{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1509.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1509.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1509.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1509.html"}],"law_id":66006,"edition_id":1,"section_id":66006,"structure_id":15197,"section_number":"38.2-1509","catch_line":"Powers of Commission when authorized to rehabilitate or liquidate insurers by court order; disbursement of available assets to an association, etc","history":"1978, c. 696, \u00a7 38.1-133.1; 1979, c. 385; 1986, c. 562; 1996, c. 81.","full_text":"A\n\nWhenever the Commission is authorized by order of the Circuit Court of the City of Richmond to rehabilitate or liquidate any domestic insurer other than an insurer writing exclusively title, fidelity and surety, credit or ocean marine insurance, the Commission shall disburse the assets as they become available to an association. Disbursal shall not be made until an application has been filed with the Commission by an association for an insolvent insurer’s available assets.B\n\nThe Commission shall disburse the assets of an insolvent insurer as they become available in the following manner:1\n\nPay, after reserving for the payment of the costs and expenses of administration, according to the following priorities: (i) claims of secured creditors with a perfected security interest not voidable under § 38.2-1513 to the extent of the value of their security, (ii) claims of the associations for “covered claims” and “contractual obligations” as defined in §§ 38.2-1603 and 38.2-1701 and claims of other policyholders arising out of insurance contracts apportioned without preference, (iii) taxes owed to the United States and other debts owed to any person, including the United States, which by the laws of the United States are entitled to priority, (iv) wages entitled to priority as provided in § 38.2-1514, and (v) other creditors; and2\n\nEquitably allocate disbursements to each of the entitled associations; and3\n\nSecure an agreement from each of the entitled associations requiring the return to the Commission of any assets previously disbursed to the association required to pay claims entitled to priority in subdivision 1 of this subsection. No bond shall be required of any entitled association; and4\n\nRequire a full report to be made by the association to the Commission accounting for all assets disbursed to the association, all disbursements made from these assets, any interest earned on these assets and any other matter as the Commission may require.C\n\nThe Commission shall provide for disbursements to the association in an amount estimated at least equal to the claim payments made or to be made by the association for which the association could assert a claim against the Commission. In addition, the Commission shall provide that if the assets available for disbursement do not equal or exceed the amount of claim payments made or to be made by the associations, then disbursements shall be in the amount of available assets.D\n\nThe Commission shall notify the affected associations and the commissioners of insurance in the other states of any disbursement made according to this section. The notice shall be deemed given when sent by certified mail at least thirty days prior to disbursement.","order_by":null,"text":{"0":{"id":239827,"text":"Whenever the Commission is authorized by order of the Circuit Court of the City of Richmond to rehabilitate or liquidate any domestic insurer other than an insurer writing exclusively title, fidelity and surety, credit or ocean marine insurance, the Commission shall disburse the assets as they become available to an association. Disbursal shall not be made until an application has been filed with the Commission by an association for an insolvent insurer’s available assets.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":239828,"text":"The Commission shall disburse the assets of an insolvent insurer as they become available in the following manner:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":239829,"text":"Pay, after reserving for the payment of the costs and expenses of administration, according to the following priorities: (i) claims of secured creditors with a perfected security interest not voidable under § 38.2-1513 to the extent of the value of their security, (ii) claims of the associations for “covered claims” and “contractual obligations” as defined in §§ 38.2-1603 and 38.2-1701 and claims of other policyholders arising out of insurance contracts apportioned without preference, (iii) taxes owed to the United States and other debts owed to any person, including the United States, which by the laws of the United States are entitled to priority, (iv) wages entitled to priority as provided in § 38.2-1514, and (v) other creditors; and","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":239830,"text":"Equitably allocate disbursements to each of the entitled associations; and","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"B3"},"4":{"id":239831,"text":"Secure an agreement from each of the entitled associations