Virginia Law

Article 4. Insurance Transactions.

The directors of every mutual assessment property and casualty insurer shall issue insurance policies requiring the insurer to pay all losses or damages caused by the risk insured against during the time the policy is in force. Payment shall not exceed the amount insured. There shall be attached to or included in each of those policies the portion of the bylaws that constitute a part of the policy contract. Bylaws or their amendments that are not a part of the policy contract shall not affect the policy contract unless they are included as a suitable endorsement mailed or delivered to the policyholder.

Code 1950, § 38-529; 1952, c. 317, § 38.1-673; 1954, c. 161; 1986, c. 562.

Every mutual assessment property and casualty insurer shall file with the Commission a copy of all policy forms and standard endorsements which the insurer intends to use in the transaction of its business. Mutual assessment property and casualty insurers shall be exempt from the filing requirements of Chapter 3 (§ 38.2-300 et seq.) of this title except for those classes of insurance enumerated in subsection C of § 38.2-2503, where full compliance with Chapter 3 shall be required.

1986, c. 562.

Each person insured by a mutual assessment property and casualty insurer shall be issued a contract prescribed by the insurer, that shall be uniform among members of the respective classes of insurance written by the insurer. Each member shall agree to pay his pro rata share of all losses or damages sustained, expenses of operation of the insurer, and the maintenance of an adequate surplus to policyholders as determined by the board of directors. Periodic assessments may be collected as advance premiums or post assessments or by both methods. The amount of assessments shall be established by the directors of the insurer.

Code 1950, § 38-530; 1952, c. 317, § 38.1-677; 1954, c. 161; 1986, c. 562.

Any insurer writing mutual assessment property and casualty insurance may classify the property or risk insured in accordance with the risk or hazard to which the property is subject, and fix the rate of assessment or premium for that insurance in accordance with the classification.

Code 1950, § 38-531; 1952, c. 317, § 38.1-676; 1974, c. 244; 1986, c. 562.

Any mutual assessment property and casualty insurer having a surplus to policyholders equal to at least 3 times the average annual losses and expenses of the insurer during the last 5-year period or a surplus to policyholders of at least $800,000 may limit the assessment liability of members. The liability of members for assessment may be limited during any one year to an amount not less than one additional current annual assessment.

1952, c. 317, § 38.1-683.1; 1986, c. 562.

After an assessment is made, the insurer shall give every member subject to the assessment written notice stating the amount of the member's assessment and the date when payment is due. Except where the provisions of the bylaws or the policy provide otherwise, the time of payment shall be at least thirty days and no more than sixty days from the service of the notice. That notice may be served personally, by mail, or by electronic delivery pursuant to § 38.2-325. If mailed, the notice shall be deposited with the United States Postal Service and addressed to the member at his residence or place of business as shown on the company records.

Code 1950, § 38-535; 1952, c. 317, § 38.1-684; 1986, c. 562; 2020, c. 216.

Within twelve months after an assessment becomes due, a mutual assessment property and casualty insurer may institute suit against any member to recover any assessment that the member fails to pay. The insurer shall be entitled to recover (i) the amount shown to be due, (ii) lawful interest, and (iii) fifty percent of the principal amount as liquidated damages for neglect or refusal to pay within the time required.

Code 1950, § 38-536; 1952, c. 317, § 38.1-685; 1986, c. 562.

Each policyholder after sustaining loss or damage from any cause specified in the policy shall notify the mutual assessment property and casualty insurer within the time prescribed in the policy. The insurer shall promptly proceed to ascertain and adjust the loss or damage in the manner provided by the policy, law and bylaws of the company.

Code 1950, § 38-530; 1952, c. 317, § 38.1-678; 1986, c. 562.

If at any time any loss or damage to property insured by a mutual assessment property and casualty insurer exceeds the insurer's cash available to pay the loss or damage, the insurer may borrow money in an amount sufficient to pay the loss or damage. This shall be approved by the board of directors or the executive committee. The board of directors or the executive committee may levy an assessment sufficient to repay the loan or to pay the loss or damage, or any portion that is in excess of the cash on hand.

Code 1950, § 38-532; 1952, c. 317, § 38.1-681; 1986, c. 562.

Agents representing a mutual assessment property and casualty insurer shall be licensed by the Commission and appointed by the insurer in accordance with Chapter 18 of this title. However, agents whose licenses are limited to those classes of insurance referred to in subsections A and B of § 38.2-2503 shall not be required to take a written examination from the Commission in accordance with § 38.2-1814.

1986, c. 562.