Virginia Code 38.2-2708: Creation and plan of operation of joint underwriting association
A. After providing notice and opportunity to be heard and upon promulgation of an order by the Commission pursuant to § 38.2-2707, a joint underwriting association shall be created consisting of all insurers licensed to write basic property insurance or other insurance that contains a basic property insurance component in this Commonwealth, but excluding insurers exempted from rate regulation by subsection C of § 38.2-1902. Each insurer that is required to be a member of the joint underwriting association shall remain a member as a condition of its license to write basic property insurance and other insurance that contains a basic property insurance component in this Commonwealth.
Terms Used In Virginia Code 38.2-2708
- Amendment: A proposal to alter the text of a pending bill or other measure by striking out some of it, by inserting new language, or both. Before an amendment becomes part of the measure, thelegislature must agree to it.
- Basic property insurance: means insurance against direct loss to any property caused by perils defined and limited in the standard fire policy prescribed in §§ 38. See Virginia Code 38.2-2701
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Insurer: means an insurance company. See Virginia Code 38.2-100
- Qualified property: means all real property and all tangible personal property at a fixed location in this Commonwealth, whether or not the property is subject to exposure from an external hazard located on property that is neither owned nor controlled by the prospective insured, and whether or not the property is subject to exposure from riot hazard, where the property:
1. See Virginia Code 38.2-2701
B. The joint underwriting association shall, pursuant to this chapter and the plan of operation, have the power to (i) cause its members to issue policies of basic property insurance on qualified property to applicants; (ii) assume reinsurance on qualified property from members; and (iii) cede reinsurance.
C. 1. Within ninety days following the effective date of the order of the Commission, the joint underwriting association shall submit to the Commission for its review a proposed plan of operation consistent with this chapter. The plan of operation shall provide for economical, fair and nondiscriminatory administration and for the prompt and efficient provision of basic property insurance to promote orderly community development. The plan of operation shall include, but not be limited to, (i) preliminary assessment of all members for initial expenses necessary to commence operations, (ii) establishment of necessary facilities, (iii) management of the joint underwriting association, (iv) assessment of members to defray losses and expenses, (v) commission arrangements, (vi) reasonable underwriting standards and limits of liability, (vii) acceptance and cession of reinsurance, and (viii) procedures for determining amounts of insurance to be provided.
2. The plan of operation shall be subject to approval by the Commission after consultation with affected individuals and organizations, and shall take effect ten days after its approval. If the Commission disapproves all or any part of the proposed plan of operation, the joint underwriting association shall within thirty days submit for review an appropriately revised plan of operation. If the joint underwriting association fails to submit a revised plan, or if the revised plan is unacceptable, the Commission shall promulgate whatever plan of operation it deems necessary to carry out the purposes of this chapter.
3. The joint underwriting association may, on its own initiative or at the request of the Commission, amend the plan of operation. Any amendment to the plan of operation shall be subject to the Commission’s approval.
1968, c. 559, § 38.1-750; 1973, c. 504; 1986, c. 562.