California Code of Regulations
Title 10 - Investment
Chapter 5 - Insurance Commissioner
Subchapter 3 - Insurers
Article 12 - Disability Insurance Advertisements
Section 2536.11 - Introductory, Initial or Special Offers

The advertisement shall indicate 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 that such enrollment period is advertised for the first time. This 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 is 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 selected group (franchise) insurance.

GUIDELINE 2536.11(a)(2)

This Subsection restricts the repetitive use of enrollment periods. The requirement of reasonable closing dates and waiting periods between enrollment periods was adopted to eliminate the abuses which formerly existed. This rule does not limit just the use of enrollment periods. It requires that a particular insurance product offered in an enrollment period through any advertising media, including the prepared presentations of agents, cannot be offered again in a specified geographical area in this State until three months from the close of the enrollment period have expired. Thus, an insurer must choose whether to use enrollment periods or open enrollment for a product. (See Subsection 2536.11(a)(4) for definition of "a particular insurance product.")

This Subsection gives an insurer the option of applying the three month rule on a state-wide basis or on the basis of the geographical areas specified therein.

This Subsection does not prohibit multiple advertising during an enrollment period through any and all media published or transmitted within a specified geographical area in this state as long as the enrollment periods for all such advertisements have the same expiration date.

This Subsection does not prohibit the solicitation of members of a group or association for the same product even though there has not been a lapse of three months since the close of a preceding enrollment period which was open to the general public for the same product.

This Subsection does not require separation by three months of enrollment periods for the same insurance product in this state if the advertising material is directed by an admitted insurer to persons by direct mail on the basis that a common relationship exists with an entity, such as a bank and its depositors, a department store and its charge account customers or an oil company and its credit card holders, and more than one of such organizations is sponsoring such insurance product at different times if providing such insurance under such a method is not otherwise prohibited by law; provided, however, the three month rule does apply to one specific sponsor and the same persons in a specified geographical area in this state on the basis of their status as customers of that one specific entity only.