{"formats":[{"name":"JSON","format":"json","url":"\/downloads\/2025\/code-json\/38.2-513.1.json"},{"name":"Plain Text","format":"text","url":"\/downloads\/2025\/code-text\/38.2-513.1.txt"},{"name":"XML","format":"xml","url":"\/downloads\/2025\/code-xml\/38.2-513.1.xml"},{"name":"HTML","format":"html","url":"\/downloads\/2025\/code-html\/38.2-513.1.html"}],"law_id":68759,"edition_id":1,"section_id":68759,"structure_id":13684,"section_number":"38.2-513.1","catch_line":"Insurance sales by depository institutions and other lending institutions","history":"2001, c. 371; 2002, c. 76.","full_text":"A\n\nNo depository institution, in the sale or solicitation of insurance, shall:1\n\nReject an insurance policy required in connection with a loan or extension of credit solely because the policy has been issued or underwritten by a person who is not associated with such depository institution or its affiliate;2\n\nRequire a debtor, insurer, agent, or surplus lines broker to pay a separate charge in connection with the handling of insurance required in connection with a loan or extension of credit or other banking product, unless such charge would be required when the depository institution or its affiliate is the licensed agent or surplus lines broker;3\n\nUse any advertisement that would cause a reasonable person to believe mistakenly that (i) the federal government or the Commonwealth is responsible for the insurance sales activities of, or stands behind the credit of, the depository institution or its affiliate; or (ii) the federal government or the Commonwealth guarantees any returns on insurance products or is a source of payment on any insurance obligation of or sold by the depository institution or its affiliate;4\n\nAct as an agent unless licensed in accordance with the provisions of Chapter 18 (§ 38.2-1800 et seq.) of this title;5\n\nPay or receive commissions or other valuable consideration except in accordance with the provisions of Chapter 18 (§ 38.2-1800 et seq.) of this title; however, nothing herein shall prohibit the payment of compensation to a person not licensed under Chapter 18 (§ 38.2-1800 et seq.) of this title for the referral of a customer, provided that (i) such compensation is not based on the purchase of insurance by the customer, (ii) such compensation is a one-time, nominal fee of a fixed dollar amount for each referral, and (iii) the referral does not include a discussion of specific insurance policy terms and conditions;6\n\nRelease insurance information of a customer to any person other than an officer, director, employee, agent, or affiliate of the depository institution, for the purpose of soliciting or selling insurance, without the express written consent of the customer. This provision shall not apply to (i) the release of information as otherwise authorized by state or federal law or (ii) the transfer of insurance information to an unaffiliated insurer in connection with transferring insurance in force on existing insureds of the depository institution or its affiliate, or in connection with a merger with or acquisition of an unaffiliated insurer. A depository institution or its affiliate shall be deemed to be in compliance with this paragraph if it complies with Chapter 6 (§ 38.2-600 et seq.) of this title;7\n\nUse, disclose, or release health information obtained from the insurance records of a customer for any purpose other than for its activities as a licensed agent or surplus lines broker, without the express written consent of the customer. A depository institution or its affiliate shall be deemed to be in compliance with this paragraph if it complies with Chapter 6 (§ 38.2-600 et seq.) of this title;8\n\nExtend credit or provide any product or service that is equivalent to an extension of credit, lease or sell property of any kind, furnish any services, or fix or vary the consideration for any of the foregoing on the condition or requirement that the customer obtain insurance from the depository institution or its affiliate, or a particular insurer, agent, or surplus lines broker; except that nothing shall prohibit the depository institution or its affiliate from:\n\t\t\t\ta. Engaging in any activity that would not violate section 106 of the Bank Holding Company Act Amendments of 1970, as interpreted by the Board of Governors of the Federal Reserve System, or\n\t\t\t\tb. Informing a customer that (i) insurance is required in order to obtain a loan or credit approval; (ii) the loan or credit approval is contingent upon the procurement by the customer of acceptable insurance; or (iii) insurance is available from the depository institution or its affiliate;9\n\nOffer, sell, or require insurance in connection with a loan or extension of credit, when an application for a loan or extension of credit from a depository institution is pending, unless a written disclosure is given to the customer indicating that the customer’s choice of an insurer will not affect the credit decision or credit terms in any way; provided, however, that the depository institution may impose reasonable requirements concerning the creditworthiness of the insurer and the scope of coverage chosen. Any disapproval of an insurer shall be deemed unreasonable if it is not based on reasonable standards uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for disapproval of an insurance policy because the policy contains coverage in addition to that required by the creditor. Use of the ratings of a nationally recognized rating service shall not be deemed unreasonable provided such ratings are based on reasonable standards uniformly applied. If an insurer, duly licensed in Virginia, does not possess the required rating of a nationally recognized rating service, no person who lends money or extends credit shall refuse to accept from the insurer a certificate of 100 percent reinsurance issued by another insurer pursuant to § 38.2-136, which does possess the required rating;10\n\nSell an insurance policy unless:\n\t\t\t\ta. A clear and conspicuous disclosure is given, in writing, where practicable, to the customer prior to the sale stating that such insurance policy (i) is not a deposit; (ii) is not insured by the Federal Deposit Insurance Corporation or any other federal government agency; (iii) is not guaranteed by the depository institution or, if appropriate, its affiliate or any person soliciting or selling insurance on its premises; and (iv) where appropriate, involves investment risk, including the potential loss of principal, and\n\t\t\t\tb. Written acknowledgment of the disclosure is obtained from the customer at the time the customer receives the disclosure or at the time of the initial purchase of the insurance policy;11\n\nSolicit or sell insurance, other than credit insurance or flood insurance, unless such solicitation or sale is completed through documents separate from any credit transactions;12\n\nInclude the expense of insurance premiums, other than credit insurance premiums, title insurance premiums, or flood insurance premiums, in the primary credit transaction without the express written consent of the customer; or13\n\nSolicit or sell insurance unless (i) its insurance sales activities are, to the extent practicable, physically segregated from areas where retail deposits are routinely accepted; (ii) it maintains separate and distinct books and records relating to such insurance transactions for the three previous calendar years; and (iii) it makes all such books and records available to the Commission for inspection upon reasonable notice.B\n\nAs used in this section:\n\t\t\t“Affiliate” means any company that controls, is controlled by, or is under common control with another company.