Virginia Law

A. This chapter shall be liberally construed to achieve the purposes stated in subsection B of this section.

B. The purposes of this chapter are to:

1. Protect policyholders and the public against the adverse effects of excessive, inadequate or unfairly discriminatory rates;

2. Encourage independent action by insurers and reasonable price competition among insurers as the most effective way to produce rates that conform to the standards of subdivision 1;

3. Provide formal regulatory controls for use if independent action and price competition fail;

4. Authorize cooperative action among insurers in the rate making process, and regulate such cooperation in order to prevent practices that tend to create monopoly or to lessen or destroy competition;

5. Provide rates that are responsive to competitive market conditions and improve the availability of insurance in this Commonwealth; and

6. Regulate the business of insurance in a manner that will preclude application of federal antitrust laws.

1973, c. 504, § 38.1-279.29; 1986, c. 562.

As used in this chapter:

"Classification system" or "classification" means the plan, system, or arrangement for grouping risks with similar characteristics or a specified class of risk by recognizing differences in exposure to hazards.

"Client company" shall have the same meaning ascribed to it in § 65.2-101.

"Coemployee" shall have the same meaning ascribed to it in § 65.2-101.

"Experience rating" means a statistical procedure utilizing past risk experience to produce a prospective premium credit, debit, or unity modification.

"Market segment" means any line or class of insurance or, if it is described in general terms, any subdivision of insurance or any class of risks or combination of classes.

"Professional employer organization" shall have the same meaning ascribed to it in § 65.2-101.

"Professional employer services" means services provided to a client company pursuant to a written agreement with a professional employer organization, including, at a minimum, the payment of wages of the coemployees, the reservation of the right of direction and control over the coemployees, and the responsibility for the withholding and payment of payroll taxes of the coemployees.

"Prospective loss costs" means historical aggregate losses and loss adjustment expenses projected through development to their ultimate value and through trending to a future point in time. Prospective loss costs do not include provisions for profit or expenses other than loss adjustment expenses.

"Rate service organization" means any entity, including its affiliates or subsidiaries, which either has two or more member insurers or is controlled either directly or indirectly by two or more insurers, other than a joint underwriting association under § 38.2-1915, which assists insurers in ratemaking or filing by (i) collecting, compiling, and furnishing loss statistics; (ii) recommending, making, or filing prospective loss costs or supplementary rate information; or (iii) advising about rate questions, except as an attorney giving legal advice. Two or more insurers having a common ownership or operating in this Commonwealth under common management or control constitute a single insurer for purposes of this definition.

"Retrospective rating plan" means a rating plan that adjusts the premium for the insurance to which it applies on the basis of losses incurred during the period covered by that insurance.

"Statistical plan" means the plan, system, or arrangement used in collecting data for rate making or other purposes.

"Supplementary rate information" includes any manual or plan of rates, experience rating plan, statistical plan, classification, rating schedule, minimum premium, or minimum premium rule, policy fee, rating rule, rate-related underwriting rule, and any other information not otherwise inconsistent with the purposes of this chapter required by the Commission.

"Supporting data" includes:

1. The experience and judgment of the filer and, to the extent the filer wishes or the Commission requires, the experience and judgment of other insurers or rate service organizations;

2. The filer's interpretation of any statistical data relied upon;

3. Descriptions of the actuarial and statistical methods employed in setting the rates; and

4. Any other relevant information required by the Commission.

1973, c. 504, §§ 38.1-279.30, 38.1-279.40; 1986, c. 562; 1990, c. 596; 1993, c. 985; 1997, c. 153; 2000, cc. 624, 718.

A. Except as provided in subsection B, this chapter applies to the classes of insurance defined in §§ 38.2-110 through 38.2-122, 38.2-124 through 38.2-128 and 38.2-130 through 38.2-133.

B. This chapter does not apply to:

1. Insurance written through the Virginia Workers' Compensation Plan pursuant to Chapter 20 (§ 38.2-2000 et seq.) of this title;

2. Insurance on a specific risk as provided in § 38.2-1920;

3. Reinsurance, other than joint reinsurance, to the extent stated in § 38.2-1915;

4. Life insurance as defined in § 38.2-102;

5. Annuities as defined in §§ 38.2-106 and 38.2-107;

6. Accident and sickness insurance as defined in § 38.2-109;

7. Title insurance as defined in § 38.2-123;

8. Insurance of vessels or craft used primarily in a trade or business, their cargoes, marine builders' risks and marine protection and indemnity;

9. Insurance against loss of or damage to hulls of aircraft, including their accessories and equipment, or against liability, other than workers' compensation and employers' liability, arising out of the ownership, maintenance or use of aircraft;

10. Insurance written through the Virginia Automobile Insurance Plan. However, § 38.2-1905 shall apply to insurance written through the Plan;

11. Insurance provided pursuant to Chapter 27 (§ 38.2-2700 et seq.);

12. Home protection contracts as defined by § 38.2-2600 and their rates until such time as the Commission determines there is sufficient competition in the industry as provided by § 38.2-2608.

C. This chapter shall not apply to any class of insurance written (i) by any mutual assessment property and casualty insurance company organized and operating under the laws of this Commonwealth and doing business only in this Commonwealth or (ii) by any mutual insurance company or association organized under the laws of this Commonwealth, conducting business only in this Commonwealth, and issuing only policies providing for perpetual insurance.

1973, c. 504, § 38.1-279.31; 1976, c. 636; 1981, c. 530; 1986, c. 562; 1987, c. 519; 1993, cc. 774, 985; 1995, cc. 744, 803; 2000, c. 526; 2002, c. 145; 2022, c. 180.

The Commission may by rule exempt any person, class of persons, or market segment from any or all of the provisions of this chapter to the extent that it finds their application unnecessary to achieve the purposes of this chapter. Retrospective rating plans and large deductible plans for use in writing workers' compensation insurance for large risks shall be exempt from the filing requirements of Chapter 19 (§ 38.2-1900 et seq.). For purposes of this section, large risks are risks which generate total estimated standard premium for workers' compensation insurance of at least $250,000 annually (or less or in combination with other lines if approved by the Commission). Large deductible plans shall be defined for the purposes of this section as workers' compensation rating plans that include a per claim deductible of at least $100,000. Workers' compensation insurance for large risks may be retrospectively rated, or rated under a large deductible rating plan, as mutually agreed upon by the insurer and the insured in writing. A copy of any large risk retrospective rating plan and large deductible plan shall be made available to the Commission upon request. Notwithstanding these exemptions for retrospective rating plans and large deductible plans for large risks, insurers' experience attributable to large risks shall be filed with the Commission in accordance with § 38.2-1919.

1973, c. 504, § 38.1-279.32; 1986, c. 562; 1997, c. 153; 1999, c. 491.

A. Notwithstanding any other provision of this title, an insurer shall not be required to file with, or to receive approval from, the Commission for policy forms and rates used in the insurance of large commercial risks.

B. The form approval and rate filing exemption set forth in subsection A shall not apply to rates and forms for writing workers' compensation policies issued to large commercial risks.

