Va. Code Ann. tit. 15.2, ch. 27

in effect

Va. Code Ann. § 15.2-2700 Declaration of policy, findings and purpose

The General Assembly hereby finds and determines that insurance protection is essential to the proper functioning of political subdivisions; that the resources of political subdivisions are burdened by the high cost of and frequent inability to secure such protection through standard carriers; that proper risk management requires the spreading of risk so as to minimize fluctuation in insurance needs; and that, therefore, all contributions of financial and administrative resources made by a political subdivision pursuant to an intergovernmental contract as authorized by this chapter are made for a public and governmental purpose, and that such contributions benefit each contributing political subdivision. 1986, cc. 520, 556, § 15.1-503.4:1; 1997, c. 587.

Va. Code Ann. § 15.2-2701 Definition

For the purposes of this chapter, "political subdivision" means any county, city, or town, school board, Transportation District Commission, or any other local governmental authority or local agency or public service corporation owned, operated or controlled by a locality or local government authority, with power to enter into contractual undertakings. 1986, cc. 520, 556, § 15.1-503.4:2; 1997, c. 587.

Va. Code Ann. § 15.2-2702 Commonwealth and agencies thereof authorized to exercise powers under this chapter

The Commonwealth, or any agency of the Commonwealth, is authorized to exercise any of the powers granted to political subdivisions by this chapter, and when so doing shall be subject to the provisions of this chapter; provided, no agency of the Commonwealth may without the prior written consent of the Governor join in any self-insurance pool provided for in this chapter where, pursuant to the provisions of Article 5 (§ 2.2-1832 et seq.) of Chapter 18 of Title 2.2, the Division of Risk Management has established an insurance plan providing the type of insurance coverage that would be provided to such state agency under the provisions of this chapter. However, nothing contained in this chapter shall affect any insurance plan now or hereafter adopted pursuant to the provisions of Article 5 (§ 2.2-1832 et seq.) of Chapter 18 of Title 2.2. 1987, c. 651, § 15.1-503.4:2.1; 1997, c. 587; 2000, cc. 618 , 632 .

Va. Code Ann. § 15.2-2703 Group self-insurance pools authorized

A. Any political subdivision of this Commonwealth may, by contract with one or more political subdivisions of this Commonwealth or of another state, form a group self-insurance pool to provide for joint or cooperative action relative to their financial and administrative resources for the purpose of providing to the participating political subdivisions risk management services as well as insurance coverage for pool members and employees of pool members, for acts or omissions arising out of the scope of their employment, including any or all of the following: 1. Casualty insurance, including workers' compensation under Title 65.2, employers' liability, general, professional and public officials liability coverage; 2. Property insurance, including marine insurance and inland marine and transportation insurance coverage; 3. Group life, accident and health coverages including hospital, medical, surgical and dental benefits to the employees of member political subdivisions and their dependents; 4. Automobile insurance, including motor vehicle liability insurance coverage and collision and security for motor vehicles owned or operated, as required by Title 46.2, and protection against other liability and loss associated with the ownership and use of motor vehicles; 5. Surety and fidelity insurance coverage; and 6. Umbrella and excess insurance coverages. B. A group self-insurance pool may also provide all insurance coverages authorized by this section to (i) any separate corporation established by one or more counties, cities, towns, or school boards, as permitted by law, that is supported wholly or principally by local public funds or utilize federal funds for local community housing projects and (ii) other corporations recognized under § 501(c)(3) or 501(c)(4) of the Internal Revenue Code that are supported wholly or principally by local public funds or utilize federal funds for local community housing projects and that are recognized by a political subdivision and authorized by law to perform a government function. C. A group self-insurance pool may obtain excess insurance or reinsurance of risks, and may cede and sell the risks for coverages set forth in this section. D. Member political subdivisions that join together for the purpose of pooling their workers' compensation liabilities pursuant to Title 65.2 shall execute a written agreement, which has been approved by the State Corporation Commission under which each member agrees to be jointly and severally liable for the other members that are also party to such agreement. In addition to the rights the pool may have under such agreements, in the event of failure of the pool to enforce such rights after reasonable notice to the pool, the State Corporation Commission shall have the right independently to enforce on behalf of the pool the joint and several liability of its members under this title and the liability of members for any unpaid contributions and assessments. The State Corporation Commission shall be entitled to recover its expenses and attorney fees. However, no such agreement to be jointly and severally liable, nor membership in a group self-insurance pool as defined in this section, shall relieve an employer of the liabilities imposed under Title 65.2 with respect to its employees. Members of a group self-insurance pool created pursuant to this title and licensed by the State Corporation Commission shall not be jointly and severally liable for unpaid contributions or assessments for any line of business other than workers' compensation offered by the group self-insurance pool. E. Subject to the approval of the State Corporation Commission and with such conditions as such Commission may require, a group self-insurance association formed pursuant to § 65.2-802 , consisting solely of political subdivisions, may merge with a group self-insurance pool if the group self-insurance pool assumes in full all obligations of such group self-insurance association originally licensed pursuant to § 65.2-802 . 1986, cc. 520, 556, § 15.1-503.4:3; 1997, c. 587 ; 2009, cc. 285 , 336 ; 2022, c. 439 .

