CHAPTER 698

An Act to provide for the creation of optometric service corporations; to
establish plans for prepaid optometric service; to provide how such
corporation shall be regulated, supervised and taxed; and to provide

a penalty. ‘H 1061)
Approved April 5, 1968

Be it enacted by the General Assembly of Virginia:

1. § 1. As used in this act, unless the context requires otherwise:

(a) “Association” means the Virginia Optometric Association ;

(b) “Optometric service plan” or “plan” means a plan or arrange-
ment under which prepaid optometric services are or may be rendered to
subscribers by participating optometrists through an optometric service
plan corporation acting as agent for the participating optometrists ;

(c) “Licensed optometrist” means an optometrist licensed by the
Virginia State Board of Examiners in Optometry or other appropriate State
licensing authority;

(d) “Participating optometrist’? means a licensed optometrist who is
participating in an optometric service plan;

(e) “Corporation” means an optometric service plan corporation
organized pursuant to the provisions of this act and the laws of this State;

(f) “Subscriber” means an individual, partnership, association or
corporation who or which contracts through an optometric service plan
corporation with participating optometrists for optometric services; and,

(zg) ‘Commission’ means the State Corporation Commission.
§ 2. A group of licensed optometrists may organize a nonstock, non-
profit optometric service plan corporation, the certificate of incorporation of
which shall include the following provisions in addition to other provisions
necessary to carry out the provisions of this act and required by law:

(a) There shall be a board of not less than twelve nor more than
eighteen directors. The original board of directors shall be designated by
the Executive Committee of the Virginia Optometric Association and shall
consist of (i) eight licensed optometrists selected from twelve nominees
submitted by the Association, and (ii) four persons who shall be residents
of this State who are not optometrists. Of the original board the Executive
Committee of the Virginia Optometric Association shall designate two
optometrist members and one nonoptometrist member to serve for one year,
two optometrist members and one nonoptometrist member to serve for
two years, two optometrist members and one nonoptometrist member to
serve for three years, and two optometrist members and one nonoptometrist
member to serve for four years. Their successors shall be elected by the
participating optometrists to serve for a term of four years each. All va-
cancies occurring on the board shall be filled by the board. In electing
successors and filling vacancies the original proportion of optometrists and
nonoptometrists shall always be maintained.

A corporation shall not engage in the practice of optometry.

(c) The license and renewal fees paid by a corporation under this act
shall be in lieu of all other state and local license fees or license taxes, and
state income taxes of the corporation.

§ 3. A corporation may (subject to the approval of the Commission),
as agent for the participating optometrists, adopt one or more optometric
service plans. Each plan shall include, in addition to other necessary
provisions, the following:

(a) The geographical area in which the plan shall operate, which
area may include the entire State. Only one corporation shall operate in
the area, unless the Commission finds that the operation of more than one
corporation will promote the public welfare. Subscription contracts shall
not be sold to persons residing outside the area unless they are regularly
employed within the area. The subscription contract of a subscriber who
neither lives nor is employed within the area shall be cancelled by notice
given in accordance with the subscription contract.

(b) That every licensed optometrist practicing in the area shall have
the right to become a participating optometrist under such terms and con-
ditions as are imposed on other participating optometrists under similar
circumstances.

(c) That a participating optometrist shall have the right to engage
in other practice.

(d) That the private optometrist-patient relationship shall be main-
tained and the subscriber shall at all times have free choice of any partici-
pating optometrist who agrees to accept the subscriber as a patient.

(e) That the participating optometrist will agree to perform the
optometric services specified by the corporation at such rates of compensa-
tion as are determined from time to time by the corporation and are filed
with the Commission and to abide by the bylaws, rules and regulations of
the corporation.

A participating optometrist may resign from a plan, but such
resignation shall not as to a subscriber, whose contract is in force at the
date of the resignation, become effective until the end of such subscriber’s
current contract year.

§ 4. Participating optometrists, acting through the corporation as
agent may enter into contracts with subscribers to furnish specified optom-
etric services at specified rates to the subscriber or subscriber’s members,
officers or employees. Contracts may vary as to services and rates.
§ 5. A corporation may enter into contracts with like or similar cor-
porations within or without this State for the interchange of services to
those included in subscription or other like contracts, and may provide in
subscription contracts for the substitution of such services in lieu of those
therein recited. A corporation may also enter into contracts with optical
laboratories to provide materials pursuant to contracts with subscribers or
subscriber’s members, officers or employees.

