(C)(D) Prohibition of
misleading policies
In reviewing policies for approval or disapproval, the
superintendent may study and take into
consideration
consider the titles, terms
and text of such
that policy, and in
addition may
and request and review the
following materials and data in connection
therewith:
(1) Any and all
advertisements, estimates, comparisons, illustrations, circulars, statements,
notices, brochures, pamphlets, letters, posters, announcements, articles,
projections, literature, pictures, reports, books, newspapers, magazines,
records, films or other matter
material of any nature whatsoever made, issued,
circulated, published, disseminated, delivered, used, referred to or placed
before the public in any manner whatsoever relating
to or in connection with any such
or in conjunction with that policy.
; and
(2) Any and all oral statements,
assertions, or representations, the sales
techniques or procedures, and the training,
study, or learning devices or programs made,
used, followed, or employed by the officers,
agents, employees, or representatives of the
insurance company.
(E)(F)
Sales practices
No life insurance company nor
any
or official, employee, broker,
agent, solicitor, or other representative, in writing or orally,
in order
may do any
of the following to induce the purchase of any policy, shall within this state:
(1) Make any statement or use any sales or
advertising material in connection with any policy which provides a pure
guaranteed annual endowment unless the gross premium and
the amount of such benefit
shall be
amount
are shown separately and distinctly from the gross premium for and the
amount of the life insurance benefit on the same page and without undue
emphasis or prominence to either benefit.
(2) Make any statement or use any sales or
advertising material, unless the amount of the pure guaranteed annual endowment
shall be
is
expressed in dollars and not as a percentage of any premium or
benefit.
(3) Make any statement or
use any sales or advertising material wherein the pure guaranteed annual
endowment is described as a "guaranteed check," "guaranteed dividend,"
"return," etc., alternatively,
or anything other than a guaranteed benefit for
which a premium is being paid by the policyholder.
(4)
While offering
a policy containing a series of pure guaranteed annual endowments fail
Fail to disclose to the prospect, orally and in
writing, in dollars on a year-to-year cumulative basis, the amount of benefit
on such annual endowments and the cost, including the amount by which premiums
are reduced after maturity of the last endowment for a
proposed or in effect policy with a series of fully guaranteed
endowments. Paragraphs (E)(1) to
(E)(4)
(F)(1) to (F)(4) of this rule
shall only apply to
pure
fully
guaranteed annual endowments that are equal to or less than the
policy's gross annual premium
for the policy.
(5) Make any statement or reference to
dividends on a life insurance policy or annuity contract that would reasonably
imply any of the following
;
:
(a) That dividends are anything other than an
adjustment of the cost of insurance in the form of an equitable distribution of
surplus that reflects the actual experience of the insurance company
principally in mortality, interest return on investment, and administrative expense.
(b) That dividends to a policyholder are
substantially "profits," "earnings," "return," or "investment return" unless
and to the extent that aggregate dividends received exceed the gross premiums
paid by the policyholder.
(c) That
dividends during the premium-paying period are paid on other than a single
year's premium.
(d) That dividends
are income tax free without an explanation that they constitute a partial
refund of the policyholder's premium, and, therefore, would constitute income
only when, and to the extent that, distributions during the life of the insured
or annuitant exceed the aggregate premiums paid on the policy.
(e) That dividends in the future are apt to
increase because of
due to the historical trend of dividend payments by
the life insurance company unless there is also a disclosure of any deficit in
unassigned surplus during the years those dividend payments were
made.
(6) Make any
statement or illustration with respect to sharing in divisible surplus or
surplus of the company other than because of the company's current dividend
scale accompanied by
with a disclosure that such
its scale may
increase or decrease in the future and, if such is
the case, a disclosure that there is a deficit in unassigned
surplus, if a deficit exists.
(7) State or imply that a policyholder will
secure a right to a stated percentage of net gain from operations or other
benefits, which are not a part of the policy itself or made a part thereof by
rider or other instrument previously approved by the department
of insurance.
(8) Use the terms "investment," "investment
plan," "expansion plan," "profit," "profits," "profit sharing," and other
similar terms in connection with a policy of life insurance or an annuity
contract in a context or under such circumstances or conditions as to have the
capacity or tendency to mislead a purchaser or prospect to believe that
he
they will
receive something other than a life insurance policy or annuity
contract.
