Compilation of Rules and Regulations of the State of Georgia
Department 120 - OFFICE OF COMMISSIONER OF INSURANCE, SAFETY FIRE COMMISSIONER AND INDUSTRIAL LOAN COMMISSIONER
Chapter 120-2 - RULES OF COMMISSIONER OF INSURANCE
Subject 120-2-11 - ADVERTISING OF LIFE INSURANCE AND ANNUITY CONTRACTS
Rule 120-2-11-.10 - Misleading Statements, Representations and Illustrations Prohibited

(a) State, represent or imply that a prospective policyholder or certificateholder will receive the right to benefits which are not a part of the policy itself, or made an effective part of the policy by rider or other instrument approved by and on file with the Georgia Insurance Department;

(b) Represent or imply that any financial ratio, illustrative material or advertisement, including pictures, diagrams, charts, projections, or other material, has been approved or sanctioned by the Georgia Insurance Department;

(c) Make or issue any statement or representation that premiums paid are ever withdrawable without reference to the cash surrender value or loan provisions of the policy, or in any manner other than that expressly contained in the policy form, except that premiums paid in advance of the current due date may be withdrawn under the conditions of the prepayment agreement;

(d) State, represent or imply that profits are derived from lapses and surrenders;

(e) Represent that the mere size of a life insurance company or its total insurance in force necessarily affects either the solvency or the reliability of life insurance or annuity policies issued by such insurer;

(f) Make or issue any statement which would lead a prospective buyer or policyholder of life insurance or annuity to believe that he is purchasing stock in an insurance company by acquiring such life insurance or annuity;

(g) Make or issue any statement which will tend to lead a prospective buyer or policyholder to believe that, by purchasing a policy, he will acquire a position similar to that of a stockholder of the company, or make or issue any statement which permits the inference that policyholders are entitled to benefits or profits on the same basis as stockholders;

(h) State or represent that a prospective policyholder will receive dividends, or special or favored treatment in the allowance or payment of dividends, or other monetary benefits not expressly provided in the policy;

(i) Make or issue statements or illustrations of projected future dividends unless the dividend formula or dividend scale upon which such statements or illustrations were made complies with the applicable provisions of the Georgia Insurance Code and the Rules and Regulations of the Georgia Insurance Department;

(j) Make or issue statements indicating that because a prospect has agreed to furnish leads, he is entitled to any specific benefits not available to all policyholders generally;

(k) Represent as a return of premium or as a return of cash surrender value an increasing term insurance provision in any insurance policy, such as an amount of insurance equal to the sum of premiums paid to a certain date, or as an amount of insurance equal to the cash surrender value, as anything other than a guaranteed insurance benefit, a charge for which is included in the premium;

(l) Use a dollar amount or any other figure in printed material to be shown to prospective policyholders unless accompanied by language in such material indicating the nature and source of the figure;

(m) State or imply that a policy contains features or benefits which are not found in other life insurance policies, unless that be true;

(n) Make any reference or statement implying that a policy is sold or issued or is serviced by the investment department of an insurer; and

(o) Use terms such as financial planner, investment advisor, financial consultant, or financial counseling in such a way as to imply that the person who is engaged in the business of insurance is generally engaged in an advisory business in which compensation is unrelated to sales unless such is actually the case. During the solicitation of, negotiation for, or procurement or making of a contract of life insurance or annuity contract, no person may engage, advertise, or render opinions as to the benefits promised under any contract of insurance or offered by any insurer, or as to the terms, value, effect, advantages or disadvantages thereof unless such person is properly licensed in accordance with Chapters 33-23-1 to 33-23-22 of the Georgia Insurance Code. Further, no person engaged in the business of insurance may hold himself out, directly or indirectly, to the public as a financial planner, investment advisor, financial consultant, or financial counselor or as any other specialist engaged in the business of giving complete financial planning advice relating to investments, insurance, real estate, tax matters and trust and estate matters unless such person in fact is generally engaged in such business and does, in fact, render such services. Not included in "such services" is the presentations of computer printouts that fall into the category of advanced programming for the purpose of selling a policy and are routinely provided by insurers or other organizations. Terms such as financial planner, investment advisor, financial consultant, or financial counselor may not be used by a person engaged in the business of insurance where such person provides advice relating to investments, real estate, tax matters and trust and estate matters, which is merely incidental to the conduct of his insurance business.

(a) The basic life policy death benefit must be shown as a single amount, not arbitrarily or deceptively split into two or more parts, implying that there is a relationship between some part of a premium and some part of the death benefit, unless such is the fact and provided the relationship is not for the purpose of nor may likely have the effect of misleading or deceiving an individual.

(b) If nonforfeiture values are shown, they must be shown either for the entire amount of the basic life policy death benefit or for each $1,000 of initial death benefit.

(c) No statement or representation may imply the existence of an actuarial relationship between a specific premium, or portion thereof, and a specific benefit, or portion thereof, provided under a policy where, in fact, none exists. No premiums, or a portion of a premium, may be presented as an "additional," "separate," or "special" premium unless there is an actuarial relationship between such premium, or portion thereof, and some specifically identifiable benefit or portion thereof.

(d) No artificial relationships among interest rates, premiums and benefits or portions thereof, may be implied or created.

(e) No person or advertisement shall state or imply that on the death of the insured, the beneficiary will receive, or should have received, the cash value of a policy in addition to the face amount. This rule is not intended to prohibit the advertising of an increasing term benefit equal to the cash value and for which a premium has been paid.

(f) No person or advertisement shall state or imply in any way that interest charged on a policy loan or the reduction of death benefits by the amount of outstanding policy loans is unfair, inequitable, or in any manner an incorrect or improper practice.

(g) No person or advertisement shall state or imply in a misleading manner that the policy cash value is the policyowner's "savings" or that the policyowner owns the cash value. The use of savings "passbooks" and such similar misleading techniques is prohibited.

(h) Analogies between cash value and savings accounts and between premium payments and contributions to savings accounts are prohibited unless such analogy completely and clearly explains both the similarities and the difference between the items so compared and further, unless it is made clear that such representation is an analogy only and that, in fact, cash values and premium payments are not the same as a savings account and contributions thereto.

(i) No advertising material or oral presentation may make incorrect, misleading or unfair statements about other life insurance products, agents, and insurers.

(j) No advertising shall state or imply that a policy being offered for sale is pure term insurance unless the policy is in fact pure term insurance.

(k) Life insurance policies shall not be compared to savings accounts, stocks, bonds, or any other financial instrument or investment in such a way as to mislead a person as to the true nature of life insurance or life insurance surrender values or other policy benefits.

(l) Advertisements may not imply or state that all older policies are more costly than newer policies or that all newer policies are more costly than older policies unless such is a provable fact.

(m) No advertisement shall imply or state that if a life insurance company becomes insolvent, other companies will always take over the liabilities of the insolvent company.

(n) The use of words such as "deposit," "deposit premium," "investment," or other such misleading or confusing terminology to refer to an amount which is a premium as defined in Section 33-24-1 of the Georgia Insurance Code is prohibited.

(o) A system or presentation which does not recognize the time value of money through the use of appropriate interest adjustments shall not be used for comparing the cost of two or more life insurance policies. Such a system may be used for the purpose of demonstrating the cash-flow pattern of a policy if such presentation is accompanied by a statement disclosing that the presentation does not recognize that, because of interest, a dollar in the future has less value than a dollar today.