8 General Notices/Errata

GENERAL NOTICES/ERRATA

Vol. 29 Iss. 10 - January 14, 2013

GENERAL NOTICES/ERRATA

STATE CORPORATION COMMISSION

Bureau of Insurance

December 13, 2012

Administrative Letter 2012-11

TO: All Companies Licensed under Chapter 10, 11, 12, 25, 26, 28, 40, 41, 42, 43, 46 or 51 of Title 38.2 or § 15.2-2700 et seq. or § 65.2-800 et seq. of the Code of Virginia

RE: Requirements for Reinsurers Applying to Qualify as Acceptable Reinsurers under § 38.2-1316.2 of the Code of Virginia

The provisions of this administrative letter, effective January 1, 2013, replace the provisions of Administrative Letter 1992-3.

During the 2012 General Assembly Session, the Virginia General Assembly enacted legislation that amended the requirements for reinsurers to qualify as an  accredited, substantially similar, trusteed (single assuming, association incorporated and individual unincorporated underwriters, or incorporated underwriters) or certified reinsurer. House Bill 1139, which amended Article 3.1 of Chapter 13 (§§ 38.2-1316.1 through 38.2-1316.8) of Title 38.2 of the Code of Virginia, provides that all cessions made under reinsurance agreements which have an inception, anniversary, or renewal date on or after January 1, 2013, will be subject to the amended requirements of Article 3.1.

In accordance with Article 3.1, a domestic insurer licensed in Virginia is allowed credit for a reinsurance transaction if the assuming insurer specifically qualifies under the amended provisions of Article 3.1. Additionally, the reinsurance agreement itself must satisfy the conditions set forth in 14 VAC 5-300-150 of the Virginia Administrative Code. Even if the assuming insurer is a qualified reinsurer and the reinsurance agreement satisfies the conditions of 14 VAC 5-300-150, credit shall be disallowed if there is any indication of financial statement distortion, or if the assuming insurer bears no substantial insurance risk or net loss to itself.

This letter sets forth basic criteria which the Bureau of Insurance ("Bureau") will use to determine whether a domestic ceding insurer may take credit pursuant to § 38.2-1316.2. It explains how an assuming insurer can be authorized in Virginia as an accredited, substantially similar, trusteed (single assuming, association incorporated and individual unincorporated underwriters, or incorporated underwriters) or certified reinsurer. It also puts into context the responsibilities of ceding insurers licensed in Virginia in regard to their assuming insurers.

ASSUMING INSURER QUALIFICATIONS:

Reinsurers qualifying under § 38.2-1316.2 must satisfy minimum financial standards. When the ceding insurer is a domestic ceding insurer the assuming insurer may qualify under one of the following classifications:

A. Licensed in Virginia as an insurer in good standing (§ 38.2-1316 2 A 1).

B. Accredited in Virginia as an accredited reinsurer with surplus of at least $20 million (§ 38.2-1316.2 A 2).

C. Licensed and domiciled in a state with credit for reinsurance laws substantially similar to Virginia's credit for reinsurance laws, and having surplus of at least $20 million or a trusteed surplus of $20 million, in the case of a U.S. branch of an alien assuming insurer (§ 38.2-1316.2 A 3).

D. Recognition as a single assuming insurer with a qualifying trust account and trusteed surplus of at least $20 million (§ 38.2-1316.2 A 4 a and b).

E. Qualified participation in an association of incorporated and individual unincorporated underwriters with a qualifying trust account and trusteed surplus of at least $100 million (§ 38.2-1316.2 A 4 c).

F. Qualified participation in an experienced association of incorporated underwriters with aggregate policyholders' surplus of at least $10 billion, a qualifying trust account, and a joint trusteed surplus of at least $100 million (§ 38.2-1316.2 A 4 d).

G. Certified in Virginia as a certified reinsurer:

1. With a surplus of at least $250 million,

2. Domiciled and licensed to transact insurance or reinsurance in a qualified jurisdiction, and

3. With acceptable financial strength ratings from two or more rating agencies.

Assuming insurers desiring to qualify as reinsurers under the above classifications may obtain the required forms from the Bureau's "Company Home" webpage at http://www.scc.virginia.gov/boi/co/index.aspx. The filing requirements are located under the "Licensing and Registration Procedures" link. The Certificate of Assuming Insurer, the Certificate of Certified Reinsurer, Form CR-F and Form CR-S (including instructions) are located under the "Information for Annual License Renewal and Financial Filings" link.

