38.2-203 - Management and exclusive agency contracts subject to approval by Commission. - Virginia Statutes

§ 38.2-203. Management and exclusive agency contracts subject to approval byCommission.

A. For the purpose of this section, an insurer shall mean a stock or mutualinsurer, cooperative nonprofit life benefit company, mutual assessment life,accident and sickness insurer, burial society, fraternal benefit society,mutual assessment property and casualty insurer, home protection company,health maintenance organization, premium finance company or a person licensedunder Chapter 42 (§ 38.2-4200 et seq.), 44 (§ 38.2-4400 et seq.) or 45 (§38.2-4500 et seq.) of this title, incorporated or organized under the laws ofthis Commonwealth.

B. No insurer shall make or enter into any contract that provides for thecontrol and management of the insurer, or the controlling or preemptive rightto produce substantially all insurance business for the insurer, unless thecontract has been filed with and approved by the Commission and approval hasnot been withdrawn by the Commission. Any approval, disapproval, orwithdrawal of approval shall be delivered to the insurer in writing. Thenotice of disapproval or withdrawal of approval shall state the grounds ofsuch action and shall be delivered to the insurer at least fifteen daysbefore the effective date.

C. The Commission may disapprove or withdraw approval of any contractreferred to in this section that:

1. Subjects the insurer to excessive charges for expenses or commissions;

2. Does not contain fair and adequate standards of performance;

3. Extends for an unreasonable length of time; or

4. Contains other inequitable provisions or provisions that may jeopardizethe security of policyholders.

D. The provisions of this section shall not affect contracts made before June30, 1954, but shall apply to all renewals of those contracts made after thatdate.

E. Any insurer aggrieved by a disapproval or withdrawal of approval underthis section may proceed under the provisions of § 38.2-222.

(1954, c. 363, § 38.1-29.1; 1986, c. 562; 1998, c. 42.)