Current through Register 2024 Notice Reg. No. 38, September 20, 2024
(a) The
information required to be disclosed by these regulations shall not be minimized,
rendered obscure or presented in an ambiguous fashion or intermingled with the text
of the advertisement so as to be confusing or misleading.
(b) No advertisement shall omit material
information or use words, phrases, statements, references or illustrations if such
omission or such use has the capacity, tendency or effect of misleading or deceiving
purchasers or prospective purchasers as to the nature or extent of any policy
benefit payable, loss covered, premium payable or state or federal tax consequences.
The fact that the policy offered is made available to a prospective insured for
inspection prior to consummation of the sale, or an offer is made to refund the
premium if the purchaser is not satisfied, does not remedy misleading
statements.
(c) In the event an
advertisement uses "Non-Medical," "No Medical Examination Required," or similar
terms where issue is not guaranteed, such terms shall be accompanied by a further
disclosure of equal prominence and in juxtaposition thereto, to the effect that
issuance of the policy may depend upon the answers to the health
questions.
(d) An advertisement shall
not use as the name or title of a life insurance policy or an annuity, any phrase
which does not include the words "life insurance" or "annuity" unless accompanied by
other language clearly indicating it is life insurance or an annuity.
(e) An advertisement shall prominently describe
the type of policy advertised.
(f) An
advertisement of an insurance policy marketed by direct response techniques shall
not state or imply that because there is no agent or commission involved there will
be a cost savings to prospective purchasers unless such is the fact. No such cost
savings may be stated or implied without justification satisfactory to the Insurance
Commissioner prior to use.
(g) An
advertisement for a policy containing graded or modified benefits shall prominently
display any limitation of benefits. If the premium is level and coverage decreases
or increases with age or duration, such fact shall be prominently
disclosed.
(h) An advertisement for a
policy with non-level premiums shall prominently describe the premium
changes.
(i) Dividends.
(1) An advertisement shall not utilize or describe
dividends in a manner which is misleading or has the capacity or the tendency to
mislead.
(2) An advertisement shall not
state or imply that the payment or amount of dividends is guaranteed. If dividends
are illustrated, they must be based on the insurer's current dividend scale and the
illustrations must contain a statement to the effect that they are not to be
construed as guarantees or estimates of dividends to be paid in the
future.
(3) An advertisement shall not
state or imply that illustrated dividends under a participating policy and/or pure
endowments will be or can be sufficient at any future time to assure, without the
further payment of premiums, the receipt of benefits, such as a paid-up policy,
unless the advertisement clearly and precisely explains (1) what benefits or
coverage would be provided at such time and (2) under what conditions this would
occur.
(j) An advertisement
shall not state that a purchaser of a policy will share in or receive a stated
percentage or portion of the earnings on the general account assets of the
company.
(k) Testimonials or
Endorsements by Third Parties.
(1) Testimonials
used in advertisements must be genuine; represent the current opinion of the author;
be applicable to the policy advertised, if any; and be accurately reproduced. In
using a testimonial the insurer makes as its own all of the statements contained
therein and such statements are subject to all the provisions of these
regulations.
(2) If the individual
making a testimonial or an endorsement has a financial interest in the insurer or a
related entity as a stockholder, director, officer, employee or otherwise, or
receives any benefit directly or indirectly other than required union scale wages,
such fact shall be disclosed in the advertisement.
(3) An advertisement shall not state or imply that
an insurer or a policy has been approved or endorsed by a group of individuals,
society, association or other organization unless such is the fact and unless any
proprietary relationship between an organization and the insurer is disclosed. If
the entity making the endorsement or testimonial is owned, controlled or managed by
the insurer, or receives any payment or other consideration from the insurer for
making such endorsement or testimonial, such fact shall be disclosed in the
advertisement.
(l) An
advertisement shall not contain statistical information relating to any insurer or
policy unless it accurately reflects recent and relevant facts. The source of any
such statistics used in an advertisement shall be identified therein.
(m) Introductory, Initial or Special Offers and
Enrollment Periods.
(1) An advertisement of an
individual policy or combination of such policies shall not state or imply that such
policy or combination of such policies is an introductory, initial or special offer,
or that applicants will receive substantial advantages not available at a later
date, or that the offer is available only to a specified group of individuals,
unless such is the fact. An advertisement shall not describe an enrollment period as
"special" or "limited" or use similar words or phrases in describing it when the
insurer uses successive enrollment periods as its usual method of marketing its
policies.
(2) An advertisement shall not
state or imply that only a specific number of policies will be sold or that a time
is fixed for the discontinuance of the sale of the particular policy advertised
because of special advantages available in the policy.
(3) An advertisement shall not offer a policy
which utilizes a reduced initial premium rate in a manner which overemphasizes the
availability and the amount of the reduced initial premium. When an insurer charges
an initial premium that differs in amount from the amount of the renewal premium
payable on the same mode, all references to the reduced initial premium shall be
followed by an asterisk or other appropriate symbol which refers the reader to that
specific portion of the advertisement which contains the full rate schedule for the
policy being advertised.
(4) An
enrollment period during which a particular insurance policy may be purchased on an
individual basis shall not be offered within this State unless there has been a
lapse of not less than three months between the close of the immediately preceding
enrollment period for the same policy and the opening of the new enrollment period.
The advertisement shall specify the date by which the applicant must mail the
application, which shall be not less than ten days and not more than forty days from
the date of which such enrollment period is advertised for the first time. This rule
applies to all advertising media, i.e., mail, newspapers, radio, television,
magazines and periodicals, used by any one insurer. The phrase "any one insurer"
includes all the affiliated companies of a group of insurance companies under common
management or control. This rule does not apply to the use of a termination or
cutoff date beyond which an individual application for a guaranteed issue policy
will not be accepted by an insurer in those instances where the application has been
sent to the applicant in response to his/her request. It is also inapplicable to
solicitations of employees or members of a particular group or association which
otherwise would be eligible under specific provisions of the Insurance Code for
group, blanket or franchise insurance. In cases where an insurance product is
marketed on a direct mail basis to prospective insureds by reason of some common
relationship with a sponsoring organization, this rule shall be applied separately
to each such sponsoring organization.
(n) An advertisement of a particular policy shall
not state or imply that prospective insureds shall be or become members of a special
class, group or quasi-group and as such enjoy special rates, dividends or
underwriting privileges, unless such is the fact.
(o) An advertisement shall not make unfair or
incomplete comparisons of policies, benefits, dividends or rates of other insurers.
An advertisement shall not falsely or unfairly describe other insurers, their
policies, services or methods of marketing.
