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2003 SESSION
Be it enacted by the General Assembly of Virginia:
1. That §§ 13.1-543, 13.1-544.1, 13.1-544.2, 13.1-1102, and 38.2-231 of the Code of Virginia are amended and reenacted, and that the Code of Virginia is amended by adding sections numbered 13.1-542.1 and 13.1-1101.1, as follows:
§ 13.1-542.1. Practice of certain professions by corporations.
Unless otherwise prohibited by law or regulation, the professional services defined in subsection A of § 13.1-543 may be rendered in this Commonwealth by:
1. A corporation organized as a professional corporation pursuant to the provisions of this chapter;
2. A foreign corporation that has obtained a certificate of authority pursuant to the provisions of this chapter;
3. A corporation organized pursuant to the provisions of Chapter 9 (§ 13.1-601 et seq.) or Chapter 10 (§ 13.1-801 et seq.) of this title; or
4. A foreign corporation that has obtained a certificate of authority pursuant to the provisions of Chapter 9 (§ 13.1-601 et seq.) or Chapter 10 (§ 13.1-801 et seq.) of this title.
§ 13.1-543. Definitions.
A. As used in this chapter:
A. The term "professional service" means any type of personal service to the
public which requires as a condition precedent to the rendering of such service or use of
such title the obtaining of a license, certification or other legal
authorization and shall be limited to the personal services rendered by
pharmacists, optometrists, practitioners of the healing arts, nurse
practitioners, practitioners of the behavioral science professions,
veterinarians, surgeons, dentists, architects, professional engineers, land
surveyors, certified landscape architects, certified interior designers, public
accountants, certified public accountants, attorneys-at-law, insurance
consultants, audiologists or speech pathologists, and clinical nurse
specialists. For the purposes of this chapter, the following shall be deemed to
be rendering the same professional service:
1. Architects, professional engineers and land surveyors; and
2. Practitioners of the healing arts, licensed under the provisions of Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1, nurse practitioners, licensed under the provisions of Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1, optometrists, licensed under the provisions of Chapter 32 (§ 54.1-3200 et seq.) of Title 54.1, physical therapists and physical therapist assistants, licensed under the provisions of Chapter 34.1 (§ 54.1-3473 et seq.) of Title 54.1, practitioners of the behavioral science professions, licensed under the provisions of Chapters 35 (§ 54.1-3500 et seq.), 36 (§ 54.1-3600 et seq.) and 37 (§ 54.1-3700 et seq.) of Title 54.1, and one or more clinical nurse specialists who render mental health services licensed under Chapter 30 (§ 54.1-3000 et seq.) of Title 54.1 and registered with the Board of Nursing.
B. The term "professional corporation" means a corporation whose articles of
incorporation set forth a sole and specific purpose permitted by this chapter and which is
either (i) organized under this chapter for the sole and specific purpose of
rendering professional service other than that of architects, professional
engineers or land surveyors, or using a title other than that of certified
landscape architects or certified interior designers and, except as expressly
otherwise permitted by this chapter, which has as its shareholders only
individuals who themselves are duly licensed or otherwise legally authorized to
render the same professional service as the corporation and of which
shareholders at least one is duly licensed or otherwise legally authorized to
render such professional service within the Commonwealth; or (ii) organized
under this chapter for the sole and specific purpose of rendering the
professional services of architects, professional engineers or land surveyors,
or using the title of certified landscape architects or certified interior
designers, or any combination thereof, and at least two-thirds of whose shares
are held by persons duly licensed within the Commonwealth to perform the
services of an architect, professional engineer or land surveyor, or by persons
legally authorized within the Commonwealth to use the title of certified
landscape architect or certified interior designer; or (iii) organized under
this chapter or under Chapter 10 (§ 13.1-801 et seq.) of this title for the
sole and specific purpose of rendering the professional services of one or more
practitioners of the healing arts, licensed under the provisions of Chapter 29
(§ 54.1-2900 et seq.) of Title 54.1, or one or more nurse practitioners,
licensed under Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1, or one or more
optometrists licensed under the provisions of Chapter 32 (§ 54.1-3200 et seq.)