RESPONSIBILITIES OF THE CEDING INSUER

Ceding insurers are responsible for ensuring the validity of any credit reported on their financial statements. A ceding insurer should be able to assign each of its assuming insurers to one of the above classifications of qualifying reinsurers upon request. If the ceding insurer cannot identify its assuming insurer as falling into one of the classifications cited above, the reinsurance transaction should be effected or secured in a manner that satisfies § 38.2-1316.4 1 or § 38.2-1316.4 2, respectively.

Questions concerning this administrative letter may be addressed to: Gregory T. Chew, Supervisor, Financial Analysis Section, Domestic Companies, Financial Regulation Division, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone [phone], or email [e-mail].

/s/ Jacqueline K. Cunningham
Commissioner of Insurance

DEPARTMENT OF ENVIRONMENTAL QUALITY

Proposed Consent Order for Brunswick County Industrial Development Authority

An enforcement action has been proposed for the Brunswick County Industrial Development Authority for alleged violations at the Meherrin jail sewage pump station located at Route 1 and Route 85 in Brunswick County, Virginia. The consent order requires corrective action and a civil charge. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Frank Lupini will accept comments by email at [e-mail], FAX [phone], or postal mail at Department of Environmental Quality, Piedmont Regional Office, 4949-A Cox Road, Glen Allen, VA 23060, from January 14, 2013, to February 14, 2013.

Notice of Citizen Nomination of Surface Waters for Water Quality Monitoring

In accordance with § 62.1-44.19:5 F of the Code of Virginia, the Water Quality Monitoring Information and Restoration Act, the Virginia Department of Environmental Quality (DEQ) has developed guidance for requests from the public regarding specific segments that can be nominated for consideration to be included in the Virginia Department of Environmental Quality (DEQ's) annual Water Quality Monitoring Plan.

Any citizen of the Commonwealth who wishes to nominate a water body or stream segment for inclusion in DEQ's Water Quality Monitoring Plan should refer to the guidance in preparation and submittal of their requests. All nominations must be received by April 30, 2013, to be considered for the 2014 calendar year. Copies of the guidance document and nomination form are available online at http://www.deq.virginia.gov/Programs/Water/WaterQualityInformationTMDLs/WaterQualityMonitoring/CitizenMonitoring.aspx.

Contact Information: Stuart Torbeck, Department of Environmental Quality, 629 East Main Street, P.O. Box 1105, Richmond, VA 23218, telephone [phone], or email [e-mail].

Draft Water Quality Implementation Plan (IP) for the Chickahominy River and Tributaries Impaired for Bacteria In Hanover, Henrico, Charles City, and New Kent Counties and the City of Richmond

Public meeting: Mechanicsville Branch Library, 7461 Sherwood Crossing Place, Mechanicsville, VA 23111. Public meetings will be held on Thursday, February 7, 2013, at 2 p.m. and 6 p.m. Both meetings are open to the public. Afternoon and evening meetings will cover the same material. In the case of inclement weather please contact Margaret Smigo at [phone].

Purpose of notice: The Virginia Department of Environmental Quality (DEQ) is announcing a draft Implementation Plan (IP) for the Chickahominy River and its tributaries, which are impaired for primary contact or swimming use due to water quality standard exceedances. The sources of bacteria and reductions necessary to meet the water quality standard and restore the impaired use were detailed in the total maximum daily load (TMDL) study, which was approved by EPA in September 2012. The TMDL is available on the DEQ website at http://www.deq.virginia.gov/portals/0/DEQ/Water/TMDL/apptmdls/jamesrvr/chickec.pdf. The implementation plan is based on the reductions to bacteria identified in the TMDL.

Meeting description: Public meetings provide an opportunity for the public to share their knowledge of the watershed and learn about pollution affecting community waters. Meetings will feature a summary of information from the draft implementation plan, the Best Management Practices (BMPs) identified for reducing bacteria from sources, and the estimated costs of implementation. Those attending the meeting are invited to ask questions, contribute their knowledge of the watershed, and provide feedback during the public comment period.

