                                 CODE OF VIRGINIA

ESCROW OF DEPOSITS (§ 59.1-447.1)

A. Any deposit made in connection with the execution of a travel services
agreement shall be held in escrow. All cash deposits shall be held in a separate
bank account labeled and designated solely for that purpose.
			Such escrow account shall be insured by an instrumentality of the federal
government and located in Virginia. All deposits shall be held in escrow until
(i) delivered to the travel club upon expiration of the purchaser&#8217;s
cancellation period, provided the purchaser&#8217;s right of cancellation has
not been exercised, or (ii) delivered to the travel club because of
purchaser&#8217;s default under the travel services agreement or (iii) refunded
to the purchaser. Failure to establish escrow accounts or to make the deposits
as required by this section is prima facie evidence of willful violation of this
section.

B. The travel club shall disclose in the travel services agreement that the
deposit may not be held in escrow after expiration of the cancellation period
and that such deposit is not protected as an escrow after expiration of the
cancellation period. This disclosure shall include a statement of whether or not
the travel club reserves the option to sell or assign any promissory note given
by a purchaser to another entity, whether or not such entity is affiliated with
the travel club. Both disclosures shall appear in boldface type of a minimum
size of ten points.

C. There shall be posted a fidelity bond, written so as to protect all deposits
escrowed pursuant to subsection A, in favor of all purchasers. The bond shall be
in an amount equal to the total of the deposits in escrow at any given time or
$25,000, whichever is greater. Such bond shall be filed with the Commissioner
and shall be maintained for so long as the travel club offers travel services in
Virginia. The bond shall be with a surety company authorized to do business in
Virginia. The travel club may post cash in lieu of the bond.

HISTORY: 1994, c. 482.