Rule 120-2-10-.09 - Life, Annuities and Accident and Sickness Insurance Policy Language Simplification Standards(1) The purpose of this Rule is to establish minimum ease of reading standards, pursuant to O.C.G.A. Sections 33-2-9 and 33-3-25, for language used in policies, contracts, coverage booklets provided by insurers to certificate holders, and certificates of life insurance, accident and sickness insurance, credit life insurance and credit accident and sickness insurance delivered or issued for delivery in this State on and after January 1, 1984. This Rule is not intended to increase the risk assumed by insurance companies or other entitles subject to this Rule or to supersede their obligation to comply with the substance of other insurance legislation applicable to life, annuities, accident and sickness, credit life or credit accident and sickness insurance policies. This Rule is not intended to impede flexibility and innovation in the development of policy forms or content or to lead to the standardization of policy forms or content.(2) As used in this Rule: (a) 'Policy' or 'policy form' means any policy contract, plan or agreement of life, annuities or accident and sickness insurance, including credit life and credit accident and sickness insurance, delivered or issued for delivery in this State by any company subject to this Rule; any certificate, contract or policy issued by a fraternal benefit society; any coverage booklet provided by insurers to certificate holders or any certificate issued pursuant to a group insurance policy delivered or issued for delivery in this State.(b) 'Company' or insurer' means any life or accident and sickness insurance company, fraternal benefit society, nonprofit medical service corporation, nonprofit hospital service corporation, health care plan, dental care plan, vision care plan, pharmaceutical plan, health maintenance organization, and all similar type organizations.(c) 'Commissioner' means the Insurance Commissioner of this State.(3) This Rule shall apply to all policies delivered or issued for delivery in this State by any insurer on or after the date such forms must be approved under this Rule, but nothing in this Rule shall apply to:(a) any policy which is a security subject to federal jurisdiction;(b) any group policy covering a group of 1,000 or more lives at date of issue, other than a group credit life insurance policy or a group credit accident and sickness insurance policy; however, this shall not exempt the language contained in any certificate issued pursuant to a group policy delivered or issued for delivery in this State;(c) any group annuity contract which serves as a funding vehicle for pension, profit sharing, or deferred compensation plans;(d) any form used in connection with, as a conversion from, as an addition to, or in exchange pursuant to a contractual provision for, a policy delivered or issued for delivery on a form approved or permitted to be issued prior to the dates such forms must be approved under this Rule; or(e) the renewal of a policy delivered or issued for delivery prior to the dates such forms must be approved under this Rule.(4) In addition to any other requirements of law, no policy forms, except as stated in paragraph (3) of this Rule, shall be delivered or issued for delivery in this State on or after the dates such forms must be approved under this Rule, unless: (a) the text achieves a minimum score of forty on the Flesch reading ease test, or an equivalent score on any other comparable test as provided in paragraph (6) of this Rule;(b) it is printed, except for specification pages, schedules and tables is not less than ten-point type, one-point leaded;(c) the style, arrangement and overall appearance of the policy give no undue prominence to any portion of the text of the policy or to any endorsements or riders; and(d) it contains a table of contents or an index of the principal sections of the policy, if the policy has more than 3,000 words printed on three or fewer pages of text, or if the policy has more than three pages regardless of the number of words.(5) For the purpose of this Section, a Flesch reading ease test score shall be measured by the following method: (a) For policy forms containing 10,000 words or less of text, the entire form shall be analyzed. For policy forms containing more than 10,000 words, the readability of two, 200 word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least twenty printed lines.(b) The number of words and sentences in the text shall be counted and the total number of words divided by the total number of sentences. The figure obtained shall be multiplied by a factor of 1.015.(c) The total number of syllables shall be counted and divided by the total number of words. The figure obtained shall be multiplied by a factor of 84.6.(d) The sum of the figures computed under subparagraphs (5)(b) and (5)(c) above subtracted from 206.835 equals the Flesch reading ease score for the policy form.(e) For purposes of subparagraphs (5)(b), (c) and (d) above, the following procedure shall be used: 1. a contraction, hyphenated word, or numbers and letters when separated by spaces, shall be counted as one word;2. a unit of words ending with a period, semicolon, or colon, but excluding headlines and captions, shall be counted as a sentence; and3. a syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. Where the dictionary shows two or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.(f) The term 'text' as used in this Rule shall include all printed matter except the following: 1. the name and address of the insurer; the name, number or title of the policy; the table of contents or index; captions and subcaptions; specification pages, schedules or tables; and2. any policy language which is drafted to conform to the requirements of any federal law, regulation or agency interpretation; any policy language required by any collectively bargained agreement; and medical terminology; any words which are defined in the policy; and any policy language required by law or regulation; provided, however, the insurer identifies the language or terminology excepted by this subparagraph 2. and certifies, in writing, that the language or terminology is entitled to be excepted by the subparagraph 2.(6) Any other reading test may be approved by the Commissioner for use as an alternative to the Flesch reading ease test if it is comparable in result(s) to the Flesch reading ease test.(7) Filings subject to this Rule shall be accompanied by a certificate signed by an officer of the insurer stating that is meets the minimum reading ease score on the test used or stating that the score is lower than the minimum required but should be approved in accordance with paragraph (10) of this Rule. To confirm the accuracy of any certification, the Commissioner may require the submission of further information to verify the certification in question.(8) At the option of the insurer, riders, endorsements, applications, and any other forms made a part of the policy may be scored as separate forms or as part of the policy with which they may be used.(9) Nothing in this Rule shall be construed to negate any law of this State permitting the issuance of any policy form after it has been on file for the time period specified.(10) The Commissioner may authorize a lower score than the Flesch reading ease score required in subparagraph (4) (a) of this Rule whenever, in his sole discretion, he finds that a lower score: (a) will provide a more accurate reflection of the readability of a policy form;(b) is warranted by the nature of a particular policy or type or class of policy forms; or(c) is caused by certain policy language which is drafted to conform to the requirements of any State law, regulation or agency interpretation.(11) A policy form meeting the requirements of paragraph (4) or this Rule shall be approved notwithstanding the provisions of any other Laws which specify the content of policies, if the policy form provides the policyholders and claimants protection not less favorable than they would be entitled to under such laws.Ga. Comp. R. & Regs. R. 120-2-10-.09
Ga. L. 1960, pp. 289, 305. Georgia Insurance Code Secs. 33-2-9, 33-3-25.
Original Rule entitled "Consequences of Violation of Regulations" was filed on November 13, 1967; effective November 1, 1967.Amended: Rule repealed. Filed April 11, 1990; effective July 1, 1980, as specified by the Agency.Amended: Rule entitled "Life, Annuities and Accident and Sickness Insurance Policy Language Simplification Standards" adopted. Filed July 1, 1983; effective August 1, 1983, as specified by the Agency.Repealed: New Rule of same title adopted. F. Aug. 24, 1989; eff. Jan. 1, 1990, as specified by the Agency.