dcrodriguez/Code-of-Virginia huggingface dataset:
Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1509. Powers of Commission when authorized to rehabilitate or liquidate insurers by court order; disbursement of available assets to an association, etc.
A. Whenever the Commission is authorized by order of the Circuit Court of the City of Richmond to rehabilitate or liquidate any domestic insurer other than an insurer writing exclusively title, fidelity and surety, credit or ocean marine insurance, the Commission shall disburse the assets as they become available to an association. Disbursal shall not be made until an application has been filed with the Commission by an association for an insolvent insurer's available assets.

B. The Commission shall disburse the assets of an insolvent insurer as they become available in the following manner:

1. Pay, after reserving for the payment of the costs and expenses of administration, according to the following priorities: (i) claims of secured creditors with a perfected security interest not voidable under § 38.2-1513 to the extent of the value of their security, (ii) claims of the associations for "covered claims" and "contractual obligations" as defined in §§ 38.2-1603 and 38.2-1701 and claims of other policyholders arising out of insurance contracts apportioned without preference, (iii) taxes owed to the United States and other debts owed to any person, including the United States, which by the laws of the United States are entitled to priority, (iv) wages entitled to priority as provided in § 38.2-1514, and (v) other creditors; and

2. Equitably allocate disbursements to each of the entitled associations; and

3. Secure an agreement from each of the entitled associations requiring the return to the Commission of any assets previously disbursed to the association required to pay claims entitled to priority in subdivision 1 of this subsection. No bond shall be required of any entitled association; and

4. Require a full report to be made by the association to the Commission accounting for all assets disbursed to the association, all disbursements made from these assets, any interest earned on these assets and any other matter as the Commission may require.

C. The Commission shall provide for disbursements to the association in an amount estimated at least equal to the claim payments made or to be made by the association for which the association could assert a claim against the Commission. In addition, the Commission shall provide that if the assets available for disbursement do not equal or exceed the amount of claim payments made or to be made by the associations, then disbursements shall be in the amount of available assets.

D. The Commission shall notify the affected associations and the commissioners of insurance in the other states of any disbursement made according to this section. The notice shall be deemed given when sent by certified mail at least thirty days prior to disbursement.

1978, c. 696, § 38.1-133.1; 1979, c. 385; 1986, c. 562; 1996, c. 81.
Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1510. Commission may appoint assistants in connection with rehabilitation or liquidation.
The Commission shall have power to appoint one or more special deputies as its agent and to employ the counsel, clerks, and assistants considered necessary to efficiently conduct the rehabilitation or liquidation. The Commission may delegate to its agent any of its powers which are necessary to carry out the rehabilitation or liquidation. The compensation of the special deputy commissioners, counsel, clerks and assistants, and all expenses relating to the rehabilitation or liquidation of any insurer shall be set by the Commission and upon certification by the Commission be paid out of the insurer's assets.

Code 1950, § 38-141; 1952, c. 317, § 38.1-134; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1511. Borrowing on pledge of assets.
For the purpose of facilitating the delinquency proceeding of an insurer, the Commission, or a receiver other than the Commission with the approval of the court, may borrow money and execute, acknowledge, and deliver notes or other evidences of indebtedness and secure the repayment by mortgage, pledge, assignment, transfer in trust, or hypothecation of any or all of the property, real, personal or mixed, of the insurer. The Commission, or a receiver other than the Commission with the approval of the court, shall have power to take any action necessary and proper to consummate any loans and to provide for repayment. No note or other evidence of indebtedness made or executed by the receiver shall impose upon the receiver any liability except with respect to the assets and other property of the insurer.

1952, c. 317, § 38.1-135; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1512. Rights and liabilities fixed upon liquidation.
The rights and liabilities of an insurer and of its creditors, policyholders, stockholders, members, and all other persons interested in the property and assets of the insurer, shall be fixed as of the date of the entry of the order directing the liquidation of the insurer unless otherwise provided by law. The rights of claimants holding contingent claims on that date shall be determined by this chapter.