Va. Code Ann. § 15.2-2704 Powers of group self-insurance pool; self-insurer for motor vehicle security; surety

A group self-insurance pool, for the purposes of carrying on the business of the group self-insurance pool whether or not a body corporate, shall have the power to sue and be sued, to make contracts, to hold and dispose of real and personal property, and to borrow money, contract debts, and pledge assets in the name of the group self-insurance pool. The assets of any group self-insurance pool established pursuant to this chapter shall be invested in those securities and investments permitted by regulation adopted by the State Corporation Commission for group self-insurance pools. A group self-insurance pool shall be deemed a self-insurer for motor vehicle security under § 46.2-368 . Members of the pool participating in the motor vehicle self-insurance provided by the pool shall be deemed to meet the requirements of security as required and an application for a certificate of self-insurance under § 46.2-368 shall not be required. Additionally, a group self-insurance pool shall not be subject to the provisions of § 38.2-2206 relating to uninsured motorist coverage unless it elects by resolution of its governing authority to provide such coverage to its pool members. The provisions of any statute or charter requiring a public official to post bond or obtain a surety bond, the premium on which may lawfully be paid by a public agency of the Commonwealth, may be satisfied with surety or fidelity insurance coverage furnished by a group self-insurance pool organized under this chapter, including any deductible amount or other portion self-insured by the public agency itself. The power to enter into intergovernmental contracts under § 15.2-2703 specifically includes the power to establish the pool as a separate legal or administrative entity for purposes of effectuating group self-insurance pool agreements. 1986, cc. 520, 556, § 15.1-503.4:4; 1997, c. 587; 2003, c. 566 .

Va. Code Ann. § 15.2-2705 Required provisions in contract; election of governing authority; financial plan; management plan

Any intergovernmental contract entered into pursuant to this chapter for the purpose of establishing a group self-insurance pool shall provide: 1. For election by pool members of a governing authority for the pool, which may be a board of directors, a majority of whom shall be elected or appointed officials of pool members. 2. A financial plan setting forth in general terms: a. The insurance coverages to be offered by the group self-insurance pool, applicable deductible levels, and the maximum level of claims which the pool will self-insure; b. The amount of cash reserves to be set aside for the payment of claims; c. The amount of insurance to be purchased by the pool to provide coverage over and above the claims which are not to be satisfied directly from the pool's resources; and d. The amount, if any, of aggregate excess insurance coverage to be purchased and maintained in the event that the group self-insurance pool's resources are exhausted in a given fiscal period. 3. 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 funds and reserves by exposure areas; and e. Such other provisions as are necessary or desirable for the operation of the pool. 1986, cc. 520, 556, § 15.1-503.4:5; 1997, c. 587.

