Chap. 402.—An ACT to provide for the supervision, regulation and fixing of
premiums, rates and charges for and with respect to insurance against the
risk of loss or damage by, from, or as a result of fre, windstorm, tornado, hail,
lightning, explosion, riot and civil commotion, fire, theft, collision and
other physical damage insurance on insured motor vehicles, and other kinds
of insurance which fire insurance companies and insurers writing fire insur-
ance are authorized to write in Virginia; to provide penalties for violations;
and to repeal Chapter 433, Acts of Assembly, 1928, approved March 26,
1928, as amended, and Chapter 293, Acts of Assembly, 1940, approved March
28, 1940. [H 106]

Approved April 1, 1948

Be it enacted by the General Assembly of Virginia:

1. Section1. Virginia Insurance Rating Bureau.—(a) This act
applies to insurance against the risk of loss or damage by fire, windstorm,
tornado, hail, lightning, explosion, riot and civil commotion, and to fire,
theft, collision and other physical damage insurance on insured motor
vehicles, and to all other kinds of insurance which fire insurance com-
panies are authorized to write in this State, except those types of
insurance exempted in subsection (b) of section sixteen of this act. All
fire insurance companies and other insurers (whether stock, mutual,
reciprocal or inter-insurer, or other type or form of organization),
except those insurers exempted in subsection (a) of section sixteen of
this act, authorized to effect in this State a type of insurance to which
this act applies shall be members of the Virginia Insurance Rating
Bureau, heretofore created, organized and now existing under the pro-
visions of and in accordance with section one of chapter four hundred
thirty-three of the Acts of Assembly of nineteen hundred twenty-eight,
which Bureau is hereby continued under the supervision of the State
Corporation Commission, for the purpose of making or adopting rates
for insurance of the types to which this act applies, as aforesaid, and
said Bureau shall file rates, rating schedules, rating plans, rules, by-
laws, agreements or regulations relating to insurance on or with respect
to property in this State and applicable to such risks with the State
Corporation Commission; provided that, with the approval of the
State Corporation Commission, any such company or other insurer writ-
ing insurance on or with respect to flour mills, grain elevators, lumber
yards or lumber mills, in connection with an inspection service, may file
its rates, rating schedules and rating plans, applicable to such risks only,
direct with the State Corporation Commission and not through said
Bureau, and in such a case the company or other insurer may make its
filing either directly in its own behalf or through a unified facility of
the group or association created and maintained entirely or in part for
the purpose of determining and filing rates, rating schedules and rating
plans for insurance on or with respect to flour mills, grain elevators, lum-
ber yards or lumber mills when insured in connection with an inspection
service. Every such unified facility shall file with the State Corporation
Commission (1) a copy of its constitution, its articles of agreement or
association or its certificate of incorporation and of its by-laws, rules
and regulations governing its activities, (2) a list of its members, (3)
the name and address of a resident of this state upon whom notices or
orders of said Commission or process (issued at its direction) may be
served, and (4) an agreement that the Commission may examine such
unified facility in accordance with the provisions of section nine of this

(b) The term “rate” or “rates” wherever used in this act shall
be deemed to mean rate of premium, policy fee, membership fee, or
any other charge made by a company or other insurer for or in connec-
tion with a contract or policy of insurance of the type to which this
act applies.

(c) The word “Commission” as hereinafter used in this act shall
mean State Corporation Commission, and the word “Bureau” as here-
inafter used in this act shall mean Virginia Insurance Rating Bureau.

Section 2. Government of Bureau; Bureau may purchase actuarial
or technical services; Bureau may examine policies, daily reports, etc.—
(a) The government of the Bureau shall be vested in its members, and
it shall not be subject to the direction or control of any other bureau,
association, corporation, company, individual, or group of individuals.
Each member of the Bureau shall have one vote in the management
of its affairs. The Bureau shall have power to establish reasonable agree-
ments and by-laws for its governance and may adopt reasonable rules
and regulations necessary to carry out its functions ; but such reasonable
agreements, by-laws, rules and regulations shall not be inconsistent with
the provisions of this act and shall be first approved by the Commis-
sion, All amendments to such agreements, by-laws, rules and regulations,
before being effective, shall be submitted to and approved by the Com-
mission. The principal office of the Bureau shall be located in the city
of Richmond, Virginia, where all records shall be kept and all business
of the Bureau transacted; provided, that, with the approval of the
Commission, branch offices of the Bureau may be established within the
State. The Bureau shall furnish, without discrimination, its service to
its members.

