Va. Code Ann. tit. 38.2, ch. 24

Va. Code Ann. tit. 38.2, ch. 24
in effect

Va. Code Ann. § 38.2-2400 Class of insurance to which chapter applies

This chapter applies to fidelity and surety insurance as defined in §§ 38.2-120 and 38.2-121 . 1952, c. 317, § 38.1-639; 1986, c. 562.

Va. Code Ann. § 38.2-2401 Fidelity and surety insurer defined

The term "fidelity and surety insurer" means any company licensed to transact fidelity or surety insurance in this Commonwealth, and includes any company elsewhere designated or referred to in this Code as a guaranty, indemnity, fidelity, surety or security company. 1952, c. 317, § 38.1-640; 1986, c. 562.

Va. Code Ann. § 38.2-2402 Fidelity and surety insurer not to transact insurance without appropriate license

No fidelity and surety insurer shall transact the business of fidelity insurance or surety insurance without first obtaining a license from the Commission to transact that class of insurance. 1986, c. 562.

Va. Code Ann. § 38.2-2403 Limitation of liability on risks

In applying the limitation specified in § 38.2-208 to fidelity and surety risks, the net amount of exposure on any single risk shall be considered to be within the prescribed limit if the fidelity and surety insurer is protected against losses in excess of the limit by: 1. Reinsurance with a fidelity and surety insurer that enables the obligee or beneficiary to maintain an action on the contract against the insurer jointly with the reinsurer; 2. The cosuretyship of any other fidelity and surety insurer; 3. A deposit of property with it in pledge, or conveyance of property to it in trust for its protection; 4. A conveyance or mortgage of property for its protection; 5. A deposit or other disposition of a portion of any property held in trust so that no future sale, mortgage, pledge or other disposition can be made of that portion of the property except with the consent of the fidelity and surety insurer or by decree or order of a competent court whenever the obligation is entered into on behalf or on account of a person holding property in a fiduciary capacity; or 6. A guarantee by the Small Business Administrator that the surety shall not suffer loss as set forth in the Small Business Investment Act of 1958. Code 1950, §§ 38-343, 38-344; 1952, c. 317, § 38.1-641; 1986, c. 562; 1988, cc. 529, 548.

Va. Code Ann. § 38.2-2404 Limit when penalty of bond exceeds actual exposure to risk

When the penalty of a suretyship obligation exceeds (i) the amount of a judgment described on the obligation as appealed from and secured by the obligation, (ii) the amount of the subject matter in controversy, or (iii) the amount of the estate held in trust by the person acting in a fiduciary capacity, the bond may be executed by any fidelity and surety insurer if the actual amount of the judgment or the subject matter in controversy or estate not subject to supervision or control of the surety is not in excess of the limitation specified in § 38.2-208 . When the penalty of a suretyship obligation executed for the performance of a contract exceeds the contract price, the contract price shall be taken as the basis for estimating the limit of risk specified in § 38.2-208 . 1952, c. 317, § 38.1-642; 1986, c. 562.

Va. Code Ann. § 38.2-2405 When insurer accepted as surety

Any fidelity and surety insurer shall be accepted as surety upon any bond required by the laws of this Commonwealth or by any court, judge, public officer, board, or organization upon presentation of evidence satisfactory to the court, judge, or other officer authorized to approve the bond that the insurer is licensed to transact surety insurance. Code 1950, § 38-332; 1952, c. 317, § 38.1-643; 1986, c. 562.

Va. Code Ann. § 38.2-2406 Requirements deemed met by insurer

Whenever a bond, undertaking, recognizance, guaranty, or similar obligation is required, permitted, authorized or allowed by any law of this Commonwealth, or whenever the performance of any act, duty or obligation, or the refraining from any act, is required, permitted, authorized or allowed to be secured or guaranteed by any law of this Commonwealth, the bond or similar obligation, or the security or guaranty, may be executed by any fidelity and surety insurer licensed to execute such instruments. The execution by any fidelity and surety insurer of a bond, undertaking, recognizance, guaranty or similar obligation by its officer, attorney-in-fact, or other authorized representative shall be accepted as fully complying with every law or other requirement, now or hereafter in force, requiring that the bond, undertaking, recognizance, guaranty or similar obligation be given or accepted or that it be executed by one or more sureties, or that the surety or sureties be residents, householders or freeholders, or possess any other qualifications. 1952, c. 317, § 38.1-644; 1986, c. 562.