of Title 54.1, or one or more physical therapists and physical therapist assistants
licensed under the provisions of Chapter 34.1 (§ 54.1-3473 et seq.) of Title
54.1, or one or more practitioners of the behavioral science professions, licensed
under the provisions of Chapter 35 (§ 54.1-3500 et seq.), 36 (§ 54.1-3600 et
seq.) or 37 (§ 54.1-3700 et seq.) of Title 54.1, or one or more practitioners
of audiology or speech pathology, licensed under the provisions of Chapter 26
(§ 54.1-2600 et seq.) of Title 54.1, or one or more clinical nurse specialists
who render mental health services licensed under Chapter 30 (§ 54.1-3000 et
seq.) of Title 54.1 and registered with the Board of Nursing, or any combination of
practitioners of the healing arts, optometry, physical therapy, the behavioral
science professions, and audiology or speech pathology, and all of whose shares are
held by or all of whose members are persons duly licensed or otherwise legally
authorized to perform the services of a practitioner of the healing arts, nurse
practitioners, optometry, physical therapy, the behavioral science professions,
or audiology or speech pathology or of a clinical nurse specialist who renders
mental health services; however, nothing herein shall be construed so as to allow any
member of the healing arts, optometry, physical therapy, the behavioral science
professions, or audiology or speech pathology or a nurse practitioner or
clinical nurse specialist to conduct his practice in a manner contrary to the standards of
ethics of his branch of the healing arts, optometry, physical therapy, the behavioral science
professions, or audiology or speech pathology, or nursing, as the case may be.
C B. Persons who practice the healing art of performing professional clinical
laboratory services within a hospital pathology laboratory shall be legally authorized to do so for purposes of this
chapter if such persons (i) hold a doctorate degree in the biological sciences
or a board certification in the clinical laboratory sciences and (ii) are
tenured faculty members of an accredited medical college or university that is
an "educational institution" within the meaning of § 23-14.
§ 13.1-544.1. Use of initials "P.C." or "PC" in corporate name.
Any professional corporation as defined in subsection B of § 13.1-543 may, but
is not required to, use the initials "P.C." or "PC," or the phrase
"professional corporation" or "a professional corporation," at the end of its
corporate name. Such initials or phrase may be used in the place of any word or
abbreviation required by subsection A of § 13.1-630, but shall not be
considered in determining whether a corporate name is distinguishable upon the
records of the Commission.
§ 13.1-544.2. Certificate of authority for foreign professional corporations.
A. Notwithstanding any other provision of this chapter, a foreign professional corporation, organized under the laws of a jurisdiction other than the Commonwealth of Virginia to perform a professional service of the type defined in subsection A of § 13.1-543, may apply for and obtain a certificate of authority to render such professional services in Virginia on the following terms and conditions:
1. Only stockholders and employees licensed or otherwise legally qualified by this Commonwealth may perform the professional service in Virginia.
2. The professional corporation must meet every requirement of this chapter
except the requirement that all of its stockholders be licensed to perform the
professional service in this Commonwealth.
3. The powers of any foreign professional corporation admitted under this section shall not exceed the powers permitted to domestic professional corporations under this chapter.
B. In order to qualify, a foreign professional corporation shall make application to the Commission as provided in § 13.1-759 and shall make such application for and secure a certificate of authority as may be required by § 13.1-549; and, in addition, shall be required to set forth the name and address of each stockholder of the corporation who will be providing the professional service in this Commonwealth and whether such stockholder is licensed, or otherwise legally qualified, to perform the professional service in Virginia.
§ 13.1-1101.1. Practice of certain professions by limited liability companies.
Unless otherwise prohibited by law or regulation, the professional services defined in subsection A of § 13.1-1102 may be rendered in this Commonwealth by:
1. A limited liability company organized as a professional limited liability company pursuant to the provisions of this chapter;
2. A foreign limited liability company that has obtained a certificate of authority pursuant to the provisions of this chapter;
3. A limited liability company organized pursuant to the provisions of Chapter 12 (§ 13.1-1000 et seq.) of this title; or
4. A foreign limited liability company that has obtained a certificate of authority pursuant to the provisions of Chapter 12 (§ 13.1-1000 et seq.) of this title.
§ 13.1-1102. Definitions.
A. As used in this chapter:
"Professional business entity" means (i) a professional limited liability
company, (ii) a professional corporation within the meaning of § 13.1-543 B A,
or (iii) a partnership (including a professional registered limited liability partnership registered under
§ 54.1-3902) each of the partners of which is duly licensed or otherwise
legally authorized to render the same professional services as those for which
the partnership was organized.
