriated or converted to its own use, or improperly withheld, money required to be held in a fiduciary capacity; (9) has intentionally made a material misstatement on its application for a license; (10) has been, within the past three years, convicted of, or has entered a plea of guilty or nolo contendere to a felony without regard to whether adjudication was withheld, unless the person demonstrates to the Commissioner sufficient rehabilitation to warrant the public trust; (11) has had a license suspended or revoked or its application denied in any of the 50 states or territories of the United States; or (12) has performed any other action the Commissioner determines is a violation of the laws and regulations of the Virgin Islands.
 (a) Nothing in this chapter may be construed to require an insurer to obtain an insurance producer license. In this section, the term insurer does not include an insurers officers, directors, employees, subsidiaries or affiliates. (b) A license as an insurance producer is not required for the following types of activities or circumstances: (1) An officer, director, or employee of an insurer or of an insurance producer, if the officer, director or employee does not receive any commission on policies written or sold to insure risks residing, located or to be performed in the Virgin Islands; and (A) The officer, director, or employees activities are executive, administrative, managerial, clerical, or a combination of these and are only indirectly related to the sale, solicitation, or negotiation of insurance; or (B) The officer, director, or employees function relates to underwriting, loss control, inspection or the processing, adjusting, investigating or settling of a claim on a contract of insurance; or (C) The officer, director, or employee is acting in the capacity of an agent or agency supervisor assisting insurance producers where the persons activities are limited to providing technical advice and assistance to licensed insurance producers and do not include the sale, solicitation or negotiation of insurance. (2) A person who secures and furnishes information for the purpose of group life insurance, group property and casualty insurance, group annuities, group or blanket accident and health insurance; or for the purpose of enrolling individuals under plans; issuing certificates under plans or otherwise assisting in administering plans; or performs administrative services related to mass marketed property and casualty insurance; where no commission is paid to the person for the service; (3) An employer or association or its officers, directors, employees, or the trustees of an employee trust plan, to the extent that the employers, officers, employees, director, or trustees are engaged in the administration or operation of a program of employee benefits for the employers or associations own employees or the employees of its subsidiaries or affiliates, and the program involves the use of insurance issued by an insurer, as long as the employers, associations, officers, directors, employees or trustees are not in any manner compensated, directly or indirectly, by the company issuing the contracts; (4) Employees of insurers or an organization employed by insurers who are engaging in the inspection, rating, or classification of risks, or in the supervision of the training of insurance producers and who are not individually engaged in the sale, solicitation or negotiation of insurance; (5) A person whose activities are limited to advertising without the intent to solicit insurance through communications in printed publications or other forms of electronics mass media whose distribution is not limited to residents of the Territory, if the person does not sell, solicit or negotiate insurance that would insure risks residing, located or to be performed in this Territory; (6) A person who is not a resident of this Territory who sells, solicits or negotiates a contract of insurance for commercial property and casualty risks to an insured with risks located in more than one state insured under that contract, if the person is otherwise licensed as an insurance producer to sell, solicit or negotiate that insurance in the state or territory where the insured maintains its principal place of business and the contract of insurance insures risks located in that state or territory; or (7) A salaried full-time employee who counsels or advises his or her employer relative to the insurance interest of the employer or of the subsidiaries or business affiliates of the employer if the employee does not sell or solicit insurance or receive a commission.
 The provisions of this chapter apply to insurance producers appointed by either health care service contractors or health maintenance organizations.
 Any insurance producer soliciting, negotiating, or procuring an application for insurance or health care services in the Territory must make a good faith effort to determine whether the entity that is issuing the coverage is: (1) authorized as an admitted insurer to transact health insurance coverage in this Territory; or (2) a property or casualty insurer, conducting business as an admitted insurer or through a surplus line broker licensed under chapter 27 of this title.
 (a) Unless exempt pursuant to section 765 of this chapter, a resident individual applying for an insurance producer license or an adjuster license shall take and pass a written examination about the Territorys insurance law. This requirement does not apply to: (1) applicants for a license as a nonresident insurance producer or adjuster who are duly licensed in another state and have fulfilled qualification requirements in their state of residence and who the Commissioner determines is fully qualified and competent; (2) applicants for a producer or adjuster license covering the same kinds of insurance as a producer or adjuster license then held by them in the Virgin Islands; or (3) applicants who have maintained a continuous license in the Virgin Islands in a similarly qualified area for the five-year period immediately preceding the date of application and who the Commissioner considers to be fully qualified and competent. (b) The examination described in subsection (a) is required for the following lines of authority: (1) lines of authority set forth in section 759(a); and (2) any other line of authority designated by the Commissioner unless exempt under section 765. (c) The examination tests the knowledge of the individual concerning the lines of authority for which application is made, the duties and responsibilities of an insurance producer or adjuster and the insurance laws and regulation of the Virgin Islands. (d) Examinations must be developed and conducted under regulations prescribed by the Commissioner. (1) The Commissioner may make arrangements, including contracting with an outside testing service, for administering examinations and collecting the fee. (2) Each individual applying for an examination shall remit a non-refundable fee as prescribed by the Commissioner. (3) An individual who fails to appear for the examination as scheduled or fails to pass the examination may reapply for an examination and remit all required fees and forms before being rescheduled for another examination. (4) The Commissioner may require a waiting period of reasonable duration before giving a new examination to an applicant who has failed a previous similar examination. (e) The Commissioner shall prepare, or approve, and make available a manual specifying in general terms the subjects that may be covered in any examination for a particular license. (f) Applicants for the renewal of licenses in force on the effective date of this title, or issued thereafter are not required to take an examination except as provided in subsection (g). (g) The Commissioner may at any time require any licensed insurance producer or adjuster to take and successfully pass an examination testing competence and qualifications as a condition to the continuance or renewal of a license, if the licensee has been found in violation of this title, or has so conducted his or her affairs under the license as to cause the Commissioner reasonably to desire further evidence of qualifications.
 (a) Any corporation, firm or individual having a place of business in the Virgin Islands and acting as an agent may be licensed by the Commissioner as a resident insurance producer to solicit, accept applications, write, issue, deliver or place policies or contracts of direct insurance upon risks located within the Virgin Islands for an insurer authorized to transact business. During the time, the resident insurance producer shall conform to the agreement and requirements of this section and other provisions of the insurance law, if an application for an insurance producers license is filed with the Commissioner accompanied by a statement signed by the proposed insurance producer on a form prescribed by the Commissioner in which the insurance producer agrees not to rebate any part of the premium or commission or offer any valuable consideration as an inducement to take insurance other than that clearly expressed in the policy and that, if the insurance producer signs policies, the insurance producer will maintain an office within the Virgin Islands and keep therein at all times a complete record of all applications for and policies of insurance placed by or through the insurance producer and will not sign any policies in blank to be issued outside of his or her office. (b) An individual applying for a resident insurance producer or adjuster license shall make application to the Commissioner on the Uniform Application or any other application prescribed by the Commissioner, along with any additional information required by the Commissioner, and declare under penalty of refusal, suspension or revocation of the license that the statements made in the application are true, correct and complete to the best of the individuals knowledge and belief. As a part of, or in connection with any such application, the applicant shall furnish information concerning the applicants identity, personal history, experience, business record, purposes, and other pertinent facts as the Commissioner may reasonably require. Before approving the application, the Commissioner shall find that the individual: (1) is at least eighteen years of age or over; (2) is a bona fide resident of and actually resides in the Virgin Islands; (3) is of good reputation and character, is honest and trustworthy, and is otherwise suitable to be licensed; (4) has not committed any act that is a ground for refusal, nonrenewal or revocation as set forth in section 776; (5) has paid the nonrefundable application fee and any other fees as prescribed by the Commissioner; (6) has completed a pre-licensing course of study for the lines of authority for which the applicant has applied; (7) has successfully passed the examinations for the lines of authority for which the person has applied; (8) has submitted a national criminal records check, with fingerprint; (9) if applying for a resident insurance agent license with a variable life-variable annuity line of authority, shall include in the applicants application the applicants individual central registration depository number; (10) if applying for a resident public adjuster license, has filed the bond for $5,000 and has had experience or special education or training with reference to the handling of loss claims under insurance contracts, of sufficient duration and extent reasonably to make him competent to fulfill the responsibilities of an adjuster; (11) if applying for an insurance agent license, has on file an appointment form by an insurer; (12) if applying for an insurance solicitor license, has on file an appointment form by an agent or broker; (13) if a resident producer or adjuster, other than an agent licensed for life or disability insurances only, shall have and maintain a principal place of business in the Virgin Islands; and (14) if applying for a brokers license or for the renewal of a brokers license existing on the effective date of this title, must maintain a bond executed by an authorized corporate surety approved by the Commissioner in the amount of $10,000. The bond must be continuous in form, and total aggregate liability on the bond may be limited to the payment of $10,000. (c) A business entity acting as an adjuster must obtain an insurance adjuster license. Application must be made to the Commissioner on the Uniform Application or any other application prescribed by the Commissioner, and the individual signing the application shall declare under penalty of refusal, nonrenewal, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individuals knowledge and belief. Before approving the application, the Commissioner shall find that the business entity: (1) if a corporation, is other than an insurer; (2) is domiciled or maintains its principal place of business in the Virgin Islands; (3) is empowered to be an adjuster under a members agreement, if a firm, or by its articles of incorporation, if a corporation; (4) has paid the nonrefundable application fee and any other fees as prescribed by the Commissioner; (5) has designated a licensed adjuster responsible for the business entitys compliance with the insurance laws, rules and regulations of the Virgin Islands; (6) has not committed any act that is a ground for refusal, nonrenewal, or revocation as set forth in section 776; (7) if applying for a resident public adjuster, has filed a bond in the amount of $5,000.00; and (8) has submitted any other documents requested by the Commissioner. (d) A resident business entity acting as a title insurance agent must hold a resident insurance producer license. Application must be made to the Commissioner on the Uniform Business Entity Application or any other application prescribed by the Commissioner, and the individual submitting the application shall declare under penalty of refusal, nonrenewal, or revocation of the license that the statements made in the application are true, correct, and complete to the best of the individuals knowledge and belief. Before approving the application, the Commissioner shall find that the business entity: (1) has paid the non-refundable application fee and any other fees as prescribed by the Commissioner; (2) maintains a lawfully established place of business in the Virgin Islands; (3) is empowered to be a title insurance agent under a members agreement, if a limited liability company, or by its articles of incorporation, if a corporation; (4) is appointed as an agent by one or more authorized title insurance companies; (5) has designated a licensed title agent responsible for the business entity compliance with the insurance laws, rules and regulations in the Virgin Islands; and (6) has complied with all applicable laws, rules and regulations of the Virgin Islands. (e) The Commissioner may require any documents reasonably necessary to verify the information contained in an application and may, from time to time, require any licensed insurance producer or insurance adjuster to produce the information requested in an application for license. (f) A firm or corporation may not be licensed as an agent or broker unless each individual is designated in the license to exercise the powers and is qualified as though the agent or broker were the sole individual. (g) Each insurer that sells, solicits or negotiates any form of limited line credit insurance shall provide to each individual whose duties will include selling, soliciting or negotiating limited line credit insurance a program of instruction that must be approved by the Commissioner. (h) If the Commissioner finds that the applicant has qualified pursuant to the Commissioners requirements, and that the license fee has been paid, the Commissioner shall issue the license. Otherwise, the Commissioner may refuse to issue the license.
 (a) Unless denied licensure pursuant to section 776, persons who have met the requirements of sections 757 and 758 must be issued an insurance producer license. An insurance producer may receive qualification for a license in one or more of the following lines of authority: (1) life insurance on human lives, including benefits of endowment and annuities, and may include benefits in the event of death or dismemberment by accidental death and may include benefits for disability income; (2) accident and health or sickness- insurance for disability, sickness, bodily injury or accidental death and may include benefits for disability income; (3) property insurance for the direct or consequential loss or damage to property of every kind; (4) casualty insurance against legal liability, including that for death, injury or disability or damage to real or personal property; (5) variable life and variable annuity products insurance coverage provided under variable life insurance contracts and variable annuities; (6) personal lines property and casualty insurance coverage sold to individuals and families for primarily noncommercial purposes; (7) credit limited line credit insurance; (8) surety as used in this chapter, is as defined in section 458 of this title; (9) travel insurance coverage for personal risks incident to planned travel including but not limited to: (A) interruption or cancellation of trip or event; (B) loss of baggage or personal effects; (C) damages to accommodations or rental vehicles; and (D) sickness, accident, disability or death occurring during travel, (10) Title as used in this chapter, is as defined in chapter 19, section 460 of this title. (11) specialty lines: (A) communications equipment or services; (B) rental car; (C) self-service storage; or (12) any other line of insurance permitted under the Virgin Islands laws or regulations. (b) An insurance producer license remains effective until December 31 of each year, unless revoked, suspended or surrendered as long as the fee prescribed by the Commissioner is paid and educational requirements for resident individual insurance producers are met by the due date. (c) Any individual insurance producer or adjuster who allows the license to lapse may, within 12 months from the due date of the renewal, have the license reinstated without the necessity of passing a written examination. However, a penalty of double the unpaid renewal fee must be paid for any request for renewal received after 15 days of the due date. During this 15-day grace period, no penalty may be charged. (d) A licensed insurance producer or adjuster who is unable to comply with license renewal procedures or take an examination due to military service or some other extenuating circumstances may request a waiver and may also request a waiver of any fine or sanction imposed for failure to comply with renewal or examination requirements. (e) An insurance producers license must be in the form as the Commissioner prescribes and must set forth: (1) the name and address of the licensee, or if the licensee is required to have a place of business, the address of the place of business; (2) if the agent or broker is a firm or corporation, the name of each individual authorized to exercise the powers conferred by the license; (3) National Insurance Producer Registry number and Virgin Islands insurance license number; (4) the lines of authority the licensee is thereby licensed to handle; (5) if a solicitors license, the name and address of the agent or broker represented by the solicitor; (6) the condition under which the license is granted; (7) the date of issuance and the expiration date of license; and (8) and any other information the Commissioner considers necessary. (f) An insurance adjusters license must contain: (1) the name of the adjuster and the address of his place of business; (2) if the adjuster is a firm or corporation, the name of the individual authorized to exercise the powers conferred by the license; (3) a statement regarding license as an independent adjuster or as a public adjuster; (4) the date of issuance and the expiration date of license; and (5) any other information the Commissioner considers necessary. (g) Licensees shall inform the Commissioner by any means acceptable to the Commissioner of a change of legal name and address not more than 30 days after the change. Failure to timely inform the Commissioner of a change in legal name or address may result in a fine in accordance with section 775(b). (h) An agent shall have but one license inclusive of all kinds or combination of kinds of insurance the agent is licensed to handle, regardless of the number of insurers for whom the agent is appointed. (i) The Commissioner may contract with non-governmental entities, including the NAIC or its affiliates or subsidiaries to perform ministerial functions, including the collection of fees related to producer licensing that the Commissioner and the non-governmental entity consider appropriate. (j) The license of each producer, other than licenses for life and disability insurances or adjuster licenses must be displayed in a conspicuous place in the area of the business which is customarily open to the public.
 (a) A brokers license must be issued to cover all lines of insurance. The Commissioner may not issue a brokers license limited to a particular line of insurance. (b) A broker is not an agent or other representative of an insurer and may not bind the insurer upon any risk or with reference to any insurance contract. (c) An insurer or agent has the right to pay a broker licensed under this title, or under the laws of any other jurisdiction, and the broker has the right to receive from the insurer or agent, the customary commissions upon insurances placed with the insurer by the broker.
 A licensed agent may be licensed as a broker and be a broker as to insurers for which he is not then licensed as agent. A licensed broker may be licensed as and be an agent as to insurers appointing him as agent. The sole relationship between a broker and an insurer as to which he is licensed as an agent shall, as to transactions arising during the existence of such agency appointment, be that of insurer and agent.
 (a) The Commissioner shall issue a solicitors license only upon application by the applicant and the request of the agent or broker to be represented, upon such forms as the Commissioner shall prescribe and furnish. (b) The fee for issuance or renewal of a solicitors license must be paid by the agent or broker by whom the solicitor is employed. (c) The solicitors license must be delivered to and remain in the possession of the employing agent or broker. Upon termination of such employment, the license terminates and must be returned to the Commissioner for cancellation. (d) A solicitors license may not cover any kind of insurance for which the agent or broker by whom the applicant is employed is not then licensed. (e) A solicitor may not have power to bind an insurer upon or with reference to any risk or insurance contract, or to countersign insurance contracts. (f) Any individual while licensed as a solicitor may not be licensed as an agent or broker. (g) All business transacted by a solicitor under the solicitors license must be in the name of the agent or broker by whom the solicitor is employed and the agent or broker is responsible for all acts or omissions of the solicitor within the scope of the solicitors employment.
 (a) Unless denied licensure under section 776, a nonresident applicant shall receive a nonresident insurance producer license if the applicant: (1) is currently licensed as a resident and in good standing in the applicants home state; (2) is licensed in the applicants home state for the lines of authority requested in the Virgin Islands; (3) has submitted or transmitted to the Commissioner the application for licensure that the applicant submitted to the applicants home stale, or instead of the application license in the home state a completed Uniform Application or a form prescribed by the Commissioner; (4) has submitted the proper request for licensure and has paid the fees as prescribed by the Commissioner; (5) is of good reputation and character, is honest and trustworthy, and is otherwise suitable to be licensed; (6) home state awards non-resident insurance producer licenses to residents of the Virgin Islands on the same basis; (7) a business entity applicant has designated an insurance agent licensed as an agent in the Virgin Islands responsible for the applicants compliance with the insurance laws of the Virgin Islands; and (8) has submitted any other documents requested by the Commissioner. (b) The Commissioner may verify the insurance producers licensing status through the producer database maintained by the NAIC, its affiliates or subsidiaries. If that information is not available on the producer database, the Commissioner may require a certification letter from the applicants home state. (c) An individual or business entity seeking to renew a nonresident insurance producer license shall apply annually for a renewal of the license on or before December 31 of each year. (d) If an individual or business entity does not apply for the renewal of the individual or business entitys license on or before the license renewal date specified in subsection (c) or by the 15th day of January, the individual or business entity may submit a late renewal application along with all applicable fees required under this chapter. (e) A licensee is subject to the same obligations and duties and to the Commissioners supervision, as if a resident in the Virgin Islands, except as to the requirement for the maintenance of an office in the Virgin Islands. (f) A nonresident insurance producer who moves from a state or territory to another state or territory or a resident insurance producer who moves from the Virgin Islands to another state or territory shall file a change of address and provide certification from the new resident state not later than 30 days after the change of legal residence. A filing fee of $50.00 must be submitted. The filing fee may be changed by the Commissioner upon a 30-day notice in accordance with the regulations. No license application is required. (g) Notwithstanding any other provision of this title, a person licensed as a surplus lines producer in the licensees home state shall receive a nonresident surplus lines producer license pursuant to subsection (a). Except as to subsection (a), nothing in this section otherwise amends or supersedes any provision of chapter 27 of this title. (h) Notwithstanding any other provision of this title, a person licensed as a limited line credit insurance or other type of limited lines insurance producer in the licensees home state shall receive a nonresident limited lines insurance producer license, pursuant to subsection (a), granting the same scope of authority as granted under the license issued by the insurance producers home state. For the purpose of this subsection, limited lines insurance is any authority granted by the home state that restricts the authority of the license to less than the total authority prescribed in the associated major lines pursuant to section 759(a)(1) through (6).
 (a) The Commissioner shall waive any requirement for a nonresident license applicant with a valid license from the applicants home state except the requirements imposed by section 763 if the applicants home state awards nonresident licenses to residents of the Virgin Islands on the same basis. (b) A nonresident insurance producers satisfaction of the home states continuing education requirements for licensed insurance producers constitutes satisfaction of the Virgin Islands continuing education requirements if the non-resident insurance producers home state recognizes the satisfaction of its continuing education requirements imposed upon insurance producers from the Virgin Islands on the same basis.
 (a) An individual who applies for an insurance producer license in the Virgin Islands who was previously licensed for the same lines of authority in another state is not required to complete any pre-licensing education or examination of the Virgin Islands. This exemption is available only if the person is currently licensed in that state or if the application received not later than 90 days after the cancellation of the applicants previous license and if the prior state issues a certification that, at the time of cancellation, the applicant was in good standing in that state or the states producer database records, maintained by the NAIC, its affiliates or subsidiaries, indicate that the producer is or was licensed in good standing for the line of authority requested. (b) A person licensed as an insurance producer in another state who moves to the Virgin Islands shall make application not later than 90 days after establishing legal residence to become a resident licensee pursuant to section 758. No pre licensing education or examination is required of that person to obtain any line of authority previously held in the prior state, except where the Commissioner determines otherwise by regulation. (c) Applicants for an insurance producer license acting as a title agent shall, prior to the issuance the such license, personally take and pass to the satisfaction of the Commissioner an examination given by the Commissioner as a test of the applicants qualification and competence, but this requirement does not apply to attorneys licensed to practice law.
 (a) If a person licensed as an insurance producer under section 758 changes the persons address within the Virgin Islands, the person shall, not later than 30 days after making that change, file a change of address with the Commissioner or the Commissioners designee. (b)  (1) If a person licensed as an insurance producer under this section changes the persons home state, the person, not later than 30 days after making that change, shall file a change of address with the Commissioner and provide the Commissioner with certification from the new home state. (2) If a resident insurance producer complies with paragraph (1) of this subsection and the producer is in good standing with the Commissioner, the producers license must be changed to that of a nonresident license after paying a filing fee of $50. The Commissioner may increase the fee upon 30 days notice to the public in accordance with title 22 regulations. No license application is required. A change in the residency status of an insurance producer license does not change the license renewal date established by the initial licensure under section 759. (3) Any person violating this section is liable for a fine of not to exceed $500.
 (a) The Commissioner may license an individual concurrently as an independent adjuster and as a public adjuster. A separate application is required for each type of adjuster license. The full license fee must be paid for each license. (b) An adjuster has authority under the license only to investigate or report to the adjusters principal upon claims on behalf only of the insurers, if licensed as an independent adjuster. An adjuster licensed concurrently as an independent and a public adjuster may not represent both the insurer and the insured in the same transaction. (c) A non-resident, independent adjuster who enters the Virgin Islands for the adjustment of a single loss, or of losses arising out of a catastrophe common to all such losses, shall formally register with the Office of the Commissioner of Insurance. The Commissioner may establish and amend from time to time, a schedule of fees for such registration. (d) No Virgin Islands license is required of a nonresident independent adjuster for the adjustment in the Virgin Islands of a single loss or of losses arising out of a catastrophe common to all such losses.
 (a) Prior to the issuance of a license as a public adjuster, the applicant shall file with the Commissioner and shall maintain in force while so licensed a surety bond in favor of the people of the Virgin Islands, executed by an authorized corporate surety approved by the Commissioner, in the amount of $5,000. The bond may be continuous in form, and total aggregate liability on the bond may be limited to the payment of $5,000. The bond must be contingent on the accounting by the adjuster to any insured whose claim the adjuster is handling, for moneys or any settlement received in connection with the claim. (b) Any such bond remains in force until the surety is released from liability by the Commissioner, or until canceled by the surety. Without prejudice to any liability accrued prior to cancellation, the surety may cancel a bond upon 30 days advance notice in writing filed with the Commissioner. (c) A bond is required of any adjuster acting as a public adjuster as of the effective date of this title, or thereafter under any unexpired license issued.
 (a) Every adjuster who investigates any fire loss claim under any insurance contract covering property located in the Virgin Islands shall promptly report to the Commissioner any facts or circumstances found and from which he believes fraud has been committed or attempted. (b) Upon completing the adjustment of any fire loss requiring claim payments aggregating $500 or more, for damage to or destruction of property located in the Virgin Islands, under any policy or policies issued by an unauthorized insurer, an adjuster shall promptly report the details to the Commissioner, upon forms prescribed and furnished by the Commissioner. The report must state: (1) the names of the insurers and insured involved, (2) the amount of insurance on the property carried by each insurer, (3) the amount of the claim and the amount paid by each insurer, (4) the circumstances of the loss, and (5) other information as the Commissioner requests. (c) Upon the Commissioners request, each adjuster shall, in similar manner, report to the Commissioner relative to losses and claims investigated or adjusted, and arising under other insurance contracts issued by unauthorized insurers.
 (a)  (1) Producers are required to complete 24 credits of continuing education for each biennial compliance period. Three of the 24 credits must be in ethics. (2) The Commissioner shall by regulations establish minimum continuing education requirements for the renewal or reissuance of a license to an insurance producer. (b) The Commissioner shall require that continuing education courses are made available on a territory-wide basis to ensure that persons residing in all geographical areas of the Virgin Islands have a reasonable opportunity to attend courses in person or online. (c) The continuing education requirements must be appropriate to the license for the lines of authority specified in section 759(a) or by regulations.
 (a)  (1) No person may act as a managing general agent representing an insurer licensed in the Virgin Islands with respect to risks located in the Virgin Islands unless the person is licensed as a managing general agent pursuant to the subsection (c) or (d). (2) No person may act as a managing general agent representing an insurer organized under the laws of the Virgin Islands with respect to risks located outside the Virgin Islands unless the person is licensed as a managing general agent pursuant to subsection (c) and holds a non-resident managing general agent in that jurisdiction. (b) Every person who seeks to act as a managing general agent as described in subsection (a), shall apply to the Commissioner for a license. Except as otherwise provided in subsection (d), the application must be in writing on a form provided by the Commissioner and must be sworn or affirmed before a notary public or other person empowered to administer oaths. The application must be kept on file by the Commissioner and must include the following: (1) the name and principal business address of the applicant; (2) if the applicant is an individual, the applicants current occupation and occupations during the five-year period prior to applying for the license to act as a managing general agent; (3) a copy of the contract between the applicant and the insurer as required by and in compliance with section 77; (4) a copy of a certified resolution of the board of directors of the insurer on whose behalf the applicant will act, appointing the applicant as a managing general agent and agent of the insurer, specifying the duties the applicant is expected to perform on behalf of the insurer and the lines of insurance the applicant will manage, and authorizing the insurer to enter into a contract with the applicant; (5) a statement that the applicant submits to the jurisdiction of the Commissioner and the courts of the Virgin Islands; and (6) any other information required by the Commissioner. (c) The Commissioner shall issue to a resident of this Virgin Islands or a business entity organized under the laws of the Virgin Islands, a license to act as a managing general agent representing an insurer licensed to do business in the Virgin Islands with respect to risks located in this Virgin Islands or a license to act as a managing general agent representing an insurer organized under the laws of the Virgin Islands with respect to risks located outside the Virgin Islands, and shall renew the a license, if the Commissioner is satisfied that all of the following conditions are met: (1) The applicant is a suitable person and meets requirements in accordance with subsection (b) and intends in good faith to be a managing general agent in compliance with section 776 of this chapter. (2) The applicant is honest, trustworthy, and understands the duties and obligations of a managing general agent in compliance with section 772. (3) The applicant has filed a completed application that complies with subsection (b). (4) The applicant has paid the filing fee as prescribed by the Commissioner. (5) The applicant maintains a bond in the amount of $50,000 or 10 percent of the managing general agents total annual written premium nationwide produced by the managing general agent for the insurer, in the prior calendar year for the protection of the people of the Virgin Islands. (6) The applicant is not, and has never been, under an order of nonrenewal, suspension or revocation under section 776 or under any other law of the Virgin Islands, or any other state, relating to insurance, and is otherwise in compliance with this title and all other laws of the Virgin Islands relating to insurance. (d) If the applicant is a resident of another state or a business entity organized under the laws of another state, the applicant shall submit an application, along with the filing fee, to the Commissioner. The Commissioner may issue a manager general license if the request for licensure includes proof that the applicant is licensed and in good standing as a managing general agent in the applicants home state and a copy of the application for licensure the applicant submitted to the applicants home state or the application described in subsection (b) of this section has been submitted. If the applicants home state does not license managing general agents under provisions similar to those in this section, or if the applicants home state does not grant licenses to residents of the Virgin Islands on the same reciprocal basis, the applicant shall comply with subsections (b) and (c). (e) Unless suspended or revoked by an order of the Commissioner pursuant to section 776 and except as provided in subsection (f), any license issued or renewed pursuant to subsection (c) or (d) expires on the 31st day of December next after its issuance or renewal. A 15-day grace period without any penalty applies after the 31st day of December. However, a penalty of double the unpaid renewal fee is imposed for any renewal fee received after 15 days of the due date. (f) If the appointment of a managing general agent is terminated by the insurer, the license of the managing general agent expires on the date of the termination. (g) A license must be renewed in accordance with the renewal procedures as provided by the laws, rules and regulations of the Virgin Islands.
 (a) It is unlawful for any person acting in the capacity of a managing general agent to place business with an insurer, unless there is in force a written contract between the parties which sets forth the responsibilities of each party; specifies the separation of responsibilities, where both parties share responsibility for a particular function; and contains at a minimum the substance of the requirements and conditions. The following must be included: (1) The insurer may immediately terminate the contract for cause upon giving written notice to the managing general agent. Upon giving written notice to the managing general agent, the insurer may immediately suspend the underwriting authority of the managing general agent during the pendency of any dispute regarding the cause for termination. (2) The managing general agent shall render accounts to the insurer detailing all transactions and remit all funds due under the contract to the insurer not less than on a monthly basis. (3) The managing general agent shall hold all funds collected for the account of an insurer in a fiduciary capacity in a bank that is a member of the Federal Reserve System. The managing general agent shall use this account for all payments on behalf of the insurer. If the managing general agent represents more than one insurer, the managing general agent shall maintain separate accounts for each insurer. The managing general agent shall retain no more than three months estimated claims payments and allocated loss adjustment expenses in each account. The managing general agent may not commingle the funds in an account with the funds in any other account held by the managing general agent. (4) The managing general agent shall maintain separate records of business written by the managing general agent. The insurer shall have access to and the right to copy, in a form usable by the insurer, all accounts and records related to its business. The Commissioner shall have access to and the right to copy, in a form usable to the Commissioner, all books, bank accounts, records, contracts, and other documents, including the contract required by subsection (a) of the managing general agent. (5) The managing general agent may not assign the contract in whole or part. (6) The contract must contain appropriate underwriting guidelines, including all of the following: (A) the maximum annual premium volume; (B) the basis of the rates to be charged; (C) the types of risks that may be written; (D) maximum limits of liability; (E) applicable exclusions; (F) territorial limitations; (G) policy cancellation provisions; and (H) the maximum policy period. (7) The insurer may cancel or refuse to renew any policy of insurance subject to the applicable laws, rules, and regulations of the Virgin Islands concerning the cancellation or nonrenewal of insurance policies. (8) The insurer shall require the managing general agent to obtain and maintain a surety bond for the protection of the insurer. The bond must be at least $50,000 or 10 percent of the managing general agents total annual written premium nationwide produced by the managing general agent for the insurer, in the prior calendar year, but not greater than $500,000. A bond is required for each insurer. (9) If the contract permits the managing general agent to settle claims on behalf of the insurer, all of the following apply: (A) The managing general agent shall report every claim to the insurer no later than 30 days after the claim is reported to the managing general agent. (B) The managing general agent shall send a copy of the claim file to the insurer as soon as any of the following becomes known, or at any time earlier upon the request of the insurer if the claim: (i) has the potential to exceed one percent of the policyholder surplus of the insurer as of the 31st day of December of the last completed calendar year or exceeds the limit set by the insurer, whichever is less; (ii) involves a coverage dispute; (iii) may exceeds the managing general agents claims settlement authority; (iv) is open for more than six months; or (v) is closed by payment of one percent of the policyholder surplus of the insurer or an amount set by the insurer, whichever is less. (C) All claim files are the joint property of the insurer and managing general agent, except upon an order of rehabilitation or liquidation of the insurer, at which time the files become the sole property of the insurer or its estate. If the insurer is subject to an order of rehabilitation or liquidation, the managing general agent shall have reasonable access to and the right to copy the files on a timely basis. (D) Any settlement authority granted to the managing general agent may immediately be terminated for cause upon the provision of written notice by the insurer to the managing general agent. The settlement authority must immediately terminate upon the termination of the contract, unless otherwise specified in writing by the insurer. Upon giving written notice to the managing general agent, the insurer may immediately suspend the settlement authority during the pendency of any dispute regarding the cause for termination. (b) Where electronic claim files are in existence, the contract must address the timely transmission of the data. (c) The managing general agent may use only advertising materials pertaining to the business issued by an insurer that has been approved in writing by the insurer in advance of its use. (d) If the contract provides for a sharing of interim profits by the managing general agent and if the managing general agent has the authority to determine the amount of the interim profits by establishing loss reserves, controlling claim payments, or in any other manner, the interim profits may not be paid to the managing general agent until the profits have been verified by an on-site review pursuant to this section and until one year after the profits are earned for property and health insurance business and five years after they are earned for casualty insurance business. (e) It is unlawful for any managing general agent to do any of the following: (1) bind reinsurance or retrocessions on behalf of the insurer, except that the managing general agent may bind facultative reinsurance contracts pursuant to obligatory facultative agreements if the contract with the insurer contains reinsurance underwriting guidelines including, for both reinsurance assumed and ceded, a list of reinsurers with which the automatic agreements are in effect, the coverages and amounts or percentages that may be reinsured, and commission schedules; (2) commit the insurer to participate in insurance or reinsurance syndicates; (3) appoint any producer without assuring that the producer is lawfully licensed to transact the type of insurance for which he is appointed; (4) without prior written approval of the insurer, pay or commit the insurer to pay a claim over a specified amount, net of reinsurance, which amount may not exceed one percent of the policyholder surplus of the insurer as of the 31st day of December of the last completed calendar year; (5) without prior written approval of the insurer, collect any payment from a reinsurer or commit the insurer to any claim settlement with a reinsurer. A report of any such payment or claim settlement must be forwarded promptly to the insurer; (6) permit its producers to serve on the board of directors of the insurer; (7) jointly employ an individual who is employed by the insurer; or (8) appoint a sub managing general agent or other person to act as an agent on its behalf.
 (a) The insurer shall have on file, in a form acceptable to the Commissioner, an independent financial examination of each managing general agent with which it has done business. (b) If a managing general agent establishes loss reserves, the insurer shall obtain annually the opinion of an actuary attesting to the adequacy of loss reserves established for losses incurred and outstanding on business produced by the managing general agent. This annual opinion is in addition to any other required loss reserve certification. (c) The insurer shall conduct not less frequently than once a year an on-site review of the underwriting and claims processing operations of the managing general agent. (d) Binding authority for all reinsurance contracts or participation in insurance or reinsurance syndicates is vested in an officer of the insurer who is not affiliated with the managing general agent. (e) Not later than 30 days after entering into or terminating a contract with a managing general agent, the insurer shall provide written notification of the appointment or termination to the Commissioner. Notices of appointment of a managing general agent must include a statement of duties that the managing general agent is expected to perform on behalf of the insurer, the lines of insurance the managing general agent will manage, and any other information the Commissioner may request. (f) An insurer shall review its books and records each quarter to determine if any producer has become a managing general agent. If the insurer determines that a producer has become a managing general agent, the insurer, not later than 60 days, shall provide written notice of the determination to the producer and Commissioner. The insurer and producer shall comply with sections 771 to 774 not later than 30 days after receipt of the notice. (g) It is unlawful for any insurer to appoint to its board of directors, its managing general agent or an officer, director, employee, producer, or controlling shareholder of its managing general agent.
 (a) The acts of a managing general agent are the acts of the insurer on whose behalf it is acting. (b) A managing general agent may be examined pursuant to chapter 5 of this title, as if it were the insurer. The managing general agent shall pay the expenses incurred in the conduct of the examination in accordance with section 107 of this title.
 (a) An insurance producer doing business under any name other than the producers legal name must seek approval from the Commissioner prior to using the assumed name. (b) Any person violating this section is liable for a fine not to exceed $500.
 (a) The Commissioner may suspend, revoke or refuse to issue or renew an insurance producers license or may levy a civil penalty in accordance with this chapter or any combination of actions, for any one or more of the following causes: (1) providing incorrect, misleading, incomplete or materially untrue information in the license application; (2) violating or failing to comply with any insurance laws, rule, subpoena, consent agreement, or order of the Commissioner or of another states commissioner; (3) obtaining, maintaining, or attempting to obtain a license through material misrepresentation or fraud; (4) improperly withholding, misappropriating or converting any money or properties received in the course of doing insurance business or in his fiduciary capacity; (5) intentionally misrepresenting the terms, benefits, value, cost, or effective dates of any actual or proposed insurance contract or application for insurance; (6) conviction of or plea of guilty or no contest to a felony regardless of whether a judgment of conviction has been entered by the court; (7) conviction of or a plea of guilty or no contest to a misdemeanor that involves the misuse or theft of money or property belonging to another, fraud, forgery, dishonest acts, or breach of a fiduciary duty, that is based on any act or omission relating to the business of insurance, securities, or financial services, or that involves moral turpitude regardless of whether a judgment has been entered by the court; (8) having admitted to or has been found to have committed any insurance unfair trade act or practice or insurance fraud; (9) using fraudulent, coercive, or dishonest practices, or demonstrating incompetence, untrustworthiness or financial irresponsibility in the conduct of business in the Virgin Islands or elsewhere; (10) having an insurance producer or adjuster license, its equivalent, denied, suspended or revoked in any other state, province, district or territory; (11) forging or causing the forgery of anothers name to an application for insurance or to any document related to an insurance transaction; (12) improperly using notes or any other reference material, equipment or devices of any kind to complete an examination for an insurance license; (13) knowingly accepting insurance business from an individual who is not licensed; (14) failing to pay income taxes in accordance with Virgin Islands and Federal laws or comply with any administrative or court order directing payment of income or corporate taxes in accordance with Virgin Islands and Federal laws; (15) failing to respond to an order or request of the Commissioner or its designee more than 15 days after the request; (16) if in the conduct of affairs under the license, the licensee has shown to be, and is considered by the Commissioner, incompetent, or untrustworthy, or a source of injury and loss to the public; (17) if the licensee has dealt with, or attempted to deal with, insurances or to exercise powers relative to insurance outside the scope of the licenses; (18) for any cause for which issuance of the license could have been refused had it then existed and been known to the Commissioner; (19) failing to pay commission to broker; or (20) any other action determined to be hazardous or injurious to the public. (b) If the action by the Commissioner is to not-renew or to deny an application for a license, the Commissioner shall notify the applicant or licensee and advise, in writing, the applicant or licensee of the reason for the denial or nonrenewal of the applicants or licensee license. The applicant or licensee may make written demand upon the Commissioner not later than 15 days after the notice for a hearing before the Commissioner to determine the reasonableness of the Commissioners action. The hearing must beheld not more than 30 days after receipt of the demand and must be held pursuant to section 151 of this title. (c) The license of a business entity may be suspended, revoked or not renewed if the Commissioner finds, after hearing, that an individual licensees violation was known or should have been known by one or more of the partners, officers or managers acting on behalf of the partnership or corporation and the violation was neither reported to the Commissioner nor subject to corrective action taken. (d) In addition to or in lieu of any applicable refusal, nonrenewal, denial, suspension or revocation of a license, a person may, after hearing, be subject to a civil fine in accordance with this chapter. (e) Notwithstanding subsection (b), the Commissioner shall revoke or refuse to renew license immediately and without a hearing upon conviction of the licensee of a felony by final judgment of any court of competent jurisdiction. (f) The Commissioner retains the authority to enforce the provisions of and impose any penalty or remedy authorized by this chapter against any person who is under investigation and found in violation of this chapter even if the persons license or registration has been surrendered or has lapsed by operation of law. (g) After hearing and in addition to or in lieu of suspension, revocation, or refusal to renew any such license, the Commissioner may impose a fine upon the licensee in amount not less than $250 and not more than $10,000. The order imposing the fine must specify the period within which the fine must be fully paid, and the period must not be less than 15 nor more than 30 days after the date of the order. Upon failure to pay the fine when due, the Commissioner shall revoke the licenses of the licensee if not already revoked, and the fine may be recovered in a civil action brought on behalf of the Commissioner by the Attorney General. Any fine so collected must be paid to the Financial Services Fund. (h) The Commissioner must not reinstate the license of, or relicense any licensee or former licensee whose license was suspended, revoked, or renewal refused, until any cause for the suspension, revocation, or refusal of such license is no longer existing, or until any fine imposed upon the licensee pursuant to section (g) has been fully paid. (i) Every order suspending a license must specify the period during which suspension will be effective, and the period may not exceed 12 months. For purposes of this section, the 12-months period applies only to suspension. (j) The holder of any license that has been revoked or suspended shall surrender the license certificate to the Commissioner at the Commissioners request. (k) The license of any firm or corporation may be suspended, revoked, or refused for any cause relating to any individual designated in the license to exercise its powers. (l) Notwithstanding any other provision of this title, the sections providing penalties and fines for violations of this chapter are controlling unless specifically provided otherwise.
 (a) Upon written application of a person who was refused a license or whose license was not renewed or was revoked, or surrendered for cause under section 776, the Commissioner shall hold a hearing to determine whether the administrative action imposing the refusal, nonrenewal, revocation, or other administrative action should be modified, if all if the following conditions are met: (1) At least five years have elapsed since the date of the administrative action sought to be modified; (2) At least two years have elapsed since any previous request for a modification was made under this section; (3) The person is of good business repute and does not have a history of moral turpitude; (4) The person has made restitution for all pecuniary losses suffered by any person as a result of the conduct that gave rise to the administrative action; (5) The person has not been convicted of any felony or of any misdemeanor described in section 776, unless the conviction was the subject of a previous administrative action by the Commissioner; (6) The circumstances surrounding the previous violation are such that it is unlikely the person would commit such offenses in the future; and (7) The persons character has been rehabilitated. (b) The burden of proof is on the person requesting the modification. (c) The modification of an order issued under section 54 of this title is at the discretion of the Commissioner. (d) The issuance of any license pursuant to a modification under this section is conditioned upon the successful completion of all pre licensing education or examination requirements. (e) For the purpose of this section, administrative action does not include suspension that cannot exceed 12 months.
 (a) Upon the hearing of an appeal from an order suspending, revoking, or refusing to renew any license issued, the court, if it finds that the licensee is guilty of violation of the law and if it finds the suspension, revocation, or refusal too severe a penalty under the facts as found, may impose a fine of not more than $10,000 in lieu thereof, and payment of the fine in full not more than 10 days after reinstates, restores or renews the license. The fine depends on the severity of the violation. (b) If it appears that a license of the licensee has been suspended, revoked, or refused for a similar prior or concurrent offense, the court shall not have jurisdiction to impose a fine.
 (a)  (1) An insurance producer may not act as an agent of an insurer unless the insurance producer becomes an appointed agent of that insurer. (2) An insurance producer may not act as a solicitor of an agent or broker unless the insurance producer becomes an appointed solicitor of that agent or broker. (b)  (1) To appoint an insurance producer as its agent, the appointing insurer shall file, in a format approved by the Commissioner, a notice of appointment not more than 15 days after the date the agreement is executed. (2) To appoint an insurance producer as its solicitor, the appointing agent or broker shall file, in a format approved by the Commissioner, a notice of appointment not more than 15 days after the date the agreement is executed. (c) An insurer, or agent or broker shall pay an appointment fee, in the amount and method of payment as prescribed by the Commissioner or by regulation, for each agent appointed by the insurer or solicitor appointed by the agent or broker.
 (a) An insurer or authorized representative of the insurer who terminates the appointment, employment, contract or other insurance business relationship with a producer shall notify the Commissioner not more than 15 days after the effective date of the termination, using a format prescribed by the Commissioner, if the reason for termination is one of the reasons set forth in section 776 or the insurer has knowledge the producer was found by a court, government body, or self-regulatory organization authorized by law to have engaged in any of the activities in section 776. Upon the written request of the Commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination or activity of the producer. (b) An insurer or authorized representative of the insurer who terminates the appointment, employment, or contract with a producer for any reason not set forth in section 776, shall notify the Commissioner not more than 30 days after the effective date of the termination, using a format prescribed by the Commissioner. Upon written request of the Commissioner, the insurer shall provide additional information, documents, records or other data pertaining to the termination. (c) The insurer or the authorized representative of the insurer shall promptly notify the Commissioner in a format acceptable to the Commissioner if, upon further review or investigation, the insurer discovers additional information that would have been reportable to the Commissioner in accordance with subsection (a) had the insurer then known of its existence. (1) Not more than 15 days after making the notification required by subsections (a), (b) and (c), the insurer shall mail a copy of the notification to the producer at his or her last known address. If the producer is terminated for cause for any of the reasons listed in section 776, the insurer shall provide a copy of the notification to the producer at the producers last known address by certified mail, return receipt requested, postage prepaid or by overnight delivery using a nationally recognized carrier. (2) Not more than 30 days after the producer has received the original or additional notification, the producer may file written comments concerning the substance of the notification with the Commissioner. The producer shall, by the same means, simultaneously send a copy of the comments to the reporting insurer, and the comments become a part of the Commissioners file and accompany every copy of a report distributed or disclosed for any reason about the producer as permitted under subsection (f). (A) Any document, materials or other information in the control or possession of the Division of Banking, and Financial Regulation that is provided by an insurer, producer or an employee or agent thereof acting on behalf of the insurer or producer, or obtained by the Commissioner in an examination pursuant to this title is confidential and privileged, and is subject to section 881(a) of title 3, unless otherwise ordered by a court, by the lawful custodian of records, or by another person duly authorized to release information. However, the Commissioner may use the documents, materials or other information in furtherance of any regulatory or legal action brought as a part of the Commissioners duties. (B) Neither the Commissioner nor any person who receives documents, materials or other information while acting under the authority of the Commissioner is permitted or required to testify in any private civil action concerning any confidential documents, materials, or information subject subparagraph (A) (1) of this paragraph. (3) In order to assist in the performance of the Commissioners duties under this chapter, the Commissioner: (A) may share documents, materials or other information, including the confidential and privileged documents, materials or information subject to paragraph (2)(A), with other state, federal, and international regulatory agencies, with the NAIC, its affiliates or subsidiaries, and with state, territory, federal, and international law enforcement authorities if the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information; (B) may receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC, its affiliates or subsidiaries and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, materials or information; and (C) may enter into agreements governing sharing and use of information consistent with this subsection. (4) No waiver of any applicable privilege or claim of confidentiality in the documents, materials, or information occurs as a result of disclosure to the Commissioner under this section or as a result of sharing as authorized in paragraph (3) of this subsection. (5) Nothing in this chapter prohibits the Commissioner from releasing final, adjudicated actions including for cause terminations, which are open to public inspection pursuant to sections 56(b) of this title and section 881(a) of title 3 to a database or other clearinghouse service maintained by the NAIC affiliates or subsidiaries. (f) An insurer, the authorized representative of the insurer, or producer who fails to report as required under the provisions of this section or that is found to have reported with actual malice by a court of competent jurisdiction, after notice and hearing, may have its license or certificate of authority suspended or revoked and may be fined not more than $5,000.
 (a) Every producer or adjuster shall keep at the producers address as shown on the producers license, a record of all transactions consummated under the producers license. This record must be in organized form and must include: (1) if an agent or broker- (A) a record of each insurance contract procured, issued, or countersigned, together with the names of the insurers and insureds, the amount of insurance, the amount of premium paid or to be paid, and a statement of the subject of the insurance; and (B) the names of any other licensees from whom business is accepted, and of persons to whom commissions or allowances of any kind are promised or paid. (2) if an adjuster, a record of each investigation or adjustment undertaken or consummated, and a statement of any fee, commission, or other compensation received or to be received by the adjuster on account of such investigation or adjustment; and (3) such other and additional information as is customary, or as may reasonably be required by the Commissioner. (b) All records to any particular transaction must be kept available and open to the inspection of the Commissioner during all business hours during the five years immediately after the date of the completion of such transaction. (c) This section does not apply as to life or disability insurance.
 (a) An agent or any other representative of an insurer involved in the procuring or issuance of an insurance contract shall report to the insurer the exact amount of consideration charged as premium for such contract, and the amount must likewise be shown in the contract and in the records of the agent. Each willful violation of this provision constitutes a misdemeanor. (b) All funds representing premiums, less commission, or return premiums received by a producer must be received in his fiduciary capacity, unless there is a separate agreement between him and the insurer. (c) Any producer who, not being lawfully entitled thereto, diverts or appropriates such funds or any portion thereof to the producers own use, must be punished as provided in the criminal statutes of the Territory.
 It is unlawful for managing general agent, insurer, or other person to violate, or fail to comply with any provision of sections 771, 772, 773, 774, 780, or 782 of this chapter.
 (a) If the Commissioner, after a hearing conducted in accordance with chapter 7 of this title, finds a violation of the types of infractions listed in section 753(e) of this chapter, the Commissioner may order any of the following: (1) for each separate violation committed by an insurer, managing general agent, or other person, a civil penalty in an amount of not more than $10,000, for each instance of such violation; (2) for a violation committed by a managing general agent or the producer of the managing general agent, revocation or suspension of the license of the managing general agent or the license of the producer; (3) for a violation committed by a managing general agent, reimbursement of the insurer or the rehabilitator or liquidator of the insurer by the managing general agent and by any officer, director, shareholder, or other representative or agent of the managing general agent who actually benefited from the violation, for any losses incurred by the insurer that were caused by the violation. (b) Any person violating this section may be imprisoned for not more than one year in addition to any other penalty or forfeiture under this section. (c) Nothing in this section affects the authority of the Commissioner to impose any other civil penalties or to initiate any other proceedings or remedies pursuant to the laws of the Virgin Islands.
 Nothing in this chapter is intended, in any manner, to limit or restrict the rights of policyholders and claimants of any insurer on whose behalf a managing general agent is acting, or of auditors, accountants, examiners, or other persons that conduct examinations of insurers.
 (a) A producer shall report to the Commissioner any administrative action taken against the producer in another jurisdiction or by another governmental agency in the Virgin Islands not more than 30 days after the final disposition of the matter. This report must include a copy of the order, consent to order or other relevant legal documents. (b) Not later than 30 days after of the initial pretrial hearing date, a producer shall report to the Commissioner any criminal prosecution of the producer taken in any jurisdiction. The report must include a copy of the initial complaint filed, the order resulting from the hearing and any other relevant legal documents.
 (a) Every nonresident agent or broker by obtaining a license in the Virgin Islands may be sued in the Virgin Islands in the district of the plaintiffs property, residence or principal office or place of business upon any cause of action, arising out of or based upon any business or acts done or omitted to be done. (b) The Commissioner is the attorney in fact of a nonresident agent or broker for the purpose of being served with and accepting service of process in such suits, action or other proceedings. The summons or other process together with a certified copy of the complaint, or other pleading must be served upon the Commissioner in triplicate, and the Commissioner shall immediately mail a true copy registered mail with proper postage affixed properly addressed to the residence of the nonresident agent or broker. (c) The place of residence of a licensed nonresident agent or broker placed on file with the Commissioner is considered the place of residence until such agent or broker places on file with the Commissioner a written notice stating another place of residence. Upon such service of process, the court in which the action is filed is considered to have jurisdiction in personam, and the nonresident agent or broker has 40 days after the date of service upon the Commissioner to plead, answer, or otherwise defend the action. In any action in which the process is so served, the plaintiff shall pay the Commissioner the actual costs for service of process, which sum is be taxed as a part of the costs in the action if the plaintiff prevails. The Commissioner shall enter alphabetically in a process book, kept for that purpose, the name of plaintiff and defendant, the title and number, if any, of the cause in which process has been served upon him, and the day and hour when the service was made.
 (a)  (1) Where any insurance producer or any affiliate of the producer receives any compensation from the customer for the placement of insurance or represents the customer with respect to that placement, neither that producer nor any affiliate shall accept or receive any compensation from an insurer or other third party for that placement of insurance unless the producer has, prior to the customers purchase of insurance: (A) obtained the customers documented acknowledgement that the compensation will be received by the producer or affiliate; (B) disclosed the amount of compensation from the insurer or other third party for that placement. If the amount of compensation is not known at the time of disclosure, the producer shall disclose the specific method for calculating the compensation and, if possible, a reasonable estimate of the amount. (2) Paragraph (1) does not apply to an insurance producer who: (A) does not receive compensation from the customer for the placement of insurance; and (B) in connection with that placement of insurance represents an insurer that has appointed the producer; and (C) discloses to the customer prior to the purchase of insurance: (i) that the insurance producer will receive compensation from an insurer in connection with that placement; or (ii) that, in connection with that placement of insurance, the insurance producer represents the insurer and that the producer may provide services to the customer for the insurer. (b) A person may not be considered a customer for purposes of this section if the person is merely: (1) a participant or beneficiary of an employee benefit plan; or (2) covered by a group or blanket insurance policy or group annuity contract sold, solicited or negotiated by the insurance producer or affiliate. (c) This section does not apply to: (1) A person licensed as an insurance producer who acts only as an intermediary between an insurer and the customers producer, for example a managing general agent, a sales manager, or wholesale broker; or (2) a reinsurance intermediary. (d) For purposes of this section: (1) Affiliate means a person who controls, is controlled by, or is under common control with the producer. (2) Compensation from an insurer or other third party means payments, commissions, fees, awards, overrides, bonuses, contingent commissions, loans, stock options, gifts, prizes or any other form of valuable consideration, whether or not payable pursuant to a written agreement. (3) Compensation from the customer may not include any fee or amount collected by or paid to the producer that does not exceed an amount established by the Commissioner. (4) Documented acknowledgement means the customers written consent obtained prior to the customers purchase of insurance. In the case of a purchase over the telephone or by electronic means for which written consent cannot reasonably be obtained, consent documented by the producer is acceptable.
 (a) It is unlawful for an insurer or an insurance producer to pay a commission, service fee, brokerage fee, or other type of consideration for selling, soliciting, or negotiating insurance in the Virgin Islands, if the person is required to be licensed under this chapter but is not licensed. However, renewal or other deferred commissions may be paid to the person for selling, soliciting, or negotiating insurance in the Virgin Islands if the person was required to be licensed under this chapter at the time of the sale, solicitation, or negotiation and was so licensed at that time. (b) It is unlawful for an insurer or insurance producer to pay a referral fee or other compensation to an unlicensed person for any referral unless the compensation is a fixed dollar amount for each referral and does not depend on whether the person referred purchases an insurance product. (c) The Commissioner shall suspend or revoke the license of all licensees participating in any violation of this section or impose a fine.
 The Commissioner may, in accordance with this title, promulgate reasonable regulations necessary or proper to carry out the purposes of this chapter.
 The Commissioner, the Director, and employees of the Division of Banking and Insurance and Financial Regulation are immune from any civil liability while acting within the scope of this chapter.
 The Commissioner may participate, in whole or in part, with the NAIC or any of its affiliates or subsidiaries, in a centralized agent license registry in which insurance producers acting as agents appointments are centrally or simultaneously electronically stored for all states that require an agent to be licensed and that participate in the registry.
 If any provision of this chapter, or the application of a provision to any person or circumstances is held invalid, the remainder of the provisions and the application of the provision to persons or circumstances other than those to which it is held invalid are not affected.
 The applicable provisions of this chapter shall apply to insurances other than ocean marine and foreign trade insurances, but this chapter shall not apply to life or disability insurance policies not issued for delivery in this territory nor delivered in this territory.
 (a) Any person of competent legal capacity may contract for insurance. (b) A minor fifteen (15) years of age or older may, notwithstanding such minority, contract for life or disability insurance on his own life or body, for his own benefit or for the benefit of his father, mother, spouse, child, brother, sister, or grandparent, and may exercise all rights and powers with respect to or under the contract as though of full legal age, and may surrender his interest therein and give a valid discharge for any benefit accruing or money payable thereunder. The minor shall not, by reason of his minority, be entitled to rescind, avoid, or repudiate the contract, or any exercise of a right or privilege thereunder, except, that such minor, not otherwise emancipated, shall not be bound by any unperformed agreement to pay, by promissory note or otherwise, any premium on any such insurance contract.
 (a) Any individual of competent legal capacity may procure or effect an insurance contract upon his own life or body for the benefit of any person. But no person shall procure or cause to be procured any insurance contract upon the life or body of another individual unless the benefits under such contract are payable to the individual insured or his personal representatives, or to a person having, at the time when such contract was made, an insurable interest in the individual insured. (b) If the beneficiary, assignee or other payee under any contract made in violation of this section receives from the insurer any benefits thereunder accruing upon the death, disablement or injury of the individual insured, the individual insured or his executor or administrator, as the case may be, may maintain an action to recover such benefits from the person so receiving them. (c) Insurable interest as used in this section includes only interests as follows: (1) in the case of individuals related closely by blood or by law, a substantial interest engendered by love and affection; (2) in the case of other persons, a lawful and substantial economic interest in having the life, health or bodily safety of the individual insured continue, as distinguished from an interest which would arise only by, or would be enhanced in value by, the death, disablement or injury of the individual insured; and (3) an individual heretofore or hereafter party to a contract or option for the purchase or sale of an interest in a business partnership or firm, or of shares of stock of a close corporation or of an interest in such shares, has an insurable interest in the life of each individual party to such contract and for the purposes of such contract only, in addition to any insurable interest which may otherwise exist as to the life of such individual.
 (a) No contract of insurance on property or of any interest therein or arising therefrom shall be enforceable except for the benefit of persons having an insurable interest in the things insured. (b) Insurable interest as used in this section means any lawful and substantial economic interest in the safety or preservation of the subject of the insurance free from loss, destruction, or pecuniary damage.
 When the name of a person intended to be insured is specified in the policy, such insurance can be applied only to his own proper interest. This section shall not apply to life and disability insurances.
 No life or disability insurance contract upon an individual, except a contract of group life insurance or of group or blanket disability insurance, as defined in this title, shall be made or effectuated unless at the time of the making of the contract the individual insured, being of competent legal capacity to contract, in writing applies therefor or consents thereto, except in the following cases: (1) a spouse may effectuate such insurance upon the other spouse; and (2) any person having an insurable interest in the life of a minor, or any person upon whom a minor is dependent for support and maintenance, may effectuate insurance upon the life of the minor.
 (a) Any application for insurance in writing by the applicant shall be altered solely by the applicant or by his written consent, except that insertions may be made by the insurer for administrative purposes only in such manner as to indicate clearly that such insertions are not to be ascribed to the applicant. Violation of this provision shall be a misdemeanor. (b) Any insurer issuing an insurance contract upon such an application unlawfully altered by its officer, employee, or agent shall not have available in any action arising out of such contract, any defense which is based upon the fact of such alteration, or as to any item in the application which was so altered.
 (a) No application for the issuance of any insurance policy or contract shall be admissible in evidence in any action relative to such policy or contract, unless a true copy of the application was attached to or otherwise made a part of the policy when issued and delivered. This provision shall not apply to policies or contracts of industrial life insurance. (b) If any policy of life or disability insurance delivered in this territory is reinstated or renewed, and the insured or the beneficiary or assignee of the policy makes written request to the insurer for a copy of the application, if any, for such reinstatement or renewal, the insurer shall, within fifteen days after receipt of such request at its home office or at any of its branch offices, deliver or mail to the person making such request, a copy of such application. If such copy is not so delivered or mailed, the insurer shall be precluded from introducing the application as evidence in any action or proceeding based upon or involving the policy or its reinstatement or renewal.
 (a) Except as provided in subsection (b) of this section, no oral or written misrepresentation or warranty made in the negotiation of an insurance contract, by the insured or in his behalf, shall be deemed material or defeat or avoid the contract or prevent it attaching, unless the misrepresentation or warranty is made with the intent to deceive. (b) In any application for life or disability insurance made in writing by the insured, all statements therein made by the insured shall, in the absence of fraud, be deemed representations and not warranties. The falsity of any such statement shall not bar the right to recovery under the contract unless such false statement was made with actual intent to deceive or unless it materially affected either the acceptance of the risk or the hazard assumed by the insurer.
 (a) No insurance policy form other than surety bond forms, or application form where written application is required and is to be attached to the policy, or printed life or disability rider or endorsement form shall be issued, delivered, or used unless it has been filed with and approved by the Commissioner. This section shall not apply to policies, riders or endorsements of unique character designed for and used with relation to insurance upon a particular subject. (b) Every such filing shall be made not less than 30 days in advance of any such issuance, delivery, or use. At the expiration of such 30 days the form so filed shall be deemed approved unless prior thereto it has been affirmatively approved or disapproved by order of the Commissioner. The Commissioner may extend by not more than an additional 30 days the period within which he may so affirmatively approve or disapprove any such form, by giving notice of such extension before expiration of the initial 30-day period. At the expiration of any such period as so extended, and in the absence of such prior affirmative approval or disapproval, any such form shall be deemed approved. The Commissioner may withdraw any such approval at any time for cause. By approval of any such form for immediate use, the Commissioner may waive any unexpired portion of such initial 30-day waiting period. (c) The Commissioner's order disapproving any such form or withdrawing a previous approval shall state the grounds therefor. (d) No such form shall knowingly be so issued or delivered as to which the Commissioner's approval does not then exist. (e) The Commissioner may, by order, exempt from the requirements of this section for so long as he deems proper, any insurance document or form or type thereof as specified in such order, to which in his opinion this section may not practically be applied, or the filing and approval of which are, in his opinion, not desirable or necessary for the protection of the public.
 (a) The Commissioner shall disapprove any such form of policy, application, rider, or endorsement, or withdraw any previous approval thereof, only as follows: (1) if it is in any respect in violation of or does not comply with this title; (2) if it does not comply with any controlling filing theretofore made and approved; (3) if it contains or incorporates by reference any inconsistent, ambiguous or misleading clauses, or exceptions and conditions which unreasonably or deceptively affect the risk purported to be assumed in the general coverage of the contract; (4) if it has any title, heading, or other indication of its provisions which is misleading; or (5) if purchase of insurance thereunder is being solicited by deceptive advertising. (b) In addition to the grounds for disapproval of any such form as provided in subsection (a) of this section, the Commissioner may disapprove any form of disability insurance policy if the benefits provided therein are unreasonable in relation to the premium charged.
 (a) The standard insurance policy of the State of Washington or the State of New York, or The Standard Foreign Policy (English Foreign Form) as authorized and on file in the Office of the Commissioner of Insurance of the State of Washington or of New York on January 1, 1952, together with subsequent changes, is established as the standard form of insurance policies for the Virgin Islands; Provided, That the Commissioner may, after hearing, from time to time promulgate such rules and regulations as may be necessary to effect reasonable uniformity in all basic contracts of fire insurance which are commonly known as the standard form fire policies and may be so referred to in this title, and in the usual supplemental coverages, riders, or endorsements thereon or thereto, to the end that there be a reasonable concurrency of contract where two or more insurers insure the same subject and risk. All such forms heretofore approved by the Commissioner and for use as of immediately prior to the effective date of this title may continue to be so used until the further order the Commissioner made pursuant to this subsection or pursuant to any other provision of this title. (b) The Commissioner may from time to time, after hearing, promulgate such rules and regulations as he deems necessary to establish reasonable minimum standard conditions and terminology for basic benefits to be provided by disability insurance contracts which are subject to chapters 35 and 37 of this title, for the purpose of expediting his approval of such contracts pursuant to this title. No such promulgation shall be inconsistent with standard provisions as required pursuant to section 813 of this title, nor contain requirements inconsistent with requirements relative to the same benefit provision as formulated or approved by the National Association of Insurance Commissioners.
 (a) Insurance contracts shall contain such standard provisions as are required by the applicable chapters of this title pertaining to contracts of particular kinds of insurance. The Commissioner may waive the required use of a particular standard provision in a particular insurance contract form if (1) he finds such provision unnecessary for the protection of the insured, and inconsistent with the purposes of the contract; and (2) the contract is otherwise approved by him. (b) No insurance contract shall contain any provision inconsistent with or contradictory to any such standard provision used or required to be used, but the Commissioner may, except as to the standard provisions of individual disability insurance contracts as required under chapter 35 of this title, approve any provision which is in his opinion more favorable to the insured than the standard provision or optional standard provision otherwise required. No endorsement, rider, or other documents attached to such contract shall vary, extend, or in any respect conflict with any such standard provision, or with any modification thereof so approved by the Commissioner as being more favorable to the insured. (c) In lieu of the standard provisions required by this title for contracts for particular kinds of insurance, substantially similar standard provisions required by the law of a foreign or alien insurer's domicile may be used when approved by the Commissioner.
 (a) The written instrument, in which a contract of insurance is set forth, is the policy. (b) A policy shall specify (1) the name of the parties to the contract, the insurer's name and type of organization shall be clearly shown in the policy; (2) the subject of the insurance; (3) the risks insured against; (4) the time at which the insurance thereunder takes effect and the period during which the insurance is to continue; (5) a statement of the premium, other than as to surety bonds, and if other than life, disability, or title insurance, the premium rate; and (6) the conditions pertaining to the insurance. (c) If under the contract the exact amount of premiums is determinable only at termination of the contract, a statement of the basis and rates upon which the final premium is to be determined and paid shall be furnished the Commissioner or the insured upon request. (d) This section shall not apply to surety insurance contracts.
 (a) A policy may contain additional provisions, which are not inconsistent with this title, and which are (1) required to be so inserted by the laws of the insurer's domicile; or (2) necessary, on account of the manner in which the insurer is constituted or operated, to state the rights and obligations of the parties to the contract. (b) Punitive damages shall not be covered by any insurance policy, regardless of the language therein, unless the policy contains a provision which specifically states: PUNITIVE DAMAGES ARE EXPLICITLY COVERED BY THE TERMS OF THIS POLICY AS AGREED UPON BY THE PARTIES HERETO AND FOR WHICH AN ADDITIONAL PREMIUM HAS BEEN PAID. For the purposes of this subsection punitive damages means an award over and above general and special damages, where there has been a showing by clear and convincing evidence that the tortfeasor personally and intentionally acted out of circumstances occasioned by violence, oppression, malice, fraud, or wanton or wicked conduct. Gross negligence shall be an insufficient standard of proof to support an award of punitive damages.
 No policy shall contain any provision purporting to make any portion of the charter, bylaws, or other constituent document of the insurer a part of the contract unless such portion is set forth in full in the policy. Any policy provision in violation of this section shall be invalid.
 Premium as used in this title means all sums charged, received, or deposited as consideration for an insurance contract or the continuance thereof. Any assessment, or any membership, policy, survey, inspection, service or similar fee or charge made by the insurer in consideration for an insurance contract is deemed part of the premium.
 (a) The premium stated in the policy shall be inclusive of all fees, charges, premiums, or other consideration charged for the insurance or for the procurement thereof. (b) No insurer or its officer, employee, agent, solicitor, or other representative shall charge or receive any fee, compensation, or consideration for insurance which is not included in the premium specified in the policy. However, any amount due with respect to gross receipts taxes may be stated separately in the policy or on an invoice for such policy. (c) Each violation of this section is a gross misdemeanor.
 No agreement in conflict with, modifying, or extending any contract of insurance shall be valid unless in writing and made a part of the policy.
 (a) No insurance contract delivered or issued for delivery in this territory and covering subjects located, resident, or to be performed in this territory, shall contain any condition, stipulation, or agreement which (1) requires it to be construed according to the laws of any other territory, state or country except as necessary to meet the requirements of the motor vehicle financial responsibility laws of such other territory, state or country; (2) deprives the courts of this territory of the jurisdiction of action against the insurer; or (3) limits right of action against the insurer to a period of less than one year from the time when the cause of action accrues in connection with all insurances other than property and marine and transportation insurances. In contracts of property insurance, or of marine and transportation insurance, such limitation shall not be to a period of less than one year from the date of the loss. (b) Any such condition, stipulation, or agreement in violation of this section shall be void, but such voiding shall not affect the validity of the other provisions of the contract.
 (a) Every insurance contract shall be executed in the name of and on behalf of the insurer by its officer, employee, or representative duly authorized by the insurer. (b) A facsimile signature of any such executing officer, employee or representative may be used in lieu of an original signature. (c) No insurance contract heretofore or hereafter issued and which is otherwise valid shall be rendered invalid by reason of the apparent execution thereof on behalf of the insurer by the imprinted facsimile signature of any individual not authorized so to execute as of the date of the policy, if the policy is countersigned with the original signature of an individual then so authorized to countersign.
 (a) A binder is used to bind insurance temporarily pending the issuance of the policy. Upon the sale of an insurance policy, a binder shall be issued immediately to the insured. No binder shall be valid beyond the issuance of the policy as to which it was given, or beyond 90 days from its effective date, whichever period is the shorter. (b) If the policy has not been issued a binder may be extended or renewed beyond such 90 days upon the Commissioner's written approval, or in accordance with such rules and regulations relative thereto as the Commissioner may promulgate.
 (a) The Commissioner may suspend or revoke the license of any agent issuing or purporting to issue any binder as to any insurer named therein as to which he is not then authorized so to bind. (b) In addition to any penalties which may be imposed by the Commissioner, any agent who issues a false, fraudulent, counterfeit or otherwise invalid binder shall be fined, for each binder issued, not less than $500.00 nor more than $2,000.00, and may be imprisoned not more than two (2) years.
 (a) Two or more authorized insurers may jointly issue, and shall be jointly and severally liable on, an underwriter's policy bearing their names. Any one insurer may issue policies in the name of an underwriter's department and such policies shall plainly show the true name of the insurer. (b) Two or more authorized insurers may, with the Commissioner's approval, issue a combination policy which shall contain provisions substantially as follows: (1) that the insurers executing the policy shall be severally liable for the full amount of any loss or damage, according to the terms of the policy, or for specified percentages or amounts thereof, aggregating the full amount of insurance under the policy; and (2) that service of process, or of any notice or proof of loss required by such policy, upon any of the insurers executing the policy, shall constitute service upon all such insurers. (c) This section shall not apply to co-surety obligations.
 (a) Subject to the insurer's requirements as to payment of premium, every policy shall be delivered to the insured or to the person entitled thereto within a reasonable period of time after its issuance, but a policy of automobile or homeowners insurance shall be issued not more than 90 days after the payment of the premium. (b) In event the original policy is delivered or is so required to be delivered to or for deposit with any vendor, mortgagee, or pledgee of any motor vehicle or aircraft, and in which policy any interest of the vendee, mortgagor, or pledgor in or with reference to such vehicle or aircraft is insured, a duplicate of such policy, or memorandum thereof setting forth the type of coverage, limits of liability, premiums for the respective coverages, and duration of the policy, shall be delivered by the vendor, mortgagee, or pledgee to each such vendee, mortgagor, or pledgor named in the policy or coming within the group of persons designated in the policy to be so included. If the policy does not provide coverage of legal liability for injury to persons or damage to the property of third parties, a conspicuous statement of such fact shall be printed, written, or stamped on the face of such duplicate policy or memorandum.
 Any insurance policy terminating by its terms at a specified expiration date and not otherwise renewable, may be renewed or extended at the option of the insurer and upon a currently authorized policy form and at the premium rate then required therefor for a specific additional period or periods by a certificate or by endorsement of the policy, and without requiring the issuance of a new policy.
 (a) Cancellation by the insurer of any policy which by its terms is cancellable at the option of the insurer, or of any binder based on such policy, may be effected as to any interest only upon compliance with the following: (1) written notice of such cancellation must be actually delivered or mailed by certified mail to the insured or to his representative in charge of the subject of the insurance (i) not less than fifteen days prior to the effective date of cancellation resulting from (A) non-payment of premium; (B) discovery of fraud or material misrepresentation in obtaining the policy or in the presentation of a claim thereunder; or (C) suspension or revocation during the required policy period of the driver's license of the named insured or any other person who customarily operates the automobile insured under the policy; and (ii) not less than thirty days prior to the effective date of cancellation for any other cancellable terms of the policy as well as nonrenewal thereof; and (2) like notice must also be so delivered or mailed by certified mail to each mortgagee, pledgee, or other person shown by the policy to have an interest in any loss which may occur thereunder. (b) The mailing of any such notice shall be effected by certified mail by depositing it in a sealed envelope, directed to the addressee at his last address as known to the insurer or as shown by the insurer's records, with proper prepaid postage affixed, in a letter depository of the United States post office. The insurer shall retain in its records any such item so mailed together with its envelope, which was returned by the post office upon failure to find, or deliver the mailing, to the addressee. (c) The certificate of service signed by the insured or his representative or the envelope returned by the Post Office upon failure to find or deliver the mailing to the addressee shall constitute prima facie evidence of such facts of the mailing. (d) The portion of any premium paid to the insurer on account of the policy, unearned because of the cancellation and in an amount as computed on the pro rata basis, must be actually paid to the insured or other person entitled thereto as shown by the policy or by any endorsement thereon, or be mailed to the insured or such person within thirty days following such cancellation. Any such payment may be made by cash, or by check, bank draft, or money order. (e) This section shall not apply to contracts of life or disability insurance without provision for cancellation prior to the date to which premiums have been paid.
 (a) Cancellation by the insured of any policy which by its terms is cancellable at the insured's option or of any binder based on such policy may be effected by written notice thereof to the insurer and surrender of the policy or binder for cancellation prior to or on the effective date of such cancellation. In event the policy or binder has been lost or destroyed and cannot be so surrendered, the insurer may in lieu of such surrender accept and in good faith rely upon the insured's written statement setting forth the fact of such loss or destruction. (b) As soon as practicable following such cancellation the insurer shall pay to the insured or to the person entitled thereto as shown by the insurer's records, any unearned portion of any premium paid on the policy as computed on the customary short rate or as otherwise specified in the policy. If no premium has been paid on the policy, the insured shall be liable to the insurer for premium for the period during which the policy was in force. (c) The surrender of a policy to the insurer for any cause by any person named therein as having an interest insured thereunder shall create a presumption that such surrender is concurred in by all persons so named. (d) This section shall not apply to life insurance policies or to annuity contracts.
 The Commissioner may order the immediate cancellation of any policy the procuring or effectuation of which was accomplished through or accompanied by a violation of this title, except in cases where the policy by its terms is not cancellable by the insurer and the insured did not knowingly participate in any such violation.
 No insurance contract insuring against loss or damage through legal liability for the bodily injury or death by accident of any individual, or for damage to the property of any person, shall be retroactively annulled by any agreement between the insurer and insured after the occurrence of any such injury, death, or damage for which the insured may be liable, and any such annulment attempted shall be void.
 (a) Every insurer issuing participating policies shall pay dividends, unused premiums refunds or savings distributed on account of any such policy, only to the real party in interest entitled thereto as shown by the insurer's records, or to any person to whom the right thereto has been assigned in writing of record with the insurer, or given in the policy by such real party in interest. (b) Any person who is shown by the insurer's records to have paid for his own account, or to have been ultimately charged for, the premium for insurance provided by a policy in which another person is the nominal insured shall be deemed such real party in interest proportionate to premium so paid or so charged. This subsection shall not apply as to any such dividend, refund, or distribution which would amount to less than one dollar. (c) This section shall not apply to contracts of group life insurance, group annuities, or group disability insurance.
 If any breach of a warranty or condition in any insurance contract occurs prior to a loss under the contract, such breach shall not avoid the contract nor avail the insurer to avoid liability, unless the breach exists at the time of loss.
