Chap. 359.—An ACT to amend and re-enact Section 4235, as heretofore amended,
and Section 4235-b, of the Code of Virginia, relating to the licensing of certain
insurance agents, agencies, solicitors and representatives, to the revocation
thereof under certain conditions, and to the penalties prescribed for violations
of the provisions of said Sections. [H B 412]

Approved March 30, 1940

1. Be it enacted by the General Assembly of Virginia, That
section forty-two hundred and thirty-five, as heretofore amended,
and section forty-two hundred and thirty-five-b of the Code of Vir-
ginia be amended and re-enacted so as to read as follows:

Section 4235. Insurance companies to file list of agents, resident
agents, agencies, and company representatives; registration thereof;
hearings and appeals; fine for soliciting contracts of insurance or
surety without registration.—

1. Every insurance company except fraternal beneficiary associa-
tions, orders or societies, doing business in this State shall file an-
nually with the State Corporation Commission, on or before the
first day of June, and at such other times as they may be appointed,
a list of the agents, resident agents, agencies and company repre-
sentatives of said company, authorized to solicit insurance or surety
for it in the State of Virginia, and each such agent, resident agent,
agency or company representative shall be required to secure a certi-
ficate of registration or license from said Commission, for each com-
pany proposed to be represented, authorizing said licensee to represent
said company for a period ending on the fifteenth day of July of each
year. The fee for said registration shall be two dollars ($2.00) per
annum for agents, resident agents or company representatives and
two dollars ($2.00) per annum for agencies.

2. Every agent, resident agent, agency and company represent-
ative who or which has been appointed as such by an insurance com-
pany doing business in this State who or which desires to secure a
certificate of registration or license shall make application annually
therefor in writing on or before the first day of June, and at such other
times as they may be appointed, on a form to be prescribed by the
Commission, which application shall contain the information required
by said form. Every such application, except an application for
certificate of registration or license to write life, title and ocean
marine insurance, shall also contain the following statement: ‘‘The
applicant will ‘engage actively in the insurance business’ as defined
in sub-section three of Section forty-two hundred thirty-five’.

3. Nocertificate of registration or license, other than a certificate
or license to write life, title or ocean marine insurance, shall be granted
to any person, partnership, association or corporation licensed for the
previous year unless such person, partnership, association, or corpora-
tion is “‘engaged actively in the insurance business’’, which shall be
taken to mean that during the year preceding the application for such
certificate or license the licensee seeking such renewal shall have
written, or placed, a total volume of premiums on insurance or surety
for others other than life, title, or ocean marine insurance, greater
than the total volume of premiums which the said applicant shall
have written, or placed, upon his own property or risks, whether in
his individual or fiduciary capacity, or upon the property or risks of
his employer or both, or upon property or risks in connection with or
arising out of the business of his employer; provided, however, that
persons, firms or corporations placing property for sale or rent with
real estate brokers shall not be deemed to be employers of such
brokers within the meaning of this section; and provided, however,
that the provisions of this section shall not be applicable to any bank
or loan company,under the supervision of the State Banking Depart-
ment or any National Bank.

4. The Commission may refuse to register or license any such
agent, resident agent, agency or company representative, or may
revoke the certificate of registration or license issued to any licensee
at any time that it may come to its knowledge that any such applicant
or licensee: (a) has misappropriated any premium entrusted to him,
or (b) has failed to apply said premium as directed by the holder or
prospective holder of the contract of insurance or surety, or (c) has
been guilty of rebating, twisting the contracts of other companies,
or (d) misrepresenting the provisions of the contract he is selling, or
of the contracts of other companies, or (e) has been guilty of fraudu-
lent or dishonest practices, or (f) has violated any provisions of sec-
tions forty-two hundred and twenty-two, forty-two hundred and
twenty-six-a or forty-two hundred and thirty-five-a of the Code of
Virginia or of any other insurance laws of this State, or (g) if writing
other than life, title, or ocean marine insurance, has not been during
the preceding year ‘‘engaged actively in the insurance business” as
defined in sub-section three hereof, or (h) has otherwise demonstrated
that such applicant or licensee is not trustworthy or is incompetent
to transact the insurance business for the conduct of which a certificate
of registration or license is sought.

