dcrodriguez/Code-of-Virginia huggingface dataset:
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1035. Domestic insurers to maintain minimum capital and surplus; proceedings by Commission if impairment found.
A. Each domestic insurer shall maintain at all times the minimum surplus if a mutual insurer, and the minimum capital and surplus if a stock insurer, required by §§ 38.2-1028, 38.2-1029 or § 38.2-1030. If the Commission finds that (i) the minimum capital and surplus of a domestic stock insurer is impaired or (ii) the minimum surplus of a domestic mutual insurer is impaired, the Commission shall issue an order requiring the insurer to eliminate the impairment within a period not exceeding ninety days. The Commission may by order served upon the insurer prohibit the insurer from issuing any new policies while the impairment exists.

B. Any domestic mutual insurer may make an assessment upon its assessable members for an amount that will provide funds to cover all or any part of the impairment. However, no member shall be liable for an assessment exceeding the limit specified in his policy, and no assessment shall be made upon any member under a nonassessable policy. The assessment shall be made upon each assessable member in proportion to the liability as expressed in the policy. With the prior approval of the Commission, the deficiency may be made up from advances or borrowed funds and subject to the restrictions provided in § 38.2-1034 for obtaining guaranty funds.

C. If at the expiration of the designated period the insurer has not satisfied the Commission that the impairment has been eliminated, an order for the rehabilitation or liquidation of the insurer may be entered as provided in Chapter 15 (§ 38.2-1500 et seq.) of this title.

Code 1950, § 38-511; 1952, c. 317, §§ 38.1-90, 38.1-93; 1966, c. 580; 1977, c. 322; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1036. Impairment of capital and surplus of foreign and alien company ground for suspension or revocation of license.
Each foreign and each alien insurer shall maintain at all times the minimum surplus, capital and surplus, or trusteed surplus required by §§ 38.2-1028, 38.2-1029, 38.2-1030 or § 38.2-1031. If the Commission finds an impairment of (i) the required minimum capital and surplus of any foreign stock insurer, (ii) the required minimum surplus of any foreign mutual insurer, or (iii) the required minimum trusteed surplus of any alien insurer, the Commission may order the insurer to eliminate the impairment and restore the minimum capital and surplus, minimum surplus or minimum trusteed surplus, to the amount required by law. The Commission may, by order served upon the insurer, prohibit the insurer from issuing any new policies while the impairment exists. If the insurer fails to comply with the Commission's order within a period of not more than ninety days, the Commission may, in the manner set out in Article 6 (§ 38.2-1040 et seq.) of this chapter, suspend or revoke the license of the insurer to transact the business of insurance in this Commonwealth.

Code 1950, § 38-511; 1952, c. 317, § 38.1-96; 1978, c. 20; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1037. Exceptions for licensed and operating insurers.
A. Notwithstanding the other provisions of this chapter with respect to minimum required capital and surplus, any insurer which, on June 30, 1991, was licensed to write and was writing any class of insurance in this Commonwealth may continue to write that class of insurance under the appropriate license from the Commission, until July 1, 1994, if it maintains at all times (i) the minimum capital and surplus if a stock insurer, (ii) the minimum surplus if a mutual insurer, and (iii) the minimum trusteed surplus if an alien insurer, required of the insurer as of June 30, 1991.

B. Any insurer not licensed to write a class of insurance in this Commonwealth on June 30, 1991, shall meet all the capital surplus and trusteed surplus requirements of this article before it obtains a license to write that class of insurance.

1952, c. 317, § 38.1-97; 1966, c. 580; 1977, c. 322; 1978, c. 20; 1986, c. 562; 1987, c. 520; 1991, c. 261.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1038. Authority of Commission to issue orders covering insurers in hazardous financial condition.
If, after reviewing an insurer's financial condition, method of operation, or manner of doing business, the Commission finds that (i) the insurer cannot, or there is a reasonable expectation that the insurer will not be able to, meet its obligations to all policyholders or (ii) the insurer's continued operation in this Commonwealth is hazardous to policyholders, creditors and the public in this Commonwealth the Commission may order the insurer to take appropriate action to remedy the Commission's concerns. The insurer shall be given ten days' notice prior to issuing the order and shall be given the opportunity to be heard and introduce evidence on its behalf. The hearing may be informal, and the required notice may be waived by the Commission and the insurer. If the insurer fails to comply with the Commission's order within the prescribed time, the Commission may suspend or revoke the license of the insurer to transact the business of insurance in this Commonwealth as set forth in Article 6 (§ 38.2-1040 et seq.) of this chapter.

