TITLE 38.2. INSURANCE.

§§ 38.2-100, 38.2-316, 38.2-1401, 38.2-1700, 38.2-1800, and 58.1-2501 amended; §§ 38.2-6100 through 38.2-6113 added.
Insurance; dental plan organizations. Establishes a new regulatory system specifically for dental plan organizations, pursuant to which companies that provide a dental plan are required to be licensed. The measure also establishes required and optional dental benefit contract provisions, required provisions for plan dentist contracts, and requirements relating to the filing of premium rates and subscription fees. SB 156; CH. 668.

§ 38.2-111 amended.
Miscellaneous casualty insurance. Defines "miscellaneous casualty insurance" as insurance against liability, and against loss, damage, or expense arising out of injury to the economic interests of any person. It does not include any other statutorily-specified class of insurance, and would not include insurance that is contrary to law or public policy. HB 221; CH. 182.

§ 38.2-401 amended.
Fire Programs Fund. Requires the Executive Director of the Department of Fire Programs to establish written standards for determining the extent to which clients outside the Commonwealth shall be financially responsible for the cost of fire and emergency services training provided by the Department of Fire Programs. Revenues generated shall be retained in the Fire Programs Fund and used solely for providing additional training to members of Virginia's fire and emergency services. SB 154; CH. 164.

§ 38.2-517 amended.
Motor vehicle insurance; unfair settlement practices. Provides, with respect to a glass claim arising under a motor vehicle insurance policy, that an insurer's failure to disclose (i) the true nature of a third party representative; (ii) that an insured is not required to use the facility, service or products recommended by the insurer; or (iii) that the insured or its third party representative has a financial interest in the recommended replacement or repair facility, an unfair settlement practice, constitutes unfair settlement practices. The referring insurer is accountable for any violations by the third party representative. HB 1342; CH. 767.

§ 38.2-608. See § 32.1-127.1:03; HB 877.

§ 38.2-608. See § 32.1-127.1:03; SB 337.

§ 38.2-1230 amended.
Insurance; domestic reciprocals. Requires prior written approval of material transactions, and timely disclosure of most other transactions, between a domestic reciprocal and a related party and, when the transaction is material to the reciprocal, between any two or more of the reciprocal's related parties. The measure requires the annual filing of a related parties summary and that a reciprocal's surplus, following any dividends or distribution to any of the reciprocal's related parties, shall be reasonable in relation to the reciprocal's outstanding liabilities and adequate to its financial needs. SB 355; CH. 174.

§ 38.2-1603 amended.
Virginia Property and Casualty Insurance Guaranty Association. Recognizes the existence of Virginia Property and Casualty Insurance Guaranty fund coverage for certain qualifying claims that have been assumed as direct obligations of the insolvent insurer prior to the insurer's being declared insolvent. The bill clarifies that certain transactions, including routine reinsurance transactions and surplus lines transactions, are not novations that would establish a direct obligation of the insurer to the insured. The bill also expands the definition of "insolvent insurer" to include an insurer that is licensed in Virginia when the obligation with respect to the covered claim was assumed. HB 596; CH. 285.

§§ 38.2-1800 and 59.1-200 amended; §§ 59.1-441.1 through 59.1-441.6 added; § 38.2-4415 repealed.
Legal services plans. Transfers responsibility for regulating legal services plan sellers from the State Corporation Commission's Bureau of Insurance to the Department of Agriculture and Consumer Services. The measure establishes requirements for the registration of legal services plan sellers, authorizes the Board of Agriculture and Consumer Services to prescribe regulations relating to legal services plan sellers, and authorizes the Department to investigate violations. Legal services plan sellers must make contract records available to the Department upon request and maintain a true copy of each contract for its term. A seller who knowingly and willfully violates the requirement shall be guilty of a Class 3 misdemeanor. HB 363; CH. 784.

§§ 38.2-1800, 38.2-1824, 38.2-1865.6 through 38.2-1865.13, 38.2-2411, 38.2-2412, 38.2-2412.1, and 38.2-2412.2. See § 9.1-102; HB 1057.

§ 38.2-1867 amended.
Virginia Insurance Continuing Education Board; Virginia Association of Health Underwriters. Adds one representative from the Virginia Association of Health Underwriters to the Virginia Insurance Continuing Education Board and decreases, from two to one, the number of representatives on the Board from the Virginia Association of Insurance and Financial Advisors. HB 1238; CH. 765.

