                                 CODE OF VIRGINIA

POLICY FORMS TO BE FILED WITH COMMISSION; APPROVAL OR DISAPPROVAL BY COMMISSION
(§ 38.2-3725)

A. No form shall be delivered or issued for delivery in this Commonwealth until
a copy of each form has been filed with and approved by the Commission.

B. If a group policy of credit life or credit accident and sickness insurance is
delivered in another state, the insurer shall be required to file the group
certificate, application or enrollment request, and notice of proposed insurance
delivered or issued for delivery in this state for approval. These forms shall
comply with &#xA7; 38.2-3724, with the exception of subsection D and &#xA7;
38.2-3737. The premium rates shall comply with those established in this chapter
or it must be demonstrated to the satisfaction of the Commission that the rates
are actuarially equivalent to those required by &#xA7;&#xA7; 38.2-3726 and
38.2-3727 if the coverage differs from that required in Virginia. In no case
shall the premiums exceed those set by the Commission in &#xA7;&#xA7; 38.2-3726
and 38.2-3727, as amended by &#xA7; 38.2-3730.

C. The Commission shall disapprove or withdraw approval previously given to any
form if the Commission determines that:

   1. It does not comply with the laws of this Commonwealth;

   2. It contains any provision or has any title, heading, backing or other
   indication of the contents of any or all of its provisions which encourage
   misrepresentation or are unjust, unfair, misleading, deceptive or contrary to
   the public policy of this Commonwealth; or

   3. The premium rates or charges are not reasonable in relation to the benefits
   provided.

D. The benefits provided by any credit life insurance form shall be considered
reasonable in relation to the premium charged provided that the rate does not
exceed the current prima facie rate set by the Commission. The prima facie rate
that shall be effective January 1, 1993, shall be that set forth in &#xA7;
38.2-3726. Thereafter, effective January 1, 1995, the Commission shall, on a
triennial basis, set forth adjusted prima facie rates that will achieve a sixty
percent loss ratio. The methodology used by the Commission in setting the prima
facie rates shall be as set forth in &#xA7; 38.2-3730. The prima facie rates
shall be provided to insurers no later than September 1 prior to each triennium
and shall be effective as to all forms issued on or after January 1 of the
following triennium.

E. The benefits provided by any credit accident and sickness insurance form
shall be considered reasonable in relation to the premium charged provided that
the rate does not exceed the current prima facie rates set by the Commission.
The Commission shall set forth adjusted prima facie rates that will achieve a
fifty percent loss ratio as of January 1, 1993, and adjusted prima facie rates
that will achieve a sixty percent loss ratio as of January 1, 1995. Thereafter,
the Commission shall, on a triennial basis, set forth adjusted prima facie rates
that will achieve a sixty percent loss ratio. The methodology used by the
Commission in setting the prima facie rates shall be as set forth in &#xA7;
38.2-3730. The prima facie rates shall be provided to insurers no later than
September 1, 1992, for the rates to be effective January 1, 1993; September 1,
1994, for the rates to be effective January 1, 1995; and September 1 prior to
each triennium thereafter, and shall be effective as to all forms issued on or
after such January 1.

F. If necessary to assure availability of credit insurance, the Commission may
consider other factors in order to provide a fair return to insurers. These
other factors may include, but are not limited to, the following: (i) actual and
expected loss experience; (ii) general and administrative expenses; (iii) loss
settlement and adjustment expenses; (iv) reasonable creditor compensation; (v)
investment income; (vi) the manner in which premiums are charged; (vii) other
acquisition costs, reserves, taxes, regulatory license fees and fund
assessments; and (viii) other relevant data consistent with generally accepted
actuarial standards.

G. The Commission shall, within thirty days after the filing of any form
requiring approval, notify the insurer filing the form of the form&#8217;s
approval or disapproval. If a form is disapproved, the Commission shall also
notify the insurer of its reasons for disapproval. The Commission may extend the
period within which it shall indicate its approval or disapproval of a form by
thirty days. Any form received but not approved or disapproved by the Commission
shall be deemed approved at the expiration of the thirty days, or sixty days if
the period is extended. No insurer shall use a form deemed approved under the
provisions of this section until the insurer has filed with the Commission a
written notice of its intent to use the form together with a copy of the form
and the original transmittal letter thereof. The notice shall be filed in the
offices of the Commission at least ten days prior to the insurer&#8217;s use of
the form.

H. If the Commission proposes to withdraw approval previously given to any form,
it shall notify the insurer in writing not less than thirty days prior to the
proposed effective date of withdrawal and give its reasons for withdrawal. No
insurer shall issue such forms or use them after the effective date of
withdrawal, except as provided in subsection I of this section.

I. Any insurer aggrieved by the disapproval or withdrawal of approval of any
form may proceed as indicated in &#xA7; 38.2-1926.

HISTORY: 1982, c. 223, § 38.1-482.7:1; 1986, c. 562, § 38.2-3710; 1992, c.
586; 1999, c. 586.