\n\t\t\t“Credit insurance” means the lines of insurance defined in §§ 38.2-103, 38.2-108, 38.2-122.1, and 38.2-122.2.\n\t\t\t“Customer” means an individual who obtains, applies for, or is solicited to obtain insurance.\n\t\t\t“Depository institution” means any bank or savings association.\n\t\t\t“Insurance information” means information concerning the premiums, terms, and conditions of insurance coverage, including expiration dates and rates, and insurance claims of a customer contained in the records of a depository institution or its affiliate.C\n\nNotwithstanding anything to the contrary, the provisions of this section, except subdivision A. 10., shall also apply to any person who lends money or extends credit and who sells or solicits any insurance as classified and defined in Article 2 (§ 38.2-101 et seq.) of Chapter 1 of this title in connection therewith. However, this section shall not apply to premium finance companies licensed under Chapter 47 (§ 38.2-4700 et seq.) of this title or agents who extend credit as authorized in § 38.2-1806 to the extent that such premium finance companies or agents are not affiliated with a depository institution.D\n\nIf the customer agrees, the written disclosures and acknowledgements required by subsection A of this section may be provided electronically. Such disclosures shall be provided in a format that the customer may retain and reproduce for later reference. When a purchase of insurance is made by telephone, the disclosures and acknowledgements required by subsection A of this section may be given orally, provided that (i) such disclosures are mailed or provided in electronic form within three working days after the sale, solicitation, or offer of the insurance policy; (ii) documentation is maintained showing that oral acknowledgement was given by the customer; and (iii) a reasonable effort is made to obtain written acknowledgement from the customer.E\n\nThe Commission shall have the power to examine and investigate the affairs of any person to whom this section applies to determine whether that person has violated this section. If a violation of this section is found, the person in violation shall be subject to the same procedures and penalties as are applicable to other provisions of this chapter.F\n\nExcept as provided for specifically in subsection A, this section shall not prevent or restrict a depository institution or its affiliate from engaging directly or indirectly, either by itself or in conjunction with an affiliate, or any other person, in any activity authorized or permitted under state or federal law.","order_by":null,"text":{"0":{"id":248904,"text":"No depository institution, in the sale or solicitation of insurance, shall:","type":"section","prefixes":["A"],"prefix":"A","entire_prefix":"A","prefix_anchor":"A","level":1,"next_prefix":"A1"},"1":{"id":248905,"text":"Reject an insurance policy required in connection with a loan or extension of credit solely because the policy has been issued or underwritten by a person who is not associated with such depository institution or its affiliate;","type":"section","prefixes":["A","1"],"prefix":"1","entire_prefix":"A1","prefix_anchor":"A1","level":2,"prior_prefix":"A","next_prefix":"A2"},"2":{"id":248906,"text":"Require a debtor, insurer, agent, or surplus lines broker to pay a separate charge in connection with the handling of insurance required in connection with a loan or extension of credit or other banking product, unless such charge would be required when the depository institution or its affiliate is the licensed agent or surplus lines broker;","type":"section","prefixes":["A","2"],"prefix":"2","entire_prefix":"A2","prefix_anchor":"A2","level":2,"prior_prefix":"A1","next_prefix":"A3"},"3":{"id":248907,"text":"Use any advertisement that would cause a reasonable person to believe mistakenly that (i) the federal government or the Commonwealth is responsible for the insurance sales activities of, or stands behind the credit of, the depository institution or its affiliate; or (ii) the federal government or the Commonwealth guarantees any returns on insurance products or is a source of payment on any insurance obligation of or sold by the depository institution or its affiliate;","type":"section","prefixes":["A","3"],"prefix":"3","entire_prefix":"A3","prefix_anchor":"A3","level":2,"prior_prefix":"A2","next_prefix":"A4"},"4":{"id":248908,"text":"Act as an agent unless licensed in accordance with the provisions of Chapter 18 (§ 38.2-1800 et seq.) of this title;","type":"section","prefixes":["A","4"],"prefix":"4","entire_prefix":"A4","prefix_anchor":"A4","level":2,"prior_prefix":"A3","next_prefix":"A5"},"5":{"id":248909,"text":"Pay or receive commissions or other valuable consideration except in accordance with the provisions of Chapter 18 (§ 38.2-1800 et seq.) of this title; however, nothing herein shall prohibit the payment of compensation to a person not licensed under Chapter 18 (§ 38.2-1800 et seq.) of this title for the referral of a customer, provided that (i) such compensation is not based on the purchase of insurance by the customer, (ii) such compensation is a one-time, nominal fee of a fixed dollar amount for each referral, and (iii) the referral does not include a discussion of specific insurance policy terms and conditions;","type":"section","prefixes":["A","5"],"prefix":"5","entire_prefix":"A5","prefix_anchor":"A5","level":2,"prior_prefix":"A4","next_prefix":"A6"},"6":{"id":248910,"text":"Release insurance information of a customer to any person other than an officer, director, employee, agent, or affiliate of the depository institution, for the purpose of soliciting or selling insurance, without the express written consent of the customer. This provision shall not apply to (i) the release of information as otherwise authorized by state or federal law or (ii) the transfer of insurance information to an unaffiliated insurer in connection with transferring insurance in force on existing insureds of the depository institution or its affiliate, or in connection with a merger with or acquisition of an unaffiliated insurer. A depository institution or its affiliate shall be deemed to be in compliance with this paragraph if it complies with Chapter 6 (§ 38.2-600 et seq.) of this title;","type":"section","prefixes":["A","6"],"prefix":"6","entire_prefix":"A6","prefix_anchor":"A6","level":2,"prior_prefix":"A5","next_prefix":"A7"},"7":{"id":248911,"text":"Use, disclose, or release health information obtained from the insurance records of a customer for any purpose other than for its activities as a licensed agent or surplus lines broker, without the express written consent of the customer. A depository institution or its affiliate shall be deemed to be in compliance with this paragraph if it complies with Chapter 6 (§ 38.2-600 et seq.) of this