Virginia Law

This chapter applies to cooperative nonprofit life benefit companies as defined in § 38.2-3801 and to the classes of insurance and insurance benefits those companies are authorized to provide.

1952, c. 317, § 38.1-496; 1986, c. 562.

A. Any company that (i) is organized without capital stock, (ii) has a representative form of government, (iii) conducts its business under the provisions of this chapter without profit and for the sole benefit of its members and their beneficiaries, (iv) issues benefit certificates or policies of life insurance, annuities, or accident and sickness insurance, or any combination of those classes of insurance, upon its members, and (v) maintains the reserves required in this chapter on all contracts issued by it to its members, shall be a cooperative nonprofit life benefit company.

B. As used in this chapter, "company" means a cooperative nonprofit life benefit company as defined in subsection A of this section.

Code 1950, § 38-467; 1952, c. 317, § 38.1-497; 1986, c. 562.

Any company licensed and doing business in this Commonwealth on July 1, 1952, may continue to do business in accordance with the powers contained in its certificate of incorporation, subject to the provisions of this chapter, but no such company shall be permitted to extend its powers.

1952, c. 317, § 38.1-498; 1986, c. 562.

Any company that was not licensed and doing business in this Commonwealth on July 1, 1952, shall not be issued a license to do the business of insurance in this Commonwealth. On or after July 1, 1952, only a renewal of a license held by the company for the preceding year will be issued.

1952, c. 317, § 38.1-499; 1986, c. 562.

All companies shall comply with all of the provisions of this title relating to insurance companies generally. In the event of conflict between the provisions of this chapter and other provisions of this title, the provisions of this chapter shall be controlling.

1952, c. 317, § 38.1-502; 1986, c. 562.

Each company shall make a constitution, laws or bylaws for its government, the admission of its members, the management of its affairs and the fixing and readjustment of the rates of contribution of its members. It may change, add to, or amend the constitution, laws or bylaws and shall have the other powers necessary and incidental to effect the objects and purposes of the company. It may make refunds to its members from any surplus funds of the company, but it may only increase rates or make extra assessments against members whose contracts include provisions for rate increases and extra assessments.

Code 1950, § 38-478; 1952, c. 317, § 38.1-503; 1986, c. 562.

Each company shall provide in its constitution, laws or bylaws for:

1. A representative form of government for the management of the company, to be carried on either with or without a lodge, or with membership in the lodge optional;

2. A legislative or governing body composed of its officers and representatives to be elected either by the adult members or by delegates elected directly or indirectly by the adult members; and

3. The manner of selecting representatives of the members for membership in its legislative body.

Code 1950, § 38-479; 1952, c. 317, § 38.1-504; 1986, c. 562.

The governing body of each company shall meet at least once every four years. Meetings of the governing body may be held in any state where the company is authorized to do business. The members of the governing body shall not vote by proxy.

A board of directors to conduct the business of the company shall be elected by the governing body for a period of not more than four years or until the next quadrennial meeting of the body. The board of directors shall elect the officers to conduct the business of the company under its direction. No officer shall be elected for a period beyond that for which the board of directors has been elected.

Code 1950, § 38-480; 1952, c. 317, § 38.1-505; 1986, c. 562.

Each company shall file with the Commission a duly certified copy of its constitution, laws or bylaws and all amendments or additions. Printed copies of the constitution, laws or bylaws, certified by the secretary or corresponding officer of the company, shall be prima facie evidence of their legal adoption and filing.

Code 1950, § 38-481; 1952, c. 317, § 38.1-506; 1986, c. 562.

Any company filing with the Commission a resolution of its board of directors or similar body, or of its legislative body, making a request to become a legal reserve life insurer, upon submitting proof satisfactory to the Commission that the request is properly authorized and that the condition of its business qualifies it under the laws of this Commonwealth to be classed as a legal reserve life insurer, shall become a legal reserve life insurer under the name and the plan provided by proper amendment of its charter or certificate of incorporation.

Code 1950, § 38-477; 1952, c. 317, § 38.1-507; 1986, c. 562.

Any company may maintain homes for aged members, or children's homes, hospitals or recreational centers, or any other charitable institution, and may provide for the erection of monuments or memorials to deceased members. Such a company is hereby classified as a charitable institution.

Code 1950, § 38-482; 1952, c. 317, § 38.1-508; 1986, c. 562.

Any money, other benefit, charity, relief or aid to be paid, provided or rendered by any company shall not be liable to attachment, garnishment or other process, or be seized, taken, appropriated or applied by any legal or equitable process or operation of law to pay any debt or liability of a member, his beneficiary, or any other person who may have a right thereunder, either before or after payment.

Code 1950, § 38-493; 1952, c. 317, § 38.1-510; 1986, c. 562.

The officers of each company shall, at the time of making the annual statement, file with the Commission a sworn statement of its gross premium receipts collected from members residing in this Commonwealth for the preceding year ending December 31. Each company shall pay into the state treasury by March 1 of each year, a tax of one percent on its collected gross premiums. The tax shall be in lieu of all other taxes, state, county or municipal, based on such gross premium receipts. No city, town, municipality or other subdivision of the Commonwealth shall impose any license fee on the company or any of its agents for the privilege of conducting business in any portion of this Commonwealth. In determining such gross premium receipts, the company shall not take credit for any expenditures.

Code 1950, § 38-494; 1952, c. 317, § 38.1-511; 1986, c. 562; 1987, cc. 565, 655.

A suit or an action at law may be instituted against any company in any county or city in this Commonwealth.

Code 1950, § 38-495; 1950, p. 242; 1952, c. 317, § 38.1-512; 1986, c. 562.

All contracts of any company for insurance or other benefits shall be in writing. No company or any of its officers or agents shall include in the sum charged a member, any fee, compensation, or other charge. However, a local medical examiner's fee and a policy fee on accident and sickness contracts may be charged.

Code 1950, § 38-484; 1952, c. 317, § 38.1-514; 1986, c. 562.

Any company may provide for (i) stipulated premiums, (ii) death, annuity, endowment and disability benefits, and (iii) cash surrender and loan values to an amount not exceeding the reserve, or its equivalent, in paid-up or extended term insurance, based upon the mortality standards set forth in this chapter.

Code 1950, § 38-483; 1952, c. 317, § 38.1-515; 1986, c. 562.

Any company may issue contracts of life, accident and sickness insurance or combinations of them. The reserves for such policies or contracts shall be based upon the American Experience Table of Mortality, with an interest assumption of no more than four percent, or some higher standard, or upon any minimum standard allowed by law in this Commonwealth for legal reserve life insurers. It may provide in its laws or bylaws and membership contracts that the rates shall not be increased or extra assessments made.

Code 1950, § 38-488; 1952, c. 317, § 38.1-516; 1986, c. 562.

Any company shall provide for automatic paid-up or extended term insurance in the event of the default in premium payments of any contract that has been in force for at least two years from the date of issue. The amount of such insurance shall not exceed the amount which the reserve that is credited to the member will purchase. The company shall carry the liability on its books.

Code 1950, § 38-486; 1952, c. 317, § 38.1-517; 1986, c. 562.

Officers and members of the supreme, grand or any subordinate body of any company shall not be individually liable for the payment of any disability or death or other benefits provided for in the laws, bylaws and contracts of the company. Benefits shall be payable out of the funds of the company and in the manner provided by its laws and bylaws.

Code 1950, § 38-487; 1952, c. 317, § 38.1-519; 1986, c. 562.