"Professional limited liability company" means a limited liability company
whose articles of organization set forth a sole and specific purpose permitted
by this chapter and that is either (i) organized under this chapter for the
sole and specific purpose of rendering professional service other than that of
architects, professional engineers or land surveyors, or using a title other
than that of certified landscape architects or certified interior designers
and, except as expressly otherwise permitted by this chapter, that has as its
members only persons or professional business entities that themselves are duly
licensed or otherwise legally authorized to render the same professional
service as the professional limited liability company and of which members at
least one is duly licensed or otherwise legally authorized to render such
professional service within the Commonwealth; or (ii) organized under this
chapter for the sole and specific purpose of rendering professional service of
architects, professional engineers or land surveyors, or using the title of
certified landscape architects or certified interior designers, or any
combination thereof, and at least two-thirds of whose membership interests are
held by persons duly licensed within the Commonwealth to perform the services
of an architect, professional engineer or land surveyor, or by persons legally
authorized within the Commonwealth to use the title of certified landscape
architect or certified interior designer; or (iii) organized under this chapter
for the sole and specific purpose of rendering the professional services of one
or more practitioners of the healing arts, licensed under the provisions of
Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1, or one or more nurse
practitioners, licensed under Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1,
or one or more optometrists licensed under the provisions of Chapter 32 (§
54.1-3200 et seq.) of Title 54.1, or one or more physical therapists and physical
therapist assistants licensed under the provisions of Chapter 34.1 (§ 54.1-3473
et seq.) of Title 54.1, or one or more practitioners of the behavioral science
professions, licensed under the provisions of Chapter 35 (§ 54.1-3500 et seq.),
36 (§ 54.1-3600 et seq.) or 37 (§ 54.1-3700 et seq.) of Title 54.1, or one or
more practitioners of audiology or speech pathology, licensed under the provisions of
Chapter 26 (§ 54.1-2600 et seq.) of Title 54.1, or one or more clinical nurse
specialists who render mental health services licensed under Chapter 30 (§
54.1-3000 et seq.) of Title 54.1 and registered with the Board of Nursing, or any
combination of practitioners of the healing arts, of optometry, physical therapy,
the behavioral science professions, and audiology or speech pathology and all
of whose members are persons or professional business entities duly licensed or
otherwise legally authorized to perform the services of a practitioner of the
healing arts, nurse practitioners, optometry, physical therapy, the behavioral
science professions or, audiology or speech pathology or of a clinical nurse
specialist who renders mental health services; however, nothing herein shall be construed so as to
allow any member of the healing arts, optometry, physical therapy, the
behavioral science professions, or audiology or speech pathology or a nurse
practitioner or clinical nurse specialist to conduct that person's practice in
a manner contrary to the standards of ethics of that person's branch of the healing
arts, optometry, physical therapy, the behavioral science professions, or
audiology or speech pathology, or nursing as the case may be.
"Professional services" means any type of personal service to the public that requires as a condition precedent to the rendering of that service or the use of that title the obtaining of a license, certification, or other legal authorization and shall be limited to the personal services rendered by pharmacists, optometrists, physical therapists and physical therapist assistants, practitioners of the healing arts, nurse practitioners, practitioners of the behavioral science professions, veterinarians, surgeons, dentists, architects, professional engineers, land surveyors, certified landscape architects, certified interior designers, public accountants, certified public accountants, attorneys at law, insurance consultants, audiologists or speech pathologists and clinical nurse specialists. For the purposes of this chapter, the following shall be deemed to be rendering the same professional services:
1. Architects, professional engineers, and land surveyors; and
2. Practitioners of the healing arts, licensed under the provisions of Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1, nurse practitioners, licensed under Chapter 29 (§ 54.1-2900 et seq.) of Title 54.1, optometrists, licensed under the provisions of Chapter 32 (§ 54.1-3200 et seq.) of Title 54.1, physical therapists, licensed under the provisions of Chapter 34.1 (§ 54.1-3473 et seq.) of Title 54.1, practitioners of the behavioral science professions, licensed under the provisions of Chapters 35 (§ 54.1-3500 et seq.), 36 (§ 54.1-3600 et seq.), and 37 (§ 54.1-3700 et seq.) of Title 54.1, and clinical nurse specialists who render mental health services licensed under Chapter 30 (§ 54.1-3000 et seq.) of Title 54.1 and registered with the Board of Nursing.
B. Persons who practice the healing art of performing professional clinical laboratory services within a hospital pathology laboratory shall be legally authorized to do so for purposes of this chapter if such persons (i) hold a doctorate degree in the biological sciences or a board certification in the clinical laboratory sciences and (ii) are tenured faculty members of an accredited medical college or university that is an "educational institution" within the meaning of § 23-14.
C. Except as expressly otherwise provided, all terms defined in § 13.1-1002 shall have the same meanings for purposes of this chapter.
