dcrodriguez/Code-of-Virginia huggingface dataset:
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4200. Applicability of chapter.
A. Except as otherwise provided by law, no plan shall be organized, conducted or offered in this Commonwealth other than in the manner set forth in this chapter.

B. Nothing contained in this chapter shall prohibit any physician (i) as an individual, (ii) in partnership with other physicians, or (iii) as part of a professional corporation of physicians, from entering into agreements directly with his own patients, or with a parent, guardian, conservator, spouse or other family member acting in a patient's behalf, involving payment for professional services to be rendered or made available in the future.

1979, c. 721, § 38.1-813.1; 1980, c. 682; 1986, c. 562; 1997, c. 801.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4201. Definitions.
As used in this chapter:

"Contract holder" means a person entering into a subscription contract with a nonstock corporation.

"Nonstock corporation" means a foreign or domestic nonstock corporation which is subject to regulation and licensing under this chapter and which offers or administers subscription contracts to contract holders as part of a plan.

"Health services plan" or "plan" means any arrangement for offering or administering health services or similar or related services by a nonstock corporation licensed under this chapter.

"Hospital services plan" means a health services plan for providing hospital and similar or related services.

"Medical or surgical services plan" means a health services plan for providing medical or surgical services or both, and similar or related services.

"Subscriber" means any person entitled to benefits under the terms and conditions of a subscription contract.

"Subscription contract" means a written contract which is issued to a contract holder by a nonstock corporation and which provides health services or benefits for health services on a prepaid basis.

1986, c. 562; 1988, c. 185.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4202. Hospital services plans.
A hospital or a group of hospitals may conduct through a nonstock corporation as agent for them a hospital services plan as defined in § 38.2-4201.

Code 1950, § 32-195.1; 1956, c. 268, § 38.1-810; 1960, c. 357; 1979, c. 721; 1980, c. 682; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4203. Medical or surgical services plans.
A group of physicians may conduct through a nonstock corporation as agent for them a medical or surgical services plan as defined in § 38.2-4201.

Code 1950, § 32-195.2; 1956, c. 268, § 38.1-811; 1960, c. 357; 1979, c. 721; 1980, c. 682; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4204. Merger of nonstock corporations.
A nonstock corporation operating a hospital services plan pursuant to § 38.2-4202 may be combined with a nonstock corporation operating a medical or surgical services plan pursuant to § 38.2-4203. The nonstock corporation created by such combination may be licensed to conduct a combination plan furnishing both hospital services and similar or related services and medical or surgical services, or both, and similar or related services.

1979, c. 721, § 38.1-812; 1980, c. 682; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4205. Dental and optometric services.
Dental services and optometric services may be provided by either subscription contract or endorsement in a plan.

1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4206. Nonstock corporation required.
Each plan shall be conducted either by or through (i) a nonstock corporation organized pursuant to the laws of this Commonwealth or (ii) a foreign nonstock corporation that is subject to regulation and licensing under the laws of its domiciliary jurisdiction that are substantially similar to those provided by this chapter.

This section shall not apply to any foreign nonstock corporation already licensed in this Commonwealth as of July 1, 1980.

1980, c. 682, § 38.1-813.2; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4207. Existing foreign nonstock corporation.
Any foreign nonstock corporation licensed in the Commonwealth as of July 1, 1980, may conduct a plan directly.

1980, c. 682, § 38.1-813.3; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4208. Nonstock corporation not required to act as agent.
A. A nonstock corporation may offer or administer a plan without being required to act as an agent for providers of health care services.

B. A nonstock corporation applying for its initial license pursuant to this chapter in order to offer or administer a plan must elect in its application whether to act (i) as agent for providers of health care services, in which case §§ 38.2-4210 and 38.2-4211 shall apply, or (ii) as a nonagent, in which case the provisions of subsection D of this section shall apply.

C. A nonstock corporation operating a plan pursuant to §§ 38.2-4202, 38.2-4203, 38.2-4204 or this section prior to June 30, 1985, and any successor nonstock corporation shall continue to operate as either an agent or nonagent nonstock corporation, in accordance with the manner in which it was operating as of that date, provided that it may petition the Commission to change its status as an agent or nonagent nonstock corporation, and if it does so, it shall give notice of the petition to all interested parties. The Commission shall conduct a hearing on the petition if requested by any interested party. A nonstock corporation seeking to change its status shall make application to the Commission within ninety days following the end of any calendar year. A change in status shall only be effective as to subscriber contracts issued or renewed on and after the date of a change in status. The Commission shall enter an order in response to the nonstock corporation's petition.

D. If any nonstock corporation offers or administers a plan without acting as an agent for providers of health care services, the Commission may elect to (i) require the nonstock corporation to maintain its contingency reserves above a minimum level set by the Commission, or (ii) subject the nonstock corporation, notwithstanding the provisions of § 38.2-1700, to the requirements of Chapter 17 of this title, or (iii) both. The minimum level for contingency reserves shall not exceed forty-five days of the anticipated operating expenses and incurred claims expense generated from subscription contracts issued by the nonstock corporation, and shall be computed as the Commission requires.

