Chapter Ins 3

Ins 3.27(5)(m)3. 3. Premiums or subscription charges are paid to the insurer by the employer, association or some designated person acting on behalf of the employer, association or covered persons, and

Ins 3.27(5)(m)4. 4. The insurance plan is sponsored by the employer or association.

Ins 3.27(6) (6) Advertisements and representations in general.

Ins 3.27(6)(a) (a) Advertisements and representations shall be truthful and not misleading in fact or in implication and shall accurately describe the policy to which they apply. Words or phrases the meaning of which is clear only by implication or by familiarity with insurance terminology shall not be used.

Ins 3.27(6)(b) (b) Oral representations shall conform to the requirements of this rule.

Ins 3.27(7) (7) Suitability of policies. No agent or insurer shall recommend to a prospective buyer the purchase of any individual policy without reasonable grounds to believe that the recommendation is not unsuitable to the applicant. The agent or insurer shall make such inquiry as may be necessary under the circumstances to determine that the purchase of such insurance is not unsuitable for the prospective buyer. This requirement shall not apply to an individual policy issued on a group basis.

Ins 3.27(8) (8) Outline of coverage.

Ins 3.27(8)(a) (a) Every advertisement of a specific individual policy or policies which constitutes an invitation to apply shall include an outline of coverage as defined in sub. (5) (L).

Ins 3.27(8)(b) (b) Every agent at the time of taking an application for an individual policy shall furnish the applicant an outline of coverage as defined in sub. (5) (L).

Ins 3.27(8)(c) (c) The requirement for an outline of coverage shall not apply to an advertisement or the taking of an application for an individual policy issued on a group basis or an individual conversion policy issued under a group or franchise insurance plan.

Ins 3.27(9) (9) Deceptive words, phrases or illustrations.

Ins 3.27(9)(a) (a) An advertisement shall not exaggerate a benefit or minimize cost by overstatement, understatement or incompleteness. Information shall not be omitted or words, phrases, statements, references or illustrations shall not be used if such omission or use has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of any policy benefit payable, loss covered or premium payable. An advertisement referring to any policy benefit payable, loss covered or premium payable shall be sufficiently complete and clear as to avoid deception or the capacity and tendency to mislead or deceive.

Ins 3.27(9)(b) (b) The words and phrases “all,” “full,” “complete,” “comprehensive,” “unlimited,” “up to,” “as high as,” “this policy will pay your hospital and surgical bills,” “this policy will fill the gaps under Medicare and your present insurance” or “this policy will replace your income,” or similar words and phrases shall not be used so as to exaggerate any benefit beyond the terms of the policy, but may be used only in such manner as fairly to describe such benefit.

Ins 3.27(9)(c) (c) A policy covering only one disease or a list of specified diseases shall not be advertised so as to imply coverage beyond the terms of the policy. A particular disease shall not be referred to by more than one term so as to imply broader coverage than is the fact.

Ins 3.27(9)(d) (d) The benefits of a policy which pays varying amounts for the same loss occurring under different conditions, or which pays benefits only when a loss occurs under certain conditions, shall not be advertised without disclosing the limited conditions under which the benefits referred to are provided by the policy.

Ins 3.27(9)(e) (e) The maximum benefit available under a policy shall not be emphasized in a manner which exaggerates its relationship to any internal limits or other conditions of the policy.

Ins 3.27(9)(f) (f) The aggregate amounts or the monthly or weekly benefits payable under coverages such as hospital or similar facility confinement indemnity or private duty nursing shall not be emphasized unless the actual amounts payable per day are disclosed with substantially equal prominence and in close conjunction with such statement. Any limit in the policy on the number of days of coverage provided shall be disclosed.

Ins 3.27(9)(g) (g) Phrases such as “this policy pays $1800 for hospital room and board expenses” are incomplete without indicating the maximum daily benefit and the maximum time limit for hospital room and board expenses.

Ins 3.27(9)(h) (h) An advertisement shall not state or imply that each member under a family policy is covered as to the maximum benefits advertised when such is not the fact.

Ins 3.27(9)(i) (i) The importance of diseases rarely or never found in the class of persons to whom the policy is offered shall not be exaggerated in an advertisement.