C. A "large commercial risk" is a person or entity that:

1. Has a risk manager to negotiate insurance coverage. A risk manager means (i) an employee of the large commercial risk or (ii) a third party consultant retained by the large commercial risk, who provides skilled services in loss prevention, loss reduction, or risk and insurance coverage analysis, and the purchase of insurance, and who possesses at least one of the following credentials:

a. A bachelor's or higher degree in risk management issued by an accredited institution of higher education;

b. A designation as a Chartered Property and Casualty Underwriter (CPCU) issued by the American Institute for CPCU/Insurance Institute of America;

c. A designation as an Associate in Risk Management (ARM) issued by the American Institute for CPCU/Insurance Institute of America;

d. A designation as a Certified Risk Manager (CRM) issued by the National Alliance for Insurance Education & Research;

e. A designation as a Fellow in Risk Management (FRM) issued by the Global Risk Management Institute/Risk & Insurance Management; or

f. At least five years of experience in one or more of the following areas of commercial property and casualty insurance: (i) risk financing, (ii) claims administration, (iii) loss prevention, or (iv) risk and insurance coverage analysis; and

2. Meets at least two of the following criteria:

a. Possesses a net worth in excess of $2 million;

b. Generates annual revenues in excess of $2 million;

c. Employs more than 10 full-time or full-time equivalent employees per individual insured;

d. Pays annual aggregate nationwide insurance premiums in excess of $25,000;

e. Is a not-for-profit organization or public body generating annual budgeted expenditures of at least $5 million; or

f. Is a municipality with a population in excess of 30,000.

D. An insurer providing a policy to a large commercial risk must obtain annual, written certification signed by the risk manager and an officer of the corporation from the large commercial risk certifying that the large commercial risk (i) employs the necessary qualified risk manager and stating the basis for the risk manager's qualifications; (ii) meets two of the other criteria set forth in subdivision C 2; (iii) is aware that the policy being purchased is not subject to initial state regulatory review or approval of rates and forms; (iv) has the necessary expertise to negotiate its own policy language and rates; and (v) agrees to the use of the exempted rates and forms by its insurer or insurers.

E. The policyholder certification shall be filed with and retained by the insurance company issuing coverage to the large commercial risk.

2000, c. 548; 2002, c. 437; 2005, c. 251; 2009, c. 644; 2011, cc. 618, 636.

A. Rates for the classes of insurance to which this chapter applies shall not be excessive, inadequate, or unfairly discriminatory. All rates and all changes and amendments to rates to which this chapter applies for use in this Commonwealth shall consider loss experience and other factors within Virginia if relevant and actuarially sound, provided that other data, including countrywide, regional, or other state data, may be considered where such data is relevant and where a sound actuarial basis exists for considering data other than Virginia-specific data.

1. No rate shall be held to be excessive unless it is unreasonably high for the insurance provided and a reasonable degree of competition does not exist in the area with respect to the classification to which the rate applies.

2. No rate shall be held inadequate unless it is unreasonably low for the insurance provided and (i) continued use of it would endanger solvency of the insurer or (ii) use of the rate by the insurer has or, if continued, will have the effect of destroying competition or creating a monopoly.

3. No rate shall be unfairly discriminatory if a different rate is charged for the same coverage and the rate differential (i) is based on sound actuarial principles or (ii) is related to actual or reasonably anticipated experience.

B. 1. In determining whether rates comply with the standards of subsection A, separate consideration shall be given to (i) past and prospective loss experience within and outside this Commonwealth, (ii) conflagration or catastrophe hazards, (iii) a reasonable margin for underwriting profit and contingencies, (iv) dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers, (v) past and prospective expenses both countrywide and those specifically applicable to this Commonwealth, (vi) the loss reserving practices, standards and procedures utilized by the insurer, (vii) investment income earned or realized by insurers from their unearned premium and loss reserve and the Commission may give separate consideration to investment income earned on surplus funds, and (viii) all other relevant factors within and outside this Commonwealth. When actual experience or data does not exist, the Commission may consider estimates.

2. In the case of fire insurance rates, consideration shall be given to the experience of the fire insurance business during a period of not less than the most recent five-year period for which such experience is available.

3. In the case of workers' compensation insurance rates for volunteer firefighters or volunteer emergency medical services personnel, the rates shall be calculated based upon the combined experience of both volunteer firefighters or volunteer emergency medical services personnel and paid firefighters or paid emergency medical services personnel, so that the resulting rate is the same for both volunteer and paid members, but in no event shall resulting premiums be less than $40 per year for any volunteer firefighter or volunteer emergency medical services personnel.

4. In the case of uninsured motorist coverage required by subsection A of § 38.2-2206, consideration shall be given to all sums distributed by the Commission from the Uninsured Motorists Fund in accordance with the provisions of Chapter 30 (§ 38.2-3000 et seq.).

C. For the classes of insurance to which this chapter applies, including insurance against contingent, consequential and indirect losses as defined in § 38.2-133 (i) the systems of expense provisions included in the rates for use by any insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group for any class of insurance, or with respect to any subdivision or combination of insurance for which separate expense provisions are applicable, and (ii) risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards, expense provisions, or both. The standards may measure any difference between risks that can be demonstrated to have a probable effect upon losses or expenses. Notwithstanding any other provision of this subsection, except as permitted by § 38.2-1908, each member of a rate service organization shall use the uniform classification system, uniform experience rating plan, and uniform statistical plan of its designated rate service organization in the provision of insurance defined in § 38.2-119.

D. No insurer shall use any information pertaining to any motor vehicle conviction or accident to produce increased or surcharged rates above their filed manual rates for individual risks for a period longer than 36 months. This period shall begin no later than 12 months after the date of the conviction or accident.

E. Each authorized insurer subject to the provisions of this chapter may file with the Commission an expense reduction plan that permits variations in expense provisions. Such filing may contain provisions permitting agents to reduce their commission resulting in an appropriate reduction in premium. Nothing in this section shall be construed to require an agent to reduce a commission, nor may an insurer unreasonably refuse to reduce a premium due to a commission reduction as permitted by its filed expense reduction plan.

1973, c. 504, § 38.1-279.33; 1975, c. 155; 1977, c. 415; 1981, c. 243; 1982, c. 226; 1986, c. 562; 1987, c. 697; 1991, c. 104; 1993, c. 985; 1996, c. 250; 2002, c. 145; 2015, cc. 502, 503.

A. No insurer may increase its insured's premium or may charge points under a safe driver insurance plan to its insured as a result of a motor vehicle accident unless the accident was caused either wholly or partially by the named insured, a resident of the same household, or other customary operator. No insurer may increase its insured's premium or may charge points to its insured where the operator causing the accident is a principal operator insured under a separate policy. Any insurer increasing a premium or charging points as a result of a motor vehicle accident shall notify the named insured in writing and in the same notification shall inform the named insured that he may appeal the decision of the insurer to the Commissioner if he feels his premium has increased or he has been charged points as a result of a motor vehicle accident without just cause. Such notice shall include the requirements that the appeal be in writing and made within 60 days of receipt of the notice of any premium increase adjustment or of any point charge resulting from a motor vehicle accident.

