Chap. 218.—An ACT to amend and re-enact Sections 4222, as heretofore amended,
4226-a, and 4235, as heretofore amended, of the Code of Virginia relating to
insurance; to amend the Code of Virginia by adding thereto a new section
numbered 4221-a defining certain terms as used in certain sections of the
Code of Virginia and a new section numbered 4235-b, requiring registration
of solicitors and a new section numbered 4235-c; and to repeal Section 168
of the Tax Code of Virginia. [H B 151]

Approved March 22, 1938

1. Be it enacted by the General Assembly of Virginia, That sec-
tions forty-two hundred and twenty-two, as heretofore amended,
forty-two hundred and twenty-six-a, and forty-two hundred and thirty-
five of the Code of Virginia, as heretofore amended, be amended and
re-enacted and that the Code of Virginia be amended by adding thereto
three new sections numbered forty-two hundred and twenty-one-a and
forty-two hundred and thirty-five-b, and forty-two hundred and thirty-
five-c so that said amended sections and new sections shall read as
follows:

Section 4222. Insurance companies not to do business in Virginia
except through resident agents or agencies; countersignature; excep-
tion; discriminations prohibited; agents not to make agreements not
expressed in contracts; notice to companies to refrain from making
discrimination; exceptions—(a) Insurance companies, legally author-
ized to do business in this State, except life, title and ocean marine
insurance companies, shall not make contracts of insurance or surety
on persons or property herein, except through regularly constituted
and registered resident agents or agencies of such companies; no con-
tract of insurance or surety covering persons or property in this State,
except contracts of life, title and ocean marine insurance and except
temporary binders covering other forms of insurance shall be written,
issued or delivered by any such authorized insurance company, or any
of its representatives, unless such contract is duly countersigned it
writing by a resident agent or agency of such company; provided, how
ever, that the countersignature of an insurance agency shall not b
considered valid unless such countersignature be attested to in writins
by a regularly constituted and registered resident agent of such company

No State agent, special agent, company representative, salaried officer
manager or other salaried representative of any legally authorizec
insurance company, except a mutual insurance company, shall counter.
sign any contract of insurance or surety, or any renewal thereof, cover.
ing persons or property in this State, except contracts of life, title anc
ocean marine insurance; provided that this section shall not apply tc
railroad companies and other common carriers engaged in interstate
commerce.

(b) No life insurance company doing business in this State shal
make any discrimination in favor of individuals of the same class o1
of the same expectation of life, either in the amount of premium charged
or in any return of premium, dividends or other advantages. No
policy of life insurance shall be issued or delivered in this State if it
shall purport to be issued or to take effect, at an age lower than the
actual age of the applicant at the time of the original written application.

(c) No agent, agency or company representative of any insurance
company shall make any contract for insurance or surety or agreement
as to such contract other than that which is plainly expressed in the
contract issued. No insurance company or agent thereof shall pay, or
allow or offer to pay, or allow as an inducement to any person to have
issued any contract of insurance or surety, any rebate of premium, or
any special favor or advantage whatever in the dividends to accrue
thereon, or any inducement whatever not specified in the contract.

(d) A person who is authorized by any company to solicit insur-
ance or applications therefor shall in any controversy between the
insured or his beneficiary and the company be held to be the agent
of the company which issued the insurance solicited or so applied for,
anything in the application or policy to the contrary notwithstanding.

(e) If it shall appear to the satisfaction of the State Corporation
Commission after due hearing upon notice, that any insurance company
is issuing or making contracts that are directly or indirectly in violation
of this section, the Commission shall require such company, and its
officers and agents, to refrain within twenty days from making any
such contract; provided, that nothing in this chapter shall be so con-
strued as to forbid a company transacting industrial insurance on a
weekly payment plan with weekly collections of premiums at the
homes of the insured, from returning to policyholders who have made
premium payments directly to the company at its home office or district
offices, the savings which the company effects through such direct
payment, or to forbid a life insurance company from allowing its
ona fide employees to receive a commission on the premiums paid by
them on policies on their own lives.
Section 4226-a. Resident agents or agencies to collect full premiums
and receive full commissions; exceptions thereto; non-resident insur-
ance 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 other resident agents or agencies,
when such agent or agencies are properly licensed to transact the class
of business involved in such exchange, and licensed non-resident in-
surance brokers who may be authorized by law to broker such contracts,
and on exchange of business between 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 commission not exceeding
hiity 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, title or ocean marine insurance, either
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 : provided,
that if, by the existing or future laws of any other state, an insurance
agent of this State shall be required to pay for license or otherwise an
amount greater or less than the amount required by this State from
similar brokers of such other state by 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 to any such non-
resident insurance broker, the applicant shall make affidavit that he
will not during the fiscal year place directly or indirectly any contracts
of insurance or surety upon persons or property located in this State,
except through duly licensed resident agents or agencies, and the Com-
mission may, by such independent investigation as it may deem proper
or necessary, satisty 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 violated any
provisions of the insurance 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 contract
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 com-
mission which he receives or is entitled to receive.

