                                 CODE OF VIRGINIA

PROCEDURE FOR PAYMENT OF LOSSES BY POOLED METHOD (§ 2.2-4403)

When the Treasury Board determines that a qualified public depository securing
public deposits in accordance with this section is a defaulting depository, it
shall as promptly as practicable take steps to reimburse public depositors for
uninsured public deposits using the following procedures:

1. The Treasury Board shall ascertain the amount of uninsured public deposits
held by the defaulting depository, either with the cooperation of the
Commissioner of Financial Institutions, the receiver appointed for such
depository, or by any other means available.

2. The amount of such uninsured public deposits ascertained as provided in
subdivision 1, plus any costs associated with liquidation, shall be assessed by
the Treasury Board first against the defaulting depository to the extent of the
full realizable market value of the collateral pledged to secure its public
deposits.

3. In the event the realized value of the pledged collateral in subdivision 2 is
insufficient to satisfy the liability of the defaulting depository to its public
depositors and the Treasury Board, the Treasury Board shall assess the remaining
liability against all other qualified public depositories securing public
deposits according to the following ratio: total average public deposit balance
for each qualified public depository held during the immediately preceding
twelve months divided by the total average public deposit balance for the same
period held by all qualified public depositories under this section other than
the defaulting depository.

4. Assessments made by the Treasury Board in accordance with subdivision 3 shall
be payable by the close of business on the second business day following demand.
Upon the failure of any qualified public depository to pay such assessment when
due, the State Treasurer shall promptly take possession of the eligible
collateral deposited with the non-paying depository&#8217;s escrow agent and
liquidate the same to the extent necessary to pay the original assessment plus
any additional costs necessary to liquidate the collateral.

5. Upon receipt of such assessments and the net proceeds of the eligible
collateral liquidated from the State Treasurer, the Treasury Board shall
reimburse the public depositors to the extent of the defaulting
depository&#8217;s liability to them, net of any applicable deposit insurance.

HISTORY: 1973, c. 172, § 2.1-363; 1978, c. 14; 1984, c. 135; 2001, c. 844;
2009, c. 64; 2010, cc. 640, 674.