 Subject to the terms of the policy relating to its assignment, life insurance policies, other than industrial or group life insurance policies, and disability policies providing benefits for accidental death, whether such policies were heretofore or are hereafter issued, and under the terms of which the beneficiary may be changed upon the sole request of the insured, may be assigned either by pledge or transfer of title, by an assignment executed by the insured alone and delivered to the insurer, whether or not the pledgee or assignee is the insurer. Industrial life insurance policies may be made assignable only to a bank or trust company. Any such assignment shall entitle the insurer to deal with the assignee as the owner or pledgee of the policy in accordance with the terms of the assignment, until the insurer has received at its home office written notice by or on behalf of some other person claiming some interest in the policy in conflict with the assignment.
 Whenever, in any health insurance claim form, an insured specifically authorizes payment of benefits directly to any recognized hospital, licensed ambulance provider, physician, dentist, or other person who provided the services in accordance with the provisions of the policy, the insurer shall make such payment to the designated provider of such services. The insurance contract may not prohibit, and claims forms must provide an option for the payment of benefits directly to a licensed hospital, licensed ambulance provider, physician, or dentist, or other person who provided the services in accordance with the provisions of the policy for care provided. The insurer may require written attestation of assignment of benefits. Payment to the provider from the insurer may not be more than the amount that the insurer would otherwise have paid without the assignment.
 Whenever the proceeds of, or payments under, a life or disability insurance policy, heretofore or hereafter issued, become payable and the insurer makes payment thereof in accordance with the terms of the policy, or in accordance with any written assignment thereof pursuant to section 833 of this title, the person then designated in the policy or by such assignment as being entitled thereto shall be entitled to receive such proceeds or payments and to give full acquittance therefor, and such payment shall fully discharge the insurer from all claims under the policy unless, before payment is made, the insurer has received at its home office, written notice by or on behalf of some other person that such other person claims to be entitled to such payment or some interest in the policy.
 Any minor domiciled in this territory who has attained the age of 18 years shall be deemed competent to receive and to give full acquittance and discharge for periodical payments, in aggregate amount not exceeding $2,000 in any one year, made by a life insurer as benefits payable upon the death of the insured, and in compliance with the provisions of a life insurance policy or settlement agreement, if such policy or agreement specifically provides for payments direct to such minor. No such minor shall be deemed competent to alienate the right to, or to anticipate, such payments.
 Where the individual insured and the beneficiary designated in a life insurance policy or policy insuring against accidental death have died and there is not sufficient evidence that they have died otherwise than simultaneously, the proceeds of the policy shall be distributed as if the insured had survived the beneficiary, unless otherwise expressly provided in the policy.
 The proceeds or avails of all contracts of disability insurance and of provisions providing benefits on account of the insured's disability which are supplemental to life insurance or annuity contracts heretofore or hereafter effected shall be exempt from all liability for any debt of the insured, and from any debt of the beneficiary existing at the time the proceeds are made available for his use.
 (a) The lawful beneficiary, assignee, or payee of a life insurance policy, other than an annuity, heretofore or hereafter effected by any person on his own life, or on the life of another, in favor of a person other than himself, shall be entitled to the proceeds and avails of the policy against the creditors and representatives of the insured and of the person effecting the insurance, and such proceeds and avails shall also be exempt from all liability for any debt of such beneficiary, existing at the time the proceeds or avails are made available for his own use. (b) The provisions of subsection (a) of this section shall apply: (1) whether or not the right to change the beneficiary is reserved or permitted in the policy; or (2) whether or not the policy is made payable to the person whose life is insured or to his estate if the beneficiary, assignee or payee shall predecease such person; except, that this subsection shall not be construed so as to defeat any policy provision which provides for disposition of proceeds in the event the beneficiary shall predecease the insured. (c) The exemptions provided by subsection (a) of this section, subject to the statute of limitations, shall not apply: (1) to any claim to or interest in such proceeds or avails by or on behalf of the insured, or the person so effecting the insurance, or their administrators or executors, in whatever capacity such claim is made or such interest is asserted; (2) to any claim to or interest in such proceeds or avails by or on behalf of any person to whom rights thereto have been transferred with intent to defraud creditors; but an insurer shall be liable to all such creditors only as to amounts aggregating not to exceed the amount of such proceeds or avails remaining in the insurer's possession at the time the insurer receives at its home office written notice by or on behalf of such creditors, of claims to recover for such transfer, with specification of the amounts claimed; or (3) to so much of such proceeds or avails as equals the amount of any premiums or portion thereof paid for the insurance with intent to defraud creditors, with interest thereon, and if prior to the payment of such proceeds or avails the insurer has received at its home office written notice by or on behalf of the creditor, of a claim to recover for premiums paid with intent to defraud creditors, with specification of the amount claimed. (d) For the purposes of subsection (a) of this section a policy shall also be deemed to be payable to a person other than the insured if and to the extent that a facility-of-payment clause or similar clause in the policy permits the insurer to discharge its obligation after the death of the individual insured by paying the death benefits to a person as permitted by such clause. (e) No person shall be compelled to exercise any rights, powers, options or privileges under any such policy.
 (a) A policy of group life insurance or the proceeds thereof payable to the individual insured or to the beneficiary thereunder shall not be liable, either before or after payment, to be applied to any legal or equitable process to pay any liability of any person having a right under the policy. The proceeds thereof, when not made payable to a named beneficiary or to a third person pursuant to a facility-of-payment clause, shall not constitute a part of the estate of the individual insured for the payment of his debts. (b) This section shall not apply to group life insurance policies issued to debtor groups pursuant to this title to the extent that such proceeds are applied to payment of the obligation for the purpose of which the insurance was so issued.
 (a) The benefits, rights, privileges and options which under any annuity contract heretofore or hereafter issued are due or prospectively due the annuitant who paid the consideration for the annuity contract shall not be subject to execution nor shall the annuitant be compelled to exercise any such rights, powers or options, nor shall creditors be allowed to interfere with or terminate the contract, except: (1) as to amounts paid for or as premium on any such annuity with intent to defraud creditors, with interest thereon, and of which the creditor has given the insurer written notice at its home office prior to the making of the payments to the annuitant out of which the creditor seeks to recover. Any such notice shall specify the amount claimed or such facts as will enable the insurer to ascertain such amount, and shall set forth such facts as will enable the insurer to ascertain the insurance or annuity contract, the person insured or annuitant and the payments sought to be avoided on the ground of fraud. (2) the total exemption of benefits presently due and payable to any annuitant periodically or at stated times under all annuity contracts under which he is an annuitant shall not at any time exceed $250 per month for the length of time represented by such installments, and that such periodic payment in excess of $250 per month shall be subject to garnishee execution to the same extent as are wages and salaries; and (3) if the total benefits presently due and payable to any annuitant under all annuity contracts under which he is an annuitant shall at any time exceed payment at the rate of $250 per month, then the court may order such annuitant to pay to a judgment creditor or apply on the judgment, in installments, such portion of such excess benefits as to the court may appear just and proper, after due regard for the reasonable requirements of the judgment debtor and his family, if dependent upon him, as well as any payments required to be made by the annuitant to other creditors under prior court orders. (b) The benefits, rights, privileges or option accruing under such contract to a beneficiary or assignee shall not be transferable nor subject to commutation, and if the benefits are payable periodically or at stated times the same exemptions and exceptions contained herein for the annuitant shall apply with respect to such beneficiary or assignee. (c) An annuity contract within the meaning of this section shall be any obligation to pay certain sums at stated times, during life or lives, or for a specified term or terms, issued for a valuable consideration, regardless of whether or not such sums are payable to one or more persons, jointly or otherwise, but does not include payments under life insurance contracts at stated times during life or lives, or for a specified term or terms.
 (a) Every life insurance policy heretofore or hereafter made payable to or for the benefit of the spouse of the insured, and every life insurance policy heretofore or hereafter assigned, transferred, or in any way made payable to a spouse or to a trustee for the benefit of a spouse, regardless of how such assignment or transfer is procured, shall, unless contrary to the terms of the policy, inure to the separate use and benefit of such spouse; Provided, That the beneficial interest of a spouse in a policy upon the life of a child of the spouses, however such interest is created, shall be deemed to be a community interest and not a separate interest, unless expressly otherwise provided by the policy. (b) In any life insurance policy heretofore or hereafter issued upon the life of a spouse the designation heretofore or hereafter made by such spouse of a beneficiary in accordance with the terms of the policy shall create a presumption that such beneficiary was so designated with the consent of the other spouse, but only as to any beneficiary who is the child, parent, brother, or sister of either of the spouses. The insurer may in good faith rely upon the representations made by the insured as to the relationship to him of any such beneficiary.
 An insurer shall furnish, upon written request of any person claiming to have a loss under any insurance contract, forms of proof of loss for completion by such person. But such insurer shall not, by reason of the requirement so to furnish forms, have any responsibility for or with reference to the completion of such proof or the manner of any such completion or attempted completion.
 None of the following acts by or on behalf of an insurer shall be deemed to constitute a waiver of any provision of a policy or of any defense of the insurer thereunder: (1) acknowledgment of the receipt of notice of loss or of claim under the policy; (2) furnishing forms for reporting a loss or claim, for giving information relative thereto, or for making proof of loss, or receiving or acknowledging receipt of any such forms or proofs completed or uncompleted; or (3) investigating any loss or claim under any policy or engaging in negotiations looking toward a possible settlement of any such loss or claim.
 No insurer shall make or permit any unfair discrimination in favor of particular individuals or persons, or between insureds or subjects of insurance having substantially like insuring, risk, and exposure factors, or expense elements, in the terms or conditions of any insurance contract, or in the rate or amount of premium charged therefor, or in the benefits payable or in any other rights or privileges accruing thereunder. This provision shall not prohibit fair discrimination by a life insurer as between individuals having unequal expectations of life.
 Any insurance policy, rider, or endorsement hereafter issued and otherwise valid, which contains any condition or provision not in compliance with the requirements of the title, shall not be rendered invalid thereby, but shall be construed and applied in accordance with such conditions and provisions as would have applied had such policy, rider, or endorsement been in full compliance with this title.
 Every insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy, and as amplified, extended, or modified by any rider, endorsement, or application attached to and made a part of the policy.
 Nothing in this chapter shall apply to or affect (1) any policy of Workers' Compensation Administration insurance or any policy of liability insurance with or without supplementary expense coverage therein; (2) any policy or contract of reinsurance; (3) any blanket or group policy of insurance; or (4) life insurance, endowment or annuity contracts, or contracts supplemental thereto which contain only such provisions relating to accident and sickness insurance as (a) provide additional benefits in case of death or dismemberment or loss of sight by accident, or as (b) operate to safeguard such contracts against lapse, or to give a special surrender value or special benefit or an annuity in the event that the insured or annuitant shall become totally and permanently disabled, as defined by the contract or supplemental contract.
 No disability policy shall be delivered or issued for delivery to any person in this territory unless it otherwise complies with this title, and complies with the following: (1) it shall purport to insure only one person, except as to family expense insurance written pursuant to section 883 of this title; (2) the style, arrangement and over-all appearance of the policy shall give no undue prominence to any portion of the text, and every printed portion of the text of the policy and of any endorsements or attached papers shall be plainly printed in light-faced type of a style in general use, the size of which shall be uniform and not less than 10 point with a lowercase unspaced alphabet length not less than 120 point (the text shall include all printed matter except the name and address of the insurer, name or title of the policy, the brief description if any, and caption and subcaptions); (3) the exception and reductions of indemnity shall be set forth in the policy and, other than those contained in sections 855 to 878, inclusive, of this title, shall be printed at the insurer's option, either included with the benefit provision to which they apply, or under an appropriate caption such as Exceptions, or Exceptions and reductions, except that if an exception or reduction specifically applies only to a particular benefit of the policy, a statement of such exception or reduction shall be included with the benefit provision to which it applies; (4) each such form, including riders and endorsements, shall be identified by a form number in the lower left-hand corner of the first page thereof; and (5) it shall contain no provision purporting to make any portion of the insurer's charter, rules, constitution, or bylaws a part of the policy unless such portion is set forth in full in the policy, except in the case of the incorporation of, or reference to, a statement of rates or classification of risks, or short-rate table filed with the Commissioner.
 If any policy is issued by a domestic insurer for delivery to a person resident in another territory or state, and if the Commissioner of Insurance or corresponding public official of such other territory or state has advised the Commissioner that any such policy is not subject to approval or disapproval by such official, the Commissioner may by ruling require that such policy meet the applicable standards set forth in this chapter and in chapter 33 of this title.
 Except as provided in section 813 of this title, each such policy delivered or issued for delivery to any person in this territory shall contain the provisions as specified in sections 855866, inclusive, of this title, in the words in which the same appear; except, that the insurer may, at its option, substitute for one or more of such provisions corresponding provisions of different wording approved by the Commissioner which are in each instance not less favorable in any respect to the insured or the beneficiary. Each such provision shall be preceded by the applicable caption shown or, at the insurer's option, by such appropriate individual or group caption or subcaption as the Commissioner may approve.
 There shall be a provision as follows: Entire contract; changes: This policy, including the endorsements and attached papers, if any, constitutes the entire contract of insurance. No change in this policy shall be valid until approved by an executive officer of the insurer and unless such approval be endorsed hereon or attached hereto. No agent has authority to change this policy or to waive any of its provisions.
 There shall be a provision as follows: Time limit on certain defenses: (a) After three years from the date of issue of this policy, no misstatements except fraudulent misstatements made by the applicant in the application for such policy shall be used to void the policy or to deny a claim for loss incurred or disability (as defined in the policy) commencing after the expiration of such three-year period. (1) (The foregoing policy provisions shall not be so construed as to affect any legal requirements for avoidance of a policy or denial of a claim during such initial three-year period, not to limit the application of sections 868872, inclusive, of this title in the event of misstatement with respect to age or occupation or other insurance.) (2) (A policy which the insured has the right to continue in force subject to its terms by the timely payment of premium (a) until at least age 50 or, (b) in the case of a policy issued after age 44, for at least five years from its date of issue, may contain in lieu of the following provision (from which the clause in parentheses may be omitted at the insurer's option) under the caption Incontestable: After this policy has been in force for a period of three years during the lifetime of the insured (excluding any period during which the insured is disabled), it shall become incontestable as to the statements contained in the application.) (b) No claim for loss incurred or disability (as defined in the policy) commencing after three years from the date of issue of this policy shall be reduced or denied on the ground that a disease or physical condition not excluded from coverage by name or specific description effective on the date of loss had existed prior to the effective date of this policy.
 There shall be a provision as follows: Grace period: A grace period of(insert a number not less than 7 for weekly premium policies, 10 for monthly premium policies, and 31 for all other policies) days will be granted for the payment of each premium falling due after the first premium, during which grace period the policy shall continue in force. (A policy which contains a cancellation provision may add, at the end of the above provision: subject to the right of the insurer to cancel in accordance with cancellation provision hereof.) A policy in which the insurer reserves the right to refuse any renewal shall have, at the beginning of the first above provision: Unless not less than five days prior to the premium due date the insurer has delivered to the insured or has mailed to his last address as shown by the records of the insurer written notice of its intention not to renew this policy beyond the period for which the premium has been accepted.
 There shall be a provision as follows: Reinstatement: If any renewal premium be not paid within the time granted the insured for payment, a subsequent acceptance of premium by the insurer or by any agent duly authorized by the insurer to accept such premium, without requiring in connection therewith an application for reinstatement, shall reinstate the policy: Provided, however, That if the insurer or such agent requires an application for reinstatement and issues a conditional receipt for the premium tendered, the policy will be reinstated upon approval of such application by the insurer or, lacking such approval, upon the forty-fifth day following the date of such conditional receipt unless the insurer has previously notified the insured in writing of its disapproval of such application. The reinstated policy shall cover only loss resulting from such accidental injury as may be sustained after the date of reinstatement and loss due to such sickness as may begin more than ten days after such date. In all other respects the insured and the insurer shall have the same rights thereunder as they had under the policy immediately before the due date of the defaulted premium, subject to any provisions endorsed hereon or attached hereto in connection with the reinstatement. Any premium accepted in connection with a reinstatement shall be applied to a period for which premium has not been previously paid, but not to any period more than sixty days prior to the date of reinstatement. (The last sentence of the above provision may be omitted from any policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (1) until at least age 50 or, (2) in the case of a policy issued after age 44, for at least 5 years from its date of issue.)
 There shall be a provision as follows: Notice of claim: Written notice of claim must be given to the insurer within twenty days after the occurrence or commencement of any loss covered by the policy, or as soon thereafter as is reasonably possible. Notice given by or on behalf of the insured or the beneficiary to the insurer at ____ (insert the location of such office as the insurer may designate for the purpose), or to any authorized agent of the insurer, with information sufficient to identify the insured, shall be deemed notice to the insurer. (In a policy providing a loss-of-time benefit which may be payable for at least two years, an insurer may at its option insert the following between the first and second sentences of the above provision: Subject to the qualifications set forth below, if the insured suffers loss of time on account of disability for which indemnity may be payable for at least two years, he shall at least once in every six months after having given notice of claim, give to the insurer notice of continuance of said disability, except in the event of legal incapacity. The period of six months following any filing of proof by the insured or any payment by the insurer on account of such claim or any denial of liability in whole or in part by the insurer shall be excluded in applying this provision. Delay in the giving of such notice shall not impair the insured's right to any indemnity which would otherwise have accrued during the period of six months preceding the date on which such notice is actually given.)
 There shall be a provision as follows: Claim forms: The insurer, upon receipt of a notice of claim, will furnish to the claimant such forms as are usually furnished by it for filing proofs of loss. If such forms are not furnished within fifteen days after the giving of such notice the claimant shall be deemed to have complied with the requirements of this policy as to proof of loss upon submitting, within the time fixed in the policy for filing proofs of loss written proof covering the occurrence, the character and the extent of the loss for which claim is made.
 There shall be a provision as follows: Proofs of loss: Written proof of loss must be furnished to the insurer at its said office in case of claim for loss for which this policy provides any periodic payment contingent upon continuing loss within ninety days after the termination of the period for which the insurer is liable and in case of claim for any other loss within ninety days after the date of such loss. Failure to furnish such proof within the time required shall not invalidate nor reduce any claim if it was not reasonably possible to give proof within such time, provided such proof is furnished as soon as reasonably possible and in no event, except in the absence of legal capacity, later than one year from the time proof is otherwise required.
 There shall be a provision as follows: Time of payment of claims: Indemnities payable under this policy for any loss other than loss for which this policy provides any periodic payment will be paid immediately upon receipt of due written proof of such loss. Subject to due written proof of loss, all accrued indemnities for loss for which this policy provides periodic payment will be paid ____ (insert period for payment which must not be less frequently than monthly) and any balance remaining unpaid upon the termination of liability will be paid immediately upon receipt of due written proof.
 (a) There shall be a provision as follows: Payment of claims: Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the insured. Any other accrued indemnities unpaid at the insured's death may, at the option of the insurer, be paid either to such beneficiary or to such estate. All other indemnities will be payable to the insured. (b) The following provisions, or either of them, may be included with the foregoing provision at the option of the insurer: (1) If any indemnity of this policy shall be payable to the estate of the insured, or to an insured or beneficiary who is a minor or otherwise not competent to give a valid release, the insurer may pay such indemnity, up to an amount not exceeding $  ____(insert an amount which shall not exceed $1000), to any relative by blood or connection by marriage of the insured or beneficiary who is deemed by the insurer to be equitably entitled thereto. Any payment made by the insurer in good faith pursuant to this provision shall fully discharge the insurer to the extent of such payment. (2) Subject to any written direction of the insured in the application or otherwise all or a portion of any indemnities provided by this policy on account of hospital, nursing, medical, or surgical services may, at the insurer's option and unless the insured requests otherwise in writing not later than the time of filing proofs of such loss, be paid directly to the hospital or person rendering such services; but it is not required that the service be rendered by a particular hospital or person.
 There shall be a provision as follows: Physical examinations and autopsy: The insurer at its own expense shall have the right and opportunity to examine the person of the insured when and as often as it may reasonably require during the pendency of a claim hereunder and to make an autopsy in case of death where it is not forbidden by law.
 There shall be a provision as follows: Legal actions: No action at law or in equity shall be brought to recover on this policy prior to the expiration of sixty days after written proof of loss has been furnished in accordance with the requirements of this policy. No such action shall be brought after the expiration of three years after the time written proof of loss is required to be furnished.
 There shall be a provision as follows: Change of beneficiary: Unless the insured makes an irrevocable designation of beneficiary, the right to change of beneficiary is reserved to the insured and the consent of the beneficiary or beneficiaries shall not be requisite to surrender or assignment of this policy or to any change of beneficiary or beneficiaries, or to any other changes in this policy. (The first clause of this provision, relating to the irrevocable designation of beneficiary, may be omitted at the insurer's option.)
 Except as provided in section 813 of this title, no such policy delivered or issued for delivery to any person in this territory shall contain provisions respecting the matters set forth in sections 868878, inclusive, of this title, unless such provisions are in the words in which the same appear in the applicable section; except, that the insurer may, at its option, use in lieu of any such provision a corresponding provision of different wording approved by the Commissioner which is not less favorable in any respect to the insured or the beneficiary. Any such provision contained in the policy shall be preceded individually by the appropriate caption or, at the insurer's option, by such appropriate individual or group caption or subcaption as the Commissioner may approve.
 There may be a provision as follows: Change of occupation: If the insured be injured or contract sickness after having changed his occupation to one classified by the insurer as more hazardous than that stated in this policy or while doing for compensation anything pertaining to an occupation so classified, the insurer will pay only such portion of the indemnities provided in this policy as the premium paid would have purchased at the rates and within the limits fixed by the insurer for such more hazardous occupation. If the insured changes his occupation to one classified by the insurer as less hazardous than that stated in this policy, the insurer, upon receipt of proof of such change of occupation, will reduce the premium rate accordingly, and will return the excess pro rata unearned premium from the date of change of occupation or from the policy anniversary date immediately preceding receipt of such proof, whichever is the more recent. In applying this provision, the classification of occupational risk and the premium rates shall be such as have been last filed by the insurer prior to the occurrence of the loss for which the insurer is liable or prior to date of proof of change in occupation with the government official having supervision of insurance in the jurisdiction where the insured resided at the time this policy was issued; but if such filing was not required, then the classification of occupational risk and the premium rates shall be those last made effective by the insurer in such state prior to the occurrence of the loss or prior to the date of proof of change in occupation.
 There may be a provision as follows: Misstatement of age: If the age of the insured has been misstated, all amounts payable under this policy shall be such as the premium paid would have purchased at the correct age.
 There may be a provision as follows: (1) Other insurance in this insurer: If an accident or sickness or accident and sickness policy or policies previously issued by the insurer to the insured be in force concurrently herewith, making the aggregate indemnity for ____ (insert type of coverage or coverages) in excess of $   ____ (insert maximum limit of indemnity or indemnities) the excess insurance shall be void and all premiums paid for such excess shall be returned to the insured or to his estate.; (2) Or, in lieu thereof, under the same caption: Insurance effective at any one time on the insured under a like policy or policies in this insurer is limited to the one such policy elected by the insured, his beneficiary or his estate, as the case may be, and the insurer will return all premiums paid for all other such policies.
 (a) There may be a provision as follows: Insurance with other insurers: If there be other valid coverage, not with this insurer, providing benefits for the same loss on a provision of service basis or on an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability under any expense incurred coverage of this policy shall be for such proportion of the loss as the amount which would otherwise have been payable hereunder plus the total of the like amounts under all such other valid coverages for the same loss of which this insurer had notice bears to the total like amounts under all valid coverages for such loss, and for the return of such portion of the premiums paid as shall exceed the pro rata portion for the amount so determined. For the purpose of applying this provision when other coverage is on a provision of service basis, the like amount of such other coverage shall be taken as the amount which the services rendered would have cost in the absence of such coverage. (b) If the foregoing policy provision is included in a policy which also contains the policy provision set out in section 872 of this title, there shall be added to the caption of the foregoing provision the phrase ____ expense incurred benefits. The insurer may, at its option, include in this provision a definition of other valid coverage, approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities of this territory or any state of the United States or any province of Canada, and by hospital or medical service organizations, and to any other coverage the inclusion of which may be approved by the Commissioner. In the absence of such definition such term shall not include group insurance, automobile medical payments insurance, or coverage provided by hospital or medical service organizations or by union welfare plans or employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any Workers' Compensation Administration or employer's liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no third party liability coverage shall be included as other valid coverage.
 (a) There may be a provision as follows: Insurance with other insurers: If there be other valid coverage, not with this insurer, providing benefits for the same loss on other than an expense incurred basis and of which this insurer has not been given written notice prior to the occurrence or commencement of loss, the only liability for such benefits under this policy shall be for such proportion of the indemnities otherwise provided hereunder for such loss as the like indemnities of which the insurer had notice (including the indemnities under this policy) bear to the total amount of all like indemnities for such loss, and for the return of such portion of the premium paid as shall exceed the pro rata portion for the indemnities thus determined. (b) If the foregoing policy provision is included in a policy which also contains the policy provision set out in section 871 of this title, there shall be added to the caption of the foregoing provision the phrase ____ other benefits. The insurer may, at its option, include in the provision a definition of other valid coverage, approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by organizations subject to regulation by insurance law or by insurance authorities in this territory or any other state of the United States or any province of Canada, and to any other coverage the inclusion of which may be approved by the Commissioner. In the absence of such definition such term shall not include group insurance, or benefits provided by union welfare plans or by employer or employee benefit organizations. For the purpose of applying the foregoing policy provision with respect to any insured, any amount of benefit provided for such insured pursuant to any compulsory benefit statute (including any Workers' Compensation Administration or employer's liability statute) whether provided by a governmental agency or otherwise shall in all cases be deemed to be other valid coverage of which the insurer has had notice. In applying the foregoing policy provision no third party liability coverage shall be included as other valid coverage.
 (a) There may be a provision as follows: Relation of earnings to insurance: If the total monthly amount of loss of time benefits promised for the same loss under all valid loss of time coverage upon the insured, whether payable on a weekly or monthly basis, shall exceed the monthly earnings of the insured at the time disability commenced or his average monthly earnings for the period of two years immediately preceding a disability for which claim is made, whichever is the greater, the insurer will be liable only for such proportionate amount of such benefits under this policy as the amount of such monthly earnings of the insured bears to the total amount of monthly benefits for the same loss under all such coverage upon the insured at the time such disability commences and for the return of such part of the premiums paid during such two years as shall exceed the pro rata amount of the premiums for the benefits actually paid hereunder; but this shall not operate to reduce the total monthly amount of benefits payable under all such coverage upon the insured below the sum of two hundred dollars or the sum of the monthly benefits specified in such coverages, whichever is the lesser, nor shall it operate to reduce benefits other than those payable for loss of time. (b) The foregoing policy provision may be inserted only in a policy which the insured has the right to continue in force subject to its terms by the timely payment of premiums (i) until at least age 50 or, (ii) in the case of a policy issued after age 44, for at least five years from its date of issue. The insurer may, at its option, include in the provision a definition of valid loss of time coverage, approved as to form by the Commissioner, which definition shall be limited in subject matter to coverage provided by governmental agencies or by organizations subject to regulation by insurance law or by insurance authorities of this territory or any state of the United States or any province of Canada, or to any other coverage the inclusion of which may be approved by the Commissioner or any combination of such coverages. In the absence of such definition such term shall not include any coverage provided for such insured pursuant to any compulsory benefit statute (including any Workers' Compensation Administration or employer's liability statute), or benefits provided by union welfare plans or by employer or employee benefit organizations.
 There may be a provision as follows: Unpaid premium: Upon the payment of a claim under this policy, any premium then due and unpaid or covered by any note or written order may be deducted therefrom.
 There may be a provision as follows: Cancellation: The insurer may cancel this policy at any time by written notice delivered to the insured, or mailed to his last address as shown by the records of the insurer, stating when, not less than five days thereafter, such cancellation shall be effective; and after the policy has been continued beyond its original term the insured may cancel this policy at any time by written notice delivered or mailed to the insurer, effective upon receipt or on such later date as may be specified in such notice. In the event of cancellation, the insurer will return promptly the unearned portion of any premium paid. If the insured cancels, the earned premium shall be computed by the use of short-rate table last filed with the government official having supervision of insurance in the territory or state where the insured resided when the policy was issued. If the insurer cancels, the earned premium shall be computed pro rata. Cancellation shall be without prejudice to any claim originating prior to the effective date of cancellation.
 There may be a provision as follows: Conformity with statutes: Any provision of this policy which, on its effective date, is in conflict with the statutes of the territory or state in which the insured resides on such date is hereby amended to conform to the minimum requirements of such statutes.
 There may be a provision as follows: Illegal occupation: The insurer shall not be liable for any loss to which a contributing cause was the insured's commission of or attempt to commit a felony or to which a contributing cause was the insured's being engaged in an illegal occupation.
 There may be a provision as follows: Intoxicants and narcotics: The insurer shall not be liable for any loss sustained or contracted in consequence of the insured's being intoxicated or under the influence of any narcotic unless administered on the advice of a physician.
 The provisions which are the subject of sections 855878, inclusive, of this title, or any corresponding provisions which are used in lieu thereof in accordance with such sections, shall be printed in the consecutive order of the provisions in such sections or, at the insurer's option, any such provision may appear as a unit in any part of the policy, with other provisions to which it may be logically related, provided the resulting policy shall not be in whole or in part unintelligible, uncertain, ambiguous, abstruse, or likely to mislead a person to whom the policy is offered, delivered or issued.
 The word insured, as used in this chapter, shall not be construed as preventing a person other than the insured with a proper insurable interest from making application for and owning a policy covering the insured or from being entitled under such a policy to any indemnities, benefits and rights provided therein.
 (a) Any policy of a foreign or alien insurer, when delivered or issued for delivery to any person in this territory, may contain any provision which is not less favorable to the insured or to the beneficiary than the provisions of this chapter and which is prescribed or required by the laws of the jurisdiction under which the insurer is organized. (b) Any policy of a domestic insurer may, when issued for delivery in any other jurisdiction, contain any provision permitted or required by the laws of such other jurisdiction.
 If any such policy contains a provision establishing, as an age limit or otherwise, a date after which the coverage provided by the policy will not be effective, and if such date falls within a period for which premium is accepted by the insurer or if the insurer accepts a premium after such date, the coverage provided by the policy will continue in force subject to any right of cancellation until the end of the period for which premium has been accepted. In the event the age of the insured has been misstated and if, according to the correct age of the insured, the coverage provided by the policy would not have become effective, or would have ceased prior to the acceptance of such premium or premiums, then the liability of the insurer shall be limited to the refund, upon request, of all premiums paid for the period not covered by the policy.
 (a) Family expense disability insurance is that covering members of any one family including one or both spouses and dependents provided under a master policy issued to the head of the family. (b) Any authorized disability insurer may issue family expense disability insurance. (c) A disability policy providing such family expense coverage, in addition to other provisions required to be contained in disability policies under this chapter, shall contain the following provisions: (1) a provision that the policy and the application of the head of the family shall constitute the entire contract between the parties. (2) a provision that to the family group originally insured shall, on notice to the insurer, be added from time to time all new members of the family as they become eligible for insurance in such family group, and on the payment of such additional premium as may be required therefor.
 (a) Disability insurance on a franchise plan is that issued to (1) five or more employees of a common employer; or (2) ten or more members of any bona fide trade or professional association or labor union, which association or union was formed and exists for purposes other than that of obtaining insurance, and under which such employees or members, with or without their dependents, are issued individual policies which may vary as to amounts and kinds of coverage as applied for, under an arrangement whereby the premiums on the policies are to be paid to the insurer periodically by the employer, with or without payroll deductions, or by the association, or by some designated employee or officer of the association acting on behalf of the employer or association members. (b) An insurer may charge different rates, provide different benefits, or employ different underwriting procedure for individuals insured under a franchise plan, if such rates, benefits, or procedures as used do not discriminate as between franchise plans, and do not discriminate unfairly as between individuals insured under franchise plans and individuals otherwise insured under similar policies.
 A disability insurance contract which provides a reasonable amount of disability indemnity for both accidental injuries and sickness, other than a contract of group or blanket insurance, may provide a benefit in amount not exceeding $200 payable in event of death from any causes. Such benefit shall be deemed to constitute the payment of disability benefits beyond the period for which otherwise payable, and shall not be deemed to constitute life insurance.
 The reinstatement of any policy of noncancellable disability insurance delivered or issued for delivery in this territory after the effective date of this title shall be contestable only on account of fraud or misrepresentation of facts material to the reinstatement and only for the same period following reinstatement as is provided in the policy with respect to the contestability thereof after the original issuance of the policy.
 Group disability insurance is that form of disability insurance provided by a master policy issued to an employer, to a trustee appointed by an employer or employers, or to an association of employers formed for purposes other than obtaining such insurance, covering, with or without their dependents, the employees, or specified categories of the employees, of such employers or their subsidiaries of affiliates, or issued to a labor union, or to an association of employees formed for purposes other than obtaining such insurance, covering, with or without their dependents, the members, or specified categories of the members, of the labor union or association, or issued pursuant to section 903 of this title. Group disability insurance shall also include such other groups as qualify for group life insurance under the provisions of this title.
 The term employees as used in this chapter shall be deemed to include as employees of a single employer, the compensated officers, managers, and employees of the employer and of subsidiary or affiliated corporations of a corporation employer, and the individual proprietors, partners, and employees of individuals and firms of which the business is controlled by the insured employer through stock ownership, contract or otherwise. The term employer as used in this chapter shall be deemed to include any municipal corporation or governmental unit, agency or department thereof as well as private individuals, firms, corporations and other persons.
 A policy of group disability insurance may be issued to a corporation, as policyholder, existing primarily for the purpose of assisting individuals who are its subscribers in securing medical, hospital, dental, and other health care services for themselves and their dependents, covering all and not less than 500 such subscribers and dependents, with respect only to medical, hospital, dental, and other health care services.
 (a) Any policy or contract or disability insurance which conforms with the description and complies with the requirements contained in one of the following paragraphs of this subsection shall be deemed a blanket disability insurance policy: (1) a policy issued to any common carrier of passengers, which carrier shall be deemed the policyholder, covering a group defined as all persons who may become such passengers, and whereby such passengers shall be insured against loss or damage resulting from death or bodily injury either while, or as a result of, being such passengers; (2) a policy issued in the name of any volunteer fire department, first aid or ambulance squad or other such volunteer organization, which shall be deemed the policyholder, and covering all the members of any such organization against loss from accidents resulting from hazards incidental to duties in connection with such organizations; (3) a policy issued in the name of any established organization whether incorporated or not, having community recognition and operated for the welfare of the community and its members and not for profit, which shall be deemed the policyholder, and covering all volunteer workers who serve without pecuniary compensation and the members of the organization, against loss from accidents occurring while engaged in the actual performance of duties on behalf of such organization or in the activities thereof; (4) a policy issued to an employer, who shall be deemed the policyholder, covering any group of employees defined by reference to exceptional hazards incident to such employment, insuring such employees against death or bodily injury resulting while, or from, being exposed to such exceptional hazards; (5) a policy covering students or employees issued to a college, school, or other institution of learning or to the head or principal thereof, who or which shall be deemed the policyholder; or (6) a policy or contract issued to any other substantially similar group, which, in the Commissioner's discretion, may be subject to the insurance of a blanket disability policy or contract. (b) Nothing contained in this section shall be deemed to affect the liability of policyholders for the death of, or injury to, any such members of such group. (c) Individual applications shall not be required from individuals covered under a blanket disability insurance contract.
 Every policy of group or blanket disability insurance shall contain in substance the provisions as set forth in sections 906909 and section 913, inclusive, of this title, or provisions which in the opinion of the Commissioner are more favorable to the individuals insured, or at least as favorable to such individuals and more favorable to the policyholder. No such policy of group or blanket disability insurance shall contain any provision relative to notice or proof of loss, or to the time for paying benefits, or to the time within which suit may be brought upon the policy, which in the opinion of the Commissioner is less favorable to the individuals insured than would be permitted by the standard provisions required for individual disability insurance policies.
 There shall be a provision that a copy of the application, if any, of the policyholder shall be attached to the policy when issued; that all statements made by the policyholder or by the individuals insured shall in the absence of fraud be deemed representations and not warranties, and that no statement made by any individual insured shall be used in any contest unless a copy of the instrument containing the statement is or has been furnished to such individual or to his beneficiary, if any.
 There shall be a provision that all premiums due under the policy shall be remitted by the employer or employers of the persons insured, by the policyholder, or by some other designated person acting on behalf of the association or group insured, to the insurer on or before the due date thereof with such period of grace as may be specified therein.
 In group disability insurance policies there shall be a provision that the insurer shall issue to the employer, the policyholder, or other person or association in whose name such policy is issued, for delivery to each insured employee or member, a certificate setting forth in summary form a statement of the essential features of the insurance coverage, and to whom the benefits thereunder are payable described by name, relationship, or reference to the insurance records of the policyholder or insurer. If family members are insured, only one certificate need be issued for each family. This section shall not apply to blanket disability insurance policies.
 There shall be a provision specifying the ages, if any there be, to which the insurance provided therein shall be limited, and the ages, if any there be, for which additional restrictions are placed on benefits, and the additional restrictions placed on the benefits at such ages.
 There may be a provision that the insurer shall have the right and opportunity to examine the person of the insured employee, member or dependent when and so often as it may reasonably require during the pendency of claim under the policy and also the right and opportunity to make an autopsy in case of death where it is not prohibited by law.
 (a) The benefits payable under any policy or contract of group or blanket disability insurance shall be payable to the employee or other insured member of the group or to the beneficiary designated by him, other than the policyholder, employer or the association or any officer thereof as such, subject to provisions of the policy in the event there is no designated beneficiary as to all or any part of any sum payable at the death of the individual insured. (b) The policy may provide that any hospital, medical, or surgical benefits thereunder may be made payable jointly to the insured employee or member and the person furnishing such hospital, medical, or surgical services.
 Any contract of group disability insurance may provide for the readjustment of the rate of premium based on the experience thereunder at the end of the first year or of any subsequent year of insurance thereunder, and such readjustment may be made retroactive only for such policy year. Any refund under any plan for readjustment of the rate of premium based on the experience under group policies heretofore or hereafter issued, and any dividend paid under such policies may be used to reduce the employer's share of the cost of the coverage, except that if the aggregate refunds or dividends under such group policy and any other group policy or contract issued to the policyholder exceed the aggregate contributions of the employer toward the cost of the coverages, such excess shall be applied by the policyholder for the sole benefit of insured employees.
 Every policy of group disability insurance issued or subsequently renewed by agreement between the insurer and the policyholder issued under the provisions of this chapter shall contain a provision such that in the event that the insured employee leaves the group covered by such insurance because his employment is terminated due to a plant closing as defined in Title 24, section 471, Virgin Islands Code, the coverage originally provided by such plan for the insured employee, his spouse and dependents shall be continued for a period of 90 days thereafter, unless during such period, the insured employee shall otherwise be entitled to similar benefits. Such insured employee and such employer or policyholder shall be responsible for the payment of their respective shares of the premium due as provided in said group plan. The employer or policyholder shall notify the insured employee in writing of their eligibility to participate in such plan. The insured employee may elect to continue participation in such plan by giving written notice thereof to the employer or the policyholder. The insured employee whose employment has been terminated shall be responsible for the payment of whatever part of the premium, if any, normally paid by such insured employee as originally provided in such plan, throughout the 90 day period. If applicable, after timely receipt of the premium payment from the individual, if the employer or policyholder fails to make payment to the insurer with the result that the coverage is terminated, the employer or policyholder shall be liable for benefits to the same, to such extent as the insurer would have been liable if coverage had not been terminated. Timely receipt of payment shall mean the employer's or the policyholder's receipt of the premium or applicable portion thereof for extended coverage from such member within the dates or by the date indicated by the employer or policyholder at the time of election of extended coverage. Failure to give notice or to make applicable premium payments shall constitute a waiver of the option to have extended coverage. Notwithstanding the provisions of this section, any contractual agreement arrived at by a collective bargaining process that contains provisions requiring an employer to pay for the continuation of such insurance for employees whose employment is terminated by a plant closing shall supercede the requirements of this section when said contractual agreement provides for at least 90 days continuation of such insurance.
 The provisions of this chapter apply to contracts of life insurance and annuities other than group life insurance, group annuities, and, except sections 976, 977, 983 and 984 of this title, other than industrial life insurance.
 (a) No policy of life insurance other than industrial, group and pure endowments with or without return of premiums or of premiums and interest, shall be delivered or issued for delivery in this territory unless it contains in substance all of the provisions required by sections 953963, inclusive, of this title. This provision shall not apply to annuity contracts. (b) Any of such provisions or portions thereof not applicable to single premium or term policies shall to that extent not be incorporated therein.
 There shall be a provision that the insured is entitled to a grace period of one month, but not less than 30 days, within which the payment of any premium after the first may be made, subject at the option of the insurer to an interest charge not in excess of 6 percent per annum for the number of days of grace elapsing before the payment of the premium, during which period of grace the policy shall continue in force, but in case the policy becomes a claim during the grace period before the overdue premium is paid, or the deferred premiums of the current policy year, if any, are paid, the amount of such premium or premiums with interest thereon may be deducted in any settlement under the policy.
 In all such policies other than those containing a clause making the policy incontestable from date of issue, there shall be a provision that the policy and the application therefor, if a copy thereof has been endorsed upon or attached to the policy at issue and made a part thereof, shall constitute the entire contract between the parties, and that all statements made by the applicant or by the insured, shall, in the absence of fraud, be deemed representations and not warranties.
 There shall be a provision that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue, except for nonpayment of premiums and except, at the option of the insurer, as to provisions relative to benefits in event of total and permanent disability and as to provisions which grant additional insurance specifically against accidental death.
 There shall be a provision that if it is found that the age of the insured (or the age of any other individual considered in determining the premium) has been misstated, the amount payable under the policy shall be such as the premium would have purchased at the correct age or ages, according to the insurer's rate at date of issue.
 (a) In all policies which provide for participation in the insurer's surplus, there shall be a provision that the policy shall so participate annually in the insurer's divisible surplus as apportioned by the insurer, beginning not later than the end of the third policy year. Any policy containing provision for annual participation beginning at the end of the first policy year, may also provide that each dividend shall be paid subject to the payment of the premiums for the next ensuing year. The insured under any annual dividend policy shall have the right each year to have the current dividend arising from such participation either paid in cash, or applied in accordance with such other dividend option as may be specified in the policy and elected by the insured. The policy shall further provide which of the options shall be effective if the insured shall fail to notify the insurer in writing of his election within the period of grace allowed for the payment of premium. (b) This section shall not apply to paid-up nonforfeiture benefits nor paid-up policies issued on default in payment of premiums.
 (a) Except on extended term insurance policies and on policies with no cash surrender value, there shall be a provision that after three full years' premiums have been paid thereon, the insurer at any time, while the policy is in force, will advance, on proper assignment or pledge of the policy and on the sole security thereof, at a specified rate of interest not exceeding six percent (6%) per annum, or if payable in advance such interest shall not exceed the rate of five and seven tenths percent (5.7%), a sum to be determined as follows: (1) if such policy is issued prior to the operative date of section 984 of this title, as therein specified, the sum, including any interest paid in advance but not beyond the end of the current policy year, shall be equal to, or, at the option of the owner of the policy less than, the reserve at the end of the current policy year on the policy and on any dividend additions thereto, less a sum not more than 2 12 percent of the amount insured by the policy and of any dividend additions thereto. The policy may contain a provision by which the insurer reserves the right to defer the making of the loan, except when made to pay premiums, for a period not exceeding six months after the date of application therefor; or (2) if such policy is issued on or after such operative date, the sum, including any interest to the end of the current policy year shall not exceed the cash surrender value at the end of the current policy year, as required by section 984 of this title. (b) Such policy shall further provide that the insurer may deduct from such loan value any existing indebtedness on the policy (unless such indebtedness has already been deducted in determining the cash surrender value) and any unpaid balance of the premium for the current policy year, and that if the loan is made or repaid on a date other than the anniversary of the policy, the insurer shall be entitled to interest for the portion of the current policy year at the rate of interest specified in the policy. (c) Such policy may further provide that if the interest on the loan is not paid when due, it shall be added to the existing indebtedness and shall bear interest at the same rate, and that if and when the total indebtedness on the policy, including interest due or accruing, equals or exceeds the amount of the loan value thereof which would otherwise exist at such time, the policy shall terminate in full settlement of such indebtedness and become void; except, that it shall be stipulated in the policy that no such termination shall be effective prior to the expiration of at least 30 days after notice of the pendency of the termination was mailed by the insurer to the insured and the assignee, if any, at their respective addresses last of record with the insurer. (d) The insurer shall provide in any policy issued on or after the operative date of section 984 of this title that the making of any loan, other than a loan to pay premiums, may be deferred for not exceeding six months after the application for the loan has been received by it.
 There shall be a table showing in figures the loan value, if any, and any options available under the policy each year upon default in premium payments, during at least the first 20 years of the policy, or for its life if maturity or expiry occurs in less than 20 years.
 There shall be a provision specifying the option to which the policyholder is automatically entitled in the absence of the election of other nonforfeiture options upon default in premium payment after nonforfeiture values become available.
 If the policy provides for payment of its proceeds in installments or as an annuity, a table showing the amount and period of such installments or annuity shall be included in the policy. Except, that if in the judgment of the Commissioner it is not practical to include certain tables in the policy, the requirements of this section may be met as to such policy by the insurer filing such tables with the Commissioner.
 There shall be a provision that the policy may be reinstated at any time within three years after the date of default in the payment of any premium, unless the policy has been surrendered for its cash value, or the period of any extended insurance provided by the policy has expired, upon evidence of insurability satisfactory to the insurer and the payment of all overdue premiums, and payment (or, within the limits permitted by the then cash values of the policy, reinstatement) of any other indebtedness to the insurer upon the policy with interest as to both premiums and indebtedness at a rate not exceeding 6 percent per annum compounded annually.
 There shall be a provision that when a policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death and surrender of the policy.
 No annuity or pure endowment contract, other than reversionary annuities, or survivorship annuities, or group annuities, shall be delivered or issued for delivery in this territory unless it contains in substance each of the provisions specified in sections 965971, inclusive, of this title. Any of such provisions not applicable to single premium annuities or single premium pure endowment contracts shall not, to that extent, be incorporated therein. This section shall not apply to contracts for deferred annuities included in, or upon the lives of beneficiaries under, life insurance policies.
 In such contracts, there shall be a provision that there shall be a period of grace of one month, but not less than 30 days, within which any stipulated payment to the insurer falling due after the first may be made, subject at the option of the insurer, to an interest charge thereon at a rate to be specified in the contract but not exceeding 6 percent per annum for the number of days of grace elapsing before such payment, during which period of grace, the contract shall continue in full force; but in case a claim arises under the contract on account of death prior to expiration of the period of grace before the overdue payment to the insurer of the deferred payments of the current contract year, if any, are made, the amount of such payments, with interest on any overdue payments, may be deducted from any amount payable under the contract in settlement.
 If any statements, other than those relating to age, sex, and identity, are required as a condition to issuing such an annuity or pure endowment contract, and subject to section 968 of this title, there shall be a provision that the contract shall be incontestable after it has been in force during the lifetime of the person or of each of the persons as to whom such statements are required, for a period of two years from its date of issue, except for nonpayment of stipulated payments to the insurer; and at the option of the insurer, such contract may also except any provisions relative to benefits in the event of total and permanent disability and any provisions which grant insurance specifically against death by accident.
 In such contracts there shall be a provision that the contract shall constitute the entire contract between the parties, or, if a copy of the application is endorsed upon or attached to the contract when issued, a provision that the contract and the application therefor shall constitute the entire contract between the parties.
 In such contracts there shall be a provision that if the age or sex of the person or persons upon whose life or lives the contract is made, or of any of them has been misstated, the amount payable or benefit accruing under the contract shall be such as the stipulated payment or payments to the insurer would have purchased according to the correct age or sex; and that if the insurer shall make or has made any overpayment or overpayments on account of any such misstatement, the amount thereof, with interest at the rate to be specified in the contract but not exceeding 6 percent per annum, may be charged against the current or next succeeding payment or payments to be made by the insurer under the contract.
 If such contract is participating, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the contract.
 Such contracts issued after the operative date of section 984 of this title shall contain (1) a provision that in the event of default in any stipulated payment, the insurer will grant a paid-up nonforfeiture benefit on a plan stipulated in the contract, effective as of such date, of such value as is hereinafter specified; (2) a statement of the mortality table and interest rate used in calculating the paid-up nonforfeiture benefit available under the contract; and (3) an explanation of the manner in which the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the contract or any indebtedness to the insurer on the contract.
 In such contracts there shall be a provision that the contract may be reinstated at any time within one year from the date of default in making stipulated payments to the insurer, unless the cash surrender value has been paid, but all overdue stipulated payments and any indebtedness to the insurer on the contract shall be paid or reinstated, with interest thereon at a rate to be specified in the contract but not exceeding 6 percent per annum payable annually, and in cases where applicable, the insurer may also include a requirement of evidence of insurability satisfactory to the insurer.
 No contract for a reversionary annuity shall be delivered or issued for delivery in this territory unless it contains in substance each of the provisions specified in sections 973 and 974 of this title. Any of such provisions not applicable to single premium annuities shall not, to that extent, be incorporated therein. This section shall not apply to group annuities or to annuities included in life insurance policies.
 Any such reversionary annuity contract shall contain the provisions specified in sections 965969, inclusive, of this title, except that under section 965 the insurer may at its option provide for an equitable reduction of the amount of the annuity payments in settlement of an overdue or deferred payment in lieu of providing for a deduction of such payments from an amount payable upon a settlement under the contract.
 In such reversionary annuity contracts there shall be a provision that the contract may be reinstated at any time within three years from the date of default in making stipulated payments to the insurer, upon production of evidence of insurability satisfactory to the insurer, and upon condition that all overdue payments and any indebtedness to the insurer on account of the contract be paid, or, within the limits permitted by the then cash values of the contract, reinstated, with interest as to both payment and indebtedness at a rate to be specified in the contract but not exceeding 6 percent per annum compounded annually.
 The Commissioner may make reasonable rules and regulations concerning the conditions in provisions granting additional benefits in event of the insured's accidental death, or in event the insured becomes totally and permanently disabled, which are a part of or supplemental to life insurance contracts.
 (a) The insurer may in any life insurance policy or annuity or pure endowment contract limit its liability to a determinable amount not less than the full reserve of the policy and of dividend additions thereto in event only of death occurring (1) as a result of war, or any act of war, declared or undeclared, or of service in the military, naval or air forces or in civilian forces auxiliary thereto, or from any cause while a member of any such military, naval or air forces of any country at war, declared or undeclared; (2) as a result of suicide of the insured, whether sane or insane, within two years from date of issue of the policy; or (3) as a result of aviation under conditions specified in the policy. (b) An insurer may specify conditions pertaining to the items of subsection (a) of this section which in the Commissioner's opinion are more favorable to the policyholder.
 The reinstatement of any policy of life insurance or contract of annuity hereafter delivered or issued for delivery in this territory may be contestable on account of fraud or misrepresentation of acts material to the reinstatement only for the same period following reinstatement as the policy provides with respect to contestability after original issuance.
 (a) A life insurer may, under such policy provisions or agreements as have been approved by the Commissioner consistent with this section, contract for and accept premium deposits in addition to the regular premiums specified in the policy, for the purpose of paying future premiums, or to facilitate conversion of the policy, or to increase the benefits thereof. (b) The unused accumulation from such deposits shall be held and accounted for as a premium deposit fund, and the policy or agreement shall provide for the manner of application of the premium deposit fund to the payment of premiums otherwise in default and for the disposition of the fund if it is not sufficient to pay the next premium. (c) Such fund shall (1) be available upon surrender of the policy, in addition to the cash surrender value; (2) be payable upon the insured's death or upon maturity of the policy; and (3) be paid to the insured whenever the cash surrender value together with the premium deposit fund equals or exceeds the amount of insurance provided by the policy, unless the amount of the deposit does not exceed that which may be required to facilitate conversion of the policy to another plan in accordance with its terms. (d) No part of the premium deposit fund shall be paid to the insured during the continuance of the policy except at such times and in such amounts as is specified in the policy or in the deposit agreement.
 A life insurer shall have the power to hold under agreement the proceeds of any policy issued by it, upon such terms and restrictions as to revocation by the policyholder and control by beneficiaries, and with such exemptions from the claims of creditors of beneficiaries other than the policyholder as set forth in the policy or as agreed to in writing by the insurer and the policyholder. Upon maturity of a policy in the event the policyholder has made no such agreement, the insurer shall have the power to hold the proceeds of the policy under an agreement with the beneficiaries. The insurer shall not be required to segregate funds so held but may hold them as part of its general assets.
 In determining the amount due under any life insurance heretofore or hereafter issued, deduction may be made of (1) any unpaid premiums or installments thereof for the current policy year due under the terms of the policy; and (2) the amount of principal and accrued interest of any policy loan or other indebtedness against the policy then remaining unpaid, such principal increased by unpaid interest and compounded as provided in this chapter.
 Upon the death of the insured and except as is otherwise expressly provided by the policy or premium deposit agreement, a life insurer may pay to the surviving spouse, children, beneficiary, or other person other than the insured's estate, appearing to the insurer to be equitably entitled thereto, sums held by it and comprising (1) premiums paid in advance, and which premiums did not fall due prior to such death, or funds held on deposit for the payment of future premiums; (2) dividends theretofore declared on the policy and held by the insurer under the insured's option; and (3) dividends becoming payable on or after the death of the insured.
 No life insurer nor any of its representatives, agents, or affiliates, shall buy, take by assignment other than in connection with policy loans, or otherwise deal or traffic in any rights to dividends existing under participating life insurance policies issued by the insurer.
 No life insurer shall hereafter issue for delivery or deliver in this territory any life insurance policy (1) issued under any plan for the segregation of policyholders into mathematical groups and providing benefits for a surviving policyholder of a group arising out of the death of another policyholder of such group, or under any other similar plan; or (2) providing benefits or values for surviving or continuing policyholders contingent upon the lapse or termination of the policies of other policyholders, whether by death or otherwise.
 (a) Short title: This section constitutes and may be cited as the Standard Nonforfeiture Law of the Virgin Islands. (b) Nonforfeiture provisionsLife: In the case of policies issued on or after the operative date of this section as defined in subsection (i) of this section, no policy of life insurance, except as stated in subsection (h) of this section shall be delivered or issued for delivery in this territory unless it shall contain in substance the following provisions, or corresponding provisions which in the opinion of the Commissioner are at least as favorable to the defaulting or surrendering policyholder: (1) a statement that, in the event of default in any premium payment, the insurer will grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of such due date, of such value as may be hereinafter specified; (2) a statement that, upon surrender of the policy within 60 days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the insurer will pay, in lieu of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be hereinafter specified; (3) a statement that a specified paid-up nonforfeiture benefit shall become effective as specified in the policy unless the person entitled to make such election elects another available option not later than 60 days after the due date of the premium in default; (4) a statement that, if the policy shall have become paid-up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefits which become effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the insurer will pay, upon surrender of the policy within 30 days after any policy anniversary, a cash surrender value of such amount as may be hereinafter specified; (5) a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter, such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the insurer on the policy; and (6) a statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to any provision of this title; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the insurer on the policy if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated therein; a statement that such method of computation has been filed with the insurance supervisory official of the jurisdiction in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which such values and benefits are consecutively shown in the policy. Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. The insurer shall reserve the right to defer the payment of any cash surrender value for a period of thirty days after demand therefor with surrender of the policy. (c) Cash surrender valueLife: Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by subsection (b) of this section, shall be an amount not less than the excess, if any, of the present value, on such anniversary, of the future guaranteed benefits which would have been provided for by the policy including any existing paid-up additions, if there had been no default, over the sum of (1) the then present value of the adjusted premiums as defined in subsections (e) and (f) of this section corresponding to premiums which would have fallen due on and after such anniversary; and (2) the amount of any indebtedness to the insurer on account of or secured by the policy. Any cash surrender value available within 30 days after any policy anniversary under any policy paid-up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefits, whether or not required by subsection (b) of this section, shall be an amount not less than the present value, on such anniversary, of the future guaranteed benefits provided for by the policy including any existing paid-up additions, decreased by any indebtedness to the insurer on account of or secured by the policy. (d) Paid-up nonforfeiture benefitLife: Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary shall be such that its present value as of such anniversary shall be at least equal to the cash surrender value then provided for by the policy, or, if none is provided for, that cash surrender value which would have been required by this section in the absence of the condition that premiums shall have been paid for at least a specified period. (e) The adjusted premiumLife:  (1) Except as provided in paragraph (3) of this subsection, the adjusted premiums for any policy shall be calculated on an annual basis and shall be such uniform percentage of the respective premiums specified in the policy for each policy year, excluding extra premiums on a substandard policy, that the present value, at the date of issue of the policy, of all such adjusted premiums shall be equal to the sum of (A) the then present value of the future guaranteed benefits provided for by the policy; (B) two percent of the amount of insurance, if the insurance be uniform in amount, or of the equivalent uniform amount, as hereinafter defined, if the amount of insurance varies with duration of the policy; (C) forty percent of the adjusted premium for the first policy year; and (D) twenty-five percent of either the adjusted premium for the first policy year or the adjusted premium for a whole life policy of the same uniform or equivalent uniform amount with uniform premiums for the whole of life issued at the same age for the same amount of insurance, whichever is less; Provided, That in applying the percentages specified in items (C) and (D) above, no adjusted premium shall be deemed to exceed 4 percent of the amount of insurance or uniform amount equivalent thereto. Whenever the plan or term of a policy has been changed, either by request of the insured or automatically in accordance with the provisions of the policy, the date of inception of the changed policy for the purposes of determining a nonforfeiture benefit or cash surrender value shall be the date as of which the age of the insured is determined for the purpose of the changed policy. (2) In the case of a policy providing an amount of insurance varying with duration of the policy, the equivalent uniform amount thereof for the purpose of this subsection shall be deemed to be the uniform amount of insurance provided by an otherwise similar policy, containing the same endowment benefit or benefits, if any, issued at the same age and for the same term, the amount of which does not vary with duration and the benefits under which have the same present value at the date of issue as the benefits under the policy; Provided, however, That in the case of a policy, providing a varying amount of insurance issued on the life of a child under age ten, the equivalent uniform amount may be computed as though the amount of insurance provided by the policy prior to the attainment of age ten were the amount provided by such policy at age ten. (3) The adjusted premiums for any policy providing term insurance benefits by rider or supplemental policy provision shall be equal to (i) the adjusted premiums for an otherwise similar policy issued at the same age without such term insurance benefits, increased, during the period for which premiums for such term insurance benefits are payable, by (ii) the adjusted premiums for such term insurance, the foregoing items (i) and (ii) being calculated separately and as specified in paragraphs (1) and (2) of this subsection except that, for the purposes of items (B), (C) and (D) of such paragraph (1), the amount of insurance or equivalent uniform amount of insurance used in the calculation of the adjusted premiums referred to in (ii) hereof shall be equal to the excess of the corresponding amount determined for the entire policy over the amount used in the calculation of the adjusted premiums in (i) hereof. (4) Except as otherwise provided in subsection (f) of this section, all adjusted premiums and present values referred to in this section shall for all policies of ordinary insurance be calculated on the basis of the Commissioners 1941 Standard Ordinary Mortality Table; Provided, That for any category of ordinary insurance issued on female risks on or after July 1, 1957, adjusted premiums and present values may be calculated according to an age not more than three years younger than the actual age of the insured. Such calculations for all policies of industrial insurance shall be made on the basis of the above mentioned 1941 Standard Industrial Mortality Table. All calculations shall be made on the basis of the rate of interest, not exceeding 3 12 percent per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits; Provided, That in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than 130 percent of the rates of mortality according to such applicable table; Provided further, That for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the Commissioner. (f) Ordinary policiesLife:  (1) In the case of ordinary policies issued on or after the operative date of this subsection as provided in paragraph (2) hereof, all adjusted premiums and present values referred to in this section shall be calculated on the basis of the Commissioners 1958 Standard Ordinary Mortality Table and the rate of interest, not exceeding 3 12 percent per annum, specified in the policy for calculating cash surrender values and paid-up nonforfeiture benefits, provided that for any category of ordinary insurance issued on female risks, adjusted premiums and present values may be calculated according to an age not more than three years younger than the actual age of the insured. Provided, however, That in calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1958 Extended Term Insurance Table. Provided, further, That for insurance issued on a substandard basis, the calculation of any such adjusted premiums and present values may be based on such other table of mortality as may be specified by the insurer and approved by the Commissioner. (2) After the effective date of this section, any insurer may file with the Commissioner a written notice of its election to comply with the provisions of this subsection, either as to designated ordinary policies or as to all ordinary policies issued by it, after a specified date before August 31st, 1968. After the filing of such notice, then upon such specified date (which shall be the operative date of this subsection as to such policies for such insurer), this subsection shall become operative with respect to such policies thereafter issued by such insurer. If an insurer makes no such election, or so elects to have this subsection apply as to certain of its ordinary policies only, the operative date of this subsection as to all of the ordinary policies issued by such insurer (other than those policies as to which the insurer has elected an earlier operative date as hereinabove provided) shall be September 30th, 1968. (g) Calculation of valuesLife: Any cash surrender value and any paid-up nonforfeiture benefit, available under the policy in the event of default in a premium payment due at any time other than on the policy anniversary, shall be calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in subsections (c), (d), (e) and (f) of this section may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term additions, shall be not less than the dividends used to provide such additions. Notwithstanding the provisions of subsection (c) of this section, additional benefits payable: (i) in the event of death or dismemberment by accident or accidental means; (ii) in the event of total and permanent disability; (iii) as reversionary annuity or deferred reversionary annuity benefits; (iv) as term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this section would not apply; (v) as term insurance on the life of a child or on the lives of children provided in a policy on the life of a parent of the child or children, if such term insurance expires before a child's age is 26, is uniform in amount after such child's age is one, and has not become paid-up by reason of the death of a parent of the child; and (vi) as other policy benefits additional to life insurance benefits, shall be disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this section, and no such additional benefits shall be required to be included in any paid-up nonforfeiture benefits. (h) Exceptions: This section shall not apply to any reinsurance, group insurance, pure endowment, annuity or reversionary annuity contract, nor to any term policy of uniform amount, or renewal thereof, of 15 years or less expiring before age 66, for which uniform premiums are payable during the entire term of the policy, nor to any term policy of decreasing amount on which each adjusted premium, calculated as specified in subsections (e) and (f) of this section, is less than the adjusted premium so calculated, on such 15 year term policy issued at the same age and for the same initial amount of insurance, nor to any policy which shall be delivered outside this territory through an agent or other representative of the insurer issuing the policy. (i) Operative date: After the effective date of this section, any insurer may file with the Commissioner a written notice of its election to comply with the provisions of this section after a specified date before August 31st, 1968. After the filing of such notice, then upon such specified date (which shall be the operative date for such insurer), this section shall become operative with respect to the policies thereafter issued by such insurer. If an insurer makes no such election, the operative date of this section for such insurer shall be September 30th, 1968.
 (a) Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary is in an amount which does not differ by more than two tenths of one percent of either the amount of insurance at the beginning of each of the first 10 policy years, from the sum of: (1) The greater of zero and the basic cash value hereinafter specified; and (2) The present value of any existing paid-up additions less the amount of any indebtedness to the company under the policy. (b) The basic cash value is equal to present value on the anniversary of the future guaranteed benefits which would have been provided for by the policy excluding any existing paid-up additions and before deduction of any indebtedness to the company if there had been no default less the then present value of the nonforfeiture factors as defined by this subchapter corresponding to premiums which would have fallen due on and after the anniversary. But the effects on the basic cash value of supplemental life insurance or annuity benefits or of family coverage, as described in section 995 are the same as the effects specified in section 995 on the cash surrender values defined in that section. (c) The nonforfeiture factor for each policy year is an amount equal to a percentage of the adjusted premium for the policy year, as defined in section 997. Except as is required by the next succeeding sentence of this section, the percentage: (1) Must be the same percentage for each policy between the second policy anniversary and the later of: (A) The fifth policy anniversary; and (B) The first policy anniversary at which there is available under the policy a cash surrender value in an amount, before including any paid-up additions and before deducting any indebtedness, of at least two tenths of one percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years; and (2) Must be such that no percentage after the latter of the two policy anniversaries specified in paragraph (1) may apply to fewer than five consecutive policy years. But no basic cash value may be less than the value which would be obtained if the adjusted premiums for the policy, as defined in section 997, were substituted for the nonforfeiture factors in the calculation of the basic cash value. (d) All adjusted premiums and present values referred to in this section are calculated for a particular policy on the same morality and interest bases as are used in demonstrating the policys compliance with the other sections of this law. The cash surrender values referred to in this section include any endowment benefits provided for by the policy. (e) Any cash surrender value available other than in the event of default in a premium payment due on a policy anniversary, and the amount of any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment is determined in manners consistent with the manners specified for determining the analogous minimum amounts in sections 994, 995, 996, 997 and 999. The amount of any cash surrender values and of any paid up nonforfeiture benefits granted in connection with additional benefits such as those as section 999(1) through 999(6) must confirm with the principles of this section.
 (a) This subchapter does not apply to any of the following: (1) Reinsurance; (2) Group insurance; (3) Pure endowment; (4) Annuity or reversionary annuity contract; (5) A term policy of uniform amount, which provides no guaranteed nonforfeiture or endowment benefits, or renewal thereof, of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; (6) A term policy of decreasing amount, which provides no guaranteed nonforfeiture or endowment benefits, on which each adjusted premium, calculated as specified in section 997, is less than the adjusted premium so calculated, on a term policy of uniform amount, or renewal thereof, which provides no guaranteed nonforfeiture or endowment benefits, issued at the same age and for the same initial amount of insurance and for a term of 20 years or less expiring before age 71, for which uniform premiums are payable during the entire term of the policy; (7) A policy, which provides no guaranteed nonforfeiture or endowment benefits, for which no cash surrender value, if any, or present value of any paid-up nonforfeiture benefit, at the beginning of any policy year, calculated as specified in sections 995, 996 and 997, exceeds two and one-half percent of the amount of insurance at the beginning of the same policy year; nor (8) Policy which are delivered outside the Virgin Islands through an agent or other representative of the company issuing the policy. (b) For purposes of determining the applicability of this subchapter, the age at expiry for a joint term life insurance policy is the age at expiry of the oldest life.
 Notwithstanding the requirements set forth in chapter 33, section 810 of this title or the requirement of any other provision in the laws of the Virgin Islands, any policy, contract or certificate providing life insurance under any plan must be affirmatively approved by the Commissioner before it can be marketed, issued, delivered, or used in the Virgin Islands.
 This subchapter shall be known as the Standard Nonforfeiture Law of 2018 for Life Insurance.
 The term operative date of the valuation manual means January 1st of the first calendar year that the valuation manual as defined in the Standard Valuation Law of 2018 is effective.
 Notwithstanding any other requirements provided in the subchapter, the Standard Nonforfeiture Law adopted on March 29, 1968 and codified in section 984 of title 22 of the Virgin Islands Code, is applicable to nonforfeiture benefits under all life insurance policies issued before the effective date of this subchapter.
 (a) No life insurance policy issued on or after the effective date of this subchapter, except as stated in section 1000a, shall be delivered or issued for delivery in the Virgin Islands unless it contains in substance the provisions in paragraphs (1) through (6), or corresponding provisions which in the opinion of the Commissioner are at least as favorable to the defaulting or surrendering policyholder as are the minimum requirements specified in this subchapter and are essentially in compliance with section 1000. (1) In the event of default in any premium payment, the company shall grant, upon proper request not later than 60 days after the due date of the premium in default, a paid-up nonforfeiture benefit on a plan stipulated in the policy, effective as of the due date, of such amount as may be specified in this subchapter. Instead of the stipulated paid-up nonforfeiture benefit, the company may substitute, upon proper request not later than 60 days after the due date of the premium in default, an actuarially equivalent alternative paid-up nonforfeiture benefit which provides a greater amount or longer period of death benefits or, if applicable, a greater amount or earlier payment of endowment benefits. (2) Upon surrender of the policy not later than 60 days after the due date of any premium payment in default after premiums have been paid for at least three full years in the case of ordinary insurance or five full years in the case of industrial insurance, the company shall pay, instead of any paid-up nonforfeiture benefit, a cash surrender value of such amount as may be specified in this subchapter. (3) A specified paid-up nonforfeiture benefit becomes effective as specified in the policy unless the person entitled to make the election elects another available option not later than 60 days after the due date of the premium in default. (4) If the policy becomes paid-up by completion of all premium payments or if it is continued under any paid-up nonforfeiture benefit that became effective on or after the third policy anniversary in the case of ordinary insurance or the fifth policy anniversary in the case of industrial insurance, the company shall pay, upon surrender of the policy not later than 30 days after any policy anniversary, a cash surrender value of such amounts as may be specified. (5) For policies that cause, on a basis guaranteed in the policy, unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums other than a change to a new policy, a statement of the mortality table, interest rate and method used in calculating cash surrender values and the paid-up nonforfeiture benefits available under the policy. For all other policies, a statement of the mortality table and interest rate used in calculating the cash surrender values and the paid-up nonforfeiture benefits available under the policy, together with a table showing the cash surrender value, if any, and paid-up nonforfeiture benefit, if any, available under the policy on each policy anniversary either during the first 20 policy years or during the term of the policy, whichever is shorter such values and benefits to be calculated upon the assumption that there are no dividends or paid-up additions credited to the policy and that there is no indebtedness to the company on the policy. (6) A statement that the cash surrender values and the paid-up nonforfeiture benefits available under the policy are not less than the minimum values and benefits required by or pursuant to the insurance law of the state in which the policy is delivered; an explanation of the manner in which the cash surrender values and the paid-up nonforfeiture benefits are altered by the existence of any paid-up additions credited to the policy or any indebtedness to the company on the policy; if a detailed statement of the method of computation of the values and benefits shown in the policy is not stated, a statement that the method of computation has been filed with the insurance supervisory official of the state in which the policy is delivered; and a statement of the method to be used in calculating the cash surrender value and a paid-up nonforfeiture benefit available under the policy on any policy anniversary beyond the last anniversary for which values and benefits are consecutively shown in the policy. (b) Any of the foregoing provisions or portions thereof not applicable by reason of the plan of insurance may, to the extent inapplicable, be omitted from the policy. (c) The company reserves the right to defer the payment of any cash surrender value for a period of six months after demand therefor with surrender of the policy.
 (a) Any cash surrender value available under the policy in the event of default in a premium payment due on any policy anniversary, whether or not required by section 994, is an amount not less than the excess, if any, of the present value, on the anniversary, of the future guaranteed benefits which would have been provided for by the policy, including any existing paid-up additions, if there had been no default, over the sum of: (1) The then present value of the adjusted premiums as defined in section 997, corresponding to premiums which would have fallen due on and after the anniversary; and (2) The amount of any indebtedness to the company on the policy. (b) Any policy issued on or after the operative date of section 997, which provides supplemental life insurance or annuity benefits at the option of the insured and for an identifiable additional premium by rider or supplemental policy provision, the cash surrender value referred to in subsection (a) must be an amount not less than the sum of the cash surrender value for an otherwise similar policy issued at the same age without the rider or supplemental policy provision and the cash surrender value as defined in subsection (a) for a policy which provides only the benefits otherwise provided by such rider or supplemental policy provision. (c) Any family policy issued on or after the operative date of this subchapter, which defines a primary insured and provides term insurance on the life of the spouse of the primary insured expiring before the spouses age 71, the cash surrender value referred to in subsection (a) is for an amount not less than the sum of the cash surrender value for an otherwise similar policy issued at the same age without term insurance on the life of the spouse and the cash surrender value as defined in subsection (a) for a policy which provides only the benefits otherwise provided by term insurance on the life of the spouse. (d) Any cash surrender value available not later than 30 days after any policy anniversary under any policy paid-up by completion of all premium payments or any policy continued under any paid-up nonforfeiture benefit, whether or not required by section 994, is an amount not less than the present value, on the anniversary, of the future guaranteed benefits provided for by the policy, including any existing paid-up additions, decreased by any indebtedness to the company on the policy.
 Any paid-up nonforfeiture benefit available under the policy in the event of default in a premium payment due on any policy anniversary is such that its present value as of the anniversary is at least equal to the cash surrender value then provided for by the policy or, if none is provided for, that cash surrender value which would have been required by this subchapter in the absence of the condition that premiums are paid for at least a specified period.