title;","type":"section","prefixes":["A","7"],"prefix":"7","entire_prefix":"A7","prefix_anchor":"A7","level":2,"prior_prefix":"A6","next_prefix":"A8"},"8":{"id":248912,"text":"Extend credit or provide any product or service that is equivalent to an extension of credit, lease or sell property of any kind, furnish any services, or fix or vary the consideration for any of the foregoing on the condition or requirement that the customer obtain insurance from the depository institution or its affiliate, or a particular insurer, agent, or surplus lines broker; except that nothing shall prohibit the depository institution or its affiliate from:\n\t\t\t\ta. Engaging in any activity that would not violate section 106 of the Bank Holding Company Act Amendments of 1970, as interpreted by the Board of Governors of the Federal Reserve System, or\n\t\t\t\tb. Informing a customer that (i) insurance is required in order to obtain a loan or credit approval; (ii) the loan or credit approval is contingent upon the procurement by the customer of acceptable insurance; or (iii) insurance is available from the depository institution or its affiliate;","type":"section","prefixes":["A","8"],"prefix":"8","entire_prefix":"A8","prefix_anchor":"A8","level":2,"prior_prefix":"A7","next_prefix":"A9"},"9":{"id":248913,"text":"Offer, sell, or require insurance in connection with a loan or extension of credit, when an application for a loan or extension of credit from a depository institution is pending, unless a written disclosure is given to the customer indicating that the customer’s choice of an insurer will not affect the credit decision or credit terms in any way; provided, however, that the depository institution may impose reasonable requirements concerning the creditworthiness of the insurer and the scope of coverage chosen. Any disapproval of an insurer shall be deemed unreasonable if it is not based on reasonable standards uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer. Such standards shall not discriminate against any particular type of insurer, nor shall such standards call for disapproval of an insurance policy because the policy contains coverage in addition to that required by the creditor. Use of the ratings of a nationally recognized rating service shall not be deemed unreasonable provided such ratings are based on reasonable standards uniformly applied. If an insurer, duly licensed in Virginia, does not possess the required rating of a nationally recognized rating service, no person who lends money or extends credit shall refuse to accept from the insurer a certificate of 100 percent reinsurance issued by another insurer pursuant to § 38.2-136, which does possess the required rating;","type":"section","prefixes":["A","9"],"prefix":"9","entire_prefix":"A9","prefix_anchor":"A9","level":2,"prior_prefix":"A8","next_prefix":"A10"},"10":{"id":248914,"text":"Sell an insurance policy unless:\n\t\t\t\ta. A clear and conspicuous disclosure is given, in writing, where practicable, to the customer prior to the sale stating that such insurance policy (i) is not a deposit; (ii) is not insured by the Federal Deposit Insurance Corporation or any other federal government agency; (iii) is not guaranteed by the depository institution or, if appropriate, its affiliate or any person soliciting or selling insurance on its premises; and (iv) where appropriate, involves investment risk, including the potential loss of principal, and\n\t\t\t\tb. Written acknowledgment of the disclosure is obtained from the customer at the time the customer receives the disclosure or at the time of the initial purchase of the insurance policy;","type":"section","prefixes":["A","10"],"prefix":"10","entire_prefix":"A10","prefix_anchor":"A10","level":2,"prior_prefix":"A9","next_prefix":"A11"},"11":{"id":248915,"text":"Solicit or sell insurance, other than credit insurance or flood insurance, unless such solicitation or sale is completed through documents separate from any credit transactions;","type":"section","prefixes":["A","11"],"prefix":"11","entire_prefix":"A11","prefix_anchor":"A11","level":2,"prior_prefix":"A10","next_prefix":"A12"},"12":{"id":248916,"text":"Include the expense of insurance premiums, other than credit insurance premiums, title insurance premiums, or flood insurance premiums, in the primary credit transaction without the express written consent of the customer; or","type":"section","prefixes":["A","12"],"prefix":"12","entire_prefix":"A12","prefix_anchor":"A12","level":2,"prior_prefix":"A11","next_prefix":"A13"},"13":{"id":248917,"text":"Solicit or sell insurance unless (i) its insurance sales activities are, to the extent practicable, physically segregated from areas where retail deposits are routinely accepted; (ii) it maintains separate and distinct books and records relating to such insurance transactions for the three previous calendar years; and (iii) it makes all such books and records available to the Commission for inspection upon reasonable notice.","type":"section","prefixes":["A","13"],"prefix":"13","entire_prefix":"A13","prefix_anchor":"A13","level":2,"prior_prefix":"A12","next_prefix":"B"},"14":{"id":248918,"text":"As used in this section:\n\t\t\t“Affiliate” means any company that controls, is controlled by, or is under common control with another company.\n\t\t\t“Credit insurance” means the lines of insurance defined in §§ 38.2-103, 38.2-108, 38.2-122.1, and 38.2-122.2.\n\t\t\t“Customer” means an individual who obtains, applies for, or is solicited to obtain insurance.\n\t\t\t“Depository institution” means any bank or savings association.\n\t\t\t“Insurance information” means information concerning the premiums, terms, and conditions of insurance coverage, including expiration dates and rates, and insurance claims of a customer contained in the records of a depository institution or its affiliate.","type":"section","prefixes":["B"],"prefix":"B","entire_prefix":"B","prefix_anchor":"B","level":1,"prior_prefix":"A13","next_prefix":"C"},"15":{"id":248919,"text":"Notwithstanding anything to the contrary, the provisions of this section, except subdivision A. 10., shall also apply to any person who lends money or extends credit and who sells or solicits any insurance as classified and defined in Article 2 (§ 38.2-101 et seq.) of Chapter 1 of this title in connection therewith. However, this section shall not apply to premium finance companies licensed under Chapter 47 (§ 38.2-4700 et seq.) of this title or agents who extend credit as authorized in § 38.2-1806 to the extent that such premium finance companies or agents are not affiliated with a depository institution.","type":"section","prefixes":["C"],"prefix":"C","entire_prefix":"C","prefix_anchor":"C","level":1,"prior_prefix":"B","next_prefix":"D"},"16":{"id":248920,"text":"If the customer agrees, the written disclosures and acknowledgements required by subsection A of this section may be provided electronically. Such disclosures shall be provided in a format that the customer may retain and reproduce for later reference. When a purchase of insurance is made by telephone, the disclosures and acknowledgements required by subsection A of this section may be given orally, provided that (i) such disclosures are mailed or provided in electronic form within three working days after the sale, solicitation, or offer of the insurance policy; (ii) documentation is maintained