Rule 120-2-11-.06 - Disclosure Requirements(1) The information required to be disclosed by this Regulation shall not be minimized, rendered obscure, or presented in an ambiguous fashion or intermingled with the text of the advertisement so as to confuse or mislead.(2) No advertisement shall omit material information or use words, phrases, statements, references, or illustrations if such omission or such use has the capacity, tendency, or effect of misleading or deceiving purchasers or prospective purchasers as to the nature of their relationship with the insurer or as to the nature or extent of any policy benefit, loss covered, premiums payable at specified ages over the life of the contract unless premiums remain level, or state or federal tax consequences. 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.(3) In the event an advertisement uses the terms "Non-Medical," "No Medical Examination Required," or similar terms where issuance of a policy is not guaranteed, such terms shall be accompanied by a further disclosure of equal prominence and in juxtaposition thereto to the effect that issuance of the policy may depend upon the answers to the health questions contained in the application.(4) An advertisement shall not use as the name or title of a policy any phrase which does not include the words "life insurance" or "annuity" unless accompanied by other language clearly indicating it is life insurance or an annuity.(5) An advertisement shall clearly and prominently describe the type of policy discussed or advertised. The name or title of the policy, or description thereof, shall not be such as to deceive or mislead a person as to the true nature of the policy or as to the benefits provided thereunder.(6) An advertisement of a policy marketed by direct response techniques shall not state or imply that because there is no agent or commission involved there will be a cost saving to prospective purchasers unless such is the fact. No such cost savings may be stated or implied in any advertisement without justification found to be satisfactory to the Commissioner prior to its use unless such is a provable fact.(7) An advertisement for a policy containing graded or modified benefits shall prominently display any limitation of benefits. If the premium is level and coverage decreases or increases with age or duration, such fact shall be clearly and prominently disclosed.(8) An advertisement for a policy with non-level premiums shall clearly and prominently describe the premium changes.(9) The following requirements shall apply to advertisements which make reference to dividends: (a) An advertisement shall not utilize or describe dividends in a manner which is misleading or has the capacity or tendency to mislead. In this connection, analogies and comparisons between dividends payable on shares of stock and dividends payable under a policy are prohibited unless the advertisement fully, clearly, and accurately describes the differences.(b) An advertisement shall not state or imply that the payment of any amount of dividends is guaranteed. If dividends are illustrated, they must be based on the insurer's current dividend scale and the illustration must contain a prominent statement to the effect that such dividends are not to be construed as guarantees of dividends to be paid in the future.(c) An advertisement shall not state nor imply that illustrated dividends under any participating policy and/or pure endowments will be or can be sufficient at any future time to assure, without the further payment of premiums, the receipt of benefits, such as a paid-up policy, unless the advertisement clearly and precisely explains what benefits or coverage would be provided at such time and under what conditions this would occur.(d) Advertisements shall not state nor imply that dividends are other than a refund or return of part of the premium paid which is not guaranteed and which is dependent on the investment earnings, mortality experience and expense experience of the company.(e) Any comparison between participating and non-participating policies or contracts must be true and accurate.(10) An advertisement shall not state or imply that a purchaser of a policy will share in or receive a stated percentage or portion of the earnings on the general account assets of the insurer.(11) The following requirements shall apply to testimonials or endorsements: (a) Testimonials used in advertisements must be genuine; represent the current opinion of the author; be applicable to the policy advertised, if any; and be accurately reproduced. In using a testimonial the insurer, agent or counselor makes as its own all of the statements contained therein, and such statements are subject to all the provisions of this Regulation.(b) If the individual making a testimonial or an endorsement has a financial interest, directly or indirectly, in the insurer or a related entity as a stockholder, director, officer, employee, or otherwise, such fact shall be clearly and prominently disclosed in the advertisement. If a person receives any benefit directly or indirectly other than required union scale wages, such fact shall be clearly and prominently disclosed in the advertisement by language identical to, or substantially similar to, the following: "THIS IS A PAID ENDORSEMENT."(c) An advertisement shall not state or imply that an insurer or a policy has been approved or endorsed by a 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 is owned, controlled, or managed by the insurer, or receives any payment or other consideration from the insurer for making such endorsement or testimonial, such fact shall be clearly and prominently disclosed in the advertisement.(d) No testimonial or endorsement shall be made in any form which constitutes a solicitation for the purchase of life insurance and annuities in this State, unless such endorser is currently licensed in Georgia as an agent to solicit insurance.(12) No advertisement shall contain statistical information relating to any insurer or any policy unless it accurately reflects recent and relevant facts. The source of any such statistics used in any advertisement shall be identified therein.(13) The following requirements shall apply to introductory, initial or special offer policies and to policies with enrollment periods:(a) An advertisement of an individual policy or combination of such policies shall not state or imply that such policy or combination of such policies 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 describe an enrollment period as "special" or "limited" or use similar words or phrases in describing it when the insurer uses successive enrollment periods as its usual method of marketing its policies.