R590. Insurance, Administration.R590-154. Unfair Marketing Practices Rule; Misleading Names.
R590-154-1. Authority.
This rule is promulgated by the commissioner pursuant to Section 31A-2-201.
R590-154-2. Purpose and Scope.
(1) The purpose of this rule is to provide guidance to a licensee regarding unfair marketing practices.
(2) This rule applies to a licensee under Title 31A, Insurance Code.
R590-154-3. Definitions.
Terms used in this rule are defined in Section 31A-1-301. Additional terms are defined as follows:
(1) "Licensee" means a person who holds a license.
R590-154-4. Prohibited Practices Findings.
The commissioner finds that each practice prohibited in this rule constitutes a misleading, deceptive, or unfairly discriminatory practice that unreasonably restrains competition, except as specifically allowed in this rule.
R590-154-5. Licensee Name.
(1) A licensee may not use any name that:
(a) is misleading or deceptive;
(b) is likely to be mistaken for another licensee already in business; or
(c) implies association or connection with any other organization where actual bona fide association or connection does not exist.
(2) "Insurance consulting," "insurance consultants" or similar words shall only be used if the licensee is licensed as a consultant.
(3) A licensee shall be licensed using the licensee's legal name.
(4) A licensee may use its legal name or an assumed name if the commissioner is notified.
R590-154-6. Selling, Soliciting, or Negotiating for Insurance or Advising or Consulting About Insurance.
(1) When selling, soliciting, or negotiating for insurance or advising or consulting about insurance, a licensee shall:
(a) disclose that the licensee is an insurance licensee; and
(b) use the name of the agency licensee if the individual licensee is designated to act under an agency's license.
(2) When selling, soliciting, or negotiating for insurance or advising or consulting about insurance, a licensee may not:
(a) use or imply a license type or line of authority not held by the licensee; and
(b) sell, solicit, or negotiate insurance or consult or advise for an agency licensee unless the individual licensee is designated to act under the agency's license.
R590-154-7. Claiming or Representing Department Approval.
(1) A licensee may not represent, either directly or indirectly, that the department, the commissioner, or any employee of the department, has approved, reviewed, or endorsed any marketing program, insurance product, insurance company, practice, or act.
(2) A licensee may report:
(a) the filing of any form, financial report, or other document with the department; or
(b) any licensure, examination, or other action involving the department or the commissioner.
(3) A licensee may not misrepresent the effect or import of any item reported under Subsection (2).
R590-154-8. Unfair Inducements.
(1) A multi-level marketing program, investment program, membership, or other similar program designed or represented to produce or provide funds to pay any part of the cost of insurance constitutes an unfair inducement.
(2) A bona fide employee benefit program is not an unfair inducement.
R590-154-9. Premium Reduction Through Commissions or Consulting Fees.
(1) A licensee may not give or offer to give a premium reduction through a commission or a consulting fee back to the insurer for any purpose, including competition, unless the reduction is for expense savings and is justified by a reasonable standard and with reasonable accuracy.
(2)(a) An insurer's underwriting files must document any savings to enable the commissioner to verify compliance.
(b) The documentation must demonstrate legitimate expense savings realized by the insurer and its producer.
R590-154-10. Prohibited Financing Arrangements.
A licensee may not obtain or arrange for third party financing of premium without the knowledge and consent of the insured.
R590-154-11. Acting as a Licensee in Other Jurisdictions.
