                                 CODE OF VIRGINIA

BONDS OF OFFICERS AND EMPLOYEES (§ 6.2-1127)

A. The directors of every savings institution shall require a bond with
corporate surety from each of the active officers and employees of the
institution as an indemnity for any loss the institution may sustain as a result
of such person&#8217;s fraud, dishonesty, theft, or embezzlement. In lieu of
individual bonds a blanket bond with corporate surety covering all active
officers and employees of the institution may, with the approval of the board of
directors, be obtained. The Commission shall, not less than twice during any
period of three consecutive calendar years, examine all such bonds and pass on
their sufficiency and either the board of directors or the Commission may
require new or additional bonds at any time. The corporate surety shall have a
license issued by the Commission.

B. If a savings institution determines that it is unable to obtain the surety
bond coverage required by subsection A, it shall immediately notify the
Commission. The Commission shall forthwith investigate to determine whether such
coverage is available to the institution. If the Commission determines, after
such investigation, that such coverage is not reasonably available to the
institution, the Commission may, but shall not be required to, close the
institution solely because of the unavailability of such coverage under &#xA7;
6.2-1199. If the institution is not closed because of the unavailability of such
coverage, the Commission shall closely monitor the institution to ensure that
such coverage is obtained as soon as possible, and shall take such further
action under &#xA7; 6.2-1199 or 6.2-1200 as the Commission deems necessary.

C. The institution, at its cost, may also obtain insurance to protect its
directors, officers, and employees against lawsuits arising out of claims of
negligence or misconduct.

HISTORY: Code 1950, § 6-201.36; 1960, c. 402; 1966, c. 584, § 6.1-166; 1972,
c. 796, § 6.1-195.43; 1979, c. 60; 1985, c. 425, § 6.1-194.20; 1986, c. 628;
2010, c. 794.