                                 CODE OF VIRGINIA

DEPOSIT OF MINIMUM CAPITAL; LETTER OF CREDIT INSTEAD OF DEPOSIT (§ 38.2-1105)

A. No captive insurer shall be issued a license to transact the business of
insurance in this Commonwealth until it has met the requirements of Article 5
(&#xA7; 38.2-1024 et seq.) of Chapter 10 of this title.

B. The captive insurer shall deposit with the State Treasurer cash, bonds, or
securities equal to the minimum capital or, if a mutual insurer, fifty percent
of the minimum surplus, as required by Article 5 (&#xA7; 38.2-1024 et seq.) of
Chapter 10 of this title. The State Treasurer shall accept an irrevocable letter
of credit, in a form acceptable to the Commission, on behalf of a captive
insurer instead of requiring the above-mentioned deposit. The letter of credit
shall be issued by a national or state bank and approved by the Commission.

C. The deposit or letter of credit shall be held by the State Treasurer for the
benefit of all policyholders and creditors wherever located and shall be
administered as provided in Article 7 (&#xA7; 38.2-1045 et seq.) of Chapter 10
of this title.

D. The State Treasurer shall furnish to the captive insurer a certificate
certifying that the State Treasurer holds the securities or letters of credit in
trust for the benefit of the policyholders and creditors of the captive insurer.

HISTORY: 1980, c. 665, § 38.1-921; 1986, c. 562.