Virginia Law

Article 1. In General.

A. Except as otherwise provided by law, no plan shall be organized, conducted or offered in this Commonwealth other than in the manner set forth in this chapter.

B. Nothing contained in this chapter shall prohibit any physician (i) as an individual, (ii) in partnership with other physicians, or (iii) as part of a professional corporation of physicians, from entering into agreements directly with his own patients, or with a parent, guardian, conservator, spouse or other family member acting in a patient's behalf, involving payment for professional services to be rendered or made available in the future.

1979, c. 721, § 38.1-813.1; 1980, c. 682; 1986, c. 562; 1997, c. 801.

As used in this chapter:

"Contract holder" means a person entering into a subscription contract with a nonstock corporation.

"Nonstock corporation" means a foreign or domestic nonstock corporation which is subject to regulation and licensing under this chapter and which offers or administers subscription contracts to contract holders as part of a plan.

"Health services plan" or "plan" means any arrangement for offering or administering health services or similar or related services by a nonstock corporation licensed under this chapter.

"Hospital services plan" means a health services plan for providing hospital and similar or related services.

"Medical or surgical services plan" means a health services plan for providing medical or surgical services or both, and similar or related services.

"Subscriber" means any person entitled to benefits under the terms and conditions of a subscription contract.

"Subscription contract" means a written contract which is issued to a contract holder by a nonstock corporation and which provides health services or benefits for health services on a prepaid basis.

1986, c. 562; 1988, c. 185.

A hospital or a group of hospitals may conduct through a nonstock corporation as agent for them a hospital services plan as defined in § 38.2-4201.

Code 1950, § 32-195.1; 1956, c. 268, § 38.1-810; 1960, c. 357; 1979, c. 721; 1980, c. 682; 1986, c. 562.

A group of physicians may conduct through a nonstock corporation as agent for them a medical or surgical services plan as defined in § 38.2-4201.

Code 1950, § 32-195.2; 1956, c. 268, § 38.1-811; 1960, c. 357; 1979, c. 721; 1980, c. 682; 1986, c. 562.

A nonstock corporation operating a hospital services plan pursuant to § 38.2-4202 may be combined with a nonstock corporation operating a medical or surgical services plan pursuant to § 38.2-4203. The nonstock corporation created by such combination may be licensed to conduct a combination plan furnishing both hospital services and similar or related services and medical or surgical services, or both, and similar or related services.

1979, c. 721, § 38.1-812; 1980, c. 682; 1986, c. 562.

A. Except as otherwise provided in this chapter, Article 11 (§ 13.1-893.1 et seq.) of Chapter 10 of Title 13.1 shall apply to mergers involving corporations licensed under this chapter.

B. Before any joint agreement for the merger of a corporation licensed under this chapter is submitted to the members, it shall first be submitted to and approved by the Commission. The Commission shall approve the agreement, unless, after giving notice and opportunity to be heard, it determines that:

1. After the merger, the new or surviving corporation would not be able to satisfy the requirements of this chapter for the issuance of a license;

2. The effect of the merger would lessen competition substantially or tend to create a monopoly in insurance, prepaid hospital, medical and surgical services plans, or health care benefit plans in this Commonwealth;

3. The financial condition of any party to the merger might jeopardize the financial stability of the new or surviving corporation, or prejudice the interest of the subscribers;

4. Any plans or proposals of the new or surviving corporation to liquidate the new or surviving corporation, sell its assets or merge it with any person, or to make any other material change in its business or corporate structure or management, are unfair and unreasonable to the subscribers and not in the public interest;

5. The competence, experience, and integrity of those persons who would control the operation of the new or surviving corporation are such that it would not be in the interest of the subscribers and of the public to permit the merger; or

6. After the change of control, the new or surviving corporation's surplus to subscribers would not be reasonable in relation to its outstanding liabilities or adequate to its financial needs.

