Insurance

Administration

Rule R590-130: Rules Governing Advertisements of Insurance

Effective Date: 12/08/2022

Admin. Code Reference: R590-130

Rule Type: Current Rule

R590. Insurance, Administration.

R590-130. Rules Governing Advertisements of Insurance.

R590-130-1. Authority.

This rule is promulgated by the commissioner pursuant to Sections 31A-2-201 and 31A-23a-402.

R590-130-2. Purpose and Scope.

(1) The purpose of this rule is to:

(a) ensure that disclosures regarding benefits, limitations, and exclusions are clear and truthful; and

(b) establish guidelines and standards of conduct to prevent unfair, deceptive, and misleading insurance advertising.

(2) This rule applies to:

(a) an insurance advertisement intended for presentation, distribution, or dissemination in this state; or

(b) an insurer or a person on the insurer's behalf who presents, distributes, or disseminates an advertisement in this state.

R590-130-3. Definitions.

Terms used in this rule are defined in Section 31A-1-301. Additional terms are defined as follows:

(1) "Advertisement" means:

(a) printed and published material;

(b) audio or visual material;

(c) descriptive literature used in direct mail, a newspaper, a magazine, a radio script, a TV script, a website, an email, a billboard, or similar displays;

(d) a prepared sales talk, presentation, or material;

(e) promotional material included with a policy when the policy is delivered; and

(f) material used to solicit a renewal or reinstatement.

(2) "Invitation to contract" means an advertisement that describes one or more contract provisions for a specific insurance product.

(3) "Preneed funeral contract" means an agreement by or for an individual before that individual's death relating to the purchase or provision of specific funeral or cemetery merchandise or services.

R590-130-4. Method of Disclosure of Required Information.

(1)(a) Any information required to be disclosed under this rule shall be:

(i) conspicuous and in close conjunction with the related statement; or

(ii) under appropriate captions.

(b)(i) The disclosure shall be prominent.

(ii) The disclosure may not be:

(A) minimized;

(B) rendered obscure;

(D) intermingled within the context of the advertisement.

(2) Advertising materials shall be identified by a unique form number.

(3) Advertising materials reproduced in quantity shall be identified by form numbers or other identifying means that are sufficient to distinguish an advertisement from any other advertising material, policy, application, or other material used by the insurer or advertiser.

R590-130-5. Content of Advertisements.

(1) An insurance advertisement shall be complete, clear, and truthful.

(2) An insurance advertisement may not deceive or mislead the reader, viewer, or listener in fact or in implication.

(3) A word or phrase that requires familiarity with insurance terminology, or is clear only by implication, may be used only when clearly explained.

(4) An insurer must clearly identify the insurance policy as an insurance policy.

(5) A policy trade name must be followed by the words "Insurance Policy" or similar words:

(a) indicating that an insurance policy is being offered; or

(b) for a health maintenance organization, prepaid health plan, or other direct service organization, indicating that a health benefit product is being offered.

(6) An insurer, producer, or other person may not solicit a resident of this state to purchase insurance by:

(a) using a deceptive name; or

(b) misleading a resident in this state regarding:

(i) an insurer, producer, or other person's status, character, proprietary capacity, or representative capacity; or

(ii) an advertisement's true purpose.

R590-130-6. Advertisements of Benefits Payable, Losses Covered, or Premiums Payable.

(1) Deceptive words, phrases, and illustrations are prohibited.

(a) An advertisement may not omit information or use words, phrases, statements, references, or illustrations that may mislead or deceive a purchaser or potential purchaser regarding:

(i) the nature or extent of a policy benefit payable;

(ii) the loss covered; or

(iii) the premium payable.

(b) The requirements in Subsection (a) must be satisfied even if:

(i) the prospective insured could review the policy before the sale; or

(ii) an unsatisfied purchaser is offered a refund of the premium.

(c) An advertisement may not contain or use words or phrases in a manner that exaggerates a policy benefit when viewing the policy as a whole, including:

(i) all;

(ii) full;

(iii) complete;

(iv) comprehensive;

(v) unlimited;

(vi) up to;

(vii) as high as;

(viii) this policy will help fill some of the gaps that Medicare and your present insurance leave out;

(ix) the policy will help to replace your income; or

(x) similar words and phrases.

(d) An advertisement that is also an invitation to join an association, trust, or discretionary group shall:

(i) solicit insurance coverage on a separate and distinct application that requires separate signatures for each application;

(ii) have separate and distinct applications on separate documents;

(iii) disclose:

(A) that the prospective members are purchasing insurance;

(B) applying for membership;

(D) the underwriter.

(e)(i) An advertisement may not describe policy limitations, exceptions, or reductions in a positive manner to imply that policy limitations, exceptions, and reductions are benefits.

