230-RICR-20-30-8
230-RICR-20-30-8. Advertisements of Medicare Supplement Insurance (formerly OHIC Regulation 9) (version Adoption, 05/01/2010 to 08/25/2018)
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Reg. # 9
State of Rhode Island and Providence Plantations
OFFICE OF THE HEALTH INSURANCE COMMISSIONER
1511 Pontiac Avenue, Bldg. #69-1
Cranston, RI 02920
OFFICE OF THE HEALTH INSURANCE COMMISSIONER REGULATION 9
ADVERTISEMENTS OF MEDICARE SUPPLEMENT INSURANCE
WITH INTERPRETIVE GUIDELINES
Table of Contents
Section 1.
Purpose and Authority
Section 2.
Applicability
Section 3.
Definitions
Section 4.
Method of Disclosure of Required Information
Section 5.
Form and Content of Advertisements
Section 6.
Advertisements of Benefits, Losses Covered or Premiums Payable
Section 7.
Necessity for Disclosing Policy Provisions Relating to Renewability,
Cancelability and Termination
Section 8.
Testimonials or Endorsements by Third Parties
Section 9.
Use of Statistics
Section 10.
Disparaging Comparisons and Statements
Section 11.
Jurisdictional Licensing and Status of Insurer
Section 12.
Identity of Insurer
Section 13.
Group or Quasi-Group Implications
Section 14.
Introductory, Initial or Special Offers
Section 15.
Statements About an Insurer
Section 16.
Enforcement Procedures
Section 17.
Severability Provision
Section 18.
Filing for Prior Review
Section 19.
Effective Date
Appendix
Interpretive Guidelines
Section 1.
Purpose and Authority
The purpose of these rules is to provide prospective purchasers with clear and unambiguous
statements in the advertisement of Medicare supplement insurance; to assure the clear and
truthful disclosure of the benefits, limitations and exclusions of policies sold as Medicare
supplement insurance. This purpose is intended to be accomplished by the establishment of
guidelines and permissible and impermissible standards of conduct in the advertising of
Medicare supplement insurance in a manner which prevents unfair, deceptive and misleading
advertising and is conducive to accurate presentation and description to the insurance-buying
public through the advertising media and material used by insurance agents and companies. This
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regulation is issued pursuant to R.I. Gen. Laws §§ 27-18.2-1 et seq., 27-29-1 et seq. and 42-62-
12.
Section 2.
Applicability
A.
These rules shall apply to any “advertisement” of Medicare supplement insurance
as that term is defined herein, unless otherwise specified in these rules, that the
insurer knows or reasonably should know is intended for presentation,
distribution or dissemination in this state when the presentation, distribution or
dissemination is made either directly or indirectly by or on behalf of an insurer,
agent, broker, producer or solicitor, as those terms are defined in Title 27 and in
these rules.
B.
Every insurer shall establish and at all times maintain a system of control over the
content, form and method of dissemination of all of its Medicare supplement
insurance advertisements. All such advertisements, regardless of by whom
written, created, designed or presented, shall be the responsibility of the insurers
benefiting directly or indirectly from their dissemination.
C.
Advertising materials that are reproduced in quantity shall be identified by form
numbers or other identifying means. The identification shall be sufficient to
distinguish an advertisement from any other advertising materials, policies,
applications or other materials used by the insurer.
Section 3.
Definitions
A.
(1)
An advertisement for the purpose of these rules shall include:
(a)
Printed and published material, audio visual material and
descriptive literature used by or on behalf of an insurer in direct
mail, newspapers, magazines, radio scripts, TV scripts, billboards
and similar displays;
(b)
Descriptive literature and sales aids of all kinds issued by an
insurer, agent, producer, broker or solicitor for presentation to
members of the insurance-buying public; including, but not limited
to, circulars, leaflets, booklets, depictions, illustrations, form
letters and lead generating devices of all kinds as defined in this
rule; and
(c)
Prepared sales talks, presentations and material for use by agents,
brokers, producers and solicitors, whether prepared by the insurer
or the agent, broker, producer or solicitor.
(2)
The definition of “advertisement” includes advertising material included
with a policy when the policy is delivered and material used in the
solicitation of renewals and reinstatements.
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(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 used in-house by 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
policyholders other than material urging the policyholders to
increase or expand coverages;
(e)
Correspondence between a prospective group or blanket
policyholder 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
policyholders; or
(g)
A general announcement from a group or blanket policyholder to
eligible individuals on an employment or membership list that a
contract or program has been written or arranged; provided, the
announcement must clearly indicate that it is preliminary to the
issuance of a booklet.
B.
“Medicare supplement insurance” means a group or individual policy of accident
and sickness insurance or a subscriber contract of hospital and medical service
associations or health maintenance organizations that is advertised, marketed or
designed primarily as a supplement to reimbursements under Medicare for the
hospital, medical or surgical expenses of persons eligible for Medicare by reason
of age.
C.
