Virginia Law

Any surplus accumulated within a pool's fiscal year, as determined from the annual audited financial report, may be declared refundable by the board. No distribution of the surplus funds shall be made earlier than 12 months following the end of the pool's fiscal year for which a surplus was declared. Such distribution shall not be made until certified by an actuary and the plan has been filed with the commission.

Surplus accumulated within a pool's fiscal year shall be used exclusively for the benefit of those members belonging to the pool during that year. The accounting for each pool's fiscal year shall be separate for each year.

Notwithstanding the foregoing paragraph, the commission may require, and shall permit upon application of the pool that does not write workers' compensation, an amount as the board may elect, of a pool's surplus accumulated within a fiscal year be allocated to a restricted surplus account at the end of that year. The restricted surplus is to be used at the direction of the pool's board subject to the approval of the commission.

However, for pools that have been merged into by a group self-insurance association consisting solely of political subdivisions licensed pursuant to § 65.2-802 of the Code of Virginia, the commission shall require that 1.0% or more of a pool's earned contributions for each fiscal accounting period be allocated to a contingency reserve. The contingency reserve is to be used at the direction of the pool's board subject to the approval of the commission. When the commission is satisfied that the contingency reserve is adequate for the needs of the pool, adjustments may be made by the commission as necessary to the contingency reserve or to contributions to the contingency reserve to maintain it at an established amount.