Title 38.2, Title 38.2. Insurance

As used in this chapter: "Mutual assessment insurance" means property and casualty insurance written by an insurer which has a right to assess its members for contributions and which is licensed pursuant to this chapter. "Mutual assessment property and casualty insurer" means a c…

Mutual assessment property and casualty insurers licensed pursuant to this chapter may write mutual assessment insurance.

A. Any mutual assessment property and casualty insurer with surplus to policyholders of at least $25,000 may write the following classes: 1. Fire insurance as defined in § 38.2-110; 2. Miscellaneous property damage insurance as defined in § 38.2-111; and 3. Animal insurance as de…

A mutual assessment property and casualty insurer shall not insure real property outside the limits of the territory for which it is authorized to write insurance as specified in its charter or bylaws. However, members may be provided liability or other insurance on risks other t…

No mutual assessment property and casualty insurer shall insure against any losses except as specified in this chapter. Any officer or agent who knowingly or willfully violates or who causes the insurer to violate this provision shall be fined in accordance with § 38.2-218.

Except as otherwise provided in this chapter, and except when the context otherwise requires, all the provisions of this title relating to insurers generally, and those relating to insurers writing the same class of insurance that mutual assessment property and casualty insurers …

A. Any mutual assessment property and casualty insurer desiring to remove itself from the provisions of this chapter and desiring to become an insurer under the provisions of Chapter 10 (§ 38.2-1000 et seq.) of this title may do so by meeting the requirements of Chapter 10. The m…

Mutual assessment property and casualty insurers formed after July 1, 1986, shall be incorporated under the provisions of Article 3 (§ 13.1-818 et seq.) of Chapter 10 of Title 13.1, as modified by the provisions of this title. Except as otherwise provided in this title, mutual as…

As provided in the certificate or articles of incorporation and the bylaws, the management of any mutual assessment property and casualty insurer shall be vested in a board of at least five directors, each of whom shall be a member of the insurer. Each director shall hold office …

Unless the certificate or articles of incorporation provides otherwise, the directors shall elect from their number a president. The directors shall also elect a secretary, treasurer, and any additional officers they consider necessary, who may or may not be members. The offices …

The applicant insurer shall file with and have approved by the Commission its application for the license required by § 38.2-1024 prior to transacting the business of insurance in this Commonwealth. The Commission shall not grant a license to any insurer until it is satisfied tha…

Any person having a risk insurable under this chapter who resides in the territory in which the insurer operates or who owns property located in the territory may become a member of a mutual assessment property and casualty insurer and shall be entitled to all the rights and priv…

A. Any member of a mutual assessment property and casualty insurer may withdraw as a member at any time by giving at least thirty days' written notice to the insurer and paying his share of all losses against the insurer that have occurred prior to the member's withdrawal and whi…

If any member is excluded from the insurer as provided in this article, the insurer shall note upon its records the exclusion of the member, the cancellation of his insurance policies, and the date of the exclusion. The insurer shall notify the member by mail of the exclusion and…

Every mutual assessment property and casualty insurer shall maintain a membership of at least 100 persons at all times. Whenever the number of members falls below 100, the insurer shall notify the Commission immediately of that fact. Upon receipt of that notice, or upon informati…

The directors of every mutual assessment property and casualty insurer shall issue insurance policies requiring the insurer to pay all losses or damages caused by the risk insured against during the time the policy is in force. Payment shall not exceed the amount insured. There s…

Every mutual assessment property and casualty insurer shall file with the Commission a copy of all policy forms and standard endorsements which the insurer intends to use in the transaction of its business. Mutual assessment property and casualty insurers shall be exempt from the…

Each person insured by a mutual assessment property and casualty insurer shall be issued a contract prescribed by the insurer, that shall be uniform among members of the respective classes of insurance written by the insurer. Each member shall agree to pay his pro rata share of a…

Any insurer writing mutual assessment property and casualty insurance may classify the property or risk insured in accordance with the risk or hazard to which the property is subject, and fix the rate of assessment or premium for that insurance in accordance with the classificati…

Any mutual assessment property and casualty insurer having a surplus to policyholders equal to at least 3 times the average annual losses and expenses of the insurer during the last 5-year period or a surplus to policyholders of at least $800,000 may limit the assessment liabilit…

After an assessment is made, the insurer shall give every member subject to the assessment written notice stating the amount of the member's assessment and the date when payment is due. Except where the provisions of the bylaws or the policy provide otherwise, the time of payment…

Within twelve months after an assessment becomes due, a mutual assessment property and casualty insurer may institute suit against any member to recover any assessment that the member fails to pay. The insurer shall be entitled to recover (i) the amount shown to be due, (ii) lawf…

Each policyholder after sustaining loss or damage from any cause specified in the policy shall notify the mutual assessment property and casualty insurer within the time prescribed in the policy. The insurer shall promptly proceed to ascertain and adjust the loss or damage in the…