Ins 3.27(9)(j) (j) Examples of what benefits may be paid under a policy shall be shown only for losses from common illnesses or injuries rather than exceptional or rare illnesses or injuries.

Ins 3.27(9)(k) (k) When a range of hospital room expense benefits is set forth in an advertisement, it shall be made clear that the insured will receive only the benefit indicated in the policy purchased. It shall not be implied that the insured may select his or her room expense benefit at the time of hospitalization.

Ins 3.27(9)(L) (L) An advertisement shall not imply that the amount of benefits payable under a loss of time policy may be increased at time of disability according to the needs of the insured.

Ins 3.27(9)(m) (m) The term “confining sickness” is an abbreviated expression and shall be explained if used in an advertisement.

Ins 3.27(9)(n) (n) An advertisement shall not state that the insurer “pays hospital, surgical, medical bills,” “pays dollars to offset the cost of medical care,” “safeguards your standard of living,” “pays full coverage,” “pays complete coverage,” “pays for financial needs,” “provides for replacement of your lost paycheck,” “guarantees your paycheck,” “guarantees your income,” “continues your income,” “provides a guaranteed paycheck,” “provides a guaranteed income” or “fills the gaps in Medicare” or use similar words or phrases unless the statement is literally true. Where appropriate, such or similar words or phrases may properly be used if preceded by the words “help,” “aid,” “assist,” or similar words.

Ins 3.27(9)(o) (o) An advertisement shall not state that the premiums will not be changed in the future unless such is the fact.

Ins 3.27(9)(p) (p) An invitation to apply advertisement shall clearly indicate the provisions of any deductible under a policy.

Ins 3.27(9)(q) (q) An advertisement shall not refer to a policy as a doctors policy or use words of similar import unless:

Ins 3.27(9)(q)1. 1. The advertisement includes a statement that the plan of benefits is not endorsed by or associated with any national, state or local medical society, or

Ins 3.27(9)(q)2. 2. The policy has been so endorsed by such a society and the advertisement meets the requirements of sub. (13).

Ins 3.27(9)(r) (r) If a policy contains any of the following or similar provisions, an advertisement referring to such policy shall not state that benefits are payable in addition to other insurance unless the statement contains an appropriate reference to the coverage excepted:

Ins 3.27(9)(r)1. 1. An other insurance exception, reduction, limitation or deductible;

Ins 3.27(9)(r)2. 2. A coordination of benefits or non-duplication provision;

Ins 3.27(9)(r)3. 3. An other insurance in this company provision;

Ins 3.27(9)(r)4. 4. An insurance in other insurers provision;

Ins 3.27(9)(r)5. 5. A relation of earnings to insurance provision;

Ins 3.27(9)(r)6. 6. A workers’ compensation or employers’ liability or occupational disease law exception, reduction, or limitation;

Ins 3.27(9)(r)7. 7. A reduction based on social security benefits or other disability benefits; or

Ins 3.27(9)(r)8. 8. A Medicare exception, reduction, or limitation.

Ins 3.27(9)(s) (s) An advertisement shall not state a policy’s benefits are tax free unless an explanation of the rules applicable to the taxation of such types of accident and sickness benefits is clearly shown with equal prominence and in close conjunction with such statement. An advertisement of a benefit for which payment is conditioned upon confinement in a hospital or similar facility shall not state that such benefit is tax free.

Ins 3.27(9)(t) (t) An advertisement shall not use the expressions “extra cash,” “cash income,” “income,” “cash,” or similar words or phrases in such a way as to imply that the insured will receive benefits in excess of the expenses incurred while being sick, injured or hospitalized.

Ins 3.27(9)(u) (u) The description in advertisements of government insurance programs, including Medicare, and of changes in such program shall be accurate and not give an incorrect impression as to the need for supplementary coverage. If gaps in such programs are referred to, they shall be described fairly so that the reader or listener can determine how the policy being advertised covers such gaps.

