§ 27-34.3-19 - Prohibited advertisement of insurance guaranty association act in insurance sales – Notice to policy owners.
SECTION 27-34.3-19
§ 27-34.3-19 Prohibited advertisement ofinsurance guaranty association act in insurance sales – Notice to policyowners. – (a) No person, including an insurer, agent, producer, or affiliate of aninsurer shall make, publish, disseminate, circulate or place before the public,or cause directly or indirectly, to be made, published, disseminated,circulated or placed before the public, in any newspaper, magazine or otherpublication, or in the form of a notice, circular, pamphlet, letter or poster,or in the form of e-mail or an electronic website, or over any radio station ortelevision station, or in any other way, any advertisement, announcement orstatement, written or oral, which uses the existence of the insurance guarantyassociation of this state for the purpose of sales, solicitation or inducementto purchase any form of insurance covered by the Rhode Island life and healthinsurance guaranty association act; provided, that this section shall not applyto the association or any other entity which does not sell or solicitinsurance. The use of the protection afforded by this chapter, other than asprovided by this section, by any person in the sale, marketing or advertisingof insurance constitutes unfair methods of competition and unfair or deceptiveacts or practices under chapter 29 of this title and is subject to thesanctions imposed in that chapter.
(b) The association shall prepare a summary documentdescribing the general purposes and current limitations of this chapter incompliance with subsection (c) of this section. This document shall besubmitted to the commissioner for approval. At the expiration of the sixty (60)days after the date on which the commissioner approves the document, an insurermay not deliver a policy or contract to a policy or contract owner unless thesummary document is delivered to the policy or contract owner at the time ofdelivery of the policy or contract. The document shall also be available uponrequest by a policy owner. The distribution, delivery or contents orinterpretation of this document does not guarantee that either the policy orthe contract or the owner of the policy or contract is covered in the event ofthe impairment or insolvency of a member insurer. The summary document shall berevised by the association as amendments to this chapter may require. Failureto receive this document does not give the policy owner, contract owner,certificate holder or insured any greater rights than those stated in this act.
(c) The summary document prepared under subsection (b) ofthis section shall contain a clear and conspicuous disclaimer on its face. Thecommissioner shall establish the form and content of the disclaimer. Thedisclaimer shall:
(1) State the name and address of the association and theinsurance department;
(2) Prominently warn the policy or contract owner that theassociation may not cover the policy or, if coverage is available, it will besubject to substantial limitations and exclusions and conditioned on continuedresidence in this state;
(3) State the types of policies for which guaranty funds willprovide coverage;
(4) State that the insurer and its agents are prohibited bylaw from using the existence of the association for the purpose of sales,solicitation or inducement to purchase any form of insurance;
(5) State that the policy or contract owner should not relyon coverage under the association when selecting an insurer;
(6) Explain rights available and procedures for filing acomplaint to allege a violation of any provisions of this chapter; and
(7) Provide other information as directed by the commissionerincluding, but not limited to, sources for information about the financialcondition of insurers provided that the information is not proprietary and issubject to disclosure under chapter 2 of title 38.
(d) A member insurer shall retain evidence of compliance withsubsection (b) for so long as the policy or contract for which the notice isgiven remains in effect.