Titles of Regulations: 14VAC5-45. Rules Governing Suitability in Annuity Transactions (amending 14VAC5-45-40).

14VAC5-71. Rules Governing Viatical Settlement Providers and Viatical Settlement Brokers (amending 14VAC5-71-31).

14VAC5-80. Rules Governing Variable Life Insurance (amending 14VAC5-80-60).

14VAC5-190. Rules Governing the Reporting of Cost and Utilization Data Relating to Mandated Benefits and Mandated Providers (amending 14VAC5-190-50).

14VAC5-321. Use of the 2001 CSO Mortality Table in Determining Reserve Liabilities and Nonforfeiture Benefits (amending 14VAC5-321-20).

14VAC5-322. Use of the 2001 CSO Preferred Class Structure Mortality Table in Determining Reserve Liabilities (amending 14VAC5-322-20).

14VAC5-390. Rules Governing Insurance Premium Finance Companies (amending 14VAC5-390-70).

Statutory Authority: §§ 12.1-13 and 38.2-223 of the Code of Virginia.

Effective Date: October 12, 2020.

Agency Contact: Katie Johnson, Insurance Policy Advisor, Bureau of Insurance, State Corporation Commission, P.O. Box 1157, Richmond, VA 23218, telephone (804) 371-9688, FAX (804) 371-9873, or email katie.johnson@scc.virginia.gov.

Summary:

The amendments update (i) obsolete links to forms and websites, (ii) citations to the Code of Virginia due to the recodification of Title 55 to Title 55.1, and (iii) citations to a repealed Virginia Administrative Code (VAC) chapter to the current VAC chapter.

14VAC5-45-40. Duties of insurers and agents.

A. In recommending to a consumer the purchase of an annuity or the exchange of an annuity that results in another insurance transaction or series of insurance transactions, the agent, or the insurer where no agent is involved, shall have reasonable grounds for believing that the recommendation is suitable for the consumer on the basis of the facts disclosed by the consumer as to his investments and other insurance products and as to his financial situation and needs, including the consumer's suitability information, and that there is a reasonable basis to believe all of the following:

1. The consumer has been reasonably informed of various features of the annuity, such as the potential surrender period and surrender charge; potential tax penalty if the consumer sells, exchanges, surrenders or annuitizes the annuity; mortality and expense fees; investment advisory fees; potential charges for and features of riders; limitations on interest returns; insurance and investment components; and market risk;

2. The consumer would benefit from certain features of the annuity, such as tax deferred growth, annuitization, or death or living benefit;

3. The particular annuity as a whole, the underlying subaccounts to which funds are allocated at the time of purchase or exchange of the annuity, and riders and similar product enhancements, if any, are suitable (and in the case of an exchange or replacement, the transaction as a whole is suitable) for the particular consumer based on the consumer's suitability information; and

4. In the case of an exchange or replacement of an annuity, the exchange or replacement is suitable, including taking into consideration whether:

a. The consumer will incur a surrender charge, be subject to the commencement of a new surrender period, lose existing benefits (such as death, living, or other contractual benefits), or be subject to increased fees, investment advisory fees, or charges for riders and similar product enhancements;

b. The consumer would benefit from product enhancements and improvements; and

c. The consumer has had another annuity exchange or replacement, and, in particular, an exchange or replacement within the preceding 36 months.

B. Prior to the execution of a purchase, exchange, or replacement of an annuity resulting from a recommendation, an agent, or insurer where no agent is involved, shall make reasonable efforts to obtain the consumer's suitability information.

C. Except as permitted under subsection D of this section, an insurer shall not issue an annuity recommended to a consumer unless there is a reasonable basis to believe the annuity is suitable based on the consumer's suitability information.

D. 1. Except as provided in subdivision 2 of this subsection, neither an agent, nor an insurer where no agent is involved, shall have any obligation to a consumer under subsection A or C of this section related to any annuity transaction if:

a. No recommendation is made;

b. A recommendation was made and was later found to have been prepared based on materially inaccurate information provided by the consumer;

c. A consumer refuses to provide relevant suitability information requested by the insurer or agent and the annuity transaction is not recommended;

d. A consumer decides to enter into an annuity transaction that is not based on a recommendation of the insurer or agent; or

e. A consumer fails to provide complete or accurate information.

