§ 38.2-2905. Policy forms; applicants to be issued policies; cancellation ofpolicies; rates; group retrospective rating plan; examination of business ofAssociation.
A. All policies issued by the Association shall be subject to the groupretrospective premium adjustment and to the stabilization reserve fundrequired by § 38.2-2906. No policy form shall be used by the Associationunless it has been filed with the Commission and either (i) the Commissionhas approved it or (ii) thirty days have elapsed and the Commission has notdisapproved the form or endorsement for one or more of the reasons enumeratedin subsection A of § 38.2-317.
B. Policies shall be issued by the Association, after receipt of the premiumor portion of the premium prescribed by the plan of operation, to applicantsthat (i) meet the minimum underwriting standards of the Association, and (ii)have no unpaid or uncontested premium due as evidenced by the applicanthaving failed to make written objection to premium charges within thirty daysafter billing.
C. Any policy issued by the Association may be cancelled for any one of thefollowing reasons:
1. Nonpayment of premium or portion of the premium;
2. Suspension or revocation of the insured's license to conduct business;
3. Failure of the insured to meet the minimum underwriting standards;
4. Failure of the insured to meet other minimum standards prescribed by theplan of operation; or
5. Nonpayment of any stabilization reserve fund charge.
D. The rates, rating plans, rating rules, rating classifications, premiumpayment plans and territories applicable to the insurance written by theAssociation, and related supplementary rate information shall be subject tothe provisions of Chapter 20 (§ 38.2-2000 et seq.) of this title. Dueconsideration shall be given to the past and prospective loss and expenseexperience for the line, subclassification or type of commercial liabilityinsurance written in this Commonwealth, trends in the frequency and severityof losses, the investment income of the Association, and other informationthe Commission requires. All rates shall be on an actuarially sound basis,giving due consideration to the stabilization reserve fund, and shall becalculated to be self-supporting. The Commission shall take all appropriatesteps to make available to the Association the loss and expense experience ofinsurers writing or having written the same line, subclassification or typeof commercial liability insurance in this Commonwealth.
E. All policies issued by the Association shall be subject to a nonprofitgroup retrospective premium adjustment to be approved by the Commission underwhich the final total premium for all policyholders for each line,subclassification or type of commercial liability insurance issued each yearby the Association, as a group, will be calculated based upon the experienceof all such policyholders. The experience of all such policyholders shall becalculated following the end of each year and shall be based upon earnedpremiums, administrative expenses, loss and loss adjustment expenses, andtaxes, plus a reasonable allowance for contingencies and servicing, for eachline, subclassification or type of commercial liability insurance.Policyholders shall be given full credit for all investment income, net ofexpenses and a reasonable management fee on policyholder supplied funds. Anyfinal premium resulting from a retrospective premium adjustment will becollected from those moneys in the stabilization reserve fund set forth in §38.2-2906 that are attributable to the policies written for the particularline, subclassification or type of commercial liability insurance or group ofsuch risks for which activation occurred pursuant to § 38.2-2901. The maximumpremium for all policyholders as a group shall be limited as provided in §38.2-2906.
F. 1. If the stabilization reserve fund account for one or more lines,subclassifications or types of commercial liability insurance is exhausted inthe payment of the maximum final premium for all such policies issued duringthe year for which a deficit exists, the Association shall certify to theCommission the estimated amount of any remaining deficit for any year'spolicies. Within sixty days after such certification, the Commission shallauthorize the Association to recover from the members their respective shareof such deficit. No member insurer may be assessed in any year an amountgreater than two percent of the member's direct gross premium income asdefined in § 58.1-2500 from liability insurance for the calendar yearpreceding the assessment. If an assessment in any year is not sufficient toeliminate such deficit, a like assessment may be made the ensuing year butnot thereafter.
2. A member shall be permitted to recover any assessment made by theAssociation under subdivision 1 of this subsection by deducting the member'sshare of the deficit from future premium taxes due the Commonwealth. Theamount of premium tax deduction for each member's share of the deficit shallbe apportioned by the Commission so that in the aggregate, the total premiumtax deduction permitted for all members in any one taxable year shall notexceed 0.05 of one percent of the direct gross premium income for theliability insurance written by member insurers defined in subsection A of §38.2-2901. To the extent that the said 0.05 of one percent is reached in anyone taxable year, any amount not so offset may be carried over to asubsequent year or years.
G. In the event that sufficient funds are not available for the soundfinancial operation of the Association, subject to recoupment as provided inthis chapter and the plan of operation, all members shall, on a temporarybasis, contribute to the financial requirements of the Association in themanner provided in this chapter. The contribution shall be reimbursed to themembers by the procedure set forth in subdivision 2 of subsection F of thissection.
H. The Commission shall examine the business of the Association as often asit deems appropriate to make certain that the group retrospective premiumadjustments are being calculated and applied in a manner consistent with thissection. If the Commission finds that the group retrospective premiumadjustments are not being made in a manner consistent with this section, itshall issue an order to the Association, specifying (i) how such calculationand application are not consistent and (ii) stating what corrective actionshall be taken.
