{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-1016.1.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-1016.1.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-1016.1.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-1016.1.html"}],"law_id":55817,"edition_id":1,"section_id":55817,"structure_id":14443,"section_number":"38.2-1016.1","catch_line":"Conversion of a health maintenance organization to an accident and sickness insurer","history":"2007, c. 579; 2018, c. 706.","full_text":"A\n\nAny health maintenance organization domiciled in the Commonwealth and subject to the provisions of Chapter 43 (§ 38.2-4300 et seq.) may, at its option and without reincorporation, convert to an insurer licensed to write accident and sickness insurance, hereinafter referred to as the “converted insurer,” by following the procedures set forth in this section. A health maintenance organization that becomes a converted insurer under this section shall have all of the rights to and titles and interests in the assets of the original health maintenance organization, as well as all of its liabilities and obligations.B\n\nA health maintenance organization eligible to become a converted insurer under subsection A may effect such conversion by (i) complying with the requirements for formation of a domestic insurer under Article 1 (§ 38.2-1000 et seq.); (ii) promptly filing with the Commission any necessary amendments to its articles of incorporation, bylaws, and other corporate documents pursuant to the provisions of Chapter 9 (§ 13.1-601 et seq.) of Title 13.1; and (iii) filing with the Commission such other information as the Commission may require to meet all of the requirements of an insurer in Virginia. When those requirements have been met, the Commission shall issue a license in accordance with the provisions of Article 5 (§ 38.2-1024 et seq.) to permit the converted insurer to conduct the business of accident and sickness insurance in the Commonwealth. Upon the issuance of the converted insurer’s license, and except as provided in this section, the converted insurer shall be subject to all of the provisions of this title that pertain to insurers licensed pursuant to Article 5 (§ 38.2-1024 et seq.) of this chapter and the business of accident and sickness insurance.C\n\nAfter the effective date of the health maintenance organization’s conversion to and licensure as an insurer, all of the converted insurer’s individual and group health care plans, contracts, and evidences of coverage shall remain valid and in force in accordance with their terms until the earlier of (i) the expiration or termination of the plans, contracts, or evidences of coverage; or (ii) the last day of the eighteenth month after the effective date of conversion. For the period during which the converted insurer continues to provide or arrange for health care services under such health care plan or plans, the insurer’s obligation to pay license taxes under Chapter 25 (§ 58.1-2500 et seq.) of Title 58.1 and fees for maintaining the Bureau of Insurance under Chapter 4 (§ 38.2-400 et seq.), which are, in all cases, attributable to such health care plan or plans, shall be the same as the license taxes and fees required of health maintenance organizations generally.D\n\nExcept as provided herein, a converted insurer shall not, after the effective date of its conversion, use in its accident and sickness insurance policies, contracts or other literature (i) the words “health maintenance organization” or “HMO” or (ii) any other words descriptive of a health maintenance organization or deceptively similar to the name or description of any health maintenance organization then doing business in the Commonwealth in any manner that misrepresents the benefits, advantages, conditions, or terms of the converted insurer’s insurance policies, contracts, or other literature.E\n\nFor the purposes of handling the rehabilitation, liquidation, or conservation of a converted insurer, the provisions of Chapter 15 (§ 38.2-1500 et seq.) shall apply. Whenever an order has been entered pursuant to Chapter 15 authorizing the Commission or other receiver to proceed with the rehabilitation, liquidation, or conservation of a converted insurer, the Commission may utilize the provisions of § 38.2-4310, to protect the interests of enrollees in the converted insurer’s health care plans. If a receivership occurs in a converted insurer that continues to provide or arrange for health care services under such health care plan or plans, contracts, or policies, the receiver shall consider these plans, contracts, or policies as existing in the converted insurer. The Commission or other receiver appointed pursuant to Chapter 15 shall allocate the assets, liabilities, and obligations of the insolvent converted insurer in the manner that the Commission or other receiver determines is fair and equitable to the insurer’s accident and sickness insurance policyholders, health care plan enrollees, and other creditors. The accident and sickness insurance contracts and policies issued by the converted insurer shall be governed by the provisions applicable to the Virginia Life, Accident