38.2-602 - Definitions.
§ 38.2-602. Definitions.
As used in this chapter:
"Adverse underwriting decision" means:
1. Any of the following actions with respect to insurance transactionsinvolving insurance coverage that is individually underwritten:
a. A declination of insurance coverage;
b. A termination of insurance coverage;
c. Failure of an agent to apply for insurance coverage with a specificinsurance institution that an agent represents and that is requested by anapplicant;
d. In the case of a property or casualty insurance coverage:
(1) Placement by an insurance institution or agent of a risk with a residualmarket mechanism or an unlicensed insurer; or
(2) The charging of a higher rate on the basis of information that differsfrom that which the applicant or policyholder furnished; or
e. In the case of a life or accident and sickness insurance coverage, anoffer to insure at higher than standard rates, or with limitations,exceptions or benefits other than those applied for.
2. Notwithstanding subdivision 1 of this definition, the following actionsshall not be considered adverse underwriting decisions, but the insuranceinstitution or agent responsible for their occurrence shall provide theapplicant or policyholder with the specific reason or reasons for theiroccurrence:
a. The termination of an individual policy form on a class or statewide basis;
b. A declination of insurance coverage solely because such coverage is notavailable on a class or statewide basis;
c. The rescission of a policy.
"Affiliate" or "affiliated" means a person that directly, or indirectlythrough one or more intermediaries, controls, is controlled by, or is undercommon control with another person.
"Agent" shall have the meaning as set forth in § 38.2-1800 and shallinclude surplus lines brokers.
"Applicant" means any person who seeks to contract for insurance coverageother than a person seeking group insurance that is not individuallyunderwritten.
"Clear and conspicuous notice" means a notice that is reasonablyunderstandable and designed to call attention to the nature and significanceof the information in the notice.
"Consumer report" means any written, oral, or other communication ofinformation bearing on a natural person's credit worthiness, credit standing,credit capacity, character, general reputation, personal characteristics ormode of living that is used or expected to be used in connection with aninsurance transaction.
"Consumer reporting agency" means any person who:
1. Regularly engages, in whole or in part, in the practice of assembling orpreparing consumer reports for a monetary fee;
2. Obtains information primarily from sources other than insuranceinstitutions; and
3. Furnishes consumer reports to other persons.
"Control," including the terms "controlled by" or "under common controlwith," means the possession, direct or indirect, of the power to direct orcause the direction of the management and policies of a person, whetherthrough the ownership of voting securities, by contract other than acommercial contract for goods or nonmanagement services, or otherwise, unlessthe power is the result of an official position with or corporate office heldby the person.
"Declination of insurance coverage" means a denial, in whole or in part, byan insurance institution or agent of requested insurance coverage.
"Financial information" means personal information other than medicalrecord information or records of payment for the provision of health care toan individual.
"Financial institution" means any institution the business of which isengaging in financial activities as described in Section 4(k) of the BankHolding Company Act of 1956 (12 U.S.C. § 1843 (k)).
"Financial product or service" means any product or service that afinancial holding company could offer by engaging in an activity that isfinancial in nature or incidental to such a financial activity under Section4(k) of the Bank Holding Company Act of 1956 (12 U.S.C. § 1843 (k)).
"Individual" means any natural person who:
1. In the case of property or casualty insurance, is a past, present, orproposed named insured or certificate holder;
2. In the case of life or accident and sickness insurance, is a past,present, or proposed principal insured or certificate holder;
3. Is a past, present or proposed policyowner;
4. Is a past or present applicant;
5. Is a past or present claimant;
6. Derived, derives, or is proposed to derive insurance coverage under aninsurance policy or certificate subject to this chapter;
7. For the purposes of §§ 38.2-612.1 and 38.2-613, is a beneficiary of a lifeinsurance policy;
8. For the purposes of §§ 38.2-612.1 and 38.2-613, is a mortgagor of amortgage covered under a mortgage guaranty insurance policy; or
9. For the purposes of §§ 38.2-612.1 and 38.2-613, is an owner of propertyused as security for an indebtedness for which single interest insurance isrequired by a lender.
Notwithstanding any provision of this definition to the contrary, forpurposes of § 38.2-612.1, "individual" shall not include any naturalperson who is covered under an employee benefit plan, group or blanketinsurance contract, or group annuity contract when the insurance institutionor agent that provides such plan or contract: (i) furnishes the noticerequired under § 38.2-604.1 to the employee benefit plan sponsor, group orblanket insurance contract holder, or group annuity contract holder; and (ii)does not disclose the financial information of the person to a nonaffiliatedthird party other than as permitted under § 38.2-613.
"Institutional source" means any person or governmental entity thatprovides information about an individual to an agent, insurance institutionor insurance-support organization, other than:
1. An agent;
2. The individual who is the subject of the information; or
3. A natural person acting in a personal capacity rather than in a businessor professional capacity.
"Insurance institution" means any corporation, association, partnership,reciprocal exchange, inter-insurer, Lloyd's type of organization, fraternalbenefit society, or other person engaged in the business of insurance,including health maintenance organizations, and health, legal, dental, andoptometric service plans. "Insurance institution" shall not includeagents or insurance-support organizations.
