CHAPTER 410

An Act to amend the Code of Virginia by adding a section numbered
88.1-889.1, relating to notice to claimant by lability insurer when tt
intends to claim policy defense; penalty for failure to give such notice.

[S 470]
Approved April 2, 1968

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia be amended by adding a section numbered
88.1-389.1 as follows:

§ 38.1-389.1. Whenever any insurer on a policy of liability insur-
ance discovers a breach of the terms or conditions of the insurance con-
tract by the insured and such insurer intends to rely on such breach in
defense of liability for any claim within the terms of such policy, such
insurer shall notify the claimant or the claimant’s counsel of record of
its intention to rely on such defense within twenty days after discovery
by the insurer or any of its agents of the breach or of the claim, whichever
is later. Whenever a non-waiver of rights or similar agreement is executed
by the insurer and the insured, notice thereof shall be given to the claim-
ant or the claimant’s counsel within ten days after such agreement is
executed. Failure to serve such notice within such time will result in a
waiver of such defense to the extent of such claim by operation of law.