B. An appeal of a premium increase or of a point charge by the named insured shall be requested in writing within sixty days of receipt of the notice of any premium adjustment or of any point charge resulting from a motor vehicle accident. Upon receipt of the request, the Commissioner shall promptly initiate a review to determine whether the premium increase or the point charge is justified. The premium increase or the point charge shall remain in full force and effect until the Commissioner rules that the premium be adjusted or the point charge be removed because it is not justified, or because the point charge was not assigned in accord with the insurer's filed rating plan, and so notifies the insurer and the insured. Upon receipt of the ruling, the insurer shall promptly refund any premiums paid as a direct result of the premium increase or the point charge, and shall adjust future billings to reflect the Commissioner's ruling.

C. No insurer shall assign points under a safe-driver insurance policy to any vehicle other than the vehicle customarily driven by the operator responsible for incurring points.

D. If an insured is a law-enforcement officer, as defined in § 9.1-101, no insurer may increase such insured's personal insurance premium or may charge points under a safe driver insurance plan to such insured as a result of an accident which occurred in the course of the insured's employment as a law-enforcement officer while the insured was driving a motor vehicle provided by the employing law-enforcement agency and was engaged in a law-enforcement activity at the time of such accident.

1981, c. 243, § 38.1-279.33:1; 1986, c. 562; 1990, cc. 275, 960; 1994, c. 925; 2016, c. 558.

Repealed by Acts 1997, c. 199.

A. Each authorized insurer subject to the provisions of this chapter shall file with the Commission all rates and supplementary rate information and all changes and amendments to the rates and supplementary rate information made by it for use in the Commonwealth on or before the date they become effective.

In cases where the Commission has made a determination pursuant to § 38.2-1912 that competition is not an effective regulator of rates for a line or subclassification of insurance, such rates, supplementary rate information, changes and amendments to rates and supplementary rate information for that line or subclassification shall be filed in accordance with and shall be subject to the provisions of § 38.2-1912.

B. Each rate service organization licensed under § 38.2-1914 that has been designated by an insurer for the filing of prospective loss costs or supplementary rate information under § 38.2-1908 shall file with the Commission all prospective loss costs or supplementary rate information and all changes and amendments to the prospective loss costs or supplementary rate information made by it for use in the Commonwealth on or before the date they become effective. Prospective loss costs and supplementary rate information for insurance defined in § 38.2-119 must comply with the provisions of § 38.2-1912.1 prior to being used by an insurer in a filing establishing or changing its rate.

C. Prospective loss costs filings and supplementary rate information filed by rate service organizations shall not contain final rates, minimum premiums, or minimum premium rules.

D. No insurer shall make or issue an insurance contract or policy of a class to which this chapter applies, except in accordance with the rate and supplementary rate information filings that are in effect for the insurer.

E. For insurance as defined in § 38.2-119 any authorized insurer that does not rely on prospective loss costs or supplementary rate information filed by a rate service organization shall comply with the filing provisions of § 38.2-1912 as if competition was not an effective regulator of rates.

F. Except with respect to workers' compensation and employers' liability insurance as defined in § 38.2-119, and notwithstanding the provisions of subdivision A 3 of § 38.2-1904, nothing shall prohibit an insurer from filing with the Commission any rate or supplementary rate information that allows the insurer to limit for its renewal policies (i) any rate increase that would otherwise be applicable to such policies or (ii) any rate decrease that would otherwise be applicable to such policies if the insurer is also limiting any rate increase. Such limitation shall apply for the period of time specified in the insurer's filing. Nothing shall prohibit such limitation from applying to policies (a) acquired by an insurer from another insurer pursuant to a written agreement of acquisition, merger, or sale that transfers all or part of the other insurer's book of business or (b) transferred by an agent from one insurer to another insurer pursuant to an agent book of transfer.

1973, c. 504, § 38.1-279.34; 1976, c. 278; 1986, c. 562; 1987, c. 697; 1990, cc. 596, 597; 1993, c. 985; 1997, c. 199; 2004, c. 838; 2005, c. 95; 2015, c. 619; 2016, c. 277.

Notwithstanding any other provision of this chapter, if an insurer or its agent provides a written quotation for insurance to an insured or applicant for insurance and the rate filing in effect for the insurer results in a premium increase of ten percent or more over the quoted premium, the insured or applicant may, within fifteen days of written notification of the increase by the insurer or its agent, request cancellation of the contract or policy. The insurer shall, upon receipt of such request, cancel the contract or policy calculating the earned premium pro rata using the premium originally quoted by the insurer or its agent. Nothing in this section shall apply to any increase in premium which is the result of incorrect information furnished by the insured or applicant or information omitted by the insured or applicant.

1990, c. 503.

Each filing and all supplementary rate information filed under this chapter, other than information contained therein or filed therewith that constitutes a trade secret, as defined in § 59.1-336, shall be open to public inspection. The insurer or other person making such a filing shall have the burden of persuading the Commissioner that information constitutes a trade secret. Copies of materials open to public inspection may be obtained by any person on request and upon payment of a reasonable charge for the copies. Where feasible, the Commission shall compile and make available to the public the lists of rates charged by insurers for or in connection with the insurance contracts or policies to which this chapter applies so as to inform the public of price competition among insurers.

1973, c. 504, § 38.1-279.35; 1986, c. 562; 2010, c. 234.

A. An insurer shall establish rates and supplementary rate information for any market segment based on the factors in § 38.2-1904. A rate service organization shall establish prospective loss costs and supplementary rate information for any market segment based on the factors in § 38.2-1904. An insurer may use supplementary rate information prepared by a rate service organization and may use prospective loss costs determined by the rate service organization with modification for its own expense and profit. The insurer may modify the prospective loss costs based on its own loss experience as the credibility of that loss experience allows.

B. An insurer may discharge its obligation to file supplementary rate information under subsection A of § 38.2-1906 by giving notice to the Commission that it uses supplementary rate information prepared and filed with the Commission by a designated rate service organization of which it is a member, subscriber, or service purchaser. The Commission may by order require an insurer to provide information in addition to that filed by the rate service organization. The insurer's supplementary rate information shall be that filed from time to time by the rate service organization, including any amendments to the supplementary rate information, subject to modifications filed by the insurer.

C. Every insurer shall adhere to the uniform classification system, uniform experience rating plan, and uniform statistical plan approved by the Commission in the provision of insurance defined in § 38.2-119. An insurer may develop subclassifications of the uniform classification system upon which rates for insurance defined in § 38.2-119 may be made; however, such subclassification must first be filed with and approved by the Commission. An insurer filing such subclassifications must certify to the Commission that the data it produces can be reported in a manner consistent with the uniform statistical plan and uniform classification system of its designated rate service organization.

1973, c. 504, § 38.1-279.36; 1976, c. 275; 1982, c. 201; 1986, c. 562; 1987, c. 697; 1990, c. 596; 1993, c. 985.

The Commission may investigate and determine, (i) upon its own motion, (ii) at the request of any citizen or any interested party in this Commonwealth, or (iii) at the request of any insurer subject to this chapter, whether rates in this Commonwealth for the classes of insurance to which this chapter applies are excessive, inadequate or unfairly discriminatory or whether loss experience and other factors within the Commonwealth are being properly used to determine the rates. In any such investigation and determination the Commission shall give separate consideration to those factors in the manner specified in § 38.2-1904.

1973, c. 504, § 38.1-279.37; 1986, c. 562; 1987, c. 697.