§ 38.2-2905. Policy forms; applicants to be issued policies; cancellation ofpolicies; rates; group retrospective rating plan; examination of business ofAssociation.
A. All policies issued by the Association shall be subject to the groupretrospective premium adjustment and to the stabilization reserve fundrequired by § 38.2-2906. No policy form shall be used by the Associationunless it has been filed with the Commission and either (i) the Commissionhas approved it or (ii) thirty days have elapsed and the Commission has notdisapproved the form or endorsement for one or more of the reasons enumeratedin subsection A of § 38.2-317.
B. Policies shall be issued by the Association, after receipt of the premiumor portion of the premium prescribed by the plan of operation, to applicantsthat (i) meet the minimum underwriting standards of the Association, and (ii)have no unpaid or uncontested premium due as evidenced by the applicanthaving failed to make written objection to premium charges within thirty daysafter billing.
C. Any policy issued by the Association may be cancelled for any one of thefollowing reasons:
1. Nonpayment of premium or portion of the premium;
2. Suspension or revocation of the insured's license to conduct business;
3. Failure of the insured to meet the minimum underwriting standards;
4. Failure of the insured to meet other minimum standards prescribed by theplan of operation; or
5. Nonpayment of any stabilization reserve fund charge.
D. The rates, rating plans, rating rules, rating classifications, premiumpayment plans and territories applicable to the insurance written by theAssociation, and related supplementary rate information shall be subject tothe provisions of Chapter 20 (§ 38.2-2000 et seq.) of this title. Dueconsideration shall be given to the past and prospective loss and expenseexperience for the line, subclassification or type of commercial liabilityinsurance written in this Commonwealth, trends in the frequency and severityof losses, the investment income of the Association, and other informationthe Commission requires. All rates shall be on an actuarially sound basis,giving due consideration to the stabilization reserve fund, and shall becalculated to be self-supporting. The Commission shall take all appropriatesteps to make available to the Association the loss and expense experience ofinsurers writing or having written the same line, subclassification or typeof commercial liability insurance in this Commonwealth.
E. All policies issued by the Association shall be subject to a nonprofitgroup retrospective premium adjustment to be approved by the Commission underwhich the final total premium for all policyholders for each line,subclassification or type of commercial liability insurance issued each yearby the Association, as a group, will be calculated based upon the experienceof all such policyholders. The experience of all such policyholders shall becalculated following the end of each year and shall be based upon earnedpremiums, administrative expenses, loss and loss adjustment expenses, andtaxes, plus a reasonable allowance for contingencies and servicing, for eachline, subclassification or type of commercial liability insurance.Policyholders shall be given full credit for all investment income, net ofexpenses and a reasonable management fee on policyholder supplied funds. Anyfinal premium resulting from a retrospective premium adjustment will becollected from those moneys in the stabilization reserve fund set forth in §38.2-2906 that are attributable to the policies written for the particularline, subclassification or type of commercial liability insurance or group ofsuch risks for which activation occurred pursuant to § 38.2-2901. The maximumpremium for all policyholders as a group shall be limited as provided in §38.2-2906.
F. 1. If the stabilization reserve fund account for one or more lines,subclassifications or types of commercial liability insurance is exhausted inthe payment of the maximum final premium for all such policies issued duringthe year for which a deficit exists, the Association shall certify to theCommission the estimated amount of any remaining deficit for any year'spolicies. Within sixty days after such certification, the Commission shallauthorize the Association to recover from the members their respective shareof such deficit. No member insurer may be assessed in any year an amountgreater than two percent of the member's direct gross premium income asdefined in § 58.1-2500 from liability insurance for the calendar yearpreceding the assessment. If an assessment in any year is not sufficient toeliminate such deficit, a like assessment may be made the ensuing year butnot thereafter.
2. A member shall be permitted to recover any assessment made by theAssociation under subdivision 1 of this subsection by deducting the member'sshare of the deficit from future premium taxes due the Commonwealth. Theamount of premium tax deduction for each member's share of the deficit shallbe apportioned by the Commission so that in the aggregate, the total premiumtax deduction permitted for all members in any one taxable year shall notexceed 0.05 of one percent of the direct gross premium income for theliability insurance written by member insurers defined in subsection A of §38.2-2901. To the extent that the said 0.05 of one percent is reached in anyone taxable year, any amount not so offset may be carried over to asubsequent year or years.
G. In the event that sufficient funds are not available for the soundfinancial operation of the Association, subject to recoupment as provided inthis chapter and the plan of operation, all members shall, on a temporarybasis, contribute to the financial requirements of the Association in themanner provided in this chapter. The contribution shall be reimbursed to themembers by the procedure set forth in subdivision 2 of subsection F of thissection.
H. The Commission shall examine the business of the Association as often asit deems appropriate to make certain that the group retrospective premiumadjustments are being calculated and applied in a manner consistent with thissection. If the Commission finds that the group retrospective premiumadjustments are not being made in a manner consistent with this section, itshall issue an order to the Association, specifying (i) how such calculationand application are not consistent and (ii) stating what corrective actionshall be taken.
