                                 CODE OF VIRGINIA

RBC REPORTS (§ 38.2-5502)

A. Every domestic licensee shall, on or prior to each March 1, the &#8220;filing
date,&#8221; prepare and submit to the Commission a report of its RBC Levels as
of the end of the calendar year just ended, in a form and containing such
information as is required by the RBC Instructions. In addition, every domestic
licensee shall file its RBC Report:

   1. With the NAIC in accordance with the RBC Instructions; and

   2. With the insurance commissioner in any state in which the licensee is
   authorized to do business, if the insurance commissioner has notified the
   licensee of its request in writing, in which case, the licensee shall file its
   RBC Report not later than the later of:
   				a. Fifteen days from the receipt of notice to file its RBC Report with
   that state; or
   				b. The filing date.

B. A life and health insurer&#8217;s RBC shall be determined in accordance with
the formula set forth in the RBC Instructions. The formula shall take into
account, and may adjust for the covariance between, the following risks:

   1. The risk with respect to the insurer&#8217;s assets;

   2. The risk of adverse insurance experience with respect to the
   insurer&#8217;s liabilities and obligations;

   3. The interest rate risk with respect to the insurer&#8217;s business; and

   4. All other business risks and such other relevant risks as are set forth in
   the RBC Instructions.
   				Each risk shall be determined in each case by applying the factors in the
   manner set forth in the RBC Instructions.

C. A property and casualty insurer&#8217;s RBC shall be determined in accordance
with the formula set forth in the RBC Instructions. The formula shall take into
account, and may adjust for the covariance between, the following risks:

   1. Asset risk;

   2. Credit risk;

   3. Underwriting risk; and

   4. All other business risks and such other relevant risks as are set forth in
   the RBC Instructions.
   				Each risk shall be determined in each case by applying the factors in the
   manner set forth in the RBC Instructions.

D. A health organization&#8217;s RBC shall be determined in accordance with the
formula set forth in the RBC Instructions. The formula shall take into account,
and may adjust for the covariance between, the following risks:

   1. Asset risk;

   2. Credit risk;

   3. Underwriting risk; and

   4. All other business risks and such other relevant risks as are set forth in
   the RBC Instructions.
   				Each risk shall be determined in each case by applying the factors in the
   manner set forth in the RBC Instructions.

E. An excess of capital over the amount produced by the risk-based capital
requirements contained in this Act and the formulas, schedules and instructions
referred to in this Act is desirable in the business of insurance. Accordingly,
licensees should seek to maintain capital above the RBC levels required by this
Act. Additional capital is used and useful in the insurance business and helps
to secure a licensee against various risks inherent in, or affecting, the
business of insurance and not accounted for or only partially measured by the
risk-based capital requirements contained in this Act.

F. If a domestic licensee files an RBC Report which in the judgment of the
Commission is inaccurate, then the Commission shall adjust the RBC Report to
correct the inaccuracy and shall notify the licensee of the adjustment. The
notice shall contain a statement of the reason for the adjustment. An RBC Report
as so adjusted is referred to as an &#8220;Adjusted RBC Report.&#8221;

HISTORY: 1995, c. 789; 2000, c. 47.