2. An insurer or agent's recommendation subject to subdivision 1 of this subsection shall be reasonable under all the circumstances actually known to the insurer or agent at the time of the recommendation.

E. An agent, or where no agent is involved the responsible insurer representative, shall at the time of sale:

1. Make a record of any recommendation subject to subsection A of this section;

2. Obtain a customer signed statement, documenting a customer's refusal to provide suitability information, if any; and

3. Obtain a customer signed statement acknowledging that an annuity transaction is not recommended if a customer decides to enter into an annuity transaction that is not based on the agent's or insurer's recommendation.

F. 1. An insurer either shall assure that a system to supervise recommendations that is reasonably designed to achieve compliance with this chapter is established and maintained by complying with subdivisions 3 and 4 of this subsection or shall establish and maintain such a system, including the following:

a. The insurer shall maintain reasonable procedures to inform its agents of the requirements of this chapter and shall incorporate the requirements of this chapter into relevant agent training manuals;

b. The insurer shall establish standards for agent product training and shall maintain reasonable procedures to require its agents to comply with the requirements of 14VAC5-45-45;

c. The insurer shall provide product-specific training and training materials that explain all material features of its annuity products to its agents;

d. The insurer shall maintain procedures for review of each recommendation prior to issuance of an annuity that are designed to ensure that there is a reasonable basis to determine that a recommendation is suitable. Such review procedures may apply a screening system for the purpose of identifying selected transactions for additional review and may be accomplished electronically or through other means including physical review. Such an electronic or other system may be designed to require additional review only of those transactions identified for additional review by the selection criteria;

e. The insurer shall maintain reasonable procedures to detect recommendations that are not suitable. This may include confirmation of consumer suitability information, systematic customer surveys, interviews, confirmation letters, and programs of internal monitoring. Nothing in this subdivision prevents an insurer from complying with this subdivision by applying sampling procedures, or by confirming suitability information after issuance or delivery of the annuity; and

f. The insurer shall annually provide a report to senior management, including to the senior manager responsible for audit functions, which details a review, with appropriate testing, reasonably designed to determine the effectiveness of the supervision system, the exceptions found, and corrective action taken or recommended, if any.

2. An agent and independent agency either shall adopt a system established by an insurer to supervise recommendations of its agents that is reasonably designed to achieve compliance with this chapter or shall establish and maintain such a system, including, but not limited to:

a. Maintaining written procedures; and

b. Conducting periodic reviews of records that are reasonably designed to assist in detecting and preventing violations of this chapter.

3. An insurer may contract with a third party, including an agent or independent agency, to establish and maintain a system of supervision as required by subdivision 1 of this subsection with respect to agents under contract with or employed by the third party.

4. An insurer shall make reasonable inquiry to assure that the third party contracting under subdivision 3 of this subsection is performing the functions required under subdivision 1 of this subsection and shall take action that is reasonable under the circumstances to enforce the contractual obligation to perform the functions. An insurer may comply with its obligation to make reasonable inquiry by doing all of the following:

a. The insurer annually obtains a certification from a third party senior manager who has responsibility for the delegated functions that the manager has a reasonable basis to represent, and does represent, that the third party is performing the required functions; and

b. The insurer, based on reasonable selection criteria, periodically selects third parties contracting under subdivision 3 of this subsection for a review to determine whether the third parties are performing the required functions. The insurer shall perform those procedures to conduct the review that are reasonable under the circumstances.

5. An insurer that contracts with a third party pursuant to subdivision 3 of this subsection and that complies with the requirements to supervise in subdivision 4 of this subsection shall have fulfilled its responsibilities under subdivision 1 of this subsection.

6. An insurer, agent, or independent agency is not required by subdivision 1 or 2 of this subsection to:

a. Review, or provide for review of, all agent-solicited transactions; or

b. Include in its system of supervision an agent's recommendations to consumers of products other than the annuities offered by the insurer, agent, or independent agency.

