DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES

INSURANCE BUREAU

ADVERTISEMENT OF LIFE INSURANCE AND ANNUITIES

(By authority conferred on the commissioner of insurance by section 210 of Act No. 218 of the

Public Acts of 1956, as amended, being S500.210 of the Michigan Compiled Laws)

R 500.1371 Definitions.

Rule 1. As used in these rules:

(a) "Advertisement" means material designed to create public interest in life insurance or

annuities or in an insurer, or to induce the public to purchase, increase, modify, reinstate, or retain

a policy, including all of the following:

(i) Printed and published material, audiovisual material, and descriptive literature of an insurer

used in any of the following:

(A) Director mail.

(B) Newspapers.

(D) Radio and television scripts.

(E) Billboards and similar displays.

(ii) Descriptive literature and sales aids of all kinds issued by an insurer or agent, including, but

not limited to, any of the following:

(A) Circulars.

(B) Leaflets.

(D) Depictions.

(E) Illustrations.

(F) Form letters.

(iii) Prepared sales talks, presentations, and material for use by sales personnel and agents.

"Advertisement" does not include communications or materials used within an insurer's own

organization and not available for dissemination to the public; communications with policyholders

other than material designed to persuade policyholders to purchase, increase, modify, reinstate, or

retain a policy; or a general announcement from a group or blanket policyholder to eligible

individuals on an employment or membership list that a policy or program has been written or

arranged.

(b) "Policy" means any of the following which provides for life insurance or annuity benefits:

(i) A policy.

(ii) A plan.

(iii) A certificate.

(iv) A contract.

(v) An agreement.

(vi) A statement of coverage.

(v) A rider.

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(viii) An endorsement.

History: 1984 AACS.

R 500.1375 Form and contents of advertisements.

Rule 5. (1) Advertisements shall be truthful and not misleading in fact or by implication. The

form and content of an advertisement of a policy shall be sufficiently complete and clear so as to

avoid deception. Whether an advertisement is misleading or deceptive shall be determined from

the overall impression that the advertisement may be reasonably expected to create.

(2) An advertisement shall not use the terms "investment," "investment 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 circumstances or conditions which mislead

a prospective insured to believe that the prospective insured or beneficiary will or may receive

something other than a policy or some benefit not available to other persons of the same class

and equal expectation of life.

History: 1984 AACS.

R 500.1377 Disclosure requirements.

Rule 7. (1) The information required to be disclosed by these rules shall not be minimized,

rendered obscure, or presented in an ambiguous fashion or intermingled with the text of the

advertisement so as to be confusing or misleading.

(2) An advertisement shall not omit material information or use words, phrases, statements,

references, or illustrations if such omission or such use is misleading or deceptive to purchasers or

prospective purchasers as to the nature or extent of any policy benefit payable, loss covered,

premium payable, or state or federal tax consequences. The fact that the policy offered is made

available to a prospective insured for inspection prior to consummation of the sale, or an offer is

made to refund the premium if the purchaser is not satisfied, does not remedy misleading

statements.

(3) If an advertisement uses terms or phrases such as "Non-Medical" or "No Physical

Examination Required" or uses similar terms or phrases and if issue is not guaranteed, such terms

or phrases shall be accompanied by a further disclosure of equal prominence and nearby to the

effect that issuance of the policy will depend upon answers to health questions contained in the

application, if such is the fact.

(4) An advertisement shall not use as the name or title of a life insurance policy any phrase which

does not include the words "life insurance," unless accompanied by other language clearly

indicating it is life insurance.

(5) An advertisement shall prominently describe the type of policy advertised.

(6) An advertisement of an insurance policy marketed by direct response technique shall not state

or imply that because there is no agent or commission involved there will be cost savings to

prospective purchasers, unless such is the fact.

(7) An advertisement for a policy containing graded or modified benefits shall prominently

display any limitation of benefits. If the premium is level and coverage decreases or increases with

age or duration, such coverage changes shall be prominently disclosed.

