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Virginia Administrative Code
Title 14. Insurance
Agency 5. State Corporation Commission, Bureau of Insurance
Chapter 90. Rules Governing Advertisement of Accident and Sickness Insurance

14VAC5-90-60. Requirements Applicable to Advertisements of Covered Benefits; Disclosures Relating to Exceptions, Reductions, Limitations; and Pre-Existing Conditions.

A. Advertisements of covered benefits shall comply with the following standards.

1. An advertisement shall not omit information or use words, phrases, statements, references or illustrations if the omission of the information or use of the words, phrases, statements, references or illustrations has the capacity, 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. 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.

2. An advertisement shall not contain or use words or phrases such as "all," "full," "complete," "comprehensive," "unlimited," "up to," "as high as," "this policy will help fill some of the gaps that Medicare and your present insurance leave out," "this policy will help to replace your income" (when used to express loss of time benefits); or similar words and phrases in a manner that exaggerates a benefit beyond the terms of the policy, but may be used only in such manner as to fairly describe the benefit.

3. An advertisement of a benefit for which payment is conditioned upon confinement in a hospital or similar facility shall not use words or phrases such as "tax free," "extra cash," "extra income," "extra pay," or substantially similar words or phrases because these words and phrases have the capacity, tendency or effect of misleading the public into believing that the policy advertised will, in some way, enable them to make a profit from being hospitalized.

4. An advertisement of a hospital or other similar facility confinement benefit shall not advertise that the amount of the benefit is payable on a monthly or weekly basis when in fact, the amount of the benefit payable is based upon a daily pro rata basis relating to the number of days of confinement. When the policy contains a limit on the number of days of coverage provided, the limit shall appear in the advertisement.

5. An advertisement of a policy covering only one disease or a list of specified diseases shall not imply coverage beyond the terms of the policy. Synonymous terms shall not be used to refer to any disease to imply broader coverage than is the fact.

6. An advertisement of a direct response insurance product shall not state or imply that because "no insurance agent will call and no commissions will be paid to agents" that it is "a low cost plan," or use other similar words or phrases because the cost of advertising and servicing the policies is a substantial cost in the marketing by direct response.

B. Requirements relating to the disclosure of exceptions, reductions, and limitations are as follows.

1. An invitation to contract shall disclose those exceptions, reductions, and limitations affecting the basic provisions of the policy.

2. An advertisement shall not contain descriptions of a policy exception, reduction, or limitation worded in a positive manner to imply that it is a benefit, such as describing a waiting period as a "benefit builder" or stating "even pre-existing conditions are covered after two years." Words and phrases used in advertisements to describe policy limitations, exceptions, and reductions shall fairly and accurately describe the negative features of the limitations, exceptions, and reductions.

3. When an advertisement refers to a dollar amount, a period of time for which any benefit is payable, the cost of the policy, a specific policy benefit, or the loss for which a benefit is payable, it shall also disclose those exceptions, reductions, and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity or tendency to mislead or deceive.

4. When a policy contains a waiting, elimination, probationary or similar time period between the effective date of the policy and the effective date of coverage under the policy or at a time period between the date a loss occurs and the date benefits begin to accrue for the loss, an advertisement that is subject to the requirements of subdivision 3 of this subsection shall disclose the existence of these periods.

5. An advertisement shall not use the words "only," "just," "merely," "minimum," "necessary," or similar words or phrases to describe the applicability of any exceptions, reductions, limitations, or exclusions such as: "This policy is subject to the following minimum exceptions and reductions."

6. An advertisement for a policy providing benefits for specified illnesses only, such as cancer, or for specified accidents only, such as automobile accidents, shall clearly and conspicuously state in boldface type and all capital letters the limited nature of the policy. The statement shall be worded in language identical to, or substantially similar to, the following:


C. Requirements relating to the disclosure of pre-existing conditions in advertisements are as follows.

1. An advertisement shall, in negative terms, disclose the extent to which any loss is not covered if the cause of the loss is traceable to a condition existing prior to the effective date of the policy. The term "pre-existing condition," without an appropriate definition or description, shall not be used.

2. When a policy does not cover losses resulting from pre-existing conditions, an advertisement of the policy shall not state or imply that the applicant's physical condition or medical history will not affect the issuance of the policy or payment of a claim under the policy. This section prohibits the use of the phrase "no medical examination required" and phrases of similar import, but does not prohibit explaining "automatic issue." If an insurer requires a medical examination for a specified policy, the advertisement shall disclose that a medical examination is required.

3. When an invitation to contract contains an application form to be completed by the applicant and returned by mail, or when an applicant has requested and received an application form as the result of the advertisement of a direct-response insurance product, the application form shall contain a question or statement in bold-face type, immediately preceding the signature for the application, that clearly reflects the contents of all policy provisions regarding:

a. The disallowance of claims based on preexisting conditions;

b. Any waiting period, elimination period, probation period, or similar lapse of time between the date of the policy and the effective date of coverage;

c. Any period of delay between the date a loss occurs and the date upon which benefits or compensation for such loss begin to accrue; and

d. Reduction in benefits as the result of existence of other similar insurance providing coverage for the same loss.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.

Historical Notes

Derived from Regulation 8, Case No. 19498, § 6, eff. June 1, 1975; amended Order of July 25, 1975, eff. September 15, 1975; amended, Volume 20, Issue 25, eff. August 4, 2004.

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