{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1705.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1705.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1705.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1705.html"}],"law_id":59600,"edition_id":1,"section_id":59600,"structure_id":14902,"section_number":"38.2-1705","catch_line":"Assessments","history":"1976, c. 330, \u00a7 38.1-482.23; 1980, c. 186; 1986, c. 562; 1992, c. 299; 2010, c. 510; 2011, c. 682; 2014, c. 154; 2018, c. 706.","full_text":"A\n\nFor the purpose of providing the funds necessary to carry out the powers and duties of the Association, the board of directors shall assess the member insurers, separately for each account, at such time and for any amounts as the board finds necessary. Assessments shall be due not less than 30 days after prior written notice has been given to the member insurers. Late payments shall accrue interest from the due date compounded quarterly, based upon the average 90-day treasury bill rate for the most recently completed calendar quarter as published in the Federal Reserve Bulletin and shall be subject to a minimum charge of $50.B\n\nThere shall be two classes of assessments, as follows:1\n\nClass A assessments shall be authorized and called for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be authorized and called whether or not related to a particular impaired or insolvent insurer.2\n\nClass B assessments shall be authorized and called to the extent necessary to carry out the powers and duties of the Association under § 38.2-1704 with regard to an impaired or an insolvent insurer.C\n\n1. The amount of any Class A assessment shall be determined by the board and may be authorized and called for current member insurers on a pro rata or non-pro rata basis. If pro rata, the board may provide that it be credited against future Class B assessments. The amount of a Class B assessment, except for assessments related to long-term care insurance, shall be allocated for assessment purposes between the accounts and among the subaccounts of the life insurance and annuity account, pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard deemed by the board in its sole discretion as being fair and reasonable under the circumstances. The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to a methodology included in the plan of operation and approved by the Commission. The methodology shall provide for 50 percent of the assessment to be allocated to accident and sickness member insurers and 50 percent to be allocated to life and annuity member insurers.2\n\nIn determining the shares that shall be allocated to the life insurance and annuity account pursuant to the methodology in subdivision C 1, the guaranty association shall use the following formula: =(0.50 – Life and annuity member insurers’ share of Accident and Sickness Account) \/ (Life and annuity member insurers’ share of Life Insurance and Annuity Account – Life and annuity member insurers’ share of Accident and Sickness Account).3\n\nFor the purposes of the methodology in subdivision C 1 and the formula in subdivision C 2 only, “life and annuity member insurer” means a member insurer for which (i) the sum of its assessable life insurance premiums and annuity premiums is greater than or equal to (ii) its assessable accident and sickness insurance premiums, which shall include its assessable health maintenance organization premiums but shall exclude its assessable premiums written for disability income and long-term care insurance. For purposes of this definition, assessable premiums shall be measured within the state. An “accident and sickness member insurer” means any member insurer not defined as a “life and annuity member insurer.”4\n\nClass B assessments against member insurers for each account and subaccount shall be in the proportion that the premiums received on business in the Commonwealth by each assessed member insurer on policies or contracts covered by each account and subaccount for the three most recent calendar years for which information is available preceding the year in which the member insurer became insolvent or, in the case of an assessment with respect to an impaired insurer, the three most recent calendar years for which information is available preceding the year in which the insurer became impaired, bear to such premiums received on business in the Commonwealth for those calendar years by all assessed member insurers.5\n\nAssessments for funds to meet the requirements of the Association with respect to an impaired or insolvent insurer shall not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under subsection B and computation of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The Association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within 180 days after the assessment is authorized.D\n\nThe Association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred pursuant to a repayment plan approved by the Association.E\n\n1. a. Subject to the provisions of subdivision E 1 b, the total of all assessments authorized by the Association with respect to a member insurer for each subaccount of the life insurance and annuity account and for the accident and sickness account shall not in any one calendar year exceed two percent of that member insurer’s average annual premiums received in the Commonwealth on the policies and contracts covered by the subaccount or account during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.\n\t\t\tb. If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation referenced in subdivision E 1 a shall be equal and limited to the higher of the three-year average annual premiums for the applicable subaccount or account as calculated pursuant to this section.\n\t\t\tc. If the maximum assessment, together with the other assets of the Association in an account, does not provide in one year in that account an amount sufficient to carry out the responsibilities of the Association, the necessary additional funds shall be assessed as soon thereafter as permitted by this chapter.2\n\nThe board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.3\n\nIf the maximum assessment for a subaccount of the life and annuity account in one year does not provide an amount sufficient to carry out the responsibilities of the Association, then pursuant to subdivision C 2, the board shall access the other subaccounts of the life and annuity account for the necessary additional amount, subject to the maximum stated in subdivision E 1.F\n\nIf the Board of Directors of the Association determines that it has surplus funds on hand with respect to an insolvency, the Association shall, in accordance with the process set forth in the certificate of contribution for adjusting or cancelling the unamortized portion of the member insurer’s certificate of contribution in the event of a reimbursement of assessment payments, use such surplus funds to reimburse member insurers for assessment costs not otherwise amortized and offset pursuant to § 38.2-1709 and pay the remaining surplus to the Department of Taxation, for deposit with the State Treasurer for credit to the general fund of the Commonwealth. Within 90 days of making payment of surplus funds to the Department of Taxation for deposit with the State Treasurer, the Association shall notify its member insurers of such payment. If any member insurer contends that it is entitled to any portion of the surplus refunded to the Commonwealth in order to recover assessment costs not otherwise amortized and offset pursuant to § 38.2-1709, then the member insurer may present evidence of such entitlement to the Department of Taxation. If the Department of Taxation determines that the member insurer is entitled to a portion of the surplus funds in order to recover assessment costs not otherwise amortized and offset pursuant to § 38.2-1709, then the State Treasurer shall pay to the member insurer the sum that the Department of Taxation determines that the member insurer is entitled to receive. