38.2-2606 - Reserves required. - Virginia Statutes

§ 38.2-2606. Reserves required.

A home protection company licensed in this Commonwealth shall maintainreserves in an amount sufficient to provide for its liability to furnishappropriate indemnity, repairs, and replacement services under its issued andoutstanding contracts. The reserve account shall be calculated according tosound actuarial principles, but shall equal at a minimum fifty percent of thepremiums received from all contracts in force in this Commonwealth, net ofapplicable reinsurance and any amounts paid on account of liabilitiesincurred under the contracts. To receive credit for reinsurance on homeprotection contracts, the reinsurance contract or policy shall be issued by asolvent insurer licensed in this Commonwealth or any other state havingstandards of solvency at least equal to those required in this Commonwealth.

(1981, c. 530, § 38.1-936; 1986, c. 562.)