                                 CODE OF VIRGINIA

INSURANCE BUSINESS OF CONTROLLED SUBSIDIARY (§ 6.2-887)

A. In addition to the types of business authorized in § 6.2-885, a controlled
subsidiary corporation that is a domestic or foreign corporation, the majority
of the voting stock of which is owned, directly or indirectly, by (i) a bank or
banks organized under the laws of the United States, (ii) a bank or banks
organized under the laws of the Commonwealth, (iii) a bank or banks organized
under the laws of another state, or (iv) a bank holding company owning a bank or
banks in the Commonwealth or in another state, may be formed to:

   1. Transact the type of insurance business specified in &#xA7; 38.2-120 and
   other insurance normally written under the coverage known as financial
   institution blanket bonds;

   2. Underwrite insurance indemnifying the bank, its holding companies or its
   affiliates, and their directors and officers against liability; and

   3. Underwrite reinsurance of mortgage guaranty insurance, subject to such
   conditions as the Commission may impose, on loans secured by real estate made
   or purchased by such controlled reinsurance subsidiary&#8217;s affiliates or
   by a bank owning such controlled subsidiary.

B. Any such controlled subsidiary corporation shall (i) transact only the
insurance business specifically permitted by this section and (ii) be subject to
the further provisions of Title 38.2 otherwise applicable to insurance companies
transacting a comparable business.

C. The investment of any bank in the stock, services, or other obligations of
such a controlled subsidiary shall not exceed two percent of such bank&#8217;s
capital, surplus, and undivided profits.

HISTORY: 1976, c. 340, § 6.1-58.2; 1977, c. 190; 1986, c. 638; 1998, c. 48;
2010, c. 794.