showing that oral acknowledgement was given by the customer; and (iii) a reasonable effort is made to obtain written acknowledgement from the customer.","type":"section","prefixes":["D"],"prefix":"D","entire_prefix":"D","prefix_anchor":"D","level":1,"prior_prefix":"C","next_prefix":"E"},"17":{"id":248921,"text":"The Commission shall have the power to examine and investigate the affairs of any person to whom this section applies to determine whether that person has violated this section. If a violation of this section is found, the person in violation shall be subject to the same procedures and penalties as are applicable to other provisions of this chapter.","type":"section","prefixes":["E"],"prefix":"E","entire_prefix":"E","prefix_anchor":"E","level":1,"prior_prefix":"D","next_prefix":"F"},"18":{"id":248922,"text":"Except as provided for specifically in subsection A, this section shall not prevent or restrict a depository institution or its affiliate from engaging directly or indirectly, either by itself or in conjunction with an affiliate, or any other person, in any activity authorized or permitted under state or federal law.","type":"section","prefixes":["F"],"prefix":"F","entire_prefix":"F","prefix_anchor":"F","level":1,"prior_prefix":"E"}},"ancestry":[{"id":13684,"edition_id":1,"name":"Unfair Trade Practices","identifier":"5","label":"chapter","depth":2,"order_by":1,"parent_id":12698,"metadata":{},"date_created":"2026-06-26 03:45:33","date_modified":"2026-06-26 03:45:33","permalink":{"id":217475,"object_type":"structure","relational_id":13684,"identifier":"5","token":"38.2\/5","url":"\/38.2\/5\/","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":66905,"structure_id":13684,"section_number":"38.2-500","catch_line":"Declaration of purpose","url":"\/38.2-500\/","token":"38.2\/5\/38.2-500","metadata":false},{"id":79956,"structure_id":13684,"section_number":"38.2-501","catch_line":"Definitions","url":"\/38.2-501\/","token":"38.2\/5\/38.2-501","metadata":false},{"id":79437,"structure_id":13684,"section_number":"38.2-502","catch_line":"Misrepresentations and false advertising of insurance policies","url":"\/38.2-502\/","token":"38.2\/5\/38.2-502","metadata":false},{"id":54663,"structure_id":13684,"section_number":"38.2-503","catch_line":"False information and advertising generally","url":"\/38.2-503\/","token":"38.2\/5\/38.2-503","metadata":false},{"id":82451,"structure_id":13684,"section_number":"38.2-504","catch_line":"Defamation","url":"\/38.2-504\/","token":"38.2\/5\/38.2-504","metadata":false},{"id":84128,"structure_id":13684,"section_number":"38.2-505","catch_line":"Boycott, coercion and intimidation","url":"\/38.2-505\/","token":"38.2\/5\/38.2-505","metadata":false},{"id":78214,"structure_id":13684,"section_number":"38.2-506","catch_line":"False statements and entries","url":"\/38.2-506\/","token":"38.2\/5\/38.2-506","metadata":false},{"id":56726,"structure_id":13684,"section_number":"38.2-507","catch_line":"Stock operations and advisory board contracts","url":"\/38.2-507\/","token":"38.2\/5\/38.2-507","metadata":false},{"id":67626,"structure_id":13684,"section_number":"38.2-508","catch_line":"Unfair discrimination","url":"\/38.2-508\/","token":"38.2\/5\/38.2-508","metadata":false},{"id":80488,"structure_id":13684,"section_number":"38.2-508.1","catch_line":"Unfair discrimination; members of the armed forces","url":"\/38.2-508.1\/","token":"38.2\/5\/38.2-508.1","metadata":false},{"id":63719,"structure_id":13684,"section_number":"38.2-508.2","catch_line":"Discrimination prohibited","url":"\/38.2-508.2\/","token":"38.2\/5\/38.2-508.2","metadata":false},{"id":79096,"structure_id":13684,"section_number":"38.2-508.3","catch_line":"Consideration of Medicaid eligibility prohibited","url":"\/38.2-508.3\/","token":"38.2\/5\/38.2-508.3","metadata":false},{"id":61622,"structure_id":13684,"section_number":"38.2-508.4","catch_line":"Genetic information privacy","url":"\/38.2-508.4\/","token":"38.2\/5\/38.2-508.4","metadata":false},{"id":77794,"structure_id":13684,"section_number":"38.2-508.5","catch_line":"Re-underwriting individual under existing group or individual accident and sickness insurance policy prohibited; exceptions","url":"\/38.2-508.5\/","token":"38.2\/5\/38.2-508.5","metadata":false},{"id":66721,"structure_id":13684,"section_number":"38.2-509","catch_line":"Rebates","url":"\/38.2-509\/","token":"38.2\/5\/38.2-509","metadata":false},{"id":56597,"structure_id":13684,"section_number":"38.2-510","catch_line":"Unfair claim settlement practices","url":"\/38.2-510\/","token":"38.2\/5\/38.2-510","metadata":false},{"id":80252,"structure_id":13684,"section_number":"38.2-511","catch_line":"Failure to maintain record of complaints","url":"\/38.2-511\/","token":"38.2\/5\/38.2-511","metadata":false},{"id":77547,"structure_id":13684,"section_number":"38.2-512","catch_line":"Misrepresentation in insurance documents or communications","url":"\/38.2-512\/","token":"38.2\/5\/38.2-512","metadata":false},{"id":64491,"structure_id":13684,"section_number":"38.2-513","catch_line":"Repealed","url":"\/38.2-513\/","token":"38.2\/5\/38.2-513","metadata":false},{"id":68759,"structure_id":13684,"section_number":"38.2-513.1","catch_line":"Insurance sales by depository institutions and other lending institutions","url":"\/38.2-513.1\/","token":"38.2\/5\/38.2-513.1","metadata":false},{"id":84848,"structure_id":13684,"section_number":"38.2-514","catch_line":"Failure to make disclosure","url":"\/38.2-514\/","token":"38.2\/5\/38.2-514","metadata":false},{"id":75763,"structure_id":13684,"section_number":"38.2-514.1","catch_line":"Disclosure required","url":"\/38.2-514.1\/","token":"38.2\/5\/38.2-514.1","metadata":false},{"id":72002,"structure_id":13684,"section_number":"38.2-514.2","catch_line":"Disclosures required of motor vehicle rental contract insurance agents and enrollers","url":"\/38.2-514.2\/","token":"38.2\/5\/38.2-514.2","metadata":false},{"id":77046,"structure_id":13684,"section_number":"38.2-515","catch_line":"Power of Commission","url":"\/38.2-515\/","token":"38.2\/5\/38.2-515","metadata":false},{"id":62747,"structure_id":13684,"section_number":"38.2-515.1","catch_line":"Power of Commission; policies issued outside of the Commonwealth","url":"\/38.2-515.1\/","token":"38.2\/5\/38.2-515.1","metadata":false},{"id":67332,"structure_id":13684,"section_number":"38.2-516","catch_line":"Prohibited compensation for intra-company replacement","url":"\/38.2-516\/","token":"38.2\/5\/38.2-516","metadata":false},{"id":76418,"structure_id":13684,"section_number":"38.2-517","catch_line":"Unfair settlement practices; replacement and repair; penalty","url":"\/38.2-517\/","token":"38.2\/5\/38.2-517","metadata":false},{"id":74674,"structure_id":13684,"section_number":"38.2-518","catch_line":"Certificates of insurance","url":"\/38.2-518\/","token":"38.2\/5\/38.2-518","metadata":false}],"previous_section":{"id":64491,"structure_id":13684,"section_number":"38.2-513","catch_line":"Repealed","url":"\/38.2-513\/","token":"38.2\/5\/38.2-513","metadata":false},"next_section":{"id":84848,"structure_id":13684,"section_number":"38.2-514","catch_line":"Failure to make disclosure","url":"\/38.2-514\/","token":"38.2\/5\/38.2-514","metadata":false},"metadata":false,"official_url":"https:\/\/law.lis.virginia.gov\/vacode\/38.2-513.1\/","history_text":"

