Current through Register Vol. 56, No. 24, December 18, 2024
(a) All
information required to be disclosed by this subchapter shall be set out
conspicuously and in close conjunction with the statements to which such
information relates or under appropriate captions of such prominence that it
shall not be minimized, rendered obscure, or presented in an ambiguous fashion,
or intermingled with the context of the advertisements 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.
(c) 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.
(d) An advertisement for a policy with
non-level premiums shall prominently describe the premium changes.
(e) Advertisements referring to dividends
must comply with the following requirements:
1. An advertisement shall not utilize or
describe dividends in a manner which is misleading or has the capacity or
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 illustration 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; and
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:
i. What benefits or coverage would be
provided at such time; and
ii.
Under what conditions this would occur.
(f) An advertisement shall not state a
purchaser of a policy will share in or receive a stated percentage or portion
of the earnings on the general assets of the company.
(g) In the event an advertisement uses
"Non-Medical," "No-Medical Examination Required," or similar terms where
issuance of a policy is not guaranteed, such terms shall be accompanied by
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.
(h) 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 that it is life insurance.
(i) An advertisement shall prominently
describe the type of policy advertised, such as group, term, whole life,
etc.
(j) An advertisement of an
insurance policy marketed by direct response techniques, such as direct mail or
toll-free telephone, shall not state or imply that because there is no agent or
commission involved there will be a cost saving to prospective purchasers
unless such is the fact. No such cost savings may be stated or implied without
justification satisfactory to the Commissioner. Such justification must be
available to the Commissioner upon request.
(k) Endorsements by third parties must comply
with the following requirements:
1.
Endorsements used in advertisements shall be genuine, represent the current
opinion of the author, be applicable to the policy advertised and be accurately
reproduced. The insurer, in using an endorsement, adopts as its own all of the
statements contained therein, and the advertisement, including such statements,
shall be subject to all of the provisions of this subchapter.
2. A person shall be a "spokesperson" if
either his or her image, voice or words are used in making an endorsement and
if the person:
i. Has a financial interest in
the insurer or a related entity as a stockholder, director, officer, employee
or otherwise;
ii. Is an entity
formed by the insurer, or is owned or controlled by the insurer, its employees,
or the person or persons who own or control the insurer;
iii. Is in a policymaking position and is
affiliated with the insurer in any of the capacities in (k)2i and ii above;
or
iv. Is in any way directly or
indirectly compensated for making the endorsement.
3. Any person acting as a spokesperson as
defined in (k)2 above, who acts as or holds himself or herself out to be an
insurance producer as defined at
N.J.S.A. 17:22A-28, and who is required to
have a license pursuant to
N.J.S.A. 17:22A-29, shall be considered to
be an insurance producer and shall be required to be licensed pursuant to and
shall submit to the requirements of
N.J.S.A. 17:22A-26 et seq. and any
implementing rules.
4. Where,
pursuant to (k)3 above, a spokesperson required to be licensed as an insurance
producer is not licensed as an insurance producer, the advertisement shall
include, in the manner prescribed by (k)5 below, the following statement: "This
offer is not available in New Jersey." The requirements of this paragraph shall
apply to cases where the advertisement originates in or emanates from another
state but is received or appears in New Jersey and to advertisements which
originate in or emanate from New Jersey.
5. The fact of a financial interest, or the
proprietary or representative capacity of a spokesperson, shall be disclosed in
an advertisement. In both television and radio advertising, the disclosure
shall be spoken by the spokesperson and, in the case of television, visually
presented consistent with the requirements for print advertising in this
subsection. In print advertising, the disclosure shall be presented in a type
style and size that is at least equal to the largest type otherwise used in the
advertisement. The disclosure required by this paragraph shall be accomplished
in the introductory portion of the endorsement and shall be given
prominence.
6. If a spokesperson is
directly or indirectly compensated for making an endorsement, such fact shall
be disclosed by use of the phrase "This is a Paid Endorsement" or by words of
similar meaning in the manner provided by (k)5 above. The requirements of this
paragraph do not apply where the spokesperson is a company officer, a company
director or an employee who is paid generally, but not specifically, for making
the advertisement.
7. The
disclosure requirements of this subchapter shall not apply where the sole
financial interest or compensation of a spokesperson, for all endorsements made
on behalf of the insurer, consists of the payment of union "scale" wages
required by union rules, and if the payment is actually for such "scale" for
television or radio performances.
8. An advertisement shall not state or imply
that an insurer, policy or contract, or any type or line of insurance has been
approved or endorsed by any individual, group of individuals, society,
association, organization, governmental agency or other entity, unless such is
the fact and any proprietary relationship between such individual(s) or entity
and the insurer is disclosed and the prior written approval of the individual,
group of individuals, society, association, organization, governmental agency
or other person has been secured. Prior written approval shall not be required
in cases where the endorsing individual is a company officer, company director
or employee.
9. If the person
making the endorsement in (k)8 above has been formed by the insurer or is
owned, or controlled by the insurer, or the person or persons who own or
control the insurer, such fact shall be disclosed in the advertisement. If the
insurer or an officer of the insurer formed or controls the association, or
holds any policymaking position in the association, that fact shall also be
disclosed.
10. When an endorsement
refers to benefits received under a policy for a specific claim, the claim
date, including claim number, date of loss and other pertinent information
shall be retained by the insurer for inspection until the completion by the
Department of the next market conduct examination of the insurer.
11. Endorsements which do not correctly
reflect the present practices of the insurer or which are not applicable to the
policy or benefits being advertised shall not be used.
12. An advertisement shall not state or imply
that an insurer or a policy has been approved or an insurer's financial
condition has been examined and found to be satisfactory by a governmental
agency unless such is the fact and without prior written approval.
(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) Advertisements
referring to introductory, initial, or special offers and enrollment periods
must comply with the following requirements:
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, 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; and
4. An enrollment period during which a
particular insurance policy may be purchased on an individual basis shall not
be offered in New Jersey unless there has been a lapse of not less than three
months between the close of the immediately preceding enrollment period. The
advertisement shall specify the date by which the applicant must mail the
application, which shall be not less than 10 days and not more than 40 days
from the date on which such enrollment period is advertised for the first time.
i. Paragraph (m)4 above applies to all
advertising media, that is, mail, newspapers, radio, television, magazines, and
periodicals, 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.
ii. Paragraph (m)4
above 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 or her request.
iii. Paragraph (m)4 above 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
New Jersey insurance laws for group or blanket insurance.
iv. In cases where an insurance product is
marketed on a direct basis to prospective insureds by reason of some common
relationship with a sponsoring organization, this rule shall be applied
separately to each 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.
(p) On transactions
involving the sale of annuities that are subject to the provisions of
N.J.S.A. 17B:25-34 et seq., insurers and
producers shall comply with all such provisions and with N.J.A.C. 11:4-59,
regarding disclosure requirements, and with N.J.A.C. 11:4-59A, regarding
suitability requirements, for such annuities.
