20 CSR 400-5.700 - Accident and Sickness Insurance Advertising
PUBLISHER'S NOTE: The secretary of state has determined that the publication of the entire text of the material which is incorporated by reference as a portion of this rule would be unduly cumbersome or expensive. Therefore, the material which is so incorporated is on file with the agency who filed this rule, and with the Office of the Secretary of State. Any interested person may view this material at either agency's headquarters or the same will be made available at the Office of the Secretary of State at a cost not to exceed actual cost of copy reproduction. The entire text of the rule is printed here. This note refers only to the incorporated by reference material.
(1) Responsibility
of Insurer.
(A) These rules shall apply to any
accident and sickness insurance advertisement, as that term is defined in this
rule, intended for presentation, distribution, dissemination or other
advertising use in this state, when this use is made either directly or
indirectly by or on behalf of that insurer.
(B) Every insurer shall establish and at all
times maintain a system of control over the content, form and method of
dissemination of all advertisements of its policies. The insurer whose policies
are so advertised shall be deemed responsible for all these advertisements,
regardless of by whom written, created, presented or distributed.
(C) Each health service corporation licensed
under Chapter 354, RSMo shall be considered within the full scope of this rule
and consider itself an insurer issuing policies when doing any advertising as
defined in this rule.
(2)
Definitions.
(A) An advertisement for the
purpose of these rules shall include:
1.
Printed or published material, audiovisual material and descriptive literature
used by or on behalf of an insurer in direct mail, newspapers, magazines, radio
scripts, television scripts, billboards and similar displays;
2. Descriptive literature and sales aids of
all kinds issued by an insurer, insurance producer for presentation to members
of the insurance buying public, including, but not limited to, circulars,
leaflets, booklets, depictions, illustrations, form letters and lead-generating
devices of all kinds as defined in this rule; and
3. Prepared sales talks, presentations and
material for use by insurance producers whether prepared by the insurer or the
insurance producer.
(B)
Exception for the purpose of these rules shall mean any provision in a policy
where coverage for a specified hazard is entirely eliminated; it is a statement
of risk not assumed under the policy.
(C) Institutional advertisement for the
purpose of these rules shall mean an advertisement having as its sole purpose
and presentation the promotion of the reader's interest in the concept of
accident and sickness insurance or the promotion of the insurer as a name in
the field of accident and sickness insurance.
(D) Insurer for the purpose of these rules
shall include any individual, corporation, association, partnership, reciprocal
exchange, interinsurer, Lloyd's, fraternal benefit society, health maintenance
organization, health service corporation, prepaid dental plan and any other
legal entity which is regulated as an insurer in this state and is engaged in
the advertisement of itself or a policy as policy is defined in this
rule.
(E) Invitation to contract
for the purpose of these rules shall mean any advertisement which is neither
clearly an invitation to inquire nor clearly an institutional
advertisement.
(F) Invitation to
inquire for the purpose of these rules shall mean an advertisement having as
its objective the creation of a desire to inquire further about the product and
which is limited to a brief description of the loss for which the benefit is
payable and which may contain the dollar amount of benefit payable or the
period of time during which the benefit is payable, or both. The advertisement
shall not refer to cost. An advertisement which specifies either the dollar
amount of benefit payable or the period of time during which the benefit is
payable shall conspicuously contain a provision substantially as follows: "For
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 insurance producer or write the company."
(G) Lead-generating device, for the purpose
of these rules, shall mean any communication directed to the public which,
regardless of form, content or stated purpose, is intended to result in the
compilation or qualification of a list containing names and other personal
information to be used to solicit residents of this state for the purchase of a
policy.
(H) Limitation for the
purpose of these rules shall mean any provision which restricts coverage under
the policy other than an exception or a reduction.
(I) Policy for the purpose of these rules
shall include any policy, plan, certificate, contract, agreement, statement of
coverage, rider or endorsement which provides accident or sickness benefits or
medical, surgical or hospital expense benefits, whether, on an indemnity,
reimbursement, health service or prepaid basis, except when issued in
connection with another type of insurance other than life and except
disability, waiver of premium and double indemnity benefits included in life
insurance and annuity contracts.
