                                 CODE OF VIRGINIA

PENALTIES AND LIABILITIES; GROUNDS FOR PLACING ON PROBATION, REFUSAL TO ISSUE OR
RENEW, REVOCATION, OR SUSPENSION OF LICENSE (§ 38.2-1363)

A. If the Commission finds, after providing an opportunity to be heard, that any
person under its jurisdiction has violated any provision of this article, the
Commission may, in addition to any other remedies authorized by this title,
order the managing general agent to reimburse the insurer, the rehabilitator or
liquidator, or the receiver of the insurer for any losses incurred by the
insurer caused by a violation of this article committed by the managing general
agent.

B. The Commission may, in addition to or in lieu of a penalty imposed under §
38.2-218, place on probation, suspend, revoke or refuse to issue or renew any
person&#8217;s license as a managing general agent 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 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. Engaging in the practice of rebating;

   6. Engaging in twisting or any form thereof, where &#8220;twisting&#8221;
   means inducing an insured to terminate an existing policy and purchase a new
   policy through misrepresentation;

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

   8. Having been convicted of a felony;

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

   10. 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;

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

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

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

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

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

   16. If the managing general agent 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 a managing general
agent&#8217;s license 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;
38.2-1364, 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 after
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, and auditors.

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 managing general agent 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.