50.12—Clear and conspicuous disclosure.
(a) General.
Whether a disclosure
is clear and conspicuous depends on the totality
of the facts and circumstances of the disclosure.
See § 50.17 for model forms.
(b)
(1) Description of premium.
An
insurer may describe the premium charged for
insured losses covered by the Program as a portion
or percentage of an annual premium, if consistent
with standard business practice. An insurer may
not describe the premium in a manner that is
misleading in the context of the Program, such as
by characterizing the premium as a
“surcharge.”
(2)
Premium to reflect definition of
act of terrorism. If an insurer makes an
initial offer of coverage, or offers to renew an
existing policy on or after December 26, 2007, the
disclosure provided to the policyholder must
reflect the premium charged for insured losses
covered by the Act, consistent with the definition
of an act of terrorism as amended by the Terrorism
Risk Insurance Program Reauthorization Act of
2007, Public Law 110-160, 121 Stat. 1839.
(c) Method of disclosure.
An
insurer may provide disclosures using normal
business practices, including forms and methods of
communication used to communicate similar
policyholder information to policyholders.
(d) Use of producer.
If an
insurer normally communicates with a policyholder
through an insurance producer or other
intermediary, an insurer may provide disclosures
through such producer or other intermediary. If an
insurer elects to make the disclosures through an
insurance producer or other intermediary, the
insurer remains responsible for ensuring that the
disclosures are provided by the insurance producer
or other intermediary to policyholders in
accordance with the Act.
(e) Demonstration of compliance.
(1)
An insurer may demonstrate that it has
satisfied the requirement to provide clear and
conspicuous disclosure as described in § 50.10
through use of appropriate systems and normal
business practices that demonstrate a practice of
compliance.
(2)
If an insurer made available coverage for
insured losses in a new policy or policy renewal
in Program Year 3 for coverage becoming effective
in Program Year 4, but did not provide a
disclosure at the time of offer, purchase or
renewal, then the insurer must be able to
demonstrate to Treasury's satisfaction that it has
provided a disclosure as soon as possible
following January 1, 2006.
(3)
If an insurer made available coverage for
insured losses in a new policy or policy renewal
in 2007 or in the first three months of 2008 for
coverage becoming effective in 2008, but did not
provide a disclosure at the time of offer,
purchase or renewal of the policy, then the
insurer must be able to demonstrate to Treasury's
satisfaction that it has provided a disclosure as
soon as possible following January 1,
2008.
(f) Certification of compliance.
An insurer must certify that it has complied with
the requirement to provide disclosure to the
policyholder on all policies that form the basis
for any claim that is submitted by an insurer for
federal payment under the Program.