Va. Code Ann. tit. 38.2, ch. 11

in effect

Va. Code Ann. § 38.2-1100 Scope of chapter

The provisions of this chapter shall apply solely to captive insurers or association captive insurers domiciled in this Commonwealth. 1980, c. 665, § 38.1-916; 1986, c. 562.

Va. Code Ann. § 38.2-1101 Definitions

As used in this chapter: "Affiliated company" means (i) any company that directly or indirectly owns, controls, or holds, with power to vote, ten percent or more of the outstanding voting securities of a pure captive insurer, or (ii) any company of which ten percent or more of the voting securities are directly or indirectly owned, controlled, or held, with power to vote, by a parent, subsidiary, or associated company. "Associated company" means any company in the same corporate system with a pure captive insurer. "Association captive insurer" means any domestic insurer transacting the business of insurance and reinsurance only on risks, hazards, and liabilities of the members of an insurance association. "Captive insurer" means any pure captive insurer or any association captive insurer. "Insurance association" means any group of individuals, corporations, partnerships, associations, or governmental units or agencies whose members collectively own, control, or hold with power to vote all of the outstanding voting securities of an association captive insurer. "Parent" means a corporation, partnership, governmental unit or agency, or individual who directly or indirectly owns, controls or holds, with power to vote, more than fifty percent of the outstanding voting securities of a pure captive insurer. "Pure captive insurer" means any domestic insurer transacting the business of insurance and reinsurance only on risks, hazards, and liabilities of its parent, subsidiary companies of its parent, and associated and affiliated companies. "Subsidiary company" means any corporation of which fifty percent or more of the outstanding voting securities are directly or indirectly owned, controlled, or held, with power to vote, by a parent or by a company that is a subsidiary of the parent. 1980, c. 665, § 38.1-917; 1981, c. 494; 1986, c. 562.

Va. Code Ann. § 38.2-1102 Application for license; limitations on authority

A. No captive insurer shall transact any insurance business in this Commonwealth unless (i) it is permitted to do so by its articles of incorporation or charter and (ii) it procures a license to transact the business of insurance from the Commission in accordance with Article 5 (§ 38.2-1024 et seq.) of Chapter 10 of this title. The license shall be renewed in accordance with § 38.2-1025 . A captive insurer may only be licensed to write the classes of insurance described in §§ 38.2-110 through 38.2-120 , 38.2-124 , 38.2-126 and reinsure in accordance with § 38.2-136 . B. 1. The Commission shall not issue a license to transact the business of insurance in this Commonwealth to any pure captive insurer until it is satisfied that the total insurance coverage necessary to insure all risks, hazards, and liabilities would develop, in the aggregate, gross annual premiums of at least $500,000. 2. The Commission shall not issue a license to transact the business of insurance in this Commonwealth to any association captive insurer until it is satisfied (i) that the total insurance coverage necessary to insure all risks, hazards, and liabilities would develop, in the aggregate, gross annual premiums of at least one million dollars and (ii) that its insurance association has been in existence for at least one year. The Commission may waive the requirement that the insurance association be in existence for at least 1 year if the association captive insurer satisfies the Commission that each member of the insurance association would have a gross annual premium in excess of $100,000. C. No captive insurer may write classes of personal insurance coverage for individuals unless the individual is a parent. D. No captive insurer may write insurance or reinsurance on personally owned motor vehicles or homeowners' insurance or any component of them. 1980, c. 665, § 38.1-918; 1986, c. 562.

Va. Code Ann. § 38.2-1103 Name

A captive insurer shall not adopt the name of any existing company transacting a similar business or any name so familiar that it may mislead the public. 1980, c. 665, § 38.1-919; 1986, c. 562.

