Or. Admin. Code § 836-052-0706

Current through Register Vol. 63, No. 12, December 1, 2024

Section 836-052-0706 - Standards for Marketing

(1) Every insurer, health care service plan or other entity marketing long-term care insurance coverage in this state, directly or through its insurance producers, shall:

(a) Establish marketing procedures and insurance producer training requirements to assure that:

(A) Any marketing activities, including any comparison of policies by its insurance producers, will be fair and accurate; and

(B) Excessive insurance is not sold or issued.

(b) Display prominently by type, stamp or other appropriate means, on the first page of the outline of coverage and policy, or certificate if a group, the following:

"Notice to buyer: This policy may not cover all of the costs associated with long-term care incurred by the buyer during the period of coverage. The buyer is advised to review carefully all policy limitations."

(c) Provide copies of the disclosure forms required in OAR 836-052-0556(4) (Exhibits 1 and 2) to the applicant.

(d) Inquire and otherwise make every reasonable effort to identify whether a prospective applicant or enrollee for long-term care insurance already has health or long-term care insurance and the types and amounts of any such insurance, except that in the case of qualified long-term care insurance contracts, an inquiry into whether a prospective applicant or enrollee for long-term care insurance has health insurance is not required.

(e) Establish auditable procedures for verifying compliance with this section.

(f) At solicitation, provide written notice to the prospective policyholder and certificate holder that a senior insurance counseling program approved by the Director is available and the name, address and telephone number of the program.

(g) For long-term care insurance policies, certificates and riders, use the terms "noncancellable" or "level premium" only when the policy, certificate or rider conforms to OAR 836-052-0526(1)(c).

(h) Provide an explanation of contingent benefit upon lapse provided for in OAR 836-052-0746(4)(c) and, if applicable, the additional contingent benefit upon lapse provided to policies with fixed or limited premium paying periods in 836-052-0746(4)(d).

(2) In addition to the practices prohibited under ORS Chapter 746, the following acts and practices are prohibited:

(a) Twisting, which includes knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on or convert any insurance policy or to take out a policy of insurance with another insure.

(b) High pressure tactics, which include the employing of any method of marketing having the effect of inducing or tending to induce the purchase of insurance through force, fright or threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.

(c) Cold lead advertising, which is making use directly or indirectly of any method of marketing that fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurer or insurance producer.

(d) Misrepresentation of a material fact in selling or offering to sell a long-term care insurance policy.

(3) An association, as defined in ORS 743.652(3)(b), and the insurer endorsing or selling long-term care insurance are subject to the following requirements and obligations:

(a) The primary responsibility of an association, when endorsing or selling long term care insurance, shall be to educate its members concerning long-term care issues in general so that its members can make informed decisions. An association shall provide objective information regarding long term care insurance policies or certificates endorsed or sold by the association to ensure that its members receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold.

(b) The insurer shall file with the Director the following material:

(A) The policy, certificate, and riders;

(B) A corresponding outline of coverage; and

(C) All advertisements requested by the Director.

(c) The association shall disclose in any long-term care insurance solicitation:

(A) The specific nature and amount of the compensation arrangements (including all fees, commissions, administrative fees and other forms of financial support) that the association receives from endorsement or sale of the policy or certificate to its members; and

(B) A brief description of the process under which the policies and the insurer issuing the policies were selected.

(d) If the association and the insurer have interlocking directorates or trustee arrangements, the association shall disclose that fact to its members.

(e) The board of directors of an association selling or endorsing long-term care insurance policies or certificates shall review and approve the insurance policies as well as the compensation arrangements made with the insurer.

(f) The association shall also:

(A) At the time of the association's decision to endorse, engage the services of a person with expertise in long-term care insurance not affiliated with the insurer to conduct an examination of the policies, including its benefits, features, and rates and update the examination thereafter in the event of material change;

(B) Actively monitor the marketing efforts of the insurer and its producers; and

(C) Review and approve all marketing materials or other insurance communications used to promote sales or sent to members regarding the policies, certificates, or riders.

(g) Subsection (f) of this section does not apply to qualified long-term care insurance contracts.

(h) A group long term care insurance policy, certificate or rider may not be issued to an association unless the insurer files with the director the information required in this section.

(i) The insurer may not issue a long term care insurance policy or certificate to an association or continue to market the policy or certificate or certificate unless the insurer certifies annually that the association has complied with the requirements of this section.

(j) Failure to comply with the filing and certification requirements of this rule is an unfair trade practice in violation of ORS 746.240.

Or. Admin. Code § 836-052-0706

ID 20-1990, f. 12-13-90, cert. ef. 1-1-91; Renumbered from 836-052-0640, ID 3-2005, f. & cert. ef. 3-1-05; ID 10-2007, f. 12-3-07, cert. ef. 1-1-08

.: Exhibits referenced are available from the agency.

Stat. Auth.: ORS 731, 742 & 743

Stats. Implemented: ORS 743.655(1)(a) & 746.240