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1997 SESSION
Be it enacted by the General Assembly of Virginia:
1. That §§ 38.2-1816, 38.2-1818, 38.2-1822, 38.2-1825, 38.2-1838, 38.2-1841, 38.2-1869, and 38.2-1871 of the Code of Virginia are amended and reenacted and that the Code of Virginia is amended by adding a section numbered 38.2-1800.1 as follows:
§ 38.2-1800.1. Proof of residency.
For purposes of this chapter, an individual shall be deemed to be a resident of this Commonwealth provided such individual (i) maintains his principal place of residence within this Commonwealth; (ii) declares himself to be a Virginia resident on his federal tax return; and (iii) declares himself to be a Virginia resident for purposes of paying Virginia income tax and personal property taxes; and provided that such individual is able to document the above to the satisfaction of the Commission. The Commission may also consider other documentation furnished by the individual, such as a valid current Virginia driver's license or voter registration card, as additional proof of residency. An individual applying for or holding a license issued pursuant to this chapter who is unable to document his residency as set forth above shall be deemed not to be a resident of Virginia for purposes of this chapter.
§ 38.2-1816. Study course required; exception based upon employment experience.
A. Before registering to take an examination for a license, each applicant
shall have completed a forty-five classroom-hour an
insurance study course of forty-five hours of classroom instruction or
equivalent distance learning, or any combination thereof, in accordance
with an examination content outline approved by the Commission and shall submit
proof of such completion in a form acceptable to the Commission. However,
applicants for a health agent license shall complete a twenty-five
classroom-hour an insurance study course of twenty-five
hours of classroom instruction or equivalent distance learning, or any
combination thereof, in accordance with an examination content outline
approved by the Commission.
1. The term "classroom instruction," as used in this section, shall mean actual hours in a classroom environment with an instructor. Instructors shall have the right to consider an applicant to have met the classroom-hour requirement if the applicant was present for no less than ninety-five percent of the required hours. The term "distance learning," as used in this section, means instruction delivered under the general supervision of an instructor through a medium other than a classroom setting.
2. The proof of study course completion referred to in this section shall be signed by the applicant and sworn to before a notary public, indicating that the applicant completed a course for which the requisite number of classroom hours, or equivalent distance learning, were completed. Any applicant who submits a materially false proof of course completion shall, in addition to any applicable civil or criminal penalties for perjury, be deemed to have committed a knowing and willful violation of this section, and shall be punished as set forth in § 38.2-218. Upon receipt of acceptable proof that an applicant submitted a materially false proof of course completion, the Commission may administratively terminate any license issued based upon such submission.
3. The proof of study course completion referred to in this section shall be certified by the individual who acted as instructor for the course, and such individual shall be required to certify that the requisite number of classroom hours, or equivalent distance learning, were completed by the applicant. An instructor who is found to have submitted a materially false certification that an applicant completed the requisite number of classroom hours, or equivalent distance learning, shall be deemed to have committed a knowing and willful violation of this section, and shall be punished as set forth in § 38.2-218. If such instructor is also a licensed insurance agent or insurance consultant, the additional penalties set forth in §§ 38.2-1831 and 38.2-1843, respectively, may also be imposed by the Commission.
B. An applicant shall register to take an examination for a license and shall attain a passing grade on such examination within one year after meeting the education requirement in subsection A of this section. The Commission, however, may waive this time limit in individual circumstances in accordance with such criteria as may be prescribed.
C. An applicant may apply to the Commission to take the examination for a license without taking the required study course if the applicant submits proof in a form acceptable to the Commission that he has attained equivalent knowledge through employment experience as determined by the Commission. The employment experience shall include no less than one year of full-time experience as an employee of an insurer, an insurance department, an insurance agency, or equivalent employment as determined by the Commission. The employment experience shall have involved the performance of responsible insurance duties in connection with the kind of insurance for which the applicant has applied for a license. The applicant shall register for and attain a passing grade on such examination within one year of completion of the required employment experience.
§ 38.2-1818. Individual moving from another state or Canadian province.
An applicant who has moved into this Commonwealth from another state or a province of Canada shall meet any applicable education and examination requirements as set forth in §§ 38.2-1816 and 38.2-1817, and shall submit the application and pay the license fee required by § 38.2-1819. Agents with active nonresident Virginia agent licenses may continue to operate under their nonresident licenses for up to sixty days while satisfying the requirements for and applying for resident Virginia agent's licenses. Appointments made under such nonresident licenses shall remain in effect during the sixty-day period, unless terminated for other reasons. Appointments held by an agent under a nonresident agent license shall automatically be converted to resident agent appointments if the agent obtains an equivalent resident Virginia agent license during the sixty-day period. If an agent fails to obtain such resident license by the end of the sixty-day period, the equivalent nonresident license and all associated appointments under that license shall terminate at the end of the sixty-day period.
