38.2-6010 - Advertising for viatical settlements.
§ 38.2-6010. Advertising for viatical settlements.
A. This section shall apply to any advertising of viatical settlementcontracts, or related products or services intended for dissemination in thisCommonwealth, including Internet advertising viewed by persons located inthis Commonwealth. Where disclosure requirements are established pursuant tofederal regulation, this section shall be interpreted so as to minimize oreliminate conflict with federal regulation wherever possible.
B. Each licensee under this chapter shall establish and at all times maintaina system of control over the content, form and method of dissemination of alladvertisements of its contracts, products, and services. All advertisements,regardless of by whom written, created, designed, or presented, shall be theresponsibility of the licensee, as well as the individual who created orpresented the advertisement. A system of control shall include regularroutine notification, at least once a year, to agents and others authorizedby the licensee who disseminates advertisements of the requirements andprocedures for approval prior to the use of any advertisements not furnishedby the licensee.
C. Advertisements shall be truthful and not misleading in fact or byimplication. The form and content of an advertisement of a viaticalsettlement contract shall be sufficiently complete and clear so as to avoiddeception. It shall not have the capacity or tendency to mislead or deceive.Whether an advertisement has the capacity or tendency to mislead or deceiveshall be determined by the Commission from the overall impression that theadvertisement may be reasonably expected to create upon a person of averageeducation or intelligence within the segment of the public to which it isdirected.
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 hasthe capacity, tendency, or effect of misleading or deceiving viators, as tothe nature or extent of any benefit, loss covered, premium payable, or stateor federal tax consequence. The fact that the viatical settlement contractoffered is made available for inspection prior to consummation of the sale,or an offer is made to refund the payment if the viator is not satisfied orthat the viatical settlement contract includes a "free look" period thatsatisfies or exceeds legal requirements, does not remedy misleadingstatements.
2. An advertisement shall not use the name or title of a life insurancecompany or a life insurance policy unless the advertisement has been approvedby the insurer.
3. An advertisement shall not 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 no extra cost," or words of similar import shall not be used withrespect to any benefit or service unless true. An advertisement may specifythe charge for a benefit or a service or may state that a charge is includedin the payment or use 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,viatical settlement broker, or related entity as a stockholder, director,officer, employee, or otherwise, or receives any benefit directly orindirectly other than required union scale wages, that fact shall beprominently 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 thefact and unless any relationship between an organization and the viaticalsettlement licensee is disclosed. If the entity making the endorsement ortestimonial is owned, controlled, or managed by the viatical settlementlicensee, or receives any payment or other consideration from the viaticalsettlement licensee for making an endorsement or testimonial, that fact shallbe disclosed in the advertisement.
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. An advertisement shall not contain statistical information unless itaccurately reflects recent and relevant facts. The source of all statisticsused in an advertisement shall be identified.
F. An advertisement shall not disparage insurers, viatical settlementproviders, viatical settlement brokers, viatical settlement investmentagents, insurance producers, policies, services, or methods of marketing.
G. The name of the viatical settlement licensee shall be clearly identifiedin all advertisements about the licensee or its viatical settlementcontracts, products, or services, and if any specific viatical settlementcontract is advertised, the viatical settlement contract shall be identifiedeither by form number or some other appropriate description. If anapplication is part of the advertisement, the name of the viatical settlementprovider shall be shown on the application.
H. An advertisement shall not use a trade name, group designation, name ofthe parent company of a viatical settlement licensee, name of a particulardivision of the viatical settlement licensee, service mark, slogan, symbol,or other device or reference without disclosing the name of the viaticalsettlement licensee, if the advertisement would have the capacity or tendencyto mislead or deceive as to the true identity of the viatical settlementlicensee, or to create the impression that a company other than the viaticalsettlement licensee would have any responsibility for the financialobligation under a viatical settlement contract.
I. An advertisement shall not use any combination of words, symbols, orphysical materials that by their content, phraseology, shape, color, or othercharacteristics are so similar to a combination of words, symbols, orphysical materials used by a government program or agency or otherwise appearto be of such a nature that they tend to mislead prospective viators intobelieving that the solicitation is in some manner connected with a governmentprogram or agency.
J. An advertisement may state that a viatical settlement licensee is licensedin the state where the advertisement appears, provided it does not exaggeratethat fact or suggest or imply that a competing viatical settlement licenseemay not be so licensed. The advertisement may ask the audience to consult thelicensee's website or contact the Bureau of Insurance to find out if thisCommonwealth requires licensing and, if so, whether the viatical settlementprovider or viatical settlement broker is licensed.
K. An advertisement shall not create the impression that the viaticalsettlement provider, its financial condition or status, the payment of itsclaims or the merits, desirability, or advisability of its viaticalsettlement contracts are recommended or endorsed by any government entity.
L. The name of the actual licensee shall be stated in all of itsadvertisements. An advertisement shall not use a trade name, any groupdesignation, name of any affiliate, or controlling entity of the licensee,service mark, slogan, symbol, or other device in a manner that would have thecapacity or tendency to mislead or deceive as to the true identity of theactual licensee or create the false impression that an affiliate orcontrolling entity would have any responsibility for the financial obligationof the licensee.
M. An advertisement shall not directly or indirectly create the impressionthat any division or agency of the state or of the U.S. government endorses,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 must disclose the average time frame from completedapplication to the date of offer and from acceptance of the offer to receiptof the funds by the viator.
O. If the advertising emphasizes the dollar amounts available to viators, theadvertising shall disclose the average purchase price as a percent of facevalue obtained by viators contracting with the licensee during the past sixmonths.
(2003, c. 717.)