Current through September 18, 2024
A. The information
required to be disclosed by this regulation 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.
B. An advertisement shall not omit material
information or use words, phrases, statements, references or illustrations if
the omission or 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, Life Insurance
Advertising 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 or that the policy or contract includes a "free
look" period that satisfies or exceeds regulatory requirements, does not remedy
misleading statements.
C. In the
event an advertisement uses "non-medical," "no medical examination required,"
or similar terms where issue is not guaranteed, terms shall be accompanied by a
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 set forth in the application.
D. An advertisement shall not use as the name
or title of a life insurance policy any phrase that does not include the words
"life insurance" unless accompanied by other language clearly indicating it is
life insurance. An advertisement shall not use as the name or title of an
annuity contract any phrase that does not include the word "annuity" unless
accompanied by other language clearly indicating it is an annuity. An annuity
advertisement shall not refer to an annuity as a CD annuity, or deceptively
compare an annuity to a certificate of deposit.
E. An advertisement shall prominently
describe the type of policy advertised.
F. An advertisement of an insurance policy
marketed by direct response techniques shall not state or imply that because
there is no insurance producer or commission involved there will be a cost
saving to prospective purchasers unless that is the fact. No cost savings may
be stated or implied without justification satisfactory to the commissioner
prior to use.
G. An advertisement
for a life insurance 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, that fact shall be
commonly disclosed. An advertisement of or for a life insurance policy under
which the death benefit varies with the length of time the policy has been in
force shall accurately describe and clearly call attention to the amount of
minimum death benefit under the policy.
H. An advertisement for the types of policies
described in Subsections F and G of this section shall not use the words
"inexpensive," "low cost," or other phrase or words of similar import when the
policies being marketed are guaranteed issue.
I. Premiums
1. An advertisement for a policy with
non-level premiums shall prominently describe the premium changes.
2. An advertisement in which the insurer
describes a policy where it reserves the right to change the amount of the
premium during the policy term, but which does not prominently describe this
feature, is deemed to be deceptive and misleading and is prohibited.
3. An advertisement shall not contain a
statement or representation that premiums paid for a life insurance policy can
be withdrawn under the terms of the policy. Reference may be made to amounts
paid into an advance premium fund, which are intended to pay premiums at a
future time, to the effect that they may be withdrawn under the conditions of
the prepayment agreement. Reference may also be made to withdrawal rights under
any unconditional premium refund offer.
4. An advertisement that represents that a
pure endowment benefit has a "profit" or "return" on the premium paid, rather
than a policy benefit for which a specified premium is paid is deemed to be
deceptive and misleading and is prohibited.
5. An advertisement shall not represent in
any way that premium payments will not be required for each year of the policy
in order to maintain the illustrated death benefits, unless that is the
fact.
6. An advertisement shall not
use the term "vanish" or "vanishing premium," or a similar term that implies
the policy becomes paid up, to describe a plan using nonguaranteed elements to
pay a portion of future premiums.
J. Analogies between a life insurance policy
or annuity contract's cash values and savings accounts or other investments and
between premium payments and contributions to savings accounts or other
investments shall be complete and accurate. An advertisement shall not
emphasize the investment or tax features of a life insurance policy to such a
degree that the advertisement would mislead the purchaser to believe the policy
is anything other than life insurance.
K. An advertisement shall not 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.
L. If nonforfeiture values are shown in any
advertisement, the values must be shown either for the entire amount of the
basic life policy death benefit or for each $1,000 of initial death
benefit.
M. The words "free," "no
cost," "without cost," "no additional cost, "at no extra cost," or words of
similar import shall not be used with respect to any benefit or service being
made available with a policy unless true. If there is no charge to the insured,
then the identity of the payor shall be prominently disclosed. An advertisement
may specify the charge for a benefit or a service or may state that a charge is
included in the premium or use other appropriate language.
