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2009 SESSION

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Senate Committee on Commerce and Labor

Chairman: Richard L. Saslaw

Clerk: Cheryl Law
Staff: Frank Munyan
Date of Meeting: February 2, 2009
Time and Place: Monday/ February 2,/1/2 hour after adjournment/ Sen. Room B

S.B. 879 Uninsured motorist insurance; authorizes insurer to assume control of defense of a certain action.

Patron: Martin

Uninsured motorist insurance.  Authorizes an underinsured motorist insurer to assume control, for its own benefit, of the defense of an action involving its underinsured motorist coverage if the insurer for the putative at-fault insured settles, in part, the claims against its insured by payment of its applicable liability limits on behalf of its insured.  The measure, which is based on a South Carolina statute, provides that an underinsured motorist insurer has 30 days after service of process in which to appear and defend in the name of the underinsured motorist an action that may affect its liability.  The evidence of service upon the insurer may not be made a part of the record.  The measure also prohibits an underinsured motorist policy from containing a clause requiring the insurer's consent to settlement with the at-fault party.

A BILL to amend and reenact § 38.2-2206 of the Code of Virginia, relating to uninsured motorist insurance coverage.

089787268

S.B. 991 Mortgage lending practice; borrower right of action for violation of certain prohibited practices.

Patron: Deeds

Mortgage lending practices; penalty.  Makes it unlawful for a mortgage broker knowingly (i) to make or cause to be made any deliberate and material misstatement, misrepresentation, or omission during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process; (ii) to use or facilitate the use of any deliberate and material misstatement, misrepresentation, or omission, knowing the same to contain a material misstatement, misrepresentation, or omission, during the mortgage lending process with the intention that it be relied on by a mortgage lender, borrower, or any other party to the mortgage lending process; or (iii) to conspire to do either of such things. Violations are punishable as a Class 1 misdemeanor. Violators shall also be required to pay restitution. The measure prohibits mortgage brokers from providing or arranging for: (a) a subprime loan containing a provision requiring or permitting the imposition of a prepayment penalty; (b) a residential mortgage loan, other than a reverse mortgage, if the borrower's compliance with any repayment option will result in negative amortization during any six-month period; and (c) a mortgage loan that will pay off a special mortgage unless the borrower has obtained a written certification from an authorized independent loan counselor on the advisability of the loan transaction. A special mortgage is a residential mortgage loan originated, subsidized, or guaranteed by or through an agency of the Commonwealth, a locality, or a nonprofit organization that has one or more nonstandard payment terms that substantially benefit the borrower. The measure expressly gives borrowers a private right of action for violations of certain prohibited practices under the Mortgage Lender and Broker Act, in which action the borrower may seek recovery of actual damages, statutory damages equal to the amount of all lender fees included in the amount of the principal of the mortgage loan, punitive damages, costs, and reasonable attorney fees.

A BILL to amend and reenact §§ 6.1-409, and 6.1-431 of the Code of Virginia and to amend the Code of Virginia by adding sections numbered 6.1-2.8:1 and 6.1-422.2 through 6.1-422.5, relating to mortgage lending and brokering practices, including subprime loans, negative amortization, special loans, and residential mortgage fraud; penalty.

091135220

S.B. 1020 Mortgage Lender and Broker Act; broker duties and liability. 

Patron: McEachin

Mortgage Lender and Broker Act; broker duties and liability.  Imposes upon mortgage brokers the duties to (i) act in the borrower’s best interest and in the utmost good faith toward the borrower and not to compromise a borrower’s right or interest in favor of another’s right or interest, including a right or interest of the mortgage broker; (ii) make reasonable efforts to secure a loan that is in the best interests of the borrower considering borrower circumstances and loan characteristics, including the product type, rates, charges, and repayment terms of the loan; and (iii) use reasonable skill, care, and diligence. The measure authorizes a borrower who has suffered a loss as a result of any violation of the Mortgage Lender and Broker Act to bring an action to recover actual damages, attorney fees, and court costs. If the violation was willful, the damages may be increased up to treble the amount of damages sustained.

