TITLE 38.2. INSURANCE.

§ 38.2-323 added.
Insurance; countersignature requirement prohibited. Prohibits the inclusion in an insurance policy of a provision that deems the policy to be invalid if it is not signed or countersigned by an insurance agent or company representative. SB 182; CH. 70.

§ 38.2-401 amended.
Fire Services Grant Program; expenditure of funds. Provides that moneys allocated from the Fire Programs Fund to the Fire Services Grant Program and the Dry Hydrant Grant Program shall be used as grants to provide regional fire services training facilities, to finance the Virginia Fire Incident Reporting System and to build or repair burn buildings, and for no other purpose. HB 704; CH. 389.

§§ 38.2-513.1, 38.2-604, and 38.2-604.1 amended.
Insurance transactions; privacy. Requires a depository institution selling insurance to provide purchasers with a statement that the insurance policy is not a deposit, is not FDIC-insured, is not guaranteed by the bank, and involves investment risk, where appropriate. Currently, the requirement applies only where the insurance is sold in connection with the lending of money or extension of credit. The measure also clarifies that the simplified notice of the insurer's privacy policy must be sent both at issuance of the policy and annually thereafter. The provision regarding giving annual notices is amended to be consistent with the Gramm-Leach-Bliley Act. Finally, duplicative language is deleted. SB 240; CH. 76.

§ 38.2-1413 amended.
Insurance; investments. Increases the amount of assets a domestic insurer can invest in cash, cash equivalents, and certain short-term investments of one depository, obligor or issuer from five percent to 10 percent of its total admitted assets. The restriction that investments per obligor or per issuer do not exceed 20 percent of the insurer's surplus to policyholders is unchanged. SB 188; CH. 73.

§§ 38.2-1426, 38.2-1427.2, 38.2-1446, 38.2-4008, and 38.2-4111 amended.
Insurance regulation. Simplifies and clarifies the responsibilities of burial societies regarding surety bonds, and authorizes the State Corporation Commission to require certification of compliance with these bonding requirements. Other housekeeping amendments (i) make the requirement that foreign or alien fraternal benefit societies file copies of amendments to charters and bylaws optional at the Commission's request; (ii) correct reference to the Investment Company Act of 1940; (iii) delete an obsolete reference to an earnings test; and (iv) simplify filing requirements by allowing attestations to be made by an executive officer rather than by the chief executive officer. SB 199; CH. 147.

§ 38.2-1812 amended.
Change of insurance agent of record. Requires insurers to accept and honor a request by a policyholder to change the insurance agent of record to a new agent, who must be a duly appointed agent of the insurer. The change is effective on the date of the next renewal of the policy, unless the request is withdrawn. The new agent shall be paid all commissions payable on the policy, excluding commissions or other compensation payable under a retirement or deferred compensation plan with the insurance agent. This provision applies only to limited lines property and casualty agents, property and casualty insurance agents, personal lines agents, restricted nonresident property and casualty agents, and restricted nonresident personal lines agents. It does not apply to insurers that permit insureds to change the insurance agent of record under terms that are at least as favorable as provided by this measure, and equitably allocate commissions between the current and new insurance agents. HB 199; CH. 323 (effective 9/1/02).

§ 38.2-1822 amended.
Insurance agents; business entities. Eliminates the requirement that the articles of incorporation or other organizational document of a business entity specify that the entity is authorized to act as an insurance agent. The measure also clarifies requirements for nonresident business entities to act as an agent in the Commonwealth. SB 438; CH. 456.

§§ 38.2-1834.1 and 38.2-1869 amended.
Insurance agents; termination of license and contracts. Requires that any appeal by insurance agents whose licenses are terminated for failure to comply with continuing education requirements be filed within 60 days of notification of the termination. The measure also provides that an agent who has not complied with the continuing education requirements and who voluntarily surrendered his license prior to the expiration of the appeal period shall not be permitted to apply for another such license until he has complied with the continuing education requirements. Finally, the measure extends the confidential treatment required of documents acquired by the State Corporation Commission in connection with investigations of insurance agents. HB 1195; CH. 296 (effective - see bill).

§§ 38.2-1902, 38.2-1904, 38.2-2001, 38.2-2005, and 38.2-3001 amended.
Uninsured motorist coverage; rates and refunds. Eliminates the requirement that the State Corporation Commission grant prior approval of uninsured motorist rates. Instead, insurers will be authorized to use the "file and use"procedure. The bill also changes the distribution of refunds from the Uninsured Motorists Fund, basing the distribution in the proportion that each reporting insurer's written car years bear to the total number of written car years by all participating insurers in Virginia. Currently, refunds are distributed in the proportion that each insurer's premium income bears to the total premium income for basic uninsured motorists coverage. SB 151; CH. 145.

§ 38.2-1903.1 amended.
Insurance rates; large commercial risks. Includes the premiums paid for professional liability and workers' compensation insurance in calculations of the amount a person or entity pays in annual aggregate nationwide insurance premiums. Payment of annual aggregate nationwide insurance premiums in excess of $100,000 is one criterion for determining whether a person or entity is a large commercial risk. Insurers are not required to file or obtain approval for insurance policies and rates used in the insurance of large commercial risks. SB 154; CH. 437.