A. If the Commission finds, after providing notice and opportunity to be heard, that a rate is not in compliance with § 38.2-1904, or is in violation of § 38.2-1916, the Commission shall order that use of the rate be discontinued for any policy issued or renewed after a date specified in the order. The order may provide for rate modifications. The order may also provide for refund of the excessive portion of premiums collected (i) during a period not exceeding one year prior to the date of any request or motion for review made pursuant to § 38.2-1909 and (ii) during all periods subsequent to any such request or motion until the date of the order. If a refund is ordered, the order may provide for the payment of interest thereon at a rate set by the Commission. Except as provided in subsection B of this section, the order shall be issued within thirty days after the close of the hearing or within another reasonable time extension fixed by the Commission.

B. Pending a hearing, the Commission may order the suspension prospectively of a rate filed by an insurer and reimpose the last previous rate in effect if the Commission has reasonable cause to believe that: (i) a reasonable degree of competition does not exist in the area with respect to the classification to which the rate applies, (ii) the filed rate will have the effect of destroying competition or creating a monopoly, (iii) use of the rate will endanger the solvency of the insurer, or (iv) Virginia loss experience and other factors specifically applicable to the Commonwealth have not been properly used to determine the rates. If the Commission suspends a rate under this provision, it shall hold a hearing within fifteen business days after issuing the order suspending the rate unless the right to a hearing is waived by the insurer. In addition, the Commission shall make its determination and issue its order as to whether the rate shall be disapproved within fifteen business days after the close of the hearing.

C. At any hearing held under the provisions of subsection A or B of this section, the insurer shall have the burden of justifying the rate in question. All determinations of the Commission shall be on the basis of findings of fact and conclusions of law. If the Commission disapproves a rate, the disapproval shall take effect not less than fifteen days after its order and the last previous rate in effect for the insurer shall be reimposed for a period of one year unless the Commission approves a substitute or interim rate under the provisions of subsection D or E of this section.

D. For one year after the effective date of a disapproval order, no rate promulgated to replace a rate disapproved under the order may be used until it has been filed with the Commission and not disapproved within sixty days after filing.

E. Whenever an insurer has no legally effective rates as a result of the Commission's disapproval of rates or other act, the Commission shall, on the insurer's request, specify interim rates for the insurer that are high enough to protect the interests of all parties. The Commission may order that a specified portion of the premiums be placed in an escrow account approved by it. When new rates become legally effective, the Commission shall order the escrowed funds or any overcharge in the interim rates to be distributed appropriately, except that refunds to policyholders that are de minimis shall not be required.

1973, c. 504, § 38.1-279.38; 1976, c. 276; 1986, c. 562; 1987, c. 697; 1990, cc. 290, 597.

A. The Commission may by order require that a particular insurer file any or all of its rates and supplementary rate information thirty days prior to their effective date, if the Commission finds, after providing notice and opportunity to be heard, that the protection of the interests of the insurer's policyholders and the public in this Commonwealth requires closer supervision of the insurer's rates because of the insurer's financial condition or repetitive filing of rates that are not in compliance with § 38.2-1904. The Commission may extend the waiting period of any filing for thirty additional days by written notice to the insurer before the first thirty-day period expires.

B. The filing shall be approved or disapproved during the waiting period or during its extension. If the filing is not disapproved before the expiration of the waiting period or of its extension, the filing shall be deemed to meet the requirements of this chapter, subject to the possibility of subsequent disapproval under § 38.2-1910.

C. Any insurer affected by an order entered under subsection A of this section may request a rehearing by the Commission after the expiration of twelve months from the date of the Commission's former order.

1973, c. 504, § 38.1-279.39; 1986, c. 562.

A. If the Commission finds in any class, line, or subdivision of insurance, or in any rating class or rating territory or for insurance as defined in § 38.2-119 that (i) competition is not an effective regulator of the rates charged, (ii) Virginia loss experience and other factors specifically applicable to the Commonwealth have not been properly used to determine the rate, (iii) a substantial number of insurers are competing irresponsibly through the rates charged, or (iv) there are widespread violations of this chapter, it shall promulgate a rule requiring that any subsequent changes in the rates or supplementary rate information for that class, line, subdivision, rating class or rating territory shall be filed with the Commission at least sixty days before they become effective. The Commission may extend the waiting period for thirty additional days by written notice to the filer before the first sixty-day period expires. Upon filing any rate to which this section is applicable, the insurer shall give notice to the Division of Consumer Counsel of the Office of the Attorney General that such rate has been filed with the Commission and such insurer shall so certify to the Commission in its rate filing.

B. By this rule, the Commission may require the filing of supporting data for any classes, lines or subdivisions of insurance, or classes of risks or combinations thereof it deems necessary for the proper functioning of the rate monitoring and regulating process.

C. A rule promulgated under this section shall expire no later than twenty-seven months after issue. The Commission may renew the rule after a hearing and appropriate findings under this section.

D. If a filing is not accompanied by the information the Commission has required under subsection B of this section, the Commission shall within thirty days of the initial filing inform the insurer that the filing is not complete, and the filing shall be deemed to be made when the information is furnished.

E. If an insurer files for a rate reduction pursuant to a rule promulgated under this section, the Commission may order the provisional use of the requested rate reduction for such period as the Commission may require to evaluate the insurer's rate filing and supplementary rate information. The implementation of such a provisional rate reduction shall not relieve an insurer of its obligation to submit such information as deemed necessary by the Commission for its consideration of the rate filing, nor shall it interfere with the Commission's authority to suspend use of the provisional rate, reimpose the previous rate, consider and approve a revised rate request, or otherwise exercise its authority under § 38.2-1910.

F. Each insurer shall so certify in a rate filing if coverage to which the rate filing applies is reinsured by another company (i) under common management, (ii) under common controlling ownership, or (iii) under other common effective legal control as defined in § 38.2-1322.

1973, c. 504, § 38.1-279.40; 1986, c. 562; 1987, c. 697; 1990, cc. 487, 597; 1993, c. 985.

A. No prospective loss costs or supplementary rate information for insurance as defined in § 38.2-119 shall be applied or be used in this Commonwealth until it has been approved by the Commission.

B. Prospective loss costs and supplementary rate information filed under this section shall be deemed to meet the requirements of this chapter and may be applied or used unless disapproved by the Commission within sixty days of the time that the filing was made. The Commission may extend the waiting period for an additional thirty days by written notice to the filer before the sixty-day period expires.

C. If a filing is not accompanied by the information necessary for the Commission to determine if the requirements of § 38.2-1904 are satisfied, the Commission shall so inform the filer within sixty days of the initial filing, and the filing shall be deemed to be made when the necessary information is furnished.

D. The provisions of subsection B of this section shall be suspended when the Commission has ordered a hearing to be held. The provisions of § 38.2-2007 pertaining to public notice, hearings, and approvals shall apply to filings made under this section.

E. Upon making a filing under this section, the filer shall give notice to the Division of Consumer Counsel of the Office of Attorney General that such a filing has been made and shall certify to the Commission that such a notice has been given.

F. Once a filing has been approved under this section, an insurer may use the information in such filing pursuant to the provisions of §§ 38.2-1906 and 38.2-1908.

1993, c. 985.