Code 1950, § 32-195.5:1; 1972, c. 429, § 38.1-816; 1974, c. 54; 1979, c. 721; 1980, c. 682; 1982, c. 129; 1983, c. 464, § 38.1-813.4; 1985, c. 233; 1986, c. 562; 1988, c. 185.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4209. Preferred provider subscription contracts.
A. As used in this section, a "preferred provider subscription contract" is a contract that specifies how services are to be covered when rendered by providers participating in a plan, by nonparticipating providers, and by preferred providers.

B. Notwithstanding the provisions of §§ 38.2-4218 and 38.2-4221, any nonstock corporation may, as a feature of its plan, offer preferred provider subscription contracts pursuant to the requirements of this section that limit the numbers and types of providers of health care services eligible for payment as preferred providers.

C. Any such nonstock corporation shall establish terms and conditions that shall be met by a hospital, physician or other type of provider listed in § 38.2-4221 in order to qualify for payment as a preferred provider under the subscription contracts. These terms and conditions shall not discriminate unreasonably against or among health care providers. No hospital, physician or type of provider listed in § 38.2-4221 willing to meet the terms and conditions offered to it or him shall be excluded. Differences in prices among hospitals or other institutional providers produced by a process of individual negotiations with the providers or based on market conditions, or price differences among providers in different geographical areas shall not be deemed unreasonable discrimination. The Commission shall have no jurisdiction to adjudicate controversies growing out of this subsection.

D. Mandated types of providers listed in § 38.2-4221 and types of providers whose services are required to be made available and which have been specifically contracted for by the holder of any subscription contract shall, to the extent required by § 38.2-4221, have the same opportunity as do doctors of medicine to qualify for payment as preferred providers.

E. Preferred provider subscription contracts shall provide for payment for services rendered by nonpreferred providers, but the payments need not be the same as for preferred providers.

F. No contract between a nonstock corporation and a provider shall include provisions which require a health care provider or health care provider group to deny covered services that such provider or group knows to be medically necessary and appropriate that are provided with respect to a specific enrollee or group of enrollees with similar medical conditions.

1983, c. 464, § 38.1-813.4; 1986, c. 562; 1999, cc. 643, 649.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4209.2. Repealed.
Repealed by Acts 1995, c. 467.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4210. Liability of participants.
A. All hospitals, persons, nonstock corporations, and physicians participating in a plan shall be jointly and severally liable on all contracts made for the purposes of the plan by the nonstock corporation as agent for them. Each contract may be executed and signed by their agent on their behalf. A contract so signed shall be binding on the principals and not on the agent.

B. Actions for breach of these contracts may be brought against the principals by naming the agent as the sole defendant. A judgment in favor of the plaintiff may be satisfied out of the assets of the nonstock corporation or out of the assets of each of the principals.

C. Each participant shall be liable for his own torts and not for the torts of any other participant or of the agent.

Code 1950, § 32-195.4; 1956, c. 268, § 38.1-814; 1972, c. 429; 1979, c. 721; 1980, c. 682; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4211. Change of participants.
A. Any participating hospital, person, nonstock corporation or physician may resign from a plan at any time but will continue to be liable on each subscription contract then in effect. However, this liability shall not extend beyond the end of each such subscription contract's current contract year.

B. Hospitals, persons, nonstock corporations and physicians may be admitted to a plan at any time and will then automatically become liable on all its outstanding contracts.

Code 1950, § 32-195.5; 1956, c. 268, § 38.1-815; 1972, c. 429; 1979, c. 721; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4212. Board of directors of nonstock corporation operating plan.
A. Notwithstanding the provisions of §§ 13.1-853, 13.1-854 and 13.1-855, a nonstock corporation operating a plan pursuant to §§ 38.2-4202, 38.2-4203, 38.2-4204, or § 38.2-4208 shall be subject to the following:

1. The board of directors of the nonstock corporation shall consist of no more than fifteen members. However, if two or more nonstock corporations merge, the board of directors of the new or surviving nonstock corporation may consist of no more than twenty members. Further, the board of directors may be increased to a size not exceeding the aggregate number of directors on the merging nonstock corporations' boards for the balance of the year in which merger occurs and for the following five years.

2. Except as permitted by subsection B of this section, a majority of the members of the board of directors of the nonstock corporation shall be persons who are covered by subscription contracts issued by the nonstock corporation and who are not providers of health care services, or employees or salaried officers of the nonstock corporation.

B. Notwithstanding the provisions of §§ 13.1-853, 13.1-854 and 13.1-855, any nonstock corporation operating a plan pursuant to § 38.2-4203 may have a board of directors consisting of a majority of providers of health care services.

