Section 909.10  Authority

 

This Part is issued by the Director of Insurance pursuant to Sections 401 and 500-145 of the Illinois Insurance Code [215 ILCS 5/401 and 500-145], which empower the Director to make reasonable rules and regulations as may be necessary for making effective the insurance laws of this State. The purpose of this Part is to set forth minimum standards and guidelines to assure a full and truthful disclosure to the public of all material and relevant information in the advertising or solicitation of life insurance policies and annuity contracts.  This Part implements the Illinois Insurance Code [215 ILCS 5] by defining acts and practices that constitute a violation of one or more of the following Sections of the Illinois Insurance Code:  Sections 149, 151, 236, 237 and 426 and Article XXXI [215 ILCS 5/149, 151, 236, 237 and 426 and Article XXXI], which generally relate to the use of false or misleading statements and certain prohibited actions in the sale of insurance and that apply variously to life insurance companies and to insurance producers and solicitors.

 

(Source:  Amended at 31 Ill. Reg. 12732, effective January 1, 2008)

 

Section 909.20  Definitions

 

For the purpose of this Part:

 

"Advertisement" does not include:

 

Communications or materials used within an insurer's own organization and not intended for dissemination to the public;

 

Communications with policyholders other than material urging policyholders to purchase, increase, modify, reinstate or retain a policy;

 

A general announcement from a group or blanket policyholder to eligible individuals on an employment or membership list that a policy or program has been written or arranged, provided the announcement clearly indicates that it is preliminary to the issuance of a booklet explaining the proposed coverage.

 

"Advertisement" means material designed to create public interest in life insurance or annuities or in an insurer, or to induce the public to purchase, increase, modify, reinstate or retain a policy including:

 

Printed and published material, audio-visual material and descriptive literature of an insurer used in direct mail, newspapers, magazines, radio and television scripts, billboards and similar displays;

 

Descriptive literature and sales aids of all kinds issued by an insurer or agent, including but not limited to circulars, leaflets, booklets, depictions, illustrations and form letters;

 

Material used for the recruitment, training and education of an insurer's sales personnel, agents, solicitors and brokers that is designed to be used or is used to induce the public to purchase, increase, modify, reinstate or retain a policy;

 

Prepared sales talks, presentations and material for use by sales personnel, agents, solicitors and brokers.

 

"Code" means the Illinois Insurance Code [215 ILCS 5].

 

"Currently Payable Scale" means a scale of non-guaranteed elements in effect for a policy form as of the preparation date of the illustration, or declared to become effective within the next 95 days after the preparation date.

 

"Department" means the Department of Insurance.

 

"Director" means the Director of the Illinois Department of Insurance.

 

"Disciplined Current Scale" means a scale of non-guaranteed elements constituting a limit on illustrations currently being illustrated by an insurer that is reasonably based on actual recent historical experience, as certified annually by an illustration actuary designated by the insurer. 

 

"Illustrated Scale" means a scale of non-guaranteed elements currently being illustrated for policies other than variable life insurance, individual and group annuity contracts, credit life insurance, or life insurance policies and certificates with guaranteed death benefits of $10,000 or less, or illustrated death benefits less than $15,000, that is not more favorable to the policy owner than the lesser of:

 

The disciplined current scale; or

 

The currently payable scale.

 

"Insurer" includes any organization or person that issues life insurance or annuities to residents of this State.

 

"Non-guaranteed Elements" means premiums, benefits, values, credits or charges under a policy of life insurance that are not guaranteed or not determined at issue.

 

"Policy" includes any policy, plan, certificate, contract, agreement, statement of coverage, rider or endorsement that provides for life insurance or annuity benefits.

 

"Preneed Funeral Contract" or "Prearrangement" means an arrangement by or for an individual before the individual's death relating to the purchase or provision of specific funeral or cemetery merchandise or services.

 

(Source:  Amended at 43 Ill. Reg. 9222, effective August 19, 2019)

 

Section 909.30  Applicability

 

a)         This Part shall apply to any life insurance or annuity advertisement intended for dissemination in this State.

 

b)         Every insurer shall establish and at all times maintain a system of control over the content, form and method of dissemination of its advertisements. All such advertisements, regardless of by whom written, created, designed or presented, shall be the responsibility of the insurer.

 

(Source:  Amended at 22 Ill. Reg. 3027, effective June 1, 1998)

 

Section 909.40  Form and Content of Advertisements

 

a)         Advertisements shall be truthful and not misleading in fact or by implication. The form and content of an advertisement shall be sufficiently complete and clear so as to avoid deception.  It shall not have the capacity or tendency to mislead or deceive.  Whether an advertisement has the capacity or tendency to mislead or deceive shall be determined by the Director of Insurance from the overall impression that the advertisement may be reasonably expected to create upon a person of average education or intelligence within the segment of the public to which it is directed.

