2006 Code of Virginia § 38.2-1318 - Examinations; how conducted

38.2-1318. Examinations; how conducted.

A. Whenever the Commission examines the affairs of any person, as set forthin 38.2-1317, it may appoint as examiners one or more competent persons.

1. To the extent practicable, the examiners shall be regular employees of theCommission.

2. No examiner may be appointed by the Commission if such examiner, eitherdirectly or indirectly, has a conflict of interest or is affiliated with themanagement of or owns a pecuniary interest in any person subject toexamination under this article; however, this section shall not be construedto automatically preclude an examiner from being:

a. A policyholder or claimant under an insurance policy;

b. A grantor of a mortgage or similar instrument on the examiner's residenceto a regulated entity if done under customary terms and in the ordinarycourse of business;

c. An investment owner in shares of regulated diversified investmentcompanies; or

d. A settlor or beneficiary of a "blind trust" into which any otherwiseimpermissible holdings have been placed.

3. Notwithstanding the requirements of this subsection, the Commission mayretain from time to time, on an individual basis, qualified actuaries,certified public accountants, or other similar individuals or firms who areindependently practicing their professions, even though said persons may fromtime to time be similarly employed or retained by persons subject toexamination under this article.

B. The examiners shall be instructed as to the scope of the examination, and,in conducting the examination, the examiner shall observe, to the extentpracticable, those guidelines and procedures set forth in the Examiners'Handbook, or any successor publications, adopted by the NAIC and such otherguidelines or procedures as the Commission may deem appropriate.

C. Every company or person from whom information is sought, its officers,directors, and agents shall provide the examiners convenient access at allreasonable hours to its books, records, files, securities, accounts, papers,documents, and any or all computer or other recordings relating to theproperty, assets, business and affairs of the company being examined or thoseof any person, including any affiliates or subsidiaries of the personexamined, that are relevant to the examination.

1. The officers, directors, employees and agents of the company or personshall facilitate the examination and aid in the examination so far as it isin their power to do so.

2. The refusal of any company, by its officers, directors, employees oragents, to submit to examination or to comply with any reasonable writtenrequest of the examiners shall be grounds for suspension or refusal of, ornonrenewal of, any license or authority held by the company to engage in aninsurance or other business subject to the Commission's jurisdiction. Anysuch proceedings for suspension, revocation or refusal of any license orauthority shall be conducted pursuant to 38.2-1040.

D. For the purpose of any investigation or proceeding under this article, theCommission or any individual designated by it may administer oaths andaffirmations, subpoena witnesses, compel their attendance, take evidence andrequire the production of any books, papers, correspondence, memoranda,agreements or other documents or records which the Commission determines arerelevant to the examination.

E. In connection with any examination, the Commission may retain attorneys,appraisers, independent actuaries, independent certified public accountants,security analysts or other professionals and specialists as examiners; thecost of which shall be borne by the company which is the subject of theexamination.

F. Nothing contained in this article shall be construed to limit theCommission's authority to terminate or suspend any examination in order topursue other legal or regulatory action pursuant to the provisions of thistitle.

G. Nothing contained in this article shall be construed to limit theCommission's authority to use and, if appropriate, to make public any finalor preliminary examination report, any examiner or company workpapers orother documents, or any other information discovered or developed during thecourse of any examination in the furtherance of any legal or regulatoryaction which the Commission may deem appropriate.

H. Whenever the Commission examines the affairs of any person providingbenefits pursuant to Title XIX or Title XXI of the Social Security Act, asamended, as set forth in 38.2-1317, nothing contained in this article shallbe construed to limit the Commission's authority to consult with theDepartment of Medical Assistance Services about such person before taking anyaction as a result of services the person provides pursuant to Title XIX orTitle XXI of the Social Security Act, as amended.

(Code 1950, 38-69, 38-125; 1952, c. 317, 38.1-175; 1986, c. 562; 1992,c. 588; 2006, c. 866.)