7. An agent or independent agency contracting with an insurer pursuant to subdivision 3 of this subsection, when requested by the insurer pursuant to subdivision 4 of this subsection, shall promptly give a certification as described in subdivision 4 or give a clear statement that it is unable to meet the certification criteria.

8. No person may provide a certification under subdivision 4 a of this subsection unless:

a. The person is a senior manager with responsibility for the delegated functions; and

b. The person has a reasonable basis for making the certification.

G. An agent shall not dissuade or attempt to dissuade a consumer from:

1. Truthfully responding to an insurer's request for confirmation of suitability information;

2. Filing a complaint; or

3. Cooperating with the investigation of a complaint.

H. Sales made in compliance with FINRA requirements pertaining to suitability and supervision of annuity transactions shall satisfy the requirements under this chapter:

1. This subsection applies to FINRA broker-dealer sales of annuities if the suitability and supervision is similar to those applied to variable annuity sales. However, nothing in this subsection shall limit the commission's ability to enforce (including investigate) the provisions of this chapter.

2. For subdivision 1 of this subsection to apply, an insurer shall:

a. Monitor the FINRA member broker-dealer using information collected in the normal course of an insurer's business; and

b. Provide to the FINRA member broker-dealer information and reports that are reasonably appropriate to assist the FINRA member broker-dealer to maintain its supervision system.

I. Compliance with FINRA Rule 2111 (http://finra.complinet.com/en/display/display_main.html?rbid=2403&element_id=9859) (https://www.finra.org/rules-guidance/rulebooks/finra-rules/2111) pertaining to suitability shall satisfy the requirements under this section for the recommendation of variable annuities. However, nothing in this subsection shall limit the commission's ability to enforce the provisions of this chapter.

14VAC5-71-31. License requirements for viatical settlement providers.

A. No person shall act as a viatical settlement provider with a resident of this Commonwealth without first obtaining a license from the commission.

B. The license issued to a viatical settlement provider shall allow the licensee to enter or effectuate a viatical settlement contract only by operating within the scope of its license as a viatical settlement provider.

1. No provision of this chapter shall be deemed to authorize any viatical settlement provider to transact any business other than that of a viatical settlement provider. A viatical settlement provider license shall not authorize the licensee to transact any business in this Commonwealth for which registration, certification or a license is required under any section of the Code of Virginia other than § 38.2-6002.

2. "Viatical settlement provider" does not include, and licensing as a viatical settlement provider shall not be required of, the following persons: (i) a bank, savings bank, savings and loan association, credit union, or other licensed lending institution that takes an assignment of a life insurance policy as collateral for a loan; (ii) the issuer of a life insurance policy providing accelerated death benefits governed by 14VAC5-70 and pursuant to the contract; (iii) an authorized or eligible insurer that provides stop loss coverage to a viatical settlement provider, viatical settlement purchaser, financing entity, special purpose entity or related provider trust; (iv) a financing entity; (v) a natural person who enters into or effectuates no more than one agreement in a calendar year for the transfer of life insurance policies for any value less than the expected death benefit; (vi) a special purpose entity; (vii) a related provider trust; (viii) a viatical settlement purchaser; or (ix) the accredited investor, qualified institutional buyer or qualified institutional purchaser under the Securities Act of 1933, as amended, provided the person is acting in the capacity of a person listed above and is neither entering into nor attempting to enter into, nor effectuating nor attempting to effectuate a viatical settlement contract in this Commonwealth or with any resident of this Commonwealth.

3. Except as provided in subdivision 2 (v) of this subsection, no person listed in subdivision 2 of this subsection shall attempt to enter into or effectuate a viatical settlement contract in this Commonwealth or with any resident of this Commonwealth without first becoming licensed as a viatical settlement provider in accordance with the provisions of this chapter. Notwithstanding the foregoing and in accordance with § 38.2-6002 F of the Code of Virginia, no licensed insurer shall be licensed as, or authorized to transact the business of, a viatical settlement provider in this Commonwealth.