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(8) An advertisement for a policy with non-level premiums shall prominently describe the

premium changes.

(9) All of the following provisions apply with respect to dividends:

(a) An advertisement shall not utilize or describe dividends in a manner which is misleading.

(b) An advertisement shall not state or imply that the payment or amount of dividends is

guaranteed. If dividends are illustrated, they shall be based on the insurer's current dividend scale,

and the illustration shall contain a statement to the effect that they are not be construed as

guarantees or estimates of dividends to be paid in the future.

or pure endowments, or both, will be or can be sufficient at any future time to assure, without the

further payment of premiums, the receipt of benefits, such as a paid-up policy, unless the

advertisement clearly and precisely explains what benefits or coverage would be provided at such

time and under what conditions this would occur.

(d) If level benefit insurance is contingent upon dividends providing term insurance or paid-up

insurance, or both, any advertisement or illustration shall disclose that insufficient or not dividends

will either cause a reduction or elimination of supplemental coverage or that additional premium

will be required to keep the original death benefit amount in force.

(10) An advertisement shall not state or imply that a purchaser of a policy will share in or receive

a stated percentage or portion of the earnings on the general account assets of the company.

(11) An advertisement shall not contain statistical information relating to any insurer or policy

unless it accurately reflects recent and relevant facts and is sufficiently complete and clear so as

not to be misleading. The source of any such statistics used in an advertisement shall be identified

therein.

(12) All of the following provisions apply with respect to introductory, initial, or special offers

and enrollment periods:

(a) An advertisement of an individual policy or combination of such policies shall not state or

imply that such policy or combination of such policies is an introductory, initial, or special offer,

or that applicants will receive substantial advantages not available at a later date, or that the offer

is available only to a specified group of individuals, unless such is the fact. An advertisement shall

not describe an enrollment period as "special" or "limited" or use similar words or phrases in

describing it when the insurer uses successive enrollment periods as its usual method of marketing

its policies.

(b) An advertisement shall not state or imply that only a specific number of policies will be sold,

or that a time is fixed for the discontinuance of the sale of the particular policy advertised, because

of special advantages available in the policy, unless such is the fact.

individual basis shall not be advertised within this state unless there has been a lapse of not less

than 3 months between the close of the immediately preceding enrollment period for the same

policy and the opening of the new enrollment period, but not more than twice in any calendar year.

The advertisement shall specify the date by which the applicant shall mail the application, which

shall be not less 10 days and not more than 40 days from the date on which such enrollment period

is advertised for the first time. This rule applies to all advertising by any 1 insurer, which includes

all the affiliated companies of a group of insurance companies under common management or

control. This rule does not apply to the use of a termination or cutoff date beyond which an

individual application for a guaranteed issue policy will not be accepted by an insurer in those

instances where the application has been set to the applicant in response to the applicant's request.

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It is also inapplicable to solicitation by the group policyholder of employees or members of a

particular group or association which otherwise would be eligible under specific provisions of Act

No. 218 of the Public Acts of 1956, as amended, being S500.100 et seq. of the Michigan Compiled

Laws, for group insurance. In cases where an insurance product is marketed on a direct mail basis

to prospective insureds by reason of some common relationship with a sponsoring organization,

this rule shall be applied separately to each sponsoring organization.

(13) An advertisement of a particular policy shall not state or imply that prospective insureds

shall be or become members of a special class or group and as such enjoy special rates, dividends,

or underwriting privileges, unless such is the fact.

(14) An advertisement shall not make unfair or incomplete comparisons of policies, benefits,

dividends, or rates of other insurers. An advertisement shall not falsely or unfairly describe other

insurers or their policies, services, or methods of marketing.

(15) For individual deferred annuity products or deposit funds, excluding variable annuities and

investment annuities, all of the following provisions shall apply:

(a) Any illustrations or statements containing or based upon interest rates higher than the

guaranteed accumulation interest rates shall set forth with equal prominence comparable

illustrations or statements containing or based upon the guaranteed accumulation interest rates.