All licensed optometrists participating in a plan shall be jointly
and severally liable on all contracts made for the purposes of the plan by
them or by their agent for them. Each such contract executed by their
agent on their behalf may be signed by the agent alone; and a contract so
signed shall be binding on the principals and not on the agent. Actions for
breach of such contracts may be brought against the principals naming
the agent as the sole defendant, and a judgment in favor of the plaintiff
may be satisfied out of the assets of the plan in the custody of the agent
or out of the assets of each and all of the principals. A licensed optometrist
may be admitted to a plan at any time and will then automatically become
liable on all its outstanding contracts. Each participant shall be liable for
his own torts and not for the torts of any other participant or of the agent.

§ 7. §§ 38.1-29, 38.1-44 to 38.1-57, 38.1-99 to 38.1-104, 38.1-159 to
38.1-165, 38.1-174 to 38.1-178, and 38.1-342.1 of the Code of Virginia relat-
ing to insurance shall, insofar as they are not inconsistent with this act,
apply to the operation of corporations and plans hereunder.

§ 8. It shall be unlawful to operate a plan without a license issued by
the Commission. The corporation as agent for the participating optome-
trists shall apply for a license for each plan, and furnish such relevant
information as the Commission requires. Each license shall expire at mid-
night on the following thirtieth day of April. With each application for
a license a filing fee of fifty dollars shall be paid, and if the license is
issued, the filing fee shall serve as a license fee for the remaining portion
of the license year.

§ 9. Unless the corporation notifies the Commission that it does not
wish a renewal license for a plan, the corporation shall be deemed to have
applied for a renewal license for that plan, and shall pay on the first day
of May of each year a renewal fee. If the plan has fewer than five thousand
and one subscribers, the renewal fee shall be fifty dollars. If the plan has
more than five thousand but fewer than ten thousand and one subscribers,
the renewal fee shall be one hundred dollars. If the plan has more than ten
thousand but fewer than twenty thousand and one subscribers, the renewal
fee shall be one hundred fifty dollars. If the plan has more than twenty
thousand subscribers, the renewal fee shall be two hundred dollars.

The number of subscribers shall be counted as of the first day of April.

§ 10. Subscription contracts may be solicited outside the principal
office of a plan only through licensed salesman. Each salesman’s license
shall expire at midnight on the following thirtieth day of April. A salesman
shall apply to the Commission for a license and furnish such relevant in-
formation as the Commission may require. No salesman’s license shall be
issued unless the Commission is satisfied that the applicant is a person of
good character and reputation and competent to perform the obligations of
a salesman of subscription contracts. With each application for a sales-
man’s license a filing fee of ten dollars shall be paid, and if the license is
issued the filing fee shall serve as a license fee for the remaining portion
of the license year.

§ 11. Each salesman who wishes a renewal license shall apply for it
in writing and pay a renewal fee of five dollars.

§ 12. In the operation of a plan, it shall be unlawful to use any mis-
leading advertising matter or subscription applications or contracts,
whether written or oral.
§ 13. The Commission shall have the jurisdiction and power of a
court of equity to issue temporary and permanent injunctions restraining
violations or attempted violations of this chapter, and to enforce such in-
junctions by fine or imprisonment. ;

14. The Commission may, by judgment entered after a hearing on
notice duly served on the defendant not less than ten days before the date
of the hearing, if it be proved that the defendant has violated any provision
of this act or any lawful order of the Commission issued under this chapter,
impose a penalty not exceeding one thousand dollars, which shall be collect-
ible by the process of the Commission as provided by law.

In addition to imposing such penalty, or without imposing such penalty,
the Commission, in any such case, may revoke any license issued by it to
the defendant.

§ 15. Any person aggrieved by any final or interlocutory judgment,
order or decree of the Commission may appeal, as a matter of right, to
the Supreme Court of Appeals.

2. All laws or parts of laws inconsistent with the provisions hereof are
repealed.