C. As used in this section, "providers of health care services" shall include, but not be limited to, physicians, pharmacists, nurses, physical therapists, hospital administrators, employees or majority or controlling stockholders of hospitals, and other persons furnishing health-related services.

D. This section shall not apply to any foreign nonstock corporation licensed in this Commonwealth on or before July 1, 1980.

Code 1950, §§ 32-195.5:1, 32-195.5:2; 1972, c. 429, §§ 38.1-816, 38.1-817; 1974, c. 54; 1979, c. 721; 1980, c. 682; 1982, c. 129; 1985, c. 233; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4213. Liability of participating providers upon merger of nonstock corporation.
If two or more nonstock corporations merge, §§ 38.2-4210 and 38.2-4211 shall not apply to the new or surviving nonstock corporation, its plans or its providers unless the nonstock corporations to be merged notify the Commission in writing at least thirty days prior to the date of the merger that the new or surviving nonstock corporation will remain subject to §§ 38.2-4210 and 38.2-4211. If notice is not given, the Commission may (i) require the new or surviving nonstock corporation to maintain its contingency reserves above minimum level, (ii) subject it, notwithstanding the provisions of § 38.2-1700, to the requirements of Chapter 17 of this title or (iii) both. The minimum level of contingency reserves shall not exceed thirty days of anticipated operating expenses and claims receipts computed as the Commission requires. If the nonstock corporation elects not to file the notice permitted by this section, the nonstock corporation and not its providers shall be liable for the obligations of the plan.

Code 1950, § 32-195.5:1; 1972, c. 429, § 38.1-816; 1974, c. 54; 1979, c. 721; 1980, c. 682; 1982, c. 129; 1985, c. 233; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4214. Application of certain provisions of law.
No provision of this title except this chapter and, insofar as they are not inconsistent with this chapter, §§ 38.2-200, 38.2-203, 38.2-209 through 38.2-213, 38.2-218 through 38.2-225, 38.2-230, 38.2-232, 38.2-305, 38.2-316, 38.2-316.1, 38.2-316.2, 38.2-322, 38.2-325, 38.2-326, 38.2-400, 38.2-402 through 38.2-413, 38.2-500 through 38.2-515, 38.2-600 through 38.2-629, 38.2-700 through 38.2-705, 38.2-900 through 38.2-904, 38.2-1017, 38.2-1018, 38.2-1038, and 38.2-1040 through 38.2-1044, Articles 1 (§ 38.2-1300 et seq.) and 2 (§ 38.2-1306.2 et seq.) of Chapter 13, §§ 38.2-1312, 38.2-1314, 38.2-1315.1, 38.2-1317 through 38.2-1328, 38.2-1334, 38.2-1340, 38.2-1400 through 38.2-1442, 38.2-1446, 38.2-1447, 38.2-1800 through 38.2-1836, 38.2-3400, 38.2-3401, 38.2-3404, 38.2-3405, 38.2-3405.1, 38.2-3406.1, 38.2-3406.2, 38.2-3407.1 through 38.2-3407.6:1, 38.2-3407.9 through 38.2-3407.20, 38.2-3409, 38.2-3411 through 38.2-3419.1, and 38.2-3430.1 through 38.2-3454, Articles 8 (§ 38.2-3461 et seq.) and 9 (§ 38.2-3465 et seq.) of Chapter 34, §§ 38.2-3501 and 38.2-3502, subdivision 13 of § 38.2-3503, subdivision 8 of § 38.2-3504, §§ 38.2-3514.1 and 38.2-3514.2, §§ 38.2-3516 through 38.2-3520 as they apply to Medicare supplement policies, §§ 38.2-3522.1 through 38.2-3523.4, 38.2-3525, 38.2-3540.1, 38.2-3541, 38.2-3541.2, 38.2-3542, and 38.2-3543.2, Article 5 (§ 38.2-3551 et seq.) of Chapter 35, Chapter 35.1 (§ 38.2-3556 et seq.), §§ 38.2-3600 through 38.2-3607 and 38.2-3610, Chapter 52 (§ 38.2-5200 et seq.), Chapter 55 (§ 38.2-5500 et seq.), Chapter 58 (§ 38.2-5800 et seq.), Chapter 65 (§ 38.2-6500 et seq.), and Chapter 66 (§ 38.2-6600 et seq.) shall apply to the operation of a plan.