1952, c. 317, § 38.1-136; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1513. Voidable transfers.
A. Any transfer of or lien upon the property of an insurer that is made or created within four months before the institution of delinquency proceedings under this chapter shall be voidable if (i) done with the intent of giving or enabling any creditor to obtain a greater percentage of payment of the debt than any other creditor of the same class and (ii) the creditor accepting the transfer has reasonable cause to believe that a preference will occur.

B. Every director, officer, employee, stockholder, member, subscriber, and other person acting on behalf of an insurer who is involved in any act described in subsection A of this section, and every person receiving property of an insurer as a result of this act, shall be personally liable and held accountable to the receiver.

C. A receiver in any proceeding under this chapter may avoid any transfer of or lien upon the property of an insurer that any creditor, stockholder, subscriber or member of the insurer might have avoided. The receiver may also recover the transferred property unless the person was a valid holder for value before the date of the institution of delinquency proceedings under this chapter. The property or its value may be recovered from anyone who has received it except as a valid holder for value as specified in this subsection.

1952, c. 317, § 38.1-137; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1514. Priority of claims for wages.
Before the payment of any other debt or claim, other than those for which a higher priority is established in § 38.2-1509, compensation shall be paid to employees other than officers of an insurer for services rendered within three months before the commencement of the delinquency proceedings. The payment shall not exceed $1,000 for each employee. At the discretion of the Commission, or a receiver other than the Commission with the approval of the court, payment may be made as soon as practicable. This priority shall be superior to any other similar priority authorized by law regarding wages or compensation of the employees.

Nothing in this section shall prohibit a receiver from allocating sufficient funds to cover the expenses of administration.

1952, c. 317, § 38.1-138; 1986, c. 562; 1996, c. 81.
Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1515. Mutual debts or credits, how treated.
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, the 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 person where:

1. The obligation of the insurer to the person would not entitle him at the date of the entry of any rehabilitation or liquidation order to share as a claimant in the assets of the insurer;

2. The obligation of the insurer to the person was purchased by or transferred to the person with a view of its being used as an offset; or

3. The obligation of the person is to pay (i) an assessment levied against the members of a mutual insurer or the subscribers of a reciprocal insurer, or (ii) a balance upon a subscription to the capital stock of a stock insurer.

1952, c. 317, § 38.1-139; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1516. Receivers to file reports, etc., with Commission.
Each receiver appointed in delinquency proceedings shall file with the Commission annually a report of the affairs of the insurer in the form prescribed by the Commission. Each receiver shall file with the Commission copies of all reports, petitions, court orders, and other pertinent papers dealing with the delinquency proceeding.

Code 1950, § 38-142; 1952, c. 317, § 38.1-140; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1517. What included in annual report of Commission.
The Commission shall include in its annual report the names of all insurers against which delinquency proceedings are pending under this chapter, and the names and addresses of any receivers of the insurers. The report shall show whether or not the insurers have resumed business or have been liquidated, and shall contain any other matter that will inform the policyholders, creditors, stockholders, members and the public of the current status of the proceeding regarding each insurer.

Code 1950, § 38-142; 1952, c. 317, § 38.1-141; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1518. Rehabilitation or mutualization of companies.
If at any time the Commission acting as the receiver finds that it is in the best interests of the policyholders and creditors of a delinquent insurer that it be rehabilitated or mutualized, the Commission shall prepare a plan of rehabilitation or mutualization. If at any time a receiver, other than the Commission, of a delinquent insurer reports to the court that it is in the best interests of the policyholders and creditors of the insurer that it be rehabilitated or mutualized, the receiver shall submit a plan of rehabilitation or mutualization to the court for its approval. The plan may include a provision imposing liens upon the net equities of policyholders of the insurer, and in the case of life insurers, a provision imposing a moratorium upon the loan or cash surrender values of the policies for whatever period of time is necessary. A hearing on the plan shall be held and notice of the hearing given in a manner prescribed by either the Commission or the court. After the hearing, the plan may be approved, disapproved, or modified by the Commission or the court.

Code 1950, § 38-139; 1952, c. 317, § 38.1-142; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1519. Termination of rehabilitation; when liquidation may be entered.
A. If either the Commission or the court determines that the purposes of the rehabilitation proceeding have been accomplished and that the insurer can safely and properly resume possession of its property and the conduct of its business, an order may be entered terminating the rehabilitation proceeding and permitting the insurer to resume possession of its property and the management and conduct of its affairs. The order shall not be entered until a full hearing is held, subject to proper notice given in the manner prescribed by the Commission or the court.

