Indiana Administrative Code › Title 760 - DEPARTMENT OF INSURANCE › Article 1 - GENERAL PROVISIONS › Rule 18 - Accident and Sickness Insurance-Advertising › Section 18-7 - Method of disclosure

Current through July 10, 2024
Authority: IC 27-1-3-7
Affected: IC 27-4-1-4
Sec. 7.
METHOD OF DISCLOSURE OF REQUIRED INFORMATION. All
				  information required to be disclosed by these rules
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shall be set out conspicuously and in close conjunction with the
				  statements to which such information relates or under appropriate captions of
				  such prominence that it shall not be minimized, rendered obscure or presented
				  in an ambiguous fashion or intermingled with the context of the advertisements
				  so as to be confusing or misleading.
(a) Policy provided waiting periods, such as
				"there will be a waiting period of three (3) days before which sick benefits
				become payable," shall be printed as prominently as the amount of policy
				benefits payable.
(b) Policy
				provisions which reduce benefits due to age, such as "after age 65," shall be
				printed as prominently as the amount of policy benefits payable under the age
				specified.
(c) Statements such as
				"this policy pays $1,000 a month for hospitalization for accident only" must
				have the phrase "ACCIDENT ONLY" printed in the same size print as the "$1,000."
Interpretation of Section B 4
[this
				  section]
The purpose of this Section is to assure that all information
				  required to be disclosed by the Rules
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will be
				  disclosed under one of two alternative methods in such a manner that the
				  arrangement of the material itself will not have the capacity and tendency to
				  confuse or mislead.
The first alternative permits the disclosure of exceptions,
				  limitations, reductions and other restrictions either in the description of a
				  specific benefit to which they relate or in a paragraph set out in close
				  conjunction with the description of specific policy benefits. An example of
				  incorporating a reduction in the description of a specific policy benefit
				  follows:
$200.00 per month will be paid during total disability,
				  beginning with the first day of such disability for as long as 24 months.
				  Benefits are reduced 50 per cent for disability commencing after attainment of
				  age 65.
An example of incorporating exceptions, limitations,
				  reductions and other restrictions in a paragraph set out in close conjunction
				  with the description of specific policy benefits follows:
THIS PLAN WILL PAY YOU
Accident Benefits
$1,000.00 for accidental death.
$200.00 per month for total disability, beginning with the
				  first day of such disability for as long as 5 years.
$100.00 per month for partial disability, beginning with the
				  first day of such disability or immediately following total disability for as
				  long as 6 months. Sickness Benefits
$200.00 per month for total disability, beginning with the
				  8th day of such disability for as long as 2 years. Hospital and Surgical
				  Benefits
$10.00 per day during hospital confinement from first day of
				  such confinement for as long as 90 days.
$5.00 to $200.00 under comprehensive surgical schedule
				  specifying the maximum payment for each operation listed.
The maximum payment will vary depending upon the nature of
				  your operation.
Total premium $ _____ per _____ .
The benefits described do not cover injury or disease:
(1) existing before the policy
				date;
(2) caused by war;
				or
(3) occurring or commencing while
				in the Armed Forces.
The acceptance of a renewal premium is optional with the
				  Company. Benefits payable are reduced 50% for disability commencing or loss
				  occurring after attainment of age 65.
The second alternative would permit the disclosure of
				  exceptions, limitations, reductions and other restrictions in some portion of
				  the advertisement which is not in close conjunction with the provisions
				  describing specific policy benefits, provided they were properly
				  captioned.
For example, assuming that the last two paragraphs of the
				  preceding example were separated from the description of the specific policy
				  benefits by other material so as not to be in close conjunction with the
				  benefit descriptions, then such paragraphs would have to be appropriately
				  captioned as follows:
LIMITATIONS
The benefits described do not cover injury or disease:
(1) existing before the policy
				date;
(2) caused by war;
				or
(3) occurring or commencing while
				in the Armed Forces. The acceptance of a renewal premium is optional with the
				Company. Benefits payable are reduced 50% for disability commencing or loss
				occurring after attainment of age 65.
The particular caption used above need not be used. For
				  example, instead of the caption "Limitations," you might use "Exceptions,"
				  "Exclusions," "Not Covered," "Restrictions," "Extent of Coverage," or any other
				  caption or combination of captions which would serve as notice of the
				  exceptions, limitations or reductions from policy coverage.
An example of incorporating the amounts payable per day under
				  a hospital indemnity policy which sets forth the total amount of indemnity
				  payable would be: "This policy provides benefits in the amount of $600 per
				  month at the rate of $20 per day when confined in a hospital."
Because of the different types of advertising media used to
				  sell and promote accident and sickness insurance and the tremendous number and
				  variety of techniques employed in each media, it was not practical to establish
				  minimum and maximum requirements with respect to the size and style of type.
				  Therefore, the "equal prominence" test was not employed in the Rule
[
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nor should it be applied in the interpretation of the
				  Rule
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.
In summary, the purpose of this Rule
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is to make certain that the information required to be disclosed is
				  presented clearly and in such a manner as to be readily noticed.