Current through Register Vol. 48, No. 18,
September 15, 2023
PURPOSE: This rule explains the practice which must
be followed by insurance producers who sell or present plans of life insurance
to college students. This rule was adopted pursuant to the provisions of
section
374.045,
RSMo and implements section
375.936,
RSMo.
(1) The rule and
procedures following will apply to all insurers, and insurance producers who
sell or present plans of college life insurance to undergraduates and graduate
students throughout Missouri:
(A) If the
applicant is a minor and executes a promissory note for the payment of any part
of the premiums, the note must be cosigned by the applicant's parent, legal
guardian or adult spouse;
(B) The
application form for the coverages must recite the terms of any promissory note
executed in connection with the coverages, showing the amount of the note, the
balance due, the payment provisions and any credit to reflect the down payment,
the down payment being required by this rule;
(C) If a note is taken to finance less than
the full first year premium, the balance must be paid by the applicant at the
time the application is taken;
(D)
Down payments shall be made in cash or by check and may not be paid or advanced
by the producing insurance producer;
(E) A copy of the note must be attached to
the policy at the time of delivery. Delivery must be in person by a company
representative. In the event that personal delivery is for good reason
impractical, delivery may be made by use of United States certified mail,
return receipt requested and delivery to addressee only;
(F) Upon delivery, a policy receipt or
acceptance form must be executed which recites that-
1. The policy has been issued as represented;
and
2. The insured acknowledges
and understands the provisions and obligations of the financial indebtedness
that s/he has incurred;
(G) The receipt or acceptance form mentioned
in subsection (1)(F) shall be registered by a number corresponding to the
policy number in the home office; the forms shall not be distributed to field
representatives or insurance producers but are to be furnished from and by the
home office when sending the policy to the producing insurance
producer;
(H) If the promissory
note of the insured is sold or discounted to a third party by either the
company or the insurance producer, the transferor must inform the insured of
the sale or transfer within thirty (30) days of same. The notice may invite
questions as to whether the terms and conditions for payment are modified, but
if applicable, must explain that the policy is security for payment for the
note;
(I) Whenever insurance of
this type replaces existing life insurance, either wholly or partially,
20 CSR
400-5.400 must be strictly observed;
(J) Insurance producers or field
representatives of the company who are licensed by this state to represent the
company as licensed life insurance producers may not represent, refer to or
hold themselves out to the public under any special title or as representatives
of any special policy or company unless they identify themselves as licensed
insurance producers. No person other than a licensed insurance producer shall
participate in the transaction, solicitation or effectuation of life insurance
with respect to college students in this state;
(K) Any insured may cancel his/her
obligations under the policy of insurance or the promissory note connected with
the policy of insurance within fourteen (14) days from the delivery of the
policy; a provision advising the insured of same shall be placed in the notices
now required by subsection (1)(F) of this rule. Upon the cancellation, the
insured shall be entitled to a full refund of premium paid; and
(L) Notwithstanding the provisions of
subsection (1)(K) of this rule, if the Department of Commerce and Insurance
determines, after a prompt and fair investigation, that the company or its
insurance producers have violated this rule or materially misrepresented the
contract, the policy issued will be cancelled, the applicant released from all
obligations and a total refund made of partial or down payments.
(2) The following practices are
deemed deceptive and misleading and, if proven after the hearing required by
section
375.940,
RSMo, shall subject the insurer to the penalties provided by law: Violations by
insurance producers listed in this rule shall subject them to the penalties now
contained in section
375.141,
RSMo.
(A) Telling or informing an applicant,
either directly or indirectly, that s/he will receive the first or other year
of insurance free of charge;
(B)
Representing that the cash or surrender value of the policy actually sold is
greater than it is; or
(C) Making
any other untrue or misleading representation about the coverage or the terms
and condition for payment for the coverage.
AUTHORITY: sections
374.045
and
375.936,
RSMo 2000.* This rule was previously filed as 4 CSR 190-13.070. Original rule
filed Jan. 2, 1970, effective Jan. 15, 1970. Amended: Filed June 12, 1970,
effective July 1, 1970. Amended: Filed Aug. 5, 1974, effective Aug. 15, 1974.
Amended: Filed July 12, 2002, effective Jan. 30, 2003. Non-substantive change
filed Sept. 11 , 2019, published Oct. 31, 2019.
*Original authority: 374.045, RSMo 1967, amended 1993, 1995
and 375.936, RSMo 1959, amended 1967, 1969, 1971, 1976, 1978, 1983,
1991.