 

b)         No advertisement shall use the terms "investment," "investment plan," "founder's plan," "charter plan," "expansion plan," "profit," "profits," "profit sharing, " "interest plan," "savings," "savings plan," or other similar terms in connection with a policy in a context or under such circumstances of conditions as to have the capacity or tendency to mislead a purchaser or prospective purchaser of such policy to believe that he will receive, or that it is possible that he will receive, something other than a policy or some benefit not available to other persons of the same class and equal expectation of life.

 

Section 909.50  Disclosure Requirements

 

a)         The information required to be disclosed by this Part shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the text of the advertisement so as to be confusing or misleading.

 

b)         No advertisement shall omit material information or use words, phrases, statements, references or illustrations if such omission or such use has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the nature or extent of the insurance, any policy benefit payable, loss covered, premium payable or state or federal tax consequences. The fact that the policy offered is made available to a prospective insured for inspection prior to consummation of the sale, or an offer is made to refund the premium if the purchaser is not satisfied, does not remedy misleading statements.

 

c)         In the event an advertisement used "Non-Medical," "No Medical Examination Required" or similar terms where issue is not guaranteed, such terms shall be accompanied by a further disclosure of equal prominence and in juxtaposition thereto to the effect that issuance of the policy may depend upon the answers to the health questions.

 

d)         An advertisement shall not use as the name or title of a life insurance policy or an annuity, any phrase which does not include the words "life insurance" or "annuity" unless accompanied by other language clearly indicating it is life insurance.

 

e)         An advertisement shall prominently include the specific title of the type of the policy being marketed and such title shall not be misleading as to the policy benefits.

 

f)         An advertisement of an insurance policy marketed by the direct response techniques shall not state or imply that because there is no agent or commission included, there will be a cost savings to prospective purchasers unless such is the fact.  No such cost savings may be stated or implied without justification satisfactory to the Director prior to use.

 

g)         An advertisement for a policy containing graded or modified benefits shall prominently display any limitation of benefits.  If the premium is level and coverage decreases or increases with age or duration, such fact shall be prominently disclosed.

 

h)         An advertisement for a policy with non-level premiums shall prominently describe the premium changes.

 

i)          Dividends and Other Non-Guaranteed Elements

 

1)         An advertisement shall not utilize or describe dividends or other non-guaranteed elements in a manner which is misleading or has the capacity or tendency to mislead.

 

2)         An advertisement shall not state or imply that the payment or amount of dividends is guaranteed.  If dividends or other non-guaranteed elements are illustrated they must be based on the insurer's illustrated scale and the illustration must contain a statement to the effect that they are not to be construed as guarantees or estimates of dividends to be paid in the future.

 

3)         An advertisement shall not state or imply that illustrated dividends under a participating policy and/or pure endowments will be or can be sufficient at any future time to assure, without the further payment of premiums, the receipt of benefits, such as a paid-up policy, unless the advertisement clearly and precisely explains:

 

A)        what benefits or coverage would be provided at such time, and

 

B)        under what conditions this would occur.

 

j)          An advertisement shall not state that a purchaser of a policy will share in or receive a stated percentage or portion of the earnings on the general account assets of the company.

 

k)         Testimonials or Endorsements by Third Parties

 

1)         Testimonials used in advertisements must be genuine; represent the current opinion of the author; be applicable to the policy advertised, if any; and be accurately reproduced.  In using a testimonial the insurer acknowledges as its own all of the statements contained therein, and such statements are subject to all the provisions of this Part.

 

2)         If the individual making a testimonial or an endorsement has a financial interest in the insurer or a related entity as a stockholder, director, officer, employee or otherwise, or receives any benefit directly or indirectly other than required union scale wages, such fact shall be disclosed in the advertisement.

 

3)         An advertisement shall not state or imply that an insurer or policy has been approved or endorsed by a group of individuals, society, association or other organization unless such is the fact and unless any proprietary relationship between an organization and the insurer is disclosed.  If the entity making the endorsement or testimonial is owned, controlled or managed by the insurer, or receives any payment or other consideration from the insurer for making such endorsement or testimonial, such fact shall be disclosed in the advertisement.

 

l)          An advertisement shall not contain statistical information relating to any insurer or policy unless it accurately reflects recent and relevant facts.  The source of any such statistics used in an advertisement shall be identified therein.