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the Association and for future losses and claims. For purposes of this subsection, “surplus funds” includes funds that the Association obtains by way of distributions or recoveries from receivers and third parties as reimbursement for its costs in connection with insolvencies and impairments in excess of reasonable amounts retained in an account to provide funds for the continuing expenses of the Association and for future losses and claims.G\n\nIt shall be proper for any member insurer, in determining its premium rates and policy owner dividends as to any kind of insurance or health maintenance organization business within the scope of this chapter, to consider the amount reasonably necessary to meet its assessment obligations under this chapter.H\n\nThe Association shall issue to each member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the Commission, for the amount of the assessment so paid excluding interest penalties. All outstanding certificates shall be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in such form and for such amount, if any, and period of time as the Commission may approve.I\n\n1. A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the Association. The payment shall be available to meet Association obligations during the pendency of the protest or any subsequent appeal. Payment shall be accompanied by a statement in writing that the payment is made under protest and setting forth a brief statement of the grounds for the protest.2\n\nWithin 60 days following the payment of an assessment under protest by a member insurer, the Association shall notify the member insurer in writing of its determination with respect to the protest unless the Association notifies the member insurer that additional time is required to resolve the issues raised by the protest.3\n\nWithin 30 days after a final decision has been made, the Association shall notify the protesting member insurer in writing of that final decision. Within 60 days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the Commission.4\n\nIn the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the Association may refer the protest to the Commission for a final decision, with or without a recommendation from the Association.5\n\nIf the protest or appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the Association.J\n\nThe Association may request information of member insurers in order to aid in the exercise of its power under this section and member insurers shall promptly comply with a request.","order_by":null,"text":{"0":{"id":218290,"text":"For the purpose of providing the funds necessary to carry out the powers and duties of the Association, the board of directors shall assess the member insurers, separately for each account, at such time and for any amounts as the board finds necessary. Assessments shall be due not less than 30 days after prior written notice has been given to the member insurers. Late payments shall accrue interest from the due date compounded quarterly, based upon the average 90-day treasury bill rate for the most recently completed calendar quarter as published in the Federal Reserve Bulletin and shall be subject to a minimum charge of $50.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":218291,"text":"There shall be two classes of assessments, as follows:","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"B1"},"2":{"id":218292,"text":"Class A assessments shall be authorized and called for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be authorized and called whether or not related to a particular impaired or insolvent insurer.","type":"section","prefixes":["B","1"],"prefix":"1","entire_prefix":"B1","prefix_anchor":"B1","level":2,"prior_prefix":"B","next_prefix":"B2"},"3":{"id":218293,"text":"Class B assessments shall be authorized and called to the extent necessary to carry out the powers and duties of the Association under § 38.2-1704 with regard to an impaired or an insolvent insurer.","type":"section","prefixes":["B","2"],"prefix":"2","entire_prefix":"B2","prefix_anchor":"B2","level":2,"prior_prefix":"B1","next_prefix":"C"},"4":{"id":218294,"text":"1. The amount of any Class A assessment shall be determined by the board and may be authorized and called for current member insurers on a pro rata or non-pro rata basis. If pro rata, the board may provide that it be credited against future Class B assessments. The amount of a Class B assessment, except for assessments related to long-term care insurance, shall be allocated for assessment purposes between the accounts and among the subaccounts of the life insurance and annuity account, pursuant to an allocation formula which may be based on the premiums or reserves of the impaired or insolvent insurer or any other standard deemed by the board in its sole discretion as being fair and reasonable under the circumstances. The amount of the Class B assessment for long-term care insurance written by the impaired or insolvent insurer shall be allocated according to a methodology included in the plan of operation and approved by the Commission. The methodology shall provide for 50 percent of the assessment to be allocated to accident and sickness member insurers and 50 percent to be allocated to life and annuity member insurers.