{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1609.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1609.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1609.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1609.html"}],"law_id":57575,"edition_id":1,"section_id":57575,"structure_id":14435,"section_number":"38.2-1609","catch_line":"Insured’s rights and liabilities; settlements binding on receiver or liquidator; priority of claims; statements to be filed with receiver or liquidator","history":"1970, c. 766, \u00a7 38.1-766; 1986, c. 562; 1987, c. 529.","full_text":"A\n\n1. Any person recovering under this chapter shall be deemed to have assigned his rights under the policy to the Association to the extent of his recovery from the Association. Each insured or claimant seeking the protection of this chapter shall cooperate with the Association to the same extent as the person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except the causes of action the insolvent insurer would have had if those sums had been paid by the insolvent insurer and except as provided in subdivision 2 of this subsection. In the case of an insolvent insurer operating on an assessment plan, payments of claims by the Association shall not reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments previously made. However, the receiver, liquidator, or statutory successor shall under no circumstances levy an additional assessment against the insured, regardless of the terms of the policy.2\n\nThe Association shall have the right to recover from the following persons the amount of any “covered claim” paid on behalf of such persons pursuant to this chapter:\n\t\t\t\ta. Any insured whose net worth on December 31 of the year next preceding the date the insurer becomes an insolvent insurer exceeds fifty million dollars and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter; and\n\t\t\t\tb. Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter.B\n\nThe receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the Association or a similar organization in another state. The court having jurisdiction shall grant those claims priority equal to that which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the Association or a similar organization incurred in handling claims shall be accorded the same priority as the liquidator’s expenses.C\n\nThe Association shall preserve its rights to the insolvent insurer by periodically filing with the receiver or liquidator statements of the covered claims paid by the Association and estimates of anticipated claims on the Association.","order_by":null,"text":{"0":{"id":210929,"text":"1. Any person recovering under this chapter shall be deemed to have assigned his rights under the policy to the Association to the extent of his recovery from the Association. Each insured or claimant seeking the protection of this chapter shall cooperate with the Association to the same extent as the person would have been required to cooperate with the insolvent insurer. The Association shall have no cause of action against the insured of the insolvent insurer for any sums it has paid out except the causes of action the insolvent insurer would have had if those sums had been paid by the insolvent insurer and except as provided in subdivision 2 of this subsection. In the case of an insolvent insurer operating on an assessment plan, payments of claims by the Association shall not reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments previously made. However, the receiver, liquidator, or statutory successor shall under no circumstances levy an additional assessment against the insured, regardless of the terms of the policy.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A2"},"1":{"id":210930,"text":"The Association shall have the right to recover from the following persons the amount of any “covered claim” paid on behalf of such persons pursuant to this chapter:\n\t\t\t\ta. Any insured whose net worth on December 31 of the year next preceding the date the insurer becomes an insolvent insurer exceeds fifty million dollars and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter; and\n\t\t\t\tb. Any person who is an affiliate of the insolvent insurer and whose liability obligations to other persons are satisfied in whole or in part by payments made under this chapter.","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A","next_prefix":"B"},"2":{"id":210931,"text":"The receiver, liquidator, or statutory successor of an insolvent insurer shall be bound by settlements of covered claims by the Association or a similar organization in another state. The court having jurisdiction shall grant those claims priority equal to that which the claimant would have been entitled in the absence of this chapter against the assets of the insolvent insurer. The expenses of the Association or a similar organization incurred in handling claims shall be accorded the same priority as the liquidator’s expenses.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A2","next_prefix":"C"},"3":{"id":210932,"text":"The Association shall preserve its rights to the insolvent insurer by periodically filing with the receiver or liquidator statements of the covered claims paid by the Association and estimates of anticipated claims on the Association.