1978, c. 20, § 38.1-97.2; 1986, c. 562; 1991, c. 261.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1039.1. Risk retention groups.
Except in the case of a risk retention group all of whose members are insurers, no risk retention group, as defined in Chapter 51 of this title, shall be licensed in this Commonwealth if an insurer is directly or indirectly a member or owner of such risk retention group.

1987, c. 585.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1040. Refusal, suspension or revocation of license.
A. The Commission may refuse to issue a license to any domestic, foreign or alien insurer to transact the business of insurance in this Commonwealth, and may suspend or revoke the license of any licensee, whenever it finds that the applicant or licensee:

1. Has refused to submit its books, papers, accounts, or affairs to the reasonable inspection of the Commission or its representative;

2. Has refused, or its officers or agents have refused, to furnish satisfactory evidence of its financial and business standing or solvency;

3. Is insolvent, or is in a condition that any further transaction of business in this Commonwealth is hazardous to its policyholders, creditors and public in this Commonwealth;

4. Has failed to pay a final judgment against it within sixty days after (i) the judgment became final, (ii) the time for making an appeal has expired, or (iii) the dismissal of an appeal before final determination, whichever date is the latest;

5. Has violated any law of this Commonwealth, or has in this Commonwealth violated its charter or exceeded its corporate powers;

6. Has failed to pay any fees, taxes or charges imposed in this Commonwealth within sixty days after they are due and payable, or within sixty days after final disposition of any legal contest with respect to liability for the fees, taxes or charges;

7. Has had its corporate existence dissolved or its certificate of authority revoked in the state in which it was organized or in this Commonwealth;

8. Has been found insolvent by a court of any other state, or by the Commission or other proper officer or agency of any other state, and has been prohibited from doing business in that state;

9. Has had all its risks reinsured in their entirety in another insurer; or

10. Has notified the insured in writing or by any other means that any policy of insurance covering the ownership or operation of a motor vehicle issued by the insurer will be cancelled if the insured institutes any legal action against the insurer to pursue any rights of the insured under the policy.

B. The grounds for suspension or revocation of licenses in subsection A of this section are in addition to those provided for elsewhere in this title.

Code 1950, §§ 38-68, 38-132, 38-133, 38-134, 38-169, 38-370; 1952, c. 317, § 38.1-99; 1966, c. 457; 1986, c. 562; 1987, c. 431.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1041. Notice to company of proposed suspension or revocation.
The Commission shall not revoke or suspend the license of any insurer to do the business of insurance in this Commonwealth upon any of the grounds set out in § 38.2-1040 until it has given the insurer ten days' notice of the reasons for the proposed revocation or suspension and has given the insurer an opportunity to introduce evidence and be heard. However, the Commission may immediately suspend the license on any of the grounds specified in subdivisions 7 and 8 of subsection A of § 38.2-1040 without prior notice to the insurer. The suspension shall remain in force until the hearing is held. Any hearing authorized by this section may be informal, and the required notice may be waived by the Commission and the insurer.

Code 1950, §§ 38-132, 38-169, 38-370; 1952, c. 317, § 38.1-100; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1042. Agent's authority likewise suspended or revoked.
Upon the suspension or revocation of the license of any insurer, the Commission shall suspend or revoke the authority of the insurer's agents in this Commonwealth to act for the insurer.

1952, c. 317, § 38.1-101; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1043. Suspension or revocation published.
Unless an appeal is taken within thirty days, the Commission shall have published in one or more newspapers having general circulation in this Commonwealth a notice of any final order that suspends or revokes the license of an insurer.

Code 1950, §§ 38-68, 38-133, 38-169; 1952, c. 317, § 38.1-102; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1044. New business prohibited.
No new business shall be done by any insurer or its agents on behalf of that insurer while its license to do business is suspended or revoked.

Code 1950, §§ 38-68, 38-135; 1952, c. 317, § 38.1-103; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1045. Deposits required of insurers generally.
A. Except as otherwise provided in this title, before the Commission issues a license to transact the business of insurance in this Commonwealth to any insurer, that insurer shall deposit with the State Treasurer securities that (i) are legal investments under the laws of this Commonwealth for public sinking funds or for other public funds, (ii) are not in default as to principal or interest, (iii) have a current market value of not less than $50,000 nor more than $500,000, and (iv) are issued pursuant to a system of book-entry evidencing ownership interests of the securities with transfers of ownership interests effected on the records of a depository and its participants pursuant to rules and procedures established by the depository.

B. The Commission may require a reasonable amount of additional deposits in securities that meet the requirements of clauses (i), (ii) and (iv) of subsection A of this section, whenever the Commission determines that the insurer's financial condition, method of operation, or manner of doing business is such that the Commission is not satisfied that it can meet its obligations to all policyholders.