"Insurance-support organization" means any person who regularly engages, inwhole or in part, in the practice of assembling or collecting informationabout natural persons for the primary purpose of providing the information toan insurance institution or agent for insurance transactions, including (i)the furnishing of consumer reports or investigative consumer reports to aninsurance institution or agent for use in connection with an insurancetransaction or (ii) the collection of personal information from insuranceinstitutions, agents or other insurance-support organizations for the purposeof detecting or preventing fraud, material misrepresentation or materialnondisclosure in connection with insurance underwriting or insurance claimactivity. However, the following persons shall not be considered"insurance-support organizations" for purposes of this chapter: agents,governmental institutions, insurance institutions, medical-care institutionsand medical professionals.
"Insurance transaction" means any transaction involving insurance primarilyfor personal, family, or household needs rather than business or professionalneeds that entails:
1. The determination of an individual's eligibility for an insurancecoverage, benefit or payment; or
2. The servicing of an insurance application, policy, contract, orcertificate.
"Investigative consumer report" means a consumer report or a portionthereof in which information about a natural person's character, generalreputation, personal characteristics, or mode of living is obtained throughpersonal interviews with the person's neighbors, friends, associates,acquaintances, or others who may have knowledge concerning such items ofinformation.
"Joint marketing agreement" means a formal written contract pursuant towhich an insurance institution jointly offers, endorses, or sponsors afinancial product or service with another financial institution.
"Life insurance" includes annuities.
"Medical-care institution" means any facility or institution that islicensed to provide health care services to natural persons, including butnot limited to, hospitals, skilled nursing facilities, home-health agencies,medical clinics, rehabilitation agencies, and public-health agencies orhealth-maintenance organizations.
"Medical professional" means any person licensed or certified to providehealth care services to natural persons, including but not limited to, aphysician, dentist, nurse, chiropractor, optometrist, physical oroccupational therapist, social worker, clinical dietitian, clinicalpsychologist, licensed professional counselor, licensed marriage and familytherapist, pharmacist, or speech therapist.
"Medical-record information" means personal information that:
1. Relates to an individual's physical or mental condition, medical history,or medical treatment; and
2. Is obtained from a medical professional or medical-care institution, fromthe individual, or from the individual's spouse, parent, or legal guardian.
"Nonaffiliated third party" means any person who is not an affiliate of aninsurance institution but does not mean (i) an agent who is selling orservicing a product on behalf of the insurance institution or (ii) a personwho is employed jointly by the insurance institution and the company that isnot an affiliate.
"Personal information" means any individually identifiable informationgathered in connection with an insurance transaction from which judgments canbe made about an individual's character, habits, avocations, finances,occupation, general reputation, credit, health, or any other personalcharacteristics. "Personal information" includes an individual's name andaddress and medical-record information, but does not include (i) privilegedinformation or (ii) any information that is publicly available.
"Policyholder" means any person who:
1. In the case of individual property or casualty insurance, is a presentnamed insured;
2. In the case of individual life or accident and sickness insurance, is apresent policyowner; or
3. In the case of group insurance that is individually underwritten, is apresent group certificate holder.
"Policyholder information" means personal information about a policyholder,whether in paper, electronic, or other form, that is maintained by or onbehalf of an insurance institution, agent, or insurance-support organization.
"Pretext interview" means an interview whereby a person, in an attempt toobtain information about a natural person, performs one or more of thefollowing acts:
1. Pretends to be someone he or she is not;
2. Pretends to represent a person he or she is not in fact representing;
3. Misrepresents the true purpose of the interview; or
4. Refuses to identify himself or herself upon request.
"Privileged information" means any individually identifiable informationthat (i) relates to a claim for insurance benefits or a civil or criminalproceeding involving an individual, and (ii) is collected in connection withor in reasonable anticipation of a claim for insurance benefits or civil orcriminal proceeding involving an individual.
"Residual market mechanism" means an association, organization, or otherentity defined, described, or provided for in the Virginia AutomobileInsurance Plan as set forth in § 38.2-2015, or in the Virginia PropertyInsurance Association as set forth in Chapter 27 (§ 38.2-2700 et seq.) ofthis title.
"Termination of insurance coverage" or "termination of an insurancepolicy" means either a cancellation or nonrenewal of an insurance policyother than by the policyholder's request, in whole or in part, for any reasonother than the failure to pay a premium as required by the policy.
"Unlicensed insurer" means an insurance institution that has not beengranted a license by the Commission to transact the business of insurance inVirginia.
(1981, c. 389, § 38.1-57.5; 1986, c. 562; 2001, c. 371; 2003, c. 729; 2006,c. 638.)