(ii) The following are examples of prohibited uses:

(A) describing a waiting period as a "benefit builder"; or

(B) stating "even preexisting conditions are covered after two years."

(iii) Words and phrases used in an advertisement to describe the advertised policy's limitations, exceptions, and reductions shall fairly and accurately describe the negative features of the limitations, exceptions, and reductions.

(f)(i) An advertisement for a benefit that conditions payment on confinement in a hospital or similar facility may not use words or phrases that could mislead an individual to believe that the advertised policy enables an individual to profit from being hospitalized.

(ii) The following are prohibited phrases:

(A) tax-free;

(B) extra cash;

(D) extra pay; or

(E) substantially similar words or phrases.

(g) An advertisement for a fixed indemnity benefit that advertises weekly or monthly benefits shall explain in the advertisement, with equal prominence, that the benefits are based on an accumulated daily pro rata benefit.

(h) An advertisement for a policy covering one disease or a list of specified diseases may not:

(i) imply coverage beyond the policy's terms; or

(ii) use synonymous terms to refer to a disease that may imply broader coverage than is in the policy.

(i) An advertisement for a policy providing benefits for a specified illness, such as cancer, shall:

(i) state the policy's limited nature; and

(ii) use language identical or substantially similar to the following:

(A) "THIS IS A LIMITED POLICY"; or

(B) "THIS IS A CANCER ONLY POLICY".

(j) An advertisement for a policy providing benefits for a specified accident, such as an automobile accident, shall:

(i) state the policy's limited nature; and

(ii) use language identical or substantially similar to "THIS IS AN AUTOMOBILE ACCIDENT ONLY POLICY".

(k) An advertisement for a preneed funeral contract that is funded by a life insurance policy or annuity contract shall adequately disclose that a life insurance policy or annuity contract is:

(i) involved in the arrangement; or

(ii) being used to fund the arrangement.

(l) An advertisement for a life insurance policy may not use a phrase in the policy's name or title that does not include the words "life insurance," unless other accompanying language clearly indicates that the policy is life insurance.

(2) Exceptions, Reductions, and Limitations.

(a) An advertisement that is an invitation to contract shall disclose the policy's exceptions, reductions, and limitations that affect the policy's basic provisions.

(b) An advertisement that is an invitation to contract shall disclose a policy's waiting, elimination, probationary, or similar time period regarding:

(i) the policy's effective date and the effective date of coverage under the policy; or

(ii) the date of loss and the date benefits begin to accrue for the loss.

(c) An advertisement may not use words or phrases in a way that may minimize the effects of a policy's exceptions, reductions, limitations, or exclusions, including:

(i) only;

(ii) just;

(iii) merely;

(iv) necessary; or

(v) similar words or phrases.

(3) Preexisting Conditions.

(a) An advertisement that is an invitation to contract shall disclose in a negative tone any loss that is not covered if the cause of the loss is traceable to a condition existing prior to the policy's effective date.

(b) A description or definition must accompany the use of the term "preexisting condition."

(c) An advertisement may not state or imply that an applicant's physical condition or medical history will not affect the issuance of a policy or a claim being paid when an accident and health insurance policy does not cover losses resulting from a preexisting condition.

(d) An advertisement is prohibited from using the phrase "no medical examination required" or similar phrases.

(e) An advertisement is not prohibited from using the phrase "guaranteed issue" or "automatic issue."

(f) An advertisement that is an invitation to contract regarding a specified disease policy shall disclose if a medical examination is required.

(g)(i) When an advertisement contains an application form to be completed and returned, the application form shall contain a question or statement regarding the policy's preexisting condition provision, which shall be located:

(A) immediately preceding the blank space for the applicant's signature; or

(B) preceding the statement regarding the truthfulness of information provided in the application.

(ii) The following are examples of the question or statement required under Subsection (g)(i):

(A) Do you understand that this policy will not pay benefits during the first (insert period of time) after the issue date for a disease or physical condition that you now have or have had in the past? YES; or

(B) I understand that the policy applied for will not pay benefits for any loss incurred during the first (insert period of time) after the issue date on account of a disease or physical condition that I now have or have had in the past.

R590-130-7. Necessity for Disclosing Policy Provisions Relating to Renewability, Cancelability, and Termination.

(1) An advertisement that is an invitation to contract shall disclose, in a manner that does not minimize or obscure the qualifying conditions, provisions regarding the following:

(a) cancellation, renewability, and termination; and

(b) modification of benefits, losses covered, or premiums.

(2) An advertisement may only use the term "noncancelable" to advertise a policy that:

(a) the insured has the right to continue in force coverage by timely paying the policy's premiums; and

(b) the insurer has no right to change provisions in the policy while the policy is in force.