C. Neither the deposit referred to in this section nor the alternate deposit permitted by § 38.2-1049 shall be required of (i) any mutual assessment property and casualty insurance company, (ii) any fraternal benefit society, or (iii) any insurer transacting exclusively an ocean marine business in this Commonwealth.

D. Any insurer which on June 30, 1991, instead of the deposit of securities required by subsection A, has entered into a bond with surety, approved by the Commission, with any conditions the Commission requires, shall have until the next renewal, anniversary, or expiration date of such bond, or until June 30, 1992, whichever comes first, to comply with the deposit provisions of subsection A. The surety shall be licensed in this Commonwealth to transact the business of suretyship and shall not be directly or indirectly under the same ownership or management as the principal on the bond.

E. Every insurer subject to the provisions of this section having physical securities deposited with the State Treasurer on or before June 30, 1992, shall comply with the provisions of clause (iv) in subsection A not later than January 1, 1993.

Code 1950, § 38-39; 1952, c. 317, § 38.1-108; 1956, c. 234; 1960, c. 558; 1964, c. 605; 1973, c. 178; 1975, c. 556; 1986, c. 562; 1991, c. 261; 1992, c. 14.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1046. Purpose of deposits; enforcement of lien.
A. An insurer's deposits required by § 38.2-1045 shall be held as a special fund in trust for the insurer's liabilities which are incurred or which may be incurred as a result of a loss sustained by (i) this Commonwealth or any of its political subdivisions, (ii) any citizen or inhabitant of this Commonwealth, or (iii) any other person owning property in this Commonwealth, when the insurer fails to meet its obligations incurred in this Commonwealth. Policyholders, without preference, shall have a lien on the deposits for the amounts due or which may become due as a result of any failure of the insurer to meet its obligations. General creditors, without preference, shall be entitled to have a similar lien on the deposits which shall be subordinate to the claims of the policyholders.

B. Whenever any such insurer becomes insolvent or bankrupt, or makes an assignment for the benefit of its creditors, any person given a lien by this section may file a bill in the Circuit Court of the City of Richmond for the benefit of himself and all others given a lien by this section to subject such securities as may be on deposit with the State Treasurer or its agent to the payment of the liens thereon. The State Treasurer shall be made a party to such suit and a copy of such bill shall be served upon the Commissioner of Insurance as if he were a party to such suit. The funds shall be distributed by the court.

Code 1950, § 38-50; 1952, c. 317, § 38.1-110; 1981, c. 208; 1986, c. 562; 1988, c. 298; 1992, c. 20; 1995, c. 60.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1047. How deposits applied to payment of claims; deficit to be made good.
A. This section shall apply only where:

1. The insurer has failed to pay any of its liabilities after the liabilities have been ascertained (i) by any agreement of the parties binding the insurer, or (ii) by judgment, order or decree of a court of competent jurisdiction which has not been appealed, superseded or stayed; and

2. The provisions of subsection B of § 38.2-1046 are not applicable.

B. Upon application of the person to whom the debt or money is due and after giving notice as provided in subsection C of this section, the State Treasurer shall (i) sell an amount of securities with accrued interest that provides sufficient funds to pay the sums due and the expenses of the sale and (ii) pay the sums due and expenses out of the available funds. This shall be subject to the approval of the Commission.

C. The State Treasurer shall give the insurer or its agent ten days' notice, either by mail or personally, of the time and place of the sale. The sale shall be advertised daily for ten days in a newspaper of general circulation published in the City of Richmond.

D. The insurer shall immediately make good any deficit in its deposit resulting from a sale. The State Treasurer shall report to the Commission in writing (i) the amount and kind of securities sold in accordance with the provisions of this section and (ii) the amount and kind of securities deposited to make good the deficit.

Code 1950, § 38-49; 1950, p. 996; 1952, c. 317, § 38.1-111; 1986, c. 562; 1988, c. 298.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1048. Return of deposits.
A. The Commission, at its discretion, may direct the State Treasurer to return to any insurer all or a part of the deposit made by it under § 38.2-1045 if the insurer (i) has complied with § 38.2-1049, or (ii) has ceased to transact business in this Commonwealth. In the case of the latter, the fixed or contingent liabilities secured by the deposit shall have been satisfied or terminated or shall have been assumed by another insurer licensed to transact the business of insurance in this Commonwealth. If the Commission finds that any voluntary deposit of any insurer made under § 38.2-1050 no longer is required in whole or in part to comply with the laws of this or any other state, it may to such extent direct the return of that deposit. The Commission, before directing the return of any deposit, may require evidence it considers satisfactory that the insurer is entitled to the return of all or part of the deposit.