B. If at any time it appears to either the Commission or the court that further efforts to rehabilitate the insurer would be useless, an order of liquidation may be entered.

Code 1950, § 38-139; 1952, c. 317, § 38.1-143; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1520. Liquidation of alien insurers.
Proceedings in liquidation of the business of the United States branch of an alien insurer having trusteed assets in this Commonwealth may be instituted and conducted in the manner prescribed in this chapter for domestic insurers. However, only the assets of the business of the United States branch shall be included in the proceedings.

1952, c. 317, § 38.1-144; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 15 (REHABILITATION AND LIQUIDATION OF INSURERS)
§ 38.2-1521. Conservation of assets of foreign or alien insurer; when liquidation may be entered.
A. Proceedings against a foreign or alien insurer for the conservation of the insurer's assets within this Commonwealth may be instituted and conducted in the manner prescribed in this chapter for delinquency proceedings against a domestic insurer on any one or more of the applicable grounds specified in § 38.2-1503. The order of conservation shall direct the receiver to take possession of the assets of the insurer within this Commonwealth and conserve the assets for the benefit of its policyholders and for any other purpose as the nature of the cause and the interests of its policyholders, creditors, members, stockholders or the public require.

B. If the laws of any other state or country provide for the conservation, liquidation and distribution of a foreign or alien insurer's assets to creditors, policyholders, and other entitled persons, then the receiver appointed in this Commonwealth to conserve the foreign or alien insurer's assets within this Commonwealth may proceed to liquidate the business of the insurer in this Commonwealth and distribute the assets to those entitled to them. In all other cases the rights, powers, and duties of the Commission or the receiver with respect to the assets of a foreign or alien insurer shall be ancillary to the rights, powers, and duties imposed upon any receiver or other person in charge of the property, business, and affairs of the insurer in its domiciliary state or country.

1952, c. 317, § 38.1-145; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1600. Purpose.
The purpose of this chapter is to establish an association that shall provide prompt payment of covered claims to reduce financial loss to claimants or policyholders resulting from the insolvency of an insurer. This association shall assist in the detection and prevention of insurer insolvencies and shall apportion the cost of this protection among insurers.

1970, c. 766, § 38.1-757; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1601. Application.
This chapter shall apply to all classes of direct insurance written by member insurers but shall not be applicable to the following:

1. Life, annuity, health or disability insurance;

2. Mortgage guaranty, financial guaranty or other forms of insurance offering protection against investment risks;

3. Fidelity or surety bonds, or any other bonding obligations;

4. Credit insurance, credit property insurance, and credit involuntary unemployment insurance;

5. Insurance of warranties or service contracts;

6. Title insurance;

7. Insurance of vessels or craft used primarily in a trade or business, their cargoes, and marine builders' risk and marine protection and indemnity;

8. Any transaction or combination of transactions between a person, including affiliates of such person, and an insurer, including affiliates of such insurer, which involves the transfer of investment or credit risk unaccompanied by transfer of insurance risk; or

9. Any class of insurance written by cooperative nonprofit life benefit companies, mutual assessment life, accident and sickness insurers, burial societies, fraternal benefit societies, captive insurers, risk retention groups, and home protection companies.

1970, c. 766, § 38.1-758; 1986, c. 562; 1987, c. 529; 1993, cc. 77, 774; 1998, c. 230; 2000, c. 526.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1602. Liberal construction.
This chapter shall be liberally construed to effect the purpose under § 38.2-1600, which shall constitute an aid and guide to interpretation.

1970, c. 766, § 38.1-759; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1604. Association created; members; divided into three accounts.
The nonprofit unincorporated legal entity known as the Virginia Property and Casualty Insurance Guaranty Association, created by former § 38.1-761, shall continue in existence. All insurers defined as "member insurers" under § 38.2-1603 shall be and remain members of the Association as a condition of their license to transact the business of insurance in this Commonwealth. The Association shall perform its functions under a plan of operation established and approved under § 38.2-1607 and shall exercise its powers through a board of directors established under § 38.2-1605. For purposes of administration and assessment, the Association shall have three separate accounts: (i) the workers' compensation insurance account; (ii) the automobile insurance account; and (iii) the account for all other insurance to which this chapter applies. These accounts shall be in addition to and separate from the safety fund authorized by § 38.2-1619.