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B"}},"ancestry":[{"id":14435,"edition_id":1,"name":"Establishment and Operation of the Association","identifier":"1","label":"article","depth":3,"order_by":1,"parent_id":12868,"metadata":{},"date_created":"2026-06-26 03:48:08","date_modified":"2026-06-26 03:48:08","permalink":{"id":212213,"object_type":"structure","relational_id":14435,"identifier":"1","token":"38.2\/16\/1","url":"\/38.2\/16\/1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12868,"edition_id":1,"name":"Virginia Property and Casualty Insurance Guaranty Association","identifier":"16","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:43:57","date_modified":"2026-06-26 03:43:57","permalink":{"id":212211,"object_type":"structure","relational_id":12868,"identifier":"16","token":"38.2\/16","url":"\/38.2\/16\/","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":69368,"structure_id":14435,"section_number":"38.2-1600","catch_line":"Purpose","url":"\/38.2-1600\/","token":"38.2\/16\/1\/38.2-1600","metadata":false},{"id":82396,"structure_id":14435,"section_number":"38.2-1601","catch_line":"Application","url":"\/38.2-1601\/","token":"38.2\/16\/1\/38.2-1601","metadata":false},{"id":77832,"structure_id":14435,"section_number":"38.2-1602","catch_line":"Liberal construction","url":"\/38.2-1602\/","token":"38.2\/16\/1\/38.2-1602","metadata":false},{"id":81301,"structure_id":14435,"section_number":"38.2-1603","catch_line":"Definitions","url":"\/38.2-1603\/","token":"38.2\/16\/1\/38.2-1603","metadata":false},{"id":86917,"structure_id":14435,"section_number":"38.2-1604","catch_line":"Association created; members; divided into three accounts","url":"\/38.2-1604\/","token":"38.2\/16\/1\/38.2-1604","metadata":false},{"id":71289,"structure_id":14435,"section_number":"38.2-1605","catch_line":"Board of directors","url":"\/38.2-1605\/","token":"38.2\/16\/1\/38.2-1605","metadata":false},{"id":72860,"structure_id":14435,"section_number":"38.2-1606","catch_line":"Duties and powers of Association","url":"\/38.2-1606\/","token":"38.2\/16\/1\/38.2-1606","metadata":false},{"id":72859,"structure_id":14435,"section_number":"38.2-1607","catch_line":"Plan of operation","url":"\/38.2-1607\/","token":"38.2\/16\/1\/38.2-1607","metadata":false},{"id":83949,"structure_id":14435,"section_number":"38.2-1608","catch_line":"Duties and powers of Commission; judicial review","url":"\/38.2-1608\/","token":"38.2\/16\/1\/38.2-1608","metadata":false},{"id":57575,"structure_id":14435,"section_number":"38.2-1609","catch_line":"Insured's rights and liabilities; settlements binding on receiver or liquidator; priority of claims; statements to be filed with receiver or liquidator","url":"\/38.2-1609\/","token":"38.2\/16\/1\/38.2-1609","metadata":false},{"id":68508,"structure_id":14435,"section_number":"38.2-1610","catch_line":"Exhaustion of remedies under policy; claims recoverable from more than one association","url":"\/38.2-1610\/","token":"38.2\/16\/1\/38.2-1610","metadata":false},{"id":85806,"structure_id":14435,"section_number":"38.2-1611","catch_line":"Aids in detection and prevention of insurer insolvencies","url":"\/38.2-1611\/","token":"38.2\/16\/1\/38.2-1611","metadata":false},{"id":83184,"structure_id":14435,"section_number":"38.2-1611.1","catch_line":"Tax write-offs of certificates of contribution","url":"\/38.2-1611.1\/","token":"38.2\/16\/1\/38.2-1611.1","metadata":false},{"id":60574,"structure_id":14435,"section_number":"38.2-1612","catch_line":"Examination and regulation of Association by Commission; annual financial report","url":"\/38.2-1612\/","token":"38.2\/16\/1\/38.2-1612","metadata":false},{"id":80495,"structure_id":14435,"section_number":"38.2-1613","catch_line":"Exemption from payment of fees and taxes","url":"\/38.2-1613\/","token":"38.2\/16\/1\/38.2-1613","metadata":false},{"id":72837,"structure_id":14435,"section_number":"38.2-1614","catch_line":"Repealed","url":"\/38.2-1614\/","token":"38.2\/16\/1\/38.2-1614","metadata":false},{"id":58179,"structure_id":14435,"section_number":"38.2-1615","catch_line":"No liability for action taken in good faith","url":"\/38.2-1615\/","token":"38.2\/16\/1\/38.2-1615","metadata":false},{"id":55799,"structure_id":14435,"section_number":"38.2-1616","catch_line":"Stay of proceedings against insolvent insurer; setting aside judgment, etc.; access to records","url":"\/38.2-1616\/","token":"38.2\/16\/1\/38.2-1616","metadata":false},{"id":82413,"structure_id":14435,"section_number":"38.2-1617","catch_line":"Termination of operation of Association; expiration of chapter","url":"\/38.2-1617\/","token":"38.2\/16\/1\/38.2-1617","metadata":false}],"previous_section":{"id":83949,"structure_id":14435,"section_number":"38.2-1608","catch_line":"Duties and powers of Commission; judicial review","url":"\/38.2-1608\/","token":"38.2\/16\/1\/38.2-1608","metadata":false},"next_section":{"id":68508,"structure_id":14435,"section_number":"38.2-1610","catch_line":"Exhaustion of remedies under policy; claims recoverable from more than one association","url":"\/38.2-1610\/","token":"38.2\/16\/1\/38.2-1610","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1609\/","history_text":"

This law was first created in 1970. The record of its establishment is cataloged in chapter 766 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 1970 \u201cActs\u201d aren\u2019t available online. It has been modified 2 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 1986, chapter 562; in 1987, chapter 529.