Va. Code Ann. § 38.2-2409 Agreement for joint control of money and assets

Any person required to execute a bond, undertaking or other obligation may agree with his surety to deposit any or all assets for which he and his surety may be held responsible. The deposit shall be with a bank, savings bank, safe deposit company, or trust company authorized by law to do business as such, or with any other depository approved by the court or a judge of the court, if the deposit is otherwise proper. Assets shall be deposited for safekeeping and held in a manner that prevents the withdrawal of the whole or any part of the deposit without the written consent of the surety, or without an order of a court or a judge, made on any notice to the surety which the court or judge directs. The agreement shall not in any manner release or change the liability of the principal or sureties as established by the terms of the bond. Code 1950, § 38-345; 1952, c. 317, § 38.1-645; 1986, c. 562.

Va. Code Ann. § 38.2-2410 Expense of securing bond to be allowed in settlements; exceptions

Any court, judge or other officer whose duty it is to approve the account of any person required to execute a bond with surety shall, whenever a fidelity and surety insurer has become surety on the bond, allow a sum for the expense of obtaining the surety in the settlement of the account. The sum allowed shall accord with the applicable rate filing in effect for the insurer under the provisions of this title. The allowance shall not be made to any state, county or municipal officer. Code 1950, § 38-347; 1952, c. 317, § 38.1-646; 1986, c. 562.

Va. Code Ann. § 38.2-2412 Notice to clerks of revocation of licenses

Whenever the Commission revokes, suspends or otherwise terminates the license of any fidelity and surety insurer it shall immediately give notice of the revocation, suspension or termination to the Clerk of the Supreme Court of Virginia and each circuit court in the Commonwealth. Code 1950, § 38-335; 1952, c. 317, § 38.1-648; 1986, c. 562; 2003, c. 979 ; 2004, c. 460 .

Va. Code Ann. § 38.2-2412.1 Notice to Department of Criminal Justice Services of revocation of property and casualty insurance license

Whenever the Commission revokes, suspends or otherwise terminates the license of any property and casualty agent who is also a licensed surety bail bondsman, it shall immediately give notice of the revocation, suspension or termination to the Department of Criminal Justice Services. 2004, c. 460 .

Va. Code Ann. § 38.2-2412.2 Surety bail bondsman; notice to Department of Criminal Justice Services of violations

A. The Commission shall notify the Department of Criminal Justice Services of any action taken or investigation concerning any violation by a property and casualty agent who is also licensed as a surety bail bondsman of the prohibitions listed in this section within 30 days from the receipt of the initial report of a violation. The Commission and the Department of Criminal Justice Services may conduct a joint investigation of any alleged violation. 1. Providing materially incorrect, misleading, incomplete or untrue information in the license application or any other document filed with the Commission; 2. Violating any subpoena of the Commission; 3. Obtaining or attempting to obtain a license through misrepresentation or fraud; 4. Engaging in the practice of rebating; 5. Engaging in twisting or any form thereof, where "twisting" means inducing an insured to terminate an existing policy and purchase a new policy through misrepresentation; 6. Improperly withholding, misappropriating or converting any moneys or properties received in the course of doing business; 7. Intentionally misrepresenting the terms of an actual or proposed insurance contract or application for insurance; 8. Having admitted or been found to have committed any insurance unfair trade practice or fraud; 9. Having been convicted of a felony; 10. Using fraudulent, coercive, or dishonest practices, or demonstrating incompetence or untrustworthiness in the conduct of business in the Commonwealth or elsewhere, or demonstrating financial irresponsibility in the handling of applicant, policyholder, agency, or insurance company funds; 11. Forging another's name to an application for insurance or to any document related to an insurance transaction; 12. Improperly using notes or any other reference material to complete an examination for an insurance license; 13. Knowingly accepting insurance business from an individual who is not licensed; 14. Having an insurance producer, surplus lines broker, or consultant license, or its equivalent, denied, suspended or revoked in any other state, province, district or territory; 15. Failing to comply with an administrative or court order imposing a child support obligation; 16. Failing to pay state income tax or comply with any administrative or court order directing payment of state income tax; or 17. Violating any insurance laws, or violating any regulation or order of the Commission or of another state's insurance regulatory authority. 2004, c. 460 .

Va. Code Ann. § 38.2-2413 Release of insurers from liability; rights and remedies

Any fidelity and surety insurer shall be released from its liability on the same terms and conditions as are prescribed by law for the release of individuals. Any fidelity and surety insurer shall have all the rights, remedies and relief to which an individual guarantor, indemnitor, or surety is entitled. Code 1950, § 38-333; 1952, c. 317, § 38.1-649; 1986, c. 562.