“Certificate” means, for the purposes of these rules, any certificate issued under a
group Medicare supplement policy, which certificate has been delivered or issued
for delivery in this state.
D.
“Insurer,” for the purpose of these rules, shall include any individual, corporation,
association, partnership, reciprocal exchange, inter-insurer, Lloyds, fraternal
benefit society, health maintenance organization, hospital service corporation,
medical service corporation, prepaid health plan and any other legal entity which
is defined as an “insurer” in Title 27 and is engaged in the advertisement of itself,
or Medicare supplement insurance.
E.
“Exception,” for the purpose of these rules, means any provision in a policy
whereby coverage for a specified hazard is entirely eliminated; it is a statement of
a risk not assumed under the policy.
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F.
“Reduction,” for the purpose of these rules, means any provision that reduces the
amount of the benefit; a risk of loss is assumed but payment upon the occurrence
of the loss is limited to some amount or period less than would be otherwise
payable had the reduction not been used.
G.
“Limitation,” for the purpose of these rules, means any provision that restricts
coverage under the policy other than an exception or a reduction.
H.
“Institutional advertisement,” for the purpose of these rules, means an
advertisement having as its sole purpose the promotion of the reader’s, viewer’s
or listener’s interest in the concept of Medicare supplement insurance, or the
promotion of the insurer as a seller of Medicare supplement insurance.
I.
“Invitation to inquire,” for the purpose of these rules, means an advertisement
having as its objective the creation of a desire to inquire further about Medicare
supplement insurance that is limited to a brief description of coverage, and that
shall contain a provision in the following or substantially similar form:
“This policy has [exclusions] [limitations] [reductions of benefits]
[terms under which the policy may be continued in force or
discontinued]. For costs and complete details of the coverage, call
[or write] your insurance agent or the company [whichever is
applicable].”
J.
“Invitation to contract,” for the purpose of these rules, means an advertisement
that is neither an institutional advertisement nor an invitation to inquire.
K.
“Person,” for the purpose of these rules, means a natural person, association,
organization, partnership, trust, group, discretionary group, corporation or any
other entity.
L.
“Medicare” means “The Health Insurance for the Aged Act, Title XVIII of The
Social Security Amendments of 1965 as Then Constituted or Later Amended,” or
Title I, Part I, of Public Law 89-97, as enacted by the Eighty-Ninth Congress of
the United States of America, and popularly known as the “Health Insurance for
the Aged Act, as then constituted and any later amendments or substitutes
thereof,” or words of similar import.
M.
“Lead-generating device,” for the purpose of these rules, means any
communication directed to the public that, regardless of form, content or stated
purpose, is intended to result in the compilation or qualification of a list
containing names and other personal information to be used to solicit residents of
this state for the purchase of Medicare supplement insurance.
N.
“Commissioner” shall mean the health insurance commissioner.
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Section 4.
Method of Disclosure of Required Information
All information required to be disclosed by these rules shall be set out conspicuously and in
close conjunction with the statements to which the information relates or under appropriate
captions of such prominence that it shall not be minimized, rendered obscure or presented in an
ambiguous manner or fashion or intermingled with the context of the advertisement so as to be
confusing or misleading.
Section 5.
Form and Content of Advertisements
A.
The format and content of a Medicare supplement insurance advertisement 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 commissioner of insurance 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.
B.
Advertisements shall be truthful and not misleading in fact or in implication.
Words or phrases whose meanings are clear only by implication or by the
consumer’s familiarity with insurance terminology shall not be used.
C.
An insurer must clearly identify its Medicare supplement insurance policy as an
insurance policy (or a subscriber contract, certificate or other term appropriate to
the insurer). A policy trade name must be followed by the words...“Insurance
Policy” (or other appropriate term) or similar words clearly identifying the fact
that an insurance policy or health benefits product (in the case of health
maintenance organizations, prepaid health plans and other direct service
organizations) is being offered.
D.
No insurer, agent, broker, producer, solicitor or other person shall solicit a
resident of this state for the purchase of Medicare supplement insurance in
connection with or as the result of the use of any advertisement by such person or
any other person, where the advertisement:
(1)
Contains any misleading representations or misrepresentations, or is
otherwise untrue, deceptive or misleading with regard to the information
imparted, the status, character or representative capacity of such person or
the true purpose of the advertisement; or
(2)
Otherwise violates the provisions of these rules.
E.
No insurer, agent, broker, solicitor or other person shall solicit residents of this
state for the purchase of Medicare supplement insurance through the use of a true
or fictitious name that is deceptive or misleading with regard to the status,
character, or proprietary or representative capacity of the person or the true
purpose of the advertisement.
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Section 6.
Advertisements of Benefits, 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 the 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 policy benefit
payable, loss covered or premium payable. The fact that the policy offered
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)
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,” “this policy pays all that Medicare doesn’t” or
similar words and phrases, in a manner which exaggerates any benefit
beyond the terms of the policy.
(3)
An advertisement that also is an invitation to join an association, trust or
discretionary group shall solicit insurance coverage on a separate and
distinct application that requires separate signatures for each application.
