                                 CODE OF VIRGINIA

NONSTOCK CORPORATION REQUIRED (§ 38.2-4504)

A. Each plan shall be conducted either by or through (i) a nonstock corporation
organized pursuant to the laws of this Commonwealth or (ii) a foreign nonstock
corporation that is subject to regulation and licensing under the laws of its
domiciliary jurisdiction that are substantially similar to those provided by
this chapter.

B. Notwithstanding the provisions of &#xA7;&#xA7; 38.2-4502 and 38.2-4503, a
nonstock corporation may offer or administer a plan without being required to
act as agent for participating dentists or optometrists.

C. A nonstock corporation applying for its initial license pursuant to this
chapter to offer or administer a plan may elect in its application to act as a
nonagent, in which case the provisions of this section shall apply to such
nonagent.

D. A nonstock corporation operating a plan pursuant to &#xA7; 38.2-4502 or
&#xA7; 38.2-4503 may petition the Commission to change its status from an agent
nonstock corporation to a nonagent nonstock corporation by making application to
the Commission no less than ninety days preceding the proposed date of the
change. The nonstock corporation shall give notice of the petition to its
contract holders and participating dentists or optometrists. The Commission
shall not approve the change of status unless it is satisfied that the financial
condition of the nonstock corporation and the proposed method of operation and
manner of doing business enable the nonstock corporation to meet its contractual
obligations to all subscribers and that the nonstock corporation has otherwise
complied with the requirements of this chapter. The Commission shall (i)
consider, among other things, the sufficiency of the contingency reserve
required under subsection E and (ii) subject the nonstock corporation,
notwithstanding the provisions of &#xA7; 38.2-1700, to the requirements of
Chapter 17 (&#xA7; 38.2-1700 et seq.). If the Commission fails to approve the
change of status, it shall state the reason in its order. A change in status
shall only be effective as to subscription contracts issued or renewed on and
after the date of a change in status.

E. No nonstock corporation shall offer or administer a plan without acting as an
agent for participating dentists or optometrists unless it maintains at all
times a contingency reserve of at least $4 million. The contingency reserve
shall be computed as the Commission requires.

F. The provisions of &#xA7;&#xA7; 38.2-4505, 38.2-4507, 38.2-4508, and 38.2-4512
shall not apply to a nonstock corporation that does not act as agent for
participating dentists or optometrists.

HISTORY: 1980, c. 682, § 38.1-895; 1986, c. 562; 2000, cc. 171, 204; 2013, c.
11.