A BILL to amend and reenact §§ 6.1-409, 6.1-422.1, 6.1-430, and 6.1-431 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 6.1-422.2, relating to the Mortgage Lender and Broker Act; duties and liabilities of mortgage brokers.

090045273

S.B. 1158 Workers' Compensation; pharmacist filling a prescription to dispense therapeutically equivalent.

Patron: Saslaw

Workers' Compensation; use of therapeutically equivalent drug products.  Requires a pharmacist filling a prescription for medication for a workers' compensation claim to dispense a therapeutically equivalent drug product for a prescribed name-brand drug product. However, the pharmacist shall fill the prescription with the name-brand drug product prescribed if (i) a therapeutically equivalent drug product does not exist or costs more than the prescribed name-brand drug product or (ii) the prescriber specifies on the prescription "brand medically necessary" based on a medical reason why the claimant should not have the prescription filled with a therapeutically equivalent drug product.

A BILL to amend the Code of Virginia by adding a section numbered 65.2-603.1, relating to the use of therapeutically equivalent drug products by workers' compensation claimants.

090050324

S.B. 1169 Consumer Protection Act; foreclosure rescues.

Patron: Watkins

Virginia Consumer Protection Act; foreclosure rescues.  Provides that the prohibition on fraudulent acts or practices committed by a supplier in a consumer transaction involving residential real property owned and occupied as the primary dwelling unit of the owner applies when the supplier of service to avoid or prevent foreclosure charges or receives a fee (i) prior to the full and complete performance of the services it has agreed to perform, if the transaction does not involve the sale or transfer of residential real property, or (ii) prior to the settlement on the sale or transfer of residential real property, if the transaction involves the sale or transfer of the property.  Currently, any practice where a supplier of a foreclosure avoidance or prevention service is to be paid a fee prior to the settlement on a sale of residential real property is prohibited, regardless of whether the fee is charged or collected as part of the transaction involving a sale of the property.

A BILL to amend and reenact § 59.1-200.1 of the Code of Virginia, relating to prohibited practices under the Virginia Consumer Protection Act; foreclosure rescue.

090523806

S.B. 1170 Mortgage Lender and Broker Act; SCC to request Attorney Gen. to investigate violations thereunder.

Patron: Watkins

Mortgage Lender and Broker Act.  Authorizes the State Corporation Commission to request the Attorney General to investigate violations of prohibited practices under the Mortgage Lender and Broker Act. The measure also provides that nothing in the Act shall be construed to preclude any person who suffers loss as a result of a violation of the prohibited practices from maintaining an action to recover damages or restitution. Finally, the measure deletes the existing exemption for mortgage lenders from the Virginia Consumer Protection Act.

A BILL to amend and reenact §§ 6.1-430, 6.1-431, and 59.1-199 of the Code of Virginia, relating to the Mortgage Lender and Broker Act; authority of Attorney General; private actions; application of Virginia Consumer Protection Act to mortgage lenders.

090120806

S.B. 1171 Mortgage loan originators; establishes licensure and registry therefor.

Patron: Watkins

Mortgage loan originators. Defines mortgage originator; establishes licensure and registry for originators in conjunction with the federal Secure and Fair Enforcement for Mortgage Licensing Act of 2008; and coordinates Virginia actions with the Nationwide Mortgage Licensing System and Registry, a system developed and maintained by the Conference of State Bank Supervisors that includes background checks and educational requirements.

A BILL to amend the Code of Virginia by adding in Title 6.1 a chapter numbered 16.1, consisting of sections numbered 6.1-431.1 through 6.1-431.21, relating to mortgage loan originators.

097433348

S.B. 1172 Mortgage Lender and Broker Act; eliminates provision that lenders, etc., are required to conduct.

Patron: Watkins

Mortgage Lender and Broker Act; employee background checks and training. Repeals provisions enacted in 2008 that require licensed mortgage lenders and brokers (i) to conduct background checks on employees who may have access to or process personal identifying or financial information from a member of the public and (ii) to ensure that their employees are properly trained in applicable state and federal mortgage lending laws and regulations.

