Enforcement & Compliance
Note: Statutory information provided on this page is not intended to be comprehensive.
Please review the Code of Virginia for more detailed information, or contact the Bureau of Insurance for additional information.
- Administration of Insurance Regulation in Virginia
- Common Problems Found During Agent Investigations
- Common Problems for Real Estate Settlement Agents
- Guidance for Agents Developing Privacy Safeguards
- Send Documents
- Service Request Form – Change Name, Change Address, Request Letter of Clearance
- Update Contact Information
- Viatical Settlement Broker Annual Certification of Anti-Fraud Initiative Form
Insurance agencies are required to maintain a Designated Licensed Producer (DLP). The DLP must be one of the following:
For a business entity holding certain types of a limited lines license, the DLP is not required to be an employee, officer, director, manager, member, or partner of the vendor or lessor.
Insurance agencies are required to report the removal of the DLP and the name of the new DLP within 30 calendar days.
To Add a Designated Licensed Producer, follow these steps:
- Go to Maintain Designated Licensed Producer
- Enter the insurance agency information
- Select “Create” from the drop-down box and enter the producer’s information
- Select the appropriate “Designated Licensed Producer” type from the dropdown, and complete the transaction
(To remove an agent, choose "Terminate" from the drop-down in step 3.)
Visual guide for maintaining the DLP
If you experience difficulties, please give us a call at 804-371-9631.
Federal law, 18 U.S.C. § 1033, disqualifies individuals convicted of certain felony crimes involving dishonesty or a breach of trust from working in the insurance industry. This ban may be removed if approval is given by the Commissioner of Insurance for the individual to remain or become employed in the insurance industry. Individuals who will be working in the insurance industry in an unlicensed capacity must submit the Application for Written Consent to Engage in the Business of Insurance to the Bureau of Insurance.
Annuity Suitability Training Requirements
- Virginia Regulation 14VAC5-45 - Rules Governing Suitability in Annuity Transactions.
- Annuity Suitability Training FAQS
Federal Training Requirements
- Long Term Care (LTC) Certification
- Administrative Letter 2007-3 - Rules Governing Long-Term Care Insurance Long-Term Care Partnership Program
- Long Term Care Partnership
- Virginia Regulation 14VAC5-200-205 - State Long Term Care Insurance Partnership Program
Nonresident agents who comply with their home state requirement need only take a two-hour Virginia specific course to meet the requirement in Virginia.
- Virginia Regulation 14VAC5-200-205 - State Long Term Care Insurance Partnership Program
- Administrative Letter 2007-1 - Flood Insurance Training Requirements for Insurance Agents with a Property and Casualty License or Personal Lines License Selling through the National Flood Insurance Program (NFIP)
- Find Approved Courses
A number of agents are cited each year for inappropriately sharing their commissions with individuals who are not properly licensed. To verify whether or not a person is eligible to receive commissions, you may use the License Search to confirm what licenses and appointments are currently held. Likewise, if an agent is not properly licensed, they must not accept commissions from any other agent or insurer.
No insurer may pay directly or indirectly any commission or other valuable consideration to any person for services as an agent or surplus lines broker unless the person is a duly appointed agent of that insurer, and at the time the transaction took place, the agent held a valid license as an agent or surplus lines broker for the class of insurance involved. No person other than a duly licensed and appointed agent or surplus lines broker may accept any such commission or other valuable consideration unless at the time of the transaction he held a valid license as an agent or surplus lines broker for the class of insurance involved. In short, no company may pay commission to an individual unless he is properly licensed and appointed and no individual may accept such commission unless he is properly licensed and appointed at the time of the transaction.
Virginia law does not prevent the payment or receipt of renewal or other deferred commissions or compensation to or by any person if the person was properly licensed and appointed at the time of the transactions out of which arose the right to such renewals or deferred commissions or compensation. Virginia law also does not prevent payment of commissions to a trade name that has been filed with the Bureau of Insurance pursuant to the provisions of subsection E of § 38.2-1822 of the Code of Virginia.
