Subject 120-2-12 ADVERTISING ACCIDENT AND SICKNESS INSURANCE
This Regulation is made and promulgated by the undersigned Insurance Commissioner pursuant to the authority set forth in Section 33-2-9 of the Insurance Laws of this State, and especially Chapter 33-6 of the Georgia Insurance Code.
The purpose of this Regulation is:
|1.||To implement the Insurance Laws of the State of Georgia with respect to advertising and sale of Accident and Sickness Insurance in this State, as defined in Section 33-7-2 of the Georgia Insurance Laws, and included in Section 33-7-3.|
|2.|| To protect the interests of the Accident
and Sickness Insurance Public of this State by:
|3.||To prevent the use of unfair methods of competition and unfair practices among insurers with regard to the advertising, promotion and sale of accident and sickness insurance in this State.|
These Rules shall apply to any accident and sickness insurance "advertisement" as that term is hereinafter defined, intended for presentation, distribution or dissemination in this State when such presentation, distribution or dissemination is made either directly or indirectly by or on behalf of an insurer, agent, broker, or solicitor as those terms are defined in the Insurance Code of this State and these Rules.
|1.||Advertisement, for the purpose of these Rules, shall include:
|2.||Policy, for the purpose of these Rules, shall include any Policy, Plan, Certificate, Contract, Agreement, Outline of Coverage, Rider, or Endorsement which provides accident or sickness benefits, or medical, surgical or hospital expense benefits; whether on an indemnity, reimbursement, service, or prepaid basis, except when issued in connection with another kind of insurance other than life, and except disability, waiver of premium, and double indemnity benefits included in life insurance and annuity contracts.|
|3.||Insurer, for the purpose of these Rules, shall include any individual, corporation, association, partnership, reciprocal exchange, inter-insurer, Lloyds, fraternal benefit society, and any other legal entity defined as an "insurer" in the Insurance Code of this State, which is engaged in, or responsible for, the advertisement of a policy as herein defined.|
|4.||Exception, for the purpose of these Rules, shall mean 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.|
|5.||Exclusion, for the purpose of these Rules, shall be construed to mean the same as "Exception," as defined herein in Rule 120-2-12-.04(4).|
|6.||Reduction, for the purpose of these Rules, shall mean any provision which reduces the amount of the benefit to be received, or the period of time in which such benefits would be payable.|
|7.||Limitation, for the purpose of these Rules, shall mean any provision which restricts coverage under the policy, other than an "Exception" or a "Reduction" as defined herein.|
|1.||The format and content of an advertisement of an accident or sickness insurance policy shall be accurate and 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 Insurance Commissioner 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, or within a segment of the public to which such advertisement may be reasonably calculated to reach.|
|2.||Advertisement 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.|
|3.||The advertising of hospital or medical policies or plans shall clearly and accurately state the dollar limits of benefits where applicable, and time limits of benefits where applicable, in lieu of, or in conjunction with descriptive words which might imply "full coverage" for all expenses normally related to hospitalization or medical care.|
|4.||An advertisement for a policy 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 policy. The statement shall be worded 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."|
|5.||If a policy provides different benefits as to amount or time for the same loss occurring under different circumstances or from different causes, the smaller benefits payable shall be given the same prominence as the larger benefits.|
|6.|| All policies advertised shall be correctly
identified by names reasonably calculated to describe their contents, FOR
EXAMPLE: Hospital and Surgical Expense Policy; Hospital Income Policy; Hospital
Confinement Policy; Disability Income Policy; Senior Citizen Hospital Expense
Policy; Medical Care Accident and Health Policy; . . . etc.
The use of such terms as "Pay Check Plan;" "Hospital Dollars;" "Extra-income Plan;" "Extra Cash Plan;" "Extra Pay Plan;" "Hard Cash Plan;" "White Cross Plan;" "Doctors' Plan;" or similar words or phrases which do not correctly identify the policy, shall be prohibited.