(J) Reduction for the purpose of these rules
shall mean any provision which reduces the amount of the benefit; a risk of
loss is assumed but payment upon the occurrence of the loss is limited to some
amount or period less than would be otherwise payable had the reductions not
been used.
(3) Method of
Disclosure of Required Information. All information required to be disclosed by
these rules shall be set out conspicuously and in close conjunction with the
statements to which this information relates or under appropriate captions of
such prominence that it shall not be minimized, obscured or presented in an
ambiguous fashion or intermingled with the context of the advertisement so as
to be confusing or misleading.
(4)
Form and Content of Advertisements.
(A) The
format and content of an advertisement of an accident or sickness insurance
policy shall be sufficiently complete and clear to avoid deception or the
capacity or tendency to mislead or deceive. Whether an advertisement has a
capacity or tendency to mislead or deceive shall be determined by the director
of insurance from the basic overall impressions that the advertisement may
create reasonably upon those persons of average education and intelligence for
that segment of the public to which it appears on its face to be
directed.
(B) Advertisements shall
be truthful and not misleading in fact or in implication. Words or phrases, the
meaning of which is clear only by implication or by familiarity with insurance
terminology, shall not be used.
(5) Advertisements of Benefits Payable,
Losses Covered or Premiums Payable.
(A)
Deceptive words, phrases or illustrations are prohibited.
1. No advertisement shall omit information or
use words, phrases, statements, references or illustrations if the omission of
this information or use of these words, phrases, statements, references or
illustrations 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 or premium payable. 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 does not remedy misleading statements or
omissions of pertinent fact. No advertisements may employ devices which create
undue fear or anxiety in the minds of its readers judged by the standards in
section (4).
2. Policies advertised
as Medicare supplements or as providing additional benefits not provided by
Medicare or similar government programs must not create any illusion of greater
coverage or undue anxiety in the minds of those purchasing the coverage than is
actually provided. Any advertisement is unacceptable which-
A. Exaggerates the gaps in Medicare
coverage;
B. Promotes fear of
dependence upon relatives or charity;
C. Implies that long periods of sickness or
hospital stays are common among the elderly;
D. Does not explain the manner in which any
advertised policy is supplemental to Medicare coverage or fails to disclose the
exact benefits it is designed to supplement;
E. Describes the inpatient hospital coverage
of Medicare as "hospital Medicare" or "Medicare Part A" when the policy does
not supplement the nonhospital or the psychiatric hospital benefits of Medicare
Part A (phrases to the effect of the "inhospital portion of Medicare Part A"
are acceptable);
F. Fails to
clearly describe the operation of the part(s) of Medicare which the policy is
designed to supplement; and
G.
Describes those Medicare benefits not supplemented by the policy in a way as to
minimize their importance relative to the Medicare benefits which are
supplemented.
3. No
advertisement shall contain or use words or phrases such as, "all", "full",
"complete", "comprehensive", "unlimited", "up to", "as high as", "this policy
will help pay your hospital and surgical bills", "this policy will help fill
some of the gaps that Medicare and your present insurance leave out", "this
policy will help to replace your income" (when used to express loss of time
benefits) or similar words and phrases, in a manner which exaggerates any
benefits beyond the terms of the policy.
4. An advertisement shall not contain
descriptions of a policy limitation, exception or reduction worded in a
positive manner to imply that it is a benefit, such as 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 the policy limitations, exceptions and reductions fairly and
accurately shall describe the negative features of these limitations,
exceptions and reductions of the policy offered.
5. No advertisement of a benefit for which
payment is conditional upon confinement in a hospital or similar facility shall
use words or phrases such as "tax free," "extra cash," "extra income," "extra
pay" or substantially similar words or phrases in a manner which has the
capacity, tendency or effect of misleading the public into believing that the
policy advertised, in some way, will enable them to make a profit from being
hospitalized.
6. No advertisement
of a hospital or other similar facility confinement benefit shall advertise
that the amount of the benefit is payable on a monthly or weekly basis when, 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 the
statements of these 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: "$1000 a month at
($33.33 per day)" or "$33.33 per day ($1000 per month)." When the policy
contains a limit on the number of days of coverage provided, this limit must
appear in the advertisement.