Description of study: Virginia agencies have identified sources of bacteria in the waters of the Chickahominy River and its tributaries. The impaired waterways are:

Stream	County/City	Length (mi.)	Impairment
Stony Run	Hanover	0.21	Bacteria (Primary Contact/Swimming Use)
Beaverdam Creek	Hanover	6.69
Chickahominy River	Henrico, Hanover	7.54
Boatswain Creek	Hanover	3.76
Collins Run	Charles City County	4.50

These streams are impaired for failure to meet the Primary Contact (Recreational or Swimming) designated use due to exceedances of the bacteria water quality standard. The TMDL study reported on the sources of bacteria and recommended total maximum daily loads, or TMDLs. A TMDL is the total amount of a pollutant a water body can contain and still meet water quality standards. To restore water quality, bacterial levels need to be reduced to the TMDL amount. The Implementation Plan (IP) utilizes the source information and reductions identified in the TMDL and recommends a series of watershed measures known as Best Management Practices (BMPs). BMPs can be implemented throughout the watershed in order to meet the TMDL bacteria reduction goals. The development of an IP requires the participation of watershed stakeholders at "working group" meetings to evaluate BMPs for the watersheds and the participation of a steering committee made up of working group members to guide the process. After the initiation of the IP development in May 2012, a government, residential, and agriculture workgroup each met to evaluate potential BMPs and costs in order to meet reduction goals set by the TMDL. The meeting minutes and handouts used during implementation planning are available on the DEQ website at http://www.deq.virginia.gov/Programs/Water/WaterQualityInformation
TMDLs/TMDL/TMDLImplementation/TMDLImplementationProgress.aspx. The draft implementation plan will be available on the DEQ website one week prior to the public meeting at http://www.deq.virginia.gov/Programs/Water/WaterQualityInformationTMDLs/TMDL/TMDLImplementation/TMDLImplementationPlans.aspx.

How a decision is made: After the public meeting and all public comments have been considered and addressed, DEQ will submit the final TMDL report to the State Water Control Board for approval.

How to comment: DEQ accepts written comments by email, FAX, or postal mail. Written comments should include the commenter's name, address, and telephone number and be received by DEQ during the comment period, which will begin on Friday, February 8, 2013, and end on Monday, March 11, 2013.

Contact for additional information: Margaret Smigo, TMDL Coordinator, Department of Environmental Quality, Piedmont Regional Office, 4949A Cox Road, Glen Allen, VA 23060, telephone [phone], FAX [phone], or email [e-mail].

DEPARTMENT OF HEALTH

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JANUARY 1, 2013 - DRINKING WATER STATE REVOLVING FUNDS

The Department of Health (VDH) is pleased to announce several opportunities for funding drinking water infrastructure. Construction applications may be submitted year round. However, applications received after the due date stated below will be considered for funding in the following cycle. Funding is made possible by the Drinking Water State Revolving Fund (DWSRF) Program and the Water Supply Assistance Grant Fund (WSAG) Program (if funds are available). VDH anticipates a funding level of $20 million. The FY 2014 DWSRF Intended Use Plan will be developed using public input on these issues.

(1) Construction Funds - Must be postmarked by April 1, 2013.

Private and public owners of community waterworks and nonprofit noncommunity waterworks are eligible to apply for construction funds. VDH makes selections based on criteria described in the DWSRF Program Design Manual, such as existing public health problems, noncompliance, affordability, regionalization, the availability of matching funds, etc. Readiness to proceed with construction is a key element. A Preliminary Engineering Report must be submitted if required by VDH.  An instruction packet and Construction Project Schedule are included.

(2) Set-Aside Suggestion Forms - Must be postmarked by April 1, 2013.

Anyone has the opportunity to suggest new or continuing set-aside (nonconstruction) activities. Set-aside funds help VDH assist waterworks owners to prepare for future drinking water challenges and assure the sustainability of safe drinking water.

(3) 1452(k) Source Water Protection Initiatives - Must be postmarked by April 1, 2013.

This provision allows VDH to loan money for activities to protect important drinking water resources. Loan funds are available to: (1) community and nonprofit noncommunity waterworks to acquire land/conservation easements and (2) to community waterworks, only, to establish local, voluntary incentive-based protection measures.

(4) Planning and Design Grants - Must be postmarked by September 3, 2013.

Private and public owners of community waterworks are eligible to apply for these grant funds. Grants can be up to $50,000 per project for small, financially stressed, community waterworks serving fewer than 10,000 persons. Eligible projects may include preliminary engineering planning, design of plans and specifications, performance of source water quality and quantity studies, drilling test wells to determine source feasibility, or other similar technical assistance projects. These funds could assist the waterworks owner in future submittals for construction funds.

The VDH's DWSRF Program Design Manual describes the features of the above opportunities for funding. After receiving the aforementioned public input, VDH will develop a draft Intended Use Plan for public review and comment. When developed the draft Intended Use Plan will describe specific details for use of the funds. A public meeting is planned and written comments will be accepted before VDH submits a final version to the USEPA for approval.

