230 R.I. Code R. 230-RICR-20-30-1.12

Current through November 7, 2024

Section 230-RICR-20-30-1.12 - Advertising Rules and Guidelines for Interpretation

1.12.1Purpose

A. The purpose of § 1.12 of this Part is to assure truthful and adequate disclosure of all material and relevant information in the advertising of health benefits. This purpose is to be accomplished by the establishment of, and adherence to, certain minimum standards and guidelines of conduct in the advertising of health benefits in a manner which prevents unfair competition among insurers and is conducive to the accurate presentation and description to the public of such benefits offered through various advertising media.

B. Guideline 1

1. Disclosure is one of the principal objectives of these rules and §1.12.1 of this Part states specifically that the rules shall assure "truthful and adequate disclosure of all material and relevant information". These rules specifically prohibit some previous advertising techniques.

1.12.2Applicability

A. § 1.12 of this Part shall apply to any health benefits "advertisement," as that term is hereinafter defined in §1.12.3(A), (F), (G), (H) of this Part unless otherwise specified in § 1.12 of this Part, intended for presentation, distribution or dissemination in the State of Rhode Island where such presentation, distribution or dissemination is made either directly or indirectly by or on behalf of an insurer or agent, as defined in this Part.

B. Guideline 2-A

1. These rules apply to any "advertisement" as that term is defined in §1.12.3(A), (F), (G), (H) of this Part unless otherwise specified in the rules.

2. These rules apply to group and blanket as well as individual health benefit contracts. Certain distinctions, however, are applicable to these categories.

3. Among them is the level of conversance with insurance, a factor which is covered by §1.12.5(A) of this Part.

C. Every insurer shall establish and at all times maintain a system of control over the content, form and method of dissemination of all advertisements of its health benefit contracts. All such advertisements, regardless of by whom written, created, designed, or presented, shall be the responsibility of the insurer whose health benefit contracts are so advertised.

D. Guideline 2-B

1. Advertising materials which are reproduced in quantity shall be identified by form numbers or other identifying means in the case of advertisements not subject to the requirements of §1.12.13 of this Part. Such identification shall be sufficient to distinguish an advertisement from other advertising materials, health benefit contracts, applications or other materials used by the insurer.

1.12.3Definitions

A. An advertisement for the purpose of § 1.12 of this Part shall include:

1. printed and published material, audio visual material, and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio scripts, TV scripts, billboards, and similar displays;

2. descriptive literature and sales aids of all kinds issued by an insurer or agent, as defined in this Part for presentation to members of the insurance buying public, including but not limited to circulars, leaflets, booklets, depictions, illustrations, and form letters; and

3. prepared sales talks, presentations, and material for use by agents and other sales representatives.

B. Guideline 3-A

1. The scope of the term "advertisement" extends to the use of all media for communication to the general public §1.12.3(A)(1) of this Part to the use of all media for communication to specific members of the general public §1.12.3(A)(2) of this Part and to the use of all media for communication by agents, brokers, and solicitors.

2. The definition of "advertisement" includes advertising material included with a contract when the contract is delivered and material used in the solicitation of renewals and reinstatements.

3. The definition of "advertisement" does not include:

a. material to be used solely for the training and education of an insurer's employees, agents, or brokers;

b. material in house organs or insurers;

c. communications within an insurer's own organization not intended for dissemination to the public;

d. individual communications of a personal nature with current contract holders other than material urging such contract holders to increase or expand coverages;

e. correspondence between a prospective group or blanket contractholder and an insurer in the course of negotiating a group or blanket contract;

f. court approved material ordered by a court to be disseminated to contract holders; or

g. a general announcement from a group or blanket contractholder to eligible individuals on an employment or membership list that a contract or program has been written or arranged; provided, the announcement clearly indicates that it is preliminary to the issuance of a booklet.

C. "Exception" for the purpose of § 1.12 of this Part means any provision in a contract whereby coverage for a specified hazard is entirely eliminated; it is a statement of a risk not assumed under the contract.

D. "Reduction" for the purpose of § 1.12 of this Part means any provision which reduces the amount of the benefit; a risk of loss is assumed but payment upon the occurrence of such loss is limited to some amount or period less than would be otherwise payable had such reduction not been used.

E. "Limitation" for the purpose of § 1.12 of this Part means any provision which restricts coverage under the contract other than an exception or a reduction.

F. "Institutional Advertisement" for the purpose of § 1.12 of this Part means an advertisement having as its sole purpose the promotion of the Reader's or viewer's interest in the concept of health benefits, or the promotion of the insurer.

G. "Invitation to Inquire" for the purpose of § 1.12 of this Part means an advertisement having as its objective the creation of a desire to inquire further about the product and which is limited to a brief description of the loss for which the benefit is payable, and which may contain:

1. The dollar amount of benefit payable, and/or

2. The period of time during which the benefit is payable, provided the advertisement does not refer to cost. An advertisement which specifies either the dollar amount of benefit payable or the period of time during which the benefit is payable shall contain a provision in effect as follows:

a. "For costs and further details of the coverage, including exclusions, any reductions or limitations and the terms under which the health benefit contract may be continued in force, see your agent or write to the company."

H. "Invitation to Contract" for the purpose of § 1.12 of this Part means an advertisement which is neither an invitation to inquire nor an institutional advertisement.

1.12.4Method of Disclosure of Required Information

A. All information required to be disclosed by § 1.12 of this Part shall be set out conspicuously and in close conjunction with the statements to which such information relates or under appropriate captions of such prominence that it shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of the advertisement so as to be confusing or misleading.

B. Guideline 4

1. This rule permits the use of either of the following alternative methods of disclosure:

a. The first alternative provides for the disclosure of exceptions, limitations, reductions and other restrictions conspicuously and in close conjunction with the statements to which such information relates. This may be accomplished by disclosure in the description of the related benefits or in a paragraph set out in close conjunction with the description of contract benefits.

b. The second alternative provides for the disclosure of exceptions, limitations, reductions and other restrictions not in conjunction with the provisions describing contract benefits but under appropriate captions of such prominence that the information shall not be minimized, rendered obscure or otherwise made to appear unimportant. The phrase "under appropriate captions" means that the title must be accurately descriptive of the captioned material. Appropriate captions include the following: "Exceptions," "Conditions Not Covered," and "Exceptions and Reductions." The use of captions such as, or similar to, the following are not acceptable because they do not provide adequate notice of the significance of the material: "Extent of Coverage," "Only These Exclusions," or "Minimum Limitations".

c. In considering whether an advertisement complies with the disclosure requirements of this rule, the rule must be applied in conjunction with the form and content standards contained in §1.12.5 of this Part.

1.12.5Form and Content of Advertisements

A. The format and content of an advertisement of a health benefit contract shall be sufficiently complete and clear to avoid deception or the capacity or tendency to mislead or deceive. Whether an advertisement has a capacity or tendency to mislead or deceive shall be determined by the Director of Business Regulation or his designee from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence, within the segment of the public to which it is directed.