(b) In order to provide funds necessary for its maintenance, the
Bureau shall make assessments on the premium income (that is, gross
premiums less cancellation and return premiums) of its members derived
from the kinds of insurance to which this act applies through direct
business done in this State during the preceding calendar year, and where
a member has done no business in this State during the preceding calen-
dar year, such assessment for the first year shall be based on such
premium income for the current year, with such pro rata or minimum
charges as may have been approved by the Commission. In making any
assessment provided for in this subsection, consideration shall be given
(where it is proper so to do in order to effect an equitable assessment)
to the services and expenses of the Bureau with respect to the kind or
kinds of insurance involved; provided, that premiums derived from the
types of insurance to which this act does not apply as specified in sub-
section (a) of section one hereof and in section sixteen hereof, shall not
be included in such premium income for assessment purposes. Any
member aggrieved by an assessment made under the provisions of this
act shall have the right of appeal to the Commission for such relief as
may be equitable.

(c) The Bureau may subscribe for or purchase actuarial, technical
or other services, and any such services shall be available to all members
of the Bureau without discrimination.

(d) As to the types of insurance to which this act applies, for which
it files rates, the Bureau may provide for the examination of policies,
daily reports, binders, renewal certificates, endorsements or other evi-
dences of insurance, or the cancellation thereof, and may make reasonable
rules governing their submission and the correction of any errors or
omissions therein. Such rules shall contain a provision that in the event
any company or other insurer does not within sixty days furnish satis-
factory evidence to the Bureau of the correction of any error or omission,
previously called to the attention of such company or other insurer by
the Bureau, it shall be the duty of the Bureau to notify the Commission
thereof. All information so submitted for examination shall be confiden-
tial but shall be available to the Commission upon its request.

(e) Any member of the Bureau may appeal to the Commission from
any action or decision of the Bureau in approving or rejecting any pro-
posed change in or addition to the filings of the Bureau; and the Com-
mission shall, after a hearing held upon not less than ten days’ written
notice to the appellant and to the Bureau, issue an order approving
the action or decision of the Bureau or directing it to give further con-
sideration to such proposal, or, if such appeal is from the action or deci-
sion of the Bureau in rejecting a proposed addition to its filings, the
Commission may, in the event it finds that such action or decision was
unreasonable, issue an order directing the Bureau to make an addition
to its filings, in a manner consistent with the findings of the Commission,
within a reasonable time after the issuance of such order.

Section 3. Surveys of risks; Records.—Every risk specifically rated
by the Bureau for insurance in this State, except as to motor vehicle
insurance and as to risks which are class rated, shall be rated upon
schedule after inspection, and a written survey of every risk so rated
shall be retained by the Bureau as a permanent record during the
existence of the risk. A copy of such survey shall be furnished to the
owner of any risk upon request, without expense to the owner. The
Bureau shall keep a permanent record of the rates charged as to all
risks written by its members upon rates filed by it; provided, that the
Bureau shall not be required to keep such records as to those insurers
which are not members of the Bureau.

Section 4. Making of rates; Approval—(a) Rates, for the types
of insurance to which this act applies, shall be made and filed by the
Bureau in accordance with the following provisions: (1) manual,
minimum, class rates, rating schedules or rating plans, shall be made and
adopted ; provided that all such rates, rating schedules or rating plans,
heretofore approved by the Commission, shall be used until changed with
the approval of the Commission; (2) rates shall not be excessive, inade-
quate or unfairly discriminatory; and (3) due consideration shall be
given to past and prospective loss experience within and outside this
State, to the conflagration or catastrophe hazard, to a reasonable
margin for underwriting profit and contingencies, to dividends, savings
or unabsorbed premium deposits allowed or returned by insurers to
their policy holders or members or subscribers, to past and prospective
expenses both countrywide and those specially applicable to this State,
and to all relevant factors within and outside this State; and in the case
of fire insurance rates consideration shall be given to the experience of
the fire insurance business during a period of not less than the most
recent five year period for which such experience is available. Every such
filing shall indicate the character and extent of the coverage to be pro-
vided for the rate or charge established or proposed by such filing.

