                                 CODE OF VIRGINIA

POLICIES TO PROVIDE FOR ACCOUNTING TO BOARD; ADVANCE PREMIUM DEPOSIT RESERVE (§
51.1-1182)

A. Each insurance product purchased by the Board or contract for administrative
services related to a self-funded product shall provide for an accounting to the
Board not later than 120 days after the end of each product year. For an
insurance product, the accounting shall include (i) the amounts of premiums
actually accrued under the policy during the policy year, (ii) the total amount
of all claim charges incurred during the policy year, and (iii) the amount of
fees accrued under the policy during the year plus the total amount of all claim
charges incurred during the policy year. For a self-insured product, the
accounting shall include the total amount of all claim charges incurred during
the product year, the total amount of third-party administrator expenses, and
the total amount of other charges for administrative services.

B. Any portion of the excess of the total of clause (i) of subsection A over
clause (iii) of subsection A may, with the approval of the Board, be held by the
insurance company in an advance premium deposit reserve to be used by the
company for charges under the policy only. Any expenses incurred by the Board in
connection with the administration of the disability benefits provisions of the
program may be deducted from the advance premium deposit reserve. The advance
premium deposit reserve shall bear interest at a rate to be determined in
advance of each policy year by the insurance company. The rate shall be subject
to Board approval as being consistent with the rates generally used by the
company for similar funds held under other disability insurance policies. Any
portion of the excess not held by the insurance company shall be held by the
Board to be used for charges under the policy only. If the Board determines that
the advance premium deposit reserve, together with any portion of the excess
accumulated and held by the Board, has attained an amount estimated to make
satisfactory provision for adverse fluctuations in future charges under the
policy, any further excess shall inure to the benefit of the Commonwealth and
its political subdivisions as determined by the Board.

C. For purposes of this section, the insurance company may combine and
consolidate the policies issued by it as directed by the Board.

HISTORY: 2012, cc. 701, 823.