In addition, all advertised policies must be identified by Form Number.
|7.||Any Optional Benefit advertised shall be captioned as "Optional Benefits" and shall be prominently and conspicuously displayed in immediate conjunction with the conditions to qualify for such Optional Benefits. An advertisement must contain a statement that in order to obtain such optional benefits there will be an additional premium charged for each optional benefit desired. A statement must also be included in the advertisement as to what conditions, if any, must be met to qualify for such benefits.|
|8.||All advertisements of accident and sickness insurance in this State shall include the name, address and phone number of the Home or Principal Office and/or of the nearest representative or representatives of the insurer authorized to handle claims and to provide service and information to applicants and/or insureds.|
|9.|| Any advertisement making reference to
"Medicare Supplement Insurance" or to coverage designed to supplement
"Medicare," shall contain a clear, prominent and conspicuous statement in
language identical to or substantially the same as the following: "THIS IS A
LIMITED POLICY DESIGNED TO COVER ONLY THOSE EXPENSES WHICH MEDICARE DOES NOT
COVER." Furthermore, such advertisements must clearly, prominently and
conspicuously disclose the exact benefits payable under such advertised policy.
If such advertised Medicare Supplement Policy supplements only Medicare Part A (or hospital benefits only), this shall be clearly, prominently and conspicuously displayed in the advertisement; nor shall such advertisements use the maximum amount payable without giving an exact example of the conditions which must be met in order for a policyholder to collect the maximum amount.
|10.||Any advertisement which refers to maximum dollar amount of benefits which can be paid for any period greater than one day shall disclose at the same time, in an equally prominent, frequent, and conspicuous manner, and in immediate conjunction therewith, the daily rate of benefits, and when applicable, the fact that said benefits are payable only for the actual number of days of hospital confinement and, when applicable, the limit on the number of days for which coverage is provided.|
|11.||Words and phrases used in an advertisement to describe policy limitations, exceptions, and reductions shall fairly, accurately, and clearly describe in understandable terms the negative features of such limitations, exceptions and reductions of the policy.|
|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 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, and/or offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.|
|2.||No advertisement shall state or imply that all costs of hospitalization or medical expense will be paid, or that all income will be replaced by benefits, unless the policy is without limitation or restriction in any form. No advertisement shall contain or use words or phrases such as: "all;" "full;" "complete;" "comprehensive;" "liberal;" "unlimited;" "as high as;" "fills all gaps;" "full coverage;" "complete protection;" "all coverage;" "deductibles covered;" "this policy will help pay your hospital and surgical bill;" "this policy will help fill some of the gaps that Medicare and your present insurance leave out;" "this policy will help to replace your income" (when used to express loss of time benefits); "salary replacement;" "wage continuation;" or similar words and phrases, to imply generosity or liberality or in a manner which exaggerates any benefits beyond the terms of the policy.|
|3.||No advertisement shall contain descriptions of a policy 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."|
|4.||No advertisement shall contain or use identifying terms, words, or phrases which do not correctly identify the policy. (See Rule 120-2-12-.05(6).)|
|5.||No advertisement of a benefit for which payment is conditional upon the incurrence of any medical expenses shall use words or phrases such as "tax free;" "extra cash;" "extra income;" "extra pay;" or substantially similar words or phrases that might have the capacity, tendency or effect of misleading the public into believing that the policy advertised will, in some way, enable them to make a profit from any illness, injury, condition, or confinement in a hospital or similar facility.|
|6.||No advertisement of a hospital or other similar facility confinement benefit shall advertise that the amount of 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 actual confinement.|
|7.||No advertisement of a policy covering only one disease or list of specified diseases shall imply coverage beyond the terms of the policy. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.|
|8.||An advertisement or a direct response insurance product 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.|
|9.||No advertisement shall contain or use any statement relating to time within which claims are paid (within 24 to 48 hours, etc.), unless the policy being advertised actually requires and guarantees payment within such designated period.|
|10.||No advertisement shall imply that a company frequently and routinely pays specified sums for any type of accident or sickness when, in fact, only certain specified accidents or illnesses are covered.|
|1.||Exceptions, reductions and limitations shall be prominently and conspicuously displayed in the same style type and in a type size equal to, or larger than, that used to describe the benefits. Furthermore, a multi-color scheme shall not be used in such a manner as to render such terms obscure.|
|2.||Any advertisement which refers to either a dollar amount, or a period of time for which any benefit is payable, or the cost of the policy, or specific policy benefit, or the loss for which such benefit is payable, shall also disclose those exceptions, reductions and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity or tendency to mislead or deceive.|
