Virginia Code 38.2-1447: Exception
A. This article shall not apply to those assets of any insurer that are held, deposited, pledged, hypothecated or otherwise encumbered as provided herein to secure, offset, protect, or meet those reserve liabilities of such insurer which are established, incurred, or required under the provisions of a reinsurance agreement whereby such insurer has reinsured the insurance policy liabilities of a ceding insurer, provided:
Terms Used In Virginia Code 38.2-1447
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Fiduciary: A trustee, executor, or administrator.
- Insurer: means a company licensed pursuant to Chapter 10 (§ 38. See Virginia Code 38.2-1401
- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Reserve liabilities: means those liabilities which are required to be established by an insurer for all of its outstanding insurance policies, annuity contracts, benefit contracts and subscription contracts, in accordance with this title, as amended or as hereafter amended. See Virginia Code 38.2-1401
- Trust account: A general term that covers all types of accounts in a trust department, such as estates, guardianships, and agencies. Source: OCC
- United States: includes the 50 states, the District of Columbia the Commonwealth of Puerto Rico, Guam, the Northern Mariana Islands and the United States Virgin Islands. See Virginia Code 1-255
1. The ceding insurer and the reinsurer are both licensed to transact business in this Commonwealth; and
2. Pursuant to a written agreement between the ceding insurer and the reinsurer, reserve assets substantially equal to the reserve liabilities required to be established by the ceding insurer on the reinsured business are either (i) deposited by or are withheld from the reinsurer and are in the custody of the ceding insurer as security for the payment of the reinsurer’s obligations under the reinsurance agreement, and such assets are held subject to withdrawal by and under control of the ceding insurer or (ii) are deposited and held in a trust account for such purpose and under such conditions with a qualified United States financial institution defined as eligible to act as a fiduciary of a trust by § 38.2-1316.1.
B. The Commission shall have the right to examine any such assets, reinsurance agreements, or deposit arrangements at any time in accordance with its authority to make examinations of insurers as conferred by other provisions of this title.
1992, c. 588.