A. When an Association is activated under this chapter, a stabilizationreserve fund shall be created for the lines, subclassifications and types ofcommercial liability insurance for which such activation occurred. The fundshall be administered by five directors appointed by the Commission, one ofwhom shall be a representative of the Commission, two of whom shall berepresentatives of the Association, and two of whom shall be representativesof the Association's policyholders.
B. The directors of the fund shall act by majority vote of those present withthree directors constituting a quorum for the transaction of any business orthe exercise of any power of the fund. The directors shall serve withoutsalary, but each director shall be reimbursed for actual and necessaryexpenses incurred in the performance of his or her official duties as adirector of the fund. The directors shall not be subject to any personalliability with respect to the administration of the fund.
C. Each policyholder shall pay to the Association a stabilization reservefund charge equal to one-third of the annual premium due for commercialliability insurance obtained through the Association. The means of paymentshall be set forth in the plan of operation and shall be separately stated inthe policy. The Association shall cancel the policy of any policyholder whofails to pay the stabilization reserve fund charge. Upon the termination ofany policy during the term of the policy, payments made to the stabilizationreserve fund shall be returned to the policyholder on a pro rata basisidentical to that applied in computing that portion of the premium which isreturned to the policyholder.
D. All moneys received by the fund shall be held in a separate restrictedcash account or accounts under the sole control of an independent fundmanager to be selected by the directors of the fund. The fund manager shallaccount separately for the moneys paid to the fund for each year's policieswritten for a given line, subclassification or type of commercial liabilityinsurance. The fund manager may invest the moneys held, subject to theapproval of the directors. All investment income shall be credited to thefund. All expenses of administration of the fund shall be charged against thefund. The moneys held shall be used solely for the following purposes: (i) toreimburse the Association for any and all expenses, taxes, licenses and feespaid by the Association which are properly chargeable or allocable to thestabilization reserve fund, and (ii) to pay any retrospective premiumadjustment charge levied by the Association. Payment of retrospective premiumadjustment charges and other authorized payments shall be made by thedirectors of the fund upon certification to them by the Association of theamount due. If all moneys accruing to the fund for a particular year'spolicies for a given line, subclassification or type of commercial liabilityinsurance are exhausted in payment of retrospective premium adjustmentcharges for the particular year, all liability and obligations of the holdersof said policies with respect to the payment of retrospective premiumadjustment charges shall terminate and shall be conclusively presumed to havebeen discharged.
E. The Association shall promptly pay the fund manager all stabilizationreserve fund charges that it collects from its policyholders under subsectionC of this section.
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 §38.2-2904.
A. When an Association is activated under this chapter, a stabilizationreserve fund shall be created for the lines, subclassifications and types ofcommercial liability insurance for which such activation occurred. The fundshall be administered by five directors appointed by the Commission, one ofwhom shall be a representative of the Commission, two of whom shall berepresentatives of the Association, and two of whom shall be representativesof the Association's policyholders.
B. The directors of the fund shall act by majority vote of those present withthree directors constituting a quorum for the transaction of any business orthe exercise of any power of the fund. The directors shall serve withoutsalary, but each director shall be reimbursed for actual and necessaryexpenses incurred in the performance of his or her official duties as adirector of the fund. The directors shall not be subject to any personalliability with respect to the administration of the fund.
C. Each policyholder shall pay to the Association a stabilization reservefund charge equal to one-third of the annual premium due for commercialliability insurance obtained through the Association. The means of paymentshall be set forth in the plan of operation and shall be separately stated inthe policy. The Association shall cancel the policy of any policyholder whofails to pay the stabilization reserve fund charge. Upon the termination ofany policy during the term of the policy, payments made to the stabilizationreserve fund shall be returned to the policyholder on a pro rata basisidentical to that applied in computing that portion of the premium which isreturned to the policyholder.