C. The provisions of subsection B notwithstanding, the Commission has the authority to merge two nonstock corporations licensed under this chapter where it finds that (i) one of the corporations is insolvent or is in such condition that its further transaction of business in this Commonwealth is hazardous to subscribers and the public, (ii) that the merger of such nonstock corporation into another nonstock corporation licensed under this chapter is desirable for the protection of its subscribers, and that such merger of such nonstock corporation is in the public interest, and (iii) that an emergency exists, and if the board of directors of the insolvent or financially hazardous nonstock corporation to be merged approves a plan of merger of such nonstock corporation into another nonstock corporation licensed under this chapter, compliance with the requirements of § 13.1-895 shall be dispensed with as to such nonstock corporation and the approval by the Commission of such plan of merger shall be the equivalent of approval of two-thirds of the members for all purposes of Article 11 (§ 13.1-893.1 et seq.) of Chapter 10 of Title 13.1. The Commission shall provide that prompt notice of its findings, and plan of merger be sent to the members of record of such corporation for the purpose of providing such members an opportunity to challenge the findings of the Commission and the plan of merger. The Commission's findings and plan of merger shall become final if a hearing before the Commission is not requested by any member in a written request delivered to the Commission within fifteen days after the notice specified herein is sent.

1986, c. 562.

Dental services and optometric services may be provided by either subscription contract or endorsement in a plan.

1986, c. 562.

Each plan shall be conducted either by or through (i) a nonstock corporation organized pursuant to the laws of this Commonwealth or (ii) a foreign nonstock corporation that is subject to regulation and licensing under the laws of its domiciliary jurisdiction that are substantially similar to those provided by this chapter.

This section shall not apply to any foreign nonstock corporation already licensed in this Commonwealth as of July 1, 1980.

1980, c. 682, § 38.1-813.2; 1986, c. 562.

Any foreign nonstock corporation licensed in the Commonwealth as of July 1, 1980, may conduct a plan directly.

1980, c. 682, § 38.1-813.3; 1986, c. 562.

A. A nonstock corporation may offer or administer a plan without being required to act as an agent for providers of health care services.

B. A nonstock corporation applying for its initial license pursuant to this chapter in order to offer or administer a plan must elect in its application whether to act (i) as agent for providers of health care services, in which case §§ 38.2-4210 and 38.2-4211 shall apply, or (ii) as a nonagent, in which case the provisions of subsection D of this section shall apply.

C. A nonstock corporation operating a plan pursuant to §§ 38.2-4202, 38.2-4203, 38.2-4204 or this section prior to June 30, 1985, and any successor nonstock corporation shall continue to operate as either an agent or nonagent nonstock corporation, in accordance with the manner in which it was operating as of that date, provided that it may petition the Commission to change its status as an agent or nonagent nonstock corporation, and if it does so, it shall give notice of the petition to all interested parties. The Commission shall conduct a hearing on the petition if requested by any interested party. A nonstock corporation seeking to change its status shall make application to the Commission within ninety days following the end of any calendar year. A change in status shall only be effective as to subscriber contracts issued or renewed on and after the date of a change in status. The Commission shall enter an order in response to the nonstock corporation's petition.

D. If any nonstock corporation offers or administers a plan without acting as an agent for providers of health care services, the Commission may elect to (i) require the nonstock corporation to maintain its contingency reserves above a minimum level set by the Commission, or (ii) subject the nonstock corporation, notwithstanding the provisions of § 38.2-1700, to the requirements of Chapter 17 of this title, or (iii) both. The minimum level for contingency reserves shall not exceed forty-five days of the anticipated operating expenses and incurred claims expense generated from subscription contracts issued by the nonstock corporation, and shall be computed as the Commission requires.

Code 1950, § 32-195.5:1; 1972, c. 429, § 38.1-816; 1974, c. 54; 1979, c. 721; 1980, c. 682; 1982, c. 129; 1983, c. 464, § 38.1-813.4; 1985, c. 233; 1986, c. 562; 1988, c. 185.

A. As used in this section, a "preferred provider subscription contract" is a contract that specifies how services are to be covered when rendered by providers participating in a plan, by nonparticipating providers, and by preferred providers.

B. Notwithstanding the provisions of §§ 38.2-4218 and 38.2-4221, any nonstock corporation may, as a feature of its plan, offer preferred provider subscription contracts pursuant to the requirements of this section that limit the numbers and types of providers of health care services eligible for payment as preferred providers.