§ 38.2-1906 amended.
Insurance; rates. Allows insurers, other than workers' compensation insurers, to limit the amount of a premium increase applicable to the renewal of a policy, and to phase in the increase over a specified period. HB 553; CH. 838.

§ 38.2-2114 amended.
Homeowners insurance; nonrenewal. Prohibits an insurer from refusing to renew a homeowners insurance policy solely because a claim was made more than 60 months prior to the policy expiration date. HB 818; CH. 300.

§ 38.2-2125 amended.
Fire insurance; flood coverage; notices. Requires insurers issuing a new or renewal contract or policy of fire insurance that excludes coverage for damage due to flood or any other overflow of a body of water to provide written notice to the policyholder that contents coverage may be available with the flood policy for an additional premium. An insurer is required to notify a policyholder when flood coverage is excluded from a policy or contract and that flood insurance is available from the insurer, insurance agent or the National Flood Insurance Program. The requirement applies to policies issued or renewed on or after October 1, 2004. HB 609; CH. 288.

§ 38.2-2127 added.
Homeowners insurance deductibles. Requires an insurer who unilaterally changes the deductible on a policy insuring an owner-occupied dwelling to provide written notice to the insured stating that the deductible has been changed and explaining how the new deductible will be applied. This section will apply to policies renewed in Virginia on or after October 1, 2004. HB 898; CH. 745.

§ 38.2-2127 added.
Homeowners insurance; exclusions for dangerous or vicious animals. Authorizes the issuer of a homeowner's policy, with the insured's written consent, to exclude from coverage any liability resulting from an injury caused by a dangerous or vicious animal owned by or in the care, custody, or control of the insured if such animal has bitten, attacked, or inflicted injury on a person or companion animal. HB 1007; CH. 751.

§§ 38.2-2416 through 38.2-2419 amended.
Powers of attorney; fidelity and surety insurers. Eliminates the requirements that powers of attorney binding fidelity and surety insurers be recorded. The power of attorney must be attached to the bond or other obligation. The measure does not apply to surety bail bondsmen. HB 460; CH. 357.

§ 38.2-3100.2 added.
Insurance; funding agreements. Authorizes insurers licensed to write life insurance or annuities in Virginia to issue funding agreements. A funding agreement authorizes the insurer to accept funds and provides for an accumulation of funds for the purpose of making one or more payments in fixed or variable amounts, or both, that are not based on mortality or morbidity contingencies. The issuance of funding agreements constitutes transacting an insurance business in the Commonwealth. In a liquidation of an insurer, the holders of a funding agreement will receive the same priority that is currently accorded to policyholders. SB 535; CH. 254.

§§ 38.2-3220, 38.2-3221, 38.2-3222, and 38.2-3229 amended.
Insurance; annuity nonforfeiture. Incorporates model provisions adopted by the National Association of Insurance Commissioners' Standard Nonforfeiture Law for Individual Deferred Annuities. The measure also establishes a formula that uses an index-based interest rate to determine the minimum nonforfeiture amounts for individual deferred annuity contracts issued on or after July 1, 2005, and details application of the formula, including that it may be applied to certain contracts issued before July 1, 2005. HB 1181; CH. 313.

§ 38.2-3405. See § 54.1-2963.1; SB 224.

§§ 38.2-3407.10 and 38.2-5803 amended.
Insurance; provider panels. Allows a health insurance provider to send a provider directory electronically to its insureds. If the directory is provided electronically, it shall be updated monthly. SB 618; CH. 715.

§ 38.2-3407.15 amended.
Health insurance carriers; fair business practices; retroactive denials. Prohibits a health insurance carrier from imposing any retroactive denial of payment or seeking recovery or refund of a previously paid claim unless the carrier specifies in writing the specific claim for which the retroactive denial is to be imposed or the recovery or refund is sought. The carrier must also explain why the claim is being retroactively adjusted. HB 322; CH. 425.

§ 38.2-3420 amended.
Insurance; multiple employer welfare arrangements. Excludes from the State Corporation Commission's regulatory jurisdiction any multiple employer welfare arrangement (MEWA) comprised only of banks and their employees that (i) is duly licensed as a MEWA by the insurance regulatory agency of a state contiguous to the Commonwealth, (ii) files with the Commission a copy of its certificate of authority or other proper license from the contiguous state, and (iii) has no more than 50 Virginia residents who are employees of its member banks enrolled in or receiving accident and sickness benefits as insureds, members, enrollees, or subscribers of the MEWA. HB 1327; CH. 236.