|3.||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 such loss, an advertisement which is subject to the requirements of the preceding paragraph shall clearly, prominently and conspicuously disclose the existence of such periods.|
|4.||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."|
|1.||An advertisement which is subject to the requirements of these Rules shall, in negative terms, clearly, prominently and conspicuously disclose the extent to which any loss is not covered if the cause of such loss is traceable to a physical condition, injury or disease existing before issuance of the policy. If the term "pre-existing condition," or similar words or phrases are used in an advertisement, they must be accompanied by an appropriate definition or description which states exactly what conditions are included as "pre-existing conditions" for the purposes of the policy.|
|2.||When a 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 thereunder. This rule prohibits the use of the phrase "no medical examination required," and phrases of similar import, but does not prohibit explaining "automatic issue."|
|3.||If an insurer requires a medical examination for a specified policy, the advertisement shall prominently disclose that a medical examination is required.|
|4.|| In the event any 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 which reflects the pre-existing condition provisions of the policy,
immediately preceding the blank space for the applicant's signature. For
example, such an application form must contain a question identical to or
substantially similar to the following: "Do you understand that this policy
will not pay benefits during the first _______________ year(s) after the issue
date for a disease or physical condition which you now have, or have had in the
 I do understand  I do not understand."
No policy shall be issued unless the question is answered affirmatively.
Rule 120-2-12-.09 Necessity for Disclosure of Policy Provisions Relating to Renewability, Cancellability and Termination
|1.||Any advertisement of a policy or plan of benefits contained therein must not imply that the policy or plan is guaranteed renewable at the discretion of the insured unless the renewability of such policy or plan of benefits is, in fact, guaranteed.|
|2.|| Any advertisement which refers to:
|1.||Testimonials 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, makes as its own all of the statements contained therein, and the advertisement, including such statement, is subject to all the provisions of these Rules.|
|2.||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 prominently disclosed in the advertisement.|
|3.||If a person is compensated for making a testimonial, endorsement or appraisal, such fact shall be prominently disclosed in the advertisement by language identical to, or substantially similar to the following: "THIS IS A PAID ENDORSEMENT." (This Rule does not require disclosure of union scale wages required by union rules if the payment is actually for such scale wages for TV or radio performances). For the purposes of these Rules, the payment of substantial amounts, directly or indirectly, to an endorser for "travel and entertainment" in connection with the filming or recording of TV or radio advertisements constitutes compensation, and disclosure of such compensation is required.|
|4.||An advertisement shall not state or imply that an insurer or a 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 clearly, prominently and conspicuously 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.|
|5.||When a testimonial refers to benefits received under a 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 years, or until the filing of the next regular report of examination of the insurer, whichever is the longer period of time.|
|6.||For the purposes of these Rules, with regard to testimonials and endorsements by third parties, "Endorser" shall mean any individual, group of individuals, society, association or organization that endorses, approves or recommends an insurer, a policy, or plan of benefits.|
|7.||No such testimonial, endorsement or appraisal shall be made in any form which constitutes a solicitation of insurance in this State, unless such endorser is currently licensed in Georgia to solicit insurance.|
|1.||Any advertisement relating to the dollar amounts of claims paid, the number of persons insured, or similar statistical information relating to any insurer or policy, must not contain irrelevant facts and must not be used unless it accurately reflects all of the relevant facts. Furthermore, such advertisements must not contain irrelevant facts; nor shall it imply that statistics used therein are derived from the policy advertised unless such is the fact. When statistics used in an advertisement are applicable to other policies or plans, it shall specifically be so stated.|
|2.||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.|
|3.||An unusual amount paid for a unique claim for the policy advertised is misleading and shall not be used.|
|4.||The source of any statistics used in an advertisement must be clearly, prominently and conspicuously identified in the advertisement.|
|1.||When a choice of the amount of benefits is referred to, an advertisement 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.|
|2.||An advertisement listing the benefits of two or more policies different in their content should identify each policy with the benefits which it offers. Group Master Policies are not included for the purposes of this Rule. In such cases, the advertisement shall disclose that these benefits are provided only through a combination of policies.|
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 criticize competing methods of marketing insurance.