C. Any such nonstock corporation shall establish terms and conditions that shall be met by a hospital, physician or other type of provider listed in § 38.2-4221 in order to qualify for payment as a preferred provider under the subscription contracts. These terms and conditions shall not discriminate unreasonably against or among health care providers. No hospital, physician or type of provider listed in § 38.2-4221 willing to meet the terms and conditions offered to it or him shall be excluded. Differences in prices among hospitals or other institutional providers produced by a process of individual negotiations with the providers or based on market conditions, or price differences among providers in different geographical areas shall not be deemed unreasonable discrimination. The Commission shall have no jurisdiction to adjudicate controversies growing out of this subsection.

D. Mandated types of providers listed in § 38.2-4221 and types of providers whose services are required to be made available and which have been specifically contracted for by the holder of any subscription contract shall, to the extent required by § 38.2-4221, have the same opportunity as do doctors of medicine to qualify for payment as preferred providers.

E. Preferred provider subscription contracts shall provide for payment for services rendered by nonpreferred providers, but the payments need not be the same as for preferred providers.

F. No contract between a nonstock corporation and a provider shall include provisions which require a health care provider or health care provider group to deny covered services that such provider or group knows to be medically necessary and appropriate that are provided with respect to a specific enrollee or group of enrollees with similar medical conditions.

1983, c. 464, § 38.1-813.4; 1986, c. 562; 1999, cc. 643, 649.

A. Notwithstanding any provision of § 38.2-4209, no corporation providing preferred provider subscription contracts or its pharmacy benefits manager, as defined in § 38.2-3465, shall prohibit any person receiving pharmaceutical benefits, including specialty pharmacy benefits, thereunder from selecting, without limitation, the pharmacy of his choice to furnish such benefits. This right of selection extends to and includes pharmacies that are nonpreferred providers and that have previously notified the corporation or its pharmacy benefits manager, by facsimile or otherwise, of their agreement to accept reimbursement for their services at rates applicable to pharmacies that are preferred providers, including any copayment consistently imposed by the corporation, as payment in full. Each corporation or its pharmacy benefits manager shall permit prompt electronic or telephonic transmittal of the reimbursement agreement by the pharmacy and ensure payment verification to the pharmacy of the terms of reimbursement. In no event shall any person receiving a covered pharmacy benefit from a nonpreferred provider that has submitted a reimbursement agreement be responsible for amounts that may be charged by the nonpreferred provider in excess of the copayment and the corporation's reimbursement applicable to all of its preferred pharmacy providers.

B. No such corporation or its pharmacy benefits manager shall impose upon any person receiving pharmaceutical benefits furnished under any such contract:

1. Any copayment, fee or condition that is not equally imposed upon all individuals in the same benefit category, class or copayment level, whether or not such benefits are furnished by pharmacists who are nonpreferred providers;

2. Any monetary penalty that would affect or influence any such person's choice of pharmacy; or

3. Any reduction in allowable reimbursement for pharmacy services related to utilization of pharmacists who are nonpreferred providers.

C. For purposes of this section, a prohibited condition or penalty shall include, without limitation: (i) denying immediate access to electronic claims filing to a pharmacy that is a nonpreferred provider and that has complied with subsection D or (ii) requiring a person receiving pharmacy benefits to make payment at point of service, except to the extent such conditions and penalties are similarly imposed on preferred providers.

D. Any pharmacy that wishes to be covered by this section shall, if requested to do so in writing by a corporation or its pharmacy benefits manager, within 30 days of the pharmacy's receipt of the request, execute and deliver to the corporation or its pharmacy benefits manager the direct service agreement or preferred provider agreement that the corporation requires all of its preferred providers of pharmacy benefits to execute. Any pharmacy that fails to timely execute and deliver such agreement shall not be covered by this section with respect to that corporation or its pharmacy benefits manager unless and until the pharmacy executes and delivers the agreement. No pharmacy shall be precluded from obtaining a direct service agreement or participating provider agreement for any retail and specialty pharmacy if the pharmacy meets the terms and conditions of participation. Any request by a pharmacy for a direct service agreement or a participating provider agreement shall be acted upon by a corporation or its pharmacy benefits manager within 60 days of receipt of the pharmacy's request or any subsequent submission of supplemental information if requested by the corporation or its pharmacy benefits manager.

