                                 CODE OF VIRGINIA

REQUIREMENTS FOR LICENSURE AS GROUP SELF-INSURANCE ASSOCIATION; ANNUAL
ASSESSMENT (§ 65.2-802)

A. Two or more employers having a common interest may be licensed by the State
Corporation Commission as a group self-insurance association and permitted to
enter into agreements to pool their liabilities under this title. The members of
any such group self-insurance association may also enter into agreements to pool
their liabilities for workers&#8217; compensation benefits which may arise under
the laws of any other jurisdiction and other types of employers&#8217;
liabilities for the death or disablement of, or injury to, their employees.
Benefits payable by any such association for such members&#8217; liabilities
under the laws of any other jurisdiction shall extend only to employees
otherwise eligible for coverage under the provisions of this title.

B. The State Corporation Commission shall not license a group self-insurance
association or grant authorization for an employer to become a member of such
group unless it receives in such form as it requires satisfactory proof of the
solvency of any such employer, the financial ability of each to meet his
obligations as a member, and the ability of the group to pay or cause to be paid
the compensation in the amount and manner and when due as provided for in this
title and as may be agreed upon with respect to other types of employers&#8217;
liabilities which may be authorized and provided hereunder.

C. Members of a group shall execute a written agreement under which each agrees
to jointly and severally assume and discharge any liability under this title of
employers party to such agreement. Agreements among the members shall be subject
to approval by the State Corporation Commission; however, no such agreement nor
membership in a group self-insurance association shall relieve an employer of
the liabilities imposed by this title with respect to his employees. In addition
to the rights of the association under such agreements, in the event of failure
of the association to enforce such rights after reasonable notice to the
association, the State Corporation Commission shall have the right independently
to enforce on behalf of the association the joint and several liability of its
members under this title and the liability of members for any unpaid
contributions and assessments. The State Corporation Commission shall be
entitled to recover its expenses and attorneys&#8217; fees.

D. Any person, firm, or corporation desiring to engage in the business of
providing services for a group self-insurance association shall satisfy the
State Corporation Commission of its ability to perform the services necessary to
fulfill the employer&#8217;s obligations under this title before it undertakes
to provide such services to any group self-insurance association. The State
Corporation Commission may from time to time review and alter any decision
approving an employer as a member of a group or its approval of a group or of an
agency servicing a group. The State Corporation Commission may in its discretion
require the deposit of an acceptable security, indemnity, or bond or the
purchase of such excess insurance or the ceding of reinsurance on a specific or
aggregate excess of loss basis as may be required by the circumstances.

E. The State Corporation Commission may establish reasonable requirements and
standards for the approval of a group self-insurance association and the
administration of such associations including, without limitation, the quality,
amount and accounting of security deposits, bonds, excess insurance and
reinsurance, the membership in any group self-insurance association, the amount
of advance payments and reserves required of group self-insurance associations,
the investment of such funds, the form and content of financial information to
be submitted by a group self-insurance association and the frequency of such
submissions, and the terms of agreements between members of a group
self-insurance association. The State Corporation Commission may, after notice
and hearing, embody such requirements and standards and such other requirements
as may be reasonably necessary for the purposes of this section in regulations;
however, any group self-insurance association entering into a reinsurance
transaction pursuant to the provisions of this section shall be deemed an
insurer for purposes of such transaction and shall be subject to Article 3.1
(&#xA7; 38.2-1316.1 et seq.) of Chapter 13 of Title 38.2.

F. Notwithstanding any provision of this title to the contrary, each licensed
group self-insurance association shall be assessed annually by the State
Corporation Commission in like manner and amount to that provided by Chapter 4
(&#xA7; 38.2-400 et seq.) of Title 38.2 and shall pay such assessment in
accordance with the aforesaid provisions of law; however, for the purposes of
such assessment &#8220;direct gross premium income&#8221; of a licensed group
self-insurance association shall be the aggregate of the amounts determined to
be subject to the tax imposed by &#xA7; 65.2-1006 on each employer member of
such association.

G. Notwithstanding the provisions of &#xA7; 49-25, neither the State Corporation
Commission nor any other entity or person, as obligee under any surety bond
required under this section or any regulation adopted hereunder, shall be
required to institute suit against an association as a condition precedent to
the surety&#8217;s performance under the bond.

H. Subject to approval of the State Corporation Commission, and with such
conditions as the State Corporation Commission may require, two or more group
self-insurance associations formed pursuant to this section may merge if the
resulting group self-insurance association assumes in full all obligations of
the merged group self-insurance associations originally licensed pursuant to
this section.

HISTORY: 1979, c. 463, § 65.1-104.2; 1988, c. 365; 1990, c. 306; 1991, c. 355;
1994, cc. 333, 408; 2023, c. 426.