40-5011. Same; requirements on advertising.
40-5011
40-5011. Same; requirements on advertising.The purpose of this section is to provide prospectiveviators with clear and unambiguous statements in the advertisement of viaticalsettlements and to assure the clear, truthful and adequate disclosure of thebenefits, risks, limitations and exclusions of any viatical settlementcontract. This purpose is intended to be accomplished by the establishment ofguidelines and standards of permissible and impermissible conduct in theadvertising of viatical settlements to assure that product descriptions arepresented in a manner that prevents unfair, deceptive or misleading advertisingand is conducive to accurate presentation and description of viaticalsettlements through the advertising media and material used by viaticalsettlement licensees.
(a) This section shall apply to any advertising of viatical settlementcontracts or related products or services intended for dissemination in thisstate, including internet advertising viewed by persons located in this state.Where disclosure requirements are established pursuant to federal regulation,this section shall be interpreted so as to minimize or eliminate conflict withfederal regulation wherever possible.
(b) Every viatical settlement licensee shall establish and at all timesmaintain a system of control over the content, form and method of disseminationof all advertisements of its contracts, products and services. Alladvertisements, regardless of by whom written, created, designed or presented,shall be the responsibility of the viatical settlement licensee, as well as theindividual who created or presented the advertisement. A system of controlshall include regular routine notification, at least once a year, to agents andothers authorized by the viatical settlement licensee who disseminateadvertisements of the requirements and procedures for approval prior to the useof any advertisements not furnished by the viatical settlement licensee.
(c) Advertisements shall be truthful and not misleading in fact or byimplication. The form and content of an advertisement of a viatical settlementcontract, product or service shall be sufficiently complete and clear so as toavoid deception. It shall not have the capacity or tendency to mislead ordeceive. Whether an advertisement has the capacity or tendency to mislead ordeceive shall be determined by the commissioner from the overall impressionthat the advertisement may be reasonably expected to create upon a person ofaverage education or intelligence within the segment of the public to which itis directed.
(d) The information required to be disclosed under this section shall not beminimized, rendered obscure, or presented in an ambiguous fashion orintermingled with the text of the advertisement so as to be confusing ormisleading.
(1) An advertisement shall not omit material information or use words,phrases, statements, references or illustrations if the omission or use has thecapacity, tendency or effect of misleading or deceiving viators as to thenature or extent of any benefit, loss covered, premium payable or state orfederal tax consequence. The fact that the viatical settlement contract offeredis made available for inspection prior to consummation of the sale, an offer ismade to refund the payment if the viator is not satisfied or that the viaticalsettlement contract includes a "free look" period that satisfies or exceedslegal requirements, shall not remedy misleading statements.
(2) No advertisement shall use the name or title of a life insurance companyor a life insurance policy unless the advertisement has been approved by theinsurer.
(3) No advertisement shall state or imply that interest charged on anaccelerated death benefit or a policy loan is unfair, inequitable or in anymanner an incorrect or improper practice.
(4) The words "free," "no cost," "without cost," "no additional cost," "at noextra cost" or words of similar import shall not be used with respect to anybenefit or service unless true. An advertisement may specify the charge for abenefit or a service or may state that a charge is included in the payment oruse other appropriate language.
(5) Testimonials, appraisals or analysis used in advertisements must begenuine; represent the current opinion of the author; be applicable to theviatical settlement contract, product or service advertised, if any; and beaccurately reproduced with sufficient completeness to avoid misleading ordeceiving prospective viators as to the nature or scope of the testimonials,appraisal, analysis or endorsement. In using testimonials, appraisals oranalysis, the viatical settlement licensee makes as its own all thestatements contained therein, and the statements are subject to all theprovisions of this section.
(A) If the individual making a testimonial, appraisal, analysis or anendorsement has a financial interest in the viatical settlement provider orrelated entity as a stockholder, director, officer, employee or otherwise, orreceives any benefit directly or indirectly other than required union scalewages, that fact shall be prominently disclosed in the advertisement.
