Chap. 342.—An ACT to amend and re-enact Section 4235 of the Code of Virginia,
as heretofore amended, relating to the licensing of certain insurance agents,
agencies and company representatives, to the revocation thereof under certain
conditions, and to provide penalties. [H B 376]

Approved March 31, 1942

1. Beit enacted by the General Assembly of Virginia, That section
forty-two hundred and thirty-five of the Code of Virginia, as heretofore
amended, 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. beneficiar y associa-
tions, orders or societies, doing business in this State shall file annually
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 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 company repre-
sentative shall be required to secure a certificate of registration or license
from said commission, for each company proposed to be represented, au-
thorizing 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 representative
who or which has been appointed as such by an insurance company doing
business in this State who or which desires to secure a certificate of
cH. 342] ACTS. OF. ASSEMBLY 515

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 applica-
tion 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
and thirty-five”.

3. No certificate 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 corporation
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 em-
ployers of such brokers, nor shall any railroad company, steamship com-
pany, carrier by air, or public bus carrier be deemed to be the employer
of any person who shall act as an insurance agent only in respect to the
issuance of accident insurance tickets primarily for the purpose of cover-
ing risks of travel and who is a ticket selling agent or representative of
such common carrier 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 De-
partment 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
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, twist-
ing the contracts of other companies, or (d) misrepresenting the pro-
visions 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 sections 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 subsection 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
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 hear-
ing. 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 appli-
cant or licensee at the address appearing upon his or its application, or in
such other lawful manner as the commission may prescribe. The commis-
sion 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 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 commission 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 indi-
vidual, 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, satisty
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 man-
aging agent, that it has investigated such agency and is satisfied that it 1s
trustworthy. |

9. Before the commission shall issue a certificate of registration or
license to any company representative it shall require the company desir-
ing 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 satisfied that he is trustworthy.

10. As used herein “resident agent” shall include “resident insur-
ance 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 hav-
ing 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 com-
pany 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.

13. The fees provided fot 3 in this section shall be collected by the
commission and shall be paid directly into the treasury of the Common-
wealth, and placed by the State Comptroller to the credit of the fund for
the maintenance of the Bureau of Insurance. |