5. No certificate of registration or license shall be refused or re-

voked until the applicant or licensee has been given an opportunity
to be heard before the Commission after at least ten days notice in
writing has been given him by the Commission of the time and place
of the hearing. Such notice shall also contain a statement of the
grounds and reasons of any objection to the issuance of the certificate
or license or for its revocation. Such notice may be given by registered
mail to the applicant or licensee at the address appearing upon his or
its application, or in such other lawful manner as the Commission
may prescribe. The Commission may summon witnesses against any
such applicant or licensee and any such applicant or licensee may
introduce evidence in his behalf. If the Commission refuses or re-
vokes the certificate of registration or license of any applicant or
licensee, such applicant or licensee may, as a matter of right, appeal
to the Supreme Court of Appeals from such final order as the Com-
mission may make. No applicant to whom a certificate of registration
or license is refused or licensee whose certificate is revoked shall be
entitled to again apply for a certificate of registration until after such
time, not exceeding two years, as may be provided for in the order of
the Commission revoking or refusing same.
6. The certificate of registration or license of each agent shall
state the date on which it was issued, the name of the agent, the name
of the agency with which he is connected, if any, his address and the
name of the company represented by him and shall extend only to
the individual mentioned therein, and not to any clerk or employee
of said agent.

7. Before the Commission shall issue a certificate of registration
or license to any individual it shall require the company desiring to
appoint such individual as its agent to solicit insurance for it in the
State, to certify by an executive officer or managing agent thereof,
that such company has duly investigated the character and record of
such individual, and satisfied itself that he is trustworthy and intends
to act in good faith as an insurance agent; and the Commission may,
by such independent investigation as it may deem proper or necessary,
satisfy itself that an applicant for registration is trustworthy and has
sufficient knowledge of the business of insurance to conduct the same
intelligently.

8. Before the Commission shall issue a certificate of registration
or license to any agency it shall require the company desiring to
appoint such agency its representative to certify by an executive
officer, or managing agent, that it has investigated such agency and
is satisfied that it is trustworthy.

9. Before the Commission shall issue a certificate of registration
or license to any company representative it shall require the company
desiring to appoint such person as its representative, to certify by an
executive officer that such company has duly investigated the character
and record of such person, and is satified that he is trustworthy.

10. As used herein “‘resident agent”’ shall include “resident in-

surance agent’, “‘agency’’ shall include ‘“‘insurance agency’’, and
“company representative’ shall include “state agent’ and “special
agent’’.

11. Any person soliciting for, or procuring application for, any
insurance company authorized to do business in this State without
having first procured a certificate of registration as either agent,
agency, solicitor or company representative shall be subject to a fine
of not less than ten dollars nor more than one hundred dollars.

12. This section shall not apply to any mutual fire insurance
company conducting business exclusively in this State and on a
strictly mutual plan which pay its losses wholly from assessments
upon its members and makes no division or distribution of its earnings
or profits among its members.

13. The fees provided for in this section shall be collected by the
Commission and shall be paid directly into the treasury of the
Commonwealth, and placed by the State Comptroller to the credit of
the fund for the maintenance of the Bureau of Insurance.

14. This section as hereby amended shall be in force for the
license year beginning July fifteenth, nineteen hundred and forty and
for every license year thereafter until otherwise provided by law,
except that the provisions of sub-section three and clause (g) of sub-
section four shall be in force for the license year beginning July
fifteenth, nineteen hundred and forty-one and for every license year
thereafter until otherwise provided by law.

Section 4235b. Agents and agencies to file list of solicitors; regis-
tration of solicitors; hearings and appeals; fine for acting as solicitor
without registration.—

Every insurance agent and every insurance agency doing busi-
ness in this State shall file annually with the State Corporation Com-
mission on or before the first day of June, and at such other times as
they may be appointed, a list of the solicitors of the said agent or
agency, if any, authorized to solicit contracts of insurance or surety
for it in the State of Virginia, and each such solicitor shall be required
to secure a certificate of registration or license from said Commission
for each company represented by said agent or agency for which he
is to solicit contracts of insurance or surety authorizing him to repre-
sent said agent or agency for a period ending on the fifteenth day of
July of each year. The fee for each such registration shall be two
dollars ($2.00) per annum.

2. Every solicitor who has been appointed as such by an agent
or agency doing business in this State who desires to secure a certifi-
cate of registration or license shall make application annually therefor
in writing on or before the first day of June, and at such other times
as they may be appointed, on a form to be prescribed by the Com-
mission, which application shall contain the information required by
said form. Every such application, except an application for certificate
of registration or license as solicitor to place life, title and ocean
marine insurance, shall also contain the following statement: “The
applicant will ‘engage actively in the insurance business’ as defined
in sub-section three of Section forty-two hundred and thirty-five.”’

