{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-2905.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-2905.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-2905.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-2905.html"}],"law_id":56099,"edition_id":1,"section_id":56099,"structure_id":13381,"section_number":"38.2-2905","catch_line":"Policy forms; applicants to be issued policies; cancellation of policies; rates; group retrospective rating plan; examination of business of Association","history":"1988, cc. 769, 783.","full_text":"A\n\nAll policies issued by the Association shall be subject to the group retrospective premium adjustment and to the stabilization reserve fund required by § 38.2-2906. No policy form shall be used by the Association unless it has been filed with the Commission and either (i) the Commission has approved it or (ii) thirty days have elapsed and the Commission has not disapproved the form or endorsement for one or more of the reasons enumerated in subsection A of § 38.2-317.B\n\nPolicies shall be issued by the Association, after receipt of the premium or portion of the premium prescribed by the plan of operation, to applicants that (i) meet the minimum underwriting standards of the Association, and (ii) have no unpaid or uncontested premium due as evidenced by the applicant having failed to make written objection to premium charges within thirty days after billing.C\n\nAny policy issued by the Association may be cancelled for any one of the following reasons:1\n\nNonpayment of premium or portion of the premium;2\n\nSuspension or revocation of the insured’s license to conduct business;3\n\nFailure of the insured to meet the minimum underwriting standards;4\n\nFailure of the insured to meet other minimum standards prescribed by the plan of operation; or5\n\nNonpayment of any stabilization reserve fund charge.D\n\nThe rates, rating plans, rating rules, rating classifications, premium payment plans and territories applicable to the insurance written by the Association, and related supplementary rate information shall be subject to the provisions of Chapter 20 (§ 38.2-2000 et seq.) of this title. Due consideration shall be given to the past and prospective loss and expense experience for the line, subclassification or type of commercial liability insurance written in this Commonwealth, trends in the frequency and severity of losses, the investment income of the Association, and other information the Commission requires. All rates shall be on an actuarially sound basis, giving due consideration to the stabilization reserve fund, and shall be calculated to be self-supporting. The Commission shall take all appropriate steps to make available to the Association the loss and expense experience of insurers writing or having written the same line, subclassification or type of commercial liability insurance in this Commonwealth.E\n\nAll policies issued by the Association shall be subject to a nonprofit group retrospective premium adjustment to be approved by the Commission under which the final total premium for all policyholders for each line, subclassification or type of commercial liability insurance issued each year by the Association, as a group, will be calculated based upon the experience of all such policyholders. The experience of all such policyholders shall be calculated following the end of each year and shall be based upon earned premiums, administrative expenses, loss and loss adjustment expenses, and taxes, plus a reasonable allowance for contingencies and servicing, for each line, subclassification or type of commercial liability insurance. Policyholders shall be given full credit for all investment income, net of expenses and a reasonable management fee on policyholder supplied funds. Any final premium resulting from a retrospective premium adjustment will be collected from those moneys in the stabilization reserve fund set forth in § 38.2-2906 that are attributable to the policies written for the particular line, subclassification or type of commercial liability insurance or group of such risks for which activation occurred pursuant to § 38.2-2901. The maximum premium for all policyholders as a group shall be limited as provided in § 38.2-2906.F\n\n1. If the stabilization reserve fund account for one or more lines, subclassifications or types of commercial liability insurance is exhausted in the payment of the maximum final premium for all such policies issued during the year for which a deficit exists, the Association shall certify to the Commission the estimated amount of any remaining deficit for any year’s policies. Within sixty days after such certification, the Commission shall authorize the Association to recover from the members their respective share of such deficit. No member insurer may be assessed in any year an amount greater than two percent of the member’s