                                 CODE OF VIRGINIA

REINSURANCE (§ 38.2-4113)

A. A domestic society may, by a reinsurance agreement, cede any individual risk
or risks in whole or in part to an insurer, other than another fraternal benefit
society, having the power to make such reinsurance and authorized to do business
in this Commonwealth, or if not so authorized, one which is approved by the
Commission, but no such society may reinsure substantially all of its insurance
in force without the written permission of the Commission. It may take credit
for the reserves on such ceded risks to the extent reinsured, but no credit
shall be allowed as an admitted asset or as a deduction from liability, to a
ceding society for reinsurance made, ceded, renewed, or otherwise becoming
effective after the effective date of this chapter, unless the reinsurance is
payable by the assuming insurer on the basis of the liability of the ceding
society under the contract or contracts reinsured without diminution because of
the insolvency of the ceding society.

B. Notwithstanding the limitation in subsection A, a society may reinsure the
risks of another society in a consolidation or merger approved by the Commission
under &#xA7; 38.2-4114.

HISTORY: Code 1950, §§ 38-270, 38.1-575; 1952, c. 317, § 38.1-638.7; 1968, c.
654; 1986, c. 562.