Code 1950, § 32-195.8; 1956, c. 268, § 38.1-818; 1960, c. 357; 1973, c. 28; 1975, c. 281; 1976, c. 355; 1977, cc. 606, 607; 1978, c. 496; 1979, cc. 47, 97, 721, 726; 1980, cc. 682, 719; 1981, c. 575; 1982, c. 577; 1983, c. 457; 1984, c. 718; 1986, cc. 550, 562; 1987, cc. 565, 655; 1989, cc. 606, 653; 1990, cc. 301, 393, 439, 531, 795, 802, 826; 1991, c. 369; 1992, c. 800; 1993, cc. 158, 306, 307; 1994, cc. 213, 320, 374, 522; 1995, cc. 420, 522; 1996, cc. 550, 776, 967; 1997, cc. 688, 807, 913; 1998, cc. 154, 891, 908; 1999, cc. 643, 649, 709, 739, 856, 857, 923; 2000, cc. 47, 50, 187, 532, 540, 922; 2004, c. 315; 2006, c. 427; 2009, cc. 796, 877; 2010, cc. 504, 583, 734; 2011, cc. 788, 882; 2012, cc. 634, 641; 2013, cc. 670, 679, 751; 2015, cc. 14, 723; 2016, c. 475; 2019, cc. 661, 662, 666, 684; 2020, cc. 219, 264, 916, 917, 1161, 1288; 2021, Sp. Sess. I, c. 480; 2024, cc. 319, 345.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4214.1. Rehabilitation, liquidation, conservation.
Any rehabilitation, liquidation, or conservation of a health services plan shall be deemed to be the rehabilitation, liquidation, or conservation of an insurer and shall be subject to the provisions of Chapter 15 (§ 38.2-1500 et seq.) of Title 38.2.

1990, c. 331.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4215. Payments by nonstock corporation.
No payments shall be made by a nonstock corporation to a person included in a subscription contract unless the payment is for breach of contract or for contractually included costs incurred by that person or for services received by that person and rendered by a nonparticipating hospital or nonparticipating health care provider.

In no case shall that person be denied the right to assign his rights to benefits, except that denial may be made where the benefit is eighty percent of covered charges or greater.

Code 1950, § 32-195.8; 1956, c. 268, § 38.1-818; 1960, c. 357; 1973, c. 28; 1975, c. 281; 1976, c. 355; 1977, cc. 606, 607; 1978, c. 496; 1979, cc. 47, 97, 721, 726; 1980, cc. 682, 719; 1981, c. 575; 1982, c. 577; 1983, c. 457; 1984, c. 718; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4216. Repealed.
Repealed by Acts 1987, cc. 565, 655.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4216.1. Repealed.
Repealed by Acts 2013, cc. 136 and 210, cl. 2, effective January 1, 2014.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4217. Reports.
A. In addition to the annual statement required by § 38.2-1300, the Commission shall require each nonstock corporation to file on a quarterly basis any additional reports, exhibits or statements the Commission considers necessary to furnish full information concerning the condition, solvency, experience, transactions or affairs of the nonstock corporation. The Commission shall establish deadlines for submitting any additional reports, exhibits or statements. The Commission may require verification by any officers of the nonstock corporation the Commission designates.

B. In addition to the annual statement required by § 38.2-1300, the Commission shall require each nonstock corporation to file annually, on or before June 1, an annual statement, signed by two of its principal officers subject to § 38.2-1304, showing:

1. The number of Virginia subscribers by the following type of contract or its equivalent:

a. Individual, open enrollment; and

b. Medicare, extended, under 65 disabled;

2. The subscriber income and benefit payments in the aggregate for the types of contracts listed above subject to specific breakdown by type of contract as requested by the Commission; and

3. Expenditures for providing public services, in addition to open enrollment, to the community.

Code 1950, § 32-195.8:1; 1972, c. 429, § 38.1-819; 1979, c. 721; 1986, c. 562; 1987, cc. 565, 655; 1997, cc. 807, 913; 2014, c. 814.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4218. Subscriber to have free choice of medical practitioners available.
A plan shall be organized and operated to assure that any subscriber shall have free choice of the medical practitioners available and participating in the plan.

Code 1950, § 32-195.8:2; 1972, c. 429, § 38.1-820; 1979, c. 721; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4219. Subscriber to be advised in writing as to benefits and limitations thereon.
A nonstock corporation shall, prior to and during the term of the subscription contract, fully, fairly and currently advise the subscriber in writing of the benefits available under the contract and all limitations on the benefits available under the contract.

Code 1950, § 32-195.8:3; 1972, c. 429, § 38.1-821; 1979, c. 721; 1980, c. 682; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4220. Interplan arrangements.
A nonstock corporation may enter into contracts with similar nonstock corporations for the interchange of services to those included in subscription contracts and may provide in subscription contracts for the substitution of services instead of those recited in its subscription contracts. However, no corporation shall enter into any contract to acquire or to attempt to acquire control, as defined in § 38.2-1322, of any person or enter into any material transaction, as defined in § 38.2-1322, if such contract or transaction would jeopardize or adversely affect the interests of the corporation's subscribers as determined by the Commission.

