CHAPTER 580

An Act to amend and reenact §§ $8.1-88, 38.1-89, $8.1-90, $8.1-91 as
amended, $8.1-98, 88.1-94, 88.1-95, 88.1-95.1, 38.1-97 and 88.1-97.1 of
the Code of Virginia, relating to paid in capital and surplus of domes-
tic and foreign stock and mutual insurance companies; certain
exceptions.

[H 115]

Approved April 5, 1966

Be it enacted by the General Assembly of Virginia:

1. That §§ 38.1-88, 38.1-89, 88.1-90, 38.1-91 as amended, 38.1-93, 38.1-94,
88.1-95, 88.1-95.1, 38.1-97 and 38.1-97.1 of the Code of Virginia be amended
and reenacted as follows:

§ 38.1-88. No insurance company organized in this State on the stock
plan shall be licensed to transact insurance in this State unless it has a
combined capital and surplus fully paid in of not less than * eight hun-
dred thousand dollars, of which not less than * three hundred thou-
sand dollars is surplus over and above all liabilities, nor until it has fur-
nished the Commission a statement under the seal of the company, verified
by its president or treasurer or two of its directors, showing the amount
of capital stock and surplus paid in, the amount of actual cash in its

ury, the amount invested in securities with a list of such securities
and their cash value, and containing such other information as the Com-
Mission requires. In its discretion the Commission may cause an examina-
tion of the company to be made to ascertain if it is entitled to such license.

$ 88.1-89. No foreign insurance company organized on the stock
combined capital and surplus fully paid in of not less than * eight hun-
dred thousand dollars, of which at least * three hundred thousand dollars
is surplus over and above all liabilities, nor until it has filed with the
Commission a certificate of the supervising insurance official of the state
in which it is incorporated that it is there authorized to transact, and
is actively engaged in transacting in that state, the kind of insurance it
proposes to transact in this State. -..

§ 88.1-90. Every domestic stock insurance company shall maintain
at all times a minimum unimpaired capital of at least * five hundred thou-
sand and a minimum surplus of at least * three hundred thousand dollars.
Whenever the Commission finds from a financial statement made by any
such company, or from a report of examination of any such company, that
its admitted assets are less than the aggregate amount of its liabilities and
its outstanding capital stock and its required minimum surplus, it shall
determine the amount of such impairment of capital and surplus and issue
an order in writing requiring the company to eliminate the impairment
within such period of not more than ninety days as it shall designate. The
Commission may by order entered of record and served upon the company
prohibit the company from issuing any new policies while such impair-
ment exists. If at the expiration of the designated period the company has
not satisfied the Commission that the impairment has been eliminated, an
order for the rehabilitation or liquidation of the company may be entered
as provided in Chapter 3 of this title.

-— § 88.1-91. No domestic mutual insurance company shall be licensed
to transact insurance in this State unless it has a surplus over and above
all liabilities of not less than * eight hundred thousand dollars, nor until it
has furnished the Commission a statement under the seal of the company,
verified by the president or treasurer or two of its directors, showing the
amount of surplus paid in, the amount of actual cash in its treasury, the
amount invested in securities with a list of such securities and their cash
value, and containing such other information as the Commission requires.
In its discretion the Commission may cause an examination of the company
to be made to ascertain if it is entitled to such license.

The provisions of this section and § 38.1-93 requiring domestic mutual
companies to have and maintain a minimum surplus shall not apply to
mutual assessment fire insurance companies.

