38.2-1447 - Exception. - Virginia Statutes

§ 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 hereinto secure, offset, protect, or meet those reserve liabilities of such insurerwhich are established, incurred, or required under the provisions of areinsurance agreement whereby such insurer has reinsured the insurance policyliabilities of a ceding insurer, provided:

1. The ceding insurer and the reinsurer are both licensed to transactbusiness in this Commonwealth; and

2. Pursuant to a written agreement between the ceding insurer and thereinsurer, reserve assets substantially equal to the reserve liabilitiesrequired to be established by the ceding insurer on the reinsured businessare either (i) deposited by or are withheld from the reinsurer and are in thecustody of the ceding insurer as security for the payment of the reinsurer'sobligations under the reinsurance agreement, and such assets are held subjectto withdrawal by and under control of the ceding insurer or (ii) aredeposited and held in a trust account for such purpose and under suchconditions with a qualified United States financial institution defined aseligible 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 accordancewith its authority to make examinations of insurers as conferred by otherprovisions of this title.

(1992, c. 588.)