(9) Refer to a
policyholder as a "partner" unless he has
they have been advised that
he does
they
do not have the legal rights of a partner in a statutory or common law
sense.
(10) Make any statement or
distribute any sales literature which is
prepared by an allegedly independent third person or unrelated company
which
that
purports to analyze the policy or life insurance company without disclosing the
amount of remuneration or fee, if any, paid, directly or indirectly, to
such
that
third person or company for its analysis.
(11) Make any statement
(such as the policy will be
"self-supporting") or imply that projected dividends under a
participating policy will be or can be sufficient at any time to assure the
receipt of any benefits, such as a paid-up policy
or
"self-sustaining" policy, without the further payment of premiums, unless
the statement is accompanied
but not limited
thereto by an adequate explanation as to:
(a) What benefits or coverage would be
provided or discontinued at such time; and
(b) The conditions under which this would
occur;
.
(12) Make any statement or reference
relating
in any
solicitation of an application for life insurance related to the growth
of the life insurance industry or to the tax status of life insurance companies
in connection with any solicitation of an
application for life insurance
or in a
context which
that could reasonably be interpreted or understood to interest a prospect in
the purchase of shares of stock in an insurance company or becoming an investor
therein
in an
insurance company rather than in the purchase of a life insurance
policy.
(13) Make any statement
that reasonably gives rise to the inference that the policyholder or a
prospective policyholder, by virtue of purchasing a policy of life insurance,
will enjoy a status common to a stockholder or will acquire a stock ownership
interest in the insurance company, its parent, or any affiliated
company.
(14) Make any reference to
or statement concerning an insurance company's "investment department,"
"insured investment department," or similar terminology in
such a manner as
to
that would imply that the policy was
sold or issued by the investment department of the life insurance
company.
(15) Make any statement or
reference which
that would reasonably imply that
by purchasing a policy, the purchaser or
prospective purchaser will become a member of a limited group of persons who
are to receive special advantages or favored treatment in the payment of
dividends by purchasing a policy, unless the
policy form filed with and approved by the department
of insurance contains
such a provision in express and clear terms.
(
the following language " This clause
has no relation or applicability to policies under which insured persons of one
class or risk may receive dividends at a higher rate than persons of another
class of risk nor shall it imply that any policy may contain a preferential
benefit which discriminates against future policyholders), except that this paragraph shall not apply to or
constitute evidence of the wrongful sale of any policy(s), the form of which
has been filed with and not disapproved by the superintendent of insurance
pursuant to Chapter 3915. of the Revised Code, if such sale was made prior to
the effective date of this rule.
."
(16)
Make any statement or reference concerning a parent or affiliate's growth,
earnings or future prospects without a clear explanation that
such company
the
identified parent or affiliate is not the life insurance company whose
policy is offered for sale.
(17)
State or imply that life insurance proceeds payable at death are in lieu of
"profits" or shares of surplus the policyholder would have received had
he
they lived
or otherwise infer that life insurance protection merely is incidental to the
contract.
(18) State or imply that
sales of a policy are limited to shareholders, persons recommended by
shareholders, or to insurance released by
shareholders, unless an assignable option to
purchase life insurance is granted to each shareholder, which option may not be
assigned to the life insurance company, and a record of all assignments
identifying both assignor and assignee is maintained by the company, except that this paragraph shall not apply to or
constitute evidence of the wrongful sale of any policy(s), the form of which
has been filed with and not disapproved by the superintendent of insurance
pursuant to Chapter 3915. of the Revised Code, if such sale was made prior to
the effective date of this rule.
(19) State or imply that policyholders who
are said to act as "centers of influence" (or descriptions of similar context) for an insurance company will share, because of so acting, in the company's surplus,
earnings or profits in some preferential manner based
on those actions, recognition, or status unless the preference is clearly
expressed in the provisions contained in
the policy form provisions filed with
and not disapproved by the department.
of insurance; (a
A provision that the "policy
shall participate
participates in the surplus of the company" does not
create such a preference
as such language by statute
because it is common to participating
policies), except that this paragraph shall not
apply to or constitute evidence of the wrongful sale of any policy(s), the form
of which has been filed with and not disapproved by the superintendent of
insurance pursuant to Chapter 3915. of the Revised Code, if such sale was made
prior to the effective date of this rule.
