                                 CODE OF VIRGINIA

PLAN OF OPERATION (§ 38.2-1706)

A. 1. The Association&#8217;s plan of operation approved under former §
38.1-482.24 shall remain in effect until modified in accordance with this
subsection. The Association shall from time to time submit to the Commission any
amendments to the plan of operation necessary or suitable to assure the fair,
reasonable, and equitable administration of the Association. Any amendments to
the plan of operation shall become effective upon the Commission&#8217;s written
approval or unless they have not been disapproved within 60 days.

   2. If at any time the Association fails to submit suitable amendments to the
   plan, the Commission shall, after notice and hearing, adopt and promulgate
   such reasonable rules as are necessary or advisable to effectuate the
   provisions of this chapter. The rules shall continue in force until modified
   by the Commission or superseded by an amended plan submitted by the
   Association and approved by the Commission.

B. All member insurers shall comply with the plan of operation.

C. The plan of operation shall, in addition to requirements enumerated elsewhere
in this chapter:

   1. Establish procedures for handling assets of the Association;

   2. Establish the amount and method of reimbursing members of the board of
   directors under &#xA7; 38.2-1703;

   3. Establish regular places and times for meetings, including telephone
   conference calls, of the board of directors;

   4. Establish procedures for records to be kept of all financial transactions
   of the Association, its agents, and the board of directors;

   5. Establish the procedures whereby selections for the board of directors will
   be made and submitted to the Commission;

   6. Establish any additional procedures for assessments under &#xA7; 38.2-1705;

   7. Establish a plan for equitable distribution of refunds to member insurers;

   8. Contain additional provisions necessary or proper for the execution of the
   powers and duties of the Association;

   9. Establish procedures whereby a director may be removed for cause, including
   in the case where a member insurer director becomes an impaired or insolvent
   insurer; and

   10. Require the board of directors to establish a policy and procedures for
   addressing conflicts of interests.

D. The plan of operation may provide that any or all powers and duties of the
Association, except those under subdivision L 3 of &#xA7; 38.2-1704 and &#xA7;
38.2-1705, are delegated to a corporation, association, or other organization
that performs or will perform functions similar to those of this Association, or
its equivalent, in two or more states. Such a corporation, association, or
organization shall be reimbursed for any payments made on behalf of the
Association and shall be paid for its performance of any function of the
Association. A delegation under this subsection shall take effect only with the
approval of both the board of directors and the Commission, and may be made only
to a corporation, association, or organization that extends protection not
substantially less favorable and effective than that provided by this chapter.

HISTORY: 1976, c. 330, § 38.1-482.24; 1986, c. 562; 2010, c. 510; 2018, c. 706.