E. The Commission shall have no jurisdiction to adjudicate controversies arising out of this section.

F. Nothing in this section shall limit the authority of a corporation issuing preferred provider policies or contracts to select a single mail order pharmacy provider as the exclusive provider of pharmacy services that are delivered to the covered person's address by mail, common carrier, or delivery service. The provisions of this section shall not apply to such contracts. As used in this subsection, "mail order pharmacy provider" means a pharmacy permitted to conduct business in the Commonwealth whose primary business is to dispense a prescription drug or device under a prescriptive drug order and to deliver the drug or device to a patient primarily by mail, common carrier, or delivery service.

1994, c. 963; 1995, c. 467; 2010, cc. 157, 357; 2021, Sp. Sess. I, c. 229.

Repealed by Acts 1995, c. 467.

A. All hospitals, persons, nonstock corporations, and physicians participating in a plan shall be jointly and severally liable on all contracts made for the purposes of the plan by the nonstock corporation as agent for them. Each contract may be executed and signed by their agent on their behalf. A contract so signed shall be binding on the principals and not on the agent.

B. Actions for breach of these contracts may be brought against the principals by naming the agent as the sole defendant. A judgment in favor of the plaintiff may be satisfied out of the assets of the nonstock corporation or out of the assets of each of the principals.

C. Each participant shall be liable for his own torts and not for the torts of any other participant or of the agent.

Code 1950, § 32-195.4; 1956, c. 268, § 38.1-814; 1972, c. 429; 1979, c. 721; 1980, c. 682; 1986, c. 562.

A. Any participating hospital, person, nonstock corporation or physician may resign from a plan at any time but will continue to be liable on each subscription contract then in effect. However, this liability shall not extend beyond the end of each such subscription contract's current contract year.

B. Hospitals, persons, nonstock corporations and physicians may be admitted to a plan at any time and will then automatically become liable on all its outstanding contracts.

Code 1950, § 32-195.5; 1956, c. 268, § 38.1-815; 1972, c. 429; 1979, c. 721; 1986, c. 562.

A. Notwithstanding the provisions of §§ 13.1-853, 13.1-854 and 13.1-855, a nonstock corporation operating a plan pursuant to §§ 38.2-4202, 38.2-4203, 38.2-4204, or § 38.2-4208 shall be subject to the following:

1. The board of directors of the nonstock corporation shall consist of no more than fifteen members. However, if two or more nonstock corporations merge, the board of directors of the new or surviving nonstock corporation may consist of no more than twenty members. Further, the board of directors may be increased to a size not exceeding the aggregate number of directors on the merging nonstock corporations' boards for the balance of the year in which merger occurs and for the following five years.

2. Except as permitted by subsection B of this section, a majority of the members of the board of directors of the nonstock corporation shall be persons who are covered by subscription contracts issued by the nonstock corporation and who are not providers of health care services, or employees or salaried officers of the nonstock corporation.

B. Notwithstanding the provisions of §§ 13.1-853, 13.1-854 and 13.1-855, any nonstock corporation operating a plan pursuant to § 38.2-4203 may have a board of directors consisting of a majority of providers of health care services.

C. As used in this section, "providers of health care services" shall include, but not be limited to, physicians, pharmacists, nurses, physical therapists, hospital administrators, employees or majority or controlling stockholders of hospitals, and other persons furnishing health-related services.

D. This section shall not apply to any foreign nonstock corporation licensed in this Commonwealth on or before July 1, 1980.

Code 1950, §§ 32-195.5:1, 32-195.5:2; 1972, c. 429, §§ 38.1-816, 38.1-817; 1974, c. 54; 1979, c. 721; 1980, c. 682; 1982, c. 129; 1985, c. 233; 1986, c. 562.

If two or more nonstock corporations merge, §§ 38.2-4210 and 38.2-4211 shall not apply to the new or surviving nonstock corporation, its plans or its providers unless the nonstock corporations to be merged notify the Commission in writing at least thirty days prior to the date of the merger that the new or surviving nonstock corporation will remain subject to §§ 38.2-4210 and 38.2-4211. If notice is not given, the Commission may (i) require the new or surviving nonstock corporation to maintain its contingency reserves above minimum level, (ii) subject it, notwithstanding the provisions of § 38.2-1700, to the requirements of Chapter 17 of this title or (iii) both. The minimum level of contingency reserves shall not exceed thirty days of anticipated operating expenses and claims receipts computed as the Commission requires. If the nonstock corporation elects not to file the notice permitted by this section, the nonstock corporation and not its providers shall be liable for the obligations of the plan.

