§ 38.2-1708. Detection and prevention of insolvencies
A. To aid in the detection and prevention of insurer insolvencies, the Commission shall have the duty to:
1. Notify the insurance departments of all of the other states within thirty days of taking any of the following actions against a member insurer:
a. Revocation of license;
b. Suspension of license;
c. Making any formal order that requires the insurer to (i) restrict its premium writing, (ii) obtain additional contributions to surplus, (iii) withdraw from the Commonwealth, (iv) reinsure all or any part of its business, or (v) increase its capital, surplus, or any other account for the security of policyholders or creditors.
2. Report to the board of directors when (i) any actions set forth in subdivision 1 of this subsection have been taken or (ii) a report has been received from any other insurance department indicating that an action has been taken in another state. The report to the board of directors shall contain (i) all significant details of the action taken or (ii) the report from the other insurance department.
3. Report to the board of directors when it has reasonable cause to believe that an insurer may be insolvent or in a financial condition hazardous to the policyholders or the public. The report may be based on a member insurer's financial examination, whether completed or in progress.
B. The Commission may seek the advice and recommendations of the board of directors concerning any matter affecting its duties and responsibilities regarding the financial condition of member insurers and insurers seeking admission to transact the business of insurance in this Commonwealth.
C. The board of directors may, upon majority vote, make reports and recommendations to the Commission upon any matter germane to the solvency, liquidation, rehabilitation or conservation of any member insurer or to the solvency of any insurer seeking to transact the business of insurance in this Commonwealth. These reports and recommendations shall not be considered public documents.
D. The board of directors shall have the duty, upon majority vote, to notify the Commission of any information indicating that a member insurer may be insolvent or in a financial condition hazardous to the policyholders or the public.
E. The board of directors, upon majority vote, may request that the Commission order an examination of any member insurer that the board, in good faith, believes may be in a financial condition hazardous to the policyholders or the public. Within thirty days of the receipt of the request, the Commission shall begin the examination. The examination may be conducted as the National Association of Insurance Commissioners examination or may be conducted by persons the Commission designates. The cost of the examination shall be paid by the Association, and the examination report shall be treated like other examination reports. In no event shall the examination report be released to the board of directors prior to its release to the public, but this shall not preclude the Commission from complying with subsection A of this section. The Commission shall notify the board of directors when the examination is completed. The request for an examination shall be kept on file by the Commission but it shall not be open to public inspection prior to the release of the examination report to the public.
F. The board of directors may, upon majority vote, make recommendations to the Commission for the detection and prevention of insurer insolvencies.
G. The board of directors shall, at the conclusion of any insurer insolvency in which the Association was obligated to pay covered claims, prepare a report to the Commission containing all information it has in its possession relating to the history and causes of the insolvency.
H. The board shall cooperate with the board of directors of guaranty associations in other states in preparing a report on the history and causes for a member's insolvency, and may adopt by reference any report prepared by other associations.
(1976, c. 330, § 38.1-482.26; 1986, c. 562.)
Sections: Previous 38.2-1701 38.2-1702 38.2-1703 38.2-1704 38.2-1705 38.2-1706 38.2-1707 38.2-1708 38.2-1709 38.2-1710 38.2-1711 38.2-1712 38.2-1713 38.2-1714 38.2-1715 NextLast modified: April 3, 2009