38.2-1035 - Domestic insurers to maintain minimum capital and surplus; proceedings by Commission if impairment found.
§ 38.2-1035. Domestic insurers to maintain minimum capital and surplus;proceedings by Commission if impairment found.
A. Each domestic insurer shall maintain at all times the minimum surplus if amutual insurer, and the minimum capital and surplus if a stock insurer,required by §§ 38.2-1028, 38.2-1029 or § 38.2-1030. If the Commission findsthat (i) the minimum capital and surplus of a domestic stock insurer isimpaired or (ii) the minimum surplus of a domestic mutual insurer isimpaired, the Commission shall issue an order requiring the insurer toeliminate the impairment within a period not exceeding ninety days. TheCommission may by order served upon the insurer prohibit the insurer fromissuing any new policies while the impairment exists.
B. Any domestic mutual insurer may make an assessment upon its assessablemembers for an amount that will provide funds to cover all or any part of theimpairment. However, no member shall be liable for an assessment exceedingthe limit specified in his policy, and no assessment shall be made upon anymember under a nonassessable policy. The assessment shall be made upon eachassessable member in proportion to the liability as expressed in the policy.With the prior approval of the Commission, the deficiency may be made up fromadvances or borrowed funds and subject to the restrictions provided in §38.2-1034 for obtaining guaranty funds.
C. If at the expiration of the designated period the insurer has notsatisfied the Commission that the impairment has been eliminated, an orderfor the rehabilitation or liquidation of the insurer may be entered asprovided in Chapter 15 (§ 38.2-1500 et seq.) of this title.
(Code 1950, § 38-511; 1952, c. 317, §§ 38.1-90, 38.1-93; 1966, c. 580; 1977,c. 322; 1986, c. 562.)