Va. Code Ann. § 15.2-2706 State Corporation Commission approval required

The formation and operation of a group self-insurance pool under this section shall be subject to approval by the State Corporation Commission which may, after notice and hearing, establish reasonable requirements and regulations for the approval and monitoring of such pools, including prior approval of pool administrators and provisions for periodic examinations of financial condition. The Commission may disapprove an application for the formation of a group self-insurance pool, and may suspend or withdraw such approval whenever it finds that such applicant or pool: 1. Has refused to submit its books, papers, accounts, or affairs to the reasonable inspection of the Commission or its representative; 2. Has refused, or its officers or agents have refused, to furnish satisfactory evidence of its financial and business standing or solvency; 3. Is insolvent, or is in such condition that its further transaction of business in the Commonwealth is hazardous to its members and creditors in the Commonwealth, and to the public; 4. Has refused or neglected to pay a valid final judgment against it within sixty days after its rendition; 5. Has violated any law of the Commonwealth or has violated or exceeded the powers granted by its members; 6. Has failed to pay any fees, taxes or charges imposed in the Commonwealth within sixty days after they are due and payable, or within sixty days after final disposition or any legal contest with respect to liability therefor; or 7. Has been found insolvent by a court of any other state, or by the Insurance Commissioner or other proper officer or agency of any other state, and has been prohibited from doing business in such state. 1986, cc. 520, 556, § 15.1-503.4:6; 1997, c. 587.

Va. Code Ann. § 15.2-2707 Filing of annual financial statements, deficit correction financial plan with State Corporation Commission required

Each group self-insurance pool created in the Commonwealth shall file with the State Corporation Commission and with the members of the pool audited financial statements certified by an independent certified public accountant within 120 days after the end of the pool's fiscal year. If a group self-insurance pool fails to file the audited financial statements as required, the Commission may perform the audit and the group self-insurance pool shall reimburse the Commission for the cost of the audit. The Commission shall prescribe a uniform reporting format for the preparation of pool-audited financial statements and shall also devise a uniform accounting system to be used by group self-insurance pools. The working papers of the certified public accountant and other records pertaining to the preparation of the audited financial statements may be reviewed by the Commission. If a group self-insurance pool is in a deficit condition, the group self-insurance pool shall promptly file with the Commission a financial plan to correct the deficit condition. If the plan is found to be unacceptable by the Commission and written notice thereof is given to the governing authority of the pool, delinquency proceedings may be commenced and conducted by the Commission in accordance with the provisions of Chapter 15 (§ 38.2-1500 et seq.) of Title 38.2. 1986, cc. 520, 556, § 15.1-503.4:7; 1997, c. 587.

Va. Code Ann. § 15.2-2708 Exemptions from disclosure

Information regarding that portion of the funds or liability reserve of a pool established for purposes of satisfying a specific pending and unresolved claim or cause of action shall be exempt from disclosure under the Virginia Freedom of Information Act (§ 2.2-3700 et seq.). In a claim or action against any group self-insurance pool, a person shall not be entitled to discover that portion of the funds or liability reserve established for purposes of satisfying a claim or cause of action, except that the reserve is discoverable in any supplemental or ancillary proceeding to enforce a judgment. 1986, cc. 520, 556, § 15.1-503.4:8; 1997, c. 587.

Va. Code Ann. § 15.2-2709 Group self-insurance pool not an insurer

Any group self-insurance pool organized pursuant to this chapter is not an insurance company or insurer under the laws of the Commonwealth. The development, administration, and provision of group self-insurance programs and coverages authorized by this chapter by the governing authority created to administer the pool does not constitute doing an insurance business. However, a group self-insurance pool shall be subject to the provisions of Chapters 5, Unfair Trade Practices and 6, Insurance Information and Privacy Protection Act of Title 38.2. 1986, cc. 520, 556, § 15.1-503.4:9; 1997, c. 587.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://law.lis.virginia.gov/vacode/title15.2/chapter27/Fetched: 10/16/2026