 (a) This section applies to all policies issued on or after the effective date of this section. Except as provided in section subsection (h), the adjusted premiums for any policy is calculated on an annual basis and must be an uniform percentage of the respective premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments or special hazards and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the date of issue of the policy, of all adjusted premiums is equal to the sum of: (1) The then present value of the future guaranteed benefits provided for by the policy; (2) One percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first ten policy years; and (3) One hundred twenty-five percent of the nonforfeiture net level premium as hereinafter defined. (b) In applying the percentage specified in subsection (a)(3), no nonforfeiture net level premium is considered to exceed four percent of either the amount of insurance, if the insurance be uniform in amount, or the average amount of insurance at the beginning of each of the first 10 policy years. The date of issue of a policy for the purpose of this section is the date which the rated age of the insured is determined. (c) The nonforfeiture net level premium is equal to the present value, at the date of issue of the policy, of the guaranteed benefits provided for by the policy divided by the present value, at the date of issue of the policy, of an annuity of one per annum payable on the date of issue of the policy and on each anniversary of the policy on which a premium falls due. (d) Policies that cause, on a basis guaranteed in the policy, unscheduled changes in benefits or premiums, or which provide an option for changes in benefits or premiums, other than a change to a new policy, the adjusted premiums and present values are initially calculated on the assumption that future benefits and premiums do not change from those stipulated at the date of issue of the policy. At the time of any change in the benefits or premiums, the future adjusted premiums, nonforfeiture net level premiums and present values are recalculated on the assumption that future benefits and premiums do not change from those stipulated by the policy immediately after the change. (e) Except as otherwise provided in subsection (h), the recalculated future adjusted premiums for any policy is the uniform percentage of the respective future premiums specified in the policy for each policy year, excluding amounts payable as extra premiums to cover impairments and special hazards, and also excluding any uniform annual contract charge or policy fee specified in the policy in a statement of the method to be used in calculating the cash surrender values and paid-up nonforfeiture benefits, that the present value, at the time of change to the newly defined benefits or premiums, of all such future adjusted premiums is equal to the excess of: (1) The sum of (A) The then present value of the then future guaranteed benefits provided for by the policy, and (B) The additional expense allowance, if any, over (2) The then cash surrender value, if any, or present value of any paid-up nonforfeiture benefit under this policy. (f) The additional expense allowance, at the time of the change to the newly defined benefits or premiums, is the sum of: (1) One percent of the excess, if positive, of the average amount of insurance at the beginning of each of the first 10 policy years subsequent to the change over the average amount of insurance prior to the change at the beginning of each of the first 10 policy years subsequent to the time of the most recent previous change, or, if there has been no previous change, the date of issue of the policy; and (2) One hundred twenty-five percent of the increase, if positive, in the nonforfeiture net level premium. (g) The recalculated nonforfeiture net level premium is equal to the result obtained by dividing (1) by (2) where (1) Equals the sum of (A) The nonforfeiture net level premium applicable before the change times the present value of an annuity of one per dollar annum payable on each anniversary of the policy on or subsequent to the date of the change on which a premium would have fallen due had the change not occurred, and (B) The present value of the increase in future guaranteed benefits provided for by the policy, and (2) Equals the present value of an annuity of one dollar per annum payable on each anniversary of the policy on or subsequent to the date of change on which a premium falls due. (h) Notwithstanding any other provisions of this section to the contrary, for a policy issued on a substandard basis which provides reduced graded amounts of insurance so that, in each policy year, the policy has the same tabular mortality cost as an otherwise similar policy issued on the standard basis which provides higher uniform amount of insurance, adjusted premiums and present values for the substandard policy may be calculated as if it were issued to provide higher uniform amounts of insurance on the standard basis. (i) All adjusted premiums and present values referred to in this subchapter are calculated for all policies of ordinary insurance on the basis of the Commissioners 1980 Standard Ordinary Mortality Table; or, at the election of the company for any one or more specified plans of life insurance, the Commissioners 1980 Standard Ordinary Mortality Table with Ten-Year Select Mortality Factors. All policies of industrial insurance are calculated on the basis of the Commissioners 1961 Standard Industrial Mortality Table. All policies issued in a particular calendar year are calculated on the basis of a rate of interest not exceeding the nonforfeiture interest rate as defined in this section, for policies issued in that calendar year. But: (1) At the option of the company, calculations for all policies issued in a particular calendar year may be made on the basis of a rate of interest not exceeding the nonforfeiture interest rate, as defined in this section, for policies issued in the immediately preceding calendar year. (2) Under any paid-up nonforfeiture benefit, including any paid-up dividend additions, any cash surrender value available, whether or not required by section 994, are calculated on the basis of the mortality table and rate of interest used in determining the amount of such paid-up nonforfeiture benefit and paid-up dividend additions, if any. (3) A company may calculate the amount of any guaranteed paid-up nonforfeiture benefit including any paid-up additions under the policy on the basis of an interest rate no lower than that specified in the policy for calculating cash surrender values. (4) In calculating the present value of any paid-up term insurance with accompanying pure endowment, if any, offered as a nonforfeiture benefit, the rates of mortality assumed may be not more than those shown in the Commissioners 1980 Extended Term Insurance Table for policies of ordinary insurance and not more than the Commissioners 1961 Industrial Extended Term Insurance Table for policies of industrial insurance. (5) For insurance issued on a substandard basis, the calculation of any adjusted premiums and present values may be based on appropriate modifications of the aforementioned tables. (6) For policies issued before the operative date of the valuation manual, any Commissioners Standard ordinary mortality tables adopted after 1980 by the National Association of Insurance Commissioners that are approved by regulation promulgated by the Commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. (7) For policies issued on or after the operative date of the valuation manual, the valuation manual must provide the Commissioners Standard mortality table for use in determining the minimum nonforfeiture standard that may be submitted for the Commissioners 1980 Standard Ordinary Mortality Table with or without Ten-Year Select Mortality Factors or for the Commissioners 1980 Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners Standard ordinary mortality table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual. (8) For policies issued before the operative date of the valuation manual, any Commissioners Standard Industrial Mortality Tables adopted after 1980 by the National Association of Insurance Commissioners that are approved by regulation promulgated by the Commissioner for use in determining the minimum nonforfeiture standard may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. (9) For policies issued on or after the operative date of the valuation manual, the valuation manual must provide the Commissioners Standard mortality table for use in determining the minimum nonforfeiture standard that may be substituted for the Commissioners 1961 Standard Industrial Mortality Table or the Commissioners 1961 Industrial Extended Term Insurance Table. If the Commissioner approves by regulation any Commissioners Standard Industrial Mortality Table adopted by the National Association of Insurance Commissioners for use in determining the minimum nonforfeiture standard for policies issued on or after the operative date of the valuation manual, then that minimum nonforfeiture standard supersedes the minimum nonforfeiture standard provided by the valuation manual. (j) The nonforfeiture interest rate is defined as follows: (1) For policies issued prior to the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year is equal to one hundred and twenty-five percent of the calendar year statutory valuation interest rate for such policy as defined in the applicable Standard Valuation Law, rounded to the nearer one quarter of one percent, but the nonforfeiture interest rate may not be less than four percent. (2) For policies issued on and after the operative date of the valuation manual, the nonforfeiture interest rate per annum for any policy issued in a particular calendar year is provided by the valuation manual. (k) Notwithstanding any other provision in this Code to the contrary, any refiling of nonforfeiture values or their methods of computation for any previously approved policy form which involves only a change in the interest rate or mortality table used to compute nonforfeiture values does not require refiling of any other provisions of that policy form. (l) After the effective date of this subchapter, any company may file with the Commissioner a written notice of its election to comply with this section after a specified date no more than 90 days after the effective date of this subchapter, which becomes the effective date of this section for the company. If a company makes no election, the effective date of this section for the company is 90 days after the effective date of this subchapter.
 Any plan of life insurance which provides for future premium determination, the amounts of which are to be determined by the insurance company based on estimates of future experience or for any plan of life insurance which is of such a nature that minimum values cannot be determined by the methods described in sections 994, 995, 996 or 997, then: (1) The Commissioner must be satisfied that the benefits provided under the plan are substantially as favorable to policyholders and insureds as the minimum benefits otherwise required by sections 994, 995, 996 or 997; (2) The Commissioner must be satisfied that the benefits and the pattern of premiums of that plan are not such as to mislead prospective policyholders or insureds; and (3) The cash surrender values and paid-up nonforfeiture benefits provided by the plan must not be less than the minimum values and benefits required for the plan computed by a method consistent with the principles of this Standard Nonforfeiture Law for 2018 for Life Insurance, as determined by regulations promulgated by the Commissioner.
 Any cash surrender value and any paid up nonforfeiture benefit, valuable under the policy in the event of default in a premium payment due at any time other than the policy anniversary, are calculated with allowance for the lapse of time and the payment of fractional premiums beyond the last preceding policy anniversary. All values referred to in sections 995, 996, and 997 may be calculated upon the assumption that any death benefit is payable at the end of the policy year of death. The net value of any paid-up additions, other than paid-up term addition may not be less than the amounts used to provide such additions. Notwithstanding section 995, additional benefits payable: (1) In the event of death or dismemberment by accident or accidental means; (2) In the event of total and permanent disability; (3) As reversionary annuity or deferred reversionary annuity benefits; (4) As term insurance benefits provided by a rider or supplemental policy provision to which, if issued as a separate policy, this subchapter would not apply; (5) As term insurance in the life on a child or on the lives of children provided in a policy on the life of a parent of the child, if such term insurance expires before the childs age is twenty-six, is uniform in amount after the childs age is one, and has not become paid-up by reason of the death of a parent of the child; and (6) As other policy benefits additional to life insurance and endowment benefits, and premiums for all such additional benefits, are disregarded in ascertaining cash surrender values and nonforfeiture benefits required by this subchapter, and no such additional benefits are required to be included in any paid-up non-forfeiture benefit.
 There is established within the Office of the Lieutenant Governor, the Division of Alternative Markets and International Reinsurance, which will be supervised by the Superintendent of Alternative Markets (the SAM). The Commissioner of Insurance, with the advice and consent of the Governor, shall appoint the SAM and determine the SAM's compensation. The SAM, with the consent of the Commissioner of Insurance, may appoint such assistants as necessary to perform such duties as the SAM determines. The SAM shall report to the Commissioner of Insurance.
 (a) The SAM has authority to: (1) Regulate the Alternative Market Insurer Business being conducted in or from the Territory; (2) Enforce the Virgin Islands Code Ann. and the Rules and Regulations promulgated thereunder relating to the conduct of the Alternative Market Insurer Business and International Support Businesses; (3) Examine and prepare reports pursuant to Chapter 55 and Chapter 66 of this Title annually on all matters connected with Alternative Market Insurer Businesses and International Support Businesses; (4) Summon or subpoena persons to attend a hearing or to testify as a witness; (5) Enforce attendance through the Superior Court of the Virgin Islands, and to compel production of books and evidence relevant to an inquiry necessary or appropriate under this chapter; (6) Require examination of witnesses under oath and to administer oaths; (7) At all reasonable times, have access to and take copies of all books, securities, records, and documents of any Special Purpose Financial Captive Insurance Company, Securitization Entity, insurer, insurance manager, agent, adjuster, or broker that relate to the Alternative Insurance Market or International Reinsurance Business and any officer agent, or person in charge, possession, custody, or control of any of those books, securities, records, or document and to issue fines against any person or entity who refuses or neglects to afford such access; (8) Make an inquiry to any insurer, reinsurer or insurance manager relating to the conduct of its business or its financial affairs and to require such insurer, reinsurer, or insurance manager to submit prompt and explicit answers and to issue fines against any person who or entity that fails or refuses to provide such information and to suspend the license of the person or entity; (9) Issue licenses and certificates of Exempt International Company benefits and tax incentive benefits in accordance with Virgin Islands Code, Chapter 55 and Chapter 66 of this title and chapter 14 of title 13, as it relates to exempt international insurer; (10) Enter into Memoranda of Understanding with other relevant Virgin Islands Government agencies, departments, and divisions for processing of documents needed to complete the licensing process and to facilitate granting and contracting for tax benefits provided to any International Insurance Company as provided in Virgin Islands Code, Chapters 55 and 66; and (11) Appoint with the consent of the Commissioner of Insurance, an advisory board to review issues that may arise in the Alternative Markets Insurer Business and to assist in evaluating the functioning of the program and to review applications for licenses which may be issued to Alternative Markets Insurers. (b) The SAM, or any of the SAM's employees, must not directly or indirectly be: (1) A shareholder, member, manager, or partner in any company or business entity that is licensed by the SAM as an Alternative Markets Insurer; or (2) A shareholder, member, manager, or partner in a company or business entity that is authorized under this title to act as an International Insurer Support Business. (c) The SAM or any of the SAM's employees who has a conflict of interest as defined in subsection (b) of this section, must recuse himself from addressing any such matter before the Office of the Insurance Commissioner, Division of Alternative Markets and International Reinsurance.
 The SAM shall keep the following registers: (a) A register of all licenses issued to insurers and reinsurers and Securitization Entities under this Title, in which must appear: (1) The name of the insurer or reinsurer or Securitization Entity; (2) The address of the insurer or reinsurer's or Securitization Entity's principal office within the Territory; (3) The address of the insurer or reinsurer's or Securitization Entity's principal office outside the Territory; (4) The details of the insurance or reinsurance or Securitization Entity's business, including the classes of insurance and reinsurance for which the insurer or reinsurer or Securitization Entity is licensed; and (5) Any other information the SAM may consider necessary or appropriate to keep for purposes of this Title. (b) A register of all licenses issued under this title to International Insurance Support Businesses in which must appear the names and addresses of the insurers and reinsurers for whom they are authorized to act. (c) A register of the names and addresses of all directors and officers of every insurer and reinsurer licensed under Chapter 55 and of every Securitized Entity licensed under Chapter 66. (d) A register of all actuaries and auditors approved by the SAM to provide actuary or audit services under Chapter 55 and Chapter 66.
 (a) There is established in the Treasury of the Virgin Islands a special account known as The Alternative Market and International Reinsurance Revolving Fund for the purpose of providing the financial means for the SAM to administer Chapters 55 and 66 and for reasonable expenses incurred in promoting the captive insurance and asset securitization and insurance securitization industries in the Territory. (b) The fund consists of all fees, fines, and other sums collected by the SAM under this chapter and Chapter 55 and Chapter 66 as well as sums appropriated thereto from time to time from the Legislature. All funds deposited in the fund remain available until expended. The SAM, the Commissioner of Insurance, and the Commissioner's designee are the certifying officers for expenditures from the Fund. (c) The SAM shall deposit into the fund: (1) All application fees, license fees renewal fees, and assessments collected by the SAM under this Chapter and related Chapters 55 and 66; and (2) All administrative penalties and fines. (d) All payments from the Fund for the hiring, training, maintenance of staff and associated expenses, including contractual services as necessary, may be disbursed from the Fund only upon requests issued by the SAM, after receipt of proper documentation regarding services rendered and expenses incurred or to be incurred. (e) After all administrative expenses and documented expenses as described in subsection (d) of this section are met, the remaining funds shall be disbursed annually and equally to the Juan Francisco Luis Hospital on the island of St. Croix and the Roy Lester Schneider Hospital on the island of St. Thomas. The Department of Finance and the Office of Management and Budget shall report to the Legislature on a semiannual basis regarding distributions of the funds and the allocation of funds respectively. (f) The interest on the monies on deposit in the Fund must also be deposited into the Fund.
 The provisions of this chapter apply only to industrial life insurance contracts.
 Industrial life insurance is any life insurance provided by an individual insurance contract issued in face amount of not more than $1,000, under which premiums are payable monthly or more often, and bearing the words industrial policy printed upon the policy as a part of the descriptive matter.
 No policy of industrial life insurance shall be delivered or be issued for delivery in this territory after Sept. 30, 1968, except in compliance with the provisions of this chapter and with other applicable provisions of this title.
 No such policy shall be so issued or delivered unless it contains in substance the provisions as required by this chapter, or provisions which in the opinion of the Commissioner are more favorable to the policyholder.
 There shall be a provision that the insured is entitled to a grace period of four weeks within which the payment of any premium after the first may be made, except that in policies the premiums for which are payable monthly, the period of grace shall be one month but not less than 30 days; and that during the period of grace the policy shall continue in full force, but if during the grace period the policy becomes a claim, then any overdue and unpaid premiums may be deducted from any settlement under the policy.
 There shall be a provision that the policy shall constitute the entire contract between the parties, or, if a copy of the application is endorsed upon or attached to the policy when issued, a provision that the policy and the application therefor shall constitute the entire contract. If the application is so made a part of the contract the policy shall also provide that all statements made by the applicant in such application shall, in the absence of fraud, be deemed to be representations and not warranties.
 There shall be a provision that the policy shall be incontestable after it has been in force during the lifetime of the insured for a period of two years from its date of issue except for nonpayment of premiums, and except, at the option of the insurer, as to supplemental provisions providing benefits for total and permanent disability or specifically for accidental death.
 There shall be a provision that if it is found that the age of the individual insured, or the age of any other individual considered in determining the premium, has been misstated, any amount payable or benefit accruing under the policy shall be such as the premium would have purchased at the correct age or ages.
 If a participating policy, there shall be a provision that the insurer shall annually ascertain and apportion any divisible surplus accruing on the policy, and that dividends arising from such apportionment shall be credited annually beginning not later than the fifth contract year. This provision shall not prohibit the payment of additional dividends on default of payment of premiums or termination of the policy.
 There shall be a provision for nonforfeiture benefits as required by section 984 of this title.
 There shall be a provision for a cash surrender value as required by section 984 of this title.
 There shall be a provision that the policy may be reinstated at any time within two years from the due date of the premium in default unless the cash surrender value has been paid, or the extension period expired, upon the production of evidence of insurability satisfactory to the insurer and the payment of all overdue premiums and payment or reinstatement of any unpaid loans or advances made by the insurer against the policy with interest at a rate not exceeding 6 percent per annum and payable annually.
 There shall be a provision that when the policy becomes a claim by the death of the insured, settlement shall be made upon receipt of due proof of death or after a specified period not exceeding two months after receipt of such proof.
 There shall be a provision that no agent shall have the power or authority to waive, change or alter any of the terms or conditions of any policy; except that, at the option of the insurer, the terms or conditions may be changed by an endorsement signed by a duly authorized officer of the insurer.
 (a) Each such policy shall have a space on the front or back page of the policy for the name of the beneficiary designated with a reservation of the right to designate or change the beneficiary after the issuance of the policy. (b) The policy may also provide that no designation or change of beneficiary shall be binding on the insurer until endorsed on the policy by the insurer, and that the insurer may refuse to endorse the name of any proposed beneficiary who does not appear to the insurer to have an insurable interest in the life of the insured.
 Such a policy may also provide that if the beneficiary designated in the policy does not surrender the policy with due proof of death within the period stated in the policy, which shall not be less than 30 days after the death of the insured, or if the beneficiary is the estate of the insured or is a minor, or dies before the insured or is not legally competent to give a valid release, then the insurer may make payment thereunder to the executor or administrator of the insured, or to any of the insured's relatives by blood or legal adoption or connection by marriage, or to any person appearing to the insurer to be equitably entitled thereto by reason of having been named beneficiary, or by reason of having incurred expense for the maintenance, medical attention or burial of the insured. Such policy may also include a similar provision applicable to any other payment due under the policy.
 In the case of weekly premium policies, there may be a provision that upon proper notice to the insurer while premiums on the policy are not in default beyond the grace period, of the intention to pay future premiums directly to the insurer at its home office or any office designated by the insurer for the purpose, the insurer will, at the end of each period of a year from the due date of the first premium so paid, for which period such premiums are so paid continuously without default beyond the grace period, refund a stated percentage of the premiums in an amount; which fairly represents the savings in collection expense.
 There may be a provision in the case of industrial policies granting to the insured, upon proper written request and upon presentation of evidence of insurability satisfactory to the insurer, the privilege of converting any industrial insurance policy to any form of life insurance with less frequent premium payments regularly issued by the insurer, in accordance with terms and conditions agreed upon with the insurer. The privilege of making such conversion need be granted only if the insurer's industrial policies on the life insured, in force as premium paying insurance and on which conversion is requested, grant benefits in event of death, exclusive of additional accidental death benefits and exclusive of any dividend additions, in an amount not less than the minimum amount of such insurance with less frequent premium payments issued by the insurer at the age of the insured on the plan of industrial or ordinary insurance desired.
 There shall be a title on the face of each such policy briefly describing its form.
 Any of the provisions required by this chapter or any portion thereof which are not applicable to single premium or term policies or to policies issued or granted pursuant to nonforfeiture provisions, shall to that extent not be incorporated therein.
 No such policy shall contain (1) a provision giving the insurer the right to declare the policy void because the insured has had any disease or ailment, whether specified or not, or because the insured has received institutional, hospital, medical or surgical treatment or attention, except a provision which gives the insurer the right to declare the policy void if the insured has, within two years prior to the issuance of the policy, received institutional, hospital, medical or surgical treatment or attention and if the insured or claimant under the policy fails to show that the condition occasioning such treatment or attention was not of a serious nature or was not material to the risk; or (2) a provision giving the insurer the right to declare the policy void because the insured had been rejected for insurance, unless such right be conditioned upon a showing by the insurer, that knowledge of such rejection would have led to a refusal by the insurer to make such contract.
 The insurer may in any such policy limit its liability for the same causes and to the same extent as is provided in section 976 of this title for other life insurance contracts.
 (a) This chapter applies to all life insurance companies and fraternal benefit societies doing business in this territory and to all life insurance companies and fraternal benefit societies that are authorized to reinsure life insurance, annuities or accident and health insurance business in this territory. (b) This chapter must be applied in a manner that allows the appointed actuary to use professional judgment in performing the asset analysis and developing the actuarial opinion and supporting memoranda, consistent with relevant actuarial standards of practice. However, the Commissioner may specify methods of actuarial analysis and actuarial assumptions when, in the Commissioners judgment, these specifications are necessary for an acceptable opinion to be rendered relative to the adequacy of reserves and related items. (c) This chapter is applicable to all annual statements filed with the office of the Commissioner after the effective date of this chapter. A statement of opinion on the adequacy of the reserves and related actuarial items based on an asset adequacy analysis in accordance with section 1035 and a memorandum in support thereof in accordance with section 1036, is required each year.
 (1) Actuarial Opinion means the opinion of an appointed actuary regarding the adequacy of the reserves and related actuarial items based on an asset adequacy analysis in accordance with section 1035 and with applicable Actuarial Standards of Practice. (2) Actuarial Standards Board means the board established by the American Academy of Actuaries to develop and promulgate standards of actuarial practice. (3) Annual statement means that statement required by section 222 of this title which is required to be filed by the company with the office of the Commissioner annually. (4) Appointed actuary means an individual who is appointed or retained in accordance with the requirements set forth in section 1033(c) to provide the actuarial opinion and supporting memorandum as required by section 535 of the Standard Valuation Law of 2018. (5) Asset adequacy analysis means an analysis that meets the standards and other requirements referred to in section 1033(d). (6) Commissioner means the Commissioner of Insurance of the Virgin Islands. (7) Company means a life insurance company, fraternal benefit society or reinsurer subject to the provisions of this chapter. (8) Qualified actuary means an individual who meets the requirements set forth in section 1033(b) of this section.
 (a) Submission of Statement of Actuarial Opinion. There must be included on or attached to page one of the annual statement for each year beginning with the year in which this chapter becomes effective the statement of an appointed actuary, entitled Statement of Actuarial Opinion, setting forth an opinion relating to reserves and related actuarial items held in support of policies and contracts, in accordance with subsection (d) of this section. Upon written request by the company, the Commissioner may grant an extension of the date for submission of the statement of actuarial opinion. (b) Qualified Actuary. A Qualified actuary is an individual who: (1) is a member in good standing of the American Academy of Actuaries; (2) is qualified to sign statements of actuarial opinion for life and health insurance company annual statements in accordance with the American Academy of Actuaries qualification standards for actuaries signing such statements; (3) is familiar with the valuation requirements applicable to life and health insurance companies; (4) has not been found by the Commissioner, or if so found, has subsequently been reinstated as a qualified actuary, following appropriate notice and hearing, to have: (A) violated any provision of, or any obligation imposed by, the Insurance Law or other law in the course of dealings as a qualified actuary; (B) been found guilty of fraudulent or dishonest practices; (C) demonstrated incompetency, lack of cooperation or untrustworthiness to act as a qualified actuary; (D) submitted to the Commissioner during the past five years, pursuant to this chapter, an actuarial opinion or memorandum that the Commissioner rejected, because it did not meet the requirements of this chapter, including standards set by the Actuarial Standards Board; or (E) Resigned or been removed as an actuary within the past 5 years as a result of acts or omissions indicated in any adverse report on examination or as a result of failure to adhere to generally acceptable actuarial standards; and (5) Has failed to notify the Commissioner of any action taken by any commissioner of any other state similar to that under subsection (b)(4). (c) Appointed Actuary. A qualified Actuary must be appointed or retained to prepare the Statement of Actuarial Opinion required by this chapter, either directly by or by the authority of the board of directors through an executive officer of the company other than the qualified actuary. The company shall give the Commissioner timely written notice of the name, title, and, in the case of a consulting actuary, the name of the firm and manner of appointment or retention of each person appointed or retained by the company as an appointed actuary and shall state in the notice that the person meets the requirements set forth in subsection (b). Once notice is furnished, no further notice is required with respect to this person, provided that the company shall give the Commissioner timely written notice if the actuary ceases to be appointed or retained as an appointed actuary or to meet the requirements set forth in subsection (b). If any person appointed or retained as an appointed actuary replaces a previously, appointed actuary, the notice must so state and give the reasons for replacement. (d) Standards for Asset Adequacy Analysis. The asset adequacy analysis required by this chapter must: (1) conform to the Standards of Practice as promulgated from time to time by the Actuarial Standards Board and on any additional standards under this chapter, which are to form the basis of the statement of actuarial opinion in accordance with this chapter; and (2) be based on methods of analysis as are deemed appropriate for such purposes by the Actuarial Standards Board.
 (a) Under authority of section 535 of this title, the statement of actuarial opinion applies to all in-force business on the statement date, whether directly issued or assumed, regardless of when or where issued (e.g., reserves of Exhibits 5, 6 and 7), and claim liabilities in Exhibit 8, Part 1 and equivalent items in the separate account statement or statements. (b) If the appointed actuary determines as the result of asset adequacy analysis that a reserve should be held in addition to the aggregate reserve held by the company and calculated in accordance with methods set forth in the Standard Valuation Law of 2018, the company shall establish the additional reserve. (c) Additional reserves established under subsection (b) and deemed not necessary in subsequent years may be released. Any amounts released must be disclosed in the actuarial opinion for the applicable year. The release of such reserves may not be deemed an adoption of a lower standard of valuation.
 (a) General Description. The statement of actuarial opinion submitted in accordance with this section must consist of: (1) A paragraph identifying the appointed actuary and the actuarys qualifications; (2) A scope paragraph identifying the subjects on which an opinion is to be expressed and describing the scope of the appointed actuarys work, including a tabulation delineating the reserves and related actuarial items that have been analyzed for asset adequacy and the method of analysis and identifying the reserves and related actuarial items covered by the opinion that have not been so analyzed; (3) A reliance paragraph describing those areas, if any, where the appointed actuary has deferred to other experts in developing data, procedures or assumptions such as anticipated cash flows from currently owned assets, including variation in cash flows according to economic scenarios, supported by a statement of each such expert in the form prescribed by subsection (f); (4) An opinion paragraph expressing the appointed actuarys opinion with respect to the adequacy of the supporting assets to mature the liabilities; and one or more additional paragraphs may be needed in individual company cases as follows: (A) If the appointed actuary considers it necessary to state a qualification of his opinion; (B) If the appointed actuary must disclose an inconsistency in the method of analysis or basis of asset allocation used at the prior opinion date with that used for this opinion; (C) If the appointed actuary must disclose whether additional reserves as of the prior opinion date are released as of this opinion date, and the extent of the release; (D) If the appointed actuary chooses to add a paragraph briefly describing the assumptions that form the basis for the actuarial opinion. (b) Recommended Language. The following paragraphs must be included in the statement of actuarial opinion in accordance with this chapter. The language may be modified as needed to meet the circumstances of a particular case, but the appointed actuary shall use language that clearly expresses the actuarys professional judgment. However, the opinion must retain all pertinent aspects of the language provided in this section.(1) The opening paragraph must generally indicate the appointed actuarys relationship to the company and the actuarys qualifications to sign the opinion. For a company actuary, the opening paragraph of the actuarial opinion must include a statement, substantially similar to the following:I, [name] , am [title] of [insurance company name] and a member of the American Academy of Actuaries. I was appointed by, or by the authority of, the Board of Directors of the insurer to render this opinion as stated in the letter to the Commissioner dated [insert date]. I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies.(2) For a consulting actuary, the opening paragraph must include a statement substantially similar to the following:I, [name], a member of the American Academy of Actuaries, am associated with the firm of [name of consulting firm]. I have been appointed by, or by the authority of, the Board of Directors of [name of company] to render this opinion as stated in the letter to the Commissioner dated [insert date]. I meet the Academy qualification standards for rendering the opinion and am familiar with the valuation requirements applicable to life and health insurance companies.(A) The scope paragraph must include a statement substantially similar to the following:I have examined the actuarial assumptions and actuarial methods used in determining reserves and related actuarial items listed below, as shown in the annual statement of the company, as prepared for filing with state/territory regulatory officials, as of [insert date]. Tabulated below are those reserves and related actuarial items which have been subjected to asset adequacy analysis.Asset Adequacy Tested Amounts  Reserves and LiabilitiesStatement ItemFormula Reserves (1)AdditionalActuarialReserves (a) (2)AnalysisMethod (b)OtherAmount (3)Total Amount(1)+(2)+(3) (4)Exhibit 5     A. Life Insurance     B. Annuities     C. SupplementaryContracts InvolvingLife Contingencies     D. Accidental DeathBenefit     E. Disability - Active     F. Disability - Disabled     G. Miscellaneous     Total (Exhibit 5Item 1, Page 3)     Exhibit 6     A Active Life Reserve     B Claim Reserve     Total (Exhibit 6Item 2, Page 3)     Statement ItemFormulaReserves (1)AdditionalActuarialReserves (a) (2)AnalysisMethod (b)OtherAmount (3)TotalAmount(1)+(2)+(3) (4)Exhibit 7     Premium and OtherDeposit Funds(Column 5, Line 14)     Guaranteed InterestContracts(Column 2, Line 14)     Other (Column 6, Line 14)     Supplemental Contractsand Annuities Certain(Column 3, Line 14)     Dividend Accumulationsor Refunds(Column 4, Line 14)     Total Exhibit 7(Column 1, Line 14)     Exhibit 8 Part 1     1 Life (Page 3, Line 4.1)     2 Health (Page 3, Line 4)     Total Exhibit 8, Part 1     Separate Accounts (Page 3 of the AnnualStatement of theSeparate Accounts,Lines 1, 2, 3.1, 3.2, 3.3)     TOTAL RESERVES     IMR (General Account, Page  Line )     (Separate Accounts, Page  Line )     Allocated amount of Asset Valuation Reserves (AVR) (Page  Line )(c)    Net Deferred and Uncollected Premium     (3) the appointed actuary has relied on other experts to develop certain portions of the analysis, the reliance paragraph must include a statement substantially similar to the following:(A) I have relied on [name], [title] for [e.g., anticipated cash flows from currently owned assets, including variations in cash flows according to economic scenarios or certain critical aspects of the analysis performed in conjunction with forming my opinion], as certified in the attached statement. I have reviewed the information relied upon for reasonableness.(B) A statement of reliance on other experts must be accompanied by a statement by each of the experts in the form prescribed by subsection (f).My examination included such review of the actuarial assumptions and actuarial methods and of the underlying basic asset and liability records and such tests of the actuarial calculations as I considered necessary. I also reconciled the underlying basic asset and liability records to [exhibits and schedules listed as applicable]of the companys current annual statement.(4) If the appointed actuary has examined the underlying asset and liability records, the reliance paragraph must include a statement substantially similar to the following:(5) If the appointed actuary has not examined the underlying records, but has relied upon data, such as listings and summaries of policies in force or asset records prepared by the company, the reliance paragraph must include a statement substantially similar to the following:(A) In forming my opinion on [specify types of reserves] I relied upon data prepared by [name and title of company officer certifying in force records or other data] as certified in the attached statements. I evaluated that data for reasonableness and consistency. I also reconciled that data to [exhibits and schedules to be listed as applicable] of the companys current annual statement. In other respects, my examination included review of the actuarial assumptions and actuarial methods used and tests of the calculations I considered necessary.(B) The statement must be accompanied by a statement by each person relied upon in the form prescribed by subsection (f).(6) The opinion paragraph must include a statement substantially similar to the following:In my opinion the reserves and related actuarial values concerning the statement items identified above:(A) are computed in accordance with presently accepted actuarial standards consistently applied and are fairly stated, in accordance with sound actuarial principles;(B) are based on actuarial assumptions that produce reserves at least as great as those called for in any contract provision as to reserve basis and method, and are in accordance with all other contract provisions;(C) meet the requirements of the Insurance Law and regulation of the State of [state of domicile]; and are at least as great as the minimum aggregate amounts required by the state in which this statement is filed;(D) are computed on the basis of assumptions consistent with those used in computing the corresponding items in the annual statement of the preceding year-end (with any exceptions noted below); and(E) include provision for all actuarial reserves and related statement items which ought to be established.(7) The reserves and related items, when considered in light of the assets held by the company with respect to such reserves and related actuarial items including, but not limited to, the investment earnings on the assets, and the considerations anticipated to be received and retained under the policies and contracts, make adequate provision, according to presently accepted actuarial standards of practice, for the anticipated cash flows required by the contractual obligations and related expenses of the company. At the discretion of the Commissioner, this language may be omitted for an opinion filed on behalf of a company doing business only in this territory and in no other state.)(A) The actuarial methods, considerations and analyses used in forming my opinion conform to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis of this statement of opinion. This statement should also include one of the following paragraphs, whichever is applicable:(i) This opinion is updated annually as required by statute. To the best of my knowledge, there have been no material changes from the applicable date of the annual statement to the date of the rendering of this opinion which should be considered in reviewing this opinion; or(ii) The following material changes that occurred between the date of the statement for which this opinion is applicable, and the date of this opinion should be considered in reviewing this opinion: (Describe the change or changes.)(8) The impact of unanticipated events subsequent to the date of this opinion is beyond the scope of this opinion. The analysis of asset adequacy portion of this opinion should be viewed recognizing that the companys future experience may not follow all the assumptions used in the analysis.Signature of Appointed ActuaryAddress of Appointed ActuaryTelephone Number of Appointed ActuaryDate (c) Assumptions for New Issues. The adoption for new issues or new claims or other new liabilities of an actuarial assumption that differs from a corresponding assumption used for prior new issues or new claims or other new liabilities is not a change in actuarial assumptions within the meaning of this section. (d) Adverse Opinions. If the appointed actuary is unable to form an opinion, then the appointed actuary shall refuse to issue a statement of actuarial opinion. If the appointed actuarys opinion is adverse or qualified, then the appointed actuary shall issue an adverse or qualified actuarial opinion explicitly stating the reasons for the opinion. This statement must follow the scope paragraph and precede the opinion paragraph. (e) Reliance on Information Furnished by Other Persons. If the appointed actuary relies on the certification of others on matters concerning the accuracy or completeness of any data underlying the actuarial opinion, or the appropriateness of any other information used by the appointed actuary in forming the actuarial opinion, the actuarial opinion must so indicate the persons the actuary is relying upon and a precise identification of the items subject to reliance. In addition, the persons on whom the appointed actuary relies shall provide a certification that precisely identifies the items on which the person is providing information and a statement as to the accuracy, completeness or reasonableness, as applicable, of the items. This certification must include the signature, title, company, address and telephone number of the person rendering the certification, as well as the date on which it is signed. (f) Alternate Options. (1) As an alternative to the requirements of subsection (b)(6)(C), the Commissioner may make one or more of the following additional approaches available to the opining actuary: (A) A statement that the reserves meet the requirements of the insurance laws and regulations of the State of [state of domicile] and the formal written standards and conditions of this territory for filing an opinion based on the law of the state of domicile. If the Commissioner chooses to allow this alternative, a formal written list of standards and conditions must be made available. If a company chooses to use this alternative, the standards and conditions in effect on July 1 of a calendar year must apply to statements for that calendar year, and they must remain in effect until they are revised or revoked. If no list is available, this alternative is not available. (B) A statement that the reserves meet the requirements of the insurance laws and regulations of the State of [state of domicile] and I have verified that the companys request to file an opinion based on the law of the state of domicile has been approved and that any conditions required by the Commissioner for approval of that request have been met. If the Commissioner chooses to allow this alternative, a formal written statement of such allowance must be issued no later than March 31 of the year it is first effective. It must remain valid until rescinded or modified by the Commissioner. The rescission or modifications must be issued no later than March 31 of the year they are first effective. Subsequent to that statement being issued, if a company chooses to use this alternative, the company shall file a request to do so, along with justification for its use, no later than April 30 of the year of the opinion to be filed. The request must be deemed approved on October 1 of that year if the Commissioner has not denied the request by that date. (C) A statement that the reserves meet the requirements of the insurance laws and regulations of the State of [state of domicile] and I have submitted the required comparison as specified by this territory. (2) If the Commissioner chooses to allow this alternative, a formal written list of products, to be added to the table in paragraph (3) for which the required comparison is provided must be published. If a company chooses to use this alternative, the list in effect on July 1 of a calendar year applies to statements for that calendar year, and it must remain in effect until it is revised or revoked. If no list is available, this alternative is not available. (3) If a company desires to use this alternative, the appointed actuary shall provide a comparison of the gross nationwide reserves held to the gross nationwide reserves that would be held under NAIC codification standards. Gross nationwide reserves are the total reserves calculated for the total company in force business directly sold and assumed, indifferent to the state in which the risk resides, without reduction for reinsurance ceded. The information provided must be at least:(1)(2)(3)(4)(5)ProductTypeDeathBenefit orAccount ValueReservesHeldCodificationReservesCodification Standard           (A) The information listed must include all products identified by either the state of filing or any other states subscribing to this alternative. (B) If there is no codification standard for the type of product or risk in force or if the codification standard does not directly address the type of product or risk in force, the appointed actuary shall provide detailed disclosure of the specific method and assumptions used in determining the reserves held. (C) The comparison provided by the company must be kept confidential to the same extent and under the same conditions as the actuarial memorandum. (4) Notwithstanding anything in this section, the Commissioner may reject an opinion based on the laws and regulations of the state of domicile and require an opinion based on the laws of this Territory. If a company is unable to provide the opinion within 60 days after the request or such other period of time determined by the Commissioner after consultation with the company, the Commissioner may contract an independent actuary at the companys expense to prepare and file the opinion.
 (a) In accordance with section 535 of this title, the appointed actuary shall prepare a memorandum to the company describing the analysis done in support of the appointed actuarys opinion regarding the reserves. The memorandum must be made available for examination by the Commissioner upon the Commissioners request, but must be returned to the company after the examination and may not be considered a record of the Division of Banking, Insurance and Financial Regulation or subject to automatic filing with the Commissioner. (b) In preparing the memorandum, the appointed actuary may rely on, and include as a part of the appointed actuarys own memorandum, memoranda prepared and signed by other actuaries who are qualified within the meaning of section 1033(b), with respect to the areas covered in such memoranda, and so state in their memoranda. (c) If the Commissioner requests a memorandum and no such memorandum exists or if the Commissioner finds that the analysis described in the memorandum fails to meet the standards of the Actuarial Standards Board or the standards and requirements of this chapter, the Commissioner may designate a qualified actuary to review the opinion and prepare the supporting memorandum as is required for review. The reasonable and necessary expense of the independent review must be paid by the company, but must be directed and controlled by the Commissioner. (d) The reviewing actuary shall have the same status as an examiner for purposes of obtaining data from the company and the work papers, and documentation of the reviewing actuary must be retained by the Commissioner. However, any information provided by the company to the reviewing actuary and included in the work papers must be considered as material provided by the company to the Commissioner and must be kept confidential to the same extent as is prescribed by law with respect to other material provided by the company to the Commissioner pursuant to the Standard Valuation Law under this title and any other applicable law governing the submission of these documents. The reviewing actuary may not be an employee of a consulting firm involved with the preparation of any prior memorandum or opinion for the insurer pursuant to this chapter for any one of the current years or the preceding three years. (e) In accordance with section 529 of this title, encoded at 22 V.I.C. chapter 21, subchapter II, the appointed actuary shall prepare a regulatory asset adequacy issues summary, the contents of which are specified in section 1033(d). The regulatory asset adequacy issues summary must be submitted no later than March 15 of the year following the year for which a statement of actuarial opinion based on asset adequacy is required. The regulatory asset adequacy issues summary must be kept confidential to the same extent and under the same conditions as the actuarial memorandum.
 (a) When an actuarial opinion is provided, the memorandum must demonstrate that the analysis has been done in accordance with the standards for asset adequacy referred to in section 1033(d) and any additional standards under this chapter. It must specify: (1) For reserves (A) Product descriptions including market description, underwriting and other aspects of a risk profile and the specific risks the appointed actuary considers significant; (B) Source of liability in force; (C) Reserve method and basis; (D) Investment reserves; (E) Reinsurance arrangements; (F) Identification of any explicit or implied guarantees made by the general account in support of benefits provided through a separate account or under a separate account policy or contract and the methods used by the appointed actuary to provide for the guarantees in the asset adequacy analysis; (G) Documentation of assumptions to test reserves for the following: (i) Lapse rates, both base and excess; (ii) Interest crediting rate strategy; (iii) Mortality; (iv) Policyholder dividend strategy; (v) Competitor or market interest rate; (vi) Annuitization rates; (vii) Commissions and expenses; and (viii) Morbidity. (H) The documentation of the assumptions must be such that an actuary reviewing the actuarial memorandum could form a conclusion as to the reasonableness of the assumptions. (2) For assets: (A) Portfolio descriptions, including a risk profile disclosing the quality, distribution and types of assets; (B) Investment and disinvestment assumptions; (C) Source of asset data; (D) Asset valuation bases; and (E) Documentation of assumptions made for: (i) Default costs; (ii) Bond call function; (iii) Mortgage prepayment function; (iv) Determining market value for assets sold due to disinvestment strategy; and (iv) Determining yield on assets acquired through the investment strategy. (F) The documentation of the assumption must be such that an actuary reviewing the actuarial memorandum could form a conclusion as to the reasonableness of the assumptions. (3) For the analysis basis: (A) Methodology; (B) Rationale for inclusion or exclusion of different blocks of business and how pertinent risks were analyzed; (C) Rationale for degree of rigor in analyzing different blocks of business, including in the rationale the level of materiality that was used in determining how rigorously to analyze different blocks of business; (D) Criteria for determining asset adequacy, including in the criteria the precise basis for determining if assets are adequate to cover reserves under moderately adverse conditions or other conditions as specified in relevant actuarial standards of practice; and (E) Whether the impact of federal income taxes was considered and the method of treating reinsurance in the asset adequacy analysis; (4) Summary of material changes in methods, procedures, or assumptions from prior years asset adequacy analysis; (5) Summary of results; and (6) Conclusions (b) Details of the Regulatory Asset Adequacy Issues Summary (1) The regulatory asset adequacy issues summary must include: (A) Descriptions of the scenarios tested, including whether those scenarios are stochastic or deterministic, and the sensitivity testing done relative to those scenarios. If negative ending surplus results under certain tests in the aggregate, the actuary shall describe those tests and the amount of additional reserve as of the valuation date which, if held, would eliminate the negative aggregate surplus values. Ending surplus values must be determined by either extending the projection period until the in force and associated assets and liabilities at the end of the projection period are immaterial or by adjusting the surplus amount at the end of the projection period by an amount that appropriately estimates the value that can reasonably be expected to arise from the assets and liabilities remaining in force. (B) The extent to which the appointed actuary uses assumptions in the asset adequacy analysis that are materially different than the assumptions used in the previous asset adequacy analysis; (C) The amount of reserves and the identity of the product lines that had been subjected to asset adequacy analysis in the prior opinion but were not subject to analysis for the current opinion; (D) Comments on any interim results that may be of significant concern to the appointed actuary, such as the impact of the insufficiency of assets to support the payment of benefits and expenses and the establishment of statutory reserves during one or more interim periods; (E) The methods used by the actuary to recognize the impact of reinsurance on the companys cash flows, including both assets and liabilities, under each of the scenarios tested; and (F) Whether the actuary has been satisfied that all options whether explicit or embedded, in any asset or liability, including but not limited to those affecting cash flows embedded in fixed income securities and equity-like features in any investments have been appropriately considered in the asset adequacy analysis. (2) The regulatory asset adequacy issues summary must contain the name of the company for which the regulatory asset adequacy issues summary is being supplied and must be signed and dated by the appointed actuary rendering the actuarial opinion. (c) Conformity to Standards of Practice. The memorandum must include a statement: Actuarial methods, considerations and analysis used in the preparation of this memorandum conforms to the appropriate Standards of Practice as promulgated by the Actuarial Standards Board, which standards form the basis for this memorandum. (d) Use of Assets Supporting the Interest Maintenance Reserve and the Asset Valuation Reserve (1) An appropriate allocation of assets in the amount of the interest maintenance reserve, whether positive or negative, must be used in any asset adequacy analysis. Analysis of risks regarding asset default may include an appropriate allocation of assets supporting the asset valuation reserve; these asset valuation reserve assets may not be applied for any other risks with respect to reserve adequacy. Analysis of these and other risks may include assets supporting other mandatory or voluntary reserves available to the extent not used for risk analysis and reserve support. (2) The amount of the assets used for the asset valuation reserve must be disclosed in the table of reserves and liabilities of the opinion and in the memorandum. The method used for selecting particular assets or allocated portions of assets must be disclosed in the memorandum. (e) Documentation. For seven years, the appointed actuary must retain on file sufficient documentation so that it will be possible to determine the procedures followed, the analyses performed, the bases for assumptions and the results obtained.
 (a) Over-insurance shall be deemed to exist if property or an insurable interest therein is insured by one or more insurance contracts against the same hazard in any amount in excess of the cash value of the property or of such interest, as determined as of the effective date of the loss or of any renewal thereof. (b) For the purposes of this section only the term fair value means the cost of replacement less such depreciation as is properly applicable to the subject insured. (c) No person shall knowingly issue, place, procure, or accept any insurance contract which would result in over-insurance of the property or interest therein proposed to be insured, except as is provided in section 1052 of this title. (d) Each violation of this section shall subject the violator to the penalties provided by this title.
 By any contract of insurance of property or of any insurable interest therein, the insurer may in connection with a special provision or endorsement made a part of the policy insure the cost of repair or replacement of such property, if damaged or destroyed by a hazard insured against, and without deduction of depreciation, subject to such reasonable rules and regulations as may be made by the Commissioner.
 Every property and casualty insurance company doing business in the Virgin Islands, unless otherwise exempted by the domiciliary Commissioner of Insurance, shall annually submit the opinion of an Appointed Actuary entitled Statement of Actuarial Opinion. This opinion must be filed in accordance with the appropriate National Association of Insurance Commissioners (NAIC) Property and Casualty Annual Statement Instructions.
 (a) Every property and casualty insurance company domiciled in the Virgin Islands that is required to submit a Statement of Actuarial Opinion shall annually submit an Actuarial Opinion Summary written by the companys appointed actuary, as a document supporting the Actuarial Statement of Actuarial Opinion required by section 1054. The Actuarial Opinion Summary must be filed in accordance with the appropriate NAIC Property and Casualty Annual Statement Instructions. (b) A company licensed but not domiciled in the Virgin Islands shall provide the Actuarial Opinion Summary upon the Commissioners request.
 (a) An Actuarial Report and underlying work papers, as required by the appropriate NAIC Property and Casualty Annual Statement Instructions, must be prepared to support each Actuarial Opinion. (b) If the insurance company fails to provide a supporting Actuarial Report or work papers at the request of the Commissioner, or the Commissioner determines that the supporting Actuarial Report or work papers provided by the insurance company are otherwise unacceptable, the Commissioner may engage a qualified actuary at the expense of the company to review the opinion and the basis for the opinion and prepare the supporting Actuarial Report or work papers.
 The appointed actuary is not liable for damages to any person, other than the insurance company and the Commissioner, for any act, error, omission, decision or conduct with respect to the actuarys opinion, except in cases of fraud or willful misconduct on the part of the appointed actuary.
 (a) The Statement of Actuarial Opinion must be provided with the Annual Statement in accordance with the appropriate NAIC Property and Casualty Annual Statement Instructions and must be treated as a public document. (b)  (1) Documents, materials or other information in the possession or control of the Division of Banking, Insurance and Financial Regulation that are considered an Actuarial Report, work papers, or Actuarial Opinion Summary provided in support of the opinion, and any other material provided by the company to the Commissioner in connection with the Actuarial Report, work papers or Actuarial Opinion Summary, are confidential and privileged, are not subject to examination by the public, are not subject to subpoena, and are not subject to discovery or admissible in evidence in any private civil action. (2) Paragraph (1) of this subsection may not be construed to limit the Commissioners authority to release the documents to the Actuarial Board for Counseling and Discipline, so long as the material is required for the purpose of professional disciplinary proceedings and that the Actuarial Board for Counseling and Discipline establishes procedures satisfactory to the Commissioner for preserving the confidentiality of the documents, nor may this subsection be construed to limit the Commissioners authority to use the documents, materials, or other information in furtherance of any regulatory or legal action brought as part of the Commissioners official duties. (c) Neither the Commissioner nor any person who received documents, materials or other information while acting under the authority of the Commissioner may be permitted or compelled to testify in any private civil action concerning any confidential documents, materials or information subject to subsection (b) of this section. (d) In order to assist in the performance of the Commissioners duties, the Commissioner may: (1) share documents, materials or other information, including the confidential and privileged documents, materials, or other information subject to section 1058(b) with other state, federal and international regulatory agencies, with the NAIC and its affiliates and subsidiaries, and with territorial, state, federal and international law enforcement authorities, if the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information and has the legal authority to maintain confidentiality; (2) receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC and its affiliates and subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions, and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and (3) enter into agreements governing sharing and use of information consistent with this section. (e) No applicable privilege or claim of confidentiality in the documents, materials or information is waived because of disclosure to the Commissioner under this section or as a result of sharing as authorized in (d) of this section.
 For purpose of this section, the following terms have the following meanings: (a) Commissioner shall have the following meaning ascribed to it in 22 V.I.C., section 51; (b) Customer means a person who purchases portable electronics or services; (c) Enrolled Customer means a customer who elects coverage under a portable electronics insurance policy issued to a vendor of portable electronics; (d) Location means any physical location in this Territory or any website, call center site, or similar location directed to residents of this Territory; (e) Portable Electronics means electronic devices that are portable in nature and their accessories; (f)  (1) Portable Electronics Insurance means insurance providing coverage for the repair or replacement of portable electronics which may provide coverage for portable electronics against any one or more of the following causes of loss, loss, theft, inoperability due to mechanical failure, malfunction, damage or other similar causes of loss. Portable electronics Insurance also includes any agreement whereby a person or any legal entity, in exchange for consideration paid, agrees to provide for the future repair, replacement or provision of portable electronics. (2) Portable Electronics Insurance does not include: (A) a service contract or extended warranty providing coverage limited to the repair, replacement or maintenance of property for the operational or structural failure of property due to a defect in materials, workmanship, accidental damage from handling, power surges, or normal wear and tear; (B) a policy of insurance covering a sellers or a manufactures obligations under a warranty; or (C) a homeowners renters, private passenger automobile, commercial multi-peril, or similar policy. (g) Portable Electronic Transactions means: (1) the sale or lease of portable electronics by a vendor to a customer; or (2) the sale of a service related to the use of portable electronics by a vendor to a customer. (h) Supervising Entity means a business entity that is a licensed insurer or insurance producer that is appointed by an insurer to supervise the administration of a portable electronics insurance program; (i) Vendor means a person in the business of engaging in portable electronic transactions directly or indirectly.
 (a) A vendor is required to hold a limited lines license to sell or offer coverage under a policy of portable electronics insurance. (b) A limited lines licenses issued under this subdivision shall authorize any employee or authorized representative of the vendor to sell or offer coverage under a policy of portable electronics insurance to a customer at each location which the vendor engages in portable electronic transactions. (c) The supervising entity shall maintain a registry of vendor locations which are authorized to sell or solicit portable electronics insurance coverage in this territory. Upon request by the director and with ten days notice to the supervising entity, the registry shall be open to inspection and examination by the Commissioner during regular business hours of the supervising entity. (d) Notwithstanding any other provisions of law, a license issued pursuant to this section shall authorize the licensee and its employees or authorized representatives to engage only in those activities that are permitted in this section.
 (a) At every location where portable electronics insurance is offered to customers, brochures or other written materials must be made available to a prospective customer which: (1) disclose that the portable electronics insurance may provide a duplication of coverage already provided by a customers homeowners insurance policy, renters insurance policy or other source of coverage; (2) state that the enrollment by the customer in a portable electronics insurance program is not required in order to purchase or lease portable electronics or services; (3) summarize the material terms of the insurance coverage, including: (A) the identity of the insurer; (B) the identity of the supervising entity; (C) the amount of any applicable deductible and how it is to be paid; (D) benefits of the coverage; and (E) key terms and conditions of coverage such as whether portable electronics may be repaired or replaced with similar make and model reconditioned or non-original manufacture parts or equipment. (4) summarize the process for filing a claim, including a description of how to return portable electronics and the maximum fee applicable in the event the customer fails to comply with any equipment return requirements. (5) state that an enrolled customer may cancel enrollment for coverage under a portable electronics insurance policy at any time and the person paying the premium shall receive a refund of any applicable unearned premium. (b) The written materials required by this section shall not be subject to filing or approval requirements with the Commissioner. (c) Portable electronics insurance may be offered on a month to month or other periodic basis as a group or master commercial inland marine policy issued to a vendor of portable electronics for its enrolled customers. (d) Eligibility and underwriting standards for customers electing to enroll in coverage shall be established for each portable electronics insurance program.
 (a) The employees and authorized representatives of vendors may sell or offer portable electronics insurance to customers and shall not be subject to licensure as an insurance producer under this chapter provided that: (1) the vendor obtains a limited lines license to authorize its employees or authorized representatives to sell or offer portable electronics insurance pursuant to this section; (2) the insurer issuing the portable electronics insurance either directly supervises or appoints a supervising entity to supervise the administration of the program including development of a training program for employees and authorized representatives of the vendors. The training required by this subdivision shall comply with the following: (A) the training shall be delivered to employees and authorized representatives of a vendors who are directly engaged in the activity of selling or offering portable electronics insurance. (B) The training may be provided in electronic form. However, if conducted in an electronic form the supervising entity shall implement a supplemental education program regarding the portable electronics insurance product that is conducted and overseen by licensed employees of the supervising entity; and (C) Each employee and authorized representative shall receive basic instruction about the portable electronics insurance offered to customers and the disclosure required under section 3; and (3) no employee or authorized representative of a vendor of portable electronics shall advertise, represent or otherwise hold himself or herself out as a non limited lines licensed insurance producer. (b) Notwithstanding any other provision of law, employees or authorized representatives of a vendor of portable electronics shall not be compensated based primarily on the number of customers enrolled for portable electronics insurance coverage but may receive compensation for activities under the limited lines license which is incidental to their overall compensation. (c) The charges for portable electronics insurance coverage may be billed and collected by the vendor of portable electronics. Any charge to the enrolled customer for coverage that is included in the cost associated with the purchase or lease of portable electronics or related services shall not be separately itemized on the enrolled customers bill. If the portable electronics insurance coverage is included with the purchase or lease of portable electronics or related services, the vendor shall clearly and conspicuously disclose to the enrolled customer that the portable electronics insurance coverage is included with the portable electronics or related services. Vendors billing and collecting such charges shall not be required to maintain such funds in a segregated account provided that the vendor is authorized by the insurer to hold such funds in an alternative manner and remits such amounts to the supervising entity within sixty (60) days of receipt. All funds received by a vendor from an enrolled customer for the sale of portable electronics insurance shall be considered funds held in trust by the vendor in a fiduciary capacity for the benefit of the insurer. Vendors may receive compensation for billing and collection services.
 (a) If a vendor of portable electronics or its employee or authorized representative violates any provision of this section, the Commissioner may do any of the following: (b) After notice and hearing, impose fines not to exceed $500 per violation or $5,000 in the aggregate for such conduct. (c) After notice and hearing, impose other penalties that the Commissioner deems necessary and reasonable to carry out the purpose of this article, including: (1) Suspending the privilege of transacting portable electronics insurance pursuant to this section at specific business locations where violations have occurred; and (2) Suspending or revoking the ability of individual employees or authorized representatives to act under the license.
 Notwithstanding the provision of law: (1) An insurer may terminate or otherwise change the terms and conditions of a policy of portable electronics insurance only upon providing the policyholder and enrolled customers with at least thirty (30) days notice, as provided below. (2) If the insurer changes the terms and conditions, then the insurer shall provide the vendor policyholder with a revised policy or endorsement and each enrolled customer with a revised certificate, endorsement, updated brochure, or other evidence indicating a change in the terms and conditions has occurred and a summary of material changes. (3) Notwithstanding paragraph 1 of this section, an insurer may terminate an enrolled customers enrollment under a portable electronics insurance policy upon fifteen (15) days notice for discovery of fraud material misrepresentation in obtaining coverage or in the presentation of a claim there under. Such notice may be provided as set forth below. (4) Notwithstanding the paragraph 1 of this section, an insurer may immediately terminate an enrolled customer under a portable electronics insurance policy without prior notice: (A) For nonpayment of premium: (B) If the enrolled customer ceases to have an active service with the vendor of a portable electronics; or (C) If an enrolled customer exhausts the aggregate limit of liability, if any, under the terms of the portable electronics insurance policy and the insurer sends notice of termination to the enrolled customer within thirty (30) calendar days after exhaustion of the limit. However, if notice is not timely sent, enrollment shall continue notwithstanding the aggregate limit of liability until the insurer sends notice of termination to the enrolled customer. (5) Where a portable electronics insurance policy is terminated by a policyholder, the policyholder shall mail or deliver written notice to each enrolled customer advising the enrolled customer of the termination of the policy and the effective date of termination. The written notice shall be mailed or delivered to the enrolled customer at least thirty (30) days prior to the termination as provided below. (6) Whenever notice or correspondence with respect to a policy of portable electronics insurance is required pursuant to this section or is otherwise required by law, it shall be in writing and sent within the notice period, if any, specified with the statute or regulation requiring the notice or correspondence. Notwithstanding any other provision of law, notices and correspondence may be sent either by mail or by electronic means as set forth in this subparagraph. If the notice or correspondence is mailed, it shall be sent to the vendor or portable electronics at the vendors mailing address specified for such purpose and to its affected enrolled customers last known mailing addresses on file with the insurer. The insurer or vendor of portable electronics, as the case may be, shall maintain proof of mailing in a form authorized or accepted by the United States Postal Service or other commercial mail delivery service. If the notice or correspondence is sent by electronic means, it shall be sent to the vendor of portable electronics at the vendors electronic mailing address specified for such purpose and to its affected enrolled customers last know electronic mailing address as provided by each enrolled customer to the insurer or vendor of portable electronics, as the case may be. For purposes of this subparagraph, enrolled customers provision of electronic mail address to the insurer or vendor of portable electronics, as the case may be, shall be deemed consent to receive notices and correspondence by electronic means. The insurer or vendor of portable electronics, as the case may be, shall maintain proof that the notice or correspondence was sent. (7) Notice or correspondence required by this section or otherwise required by law may be sent on behalf of an insurer or vendor, as the case may be, by the supervising entity appointed by the insurer.
 (a) A sworn application for license under the chapter shall be made to and be filed with the Commissioner on forms prescribed and furnished by the Commissioner. (b) The application shall: (1) Provide the name, residence address, and other information required by the Commissioner for an employee or officer of the vendor that is designated by the applicant as the person responsible for the vendors compliance with the requirements of this chapter, including implementation of the training program provided for herein. However, if the vendor derives more than 50% of its revenue from the sale of portable electronics insurance the information noted above shall be provided for all officers, directors, and shareholder of record having beneficial ownership of 10% or more of any class of securities registered under the Federal Securities Law or as may be otherwise required under 9 V.I.C., section 601 et seq.; and (2) Identify the location of the applicants home office. (c) Any vendor engaging in portable electronics insurance transactions on or before the effective date of this chapter must apply for licensure within ninety (90) days of the application is being made available by the Commissioner. Any applicant commencing operations after the effective date of this chapter must obtain a license prior to offering portable electronics insurance. (d) Initial licenses issued pursuant to this chapter shall expire on December 31st following its date. Licenses shall be renewed annually on application of the licensee unless he has failed to comply with this title. (e) Each vendor of portable electronics licensed under this chapter shall pay to the Commissioner a fee as prescribed by the Commissioner, but in no event shall the fee exceed $1,000 for an initial portable electronics limited lines license and $500 for each renewal thereof.
 Whenever by law or by rule of any court, public official, or public body, any surety bond, recognizance, obligation, stipulation or undertaking is required or is permitted to be given, any such bond, recognizance, obligation, stipulation, or undertaking which is otherwise proper and the conditions of which are guaranteed by an authorized surety insurer, or by an unauthorized surety insurer as a surplus line pursuant to chapter 27 of this title, shall be approved and accepted and shall be deemed to fulfill all requirements as to number of sureties, residence or status of sureties, and other similar requirements, and no justification by such surety shall be necessary.
 Any fiduciary required by law to give bonds, may include a part of his lawful expense to be allowed by the court or official by whom he was appointed, the reasonable amount paid as premium for such bonds to the authorized surety insurer or to the surplus line surety insurer which issued or guaranteed such bonds.
 In any proceeding the party entitled to recover costs may include therein such reasonable sum as was paid to such surety insurer as premium for any bond or undertaking required therein, and as may be allowed by the court having jurisdiction of such proceeding.
 The premium for bonds given by such surety insurers for appointive elective public officers and for such of their deputies or employees as are required to give bond shall be paid by the Government of the Virgin Islands.
 (a) This chapter relates only to title insurers. (b) None of the provisions of this title shall be deemed to apply to persons engaged in the business of preparing and issuing abstracts of title to property and certifying to the correctness thereof so long as such persons do not guarantee or insure such titles.
 A title insurer shall not be entitled to have a certificate of authority unless it otherwise qualifies therefor, nor unless it is a stock corporation and it deposits and keeps on deposit with the Commissioner of Finance through the Commissioner of Insurance a guaranty fund in amount of $100,000, and comprised of cash or securities of the kind made eligible under this title for the investment of funds of domestic life insurers.
 If an insurer's guaranty fund deposit becomes impaired for any cause, the Commissioner shall forthwith give notice thereof to the insurer, requiring that the impairment be cured within 30 days after the date of the notice. If the impairment is not so cured, the Commissioner shall forthwith revoke the insurer's certificate of authority.
 If an insurer fails to satisfy any judgment against it arising out of its liability under any title insurance policy or certificate of title issued, insured, or assumed by it, within 30 days after the finality of the judgment became fixed, the judgment may be enforced against the insurer's guaranty fund deposit through the following procedure: (1) the judgment creditor shall petition the court wherein the judgment is entered and as part of the same cause, truthfully setting forth the facts regarding the insurer's failure to satisfy the judgment as required by this section; (2) upon such petition the court shall direct issuance of a special execution directed to the marshal, requiring that the marshal sell so much of the securities on deposit as may be required to satisfy the judgment and pay the costs of the levy; (3) the court's order for issuance of the special execution shall also direct that a copy of the judgment and of the petition be served upon the Commissioner of Insurance within five days after the date of the order; and (4) upon issuance of such special execution and upon such service upon the Commissioner of Insurance he shall obtain from the Commissioner of Finance and deliver to such marshal sufficient of such securities as may be required for sale to satisfy the judgment and to pay such costs.
 The securities comprising the guaranty fund deposit shall be registered in the name of or endorsed or assigned to the Commissioner of Finance.
 (a) The securities comprising the guaranty fund deposit shall be held by the Commissioner of Finance as a special guaranty fund securing the faithful performance by the insurer of all its undertakings and liabilities as to any title guaranteed or insured by it. (b) Such deposit shall not be subject to any other liabilities of the insurer until after all its liabilities named in subsection (a) of this section have been discharged.
 (a) A guaranty fund deposit shall be terminated only upon the existence of any of the following conditions: (1) upon termination of all liabilities of the insurer, other than through reinsurance, under all guaranties or insurances of titles made, issued, or assumed by it; or (2) upon reinsurance of all such liabilities of the insurer, with the Commissioner's approval, in another insurer holding a certificate of authority as a title insurer in this territory. (b) For the purposes of this section only, all liability of the insurer with regard to a title guaranteed or insured by it shall be deemed terminated upon the expiration of 21 years from the date of the guaranty or insurance, unless prior thereto a claim of loss has been made with reference thereto and settlement of such loss then remains pending.
 (a) Upon any termination of the guaranty fund deposit, the Commissioner of Finance shall release, through the Commissioner of Insurance, the securities comprising it to the insurer after the following conditions have been complied with: (1) the insurer shall make written application to the Commissioner of Insurance for such release, verified by the oaths of its president and secretary; and (2) the Commissioner of Insurance shall in due course following upon such application make such examination of the records of the insurer, and of the insurer's officers under oath, as he deems reasonably necessary to determine that the conditions for termination of the deposit have been met. (b) Upon release of the securities, the Commissioner of Insurance shall revoke the insurer's certificate of authority.
 The funds of a domestic title insurer, other than those representing its guaranty fund deposit, shall be invested as follows: (1) funds in amount not less than its required special reserve shall be kept invested in investments eligible for domestic life insurers; (2) other funds may be invested in (A) the insurer's plant and equipment; (B) stocks and bonds of abstract companies when approved by the Commissioner; and (C) investments eligible for investment of funds of any domestic insurer.
 (a) Premium rates for the insuring or guaranteeing of titles shall not be excessive, inadequate, or unfairly discriminatory. (b) Each title insurer shall file with the Commissioner a schedule showing the premium rates to be charged by it. Every addition to or modification of such schedule or of any rate therein contained shall likewise be filed with the Commissioner, and no such addition or modification shall be effective until expiration of 15 days of such filing. (c) The Commissioner may order the modification of any premium rate or schedule of premium rates found by him after a hearing to be excessive, or inadequate, or unfairly discriminatory. No such order shall require retroactive modification.
 Title insurers and their property shall be taxed by this territory in accordance with the general laws relating to taxation, and not otherwise.
 (a) No person engaged in the business of insurance shall engage in unfair methods of competition or in unfair or deceptive acts or practices in the conduct of such business as such methods, acts, or practices are defined pursuant to subsection (b) of this section. (b) In addition to such unfair methods and unfair or deceptive acts or practices as are expressly defined and prohibited by this title, the Commissioner may from time to time by regulations promulgated only after a hearing thereon, define other methods of competition and other acts and practices in the conduct of such business reasonably found by him to be unfair or deceptive. (c) No such regulation shall be made effective prior to the expiration of 30 days after the date of the order on hearing by which it is promulgated. (d) If the Commissioner has cause to believe that any person is violating any such regulation he shall order such person to cease and desist therefrom. The Commissioner shall deliver such order to such person direct or mail it to the person by registered mail with return receipt requested. If the person fails to comply therewith before expiration of ten days after the cease and desist order has been received by him, he shall forfeit to the people of this territory a sum not to exceed $250 for each violation committed thereafter, such penalty to be recovered by an action prosecuted by the Commissioner.
 (a) No person shall either within or outside this territory enter into any contract, understanding or combination with any other person to do jointly or severally any act or engage in any practice for any of the following purposes: (1) controlling the rates to be charged for insuring any risks or any class of risks in this territory; (2) unfairly discriminating against any person in this territory by reason of his plan or method of transacting insurance, or by reason of his affiliation or nonaffiliation with any insurance organization; or (3) establishing or perpetuating any condition in this territory detrimental to free competition in the business of insurance or injurious to the insuring public. (b) This section shall not apply relative to ocean marine and foreign trade insurances. (c) Whenever the Commissioner has knowledge of any violation of this section he shall forthwith order the offending person to discontinue such practice immediately or show cause to the satisfaction of the Commissioner why such order should not be complied with. If the offender is an insurer or a licensee under this title and fails to comply with such order within 30 days after receipt thereof, the Commissioner may forthwith revoke the offender's certificate of authority of licenses.
 No person shall knowingly file with any public official nor knowingly make, publish, or disseminate any financial statement of an insurer which does not accurately state the insurer's financial condition.
 No person shall knowingly make, publish, or disseminate any false, deceptive or misleading representation or advertising in the conduct of the business of insurance or relative to any person engaged therein.
 Every advertisement of, by, or on behalf of an insurer shall set forth the name in full of the insurer and the location of its home office or principal office, if any, in the United States (if an alien insurer).
 No person who is not an insurer shall assume or use any name which deceptively infers or suggests that it is an insurer.
 (a) Every advertisement by or on behalf of any insurer purporting to show its financial condition may be in a condensed form but shall in substance correspond with the insurer's last verified statement filed with the Commissioner. (b) No insurer or person in its behalf shall advertise assets except those actually owned and possessed by the insurer in its own exclusive right, available for the payment of losses and claims, and held for the protection of its policyholders and creditors.
 No person shall make, publish, or disseminate, or aid, abet or encourage the making, publishing, or dissemination of any information or statement which is false or maliciously critical and which is designed to injure in its reputation or business any authorized insurer or any domestic corporation being formed pursuant to this title for the purpose of becoming an insurer.
 No person shall make, issue or circulate, or cause to be made, issued or circulated any misrepresentation of the terms of any policy or the benefits or advantages promised thereby, or the dividends or share of surplus to be received thereon, or use any name or title of any policy or class of policies misrepresenting the nature thereof.
 No insurer, agent, broker, solicitor, or other person, shall guarantee or agree to the payment of future dividends or future refunds of unused premiums or savings in any specific or approximate amounts or percentages on account of any insurance contract.
 (a) No insurer or fraternal benefit society doing business in this territory shall directly or indirectly pay or use, or offer, consent or agree to pay or use any money or thing of value for or in aid of any political party; nor for or in aid of any candidate for any political office, nor for the nomination for such office; nor for reimbursement or indemnification of any person for money or property so used. (b) Any individual who violates any provision of this section, or who participates in, aids, abets, advises, or consents to any such violation, or who solicits or knowingly receives any money or thing of value in violation of this section, shall be guilty of a gross misdemeanor and shall be liable to the insurer or society for the amount so contributed or received.
 No director, officer, agent, attorney in fact, or employee of an insurer shall (1) knowingly receive or possess himself of any of its property, otherwise than in payment for a just demand, and with intent to defraud, omit to make or to cause or direct to be made, a full and true entry thereof in its books and accounts; (2) make or concur in making any false entry, or concur in omitting to make any material entry, in its books or accounts; (3) knowingly concur in making or publishing any written report, exhibit or statement of its affairs or pecuniary condition containing any material statement which is false, or omit or concur in omitting any statement required by law to be contained therein; (4) having the custody or control of its books, wilfully fail to make any proper entry in the books of the insurer as required by law, or to exhibit or allow the same to be inspected and extracts to be taken therefrom by any person entitled by law to inspect the same, or take extracts therefrom; (5) if a notice of an application for an injunction or other legal process affecting or involving the property or business of the insurer is served upon him, fail to disclose the fact of such service and the time and place of such application to the other directors, officers, and managers thereof; or (6) fail to make any report or statement lawfully required by a public officer.
 A director of an insurer is deemed to have such knowledge of its affairs as to enable him to determine whether any act, proceeding, or omission of its directors is a violation of any provision of this chapter. If present at a meeting of directors at which any act, proceeding, or omission of its directors which is a violation of any such provision occurs, he must be deemed to have concurred therein unless at the time he causes or in writing requires his dissent therefrom to be entered on the minutes of the directors. If absent from such meeting, he must be deemed to have concurred in any such violation if the facts constituting such violation appear on the records or minutes of the proceedings of the board of directors, and he remains a director of the insurer for six months thereafter without causing or in writing requiring his dissent from such violation to be entered upon such record or minutes.
 (a) Except to the extent provided for in an applicable filing with the Commissioner then in effect, no insurer, general agent, agent, broker, or solicitor shall, as an inducement to insurance, or after insurance has been effected, directly or indirectly, offer, promise, allow, give, set off, or pay to the insured or to any employee of the insured, any rebate, discount, abatement, or reduction of premium or any part thereof named in any insurance contract, or any commission thereof, or earnings, profits, dividends, or other benefit, or any other valuable consideration or inducement whatsoever which is not expressly provided for in the policy. (b) Subsection (a) of this section shall not apply as to commissions paid to a licensed agent, general agent, broker, or solicitor for insurance placed on his own property risks, if the aggregate of such commissions does not exceed 5 percent of the total net commissions received by the agent, general agent, broker, or solicitor during the same 12-month period. (c) This section shall not apply to the allowance by any marine insurer, or marine insurance agent, general agent, broker, or solicitor, to any insured, in connection with marine insurance, of such discount as is sanctioned by custom among marine insurers as being additional to the agent's or broker's commission.
 (a) No insurer, general agent, agent, broker, solicitor, or other person shall, as an inducement to insurance, or in connection with any insurance transaction, provide in any policy for, or offer, or sell, buy, or offer or promise to buy or give, or promise, or allow to the insured or prospective insured or to any other person on his behalf in any manner whatsoever: (1) any shares of stock or other securities issued or at any time to be issued on any interest therein or right thereto; or (2) any special advisory board contract, or other contract, agreement, or understanding of any kind, offering, providing for, or promising any profits or special returns or special dividends; or (3) any prizes, goods, wares, or merchandise of an aggregate value in excess of one dollar. (b) This section shall not be deemed to prohibit the sale or purchase of securities as a condition to or in connection with surety insurance insuring the performance of an obligation as part of a plan of financing found by the Commissioner to be designed and operated in good faith primarily for the purpose of such financing.
 No life or disability insurer shall directly or indirectly participate in any plan to offer or effect any kind or kinds of insurance in this territory as an inducement to the purchase by the public of any goods, securities, commodities, services or subscriptions to publications. This section shall not apply to group or blanket insurance issued pursuant to this title.
 The Commissioner shall revoke the certificates of authority or licenses of any insurer, general agent, agent, broker, or solicitor guilty of violating any provision contained in sections 1214 and 1215 of this title. No such insurer, general agent, agent, broker, or solicitor shall, following any such revocation, be eligible for a certificate of authority or license within one year after such revocation.
 (a) No insured person shall receive or accept, directly or indirectly, any rebate of premium or part thereof, or any favor, advantage, share in dividends, or other benefit, or any valuable consideration or inducement not specified or provided for in the policy, or any commission on any insurance policy to which he is not lawfully entitled as a licensed agent, broker, or solicitor. The retention by the nominal policyholder in any group life insurance contract of any part of any dividend or reduction of premium thereon contrary to the provisions of section 1214 of this title shall be deemed the acceptance and receipt of a rebate and shall be punishable by a fine of not more than $500. (b) The amount of insurance thereon the insured has so received or accepted any such rebate or any such commission, other than as to life or disability insurances, shall be reduced in the proportion that the amount or value of the rebate or commission bears to the premium for such insurance. In addition to such reduction of insurance, if any, any insured shall be liable to a fine of not more than $200.
 No person shall by misrepresentation or by misleading comparisons, induce or tend to induce any insured to lapse, terminate, forfeit, surrender, retain, or convert any insurance policy.
 (a) No person shall wilfully collect any sum as premium for insurance, which insurance is not then provided or is not in due course to be provided by an insurance policy issued by an insurer as authorized by this title. (b) No person shall wilfully collect as premium for insurance any sum in excess of the amount actually expended or in due course is to be expended for insurance applicable to the subject on account of which the premium was collected. (c) No person shall wilfully or knowingly fail to return to the person entitled thereto within a reasonable length of time any sum collected as premium for insurance in excess of the amount actually expended for insurance applicable to the subject on account of which the premium was collected. (d) Each violation of this section which does not amount to a felony shall constitute a misdemeanor.
 It shall be unlawful for any insurer or its representative, or any agent or broker, to hypothecate, sell, or dispose of any promissory note, received in payment for any premium or part thereof on any contract of life insurance or of disability insurance applied for, prior to delivery of the policy to the applicant.
 Any agent, solicitor, broker, examining physician or other person who makes a false or fraudulent statement or representation in or relative to an application for insurance in an insurer transacting insurance under the provisions of this title, shall be guilty of a misdemeanor, and the license of any such agent, solicitor, or broker so guilty shall be revoked.
 Any person, who, with intent to defraud or prejudice the insurer thereof, wilfully burns or in any manner injures or destroys property which is insured at the time against loss or damage by fire or by any other casualty, under such circumstances not making the offense arson, is guilty of a felony.
 Any person, who, knowing it to be such: (1) presents, or causes to be presented, a false or fraudulent claim, or any proof in support of such claim, for the payment of a loss under a contract of insurance; or (2) prepares, makes or subscribes to any false or fraudulent account, certificate, affidavit, or proof of loss, or other document or writing, with intent that it be presented or used in support of such a claim, is guilty of a gross misdemeanor.
