38.2-2708 - Creation and plan of operation of joint underwriting association. - Virginia Statutes

§ 38.2-2708. Creation and plan of operation of joint underwriting association.

A. After providing notice and opportunity to be heard and upon promulgationof an order by the Commission pursuant to § 38.2-2707, a joint underwritingassociation shall be created consisting of all insurers licensed to writebasic property insurance or other insurance that contains a basic propertyinsurance component in this Commonwealth, but excluding insurers exemptedfrom rate regulation by subsection C of § 38.2-1902. Each insurer that isrequired to be a member of the joint underwriting association shall remain amember as a condition of its license to write basic property insurance andother insurance that contains a basic property insurance component in thisCommonwealth.

B. The joint underwriting association shall, pursuant to this chapter and theplan of operation, have the power to (i) cause its members to issue policiesof basic property insurance on qualified property to applicants; (ii) assumereinsurance on qualified property from members; and (iii) cede reinsurance.

C. 1. Within ninety days following the effective date of the order of theCommission, the joint underwriting association shall submit to the Commissionfor its review a proposed plan of operation consistent with this chapter. Theplan of operation shall provide for economical, fair and nondiscriminatoryadministration and for the prompt and efficient provision of basic propertyinsurance to promote orderly community development. The plan of operationshall include, but not be limited to, (i) preliminary assessment of allmembers for initial expenses necessary to commence operations, (ii)establishment of necessary facilities, (iii) management of the jointunderwriting association, (iv) assessment of members to defray losses andexpenses, (v) commission arrangements, (vi) reasonable underwriting standardsand limits of liability, (vii) acceptance and cession of reinsurance, and(viii) procedures for determining amounts of insurance to be provided.

2. The plan of operation shall be subject to approval by the Commission afterconsultation with affected individuals and organizations, and shall takeeffect ten days after its approval. If the Commission disapproves all or anypart of the proposed plan of operation, the joint underwriting associationshall within thirty days submit for review an appropriately revised plan ofoperation. If the joint underwriting association fails to submit a revisedplan, or if the revised plan is unacceptable, the Commission shall promulgatewhatever plan of operation it deems necessary to carry out the purposes ofthis chapter.

3. The joint underwriting association may, on its own initiative or at therequest of the Commission, amend the plan of operation. Any amendment to theplan of operation shall be subject to the Commission's approval.

(1968, c. 559, § 38.1-750; 1973, c. 504; 1986, c. 562.)