                                 CODE OF VIRGINIA

IMPAIRED RECIPROCALS (§ 38.2-1229)

A. If (i) the assets of a domestic reciprocal are at any time insufficient to
settle the sum of its liabilities, except those on account of funds contributed
by the attorney or other parties, and its required surplus to policyholders, and
(ii) the deficiency is not cured from other sources, its attorney shall levy an
assessment upon subscribers made subject to assessment by the terms of their
policies for the amount needed to make up the deficiency. However, the
assessment shall be subject to &#xA7; 38.2-1212.

B. If the attorney fails to make the assessment within thirty days after the
Commission orders him to do so, or if the deficiency is not fully made up within
sixty days after the date the assessment was made, delinquency proceedings may
be instituted and conducted against the insurer as provided in Chapter 15 of
this title.

C. If liquidation of the reciprocal is ordered, an assessment shall be levied
upon the subscribers for the amount the Commission or the court, as the case may
be, determines to be necessary to discharge all liabilities of the reciprocal.
This assessment shall exclude any funds contributed by the attorney or other
persons, but shall include the reasonable cost of the liquidation. However, the
assessment shall be subject to &#xA7; 38.2-1212.

HISTORY: 1952, c. 317, § 38.1-718; 1986, c. 562.