Chap. 298.—An ACT to amend and re-enact Section 4226-a of the Code of Virginia,
as heretofore amended, relating to the collection of insurance premiums, to the
allowance of commissions thereon in certain cases, and to the licensing and
regulation of non-resident insurance brokers. [H B 411]

Approved March 28, 1940

1. Be it enacted by the General Assembly of Virginia, That
section forty-two hundred and twenty-six-a of the Code of Virginia,
as heretofore amended, be amended and re-enacted so as to read as
follows:

Section 4226-a. Resident agents or agencies to collect full pre-
miums and receive full commissions; exceptions thereto; non-resident
insurance brokers; definition; exchange of business; not to sign blank
contracts of insurance or surety; penalty; exceptions.—No resident
agent or agency may write, countersign, issue or deliver any contract
of insurance or surety upon persons or property in this State unless
there shall be collected at the time the contract is written, issued or
delivered, or within a reasonable time thereafter, the full premium on
such contract, and the resident agent or agency shall be entitled to
and shall receive the usual and customary commissions allowed on
such contracts, provided that such resident agent or agency may
write such contracts at the request only of such othe: resident agents
or agencies, when such agent or agencies are prorerly licensed to
transact the class of business involved in such exchange, and licensed
non-resident insurance brokers who may be authorized by law to
broker such contracts, and on exchange of business >etween resident
agents or agencies in Virginia and licensed non-resident insurance
brokers in other states the resident agent or agency in Virginia may
allow or pay to such licensed non-resident insurance brokers, a com-
mission not exceeding fifty per centum of the resident agent’s or
agency’s commission allowed on such business.

Every non-resident person, firm or corporation who shall solicit
for compensation, directly or indirectly to be derived therefrom any
contracts of insurance or surety on persons or property located in
this State, except contracts of life or title insurance, aither on account
of any person desiring to effect any contract of insurance or surety,
or on account of any insurance company, shall be: deemed a non-
resident insurance broker.

Such non-resident insurance broker shall pay the sum of one
hundred dollars for the privilege of transacting such business; pro-
vided, that if, by the existing or future laws of any other state, an
insurance agent of this State shall be required to ay for license or
otherwise an amount greater or less than the amount required by
this State from similar brokers of such other state bv the then existing
laws of this State, then and in every such case all insurance brokers
of such other states shall be required to pay for license an amount
equal to the amount of such charges and payments imposed by the
laws of such other state upon insurance brokers of this State.

Before the Commission shall issue a license -o any such non-
resident insurance broker, the applicant shall mak: affidavit that he
will not during the fiscal year place directly or indirectly any con-
tracts of insurance or surety upon persons or property located in this
State, except through duly licensed resident agents or agencies, and
with a company or companies licensed to transact business in Vir-
ginia, and the Commission may, by such independent investigation
as it may deem proper or necessary, satisfy itself that the applicant
for license is trustworthy and has sufficient knowledge of the business
of insurance to conduct the same intelligently. The Commission
may, for good cause, refuse to license any such non-resident insurance
broker, or may, at any time it may come to its knowledge that any
such broker has placed directly or indirectly any contracts of in-
surance or surety upon persons or property located in this State
without placing such contracts through a licensed resident agent or
agency and with a company or companies not licensed to transact
business in Virginia or has violated any of the provisions of the in-
surance laws of this State, revoke or suspend the license of said broker.

The license shall be issued by the State Corporation Commission
upon the payment of the tax into the State treasury.

No regularly constituted and registered resident agent or agency
for any insurance company shall sign or countersign any blank con-
tract of insurance or surety; nor may such resident agent or agency
allow or pay to any agent not regularly commissioned and registered,
or to any unlicensed non-resident insurance broker any portion of
any commission which he receives or is entitled to receive.

Any resident agent or agency violating any of the provisions of
this section, upon conviction thereof, shall be fined not less than ten
dollars nor more than five hundred dollars, and his certificate or
certificates of registration shall be suspended or revoked.

This section shall not apply to title insurance companies nor to
life insurance companies (except the casualty branches of such com-
panies), nor to mutual insurance companies, nor to contracts of ocean
marine insurance, nor to railroad companies and other common car-
riers engaged in interstate commerce. —