B. Notwithstanding the provisions in § 38.2-1046 and subsection A of this section, if an insurer domiciled in this Commonwealth is placed in receivership, and a receiver is appointed, pursuant to the provisions of Chapter 15 (§ 38.2-1500 et seq.) of this title, the Commission shall direct the State Treasurer to return any deposit made with it by the insurer to such receiver for distribution, disbursement, or other application in accordance with provisions set forth in Chapter 15 (§ 38.2-1500 et seq.) of this title and any applicable order of liquidation, conservation or rehabilitation.

Code 1950, § 38-52; 1952, c. 317, § 38.1-112; 1986, c. 562; 1988, c. 298; 1995, c. 60.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1049. Alternate deposit requirements.
A. The insurer, at the discretion of the Commission, may be relieved of making the deposit required by § 38.2-1045 if the insurer makes deposits according to the following provisions:

1. Acceptable securities as defined in subsection B of this section are deposited with the State Treasurer in the form prescribed in clause (iv) of subsection A of § 38.2-1045 or with the insurance commissioner, treasurer or other officer or official body of any other state first for the protection of the insurer's policyholders.

2. The securities are not to be in default as to principal and interest.

3. The securities have a market value of at least $500,000.

4. A certificate is furnished to the Commission and authenticated by the appropriate state official holding the deposit that the requirements of this subsection have been met.

B. For the purpose of this section, acceptable securities are defined as bonds of the United States, or of any state, or of any city, county or town of any state, or bonds or notes secured by mortgages or deeds of trust on otherwise unencumbered real estate of a market value in each case of not less than double the amount loaned, or other securities approved by the Commission.

Code 1950, §§ 38-37, 38-40, 37-175, 38-516; 1952, c. 317, § 38.1-113; 1964, c. 605; 1975, c. 556; 1986, c. 562; 1992, c. 14.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1050. Voluntary deposit in excess of amount required.
Any domestic insurer, in order to comply with the laws of any other state or of the United States, may make a voluntary deposit with the State Treasurer in excess of the amount required by § 38.2-1045. This excess deposit shall be subject to all other applicable provisions of the laws of this Commonwealth relating to the deposits of insurers. However, this excess deposit shall be for the protection of all the insurer's policyholders and general creditors, notwithstanding the provisions of § 38.2-1046.

Code 1950, § 38-41; 1952, c. 317, § 38.1-114; 1966, c. 263; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1051. Repealed.
Repealed by Acts 1992, c. 14.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1052. Exchange of securities.
A depositing insurer may from time to time exchange for any of the deposited securities other securities eligible for deposit under this article if in the opinion of the Commission the aggregate value of the deposit will not be reduced below the amount required by law.

1952, c. 317, § 38.1-116; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1053. Interest on deposits; to whom paid.
The State Treasurer, at the time of receiving any securities deposited under this title, shall give the insurer authority to collect the interest for its own use as the interest is paid. This authority shall continue in force until the insurer fails to pay any of its liabilities for which the deposit is security. In that case, the party paying interest shall be notified of the failure, and thereafter the interest shall be payable to the State Treasurer, and shall be applied, if necessary, to the payment of the liabilities.

Code 1950, § 38-48; 1952, c. 317, § 38.1-117; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1054. Duty of State Treasurer when securities deposited are paid.
When the principal of any securities deposited under this title is paid to the State Treasurer, the money received shall be paid to the insurer. However, if the securities were required to be deposited under § 38.2-1045, the payment shall not be made until the insurer deposits an equal amount of other securities of the character required for similar deposits. If the insurer fails to deliver to the State Treasurer, within thirty days after receiving notice of this requirement, the securities necessary to maintain its required deposit, the State Treasurer with the approval in writing of the Commission, may use the money to purchase and hold other securities of the required character.

Code 1950, § 38-51; 1952, c. 317, § 38.1-118; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1055. Annual report of State Treasurer to Commission.
Each January the State Treasurer shall certify to the Commission the kind and face value of all securities, bonds, notes, mortgages or deeds of trust deposited under this title and held at the end of the preceding calendar year.

Code 1950, § 38-45; 1952, c. 317, § 38.1-119; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1056. Treasurer to receipt for deposits; responsibility of Commonwealth; taxation of deposited bonds.
The State Treasurer shall provide receipts to the insurer for all securities deposited with him under the provisions of this title. The Commonwealth shall be responsible for the safekeeping of the securities. If some or all of the securities are lost, destroyed or misappropriated, the Commonwealth shall pay or satisfy the loss to the insurer making the deposit. Securities deposited with the State Treasurer shall not be subject to taxation.

