CHAPTER 266

An Act to amend the Code of Virginia by adding a section numbered
§ 38.1-98.1, relating to prohibiting nonlicensed insurance companies
from transacting insurance business in this State by mail or other-

wise.
[H 608]
Approved April 1, 1968

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia be amended by adding a section numbered
38.1-98.1 as follows:

§ 38.1-98.1—Whenever a foreign or alien insurance company not
licensed to do an insurance business in this State shall engage in any
insurance transaction or do any insurance business in this State, the
Commission shall have jurisdiction and the powers of a court of equity
to issue, on its own motion or on motion of any party in interest, temporary
or permanent injunctions restraining such insurance company from en-
gaging in any such insurance transaction or business.

For the purposes of this section, the following acts, effected by mail or
otherwise, shall constitute the transacting of an insurance business in this
State: (1) the issuance or delivery of contracts of insurance to residents
of this State or to corporations authorized to do business therein; (2) the
solicitation of applications for such contracts; (3) the collection of pre-
miums, membership fees, assessments or other considerations for such
contracts; or (4) the transactions of any other insurance business in
connection with such contracts.

Process may be served in accordance with § 13.1-119 of this Code
or any other manner prescribed by law.

This section shall not apply to any life insurance or annuity company
organized and operated, without profit to any private shareholder or in-
dividual, exclusively for the purpose of aiding educational or scientific
institutions organized and operated without profit to any private share-
holder or individual by issuing insurance and annuity contracts only to or
for the benefit of such institutions and individuals engaged in the service
of such institutions, provided such company shall be deemed, as to all Vir-
ginia policy holders and contract holders, to have appointed the clerk of
the Commission its attorney for service of process in Virginia, such appoint-
ment to be irrevocable and to‘bind the company and any successors in
interest and to remain in effect as long as there is in force in this State any
contract made by that company or any obligation arising therefrom; nor
shall this section apply to any insurance or annuity contracts issued by any
such life insurance or annuity company; nor shall it apply to the following
acts or transactions: (1) the procuring of a policy of insurance upon a
risk within this State where the applicant is unable to procure coverage in
the open market with a company or companies licensed to do business in
this State and is otherwise in compliance with Article 3.1, Chapter 7,
Title 38.1; (2) contracts of reinsurance; (8) transactions in this State
involving a policy lawfully solicited, written and delivered outside of this
State covering only subjects of insurance not resident, located, or to be
performed in this State at the time of issuance of such policy; (4) trans-
actions in this State involving group or blanket insurance and group annui-
ties where the group or blanket policy of such insurance or annuities was
lawfully issued and delivered in a state where the company was authorized
to transact business; (5) the procuring of contracts of insurance issued
to an “industrial insured” as hereinafter defined. For the purposes of this
section an “industrial insured” is an insured (a) who procures the insur-
ance of any risk or risks by use of the services of a full-time employee acting
aS an Insurance manager or buyer, (b) whose aggregate annual premiums
for insurance on all risks total at least twenty-five thousand dollars, and
(c) who has at least twenty-five full-time employees.

Nothing in this section shall apply to non-profit Railroad Brotherhood
or other similar fraternal organizations.