 (a) Any insurer which precipitates, or aids in precipitating or conducting a rate war and by so doing writes or issues a policy of insurance at a less rate than permitted under its schedules filed with the Commissioner, or below the rate deemed by him to be proper and adequate to cover the class of risk insured, shall have its certificate of authority to do business in this territory suspended until such time as the Commissioner is satisfied that it is charging a proper rate of premium. (b) Any insurer which has precipitated, or aided in precipitating or conducting a rate war for the purpose of punishing or eliminating competitors or stifling competition, or demoralizing the business, or for any other purpose, and has ordered the cancellation or rewriting of policies at a rate lower than that provided by its rating schedules where such rate war is not in operation, and has paid or attempted to pay to the insured any return premiums, on any risk so to be rewritten, on which its agent has received or is entitled to receive his regular commission, such insurer shall not be allowed to charge back to such agent any portion of his commission on the ground that the same has not been earned.
 (a) Any insurer may retain, invest in or acquire the whole or any part of the capital stock of any other insurer or insurers, or have a common management with any other insurer or insurers, unless such retention, investment, acquisition or common management is inconsistent with any other provision of this title, or unless by reason thereof the business of such insurers with the public is conducted in a manner which substantially lessens competition generally in the insurance business or tends to create a monopoly therein. (b) Any person otherwise qualified may be a director of two or more insurers which are competitors, unless the effect thereof is to substantially lessen competition between insurers generally or tends to create a monopoly. (c) If the Commissioner finds, after a hearing thereon, that there is violation of this section he shall order all such persons and insurers to cease and desist from such violation within such time, or extension thereof, as may be specified in such order.
 Every debtor or borrower, when property insurance of any kind is required in connection with the debt or loan, shall have reasonable opportunity and choice in the selection of the agent, broker, and insurer through whom such insurance is to be placed; but only if the insurance is properly provided for the protection of the creditor or lender not later than at commencement of risk as to such property as respects such creditor or lender, and in the case of renewal of insurance, only if the renewal policy is delivered to the creditor or lender not later than 30 days prior to the renewal date.
 Every person who, with intent to deceive, knowingly exhibits any false account, or document, or advertisement, relative to the affairs of any insurer, or of any corporation or syndicate of the kind enumerated in chapter 11 of this title formed or proposed to be formed, shall be guilty of a felony.
 The purpose of the chapter is to provide an effective and efficient system for examining the activities, operations, financial condition and affairs of all persons transacting the business of insurance in the territory and all persons otherwise subject to the jurisdiction of the Commissioner. The provisions of the chapter are intended to enable the Commissioner to adopt a flexible system of examinations which directs resources, as may be deemed appropriate and necessary, for the administration of the insurance related laws of the territory.
 As used in this title, unless the context requires another meaning: (a) Commissioner means the Commissioner of Insurance of the Virgin Islands, his deputies, or the Division of Banking, Insurance and Financial Regulation, as appropriate. (b) Company means any person engaging in, or proposing or attempting to engage in, any transaction or kind of insurance or surety business and any person or group of persons who may otherwise be subject to the administrative, regulatory or taxing authority of the Commissioner. (c) Division means the Division of Banking, Insurance and Financial Regulation. (d) Examiner means any individual or firm having been authorized by the Commissioner to conduct an examination under this chapter. (e) Insurer means a corporation or association which is engaged as a principal in the business of making contracts of insurance, but shall not include an insurance broker acting as a broker. (f) Person means any individual, aggregation of individuals, trust associations, partnerships, corporations, agents, brokers, solicitors, adjusters, or any affiliate thereof.
 (a) The Commissioner or any of his examiners may conduct an examination under this chapter of any company as often as the Commissioner in his sole discretion deems appropriate, but shall, at a minimum, conduct an examination of every insurer licensed in the territory not less frequently than once every five (5) years. In scheduling and determining the nature, scope and frequency of the examinations, the Commissioner shall consider such matters as the results of financial statement analyses and ratios, changes in management or ownership, actuarial opinions, reports of independent certified public accountants and other criteria as set forth in the Examiner's Handbook adopted by the National Association of Insurance Commissioners and in effect when the Commissioner exercises discretion under this section. (b) For purposes of completing an examination of any company under this chapter, the Commissioner may examine or investigate any person, or the business of any person, in so far as such examination or investigation is, in the sole discretion of the Commissioner, necessary or material to the examination of the company. (c) In lieu of an examination under this chapter of any foreign or alien insurer licensed in the territory, the Commissioner may accept an examination report on the company as prepared by the insurance department for the company's state of domicile or port-of-entry state until January 1, 1994. Thereafter, such reports may only be accepted if: (1) the insurance department was at the time of the examination accredited under the National Association of Insurance Commissioner's (NAIC) Financial Regulation Standards and Accreditation Program; or (2) the examination is performed under the supervision of an accredited insurance department or with the participation of one or more examiners who are employed by such an accredited state insurance department and who, after a review of the examination work papers and report, state under oath that the examination was performed in a manner consistent with the standards and procedures required by their insurance department.
 (a) Upon determining that an examination should be conducted, the Commissioner, or the Commissioner's designee, shall issue an examination warrant appointing one or more examiners to perform the examination and instructing them as to the scope of the examination. In conducting the examination, the examiner shall observe those guidelines and procedures set forth in the Examiner's Handbook adopted by the National Association of Insurance Commissioners. The Commissioner may also employ such other guidelines or procedures as the Commissioner may deem appropriate. (b) Every company or person from whom information is sought, its officers, directors and agents shall provide to the examiners appointed under subsection (a) of this section timely, convenient and free access at all reasonable hours at its offices to all books, records, accounts, papers, documents and any or all computer or other recordings relating to the property, assets, business and affairs of the company being examined. The officers, directors, employees and agents of the company or person shall facilitate the examination and aid in the examination so far as it is in their power to do so. The refusal of any company, by its officers, directors, employees or agents, to submit to examination shall be grounds for suspension or refusal of, or nonrenewal of any license or authority held by the company to engage in insurance or other business subject to the Commissioner's jurisdiction. Any such proceedings for suspension, revocation or refusal of any license or authority shall be conducted pursuant to chapter 7 of this title. (c) The Commissioner, or his designee, shall have the power to issue subpoenas, to administer oaths and to examine under oath, any person as to any matter, pertinent to the examination. Upon the failure or refusal of any person to obey a subpoena, the Commissioner may petition a court of competent jurisdiction, and upon proper showing, the court may enter an order compelling the witness to appear and testify or produce documentary evidence. Failure to obey the court order shall be punishable as contempt of court. (d) When making an examination under this chapter, the Commissioner may retain attorneys, appraisers, independent actuaries, independent certified public accountants or other professionals and specialists as examiners. (e) Nothing contained in this chapter shall be construed to limit the Commissioner's authority to terminate or suspend any examination in order to pursue other legal or regulatory action pursuant to the insurance laws of the territory. Findings of fact and conclusions made pursuant to any examination shall be prima facie evidence in any legal or regulatory action. (f) Nothing contained in this chapter shall be construed to limit the Commissioner's authority to use and, if appropriate, to make public any final or preliminary examination report, any examination or company workpapers or other documents, or any other information discovered or developed during the course of any examination in the furtherance of any legal or regulatory action which the Commissioner may, in his sole discretion, deem appropriate.
 (a) General description. All examination reports shall be comprised of only facts appearing upon the books, records, or other documents of the company, its agents or other persons examined, or as ascertained from the testimony of its officers or agents or other persons examined concerning its affairs, and such conclusions and recommendations as the examiners find reasonably warranted from the facts. (b) Filing of examination report. Not later than 60 days following completion of the examination, the examiner in charge shall file with the Division, a verified written report of examination under oath. Upon receipt of the verified report, the Division shall transmit the report to the company examined, together with a notice which shall afford the company examined a reasonable opportunity of not more than 30 days to make a written submission or rebuttal with respect to any matters contained in the examination report. (c) Adoption of report on examination. Within 30 days of the end of the period allowed for the receipt of written submissions or rebuttals, the Commissioner shall fully consider and review the report, together with any written submissions or rebuttals and any relevant portions of the examiner's workpapers and enter an order: (1) Adopting the examination report as filed or with modification or corrections. If the examination report reveals that the company is operating in violation of any law, regulation or prior order of the Commissioner, the Commissioner may order the company to take any action the Commissioner considers necessary and appropriate to cure such violation; or (2) Rejecting the examination report with directions to the examiners to reopen the examination for purposes of obtaining additional information, and refiling pursuant to subsection (b) of this section; or (3) Calling for an investigatory hearing with not less than 20 days notice to the company for purposes of obtaining additional documentation, data, information and testimony. (d) Orders and procedures.  (1) All orders entered pursuant to subsection (c)(1) of this section shall be accompanied by findings and conclusions resulting from the Commissioner's consideration and review of the examination report, relevant examiner work papers and any written submissions or rebuttals. Any such order shall be considered a final administrative decision and may be appealed pursuant to chapter 7, section 160 of this title, and shall be served upon the company by certified mail, together with a copy of the adopted examination report. Within 30 days of the issuance of the adopted report, the company shall file affidavits executed by each of its directors stating under oath that they have received a copy of the adopted report and related orders. (2) Any hearing conducted under subsection (c)(3) of this section by the Commissioner, or his designee, shall be conducted as a nonadversarial, confidential investigatory proceeding as necessary for the resolution of any inconsistencies, discrepancies or disputed issues apparent upon the face of the filed examination report or raised by, or as a result of, the Commissioner's review of relevant work papers or by the written submission or rebuttal of the company. Within 20 days of the conclusion of any such hearing, the Commissioner shall enter an order pursuant to subsection (c)(1) of this section. (A) The Commissioner shall not appoint an examiner as an authorized representative to conduct the hearing. The hearing shall proceed expeditiously with discovery by the company limited to the examiner's workpapers which tend to substantiate any assertions set forth in any written submission or rebuttal. The Commissioner, or his designee, may issue subpoenas for the attendance of any witness or for the production of any documents deemed relevant to the investigation, whether under the control of the Division, the company or other persons. The documents produced shall be included in the record and testimony taken by the Commissioner, or his representative, and shall be under oath and preserved for the record. Nothing contained in this section shall require the Division to disclose any information or records which would indicate or show the existence or content of any investigation or activity of a law enforcement agency. (B) The hearing shall proceed with the Commissioner or his designee posing questions to the persons subpoenaed. Thereafter, the company and the Division may present testimony relevant to the investigation. Cross examination shall be conducted only by the Commissioner or his designee. The company and the Division shall be permitted to make closing statements and may be represented by counsel of their choice. (e) Publication and use.  (1) Upon the adoption of the examination report under subsection (c)(1) of this section, the Commissioner shall continue to hold the content of the examination as private and confidential information for a period of 30 days except to the extent provided in subsection (b) of this section. Thereafter, the Commissioner may open the report for public inspection so long as no court of competent jurisdiction has stayed its publication. (2) Nothing contained in this code shall prevent or be construed as prohibiting the Commissioner from disclosing the content of an examination report, preliminary examination report, or any matter relating thereto, to the insurance department of any other state or country, or to law enforcement officials of the territory or any other state or agency of the federal government at any time, so long as such agency or office receiving the report or matters relating thereto agrees in writing to hold it confidential and in a manner consistent with this chapter. (3) In the event the Commissioner determines that regulatory action is appropriate as a result of any examination, he may initiate any proceedings or actions as provided by law. (f) Confidentiality of ancillary information. All working papers, recorded information, documents and copies thereof produced by, obtained by or disclosed to the Commissioner or any other person in the course of an examination made under this chapter may be held by the Commissioner as a record not required to be made public pursuant to Title 3, section 881 of this code.
 No examiner may be appointed by the Commissioner if such examiner, either directly or indirectly, has a conflict of interest or is affiliated with the management of, or owns a pecuniary interest in, any person subject to examination under this chapter. This section shall not be construed to automatically preclude an examiner from being: (1) A policyholder or claimant under an insurance policy; (2) A grantor of a mortgage or similar instrument on the examiner's residence to a regulated entity if done under customary terms and in the ordinary course of business; (3) An investment owner in shares of regulated diversified investment companies; or (4) A settlor or beneficiary of a blind trust into which any otherwise impermissible holdings have been placed. Notwithstanding the requirements of this section, the Commissioner may retain from time to time, on an individual basis, qualified actuaries, certified public accountants, or other similar individuals who are independently practicing their professions, even though said persons may from time to time be similarly employed or retained by persons subject to examination under this chapter.
 The cost of an examination into the affairs and condition of any company or insurer shall be borne by the company or insurer examined, unless remitted by the Commissioner.
 (a) No cause of action shall arise nor shall any liability be imposed against the Commissioner, the Commissioner's designee or any examiner appointed by the Commissioner for any statements made or conduct performed in good faith while carrying out the provisions of this chapter. (b) No cause of action shall arise, nor shall any liability be imposed against any person for the act of communicating or delivering information or data to the Commissioner or the Commissioner's designee or examiner pursuant to an examination made under this chapter, if such act of communication or delivery was performed in good faith and without fraudulent intent or the intent to deceive. (c) This section does not abrogate or modify in any way any common law or statutory privilege or immunity heretofore enjoyed by any person identified in subsection (a) of this section. (d) A person identified in subsection (a) shall be entitled to an award of attorney's fees and costs if he is the prevailing party in a civil cause of action for libel, slander or any other relevant tort arising out of activities in carrying out the provisions of this chapter and the party bringing the action was not substantially justified in doing so. For purposes of this section, a proceeding is substantially justified if it had a reasonable basis in law or fact at the time it was initiated.
 For the purposes of this chapter, other than as to section 1251 and in addition to persons included under section 1261 the term insurer shall be deemed to include all persons purporting to be engaged as insurers in the business of insurance in this territory, and to persons in process of organization to become insurers.
 The Commissioner may apply to the District Court for an order directing him to rehabilitate a domestic insurer upon one or more of the following grounds: That the insurer (1) is insolvent; (2) has refused to submit its books, records, accounts or affairs to the reasonable examination of the Commissioner; (3) has failed to comply with the Commissioner's order, made pursuant to law, to make good an impairment of capital (if a stock insurer) or an impairment of assets (if a mutual insurer) within the time prescribed by law; (4) has transferred or attempted to transfer substantially its entire property or business, or has entered into any transaction the effect of which is to merge substantially its entire property or business in that of any other insurer without first having obtained the written approval of the Commissioner; (5) if found, after examination, to be in such condition that its further transaction of business will be hazardous to its policyholders, or to its creditors, or to its members, subscribers, or stockholders, or to the public; (6) has wilfully violated its charter or any law of this territory; (7) has an officer, director, or manager who has refused to be examined under oath, concerning its affairs, for which purpose the Commissioner is authorized to conduct and to enforce by all appropriate and available means any such examination under oath in any other territory or state of the United States, in which any such officer, director or manager may then presently be, to the full extent permitted by the laws of any such other state or territory, this special authorization considered; (8) has been the subject of an application for the appointment of a receiver, trustee, custodian or sequestrator of the insurer or of its property, or if a receiver, trustee, custodian, or sequestrator is appointed by a federal court or if such appointment is imminent; (9) has consented to such an order through a majority of its directors, stockholders, members, or subscribers; or (10) has failed to pay a final judgment rendered against it in any jurisdiction upon any insurance contract issued or assumed by it, within 30 days after the judgment became final or within 30 days after time for taking an appeal has expired, or within 30 days after dismissal of an appeal before final determination, whichever date is the later.
 (a) An order to rehabilitate a domestic insurer shall direct the Commissioner forthwith to take possession of the property of the insurer and to conduct the business thereof, and to take such steps toward removal of the causes and conditions which have made rehabilitation necessary as the court may direct. (b) If at any time the Commissioner deems that further efforts to rehabilitate the insurer would be useless, he may apply to the court for an order of liquidation. (c) The Commissioner, or any interested person upon due notice to the Commissioner, at any time may apply for an order terminating the rehabilitation proceeding and permitting the insurer to resume possession of its property and the conduct of its business, but no such order shall be granted except when, after a full hearing, the court has determined that the purposes of the proceedings have been fully accomplished.
 The Commissioner may apply to the District Court for an order directing him to liquidate the business of a domestic insurer or of the United States branch of an alien insurer having trusteed assets in this territory, regardless of whether or not there has been a prior order directing him to rehabilitate such insurer, upon any of the grounds specified in section 1253 of this title or upon any one or more of the following grounds: That the insurer (1) has ceased transacting business for a period of one year; (2) is an insolvent insurer and has commenced voluntary liquidation or dissolution, or attempts to commence or persecute an action or proceeding to liquidate its business or affairs, or to dissolve its corporate charter, or to procure the appointment of a receiver, trustee, custodian, or sequestrator under any law except this title; or (3) has not organized or completed its organization and obtained a certificate of authority as an insurer prior to the expiration or revocation of its solicitation permit.
 (a) An order to liquidate the business of a domestic insurer shall direct the Commissioner forthwith to take possession of the property of the insurer, to liquidate its business, to deal with the insurer's property and business in his own name as Commissioner or in the name of the insurer as the court may direct, to give notice to all creditors who may have claims against the insurer to present such claims. (b) The Commissioner may apply under this chapter for an order dissolving the corporate existence of a domestic insurer (1) upon his application for an order of liquidation of such insurer, or at any time after such order has been granted; or (2) upon the grounds specified in paragraph (3) of section 1255 of this title regardless of whether an order of liquidation is sought or has been obtained.
 An order to liquidate the business of the United States branch of an alien insurer having trusteed assets in this territory shall be in the same terms as those prescribed for domestic insurers, except that only the assets of the business of such United States branch shall be included therein.
 The Commissioner may apply to the District Court for an order directing him to conserve the assets within this territory of a foreign insurer upon any one or more of the following grounds: (1) upon any of the grounds specified in paragraphs (1) to (9), inclusive, of section 1253 of this title and in paragraph (2) of section 1255 of this title; (2) that its property has been sequestrated in its domiciliary sovereignty or in any other sovereignty.
 The Commissioner may apply to the District Court for an order directing him to conserve the assets within this territory of an alien insurer upon any one or more of the following grounds: (1) upon any of the grounds specified in paragraphs (1) to (9), inclusive, of section 1253 of this title and in paragraph (2) of section 1255 of this title; (2) that the insurer has failed to comply, within the time designated by the Commissioner, with an order of the Commissioner pursuant to law to make good an impairment of its trusteed funds; or (3) that the property of the insurer has been sequestrated in its domiciliary sovereignty or elsewhere.
 (a) An order to conserve the assets of a foreign or alien insurer shall direct the Commissioner forthwith to take possession of the property of the insurer within this territory and to conserve it, subject to the further direction of the court. (b) Whenever a domiciliary receiver is appointed for any such insurer in its domiciliary state which is also a reciprocal state, as defined in section 1261 of this title, the court shall on application of the Commissioner appoint the Commissioner as the ancillary receiver in this territory, subject to the provisions of the Uniform Insurers Liquidation Act as set out in sections 12611268, inclusive, of this title.
 This section and sections 12621268, inclusive, of this title, comprise and may be cited as the Uniform Insurers Liquidation Act. For the purposes of such Act: Ancillary state means any state other than a domiciliary state. Delinquency proceeding means any proceeding commenced against an insurer for the purpose of liquidating, rehabilitating, reorganizing, or conserving such insurer. Domiciliary state means the state in which an insurer is incorporated or organized, or, in the case of an insurer incorporated or organized in a foreign country, the state in which such insurer, having become authorized to do business in such state, has, at the commencement of delinquency proceedings, the largest amount of its assets held in trust and assets held on deposit for the benefit of its policyholders or policyholders and creditors in the United States; and any such insurer is deemed to be domiciled in such state. Foreign country means territory not in any state. General assets means all property, real, personal, or otherwise, not specifically mortgaged, pledged, deposited, or otherwise encumbered for the security or benefit of specified persons or a limited class or classes of persons, and as to such specifically encumbered property the term includes all such property or its proceeds in excess of the amount necessary to discharge the sum or sums secured thereby. Assets held in trust and assets held on deposit for the security or benefit of all policyholders, or all policyholders and creditors in the United States, shall be deemed general assets. Insurer means any person, firm, corporation, association, or aggregation of persons doing an insurance business and subject to the insurance supervisory authority of, or to liquidation, rehabilitation, reorganization, or conservation by, the Commissioner, or the equivalent insurance supervisory official of a state. Preferred claim means any claim with respect to which the law of a state of the United States accords priority of payment from the general assets of the insurer. Receiver means receiver, liquidator, rehabilitator, or conservator as the context may require. Reciprocal state means any state other than this territory in which in substance and effect the provisions of sections 12611268, inclusive, of this title are in force, including the provisions requiring that the Commissioner of Insurance or equivalent insurance supervisory official be the receiver of a delinquent insurer. Secured claim means any claim secured by mortgage, trust, deed, pledge, deposit as security, escrow, or otherwise, but not including special deposit claim or claims against general assets. The term also includes claims which more than four months prior to the commencement of delinquency proceedings in the state of the insurer's domicile have become liens upon specific assets by reason of judicial process. Special deposit claim means any claim secured by a deposit made pursuant to statute for the security or benefit of a limited class or classes or persons, but not including any general assets. State means any state of the United States, and also the District of Columbia and the Commonwealth of Puerto Rico.
 (a) Whenever under the laws of this territory a receiver is to be appointed in delinquency proceedings for an insurer domiciled in this territory, the court shall appoint the Commissioner as such receiver. The court shall direct the Commissioner forthwith to take possession of the assets of the insurer and to administer the same under the orders of the court. (b) As domiciliary receiver the Commissioner shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer wherever located, as of the date of entry of the order directing him to rehabilitate or liquidate a domestic insurer, or to liquidate the United States branch of an alien insurer domiciled in this territory, and he shall have the right to recover the same and reduce the same to possession; except that ancillary receivers in reciprocal states shall have, as to assets located in their respective states, the rights and powers which are hereinafter prescribed for ancillary receivers appointed in this territory as to assets located in this territory. (c) The filing or recording of the order directing possession to be taken or a certified copy thereof, in the office where instruments affecting title to property are required to be filed or recorded shall impart the same notice as would be imparted by a deed, bill of sale, or other evidence of title duly filed or recorded. (d) The Commissioner as domiciliary receiver shall be responsible on his official bond for the proper administration of all assets coming into his possession or control. The court may at any time require an additional bond from him if deemed desirable for the protection of the assets. (e) Upon taking possession of the assets of an insurer the domiciliary receiver shall, subject to the direction of the court, immediately proceed to conduct the business of the insurer or to take such steps as are authorized by the laws of this territory for the purpose of liquidating, rehabilitating, reorganizing, or conserving the affairs of the insurer.
 (a) Whenever under the laws of this territory an ancillary receiver is to be appointed in delinquency proceedings for an insurer not domiciled in this territory, the court shall appoint the Commissioner as ancillary receiver. The Commissioner shall file a petition requesting the appointment (1) if he finds that there are sufficient assets of such insurer located in this territory to justify the appointment of an ancillary receiver, or (2) if ten or more persons resident in this territory having claims against such insurer file a petition with the Commissioner requesting the appointment of such ancillary receiver. (b) The domiciliary receiver for the purpose of liquidating an insurer domiciled in a reciprocal state shall be vested by operation of law with the title to all of the property, contracts, and rights of action, and all of the books and records of the insurer located in this territory, and he shall have the immediate right to recover balances due from local agents and to obtain possession of any books and records of the insurer found in this territory. He shall also be entitled to recover the other assets of the insurer located in this territory except that upon the appointment of an ancillary receiver in this territory, the ancillary receiver shall during the ancillary receivership proceedings have the sole right to recover such other assets. The ancillary receiver shall, as soon as practicable, liquidate from their respective securities those special deposit claims and secured claims which are proved and allowed in the ancillary proceedings in this territory, and shall pay the necessary expenses of the proceedings. All remaining assets he shall promptly transfer to the domiciliary receiver. Subject to the foregoing provisions the ancillary receiver and his deputies shall have the same powers and be subject to the same duties with respect to the administration of such assets as a receiver of an insurer domiciled in this territory. (c) The domiciliary receiver of an insurer domiciled in a reciprocal state may sue in this territory to recover any assets of such insurer to which he may be entitled under the laws of this territory.
 (a) In a delinquency proceeding begun in this territory against an insurer domiciled in this territory, claimants residing in reciprocal states may file claims either with the ancillary receivers, if any, in their respective states, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceedings. (b) Controverted claims belonging to claimants residing in reciprocal states may either (1) be proved in this territory as provided by law, or (2), if ancillary proceedings have been commenced in such reciprocal states, may be proved in those proceedings. In the event a claimant elects to prove his claim in ancillary proceedings, if notice of the claim and opportunity to appear and be heard is afforded the domiciliary receiver of this territory as provided in section 1265 of this title with respect to ancillary proceedings in this territory, the final allowance of such claim by the courts in the ancillary state shall be accepted in this territory as conclusive as to its amount, and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within the ancillary state.
 (a) In a delinquency proceeding in a reciprocal state against an insurer domiciled in that state, claimants against such insurer, who reside within this territory may file claims either with the ancillary receiver, if any, appointed in this territory, or with the domiciliary receiver. All such claims must be filed on or before the last date fixed for the filing of claims in the domiciliary delinquency proceeding. (b) Controverted claims belonging to claimants residing in this territory may either (1) be proved in the domiciliary state as provided by the law of that territory, or (2), if ancillary proceedings have been commenced in this territory, be proved in those proceedings. In the event that any such claimant elects to prove his claim in this territory, he shall file his claim with the ancillary receiver in the manner provided by the law of this territory for the proving of claims against insurers domiciled in this territory, and he shall give notice in writing to the receiver in the domiciliary state, either by registered mail or by personal service at least 40 days prior to the date set for hearing. The notice shall contain a concise statement of the amount of the claim, the facts on which the claim is based, and the priorities asserted, if any. If the domiciliary receiver, within 30 days after the giving of such notice, shall give notice in writing to the ancillary receiver and to the claimant, either by registered mail or by personal service, of his intention to contest such claim, he shall be entitled to appear or to be represented in any proceeding in this territory involving the adjudication of the claim. The final allowance of the claim by the courts of this territory shall be accepted as conclusive as to its amount, and shall also be accepted as conclusive as to its priority, if any, against special deposits or other security located within this territory.
 (a) In a liquidation proceeding in this territory involving one or more reciprocal states, territories, or commonwealths, the order of distribution of the domiciliary state shall control as to all claims of residents of this and of reciprocal states, territories, or commonwealths. All claims of residents of this territory and of reciprocal states, territories, and commonwealths shall be given equal priority of payment from general assets regardless of where such assets are located. (b) The owners of special deposit claims against an insurer for which a receiver is appointed in this territory or any state shall be given priority against their several special deposits in accordance with the provisions of the statutes governing the creation and maintenance of such deposits. If there is a deficiency in any such deposit so that the claims secured thereby are not fully discharged therefrom, the claimants may share in the general assets, but such sharing shall be deferred until general creditors, and also claimants against other special deposits who have received smaller percentages from their respective special deposits, have been paid percentages of their claims equal to the percentage paid from the special deposit. (c) The owner of a secured claim against an insurer for which a receiver has been appointed in this territory or any state may surrender his security and file his claim as a general creditor, or the claim may be discharged by resort to the security, in which case the deficiency, if any, shall be treated as a claim against the general assets of the insurer on the same basis as claims of unsecured creditors. If the amount of the deficiency has been adjudicated in ancillary proceedings as provided in sections 12611268, inclusive, of this title, or if it has been adjudicated by a court of competent jurisdiction in proceedings in which the domiciliary receiver has had notice and opportunity to be heard, such amount shall be conclusive; otherwise the amount shall be determined in the delinquency proceeding in the domiciliary state.
 During the pendency of delinquency proceedings in this territory or any reciprocal state no action or proceeding in the nature of an attachment, garnishment, or execution shall be commenced or maintained in the courts of this territory against the delinquent insurer or its assets. Any lien obtained by any such action or proceeding within four months prior to the commencement of any such delinquency proceeding or at any time thereafter shall be void as against any rights arising in such delinquency proceeding.
 (a) If any provision of sections 12611268, inclusive, of this title, or the application thereof to any person or circumstances is held invalid, such invalidity shall not affect other provisions or applications of such sections which can be given effect without the invalid provision or application, and to this end the provisions of such sections are declared to be severable. (b) This Uniform Insurers Liquidation Act shall be so interpreted and construed as to effectuate its general purpose to make uniform the law of those states that enact it. To the extent that its provisions, when applicable, conflict with other provisions of this chapter, the provisions of such Act shall control.
 (a) Proceedings under this chapter involving a domestic insurer shall be commenced in the District Court. (b) The Commissioner shall commence any such proceeding, the Attorney General representing him, by an application to the court or to any judge thereof for an order directing the insurer to show cause why the Commissioner should not have the relief prayed for. On the return of such order to show cause, and after a full hearing, the court shall either deny the application or grant the application together with such other relief as the nature of the case and the interests of policyholders, creditors, holders, members, or the public may require.
 (a) Upon application by the Commissioner for such an order to show cause or at any time thereafter, the court may without notice issue an injunction restraining the insurer, its officers, directors, stockholders, members, agents, and all other persons from the transaction of its business or the waste or disposition of its property until the further order of the court. (b) The court may at any time during a proceeding under this chapter issue such other injunctions or orders as may be deemed necessary to prevent interference with the Commissioner or the proceeding or waste of the assets of the insurer, or the commencement or prosecution of any actions, or the obtaining of preferences, judgments, attachments or other liens, or the making of any levy against the insurer or against its assets or any part thereof.
 The moneys collected by the Commissioner in a proceeding under this chapter shall be, from time to time, deposited with the Commissioner of Finance.
 The Commissioner shall not be required to pay any fee to any public officer in this territory for filing, recording, issuing a transcript or certificate, or authenticating any paper or instrument pertaining to the exercise by the Commissioner of any of the powers or duties conferred upon him under this chapter, whether or not such paper or instrument be executed by the Commissioner, employees, or attorneys of record and whether or not it is connected with the commencement of an action or proceeding by or against the Commissioner, or with the subsequent conduct of such action or proceeding.
 For the purpose of facilitating the rehabilitation, liquidation, conservation or dissolution of an insurer pursuant to this chapter the Commissioner may, subject to the approval of the court, borrow money and execute, acknowledge and deliver notes or other evidences of indebtedness therefor and secure the repayment of the same by the mortgage, pledge, assignment, transfer in trust, or hypothecation of any or all of the property whether real, personal or mixed of such insurer, and the Commissioner, subject to the approval of the court, shall have power to take any and all other action necessary and proper to consummate any such loans and to provide for the repayment thereof. The Commissioner shall be under no obligation personally or in his official capacity as Commissioner to repay any loan made pursuant to this section.
 The Commissioner shall transmit to the Governor and Legislature in his annual report the names of all insurers proceeded against under this chapter, together with such facts as shall acquaint the policyholders, creditors, stockholders, and the public with the proceedings.
 The rights and liabilities of the insurer and of its creditors, policyholders, stockholders, members and all other persons interested in its estate shall, unless otherwise directed by the court, be fixed as of the date on which the order directing the liquidation of the insurer is filed in the office of the clerk of the court which made the order, subject to the provisions of section 1279 of this title with respect to the rights of claimants holding contingent claims.
 (a) Any transfer of, or lien upon, the property of an insurer which is made or created within four months prior to the granting of an order to show cause under this chapter with the intent of giving to any creditor or of enabling him to obtain a greater percentage of his debt than any other creditor of the same class and which is accepted by such creditor having reasonable cause to believe that such a preference will occur, shall be voidable. (b) Every director, officer, employee, stockholder, member, and any other person acting on behalf of such insurer who shall be concerned in any such act or deed and every person receiving thereby any property of such insurer or the benefit thereof shall be personally liable therefor and shall be bound to account to the Commissioner. (c) The Commissioner as liquidator, rehabilitator or conservator in any proceeding under this chapter, may avoid any transfer of, or lien upon the property of an insurer which any creditor, stockholder or member of such insurer might have avoided and may recover the property so transferred unless such person was a bona fide holder for value prior to the date of the granting of an order to show cause under this chapter. Such property or its value may be recovered from anyone who has received it except a bona fide holder for value as above specified.
 The priority of distribution of claims from the insurer's estate shall be in accordance with the order in which each class of claims is herein set forth. Every claim in each class shall be paid in full or adequate funds retained for such payment before the members of the next class receive any payment. No subclasses shall be established within any class. The order of distribution of claims shall be: Class 1. The costs and expenses of administration, including but not limited to the following: 1. actual and necessary costs of preserving or recovering the assets of the insurer; 2. compensation for all services rendered in the liquidation; 3. any necessary filing fees; 4. the fees and mileage payable to witnesses; 5. reasonable attorney's fees; 6. the reasonable expenses of a guaranty association in handling claims. Class 2. Debts due to employees for services performed to the extent that they do not exceed $750 and represent payment for services performed within one year before the filing of the petition for liquidation. Officers and directors shall not be entitled to the benefits of this priority. Such priority shall be in lieu of any other similar priority which may be authorized by law as to wages or compensation of employees. Class 3. Claim under non-assessable policies for unearned premiums of other premium refunds, all claims under policies for losses incurred, including third party claims, all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property which are not under policies, and all claims of a guaranty association or foreign guaranty association. All claims under life insurance and annuity policies, whether for death proceeds, annuity proceeds, or investment values shall be treated as loss claims. That portion of any loss indemnification for which is provided by other benefits or advantages recovered by the claimant shall not be included in this class other than benefits or advantages recovered or recoverable in discharge of familial obligations of support or by way of succession at death or as proceeds of life insurance, or as gratuities. No payment by an employer to his employee shall be treated as a gratuity. Class 4. Claims of general creditors. Class 5. Claims of the federal or any state or local government. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. The remainder of such claims shall be postponed to Class 8. Class 6. Claims filed late or any other claims other than claims under Classes 7 and 8. Class 7. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Payment to members of domestic mutual insurance companies shall be limited in accordance with law. Class 8. The claims of shareholders or other owners.
 (a) In all cases of mutual debts or mutual credits between the insurer and another person in connection with any action or proceeding under this chapter, such credits and debts shall be set off and the balance only shall be allowed or paid, except as provided in subsection (b) of this section. (b) No offset shall be allowed in favor of any such person where (1) the obligation of the insurer to such person would not at the date of the entry of any liquidation order, or otherwise, as provided in section 1275 of this title, entitle him to share as a claimant in the assets of the insurer, or (2) the obligation of the insurer to such person was purchased by or transferred to such person with a view of its being used as an offset, or (3) the obligation of such person is to pay an assessment levied against the members of a mutual insurer, or is to pay a balance upon a subscription to the capital stock of a stock insurer.
 (a) Within 120 days of a final determination of insolvency of an insurer by a court of competent jurisdiction of this territory, the liquidator shall make application to the court for approval of a proposal to disburse assets out of marshalled assets, from time to time as such assets become available, to a guaranty association having obligations because of such insolvency. If the liquidator determines that there are insufficient assets to disburse, the application required by this section shall be considered satisfied by a filing by the liquidator stating the reason for this determination. (b) Such proposal shall at least include provisions for: (1) reserving amounts for the payment of expenses of administration and the payment of claims of secured creditors, to the extent of the value of the security held, and claims falling within the priorities established in section 1277 of this chapter, Classes 1, 2, and 3; (2) disbursement of the assets marshalled to date and subsequent disbursement of assets as they become available; (3) equitable allocation of disbursements to each of the guaranty associations and foreign guaranty associations entitled thereto; (4) the securing by the liquidator from each of the associations entitled to disbursements pursuant to this section of an agreement to return to the liquidator such assets, together with income earned on assets previously disbursed, as may be required to pay claims of secured creditors and claims falling within the priorities established in section 1277 of this chapter in accordance with such priorities. No bond shall be required of any such association; and (5) a full report to be made by each association to the liquidator accounting for all assets so disbursed to the association, all disbursements made therefrom, any interest earned by the association on such assets and any other matter as the court may direct. (c) The liquidator's proposal shall provide for disbursements to the association in amounts estimated at least equal to the claim payments made or to be made thereby for which such associations could assert a claim against the liquidator, and shall further provide that if the assets available for disbursement from time to time do not equal or exceed the amount of such claim payments made or to be made by the association, then disbursements shall be in the amount of available assets. (d) The liquidator's proposal shall, with respect to an insolvent insurer writing life or health insurance or annuities, provide for disbursements of assets to any guaranty association or any foreign guaranty association covering life or health insurance or annuities or to any other entity or organization reinsuring, assuming, or guaranteeing policies or contracts of insurance under the acts creating such associations. (e) Notice of such application shall be given the association in and to the commissioners of insurance of each of the states, territories, or commonwealths. Any such notice shall be deemed to have been given when deposited in the United States certified mail, first-class postage prepaid, at least 30 days prior to submission of such application to the court. Action on the application may be taken by the court provided the above required notice has been given and provided, further, that the liquidator's proposal complies with subsection (b), paragraphs (1) and (2), of this section.
 (a) No contingent claim shall share in a distribution of the assets of an insurer which has been adjudicated to be insolvent by an order made pursuant to section 1280 of this title, except that such claims shall be considered, if properly presented, and may be allowed to share where (1) such claim becomes absolute against the insurer on or before the last day fixed for filing of proofs of claim against the assets of such insurer; or (2) there is a surplus and the liquidation is thereafter conducted upon the basis that such insurer is solvent. (b) Where an insurer has been so adjudicated to be insolvent any person who has a cause of action against an insured of such insurer under a liability insurance policy issued by such insurer shall have the right to file a claim in the liquidation proceeding, regardless of the fact that such claim may be contingent, and such claim may be allowed (1) if it may be reasonably inferred from the proof presented upon such claim that such person would be able to obtain a judgment upon such cause of action against such insured; (2) if such person shall furnish suitable proof, unless the court for good cause shown shall otherwise direct, that no further valid claims against such insurer arising out of his cause of action other than those already presented can be made; and (3) if the total liability of such insurer to all claimants arising out of the same act of its insured shall be no greater than its maximum liability would be were it not in liquidation. (c) No judgment against such an insured taken after the date of the entry of the liquidation order shall be considered in the liquidation proceedings as evidence of liability, or of the amount of damages, and no judgment against an insured taken by default, inquest or by collusion prior to the entry of the liquidation order shall be considered as conclusive evidence in the liquidation proceeding either of the liability of such insured to such person upon such cause of action or of the amount of damages to which such person is therein entitled. (d) No claim of any secured claimant shall be allowed at a sum greater than the difference between the value of the claim without security and the value of the security itself as of the date of the entry of the order of liquidation or such other date set by the court for fixation of rights and liabilities as provided in section 1275 of this title unless the claimant shall surrender his security to the Commissioner in which event the claim shall be allowed in the full amount for which it is valued.
 (a) If upon the granting of an order of liquidation under this chapter or at any time thereafter during the liquidation proceeding, the insurer shall not be clearly solvent, the court shall after such notice and hearing as it deems proper, make an order declaring the insurer to be insolvent. Thereupon, regardless of any prior notice which may have been given to creditors, the Commissioner shall notify all persons who may have claims against such insurer and who have not filed proper proofs thereof, to present the same to him, at a place specified in such notice, within four months from the date of the entry of such order, or if the Commissioner shall certify that it is necessary, within such longer time as the court shall prescribe. The last day for the filing of proofs of claim shall be specified in the notice. Such notice shall be given in a manner determined by the court. (b) Proofs of claim may be filed subsequent to the date specified, but no such claim shall share in the distribution of the assets until all allowed claims, proofs of which have been filed before said date, have been paid in full with interest.
 Within three years from the date an order of rehabilitation or liquidation of a domestic mutual insurer was filed in the office of the clerk of the court by which such order was made, the Commissioner may make a report to the court setting forth (1) the reasonable value of the assets of the insurer; (2) the insurer's probable liabilities; and (3) the probable necessary assessment, if any, to pay all claims and expenses in full, including expenses of administration.
 (a) Upon the basis of the report provided for in section 1281 of this title, including any amendment thereof, the court, ex parte, may levy one or more assessments against all members of such insurer who, as shown by the records of the insurer, were members (if a mutual insurer) at any time within one year prior to the date of issuance of the order to show cause under section 1269 of this title. (b) Such assessment or assessments shall cover the excess of the probable liabilities over the reasonable value of the assets, together with the estimated cost of collection and percentage of uncollectibility thereof. The total of all assessments against any member with respect to any policy, whether levied pursuant to this chapter or pursuant to any other provisions of this title, shall be for no greater amount than that specified in the policy or policies of the member and as limited under this title; except that if the court finds that the policy was issued at a rate of premium below the minimum rate lawfully permitted for the risk insured, the court may determine the upper limit of such assessment upon the basis of such minimum rate. (c) No assessment shall be levied against any member with respect to any nonassessable policy issued in accordance with this title.
 After levy of assessment as provided in section 1282 of this title, upon the filing of a further detailed report by the Commissioner, the court shall issue an order directing each member (if a mutual insurer) if he shall not pay the amount assessed against him to the Commissioner on or before a day to be specified in the order, to show cause why he should not be held liable to pay such assessment together with costs as set forth in section 1285 of this title, and why the Commissioner should not have judgment therefor.
 The Commissioner shall cause a notice of such assessment order setting forth a brief summary of the contents of such order to be (1) published in such manner as shall be directed by the court; and (2) enclosed in a sealed envelope, addressed and mailed postage prepaid to each member liable thereunder at his last known address as it appears on the records of the insurer, at least 20 days before the return day of the order to show cause provided for in section 1283 of this title.
 (a) On the return day of the order to show cause provided for in section 1283 of this title if the member does not appear and serve verified objections upon the Commissioner, the court shall make an order adjudging that such member is liable for the amount of the assessment against him together with $10 costs, and that the Commissioner may have judgment against the member therefor. (b) If on such return day the member shall appear and serve verified objections upon the Commissioner there shall be a full hearing before the court or a referee to hear and determine, who, after such hearing, shall make an order either negativing the liability of the member to pay the assessment or affirming his liability to pay the whole or some part thereof together with $25 costs and the necessary disbursements incurred at such hearing, and directing the Commissioner in the latter case may have judgment therefor. (c) A judgment upon any such order shall have the same force and effect, and may be entered and docketed, and may be appealed from as if it were a judgment in an original action brought in the court in which the proceeding is pending.
 (a) Any time after the District Court has ordered the Commissioner to rehabilitate an insolvent domestic insurer under this chapter, the Commissioner may enter into an agreement, subject to the approval of the Legislature, with any party qualified to hold a certificate of authority under this title concerning the purchase of the insurer being rehabilitated. The Commissioner may not enter into such an agreement unless the purchaser demonstrates the capability to fully perform each of the elements of the purchase agreement. In addition, the Commissioner must be satisfied that the purchase is in the best interests of the persons insured by the rehabilitated insurer. Any agreement under this section must provide that all valid claims by insured against the rehabilitated insurer will be paid by the purchaser. (b) As part of the negotiation of a purchase agreement under subsection (a), the Commissioner may offer the prospective purchaser: (1) any or all of the benefits granted to persons qualifying for industrial development certificates under Title 29, section 713a, Virgin Islands Code; and (2) total or partial exemption from any insurance premium tax assessed by the Virgin Islands. This subsection shall not be construed as requiring a purchaser to meet any of the requirements for the issuance of an industrial development certificate. (c) Tax benefits offered or granted under this section: (1) must be attributable to income or premiums earned or property acquired as a direct result of the purchase of the rehabilitated insurer (including any premium income attributable to renewals of insurance policies in force immediately prior to the District Court's order of rehabilitation); and (2) may not be granted for a period exceeding ten (10) years.
 A corporation, society or voluntary association organized and carried on for the mutual benefit of its members and their beneficiaries and not for profit, and which makes provision for the payment of benefits in case of sickness, disability or death of its members, or disability or death of its members' wives or children, the fund from which the payment of such benefits are paid being derived from assessments or dues collected from its members, and the payment of death benefits being made to the families, heirs, blood relatives or persons named by its members as their beneficiaries, is hereby declared to be a mutual benefit society. Such societies shall be governed by the provisions of this chapter.
 Any corporation, society or association coming within the description as set forth in section 1301 of this title organized under the laws of any state, other territory or commonwealth, or district of the United States or of any foreign country, shall be admitted to do business within the Virgin Islands when it shall have filed with the Commissioner a copy of its articles of incorporation or association, duly certified by its president or secretary, together with a certificate of the insurance department of the state, territory or commonwealth, district or country in which it is authorized or incorporated, showing that it is authorized to carry on business therein.
 (a) Before a permit is granted to any foreign society to transact business in the Virgin Islands it must file with the Commissioner a resolution adopted by such society and signed by its president and secretary that service of process upon the Commissioner in any action or proceeding against the society brought in the Virgin Islands upon any cause of action arising in the Virgin Islands shall be valid service upon the society and which consent shall be irrevocable so long as the society shall carry on business in the Virgin Islands. (b) Every process left with the Commissioner shall be in duplicate. He shall return the original copy with his certificate of service into the court from which the process issued and forward the remaining copy at once, postage prepaid, to the society at its principal office within the meaning of this section. (c) The society shall file with the Commissioner a written statement, setting forth the location and post-office address of its principal office and that location and post-office address shall continue to be the location and address of the society for the purpose of this section until changed by a similar statement in writing and filed with the Commissioner. Such society shall answer such process within 60 days of the mailing thereof by the Commissioner.
 The Commissioner shall upon the application of any mutual benefit society, having the right to do business in the Virgin Islands issue to such society a permit in writing, authorizing it to do business in the Virgin Islands for which permit the society shall pay to the Commissioner a fee of $25. No business shall be transacted by any domestic or foreign society until such permit is granted.
 Every mutual benefit society doing business in this territory shall on or before the first day of March of each year make and file with the Commissioner in such form as he may require a statement under oath of its president and secretary, or corresponding officers, of its condition and standing on the 31st day of December next preceding, and of its transactions for one year ending on that date, and also shall furnish such other information as the Commissioner may deem necessary to a proper exhibit of its business and plan of working. The Commissioner may at other times require any further statement he may deem necessary to be made relating to such society. Upon the filing of such report the society shall pay to the Commissioner the sum of $10.
 (a) The Commissioner, or his deputy or examiner may visit and examine into the affairs of any domestic or foreign mutual benefit society. He may employ assistants for the purpose of such examination, and he or his deputy, or examiner, shall have free access to all the books, papers, and documents that relate to the business of the society and may summon and qualify as witnesses under oath and examine its officers, agents, and employees or other persons in relation to the affairs, transactions, and condition of the society. (b) The expense of such examination shall be paid by the society examined, upon statement furnished by the Commissioner and the examination shall be made at least once in two years.
 Whenever after examination the Commissioner is satisfied that any society has failed to comply with any provisions of this chapter, or is exceeding its powers, or is not carrying out its contracts in good faith, or is transacting business fraudulently, the Commissioner may present the facts relating thereto to the Attorney General of the Virgin Islands, who shall, if he deems the circumstances warrant, commence an action in the District Court, and such court shall thereupon notify the officers of such society of a hearing, and if it shall appear that such society should be closed, the society shall be enjoined from carrying on any further business and the Commissioner shall be appointed receiver of such society, and shall proceed at once to take possession of the books, papers, moneys, and other assets of the society, and shall forthwith, under the direction of the court, proceed to close the affairs of the society and to distribute its funds to those entitled to them.
 (a) Every nonprofit benefit society shall furnish for every officer, agent or person having custody of the principal funds of the association, a good and sufficient fidelity bond for the benefit of the association and its members, and file the same with the Commissioner who is hereby authorized to receive and approve the same as to form and sufficiency and to issue a certificate to such effect, or to reject the same if in his opinion such bond is not good or sufficient. The bonds shall each be in such reasonable sum, not exceeding $10,000, as the Commissioner may fix, and conditioned that such officer, agent or person shall faithfully account for and pay over the funds so received into his custody, in the manner provided by the articles of incorporation or association, or the bylaws of the society. (b) It shall be unlawful for any nonprofit mutual benefit society to do business within the Virgin Islands without first filing with the Commissioner such bond or bonds. Every such association violating the provisions of this section shall be fined not more than $500.
 All investments and deposits of any nonprofit benefit society shall be made in the name of the society. It shall invest its funds in securities permitted by the laws of the Virgin Islands for the investments of the assets of insurance companies, and at all times shall have on hand such reasonable cash reserve for the payment of claims to which it may become liable from time to time, as the Commissioner may deem necessary.
 Any nonprofit benefit society may admit to beneficial membership any person not less than 18 and not more than 65 years of age, who has been examined by a legally qualified practicing physician, and no person shall be admitted to membership until a certificate duly executed by such physician shall have been filed with the society. Such certificate shall be filed and preserved by the society as a permanent record.
 Any person who acts within the Virgin Islands as an officer, agent, or otherwise, for any society or association which shall have failed, neglected or refused to comply with, or shall have violated, any of the provisions of this chapter or shall have failed or neglected to procure from the Commissioner proper permit to transact business as provided herein, shall be fined not more than $500 or imprisoned not more than 180 days.
 This chapter shall be known and may be cited as the Virgin Islands International Insurers Act.
 For purposes of this chapter, the following defined terms shall apply unless defined elsewhere and not otherwise inconsistent: (a) Actuary means a person qualified as an actuary by examination of the Institute of Actuaries in England or the Faculty of Actuaries in Scotland, Casualty Actuarial Society, or the Society of Actuaries in the United States of America or Canada or other certifications of actuaries recognized by the SAM. Such Actuary need not be licensed in the Virgin Islands. (b) Advisory Board means an ad hoc board of five members appointed by and with full discretion of the SAM, possessing knowledge of technical and complex issues that arise relating to International Insurers Businesses which the SAM may use to evaluate the functioning of the program and to review applications for licensing. (c) Affiliated Company means any company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management. (d) Affiliated Person means an individual or an entity that is related to a parent or owner of an entity by virtue of being: a spouse, father, mother, child, brother or sister of such individual person; or the owner, parent or affiliated company, with respect to any such person which is an entity. (e) Alien Captive Insurance Company means an insurance company formed to write insurance business for its parents and affiliates and licensed pursuant to the laws of an alien jurisdiction, a non-United States domicile, which imposes statutory or regulatory standards in a form acceptable to the SAM on companies transacting the business of insurance in such jurisdiction. (f) Alternative Market Insurer Business means a company that may insure or reinsure the risks of parents, owners, affiliates, and related businesses, provided the insurance or reinsurance that it writes complies with the laws and regulations of the domicile for direct placement of risk, and may directly insure the members of an association which owns the Alternative Market Insurer. For purposes of this chapter, the term shall also include any International Insurance Company or Branch Exempt International Insurer as herein defined. (g) Association means any legal association of individuals, corporations, partnerships, or associations that has been in continuous existence for at least one year, which collectively, or through a trust or corporation formed by or on behalf of the Association: (1) owns, controls, or holds with power to vote 60% or more of the outstanding voting securities of an Association International Insurance Company incorporated as a stock insurer; or (2) has complete voting control over an Association International Insurance Company incorporated as a mutual insurer. (h) Association International Insurance Company means any International Insurance Company that insures risks of the member organizations of the Association and their affiliated companies or entities established by the Association. (i) Auditor means an individual who sits and successfully passes a financial examination and is inducted into financial charters and societies and has earned the designation as a Certified Public Accountant or similarly recognized definition in various countries and possesses such qualifications in insurance accountancy as the SAM, by written order, approves and is in good standing with respect to such qualifications. Such auditors need not be licensed in the Virgin Islands. (j) Branch Exempt International Insurer shall be a branch captive insurance company meeting the criteria set forth in Virgin Islands Code Title 13, section 853a and sections 1409A and 1415 of this Chapter, licensed by the SAM and qualifying to do business in the Virgin Islands as provided in this chapter. (k) Commissioner means the Commissioner of Insurance. (l) Exempt international insurer means any International Insurance Company or Branch Exempt International Insurer that makes an election under section 1415 of this title. (m) Group means a group of corporations, partnerships, other business entities, or individuals, and includes clients of an insurance agency or brokerage, that collectively or through a trust or corporation formed by or on behalf of the group or the agency or brokerage: (A) own, control, or hold with power to vote 60% or more to the outstanding voting securities of a Group International Insurance Company incorporated as a stock insurer; or (B) have complete voting control over a Group International Insurance Company incorporated as a mutual insurer. (n) Group International Insurance Company means an International Insurance Company that insures the risks of members of a Group and their affiliated companies. (o) Industrial Insured means an insured: (1) that procures the insurance of any risk or risks by use of the services of a full-time employee acting as an insurance manager or buyer; and (2) the aggregate annual premiums of which for insurance on all risks total at least $25,000; and (3) that has at least 25 full-time employees. (p) Industrial Insured International Insurance Company means any International Insurance Company that insures risks of the international insureds that comprise the Industrial Insured Group and their affiliated companies. (q) Industrial Insured Group means either of the following: (1) the Industrial Insureds that collectively, or through a trust or corporation formed by or on behalf of the industrial insured group: (A) own, control, or hold with power to vote 60% or more of the outstanding voting securities of an Industrial Insured International Insurance Company incorporated as a stock insurer; or (B) have complete voting control over an Industrial Insured International Insurance Company incorporated as a mutual insurer. (r) Insurance Business means the business of soliciting, effecting or carrying out contracts protecting persons against loss or liability for loss regarding a certain risk to which the object of the insurance may be exposed or to pay a sum of money or other thing of value upon the happening of a certain event, in return for a premium, and includes reinsurance business. (s) Internal Revenue Code means the United States Internal Revenue Code, Title 26, United States Code as amended. (t) International Insurance Company means any single-parent International Insurance Company, Association International Insurance Company, or Industrial Insured International Insurance Company or any Branch Exempt International Insurer thereof licensed under the provisions of this chapter to underwrite risks situated exclusively outside the Virgin Islands. (u) International Insurer Support Business shall mean any person or company licensed under this Chapter to conduct any one or more functions for International Insurance Companies as an insurance manager, insurance agent, or insurance broker only with respect to risks situated exclusively outside the Virgin Islands. (v) Member Organization means any individual, corporation, partnership, or association that belongs to an Association. (w) Mutual Insurer means an International Insurance Company that does not issue shares of capital stock and the surplus of which equivalent to capital is owned by the policy holders. (x) Parent means a corporation, partnership, or individual that directly or indirectly, through trusts, holding corporations, or otherwise, owns, controls, or holds with power to vote more than fifty percent (50%) of the outstanding voting securities of a single-parent International Insurance Company. (y) SAM means the Superintendent of Alternative Markets of the Office of the Commissioner of Insurance, Division of Alternative Markets and International Reinsurance, or the SAMs designee, as established in VI Code Title 22 Chapter 4. (z) Single-parent International Insurance Company means any International Insurance Company that insures the risk of its parent and affiliated companies. (aa) Stock Insurer means any International Insurance Company the capital of which is divided into shares and held by stockholders. (bb) Tax Benefit Certificate, certificate issued to a licensed International Insurance Company by the SAM entitling the business to the tax benefits provided for in this Chapter. (cc) United States risks constitute such risks situated within any State of the United States as such term is defined in section 953 of the Internal Revenue Code (as it applies to the Virgin Islands), or any regulation issued thereunder.
 (a) Any International Insurance Company and any International Insurer Support Business licensed by the Commissioner under this chapter shall be exempt from all other insurance laws of the Virgin Islands other than those contained in this chapter or contained in specific references contained in this Title. (b) With respect to International Insurance Companies, such exemption includes but is not limited to the following: (1) No International Insurance Company shall be required to join or otherwise contribute to or receive benefit from any pool, association, plan, guaranty or insolvency fund created or operating within this Territory. (2) No International Insurance Company shall be required to join a rating organization or otherwise be subject to rating rules of this Territory with respect to any policy issued by such International Insurance Company. (c) To the extent not otherwise provided for in this chapter and necessary for the implementation of its provisions and not otherwise inconsistent with the provisions herein, the general provisions of this title shall be applicable to all licensed International Insurance Companies and International Insurer Support Businesses. If a conflict arises between a provision of Title 22 and a provision of this chapter, the provisions of this chapter shall control.
 (a) An International Insurance Company, before commencing business, shall obtain a license from the SAM to do any and all insurance comprised in section 1417 of this chapter; provided, however, that: (1) no Single-parent International Insurance Company may insure directly risks other than those of its parent(s) and affiliated companies that in the aggregate comprise up to not more than 90% of the companys gross written premium in any one fiscal year, exclusive of the reinsurance premiums; (2) no Association International Insurance Company may insure directly risks other than those of the member organizations of its association and their affiliated companies that in the aggregate comprise more than 90% of the companys gross written premium in any one fiscal year, exclusive of reinsurance premiums; (3) no Industrial Insured International Insurance Company may insure directly risks other than those of the Industrial Insured Group and their affiliated companies that in the aggregate comprise more than 90% of the companys gross written premium in any one fiscal year, exclusive of reinsurance premiums; (4) no International Insurance Company may provide personal motor vehicle or homeowners insurance coverage or any component thereof; (5) no International Insurance Company may accept or cede reinsurance except as provided in section 1413 of this title; and (6) any International Insurance Company may provide life, accident, health, disability, employers liability, employee benefits, and workers compensation insurance to its parent(s) and affiliated companies, its member organizations or industrial insureds, as applicable. (b) Any International Insurance Company shall comply with the following: (1) Unless limited by statutory or regulatory provision, an International Insurance Company may hold meetings within or without the US Virgin Islands and by telephonic, electronic or cyber conference mechanism, provided its Board of Directors shall hold at least one meeting each year in the Virgin Islands; (2) It shall maintain its principal place of business in the Virgin Islands or shall authorize an International Insurer Support Business to conduct its insurance business within the Territory. Applicants shall designate a registered agent upon whom process may be served in all cases, and the name and business address of the agent shall be filed with the Commissioner of Insurance on behalf of any International Insurance Company, the business of which it is authorized to conduct. Whenever such registered office of the International Insurance Company or International Insurer Support Business cannot with reasonable diligence be ascertained, the Commissioner of Insurance shall be deemed to be the agent of such International Insurance Company or International Insurer Support Business upon whom any process, notice, or demand may be served. (c)  (1) Before receiving a license, an International Insurance Company shall file with the SAM, appropriate documents for filing its articles of incorporation, charter, registration statement, or trade name registration or a certified copy of its charter and bylaws, a statement under oath of its President and Secretary showing its financial condition, and any other information, documents, or statements required by the SAM. (2) In addition to the information required by subsection (c)(1) of this section, each applicant International Insurance Company shall file with the SAM evidence of the following: (A) the amount and liquidity of its assets relative to the risks to be assumed; (B) the adequacy of the expertise, experience, and character of the person or persons who will manage it; (C) the overall soundness of its plan of operation certified by an independent Actuary; (D) the adequacy of the loss prevention programs of its parent, member organizations, or industrial insureds as applicable; and (E) such other factors deemed relevant by the SAM in ascertaining whether the proposed International Insurance Company will be able to meet its policy obligations. (F) In addition to the information required by the provisions above, an applicant protected cell insurance company shall file with the SAM: (i) a business plan demonstrating how the applicant will account for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the SAM, and how it will report the experience to the SAM; (ii) a statement acknowledging that all financial records of the protected cell insurance company, including records pertaining to any protected cells, must be made available for inspection or examination by the SAM; (iii) all contracts or sample contracts between the protected cell insurance company and any participants; and (iv) evidence that expenses will be allocated to each protected cell in an equitable manner. (d) If the SAM is satisfied that the documents and statements that such applicant International Insurance Company has filed is in compliance with the provisions of this chapter, the SAM shall grant a license authorizing it to conduct insurance business as an International Insurance Company until December 31st of each year. Such license shall be renewed annually within 30 days of the end of the calendar year upon payment of the annual license fee, provided the International Insurance Company is in good standing at such time.
 Each International Insurance Company shall pay to the SAM a nonrefundable application fee for examining, investigating, and processing its application for licensure, and the Commissioner is authorized to retain legal, financial, and examination services, the reasonable cost of which may be charged against the applicant. Such examination need not include an actuarial review if an independent actuary certification has been presented with the application, unless the SAM has reasonable cause to require further actuarial certification. In addition, the International Insurance Company shall pay an annual license fee commencing with the year of registration, such fee being first payable in full within thirty days of the date on which the license commences, and on or before January 30th of each calendar year that such license remains in effect. Upon request, pro rata annual license fees will be given consideration by the SAM for all applications for licenses issued during the last quarter of the calendar year. The nonrefundable application fee shall be a minimum of Five Thousand Dollars ($5,000.00) and the annual license fee shall be a minimum of Five Thousand Dollars ($5,000.00) and such annual fee shall be due upon issuance of the initial license and annually thereafter. Such fees may be altered or amended from time to time in the discretion of the SAM by regulations promulgated by the SAM.
 (a) No Single-parent International Insurance Company, Industrial Insured International Insurance Company incorporated as a stock insurer, or Association International Insurance Company incorporated as a stock insurer, shall be issued a license unless it shall possess and thereafter maintain unimpaired paid-in capital of: (1) in the case of a Single-parent International Insurance Company, not less than $75,000; (2) in the case of an Industrial Insured International Insurance Company incorporated as a stock insurer, not less than $100,000; (3) in the case of an Association International Insurance Company incorporated as a stock insurer, not less than $125,000; or (4) such sums as may be reasonably determined necessary for the maintenance of the insurance business of the International Insurance Company by the SAM at the time of application or as may be reviewed from time to time. (b) Such capital may be in the form of cash or an irrevocable letter of credit issued by a bank chartered by the Territory of the Virgin Islands, a local bank, a foreign bank, or a member bank of the United States Federal Reserve System properly qualified to do business in, and having a branch situated in, the Territory or similar financial or accredited investment institution situated in the Territory.
 No International Insurance Company shall be issued a license unless it shall possess and thereafter maintain free surplus of: (1) in the case of a Single-parent International Insurance Company, not less than $100,000; (2) in the case of an Industrial Insured International Insurance Company incorporated as a stock insurer, not less than $125,000; (3) in the case of an Association International Insurance Company incorporated as a stock insurer, not less than $250,000; (4) in the case of an Industrial Insured International Insurance Company incorporated as a mutual insurer, not less than $200,000; (5) in the case of an Association International Insurance Company incorporated as a mutual insurer, not less than $325,000; or (6) such sums as may be reasonably determined necessary for the maintenance of the insurance business of the International Insurance Company by the SAM at the time of application or as may be reviewed from time to time. Such surplus may be in the form of cash or an irrevocable letter of credit issued by a bank chartered by the Territory of the Virgin Islands, a local bank, a foreign bank, or a member bank of the United States Federal Reserve System, properly qualified to do business in, and having a branch situated in, the Territory or similar financial or accredited investment institution situated in the Territory.
 (a) No Single-parent International Insurance Company or Industrial Insured International Insurance Company shall be subject to any restrictions on allowable investments whatsoever; provided, however, that the SAM may prohibit or limit any investment that threatens the solvency or liquidity of any such company. (b) The investments of an Association International Insurance Company shall not be subject to restriction except that the SAM may, in his discretion, deny or refuse the valuation of goodwill or other investments of any Association International Insurance Company which do not have a readily ascertainable fair market value. The SAM shall have authority to limit or prohibit any investment or investments of any Association International Insurance company which may threaten the solvency or financial condition of such Association International Insurance Company. (c) The stock of a member organization that owns more than fifty percent (50%) of the equity of an Association International Insurance Company shall be valued at book value by using the equity method of accounting. (d) Bonds and other debt instruments held as investments by an Association International Insurance Company may be carried at cost or at amortized value when purchased at a discount.
 (a) An International Insurance Company that is domiciled or licensed to do business in any State of the United States, or that is otherwise subject to United States federal income taxation as if it were so domiciled or licensed, shall regularly employ in its books of accounts a detailed segregation of receipts, expenditures, assets, liabilities and net worth that clearly distinguishes the income derived from insuring United States risks from the income derived from insuring other foreign risks by first allocating such items which are specifically identifiable as pertaining exclusively to the United States risks. (b) Investment income earned on reserves pertaining to United States risks shall constitute investment income pertaining to United States risks. (c) For the purposes of this section: (1) segregated funds means a separate and distinct fund with separate and distinct assets maintained pursuant to subsection (2). (2) Every insurer that issues policies covering life insurance or annuities as defined in section 1417 shall maintain in respect of each class or category of life insurance or annuity business that it issues one or more segregated fund. (3) A segregated fund shall consist of money or securities in which trustees may invest trust money. (4) A segregated fund is available only to meet the liabilities arising under the life insurance or annuity policies in respect of which the segregated fund is maintained, except that money or securities in the segregated fund may, at the discretion of the insurers directors but subject to actuarial certification, be withdrawn from the segregated fund and paid into the shareholders fund, but the amount when so withdrawn shall not exceed in the aggregate the proportionate interest of the shareholders in the segregated fund.
 (a) A Single-parent International Insurance Company shall be incorporated as a stock insurer with its capital divided into shares and held by the stockholders. (b) An Association International Insurance Company or an Industrial Insured International Insurance Company may be incorporated: (1) as a stock insurer with its capital divided into shares and held by the stockholders; or (2) as a mutual insurer without capital stock, the governing body of which is elected by its member organizations or the members of its association. (c) An International Insurance Company shall have not less than three incorporators, of whom not less than one shall have been a resident of the Virgin Islands for a minimum of one year. (d) Before the articles of incorporation are transmitted to the Office of the Lieutenant Governor, the incorporators shall petition the SAM to issue a certificate setting forth his finding that the establishment and maintenance of the proposed International Insurance Company will promote the general good of the Virgin Islands. In arriving at such finding the SAM shall consider: (1) the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers and directors of the company; and (2) such other aspects as the SAM shall deem appropriate. (e) The articles of incorporation, such certificate, and the organization fee shall be presented to the SAM which shall thereupon file both the articles of incorporation and the certificate with the Office of the Lieutenant Governor-Division of Corporations and Trademarks. (f) The capital stock of an International Insurance Company incorporated as a stock insurer shall be issued at not less than par value, if so stated. (g) At least one of the members of the board of directors of an International Insurance Company incorporated in this Territory shall have been a resident of the Virgin Islands for a minimum period of one year. (h) Any International Insurance Company formed under the provisions of this chapter shall be organized in accordance with, and shall have the privileges and be subject to the provisions of the General Corporation Law, Title 13, Chapter 1, Virgin Islands Code, as well as the applicable provisions contained in this chapter. In the event of conflict between the provisions of said General Corporation Law, Title 13, Chapter 1, Virgin Islands Code, and the provisions of this chapter, the provisions of this chapter shall govern. The provisions of Title 22 of the Virgin Islands Code pertaining to dissolutions, mergers, consolidations, conversions, and mutualizations shall apply in determining the procedures to be followed by International Insurance Companies formed under this chapter in carrying out any of the transactions described therein, except that the SAM may waive or modify the requirements for public notice and hearing in accordance with rules which the SAM may adopt. (i) The SAM and the Office of the Lieutenant Governor, Division of Corporations and Trademarks, shall coordinate the various filings in their respective offices with the objective of finalizing the various applications for licenses and other requests for approvals so that the International Insurance Company or Branch Exempt International Insurer is formed as expeditously as possible.
 (a) Any Alien Captive Insurance Company, or Foreign Insurer seeking to establish a Branch Exempt International Insurer, as defined in paragraph (2), shall follow the criteria and procedures set forth in this subsection and section 1415 of the chapter and any regulations promulgated hereunder for qualifying to do business in the Territory as a Branch Exempt International Insurer. As used in this subsection, unless the context requires otherwise, the following definitions shall be applicable to Branch Exempt International Insurers, in addition to the definitions set forth in section 1401 of this chapter. (1) Branch business means any insurance business transacted by a Branch Exempt International Insurer in this Territory. (2) Branch Exempt International Insurer means an Alien Captive Insurance Company licensed by the SAM to transact the business of insurance in this Territory through a business unit with a principal place of business in this Territory. (3) Branch operation means any business operation of a Branch Exempt International Insurer in this Territory. (4) Foreign Insurer means an insurer domiciled in any state or territory other than the Territory of the Virgin Islands of the United States of America. (5) Territory means the Territory of the Virgin Islands of the United States of America. (b) The purpose of this section is to set forth the procedures for the licensing of a Branch Exempt International Insurer that is organized as a captive insurance company in a jurisdiction other than the Territory but that qualifies to do business in the Territory as a Branch Exempt International Insurer under this chapter and Corporation Law applicable to the Territory. These procedures shall apply equally to an Alien Captive Insurance Company or a Foreign Insurer. (c) Branch Exempt International Insurers domiciled outside the Territory may establish a Branch Exempt International Insurer in the Territory for purposes of insurance or reinsurance of the risks set forth in section 1403(a)(6) of this chapter, and the kinds of insurance authorized under section 1417 hereof. (d) An Alien Captive Insurance Company and a Foreign Insurer shall be subject to the formation and licensing requirements established by the SAM for a Branch Exempt International Insurer under this Chapter, including submitting a Petition for insurance of a Certificate of General Good called for by section 1409(d) of this chapter. The Alien Captive Insurance Company or Foreign Insurer may establish a Virgin Islands branch business entity for purposes of the Branch operations, and such entity shall be subject to the formation requirements set forth in section 1409 hereof and the qualification requirements established by the Office of the Lieutenant Governor, Division of Corporations and Trademarks under title 13 Virgin Islands Code section 401, provided that applicants in another jurisdiction shall be exempt from the residency requirements of section 1409(c) and (g) hereof; or may establish a branch operation through establishment of a Virgin Islands business entity according to qualification requirements set forth in section 1409 hereof and as may be established by the Office of the Lieutenant Governor, Division of Corporations and Trademarks under title 13 Virgin Islands Code, section 401. Each Branch Exempt International Insurer shall hold a meeting of the Board of Directors or other governing body of the Branch Exempt International Insurer in the Territory at least once every three (3) years. (e) The Alien Captive Insurance Company or the Foreign Insurer may submit its qualification papers to the Office of the Lieutenant Governor, Division of Corporations and Trademarks upon receiving a Certificate of Good standing from the SAM. It is the objective of the SAM that licensure by the SAM and qualification by the Office of the Lieutenant Governor shall be completed within forty-five (45) days of issuance of a Certificate of Good, and applicants shall be notified by the SAM or the Division of Corporations and Trademarks, if the proposed 45-day timeframe will be exceeded by either of those Offices and the reasons for exceeding the timeframe. (f) Each Branch Exempt International Insurer may authorize an International Insurer Support Business to conduct its branch business or other branch operations within the Territory in accordance with section 1403(b)(2) hereof. In addition, not less than once every three (3) years, in the discretion of the SAM, a representative of the Branch Exempt International Insurer as well as the International Insurer Support Business acting for the Branch Exempt International Insurer shall meet with the SAM in the Territory as to regulatory compliance issues. Notwithstanding this provision, the SAM retains the discretion to require representatives from the Branch Exempt International Insurer to attend meetings with the SAM in the Territory more frequently than once every three years if the SAM determines that such a meeting in the Territory is reasonably necessary for the SAM to monitor the entitys compliance with this chapter. (g) Notwithstanding any provision in this chapter to the contrary, with respect to the establishment of minimum capital and minimum surplus requirements for a Branch Exempt International Insurer, upon written application by the prospective licensee and in the discretion of the SAM, the SAM may take into account the amount of security posted by the Alien Captive Insurance Company or the Foreign Insurer in the jurisdiction in which it is domiciled as capital and surplus before the SAM determines the minimum capital and minimum surplus to be applicable to the Branch Exempt International Insurer. In the absence of the SAM exercising its discretion, section 1405 and 1406 of this chapter shall apply as to minimum capital and minimum surplus. (h) Each Branch Exempt International Insurer so established shall be subject to the benefits, obligations and regulations provided herein.
 (a) Any International Insurance Company licensed under this Chapter shall be required to file within 180 days of the end of its financial year, a balance sheet, income statement, and statement clearly reflecting that adequate reserves are maintained and such other financial statements as the SAM may determine are necessary. Upon request of the Company and showing of good cause, the SAM may extend the due date for filing. All financial statements shall be audited by an independent Auditor who shall attach an audit report on the International Insurance Companys financial condition and solvency. The adequacy of the reserves shall be determined and certified by an Actuary. The statements must be certified as true and accurate under the sworn signature of at least two directors of the International Insurance Company, one of whom must be a resident of this Territory, or two nonresident directors and an officer of the International Insurance Company or the International Insurer Support Business representing the International Insurance Company who is resident within the Territory. (b) If an Auditor has rendered other than an unqualified opinion on the financial condition of an International Insurance Company, the Auditor and the International Insurance Company shall both notify the SAM in writing within fifteen days of the issuance of such qualified opinion. (c) Failure to comply with this section shall be punishable by a fine of in an amount established by regulations by the SAM for such noncompliance by the International Insurance Company or revocation of the International Insurance Companys license, or both. (d) No other financial reporting by an International Insurance Company shall be necessary within this Territory, except as required by the Bureau of Internal Revenue.
 Other than a Single-Parent International Insurance Company at least once every five (5) years and whenever the SAM determines it to be necessary, prudent, or in the best interests of the Territory, he or his designee shall inspect and examine the affairs of an International Insurance Company to ascertain its financial condition, its ability to fulfill its obligations and whether it complies with the rules and regulations established with reference to this chapter. The expenses and charges of the examination shall be reimbursed by the International Insurance Company to the Territory. In the case of Branch Exempt International Insurers, any such audit shall only be of the Virgin Islands entity and may utilize and incorporate findings of an audit of the parent company.
 (a) The license issued to an International Insurance Company by this Territory may be suspended or revoked by the SAM for any of the following reasons: (1) insolvency or impairment of capital or surplus; (2) failure to meet the requirements of sections 1405 or 1406 of this chapter or any rules and regulations promulgated hereunder; (3) refusal or failure to submit an annual report, as required by section 1410 of this title, or any other report or statement required by law, regulation, or lawful order of the SAM; (4) failure to comply with the provisions of its own charter or bylaws; (5) failure to submit to an examination or any legal obligation relative thereto, as required by section 1411 of this title; (6) refusal or failure to pay the cost of examination as required by section 1411; (7) use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public good or to its policyholders; or (8) failure otherwise to comply with the laws of this Territory made applicable by this chapter to International Insurance Companies. (b) If the SAM finds, upon examination, hearing, or other evidence, that any International Insurance Company has committed any of the acts specified in subsection (a) of this section, the SAM may suspend or revoke such license if the SAM deems it in the best interest of the public and the policy-holders of such International Insurance Company.
 (a) Any International Insurance Company may cede reinsurance to any insurer or reinsurer or reinsurance pool approved by the SAM for this purpose, and may provide reinsurance on risks ceded by any other insurer or reinsurer or reinsurance pool. (b) Any International Insurance Company shall receive credit for reserves on risks or portions of risks ceded to approved reinsurers. (c) Any International Insurance Company may take credit for reserves on risks or portions of risks ceded to a pool, exchange, or association acting as a reinsurer. The SAM may require any such documents, financial information or other evidence that such pool, exchange, or association will be able to provide adequate security for its financial obligations.
