A. Nothing in this chapter shall be construed to reduce the liability forunpaid assessments of the insureds on an impaired or insolvent insureroperating under a plan with assessment liability.
B. Records shall be kept of all meetings of the board of directors to discussthe activities of the Association in carrying out its powers and duties under§ 38.2-1704. The records of the Association with respect to an impaired orinsolvent insurer shall not be disclosed prior to the termination of aliquidation, rehabilitation, or conservation proceeding involving theimpaired or insolvent insurer, except (i) upon the termination of theimpairment or insolvency of the insurer or (ii) upon the order of a court ofcompetent jurisdiction. Nothing in this subsection shall limit the duty ofthe Association to render a report of its activities under § 38.2-1711.
C. For the purpose of carrying out its obligations under this chapter, theAssociation shall be deemed to be a creditor of the impaired or insolventinsurer to the extent of assets attributable to covered policies andcontracts reduced by any amounts to which the Association is entitled assubrogee pursuant to subsection K of § 38.2-1704. Assets of the impaired orinsolvent insurer attributable to covered policies and contracts shall beused to continue all covered policies and contracts and pay all contractualobligations of the impaired or insolvent insurer as required by this chapter."Assets attributable to covered policies and contracts" means thatproportion of the assets which the reserves that should have been establishedfor these policies and contracts bear to the reserves that should have beenestablished for all insurance policies and contracts written by the impairedor insolvent insurer.
D. As a creditor of the impaired or insolvent insurer as established insubsection C and consistent with subsection B of § 38.2-1509, the Associationand other similar associations shall be entitled to receive a disbursement ofassets out of the marshaled assets, from time to time as the assets becomeavailable to reimburse it, as a credit against contractual obligations underthis chapter. If the liquidator has not, within 120 days of a finaldetermination of insolvency of an insurer by the receivership court, made anapplication to the court for the approval of a proposal to disburse assetsout of marshaled assets to guaranty associations having obligations becauseof the insolvency, then the Association shall be entitled to make applicationto the receivership court for approval of its own proposal to disburse theseassets.
E. 1. Prior to the termination of any liquidation, rehabilitation, orconservation proceeding, the court, in making an equitable distribution ofthe ownership rights of the insolvent insurer, may take into considerationthe contributions of the respective parties, including the Association, theshareholders, and policy and contract owners of the insolvent insurer, andany other party with a legitimate interest. In this determination,consideration shall be given to the welfare of the policy and contract ownersof the continuing or successor insurer.
2. No distribution to any stockholders, if any, of an impaired or insolventinsurer shall be made until and unless the total amount of valid claims ofthe Association with interest thereon for funds expended in carrying out itspowers and duties under § 38.2-1704 with respect to the insurer have beenfully recovered by the Association.
F. 1. If an order for liquidation or rehabilitation of an insurer domiciledin this Commonwealth has been entered, the receiver appointed under thatorder shall have a right to recover on behalf of the insurer, from anyaffiliate that controlled it, the amount of distributions, other than stockdividends paid by the insurer on its capital stock, made at any time duringthe five years preceding the petition for liquidation or rehabilitation,subject to the limitations of subdivisions 2 through 4.
2. No such distribution shall be recoverable if the insurer shows that whenpaid the distribution was lawful and reasonable, and that the insurer did notknow and could not reasonably have known that the distribution mightadversely affect the ability of the insurer to fulfill its contractualobligations.
3. Any person who was an affiliate that controlled the insurer at the timethe distributions were paid shall be liable up to the amount of distributionsreceived. Any person who was an affiliate that controlled the insurer at thetime the distributions were declared shall be liable up to the amount ofdistributions that would have been received if they had been paidimmediately. If two or more persons are liable with respect to the samedistributions, they shall be jointly and severally liable.
4. The maximum amount recoverable under this subsection shall be the amountin excess of all other available assets of the insolvent insurer needed topay (i) the contractual obligations of the insolvent insurer and (ii) thereasonable expenses of the Association incurred in connection with theperformance of its duties for the insolvent insurer.
5. If any person liable under subdivision 3 is insolvent, all its affiliatesthat controlled it at the time the distribution was paid shall be jointly andseverally liable for any resulting deficiency in the amount recovered fromthe insolvent affiliate.
(1976, c. 330, § 38.1-482.28; 1986, c. 562; 2010, c. 510.)