and Sickness Insurance Guaranty Association pursuant to Chapter 17 (§ 38.2-1700 et seq.). The health care plans, contracts, or policies of the converted insurer, associated with the business written as a health maintenance organization, shall be governed by the provisions of § 38.2-4310.","order_by":null,"text":{"0":{"id":204458,"text":"Any health maintenance organization domiciled in the Commonwealth and subject to the provisions of Chapter 43 (§ 38.2-4300 et seq.) may, at its option and without reincorporation, convert to an insurer licensed to write accident and sickness insurance, hereinafter referred to as the “converted insurer,” by following the procedures set forth in this section. A health maintenance organization that becomes a converted insurer under this section shall have all of the rights to and titles and interests in the assets of the original health maintenance organization, as well as all of its liabilities and obligations.","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"B"},"1":{"id":204459,"text":"A health maintenance organization eligible to become a converted insurer under subsection A may effect such conversion by (i) complying with the requirements for formation of a domestic insurer under Article 1 (§ 38.2-1000 et seq.); (ii) promptly filing with the Commission any necessary amendments to its articles of incorporation, bylaws, and other corporate documents pursuant to the provisions of Chapter 9 (§ 13.1-601 et seq.) of Title 13.1; and (iii) filing with the Commission such other information as the Commission may require to meet all of the requirements of an insurer in Virginia. When those requirements have been met, the Commission shall issue a license in accordance with the provisions of Article 5 (§ 38.2-1024 et seq.) to permit the converted insurer to conduct the business of accident and sickness insurance in the Commonwealth. Upon the issuance of the converted insurer’s license, and except as provided in this section, the converted insurer shall be subject to all of the provisions of this title that pertain to insurers licensed pursuant to Article 5 (§ 38.2-1024 et seq.) of this chapter and the business of accident and sickness insurance.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A","next_prefix":"C"},"2":{"id":204460,"text":"After the effective date of the health maintenance organization’s conversion to and licensure as an insurer, all of the converted insurer’s individual and group health care plans, contracts, and evidences of coverage shall remain valid and in force in accordance with their terms until the earlier of (i) the expiration or termination of the plans, contracts, or evidences of coverage; or (ii) the last day of the eighteenth month after the effective date of conversion. For the period during which the converted insurer continues to provide or arrange for health care services under such health care plan or plans, the insurer’s obligation to pay license taxes under Chapter 25 (§ 58.1-2500 et seq.) of Title 58.1 and fees for maintaining the Bureau of Insurance under Chapter 4 (§ 38.2-400 et seq.), which are, in all cases, attributable to such health care plan or plans, shall be the same as the license taxes and fees required of health maintenance organizations generally.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"3":{"id":204461,"text":"Except as provided herein, a converted insurer shall not, after the effective date of its conversion, use in its accident and sickness insurance policies, contracts or other literature (i) the words “health maintenance organization” or “HMO” or (ii) any other words descriptive of a health maintenance organization or deceptively similar to the name or description of any health maintenance organization then doing business in the Commonwealth in any manner that misrepresents the benefits, advantages, conditions, or terms of the converted insurer’s insurance policies, contracts, or other literature.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"4":{"id":204462,"text":"For the purposes of handling the rehabilitation, liquidation, or conservation of a converted insurer, the provisions of Chapter 15 (§ 38.2-1500 et seq.) shall apply. Whenever an order has been entered pursuant to Chapter 15 authorizing the Commission or other receiver to proceed with the rehabilitation, liquidation, or conservation of a converted insurer, the Commission may utilize the provisions of § 38.2-4310, to protect the interests of enrollees in the converted insurer’s health care plans. If a receivership occurs in a converted insurer that continues to provide or arrange for health care services under such health care plan or plans, contracts, or policies, the receiver shall consider these plans, contracts, or policies as existing in the converted insurer. The Commission or other receiver appointed pursuant to Chapter 15 shall allocate the assets, liabilities, and obligations of the insolvent converted insurer in the manner that the Commission or other receiver determines is fair and equitable to the insurer’s accident and sickness insurance policyholders, health care plan enrollees, and other creditors. The accident and sickness insurance contracts and policies issued by the converted insurer shall be governed by the provisions applicable to the Virginia Life, Accident and Sickness Insurance Guaranty Association pursuant to Chapter 17 (§ 38.2-1700 et seq.). The health care plans, contracts, or policies of the converted insurer, associated with the business written as a health maintenance organization, shall be governed by the provisions of § 38.2-4310.