 (a) Any International Insurer Support Business, before commencing business, shall apply to the SAM for a license. The license application shall contain such information, in addition to the information set forth below, as may be required by the SAM pursuant to duly promulgated regulations. (b) Any International Insurer Support Business applying for a license under this chapter shall file with the SAM the following documents, together with such other documents and information as the SAM may require pursuant to duly promulgated regulations: (i) in the case of an existing entity, a certified copy of its charter and bylaws, its most recent balance sheet and income statement; (ii) in the case of a newly-formed entity or a person, a business and financial plan demonstrating the expected financial performance for the following three years. (c) Any International Insurer Support Business shall attach to its license application a nonrefundable application fee to cover the cost of examining, investigating and processing its application for license. The amount of such application fee shall be determined and set forth in duly promulgated regulations by the SAM. In addition, an International Insurer Support Business licensed under the provisions of this chapter shall pay a license fee for the year of registration and a renewal fee for each year thereafter in an amount determined and set forth in duly promulgated regulations by the SAM. (d) An International Insurer Support Business formed in the Virgin Islands shall have the privileges and be subject to the provisions of the General Corporation Law of Title 13, Virgin Islands Code, as well as the applicable provisions contained in this chapter. The provisions of this chapter shall take precedence over the provisions of the General Corporation Law in the event of conflict.
 (a) Each International Insurance Company may make an Exempt Company Election under chapter 14 of Title 13 of this Code to be an exempt company subject to the provisions of such title and shall thereupon be granted a reduction in the income tax liability shown on its income tax return for each taxable year by 100 percent for such income that meets the requirements of sections 934 and 937(b) of the Internal Revenue Code of 1986, as amended, and any successor provisions to that Code, and the Treasury Regulations promulgated thereunder, as being from Virgin Islands sources or effectively connected with the conduct of a trade or business within the Virgin Islands. (b)  (1) Every person who receives a payment or allocation subject to the tax imposed by Sections 704, 871(a)(1), 881, 884, or 1446 of the Internal Revenue Code, as applicable in the Virgin Islands, from an International Insurance Company is exempt from the payment of 100 percent of such tax. (2) An International Insurance Company is exempt from the requirement to withhold tax pursuant to sections 1441, 1442, and 1446 of the Internal Revenue Code as applicable in the Virgin Islands to the extent that such payments are exempt from the tax described in paragraph (1). (c) An International Insurance Company is exempt from any other taxes imposed by the Virgin Islands, including without limitation real property used in the business of the International Insurance Company, gross receipts taxes, excise taxes, and premium tax. (d) The Office of the Lieutenant Governor is authorized and directed to provide any International Insurance Company, within sixty (60) days of a request by the International Insurance Company to do so, a contract signed by the Lieutenant Governor, on behalf of the Government of the Virgin Islands, stating that the benefits of this section as they exist upon the date of the contract shall be and remain available to said International Insurance Company, and shall not be reduced, until twenty (20) years have elapsed so long as the exempt company is: (1) in compliance with all laws, rules and regulations of the Virgin Islands; and (2) current in the payment of taxes and fees to the Virgin Islands. The contract shall further state that the Government shall not adopt any legislation impairing or limiting the obligation of such contract. (e) The contract shall become effective with regard to an International Insurance Company upon its acceptance by the International Insurance Company. Such acceptance shall be indicated by the signature of an officer or the registered agent of the International Insurance Company on a copy of the contract, which copy shall be returned to the Office of the Lieutenant Governor and shall remain on file in that office.
 No proprietary information furnished to the SAM by any applicant or licensed International Insurance Company, any International Insurer Support Business, or any auditor, actuary, agent, broker, or other duly authorized representative acting on behalf of any applicant, licensed International Insurance Company, or International Insurer Support Business, shall be disclosed by the SAM to any party, except as follows: (a) to any branch of the Virgin Islands Government in lawful furtherance of the requirements of this Chapter; (b) to the United States Internal Revenue Service or the Virgin Islands Bureau of Internal Revenue pursuant to the laws of either jurisdiction; or (c) to any person pursuant to a lawful order entered by a court of the Virgin Islands or the United States, directing the SAM to disclose specified information to the requesting party. Notwithstanding any of the foregoing, the SAM, in his discretion, shall be permitted to confirm to any party the existence, registered name, identities of registered owners and identities of registered managers, auditors, actuaries and legal counsel of any licensed International Insurance Company.
 The following kinds or lines of insurance that may be underwritten by a licensed International Insurance Company subject to the provisions of this chapter shall be as follows: (1) Life insurance means every insurance upon the lives of human beings, and every insurance pertaining thereto, including the granting of endowment benefits, additional benefits in the event of death by accident, additional benefits to safeguard the contract from lapse, or the providing of a special surrender value, upon total and permanent disability of the insured, and optional modes of settlement of proceeds. (2) Annuities means all agreements to make periodic payments for a period certain or depending upon the continuance of human life or a combination of the two, except payments made under the authority of paragraph one hereof. (3) Accidents and Health insurance means (i) insurance against death or personal injury by accident or by any specified kind or kinds of accident and insurance against sickness, ailment or bodily injury, including insurance providing disability benefits except as specified in item (ii) hereof; and (ii) non-cancelable disability insurance, meaning insurance against disability resulting from sickness, ailment or bodily injury, but excluding insurance solely against accidental injury under any contract which does not give the insurer the option to cancel or otherwise terminate the contract at or after one year from its effective date or renewal date. (4) Fire insurance means insurance against loss of, or damage to, any property resulting from fire, including loss or damage incident to the extinguishment of a fire or to the salvaging of property in connection therewith. (5) Miscellaneous property insurance means insurance against loss of, or damage to, property resulting from: (A) lightning, smoke or smudge, windstorm, tornado, cyclone, earthquake, volcanic eruption, rain, hail, frost and freeze, weather or climatic conditions, excess or deficiency of moisture, flood, the rising of the waters of the ocean or its tributaries; (B) insects, or blights, or disease of such property except animals; (C) electrical disturbance causing or concomitant with a fire or an explosion in public service or public utility property; (D) bombardment, invasion, insurrection, riot, civil war, or commotion, military or usurped power, any order of a civil authority made to prevent the spread of a conflagration, epidemic or catastrophe, vandalism, or malicious mischief, strike or lockout, collapse from any cause, or explosion; but excluding any kind of insurance specified in paragraph nine hereof, except insurance against loss of, or damage to, property resulting from: (i) explosion of pressure vessels except steam boilers of more than fifteen pounds pressure) in buildings designed and used solely for residential purposes by not more than four families; (ii) explosion of any kind originating outside of the insured building or outside of the building containing the property insured; (iii) explosion of pressure vessels which do not contain steam or which are not operated with steam coils or steam jackets; or (iv) electrical disturbance causing or concomitant with an explosion in public service or public utility property; (E) lateral or vertical subsidence of the earth caused by past or present mining operations. (6) Water damage insurance means insurance against loss or damage, by water or other fluid or substance, to any property resulting from the breakage or leakage of sprinklers, pumps, or other apparatus erected for extinguishing fires or of water pipes or other conduits or containers, or resulting from casual water entering through leaks or openings in buildings or by seepage through building walls, but excluding loss or damage resulting from flood or the rising of the water of the ocean or its tributaries; and including insurance against accidental injury of such sprinklers, pumps, fire apparatus, conduits or containers. (7) Burglary and theft insurance means: (A) Insurance against loss of, or damage to, any property resulting from burglary, theft, larceny, robbery, forgery, fraud, vandalism malicious mischief, confiscation or wrongful conversion, disposal or concealment by any person, or from any attempt thereof; (B) Insurance against loss of, or damage to, moneys, coins, bullion, securities, notes, drafts, acceptances or any other valuable papers or documents, resulting from any cause, except while in the custody or possession of and being transported by any carrier for hire, or in the mail; and (C) Insurance of individuals by means of an all-risk type of policy commonly known as the Personal Property Floater against any kind and all kinds of loss of, or damage to, or loss of use of, any personal property other than merchandise. (8) Glass insurance means insurance against loss, of or damage to, glass and its appurtenances resulting from any cause. (9) Boiler and machinery insurance means insurance against loss of, or damage to, any property of the insured, resulting from explosion of or injury to: (A) any boiler, heater, or other fired pressure vessel; (B) any unfired pressure vessel; (C) pipes or containers connected with any such boilers or vessels; (D) any engine, turbine, compressor, pump, or wheel; (E) any apparatus generating, transmitting or using electricity; and (F) any other machinery or apparatus connected with, or operated by, any such boilers, vessels, or machines; including the incidental power to make inspections of and issue certificates of inspection upon, any such boilers, apparatus, and machinery, whether insured or otherwise. (10) Elevator insurance means insurance against loss of, or damage to, any property of the insured, resulting from ownership, maintenance, or use of elevators, except loss or damage by fire. (11) Animal insurance means insurance against loss of, or damage to, any domesticated or wild animal resulting from any cause. (12) Collision insurance means insurance against loss of, or damage to, any property of the insured resulting from collision of any other object with such property, but excluding collision to or by elevators, or to or by vessels, craft, piers or other instrumentalities of ocean or inland navigation. (13) Personal injury liability insurance means insurance against legal liability of the insured, and against loss, damage or expense incident to a claim of such liability including the insurers obligation to pay medical, hospital, surgical, and disability benefits to injured persons, and funeral and death benefits to dependents, beneficiaries or personal representatives of persons who are killed, irrespective of legal liability of the insured, arising out of death or injury of any person, or arising out of injury to the economic interests of any person, as the result of negligence in rendering expert, fiduciary or professional service, but excluding any kind of insurance specified in paragraph (15) of this section, except insurance to protect an insured against liability for indemnification or contribution to a third party held responsible for injury to the insureds employee arising out of and in the course of employment when such insurance is written pursuant to this paragraph and not written pursuant to paragraph (15) of this section. (14) Property damage liability insurance means insurance against legal liability of the insured, and against loss, damage or expense incident to a claim of such liability, arising out of the loss or destruction of, or damage to, the property of any other person, but not including any kind of insurance specified in paragraph (13) or (15) of this section. (15) Workers compensation and employers liability insurance means insurance against the legal liability, under common law or statute or assumed by contract, or any employer for the death or disablement of, or injury to, his employee. (16) Fidelity and surety insurance means: (A) Guaranteeing the fidelity of persons holding positions of public or private trust; and indemnifying banks, thrifts, brokers and other financial institutions against loss of money, securities, negotiable instruments, other specified valuable papers and tangible items of personal property caused by larceny, misplacement, destruction or other stated perils including loss while being transported in an armored motor vehicle or by messenger; and insurance for loss caused by the forgery of signatures on, or alteration of, specified documents and valuable papers; (B) Insurance against losses that financial institutions become legally obligated to pay by reason of loss of customers property from safe deposit boxes; (C) Any contract bond, including a bid, payment or maintenance bond or a performance bond where the bond is guaranteeing the execution of any contract other than a contract of indebtedness or other monetary obligation; (D) An indemnity bond for the benefit of a public body, railroad, or charitable organization; a lost security or utility payment bond; (E) Becoming surety on, or guaranteeing the performance of, any lawful contract, not specifically provided for in this paragraph, except (i) mortgage guaranty insurance as defined in paragraph (23) of this section, or (ii) a contract that falls within the definition of financial guaranty insurance as defined in paragraph (25) of this section; and (F) Becoming surety on, or guaranteeing the performance of, bonds and undertakings required or permitted in all judicial proceedings or otherwise by law allowed, including surety bonds accepted by states and municipal authorities in lieu of deposits as security for the performance of insurance contracts. (17) Credit insurance means: (A) Indemnifying merchants or other persons extending credit against loss or damage resulting from nonpayment of debts owed to them for goods and services provided in the normal course of their business, including the incidental power to acquire and dispose of debts so insured, and to collect any debts owed to such insurer or to the insured, but no insurance may be written as credit insurance if it falls within the definition of financial guaranty insurance as defined in paragraph (25) of this section; (B) Indemnifying any person for expenses disbursed or to be disbursed under a contract in connection with the cancellation of a catered affair; or (C) Indemnifying any person for tuition expense disbursed or to be disbursed under a contract in connection with his dismissal or withdrawal from an educational institution; or indemnifying elementary or secondary schools, whether public, private, profit or nonprofit, providing education in consideration of a tuition charge or fee, against loss or damage in the event of nonpayment of the tuition charges or fees of a student or pupil dismissed, withdrawn, or leaving before the end of the school year for which the insurance is written. (18) Title insurance means insuring owners of, and other persons lawfully interested in, real property and chattels real against loss by reason of defective titles and encumbrances, and insuring the correctness of searches for all instruments, liens, or charges affecting the title to such property, including power to procure and furnish information relative thereto, and such other incidental powers as are specifically granted in this chapter. (19) Motor vehicle and aircraft physical damage insurance means insurance against loss of or damage to motor vehicles or aircraft and their equipment resulting from any cause; and insurance reimbursing a driver for costs including replacement car rental, commercial transportation and accommodations resulting from an automobile accident or mechanical breakdown occurring fifty miles or more from the drivers principal place of residence or garaging. (20) Marine and inland marine insurance means insurance against any and all kinds of loss of, or damage to: (A) Vessels, hulls, crafts, aircrafts, cars, automobiles, trailers, and vehicles of every kind, and all goods, freights, cargoes, merchandise, effects, disbursements, profits, moneys, bullion, precious stones, securities, choses in action, evidences of debt, valuable papers, bottomry and respondentia interests and all other kinds of property and interests therein, in respect to, appertaining to or in connection with any and all risks or perils of navigation, transit, or transportation, including war risks, on or under any seas or other waters, on land or in the air, or while being assembled, packed, crated, baled, compressed, or similarly prepared for reshipment or while awaiting the same or during any delays, storage, transshipment, or reshipment incident thereto, including marine builders risks and all personal property floater risks; (B) Person or property in connection with or appertaining to marine, inland marine, transit or transportation insurance, including liability for loss of, or damage to either, arising out of, or in connection with the construction, repair, operation, maintenance or use of the subject matter of such insurance, but not including life insurance or surety bonds nor insurance against loss by reason of bodily injury to the person arising out of ownership, maintenance or use of automobiles; (C) Precious stones, jewels, gold, silver, and other precious metals, whether used in business or trade or otherwise and whether the same be in course of transportation or otherwise; and (D) Bridges, tunnels and other instrumentalities of transportation and communication excluding buildings, their improvements and betterments, furniture and furnishings, fixed contents and supplies held in storage, including auxiliary facilities and equipment attendant thereto; piers; wharves, docks and slips; other aids to navigation and transportation, including dry docks and marine railways. For purposes of this chapter, inland marine insurance shall not include insurance of vessels, craft, their cargoes, marine builders risks, commonly insured only under ocean marine insurance policies. (21) Marine protection and indemnity insurance means insurance against, or against legal liability of the insured for loss, damage, or expense arising out of or incident to, the ownership, operation, chartering, maintenance, use, repair, or construction of any vessel, craft, or instrumentality in use in ocean or inland waterways, including liability of the insured for personal injury, illness or death, or for loss of, or damage to, the property of another person. (22) Residual value insurance means insurance issued in connection with a lease or contract which sets forth a specific termination value at the end of the term of the lease or contract for the property covered by such lease or contract, and which insures against loss of economic value of tangible personal property or improvements thereto except loss due to physical damage to property. (23) Mortgage guaranty insurance means insurance against financial loss by reason of nonpayment of any sum required to be paid under the terms of any instrument of indebtedness secured by a lien on real estate. (24) Credit unemployment insurance means insurance on a debtor in connection with a specified loan or other credit transaction outside this Territory to provide payments to a creditor in the event of unemployment of the debtor for the installments or other periodic payments becoming due while a debtor is unemployed. (25) Financial guaranty insurance means a surety bond, insurance policy or indemnity contract, and any guaranty similar to the foregoing, under which loss is payable, upon proof of occurrence of financial loss, to an insured claimant, obligee or indemnitee as a result of any of the following events: (A) failure of any obligor on any debt instrument or other monetary obligation including common or preferred stock guaranteed under a surety bond, insurance policy or indemnity contract to pay when due, principal, interest, premium, dividend, or purchase price of or on, or other amounts due with respect to such instrument or obligation when such failure is the result of a financial default or insolvency, regardless of whether such obligation is incurred directly or as guarantor by or on behalf of another obligor that has also defaulted; (B) changes in the levels of interest rates, whether short or long term or the differential in interest rates between various markets or products; (C) changes in the rate of exchange of currency; (D) changes in the value of specific assets or commodities, financial, or commodity indices, or price levels in general; or (E) other events which the Commissioner determines are substantially similar to any of the foregoing. (26) Other or Substantially similar kind of insurance means such insurance as the Commissioner determines to be substantially similar to one of the foregoing kinds of insurance and which, upon such determination, shall be deemed to be included in that kind of insurance or such other lines of insurance as the Commissioner deems appropriate for licensing.
 The SAM may establish, and from time to time amend, such rules and regulations relating to International Insurance Companies and International Insurer Support Businesses as are necessary to enable the SAM to carry out the provisions of this chapter.
 Violation of any provision in this chapter shall be subject to the penalties provided for in chapter 1, section 7 of this Title.
 Notwithstanding any provision to the contrary, any existing and licensed International Insurance Company and International Insurer Support Business on the effective date of this section shall not be subject to any amended provisions enacted herewith that may adversely affect, impair or limit the benefits provided prior to the amendments enacted herewith.
 The purpose of this subchapter is to provide a basis for the creation of protected cells by an Exempt International Insurer for one or more of the following uses: (a) As one means of accessing alternative sources of capital and alternative vehicles for insurance programs; (b) For providing some or all of the benefits of an international insurance company for insureds for which the creation of a stand-alone international insurance company is not feasible or practical; (c) As one means of providing access to a program of insurance.
 As used in this Subchapter: (a) Commissioner means the Commissioner of Insurance. (b) Company means Protected Cell Company. (c) General Account means the assets and liabilities of a protected cell company other than Protected Cell Assets and Protected Cell Liabilities. (d) International Insurance Company means an insurance company established under the provisions of this chapter. (e) Protected Cell means an entity created either by the allocation of one or more shares in an International Insurance Company, or as a separate corporation subject to an operating agreement with an International Insurance Company. A protected cell shall have attributed to it assets and liabilities that are segregated and insulated from the assets and liabilities of the International Insurance Company that formed it and of all of the other protected cells that have been or may be formed by that International Insurance Company pursuant to the provisions of this subchapter. (f) Protected Cell Account means a specifically identified bank or custodial account established by a Protected Cell for the purpose of physically segregating the Protected Cell Assets of one Protected Cell from the Protected Cell Assets of other protected cells within the same company and from the assets of the International Insurance Company with which it is associated. A Protected Cell may hold assets, including but not limited to, real estate and shares in any other corporation, in which case the title to such assets will be held in the name of the Protected Cell and will form part of its Protected Cell Account. (g) Protected Cell Assets means all assets identified with and attributable to a specific protected cell of a Protected Cell Company, including assets physically segregated in a Protected Cell Account. (h) Protected Cell Company means an International Insurance Company which has one or more Protected Cells. (i) Protected Cell Liabilities means all liabilities identified with and attributable to a specific Protected Cell Company. (j) SAM means the Superintendent of Alternative Markets of the Office of the Commissioner of Insurance, Division of Alternative Markets and International Reinsurance, or the SAMs designee as established in VI Code Title 22 Chapter 4.
 (a) An International Insurance Company may establish one or more protected cells with prior written approval of the SAM of a plan of operation for each protected cell and either: (1) by the allocation of one or more shares in the International Insurance Company to the owners of the cell. Such shares may be, or be part of, a special series of shares and may be ordinary or preferred shares, with or without voting rights. There shall be a shareholders agreement that sets out the terms under which the cell operates and such agreement shall be approved by the SAM prior to its coming into effect; or (2) by the incorporation of a separate corporation the sole purpose of which is to function as a cell of the International Insurance Company and which is bound by the terms of an operating agreement between the cell corporation and the International Insurance Company with which it is associated. (b) Upon the written approval of the SAM the International Insurance Company may, in accordance with the approved plan and agreements allocate shares or incorporate a corporation to form one or more Protected Cells. Upon establishment of each cell the International Insurance Company may attribute to the Protected Cell both assets and insurance obligations to allow it to conduct its business in accordance with said plan and agreement. (c) Each Protected Cell of a Protected Cell Company shall have its own distinct name or designation, which shall include the words: Protected Cell. The Company shall transfer all physical assets attributable to each Protected Cell to one or more separately established and identified Protected Cell Accounts, bearing the name or designation of that Protected Cell. Protected Cell Assets shall be held in such Protected Cell Accounts for the purpose of satisfying the obligations of that Protected Cell. (d) All sales, exchanges, transfers, or other attributions of assets or liabilities between a Protected Cell and the General Account or between other Protected Cells shall be in accordance with the plan of operation approved by the Commissioner or shall be otherwise approved by the Commissioner. Unless otherwise approved by the Commissioner, no sale, exchange, transfer, or other attribution of assets or liabilities may be made by a Company between any of its Protected Cells or between the Companys General Account and one or more of its Protected Cells unless, in the case of attribution to a Protected Cell, the attribution is made solely to establish the Protected Cell or, in the case of an attribution from a Protected Cell to the Companys General Account the attribution is made solely to support the Companys insurance obligations which are the subject of the business of the Protected Cell. Any sale, exchange, transfer, or other attribution of assets and liabilities between a General Account and a Protected Cell or between Protected Cells shall be in cash or readily marketable securities with established market values unless otherwise approved in advance in writing by the Commissioner. (e) Each Protected Cell shall pay to the Alternative Market and International Reinsurance Revolving Fund a separate nonrefundable fee of not to exceed $500 for examining, investigating and processing its application for approval by the SAM, and the SAM is authorized to retain legal, financial, actuarial and other services needed to review the application, the reasonable cost of which may be charged against the applicant. Such examination need not include an actuarial review if an independent actuary certification has been presented with the application, unless the SAM has reasonable cause to require further actuarial certification. In addition, the Protected Cell shall pay an annual license fee commencing with the year of registration, such fee being first payable within 30 days of the date on which approval is granted and on or before 30th January of each calendar year for which such approval remains in effect, except that the first annual fee may be reduced in proportion to the period remaining from the date on which approval is granted to the end of that calendar year. The amount of such application and licensing fees shall be set by the SAM and shall be set forth in regulations to be published by the SAM in accordance with Virgin Islands Code, Title 3, Chapter 35. Such fees may be altered from time to time in the discretion of the SAM. (f) The creation of a Protected Cell does not create, in respect of that Protected Cell, a legal person separate from the Company. Amounts attributed to a Protected Cell under this subchapter, including assets transferred to a Protected Cell Account, are owned by the Company and Company may not be, nor hold itself out to be, a trustee with respect to those Protected Cell Assets or that Protected Cell Account. Notwithstanding the foregoing, the Company may allow for a security interest to attach to Protected Cell Assets or a Protected Cell Account when in favor of a creditor of the Protected Cell and otherwise allowed under applicable law. (g) A Protected Cell that is formed as a corporation is a separate legal entity that is bound by its own bylaws and by agreement with the International Insurance Company that formed it. Each corporate Protected Cell shall have at least three directors, one of whom shall be appointed by the International Insurance Company that incorporated it. Each corporate protected cell shall be a taxable entity in its own right and may make an Exempt Company Election under VI Code Title 13 Chapter 14 to be an exempt company subject to the provisions of such title and shall be entitled to the rights and tax benefits provided in section 1415 of this chapter. (h) Nothing in this subchapter shall be construed to prohibit the Company from contracting with or arranging for an investment advisor, commodity trading advisor, or other third party to manage the Protected Cell Assets of a Protected Cell, provided that all remuneration, expenses, and other compensation of the third party advisor or manager be payable from the Protected Cell Assets of that Protected Cell and not from the Protected Cell Assets of other Protected Cells or the assets of the Companys General Account. Any such contract shall clearly reference the Protected Cell or the cells for which the contract has been arranged and shall contain a nonrecourse provision in favor of the Company that prohibits the contracting party from seeking recourse against, or attaching, the assets of the General Account, or the assets of another Protected Cell, to satisfy the obligations of any one or more Protected Cells which are the subject of such contract. (i) Any International Insurance Company which is a Protected Cell Company shall establish such administrative and accounting procedures as are necessary to properly identify the one or more Protected Cells of the Company and the Protected Cell Assets and Protected Cell Liabilities attributable thereto. It shall be the duty of the Directors of a Protected Cell Company to: 1) keep Protected Cell Assets and Protected Cell Liabilities separate and separately identifiable from the assets and liabilities of the Companys General Account; and 2) to keep Protected Cell Assets and Protected Cell Liabilities attributable to one Protected Cell separated and separately identifiable from the Protected Cell Assets and Protected Cell Liabilities attributable to other Protected Cells. Notwithstanding the foregoing, and subject to the provisions of this subchapter, the remedy of tracing shall be applicable to Protected Cell Assets when commingled with Protected Cell Assets of other Protected Cells or the assets of the Companys General Account. (j) The Protected Cell Company shall, when establishing a Protected Cell, attribute to the Protected Cell assets with a value at least equal to the reserves and other insurance liabilities attributed to that Protected Cell.
 (a) The Protected Cell Assets of any Protected Cell may not be charged with liabilities arising out of any other business of the International Insurance Company that formed it or of any of the other Protected Cells that are or may be formed by that International Insurance Company. All contracts or other documentation reflecting obligations of a Protected Cell to the General Account shall clearly indicate that only the assets of the Protected Cell are available for the obligations of the Protected Cell. (b) Unless otherwise approved by the SAM, assets attributed to a Protected Cell must be valued at their market value on the date of valuation, or if there is no readily available market, then as provided in the contract or the rules or other written agreement applicable to the Protected Cell. (c) The income, gains and losses, realized or unrealized, from Protected Cell Assets and Protected Cell Liabilities must be credited to or charged against the Protected Cell without regard to other income, gains, or losses of the International Insurance Company that formed it, including income, gains, or losses of other Protected Cells. Amounts attributed to any Protected Cell and accumulations thereon may be invested and reinvested at the discretion of the International Insurance Company that formed it and the investments in any Protected Cell or Cells may not be taken into account in applying the investment limitations otherwise applicable to the investments of the International Insurance Company that formed it. (d) In all cases where a Protected Cell engages in an insurance securitization or reinsurance transaction, the financial instrument or reinsurance agreement effecting such securitization or transaction shall contain provisions identifying the Protected Cell to which the securitization or transaction will be attributed. In addition, the financial instrument or reinsurance agreement shall clearly disclose that the assets of that Protected Cell are only available to pay obligations of that Protected Cell. Notwithstanding the foregoing, and subject to the provisions of this Act and any other applicable law, rule or regulation, the failure to include such language in the financial instrument or reinsurance agreement shall not be used as the sole basis by creditors, reinsurers, or other claimants to circumvent the provisions of this subchapter. (e) At the cessation of business of a Protected Cell, and in the absence of any placement under administrative supervision or order of rehabilitation or liquidation attributable to that Protected Cell or the Protected Cell Company, the Protected Cell Company shall voluntarily wind up the Protected Cell in accordance with a plan approved by the SAM.
 (a) Protected Cell Assets shall only be available to the creditors of the Company who are the creditors in respect of that Protected Cell and shall thereby be entitled, in conformity with the provisions of this subchapter, to have recourse to the Protected Cell Assets attributable to that Protected Cell, and shall be absolutely protected from the creditors of the Company who are not creditors in respect of that Protected Cell and, who accordingly, shall not be entitled to have recourse to the Protected Cell Assets attributable to that Protected Cell. Creditors of a Protected Cell shall not be entitled to have recourse against the Protected Cell Assets of other Protected Cells or the assets of the Companys General Account. (b) Where an obligation of a Protected Cell Company to a person arises from a transaction, or is otherwise imposed, in respect of a particular Cell, (1) that obligation of the Company shall extend only to, and the person shall, in respect of that obligation, be entitled to have recourse only to the Protected Cell Assets attributable to that Protected Cell, and (2) that obligation of the Company shall not extend to, and that person shall not, in respect of that obligation, be entitled to have recourse to the Protected Cell Assets of any other Protected Cell or the assets of the Companys General Account. (c) Where an obligation of a Protected Cell Company relates solely to the General Account, the obligation of the Company shall extend only to, and that creditor shall, in respect of that obligation, be entitled to have recourse only to the Companys General Account. (d) A Protected Cell shall only be authorized to assume an insurance obligation directly from another Protected Cell or the Companys General Account and under no circumstances shall a Protected Cell be authorized to issue insurance policies or contracts directly to policyholders or have any obligation to the policyholders of the Companys General Account. Nothing in this section shall affect the activities or obligations of a Companys General Account. (e) In no event shall the establishment of one or more Protected Cells alone constitute or be deemed to be a fraudulent conveyance, an intent by the Company to defraud creditors or the carrying out of business by the Company under any other fraudulent purpose.
 (a) Notwithstanding any contrary provision of this title, the rules and regulations promulgated thereunder, or any other applicable law or regulation, upon any order of conservation, rehabilitation, or liquidation of a Protected Cell Company, the receiver shall be bound to deal with the Protected Cell Companys assets and liabilities, including Protected Cell Assets and Protected Cell Liabilities, in accordance with the requirements set forth in this subchapter. (b) With respect to amounts recoverable under any insurance securitization or reinsurance transaction entered into or outstanding in any Protected Cell Company the amount recoverable by the receiver shall not be reduced or diminished as a result of the placement under an order of conservation, rehabilitation, or liquidation of a Protected Cell Company or any of its Protected Cells, notwithstanding any provisions to the contrary in the financial instrument governing such securitization, insurance or reinsurance transaction.
 The SAM may promulgate rules and regulations necessary to effectuate the purposes of this Act.
 This chapter may be cited as The Virgin Islands Credit Reinsurance Act.
 The following terms have the following meaning: (a) An Assuming insurer means the company that assumes the risks from the insurance policy portfolio passed from a ceding insurer. (b) A Ceding insurer means an insurance company that passes a part or all of its risks from its insurance policy portfolio to a reinsurance firm known as the assuming insurer. (c) Commissioner means the Commissioner of Insurance of the Virgin Islands. (d) Reinsurance means the insurance of an insurance company. In a reinsurance transaction, the ceding insurer pays the premium to the re-insurer (assuming insurer) for the shared risk, and the assuming insurer guarantees the amount payable by the assuming insurer if a specified event happens. (e) Substantially similar means standards that equal or exceed the standards set in this chapter, as determined by the Commissioner.
 Credit for reinsurance is allowed a domestic ceding insurer as either an asset or a reduction from liability on account of reinsurance ceded only when the reinsurer meets the requirements of subsections (a), (b), (c), (d), (e) or (f) of this section; but the Commissioner may adopt by regulation pursuant to section 1446(b) specific additional requirements relating to or setting forth: (1) the valuation of assets or reserve credits; (2) the amount and forms of security supporting reinsurance arrangements described in section 1446; or (3) the circumstances pursuant to which credit will be reduced or eliminated. Credit is allowed under subsections (a), (b) or (c) of this section only as respects cessions of those kinds or classes of business which the assuming insurer is licensed or otherwise permitted to write or assume in its state of domicile or, in the case of a United States branch of an alien assuming insurer, in the state through which it is entered and licensed to transact insurance or reinsurance. Credit is allowed under subsections (c) or (d) of this section only if the applicable requirements of subsection (g) have been satisfied. (a) Credit is allowed when the reinsurance is ceded to an assuming insurer that is licensed to transact insurance or reinsurance in this territory. (b) Credit is allowed when the reinsurance is ceded to an assuming insurer that is accredited by the Commissioner as a reinsurer in this territory. If the Commissioner determines that the assuming insurer has failed to continue to meet any of the qualifications, in the following paragraph the Commissioner may, upon written notice and hearing, revoke accreditation. In order to be eligible for accreditation, a reinsurer must: (1) File with the Commissioner evidence of its submission to this territorys jurisdiction; (2) Submit to this territorys authority to examine its books and records; (3) Be licensed to transact insurance or reinsurance in at least one state, or in the case of a U.S. branch of an alien assuming insurer, be entered through and licensed to transact insurance or reinsurance in at least one state; (4) File annually with the Commissioner a copy of its annual statement filed with the insurance department of its state of domicile and a copy of its most recent audited financial statement; and (5) Demonstrate to the satisfaction of the Commissioner that it has adequate financial capacity to meet its reinsurance obligations and is otherwise qualified to assume reinsurance from domestic insurers. An assuming insurer is deemed to meet this requirement as of the time of its application if it maintains a surplus as regards policyholders in an amount not less than $20,000,000, and its accreditation has not been denied by the Commissioner within ninety days after submission of its application. (c)  (1) Credit is allowed when the reinsurance is ceded to an assuming insurer that is domiciled in, or in the case of a U.S. branch of an alien assuming insurer is entered through, a state that employs standards regarding credit for reinsurance substantially similar to those applicable under this statute and the assuming insurer or U S. branch of an alien assuming insurer: (A) Maintains a surplus as regards policyholders in an amount not less than $20,000,000; and (B) Submits to the authority of this territory to examine its books and records. (2) The requirement of section 1443(c)(1)(A) does not apply to reinsurance ceded and assumed pursuant to pooling arrangements among insurers in the same holding company system. (d)  (1) Credit must be allowed when the reinsurance is ceded to an assuming insurer that maintains a trust fund in a qualified U.S. financial institution, as defined in section 1445, for the payment of the valid claims of its U.S. ceding insurers, their assigns and successors in interest. To enable the Commissioner to determine the sufficiency of the trust fund, the assuming insurer shall report annually to the Commissioner information substantially the same as that required to be reported on the NAIC Annual Statement form by licensed insurers. The assuming insurer shall submit to examination of its books and records by the Commissioner and bear the expense of examination. (2)  (A) Credit for reinsurance must not be granted under this subsection unless the form of the trust and any amendments to the trust have been approved by: (i) The commissioner of the state where the trust is domiciled; or (ii) The commissioner of another state who, pursuant to the terms of the trust instrument, has accepted principal regulatory oversight of the trust. (B) The form of the trust and any trust amendments also must be filed with the commissioner of every state in which the ceding insurer beneficiaries of the trust are domiciled. The trust instrument must provide that contested claims are valid and enforceable upon the final order of any court of competent jurisdiction in the United States. The trust must vest legal title to its assets in its trustees for the benefit of the assuming insurers U.S. ceding insurers, their assigns and successors in interest. The trust and the assuming insurer are subject to examination as determined by the Commissioner. (C) The trust must remain in effect for as long as the assuming insurer has outstanding obligations due under the reinsurance agreements subject to the trust. No later than February 28 of each year the trustee of the trust shall report to the Commissioner in writing the balance of the trust and listing the trusts investments at the preceding year-end and shall certify the date of termination of the trust, if so planned, or certify that the trust will not expire prior to the following December 31. (3) The following requirements apply to the following categories of assuming insurer: (A) The trust fund for a single assuming insurer must consist of funds in trust in an amount not less than the assuming insurers liabilities attributable to reinsurance ceded by U.S. ceding insurers, and, in addition, the assuming insurer shall maintain a trusteed surplus of not less than $20,000,000, except as provided in paragraph (3B) of this subsection. (B) At any time after the assuming insurer has permanently discontinued underwriting new business secured by the trust for at least three full years, the commissioner with principal regulatory oversight of the trust may authorize a reduction in the required trusteed surplus, but only after a finding, based on an assessment of the risk, that the new required surplus level is adequate for the protection of U.S. ceding insurers, policyholders and claimants in light of reasonably foreseeable adverse loss development. The risk assessment may involve an actuarial review, including an independent analysis of reserves and cash flows, and consider all material risk factors, including when applicable the lines of business involved, the stability of the incurred loss estimates and the effect of the surplus requirements on the assuming insurers liquidity or solvency. The minimum required trusteed surplus may not be reduced to an amount less than 30% of the assuming insurers liabilities attributable to reinsurance ceded by U.S. ceding insurers covered by the trust. (C)  (i) In the case of a group including incorporated and individual unincorporated underwriters: (I) For reinsurance ceded under reinsurance agreements with an inception, amendment or renewal date on or after January 1, 1993, the trust must consist of a trusteed account in an amount not less than the respective underwriters several liabilities attributable to business ceded by .U.S.. domiciled ceding insurers to any underwriter of the group; (II) For reinsurance ceded under reinsurance agreements with an inception date on or before December 31, 1992, and not amended or renewed after that date, notwithstanding the other provisions of this chapter, the trust must consist of a trusteed account in an amount not less than the respective underwriters several insurance and reinsurance liabilities attributable to business written in the United States; and (III) In addition to these trusts, the group shall maintain in trust a trusteed surplus of which $100,000,000 must be held jointly for the benefit of the U.S. domiciled ceding insurers of any member of the group for all years of account; and (ii) The incorporated members of the group may not be engaged in any business other than underwriting as a member of the group and are subject to the same level of regulation and solvency control by the groups domiciliary regulator as are the unincorporated members. (iii) Within 90 days after its financial statements are due to be filed with the groups domiciliary regulator, the group shall provide to the Commissioner an annual certification by the groups domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the group. (D) In the case of a group of incorporated underwriters under common administration, the group shall: (i) Have continuously transacted an insurance business outside the United States for at least three years immediately prior to making application for accreditation; (ii) Maintain aggregate policyholders surplus of at least $10,000,000,000; (iii) Maintain a trust fund in an amount not less than the groups several liabilities attributable to business ceded by U.S. domiciled ceding insurers to any member of the group pursuant to reinsurance contracts issued in the name of the group; (iv) In addition, maintain a joint trusteed surplus of which $100,000,000 must be held jointly for the benefit of U.S. domiciled ceding insurers of any member of the group as additional security for these liabilities; and (v) Within 90 days after its financial statements are due to be filed with the groups domiciliary regulator, make available to the Commissioner an annual certification of each underwriter members solvency by the members domiciliary regulator and financial statements of each underwriter member of the group prepared by its independent public accountant. (e) Credit must be allowed when the reinsurance is ceded to an assuming insurer that has been certified by the Commissioner as a reinsurer in this territory and secures its obligations in accordance with the requirements of this subsection. For purposes of this subsection, jurisdiction refers to those jurisdictions other than the United States and also to any state, district or territory of the United States. This subsection allows credit to ceding insurers that are mandated by these jurisdictions to cede to state-owned or controlled insurance or reinsurance companies or to participate in pools, guaranty associations or residual market mechanisms. (1) In order to be eligible for certification, the assuming insurer shall meet the following requirements: (A) The assuming insurer must be domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, as determined by the Commissioner pursuant to paragraph (3) of this subsection; (B) The assuming insurer must maintain minimum capital and surplus, or its equivalent, in an amount to be determined by the Commissioner pursuant to regulation; (C) The assuming insurer must maintain financial strength ratings from two or more rating agencies deemed acceptable by the Commissioner pursuant to regulation; (D) The assuming insurer must agree to submit to the jurisdiction of this territory, appoint the Commissioner as its agent for service of process in this territory, and agree to provide security for 100 percent of the assuming insurers liabilities attributable to reinsurance ceded by U.S. ceding insurers if it resists enforcement of a final U.S. judgment; (E) The assuming insurer must agree to meet applicable information filing requirements as determined by the Commissioner, both with respect to an initial application for certification and on an ongoing basis; and (F) The assuming insurer must satisfy any other requirements for certification deemed relevant by the Commissioner. (2) An association including incorporated and individual unincorporated underwriters may be a certified reinsurer. In order to be eligible for certification, in addition to satisfying requirements of paragraph (1): (A) The association shall satisfy its minimum capital and surplus requirements through the capital and surplus equivalents (net of liabilities) of the association and its members, which must include a joint central fund that may be applied to any unsatisfied obligation of the association or any of its members, in an amount determined by the Commissioner to provide adequate protection; (B) The incorporated members of the association must not be engaged in any business other than underwriting as a member of the association and are subjected to the same level of regulation and solvency control by the associations domiciliary regulator as are the unincorporated members; and (C) Within 90 days after its financial statements are due to be filed with the associations domiciliary regulator, the association shall provide to the Commissioner an annual certification by the associations domiciliary regulator of the solvency of each underwriter member; or if a certification is unavailable, financial statements, prepared by independent public accountants, of each underwriter member of the association. (3) The Commissioner shall create and publish a list of qualified jurisdictions, under which an assuming insurer licensed and domiciled in such jurisdiction is eligible to be considered for certification by the Commissioner as a certified reinsurer. (A) In order to determine whether the domiciliary jurisdiction of a non U.S. assuming insurer is eligible to be recognized as a qualified jurisdiction, the Commissioner shall evaluate the appropriateness and effectiveness of the reinsurance supervisory system of the jurisdiction, both initially and on an ongoing basis, and consider the rights, benefits and the extent of reciprocal recognition afforded by the non-U.S. jurisdiction to reinsurers licensed and domiciled in the U.S. A qualified jurisdiction must agree to share information and cooperate with the Commissioner with respect to all certified reinsurers domiciled within that jurisdiction. A jurisdiction may not be recognized as a qualified jurisdiction if the Commissioner has determined that the jurisdiction does not adequately and promptly enforce final U.S. judgments and arbitration awards. Additional factors may be considered in the discretion of the Commissioner. (B) A list of qualified jurisdictions must be published through the NAIC Committee Process. The Commissioner shall consider this list in determining qualified jurisdictions. If the Commissioner approves a jurisdiction as qualified that does not appear on the list of qualified jurisdictions, the Commissioner shall provide thoroughly documented justification in accordance with criteria to be developed under regulations. (C) U.S. jurisdictions that meet the requirement for accreditation under the NAIC financial standards and accreditation program must be recognized as qualified jurisdictions. (D) If a certified reinsurers domiciliary jurisdiction ceases to be a qualified jurisdiction, the Commissioner has the discretion to suspend the reinsurers certification indefinitely, in lieu of revocation. (4) The Commissioner shall assign a rating to each certified reinsurer, giving due consideration to the financial strength ratings that have been assigned by rating agencies deemed acceptable to the Commissioner pursuant to regulation. The Commissioner shall publish a list of all certified reinsurers and their ratings. (5) A certified reinsurer shall secure obligations assumed from U.S. ceding insurers under this subsection at a level consistent with its rating, as specified in regulations promulgated by the Commissioner. (A) In order for a domestic ceding insurer to qualify for full financial statement credit for reinsurance ceded to a certified reinsurer, the certified reinsurer shall maintain security in a form acceptable to the Commissioner and consistent with the provisions of section 1444 or in a multibeneficiary trust in accordance with subsection (d) of this section, except as otherwise provided in this subsection. (B) If a certified reinsurer maintains a trust to fully secure its obligations subject to subsection (d) of this section, and chooses to secure its obligations incurred as a certified reinsurer in the form of a multibeneficiary trust, the certified reinsurer shall maintain separate trust accounts for its obligations incurred under reinsurance agreements issued or renewed as a certified reinsurer with reduced security as permitted by this subsection or comparable laws of other U.S. jurisdictions and for its obligations subject to subsection (d) of this section. It shall be a condition to the grant of certification under subsection (e) of this section that the certified reinsurer shall have bound itself, by the language of the trust and agreement with the Commissioner with principal regulatory oversight of each such trust account, to fund, upon termination of any such trust account, out of the remaining surplus of such trust any deficiency of any other such trust account. (C) The minimum trusteed surplus requirements provided in subsection (d) are not applicable with respect to a multibeneficiary trust maintained by a certified reinsurer for the purpose of securing obligations incurred under this subsection, except that such trust shall maintain a minimum trusteed surplus of $10,000,000. (D) With respect to obligations incurred by a certified reinsurer under this subsection, if the security is insufficient, the Commissioner shall reduce the allowable credit by an amount proportionate to the deficiency, and has the discretion to impose further reductions in allowable credit upon finding that there is a material risk that the certified reinsurers obligations will not be paid in full when due. (E) For purposes of this subsection, a certified reinsurer whose certification has been terminated for any reason must be treated as a certified reinsurer required to secure 100 percent of its obligations. (i) As used in this subsection, the term terminated refers to revocation, suspension, voluntary surrender and inactive status. (ii) If the Commissioner continues to assign a higher rating as permitted by other provisions of this section, this requirement does not apply to a certified reinsurer in inactive status or to a reinsurer whose certification has been suspended. (6) If an applicant for certification has been certified as a reinsurer in an NAIC accredited jurisdiction, the Commissioner has the discretion to defer to that jurisdictions certification, and has the discretion to defer to the rating assigned by that jurisdiction, and such assuming insurer must be considered to be a certified reinsurer in this territory. (7) A certified reinsurer that ceases to assume new business in this territory may request to maintain its certification in inactive status in order to continue to qualify for a reduction in security for its in-force business. An inactive certified reinsurer shall continue to comply with all applicable requirements of this subsection, and the Commissioner shall assign a rating that takes into account, if relevant, the reasons why the reinsurer is not assuming new business. (f) Credit must be allowed when the reinsurance is ceded to an assuming insurer not meeting the requirements of subsections (a), (b), (c), (d) or (e) of this section, but only as to the insurance of risks located in jurisdictions where the reinsurance is required by applicable law or regulation of that jurisdiction. (g) If the assuming insurer is not licensed, accredited or certified to transact insurance or reinsurance in this territory, the credit permitted by subsections (c) and (d) of this section shall not be allowed unless the assuming insurer agrees in the reinsurance agreements: (1)  (A) That in the event of the failure of the assuming insurer to perform its obligations under the terms of the reinsurance agreement, the assuming insurer, at the request of the ceding insurer, shall submit to the jurisdiction of any court of competent jurisdiction in any state of the United States, shall comply with all requirements necessary to give the court jurisdiction, and shall abide by the final decision of the court or of any appellate court in the event of an appeal; and (B) To designate the Commissioner or a designated attorney as its true and lawful attorney upon whom may be served any lawful process in any action, suit or proceeding instituted by or on behalf of the ceding insurer. (2) This subsection is not intended to conflict with or override the obligation of the parties to a reinsurance agreement to arbitrate their disputes, if this obligation is created in the agreement. (h) If the assuming insurer does not meet the requirements of subsections (a), (b) or (c), the credit permitted by subsection (d) or (e) of this section must not be allowed unless the assuming insurer agrees in the trust agreements to the following conditions: (1) Notwithstanding any other provisions in the trust instrument, if the trust fund is inadequate because it contains an amount less than the amount required by subsection (d)(3) of this section, or if the grantor of the trust has been declared insolvent or placed into receivership, rehabilitation, liquidation or similar proceedings under the laws of its state or country of domicile, the trustee shall comply with an order of the commissioner with regulatory oversight over the trust or with an order of a court of competent jurisdiction directing the trustee to transfer to the commissioner with regulatory oversight all of the assets of the trust fund. (2) The assets must be distributed by and claims must be filed with and valued by the commissioner with regulatory oversight in accordance with the laws of the state in which the trust is domiciled that are applicable to the liquidation of domestic insurance companies. (3) If the commissioner with regulatory oversight determines that the assets of the trust fund or any part thereof are not necessary to satisfy the claims of the U.S. ceding insurers of the grantor of the trust, the assets or part thereof must be returned by the commissioner with regulatory oversight to the trustee for distribution in accordance with the trust agreement. (4) The grantor shall waive any right otherwise available to it under U.S. law that is inconsistent with this provision. (i) If an accredited or certified reinsurer ceases to meet the requirements for accreditation or certification, the Commissioner may suspend or revoke the reinsurers accreditation or certification. (1) The Commissioner must give the reinsurer notice and opportunity for hearing. The suspension or revocation may not take effect until after the Commissioners order on hearing, unless: (A) The reinsurer waives its right to hearing; (B) The Commissioners order is based on regulatory action by the reinsurers domiciliary jurisdiction or the voluntary surrender or termination of the reinsurers eligibility to transact insurance or reinsurance business in its domiciliary jurisdiction or in the primary certifying state of the reinsurer under subsection (e)(6) of this section; or (C) The Commissioner finds that an emergency requires immediate action and a court of competent jurisdiction has not stayed the Commissioners action. (2) While a reinsurers accreditation or certification is suspended, no reinsurance contract issued or renewed after the effective date of the suspension qualifies for credit except to the extent that the reinsurers obligations under the contract are secured in accordance with section 1444. If a reinsurers accreditation or certification is revoked, no credit for reinsurance may be granted after the effective date of the revocation except to the extent that the reinsurers obligations under the contract are secured in accordance with subsection (e)(5) or section 1444. (j) Concentration Risk. (1) A ceding insurer shall take steps to manage its reinsurance recoverables proportionate to its own book of business. A domestic ceding insurer shall notify the Commissioner within 30 days after reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, exceeds fifty 50% of the domestic ceding insurers last reported surplus to policyholders, or after it is determined that reinsurance recoverables from any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification must demonstrate that the exposure is safely managed by the domestic ceding insurer. (2) A ceding insurer shall take steps to diversify its reinsurance program. A domestic ceding insurer shall notify the Commissioner within 30 days after ceding to any single assuming insurer, or group of affiliated assuming insurers, more than 20% of the ceding insurers gross written premium in the prior calendar year, or after it has determined that the reinsurance ceded to any single assuming insurer, or group of affiliated assuming insurers, is likely to exceed this limit. The notification must demonstrate that the exposure is safely managed by the domestic ceding insurer.
 An asset or a reduction from liability for the reinsurance ceded by a domestic insurer to an assuming insurer not meeting the requirements of section 545 must be allowed in an amount not exceeding the liabilities carried by the ceding insurer; provided further, that the Commissioner may adopt by regulation pursuant to section 548(b) specific additional requirements relating to or setting forth: (1) the valuation of assets or reserve credits; (2) the amount and forms of security supporting reinsurance arrangements described in section 1446(b); and/or (3) the circumstances pursuant to which credit will be reduced or eliminated. The reduction must be in the amount of funds held by or on behalf of the ceding insurer, including funds held in trust for the ceding insurer, under a reinsurance contract with the assuming insurer as security for the payment of obligations thereunder, if the security is held in the United States subject to withdrawal solely by, and under the exclusive control of, the ceding insurer; or, in the case of a trust, held in a qualified U.S. financial institution, as defined in section 1445(b). This security may be in the form of: (a) Cash; (b) Securities listed by the Securities Valuation Office of the National Association of Insurance Commissioners, including those deemed exempt from filing as defined by the Purposes and Procedures Manual of the Securities Valuation Office, and qualifying as admitted assets; (c)  (1) Clean, irrevocable, unconditional letters of credit, issued or confirmed by a qualified U.S. financial institution, as defined in section 1445(a), effective no later than December 31, of the year for which the filing is being made, and in the possession of, or in trust for, the ceding insurer on or before the filing date of its annual statement; (2) Letters of credit meeting applicable standards of issuer acceptability as of the dates of their issuance (or confirmation) shall, notwithstanding the issuing (or confirming) institutions subsequent failure to meet applicable standards of issuer acceptability, continue to be acceptable as security until their expiration, extension, renewal, modification or amendment, whichever first occurs; or (d) Any other form of security acceptable to the Commissioner.
 (a) A qualified U.S. financial institution means an institution that: (1) Is organized or (in the case of a U.S. office of a foreign banking organization) licensed, under the laws of the United States or any state thereof; (2) Is regulated, supervised and examined by U.S. federal or state authorities having regulatory authority over banks and trust companies; and (3) Has been determined by either the Commissioner or the Securities Valuation Office of the National Association of Insurance Commissioners to meet such standards of financial condition and standing as are considered necessary and appropriate to regulate the quality of financial institutions whose letters of credit will be acceptable to the Commissioner. (b) A qualified U.S. financial institution means, for purposes of those provisions of this subchapter specifying those institutions that are eligible to act as a fiduciary of a trust, an institution that: (1) Is organized, or, in the case of a U.S. branch or agency office of a foreign banking organization, licensed, under the laws of the United States or any state thereof and has been granted authority to operate with fiduciary powers; and (2) Is regulated, supervised and examined by federal or state authorities having regulatory authority over banks and trust companies.
 (a) The Commissioner may adopt rules and regulations implementing the provisions of this chapter. (b) The Commissioner is further authorized to adopt rules and regulations applicable to reinsurance arrangements described in paragraph (1) of this section. (1) A regulation adopted pursuant to this section may apply only to reinsurance relating to: (A) Life insurance policies with guaranteed nonlevel gross premiums or guaranteed nonlevel benefits; (B) Universal life insurance policies with provisions resulting in the ability of a policyholder to keep a policy in force over a secondary guarantee period; (C) Variable annuities with guaranteed death or living benefits; (D) Long-term care insurance policies; or (E) Such other life and health insurance and annuity products as to which the NAIC adopts model regulatory requirements with respect to credit for reinsurance. (2) A regulation adopted pursuant to paragraph 1(A) or 1(B) of this section 1446(b), may apply to any treaty containing (i) policies issued on or after January 1, 2015, and/or (ii) policies issued prior to January 1, 2015, if risk pertaining to such pre-2015 policies is ceded in connection with the treaty, in whole or in part, on or after January 1, 2015. (3) A regulation adopted pursuant to this section 1446(b) may require the ceding insurer, in calculating the amounts or forms of security required to be held under regulations promulgated under this authority, to use the Valuation Manual adopted by the NAIC under section 11B(1) of the NAIC Standard Valuation Law, including all amendments adopted by the NAIC and in effect on the date as of which the calculation is made, to the extent applicable. (4) A regulation adopted pursuant to this section 548(b) shall not apply to cessions to an assuming insurer that: (A) Is certified in this territory or, if this territory has not adopted Provisions substantially equivalent to section 2E of the NAICs Credit for Reinsurance Model Law, certified in a minimum of five (5) other states; or (B) Maintains at least $250,000,000 in capital and surplus when determined in accordance with the NAIC Accounting Practices and Procedures Manual, including all amendments thereto adopted by the NAIC, excluding the impact of any permitted or prescribed practices; and is (i) licensed in at least 26 states; or (ii) licensed in at least 10 states, and licensed or accredited in a total of at least 35 states. (5) The authority to adopt regulations pursuant to this section does not limit the Commissioners general authority to adopt regulations pursuant to section 548(a) of this law.
 This section applies to all cessions after the effective date of this chapter under reinsurance agreements that have an inception, anniversary or renewal date not less than nine (9) months after the effective date of this chapter.
 This subchapter is entitled Life and Health Reinsurance Agreements.
 This subchapter applies to all domestic life and accident and health insurers and to all other licensed life and accident and health insurers which are not subject to a substantially similar law or regulation in their domiciliary state. This subchapter also similarly applies to licensed property and casualty insurers with respect to their accident and health business. This subchapter does not apply to assumption reinsurance, yearly renewable term reinsurance or certain nonproportional reinsurance such as stop loss or catastrophe reinsurance.
 (1) No insurer subject to this subchapter shall, for reinsurance ceded, reduce any liability or establish any asset in any financial statement filed with the Commissioner if, by the terms of the reinsurance agreement, in substance or effect, any of the following conditions exist: (A) Renewal expense allowances provided or to be provided to the ceding insurer by the reinsurer in any accounting period, are not sufficient to cover anticipated allocable renewal expenses of the ceding insurer on the portion of the business reinsured, unless a liability is established for the present value of the shortfall using assumptions equal to the applicable statutory reserve basis on the business reinsured. Those expenses include commissions, premium taxes and direct expenses including, but not limited to, billing, valuation, claims and maintenance expected by the company at the time the business is reinsured: (B) The ceding insurer can be deprived of surplus or assets at the reinsurers option or automatically upon the occurrence of some event, such as the insolvency of the ceding insurer, except that termination of the reinsurance agreement by the reinsurer for nonpayment of reinsurance premiums or other amounts due, such as modified coinsurance reserve adjustments, interest and adjustments on funds withheld, and tax reimbursements, shall not be considered to be such a deprivation of surplus or assets; (C) The ceding insurer is required to reimburse the reinsurer for negative experience under the reinsurance agreement, except that neither offsetting experience refunds against current and prior years losses under the agreement nor payment by the ceding insurer of an amount equal to the current and prior years losses under the agreement upon voluntary termination of in force reinsurance by the ceding insurer shall be considered such a reimbursement to the reinsurer for negative experience. Voluntary termination does not include situations where termination occurs because of unreasonable provisions which allow the reinsurer to reduce its risk under the agreement. An example of such a provision is the right of the reinsurer to increase reinsurance premiums or risk and expense charges to excessive levels forcing the ceding company to prematurely terminate the reinsurance treaty; (D) The ceding insurer must, at specific points in time scheduled in the agreement, terminate or automatically recapture all or part of the reinsurance ceded; (E) The reinsurance agreement involves the possible payment by the ceding insurer to the reinsurer of amounts other than from income realized from the reinsured policies. For example, it is improper for a ceding company to pay reinsurance premiums, or other fees or charges to a reinsurer which are greater than the direct premiums collected by the ceding company; (F) The treaty does not transfer all of the significant risk inherent in the business being reinsured. The following table identifies for a representative sampling of products or type of business, the risks which are considered to be significant. For products not specifically included, the risks determined to be significant shall be consistent with this table. Risk categories: (i) Morbidity (ii) Mortality (iii) Lapse This is the risk that a policy will voluntarily terminate prior to the recoupment of a statutory surplus strain experienced at issue of the policy. (iv) Credit Quality (C1) This is the risk that invested assets supporting the reinsured business will decrease in value. The main hazards are that assets will default or that there will be a decrease in earning power. It excludes market value declines due to changes in interest rate. (v) Reinvestment (C3) This is the risk that interest rates will fall and funds reinvested (coupon payments or monies received upon asset maturity or call) will therefore earn less than expected. If asset durations are less than liability durations, the mismatch will increase. (vi) Disintermediation (C3) This is the risk that interest rates rise and policy loans and surrenders increase or maturing contracts do not renew at anticipated rates of renewal. If asset durations are greater than the liability durations, the mismatch will increase. Policyholders will move their funds into new products offering higher rates. The company may have to sell assets at a loss to provide for these withdrawals. Significant -0- InsignificantRISK CATEGORYa b c d e fHealth Insurance - other than LTC/LTD+ 0 + 0 0 0Health Insurance - LTC/LTD+ 0 + + + 0Immediate Annuities0 + 0 + + 0Single Premium Deferred Annuities0 0 + + + +Flexible Premium Deferred Annuities0 0 + + + +Guaranteed Interest Contracts0 0 0 + + +Other Annuity Deposit Business0 0 + + + +Single Premium Whole Life0 + + + + +Traditional Non-Par Permanent0 + + + + +Traditional Non-Par Term0 + + 0 0 0Traditional Par Permanent0 + + + + +Traditional Par Term0 + + 0 0 0Adjustable Premium Permanent0 + + + + +Indeterminate Premium Permanent0 + + + + +Universal Life Flexible Premium0 + + + + +Universal Life Fixed Premium0 + + + + +Universal Life Fixed Premium0 + + + + +dump-in premiums allowed LTC = Long Term Care Insurance LTD = Long Term Disability Insurance  (G)  (i) The credit quality, reinvestment, or disintermediation risk is significant for the business reinsured and the ceding company does not (other than for the classes of business excepted in paragraph (G)(ii) below either transfer the underlying assets to the reinsurer or legally segregate such assets in a trust or escrow account or otherwise establish a mechanism satisfactory to the Commissioner which legally segregates, by contract or contract provision, the underlying assets. (ii) Notwithstanding the requirements of paragraph (G)(i) of this subsection, the assets supporting the reserves for the following classes of business and any classes of business which do not have a significant credit quality, reinvestment or disintermediation risk may be held by the ceding company without segregation of such assets: Health Insurance - LTC/LTD Traditional Non-Par Permanent Traditional Par Permanent Adjustable Premium Permanent Indeterminate Premium Permanent Universal Life Fixed Premium (no dump-in premiums allowed) (iii) The associated formula for determining the reserve interest rate adjustment must use a formula which reflects the ceding companys investment earnings and incorporates all realized and unrealized gains and losses reflected in the statutory statement. The following is an acceptable formula: Rate = 2 (I + CG) X + Y - I - CG Where is the net investment income CG is capital gains less capital losses X is the current year cash and invested assets plus investment income due and accrued less borrowed money Y is the same as X but for the prior year (H) Settlements are made less frequently than quarterly or payments due from the reinsurer are not made in cash within 90 days of the settlement date. (I) The ceding insurer is required to make representations or warranties not reasonably related to the business being reinsured. (J) The ceding insurer is required to make representations or warranties about future performance of the business being reinsured. (K) The reinsurance agreement is entered into for the principal purpose of producing significant surplus aid for the ceding insurer, typically on a temporary basis, while not transferring all of the significant risks inherent in the business reinsured and, in substance or effect, the expected potential liability to the ceding insurer remains basically unchanged. (2) Notwithstanding subsection (1), an insurer subject to this subchapter may, with the prior approval of the Commissioner, take such reserve credit or establish such asset as the Commissioner may determine consistent with the Insurance Code, Rules or Regulations, including actuarial interpretations or standards adopted by the Commissioner. (3)  (A) Agreements entered into after the effective date of this subchapter which involve the reinsurance of business issued prior to the effective date of the agreements, along with any subsequent amendments thereto, shall be filed by the ceding company with the Commissioner within thirty (30) days from its date of execution. Each filing must include data detailing the financial impact of the transaction. The ceding insurers actuary who signs the financial statement actuarial opinion with respect to valuation of reserves shall consider this subchapter and any applicable actuarial standards of practice when determining the proper credit in financial statements filed with the Commissioner. The actuary shall maintain adequate documentation and be prepared upon request to describe the actuarial work performed for inclusion in the financial statements and to demonstrate that such work conforms to this subchapter. (B) Any increase in surplus net of federal income tax resulting from arrangements described in subsection (3)(A) above must be identified separately on the insurers statutory financial statement as a surplus item (aggregate write-ins for gains and losses in surplus in the Capital and Surplus Account, page 4 of the Annual Statement) and recognition of the surplus increase as income must be reflected on a net of tax basis in the Reinsurance ceded line, page 4 of the Annual Statement as earnings emerge from the business reinsured. {For example, on the last day of calendar year N, company XYZ pays a $20 million initial commission and expense allowance to company ABC for reinsuring an existing block of business. Assuming a 34% tax rate, the net increase in surplus at inception is $13.2 million ($20 million - $6.8 million) which is reported on the Aggregate write-ins for gains and losses in surplus line in the Capital and Surplus account. $6.8 million (34% of $20 million) is reported as income on the Commissions and expense allowances on reinsurance ceded line of the Summary of Operations. At the end of year N+1 the business has earned $4 million. ABC has paid $.5 million in profit and risk charges in arrears for the year and has received a $1 million experience refund. Company ABCs annual statement would report $1.65 million (66% of ($4 million - $1 million - $.5 million) up to a maximum of $13.2 million) on the Commissions and expense allowance on reinsurance ceded line of the Summary of Operations, and - $1.65 million on the Aggregate write-ins for gains and losses in surplus line of the Capital and Surplus account. The experience refund would be reported separately as a miscellaneous income item in the Summary of Operations.}
 (1) No reinsurance agreement or amendment to any agreement may be used to reduce any liability or to establish any asset in any financial statement filed with the Commissioner, unless the agreement, amendment or a binding letter of intent has been duly executed by both parties no later than the as of date of the financial statement. (2) In the case of a letter of intent, a reinsurance agreement or an amendment to a reinsurance agreement must be executed within a reasonable period of time, not exceeding ninety (90) days from the execution date of the letter of intent, in order for credit to be granted for the reinsurance ceded. (3) The reinsurance agreement must contain provisions which provide that: (A) The agreement must constitute the entire agreement between the parties with respect to the business being reinsured thereunder and that there are no understandings between the parties other than as expressed in the agreement; and (B) Any change or modification to the agreement shall be null and void unless made by amendment to the agreement and signed by both parties.
 Insurers subject to this subchapter shall reduce to zero no later than nine months following the effective date of this subchapter any reserve credits or assets established with respect to reinsurance agreements entered into prior to the effective date of this subchapter which, under the provisions of this subchapter would not be entitled to recognition of the reserve credits or assets; provided, however, that the reinsurance agreements shall have been in compliance with laws or regulations in existence immediately preceding the effective date of this subchapter.
 (a) Applicant means: (1) In the case of an individual Medicare Supplement policy the person who seeks to contract for insurance benefits; and (2) In the case of a group Medicare Supplement policy the proposed certificate holder. (b) Certificate means any certificate delivered or issued for delivery in the Territory under a group Medicare Supplement policy. (c) Certificate form means the form on which the certificate is delivered or issued for delivery by the issuer. (d) Issuer includes insurance companies, fraternal benefit societies, health care service plans, health maintenance organizations, and any other entity delivering or issuing for delivery in the Territory Medicare Supplement policies or certificates. (e) Commissioner means the Commissioner of Insurance. (f) Medicare means the Health Insurance for the Aged Act, Title XVIII of the Social Security Amendments of 1965, as then constituted or later amended. (g) Medicare Supplement Policy means a group or individual accident and sickness insurance policy or a subscriber contract of hospital and medical service associations or health maintenance organizations, other than a policy issued pursuant to a contract under section 1876 or section 1833 of the federal Social Security Act (42 U.S.C. section 1395 et seq.), or an issued policy under a demonstration project authorized pursuant to amendments to the federal Social Security Act, which is advertised, marketed or designed primarily as a supplement to reimbursements under Medicare for the hospital, medical or surgical expenses of persons eligible for Medicare. (h) Policy form means the form on which the policy is delivered or issued for delivery by the issuer.
 (a) Except as otherwise specifically provided, this chapter shall apply to: (1) All Medicare supplement policies delivered or issued for delivery in this Territory on or after the effective date hereof; and (2) All certificates issued under group Medicare supplement policies, which certificates have been delivered or issued for delivery in this Territory. (b) This chapter shall not apply to: (1) A policy of one or more employers or labor organizations, or of the trustees of a fund established by one or more employers or labor organizations, or combination thereof, for employees or former employees, or a combination thereof, or for members or former members or a combination thereof, of the labor organizations. (c) The provisions of this chapter are not intended to prohibit or apply to insurance policies or health care benefit plans, including group conversion policies, provided to Medicare eligible persons which policies are not marketed or held to be Medicare supplement policies or benefit plans.
 (a) No Medicare supplement insurance policy, contract or certificate in force in the Territory shall contain benefits that duplicate benefits provided by Medicare. (b) The Commissioner shall adopt reasonable regulations to establish specific standards for policy provisions of Medicare supplement policies, and certificates, which shall be in addition to and in accordance with applicable laws of this Territory. No requirement of this title relating to minimum required policy benefits, other than the minimum standards contained in this chapter, shall apply to Medicare supplement policies and certificates. The Standards may cover, but shall not be limited to: (1) Terms of renewability; (2) Initial and subsequent conditions of eligibility; (3) Nonduplication of coverage; (4) Probationary periods; (5) Benefit limitations, exceptions and reductions; (6) Elimination periods; (7) Requirements for replacement; (8) Recurrent conditions; and (9) Definition of terms (c) The Commissioner may adopt from time to time, such reasonable regulations as are necessary to conform Medicare supplement policies and certificates to the requirements of federal law and regulations promulgated thereunder, including but not limited to: (1) Requiring refunds or credits if the policies or certificates do not meet loss ratio requirements; (2) Establishing a uniform methodology for calculating and reporting loss ratios; (3) Assuring public access to policies, premiums and loss ratio information of issuers of Medicare supplement insurance; (4) Establishing a process for approving or disapproving policy forms and certificate form and proposed premium increases; (5) Establishing a policy for holding public hearings prior to approval of premium increases; and (6) Establishing standards for Medicare Select policies and certificates.
 The Commissioner may adopt regulations that specify prohibited policy provisions not otherwise specifically authorized by statute which, in the opinion of the Commissioner, are unjust, unfair or unfairly discriminatory to any person insured or proposed to be insured under a Medicare supplement policy or certificate.
 Notwithstanding any other provision of law to the contrary, a Medicare supplement policy or certificate shall not exclude or limit benefits for losses incurred more than six months from the effective date of coverage because it involved a preexisting condition. The policy or certificate shall not define a preexisting condition more restrictively than a condition for which medical advice was given or treatment was recommended by or received from a physician within six months before the effective date of coverage.
 Medicare supplement policies shall return to policyholders benefits which are reasonable in relation to the premium charged. The Commissioner shall issue reasonable regulations to establish minimum standards for loss ratios of Medicare supplement policies on the basis of incurred claims experience, or incurred health care expenses where coverage is provided by a health maintenance organization on a service rather than reimbursement basis, and earned premiums in accordance with accepted actuarial principles and practices.
 (a) In order to provide for full and fair disclosure of Medicare supplement policies, no Medicare supplement policy shall be delivered or issued for delivery in the Territory, and no certificate shall be delivered pursuant to a group Medicare supplement policy delivered or issued for delivery in the Territory unless an outline of coverage is delivered to the applicant at the time application is made. (b) The Commissioner shall prescribe the format and content of the outline of coverage required by subsection (a) of this section. For the purposes of this section, format means style, arrangement and overall appearance, including such items as the size, color and prominence of type and the arrangement of text and captions. The outline of coverage shall include: (1) A description of the principal benefits and coverage provided in the policy or contract; (2) A statement of the renewal provisions, including any reservation by the issuer of a right to change premiums; and disclosure of the existence of any automatic renewal premium increases based on the policyholder's age. (3) A statement that the outline of coverage is a summary of the policy issued or applied for, and that the policy should be consulted to determine governing contractual provisions. (c) The Commissioner may prescribe by regulation a standard form and the contents of an informational brochure for persons eligible for Medicare, which is intended to improve the buyer's ability to select the most appropriate coverage and improve the buyer's understanding of Medicare. Except in the case of direct response solicitation insurance policies, the Commissioner may require by regulation that the informational brochure be provided to any prospective insureds or subscribers eligible for Medicare concurrently with delivery of the outline of coverage. With respect to direct response solicitation insurance policies, the Commissioner may require by regulation that the prescribed brochure be provided upon request to any prospective insureds or subscribers eligible for Medicare, but in no event later than the time of policy or contract delivery. (d) The Commissioner may adopt regulations for captions or notice requirements, determined to be in the public interest and designed to inform prospective insureds that particular insurance coverages are not Medicare supplement coverages, for all accident and sickness insurance policies sold to persons eligible for Medicare by reason of age, other than: (1) Medicare supplement policies; (2) Disability income policies; (3) Basic, catastrophic, or major medical expense or policies; or (4) Single premium, nonrenewable policies. (e) The Commissioner may adopt regulations to govern the full and fair disclosure of the information in connection with the replacement of accident and sickness policies, or certificates subscriber contracts by persons eligible for Medicare.
 Medicare supplement policies, certificates, shall have a notice prominently printed on the first page of the policy or certificate, or attached thereto, stating in substance that the applicant shall have the right to return the policy or certificate within thirty days of its delivery and to have the premium refunded if, after examination of the policy or certificate, the applicant is not satisfied for any reason. Any refund made pursuant to this Section shall be paid directly to the applicant by the issuer in a timely manner.
 Every issuer of Medicare supplement insurance, policies or certificates in the Territory shall provide a copy of any Medicare supplement advertisement intended for use in the Territory, whether through written, radio or television medium, to the Commissioner for review or approval by the Commissioner.
 In addition to any other applicable penalties for violations of this title, the Commissioner may require issuers violating any provision of this chapter, or regulations promulgated pursuant to this chapter, to cease marketing any Medicare supplement policy or certificate in the Territory which is related directly or indirectly to a violation or may require such issuer to take such actions as are necessary to comply with the provisions of this chapter, or both.
 (a) Any group of persons may form a commercial self-insurance fund for the purpose of pooling and spreading liabilities of its group members in any commercial property or casualty risk or surety insurance. (b) As used in this chapter, commercial self-insurance fund or fund means a group of members, operating individually and collectively through an association, that must be: (1) Established by: (A) A not-for-profit trade association, industry association, or professional association of employers or professionals which has a constitution or bylaws, which is incorporated under the laws of the territory, and which has been organized and maintained in good faith for a continuous period of one year for purposes other than that of obtaining or providing insurance; or (B) A not-for-profit group comprised of a condominium association as defined in Title 28, chapter 33, Virgin Islands Code, which is incorporated under the laws of the territory, which restricts its membership to condominium associations only, and which has been organized and maintained in good faith for a continuous period of one year for purposes other than that of obtaining or providing insurance. (2) Operated pursuant to a trust agreement by a board of trustees which shall have complete fiscal control over the fund and which shall be responsible for all operations of the fund. The majority of the trustees shall be owners, partners, officers, directors, or employees of one or more members of the fund. The trustees shall have the authority to approve applications of members for participation in the fund and to contract with an authorized administrator or servicing company to administer the day-to-day affairs of the fund. (c) Each member of a commercial self-insurance trust fund established pursuant to this chapter must maintain membership in an association as set forth in subsection (b)(1)(A) and (B) of this section. (d) Any financial institution may participate as a member in a commercial self-insurance fund. A financial institution may not require as a condition precedent to making a loan that the prospective borrower insure with any commercial self-insurance fund. Any financial institution participating in a commercial self-insurance fund may participate only for the purpose of providing coverage on the financial institution's direct commercial property and commercial casualty or surety insurance exposures. The financial institution may not participate for the purpose of covering the direct or indirect exposures of its customers. (e) A commercial self-insurance fund shall not participate in the Virgin Islands Insurance Guaranty Association.
 (a) No person shall establish a commercial self-insurance fund unless such fund is issued a certificate of authority by the Commissioner. (b)  (1) Any person failing to hold a certificate of authority from the Commissioner while operating or maintaining a commercial self-insurance fund shall be subject to a fine of not less than $5,000.00 or more than $10,000 for each violation. (2) Any person who operates or maintains a commercial self-insurance fund without a certificate of authority from the Commissioner shall be subject to the cease and desist penalty powers of the Commissioner. (3) In addition to the penalties and other enforcement provisions of this title, the Commissioner is vested with the power to seek both temporary and permanent injunctive relief when: (A) A commercial self-insurance fund is being operated by any person or entity without a certificate of authority. (B) Any person, entity, or commercial self-insurance fund has engaged in any activity prohibited by this title or by any regulation adopted pursuant thereto. (C) Any commercial self-insurance fund, person or entity is renewing, issuing, or delivering a policy, contract, certificate, summary plan description, or other evidence of the benefits and coverages provided to members without a certificate of authority. The Commissioner's authority to seek injunctive relief shall not be conditioned on having conducted any proceeding pursuant to chapter 7 of this title. The authority vested in the Commissioner by virtue of the operation of this section shall not act to reduce any other enforcement remedy or power to seek injunctive relief that may otherwise be available to the Commissioner.