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B2","next_prefix":"C2"},"5":{"id":218295,"text":"In determining the shares that shall be allocated to the life insurance and annuity account pursuant to the methodology in subdivision C 1, the guaranty association shall use the following formula: =(0.50 – Life and annuity member insurers’ share of Accident and Sickness Account) \/ (Life and annuity member insurers’ share of Life Insurance and Annuity Account – Life and annuity member insurers’ share of Accident and Sickness Account).","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C","next_prefix":"C3"},"6":{"id":218296,"text":"For the purposes of the methodology in subdivision C 1 and the formula in subdivision C 2 only, “life and annuity member insurer” means a member insurer for which (i) the sum of its assessable life insurance premiums and annuity premiums is greater than or equal to (ii) its assessable accident and sickness insurance premiums, which shall include its assessable health maintenance organization premiums but shall exclude its assessable premiums written for disability income and long-term care insurance. For purposes of this definition, assessable premiums shall be measured within the state. An “accident and sickness member insurer” means any member insurer not defined as a “life and annuity member insurer.”","type":"section","prefixes":["C","3"],"prefix":"3","entire_prefix":"C3","prefix_anchor":"C3","level":2,"prior_prefix":"C2","next_prefix":"C4"},"7":{"id":218297,"text":"Class B assessments against member insurers for each account and subaccount shall be in the proportion that the premiums received on business in the Commonwealth by each assessed member insurer on policies or contracts covered by each account and subaccount for the three most recent calendar years for which information is available preceding the year in which the member insurer became insolvent or, in the case of an assessment with respect to an impaired insurer, the three most recent calendar years for which information is available preceding the year in which the insurer became impaired, bear to such premiums received on business in the Commonwealth for those calendar years by all assessed member insurers.","type":"section","prefixes":["C","4"],"prefix":"4","entire_prefix":"C4","prefix_anchor":"C4","level":2,"prior_prefix":"C3","next_prefix":"C5"},"8":{"id":218298,"text":"Assessments for funds to meet the requirements of the Association with respect to an impaired or insolvent insurer shall not be authorized or called until necessary to implement the purposes of this chapter. Classification of assessments under subsection B and computation of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The Association shall notify each member insurer of its anticipated pro rata share of an authorized assessment not yet called within 180 days after the assessment is authorized.","type":"section","prefixes":["C","5"],"prefix":"5","entire_prefix":"C5","prefix_anchor":"C5","level":2,"prior_prefix":"C4","next_prefix":"D"},"9":{"id":218299,"text":"The Association may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations. In the event an assessment against a member insurer is abated or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred pursuant to a repayment plan approved by the Association.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C5","next_prefix":"E"},"10":{"id":218300,"text":"1. a. Subject to the provisions of subdivision E 1 b, the total of all assessments authorized by the Association with respect to a member insurer for each subaccount of the life insurance and annuity account and for the accident and sickness account shall not in any one calendar year exceed two percent of that member insurer’s average annual premiums received in the Commonwealth on the policies and contracts covered by the subaccount or account during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer.\n\t\t\tb. If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums for purposes of the aggregate assessment percentage limitation referenced in subdivision E 1 a shall be equal and limited to the higher of the three-year average annual premiums for the applicable subaccount or account as calculated pursuant to this section.\n\t\t\tc. If the maximum assessment, together with the other assets of the Association in an account, does not provide in one year in that account an amount sufficient to carry out the responsibilities of the Association, the necessary additional funds shall be assessed as soon thereafter as permitted by this chapter.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"E2"},"11":{"id":218301,"text":"The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers, when the maximum assessment will be insufficient to cover anticipated claims.","type":"section","prefixes":["E","2"],"prefix":"2","entire_prefix":"E2","prefix_anchor":"E2","level":2,"prior_prefix":"E","next_prefix":"E3"},"12":{"id":218302,"text":"If the maximum assessment for a subaccount of the life and annuity account in one year does not provide an amount sufficient to carry out the responsibilities of the Association, then pursuant to subdivision C 2, the board shall access the other subaccounts of the life and annuity account for the necessary additional amount, subject to the maximum stated in subdivision E 1.","type":"section","prefixes":["E","3"],"prefix":"3","entire_prefix":"E3","prefix_anchor":"E3","level":2,"prior_prefix":"E2","next_prefix":"F"},"13":{"id":218303,"text":"If the Board of Directors of the Association determines that it has surplus funds on hand with respect to an insolvency, the Association shall, in accordance with the process set forth in the certificate of contribution for adjusting or cancelling the unamortized portion of the member insurer’s certificate of contribution in the event of a reimbursement of assessment payments, use such surplus funds to reimburse member insurers for assessment costs not otherwise amortized and offset pursuant to § 38.2-1709 and pay the remaining surplus to the Department of Taxation, for deposit with the State Treasurer for credit to the general fund of the Commonwealth. Within 90 days of making payment of surplus funds to the Department of Taxation for deposit with the State Treasurer, the Association shall notify its member insurers of such payment. If any member insurer contends that it is entitled to any portion of the surplus refunded to the Commonwealth in order to recover assessment costs not otherwise amortized and offset pursuant to § 38.2-1709, then the member insurer may present evidence of such entitlement to the Department of Taxation. If the Department of Taxation determines that the member insurer is entitled to a portion of the surplus funds in order to recover assessment costs not otherwise amortized and offset pursuant to § 38.2-1709, then the State Treasurer shall pay to the member insurer the sum that the Department of Taxation determines that the member insurer is entitled to receive. A reasonable amount may be retained in any account to provide funds for the continuing expenses of the Association and for future losses and claims. For purposes of this subsection, “surplus funds” includes funds that the Association obtains by way of distributions or recoveries from receivers and third parties as reimbursement for its costs in connection with insolvencies and impairments in excess of reasonable amounts retained in an account to provide funds for the continuing expenses of the Association and for future losses and claims.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E3","next_prefix":"G"},"14":{"id":218304,"text":"It shall be proper for any member insurer, in determining its premium rates and policy owner dividends as to any kind of insurance or health maintenance organization business within the scope of this chapter, to consider the amount reasonably necessary to meet its assessment obligations under this chapter.