1970, c. 766, § 38.1-761; 1986, c. 562; 1998, c. 230.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1605. Board of directors.
A. The board of directors of the Association shall consist of at least five but no more than nine persons serving terms specified in the plan of operation. The members of the board shall be elected by member insurers, giving consideration among other things to whether all types of member insurers are fairly represented. Vacancies on the board shall be filled for the remaining period of the term in the same manner as initial appointments.

B. 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.

1970, c. 766, § 38.1-762; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1608. Duties and powers of Commission; judicial review.
A. The Commission shall:

1. Notify the Association of the existence of an insolvent insurer within three days after it receives notice of the determination of the insolvency. The Association shall be entitled to a copy of any complaint seeking an order of liquidation with a finding of insolvency against a member company at the same time that such complaint is filed with a court of competent jurisdiction.

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 Commission may:

1. Suspend or revoke, after notice and hearing, the license to transact the business of insurance in this Commonwealth 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 Commission may levy a fine on any member insurer that fails to pay an assessment when due. The fine shall not exceed five percent of the unpaid assessment per month, except that no fine shall be less than $100 per month.

2. Revoke the designation of any servicing facility if it finds that claims are being handled unsatisfactorily.

1970, c. 766, § 38.1-765; 1971, Ex. Sess., c. 1; 1986, c. 562; 1987, c. 529.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1609. Insured's rights and liabilities; settlements binding on receiver or liquidator; priority of claims; statements to be filed with receiver or liquidator.
A. 1. 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. Each insured or claimant seeking the protection of this chapter shall cooperate with the Association to the same extent as the 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 the causes of action the insolvent insurer would have had if those sums had been paid by the insolvent insurer and except as provided in subdivision 2 of this subsection. In the case of an insolvent insurer operating on an assessment plan, payments of claims by the Association shall not reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments previously made. However, the receiver, liquidator, or statutory successor shall under no circumstances levy an additional assessment against the insured, regardless of the terms of the policy.

2. The Association shall have the right to recover from the following persons the amount of any "covered claim" paid on behalf of such persons pursuant to this chapter:

a. Any insured whose net worth on December 31 of the year next preceding the date the insurer becomes an insolvent insurer exceeds fifty million dollars and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter; and

b. Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter.

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 those claims priority equal to that 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 a similar organization incurred in handling claims shall be accorded the same priority as the liquidator's expenses.

C. The Association shall preserve its rights to the insolvent insurer by periodically filing with the receiver or liquidator statements of the covered claims paid by the Association and estimates of anticipated claims on the Association.

1970, c. 766, § 38.1-766; 1986, c. 562; 1987, c. 529.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1610. Exhaustion of remedies under policy; claims recoverable from more than one association.
A. Any person having a claim against an insurer under any provision in an insurance policy, other than a policy of an insolvent insurer under which the claim is also covered, shall be required to first seek recovery under the policy covered by the insurer which is not insolvent. Any amount payable on a covered claim under this chapter shall be reduced by the amount of any recovery under the insurance policy.

A1. Any person having a claim or legal right of recovery under any governmental insurance or guaranty program which is also a covered claim, shall be required to exhaust first his right under such program. Any amount payable on a covered claim under this chapter shall be reduced by the amount of any recovery under such program.

B. Any person having a claim that may be recovered under more than one insurance guaranty association or its equivalent shall seek recovery first from the association of the state where the insured resides. However, if it is a first party claim for damage to property with a permanent location, the insured shall seek recovery first from the association of the state where the property is located. For a workers' compensation claim recovery shall first be sought from the association of the state where the claimant resides. Any recovery under this chapter shall be reduced by the amount of the recovery from any other insurance guaranty association or its equivalent.