(b) An advertisement shall not state or imply 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.(c) An advertisement shall not offer a policy which utilizes a reduced initial premium rate in a manner which overemphasizes the availability and the amount of the reduced initial premium. When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, all references to the reduced initial premium shall be followed by an asterisk or other appropriate symbol which refers the reader to that specific portion of the advertisement which contains the full rate schedule for the policy being advertised.(d) An enrollment period during which a particular insurance policy 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 or similar policy and the opening of a new enrollment period. The advertisement shall specify 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 on which such enrollment period is advertised for its first time. This rule applies to all advertising media - i.e. mail, newspapers, radio, television, magazines, and periodicals - by any one insurer. The phrase "any one insurer" includes all the affiliated companies of a group of insurance companies under common management or control. This rule does not apply to the use of a termination or cutoff date beyond which an individual application for a guaranteed issue policy will not be accepted by an insurer in those instances where the application has been sent to the applicant in response to his request. It is also inapplicable to solicitations of employees or members of a particular group or association which otherwise would be eligible under specific provisions of the Georgia Insurance Code for group, blanket, or franchise insurance. In cases where an insurance product is marketed on a direct mail basis to prospective insureds by reason of some common relationship with a sponsoring organization, this rule shall be applied separately to each sponsoring organization.(14) An advertisement of a particular policy shall not state nor imply that prospective insureds shall be or become members of a special class, group, or quasi-group and as such enjoy special rates, dividends, or underwriting privileges, unless such is the fact.(15) An advertisement shall not make unfair, inaccurate nor incomplete comparisons of policies, benefits, dividends, or rates of other insurers. An advertisement shall not falsely nor unfairly describe other insurers, their policies, services, or methods of marketing.(16) For individual deferred annuity products or deposit funds which are paid to an insurer and which are ancillary to the basic individual policy benefits and are established for the payment of future premiums or for the purchase of annuity benefits at a future date, the following requirements shall apply: (a) Any illustrations or statements containing or based upon interest rates higher than the guaranteed accumulation interest rates shall likewise set forth with equal prominence comparable illustrations or statements containing or based upon the guaranteed accumulation interest rates. Such higher interest rates shall not be greater than those currently being credited by the company unless such higher rates have been publicly declared by the company with an effective date for new issues not more than three (3) months subsequent to the date of declaration. Non-guaranteed interest rates must be clearly and prominently labeled as such.(b) If an advertisement states the net premium accumulation interest rate, whether guaranteed or not, it shall also disclose in close proximity thereto and with equal prominence, the actual relationship between the gross and net premiums.(c) If any contract does not provide a cash surrender benefit prior to commencement of payment of any annuity benefits, any illustrations or statements concerning such contract shall prominently state that cash surrender benefits are not provided.(d) An advertisement shall not state or imply that individual annuity policies or deposit funds are accorded preferential tax treatment unless the advertisement fully, clearly and accurately describes the tax deferred nature of the contract, including the tax consequences on surrender.(17) The following additional disclosure requirements shall apply to the advertising and sale of life insurance to students:(a) The envelope in which insurance solicitation material is contained may be addressed to parents, i.e. "To The Parents of Joan Smith," or "Mr. and Mrs. Smith." The address may not include any combination of words which indicate that the correspondence is coming from the school itself rather than the insurer, agent or counselor, nor may it imply that the school has endorsed the material and supplied the insurer with information about the student unless such is a correct and truthful statement.(b) The return address on the envelope may not in any way imply that the soliciting insurer, agent or counselor is affiliated with a university, college or school.(c) If the term "student insurance forms enclosed" is used on the envelope it must appear in one continuous line. For example, it is not permissible to divide the wording so that "student insurance" appears on one line and "forms enclosed" on another.(d) If the name of the agent, counselor or company official appears on the envelope, it is to be identified as such, with a complete mailing address following the listing of the name.(e) Any slogan affixed by an insurer, agent or counselor which appears on an envelope to the left of the postal meter stamp may not focus on education. Neutral slogans, such as "Buy Government Bonds" or "Support Your Local United Fund," are acceptable.(f) No insurance solicitation materials may contain any of the statements or implications described and prohibited from appearing on the envelope. All letters, circulars and informational flyers used in the solicitation of insurance must be clearly identified as coming from an agent, counselor or insurer, if such is the case, and these entities must be clearly identified as such.(g) No advertisement may state or imply that because such insurance is offered to a selective group that there will be cost savings to prospective purchasers unless such is the fact. No such cost savings may be stated or implied in any advertisement without justification found to be satisfactory to the Commissioner prior to its use.Ga. Comp. R. & Regs. R. 120-2-11-.06
Ga. L. 1960, pp. 289, 305, 394, 395.
Original Rule entitled "Disclosure Requirements" adopted. F. Apr. 11, 1980; eff. July 1, 1980, as specified by the Agency.Submitted for Publishing: Mar. 7, 2007.