Code 1950, §§ 38-42, 38-46; 1952, c. 317, § 38.1-120; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1057. Assessment for expense of holding deposits; Insurance Collateral Assessment Fund.
A. For the purpose of defraying the expense of the State Treasurer's office in the safekeeping and handling of the securities or surety bonds deposited under the provisions of this title, the State Treasurer shall levy annually against each insurer an assessment. The assessment shall be a percentage of the par or face value of the securities or surety bonds on deposit with the State Treasurer's office in each insurer's account at the end of each calendar year. The percentage shall be determined annually by the State Treasurer as the amount necessary to meet the estimated annual expenses incurred by the State Treasurer to meet the provisions of this title. The percentage shall not exceed one-fourth of one percent of the par or face value of the securities or surety bonds on deposit with the State Treasurer's office. Assessment collections that are more than actual expenses in any year shall be added to the next year's assessment calculation. The assessment shall be collected every January. No part of the amount collected shall be used to increase the compensation of any person connected with the office of the State Treasurer.

B. All moneys collected from the annual assessment imposed under subsection A shall be paid into the state treasury and credited to a special, nonreverting fund known as the Insurance Collateral Assessment Fund which is hereby established. The Fund shall be established on the books of the Comptroller and be administered by the State Treasurer's office. Disbursements from the Fund shall be on warrants issued by the Comptroller to pay expenses associated with the safekeeping and handling of the securities or surety bonds deposited under the provisions of this title. Any moneys remaining in the Fund at the end of a fiscal year shall not revert to the general fund but shall remain in the Fund and be used to offset subsequent years' expenses as provided in subsection A.

Code 1950, § 38-43; 1952, c. 317, § 38.1-121; 1973, c. 173; 1986, c. 562; 2005, c. 38.

Code of Virginia — Title 38.2 (Insurance), Chapter 10 (ORGANIZATION, ADMISSION AND LICENSING OF INSURERS)
§ 38.2-1058. Felony for State Treasurer to dispose of securities illegally.
If the State Treasurer disposes of any securities deposited with him under this title, other than as provided in this title, he shall be guilty of a Class 3 felony, and, upon conviction, shall be punished by a fine double the amount of the disposed securities.

Code 1950, § 38-53; 1952, c. 317, § 38.1-122; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1100. Scope of chapter.
The provisions of this chapter shall apply solely to captive insurers or association captive insurers domiciled in this Commonwealth.

1980, c. 665, § 38.1-916; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1101. Definitions.
As used in this chapter:

"Affiliated company" means (i) any company that directly or indirectly owns, controls, or holds, with power to vote, ten percent or more of the outstanding voting securities of a pure captive insurer, or (ii) any company of which ten percent or more of the voting securities are directly or indirectly owned, controlled, or held, with power to vote, by a parent, subsidiary, or associated company.

"Associated company" means any company in the same corporate system with a pure captive insurer.

"Association captive insurer" means any domestic insurer transacting the business of insurance and reinsurance only on risks, hazards, and liabilities of the members of an insurance association.

"Captive insurer" means any pure captive insurer or any association captive insurer.

"Insurance association" means any group of individuals, corporations, partnerships, associations, or governmental units or agencies whose members collectively own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurer.

"Parent" means a corporation, partnership, governmental unit or agency, or individual who directly or indirectly owns, controls or holds, with power to vote, more than fifty percent of the outstanding voting securities of a pure captive insurer.

"Pure captive insurer" means any domestic insurer transacting the business of insurance and reinsurance only on risks, hazards, and liabilities of its parent, subsidiary companies of its parent, and associated and affiliated companies.

"Subsidiary company" means any corporation of which fifty percent or more of the outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by a parent or by a company that is a subsidiary of the parent.

1980, c. 665, § 38.1-917; 1981, c. 494; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1102. Application for license; limitations on authority.
A. No captive insurer shall transact any insurance business in this Commonwealth unless (i) it is permitted to do so by its articles of incorporation or charter and (ii) it procures a license to transact the business of insurance from the Commission in accordance with Article 5 (§ 38.2-1024 et seq.) of Chapter 10 of this title. The license shall be renewed in accordance with § 38.2-1025. A captive insurer may only be licensed to write the classes of insurance described in §§ 38.2-110 through 38.2-120, 38.2-124, 38.2-126 and reinsure in accordance with § 38.2-136.

B. 1. The Commission shall not issue a license to transact the business of insurance in this Commonwealth to any pure captive insurer until it is satisfied that the total insurance coverage necessary to insure all risks, hazards, and liabilities would develop, in the aggregate, gross annual premiums of at least $500,000.

