{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1213.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1213.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1213.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1213.html"}],"law_id":83934,"edition_id":1,"section_id":83934,"structure_id":14901,"section_number":"38.2-1213","catch_line":"Nonassessable policies","history":"1952, c. 317, \u00a7 38.1-703; 1977, cc. 58, 322; 1986, c. 562; 1991, c. 261.","full_text":"A\n\nThe Commission may issue a certificate authorizing the reciprocal to reduce or extinguish the contingent assessment liability of subscribers under its policies then in force in this Commonwealth, and to omit provisions imposing contingent assessment liability in all policies delivered or issued for delivery in this Commonwealth for as long as all such surplus to policyholders remains unimpaired. The certificate may be issued if, in the case of a domestic or foreign reciprocal, the reciprocal has surplus to policyholders of at least four million dollars, or, if in the case of an alien reciprocal, the reciprocal has a trusteed surplus, as defined in § 38.2-1031, of at least four million dollars. No certificate may be issued until an application of the attorney has been approved by the subscribers’ advisory committee.\n\t\t\tHowever, any reciprocal that on June 30, 1991, was authorized to issue and was engaged in issuing policies without contingent liability may continue to do so until July 1, 1994, by maintaining at all times the minimum surplus to policyholders if a domestic or foreign reciprocal, and the minimum trusteed surplus if an alien reciprocal, required at the time of authorization.B\n\nThe Commission shall issue this certificate if it determines that the reciprocal’s surplus to policyholders is reasonable in relation to the reciprocal’s outstanding liabilities and adequate to meet its financial needs. In making that determination the following factors, among others, shall be considered:1\n\nThe size of the reciprocal as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria;2\n\nThe extent to which the reciprocal’s business is diversified among different classes of insurance;3\n\nThe number and size of risks insured in each class of insurance;4\n\nThe extent of the geographical dispersion of the reciprocal’s insured risks;5\n\nThe nature and extent of the reciprocal’s reinsurance program;6\n\nThe quality, diversification, and liquidity of the reciprocal’s investment portfolio;7\n\nThe recent past and trend in the size of the reciprocal’s surplus to policyholders;8\n\nThe surplus to policyholders maintained by other comparable insurers; and9\n\nThe adequacy of the reciprocal’s reserves.C\n\nUpon impairment of the surplus to policyholders, the Commission shall revoke the certificate. After revocation, the reciprocal shall not issue or renew any policy without providing for the contingent assessment liability of subscribers.D\n\nThe Commission shall not authorize a domestic reciprocal to extinguish the contingent assessment liability of any of its subscribers or in any of its policies to be issued, unless it has the required surplus to policyholders and extinguishes the contingent assessment liability of all of its subscribers and in all policies to be issued for all classes of insurance written by it. However, if required by the laws of another state in which the domestic reciprocal is transacting the business of insurance as a licensed insurer, it may issue policies providing for the contingent assessment liability of its subscribers acquiring policies in that state and need not extinguish the contingent assessment liability applicable to policies already in force in that state.","order_by":null,"text":{"0":{"id":300762,"text":"The Commission may issue a certificate authorizing the reciprocal to reduce or extinguish the contingent assessment liability of subscribers under its policies then in force in this Commonwealth, and to omit provisions imposing contingent assessment liability in all policies delivered or issued for delivery in this Commonwealth for as long as all such surplus to policyholders remains unimpaired. The certificate may be issued if, in the case of a domestic or foreign reciprocal, the reciprocal has surplus to policyholders of at least four million dollars, or, if in the case of an alien reciprocal, the reciprocal has a trusteed surplus, as defined in § 38.2-1031, of at least four million dollars. No certificate may be issued until an application of the attorney has been approved by the subscribers’ advisory committee.