(b) Upon a filing being made with the Commission it shall deter-
mine whether publication of notice as to such filing is necessary. If
the Commission determines that publication of notice of a filing is
required, such notice shall be published in such form and for such time
as the Commission may prescribe, not to exceed once a week for four
consecutive weeks in a newspaper or newspapers of general circulation
and published in Virginia. Upon completion of publication or prior
thereto the Commission shall determine whether a hearing should be
had before acting upon the filing. If the Commission shall determine that
a hearing should be held, it shall order the same and notify the person
making the filing and such other person as it may deem interested
therein. Such hearing shall be held within a reasonable time, not less than
ten days, after the date of the order fixing the hearing. Upon determina-
tion that publication of notice of a filing is unnecessary, or upon com-
pletion of such publication when required and when no hearin® is
ordered, or upon completion of such hearing, thereupon or as soon
thereafter as may be practical the Commission shall act upon said
filing, either approving the same as filed or with such modifications as
the Commission may determine, or disapproving said filing. In the
event of approval with modifications or disapproval of a filing, the
order of such approval or of disapproval shall state the reasons therefor.

(c) No rate, rating schedule or rating plan shall become effective
or shall be charged, applied or enforced in this State by any company
or other insurer, as to the types of insurance to which this act applies,
or by the Bureau, until it shall have been first filed with and approved
by the Commission, but a rate produced in accordance with an approved
rating schedule or rating plan shall be used pending such approval.

(d) Upon written application of the insured, stating his reasons
therefor, filed with and approved by the Commission, a rate in excess
of that provided by a filing otherwise applicable may be used as to any
specific risk.

Section 5. Review of rates by Commission—The Commission
is hereby empowered to investigate and determine,. either upon its own
motion or at the request of any citizen of this State or at the request of
any company or other insurer subject to the provisions of this act,
whether or not rates charged in this State for the types of insurance to
which this act applies are excessive or inadequate or unfairly discrimina-
tory, and to order such changes therein as are fair and equitable, to all
parties at interest, in accordance with its findings. In any such investiga-
tion and determination the Commission shall give due consideration to
those factors specified in provisions (2) and (3) of subsection (a) of
section four of this act.

Section 6. Deviations—Every company or other insurer, to which
this act applies, as a member of the Bureau shall adhere to the filings
made on its behalf by the Bureau, except any such member may make
written application to the Commission through the Bureau for permis-
sion to file and use a uniform deviation from the rates, rating schedules
or rating plans respecting any kind of insurance, or class of risk within
a kind of insurance, or combination thereof, to which this act applies.
Such application shail specify the basis for the deviation. Upon receipt of
such application the Commission shall set a time and place for a hearing
at which the applicant insurer and the Bureau may be heard and shall
give them not less than ten days’ written notice thereof. In the event
the Commission is advised by the Bureau that it does not desire a hear-
ing the Commission may, upon the consent of the applicant, waive such
hearing. In considering the application for permission to file and use such
uniform deviation the Commission shall give consideration to all available
statistics and the principles of rate making as provided in subsection
(a) of section four of this act. The Commission shall issue an order per-
mitting the uniform deviation for such insurer to be filed and used if it
is found to be justified and thereupon the uniform deviation shall become
effective, or the Commission shall issue an order denying such appli-
cation if it finds that the resulting premiums would be excessive, inade-
quate or unfairly discriminatory. Each deviation as provided for in this
section shall be effective for a period of one year from the date of such
permission, unless terminated sooner by or with the approval of the
Commission, provided that for good cause shown the Commission may
thereafter renew such permission from year to year.

Section 7. Furnishing information to Commission.—Every com-
pany or other insurer, subject to the provisions of this act, and the
Bureau shall furnish without charge, upon the request of the Commis-
sion, all reports and information which the Commission shall consider
necessary, relevant or desirable for the proper discharge of all duties
imposed upon it by this act. Such reports and information shall be
furnished in the form and manner and at such times as the Commission
may direct.

Section 8. Access to — of Bureau.—The Commission
shall have access at all times to all records, correspondence, files, reports,
books of account, agreements, and any and all other records and informa-
tion in possession of the Bureau. Any member of the Bureau shall have
similar access as to information concerning any risk in which it has a
direct interest.

