HB339: Foreign insurers; requires SCC to issue a license authorizing insurer to transact business in State.
Be it enacted by the General Assembly of Virginia:
1. That §§ 38.2-316, 38.2-1024, 38.2-1028, 38.2-1029, 38.2-1400, and 38.2-1902 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 38.2-1027.1 as follows:
§ 38.2-316. Policy forms to be filed with Commission; notice of approval or disapproval; exceptions.
A. No policy of life insurance, industrial life insurance, variable life insurance, modified guaranteed life insurance, group life insurance, accident and sickness insurance, or group accident and sickness insurance; no annuity, modified guaranteed annuity, pure endowment, variable annuity, group annuity, group modified guaranteed annuity, or group variable annuity contract; no health services plan, legal services plan, dental or optometric services plan, or health maintenance organization contract; no dental plan organization dental benefit contract; and no fraternal benefit certificate nor any certificate or evidence of coverage issued in connection with such policy, contract, or plan issued or issued for delivery in Virginia shall be delivered or issued for delivery in this Commonwealth unless a copy of the form has been filed with the Commission. In addition to the above requirement, no policy of accident and sickness insurance shall be delivered or issued for delivery in this Commonwealth unless the rate manual showing rates, rules, and classification of risks applicable thereto has been filed with the Commission.
B. Except as provided in this section, no application form shall be used with the policy or contract and no rider or endorsement shall be attached to or printed or stamped upon the policy or contract unless the form of such application, rider or endorsement has been filed with the Commission. No individual certificate and no enrollment form shall be used in connection with any group life insurance policy, group accident and sickness insurance policy, group annuity contract, or group variable annuity contract unless the form for the certificate and enrollment form have been filed with the Commission.
C. 1. None of the policies, contracts, and certificates
specified in subsection A of this section shall
be delivered or issued for delivery in this Commonwealth and no applications,
enrollment forms, riders, and endorsements shall be used in connection with the
policies, contracts, and certificates unless the forms thereof have been
approved in writing by the Commission as conforming to the requirements of this
title and not inconsistent with law.
2. In addition to the above requirement, no premium rate change applicable to individual accident and sickness insurance policies, subscriber contracts of health services plans, dental or optometric services plans, or fraternal benefit contracts providing individual accident and sickness coverage as authorized in § 38.2-4116 shall be used unless the premium rate change has been approved in writing by the Commission. No premium rate change applicable to individual or group Medicare supplement policies shall be used unless the premium rate change has been approved in writing by the Commission.
D. The Commission may disapprove or withdraw approval of the
form of any policy, contract or certificate specified in subsection A of this section, or of any application, enrollment form, rider or
endorsement, if the form:
1. Does not comply with the laws of this Commonwealth;
2. Has any title, heading, backing or other indication of the contents of any or all of its provisions that is likely to mislead the policyholder, contract holder or certificate holder; or
3. Contains any provisions that encourage misrepresentation or are misleading, deceptive or contrary to the public policy of this Commonwealth.
E. Within 30 days after the filing of any form requiring approval, the Commission shall notify the organization filing the form of its approval or disapproval of the form which has been filed, and, in the event of disapproval, its reason therefor. The Commission, at its discretion, may extend for up to an additional 30 days the period within which it shall approve or disapprove the form. Any form received but neither approved nor disapproved by the Commission shall be deemed approved at the expiration of the 30 days if the period is not extended, or at the expiration of the extended period, if any; however, no organization shall use a form deemed approved under the provisions of this section until the organization has filed with the Commission a written notice of its intent to use the form together with a copy of the form and the original transmittal letter thereof. The notice shall be filed in the offices of the Commission at least 10 days prior to the organization's use of the form.
F. If the Commission proposes to withdraw approval previously given or deemed given to the form of any policy, contract or certificate, or of any application, rider or endorsement, it shall notify the insurer in writing at least 15 days prior to the proposed effective date of withdrawal giving its reasons for withdrawal.
G. Any insurer or fraternal benefit society aggrieved by the disapproval or withdrawal of approval of any form may proceed as indicated in § 38.2-1926.
H. This section shall not apply to any:
1. Any special rider or endorsement on any policy, except an accident and sickness insurance policy that relates only to the manner of distribution of benefits or to the reservation of rights and benefits under such policy, and that is used at the request of the individual policyholder, contract holder or certificate holder; or
2. A policy of insurance issued or issued for delivery by a foreign insurer to the extent provided in subsection E of § 38.2-1027.1.