 All applications for a certificate of authority for a commercial self-insurance fund shall be on a form furnished by the Commissioner, and shall include or have attached the following: (1) The name of the fund and the location of the fund's principal office, which shall be maintained within the territory. (2) The kinds of insurance initially proposed to be transacted and a copy of each policy, endorsement, and application form it initially proposes to issue or use. (3) A copy of the constitution, bylaws, or trust agreement which governs the operation of the fund. The constitution, bylaws, or trust agreement shall contain a provision prohibiting any distribution of surplus funds or profit except to members of the fund, as approved by the Commissioner. (4) The names and addresses of the trustees of the fund. The Commissioner shall not grant or continue approval as to any fund if the Commissioner determines that any trustee is incompetent or untrustworthy; that any trustee has been found guilty of, or has pled guilty or no contest to a felony, or a crime involving moral turpitude, or a crime punishable by imprisonment of one year or more under the law of any state, territory, or country, whether or not a judgment or conviction has been entered; or that any trustee has had any type of insurance license revoked in this Territory or any state. (5) A copy of a properly executed indemnity agreement binding each fund member to individual, several, and proportionate liability. (6) A plan of risk management which has established measures and procedures to minimize both the frequency and severity of losses. (7) Proof of competent and trustworthy persons to administer or service the fund in the areas of claims adjusting, underwriting, risk management, and loss control. (8) Membership applications with the name, address, and a current financial statement of each member applying for coverage showing the aggregate net worth of all members to be not less than $500,000, a combined ratio of current assets to current liabilities of more than one to one, and a combined working capital of an amount establishing financial strength and liquidity of the businesses to promptly provide for payment of the normal property or casualty claims proposed to be self-insured. (9)  (A) An initial deposit of cash or securities of the type eligible for deposit by insurers in the amount of $100,000. (i) All income from deposits shall belong to the fund and shall be transmitted to the fund as it becomes available. (ii) No judgment creditor or other claimant shall have the right to levy upon any of the assets or securities held as a deposit under this chapter. (B) In lieu of the deposit of cash or securities, a fund may file with the Commissioner a surety bond in like amount. The bond shall be one issued by an authorized surety insurer, shall be for the same purpose as the deposit in lieu of which it is filed, and shall be subject to the Commissioner's approval. (i) No bond shall be approved unless it covers liabilities arising from all policies and contracts issued and entered into during the time the bond is in effect and unless the Commissioner is satisfied that the bond provides the same degree of security as would be provided by a deposit of securities. (ii) No bond shall be cancelled or subject to cancellation unless written advance notice of at least sixty days is filed with the Commissioner. (C) Deposit of securities or cash pursuant to this chapter shall be administered by the Commissioner in accordance with chapter 29 of this title. (10)  (A) Copies of acceptable excess insurance policies written by an insurer or insurers authorized or approved to transact business in the Territory, which excess insurance provides specific and aggregate limits and retention levels satisfactory to the Commissioner in accordance with sound actuarial principles. The Commissioner may waive this requirement if the fund demonstrates to the satisfaction of the Commissioner that its operation is and will be actuarially sound without obtaining excess insurance. (B) At least ten days prior to the proposed effective date of the issuance of any policy, the trustees shall submit proof that the members have paid into a common claims fund in a designated depository, cash premiums in an amount of not less than $50,000 or ten percent of the estimated annual premium of the members at the inception, whichever is greater. (11) A copy of a fidelity bond or insurance policy from an authorized insurer providing coverage in an amount equal to not less than ten percent of the funds handled annually and issued in the name of the fund, covering its trustees, employees, administrator, or other individuals managing or handling the funds, or assets of the fund. In no case may such bond or policy be less than $1,000 or more than $500,000 except that the Commissioner may for good cause prescribe an amount in excess of $500,000, subject to the ten percent limitation of the preceding sentence. (12)  (A) A plan of operation designed to provide sufficient revenues to pay current and future liabilities, as determined in accordance with sound actuarial principles. (B) A statement prepared by an actuary who is a member of the American Academy of Actuaries or the Casualty Actuarial Society establishing that the fund has prepared a plan of operation which is based on sound actuarial principles. The Commissioner shall not approve the fund unless he determines that the plan established by the fund is designed to provide sufficient revenues to any current and future liabilities, as determined in accordance with sound actuarial principles. (13) Such additional information as the Commissioner may reasonably require.
 After issuance of its initial certificate of authority, a commercial self-insurance fund shall thereafter meet the following requirements as a condition of maintaining its certificate of authority: (1) Maintenance of competent and trustworthy persons to service the program. Written notice shall be provided to the Commissioner before changing the fund's method of fulfilling its servicing requirements. (2) Maintenance of a risk management program. (3) Maintenance of a deposit of cash or securities in the amount of $100,000, or a surety bond in lieu thereof. (4) Maintenance of excess insurance in accordance with sound actuarial principles, unless waived by the Commissioner. (5) Maintenance of a fidelity bond. (6) Maintenance of appropriate funded loss reserves determined in accordance with sound actuarial principles satisfactory to the Commissioner. (7) Maintenance of an aggregate net worth of at least $500,000 of all fund members. A fund shall not be required to provide financial statements of its members evidencing conformity to this requirement after its certificate of authority has been issued, unless required to do so by the Commissioner upon showing of good cause. (8) Each fund shall have and maintain its principal place of business in the territory and shall therein make available to the Commissioner, upon reasonable notice, complete records of its assets, transactions, and affairs in accordance with such methods and systems as are customary for, or suitable to, the kind or kinds of business transacted. (9) A fund shall file such reports with the Commissioner as required by section 1484 of this chapter. (10) A fund shall report to the Commissioner within fifteen days of a determination that the actual premiums written or liability assumed or any other factor which substantially contributes to the financial condition of the plan deviates by more than twenty-five percent from the projections used in the most recent annual report, or if the first annual report has not yet been filed, projections used in the initial plan of operation. (11) Payment of annual license fees and premium taxes.
 (a) Every commercial self-insurance fund shall, annually within 3 months of the end of the fiscal year, file a financial statement of the fund, including its balance sheet and a statement of operations for the preceding year, verified by the oath of a member of the board of trustees or by an administrative executive appointed by the board. (b) Every fund shall, annually within six months of the end of the fiscal year, file a report with the Commissioner verified by the oath of a member of the board of trustees or by an administrative executive appointed by the board, containing the following information: (1) A financial statement of the fund, including its balance sheet and a statement of operations for the preceding year certified by an independent certified public accountant. (2) A report prepared by an actuary who is a member of the American Academy of Actuaries as to the actuarial soundness of the fund. The report shall consist of, but shall not be limited to, the following: (A) Adequacy of premiums or contributions in paying claims and changes, if any, needed in the contribution rates to achieve or preserve a level of funding deemed adequate, which shall include a valuation of present assets, based on statement value, and prospective assets and liabilities of the plan and the extent of any unfunded accrued liabilities. (B) A plan to amortize any unfunded liabilities and a description of actions taken to reduce unfunded liabilities. (C) A description and explanation of actuarial assumptions. (D) A schedule illustrating the amortization of any unfunded liabilities. (E) A comparative review illustrating the level of funds available to the commercial self-insurance fund from rates, investment income, and other sources realized over the period covered by the report, indicating the assumptions used. (F) A projection of the following year's plan of operation, including additional number of members, gross premiums to be written, and projected liabilities. (G) A statement by the actuary that the report is complete and accurate and that in his opinion the techniques and assumptions used are reasonable and meet the requirements of this section. (H) Other factors or statements as may be reasonably required by the Commissioner in order to determine the actuarial soundness of the plan. (3) Any changes in the constitution, bylaws, or trust agreement of the fund.
 (a) The liability of each member for obligations of the commercial self-insurance fund shall be individual, several, and proportionate, but not joint, except as provided in this section and section 1487 of this chapter. (b) Each member shall have a contingent assessment liability for payment of actual losses and expenses incurred while his policy was in force. (c) Each policy issued by the fund shall contain a statement of the contingent liability. Both the application for insurance and the policy shall contain, in contrasting color and in not less than ten point type, the following statements: This is a fully assessable policy. In the event the fund is unable to pay its obligations, policyholders will be required to contribute on a pro rata earned premium basis the money necessary to meet any unfilled obligations.
 A commercial self-insurance fund shall obtain the approval of the Commissioner prior to paying any dividend or refund to its members. No such dividend or refund may be approved until twelve months after the last day of the fiscal year for which the dividend or refund is payable, or such later time as the Commissioner may require in accordance with sound actuarial principles.
 (a) The trustees may assess from time to time members of a commercial self-insurance fund liable therefor under the terms of their policies and pursuant to this section, or the Commissioner may assess the members in the event of liquidation of the fund. (b) Each member's share of a deficiency for which an assessment is made shall be computed by applying to the premium earned on the member's policy or policies during the period to be covered by the assessment the ratio of the total deficiency to the total premiums earned during such period upon all policies subject to the assessment. In the event one or more members fail to pay an assessment, the other members are liable on a proportionate basis for an additional assessment. The fund, acting on behalf of all members who paid the additional assessment, shall institute legal action when necessary and appropriate to recover the assessment from members who failed to pay it. (c) In computing the earned premiums for the purposes of this section, the gross premium received by the fund for the policy shall be used as a base, deducting therefrom charges not recurring upon the renewal or extension of the policy. (d) No member shall have an offset against any assessment for which he is liable on account of any claim for unearned premium or losses payable.
 (a) If the assets of a commercial self-insurance fund are at any time insufficient to comply with the requirements of law or to discharge its liabilities, other than any liability on account of funds contributed by the trustees or others, and to meet the required conditions of financial soundness, or if a judgment against the fund has remained unsatisfied for thirty days, its trustees shall forthwith make up the deficiency or levy an assessment upon the members for the amount needed to make up the deficiency, but subject to the limitation set forth in the trust agreement or the policy. (b) If the trustees fail to make an assessment as required by subsection (a) of this section, the Commissioner shall order the trustees to do so. If the deficiency is not sufficiently made up within sixty days after the date of the order, the fund shall be deemed insolvent and grounds shall exist to proceed against the fund as provided for in chapter 51 of this title. (c) Subject to the provisions of this section, any rehabilitation, liquidation, conservation, or dissolution of a commercial self-insurance fund shall be conducted under the supervision of the Commissioner, who shall have all power with respect thereto granted to him under chapter 51 of this title governing the rehabilitation, liquidation, conservation, or dissolution of insurers.
 A commercial self-insurance fund shall use an agent or agents licensed under chapter 31 of this title. A commercial self-insurance fund may petition the Commissioner to have agents licensed in accordance with chapter 31 of this title, and the fund and its licensed agents shall be subject to the requirements of such provisions.
 (a) No basic insurance policy or application form where written application is required and is to be a part of the policy or contract, or printed rider or endorsement form, shall be issued by a commercial self-insurance fund unless the form has been filed with and approved by the Commissioner. (b) Every such filing shall be made not less than thirty days in advance of any such use or delivery. At the expiration of such thirty days, the form so filed shall be deemed approved unless prior thereto it has been affirmatively approved or disapproved by order of the Commissioner. The Commissioner may extend, by not more than an additional fifteen days, the period within which he may so affirmatively approve or disapprove any such form, by giving notice of the extension before expiration of the initial thirty day period. At the expiration of the period so extended, and in the absence of any prior affirmative approval or disapproval, such form shall be deemed approved. (c) The Commissioner shall disapprove any form or withdraw any previous approval thereof only if the form: (1) Is in any respect in violation of, or does not comply with, this code. (2) Contains or incorporates by reference, when such incorporation is otherwise permissible, any inconsistent, ambiguous, or misleading clauses, or any exceptions and conditions which deceptively affect the risk purported to be assumed in the general coverage of the contract. (3) Has any title, heading, or other indication of its provisions which is misleading. (4) Is printed or otherwise reproduced in such manner as to render any material provision of such form substantially illegible.
 (a) With respect to all classes of insurance which a commercial self-insurance fund shall underwrite, the rates shall not be excessive, inadequate, or unfairly discriminatory. (b) A rate shall be held to be excessive if the expense factors associated with the rate are not justified or are not reasonable for the benefits and services provided. (c) Rates shall be deemed inadequate if they are clearly insufficient, together with the investment income attributable to them, to sustain projected losses and expenses in the class of business to which they apply. (d) A rate shall be deemed inadequate as to the premium charged to a risk or group of risks if discounts or credits are allowed which exceed a reasonable reflection of expense savings and reasonably expected loss experience from the risk or group of risks. (e) If the Commissioner determines that the continued use of a rate for a coverage endangers the solvency of the fund, he may issue an order requiring the rate to be increased or requiring the fund to limit or cease writing the coverage. (f) Nothing herein shall be construed to prohibit the Commissioner from examining a fund. (g) A commercial self-insurance fund shall be required to file its rates, including credits and surcharge schedules, with the Commissioner for approval pursuant to the standards of this section and the procedures of section 1490, subsection (b) of this chapter. (h) Any commercial self-insurance fund may subscribe to, or be a member of, a rating organization. A rating organization shall not discriminate against a commercial self-insurance fund as to conditions of subscription or membership.
 A commercial self-insurance fund shall register with and designate the Insurance Commissioner as its agent solely for the purpose of receiving service of legal documents or process.
 Commercial self-insurance funds licensed under this chapter shall be subject to periodic examination by the Commissioner in the same manner and subject to the same terms and conditions applicable to insurers as set forth in chapter 5 of this title.
 Commercial self-insurance funds are subject to the fees and taxes set forth in chapter 25 of this title, except that the premium tax rate shall be one percent (1%) of the gross premiums collected by such self-insurance funds.
 As used in this chapter, unless the context clearly requires otherwise: (a) Authority means the Virgin Islands Windstorm and Earthquake Insurance Authority created by this chapter; (b) Board means the Board of Directors of the Authority or the Interim Board of Directors, as the case may be; (c) Covered event means a windstorm or earthquake that directly or indirectly causes damage in the Territory of the Virgin Islands; (d) Earthquake means any shaking or trembling of the crust of the earth, caused by forces operating within the earth itself, such as underground volcanic forces, or by breaking and shifting of rock beneath the surface and not to mere superficial effects of external forces, such as erosion by run-off rainwater. (e) Earthquake insurance means a policy issued by the Authority insuring only against damage to eligible property caused by a covered event. (f) Eligible property means certain property located within the Territory which is determined by the Authority to be insurable in accordance with the Plan of Operation and which is used for residential purposes; (g) Insurance Commissioner means the same person as that intended by section 51 of chapter 3 of this title; (h) Plan of Operation means the written plan for providing windstorm and earthquake property insurance, and any amendments thereto, as required to be adopted by this chapter; (i) Property insurance means the same as is defined in section 454 of chapter 19 of this title; (j) Servicing facility means any person, agent, or insurer authorized to write windstorm and earthquake property insurance on behalf of the Authority; (k) Windstorm means tropical storms and hurricanes, as designated by the National Hurricane Center, with sufficient wind velocity to cause property damage in the Territory of the Virgin Islands. (l) Windstorm property insurance means a policy issued by the Authority insuring only against damage to eligible property caused by a covered event.
 There is hereby created a body corporate and politic constituting a public corporation and autonomous governmental instrumentality of the Government of the Virgin Islands, by the name of the Virgin Islands Windstorm and Earthquake Insurance Authority. The Authority shall be subject to the control of a Board, as provided in this chapter, but it is a corporation having legal existence and personality separate and apart from the Government. The debts, obligations, contracts, bonds, receipts, expenditures, accounts, funds, facilities and property of the Authority shall be deemed to be those of the Authority and not to be those of the Government of the Virgin Islands, or any office, bureau, department, agency, commission, branch, agent, office or employee thereof. The Authority is deemed a domestic insurer for all purposes of the Insurance Code of the Virgin Islands.
 The Virgin Islands Windstorm and Earthquake Insurance Authority has the following powers and duties: (a) to provide the persons having an insurable interest in eligible property with windstorm and earthquake property insurance at reasonable rates; (b) to insure government owned properties, properties owned by the Government Employees Retirement System, and properties owned by the independent instrumentalities of the Government of the Virgin Islands; (c) to adopt, amend, and administer a Plan of Operation; (d) to adopt any form of policy necessary for providing windstorm and earthquake property insurance; (e) to perform inspections of eligible properties, issue policies with binding authority, provide policyholder services, provide claim services and any other necessary services for applicants and policyholders, and/or contract with servicing facilities to provide the same; (f) to establish reserves to be used for payment of expenses and valid claims for covered events insured by the Authority; provided, however, that no amounts transferred to such reserves from monies on deposit in the Virgin Islands Insurance Guaranty Fund established pursuant to Title 33, section 3061, Virgin Islands Code, shall be expended to pay claims covered by Title 22, section 248 et seq., Virgin Islands Code; (g) to collect and maintain statistical and other data as may be required; (h) to exercise all such incidental powers as may be necessary or convenient for the purpose of carrying out its powers and duties; (i) to have a common seal and to alter the same from time to time; (j) to acquire real or personal property by grant, gift, purchase, devise or bequest, and to hold, lease, mortgage and otherwise exercise the rights of ownership of such property, and to dispose of such property, including by sale, lease or other disposition of such property to any person, including the Government of the Virgin Islands or any agency, instrumentality, commission, authority, or political subdivision of the Virgin Islands; (k) to acquire any property in the settlement or reduction of debts previously contracted or in exchange for investments previously made in the course of its business, where such acquisition is necessary to minimize or avoid loss in connection therewith, and to hold such property for such periods as the Board may deem advisable and to exercise the rights of ownership of and to dispose of the same; (l) to establish one or more offices necessary or convenient for the transaction of its business within or without the Virgin Islands; (m) to purchase or otherwise acquire bonds out of any funds available therefor, subject to such agreements with bondholders as may exist; (n) to sue and be sued; (o) to appoint, employ and contract for the services of officers, agents, employees, professional assistants and servicing facilities and to pay such compensation for their services as the Board may determine; (p) to make contracts and issue guarantees and to execute all instruments necessary or convenient in the exercise of any of its powers, including but not limited to, guarantees, standby agreements or other credit enhancements, interest exchange agreements, agreements in connection with credit enhancement procedures, including letters of credit, guarantees, standby agreements or other credit enhancements and agreements in connection with, without limitation, the private sale of its bonds, the remarketing of its bonds, the repurchase of its bonds, and its guaranty programs; (q) to make, and from time to time modify and repeal, bylaws, rules and regulations, not inconsistent with this chapter, providing for the internal organization and management of the Authority, for the administration of its affairs and operations, and for carrying into effect the powers and purposes of the Authority; (r) to accept grants, or loans from, and enter into contracts, leases, agreements, or other transactions with the United States, any agency, instrumentality, commission, authority or other political subdivision thereof, the Government of the Virgin Islands or any agency, instrumentality, commission, authority, or political subdivision thereof, and to apply the proceeds of any such grants or loans for any of its corporate purposes; to participate in the programs of the United States or any agency, instrumentality, commission, authority or other political subdivision thereof, and, consistent with this chapter, to do any and all things necessary to secure participation in such programs and the cooperation of such entities in achieving the policies and purposes of this chapter; and to enter into agreements with the Government of the Virgin Islands, the United States or any agency, instrumentality, commission, authority or political subdivision thereof, providing for the guarantee of the payment of the principal of, or interest on, bonds of the Authority, which guaranty agreements may contain such terms or covenants as the Board shall deem necessary or appropriate; and (s) to exercise such other corporate powers, not inconsistent herewith, as are conferred upon corporations by the laws of the United States Virgin Islands and to exercise all its powers within and without the United States Virgin Islands to the same extent as natural persons might or could do.
 (a)  (1) The Authority shall be governed by a Board of Directors consisting of seven persons: the Commissioner of Finance and the Director of the Office of Management and Budget (who shall both serve ex officio), and five other persons appointed by the Governor with the advice and consent of the Legislature. Of the five appointed members: two shall be knowledgeable by education and training of insurance and the insurance industry, one shall be representative of the consumer/insured, and not more than three may be resident of any one island district. (2) A majority of the members shall constitute a quorum of the Board of Directors for the purpose of conducting the business of the Authority and exercising its powers, and for all other purposes notwithstanding the existence of any vacancies, except that a lesser number may adjourn. Unless the Authority in its bylaws requires a greater proportion of any instance, a vote of the majority of members present at any meeting of the Board shall prevail. The Board shall elect its own chairman and such other officers as it may deem appropriate. (3) Members of the Board shall serve terms of four years from the date of their appointment, but may continue to serve until the appointment of their successor. Members who are not employees of the Government of the Virgin Islands shall receive $50 per day or part thereof spent in the business of the Authority. All members shall be entitled to official travel costs and expenses actually and necessarily incurred in the discharge of their official duties. (4) Members of the Board, while acting within the scope of their authority as directors or officers, shall not be subject to any personal or civil liability resulting from the exercise of any of the Authority's purposes, duties or responsibilities, unless the conduct of the member is determined by a court of competent jurisdiction to constitute willful wrongdoing or gross negligence. (b) From the date of enactment of the Act creating the Authority until the confirmation and appointment of not less than three of the five appointed members of the Board of Directors, the Authority shall be governed by an Interim Board consisting of three persons: the Commissioner of Finance, the Director of the Office of Management and Budget, and the Director of the Bureau of Internal Revenue. The Interim Board shall have all of the powers and duties of the Board of Directors established by subsection (a) of this section, and shall fully govern the Authority pending confirmation and appointment of not less than three of the five appointed members. It is hereby expressly declared that time is of the essence and that the creation of an Interim Board with full powers is necessary to provide for a fully operational Authority prior to the 1993 hurricane season.
 (a) The Authority shall adopt a Plan of Operation and may amend such Plan from time to time as is necessary to assure the fair, reasonable, and equitable provision of windstorm and earthquake property insurance and the operation of the Authority. The Plan of Operation and any amendments thereto shall be reviewed by the Commissioner of Insurance and may be disapproved in whole or in part, at anytime, by the Commissioner. A previously approved Plan, or any part thereof, may be subsequently disapproved by the Commissioner for good reason. The Commissioner shall state any disapproval in writing together with his reasons therefor. Nothing in this chapter shall be construed as diminishing the regulatory authority of the Commissioner under Title 22 of this code. (b) The Plan of Operation shall, in addition to any other requirements of law: (1) establish procedures for performance of all the powers and duties of the Authority; (2) provide a method for notifying all owners of residential property located in the Territory of the Virgin Islands of the purposes of the Authority and the requirements for coverage of eligible property; (3) provide for and adopt all necessary forms, including insurance policies to be issued by and on behalf of the Authority, for use by the Authority and servicing facilities; (4) establish reasonable rates, subject to the review provided herein, to be charged for insurance provided by the Authority so that the total premium income from all policies of windstorm and earthquake property insurance, when combined with investment income, shall be sufficient to pay all expenses for operating the Authority (including, but not limited to, processing applications, conducting inspections, issuing and servicing policies and policyholders, paying commissions, paying servicing facilities for expenses, and paying any debt incurred by the Authority), and payment of valid claims; (5) provide for the promulgation of a Manual of Rules and Rates, and rating and classification plans, which shall include deductibles, limits of coverage, and rules for classification of risks and rate modifications based on the exposure insured as determined by regulation, and to maintain the solvency of the Authority; (6) establish reasonable eligibility standards with respect to the insurability of any eligible property. Such eligibility standards may include a requirement that the property is insured by an underlying policy of property insurance and such other requirements as may be established by the Authority; (7) establish procedures for receiving and servicing applications to the Authority; (8) establishing procedures for processing and maintaining all records of the Authority, including all financial transactions of the Authority, its agents, its employees, its Board and all transactions with any servicing facility; (9) establish procedures for the collection and remittance of premiums; (10) establish the commission to be paid to agents authorized to write windstorm and earthquake property insurance on behalf of the Authority; (11) establish procedures for the payment of valid claims; (12) provide for obtaining services of an independent certified public accountant to perform an audit of the Authority; (13) provide for obtaining the services of an outside independent actuary to perform and submit a year-end valuation of the Authority's reserves and surplus accounts; (14) establish procedures for reinsuring risks written through the Authority; and (15) provide for the appointment of a manager for the Authority. (c) If the Authority fails to adopt a Plan of Operation, or fails to amend an existing Plan of Operation, the Insurance Commissioner may, by rule, adopt a Plan of Operation or an amendment to a Plan of Operation to insure the purposes of this chapter are carried out. Any Plan of Operation, or amendment, adopted by rule of the Insurance Commissioner, shall continue in full force and effect until superseded by a Plan of Operation, or amendment, adopted by the Board of Directors and approved by the Insurance Commissioner, or until superseded by a subsequent Plan of Operation, or amendment, adopted by rule of the Insurance Commissioner.
 (a) No claim under a windstorm and earthquake property insurance policy issued by or on behalf of the Authority may exceed $400,000 increasing annually by an inflation index approved by the Board. (b) Every policy issued by or on behalf of the Authority shall have a minimum deductible of $2,000 or two percent of the sum insured of the claim, whichever is greater. (c) A policy issued by or on behalf of the Authority shall insure not less than 80% of the actual cash value of the eligible property or the limits available from the Authority, whichever is less, excluding the value of the land. (d) Nothing in this chapter, or in any other provision of law, shall be construed to prohibit any insurer from providing coverage for property damage caused by windstorm or earthquake for any property in the Virgin Islands, which coverage may be apart from, or in addition to, the windstorm and earthquake property insurance issued by the Authority. (e) Nothing in this chapter, or in any other provision of law, shall be construed as requiring any person or entity to purchase windstorm and earthquake property insurance from the Authority.
 Any applicant, current or former policyholder, or other person or entity doing business with the Authority and who is affected by any decision of the Authority may appeal to the Insurance Commissioner in the manner, and by the method, provided for appeals in chapter 7 of this title.
 (a) The Authority shall submit to the Governor and the Legislature annually, after the close of its fiscal year, a report of the business of the Authority for the preceding fiscal year and two sets of annual statements; one prepared in accordance with National Association of Insurance Commissioners' guidelines and the other prepared in accordance with Generally Accepted Accounting Principles. (b) The Board shall submit to the Insurance Commissioner each year, and not later than three months after the Authority's fiscal year-end, two sets of Annual Statements; one prepared in accordance with National Association of Insurance Commissioners' guidelines and the other prepared in accordance with Generally Accepted Accounting Principles. (c) The Insurance Commissioner may require other reports concerning risks insured by the Authority as the Insurance Commissioner deems appropriate. (d) For the purpose of ascertaining its condition or compliance with this chapter, the Insurance Commissioner, as often as the Insurance Commissioner deems advisable, but at least once every three years, shall examine the accounts, records, documents, and transactions of the Authority. The Authority shall pay all reasonably incurred expenses of the examination.
 (a) Pursuant to the authority vested in the Government of the Virgin Islands by section 8(b)(i) of the Revised Organic Act of the Virgin Islands, as amended, the Government of the Virgin Islands hereby grants and empowers the Authority to issue and sell bonds from time to time and have outstanding at any one time, exclusive of bonds issued solely for the purpose of exchanging the same in return for the cancellation of bonds either issued by the Authority or assumed by it, bonds not in excess of $25,000,000, in aggregate principal amount, in addition to all sums that the Legislature of the Virgin Islands has authorized or may authorize separately for particular purposes; provided, however, that refunding bonds of the Authority issued solely for the purpose of applying the proceeds thereof to the payment for, or purchase of, bonds issued by the Authority or assumed by it, shall not be included in computing any such limitation until six (6) months after their sale. (b) Payment of the bonds of the Authority may be secured by a pledge of or a mortgage or other lien on all or any part of its real or personal properties, notes, loans, contracts, gross or net rates, fees, revenues, other income or bond proceeds to which the rights of the Authority then exist or may thereafter come into existence, by pledge of or lien on any bonds, notes, lease or sale obligations or other obligations of the Government of the Virgin Islands or any agency, instrumentality, commission, authority, or political subdivision thereof, or on any loan, guaranty, grant, or contribution, or parts thereof, from the United States, any agency, instrumentality, commission, authority or other political subdivision thereof, the Government of the Virgin Islands or by letter of credit, insurance or other credit enhancement device or any other source. It is the intention hereof that any pledge of revenues or other monies, or of a revenue producing contract or contracts made by the Authority to secure bonds or any other obligation of the Authority shall be valid and binding from the time when the pledge is made; that the revenues, or other monies or proceeds of any contract or contracts so pledged and thereafter received by the Authority shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act; and that the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the Authority irrespective of whether such parties have notice thereof. Neither the resolution nor any other instrument by which a pledge is created need be recorded. (c) In accordance with section 8(b) of the Revised Organic Act of the Virgin Islands, as amended, the bonds shall be exempt as to principal and interest from taxation by the Government of the Virgin Islands, or by any political subdivision of the Virgin Islands. (d) Bonds shall be authorized by resolution or resolutions of the Board, and shall comply with all pertinent provisions of the Revised Organic Act of the Virgin Islands, as amended, or such other provisions of applicable federal law as may be in effect at the time. Except as otherwise provided for by said act or other federal law, bonds may be issued in one or more series and shall bear such date or dates, mature in such amounts and at such time or times, be subject to redemption prior to maturity at such time or times and upon such terms, be in such denomination or denominations, be in such form, either coupon or registered, carry such conversion or registration privileges, have such rank or priority, be issued as serial bonds, sinking fund bonds or term bonds or any combination thereof, be noninterest bearing or bear interest at such rate or rates payable currently or compounded, including rates that vary in accordance with a formula or procedure set forth or referred to in the bonds, be general obligations of the Authority payable out of any revenues of such Authority, subject only to any agreement with the holders of particular bonds, pledging any particular revenues of the Authority, or be revenue bonds secured in such manner as the Authority may determine, be executed by manual or facsimile signature of the chairman of the Authority in such manner, and be payable in such medium of payment, at such place or places, may be declared or become due at such time before the maturity date thereof, may be authenticated in such manner and upon compliance with such conditions, and may contain such other terms and covenants as the Board may provide. (e) The bonds shall be sold at public or private sale, as permitted by the Revised Organic Act of the Virgin Islands, as amended, or other applicable federal laws, at such price or prices as the Authority may determine. (f) In case any of the members or officers of the Authority whose signatures appear on any bonds or coupons shall cease to be such members or officers before the delivery of such bonds, such signatures shall, nevertheless, be valid and sufficient for all purposes, the same as if such members or officers had remained in office until such delivery. Any provisions of any law to the contrary notwithstanding, any bonds issued by the Authority pursuant to this chapter shall be negotiable for all purposes, subject only to the provisions of bonds for registration. (g) Neither the members of the Authority nor any person duly authorized to execute the bonds shall be liable personally on the bonds or be subject to any liability by reason of the issuance thereof. (h) In any suit, action, or proceedings involving the validity or enforceability of any bond of the Authority or the security therefor, any such bond reciting in substance that it has been issued by the Authority to aid in financing a designated facility, program or project shall be conclusively deemed to have been issued for such purpose, and the facility, program or project shall be conclusively deemed to have been undertaken or acquired in accordance with the provisions of this chapter. (i) Upon the issuance of the bonds, the Authority to issue the bonds, the regularity thereof, the validity of any pledge or lien, in connection therewith, and the validity and legality of the resolution authorizing the bonds and the proceedings so adopted shall be conclusively presumed. (j) In any resolution, trust indenture or other contractual commitment authorizing the issuance of bonds, the Authority may contract with the holders of the bonds to undertake and obligate itself by such commitments, as long as the bonds are outstanding and unpaid, as are deemed by the Board to be necessary or appropriate for the protection of the bondholders and the marketability of the bonds, and, specifically in addition to any other provisions, may: (1) covenant as to the disposition of the entire gross or net revenues and present or future income of the Authority, of any loans made or bonds purchased by the Authority or of any other property, real or personal, of the Authority, including the pledging of all or any part thereof to secure payment of the bonds and the interest thereon; (2) covenant against making, permitting or suffering any pledge or other lien on all or any part of its receipts, revenues or other income, or loans made or bonds purchased or other real or personal property to which its right or title then exists or may thereafter come into existence; covenant with respect to limitations on any sale, lease or other disposition of the property of the Authority or any part or parts thereof; and covenant as to what other or additional debts or obligations may be incurred by it; (3) covenant as to the bonds then or thereafter to be issued, as to the issuance of such bonds in escrow or otherwise, as to the use and disposition of the proceeds thereof, and as to the limitations on the issuance of additional bonds; covenant against extending the time for the payment of its bonds or interest thereon; and covenant for redemption of the bonds and provide for the terms and conditions thereof; (4) covenant as to the rates, fees, rentals, and other charges to be fixed and collected, the amount to be raised each year or other period of time thereby, and as to the use and disposition to be made thereof; (5) create or authorize the creation of special funds or reserves for moneys held for debt service, reserves, or other purposes; and covenant as to the use, disposition and investment of the moneys held in such funds; (6) covenant as to the use, maintenance and replacement of any or all of its real or personal property, the amount and kind of insurance to be carried thereon and the use and disposition of insurance moneys; (7) prescribe the procedure, if any, by which the terms of the bonds, resolution, or any other contract with the bondholders may be modified, the amount of bonds, the holders of which must consent thereto, and the manner in which such covenant may be given; (8) covenant as to and prescribe the events of default and terms and conditions upon which any or all of its bonds shall become or may be declared due before maturity, and as to the terms and conditions upon which such declaration and its consequences may be waived; (9) covenant as to the rights, liabilities, powers and duties arising upon the nonperformance by the Authority of any of its covenants, conditions, or obligations, including the rights and remedies of bondholders which may be in addition to remedies specified in this chapter; (10) vest in a trustee or trustees the right to enforce the payment of the bonds or any covenants securing or relating to the bonds and the right, in the event of a default by the Authority, to take possession of and use, operate and manage the Authority or any part or parts thereof or any funds connected therewith, to enforce the terms and conditions of any loans of the Authority then outstanding, and to collect the rates, fees, revenues, or other income arising therefrom and to dispose of such moneys in accordance with the agreement of the Authority with the holders of the bonds; provide for the powers and duties of such trustee or trustees which may be a national banking association or a bank or trust company organized under the laws of the United States, or of the Virgin Islands or any state of the United States, and limit the liabilities thereof; and provide the terms and conditions upon which the holders of the bonds or any proportion of them may enforce any covenant or rights securing or relating to the bonds; and (11) exercise all or any part or combination of the powers herein granted; make covenants and do any and all such acts and things not inconsistent with this chapter as may be necessary and desirable in order to secure its bonds, or as may tend to make the bonds more marketable notwithstanding that such covenants, acts or things may not be enumerated herein.
 (a) Subject to any contractual limitations binding upon the holders of any issue of bonds, or trustees therefor including, but not limited to the restriction of the exercise of any remedy to a specified proportion or percentage of such holders, any holder of bonds, or trustee therefor, shall have the right and power, for the equal benefit and protection of all holders of bonds similarly situated, to exercise such remedies and take such other actions to protect or preserve its rights with respect to any issue of bonds as shall be set forth in the related resolution, trust indenture or other contractual commitment authorizing the issuance of the bonds including, but not limited to the following: (1) by mandamus or other suit, action, or proceeding at law or in equity to compel the Authority and its Board, officers, agents or employees to perform and carry out its and their duties and obligations under this chapter and its and their covenants and agreements with bondholders; (2) by action or suit in equity to require the Authority and the Board thereof to account as if they were the trustees of an express trust; (3) to declare the bonds immediately due and payable; (4) by action or suit in equity to enjoin any acts or things which may be unlawful or in violation of the rights of the bondholders; and (5) to bring suit upon the bonds. (b) The faith and credit of the Government of the Virgin Islands shall not be pledged for the payment of the principal and interest of the bonds, and there shall be on the face of each bond a statement plainly worded to that effect. The Authority has no taxing power and its obligations are not debts of the Government of the Virgin Islands or any political subdivision of the Virgin Islands. No holder of the bonds shall have the right to compel any exercise of the taxing power of the Government of the Virgin Islands to pay the principal of or interest on the bonds. (c) The Government of the Virgin Islands does hereby pledge to, contract and agree with, any person, firm or corporation, or any federal, Virgin Islands or state agency, subscribing to or acquiring bonds of the Authority issued for the purposes of this chapter, that it obligates itself not to limit or alter the rights or powers hereby vested in the Authority to fulfill the terms of any agreements made with the holders of the bonds, or in any way impair the rights or remedies of such bondholders until all such bonds at any time issued, together with interest thereon, are fully met and discharged. (d) The bonds are hereby made securities in which all public officers and bodies of the Virgin Islands and all agencies, instrumentalities, commissions, authorities, and political subdivisions thereof, all insurance companies and associations and other persons carrying on an insurance business, and all banks, bankers, trust companies, savings banks and savings associations, including savings and loan associations, building and loan associations, investment companies and other persons carrying on a banking business, and all other persons whatsoever who are now or may hereafter be authorized to invest in bonds or other obligations of the Authority, may properly and legally invest funds including capital in their control or belonging to them. (e) The bonds are also hereby made securities which may be deposited with and shall be received by all public officers and bodies of the Virgin Islands and all agencies, instrumentalities, commissions, authorities, and political subdivisions thereof, for any purpose for which the deposit of bonds or other obligations of the Authority is now or may hereafter be authorized.
 (a) The purpose for which the Authority is created, and the exercise of all powers and duties of the Authority, are a public purpose. The Authority is exempt from the payment of any taxes or assessments on any of the property acquired or to be acquired by it, or on its operations or activities, or on the income derived from any of its operations, or activities with the exception of premium taxes which it shall pay pursuant to section 603 of chapter 25 of this title. (b) The Authority shall participate in the Virgin Islands Insurance Guaranty Association, and is a member insurer as that term is used in chapter 10 of this title.
 (a) The Authority shall be dissolved within six months after a finding by the Board, and ratification by the Legislature of the Virgin Islands, of one or more of the following, provided the requirements of subsection (b) of this section have been met: (1) federal legislation has been enacted that will supersede windstorm and earthquake property insurance as provided by the Authority; (2) insurance companies doing business in the Virgin Islands have sufficient capacity to cover windstorm and earthquake property insurance and are offering policies at reasonable rates; (3) a combination of paragraphs (1) and (2) of this section. (b) The Authority may not be dissolved unless all of the following conditions are met: (1) the Insurance Commissioner agrees that dissolution of the Authority is in the public interest and not violative of existing contracts between the Authority and other parties; and (2) the Insurance Commissioner has approved a plan of dissolution as proposed by the Authority; and (3) the policyholders of the Authority have a reasonable opportunity to obtain similar or better coverage from another entity at a competitive rate; and (4) there will be no interruption of coverage of the eligible property in the transition from the Authority to another entity; and (5) all of the rights and privileges of the bondholders have been met; and (6) all of the debts and obligations of the Authority have been or will be paid prior to the dissolution of the Authority; and (7) such other requirements as the Insurance Commissioner deems fair and equitable in the dissolution of the Authority; and (8) The Legislature of the Virgin Islands has ratified the decision of the Insurance Commissioner to dissolve the Authority.
 This chapter maybe cited as The Virgin Islands Third Party Administrators Act.
 For purposes of this chapter: (a) Affiliate or affiliated means a person who directly or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, another specified person. (b) Business entity means a corporation, association, partnership, limited liability company or other legal entity. (c) Collateral means funds, letters of credit or any item with economic value owned by the payor, but held by an insurer or Third Party Administrator (TPA) if it needs to be used to fulfill premium or loss reimbursement obligations in accordance with a contract between the insurer or TPA and the payor. Collateral includes anticipated loss prepayments made before the payment of losses, pursuant to arrangements where reimbursement is not due until after losses have been paid. (d) Commissioner means the Commissioner of Insurance. (e) Control, including the terms controlled by and under common control with, means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if any person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing, 10 percent or more of the voting securities of any other person. This presumption may be rebutted by a showing section 325(k) of this title that control does not exist in fact. The Commissioner may determine, after furnishing all persons in interest notice and opportunity to be heard and making specific findings of fact to support the determination that control exists in fact notwithstanding the absence of a presumption to that effect. (f) GAAP means United States Generally Accepted Accounting Principles, consistently applied. (g) Home state means the TPAs state of domicile that has granted the TPA a TPA license. It does not include jurisdictions that are outside of the United States, the District of Columbia, the Commonwealth of Puerto Rico and other U.S. territories. (h) Insurer means an entity licensed in a United States jurisdiction to provide life, annuity, health or stop-loss coverage as an insurance company, health maintenance organization, fraternal benefit society, multiple employer welfare arrangements, employee leasing company, professional employer organization, prepaid hospital or medical care plan. (i) Insurance producer or producer means a person required to be licensed under the laws of the Virgin Islands to sell, solicit or negotiate insurance. (j) Nonresident TPA means a TPA whose home state is any United States jurisdiction other than the Virgin Islands. (k) Payor means an insurer or an employer administering its employee benefit plan or the employee benefit plan of an affiliated employer under common management and control. (l) Person means an individual or a business entity. (m) Stop-loss Insurance means insurance protecting an employer or other person responsible for an otherwise self-insured health or life benefit plan against obligations under the plan, but stop-loss insurance does not include reinsurance written for an insurance company. (n) Third Party Administrator or TPA means a person who directly or indirectly underwrites, collects charges, collateral or premiums from, or adjusts or settles claims on residents of the Virgin Islands, in connection with life, annuity, health or stop-loss coverage. The term does not include a person whose only actions that would otherwise cause it to be considered a TPA consist of: (1) A person working for a TPA to the extent that the persons activities are subject to the supervision and control of the TPA; (2) An employer administering its employees benefits plan or the employee benefit plan of an affiliated employer under common management and control; (3) The administration of a bona fide employee benefit plan established by an employer or an employee organization, or both, for which the insurance laws of the Virgin Islands are pre-empted pursuant to the Employee Retirement Income Security Act of 1974, as the act existed on September 15, 2015; (4) A union administering a benefit plan on behalf of its members; (5) An insurer administering insurance coverage for its policyholders, subscribers or certificate holders, or those of an affiliated insurer under common management and control; (6) An insurer directly or indirectly underwriting, collecting charges, collateral or premiums from, or adjusting or settling claims on behalf of a client that is not a policyholder, subscriber or certificate holder, and that has its United States headquarters or principal location of business in a jurisdiction in which the insurer is licensed to write that coverage; (7) An insurer directly or indirectly underwriting, collecting charges, collateral or premiums, or adjusting or settling claims, if the insurer is licensed in the Virgin Islands to write that line of insurance coverage; (8) An insurance producer selling insurance or engaged in related activities within the scope of the producers license; (9) A creditor acting on behalf of its debtors with respect to insurance covering a debt between the creditor and its debtors; (10) A trust and its trustees and agents acting pursuant to such trust established in conformity with 29 U.S.C. section 186; (11) A trust exempt from taxation under section 501(a) of the Internal Revenue Code and its trustees acting pursuant to such trust, or a custodian and the custodians agents acting pursuant to a custodian account which meets the requirements of section 401(f) of the Internal Revenue Code; (12) A credit union or a financial institution that is subject to supervision or examination by federal or state banking authorities, or a mortgage lender, when collecting or remitting premiums to licensed insurance producers or to limited lines producers or authorized payors in connection with loan payments; (13) A credit card issuing company advancing or collecting insurance premiums or charges from its credit card holders who have authorized collection if that company does not adjust or settle claims; (14) An individual adjusting or settling claims in the normal course of that individuals practice or employment as an attorney at law and who does not collect charges or premiums in connection with insurance coverage; (15) A person licensed as a managing general agent in the Virgin Islands when acting within the scope of that license; or (16) A business entity that is affiliated with a licensed insurer while acting as a TPA for the direct and assumed insurance business of an affiliated insurer. (o) Underwrites or underwriting means, but is not limited to, the acceptance of employer or individual applications for coverage of individuals and the overall planning and coordination of a benefits program. (p) Covered Individual means any individual eligible for life or accident or health benefits under a plan. (q) Contributions means any money charged a covered individual, plan sponsor or other entity to fund the self-insured portion of any plan in accordance with written provisions of the plan or contract of insurance. The term includes administrative fees charged to a covered individual. Administrative fee means any compensation paid by a covered individual for services performed by an administrator. (r) Premiums means any money charged a covered individual, plan sponsor or other entity to provide life or accident or health insurance under a plan. The term premium includes amounts paid by or charged to a covered individual plan sponsor or other entity for stop loss or excess insurance. (s) Charges means any compensation paid by a plan sponsor or insurer for services performed by an administrator. (t) Third Party Administrator Trust Fund Account or TPATFA, means a special fiduciary account established and maintained by an administrator pursuant to section 1527 from which claims and claims adjustment expenses are disbursed. (u) Claims Administrative Services Account or CASA, means a special fiduciary account established and maintained by an administrator pursuant to section 1528 from which claims and claims adjustment expenses are disbursed. (v) Financial Institution means any federal, state or territorial chartered bank or savings and loan institution that is insured by the Federal Deposit Insurance Corporation (FDIC) or the Federal Savings and Loan Insurance Corporation (FSLIC). (w) Plan means any plan, fund or program established or maintained by a plan sponsor or insurer to the extent that the plan, fund or program was established or is maintained to provide through insurance or alternatives to insurance any type of life or health coverage.
 It is unlawful for a person to act as a TPA in the Virgin Islands unless that person is licensed as a TPA under this chapter. This prohibition does not apply to a person while employed by, or when operating under contract with the TPA licensed under this chapter. Any entity doing business as a TPA in the Virgin Islands on the effective date of this chapter shall apply for a license not later than 30 days after the effective date of this chapter and may not act as, or hold himself out to be a TPA 90 days after the effective date of this chapter without being duly licensed as required under this chapter.
 If an insurer uses the services of a TPA, any premiums or charges for insurance paid to the TPA by or on behalf of the insured party, or any collateral furnished to the TPA by or on behalf of the insured party, is considered to have been received by the insurer, and the return of collateral or the payment of return premiums or claim payments forwarded by the insurer to the TPA is not considered paid to the insured party or claimant until the payments are received by the insured party or claimant. Nothing in this section limits any right of the insurer against the TPA resulting from the failure of the TPA to make payments to the insurer, insured parties or claimants.
 (a) A TPA shall maintain in its principal office and make available to the payor complete books and records of all transactions performed on behalf of the payor. The books and records must be maintained as part of the TPAs official records in accordance with prudent standards of insurance record keeping and must be maintained during the term of the agreement referenced in section 1526 and for a period of not fewer than five years after the expiration of the agreement. (b) The Commissioner shall have access to books and records maintained by a TPA for the purposes of examination, audit and inspection. The provisions of chapter 5 of this title apply to the examinations as if the TPA were an insurer under this title. Any information, documents, or other materials in the possession or control of the Commissioner that are furnished by a TPA, payor, insurance producer or an employee or agent thereof acting on behalf of the TPA, payor or insurance producer, or obtained by the Commissioner in an investigation or examination are confidential and privileged, and are not subject to examination by the public, to subpoena, to discovery or admissible in evidence in any private civil action. However, the Commissioner may use the documents, materials or other information in the furtherance of any regulatory or legal action brought as a part of the Commissioners official duties. (c) Neither the Commissioner nor any person who receives documents, materials or other information while acting under the authority of the Commissioner is permitted or required to testify in any private civil action concerning confidential documents, materials, or information subject to be received pursuant to subsection (b). (d) To assist in the performance of the Commissioners duties, the Commissioner may: (1) share documents, materials or other information, including the confidential and privileged documents, materials or information subject to subsection (b), with state, federal and international regulatory agencies, with the NAIC, its affiliates or subsidiaries and with state, federal and international law enforcement authorities, if the recipient agrees to maintain the confidentiality and privileged status of the document, material or other information; (2) receive documents, materials or information, including otherwise confidential and privileged documents, materials or information, from the NAIC, its affiliates or subsidiaries, and from regulatory and law enforcement officials of other foreign or domestic jurisdictions and shall maintain as confidential or privileged any document, material or information received with notice or the understanding that it is confidential or privileged under the laws of the jurisdiction that is the source of the document, material or information; and (3) enter into agreements governing sharing and use of information consistent with this section. (e) No waiver of any applicable privilege or claim of confidentiality in the documents, materials or information may occur as a result of disclosure to the Commissioner or as a result of sharing as authorized in subsection (d). (f) Nothing in this chapter prohibits the Commissioner from releasing final adjudicated actions, including for cause terminations that are open to public inspection pursuant to section 3 V.I.C. 881 or to a database or other clearinghouse service maintained by the NAIC, its affiliates or subsidiaries. (g) Notwithstanding any contractual agreements between the payor and the TPA which operate to the contrary, the TPA retains the right to sufficient continuing access to books and records to permit the TPA to fulfil all its contractual obligations to insured parties, claimants, and the payor. (h) If the payor or the TPA cancel their agreement; notwithstanding the provisions of subsection (a), the TPA may, by written agreement with the payor, transfer all records to a new TPA rather than retain them for five years. In such cases, the new TPA must acknowledge in writing, that the TPA is responsible for retaining the records of the old TPA as required in subsection (a).
 A TPA who advertises on behalf of its client may use only advertising that has been approved in writing by the client in advance of its use and which conforms to the requirements of chapter 49 of this title. A TPA who mentions any current or former client in its advertising must obtain the clients prior written consent.
 (a) No TPA may act as a TPA without a written agreement between the TPA and the payor. A copy of the agreement must be retained by the TPA for the duration of the agreement and for five years thereafter. The agreement must contain all provisions required by this section, except insofar as the TPA does not perform all the functions referenced in this section. (b) A payor who uses the services of a TPA retains responsibility for the benefits, premium rates, collateral and reimbursement procedures, underwriting criteria and claims payment procedures applicable to the coverage and for securing reinsurance or stop-loss insurance. The rules pertaining to these matters, to the extent that they are relevant to the duties of the TPA, must be agreed to in writing by the payor and the TPA. (c) An insurer using the services of a TPA is responsible for the acts of the TPA and is responsible for providing the TPAs books and records relevant to the insurer to the Commissioner upon request. (d) The written agreement between the TPA and the payor must provide that communications between the TPA and claimants must avoid deceptive statements regarding the responsibilities of the TPA, payor and any insurer as to claims or premiums. (e) The TPA and the payor must adhere to the requirements of chapter 49 of this title regarding the prohibition on engaging in unfair practices and fraud. (f) If a dispute arises between the payor and the TPA regarding which of them is to fulfil a lawful obligation with respect to a policy, certificate or claim, subject to the written agreement, the payor shall fulfill such obligation. (g) The payor has the duty to ensure competent administration of its programs administered by a TPA and within the scope of this chapter. (h) When a TPA administers benefits in connection with life, annuity, health and employee benefit stop-loss coverage for more than 100 certificate holders, subscribers, claimants or policyholders on behalf of an insurer, the insurer shall, at least semi-annually, conduct a review of the operations of the TPA. At least one such review must include an on-site audit of the operations of the TPA. The cost of such reviews or audits must be borne by the insurer and not reimbursed by the TPA. The requirements of this subsection do not apply when the TPA and the insurer are affiliated. (i) Each TPA shall advise the Commissioner of any ownership interest in or affiliation of any kind with any payor responsible directly or through reinsurance for providing benefits to any plan for which the administrator provides services. (j) The TPA shall file with the Commissioner the names and addresses of the payors with whom the TPA has service agreements. If a payor does not assume or bear the risk, the TPA shall disclose the name and address of the ultimate risk bearer. This filing requirement applies to the initial application for a TPAs license and for the renewal of TPA license. (k) The payor owns the records generated by the TPA pertaining to the payor, except that the TPA retains the right to continuing access to books and records to permit the TPA to fulfill all its contractual obligations to the payor.
 (a) All insurance charges, premiums, collateral, and loss reimbursements collected by a TPA on behalf of or for a payor, the return of premiums or collateral received from a payor, and any funds held by the TPA for the payment of claims, must be held by the TPA in a fiduciary capacity. The funds may not be used as general operating funds of the TPA and must be immediately remitted to the person entitled to them, or must be deposited promptly in a fiduciary account established and maintained by the TPA in a federally insured financial institution. This special fiduciary account must be known as a Third Party Administrator Trust Fund Account (TPATFA). The TPA shall render a periodic accounting to the payor detailing all transactions performed by the TPA pertaining to the business of the payor and the written agreement between the payor, and the TPA must include the specifications of this reporting. All TPATFA funds must be deposited and maintained in financial institutions that are located within the Virgin Islands and are subject to the jurisdiction of courts located within the Virgin Islands. (b) The TPA shall keep copies of all records of any TPATFA maintained or controlled by the TPA, and, upon request of a payor, shall furnish the payor with copies of the records pertaining to the deposits and withdrawals made on behalf of the payor. If funds deposited in a TPATFA have been collected on behalf of or for more than one payor or for the payment of claims associated with more than one policy, the TPA shall keep records clearly recording the deposits in and withdrawals from the account on behalf of each payor and relating to each policyholder. (c) The TPA may not pay any claim by withdrawals from a TPATFA in which premiums or charges are deposited. Withdrawals from a TPATFA must be made as provided in the written agreement between the TPA and the payor, and only for the following purposes: (1) remittance to a payor entitled to remittance; (2) deposit in an account maintained in the name of the payor; (3) transfer to and deposit in a CASA, with claims to be paid as provided in section 1528; (4) payment to a group policyholder for remittance to the payor entitled to such remittance; (5) payment to the TPA of its earned commissions, fees or charges as set forth in the written agreement between the TPA and the payor; (6) remittance of return premium to the person or persons entitled to such return premium; or (7) payment to other service providers as authorized by the payor.
 The TPA is the trustee for all money that is received to pay claims and claim adjustment expenses. All claim moneys must be deposited in a special fiduciary account in a financial institution that is located in the Virgin Islands. The special fiduciary account must be designated as a CASA. All claims paid by the TPA from funds collected on behalf of or for a payor must be paid only as authorized by the payor. Payments from an account maintained or controlled by the TPA for purposes including the payment of claims must be made only for the following purposes: (1) payment of valid claims; (2) payment of expenses associated with claims handled by the TPA or to other service providers approved by the payor; (3) remittance to the payor, or transfer to a successor TPA, as directed by the payor, for the purpose of paying claims and associated expenses; or (4) return of funds held as collateral or prepayment to the person entitled to those funds, upon a determination by the payor that those funds are no longer necessary to secure or facilitate the payment of claims and associated expenses.
 (a) For each plan that requires a TPATFA, the balance at all times must be the amount deposited plus accrued interest less authorized disbursements. If the TPATFA balance is less than the amount deposited plus accrued interest less authorized disbursements, it is presumed that the TPA misappropriated fiduciary funds and has acted in a financially irresponsible manner. (b) If the TPATFA is interest bearing or income producing, the full nature of the account must be disclosed to the payor. The TPA shall secure written permission and authorization from the payor to invest the funds or otherwise dispose of the interest or earnings. No investment may be made that assumes any risk other than the risk that the obligor may not pay the principal when due. The use of specialized techniques or strategies that incur additional risks to generate higher returns or to extend maturities is not permitted. Such techniques include, but may not be limited to, the use of financial futures or options, buying on margins and pledging of TPATFA balances. (c) The TPA may place TPATFA funds in interest-bearing or income-producing investments and retain the interest or income thereon, if the TPA obtains the prior written authorization of the payor. In addition to savings and checking accounts, a TPA may invest in the following: (1) direct obligations of the United States of America or U.S. Government agency securities with maturities of not more than one year; (2) certificates of deposit, with a maturity of not more than one year, issued by financial institutions that are insured by the FDIC or FSLIC, so long as the deposit does not exceed the maximum level of insurance protection provided to certificates of deposits held by such institutions; (3) repurchase agreements with financial institutions or government securities dealers recognized as primary dealers by the Federal Reserve System if: (A) The value of the repurchase agreement is collateralized with assets which are allowable investments for TPATFA funds; and (B) The collateral has a market value at the time the repurchase agreement is entered into at least equal to the value of the repurchase agreement; and (C) The repurchase agreement does not exceed 30 days; (4) commercial paper, if the commercial paper is rated at least P-1 by Moodys Investors Service, Inc. or at least A-1 by Standard & Poors Corporation; (5) money market funds, if the money market funds invest exclusively in assets that are allowable investments under paragraphs (1) through (4) for TPATFA funds and the following conditions are met: (A) Each investment transaction must be made in the name of the TPAs TPATFA: (B) The TPA shall maintain evidence of any investments; and (C) Each investment transaction must flow through the TPAs TPATFA. (d) No deposit may be made into a CASA or disbursement made from a CASA except for claims and claims adjustment expenses. (e) For each plan where a CASA is required, the balance in the CASA must at all times be the amount deposited less claims and claims adjustment expenses paid. If the balance is less than that amount, it is presumed that the TPA has misappropriated the funds and has acted in a financially irresponsible manner. (f) The TPA shall maintain detailed books and records that reflect all transactions involving the receipt and disbursement of: (1) contributions and premiums received on behalf of a payor; and (2) claims and claim adjustment expenses received and paid on behalf of a payor. (g) The detailed preparation, journalizing and posting of books and records must be maintained on a timely basis, and all journal entries for receipts and disbursements must be supported by evidential matter that must be referenced in the journal entry so that it may be traced for verification. The TPA shall prepare and maintain monthly financial institution account reconciliation of all TPATFA and CASA established by the TPA. The minimum detail required is as follows: (1) the sources, amounts and dates of any money received and deposited by the TPA; (2) the date and person to whom a disbursement is made. If the amount disbursed does not agree with the amount billed or authorized, the TPA shall prepare a written record as to the reason; and (3) a description of the disbursement in such detail to identify the source document substantiating the purpose of the disbursement. (h) Failure of the TPA to accurately and timely maintain the books and records is considered untrustworthy, hazardous or injurious to participants in the plan or the public and financially irresponsible.
 (a) It is unlawful for a TPA to enter into an agreement or understanding with a payor in which the effect is to make the amount of the TPAs commissions, fees, or charges contingent upon savings effected in the payment of losses covered by the payors obligations. This subsection does not prohibit a TPA from receiving performance-based compensation for providing hospital or other auditing services, from providing managed care or related services, or from being compensated for subrogation expenses. (b) It is unlawful for a payor to enter into an agreement with a TPA in violation of this section. (c) This section does not prevent the compensation of a TPA from being based on premiums or charges collected or the number of claims paid or processed. (d) It is unlawful for a TPA to receive from a payor, covered individual or beneficiary under a plan any compensation or other payments, except as expressly set forth in the agreement between the administrator and the payor.
 (a) When a TPA collects funds, the reason for collection of each item must be identified to the insured party, and each item must be shown separately from any premium. Additional charges may not be made for services to the extent the services have been already paid for by the payor. (b) The TPA shall disclose to the payor all charges, fees and commissions that the TPA receives arising from services it provides for the payor, including any fees or commissions paid by payors providing reinsurance or stop-loss insurance.
 Any policies, certificates, booklets, termination notices, or other written communications delivered by the payor to the TPA for delivery to insured parties or covered individuals must be delivered by the TPA promptly after receipt of instructions from the payor to deliver them. All policies, certificates, booklets, termination notices or other written communications must conform to any rules and regulations promulgated by the Commissioner and the provisions of this title.
 (a) A TPA applying in the Virgin Islands for licensure shall do so on a form provided by the Commissioner accompanied by the certification of an authorized representative of the TPA. (b) The application must include or be accompanied by the following information and documents: (1) the names, titles and contact information for all authorized company representatives who are the applicants contact for department communications regarding licensure and related filings, consumer complaints and the required statutory deposit; (2) unless a TPA who is a nonresident of Virgin Islands is notified by the Commissioner that the Commissioner is able to verify the TPAs home state certificate of authority or license status through an electronic database maintained by the NAIC, an annual statement filed by nonresident TPA, its affiliates, or subsidiaries, from the nonresidents home states licensing authority stating that its home state TPA certificate of authority or license remains in force and has not been revoked or suspended by its home state during the preceding year. (3) all basic organizational documents of the applicant, including any articles of incorporation, articles of association, partnership agreement, trade name certificate, trust agreement, shareholder agreement and any other documents governing the operation of applicant that are applicable to the applicants form of business organization and all amendments to such documents; (4) a copy of the executed bylaws, rules, regulations or similar documents regulating the operation of the applicants internal affairs; (5) the names, addresses and official positions of the persons responsible for the conduct of the affairs of the applicant, including, but not limited to each member of the board of directors, board of trustees, executive committee, or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholders or member holding directly or indirectly 10 percent or more of the voting stock, voting securities or voting interest of the applicant; any person who loaned funds to the applicant for the operation of the business; and any other person who exercises control or influence over the affairs of the applicant; (6) a fully completed and notarized biographical affidavit for each individual who is listed in paragraph (5); (7) annual financial statements or reports, prepared in accordance with GAAP and audited by an independent certified public accountant, for the two most recent fiscal years that prove that the applicant has a positive net worth. If the financial affairs of the applicants parent company are audited by an independent certified public accountant, but those of the applicant are not, then a copy of the most recent audited financial statement of the applicants parent company, audited by an independent certified public accountant, must be submitted. A consolidated financial statement of the applicant and the parent company satisfies this requirement unless the Commissioner determines that additional or more recent information is required for the proper administration of this chapter. If the applicant has been in existence for less than two fiscal years, the application must include financial statements or reports, certified by an officer of the applicant and prepared in accordance with GAAP, for any completed fiscal years, and for any month during the current fiscal year for which such financial statements or reports have been completed. An audited financial or annual report prepared on a consolidated basis must include a columnar consolidating or combining worksheet that must be filed with the report and include the following: (A) amounts shown on the consolidated audited financial report must be shown on the worksheet; (B) amounts for each entity must be stated separately; and (C) explanations of consolidating and eliminating entries must be included. The applicant shall also include such other information as the Commissioner may require to review the current financial condition of the applicant; (8) a copy of the applicants business plan that includes, but is not limited to, information on staffing levels and activities proposed in the Virgin Islands and nationwide. The plan must provide details setting forth the applicants source of initial funding, and a statement of the applicants qualifications and capability to carry out the plan and for providing a sufficient number of experienced and qualified personnel in the areas of claims processing, record keeping, and underwriting; (9) a list of benefit payors under contract with the applicant and a copy of the standard contract or contracts used by the applicant in the course of business; (10) a resolution duly executed by the applicant, appointing the Commissioner and the Commissioners successor in office as the true and lawful agent of the applicant in and for the Virgin Islands upon whom all lawful process in any legal action, or proceeding against the organization on a cause of action arising in the Virgin Islands may be served; (11) a non-refundable filing fee and a license fee to be established by the Commissioner; and (12) other pertinent information as may be required by the Commissioner. (c) A TPA licensed or applying for licensure under this section shall make available for inspection to the Commissioner copies of all contracts with payors or other persons utilizing the services of the TPA. (d) A TPA licensed or applying for licensure under this section shall produce its accounts, records and files for examination, and make its officers available to give information with respect to its affairs, as often as reasonably required by the Commissioner. (e) The Commissioner may refuse to issue a license if the Commissioner determines that the TPA or any individual responsible for the conduct of affairs of the TPA is not competent, trustworthy, financially responsible or of good personal and business reputation, or has had an insurance or a TPA certificate of authority or license denied or revoked for cause by any jurisdiction, or if the Commissioner determines that any of the grounds set forth in section 1539 of this chapter exists with respect to the TPA. (f) Unless surrendered, suspended or revoked by the Commissioner, a license issued under this section remains valid for so long as the TPA continues in business in the Virgin Islands, if the holder of the license maintains a valid bond as required by section 1534 and pays the annual fee to be established from time to time by the Commissioner prior to the anniversary date of the license, and remains in compliance with this chapter., (g) A TPA licensed or applying for licensure under this section shall notify the Commissioner within 30 days after any material change in its ownership, control, contact person for the TPA or other fact or circumstance affecting its qualification for a license in the Virgin Islands. The Commissioner shall report any such changes to the appropriate electronic database maintained by the AIC or its affiliates. (h) A TPA who is a non-resident of the Virgin Islands is not eligible for a TPA license under this section if it does not hold a home state certificate of authority or license in a state that has adopted the NAIC Third Party Administrator Model Law or a state that applies substantially similar provisions as are contained in that Model Law to that TPA. If the TPA act, in the TPAs home state does not extend to stop-loss insurance, but if the home state otherwise applies substantially similar provisions as are contained in the Model Law to that TPA, then that omission does not operate to disqualify the TPA from receiving a TPA license in the Virgin Islands. (i) Each license must contain the name, business address, an assigned identification number for the applicant, the issue date, date of expiration and any other information the Commissioner considers necessary. (j) A TPA license may not be issued to TPAs who are not domiciled in the United States, District of Columbia, Commonwealth of Puerto Rico or in some territory of the United States.
 (a) Every applicant for a TPA license shall file with the application and maintain while so licensed, a fidelity bond in favor of the Government of the Virgin Islands executed by a surety company and payable to any party injured under the terms of the bond. The bond must be continuous and in one of the following amounts: (1) for a TPA that maintains a TPATFA but does not maintain a CASA, the greater of $50,000 or 5 percent of contributions and premiums projected to be received or collected in the TPATFA for the forthcoming plan year from Virgin Islands residents, but not to exceed $1,000,000; (2) for a TPA that maintains a CASA but does not maintain a TPATFA, the greater of $50,000 or 5 percent of the claims and claim expenses projected to be held in the CASA for the forthcoming year to pay claims and claim expenses for Virgin Islands residents, but not to exceed $1,000,000; and (3) for a TPA that maintains both a TPATFA and a CASA, the greater amount in paragraphs (1) or (2), but not to exceed $1,000,000. (b) Notwithstanding paragraphs (1), (2), and (3) of subsection (a), upon an administrative finding by the Commissioner that the amounts prescribed in one or more of the paragraphs provide inadequate protection to the public, the Commissioner may, by regulation, prescribe higher amounts. A bond is required of a TPA who maintains or should maintain funds in a fiduciary capacity as set forth in sections 1527, 1528 and 1529, unless the TPA has contracted with the insurer as a TPA and if the plan is fully insured by the insurer on whose behalf the funds are being held. (c) The bond remains valid until the surety is released from liability by the Commissioner or until the bond is cancelled by the surety. The surety may cancel the bond and be released from further liability upon 30 days advance written notice to the Commissioner. The cancellation does not affect any liability incurred or accrued under the bond before the end of the 30-day period. Upon receipt of any notice of cancellation, the Commissioner shall immediately notify the licensee of the cancellation. (d) The license required by section 1533 automatically terminates if the bond required is cancelled or otherwise not valid. Not later than 30 days after cancellation or invalidity of the bond, the TPA shall return the license to the Commissioner for cancellation.
 A person who is not required to be licensed as a TPA under this chapter and who directly or indirectly underwrites, collects charges or premiums from, or adjusts or settles claims on residents of the Virgin Islands, only in connection with life, annuity or health coverage provided by a self-funded plan other than a governmental or church plan, shall register with the Commissioner annually, verifying its status as described in this section. This section does not apply to an insurer or to an individual performing these actions as an employee of an insurer. This section also does not apply to a person performing these actions under contract to or as an employee of a TPA.
 The Commissioner may issue a license to an applicant or approve an application for registration as a TPA if the Commissioner finds that the applicant meets the standards established by this chapter including, but not limited to, the following: (1) All of the materials required by this chapter or by the Commissioner have been filed; (2) The persons responsible for conducting the applicants affairs are competent, trustworthy and possess good reputations, and have appropriate experience, training and education; (3) The applicant has demonstrated the ability to assure that its services will be performed in a manner which will ensure the efficient operation of its business, including appropriate financial controls; (4) The standard contract forms to be used by the applicant are acceptable; (5) The applicant has adequate financial arrangements with the benefits payors for which it will perform its services and adequate arrangements for complying with the provisions of this chapter; (6) The compensation arrangements made between the applicant and benefits payors do not result in the assumption of financial risk by the applicant; (7) The bond requirement in section 1534 is met; and (8) In the case of an applicant for registration, the provisions of  1533 subsections (d), (e) and (f) apply only to services provided by the applicant to benefits payors other than an insurer.
 (a) Each TPA licensed under section 1533 shall file an annual report in duplicate originals for the preceding calendar year with the Commissioner on or before March 31 of each year, or within such extension of time as the Commissioner for good cause may grant. The report must be in the form prescribed by the Commissioner and must contain such additional information and attachments as the Commissioner determines necessary including, but not limited to, a disaggregation of all health insurance premiums received and claim payments made by the TPA from all other premiums and payments. The annual reports must include an audited financial statement audited by an independent certified public accountant. An audited financial or annual report prepared on a consolidated basis must include a columnar consolidating or combining worksheet that must be filed with the report and include the following: (1) Amounts shown on the consolidated audited financial report must be shown on the worksheet; (2) Amounts for each entity must be stated separately, and (3) Explanations of consolidating and eliminating entries must be included. The report must be verified by at least two officers of the TPA. (b) The annual report must include the complete names and addresses of all payors with whom the TPA had agreements during the preceding fiscal year. (c) At the time of filing its annual report, the TPA shall pay a filing fee as required by the Commissioner. (d) The Commissioner shall review the most recently filed annual report of each TPA on or before September 1 of each year. Upon completion of its review, the Commissioner shall either: (1) issue a certification to the TPA that the annual report shows that the TPA has a positive net worth as evidenced by audited financial statements and is currently licensed and in good standing, or noting any deficiencies found in that annual report and financial statements; or (2) update any electronic database maintained by the NAIC, its affiliates or subsidiaries, indicating that the annual report shows that the TPA has a positive net worth as evidenced by audited financial statements and complies with existing law, or noting any deficiencies found in the annual report.
 (a) The Commissioner or the Commissioners designee may examine the records of any applicant or holder of a TPA license. (b) Any TPA or applicant being examined shall provide to the Commissioner or the Commissioners designee convenient and free access during business hours to all books, records, documents and other papers relating to the TPAs or applicants business affairs. (c) The Commissioner or the Commissioners designee may question under oath any employee, contractor or payor about the business practices of the TPA. (d) The examiners designated by the Commissioner to conduct the examination may make reports to the Commissioner. Any report alleging substantive violations of this chapter must be in writing and must be verified by the examiners.
 (a) The Commissioner shall, deny, suspend or revoke the license of a TPA, or shall issue a cease and desist order if the TPA does not have a license if, after notice and opportunity for hearing, the Commissioner finds that the TPA: (1) is in an unsound financial condition; (2) is using such methods or practices in the conduct of its business so as to render its further transaction of business in the Virgin Islands hazardous or injurious to insured persons or the public; (3) has failed to pay any judgment rendered against it in the Virgin Islands within 60 days after the judgment has become final; (4) has, in the transaction of business under its license, used fraudulent, coercive or dishonest practices, or has demonstrated untrustworthiness or financial irresponsibility; or is not of good personal and business reputation; or (5) has obtained or attempted to obtain a license through misrepresentation or fraud. (b) The Commissioner may deny, suspend or revoke the license of a TPA, or may issue a cease and desist order if the TPA does not have a license if, after notice and opportunity for hearing, the Commissioner finds that the TPA: (1) has violated any lawful rule or order of the Commissioner or any provision of the insurance laws of the Virgin Islands; (2) has refused to be examined or to produce its accounts, records and files for examination, or if any individual responsible for the conduct of affairs of the TPA, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly 10 percent or more of the voting stock, voting securities or voting interest of the TPA, and any other person who exercises control or influence over the affairs of the TPA, has refused to give information with respect to its affairs or has refused to perform any other legal obligation as to an examination when required by the Commissioner; (3) has failed to appear without reasonable cause or excuse in response to a subpoena, examination warrant or any other order lawfully issued by the Commissioner; (4) has, without just cause, refused to pay proper claims or perform services arising under its contracts or has, without just cause, caused covered individuals to accept less than the amount due them or caused covered individuals to employ attorneys or bring suit against the TPA or a payor that it represents to secure full payment or settlement of such claims; (5) has misappropriated or converted to its own use, or improperly withheld, money required to be held in a fiduciary capacity; (6) is required under this chapter to have a license and fails at any time to meet any qualification for which issuance of a license may have been refused had the failure then existed and been known to the Commissioner, unless the Commissioner issued a license with knowledge of the ground for disqualification and had the authority to waive it; (7) has intentionally made a material misstatement on its application for a license; (8) if any of the individuals responsible for the conduct of its affairs, including members of the board of directors, board of trustees, executive committee or other governing board or committee; the principal officers in the case of a corporation or the partners or members in the case of a partnership, association or limited liability company; any shareholder or member holding directly or indirectly 10 percent or more of its voting stock, voting securities or voting interest; and any other person who exercises control or influence over its affairs has been, within the past three years, convicted of, or has entered a plea of guilty or nolo contendere to a felony without regard to whether adjudication was withheld, unless the person demonstrates to the Commissioner sufficient rehabilitation to warrant the public trust; (9) has had its license suspended or revoked or its application denied in any of the 50 states, the District of Columbia, or territories of the United States; (10) is affiliated with and is under the same general management or control as another TPA that transacts business in the Virgin Islands without a license issued under this chapter; or (11) has failed to file a timely annual report and the required filing fee pursuant to section 1537. (c) Denial of an application, suspension or revocation of a license, pursuant to subsections (a) and (b) must be by written order sent to the applicant or TPA by certified or registered mail at the address specified in the Commissioners records. The order must state the grounds, charges or conduct on which denial, suspension or revocation is predicated upon. The applicant or TPA may make a written request for a hearing not later than 30 days after the postmarked date of the order, if mailed or from the date of receipt, if hand delivered. If a written request for a hearing is not received by the Commissioner within the time specified, the order becomes final 30 days after the date of the order. Upon receipt of the request for a hearing, the Commissioner shall issue an order scheduling: (1) a specific date for the hearing which may not be less than 20 nor more than 30 days after receipt of the request for a hearing; and (2) a specific place and time for the hearing. (d) The Commissioner, in the Commissioners discretion, without notice, and before a hearing, may issue an order immediately suspending the license of a TPA, or may issue a cease and desist order if the TPA does not have a license, if the Commissioner finds that one or more of the following circumstances exist: (1) The TPA is insolvent or impaired; (2) A proceeding for receivership, conservatorship, rehabilitation or other delinquency proceeding regarding the TPA has been commenced in any state; or (3) The financial condition or business practices of the TPA otherwise pose an imminent threat to the public health, safety or welfare of the residents of the Virgin Islands. (e) At the time an order has been issued by the Commissioner in accordance with subsection (d)(1) through (3), the Commissioner shall serve notice to the TPA that the TPA may request a hearing not later than 10 business days after the receipt of the order. If a hearing is requested, the Commissioner shall schedule a hearing not later than 10 business days after receipt of the request. If a hearing is not requested and the Commissioner orders none, the order remains in effect until modified or vacated by the Commissioner. (f) If the Commissioner finds that one or more grounds exist for the suspension or revocation of a license issued under this chapter, or for a cease and desist order, the Commissioner may, in lieu of or in addition to the suspension, revocation or cease and desist order, impose a fine upon the TPA. (g) Any TPA whose license is revoked, suspended, or whose application is denied under this section is ineligible to reapply for any license for two years after the date of revocation or suspension of the license or denial of the application. A suspension under this section may be for a period of up to two years.
 (a) If the Commissioner finds that one or more grounds exist for the revocation or suspension of a license issued under this chapter, the Commissioner may, in lieu of, or in addition to such suspension or revocation, impose a fine upon the TPA. (b) The Commissioner may impose a fine upon a TPA not to exceed $5,000 for each violation for knowingly and willfully violating an order of the Commissioner. In no event, may the fine exceed an aggregate amount of $25,000 for any violations arising out of the same action.
 Any person aggrieved by an order of the Commissioner may appeal to the appropriate court in accordance with the appeals procedures set forth in chapter 7 of this title.
 Nothing in this chapter may be construed to permit any person or entity to receive or collect charges, contributions or premiums for, or adjust or settle claims in connection with any type of life or health benefit, unless that person or entity may through the insurance laws of a state or territory, or the Employee Retirement Income Security Act of 1974, 29 U.S.C.  1001, et seq., as amended (ERISA), provide benefits.