Code 1950, § 32-195.10; 1956, c. 268, § 38.1-823; 1979, c. 721; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4222. Licensing of nonstock corporations.
A. No person shall deliver or issue for delivery in this Commonwealth a subscription contract without a license issued by the Commission. Each nonstock corporation shall apply for a license and furnish any relevant information the Commission requires. Each license shall expire at midnight on the following June 30. Application for a license shall be accompanied by a nonrefundable application fee of $500.

B. The Commission may refuse to issue or renew a license to a nonstock corporation if it is not satisfied that the financial condition, the method of operation, and the manner of doing business of the nonstock corporation enable it to meet its contractual obligations to all subscribers and that the nonstock corporation has otherwise complied with all the requirements of law.

Code 1950, § 32-195.11; 1956, c. 268, § 38.1-825; 1978, c. 4; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1987, cc. 565, 655; 1988, c. 185; 1994, c. 503.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4223. Renewal of license.
A. Each nonstock corporation shall renew its license with the Commission annually by July 1. The renewal license shall not be issued unless the nonstock corporation has complied with all requirements of law.

B. The Commission shall not fail or refuse to renew the license of any nonstock corporation without first giving the nonstock corporation ten days' notice of its intention not to renew the license and giving the nonstock corporation an opportunity to be heard and introduce evidence in its behalf. Any such hearing may be informal, and the required notice may be waived by the Commission and the nonstock corporation.

Code 1950, § 32-195.12; 1956, c. 268, § 38.1-826; 1978, c. 4; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1987, cc. 565, 655.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4224. Licensing of agents.
Subscription contracts may be solicited only through life and health insurance agents licensed in accordance with Chapter 18 of this title. Home office salaried officers whose principal duties and responsibilities do not include the negotiation or solicitation of subscription contracts shall not be required to be licensed.

Code 1950, § 32-195.13; 1956, c. 268, § 38.1-827; 1978, c. 4; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1999, c. 86.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4225. Repealed.
Repealed by Acts 1987, cc. 565, 655.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4226. Taxation.
Except as provided by Chapter 4 of this title, the license tax paid by a nonstock corporation under Chapter 25 of Title 58.1 shall be in lieu of all other state and local license fees or license taxes and state income taxes of the nonstock corporation.

Code 1950, § 32-195.15; 1956, c. 268, § 38.1-828; 1969, Ex. Sess., c. 26; 1979, c. 721; 1980, c. 682; 1986, c. 562; 1987, cc. 565, 655.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4227. Misleading applications or contracts.
In the operation of a plan, no person shall use any misleading subscription applications or contracts.

Code 1950, § 32-195.16; 1956, c. 268, § 38.1-829; 1960, c. 357; 1979, c. 721; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4228. Controversies involving subscription contracts.
The Commission shall have no jurisdiction to adjudicate controversies growing out of subscription contracts. A breach of contract shall not be deemed a violation of this chapter.

Code 1950, § 32-195.20; 1956, c. 268, § 38.1-833; 1979, c. 721; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4229. Reinsurance.
Any nonstock corporation licensed under this chapter may by policy, treaty or other agreement cede to any insurer reinsurance upon the whole or any part of any risk, with or without contingent liability or participation, and if a mutual insurer, with or without membership therein.

1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4229.1. Conversion to domestic mutual insurer.
A. Any domestic nonstock corporation subject to the provisions of this chapter that has the surplus required by § 38.2-1030 for domestic mutual insurers issuing policies without contingent liability may, at its option and without reincorporation, convert to a domestic mutual insurer by following the procedure set forth in this section.

B. Any nonstock corporation eligible to convert to a domestic mutual insurer under subsection A may effect such conversion by amending its articles of incorporation to delete any reference to this chapter and to comply with the provisions of § 38.2-1002 relating to the articles of incorporation of a domestic mutual insurer. Upon the issuance of a certificate of amendment by the Commission, the conversion shall be effective, such nonstock corporation shall become subject to all of the provisions of this title relating to domestic mutual insurers, and such nonstock corporation shall no longer be subject to the provisions of this chapter.

C. If any nonstock corporation converts from a health services plan organized under this chapter to a domestic mutual insurer, then at least 90 days prior to the effective date of conversion, the nonstock corporation shall comply with § 38.2-316 by filing with the Commission copies of all policies of insurance that it proposes to issue after the effective date of conversion. All subscription contracts issued and outstanding as of the effective date of conversion shall remain in force in accordance with their terms until the expiration or termination of such contracts.

D. No policy of accident and sickness insurance issued by a nonstock corporation after its conversion to a domestic mutual insurer shall deny the policyholder the right to assign his benefit, except that denial may be made where the benefit is 80 percent of covered charges or greater.

