Ala. Admin. Code r. 482-1-013-.05
Current through Register Vol. 43, No. 1, October 31, 2024
Section 482-1-013-.05 - Advertisements Of Benefits Payable, Losses Covered Or Premiums Payable(1) Deceptive Words, Phrases or Illustrations.(a) Words, phrases or illustrations shall not be used in a manner which misleads or has the capacity and tendency to deceive as to the extent of any policy benefit payable, loss covered or premium payable. An advertisement relating to any policy benefit payable, loss covered or premium payable shall be sufficiently complete and clear as to avoid deception or the capacity and tendency to deceive.(b) Explanation: 1. The words and phrases "all," "full," "complete," "comprehensive," "unlimited," "up to," "as high as," "this policy will pay your hospital and surgical bills" or "this policy will replace your income," or similar words and phrases shall not be used so as to exaggerate any benefit beyond the terms of the policy, but may be used only in such manner as fairly to describe such benefit.2. A policy covering only one disease or a list of specified diseases shall not be advertised so as to imply coverage beyond the terms of the policy. Synonymous terms shall not be used to refer to any disease so as to imply broader coverage than is the fact.3. The benefits of a policy which pays varying amounts for the same loss occurring under different conditions or which pays benefits only when a loss occurs under certain conditions shall not be advertised without disclosing the limited conditions under which the benefits referred to are provided by the policy.4. Phrases such as "this policy pays $1,800 for hospital room and board expenses" are incomplete without indicating the maximum daily benefit and the maximum time limit for hospital room and board expenses.(2) Exceptions, Reductions and Limitations. (a) When an advertisement refers to any dollar amount, period of time for which any benefit is payable, cost of policy, or specific policy benefit or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity and tendency to mislead or deceive.(b) Explanation: 1. The term "exception" shall mean any provision in a policy whereby coverage for a specified hazard is entirely eliminated; it is a statement of a risk not assumed under the policy.2. The term "reduction" shall mean any provision which reduces the amount of the benefit; a risk of loss is assumed but payment upon the occurrence of such loss is limited to some amount or period less than would be otherwise payable had such reduction clause not been used.3. The term "limitation" shall mean any provision which restricts coverage under the policy other than an exception or a reduction.4. Waiting, Elimination, Probationary or Similar Periods. When a policy contains a time period between the effective date of the policy and the effective date of coverage under the policy or a time period between the date a loss occurs and the date benefits begin to accrue for such loss, an advertisement covered by Paragraph (2) of this rule shall disclose the existence of such periods.5. Pre-existing Conditions. (i) An advertisement covered by Paragraph (2) of this rule shall disclose the extent to which any loss is not covered if the cause of such loss is traceable to a condition existing prior to the effective date of the policy.(ii) When a policy does not cover losses traceable to pre-existing conditions, no advertisement of the policy shall state or imply that the applicant's physical condition or medical history will not affect the issuance of the policy or payment of a claim thereunder. This limits the use of the phrase "no medical examination required" and phrases of similar import. Author: John Davis, Associate Counsel
Ala. Admin. Code r. 482-1-013-.05
New Rule: August 1, 1957; effective August 1, 1957. Revised: October 26, 1972; effective November 9, 1972. Revised: January 16, 2003; effective January 26, 2003. Filed with LRS January 16, 2003. Rule is not subject to the Alabama Administrative Procedure Act.Statutory Authority:Code of Ala. 1975, §§ 27-2-17, 27-12-1, etseq.