2006 Code of Virginia § 38.2-2527 - Limitation on single risk to be assumed

38.2-2527. Limitation on single risk to be assumed.

A. No single risk shall be assumed by a mutual assessment property andcasualty insurer in an amount exceeding ten percent of its surplus topolicyholders. Any risk or portion of any risk which has been reinsured inaccordance with 38.2-2528 shall be deducted in determining the limitationof risk prescribed by this section. For the purposes of this section theamount of surplus to policyholders shall be determined on the basis of thelast financial statement of the insurer, or the last report of examinationfiled with the Commission, whichever is more recent, at the time the risk isassumed. Mutual assessment property and casualty insurers licensed on orbefore July 1, 1986, shall conform to this limitation by July 1, 1991.

B. Until July 1, 1991, the following single risk limits after deducting forreinsurance will apply:

1. No insurer having less than $2 million insurance in force shall insure any1 risk for more than $10,000;

2. No insurer having more than $2 million but less than $5 million insurancein force shall insure any 1 risk for more than $12,000;

3. No insurer having more than $5 million but less than $10 million insurancein force shall insure any 1 risk for more than $20,000;

4. No insurer having more than $10 million insurance in force shall insureany 1 risk for a sum in excess of 15 cents for each $100 insurance it has inforce; and

5. An insurer may insure any one risk in larger sums than prescribed in thissection if (i) the excess over such prescribed maximum is reinsured asauthorized in this chapter or (ii) the excess may be increased by the extentof twenty-five percent of the surplus of the insurer as of the time theinsurance is written.

(1986, c. 562.)