(B) An advertisement shall not state or imply that a viatical settlementcontract, benefit or service has been approved or endorsed by a group ofindividuals, society, association or other organization unless that is the factand unless any relationship between an organization and the viatical settlementlicensee is disclosed. If the entity making the endorsement or testimonial isowned, controlled or managed by the viatical settlement licensee, or receivesany payment or other consideration from the viatical settlement licensee formaking an endorsement or testimonial, that fact shall be disclosed in theadvertisement.
(C) When an endorsement refers to benefits received under a viaticalsettlement contract, all pertinent information shall be retained for a periodof five years after its use.
(e) No advertisement shall contain statistical information unless itaccurately reflects recent and relevant facts. The source of all statisticsused in an advertisement shall be identified.
(f) No advertisement shall disparage insurers, viatical settlement providers,viatical settlement brokers, insurance producers, policies, services or methodsof marketing.
(g) The name of the viatical settlement licensee shall be clearly identifiedin all advertisements about the licensee or its viatical settlement contract,products or services, and if any specific viatical settlement contract isadvertised, the viatical settlement contract shall be identified either by formnumber or some other appropriate description. If an application is part of theadvertisement, the name of the viatical settlement provider shall be shown onthe application.
(h) No advertisement shall use a trade name, group designation, name of theparent company of a viatical settlement licensee, name of a particular divisionof the viatical settlement licensee, service mark, slogan, symbol or otherdevice or reference without disclosing the name of the viatical settlementlicensee, if the advertisement would have the capacity or tendency to misleador deceive as to the true identity of the viatical settlement licensee, or tocreate the impression that a company other than the viatical settlementlicensee would have any responsibility for the financial obligation under aviatical settlement contract.
(i) No advertisement shall use any combination of words, symbols or physicalmaterials that by their content, phraseology, shape, color or othercharacteristics are so similar to a combination of words, symbols or physicalmaterials used by a government program or agency or otherwise appear to be ofsuch a nature that they tend to mislead prospective viators into believing thatthe solicitation is in some manner connected with a government program oragency.
(j) An advertisement may state that a viatical settlement licensee islicensed in the state where the advertisement appears, provided it does notexaggerate that fact or suggest or imply that competing viatical settlementlicensee may not be so licensed. The advertisement may ask the audience toconsult the licensee's web site or contact the department of insurance to findout if the state requires licensing and, if so, whether the viatical settlementprovider or viatical settlement broker is licensed.
(k) No advertisement shall create the impression that the viatical settlementprovider, its financial condition or status, the payment of its claims or themerits, desirability or advisability of its viatical settlement contracts arerecommended or endorsed by any government entity.
(l) The name of the actual licensee shall be stated in all of itsadvertisements. No advertisement shall use a trade name, any group designation,name of any affiliate or controlling entity of the licensee, service mark,slogan, symbol or other device in a manner that would have the capacityor tendency to mislead or deceive as to the true identity of the actuallicensee or create the false impression that an affiliate or controlling entitywould have any responsibility for the financial obligation of the licensee.
(m) No advertisement shall, directly or indirectly, create the impressionthat any division or agency of the state or of the United States governmentendorses, approves or favors:
(1) Any viatical settlement licensee or its business practices or methods ofoperation;
(2) the merits, desirability or advisability of any viatical settlementcontract;
(3) any viatical settlement contract; or
(4) any life insurance policy or life insurance company.
(n) If the advertiser emphasizes the speed with which the viatication willoccur, the advertising shall disclose the average time frame from completedapplication to the date of offer and from acceptance of the offer to receipt ofthe funds by the viator.
(o) If the advertising emphasizes the dollar amounts available to viators,the advertising shall disclose the average purchase price as a percent of facevalue obtained by viators contracting with the licensee during the past sixmonths.
History: L. 2002, ch. 158, § 11; May 23.