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D"}},"ancestry":[{"id":14443,"edition_id":1,"name":"Conversion of Health Maintenance Organization to Accident and Sickness Insurer","identifier":"2.1","label":"article","depth":3,"order_by":1,"parent_id":12858,"metadata":{},"date_created":"2026-06-26 03:48:10","date_modified":"2026-06-26 03:48:10","permalink":{"id":210983,"object_type":"structure","relational_id":14443,"identifier":"2.1","token":"38.2\/10\/2.1","url":"\/38.2\/10\/2.1\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12858,"edition_id":1,"name":"Organization, Admission and Licensing of Insurers","identifier":"10","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:43:57","date_modified":"2026-06-26 03:43:57","permalink":{"id":210851,"object_type":"structure","relational_id":12858,"identifier":"10","token":"38.2\/10","url":"\/38.2\/10\/","edition_id":1,"permalink":0,"preferred":1}},{"id":12698,"edition_id":1,"name":"Insurance","identifier":"38.2","label":"title","depth":1,"order_by":1,"parent_id":null,"metadata":{},"date_created":"2026-06-26 03:43:49","date_modified":"2026-06-26 03:43:49","permalink":{"id":210661,"object_type":"structure","relational_id":12698,"identifier":"38.2","token":"38.2","url":"\/38.2\/","edition_id":1,"permalink":0,"preferred":1}}],"structure_contents":[{"id":55817,"structure_id":14443,"section_number":"38.2-1016.1","catch_line":"Conversion of a health maintenance organization to an accident and sickness insurer","url":"\/38.2-1016.1\/","token":"38.2\/10\/2.1\/38.2-1016.1","metadata":false}],"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-1016.1\/","history_text":"

This law was first created in 2007. The record of its establishment is cataloged in chapter 579<\/a> of that year\u2019s edition of \u201cActs of Assembly,\u201d the annual state publication listing all changes made to the Code of Virginia in that year. It has been modified 1 time. Those modifications are cataloged by \u201cThe Acts of Assembly,\u201d a state publication, by year and chapter. Those modifications that can be read on the General Assembly\u2019s website will be linked accordingly. That modification is as follows: in 2018, chapter 706<\/a>.<\/p>","references":[{"id":67952,"section_number":"38.2-4319","catch_line":"Statutory construction and relationship to other laws","order_by":null,"url":"\/38.2-4319\/"}],"refers_to":[{"id":62759,"section_number":"13.1-601","catch_line":"Short title","order_by":null,"url":"\/13.1-601\/"},{"id":58285,"section_number":"38.2-1000","catch_line":"Incorporation of domestic stock insurers","order_by":null,"url":"\/38.2-1000\/"},{"id":86158,"section_number":"38.2-1024","catch_line":"License required to transact the business of insurance; application fee requirements for license","order_by":null,"url":"\/38.2-1024\/"},{"id":66658,"section_number":"38.2-1500","catch_line":"Scope of chapter","order_by":null,"url":"\/38.2-1500\/"},{"id":85176,"section_number":"38.2-1700","catch_line":"Purpose and applicability of chapter","order_by":null,"url":"\/38.2-1700\/"},{"id":57860,"section_number":"38.2-400","catch_line":"Expense of administration of insurance laws borne by licensees; minimum contribution","order_by":null,"url":"\/38.2-400\/"},{"id":72005,"section_number":"38.2-4300","catch_line":"Definitions","order_by":null,"url":"\/38.2-4300\/"},{"id":84555,"section_number":"38.2-4310","catch_line":"Protection against insolvency","order_by":null,"url":"\/38.2-4310\/"},{"id":56221,"section_number":"58.1-2500","catch_line":"Definitions","order_by":null,"url":"\/58.1-2500\/"}],"permalink":{"id":210985,"object_type":"law","relational_id":55817,"identifier":"38.2-1016.1","token":"38.2\/10\/2.1\/38.2-1016.1","url":"\/38.2-1016.1\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-1016.1\/","token":"38.2\/10\/2.1\/38.2-1016.1","dublin_core":{"Title":"Conversion of a health maintenance organization to an accident and sickness insurer","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-1016.1","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> Any health maintenance organization domiciled in the Commonwealth and subject to the provisions of Chapter 43 (§ 38.2-4300<\/a> et seq.) may, at its option and without reincorporation, convert to an insurer<\/span> licensed to write accident and sickness insurance<\/span>, hereinafter referred to as the “converted insurer<\/span>,” by following the procedures set forth in this section. A health maintenance organization that becomes a converted insurer<\/span> under this section shall have all of the rights to and titles and interests in the assets<\/span> of the original health maintenance organization, as well as all of its liabilities and obligations. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> A health maintenance organization eligible to become a converted insurer<\/span> under subsection A may effect such conversion by (i) complying with the requirements for formation of a domestic insurer<\/span> under Article 1 (§ 38.2-1000<\/a> et seq.); (ii) promptly filing with the Commission<\/span> any necessary amendments to its articles of incorporation, bylaws, and other corporate documents pursuant to the provisions of Chapter 9 (§ 13.1-601<\/a> et seq.) of Title 13.1; and (iii) filing with the Commission<\/span> such other information as the Commission<\/span> may require to meet all of the requirements of an insurer<\/span> in Virginia. When those requirements have been met, the Commission<\/span> shall issue<\/span> a license in accordance with the provisions of Article 5 (§ 38.2-1024<\/a> et seq.) to permit the converted insurer<\/span> to conduct the business of accident and sickness insurance<\/span> in the Commonwealth. Upon the issuance of the converted insurer<\/span>’s license, and except as provided in this section, the converted insurer<\/span> shall be subject to all of the provisions of this title that pertain to insurers<\/span> licensed pursuant to Article 5 (§ 38.2-1024<\/a> et seq.) of this chapter and the business of accident and sickness insurance<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> After the effective date of the health maintenance organization’s conversion to and licensure as an insurer<\/span>, all of the converted insurer<\/span>’s individual and group health care plans, contracts<\/span>, and evidences<\/span> of coverage shall remain valid and in force in accordance with their terms until the earlier of (i) the expiration or termination of the plans, contracts<\/span>, or evidences<\/span> of coverage; or (ii) the last day of the eighteenth month after the effective date of conversion. For the period during which the converted insurer<\/span> continues to provide or arrange for health care services under such health care plan or plans, the insurer<\/span>’s obligation to pay license taxes under Chapter 25 (§ 58.1-2500<\/a> et seq.) of Title 58.1 and fees for maintaining the Bureau of Insurance<\/span> under Chapter 4 (§ 38.2-400<\/a> et seq.), which are, in all cases, attributable to such health care plan or plans, shall be the same as the license taxes and fees required of health maintenance organizations generally. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> Except as provided herein, a converted insurer<\/span> shall not, after the effective date of its conversion, use in its accident and sickness insurance policies<\/span>, contracts<\/span> or other literature (i) the words “health maintenance organization” or “HMO” or (ii) any other words descriptive of a health maintenance organization or deceptively similar to the name or description of any health maintenance organization then doing business in the Commonwealth in any manner that misrepresents the benefits, advantages, conditions, or terms of the converted insurer<\/span>’s insurance policies<\/span>, contracts<\/span>, or other literature. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> For the purposes of handling the rehabilitation, liquidation<\/span>, or conservation of a converted insurer<\/span>, the provisions of Chapter 15 (§ 38.2-1500<\/a> et seq.) shall apply. Whenever an order<\/span> has been entered pursuant to Chapter 15 authorizing the Commission<\/span> or other receiver to proceed with the rehabilitation, liquidation<\/span>, or conservation of a converted insurer<\/span>, the Commission<\/span> may utilize the provisions of § 38.2-4310<\/a>, to protect the interests of enrollees in the converted insurer<\/span>’s health care plans. If a receivership occurs in a converted insurer<\/span> that continues to provide or arrange for health care services under such health care plan or plans, contracts, or policies, the receiver shall consider these plans, contracts, or policies as existing in the converted insurer<\/span>. The Commission<\/span> or other receiver appointed pursuant to Chapter 15 shall allocate the assets<\/span>, liabilities, and obligations of the insolvent converted insurer<\/span> in the manner that the Commission<\/span> or other receiver determines is fair and equitable<\/span> to the insurer<\/span>’s accident and sickness insurance policyholders, health care plan enrollees, and other creditors<\/span>. The accident and sickness insurance contracts<\/span> and policies issued by the converted insurer<\/span> shall be governed by the provisions applicable to the Virginia Life, Accident and Sickness Insurance Guaranty Association pursuant to Chapter 17 (§ 38.2-1700<\/a> et seq.). The health care plans, contracts, or policies of the converted insurer<\/span>, associated with the business written as a health maintenance organization, shall be governed by the provisions of § 38.2-4310<\/a>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nCONVERSION OF A HEALTH MAINTENANCE ORGANIZATION TO AN ACCIDENT AND SICKNESS\nINSURER (\u00a7 38.2-1016.1)\n\nA. Any health maintenance organization domiciled in the Commonwealth and subject\nto the provisions of Chapter 43 (§ 38.2-4300 et seq.) may, at its option\nand without reincorporation, convert to an insurer licensed to write accident\nand sickness insurance, hereinafter referred to as the “converted\ninsurer,” by following the procedures set forth in this section. A health\nmaintenance organization that becomes a converted insurer under this section\nshall have all of the rights to and titles and interests in the assets of the\noriginal health maintenance organization, as well as all of its liabilities and\nobligations.