 

m)        Introductory, Initial or Special Offers and Enrollment Periods

 

1)         An advertisement of an individual policy or combination of such policies shall not state or imply that such policy or combination of such policies is an introductory, initial or special offer or that applicants will receive substantial advantages not available at a later date, or that the offer is available only to a specified group of individuals, unless such is the fact.  An advertisement shall not describe an enrollment period as "special" or "limited" or use similar words or phrases in describing it when the insurer uses successive enrollment periods as its usual method of marketing its policies.

 

2)         An advertisement shall not state or imply that only a specific number of policies will be sold, or that a time is fixed for the discontinuance of the sale of the particular policy advertised because of special advantages available in the policy.

 

3)         An advertisement shall not offer a policy which utilizes a reduced initial rate in a manner which over emphasizes the availability and the amount of the initial premium.  When an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable on the same mode, all references to the reduced initial premium shall be followed by an asterisk or other appropriate symbol which refers the reader to that specific portion of the advertisement that contains a full rate schedule for the policy being advertised.

 

4)         An enrollment period during which a particular insurance policy may be purchased on an individual basis shall not be offered within this State unless there has been a lapse of not less than six months between the close of the immediately preceding enrollment period for the same policy and the opening of the new enrollment period.  The advertisement shall specify the date by which the applicant must mail the application, which shall be not less than ten days and not more than forty days following the date on which such enrollment period is advertised for the first time.  This Part applies to all advertising media: i.e., mail, newspapers, radio, television, magazines and periodicals, by any one insurer.  The phrase "any one insurer" includes all the affiliated companies of a group of insurance companies under common management or control. This Part does not apply to the use of a termination or cut-off date beyond which an individual application for a guaranteed issue policy will not be accepted by an insurer in those instances where the application has been sent to the applicant in response to his request.  It is also inapplicable to solicitations to employees or members of a particular group or association which otherwise would be eligible under specific provisions of the Insurance Code for group or blanket insurance.  In cases where an insurance product is marketed on a direct mail basis to prospective insureds by reason of some common relationship with a sponsoring organization, this Part shall be applied separately to such sponsoring organization.

 

n)         An advertisement of a particular policy shall not state or imply that prospective insureds shall be or become members of a special class, group, or quasi-group and as such enjoy special rates, dividends or underwriting privileges, unless such is the fact.

 

o)         An advertisement shall not make unfair or incomplete comparisons of policies, benefits, dividends or rates of other insurers.  An advertisement shall not falsely or unfairly describe other insurers, their policies, services or methods of marketing.

 

p)         An advertisement for the solicitation or sale of a preneed funeral contract or prearrangement as defined in Section 909.20 of this Part, which is funded or to be funded by a life insurance policy or annuity contract, shall disclose the following:

 

1)         the fact that a life insurance policy or annuity contract is involved or being used to fund a prearrangement as defined in Section 909.20 of this Part,

 

2)         the nature of the relationship among the soliciting producer or producers, the provider of the funeral merchandise or services, the administrator and any other persons,

 

3)         the fact that the family or representative of the deceased has the right to change the choice of the prearranged provider of funeral/cemetery merchandise and services upon the demise of the insured,

 

4)         the fact that in the event the policy proceeds exceed the prearranged cost for funeral/cemetery merchandise and services, the excess proceeds will be payable to a secondary beneficiary.

 

(Source:  Amended at 22 Ill. Reg. 3027, effective June 1, 1998)

 

Section 909.60  Identity of Insurer

 

a)         The name of the insurer shall be clearly identified, and if any specific individual policy is advertised it shall be identified either by form number or other appropriate description.  An advertisement shall not use a trade name, any insurance group designation, name of the parent company of the insurer, name of the particular division of the insurer, service mark, slogan, symbol or other device or reference without disclosing the name of the insurer, if the advertisement would have the capacity or tendency to mislead or deceive as to the true identity of the insurer or create the impression that a company other than the insurer would have any responsibility for the financial obligation under a policy.

 

b)         No advertisement shall use any combination of words, symbols or physical materials which by their content, phraseology, shape, color, or other characteristics are so similar to a combination of words, symbols or physical materials used by a governmental program or agency or otherwise appear to be of such a nature that they tend to mislead prospective insureds into believing that the solicitation is in some manner connected with such governmental program or agency.

 

Section 909.70  Jurisdictional Licensing and Status of Insurer

 

a)         An advertisement which is intended to be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond such limits.

 

b)         An advertisement may state that an insurer is licensed in the state where the advertisement appears, provided it does not exaggerate such fact or suggest or imply that competing insurers may not be so licensed.