1. Guideline 5-A

a. This rule must be applied in conjunction with §§1.12.1 and 1.12.4 of the rules. This rule refers specifically to "format and content" of the advertisement and the "overall" impression created by the advertisement. This involves factors such as, but not limited to, the size, color and prominence of type used to describe benefits. The word "format" means the arrangement of the text and the captions.

b. This rule requires distinctly different advertisements for publication in newspapers or magazines of general circulation as compared to scholarly, technical or business journals or newspapers. Where an advertisement consists of more than one piece of material, each piece of material must, independent of all other pieces of material, conform to the disclosure requirements applicable to the appropriate form of advertisement as defined in §1.12.3(F) through (H) of this Part.

B. Advertisements shall be truthful and not misleading in fact or in implication. Words or phrases, the meaning of which is clear only by implication or by familiarity with insurance terminology, shall not be used.

1. Guideline 5-B

a. This rule prohibits the use of incomplete statements and words or phrases which have the tendency or capacity to mislead or deceive because of the reader's unfamiliarity with insurance terminology. Therefore, words, phrases and illustrations used in an advertisement must be clear and unambiguous and, if the advertisement uses insurance terminology, sufficient description of a word, phrase or illustration shall be provided by definition or description in the context of the advertisement. As implied in §1.12.5(A) of this Part, distinctly different levels of comprehension may be anticipated of the subscribers of various publications.

1.12.6Advertisements of Benefits Payable, Losses Covered or Premiums Payable

A. Deceptive Words, Phrases, or Illustrations Prohibited.

1. No advertisement shall omit information or use words, phrases, statements, references or illustrations if the omission of such information or use of such words, phrases, statements, references, or illustrations has the capacity, tendency, or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any health benefit payable, loss covered or premium payable. The fact that the health benefit contract is made available to a prospective insured for inspection prior to consummation of the sale or an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.

2. Guideline 6-A(1)

a. This rule prohibits words, phrases or illustrations which create deception to the reader by omission or commission. The following examples are illustrations of the prohibitions created by the rule.

(1) An advertisement which describes any benefits that vary by age must disclose that fact.

(2) An advertisement which uses a phrase such as "no age limit," if benefits or premiums vary by age or if age is an underwriting factor, must disclose that fact.

(3) Advertisements, applications, requests for additional information and similar material are unacceptable if they state or imply that the recipient has been individually selected to be offered insurance or has had his eligibility for such insurance individually determined in advance when the advertisement is directed to all persons in a group or to all persons whose names appear on a mailing list.

(4) Advertisements which indicate that a particular coverage or health benefit contract is exclusively for "preferred risks" or a particular segment of the population are acceptable risks, when such distinctions are not maintained in the issuance of health benefit contracts, are not acceptable.

(5) Advertisements for group and franchise group plans which provide a common benefit or a common combination of benefits shall not imply that the insurance coverage is tailored or designed specifically for that group, unless such is the fact.

(6) It is unacceptable to use terms such as "enroll" or "join" to imply group or blanket insurance coverage when such is not the fact.

(7) Any advertisement which contains statements such as "anyone can apply," or "anyone can join" other than with respect to a guaranteed issue health benefit contract for which administrative procedures exist to assure that the health benefit contract is issued within a reasonable period of time after the application is received by the insurer is unacceptable.

(8) An advertisement which states or implies immediate coverage or guaranteed issuance of a health benefit contract is unacceptable unless suitable administrative procedures exists so that the health benefit contract is issued within a reasonable period of time after the application is received by the insurer.

(9) Any advertisement which uses any phrase or term such as "here is all you do to apply," "simply" or "merely" to refer to the act of applying for a health benefit contract which is not a guaranteed issue health benefit contract is unacceptable, unless it refers to the fact that the application is subject to acceptance or approval by the insurer.

(10) Applications, request forms for additional information and similar related materials are unacceptable if they resemble paper currency, checks, bonds, stock certificates, etc.

(11) No advertisement shall employ devices which are designed to create undue fear or anxiety in the minds of those to whom they are directed. Unacceptable examples of such devices are:

(AA) The use of phrases such as "cancer kills somebody every two minutes" and "total number of accidents" without reference to the total population from which such statistics are drawn. (As an example of a permissible device, data prepared by the American Cancer Society are acceptable provided their source is noted and they are not overemphasized),

(BB) The use of phrases such as "the finest kind of treatment," implying that such treatment would be unavailable without insurance;

(CC) The reproduction of newspaper articles, etc., containing irrelevant facts and figures;

(DD) The use of illustrations which unduly emphasize automobile accidents, crippled persons or persons confined in beds who are in obvious distress or receiving hospital or medical bills or persons being evicted from their homes due to their inability to pay hospital bills;

(EE) The use of phrases such as "financial disaster," "financial distress," "financial shock," or other phrases implying that financial ruin is likely without insurance, where used in an advertisement which comes within §1.12.6(A)(2)(a)(7) of this Part relating to contracts covering specified illnesses or specified accidents only.

(12) An advertisement which uses the word "plan" without identifying it as an "insurance plan" is not permissible unless such plan is in fact, not an insurance plan or unless specific provisions in the General Laws of Rhode Island declare that it is not an insurance plan.

(13) An advertisement which implies in any manner that the prospective insured may realize a profit from obtaining hospital, medical, or surgical coverage is not acceptable.

(14) An advertisement shall not state or imply by word, phrase, or illustration that the benefits being offered will supplement any other insurance policy, insurance-type concept, or governmental plan if such is not the fact.

(15) An advertisement of a hospital or other similar facility confinement benefit that makes reference to the benefit being paid directly to the insured is misleading unless, in making such a reference, the advertisement includes a statement that the benefits may be paid directly to the hospital or other health care facility if an assignment of benefits is made by the insured. An advertisement of medical and surgical expense benefits shall comply with this § 1.12 of Part in regard to the disclosure of assignments of benefits to providers of services. Phrases such as "you collect," "you get paid," "pays you," or other words or phrases of similar import are acceptable so long as the advertisement indicates that it is payable to the insured or someone designated by the insured.

(16) An advertisement which refers to "hospitalization for injury or sickness" omitting the word "covered" when the health benefit contract excludes certain sicknesses or injuries is unacceptable. Continued reference to "covered injury or sickness" is not necessary where this fact has been prominently disclosed in the advertisement and where the descriptions of sicknesses or injuries not covered are prominently set forth.

(17) An advertisement which refers to "whenever you are hospitalized" or "while you are confined in the hospital" omitting the phrase "for covered injury or sickness," if the health benefit contract excludes certain injuries or sickness, is unacceptable. Continued reference to "covered injury or sickness" is not necessary where this fact has been prominently disclosed in the advertisement and where the description of sicknesses or injuries not covered are prominently set forth.

(18) Advertisements which state that benefits are provided when "you go to the hospital" are unacceptable unless the advertisement clearly sets forth the extent of the coverage.

(19) An advertisement which fails to disclose any waiting or elimination periods for specific benefits is unacceptable.

