§ 38.2-4811. Surplus lines coverage to be placed only with unlicensedinsurers approved by Commission.
A. No surplus lines broker shall procure a policy of insurance with anyinsurer not licensed to transact insurance business in this Commonwealth,unless such unlicensed insurer has prior approval of the Commission to issuesurplus lines insurance.
B. Any unlicensed insurer wishing to be approved by the Commission to issuesurplus lines coverage may receive such approval upon providing:
1. Satisfactory evidence of good repute and financial integrity; and
2. Proof that it qualifies under a, b or c of this subdivision:
a. The unlicensed insurer has capital and surplus or its equivalent under thelaws of its domiciliary jurisdiction, which equal the greater of (i) theminimum capital and surplus requirements under §§ 38.2-1028, 38.2-1029,38.2-1030 or § 38.2-1031, or (ii) $15 million.
(1) The capital and surplus requirements of this subdivision 2 a may besatisfied by an unlicensed insurer possessing less than the aforementionedcapital and surplus upon an affirmative finding of acceptability by theCommission. The finding shall be based upon such factors as quality ofmanagement, capital and surplus of any parent company, company underwritingprofit and investment income trends, market availability, and company recordand reputation within the industry. In no event shall the Commission make anaffirmative finding of acceptability when the surplus lines insurer's capitaland surplus is less than $4.5 million.
(2) An unlicensed alien insurer also shall provide evidence that it maintainsin the United States an irrevocable trust fund in a qualified U.S. financialinstitution on behalf of U.S. policyholders. This trust fund at all timesshall be valued at not less than $2.5 million and shall consist of cash,securities, letters of credit, or investments of substantially the samecharacter and quality as those that are eligible investments for the capitaland statutory reserves of admitted insurers authorized to write like classesof insurance in this Commonwealth. Such trust fund, which shall be includedin any calculation of capital and surplus or its equivalent, shall have anexpiration date which at no time shall be less than five years; and
b. In the case of any Lloyd's or other similar group, including incorporatedand individual unincorporated underwriters, the incorporated members of whichshall not be engaged in any business other than underwriting as a member ofthe group and shall be subject to the same level of solvency regulation andcontrol by the group's domiciliary regulator as are the unincorporatedmembers, the Lloyd's or other similar group maintains a trust fund of notless than $50 million as security to the full amount thereof for allpolicyholders and creditors in the United States of each member of the group,and such trust shall likewise comply with the terms and conditionsestablished in subdivision 2 a (2) for alien insurers; and
c. In the case of an "insurance exchange" created by the laws of individualstates, the insurance exchange maintains capital and surplus, or thesubstantial equivalent of capital and surplus, of not less than $50 millionin the aggregate. For insurance exchanges that maintain funds for theprotection of all insurance exchange policyholders, each individual syndicateshall maintain minimum capital and surplus, or the substantial equivalent ofcapital and surplus, of not less than $3 million. If the insurance exchangedoes not maintain funds for the protection of all insurance exchangepolicyholders, each individual syndicate shall meet the minimum capital andsurplus requirements of subdivision 2 a.
C. Any such unlicensed insurer shall cause to be provided to the Commission,not later than March 1 or the later date established by the insurer's stateof domicile or entry, a copy of its current annual statement certified by theinsurer. Such later date established by the insurer's state of domicile orentry shall not be later than August 31. The report shall be:
1. Filed with and approved by the regulatory authority in the domicile of thenonadmitted insurer; or
2. Certified by an accounting or auditing firm licensed in the jurisdictionof the insurer's domicile.
In the case of an insurance exchange, such report may be an aggregatecombined statement of all underwriting syndicates operating during the periodreported upon.
The Commission, at its discretion, may extend the period for filing an annualstatement by a maximum of two months.
D. If at any time the Commission has reason to believe that an eligiblesurplus lines insurer (i) is in unsound financial condition, (ii) is nolonger eligible under subdivision B 2, (iii) has willfully violated the lawsof this Commonwealth, or (iv) does not make reasonably prompt payment of justlosses and claims in this Commonwealth or elsewhere, the Commission maydeclare it ineligible. The Commission shall promptly mail notice of all suchdeclarations to each surplus lines licensee.
(Code 1950, § 38.1-314.11; 1960, c. 503; 1979, c. 513, § 38.1-327.56; 1984,c. 719; 1986, c. 562; 1994, c. 647; 1995, c. 60; 2007, c. 157.)