The separate and distinct application required for an advertisement which
is also an invitation to join an association, trust or discretionary group
need not be on a separate document or contained in a separate mailing.
The insurance program shall be presented so as not to mislead or deceive
the prospective members that they are purchasing insurance as well as
applying for membership, if that is the case.
(4)
An advertisement shall not contain descriptions of policy limitations,
exceptions or reductions, 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 six (6) months.”
Words and phrases used in an advertisement to describe the policy
limitations, exceptions and reductions shall fairly and accurately describe
the negative features of the limitations, exceptions and reductions of the
policy offered.
(5)
An advertisement of Medicare supplement insurance sold by direct
response shall not state or 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 because the cost of advertising and
servicing the policies is a substantial cost in marketing by direct response.
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B.
Exceptions, Reductions and Limitations
(1)
An advertisement that is an invitation to contract shall disclose those
exceptions, reductions and limitations affecting the basic provisions of the
policy.
(2)
When a policy contains a waiting, elimination, probationary or similar
time period between the effective date of the policy and the effective date
of coverage under the policy or a time period between the date a loss
occurs and the date benefits begin to accrue for the loss, an advertisement
that is subject to the requirements of the preceding paragraph shall
disclose the existence of these periods.
(3)
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 policy is subject to the
following minimum exceptions and reductions.”
C.
Preexisting Conditions
(1)
An advertisement that is an invitation to contract shall, in negative terms,
disclose the extent to which any loss is not covered if the cause of the loss
is traceable to a condition existing prior to the effective date of the policy.
The use of the term “preexisting condition” without an appropriate
definition or description shall not be used.
(2)
When a Medicare supplement insurance policy does not cover losses
resulting from preexisting conditions, no advertisement of the policy shall
state or imply that the applicant’s physical condition or medical history
will not affect the issuance of the policy or payment of a claim under the
policy. This rule 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 policy, the advertisement shall disclose that a medical
examination is required.
(3)
When an advertisement contains an application form to be completed by
the applicant and returned by mail, the application form shall contain a
question or statement that reflects the preexisting condition provisions of
the policy immediately preceding the blank space for the applicant’s
signature. For example, such an application form shall contain a question
or statement substantially as follows:
Do you understand that this policy will not pay benefits
during the first six (6) months after the issue date for a
disease or physical condition for which medical advice was
given or treatment was recommended by or received from a
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physician within six (6) months before the policy issue
date?
YES
Or substantially the following statement:
I understand that the policy applied for will not pay
benefits for any loss incurred during the first six (6) months
after the issue date due to a disease or physical condition
for which I received medical advice or for which treatment
was recommended by or received from a physician within
six (6) months before the issue date.
Section 7.
Necessity for Disclosing Policy Provisions Relating to Renewability,
Cancelability and Termination
An advertisement that is an invitation to contract shall disclose the provisions relating to
renewability, cancelability 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.
Section 8.
Testimonials or Endorsements by Third Parties
A.
Testimonials and endorsements used in advertisements must be genuine, represent
the current opinion of the author, be applicable to the policy advertised and be
accurately reproduced. The insurer, in using a testimonial or endorsement, makes
as its own all of the statements contained therein, and the advertisement,
including the statement, is subject to all the provisions of these rules. When a
testimonial or endorsement is used more than one year after it was originally
given, a confirmation must be obtained.
B.
A person shall be deemed a “spokesperson” if the person making the testimonial
or endorsement:
(1)
Has a financial interest in the insurer or a related entity as a stockholder,
director, officer, employee or otherwise;
(2)
Has been formed by the insurer, is owned or controlled by the insurer, its
employees, or the person or persons who own or control the insurer;
(3)
Has any person in a policy-making position who is affiliated with the
insurer in any of the above described capacities; or
(4)
Is in any way directly or indirectly compensated for making a testimonial
or endorsement.
C.
The fact of a financial interest or the proprietary or representative capacity of a
spokesperson shall be disclosed in an advertisement and shall be accomplished in
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the introductory portion of the testimonial or endorsement in the same form and
with equal prominence thereto. If a spokesperson is directly or indirectly
compensated for making a testimonial or endorsement, that fact shall be disclosed
in the advertisement by language substantially as follows: “Paid Endorsement.”
The requirement of this disclosure may be fulfilled by use of the phrase “Paid
Endorsement” or words of similar import in a type style and size at least equal to
that used for the spokesperson’s name or the body of the testimonial or
endorsement; whichever is larger. In the case of television or radio advertising,
the required disclosure must be accomplished in the introductory portion of the
advertisement and must be given prominence.
D.
The disclosure requirements of this rule shall not apply where the sole financial
interest or compensation of a spokesperson, for all testimonials or endorsements
made on behalf of the insurer, consists of the payment of union scale wages
required by union rules, and if the payment is actually for the scale for TV or
radio performances.
E.