Request applications, set-aside suggestion forms, Program Design Manuals and information from Steven Pellei, PE, FCAP Director, telephone [phone], FAX [phone], or postal mail Virginia Department of Health, Office of Drinking Water, 109 Governor Street, 6th Floor, Richmond, VA 23219. Any comments may be directed to Mr. Pellei. The materials are also accessible on the VDH website at http://www.vdh.virginia.gov/odw/financial/dwfundingprogramdetails.htm.

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JANUARY 1, 2013 - WATER SUPPLY ASSISTANCE GRANT FUNDING

The 1999 General Assembly created the Water Supply Assistance Grant Fund (WSAG) in § 32.1-171.2 of the Code of Virginia. The purpose of the WSAG is to make grant funds available to localities and owners of waterworks to assist in the provision of drinking water. The Virginia Department of Health does not anticipate WSAG funds being made available at the present time. If WSAG funds are made available VDH will implement the following WSAG requirements.

Funds are available by submitting an application postmarked on or before the dates indicated for the following:

(1) Small Project Construction Grants - Application must be postmarked by April 1, 2013.

Funding for small project construction may be available for projects whose total project cost does not exceed $150,000. Eligible activities may include (but not be limited to): upgrade or construction of well or spring sources, waterlines, storage tanks, and treatment.

The applicant submits the current VDH construction application to VDH. To promote coordination of funding and streamline the process for applicants, grants are prioritized in accordance with rating criteria of the current DWSRF Program. For WSAG purposes only, up to 30 extra points are added to the VDH rating criteria relative to the Stress Index rank. Preference is given to community waterworks. This priority system ensures that all eligible acute or chronic health/SDWA compliance projects are funded before any other eligible project.

(2) Surface Water Development or Improvement Grants - Application must be postmarked by April 1, 2013.

Funding for community waterworks surface source water development or improvement activities. The application cannot exceed $200,000. The applicant submits the current construction application to VDH. In ranking of applications, preference is given to those that address problems of small, community waterworks with multi-jurisdictional support. Eligible activities may include: land purchase, options to purchase land, general site development costs, and dam upgrade and construction.

(3) Planning and Design Grants - Application must be postmarked by September 3, 2013.

Funding for waterworks planning and design needs. The application cannot exceed $50,000.

In ranking of applications, preference is given to those that address problems of small, community waterworks with multijurisdictional support. The applicant submits the current VDH planning and design application to VDH. To promote coordination of funding and streamline the process for applicants, grants are prioritized in accordance with rating criteria of the current DWSRF Program. For WSAG funding purposes only, up to 50 extra points are added to the DWSRF rating criteria relative to the Stress Index rank.

Eligible activities may include (but not be limited to): Capacity building activities addressing regionalization or consolidation, performance of source water quality and quantity studies, drilling test wells to determine source feasibility, income surveys, preliminary engineering planning, design and preparation of plans and specifications, or other similar technical assistance projects.

The VDH's WSAG Program Guidelines describes the features of the above opportunities for funding. Request the applications or program guidelines from Steve Pellei, PE, FCAP Director, telephone [phone], FAX (804) 864-7521, or postal mail Virginia Department of Health, Office of Drinking Water, 109 Governor Street, 6th Floor, Richmond, VA 23219. The applications are also accessible on the VDH website at http://www.vdh.virginia.gov/odw/financial/dwfundingprogramdetails.htm.

STATE LOTTERY DEPARTMENT

Director's Orders

The following Director's Orders of the State Lottery Department were filed with the Virginia Registrar of Regulations on December 20, 2012. The orders may be viewed at the State Lottery Department, 900 East Main Street, Richmond, VA, or at the office of the Registrar of Regulations, 910 Capitol Street, 2nd Floor, Richmond, VA.