2. The Commission shall not issue a license to transact the business of insurance in this Commonwealth to any association captive insurer until it is satisfied (i) that the total insurance coverage necessary to insure all risks, hazards, and liabilities would develop, in the aggregate, gross annual premiums of at least one million dollars and (ii) that its insurance association has been in existence for at least one year. The Commission may waive the requirement that the insurance association be in existence for at least 1 year if the association captive insurer satisfies the Commission that each member of the insurance association would have a gross annual premium in excess of $100,000.

C. No captive insurer may write classes of personal insurance coverage for individuals unless the individual is a parent.

D. No captive insurer may write insurance or reinsurance on personally owned motor vehicles or homeowners' insurance or any component of them.

1980, c. 665, § 38.1-918; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1103. Name.
A captive insurer shall not adopt the name of any existing company transacting a similar business or any name so familiar that it may mislead the public.

1980, c. 665, § 38.1-919; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1104. Formation; licensure after examination; amendment of articles; principal and home office.
A. Captive insurers with shares of capital stock shall be incorporated under Article 3 (§ 13.1-618 et seq.) of Chapter 9 of Title 13.1 as modified by this title and, except as provided in this title, shall be subject to all the general restrictions and shall have all the general powers imposed and conferred upon such corporations by law.

B. Captive insurers without shares of capital stock shall be incorporated under Article 3 (§ 13.1-818 et seq.) of Chapter 10 of Title 13.1, as modified by this title and, except as provided in this title, shall be subject to all the general restrictions and shall have all the general powers imposed and conferred upon such corporations by law.

C. 1. No charter shall be granted to any captive insurer until the Commission receives a certificate from the State Treasurer showing that (i) cash, bonds or other securities in the amount required by § 38.2-1105 have been deposited or (ii) an irrevocable letter of credit in that amount has been deposited and is to be held under the provisions, terms and conditions set forth in § 38.2-1105.

2. When the certificate has been presented to the Commission, the Commission may make or direct to be made an examination of the captive insurer.

3. The Commission shall issue a license if the captive insurer complies with this chapter.

D. Any amendment of the articles of incorporation of a captive insurer shall be pursuant to Article 11 (§ 13.1-705 et seq.) of Chapter 9 or of Article 10 (§ 13.1-884 et seq.) of Chapter 10 of Title 13.1.

E. The principal and home office of every captive insurer shall be in this Commonwealth.

1980, c. 665, § 38.1-920; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1105. Deposit of minimum capital; letter of credit instead of deposit.
A. No captive insurer shall be issued a license to transact the business of insurance in this Commonwealth until it has met the requirements of Article 5 (§ 38.2-1024 et seq.) of Chapter 10 of this title.

B. The captive insurer shall deposit with the State Treasurer cash, bonds, or securities equal to the minimum capital or, if a mutual insurer, fifty percent of the minimum surplus, as required by Article 5 (§ 38.2-1024 et seq.) of Chapter 10 of this title. The State Treasurer shall accept an irrevocable letter of credit, in a form acceptable to the Commission, on behalf of a captive insurer instead of requiring the above-mentioned deposit. The letter of credit shall be issued by a national or state bank and approved by the Commission.

C. The deposit or letter of credit shall be held by the State Treasurer for the benefit of all policyholders and creditors wherever located and shall be administered as provided in Article 7 (§ 38.2-1045 et seq.) of Chapter 10 of this title.

D. The State Treasurer shall furnish to the captive insurer a certificate certifying that the State Treasurer holds the securities or letters of credit in trust for the benefit of the policyholders and creditors of the captive insurer.

1980, c. 665, § 38.1-921; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1106. Minimum surplus in form of letter of credit.
A. Any licensed captive insurer may, subject to the approval of the Commission, hold all or a portion of (i) the minimum surplus as set forth in Article 5 (§ 38.2-1024 et seq.) of Chapter 10 in the form of an irrevocable letter of credit, if a stock insurer, or (ii) fifty percent of minimum surplus not subject to subsection B of § 38.2-1105, if a mutual insurer. The letter of credit shall be issued by a national or state bank and approved by the Commission.

B. Any letter of credit permitted pursuant to this section shall be held by the State Treasurer for the benefit of all policyholders and creditors and shall be administered as provided in Article 7 (§ 38.2-1045 et seq.) of Chapter 10 of this title.

1980, c. 665, § 38.1-922; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1107. Membership in rating organizations.
No captive insurer shall be required to join a rating organization.

1980, c. 665, § 38.1-926; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1108. Tax on premiums collected.
All captive insurers transacting business in this Commonwealth shall pay taxes as provided for in Chapter 25 of Title 58.1, except that taxes shall be paid on risks and property situated in any state in which the captive insurer is not licensed and upon which no premium tax is otherwise paid or payable.