This law was first created in 2001. The record of its establishment is cataloged in chapter 371<\/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 2002, chapter 76<\/a>.<\/p>","references":false,"refers_to":[{"id":72897,"section_number":"38.2-101","catch_line":"Classification of insurance","order_by":null,"url":"\/38.2-101\/"},{"id":76182,"section_number":"38.2-103","catch_line":"Credit life","order_by":null,"url":"\/38.2-103\/"},{"id":62263,"section_number":"38.2-108","catch_line":"Credit accident and sickness","order_by":null,"url":"\/38.2-108\/"},{"id":69638,"section_number":"38.2-122.1","catch_line":"Credit involuntary unemployment insurance","order_by":null,"url":"\/38.2-122.1\/"},{"id":69580,"section_number":"38.2-122.2","catch_line":"Credit property insurance","order_by":null,"url":"\/38.2-122.2\/"},{"id":83796,"section_number":"38.2-136","catch_line":"Reinsurance","order_by":null,"url":"\/38.2-136\/"},{"id":67482,"section_number":"38.2-1800","catch_line":"Definitions","order_by":null,"url":"\/38.2-1800\/"},{"id":83261,"section_number":"38.2-1806","catch_line":"Interest with respect to credit extended or money lent for premiums on certain policies","order_by":null,"url":"\/38.2-1806\/"},{"id":70545,"section_number":"38.2-4700","catch_line":"What persons deemed insurance premium finance companies","order_by":null,"url":"\/38.2-4700\/"},{"id":64742,"section_number":"38.2-600","catch_line":"Purposes","order_by":null,"url":"\/38.2-600\/"}],"permalink":{"id":217553,"object_type":"law","relational_id":68759,"identifier":"38.2-513.1","token":"38.2\/5\/38.2-513.1","url":"\/38.2-513.1\/","edition_id":1,"permalink":0,"preferred":1},"url":"\/38.2-513.1\/","token":"38.2\/5\/38.2-513.1","dublin_core":{"Title":"Insurance sales by depository institutions and other lending institutions","Type":"Text","Format":"text\/html","Identifier":"\u00a7 38.2-513.1","Relation":"Code of Virginia"},"html":"\n\t\t\t\t\t\t