I. The Commission may exempt any categories of such policies, contracts, and certificates and any applicable rate manuals from (i) the filing requirements, (ii) the approval requirements of this section, or (iii) both such requirements. The Commission may modify such requirements, subject to such limitations and conditions which the Commission finds appropriate. In promulgating an exemption, the Commission may consider the nature of the coverage, the person or persons to be insured or covered, the competence of the buyer or other parties to the contract, and other criteria the Commission considers relevant.
J. Pursuant to the authority granted by § 38.2-223, the Commission may promulgate such rules and regulations as it may deem necessary to set standards for policy and other form submissions required by this section or § 38.2-3501.
§ 38.2-1024. License required to transact the business of insurance; application fee requirements for license.
A. No insurer unless authorized pursuant to Chapter 48 (§
38.2-4806 et seq.) of this title shall transact the
business of insurance in this Commonwealth until it has obtained a license from
the Commission. For a foreign or alien insurer, this license shall be in
addition to the certificate of authority required by § 38.2-1027. Each
application for a license to transact the business of insurance in this
Commonwealth shall be accompanied by a nonrefundable license application fee of
$500. The fee shall be collected by the Commission and paid directly into the
state treasury and credited to the Bureau of Insurance's maintenance fund as
provided in subsection B of § 38.2-400. The license shall be signed by a member
or other duly authorized agent of the Commission and shall expire on the next
June 30 after the date on which it becomes effective, subject to renewal
pursuant to § 38.2-1025.
B. The Commission shall not grant a license to do the business of insurance in this Commonwealth to any insurer until it is satisfied that, from the evidence it requires under uniform procedures suitable to and applied equally to all classes of insurers, unless the insurer is a foreign insurer that is granted a license pursuant to the provisions of § 38.2-1027.1, the insurer:
1. Has paid all fees, taxes, and charges required by law;
2. Has made any deposit required by this title;
3. Has the minimum capital and surplus if a stock insurer, the minimum surplus if a mutual or a reciprocal insurer, and the minimum trusteed surplus if an alien insurer, prescribed in this title for insurers transacting the same class of insurance;
4. Has filed a financial statement or statements and any reports, certificates or other documents the Commission considers necessary to secure a full and accurate knowledge of its affairs and financial condition;
5. Is solvent and its financial condition, method of operation, and manner of doing business are such as to satisfy the Commission that it can meet its obligations to all policyholders; and
6. Has otherwise complied with all the requirements of law.
§ 38.2-1027.1. Interstate reciprocal licensing.
A. Notwithstanding any licensing requirements imposed on insurers under this title, including §§ 38.2-1028 through 38.2-1031, the Commission shall issue a license to a foreign insurer authorizing it to transact the business of insurance within the Commonwealth if:
1. The foreign insurer presents proof in a form acceptable to the Commission that the foreign insurer is currently licensed as a domestic insurer and is in good standing in its home state;
2. The foreign insurer has submitted the proper request for licensure and has paid the fees required by § 38.2-1024;
3. The foreign insurer has submitted or transmitted to the Commission the application for licensure that the foreign insurer submitted to its home state; and
4. The foreign insurer's home state issues licenses to insurers incorporated or organized under the laws of the Commonwealth on the same basis.
B. The Commission shall not condition its issuance of a license to a foreign insurer pursuant to this section on whether the laws of its home state are substantially similar to the licensure requirements imposed on domestic insurers under this title.
C. A license issued by the Commission to a foreign insurer pursuant to the provisions of this section shall authorize the foreign insurer to write only the classes of insurance that it is authorized to write in its home state, as provided in the certificate of the supervising insurance official of the foreign insurer's home state filed with the Commission as required pursuant to § 38.2-1033.
D. The Commissioner is authorized to enter into agreements with the supervising insurance official of other states for reciprocal licensure of insurers in accordance with the provisions of this section.
E. A foreign insurer licensed pursuant to subsection A shall not be required to file with the Commission, or to receive approval from the Commission for, policy forms and rates used in connection with a class of insurance that the insurer is authorized to write in its home state, provided that (i) the supervising insurance official of the foreign insurer's home state certifies to the Commission that the insurer has received all necessary approvals required under the laws of that state to use such policy forms and rates in connection with the writing of such insurance in that state or (ii) the policy form relates to a Product, as defined in § 38.2-6200, that has been approved by the Interstate Insurance Product Regulation Commission established pursuant to the Interstate Insurance Product Regulation Compact to which the Commonwealth is a member as set forth in Chapter 62 (§ 38.2-6200 et seq.).