§ 38.2-4811. Surplus lines coverage to be placed only with unlicensedinsurers approved by Commission.
A. No surplus lines broker shall procure a policy of insurance with anyinsurer not licensed to transact insurance business in this Commonwealth,unless such unlicensed insurer has prior approval of the Commission to issuesurplus lines insurance.
B. Any unlicensed insurer wishing to be approved by the Commission to issuesurplus lines coverage may receive such approval upon providing:
1. Satisfactory evidence of good repute and financial integrity; and
2. Proof that it qualifies under a, b or c of this subdivision:
a. The unlicensed insurer has capital and surplus or its equivalent under thelaws of its domiciliary jurisdiction, which equal the greater of (i) theminimum capital and surplus requirements under §§ 38.2-1028, 38.2-1029,38.2-1030 or § 38.2-1031, or (ii) $15 million.
(1) The capital and surplus requirements of this subdivision 2 a may besatisfied by an unlicensed insurer possessing less than the aforementionedcapital and surplus upon an affirmative finding of acceptability by theCommission. The finding shall be based upon such factors as quality ofmanagement, capital and surplus of any parent company, company underwritingprofit and investment income trends, market availability, and company recordand reputation within the industry. In no event shall the Commission make anaffirmative finding of acceptability when the surplus lines insurer's capitaland surplus is less than $4.5 million.
(2) An unlicensed alien insurer also shall provide evidence that it maintainsin the United States an irrevocable trust fund in a qualified U.S. financialinstitution on behalf of U.S. policyholders. This trust fund at all timesshall be valued at not less than $2.5 million and shall consist of cash,securities, letters of credit, or investments of substantially the samecharacter and quality as those that are eligible investments for the capitaland statutory reserves of admitted insurers authorized to write like classesof insurance in this Commonwealth. Such trust fund, which shall be includedin any calculation of capital and surplus or its equivalent, shall have anexpiration date which at no time shall be less than five years; and
b. In the case of any Lloyd's or other similar group, including incorporatedand individual unincorporated underwriters, the incorporated members of whichshall not be engaged in any business other than underwriting as a member ofthe group and shall be subject to the same level of solvency regulation andcontrol by the group's domiciliary regulator as are the unincorporatedmembers, the Lloyd's or other similar group maintains a trust fund of notless than $50 million as security to the full amount thereof for allpolicyholders and creditors in the United States of each member of the group,and such trust shall likewise comply with the terms and conditionsestablished in subdivision 2 a (2) for alien insurers; and
c. In the case of an "insurance exchange" created by the laws of individualstates, the insurance exchange maintains capital and surplus, or thesubstantial equivalent of capital and surplus, of not less than $50 millionin the aggregate. For insurance exchanges that maintain funds for theprotection of all insurance exchange policyholders, each individual syndicateshall maintain minimum capital and surplus, or the substantial equivalent ofcapital and surplus, of not less than $3 million. If the insurance exchangedoes not maintain funds for the protection of all insurance exchangepolicyholders, each individual syndicate shall meet the minimum capital andsurplus requirements of subdivision 2 a.
C. Any such unlicensed insurer shall cause to be provided to the Commission,not later than March 1 or the later date established by the insurer's stateof domicile or entry, a copy of its current annual statement certified by theinsurer. Such later date established by the insurer's state of domicile orentry shall not be later than August 31. The report shall be:
1. Filed with and approved by the regulatory authority in the domicile of thenonadmitted insurer; or
2. Certified by an accounting or auditing firm licensed in the jurisdictionof the insurer's domicile.
In the case of an insurance exchange, such report may be an aggregatecombined statement of all underwriting syndicates operating during the periodreported upon.
The Commission, at its discretion, may extend the period for filing an annualstatement by a maximum of two months.
D. If at any time the Commission has reason to believe that an eligiblesurplus lines insurer (i) is in unsound financial condition, (ii) is nolonger eligible under subdivision B 2, (iii) has willfully violated the lawsof this Commonwealth, or (iv) does not make reasonably prompt payment of justlosses and claims in this Commonwealth or elsewhere, the Commission maydeclare it ineligible. The Commission shall promptly mail notice of all suchdeclarations to each surplus lines licensee.
(Code 1950, § 38.1-314.11; 1960, c. 503; 1979, c. 513, § 38.1-327.56; 1984,c. 719; 1986, c. 562; 1994, c. 647; 1995, c. 60; 2007, c. 157.)