(20) An advertisement for a limited health benefit contract, or hospital indemnity contract, or a plan of insurance which covers only certain causes of loss (such as dread disease) or which covers only a certain type of loss (such as hospital confinement) is unacceptable if:

(AA) the advertisement refers to a total benefit maximum limit payable under the health benefit contract in any headline, lead-in or caption without also in the same headline, lead-in or caption specifying the applicable daily limits and other internal limits;

(BB) the advertisement states any total benefit limits without stating the periodic benefit payment, if any, and the length of time the periodic benefit would be payable to reach the total benefit limit;

(CC) the advertisement prominently displays a total benefit limit which would not, as a general rule, be payable under an average claim.

(21) Advertisements which emphasize total amounts payable under hospital, medical, or surgical coverage or other benefits in a health benefit contract, such as benefits for private duty nursing, are unacceptable unless the actual amounts payable per day for such indemnity or benefits are stated.

(22) Examples of what benefits may be paid under the health benefit contract shall not disclose only maximum benefits unless such maximum benefits are paid for loss from common and probable illnesses or accidents rather than exceptional or rare illnesses or accidents or periods of confinement for such exceptional or rare accidents or illnesses.

(23) When a range of benefit levels is set forth in an advertisement, it must be made clear that the insured will receive only the benefit level written or printed in the health contract selected and issued. Language which implies that the insured may select the benefit level at the time of filing claims is unacceptable.

(24) Advertisements for health benefit contracts whose premiums are modest because of their limited coverage or limited amount of benefits shall not describe premiums as "low," "low cost," "budget," or use qualifying words of similar import. § 1.12 of this Part also prohibits the use of words such as "only" and "just" in conjunction with statements of premium amounts when used to imply a bargain.

(25) Advertisements which state or imply that premiums will not be changed in the future are not acceptable unless the advertised health benefit contracts so provide.

(26) An advertisement which does not require the premium to accompany the application must not over-emphasize that fact and must make the effective date of the coverage clear.

(27) An advertisement which exaggerates the effect of statutorily mandated benefits or required health benefit contract provisions or which implies that such provisions are unique to the advertised health benefit contract is unacceptable. For example, the phrase, "Money Back Guarantee" is an exaggerated description of the ten-day right to examine the health benefit contract and is not acceptable.

(28) An advertisement which implies that a common type of health benefit contract or a combination of common benefits is "new," "unique," "a bonus," "a break- through," or is otherwise unusual is unacceptable. Also, the addition of a novel method of premium payment to an otherwise common plan of insurance does not render it "new."

(29) An advertisement which is an invitation to contract which fails to disclose the amount of any deductible and/or the percentage of any coinsurance factor is unacceptable.

(30) An advertisement which fails to state clearly the type of coverage being offered is not acceptable.

(31) Language which states or implies that each member under a "family" contract is covered as to the maximum benefits advertised, where such is not the fact, is unacceptable.

(32) The importance of diseases rarely or seldom found in the class of person to whom the health benefit contract is offered shall not be exaggerated in an advertisement.

(33) A television, radio, mail, or newspaper advertisement which is designed to produce leads either by use of a coupon or a request to write to the company or a subsequent advertisement prior to contact must include information disclosing that an agent may contact the applicant if such is the fact.

(34) Advertisements for health benefit contracts designed to supplement Medicare or which are otherwise designed for issue to the elderly shall not employ devices which are designed to create undue anxiety in the minds of such persons. Such phrases as "here is where most people over 65 learn about the gaps in Medicare," or "Medicare is great, but..." or which otherwise exaggerate the gaps in Medicare coverage are unacceptable. Phrases or devices which unduly excite fear of dependence upon relatives or charity are unacceptable. Phrases or devices which imply that long sicknesses or hospital stays are common among the elderly are unacceptable.

(35) An advertisement implying that the coverage is supplemental to Medicare, if it does not explain the manner in which it is supplemental to Medicare coverage, is not acceptable.

(36) An advertisement for a health benefit contract designed to supplement benefits under Medicare is unacceptable if the advertisement:

(AA) fails to disclose in clear language which of the Medicare benefits the health benefit contract is designed to supplement and which of the Medicare benefits the health benefit contract is not designed to supplement or if it otherwise implies that Medicare provides only those benefits which the health benefit contract is designed to supplement;

(BB) describes the in-patient hospital coverage of Medicare as "hospital Medicare" or "Medicare Part AA" when the health benefit contract does not supplement the non-hospital or the psychiatric hospital benefits of Medicare Part A (phrases to the effect of "the in-hospital portion of Medicare Part A" are acceptable);

(CC) fails to clearly describe the operation of the Part of Parts of Medicare which the health benefit contract is designed to supplement;

(DD) describes those Medicare benefits not supplemented by the health benefit contract in such a way as to minimize their importance relative to the Medicare benefits which are supplemented.

3. No advertisement shall contain or use words or phrases such as "all;" "full;" "complete;" "comprehensive;" "unlimited;" "up to;" "as high as;" "this policy will help fill some of the gaps that Medicare and your present insurance leave out;" or similar words and phrases, in a manner which exaggerates any benefits beyond the terms of the health benefit contract

4. Guideline 6-A(2)

a. This rule recognizes that certain words and phrases in advertising may have a tendency to mislead the public as to the extent of benefits under an advertised contract. Consequently, such terms (and those specified in the rule do not represent a comprehensive list but only examples) must be used with caution to avoid any tendency to exaggerate benefits and must not be used unless the statement is literally true in every instance. The use of the following phrases based on such terms or having the same effect must be similarly restricted: "pays hospital, surgical, etc., bills," "pays dollars to offset the cost of medical care," "safeguards your standard of living," "pays full coverage," "pays complete coverage," or "pays for financial needs." Other phrases may or may not be acceptable depending upon the nature of the coverage being advertised. For example, the phrase "this policy will help to replace your income" is unacceptable in advertising for hospital confinement (including "hospital indemnity") coverage.

b. This rule also prohibits words or phrases which exaggerate the effect of benefit payment on the insured's general well-being, such as "worryfree savings plan," "guaranteed savings," "financial peace of mind," and "you will never have to worry about hospital bills again".

c. Advertisements for contracts designed to supplement Medicare benefits are unacceptable if they fail to disclose that no hospital confinement benefits will be payable for that portion of a Medicare benefit period for which Medicare pays all hospital confinement expenses, currently sixty (60) days, other than the initial deductible if the contract so provides. The length of said period must be stated in days.

5. An advertisement shall not contain descriptions of a health benefit contract limitation, exception, or reduction, worded in a positive manner to imply that it is a benefit, such as, describing a waiting period as a "benefit builder," or stating "even pre-existing conditions are covered after two years." Words and phrases used in an advertisement to describe such health benefit contract limitations, exceptions and reductions shall fairly and accurately describe the negative features of such limitations, exceptions, and reductions of the health benefit contract offered.