Any resident agent or agency violating any of the provisions ot
this section, upon conviction thereof, shall be fined not less than ten
dollars nor more than five hundred dollars, and his certificate or cer-
tificates 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 companies),
nor to mutual insurance companies, nor to contracts of ocean marine
insurance, nor to railroad companies and other common carriers engaged
in interstate commerce.

Section 4235. Insurance companies to file list of agents, agencies,
and company representatives; registration of agents; hearings and
appeals; fine for soliciting contracts of insurance or surety without
registration—Every insurance company, except fraternal beneficiary
associations, orders or societies, doing business in this State shall file
annually with the State Corporation Commission, on or before the
first day of July, and at such other times as they may be appointed, a
list of the agents, resident agents, agencies and company representatives
of said company, authorized to solicit insurance or surety for it in the
State of Virginia, and each such agent, resident agent, agency or com-
pany representative shall be required to secure a certificate of regis-
tration from said Commission, for each company proposed to be repre-
sented, 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 one dollar ($1.00) per annum for agents, resident
agents or company representatives and two dollars ($2.00) per annum
for agencies.

The Commission may, for good cause, refuse to register any such
agent, resident agent, agency or company representative or may, at any
time that it may come to its knowledge that any such licensee has mis-
appropriated any premium entrusted to him, or has failed to apply said
premium as directed by the holder or prospective holder of the con-
tract of insurance or surety, or has been guilty of rebating, twisting
the contracts of other companies, or misrepresenting the provisions of
the contract he is selling or of the contracts of other companies, or
has been guilty of fraudulent or dishonest practices, or has violated any
provisions of the insurance laws, or has otherwise demonstrated in-
competency to transact business as an insurance agent, revoke or sus-
pend the certificate of registration of said licensee. The commission
may summon witnesses against any such licensee accused of wrong-
doing and any licensee whose registration is refused may have a hearing
before the Commission on any charge brought against him and may
introduce evidence in his behalf. If the Commission revokes or sus-
pends the certificate of registration of any licensee or refuses to register
any licensee, such licensee may, as a matter of right, appeal to the
Supreme Court of Appeals from such final order as the Commission
may make, with reference thereto.

The certificate of registration 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 in it and not to any clerk or employee of said agent.

The certificate of registration of each agency shall state the date
on which it was issued, the name of the agency, its address and the
name of the company represented by it.

The certificate of registration of a company representative shall
state the date on which it was issued, the name of the representative
and his address and the name of the company represented by him.

Before the Commission shall issue a certificate of registration to
any individual who has not heretofore received such a certificate, it
shall require the company desiring to appoint such individual as its
agent to solicit insurance for it in this State, to certify by an executive
officer or managing agent thereof, that such company has duly investi-
gated 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.

Before the Commission shall issue a certificate of registration to
any agency, who has not heretofore received such certificate, it shall
require the company desiring to appoint such agency its representative
to certify by an executive officer or managing agent, that it has in-
vestigated such agency and is satisfied that it is trustworthy.

Before the Commission shall issue a certificate of registration to
any company representative who has not heretofore received such cer-
tificate, it shall require the company desiring to appoint such person
as its representative, to certify by an executive officer that such com-
pany has duly investigated the character and record of such person,
and is satisfied that he is trustworthy.

Any person soliciting for, or procuring application for, any insur-
ance 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.

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

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 insurance division of the Bureau of
Insurance and Banking.

Section 4221-a. Definition of agent, resident agent, agency, solicitor,
special agent and/or company representative-—As used in sections
forty-two hundred and twenty-two, forty-two hundred and twenty-
six-a, forty-two hundred and thirty-five, and forty-two hundred and
thirty-five-b, the following words and/or phrases shall have the fol-
lowing meaning:

“Agent” means any individual, who solicits, negotiates or effects
in this State, on behalf of any insurance company or other insurer,
contracts of insurance or surety.

“Resident agent” or “resident insurance agent” means an individual
agent, whose residence and principal place of business are located in
this State, who is authorized by and on behalf of an insurer to transact
business as an insurance agent and contract in the name of the insurer ;
provided, that in cities and towns located partly within and partly
without this State the requirements of this section as to residence and
principal place of business of agents shall be construed as met if
such agent shall have his residence or principal place of business in
any part of such city or town, and the State in which such city or
town is located shall have established, by law or regulation, like
requirements as to residence and place of business of such agents;
and provided further that this definition shall not apply to life insur-
ance agents.