\n\nB. A health maintenance organization eligible to become a converted insurer\nunder subsection A may effect such conversion by (i) complying with the\nrequirements for formation of a domestic insurer under Article 1 (§\n38.2-1000 et seq.); (ii) promptly filing with the Commission any necessary\namendments to its articles of incorporation, bylaws, and other corporate\ndocuments pursuant to the provisions of Chapter 9 (§ 13.1-601 et seq.) of\nTitle 13.1; and (iii) filing with the Commission such other information as the\nCommission may require to meet all of the requirements of an insurer in\nVirginia. When those requirements have been met, the Commission shall issue a\nlicense in accordance with the provisions of Article 5 (§ 38.2-1024 et\nseq.) to permit the converted insurer to conduct the business of accident and\nsickness insurance in the Commonwealth. Upon the issuance of the converted\ninsurer’s license, and except as provided in this section, the converted\ninsurer shall be subject to all of the provisions of this title that pertain to\ninsurers licensed pursuant to Article 5 (§ 38.2-1024 et seq.) of this\nchapter and the business of accident and sickness insurance.\n\nC. After the effective date of the health maintenance organization’s\nconversion to and licensure as an insurer, all of the converted insurer’s\nindividual and group health care plans, contracts, and evidences of coverage\nshall remain valid and in force in accordance with their terms until the earlier\nof (i) the expiration or termination of the plans, contracts, or evidences of\ncoverage; or (ii) the last day of the eighteenth month after the effective date\nof conversion. For the period during which the converted insurer continues to\nprovide or arrange for health care services under such health care plan or\nplans, the insurer’s obligation to pay license taxes under Chapter 25\n(§ 58.1-2500 et seq.) of Title 58.1 and fees for maintaining the Bureau of\nInsurance under Chapter 4 (§ 38.2-400 et seq.), which are, in all cases,\nattributable to such health care plan or plans, shall be the same as the license\ntaxes and fees required of health maintenance organizations generally.\n\nD. Except as provided herein, a converted insurer shall not, after the effective\ndate of its conversion, use in its accident and sickness insurance policies,\ncontracts or other literature (i) the words “health maintenance\norganization” or “HMO” or (ii) any other words descriptive of\na health maintenance organization or deceptively similar to the name or\ndescription of any health maintenance organization then doing business in the\nCommonwealth in any manner that misrepresents the benefits, advantages,\nconditions, or terms of the converted insurer’s insurance policies,\ncontracts, or other literature.\n\nE. For the purposes of handling the rehabilitation, liquidation, or conservation\nof a converted insurer, the provisions of Chapter 15 (§ 38.2-1500 et seq.)\nshall apply. Whenever an order has been entered pursuant to Chapter 15\nauthorizing the Commission or other receiver to proceed with the rehabilitation,\nliquidation, or conservation of a converted insurer, the Commission may utilize\nthe provisions of § 38.2-4310, to protect the interests of enrollees in the\nconverted insurer’s health care plans. If a receivership occurs in a\nconverted insurer that continues to provide or arrange for health care services\nunder such health care plan or plans, contracts, or policies, the receiver shall\nconsider these plans, contracts, or policies as existing in the converted\ninsurer. The Commission or other receiver appointed pursuant to Chapter 15 shall\nallocate the assets, liabilities, and obligations of the insolvent converted\ninsurer in the manner that the Commission or other receiver determines is fair\nand equitable to the insurer’s accident and sickness insurance\npolicyholders, health care plan enrollees, and other creditors. The accident and\nsickness insurance contracts and policies issued by the converted insurer shall\nbe governed by the provisions applicable to the Virginia Life, Accident and\nSickness Insurance Guaranty Association pursuant to Chapter 17 (§ 38.2-1700\net seq.). The health care plans, contracts, or policies of the converted\ninsurer, associated with the business written as a health maintenance\norganization, shall be governed by the provisions of § 38.2-4310.\n\nHISTORY: 2007, c. 579; 2018, c. 706.","edition":{"id":1,"name":"2025","slug":"2025","date_created":"2026-06-21 22:39:22","date_modified":"2026-06-21 22:39:22","current":1,"order_by":1,"last_import":null}}