38.2-1223 - Subscriber's agreement and power of attorney.
§ 38.2-1223. Subscriber's agreement and power of attorney.
A. Every subscriber of a domestic assessable reciprocal shall execute asubscriber's agreement and power of attorney setting forth the rights,privileges and obligations of the subscriber as an underwriter and as apolicyholder, and the powers and duties of the attorney. Every subscriber ofa nonassessable reciprocal may execute a subscriber's agreement and power ofattorney setting forth the rights, privileges, and obligations of thesubscriber as an underwriter and as a policyholder, and the powers and dutiesof the attorney. If a nonassessable reciprocal does not require execution ofa subscriber's agreement and power of attorney, the reciprocal shall includeon its policies a statement that the subscriber shall be bound by the termsand conditions of the then current subscriber's agreement and power ofattorney on file with the attorney and the Commission, a copy of which shallbe provided to each subscriber with each new or renewal policy, and eachsubscriber shall by operation of law be bound by such subscriber's agreementand power of attorney as if individually executed. Without additionalexecution, notice or acceptance, every subscriber of a reciprocal agrees tobe bound by any modification of the terms of the power of attorney andsubscriber's agreement which is jointly made by the attorney and thesubscribers' advisory committee pursuant to § 38.2-1224, and which shall beon file with the attorney and the Commission. Notwithstanding the provisionsof this subsection, the original organizing subscribers of a reciprocal shallbe required to execute and file with the declaration referred to in §38.2-1219 the subscriber's agreement and power of attorney when such filingis in conjunction with the original organization and licensure by theCommission of a reciprocal as provided in § 38.2-1219. The subscriber'sagreement and power of attorney shall contain in substance the followingprovisions:
1. A designation and appointment of the attorney to act for and bind thesubscriber in all transactions relating to or arising out of the operationsof the reciprocal;
2. A provision empowering the attorney (i) to accept service of process onbehalf of the reciprocal and (ii) to appoint the clerk of the Commissionagent of the reciprocal upon whom may be served all lawful process against ornotice to the reciprocal;
3. Except for nonassessable policies, a provision for a contingent assessmentliability of each subscriber in a specified amount in accordance with §38.2-1212; and
4. The maximum amount to be deducted from advance premiums or deposits to bepaid the attorney, and the items of expense, in addition to losses, to bepaid by the reciprocal.
B. The subscriber's agreement may:
1. Provide for the right of substitution of the attorney and revocation ofthe power of attorney;
2. Impose any restrictions upon the exercise of the power agreed upon by thesubscribers;
3. Provide for the exercise of any right reserved to the subscribers directlyor through an advisory committee; or
4. Contain other lawful provisions considered advisable.
(1952, c. 317, § 38.1-700; 1986, c. 562; 1990, c. 10.)