Virginia Code 38.2-4504: Nonstock corporation required
A. 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.
Terms Used In Virginia Code 38.2-4504
- Commission: means the State Corporation Commission. See Virginia Code 38.2-100
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
- Nonstock corporation: means a foreign or domestic nonstock corporation which is subject to regulation and licensing under this chapter and which operates a dental services plan or an optometric services plan. See Virginia Code 38.2-4501
- Plan: means any dental services plan or any optometric services plan subject to regulation under this chapter. See Virginia Code 38.2-4501
- State: means any commonwealth, state, territory, district or insular possession of the United States. See Virginia Code 38.2-100
B. Notwithstanding the provisions of §§ 38.2-4502 and 38.2-4503, a nonstock corporation may offer or administer a plan without being required to act as agent for participating dentists or optometrists.
C. A nonstock corporation applying for its initial license pursuant to this chapter to offer or administer a plan may elect in its application to act as a nonagent, in which case the provisions of this section shall apply to such nonagent.
D. A nonstock corporation operating a plan pursuant to § 38.2-4502 or § 38.2-4503 may petition the Commission to change its status from an agent nonstock corporation to a nonagent nonstock corporation by making application to the Commission no less than ninety days preceding the proposed date of the change. The nonstock corporation shall give notice of the petition to its contract holders and participating dentists or optometrists. The Commission shall not approve the change of status unless it is satisfied that the financial condition of the nonstock corporation and the proposed method of operation and manner of doing business enable the nonstock corporation to meet its contractual obligations to all subscribers and that the nonstock corporation has otherwise complied with the requirements of this chapter. The Commission shall (i) consider, among other things, the sufficiency of the contingency reserve required under subsection E and (ii) subject the nonstock corporation, notwithstanding the provisions of § 38.2-1700, to the requirements of Chapter 17 (§ 38.2-1700 et seq.). If the Commission fails to approve the change of status, it shall state the reason in its order. A change in status shall only be effective as to subscription contracts issued or renewed on and after the date of a change in status.
E. No nonstock corporation shall offer or administer a plan without acting as an agent for participating dentists or optometrists unless it maintains at all times a contingency reserve of at least $4 million. The contingency reserve shall be computed as the Commission requires.
F. The provisions of §§ 38.2-4505, 38.2-4507, 38.2-4508, and 38.2-4512 shall not apply to a nonstock corporation that does not act as agent for participating dentists or optometrists.
1980, c. 682, § 38.1-895; 1986, c. 562; 2000, cc. 171, 204; 2013, c. 11.