A. No rate service organization shall provide any service relating to the rates of any insurance subject to this chapter, and no insurer shall use the service of a rate service organization for such purposes unless the rate service organization has obtained a license under § 38.2-1914.

B. No rate service organization shall refuse to supply any services for which it is licensed in this Commonwealth to any insurer authorized to do business in this Commonwealth and offering to pay the fair and usual compensation for the services.

C. Any rate service organization subject to this chapter may provide for the examination of policies, daily reports, binders, renewal certificates, endorsements, other evidences of insurance, or evidences of the cancellation of insurance, and may make reasonable rules governing their submission and the correction of any errors or omissions in them. This provision applies to the classes of insurance for which the rate service organization is licensed pursuant to § 38.2-1914.

D. A rate service organization may develop a uniform policy and uniform (i) statistical plans, (ii) experience rating plans, and (iii) classification systems for use by its members in the provision of insurance defined in § 38.2-119 and the reporting of the experience of this line of insurance. Each rate service organization may also develop manual rules for the recording and reporting of experience data of members pursuant to its uniform plans and systems. Such uniform plans, systems, and rules shall be filed with the Commission by the rate service organization and be approved prior to their use by members of the rate service organization.

E. No insurer shall be required to become a member or subscriber to any rate service organization.

1973, c. 504, § 38.1-279.41; 1986, c. 562; 1990, c. 596; 1993, c. 985.

A. A rate service organization applying for a license as required by § 38.2-1913 shall include with its application:

1. A copy of its constitution, charter, articles of organization, agreement, association or incorporation, and a copy of its bylaws, plan of operation and any other rules or regulations governing the conduct of its business;

2. A list of its members and subscribers;

3. The name and address of one or more residents of this Commonwealth upon whom notices, process affecting it or orders of the Commission may be served;

4. A statement showing its technical qualifications for acting in the capacity for which it seeks a license; and

5. Any other relevant information and documents that the Commission may require.

B. Each organization which has applied for a license under subsection A of this section shall promptly notify the Commission of every material change in the facts or in the documents on which its application was based.

C. If the Commission finds that the applicant and the natural persons through whom it acts are competent, trustworthy, and technically qualified to provide the services proposed, and that all requirements of law have been met, the Commission shall issue a license specifying the authorized activity of the applicant.

D. Licenses issued under subsection C of this section shall remain in effect until the licensee withdraws from the Commonwealth or until the license is suspended or revoked.

E. Any amendment to a document filed under subdivision 1 of subsection A of this section shall be filed promptly after it becomes effective. Failure to comply with this subsection shall be a ground for revocation of the license granted under subsection C of this section.

1973, c. 504, § 38.1-279.42; 1986, c. 562.

A. Each group, association or other organization of insurers that engages in joint underwriting or joint reinsurance for a class of insurance to which this chapter applies shall file with the Commission (i) a copy of its constitution, articles of incorporation, agreement or association, and of its bylaws, rules and regulations governing its activities, all duly certified by the custodian of the originals of the copies, (ii) a list of its members, and (iii) the name and address of a resident of this Commonwealth upon whom notices or orders of the Commission or process may be served.

B. Each such organization of insurers shall notify the Commission promptly of every change in the information required to be filed by subsection A of this section.

C. Each group, association or other organization of insurers that engages in joint underwriting for a class of insurance to which this chapter applies shall be subject to this chapter. Each such organization of insurers that engages in joint reinsurance for a class of insurance to which this chapter applies shall be subject to §§ 38.2-1926, 38.2-1927, and 38.2-1928.

D. If, after providing notice and opportunity to be heard, the Commission finds that any activity or practice of any such organization of insurers is unfair, unreasonable or otherwise inconsistent with this chapter, it shall issue a written order (i) specifying in what respect the activity or practice is unfair, unreasonable or otherwise inconsistent with this chapter, and (ii) requiring the discontinuance of the activity or practice.

1973, c. 504, § 38.1-279.43; 1986, c. 562.

A. As used in this section, the word "insurer" includes two or more insurers (i) under common management, (ii) under common controlling ownership or (iii) under other common effective legal control and in fact engaged in joint or cooperative underwriting, investment management, marketing, servicing or administration of their business and affairs as insurers.

B. No insurer or rate service organization shall:

1. Combine or conspire with any other person to monopolize or attempt to monopolize the business of insurance or any kind, subdivision or class of insurance;

2. Agree with any other insurer or rate service organization to charge or adhere to any rate, although insurers and rate service organizations may continue to exchange statistical information;

3. Make any agreement with any other insurer, rate service organization or other person to restrain trade unreasonably;

4. Make any agreement with any other insurer, rate service organization or other person that may substantially lessen competition in any kind, subdivision or class of insurance; or

5. Make any agreement with any other insurer or rate service organization to refuse to deal with any person in connection with the sale of insurance.

C. No insurer may acquire or retain any capital stock or assets of, or have any common management with, any other insurer if such acquisition, retention or common management substantially lessens competition in the business of insurance or any kind, subdivision or class thereof.

D. No rate service organization, or any of its members or subscribers, shall interfere with the right of any insurer to make its rates independently of the rate service organization.

E. No rate service organization shall have or adopt any rule, exact any agreement, or engage in any program that would require any member, subscriber or other insurer to utilize some or all of its services, or to adhere to its rates, rating plans, rating systems, underwriting rules, or policy forms, or to prevent any insurer from acting independently. Notwithstanding the foregoing, with respect to insurance defined in § 38.2-119, a rate service organization may develop uniform (i) policies, (ii) classification systems, (iii) statistical plans, (iv) experience rating plans, and (v) manual rules which shall be adhered to by its members.

1976, c. 279, § 38.1-279.44:1; 1986, c. 562; 1990, c. 596; 1993, c. 985.

A. 1. Whenever it appears to the Attorney General, either upon complaint or otherwise, that any person has engaged in, or is engaging in, or is about to engage in any act or practice prohibited by § 38.2-1916, or any violation of subsection D of § 38.2-1919, the Attorney General may, consistent with his powers and duties to enforce the laws of the Commonwealth prohibiting conduct that unreasonably restrains trade, after notice to the Commission:

a. Either require or permit such person to file with him a statement in writing or otherwise, under oath, as to all facts and circumstances concerning the subject matter;

b. Require such other data and information as he may deem relevant to the subject matter of an investigation of a possible violation of § 38.2-1916 or subsection D of § 38.2-1919; and

c. Issue an investigative demand to witnesses by which he may (i) compel the attendance of such witnesses; (ii) examine such witnesses under oath before himself or the Commission; (iii) subject to subsection B of this section, require the production of any documents or things that he deems relevant or material to the inquiry; and (iv) issue written interrogatories to be answered by the witness served or, if the witness served is a public or private corporation or a partnership or association or governmental agency, by any officer or agent, who shall furnish such information as is available to the witness.

2. The investigative powers authorized shall not abate or terminate by reason of any action or proceeding brought by the Attorney General or the Commission under this title. When a document or thing is demanded by an investigative demand, that demand shall not (i) contain any requirement that would be unreasonable or improper if contained in a subpoena duces tecum issued by a court of this Commonwealth; or (ii) require the disclosure of any document or thing that would be privileged, or production of which for any other reason would not be required by a subpoena duces tecum issued by a court of this Commonwealth.

