CHAPTER 38

An Act to amend the Code of Virginia by adding in Chapter 8, Title $8.1,
an article numbered 2.1, consisting of sections numbered 88.1-862.1
through 38.1-362.6, relating to accident and sickness insurance, au-
thorizing and regulating joint action by insurance companies for in-
suring persons 65 years of age and over and their spouses. 5 ED

[ ]

Approved February 18, 1964

Be it enacted by the General Assembly of Virginia:

1. That the Code of Virginia be amended by adding in Chapter 8 of
Title 38.1 an article numbered 2.1 consisting of sections numbered 38.1-
362.1 through 38.1-362.6, as follows:

§ 38.1-362.1. It is the purpose of this Article to provide a means
within the framework of the private enterprise system of more adequately
meeting the needs of residents of this State who are sixty-five years of
age or over and their spouses for insurance coverage against financial loss
from accident or sickness through the combined resources and experience
of a number of insurers; to make possible the fullest extension of such
coverage by encouraging insurers to combine their resources and experience
and to exercise their collective efforts in the development and offering of
such insurance; and to regulate the joint activities herein authorized in
accordance with the intent of Congress as expressed in the Act of Congress
of March 9, 1945, (Public Law 15, 79th Congress), as amended.

§ 38.1- 362.2. Wherever used in this Article, the following terms shall
have the respective meanings hereafter set forth or indicated, unless the
context otherwise requires:

(a) “Association” means a voluntary unincorporated association
formed for the purpose of enabling joint and cooperative action to pro-
vide accident and sickness insurance in accordance with this Article in
this and any other state having legislation enabling the issuance of in-
surance of the type provided in this Article.

(b) “Insurer” means any insurance company which is authorized to
transact accident and sickness insurance in this State ,

§ 38.1-362.3. Notwithstanding any other provisions of this Title or
any other law which may be inconsistent herewith, any insurer may join
with one or more other insurers to plan, develop, underwrite, offer, sell
and provide to or for any resident persons of this State, or of another state
if permitted by the laws of such other state, who is sixty-five years of age
or over and to the spouse of such person, insurance against financial loss
from accident or sickness, or both. Such insurance may be offered, issued
and administered through an association of two or more insurers which
association is formed for the purpose of offering, selling, issuing and
administering such insurance, and may be in the form of a policy of group
accident and sickness insurance, or individual accident and sickness policies
or certificates of insurance insuring any such person and spouse, or both.
Such an association, if also operating in another state or states, may
include among its members insurance companies not authorized to transact
accident and sickness insurance in this State, provided such insurance
companies shall not by virtue of such membership nor by virtue of this
Act be or become authorized to transact accident and sickness insurance
in this State. On such insurance each insurer shall be severally liable
for a percentage of the risks determined under the articles of association
of the association. The insurer members of such association may agree
with respect to premium rates, policy provisions, commission rates and
other matters within the scope of this Article. Such insurance may be
offered, issued and administered in the name of the association or in the
respective names of the insurers. Any policy providing such insurance
may be executed on behalf of the insurers or the association as the case
may be, by a duly authorized person and need not be countersigned by a
resident agent.

§ 38.1-362.4. The forms of the policies, applications, certificates o1
other evidence of insurance coverage and the rate manual showing rates,
rules and classification of risks applicable thereto shall be subject to the
applicable provisions of § 38.1-342.1. The Commission may disapprove
the premium rates for such insurance, or any class thereof, if it finds
that such rates are by reasonable assumptions excessive in relation to the
benefits provided. In determining whether such rates by reasonable assump-
tions are excessive in relation to the benefits provided, the Commission
shall give due consideration to past and prospective claim experience on
such insurance, or other comparable insurance, within and outside this
State, and to fluctuations in such claim experience, to a reasonable risk
charge, to contribution to surplus and contingency funds, to past and
prospective expenses, both within and outside this State, and to all other
relevant factors within and outside this State, including any differing
operating methods of the insurers joining in the issue of such insurance.
In the event of any such disapproval the association may proceed as indi-
cated in § 38.1-276. In exercising the powers conferred herein and by
said § 38.1-342.1, the Commission shall not be bound by any other require-
ments of this Title with respect to required or standard provisions to be
included in the forms of the policies, applications, certificates or other
evidence of insurance coverage filed with the Commission.

§ 38.1-362.5. An association formed for the purpose of this Article
shall adopt articles of association for the organization, administration and
regulation of its affairs which articles of association and any amendments
thereto shall be filed with the Commission. Such association may establish
requirements for membership of insurers, hold title to property, incur
expenses for advertising, soliciting and administering such insurance, in-
cluding payment of salary or compensation to persons employed by it, enter
into contracts, limit the liability of and among its members, and shall be
subject to the provisions of § 8-66. Such association shall file annually
with the Commission, on such date and in such form as the Commission
may prescribe, a statement with respect to its operations. Such association
Shall also be subject to the provisions of Article 3, Chapter 4 of Title 38.1
with respect to examination of its affairs.

§ 38.1-362.6. Accident and sickness insurance authorized by this
Article and offered by or through an association formed for the purpose
of this Article may be solicited and offered directly by such association, any
insurer member of such association and by or through any individual,
partnership, or corporation licensed in accordance with the provisions of
Chapter 7 of this Title without additional license under said Chapter.

2. An emergency exists and this act is in force from its passage.