1970, c. 766, § 38.1-767; 1986, c. 562; 1987, c. 529.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1611. Aids in detection and prevention of insurer insolvencies.
To aid in the detection and prevention of insurer insolvencies:

1. The Association's board of directors has the duty, upon a majority vote, (i) to make recommendations to the Commission for the detection and prevention of insurer insolvencies, and (ii) to respond to requests by the Commission to discuss and make recommendations regarding the status of any member insurer whose financial condition may be hazardous to the policyholders or the public.

2 through 5. [Repealed.]

6. At the request of the Commission and at the conclusion of any insurer's insolvency in which the Association was obligated to pay covered claims, the board of directors may prepare a report on the history and causes of the insolvency based on the information available to the Association. The report shall be submitted to the Commission.

1970, c. 766, § 38.1-768; 1986, c. 562; 1987, c. 529.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1612. Examination and regulation of Association by Commission; annual financial report.
The Association shall be subject to examination and regulation by the Commission. The board of directors shall submit, not later than May 1 of each year, a financial report for the preceding calendar year in a form approved by the Commission.

1970, c. 766, § 38.1-769; 1986, c. 562; 1996, c. 245.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1613. Exemption from payment of fees and taxes.
The Association shall be exempt from payment of all fees and all taxes levied by this Commonwealth or any of its subdivisions except taxes levied on real or personal property.

1970, c. 766, § 38.1-770; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1614. Repealed.
Repealed by Acts 1993, c. 679.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1615. No liability for action taken in good faith.
There shall be no liability on the part of and no cause of action shall arise against any member insurer, the Association or its agents or employees, the board of directors, or the Commission or its representatives for any action taken or statement made by them in good faith in the performance of their powers and duties under this chapter. The Association's board of directors shall not incur any civil liability for any statements made in good faith under this provision.

1970, c. 766, § 38.1-772; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1616. Stay of proceedings against insolvent insurer; setting aside judgment, etc.; access to records.
A. All proceedings in which the insolvent insurer is a party or is obligated to defend a party in any court in this Commonwealth shall be stayed for up to six months and such additional time thereafter as may be determined by the court from the date the insolvency is determined or an ancillary proceeding is instituted in the Commonwealth, whichever is later, to permit proper defense by the Association of all pending causes of action. For 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 the insured may apply to have the judgment, order, decision, verdict or finding set aside by the same court or administrator that made the judgment, order, decision, verdict or finding and shall be permitted to defend against the claim on the merits.

B. The liquidator, receiver, or statutory successor of an insolvent insurer covered by this chapter shall permit access by the board or its authorized representatives to such of the insolvent insurer's records which are necessary for the board in carrying out its functions under this chapter with regard to covered claims. In addition, the liquidator, receiver or statutory successor shall provide the board or its representative with copies of such records upon the request by the board and at the expense of the board.

1970, c. 766, § 38.1-773; 1986, c. 562; 1987, c. 529.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1617. Termination of operation of Association; expiration of chapter.
A. The Commission shall by order terminate the operation of the Association for any class of insurance covered by this chapter with respect to which it has found, after hearing, that there is in effect a statutory or voluntary plan which:

1. Is a permanent plan that is adequately funded or for which adequate funding is provided; and

2. Extends or will extend to the policyholders and residents of this Commonwealth protection and benefits with respect to insolvent insurers not substantially less favorable and effective to those policyholders and residents than the protection and benefits provided with respect to the classes of insurance under this chapter.

B. The Commission shall, by the same order, authorize discontinuance of future payments by insurers to the Association regarding the same classes of insurance. However, the assessments and payments shall continue, as necessary, to pay (i) covered claims of insurers determined to be insolvent prior to the order and (ii) the related expenses not covered by any other plan.

C. In the event the operation of the Association is terminated for all other classes of insurance within its scope, the Association shall, as soon as possible, distribute the balance of moneys and assets remaining. Distribution shall be made after the Association has settled all prior insurer insolvencies not covered by any other plan, including their related expenses. The distribution shall be made to the insurers that are then writing in this Commonwealth policies of the classes of insurance covered by this chapter and that had made payments to the Association. Distribution shall be made using a pro rata method based upon the aggregate of the payments made by the respective insurers during the five years immediately preceding the date of the order. Upon completion of the distribution for all of the classes of insurance covered by this chapter, this chapter shall be deemed to have expired.

