Current through August 26, 2024
(1) PURPOSE. The
purpose of this rule is to establish minimum standards for legibility,
coherence and understandability in consumer insurance policies delivered or
issued for delivery in the state of Wisconsin on or after the effective dates
stipulated in sub. (8). Sections of statutes interpreted or implemented by this
rule are ss.
631.20(2) (a) and
631.22,
Stats.
(2) SCOPE. This rule shall
apply to "consumer insurance policies" as defined in sub. (3) and not exempted
under sub. (5).
(3) DEFINITIONS.
(a) In this section "consumer insurance
policy" means a life, disability, property or casualty insurance policy, or a
certificate or a substitute for a certificate for group life, disability,
property or casualty insurance coverage, which is issued to a person for
personal, family or household purpose and a copy of which is customarily, in
the insurance industry, delivered or is required by law, rule or agreement to
be delivered to the person obtaining insurance coverage.
(b) The term "text" as used in this section
shall include all printed or electronic matter except the following:
1. The name and address of the insurer; the
name, number or title of the consumer insurance policy; the table of contents
or index; captions and subcaptions; specification pages, schedules or tables;
and
2. Any such form language that
is drafted to conform to the requirements of any federal law, regulation or
agency interpretation; any form language required by any collectively bargained
agreement; any medical terminology; any words which are defined in the form;
and any form language required by state law or regulation; provided, however,
the insurer identifies the language or terminology excepted by this subdivision
and certifies, in writing to the commissioner, that the language or terminology
is entitled to be excepted by this subdivision.
(4) MINIMUM STANDARDS.
(a) In addition to any other requirements of
law, no consumer insurance policy, unless excepted under sub. (5), shall be
delivered or issued for delivery in this state on or after the dates such forms
must be approved under this section, unless:
1. The text achieves a minimum score of 50
for those policies labeled as Medicare supplement policies as defined by s.
Ins 3.39 and a minimum score of 40 for all other policies
included under this rule, on the Flesch reading ease test as described in par.
(b), or an equivalent score on any other comparable test as provided in par.
(c) or this subsection unless a lower score is authorized under sub.
(7);
2. It is printed, except for
specification pages, schedules and tables, in not less than 10 point type, one
point leaded;
3. It is
appropriately divided and captioned, presented in a meaningful sequence, and
the style, arrangement and overall appearance of the policy enhance its
understandability;
4. It contains a
table of contents or an index of the principal sections of the policy if the
policy contains more than 3,000 words or if the policy has more than 3
pages;
5. It contains a single
section listing exclusions or the exclusions are listed within the form and
given at least equal prominence including same type size;
6. It defines words and expressions which are
not commonly understood, or whose commonly understood meaning is not
intended;
7. Cross-referencing
between sections of the policy is maintained at a minimum.
(b) For the purpose of this section, a Flesch
reading ease test score shall be measured by the following method:
1. For consumer insurance policies containing
10,000 words or less of text, the entire form shall be analyzed. For such forms
containing more than 10,000 words, the readability of two 200-word samples per
page may be analyzed instead of the entire form. The samples shall be separated
by at least 20 printed lines.
2.
The number of words and sentences in the text shall be counted and the total
number of words divided by the total number of sentences. The figure obtained
shall be multiplied by a factor of 1.015.
3. The total number of syllables shall be
counted and divided by the total number of words. The figure obtained shall be
multiplied by a factor of 84.6.
4.
The sum of the figures computed under subds. 2. and 3. subtracted from 206.835
equals the Flesch reading ease score for the consumer insurance
policy.
5. For purposes of subds.
2., 3., and 4., the following procedures shall be used:
a. A contraction, hyphenated word, or numbers
and letters, when separated by spaces, shall be counted as one word;
b. A unit of words ending with a period,
semicolon, or colon, but excluding headings and captions, shall be counted as a
sentence; and
c. A syllable means a
unit of spoken language consisting of one or more letters of a word as divided
by an accepted dictionary. Where the dictionary shows 2 or more equally
acceptable pronunciations of a word, the pronunciation containing fewer
syllables may be used.
6. The title or name of a state or federal
government organization or regulatory entity that is required to be used within
the policy form may be excluded from the Flesch readability score.
(c) Any other reading test may be
approved by the commissioner for use as an alternative to the Flesch reading
ease test if it is comparable in result to the Flesch reading ease
test.
(5) EXEMPTIONS.
This section does not apply to:
(a) Any policy
that is a security subject to federal jurisdiction;
(b) Any group policy; however, this shall not
exempt any certificate issued pursuant to a group policy delivered or issued
for delivery in this state;
(c) Any
group annuity contract that serves as a funding vehicle for pension,
profit-sharing or deferred compensation plans;
(d) Renewal policies whose terms are not
altered in any way. Changes in premium, monetary limits or language required by
federal and state laws and regulations adopted after the effective date of this
rule are not alterations under this section.
(e) Any form used in exchange, pursuant to a
contractual provision, for an individual life policy delivered or issued for
delivery on a form approved prior to the date that the form must be approved
under this section.
(6)
CERTIFICATION. Filings subject to this section shall be accompanied by a
certificate signed by an officer of the insurer stating that it meets the
minimum reading ease score or stating that the score is lower than the minimum
required but should be approved in accordance with sub. (7). The actual
readability score for each form shall be stated in the cover letter or as a
data element in an electronic filing and the insurer shall fully identify the
method or computer program used to determine the readability score. To confirm
the accuracy of any certification, the commissioner may require the submission
of further information to verify the certification in question.
(7) POWERS OF THE COMMISSIONER. The
commissioner may authorize a lower score than the Flesch reading ease score
required in sub. (4) (a) 1., whenever, at the sole discretion of the
commissioner, it is found that a lower score: will provide a more accurate
reflection of the understandability of a consumer insurance policy; is
warranted by the nature of a particular form or type or class of such forms; or
is caused by certain language which is drafted to conform to the requirements
of any state law, rule or commissioner's interpretation.
(8) EFFECTIVE DATE.
(a) This section shall apply to the following
consumer insurance policies no later than 6 months after December 1, 1980:
1. Private passenger automobile.
2. Homeowners,
3. Dwelling fire,
4. Individual disability excluding disability
income,
5. Medicare
supplement,
6. Individual life and
annuity.
(b) This
section shall apply to the following consumer insurance policies no later than
12 months after December 1, 1980.
1. Renewal
policies with altered terms,
2.
Group disability certificates,
3.
Disability income,
4. All consumer
insurance policies not included under pars. (a) and (c) of this
subsection.
(c) This
section shall apply to all Town Mutual insurers and also other insurers whose
written premiums for the most recent calendar year did not exceed $500,000
statewide, no later than 18 months after December 1, 1980, regardless of the
requirements under pars. (a) and (b).
(d) Any consumer insurance policy that has
been approved prior to the effective date of this rule and meets the standards
set by this rule need not be refiled for approval but may continue to be
lawfully delivered or issued for delivery in this state upon the filing with
the commissioner of a list of the forms and accompanied by a certificate for
each form in the manner provided in sub. (6).
(e) The dates in pars. (a), (b), (c) and (d)
may be extended at the commissioner's sole discretion, but not beyond May 8th,
1982.
The treatment of s. Ins 6.07 by CR 10-076 first apply to
policies issued or renewed eight months following February 1, 2011.