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F","next_prefix":"H"},"15":{"id":218305,"text":"The Association shall issue to each member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the Commission, for the amount of the assessment so paid excluding interest penalties. All outstanding certificates shall be of equal dignity and priority without reference to amounts or dates of issue. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in such form and for such amount, if any, and period of time as the Commission may approve.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G","next_prefix":"I"},"16":{"id":218306,"text":"1. A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the Association. The payment shall be available to meet Association obligations during the pendency of the protest or any subsequent appeal. Payment shall be accompanied by a statement in writing that the payment is made under protest and setting forth a brief statement of the grounds for the protest.","type":"section","prefixes":["I"],"prefix":"I","entire_prefix":"I","prefix_anchor":"I","level":1,"prior_prefix":"H","next_prefix":"I2"},"17":{"id":218307,"text":"Within 60 days following the payment of an assessment under protest by a member insurer, the Association shall notify the member insurer in writing of its determination with respect to the protest unless the Association notifies the member insurer that additional time is required to resolve the issues raised by the protest.","type":"section","prefixes":["I","2"],"prefix":"2","entire_prefix":"I2","prefix_anchor":"I2","level":2,"prior_prefix":"I","next_prefix":"I3"},"18":{"id":218308,"text":"Within 30 days after a final decision has been made, the Association shall notify the protesting member insurer in writing of that final decision. Within 60 days of receipt of notice of the final decision, the protesting member insurer may appeal that final action to the Commission.","type":"section","prefixes":["I","3"],"prefix":"3","entire_prefix":"I3","prefix_anchor":"I3","level":2,"prior_prefix":"I2","next_prefix":"I4"},"19":{"id":218309,"text":"In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the Association may refer the protest to the Commission for a final decision, with or without a recommendation from the Association.","type":"section","prefixes":["I","4"],"prefix":"4","entire_prefix":"I4","prefix_anchor":"I4","level":2,"prior_prefix":"I3","next_prefix":"I5"},"20":{"id":218310,"text":"If the protest or appeal on the assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate actually earned by the Association.","type":"section","prefixes":["I","5"],"prefix":"5","entire_prefix":"I5","prefix_anchor":"I5","level":2,"prior_prefix":"I4","next_prefix":"J"},"21":{"id":218311,"text":"The Association may request information of member insurers in order to aid in the exercise of its power under this section and member insurers shall promptly comply with a request.","type":"section","prefixes":["J"],"prefix":"J","entire_prefix":"J","prefix_anchor":"J","level":1,"prior_prefix":"I5"}},"ancestry":[{"id":14902,"edition_id":1,"name":"Establishment and Operation of the Association","identifier":"1","label":"article","depth":3,"order_by":1,"parent_id":14649,"metadata":{},"date_created":"2026-06-26 03:50:41","date_modified":"2026-06-26 03:50:41","permalink":{"id":212319,"object_type":"structure","relational_id":14902,"identifier":"1","token":"38.2\/17\/1","url":"\/38.2\/17\/1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":14649,"edition_id":1,"name":"Virginia Life, Accident and Sickness Insurance Guaranty Association","identifier":"17","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:49:08","date_modified":"2026-06-26 03:49:08","permalink":{"id":212317,"object_type":"structure","relational_id":14649,"identifier":"17","token":"38.2\/17","url":"\/38.2\/17\/","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":85176,"structure_id":14902,"section_number":"38.2-1700","catch_line":"Purpose and applicability of chapter","url":"\/38.2-1700\/","token":"38.2\/17\/1\/38.2-1700","metadata":false},{"id":79730,"structure_id":14902,"section_number":"38.2-1701","catch_line":"Definitions","url":"\/38.2-1701\/","token":"38.2\/17\/1\/38.2-1701","metadata":false},{"id":62816,"structure_id":14902,"section_number":"38.2-1702","catch_line":"Association; creation; memberships; accounts; supervision","url":"\/38.2-1702\/","token":"38.2\/17\/1\/38.2-1702","metadata":false},{"id":72232,"structure_id":14902,"section_number":"38.2-1703","catch_line":"Board of directors of Association","url":"\/38.2-1703\/","token":"38.2\/17\/1\/38.2-1703","metadata":false},{"id":65404,"structure_id":14902,"section_number":"38.2-1704","catch_line":"Powers and duties of Association","url":"\/38.2-1704\/","token":"38.2\/17\/1\/38.2-1704","metadata":false},{"id":59600,"structure_id":14902,"section_number":"38.2-1705","catch_line":"Assessments","url":"\/38.2-1705\/","token":"38.2\/17\/1\/38.2-1705","metadata":false},{"id":74544,"structure_id":14902,"section_number":"38.2-1706","catch_line":"Plan of operation","url":"\/38.2-1706\/","token":"38.2\/17\/1\/38.2-1706","metadata":false},{"id":64107,"structure_id":14902,"section_number":"38.2-1707","catch_line":"Duties and powers of the Commission","url":"\/38.2-1707\/","token":"38.2\/17\/1\/38.2-1707","metadata":false},{"id":65805,"structure_id":14902,"section_number":"38.2-1708","catch_line":"Detection and prevention of insolvencies","url":"\/38.2-1708\/","token":"38.2\/17\/1\/38.2-1708","metadata":false},{"id":69918,"structure_id":14902,"section_number":"38.2-1709","catch_line":"Tax write-offs of certificates of contributions","url":"\/38.2-1709\/","token":"38.2\/17\/1\/38.2-1709","metadata":false},{"id":56896,"structure_id":14902,"section_number":"38.2-1710","catch_line":"Miscellaneous provisions","url":"\/38.2-1710\/","token":"38.2\/17\/1\/38.2-1710","metadata":false},{"id":61703,"structure_id":14902,"section_number":"38.2-1711","catch_line":"Examination of the Association; annual report","url":"\/38.2-1711\/","token":"38.2\/17\/1\/38.2-1711","metadata":false},{"id":57475,"structure_id":14902,"section_number":"38.2-1712","catch_line":"Tax exemptions","url":"\/38.2-1712\/","token":"38.2\/17\/1\/38.2-1712","metadata":false},{"id":77644,"structure_id":14902,"section_number":"38.2-1713","catch_line":"Immunity","url":"\/38.2-1713\/","token":"38.2\/17\/1\/38.2-1713","metadata":false},{"id":59069,"structure_id":14902,"section_number":"38.2-1714","catch_line":"Stay of proceedings; reopening default judgments","url":"\/38.2-1714\/","token":"38.2\/17\/1\/38.2-1714","metadata":false},{"id":59869,"structure_id":14902,"section_number":"38.2-1715","catch_line":"Prohibited advertisement of Association coverage in insurance sales; notice to policy owners","url":"\/38.2-1715\/","token":"38.2\/17\/1\/38.2-1715","metadata":false}],"previous_section":{"id":65404,"structure_id":14902,"section_number":"38.2-1704","catch_line":"Powers and duties of Association","url":"\/38.2-1704\/","token":"38.2\/17\/1\/38.2-1704","metadata":false},"next_section":{"id":74544,"structure_id":14902,"section_number":"38.2-1706","catch_line":"Plan of operation","url":"\/38.2-1706\/","token":"38.2\/17\/1\/38.2-1706","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1705\/","history_text":"

