                                 CODE OF VIRGINIA

DISPOSITION OF RESERVE FOR AN EMERGENCY FUND; DISCONTINUANCE OF BUSINESS;
RECEIVER (§ 38.2-4012)

The reserve for an emergency fund required by § 38.2-4010, together with the
income earned on that fund, shall be a trust fund for the payment of death
claims. Whenever the reserve for an emergency fund exceeds the amount of the
maximum sum provided by the certificates issued and in force by the society, the
investment income generated by the reserve or an emergency fund shall be added
back into that fund. It may apply that excess, or any portion of that excess,
(i) in reduction of assessments upon certificate holders, or (ii) in any other
equitable division or apportionment that its rules or contracts provide for the
payment of claims. When any society discontinues business, delinquency
proceedings against the society may be instituted and conducted as provided in
Chapter 15 (§ 38.2-1500 et seq.) of this title. In the delinquency proceedings,
any unexhausted portion of the reserve for an emergency fund shall be used in
payment of accrued claims upon certificates. If this amount is insufficient to
pay the claims in full, then the payment of the claims shall be on a pro rata
basis; and if a balance remains, the payment of claims shall then be made in the
order of their occurrence. Any remaining balance shall be distributed among the
members in proportion to their respective premium payments during the latest
full year of active business of the society.

HISTORY: Code 1950, § 38-464; 1952, c. 317, § 38.1-537; 1986, c. 562.