An advertisement shall not state or imply that an insurer or a Medicare
supplement insurance policy has been approved or endorsed by any individual,
group of individuals, society, association or other organization, 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, that fact shall be disclosed in the
advertisement. If the insurer or an officer of the insurer formed or controls the
association, or holds any policy-making position in the association, that fact shall
be disclosed.
F.
When a testimonial refers to benefits received under a Medicare supplement
insurance policy, 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 (4) years or until the filing of the next regular report of
examination of the insurer, whichever is the longer period of time. The use of
testimonials that do not correctly reflect the present practices of the insurer or that
are not applicable to the policy or benefit being advertised is not permissible.
Section 9.
Use of Statistics
A.
An advertisement relating to the dollar amounts of claims paid, the number of
persons insured, or similar statistical information relating to any insurer or policy
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 the statistics are
derived from a policy advertised unless such is the fact, and when applicable to
other policies or plans shall specifically so state.
(1)
An advertisement shall specifically identify the Medicare supplement
insurance policy to which statistics relate and, where statistics are given
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which are applicable to a different policy, it shall be stated clearly that the
data do not relate to the policy being advertised.
(2)
An advertisement using statistics that describe an 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 the potential for misleading
the public. As a specific example, an advertisement for Medicare
supplement insurance that refers to the amount of life insurance that 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.
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 state or
imply that claim settlements are or will be beyond the actual terms of the contract.
An unusual amount paid for a unique claim for the policy advertised is misleading
and shall not be used.
C.
The source of any statistics used in an advertisement shall be identified in the
advertisement.
Section 10.
Disparage Comparisons and Statements
An advertisement shall not directly or indirectly make unfair or incomplete comparisons of
policies or benefits or comparisons of non-comparable policies of other insurers, and shall not
disparage competitors, their policies, services or business methods, and shall not disparage or
unfairly minimize competing methods of marketing insurance.
A.
An advertisement shall not contain statements such as “no red tape” or “here is all
you do to receive benefits.”
B.
Advertisements that state or imply that competing insurance coverages
customarily contain certain exceptions, reductions or limitations not contained in
the advertised policies are unacceptable unless the exceptions, reductions or
limitations are contained in a substantial majority of the competing coverages.
C.
Advertisements that state or imply that an insurer’s premiums are lower or that its
loss ratios are higher because its organizational structure differs from that of
competing insurers are unacceptable.
Section 11.
Jurisdictional Licensing and Status of Insurer
A.
An advertisement that 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.
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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 policy forms or kinds of plans of
insurance are approved, endorsed or accredited by any division or agency of this
state or the United States government.
C.
An advertisement shall not imply that approval, endorsement or accreditation of
policy forms or advertising has been granted by any division or agency of the
state or federal government. “Approval” of either policy 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 policies, advertising or its financial
conditions.
Section 12.
Identity of Insurer
A.
The name of the actual insurer shall be stated in all of its advertisements. The
form number or numbers of the policy advertised shall be stated in an
advertisement that is an invitation to contract. An advertisement shall not use a
trade name, an insurance group designation, name of the parent company of the
insurer, name of a particular division of the insurer, service mark, slogan, symbol
or other device that with or 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 that by their content, phraseology, shape, color or other characteristics
are so similar to 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 is 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.
C.
Advertisements, envelopes or stationery that employ words, letters, initials,
symbols or other devices that are so similar to those used by governmental
agencies or other insurers are not permitted if they may lead the public to believe:
(1)
That the advertised coverages are somehow provided by or are endorsed
by the governmental agencies or the other insurers;
(2)
That the advertiser is the same as, is connected with or is endorsed by the
governmental agencies or the other insurers.
D.
No advertisement shall use the name of a state or political subdivision thereof in a
policy name or description.
E.
No advertisement in the form of envelopes or stationary of any kind may use any
name, service mark, slogan, symbol or any device in such a manner that implies
that the insurer or the policy advertised, or that any agent who may call upon the
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consumer in response to the advertisement is connected with a governmental
agency, such as the Social Security Administration.
F.
No advertisement may incorporate the word “Medicare” in the title of the plan or
policy being advertised unless, wherever it appears, the word is qualified by
language differentiating it from Medicare. Such an advertisement, however shall
not
use
the
phrase
“_____________
Medicare
Department
of
the
_________________ Insurance Company,” or language of similar import.
G.
No advertisement shall be used that fails to include the disclaimer to the effect of
“Not Connected with or endorsed by the U.S. government or the federal Medicare
program.”
H.
No advertisement may imply that the reader may lose a right or privilege or
benefit under federal, state or local law if he fails to respond to the advertisement.
I.
The use of letters, initials or symbols of the corporate name or trademark that
would have the tendency or capacity to mislead or deceive the public as to the
true identity of the insurer is prohibited unless the true, correct and complete
name of the insurer is in close conjunction and in the same size type as the letters,
initials or symbols of the corporate name or trademark.
J.
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 is
prohibited.
K.
The use of an address so as to mislead or deceive as to true identity of the insurer,
its location or licensing status is prohibited.
L.