requiring the return to the Commission of any assets previously disbursed to the association required to pay claims entitled to priority in subdivision 1 of this subsection. No bond shall be required of any entitled association; and","type":"section","prefixes":["B","3"],"prefix":"3","entire_prefix":"B3","prefix_anchor":"B3","level":2,"prior_prefix":"B2","next_prefix":"B4"},"5":{"id":239832,"text":"Require a full report to be made by the association to the Commission accounting for all assets disbursed to the association, all disbursements made from these assets, any interest earned on these assets and any other matter as the Commission may require.","type":"section","prefixes":["B","4"],"prefix":"4","entire_prefix":"B4","prefix_anchor":"B4","level":2,"prior_prefix":"B3","next_prefix":"C"},"6":{"id":239833,"text":"The Commission shall provide for disbursements to the association in an amount estimated at least equal to the claim payments made or to be made by the association for which the association could assert a claim against the Commission. In addition, the Commission shall provide that if the assets available for disbursement do not equal or exceed the amount of claim payments made or to be made by the associations, then disbursements shall be in the amount of available assets.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B4","next_prefix":"D"},"7":{"id":239834,"text":"The Commission shall notify the affected associations and the commissioners of insurance in the other states of any disbursement made according to this section. The notice shall be deemed given when sent by certified mail at least thirty days prior to disbursement.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C"}},"ancestry":[{"id":15197,"edition_id":1,"name":"Rehabilitation and Liquidation of Insurers","identifier":"15","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:52:54","date_modified":"2026-06-26 03:52:54","permalink":{"id":212117,"object_type":"structure","relational_id":15197,"identifier":"15","token":"38.2\/15","url":"\/38.2\/15\/","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":66658,"structure_id":15197,"section_number":"38.2-1500","catch_line":"Scope of chapter","url":"\/38.2-1500\/","token":"38.2\/15\/38.2-1500","metadata":false},{"id":70981,"structure_id":15197,"section_number":"38.2-1501","catch_line":"Definitions","url":"\/38.2-1501\/","token":"38.2\/15\/38.2-1501","metadata":false},{"id":70456,"structure_id":15197,"section_number":"38.2-1502","catch_line":"Jurisdiction and procedure","url":"\/38.2-1502\/","token":"38.2\/15\/38.2-1502","metadata":false},{"id":69543,"structure_id":15197,"section_number":"38.2-1503","catch_line":"Grounds for delinquency proceedings commenced by Commission against domestic insurer","url":"\/38.2-1503\/","token":"38.2\/15\/38.2-1503","metadata":false},{"id":57983,"structure_id":15197,"section_number":"38.2-1504","catch_line":"Requirements when proceedings instituted by any person other than Commission","url":"\/38.2-1504\/","token":"38.2\/15\/38.2-1504","metadata":false},{"id":75038,"structure_id":15197,"section_number":"38.2-1505","catch_line":"Commission may apply for receiver and for other relief; what orders court may enter","url":"\/38.2-1505\/","token":"38.2\/15\/38.2-1505","metadata":false},{"id":68865,"structure_id":15197,"section_number":"38.2-1506","catch_line":"Requirements when receiver appointed; disbursement of available assets to association, etc","url":"\/38.2-1506\/","token":"38.2\/15\/38.2-1506","metadata":false},{"id":81475,"structure_id":15197,"section_number":"38.2-1507","catch_line":"Further procedure; injunction may be issued","url":"\/38.2-1507\/","token":"38.2\/15\/38.2-1507","metadata":false},{"id":75610,"structure_id":15197,"section_number":"38.2-1508","catch_line":"Powers of Commission when authorized to rehabilitate or liquidate companies","url":"\/38.2-1508\/","token":"38.2\/15\/38.2-1508","metadata":false},{"id":66006,"structure_id":15197,"section_number":"38.2-1509","catch_line":"Powers of Commission when authorized to rehabilitate or liquidate insurers by court order; disbursement of available assets to an association, etc","url":"\/38.2-1509\/","token":"38.2\/15\/38.2-1509","metadata":false},{"id":84217,"structure_id":15197,"section_number":"38.2-1510","catch_line":"Commission may appoint assistants in connection with rehabilitation or liquidation","url":"\/38.2-1510\/","token":"38.2\/15\/38.2-1510","metadata":false},{"id":69985,"structure_id":15197,"section_number":"38.2-1511","catch_line":"Borrowing on pledge of assets","url":"\/38.2-1511\/","token":"38.2\/15\/38.2-1511","metadata":false},{"id":69044,"structure_id":15197,"section_number":"38.2-1512","catch_line":"Rights and liabilities fixed upon liquidation","url":"\/38.2-1512\/","token":"38.2\/15\/38.2-1512","metadata":false},{"id":77564,"structure_id":15197,"section_number":"38.2-1513","catch_line":"Voidable transfers","url":"\/38.2-1513\/","token":"38.2\/15\/38.2-1513","metadata":false},{"id":60160,"structure_id":15197,"section_number":"38.2-1514","catch_line":"Priority of claims for