6. Guideline 6-A(3)

a. Explanations must not minimize nor describe restrictive provisions in a positive manner. Negative features must be accurately set forth. Any limitations on benefits precluding pre-existing conditions must also be restated under a caption concerning exclusions or limitations, notwithstanding that the pre-existing condition exclusion has been disclosed elsewhere in the advertisement. (See Guideline 6-C(1) for additional comments on pre-existing conditions.)

b. No advertisement of a benefit for which payment is conditional upon confinement in a hospital or similar facility shall use words or phrases such as "tax free," "extra cash," "extra income," "extra pay," or substantially similar words or phrases because such words and phrases have the capacity, tendency or effect of misleading the public into believing that the health benefit contract advertised will, in some way, enable them to make a profit from being hospitalized.

7. Guideline 6-A(4)

a. The words, phrases, illustrations and concepts listed are illustrations of the words, phrases, illustrations, and concepts prohibited by the rule which create the impression of a profit or gain to be realized by the insured when hospitalized.

b. Illustrations which depict paper currency or checks showing an amount payable are deceptive and misleading and are not permissible.

c. A hospital indemnity advertisement shall not include language such as "pay for a trip to Florida," "buy a new television," or otherwise imply that the insured will make a profit on hospitalization.

d. An advertisement which uses words such as "extra," "special," or "added" to describe any benefit in the contract is unacceptable.

e. Although the rule prohibits the use of the phrase "tax free," it does not prohibit the use of complete and accurate terminology explaining the Internal Revenue Service rules applicable to the taxation of accident and sickness benefits. The IRS rules provide that the premiums paid for and the benefits received from hospital indemnity policies are subject to the same rules as loss of time premiums and benefits and are not afforded the same favorable tax treatment as premiums for expense incurred hospital, medical, and surgical benefit coverages. (Rev. Rule. 68-451 and Rev. Rule. 69-154.) Prominence either to caption, lead-in, boldface, or large type shall not be given in any manner to any statements relating to the tax status of such benefits.

8. No advertisement of a hospital or other similar facility confinement benefit shall advertise that the amount of the benefit is payable on a monthly or weekly basis when, in fact, the amount of the benefit payable is based upon a daily pro rata basis relating to the number of days of confinement. When the health benefit contract contains a limit on the number of days of coverage provided, such limit must appear in the advertisement.

9. Guideline 6-A(5)

a. This rule requires that benefits payable on a daily basis be stated as such and not on the basis of weekly or monthly equivalents. The rule also requires disclosure of the period of coverage provided by the contract.

(1) No advertisement of a health benefit contract covering only one disease or a list of specified diseases shall imply coverage beyond the terms of the health benefit contract. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.

(2) An advertisement for a health benefit contract providing benefits for specified illnesses only, such as cancer, or for specified accidents only, such as automobile accidents, shall clearly and conspicuously, in prominent type, state the limited nature of the health benefit contract. The statement shall be worded in language identical to or substantially similar to the following: "THIS IS A LIMITED CONTRACT;" "THIS IS A CANCER ONLY CONTRACT;" "THIS IS AN AUTOMOBILE ACCIDENT ONLY CONTRACT."

(3) An advertisement of a direct response insurance product shall not imply that because "no insurance agent will call and no commissions will be paid to agents that it is "a low cost plan," or use other similar words or phrases.

10. Guideline 6-A(8)

a. This rule should be applied in conjunction with §1.12.11 of this Part. Phrases such as "we cut cost to the bone" or "we deal direct with you so our costs are lower" shall not be used.

B. Exceptions, Reductions, and Limitations.

1. When an advertisement which is an invitation to contract refers to either a dollar amount, or a period of time for which any benefit is payable, or the cost of the health benefit contract, or specific health benefit, or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions, and limitations affecting the basic provisions of the health benefit contract without which the advertisement would have the capacity or tendency to mislead or deceive.

2. Guideline 6-B(1)

a. The extent of disclosure required by this rule depends upon the type of advertisement. An institutional advertisement as defined in §1.12.3(F) of this Part is not subject to this rule. An advertisement which is an invitation to inquire as defined in §1.12.3(G) of this Part which mentions either the dollar amount of benefit payable or the period of time during which the benefit is payable must include a reference to the existence of exceptions, reductions, and limitations in the manner required by §1.12.3(G) of this Part. An advertisement which is an invitation to contract as defined in §1.12.3(H) of this Part must recite the exceptions, reductions, and limitations as required by the rule and in a manner consistent with §1.12.4 of this Part.

b. If an exception, reduction, or limitation is important enough to use in a contract, it is of sufficient importance that its existence in the contract should be referred to in the advertisement regardless of whether it may also be subject matter of a provision of the Uniform Individual Accident and Sickness Policy Provision Law.

c. Some Advertisements disclose exceptions, reductions, and limitations as required, but the advertisement is so lengthy as to obscure the disclosure. Where the length of an advertisement has this effect, special emphasis must be given by changing the format to show the restrictions in a manner which does not minimize, render obscure or otherwise make them appear unimportant.

3. When a health benefit contract contains a waiting, elimination, probationary, or similar time period between the effective date of the health benefit contract and the effective date of coverage under the health benefit contract or a time period between the date loss occurs and the date benefits begin to accrue for such loss, an advertisement which is subject to the requirements of the preceding paragraph shall disclose the existence of such periods.

4. Guideline 6-B(2)

a. This rule imposes the same disclosure standards as the preceding with respect to contract provision providing for waiting, elimination, probationary, or similar time periods, between the effective date of the contract and the effective date of coverage under the contract or a time period between the date a loss occurs and the date benefits begin to accrue from such loss. The comments under §1.12.6(B)(1) of this Part are equally applicable to this Subsection. Where a contract has waiting, elimination, probationary, or other such time periods, such provisions must be stated in negative terms. This requirement is comparable to that contemplated in §1.12.6(A)(5) of this Part as to exceptions, reductions, and limitations.

b. An advertisement for a contract designed to supplement Medicare benefits is unacceptable if it fails to disclose that no hospital confinement benefits will be payable for that portion of a Medicare benefit period, currently 60 days, for which Medicare pays all hospital confinement expenses other than the initial deductible, if the contract so provides. The length of said period must be stated in days.

5. An advertisement shall not use the words "only;" "just;" "merely;" "minimum;" or similar words or phrases to describe the applicability of any exceptions and reductions, such as: "This contract is subject to the following minimum exceptions and reductions"

6. Guideline 6-B (3)

a. This rule is similar to §1.12.6(A)(5) of this Part and requires a fair and accurate description of exceptions, limitations, and reductions in a manner which does not minimize, render obscure or otherwise make them appear unimportant.

b. Advertisements must state exceptions, limitations, and reductions in the negative and must not understate any exception, limitation, or reduction or qualify any exception, limitation, or reduction to emphasize coverage described elsewhere (e.g., "Does not pay for__________, however, Medicare pays this" is not acceptable, nor is "Does not pay for the first four days in hospital for sickness, but pays for accident from first day"). (Underscoring indicates the manner in which statements are sometimes emphasized.)

c. This rule prohibits the use of any term, such as "just," "only," "merely," "necessary," or "minimum" to describe any exclusion, limitation, reduction, or exception.