7. No
advertisement of a policy covering only one (1) disease or a list of specified
diseases shall imply coverage beyond the terms of the policy. Synonymous terms
shall not be used to refer to any disease so as to imply broader coverage than
is the fact.
8. An advertisement
for a policy providing benefits for specified illnesses only, such as cancer or
for specified accidents only, such as automobile accidents, shall clearly and
conspicuously in prominent type state the limited nature of the policy. The
statement shall be substantially as follows: "THIS IS A LIMITED POLICY," "THIS
IS A CANCER POLICY ONLY," "THIS IS AN AUTOMOBILE ACCIDENT ONLY
POLICY."
9. An advertisement which
is also an invitation to join an association, trust or discretionary group must
solicit insurance coverage on a separate and distinct application which
requires separate signatures for each application; provided, however, that a
separate and distinct application which requires signatures for each
application need not be made where the advertisement is an invitation to join a
discretionary group approved under section 376.421.2., RSMo, which has as its
sole purpose the provision of group health insurance benefits. The insurance
program must be presented so as not to mislead or deceive the prospective
members that they are purchasing insurance as well as applying for membership
if that is the case.
(B)
Exceptions, Reductions and Limitations.
1.
When an advertisement which is an invitation to contract refers to either a
dollar amount or a period of time for which any benefit is payable or the cost
of the policy or specified policy benefit or the loss for which the benefit is
payable, it shall also disclose those exceptions, reductions and limitations
affecting the basic provisions of the policy without which the advertisement
would have the capacity or tendency to mislead or deceive.
2. When 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 this
loss, an advertisement as stated shall disclose the existence of these
periods.
3. An advertisement shall
not use the words "only", "just", "merely", "minimum" or similar words or
phrases to imply a minimal applicability of any exceptions and reductions such
as "This policy is subject only to the following minimum exceptions and
reductions."
(C)
Preexisting Conditions.
1. An advertisement
which is subject to the requirements of subsection (5)(B), in negative terms,
shall disclose the extent to which any loss is not covered if the cause of the
loss manifested itself prior to the effective date of the policy. The term
"preexisting condition" or any similar phrase without an appropriate definition
or description shall not be used.
2. When a policy does not cover losses
resulting from preexisting conditions, no advertisement of the policy shall
state or imply that the applicant's physical condition or medical history will
not affect the issuance of a policy or payment of a claim. 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.
3. When an advertisement
contains an application form to be completed by the applicant and returned by
mail for a direct response insurance product, the application form shall
contain a question or statement which reflects the preexisting condition
provisions of the policy which immediately precedes the blank space for the
applicant's signature. For example, this application form shall contain
substantially the following question or statement: "Do you understand that this
policy will not pay benefits during the first year(s) after the issue date for
a disease or physical condition which you now have or have had in the past?
YES" or substantially the following statement: "I understand the policy applied
for will not pay benefits for any loss incurred during the first _____year(s)
after the issue date on account of disease or physical condition which I now
have or have had in the past."
(6) Necessity for Disclosing Policy
Provisions Relating to Renewability, Cancellability and Termination. When an
advertisement which is an invitation to contract refers to either a dollar
amount or a period of time for which any benefit is payable or the cost of the
policy or a specific policy benefit or the loss for which the benefit is
payable, it shall disclose the provisions relating to renewability,
cancellability, termination and any modification of benefits, losses covered or
premiums in a manner which shall not minimize or render obscure the qualifying
conditions.
(7) Testimonials or
Endorsements by Third Parties.
(A)
Testimonials used in advertisements must be genuine, represent the current
opinion of the author, be applicable to the policy advertised and be accurately
reproduced. The insurer, in using a testimonial, makes as its own all of the
statements contained in the testimonial and the advertisement, including this
statement, is subject to all the provisions of these rules.
