                                 CODE OF VIRGINIA

GROUNDS FOR DELINQUENCY PROCEEDINGS COMMENCED BY COMMISSION AGAINST DOMESTIC
INSURER (§ 38.2-1503)

Delinquency proceedings may be commenced by the Commission against any domestic
insurer whenever the insurer:

1. Has been determined to be insolvent by the Commission;

2. Has refused to submit its books, papers, accounts, records, or affairs to the
reasonable inspection of the Commission or its representative;

3. Has refused or failed to comply with any order of the Commission to make good
within the time prescribed by law (i) any impairment of its minimum capital and
surplus if the insurer is a stock insurer, (ii) any impairment of its minimum
surplus if the insurer is other than a stock insurer, or (iii) membership
requirements as set forth in &#xA7; 38.2-2515 if the insurer is a mutual
assessment property and casualty insurer and has had its license revoked;

4. Has transferred or attempted to transfer substantially its entire property,
or has entered into any transaction which merges substantially its entire
property or business, into the property or business of any other company without
prior written approval of the Commission;

5. Has removed, attempted to remove, or is about to remove from this
Commonwealth any material part of its property or business necessary for the
continued conduct of its business if it endangers the interests of its
policyholders, stockholders or members;

6. Has reinsured all or substantially all of its risks without prior written
approval of the Commission;

7. Is found, after an examination, to be in a condition where any further
transaction of business will be hazardous to its policyholders, creditors,
members, subscribers, stockholders, or to the public;

8. Has willfully violated its charter or any law of this Commonwealth;

9. Has an officer, director or manager who has refused to be examined under oath
concerning its affairs;

10. Has had any material part of its entire property sequestered in any other
state or country;

11. Has not organized or completed its organization and obtained a license to
transact the business of insurance in this Commonwealth within the period of
time set by law; or

12. Has failed to pay a final judgment rendered against it in any state upon any
insurance contract issued or assumed by it (i) within sixty days after the
judgment has become final, (ii) within sixty days after time for taking an
appeal has expired, or (iii) within sixty days after dismissal of an appeal
before final determination, whichever date is the latest.

HISTORY: Code 1950, § 38-138; 1952, c. 317, § 38.1-129; 1986, c. 562.