California Code of Regulations › Title 10 - Investment › Chapter 5 - Insurance Commissioner › Subchapter 3 - Insurers › Article 12 - Disability Insurance Advertisements › Section 2536.11 - Introductory, Initial or Special Offers

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
(1) An
				  advertisement of an individual policy shall not directly or by implication
				  represent that a contract or combination of contracts 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 contain phrases describing an enrollment period as "special,"
				  "limited," or similar words or phrases when the insurer uses such enrollment
				  periods as the usual method of advertising disability insurance.
GUIDELINE 2536.11(a)(1)
This Subsection prohibits advertising representing that a
					 product is offered on an introductory, initial, special offer basis or
					 otherwise which (a) will not be available later; or (b) is available only to
					 certain individuals unless such is the fact. This rule prohibits the repetitive
					 use of such advertisements. Where an insurer uses enrollment periods as the
					 usual method of advertising these policies, the rule prohibits describing an
					 enrollment period as a special opportunity or offer for the
					 applicant.
(2) An enrollment
				  period during which a particular insurance product may be purchased on an
				  individual basis shall not be offered within a specified geographical area in
				  this State unless there has been a lapse of not less than three months between
				  the close of the immediately preceding enrollment period for the same product
				  and the opening of the new enrollment period. The phrase "a specified
				  geographical area" means one or more of the following groups of counties:
(A) San Francisco, Marin, Sonoma, Napa,
				  Solano, Alameda, Contra Costa and San Mateo,
(B) Sacramento, Amador, Alpine and North to
				  the Oregon border,
(C) Santa Clara,
				  Santa Cruz, San Benito and Monterey,
(D) San Joaquin, Stanislaus, Merced, Fresno,
				  Kings, Kern and East to the Nevada border. Kern County may be included in
				  either this Area (D) or in Area (E) below at the option of the
				  insurer.
(E) San Luis Obispo, Santa
				  Barbara and Ventura,
(F) Los
				  Angeles, Orange, Riverside and San Bernardino,
(G) San Diego and Imperial.
The advertisement shall indicate the date by which the
					 applicant must mail the application which shall be not less than ten days and
					 not more than forty days from the date that such enrollment period is
					 advertised for the first time. This applies to all advertising media, i.e.,
					 mail, newspapers, radio, television, magazines and periodicals, used 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 is
					 inapplicable to solicitations of employees or members of a particular group or
					 association which otherwise would be eligible under specific provisions of the
					 Insurance Code for group, blanket or selected group (franchise)
					 insurance.
GUIDELINE 2536.11(a)(2)
This Subsection restricts the repetitive use of enrollment
					 periods. The requirement of reasonable closing dates and waiting periods
					 between enrollment periods was adopted to eliminate the abuses which formerly
					 existed. This rule does not limit just the use of enrollment periods. It
					 requires that a particular insurance product offered in an enrollment period
					 through any advertising media, including the prepared presentations of agents,
					 cannot be offered again in a specified geographical area in this State until
					 three months from the close of the enrollment period have expired. Thus, an
					 insurer must choose whether to use enrollment periods or open enrollment for a
					 product. (See Subsection
					 2536.11(a)(4) for
					 definition of "a particular insurance product.")
This Subsection gives an insurer the option of applying the
					 three month rule on a state-wide basis or on the basis of the geographical
					 areas specified therein.
This Subsection does not prohibit multiple advertising
					 during an enrollment period through any and all media published or transmitted
					 within a specified geographical area in this state as long as the enrollment
					 periods for all such advertisements have the same expiration date.
This Subsection does not prohibit the solicitation of
					 members of a group or association for the same product even though there has
					 not been a lapse of three months since the close of a preceding enrollment
					 period which was open to the general public for the same product.
This Subsection does not require separation by three months
					 of enrollment periods for the same insurance product in this state if the
					 advertising material is directed by an admitted insurer to persons by direct
					 mail on the basis that a common relationship exists with an entity, such as a
					 bank and its depositors, a department store and its charge account customers or
					 an oil company and its credit card holders, and more than one of such
					 organizations is sponsoring such insurance product at different times if
					 providing such insurance under such a method is not otherwise prohibited by
					 law; provided, however, the three month rule does apply to one specific sponsor
					 and the same persons in a specified geographical area in this state on the
					 basis of their status as customers of that one specific entity
					 only.
(3) This
				  prohibits any statement or implication to the effect 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, unless such is the fact.
GUIDELINE 2536.11(a)(3)
This Subsection is self-explanatory.
(4) The phrase "a particular insurance
				  product" in subdivision (2) of this Section means an individual policy which
				  provides substantially different benefits than those contained in any other
				  policy. Different terms of renewability; an increase or decrease in the dollar
				  amounts of benefits; an increase or decrease in any elimination period or
				  waiting period from those available during an enrollment period for another
				  policy shall not be sufficient to constitute the product being offered as a
				  different product eligible for concurrent or overlapping enrollment periods.
GUIDELINE 2536.11(a)(4)
This Subsection defines the meaning of "a particular
					 insurance product" in Section
					 2536.11(a)(2) and
					 prohibits advertising of products having minor variations, such as different
					 elimination periods or different amounts of daily hospital indemnity benefits,
					 in a succession of enrollment periods.