                                 CODE OF VIRGINIA

DEFENSE OF ACTION BY UNLICENSED INSURER (§ 38.2-806)

A. Before any unlicensed insurer files or causes to be filed any pleading in any
action, suit or proceeding instituted against it, that insurer shall either:

   1. Deposit cash or securities with the clerk of the court in which the action,
   suit or proceeding is pending, or file with the clerk a bond in an amount to
   be fixed by the court which shall be sufficient to secure the payment of any
   final judgment; or

   2. Procure a certificate of authority and a license to transact the business
   of insurance in this Commonwealth.

B. The court may order a postponement in any action, suit or proceeding in which
service is made in the manner provided in &#xA7; 38.2-802 or &#xA7; 38.2-803 to
afford the unlicensed insurer reasonable opportunity to comply with the
provisions of subsection A of this section and to defend the action.

C. Nothing in subsection A of this section shall be construed to prevent any
unlicensed insurer from appearing specially in the suit or other proceeding in
which service was made in the manner provided in this article on the ground
either that (i) the insurer has not done any of the acts listed in &#xA7;
38.2-801, or (ii) the person on whom service was made pursuant to &#xA7;
38.2-803 was not doing any of the acts listed in &#xA7; 38.2-803.

HISTORY: 1952, c. 317, § 38.1-69; 1986, c. 562.