1980, c. 665, § 38.1-928; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 11 (CAPTIVE INSURERS)
§ 38.2-1109. Applicability of other provisions of title.
Except as otherwise provided, all laws of this title that apply to insurers writing the same classes of insurance that captive insurers are permitted to write, shall apply in every respect to captive insurers.

1980, c. 665, § 38.1-930; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1200. Scope of chapter.
This chapter applies to all reciprocals and reciprocal insurance as defined in § 38.2-1201.

1952, c. 317, § 38.1-688; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1201. Definitions.
A. As used in this title:

"Reciprocal" means the aggregation of subscribers under a common name.

"Reciprocal insurance" means insurance resulting from the mutual exchange of insurance contracts among persons in an unincorporated association under a common name through an attorney-in-fact having authority to obligate each person both as insured and insurer.

B. As used in this chapter:

"Attorney" means the person designated and authorized by subscribers as the attorney-in-fact having authority to obligate them on reciprocal insurance contracts.

"Subscriber" means a person obligated under a reciprocal insurance agreement.

1952, c. 317, § 38.1-689; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1202. Insuring power of reciprocals.
A reciprocal licensed to transact the business of insurance in this Commonwealth may write the classes of insurance enumerated in Article 2 (§ 38.2-101 et seq.) of Chapter 1 of this title, except life insurance, annuities, and title insurance.

Code 1950, § 38-543; 1952, c. 317, § 38.1-690; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1203. What laws applicable to reciprocals; compliance with § 38.2-208.
A. Except as otherwise provided, all the provisions of this title relating to insurers generally, and those relating to insurers writing the same classes of insurance that reciprocals are permitted to write, are applicable to reciprocals.

B. A reciprocal shall be deemed to have complied with § 38.2-208 if:

1. It issues policies containing a contingent assessment liability as provided for in § 38.2-1212; and

2. It has and maintains reinsurance in an amount that the Commission considers adequate to reasonably limit the reciprocal's aggregate losses to the lesser of:

a. Ten percent of the surplus to policyholders of the reciprocal multiplied by the number of subscribers;

b. The surplus to policyholders of the reciprocal multiplied by three; or

c. Five million dollars.

Code 1950, § 38-543; 1952, c. 317, § 38.1-691; 1977, c. 58; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1204. Power to enter into reciprocal insurance contracts.
A. Persons of this Commonwealth may enter into reciprocal insurance contracts with each other and with persons of other states and countries. For the purposes of this chapter, the definition of "person" shall also include any county, city, or town, school board, Transportation District Commission, or any other local governmental authority or local agency or public service corporation owned, operated or controlled by a locality or local government authority, with power to enter into contractual undertakings within or without the Commonwealth.

B. For any corporation now existing or hereafter organized under the laws of this Commonwealth, the power and authority to enter into reciprocal insurance contracts shall be in addition to the powers conferred upon it in its certificate of incorporation, and shall be incidental to the purposes for which the corporation is organized.

Code 1950, §§ 38-543, 38-550; 1952, c. 317, §§ 38.1-692, 38.1-693; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1205. Name.
Every reciprocal shall have and use a business name that includes the word "reciprocal," "interinsurer," "interinsurance," "exchange," "underwriters," or "underwriting."

Code 1950, § 38-546; 1952, c. 317, § 38.1-694; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1206. License required of reciprocals; surplus.
A. No reciprocal shall engage in any insurance transaction in this Commonwealth until it has obtained a license to do so in accordance with the applicable provisions of Articles 5 (§ 38.2-1024 et seq.) and 7 (§ 38.2-1045 et seq.) of Chapter 10 of this title.

B. No domestic or foreign reciprocal shall be licensed to transact the business of insurance in this Commonwealth unless it has a surplus to policyholders of at least $1,600,000, and no alien reciprocal shall be so licensed unless it has a trusteed surplus, as defined in § 38.2-1031, of at least $1,600,000.

Code 1950, § 38-549; 1952, c. 317, § 38.1-695; 1977, c. 322; 1986, c. 562; 1991, c. 261.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1207. Exceptions as to reciprocals licensed and operating.
A. Notwithstanding other provisions of this chapter regarding minimum required surplus, any reciprocal that was licensed to write and was writing any class of insurance in this Commonwealth on June 30, 1991, may continue to write that class of insurance under the appropriate license from the Commission until July 1, 1994. The reciprocal shall maintain at all times the minimum surplus, and the minimum trusteed surplus if an alien reciprocal, required on June 30, 1991.

B. Before any reciprocal obtains a license to write in this Commonwealth any class of insurance that it was not writing and licensed to write in this Commonwealth on June 30, 1991, it shall comply with all the requirements of this article regarding surplus.