B. Where the information requested pursuant to an investigative demand may be derived or ascertained from the business records of the party upon whom the interrogatory has been served or from an examination, audit, or inspection of such business records, or from a compilation, abstract, or summary based therein, and the burden of deriving or ascertaining the answer is substantially the same for the Attorney General as for the party from whom such information is requested, it shall be sufficient for that party to specify the records from which the answer may be derived or ascertained and to afford the Attorney General, or other individuals properly designated by the Attorney General, reasonable opportunity to examine, audit, or inspect such records and to make copies, compilations, abstracts, or summaries. The Attorney General is authorized, and may so elect, to require the production pursuant to this section, of documents or things before or after the taking of any testimony of the person summoned pursuant to an investigative demand, in which event, those documents or things shall be made available for inspection and copying during normal business hours at the principal place of business of the person served, or at such other time and place as may be agreed upon by the person served and the Attorney General.

C. Any investigative demand issued by the Attorney General under this section shall contain (i) a citation to this statute and section, (ii) a citation to the statute and section pertaining to the alleged violation under investigation, (iii) the subject matter of the investigation, and (iv) the date, place, and time the person is required to appear to produce testimony or documentary material in his possession, custody or control. Such date shall not be less than twenty days from the date of the investigative demand. Where documentary material is required to be produced, it shall be described by class so as to clearly indicate the material demanded.

D. Service of an investigative demand as provided in this section may be made by:

1. Delivery of a duly executed copy thereof to the person served or, if a person is not a natural person, to the principal place of business of the person to be served; or

2. Mailing by certified mail, return receipt requested, a duly executed copy thereof addressed to the person to be served at his principal place of business in this Commonwealth, or if that person has no place of business in this Commonwealth, to his principal office.

E. Within twenty days after the service of any such demand upon any person or enterprise, or at any time before the return date specified in the demand, whichever period is shorter, such party may file with the Commission and serve upon the Attorney General a petition for an order of the Commission modifying or setting aside such demand. The time allowed for compliance with the demand, in whole or in part as deemed proper and ordered by the Commission, shall not run during the pendency of such petition in the Commission. Such petition shall specify each ground upon which the petitioner relies in seeking such relief, and may be based upon any failure of such demand to comply with the provisions of this section or upon any constitutional or other legal right or privilege of such party. The provisions of this subsection shall be the exclusive means for a witness summoned pursuant to an investigative demand under this section to challenge an investigative demand issued pursuant to subsection A of this section.

F. The examination of all witnesses under this section shall be conducted by the Attorney General, or his designee, before an officer authorized to administer oaths in this Commonwealth. The testimony shall be taken stenographically or by a sound-recording device and shall be transcribed.

G. Any person required to testify or to submit documentary evidence shall be entitled, on payment of lawfully prescribed cost, to procure a copy of any document produced by such person and of his own testimony as stenographically reported or, in the case of depositions, as reduced to writing by or under the direction of a person taking the deposition. Any party compelled to testify or to produce documents or things may be accompanied and advised by counsel, but counsel may not, as a matter of right, otherwise participate in the investigation.

H. All persons served with an investigative demand by the Attorney General under this section, other than any person or persons whose conduct or practices are being investigated or any officer, director, or person in the employ of such person under investigation, shall be paid the same fees and mileage as paid witnesses in the courts of this Commonwealth. No person shall be excused from attending such inquiry pursuant to the mandate of an investigative demand, from producing a document or thing, or from being examined or required to answer questions, on the ground of failure to tender or pay a witness fee or mileage, unless a demand therefor is made at the time testimony is about to be taken and is made as a condition precedent to offering such production or testimony and unless payment is not made.

I. Any natural person who neglects or refuses (i) to attend and testify, (ii) to answer any lawful inquiry, or (iii) to produce documents or things, if in his power to do so, in obedience of an investigative demand or lawful request of the Attorney General or those properly authorized by the Attorney General, pursuant to this section, shall be subject to the penalty provisions of § 38.2-218. Any natural person who commits perjury, false swearing, or contempt in answering or failing to answer, or in producing a document or thing or failing to do so in accordance with an investigative demand or lawful request by the Attorney General, pursuant to this section, shall be guilty of a misdemeanor and upon conviction therefor by a court of competent jurisdiction shall be punished by a fine of not more than $5,000 or by imprisonment in jail for not more than one year, or both.

J. In any investigation brought by the Attorney General pursuant to this chapter, no individual shall be excused from attending, testifying or producing documentary material, objects, or intangible things in obedience to an investigative demand or under order of the Commission on the ground that the testimony, document, or thing required of him may tend to incriminate him or subject him to any penalty. No testimony or other information compelled either by the Attorney General or under order of the Commission or a court or any information directly or indirectly derived from such testimony or other information may be used against the individual or witness in any criminal case. However, he may be prosecuted or subjected to penalty or forfeiture for any perjury, false swearing, or contempt committed in answering or failing to answer, or in producing any document or thing or failing to do so in accordance with the demand of the Attorney General or the Commission. If an individual refuses to testify or produce any document or thing after being granted immunity from criminal prosecution and after being ordered to testify or produce any document or thing as authorized by this section, he may be found to be in civil contempt by a court of competent jurisdiction and incarcerated until such time as he purges himself of contempt by testifying, producing such document or thing, or presenting a written statement as ordered. Such finding of contempt shall not prevent the Attorney General from instituting other appropriate contempt proceedings against any person who violates any of the provisions of this section.

K. It shall be the duty of all public state and local officials, their employees, and all other persons to render and furnish to the Attorney General or his designee, when so requested, all information and assistance in their possession or within their power. Any officer participating in such inquiry and any person examined as a witness upon such inquiry who discloses to any person other than the Attorney General the name of any witness examined or any other information obtained upon such inquiry, except as so directed by the Attorney General, shall be guilty of a misdemeanor and subject to the sanctions prescribed in subsection I of this section. Such inquiry may upon written authorization by the Attorney General be made public.

L. The Attorney General may recommend rules and regulations to implement and carry out the provisions of this section. All such rules and regulations shall be subject to the approval of the Commission.

M. It shall be the duty of the Attorney General, or his designees, to maintain the secrecy of all evidence, testimony, documents, or other results of such investigations until formal proceedings are instituted. Violation of this subsection shall be punishable pursuant to § 38.2-218. Nothing contained in this section shall be construed to prevent the disclosure of any such investigative evidence by the Attorney General in his discretion to the Commissioner of Insurance, the State Corporation Commission, or to any federal or state law-enforcement authority that has restrictions governing confidentiality similar to those contained in this subsection.

1990, c. 596; 2002, c. 472.

A. Notwithstanding the provisions of § 38.2-218, any insurer, rate service organization or other person who knowingly or willfully violates any provision of § 38.2-1916 shall be punished for each such violation by a penalty of not more than $100,000 and may be subject to suspension or revocation of any license issued by the Commission.

B. Any person threatened with injury or damage to his business or property by reason of a violation of § 38.2-1916 may petition the Commission for injunctive relief pursuant to § 38.2-220.