No insurer may use, in the trade name of it’s insurance policy, any terminology or
words so similar to the name of a governmental agency or governmental program
as to have the tendency to confuse, deceive or mislead the prospective purchaser.
M.
All advertisements used by agents, producers, brokers or solicitors of an insurer
shall have prior written approval of the insurer before they may be used.
N.
An agent who makes contact with a consumer, as a result of acquiring that
consumer’s name from a lead generating device, shall disclose that fact in the
initial contact with the consumer.
Section 13.
Group or Quasi-Group Implications
A.
An advertisement of a particular policy shall not state or imply that prospective
insureds become group or quasi-group members covered under a group policy and
as such enjoy special rates or underwriting privileges, unless that is the fact.
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B.
This rule prohibits the solicitation of a particular class, such as governmental
employees, by use of advertisements that state or imply that their occupational
status entitles them to reduced rates on a group or other basis when, in fact, the
policy being advertised is sold only on an individual basis at regular rates.
Section 14.
Introductory, Initial or Special Offers
A.
(1)
An advertisement of an individual policy 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
Medicare supplement insurance.
(2)
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 six (6) months between the
close of the immediately preceding enrollment period 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 be not less than ten (10) days and not more than forty (40) days from
the date that the 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. It is not applicable to
solicitations of employees or members of a particular group or association
that otherwise would be eligible under specific provisions of the Insurance
Code for group, blanket or franchise insurance. The phrase “any one
insurer” includes all the affiliated companies of a group of insurance
companies under common management or control.
(3)
This rule prohibits any statement or implication to the effect 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 because of
special advantages available in the policy, unless that is the fact.
(4)
The phrase “a particular insurance product” in Paragraph (2) of this
subsection means an insurance policy that provides substantially different
benefits than those contained in any other policy. Different terms of
renewability, an increase or decrease in the dollar amounts of benefits, or
an increase or decrease in any elimination period or waiting period from
those available during an enrollment period for another policy shall not be
sufficient to constitute the product being offered as a different product
eligible for concurrent or overlapping enrollment periods.
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B.
An advertisement shall not offer a policy that utilizes a reduced initial premium
rate in a manner that overemphasizes the availability and the amount 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 shall be stated in juxtaposition
in each portion of the advertisement where the initial reduced premium appears.
The term “juxtaposition” means side by side or immediately above or below.
C.
Special awards, such as a “safe drivers award” shall not be used in connection
with advertisements of Medicare supplement insurance.
Section 15.
Statements About an Insurer
An advertisement shall not contain statements that 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 recommendation.
Section 16.
Enforcement 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 policies and typical printed, published or prepared advertisements of its
blanket, franchise and group policies hereafter disseminated in this or any other
state, whether or not licensed in such other state, with a notation attached to each
advertisement that shall indicate the manner and extent of distribution and the
form number of any policy advertised. The file shall be available for inspection
by the commissioner. All such advertisements shall be maintained in the file for a
period of either four (4) years or until the filing of the next regular report of
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 these rules
must file with the commissioner, 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 that
were disseminated by the insurer during the preceding statement year complied or
were made to comply in all respects with the provisions of these rules and the
Insurance Laws of this state as implemented and interpreted by these rules.
Section 17.
Severability Provision
If any section or portion of a section of these rules, or its applicability to any person or
circumstance is held invalid by a court, the remainder of the rules, or the applicability of the
provision to other persons or circumstances, shall not be affected.
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Section 18.
Filing for Prior Review
Every insurer, health care service plan or other entity providing Medicare supplement insurance
or benefits in this State shall provide a copy of any Medicare supplement advertisement intended
for use in this state whether through written, radio or television medium to the commissioner for
review or approval by the commissioner to the extent it may be required under state law.
Section 19.
Effective Date
This regulation shall be effective as indicated below.
EFFECTIVE DATE:
May 1, 2010
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Appendix
INTERPRETIVE GUIDELINES
FOR RULES GOVERNING ADVERTISEMENTS OF
MEDICARE SUPPLEMENT INSURANCE
Guideline 1
Disclosure is one of the principal objectives of the rules and this section states specifically that
the rules shall assure truthful and adequate disclosure of all material and relevant information.
The rules specifically prohibit some previous advertising techniques.
Guideline 2
These rules apply to any “advertisement” as that term is defined in Section 3, Subsections A, H, I
and J unless otherwise specified in the rules. These rules apply to group, blanket and individual
Medicare supplement insurance advertisements. Certain distinctions, however, are applicable to
these categories. Among them is the level of conversance with insurance, a factor which is
covered by Section 5A of the rules.
Guideline 3-A
The scope of the term “advertisement” extends to the use of all media for communications to the
general public, to the use of all media for communications to specific members of the general
public, and to use of all media for communications by agents, brokers, producers and solicitors.
Guideline 3-I
A “brief description of coverage” in an invitation to inquire may consist of an explanation of
Medicare benefits, minimum benefits, standards for Medicare supplement policies, the manner in
which the advertised Medicare supplement insurance policy supplements the benefits of
Medicare and meets or exceeds the minimum benefit requirements. An invitation to inquire shall
not refer to cost or the maximum dollar amount of benefits payable.