This law was first created in 1976. The record of its establishment is cataloged in chapter 330 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 1976 \u201cActs\u201d aren\u2019t available online. It has been modified 7 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 1980, chapter 186; in 1986, chapter 562; in 1992, chapter 299; in 2010, chapter 510<\/a>; in 2011, chapter 682<\/a>; in 2014, chapter 154<\/a>; in 2018, chapter 706<\/a>.<\/p>","references":[{"id":85176,"section_number":"38.2-1700","catch_line":"Purpose and applicability of chapter","order_by":null,"url":"\/38.2-1700\/"},{"id":65404,"section_number":"38.2-1704","catch_line":"Powers and duties of Association","order_by":null,"url":"\/38.2-1704\/"},{"id":74544,"section_number":"38.2-1706","catch_line":"Plan of operation","order_by":null,"url":"\/38.2-1706\/"},{"id":69918,"section_number":"38.2-1709","catch_line":"Tax write-offs of certificates of contributions","order_by":null,"url":"\/38.2-1709\/"},{"id":56225,"section_number":"38.2-1720","catch_line":"Use of safety fund, repayment, etc","order_by":null,"url":"\/38.2-1720\/"}],"refers_to":[{"id":65404,"section_number":"38.2-1704","catch_line":"Powers and duties of Association","order_by":null,"url":"\/38.2-1704\/"},{"id":69918,"section_number":"38.2-1709","catch_line":"Tax write-offs of certificates of contributions","order_by":null,"url":"\/38.2-1709\/"}],"permalink":{"id":212341,"object_type":"law","relational_id":59600,"identifier":"38.2-1705","token":"38.2\/17\/1\/38.2-1705","url":"\/38.2-1705\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1705\/","token":"38.2\/17\/1\/38.2-1705","dublin_core":{"Title":"Assessments","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1705","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> For the purpose of providing the funds necessary to carry out the powers and duties of the Association<\/span>, the board of directors shall assess the member insurers<\/span>, separately for each account<\/span>, at such time and for any amounts as the board finds necessary. Assessments shall be due not less than 30 days after prior written notice has been given to the member insurers<\/span>. Late payments shall accrue interest from the due date compounded quarterly, based upon the average 90-day treasury bill rate<\/span> for the most recently completed calendar quarter as published in the Federal Reserve Bulletin and shall be subject to a minimum charge of $50. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> There shall be two classes of assessments, as follows: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Class A assessments shall be authorized<\/span> and called<\/span> for the purpose of meeting administrative and legal costs and other expenses. Class A assessments may be authorized<\/span> and called<\/span> whether or not related to a particular impaired or insolvent insurer<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Class B assessments shall be authorized<\/span> and called<\/span> to the extent necessary to carry out the powers and duties of the Association<\/span> under § 38.2-1704<\/a> with regard to an impaired or an insolvent insurer<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> 1. The amount of any Class A assessment shall be determined by the board and may be authorized<\/span> and called<\/span> for current member insurers on a pro rata or non-pro rata basis. If pro rata, the board may provide that it be credited against future Class B assessments. The amount of a Class B assessment, except for assessments related to long-term care insurance<\/span>, shall be allocated for assessment purposes between the accounts<\/span> and among the subaccounts of the life insurance<\/span> and annuity account<\/span>, pursuant to an allocation formula which may be based on the premiums<\/span> or reserves of the impaired or insolvent insurer<\/span> or any other standard deemed by the board in its sole discretion as being fair and reasonable under the circumstances. The amount of the Class B assessment for long-term care insurance<\/span> written by the impaired or insolvent insurer<\/span> shall be allocated according to a methodology included in the plan of operation and approved by the Commission<\/span>. The methodology shall provide for 50 percent of the assessment to be allocated to accident and sickness member insurers<\/span> and 50 percent to be allocated to life and annuity member insurers<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> In determining the shares that shall be allocated to the life insurance<\/span> and annuity account<\/span> pursuant to the methodology in subdivision C 1, the guaranty association<\/span> shall use the following formula: =(0.50 – Life and annuity member insurers<\/span>’ share of Accident and Sickness Account<\/span>) \/ (Life and annuity member insurers<\/span>’ share of Life Insurance<\/span> and Annuity Account<\/span> – Life and annuity member insurers<\/span>’ share of Accident and Sickness Account<\/span>). <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> For the purposes of the methodology in subdivision C 1 and the formula in subdivision C 2 only, “life and annuity member insurer<\/span>” means a member insurer for which (i) the sum of its assessable life insurance<\/span> premiums<\/span> and annuity premiums<\/span> is greater than or equal to (ii) its assessable accident and sickness insurance<\/span> premiums<\/span>, which shall include its assessable health maintenance organization premiums<\/span> but shall exclude its assessable premiums<\/span> written for disability income and long-term care insurance<\/span>. For purposes of this definition, assessable premiums<\/span> shall be measured within the state<\/span>. An “accident and sickness member insurer<\/span>” means any member insurer not defined as a “life and annuity member insurer<\/span>.” <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Class B assessments against member insurers for each account<\/span> and subaccount shall be in the proportion that the premiums<\/span> received on business in the Commonwealth by each assessed member insurer on policies or contracts<\/span> covered by each account<\/span> and subaccount for the three most recent calendar years for which information is available preceding the year in which the member insurer became insolvent or, in the case of an assessment with respect to an impaired insurer<\/span>, the three most recent calendar years for which information is available preceding the year in which the insurer became impaired, bear to such premiums<\/span> received on business in the Commonwealth for those calendar years by all assessed member insurers. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Assessments for funds to meet the requirements of the Association<\/span> with respect to an impaired or insolvent insurer<\/span> shall not be authorized or called<\/span> until necessary to implement the purposes of this chapter. Classification of assessments under subsection B and computation of assessments under this subsection shall be made with a reasonable degree of accuracy, recognizing that exact determinations may not always be possible. The Association<\/span> shall notify each member insurer of its anticipated pro rata share of an authorized assessment<\/span> not yet called<\/span> within 180 days after the assessment is authorized. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The Association<\/span> may abate or defer, in whole or in part, the assessment of a member insurer if, in the opinion<\/span> of the board, payment of the assessment would endanger the ability of the member insurer to fulfill its contractual obligations<\/span>. In the event an assessment against a member insurer is abated or deferred in whole or in part, the amount by which the assessment is abated or deferred may be assessed against the other member insurers in a manner consistent with the basis for assessments set forth in this section. Once the conditions that caused a deferral have been removed or rectified, the member insurer shall pay all assessments that were deferred pursuant to a repayment plan approved by the Association<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> 1. a. Subject to the provisions of subdivision E 1 b, the total of all assessments authorized by the Association<\/span> with respect to a member insurer for each subaccount of the life insurance<\/span> and annuity account<\/span> and for the accident and sickness account<\/span> shall not in any one calendar year exceed two percent of that member insurer’s average annual premiums<\/span> received in the Commonwealth on the policies and contracts<\/span> covered by the subaccount or account<\/span> during the three calendar years preceding the year in which the member insurer became an impaired or insolvent insurer<\/span>.\n\t\t\tb. If two or more assessments are authorized in one calendar year with respect to member insurers that become impaired or insolvent in different calendar years, the average annual premiums<\/span> for purposes of the aggregate assessment percentage limitation referenced in subdivision E 1 a shall be equal and limited to the higher of the three-year average annual premiums<\/span> for the applicable subaccount or account<\/span> as calculated pursuant to this section.\n\t\t\tc. If the maximum assessment, together with the other assets<\/span> of the Association<\/span> in an account<\/span>, does not provide in one year in that account<\/span> an amount sufficient to carry out the responsibilities of the Association<\/span>, the necessary additional funds shall be assessed as soon thereafter as permitted by this chapter. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> The board may provide in the plan of operation a method of allocating funds among claims, whether relating to one or more impaired or insolvent insurers<\/span>, when the maximum assessment will be insufficient to cover anticipated claims. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> If the maximum assessment for a subaccount of the life and annuity account<\/span> in one year does not provide an amount sufficient to carry out the responsibilities of the Association<\/span>, then pursuant to subdivision C 2, the board shall access the other subaccounts of the life and annuity account<\/span> for the necessary additional amount, subject to the maximum stated in subdivision E 1. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> If the Board of Directors of the Association<\/span> determines that it has surplus funds<\/span> on hand with respect to an insolvency, the Association<\/span> shall, in accordance with the process set forth in the certificate of contribution for adjusting or cancelling the unamortized portion of the member insurer’s certificate of contribution in the event of a reimbursement of assessment payments, use such surplus funds<\/span> to reimburse member insurers for assessment costs not otherwise amortized and offset pursuant to § 38.2-1709<\/a> and pay the remaining surplus to the Department of Taxation, for deposit with the State<\/span> Treasurer for credit to the general fund of the Commonwealth. Within 90 days of making payment of surplus funds<\/span> to the Department of Taxation for deposit with the State<\/span> Treasurer, the Association<\/span> shall notify its member insurers of such payment. If any member insurer contends that it is entitled to any portion of the surplus refunded to the Commonwealth in order<\/span> to recover assessment costs not otherwise amortized and offset pursuant to § 38.2-1709<\/a>, then the member insurer may present evidence<\/span> of such entitlement to the Department of Taxation. If the Department of Taxation determines that the member insurer is entitled to a portion of the surplus funds<\/span> in order<\/span> to recover assessment costs not otherwise amortized and offset pursuant to § 38.2-1709<\/a>, then the State<\/span> Treasurer shall pay to the member insurer the sum that the Department of Taxation determines that the member insurer is entitled to receive. A reasonable amount may be retained in any account<\/span> to provide funds for the continuing expenses of the Association<\/span> and for future losses and claims. For purposes of this subsection, “surplus funds<\/span>” includes funds that the Association<\/span> obtains by way of distributions or recoveries from receivers and third parties as reimbursement for its costs in connection with insolvencies and impairments in excess of reasonable amounts retained in an account<\/span> to provide funds for the continuing expenses of the Association<\/span> and for future losses and claims. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> It shall be proper for any member insurer, in determining its premium rates<\/span><\/span> and policy owner<\/span> dividends as to any kind of insurance<\/span> or health maintenance organization business within the scope of this chapter, to consider the amount reasonably necessary to meet its assessment obligations under this chapter. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> The Association<\/span> shall issue<\/span> to each member insurer paying an assessment under this chapter, other than a Class A assessment, a certificate of contribution, in a form prescribed by the Commission<\/span>, for the amount of the assessment so paid excluding interest penalties. All outstanding certificates shall be of equal dignity and priority without reference to amounts or dates of issue<\/span>. A certificate of contribution may be shown by the member insurer in its financial statement as an asset in such form and for such amount, if any, and period of time as the Commission<\/span> may approve. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