§ 38.2-1822. License required of agents; individual acting for partnership, limited liability company, or corporate licensee.
A. No person shall act, and no insurer or licensed agent shall knowingly permit a person to act, in this Commonwealth as an agent of an insurer licensed to transact the business of insurance in this Commonwealth without first obtaining a license in a manner and in a form prescribed by the Commission. As used in this section, "act as an agent" means soliciting, negotiating, procuring, or effecting contracts of insurance or annuity on behalf of an insurer licensed in this Commonwealth or receiving or sharing, directly or indirectly, any commission or other valuable consideration arising therefrom. No person shall submit business to any joint underwriting association or any plan established under this title for the equitable distribution of risks among insurers unless the person holds a valid license to transact the class of insurance involved.
B. No individual shall act as an agent on behalf of either a partnership, limited liability company, or a corporation in the transaction of insurance unless he is licensed as an agent and appointed, if appointment is required by statute.
C. No partnership, limited liability company, or corporation may act as an agent in this Commonwealth unless licensed and appointed, if appointment is required by statute. The existence of the partnership, limited liability company, or corporation shall be recorded pursuant to law, and the authority of the corporation to act as an insurance agent or agency shall be specifically set forth in its charter. The Commission may require proof of the foregoing before issuing a license to the partnership, limited liability company, or corporation.
D. For a nonresident partnership, a nonresident limited liability company, or a nonresident corporation, a certification by the insurance department of the nonresident's state of domicile satisfying the requirements of subsection A of § 38.2-1836 shall be deemed to satisfy the foregoing requirements.
E. In addition to the requirements of §§ 59.1-69 and 59.1-70, any
person, partnership, limited liability company, or corporation
conducting the business of insurance in this Commonwealth under an assumed or
fictitious name shall notify the Bureau of Insurance, in writing, either at the
time the application for a license to do business is filed or the assumed or
fictitious name is adopted, setting forth the name under which such business is
to be conducted. Any person or corporation transacting the business of
insurance under an existing assumed or fictitious name shall provide the Bureau
of Insurance with this information in writing no later than July 1990.
F. When the business of insurance is no longer conducted under an assumed or fictitious name, written notification to the Bureau of Insurance is required as soon as practicable.
§ 38.2-1825. Duration and termination of licenses and appointments.
A. A license issued to:
1. An individual agent shall authorize him to act as an agent until his license is otherwise terminated, suspended or revoked.
2. A partnership, limited liability company, or corporation shall
authorize such partnership, limited liability company, or
corporation to act as an agent until such license is otherwise terminated,
suspended, or revoked. The dissolution or discontinuance of a partnership
or corporation, whether by intent or by operation by law, shall
automatically terminate all licenses issued to such partnership or
corporation. The Bureau shall automatically terminate all insurance
licenses within ninety days of receiving notification from the clerk of the
Commission that the charter of a domestic limited liability company or
corporation, whether by intent or by operation of law, has been terminated or
that the certificate of authority of a foreign limited liability company or
corporation has been revoked.
A1. An agent's license shall automatically terminate after a period of six months during which no appointment of such agent under such license was in effect except for good cause shown to the Commission and payment of the prescribed fee.
B. An appointment issued to an agent by an insurer, unless terminated, suspended or revoked, shall authorize the appointee to act as an agent for that insurer and to be compensated therefor notwithstanding the provisions of §§ 38.2-1812 and 38.2-1823.
C. Upon the suspension or revocation of a license, the agent, or any person having possession of that license, shall immediately return it to the Commission.
§ 38.2-1838. License required of consultants.
A. Any person not licensed as a life and health or property and casualty insurance consultant who, in the Commonwealth, holds himself out to be an insurance advisor, consultant, planner or counselor or any person who uses any other designation or title likely to mislead the public, that he has particular insurance qualifications other than those for which he may otherwise be licensed or qualified shall be punished as provided in § 38.2-218 in addition to any other penalties specifically provided for in this chapter. As used in this section, "hold himself out to be an insurance advisor, consultant, planner or counselor" shall mean:
1. Representing that one's business is insurance consulting; or
2. Receiving, directly or indirectly, special and specific compensation for insurance advice, other than commissions received by a licensed insurance agent or surplus lines broker resulting from soliciting, negotiating, procuring, or effecting insurance or health care services as allowed by his license.
B. Each applicant for an insurance consultant's license shall apply to the Commission in a form acceptable to the Commission, and shall provide satisfactory evidence of having met the following requirements:
1, 2. [Repealed.]
