A. Transactions by nonstock corporations licensed under this chapter with their affiliates shall be subject to the following standards:
1. The terms shall be fair and reasonable;
2. Charges and fees for service performed shall be reasonable;
3. Expenses incurred and payments received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied;
4. The books, accounts, and records of each party shall disclose clearly and accurately the precise nature and details of the transactions;
5. The nonstock corporation's surplus following any transaction with affiliates involving more than one-sixth of one percent of admitted assets or one percent of surplus as of the immediately preceding December 31, whichever is less, shall be reasonable in relation to the nonstock corporation's outstanding liabilities and adequate to its financial needs; and
6. The transaction is in the best interest of the subscribers.
B. For purposes of this article, in determining whether a nonstock corporation's surplus is reasonable in relation to the nonstock corporation's outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered:
1. The size of the nonstock corporation as measured by its assets, surplus, reserves, business in force, and other appropriate criteria;
2. The nonstock corporation's method of operation and manner of doing business;
3. The nature and extent of the nonstock corporation's risk-sharing arrangements;
4. The quality, diversification, and liquidity of the nonstock corporation's investment portfolio;
5. The recent past and projected future trend in the size of the nonstock corporation's surplus;
6. The adequacy of the nonstock corporation's reserves; and
7. The quality and liquidity of investments in subsidiaries. The Commission in its judgment may classify any investment as a nonadmitted asset for the purpose of determining the adequacy of surplus.
1989, c. 606; 1992, c. 588.
Structure Code of Virginia
Chapter 42 - Health Services Plans
§ 38.2-4200. Applicability of chapter
§ 38.2-4202. Hospital services plans
§ 38.2-4203. Medical or surgical services plans
§ 38.2-4204. Merger of nonstock corporations
§ 38.2-4205. Dental and optometric services
§ 38.2-4206. Nonstock corporation required
§ 38.2-4207. Existing foreign nonstock corporation
§ 38.2-4208. Nonstock corporation not required to act as agent
§ 38.2-4209. Preferred provider subscription contracts
§ 38.2-4209.1. Pharmacies; freedom of choice
§ 38.2-4210. Liability of participants
§ 38.2-4211. Change of participants
§ 38.2-4212. Board of directors of nonstock corporation operating plan
§ 38.2-4213. Liability of participating providers upon merger of nonstock corporation
§ 38.2-4214. (Contingent expiration date - see notes) Application of certain provisions of law
§ 38.2-4214. (Contingent effective date - see notes) Application of certain provisions of law
§ 38.2-4214.1. Rehabilitation, liquidation, conservation
§ 38.2-4215. Payments by nonstock corporation
§ 38.2-4218. Subscriber to have free choice of medical practitioners available
§ 38.2-4219. Subscriber to be advised in writing as to benefits and limitations thereon
§ 38.2-4220. Interplan arrangements
§ 38.2-4221. Services of certain practitioners other than physicians to be covered
§ 38.2-4222. Licensing of nonstock corporations
§ 38.2-4223. Renewal of license
§ 38.2-4224. Licensing of agents
§ 38.2-4227. Misleading applications or contracts
§ 38.2-4228. Controversies involving subscription contracts
§ 38.2-4229.1. Conversion to domestic mutual insurer
§ 38.2-4229.2. Hearings and investigations on effect of other state's law
§ 38.2-4231. Registration of nonstock corporations that are members of holding company system
§ 38.2-4233. Commission approval required for certain transactions
§ 38.2-4235. Confidential treatment of information and documents