A.<\/span> No depository institution<\/span>, in the sale or solicitation of insurance<\/span>, shall: <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

1.<\/span> Reject an insurance policy<\/span> required in connection with a loan or extension of credit solely because the policy has been issued or underwritten by a person<\/span> who is not associated with such depository institution<\/span> or its affiliate<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

2.<\/span> Require a debtor, insurer<\/span>, agent, or surplus lines broker to pay a separate charge in connection with the handling of insurance required in connection with a loan or extension of credit or other banking product, unless such charge would be required when the depository institution<\/span> or its affiliate<\/span> is the licensed agent or surplus lines broker; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

3.<\/span> Use any advertisement that would cause a reasonable person<\/span> to believe mistakenly that (i) the federal government or the Commonwealth is responsible for the insurance sales activities of, or stands behind the credit of, the depository institution<\/span> or its affiliate<\/span>; or (ii) the federal government or the Commonwealth guarantees any returns on insurance products or is a source of payment on any insurance obligation of or sold by the depository institution<\/span> or its affiliate<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

4.<\/span> Act as an agent unless licensed in accordance with the provisions of Chapter 18 (§ 38.2-1800<\/a> et seq.) of this title; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

5.<\/span> Pay or receive commissions<\/span> or other valuable consideration except in accordance with the provisions of Chapter 18 (§ 38.2-1800<\/a> et seq.) of this title; however, nothing herein shall prohibit the payment of compensation to a person<\/span> not licensed under Chapter 18 (§ 38.2-1800<\/a> et seq.) of this title for the referral of a customer<\/span>, provided that (i) such compensation is not based on the purchase of insurance by the customer<\/span>, (ii) such compensation is a one-time, nominal fee of a fixed dollar amount for each referral, and (iii) the referral does not include a discussion of specific insurance policy<\/span> terms and conditions; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

6.<\/span> Release insurance information<\/span> of a customer<\/span> to any person<\/span> other than an officer, director, employee, agent, or affiliate<\/span> of the depository institution<\/span>, for the purpose of soliciting or selling insurance, without the express written consent of the customer<\/span>. This provision shall not apply to (i) the release of information as otherwise authorized by state<\/span> or federal law<\/span> or (ii) the transfer of insurance information<\/span> to an unaffiliated insurer<\/span> in connection with transferring insurance in force on existing insureds of the depository institution<\/span> or its affiliate<\/span>, or in connection with a merger with or acquisition of an unaffiliated insurer<\/span>. A depository institution<\/span> or its affiliate<\/span> shall be deemed to be in compliance with this paragraph if it complies with Chapter 6 (§ 38.2-600<\/a> et seq.) of this title; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

7.<\/span> Use, disclose, or release health information obtained from the insurance records of a customer<\/span> for any purpose other than for its activities as a licensed agent or surplus lines broker, without the express written consent of the customer<\/span>. A depository institution<\/span> or its affiliate<\/span> shall be deemed to be in compliance with this paragraph if it complies with Chapter 6 (§ 38.2-600<\/a> et seq.) of this title; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

8.<\/span> Extend credit or provide any product or service that is equivalent to an extension of credit, lease or sell property of any kind, furnish any services, or fix or vary the consideration for any of the foregoing on the condition or requirement that the customer<\/span> obtain insurance from the depository institution<\/span> or its affiliate<\/span>, or a particular insurer<\/span>, agent, or surplus lines broker; except that nothing shall prohibit the depository institution<\/span> or its affiliate<\/span> from:\n\t\t\t\ta. Engaging in any activity that would not violate section 106 of the Bank Holding Company<\/span> Act Amendments of 1970, as interpreted by the Board of Governors of the Federal Reserve System, or\n\t\t\t\tb. Informing a customer<\/span> that (i) insurance is required in order<\/span> to obtain a loan or credit approval; (ii) the loan or credit approval is contingent upon the procurement by the customer<\/span> of acceptable insurance; or (iii) insurance is available from the depository institution<\/span> or its affiliate<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

9.<\/span> Offer, sell, or require insurance in connection with a loan or extension of credit, when an application for a loan or extension of credit from a depository institution<\/span> is pending, unless a written disclosure is given to the customer<\/span> indicating that the customer<\/span>’s choice of an insurer<\/span> will not affect the credit decision or credit terms in any way; provided, however, that the depository institution<\/span> may impose reasonable requirements concerning the creditworthiness of the insurer<\/span> and the scope of coverage chosen. Any disapproval of an insurer<\/span> shall be deemed unreasonable if it is not based on reasonable standards uniformly applied, relating to the extent of coverage required and the financial soundness and the services of an insurer<\/span>. Such standards shall not discriminate against any particular type of insurer<\/span>, nor shall such standards call for disapproval of an insurance policy<\/span> because the policy contains coverage in addition to that required by the creditor<\/span>. Use of the ratings of a nationally recognized rating service shall not be deemed unreasonable provided such ratings are based on reasonable standards uniformly applied. If an insurer<\/span>, duly licensed in Virginia, does not possess the required rating of a nationally recognized rating service, no person<\/span> who lends money or extends credit shall refuse to accept from the insurer<\/span> a certificate of 100 percent reinsurance issued by another insurer<\/span> pursuant to § 38.2-136<\/a>, which does possess the required rating; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

10.<\/span> Sell an insurance policy<\/span> unless:\n\t\t\t\ta. A clear and conspicuous disclosure is given, in writing, where practicable, to the customer<\/span> prior to the sale stating that such insurance policy<\/span> (i) is not a deposit; (ii) is not insured by the Federal Deposit Insurance Corporation or any other federal government agency; (iii) is not guaranteed by the depository institution<\/span> or, if appropriate, its affiliate<\/span> or any person<\/span> soliciting or selling insurance on its premises; and (iv) where appropriate, involves investment risk, including the potential loss of principal, and\n\t\t\t\tb. Written acknowledgment of the disclosure is obtained from the customer<\/span> at the time the customer<\/span> receives the disclosure or at the time of the initial purchase of the insurance policy<\/span>; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

11.<\/span> Solicit or sell insurance, other than credit insurance<\/span> or flood insurance, unless such solicitation or sale is completed through documents separate from any credit transactions; <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

12.<\/span> Include the expense of insurance premiums, other than credit insurance<\/span> premiums, title insurance premiums, or flood insurance premiums, in the primary credit transaction without the express written consent of the customer<\/span>; or <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

