Virginia Law

A. An owner may demonstrate financial assurance for applicable costs for monitoring, repair, or replacement or operation and maintenance by obtaining insurance that conforms to the requirements of this section. The insurance shall be effective before the credits are released by the department for exchange. The insurer must be licensed pursuant to Chapter 10 (§ 38.2-1000 et seq.) of Title 38.2 of the Code of Virginia. The owner shall provide the department with a signed copy of the insurance policy. The department shall be listed as an additional insured on the policy, but the department shall not be obligated for payment of the premium in any manner.

B. The insurance policy shall guarantee that funds will be available to fund (i) for projects using wetland or stream restoration, the cost for fulfilling the requirements of the monitoring plan or (ii) for projects using structural BMPs, the reasonable and necessary cost of repair, replacement, or operation and maintenance or any combination of these activities.

C. The owner shall compare the cost estimate with the liability limit of the insurance policy:

1. Annually, at least 60 days prior to the anniversary date of the initial approval by the department of the release of credits for exchange. If the liability limit of the insurance policy is less than the amount of the cost estimate, the owner shall, by the anniversary date of the initial approval by the department of the release of credits for exchange, increase the liability limit of the insurance policy so that it at least equals the amount of the cost estimate, or obtain other financial assurance as specified in this part to cover the difference. If the liability limit of the insurance policy is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to lower the liability limit of the insurance policy to the amount of the cost estimate; and

2. Whenever the cost estimate changes. If the liability limit of the insurance policy is less than the amount of the new cost estimate, the owner shall, within 60 days of the change in the cost estimate, increase the liability limit of the insurance policy so that it at least equals the amount of the new estimate or obtain other financial assurance as specified in this part to cover the difference. If the liability limit of the insurance policy is greater than the total amount of the cost estimate, the owner may submit a written request to the director for permission to lower the liability limit of the insurance policy to the amount of the cost estimate.

D. The insurance policy shall be issued and maintained for an overall liability limit at least equal to the current cost estimate for applicable activities covered under the policy (i.e., monitoring, repair, and replacement or operation and maintenance). The term "overall liability limit" means the total amount the insurer is obligated to pay under the policy. Actual payments by the insurer will not change the overall liability limit although the insurer's future liability will be lowered by the amount of the payments.

E. The insurance policy shall provide that the insurer shall pay, as applicable, for the monitoring, repair, or replacement or operation and maintenance of the nutrient credit-generating project's practices. Justification and documentation of the expenditures must be submitted to and approved by the director. Requests for payment will be granted by the insurer only if the remaining value of the policy is sufficient to cover the remaining costs of monitoring, repair, or replacement or operation and maintenance of the nutrient credit-generating project's practices, or if the director approves the payment. The insurer shall notify the director when a payment has been made.

F. Each policy shall contain a provision allowing assignment of the policy to a successor owner. Such assignment may be conditional upon consent of the insurer, provided that such consent is not unreasonably refused.

G. The insurance policy shall provide that the insurer may not cancel, except for failure to pay the premium. In addition, the policy shall provide that, subject to payment of premium, it will automatically renew on an annual basis for a period of up to 10 years. The automatic renewal of the policy shall, at a minimum, provide the insured with the option of renewal at the face amount of the expiring policy. If there is a failure to pay the premium, the insurer may cancel or terminate the policy by sending notice of cancellation or termination by certified mail to the owner and to the department 120 days in advance of cancellation or termination. Within 60 days of receipt of notice from the insurer that it intends either to cancel or terminate the policy, the owner shall obtain alternate financial assurance and submit it to the department.

H. The owner may cancel the insurance policy only if alternate financial assurance is substituted as specified in this part, or if the owner is no longer required to demonstrate financial responsibility.

I. Within 10 days after commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy) of the United States Code, naming an owner as debtor, the owner shall notify the director by certified mail of such commencement.

J. The wording of the insurance endorsement shall be identical to the wording specified in 9VAC25-900-350. ACORD Certificates of Insurance are not valid proof of insurance.