CODE OF VIRGINIA

DEPOSIT OF FUNDS; FIDELITY BOND (§ 55-514.2)

A. All funds deposited with a managing agent shall be handled in a fiduciary
capacity and shall be kept in a fiduciary trust account in a federally insured
financial institution separate from other assets of the managing agent. The
funds shall be the property of the association and shall be segregated for each
account in the records of the managing agent in a manner that permits the funds
to be identified on an individual association basis.

B. Any association collecting assessments for common expenses shall obtain and
maintain a blanket fidelity bond or employee dishonesty insurance policy
insuring the association against losses resulting from theft or dishonesty
committed by the officers, directors, or persons employed by the association, or
committed by any managing agent or employees of the managing agent. Such bond or
insurance policy shall provide coverage in an amount equal to the lesser of $ 1
million or the amount of the reserve balances of the association plus one-fourth
of the aggregate annual assessment income of such association. The minimum
coverage amount shall be $ 10,000. The board of directors or managing agent may
obtain such bond or insurance on behalf of the association.

HISTORY: 2007, cc. 696, 712; 2008, cc. 851, 871.