1970, c. 766, § 38.1-774; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1618. Purpose and applicability of article.
The purpose of this article is to provide directions and guidelines for the control and use of funds provided pursuant to § 38.2-225, obtained through secured borrowings made pursuant to subdivision B 7 of § 38.2-1606, or obtained from sources of funds not specified in Article 1 (§ 38.2-1600 et seq.) of this chapter.

1986, c. 562; 1998, c. 230.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1619. Safety fund.
The Association shall maintain a separate asset account to be known as the safety fund. The safety fund shall be used to assist the Association in meeting the objectives specified in § 38.2-1600.

1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1620. Financing the safety fund, maximum amount, distribution of excess.
A. The safety fund, at the discretion of the Commission, shall receive penalty payments levied against member insurers made pursuant to subsection B of § 38.2-225 or any other payments approved by the Commission. Such payments shall include funds borrowed under the provisions of subdivision B 7 of § 38.2-1606 in the event of a natural disaster in order to provide for the prompt payment of covered claims and expenses related thereto.

B. The Commission may approve the payment of funds to the Association provided the balance in the safety fund account does not exceed two percent of the total of all member insurers' net direct written premiums for classes of insurance covered by the accounts specified in § 38.2-1604.

C. Except as provided in subsection D of this section, investment income earned on assets held in the safety fund shall be credited to the safety fund.

D. In the event the safety fund balance exceeds three percent of the net written premium for all classes of insurance covered by the accounts specified in § 38.2-1604, at the discretion of the Commission the difference shall be paid to the state treasury to the credit of the Literary Fund or shall be subject to subsection F of § 38.2-1622.

E. In the event the fund is dissolved, remaining assets in the safety fund will be distributed to the state treasury to the credit of the Literary Fund.

1986, c. 562; 1998, c. 230.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1621. Investment of safety fund.
The assets held in the safety fund may be invested in securities set forth in § 38.2-1415.

1986, c. 562; 1998, c. 230.
Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1622. Use of safety fund, repayment, etc.
A. The purpose of the safety fund is to provide for the payment of covered claims in the event the assessment limit specified in subdivision A 3 of § 38.2-1606 is reached.

B. In the event the assets in the safety fund are needed to pay covered claims, these assets shall be loaned to the respective account specified in § 38.2-1604. This loan shall be the general obligation of the Association.

C. Assets in the safety fund derived from borrowed moneys obtained under the provisions of subdivision B 7 of § 38.2-1606 shall be lent to an account at the rate of interest the Association is paying the lender providing such moneys. Interest on any other loan shall be compounded quarterly and be based upon the average ninety-day treasury bill rate for the most recently completed calendar quarter as published in the Federal Reserve Bulletin. This rate will be updated quarterly in order to conform with the market rates of interest.

D. Loans shall be repaid by levying assessments pursuant to subdivision A 3 of § 38.2-1606 against the members for the account on whose behalf the loan was negotiated. Unless otherwise approved by the Commission, the loan shall be repaid within six months of its issuance. This assessment in conjunction with any other assessments levied, shall not exceed the limit specified in subdivision A 3 of § 38.2-1606.

E. Subject to the approval of the Commission, assets in the safety fund may be loaned to any account specified in § 38.2-1604 even though the maximum assessment in subdivision A 3 of § 38.2-1606 has not been levied if the directors of the Association determine that this action will minimize the cost to the Association in paying covered claims.

F. Excess assets in the safety fund set forth in subsection D of § 38.2-1620 may be used to pay the Association's covered claims without the members incurring a liability to repay the safety fund.

1986, c. 562; 1998, c. 230.

Code of Virginia — Title 38.2 (Insurance), Chapter 16 (VIRGINIA PROPERTY AND CASUALTY INSURANCE GUARANTY ASSOCIATION)
§ 38.2-1623. Association as a fiduciary.
In handling the assets of the safety fund, the Association shall be deemed a fiduciary for the Commonwealth.