C. The licensee shall be a legal entity that enters into or effectuates, or seeks to enter into or effectuate, a viatical settlement contract. The license shall authorize the licensee's partners, officers, members, and designated employees to act on behalf of the viatical settlement provider provided such individual is named in the legal entity's application for license or the application's supplements.

D. A license issued prior to July 1, 2004, shall expire on June 30, 2004, unless the license is renewed in accordance with the provisions of this section or subject to actions of termination, suspension, or revocation prior to expiry.

E. 1. If at the time of renewal, a viatical settlement provider has viatical settlements where an insured, who is a resident of this Commonwealth, has not died, it shall do one of the following:

a. Renew or maintain its license until the earlier of: (i) the date the viatical settlement provider properly assigns, sells or otherwise transfers the viatical settlements; or (ii) the date that the last insured covered by a viatical settlement transaction has died; or

b. Appoint, in writing, a viatical settlement provider or viatical settlement broker that is licensed in this Commonwealth to make all inquiries to the viator, or the viator's designee, regarding health status of the insured or any other matters. A copy of the appointment, acknowledged by the appointed provider or broker should be filed with the commission.

2. No viatical settlement provider shall fail to renew or seek to otherwise terminate its license without certifying to the commission that it has ceased doing business in this Commonwealth and is in compliance with the requirements of subdivision 1 of this subsection. The commission may require documentation supportive of the certification.

F. A license expiring on June 30 may be renewed effective July 1 for a one-year period ending on June 30 of the following year if the required renewal application and nonrefundable renewal fee have been received and the license is not terminated, suspended, or revoked at the time of renewal.

G. Initial and renewal applications shall be submitted to the Bureau of Insurance in a form acceptable to the commission. Forms are available through the website for the Bureau of Insurance, at http://www.state.va.us/scc/division/boi https://scc.virginia.gov/pages/Company-Licensing-and-Registration-Procedures.

H. Initial applications for licenses that are to be issued on or after July 1, 2003, shall be accompanied by a nonrefundable application fee of $500. A licensee may request renewal by submitting a renewal application and renewal fee of $300 on or before March 1 of the year in which the license shall expire. A viatical settlement provider's failure to submit a renewal application and fee within the prescribed time shall result in the imposition of penalties or other appropriate regulatory action. Notice of the requirements for renewal will be mailed by the Bureau of Insurance to each licensee's mailing address as shown in the records of the Bureau of Insurance. Renewal forms may be posted on the website for the Bureau of Insurance, at http://www.state.va.us/scc/division/boi https://scc.virginia.gov/pages/Company-Licensing-and-Registration-Procedures.

I. Each application shall fully and clearly disclose the identity of the applicant by complying with the provisions of this subsection.

1. An application for initial licensure shall identify all of the applicant's affiliates, directors, partners, and officers, and also each stockholder, member or employee having, owning or holding a 10% or greater interest in the applicant or an affiliate of the applicant. A renewal application shall update or confirm the accuracy of the information filed with the initial application and any intervening renewal applications or 30-day reports required by 14VAC5-71-70.

2. The commission may require the applicant to disclose the identity of all stockholders, members, and employees.

3. The applicant shall name and fully identify any individual, including any director, partner, officer, member or designated employee, that is to be authorized to act on behalf of the applicant under the license.

4. The commission, in the exercise of its discretion, may refuse to issue a license in the name of a legal entity if not satisfied that all directors, officers, employees, stockholders, partners, members thereof, or other individuals who may materially influence the applicant's conduct meet the standards of this chapter and Chapter 60 (§ 38.2-6000 et seq.) of Title 38.2 of the Code of Virginia.

J. Each application shall include evidence of the viatical settlement provider's financial accountability acceptable to the commission in accordance with the provisions of this subsection.