 Any TPA or any individual listed on the application as required by section 1533 who is convicted of a felony, must, not later than 30 days after the entry date of the judgment: (1) report the conviction to the Commissioner, and (2) provide the Commissioner with a copy of the judgment, the probation or commitment order and any other relevant documents.
 Pursuant to the authority vested in the Commissioner in chapter 3, of this title the Commissioner may issue regulations for the proper administration and functioning of the provisions of this chapter.
 (a) An insurance premium finance company is: (1) A person engaged, in whole or in part, in the business of acquiring premium finance agreements with insureds; or (2) A person engaged, in whole or in part, in the business of acquiring premium finance agreements from other premium finance companies. (b) Credit unions, banks, savings and loan associations, and other lending institutions or their federally chartered counterparts are exempt from the provisions of this chapter. (c) The inclusion of a charge for insurance on a bona fide sale of goods or services on installments is not subject to the provisions of this chapter.
 Premium finance agreement means a promissory note or other written agreement by which an insured promises or agrees to pay to, or to the order of, a premium finance company the amount advanced or to be advanced under the agreement to an insurer or to an insurance agent, in payment of premiums on an insurance contract, together with a service charge as authorized and limited by law.
 (a) No person shall engage in the business of a premium finance company unless licensed by the Commissioner of Insurance. Every premium finance company under the provisions of this chapter shall maintain at all times a net worth of $100,000. However, in lieu of having a net worth of $100,000, a premium finance company may file a surety bond or other acceptable collateral with the Commissioner in the amount of $100,000. (b) The application for a license shall be in writing and in the form prescribed by the Commissioner. Every applicant shall provide proof of a net worth of $100,000. Assets to be used in computing the required net worth shall be determined by rules adopted by the Commissioner. (c) A single license shall entitle the holder to operate more than one office. (d) At the time of filing an application for a license, the applicant shall pay to the Commissioner the license fee and, upon original application or upon application subsequent to denial of application, or revocation, suspension or surrender of a license, an investigation fee. (e) Such license shall state the name and address of the licensee, and a copy shall be kept conspicuously posted in each office of the licensee and shall not be transferable or assignable. (f) Prior to moving an existing office to another location, a licensee shall notify the Commissioner in writing of its intention to do so.
 No judgment creditor or other claimant of a premium finance company shall have the right to levy upon any of the assets or securities held in the Territory as a deposit under section 1623 of this title.
 (a) The Commissioner shall issue the license, unless he finds that the management of the premium finance company filing the application is so lacking in managerial experience as to make the proposed operation hazardous or injurious to the public or unless he has good reason to believe the management of the premium finance company is affiliated directly or indirectly through ownership, control, or in other business relations with any person whose business operations are or have been marked as detrimental to the public, to policy-holders, stockholders, investors, or creditors by manipulation of assets or of accounts or by bad faith. (b) If the Commissioner refuses to issue a license, he shall notify the applicant of the denial and return to the applicant the sum paid as a license fee, but shall retain the investigation fee to cover the costs of investigating the applicant. (c) Each license shall remain in force until December 31st of the year for which issued, unless earlier surrendered, suspended, or revoked, and may be renewed for the ensuing year upon the filing of an application. If an application for renewal is filed with the Commissioner before January 1 of any year, the license sought to be renewed shall be continued in force until the issuance by the Commissioner of the renewal license applied for, or until 5 days after the Commissioner refuses to renew the license. (d) The Commissioner shall not issue or renew a license to any premium finance company that fails to present, at the time of application for the license or renewal, an affidavit signed by an authorized officer of the Virgin Islands Bureau of Internal Revenue, affirming that the applicant has filed and paid, or has satisfactorily made agreement to pay, all outstanding taxes, penalties and interest.
 (a) The Commissioner may deny, suspend, revoke, or refuse to renew any license, if he finds: (1) That the licensee has failed to pay the annual license fee or any sum of money lawfully demanded under the authority of any other section of this chapter or has failed to comply with any order of the Commissioner. (2) That the licensee has violated any provision of this chapter or any rule or regulation of the Commissioner. (3) That any fact or condition exists which, if it had existed at the time of the original application, clearly would have warranted a refusal to issue the license. (4) Material misstatement, misrepresentation, or fraud in obtaining the license, or in attempting to obtain the license. (5) That the license is being willfully used, or is to be used, to circumvent any of the requirements or prohibitions of this title. (6) Willful misrepresentation of any premium finance contract or willful deception with regard to any such contract, accomplished either in person or by any form of dissemination of information. (7) A demonstrated lack of fitness or trustworthiness. (8) Fraudulent or dishonest practices in the conduct of business. (9) Misappropriation, conversion, or unlawful withholding of moneys belonging to insurers, insureds, or beneficiaries or to others and received in the conduct of business. (10) That the licensee has been found guilty of, or has pleaded guilty to a felony in the Territory or any other state. (b) A licensee may surrender a license by delivering to the Commissioner written notice that it thereby surrenders such license, but such surrender shall not affect the licensee's civil or criminal liability for acts committed prior to the surrender. (c) No revocation, suspension, or surrender of a license shall impair or affect the obligation of any insured under any lawful premium finance agreement previously acquired or held by the licensee. (d) Every license issued shall remain in force and effect until it has been surrendered, revoked, or suspended or expires in accordance with the provisions of this chapter, but the Commissioner shall have authority to reinstate a suspended license or to issue a new license to a licensee whose license has been revoked, if no fact or condition then exists which clearly would have warranted the Commissioner's refusal originally to issue such license under this chapter.
 The Commissioner may, in his discretion, in lieu of a suspension, revocation, or refusal to renew or continue any license, impose on the licensee an administrative penalty or place such licensee on probation.
 (a) The Commissioner may conduct examinations and investigations of premium finance companies under the provisions of chapter 5 of this title. (b) As often as it is deemed necessary and not less frequently than every three years, the Commissioner shall examine each licensed premium finance company. The examination shall be for the purpose of ascertaining compliance by the person examined with the applicable provisions of this title.
 Any person, premium finance company, or other legal entity who or which knowingly takes, receives, reserves, or charges a premium finance charge other than that authorized by this chapter shall forfeit the entire premium finance charge to which such person, premium finance company, or legal entity would otherwise be entitled; and any person who has paid such unlawful finance charge may personally or by his legal or personal representative, by suit for recovery thereof, recover from such person, premium finance company, or legal entity, twice the entire amount of the premium finance charge paid.
 (a) The licensee shall keep and use in his business such books, accounts, and records as will enable the Commissioner to determine whether the licensee is complying with the provisions of this chapter and with the regulations pertaining thereto. Every licensee shall preserve books, accounts, and records, including cards used in a card system, if any, for at least five years after making the final entry in respect to any premium finance agreement recorded; however, the preservation of photographic reproductions of records in photographic form shall constitute compliance with this requirement. (b) Each licensee shall annually, on or before March 1, file a report with the Commissioner giving such information as the Commissioner may require. The report shall be made under oath and in the form prescribed by the Commissioner and shall be accompanied by the annual report filing fee. The Commissioner may make and publish annually, an analysis and recapitulation of such reports. In addition, the Commissioner may require such additional regular or special reports as are deemed necessary.
 No premium finance company, officer, director, or employee shall offer to pay or allow in any manner to any person, either as inducement to the financing of any insurance policy with the premium finance company or after any such policy has been financed, any rebate, or shall give or offer to give any valuable consideration or inducement of any kind directly or indirectly, other than an article of merchandise not exceeding $1 in value which advertises the premium finance company.
 (a) No premium finance agreement form or related form shall be used in the territory by a premium finance company unless it has been filed with and approved by the Commissioner. Every filing shall be made within 30 days of issuance or use. (b) Each premium finance company shall file with the Commissioner the service charge and interest rate plan, including all modifications. Every filing shall be made within 30 days of its effective date. (c) Each filing shall be accompanied by the appropriate filing fee.
 (a) A premium finance agreement shall be in writing, dated, and signed by or on behalf of the insured and the printed portion shall be in at least 8-point type. (b) The premium finance agreement shall contain the entire agreement of the parties with respect to the insurance contract, the premiums for which are advanced or to be advanced under it, and: (1) At the top, the words PREMIUM FINANCE AGREEMENT in at least 10-point bold type; and (2) A notice in at least 8-point bold type, reading as follows: NOTICE: (1) Do not sign this agreement before you read it or if it contains any blank space. (2) You are entitled to a completely filled-in copy of this agreement. (3) Under the law, you have the right to pay off in advance the full amount due and under certain conditions to obtain a partial refund of the service charge. (c) A premium finance agreement shall: (1) Contain the name and place of business of the insurance agent negotiating the related insurance contract; the name and residence or place of business of the insured as specified by him; the name and place of the business of the premium finance company to which installment or other payments are to be made; a description of the insurance contract, the premiums for which are advanced or to be advanced under the agreement; and the amounts of the premiums for such insurance contract; and (2) Set forth the following items: (A) The total amount of the premiums; (B) The amount of the down payment; (C) The principal balance, which is the difference between the amounts of subparagraphs (A) and (B) of this paragraph; (D) The amount of the service charge; and (E) The balance, which is the sum of the amounts of subparagraphs (C) and (D) of this paragraph, payable by the insured; the number of installments required; the amount of each installment expressed in dollars; and the due date or period. The items need not be stated in the sequence or order set forth above; inapplicable items may be omitted; and additional items may be included to explain the computations made in determining the amount to be paid by the insured. (d) No premium finance agreement shall be signed by an insured when it contains any blank space to be filled in after it has been signed; however, if the insurance contract, the premiums for which are advanced or to be advanced under the agreement, has not been issued at the time of its signature by the insured and it so provides, the name of the authorized insurer by whom such insurance contract is issued, the policy number, and the due date of the first installment may be left blank and later inserted in the original of the agreement after it has been signed by the insured.
 (a) A premium finance company shall not charge, contract for, receive, or collect a service charge other than as permitted by this chapter. (b) A premium finance company may, in a premium finance agreement, contract for, charge, receive, and collect a service charge for financing the premiums under the agreement computed as provided in subsection (c) of this section. (c)  (1) The service charge provided for in this section shall be computed on the balance of the premiums due, after subtracting the down payment made by the insured in accordance with the premium finance agreement, from the effective date of the issuance of the insurance coverage for which the premiums are being advanced to and including the date when the final payment of the premium finance agreement is payable. (2) The service charge shall be a maximum of $15 per $100 per year plus an additional charge not exceeding $25, which additional charge need not be refunded upon prepayment. Such additional charge may be charged only once in a 12-month period for any one customer unless that customer's policy has been cancelled due to nonpayment within the immediately preceding 12-month period. However, any insured may prepay has premium finance agreement in full at any time before the due date of the final payment; and in such event the unearned service charge shall be refunded in accordance with the Rule of 78, or any other method at least as beneficial to the insured and approved by the Commissioner, and shall represent at least as great a proportion of the service charge, if any, as the sum of the periodic balances after the month in which prepayment is made bears to the sum of all periodic balances under the schedule of payments in the agreement. When the amount of the refund is less than $1, no refund need be made if the agreement so states. (3) Such service charge shall be inclusive of all charges incident to the premium finance agreement and for the extension of credit provided for therein. (4) Paragraphs (1) to (3) of this subsection apply if the premiums under only one insurance contract are advanced under a premium finance agreement; if premiums under more than one insurance contract are advanced or to be advanced under a premium finance agreement, the service charge shall be computed from the inception date of such insurance contracts, or from the due date of such premiums; however, not more than one minimum service charge shall apply to each premium finance agreement. (5) No insurance agent or premium finance company shall induce an insured to become obligated under more than one premium finance agreement for the purpose of obtaining more than one minimum service charge.
 No premium finance company shall, in a premium finance agreement, provide for the cost of: (1) A membership in an automobile club. The term automobile club means a legal entity which, in consideration of dues, assessments, or periodic payments of money, promises its members or subscribers to assist them in matters relating to the ownership, operation, use, or maintenance of a motor vehicle; however, this definition of automobile club does not include persons, associations, or corporations which are organized and operated solely for the purpose of conducting, sponsoring, or sanctioning motor vehicle races, exhibitions, or contests upon racetracks, or upon racecourses established and marked as such for the duration of such particular events. (2) An accidental death and dismemberment policy sold in combination with a personal injury protection only policy. The Commissioner shall promulgate rules to assure disclosure, at the time of sale, of coverages financed with personal injury protection.
 (a) A premium finance agreement may provide for the payment by the insured of a delinquency and collection charge on each installment in default for a period of not less than 5 days in an amount not to exceed $10 or 5 percent (5%) of the delinquent installment, whichever, is greater; provided that if the premium finance agreement is primarily for personal, family, or household purposes, the delinquency and collection charge shall not exceed $10. Only one such delinquency and collection charge may be collected on any such installment regardless of the period during which it remains in default. (b) A premium finance agreement may also provide for the payment of attorney's fees not exceeding 20 percent of the amount due and payable under the agreement if it is referred for collection to an attorney not a salaried employee of the premium finance company holding the agreement. (c) Notwithstanding the provisions of this section, a premium finance company shall not take, receive from, or charge an insured any cancellation charge or attorney's fees unless within 10 days after default in the payment of any installment of a premium finance agreement, the premium finance company has mailed a notice of the default to the insured at his address as shown on the agreement and to any insurance agent shown on the agreement and to any insurance agent named therein at his place of business, as shown, giving the insured at least 5 days within which to make the payment in default. (d) In the event that a payment is made to a premium finance company by check or draft and the instrument is returned because of insufficient funds to pay it, the premium finance company may, if the premium finance agreement so provides, impose a charge of $10.
 No premium finance agreement or contract ancillary thereto shall contain any provision by which: (1) In the absence of default of the insured, the premium finance company holding the agreement may, arbitrarily and without reasonable cause, accelerate the maturity of any part or all of the amount owing thereunder; (2) A power of attorney is given to confer any authority to perform any act other than to request cancellation for nonpayment of premium; or (3) The insured relieves the insurance agent or the premium finance company holding the agreement from liability for any legal rights or remedies which the insured may otherwise have against the agent or company.
 Before the due date of the first installment payable under a premium finance agreement, the premium finance company holding the agreement or the insurance agent shall deliver to the insured, or mail to him at his address as shown in the agreement, a copy thereof or, if the agreement contained any blank space when it was signed and such blank was subsequently filled in, in accordance with section 1633, subsection (c) of this title, a copy of the agreement as so filled in.
 (a) A premium finance company may purchase or otherwise acquire a premium finance agreement from another premium finance company with recourse against the other premium finance company on such terms and conditions as may be mutually agreed upon. (b) No filing of an assignment or notice to the insured shall be necessary as to the validity of the written assignment of a premium finance agreement as against creditors or subsequent purchasers, pledgees, or encumbrancers of the assignor. (c) Unless the insured has notice of an actual or intended assignment of a premium finance agreement, payment thereunder by him to the last known holder of the agreement shall be binding upon all subsequent holders or assignees.
 (a) At any time after the execution of a premium finance agreement, but not later than 1 year after the last payment, the premium finance company holding the premium finance agreement shall, upon written request of the insured, give or mail to him a written statement of the dates and amounts of payments and the total amount, if any, unpaid. A statement shall be supplied once each year without charge; if any additional statement is requested, the premium finance company shall supply the statement at a charge not exceeding $5 for each additional statement so supplied. An insured shall be given a receipt for payment when made in cash. (b) After the payment of all sums for which an insured is obligated under a premium finance agreement, and upon his written demand, the premium finance company holding the agreement shall deliver, or mail to the insured at his last known address, such one or more good and sufficient instruments as may be necessary to acknowledge payment in full and to release all interest in or rights to the insurance contracts, the premiums for which were advanced or are to be advanced under the agreement.
 A premium finance company may, upon agreement with the insured, extend the scheduled due date or defer the scheduled payment of all or any part of any installment or installments payable thereunder. The agreement for such extension or deferment must be in writing and signed by the parties. The premium finance company may charge and contract for the payment of an extension or deferral charge by the insured and collect and receive the same; but such charge may not exceed an amount equal to 1 percent (1%) per month simple interest on the amount of the installment or installments, or part thereof, extended or deferred for the period of extension or deferral or $1, whichever is the greater amount. The period shall not exceed the period from the date when the extended or deferred installment or installments, or part thereof, would have been payable in the absence of an extension or deferral, to the date when the installment or installments, or part thereof, are made payable under the agreement of extension or deferment.
 When a premium finance agreement contains a power of attorney or other authority enabling the premium finance company to cancel any insurance contract listed in the agreement, the insurance contract shall not be cancelled unless cancellation is in accordance with the following provisions: (1) Not less than 15 days written notice shall be mailed to each insured shown on the premium finance agreement of the intent of the premium finance company to cancel the insurance contract unless the defaulted installment payment is received within 15 days. (2) After expiration of such period, the premium finance company shall mail to the insurer a request for cancellation and the unpaid premium balance due under the premium finance agreement or contract, and shall mail a copy to the insured at his last known address as shown on the premium finance agreement. (3) Upon a receipt of a copy of the cancellation notice by the insurer or insurers, the insurance contract shall be cancelled with the same force and effect as if the notice of cancellation has been submitted by the insured himself, without requiring any further notice to the insured or the return of the insurance contract. (4) All statutory, regulatory, and contractual restrictions providing that the insured may not cancel his insurance contract unless he or the insurer first satisfies such restrictions by giving a prescribed notice to a governmental agency, the insurance carrier, a mortgagee, an individual, or a person designated to receive such notice for such governmental agency, insurance carrier, or individual shall apply when cancellation is effected under the provisions of this section. The insurer, in accordance with such prescribed notice when it is required to give such notice on behalf of itself or the insured, shall give notice to such governmental agency, person, mortgagee, or individual; and it shall determine and calculate the effective date of cancellation from the premium finance company. (5) Whenever an insurance contract is cancelled in accordance with this section, the insurer shall promptly return the unpaid balance due under the finance contract, up to the gross amount available upon the cancellation of the policy, to the premium finance company and any remaining unearned premium to the agent or the insured, or both, for the benefit of the insured or insureds.
 The Commissioner shall collect in advance the following fees:(1) Annual license   (A) Issuance$250.00  (B) Renewal200.00(2) Investigation of Applicant100.00(3) Filing of Annual Report25.00(4) Filing of Forms25.00
 (a) Ambulance service association or association means any person issuing ambulance service contracts as defined in this section, other than an authorized insurer. (b) Ambulance service contract or preened [sic] ambulance service contract means any contract or agreement whereby, for an agreed premium or specified consideration or indemnify the contract or agreement holder from any type of ambulance service on a preened [sic] basis. (c) Commissioner means the Commissioner of Insurance, his deputies, or the Division of Banking, Insurance and Financial Regulation, as appropriate. (d) Insurance code means the Virgin Islands Insurance Code. (e) Insurer means a corporation or association which is engaged as principal in the business of making contracts of insurance, but shall not include an insurance broker acting as a broker. (f) Sales representative means any person employed or otherwise retained by an insurer or ambulance service association for the purpose of selling or issuing ambulance service contracts.
 The Commissioner shall administer this Chapter; and to that end, may adopt, promulgate, and enforce regulations necessary and proper to effectuate any provisions of this chapter.
 (a) Except as provided in this chapter, ambulance service associations shall be exempt from all other provisions of the Virgin Islands Insurance Code. (b) Any rehabilitation, liquidation, conservation, or dissolution of an ambulance service association insurer shall be conducted under the supervision of the Commissioner. The Commissioner shall have all the powers with respect to rehabilitation, liquidation, conservation, or dissolution of an ambulance service association that are granted to the Commissioner under the provisions of chapter 51 of this title.
 (a) No person may receive, hold, control, or manage any funds tendered as payment on any ambulance service contract until such person has a subsisting certificate of authority issued by the Commissioner. The certificate of authority shall expire on December 31st succeeding its issuance; and annually thereafter, on or before December 31st, a renewal shall be issued under conditions herein set forth. (b) An insurer authorized to transact property or casualty insurance in the territory may transact an ambulance service contract business without qualification or authority subject to the applicable provisions of this chapter.
 (a) An application to the Commissioner for a certificate of authority shall be accompanied by: (1) The deposit required by section 1677 of this title; (2) The ambulance service contracts proposed to be written; (3) The name and address of the place of business of the person offering to write the ambulance contracts; (4) Evidence of compliance with section 1676 of this title; (5) Biographical information relating to the officers and directors of the association; and (6) Such other information as may be considered by the Commissioner in order to meet the obligations under this chapter. (b) Annually on or before March 31st, the ambulance service association shall file a statement of its financial condition, transactions, and affairs as of the preceding December 31st as certified by a certified public accountant or public actuary. The statement shall contain a certification that the ambulance service association has sufficient reserves available to perform obligations under its contracts. (c) An insurer required to file statements under chapter 9 of this title may include therein any statement of business written under this chapter rather than complying with the provisions of subsections (a) and (b) of this section. (d) The annual fee payable to the Commissioner for the issuance of a certificate of authority shall be $250 payable on initial application and $200 annually thereafter not later than December 31st of each year for renewal. (e) When the required information has been submitted and the Commissioner determines that the ambulance service association is in compliance with this chapter, the Commissioner shall issue a certificate of authority or renewal thereof.
 (a) Any person applying for a certificate of authority under section 1675 of this title shall possess unimpaired paid-in capital or paid-in capital stock, if a stock association, or unimpaired surplus, if a foreign mutual or foreign reciprocal association, or a net trust fund, if a business trust association, in an amount not less than $100,000 to be maintained in a financial institution within the Virgin Islands. (b) After issuance of a certificate of authority, an ambulance service association shall maintain unimpaired paid-in capital stock, if a stock association, or unimpaired surplus, if a foreign mutual or foreign reciprocal association, or a net trust fund, if a business trust association, in an amount not less than $75,000.
 (a) To assure the faithful performance of its obligation to its members or subscribers, every ambulance service association shall, prior to issuance of its certificate of authority by the Commissioner, deposit with the Commissioner, securities of the type eligible for deposit by insurers under chapter 9, section 207 of this title, and having a market value of not less than $25,000; provided, however, that the Commissioner in his discretion, and as often as he deems it necessary, may order the association to increase its deposit for the benefit of contract holders in the territory. Such deposit requirement shall be in addition to the capital funds requirement in section 1676 of this title. Whenever the market value of the securities deposited with the Commissioner is less than 95 percent of the amount required under this subsection, the association shall deposit additional securities or otherwise increase the deposit to the amount specified in this subsection. (b) In lieu of any deposit of securities required under subsection (a) of this section, the association may file with the Commissioner a surety bond in like amount. The bond shall be one issued by an authorized surety insurer, shall be for the same purpose as the deposit in lieu of which it is filed, and shall be subject to the approval of the Commissioner. The bond shall guarantee that the ambulance service association will faithfully and truly perform all the conditions of any ambulance service contract. No such bond shall be cancelled or shall be subject to cancellation unless at least 60 days' advance notice, in writing, is filed with the Commissioner. In the event that notice of termination of the bond is filed with the Commissioner, the ambulance service association insured thereunder shall, within 30 days of the filing of notice of termination, provide the Commissioner with a replacement bond meeting the requirements of this subsection or deposit additional securities as required under subsection (a). The cancellation of a bond does not relieve the obligation of the issuer of the bond for claims arising out of contracts issued prior to cancellation of the bond unless a replacement bond or securities are filed. In no event shall the issuer's liability under the bond exceed the face amount of the bond. If within 30 days of filing the notice of termination no replacement bond or additional security is provided, the Commissioner shall suspend the license of the association until the deposit requirements are satisfied. (c) The association shall, during its solvency, have the right to exchange or substitute other securities of like quality and value for securities so on deposit, to receive the interest and other income accruing on such securities and to inspect the deposit at all reasonable times. (d) The deposit or bond shall be maintained unimpaired as long as the association continues in business in the territory. Whenever the association ceases to do business in the territory and furnishes to the Commissioner satisfactory proof that it has discharged or otherwise adequately provided for all its obligations to its members or subscribers in the territory, the Commissioner shall release the deposited securities to the entitled parties, on presentation of the receipts of the Commissioner for such securities, or release any bond filed in lieu of such deposit.
 No judgment creditor or other claimant of an association shall have the right to levy upon any of the assets or securities held in the territory as a deposit under section 1677 of this title.
 (a) The Commissioner may, in his discretion, suspend, revoke, or refuse to renew the certificate of authority of any association if he finds that the association: (1) Has violated any lawful order, rule or regulation of this chapter. (2) Is in unsound financial condition so as to render its further transaction of business in the territory hazardous or injurious to the public. (3) Is using methods of practice in the conduct of its business so as to render its future transactions of business in the territory hazardous or injurious to the public. (4) Has refused to be examined or has refused to produce its accounts, records, and files for examination, or any of its officers have refused to give information with respect to its affairs or to perform any other legal obligation as to such examination, when required by the Commissioner. (5) Has failed to pay any final judgment rendered against it in the territory within 90 days after the judgment became final. (6) Has, without just cause, refused to provide service under its contracts or has, without just cause, compelled contract holders to employ attorneys to bring suit against the association to secure service. (7) Is affiliated with, and under the same general management or interlocking directorate or ownership as another ambulance service association which transacts direct contracts in the territory without having a license. (b) The Commissioner may, in his discretion, suspend the certificate of authority of any association as to which proceedings for receivership, rehabilitation, or other delinquency proceedings have been commenced in any state. (c) Nothing in this chapter shall exclude any association from the due process provisions of chapter 7 of Title 22, Virgin Islands Code. (d) A violation of this chapter by an insurer is grounds for suspension or revocation of the insurer's certificate of authority in the territory.
 (a) The Commissioner shall promptly give notice of the suspension or revocation of the certificate of authority of an association to its sales representatives in the territory of record in the office of the Commissioner. (b) In his discretion, the Commissioner may cause notice of any such revocation to be published in one or more newspapers of general circulation published in the territory. (c) Upon suspension or revocation of its certificate of authority, an association and its sales representative in their representative capacities shall not solicit or write any new contracts in the territory during the period of any such suspension or revocation, nor after such refusal to renew any business previously written.
 (a) The suspension of the certificate of authority of an association shall be for a period not to exceed one year, as specified by the Commissioner in the order of suspension. The Commissioner may subsequently shorten or rescind the order upon which the suspension is based. (b) During the period of suspension, the association shall file its annual statement and pay fees, licenses and taxes as required under this chapter as if the certificate of authority were continued in full force. (c) Upon expiration of the suspension period, if within such period the certificate of authority has not otherwise terminated, the certificate of authority of the association shall automatically be reinstated unless the Commissioner finds that the causes of the suspension have not been removed, or that the association is otherwise not in compliance with the requirements of this chapter. (d) Upon reinstatement of the certificate of authority of an association or insurer following suspension, the authority of its sales representatives in the territory to represent the association or insurer shall likewise be reinstated. The Commissioner shall promptly notify the association or insurer and its sales representatives in the territory of record in the office of the Commissioner of the reinstatement.
 (a) If the Commissioner finds that one or more grounds exist for the revocation or suspension of a certificate of authority issued under this chapter, the Commissioner may, in lieu of such suspension or revocation, impose a fine upon the insurer or association. (b) With respect to any nonwillful violation, such fine may not exceed $500 per violation. In no event may such fine exceed an aggregate amount of $2,500 for all nonwillful violations arising out of the same action. When an ambulance service association discovers a nonwillful violation, the association shall correct the violation and, if restitution is due, make restitution to all affected persons. Such restitution shall include interest at 12 percent (12%) per annum from either the date of the violation or the date of inception of the affected person's policy, at the option of the association. The restitution may be a credit against future premiums due, provided the interest accumulates until the premiums are due. If the amount of restitution due to any person is $50 or more, and the association wishes to credit it against future premiums, it shall notify such person that he may receive a check instead of a credit. If the credit is on a policy which is not renewed, the association shall pay the restitution to the person to whom it is due. (c) With respect to any knowing and willful violation of a lawful order, rule or regulation of the Commissioner or a provision of this chapter, the Commissioner may impose a fine upon the association in an amount not to exceed $5,000 for each such violation. In no event may such fine exceed an aggregate amount of $20,000 for all knowing and willful violations arising out of the same action. In addition to such fines, the association shall make restitution when due in accordance with the provisions of subsection (b) of this section. (d) The failure of an association to make restitution when due as required under this section constitutes a willful violation of this chapter. However, if a corporation in good faith is uncertain as to whether any restitution is due or as to the amount of such restitution, it shall promptly notify the Commissioner of the circumstances, and the failure to make restitution pending a determination thereof will not constitute a violation of this chapter.
 Every association and its representatives and employees shall be subject to the provisions of chapter 49 of this title.
 (a) No contract form nor related form may be issued or used in the territory unless it has been filed with and approved by the Commissioner. (b) Every such filing shall be made not less than 30 days in advance of issuance or use. At the expiration of 30 days from the date of filing, a form so filed shall be deemed approved unless prior thereto it has been affirmatively approved or disapproved by written order of the Commissioner. The Commissioner may extend, by not more than an additional 30 days, the period within which to affirmatively approve or disapprove any such form by giving notice of such extension before the expiration of the initial 30-day period. At the expiration of any such period as so extended and in the absence of prior affirmative approval or disapproval, any such form shall be deemed approved. (c) In addition, each association or insurer shall file with the Commissioner, the rate to be charged for each contract and the premium, including all modifications of rates and premiums, to be paid by the contract holder. Every filing shall state the proposed effective date of the rate to be charged. Such filing shall be made not fewer than 30 days prior to its effective date. No rate or modification of a rate or premium shall be used unless filed.
 (a) In addition to the taxes provided for in this chapter for associations, and license fees as provided in this title as to insurers, each such association and insurer shall, annually on or before March 31, file with the Commissioner, its annual statement, in a form as prescribed and furnished by the Commissioner, showing all premiums or assessments received by it from contract holders in the territory during the preceding year, and shall pay to the Government of the Virgin Islands through the Office of the Commissioner, a tax of four percent (4%) on the annual gross receipts from premiums or assessments transacted in the territory or covering risks resident, located or to be performed in the territory. (b) Premiums and assessments received by insurers and taxed under this section are not subject to any premium tax provided for in this title: Provided, That, penalties and interest charges for the underpayment of or failure to file taxes shall be assessed in the same manner and subject to the same terms and conditions set forth in chapter 25, section 604 of this title.
 Ambulance service associations shall be subject to periodic examination by the Commissioner in the same manner and subject to the same terms and conditions as apply to insurers under chapter 5 of this title.
 Ambulance service associations shall be subject to service of process in the same manner and subject to the same terms and conditions, and fees as apply to insurers under chapter 9, sections 218 and 219 of this title.
 Every association or insurer shall on forms prescribed by the Commissioner, register, on or before December 31st of each year, the name and business office address of each sales representative employed by it, and shall within 30 days after termination of the employment notify the Commissioner of such termination. Any sales representative employed subsequent to the December 31st filing date shall be registered with the Commissioner within 30 days after such employment. A fee of $20 shall be paid for each sales representative registered with the Commissioner. No employee or sales representative of an ambulance service association or insurer shall directly or indirectly solicit or negotiate insurance contracts, or hold themselves out in any manner to be an insurance agent or solicitor, unless so qualified and licensed under this title.
 The Commissioner shall deny, suspend, revoke, or refuse to renew the registration of any sales representative if it is found that, as to sales representatives, any one or more of the following grounds exist: (1) Material misstatement, misrepresentation, or fraud in registration. (2) Willful use of the registration to circumvent any of the requirements or prohibitions of this chapter. (3) Willful misrepresentation or willful deception with regard to any contract, done either in person, or by any form of dissemination of information or advertising. (4) Material misrepresentation to a contract holder or other interested party of the terms and coverage of a contract with the intent and for the purpose of effecting settlement of such claim on less favorable terms than those provided in and contemplated by the contract in the adjustment of claims arising out of any contract. (5) Demonstrated lack of fitness or trustworthiness to engage in the business of ambulance service contracts. (6) Demonstrated lack of adequate knowledge and technical competence to engage in the transactions authorized by the registration. (7) Fraudulent or dishonest practices in the conduct of business under the registration. (8) Misappropriation, conversion, or unlawful withholding of moneys received in the conduct of the business under registration and belonging to an association, insurer, or contract holder or to others. (9) Rebating, or attempting to rebate, or unlawfully dividing or offering to divide his commissions with another. (10) Willful failure to comply with, or willful violation of, any proper order, rule or regulation of the Commissioner, or willful violation of any provision of this chapter. (11) Being found guilty of, or pleading guilty or nolo contendere to, a felony which involves moral turpitude, without regard to whether a judgment of conviction has been entered.
 The Commissioner may, in his discretion, deny, suspend, revoke, or refuse to renew the registration of any sales representative if it is found that the sales representative has committed any of the following acts under circumstances for which such denial, suspension, revocation, or refusal is not mandatory under section 1689 of this title: (1) Any act which provides cause for which granting of the registration could have been refused had such clause then existed and been known to the Commissioner. (2) Violation of any provision of this chapter or of any other law applicable to the business of ambulance service contracts in the course of dealings under this registration. (3) Violation of any lawful order, rule, or regulation of the Commissioner. (4) Failure or refusal, upon demand, to pay over to any association or insurer he represents, or has represented, any money belonging to the association or insurer. (5) In the conduct of business under the registration, engaging in unfair methods of competition or in unfair or deceptive acts or practices, as such methods, acts, or practices are or may be defined in chapter 49 of this title, or has otherwise shown himself to be a source of injury or loss to the public or detrimental to the public interest. (6) Being found guilty of, or having pled guilty or nolo contendere to, a felony without regard to whether a judgment of conviction has been entered.
 (a) If any sales representative is convicted by a court of a violation of this chapter, the registration of such individual shall be deemed to be immediately revoked. (b) If after an investigation, or upon other evidence, the Commissioner has reason to believe that there may exist any one or more grounds, as such grounds are specified in sections 1689 and 1690 of this title, the Commissioner may suspend, revoke or refuse to renew or continue the registration of any sales representative. (c) Whenever it appears that any licensed insurance agent has violated the provisions of this chapter, the Commissioner may take such action as is authorized by this code for a violation of the code by an agent.
 (a) If the Commissioner finds that one or more grounds exist for the suspension of, revocation of, or refusal to renew or continue any registration issued under this chapter, the Commissioner may, in his discretion, in lieu of such suspension, revocation, or refusal, on a first offense and except when such suspension, revocation, or refusal is mandatory, impose upon the registrant an administrative penalty in an amount not to exceed $500, or, if the Commissioner has found willful misconduct or willful violation on the part of the registrant, an administrative fine not to exceed $1,000. The administrative penalty may, in the discretion of the Commissioner, be increased by an amount equal to any commissions received by or accruing to the credit of the registrant in connection with any transaction as to which the grounds for suspension, revocation, or refusal relate. (b) The Commissioner may allow the registrant a reasonable period, not to exceed 30 days, within which to pay to the Commissioner the amount of the penalty so imposed. If the registrant fails to pay the penalty in its entirety to the Commissioner within the period so allowed, the registration of the registrant shall stand suspended, revoked, or renewal or continuation refused, as the case may be, upon expiration of such period.
 All license fees, taxes on premiums and assessments, registration fees, and administrative fines and penalties collected under this chapter from associations shall be deposited to the Insurance Guaranty Fund of the Treasury of the Government of the Virgin Islands.
 Nothing in the Insurance Code or this chapter shall be deemed to authorize any ambulance service association to transact any business other than that of ambulance service contracts or to otherwise engage in any other type of insurance unless the association is authorized to do so under a certificate of authority issued by the Commissioner under the provisions of this title.
 No insurer or ambulance service association shall act as a fronting company for any unauthorized insurer or ambulance service association. A fronting company is an insurer or ambulance service association which by reinsurance or otherwise, generally transfers to one or more unauthorized insurers or ambulance service associations, the risk of loss under ambulance service contracts written by it in the territory.
 (a) No association shall permit any funeral director or undertaker, or any member of his immediate family, to directly or indirectly by association or incorporation act as the representative, adjuster, claim agent, special agent, sales representative, or agent for such association in soliciting, negotiating or effecting ambulance service contracts on any plan or of any nature issued by such associations or in collecting premiums from holders of any such contracts. (b) No association shall affix, or permit to be affixed, advertising matter of any kind or character of any funeral director or undertaker to any ambulance service contracts or circulate, or permit to be circulated, any such advertising matter with such contracts, or attempt in any manner or form to influence contract holders of the association to employ the services of any particular funeral director or undertaker. (c) No association shall maintain an office or place of business, or permit its agent to maintain an office or place of business, in the office, establishment, or place of business of any funeral director or undertaker in the territory.
 In addition to any applicable denial of, suspension of, revocation of, or refusal to renew any certificate of authority, any person who knowingly makes a false of otherwise fraudulent application for a certificate of authority or registration under this chapter, is guilty of a misdemeanor. Each instance of violation shall be considered a separate offense.
 All active investigatory records of the Commissioner made or received pursuant to this chapter, and any active examination records necessary to complete an active investigation, shall be confidential and shall not be subject to public inspection under the provisions of Title 3, chapter 881 of this code for so long as reasonably necessary to complete the investigation.
 The Legislature of the Virgin Islands believes that many residents of the Virgin Islands who are covered by a recognized health insurance plan are nevertheless prevented from enjoying the benefits of such a plan by the high up-front cost of obtaining healthcare, and the prospect of having to wait for a reimbursement of those costs. As a result, the Legislature has enacted this plan to require health care providers to look for payment first to health insurance carriers rather than the patients who are covered by such plans.
 (a) Commissioner means the Commissioner of Insurance. (b) Health care provider means a person, corporation, facility or institution who must be licensed by this territory to provide health care or professional medical services including but not limited to any physician, osteopath, hospital, dentist, registered or licensed practical nurse, optometrist, podiatrist, physical therapist, psychologist, chiropractor, par-medical personnel and emergency medical technician, pharmacist and laboratory technicians, or any health care facility, including but not limited to a medical center, hospital, clinic, health center and/or group practice that are licensed or certified under the Virgin Islands Code to provide treatment for injuries, diseases, pain or deformity of the human body. (c) Insurer means a corporation or association which is engaged as a principal in the business of making contracts of insurance, but shall not include an insurance broker acting as a broker. (d) Recognized health insurer means an insurer licensed to do business in the Virgin Islands that offers health insurance to the public. (e) Uncontested claim means a claim from a health care provider for services that are covered under a health insurance plan, is adequately documented and medically appropriate, and which charges reasonable fees for services rendered. (f) Preferred Provider Organization means a network of health care providers that has entered into a written agreement with an insurer to provide benefits under a health insurance plan issued under this chapter, and which shall provide reasonable access to such health care providers.
 (a) No health insurance plan, upon passage of this act, shall be issued, delivered or used unless it has been filed with and approved by the Commissioner. The health insurance for employees of the Government of the Virgin Islands and any group health insurance plan contracted by any semi-autonomous agency or instrumentality of the Government of the Virgin Islands, shall be immediately accepted by health care providers. The Commissioner shall issue interim rules and regulations to implement this section until final rules and regulations have been adopted. (b) Such filing, the approval or disapproval thereof, shall be in conformity with the provisions of section 810 of this title.
 (a) If a patient, at the time of requesting health care services, presents to the health care provider evidence of coverage by a recognized health insurer, then the health care provider shall apply the following procedure when requiring payment for any services rendered: (1) The health care provider may require payment at or before the time services are rendered of any deductibles and co-payments required by the patient's health insurance plan. (2) The health care provider shall file a claim with the insurer directly for any amounts in excess of the deductible and co-payment which the patient is responsible. (3) Notwithstanding the provisions of this section, if a patient has not met his deductible under the plan, the health care provider may require payment for service rendered in sums up to but not exceeding the amount of the remaining deductible if less than the service being provided, or the fee if less than the deductible. (b) The patient shall demonstrate current membership in a health insurance plan, and provide evidence that deductibles, if applicable, have been satisfied.
 (a) Any insurer providing health insurance coverage shall be required to process and pay any uncontested claim, within thirty (30) calendar days from the date of receiving the claim. (b) If there is a contested claim, the insurer shall, within the same thirty (30) day calendar period notify the health care provider of its decision not to reimburse that amount, which notice shall provide a clear and concise statement to the health care provider of all the reasons for the insurer's decision. (c) Any insurance payment which is not made within the thirty day period shall accrue interest at the rate of 10% or the prevailing prime rate applicable on the date of payment, pursuant to Title 11, section 951 of this Code, or whichever is greater, from the date the services were provided to the date of payment. (d) The health care provider shall be entitled to receive payment from the patient for any services rendered which are not reimbursable by the insurer within sixty days after service is rendered. (e) The Commissioner of Insurance may review any contested claim to determine whether (1) the services are covered under a health insurance plan, (2) the fees are reasonable for the services, and any other matter necessary to determine how the claim should be handled.
 (a) Each insurer providing coverage under a health insurance plan shall establish and maintain an accessible information service which health care providers may contact telephonically and electronically to ascertain immediately whether a patient, service or procedure is covered under the plan, and whether a patient has satisfied any deductible amounts under the plan. The health care provider may utilize this service in the event that the patient is unable to demonstrate satisfaction of deductible amounts. (b) Each insurer providing coverage under a recognized health care plan shall provide each person covered by their plan a written explanation of benefits, which a patient may also use to demonstrate the satisfaction of any deductible amounts. (c) Within sixty (60) days of the execution of a contract between the insurer and the employer or within sixty (60) days of the individuals enrollment in a recognized health care plan, each enrollee shall be provided with a benefit booklet or package outlining all benefits under the insurance plan.
 (a) Any health care provider or recognized health insurer who willfully violate the provisions of this chapter shall be subject to the following penalties: (1) A health care provider or recognized health insurer who intentionally or negligently fails to comply with the provisions of this chapter shall be fined by the Commissioner not less than 100% of the disputed amount nor more than five thousand dollars ($5,000.00) for each violation. (2) The Commissioner shall forward to the appropriate governing board the name of any health care provider who has been cited by the Commissioner for a second violation of this chapter. Upon referral the governing board may suspend the license of the health care provider for a violation of this chapter. (b) Any insurer that fails to comply with the provisions of this chapter shall be subjected to the penalty set forth in subsection (a) above for each violation and may be subject to the provisions of section 212 of this title.
 (a) Notwithstanding the provisions of this chapter, any physician who is a member of a Preferred Provider Organization (PPO) which meets, the requirements set forth below, shall not be subject to the requirements of section 1724 of this title: (1) The PPO physician shall require no more than a reasonable co- payment by the patient at the time the services are rendered, which co-payment shall not exceed co-payments generally required under other health insurance plans; (2) The PPO shall require the health care provider to file claims with the insurer for payment and shall prohibit the practice of billing the patient directly for any covered services or for any costs in excess of the schedule of fees agreed upon and paid by the insurer; (3) The PPO shall cancel the membership of any individual health care provider who fails to adhere to any of the requirements of this section or any reasonable rules and regulations of the PPO which are not in conflict herewith; (4) The PPO shall include within its network no less than 25% of the health care providers in each of the St. Thomas-St. John and the St. Croix districts, representing the major medical specialties; (5) The PPO shall be available to any insurers offering health insurance plans. (b) Any insurer offering a recognized health insurance plan in the Virgin Islands shall offer as part of its plan access to a PPO which meets the requirements of subsection (a).
 As used in this subchapter: (a) Applied behavior analysis means the design, implementation and evaluation of environmental modifications, using behavioral stimuli and consequences, including the use of direct observation, measurement and functional analysis of the relationship between environment and behavior, to produce socially significant improvement in human behavior. (b) Autism services provider means any person, entity or group that provides treatment for autism spectrum disorders pursuant to this section. (c) Autism spectrum disorders means the pervasive developmental disorders set forth in the most recent edition of the American Psychiatric Associations Diagnostic and Statistical Manual of Mental Disorders, including, but not limited to, Autistic Disorder, Retts Disorder, Childhood Disintegrative Disorder, Aspergers Disorder and Pervasive Developmental Disorder Not Otherwise Specified. (d) Behavioral therapy means any interactive behavioral therapies derived from evidence-based research, including, but not limited to, applied behavior analysis, cognitive behavioral therapy, or other therapies supported by empirical evidence of the effective treatment of individuals diagnosed with an autism spectrum disorder, that are: (A) Provided to children younger than twenty-six years of age, (B) Provided or supervised by: (i) a behavior analyst who is certified by the Behavior Analyst Certification Board, (ii) a licensed physician, or (iii) a licensed psychologist. (C) For the purposes of subparagraph (B), behavioral therapy supervised by a behaviour analyst means supervised by a behavior analyst, licensed physician or licensed psychologist when the supervision entails at least one hour of face-to-face supervision of the autism services provider by such behavior analyst, licensed physician or licensed psychologist for each ten hours of behavioral therapy provided by the supervised provider. (e) Diagnosis means the medically necessary assessment, evaluation or testing performed by a licensed physician, licensed psychologist or licensed clinical social worker to determine if an individual has an autism spectrum disorder. (f) Evidence-based treatment means treatment subject to research that applies rigorous, systematic, and objective procedures to obtain valid knowledge relevant to autism spectrum disorders. (g) Medically necessary means reasonably expected to do the following: (A) Prevent the onset of an illness, condition, injury, or disability; (B) Reduce or ameliorate the physical, mental, or developmental effects of an illness, condition, injury, or disability; or (C) Assist to achieve or maintain maximum functional capacity in performing daily activities, taking into account both the functional capacity of the individual and the functional capacities that are appropriate for individuals of the same age.
 (a) After the effective date of this subchapter, a health care insurer that offers, issues for delivery, delivers, executes, adjusts, uses, or renews a health care insurance plan shall provide coverage for the costs of the diagnosis and treatment of autism spectrum disorders that are medically necessary and evidence-based. (b) Coverage required in health care insurance plans by this section must include treatment prescribed, identified and ordered by a licensed physician, psychologist, or a licensed clinical social worker for an insured who is diagnosed with an autism spectrum disorder in accordance with a treatment plan developed by licensed physician, licensed psychologist or licensed clinical social worker pursuant to a comprehensive evaluation or re-evaluation of the insured. (c) Covered treatment must include: (1) Behavioral therapy, including applied behavioural analysis in the school, home, community, and office settings; (2) Direct psychiatric or consultative services provided by a licensed psychiatrist; (3) Direct psychological or consultative services provided by a licensed psychologist; (4) Physical therapy provided by a licensed physical therapist in the school, home, community, and office; (5) Speech and language pathology services provided by a licensed speech and language pathologist; (6) Occupational therapy provided by a licensed occupational therapist in the school, home, community, and office; (7) Prescription drugs, to the extent prescription drugs are a covered benefit for other diseases and conditions under such policy, prescribed by a licensed physician, licensed physician assistant or advanced practice registered nurse for the treatment of symptoms and comorbidities of autism spectrum disorders; and (8) Equipment determined necessary to provide evidence-based treatment.
 A healthcare insurance plan must not impose: (1) any limits on the number of visits an insured may make to an autism services provider pursuant to a treatment plan on any basis other than a lack of medical necessity, or (2) a coinsurance, copayment, deductible or other out-of-pocket expense for such coverage which places a greater financial burden on an insured for access to the diagnosis and treatment of an autism spectrum disorder than for the diagnosis and treatment of any other medical, surgical or physical health condition under the policy.
 (a) The insurer may limit the coverage in the insurance health care plan for behavioral therapy to a yearly benefit of $50,000 for a child who is younger than nine years of age, $35,000 for a child who is at least nine years of age but younger than thirteen years of age and $25,000 for a child who is at least thirteen years of age but younger than twenty-six years of age. (b) Except for treatments and services received by an insured in an inpatient setting, an insure health care center, hospital service corporation, medical service corporation or fraternal benefit society may review a treatment plan developed under section 1732(b) for an insured, in accordance with its utilization review requirements, not more than once every six months unless the insureds licensed physician, licensed psychologist or licensed clinical social worker agrees that a more frequent review is necessary or changes such insureds treatment plan. (c) For the purposes of this section, the results of a diagnosis are valid for a period of not less than twelve months, unless the insureds licensed physician, licensed psychologist or licensed clinical social worker determines a shorter period is appropriate or changes the results of such insureds diagnosis.
 (a) This subchapter does not limit benefits that are otherwise available to an individual under a health benefit plan. (b) Nothing in this subchapter relieves an insurer from an otherwise valid obligation to provide or to pay for services provided to an individual with a disability.
 For the purposes of this subchapter the term, (1) Children means persons under the under eighteen years of age, or under twenty-one years of age if still attending high school. (2) Hearing aid means durable medical equipment that is of a design and circuitry to compensate for impaired human hearing and optimize audibility and listening skills in the environment commonly experienced by children.
 (a) An individual or group health insurance policy, health care plan or certificate of health insurance that is delivered, issued for delivery or renewed in the Virgin Islands must provide coverage for a hearing aid and any related services for the full cost of one hearing aid per hearing-impaired ear up to $2,200 per ear, every thirty-six months for hearing aids for insured children. (b) The insured may choose a higher priced hearing aid and may pay the difference in cost above the $2,200 limit, as provided in this subsection without financial or contractual penalty to the insured or to the provider of the hearing aid.
 (a) An insurer that delivers, issues for delivery or renews in the Virgin Islands an individual or group health insurance policy, health care plan or certificate of health insurance may make available to the policyholder the option of purchasing additional hearing aid coverage that exceeds the services described in this section. (b) Hearing aid coverage offered must include: the hearing aid evaluation; hearing aid selection; fitting and dispensing services; programming; repairs and modification; auditory training; and ear molds, as necessary to maintain optimal fit provided by a Certified Audiologist licensed in the Virgin Islands.
 Coverage for hearing aids may be subject to deductibles and coinsurance consistent with those imposed on other benefits under the same policy, plan or certificate.
 This subchapter does not apply to short-term travel, accident-only or limited or specified disease policies.
 As used in this subchapter the term (a) Telemedicine means the use of medical information exchanged from one distant site to another via electronic communications to improve, maintain, or assist patients health status. Videoconferencing, transmission of still images, and e-health including patient centers are all considered part of telemedicine and telehealth. (b) Telemedicine services means specialist referral services, patient consultations, remote patient monitoring, medical education, and consumer medical and health information, that are performed as part of a telemedicine procedure.
 A health care insurer that offers, issues for delivery, delivers, executes, adjusts, uses, or renews a health care insurance plan shall provide coverage for the costs of telemedicine services and treatment that arc medically necessary.
 (a) As used in this chapter, unless the context requires otherwise: (1) Actuary means a person qualified as an actuary by examination of the Institute of Actuaries in England or the Faculty of Actuaries in Scotland Casualty Actuarial Society, or the Society of Actuaries in the United States of American or Canada. (2) Advisory board means an ad hoc board of five members appointed by and with full discretion of the SAM, possessing knowledge of technical and complex issues that arise in the asset securitization and, insurance securitization business, which the SAM may use in evaluating the request to form or change the business plan of an applicant or licensed company. (3) Affiliated company means a company in the same corporate system as a parent, an industrial insured, or a member organization by virtue of common ownership, control, operation, or management. (4) Affiliated person means an individual or an entity that is related to a parent or owner of an entity by virtue of being: a spouse, father, mother, child, brother or sister of such individual person; or the owner, parent or affiliated company, with respect to any such person which is an entity. (5) Alternative Market includes any market involving a SPFC or any other securitization entity, including without limitation a Trust. (6) Alternative market insurer means a company that may insure or reinsure the risks of parents, owners, affiliates, and related business, provided the insurance or reinsurance that it writes complies with the laws and regulations of the United States domicile for direct placement of risk, and may directly insure the members of an association which owns the alternative market insurer. (7) Auditor means an individual who sits and successfully passes a financial examination and is inducted into financial charters and societies and has earned the designation as a certified public accountant or similarly recognized definition in various countries and possesses such qualifications in insurance accountancy as the SAM, by written order, approves, and is in good standing with respect to such qualifications. (8) Broker means an individual who places insurance risks with insurers and international reinsurers. (9) Consolidated debt to total capital ratio means the ratio of the sum of: (A) all debts and hybrid capital instruments including, all borrowings from banks, all senior debt, all subordinated debts, all trust preferred shares, and all other hybrid capital instruments that are not included in the determination of consolidated GAAP net worth issued and outstanding. (B) total capital, consisting of all debts and hybrid capital instruments as described in paragraph (A) plus owners' equity determined in accordance with GAAP for reporting to the United States Securities and Exchange Commission. (10) Consolidated GAAP net worth means the consolidated owners' equity determined in accordance with GAAP for reporting to the United States Securities and Exchange Commission. (11) Department means the Office of the Lieutenant Governor, Division of Banking, Insurance and Financial Regulation. (12) GAAP means generally accepted accounting principles. (13) Management means the board of directors, managing board, manager or other individual or individuals vested with overall responsibility for the management of the affairs of the Special Purpose Vehicle and the SPFC, including the election and appointment of officers or other of those agents to act on behalf of the Special Purpose Vehicle and the SPFC. (14) Marketer means an individual appointed by the SAM who identifies potential companies, develops the market, and is involved in all aspects of marketing Advanced Markets. (15) NAIC means National Association of Insurance Commissioners. (16) Owner of an entity means a person or entity holding title to any portion of the shares, partnership interests, membership interests or other securities of an entity. (17) Parent means any corporation, limited liability company, partnership, other entity or individual that directly or indirectly owns, controls, or holds with power to vote more than fifty percent of the outstanding voting interests of a Securitization Entity or an SPFC captive insurance company or group captive insurance company. (18) Principal office means the chief place of business required to be maintained within the Territory by every entity manager licensed under this chapter and at which the entities or manager's books and records which are prescribed by this chapter are kept permanently. The office of the Qualified Manager will constitute the principal office of business. (19) Protected cell means a separate account established and maintained by a protected cell insurance company for one or more participants. (20) Protected cell insurance company means a company that has been approved by the SAM to maintain segregated accounts and to segregate each participant's assets, liabilities, and activities from each other and whose owner meets appropriate capital and surplus requires appropriate C & S and reinsurance from each participant. (21) Qualified Manager means an entity formed in the Territory that is owned at least 51 percent by residents of the Territory who possess sufficient experience in the businesses of SPFC transactions, insurance transactions, or other relevant experience as determined by the SAM. (A) All transactions will be managed by a Qualified Manager. (B) The officers and employees of the Qualified Manager will not be held personally responsible for actions of the management of the asset securitizations and/or insurance securitizations. (22) Regulations means the regulations promulgated by the SAM pursuant to authority established by this chapter. (23) SAM means the Superintendent of Alternative Markets or the Superintendent's designee. The Director of the Division of Banking, Insurance and Financial Regulation will serve as the Acting SAM until the SAM position is filled and at any times when the SAM position is otherwise vacant. (24) Securitization Entity means any entity including without limitation a Trust or an SPFC, formed under or pursuant to the laws of the Territory, that purchases portfolios of assets and that uses debt obligations, equity, surplus certificates, surplus notes, funding agreements, derivatives, and other legal forms of financial instruments to transact business. (25) Segregated account means a separate account established and maintained by a protected cell captive insurer: (A) in which the minimum capital and surplus required under this chapter is provided by one or more persons or entities; (B) that is formed and licensed under this chapter; (C) that insures risks of separate participants by contract; (D) with respect to which one or more of the participants are authorized to act on matters relating to the segregated account; and (E) that limits each participant's losses through one or more segregated accounts. (26) Special purpose financial captive insurance company or SPFC means a captive insurance company that is formed or licensed under this chapter which does not meet the definition of any other type of captive insurance company as defined in Chapter 54, sections 1314(3) or (9) of this title. (27) Special Purpose Vehicle (SPV) or Special Purpose Entity (SPE) means either a trust or a company that is used to house an asset risk either through the purchase of the assets or in synthetic form. (28) Superintendent of Alternative Markets or the SAM) means the Superintendent of the Division of Alternative Markets and International Reinsurance Section of the Office of the Commissioner of Insurance. (29) Territory means the Territory of the Virgin Islands. (30) Treasury rates means the United States Treasury strips asked yield as published in the Wall Street Journal as of a balance sheet date. (31) Trust means a statutory trust as set up pursuant to the Virgin Islands Statutory Trust Entity Act.
 There is established within the Office of the Commissioner of Insurance the Division of Alternative Markets and International Reinsurance. The Commissioner of Insurance, with the advice and consent of the Governor, shall appoint the SAM and determine the SAM's compensation, and the SAM shall report to the Commissioner of Insurance.
 (a) The SAM may: (1) generally supervise the alternative market business being carried on in or from the Territory; (2) ensure compliance with and enforcement of the laws and regulations relating to the conduct of the alternative market businesses; (3) examine and prepare reports pursuant to section 6604 of this title from time to time on all matters connected with the alternative market; (4) summon or subpoena persons to attend a hearing or to testify as a witness, to enforce attendance, and to compel production of books and evidence relevant to an inquiry necessary or appropriate under this chapter; (5) require examination of witnesses under oath, and to administer oaths; (6) at all reasonable times have access to and may take copies of all the books, securities, records, and documents of any SPFC, Securitization Entity, manager, agent, adjuster or broker which relate to the alternative market business and any officer, agent or person in charge, possession, custody or control of any of those books, securities, records or documents and to issue fines against any person or entity who refuses or neglects to afford such access; (7) make an inquiry to any Securitization Entity or its manager relating to the conduct of its business or its financial affairs and to require such Securitization Entity or manager to make prompt and explicit answers and to issue fines against any person or entity which fails or refuses to provide such information and to suspend the license of the person or entity; (8) issue licenses to Securitization Entities and Managers in accordance with this chapter; and (9) appoint an advisory board to review all applications for licenses which may be issued under this chapter. (b) The SAM, or any of the SAM's employees, must not be directly or indirectly: (1) a shareholder, member, manager or partner in any company or business entity that is licensed under this chapter; or (2) a shareholder, member, manager or partner in a company or business entity that is authorized under this chapter to act as a manager, agent or broker. (c) The SAM or any of the SAM's employees who has a conflict of interest as defined in subsection (b) of this section shall recuse himself from addressing any such matter before the Office of the Commissioner of Insurance, Division of Alternative Markets and International Reinsurance.
 The SAM shall keep the following registers: (a) A register of all licenses issued to Securitization Entities under this chapter, in which must appear: (1) the name of the Securitization Entity; (2) the address of the Securitization Entity's principal office within the Territory; the Qualified Manager's office may serve as the principal office of the Securitization Entity; (3) the details of the Securitization Entity business; and (4) any and all other information the SAM may consider necessary or appropriate to keep for purposes of this chapter. (b) A register of all licenses issued under this chapter to managers, intermediaries, brokers and agents, in which must appear the names and addresses of the Securitization Entities for whom they are authorized to act; (c) A register of the names and addresses of all directors and officers of every Securitization Entity licensed under this chapter; and (d) A register of all actuaries approved by the SAM to provide actuarial services under this chapter.
 (a) Except as provided in paragraphs (1) and (2) of this subsection, information submitted pursuant to the provisions of this chapter is confidential and may not be made public by the SAM or an agent or employee of the SAM, without the written consent of the entity, except that: (1) information may be discoverable by a party in a civil action or contested case to which the submitting Securitization Entity or SPFC is a party, upon a showing by the party seeking to discover the information that: (A) the information sought is relevant to and necessary for the furtherance of the action or case; (B) the information sought is unavailable from other nonconfidential sources or (C) a subpoena issued by a judicial or administrative law officer of competent jurisdiction has been submitted to the SAM; and (2) the SAM may disclose the information to the public officer having jurisdiction over asset securitization and insurance securitization in a state or territory if: (A) the public official agrees in writing to maintain the confidentiality of the information; and (B) the laws of the state or territory in which the public official serves do not require the information to be confidential. (b) The SAM shall post on a website and maintain on line: (1) a list of all current regulations related to the alternative market; (2) a current list of all licensed Securitization Entities and managers, along with their principal place of business in the Territory; and (3) a current list of all licensed actuaries, auditors, insurance managers and intermediaries, and their principal place of business in the Territory.
 (a) There is established in the Treasury of the Virgin Islands a special account known as the Alternative Market Revolving Fund for providing the financial means for the SAM to administer this chapter and for reasonable expenses incurred in promoting the asset securitization and insurance securitization industries in the Territory. (b) The Fund consists of all fees, fines and other sums collected by the SAM under this chapter as well as sums appropriated to it from time to time from the Legislature. All funds deposited in the Fund remain available until expended. The SAM, the Commissioner of Insurance and the Commissioner of Insurance's designee are the certifying officers for expenditures under the Fund. (c) The SAM shall have deposited into the Alternative Market Revolving Fund: (1) all application fees, license fees, renewal fees, assessments and taxes collected by the SAM under this chapter; and (2) all administrative penalties and fines; (d) All payments from the Fund for the hiring, training, maintenance of staff and associated expenses, including contractual services as necessary, may be disbursed from the Treasury only upon requests issued by the SAM, after receipt of proper documentation regarding services rendered and expenses incurred or to be incurred. (e) The interest on the monies on deposit in the Fund must also be deposited into the Fund until the balance in the fund exceeds $10,000,000. Whenever the balance in the Fund exceeds $10,000,000, the dollar amount of the balance above $10,000,000 must be deposited into the General Fund.
 (a) The following initial license application fees and initial annual license fees, subject to regulation and with full discretion of the SAM, must be charged by and collected by the SAM and deposited in the Alternative Market Revolving Fund: (1) Annual License Fees: (A) Qualified Manager: 5% of net revenue (gross revenues less expenses). (B) A complete list of fees will be posted on the website of the SAM. (b) The SAM by regulation may set and alter reasonable fees, pursuant to the notice requirements of title 3 Virgin Islands Code, chapter 35.
 (a) The Qualified Manager, intermediary, broker, actuary or auditor when permitted by its articles of incorporation, articles of organization, operating agreement, or charter, may apply to the SAM for a license to do all alternative business. (b) To conduct asset securitization and insurance securitization business in this Territory, the Qualified Manager, intermediary broker, actuary and auditor shall: (1) obtain from the SAM a license authorizing it to conduct business in this Territory; (2) hold at least one board of directors meeting, or in the case of a limited liability company a meeting of the managing board, each year in this Territory; (3) maintain its principal place of business in this Territory, including books and records; and (4) appoint a resident agent to accept service of process and to otherwise act on its behalf in this Territory. (c) Before receiving a license the Qualified Manager, intermediary, broker, actuary, or auditor: (1) if formed as a corporation or a nonprofit corporation, shall: file with the SAM a certified copy of its articles of incorporation and bylaws, a statement under oath of its treasurer or other authorized officer showing its financial condition, and any other statements or documents required by the SAM; or (2) if formed as a limited liability company, shall file with the SAM a certified copy of its articles of organization and operating agreement, a statement under oath by its managers showing its financial condition, and any other statements or documents required by the SAM.
 (a) It is a condition of every license issued under this chapter, breach of which renders the license subject to cancellation by the SAM, that: (1) The Qualified Manager, intermediary, broker, actuary and auditor must be aware of the content of each license application and business plan submitted with the license application, shall monitor for material changes in information submitted with the license application and the changes in the officers of the licensees' business organization and shall immediately notify SAM of: (A) any material change in the information supplied in or accompanying the application or in the documents submitted with the application of which the licensee is aware; or (B) the removal from office or the resignation of any director, officer partner or member of the licensee, and the reason for the removal or resignation from office of which the licensee was aware. (2) No shares or other interest, whether legal or equitable, in the licensee may be issued, transferred or otherwise disposed of and no appointment of a director, officer, partner or member may be made without the prior written consent of the SAM. (3) The licensee may not without the prior written consent of the SAM: (A) enter into any merger, amalgamation, consolidation or reorganization; (B) transfer, other than in the ordinary course of business by way of reinsurance any of its contracts of insurance or the whole or any part of its property, assets or liabilities; (C) charge or pledge the whole or any part of its assets; (D) change its name from that set out in its license; or (E) alter the terms of its articles of incorporation, articles of organization or other instrument of incorporation or formation. (b) With every application for a license under this chapter, the applicant shall file with the SAM a business plan. The SAM may rely upon the business plan as a condition of issuing a license. (c) The SAM may approve or deny the requested change to the business plan in its discretion. (d) All licensed managers shall report to the SAM any and all actual and proposed changes to the business plan of a Securitization Entity.
 The Qualified Manager intermediary, broker, auditor, actuary or any other entity that may be licensed under this chapter may not adopt a name that is the same as, deceptively similar to, or likely to be confused with or mistaken for any other existing business name registered in this Territory or in the state or country in which it will conduct business.
 (a) A corporation or other entity may declare and pay dividends or make other distributions in cash or its bonds or its property, including the shares or bonds of other corporations, on its outstanding shares, except when the corporation is insolvent or would thereby be made insolvent, or when the declaration, payment or distribution would be contrary to any restrictions contained in the certificate of incorporation or organizational document. (b) Dividends may be declared or paid and other distributions may be made out of surplus only, so that the net assets of the corporation or entity remaining after such declaration, payment or distribution at least equal the amount of its stated capital. (c) Directors of a corporation or managers of an LLC who vote for or concur in any of the following corporate actions are jointly and severally liable to the corporation or LLC for the benefit of its creditors, shareholders or members, to the extent of any injury suffered by such persons, respectively, as a result of such action: (1) The declaration of any dividend or other distribution to the extent that it is contrary to the provisions of subsections (a) and (b) of this section; and (2) The distribution of assets to shareholders or members after dissolution of the corporation or LLC without paying or adequately providing for all known liabilities of the corporation or LLC, excluding any claims not filed by creditors within the time limit set in a notice given to creditors.
 (a) The license of the Qualified Manager, intermediary broker, actuary and auditor to conduct a business in this Territory may be suspended or revoked by the SAM for: (1) insolvency or impairment of capital or surplus; (2) refusal or failure to submit an annual report, or any other report or statement required by law or by lawful order of the SAM; (3) failure to comply with its own charter, bylaws, or other organizational documents; (4) failure to submit to examination or any legal obligation relative to an examination; (5) refusal or failure to pay the cost of examination or fees; (6) use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public or to its policyholders; or (7) failure otherwise to comply with laws of this Territory.
 The SAM may promulgate and from time to time amend rules and regulations, and issue such orders relating to Securitization Entities or SPFCs as are necessary to enable the SAM to carry out the provisions of this chapter.
 (a) One or more entities may form a protected cell insurance company under this chapter. (b) A protected cell insurance company formed or licensed under this chapter may establish and maintain one or more protected cells to insure risks of one or more participants, subject to the following conditions: (1) each protected cell must be accounted for separately on the books and records of the captive insurance company established pursuant to Chapter 54 of this title or each Securitization Entity or SPFC established pursuant to this chapter 66 to reflect the financial condition and results of operations of the protected cell, net income or loss, dividends or other distributions to participants, and other factors may be provided in the participant contract or required by the SAM; (2) the assets of a protected cell must not be chargeable with liabilities arising out of any other insurance business the sponsored captive insurance company, established pursuant to Chapter 54 of this Title or each Securitization Entity or SPFC established pursuant to this Chapter 66, may conduct; (3) no sale, exchange, or other transfer of assets may be made by the captive insurance company established pursuant to Chapter 54 of this title or each Securitization Entity or SPFC established pursuant to this chapter 66 between or among any of its protected cells without the consent of the protected cells; (4) no sale, exchange, transfer of assets, dividend, or distribution may be made from a protected cell or participant without the SAM's approval and in no event may the approval be given if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell; (5) a protected cell insurance company annually shall file with the SAM such financial reports as the SAM requires which includes, but are not limited to, accounting statements detailing the financial experience of each protected cell; (6) a protected cell insurance company shall notify the SAM in writing within ten business days of a protected cell that is insolvent or otherwise unable to meet its claim or expense obligations; and (7) no participant contract may take effect without the SAM's prior written approval, and the addition of each new protected cell and withdrawal of any participant of any existing protected cell constitutes a change in the business plan requiring the SAM's prior written approval.
 (a) An association, a corporation, a limited liability company, a partnership, a trust, or other business entity may be a participant in a protected cell insurance company formed or licensed pursuant to this chapter. (b) The owner may be a participant in a protected cell insurance company. (c) A participant need not be a shareholder of the protected cell insurance company or an affiliate of the company.
 In the case of a protected cell insurance company: (a) a protected cell need not be established solely for the purpose of effecting insurance securitizations, but may be established for the purpose of isolating the expenses and claims of a protected cell insurance company participant; and (b) the protected cell insurance company shall attribute all insurance obligations, assets, and liabilities relating to a participant's risks to the participant's protected cell.
 Each Securitization Entity must be taxed in the same manner as an SPFC pursuant to section 6670(c), (d), (e) and (f) of Subchapter III of this chapter.
 This subchapter may be cited as the Asset-Backed Securities Facilitation Act.
 It is intended by the Legislature that the term securitization transaction must be construed broadly.
 (a) Notwithstanding any other provision of law, to the extent set forth in the transaction documents relating to a securitization transaction, including a transaction entered into pursuant to subchapter II of this chapter: (1) Any property, assets or rights purported to be transferred, in whole or in part, in the securitization transaction are deemed to no longer be the property, assets or rights of the transferor; (2) A transferor in the securitization transaction, its creditors or, in any insolvency proceeding with respect to the transferor or the transferor's property, a bankruptcy trustee, receiver, debtor, debtor in possession or similar person, to the extent the issue is governed by Virgin Islands law, has no rights, legal or equitable, whatsoever to reacquire, reclaim, recover, repudiate, disaffirm, redeem or re-characterize as property of the transferor any property, assets or rights purported to be transferred, in whole or in part, by the transferor; and (3) In the event of a bankruptcy, receivership or other insolvency proceeding with respect to the transferor or the transferor's property, to the extent the issue is governed by Virgin Islands law, such property, assets and rights may not be deemed to be part of the transferor's property, assets, rights or estate. (b) Nothing contained in this subchapter may be deemed to require any securitization transaction to be treated as a sale for federal or Virgin Islands tax purposes or to preclude the treatment of any securitization transaction as debt for federal or Virgin Islands tax purposes or to change any applicable laws relating to the perfection and priority of security or ownership interests of persons other than the transferor, hypothetical lien creditor or, in the event of a bankruptcy, receivership or other insolvency proceeding with respect to the transferor or its property, a bankruptcy trustee, receiver, debtor, debtor in possession or similar person. (c) It is not the purpose of this subchapter to change the tax treatment of securitizations that take place pursuant to this subchapter.
 This subchapter provides for the creation of Special Purpose Financial Captives (SPFCs) exclusively to facilitate the securitization of one or more risks, as a means of accessing alternative sources of capital and achieving the benefits of securitization. SPFCs are created for the limited purpose of entering into an SPFC contract and insurance securitization transactions and into related agreements to facilitate the accomplishment and execution of those transactions. The creation of SPFCs is intended to achieve greater efficiencies in structuring and executing insurance securitizations, to diversify and broaden insurers' access to sources of capital, to facilitate access for many insurers to insurance securitization and capital markets financing technology, and to further the economic development and expand the interest of the Territory through its captive insurance program.
 For purposes of this subchapter, the following definitions apply in addition to the definitions set out in Subchapter I of this chapter: (a) Contested case means a proceeding in which the legal rights, duties, obligations, or privileges of a party are required by law to be determined by the Court after an opportunity for hearing. (b) Control including the terms controlling, controlled by, and under common control with means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract other than a commercial contract for goods or non-management services, or otherwise, unless the power is the result of an official position with or corporate office held by the person. Control is presumed to exist if a person, directly or indirectly, owns, controls, holds with the power to vote, or holds proxies representing ten percent or more of the voting securities of another person. This presumption may be rebutted by a showing that control does not exist. Notwithstanding other provisions of this section, for purposes of this subchapter, the fact that an SPFC exclusively provides reinsurance to a ceding insurer under an SPFC contract is not by itself sufficient grounds for a finding that the SPFC and ceding insurer are under common control. (c) Counterparty means a person, other than a natural person, which may but need not be the parent or an affiliate of the SPFC that enters into a contract with a SPFC. (d) Court means the Superior Court of the Virgin Islands. (e) Fair value means: (1) as to cash, the amount of it; and (2) as to an asset other than cash: (A) the amount at which that asset could be bought or sold in a current transaction between arms length, willing parties; (B) the quoted mid-market price for the asset in active markets must be used if available; and (C) if quoted mid-market prices are not available, a value determined using the best information available considering values of similar assets and other valuation methods, such as present value of future cash flows, historical value of the same or similar assets, or comparison to values of other asset classes, the value of which have been historically related to the subject asset. (f) Insolvency or insolvent means that the SPFC or one or more of its protected cells is unable to pay its obligations when they are due, unless those obligations are the subject of a bona fide dispute, or the SAM previously has established by order other criteria for determining the solvency of the SPFC or one or more of its protected cells, in which case the SPFC is insolvent if it fails to meet that criteria. (g) Insurance securitization means a package of related risk transfer instruments, capital market offerings, and facilitating administrative agreements by which proceeds are obtained by an SPFC directly or indirectly through the issuance of securities, which complies with applicable securities law, and which proceeds are held in trust pursuant to the provisions of this subchapter to secure the obligations of the SPFC under one or more SPFC contracts with a counterparty, where investment risk to the holders of these securities is contingent upon the obligations of the SPFC to the counterparty under the SPFC contract in accordance with the transaction terms. (h) Management means the board of directors or other parties vested with overall responsibility for the management of the affairs of the SPFC, including the election and appointment of officers or other of those agents to act on behalf of the SPFC. (i) Organizational document means the SPFC's articles of incorporation, articles of organization, bylaws, operating agreement, or other foundational documents that establish the SPFC as a legal entity or prescribes its existence. (j) Permitted investments means those investments that meet the qualifications pursuant to section 6665 of this subchapter. (k) Qualified Manager means an entity formed in the Territory that is owned at least 51 percent by residents of the Territory who possess sufficient experience in the businesses of SPFC transactions, insurance transactions, or other relevant experience as determined by the SAM, and subject to the regulations promulgated by the SAM. (l) Qualified United States financial institution means, for purposes of meeting the requirements of a trustee as specified in section 6665 of this subchapter, a financial institution that is eligible to act as a fiduciary of a trust, and is: (1) organized or, in the case of a United States branch or agency office of a foreign banking organization, is licensed under the laws of the United States or the Territory; and (2) regulated, supervised, and examined by federal, state or Territorial authorities having regulatory authority over banks and trust companies. (m) Securities, or in the singular Security, means those different types of debt obligations, equity, surplus certificates, surplus notes, funding agreements, derivatives, and other legal forms of financial instruments. Security also means any note, stock, treasury stock, bond; debenture; evidence of indebtedness; certificate of interest or participation in any profit-sharing agreement; collateral-trust certificate; reorganization certificate or subscription; transferable share; investment contract, including pyramid promotion which includes any plan or operation for the sale or distribution or property, services, or any other thing of value wherein a person for a consideration is offered an opportunity to obtain a benefit which is based in whole or in part on the inducement, by himself or herself or by others, of additional persons to purchase the same or a similar opportunity; voting-trust certificate; certificate of deposit for a security; certificate of interest of participation in an oil, gas or mining title or lease or in payments out of production under such a title or lease; options on commodities; or, in general, any interest or instrument commonly known as a security, or any certificate of interest or participation in, temporary or interim certificate, for, receipt for guarantee of, or warrant or right to subscribe to or purchase, any of the foregoing. Security does not include any insurance or endowment policy or annuity contract under which an insurance company promises to pay money either in a lump sum or periodically for life or for some other specified period. (n) Securities commissioner means the Lieutenant Governor or the Lieutenant Governor's designee. (o) SPFC or Special Purpose Financial Captive means an entity as defined in section 6601(a)(26) of this chapter which has received a license from the SAM for the limited purposes provided for in this subchapter. (p) SPFC contract means a contract between the SPFC and the counterparty pursuant to which the SPFC agrees to provide insurance or reinsurance protection to the counterparty for risks associated with the counterparty's insurance or reinsurance business. (q) SPFC securities means the securities issued by an SPFC. (r) Surplus note means an unsecured subordinated debt obligation deemed to be a surplus certificate and otherwise possessing characteristics consistent with paragraph 3 of the Statement of Statutory Accounting Principles No. 41, as amended, National Association of Insurance Commissioners (NAIC). (s) Third party means a person unrelated to an SPFC or its counterparty, or both, that has been aggrieved by a decision of the SAM regarding that SPFC or its activities.