1991, c. 87; 1992, c. 473; 1994, c. 294; 1997, cc. 807, 913; 2013, cc. 136, 210.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4229.2. Hearings and investigations on effect of other state's law.
A. If another state enacts a law or takes any other regulatory action that requires a health services plan operating in the Commonwealth to provide a program or benefits for the residents of the other state or to distribute or reduce its surplus on grounds that it is excessive in whole or in part, the Commission shall conduct a proceeding to review and evaluate the impact of the law or action on the health services plan. The Commission shall direct the Commissioner to conduct an examination of the health service plan in accordance with Article 4 (§ 38.2-1317 et seq.) of Chapter 13 and report its findings to the Commission, including the impact on (i) surplus; (ii) premium rates for residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state; and (iii) solvency.

B. Based on the findings of the Commissioner, the Commission shall determine whether the impact on the health services plan is harmful to the interests of residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state.

C. If the Commission determines the program or benefits for the residents of another state or the surplus distribution or reduction has an impact on the health services plan that is harmful to the interests of residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state, the Commission shall issue an appropriate order to protect such residents of the Commonwealth. The order may include:

1. A prohibition on the health services plan subsidizing the program or benefits for the residents of another state through:

a. Premiums charged or otherwise allocable to residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state; or

b. The use of any earned surplus attributable to residents of the Commonwealth covered by policies issued or delivered either in the Commonwealth or in any other state;

2. A prohibition on the health services plan's distributing or reducing its surplus for the benefit of residents of another state; or

3. Any other action the Commission finds necessary to protect the interests of the residents of the Commonwealth.

The determination of premiums charged or otherwise allocable to residents of the Commonwealth and the determination of surplus attributable to residents of the Commonwealth in each case covered by policies issued or delivered either in the Commonwealth or in any other state shall be based upon the number of residents in the Commonwealth compared with the number of residents in other states covered by the policies of the health services plan.

D. No health services plan shall distribute or reduce its surplus pursuant to a law or regulatory action the impact of which is subject to a proceeding under subsection A except with the approval of the Commission after the examination required by this section.

2010, c. 704; 2015, cc. 519, 520.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4230. Definitions.
As used in this article:

"Affiliate" of a specific person or a person "affiliated" with a specific person means a person that directly or indirectly, through one or more intermediaries, controls, is controlled by or is under common control with the person specified.

"Control," including the terms "controlling," "controlled by" and "under common control with," means direct or indirect possession of the power to direct or cause the direction of the management and policies of a person through (i) the ownership of voting securities, (ii) by contract other than a commercial contract for goods or nonmanagement services, or (iii) otherwise, unless the power is the result of an official position with or corporate office held by the person. Control shall be presumed to exist if any person directly or indirectly owns, controls, holds with the power to vote, or holds proxies representing collectively ten percent or more of the voting securities of any other person. This presumption may be rebutted by a showing made in the manner provided by subsection H of § 38.2-4231 that control does not exist. After giving all interested persons notice and opportunity to be heard and making specific findings to support its determination, the Commission may determine that control exists, notwithstanding the absence of a presumption to that effect.

"Holding company system" means two or more affiliated persons, one or more of which is a nonstock corporation licensed under this chapter.

"Surplus" means the excess of total admitted assets over the liabilities of a nonstock corporation licensed under this chapter, and shall include any contingency reserves maintained pursuant to § 38.2-4208 and any voluntary reserves.

"Transaction" means any (i) sale, purchase, exchange, renting or leasing arrangement, loan or extension of credit, arrangement for the assumption, extension or renewal of any obligation or liability, guaranty or surety arrangement, or investment; (ii) dividend or distribution of cash or property; (iii) reinsurance treaty or risk-sharing arrangement; (iv) management contract, service contract or cost-sharing arrangement; or (v) other arrangement, relationship or dealings that the Commission by order, rule or regulation determines to be a transaction contemplated by this article. A transaction shall not include any transaction which the Commission by rule or regulation exempts as not being material for the purpose of §§ 38.2-4231 and 38.2-4233. Any series of transactions occurring within a twelve-month period that are sufficiently similar in nature as to be reasonably construed as a single transaction and that in the aggregate exceed any minimum set forth in §§ 38.2-4231 and 38.2-4233 shall be deemed a transaction subject to the provisions of such sections.

"Voting security" means any security that enables the owner to vote for the election of directors. Voting security includes any security convertible into or evidencing a right to acquire a voting security.