D. All moneys received by the fund shall be held in a separate restrictedcash account or accounts under the sole control of an independent fundmanager to be selected by the directors of the fund. The fund manager shallaccount separately for the moneys paid to the fund for each year's policieswritten for a given line, subclassification or type of commercial liabilityinsurance. The fund manager may invest the moneys held, subject to theapproval of the directors. All investment income shall be credited to thefund. All expenses of administration of the fund shall be charged against thefund. The moneys held shall be used solely for the following purposes: (i) toreimburse the Association for any and all expenses, taxes, licenses and feespaid by the Association which are properly chargeable or allocable to thestabilization reserve fund, and (ii) to pay any retrospective premiumadjustment charge levied by the Association. Payment of retrospective premiumadjustment charges and other authorized payments shall be made by thedirectors of the fund upon certification to them by the Association of theamount due. If all moneys accruing to the fund for a particular year'spolicies for a given line, subclassification or type of commercial liabilityinsurance are exhausted in payment of retrospective premium adjustmentcharges for the particular year, all liability and obligations of the holdersof said policies with respect to the payment of retrospective premiumadjustment charges shall terminate and shall be conclusively presumed to havebeen discharged.
E. The Association shall promptly pay the fund manager all stabilizationreserve fund charges that it collects from its policyholders under subsectionC of this section.
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 §38.2-2904.
A. When an Association is activated under this chapter, a stabilizationreserve fund shall be created for the lines, subclassifications and types ofcommercial liability insurance for which such activation occurred. The fundshall be administered by five directors appointed by the Commission, one ofwhom shall be a representative of the Commission, two of whom shall berepresentatives of the Association, and two of whom shall be representativesof the Association's policyholders.
B. The directors of the fund shall act by majority vote of those present withthree directors constituting a quorum for the transaction of any business orthe exercise of any power of the fund. The directors shall serve withoutsalary, but each director shall be reimbursed for actual and necessaryexpenses incurred in the performance of his or her official duties as adirector of the fund. The directors shall not be subject to any personalliability with respect to the administration of the fund.
C. Each policyholder shall pay to the Association a stabilization reservefund charge equal to one-third of the annual premium due for commercialliability insurance obtained through the Association. The means of paymentshall be set forth in the plan of operation and shall be separately stated inthe policy. The Association shall cancel the policy of any policyholder whofails to pay the stabilization reserve fund charge. Upon the termination ofany policy during the term of the policy, payments made to the stabilizationreserve fund shall be returned to the policyholder on a pro rata basisidentical to that applied in computing that portion of the premium which isreturned to the policyholder.
D. All moneys received by the fund shall be held in a separate restrictedcash account or accounts under the sole control of an independent fundmanager to be selected by the directors of the fund. The fund manager shallaccount separately for the moneys paid to the fund for each year's policieswritten for a given line, subclassification or type of commercial liabilityinsurance. The fund manager may invest the moneys held, subject to theapproval of the directors. All investment income shall be credited to thefund. All expenses of administration of the fund shall be charged against thefund. The moneys held shall be used solely for the following purposes: (i) toreimburse the Association for any and all expenses, taxes, licenses and feespaid by the Association which are properly chargeable or allocable to thestabilization reserve fund, and (ii) to pay any retrospective premiumadjustment charge levied by the Association. Payment of retrospective premiumadjustment charges and other authorized payments shall be made by thedirectors of the fund upon certification to them by the Association of theamount due. If all moneys accruing to the fund for a particular year'spolicies for a given line, subclassification or type of commercial liabilityinsurance are exhausted in payment of retrospective premium adjustmentcharges for the particular year, all liability and obligations of the holdersof said policies with respect to the payment of retrospective premiumadjustment charges shall terminate and shall be conclusively presumed to havebeen discharged.
E. The Association shall promptly pay the fund manager all stabilizationreserve fund charges that it collects from its policyholders under subsectionC of this section.
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 §38.2-2904.
