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Virginia Administrative Code (Last Updated: January 10, 2017) |
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Title 14. Insurance |
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Agency 5. State Corporation Commission, Bureau of Insurance |
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Chapter 360. Rules Governing Local Government Group Self-Insurance Pools |
Section 40. Application for license; additional requirements
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A. An application submitted by a pool shall be accompanied by the following items which shall be subject to the approval of the commission:
1. A copy of the articles of incorporation, constitution, or other instrument which sets forth the powers of the pool.
2. A copy of the bylaws or the governing rules of the proposed pool which may be included as part of the documents provided pursuant to subdivision 1 of this subsection.
3. A copy of the forms used for the member agreement and power of attorney, if any.
4. A copy of the forms used for the indemnity agreement and power of attorney, if any.
5. A copy of a financial plan which sets forth in general terms:
a. The insurance coverages to be offered by the group self-insurance pool, applicable deductible levels, and the maximum liability which the pool will retain;
b. The amount of reserves to be set aside for the payment of claims;
c. The amount, if any, of specific excess insurance to be purchased by the pool; and
d. The amount, if any, of aggregate excess insurance coverage to be purchased and maintained.
Such items may be contained in other documents submitted to the commission in lieu of inclusion in a financial plan.
6. A copy of a plan of management which provides for all of the following:
a. The means of establishing the governing authority of the pool;
b. The responsibility of the governing authority for fixing contributions to the pool, maintaining reserves, levying and collecting assessments for deficiencies, disposing of surpluses, and administration of the pool in the event of termination or insolvency;
c. The basis upon which new members may be admitted to, and existing members may leave, the pool;
d. The identification of reserves by exposure areas; and
e. Such other provisions as are necessary or desirable for the operation of the pool.
Such items may be contained in other documents in lieu of inclusion in a plan of management.
7. Designation of the initial or interim board and the administrator, together with pertinent biographical information for each member of the board and for the administrator or the principal officers of the corporation serving as administrator. This information is to be submitted on a form prescribed by the commission.
8. The address in this Commonwealth where the books and records of the pool will be maintained at all times.
9. Information showing that the pool has, within its own organization or by contract with an approved service agent, ample facilities and competent personnel to service its program with respect to underwriting matters, compilation of statistics, loss prevention, safety engineering and claims adjusting. Copies of all executed service agreements shall be filed with the commission.
10. A confirmation of a fidelity bond covering the administrator and its employees in a form and amount acceptable to the commission.
11. A projection of administrative expenses for the first year of operation in an amount and as a percentage of the estimated annual contributions.
12. Proof of payment of contributions by members of at least 25% of its estimated first year's contribution into a designated depository. This amount shall not be less than $250,000.
13. The application shall be accompanied by any other information the commission requires.
B. An application submitted by a group self-insurance pool shall be accompanied by a composite listing of the estimated annual gross contributions to be developed by each organizing member of the pool individually and in the aggregate for the pool. The aggregate amount of annual contributions must be at least $ 1 million unless otherwise approved by the commission.
C. Any subsequent revisions to items submitted under the provisions of 14VAC5-360-30 and 14VAC5-360-40 shall be filed with and subject to approval by the commission.
Historical Notes
Derived from Regulation 30, Case No. INS870057, § 5, eff. September 1, 1987; amended, Volume 26, Issue 14, eff. March 1, 2010.