1. A surety bond in the amount of $100,000, in a form approved by the commission, shall be acceptable evidence of the viatical settlement provider's financial accountability provided (i) the surety bond is for the use and benefit only of the Commonwealth of Virginia and any person having a cause of action against the principal arising out of breaches of laws set forth in this chapter or Chapter 60 (§ 38.2-6000 et seq.) of Title 38.2 of the Code of Virginia; (ii) the surety bond is issued by an insurer licensed in this Commonwealth to transact the business of suretyship or approved by the commission to issue surplus lines coverage; (iii) the surety is neither directly nor indirectly under the same ownership or management as the principal on the bond; and (iv) termination provisions acceptable to the commission provide that the bond and coverage thereunder shall not be terminated without 30 days' written notice to the commission.

2. The requirement of a surety bond may be waived for a licensee that (i) has and maintains an errors and omissions insurance policy, in the sum of not less than $100,000 per occurrence and $1 million for all occurrences within one year, issued by an insurer licensed in this Commonwealth or approved by the commission to issue surplus lines coverage or (ii) makes and maintains a deposit of not less than $100,000 with the State Treasurer that complies in form and amount with the requirements of § 38.2-1045 A of the Code of Virginia.

3. No such policy or bond shall be terminated and no such deposit shall be withdrawn without 30 days' prior written notice to the licensee and the commission. Termination or withdrawal without the required notice and approval of the commission shall be grounds for suspension or revocation of, or refusal to renew, a license.

K. A nonresident applicant, as a condition precedent to receiving or holding a license and in addition to all other licensing requirements, shall designate a resident of this Commonwealth as the person upon whom any process, notice, or order required or permitted by law to be served upon such nonresident viatical settlement provider may be served.

1. The licensee shall promptly notify the clerk of the commission in writing of every change in its designated agent for service of process.

2. Whenever a nonresident viatical settlement provider transacting business in this Commonwealth fails to appoint or maintain a registered agent in this Commonwealth, or whenever its registered agent cannot with reasonable diligence be found at the registered office, the clerk of the commission shall be an agent of the nonresident upon whom service may be made in accordance with § 12.1-19.1 of the Code of Virginia.

L. The commission may require such additional information as is necessary to make the findings required by subsection M of this section and to otherwise determine whether the applicant complies with the requirements of § 38.2-6002 of the Code of Virginia.

M. Upon the filing of the initial application for licensure and the payment of the nonrefundable application fee, the commission shall make such investigation of each applicant as the commission may determine to be appropriate and issue a license if it finds that the applicant: (i) has provided a detailed plan of operation; (ii) is competent and trustworthy; (iii) indicates its intention to act in good faith within the confines of the license; (iv) has a good business reputation; (v) if an individual, has had experience, training or education that qualifies him for licensure; (vi) if a resident partnership, limited liability company, or corporation, has recorded the existence of the partnership, limited liability company, or corporation pursuant to law; (vii) if a corporation, has specific authority to act as a viatical settlement provider in its charter; (viii) if a nonresident partnership, limited liability company, or corporation, has furnished proof of its authority to transact business in Virginia; and (ix) has provided an anti-fraud plan that meets the requirements of § 38.2-6011 E 2 of the Code of Virginia.

N. The commission may suspend, revoke, refuse to issue, or refuse to renew the license of a viatical settlement provider if the commission finds that the applicant or licensee has (i) made any material misrepresentation in the application; (ii) been guilty of fraudulent or dishonest practices; (iii) been subject to a final administrative action or has otherwise been shown to be untrustworthy or incompetent to act as a viatical settlement provider; (iv) demonstrated a pattern of unreasonable payments to viators; (v) been convicted of a felony or any misdemeanor involving fraud or moral turpitude; (vi) entered into any viatical settlement contract that has not been approved pursuant to this chapter; (vii) failed to honor contractual obligations set out in a viatical settlement contract; (viii) demonstrated or represented that it no longer meets the requirements for initial licensure; (ix) assigned, transferred, or pledged a viaticated policy to a person other than a viatical settlement provider licensed in this Commonwealth, a viatical settlement purchaser, a financing entity, a special purpose entity, a related provider trust, or an accredited investor or a qualified institutional buyer as described in Regulation D (17 CFR 230.501 through 17 CFR 230.508) and defined, respectively, in Rule 501 (17 CFR 230.501) and Rule 144A (17 CFR 230.144A) under the Securities Act of 1933, as amended; (x) violated any provisions of this chapter, Chapter 60 (§ 38.2-6000 et seq.) of Title 38.2 of the Code of Virginia or other applicable provisions of Title 38.2 or rules promulgated thereunder; or has in its employ any officer, partner, member, or key management personnel who has violated provisions of this chapter, Chapter 60 of Title 38.2 or other applicable provisions of Title 38.2 or is affiliated with any person who has in its employ any such officer, partner, member, or key management personnel; or (xi) renewed or requested renewal of its license before implementing the anti-fraud initiatives required by § 38.2-6011 E of the Code of Virginia.

