Va. Code Ann. tit. 38.2, ch. 45

in effect

Va. Code Ann. § 38.2-4500 Applicability of chapter

A. Except as otherwise provided by law, no arrangement for furnishing prepaid dental services or prepaid optometric services 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 prohibits any dentist or optometrist individually, in partnership with other dentists or optometrists, or as part of a professional corporation of dentists or optometrists 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. 1980, c. 682, § 38.1-894; 1986, c. 562; 1997, c. 801 .

Va. Code Ann. § 38.2-4501 Definitions

As used in this chapter: "Contract holder" means a person entering into a subscription contract with a nonstock corporation. "Dental services plans" means any arrangement for offering or administering prepaid dental services by a nonstock corporation licensed under this chapter. "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. "Optometric services plan" means any arrangement for offering or administering prepaid optometric services by a nonstock corporation licensed under this chapter. "Plan" means any dental services plan or any optometric services plan subject to regulation under this chapter. "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 dental or optometric services or benefits for dental or optometric services. 1986, c. 562.

Va. Code Ann. § 38.2-4502 Dental services plans

A group of licensed dentists may conduct through a nonstock corporation as agent for them a dental services plan as defined in § 38.2-4501 . 1980, c. 682, § 38.1-892; 1986, c. 562.

Va. Code Ann. § 38.2-4503 Optometric services plans

A group of licensed optometrists may conduct through a nonstock corporation as agent for them an optometric services plan as defined in § 38.2-4501 . 1980, c. 682, § 38.1-893; 1986, c. 562.

Va. Code Ann. § 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. 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 .

Va. Code Ann. § 38.2-4505 Liability of participants

A. All dentists or optometrists participating in a plan shall be jointly and severally liable on all contracts made for the purpose 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. 1980, c. 682, § 38.1-896; 1986, c. 562.

Va. Code Ann. § 38.2-4506 Terms of participation

Each dentist or optometrist participating in any plan shall do so in accordance with the terms and conditions imposed on other participating providers under similar circumstances. Participating providers shall have the right to engage in other practice. A nonstock corporation shall not engage in the practice of dentistry or optometry. 1980, c. 682, § 38.1-897; 1986, c. 562.

Va. Code Ann. § 38.2-4507 Change of participants

A. Any participating dentist or optometrist 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. Dentists or optometrists may be admitted to a plan at any time and will then automatically become liable on all its outstanding contracts. 1980, c. 682, § 38.1-897; 1986, c. 562.

Va. Code Ann. § 38.2-4508 Board of directors of nonstock corporation

Notwithstanding the provisions of § 13.1-855 , a nonstock corporation shall have a board of directors consisting of at least twelve but no more than twenty members. A majority of the members of the board of directors of a nonstock corporation operating a dental services plan shall be participating dentists. A majority of the members of the board of directors of a nonstock corporation operating an optometric services plan shall be participating optometrists. 1980, c. 682, § 38.1-898; 1986, c. 562; 1987, c. 520.

Va. Code Ann. § 38.2-4509 Application of certain laws

A. 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 , 38.2-229 , 38.2-316 , 38.2-316.2, 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 , 38.2-900 through 38.2-904 , 38.2-1038 , 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 , Articles 4 (§ 38.2-1317 et seq.), 5 (§ 38.2-1322 et seq.), and 6 (§ 38.2-1335 et seq.) of Chapter 13, §§ 38.2-1400 through 38.2-1442 , 38.2-1446 , 38.2-1447 , 38.2-1800 through 38.2-1836 , 38.2-3401 , 38.2-3404 , 38.2-3405 , 38.2-3407.1 , 38.2-3407.4 , 38.2-3407.10 , 38.2-3407.10:1 , 38.2-3407.13 , 38.2-3407.14 , 38.2-3407.15 , 38.2-3407.17 , 38.2-3407.17:1 , 38.2-3407.19 , 38.2-3415 , 38.2-3541 , Article 5 (§ 38.2-3551 et seq.) of Chapter 35, §§ 38.2-3600 through 38.2-3603 , Chapter 55 (§ 38.2-5500 et seq.), Chapter 58 (§ 38.2-5800 et seq.), and Chapter 65 (§ 38.2-6500 et seq.) shall apply to the operation of a plan. B. The provisions of subsection A of § 38.2-322 shall apply to an optometric services plan. The provisions of subsection C of § 38.2-322 shall apply to a dental services plan. C. The provisions of Article 1.2 (§ 32.1-137.7 et seq.) of Chapter 5 of Title 32.1 shall not apply to either an optometric or dental services plan. D. The provisions of § 38.2-3407.1 shall apply to claim payments made on or after January 1, 2014. No optometric or dental services plan shall be required to pay interest computed under § 38.2-3407.1 if the total interest is less than $5. 1980, c. 682, § 38.1-899; 1983, c. 457; 1986, c. 562; 1989, c. 653; 1993, cc. 158, 307; 1996, c. 776 ; 1998, cc. 42 , 891 ; 1999, cc. 643 , 649 , 709 , 739 ; 2000, cc. 47 , 50 , 922 ; 2004, c. 315 ; 2006, c. 427 ; 2010, cc. 583 , 734 ; 2011, c. 788 ; 2013, cc. 473 , 670 , 679 ; 2014, c. 309 ; 2015, cc. 14 , 723 ; 2019, c. 655 ; 2020, cc. 264 , 916 , 917 ; 2021, Sp. Sess. I, c. 161 ; 2024, cc. 197 , 319 , 345 .

