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RULE §21.113Rules Pertaining Specifically to Accident and Health Insurance Advertising and Health Maintenance Organization Advertising

(a) Coverage details. An invitation to inquire that specifies either the dollar amount of benefit payable or the period of time during which the benefit is payable must contain a provision in effect as follows: "For specific costs and further details of the coverage, including exclusions, any reductions or limitations and the terms under which the policy may be continued in force, see your agent or write to the company."

(b) Illustration of rates. Subject to Insurance Code Chapter 1214, concerning Advertising for Certain Health Benefits, and Insurance Code Chapter 541, Subchapter B, concerning Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Defined, an invitation to inquire concerning a health benefit plan may include rate information without including information about all benefit exclusions and limitations so long as any rate mentioned in any advertisement disseminated under this subsection indicates the age, gender, and geographic location on which that rate is based and so long as the advertisement includes prominent disclaimers clearly indicating that:

  (1) the rates are illustrative only;

  (2) a person should not send money to the issuer of the health benefit plan in response to the advertisement;

  (3) a person cannot obtain coverage under the health benefit plan until the person completes an application for coverage; and

  (4) benefit exclusions and limitations may apply to the health benefit plan.

(c) Identification of policy.

  (1) The form number or numbers of the policy advertised must be clearly identified in an invitation to contract.

  (2) If an advertisement refers to various benefits that are contained in two or more policies or riders, but excepting group master policies, the advertisement must disclose that such benefits are provided only through a combination of such policies or riders.

  (3) An advertisement may not use the word "plan" without first identifying the subject as an "insurance plan" or an "HMO plan," as appropriate.

(d) Description of benefits.

  (1) An invitation to contract referring to a dollar amount, a period of time for which a benefit is payable, the cost of the policy, or a specific policy benefit or the loss for which such benefit is payable must also disclose those exclusions, reductions, and limitations affecting the basic provisions of the policy, without which the advertisement would have the capacity and tendency to mislead or deceive.

  (2) If a policy pays varying amounts of benefits for the same loss occurring under different conditions or pays benefits only when a loss occurs under certain conditions, any reference to these benefits in an invitation to contract must be accompanied by a clear and conspicuous disclosure of the different or limited conditions.

  (3) No advertisement may refer to a benefit payable under a "family group" policy if the full amount of the benefit is not payable upon the occurrence of the contingency insured against to each member of the family, unless clear and conspicuous disclosure of such fact is made in the advertisement.

  (4) No advertisement may be used that represents or implies:

    (A) that the condition of the applicant's or insured's health before, or at the time of issuance of a policy, or thereafter, will not be considered by the insurer in issuing the policy or in determining its liability or benefits to be furnished for or in the settlement of a claim if such is not a fact;

    (B) if an insurer requires a medical examination for a specified policy, the advertisement, if it is an invitation to contract, must disclose that a medical examination is required.

  (5) An invitation to contract for a policy that provides coverage for loss due to accident only for a specified period of time from its effective date must state this fact clearly and conspicuously.

  (6) If any covered benefits are, by the terms of the policy, limited to a certain age group or are reduced at a certain age, an invitation to contract must clearly and conspicuously disclose such fact.

  (7) An advertisement may not contain representations of an aggregate amount payable without clear and conspicuous disclosure in close proximity to any maximum daily benefit and maximum time limit.

  (8) No advertisement of a policy providing benefits for which payment is conditioned upon confinement in a hospital, extended care facility, or at home may advertise that the amount of the benefit is payable on a monthly or weekly basis if, in fact, the amount of the benefit payable is based upon a daily pro rata basis relating to the number of days of confinement unless such statements of monthly or weekly benefit amounts are followed immediately by equally prominent statements of the benefit payable on a daily basis. For example, either of the following statements is acceptable: "$1,000 a Month ($33.33 a Day)" or "$33.33 a Day ($1,000 a Month)." If the policy contains a limit on the number of days of coverage provided, such limit must appear in the advertisement.

  (9) An advertisement offering assistance or information concerning Medicare may not state or imply that an obligation is imposed by the receipt of such information.

  (10) An advertisement of benefits payable in conjunction with Medicare must disclose the Medicare benefits (Part A or B) they are designed to supplement.

  (11) A Medicare-related advertisement must state in a prominent place the following or similar words: "Not connected with or endorsed by the United States government or the federal Medicare program."

  (12) References to Medicare may not be used in such a manner in an advertisement so as to be misleading or deceptive.

  (13) Advertisements referenced as being "Important Notices" or similar language and directed primarily to Medicare recipients or senior citizens are presumed to be misleading or having the capacity or tendency to mislead unless shown otherwise.

  (14) The words, numerals, and phrases "all," "100%," "full," "complete," "comprehensive," "unlimited," "up to," "as high as," "this policy will pay your hospital and surgical bills," or "this policy will replace your income," or similar words, numerals, and phrases may not be used to exaggerate any benefit beyond the terms of the policy, but may be used only in a manner as fairly and accurately describes the benefit.

  (15) An advertisement may not contain descriptions of a policy limitation, exclusion, or reduction, worded or stated in a manner to imply that it is a benefit, for example, describing a waiting period as a "benefit builder," or stating "even preexisting conditions are covered after two years." Words and phrases used in an advertisement to describe policy limitations, exclusions, and reductions must accurately describe the negative features of such limitations, exclusions, and reductions of the policy offered.

  (16) No advertisement of a benefit, if payment of the benefit is conditioned upon confinement in a hospital or similar extended care facility, or at home, may use words or phrases such as "tax free," "extra cash," "extra income," "extra pay," or similar words or phrases. In those cases such words and phrases have the capacity, tendency, or effect of misleading the public and cause the belief that the policy advertised enables a profit to be made from being hospitalized. This section prohibits the misleading use of the phrase "tax free," but it does not prohibit the use of complete and accurate terminology explaining the Internal Revenue Service rules applicable to the taxation of accident and sickness benefits. Prominence either by caption, lead-in, boldface, or large type must not be given in any manner to any statements relating to the tax status of such benefits.

  (17) Except as permitted under §21.109(a) of this title (relating to Unlawful Inducement), an advertisement may not list goods and services other than those set out in the policy as possible benefits.

  (18) A policy covering only one disease or a list of specific diseases or accidents may not be advertised so as to imply coverage beyond the terms of the policy. Synonymous terms may not be used to refer to any disease to imply broader coverage than that provided.

  (19) An advertisement that is an invitation to contract for a limited benefit policy, a supplemental coverage policy, or a nonconventional coverage policy, as defined in Chapter 3, Subchapter S of this title (relating to Minimum Standards and Benefits and Readability for Individual Accident and Health Insurance Policies), must clearly and conspicuously, in prominent type, state in language identical to or substantially similar to whichever of the following is applicable: "This is a limited benefit policy," "This is a cancer-only policy," "This is a supplemental policy," or "This is an automobile-accident-only policy." The insurer or agent must use the foregoing statement to clearly advise the public of the nature of the policy.

(e) Exceptions, reductions, and limitations.


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