Virginia Insurance Updated Virginia-Life-Annuities-and-Health-Insurance Exam Questions and Answers by jorgie

Virginia Code § 38.2-1809 mandates that licensees maintain specific records for regulatory oversight and consumer protection. Option A (accounting records of premium payments) is required to track funds received and remitted, ensuring financial accountability (e.g., premiums collected for a $1,000 policy). Option B (files of insurance applications on current policies) must be kept as part of the contract and for audit purposes, per § 38.2-1810. Option C (policy renewal notices) is required to document communication with policyholders about ongoing coverage, ensuring transparency. Option D (premium quotations of unissued policies) is not mandated; while agents may provide quotes (e.g., $500 annually for a term policy), these are preliminary offers, not binding until a policy is issued, and Virginia law doesn’t require retaining them unless they result in a transaction. The study guide likely details recordkeeping in a compliance chapter, contrasting required records (A, B, C) with optional ones like quotes (D), using examples—e.g., keeping a paid policy’s file but not a rejected quote—making D the item not required. This reflects Virginia’s focus on executed contracts over prospective ones.

Detailed Answer in Step-by-Step Solution:

An alien insurer (B) is headquartered outside the U.S. but licensed to operate within it, distinguishing it from a foreign insurer (A), which is domiciled in another U.S. state.

A captive insurer (C) insures its parent company, and a reciprocal exchange (D) is a mutual insurance structure, neither based on location.

The Virginia study guide defines an alien insurer as one incorporated outside the U.S., operating under state licensing, per standard insurance terminology. Reference: Virginia Life, Annuities, and Health Insurance study guide, section on "Insurance Company Types."