38.2-4113 - Reinsurance. - Virginia Statutes

§ 38.2-4113. Reinsurance.

A. A domestic society may, by a reinsurance agreement, cede any individualrisk or risks in whole or in part to an insurer, other than another fraternalbenefit society, having the power to make such reinsurance and authorized todo business in this Commonwealth, or if not so authorized, one which isapproved by the Commission, but no such society may reinsure substantiallyall of its insurance in force without the written permission of theCommission. It may take credit for the reserves on such ceded risks to theextent reinsured, but no credit shall be allowed as an admitted asset or as adeduction from liability, to a ceding society for reinsurance made, ceded,renewed, or otherwise becoming effective after the effective date of thischapter, unless the reinsurance is payable by the assuming insurer on thebasis of the liability of the ceding society under the contract or contractsreinsured without diminution because of the insolvency of the ceding society.

B. Notwithstanding the limitation in subsection A, a society may reinsure therisks of another society in a consolidation or merger approved by theCommission under § 38.2-4114.

(Code 1950, §§ 38-270, 38.1-575; 1952, c. 317, § 38.1-638.7; 1968, c. 654;1986, c. 562.)