N.Y. Comp. Codes R. & Regs. tit. 11 § 219.4

Current through Register Vol. 46, No. 16, April 17, 2024

Section 219.4 - Form, content and disclosure requirements of advertisements

(a)

(1) Advertisements shall be truthful and not misleading in fact or in implication. The format and content of an advertisement of a life insurance policy or annuity contract shall be sufficiently complete and clear so that it is neither misleading nor deceptive, nor has the capacity or tendency to mislead or deceive. Statements made should not cloud or misdirect the consideration of the purchaser. The use of statistics, illustrations and statements which may be factually correct will not be acceptable if their impact misleads or deceives. The use of technical insurance terminology should be held to a minimum and be appropriate within the context of the advertisement.

(2) The information required to be disclosed by these rules shall not be minimized, rendered obscure, or presented in an ambiguous fashion or intermingled with the text of the advertisement so as to be confusing or misleading.

(3) Whether an advertisement has the tendency or capacity to mislead or deceive shall be determined by the superintendent from the overall impression that the advertisement may be reasonably expected to create upon a person not knowledgeable in insurance matters.

(b) With respect to testimonials or endorsements, dramatized or otherwise, the following guidelines shall apply:

(1) Testimonials must be genuine, represent the current opinion of the person giving the testimonial, be applicable to the policy advertised, if any, and be accurately reproduced. In using a testimonial, the insurer makes as its own all of the statements contained therein, and the advertisement, including such statements, is subject to all the provisions of these rules.

(2) If the individual giving a testimonial or an endorsement, in writing or otherwise, has a financial interest in the insurer or a related entity as a stockholder, director, officer, employee or otherwise, or receives any benefit directly or indirectly other than union scale wages where it is required that they be paid, such fact shall be disclosed in the advertisement. The payment of substantial amounts, directly or indirectly, for "travel and entertainment" in connection with the filming or recording of TV or radio advertisements removes the filming or recording from the category of an unsolicited testimonial and requires disclosure of such compensation.

(3) An advertisement shall not state or imply that an insurer or a policy has been approved or endorsed by a group of individuals, society or association, or other organization unless such is the fact and unless any proprietary, financial or other relationship between the organization and the insurer is disclosed. If the entity making the endorsement or testimonial has been formed by the insurer, is owned, controlled or managed by the insurer, or the person or persons who own or control the insurer, or receives any payment or other consideration from the insurer for making such endorsement or testimonial, such fact shall be disclosed in the advertisement.

(4) When actors and models are used in presenting testimonials and endorsements, this fact must be disclosed clearly.

(c) The use of the terms instant, savings, guaranteed cost, guaranteed renewable, noncancellable, deposit, investment, or words of similar import, or phrases which include such words, may, in the context used, be deemed to be misleading and capable of being deceptive.

(d) The use of the terms just, only, merely, necessary, minimum, or words of similar import, may, in the context used to describe any limitation or exclusion, be deemed to be misleading and capable of being deceptive.

(e) The words free, no cost, without cost, no additional cost, at no extra cost, without additional cost, or words of similar import, may not be used with respect to any benefit or service being made available with the policy. An advertisement may specify the charge for a benefit or a service, or may state that a charge is included in the premium, or use other appropriate language.

(f) An advertisement shall not state or imply in any way which exaggerates any benefit beyond the terms of the policy, that ownership of the policy will solve financial problems.

(g) An advertisement shall not disparage a competing method of selling. An advertisement shall not state or imply that the objectivity or quality of the advice given by a solicitor is in any way related to the method of his or her compensation.

(h) Any insurer using the phrase low cost, or similar term, to characterize its operation, policy portfolio, or a particular policy form shall, upon request of the superintendent, submit to the superintendent such evidence as it may have to substantiate such use.

(i) Dividends are a return of premium and it is misleading and deceptive to refer to them as being tax-free, or to use words of similar import, unless they are used within an instructive context and the nature of the dividend as a return of premium is clearly indicated.

(j) No advertisement shall omit material information or use words, phrases, statements, references or illustrations if such omission or such use 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, premium payable, or State or Federal tax consequences. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale, or that the purchaser can receive a refund of the premium if not satisfied, does not remedy misleading statements.