(B) If the person making a testimonial, an
endorsement or an appraisal has a financial interest in the insurer or a
related entity as a stockholder, director, officer, employee or otherwise, this
fact shall be disclosed in the advertisement. If a person is compensated for
making a testimonial, endorsement or appraisal, this fact shall be disclosed in
the advertisement by language substantially as follows: "Paid Endorsement." The
payment of substantial amounts, directly or indirectly, for "travel and
entertainment" for filming or recording of television or radio advertisements
requires disclosure of such compensation. This rule does not apply when payment
is union scale.
(C) An
advertisement shall not state or imply that an insurer or a policy has been
approved or endorsed by any individual, group of individuals, society,
association or other organizations, unless this is the fact and unless any
proprietary relationship between an organization and the insurer is disclosed.
If the entity making the endorsement or testimonial has been formed by the
insurer or is owned or controlled by the insurer or the person(s) who owns or
controls the insurer, this fact shall be disclosed in the
advertisement.
(D) When a
testimonial refers to benefits received under a policy, the specific claim
data, including claim number, date of loss and other pertinent information,
shall be retained and made available by the insurer for inspection for a period
of four (4) years or until the next regular report of examination of the
insurer, whichever is the longer period of time.
(8) Use of Statistics.
(A) An advertisement relating to any insurer
or policy shall not use irrelevant facts or statistics and shall accurately
reflect all of the relevant facts. This advertisement shall not imply that the
statistics are derived from the policy advertised unless this is the fact and
when applicable to other policies or plans shall specifically so
state.
(B) An advertisement shall
not represent or imply that claim settlements by the insurer are "liberal" or
"generous" or use words of similar import or that claim settlements are or will
be beyond the actual terms of the contract. An unusual amount paid for a unique
claim for the policy advertised is misleading and shall not be used.
(C) The specific source of any statistics
used in an advertisement shall be clearly identified in the
advertisement.
(9)
Identification of Plan or Number of Policies.
(A) When a choice of the amount of benefits
is referred to, an advertisement which is an invitation to contract shall
disclose that the-
1. Amount of benefits
provided depends upon the plan selected; and
2. Premium will vary with the plan and
benefits selected.
(B)
When an advertisement which is an invitation to contract refers to various
benefits which may be contained in two (2) or more policies, other than group
master policies, the advertisement shall disclose that these benefits are
provided only through a combination of those policies.
(10) Disparaging Comparisons and Statements.
An advertisement shall not, directly or indirectly, make unfair or incomplete
comparisons of policies or benefits or comparisons of noncomparable policies of
other insurers and shall not disparage competitors, their policies, services or
business methods. It shall not disparage or unfairly minimize competing methods
of marketing insurance.
(11)
Jurisdictional Licensing and Status of Insurer.
(A) An advertisement which is seen or heard
beyond the limits of the jurisdiction in which the insurer is licensed shall
not imply licensing beyond those limits.
(B) An advertisement shall not create the
impression directly or indirectly that the insurer, its financial condition or
status or the payment of its claims or merits, desirability or advisability of
its policy forms or kinds of plans of insurance are approved, endorsed or
accredited by any division or agency of this state or the United States
government.
(12) Identity
of Insurer.
(A) The name of the actual insurer
shall be stated in all of its advertisements. The form number(s) of the policy
advertised shall be stated in an advertisement which is an invitation to
contract. An advertisement shall not use a trade name, any insurance group
designation, name of the parent company of the insurer, name of a particular
division of the insurer, service mark, slogan, symbol or other device which
without disclosing the name of the actual insurer would have the capacity and
tendency to mislead or deceive as to the true identity of the
insurer.
(B) No advertisement shall
use any combination of words, symbols or physical materials which by their
content, phraseology, shape, color or other characteristics are so similar to a
combination of words, symbols or physical materials used by agencies of the
federal government or of this state or otherwise appear to be of such a nature
that it tends to confuse or mislead prospective insureds into believing that
the solicitation is in some manner connected with an agency of the municipal,
state or federal government.
(C) No
advertisement in the form of envelopes or stationery of any kind may use any
name, service mark, slogan or symbol or any device in a manner that implies
that the insurer or the policy advertised, or that any insurance producer who
may call upon the consumer in response to the advertisement is connected with a
governmental agency, such as the Social Security Administration.