Director's Order Number One Hundred Eighteen (12)

Virginia Lottery's "Monopoly^TM" And More 2nd Chance Official Sweepstakes Requirements (effective December 20, 2012)

Director's Order Number One Hundred Twenty-One (12)

Virginia's Instant Game Lottery 1402 "EZ $1040" Final Rules for Game Operation (effective December 6, 2012)

Director's Order Number One Hundred Thirty-Five (12)

Virginia's Instant Game Lottery 1384 "Money Bags" Final Rules for Game Operation (effective December 4, 2012)

Director's Order Number One Hundred Thirty-Seven (12)

Virginia's Instant Game Lottery 1399 "5X the Money" Final Rules for Game Operation (effective December 7, 2012)

Director's Order Number One Hundred Thirty-Nine (12)

Virginia's Instant Game Lottery 1370 "10X the Money" Final Rules for Game Operation (effective December 7, 2012)

Director's Order Number One Hundred Forty-Three (12)

Virginia's Instant Game Lottery 1387 "7-11-21®" Final Rules for Game Operation (effective December 7, 2012)

Director's Order Number One Hundred Forty-Four (12)

Virginia's Instant Game Lottery 1396 "Big Winning Numbers" Final Rules for Game Operation (effective December 7, 2012)

Director's Order Number One Hundred Forty-Five (12)

Virginia's Instant Game Lottery 1339 "Hot Chile Tripler" Final Rules for Game Operation (effective December 7, 2012)

VIRGINIA EMPLOYMENT COMMISSION

Notice of Periodic Review

Pursuant to Executive Order 14 (2010) and §§ 2.2-4007.1 and 2.2-4017 of the Code of Virginia, the Virginia Employment Commission is currently reviewing each of the regulations listed below to determine whether it should be terminated, amended, or retained in its current form. The review of each regulation will be guided by the principles in Executive Order 14 (2010) and § 2.2-4007.1 of the Code of Virginia. Each regulation will be reviewed to determine whether the regulation (i) is necessary for the protection of public health, safety, and welfare or for the economical performance of important governmental functions; (ii) minimizes the economic impact on small businesses in a manner consistent with the stated objectives of applicable law; and (iii) is clearly written and easily understandable.

16VAC5-10, Definitions and General Provisions

16VAC5-20, Unemployment Taxes

16VAC5-32, Required Records and Reports

16VAC5-42, Combined Employer Accounts

16VAC5-50, Employer Elections to Cover Multistate Workers

16VAC5-60, Benefits

16VAC5-70, Interstate and Multistate Claimants

16VAC5-80, Adjudication

The comment period begins January 14, 2013, and ends on March 6, 2013.

Comments may be submitted online to the Virginia Regulatory Town Hall at http://www.townhall.virginia.gov/L/Forums.cfm. Comments may also be sent to M. Coleman Walsh, Jr., Chief Administrative Law Judge, Virginia Employment Commission, 703 East Main Street, Room 126, Richmond, VA 23219, telephone [phone], FAX [phone], email [e-mail].

Comments must include the commenter's name and address (physical or email) information in order to receive a response to the comment from the agency. Following the close of the public comment period, a report of the periodic review will be posted on the Town Hall and published in the Virginia Register of Regulations.

STATE WATER CONTROL BOARD

Proposed Consent Order for George's Foods, L.L.C.

An enforcement action has been proposed for George's Foods, L.L.C. for violations in Rockingham County. A proposed consent order describes a settlement to resolve unpermitted discharge violations from the Harrisonburg Food Mill facility. A description of the proposed action is available at the Department of Environmental Quality office named below or online at www.deq.virginia.gov. Steven W. Hetrick will accept comments by email at [e-mail], FAX [phone], or postal mail at Department of Environmental Quality, Valley Regional Office, P.O. Box 3000, 4411 Early Road, Harrisonburg, VA 22801, from January 14, 2013, to February 13, 2013.

VIRGINIA CODE COMMISSION

Notice to State Agencies

Contact Information: Mailing Address: Virginia Code Commission, General Assembly Building, 201 North 9th Street, 2nd Floor, Richmond, VA 23219; Telephone: Voice [phone]; FAX (804) 692-0625; Email: [e-mail].

Meeting Notices: Section 2.2-3707 C of the Code of Virginia requires state agencies to post meeting notices on their websites and on the Commonwealth Calendar at http://www.virginia.gov/.

Cumulative Table of Virginia Administrative Code Sections Adopted, Amended, or Repealed: A table listing regulation sections that have been amended, added, or repealed in the Virginia Register of Regulations since the regulations were originally published or last supplemented in the print version of the Virginia Administrative Code is available at http://register.dls.virginia.gov/cumultab.htm.

Filing Material for Publication in the Virginia Register of Regulations: Agencies use the Regulation Information System (RIS) to file regulations and related items for publication in the Virginia Register of Regulations. The Registrar's office works closely with the Department of Planning and Budget (DPB) to coordinate the system with the Virginia Regulatory Town Hall. RIS and Town Hall complement and enhance one another by sharing pertinent regulatory information.