Code 1950, § 32-195.5:1; 1972, c. 429, § 38.1-816; 1974, c. 54; 1979, c. 721; 1980, c. 682; 1982, c. 129; 1985, c. 233; 1986, c. 562.

No provision of this title except this chapter and, insofar as they are not inconsistent with this chapter, §§ 38.2-200, 38.2-203, 38.2-209 through 38.2-213, 38.2-218 through 38.2-225, 38.2-230, 38.2-232, 38.2-305, 38.2-316, 38.2-316.1, 38.2-316.2, 38.2-322, 38.2-325, 38.2-326, 38.2-400, 38.2-402 through 38.2-413, 38.2-500 through 38.2-515, 38.2-600 through 38.2-629, 38.2-700 through 38.2-705, 38.2-900 through 38.2-904, 38.2-1017, 38.2-1018, 38.2-1038, and 38.2-1040 through 38.2-1044, Articles 1 (§ 38.2-1300 et seq.) and 2 (§ 38.2-1306.2 et seq.) of Chapter 13, §§ 38.2-1312, 38.2-1314, 38.2-1315.1, 38.2-1317 through 38.2-1328, 38.2-1334, 38.2-1340, 38.2-1400 through 38.2-1442, 38.2-1446, 38.2-1447, 38.2-1800 through 38.2-1836, 38.2-3400, 38.2-3401, 38.2-3404, 38.2-3405, 38.2-3405.1, 38.2-3406.1, 38.2-3406.2, 38.2-3407.1 through 38.2-3407.6:1, 38.2-3407.9 through 38.2-3407.20, 38.2-3409, 38.2-3411 through 38.2-3419.1, and 38.2-3430.1 through 38.2-3454, Articles 8 (§ 38.2-3461 et seq.) and 9 (§ 38.2-3465 et seq.) of Chapter 34, §§ 38.2-3501 and 38.2-3502, subdivision 13 of § 38.2-3503, subdivision 8 of § 38.2-3504, §§ 38.2-3514.1 and 38.2-3514.2, §§ 38.2-3516 through 38.2-3520 as they apply to Medicare supplement policies, §§ 38.2-3522.1 through 38.2-3523.4, 38.2-3525, 38.2-3540.1, 38.2-3541, 38.2-3541.2, 38.2-3542, and 38.2-3543.2, Article 5 (§ 38.2-3551 et seq.) of Chapter 35, Chapter 35.1 (§ 38.2-3556 et seq.), §§ 38.2-3600 through 38.2-3607 and 38.2-3610, Chapter 52 (§ 38.2-5200 et seq.), Chapter 55 (§ 38.2-5500 et seq.), Chapter 58 (§ 38.2-5800 et seq.), Chapter 65 (§ 38.2-6500 et seq.), and Chapter 66 (§ 38.2-6600 et seq.) shall apply to the operation of a plan.

Code 1950, § 32-195.8; 1956, c. 268, § 38.1-818; 1960, c. 357; 1973, c. 28; 1975, c. 281; 1976, c. 355; 1977, cc. 606, 607; 1978, c. 496; 1979, cc. 47, 97, 721, 726; 1980, cc. 682, 719; 1981, c. 575; 1982, c. 577; 1983, c. 457; 1984, c. 718; 1986, cc. 550, 562; 1987, cc. 565, 655; 1989, cc. 606, 653; 1990, cc. 301, 393, 439, 531, 795, 802, 826; 1991, c. 369; 1992, c. 800; 1993, cc. 158, 306, 307; 1994, cc. 213, 320, 374, 522; 1995, cc. 420, 522; 1996, cc. 550, 776, 967; 1997, cc. 688, 807, 913; 1998, cc. 154, 891, 908; 1999, cc. 643, 649, 709, 739, 856, 857, 923; 2000, cc. 47, 50, 187, 532, 540, 922; 2004, c. 315; 2006, c. 427; 2009, cc. 796, 877; 2010, cc. 504, 583, 734; 2011, cc. 788, 882; 2012, cc. 634, 641; 2013, cc. 670, 679, 751; 2015, cc. 14, 723; 2016, c. 475; 2019, cc. 661, 662, 666, 684; 2020, cc. 219, 264, 916, 917, 1161, 1288; 2021, Sp. Sess. I, c. 480; 2024, cc. 319, 345.