F. This section shall not be construed to exempt a foreign insurer licensed pursuant to subsection A from the requirements of § 38.2-1027.
§ 38.2-1028. Additional licensing requirements for stock insurers.
No stock insurer shall be licensed to transact the business of
insurance in this Commonwealth unless it has fully paid in paid-in
capital stock of at least one $1
million dollars and surplus of at least three
$3 million dollars.
The requirements of this section
shall not apply to a foreign insurer licensed pursuant to § 38.2-1027.1.
§ 38.2-1029. Additional licensing requirements for mutual insurers.
No mutual insurer shall be licensed to transact the business
of insurance in this Commonwealth unless it has a surplus of at least $1,600,000- $1.6 million. The
requirements of this section
shall not apply to a foreign insurer licensed pursuant to § 38.2-1027.1.
§ 38.2-1400. Scope and purpose of chapter.
This chapter applies to and regulates the investments of all
domestic insurers as defined in this chapter. Upon petition to, and approval
by, the Commission, any one or more provisions of this chapter shall not apply
to a domestic insurer in receivership in this Commonwealth pursuant to Chapter
15 (§ 38.2-1500 et seq.) of this title. A foreign or alien
insurer may invest its funds and assets in any investments that are permitted
by the laws of its state or country of domicile and are of the same general
character and quality as those authorized under this chapter. A foreign or
alien insurer whose domiciliary jurisdiction does not regulate the investments
of its insurers shall be subject to the provisions of this chapter; however, the provisions of this chapter shall not
apply to a foreign insurer licensed pursuant to § 38.2-1027.1.
§ 38.2-1902. Scope of chapter.
A. Except as provided in subsection B of this section,
this chapter applies to the classes of insurance defined in §§ 38.2-110 through
38.2-122, 38.2-124 through 38.2-128 and 38.2-130 through 38.2-133.
B. This chapter does not apply to:
1. Insurance written through the Virginia Workers'
Compensation Plan pursuant to Chapter 20 (§ 38.2-2000 et seq.) of this title;
2. Insurance on a specific risk as provided in § 38.2-1920;
3. Reinsurance, other than joint reinsurance, to the extent stated in § 38.2-1915;
4. Life insurance as defined in § 38.2-102;
5. Annuities as defined in §§ 38.2-106 and 38.2-107;
6. Accident and sickness insurance as defined in § 38.2-109;
7. Title insurance as defined in § 38.2-123;
8. Insurance of vessels or craft used primarily in a trade or business, their cargoes, marine builders' risks and marine protection and indemnity;
9. Insurance against loss of or damage to hulls of aircraft, including their accessories and equipment, or against liability, other than workers' compensation and employers' liability, arising out of the ownership, maintenance or use of aircraft;
10. Automobile bodily injury and property damage liability insurance issued to: (i) any motor carrier of property who is required to file such insurance with the Department of Motor Vehicles pursuant to § 46.2-2053 or any amendment to that section; or (ii) any motor carrier of property required by 49 U.S.C.A. § 315, or any rule or regulation prescribed by the Interstate Commerce Commission pursuant to 49 U.S.C.A. § 315, to file such insurance with the Interstate Commerce Commission;
11. Insurance written through the Virginia Automobile Insurance Plan. However, § 38.2-1905 shall apply to insurance written through the Plan;
12. Insurance provided pursuant to Chapter 27 (§ 38.2-2700 et
seq.) of this title;
13. Home protection contracts as defined by § 38.2-2600 and their rates until such time as the Commission determines there is sufficient competition in the industry as provided by § 38.2-2608.
C. This chapter shall not apply to any class of insurance
written (i) by any mutual assessment property and casualty insurance company
organized and operating under the laws of this Commonwealth and doing business
only in this Commonwealth or; (ii) by any mutual insurance
company or association organized under the laws of this Commonwealth,
conducting business only in this Commonwealth, and issuing only policies
providing for perpetual insurance; or (iii) by a
foreign insurer to the extent provided in subsection E of §
38.2-1027.1.
2. That the provisions of this act shall become effective on January 1, 2011.