1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 17 (Virginia Life, Accident and Sickness Insurance Guaranty Association)
§ 38.2-1702. Association; creation; memberships; accounts; supervision.
A. The Association is a nonprofit legal entity known as the Virginia Life, Accident and Sickness Insurance Guaranty Association, created by former § 38.1-482.20. All member insurers shall be and remain members of the Association as a condition of their license to transact the business of insurance or the business of a health maintenance organization in the Commonwealth. The Association shall perform its functions under the plan of operation established and approved under § 38.2-1706 and shall exercise its powers through a board of directors established under § 38.2-1703. For purposes of administration and assessment, the Association shall maintain two accounts: (i) the accident and sickness insurance account; and (ii) the life insurance and annuity account, which includes the following subaccounts: (a) the life insurance account, (b) the annuity account, which shall include unallocated annuity contracts covered under subdivision D 2 b of § 38.2-1700, but shall otherwise exclude unallocated annuities, and (c) the unallocated annuity account, which shall consist of contracts covered under subdivisions D 2 d, e, and f of § 38.2-1700, but shall otherwise exclude unallocated annuities.

B. The Association shall come under the immediate supervision of the Commission and shall be subject to the applicable provisions of the insurance laws of the Commonwealth. Meetings or records of the Association may be opened to the public upon majority vote of the board of directors of the Association.

1976, c. 330, § 38.1-482.20; 1980, c. 186; 1986, c. 562; 2010, c. 510; 2018, c. 706.

Code of Virginia — Title 38.2 (Insurance), Chapter 17 (Virginia Life, Accident and Sickness Insurance Guaranty Association)
§ 38.2-1703. Board of directors of Association.
A. The board of directors of the Association shall consist of not less than nine nor more than 13 member insurers 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 Commission. Vacancies on the board shall be filled for the remainder of the term by a majority vote of the remaining board members, subject to the approval of the Commission.

B. In approving selections the Commission 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 but members of the board shall not be otherwise compensated by the Association for their services.

1976, c. 330, § 38.1-482.21; 1986, c. 562; 2010, c. 510; 2018, cc. 258, 306, 706.
Code of Virginia — Title 38.2 (Insurance), Chapter 17 (Virginia Life, Accident and Sickness Insurance Guaranty Association)
§ 38.2-1707. Duties and powers of the Commission.
A. In addition to the duties and powers enumerated elsewhere in this chapter, the Commission shall:

1. Upon request of the board of directors, provide the Association with a statement of the premiums in the appropriate states for each member insurer;

2. When an impairment is declared and the amount of the impairment is determined, serve a demand upon the impaired insurer to make good the impairment within a reasonable time. Notice to the impaired insurer shall constitute notice to its shareholders, if any. The failure of the impaired insurer to promptly comply with this demand shall not excuse the Association from the performance of its powers and duties under this chapter; and

3. Be appointed as the liquidator or rehabilitator in any liquidation or rehabilitation proceeding involving a domestic member insurer. If a foreign or alien member insurer is subject to a liquidation proceeding in its domiciliary jurisdiction or state of entry, the Commission shall be appointed conservator.

B. The Commission may suspend or revoke, after notice and hearing, the license to transact business in the Commonwealth of any member insurer that fails to pay an assessment when due or fails to comply with the plan of operation. As an alternative the Commission may levy a forfeiture on any member insurer that fails to pay an assessment when due. The forfeiture shall not exceed five percent of the unpaid assessment per month, but no forfeiture shall be less than $100 per month.

C. Any action of the board of directors or the Association may be appealed to the Commission by any member insurer if the appeal is taken within 30 days of the action being appealed. Any final action or order of the Commission shall be subject to judicial review in accordance with the provisions of §§ 12.1-39 through 12.1-41.

D. The liquidator, rehabilitator, or conservator of any impaired or insolvent insurer may notify all interested persons of the effect of this chapter.