(3) An advertisement may only use the term "guaranteed renewable" to advertise a policy that:

(a) the insured has the right to continue in force by timely paying the policy's premiums; and

(b) the insurer has no right to change provisions in the policy while the policy is in force, except that the insurer may make premium rate changes.

R590-130-8. Testimonials or Endorsements by Third Parties.

(1) A person making a testimonial or endorsement is a spokesperson if the person:

(a) has a financial interest in the insurer or a related entity as a stockholder, director, officer, employee, or otherwise;

(b) has been formed by the insurer;

(d) has a person in a policy making position that is affiliated with the insurer in a capacity described in Subsections (1)(a) through (1)(c); or

(e) is directly or indirectly compensated for making a testimonial or endorsement.

(2)(a) A testimonial or endorsement in an advertisement shall disclose in the introductory portion, in the same form and with equal prominence in the advertisement, that a spokesperson has the following interest or capacity in the insurer making the advertisement:

(i) a financial interest;

(ii) a proprietary interest; or

(iii) a representative capacity.

(b) An advertisement shall disclose if the spokesperson was directly or indirectly paid for making a testimonial or endorsement.

(i) using the phrase "Paid Endorsement" or words substantially similar; and

(ii) using a font and size at least equal to the font and size for whichever of the following is larger:

(A) the spokesperson's name; or

(B) the body of the testimonial or endorsement.

(d) A testimonial or endorsement disclosure for a non-print advertisement shall:

(i) make the disclosure in the advertisement's introductory portion; and

(ii) be given equal prominence in the advertisement.

(3)(a) An advertisement may not state or imply that an individual, group of individuals, society, association, or other organization has approved or endorsed an insurer or an insurance policy unless:

(i) the individual, group of individuals, society, association, or other organization has approved or endorsed the insurer or the insurance policy; and

(ii) the advertisement discloses any proprietary relationship between an organization and the insurer.

(b) An advertisement shall disclose, if applicable, the following regarding an entity making an endorsement or testimonial:

(i) the insurer formed the entity;

(ii) the insurer owns the entity;

(iii) the insurer controls the entity; or

(iv) a person that owns or controls the insurer formed, owns, or controls the entity.

(c) If the entity in Subsection (3)(a) is an association, the advertisement must disclose, if applicable, the following regarding an insurer:

(i) the insurer or the insurer's officer formed or controls the association; or

(ii) the insurer or the insurer's officer holds a policy making position in the association.

(4)(a) An insurer using a testimonial that refers to a benefit received under an insurance policy must retain for three years beginning when the insurer last used the testimonial in an advertisement:

(i) the specific claim data, including claim number;

(ii) the date of loss; and

(ii) any other pertinent information.

(b) A testimonial in an advertisement is prohibited if:

(i) the testimonial does not correctly reflect the insurer's present practice; or

(ii) the testimonial is not applicable to the advertised policy or benefit.

(5)(a) An advertisement may not imply that a state or federal agency or division has granted approval, accreditation, or endorsed an insurer's policy forms or advertisement.

(b) An insurer may not use the approval or filing of a policy form or advertisement to state or imply that a governmental agency has endorsed or recommended the following:

(i) the insurer;

(ii) the insurer's policy;

(iii) the insurer's advertisement; or

(iv) the insurer's financial condition.

R590-130-9. Use of Statistics and Exaggerations.

(1) An advertisement may not represent or imply that:

(a) an insurer's claim settlement practice is liberal, generous, or similar; or

(b) an insurer's claim settlement practice is or will be beyond the contract's actual terms.

(2) An insurer may not mislead a consumer by advertising an unusual amount paid for a unique claim under an advertised policy.

(3) An advertisement shall identify the source of any statistical information used in the advertisement.

R590-130-10. Identification of Plan or Number of Policies.

(1) An advertisement that is an invitation to contract and that advertises a choice in available benefits shall disclose that:

(a) the amount of benefits depends on the plan selected; and

(b) the premium amount varies depending on the amount of benefits selected.

(2) An advertisement that is an invitation to contract that refers to various benefits shall disclose that:

(a) two or more policies, other than a group master policy, may be issued; or

(b) the benefits are provided only through a combination of the policies.

R590-130-11. Identity of Insurer.

(1)(a) An advertisement shall state the actual insurer's name.

(b) An advertisement that is an invitation to contract shall state the form number or policy number.

(c) An advertisement shall disclose the actual insurer's name before using any of the following, if the advertisement would be misleading or deceptive regarding the insurer's true identity:

(i) a trade name;

(ii) an insurance group designation;

(iii) an insurer's parent company's name;

(iv) the name of an insurer's particular division;

(v) a service mark;

(vi) a slogan;

(vii) a symbol; or

(viii) any other device.