§ 38.2-3525 amended.
Insurance; group accident and sickness insurance coverage for dependent children. Allows insurers, at the policyholder's election, to extend coverage under a group accident and sickness insurance policy to include any child of an insured group member, regardless of the child's age. HB 1404; CH. 771.

§§ 38.2-3540.1 and 38.2-4319 amended.
Accident and sickness insurance; claims experience. Requires health maintenance organizations to provide, upon request, to those health care plan policyholders that employed an average of at least 100 insured, subscribers or enrollees in the preceding 12-month period, as part of the insured's claims experience record, (i) a summary of claims charges incurred and the amount paid for each claim for the most recent available 24-month period; (ii) a listing of the number of insured or subscribers for whom combined medical costs or claims exceeded $100,000 in the most recently available 12-month period; and (iii) total enrollment in each membership category. The existing disclosure requirements applicable to group accident and sickness insurance policies and subscription contracts are amended to incorporate the new provisions regarding the size of the group policyholder that may request the information and to increase the threshold enrollees for whom information must be disclosed from those with payments or costs in excess of $50,000 to those in excess of $100,000. HB 1408; CH. 772 (effective 1/1/05).

§§ 38.2-4123, 38.2-4214, 38.2-4319, and 38.2-4509 amended; § 38.2-1315.1 added.
Insurance; actuarial opinions. Requires every insurer to submit annually an actuarial opinion and supporting documents, including a summary of opinion or issues, memoranda, and work papers prepared in conformity with appropriate National Association of Insurance Commissioners annual statement instructions. The documents shall be privileged and confidential and not discoverable or admissible in a civil action. The new requirements apply to fraternal benefit societies, health services plans, health maintenance organizations, and dental or optometric services plans. HB 1186; CH. 315.

§§ 38.2-4300, 38.2-4301, and 38.2-4302 amended.
Health maintenance organizations. Provides that, for purposes of health maintenance organization regulation, "net worth" and "capital and surplus" have the same meaning. Persons owning or having the right to acquire five percent or more of voting securities or subordinated debt of an entity applying for a license to establish or operate a health maintenance organization are required to disclose such fact when applying for a license. SB 372; CH. 175.

§ 38.2-4306 amended; § 38.2-4320.1 added.
Health maintenance organizations; Medicaid; Family Access to Medical Insurance Security (FAMIS) Plan. Removes the requirement that Medicaid HMOs include in the evidence of coverage a statement entitling any Medicaid recipient or FAMIS participants to conversion of their coverage to an individual contract. The measure conforms the requirements for the explanation of benefits for Medicaid recipients and FAMIS participants to the standards prescribed in the state plan for medical assistance services and the FAMIS Plan. Statutory requirements will not apply to the extent such requirements differ from the Department of Medical Assistance Services' standards. A second enactment clause declares that an emergency exists and this measure will become effective upon passage. HB 628; CH. 185 (effective 3/19/04).

§§ 38.2-5001, 38.2-5009, and 38.2-5020 amended.
Virginia Birth-Related Neurological Injury Compensation Act. Increases assessments for participating physicians and hospitals, and nonparticipating physicians on an incremental basis beginning in 2005, to maximums of $5,500, $200,000, and $300, respectively. The bill also eliminates the authority to pay attorney's fees to applicants who are not admitted into the birth injury fund program. HB 1407; CH. 931.

§§ 38.2-5001, 38.2-5009, and 38.2-5020 amended.
Virginia Birth-Related Neurological Injury Compensation Act. Increases assessments for participating physicians and hospitals, and nonparticipating physicians on an incremental basis beginning in 2005, to maximums of $5,500, $200,000, and $300, respectively. The bill also eliminates the authority to pay attorney's fees to applicants who are not admitted into the birth injury fund program. SB 687; CH. 896.

§§ 38.2-6100 and 38.2-6101 added.
Interstate Insurance Product Regulation Compact. Provides that Virginia is a Compacting State under the Interstate Insurance Product Regulation Compact. The Compact is intended to: (i) promote and protect the interest of consumers of individual and group annuity, life insurance, disability income, and long-term care insurance products; (ii) develop uniform standards for those insurance products; (iii) act as a central clearinghouse to review insurance products and advertisements; (iv) approve product filings and advertisements; (v) improve coordination of regulatory resources and expertise among state insurance departments regarding uniform standards and review of relevant insurance products; (vi) create the Interstate Insurance Product Regulation Commission; and (vii) perform other related functions consistent with state regulation of the business of insurance. This bill also appoints the Commissioner of Insurance as the Commonwealth's representative to the Interstate Insurance Product Regulation Commission. HB 1155; CH. 761.