A. Nothing in this chapter shall be construed to reduce the liability forunpaid assessments of the insureds on an impaired or insolvent insureroperating under a plan with assessment liability.
B. Records shall be kept of all meetings of the board of directors to discussthe activities of the Association in carrying out its powers and duties under§ 38.2-1704. The records of the Association with respect to an impaired orinsolvent insurer shall not be disclosed prior to the termination of aliquidation, rehabilitation, or conservation proceeding involving theimpaired or insolvent insurer, except (i) upon the termination of theimpairment or insolvency of the insurer or (ii) upon the order of a court ofcompetent jurisdiction. Nothing in this subsection shall limit the duty ofthe Association to render a report of its activities under § 38.2-1711.
C. For the purpose of carrying out its obligations under this chapter, theAssociation shall be deemed to be a creditor of the impaired or insolventinsurer to the extent of assets attributable to covered policies andcontracts reduced by any amounts to which the Association is entitled assubrogee pursuant to subsection K of § 38.2-1704. Assets of the impaired orinsolvent insurer attributable to covered policies and contracts shall beused to continue all covered policies and contracts and pay all contractualobligations of the impaired or insolvent insurer as required by this chapter."Assets attributable to covered policies and contracts" means thatproportion of the assets which the reserves that should have been establishedfor these policies and contracts bear to the reserves that should have beenestablished for all insurance policies and contracts written by the impairedor insolvent insurer.
D. As a creditor of the impaired or insolvent insurer as established insubsection C and consistent with subsection B of § 38.2-1509, the Associationand other similar associations shall be entitled to receive a disbursement ofassets out of the marshaled assets, from time to time as the assets becomeavailable to reimburse it, as a credit against contractual obligations underthis chapter. If the liquidator has not, within 120 days of a finaldetermination of insolvency of an insurer by the receivership court, made anapplication to the court for the approval of a proposal to disburse assetsout of marshaled assets to guaranty associations having obligations becauseof the insolvency, then the Association shall be entitled to make applicationto the receivership court for approval of its own proposal to disburse theseassets.
E. 1. Prior to the termination of any liquidation, rehabilitation, orconservation proceeding, the court, in making an equitable distribution ofthe ownership rights of the insolvent insurer, may take into considerationthe contributions of the respective parties, including the Association, theshareholders, and policy and contract owners of the insolvent insurer, andany other party with a legitimate interest. In this determination,consideration shall be given to the welfare of the policy and contract ownersof the continuing or successor insurer.
2. No distribution to any stockholders, if any, of an impaired or insolventinsurer shall be made until and unless the total amount of valid claims ofthe Association with interest thereon for funds expended in carrying out itspowers and duties under § 38.2-1704 with respect to the insurer have beenfully recovered by the Association.
F. 1. If an order for liquidation or rehabilitation of an insurer domiciledin this Commonwealth has been entered, the receiver appointed under thatorder shall have a right to recover on behalf of the insurer, from anyaffiliate that controlled it, the amount of distributions, other than stockdividends paid by the insurer on its capital stock, made at any time duringthe five years preceding the petition for liquidation or rehabilitation,subject to the limitations of subdivisions 2 through 4.
2. No such distribution shall be recoverable if the insurer shows that whenpaid the distribution was lawful and reasonable, and that the insurer did notknow and could not reasonably have known that the distribution mightadversely affect the ability of the insurer to fulfill its contractualobligations.
3. Any person who was an affiliate that controlled the insurer at the timethe distributions were paid shall be liable up to the amount of distributionsreceived. Any person who was an affiliate that controlled the insurer at thetime the distributions were declared shall be liable up to the amount ofdistributions that would have been received if they had been paidimmediately. If two or more persons are liable with respect to the samedistributions, they shall be jointly and severally liable.
4. The maximum amount recoverable under this subsection shall be the amountin excess of all other available assets of the insolvent insurer needed topay (i) the contractual obligations of the insolvent insurer and (ii) thereasonable expenses of the Association incurred in connection with theperformance of its duties for the insolvent insurer.
5. If any person liable under subdivision 3 is insolvent, all its affiliatesthat controlled it at the time the distribution was paid shall be jointly andseverally liable for any resulting deficiency in the amount recovered fromthe insolvent affiliate.
(1976, c. 330, § 38.1-482.28; 1986, c. 562; 2010, c. 510.)