I.<\/span> 1. A member insurer that wishes to protest all or part of an assessment shall pay when due the full amount of the assessment as set forth in the notice provided by the Association<\/span>. The payment shall be available to meet Association<\/span> obligations during the pendency of the protest or any subsequent appeal<\/span>. Payment shall be accompanied by a statement in writing that the payment is made under protest and setting forth a brief<\/span> statement of the grounds for the protest. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Within 60 days following the payment of an assessment under protest by a member insurer, the Association<\/span> shall notify the member insurer in writing of its determination with respect to the protest unless the Association<\/span> notifies the member insurer that additional time is required to resolve the issues<\/span> raised by the protest. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Within 30 days after a final decision has been made, the Association<\/span> shall notify the protesting member insurer in writing of that final decision. Within 60 days of receipt of notice of the final decision, the protesting member insurer may appeal<\/span> that final action to the Commission<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> In the alternative to rendering a final decision with respect to a protest based on a question regarding the assessment base, the Association<\/span> may refer the protest to the Commission<\/span> for a final decision, with or without a recommendation from the Association<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> If the protest or appeal<\/span> on the assessment is upheld, the amount paid in error or excess shall be returned to the member insurer. Interest on a refund due a protesting member insurer shall be paid at the rate<\/span> actually earned by the Association<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

J.<\/span> The Association<\/span> may request information of member insurers in order<\/span> to aid in the exercise of its power under this section and member insurers shall promptly comply with a request. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nASSESSMENTS (\u00a7 38.2-1705)\n\nA. For the purpose of providing the funds necessary to carry out the powers and\nduties of the Association, the board of directors shall assess the member\ninsurers, separately for each account, at such time and for any amounts as the\nboard finds necessary. Assessments shall be due not less than 30 days after\nprior written notice has been given to the member insurers. Late payments shall\naccrue interest from the due date compounded quarterly, based upon the average\n90-day treasury bill rate for the most recently completed calendar quarter as\npublished in the Federal Reserve Bulletin and shall be subject to a minimum\ncharge of $50.\n\nB. There shall be two classes of assessments, as follows:\n\n 1. Class A assessments shall be authorized and called for the purpose of\n meeting administrative and legal costs and other expenses. Class A assessments\n may be authorized and called whether or not related to a particular impaired\n or insolvent insurer.\n\n 2. Class B assessments shall be authorized and called to the extent necessary\n to carry out the powers and duties of the Association under § 38.2-1704\n with regard to an impaired or an insolvent insurer.\n\nC. 1. The amount of any Class A assessment shall be determined by the board and\nmay be authorized and called for current member insurers on a pro rata or\nnon-pro rata basis. If pro rata, the board may provide that it be credited\nagainst future Class B assessments. The amount of a Class B assessment, except\nfor assessments related to long-term care insurance, shall be allocated for\nassessment purposes between the accounts and among the subaccounts of the life\ninsurance and annuity account, pursuant to an allocation formula which may be\nbased on the premiums or reserves of the impaired or insolvent insurer or any\nother standard deemed by the board in its sole discretion as being fair and\nreasonable under the circumstances. The amount of the Class B assessment for\nlong-term care insurance written by the impaired or insolvent insurer shall be\nallocated according to a methodology included in the plan of operation and\napproved by the Commission. The methodology shall provide for 50 percent of the\nassessment to be allocated to accident and sickness member insurers and 50\npercent to be allocated to life and annuity member insurers.\n\n 2. In determining the shares that shall be allocated to the life insurance and\n annuity account pursuant to the methodology in subdivision C 1, the guaranty\n association shall use the following formula: =(0.50 – Life and annuity\n member insurers’ share of Accident and Sickness Account) \/ (Life and\n annuity member insurers’ share of Life Insurance and Annuity Account\n – Life and annuity member insurers’ share of Accident and Sickness\n Account).\n\n 3. For the purposes of the methodology in subdivision C 1 and the formula in\n subdivision C 2 only, “life and annuity member insurer” means a\n member insurer for which (i) the sum of its assessable life insurance premiums\n and annuity premiums is greater than or equal to (ii) its assessable accident\n and sickness insurance premiums, which shall include its assessable health\n maintenance organization premiums but shall exclude its assessable premiums\n written for disability income and long-term care insurance. For purposes of\n this definition, assessable premiums shall be measured within the state. An\n “accident and sickness member insurer” means any member insurer\n not defined as a “life and annuity member insurer.”\n\n 4. Class B assessments against member insurers for each account and subaccount\n shall be in the proportion that the premiums received on business in the\n Commonwealth by each assessed member insurer on policies or contracts covered\n by each account and subaccount for the three most recent calendar years for\n which information is available preceding the year in which the member insurer\n became insolvent or, in the case of an assessment with respect to an impaired\n insurer, the three most recent calendar years for which information is\n available preceding the year in which the insurer became impaired, bear to\n such premiums received on business in the Commonwealth for those calendar\n years by all assessed member insurers.\n\n 5. Assessments for funds to meet the requirements of the Association with\n respect to an impaired or insolvent insurer shall not be authorized or called\n until necessary to implement the purposes of this chapter. Classification of\n assessments under subsection B and computation of assessments under this\n subsection shall be made with a reasonable degree of accuracy, recognizing\n that exact determinations may not always be possible. The Association shall\n notify each member insurer of its anticipated pro rata share of an authorized\n assessment not yet called within 180 days after the assessment is authorized.\n\nD. The Association may abate or defer, in whole or in part, the assessment of a\nmember insurer if, in the opinion of the board, payment of the assessment would\nendanger the ability of the member insurer to fulfill its contractual\nobligations. In the event an assessment against a member insurer is abated or\ndeferred in whole or in part, the amount by which the assessment is abated or\ndeferred may be assessed against the other member insurers in a manner\nconsistent with the basis for assessments set forth in this section. Once the\nconditions that caused a deferral have been removed or rectified, the member\ninsurer shall pay all assessments that were deferred pursuant to a repayment\nplan approved by the Association.