1977, c. 322, § 38.1-695.1; 1986, c. 562; 1991, c. 261.
Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1208. Additional requirements, foreign and alien reciprocals.
No foreign reciprocal shall be licensed to transact the business of insurance in this Commonwealth unless it has filed with the Commission a certificate of the supervising insurance official of the state in which it is organized. The certificate shall show that the foreign reciprocal is licensed to write and is writing actively in that state or an affiliate of the foreign reciprocal is licensed to write and is writing actively in its state of domicile or at least two other states the class of insurance it proposes to write in this Commonwealth. No alien reciprocal shall be licensed to transact the business of insurance until it has filed with the Commission a certificate of the supervising insurance official of (i) the state through which it entered the United States or (ii) the alien reciprocal's domiciliary country. The certificate shall show that the alien reciprocal is licensed to write and is writing actively in that state or country the class of insurance it proposes to write in this Commonwealth.

1952, c. 317, § 38.1-696; 1986, c. 562; 2017, c. 655.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1209. Residence and office of attorney of foreign and alien reciprocals.
Nothing in this title regarding the admission and licensing of foreign and alien insurers requires that the attorney of a foreign or alien reciprocal be resident or domiciled in this Commonwealth, or that the principal office of the attorney be maintained in this Commonwealth. The office or offices of the attorney shall be determined by the subscribers through the power of attorney.

Code 1950, § 38-545; 1952, c. 317, § 38.1-698; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1210. Contracts executed by attorney.
Reciprocal insurance contracts shall be executed by the attorney of the reciprocal.

Code 1950, § 38-545; 1952, c. 317, § 38.1-699; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1211. License required of agent.
No person shall act in this Commonwealth as an agent of a reciprocal in the selling, solicitation or negotiation of applications for insurance, subscriber's agreements and powers of attorney, or in the collection of premiums in connection with the reciprocal insurer, without first procuring a license from the Commission pursuant to the requirements in Chapter 18 of this title. An agent shall be appointed by each reciprocal the agent represents.

1977, c. 313, § 38.1-700.1; 1986, c. 562; 2001, c. 706.
Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1212. Subscribers' liability.
A. Each subscriber insured under an assessable policy shall have a contingent assessment liability for payment of actual losses and expenses incurred while his policy was in force. This shall be in the amount provided for in the power of attorney or subscriber's agreement.

B. The contingent assessment liability on any one policy in any one calendar year shall equal the premiums earned, as defined in § 38.2-1226, on the policy for that year multiplied by not less than one nor more than ten.

C. The contingent assessment liability shall not be joint, but shall be individual and several.

D. Each assessable policy issued by the insurer shall plainly set forth a statement of the contingent assessment liability on the front of the policy in capital letters in no less than ten point type.

1952, c. 317, §§ 38.1-702, 38.1-716; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1214. Savings returned to subscribers.
A reciprocal may return to its subscribers any savings or credits accruing to their accounts. Any such distribution shall not unfairly discriminate between classes of risks or policies, or between subscribers. However, the distribution may vary for classes of subscribers based upon the experience of those classes.

1952, c. 317, § 38.1-704; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1215. Reserves.
Each reciprocal shall maintain the same unearned premium and loss or claim reserves required for stock and mutual companies writing the same classes of insurance.

Code 1950, §§ 38-558, 38-559; 1952, c. 317, § 38.1-705; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 12 (RECIPROCAL INSURANCE)
§ 38.2-1216. Clerk of Commission to be appointed agent for service of process; procedure thereafter.
A. Each attorney of a domestic reciprocal who files the declaration required by § 38.2-1219, and each attorney of a foreign or alien reciprocal who applies for a license to transact the business of insurance in this Commonwealth shall file with the Commission a written power of attorney executed in duplicate by the attorney appointing the clerk of the Commission as agent of the reciprocal. Upon the appointment, the clerk of the Commission (i) may be served all lawful process against or notice to such reciprocal, and (ii) shall be authorized to enter an appearance in behalf of the reciprocal. A copy of the power of attorney, duly certified by the Commission, shall be received in evidence in all courts of this Commonwealth. Any domestic, foreign or alien reciprocal that, on July 1, 1986, has appointed the Secretary of the Commonwealth as its agent for service of process shall comply with the requirements of this section within six months of July 1, 1986.

B. Whenever any such process or notice is served upon the clerk of the Commission, a copy of the process or notice shall be mailed to the attorney at the address shown on the power of attorney. Nothing in this section shall limit the right to serve any process or notice upon any reciprocal in any other manner permitted by law.

Code 1950, § 38-547; 1952, c. 317, § 38.1-706; 1968, c. 125; 1976, c. 559; 1986, c. 562.