                                 CODE OF VIRGINIA

ACTING AS AGENT FOR UNLICENSED INSURER PROHIBITED; PENALTIES (§ 38.2-1802)

A. No person other than a licensed surplus lines broker shall sell, solicit, or
negotiate contracts of insurance in this Commonwealth on behalf of any insurer
which is not licensed to transact the business of insurance in this
Commonwealth. Nothing in this section shall prohibit any person from obtaining
insurance upon his own life or property from an unlicensed insurer.

B. Any person violating the provisions of this section shall be guilty upon
conviction of a Class 1 misdemeanor and punished for each offense. In addition,
any person violating this section shall be (i) liable on any claim against any
unlicensed insurer that arises out of a contract or policy sold, solicited, or
negotiated by the person or which the person assisted in selling, soliciting, or
negotiating, or (ii) punished as provided in &#xA7;&#xA7; 38.2-218 and
38.2-1831, or (iii) subject to both (i) and (ii).

C. Nothing in this section shall apply to the selling, soliciting, or
negotiating of contracts of insurance on:

   1. Vessels or craft, their cargo, freight, marine builder&#8217;s risk,
   maritime protection and indemnity, ship repairer&#8217;s legal liability,
   tower&#8217;s liability or other risks commonly insured under ocean marine
   insurance policies as distinguished from inland marine insurance policies,
   provided that a property and casualty or limited lines property and casualty
   agent licensed in this Commonwealth sells, solicits, or negotiates these
   classes of insurance on behalf of any insurer not licensed to transact the
   business of insurance in this Commonwealth; or

   2. The rolling stock and operating properties of railroads used in interstate
   commerce or of any liability or other risks incidental to their ownership,
   maintenance or operation.

D. A property and casualty or limited lines property and casualty agent licensed
in this Commonwealth who, pursuant to the provisions of subdivision C 1, sells,
solicits, or negotiates ocean marine insurance on behalf of any insurer not
licensed to transact the business of insurance in this Commonwealth shall
provide a notice to the insured stating that the insurance policy is to be
placed with an insurer not licensed to transact the business of insurance in the
Commonwealth and stating that (i) in the event of the insolvency of the insurer,
there is no protection under the Virginia Property and Casualty Insurance
Guaranty Association against financial loss to claimants or policyholders
because of the insolvency of an unlicensed insurer, and (ii) the insured may not
be protected under the insurance laws of this Commonwealth. The notice required
by this subsection shall be in a form prescribed by the Commission and shall be
signed and dated by the agent and the insured. The signatures required by this
subsection may be in electronic form. The agent shall keep a copy of the notice
for at least three years after the effective date of the policy to which the
notice pertains. A copy of the notice shall be given to the insured prior to
placement of the insurance.

HISTORY: Code 1950, § 38.1-281; 1952, c. 317; 1956, c. 173; 1979, c. 513, §
38.1-327.3; 1982, c. 264; 1983, c. 480; 1986, c. 562; 1987, cc. 519, 521; 2001,
c. 706.