| (7) An insurer or agent may not make a billing of a premium for increased coverage or include the cost of increased coverage in the premium for which a billing is made without first disclosing the premium and details of the increased coverage and obtaining the consent of the insured to such increase in coverage. This does not apply to policies that contain provisions providing for automatic increases in benefits or increases in coverages required by law. (8) If the cost of home collection results in a higher premium an advertisement shall state that fact. (i) Dividends. (1) An advertisement may not utilize or describe dividends in a manner that is misleading or has the capacity or tendency to mislead. (2) An advertisement may not state or imply that the payment or amount of dividends is guaranteed. If dividends are illustrated, the dividends must be based on the insurer's current dividend scale and the illustration must contain a statement to the effect that the dividends are not to be construed as guarantees or estimates of dividends to be paid in the future. (3) An insurer or agent may not, as an inducement to purchase insurance, circulate, publish, or otherwise exhibit to any person who is an insured, or prospective insured, any form of director resolution, stockholders resolution, or form of company action stating or implying the action an insurer will take on a declaration of dividend or other matter in the future if the insurer, its directors, or its stockholders are not bound to take the action stated or implied, or if the insurer does not presently have the earnings or other funds or assets to make the payments, or to consummate the transaction in accordance with the appropriate statutes. (j) Compliance with Statutes or Rules as Grounds for Changing Policy. In consideration of the comprehensive content of this division and, among other reasons, the division being applicable to substantially all insurers, an insurer or agent may not, particularly if used as a "twisting" device, inform any policyholder or prospective policyholder that an insurer or agent was required to change a policy or contract form or related material to comply with the provisions of this division or other rules or statutes. (k) Deception or deceptive method as to introductory, initial, or special offers. (1) An advertisement of a particular policy may not state or imply that prospective policyholders become group or quasi-group members that, as such, enjoy special rates or underwriting privileges ordinarily associated with group insurance as recognized in the industry unless such is the fact. (2) If an insured or prospective insured is provided a policy or coverage of insurance and the first premium has not been paid, or an application has not been returned to the insurer or its agents or representatives, the insurer, its agents, or representatives may not make any billing or attempt to collect a premium on such policy until such time as an application or acknowledgment of acceptance is received. If coverage is issued prior to such acceptance, it shall be accompanied by a written statement describing it as follows: (A) giving the facts concerning the delivery of the policy and whether or not the policy was requested by insured; and (B) stating that the insured is under no obligation to pay the insurer if the insured does not want to continue or initiate the coverage; and (C) clearly stating when coverage will be effective. (3) An advertisement may not state or imply that a policy or combination of policies is an introductory, initial, special, or limited offer and that applicants will receive advantages by accepting the offer or that such advantages will not be available at a later date unless it is a fact. An advertisement may not contain phrases describing an enrollment period as "special," "limited," or similar words or phrases if the insurer uses such enrollment periods as the usual method of advertising insurance. (A) An enrollment period during which "a particular insurance product" may be purchased may not be offered within this state unless there has been a lapse of not less than three months between the close of the immediately preceding enrollment period for the same product and the opening of the new enrollment period. The advertisement shall indicate the date by which the applicant must mail the application which date may not be less than 10 days and not more than 40 days from the date that such enrollment period is advertised for the first time. (It is emphasized that this section is applicable to all advertisements as defined in §21.102(1) of this division (relating to Scope)). This subparagraph is inapplicable to solicitation of employees or members of a particular group, except that this subparagraph shall apply to the solicitation of members of an association group, which otherwise would be eligible under specific provisions of the Insurance Code for group, blanket, or franchise insurance. This section applies to all affiliated companies under common management or control. The phrase "a particular insurance product" is used here to describe an insurance policy which provides substantially different benefits than those contained in any other policy. Different terms of renewability, an increase or decrease in the dollar amounts of benefits, or an increase or decrease in any elimination period or waiting period from those available during an enrollment period for another policy are not sufficient to constitute the product being offered as a different product eligible for concurrent or overlapping enrollment periods. (B) There may be no statement or implication to the effect 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. (C) An invitation to contract Medicare supplement advertisement must describe complete information regarding all available "open enrollment" opportunities or prominently disclose a means of obtaining complete information regarding such opportunities. (l) Acknowledgment of nonduplication; notice to consumer. (1) Acknowledgment of nonduplication; notice to consumer. (A) Acknowledgment of nonduplication--The document which contains and is limited to the language which is set forth in item (6) of Figure: 28 TAC §21.113(1)(5). (B) Duplication--Policies of the same coverage type according to minimum standard classifications outlined in Chapter 3, Subchapter S and Subchapter Y of this title (relating to Minimum Standards and Benefits and Readability for Accident and Health Insurance Policies and Minimum Standards for Benefits for Long-term Coverage under Individual and Group Policies). For example, two cancer insurance policies or two long-term care policies would be duplicative. Duplication is also present when two policy coverages overlap to the extent that a reasonable person would not consider the ownership of two such policies to be cost efficient in light of the consumer's needs and income level. Group health coverage obtained through an employer-sponsored plan, conversion from a group employer-sponsored health plan, short-term travel accident coverage, short-term nonrenewable coverage, Medicare risk contracts, and retired-employee group plans will not be considered duplication of other coverage. (C) Notice to consumer--The document which contains and is limited to the language which is set forth in item (7) of Figure: 28 TAC §21.113(1)(5). (2) All insurers, other than direct response insurers, or their agents or other intermediaries shall obtain an acknowledgment of nonduplication with all applications for health insurance sold to an individual who is 65 years of age or older, other than group health coverage obtained through an employer-sponsored plan, conversion from a group employer-sponsored health plan, short-term travel accident coverage, short-term nonrenewable coverage, Medicare risk contracts, and retired-employee group plans. This acknowledgment shall be obtained at the same time as the application and shall be submitted to the insurer with the application. One copy of the acknowledgment shall be left with the insured and one copy kept on file with the company. The form of such acknowledgment or notice must be printed on a separate piece of paper and must contain the specific language and must be in the format set forth in item (6) of Figure: 28 TAC §21.113(1)(5). This form is published by the Texas Department of Insurance, and copies of the form are available from and on file at the Texas Department of Insurance, Market Conduct Division, Mail Code 305-2E, P.O. Box 149104, Austin, Texas 78714-9104. (3) In order to obtain this acknowledgment, all insurers or their agents or other intermediaries shall offer to examine all health insurance policies and health care coverage owned by a prospective insured and advise the insured as to whether the purchase of the proposed policy will result in any duplication of benefits. (4) Direct response insurers who market to the consumer without agents or other intermediaries are exempt from the requirement to deliver the acknowledgement contained in item (6) of Figure: 28 TAC §21.113(1)(5), but must deliver the notice to consumers set forth in item (7) of Figure: 28 TAC §21.113(1)(5). (5) Failure to comply with paragraphs (1) - (4) of this subsection shall be an unfair business practice as defined by the Insurance Code Chapter 541. Attached Graphic |
| Source Note: The provisions of this §21.113 adopted to be effective February 1, 1981, 5 TexReg 3336; amended to be effective February 15, 1991, 16 TexReg 557; amended to be effective October 6, 1997, 22 TexReg 9677; amended to be effective December 9, 2007, 32 TexReg 8830; amended to be effective September 8, 2010, 35 TexReg 8117 |
