Alabama Administrative Code
Title 482 - ALABAMA DEPARTMENT OF INSURANCE
Chapter 482-1-013 - DISABILITY INSURANCE ADVERTISEMENTS AND OTHER SIMILAR COVERAGES
Section 482-1-013-.05 - Advertisements Of Benefits Payable, Losses Covered Or Premiums Payable
Universal Citation: AL Admin Code R 482-1-013-.05
Current through Register Vol. 43, No. 02, November 27, 2024
(1) Deceptive Words, Phrases or Illustrations.
(a) Words,
phrases or illustrations shall not be used in a manner which misleads or has
the capacity and tendency to deceive as to the extent of any policy benefit
payable, loss covered or premium payable. An advertisement relating to any
policy benefit payable, loss covered or premium payable shall be sufficiently
complete and clear as to avoid deception or the capacity and tendency to
deceive.
(b) Explanation:
1. The words and phrases "all," "full,"
"complete," "comprehensive," "unlimited," "up to," "as high as," "this policy
will pay your hospital and surgical bills" or "this policy will replace your
income," or similar words and phrases shall not be used so as to exaggerate any
benefit beyond the terms of the policy, but may be used only in such manner as
fairly to describe such benefit.
2.
A policy covering only one disease or a list of specified diseases shall not be
advertised so as to imply coverage beyond the terms of the policy. Synonymous
terms shall not be used to refer to any disease so as to imply broader coverage
than is the fact.
3. The benefits
of a policy which pays varying amounts for the same loss occurring under
different conditions or which pays benefits only when a loss occurs under
certain conditions shall not be advertised without disclosing the limited
conditions under which the benefits referred to are provided by the
policy.
4. Phrases such as "this
policy pays $1,800 for hospital room and board expenses" are incomplete without
indicating the maximum daily benefit and the maximum time limit for hospital
room and board expenses.
(2) Exceptions, Reductions and Limitations.
(a) When an advertisement refers to any
dollar amount, period of time for which any benefit is payable, cost of policy,
or specific policy benefit or the loss for which such benefit is payable, it
shall also disclose those exceptions, reductions and limitations affecting the
basic provisions of the policy without which the advertisement would have the
capacity and tendency to mislead or deceive.
(b) Explanation:
1. The term "exception" shall mean any
provision in a policy whereby coverage for a specified hazard is entirely
eliminated; it is a statement of a risk not assumed under the policy.
2. The term "reduction" shall mean any
provision which reduces the amount of the benefit; a risk of loss is assumed
but payment upon the occurrence of such loss is limited to some amount or
period less than would be otherwise payable had such reduction clause not been
used.
3. The term "limitation"
shall mean any provision which restricts coverage under the policy other than
an exception or a reduction.
4.
Waiting, Elimination, Probationary or Similar Periods. When a policy contains a
time period between the effective date of the policy and the effective date of
coverage under the policy or a time period between the date a loss occurs and
the date benefits begin to accrue for such loss, an advertisement covered by
Paragraph (2) of this rule shall disclose the existence of such
periods.
5. Pre-existing
Conditions.
(i) An advertisement covered by
Paragraph (2) of this rule shall disclose the extent to which any loss is not
covered if the cause of such loss is traceable to a condition existing prior to
the effective date of the policy.
(ii) When a policy does not cover losses
traceable to pre-existing conditions, no advertisement of the policy shall
state or imply that the applicant's physical condition or medical history will
not affect the issuance of the policy or payment of a claim thereunder. This
limits the use of the phrase "no medical examination required" and phrases of
similar import.
Author: John Davis, Associate Counsel
Statutory Authority: Code of Ala. 1975, §§ 27-2-17, 27-12-1, et seq.
Disclaimer: These regulations may not be the most recent version. Alabama may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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