As with all Medicare supplement insurance advertisements, an invitation to inquire must not:
(1)
Employ devices that are designed to create undue anxiety in the minds of the
elderly or excite fear of dependence upon relatives or charity;
(2)
Exaggerate the gaps in Medicare coverage;
(3)
Exaggerate the value of the benefits available under the advertised policy;
(4)
Otherwise violate the provisions of these rules.
Guideline 4
The rule permits the use of either of the following alternative methods of disclosure:
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(1)
The first alternative provides for the disclosure of exceptions, limitations,
reductions and other restrictions conspicuously and in close conjunction with the
statements to which the 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 policy benefits.
(2)
The second alternative provides for the disclosure of exceptions, limitations,
reductions and other restrictions not in conjunction with the provisions describing
policy 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,” “Exclusions,” “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.”
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 Section
5.
Guideline 5-A
The rule must be applied in conjunction with Section 1 and 4 of the rules. The 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.
The rule requires distinctly different advertisements for publication in newspapers or magazines
of general circulation, as compared to scholarly, technical or business journals and 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 of this rule.
Guideline 5-B
The rule prohibits the use of incomplete statements and words or phrases that 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. 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 Guideline 5-A, distinctly different levels of comprehension to the
subscribers of various publications may be anticipated.
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Guideline 6-A(1)
The rule prohibits the use of incomplete statements and words or phrases that create deception
by omission or commission. The following examples are illustrations of the prohibitions created
by the rule:
(1)
An advertisement that describes any benefits that vary by age must disclose the
fact.
(2)
An advertisement that uses a phrase such as “no age limit” must disclose that
premiums may vary by age or that benefits may vary by age if such is the case.
(3)
Advertisements, applications, requests for additional information and similar
materials are unacceptable if they state or imply that the recipient has been
individually selected to be offered insurance, or has had his eligibility for
insurance individually determined in advance, when in fact the advertisement is
directed to all persons in a group or to all persons whose names appear on a
mailing list.
(4)
Advertisements for group or franchise group plans that 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.
(5)
It is unacceptable to use terms such as “enroll” or “join” with reference to group
or blanket insurance coverage when such is not the case.
(6)
An advertisement that states or implies immediate coverage is provided is
unacceptable unless suitable administrative procedures exist so that the policy is
issued within fifteen working days after the application is received by the insurer.
(7)
Applications, request forms for additional information, and similar related
materials are unacceptable if they resemble paper currency, bonds or stock
certificates; or use any name, service mark, slogan, symbol or any device in such
a manner that implies that the insurer or the policy advertised is connected with a
government agency, such as the Social Security Administration or the Department
of Health and Human Services.
(8)
An advertisement that uses the word “plan” without identifying it as a Medicare
supplement insurance policy is not permissible.
(9)
An advertisement that implies in any manner that the prospective insured may
realize a profit from obtaining Medicare supplement insurance is not permissible.
(10)
An advertisement that fails to disclose any waiting or elimination periods is
unacceptable.
(11)
Examples of benefits payable under a policy shall not disclose only maximum
benefits unless the maximum benefits are paid for loss from common or probable
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illnesses or accidents, rather than exceptional or rare illnesses or accidents or
periods of confinement for these exceptional or rare accidents or illnesses.
(12)
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
policy selected and issued.
(13)
Advertisements for policies whose premiums are modest because of their limited
amount of benefits shall not describe premiums as “low,” “low-cost,” “budget” or
use qualifying words of similar import. This rule also prohibits the use of words
such as “only” and “just” in conjunction with statements of premium amounts
when used to imply a bargain.
(14)
An advertisement that exaggerates the effects of statutorily mandated benefits or
required policy provisions or that implies that these provisions are unique to the
advertised policy is unacceptable. For example, the phrase, “Money Back
Guarantee,” is an exaggerated description of the thirty-day right to examine the
policy and is not acceptable.
(15)
An advertisement that implies that a common type of policy or a combination of
common benefits is “new,” “unique,” “a bonus,” “a breakthrough,” 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.”
(16)
An advertisement may not omit the word “covered” when referring to benefits
payable under its policy. Continued reference to “covered” is not necessary where
this fact has been prominently disclosed in the advertisement.
(17)
An advertisement must state that benefits payable under the policy are based upon
Medicare eligible expenses, if such is the case.
(18)
An advertisement that fails to disclose that the definition of “hospital” does not
include a nursing home, convalescent home or extended care facility, as the case
may be, is unacceptable.
(19)
A television, radio, mail or newspaper advertisement, or lead generating device
that is designed to produce leads either by use of a coupon, a request to write or to
call the company, or a subsequent advertisement prior to contact must include
information disclosing that an insurance agent may contact the applicant if such is
the fact.
