Marketing Methods & Practices

Agent Responsibilities

Florida law states the following as part of the General Rules Relating to Solicitation:

• Agents have to say that they are acting as agents on behalf of an insurance company and can not use other terms, like "financial planner," "investment advisor," "financial consultant," or "financial counseling" unless the agent actually carries such designations.
• All references to dividends must include a statement that the dividends are not guaranteed, including when dividends are reflected in cost indexes.
• Cost indexes must state that they are only useful when comparing similar policies.
• Time value of money must be accounted for in the sales presentation when comparing two or more policies.

Disclosure

1. Agent must give Buyer's Guide and a Policy Summary before accepting the premium.
2. This is not required if policy provides for unconditional refund for least 14 days, but must be given when the policy is delivered.

Buyer's Guide

The purpose is:

• to improve the buyer's ability to select the most appropriate plan of life insurance,
• improve his understanding of the basic features of the policy that has been purchased or that is under consideration, and
• improve the ability of the buyer to evaluate the relative costs of similar plans of life insurance.

Policy Summary

This is a written statement that has more detail than the buyer's guide about the policy being recommended, including but not limited to:

• Name and address of the agent
• Full name and home office address of the life insurance company
• The generic name of the policy and of each rider
• The following amounts:
  • annual premium for the policy
  • annual premium for riders
  • death benefits
  • cash surrender values
  • dividends payable at the end of the year for 20 years
  • loan annual percentage rates, including maximum rate
  • life insurance cost indexes for 10 and 20 years
• A statement that dividends are not guaranteed
• The date when the Policy Summary was prepared

Advertising & Sales

Disclosure requirements for indeterminate value life annuity contract advertisements

If an advertisement shows interest rates or rates of return it must have disclaimers. All limitations and conditions affecting these rates must be prominently disclosed and displayed. This disclosure must include:

• expense charge
• administrative fees
• yearly surrender charges
• withdrawal and bail-out provisions
• guaranteed minimum interest rate

All variable products must disclose that there may be gains as well as losses, including the loss of principal, and the product can not be called a CD annuity.

Advertisement of proceeds payable, premiums payable

Advertisements must clearly reflect:

• the insurer
• the agent
• the policy form number
• type of plan
• premium payable
• payment period
• any changes in face amounts and/or premiums

Ads can not contain any of the following if sold by direct response:

• "no agent or salesman will call"
• "by eliminating the agent and/or commission we can offer this low cost plan"

Any ads that offer enrollment in an association, etc, must solicit insurance on a separate application. Any membership fees or dues must be disclosed on each application and appear separately so as not to be construed as part of the premium for insurance.

Ads can not refer to premiums as "deposits".

Ads containing interest rates, rates of return, or yield are prohibited unless conditions affecting these returns are disclosed prominently with equal emphasis.

Dividends

• any comparison between participating and non-participating policies must be true
• can not directly or indirectly imply dividends are guaranteed
• ads can't mislead as to definition of dividends