“Solicitor” or “insurance solicitor’ means any individual, whose
residence is located in this State, engaged in the solicitation of contracts
of insurance or surety for any licensed agent or agency; provided, that
in cities and towns located partly within and partly without this State
the requirements of this section as to residence shall be construed as
met if such solicitor shall have his residence in any part of such
city or town, and the State in which such city or town is located shall
have established, by law or regulation, like requirements as to residence
of such solicitors.

“Agency” or “insurance agency” means any firm or corporation
authorized by and on behalf of an insurer to transact an insurance bust-
ness in the name of such firm or corporation and whose business 1s
conducted and solicited by regularly constituted and registered resident
agents or solicitors.

“State agent”, “special agent” or “company representative’? means
any person, who acts in this State for and on behalf of any insurance
company or other insurer, in the solicitation, inspection or servicing
of risks assumed or to be assumed by said company; provided this
definition shall not apply to life insurance companies, except the casualty
branches of such companies.
Section 4235-b. Agents and agencies to file list of solicitors ; regi
tration of solicitors; hearings and appeals.—Every insurance agent an
every insurance agency doing business in this State shall file annual!
with the State Corporation Commission on or before the first day c
July, and at such other times as they may be appointed, a list of th
solicitors of said agent or agency, if any, authorized to solicit contract
of insurance or surety for it in the State of Virginia and each suc
solicitor shall be required to secure a certificate of registration fror
said Commission for each company represented by said agent or agenc
for which he is to solicit contracts of insurance or surety authorizin;
him to represent said agent or agency for a period ending on th
fifteenth day of July of each year.

The fee for said registration shall be one dollar ($1.00) per annum
No person shall be granted a certificate of registration 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 o:
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 as an agent issuec
under section forty-two hundred and thirty-five.

The certificate of registration of each solicitor shall state the date
upon which it was issued, the name of the solicitor, the name of the
agent or agency for which he is to solicit and the name of the company
represented by said agency. The Commission may, for good cause,
refuse to register such solicitor, or may, at any time that it may come
to its knowledge that any solicitor has misappropriated any premium
entrusted to him, or has failed to apply said premium as directed by the
nolder or prospective holder of any contract of insurance or surety,
or has been guilty of rebating, twisting the contracts of other companies,
or misrepresenting the provisions of the contract he is selling, or of the
contracts of other companies, or has been guilty of fraudulent or dis-
1onest practices, or has violated any provisions of the insurance laws,
yr has otherwise demonstrated incompetency to transact business as
in insurance solicitor, revoke or suspend the certificate of registration
f said solicitor. The Commission may summon witnesses against any
olicitor accused of wrongdoing and any registered solicitor may have
_ hearing before the Commission on any charge brought against him
nd may introduce evidence in his behaif ; but if the Commission re-
okes or suspends the certificate of registration of any solicitor, then
uch solicitor may, as a matter of right, appeal to the Supreme Court
f Appeals from such final order as the Commission may make, with
eference thereto.

Before the Commission shall issue a certificate of registration to
ny individual who has not heretofore received such a certificate, it
aall require the agent, or, if it be an agency then the agency, by a duly
ithorized officer or representative thereof, desiring to appoint such
dividual as its solicitor, to certify that such agent or agency has duly
vestigated the character and record of such individual, and is satisfied
iat he is trustworthy and intends to act in good faith ac an ineueanne
olicitor: and the Commission may, by such independent IMvestigens
s it may deem proper or necessary, satisfy itself that an applicant for
egistration is trustworthy and has sufficient knowledge of the business
£ insurance to conduct the same intelligently.

The fees provided for in this section shall be collected by the
“ommission and shall be paid directly into the treasury of the Com-
nonwealth, and placed by the State Comptroller to the credit of the
‘und for the maintenance of the insurance division of the Bureau of
nsurance and Banking.

Section 4235-c. Exceptions——Nothing contained in sections forty-
wo hundred and twenty-one-a, forty-two hundred and twenty-two,
‘orty-two hundred and twenty-six-a, forty-two hundred and thirty-five
ind forty-two hundred and thirty-five-b shall be construed as applying
reciprocal or inter-insurance exchanges, their attorneys or repre-
sentatives. except as provided in section one of an act entitled an act
-o authorize and regulate the exchange of certain classes of reciprocal
and inter-insurance contracts among individuals, partnerships and cor-
porations, empowering corporations generally to make such contracts,
regulating process in suits on such contracts, and prescribing certain
fees, taxes and licenses, and penalty for violation, approved March
twenty, nineteen hundred and eighteen, as last amended by an act
approved March twenty-nine, nineteen hundred and thirty-four.

2 Be it further enacted by the General Assembly of Virginia, That
section one hundred and sixty-eight of the Tax Code of Virginia be,
and the same is hereby, repealed.