                                 CODE OF VIRGINIA

DOMESTIC INSURERS TO MAINTAIN MINIMUM CAPITAL AND SURPLUS; PROCEEDINGS BY
COMMISSION IF IMPAIRMENT FOUND (§ 38.2-1035)

A. Each domestic insurer shall maintain at all times the minimum surplus if a
mutual insurer, and the minimum capital and surplus if a stock insurer, required
by &#xA7;&#xA7; 38.2-1028, 38.2-1029 or &#xA7; 38.2-1030. If the Commission
finds that (i) the minimum capital and surplus of a domestic stock insurer is
impaired or (ii) the minimum surplus of a domestic mutual insurer is impaired,
the Commission shall issue an order requiring the insurer to eliminate the
impairment within a period not exceeding ninety days. The Commission may by
order served upon the insurer prohibit the insurer from issuing any new policies
while the impairment exists.

B. Any domestic mutual insurer may make an assessment upon its assessable
members for an amount that will provide funds to cover all or any part of the
impairment. However, no member shall be liable for an assessment exceeding the
limit specified in his policy, and no assessment shall be made upon any member
under a nonassessable policy. The assessment shall be made upon each assessable
member in proportion to the liability as expressed in the policy. With the prior
approval of the Commission, the deficiency may be made up from advances or
borrowed funds and subject to the restrictions provided in &#xA7; 38.2-1034 for
obtaining guaranty funds.

C. If at the expiration of the designated period the insurer has not satisfied
the Commission that the impairment has been eliminated, an order for the
rehabilitation or liquidation of the insurer may be entered as provided in
Chapter 15 (&#xA7; 38.2-1500 et seq.) of this title.

HISTORY: Code 1950, § 38-511; 1952, c. 317, §§ 38.1-90, 38.1-93; 1966, c.
580; 1977, c. 322; 1986, c. 562.