Va. Code Ann. § 38.2-2414 Insurer estopped to deny power to assume liability

Any fidelity and surety insurer that executes any bond as surety under the provisions of this chapter shall be estopped, in any proceedings to enforce the liability it has assumed, to deny its power to execute the bond or assume the liability. Code 1950, § 38-348; 1952, c. 317, § 38.1-650; 1986, c. 562.

Va. Code Ann. § 38.2-2415 Where civil proceedings may be instituted

Any suit or other civil proceeding may be instituted against any fidelity and surety insurer (i) at the place where it became surety or assumed any duty or obligation that may be the subject of suit or other civil proceeding; or (ii) at the place where the principal obligor for whom it has become surety may be sued. When the Commonwealth is a party, plaintiff or defendant, the suit or proceeding shall be in the Circuit Court of the City of Richmond. Code 1950, § 38-346; 1952, c. 317, § 38.1-651; 1986, c. 562.

Va. Code Ann. § 38.2-2416 Power of attorney to be recorded or attached; filing with the Department of Criminal Justice Services

A. Each power of attorney from a fidelity and surety insurer to an agent making the agent an attorney-in-fact to execute any bail bond as defined in § 19.2-119 in the name and on behalf of the insurer as surety, shall, unless the power of attorney is special and limited to one transaction or to definitely stated transactions, be filed with the Department of Criminal Justice Services allowing the powers delegated by it to be exercised in any city or county in the Commonwealth. B. Each power of attorney, or a copy or facsimile thereof, which may include a printed or facsimile signature or corporate seal, from a fidelity and surety insurer to an agent making the agent an attorney-in-fact to execute any bond or other obligation, other than a bail bond as defined in § 19.2-119 , in the name and on behalf of the insurer as surety, shall be duly attached to the bond or other obligation. Code 1950, § 38-339; 1952, c. 317, § 38.1-653; 1986, c. 562; 2004, c. 357 ; 2006, c. 296 .

Va. Code Ann. § 38.2-2417 Continuance of power; revocation

The power of an attorney-in-fact to bind the fidelity and surety insurer as surety within the authority conferred by a power of attorney recorded pursuant to subsection A of § 38.2-2416 , shall, unless the power of attorney is otherwise limited, continue for the agency until the expiration of the power of attorney or until the power is revoked by the insurer's sealed written instrument duly acknowledged for recordation and admitted to record in the county or corporation in which the power of attorney is recorded. Code 1950, § 38-340; 1952, c. 317, § 38.1-654; 1986, c. 562; 2004, c. 357 .

Va. Code Ann. § 38.2-2418 Recordation of instrument of revocation

Any instrument of revocation issued pursuant to § 38.2-2417 shall be recorded in the deed book in the office of the clerk in which the power of attorney was recorded, upon the acknowledgment prescribed by law for the acknowledgment of deeds for recordation. The admission to record the instrument of revocation shall constitute notice to all concerned of the revocation of the power previously conferred. Code 1950, § 38-341; 1952, c. 317, § 38.1-655; 1986, c. 562; 2004, c. 357 .

Va. Code Ann. § 38.2-2419 Notation of revocation; indexing

When the power of attorney has been revoked in accordance with § 38.2-2417 , the clerk in whose office the power of attorney is recorded shall record its revocation in the deed book where the power of attorney is recorded. The revocation shall reference the book and page where the original power of attorney is recorded. The clerk shall index the instrument of revocation both in the name of the fidelity and surety insurer and of its attorney-in-fact. Code 1950, § 38-342; 1952, c. 317, § 38.1-656; 1986, c. 562; 2004, c. 357 ; 2011, c. 470 ; 2014, c. 330 .

Va. Code Ann. § 38.2-2420 Bonds executed under power of attorney binding on insurer

Any bond or obligation executed in the name and on behalf of the insurer as surety under the authority of the power of attorney shall have the same force, effect and validity, and shall be as binding upon the insurer in the name and on behalf of which it is executed as if it were properly executed by the insurer itself through its officers under its common seal. For the purpose of this section, the seal of the insurer or the seal of the attorney-in-fact shall not be required to be affixed to the bond or obligation. Code 1950, § 38-338; 1952, c. 317, § 38.1-657; 1986, c. 562.
Source: Open US Law by Vaquill AI (CC BY 4.0)URL: https://law.lis.virginia.gov/vacode/title38.2/chapter24/Fetched: 10/16/2026