§ 38.1-93. Every domestic mutual insurance company shall maintain
at all times a minimum unimpaired surplus of not less than * eight hundred
thousand dollars. Whenever the Commission finds from a financial state-
ment made by any such company, or from a report of examination of any
such company, that its total admitted assets are less than the aggregate
amount of its liabilities and the amount of its minimum surplus required
herein, it shall determine the amount of such impairment of surplus and
issue an order in writing requiring the company to eliminate the impair-
ment within such period of not more than ninety days as it shall designate.
The Commission may by order entered of record and served upon the com-
pany prohibit the company from issuing any new policies while such
impairment exists. The company may make an assessment upon its mem-
bers liable to assessment for an amount which will provide funds to make
good all or any part of such impairment; but no member shall be liable
for an assessment exceeding the limit specified in his policy, and no assess-
ment shall be made upon any member under a nonassessable policy. Every
such assessment shall be made upon each member liable to assessment in
proportion to his liability as expressed in his policy. With the consent of
the Commission first obtained the deficiency may be made up from
advances or borrowed funds obtained in the same manner and subject to
the same restrictions as to repayment as is provided in § 88.1-92 for
obtaining funds for the initial surplus of domestic mutual companies.

Su.
If at the expiration of the designated period the company has not
satisfied the Commission that the impairment has been eliminated, an order
for the rehabilitation or liquidation of the company may be entered as
provided in Chapter 3 of this title. ;

§ 88.1-94. No foreign mutual insurance company shall be licensed

to transact insurance in this State unless it has a surplus over and above
all liabilities of not less than * eight hundred thousand dollars, nor until
it has filed with the Commission a certificate of the supervising insurance
official of the state in which it is organized that it is there authorized to
! t, and is actively engaged in transacting in that state, the kind of
Insurance it proposes to transact in this State.
_ § 38.1-95. No alien stock or mutual insurance company shall be
licensed to transact insurance in this State unless it has a “trusteed sur-
plus”, as hereinafter defined, of not less than * eight hundred thousand
dollars, nor until it has filed with the Commission a certificate of the
supervising insurance official of the state through which such company
entered the United States that it is there authorized to transact, and is
actively engaged in transacting in that state, the kind of insurance it
proposes to transact in this State.

“Trusteed surplus” of an alien company is defined as the excess of
the aggregate value of (a) assets deposited with officers of any state
or states in trust for the security of all of its policyholders, or policy-
holders or creditors within the United States, and (b) assets within the
United States held by a trustee or trustees for the security of all of its
policyholders, or policyholders and creditors within the United States,
over the aggregate net amount of all of its liabilities and reserves in the
United States as determined in accordance with the provisions of this title.

§ 38.1-95.1. No mutual insurance company other than a life com-
pany shall if it be a domestic or foreign company issue policies without
contingent liability unless it has a surplus over all liabilities of not less
than * eight hundred thousand dollars, nor if it be an alien company unless
it has a trusteed surplus of not less than * eight hundred thousand dollars.
Any such mutual company which has issued policies without contingent
liability after the acquisition of such surplus may continue to do so as
long as it maintains such surplus, but no such company shall issue such
policies except during the time such surplus is maintained.

Any such mutual insurance company which on the day preceding *
July one, nineteen hundred sixty-six, was authorized to issue and was en-
gaged in issuing policies without contingent liability may continue to do
so if it shall maintain at all times the minimum surplus if a domestic or
foreign company, and the minimum trusteed surplus if an alien company,
required of such company for such purpose immediately prior to * July
one, nineteen hundred sixty-siz. , .

§ 38.1-97. Notwithstanding other provisions of this chapter with
respect to minimum required capital and surplus, any insurance company
which, on the day immediately preceding * July one, nineteen hundred
sizty-siz, was licensed to transact and was engaged in transacting any
kind of insurance in this State, may continue to transact such kind of
insurance under a proper license from the Commission if it shall main-
tain at all times the minimum capital and surplus, if any, if a stock com-
pany, the minimum surplus if a mutual company, and the minimum
trusteed surplus if an alien company, required of such company imme-
diately prior to * July one, nineteen hundred sixty-six.

Before any such company may obtain a license to transact in this
State any kind of insurance which it was not transacting and licensed
to transact in this State immediately prior to * July one, nineteen hundred
sizty-siz, it shall comply with and fully meet all the requirements of this
article as to capital and surplus; this provision shall not apply to any
company incorporated and licensed to do an tnsurance business tn the
State of Virginia prior to the year 1952.
2. This act shall become effective January 1, 1967.