direct gross premium income as defined in \u00a7 58.1-2500 from liability insurance for the calendar year preceding the assessment. If an assessment in any year is not sufficient to eliminate such deficit, a like assessment may be made the ensuing year but not thereafter.2\n\nA member shall be permitted to recover any assessment made by the Association under subdivision 1 of this subsection by deducting the member’s share of the deficit from future premium taxes due the Commonwealth. The amount of premium tax deduction for each member’s share of the deficit shall be apportioned by the Commission so that in the aggregate, the total premium tax deduction permitted for all members in any one taxable year shall not exceed 0.05 of one percent of the direct gross premium income for the liability insurance written by member insurers defined in subsection A of § 38.2-2901. To the extent that the said 0.05 of one percent is reached in any one taxable year, any amount not so offset may be carried over to a subsequent year or years.G\n\nIn the event that sufficient funds are not available for the sound financial operation of the Association, subject to recoupment as provided in this chapter and the plan of operation, all members shall, on a temporary basis, contribute to the financial requirements of the Association in the manner provided in this chapter. The contribution shall be reimbursed to the members by the procedure set forth in subdivision 2 of subsection F of this section.H\n\nThe Commission shall examine the business of the Association as often as it deems appropriate to make certain that the group retrospective premium adjustments are being calculated and applied in a manner consistent with this section. If the Commission finds that the group retrospective premium adjustments are not being made in a manner consistent with this section, it shall issue an order to the Association, specifying (i) how such calculation and application are not consistent and (ii) stating what corrective action shall be taken.","order_by":null,"text":{"0":{"id":205606,"text":"All policies issued by the Association shall be subject to the group retrospective premium adjustment and to the stabilization reserve fund required by § 38.2-2906. No policy form shall be used by the Association unless it has been filed with the Commission and either (i) the Commission has approved it or (ii) thirty days have elapsed and the Commission has not disapproved the form or endorsement for one or more of the reasons enumerated in subsection A of § 38.2-317.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":205607,"text":"Policies shall be issued by the Association, after receipt of the premium or portion of the premium prescribed by the plan of operation, to applicants that (i) meet the minimum underwriting standards of the Association, and (ii) have no unpaid or uncontested premium due as evidenced by the applicant having failed to make written objection to premium charges within thirty days after billing.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":205608,"text":"Any policy issued by the Association may be cancelled for any one of the following reasons:","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"C1"},"3":{"id":205609,"text":"Nonpayment of premium or portion of the premium;","type":"section","prefixes":["C","1"],"prefix":"1","entire_prefix":"C1","prefix_anchor":"C1","level":2,"prior_prefix":"C","next_prefix":"C2"},"4":{"id":205610,"text":"Suspension or revocation of the insured’s license to conduct business;","type":"section","prefixes":["C","2"],"prefix":"2","entire_prefix":"C2","prefix_anchor":"C2","level":2,"prior_prefix":"C1","next_prefix":"C3"},"5":{"id":205611,"text":"Failure of the insured to meet the minimum underwriting standards;","type":"section","prefixes":["C","3"],"prefix":"3","entire_prefix":"C3","prefix_anchor":"C3","level":2,"prior_prefix":"C2","next_prefix":"C4"},"6":{"id":205612,"text":"Failure of the insured to meet other minimum standards prescribed by the plan of operation; or","type":"section","prefixes":["C","4"],"prefix":"4","entire_prefix":"C4","prefix_anchor":"C4","level":2,"prior_prefix":"C3","next_prefix":"C5"},"7":{"id":205613,"text":"Nonpayment of any stabilization reserve fund charge.","type":"section","prefixes":["C","5"],"prefix":"5","entire_prefix":"C5","prefix_anchor":"C5","level":2,"prior_prefix":"C4","next_prefix":"D"},"8":{"id":205614,"text":"The rates, rating plans, rating rules, rating classifications, premium payment plans and territories applicable to the insurance written by the Association, and related supplementary rate information shall be subject to the provisions of Chapter 20 (§ 38.2-2000 et seq.) of this title. Due consideration shall be given to the past and prospective loss and expense experience for the line, subclassification or type of commercial liability insurance written in this Commonwealth, trends in the frequency and severity of losses, the investment income of the Association, and other information the Commission requires. All rates shall be on an actuarially sound basis, giving due consideration to the stabilization reserve fund, and shall be calculated to be self-supporting. The Commission shall take all appropriate steps to make available to the Association the loss and expense experience of insurers writing or having written the same line, subclassification or type of commercial liability insurance in this Commonwealth.