As can be made applicable and as necessary the same or similar test or standard as is stated hereafter within paragraph (1)(B) of this section is to be used as the standard in the interpretation of the provisions of this section.
  (1) Identification of policy.
    (A) The form number or numbers of the policy advertised shall be clearly identified in an "invitation to contract."
    (B) An advertisement in respect of a life policy, endowment, or an annuity may not include the term "savings," "investment," or other similar terms if used in referring to the current, projected, or guaranteed rate of interest paid or credited to such contracts to imply that the product advertised is something other than insurance or an annuity using as a standard how it would appear to or be identified by a reasonably prudent person under the circumstances.
    (C) No advertisement may use the term "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 or conditions that have the capacity or tendency to mislead purchasers of such policy to believe they will receive or that it is possible that they will receive something other than a policy or some other benefit or advantage that is not available to other persons of the same class and equal expectation of life nor to that class of persons to whom essentially the same hazards are attributable.
  (2) Disclosure requirements.
    (A) If an advertisement that is an "invitation to contract" refers to a dollar amount, a period of time for which a benefit is payable, a cost of the policy, a specific policy benefit or the loss for which such benefit is payable, it shall expressly or specifically disclose those exclusions and limitations affecting the payment of benefits under the policy. Without this disclosure it is determined that the advertisement would have the capacity and tendency to mislead or deceive.
    (B) No advertisement may refer to a benefit payable under a "family group" policy if the full amount of the benefit is not payable upon the occurrence of the contingency insured against to each member of the family unless a clear and conspicuous disclosure of such fact is made in the advertisement.
    (C) No advertisement may be used which represents or implies:
      (i) that the condition of the applicant's or insured's health prior to, or at the time of issuance of a policy, or thereafter, will not be considered by the insurer in issuing the policy or in determining its liability or benefits to be furnished or in the settlement of a claim if such is not the fact; or
      (ii) that an advertisement that uses "non-medical," "no medical examination required," or similar language where the advertised policy's issuance is not guaranteed must provide an equally prominent disclosure in close conjunction to such language that issuance of the policy may depend upon the answers to questions set forth in the application.
    (D) An "invitation to contract" for a policy that provides coverage for loss due to accident only for a specified period of time from its effective date shall state this fact clearly and conspicuously.
    (E) An "invitation to contract" advertisement in respect of insurance coverage or benefits that by the terms of the policy being advertised are limited to a certain age group or that are reduced at a certain age shall clearly and conspicuously disclose such fact.
    (F) An "invitation to contract" advertisement that relates to a life insurance policy under which the death benefit varies with the length of time the policy has been in force shall clearly and conspicuously call attention to this fact. If the death benefit during a specified period following the policy date of issue is limited to a return of premiums paid on the policy, with or without interest at a stated rate, and irrespective of whether the premiums are assumed to have always been paid annually, each advertising of the policy by an insurer or agent shall explain that the policy provides a deferred type of life insurance. The death benefit, as referred to in this subparagraph, is the amount payable if death does not result from accidental causes and if there are no exclusions applicable to the policy on account of suicide, hazardous occupation, or aviation hazard.
    (G) If the current or illustrated rate of interest is higher than the guaranteed interest rate, an advertisement may not display the greater rate of interest with such prominence as to render the guaranteed interest rate obscure.
    (H) Current interest rates being paid or promised to be paid by an insurer and guaranteed interest rates for specific periods of time, as provided in the policy or annuity advertised, shall be clearly and conspicuously disclosed and sufficiently complete and clear so as not to have the capacity or tendency to mislead or deceive the insured or prospective applicant.
    (I) No advertisement may represent a pure endowment benefit as earnings on premiums invested or represent that a pure endowment benefit in a policy is other than a guaranteed benefit for which a specific part or all of the premium is being paid by the policyholder. For the purpose of this provision, coupons or other devices for periodic payment of endowment benefit are included in the phrase "a pure endowment benefit" without limitation on the meaning of such phrase.
    (J) An "invitation to contract" advertisement shall clearly and conspicuously disclose any charges or penalties such as administrative fees, surrender charges, and termination fees contained in an annuity or life insurance policy on withdrawals made during early contract or policy years.
    (K) Failure of an insurer or agent to disclose the nonforfeiture rights and policy loan rights in an advertisement that compares life insurance policies shall be an omission of a material fact and an incomplete comparison.
    (L) Only the actual interest credited to an endowment or coupon benefit in a life or annuity policy shall be characterized as earnings or included with dividends or included with other earnings in an advertisement.
  (3) Description of premiums and cost.
    (A) Consideration paid or to be paid for individual insurance and annuities including policy fees, shall be described as premium, consideration, cost, payments, annuity consideration, or purchase payment.
    (B) Consideration paid or to be paid for group insurance, including enrollment fees, dues, administrative fees, membership fees, service fees, and other similar charges paid by the employees, shall be disclosed in an invitation to contract advertisement as part of the consideration and cost.
    (C) An advertisement may not offer a policy that utilizes a reduced initial premium rate in a manner that overemphasizes the availability and the amount of the initial reduced premium. If an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable, the advertisement may not display the amount of the reduced initial premium more prominently than the renewal premium.
    (D) A reduced initial or first year premium may not be described by an insurer as constituting free insurance for a period of time.
    (E) An advertisement of an insurance product may not imply that it is "a low cost plan" or use other similar words or phrases without a substantial present or past cost record for the policy advertised or for a similar policy that demonstrates or verifies a composite of lower production, administrative, and claim cost resulting in a low premium rate to the public.
    (F) The words "deposits," "savings," "investment," or other phrases used to describe premiums may not be so used by an insurer or agent as to hide or unfairly minimize the cost of the hazards insured against.
    (G) No part of a premium may be described as a "deposit" if it is not guaranteed to be returned in full on demand of the insured.
    (H) An insurer or agent may not make a billing of a premium for increased coverage or include the cost of increased coverage in the premium for which a billing is made without first disclosing the premium and details of the increased coverage and obtaining the consent of the insured to such increase in coverage. This does not apply to policies which contain provisions providing for automatic increases in benefits or increases in coverages which are required by law.
    (I) If the cost of home collection results in a higher premium an advertisement shall state that fact.
  (4) Dividends.
    (A) An advertisement may not utilize or describe dividends in a manner that is misleading or has the capacity or tendency to mislead.
    (B) An advertisement may not state or imply that the payment or amount of dividends is guaranteed. If dividends are illustrated, the illustration must conform to the requirements of Subchapter N of this chapter (relating to Life Insurance Illustrations).
Cont'd...