Virginia insurance law is Title 38.2 of the Code of Virginia, with rules in 14VAC5. Virginia has no stand-alone insurance department. The State Corporation Commission (SCC) executes the insurance laws through its Bureau of Insurance. This guide covers the Virginia rules the state portion of every exam tests. General concepts are in the national Insurance Regulation guide.

About the exam

• Virginia's exams are given by Prometric. The Bureau doesn't publish a passing score.
• Virginia sells Life, Health and combined Life/Health exams. On the P&C side it sells a combined P&C exam and a Personal Lines exam. There are no separate Property or Casualty exams.

• Exam rules (38.2-1817):
  • Take the exam within 90 days after registration, or the fee is forfeited.
  • After three failures, wait 30 calendar days.
  • A passing grade is good for 183 days. If you don't get the license by then, you retest.
• Prelicensing: a course is required only for the title license, which takes 16 hours. Life, health, P&C and personal lines applicants just pass the exam.
• Personal lines: the P&C license already includes personal lines, so don't apply for both.

The regulator

• The SCC executes all insurance laws through its Bureau of Insurance (38.2-100, 38.2-200).
  • It issues all licenses under its seal.
  • It may suspend or waive licensing requirements in an emergency for up to 120 days unless renewed.
• The head of the Bureau, the Commissioner of Insurance, is appointed by the SCC (12.1-16). The office isn't elected.
• Every licensed insurer is examined at least once every 5 years (38.2-1317).

Penalties (38.2-218, 38.2-219)

• Knowing or willful violations: up to $5,000 each.
• Unknowing violations: up to $1,000 each, capped at $10,000 for a series of similar violations.
• Violations caused only by equipment malfunction carry no penalty.
• Restitution can be ordered. Examples include misappropriated money.
• A cease and desist order comes after notice and a hearing set at least 10 days after service.
• Selling for an unlicensed insurer is a Class 1 misdemeanor, and the seller can be liable for claims (38.2-1802).

Agent licensing (38.2-1800 to 38.2-1871)

License types

• Separate life and annuities, health, property and casualty, personal lines and title licenses (38.2-1824).
• A separate variable contract agent license requires the life and annuities license plus the FINRA exam the Commission prescribes (38.2-1815).
• Limited lines life and health covers things like dental, optometric and limited burial. It doesn't include health insurance.

Who needs a license

• No one may act as an agent without a license (38.2-1822). The license alone gives no authority to bind an insurer. That comes from an appointment.
• Exempt: noncommissioned clerical, underwriting and claims employees, and group enrollers paid without regard to enrollments (38.2-1821.1, 38.2-1822).
• Referral fees: a one-time, nominal, fixed fee, not tied to a sale. The referral can't include discussion of policy terms.

Getting licensed

• You must be at least 18, of good character and honest (38.2-1820).
• New resident applicants are fingerprinted (38.2-1819).
• Applying appoints the clerk of the Commission as your agent for service of process.
• Moving to Virginia (38.2-1818):
  • Apply within 90 days to skip the exam for lines you held.
  • You may operate under a Virginia nonresident license for up to 90 days while applying.
• Moving out of Virginia: your resident license authority ends immediately (38.2-1826).
• A business entity designates a licensed responsible producer. If that person changes, a new one is named within 30 days (38.2-1820, 38.2-1825).
• Temporary license: 180 days, no exam. Only one per lifetime for life and health, and one for P&C (38.2-1830).

Keeping the license

• Renewal: every 2 years, at the end of your birth month, in even or odd years to match your birth year (38.2-1825.1). Agencies renew by May 1 of odd years.
• Report within 30 calendar days (38.2-1826):
  • changes of residence address, email or name, to the Commission and every appointing insurer
  • a felony conviction
  • an administrative action elsewhere, counted from the final disposition
• Assumed names: report within 30 days of adopting or dropping the name (38.2-1822).
• Continuing education (38.2-1866 to 38.2-1871):
  • 16 hours every 2 years for a life/health license or a P&C/personal lines license. That includes 3 hours of ethics, which may cover Virginia law.
  • 24 hours if you hold licenses in more than one category, with at least 8 in each.
  • No more than 75% from insurer- or agency-sponsored courses.
  • Extra hours carry forward to the next biennium only.
  • An hour is 50 minutes.
  • No extensions. Missing CE terminates the license. Waivers are available for military service or similar hardship.
  • Licenses issued in the last 13 months of the period are exempt that biennium.
• Reinstatement: within 12 months, by renewing, paying double the fee and completing CE (38.2-1825.1).

