Virginia Code 38.2-1229: Impaired reciprocals.
A. If (i) the assets of a domestic reciprocal are at any time insufficient to settle the sum of its liabilities, except those on account of funds contributed by the attorney or other parties, and its required surplus to policyholders, and (ii) the deficiency is not cured from other sources, its attorney shall levy an assessment upon subscribers made subject to assessment by the terms of their policies for the amount needed to make up the deficiency. However, the assessment shall be subject to § 38.2-1212.
Terms Used In Virginia Code 38.2-1229
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Attorney: means the person designated and authorized by subscribers as the attorney-in-fact having authority to obligate them on reciprocal insurance contracts. See Virginia Code 38.2-1201
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Insurer: means an insurance company. See Virginia Code 38.2-100
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Reciprocal: means the aggregation of subscribers under a common name. See Virginia Code 38.2-1201
- Surplus to policyholders: means the excess of total admitted assets over the liabilities of an insurer, and shall be the sum of all capital and surplus accounts, including any voluntary reserves, minus any impairment of all capital and surplus accounts. See Virginia Code 38.2-100
B. If the attorney fails to make the assessment within thirty days after the Commission orders him to do so, or if the deficiency is not fully made up within sixty days after the date the assessment was made, delinquency proceedings may be instituted and conducted against the insurer as provided in Chapter 15 of this title.
C. If liquidation of the reciprocal is ordered, an assessment shall be levied upon the subscribers for the amount the Commission or the court, as the case may be, determines to be necessary to discharge all liabilities of the reciprocal. This assessment shall exclude any funds contributed by the attorney or other persons, but shall include the reasonable cost of the liquidation. However, the assessment shall be subject to § 38.2-1212.
1952, c. 317, § 38.1-718; 1986, c. 562.