1976, c. 330, § 38.1-482.25; 1986, c. 562; 2010, c. 510; 2018, c. 706.
Code of Virginia — Title 38.2 (Insurance), Chapter 17 (Virginia Life, Accident and Sickness Insurance Guaranty Association)
§ 38.2-1708. Detection and prevention of insolvencies.
A. To aid in the detection and prevention of member insurer insolvencies, the Commission shall have the duty to:

1. Notify the insurance departments of all of the other states within 30 days following the action taken or the date the action occurs, when the Commission takes any of the following actions against a member insurer:

a. Revocation of license;

b. Suspension of license; or

c. Enters a formal order that the member insurer restrict its premium writing, obtain additional contributions to surplus, withdraw from the Commonwealth, reinsure all or any part of its business, or increase capital, surplus, or any other account for the security of policy owners, contract owners, certificate holders, or creditors;

2. Report to the board of directors when the Commission has taken any of the actions set forth in subdivision 1 or has received a report from any other insurance department indicating that any such action has been taken in another state. The report to the board of directors shall contain all significant details of the action taken or the report received from another insurance department;

3. Report to the board of directors when the Commission has reasonable cause to believe from an examination, whether completed or in process, of any member insurer that the member insurer may be an impaired or insolvent insurer; and

4. Furnish to the board of directors the National Association of Insurance Commissioners (NAIC) Insurance Regulatory Information System (IRIS) ratios and listings of companies not included in the ratios developed by the NAIC, and the board may use the information contained therein in carrying out its duties and responsibilities under this section. The report and the information contained therein shall be kept confidential by the board of directors until such time as made public by the Commission or other lawful authority.

B. The Commission may seek the advice and recommendations of the board of directors concerning any matter affecting its duties and responsibilities regarding the financial condition of member insurers and insurers or health maintenance organizations seeking admission to transact business in the Commonwealth.

C. The board of directors may, upon majority vote, make reports and recommendations to the Commission upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer or germane to the solvency of any insurer or health maintenance organization seeking to transact business in the Commonwealth. These reports and recommendations shall not be considered public documents.

D. The board of directors, upon majority vote, may notify the Commission of any information indicating a member insurer may be an impaired or insolvent insurer.

E. The board of directors, upon majority vote, may make recommendations to the Commission for the detection and prevention of member insurer insolvencies.

1976, c. 330, § 38.1-482.26; 1986, c. 562; 2010, c. 510; 2018, c. 706.
Code of Virginia — Title 38.2 (Insurance), Chapter 17 (Virginia Life, Accident and Sickness Insurance Guaranty Association)
§ 38.2-1709. Tax write-offs of certificates of contributions.
A. A member insurer shall have at its option the right to show a certificate of contribution as an asset in the form approved by the Commission pursuant to subsection H of § 38.2-1705 at the original face amount for the calendar year of issuance. Such amount shall be amortized over the 10 calendar years following the year the contribution was paid in amounts each equal to 10 percent of the amount of the contribution.

B. The member insurer may offset the amount of the certificate amortized in a calendar year as provided in subsection A. This amount shall be deducted from the premium tax liability incurred on business transacted in the Commonwealth for that year. However, the Association shall diligently pursue all rights available to it to recover its expenditures made in the fulfillment of its responsibilities under this chapter. If the Commission determines after a hearing that the Association is not diligently pursuing available measures of recovery, the Commission shall notify the Department and contributing member insurers will not be able to offset amounts amortized during the period that the Commission determines that the Association has not been diligently pursuing available measures of recovery.

C. Any sums for which a certificate of contribution has been issued that have been (i) amortized by contributing insurers and offset against premium taxes as provided in subsection B and (ii) subsequently refunded pursuant to subsection F of § 38.2-1705 shall be paid to the Department of Taxation and deposited with the State Treasurer for credit to the general fund of the Commonwealth.

D. The amount of any credit against premium taxes provided for in this section for a member insurer shall be reduced by the amount of reduction in federal income taxes for any deduction claimed by the member insurer for an assessment paid pursuant to this chapter.

E. A member insurer that is exempt from taxes referenced in subsection A may recoup its assessments by a surcharge on its premiums in a sum reasonably calculated to recoup the assessments over a reasonable period of time, as approved by the Commission. Amounts recouped shall not be considered premiums for any other purpose, including the computation of gross premium tax, the loss ratio, or agent commission. If a member insurer collects excess surcharges, the member insurer shall remit the excess amount to the Association, and the excess amount shall be applied to reduce future assessments in the appropriate account.

1976, c. 330, § 38.1-482.27; 1986, c. 562; 1987, cc. 565, 655; 1991, c. 371; 1997, c. 160; 2010, c. 510; 2011, c. 850; 2018, c. 706.