Advertising

This section is all general law as it applies to advertising of different products. The key things to take away are the concepts rather than the details unless otherwise noted with asterisks (***), bold or underlining.

Advertising materials must clearly indicate that the communication relates to insurance products. When soliciting or selling insurance products, agents must clearly indicate that they are acting as insurance agents with regard to insurance products and identified insurers.

Advertisements of benefits payable, losses covered, or premiums payable

This is pretty much common sense. The idea is for the insurance company to be honest in the advertisements. We've summarized everything in the following paragraph, but you may read the italicized text below if you want more detail.

Don't exaggerate benefits. If you're inviting people to join an association, the advertisement has to clearly state that the association fees are not part of the premiums. Limitations and exclusions have to be worded with negative language and can not be made to sound positive. The advertisement can not imply that a profit will be made from being hospitalized. Limited risk type policies must clearly state the limited nature of the policy - for example, a cancer policy. Waiting periods and elimination periods must be disclosed. Losses not covered by the policy have to be described in negative terms, and the phrase "preexisting condition" can only be used if given with a clear definition.

Benefits may not be exaggerated in advertising, and so no advertisement may use words or phrases such as "all," "full," "complete," "comprehensive," "unlimited," "up to," "as high as," or similar words and phrases, in a manner that exaggerates any benefits beyond the terms of the policy.

Invitations to join an association requires separate signatures for each individual application. Membership fees for the association must be disclosed on each application and appear separately so as not to be construed as part of the premium.

Descriptions of a policy limitation, exception, or reduction in the advertisement can not be 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 preexisting conditions are covered after a limited period of time." Words and phrases used to describe limitations, exceptions, and reductions must describe the negative features of such limitations, exceptions, and reductions of the policy offered.

Benefits for which payment is conditional upon confinement in a hospital or similar facility may not use in their advertisements words or phrases such as "tax free," "extra cash," "extra income," "extra pay," in a manner that would lead the public to believe that the policy advertised will, in some way, enable them to make a profit from being hospitalized or disabled.

Advertisements for policies providing benefits for specified illnesses only (cancer, specified accidents, such as automobile accidents, limited benefit such as nursing home coverage only) must conspicuously in prominent type state the limited nature of the policy in language identical to, or substantially similar to the following:

"THIS IS A LIMITED POLICY," "THIS IS A CANCER ONLY POLICY," "THIS IS AN AUTOMOBILE ACCIDENT ONLY POLICY," "THIS IS A NURSING HOME COVERAGE ONLY POLICY."

An advertisement that is an invitation to contract must disclose exceptions, reductions, and limitations affecting the basic provisions of the policy. The advertisement must disclose the existence of a waiting period, elimination period, or probationary period. An invitation to contract for health benefits must also, 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 policy. The term "preexisting condition" without an appropriate definition or description must not be used.

Certificate of coverage

Persons covered under a group insurance plan are issued certificates.

Group blanket health

We have discussed this before. These policies cover public places, such as playgrounds, or an airline insuring its passengers. The slide below will give more detail about blanket policies if you would like to read over it, but what you need is what has already been covered.

Required provisions (of blanket insurance)

An individual application is not required from a person covered under a blanket health insurance policy. The insurer is not required to furnish a certificate of coverage to persons covered, except for blanket policies issued to schools, colleges, universities, and other institutions of learning.