Virginia Code 38.2-1715: Prohibited advertisement of Association coverage in insurance sales; notice to policy owners
A. No person, including a member insurer, agent, or affiliate of a member insurer, shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine, or other publication, or in the form of a notice, circular, pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any advertisement, announcement, or statement, written or oral, that uses the existence of the Association of the Commonwealth for the purpose of sales, solicitation, or inducement to purchase any form of insurance or other coverage covered by this chapter. This subsection shall not apply to the Association or any other entity that does not sell or solicit insurance or coverage by a health maintenance organization.
Terms Used In Virginia Code 38.2-1715
- Association: means the Virginia Life, Accident and Sickness Insurance Guaranty Association created under § 38. See Virginia Code 38.2-1701
- Bureau of Insurance: means the division of the Commission established to administer the insurance laws of the Commonwealth. See Virginia Code 38.2-100
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Complaint: A written statement by the plaintiff stating the wrongs allegedly committed by the defendant.
- Contract: A legal written agreement that becomes binding when signed.
- contract owner: means the person who is identified as the legal owner under the terms of the policy or contract or who is otherwise vested with legal title to the policy or contract through a valid assignment completed in accordance with the terms of the policy or contract and properly recorded as the owner on the books of the member insurer. See Virginia Code 38.2-1701
- Evidence: Information presented in testimony or in documents that is used to persuade the fact finder (judge or jury) to decide the case for one side or the other.
- Freedom of Information Act: A federal law that mandates that all the records created and kept by federal agencies in the executive branch of government must be open for public inspection and copying. The only exceptions are those records that fall into one of nine exempted categories listed in the statute. Source: OCC
- Insurer: means an insurance company. See Virginia Code 38.2-100
- Member insurer: means an insurer or health maintenance organization licensed to transact in the Commonwealth any class of insurance or health maintenance organization business to which this chapter applies under § 38. See Virginia Code 38.2-1701
- Person: means any association, aggregate of individuals, business, company, corporation, individual, joint-stock company, Lloyds type of organization, organization, partnership, receiver, reciprocal or interinsurance exchange, trustee or society. See Virginia Code 38.2-100
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
B. The Association shall prepare a summary document describing the general purposes and current limitations of this chapter and that complies with subsection C. This document shall be submitted to the Commission for approval. At the expiration of the sixtieth day after the date on which the Commission approves the document, a member insurer may not deliver a policy or contract to a policy owner, contract owner, certificate holder, or enrollee unless the summary document is delivered to the policy owner, contract owner, certificate holder, or enrollee at the time of delivery of the policy or contract. The document shall be posted on the Association’s website and shall also be available upon request by a policy owner, contract owner, certificate holder, or enrollee. The distribution, delivery, or contents or interpretation of this document does not guarantee that either the policy or the contract or the policy owner, contract owner, certificate holder, or enrollee is covered in the event of the impairment or insolvency of a member insurer. The summary document shall be revised by the Association as amendments to the chapter may require. Failure to receive this document does not give the policy owner, contract owner, certificate owner, certificate holder, enrollee, or insured any greater rights than those stated in this chapter.
C. The document prepared under subsection B shall contain a clear and conspicuous disclaimer on its face. The Commission shall establish the form and content of the disclaimer. The disclaimer shall:
1. State the name and address of the Association and the Bureau of Insurance;
2. Prominently warn the policy owner, contract owner, certificate holder, or enrollee that the Association may not cover the policy or contract or, if coverage is available, it will be subject to substantial limitations and exclusions and conditioned on continued residence in the Commonwealth;
3. State the types of policies or contracts for which guaranty funds will provide coverage;
4. State that the member insurer and its agents are prohibited by law from using the existence of the Association for the purpose of sales, solicitation, or inducement to purchase any form of insurance or health maintenance organization coverage;
5. State that the policy owner, contract owner, certificate holder, or enrollee should not rely on coverage under the Association when selecting an insurer or health maintenance organization;
6. Explain rights available and procedures for filing a complaint to allege a violation of any provisions of this chapter; and
7. Provide other information as directed by the Commission including but not limited to, sources for information about the financial condition of insurers provided that the information is not proprietary and is subject to disclosure under the Virginia Freedom of Information Act (§ 2.2-3700 et seq.).
D. A member insurer shall retain evidence of compliance with subsection B for so long as the policy or contract for which the notice is given remains in effect.
1976, c. 330, § 38.1-482.33; 1986, c. 562; 2010, c. 510; 2011, c. 306; 2018, c. 706.