Va. Code Ann. § 38.2-1104 Formation; licensure after examination; amendment of articles; principal and home office

A. Captive insurers with shares of capital stock shall be incorporated under Article 3 (§ 13.1-618 et seq.) of Chapter 9 of Title 13.1 as modified by this title and, except as provided in this title, shall be subject to all the general restrictions and shall have all the general powers imposed and conferred upon such corporations by law. B. Captive insurers without shares of capital stock shall be incorporated under Article 3 (§ 13.1-818 et seq.) of Chapter 10 of Title 13.1, as modified by this title and, except as provided in this title, shall be subject to all the general restrictions and shall have all the general powers imposed and conferred upon such corporations by law. C. 1. No charter shall be granted to any captive insurer until the Commission receives a certificate from the State Treasurer showing that (i) cash, bonds or other securities in the amount required by § 38.2-1105 have been deposited or (ii) an irrevocable letter of credit in that amount has been deposited and is to be held under the provisions, terms and conditions set forth in § 38.2-1105 . 2. When the certificate has been presented to the Commission, the Commission may make or direct to be made an examination of the captive insurer. 3. The Commission shall issue a license if the captive insurer complies with this chapter. D. Any amendment of the articles of incorporation of a captive insurer shall be pursuant to Article 11 (§ 13.1-705 et seq.) of Chapter 9 or of Article 10 (§ 13.1-884 et seq.) of Chapter 10 of Title 13.1. E. The principal and home office of every captive insurer shall be in this Commonwealth. 1980, c. 665, § 38.1-920; 1986, c. 562.

Va. Code Ann. § 38.2-1105 Deposit of minimum capital; letter of credit instead of deposit

A. No captive insurer shall be issued a license to transact the business of insurance in this Commonwealth until it has met the requirements of Article 5 (§ 38.2-1024 et seq.) of Chapter 10 of this title. B. The captive insurer shall deposit with the State Treasurer cash, bonds, or securities equal to the minimum capital or, if a mutual insurer, fifty percent of the minimum surplus, as required by Article 5 (§ 38.2-1024 et seq.) of Chapter 10 of this title. The State Treasurer shall accept an irrevocable letter of credit, in a form acceptable to the Commission, on behalf of a captive insurer instead of requiring the above-mentioned deposit. The letter of credit shall be issued by a national or state bank and approved by the Commission. C. The deposit or letter of credit shall be held by the State Treasurer for the benefit of all policyholders and creditors wherever located and shall be administered as provided in Article 7 (§ 38.2-1045 et seq.) of Chapter 10 of this title. D. The State Treasurer shall furnish to the captive insurer a certificate certifying that the State Treasurer holds the securities or letters of credit in trust for the benefit of the policyholders and creditors of the captive insurer. 1980, c. 665, § 38.1-921; 1986, c. 562.

Va. Code Ann. § 38.2-1106 Minimum surplus in form of letter of credit

A. Any licensed captive insurer may, subject to the approval of the Commission, hold all or a portion of (i) the minimum surplus as set forth in Article 5 (§ 38.2-1024 et seq.) of Chapter 10 in the form of an irrevocable letter of credit, if a stock insurer, or (ii) fifty percent of minimum surplus not subject to subsection B of § 38.2-1105 , if a mutual insurer. The letter of credit shall be issued by a national or state bank and approved by the Commission. B. Any letter of credit permitted pursuant to this section shall be held by the State Treasurer for the benefit of all policyholders and creditors and shall be administered as provided in Article 7 (§ 38.2-1045 et seq.) of Chapter 10 of this title. 1980, c. 665, § 38.1-922; 1986, c. 562.

Va. Code Ann. § 38.2-1107 Membership in rating organizations

No captive insurer shall be required to join a rating organization. 1980, c. 665, § 38.1-926; 1986, c. 562.

Va. Code Ann. § 38.2-1108 Tax on premiums collected

All captive insurers transacting business in this Commonwealth shall pay taxes as provided for in Chapter 25 of Title 58.1, except that taxes shall be paid on risks and property situated in any state in which the captive insurer is not licensed and upon which no premium tax is otherwise paid or payable. 1980, c. 665, § 38.1-928; 1986, c. 562.

Va. Code Ann. § 38.2-1109 Applicability of other provisions of title

Except as otherwise provided, all laws of this title that apply to insurers writing the same classes of insurance that captive insurers are permitted to write, shall apply in every respect to captive insurers. 1980, c. 665, § 38.1-930; 1986, c. 562.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://law.lis.virginia.gov/vacode/title38.2/chapter11/Fetched: 10/16/2026