Va. Code Ann. § 38.2-4509.1 Rehabilitation, liquidation, conservation

Any rehabilitation, liquidation, or conservation of a dental or optometric plan shall be deemed to be the rehabilitation, liquidation, or conservation of an insurer and shall be subject to the provisions of Chapter 15 of this title. 1990, c. 331.

Va. Code Ann. § 38.2-4510 Quarterly reports

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 additional reports, exhibits or statements. The Commission may require verification by any officers of the nonstock corporation the Commission designates. 1980, c. 682, § 38.1-900; 1986, c. 562.

Va. Code Ann. § 38.2-4511 Corporation's contracts with participating dentists or optometrists

Participating dentists or optometrists shall agree to (i) perform the dental services or optometric services specified by the plan at the rates of compensation determined by the nonstock corporation and filed with the Commission, and (ii) abide by the bylaws, rules and regulations of the nonstock corporation. 1980, c. 682, § 38.1-901; 1986, c. 562.

Va. Code Ann. § 38.2-4512 Contracts between participating dentists or optometrists and subscribers

Participating dentists or optometrists, acting through their agents, may enter into contracts with subscribers to furnish specified dental or optometric services at specified rates to a subscriber or subscriber's members, officers, or employees. Contracts may vary as to services and rates. 1980, c. 682, § 38.1-902; 1986, c. 562.

Va. Code Ann. § 38.2-4513 Subscriber to have free choice of practitioners available

A plan shall be organized and operated to assure that any subscriber shall have free choice of any participating dentist or optometrist who agrees to accept the subscriber as a patient for services provided by the plan. 1980, c. 682, § 38.1-903; 1986, c. 562.

Va. Code Ann. § 38.2-4514 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. 1980, c. 682, § 38.1-903; 1986, c. 562.

Va. Code Ann. § 38.2-4515 Geographical area

A. Each nonstock corporation seeking to be licensed by the Commission shall specify the geographical area it desires to serve and shall satisfy the Commission that it is able to render the services of the plan. B. The Commission may, after notice and hearing, license more than one nonstock corporation for the same geographical area unless the Commission finds that the (i) nonstock corporation's proposed method of operation or manner of doing business is not satisfactory or (ii) licensing of more than one nonstock corporation for the same geographical area will not promote the public welfare. If more than one nonstock corporation is licensed in a geographical area, the nonstock corporations in that area shall make arrangements among themselves to see that any claim filed with the wrong nonstock corporation in that area be promptly forwarded to the proper nonstock corporation, if it can be determined. C. Subscription contracts shall not be sold to persons residing outside the area of the nonstock corporation unless they are regularly employed within the area. The subscription contract of a subscriber who neither lives nor is employed within the area shall be cancelled by notice given in accordance with the terms of the subscription contract. 1980, c. 682, § 38.1-904; 1986, c. 562.

Va. Code Ann. § 38.2-4516 Interplan arrangements

A nonstock corporation may enter into contracts with similar nonstock corporations or foreign companies for the interchange of services to those included in subscription contracts and may provide in subscription contracts for the substitution of the services instead of those recited in subscription contracts. 1980, c. 682, § 38.1-905; 1986, c. 562.

Va. Code Ann. § 38.2-4517 Licensing of nonstock corporation

A. No person shall operate a dental or optometric services plan in this Commonwealth 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 shall not issue to or renew a license of a nonstock corporation unless it is 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. 1980, c. 682, § 38.1-906; 1986, c. 562; 1987, cc. 565, 655; 1994, c. 503 .

Va. Code Ann. § 38.2-4518 Renewal of nonstock corporation license

A. Each nonstock corporation licensed under this chapter shall renew its license 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 it an opportunity to be heard and to introduce evidence in its behalf. Any nonrenewal hearing may be informal, and the required notice may be waived by the Commission and the nonstock corporation. 1980, c. 682, § 38.1-907; 1986, c. 562; 1987, cc. 565, 655.

Va. Code Ann. § 38.2-4519 Licensing of agents

Subscription contracts for dental services plans may be solicited only by licensed dental services agents as provided for in Chapter 18 of this title. Subscription contracts for optometric services plans may be solicited only by licensed optometric services agents as provided for in 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. 1980, c. 682, § 38.1-908; 1986, c. 562.

Va. Code Ann. § 38.2-4520 Corporate restrictions

Any nonstock corporation subject to this chapter shall not engage in any other business. However, a nonstock corporation may assist in the administration of governmental health care programs in a manner provided for by contract or regulations. A nonstock corporation's charter may provide for ex officio directors and directors elected by persons or associations who are not directors or members of the nonstock corporation. 1980, c. 682, § 38.1-909; 1986, c. 562.

Va. Code Ann. § 38.2-4521 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. 1980, c. 682, § 38.1-909; 1986, c. 562; 1987, cc. 565, 655.

Va. Code Ann. § 38.2-4522 Misleading applications or contracts

In the operation of a plan, no person shall use any misleading subscription applications or contracts. 1980, c. 682, § 38.1-910; 1986, c. 562.

Va. Code Ann. § 38.2-4523 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. 1980, c. 682, § 38.1-914; 1986, c. 562.

Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://law.lis.virginia.gov/vacode/title38.2/chapter45/Fetched: 10/16/2026