 (a) No provisions of title 22 other than those specifically referenced in this subchapter apply to an SPFC, and those provisions apply only as modified by this subchapter. If a conflict occurs between a provision of title 22 and a provision of this subchapter, the latter controls. (b) The SAM, by rule, regulation, or order, may exempt an SPFC or its protected cells, on a case by case basis, from provisions of this subchapter that the SAM determines to be inappropriate given the nature of the risks to be insured.
 (a) An SPFC, when permitted by its organizational documents, may apply to the SAM for a license to transact insurance or reinsurance business as authorized by this subchapter. An SPFC may insure or reinsure only the risks of its counterparty. An SPFC may purchase reinsurance to cede the risks assumed under the SPFC contract as approved by the SAM. (b) To transact business in this Territory an SPFC shall: (1) obtain from the SAM a license authorizing it to conduct insurance or reinsurance business, or both, in this Territory; (2) hold at least one management meeting each year in this Territory; (3) maintain its principal place of business in this Territory, either directly or through the Qualified Manager; (4) authorize the Qualified Manager to serve as the SPFC's resident registered agent to accept service of process and to otherwise act on its behalf in this Territory. If the registered agent, with reasonable diligence, is not found at the registered office of the SPFC, the SAM must be an agent of the SPFC upon whom any process, notice, or demand may be served; (5) provide such documentation of the insurance securitization as requested by the SAM immediately upon closing of the transaction, including: (A) an opinion of legal counsel with respect to compliance with this subchapter and any other applicable laws as of the effective date of the transaction; and (B) a statement under oath of its president and secretary, or manager, showing its financial condition; and (6) provide a complete set of the documentation of the insurance securitization to the SAM shortly following closing of the transaction. (c) A complete SPFC application must include the following: (1) a certified copy of its organizational documents; (2) evidence of: (A) the amount and liquidity of its assets relative to the risks to be assumed; (B) the adequacy of the expertise, experience, and character of the person or persons who manages it; (C) the overall soundness of its plan of operation; (D) other factors considered relevant by the SAM in ascertaining whether the proposed SPFC is able to meet its policy obligations; and (E) the applicant SPFC's financial condition, including the source and form of the minimum capitalization to be contributed to the SPFC; (3) A plan of operation, consisting of a description of or statement of intent with respect to the contemplated insurance securitization, the SPFC contract, and related transactions, which must include: (A) draft documentation or, at the discretion of the SAM, a written summary of all material agreements that are entered into to effectuate the SPFC contract and, before effecting such, the insurance securitization, to include the names of the counterparty, the nature of the risks being assumed, the proposed use of protected cells, if any, and the maximum amounts, purpose, and nature and the interrelationships of the various transactions required to effectuate the insurance securitization; (B) the source and form of additional capitalization to be contributed to the SPFC; (C) the proposed investment strategy of the SPFC; (D) a description of the underwriting, reporting, and claims payment methods by which losses covered by the SPFC contract are reported, accounted for, and settled; and (E) a pro forma balance sheet and income statement illustrating various stress case scenarios for the performance of the SPFC under the SPFC contract; (4) Biographical affidavits in NAIC format of all of the prospective SPFC's officers and directors and managers, providing their legal names, any names under which they have or are conducting their affairs, and any affiliations with other persons, together with other biographical information as the SAM may request; (5) An affidavit from the applicant SPFC verifying: (A) the applicant SPFC meets the provisions of this subchapter; (B) the applicant SPFC operates only pursuant to the provisions in this subchapter; (C) the applicant SPFC's investment strategy reflects and takes into account the liquidity of assets and the reasonable preservation, administration, and asset management of such assets relative to the risks associated with the SPFC contract and the insurance securitization transaction; (D) the securities proposed to be issued are valid legal obligations that are either properly registered with the Office of the Lieutenant Governor, Division of Banking, Insurance and Financial Regulation or constitute an exempt security or form part of an exempt transaction under Virgin Islands law; and (E) unless otherwise exempted by the SAM, the trust agreement, the trusts holding assets that secure the obligations of the SPFC under the SPFC contract, and the SPFC contract with the counterparty in connection with the contemplated insurance securitization are structured pursuant to the provisions in this subchapter; and (6) Any other statements or documents required by the SAM to evaluate and complete the licensing of the SPFC. (d) In addition to the information required by subsection (c), and to the provisions of section 6658 of this subchapter, if a protected cell is used, an applicant SPFC shall file with the SAM: (1) a business plan demonstrating how the applicant accounts for the loss and expense experience of each protected cell at a level of detail found to be sufficient by the SAM, and how it reports the experience to the SAM; (2) a statement acknowledging that all financial records of the SPFC, including records pertaining to any protected cells, must be made available for inspection or examination by the SAM; (3) all contracts or sample contracts between the SPFC and any counterparty, related to each protected cell; and (4) a description of the expenses allocated to each protected cell. (e) Information submitted pursuant to this subsection is confidential and is subject to section X 2 [sic]. (f) Sections Y and Z [sic] apply to examinations, investigations, and processing conducted pursuant to the authority of this subchapter. (g) To transact insurance or reinsurance business in this Territory, an SPFC shall pay to the SAM: (1) a nonrefundable fee of $200 for processing its application for license. In addition, the SAM may retain legal, financial, and examination services from outside the Government to examine and investigate the application, the reasonable cost of which may be charged against the applicant, or the SAM may use internal resources to examine and investigate the application for a fee of $3,000, half of which is payable upon filing of the application and the remainder upon licensure, or both; (2) a license fee for the year of registration of $300 and an annual renewal fee of $300; (3) an annual review fee of $2,400 or, if higher, the actual cost as determined by the SAM; and (4) premium taxes as required by this subchapter. (h) The SAM may grant a license authorizing the SPFC to transact insurance or reinsurance business as an SPFC in this Territory until March first, at which time the license may be renewed, upon finding that the: (1) proposed plan of operation provides a reasonable and expected successful operation; (2) terms of the SPFC contract and related transactions comply with this subchapter; (3) proposed plan of operation is not hazardous to any counterparty; (4) commissioner of the state of domicile of each counterparty has notified the SAM in writing or otherwise provided assurance satisfactory to the SAM that it has approved or not disapproved the transaction; and (5) the license authorizing the SPFC to transact business is limited only to the insurance or reinsurance activities that the SPFC is allowed to conduct pursuant to this subchapter. (i) In evaluating the expectation of a successful operation, the SAM shall consider, among other factors, whether the proposed SPFC, and its management are of known good character and reasonably believed not to be affiliated, directly or indirectly, through ownership, control, management, reinsurance transactions, or other insurance or business relations, with a person known to have been involved in the improper manipulation of assets, accounts, or reinsurance. (j) A foreign or alien corporation or limited liability company, upon approval of the SAM, may become a domestic SPFC by complying with all of the provisions of this subchapter and by filing with the Office of the Lieutenant Governor its organizational documents, together with appropriate amendments to it, as may be adopted pursuant to the provisions of this subchapter to bring these organizational documents into compliance with this subchapter. After this is accomplished, the foreign or alien corporation or limited liability company is entitled to the necessary or appropriate certificates or licenses to transact business as an SPFC in this Territory and is subject to the authority and jurisdiction of this Territory. In connection with this redomestication, the SAM may waive any requirements for public hearings. It is not necessary for a corporation or limited liability company redomesticating into this Territory to merge, consolidate, transfer assets, or otherwise engage in another reorganization, other than as specified in this section.
 (a) An SPFC may be established as a stock corporation, limited liability company, mutual, partnership, trust or other form of organization approved by the SAM. (b) The SPFC's organizational documents must limit the SPFC's authority to transact the business of insurance or reinsurance to those activities the SPFC conducts to accomplish its purpose as expressed in this subchapter. (c) The SPFC may not adopt a name that is the same as, deceptively similar to, or likely to be confused with or mistaken for another existing business name registered in this Territory. (d) An SPFC may not have fewer than three incorporators or organizers of whom not fewer than two must be bona fide residents of this Territory. (e) Before transmitting its organizational documents to the Office of the Lieutenant Governor, the incorporators or organizers shall petition the SAM to issue a certificate setting forth a finding that the establishment and maintenance of the proposed SPFC promotes the general good of the Territory. In arriving at this finding the SAM shall consider: (1) the character, reputation, financial standing, and purposes of the incorporators or organizers; (2) the character, reputation, financial responsibility, insurance experience, and business qualifications of the officers, directors, partners, members, manager, or organizers, as applicable; and (3) other aspects as the SAM considers advisable. (f) The organizational documents, the certificate issued pursuant to subsection (e), and the required organization fees must be transmitted to the SAM and the Office of the Lieutenant Governor, Division of Corporations and Trademarks who shall record the relevant organizational documents. (g) At least one of the members of the management of the SPFC, or the Qualified Manager representing the SPFC must be a resident of this Territory. (h) An SPFC formed pursuant to the provisions of this subchapter has the privileges of and is subject to the provisions of the Virgin Islands Code, applicable to its formation, as well as the applicable provisions contained in this subchapter. If a conflict occurs between a provision of the applicable law and a provision of this subchapter, the latter controls. Nothing contained in this subsection with respect to an SPFC may abrogate, limit, or rescind in any way the authority of the Office of the Lieutenant Governor, Division of Banking, Insurance and Financial Regulation.
 (a) An SPFC initially shall possess and after that maintain minimum capitalization of not less than $250,000. All of the minimum initial capitalization must be in cash. All other funds of the SPFC in excess of its minimum initial capitalization must be in the form of cash, cash equivalent, or securities invested as provided in section 6665 of this subchapter and approved by the SAM. (b) Additional capitalization for the SPFC must be determined, if so required, by the SAM after giving due consideration to the SPFC's business plan, feasibility study, pro-formas, and the nature of the risks being insured or reinsured, which may be prescribed in formulas approved by the SAM. (c) All of the minimum capitalization must be held in a bank or financial institution licensed and doing business in the Territory.
 (a) An SPFC may insure only the risks of a counter party. (b) An SPFC may not issue a contract for assumption of risk or indemnification of loss other than an SPFC contract. However, the SPFC may cede risks assumed through an SPFC contract to third party international reinsurers through the purchase of reinsurance or retrocession protection on terms approved by the SAM. (c) An SPFC may enter into contracts and conduct other commercial activities related or incidental to and necessary to fulfill the purposes of the SPFC contract, insurance securitization, and this subchapter. Those activities may include: entering into SPFC contracts; issuing securities of the SPFC in accordance with applicable securities law; complying with the terms of these contracts or securities; entering into trust, swap, tax, administration, reimbursement, or fiscal agent transactions; or complying with trust indenture, reinsurance, or retrocession, and other agreements necessary or incidental to effectuate an insurance securitization in compliance with this subchapter or the plan of operation approved by the SAM. (d) An SPFC may discount its reserves at discount rates as approved by the SAM. (e) An SPFC shall file annually an actuarial opinion on reserves provided by an approved and licensed independent actuary.
 (a) This section and section 6659 of this subchapter provide a basis for the creation and use of protected cells by an SPFC as a means of accessing alternative sources of capital, lowering formation and administrative expenses, and generally making insurance securitizations more efficient. (b) An SPFC may establish and maintain one or more protected cells with prior written approval of the SAM and subject to compliance with the applicable provisions of this subchapter and the following conditions: (1) A protected cell must be established only for the purpose of insuring or reinsuring risks of one or more SPFC contracts with a counterparty with the intent of facilitating an insurance securitization; (2) Each protected cell must be accounted for separately on the books and records of the SPFC to reflect the financial condition and results of operations of the protected cell, net income or loss, dividends, or other distributions to the counterparty for the SPFC contract with each cell, and other factors as may be provided in the SPFC contract, insurance securitization transaction documents, plan of operation, or business plan, or as required by the SAM; (3) Amounts attributed to a protected cell under this chapter, including assets transferred to a protected cell account, are owned by the SPFC, and the SPFC may not be, or may not hold itself out to be, a trustee with respect to those protected cell assets of that protected cell account; (4) All attributions of assets and liabilities between a protected cell and the general account must be in accordance with the plan of operation approved by the SAM. No other attribution of assets or liabilities may be made by an SPFC between the SPFC's general account and its protected cell or cells. The SPFC shall attribute all insurance obligations, assets, and liabilities relating to an SPFC contract and the related insurance securitization transaction, including any securities issued by the SPFC as part of the insurance securitization, to a particular protected cell. The rights, benefits, obligations, and liabilities of any securities attributable to that protected cell and the performance under an SPFC contract and the related securitization transaction and any tax benefits, losses, refunds, or credits allocated, or any of them, at any point in time pursuant to a tax allocation agreement between the SPFC and the SPFC's counterparty, parent, or company or group company, or any of them, in common control with them, as the case may be, including any payments made by or due to be made to the SPFC pursuant to the terms of the agreement, must reflect the insurance obligations, assets, and liabilities relating to the SPFC contract and the insurance securitization transaction that are attributed to a particular protected cell; (5) The assets of a protected cell must not be chargeable with liabilities arising out of an SPFC contract related to or associated with another protected cell. However, one or more SPFC contracts may be attributed to a protected cell so long as those SPFC contracts are intended to be, and ultimately are, part of a single securitization transaction; (6) A sale, an exchange, or another transfer of assets may not be made by the SPFC between or among any of its protected cells without the consent of the SAM, counterparty, and each protected cell; (7) Except as otherwise contemplated in the SPFC contract or related insurance securitization transaction documents, or both, a sale, an exchange, a transfer of assets, a dividend, or a distribution may not be made from a protected cell to a counterparty or parent without the SAM's approval and may not be approved if the sale, exchange, transfer, dividend, or distribution would result in insolvency or impairment with respect to a protected cell; and (8) An SPFC may pay interest or repay principal, or both, and make distributions or repayments in respect of any securities attributed to a particular protected cell from assets or cash flows relating to or emerging from the SPFC contract and the insurance securitization transactions that are attributable to that particular protected cell in accordance with this subchapter or as otherwise approved by the SAM. (c) An SPFC contract with or attributable to a protected cell does not take effect without the SAM's prior written approval, and the addition of each new protected cell constitutes a change in the business plan requiring the SAM's prior written approval. The SAM may retain legal, financial, and examination services from outside the Government to examine and investigate the application for a protected cell, the reasonable cost of which may be charged against the applicant, or the SAM may use internal resources to examine and investigate the application the reasonable cost of which may be charged against the applicant up to a maximum of twelve thousand dollars, or both. (d) An SPFC utilizing protected cells initially shall possess minimum capitalization separate and apart from the capitalization of its protected cell or cells in an amount determined by the SAM after giving due consideration of the SPFC's business plan, feasibility study, and pro-formas, including the nature of the risks to be insured or reinsured. For purposes of determining the capitalization of each protected cell, an SPFC initially shall capitalize and after that time maintain capitalization in each protected cell in the amount and manner required for an SPFC in section 6656 of this subchapter. (e) The establishment of one or more protected cells alone does not constitute, and may not be deemed to be, a fraudulent conveyance, an intent by the SPFC to defraud creditors, or the carrying out of business by the SPFC for any other fraudulent purpose.
 (a)  (1) The creation of a protected cell does not create, with respect to that protected cell, a legal person separate from the SPFC. (2) Notwithstanding paragraph (1), a protected cell must have its own distinct name or designation that includes the words protected cell. The SPFC shall transfer all assets attributable to the protected cell to one or more separately established and identified protected cell accounts bearing the name or designation of that protected cell. (3) Although it is not a separate legal person, the property of an SPFC in a protected cell is subject to orders of a court by name as it would have been if the protected cell were a separate legal person. (4) The property of an SPFC in a protected cell must be served in its own name with process in all civil actions or proceedings involving or relating to the activities of that protected cell or a breach by the SPFC of a duty to the protected cell or to a counterparty to a transaction linked or attributed to it by serving the SPFC. (5) A protected cell exists only at the pleasure of the SPFC. At the cessation of business of a protected cell in accordance with the plan approved by the SAM, the SPFC voluntarily shall close out the protected cell account. (b) Nothing in this section may be construed to prohibit an SPFC from contracting with, or arranging for, an investment advisor, commodity trading advisor, or other third party to manage the assets of a protected cell, if all remuneration, expenses, and other compensation of the third party advisor or manager are payable from the assets of that protected cell and not from the assets of other protected cells or the assets of the SPFC's general account, unless approved by the SAM. (c) Creditors of a protected cell are not entitled to have recourse against the protected cell assets of other protected cells or the assets of the SPFC's general account. If an obligation of an SPFC relates only to the general account, the obligation of the SPFC extends only to that creditor, with respect to that obligation, and is entitled to have recourse only to the assets of the SPFC's general account. (d) The assets of the protected cell may not be used to pay expenses or claims other than those attributable to the protected cell. Protected cell assets are available only to the SPFC contract counterparty and other creditors of the SPFC that are creditors only with respect to that protected cell and, accordingly, are entitled, in conformity with this subchapter, to have recourse to the protected cell assets attributable to that protected cell and absolutely are protected from the creditors of the SPFC that are not creditors with respect to that protected cell and who, accordingly, are not entitled to have recourse to the protected cell assets attributable to that protected cell. If an obligation of an SPFC to a person or counterparty arises from an SPFC contract or related insurance securitization transaction, or is otherwise incurred, with respect to a protected cell: (1) that obligation of the SPFC extends only to the protected cell assets attributable to that protected cell, and the person or counterparty, with respect to that obligation, is entitled to have recourse only to the protected cell assets attributable to that protected cell; and (2) that obligation of the SPFC does not extend to the protected cell assets of another protected cell or the assets of the SPFC's general account, and that person, with respect to that obligation, is not entitled to have recourse to the protected cell assets of another protected cell or the assets of the SPFC's general account. The SPFC's capitalization held separate and apart from the capitalization of its protected cell or cells as required by section 6659 must be available at all times to pay expenses of or claims against the SPFC and may not be used to pay expenses or claims attributable to any protected cell. (e) Notwithstanding any other provision of law, an SPFC may allow for a security interest in accordance with applicable law to attach to protected cell assets or a protected cell account when in favor of a creditor of the protected cell or to facilitate the insurance securitization, including, without limitation, the issuance of the SPFC contract, to the extent those protected cell assets are not required at all times to support the risk, but without otherwise affecting the discharge of liabilities under the SPFC contract, or as otherwise approved by the SAM. (f) An SPFC shall establish administrative and accounting procedures necessary to properly identify the one or more protected cells of the SPFC and the protected cell assets and protected cell liabilities to each protected cell. The directors of an SPFC shall keep protected cell assets and protected cell liabilities: (1) separate and separately identifiable from the assets and liabilities of the SPFC's general account; and (2) attributable to one protected cell separate and separately identifiable from protected cell assets and protected cell liabilities attributable to other protected cells. (g) All contracts or other documentation reflecting protected cell liabilities clearly must indicate that only the protected cell assets are available for the satisfaction of those protected cell liabilities. In all SPFC insurance securitizations involving a protected cell, the contracts or other documentation effecting the transaction must contain provisions identifying the protected cell to which the transaction is attributed. In addition, the contracts or other documentation clearly must disclose that the assets of that protected cell, and only those assets, are available to pay the obligations of that protected cell. Notwithstanding the provisions of this subsection and subject to the provisions of this subchapter and another applicable law or regulation, the failure to include this language in the contracts or other documentation may not be used as the sole basis by creditors, insureds or reinsureds, insurers or international reinsurers, or other claimants to circumvent the provisions of this section. (h) An SPFC with protected cells annually shall file with the SAM accounting statements and financial reports required by this subchapter which, among other things, must: (1) detail the financial experience of each protected cell and the SPFC separately; and (2) provide the combined financial experience of the SPFC and all protected cells. (i) An SPFC with protected cells shall notify the SAM in writing within ten business days of a protected cell's becoming insolvent.
 (a) An SPFC may issue securities, including surplus notes and other forms of financial instruments, subject to and in accordance with applicable law, its approved plan of operation, and its organizational documents. (b) An SPFC, in connection with the issuance of securities, may enter into and perform all of its obligations under any required contracts to facilitate the issuance of these securities. (c) Subject to the approval of the SAM, an SPFC may lawfully: (1) account for the proceeds of surplus notes as surplus and not as debt for purposes of statutory accounting; (2) submit for prior approval of the SAM periodic written requests for payments of interest on and repayments of principal of surplus notes. (d) The SAM, without otherwise prejudicing the SAM's authority, may approve formulas for an ongoing plan of interest payments or principal repayments, or both, to provide guidance in connection with his ongoing reviews of requests to approve the payments on and principal repayments of the surplus notes. (e) The obligation to repay principal or interest, or both, on the securities issued by the SPFC must reflect the risk associated with the obligations of the SPFC to the counterparty under the SPFC contract.
 An SPFC may enter into swap agreements, or other forms of asset management agreements, including guaranteed investment contracts, or other transactions that have the objective of leveling timing differences in funding of up-front or ongoing transaction expenses or managing asset, credit, or interest rate risk of the investments in the trust to ensure that the investments are sufficient to assure payment or repayment of the securities, and related interest or principal payments, issued pursuant to an SPFC insurance securitization transaction or the obligations of the SPFC under the SPFC contract.
 (a) An SPFC, at any given time, may enter into and effectuate an SPFC contract with a counterparty, if the SPFC contract obligates the SPFC to indemnify the counterparty for losses and that contingent obligations of the SPFC under the SPFC contract are securitized through an SPFC insurance securitization and are funded and secured with assets held in trust for the benefit of the counterparty pursuant to the provisions of this subchapter pursuant to agreements contemplated by this subchapter and invested in a manner that meet the criteria as provided in section 6665 of this Title. (b) An SPFC may enter into agreements with affiliated companies and third parties and conduct business necessary to fulfill its obligations and administrative duties incidental to the insurance securitization and the SPFC contract. The agreements may include management and administrative services agreements and other allocation and cost sharing agreements, or swap and asset management agreements, or both, or agreements for other contemplated types of transactions provided in section 6661 of this subchapter. (c) An SPFC contract must contain provisions that: (1) require the SPFC to enter into a trust agreement specifying what recoverables or reserves, or both the agreement is to cover and to establish a trust account for the benefit of the counterparty; (2) stipulate that assets deposited in the trust account must be valued according to their current fair value and must consist only of permitted investments; (3) require the SPFC, before depositing assets with the trustee, to execute assignments, endorsements in blank, or to transfer legal title to the trustee of all shares, obligations, or any other assets requiring assignments, in order that the counterparty, or the trustee upon the direction of the counterparty, may negotiate whenever necessary the assets without consent or signature from the SPFC or another entity; (4) require that all settlements of account between the counterparty and the SPFC be made in cash or its equivalent; and (5) stipulate that the SPFC and the counterparty agree that the assets in the trust account, established pursuant to the provisions of the SPFC contract, may be withdrawn by the counterparty at any time, notwithstanding any other provisions in the SPFC contract, and must be utilized and applied by the counterparty or any successor by operation of law of the counterparty, including, subject to the provisions of section 6672 of this subchapter, but without further limitation, any liquidator, rehabilitator, receiver, or conservator of the counterparty, without diminution because of insolvency on the part of the counterparty or the SPFC, only for the following purposes: (A) to transfer all of the assets into one or more trust accounts for the benefit of the counterparty pursuant to and in accordance with the terms of the SPFC contract and in compliance with the provisions of this subchapter; and (B) to pay any other incurred and paid amounts that the counterparty claims are due pursuant to and under the terms of the SPFC contract and in compliance with this subchapter. (d)  (1) The SPFC contract may contain provisions that give the SPFC the right to seek approval from the counterparty to withdraw from the trust all or part of the assets, or income from them, contained in the trust and to transfer the assets to the SPFC, provided that: (A) at the time of the withdrawal, the SPFC shall replace the withdrawn assets, excluding any income withdrawn, with other qualified assets having a fair value equal to the fair value of the assets withdrawn and that meet the provisions of section 6665 of this subchapter; and (B) after the withdrawals and transfer, the fair value of the assets in trust securing the obligations of the SPFC under the SPFC contract is no less than an amount needed to satisfy the funded requirement of the SPFC contract. (2) The counterparty must be the sole judge as to the application of these provisions but may not unreasonably nor arbitrarily withhold its approval.
 Securities issued by an SPFC pursuant to an insurance securitization may not be considered to be insurance or reinsurance contracts. An investor in these securities or a holder of these securities, by sole means of this investment or holding, may not be considered to be transacting the business of insurance in this Territory. The underwriter's placement or selling agents and their partners, directors, officers, members, managers, employees, agents, representatives, and advisors involved in an insurance securitization pursuant to this subchapter may not be considered to be insurance producers or brokers or conducting business as an insurance or reinsurance company or agency, brokerage, intermediary, advisory, or consulting business only by virtue of their activities in connection with them.
 In fulfilling its function, the SPFC must adhere to the following requirements and, to the extent of its powers, must ensure that contracts obligating other parties to perform certain functions incident to its operations are substantively and materially consistent with the following requirements and guidelines: (a) The assets of an SPFC must be preserved and administered by or on behalf of the SPFC to satisfy the liabilities and obligations of the SPFC incident to the insurance securitization and other related agreements; (b) Assets held by an SPFC in trust must be valued at their fair value; (c) The proceeds from the sale of securities pursuant to the insurance securitization must be deposited with the trustee to the extent required to secure its obligations under the SPFC contract as provided by this subchapter and must be held or invested by the trustee pursuant to the provisions of section 6665 of this title and the asset management agreement, if any, filed with the SAM; (d) Assets of the SPFC, other than those held in trust for the counterparty, and income on trust assets received by the SPFC may be used to pay interest or other consideration on any securities or outstanding debt or other obligation of the SPFC, and nothing in this subchapter may be construed or interpreted to prevent an SPFC from entering into a swap agreement or other asset management transaction that has the effect of hedging or guaranteeing the fixed or floating interest rate returns paid on the assets in trust or required for the securities issued by the SPFC generated from or other consideration or payment flaws in the transaction; (e) In the SPFC insurance securitization, the contracts or other relating documentation must contain provisions identifying the SPFC; (f) Unless otherwise approved by the SAM, an SPFC may not: (1) issue or otherwise administer primary insurance policies; (2) enter into an SPFC contract with a person that is not licensed or otherwise authorized to transact the business of insurance or reinsurance in at least its state, territory or country of domicile; or (3) assume or retain exposure to insurance or reinsurance losses for its own account that is not funded by proceeds from an SPFC securitization that meets the provisions of this subchapter. However, the SPFC may wholly or partially reinsure or retrocede the risks assumed to a third party international reinsurer on terms approved by the SAM; (g) An SPFC may not: (1) have any direct obligation to the policyholders or reinsureds of the counterparty; or (2) lend or otherwise invest, or place in custody, trust, or under management any of its assets with, or to borrow money or receive a loan from, other than by issuance of the securities pursuant to an insurance securitization, or advance from, anyone convicted of a felony, anyone who is untrustworthy or of known bad character, or anyone convicted of a criminal offense involving the conversion or misappropriation of fiduciary funds or insurance accounts, theft, deceit, fraud, misrepresentation, or corruption.
 (a) Assets of the SPFC held in trust to secure obligations under the SPFC contract must at all times be held in: (1) cash and cash equivalents; (2) securities listed by the Securities Valuation Office of the NAIC and qualifying as admitted assets under statutory accounting convention in its state, territory of domicile; or (3) another form of security acceptable to the SAM. (b) Assets of the SPFC that are pledged to secure obligations of the SPFC to a counterparty under an SPFC contract must be held in trust and administered by a qualified United States financial institution. The qualified United States financial institution does not control, is not controlled by, or is not under common control with, the SPFC or the counterparty. (c) The agreement governing this trust must create one or more trust accounts into which all pledged assets must be deposited and held until distributed in accordance with the trust agreement. The pledged assets must be held by the trustee at one of the trustee's offices or branch offices in the United States or the Virgin Islands and may be held in certificated or electronic form. (d) The provisions for withdrawal by the counterparty of assets from the trust must be clear and unconditional, subject only to the following requirements: (1) the counterparty has the right to withdraw assets from the trust account at any time, without notice to the SPFC, subject only to written notice to the trustee from the counterparty that funds in the amount requested are due and payable by the SPFC, pursuant to the terms of the SPFC contract; (2) a statement or document does not need to be presented in order to withdraw assets, but the counterparty may be required to acknowledge receipt of withdrawn assets; (3) the trust agreement must indicate that it is not subject to any conditions or qualifications outside of the trust agreement; and (4) the trust agreement must not contain references to any other agreements or documents. (e) The trust agreement must be established for the sole use and benefit of the counterparty at least to the full extent of the obligations of the SPFC to the counterparty under the SPFC contract. If there is more than one counterparty, or more than one SPFC contract with the same counterparty, a separate trust agreement must be entered into with the counterparty and a separate trust account must be maintained for each SPFC contract with the counterparty, unless otherwise approved by the SAM. (f) The trust agreement must provide for the trustee to: (1) receive assets and hold all assets in a safe place; (2) determine that all assets are in a form that the counterparty or the trustee, upon direction by the counterparty, may negotiate, whenever necessary, the assets, without consent or signature from the SPFC or another person or entity; (3) furnish to the SPFC, the SAM, and the counterparty a statement of all assets in the trust account reported at fair value upon its inception and at intervals no less frequent than the end of each calendar quarter; (4) notify the SPFC and the counterparty, within ten days, of any deposits to or withdrawals from the trust account; (5) upon written demand of the counterparty, immediately take the necessary steps to transfer absolutely and unequivocally all right, title, and interest in the assets held in the trust account to the counterparty and deliver physical custody of the assets to the counterparty; and (6) allow no substitutions or withdrawals of assets from the trust account, except pursuant to the trust agreement or SPFC contract, or as otherwise permitted by the counterparty. (g) The trust agreement must provide that at least thirty days, but not more than forty five days, before termination of the trust account, written notification of termination must be delivered by the trustee to the counterparty with a copy of the notice provided to the SAM. (h) In addition to the requirements for the trust as provided in this subchapter, the trust agreement may be made subject to and governed by the laws of any state or territory. The state or territory must be disclosed in the plan of operation filed with and approved by the SAM. (i) The trust agreement must prohibit invasion of the trust corpus for the purpose of paying compensation to, or reimbursing the expenses of, the trustee. (j) The trust agreement must provide that the trustee must be liable for its own negligence, willful misconduct, or lack of good faith. (k)  (1) Notwithstanding the provisions of subsection (d)(3) and (4), when a trust agreement is established in conjunction with an SPFC contract, then the trust agreement or SPFC contract, or both, may provide that the counterparty shall undertake to use and apply any amounts drawn upon the trust account, without diminution because of the insolvency of the counterparty or the SPFC, only for one or more of the following purposes: (A) to pay or reimburse the counterparty for payment of the SPFC's share of premiums to be returned to owners of counterparty's policies covered under the SPFC contract on account of cancellations of the policies under the counterparties policies; (B) to pay or reimburse the counterparty for payment of the SPFC's share of surrenders, benefits, losses, or other benefits covered and payable pursuant to the provisions of the SPFC contract; (C) to fund an account with the counterparty in an amount to secure the credit or reduction from liability for reinsurance coverage provided under the SPFC contract; or (D) to pay any other amounts the counterparty claims are legally and properly due under the SPFC contract. (2) Any assets deposited into an account of the counterparty pursuant to subparagraph (C) of paragraph (1) or withdrawn by the counterparty pursuant to subparagraph (D) of paragraph (1) and any interest or other earnings on them, must be held by the counterparty in trust and separate and apart from any general assets of the counterparty, for the sole purpose of funding the payments and reimbursements of the SPFC contract described in subparagraphs (A) through (D) of paragraph (1). (3) The counterparty shall return to the SPFC amounts withdrawn under subparagraphs (A) through (D) of paragraph (1) in excess of actual amounts required under subparagraphs (A) through (C) of paragraph (1), and in excess of the amounts subsequently determined to be due under subparagraph (D) of paragraph (1), plus interest at a rate not in excess of the prime rate for the amounts held pursuant to subparagraph (C) of paragraph (1) unless a higher rate of interest has been awarded by a court, and any net costs or expenses, including attorneys' fees, awarded by a court. (4) If the counterparty has received notification of termination of the trust account, and where the SPFC's entire obligations secured under the specific SPFC contract remain unliquidated and undischarged ten days before the termination date, to withdraw amounts equal to the obligations and deposit the amounts in a separate account, in the name of the counterparty, in a qualified United States financial institution, separate and apart from the counterparty's general assets, to the extent the obligations or liabilities have not been funded by the SPFC, in trust only for those uses and purposes specified in subparagraph (A) of paragraph (1) as may remain executory after the withdrawal and for any period after the termination date until discharged.
 (a) An SPFC may not declare or pay dividends in any form to its owners other than in accordance with the insurance securitization transaction agreements, and in no extent may the dividends decrease the capital of the SPFC below two hundred fifty thousand dollars, and, after giving effect to the dividends, the assets of the SPFC, including assets held in trust pursuant to the terms of the insurance securitization, must be sufficient to satisfy the SAM that it can meet its obligations. Approval by the SAM of an ongoing plan for the payment of dividends or other distribution by an SPFC must be conditioned upon the retention, at the time of each payment, of capital or surplus equal to or in excess of amounts specified by, or determined in accordance with formulas approved for the SPFC by the SAM. (b) The dividends may be declared by the management of the SPFC if the dividends do not violate the provisions of this subchapter or jeopardize the fulfillment of the obligations of the SPFC or the trustee pursuant to the SPFC insurance securitization agreements, the SPFC contract, or any related transaction and other provisions of this subchapter.
 (a) Any material change of the SPFC's plan of operation pursuant to the section 6654 of this suchapter, whether or not through an SPFC protected cell, requires prior approval of the SAM, provided however: (1) if initially approved in the plan of operation, securities subsequently issued to continue the securitization activities of the SPFC either during or after expiration, redemption, or satisfaction, of all of these, of part or all of the securities issued pursuant to initial insurance securitization transactions may not be considered a material change; or (2) a change and substitution in a counterparty to a swap transaction for an existing insurance securitization as allowed pursuant to the provisions of this subchapter may not be considered a material change if the replacement swap counterparty carries a similar or higher rating to its predecessor with two or more nationally recognized rating agencies, or both. (b) No later than five months after the fiscal year end of the SPFC, the SPFC shall file with the SAM an audit by a licensed certified public accounting firm of the financial statements of the SPFC and the trust accounts. (c) Each SPFC shall file by March first, a statement of operations, using either generally accepted accounting principles or, if approved or required by the SAM, statutory accounting principles with useful or necessary modifications or adaptations required or approved or accepted by the SAM for the type of insurance and kinds of insurers to be reported upon, and as supplemented by additional information required by the SAM. The statement of operations must include a statement of income, a balance sheet, and may include a detailed listing of invested assets, including identification of assets held in trust to secure the obligations of the SPFC under the SPFC contract. The SPFC also may include with the filing risk based capital calculations and other adjusted capital calculations to assist the SAM with evaluating the levels of the surplus of the SPFC for the year ending on December thirty first of the previous year. The statements must be prepared on forms required by the SAM. In addition the SAM may require the filing of performance assessments of the SPFC contract. (d) An SPFC shall maintain its records in this Territory and shall make its records available for examination by the SAM at any time. The SPFC shall keep its books and records in such manner that its financial condition, affairs, and operations can be ascertained and so that the SAM may readily verify its financial statements and determine its compliance with this subchapter. (e) All original books, records, documents, accounts, and vouchers must be preserved and kept available in this Territory for the purpose of examination and until authority to destroy or otherwise dispose of the records is secured from the SAM. The original records, however, may be kept and maintained outside this Territory if, according to a plan adopted by the management of the SPFC and approved by the SAM, it maintains suitable records instead of it. The books or records may be photographed, reproduced on film, or stored and reproduced electronically. (f) Nothing contained in this section with respect to an SPFC shall abrogate, limit, or rescind in any way the authority of the Lieutenant Governor.
 (a) At least once every three years, and if the SAM determines it to be prudent, the SAM, or his designee, shall visit each SPFC and thoroughly inspect and examine its affairs to ascertain its financial condition, its ability to fulfill its obligations, and whether it has complied with this subchapter. The SAM upon application, in his discretion, may enlarge the three year period to five years, if an SPFC is subject to a comprehensive annual audit during that period of a scope satisfactory to the SAM by licensed independent auditors approved by the SAM. The expenses and charges of the examination must be paid to the Territory by the company or companies examined, and the Department shall issue its warrants for the proper charges incurred in all examinations. (b) All examination reports, preliminary examination reports or results, working papers, recorded information, documents, and copies of documents produced by, obtained by, or disclosed to the SAM or any other person in the course of an examination made pursuant to the provisions of this section are confidential and are not subject to subpoena and may not be made public by the SAM or an employee or agent of the SAM without the written consent of the company, except to the extent provided in this subsection. Nothing in this subsection prevents the SAM from using this information in furtherance of the SAM's regulatory authority as provided by the provisions of this title. The SAM may grant access to this information to public officers having jurisdiction over the regulation of insurance in another Territory or country, or to law enforcement officers of this Territory, including the Attorney General or Lieutenant Governor or another Territory or agency of the federal government at any time, if the officers receiving the information agree in writing to hold it in a manner consistent with this section.
 (a) At the cessation of business of an SPFC following termination or cancellation of an SPFC contract and the redemption of any related securities issued in connection with them, the authority granted by the SAM expires or, in the case of retiring and surviving protected cells, be modified, and the SPFC is no longer authorized to conduct activities unless and until a new or modified license is issued pursuant to a new filing pursuant to the provisions of section 4 or as agreed by the SAM. (b) The SAM may suspend or revoke the license of an SPFC for: (1) insolvency; (2) failure to meet the provisions of sections 6656, 6658 or 6670 of this subchapter; (3) use of methods that, although not otherwise specifically prohibited by law, nevertheless render its operation detrimental or its condition unsound with respect to the public, the holders of the securities, or policyholders of the SPFC; or (4) failure to otherwise comply in any material respect with applicable laws of this Territory. (c) if the SAM finds, upon examination or other evidence, that an SPFC has committed any of the acts specified in subsection (b), the SAM may impose the penalties provided under this chapter, if the SAM considers it in the best interest of the public, the holders of the securities, and the policyholders of the SPFC. (d) Unless the grounds for suspension or revocation relate only to the financial condition or soundness of the SPFC or to a deficiency in its assets, the SAM shall notify the SPFC not less than thirty days before revoking its authority to do business in this Territory and specify in the notice the particulars of the alleged violation of the law or its organizational documents or grounds for revocation and a proper opportunity must be offered the SPFC to be heard before the Superior Court, or an administrative law court if and when established.
 (a) An SPFC shall pay to the SAM by April 15 of each year, a tax at the rate of four tenths of one percent on the first $20,000,000 and three tenths of one percent on each dollar after the first $20,000,000, subject to a minimum annual tax of $5,000 and a maximum annual tax of $75,000. Taxes are based upon the direct premiums written or contracted for on policies or contracts of insurance, other than reinsurance policies or contracts written by the SPFC, during the year ending December 31 next preceding, after deducting from the direct premiums subject to the tax the amounts paid to insureds as returned premiums which must include dividends on unabsorbed premiums or premium deposits returned or credited to insureds. (b) An SPFC shall pay to the SAM by April 15 of each year, a tax at the rate of two hundred and twenty five thousandths of one percent on the first $20,000,000 of assumed reinsurance premium, and one hundred fifty thousandths of one percent on the next $20,000,000, and fifty thousandths of one percent on the next, $20,000,000 and twenty five thousandths of one percent of each dollar after that, subject to a minimum annual tax of $5,000 and a maximum annual tax of $75,000. However, no reinsurance tax applies to premiums for risks or portions of risks which are subject to taxation on a direct basis, pursuant to subsection (a). A premium tax is not payable in connection with the receipt of assets in exchange for the assumption of loss reserves and other liabilities of another insurer under common ownership and control if the transaction is part of a plan to discontinue the operations of the other insurer and if the intent of the parties to the transaction is to renew or maintain business with the SPFC. (c) Each protected cell of the SPFC must be taxed as if it is a separate and distinct SPFC. (d) In addition to the taxes provided under (a) and (b) of this section, each SPFC must be granted a reduction in the income tax liability shown on its income tax return for each taxable year by 90% for such income that meets the requirements of sections 934 and 937(b) of the Internal Revenue Code of 1986, as amended, and any successor provisions to that Code, and the Treasury Regulations promulgated thereunder, as being from Territory sources or effectively connected with the conduct of a trade or business within the Territory. (e)  (1) Every person who receives a payment or allocation subject to the tax imposed by Sections 704, 871(a)(1), 881, 884, or 1446 of the Internal Revenue Code as applicable in the Territory from an SPFC is exempt from the payment of 100 percent of such tax. (2) An SPFC is exempt from the requirement to withhold tax pursuant to sections 1441, 1442, and 1446 of the Internal Revenue Code as applicable in the Territory to the extent that such payments are exempt from the tax described in paragraph (1). (f) An SPFC is exempt from any other taxes imposed by the Territory, including real property used in the business of the SPFC, gross receipts taxes, and excise taxes.
 An SPFC contract meeting the provisions of this subchapter must be granted credit for reinsurance treatment or otherwise qualifies as an asset or a reduction from liability for reinsurance ceded by a domestic insurer to an SPFC as an assuming insurer for the benefit of the counterparty, provided and only to the extent: (a) of the fair value of the assets held in trust for, or irrevocable letters of credit issued by a bank chartered by this Territory or a member bank of the Federal Reserve System or as approved by the SAM, for the benefit of the counterparty under the SPFC contract; (b) the assets are held in trust pursuant to the provisions of this subchapter; (c) the assets are administered in the manner and pursuant to arrangements as provided in this subchapter; and (d) the assets are held or invested in one or more of the forms allowed in section 6665 of this Title.
 (a) Except as otherwise modified in this section, the terms and conditions set forth in this chapter pertaining to administrative supervision of insurers and the rehabilitation, receiverships, and liquidation of insurers apply in full to SPFCs or each of the SPFC's protected cells, independently, or both, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the SPFC or another protected cell. (b) Notwithstanding any other provision of this chapter, and without causing or otherwise affecting the conservation or rehabilitation of an otherwise solvent protected cell of an SPFC and subject to the provisions of subsection (g)(5) of this section, the SAM may apply by petition to the Superior Court for an order authorizing the SAM to conserve, rehabilitate, or liquidate an SPFC domiciled in this Territory on one or more of the following grounds: (1) there has been embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the SPFC intended to be used to pay amounts owed to the counterparty or the holders of SPFC securities; or (2) the SPFC is insolvent and the holders of a majority in outstanding principal amount of each class of SPFC securities request or consent to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter. (c) Notwithstanding the provisions of this chapter, the SAM may apply by petition to the Superior Court for an order authorizing the SAM to conserve, rehabilitate, or liquidate one or more of an SPFC's protected cells, independently, without causing or otherwise effecting a conservation, rehabilitation, receivership, or liquidation of the SPFC generally or another of its protected cells, on one or more of the following grounds: (1) there has been embezzlement, wrongful sequestration, dissipation, or diversion of the assets of the SPFC attributable to the affected protected cell or cells intended to be used to pay amounts owed to the counterparty or the holders of SPFC securities of the affected protected cell or cells; or (2) the affected protected cell is insolvent and the holders of a majority in outstanding principal amount of each class of SPFC securities attributable to that particular protected cell request or consent to conservation, rehabilitation, or liquidation pursuant to the provisions of this subchapter. (d) The court may not grant relief provided in subsection (b) or subsection (c) unless, after notice and a hearing, the SAM, who has the burden of proof, establishes by clear and convincing evidence that relief must be granted. The court's order may be made in respect of one or more protected cells by name, rather than the SPFC generally. (e) Notwithstanding another provision in this chapter, regulations promulgated under this chapter, or another applicable law or regulation, upon any order of conservation, rehabilitation, or liquidation of an SPFC, or one or more of the SPFC's protected cells, the receiver shall manage the assets and liabilities of the SPFC pursuant to the provisions of this subchapter. The receiver shall ensure that the assets linked to one protected cell are not applied to the liabilities linked to another protected cell or to the SPFC generally, unless an asset or liability is linked to more than one protected cell, in which case the receiver shall deal with the asset or liability in accordance with the terms of any relevant governing instrument or contract. (f) With respect to amounts recoverable under an SPFC contract, the amount recoverable by the receiver must not be reduced or diminished as a result of the entry of an order of conservation, rehabilitation, or liquidation with respect to the counterparty, notwithstanding another provision in the contracts or other documentation governing the SPFC insurance securitization. (g) Notwithstanding the provisions of this chapter or other laws of this Territory: (1) an application or petition, or a temporary restraining order or injunction issued pursuant to the provisions of this chapter, with respect to a counterparty does not prohibit the transaction of a business by an SPFC, including any payment by an SPFC made pursuant to an SPFC security, or any action or proceeding against an SPFC or its assets; (2) the commencement of a summary proceeding or other interim proceeding commenced before a formal delinquency proceeding with respect to an SPFC, and any order issued by the court does not prohibit the payment by an SPFC made pursuant to an SPFC security or SPFC contract or the SPFC from taking any action required to make the payment; (3) a receiver of a counterparty may not void a non-fraudulent transfer by a counterparty to an SPFC of money or other property made pursuant to an SPFC contract; (4) a receiver of an SPFC may not void a non-fraudulent transfer by the SPFC of money or other property made to a counterparty pursuant to an SPFC contract or made to or for the benefit of any holder of an SPFC security on account of the SPFC security; and (5) the SAM may not seek to have an SPFC with protected cells declared insolvent as long as at least one of the SPFC's protected cells remains solvent, and in the case of such an insolvency, the receiver shall handle SPFC's assets in compliance with subsection (e) and other laws of this Territory. (h) Subsection (g) does not prohibit the SAM from taking any action permitted under this chapter with respect only to the conservation or rehabilitation of an SPFC with protected cell or cells, if the SAM would have had sufficient grounds to seek to declare the SPFC insolvent; subject to and without otherwise affecting the provisions of paragraph (5) of subsection (g). In this case, with respect to the solvent protected cell or cells, the SAM may not prohibit payments made by the SPFC pursuant to the SPFC security, SPFC contract, or otherwise made under the insurance securitization transaction that are attributable to these protected cell or cells or prohibit the SPFC from taking any action required to make these payments. (i) With the exception of the fulfillment of the obligations under an SPFC contract, and notwithstanding another provision of this subchapter or other laws of this Territory, the assets of an SPFC, including assets held in trust, must not be consolidated with or included in the Territory of a counterparty in any delinquency proceeding against the counterparty pursuant to the provisions of this subchapter for any purpose including, without limitation, distribution to creditors of the counterparty.
 Information submitted pursuant to this subchapter is confidential and may not be made public by the SAM or an agent or employee of the SAM without the prior written consent of the SPFC, except that: (a) information submitted pursuant to this subchapter is discoverable by a party in a civil action or contested case to which the submitting SPFC is a party, upon a specific finding by the court that: (1) the SPFC is a necessary party to the action and not joined only for the purposes of evading the confidentiality provisions of this subchapter; (2) the party seeking the information demonstrates by a clear and convincing standard that the information sought is relevant, material to, and necessary for the prosecution or defense of the claim asserted in the action; and (3) the information sought is unavailable from other non-confidential sources. (b) The SAM may disclose the information to the public officer having jurisdiction over the regulation of insurance in another territory or state if: (1) the public official agrees in writing to maintain the confidentiality of the information; and (2) the laws of the territory or state in which the public official serves require the information to be confidential.
 (a) A contested case brought by a third party based on a decision of the SAM pursuant to this subchapter is governed by applicable law of the Territory except that the third party shall: (1) prove its case by a clear and convincing evidence standard; (2) demonstrate irreparable harm to the SPFC or its counterparty, or both; (3) show that there is no other adequate remedy at law; and (4) post a bond of sufficient surety to protect the interests of the holders of the SPFC securities and policyholders, but it may not be less than fifteen percent of the total amount of the securitized transaction. (b) If the SAM reverses, amends, or modifies a license previously issued to an SPFC or an order made in connection with a license previously issued to an SPFC, the action must comply with the standards and criteria provided in subsection (a), unless the action in reversing, amending, or modifying the license is in conformance with the provisions of section 19. (c) A creditor of a policyholder or a participant of a captive insurance company or segregated account, and a creditor of an affiliated person of any such insurance company or segregated account, may not set aside a transfer of funds by a policyholder or participant to the insurance company in payment of one or more premiums charged on a contract of insurance or participant contract issued by such company or segregated account, unless: (1) It is determined, in a final order of the Superior Court, that the payment of the premiums constitutes a fraudulent transfer with respect to such creditor under the laws of the Territory; and (2) Except in cases in which actual fraudulent intent is shown in a hearing before the Superior Court, only to the extent, if any, the amount of such payment is determined by the Superior Court to exceed the market value of the insurance protection afforded to the policyholder or participant under such contract, as at the time of its issuance. (d) A policy of insurance or participant contract issued by a captive insurance company or segregated account, which policy or contract is expressly stated to be nonassignable: (1) is void in the event of an attempted assignment; and (2) is unenforceable by any person other than the original policyholder or contract participant and his, her or its transferees by operation of the law of the Territory and legal representatives. (e) For the purposes of this section, transferees by operation of the law of the Territory and legal representatives do not include successors by merger or consolidation, successors to a policyholder or participant following a change in control of the policyholder or participant, or trustees in bankruptcy, receivers, liquidators, creditors or committees of creditors. (f) For purposes of this section, creditor includes a person to whom an obligation is owed and any person who alleges or pursues a claim or cause of action on behalf of or in the name of a creditor. (g) Where a captive insurance company has purchased reinsurance on any of its obligations under a contract of insurance, the proceeds of the reinsurance must be held or applied to provide [sic]
 The SAM may, in accordance with Title 3, Chapter 35, Virgin Islands Code, promulgate regulations necessary to effectuate the purposes of this subchapter. Regulations promulgated pursuant to this section do not affect an SPFC insurance securitization in effect at the time of the promulgation.
 (a) The Commissioner may hold a hearing for any purpose within the scope of this title as he may deem necessary. He shall hold a hearing (1) if required by any provision of this title; or (2) upon written demand for a hearing made by any person aggrieved by any act, threatened act, or failure of the Commissioner to act, if such failure is deemed an act under any provision of this title, or by any report, promulgation, or order of the Commissioner other than an order on a hearing of which such person was given actual notice or at which such person appeared as a party, or order pursuant to the order on such hearing. (3) Upon written demand for a hearing by the insured when there is a dispute concerning the settlement of an insurance claim; Provided, That prior to any hearing the insurer shall pay to the insured the undisputed amount of the insurance claim. (b) Any such demand for a hearing shall specify in what respects such person is so aggrieved and the grounds to be relied upon as basis for the relief to be demanded at the hearing. (c) The Commissioner shall hold such hearing demanded within 30 days after his receipt of the demand, unless postponed by mutual consent.
 (a) Such demand for a hearing received by the Commissioner prior to the effective date of action taken or proposed to be taken by him shall stay such action pending the hearing, except as to action taken or proposed (1) under an order on hearing; or (2) under an order pursuant to an order on hearing; or (3) under an order to make good an impairment of the assets of an insurer. (b) In any case where an automatic stay is not provided for, and if the Commissioner after written request therefor fails to grant a stay, the person aggrieved thereby may apply to a court of competent jurisdiction for a stay of the Commissioner's action.
 The hearing shall be held at the place designated by the Commissioner, and at his discretion it may be open to the public.
 (a) The Commissioner shall, not less than ten days in advance, give notice to each person to be affected by the hearing, of the time and place thereof and specifying the matters to be considered at the hearing. (b) If under subsection (a) of this section notice of a hearing would be required to be given to more than 100 persons, in lieu of the notice provided for in such section and for the purposes of section 101 of this title only, the Commissioner may give notice of the hearing by publishing the notice in the newspapers at least once each week during the three weeks immediately preceding the week in which the hearing is to be held. (c) Any such published notice shall state the time and place of the hearing and shall specify the matters to be considered thereat.
 If any person is entitled to a hearing by any provision of this title before any proposed action is taken, the notice of the proposed action may be in the form of a notice to show cause stating that the proposed action may be taken unless such person shows cause at a hearing to be held as specified in the notice, why the proposed action should not be taken, and stating the basis of the proposed action.
 The Commissioner may adjourn any hearing from time to time and from place to place without other notice of the adjourned hearing than announcement thereof at the hearing.
 The validity of any hearing held in accordance with the notice thereof shall not be affected by failure of any person to attend or to remain in attendance.
 (a) The Commissioner shall preside at the hearing and shall keep a true and concise record of the proceedings thereat. Formal rules of pleading or evidence need not be observed in the hearing. (b) At the expense of and at the written request reasonably made by any person affected by the hearing, the Commissioner shall cause a full stenographic record of the proceedings to be made by a competent stenographic reporter and if transcribed such record shall be made a part of the Commissioner's record of the hearing. (c) The Commissioner shall allow any person affected by the hearing to be present during the giving of all testimony and shall allow him a reasonable opportunity to inspect all documentary evidence, to examine witnesses, and to present evidence in support of his interest. Upon good cause shown, the Commissioner may permit any person to intervene, appear, and be heard at the hearing. (d) Any person heard shall make full disclosure of facts pertinent to the subject of inquiry as requested by the Commissioner or by any person affected by the hearing.
 (a) Within 30 days after the termination of a hearing the Commissioner shall make his order thereon and shall, subject to subsection (d) of this section, give a copy of the order to each person to whom notice of the hearing was given or required to be given. (b) The order shall contain (1) a concise statement of the action taken; (2) the effective date of such action; (3) a designation of the provisions of this title pursuant to which the action is taken; (4) a concise statement of the findings of the Commissioner in support of the action. (c) An order on hearing may confirm, modify, or nullify action taken under an existing order, or may constitute the taking of any new action coming within the scope of the notice of such hearing. (d) If notice of such hearing was given by publication as provided for in section 154 of this title the Commissioner may publish the order on hearing once each week for three successive weeks in the same newspapers in which such notice was published, the first such publication to be made on the date of the order. Such publication of the order on hearing shall be in lieu of the requirement that a copy of such order be given to each person as provided in subsection (a) of this section.
 (a) Any person aggrieved on account of any official action or threatened action of the Commissioner, or of his failure to act if such failure is deemed to constitute an act under any provision of this title, may demand a hearing thereon as provided in section 151 of this title and may appeal from the Commissioner's order made pursuant thereto. Such appeal shall be taken to any court of appropriate jurisdiction and only from an order refusing a hearing or an order on hearing. An appeal may be so taken by any person aggrieved by such order refusing a hearing or by such order on hearing. (b) The appeal must be taken within 30 days after the order complained of was given by the Commissioner, or, if the order was published as provided in section 159 of this title within 30 days after the date of the last such publication. If not so taken, the right to appeal from or restrain action under the order shall conclusively be deemed to have been waived.
 The appeal shall be taken by filing with the Clerk of any court of appropriate jurisdiction a petition for a review of the Commissioner's order, containing a copy of the order and a statement of the particulars in which it is claimed that the order is in error and a statement of the relief prayed for, and by serving upon the Commissioner a copy of the petition, certified by the clerk of the court to be a true copy.
 Upon being served with a copy of the petition for review of an order on hearing, the Commissioner shall forthwith prepare and file with the clerk of the court a true and complete transcript of his record of the hearing on which the order appealed from was made. The cost of the transcript may be included in the costs allowed by the court.
 The court shall give precedence to and may summarily hear and determine the appeal. The court shall hear the appeal upon the transcript of the record of the Commissioner's hearing and on such additional proper evidence as may be offered by any party. After considering the evidence the court may affirm, modify, or set aside the order appealed from. Costs shall be awarded as in civil cases.
 (a) The taking of an appeal shall not stay any action taken or proposed to be taken by the Commissioner under the order appealed from unless a stay is granted by the court at a hearing held as part of the proceedings on appeal. (b) A stay shall not be granted by the court in any case where the granting of a stay would tend to injure the public interest. In granting a stay, the court may require of the person taking the appeal such security or other conditions as it deems proper. (c) If the order appealed from is one suspending, revoking, or refusing to renew an agent's, broker's, solicitor's or adjuster's license, the appellant by filing a bond with the clerk of the court, subject to approval of the court, in the sum of $500, conditioned to pay all costs that may be awarded against him, may, if filed prior to the effective date of such order, supersede the order appealed from until the final determination of the appeal.
 For the purposes of this title (1) a domestic insurer is one formed under the laws of this territory; (2) a foreign insurer is an insurer which is organized under the laws of the United States, or of a state or territory of the United States other than this territory, or of the District of Columbia or the Commonwealth of Puerto Rico; (3) an alien insurer is one formed under the laws of a nation other than the United States.
 (a) No person shall act as an insurer and no insurer shall transact insurance in this territory other than as authorized by a certificate of authority issued to it by the Commissioner and then in force; except as to such transactions as are expressly otherwise provided for in this title. (b) Every certificate of authority shall specify the name of the insurer, the location of its principal office, and the kind or kinds of insurance it is authorized to transact in this territory.
 To qualify for and hold a certificate of authority an insurer must  (1) be a stock or mutual insurer of the same general type as may be formed as a domestic insurer under the provisions of chapter 11 of this title; or be a Lloyd's Insurer; (2) have capital funds as required by this title, based upon the type and domicile of the insurer and the kinds of insurance proposed to be transacted; (3) transact or propose to transact in this territory insurances authorized by its charter, and only such insurance as meets the standards and requirements of this title; and (4) fully comply with, and qualify according to, the other provisions of this title.
 Charter means articles of incorporation, articles of agreement, articles of association of a corporation, or other basic constituent document of a corporation.
 Capital funds means the excess of the assets of an insurer over its liabilities. Capital stock, if any, shall not be deemed to be a liability for the purposes of this section.
 To apply for an original certificate of authority an insurer shall: (1) file with the Commissioner its request therefor, showing (A) its name, home office location, type of insurer, organization date, and state or country of its domicile; (B) the kinds of insurance it proposes to transact; and (C) additional information as the Commissioner may reasonably require. (2) file with the Commissioner (A) a copy of its charter or certificate of incorporation, as amended, certified, if a foreign or alien insurer, by the proper public officer of the state or country of domicile; (B) a copy of its bylaws, as amended, certified by its proper officer; (C) a statement of its financial condition, management, and affairs on a form satisfactory to or furnished by the Commissioner; (D) an appointment of the Commissioner as its attorney to receive service of legal process; (E) if a foreign or alien insurer, a certificate from the proper public official of its state or country of domicile showing that it is duly organized and is authorized to transact the kinds of insurance proposed to be transacted; and (F) other documents or stipulations as the Commissioner may reasonably require to evidence compliance with the provisions of this title. (3) submit to a personal examination of their affairs by the Commissioner. The examination shall include a background of the business dealings of the insurer, the insurer's organizers, principals, Board of Directors and corporate officers. The Commissioner may waive the examination if there is filed with him a certified copy of an examination made within one year immediately preceding the insurer's application for a license to do business in the Virgin Islands by some state insurance department or other insurance certification authority. (4) deposit with the Commissioner the fees required by this title to be paid for filing the accompanying documents, and for the certificate of authority, if granted.
 (a) All foreign and alien insurers shall file with the Commissioner as a condition of doing business in the Virgin Islands, and for the protection of policyholders in the Virgin Islands, the sum of not less than five hundred thousand dollars ($500,000) which may be in the form of a financial guarantee bond, certificate of deposit, letter of credit or U.S. Treasury Notes. (b) The Commissioner of Insurance shall deposit with the Commissioner of Finance in a special account within the Department of Finance the amount required pursuant to subsection (a) of this section for the investment of domestic insurance companies. (c) The amounts required to be deposited pursuant to subsection (a) of this section shall not be subject to withdrawal until all liabilities secured by the deposit have been fully paid or have been fully reinsured with insurers authorized to transact the same kind of business in the states or foreign countries where the liabilities exist. (d) The requirements of this section shall take effect 180 days after enactment of this act. (e) All domestic insurers shall file with the Commissioner for the protection of policyholders in the Virgin Islands a good and sufficient bond signed by the proper official of the insurer as principal with one or more sureties as required and to be approved by the Commissioner and running to the Commissioner and his successors in office, in a sum not less than $500,000 in the form of a U.S. treasury bond, certificate of deposit or a letter of credit.
 (a) Each bond filed pursuant to section 207 of this chapter shall be with condition that the surety or sureties on the bond shall be answerable to the amount of the bond for all judgments, decrees, or orders given, made or rendered against the principal on the bond by any court of the Virgin Islands for the payment of money. (b) In the case of any breach of a condition of any bond filed pursuant to section 207 of this chapter, the Commissioner may, and upon demand and receipt of satisfactory assurance for the payment of costs shall, enforce the bond either in his own name or in the name or names of any persons as obligees therein by appropriate proceedings in any court of competent jurisdiction for the use and benefit of any person injured by the breach. (c) The surety or sureties on any bond filed pursuant to said section 207 may withdraw from the same by giving the Commissioner written notice not less than ninety (90) days prior to the date on which the then existing certificate of authority of the insurer is to expire. Such surety or sureties shall, however, remain liable on the bond for all judgments, decrees, or orders given, made, or rendered against the principal, based on obligations incurred during the period of suretyship. (d) The securities filed or deposited pursuant to said section 207 shall always be in such amount that the market value equals or exceeds either the sum of $20,000 or the sum of $100,000, as required.
 (a) If the Commissioner finds that an insurer has met the requirements for and is fully entitled thereto under this title, he shall issue to it a proper certificate of authority. If the Commissioner does not so find, the authority shall be refused within a reasonable length of time following completion by the insurer of the application therefor. (b) As a condition of the issuance of a certificate of authority, the Commissioner shall require that each insurer agree in writing to provide to any of its policyholders, within 30 days of the receipt of a request by such policyholder, a written summary of the terms of the policy. Such summary shall be in simple terms using language understandable to a person not trained in the law nor skilled in the interpretation of contracts. Such summary shall not be used in a court of law to limit or expand the terms of the policy or alter in any way the relationship of the parties under the policy. The Commissioner shall revoke the certificate of authority of any insurer who fails to comply with the requirements of this subsection.
 (a) All certificates of authority shall expire on the 31st day of December next succeeding the date of issue or renewal, and if the insurer qualifies therefor its certificate shall be renewed annually for a period of not more than one year. (b) The Commissioner may amend a certificate of authority at any time in accordance with changes in the insurer's charter or insuring powers.
 The Commissioner shall refuse to renew or shall revoke or suspend an insurer's certificate of authority, in addition to other grounds therefor in this title, if the insurer (1) is a foreign or alien insurer and no longer qualifies or meets the requirements of the authority; or, is a domestic mutual insurer, and fails to make good a deficiency of assets as required by the Commissioner; (2) is a domestic stock insurer and has assets less in amount than its liabilities, including its capital stock as a liability, and has failed to make good such deficiency as required by the Commissioner; (3) knowingly exceeds its charter powers or its certificate of authority.
 The Commissioner may refuse, suspend, or revoke an insurer's certificate of authority, in addition to other grounds therefor in this title, if the insurer (1) fails to comply with any provision of this title other than those for violation of which refusal, suspension, or revocation is mandatory, or fails to comply with any proper order of the Commissioner; (2) is found by the Commissioner to be in such condition that its further transaction of insurance in this territory would be hazardous to policyholders and the people in this territory; (3) refuses to remove or discharge a director or officer who has been convicted of any crime involving fraud, dishonesty, or like moral turpitude; (4) usually compels claimants under policies either to accept less than the amount due them or to bring suit against it to secure full payment of the amount due; (5) is affiliated with and under the same general management, or interlocking directorate, or ownership as another insurer which transacts insurance in this territory without having a certificate of authority therefor, except as permitted by this title; (6) refuses to be examined, or if its directors, officers, employees or representatives refuse to submit to examination or to produce its accounts, records, and files for examination by the Commissioner when required, or refuse to perform any legal obligation relative to the examination; or (7) fails to pay any final judgment rendered against it in this territory upon any policy, bond, recognizance, or undertaking issued or guaranteed by it, within 30 days after the judgment becomes final or within 30 days after the time for taking an appeal has expired, or within 30 days after dismissal of an appeal before final determination, whichever date is the later.
 The Commissioner shall give an insurer notice of his intention to suspend, revoke, or refuse to renew its certificate of authority not less than ten days before the order of suspension, revocation or refusal is to become effective; except that no advance notice of intention is required where the order results from a domestic insurer's failure to make good a deficiency of assets as required by the Commissioner.
 The Commissioner shall not suspend an insurer's certificate of authority for a period in excess of one year, and he shall state in his order of suspension the period during which it shall be effective.
 No insurer whose certificate of authority has been suspended, revoked, or refused shall subsequently be authorized unless the grounds for such suspension, revocation, or refusal no longer exist and the insurer is otherwise fully qualified.
 Upon the suspension, revocation, or refusal of an insurer's certificate of authority, the Commissioner shall give notice thereof to the insurer and shall likewise suspend, revoke or refuse the authority of its agents to represent it in this territory and give notice thereof to the agents.
 (a) Every insurer shall conduct its business in its own legal name. (b) No insurer shall assume or use a name deceptively similar to that of any other authorized insurer.
 (a) Before a certificate of authority to transact business in the Virgin Islands is issued to any domestic, foreign or alien insurance company it must file with the Commissioner a resolution adopted by its board of directors consenting that service of process upon the Commissioner in any action or proceeding against the company, brought or pending in the Virgin Islands upon any cause of action arising in or growing out of business transacted in the Virgin Islands shall be valid service upon the company, and the consent shall be irrevocable, so long as a policy of insurance of such company shall remain in force in the Virgin Islands or any loss remains unpaid therein. (b) All domestic, foreign or alien insurance companies transacting business in the Virgin Islands shall at all times have one or more known places of business therein and a designated and authorized agent present upon whom process may be served in all cases, and the name and business address of the agent shall be filed in the Office of the Commissioner. Process may be served on the designated agent until such time as the agent's authority shall be revoked by a notice in writing, filed in the Office of the Commissioner, by personal service on the agent or by leaving a certified copy of the process at the business address of the agent as filed in the Office of the Commissioner. (c) Service may be had on either the authorized agent or the Commissioner.
 (a) Every process left with the Commissioner shall be in triplicate. He shall return the original copy with his certificate of service which shall be accepted as proof of service of process. One copy shall be forwarded at once by mail to the company addressed to its principal office and the remaining copy he shall file in his own office. For the purpose of fixing the location of the principal office within the meaning of this section the company shall file with the Commissioner a written statement setting forth the location and post-office address of its principal office and that location and post-office address shall continue to be the location and address of the company for the purpose of this section until changed by a similar statement in writing and filed with the Commissioner. (b) Where service is had on the Commissioner, no proceeding shall be had within 60 days after service.
 (a) No insurer shall issue an insurance contract covering a subject of insurance resident, located, or to be performed in this territory unless the insurance contract is countersigned by its licensed agent, or manager or general agent, except as provided in section 221 of this title. The Commissioner may suspend or revoke the certificate of authority of any insurer violating this provision. (b) An agent, general agent or manager shall not sign or countersign any insurance contract in blank. The Commissioner may suspend or revoke the license of any agent or general agent violating this provision. (c) Such violation shall not invalidate any insurance contract.
 The provisions of section 220 of this title shall not apply to reinsurance contracts between insurers, to life or disability insurances, or to insurance contracts (1) issued as a surplus line under section 653 of this title, or exempted under section 666 of this title; (2) covering the rolling stock, vessels, or aircraft of any common carrier in interstate or foreign commerce, or any vehicle principally garaged and used in a state, or covering any liability or other risks incident to the ownership, maintenance, or operation thereof; or (3) covering any property in course of transportation interstate or in foreign trade, or any liability or risk incident thereto.
 (a) Each authorized insurer shall annually, before the 31st day of March, file with the Commissioner a true statement of its financial condition, transactions, and affairs as at the 31st day of December preceding. The statement shall be on forms and shall contain information as required by this title and by the Commissioner, and shall be verified by the oaths of at least two of the insurer's principal officers. Statements filed by liability insurers shall include pertinent information with regard to (i) the total number of the liability policies sold by the insurer in the Territory; (ii) the total number of liability policy claims made against the insurer; and (iii) the total amount of liability policy claims paid by the insurer. All annual and quarterly statements filed pursuant to this section must be prepared in accordance with the National Association of Insurance Commissioners (NAIC) Annual Statement Instructions and follow those accounting procedures and practices that are prescribed in the NAICs Accounting Practices and Procedures Manual and any subsequent revisions thereto that are adopted for use by the Commissioner by rule, administrative order or bulletin. (b) All authorized insurers reporting to the Commissioner in accordance with the requirements of this section shall file with the Division the appropriate NAIC Annual Statement Blank, which must be prepared in accordance with the NAIC Annual Statement Instructions and follow those accounting procedures and practices prescribed by the NAIC Accounting Practices and Procedures Manual. (c) The Commissioner shall annually during November and December furnish each such insurer duplicate copies of annual statement forms as next required to be filed. The statement forms shall be in general form and context as approved by the National Association of Insurance Commissioners for the kinds of insurance to be reported upon, and as supplemented for additional information required by the Commissioner. (d) The annual statement of an alien insurer shall relate only to its transaction and affairs in the United States unless the Commissioner requires otherwise. The statement shall be verified by the insurer's United States manager or by its officers duly authorized. (e) The Commissioner may suspend, revoke or refuse to renew the Certificate of Authority of any insurer failing to file its annual statement when due or during any extension of time which the Commissioner, for good cause, may have granted.
 Every insurer shall keep full and adequate accounts and records of its assets, obligations, transactions, and affairs.
 (a) No insurer shall withdraw from this territory until its direct liability to its policyholders and obligees under all its insurance contracts then in force in this territory has been assumed by another authorized insurer under an agreement approved by the Commissioner. In the case of a life insurer, its liability pursuant to contracts issued in this territory in settlement of proceeds under its policies shall likewise be so assumed. (b) The Commissioner may waive this requirement if he finds upon examination that a withdrawing insurer is then fully solvent and that the protection to be given its policyholders in this territory will not be impaired by the waiver. (c) The assuming insurer shall within a reasonable time replace the assumed insurance contracts with its own, or by endorsement thereon acknowledge its liability thereunder.
 No credit shall be allowed to any insurer, as an asset or as a deduction from liability for reinsurance ceded to an alien insurer, other than under a contract of ocean marine insurance, covering a subject of insurance resident, located, or to be performed in this territory unless the alien insurer (1) is authorized to transact insurance in a state of the United States; and (2) maintains an adequate guaranty deposit in a state of the United States for the protection of its insurance obligees in the United States; or (3) has an attorney in fact resident in the United States upon whom service of legal process may be made.
 (a) An insurer appointing any person as its general agent or manager to represent it as such in this territory shall file notice of the appointment with the Commissioner on forms prescribed and furnished by the Commissioner. (b) Any such general agent or manager shall have such authority, consistent with this title, as may be conferred by the insurer. A general agent resident in this territory and licensed, as in this section provided, may exercise the powers conferred by this title upon agents licensed for the kinds of insurance which the general agent is authorized to transact for the insurer so appointing him. (c) The appointment of a resident general agent shall not be effective unless the person so appointed is licensed as the general agent of such insurer by the Commissioner upon application and payment of the fee therefor as provided in section 601 of this title. (d) Every such license shall expire as at close of business on the 31st day of December next following the date of issue, and may be renewed for an additional year upon application and payment of the fee therefor. (e) The Commissioner may deny, suspend, or revoke any such license for any cause specified in section 789 of this title and in the manner provided in section 790 of this title.
 (a) Each authorized insurer shall promptly report to the Commissioner, upon forms as prescribed and furnished by him, each fire loss of property in this territory reported to it and of undetermined origin. (b) As may be requested by the Commissioner, each such insurer shall likewise report to him upon claims paid by it for loss or damage by fire in this territory.
 (a) Effective 90 days after February 24, 1984, insurance companies doing business in the Virgin Islands shall have thirty (30) calendar days from the date on which an agreement to settle is signed or a proof of claim has been filed, whichever comes last, to make payment of all sums due under an insurance policy. (b) In cases where suit is brought by the insured to recover the payment due under the policy, interest at the prevailing prime rate applicable on the date of judgment, under section 951 of Title 11, Virgin Islands Code, from the date of loss to the date of judgment, shall be added to the amount of the judgment so as to compensate the insured for delay in payment. Nothing in this subsection shall be construed to increase or limit the amount of interest payable on money judgments and decrees pursuant to section 426 of Title 5, Virgin Islands Code.
 (a) Any insurer providing a person with motor vehicle insurance coverage shall permit the person to pay any premium with respect to such coverage in semi-annual payments. (b) Any insurer who fails to comply with subsection (a) of this section may, upon complaint to the Commissioner of Insurance, have its license to sell insurance suspended for not less than ninety (90) days.
 (a) Each domestic, foreign and alien insurer who is authorized to transact insurance in the Territory shall on or before March 1 of each year, file with the NAIC, a copy of its annual statement convention blank, along with such additional filings, including any quarterly statement filings, as prescribed by the Commissioner for the preceding year. The information filed with the NAIC must be in the same format and scope as that required by the Commissioner and must include the signed jurat page and the actuarial certification. Any amendments and addenda to the annual statement or quarterly statement filings subsequently filed with the Commissioner must also be filed with the NAIC. Each insurer shall concurrently provide the NAIC with a copy of the electronic filing containing its annual and quarterly statements. (b) Foreign insurers that are domiciled in a state which has a law substantially similar to subsection (a) of this section shall be deemed in compliance with this section.
 In the absence of actual malice, members of the NAIC, their duly authorized committees, sub-committees, and task forces, their delegates, NAIC employees, and all others charged with the responsibility of collecting, reviewing, analyzing and disseminating the information developed from the filing of the annual statement convention blanks shall be acting as agents of the Commissioner under the authority of this chapter and shall not be subject to civil liability for libel, slander or any other cause of action by virtue of their collection, review, and analysis or dissemination of the data and information collected from the filings required hereunder.
 All financial analysis ratios and examination synopses concerning insurance companies that are submitted to the Division by the NAIC Insurance Regulatory Information System are confidential and may not be disclosed by the Insurance Division.