1989, c. 606; 1992, c. 588.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4232. Standards for transactions with affiliates; adequacy of surplus; dividends and other distributions.
A. Transactions by nonstock corporations licensed under this chapter with their affiliates shall be subject to the following standards:

1. The terms shall be fair and reasonable;

2. Charges and fees for service performed shall be reasonable;

3. Expenses incurred and payments received shall be allocated to the insurer in conformity with customary insurance accounting practices consistently applied;

4. The books, accounts, and records of each party shall disclose clearly and accurately the precise nature and details of the transactions;

5. The nonstock corporation's surplus following any transaction with affiliates involving more than one-sixth of one percent of admitted assets or one percent of surplus as of the immediately preceding December 31, whichever is less, shall be reasonable in relation to the nonstock corporation's outstanding liabilities and adequate to its financial needs; and

6. The transaction is in the best interest of the subscribers.

B. For purposes of this article, in determining whether a nonstock corporation's surplus is reasonable in relation to the nonstock corporation's outstanding liabilities and adequate to its financial needs, the following factors, among others, shall be considered:

1. The size of the nonstock corporation as measured by its assets, surplus, reserves, business in force, and other appropriate criteria;

2. The nonstock corporation's method of operation and manner of doing business;

3. The nature and extent of the nonstock corporation's risk-sharing arrangements;

4. The quality, diversification, and liquidity of the nonstock corporation's investment portfolio;

5. The recent past and projected future trend in the size of the nonstock corporation's surplus;

6. The adequacy of the nonstock corporation's reserves; and

7. The quality and liquidity of investments in subsidiaries. The Commission in its judgment may classify any investment as a nonadmitted asset for the purpose of determining the adequacy of surplus.

1989, c. 606; 1992, c. 588.
Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4234. Examinations.
A. In addition to the powers the Commission has under Article 4 of Chapter 13 (§ 38.2-1317 et seq.) of this title, the Commission shall also have the power to order any nonstock corporation registered under § 38.2-4231 to produce any records, books, or other information papers in the possession of the nonstock corporation or its affiliates necessary to determine the financial condition or legality of conduct of the nonstock corporation. If the nonstock corporation fails to comply with the order, the Commission shall have the power to examine its affiliates to obtain the information.

B. The Commission shall exercise its power under subsection A of this section only if the examination of the nonstock corporation under Article 4 of Chapter 13 (§ 38.2-1317 et seq.) of this title is inadequate or the interests of the subscribers of the nonstock corporation may be adversely affected.

C. The Commission may retain at the expense of the registered nonstock corporation any attorneys, actuaries, accountants and other experts reasonably necessary to assist in the conduct of the examination under subsection A of this section. Any persons so retained shall be under the direction and control of the Commission and shall act in a purely advisory capacity.

D. Each nonstock corporation producing books and papers for examination records pursuant to subsection A of this section shall be liable for and shall pay the expense of the examination in accordance with the provisions of Article 4 of Chapter 13 (§ 38.2-1317 et seq.) of this title.

1989, c. 606; 1992, c. 588.

Code of Virginia — Title 38.2 (Insurance), Chapter 42 (Health Services Plans)
§ 38.2-4235. Confidential treatment of information and documents.
All information, documents and copies obtained by or disclosed to the Commission or any other person in the course of an examination or investigation made pursuant to § 38.2-4234, and all information reported pursuant to § 38.2-4231, shall be confidential, shall not be subject to subpoena, and shall not be made public by the Commission or any other person without the prior written consent of the nonstock corporation to which they pertain. However, this provision shall not apply to information disclosed to (i) a regulatory official of any state or country; (ii) the National Association of Insurance Commissioners, its affiliate or its subsidiary; or (iii) a law-enforcement authority of any state or country. Any such disclosure by the Commission shall not constitute a waiver of confidentiality of such information. After the licensed nonstock corporation and its affiliates have been given notice and opportunity to be heard, the Commission may publish all or any part of the information and materials referred to in this section in any manner it considers appropriate, if it determines that the interests of subscribers or the public will be served by the publication.

1989, c. 606; 2001, c. 519.
Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4304. Governing body.
A. The governing body of any health maintenance organization may include providers of health care services, other individuals, or both, but in no event shall any class of health care provider be excluded from eligibility for membership on the governing body of any health maintenance organization.

B. The governing body shall establish a mechanism to provide the enrollees with an opportunity to participate in matters of policy and operation through (i) the establishment of advisory panels, (ii) the use of advisory referenda on major policy decisions, or (iii) the use of other mechanisms.

1980, c. 720, § 38.1-867; 1985, c. 588; 1986, c. 562.

Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4305. Fiduciary responsibilities.
Any director, officer or partner of a health maintenance organization who receives, collects, disburses, or invests funds in connection with the activities of the organization shall be responsible for the funds in a fiduciary relationship with the subscribers and enrollees.

1980, c. 720, § 38.1-868; 1986, c. 562.
Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4306.1. Interest on claim proceeds.
A. If an action to recover the claim proceeds due under a health care plan results in a judgment against a health maintenance organization, interest on the judgment at the legal rate of interest shall be paid from the date of presentation to the health maintenance organization of proof of loss to the date judgment is entered.

B. If no action is brought, interest upon the claim proceeds paid to the subscriber, claimant, or assignee entitled thereto shall be computed daily at the legal rate of interest from the date of thirty calendar days from the health maintenance organization's receipt of proof of loss to the date of claim payment.