Ins 3.27(9)(v) (v) An invitation to apply advertisement which refers to a policy as being a Medicare supplement shall:

Ins 3.27(9)(v)1. 1. Contain a prominent statement indicating which Medicare benefits the policy is intended to supplement (for example, hospital benefits) and which Medicare benefits the policy will not supplement (for example, medical-surgical benefits) and shall clearly disclose any gaps in Medicare coverage for which the policy does not provide benefits; and

Ins 3.27(9)(v)2. 2. Clearly indicate the extent of the benefits if the policy bases benefits on expenses incurred beyond what Medicare covers and thus provides somewhat limited benefits for short term hospital confinements.

Ins 3.27(9)(w) (w) An advertisement may refer to immediate coverage or guaranteed issuance of a policy only if suitable administrative procedures exist so that the policy is issued within a reasonable time after the application is received.

Ins 3.27(9)(x) (x) If an advertisement indicates an initial premium which differs from the renewal premium on the same mode, the renewal premium shall be disclosed with equal prominence and in close conjunction with any statement of the initial premium. Any increase in premium or reduction in coverage because of age shall be clearly disclosed.

Ins 3.27(9)(y) (y) An advertisement shall not state that the policy contains no waiting period unless pre-existing conditions are covered immediately or unless the status of pre-existing conditions is disclosed with equal prominence and in close conjunction with such statement.

Ins 3.27(9)(z) (z) An advertisement shall not state that no age limit applies to a policy unless applications from applicants of any age are considered in good faith and such statement clearly indicates the date or age to which the policy may be renewed or that the company may refuse renewal.

Ins 3.27(9)(za) (za) An advertisement shall not state that no medical, doctor’s or physical examination is required or that no health, medical or doctor’s statements or questions are required or that such examination, statements or questions are waived or otherwise state or imply that the applicant’s physical condition or medical history will not affect the policy unless:

Ins 3.27(9)(za)1. 1. The statement indicates with equal prominence that it applies only to the issuance of the policy or to both the issuance of the policy and the payment of claims, and

Ins 3.27(9)(za)2. 2. Pre-existing conditions are covered immediately under the policy or the period of time following the effective date of the policy during which pre-existing conditions are not covered is disclosed with equal prominence and in close conjunction with such statement.

Ins 3.27(9)(zb) (zb) An advertisement of a limited policy as defined in s. Ins 3.13 (2) (h) shall prominently indicate that the policy provided limited coverage with an appropriate statement such as “THIS IS A CANCER ONLY POLICY” or “THIS IS AN AUTOMOBILE ACCIDENT ONLY POLICY,” and shall clearly disclose what injuries or sicknesses and what losses are covered.

Ins 3.27(9)(zc) (zc) An advertisement of a policy which provides benefits for injuries only or for sickness only shall prominently indicate that the policy covers injuries only or sickness only.

Ins 3.27(9)(zd) (zd) An advertisement shall not refer to a policy or coverage as being “special” unless it can be shown that there is a reasonable basis for the use of such a term.

Ins 3.27(9)(ze) (ze) An advertisement shall not set out exceptions, reductions or limitations from a policy worded in a positive manner to imply that they are beneficial features such as describing a waiting period as a benefit builder. Words and phrases used to disclose exceptions, reductions or limitations shall fairly and accurately describe their negative features. The words “only” or “minimum” or similar words or phrases shall not be used to refer to exceptions, reductions or limitations.

Ins 3.27(9)(zf) (zf) An advertisement shall not state or imply, or use similar words or phrases to the effect, that because no insurance agent will call and no commissions will be paid to agents the policy is a low cost plan.

Ins 3.27(9)(zg) (zg) Devices such as a safe drivers’ award and other such awards shall not be used in connection with an advertisement.

Ins 3.27(9)(zh) (zh) An advertisement which describes or offers to provide information concerning the federal Medicare program or any related government program or changes in such programs shall:

Ins 3.27(9)(zh)1. 1. Include no reference to such program on the envelope, the reply envelope or to the address side of the reply postal card, if any,

Ins 3.27(9)(zh)2. 2. Include on any page containing a reference to such program an equally prominent statement to the effect that in providing supplemental coverage the insurer and agent involved in the solicitation is not in any manner connected with such program,

Ins 3.27(9)(zh)3. 3. Contain a statement that it is an advertisement for insurance or is intended to obtain insurance prospects,

Ins 3.27(9)(zh)4. 4. Prominently identify the insurer or insurers which issues the coverage, and

Ins 3.27(9)(zh)5. 5. Prominently state that any material or information offered will be delivered in person by a representative of the insurer, if such is the case.