N. No insurance producer may use terms such
as "financial planner," "investment adviser," "financial consultant," or
"financial counseling" in such a way as to imply that he or she is generally
engaged in an advisory business in which compensation is unrelated to sales
unless that actually is the case. This provision is not intended to preclude
persons who hold some form of formal recognized financial planning or
consultant designation from using this designation even when they are only
selling insurance. This provision also is not intended to preclude persons who
are members of a recognized trade or profession association having such terms
as part of its name from citing membership, providing that a person citing
membership, if authorized only to sell insurance products, shall disclose that
fact. This provision does not permit persons to charge an additional fee for
services that are customarily associated with the solicitation, negotiation or
servicing of policies.
O.
Nonguaranteed Elements
1. An advertisement
shall not utilize or describe nonguaranteed elements in a manner that is
misleading or has the capacity or tendency to mislead.
2. An advertisement shall not state or imply
that the payment or amount of nonguaranteed elements is guaranteed. Unless
otherwise specified in 230-RICR- 20-25-14, if nonguaranteed elements are
illustrated, they shall be based on the insurer's current scale and the
illustration shall contain a statement to the effect that they are not to be
construed as guarantees or estimates of amounts to be paid in the
future.
3. Unless otherwise
specified in 230-RICR- 200-25-14, an advertisement that includes any
illustrations or statements containing or based upon nonguaranteed elements
shall set forth, with equal prominence comparable illustrations or statements
containing or based upon the guaranteed policy elements.
4. An advertisement shall not use or describe
determinable policy elements in a manner that is misleading or has the capacity
or tendency to mislead.
5.
Advertisement may describe determinable policy elements as guaranteed but not
determinable at issue. This description should include an explanation of how
these elements operate, and their limitations, if any.
6. If an advertisement refers to any
nonguaranteed policy element, it shall indicate that the insurer reserves the
right to change any such element at any time and for any reason. However, if an
insurer has agreed to limit this right in any way; such as, for example, if it
has agreed to change these elements only at certain intervals or only if there
is a change in the insurer's current or anticipated experience, the
advertisement may indicate any such limitation on the insurer's
right.
7. An advertisement shall
not refer to dividends as "tax-free" or use words of similar import, unless the
tax treatment of dividends is fully explained and the nature of the dividend as
a return of premium is indicated clearly.
8. An advertisement may not state or imply
that illustrated dividends under either or both a participating policy or pure
endowment will be or can be sufficient at any future time to assure without the
future payment of premiums, the receipt of benefits, such as a paid-up policy,
unless the advertisement clearly and precisely explains the benefits or
coverage provided at that time and the conditions required for that to
occur.
P. An
advertisement shall not state 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.
Q.
Testimonials, Appraisals, Analysis, or Endorsements by Third Parties
1. Testimonials, appraisals or analysis used
in advertisements must be genuine; represent the current opinion of the author;
be applicable to the policy advertised, if any; and be accurately reproduced
with sufficient completeness to avoid misleading or deceiving prospective
insureds as to the nature or scope of the testimonial, appraisal, analysis or
endorsement. In using testimonials, appraisals or analysis; the insurer or
insurance producer makes as its own all the statements contained therein, and
these statements are subject to all the provisions of this
regulation.
2. If the individual
making a testimonial, appraisal, analysis or an endorsement has a financial
interest in the insurer or related entity as a stockholder, director, officer,
employee or otherwise, or receives any benefit directly or indirectly other
than required union scale wages, that fact shall be prominently disclosed in
the advertisement.
3. An
advertisement shall not state or imply that an insurer or a policy has been
approved or endorsed by a group of individuals, society, association or other
organization unless such is the fact and unless any proprietary relationship
between an organization and the insurer is disclosed. If the entity making the
endorsement or testimonial is owned, controlled or managed by the insurer, or
receives any payment or other consideration from the insurer for making an
endorsement or testimonial, that fact shall be disclosed in the
advertisement.
4. 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 for a period of
five (5) years after the discontinuance of its use or publication.
R. 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 statistics
used in advertisement shall be identified.
S. Policies Sold to Students
1. The envelope in which insurance
solicitation material is contained may be addressed to the parents of students.
