Illinois Administrative Code › Title 50 - INSURANCE › Part 2002 - ADVERTISING OF ACCIDENT AND SICKNESS INSURANCE › Appendix A - Guidelines › ILLUSTRATION U - Guideline to Section 2002.80

Current through Register Vol. 48, No. 28, July 12, 2024
a) This Section
				imposes the same disclosure standards with respect to policy provisions
				relating to renewability, cancelability and termination, modification of
				benefits, losses or premiums because of age or otherwise as stated in
				ILLUSTRATION O. The comments in that Illustration are equally applicable to
				this Section.
b) Advertisements of
				cancelable policies must state that the contract is cancelable or renewable at
				the option of the company as the case may be. For example, the following
				represent illustrations: A policy which is cancelable shall be advertised in a
				manner similar to "This policy can be cancelled by the company at any time"; a
				policy which is renewable at the option of the insurance company shall be
				advertised in a manner similar to "This policy is renewable at the option of
				the company" or "The company has the right to refuse renewal of this policy" or
				"Renewable at the option of the insurer." Advertisements of such policies must
				indicate that the insurer has the right to increase premium rates.
c) With respect to non-cancelable policies
				and guaranteed-renewable policies, the Part requires that a summary of the
				policy provisions with respect to renewability must be set forth and defined
				where appropriate. The disclosure of provisions relating to renewability
				requires the use of language such as "non-cancelable," "non-cancelable and
				guaranteed renewable," or "guaranteed renewable."
d) The Part also requires a statement of the
				qualifying conditions which constitute limitations of the permanent nature of
				the coverage. These customarily fall into three categories: age limits,
				reservation of right to increase premiums and the establishment of aggregate
				limits. For example, "non-cancelable and guaranteed renewable" does not fulfill
				the requirement of the Part if the policy contains a terminal age of 65. In
				such a case, a proper statement would be "non-cancelable and guaranteed
				renewable to age 65." If a guaranteed renewable policy reserves the right to
				increase premiums, the statement must be expanded into language similar to
				"guaranteed renewable to age 65, but the company reserves the right to increase
				premium rates on a class basis." A policy may have one or more of the three
				basic limitations and an advertisement must describe each of those which the
				policy contains. Most new individual policy issues are guaranteed renewable;
				therefor, the fact that a policy is guaranteed renewable shall not be
				exaggerated.
e) This Part also
				requires the disclosure of any modification of benefits or losses covered
				because of age or for other reasons. Provisions for reduction of benefits at
				stated ages must be set forth. For example, a policy may contain a provision
				which reduces benefits 50% after age 60 although it is renewable to age 65.
				Such a reduction would have to be set forth. Also, a provision for the
				elimination of certain hazards at any specific ages or after the policy has
				been in force for a specified time would have to be set forth.
f) An advertisement for a policy which
				provides for step-rated premium rates based upon the policy year of the
				insured's attained age must disclose such rate increases and the times or ages
				at which such premiums increase.
g)
				This Section requires that the qualifying conditions of renewability must be
				disclosed in a manner which does not minimize or render obscure the qualifying
				conditions of renewal.