§ 38.2-231. Notice of cancellation, refusal to renew, reduction in coverage or increase in rate of certain liability insurance policies.
A. 1. No cancellation or refusal to renew by an insurer of a policy of insurance as defined in § 38.2-117 or § 38.2-118 insuring a business entity, or a policy of insurance that includes as a part thereof insurance as defined in § 38.2-117 or § 38.2-118 insuring a business entity, or a policy of motor vehicle insurance against legal liability of the insured as defined in § 38.2-124 insuring a business entity, shall be effective unless the insurer delivers or mails to the named insured at the address shown on the policy a written notice of cancellation or refusal to renew. Such notice shall:
a. Be in a type size authorized under § 38.2-311;
b. State the date, which shall not be less than forty-five 45 days after the
delivery or mailing of the notice of cancellation or refusal to renew, on which such cancellation or
refusal to renew shall become effective, except that such effective date may not be
less than fifteen 15 days from the date of mailing or delivery when the
policy is being cancelled or not renewed for failure of the insured to discharge when due any of
its obligations in connection with the payment of premium for the policy;
c. State the specific reason or reasons of the insurer for cancellation or refusal to renew;
d. Advise the insured of its right to request in writing, within fifteen 15
days of the receipt of the notice, that the Commissioner of Insurance review the action of the
insurer; and
e. In the case of a policy of motor vehicle insurance, inform the insured of the possible availability of other insurance which may be obtained through its agent, through another insurer, or through the Virginia Automobile Insurance Plan.
2. Nothing in this subsection shall apply to any policy of insurance if the named insured or his duly constituted attorney-in-fact has notified orally, or in writing, if the insurer requires such notification to be in writing, the insurer or its agent that he wishes the policy to be canceled or that he does not wish the policy to be renewed, or if, prior to the date of expiration, he fails to accept the offer of the insurer to renew the policy.
B. No insurer shall cancel or refuse to renew a policy of motor vehicle insurance against legal liability of the insured as defined in § 38.2-124 insuring a business entity solely because of lack of supporting business or lack of the potential for acquiring such business.
C. No reduction in coverage for personal injury or property damage liability
initiated by an insurer and no increase in the filed rate for such coverage
greater than twenty-five 25 percent initiated by an insurer of a policy of
insurance defined in § 38.2-117 or § 38.2-118 insuring a business entity, or of
a policy of insurance that includes as a part thereof insurance defined in §
38.2-117 or § 38.2-118 insuring a business entity, or a policy of motor vehicle
insurance against legal liability of the insured as defined in § 38.2-124
insuring a business entity, and which in the case of a reduction in coverage is
subject to § 38.2-1912, shall be effective unless the insurer delivers or mails
to the named insured at the address shown on the policy a written notice of such
reduction in coverage or rate increase not later than forty-five 45 days prior
to the effective date of same. Such notice shall:
1. Be in a type size authorized under § 38.2-311;
2. State the date, which shall not be less than forty-five 45 days after the
delivery or mailing of the notice of reduction in coverage or increase in rate, on which such
reduction in coverage or increase in rate shall become effective;
3. State the manner in which coverage under an existing policy will be reduced or the amount of such rate increase;
4. State the specific reason or reasons for the reduction in coverage or increase in rate;
5. Advise the insured of its right to request in writing, within fifteen 15
days of receipt of the notice, that the Commissioner of Insurance review the action of the insurer.
D. If an insurer does not provide notice in the manner required in subsection
C, coverage shall remain in effect until forty-five 45 days after written
notice of reduction in coverage or increase in rate is mailed or delivered to the insured at the
address shown on the policy, unless the insured obtains replacement coverage or
elects to cancel sooner in either of which cases coverage under the prior
policy shall cease on the effective date of the replacement coverage or the
elected date of cancellation as the case may be. If the insured fails to accept
or rejects the changed policy, coverage for any period that extends beyond the
expiration date will be under the prior policy's terms and conditions. If the
insured accepts the changed policy, the reduction in coverage or increase in
rate shall take effect upon the expiration of the prior policy.
E. Notice of reduction in coverage or increase in rate shall not be required if
the insurer, after written demand, has not received, within forty-five 45 days
after such demand has been mailed or delivered to the insured at the address shown on the policy,
sufficient information from the insured to provide the required notice, or if such notice is waived
in writing by the insured.