\n\t\t\tHowever, any reciprocal that on June 30, 1991, was authorized to issue and was engaged in issuing policies without contingent liability may continue to do so until July 1, 1994, by maintaining at all times the minimum surplus to policyholders if a domestic or foreign reciprocal, and the minimum trusteed surplus if an alien reciprocal, required at the time of authorization.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":300763,"text":"The Commission shall issue this certificate if it determines that the reciprocal’s surplus to policyholders is reasonable in relation to the reciprocal’s outstanding liabilities and adequate to meet its financial needs. In making that determination the following factors, among others, shall be considered:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":300764,"text":"The size of the reciprocal as measured by its assets, capital and surplus, reserves, premium writings, insurance in force and other appropriate criteria;","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":300765,"text":"The extent to which the reciprocal’s business is diversified among different classes of insurance;","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"B3"},"4":{"id":300766,"text":"The number and size of risks insured in each class of insurance;","type":"section","prefixes":["B","3"],"prefix":"3","entire_prefix":"B3","prefix_anchor":"B3","level":2,"prior_prefix":"B2","next_prefix":"B4"},"5":{"id":300767,"text":"The extent of the geographical dispersion of the reciprocal’s insured risks;","type":"section","prefixes":["B","4"],"prefix":"4","entire_prefix":"B4","prefix_anchor":"B4","level":2,"prior_prefix":"B3","next_prefix":"B5"},"6":{"id":300768,"text":"The nature and extent of the reciprocal’s reinsurance program;","type":"section","prefixes":["B","5"],"prefix":"5","entire_prefix":"B5","prefix_anchor":"B5","level":2,"prior_prefix":"B4","next_prefix":"B6"},"7":{"id":300769,"text":"The quality, diversification, and liquidity of the reciprocal’s investment portfolio;","type":"section","prefixes":["B","6"],"prefix":"6","entire_prefix":"B6","prefix_anchor":"B6","level":2,"prior_prefix":"B5","next_prefix":"B7"},"8":{"id":300770,"text":"The recent past and trend in the size of the reciprocal’s surplus to policyholders;","type":"section","prefixes":["B","7"],"prefix":"7","entire_prefix":"B7","prefix_anchor":"B7","level":2,"prior_prefix":"B6","next_prefix":"B8"},"9":{"id":300771,"text":"The surplus to policyholders maintained by other comparable insurers; and","type":"section","prefixes":["B","8"],"prefix":"8","entire_prefix":"B8","prefix_anchor":"B8","level":2,"prior_prefix":"B7","next_prefix":"B9"},"10":{"id":300772,"text":"The adequacy of the reciprocal’s reserves.","type":"section","prefixes":["B","9"],"prefix":"9","entire_prefix":"B9","prefix_anchor":"B9","level":2,"prior_prefix":"B8","next_prefix":"C"},"11":{"id":300773,"text":"Upon impairment of the surplus to policyholders, the Commission shall revoke the certificate. After revocation, the reciprocal shall not issue or renew any policy without providing for the contingent assessment liability of subscribers.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B9","next_prefix":"D"},"12":{"id":300774,"text":"The Commission shall not authorize a domestic reciprocal to extinguish the contingent assessment liability of any of its subscribers or in any of its policies to be issued, unless it has the required surplus to policyholders and extinguishes the contingent assessment liability of all of its subscribers and in all policies to be issued for all classes of insurance written by it. However, if required by the laws of another state in which the domestic reciprocal is transacting the business of insurance as a licensed insurer, it may issue policies providing for the contingent assessment liability of its subscribers acquiring policies in that state and need not extinguish the contingent assessment liability applicable to policies already in force in that state.