Utah Admin. Code R590-285-17 - Standards for Marketing

(1) Every insurer or other entity marketing limited long-term care insurance coverage in this state, directly or through a producer, shall:

(a)

(i) establish marketing procedures and training requirements to assure that:

(ii) any marketing activities, including any comparison of policies, by its producers will be fair and accurate; and

(b) excessive insurance is not sold or issued;

(c) display prominently by type, stamp, or other appropriate means, on the first page of the outline of coverage and policy the following: "Notice to buyer: This policy may not cover all of the costs associated with limited long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations";

(d) provide copies of the disclosure form required in Appendix A to the applicant;

(e) inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for limited long-term care or long-term care insurance already has accident and sickness or limited long-term care insurance and the types and amounts of any such insurance;

(f) establish auditable procedures for verifying compliance with Subsection R590-285-17(1);

(g) use the terms "noncancellable" or "level premium" only when the policy or certificate conforms to Subsection R590-285-5(1)(c) or (d), as applicable; and

(h) provide an explanation of contingent benefit upon lapse provided for in Subsection R590-285-22(4).

(2) In addition to the practices prohibited in Section 31A-23a-402, the following acts and practices are prohibited.

(a) Twisting. Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy, or to take out a policy of insurance with another insurer.

(b) High pressure tactics. Employing any method of marketing having the effect of, or tending to induce the purchase of, insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase, or recommend the purchase of insurance.

(c) Cold lead advertising. Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company.

(d) Misrepresentation. Misrepresenting a material fact in selling or offering to sell a limited long-term care insurance policy.

(3)

(a) An insurer offering a limited long-term care policy to an association, shall require the association:

(i) when endorsing or selling limited long-term care insurance to educate its members concerning limited long-term care issues in general so that its members can make informed decisions;

(ii) to provide objective information regarding limited long-term care insurance policies or certificates endorsed or sold by such associations to ensure that members of such associations receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold; and

(iii) disclose in any limited long-term care insurance solicitation:

(A) the specific nature and amount of the compensation arrangements, including all fees, commissions, administrative fees, and other forms of financial support, that the association receives from endorsement or sale of the policy or certificate to its members; and

(B) a brief description of the process under which the policies and the insurer issuing the policies were selected.

(b) If the association and the insurer have interlocking directorates or trustee arrangements, the insurer shall require the association to disclose that fact to its members.

(c) The insurer shall require the board of directors of associations selling or endorsing limited long-term care insurance policies or certificates to review and approve the insurance policies as well as the compensation arrangements made with the insurer.

(d) The insurer shall also:

(i) actively monitor the marketing efforts of the association and any producer; and

(ii) review and approve all marketing materials or other insurance communications used to promote sales or marketing sent to members, regarding the policies or certificates.

(e) The insurer may not issue a limited long-term care policy or certificate to an association or continue to market such a policy or certificate unless the insurer certifies annually that the association has complied with the requirements set forth in this subsection.

(f) An insurer's failure to comply with the filing and certification requirements of this section constitutes an unfair trade practice in violation of Section 31A-23a-402.

Notes

Utah Admin. Code R590-285-17

Adopted by Utah State Bulletin Number 2021-05, effective 2/23/2021