Any rehabilitation, liquidation, or conservation of a health services plan shall be deemed to be the rehabilitation, liquidation, or conservation of an insurer and shall be subject to the provisions of Chapter 15 (§ 38.2-1500 et seq.) of Title 38.2.

1990, c. 331.

No payments shall be made by a nonstock corporation to a person included in a subscription contract unless the payment is for breach of contract or for contractually included costs incurred by that person or for services received by that person and rendered by a nonparticipating hospital or nonparticipating health care provider.

In no case shall that person be denied the right to assign his rights to benefits, except that denial may be made where the benefit is eighty percent of covered charges or greater.

Code 1950, § 32-195.8; 1956, c. 268, § 38.1-818; 1960, c. 357; 1973, c. 28; 1975, c. 281; 1976, c. 355; 1977, cc. 606, 607; 1978, c. 496; 1979, cc. 47, 97, 721, 726; 1980, cc. 682, 719; 1981, c. 575; 1982, c. 577; 1983, c. 457; 1984, c. 718; 1986, c. 562.

Repealed by Acts 1987, cc. 565, 655.

Repealed by Acts 2013, cc. 136 and 210, cl. 2, effective January 1, 2014.

A. In addition to the annual statement required by § 38.2-1300, the Commission shall require each nonstock corporation to file on a quarterly basis any additional reports, exhibits or statements the Commission considers necessary to furnish full information concerning the condition, solvency, experience, transactions or affairs of the nonstock corporation. The Commission shall establish deadlines for submitting any additional reports, exhibits or statements. The Commission may require verification by any officers of the nonstock corporation the Commission designates.

B. In addition to the annual statement required by § 38.2-1300, the Commission shall require each nonstock corporation to file annually, on or before June 1, an annual statement, signed by two of its principal officers subject to § 38.2-1304, showing:

1. The number of Virginia subscribers by the following type of contract or its equivalent:

a. Individual, open enrollment; and

b. Medicare, extended, under 65 disabled;

2. The subscriber income and benefit payments in the aggregate for the types of contracts listed above subject to specific breakdown by type of contract as requested by the Commission; and

3. Expenditures for providing public services, in addition to open enrollment, to the community.

Code 1950, § 32-195.8:1; 1972, c. 429, § 38.1-819; 1979, c. 721; 1986, c. 562; 1987, cc. 565, 655; 1997, cc. 807, 913; 2014, c. 814.

A plan shall be organized and operated to assure that any subscriber shall have free choice of the medical practitioners available and participating in the plan.

Code 1950, § 32-195.8:2; 1972, c. 429, § 38.1-820; 1979, c. 721; 1986, c. 562.

A nonstock corporation shall, prior to and during the term of the subscription contract, fully, fairly and currently advise the subscriber in writing of the benefits available under the contract and all limitations on the benefits available under the contract.

Code 1950, § 32-195.8:3; 1972, c. 429, § 38.1-821; 1979, c. 721; 1980, c. 682; 1986, c. 562.

A nonstock corporation may enter into contracts with similar nonstock corporations for the interchange of services to those included in subscription contracts and may provide in subscription contracts for the substitution of services instead of those recited in its subscription contracts. However, no corporation shall enter into any contract to acquire or to attempt to acquire control, as defined in § 38.2-1322, of any person or enter into any material transaction, as defined in § 38.2-1322, if such contract or transaction would jeopardize or adversely affect the interests of the corporation's subscribers as determined by the Commission.

Code 1950, § 32-195.10; 1956, c. 268, § 38.1-823; 1979, c. 721; 1986, c. 562.

