Virginia Code 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.
Terms Used In Virginia Code 38.2-1620
- Account: means any one of the three accounts created by § Virginia Code 38.2-1603
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Association: means the Virginia Property and Casualty Insurance Guaranty Association created under § Virginia Code 38.2-1603
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Net direct written premiums: means direct gross premiums written in the Commonwealth on insurance policies applicable to this chapter, less return premiums and dividends paid or credited to policyholders on direct business. See Virginia Code 38.2-1603
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
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.