(k) Any limitations in the policy which would reduce or eliminate the payment of the face or stated amount should be clearly stated, together with the mount of, or formula for, determining any reduced payment. The return of premium, with or without interest, in lieu of the face amount, shall be designated as a limited benefit and be clearly described.

(l) An advertisement shall not use logos, names or titles for a policy in a context which might imply that the policy is being sponsored or endorsed by an organization, if such is not the case.

(m) In the event an advertisement uses nonmedical, no medical examination required, or similar terms where issue is not guaranteed, such terms shall be accompanied, in each instance, by a disclosure of equal prominence and in juxtaposition thereto to the effect that issuance of the policy or payment of benefits may depend upon the answers given in the application and the truthfulness thereof.

(n) An advertisement shall not state or imply that the payment or amount of dividends is guaranteed. If dividends are illustrated, they must be based on the insurer's current dividend scale and the illustration must contain a statement to the effect that they are not to be construed as guarantees or estimates of dividends to be paid in the future.

(o) An advertisement shall not create the impression that the insurer, its financial condition or status, the payment of its claims, or the merits, desirability or appropriateness of its policy forms or kinds of plans of insurance, are superior to what can be found elsewhere in the industry, unless such can be proven.

(p) In all advertisements made by an insurer, or on its behalf, the name of the insurer shall be clearly identified, together with the name of the city, town or village in which it has its home office in the United States. An advertisement shall prominently describe the type of policy advertised. If a specific policy or policy series is being advertised, the form or series number or other appropriate description shall be shown. An advertisement shall not use a trade name, an insurance group designation, name of the parent company or affiliate of the insurer, name of a particular division of the insurer, service mark, slogan, symbol or other device or reference if such use would have the tendency to mislead or deceive as to the true identity of the insurer, or create the impression that someone other than the insurer would have any responsibility for the financial obligation under a policy.

(q) Notwithstanding the provisions of subdivision (p) of this section, a joint advertisement may include the name of an unauthorized insurer and would not be considered calling attention to the unauthorized insurer, provided that the unauthorized insurer does not do an insurance business in New York and the advertisement contains a clear and conspicuous disclaimer indicating the licensing status of the entities relative to New York. An acceptable disclaimer could either state that the unauthorized insurer is not authorized in New York and does not do an insurance business in New York or name the insurer that is authorized to sell insurance in New York. Any joint advertisement of a specific insurance policy or policies may also use general disclaimers such as "This insurance policy is not available in all states." or "Some insurance policies are not available in all states." The name of the unauthorized insurer shall not be more prominent than the name of the authorized insurer. The disclaimer shall be of prominence and placement relative to references to unauthorized insurers or insurance policies not available in New York so as not to minimize, render obscure or otherwise diminish the importance of the information contained therein.

(r) If coverage varies with duration, this fact should be prominently disclosed and illustrated.

(s) An advertisement of a particular policy shall not state or imply that prospective insureds shall be or become members of a special class, group or quasi-group, and as such enjoy special rates, dividends or underwriting privileges, unless such is the fact.

(t) An advertisement of an individual life insurance policy or combination of such policies shall not state or imply that such policy or combination of such policies 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 such is the fact.

(u) When an advertisement contains an application to be completed by the applicant and returned by mail for a direct response product, such application shall be identical to the application form approved for the policy being offered, except that the size, color and type of paper stock may be different.

(v) An advertisement shall not describe an enrollment period as special or limited or use similar words or phrases in describing it when the insurer uses successive enrollment periods as its usual method of marketing its policies.

(w) An advertisement shall not state or imply 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, unless such is the fact.

(x) 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 reduced initial premium. When an insurer charges an initial premium that differs in amount from that of the renewal premium payable on the same mode, all references to the reduced initial premium shall be followed by an asterisk or other appropriate symbol which refers the reader to that specific portion of the advertisement which contains the full rate schedule for the policy being advertised.

(y) An advertisement shall not emphasize investment or tax features and omit or minimize insurance features.

N.Y. Comp. Codes R. & Regs. Tit. 11 § 219.4