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C5","next_prefix":"E"},"9":{"id":205615,"text":"All policies issued by the Association shall be subject to a nonprofit group retrospective premium adjustment to be approved by the Commission under which the final total premium for all policyholders for each line, subclassification or type of commercial liability insurance issued each year by the Association, as a group, will be calculated based upon the experience of all such policyholders. The experience of all such policyholders shall be calculated following the end of each year and shall be based upon earned premiums, administrative expenses, loss and loss adjustment expenses, and taxes, plus a reasonable allowance for contingencies and servicing, for each line, subclassification or type of commercial liability insurance. Policyholders shall be given full credit for all investment income, net of expenses and a reasonable management fee on policyholder supplied funds. Any final premium resulting from a retrospective premium adjustment will be collected from those moneys in the stabilization reserve fund set forth in § 38.2-2906 that are attributable to the policies written for the particular line, subclassification or type of commercial liability insurance or group of such risks for which activation occurred pursuant to § 38.2-2901. The maximum premium for all policyholders as a group shall be limited as provided in § 38.2-2906.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"10":{"id":205616,"text":"1. If the stabilization reserve fund account for one or more lines, subclassifications or types of commercial liability insurance is exhausted in the payment of the maximum final premium for all such policies issued during the year for which a deficit exists, the Association shall certify to the Commission the estimated amount of any remaining deficit for any year’s policies. Within sixty days after such certification, the Commission shall authorize the Association to recover from the members their respective share of such deficit. No member insurer may be assessed in any year an amount greater than two percent of the member’s direct gross premium income as defined in \u00a7 58.1-2500 from liability insurance for the calendar year preceding the assessment. If an assessment in any year is not sufficient to eliminate such deficit, a like assessment may be made the ensuing year but not thereafter.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E","next_prefix":"F2"},"11":{"id":205617,"text":"A member shall be permitted to recover any assessment made by the Association under subdivision 1 of this subsection by deducting the member’s share of the deficit from future premium taxes due the Commonwealth. The amount of premium tax deduction for each member’s share of the deficit shall be apportioned by the Commission so that in the aggregate, the total premium tax deduction permitted for all members in any one taxable year shall not exceed 0.05 of one percent of the direct gross premium income for the liability insurance written by member insurers defined in subsection A of § 38.2-2901. To the extent that the said 0.05 of one percent is reached in any one taxable year, any amount not so offset may be carried over to a subsequent year or years.","type":"section","prefixes":["F","2"],"prefix":"2","entire_prefix":"F2","prefix_anchor":"F2","level":2,"prior_prefix":"F","next_prefix":"G"},"12":{"id":205618,"text":"In the event that sufficient funds are not available for the sound financial operation of the Association, subject to recoupment as provided in this chapter and the plan of operation, all members shall, on a temporary basis, contribute to the financial requirements of the Association in the manner provided in this chapter. The contribution shall be reimbursed to the members by the procedure set forth in subdivision 2 of subsection F of this section.","type":"section","prefixes":["G"],"prefix":"G","entire_prefix":"G","prefix_anchor":"G","level":1,"prior_prefix":"F2","next_prefix":"H"},"13":{"id":205619,"text":"The Commission shall examine the business of the Association as often as it deems appropriate to make certain that the group retrospective premium adjustments are being calculated and applied in a manner consistent with this section. If the Commission finds