Ins 3.27(10) (10) Exceptions, reductions and limitations.

Ins 3.27(10)(a) (a) When an advertisement refers to any dollar amount of benefits payable, period of time for which any benefit is payable, cost of policy, specific policy benefit or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions and limitations (including waiting, elimination, probationary or similar periods and pre-existing condition exceptions) affecting the basic provisions of the policy without which the advertisement would have the capacity and tendency to mislead or deceive subject to the following.

Ins 3.27(10)(b) (b) An invitation to apply shall be subject to the disclosure requirements of this subsection.

Ins 3.27(10)(c) (c) An invitation to inquire shall not be subject to the disclosure requirements of this subsection unless:

Ins 3.27(10)(c)1. 1. Such an advertisement mentions benefits, benefit periods or premiums for the purpose of doing more than identifying the policy or

Ins 3.27(10)(c)2. 2. Such an advertisement makes any reference to the policy’s exceptions, reductions and limitations.

Ins 3.27(10)(d) (d) A booklet, summary or explanation of coverage issued to insured persons shall be subject to the disclosure requirements of this subsection.

Ins 3.27(10)(e) (e) An institutional advertisement shall not be subject to the disclosure requirements of this subsection.

Ins 3.27(10)(f) (f) If the policy advertised does not provide immediate coverage for pre-existing conditions, an application or enrollment form contained in or included with an advertisement to be completed by the applicant and returned to the insurer shall contain a question or statement immediately preceding the applicant’s signature line which summarizes the pre-existing condition provisions of the policy. The following are a suggested question and statement; however, an insurer shall use wording which is appropriate to the actual pre-existing condition provisions of the policy advertised: “Do you understand that the policy applied for will not pay benefits during the first - - - - - year(s) after the issue date for a disease or physical condition which you now have or have had in the past? Yes - - - - - -” or “I understand that the policy applied for will not pay benefits during the first - - - - - year(s) after the issue date for a disease or physical condition which I now have or have had in the past.”

Ins 3.27(10)(g) (g) An advertisement which is subject to the disclosure requirements of this subsection shall in negative terms disclose the extent to which any loss is not covered if the cause of the loss is a condition which exists prior to the effective date of the policy. The expression “pre-existing conditions” shall not be used unless appropriately defined.

Ins 3.27(10)(h) (h) If a medical examination is required for a policy, an invitation to apply advertisement of such policy shall disclose such requirement.

Ins 3.27(10)(i) (i) The exceptions, reductions and limitations referred to in this subsection shall include:

Ins 3.27(10)(i)1. 1. Those which are set out in the policy under captions referring to exceptions, reductions, limitations or exclusions or are otherwise designated as such, and

Ins 3.27(10)(i)2. 2. Those which are not so captioned or designated contained in other portions of the policy such as a benefit provision, definition or uniform provision.

Ins 3.27(10)(j) (j) The following are examples of exceptions, reductions and limitations which generally do affect the basic policy provisions to such an extent that their absence would cause the advertisement to have the capacity and tendency to mislead or deceive.

Ins 3.27(10)(j)1. 1. War or act of war.

Ins 3.27(10)(j)2. 2. While in armed services.

Ins 3.27(10)(j)3. 3. Territorial restriction or coverage within United States and Canada.

Ins 3.27(10)(j)4. 4. Complete aviation exclusion.

Ins 3.27(10)(j)5. 5. Self-inflicted injury.

Ins 3.27(10)(j)6. 6. Injury inflicted by another person.

Ins 3.27(10)(j)7. 7. Time limitation on death, dismemberment or commencement of disability or medical treatment following an accident.

Ins 3.27(10)(j)8. 8. Pre-existing sickness or disease or other bodily infirmity.

Ins 3.27(10)(j)9. 9. Exclusion or reduction for loss due to specific diseases, classes of diseases or types of injuries.

Ins 3.27(10)(j)10. 10. Confinement restrictions in disability policies such as house confinement, bed confinement and confinement to the premises.