A BILL to repeal §§ 6.1-423.1 and 6.1-423.2 of the Code of Virginia, relating to the Mortgage Lender and Broker Act; employee background checks and training.

090036348

S.B. 1255 Radio frequency identification systems; suppliers of consumer products to affix to product, etc.

Patron: Marsh

Radio frequency identification systems.  Requires suppliers of consumer products to which radio frequency identification (RFID) tags have been affixed or implanted to affix to the product or its packaging a conspicuous label stating that the product contains a remotely readable device with information about the product that can be read if it is brought within range of a reader device.  Suppliers that use an RFID system in the normal course of business are required display a sign stating that: (i) the store uses radio frequency identification technology; (ii) a radio frequency identification tag affixed to or implanted in a product contains information about the product that can be accessed by an RFID reader both before and after its purchase; and (iii) a description of the purpose of the RFID system.  RFID tags that are not components essential to the operation of a tagged consumer product's operation shall be attached in such a way as to allow their removal after the product has been purchased without damaging the product.  An RFID reader or system shall only be used to store, encode, or track RFID tags attached to a consumer product that is listed in the inventory of that supplier as not purchased, except for product returns, recalls, or for warranty purposes. In addition, with certain exceptions, the measure prohibits any person from knowingly using an RFID reader remotely to access, read, obtain, memorize, or store personal information encoded on or in an individual's identification device without the permission and prior consent of the authorized user and with the intent to defraud the authorized user, the issuer of the identification device, or a supplier or to use the information in furtherance of identity theft.  Violations are punishable as a Class 1 misdemeanor.

A BILL to amend the Code of Virginia by adding in Title 59.1 a chapter numbered 50, consisting of sections numbered 59.1-550 through 59.1-552, relating to the use of radio frequency identification systems; penalties.

094161264

S.B. 1264 Wages and salaries; employer to pay by credit to prepaid debit card or card account.

Patron: Norment

Payment of wages and salaries; wage payments.  Authorizes employers to pay wages and salaries by credit to a prepaid debit card or card account, without the employee's affirmative consent, if the employee fails to designate a financial institution to which payment could be made by electronic automated fund transfer and the employer arranges for the employee to have the ability to make at least one free withdrawal or transfer per pay period using such card. Currently, payment via prepaid debit card or card account requires the affirmative consent of the employee, though such consent is not required if the employee has not designated a financial institution to which payment by electronic automated fund transfer could be made and the employee is employed at an amusement park.

A BILL to amend and reenact § 40.1-29 of the Code of Virginia, relating to the payment of wages or salaries by prepaid cards.

090066272

S.B. 1266 School calendar; local school boards responsible for setting and eliminates post-Labor Day opening.

Patron: Vogel

School calendar. Makes local school boards responsible for setting the school calendar and determining the opening of the school year and eliminates the post-Labor Day opening requirement and "good cause" scenarios for which the Board of Education might grant waivers of this requirement.

A BILL to amend and reenact §§ 22.1-26, 22.1-79.1, and 22.1-296 of the Code of Virginia, relating to opening of the school year.

097805338

S.B. 1274 Health insurance; business practices.

Patron: Vogel

Health insurance; business practices.  Prohibits the issuance, delivery, sale, or negotiation of an accident and sickness insurance policy, subscription contract for a health services plan, or health care plan, which provides for premiums to be paid on a monthly or other period basis, to require that the policyholder pay premiums in advance for future periods, as a condition to reinstatement of the policy, contract, or plan.  Issuers of such policies, contracts, or plans shall not refuse to permit a policyholder to reinstate a policy, contract, or plan on the basis of the policyholder's claims experience or history of premium payments.  The measure also requires that individual and group health policies, contracts, and plans include a grace period of not less than 90 days for the payment of any premium, except for the first premium.

A BILL to amend and reenact §§ 38.2-3503 and 38.2-3527 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 38.2-508.6, relating to certain health insurance business practices.

094323338

S.B. 1331 Health benefits plans; insurers licensed to sell in any other state may sell to Virginia residents.