that the group retrospective premium adjustments are not being made in a manner consistent with this section, it shall issue an order to the Association, specifying (i) how such calculation and application are not consistent and (ii) stating what corrective action shall be taken.","type":"section","prefixes":["H"],"prefix":"H","entire_prefix":"H","prefix_anchor":"H","level":1,"prior_prefix":"G"}},"ancestry":[{"id":13381,"edition_id":1,"name":"Commercial Liability Insurance Joint Underwriting Association","identifier":"29","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:44:45","date_modified":"2026-06-26 03:44:45","permalink":{"id":214141,"object_type":"structure","relational_id":13381,"identifier":"29","token":"38.2\/29","url":"\/38.2\/29\/","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":67887,"structure_id":13381,"section_number":"38.2-2900","catch_line":"Definitions","url":"\/38.2-2900\/","token":"38.2\/29\/38.2-2900","metadata":false},{"id":86890,"structure_id":13381,"section_number":"38.2-2900.1","catch_line":"Market assistance plan","url":"\/38.2-2900.1\/","token":"38.2\/29\/38.2-2900.1","metadata":false},{"id":65411,"structure_id":13381,"section_number":"38.2-2901","catch_line":"Association activation; members; purpose; determinations by Commission; powers of Association","url":"\/38.2-2901\/","token":"38.2\/29\/38.2-2901","metadata":false},{"id":74095,"structure_id":13381,"section_number":"38.2-2902","catch_line":"Dissolution","url":"\/38.2-2902\/","token":"38.2\/29\/38.2-2902","metadata":false},{"id":54353,"structure_id":13381,"section_number":"38.2-2903","catch_line":"Directors","url":"\/38.2-2903\/","token":"38.2\/29\/38.2-2903","metadata":false},{"id":62519,"structure_id":13381,"section_number":"38.2-2904","catch_line":"Plan of operation","url":"\/38.2-2904\/","token":"38.2\/29\/38.2-2904","metadata":false},{"id":56099,"structure_id":13381,"section_number":"38.2-2905","catch_line":"Policy forms; applicants to be issued policies; cancellation of policies; rates; group retrospective rating plan; examination of business of Association","url":"\/38.2-2905\/","token":"38.2\/29\/38.2-2905","metadata":false},{"id":69954,"structure_id":13381,"section_number":"38.2-2906","catch_line":"Stabilization reserve fund","url":"\/38.2-2906\/","token":"38.2\/29\/38.2-2906","metadata":false},{"id":64097,"structure_id":13381,"section_number":"38.2-2907","catch_line":"Participation in Association by insurers","url":"\/38.2-2907\/","token":"38.2\/29\/38.2-2907","metadata":false},{"id":69170,"structure_id":13381,"section_number":"38.2-2908","catch_line":"Review of actions or decisions of Association","url":"\/38.2-2908\/","token":"38.2\/29\/38.2-2908","metadata":false},{"id":66449,"structure_id":13381,"section_number":"38.2-2909","catch_line":"Annual statements","url":"\/38.2-2909\/","token":"38.2\/29\/38.2-2909","metadata":false},{"id":56213,"structure_id":13381,"section_number":"38.2-2910","catch_line":"Annual examination into affairs of Association","url":"\/38.2-2910\/","token":"38.2\/29\/38.2-2910","metadata":false},{"id":56451,"structure_id":13381,"section_number":"38.2-2911","catch_line":"Public officers or employees","url":"\/38.2-2911\/","token":"38.2\/29\/38.2-2911","metadata":false},{"id":77816,"structure_id":13381,"section_number":"38.2-2912","catch_line":"Commissions for placing and servicing risk with Association","url":"\/38.2-2912\/","token":"38.2\/29\/38.2-2912","metadata":false},{"id":76792,"structure_id":13381,"section_number":"38.2-2913","catch_line":"Liability","url":"\/38.2-2913\/","token":"38.2\/29\/38.2-2913","metadata":false}],"previous_section":{"id":62519,"structure_id":13381,"section_number":"38.2-2904","catch_line":"Plan of operation","url":"\/38.2-2904\/","token":"38.2\/29\/38.2-2904","metadata":false},"next_section":{"id":69954,"structure_id":13381,"section_number":"38.2-2906","catch_line":"Stabilization reserve fund","url":"\/38.2-2906\/","token":"38.2\/29\/38.2-2906","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-2905\/","history_text":"

This law was first created in 1988. The record of its establishment is cataloged in chapters 769 and 783 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 1988 \u201cActs\u201d aren\u2019t available online.