C. Pre-Existing Conditions.

1. An advertisement which is subject to the requirements of Section 6(B) shall, in negative terms, disclose the extent to which any loss is not covered if the cause of such loss is traceable to a condition existing prior to the effective date of the health benefit contract. The use of the term "pre-existing condition" without an appropriate definition or description shall not be used.

2. Guideline 6-C (1)

a. This rule imposes the same disclosure standards with respect to pre-existing conditions provisions as noted in §1.12.6(B)(2) of this Part. The comments under that Guideline are equally applicable to this subsection of the rules since the pre- existing conditions provision is an exception under the rules.

b. This rule implements the objective of §1.12.6(A)(3) of this Part by requiring in negative terms a description of the effect of a pre-existing condition exclusion because such an exclusion is a restriction on coverage. The subdivision also prohibits the use of the phrase "pre-existing condition" without an appropriate definition or description of the term and prohibits stating a reduction in the statutory time limit (such as a reduction from three years to two years or to one year) as an affirmative benefit. The words "appropriate definition or description" mean that the term "pre-existing condition" must be defined as it is used by the company's claims department.

3. When a health benefit contract does not cover losses resulting from pre- existing conditions, no advertisement of the health benefit contract shall state or imply that the applicant's physical condition or medical history will not affect the issuance of the health benefit contract or payment of a claim thereunder. § 1.12 of this Part prohibits the use of the phrase "no medical examination required" and phrases of similar import, but does not prohibit explaining "automatic issue." If an insurer requires a medical examination for a specified health benefit contract, the advertisement, if it is an invitation to contract, shall disclose that a medical examination is required.

4. Guideline 6-C (2)

a. The phrase "no health questions" or words of similar import shall not be used if the contract excludes pre-existing conditions.

b. Use of a phrase such as "guaranteed issue" or "automatic issue," if the contract excludes pre-existing conditions for a certain period, must be accompanied by a statement disclosing that fact in a manner which does not minimize, render, obscure, or otherwise make it appear unimportant and is otherwise consistent with §1.12.4 of this Part.

5. When an advertisement contains an application form to be completed by the applicant and returned by mail for a direct response insurance product, such application form shall contain a question or statement which reflects the pre-existing condition provisions of the health benefit contract immediately preceding the blank space for applicant's signature. For example, such an application form shall contain a question or statement substantially as follows:

a. Do you understand that this health benefit contract will not pay benefits for any loss incurred during the first ____ year(s) after the issue date for a disease or physical condition which you now have or have had in the past? ____ YES.

b. Or substantially the following statement:

(1) I understand that the health benefit contract applied for will not pay benefits for any loss incurred during the first ____ year(s) after the issue date on account of disease or physical condition which I now have or have had in the past.

1.12.7Necessity for Disclosing Health Benefit Contract Provisions Relating to Renewability, Cancellability, and Termination

A. When an advertisement which is an invitation to contract refers to either a dollar amount or a period of time for which any benefit is payable, or the cost of the health benefit contract, or specific health benefit contract benefit, or the loss for which such benefit is payable, it shall disclose the provisions relating to renewability, cancellability, and termination and any modification of benefits, losses covered, or premiums because of age or for other reasons, in a manner which shall not minimize or render obscure the qualifying conditions.

1. Guideline 7

a. This rule imposes the same disclosure standards with respect to contract provisions relating to renewability, cancellability, and termination, modification of benefits, losses or premiums because of age or otherwise as stated in §1.12.6(B)(2) of this Part. The comments in that Guideline are equally applicable to §1.12.7 of this Part.

b. Advertisements of cancelable contracts must state that the contract is cancelable or renewable at the option of the company as the case may be. For example, the following represent illustrations: A contract which is cancelable shall be advertised in a manner similar to "This contract can be cancelled by the company at any time"; A contract which is renewable at the option of the insurance company shall be advertised in a manner similar to "This contract is renewable at the option of the company" or "The company has the right to refuse renewal of this contract" or "Renewable at the option of the insurer". Advertisements of such contracts must indicate that the insurer has the right to increase premium rates.

c. With respect to non-cancelable contracts and guaranteed renewable contracts, the rule requires that a summary of the contract provisions with respect to renewability must be set forth and defined where appropriate. The disclosure of provisions relating to renewability requires the use of language such as "non- cancelable", "non-cancelable and guaranteed renewable", or "guaranteed renewable". Unless otherwise modified by law or regulation, the use of those terms and the definitions provided shall be consistent with the definitions of those terms adopted by the National Association of Insurance Commissioners (1960 Proc. Vol. 1, P. 153).

d. The rule also requires a statement of the qualifying conditions which constitute limitations on the permanent nature of the coverage. These customarily fall into three categories:

(1) age limits,

(2) reservation of a right to increase premiums, and

(3) the establishment of aggregate limits. For example, "non-cancelable and guaranteed renewable" does not fulfill the requirement of the rule if the contract contains a terminal age of 65. In such a case, a proper statement would be "Non- cancelable and guaranteed renewable to age 65". If a guaranteed renewable contract reserves the right to increase premiums, the statement must be expanded into language similar to "guaranteed renewable to age 65 but the company reserves the right to increase premium rates on a class basis". If the contract contains an aggregate limit after which no further benefits are payable, the above statement must be amplified with the phrase "subject to a maximum aggregate amount of $50,000" or similar language. A contract may have one or more or the three basic limitations and an advertisement must describe each of those which the contract contains. The fact that a contract is guaranteed renewable shall not be exaggerated.

e. This rule also requires the disclosure of any modification of benefits or losses covered because of age or for other reasons. Provisions for reduction of benefits at stated ages must be set forth. For example, a contract may contain a provision which reduces benefits fifty percent (50%) after age sixty (60) although it is renewable to age sixty-five (65). Such a reduction would have to be set forth.

f. Also, a provision for the elimination of certain hazards at any specific ages or after the contract has been in force for a specified time would have to be set forth.

g. An advertisement for a contract which provides for step-rated premium rates based upon the contract year or the insured's attained age must disclose such rate increases and the time or ages at which such premiums increase.

h. This rule requires that the qualifying conditions of renewability must be disclosed in a manner which does not minimize or render obscure the qualifying conditions of renewal.

1.12.8Testimonials or Endorsements by Third Parties

A. Testimonials used in advertisements must be genuine, represent the current opinion of the author, be applicable to the health benefit contract advertised and be accurately reproduced. The insurer, in using a testimonial, makes as its own all of the statements contained therein, and the advertisement, including such statement, is subject to all the provisions of § 1.12 of this Part.

