Current through Vol. 24-04, March 15, 2024
Rule 7.
(1) The
information required to be disclosed by these rules 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.
(2) An advertisement shall not omit material
information or use words, phrases, statements, references, or illustrations if
such omission or such use is misleading or deceptive to 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.
(3) If an advertisement
uses terms or phrases such as "Non-Medical" or "No Physical Examination
Required" or uses similar terms or phrases and if issue is not guaranteed, such
terms or phrases shall be accompanied by a further disclosure of equal
prominence and nearby to the effect that issuance of the policy will depend
upon answers to health questions contained in the application, if such is the
fact.
(4) An advertisement shall
not use as the name or title of a life insurance policy any phrase which does
not include the words "life insurance," unless accompanied by other language
clearly indicating it is life insurance.
(5) An advertisement shall prominently
describe the type of policy advertised.
(6) An advertisement of an insurance policy
marketed by direct response technique shall not state or imply that because
there is no agent or commission involved there will be cost savings to
prospective purchasers, unless such is the fact.
(7) 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 coverage changes shall be prominently disclosed.
(8) An advertisement for a policy with
non-level premiums shall prominently describe the premium changes.
(9) All of the following provisions apply
with respect to dividends:
(a) An
advertisement shall not utilize or describe dividends in a manner which is
misleading.
(b) An advertisement
shall not state or imply that the payment or amount of dividends is guaranteed.
If dividends are illustrated, they shall be based on the insurer's current
dividend scale, and the illustration shall contain a statement to the effect
that they are not be construed as guarantees or estimates of dividends to be
paid in the future.
(c) An
advertisement shall not state or imply that illustrated dividends under a
participating policy or pure endowments, or both, 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 what benefits or coverage would be provided at such time
and under what conditions this would occur.
(d) If level benefit insurance is contingent
upon dividends providing term insurance or paid-up insurance, or both, any
advertisement or illustration shall disclose that insufficient or not dividends
will either cause a reduction or elimination of supplemental coverage or that
additional premium will be required to keep the original death benefit amount
in force.
(10) An
advertisement shall not state or imply 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.
(11)
An advertisement shall not contain statistical information relating to any
insurer or policy unless it accurately reflects recent and relevant facts and
is sufficiently complete and clear so as not to be misleading.The source of any
such statistics used in an advertisement shall be identified therein.
(12) All of the following provisions apply
with respect to introductory, initial, or special offers and enrollment
periods:
(a) 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.
(b) 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, unless such is the
fact.
(c) An enrollment period
during which a particular insurance policy may be purchased on an individual
basis shall not be advertised within this state unless there has been a lapse
of not less than 3 months between the close of the immediately preceding
enrollment period for the same policy and the opening of the new enrollment
period, but not more than twice in any calendar year. The advertisement shall
specify the date by which the applicant shall mail the application, which shall
be not less 10 days and not more than 40 days from the date on which such
enrollment period is advertised for the first time. This rule applies to all
advertising by any 1 insurer, which 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 set to the applicant in response
to the applicant's request. It is also inapplicable to solicitation by the
group policyholder of employees or members of a particular group or association
which otherwise would be eligible under specific provisions of Act No. 218 of
the Public Acts of 1956, as amended, being S500.100 et seq. of the Michigan
Compiled Laws, for group 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 sponsoring organization.
(13) An advertisement of a particular policy
shall not state or imply that prospective insureds shall be or become members
of a special class or group and as such enjoy special rates, dividends, or
underwriting privileges, unless such is the fact.
(14) 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 or their policies, services, or methods of marketing.
(15) For individual deferred annuity products
or deposit funds, excluding variable annuities and investment annuities, all of
the following provisions shall apply:
(a) Any
illustrations or statements containing or based upon interest rates higher than
the guaranteed accumulation interest rates shall set forth with equal
prominence comparable illustrations or statements containing or based upon the
guaranteed accumulation interest rates. Such higher interest rates shall not be
greater than those currently being credited by the company unless such higher
rates have been publicly declared by the company with an effective date for new
issues not more than 3 months subsequent to the date of declaration. Any
illustrations shall be based on gross premiums.
(b) If an advertisement illustrates or states
premiums, net interest rates, or accumulative values, the actual relationship
between the net and gross premium shall be disclosed in close proximity thereto
and with equal prominence, describing the first year and renewal charges,
including, but not limited to, expenses and annual contract, collection, and
mortality charges.
(c) If any
contract does not provide a cash value or return of premium benefit due to
surrender or death prior to the commencement of payment of any annuity benefit,
any illustration or statements concerning such contracts shall prominently
state that these benefits are not provided.Return of premium or cash value
shall not be referred to as a death benefit.
