Virginia Law

The following words and terms when used in this chapter shall have the following meaning unless the context clearly indicates otherwise:

"Advertisement" means any marketing communication that is oral, printed, written, or other material of any type from any source that is used by an agent or insurer and that is designed to create or has the effect of creating public interest in life insurance or annuities, or induces or tends to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy including, but not limited to:

1. Printed or published material, audiovisual material, mailing envelopes, or descriptive literature of an insurer or agent used in direct mail, newspapers, magazines, radio, telephone and television scripts, billboards or similar displays, websites and other Internet displays or communications, social media, or other forms of electronic communications;

2. Descriptive literature and sales aids of all kinds, authored by the insurer, its agents, or third parties, issued, distributed, or used by an insurer or agent including but not limited to circulars, booklets, illustrations, form letters, pamphlets, brochures, and books or portions thereof;

3. Materials, statements, or communications of any type used for the recruitment, training, and education of an insurer's sales personnel and agents that are designed to be used or are used to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy; or

4. Prepared or extemporaneous sales talks, presentations, and material for use or used by agents.

"Advertisement" does not include:

1. Communications or materials used within an insurer's own organization, not used as a sales aid, and not intended to be disseminated to the public;

2. Communications with policyholders other than material urging them to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy; or

3. A general announcement from a group or blanket policyholder to eligible individuals on an employment or membership list that a policy or program has been written or arranged; provided the announcement clearly indicates that it is preliminary to the issuance of a booklet explaining the proposed coverage.

"Agent" means a person defined in § 38.2-1800 of the Code of Virginia.

"Commission" means the State Corporation Commission.

"Contribution principle" means the dividend determination principle wherein aggregate divisible surplus is distributed or illustrated to be distributed among participating policies in the same proportion as the policies are considered to have contributed to divisible surplus.

"Determinable policy elements" means elements that are derived from processes or methods that are guaranteed at issue and not subject to company discretion, but where the values or amounts cannot be determined until some point after issue. These elements include the premiums, credited interest rates (including any bonus), benefits, values, noninterest based credits, charges or elements of formulas used to determine any of these. These elements may be described as guaranteed but not determined at issue. An element is considered determinable if it was calculated from underlying determinable policy elements only, or from both determinable and guaranteed policy elements.

"Guaranteed policy elements" means the premiums, benefits, values, credits or charges under a policy, or elements of formulas used to determine any of these that are guaranteed and determined at issue.

"Home office" means either the insurer's home office or the principal executive or administrative office of the insurer from which policyholder services available to the citizens of this Commonwealth are directed or administered.

"Insurer" means any person, corporation, association, partnership, reciprocal exchange, interinsurer, Lloyd's, fraternal benefit society, or any other legal entity that is defined as an "insurer" in the Code of Virginia.

"Nonguaranteed policy elements" means the premiums, credited interest rates (including any bonus), benefits, values, noninterest based credits, charges or elements of formulas used to determine any of these, that are subject to company discretion and are not guaranteed at issue. An element is considered nonguaranteed if any of the underlying nonguaranteed elements are used in its calculation.

"Policy" means any policy, plan, certificate including a fraternal benefit certificate, contract, agreement, statement of coverage, rider, or endorsement that provides for life insurance or annuity benefits unless otherwise specifically defined in this chapter.

"Preneed funeral contract" means any agreement where payment is made by the consumer prior to the receipt of services or supplies contracted for, that evidences arrangements prior to death for (i) the providing of funeral services or (ii) the sale of funeral supplies.