A. When an association is activated under § 38.2-2801, a stabilizationreserve fund shall be created. The fund shall be administered by fivedirectors appointed by the Commission, one of whom shall be a representativeof the Commission, two of whom shall be representatives of the association,and two of whom shall be representatives of the association's policyholders.
B. The directors shall act by majority vote with three directors constitutinga quorum for the transaction of any business or the exercise of any power ofthe fund. The directors shall serve without salary, but each director shallbe reimbursed for actual and necessary expenses incurred in the performanceof his official duties as a director of the fund. The directors shall not besubject to any personal liability with respect to the administration of thefund.
C. Each policyholder shall pay to the association a stabilization reservefund charge equal to one-third of the annual premium due for medicalmalpractice insurance through the association until the fund reaches a leveldeemed appropriate by the Commission. The means of payment shall be set forthin the plan of operation and shall be separately stated in the policy. Theassociation shall cancel the policy of any policyholder who fails to pay thestabilization reserve fund charge. Upon the termination of any policy duringthe term of the policy, payments made to the stabilization reserve fund shallbe returned to the policyholder on a pro rata basis identical to that appliedin computing that portion of the premium which is returned to thepolicyholder.
D. All moneys received by the fund shall be held in a separate restrictedcash account under the sole control of an independent fund manager to beselected by the directors. The fund manager may invest the moneys held,subject to the approval of the directors. All investment income shall becredited to the fund. All expenses of administration of the fund shall becharged against the fund. The moneys held shall be used solely for thefollowing purposes: (i) to reimburse the association for any and allexpenses, taxes, licenses and fees paid by the association which are properlychargeable or allocable to the stabilization reserve fund; or (ii) to pay anyretrospective premium adjustment charge levied by the association. Payment ofretrospective premium adjustment charges and other authorized payments shallbe made by the directors upon certification to them by the association of theamount due. If all moneys accruing to the fund are exhausted in payment ofretrospective premium adjustment charges, all liability and obligations ofthe association's policyholders with respect to the payment of retrospectivepremium adjustment charges shall terminate and shall be conclusively presumedto have been discharged.
E. The association shall promptly pay the fund manager of the fund allstabilization reserve fund charges that it collects from its policyholders.
F. Upon dissolution of the association, all assets remaining in the fundshall be distributed equitably to the policyholders who have contributed tothe fund under procedures authorized by the directors. Distribution of assetsremaining in the fund shall be made after final disposition of all claims,expenses, and liabilities against the fund, including reimbursement ofpreliminary organizational assessments made pursuant to subsection B of §38.2-2804.
(1976, c. 85, § 38.1-781; 1977, c. 154; 1986, c. 562; 1987, cc. 526, 554;1988, c. 341.)
A. When an association is activated under § 38.2-2801, a stabilizationreserve fund shall be created. The fund shall be administered by fivedirectors appointed by the Commission, one of whom shall be a representativeof the Commission, two of whom shall be representatives of the association,and two of whom shall be representatives of the association's policyholders.
B. The directors shall act by majority vote with three directors constitutinga quorum for the transaction of any business or the exercise of any power ofthe fund. The directors shall serve without salary, but each director shallbe reimbursed for actual and necessary expenses incurred in the performanceof his official duties as a director of the fund. The directors shall not besubject to any personal liability with respect to the administration of thefund.
C. Each policyholder shall pay to the association a stabilization reservefund charge equal to one-third of the annual premium due for medicalmalpractice insurance through the association until the fund reaches a leveldeemed appropriate by the Commission. The means of payment shall be set forthin the plan of operation and shall be separately stated in the policy. Theassociation shall cancel the policy of any policyholder who fails to pay thestabilization reserve fund charge. Upon the termination of any policy duringthe term of the policy, payments made to the stabilization reserve fund shallbe returned to the policyholder on a pro rata basis identical to that appliedin computing that portion of the premium which is returned to thepolicyholder.
