Section 21.113 - Rules Pertaining Specifically to Accident and Health Insurance Advertising and Health Maintenance Organization Advertising(a) Coverage details. An invitation to inquire that specifies either the dollar amount of benefit payable or the period of time during which the benefit is payable must contain a provision in effect as follows: "For specific costs and further details of the coverage, including exclusions, any reductions or limitations and the terms under which the policy may be continued in force, see your agent or write to the company."(b) Illustration of rates. Subject to Insurance Code Chapter 1214, concerning Advertising for Certain Health Benefits, and Insurance Code Chapter 541, Subchapter B, concerning Unfair Methods of Competition and Unfair or Deceptive Acts or Practices Defined, an invitation to inquire concerning a health benefit plan may include rate information without including information about all benefit exclusions and limitations so long as any rate mentioned in any advertisement disseminated under this subsection indicates the age, gender, and geographic location on which that rate is based and so long as the advertisement includes prominent disclaimers clearly indicating that: (1) the rates are illustrative only;(2) a person should not send money to the issuer of the health benefit plan in response to the advertisement;(3) a person cannot obtain coverage under the health benefit plan until the person completes an application for coverage; and(4) benefit exclusions and limitations may apply to the health benefit plan.(c) Identification of policy. (1) The form number or numbers of the policy advertised must be clearly identified in an invitation to contract.(2) If an advertisement refers to various benefits that are contained in two or more policies or riders, but excepting group master policies, the advertisement must disclose that such benefits are provided only through a combination of such policies or riders.(3) An advertisement may not use the word "plan" without first identifying the subject as an "insurance plan" or an "HMO plan," as appropriate.(d) Description of benefits. (1) An invitation to contract referring to a dollar amount, a period of time for which a benefit is payable, the cost of the policy, or a specific policy benefit or the loss for which such benefit is payable must also disclose those exclusions, reductions, and limitations affecting the basic provisions of the policy, without which the advertisement would have the capacity and tendency to mislead or deceive.(2) If a policy pays varying amounts of benefits for the same loss occurring under different conditions or pays benefits only when a loss occurs under certain conditions, any reference to these benefits in an invitation to contract must be accompanied by a clear and conspicuous disclosure of the different or limited conditions.(3) No advertisement may refer to a benefit payable under a "family group" policy if the full amount of the benefit is not payable upon the occurrence of the contingency insured against to each member of the family, unless clear and conspicuous disclosure of such fact is made in the advertisement.(4) No advertisement may be used that represents or implies: (A) that the condition of the applicant's or insured's health before, or at the time of issuance of a policy, or thereafter, will not be considered by the insurer in issuing the policy or in determining its liability or benefits to be furnished for or in the settlement of a claim if such is not a fact;(B) if an insurer requires a medical examination for a specified policy, the advertisement, if it is an invitation to contract, must disclose that a medical examination is required.(5) An invitation to contract for a policy that provides coverage for loss due to accident only for a specified period of time from its effective date must state this fact clearly and conspicuously.(6) If any covered benefits are, by the terms of the policy, limited to a certain age group or are reduced at a certain age, an invitation to contract must clearly and conspicuously disclose such fact.(7) An advertisement may not contain representations of an aggregate amount payable without clear and conspicuous disclosure in close proximity to any maximum daily benefit and maximum time limit.(8) No advertisement of a policy providing benefits for which payment is conditioned upon confinement in a hospital, extended care facility, or at home may advertise that the amount of the benefit is payable on a monthly or weekly basis if, in fact, the amount of the benefit payable is based upon a daily pro rata basis relating to the number of days of confinement unless such statements of monthly or weekly benefit amounts are followed immediately by equally prominent statements of the benefit payable on a daily basis. For example, either of the following statements is acceptable: "$1,000 a Month ($33.33 a Day)" or "$33.33 a Day ($1,000 a Month)." If the policy contains a limit on the number of days of coverage provided, such limit must appear in the advertisement.