210 Neb. Admin. Code, ch. 82, § 007 - Practices Declared False Misleading. Deceptive or Unfair Regardless of Location

007.01 The following acts or practices by an insurer or insurance producer are declared to be false, misleading, deceptive or unfair:

007.01(A) Submitting, processing or assisting in the submission or processing of any allotment form or similar device used by the USAF to direct a service member's pay to a third party for the purchase of life insurance. The foregoing includes, but is not limited to, using or assisting in using a service member's "MyPay" account or other similar internet or electronic medium for such purposes. This subsection does not prohibit assisting a service member by providing insurer or premium information necessary to complete any allotment form.

007.01(B) Knowingly receiving funds from a service member for the payment of premium from a depository institution with which the service member has no formal banking relationship. For purposes of this section, a formal banking relationship is established when the depository institution:

007.01(B)(1) provides the service member a deposit agreement periodic statements and makes the disclosures outlined the Truth in Savings Act, 12 U.S.C. § 4301 et seq. and the-regulations promulgated thereunder; and

007.01(B)(2) permits the service member to make deposits and withdrawals unrelated to the payment or processing of insurance premiums.

007.01(C) Employing any device or method or entering into any agreement whereby funds received from a service member for the payment of insurance premiums are identified on the service member's Leave and Earnings Statement or equivalent form as "Savings" or "Checking".

007.01(D) Using DoD personnel, directly or indirectly, as a representative or agent in any capacity with or without compensation with respect to the solicitation or sale of life insurance to service members (or their family members') that are junior in rank or grade.

007.01(E) Offering or giving anything of value, directly or indirectly, to DoD personnel to procure their assistance in encouraging, assisting or facilitating the solicitation or sale of life insurance to another service member.

007.01(F) Knowingly offering or giving anything of value to a service member with a pay grade of E-4 or below for his or her attendance to any event where an application for life insurance is solicited.

007.01(G) Advising a-service members pay grades E-4 under below to change their income tax with holdings or states of legal residence for the sole purpose of increasing disposable income to purchase life insurance.

007.01(H) Making any representation, or using any device, title, descriptive name or identifier that has the tendency or capacity to confuse or mislead a service member into believing that the insurer, insurance producer or product offered is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government, the USAF. any state or federal agency or government entity. Examples of improper insurance producer titles include , "Battalion Insurance Counselor," "Unit Insurance Advisor," "Servicemen's Group Life Insurance Conversion Consultant" or "Veteran's Benefits Counselor."

Nothing herein may shall be construed to prohibit a person from using a professional designation awarded after the successful completion of a course of instruction in the business of insurance by an-accredited institutions or organizations . Some such designations include, Chartered Life Underwriter (CLU), Chartered Financial Consultant (CFC), Certified Financial Planner (CFP), Master of Science la-Financial Services (MSFS), or Masters of Science Financial Planning (MS).

007.01(I) Soliciting any life insurance product through the use of or in conjunction with any third party organization that promotes the welfare of or assists members of the USAF in a manner that has the tendency or capacity to contuse or mislead a service member into believing that either-the insurer, insurance producer or insurance product is affiliated, connected or associated with, endorsed, sponsored, sanctioned or recommended by the U.S. Government, or the USAF.

007.01(J) Using or describing the credited interest rate on a life insurance policy in a manner that implies that the credited interest rate is a net return on premium paid.

007.01(K) Excluding individually issued annuities, misrepresenting the mortality costs of a life insurance product, including stating or implying that the product "costs nothing" or is "free."

007.01(L) Making any false, misleading or deceptive representation regarding the availability, suitability, amount, cost, exclusions or limitations to coverage provided to a service member or dependents by SGLI or VGLI.

007.01(M) Making any false, misleading or deceptive representation regarding conversion requirements, including the costs of coverage, or exclusions or limitations to coverage of SGLI or VGLI to private insurers.

007.01(N) Suggesting or recommending a service member cancel or terminate an SGLI policy or issuing a life insurance policy which replaces an existing SGLI policy unless the replacement takes effect upon or after the service member's separation from the USAF.

007.01(O) Deploying, using or contracting for any lead generating materials designed exclusively for use with service members that do not clearly disclose that the recipient will be contacted by an insurance producer, for the purpose of soliciting life insurance.

007.01(P) Failing to disclose that a solicitation for life insurance will be made when establishing a specific appointment for face-to-face meeting with a prospective purchaser.

007.01(Q) Excluding individually issued annuities, failing to clearly and conspicuously disclose the fact that the product being sold is life insurance.

007.01(R) Failing to make, at the time of sale or offer to an individual known to be a service member, the written disclosures outlined in Section 10 of the "Military Personnel Financial Services Protection Act," Pub. L. No. 109-290, p.16.

007.01(S) Excluding individually issued annuities, when the sale is conducted face-to-face with an individual known to be a service member, failing to provide the applicant at the time the application is taken:

007.01(T)(1) an explanation of any free look period with instructions on how to cancel if a policy is issued; and

007.05(T)(2) either a copy of the application or a written disclosure. The copy of the application or the written disclosure needs to clearly set out the type of life insurance, the death benefit and the expected first year cost. A basic illustration that meets the requirements of 210 Neb. Admin. Code §72 is insufficient to meet this requirement.

007.01(U) Excluding individually issued annuities, recommending the purchase of any life insurance product which includes a side fund to a-service members in pay grades E-4 and below unless the insurer has reasonable grounds for believing that the life insurance death benefit, standing alone, is suitable.

007.01(V) Offering or selling a life insurance product which includes a side fund to a service members in pay grades E-4 and below who is are currently enrolled in SGLI unless, after the completion of a needs assessment, the insurer demonstrates that the applicant's SGLI death benefit, together with any either-military survivor benefits, savings and investments, survivor income, and other life insurance are insufficient to meet the applicant's insurable needs,

007.01(V)(1) "Insurable needs" are the risks associated with premature death taking into consideration the financial obligations and immediate and future cash needs of the applicant's survivors, dependents and estate.

007.01 (V)(2) "Military survivor benefits" include such things as: the Death Gratuity, Funeral Reimbursement, Transition Assistance, Survivor and Dependents' Educational Assistance, Dependency and Indemnity Compensation, TRICARE Healthcare benefits, Survivor Housing Benefits and Allowances, Federal Income Tax Forgiveness, and Social Security Survivor Benefits.

007.01(W) Excluding individually issued annuities, offering for sale or selling any life insurance contract which includes a side fund:

007.01(W)(1) unless interest credited accrues from the date of deposit to the date of withdrawal and permits withdrawals without limit or penalty;

007.01(W)(2) unless the applicant has been provided with a schedule of effective rates of return based upon cash flows of the combined product. For this disclosure, the effective rate of return will consider all premiums and cash contributions made by the policyholder and all cash accumulations and cash surrender values available to the policyholder in addition to life insurance coverage. This schedule will be provided each of the first ten policy years and every fifth policy year thereafter, ending at age 100, policy maturity or final expiration; and

007.01(W)(3) which diverts or transfers funds accumulated in the side fund to pay, reduce or offset any premiums due.

007.01(X) Excluding individually issued annuities, offering or selling any life insurance contract which after considering all policy benefits, including but not limited to endowment, return of premium or persistency, does not comply with standard life insurance non forfeiture.

007.01(Y) Selling any life insurance product to an individual known to be a service member that excludes coverage if the insured's death is related to war, declared or undeclared, or any act related to military service except for an accidental death coverage, e.g., double indemnity, which may be excluded.

Notes

210 Neb. Admin. Code, ch. 82, § 007

Amended effective 10/4/2020