(D) An insurance producer who makes contact
with a consumer, as result of acquiring that consumer's name from a
lead-generating device must disclose this fact in the initial contact with the
consumer.
(13) Group or
Quasi-Group Implications. An advertisement of particular policy shall not state
or imply that prospective insureds become group or quasi-group members covered
under a group policy and as such enjoy special rates and underwriting
privileges, unless that is the fact.
(14) Introductory, Initial or Special Offers.
(A) Advertising.
1. An advertisement of an individual policy
shall not directly or by implication represent that a contract or combination
of contracts 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 contain phrases describing an enrollment
period as "special", "limited" or similar words or phrases when the insurer
uses these enrollment periods as the usual method of advertising accident and
sickness insurance.
2. An
enrollment period during which a particular insurance product may be purchased
on an individual basis shall not be offered within this state unless there has
been a lapse of not less than three (3) months between the close of the
immediately preceding enrollment period for substantially 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 shall not be less
than ten (10) days and not more than forty (40) days from the date that the
enrollment period is advertised for the first time. This rule applies to all
advertising media-that is, mail, newspapers, radio, television, magazines and
periodicals- by any one (1) insurer. It is inapplicable to solicitations of
employees or members of a particular group or association which otherwise would
be eligible under specific provisions of the Insurance Code for group, blanket
or franchise insurance. The phrase "any one insurer" includes all the
affiliated companies of a group of insurance companies under common management
or control.
3. This rule prohibits
any statement of 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, unless this is the fact.
4. The phrase "a particular insurance
product" in paragraph (14)(A)2. means 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; an increase or decrease in any elimination period or waiting
period from those available during an enrollment period for another policy
shall not be sufficient to constitute the product being offered as a different
product eligible for concurrent or overlapping enrollment periods.
(B) An advertisement shall not
offer a policy which utilizes a reduced initial premium rate in a manner which
overemphasizes the availability and the amount of the initial reduced premium.
When an insurer charges an initial premium that differs in amount from the
amount of the renewal premium payable on the same mode, the advertisement shall
not display the amount of the reduced initial premium either more frequently or
more prominently than the renewal premium and both the initial reduced premium
and the renewal premium must be stated in juxtaposition in each portion of the
advertisement where the initial reduced premium appears.
(C) Special award, such as a "safe drivers'
award" shall not be used in connection with advertisements of accident or
accident and sickness insurance.
(15) Statements About an Insurer. An
advertisement shall not contain statements which are untrue in fact, or by
implication misleading, with respect to the assets, corporate structure,
financial standing, age or relative position of the insurer in the insurance
business. An advertisement shall not contain a recommendation by any commercial
rating system unless it clearly indicates the purpose of the recommendations
and the limitations of the scope and extent of the recommendation.
(16) Enforcement Procedures.
(A) Advertising File. Each insurer shall
maintain at its home or principal office and at its main office in this state,
if any, a complete file containing every printed, published or prepared
advertisement of its individual policies and typical printed, published or
prepared advertisements of its blanket, franchise and group policies hereafter
disseminated in or into this state, with a notation attached to each
advertisement which shall indicate the manner and extent of distribution and
the form number of any policy advertised. This file shall be subject to regular
inspection by this department. All these advertisements shall be maintained in
this file for a period of four (4) years.
(B) Preapproval of Advertising Required on
Noncompliance. Any person violating any provision of this rule shall be subject
to the penalties prescribed by law. The director may also require the insurer
to file all its advertising intended for use in the state no later than twenty
(20) days before the use, the filings to be examined and approved by the
accident and health section of the Missouri Department of Commerce and
Insurance before use in this state. On these disapproved filings, the insurer
may request a hearing, as under section 376.777.7., RSMo, Approval of
Policies.
(17) Guidelines
Adopted. The National Association of Insurance Commissioners' Interpretive
Guidelines predating this rule are declared to be the official interpretation
of this rule except where inconsistent with this rule.
(18) Severability Provision. If any section
or portion of a section of these rules or the applicability of them to any
person or circumstance is held invalid by a court, the remainder of the rules
or the applicability of that provision to other persons or circumstances, shall
not be affected by it.
Notes
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