3. 1. To be licensed as a property and casualty insurance
consultant the applicant must (i) successfully complete a forty-five-hour
property and casualty study course as required in § 38.2-1816 and (ii)
successfully pass, within six months prior to the date of application for
such license, the property and casualty examination as required in §
38.2-1817, except that an applicant who, at the time of such application
holds an active property and casualty insurance agent license, shall be exempt
from the study course and examination requirements;
4. 2. To be licensed as a life and health insurance
consultant, the applicant must (i) successfully complete a forty-five-hour life
and health study course as required in § 38.2-1816 and (ii) successfully
pass, within six months prior to the date of application for such license,
the life and health examination as required in § 38.2-1817,
except that an applicant who, at the time of such application holds an active
life and health insurance agent license, shall be exempt from the study course
and examination requirements.
B1. A licensed insurance agent who has been granted a license pursuant to
the requirements or exemptions set forth in §§ 38.2-1816 and
38.2-1817 shall be deemed to have satisfied the requirements of subsection B of
this section with respect to the classes of insurance for which he holds a
license.
C. Any individual who acts as an insurance consultant for a partnership, limited liability company or corporation shall be licensed as an insurance consultant.
§ 38.2-1841. Renewal of license; termination, suspension or revocation of license.
A. A license issued to an individual insurance consultant shall authorize him to act as an insurance consultant until his license is otherwise terminated, suspended, or revoked.
B. A license issued to a partnership, limited liability company or corporation
shall authorize such partnership, limited liability company, or
corporation to act as a an insurance consultant until
such license is otherwise terminated, suspended, or revoked. The dissolution or
discontinuance of a partnership, limited liability company or
corporation, whether by intent or by operation of law, shall
automatically terminate the insurance consultant's license issued to such
partnership, limited liability company or corporation. The
Bureau shall automatically terminate all insurance consultant licenses within
ninety days of receiving notification from the clerk of the Commission that the
charter of a domestic limited liability company or corporation, whether by
intent or by operation of law, has been terminated or that the certificate of
authority of a foreign limited liability company or corporation has been
revoked.
C. Upon the termination, suspension or revocation of an insurance consultant's license, the insurance consultant or the person having possession of the license shall immediately return it to the Commission.
D. Before August 1 of each year, each insurance consultant shall remit the fee
prescribed in § 38.2-1840 for the renewal of the license, unless the
license has been terminated, suspended or revoked on or before June 30
July 31 of that year. Any consultant license for which
the required renewal form and renewal fee has been received by the Commission
on or before July 31 shall be renewed for a one-year
period ending on the following July 31. Any consultant license for which the
required renewal form and renewal fee has not been received by the Commission
by July 31 shall not be renewed effective on that date.
E. The termination of an insurance agent's license pursuant to subsection A of § 38.2-1825 shall not result in the termination of the agent's consultant's license provided the annual license fee prescribed in § 38.2-1840 continues to be paid and the consultant license continues to be renewed as otherwise required by this section.
§ 38.2-1869. Failure to satisfy requirements; termination of license.
A. Failure of an agent to satisfy the requirements of this article by the last day of each even-numbered year beginning December 31, 1994, either by obtaining the continuing education credits required and furnishing evidence of same to the Board or its administrator as required by this article, or by furnishing to the Board acceptable evidence of exemption from the requirements of this article, or by obtaining, in a manner prescribed by the Board pursuant to this article, a waiver of the requirements for that biennium, shall result, subsequent to notification by the Board to the Commission, in the administrative termination of each license held by the agent for which the requirement was not satisfied.
1. The Board shall, on or about a date six months prior to the end of each biennium, provide a status report to each agent who has not yet fully satisfied the requirements of this article for such biennium. Such report shall inform the agent of his current compliance status for each license held that is subject to this article, and the consequences associated with noncompliance, and shall be sent by first-class mail to such agent at his last-known residence address as shown in the Commission's records. Failure of an agent to receive such notification shall not be grounds for contesting license termination.
2. The Board shall, by a date thirty days prior to the end of each biennium, provide a status report to each agent who has not yet fully satisfied the requirements of this article for such biennium. Such report shall inform the agent of his current compliance status for each license held that is subject to this article, and the consequences associated with noncompliance, and shall be sent by first class mail to such agent at his last known residence address as shown in the Commission's records. Failure of an agent to receive such notification shall not be grounds for contesting license termination.