1. Guideline 8-A

a. This rule must be applied in conjunction with §1.12.9 of this Part and requires that all such statements must be genuine and not fictitious. Under this rule, the manufacturing, substantive editing or "doctoring up" of a testimonial is clearly prohibited as being false and misleading to the insurance-buying public. However, language which would be unacceptable under these rules must be edited out of a testimonial.

b. A testimonial must also represent the current opinion of the author. While an insurer is not required in each instance to check with the author each time the testimonial is used to ascertain that the views expressed have not altered, a testimonial should be checked before use in those instances when a change in views might be probable or reasonable to assume. When a testimonial is used more than one year after it was originally given, a confirmation must be obtained. The rule does not prohibit testimonials of a general nature in which the author expresses appreciation for courteous treatment received or prompt payment of claims.

B. If the person making a testimonial, an endorsement or an appraisal has a financial interest in the insurer or a related entity, as a stockholder, director, officer, employee, or otherwise, such fact shall be disclosed in the advertisement. If a person is compensated for making a testimonial, endorsement or appraisal, such fact shall be disclosed in the advertisement by language substantially as follows: "Paid Endorsement." This rule does not require disclosure of union "scale" for TV or radio performances. The payment of substantial amounts, directly or indirectly, for "travel and entertainment" for 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. This rule does not apply to an institutional advertisement which has as its sole purpose the promotion of the insurer.

1. Guideline 8-B

a. This rule requires the disclosure of any financial interest of a person making a testimonial, endorsement, or appraisal. Any payment, direct or indirect, whether specifically for the testimonial or endorsement or for any other services or relationship, is required to be disclosed. Reimbursement for substantial travel and entertainment expenses is also required to be disclosed; however, union scale wages required by union rules are not required to be disclosed. Travel away from the home of the person giving the testimonial or endorsement to a distant location involving transportation expenses, lodging expenses or expenses for meals constitutes payment and must be reflected as a paid endorsement. The requirement of disclosure may be fulfilled by use of the phrase "Paid Endorsement" or words of similar import in a type style and size that is identical to the endorser's name. In the case of television or radio advertising, the paid nature of the advertisement must be given prominence.

C. An advertisement shall not state or imply that an insurer or a health benefit contract has been approved or endorsed by any individual group of individuals, society, association or other organizations, unless such is the fact, and unless any proprietary relationship between an organization and the insurer is disclosed. If the entity making the endorsement or testimonial has been formed by the insurer or is owned or controlled by the insurer or the person or persons who own or control the insurer, such fact shall be disclosed in the advertisement.

1. Guideline 8-C

a. This rule requires both that approval or endorsement of a contract by an individual, group of individuals, society, association, or other organization be factual and that any proprietary relationship between the sponsoring or endorsing organization and the insurer be disclosed. For example, if the dividend under an association group case is payable to the association, disclosure of that fact is required. Also, if the insurer or an officer of the insurer formed or controls the association, that fact must be disclosed.

D. When a testimonial refers to benefits received under a health benefit contract, the specific claim data, including claim number, date of loss, and other pertinent information shall be retained by the insurer for inspection for a period of four years or until the filing of the next regular report on examination of the insurer, whichever is the longer period of time.

1. Guideline 8-D

a. This rule provides the means to verify the authenticity of testimonials used in advertising efforts.

b. The use of testimonials which do not correctly reflect the present practices of the insurer or which are not applicable to the contract or benefit being advertised is not permissible.

1.12.9Use of Statistics

A. An advertisement relating to the dollar amount of claims paid, the number of persons insured, or similar statistical information relating to any insurer or health benefit contract shall not use irrelevant facts, and shall not be used unless it accurately reflects all of the relevant facts. Such an advertisement shall not imply that such statistics are derived from the health benefit contract advertised unless such is the fact, and when applicable to other health benefit contracts or plans, shall specifically so state.

1. Guideline 9-A

a. This rule prohibits the use of statistics in a manner which is misleading and deceptive. It requires the disclosure of all relevant facts and prohibits the use of irrelevant facts. An advertisement shall specifically identify the contract to which statistics relate and, where statistics are given which are applicable to a different contract; it must be stated clearly that the data do not relate to the contract being advertised.

b. Statistics which describe the insurer, such as assets, corporate structure, financial standing, age, product lines or relative position in the insurance business, may be irrelevant and, if used at all, must be used with extreme caution because of their potential for misleading the public. As a specific example, an advertisement for a health benefit contract which refers to the amount of life insurance which the company has in force or the amounts paid out in life insurance benefits is not permissible unless the advertisement clearly indicates the amount paid out for each line of insurance.

c. An advertisement which states the dollar amount of claims paid must also indicate the period over which such claims have been paid.

d. If the term "loss ratio" is used, it shall be properly explained in the context of the advertisement and, it shall be calculated on the basis of premiums earned to losses incurred and shall not be on a yearly run-off basis.

B. An advertisement shall not represent or imply that claim settlements by the insurer are "liberal" or "generous," or use words of similar import, or that claim settlements are or will be beyond the actual terms of the contract. An unusual amount paid for a unique claim for the health benefit contract advertised is misleading and shall not be used.

1. Guideline 9-B

a. This rule prohibits deceptive or misleading statements in an advertisement regarding an insurer's claim settlement practices. It also prohibits the use of an unusual amount paid for a unique claim or an unusual claim whether actual or hypothetical.

C. The source of any statistics used in an advertisement shall be identified in such advertisement.

1. Guideline 9-C

a. This rule requires any advertisement which uses statistics to cite the source. The rule does not require that statistics for a state be used since such statistics as hospital charges and average stays may vary from state to state. When nationwide statistics are used such fact should be noted unless the statistics on the particular point are substantially the same in a state to which the advertisement is directed. Statistics may be used only if they are credible.

1.12.10Identification of Plan or Number of Health Benefit Contracts

A. When a choice of the amount of benefits is referred to, an advertisement which is an invitation to contract shall disclose that the amount of benefits provided depends upon the plan selected and that the premium will vary with the amount of the benefits selected.

B. When an advertisement which is an invitation to contract refers to various benefits which may be contained in two or more health benefit contracts, other than group master health benefit contracts, the advertisement shall disclose that such benefits are provided only through a combination of such health benefit contracts.

1. Guideline 10

a. This rule imposes the same disclosure standards as stated in §1.12.6(B)(2) of this Part. The comments in that Guideline are equally applicable to §1.12.10 of this Part.

1.12.11Disparaging Comparisons and Statements

A. An advertisement shall not directly or indirectly make unfair or incomplete comparisons of health benefit contracts or benefits or comparisons of noncomparable health benefit contracts of other insurers, and shall not disparage competitors, their health benefit contracts, services or business methods, and shall not disparage or unfairly minimize competing methods of marketing insurance.

1. Guideline 11

a. This rule prohibits unfair or incomplete comparisons of products, insurers or business methods. It specifically prohibits comparisons of noncomparable contracts and provides that advertisements shall not unfairly minimize nor disparage competing types of health benefit coverages or competing methods of marketing health benefits.

b. An advertisement should not contain statements such as "no red tape" or "here is all you do to receive benefits".

c. Advertisements which state or imply competing insurance contracts customarily contain certain exceptions, reductions, or limitations not contained in the advertised contracts are unacceptable unless such exceptions, reductions, or limitations are contained in a substantial majority of such competing contracts.

d. Advertisements which state or imply that an insurer's premiums are lower or that its loss ratios are higher because of its organizational structure differs from that of competing insurers are unacceptable.

