Michigan Administrative Code › Department - Insurance and Financial Services › Insurance › Accident and Sickness Insurance Advertising › Section R. 500.655 - Deceptive words, phrases, or illustrations prohibited

Current through Vol. 24-12, July 15, 2024
Rule 5.
(1) An
				advertisement shall not omit information or use words, phrases, statements,
				references, or illustrations if the omission of the information or use of the
				words, phrases, statements, references, or illustrations has the capacity,
				tendency, or effect of misleading or deceiving purchasers or prospective
				purchasers as to the nature or extent of a policy benefit payable, loss
				covered, or premium payable. The fact that the policy offered is made available
				to a prospective insured for inspection before consummation of the sale or that
				an offer is made to refund the premium if the purchaser is not satisfied does
				not remedy misleading statements.
(2) An advertisement shall not contain or use
				words or phrases such as "all," "full," "comprehensive," "complete,"
				"unlimited," "up to," "as high as," "this policy will help fill some of the
				gaps that medicare and your present insurance leave out," or "the policy will
				help to replace your income" or any similar words and phrases in a manner which
				exaggerates any benefits beyond the terms of the policy.
(3) An advertisement for a medicare
				supplement policy shall not contain or use words or phrases such as "this
				policy pays all that medicare doesn't" or any similar words and phrases in a
				manner which exaggerates any benefit beyond the terms of the policy.
(4) An advertisement shall not contain a
				description of a policy limitation, exception, or reduction that is worded in a
				positive manner to imply that it is a benefit, such as describing a waiting
				period as a "benefit builder" or stating "even preexisting conditions are
				covered after 2 years." Words and phrases used in an advertisement to describe
				these policy limitations, exceptions, and reductions shall fairly and
				accurately describe the negative features of the limitations, exceptions, and
				reductions of the policy offered.
(5) An advertisement of a benefit for which
				payment is conditional upon confinement in a hospital or similar facility shall
				not use language which has the tendency or capacity to lead a potential insured
				to believe that the policy's purpose is to enable him or her to make a net
				profit from being hospitalized or confined. The advertisement shall not use
				words or phrases such as "tax free," "extra cash," "extra income," or "extra
				pay" or similar words or phrases.
(6) An advertisement of a hospital or other
				similar facility confinement benefit shall not advertise that the amount of the
				benefit is payable on a monthly or weekly basis when, in fact, the amount of
				the benefit payable is based upon a daily pro rata basis relating to the number
				of days of confinement, unless the daily amount is emphasized and precedes the
				weekly or monthly benefit amounts. When the policy contains a limit on the
				number of days of coverage provided, the limit shall appear in the
				advertisement.
(7) An advertisement
				for a policy providing benefits for specified illnesses only, such as cancer,
				or for specified accidents only, such as automobile accidents, shall clearly,
				and in type which is not less than 2 points larger than the type in the body of
				the advertisement, state the limited nature of the policy. The statement shall
				be worded in language identical to, or substantially similar to, the following:
				"this is a limited policy," "this is a cancer only policy," or "this is an
				automobile accident only policy."
(8) An advertisement shall not contain a
				claim stating or implying that acquisition and servicing costs for the plan
				advertised are lower than equivalent costs for other generally used means of
				marketing similar insurance, unless that is the fact. An example of a
				misleading phrase is: "We deal directly with you so our costs are lower," when
				the acquisition and servicing costs for the advertised plan are actually not
				lower than equivalent costs for other similar plans.
(9) An advertisement which also is an
				invitation to join an association, trust, or discretionary group shall solicit
				insurance coverage on a separate and distinct application. Each of these
				applications shall require separate signatures, but need not be in a separate
				document or contained in a separate mailing. The insurance program shall be
				presented so as not to mislead or deceive the prospective members that they are
				purchasing insurance as well as applying for membership, if that is the
				case.
(10) Notwithstanding the
				provisions of subrule (8) of this rule, an advertisement of accident and
				sickness insurance sold by direct response shall not state or imply that
				because no insurance agent will call and no commissions will be paid to agents,
				it is a low-cost plan or use other similar words or phrases.