§ 59.1-306. Bond or letter of credit required; exception
A. Every health spa, before it enters into a health spa contract and accepts any moneys in excess of the prorated monthly fee for the month when the contract is initially executed plus one month's fees or accepts any initiation fee in excess of $125, shall file and maintain with the Commissioner, in form and substance satisfactory to him, a bond with corporate surety, from a company authorized to transact business in the Commonwealth or a letter of credit from a bank insured by the Federal Deposit Insurance Corporation in the amounts indicated below:
Number of Amount of bond
applicable contracts or letter of
credit
0 to 250 $10,000
251 to 500 $20,000
501 to 750 $30,000
751 to 1000 $40,000
1001 to 1250 $50,000
1251 to 1500 $60,000
1501 to 1750 $70,000
1751 to 2000 $80,000
2001 or more $100,000
For purposes of calculating the number of applicable unexpired health spa contracts when determining the required amount of bond or letter of credit, health spa contracts entered into on or after January 1, 2005, with a term that exceeds 13 months shall be counted as multiple health spa contracts, such that the number of applicable contracts counted with respect thereto shall equal the total of the number of full years and any partial year in its term. However, this paragraph shall not apply (i) to health spa contracts that are payable only on a monthly basis and for which the initiation fee is no more than $250, or (ii) if the number of the health spa's contracts in effect with a term that exceeds 13 months is less than 10 percent of the total of its health spa contracts.
The number of applicable unexpired contracts shall be separately calculated for each location where health spa services are offered.
Each separate location where health spa services are offered shall be considered a separate health spa and shall file a separate bond or letter of credit with respect thereto, even though the separate locations are owned or operated by the same owner.
However, no owner shall be required to file with the Commissioner bonds or letters of credit in excess of $300,000. If the $300,000 limit is applicable, then the bonds or letters of credit filed by such owner shall apply to all health spas owned or operated by the same owner.
B. A health spa which has not filed a bond or letter of credit may nevertheless sell health spa contracts of up to 36 months' duration so long as the amount of payment actually charged, due or received each month by the health spa or any holder of its health spa contracts does not exceed the monthly fee calculated pursuant to the definition thereof in § 59.1-296, with the exception that the payment actually charged may include a maximum initiation fee of $125 for health spa contracts of 13 months or more in duration.
(1984, c. 738; 1985, c. 585; 1990, cc. 392, 433; 1992, c. 117; 2004, c. 988.)
Sections: Previous 59.1-298 59.1-299 59.1-300 59.1-301 59.1-302 59.1-303 59.1-304 59.1-305 59.1-306 59.1-307 59.1-308 59.1-308.1 59.1-308.2 59.1-309 59.1-310 NextLast modified: April 16, 2009