A. Nothing in this chapter shall be construed to reduce the liability forunpaid assessments of the insureds on an impaired or insolvent insureroperating under a plan with assessment liability.
B. Records shall be kept of all meetings of the board of directors to discussthe activities of the Association in carrying out its powers and duties under§ 38.2-1704. The records of the Association with respect to an impaired orinsolvent insurer shall not be disclosed prior to the termination of aliquidation, rehabilitation, or conservation proceeding involving theimpaired or insolvent insurer, except (i) upon the termination of theimpairment or insolvency of the insurer or (ii) upon the order of a court ofcompetent jurisdiction. Nothing in this subsection shall limit the duty ofthe Association to render a report of its activities under § 38.2-1711.
C. For the purpose of carrying out its obligations under this chapter, theAssociation shall be deemed to be a creditor of the impaired or insolventinsurer to the extent of assets attributable to covered policies andcontracts reduced by any amounts to which the Association is entitled assubrogee pursuant to subsection K of § 38.2-1704. Assets of the impaired orinsolvent insurer attributable to covered policies and contracts shall beused to continue all covered policies and contracts and pay all contractualobligations of the impaired or insolvent insurer as required by this chapter."Assets attributable to covered policies and contracts" means thatproportion of the assets which the reserves that should have been establishedfor these policies and contracts bear to the reserves that should have beenestablished for all insurance policies and contracts written by the impairedor insolvent insurer.
D. As a creditor of the impaired or insolvent insurer as established insubsection C and consistent with subsection B of § 38.2-1509, the Associationand other similar associations shall be entitled to receive a disbursement ofassets out of the marshaled assets, from time to time as the assets becomeavailable to reimburse it, as a credit against contractual obligations underthis chapter. If the liquidator has not, within 120 days of a finaldetermination of insolvency of an insurer by the receivership court, made anapplication to the court for the approval of a proposal to disburse assetsout of marshaled assets to guaranty associations having obligations becauseof the insolvency, then the Association shall be entitled to make applicationto the receivership court for approval of its own proposal to disburse theseassets.
E. 1. Prior to the termination of any liquidation, rehabilitation, orconservation proceeding, the court, in making an equitable distribution ofthe ownership rights of the insolvent insurer, may take into considerationthe contributions of the respective parties, including the Association, theshareholders, and policy and contract owners of the insolvent insurer, andany other party with a legitimate interest. In this determination,consideration shall be given to the welfare of the policy and contract ownersof the continuing or successor insurer.
2. No distribution to any stockholders, if any, of an impaired or insolventinsurer shall be made until and unless the total amount of valid claims ofthe Association with interest thereon for funds expended in carrying out itspowers and duties under § 38.2-1704 with respect to the insurer have beenfully recovered by the Association.
F. 1. If an order for liquidation or rehabilitation of an insurer domiciledin this Commonwealth has been entered, the receiver appointed under thatorder shall have a right to recover on behalf of the insurer, from anyaffiliate that controlled it, the amount of distributions, other than stockdividends paid by the insurer on its capital stock, made at any time duringthe five years preceding the petition for liquidation or rehabilitation,subject to the limitations of subdivisions 2 through 4.
2. No such distribution shall be recoverable if the insurer shows that whenpaid the distribution was lawful and reasonable, and that the insurer did notknow and could not reasonably have known that the distribution mightadversely affect the ability of the insurer to fulfill its contractualobligations.
3. Any person who was an affiliate that controlled the insurer at the timethe distributions were paid shall be liable up to the amount of distributionsreceived. Any person who was an affiliate that controlled the insurer at thetime the distributions were declared shall be liable up to the amount ofdistributions that would have been received if they had been paidimmediately. If two or more persons are liable with respect to the samedistributions, they shall be jointly and severally liable.
4. The maximum amount recoverable under this subsection shall be the amountin excess of all other available assets of the insolvent insurer needed topay (i) the contractual obligations of the insolvent insurer and (ii) thereasonable expenses of the Association incurred in connection with theperformance of its duties for the insolvent insurer.
5. If any person liable under subdivision 3 is insolvent, all its affiliatesthat controlled it at the time the distribution was paid shall be jointly andseverally liable for any resulting deficiency in the amount recovered fromthe insolvent affiliate.
(1976, c. 330, § 38.1-482.28; 1986, c. 562; 2010, c. 510.)