13.<\/span> Solicit or sell insurance unless (i) its insurance sales activities are, to the extent practicable, physically segregated from areas where retail deposits are routinely accepted; (ii) it maintains separate and distinct books and records relating to such insurance transactions for the three previous calendar years; and (iii) it makes all such books and records available to the Commission<\/span> for inspection upon reasonable notice. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

B.<\/span> As used in this section:\n\t\t\t“Affiliate<\/span>” means any company<\/span> that controls, is controlled by, or is under common control with another company<\/span>.\n\t\t\t“Credit insurance<\/span>” means the lines of insurance defined in §§ 38.2-103<\/a>, 38.2-108<\/a>, 38.2-122.1<\/a>, and 38.2-122.2<\/a>.\n\t\t\t“Customer<\/span>” means an individual who obtains, applies for, or is solicited to obtain insurance.\n\t\t\t“Depository institution<\/span>” means any bank or savings association.\n\t\t\t“Insurance information<\/span>” means information concerning the premiums, terms, and conditions of insurance coverage, including expiration dates and rates<\/span><\/span>, and insurance claims of a customer<\/span> contained in the records of a depository institution<\/span> or its affiliate<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

C.<\/span> Notwithstanding anything to the contrary, the provisions of this section, except subdivision A. 10., shall also apply to any person<\/span> who lends money or extends credit and who sells or solicits any insurance as classified and defined in Article 2 (§ 38.2-101<\/a> et seq.) of Chapter 1 of this title in connection therewith. However, this section shall not apply to premium finance companies licensed under Chapter 47 (§ 38.2-4700<\/a> et seq.) of this title or agents who extend credit as authorized in § 38.2-1806<\/a> to the extent that such premium finance companies or agents are not affiliated with a depository institution<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

D.<\/span> If the customer<\/span> agrees, the written disclosures and acknowledgements required by subsection A of this section may be provided electronically. Such disclosures shall be provided in a format that the customer<\/span> may retain and reproduce for later reference. When a purchase of insurance is made by telephone, the disclosures and acknowledgements required by subsection A of this section may be given orally, provided that (i) such disclosures are mailed or provided in electronic form within three working days after the sale, solicitation, or offer of the insurance policy<\/span>; (ii) documentation is maintained showing that oral acknowledgement was given by the customer<\/span>; and (iii) a reasonable effort is made to obtain written acknowledgement from the customer<\/span>. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

E.<\/span> The Commission<\/span> shall have the power to examine and investigate the affairs of any person<\/span> to whom this section applies to determine whether that person<\/span> has violated this section. If a violation of this section is found, the person<\/span> in violation shall be subject to the same procedures and penalties as are applicable to other provisions of this chapter. <\/i><\/a><\/p><\/section>\n\t\t\t\t\t\t

