                                 CODE OF VIRGINIA

ASSOCIATION ACTIVATION; MEMBERS; PURPOSE; DETERMINATIONS BY COMMISSION; POWERS
OF ASSOCIATION (§ 38.2-2801)

A. The Commission shall activate a joint underwriting association if, after
investigation, notice, and hearing, it finds that medical malpractice insurance
cannot be made reasonably available in the voluntary market for a significant
number of any class, type, or group of providers of health care. The association
shall consist of all insurers licensed to write and engaged in writing liability
insurance within this Commonwealth on a direct basis except those exempted from
rate regulation by subsection C of &#xA7; 38.2-1902. Each such insurer shall be
a member of the association as a condition of its license to write liability
insurance in this Commonwealth.

B. The purpose of the association shall be to provide a market for medical
malpractice insurance on a self-supporting basis without subsidy from its
members.

C. 1. The association shall not commence underwriting operations for any class,
type or group of providers of health care until it is activated by the
Commission. At the direction of the Commission, the association shall commence
operations in accordance with the provisions of this chapter.

   2. If the Commission determines at any time that medical malpractice insurance
   can be made reasonably available in the voluntary market for any class, type
   or group of providers of health care, the association shall, at the direction
   of the Commission, cease its underwriting operations for that class, type or
   group of providers of health care.

D. The Commission shall also determine after investigation and a hearing whether
the association shall be the exclusive source of medical malpractice insurance
for any class, type or group of providers of health care and the type of policy
or policies that shall be issued to any class, type or group of providers of
health care. If the Commission determines that a claims-made policy will be
issued to any class, type or group of providers of health care, the Commission
shall also provide for the guaranteed availability of insurance that covers
claims that (i) result from incidents occurring during periods when the basic
claims-made policies are in force, and (ii) are reported after the expiration of
the basic claims-made policies. The Commission may from time to time after an
investigation and hearing reexamine and reconsider any determination made
pursuant to this subsection.

E. Pursuant to this chapter and the plan of operation required by &#xA7;
38.2-2804, the association shall have the power on behalf of its members to: (i)
issue, or cause to be issued, policies of medical malpractice insurance to
applicants, including incidental coverages, subject to limits as specified in
the plan of operation but not to exceed $2 million for each claimant under any
one policy and $6 million for all claimants under one policy in any one year;
(ii) underwrite the insurance and adjust and pay losses on the insurance; (iii)
appoint a service company or companies to perform the functions enumerated in
this subsection; (iv) assume reinsurance from its members; and (v) reinsure its
risks in whole or in part.

HISTORY: 1976, c. 85, § 38.1-776; 1980, c. 286, § 38.1-776.2; 1986, c. 562;
2003, cc. 488, 1026.