D. All moneys received by the fund shall be held in a separate restrictedcash account under the sole control of an independent fund manager to beselected by the directors. The fund manager may invest the moneys held,subject to the approval of the directors. All investment income shall becredited to the fund. All expenses of administration of the fund shall becharged against the fund. The moneys held shall be used solely for thefollowing purposes: (i) to reimburse the association for any and allexpenses, taxes, licenses and fees paid by the association which are properlychargeable or allocable to the stabilization reserve fund; or (ii) to pay anyretrospective premium adjustment charge levied by the association. Payment ofretrospective premium adjustment charges and other authorized payments shallbe made by the directors upon certification to them by the association of theamount due. If all moneys accruing to the fund are exhausted in payment ofretrospective premium adjustment charges, all liability and obligations ofthe association's policyholders with respect to the payment of retrospectivepremium adjustment charges shall terminate and shall be conclusively presumedto have been discharged.
E. The association shall promptly pay the fund manager of the fund allstabilization reserve fund charges that it collects from its policyholders.
F. Upon dissolution of the association, all assets remaining in the fundshall be distributed equitably to the policyholders who have contributed tothe fund under procedures authorized by the directors. Distribution of assetsremaining in the fund shall be made after final disposition of all claims,expenses, and liabilities against the fund, including reimbursement ofpreliminary organizational assessments made pursuant to subsection B of §38.2-2804.
(1976, c. 85, § 38.1-781; 1977, c. 154; 1986, c. 562; 1987, cc. 526, 554;1988, c. 341.)
A. When an association is activated under § 38.2-2801, a stabilizationreserve fund shall be created. The fund shall be administered by fivedirectors appointed by the Commission, one of whom shall be a representativeof the Commission, two of whom shall be representatives of the association,and two of whom shall be representatives of the association's policyholders.
B. The directors shall act by majority vote with three directors constitutinga quorum for the transaction of any business or the exercise of any power ofthe fund. The directors shall serve without salary, but each director shallbe reimbursed for actual and necessary expenses incurred in the performanceof his official duties as a director of the fund. The directors shall not besubject to any personal liability with respect to the administration of thefund.
C. Each policyholder shall pay to the association a stabilization reservefund charge equal to one-third of the annual premium due for medicalmalpractice insurance through the association until the fund reaches a leveldeemed appropriate by the Commission. The means of payment shall be set forthin the plan of operation and shall be separately stated in the policy. Theassociation shall cancel the policy of any policyholder who fails to pay thestabilization reserve fund charge. Upon the termination of any policy duringthe term of the policy, payments made to the stabilization reserve fund shallbe returned to the policyholder on a pro rata basis identical to that appliedin computing that portion of the premium which is returned to thepolicyholder.
D. All moneys received by the fund shall be held in a separate restrictedcash account under the sole control of an independent fund manager to beselected by the directors. The fund manager may invest the moneys held,subject to the approval of the directors. All investment income shall becredited to the fund. All expenses of administration of the fund shall becharged against the fund. The moneys held shall be used solely for thefollowing purposes: (i) to reimburse the association for any and allexpenses, taxes, licenses and fees paid by the association which are properlychargeable or allocable to the stabilization reserve fund; or (ii) to pay anyretrospective premium adjustment charge levied by the association. Payment ofretrospective premium adjustment charges and other authorized payments shallbe made by the directors upon certification to them by the association of theamount due. If all moneys accruing to the fund are exhausted in payment ofretrospective premium adjustment charges, all liability and obligations ofthe association's policyholders with respect to the payment of retrospectivepremium adjustment charges shall terminate and shall be conclusively presumedto have been discharged.
E. The association shall promptly pay the fund manager of the fund allstabilization reserve fund charges that it collects from its policyholders.
F. Upon dissolution of the association, all assets remaining in the fundshall be distributed equitably to the policyholders who have contributed tothe fund under procedures authorized by the directors. Distribution of assetsremaining in the fund shall be made after final disposition of all claims,expenses, and liabilities against the fund, including reimbursement ofpreliminary organizational assessments made pursuant to subsection B of §38.2-2804.
(1976, c. 85, § 38.1-781; 1977, c. 154; 1986, c. 562; 1987, cc. 526, 554;1988, c. 341.)
