                                 CODE OF VIRGINIA

RESERVES REQUIRED (§ 38.2-2606)

A home protection company licensed in this Commonwealth shall maintain reserves
in an amount sufficient to provide for its liability to furnish appropriate
indemnity, repairs, and replacement services under its issued and outstanding
contracts. The reserve account shall be calculated according to sound actuarial
principles, but shall equal at a minimum fifty percent of the premiums received
from all contracts in force in this Commonwealth, net of applicable reinsurance
and any amounts paid on account of liabilities incurred under the contracts. To
receive credit for reinsurance on home protection contracts, the reinsurance
contract or policy shall be issued by a solvent insurer licensed in this
Commonwealth or any other state having standards of solvency at least equal to
those required in this Commonwealth.

HISTORY: 1981, c. 530, § 38.1-936; 1986, c. 562.