2006 Code of Virginia § 38.2-1045 - Deposits required of insurers generally

38.2-1045. Deposits required of insurers generally.

A. Except as otherwise provided in this title, before the Commission issues alicense to transact the business of insurance in this Commonwealth to anyinsurer, that insurer shall deposit with the State Treasurer securities that(i) are legal investments under the laws of this Commonwealth for publicsinking funds or for other public funds, (ii) are not in default as toprincipal or interest, (iii) have a current market value of not less than$50,000 nor more than $500,000, and (iv) are issued pursuant to a system ofbook-entry evidencing ownership interests of the securities with transfers ofownership interests effected on the records of a depository and itsparticipants pursuant to rules and procedures established by the depository.

B. The Commission may require a reasonable amount of additional deposits insecurities that meet the requirements of clauses (i), (ii) and (iv) ofsubsection A of this section, whenever the Commission determines that theinsurer's financial condition, method of operation, or manner of doingbusiness is such that the Commission is not satisfied that it can meet itsobligations to all policyholders.

C. Neither the deposit referred to in this section nor the alternate depositpermitted by 38.2-1049 shall be required of (i) any mutual assessmentproperty and casualty insurance company, (ii) any fraternal benefit society,or (iii) any insurer transacting exclusively an ocean marine business in thisCommonwealth.

D. Any insurer which on June 30, 1991, instead of the deposit of securitiesrequired by subsection A, has entered into a bond with surety, approved bythe Commission, with any conditions the Commission requires, shall have untilthe next renewal, anniversary, or expiration date of such bond, or until June30, 1992, whichever comes first, to comply with the deposit provisions ofsubsection A. The surety shall be licensed in this Commonwealth to transactthe business of suretyship and shall not be directly or indirectly under thesame ownership or management as the principal on the bond.

E. Every insurer subject to the provisions of this section having physicalsecurities deposited with the State Treasurer on or before June 30, 1992,shall comply with the provisions of clause (iv) in subsection A not laterthan January 1, 1993.

(Code 1950, 38-39; 1952, c. 317, 38.1-108; 1956, c. 234; 1960, c. 558;1964, c. 605; 1973, c. 178; 1975, c. 556; 1986, c. 562; 1991, c. 261; 1992,c. 14.)