3. No such administrative termination shall become effective until the Commission has provided thirty days' written notice of such impending termination to the agent by first-class mail sent to the agent at the agent's last known residence address as shown in the Commission's records. The thirty-day notice period shall commence on the date that the written notice is deposited in the United States Mail. Failure of an agent to receive such notification shall not be grounds for contesting a license termination. Neither the Board, nor its administrator, nor the Commission shall have the power to grant an agent additional time for completing the continuing education credits required by subsection B of § 38.2-1866 or the time for seeking waivers or exemption pursuant to § 38.2-1870 or § 38.2-1871. The sole purpose of such thirty-day period shall be for the agent to demonstrate to the satisfaction of the Board that the agent had, in fact, submitted and the Board or its administrator had received proof of compliance on or before the last day of the biennium. The Board shall not be obligated to review or respond to any other submissions during such thirty-day period except submissions indicating that the Board's records of compliance for such agent were incorrect. At the end of such thirty-day period, the Board shall provide to the Commission a final updated record of those agents who complied with the requirements of this article, whereupon the Commission shall administratively terminate the licenses of those agents required to submit proof of compliance and by whom proof of compliance was not submitted in a proper or timely manner.
4. Pursuant to the requirements of subsection C of § 38.2-1817, an agent holding a license for variable life insurance and variable annuities whose life and health insurance agent license is administratively terminated for failure to satisfy the requirements of this article shall also have such variable life insurance and variable annuities license administratively terminated by the Commission. Such license may be applied for again after the agent has obtained a new life and health insurance agent's license.
B. No resident or nonresident agent whose license has been terminated under the terms of this section shall be permitted to make application for a new license prior to the expiration of a period of ninety days from the date of termination of such license. No resident or nonresident agent applying for a license after termination of a previous license pursuant to this section shall be issued a license unless the agent has successfully completed, no earlier than the date of the thirty-day written notice required by subdivision A 3 of this section, any study course required by § 38.2-1816 and the examination required by § 38.2-1817. In such an event, these study course and examination requirements shall not be subject to waiver under any circumstances, including those set forth in §§ 38.2-1816, 38.2-1817, 38.2-1836, and 38.2-1845.
C. A resident or nonresident agent who voluntarily surrenders his license without prejudice during a biennium or within 120 days after the end of a biennium, and who has not provided proof of compliance for such biennium, shall not be permitted to apply for a new license of the same type until such agent has complied with the requirements of subsection B of this section. Further, such agent shall not be permitted to obtain a new license of the same type until the expiration of the same ninety-day period applicable to agents whose licenses are terminated pursuant to subsection A of this section.
D. A resident agent whose license terminates because, within 180 days prior to or within 120 days after the end of a biennium, such agent moves his residence to another state, and who had not, prior to such relocation, provided proof of compliance for such biennium shall not be permitted to obtain a new license of the same type until the expiration of the same ninety-day period applicable to agents whose licenses are terminated pursuant to subsection A of this section.
E. An insurance consultant who fails to renew his consultant license by the date specified in § 38.2-1840, but who obtains a new insurance consultant license within twelve months following such renewal date shall be treated, for purposes of determining exemption from continuing education requirements pursuant to § 38.2-1871, as if such insurance consultant license had been renewed in a timely manner.
§ 38.2-1871. Licensees exempt from continuing education requirements of article.
A. The following licensees are exempt from fulfilling the continuing education credit requirements set forth in this article for the biennium in which such licenses are issued:
1. Resident agents who have successfully passed the required examination for a license during a biennium pursuant to § 38.2-1817 will be exempt from meeting the continuing education requirements for that license for that biennium; and
2. Resident or nonresident agents who have been issued a license during the last twelve months of the biennium, and who are not otherwise exempt from the continuing education requirements for that license, shall have such requirements waived for that license for that biennium.
B. The following licensees are exempt from fulfilling the continuing education credit requirements set forth in this article:
1. Life and health insurance consultants who are licensed as life and health agents and who satisfy the continuing education requirements needed for continuation of their life and health agent license;
2. Property and casualty insurance consultants who are also licensed as property and casualty agents and who satisfy the continuing education requirements needed for continuation of their property and casualty agent license;
3. Agents who will have attained at least the age of sixty-five by the end of a biennium with respect to any license that they have held continuously for at least twenty years, subject to submission of a request for permanent exemption prior to the end of a biennium during which they satisfy the exemption requirements, in the form and manner required by the Board; and
4. Nonresident agents who reside in states requiring continuing education for their resident insurance producers, and who furnish evidence in the form and manner required by the Board of their compliance with such continuing education requirements in their state of residence, provided that the insurance supervisory official of the nonresident agent's state of residence will grant similar exemptions to Virginia residents who have satisfied Virginia's continuing education requirements.
2. That the amendments to the provisions of § 38.2-1816 of this act shall become effective on September 1, 1997, and that the amendments to the provisions of §§ 38.2-1841 and 38.2-1869 of this act shall become effective on January 1, 1998.
3. That notwithstanding any provision in § 38.2-1868.1, for the biennium ending December 31, 1996, agents subject to the provisions of such section shall submit proof of compliance to be received by the board or its administrator not later than May 1, 1997.
4. That an emergency exists and the third enactment of this act is in force from its passage.