 

c)         An advertisement shall not create the impression that the insurer, its financial condition or status, the payment of its claims or the merits, desirability or advisability of its policy forms or kinds of plans of insurance are recommended or endorsed by any governmental entity.  However, where a governmental entity has recommended or endorsed a policy form or plan, such fact may be stated if the entity authorizes its recommendation or endorsement to be used in an advertisement.

 

Section 909.80  Statements about an Insurer

 

An advertisement shall not contain statements, pictures, or illustrations which are false or misleading, in fact or by implication, with respect to the assets, liabilities, insurance in force, corporate structure, financial condition, age or relative position of the insurer in the insurance business. An advertisement shall not contain a recommendation by any commercial rating system unless it clearly defines the scope and extent of the recommendation.

 

Section 909.85  Advertising and Marketing of Annuities and Variable Life Contracts

 

With respect to annuities and variable life contracts, any advertisement or other device designed to produce leads based on a response from a potential insured that is directed toward persons age 65 or older shall prominently disclose that an insurer or insurance producer may contact the applicant if that is the fact. In addition, an insurer or insurance producer who makes contact with a person as a result of acquiring that person's name from a lead generating device shall disclose that fact in the initial contact with the person.

 

a)         No insurer, insurance producer, solicitor, or other person or other entity shall solicit persons age 65 and older in this State through the use of a name that is deceptive or misleading.

 

b)         Advertisements shall not employ words, letters, initials, symbols or other devices that are so similar to those used by governmental agencies, a nonprofit or charitable institution, senior organization, or other insurer that they could have the capacity or tendency to mislead the public.

 

c)         No advertisement may imply that the reader may lose a right or privilege or benefits under federal, State, or local law if he or she fails to respond to the advertisement.

 

d)         An insurer, insurance producer, or other entity may not use an address so as to mislead or deceive as to the true identity, location, or licensing status of the insurer, insurance producer, or other entity.

 

e)         In addition to any other prohibition on untrue, deceptive, or misleading advertisements, no advertisement for an event where insurance products will be offered for sale may use the terms "seminar", "class", "informational meeting", or substantially equivalent terms to characterize the purpose of the public gathering or event unless it adds the words "and insurance sales presentation" immediately following those terms in the same type size and font as those terms.

 

(Source:  Added at 31 Ill. Reg. 12732, effective January 1, 2008)

 

Section 909.90  Advertising Records and Certificate

 

a)         Each insurer shall maintain at its home or principal office a complete file containing a specimen copy of every printed, published or prepared advertisement hereafter disseminated in this State, with a notation indicating the manner and extent of distribution and the form number of any policy advertised.  The file shall be subject to inspection by this Department. All the advertisements shall be maintained in the file for a period of either four years or until the filing of the next regular report of examination of the insurer, whichever is the longer period of time.

 

b)         Every insurer subject to the provisions of this Part shall prepare and maintain a certificate of compliance that will be placed on file with the company, together with the materials identified in subsection (a).  The certificate shall be executed by an authorized officer of the insurer wherein it is stated that, to the best of his or her knowledge, information and belief, the advertisements which were disseminated by or on behalf of the insurer in this State during the preceding statement year, or during the portion of such year when this Part was in effect, complied or were made to comply in all respects with the provisions of this Part and the Insurance Laws of this State as implemented and interpreted by this Part.

 

(Source:  Amended at 31 Ill. Reg. 12732, effective January 1, 2008)

 

Section 909.100  Noncompliance

 

Violation of the requirements of this Part shall be an unfair trade practice, and evidence of incompetence or untrustworthiness in the conduct of business under Section 500-70(a)(7) and (8) of the Code.

 

(Source:  Amended at 31 Ill. Reg. 12732, effective January 1, 2008)

 

Section 909.110  Conflict with Other Rules

 

It is not intended that this Part conflict with or supersede any rules currently in force or subsequently adopted in this State governing specific aspects of the sale or replacement of life insurance including, but not limited to, rules dealing with life insurance cost comparison indices, deceptive practices in the sale of life insurance and replacement of life insurance policies.  Consequently, no disclosure required under any such rules should be deemed to be an advertisement within the meaning of this Part.

 

(Source:  Amended at 22 Ill. Reg. 3027, effective June 1, 1998)

 

Section 909.120  Severability Provision

 

If any Section or portion of a Section of this Part, or the applicability thereof to any person or circumstance, is held invalid by a court, the remainder of the Part, or the applicability of such provision or circumstances, shall not be affected.

 

(Source:  Amended at 22 Ill. Reg. 3027, effective June 1, 1998)