2006 Code of Virginia § 38.2-1363 - Penalties and liabilities; grounds for placing on probation, refusal to issue or renew, revocation...

38.2-1363. Penalties and liabilities; grounds for placing on probation,refusal to issue or renew, revocation, or suspension of license.

A. If the Commission finds, after providing an opportunity to be heard, thatany person under its jurisdiction has violated any provision of this article,the Commission may, in addition to any other remedies authorized by thistitle, order the managing general agent to reimburse the insurer, therehabilitator or liquidator, or the receiver of the insurer for any lossesincurred by the insurer caused by a violation of this article committed bythe managing general agent.

B. The Commission may, in addition to or in lieu of a penalty imposed under 38.2-218, place on probation, suspend, revoke or refuse to issue or renew anyperson's license as a managing general agent for any one or more of thefollowing causes:

1. Providing materially incorrect, misleading, incomplete or untrueinformation in the license application or any other document filed with theCommission;

2. Violating any insurance laws or violating any regulation, subpoena, ororder of the Commission or of another state's insurance regulatory authority;

3. Obtaining or attempting to obtain a license through misrepresentation orfraud;

4. Improperly withholding, misappropriating, or converting any moneys orproperties received in the course of doing business;

5. Engaging in the practice of rebating;

6. Engaging in twisting or any form thereof, where "twisting" meansinducing an insured to terminate an existing policy and purchase a new policythrough misrepresentation;

7. Intentionally misrepresenting the terms of an actual or proposed insurancecontract;

8. Having been convicted of a felony;

9. Having admitted or been found to have committed any insurance unfair tradepractice or fraud;

10. Using fraudulent, coercive, or dishonest practices, or demonstratingincompetence, or untrustworthiness in the conduct of business in thisCommonwealth or elsewhere, or demonstrating financial irresponsibility in thehandling of applicant, policyholder, agency, or insurance company funds;

11. Having an insurance producer license, or its equivalent, denied,suspended or revoked in any other state, province, or territory;

12. Forging another's name to an application for insurance or reinsurance, orto any document related to an insurance transaction;

13. Knowingly accepting insurance business from an individual who is notlicensed;

14. Failing to comply with an administrative or court order imposing a childsupport obligation;

15. Failing to pay state income tax or comply with any administrative orcourt order directing payment of state income tax; or

16. If the managing general agent is a business entity, having its corporateexistence terminated, its certificate of organization, trust, limitedliability company, or limited partnership canceled, or its certificate ofauthority or registration to transact business in the Commonwealth revoked orcanceled, as the case may be.

C. If the Commission believes that any applicant for a managing generalagent's license is not of good character or does not have a good reputationfor honesty, it may refuse to issue the license, subject to the right of theapplicant to demand a hearing on the application. The Commission shall notrevoke or suspend an existing license until the licensee is given anopportunity to be heard before the Commission. If the Commission refuses toissue a new license or proposes to revoke or suspend an existing license, itshall give the applicant or licensee at least 10 calendar days' notice inwriting of the time and place of the hearing, if a hearing is requested. Thenotice shall contain a statement of the objections to the issuance of thelicense, or the reason for its proposed revocation or suspension as the casemay be. The notice may be given to the applicant or licensee by registered orcertified mail, sent to the last known address of record pursuant to 38.2-1364, or the last known business address if the address of record isincorrect, or in any other lawful manner the Commission prescribes. TheCommission may summon witnesses to testify with respect to the applicant orlicensee, and the applicant or licensee may introduce evidence in his or itsbehalf. No applicant to whom a license is refused after a hearing, nor anylicensee whose license is revoked, shall again apply for a license untilafter the expiration of a period of five years from the date of theCommission's order, or such other period of time as the Commission prescribesin its order.

D. Nothing contained in this article is intended to or shall in any mannerlimit or restrict the rights of policyholders, claimants, and auditors.

E. If an order of rehabilitation or liquidation of the insurer has beenentered pursuant to Chapter 15 ( 38.2-1500 et seq.) of this title or therehabilitation and liquidation statutes of a reciprocal state, and thereceiver appointed under that order determines that the managing generalagent or any other person has not materially complied with the provisions ofthis article, or any rule, regulation or order promulgated thereunder, andthe insurer suffered any loss or damage therefrom, the receiver may maintaina civil action for recovery of damages or other appropriate sanctions for thebenefit of the insurer.

(2001, c. 706; 2006, c. 762.)