wages","url":"\/38.2-1514\/","token":"38.2\/15\/38.2-1514","metadata":false},{"id":75937,"structure_id":15197,"section_number":"38.2-1515","catch_line":"Mutual debts or credits, how treated","url":"\/38.2-1515\/","token":"38.2\/15\/38.2-1515","metadata":false},{"id":82543,"structure_id":15197,"section_number":"38.2-1516","catch_line":"Receivers to file reports, etc., with Commission","url":"\/38.2-1516\/","token":"38.2\/15\/38.2-1516","metadata":false},{"id":81714,"structure_id":15197,"section_number":"38.2-1517","catch_line":"What included in annual report of Commission","url":"\/38.2-1517\/","token":"38.2\/15\/38.2-1517","metadata":false},{"id":70097,"structure_id":15197,"section_number":"38.2-1518","catch_line":"Rehabilitation or mutualization of companies","url":"\/38.2-1518\/","token":"38.2\/15\/38.2-1518","metadata":false},{"id":57858,"structure_id":15197,"section_number":"38.2-1519","catch_line":"Termination of rehabilitation; when liquidation may be entered","url":"\/38.2-1519\/","token":"38.2\/15\/38.2-1519","metadata":false},{"id":68871,"structure_id":15197,"section_number":"38.2-1520","catch_line":"Liquidation of alien insurers","url":"\/38.2-1520\/","token":"38.2\/15\/38.2-1520","metadata":false},{"id":60418,"structure_id":15197,"section_number":"38.2-1521","catch_line":"Conservation of assets of foreign or alien insurer; when liquidation may be entered","url":"\/38.2-1521\/","token":"38.2\/15\/38.2-1521","metadata":false},{"id":83355,"structure_id":15197,"section_number":"38.2-1522","catch_line":"Qualified financial contracts","url":"\/38.2-1522\/","token":"38.2\/15\/38.2-1522","metadata":false}],"previous_section":{"id":75610,"structure_id":15197,"section_number":"38.2-1508","catch_line":"Powers of Commission when authorized to rehabilitate or liquidate companies","url":"\/38.2-1508\/","token":"38.2\/15\/38.2-1508","metadata":false},"next_section":{"id":84217,"structure_id":15197,"section_number":"38.2-1510","catch_line":"Commission may appoint assistants in connection with rehabilitation or liquidation","url":"\/38.2-1510\/","token":"38.2\/15\/38.2-1510","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1509\/","history_text":"

This law was first created in 1978. The record of its establishment is cataloged in chapter 696 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 1978 \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 1979, chapter 385; in 1986, chapter 562; in 1996, chapter 81<\/a>.<\/p>","references":[{"id":60160,"section_number":"38.2-1514","catch_line":"Priority of claims for wages","order_by":null,"url":"\/38.2-1514\/"},{"id":56896,"section_number":"38.2-1710","catch_line":"Miscellaneous provisions","order_by":null,"url":"\/38.2-1710\/"}],"refers_to":[{"id":77564,"section_number":"38.2-1513","catch_line":"Voidable transfers","order_by":null,"url":"\/38.2-1513\/"},{"id":60160,"section_number":"38.2-1514","catch_line":"Priority of claims for wages","order_by":null,"url":"\/38.2-1514\/"},{"id":81301,"section_number":"38.2-1603","catch_line":"Definitions","order_by":null,"url":"\/38.2-1603\/"},{"id":79730,"section_number":"38.2-1701","catch_line":"Definitions","order_by":null,"url":"\/38.2-1701\/"}],"permalink":{"id":212155,"object_type":"law","relational_id":66006,"identifier":"38.2-1509","token":"38.2\/15\/38.2-1509","url":"\/38.2-1509\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1509\/","token":"38.2\/15\/38.2-1509","dublin_core":{"Title":"Powers of Commission when authorized to rehabilitate or liquidate insurers by court order; disbursement of available assets to an association, etc","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1509","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Whenever the Commission<\/span> is authorized by order<\/span> of the Circuit<\/span> Court<\/span> of the City of Richmond to rehabilitate or liquidate any domestic insurer<\/span> other than an insurer<\/span> writing exclusively title, fidelity and surety<\/span>, credit or ocean marine insurance<\/span>, the Commission<\/span> shall disburse the assets<\/span> as they become available to an association<\/span>. Disbursal shall not be made until an application has been filed with the Commission<\/span> by an association<\/span> for an insolvent<\/span> insurer<\/span>’s available assets<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> The Commission<\/span> shall disburse the assets<\/span> of an insolvent<\/span> insurer<\/span> as they become available in the following manner: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Pay, after reserving for the payment of the costs and expenses of administration, according to the following priorities: (i) claims of secured creditors<\/span> with a perfected security interest not voidable under § 38.2-1513<\/a> to the extent of the value of their security, (ii) claims of the associations<\/span> for “covered claims” and “contractual obligations” as defined in §§ 38.2-1603<\/a> and 38.2-1701<\/a> and claims of other policyholders arising out of insurance contracts<\/span> apportioned without preference, (iii) taxes owed to the United States<\/span> and other debts owed to any person<\/span>, including the United States<\/span>, which