Section 9. Examination of Bureau and its members.—In order
to determine whether the provisions of this act are being complied with,
the Commission shall have the power to make or cause to be made an
examination of the Bureau and each company or other insurer to which
this act applies, as often as the Commission deems it expedient to do
so and to require the Bureau and every such company or other insurer
to keep such records and information as will disclose accurately their
loss experience in this State. A copy of the report of each such examina-
tion, after the Bureau or company or other insurer to which it relates
has had a reasonable opportunity to review such report, shall be filed as
a public record in the office of the Commission. Any such examination
shall be made at the expense of the Bureau, company or other insurer
examined.

Section 10. Decrease of loss by fire——The Commission, so far as
practicable in the exercise of its powers and functions under the provi-
sions of this act, shall approve such rates, rating schedules, and rating
plans as shall be calculated to lessen the loss of property by fire in this

tate. ;

Section 11. Interchange of rating information.—In order to further
uniform administration of rate regulatory laws, the Commission and the
Bureau, and every company or other insurer subject to the provisions of
this act, may exchange information and experience data with insurance
supervisory officials, insurers and rating organizations in other states
and may consult with them with respect to rate making and the applica-
tion of rating schedules and rating plans. The Commission shall have
the power to designate the Bureau, or any other rating organization,
or any other agencies, to assist the Commission in gathering and compil-
ing the loss and expense experience of companies or other insurers sub-
ject to the provisions of this act.

Section 11 (1). Advisory organizations—(a) Every group, as-
sociation or other organization of insurers, whether located within or
outside this State, which assists the Bureau or insurers in making rates,
by the collection and furnishing of loss or expense statistics, or by the
submission of recommendations, but which does not make filings under
this act, shall be known as an advisory organization.

(b) Every advisory organization shall file with the Commission
(1) a copy of its constitution, its articles of agreement or association or
its certificate of incorporation and of its by-laws, rules and regulations
governing its activities, (2) a list of its members, (3) the name and
address of a resident of this State upon whom notices or orders of the
Commission or process (issued at its direction) may be served, and
(4) an agreement that the Commission may examine such advisory
organization in accordance with the provisions of section nine of this
act.

(c) If, after a hearing, the Commission finds that the furnishing of
such information or assistance involves an act ar practice which is unfair
or unreasonable or otherwise inconsistent with the provisions ofthis
act, it may issue a written order specifying in what respects such act or
practice is unfair or unreasonable or otherwise inconsistent with the pro-
visions of this act, and requiring the discontinuance of such act or

ractice.

Section 11 (2). Joint underwriting or joint reinsurance——(a)
Every group, association or other organization of insurers which engages
in joint underwriting or joint reinsurance, as to a type of insurance to
which this act applies, shall be subject to regulation with respect thereto
as herein provided. Any such group, association or organization may be
examined by the Commission in accordance with section 9 of this act.

(b) If, after a hearing, the Commission finds that any activity or
practice of any such group, association or other organization is unfair
or unreasonable or otherwise inconsistent with the provisions of this
act, it may issue a written order specifying in what respects such activity
or practice is unfair or unreasonable or otherwise inconsistent with the
provisions of this act, and requiring the discontinuance of such activity
or practice. ,

Section 12. Service of notice of process; filings of Bureau to be
on behalf of all members unless excepted; hearings and publication of
notice of hearings——(a) Service of notices or orders of the Commission,
or of process in any proceeding, upon the duly appointed Manager or
a duly appointed Assistant Manager of the Bureau shall be binding upon
the Bureau and each of its members, and as to every company or other
insurer subject to the provisions of this act.

(b) All filings of rates, rating schedules, rating plans, by-laws,
regulations and agreements, made by the Bureau in accordance with
the provisions of this act, shall be deemed to be made and filed for and
on behalf of each and every member of the Bureau, except as otherwise
stated in the filing or except as otherwise expressly stipulated in a
written order of the Commission.

Any and every insurance company, upon obtaining a license to
write insurance in Virginia and upon becoming a member of the Bureau
as required by law, during the pendency of any such proceeding, shall
be subject to all actions of the Commission, interlocutory and final, in
such proceeding, without necessity of any further service of process or
notice, and without necessity of formal intervention, and shall be bound
by and conform to such rates, premium charges, schedules, rating
methods, rules, by-laws, agreements and regulations of the Bureau which
shall be approved or prescribed in any such pending proceeding or which
are then in effect and have been approved by any applicable order of the
Commission theretofore entered of record according to law, unless and
until otherwise permitted, authorized, or directed, by the Commission
according to law.