Patron: Cuccinelli

Health benefits plans offered by foreign health insurers.  Authorizes health insurers licensed to sell health benefits plans in any other state to sell health benefits plans to residents of the Commonwealth if the foreign health insurer offers the same plans in its domiciliary state, is in compliance with the laws of that state, obtains a certificate of authority to do business in the Commonwealth, and participates in the Virginia Life, Accident and Sickness Insurance Guaranty Association.  Foreign health insurers offering such plans in the Commonwealth will be subject to existing provisions regarding unfair trade practices, capital and surplus requirements, and taxes and assessments imposed on domestic health insurers selling individual and group health insurance policies.

A BILL to amend the Code of Virginia by adding in Title 38.2 a chapter numbered 64, consisting of sections numbered 38.2-6400 through 38.2-6406, relating to the provision within the Commonwealth of health benefit plans by health insurers licensed in other states.

089645216

S.B. 1351 Health insurance plan; insurance mandate for accident, etc. apply to plans for state employees.

Patron: Wagner

State employee health insurance plan; mandated benefits.  Provides that any law effective on or after July 1, 2009, that provides for an insurance mandate for policies of accident and health insurance shall also apply to health insurance plans for state employees. The measure also requires the Department of Human Resource Management to report to the Special Advisory Commission on Mandated Health Insurance Benefits on cost and utilization information for each of the mandated benefits.

A BILL to amend and reenact § 2.2-2818 of the Code of Virginia and to amend the Code of Virginia by adding in Article 2 of Chapter 34 of Title 38.2 a section numbered 38.2-3419.2, relating to the inclusion of mandated health insurance coverages and benefits under the state employee health insurance plan.

090094340

S.B. 1372 Workers' compensation insurance; SCC establishes a mechanism for merger.

Patron: Ruff

State Corporation Commission; local government self-insurance pools; workers' compensation insurance.  Establishes a mechanism for the merger of the local government group self-insurance association and local government group self-insurance pool, for the purpose of allowing political subdivisions of the Commonwealth to provide workers' compensation insurance coverage for their employees.

A BILL to amend and reenact §§ 15.2-2703, 65.2-801, and 65.2-1203 of the Code of Virginia, relating to workers' compensation insurance; local government group health insurance pools.

090084320

S.B. 1411 Health insurance, basic; allows insurers to offer & sell group policies if employer has not offered.

Patron: Watkins

Availability of basic health insurance.  Allows health insurers to offer and sell group health insurance policies or contracts that do not include state mandated health insurance benefits to employers with 50 or fewer employees if the employer has not offered health insurance coverage to its employees during the preceding six months. Such a group policy or contract may include any, or none, of the state-mandated health benefits as the health insurer and the qualified small employer agree. The measure also provides that a person that obtained a certificate of public need for a medical care facility subject to an agreement to provide charity care may satisfy such conditions by making direct payments to an entity that is authorized to receive payments satisfying charity care conditions or to a private nonprofit foundation that funds basic health insurance coverage to indigents pursuant to a memorandum of understanding with the Department of Health. Finally, the measure states that a health insurance policy or subscription contract may include caps or limits on the total annual or lifetime benefits provided thereunder at specified dollar amounts.

A BILL to amend and reenact §§ 32.1-102.4 and 38.2-4214 of the Code of Virginia and to amend the Code of Virginia by adding sections numbered 38.2-3406.1 and 38.2-3406.2, relating to increasing the availability of basic health insurance coverage in the Commonwealth.

090138348

S.B. 1413 Adult abuse; financial institution employees to report suspected financial abuse of elder persons.

Patron: Edwards

Adult protective services; reports by financial institution employees of financial abuse of elder or dependent persons.  Requires employees of banks and trust companies, savings banks, building and loan associations, savings and loan companies or associations, and credit unions to report the suspected financial abuse of elder or dependent persons, based on information obtained in their professional or official capacity.

A BILL to amend and reenact § 63.2-1606 of the Code of Virginia, relating to the duty to report financial abuse of elder or dependent adults.

090017228

S.B. 1430 Residential homes; bonds to fund grants for purchasers of newly constructed.