§ 38.2-1916.1 amended.
Workers's compensation insurance; review of rates. Authorizes the Attorney General to conduct investigations of possible violations of statutory requirements regarding the experience data of members of rate service organizations. SB 670; CH. 472.

§ 38.2-2217.1. See § 46.2-695; HB 1188.

§ 38.2-2226.1 added.
Motor vehicle insurance; notice of claim settlement. Requires motor vehicle insurers to advise the named insured on a policy, upon request, of any settlement of a claim made by a person other than the named insured that arose in connection with a motor vehicle accident involving a covered automobile. HB 580; CH. 405.

§ 38.2-2233 added.
Motor vehicle insurance; installment payments. Requires every insurer who accepts payments in installments to disclose in boldface type the new due date for an installment payment when the insurer unilaterally changes the payment's due date. SB 678; CH. 629.

§ 38.2-3115.1 added.
Life insurance; accelerated payment of benefits. Allows insurers who issue life insurance policies to provide for the accelerated payment of benefits to the insured during the life of the insured (i) if the insured is unable to perform two major activities of daily living, or (ii) if the insured requires substantial supervision by another person to protect the health and safety of the insured or any other person. The measure does not apply to credit life insurance policies. HB 1294; CH. 343.

§ 38.2-3418.4 amended.
Health insurance; reconstructive breast surgery. Amends the statute mandating reconstructive breast surgery coincident with or after a mastectomy for breast cancer to render Virginia's law consistent with the federal Women's Health and Cancer Rights Act of 1998, which was incorporated into Title I of the Health Insurance Portability and Accountability Act of 1996 (42 U.S.C. 300gg, et seq.). An existing provision that limits the mandate to policies, contracts or plans delivered, issued for delivery or renewed on or after July 1, 1998, is removed, and the mandate will apply to surgeries performed on or after October 21, 1998, which is the effective date of the federal law. An enactment clause provides that the amendments do not adversely affect the rights of any covered person that existed under the mandate as it previously existed. The measure also (i) provides that reconstructive breast surgery includes coverage for prostheses and physical complications, (ii) requires written notice of the coverage be provided to the enrollee, and (iii) prohibits denial of eligibility for coverage solely for the purpose of avoiding the requirements of the mandate. HB 662; CH. 415.

§§ 38.2-3723 and 38.2-3729 amended.
Credit life and credit accident and sickness insurance. Recognizes the 1980 Standard Ordinary Mortality Table as an acceptable basis for the establishment of reserves for credit life insurance policies. The actuarial method is established as the minimum standard for calculating the gross unearned premium reserve for credit accident and sickness insurance policies. Insurers are authorized to use a flexible valuation interest rate schedule. Refund formulas for credit accident and sickness insurance policies are required to be at least as favorable to the debtor as such refunds would be if based on the actuarial method. Other changes confirm that use of the Rule of 78 is not appropriate in determining reserves and refunds. SB 187; CH. 72.

§ 38.2-4319 amended.
Health maintenance organizations; reinsurance. Authorizes health maintenance organizations to engage in reinsurance transactions, provided that significant transactions are subject to approval by the State Corporation Commission. SB 289; CH. 153.

§ 38.2-4614. See § 6.1-2.13:1; SB 81.

§ 38.2-5016 amended.
Birth-Related Neurological Injury Compensation Program; investment reports. Requires the board of directors of the Birth-Related Neurological Injury Compensation Program to report annually on the investment of the assets of the Birth-Related Neurological Injury Compensation Fund to the Governor, the Clerk of the House of Delegates, and the Clerk of the Senate. Currently, such reports are made only to the Speaker of the House of Delegates and to the Chairman of the Senate Rules Committee. SB 689; CH. 857.

§ 38.2-5206 amended.
Long-term care insurance. Requires the State Corporation Commission to issue amended regulations that provide standards for initial filing requirements and premium rate schedule increases for long-term care insurance. Such standards shall be similar to standards set forth in model regulations developed by the National Association of Insurance Commissioners. The regulations shall be effective no later than April 1, 2003. HB 1125; CH. 334 (effective - see bill).

§§ 38.2-5600, 38.2-5601 and 38.2-5602 amended.
Insurance; medical savings accounts. Revises the Virginia Medical Savings Account Program by deleting references to the Workers' Compensation Commission and the Department of Medical Assistance Services. The plan would now be developed and implemented by the Department of Taxation and the Bureau of Insurance. The Department of Taxation is to report to the Joint Commission on Health Care by November 1, 2002. This is a recommendation of the Joint Commission on Health Care. HB 414; CH. 372.

§§ 38.2-5901 and 38.2-5902 amended.
Health insurance; external review of adverse decisions. Authorizes a designee of the Commissioner of Insurance to act on his behalf in exercising certain powers pertaining to the Bureau of Insurance's conduct of independent external reviews of adverse utilization review decisions. SB 183; CH. 745.

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