Section 70. Guarantee

A. An owner or operator may satisfy the requirements of 9VAC25-590-40 by obtaining a guarantee that conforms to the requirements of this section. The guarantor shall be:

1. A firm that:

a. Possesses a controlling interest in the owner or operator;

b. Possesses a controlling interest in a firm described under subdivision A 1 a of this section; or

c. Is controlled through stock ownership by a common parent firm that possesses a controlling interest in the owner or operator; or

2. A firm engaged in a substantial business relationship with the owner or operator and issuing the guarantee as an act incident to that business relationship.

B. Within 120 days of the close of each financial reporting year, the guarantor shall demonstrate that it meets the financial test criteria of 9VAC25-590-60 B or C and D based on year-end financial statements for the latest completed financial reporting year by completing the letter from the chief financial officer described in Appendix I or Appendix XI and shall deliver the letter to the owner or operator. If the guarantor fails to meet the requirements of the financial test at the end of any financial reporting year, within 120 days of the end of that financial reporting year, the guarantor shall send by certified mail, before cancellation or nonrenewal of the guarantee, notice to the owner or operator, and the board. If the board notifies the guarantor that he no longer meets the requirements of the financial test of 9VAC25-590-60 B or C and D, the guarantor shall notify the owner or operator within 10 days of receiving such notification from the board. In both cases, the guarantee will terminate no less than 120 days after the date the owner or operator and the board receive the notification, as evidenced by the return receipts. The owner or operator shall obtain alternate coverage as specified in 9VAC25-590-190.

C. The guarantee shall be worded identically as specified in Appendix II, except that instructions in brackets are to be replaced with the relevant information and the brackets deleted.

D. Under the terms of the guarantee, all amounts paid by the guarantor under the guarantee will be paid directly to the board in accordance with instructions from the board under 9VAC25-590-170.

Historical Notes

Derived from VR680-13-03 § 7, eff. May 9, 1990; amended, Volume 10, Issue 01, eff. November 3, 1993; Volume 14, Issue 23, eff. September 2, 1998; Volume 21, Issue 08, eff. January 26, 2005.

Statutory Authority

§§ 62.1-44.34:9 and 62.1-44.34:12 of the Code of Virginia; 40 CFR Part 280.