Appointments (38.2-1833 to 38.2-1834.1)

• Appointment: within 30 days of an unappointed agent's first application, the insurer rejects it or notifies the Commission. It also sends the agent verification.
  • If the appointment is invalid, the insurer tells the agent within 5 business days.
• Separate life and health, P&C and title appointments exist. An agent selling both life/health and P&C needs both (38.2-1827).
• Termination:
  • The insurer notifies the agent within 5 calendar days and promptly notifies the Commission.
  • The agent stops soliciting within 10 days.
  • For cause: the insurer certifies the reason to the Commission within 30 days and mails the agent a copy within 15 days by certified mail. The agent may comment within 30 days.
• Revoking a license automatically revokes its appointments (38.2-1821).
• In a dispute, a licensed agent is the agent of the insurer that issued the policy. Premium paid to the agent counts as paid to the insurer (38.2-1801).

Money, records and fees

• Premiums are held as a fiduciary in a separate account (38.2-1813).
  • No commingling, except to advance premiums, hold return-premium reserves or keep a minimum balance.
  • The commission portion may be withdrawn.
• Records: keep them for the 3 previous calendar years (38.2-1809).
• Insurers report agent larceny to the Commission within 60 days (38.2-1810).
• Commissions go only to appointed, licensed agents (38.2-1812).
  • Renewal commissions are allowed if you were licensed and appointed at the time of sale.
  • An agent of record change takes effect at the next renewal.
• Fees beyond premium require the client's prior written consent on a form showing the fee, the services and that the agent earns a commission (38.2-1812.2).
• Insurance consultants need their own license and a written contract before acting (38.2-1837 to 38.2-1839).

Discipline (38.2-1831, 38.2-1832)

• Grounds include:
  • false application information
  • twisting
  • a felony
  • forgery
  • using notes on the exam
  • accepting business from unlicensed people
  • unpaid child support or state income tax
• Hearings need 10 days' written notice.
• After a revocation, no reapplication for 5 years.
• Submitting business without a license costs a penalty equal to the first-year commission (38.2-1823).

Unfair trade and claims practices (38.2-500 series)

• Misrepresentation and twisting (38.2-502).
• False advertising (38.2-503).
• Defamation (38.2-504).
• Boycott, coercion, intimidation (38.2-505).
• False entries (38.2-506).
• Rebating (38.2-509). Giving and accepting a rebate are both prohibited.
  • Exceptions include payroll-deduction rate savings and employee discounts.
• Unfair discrimination (38.2-508). It includes treating someone differently because they're:
  • a domestic violence victim
  • a living organ donor, without actuarial support
  • blind, without actuarial support
• Life insurance: no refusals based on race, sexual orientation, gender identity, religion or sex (38.2-508.2), or military status (38.2-508.1).
• Signatures: no signing someone else's name without written authorization (38.2-512).
• Senior designations: self-conferred ones are prohibited (14VAC5-43-20).
• Unfair claims practices (38.2-510): misrepresenting coverage, failing to settle when liability is clear and failing to adopt investigation standards, done as a general practice.
• Privacy (38.2-604 to 38.2-610):
  • The notice of information practices is due by policy delivery, or when outside collection begins.
  • Reasons for an adverse underwriting decision are given within 21 business days of a request.
  • The privacy notice is repeated each calendar year.

Guaranty associations

Surplus lines

• A surplus lines broker must hold a P&C license and a $25,000 bond (38.2-1857.1, 38.2-1857.2).
• The policyholder notice says there's no guaranty association protection (38.2-4806).
• Records are kept 5 years after the policy ends (38.2-4807).

Common exam traps

• The regulator is the SCC's Bureau of Insurance. The Commissioner is appointed by the SCC.
• CE is 16 hours per category, or 24 for multiple categories, with 3 ethics hours. Excess carries one biennium. There are no extensions.
• Appointment: 30 days. Termination notice to the agent: 5 days. Stop soliciting within 10 days.
• Records: 3 previous calendar years.
• Knowing violations: $5,000. Unknowing: $1,000, up to $10,000 total.
• Retest wait: 30 days after three failures. A passing grade lasts 183 days.