Chap. 310.—An ACT to amend and re-enact Section 4257-d of the Code of Virginia
relating to officers and directors of insurance companies being pecuniarily in-
terested in certain transactions. [S B 267]

Approved March 28, 1940

1. Be it enacted by the General Assembly of Virginia, That
section forty-two hundred and fifty-seven-d of the Code of Virginia,
be amended so as to read as follows:

Section 4257-d. No insurance or surety company, or fraternal
benefit society doing business in this State shall make any loan to
any director or officer of such insurer, either directly or indirectly;
nor shall such insurer make any loan to any other corporation or busi-
ness unit in which such officer or director is substantially interested;
nor shall any such director or officer accept any such loan directly or
indirectly.

No director or officer of any such insurance or surety company or
fraternal benefit society doing business in this State shall receive any
money or valuable thing either directly or indirectly, or through any
substantial interest in any other corporation or business unit, for
negotiating, procuring, recommending or aiding in any purchase or
sale of property or loan from such insurer nor be pecuniarily in-
terested either as principal, co-principal, agent or beneficiary, in any
such purchase, sale or loan, nor shall any financial obligation of any
such director or officer be guaranteed by such insurer.

Nothing contained in this section shall be construed as prohibiting
a director or officer of any such insurance or surety company or
fraternal benefit society from receiving the usual salary, compensation
or emoluments for services rendered in the ordinary course of his
duties as a director or officer, if such salary, compensation or emolu-
ments be authorized by vote of the board of directors of such insurer,
nor as prohibiting the payment to a director or officer of any such
insurer who is a licensed attorney at law of a fee or fees in connec-
tion with loans made by any such insurer if and when such fees are
paid by the borrower and-do not constitute a charge against any
such insurer; and,. provided, that nothing herein contained shall
prevent a life insurancé corporation from making a loan upon a
policy held therein by the borrower not in excess of the net value
thereof. | 7 | ,

A substantial interest in any corporation or business unit is de-
fined to mean an interest equivalent to ownership or control by a
director or officer or the aggregate ownership or control by all directors
and officers of the same insurance or surety company or fraternal
benefit society, of ten per centum or more of the stock of such corpora-
tion or business unit.

Any director or officer violating any provision of this section shall
be guilty of a misdemeanor and upon conviction be punished by a
fine of not less than one hundred dollars nor more than one thousand
dollars or by imprisonment in jail not more than one year, or both,
and the funds of any such insurance or surety company or fraternal
benefit society invested in violation of this section shall not be allowed
as admitted assets of the company.