3. No person shall be granted a certificate of registration or
license as solicitor: (1) to represent more than one agent or agency at
the same time, (2) if he resides or has his place of business in the same
city, town or community in which the agent or agency employing him
is located, unless he devote his full time to the work of said agent or
agency, (3) if such person holds a certificate of registration or license
as an agent issued under section forty-two hundred and thirty-five,
(4) unless such person is to be “engaged actively in the insurance
business’, which shall be taken to mean that during the year pre-
ceding the application for such certificate or license, the licensee
seeking such renewal shall have placed a total volume of premiums on
insurance or surety for others, other than life, title, or ocean marine
insurance, greater than the total volume of premiums which the said
applicant shall have placed upon his own property or risks, whether
in his individual or fiduciary capacity, or upon the property or risks
of his employer or both, or upon property or risks in connection with
or arising out of the business of his employer; provided, however, that
persons placing property for sale or rent with real estate brokers shall
not be deemed to be employers of such brokers within the meaning
of this section; and provided, however, that the provisions of this
section shall not be applicable to any bank or loan company under
the supervision of the State Banking Department or any National
bank.

4. The Commission may refuse to register or license any such
solicitor, or may revoke the certificate of registration or license issued
to any licensee at any time that it may come to its knowledge that
any such applicant or licensee (a) has misappropriated any premium
entrusted to him, or (b) has failed to apply said premium as directed
by the holder or respective holder of the contract of insurance or
surety, or (c) has been guilty of rebating, twisting the contracts of
other companies, or (d) misrepresenting the provisions of the contract
he is selling, or of the contracts of other companies, or (e) has been
guilty of fraudulent or dishonest practices, or (f) has violated any
provisions of section forty-two hundred and thirty-five-a of the Code
or of any other insurance laws of this State, or (g) if placing other
than life, title, or ocean marine insurance, has not during the preceding
year been ‘‘engaged actively in the insurance business’ as defined in
sub-section three hereof, or (h) has otherwise demonstrated that such
applicant or licensee is not trustworthy or is incompetent to transact
the insurance business for the conduct of which a certificate of regis-
tration or license is sought, or (i) has not complied with the provisions
of this section.

5. No certificate of registration or license shall be refused or
revoked until the applicant or licensee has been given an opportunity
to be heard before the Commission after at least ten days’ notice in
writing has been given him by the Commission of the time and place
of the hearing. Such notice shall also contain a statement of the
grounds and reasons of any objection to the issuance of the certificate
or license or for its revocation. Such notice may be given by regis-
tered mail to the applicant or licensee at the address appearing upon
his application, or in such other lawful manner as the Commission
may prescribe. The Commission may summon witnesses against any
such applicant or licensee and any such applicant or licensee may
introduce evidence in his behalf. If the Commission refuses or revokes
the certificate of registration of any applicant or licensee, such appli-
cant or licensee may, as a matter of right, appeal to the Supreme
Court of Appeals from such final order as the Commission may make.
No applicant to whom a certificate of registration is refused or licensee
whose certificate is revoked shall be entitled to again apply for a
certificate of registration until after such time, not exceeding two
years, as may be provided for in the order of the Commission revoking
or refusing same.

6. The certificate of registration or license of each solicitor shall
state the date upon which it was issued, the name of the solicitor, his
address, the name of the agent or agency for which he is to solicit
and the name of the company represented by said agent or agency.

7. Before the Commission shall issue a certificate of registration
to any individual it shall require the agent, or, if it be an agency then
the agency, by a duly authorized officer or representative thereof,
desiring to appoint such individual as its solicitor, to certify that such
agent or agency has duly investigated the character and record of
such individual, and satisfied himself or itself that he is trustworthy
and intends to act in good faith as an insurance solicitor; and the
Commission may, by such independent investigation as it may deem
proper or necessary, satisfy itself that an applicant for registration is
trustworthy and has sufficient knowledge of the business of insurance
to conduct the same intelligently.

8. As used herein “‘solicitor’’ shall include ‘“‘insurance solicitor’,
and ‘“‘agency”’ shall include “insurance agency”’.

9. Any person acting as solicitor for any agent or agency without
having first procured a certificate of registration or license as such
shall be subject to a fine of not less than ten dollars nor more than
one hundred dollars.

10. The fees provided for in this section shall be collected by the
Commission and shall be paid directly into the treasury of the Com-
monwealth and placed by the State Comptroller to the credit of the
fund for the maintenance of the Bureau of Insurance.

11. This section as hereby amended shall be in force for the
license year beginning July fifteenth, nineteen hundred and forty
and for every license year thereafter until otherwise provided by
law, except that the provisions of subdivision four of sub-section
three and subdivision (g) of sub-section four shall be in force for the
license year beginning July fifteenth, nineteen hundred and forty-one
and for every license year thereafter until otherwise provided by law.