|1.||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.|
|2.||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 or plans of insurance are approved, endorsed, or accredited by any division or agency of this State or the United States Government.|
|1.||The name of the actual insurer advertised shall be properly identified and prominently, clearly and conspicuously displayed in all of its advertisements. An advertisement shall not refer to the parent company of the insurer without clearly disclosing that it is a separate legal entity and not responsible for the insurer's financial condition or contractual obligations.|
|2.||An advertisement shall not include a trade name, an insurance group designation, or the name of any division, affiliate or subsidiary of the insurer, or any service mark, trade mark, slogan, symbol, or other device which has the capacity or tendency to deceive an individual as to the true identity of the insurer or the policy being advertised.|
|3.||No advertisement shall use any combination of words, symbols, or physical materials which 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 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.|
An advertisement of a particular plan or policy of insurance 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 such is the fact.
|2.||An advertisement shall not offer a policy which utilizes a reduced initial premium rate in a manner which over-emphasizes 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 must be stated in juxtaposition in each portion of the advertisement where the initial reduced premium appears.|
|3.||Special awards, such as a "safe drivers' award," or special classes such as "non-drinkers" or "non-smokers" shall not be used in connection with advertisements of accident or accident and sickness insurance, unless premiums are, in fact, reduced on the basis of statistical information showing reduced risk based on membership in such class. Such statistics shall be on file in the Home or Principal Office of the insurer.|
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 recommendation.
|1.||All advertisements, regardless of by whom written, created or designed, shall be the responsibility of the insurer sponsoring the same. Every insurer shall at all times maintain complete control over the content, form and method of dissemination of all advertisements of its contracts.|
|2.||Each insurer shall maintain at its home or principal office a complete file containing every printed, published or prepared advertisement of individual policies and typical printed, published or prepared advertisements of blanket, franchise and group policies hereafter disseminated in this State, with a notation attached to each such advertisement which shall indicate the manner and extent of distribution and the form number of any policy advertised. Such file shall be subject to regular and periodic inspection at the discretion of this Department. All such advertisements shall be maintained in said file for a period of not less than five (5) years.|
|3.||Each insurer required to file an Annual Statement with this Department must file, together with its Annual Statement, a Certificate executed by an authorized officer of the insurer wherein it is stated that to the best of his knowledge, information and belief, the advertisements disseminated by the insurer during the preceding calendar year complied, or were made to comply in all respects, with the provisions of the Insurance Laws of this State as implemented and interpreted by this Regulation.|
If any Section or portion of a Section of this Regulation, or the applicability thereof to any person or circumstance is held invalid by a Court, the remainder of the Rules, or the applicability of such provision to other persons or circumstances, shall not be affected thereby.
Any insurer, agent, representative, officer, or employee of such insurer failing to comply with the requirements of this Regulation shall be subject to such penalties as may be appropriate under the Insurance Laws of the State of Georgia.
This Regulation shall become effective July 1, 1973.