                                 CODE OF VIRGINIA

POLICIES TO PROVIDE FOR ACCOUNTING TO BOARD; ADVANCE PREMIUM DEPOSIT RESERVE (§
51.1-514)

A. Each policy purchased by the Board shall provide for an accounting to the
Board not later than 120 days after the end of each policy year. The accounting
shall include (i) the amounts of premiums actually accrued under the policy
during the policy year, (ii) the total amount of all mortality and other claim
charges incurred during the policy year, and (iii) the amounts of the
insurer&#8217;s expenses and risk charges for the policy year.

B. Any portion of the excess of the total of item (i) over the sum of items (ii)
and (iii) 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 on behalf of the group
insurance 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 group life 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
other employers participating in the group insurance program 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: 1960, c. 604, § 51-111.67:7; 1970, c. 476; 1973, c. 523; 1978, c. 841;
1983, c. 457; 1990, c. 832; 1991, c. 700; 1997, c. 273.