Patron: Stosch

Grants to purchasers of newly constructed residential homes.  Authorizes the issuance of $50 million in bonds to fund grants to individuals who purchase a principal residence in the Commonwealth that was first issued a certificate of occupancy on or after January 1, 2007, but before July 1, 2009.  Eligible individuals would be individuals who had no present ownership in a principal residence within the last three years.  The Virginia Housing Development Authority, in consultation with the Virginia Economic Development Partnership, would develop guidelines for purposes of determining eligible homebuyers and the amount of grant awards. 

A BILL to amend the Code of Virginia by adding a section numbered 36-55.49:1, relating to grants to certain purchasers of principal residences that are newly constructed and the issuance of bonds in an aggregate principal amount not to exceed $50,000,000 for purposes of funding the grants.

092866332

S.B. 1458 Health insurance; mandated coverage for telehealth services.

Patron: Wampler

Health insurance; mandated coverage for telehealth services.  Requires health insurers, health care subscription plans, and health maintenance organizations to provide coverage for the cost of telehealth services when the services are appropriately provided through such means. "Telehealth services" means the use of interactive audio, video, or other telecommunications technology by a health care provider to deliver health care services at a site other than the site where the patient is located, for consultation, transfer of medical data, and medical education.

A BILL to amend and reenact § 38.2-4319 of the Code of Virginia and to amend the Code of Virginia by adding a section numbered 38.2-3418.15, relating to health insurance coverage for telehealth services.

090154344

S.B. 1486 Domestic insurers; SCC delay application of provision applicable to investment of those petitioning.

Patron: Edwards

Investments of domestic insurers.  Authorizes the State Corporation Commission to delay the application of provisions applicable to the investments of a petitioning domestic insurer, including the requirement that Category 2 investments be excluded from the value of admitted assets to the extent their value exceeds 75 percent of the amount by which the insurer's surplus to policyholders exceeds its minimum capital and surplus, if the Commission finds that the delay may be beneficial to the policyholders of the domestic insurer.

A BILL to amend and reenact §§ 38.2-1400 and 38.2-1403 of the Code of Virginia, relating to investments of domestic insurers.

090135228

S.B. 1493 Successor corporations; asbestos-related liability. 

Patron: Puller

Successor corporations; asbestos-related liability.  Limits the cumulative successor asbestos-related liabilities of a corporation to the fair market value of the total gross assets of the transferor determined as of the time of the merger or consolidation, and states that the corporation is not responsible for successor asbestos-related liabilities in excess of this limit, as the limit may be adjusted. The limitation does not apply to workers' compensation benefits, claims not constituting successor asbestos-related liability, or obligations under the National Labor Relations Act or collective bargaining agreements. Further, the limitation applies only to a corporation that assumed or incurred certain asbestos-related liabilities prior to January 1, 1972, and to any successors of that corporation. A corporation may establish the fair market value of total gross assets by reference to the going-concern value of the assets or to the purchase price attributable to or paid for the assets in an arm's-length transaction, by reference to the value of the assets recorded on a balance sheet if there is no other readily available information from which fair market value can be determined, or any other method reasonable under the circumstances. The limitation applies to all asbestos claims filed on or after July 1, 2009, and to all pending asbestos claims for which trial had not commenced as of such date, except that any provision that would be unconstitutional if applied retroactively will be applied prospectively.

A BILL to amend the Code of Virginia by adding a section numbered 13.1-721.2, relating to asbestos-related liabilities of successor corporations.

090100304

S.B. 1495 Unemployment compensation; voluntarily leaving employment to accompany military spouse.

Patron: Locke

Unemployment compensation; quit to follow military spouse.  Provides that good cause for leaving employment exists if an employee voluntarily leaves a job to accompany the employee's spouse, who is on active duty in the military or naval services of the United States, to a new military-related assignment established pursuant to a permanent change of duty order from which the employee's place of employment is not reasonably accessible. The measure applies only if the state to which the spouse is transferred has a similar provision. Benefits paid to qualifying claimants shall be charged against the pool rather than against the claimant's employer.

A BILL to amend and reenact §§ 60.2-528 and 60.2-618 of the Code of Virginia, relating to unemployment compensation; voluntarily leaving employment to accompany military spouse.

098826256