A Durham, N.C.-based insurance company could have its license to sell insurance in Virginia suspended if it cannot improve its financial condition.

The Virginia State Corporation Commission Bureau of Insurance ordered North Carolina Mutual Life Insurance Co. to “take notice” of the shortfall in its surplus.

The insurer reported to regulators that its surplus fell to $7.98 million, from $12.1 million one year earlier. The decrease of greater than 50% exceeds the statutory amount allowed, regulators said.

North Carolina Mutual Life Insurance reported for the year ending June 30 that it had a net loss of $3,736, 990.

Virginia insurance law permits regulators to intervene if a company’s financial condition appears as if it could become “hazardous.”