Missouri Code of State Regulations › Title 20 - DEPARTMENT OF COMMERCE AND INSURANCE › Division 400 - Life, Annuities and Health › Chapter 5 - Advertising and Material Disclosures › Section 20 CSR 400-5.500 - Life Insurance Sold to College Students

Current through Register Vol. 49, No. 14, July 15, 2024
PURPOSE: This rule explains the practice which must
				  be followed by insurance producers who sell or present plans of life insurance
				  to college students. This rule was adopted pursuant to the provisions of
				  section
				  374.045,
				  RSMo and implements section
				  375.936,
				  RSMo.
(1) The rule and
				procedures following will apply to all insurers, and insurance producers who
				sell or present plans of college life insurance to undergraduates and graduate
				students throughout Missouri:
(A) If the
				applicant is a minor and executes a promissory note for the payment of any part
				of the premiums, the note must be cosigned by the applicant's parent, legal
				guardian or adult spouse;
(B) The
				application form for the coverages must recite the terms of any promissory note
				executed in connection with the coverages, showing the amount of the note, the
				balance due, the payment provisions and any credit to reflect the down payment,
				the down payment being required by this rule;
(C) If a note is taken to finance less than
				the full first year premium, the balance must be paid by the applicant at the
				time the application is taken;
(D)
				Down payments shall be made in cash or by check and may not be paid or advanced
				by the producing insurance producer;
(E) A copy of the note must be attached to
				the policy at the time of delivery. Delivery must be in person by a company
				representative. In the event that personal delivery is for good reason
				impractical, delivery may be made by use of United States certified mail,
				return receipt requested and delivery to addressee only;
(F) Upon delivery, a policy receipt or
				acceptance form must be executed which recites that-
1. The policy has been issued as represented;
				and
2. The insured acknowledges
				and understands the provisions and obligations of the financial indebtedness
				that s/he has incurred;
(G) The receipt or acceptance form mentioned
				in subsection (1)(F) shall be registered by a number corresponding to the
				policy number in the home office; the forms shall not be distributed to field
				representatives or insurance producers but are to be furnished from and by the
				home office when sending the policy to the producing insurance
				producer;
(H) If the promissory
				note of the insured is sold or discounted to a third party by either the
				company or the insurance producer, the transferor must inform the insured of
				the sale or transfer within thirty (30) days of same. The notice may invite
				questions as to whether the terms and conditions for payment are modified, but
				if applicable, must explain that the policy is security for payment for the
				note;
(I) Whenever insurance of
				this type replaces existing life insurance, either wholly or partially,
				20 CSR
				400-5.400 must be strictly observed;
(J) Insurance producers or field
				representatives of the company who are licensed by this state to represent the
				company as licensed life insurance producers may not represent, refer to or
				hold themselves out to the public under any special title or as representatives
				of any special policy or company unless they identify themselves as licensed
				insurance producers. No person other than a licensed insurance producer shall
				participate in the transaction, solicitation or effectuation of life insurance
				with respect to college students in this state;
(K) Any insured may cancel his/her
				obligations under the policy of insurance or the promissory note connected with
				the policy of insurance within fourteen (14) days from the delivery of the
				policy; a provision advising the insured of same shall be placed in the notices
				now required by subsection (1)(F) of this rule. Upon the cancellation, the
				insured shall be entitled to a full refund of premium paid; and
(L) Notwithstanding the provisions of
				subsection (1)(K) of this rule, if the Department of Commerce and Insurance
				determines, after a prompt and fair investigation, that the company or its
				insurance producers have violated this rule or materially misrepresented the
				contract, the policy issued will be cancelled, the applicant released from all
				obligations and a total refund made of partial or down payments.