Section 80. Guarantee

A. An operator may satisfy the requirements of 9VAC25-640-50 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 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 operator; or

2. A firm engaged in a substantial business relationship with the 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 9VAC25-640-70 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 and shall deliver the letter to the 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 operator and the board. If the board notifies the guarantor that he no longer meets the requirements of the financial test of 9VAC25-640-70 B or C and D, the guarantor shall notify the 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 operator receives the notification, as evidenced by the return receipt. The operator shall obtain alternate coverage as specified in 9VAC25-640-200.

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.

Historical Notes

Derived from Volume 17, Issue 10, eff. March 2, 2001; amended, Virginia Register Volume 25, Issue 02, eff. November 1, 2008.

Statutory Authority

§§ 62.1-44.15 and 62.1-44.34:16 of the Code of Virginia.