<\/p>","references":false,"refers_to":false,"permalink":{"id":212251,"object_type":"law","relational_id":57575,"identifier":"38.2-1609","token":"38.2\/16\/1\/38.2-1609","url":"\/38.2-1609\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1609\/","token":"38.2\/16\/1\/38.2-1609","dublin_core":{"Title":"Insured’s rights and liabilities; settlements binding on receiver or liquidator; priority of claims; statements to be filed with receiver or liquidator","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1609","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> 1. Any person<\/span> recovering under this chapter shall be deemed to have assigned his rights under the policy to the Association<\/span> to the extent of his recovery from the Association<\/span>. Each insured or claimant<\/span> seeking the protection of this chapter shall cooperate with the Association<\/span> to the same extent as the person<\/span> would have been required to cooperate with the insolvent insurer<\/span>. The Association<\/span> shall have no cause of action<\/span> against the insured of the insolvent insurer<\/span> for any sums it has paid out except the causes of action the insolvent insurer<\/span> would have had if those sums had been paid by the insolvent insurer<\/span> and except as provided in subdivision 2 of this subsection. In the case of an insolvent insurer<\/span> operating on an assessment plan, payments of claims by the Association<\/span> shall not reduce the liability of insureds to the receiver, liquidator, or statutory successor for unpaid assessments previously made. However, the receiver, liquidator, or statutory successor shall under no circumstances levy<\/span> an additional assessment against the insured, regardless of the terms of the policy. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The Association<\/span> shall have the right to recover from the following persons<\/span> the amount of any “covered claim<\/span>” paid on behalf of such persons<\/span> pursuant to this chapter:\n\t\t\t\ta. Any insured whose net worth on December 31 of the year next preceding the date the insurer becomes an insolvent insurer<\/span> exceeds fifty million dollars and whose liability obligations to other persons<\/span> are satisfied in whole or in part by payments made under this chapter; and\n\t\t\t\tb. Any person<\/span> who is an affiliate<\/span> of the insolvent insurer<\/span> and whose liability obligations to other persons<\/span> are satisfied in whole or in part by payments made under this chapter. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> The receiver, liquidator, or statutory successor of an insolvent insurer<\/span> shall be bound by settlements<\/span> of covered claims<\/span> by the Association<\/span> or a similar organization in another state<\/span>. The court<\/span> having jurisdiction<\/span> shall grant those claims priority equal to that which the claimant<\/span> would have been entitled in the absence of this chapter against the assets<\/span> of the insolvent insurer<\/span>. The expenses of the Association<\/span> or a similar organization incurred in handling claims shall be accorded the same priority as the liquidator’s expenses. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> The Association<\/span> shall preserve its rights to the insolvent insurer<\/span> by periodically filing with the receiver or liquidator statements of the covered claims<\/span> paid by the Association<\/span> and estimates of anticipated claims on the Association<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nINSURED’S RIGHTS AND LIABILITIES; SETTLEMENTS BINDING ON RECEIVER OR\nLIQUIDATOR; PRIORITY OF CLAIMS; STATEMENTS TO BE FILED WITH RECEIVER OR\nLIQUIDATOR (\u00a7 38.2-1609)\n\nA. 1. Any person recovering under this chapter shall be deemed to have assigned\nhis rights under the policy to the Association to the extent of his recovery\nfrom the Association. Each insured or claimant seeking the protection of this\nchapter shall cooperate with the Association to the same extent as the person\nwould have been required to cooperate with the insolvent insurer. The\nAssociation shall have no cause of action against the insured of the insolvent\ninsurer for any sums it has paid out except the causes of action the insolvent\ninsurer would have had if those sums had been paid by the insolvent insurer and\nexcept as provided in subdivision 2 of this subsection. In the case of an\ninsolvent insurer operating on an assessment plan, payments of claims by the\nAssociation shall not reduce the liability of insureds to the receiver,\nliquidator, or statutory successor for unpaid assessments previously made.\nHowever, the receiver, liquidator, or statutory successor shall under no\ncircumstances levy an additional assessment against the insured, regardless of\nthe terms of the policy.\n\n 2. The Association shall have the right to recover from the following persons\n the amount of any “covered claim” paid on behalf of such persons\n pursuant to this chapter:\n \t\t\t\ta. Any insured whose net worth on December 31 of the year next preceding\n the date the insurer becomes an insolvent insurer exceeds fifty million\n dollars and whose liability obligations to other persons are satisfied in\n whole or in part by payments made under this chapter; and\n \t\t\t\tb. Any person who is an affiliate of the insolvent insurer and whose\n liability obligations to other persons are satisfied in whole or in part by\n payments made under this chapter.\n\nB. The receiver, liquidator, or statutory successor of an insolvent insurer\nshall be bound by settlements of covered claims by the Association or a similar\norganization in another state. The court having jurisdiction shall grant those\nclaims priority equal to that which the claimant would have been entitled in the\nabsence of this chapter against the assets of the insolvent insurer. The\nexpenses of the Association or a similar organization incurred in handling\nclaims shall be accorded the same priority as the liquidator’s expenses.\n\nC. The Association shall preserve its rights to the insolvent insurer by\nperiodically filing with the receiver or liquidator statements of the covered\nclaims paid by the Association and estimates of anticipated claims on the\nAssociation.\n\nHISTORY: 1970, c. 766, \u00a7 38.1-766; 1986, c. 562; 1987, c. 529.","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}}