2006 Code of Virginia § 38.2-509 - Rebates

38.2-509. Rebates.

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

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

2. Pay, allow or give, or offer to pay, allow or give, directly orindirectly, as inducement to any insurance or annuity contract, any rebate ofpremium payable on the contract, any special favor or advantage in thedividends or other benefits on the contract, any valuable consideration orinducement not specified in the contract, except in accordance with anapplicable rating plan authorized for use in this Commonwealth;

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

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

B. Nothing in 38.2-508 or in this section shall be construed to includewithin the definition of discrimination or rebates any of the followingpractices:

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

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

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

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

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

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

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

(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.)