§ 38.2-2905. Policy forms; applicants to be issued policies; cancellation ofpolicies; rates; group retrospective rating plan; examination of business ofAssociation.
A. All policies issued by the Association shall be subject to the groupretrospective premium adjustment and to the stabilization reserve fundrequired by § 38.2-2906. No policy form shall be used by the Associationunless it has been filed with the Commission and either (i) the Commissionhas approved it or (ii) thirty days have elapsed and the Commission has notdisapproved the form or endorsement for one or more of the reasons enumeratedin subsection A of § 38.2-317.
B. Policies shall be issued by the Association, after receipt of the premiumor portion of the premium prescribed by the plan of operation, to applicantsthat (i) meet the minimum underwriting standards of the Association, and (ii)have no unpaid or uncontested premium due as evidenced by the applicanthaving failed to make written objection to premium charges within thirty daysafter billing.
C. Any policy issued by the Association may be cancelled for any one of thefollowing reasons:
1. Nonpayment of premium or portion of the premium;
2. Suspension or revocation of the insured's license to conduct business;
3. Failure of the insured to meet the minimum underwriting standards;
4. Failure of the insured to meet other minimum standards prescribed by theplan of operation; or
5. Nonpayment of any stabilization reserve fund charge.
D. The rates, rating plans, rating rules, rating classifications, premiumpayment plans and territories applicable to the insurance written by theAssociation, and related supplementary rate information shall be subject tothe provisions of Chapter 20 (§ 38.2-2000 et seq.) of this title. Dueconsideration shall be given to the past and prospective loss and expenseexperience for the line, subclassification or type of commercial liabilityinsurance written in this Commonwealth, trends in the frequency and severityof losses, the investment income of the Association, and other informationthe Commission requires. All rates shall be on an actuarially sound basis,giving due consideration to the stabilization reserve fund, and shall becalculated to be self-supporting. The Commission shall take all appropriatesteps to make available to the Association the loss and expense experience ofinsurers writing or having written the same line, subclassification or typeof commercial liability insurance in this Commonwealth.
E. All policies issued by the Association shall be subject to a nonprofitgroup retrospective premium adjustment to be approved by the Commission underwhich the final total premium for all policyholders for each line,subclassification or type of commercial liability insurance issued each yearby the Association, as a group, will be calculated based upon the experienceof all such policyholders. The experience of all such policyholders shall becalculated following the end of each year and shall be based upon earnedpremiums, administrative expenses, loss and loss adjustment expenses, andtaxes, plus a reasonable allowance for contingencies and servicing, for eachline, subclassification or type of commercial liability insurance.Policyholders shall be given full credit for all investment income, net ofexpenses and a reasonable management fee on policyholder supplied funds. Anyfinal premium resulting from a retrospective premium adjustment will becollected from those moneys in the stabilization reserve fund set forth in §38.2-2906 that are attributable to the policies written for the particularline, subclassification or type of commercial liability insurance or group ofsuch risks for which activation occurred pursuant to § 38.2-2901. The maximumpremium for all policyholders as a group shall be limited as provided in §38.2-2906.
F. 1. If the stabilization reserve fund account for one or more lines,subclassifications or types of commercial liability insurance is exhausted inthe payment of the maximum final premium for all such policies issued duringthe year for which a deficit exists, the Association shall certify to theCommission the estimated amount of any remaining deficit for any year'spolicies. Within sixty days after such certification, the Commission shallauthorize the Association to recover from the members their respective shareof such deficit. No member insurer may be assessed in any year an amountgreater than two percent of the member's direct gross premium income asdefined in § 58.1-2500 from liability insurance for the calendar yearpreceding the assessment. If an assessment in any year is not sufficient toeliminate such deficit, a like assessment may be made the ensuing year butnot thereafter.
2. A member shall be permitted to recover any assessment made by theAssociation under subdivision 1 of this subsection by deducting the member'sshare of the deficit from future premium taxes due the Commonwealth. Theamount of premium tax deduction for each member's share of the deficit shallbe apportioned by the Commission so that in the aggregate, the total premiumtax deduction permitted for all members in any one taxable year shall notexceed 0.05 of one percent of the direct gross premium income for theliability insurance written by member insurers defined in subsection A of §38.2-2901. To the extent that the said 0.05 of one percent is reached in anyone taxable year, any amount not so offset may be carried over to asubsequent year or years.
G. In the event that sufficient funds are not available for the soundfinancial operation of the Association, subject to recoupment as provided inthis chapter and the plan of operation, all members shall, on a temporarybasis, contribute to the financial requirements of the Association in themanner provided in this chapter. The contribution shall be reimbursed to themembers by the procedure set forth in subdivision 2 of subsection F of thissection.
H. The Commission shall examine the business of the Association as often asit deems appropriate to make certain that the group retrospective premiumadjustments are being calculated and applied in a manner consistent with thissection. If the Commission finds that the group retrospective premiumadjustments are not being made in a manner consistent with this section, itshall issue an order to the Association, specifying (i) how such calculationand application are not consistent and (ii) stating what corrective actionshall be taken.
