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The Director determines

whether an ad is misleading or deceptive


Each insurer must maintain control over its

life and annuity advertisements, and is responsible for its content regardless of who wrote, created, designed, or presented them.


Insurers must maintain all ads at its

home office for 4 years.


The term advertisement includes

Printed, published, and audio-visual material and descriptive literature used in direct mail, newspapers and magazines, radio and television scripts, and billboards and similar displays
Descriptive literature and sales aids an insurer or agent issues, including circulars, leaflets, booklets, depictions, illustrations, and form letters
Material used to recruit, train, and educate sales personnel, agents, solicitors, and brokers
Prepared sales talks, presentations, and material for use by sales personnel, agents, solicitors, and brokers


The term advertisement does not include

Internal communication or materials not intended for the public
Communications with policyholders not urging policyholders to purchase, increase, modify, reinstate, or retain a policy
A general announcement from a group or blanket policyholder to eligible individuals on an employment or membership list, of a policy or program


Disclosure requirements: An ad must be

truthful, have a clear form and content, and avoid deception.


An ad must disclose

The insurer's name and the type of policy being marketed
That dividends are not guaranteed
The source of any statistical info about an insurer or policy
An individual's financial interest, if any, in an insurer for which he/she has made a testimonial or endorsement
Any conditions associated with a special or limited enrollment period, if the insurer uses successive enrollment periods as its usual marketing method
Accurate and complete comparisons of policies, benefits, dividends, or rates when referring to a competitor's products


Identity of insurer: Ads may not use language

So similar to a governmental program's combination of words or symbols that they mislead prospective insureds to believing the solicitation is connected with the program. medicare


Jurisdiction licensing: Ads may not

imply licensing beyond the limits of the jurisdiction in which the insurer is licensed


Advertising and marketing of annuities and variable life:
any ad of annuities and VL contracts directed toward persons age

65 or older must disclose that an insurer or insurance producer may contact the applicant


No advertisement may imply that the consumer may

lose a right or privilege or benefits under federal, Sate, or local law if he/she fails to respond to the ad


No ad for an event where insurance products will be offered for sale may use the terms

"seminar" "class" "info meeting" or substantially equivalent terms to characterize the purpose of the public gathering or event unless it adds the words "and insurance sales presentation" immediately following those terms in the same size and font as those terms


Penalties: an insurer who violates advertising provisions may be fined up to

1000 per violation, have its license or certificate of authority suspended or revoked, or both


The purpose of replacement regulations is to

regulate insurer and producer activities
Protect life policy and annuity purchases from losing benefits
Assure that purchasers get enough info to make an informed decision
Reduce the opportunity for misrepresentation
Establish penalties for failure to comply with replacement rules


replacement is any transaction in which a new life policy or annuity is to be purchased ant the producer

knows or should know that existing contracts will be:
Lapsed, forfeited, surrendered or terminated
Amended to reduce the coverages benefit or term
Reissued with a reduced cash value
Converted into paid-up insurance, continued as extended term insurance, or decreased in value by use of another form of nonforfeiture benefit
Pledged as collateral for a loan, or subjected to borrowing


The following types of policies are exempt from state replacement regulations:

Credit life insurance--> can never be convertible or renewable
Group life insurance or annuities
Life insurance policies in connection with a pension, profit sharing, or other benefit plan qualifying for tax deductibility of premiums.
Registered contracts, except that the appropriate prospectus or offering circular shall be given to the applicant
Existing life insurance that is non-convertible, is term and expires within 5 years
Transactions where the existing insurer and replacing insurer are the same.
Coverages whose total cash surrender value is less than $500, and whose total face value is less than $5,000


A producer transacting insurance where replacement is involved must give the applicant:

A list of policies to be replaced
an outline of coverage
a notice of replacement signed by the producer
a copy of each sales proposal
a completed comparison statement
a reminder that new evidence of insurability may be required


The surrender cost index is used to

compare cost of similar policies. The producer also needs to give his/her insurer a copy of any proposals and of the comparison statement, including the name of the insurer that issued the policy being replaced.


The producer must submit, with the application,

a statement signed by the applicant affirming whether the policy will replace any existing life policy insurance or annuity. the producer must keep a copy of replacement forms for 3 years.


The replacing insurer must:

Ensure that all replacement actions are legal
Give the applicant a copy of the buyers guide
Notify each existing insurer within 3 working days after receiving the application and upon request give them a copy of any proposals and comparison statements
Keep copies of proposals, receipts, and comparison statement for at least 3 years.


The existing policy should not be

terminated until the new policy is issued and delivered.


Life solicitation:
The following apply to the solicitation of

individual life policies, except credit policies, policies connected with a pension or welfare plan defined by ERISA, or variable policies with variable death benefits


The purpose of this section is to improve the buyer's ability to

select the most appropriate plan of life insurance for his/her needs, improve the buyers understanding of the basic feature of the policy, and improve the ability of the buyer to evaluate the relative costs of similar plans of life insurance.


Disclosure requirements: An insurer must give an applicant a

Buyer's Guide before accepting an initial premium or premium deposit. For direct response sales, The buyers guide must be delivered before or with the policy


A policy summary must be delivered

before or with a policy solicited through a producer or by direct response. Failure to provide a Buyer's Guide or a Policy Summary, when required, constitutes a misrepresentation of the policy's benefits, advantages, conditions, or terms.


An agent must inform the prospective purchaser that

he is acting as a life agent


Terms such as

financial planner, investment, advisor, financial consultant, or financial counseling may not be used to imply that the insurance agent is generally engaged in an advisory business in which compensation is unrelated to sales.


Any reference to policy dividends

must include a statement that dividends are not guaranteed. A presentation of benefits may not display guaranteed and non-guaranteed benefits as a single sum.


In recommending the purchase of exchange of an annuity, the producer, or the insurer if no producer is involved, must

reasonably believe that the recommendation is suitable for the consumer on the basis of the consumer's financial needs, investments, and other insurance products


Prior to the purchase or exchange of an annuity, the producer or insurer must make reasonable efforts to obtain data regarding the purchaser's:

financial status
Tax status
investment objectives
Other information the produce or insurer considers to be reasonable n making a recommendation to the purchaser.