If at any time any loss or damage to property insured by a mutual assessment property and casualty insurer exceeds the insurer's cash available to pay the loss or damage, the insurer may borrow money in an amount sufficient to pay the loss or damage. This shall be approved by the…

Agents representing a mutual assessment property and casualty insurer shall be licensed by the Commission and appointed by the insurer in accordance with Chapter 18 of this title. However, agents whose licenses are limited to those classes of insurance referred to in subsections …

A. Surplus to policyholders in addition to the required surplus specified in subsections A and B of § 38.2-2503 may be accumulated in amounts as determined by the board of directors. The surplus may be used for the payment of losses and operating expenses of the insurer. B. Incom…

A. No single risk shall be assumed by a mutual assessment property and casualty insurer in an amount exceeding ten percent of its surplus to policyholders. Any risk or portion of any risk which has been reinsured in accordance with § 38.2-2528 shall be deducted in determining the…

Any mutual assessment property and casualty insurer may reinsure the whole or any part of its risks with any solvent insurer licensed in this Commonwealth or licensed or approved in any other state and meeting standards of solvency at least equal to those required in this Commonw…

A. Advance assessments received by mutual assessment property and casualty insurers shall be considered premiums and, except as provided in subsection B of this section, shall be subject to the requirement of an unearned premium reserve computed in accordance with § 38.2-1312. Th…

As used in this chapter: "Fronting company" means a licensed insurer or licensed home protection company which generally transfers to one or more unlicensed insurers or unlicensed home protection companies by reinsurance or otherwise all or substantially all of the risk of loss u…

This chapter shall not apply to: 1. Performance guarantees given by either (i) the builder of a home or (ii) the manufacturer, seller, or lessor of the property that is the subject of the contract if no identifiable charge is made for the guarantee. 2. Any service contract, guara…

A property and casualty insurer may be licensed to transact home protection insurance as defined in § 38.2-129. An insurer licensed in this Commonwealth to transact the class of insurance defined by § 38.2-111 on July 1, 1986, may also transact home protection insurance without a…

Except as provided in § 38.2-2602, no home protection company shall issue or offer to issue home protection contracts in this Commonwealth until a home protection company license has been granted by the Commission. Application for a license shall be made in writing, in the form p…

A. No license shall be issued to any home protection company unless the applicant: 1. Is a Virginia corporation formed under the provisions of Article 3 (§ 13.1-618 et seq.) of Chapter 9 of Title 13.1, or Article 3 (§ 13.1-818 et seq.) of Chapter 10 of Title 13.1; or 2. Is a fore…

Every home protection company licensed under this chapter shall obtain a renewal of its license annually from the Commission. Every license issued under this chapter shall expire at midnight on June 30 immediately following the date of issuance. No renewal license shall be issued…

A home protection company licensed in this Commonwealth shall maintain reserves in an amount sufficient to provide for its liability to furnish appropriate indemnity, repairs, and replacement services under its issued and outstanding contracts. The reserve account shall be calcul…

On or before March 1 of each year, each home protection company shall file with the Commission its annual statement pursuant to the provisions of § 38.2-1300, in the form prescribed by the Commission. The annual statement may be based on accounting principles common to the home p…

A. No home protection contract shall be issued or used in this Commonwealth unless it has been filed with and approved by the Commission. B. No home protection contract shall be issued in this Commonwealth unless it: 1. Is written in simple and readable words with common meanings…

No person shall sell, solicit, or negotiate home protection contracts in this Commonwealth unless (i) he has a valid license granting the authority to transact such insurance in this Commonwealth, (ii) he has a valid license to sell real estate in this Commonwealth, issued pursua…

A. No home protection contract shall be cancelable by the home protection company during the initial term for which it is issued, except for: 1. Nonpayment of premium; 2. Fraud or misrepresentation of facts material to the issuance of the contract; or 3. Contracts providing cover…

No person shall make or permit any unfair discrimination between individuals in the rates or fees charged for any contract, in the performance of services or payments for services, or in any other terms or conditions of the contract.

In addition to the provisions of Chapter 5 (§ 38.2-500) of this title, the Commission may order any home protection company or its representatives to cease and desist from engaging in the following unfair trade practices: 1. The making of any false or misleading statements, eithe…

Except as otherwise specifically provided in this chapter or where the context requires otherwise, all of the provisions of this title that apply to property and casualty insurers shall apply in every respect to home protection companies licensed under this chapter. In addition, …

No licensed insurer or licensed home protection company shall act as a fronting company for any unlicensed insurer or unlicensed home protection company.

A. A home protection company that engages in any business other than the business of a home protection company is not eligible for the issuance or renewal of a license in this Commonwealth. B. Nothing in this chapter shall be deemed to authorize any home protection company to tra…

Notwithstanding the provisions of § 38.2-312, no home protection company based in this Commonwealth shall be prohibited from including in its contract a provision that requires the contract holder to submit to binding arbitration any dispute between the contract holder and the ho…