                                 CODE OF VIRGINIA

REBATES (§ 38.2-509)

A. Except as otherwise expressly provided by law, no person shall:

   1. Knowingly permit, offer, or make any insurance or annuity contract or
   agreement which is not plainly expressed in the contract issued;

   2. Pay, allow or give, or offer to pay, allow or give, directly or indirectly,
   as inducement to any insurance or annuity contract, any rebate of premium
   payable on the contract, any special favor or advantage in the dividends or
   other benefits on the contract, any valuable consideration or inducement not
   specified in the contract, except in accordance with an applicable rating plan
   authorized for use in this Commonwealth;

   3. Give, sell, purchase, or offer to give, sell or purchase as inducement to
   insurance, or annuity contracts, or in connection with such contracts, any
   stocks, bonds, or other securities of any company, any dividends or profits
   accrued on any stocks, bonds or other securities of any company, or anything
   of value not specified in the contract; or

   4. Receive or accept as inducement to insurance, or annuity contracts, any
   rebate of premium payable on the contract, any special favor or advantage in
   the dividends or other benefit to accrue on the contract, or any valuable
   consideration or inducement not specified in the contract.

B. Nothing in § 38.2-508 or in this section shall be construed to include
within the definition of discrimination or rebates any of the following
practices:

   1. In the case of any life insurance or annuity contract, paying bonuses to
   policyholders or otherwise abating their premiums in whole or in part out of
   surplus accumulated from nonparticipating insurance if the bonuses or
   abatement of premiums are fair and equitable to policyholders and in the best
   interests of the insurer and its policyholders;

   2. In the case of life or accident and sickness insurance policies issued on
   the industrial debit plan, making allowance to policyholders who, for a
   specified period, have continuously made premium payments directly to an
   office of the insurer in an amount that fairly represents the savings in
   collection expense;

   3. Readjustment of the rate of premium for a group insurance policy based on
   the loss or expense experience under the policy, at the end of the first or
   any subsequent policy year of insurance;

   4. In the case of insurers, allowing their bona fide employees to receive a
   reduction on the premiums paid by them on policies or contracts on their own
   lives and property, and on the lives and property of their spouses and
   dependent children;

   5. Issuing life or accident and sickness policies or annuity contracts on a
   salary savings or payroll deduction plan at a reduced rate consistent with the
   savings made by the use of such plan;

   6. Paying commissions or other compensation to duly licensed agents or
   brokers; or

   7. Allowing or returning to participating policyholders, members or
   subscribers, dividends, savings or unabsorbed premium payments.

HISTORY: Code 1950, § 38.1-52; 1952, c. 317, § 38.1-52.8; 1977, c. 529; 1978,
c. 441; 1979, c. 324; 1980, c. 404; 1986, c. 562.