Section 2010.APPENDIX A   Interpretive Guidelines

Section 2010.ILLUSTRATION G   Guideline to Section 2010.60(a)(1)

This Section prohibits the use of incomplete statements and words or phrases which create deception by omission or commission.  The following examples are illustrations of the prohibitions created by this Section:

a)         An advertisement which describes any benefits that vary by age must disclose the fact.

b)         An advertisement that uses a phrase such as "no age limit" must disclose that premiums may vary be age or that benefits may vary by age if such is the case.

c)         Advertisements, applications, requests for additional information and similar materials are unacceptable if they state or imply that the recipient has been individually selected to be offered insurance, or has had his eligibility for such insurance individually determined in advance, when in fact the advertisement is directed to all persons in a group or to all persons whose names appear on a mailing list.

d)         Advertisements for group or franchise group plans which provide a common benefit or a common combination of benefits shall not imply that the insurance coverage is tailored or designed specifically for that group, unless such is the fact.

e)         It is unacceptable to use terms such as "enroll" or "join" with reference to group or blanket insurance coverage when such is not the case.

f)         An advertisement, which states or implies immediate coverage is provided, is unacceptable unless suitable administrative procedures exist so that the policy is issued within fifteen working days after the application is received by the insurer.

g)         Applications, request forms for additional information, and similar related materials are unacceptable if they resemble paper currency, bonds or stock certificates; or use any name, service mark, slogan, symbol or any device in such a manner that implies that the insurer or the policy advertised is connected with a government agency, such as the Social Security Administration or the Department of Health and Human Services.

h)         An advertisement which uses the word "plan" without identifying it as a Medicare supplement insurance policy is not permissible.

i)          An advertisement which implies in any manner that the prospective insured may realize a profit from obtaining Medicare supplement insurance is not permissible.

j)          An advertisement which fails to disclose any waiting or elimination periods is unacceptable.

k)         Examples of benefits payable under a policy shall not disclose only maximum benefits unless such maximum benefits are paid for loss from common or probable illnesses or accidents, rather than exceptional or rare illnesses or accidents or periods of confinement for such exceptional or rare accidents or illnesses.

l)          When a range of benefit levels is set forth in an advertisement, it must be made clear that the insured will receive only the benefit level written or printed in the policy selected and issued.

m)        Advertisements for policies whose premiums are modest because of their limited amount of benefits shall not describe premiums as "low," "low-cost," "budget" or use qualifying words of similar import.  This Section also prohibits the use of words such as "only" and "just" in conjunction with statements of premium amounts when used to imply a bargain.

n)         An advertisement which exaggerates the effects of statutorily mandated benefits or required policy provisions or which implies that such provisions are unique to the advertised policy is unacceptable.  For example, the phrase, "Money Back Guarantee," is an exaggerated description of the thirty-day right to examine the policy and is not acceptable.

o)         An advertisement which implies that a common type of policy or a combination of common benefits is "new," "unique," "a bonus," "a breakthrough," or is otherwise unusual is unacceptable.  Also, the addition of a novel method of premium payment to an otherwise common plan of insurance does not render it "new."

p)         An advertisement may not omit the word "covered" when referring to benefits payable under its policy.  Continued reference to "covered" is not necessary where this fact has been prominently disclosed in the advertisement.

q)         An advertisement must state that benefits payable under the policy are based upon Medicare eligible expenses, if such is the case.

r)          An advertisement which fails to disclose that the definition of "hospital" does not include a nursing home, convalescent home or extended care facility, as the case may be, is unacceptable.

s)         A television, radio, mail or newspaper advertisement, or lead generating device which is designed to produce leads either by use of a coupon, a request to write or to call the company, or a subsequent advertisement prior to contact must include information disclosing that an insurance agent may contact the applicant if such is the fact.

t)          Advertisements for policies designed to supplement Medicare shall not employ devices which are designed to create undue anxiety in the minds of the elderly.  Such phrases as "here is where most people over 65 learn about the gaps in Medicare," or "Medicare is great, but ..." or which otherwise exaggerate the gaps in Medicare coverage are unacceptable. Phrases or devices which unduly excite fear of dependence upon relatives or charity are unacceptable. Phrases or devices which imply that long sicknesses or hospital stays are common among the elderly are unacceptable.

u)         An advertisement which is an invitation to contract implying that the coverage is supplemental to Medicare, if it does not explain the manner in which it is supplemental to Medicare coverage, is not acceptable.

v)         An advertisement which is an invitation to contract for Medicare supplement insurance is unacceptable if the advertisement:

1)         Fails to disclose in clear language which of the Medicare benefits the policy is not designed to supplement or if it otherwise implies that Medicare provides only those benefits which the policy is designed to supplement;

2)         Describes the in-patient hospital coverage of Medicare as "Medicare hospital," or "Medicare Part A" when the policy does not supplement the non-hospital or the psychiatric hospital benefits of Medicare Part A;

3)         Fails to describe clearly the operation of the Part or Parts of Medicare which the policy is designed to supplement; or

4)         Describes those Medicare benefits not supplemented by the policy in such a way as to minimize their importance relative to the Medicare benefits which are supplemented.

w)        Advertisements which indicate that a particular coverage or policy is exclusively for "preferred risks" or a particular segment of the population, or that particular segments of the population are acceptable risks, when such distinctions are not maintained in the issuance of policies, are not acceptable.

x)         Any advertisement which contains statements such as "anyone can apply," or "anyone can join," other than with respect to a guaranteed issue policy for which administrative procedures exist to assure that the policy is issued within a reasonable period of time after the application is received by the insurer, is unacceptable.

y)         Any advertisement which uses any phrase or term such as "here is all you do to apply," "simply," or "merely" to refer to the act of applying for a policy which is not a guaranteed issue policy is unacceptable unless it refers to the fact that the application is subject to acceptance or approval by the insurer.

z)         Advertisements which state or imply that premiums will not be changed in the future are not acceptable unless the advertised policies so provide.

aa)       An advertisement which does not require the premium to accompany the application must not overemphasize that fact and must make the effective date of the coverage clear.

bb)       An advertisement which is an invitation to contract which fails to disclose the amount of any deductible and/or the percentage of any co-insurance factor is not acceptable.