by the laws<\/span> of the United States<\/span> are entitled to priority, (iv) wages entitled to priority as provided in § 38.2-1514<\/a>, and (v) other creditors; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Equitably allocate disbursements to each of the entitled associations<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Secure an agreement from each of the entitled associations<\/span> requiring the return to the Commission<\/span> of any assets<\/span> previously disbursed to the association<\/span> required to pay claims entitled to priority in subdivision 1 of this subsection. No bond<\/span> shall be required of any entitled association<\/span>; and <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Require a full report to be made by the association<\/span> to the Commission<\/span> accounting for all assets<\/span> disbursed to the association<\/span>, all disbursements made from these assets<\/span>, any interest earned on these assets<\/span> and any other matter as the Commission<\/span> may require. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The Commission<\/span> shall provide for disbursements to the association<\/span> in an amount estimated at least equal to the claim payments made or to be made by the association<\/span> for which the association<\/span> could assert a claim against the Commission<\/span>. In addition, the Commission<\/span> shall provide that if the assets<\/span> available for disbursement do not equal or exceed the amount of claim payments made or to be made by the associations<\/span>, then disbursements shall be in the amount of available assets<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The Commission<\/span> shall notify the affected associations<\/span> and the commissioners<\/span> of insurance in the other states<\/span> of any disbursement made according to this section. The notice shall be deemed given when sent by certified mail at least thirty days prior to disbursement. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nPOWERS OF COMMISSION WHEN AUTHORIZED TO REHABILITATE OR LIQUIDATE INSURERS BY\nCOURT ORDER; DISBURSEMENT OF AVAILABLE ASSETS TO AN ASSOCIATION, ETC (\u00a7\n38.2-1509)\n\nA. Whenever the Commission is authorized by order of the Circuit Court of the\nCity of Richmond to rehabilitate or liquidate any domestic insurer other than an\ninsurer writing exclusively title, fidelity and surety, credit or ocean marine\ninsurance, the Commission shall disburse the assets as they become available to\nan association. Disbursal shall not be made until an application has been filed\nwith the Commission by an association for an insolvent insurer’s available\nassets.\n\nB. The Commission shall disburse the assets of an insolvent insurer as they\nbecome available in the following manner:\n\n 1. Pay, after reserving for the payment of the costs and expenses of\n administration, according to the following priorities: (i) claims of secured\n creditors with a perfected security interest not voidable under §\n 38.2-1513 to the extent of the value of their security, (ii) claims of the\n associations for “covered claims” and “contractual\n obligations” as defined in §§ 38.2-1603 and 38.2-1701 and\n claims of other policyholders arising out of insurance contracts apportioned\n without preference, (iii) taxes owed to the United States and other debts owed\n to any person, including the United States, which by the laws of the United\n States are entitled to priority, (iv) wages entitled to priority as provided\n in § 38.2-1514, and (v) other creditors; and\n\n 2. Equitably allocate disbursements to each of the entitled associations; and\n\n 3. Secure an agreement from each of the entitled associations requiring the\n return to the Commission of any assets previously disbursed to the association\n required to pay claims entitled to priority in subdivision 1 of this\n subsection. No bond shall be required of any entitled association; and\n\n 4. Require a full report to be made by the association to the Commission\n accounting for all assets disbursed to the association, all disbursements made\n from these assets, any interest earned on these assets and any other matter as\n the Commission may require.\n\nC. The Commission shall provide for disbursements to the association in an\namount estimated at least equal to the claim payments made or to be made by the\nassociation for which the association could assert a claim against the\nCommission. In addition, the Commission shall provide that if the assets\navailable for disbursement do not equal or exceed the amount of claim payments\nmade or to be made by the associations, then disbursements shall be in the\namount of available assets.\n\nD. The Commission shall notify the affected associations and the commissioners\nof insurance in the other states of any disbursement made according to this\nsection. The notice shall be deemed given when sent by certified mail at least\nthirty days prior to disbursement.\n\nHISTORY: 1978, c. 696, \u00a7 38.1-133.1; 1979, c. 385; 1986, c. 562; 1996, c. 81.","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}}