<\/p>","references":false,"refers_to":[{"id":68638,"section_number":"38.2-2000","catch_line":"Purposes of chapter","order_by":null,"url":"\/38.2-2000\/"},{"id":65411,"section_number":"38.2-2901","catch_line":"Association activation; members; purpose; determinations by Commission; powers of Association","order_by":null,"url":"\/38.2-2901\/"},{"id":69954,"section_number":"38.2-2906","catch_line":"Stabilization reserve fund","order_by":null,"url":"\/38.2-2906\/"},{"id":56221,"section_number":"58.1-2500","catch_line":"Definitions","order_by":null,"url":"\/58.1-2500\/"}],"permalink":{"id":214167,"object_type":"law","relational_id":56099,"identifier":"38.2-2905","token":"38.2\/29\/38.2-2905","url":"\/38.2-2905\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-2905\/","token":"38.2\/29\/38.2-2905","dublin_core":{"Title":"Policy forms; applicants to be issued policies; cancellation of policies; rates; group retrospective rating plan; examination of business of Association","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-2905","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> All policies issued by the Association<\/span> shall be subject to the group retrospective premium adjustment and to the stabilization reserve fund required by § 38.2-2906<\/a>. No policy form shall be used by the Association<\/span> unless it has been filed with the Commission<\/span> and either (i) the Commission<\/span> has approved it or (ii) thirty days have elapsed and the Commission<\/span> has not disapproved the form or endorsement for one or more of the reasons enumerated in subsection A of § 38.2-317<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> Policies shall be issued by the Association<\/span>, after receipt of the premium or portion of the premium prescribed by the plan of operation, to applicants that (i) meet the minimum underwriting standards of the Association<\/span>, and (ii) have no unpaid or uncontested premium due as evidenced by the applicant having failed to make written objection to premium charges within thirty days after billing. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Any policy issued by the Association<\/span> may be cancelled for any one of the following reasons: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Nonpayment of premium or portion of the premium; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Suspension or revocation<\/span> of the insured’s license to conduct business; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Failure of the insured to meet the minimum underwriting standards; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Failure of the insured to meet other minimum standards prescribed by the plan of operation; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Nonpayment of any stabilization reserve fund charge. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> The rates<\/span><\/span>, rating plans, rating rules, rating classifications, premium payment plans and territories applicable to the insurance written by the Association<\/span>, and related supplementary rate<\/span> information shall be subject to the provisions of Chapter 20 (§ 38.2-2000<\/a> et seq.) of this title. Due consideration shall be given to the past and prospective loss and expense experience for the line, subclassification or type of commercial liability insurance<\/span> written in this Commonwealth, trends in the frequency and severity of losses, the investment income of the Association<\/span>, and other information the Commission<\/span> requires. All rates<\/span><\/span> shall be on an actuarially sound basis, giving due consideration to the stabilization reserve fund, and shall be calculated to be self-supporting. The Commission<\/span> shall take all appropriate steps to make available to the Association<\/span> the loss and expense experience of insurers<\/span> writing or having written the same line, subclassification or type of commercial liability insurance<\/span> in this Commonwealth. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> All policies issued by the Association<\/span> shall be subject to a nonprofit group retrospective premium adjustment to be approved by the Commission<\/span> under which the final total premium for all policyholders for each line, subclassification or type of commercial liability insurance<\/span> issued each year by the Association<\/span>, as a group, will be calculated based upon the experience of all such policyholders. The experience of all such policyholders shall be calculated following the end of each year and shall be based upon earned premiums, administrative expenses, loss and loss adjustment expenses, and taxes, plus a reasonable allowance for contingencies and servicing, for each line, subclassification or type of commercial liability insurance<\/span>. Policyholders shall be given full credit for all investment income, net of expenses and a reasonable management fee on policyholder supplied funds. Any final premium resulting from a retrospective premium adjustment will be collected from those moneys in the stabilization reserve fund set forth in § 38.2-2906<\/a> that are attributable to the policies written for the particular line, subclassification or type of commercial liability insurance<\/span> or group of such risks for which activation occurred pursuant to § 38.2-2901<\/a>. The maximum premium for all policyholders as a group shall be limited as provided in § 38.2-2906<\/a>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> 