14 Va. Admin. Code § 5-260-100

Current through Register Vol. 40, No. 22, June 17, 2024

Section 14VAC5-260-100 - Management of controlled insurers and standards for transactions with affiliates

A. Notwithstanding the control of an authorized insurer by any person, neither the officers and directors of the insurer nor any similarly situated person to whom authority has been delegated, shall thereby be relieved of any obligation or liability to which they would otherwise be subject by law, and the insurer shall be managed so as to assure its separate operating identity consistent with the Act and Title 38.2 of the Code of Virginia.

B. Nothing herein shall preclude an authorized insurer from having or sharing a common management or cooperative or joint use of personnel, property, or services with one or more other persons under arrangements meeting the standards of subsection A of § 38.2-1330 of the Act:

1. The terms shall be fair and reasonable;

2. Charges or fees for services performed shall be reasonable;

3. Expenses incurred and payments received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied;

4. The books, accounts, and records of each party shall disclose clearly and accurately the precise nature and details of the transactions as agreed upon in writing by the parties; and

5. The insurer's surplus to policyholders following any dividends or distributions to shareholder affiliates shall be reasonable in relation to the insurer's outstanding liabilities and adequate to its financial needs.

14 Va. Admin. Code § 5-260-100

Derived from Regulation 14, Case No. 20159, § 10, eff. January 1, 1980; amended, Case No. INS940114, Virginia Register Volume 11, Issue 7, eff. January 1, 1995.

Statutory Authority

§ 38.1-178.6 of the Code of Virginia.