Nebraska Administrative Code › Topic - INSURANCE, DEPARTMENT OF › Title 210 - NEBRASKA DEPARTMENT OF INSURANCE › Chapter 82 - MILITARY SALES PRACTICES › Section 210-82-007 - Practices Declared False Misleading. Deceptive or Unfair Regardless of Location

Current through June 17, 2024
007.01 The
				following acts or practices by an insurer or insurance producer are declared to
				be false, misleading, deceptive or unfair:
007.01(A) Submitting, processing or assisting
				in the submission or processing of any allotment form or similar device used by
				the USAF to direct a service member's pay to a third party for the purchase of
				life insurance. The foregoing includes, but is not limited to, using or
				assisting in using a service member's "MyPay" account or other similar internet
				or electronic medium for such purposes. This subsection does not prohibit
				assisting a service member by providing insurer or premium information
				necessary to complete any allotment form.
007.01(B) Knowingly receiving funds from a
				service member for the payment of premium from a depository institution with
				which the service member has no formal banking relationship. For purposes of
				this section, a formal banking relationship is established when the depository
				institution:
007.01(B)(1) provides the
				service member a deposit agreement periodic statements and makes the
				disclosures outlined the Truth in Savings Act,
				12 U.S.C. §
												4301
et seq.
and
				the-regulations promulgated thereunder; and
007.01(B)(2) permits the service member to
				make deposits and withdrawals unrelated to the payment or processing of
				insurance premiums.
007.01(C) Employing any device or method or
				entering into any agreement whereby funds received from a service member for
				the payment of insurance premiums are identified on the service member's Leave
				and Earnings Statement or equivalent form as "Savings" or "Checking".
007.01(D) Using DoD personnel, directly or
				indirectly, as a representative or agent in any capacity with or without
				compensation with respect to the solicitation or sale of life insurance to
				service members (or their family members') that are junior in rank or
				grade.
007.01(E) Offering or giving
				anything of value, directly or indirectly, to DoD personnel to procure their
				assistance in encouraging, assisting or facilitating the solicitation or sale
				of life insurance to another service member.
007.01(F) Knowingly offering or giving
				anything of value to a service member with a pay grade of E-4 or below for his
				or her attendance to any event where an application for life insurance is
				solicited.
007.01(G) Advising
				a-service members pay grades E-4 under below to change their income tax with
				holdings or states of legal residence for the sole purpose of increasing
				disposable income to purchase life insurance.
007.01(H) Making any representation, or using
				any device, title, descriptive name or identifier that has the tendency or
				capacity to confuse or mislead a service member into believing that the
				insurer, insurance producer or product offered is affiliated, connected or
				associated with, endorsed, sponsored, sanctioned or recommended by the U.S.
				Government, the USAF. any state or federal agency or government entity.
				Examples of improper insurance producer titles include , "Battalion Insurance
				Counselor," "Unit Insurance Advisor," "Servicemen's Group Life Insurance
				Conversion Consultant" or "Veteran's Benefits Counselor."
Nothing herein may shall be construed to prohibit a person
				  from using a professional designation awarded after the successful completion
				  of a course of instruction in the business of insurance by an-accredited
				  institutions or organizations . Some such designations include, Chartered Life
				  Underwriter (CLU), Chartered Financial Consultant (CFC), Certified Financial
				  Planner (CFP), Master of Science la-Financial Services (MSFS), or Masters of
				  Science Financial Planning (MS).
007.01(I) Soliciting any life insurance
				product through the use of or in conjunction with any third party organization
				that promotes the welfare of or assists members of the USAF in a manner that
				has the tendency or capacity to contuse or mislead a service member into
				believing that either-the insurer, insurance producer or insurance product is
				affiliated, connected or associated with, endorsed, sponsored, sanctioned or
				recommended by the U.S. Government, or the USAF.
007.01(J) Using or describing the credited
				interest rate on a life insurance policy in a manner that implies that the
				credited interest rate is a net return on premium paid.
007.01(K) Excluding individually issued
				annuities, misrepresenting the mortality costs of a life insurance product,
				including stating or implying that the product "costs nothing" or is
				"free."
007.01(L) Making any false,
				misleading or deceptive representation regarding the availability, suitability,
				amount, cost, exclusions or limitations to coverage provided to a service
				member or dependents by SGLI or VGLI.