1.12.12Jurisdictional Licensing and Status of Insurer

A. An advertisement which is intended to be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond those limits.

1. Guideline 12-A

a. This rule prohibits advertisements which imply that an insurer is licensed beyond the limits of those jurisdictions where it is actually licensed. An advertisement which contains testimonials from persons who reside in a state in which the insurer is not licensed or which refers to claims of persons residing in states in which the insurer is not licensed implies licensing in those states and therefore is in violation of this rule unless the advertisement states that the insurer is not licensed in those states.

B. An advertisement shall not create the impression directly or indirectly that the insurer, its financial condition or status, or the payment of its claims, or the merits, desirability, or advisability of its contract forms or kinds or plans of insurance are approved, endorsed, or accredited by any division or agency of this State or the United States Government.

1. Guideline 12-B

a. This rule prohibits advertisements implying that approval, endorsement, or accreditation of contract forms or advertising has been granted by any division or agency of the state or federal government. "Approval" of either contract forms or advertising shall not be used by an insurer to imply or state that a governmental agency has endorsed or recommended the insurer, its contracts, advertising or its financial condition.

b. Although the rule permits a reference to an insurer being licensed in a state when the advertisement appears, it does not allow exaggeration of the fact of such licensing nor does it permit the suggestion that competing insurers may not be so licensed because, in most states, an insurer must be licensed in the state to which it directs its advertising.

c. Terms such as "official," or words of similar import, used to describe any contract or application form are not permissible because of the potential for deceiving or misleading the public.

1.12.13Identity of Insurer

A. The name of the actual insurer shall be stated in all of its advertisements. The form number or numbers of the health benefit contract advertised shall be stated in an advertisement which is an invitation to contract. An advertisement shall not use a trade name, any insurance group designation, name of the parent company of the insurer, name of the particular division of the insurer, service mark, slogan, symbol or other device which, without disclosing the name of the actual insurer, would have the capacity and tendency to mislead or deceive as to the true identity of the insurer.

B. No advertisement shall use any combination of words, symbols, or physical materials which by their content, phraseology, shape, color or characteristics are so similar to any combination of words, symbols, or physical materials used by agencies of the federal government or of this State, or otherwise appear to be of such a nature that it tends to confuse or mislead prospective insureds into believing that the solicitation is in some manner connected with an agency of the municipal, state, or federal government.

1. Guideline 13

a. This rule prohibits the use of an advertisement which has the capacity or tendency to mislead or deceive as to the true identity of the insurer. The rule recognizes the existence of holding companies. The requirement that the advertisement refer to the contract form number is applicable to individual and franchise contracts only. However, the requirement of the contract form number is not applicable to those advertisements for individual and franchise contracts not required to disclose information under §§1.12.6(B)(1) and 1.12.7 of this Part. §1.12.13(A) and (B) of this Part prohibit misleading practices of insurers in connection with the sale of insurance to supplement federal Medicare benefits and confusion of insurance companies with advertising material used by hospital service corporations or pre-paid health plans.

b. This rule prohibits advertisements, envelopes, or stationery which employ words, letters, initials, symbols, or other devices which are so similar to those used by governmental agencies or other insurers, including hospital service corporations and pre-paid health plans, that the public may be confused into believing:

(1) that the advertised coverages are somehow provided by or are endorsed by such governmental agencies or such other insurers;

(2) that the advertised coverages are the same as those provided by such governmental agencies or such other insurers;

(3) that the advertiser is the same as, is connected with or is endorsed by such governmental agencies or such other insurers.

c. It is unacceptable for an advertisement to use the name of a state or a political subdivision thereof in a contract name or description. For example, "XYZ insurance company's (name of state) hospital confinement contract" is unacceptable.

d. This rule prohibits an insurer from using envelopes or stationery which have printed thereon any name, service mark, slogan, symbol, or using any device in such a manner that it implies that the insurer or the contract advertised is connected with a governmental agency such as the Social Security Administration or the Veterans Administration.

e. Contracts advertised to supplement Medicare benefits are unacceptable if they incorporate the word "Medicare" in the title of the contract being advertised unless, wherever it appears, said word is qualified by language differentiating it from Medicare. Such phrases as "Medicare Insurance Supplement" or "insurance to supplement Medicare" are acceptable. Such an advertisement, however, shall not use the phrase "Medicare Department of the XYZ Insurance Company," or language of similar import.

f. Advertisements for contracts designed to supplement Medicare benefits are unacceptable if they fail to contain a disclaimer to the effect of "Not connected with or endorsed by the U.S. Government or the federal Medicare program".

g. This rule prohibits an advertisement which implies that the reader may lose a right, privilege or benefit under federal, state or local law if he fails to respond to the advertisement.

h. If the use of letters, initials, or symbols of the corporate name or trademark would have the capacity or tendency to mislead or deceive the public as to the true identity of the insurer, §1.12.13 of this Part prohibits the use of such letters, initials, or symbols without disclosing in a close conjunction the true and correct complete name of the insurer which will issue the contract.

i. This rule prohibits the use of the name of an agency or "_______ Underwriters" or "______ Plan" in type, size, and location so as to have the capacity and tendency to mislead or deceive as to the true identity of the insurer and also prohibits an insurer from using an address so as to mislead or deceive as to its true identity, location, or licensing status.

1.12.14Group or Quasi-Group Implications

A. An advertisement of a particular health benefit contract shall not state or imply that prospective insureds become group or quasi-group members covered under a group health benefit contract and as such enjoy special rates or underwriting privileges, unless such is the fact.

1. Guideline 14

a. This rule prohibits the use of representations to any segment of the population that a particular contract or coverage is available only to that or similar segments of the population as preferred risks when actually such contract or coverage is available to members of the public at large at the same rates. This rule prohibits an advertisement labeled "Now for Readers of X Magazine".

b. This rule prohibits the solicitation of a particular class, such as governmental employees, by use of advertisements which state or imply that their occupational status entitles them to reduced rates on a group or other basis when, in fact, the contract being advertised is sold only on an individual basis at regular rates.

1.12.15Introductory, Initial, or Special Offers

A. An advertisement of an individual health benefit contract shall not directly or by implication represent that a contract or combination of contracts 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. An advertisement shall not contain phrases describing an enrollment period as "special," "limited," or similar words or phrases when the insurer uses such enrollment periods as the usual method of advertising health benefits.

1. Guideline 15-A (1)

a. This rule prohibits advertising representing that a product is offered on an introductory, initial, special offer basis or otherwise which:

(1) will not be available later; or

(2) is available only to certain individuals unless such is the fact.

b. This rule prohibits repetitive use of such advertisements. Where an insurer uses enrollment periods as the usual method of advertising these contracts, the rule prohibits describing an enrollment period as a special opportunity or offer for the applicant.