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C"}},"ancestry":[{"id":14901,"edition_id":1,"name":"General Provisions","identifier":"1","label":"article","depth":3,"order_by":1,"parent_id":13369,"metadata":{},"date_created":"2026-06-26 03:50:41","date_modified":"2026-06-26 03:50:41","permalink":{"id":211215,"object_type":"structure","relational_id":14901,"identifier":"1","token":"38.2\/12\/1","url":"\/38.2\/12\/1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":13369,"edition_id":1,"name":"Reciprocal Insurance","identifier":"12","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:44:43","date_modified":"2026-06-26 03:44:43","permalink":{"id":211213,"object_type":"structure","relational_id":13369,"identifier":"12","token":"38.2\/12","url":"\/38.2\/12\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12698,"edition_id":1,"name":"Insurance","identifier":"38.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":210661,"object_type":"structure","relational_id":12698,"identifier":"38.2","token":"38.2","url":"\/38.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":85789,"structure_id":14901,"section_number":"38.2-1200","catch_line":"Scope of chapter","url":"\/38.2-1200\/","token":"38.2\/12\/1\/38.2-1200","metadata":false},{"id":70586,"structure_id":14901,"section_number":"38.2-1201","catch_line":"Definitions","url":"\/38.2-1201\/","token":"38.2\/12\/1\/38.2-1201","metadata":false},{"id":64031,"structure_id":14901,"section_number":"38.2-1202","catch_line":"Insuring power of reciprocals","url":"\/38.2-1202\/","token":"38.2\/12\/1\/38.2-1202","metadata":false},{"id":68651,"structure_id":14901,"section_number":"38.2-1203","catch_line":"What laws applicable to reciprocals; compliance with \u00a7 38.2-208","url":"\/38.2-1203\/","token":"38.2\/12\/1\/38.2-1203","metadata":false},{"id":80754,"structure_id":14901,"section_number":"38.2-1204","catch_line":"Power to enter into reciprocal insurance contracts","url":"\/38.2-1204\/","token":"38.2\/12\/1\/38.2-1204","metadata":false},{"id":77954,"structure_id":14901,"section_number":"38.2-1205","catch_line":"Name","url":"\/38.2-1205\/","token":"38.2\/12\/1\/38.2-1205","metadata":false},{"id":86167,"structure_id":14901,"section_number":"38.2-1206","catch_line":"License required of reciprocals; surplus","url":"\/38.2-1206\/","token":"38.2\/12\/1\/38.2-1206","metadata":false},{"id":68496,"structure_id":14901,"section_number":"38.2-1207","catch_line":"Exceptions as to reciprocals licensed and operating","url":"\/38.2-1207\/","token":"38.2\/12\/1\/38.2-1207","metadata":false},{"id":86206,"structure_id":14901,"section_number":"38.2-1208","catch_line":"Additional requirements, foreign and alien reciprocals","url":"\/38.2-1208\/","token":"38.2\/12\/1\/38.2-1208","metadata":false},{"id":61707,"structure_id":14901,"section_number":"38.2-1209","catch_line":"Residence and office of attorney of foreign and alien reciprocals","url":"\/38.2-1209\/","token":"38.2\/12\/1\/38.2-1209","metadata":false},{"id":75674,"structure_id":14901,"section_number":"38.2-1210","catch_line":"Contracts executed by attorney","url":"\/38.2-1210\/","token":"38.2\/12\/1\/38.2-1210","metadata":false},{"id":69484,"structure_id":14901,"section_number":"38.2-1211","catch_line":"License required of agent","url":"\/38.2-1211\/","token":"38.2\/12\/1\/38.2-1211","metadata":false},{"id":76809,"structure_id":14901,"section_number":"38.2-1212","catch_line":"Subscribers' liability","url":"\/38.2-1212\/","token":"38.2\/12\/1\/38.2-1212","metadata":false},{"id":83934,"structure_id":14901,"section_number":"38.2-1213","catch_line":"Nonassessable policies","url":"\/38.2-1213\/","token":"38.2\/12\/1\/38.2-1213","metadata":false},{"id":57562,"structure_id":14901,"section_number":"38.2-1214","catch_line":"Savings returned to subscribers","url":"\/38.2-1214\/","token":"38.2\/12\/1\/38.2-1214","metadata":false},{"id":74683,"structure_id":14901,"section_number":"38.2-1215","catch_line":"Reserves","url":"\/38.2-1215\/","token":"38.2\/12\/1\/38.2-1215","metadata":false},{"id":82054,"structure_id":14901,"section_number":"38.2-1216","catch_line":"Clerk of Commission to be appointed agent for service of process; procedure thereafter","url":"\/38.2-1216\/","token":"38.2\/12\/1\/38.2-1216","metadata":false},{"id":68706,"structure_id":14901,"section_number":"38.2-1217","catch_line":"Reciprocal may be sued as such; where action or suit may be brought; upon whom service of process had","url":"\/38.2-1217\/","token":"38.2\/12\/1\/38.2-1217","metadata":false},{"id":56895,"structure_id":14901,"section_number":"38.2-1218","catch_line":"Effect of judgment against reciprocal","url":"\/38.2-1218\/","token":"38.2\/12\/1\/38.2-1218","metadata":false}],"previous_section":{"id":76809,"structure_id":14901,"section_number":"38.2-1212","catch_line":"Subscribers' liability","url":"\/38.2-1212\/","token":"38.2\/12\/1\/38.2-1212","metadata":false},"next_section":{"id":57562,"structure_id":14901,"section_number":"38.2-1214","catch_line":"Savings returned to subscribers","url":"\/38.2-1214\/","token":"38.2\/12\/1\/38.2-1214","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1213\/","history_text":"

