38.2-1105 - Deposit of minimum capital; letter of credit instead of deposit. - Virginia Statutes

§ 38.2-1105. Deposit of minimum capital; letter of credit instead of deposit.

A. No captive insurer shall be issued a license to transact the business ofinsurance in this Commonwealth until it has met the requirements of Article 5(§ 38.2-1024 et seq.) of Chapter 10 of this title.

B. The captive insurer shall deposit with the State Treasurer cash, bonds, orsecurities equal to the minimum capital or, if a mutual insurer, fiftypercent of the minimum surplus, as required by Article 5 (§ 38.2-1024 etseq.) of Chapter 10 of this title. The State Treasurer shall accept anirrevocable letter of credit, in a form acceptable to the Commission, onbehalf of a captive insurer instead of requiring the above-mentioned deposit.The letter of credit shall be issued by a national or state bank and approvedby the Commission.

C. The deposit or letter of credit shall be held by the State Treasurer forthe benefit of all policyholders and creditors wherever located and shall beadministered as provided in Article 7 (§ 38.2-1045 et seq.) of Chapter 10 ofthis title.

D. The State Treasurer shall furnish to the captive insurer a certificatecertifying that the State Treasurer holds the securities or letters of creditin trust for the benefit of the policyholders and creditors of the captiveinsurer.

(1980, c. 665, § 38.1-921; 1986, c. 562.)