B. An enrollment period during which a particular insurance product may be purchased on an individual basis shall not be offered within this State unless there has been a lapse of not less than 6 months between the close of the immediately preceding enrollment for the same product and the opening of the new enrollment period. The advertisement shall indicate the date by which the applicant must mail the application, which shall not be less than ten days and not more than forty days from the date that such enrollment period is advertised for the first time. This rule applies to all advertising media, i.e., mail, newspapers, radio, television, magazines, and periodicals, by any one insurer. The phrase "any one insurer" includes all the affiliated companies of a group of insurers under common management or control.

1. Guideline 15-A (2)

a. This rule restricts the repetitive use of enrollment periods. The requirement of reasonable closing dates and waiting periods between enrollment periods was adopted to eliminate the abuses which formerly existed. This rule does not limit just the use of enrollment periods. It requires that a particular insurance product offered in an enrollment period through any advertising media, including the prepared presentations of agents, cannot be offered again in the entire state until 6 months from the close of the enrollment period have expired. Thus, an insurer must choose whether to use enrollment period or open enrollment for a product. (See §1.12.15(D) of this Part for definition of "a particular insurance product".)

b. This rule does not prohibit multiple advertising during an enrollment period through any and all media published or transmitted within this state as long as the enrollment periods for all such advertisements have the same expiration date.

c. This rule does not prohibit the solicitation of members of a group or association for the same product even though there has not been a lapse of 6 months since the close of a preceding enrollment period which was open to the general public for the same product.

d. This rule does not require separation by 6 months of enrollment periods for the same insurance product in this state if the advertising material is directed by an admitted insurer to persons by direct mail on the basis that a common relationship exists with an entity, such as a bank and its depositors, a department store to its charge account customers or an oil company to its credit card holders, and more than one of such organizations is sponsoring such insurance product at different times if providing such insurance under such a method is not otherwise prohibited by law; provided, however, the 6 month rule does not apply to one specific sponsor to the same persons in this state on the basis of their status as customers of that one specific entity only.

C. § 1.12 of this Part prohibits any statement or implication to the effect that only a specific number of health benefit contracts will be sold or that a time is fixed for the discontinuance of the sale of the particular health benefit contract advertised because of the special advantages available in the health benefit contract, unless such is the fact.

D. The phrase "a particular insurance product" in §1.12.15(B) of this Part means a health benefit contract which provides substantially different benefits than those contained in any other health benefit contract. Different terms of renewability; an increase or decrease in the dollar amounts of benefits; an increase or decrease in any elimination period or waiting period from those available during an enrollment period for another health benefit contract shall not be sufficient to constitute the product being offered as a different product eligible for concurrent or overlapping enrollment periods.

1. Guideline 15-A (4)

a. This rule defines the meaning of "a particular insurance product" in §1.12.15(B) of this Part and prohibits advertising of products having minor variations, such as different elimination periods or different amounts of daily hospital indemnity benefits, in a succession of enrollment periods.

E. An advertisement shall not offer a health benefit contract which utilizes a reduced initial premium rate in a manner which overemphasizes the availability and the amounts of the initial reduced premium. When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, the advertisement shall not display the amount of the reduced initial premium either more frequently or more prominently than the renewal premium, and both the initial reduced premium and the renewal premium must be stated in juxtaposition in each portion of the advertisement where the initial reduced premium appears.

1. Guideline 15-B

a. This rule prohibits advertising which over-emphasizes an initial premium. The rule requires the renewal premium to appear as frequently as, as prominently as and in juxtaposition with the initial reduced premium wherever and as often as it appears. The term "juxtaposition" means side by side or immediately above or below.

F. Special awards, such as a "safe drivers' award" shall not be used in connection with advertisements of health benefits.

1. Guideline 15-C

a. This rule prohibits the use in advertisements of so-called awards as an inducement to the purchase of insurance.

1.12.16Statements About an Insurer

A. An advertisement shall not contain statements which are untrue in fact, or by implication misleading, with respect to the assets, corporate structure, financial standing, age or relative position of the insurer in the insurance business. An advertisement shall not contain a recommendation by any commercial rating system unless it clearly indicates the purpose of the recommendation and the limitations of the scope and extent of the recommendations.

1. Guideline 16

a. This rule is closely related to the requirements of §1.12.9 of this Part concerning the use of statistics. The rule prohibits insurers which have been organized for only a brief period of time advertising that they are "old" and also prohibits the use of illustrations of a "home office" building in a manner which is misleading with respect to the actual size and magnitude of the insurer. Also, the occupations of the persons comprising the insurer's board of directors or the public's familiarity with their names or reputations is irrelevant and must not be emphasized. The preponderance of a particular occupation or profession among the board of directors of an insurer does not justify the advertisement of a plan of insurance offered to the general public as insurance designed or recommended by members of that occupation or profession. For example, it is unacceptable for an insurance company to advertise a policy offered to the general public as "the physicians' policy" or "the doctors' plan" simply because there is a preponderance of physicians or doctors on the board of directors of the insurer. The rule prohibits the use of a recommendation of a commercial rating system unless the purpose, meaning and limitations of the recommendation are clearly indicated.

1.12.17Enforcement Procedures

A. Advertising File. Each insurer shall maintain at its home or principal office a complete file containing every printed, published, or prepared advertisement of its individual health benefit contracts and typical printed, published, or prepared advertisements of its blanket and group contracts and contracts on a "group-type" basis as defined in § 1.3 of this Part thereafter disseminated in this or any other state, whether or not licensed in such other state, with a notation attached to each such advertisement which shall indicate the manner and extent of distribution and the form number of any health benefit contract advertised. Such file shall be subject to regular and periodical inspection by the Director. All such advertisements shall be maintained in said file for a period of either four years or until the filing of the next regular report on examination of the insurer, whichever is the longer period of time.

B. Certificate of Compliance. Each insurer required to file an Annual Statement which is now or which hereafter becomes subject to the provisions of § 1.12 of this Part must file with the Director, with its Annual Statement, a Certificate of Compliance executed by an authorized officer of the insurer wherein it is stated that, to the best of his knowledge, information and belief, the advertisements which were disseminated by the insurer during the preceding statement year complied or were made to comply in all respects with the provisions of § 1.12 of this Part and the Laws of this State as implemented and interpreted by § 1.12 of this Part. With respect to the year in which this Part is promulgated, such certification shall cover only that portion of the year during which this Part is effective.

1.12.18Filing for Prior Review

The Director of Business Regulation may, at his or her discretion, require the filing by any insurer with this Department, for review prior to use, of all of its advertisements or all of a class of its advertisements which the Director shall describe which are printed or published "Invitations to Contract" and all prepared sales presentations to be used by agents, brokers and solicitors. Such advertising material must be filed by the insurer with this Department not less than ninety (90) days prior to the date the insurer desires to use the advertisement.

230 R.I. Code R. 230-RICR-20-30-1.12