F. No written notice of cancellation, refusal to renew, reduction in coverage or increase in rate that is mailed by an insurer to an insured in accordance with this section shall be effective unless:
1. a. It is sent by registered or certified mail, or
b. At the time of mailing the insurer obtains a written receipt from the United States Postal Service showing the name and address of the insured stated in the policy; and
2. The insurer retains a copy of the notice of cancellation, refusal to renew, reduction in coverage or increase in rate.
3. a. If the terms of a policy of motor vehicle insurance insuring a business entity require the notice of cancellation, refusal to renew, reduction in coverage or increase in rate to be given to any lienholder, then the insurer shall mail such notice and retain a copy of the notice in the manner required by this subsection. If the notices sent to the insured and the lienholder are part of the same form, the insurer may retain a single copy of the notice. The registered, certified or regular mail postal receipt and the copy of the notices required by this subsection shall be retained by the insurer for at least one year from the date of termination.
b. Notwithstanding the provisions of subdivision 3 a, if the terms of the policy require the notice of cancellation, refusal to renew, reduction in coverage or increase in rate to be given to any lienholder, the insurer and lienholder may agree by separate agreement that such notices may be transmitted electronically provided that the insurer and lienholder agree upon the specifics for transmittal and acknowledgement of notification. Evidence of transmittal or receipt of the notification required by this subsection shall be retained by the insurer for at least one year from the date of termination.
4. Copy, as used in this subsection, shall include photographs, microphotographs, photostats, microfilm, microcard, printouts or other reproductions of electronically stored data, or copies from optical disks, electronically transmitted facsimiles, or any other reproduction of an original from a process which forms a durable medium for its recording, storing, and reproducing.
G. Nothing in this section shall prohibit any insurer or agent from including in a notice of cancellation, refusal to renew, reduction in coverage or rate increase any additional disclosure statements required by state or federal laws.
H. For the purpose of this section the terms (i) "business entity" shall mean
an entity as defined by subsection B A of § 13.1-543, § 13.1-603 or § 13.1-803
and shall include an individual, a partnership, an unincorporated association,
the Commonwealth, a county, city, town, or an authority, board, commission,
sanitation, soil and water, planning or other district, public service
corporation owned, operated or controlled by the Commonwealth, a locality or
other local governmental authority, (ii) "policy of motor vehicle insurance"
shall mean a policy or contract for bodily injury or property damage liability
insuring a business entity issued or delivered in this Commonwealth covering
liability arising from the ownership, maintenance, or use of any motor vehicle,
but does not include (a) any policy issued through the Virginia Automobile
Insurance Plan, (b) any policy providing insurance only on an excess basis, or
(c) any other contract providing insurance to the named insured even though the
contract may incidentally provide insurance on motor vehicles, and (iii)
"reduction in coverage" shall mean, but not be limited to, any diminution in
scope of coverage, decrease in limits of liability, addition of exclusions,
increase in deductibles, or reduction in the policy term or duration except a
reduction in coverage filed with and approved by the Commission and applicable
to an entire line, classification or subclassification of insurance.
I. Within fifteen 15 days of receipt of the notice of cancellation, refusal to
renew, reduction in coverage or increase in rate, the insured shall be entitled to request in writing
to the Commissioner that he review the action of the insurer. Upon receipt of the request, the
Commissioner shall promptly begin a review to determine whether the insurer's
notice of cancellation, refusal to renew, reduction in coverage or rate
increase complies with the requirements of this section. Where the Commissioner
finds from the review that the notice of cancellation, refusal to renew,
reduction in coverage or rate increase does not comply with the requirements of
this section, he shall immediately notify the insurer, the insured and any
other person to whom such notice was required to be given by the terms of the
policy that such notice is not effective. Nothing in this section authorizes
the Commissioner to substitute his judgment as to underwriting for that of the
insurer. Pending review by the Commission, this section shall not operate to
relieve an insured from the obligation to pay any premium when due; however, if
the Commission finds that the notice required by this section was not proper,
the Commission may order the insurer to pay to the insured any overpayment of
premium made by the insured.
J. Every insurer shall maintain for at least one year records of cancellation, refusals to renew, reductions in coverage and rate increases to which this section applies and copies of every notice or statement required by subsections A, C and F of this section that it sends to any of its insureds.
K. There shall be no liability on the part of and no cause of action of any nature shall arise against (i) the Commissioner of Insurance or his subordinates, (ii) any insurer, its authorized representative, its agents, or its employees, or (iii) any firm, person or corporation furnishing to the insurer information as to reasons for cancellation, refusal to renew, reduction in coverage or rate increase, for any statement made by any of them in complying with this section or for providing information pertaining thereto.
2. That an emergency exists and this act is in force from its passage.