The address may not include any combination of words which imply that the
correspondence is from a school, college, university or other education or
training institution nor may it imply that the institution has endorsed the
material or supplied the insurer with information about the student unless such
is a correct and truthful statement.
2. All advertisements including, but not
limited to, informational flyers used in the solicitation of insurance shall be
identified clearly as coming from an insurer or insurance producer, if such is
the case, and these entities shall be clearly identified as such.
3. The return address on the envelope may not
imply that the soliciting insurer or insurance producer is affiliated with a
university, college, school or other educational or training institution,
unless true.
T.
Introductory, Initial or Special Offers and Enrollment Periods
1. An advertisement of an individual policy
or combination of policies shall not state or imply that the policy or
combination of 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
that 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 that utilizes a reduced initial premium rate in a manner
that overemphasizes the availability and the amount of the reduced initial
premium. A reduced initial or first year premium may not be described as
constituting free insurance for a period of time. When insurer charges an
initial premium that differs in amount from the amount of the renewal premium
payable on the same mode, all references to the reduced initial premium shall
be followed by an asterisk or other appropriate symbol that refers the reader
to that specific portion of the advertisement that contains the full rate
schedule for the policy being advertised.
4. An enrollment period during which a
particular insurance policy may be purchased on an individual basis shall not
be offered within this state unless there has been a lapse of not less than six
months between the close of the immediately preceding enrollment period for the
same policy and the opening of the new enrollment period. The advertisement
shall specify the date by which the applicant must mail the application, which
shall be not less than ten (10) days and not more than forty (40) days from the
date on which the enrollment period is advertised for the first time. This
regulation applies to all advertising media-i.e., mail, newspapers, radio,
television, magazines and periodicals-by any one insurer or insurance producer.
The phrase "any one insurer" includes all the affiliated companies of a group
of insurance companies under common management or control. This regulation 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. It is also inapplicable to solicitations of
employees or members of a particular group or association that otherwise would
be eligible under specified provisions of the insurance code for group, blanket
or franchise insurance. In cases where insurance product is marketed on a
direct mail basis to prospective insurance by reason of some common
relationship with a sponsoring organization, this regulation shall be applied
separately to each sponsoring organization.
U. 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 that is the fact.
V. An advertisement shall not make unfair or
incomplete comparisons of policies, benefits, dividends or rates of other
insurers. An advertisement shall not disparage other insurers, insurance
producers, policies, services or methods of marketing.
W. For individual deferred annuity products
or deposit funds, the following shall apply:
1. Any illustrations or statements containing
or based upon nonguaranteed interest rates shall likewise set forth with equal
prominence comparable illustrations or statements containing or based upon the
guaranteed accumulation interest rates. The nonguaranteed interest rate shall
not be greater than those currently being credited by the company unless the
nonguaranteed rates have been publicly declared by the company with an
effective date for new issues not more than three (3) months subsequent to the
date of declaration.
2. If an
advertisement states the net premium accumulation interest rate, whether
guaranteed or not, it shall also disclose in close proximity thereto and with
equal prominence, the actual relationship between the gross and the net
premiums.
3. If the contract does
not provide a cash surrender benefit prior to commencement of payment of
annuity benefits, an illustration or statement concerning the contract shall
prominently state that cash surrender benefits are not provided.
4. Any illustrations, depictions or
statements containing or based on determinable policy elements shall likewise
set forth with equal prominence comparable illustrations, depictions or
statements containing or based on guaranteed policy elements.
X. An advertisement of a life
insurance policy or annuity that illustrates nonguaranteed values shall only do
so in accordance with current applicable state law relative to illustrating
such values for life insurance policies and annuity contracts.
Y. An advertisement for the solicitation or
sale of a preneed funeral contract or prearrangement as defined in §
5.2(F)
of this Part that is funded or to be funded by a life insurance policy or
annuity contract shall adequately disclose the following:
1. The fact that a life insurance policy or
annuity contract is being used to fund a prearrangement as defined in
§
5.2(F) of this Part; and
2.
The nature of the relationship among the soliciting agent or agents, the
provider of the funeral or cemetery merchandise services, the administrator and
any other person.