Such higher interest rates shall not be greater than those currently being credited by the company

unless such higher rates have been publicly declared by the company with an effective date for

new issues not more than 3 months subsequent to the date of declaration. Any illustrations shall

be based on gross premiums.

(b) If an advertisement illustrates or states premiums, net interest rates, or accumulative values,

the actual relationship between the net and gross premium shall be disclosed in close proximity

thereto and with equal prominence, describing the first year and renewal charges, including, but

not limited to, expenses and annual contract, collection, and mortality charges.

death prior to the commencement of payment of any annuity benefit, any illustration or statements

concerning such contracts shall prominently state that these benefits are not provided. Return of

premium or cash value shall not be referred to as a death benefit.

History: 1984 AACS; 1997 AACS.

R 500.1379 Identification of insurer and policy.

Rule 9. (1) The name of the insurer shall be clearly identified. If any specific individual policy is

advertised, it shall be identified either by form number or other appropriate description. An

advertisement shall not use a trade name, an insurance group designation, name of the parent

company of the insurer, name of a particular division of the insurer, service mark, slogan, symbol,

or other device or reference without disclosing the name of the insurer, in equal or greater

prominence and in close proximity thereto, if the advertisement would be misleading or deceptive

as to the true identity of the insurer or create the impression that a company other than the insurer

has any responsibility for the financial obligation under a policy.

(2) An advertisement or related material shall not use any combination of words, symbols, or

physical materials which by their content, phraseology, shape, color, or other characteristics are

so similar to a combination of words, symbols, or physical materials used by a governmental

program or agency or otherwise appear to be of such a nature that they tend to mislead prospective

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insureds into believing that the solicitation is in some manner connected with such governmental

program or agency.

History: 1984 AACS.

R 500.1381

Advertising beyond limits of licensing jurisdiction; recommendation,

endorsement, or rating of insurer by governmental entity.

Rule 11. (1) An advertisement which is intended to be seen or heard beyond the limits of the

jurisdiction in which the insurer is licensed shall not imply licensing beyond such limits.

(2) An advertisement may state that an insurer is licensed in the state where the advertisement

appears, if it does not exaggerate such fact or suggest or imply that competing insurers may not be

so licensed.

(3) An advertisement shall not state or create the impression that the insurer, its financial

condition or status, the payment of its claims, or the merits, desirability, or advisability of its policy

forms or kinds of plans of insurance are recommended or endorsed by any governmental entity,

unless such is the fact. The nature and extent of any recommendation, endorsement, or rating shall

be fully explained.

History: 1984 AACS.

R 500.1383 False and misleading statements; recommendation or rating by commercial

rating organization.

Rule 13. An advertisement shall not contain statements, pictures, or illustrations which are false

or misleading, in fact or by implication, with respect to the assets, liabilities, insurance in force,

corporate structure, financial condition, age, or relative position of the insurer in the insurance

business. An advertisement shall not contain a recommendation or rating by any commercial rating

organization unless it clearly defines the scope and extent of the recommendation or rating.

History: 1984 AACS.

R 500.1385 Advertisements disseminated in state; maintenance of specimen copy; filing with

the commissioner; certificate of compliance.

Rule 15. (1) An insurer shall maintain at its home or principal office a complete file containing a

specimen copy of printed, published, or prepared advertisements of its policies hereafter

disseminated in this state, with a notation indicating the manner and extent of distribution and the

form number of any policy advertised. Such file shall be subject to inspection by the commissioner.

All such advertisements shall be maintained in the file for a period of either 4 years or until the

filing of the next regular report on the examination of the insurer, whichever period is longer.

(2) An insurer subject to the provisions of these rules shall file with the commissioner, with its

annual statement, a certificate of compliance executed by an authorized officer of the insurer

wherein it is stated, if such is the fact, that to the best of the officer's knowledge, information, and

belief, the advertisements which were disseminated by, or on behalf of, the insurer in this state

during the preceding statement year, or during the portion of such year when these rules were in

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