| (1) If a policy contains a waiting, elimination, probationary,
or similar time period between the effective date of the policy and
the effective date of coverage under the policy, or a time period
between the date a loss occurs and the date benefits begin to accrue
for such loss, an invitation to contract must disclose the existence
of such periods.
(2) An advertisement may not use the words "only,"
"just," "merely," "minimum," or similar words or phrases to unfairly
describe the applicability of any exclusions, limitations, or reductions,
such as "This policy is subject to the following minimum exclusions
and reductions."
(f) Preexisting condition.
(1) An advertisement that states or implies that preexisting
conditions may apply must define the applicable preexisting condition
provisions.
(2) An advertisement that is an invitation to contract
must, in accurate terms, disclose the extent to which a loss is not
covered if the cause of the loss is traceable to a condition existing
before the effective date of the policy.
(g) Disclosure of policy provisions relating to renewability,
cancellability, and termination.
(1) An advertisement that is an invitation to contract
must disclose the provisions in respect of renewability, cancellability,
and termination, and each modification of benefits, covered losses
or premiums either because of age or for other reasons, in a manner
that does not minimize or render obscure the qualifying conditions.
(2) An advertisement for a policy stating or implying
that the policy is "guaranteed renewable" must:
(A) have a clear and conspicuous statement that coverage
may terminate at certain ages, if such is a fact; and
(B) include, in a prominent place, a statement indicating
that rates for the policy may change if the advertisement suggests
or implies that rates for the product will not change. Such statement
must generally identify the manner in which rates may change, such
as by age, by health status, by class, or through application of other
general criteria.
(3) No advertisement may represent or imply that an
insurance policy may be continued in effect indefinitely or for any
period of time, if the policy provides that it may not be renewed
or may be cancelled by the insurer, or terminated under any circumstances
over which the insured has no control, during the period of time represented.
(4) The term "noncancellable" or derivation thereof
may not be used by an insurer or agent to describe a policy if the
insurer has a right to periodically, by individual or class, revise
rates or premiums.
(5) An invitation to contract must contain a notice
stating that the person to whom the policy is issued is permitted
to return the policy within 10 days (or more as stated in the policy)
of its delivery to that person and to have the premium paid refunded.
(h) Description of premiums, cost, and interest.
(1) Consideration paid or to be paid for individual
insurance, including policy fees, must be in all instances described
as premium, consideration, cost, or payments.
(2) Consideration paid or to be paid for group insurance,
including enrollment fees, dues, administrative fees, membership fees,
service fees, and other similar charges paid by the employees, must
be disclosed in an invitation to contract advertisement as a part
of the cost and consideration.
(3) An advertisement may not offer a policy that uses
a reduced initial premium rate in a manner that overemphasizes the
availability and the amount of the initial reduced premium. If an
insurer charges an initial premium that differs in amount from the
amount of the renewal premium payable, the advertisement may not display
the amount of the reduced initial premium more prominently than the
renewal premium.
(4) A reduced initial or first-year premium may not
be described by an insurer or agent as constituting free insurance
for a period of time.
(5) An advertisement of an insurance product may not
imply that it is "a low-cost plan" or use other similar words or phrases
without a substantial present or past cost record for the policy advertised
or similar policy, demonstrating a composite of lower production,
administrative, and claim cost resulting in a low premium rate to
the public.
(6) The words "deposits," "savings," "investment,"
and other phrases used to describe premiums may not be used by an
insurer or agent to hide or untruthfully minimize the cost of the
hazards insured against.
(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 must state that fact.
(i) Dividends.
(1) An advertisement may not use 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 complete 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 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 an application or acknowledgment of acceptance is received.
If coverage is issued before acceptance, it must 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 the insured;
(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 the 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 these 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 must indicate the date by which the applicant must mail
the application. The date may not be less than 10 days and not more
than 40 days from the date that the enrollment period is advertised
for the first time. (It is emphasized that this section is Cont'd... |
