A. After investigation, notice, and hearing, the Commission shall be empowered to activate a Joint Underwriting Association with respect to any line, subclassification or type of commercial liability insurance coverage if it finds that such line, subclassification, or type of commercial liability insurance coverage is not reasonably available for a significant number of any class, type, or group of such risks in the voluntary market or through a market assistance plan. The Association shall consist of all insurers licensed to write and engaged in writing the classes of insurance defined in §§ 38.2-117 through 38.2-119, and the liability portions of the insurance defined in §§ 38.2-124, 38.2-125 and 38.2-130 through 38.2-132 within this Commonwealth on a direct basis except those exempted from rate regulation by subsection C of § 38.2-1902. Each such insurer shall be a member of the Association as a condition of its license to write such insurance in this Commonwealth.

Terms Used In Virginia Code 38.2-2901

  • Association: means the joint underwriting association established pursuant to the provisions of this chapter. See Virginia Code 38.2-2900
  • Commercial liability insurance: means the commercial classes of insurance defined in §§ 38. See Virginia Code 38.2-2900
  • Commission: means the State Corporation Commission. See Virginia Code 38.2-100
  • Company: means any association, aggregate of individuals, business, corporation, individual, joint-stock company, Lloyds type of organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Virginia Code 38.2-100
  • Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
  • in writing: include any representation of words, letters, symbols, numbers, or figures, whether (i) printed or inscribed on a tangible medium or (ii) stored in an electronic or other medium and retrievable in a perceivable form and whether an electronic signature authorized by Chapter 42. See Virginia Code 1-257
  • Incidental coverage: means any other type of liability insurance covering activities directly related to the continued and efficient delivery of business and professional services that: (i) cannot be separately obtained in the voluntary market because commercial liability insurance is being provided pursuant this chapter; and (ii) cannot be separately obtained through other involuntary market mechanisms. See Virginia Code 38.2-2900
  • Insurer: means an insurance company. See Virginia Code 38.2-100
  • liability insurance: means the classes of insurance defined in §§ 38. See Virginia Code 38.2-2900
  • Market assistance plan: means a voluntary association of insurers and insurance agents licensed to do business in the Commonwealth that is formed, pursuant to a plan of operation filed with and approved by the Commission, to assist with the individual placement of commercial liability insurance coverage that is not reasonably available on the voluntary market. See Virginia Code 38.2-2900
  • rates: means any rate of premium, policy fee, membership fee or any other charge made by an insurer for or in connection with a contract or policy of insurance. See Virginia Code 38.2-100

B. The purpose of the Association shall be to provide markets for commercial liability insurance for persons with eligible risks who are unable to obtain commercial liability insurance coverage, including incidental coverage, through the voluntary market. It shall also be the purpose of the Association to do so on a self-supporting basis without subsidy from its members.

C. 1. The Association shall not commence underwriting operations for any line, subclassification or type of commercial liability insurance coverage until so ordered by the Commission. At the direction of the Commission, the Association shall commence operations in accordance with the provisions of this chapter.

2. If the Commission determines at any time that a line, subclassification or type of commercial liability insurance coverage is reasonably available at adequate levels in the voluntary market, the Association shall, at the direction of the Commission, cease its underwriting operations for that line, subclassification, or type of commercial liability insurance coverage.

D. The Commission shall also determine after investigation and a hearing whether the Association shall be the exclusive source of any line, subclassification or type of commercial liability insurance which it finds not to be reasonably available pursuant to subsection A of this section and the type of policy or policies that shall be issued for any line, subclassification or type of commercial liability insurance. If the Commission determines that a claims-made policy will be issued for any line, subclassification or type of coverage, the Commission shall also provide for the guaranteed availability of insurance that covers claims which (i) result from incidents occurring during periods when the basic claims-made policies are in force; and (ii) are reported after the expiration of the basic claims-made policies. The Commission may from time to time after an investigation and hearing reexamine and reconsider any determination made pursuant to this subsection.

E. Pursuant to this chapter and the plan of operation required by § 38.2-2904, the Association shall have the power on behalf of its members to:

1. Issue, or cause to be issued, policies of commercial liability insurance to eligible applicants, including incidental coverages, subject to limits specified in the plan of operation but not to exceed one million dollars for each claimant under any one policy and three million dollars for all claimants under one policy in any one year;

2. Provide a means for establishing eligibility of a risk for obtaining insurance through the plan;

3. Underwrite the insurance and adjust and pay losses on the insurance;

4. Appoint a service company or companies to perform functions enumerated in this subsection;

5. Provide a means for the equitable apportionment of profits or losses and expenses among participating insurers;

6. Develop rules for the classification of risks and rates which reflect the past and prospective loss experience and a rating plan which reasonably reflects the prior claims experience of the insureds;

7. Assume reinsurance from its members;

8. Reinsure its risks in whole or in part; and

9. Take such other action as is necessary for the efficient and equitable operation and termination of the Association.

1988, cc. 769, 783.

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