A. A nonstock corporation shall not fail or refuse, either directly or indirectly, to allow or to pay to a subscriber for all or any part of the health services rendered by any doctor of podiatry, doctor of chiropody, optometrist, optician, chiropractor, professional counselor, psychologist, physical therapist, clinical social worker, clinical nurse specialist, audiologist, speech pathologist, certified nurse midwife or other advanced practice registered nurse, marriage and family therapist, athletic trainer, or licensed acupuncturist licensed to practice in Virginia, if the services rendered (i) are services provided for by the subscription contract; (ii) are services which the doctor of podiatry, doctor of chiropody, optometrist, optician, chiropractor, professional counselor, psychologist, physical therapist, clinical social worker, clinical nurse specialist, audiologist, speech pathologist, certified nurse midwife or other advanced practice registered nurse, marriage and family therapist, athletic trainer, or licensed acupuncturist is licensed to render in this Commonwealth; and (iii) are, for any services rendered by an athletic trainer, rendered in an office setting.

B. If a subscription contract provides reimbursement for a service that may be legally performed by a licensed pharmacist, reimbursement under the subscription contract by the nonstock corporation shall not be denied because the service is rendered by the licensed pharmacist provided that (i) the service is performed for a subscriber for a condition under the terms of a collaborative agreement, as defined in § 54.1-3300, between a pharmacist and the physician with whom the subscriber is undergoing a course of treatment or (ii) the service is for the administration of vaccines for immunization. Notwithstanding the provisions of § 38.2-4209, the nonstock corporation may require the pharmacist, any pharmacy or provider that may employ such pharmacist, or the collaborating physician to enter into a written agreement with the nonstock corporation as a condition for reimbursement for such services. In addition, reimbursement to pharmacists acting under the terms of a collaborative agreement under this subsection shall not be subject to the provisions of § 38.2-4209.1.

Code 1950, § 32-195.10:1; 1966, c. 276, § 38.1-824; 1973, c. 428; 1979, cc. 13, 721; 1980, c. 682; 1986, c. 562; 1987, cc. 549, 551, 557; 1988, c. 522; 1989, cc. 7, 201; 1997, c. 203; 1998, c. 146; 2001, cc. 102, 475; 2019, cc. 332, 333; 2020, c. 726; 2022, cc. 440, 441; 2023, c. 183.

A. No person shall deliver or issue for delivery in this Commonwealth a subscription contract without a license issued by the Commission. Each nonstock corporation shall apply for a license and furnish any relevant information the Commission requires. Each license shall expire at midnight on the following June 30. Application for a license shall be accompanied by a nonrefundable application fee of $500.

B. The Commission may refuse to issue or renew a license to a nonstock corporation if it is not satisfied that the financial condition, the method of operation, and the manner of doing business of the nonstock corporation enable it to meet its contractual obligations to all subscribers and that the nonstock corporation has otherwise complied with all the requirements of law.

Code 1950, § 32-195.11; 1956, c. 268, § 38.1-825; 1978, c. 4; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1987, cc. 565, 655; 1988, c. 185; 1994, c. 503.

A. Each nonstock corporation shall renew its license with the Commission annually by July 1. The renewal license shall not be issued unless the nonstock corporation has complied with all requirements of law.

B. The Commission shall not fail or refuse to renew the license of any nonstock corporation without first giving the nonstock corporation ten days' notice of its intention not to renew the license and giving the nonstock corporation an opportunity to be heard and introduce evidence in its behalf. Any such hearing may be informal, and the required notice may be waived by the Commission and the nonstock corporation.

Code 1950, § 32-195.12; 1956, c. 268, § 38.1-826; 1978, c. 4; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1987, cc. 565, 655.

Subscription contracts may be solicited only through life and health insurance agents licensed in accordance with Chapter 18 of this title. Home office salaried officers whose principal duties and responsibilities do not include the negotiation or solicitation of subscription contracts shall not be required to be licensed.

Code 1950, § 32-195.13; 1956, c. 268, § 38.1-827; 1978, c. 4; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1999, c. 86.

Repealed by Acts 1987, cc. 565, 655.

Except as provided by Chapter 4 of this title, the license tax paid by a nonstock corporation under Chapter 25 of Title 58.1 shall be in lieu of all other state and local license fees or license taxes and state income taxes of the nonstock corporation.

Code 1950, § 32-195.15; 1956, c. 268, § 38.1-828; 1969, Ex. Sess., c. 26; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1987, cc. 565, 655.