F.<\/span> Except as provided for specifically in subsection A, this section shall not prevent or restrict a depository institution<\/span> or its affiliate<\/span> from engaging directly or indirectly, either by itself or in conjunction with an affiliate<\/span>, or any other person<\/span>, in any activity authorized or permitted under state<\/span> or federal law<\/span>. <\/i><\/a><\/p><\/section>","plain_text":" CODE OF VIRGINIA\n\nINSURANCE SALES BY DEPOSITORY INSTITUTIONS AND OTHER LENDING INSTITUTIONS (\u00a7\n38.2-513.1)\n\nA. No depository institution, in the sale or solicitation of insurance, shall:\n\n 1. Reject an insurance policy required in connection with a loan or extension\n of credit solely because the policy has been issued or underwritten by a\n person who is not associated with such depository institution or its\n affiliate;\n\n 2. Require a debtor, insurer, agent, or surplus lines broker to pay a separate\n charge in connection with the handling of insurance required in connection\n with a loan or extension of credit or other banking product, unless such\n charge would be required when the depository institution or its affiliate is\n the licensed agent or surplus lines broker;\n\n 3. Use any advertisement that would cause a reasonable person to believe\n mistakenly that (i) the federal government or the Commonwealth is responsible\n for the insurance sales activities of, or stands behind the credit of, the\n depository institution or its affiliate; or (ii) the federal government or the\n Commonwealth guarantees any returns on insurance products or is a source of\n payment on any insurance obligation of or sold by the depository institution\n or its affiliate;\n\n 4. Act as an agent unless licensed in accordance with the provisions of\n Chapter 18 (§ 38.2-1800 et seq.) of this title;\n\n 5. Pay or receive commissions or other valuable consideration except in\n accordance with the provisions of Chapter 18 (§ 38.2-1800 et seq.) of\n this title; however, nothing herein shall prohibit the payment of compensation\n to a person not licensed under Chapter 18 (§ 38.2-1800 et seq.) of this\n title for the referral of a customer, provided that (i) such compensation is\n not based on the purchase of insurance by the customer, (ii) such compensation\n is a one-time, nominal fee of a fixed dollar amount for each referral, and\n (iii) the referral does not include a discussion of specific insurance policy\n terms and conditions;\n\n 6. Release insurance information of a customer to any person other than an\n officer, director, employee, agent, or affiliate of the depository\n institution, for the purpose of soliciting or selling insurance, without the\n express written consent of the customer. This provision shall not apply to (i)\n the release of information as otherwise authorized by state or federal law or\n (ii) the transfer of insurance information to an unaffiliated insurer in\n connection with transferring insurance in force on existing insureds of the\n depository institution or its affiliate, or in connection with a merger with\n or acquisition of an unaffiliated insurer. A depository institution or its\n affiliate shall be deemed to be in compliance with this paragraph if it\n complies with Chapter 6 (§ 38.2-600 et seq.) of this title;\n\n 7. Use, disclose, or release health information obtained from the insurance\n records of a customer for any purpose other than for its activities as a\n licensed agent or surplus lines broker, without the express written consent of\n the customer. A depository institution or its affiliate shall be deemed to be\n in compliance with this paragraph if it complies with Chapter 6 (§\n 38.2-600 et seq.) of this title;\n\n 8. Extend credit or provide any product or service that is equivalent to an\n extension of credit, lease or sell property of any kind, furnish any services,\n or fix or vary the consideration for any of the foregoing on the condition or\n requirement that the customer obtain insurance from the depository institution\n or its affiliate, or a particular insurer, agent, or surplus lines broker;\n except that nothing shall prohibit the depository institution or its affiliate\n from:\n \t\t\t\ta. Engaging in any activity that would not violate section 106 of the Bank\n Holding Company Act Amendments of 1970, as interpreted by the Board of\n Governors of the Federal Reserve System, or\n \t\t\t\tb. Informing a customer that (i) insurance is required in order to obtain\n a loan or credit approval; (ii) the loan or credit approval is contingent upon\n the procurement by the customer of acceptable insurance; or (iii) insurance is\n available from the depository institution or its affiliate;\n\n 9. Offer, sell, or require insurance in connection with a loan or extension of\n credit, when an application for a loan or extension of credit from a\n depository institution is pending, unless a written disclosure is given to the\n customer indicating that the customer’s choice of an insurer will not\n affect the credit decision or credit terms in any way; provided, however, that\n the depository institution may impose reasonable requirements concerning the\n creditworthiness of the insurer and the scope of coverage chosen. Any\n disapproval of an insurer shall be deemed unreasonable if it is not based on\n reasonable standards uniformly applied, relating to the extent of coverage\n required and the financial soundness and the services of an insurer. Such\n standards shall not discriminate against any particular type of insurer, nor\n shall such standards call for disapproval of an insurance policy because the\n policy contains coverage in addition to that required by the creditor. Use of\n the ratings of a nationally recognized rating service shall not be deemed\n unreasonable provided such ratings are based on reasonable standards uniformly\n applied. If an insurer, duly licensed in Virginia, does not possess the\n required rating of a nationally recognized rating service, no person who lends\n money or extends credit shall refuse to accept from the insurer a certificate\n of 100 percent reinsurance issued by another insurer pursuant to §\n 38.2-136, which does possess the required rating;\n\n 10. Sell an insurance policy unless:\n \t\t\t\ta. A clear and conspicuous disclosure is given, in writing, where\n practicable, to the customer prior to the sale stating that such insurance\n policy (i) is not a deposit; (ii) is not insured by the Federal Deposit\n Insurance Corporation or any other federal government agency; (iii) is not\n guaranteed by the depository institution or, if appropriate, its affiliate or\n any person soliciting or selling insurance on its premises; and (iv) where\n appropriate, involves investment risk, including the potential loss of\n principal, and\n \t\t\t\tb. Written acknowledgment of the disclosure is obtained from the customer\n at the time the customer receives the disclosure or at the time of the initial\n purchase of the insurance policy;\n\n 11. Solicit or sell insurance, other than credit insurance or flood insurance,\n unless such solicitation or sale is completed through documents separate from\n any credit transactions;\n\n 12. Include the expense of insurance premiums, other than credit insurance\n premiums, title insurance premiums, or flood insurance premiums, in the\n primary credit transaction without the express written consent of the\n customer; or\n\n 13. Solicit or sell insurance unless (i) its insurance sales activities are,\n to the extent practicable, physically segregated from areas where retail\n deposits are routinely accepted; (ii) it maintains separate and distinct books\n and records relating to such insurance transactions for the three previous\n calendar years; and (iii) it makes all such books and records available to the\n Commission for inspection upon reasonable notice.\n\nB. As used in this section:\n\t\t\t“Affiliate” means any company that controls, is controlled by, or\nis under common control with another company.\n\t\t\t“Credit insurance” means the lines of insurance defined in\n§§ 38.2-103, 38.2-108, 38.2-122.1, and 38.2-122.2.\n\t\t\t“Customer” means an individual who obtains, applies for, or is\nsolicited to obtain insurance.\n\t\t\t“Depository institution” means any bank or savings association.\n\t\t\t“Insurance information” means information concerning the\npremiums, terms, and conditions of insurance coverage, including expiration\ndates and rates, and insurance claims of a customer contained in the records of\na depository institution or its affiliate.\n\nC. Notwithstanding anything to the contrary, the provisions of this section,\nexcept subdivision A. 10., shall also apply to any person who lends money or\nextends credit and who sells or solicits any insurance as classified and defined\nin Article 2 (§ 38.2-101 et seq.) of Chapter 1 of this title in connection\ntherewith. However, this section shall not apply to premium finance companies\nlicensed under Chapter 47 (§ 38.2-4700 et seq.) of this title or agents who\nextend credit as authorized in § 38.2-1806 to the extent that such premium\nfinance companies or agents are not affiliated with a depository institution.\n\nD. If the customer agrees, the written disclosures and acknowledgements required\nby subsection A of this section may be provided electronically. Such disclosures\nshall be provided in a format that the customer may retain and reproduce for\nlater reference. When a purchase of insurance is made by telephone, the\ndisclosures and acknowledgements required by subsection A of this section may be\ngiven orally, provided that (i) such disclosures are mailed or provided in\nelectronic form within three working days after the sale, solicitation, or offer\nof the insurance policy; (ii) documentation is maintained showing that oral\nacknowledgement was given by the customer; and (iii) a reasonable effort is made\nto obtain written acknowledgement from the customer.\n\nE. The Commission shall have the power to examine and investigate the affairs of\nany person to whom this section applies to determine whether that person has\nviolated this section. If a violation of this section is found, the person in\nviolation shall be subject to the same procedures and penalties as are\napplicable to other provisions of this chapter.\n\nF. Except as provided for specifically in subsection A, this section shall not\nprevent or restrict a depository institution or its affiliate from engaging\ndirectly or indirectly, either by itself or in conjunction with an affiliate, or\nany other person, in any activity authorized or permitted under state or federal\nlaw.\n\nHISTORY: 2001, c. 371; 2002, c. 76.","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}}