This law was first created in 1952. The record of its establishment is cataloged in chapter 317 of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. Unfortunately, the 1952 \u201cActs\u201d aren\u2019t available online. It has been modified 3 times. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. Those modifications are as follows: in 1977, chapters 58 and 322; in 1986, chapter 562; in 1991, chapter 261.<\/p>","references":false,"refers_to":[{"id":76434,"section_number":"38.2-1031","catch_line":"Additional requirements, alien insurers","order_by":null,"url":"\/38.2-1031\/"}],"permalink":{"id":211269,"object_type":"law","relational_id":83934,"identifier":"38.2-1213","token":"38.2\/12\/1\/38.2-1213","url":"\/38.2-1213\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1213\/","token":"38.2\/12\/1\/38.2-1213","dublin_core":{"Title":"Nonassessable policies","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1213","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> The Commission<\/span> may issue<\/span> a certificate authorizing the reciprocal to reduce or extinguish the contingent assessment liability of subscribers under its policies then in force in this Commonwealth, and to omit provisions imposing contingent assessment liability in all policies delivered or issued for delivery in this Commonwealth for as long as all such surplus to policyholders<\/span> remains unimpaired. The certificate may be issued if, in the case of a domestic or foreign reciprocal, the reciprocal has surplus to policyholders<\/span> of at least four million dollars, or, if in the case of an alien reciprocal, the reciprocal has a trusteed surplus, as defined in § 38.2-1031<\/a>, of at least four million dollars. No certificate may be issued until an application of the attorney has been approved by the subscribers’ advisory committee.\n\t\t\tHowever, any reciprocal that on June 30, 1991, was authorized to issue<\/span> and was engaged in issuing policies without contingent liability may continue to do so until July 1, 1994, by maintaining at all times the minimum surplus to policyholders<\/span> if a domestic or foreign reciprocal, and the minimum trusteed surplus if an alien reciprocal, required at the time of authorization. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> The Commission<\/span> shall issue<\/span> this certificate if it determines that the reciprocal’s surplus to policyholders<\/span> is reasonable in relation to the reciprocal’s outstanding liabilities and adequate to meet its financial needs. In making that determination the following factors, among others, shall be considered: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> The size of the reciprocal as measured by its assets<\/span>, capital and surplus, reserves, premium writings, insurance<\/span> in force and other appropriate criteria; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The extent to which the reciprocal’s business is diversified among different classes of insurance<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> The number and size of risks insured in each class of insurance<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> The extent of the geographical dispersion of the reciprocal’s insured risks; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> The nature and extent of the reciprocal’s reinsurance program; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> The quality, diversification, and liquidity of the reciprocal’s investment portfolio; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> The recent past and trend in the size of the reciprocal’s surplus to policyholders<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> The surplus to policyholders<\/span> maintained by other comparable insurers<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