1. If the stabilization reserve fund account for one or more lines, subclassifications or types of commercial liability insurance<\/span> is exhausted in the payment of the maximum final premium for all such policies issued during the year for which a deficit exists, the Association<\/span> shall certify to the Commission<\/span> the estimated amount of any remaining deficit for any year’s policies. Within sixty days after such certification, the Commission<\/span> shall authorize the Association<\/span> to recover from the members their respective share of such deficit. No member insurer<\/span> may be assessed in any year an amount greater than two percent of the member’s direct gross premium income as defined in \u00a7 58.1-2500<\/a> from liability insurance for the calendar year preceding the assessment. If an assessment in any year is not sufficient to eliminate such deficit, a like assessment may be made the ensuing year but not thereafter. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> A member shall be permitted to recover any assessment made by the Association<\/span> under subdivision 1 of this subsection by deducting the member’s share of the deficit from future premium taxes due the Commonwealth. The amount of premium tax deduction for each member’s share of the deficit shall be apportioned by the Commission<\/span> so that in the aggregate, the total premium tax deduction permitted for all members in any one taxable year shall not exceed 0.05 of one percent of the direct gross premium income for the liability insurance written by member insurers<\/span> defined in subsection A of § 38.2-2901<\/a>. To the extent that the said 0.05 of one percent is reached in any one taxable year, any amount not so offset may be carried over to a subsequent year or years. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

G.<\/span> In the event that sufficient funds are not available for the sound financial operation of the Association<\/span>, subject to recoupment as provided in this chapter and the plan of operation, all members shall, on a temporary basis, contribute to the financial requirements of the Association<\/span> in the manner provided in this chapter. The contribution shall be reimbursed to the members by the procedure set forth in subdivision 2 of subsection F of this section. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

H.<\/span> The Commission<\/span> shall examine the business of the Association<\/span> as often as it deems appropriate to make certain that the group retrospective premium adjustments are being calculated and applied in a manner consistent with this section. If the Commission<\/span> finds that the group retrospective premium adjustments are not being made in a manner consistent with this section, it shall issue<\/span> an order<\/span> to the Association<\/span>, specifying (i) how such calculation and application are not consistent and (ii) stating what corrective action shall be taken. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nPOLICY FORMS; APPLICANTS TO BE ISSUED POLICIES; CANCELLATION OF POLICIES; RATES;\nGROUP RETROSPECTIVE RATING PLAN; EXAMINATION OF BUSINESS OF ASSOCIATION (\u00a7\n38.2-2905)\n\nA. All policies issued by the Association shall be subject to the group\nretrospective premium adjustment and to the stabilization reserve fund required\nby § 38.2-2906. No policy form shall be used by the Association unless it\nhas been filed with the Commission and either (i) the Commission has approved it\nor (ii) thirty days have elapsed and the Commission has not disapproved the form\nor endorsement for one or more of the reasons enumerated in subsection A of\n§ 38.2-317.\n\nB. Policies shall be issued by the Association, after receipt of the premium or\nportion of the premium prescribed by the plan of operation, to applicants that\n(i) meet the minimum underwriting standards of the Association, and (ii) have no\nunpaid or uncontested premium due as evidenced by the applicant having failed to\nmake written objection to premium charges within thirty days after billing.\n\nC. Any policy issued by the Association may be cancelled for any one of the\nfollowing reasons:\n\n 1. Nonpayment of premium or portion of the premium;\n\n 2. Suspension or revocation of the insured’s license to conduct\n business;\n\n 3. Failure of the insured to meet the minimum underwriting standards;\n\n 4. Failure of the insured to meet other minimum standards prescribed by the\n plan of operation; or\n\n 5. Nonpayment of any stabilization reserve fund charge.