007.01(M) Making any false, misleading or
				deceptive representation regarding conversion requirements, including the costs
				of coverage, or exclusions or limitations to coverage of SGLI or VGLI to
				private insurers.
007.01(N)
				Suggesting or recommending a service member cancel or terminate an SGLI policy
				or issuing a life insurance policy which replaces an existing SGLI policy
				unless the replacement takes effect upon or after the service member's
				separation from the USAF.
007.01(O) Deploying, using or contracting for
				any lead generating materials designed exclusively for use with service members
				that do not clearly disclose that the recipient will be contacted by an
				insurance producer, for the purpose of soliciting life insurance.
007.01(P) Failing to disclose that a
				solicitation for life insurance will be made when establishing a specific
				appointment for face-to-face meeting with a prospective purchaser.
007.01(Q) Excluding individually issued
				annuities, failing to clearly and conspicuously disclose the fact that the
				product being sold is life insurance.
007.01(R) Failing to make, at the time of
				sale or offer to an individual known to be a service member, the written
				disclosures outlined in Section 10 of the "Military Personnel Financial
				Services Protection Act,"
				Pub.
				L. No. 109-290, p.16.
007.01(S) Excluding individually issued
				annuities, when the sale is conducted face-to-face with an individual known to
				be a service member, failing to provide the applicant at the time the
				application is taken:
007.01(T)(1) an
				explanation of any free look period with instructions on how to cancel if a
				policy is issued; and
007.05(T)(2)
				either a copy of the application or a written disclosure. The copy of the
				application or the written disclosure needs to clearly set out the type of life
				insurance, the death benefit and the expected first year cost. A basic
				illustration that meets the requirements of 210 Neb. Admin. Code §72 is
				insufficient to meet this requirement.
007.01(U) Excluding individually issued
				annuities, recommending the purchase of any life insurance product which
				includes a side fund to a-service members in pay grades E-4 and below unless
				the insurer has reasonable grounds for believing that the life insurance death
				benefit, standing alone, is suitable.
007.01(V) Offering or selling a life
				insurance product which includes a side fund to a service members in pay grades
				E-4 and below who is are currently enrolled in SGLI unless, after the
				completion of a needs assessment, the insurer demonstrates that the applicant's
				SGLI death benefit, together with any either-military survivor benefits,
				savings and investments, survivor income, and other life insurance are
				insufficient to meet the applicant's insurable needs,
007.01(V)(1) "Insurable needs" are the risks
				associated with premature death taking into consideration the financial
				obligations and immediate and future cash needs of the applicant's survivors,
				dependents and estate.
007.01
				(V)(2) "Military survivor benefits" include such things as: the
				Death Gratuity, Funeral Reimbursement, Transition Assistance, Survivor and
				Dependents' Educational Assistance, Dependency and Indemnity Compensation,
				TRICARE Healthcare benefits, Survivor Housing Benefits and Allowances, Federal
				Income Tax Forgiveness, and Social Security Survivor Benefits.
007.01(W) Excluding
				individually issued annuities, offering for sale or selling any life insurance
				contract which includes a side fund:
007.01(W)(1) unless interest credited accrues
				from the date of deposit to the date of withdrawal and permits withdrawals
				without limit or penalty;
007.01(W)(2) unless the applicant has been
				provided with a schedule of effective rates of return based upon cash flows of
				the combined product. For this disclosure, the effective rate of return will
				consider all premiums and cash contributions made by the policyholder and all
				cash accumulations and cash surrender values available to the policyholder in
				addition to life insurance coverage. This schedule will be provided each of the
				first ten policy years and every fifth policy year thereafter, ending at age
				100, policy maturity or final expiration; and
007.01(W)(3) which diverts or transfers funds
				accumulated in the side fund to pay, reduce or offset any premiums due.
007.01(X) Excluding
				individually issued annuities, offering or selling any life insurance contract
				which after considering all policy benefits, including but not limited to
				endowment, return of premium or persistency, does not comply with standard life
				insurance non forfeiture.
007.01(Y) Selling any life insurance product
				to an individual known to be a service member that excludes coverage if the
				insured's death is related to war, declared or undeclared, or any act related
				to military service except for an accidental death coverage, e.g., double
				indemnity, which may be excluded.