9.<\/span> The adequacy of the reciprocal’s reserves. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Upon impairment of the surplus to policyholders<\/span>, the Commission<\/span> shall revoke the certificate. After revocation<\/span>, the reciprocal shall not issue<\/span> or renew any policy without providing for the contingent assessment liability of subscribers. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The Commission<\/span> shall not authorize a domestic reciprocal to extinguish the contingent assessment liability of any of its subscribers or in any of its policies to be issued, unless it has the required surplus to policyholders<\/span> and extinguishes the contingent assessment liability of all of its subscribers and in all policies to be issued for all classes of insurance<\/span> written by it. However, if required by the laws<\/span> of another state<\/span> in which the domestic reciprocal is transacting the business of insurance<\/span> as a licensed insurer<\/span>, it may issue<\/span> policies providing for the contingent assessment liability of its subscribers acquiring policies in that state<\/span> and need not extinguish the contingent assessment liability applicable to policies already in force in that state<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nNONASSESSABLE POLICIES (\u00a7 38.2-1213)\n\nA. The Commission may issue a certificate authorizing the reciprocal to reduce\nor extinguish the contingent assessment liability of subscribers under its\npolicies then in force in this Commonwealth, and to omit provisions imposing\ncontingent assessment liability in all policies delivered or issued for delivery\nin this Commonwealth for as long as all such surplus to policyholders remains\nunimpaired. The certificate may be issued if, in the case of a domestic or\nforeign reciprocal, the reciprocal has surplus to policyholders of at least four\nmillion dollars, or, if in the case of an alien reciprocal, the reciprocal has a\ntrusteed surplus, as defined in § 38.2-1031, of at least four million\ndollars. No certificate may be issued until an application of the attorney has\nbeen approved by the subscribers’ advisory committee.\n\t\t\tHowever, any reciprocal that on June 30, 1991, was authorized to issue and\nwas engaged in issuing policies without contingent liability may continue to do\nso until July 1, 1994, by maintaining at all times the minimum surplus to\npolicyholders if a domestic or foreign reciprocal, and the minimum trusteed\nsurplus if an alien reciprocal, required at the time of authorization.\n\nB. The Commission shall issue this certificate if it determines that the\nreciprocal’s surplus to policyholders is reasonable in relation to the\nreciprocal’s outstanding liabilities and adequate to meet its financial\nneeds. In making that determination the following factors, among others, shall\nbe considered:\n\n 1. The size of the reciprocal as measured by its assets, capital and surplus,\n reserves, premium writings, insurance in force and other appropriate criteria;\n\n 2. The extent to which the reciprocal’s business is diversified among\n different classes of insurance;\n\n 3. The number and size of risks insured in each class of insurance;\n\n 4. The extent of the geographical dispersion of the reciprocal’s insured\n risks;\n\n 5. The nature and extent of the reciprocal’s reinsurance program;\n\n 6. The quality, diversification, and liquidity of the reciprocal’s\n investment portfolio;\n\n 7. The recent past and trend in the size of the reciprocal’s surplus to\n policyholders;\n\n 8. The surplus to policyholders maintained by other comparable insurers; and\n\n 9. The adequacy of the reciprocal’s reserves.\n\nC. Upon impairment of the surplus to policyholders, the Commission shall revoke\nthe certificate. After revocation, the reciprocal shall not issue or renew any\npolicy without providing for the contingent assessment liability of subscribers.\n\nD. The Commission shall not authorize a domestic reciprocal to extinguish the\ncontingent assessment liability of any of its subscribers or in any of its\npolicies to be issued, unless it has the required surplus to policyholders and\nextinguishes the contingent assessment liability of all of its subscribers and\nin all policies to be issued for all classes of insurance written by it.\nHowever, if required by the laws of another state in which the domestic\nreciprocal is transacting the business of insurance as a licensed insurer, it\nmay issue policies providing for the contingent assessment liability of its\nsubscribers acquiring policies in that state and need not extinguish the\ncontingent assessment liability applicable to policies already in force in that\nstate.\n\nHISTORY: 1952, c. 317, \u00a7 38.1-703; 1977, cc. 58, 322; 1986, c. 562; 1991, c.\n261.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}