\n\nD. The rates, rating plans, rating rules, rating classifications, premium\npayment plans and territories applicable to the insurance written by the\nAssociation, and related supplementary rate information shall be subject to the\nprovisions of Chapter 20 (§ 38.2-2000 et seq.) of this title. Due\nconsideration shall be given to the past and prospective loss and expense\nexperience for the line, subclassification or type of commercial liability\ninsurance written in this Commonwealth, trends in the frequency and severity of\nlosses, the investment income of the Association, and other information the\nCommission requires. All rates shall be on an actuarially sound basis, giving\ndue consideration to the stabilization reserve fund, and shall be calculated to\nbe self-supporting. The Commission shall take all appropriate steps to make\navailable to the Association the loss and expense experience of insurers writing\nor having written the same line, subclassification or type of commercial\nliability insurance in this Commonwealth.\n\nE. All policies issued by the Association shall be subject to a nonprofit group\nretrospective premium adjustment to be approved by the Commission under which\nthe final total premium for all policyholders for each line, subclassification\nor type of commercial liability insurance issued each year by the Association,\nas a group, will be calculated based upon the experience of all such\npolicyholders. The experience of all such policyholders shall be calculated\nfollowing the end of each year and shall be based upon earned premiums,\nadministrative expenses, loss and loss adjustment expenses, and taxes, plus a\nreasonable allowance for contingencies and servicing, for each line,\nsubclassification or type of commercial liability insurance. Policyholders shall\nbe given full credit for all investment income, net of expenses and a reasonable\nmanagement fee on policyholder supplied funds. Any final premium resulting from\na retrospective premium adjustment will be collected from those moneys in the\nstabilization reserve fund set forth in § 38.2-2906 that are attributable\nto the policies written for the particular line, subclassification or type of\ncommercial liability insurance or group of such risks for which activation\noccurred pursuant to § 38.2-2901. The maximum premium for all policyholders\nas a group shall be limited as provided in § 38.2-2906.\n\nF. 1. If the stabilization reserve fund account for one or more lines,\nsubclassifications or types of commercial liability insurance is exhausted in\nthe payment of the maximum final premium for all such policies issued during the\nyear for which a deficit exists, the Association shall certify to the Commission\nthe estimated amount of any remaining deficit for any year’s policies.\nWithin sixty days after such certification, the Commission shall authorize the\nAssociation to recover from the members their respective share of such deficit.\nNo member insurer may be assessed in any year an amount greater than two percent\nof the member’s direct gross premium income as defined in \u00a7 58.1-2500\nfrom liability insurance for the calendar year preceding the assessment. If an\nassessment in any year is not sufficient to eliminate such deficit, a like\nassessment may be made the ensuing year but not thereafter.\n\n 2. A member shall be permitted to recover any assessment made by the\n Association under subdivision 1 of this subsection by deducting the\n member’s share of the deficit from future premium taxes due the\n Commonwealth. The amount of premium tax deduction for each member’s\n share of the deficit shall be apportioned by the Commission so that in the\n aggregate, the total premium tax deduction permitted for all members in any\n one taxable year shall not exceed 0.05 of one percent of the direct gross\n premium income for the liability insurance written by member insurers defined\n in subsection A of § 38.2-2901. To the extent that the said 0.05 of one\n percent is reached in any one taxable year, any amount not so offset may be\n carried over to a subsequent year or years.\n\nG. In the event that sufficient funds are not available for the sound financial\noperation of the Association, subject to recoupment as provided in this chapter\nand the plan of operation, all members shall, on a temporary basis, contribute\nto the financial requirements of the Association in the manner provided in this\nchapter. The contribution shall be reimbursed to the members by the procedure\nset forth in subdivision 2 of subsection F of this section.\n\nH. The Commission shall examine the business of the Association as often as it\ndeems appropriate to make certain that the group retrospective premium\nadjustments are being calculated and applied in a manner consistent with this\nsection. If the Commission finds that the group retrospective premium\nadjustments are not being made in a manner consistent with this section, it\nshall issue an order to the Association, specifying (i) how such calculation and\napplication are not consistent and (ii) stating what corrective action shall be\ntaken.\n\nHISTORY: 1988, cc. 769, 783.","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}}