O. No applicant to whom a license is refused after a hearing, nor any licensee whose license is revoked, shall apply again for a license under this chapter until after the expiration of a period of five years from the date of the commission's order, or such other period of time as the commission may specify in its order.

P. A licensed insurer shall be prohibited from transacting the business of a viatical settlement provider.

14VAC5-80-60. Use of sales materials.

An insurer authorized to transact variable life insurance business in this Commonwealth shall not use any sales material, advertising material, or descriptive literature or other materials of any kind in connection with its variable life insurance business in this Commonwealth which is false, misleading, deceptive, or inaccurate.

Variable life insurance marketing communications shall be subject to the additional requirements of Rules Governing Life Insurance and Annuity Marketing Practices adopted, Chapter 40 (14VAC5-40-10 et seq.) of this Title by the Commission in Case No. INS810107 Rules Governing Advertisement of Life Insurance and Annuities (14VAC5-41-10).

14VAC5-190-50. Reporting and filing requirements.

A. Beginning May 1, 2018, and every other year thereafter, any health insurance issuer licensed to issue an applicable policy or contract in the Commonwealth of Virginia who reported greater than 5,000 covered lives in Virginia during either of the individual calendar years comprising the reporting period shall file with the Bureau of Insurance a separate Form 190-A report for each calendar year in the reporting period.

B. The Form 190-A report may be obtained on the Bureau of Insurance's webpage at http://www.scc.virginia.gov/boi/co/health/mandben.aspx, https://scc.virginia.gov/pages/Mandated-Benefits-and-Mandated-Offers and shall be filed electronically in accordance with the instructions that appear on the Bureau of Insurance's webpage.

14VAC5-321-20. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"2001 CSO Mortality Table" means that mortality table, which is included in the Proceedings of the NAIC (2nd Quarter 2002), consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. Unless the context indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables. The 2001 CSO Mortality Table may be accessed via the American Academy Society of Actuaries' website, http://www.actuary.org/life/cso/appendix_a_jun02.xls https://mort.soa.org/.

"2001 CSO Mortality Table (F)" means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.

"2001 CSO Mortality Table (M)" means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.

"Commission" means the State Corporation Commission.

"Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

"NAIC" means the National Association of Insurance Commissioners.

"Smoker and nonsmoker mortality tables" means mortality tables with separate rates of mortality for smokers and nonsmokers.

14VAC5-322-20. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless the context clearly indicates otherwise:

"2001 CSO Mortality Table" means that mortality table, consisting of separate rates of mortality for male and female lives, developed by the American Academy of Actuaries CSO Task Force from the Valuation Basic Mortality Table developed by the Society of Actuaries Individual Life Insurance Valuation Mortality Task Force, and adopted by the NAIC in December 2002. The 2001 CSO Mortality Table is included in the Proceedings of the NAIC (2nd Quarter 2002) and supplemented by the 2001 CSO Preferred Class Structure Mortality Table. Unless the context indicates otherwise, the "2001 CSO Mortality Table" includes both the ultimate form of that table and the select and ultimate form of that table and includes both the smoker and nonsmoker mortality tables and the composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality tables. The 2001 CSO Mortality Table may be accessed via the American Academy Society of Actuaries' website, http://www.actuary.org/life/cso/appendix_a_jun02.xls https://mort.soa.org/. Mortality tables in the 2001 CSO Mortality Table include the following:

1. "2001 CSO Mortality Table (F)" means that mortality table consisting of the rates of mortality for female lives from the 2001 CSO Mortality Table.

