Virginia Code 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.
Terms Used In Virginia Code 38.2-1105
- business of insurance: include solicitation, negotiations preliminary to execution, execution of an insurance contract, and the transaction of matters subsequent to execution of the contract and arising out of it. See Virginia Code 38.2-100
- Captive insurer: means any pure captive insurer or any association captive insurer. See Virginia Code 38.2-1101
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Insurer: means an insurance company. See Virginia Code 38.2-100
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
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.