§ 38.2-4811. Surplus lines coverage to be placed only with unlicensedinsurers approved by Commission.
A. No surplus lines broker shall procure a policy of insurance with anyinsurer not licensed to transact insurance business in this Commonwealth,unless such unlicensed insurer has prior approval of the Commission to issuesurplus lines insurance.
B. Any unlicensed insurer wishing to be approved by the Commission to issuesurplus lines coverage may receive such approval upon providing:
1. Satisfactory evidence of good repute and financial integrity; and
2. Proof that it qualifies under a, b or c of this subdivision:
a. The unlicensed insurer has capital and surplus or its equivalent under thelaws of its domiciliary jurisdiction, which equal the greater of (i) theminimum capital and surplus requirements under §§ 38.2-1028, 38.2-1029,38.2-1030 or § 38.2-1031, or (ii) $15 million.
(1) The capital and surplus requirements of this subdivision 2 a may besatisfied by an unlicensed insurer possessing less than the aforementionedcapital and surplus upon an affirmative finding of acceptability by theCommission. The finding shall be based upon such factors as quality ofmanagement, capital and surplus of any parent company, company underwritingprofit and investment income trends, market availability, and company recordand reputation within the industry. In no event shall the Commission make anaffirmative finding of acceptability when the surplus lines insurer's capitaland surplus is less than $4.5 million.
(2) An unlicensed alien insurer also shall provide evidence that it maintainsin the United States an irrevocable trust fund in a qualified U.S. financialinstitution on behalf of U.S. policyholders. This trust fund at all timesshall be valued at not less than $2.5 million and shall consist of cash,securities, letters of credit, or investments of substantially the samecharacter and quality as those that are eligible investments for the capitaland statutory reserves of admitted insurers authorized to write like classesof insurance in this Commonwealth. Such trust fund, which shall be includedin any calculation of capital and surplus or its equivalent, shall have anexpiration date which at no time shall be less than five years; and
b. In the case of any Lloyd's or other similar group, including incorporatedand individual unincorporated underwriters, the incorporated members of whichshall not be engaged in any business other than underwriting as a member ofthe group and shall be subject to the same level of solvency regulation andcontrol by the group's domiciliary regulator as are the unincorporatedmembers, the Lloyd's or other similar group maintains a trust fund of notless than $50 million as security to the full amount thereof for allpolicyholders and creditors in the United States of each member of the group,and such trust shall likewise comply with the terms and conditionsestablished in subdivision 2 a (2) for alien insurers; and
c. In the case of an "insurance exchange" created by the laws of individualstates, the insurance exchange maintains capital and surplus, or thesubstantial equivalent of capital and surplus, of not less than $50 millionin the aggregate. For insurance exchanges that maintain funds for theprotection of all insurance exchange policyholders, each individual syndicateshall maintain minimum capital and surplus, or the substantial equivalent ofcapital and surplus, of not less than $3 million. If the insurance exchangedoes not maintain funds for the protection of all insurance exchangepolicyholders, each individual syndicate shall meet the minimum capital andsurplus requirements of subdivision 2 a.
C. Any such unlicensed insurer shall cause to be provided to the Commission,not later than March 1 or the later date established by the insurer's stateof domicile or entry, a copy of its current annual statement certified by theinsurer. Such later date established by the insurer's state of domicile orentry shall not be later than August 31. The report shall be:
1. Filed with and approved by the regulatory authority in the domicile of thenonadmitted insurer; or
2. Certified by an accounting or auditing firm licensed in the jurisdictionof the insurer's domicile.
In the case of an insurance exchange, such report may be an aggregatecombined statement of all underwriting syndicates operating during the periodreported upon.
The Commission, at its discretion, may extend the period for filing an annualstatement by a maximum of two months.
D. If at any time the Commission has reason to believe that an eligiblesurplus lines insurer (i) is in unsound financial condition, (ii) is nolonger eligible under subdivision B 2, (iii) has willfully violated the lawsof this Commonwealth, or (iv) does not make reasonably prompt payment of justlosses and claims in this Commonwealth or elsewhere, the Commission maydeclare it ineligible. The Commission shall promptly mail notice of all suchdeclarations to each surplus lines licensee.
(Code 1950, § 38.1-314.11; 1960, c. 503; 1979, c. 513, § 38.1-327.56; 1984,c. 719; 1986, c. 562; 1994, c. 647; 1995, c. 60; 2007, c. 157.)