C. The Commission may require an insurer, rate service organization, or other person to make restitution in the amount of the direct actual financial loss, including any costs associated with bringing such a matter before the Commission and reasonable attorney's fees, to (i) the Commonwealth, a political subdivision thereof, or any public agency injured in its business or property or (ii) any person injured in his business or property by reason of a violation of § 38.2-1916. If the Commission finds that the violation is willful or flagrant, it may increase the restitution payment to an amount not in excess of three times the actual damages sustained.

1990, c. 596.

Any person injured in his business or property by reason of any violation of § 38.2-1916 may maintain an action to enjoin the violation.

1976, c. 279, § 38.1-279.44:3; 1986, c. 562.

A. Nothing in this chapter shall prohibit the making of agreements among insurers for the equitable apportionment among them of insurance which may be afforded applicants who are in good faith entitled to but who are unable to procure it through ordinary methods. Insurers may agree among themselves on the use of reasonable rate modifications for such insurance. These agreements and rate modifications shall be subject to the approval of the Commission.

B. The Commission may approve policy forms and endorsements for use by such insurers with respect to insurance afforded such applicants.

1973, c. 504, § 38.1-279.45; 1986, c. 562.

A. The Commission may promulgate reasonable rules and statistical plans for each of the rating systems on file with it, which may be modified from time to time. These rules and plans shall be used by each insurer in the recording and reporting of its loss and countrywide expense experience, so that the experience of all insurers may be made available, at least annually, in the form and detail necessary to aid the Commission in determining whether rating systems comply with the standards set forth in § 38.2-1904. The rules and plans may also provide for the recording and reporting of expense experience items that are specially applicable to this Commonwealth and cannot be determined by prorating the countrywide experience.

B. In promulgating the rules and plans the Commission shall give due consideration (i) to the rating systems on file with it and (ii) to the rules and to the form of the plans used for rating systems in other states so that the rules and plans may be as uniform as is practicable among the several states.

C. The Commission may designate one or more rate service organizations or other agencies to assist it in gathering the experience data and making compilations of it. These compilations shall be made available, subject to reasonable rules promulgated by the Commission, to insurers and rate service organizations. Any rate service organization designated by the Commission shall retain the experience data and compilations of the experience data in the format and detail required by the applicable statistical plan and shall submit this information to the Commission upon request. Any rate service organization designated by the Commission to gather and compile experience data for any classification of workers' compensation insurance that includes coal mining shall report such data annually to the Commission for the most recent five years for which such data is available.

D. Every rate service organization that has uniform (i) statistical plans, (ii) classification systems, (iii) experience rating plans, and (iv) manual rules filed and approved in accordance with the provisions of § 38.2-1913 D shall gather and compile the experience data of its members for insurance as defined in § 38.2-119. Each member insurer shall adhere to such uniform plans, systems, and rules of its designated rate service organization in the recording of its experience and the reporting of such information to the rate service organization. Each rate service organization that gathers and compiles information pursuant to this subsection shall be subject to the provisions of subsection C as to the availability, retention, and filing of the experience data of its members.

1973, c. 504, § 38.1-279.46; 1976, c. 329; 1986, c. 562; 1993, c. 985; 2003, c. 222.

To promote uniform administration of rate regulatory laws, the Commission and each insurer and each rate service organization subject to this chapter may (i) exchange information and experience data with insurance supervisory officials, insurers, and rate service organizations in other states and (ii) consult with them regarding rate making and the application of rating schedules and rating plans. Reasonable rules and plans may be promulgated by the Commission for the interchange of data necessary for the application of rating plans.

1993, c. 985.

Subject to the Commission's approval, a rate in excess of that provided by an applicable filing may be used for a specific risk upon the filing of (i) written application of the insurer stating its reasons for the increased rate and (ii) the written consent of the insured or prospective insured.

1973, c. 504, § 38.1-279.47; 1986, c. 562.

The Commission may approve for use in this Commonwealth policies or forms for writing at divisible or indivisible rates and premiums any combination of the classes of insurance set forth in subsection A of § 38.2-1902, except insurance on or with respect to operating properties of railroads. The rates and premiums for combination policies, whether divisible or indivisible, shall be subject to this chapter.

1973, c. 504, § 38.1-279.49; 1986, c. 562.

A. Whenever any professional employer organization enters into an agreement with a client company to provide professional employer services, the experience rating of the professional employer organization shall be used for voluntary market workers' compensation insurance premium computation purposes with respect to such coemployees. In the event that the agreement between a client company and a professional employer organization is terminated, the coemployees shall become solely the employees of the former client company. If the coemployees have been covered as employees of the professional employer organization under a voluntary market workers' compensation insurance policy for a period of three consecutive years or more, the workers' compensation insurance premium applicable to the policy of the former client company shall be based upon the rating of the professional employer organization until the former client employer has developed sufficient experience to be rated on its own or no longer qualifies for experience rating. If the coemployees have been covered as employees of the professional employer organization for a period of less than three consecutive years, the workers' compensation insurance premium applicable to the policy of the former client company shall be based upon the experience of the former client company which reflects its experience during the experience period specified by the approved experience rating plan, including, if available, experience incurred for coemployees under the professional employer services agreement.

B. Insurers may conduct periodic audits of any professional employer organization, including payrolls, operations and records as related to individual client company operations in order to ensure that the appropriate premium is charged for workers' compensation insurance coverage. Such audits may include audits of the client company in order to verify payroll, losses and classifications, and inspections of the premises where the coemployees work.

C. A professional employer organization may aggregate its coemployees under a single employer plan for the purpose of providing employee benefits provided that the professional employer organization meets the regulatory licensure and filing requirements promulgated by the Commission for fully insured multiple employer welfare arrangements. The following information required to be filed shall be confidential and shall not be disclosed to the public: (i) all information related to the names and addresses of employers participating in the plan and (ii) all information pertaining to the adequacy of the plan's level of reserves and contributions; however, nothing herein shall (i) prevent the Commission from using such information in any regulatory proceeding or (ii) be interpreted to prohibit or limit the production of documents containing such information from the professional employer organization pursuant to an otherwise lawful subpoena issued by a court of competent jurisdiction.

D. The Commission may promulgate regulations as it deems necessary for the administration of this section.

2000, cc. 624, 718.

No rate service organization subject to this chapter shall adopt any rule prohibiting or regulating the payment of dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers.

1973, c. 504, § 38.1-279.50; 1986, c. 562.

Each rate service organization and each insurer subject to this chapter shall provide within this Commonwealth reasonable means for any person aggrieved by the application of its rating system to be heard in person or by an authorized representative on his written request. Any person who makes the written request shall be entitled to review the manner in which the rating system has been applied to the insurance afforded him. If the rate service organization or insurer fails to grant or reject the request within thirty days after it is made, the applicant may proceed in the same manner as if his application had been rejected. Any person affected by the action of the rate service organization or the insurer on the request may, within thirty days after written notice of the action, appeal to the Commission. The Commission may affirm or reverse the action after a hearing held upon not less than ten days' written notice to the applicant and to the rate service organization or insurer.

1973, c. 504, § 38.1-279.51; 1986, c. 562; 1990, c. 596.