In the operation of a plan, no person shall use any misleading subscription applications or contracts.

Code 1950, § 32-195.16; 1956, c. 268, § 38.1-829; 1960, c. 357; 1979, c. 721; 1986, c. 562.

The Commission shall have no jurisdiction to adjudicate controversies growing out of subscription contracts. A breach of contract shall not be deemed a violation of this chapter.

Code 1950, § 32-195.20; 1956, c. 268, § 38.1-833; 1979, c. 721; 1986, c. 562.

Any nonstock corporation licensed under this chapter may by policy, treaty or other agreement cede to any insurer reinsurance upon the whole or any part of any risk, with or without contingent liability or participation, and if a mutual insurer, with or without membership therein.

1986, c. 562.

A. Any domestic nonstock corporation subject to the provisions of this chapter that has the surplus required by § 38.2-1030 for domestic mutual insurers issuing policies without contingent liability may, at its option and without reincorporation, convert to a domestic mutual insurer by following the procedure set forth in this section.

B. Any nonstock corporation eligible to convert to a domestic mutual insurer under subsection A may effect such conversion by amending its articles of incorporation to delete any reference to this chapter and to comply with the provisions of § 38.2-1002 relating to the articles of incorporation of a domestic mutual insurer. Upon the issuance of a certificate of amendment by the Commission, the conversion shall be effective, such nonstock corporation shall become subject to all of the provisions of this title relating to domestic mutual insurers, and such nonstock corporation shall no longer be subject to the provisions of this chapter.

C. If any nonstock corporation converts from a health services plan organized under this chapter to a domestic mutual insurer, then at least 90 days prior to the effective date of conversion, the nonstock corporation shall comply with § 38.2-316 by filing with the Commission copies of all policies of insurance that it proposes to issue after the effective date of conversion. All subscription contracts issued and outstanding as of the effective date of conversion shall remain in force in accordance with their terms until the expiration or termination of such contracts.

D. No policy of accident and sickness insurance issued by a nonstock corporation after its conversion to a domestic mutual insurer shall deny the policyholder the right to assign his benefit, except that denial may be made where the benefit is 80 percent of covered charges or greater.

1991, c. 87; 1992, c. 473; 1994, c. 294; 1997, cc. 807, 913; 2013, cc. 136, 210.

A. If another state enacts a law or takes any other regulatory action that requires a health services plan operating in the Commonwealth to provide a program or benefits for the residents of the other state or to distribute or reduce its surplus on grounds that it is excessive in whole or in part, the Commission shall conduct a proceeding to review and evaluate the impact of the law or action on the health services plan. The Commission shall direct the Commissioner to conduct an examination of the health service plan in accordance with Article 4 (§ 38.2-1317 et seq.) of Chapter 13 and report its findings to the Commission, including the impact on (i) surplus; (ii) premium rates for residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state; and (iii) solvency.

B. Based on the findings of the Commissioner, the Commission shall determine whether the impact on the health services plan is harmful to the interests of residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state.

C. If the Commission determines the program or benefits for the residents of another state or the surplus distribution or reduction has an impact on the health services plan that is harmful to the interests of residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state, the Commission shall issue an appropriate order to protect such residents of the Commonwealth. The order may include:

1. A prohibition on the health services plan subsidizing the program or benefits for the residents of another state through:

a. Premiums charged or otherwise allocable to residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state; or

b. The use of any earned surplus attributable to residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state;

2. A prohibition on the health services plan's distributing or reducing its surplus for the benefit of residents of another state; or

3. Any other action the Commission finds necessary to protect the interests of the residents of the Commonwealth.

The determination of premiums charged or otherwise allocable to residents of the Commonwealth and the determination of surplus attributable to residents of the Commonwealth in each case covered by policies issued or delivered either in the Commonwealth or in any other state shall be based upon the number of residents in the Commonwealth compared with the number of residents in other states covered by the policies of the health services plan.

D. No health services plan shall distribute or reduce its surplus pursuant to a law or regulatory action the impact of which is subject to a proceeding under subsection A except with the approval of the Commission after the examination required by this section.

2010, c. 704; 2015, cc. 519, 520.