Section 13. False or misleading information.—No person or organ-
ization shall wilfully withhold information from, or knowingly give
false or misleading information to, the Commission, any statistical
agency designated by the Commission, the Bureau, or any company or
other insurer, which will affect the rates or premiums chargeable for
the types of insurance to which this act applies. A violation of this section
shall subject the one guilty of such violation to the penalties provided in
section fourteen of this act.

Section 14. Penalties—(a) Any person, organization or insurer
found to be guilty of a violation of any provision of this act shall be
subject to a fine of not less than ten dollars ($10.00) nor more than
one thousand dollars ($1,000.00) for each such violation, such fine to be
imposed by the Commission; and the Commission shall have the right
to suspend or revoke or refuse to renew the license of any person,
organization or insurer for violation of any of the provisions of this act.

(b) The Commission may impose a fine of not less than ten dollars
($10.00) nor more than one thousand dollars ($1,000.00) upon, or may
suspend or revoke or refuse to renew the license of any person, organ-
ization or insurer which fails to comply with an order of the Commis-
sion within the time limited by such order, or any extension thereof
which the Commission may grant. The Commission may determine
when a suspension or revocation of license shall become effective and
the suspension or revocation shall remain in effect for the period fixed
by it, unless the Commission modifies or rescinds such suspension or
revocation, or until the order upon which such suspension or revocation
is based is modified or reversed as the result of an appeal therefrom.

(c) No fine shall be imposed and no license shall be suspended or
revoked except upon written order of the Commission stating its findings,
made after a hearing held upon not less than ten days’ written notice
to such person, organization, or insurer specifying the alleged violation.

Section 15. Expenses of Commission—Any expense incurred by
the Commission in carrying out the provisions of this act, except as
provided in section nine of this act, shall be paid out of the funds pro-
vided for the maintenance of the Bureau of Insurance of this State.

Section 16. Insurers and types of insurance to which act does not
apply.—(a) This act shall not apply to local mutual insurance com-
panies and associations organized under the laws of this State, conducting
business in this State only and exclusively upon the assessment plan.
Furthermore, the Commission is authorized to grant exemption from
compliance with the terms of this act to mutual insurance companies
and associations organized under the laws of this State, conducting busi-
ness only in this State, and issuing only policies providing for perpetual
insurance.

(b) This act shall not apply to: (1) reinsurance; (2) insurance on
or with respect to risks protected in whole or in part by automatic
sprinklers when such risks are insured in connection with an inspection
service; (3) marine and inland marine insurance, including personal
property floater (Householders’ Comprehensive) insurance, as these
terms are defined by statute or by the Commission or as commonly
understood or as established by general custom of the business; and
(4) insurance of hulls of aircraft, including their accessories and equip-
ment, or against liability arising out of the ownership or maintenance
or use of aircraft.

Section 17. Appeal from decision of Commission—(a) Any
person, organization, or insurer aggrieved by an order or a decision of
the Commission made without a hearing, may, within thirty days after
notice of such order or decision, make written request to the Commis-
sion for a hearing thereon. Within a reasonable time thereafter the
Commission, after having given not less than ten days’ written notice
of the time and place of hearing, shall hear such party or parties. With-
in a reasonable time after such hearing the Commission shall affirm,
reverse, or modify its previous action, specifying its reasons therefor.
Pending such hearing and decision thereon the Commission may suspend
or postpone the effective date of the order or decision to which the
hearing relates.

(b) The provisions of section thirty-seven hundred thirty-four
of the Code of Virginia shall apply to appeals to the Supreme Court of
Appeals of Virginia from any final order or decision of the Commission
with respect to any matter coming within the purview of this act.

Section 18. Constitutionality—If any section, subsection, subdivi-
sion, sentence or clause of this act is held to be invalid or unconstitu-
tional, such decision shall not affect the remaining portions of this act.

2. Chapter four hundred thirty-three of the Acts of Assembly of
nineteen hundred twenty-eight, approved March twenty-six, nineteen
hundred twenty-eight, as amended, and chapter two hundred ninety-
three of the Acts of Assembly of nineteen hundred forty, approved
March twenty-eight, nineteen hundred forty, are repealed.

3. All acts and parts of acts inconsistent with the provisions of this
act are repealed to the extent of such inconsistency.

4. This act shall take effect on the first day of July, nineteen hun-
dred forty-eight.