Cooperation among rate service organizations or among rate service organizations and insurers in rate making or in other matters within the scope of this chapter is hereby authorized if the filings resulting from such cooperation are subject to all the provisions of this chapter applying to filings generally. The Commission may review such cooperative activities and practices. If, after providing notice and opportunity to be heard, it finds that any cooperative activity or practice is unfair, unreasonable or otherwise inconsistent with this chapter, the Commission shall issue a written order (i) specifying in what respects the cooperative activity or practice is unfair, unreasonable or otherwise inconsistent with this chapter, and (ii) requiring the discontinuance of the cooperative activity or practice.

1973, c. 504, § 38.1-279.52; 1986, c. 562.

A. Whenever the Commission considers it necessary to be informed about any matter related to the enforcement of the insurance laws, it may examine the affairs and condition of any rate service organization under subsection A of § 38.2-1913 and of any joint underwriting or joint reinsurance organization under § 38.2-1915.

B. So far as reasonably necessary for any examination under subsection A of this section, the Commission may examine the accounts, records, documents or evidence of transactions, so far as they relate to the examinee, of any (i) officer, (ii) manager, (iii) general agent, (iv) employee, (v) person who has executive authority over or is in charge of any segment of the examinee's affairs, (vi) person controlling or having a contract under which he has the right to control the examinee whether exclusively or with others, (vii) person who is under the control of the examinee, or (viii) person who is under the control of a person who controls or has a right to control the examinee whether exclusively or with others.

C. On demand every examinee under subsection A of this section shall make available to the Commission for examination any of its own accounts, records, documents or evidences of transactions and any of those of the persons listed in subsection B of this section.

D. The Commission may examine every licensed rate service organization at intervals established by the Commission.

E. 1. Instead of all or part of an examination under subsections A and B of this section, or in addition to it, the Commission may order an independent audit by certified public accountants or actuarial evaluation by actuaries approved by it of any person subject to the examination requirement. Any accountant or actuary selected shall be subject to standards respecting conflicts of interest used by the Commission. Any audit or evaluation under this subsection shall be subject to subsections H through O of this section, so far as appropriate.

2. Instead of all or part of an examination under this section, the Commission may accept the report of an audit already made by certified public accountants or actuarial evaluation by actuaries approved by it, or the report of an examination made by the insurance department of another state.

F. [Reserved.]

G. An examination may cover comprehensively all aspects of the examinee's affairs and condition. The Commission shall determine the exact nature and scope of each examination, and in doing so shall take into account all relevant factors, including but not limited to (i) the length of time the examinee has been operating, (ii) the length of time it has been licensed in this Commonwealth, (iii) the nature of the services provided, (iv) the nature of the accounting records available and (v) the nature of examinations performed elsewhere.

H. For each examination under this section, the Commission shall issue an order stating the scope of the examination and designating the examiner in charge. On demand a copy of the order shall be exhibited to the examinee.

I. Any examiner authorized by the Commission shall, so far as necessary for the purposes of the examination, have access at all reasonable hours to the premises and to any books, records, files, securities, documents or property of the examinee and to those of persons under subsection B of this section so far as they relate to the affairs of the examinee.

J. The officers, employees and agents of the examinee and of persons under subsection B of this section shall comply with every reasonable request of the examiners for assistance in any matter relating to the examination. No person shall obstruct or interfere with the examination in any way other than by legal process.

K. If the Commission finds the accounts or records to be inadequate for proper examination of the condition and affairs of the examinee or improperly kept or posted, it may employ experts to rewrite, post or balance them at the expense of the examinee.

L. The examiner in charge of an examination shall make a proposed report of the examination that shall include the information and analysis as is ordered in subsection H of this section, together with the examiner's recommendations. At the discretion of the examiner in charge, preparation of the proposed report may include conferences with the examinee or its representatives. The proposed report shall remain confidential until filed under subsection M of this section.

M. The Commission shall serve a copy of the proposed report upon the examinee. Within twenty days after service, the examinee may serve upon the Commission a written demand for a hearing on the contents of the report. If a hearing is demanded the Commission shall give notice and hold a hearing, and on demand by the examinee the hearing shall be informal and private. The Commission shall adopt the report with any necessary modifications and file it for public inspection, or it may order a new examination within either (i) sixty days after the hearing or (ii) if no hearing is demanded, sixty days after the last day on which the examinee might have demanded a hearing.

N. The Commission shall forward a copy of the examination report to the examinee immediately upon adoption, except that if the proposed report is adopted without change, the Commission need only so notify the examinee.

O. The examinee shall furnish copies of the adopted report to each member of its board of directors or other governing board.

P. The Commission may furnish, without cost or at a price to be determined by it, a copy of the adopted report to the insurance commissioner of any jurisdiction in which the examinee is licensed and to any other interested person in this Commonwealth or elsewhere.

Q. In any proceeding by or against the examinee or any officer or agent of the examinee, the examination report as adopted by the Commission shall be admissible as evidence of the facts stated in the examination report. In any proceeding by or against the examinee the facts asserted in any report properly admitted in evidence shall be presumed to be true in the absence of contrary evidence.

R. The reasonable costs of an examination under this section shall be paid by the examinee except as provided in subsection U of this section. The costs shall include the salary and expenses of each examiner and any other expenses directly apportioned to the examination.

S. The amount payable under subsection R of this section shall become due ten days after the examinee has been served a detailed account of the costs.

T. The Commission may require any examinee, before or during an examination, to deposit with the State Treasurer any deposits the Commission considers necessary to pay the cost of the examination. Any deposit and any payment made under subsections R and S of this section shall be credited to the special fund of the Bureau of Insurance.

U. On the examinee's request or on its own motion, the Commission may pay all or part of the costs of an examination whenever it finds that, because of the frequency of examinations or other factors, imposition of the costs would place an unreasonable burden on the examinee. The Commission shall include in its annual report information about any instance in which it applied this subsection.

V. Deposits and payments under subsections R through U of this section shall not be considered to be a tax or license fee within the meaning of any law. If any other state charges a per diem fee for examination of examinees domiciled in this Commonwealth, any examinee domiciled in that other state shall pay the same fee when examined by the Commission.

1973, c. 504, § 38.1-279.53; 1986, c. 562.

A. Any person aggrieved by an order or a decision of the Commission made under this chapter without a hearing may, within thirty days after notice of the order or decision, make a written request to the Commission for a hearing on that order or decision. Within a reasonable time after the request the Commission, after having given not less than ten days' written notice of the time and place of hearing, shall hear the person aggrieved by the order or decision. Within a reasonable time after the hearing the Commission shall affirm, reverse or modify its previous action, specifying its reasons for the affirmation, reversal or modification.

B. Pending the hearing and decision on its previous action, the Commission may suspend or postpone the effective date of the order or decision to which the hearing relates.

1973, c. 504, § 38.1-279.54; 1986, c. 562.

No person shall willfully withhold information from or knowingly give false or misleading information to (i) the Commission, (ii) any statistical agency designated by the Commission, (iii) any rate service organization or (iv) any insurer, if that information will affect the rates or premiums subject to this chapter.

1973, c. 504, § 38.1-279.55; 1986, c. 562.

The issuance, procurement or negotiation of a single policy of insurance shall be deemed a separate violation.

1973, c. 504, § 38.1-279.56; 1976, c. 279; 1986, c. 562.