In addition to the above prohibitions, no agent or surplus lines broker may directly or indirectly share their commissions or other compensation with anyone not also licensed for the class of insurance involved in the transaction. Furthermore, no agent or surplus lines broker not licensed and qualified for the same class of insurance shall receive any commission or other compensation. These provisions do not affect the payment of the regular salaries due employees of a licensee.
Offers of rebates or incentives are prohibited (§38.2-509). Each year the Bureau of Insurance encounters a number of agents who, in an effort to attract and/or retain clients, provide some type of rebate to insureds in order to entice them to purchase an insurance policy. However, Virginia law clearly states that no person shall “Pay, allow or give, or offer to pay, allow or give, directly or indirectly, as inducement to any insurance or annuity contract, any rebate of premium payable on the contract, any special favor or advantage in the dividends or other benefits on the contract, any valuable consideration or inducement not specified in the contract, except in accordance with an applicable rating plan authorized for use in this Commonwealth.”
Virginia law further states that no person shall “Receive or accept as inducement to insurance, or annuity contracts, any rebate of premium payable on the contract, any special favor or advantage in the dividends or other benefit to accrue on the contract, or any valuable consideration or inducement not specified in the contract.”
This makes it a violation of the Virginia Insurance Code for any agent to offer an inducement to an insured to purchase a contract of insurance. Agents will commonly hand out small items to their clients such as mugs, calendars, and other related items. Such items are generally considered advertising. The violation occurs when an agent offers to give any valuable consideration or inducement to a consumer based upon the consumer’s purchase of an insurance policy. The Bureau often advises agents that if they are going to give away items such as gift certificates for restaurants, t-shirts, or other such items, they should make these items available to anyone who enters their agency, whether they purchase an insurance policy or not. As long as the receipt of the item is not contingent upon the purchase of an insurance policy, there is no violation.
The agent/agency shall maintain sufficient records of its affairs so that the appropriate licensing authority may adequately ensure that the agent is in compliance with all provisions. The amount of time an agent is required to retain records is determined by their license type:
- Insurance Producers – 3 Calendar Years (§ 38.2-1809 )
- Public Adjusters – 5 Years (§ 38.2-1845.15)
- Viatical Settlement Agents – 5 Years (§ 38.2-6006)
- Real Estate Settlement Agents – 5 Years (§ 55.1-1011)
A number of agents inquire each year as to whether or not they are permitted to pay referral fees to unlicensed individuals. Section 38.2-1821.1 B 8 of the Code of Virginia specifically allows for the payment of referral fees to an unlicensed individual provided certain requirements are met. Section 8 states that a license as an insurance producer shall not be required of the following:
- Any person who refers a customer who seeks to purchase any insurance product to a licensed agent and receives compensation for the referral of a customer, provided that:
- The referral does not include a discussion of specific insurance policy terms and conditions;
- The compensation is in the form of a one-time nominal fee of a fixed dollar amount for each referral; and
- The compensation does not depend on whether the referral results in the purchase of insurance by the customer.
Agents who wish to pay referral fees to unlicensed individuals should carefully comply with these provisions in order to avoid any violation of the Code of Virginia. With regard to what is considered a “one time nominal fee,” it is the Bureau’s position that a “one time nominal fee” cannot exceed $25 per referral.
Each licensed agent/agency is required to report the following within 30 calendar days:
- Name Changes (§38.2-1826)
- Fictitious Name/Trade Name/Doing Business As (§38.2-1822)
- Address Changes (§38.2-1826)
(Also required to report address changes to insurers within 30 calendar days. Residents moving out of Virginia required to report address change immediately)
- Felony Convictions - Such report shall include both the charging documents as well as documents showing the final disposition of the case (§38.2-1826)
- Administrative actions taken against agent or agency in another jurisdiction or by another governmental agency in the Commonwealth. Such report shall include a copy of the order, consent to order or other relevant legal documents. (§38.2-1826)
- Adding/Removing Designated Licensed Producer. (§38.2-1825)