2. "2001 CSO Mortality Table (M)" means that mortality table consisting of the rates of mortality for male lives from the 2001 CSO Mortality Table.

3. "Composite mortality tables" means mortality tables with rates of mortality that do not distinguish between smokers and nonsmokers.

4. "Smoker and nonsmoker mortality tables" means mortality tables with separate rates of mortality for smokers and nonsmokers.

"2001 CSO Preferred Class Structure Mortality Table" means mortality tables with separate rates of mortality for Super Preferred Nonsmokers, Preferred Nonsmokers, Residual Standard Nonsmokers, Preferred Smokers, and Residual Standard Smoker splits of the 2001 CSO Nonsmoker and Smoker tables adopted by the NAIC in September 2006. The 2001 CSO Preferred Class Structure Mortality Table is included in the Proceedings of the NAIC (3rd Quarter 2006). Unless the context indicates otherwise, the "2001 CSO Preferred Class Structure Mortality Table" includes both the ultimate form of that table and the select and ultimate form of that table. It includes both the smoker and nonsmoker mortality tables. It includes both the male and female mortality tables and the gender composite mortality tables. It also includes both the age-nearest-birthday and age-last-birthday bases of the mortality table. The 2001 CSO Preferred Class Structure Mortality Table may be accessed via the Society of Actuaries website, http://www.soa.org/research/individual-life/intl-2001-cso-preferred-class-structure-mortality-tables.aspx https://www.soa.org/globalassets/assets/files/xls/2001-cso-preferred-class-structure-mortality-tables.xls.

"Commission" means the State Corporation Commission.

"Commissioner" means the Commissioner of Insurance in Virginia unless specific reference is made to another state, in which case "commissioner" means the insurance commissioner, director, superintendent or other supervising regulatory official of a given state who is responsible for administering the insurance laws of that state.

"NAIC" means the National Association of Insurance Commissioners.

"Statistical agent" means an entity with proven systems for protecting the confidentiality of individual insured and insurer information; demonstrated resources for and history of ongoing electronic communications and data transfer ensuring data integrity with insurers, which are its members or subscribers; and a history of and means for aggregation of data and accurate promulgation of the experience modifications in a timely manner.

14VAC5-390-70. Miscellaneous.

A. Any insurance agent or broker or any person who, with the authorization or consent of a licensee, shall take any action on behalf on such licensee shall be deemed to be an agent of such licensee as to such action. This supersedes any contrary language in the insurance premium finance contract.

B. Any licensee having knowledge of any violations of law or irregularities committed by an insurance agent or agency shall promptly report such violations or irregularities to the Commission. Violations and irregularities required to be reported shall include, but not be limited to, issuance of dishonored checks, failure to promptly refund unearned premiums and failure to promptly deliver any monies or documents required to be delivered to a licensee.

C. In the event of prepayment of an insurance premium finance contract, interest shall be refunded to the insured on either a short-rate or a pro-rata basis. Upon receipt from an insurer of the gross unearned premium, a licensee shall refund to the insured within 10 business days of such receipt any premium that is due the insured.

D. All refund checks payable to an insured shall be mailed to the insured's last known address. If a refund check is returned to a licensee unclaimed, the licensee shall make a diligent effort to locate the insured. Each licensee shall maintain a separate account for unclaimed refunds due insureds, and the balance of such account, together with a list of the names of such insureds, shall be reported in the licensee's annual report to the Commission. Whenever funds from such an account are disbursed, the licensee shall retain proof of payment to the insureds. The requirements of this section are in addition to the requirements of § 55-210.12 § 55.1-2524 of the Code of Virginia relating to disposition of unclaimed property.

E. Any company or person violating any provisions of this chapter shall be subject to the penalties provided in §§ 38.2-218, 38.2-219, 38.2-4704, and 38.2-4710 of the Code of Virginia to the extent that they are applicable to such company or person.