                                 CODE OF VIRGINIA

PENALTIES AND LIABILITIES; GROUNDS FOR PLACING ON PROBATION, REFUSAL TO ISSUE OR
RENEW, REVOCATION, OR SUSPENSION OF LICENSE (§ 38.2-1356)

A. If the Commission finds, after providing an opportunity to be heard, that any
person has violated any provisions of this article, the Commission may, in
addition to any other remedies authorized by this title, order the reinsurance
intermediary to make restitution to the insurer, reinsurer, rehabilitator or
liquidator or receiver of the insurer or reinsurer for the net losses incurred
by the insurer or reinsurer attributable to such violation.

B. The Commission may, in addition to or in lieu of a penalty under § 38.2-218,
place on probation, suspend, revoke, or refuse to issue or renew a reinsurance
intermediary&#8217;s license for any one or more of the following causes:

   1. Providing materially incorrect, misleading, incomplete, or untrue
   information in the license application or any other document filed with the
   Commission;

   2. Violating any insurance or reinsurance laws or violating any regulation,
   subpoena or order of the Commission or of another state&#8217;s insurance
   regulatory authority;

   3. Obtaining or attempting to obtain a license through misrepresentation or
   fraud;

   4. Improperly withholding, misappropriating or converting any moneys or
   properties received in the course of doing business;

   5. Intentionally misrepresenting the terms of an actual or proposed insurance
   or reinsurance contract;

   6. Having been convicted of a felony;

   7. Having admitted or been found to have committed any insurance unfair trade
   practice or fraud;

   8. Using fraudulent, coercive, or dishonest practices, or demonstrating
   incompetence, or untrustworthiness in the conduct of business in this
   Commonwealth or elsewhere, or demonstrating financial irresponsibility in the
   handling of applicant, policyholder, agency, or insurance company funds;

   9. Having an insurance producer license, or its equivalent, denied, suspended
   or revoked in any other state, province, or territory;

   10. Forging another&#8217;s name to an application for insurance or
   reinsurance, or to any document related to an insurance or reinsurance
   transaction;

   11. Knowingly accepting insurance business from an individual who is not
   licensed;

   12. Failing to comply with an administrative or court order imposing a child
   support obligation;

   13. Failing to pay state income tax or comply with any administrative or court
   order directing payment of state income tax; or

   14. If the reinsurance intermediary is a business entity, having its corporate
   existence terminated, its certificate of organization, trust, limited
   liability company, or limited partnership canceled, or its certificate of
   authority or registration to transact business in the Commonwealth revoked or
   canceled, as the case may be.

C. If the Commission believes that any applicant for licensing pursuant to this
article is not of good character or does not have a good reputation for honesty,
it may refuse to issue the license, subject to the right of the applicant to
demand a hearing on the application. The Commission shall not revoke or suspend
an existing license until the licensee is given an opportunity to be heard
before the Commission. If the Commission refuses to issue a new license or
proposes to revoke or suspend an existing license, it shall give the applicant
or licensee at least 10 calendar days&#8217; notice in writing of the time and
place of the hearing, if a hearing is requested. The notice shall contain a
statement of the objections to the issuance of the license, or the reason for
its proposed revocation or suspension as the case may be. The notice may be
given to the applicant or licensee by registered or certified mail, sent to the
last known address of record pursuant to &#xA7; 38.2-1357, or the last known
business address if the address of record is incorrect, or in any other lawful
manner the Commission prescribes. The Commission may summon witnesses to testify
with respect to the applicant or licensee, and the applicant or licensee may
introduce evidence in his or its behalf. No applicant to whom a license is
refused after a hearing, nor any licensee whose license is revoked, shall again
apply for a license until the expiration of a period of five years from the date
of the Commission&#8217;s order, or such other period of time as the Commission
prescribes in its order.

D. Nothing contained in this article is intended to or shall in any manner limit
or restrict the rights of policyholders, claimants, creditors or other third
parties or confer any rights to such persons.

E. If an order of rehabilitation or liquidation of the insurer has been entered
pursuant to Chapter 15 (&#xA7; 38.2-1500 et seq.) of this title or the
rehabilitation and liquidation statutes of a reciprocal state, and the receiver
appointed under that order determines that the reinsurance intermediary or any
other person has not materially complied with the provisions of this article, or
any rule, regulation or order promulgated thereunder, and the insurer suffered
any loss or damage therefrom, the receiver may maintain a civil action for
recovery of damages or other appropriate sanctions for the benefit of the
insurer.

HISTORY: 2001, c. 706; 2006, c. 762.