Any domestic mutual insurer or mutual assessment property and casualty insurer may, without pledging any of its assets, provide a guaranty fund sufficient to defray the expenses of its organization and its initial minimum surplus required to obtain a license to do the business of insurance. The fund may be increased with the prior approval of the Commission by receiving advances or by borrowing funds upon an agreement that the funds, including interest at a rate not exceeding the one-year treasury bill interest rate plus three percentage points at the time the loan is made or renewed, shall be repaid only if the insurer has sufficient earned surplus. The agreement shall provide that the insurer may repay the advances or loans or any part of them whenever it is able to do so in accordance with the requirements of this article. No commission or brokerage shall be paid in acquiring the funds. No repayments of principal, either in whole or in part, and no payments of interest, shall be made without the prior written approval of the Commission. Neither the principal advanced or borrowed nor any interest accrued thereon under this provision shall form a part of the legal liabilities of the insurer until the Commission approves the repayment of such principal or the payment of interest thereon. However, all statements published or filed by the insurer shall show accrued interest and the amount of principal remaining unpaid. All claims under the instrument shall be subordinated to policyholder, claimant and beneficiary claims as well as debts owed to all other classes of creditors.
Code 1950, § 38-512; 1952, c. 317, § 38.1-92; 1960, c. 291, § 38.1-92.1; 1970, c. 595; 1980, c. 187; 1986, c. 562; 1994, c. 503.
Structure Code of Virginia
Chapter 10 - Organization, Admission and Licensing of Insurers
§ 38.2-1000. Incorporation of domestic stock insurers
§ 38.2-1001. Incorporation of domestic mutual insurers
§ 38.2-1002. Additional requirements of articles of incorporation; name
§ 38.2-1003. When corporate status attained; bylaws filed with Commission
§ 38.2-1005.1. Conversion of a domestic mutual insurer to a domestic stock insurer
§ 38.2-1005.1:2. Formation of mutual holding company and conversion of mutual company
§ 38.2-1005.1:3. Mutual holding company membership interest
§ 38.2-1005.1:4. Contents of plan of MHC conversion
§ 38.2-1005.1:5. Adoption and approval of plan of MHC conversion
§ 38.2-1005.1:6. Corporate existence
§ 38.2-1005.1:7. Regulation and authority of a mutual holding company
§ 38.2-1005.1:8. Diversion of business to affiliates
§ 38.2-1005.1:9. Conversion of mutual holding company
§ 38.2-1005.1:10. Conflicts of interest
§ 38.2-1005.1:11. Costs and expenses
§ 38.2-1005.1:12. Failure to give notice
§ 38.2-1005.1:13. Limitation on actions
§ 38.2-1006. Conversion of a domestic stock insurer to a mutual insurer
§ 38.2-1007. Notice to policyholders of meeting to approve conversion
§ 38.2-1008. Conduct of and voting at meeting
§ 38.2-1009. Payment for shares pursuant to conversion plan
§ 38.2-1010. How acquired shares held
§ 38.2-1011. Disposition of dividends after payments provided in conversion plan
§ 38.2-1012. Jurisdiction to compel completion of mutualization
§ 38.2-1013. Venue of proceedings
§ 38.2-1014. Parties and process
§ 38.2-1016.1. Conversion of a health maintenance organization to an accident and sickness insurer
§ 38.2-1017. Applicability of Title 13.1
§ 38.2-1018. Plan of merger to be approved by Commission
§ 38.2-1019. Change of status from foreign to domestic insurer
§ 38.2-1020. Transfer of domicile from Virginia to another state
§ 38.2-1021. Change of domicile of foreign insurer to another foreign state
§ 38.2-1022. Commission to be notified of proposed transfer of domicile
§ 38.2-1025. Annual renewal of license
§ 38.2-1026. Retaliatory provisions as to taxes, fees, deposits and other requirements
§ 38.2-1027. Admission of foreign and alien insurers
§ 38.2-1028. Additional licensing requirements for stock insurers
§ 38.2-1029. Additional licensing requirements for mutual insurers
§ 38.2-1030. Surplus requirements for issuing policies without contingent liability
§ 38.2-1031. Additional requirements, alien insurers
§ 38.2-1032. Additional licensing requirements for domestic insurers
§ 38.2-1033. Additional licensing requirements for foreign insurers
§ 38.2-1034. How domestic mutual insurers may acquire initial surplus
§ 38.2-1037. Exceptions for licensed and operating insurers
§ 38.2-1039.1. Risk retention groups
§ 38.2-1040. Refusal, suspension or revocation of license
§ 38.2-1041. Notice to company of proposed suspension or revocation
§ 38.2-1042. Agent's authority likewise suspended or revoked
§ 38.2-1043. Suspension or revocation published
§ 38.2-1044. New business prohibited
§ 38.2-1045. Deposits required of insurers generally
§ 38.2-1046. Purpose of deposits; enforcement of lien
§ 38.2-1047. How deposits applied to payment of claims; deficit to be made good
§ 38.2-1048. Return of deposits
§ 38.2-1049. Alternate deposit requirements
§ 38.2-1050. Voluntary deposit in excess of amount required
§ 38.2-1052. Exchange of securities
§ 38.2-1053. Interest on deposits; to whom paid
§ 38.2-1054. Duty of State Treasurer when securities deposited are paid
§ 38.2-1055. Annual report of State Treasurer to Commission
§ 38.2-1057. Assessment for expense of holding deposits; Insurance Collateral Assessment Fund
§ 38.2-1058. Felony for State Treasurer to dispose of securities illegally