(20) Describe or refer to premium payments in
language that states that the payment is a "deposit" unless:
(a) The payment establishes a debtor-creditor
relationship between the life insurance company and the policyholder and a
showing is made as to when and how the deposit may be withdrawn:
; or
(b) The term is used in conjunction with the
word "premium" in such
a manner as to
indicate
that clearly
indicates the true character of the
payment;
.
(21) Provide any illustration or projection
of future dividends on a policy unless:
(a)
The illustration or projection is based upon the experience currently used by
the insurance company for dividends or upon a scale adopted by the
company,
;
and
(b) The illustration or
projection clearly indicates that the dividends shown are not guaranteed;
.
(22) Use the words "dividends,"
"cash dividends," "surplus," or similar phrases in such a manner as
to
that would state or imply that the
payment of dividends in any amount is guaranteed or certain to occur.
(23) State or imply that a purchaser of a
policy will share in all or part of the earnings, profits or net operating
gains of the insurance company, provided that
(nothing in this subsection is intended to
prohibit a representation that a holder of a participating life insurance
policy will participate equitably in any future distributions out of the
surplus of the company).
(24) State that the insured is guaranteed
certain benefits if the policy is allowed to lapse without making an adequate
explanation of the nonforfeiture benefits.
(25) Describe a life insurance policy or
related premium payments
therefor in terms of "units of
participation" or "units," or use the words "contract," "contract plan,"
"plan," or similar terms, unless accompanied by other language clearly
indicating the reference is to a life insurance policy.
(26) Include in sales kits and prepared sales
presentations proposed answers, to be used in response to a prospect's
questions as to whether life insurance is being sold, which are designed to
avoid a clear and unequivocal statement that life insurance is the subject
matter of the solicitation.
(27)
Display in any manner
material to a
prospective policyholder any material which
of life insurance or endowment benefits that
includes illustrations, using dollar amounts, in
connection with the proposed sale of a life insurance policy or endowment
benefits unless the material clearly identifies the source of the
dollar amounts and the subject to which such amounts pertain.
(28) Make any general statement that
insurance companies make a profit because of policy lapse or
surrenders.
(29) Make any
comparison to the past experience of
between the policy being offered and a previous or
prior policy or the life insurance companies that issued
a
that policy
represented to be similar to that being offered if
such
if the previous or prior policy
currently is unlawful to issue and without
making
is no longer lawful, unless a
fair and reasonable disclosure of other companies
that have
related to the previous or prior
policy or the life insurance company that issued that policy had
unfavorable experience with such type of
that previous or prior policy.
(30) State or imply that possession of a
license to sell life insurance or a charter to engage in the business of life
insurance is unique, or anything other than that which is required of all
persons or companies who
that market life insurance.
(31) State that the sales presentation
delivered to the prospect is on file with the department of insurance
of this state.
(32) State that a policy contains certain
features that are not found in other life insurance policies, unless that
statement is true.
(33) Represent that an option to purchase
insurance in the future is equivalent to having in
force currently the
that additional
amount of insurance obtainable through exercise of the option
actually in force.
(34) Offer to sell any life insurance policy
or annuity contract in any capacity other than that of a fully licensed life
insurance agent.
(35)
Make reference to
Reference a policy of life insurance or an annuity
contract in such a manner
as to
that
would misrepresent the true nature of the policy or contract.
(36) Distribute any literature or make any
statement about any other company or any of its policies based upon the
company's being required to change any policy forms,
or its sales, marketing, advertising, or other
related materials or presentations
for the purpose of inducing
to induce any policyholder or prospect to
purchase, amend, lapse, forfeit, change, or
surrender insurance.
(37) State or
imply that a prospective policyholder must purchase a policy immediately upon
initial contact of such prospective
policyholder by agent or lose the opportunity to purchase
such
that
policy.
(38) The above listing of
proscribed acts is not intended to be exhaustive; other acts, not listed above
but otherwise unlawful, will not be condoned.
(F) Penalties
A violation of any of the provisions
of this rule by whatever means, including but not being limited to the use of
presentations, whether involving language or illustrations disseminated by
means of sales kits, policy jackets, letters, personal confrontations, visual
aids or other media, shall be deemed to be in violation of the insurance law of
this state and shall subject any person, firm or corporation so violating any
provisions of this rule to all penalties provided by law.