(20)
Advertisements for policies designed to supplement Medicare shall not employ
devices that are designed to create undue anxiety in the minds of the elderly. Such
phrases as “here is where most people over sixty-five 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 that unduly excite fear
of dependence upon relatives or charity are unacceptable. Phrases or devices that
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imply that long sicknesses or hospital stays are common among the elderly are
unacceptable.
(21)
An advertisement that is an invitation to contract 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.
(22)
An advertisement that is an invitation to contract for Medicare supplement
insurance is unacceptable if the advertisement:
(a)
Fails to disclose in clear language which of the Medicare benefits the
policy is not designed to supplement or if it otherwise implies that
Medicare provides only those benefits that the policy is designed to
supplement;
(b)
Describes the in-patient hospital coverage of Medicare as “Medicare
hospital,” or “Medicare Part A” when the policy does not supplement the
non-hospital or the psychiatric hospital benefits of Medicare Part A;
(c)
Fails to describe clearly the operation of the part or parts of Medicare that
the policy is designed to supplement; or
(d)
Describes those Medicare benefits not supplemented by the policy in such
a way as to minimize their importance relative to the Medicare benefits
that are supplemented.
(23)
Advertisements that indicate that a particular coverage or policy is exclusively for
“preferred risks” or a particular segment of the population, or that particular
segments of the population are acceptable risks, when such distinctions are not
maintained in the issuance of policies, are not acceptable.
(24)
An advertisement that contains statements such as “anyone can apply,” or
“anyone can join,” other than with respect to a guaranteed issue policy for which
administrative procedures exist to assure that the policy is issued within a
reasonable period of time after the application is received by the insurer, is
unacceptable.
(25)
An advertisement that uses a phrase or term such as “here is all you do to apply,”
“simply,” or “merely” to refer to the act of applying for a policy that in not a
guaranteed issue policy is unacceptable unless it refers to the fact that the
application is subject to acceptance or approval by the insurer.
(26)
Advertisements that state or imply that premiums will not be changed in the
future are not acceptable unless the advertised policies so provide.
(27)
An advertisement that does not require the premium to accompany the application
must not overemphasize that fact and must make the effective date of that
coverage clear.
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(28)
An advertisement that is an invitation to contract that fails to disclose the amount
of any deductible or the percentage of any co-insurance factor is not acceptable.
Guideline 6-A(2)
The 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 policy. Consequently, the
terms (and those specified in the rules 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.
The rule also prohibits words or phrases that exaggerate the effect of benefit payment on the
insured’s general well-being, such as “worry-free savings plan,” “guaranteed savings,” “financial
peace of mind,” and “you will never have to worry about hospital bills again.”
Advertisements that are an invitation to contract for policies 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 days) other than the initial deductible if the policy so
provides. The length of the period must be stated in days.
Guideline 6-A(4)
Explanations must not minimize nor describe restrictive provisions in a positive manner.
Negative features must be accurately set forth. Any limitation on benefits precluding preexisting
conditions must also be restated under a caption concerning exclusions or limitations,
notwithstanding that the preexisting condition exclusion has been disclosed elsewhere in the
advertisement. (See Guideline 6-C for additional comments on preexisting conditions.)
Guideline 6-A(5)
The rule should be applied in conjunction with Section 10. Phrases such as “we cut cost to the
bone” or “we deal direct with you so our costs are lower” shall not be used.
Guideline 6-B(1)
An advertisement that is an invitation to contract as defined in Section 3J must recite the
exceptions, reductions and limitations as required by the rule and in a manner consistent with
Section 4.
If an exception, reduction or limitation is important enough to use in a policy, it is of sufficient
importance that its existence in the policy should be referred to in the advertisement regardless
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of whether it may also be the subject matter of a provision of the Uniform Individual Accident
and Sickness Policy Provision Law.
Some advertisements disclose exceptions, reductions and limitations as required, but the
advertisement is so lengthy that it obscures 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 that does not minimize, render obscure or otherwise make them appear unimportant.
Guideline 6-C(1)
The rule implements the objective of Section 6A(4)(a) by requiring in negative terms a
description of the effect of a preexisting condition exclusion because such an exclusion is a
restriction on coverage. The subdivision also prohibits the use of the phrase “preexisting
condition” without an appropriate definition or description of the term and prohibits stating a
reduction in the statutory time limit as an affirmative benefit. The words “appropriate definition
or description” mean that the term “preexisting condition” must be defined as it is used by the
company’s claims department.
Guideline 6-C(2)
The phrase “no health questions” or words of similar import shall not be used if the policy
excludes preexisting conditions.
Use of a phrase such as “guaranteed issue,” or “automatic issues,” if the policy excludes
preexisting 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 Section 4.
Guideline 6-C(3)
Some states require approval of the application even when the application is not attached to the
policy when issued. The rule does not change such a requirement. The text of this guideline
should be modified to reflect the rule applicable in the particular state.
Guideline 7
Advertisements of cancelable Medicare supplement policies must state that the contract is
cancelable or renewable at the option of the company as the case may be. With respect to
noncancellable policies and guaranteed renewable policies, the policy provisions, with respect to
renewability, must be set forth and defined where appropriate.