(2) An advertisement may not use a word combination, symbol, or physical material in a manner that the content, phraseology, shape, color, or other characteristic:

(a) is similar to the word combination, symbol, or physical material used by a federal, state, or municipal governmental agency; and

(b) would confuse or mislead prospective insureds to believe that the advertisement is in some manner connected to a federal, state, or municipal governmental agency.

(3)(a) An advertisement, envelope, or stationery that uses words, letters, initials, symbols, or other devices that are similar to the words, letters, initials, symbols, layout, or other devices used by governmental agencies or other insurers is not permitted.

(b) An advertisement may not use words, letters, initials, symbols, or other devices that may lead the public to believe that a governmental agency or other insurer provided or endorsed the advertised coverages.

(c) An advertisement may not use words, letters, initials, symbols, or other devices that may lead the public to believe the advertiser is affiliated with or is endorsed by a governmental agency or other insurer.

(4) An advertisement may not use the name of a state or political subdivision in a policy description or name unless the company name contains the same state or political subdivision name.

(5) An advertisement may not use an envelope or stationery in a way that implies the insurer, the policy advertised, or the producer who may call on the consumer regarding the advertisement, is affiliated with a governmental agency.

(6)(a) An advertisement may not incorporate the word "Medicare" in the advertised plan or policy title.

(b) An advertisement may incorporate the word "Medicare" if the advertisement uses language differentiating the policy from the term "Medicare" in the advertisement.

(c) An advertisement may not use a phrase that includes "Medicare Department of an Insurance Company" or similar language.

(7) An advertisement may not imply that an individual may lose a right, privilege, or benefit under federal, state, or local law if the individual fails to respond to the advertisement.

(8) An advertisement may not use a letter, initial, or symbol of an insurer's corporate name or trademark that misleads or deceives the public regarding the insurer's identity, unless the advertisement:

(a) uses the insurer's correct and complete name; and

(b) places the insurer's correct and complete name in close conjunction with, and in the same type as the letters, initials, or symbols for the insurer's corporate name or trademark.

(9) An advertisement may not use an agency name, or a name that includes "Underwriters" or "Plan," in type, size, and location in the advertisement that may mislead or deceive a consumer regarding the identity of the insurer or advertiser.

(10) An advertisement may not use an address that is misleading or deceptive regarding an insurer or advertiser's:

(a) identity;

(b) location; or

(11) An advertisement may not use any terminology or word in a trade name of an insurer's insurance policy that is similar to a governmental agency or governmental program that may confuse, deceive, or mislead a prospective purchaser.

(12) An advertisement may not use any terminology or word in a trade name of an insurer's insurance policy that implies a sponsorship, endorsement, or connection with a governmental agency or governmental program.

R590-130-12. Group or Quasi-Group Implications.

(1) An advertisement may not state or imply a preferred status in an advertisement unless the insurance policy provides the advertised renewal rate for:

(a) prospective insureds becoming group or quasi-group members covered under a group policy; or

(b) prospective insureds receiving special rates or underwriting under the group policy.

(2) When sold on an individual basis at regular rates, an advertisement may not solicit a particular class, such as governmental employees, by stating or implying that an occupational status entitles the member to a reduced rate for:

(a) a group; or

(b) another basis.

R590-130-13. Enforcement Procedures.

(1) Each advertiser or insurer shall maintain a file containing advertisements for three years from the date last used including:

(a) every printed, published, or prepared advertisement of the advertiser or insurer's individual policies;

(b) every printed, published, or prepared advertisement of the advertiser or insurer's blanket, franchise, and group policies;

(c) any advertisement disseminated in this state and any other state whether or not the insurer is licensed in the other state; and

(d) a notation attached to each advertisement that includes:

(i) the manner and extent the advertiser or insurer distributed the advertisement; and

(ii) the advertised insurance policy's form number.

(2) Each advertiser or insurer shall maintain the file required in Subsection (1) at the advertiser or insurer's home office or principal office.

(3) The file required in Subsection (1) is subject to the department's regular and periodic inspection.

R590-130-14. Filing for Prior Review.

(1) The commissioner may require an advertiser or insurer to file advertising material with the department for review before using the advertising material.

(2) The filing under Subsection (1) is for informational purposes only.

R590-130-15. Severability.

If any provision of this rule, Rule R590-130, or its application to any person or situation is held invalid, such invalidity does not affect any other provision or application of this rule that can be given effect without the invalid provision or application. The remainder of this rule shall be given effect without the invalid provision or application.

KEY: insurance law

Date of Last Change: December 8, 2022

Notice of Continuation: August 18, 2025

Authorizing, and Implemented or Interpreted Law: 31A-2-201; 31A-23a-402