                                 CODE OF VIRGINIA

LOSS RESERVES (§ 38.2-4610.2)

A. Each title insurance company licensed in this Commonwealth shall annually
evaluate the adequacy of its total recorded loss reserves. Total recorded loss
reserves are the sum of claim reserves held under &#xA7; 38.2-4609 and unearned
premium reserves held under &#xA7; 38.2-4610.1. The evaluation of reserve
adequacy shall be prepared by a qualified actuary and shall be based on a
comparison of total recorded reserves to a projection of ultimate losses not yet
paid. The actuary shall certify the results of his evaluation in a report
complying with such applicable title insurance annual statement instructions as
may be issued by the National Association of Insurance Commissioners.

B. A domestic title insurance company shall record an additional reserve to the
extent the projection of ultimate losses not yet paid set forth in the report of
the qualified actuary exceeds total recorded loss reserves held by the company.
For purposes of calculating any additional reserve required, a domestic title
insurance company may discount the projection of ultimate losses not yet paid to
reflect the time value of money. The interest rate used by the actuary to
reflect the time value of money shall be based on a portfolio interest rate
approach with appropriate provision for risk margins and subject to published
actuarial standards for discounting reserves.

C. A foreign or alien title insurance company licensed in this Commonwealth
shall record an additional reserve to the extent the projection of ultimate
losses set forth in the report of the qualified actuary exceeds all recorded
reserves held by the company as reported in its most recent statutory statement
filed with the Commission, including reserves held under subsection C of &#xA7;
38.2-4610.1 and all reserves held under the laws of the jurisdiction of the
domicile of the foreign or alien title insurance company or any other
jurisdiction.

HISTORY: 1996, c. 494.