C. This section shall not apply to individual contracts issued prior to July 1, 1990, but shall apply to any renewals or reissues of group contracts occurring after that date.

D. This section shall not apply to claims for which payment has been or will be made directly to health care providers pursuant to a negotiated reimbursement arrangement requiring uniform or periodic interim payments to be applied against the health maintenance organization's obligation on such claims.

E. For purposes of this section, "proof of loss" means all necessary documentation reasonably required by the health maintenance organization to make a determination of benefit coverage.

1992, c. 23; 1996, c. 75.
Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4307.1. Additional reports.
A. In addition to the annual statement, the Commission may require a licensed health maintenance organization to file additional reports, exhibits or statements considered necessary to secure complete information concerning the condition, solvency, experience, transactions or affairs of the health maintenance organization. The Commission shall establish reasonable deadlines for filing these additional reports, exhibits, or statements and may require verification by any officers of the health maintenance organization designated by the Commission.

B. The Commission may require a licensed health maintenance organization to file with the National Association of Insurance Commissioners (NAIC) a copy of its financial statement required to be filed pursuant to § 38.2-4307, on a quarterly basis. Unless otherwise prescribed by the Commission, all such financial statements, whether filed with the Commission or the NAIC, shall be prepared in accordance with applicable provisions of the annual statement instructions and the accounting practices and procedures manual adopted by the NAIC, or any successor publications. The Commission may prescribe that additional copies of financial statements and other reports be filed in machine-readable format.

C. Each annual and quarterly statement shall be accompanied by a statement of covered and uncovered expenses. The statement shall be prepared in accordance with instructions prescribed by the Commission for reporting the expenses of the health maintenance organization during the three months comprising the most recently ended calendar-year quarter. The statement of covered and uncovered expenses shall not be required for any health maintenance organization that reports a capital and surplus amount of at least $4,500,000 on its most recent annual or quarterly financial statement filed with the Commission.

1990, c. 224; 1999, c. 482; 2000, c. 503; 2006, c. 448.

Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4308. Repealed.
Repealed by Acts 1998, c. 891.

Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4309. Investments.
A health maintenance organization may invest in any Category 1 investment as defined in Chapter 14 of this title or any other investment the Commission may permit pursuant to provisions in Chapter 14 (§ 38.2-1400 et seq.) of this title. For investments made prior to July 1, 1998, by a health maintenance organization which is licensed on and after June 30, 1998, July 1, 1998 may be deemed the date of investment.

1980, c. 720, § 38.1-873; 1986, c. 562; 1998, c. 42.
Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4310. Protection against insolvency.
Each health maintenance organization shall deposit and maintain acceptable securities with the State Treasurer in amounts prescribed by § 38.2-4310.1. The deposit shall be held as a special fund in trust, as a guarantee that the obligations to the enrollees who are residents of this Commonwealth will be performed. The securities shall be deposited pursuant to a system of book-entry evidencing ownership interests of the securities with transfers of ownership interests effected on the records of a depository and its participants pursuant to rules and procedures established by the depository. Upon a determination of insolvency or action by the Commission pursuant to Chapter 15 (§ 38.2-1500 et seq.), the deposit shall be an asset subject to the provisions of Chapter 15 and shall be used to protect the interests of the health maintenance organization's enrollees and to assure continuation of covered services to enrollees. A health maintenance organization shall be subject to the provisions of Chapter 17 (§ 38.2-1700 et seq.).

1980, c. 720, § 38.1-874; 1986, c. 562; 1989, c. 216; 1990, c. 224; 1992, cc. 14, 20; 2000, c. 503; 2014, c. 814; 2018, c. 706; 2021, Sp. Sess. I, c. 158.

Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4310.1. Deposits.
A. A health maintenance organization shall make its initial deposit prior to licensure in an amount not less than $300,000. The Commission shall review a health maintenance organization's deposit requirement at least once each year and may require an additional deposit in an amount equal to the greater of (i) the sum of all uncovered expenses for the most recent three months reported in accordance with § 38.2-4307.1 B or (ii) the value of liabilities representing uncovered health care expenses.

B. The Commission may reduce or waive, and also may direct the State Treasurer to return, any or all of a deposit requirement whenever the Commission, in its discretion, is satisfied that the assets of the health maintenance organization or its contracts with insurers, health services plans, governments, or other organizations are sufficient to assure the performance of its obligations to enrollees.

C. A health maintenance organization that has experienced an operating profit for the two most recent years may request that its deposit requirement be reduced. "Operating profit" shall be determined by reference to the annual statements filed by the health maintenance organization and shall mean the excess of total revenue, excluding net investment income, over total expenses.

2000, c. 503.

Code of Virginia — Title 38.2 (Insurance), Chapter 43 (HEALTH MAINTENANCE ORGANIZATIONS)
§ 38.2-4311. Repealed.
Repealed by Acts 1998, c. 891.