The rule also requires a statement of the qualifying conditions that 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, “noncancellable and guaranteed renewable” does not fulfill the requirements of the rule
if the policy contains a terminal age. In such a case, a proper statement would be
“Noncancellable and guaranteed renewable to age .” If a guaranteed renewable policy
reserves the right to increase premiums, the statement must be expanded into language similar to
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“guaranteed renewable to age ,” 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 Medicare supplement insurance policy
may have one or more of the three basic limitations and an advertisement must describe each of
those which the policy contains. Over fifty percent of new individual policy issues are
guaranteed renewable; therefore, the fact that a policy is guaranteed renewable shall not be
exaggerated.
An advertisement for a Medicare supplement insurance policy that provides for age step-rated
premium rates based upon the policy year or the insured’s attained age must disclose the rate
increases and the times or ages at which the premium increases.
Guideline 8-A
The rule must be applied in conjunction with Section 9 and requires that all such statements must
be genuine and not fictitious. Under the 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 that would be unacceptable under these rules must
be edited out of a testimonial.
Guideline 8-C
The rule requires that both approval or endorsement of a policy by an individual, group or
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. This guideline also applies to Section 8E.
Guideline 9-A
An advertisement shall specifically identify the Medicare supplement insurance policy to which
statistics relate and, where statistics are given that are applicable to a different policy, it must be
stated clearly that the data does not relate to the policy being advertised.
An advertisement that states the dollar amount of claims paid must also indicate the period over
which the claims have been paid.
If the term “loss ratio” is used, it shall be properly explained in the context of the advertisement
and, unless the state has issued a regulation otherwise defining the term, it shall be calculated on
the basis of premiums earned to losses incurred and shall not be on a yearly run-off basis.
Guideline 9-C
The rule does not require that statistics for this state be used since such statistics as hospital
charges and average stays may vary from state to state. When nationwide statistics are used, that
fact should be noted, unless the statistics on the particular point are substantially the same in a
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state to which the advertisement is directed. Statistics may only be used if they are current and
credible.
Guideline 10
The rule prohibits disparaging, unfair or incomplete comparisons of policies or benefits that
would have a tendency to decline or mislead the public. The rule does not preclude the use of
comparisons by health maintenance organizations, prepaid health plans and other direct service
organizations that describe the difference between their prepaid health benefits coverage and
indemnity insurance coverage.
Guideline 11-A
The rule prohibits advertisements that imply that an insurer is licensed beyond the limits of those
jurisdictions where it is actually licensed. An advertisement that contains testimonials from
persons who reside in a state in which the insurer is not licensed or that 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.
Guideline 11-B
Although the rule permits a reference to an insurer being licensed in a state where the
advertisement appears, it does not allow exaggeration of the fact of that 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.
Terms such as “official,” or words of similar import, used to describe any policy or application
form are not permissible because of the potential for deceiving or misleading the public. This
guideline also applies to Section 11C.
Guideline 14-A(1)
The rule prohibits advertising representing that a product is offered on an introductory, initial or
special offer basis or otherwise which (a) will not be available later; or (b) is available only to
certain individuals, unless such is the fact. This rule prohibits the repetitive use of such
advertisements. Where an insurer uses enrollment periods as the usual method of advertising
these policies, the rule prohibits describing an enrollment period as a special opportunity or offer
for the applicant.
Guideline 14-A(2)
The 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 that
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 state until [insert
number] months from the close of the enrollment period. Thus, an insurer must choose whether
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to use enrollment periods or open enrollment for a product. (See Section 14A(4) for the
definition of “a particular insurance product.”)
The 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.
The 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 since the close of a preceding enrollment
period that was open to the general public for the same product.
The 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. Examples would be 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 these organizations is sponsoring an insurance
product at different times if providing the insurance under such a method is not otherwise
prohibited by law. However, the 6 month rule does 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.
Guideline 14-A(4)
The rule defines the meaning of “a particular insurance product” in Section 14A(2) and prohibits
advertising of products having minor variations such as different periods or different amounts of
daily hospital indemnity benefits, in a succession of enrollment periods.
Guideline 15
The rule is closely related to the requirements of Section 9 concerning the use of statistics. The
rule prohibits insurers that have been organized for only a brief period of time advertising that
they are “old” and also prohibits emphasizing the 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 recommendation of a
commercial rating system unless the purpose, meaning and limitations of the recommendation
are clearly indicated.
Guideline 16
The text of Subsection A is identical to the text of the first paragraph of the enforcement section
of previous drafts of the rules except the last sentence of the subsection has been revised to
require that the advertising file be maintained either for a period of four years (rather than three
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as previously) or until the next regular examination of the insurer, whichever is the longer period
of time.
Guideline 18
Filing of all Medicare supplement advertisements is required by this model and by the Medicare
Catastrophic Coverage Act of 1988 (P.L. 100-360).