Current through Register Vol. 49, No. 2, February 2024
SECTION 1. PURPOSE
The purpose of this Rule is to establish minimum language and
format standards to make property and casualty insurance policies for personal
lines easier to read. This Rule is not intended to increase the risk assumed
under policies subject to it, nor is it intended to impede flexibility and
innovation in the development of policy forms or content.
SECTION 2. AUTHORITY
The Rule is issued pursuant to the authority vested in the
Commissioner by Ark. Code Ann. §§
23-61-108,
23-80-305,
25-15-201, et
seq., and other applicable provisions of Arkansas law.
SECTION 3. APPLICABILITY AND SCOPE
This Rule shall apply to all personal lines property and casualty
insurance policies delivered or issued for delivery in this State by or on
behalf of any insurer licensed in this State as defined in this Rule. For the
purpose of this Rule "personal lines policies" are (1) solely used to provide
homeowners insurance, fire and extended coverage insurance, dwelling fire
insurance on one to four family units, or individual fire insurance on dwelling
contents; or (2) principally used to provide primary-insurance on private
passenger non-fleet automobiles individually owned and used for personal and
family needs. For purposes of this Regulation, with respect to fire and
extended coverage insurance, "personal lines policies" do not include policies
issued using commercial lines forms and insuring the lessor's risk.
SECTION 4. EFFECTIVE DATE
The effective date of this Rule is January 1, 1992.
SECTION 5. STANDARDS
To comply with Ark. Code Ann. §
23-80-306,
policies covered by Sections 3 an4 4 of this Rule shall meet the following
standards:
A. The policy shall include
a table of contents of important provisions.
B. Each section shall be self-contained and
independent. However, general provisions applicable to more than one section
may be included in a common section.
C. The policy, except for declarations pages,
schedules, and tables, shall be printed in not less than 8 point type, one
point leaded.
D. The policy shall
be printed in a legible type style with adequate contrast between ink and
paper. Captions, headings and spacing shall be used to increase overall
legibility.
E. The policy shall be
written in every day, conversational language, consistent with its standing as
a contract. Short sentences and a personal style shall be used wherever
possible.
F. Technical terms and
words with special meaning shall be avoided wherever possible.
G. The policy text shall achieve a minimum
score of 40 on the Flesch Reading Ease Test or an equivalent score on'any other
comparable test or a lower score on either if the Commissioner finds the policy
reasonably easy to read. For purposes of this Section, a Flesch Reading Ease
Test shall be scored by the following method;
1. For a policy containing 10,000 words or
less of text, the entire policy shall be analyzed. For a policy containing more
than 10,000 words, the readability of two 100-word samples per page may be
analyzed instead. The samples shall be separated by at least 20 printed
lines.
2. The total number of words
in the text or sample shall be divided by the total number of sentences. The
figure obtained shall be multiplied by 1.015.
3. The total number of syllables in the text
or sample shall be divided by the total number of words. The figure obtained
shall be multiplied by 84.6.
4. The
sum of the figures computed under subsections (2) and (3) subtracted from
206.835 equals the Flesch Reading Ease Test score.
5. For purposes of this Section, the
following procedures shall be used:
(A) A
contraction, hyphenated word, numbers, and letters, when separated by spaces,
shall be counted as one word;
(B) A
unit of text ending with a period, semicolon, or colon shall be counted as a
sentence;
(C) A syllable means a
unit of spoken language consisting of one or more letters of a word as divided
by an accepted dictionary. Where the dictionary shows two or more equally
acceptable pronunciations of a word, the pronunciation containing fewer
syllables may be used; and
(D) At
the option of the insurer, any form made a part of the policy may be scored
separately or as part of the policy.
6. The term "text" as used in this Section
includes.all printed matter except: the name and address of the insurer; the
name, number, or title of the policy or form; the table of contents or index;
headings and captions; and declarations pages, schedules, or tables.
SECTION 6. SEVERABILITY
Any Section or provision of this Rule held by a court to be
invalid or unconstitutional will not affect the validity of any other Section
or provision of this Rule.