\n\nE. 1. a. Subject to the provisions of subdivision E 1 b, the total of all\nassessments authorized by the Association with respect to a member insurer for\neach subaccount of the life insurance and annuity account and for the accident\nand sickness account shall not in any one calendar year exceed two percent of\nthat member insurer’s average annual premiums received in the Commonwealth\non the policies and contracts covered by the subaccount or account during the\nthree calendar years preceding the year in which the member insurer became an\nimpaired or insolvent insurer.\n\t\t\tb. If two or more assessments are authorized in one calendar year with\nrespect to member insurers that become impaired or insolvent in different\ncalendar years, the average annual premiums for purposes of the aggregate\nassessment percentage limitation referenced in subdivision E 1 a shall be equal\nand limited to the higher of the three-year average annual premiums for the\napplicable subaccount or account as calculated pursuant to this section.\n\t\t\tc. If the maximum assessment, together with the other assets of the\nAssociation in an account, does not provide in one year in that account an\namount sufficient to carry out the responsibilities of the Association, the\nnecessary additional funds shall be assessed as soon thereafter as permitted by\nthis chapter.\n\n 2. The board may provide in the plan of operation a method of allocating funds\n among claims, whether relating to one or more impaired or insolvent insurers,\n when the maximum assessment will be insufficient to cover anticipated claims.\n\n 3. If the maximum assessment for a subaccount of the life and annuity account\n in one year does not provide an amount sufficient to carry out the\n responsibilities of the Association, then pursuant to subdivision C 2, the\n board shall access the other subaccounts of the life and annuity account for\n the necessary additional amount, subject to the maximum stated in subdivision\n E 1.\n\nF. If the Board of Directors of the Association determines that it has surplus\nfunds on hand with respect to an insolvency, the Association shall, in\naccordance with the process set forth in the certificate of contribution for\nadjusting or cancelling the unamortized portion of the member insurer’s\ncertificate of contribution in the event of a reimbursement of assessment\npayments, use such surplus funds to reimburse member insurers for assessment\ncosts not otherwise amortized and offset pursuant to § 38.2-1709 and pay\nthe remaining surplus to the Department of Taxation, for deposit with the State\nTreasurer for credit to the general fund of the Commonwealth. Within 90 days of\nmaking payment of surplus funds to the Department of Taxation for deposit with\nthe State Treasurer, the Association shall notify its member insurers of such\npayment. If any member insurer contends that it is entitled to any portion of\nthe surplus refunded to the Commonwealth in order to recover assessment costs\nnot otherwise amortized and offset pursuant to § 38.2-1709, then the member\ninsurer may present evidence of such entitlement to the Department of Taxation.\nIf the Department of Taxation determines that the member insurer is entitled to\na portion of the surplus funds in order to recover assessment costs not\notherwise amortized and offset pursuant to § 38.2-1709, then the State\nTreasurer shall pay to the member insurer the sum that the Department of\nTaxation determines that the member insurer is entitled to receive. A reasonable\namount may be retained in any account to provide funds for the continuing\nexpenses of the Association and for future losses and claims. For purposes of\nthis subsection, “surplus funds” includes funds that the Association\nobtains by way of distributions or recoveries from receivers and third parties\nas reimbursement for its costs in connection with insolvencies and impairments\nin excess of reasonable amounts retained in an account to provide funds for the\ncontinuing expenses of the Association and for future losses and claims.\n\nG. It shall be proper for any member insurer, in determining its premium rates\nand policy owner dividends as to any kind of insurance or health maintenance\norganization business within the scope of this chapter, to consider the amount\nreasonably necessary to meet its assessment obligations under this chapter.\n\nH. The Association shall issue to each member insurer paying an assessment under\nthis chapter, other than a Class A assessment, a certificate of contribution, in\na form prescribed by the Commission, for the amount of the assessment so paid\nexcluding interest penalties. All outstanding certificates shall be of equal\ndignity and priority without reference to amounts or dates of issue. A\ncertificate of contribution may be shown by the member insurer in its financial\nstatement as an asset in such form and for such amount, if any, and period of\ntime as the Commission may approve.\n\nI. 1. A member insurer that wishes to protest all or part of an assessment shall\npay when due the full amount of the assessment as set forth in the notice\nprovided by the Association. The payment shall be available to meet Association\nobligations during the pendency of the protest or any subsequent appeal. Payment\nshall be accompanied by a statement in writing that the payment is made under\nprotest and setting forth a brief statement of the grounds for the protest.\n\n 2. Within 60 days following the payment of an assessment under protest by a\n member insurer, the Association shall notify the member insurer in writing of\n its determination with respect to the protest unless the Association notifies\n the member insurer that additional time is required to resolve the issues\n raised by the protest.\n\n 3. Within 30 days after a final decision has been made, the Association shall\n notify the protesting member insurer in writing of that final decision. Within\n 60 days of receipt of notice of the final decision, the protesting member\n insurer may appeal that final action to the Commission.\n\n 4. In the alternative to rendering a final decision with respect to a protest\n based on a question regarding the assessment base, the Association may refer\n the protest to the Commission for a final decision, with or without a\n recommendation from the Association.\n\n 5. If the protest or appeal on the assessment is upheld, the amount paid in\n error or excess shall be returned to the member insurer. Interest on a refund\n due a protesting member insurer shall be paid at the rate actually earned by\n the Association.\n\nJ. The Association may request information of member insurers in order to aid in\nthe exercise of its power under this section and member insurers shall promptly\ncomply with a request.\n\nHISTORY: 1976, c. 330, \u00a7 38.1-482.23; 1980, c. 186; 1986, c. 562; 1992, c. 299;\n2010, c. 510; 2011, c. 682; 2014, c. 154; 2018, c. 706.","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}}