                                 CODE OF VIRGINIA

RECOVERY (§ 38.2-1334.2)

A. If an order for liquidation or rehabilitation of a domestic insurer has been
entered, the receiver appointed under such order shall have a right to recover
on behalf of the insurer (i) from any parent corporation or holding company or
person or affiliate who otherwise controlled the insurer, the amount of
distributions (other than distributions of shares of the same class of stock)
paid by the insurer on its capital stock or (ii) any payment in the form of a
bonus, termination settlement or extraordinary lump sum salary adjustment made
by the insurer or its subsidiary or subsidiaries to a director, officer or
employee, where the distribution or payment pursuant to (i) or (ii) is made at
any time during the one year preceding the petition for liquidation,
conservation or rehabilitation, as the case may be, subject to the limitations
of subsections B, C and D of this section.

B. No such distribution shall be recoverable if the parent or affiliate shows
that, when paid, such distribution was lawful and reasonable and that the
insurer did not know and could not reasonably have known that such distribution
might adversely affect the ability of the insurer to fulfill its contractual
obligations.

C. Any person who was a parent corporation or holding company or a person who
otherwise controlled the insurer or affiliate at the time such distributions
were paid shall be liable up to the amount of distributions or payments under
subsection A of this section. Any person who otherwise controlled the insurer at
the time such distributions were declared shall be liable up to the amount of
distributions he would have received if they had been paid immediately. If two
or more persons are liable with respect to the same distributions, they shall be
jointly and severally liable.

D. The maximum amount recoverable under this section shall be the amount needed
in excess of all other available assets of the impaired or insolvent insurer to
pay its obligations and to reimburse any guaranty funds.

E. To the extent that any person liable under subsection C of this section is
insolvent or otherwise fails to pay claims due from it pursuant to such
subsection, its parent corporation, holding company, or person who otherwise
controlled it at the time the distribution was paid shall be jointly and
severally liable for any resulting deficiency in the amount recovered from such
parent corporation, holding company, or person who otherwise controlled it.

HISTORY: 1993, c. 158.