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2006 SESSION
Be it enacted by the General Assembly of Virginia:
1. That § 51.1-1139 of the Code of Virginia is amended and reenacted as follows:
§ 51.1-1139. Policies to provide for accounting to Board; advance premium deposit reserve.
A. Each policy insurance product purchased by
the Board or contract for administrative services related to a self-funded
product shall provide for an accounting to the Board not later than 120
days after the end of each policy product year. The For
an insurance product, the accounting shall include (i) the amounts of
premiums actually accrued under the policy during the policy year, (ii) the
total amount of all claim charges incurred during the policy year, and (iii)
the amounts of the insurer's expenses and risk charges for the policy year
amount of fees accrued under the policy during the year plus the total amount
of all claim charges incurred during the policy year. For a self-insured
product, the accounting shall include the total amount of all claim charges
incurred during the product year, the total amount of third party administrator
expenses, and the total amount of other charges for administrative services.
B. Any portion of the excess of the total of clause A (i) over
the sum of clauses A (ii) and clause A (iii) may, with the approval
of the Board, be held by the insurance company in an advance premium deposit
reserve to be used by the company for charges under the policy only. Any
expenses incurred by the Board in connection with the administration of the
disability benefits provisions of the program may be deducted from the advance
premium deposit reserve. The advance premium deposit reserve shall bear
interest at a rate to be determined in advance of each policy year by the
insurance company. The rate shall be subject to Board approval as being
consistent with the rates generally used by the company for similar funds held
under other disability insurance policies. Any portion of the excess not held
by the insurance company shall be held by the Board to be used for charges
under the policy only. If the Board determines that the advance premium deposit
reserve, together with any portion of the excess accumulated and held by the
Board, has attained an amount estimated to make satisfactory provision for
adverse fluctuations in future charges under the policy, any further excess
shall inure to the benefit of the Commonwealth as determined by the Board.
C. For purposes of this section, the insurance company may combine and consolidate the policies issued by it as directed by the Board.