(9) An advertisement offering assistance or information concerning Medicare may not state or imply that an obligation is imposed by the receipt of such information.(10) An advertisement of benefits payable in conjunction with Medicare must disclose the Medicare benefits (Part A or B) they are designed to supplement.(11) A Medicare-related advertisement must state in a prominent place the following or similar words: "Not connected with or endorsed by the United States government or the federal Medicare program."(12) References to Medicare may not be used in such a manner in an advertisement so as to be misleading or deceptive.(13) Advertisements referenced as being "Important Notices" or similar language and directed primarily to Medicare recipients or senior citizens are presumed to be misleading or having the capacity or tendency to mislead unless shown otherwise.(14) The words, numerals, and phrases "all," "100%," "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, numerals, and phrases may not be used to exaggerate any benefit beyond the terms of the policy, but may be used only in a manner as fairly and accurately describes the benefit.(15) An advertisement may not contain descriptions of a policy limitation, exclusion, or reduction, worded or stated in a manner to imply that it is a benefit, for example, describing a waiting period as a "benefit builder," or stating "even preexisting conditions are covered after two years." Words and phrases used in an advertisement to describe policy limitations, exclusions, and reductions must accurately describe the negative features of such limitations, exclusions, and reductions of the policy offered.(16) No advertisement of a benefit, if payment of the benefit is conditioned upon confinement in a hospital or similar extended care facility, or at home, may use words or phrases such as "tax free," "extra cash," "extra income," "extra pay," or similar words or phrases. In those cases such words and phrases have the capacity, tendency, or effect of misleading the public and cause the belief that the policy advertised enables a profit to be made from being hospitalized. This section prohibits the misleading use of the phrase "tax free," but it does not prohibit the use of complete and accurate terminology explaining the Internal Revenue Service rules applicable to the taxation of accident and sickness benefits. Prominence either by caption, lead-in, boldface, or large type must not be given in any manner to any statements relating to the tax status of such benefits.(17) Except as permitted under § 21.109(a) of this title (relating to Unlawful Inducement), an advertisement may not list goods and services other than those set out in the policy as possible benefits.(18) A policy covering only one disease or a list of specific diseases or accidents may not be advertised so as to imply coverage beyond the terms of the policy. Synonymous terms may not be used to refer to any disease to imply broader coverage than that provided.(19) An advertisement that is an invitation to contract for a limited benefit policy, a supplemental coverage policy, or a nonconventional coverage policy, as defined in Chapter 3, Subchapter S of this title (relating to Minimum Standards and Benefits and Readability for Individual Accident and Health Insurance Policies), must clearly and conspicuously, in prominent type, state in language identical to or substantially similar to whichever of the following is applicable: "This is a limited benefit policy," "This is a cancer-only policy," "This is a supplemental policy," or "This is an automobile-accident-only policy." The insurer or agent must use the foregoing statement to clearly advise the public of the nature of the policy.(e) Exceptions, reductions, and limitations. (1) If a policy contains a waiting, elimination, probationary, or similar 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 invitation to contract must disclose the existence of such periods.(2) An advertisement may not use the words "only," "just," "merely," "minimum," or similar words or phrases to unfairly describe the applicability of any exclusions, limitations, or reductions, such as "This policy is subject to the following minimum exclusions and reductions."(f) Preexisting condition. (1) An advertisement that states or implies that preexisting conditions may apply must define the applicable preexisting condition provisions.(2) An advertisement that is an invitation to contract must, in accurate terms, disclose the extent to which a loss is not covered if the cause of the loss is traceable to a condition existing before the effective date of the policy.(g) Disclosure of policy provisions relating to renewability, cancellability, and termination. (1) An advertisement that is an invitation to contract must disclose the provisions in respect of renewability, cancellability, and termination, and each modification of benefits, covered losses or premiums either because of age or for other reasons, in a manner that does not minimize or render obscure the qualifying conditions.(2) An advertisement for a policy stating or implying that the policy is "guaranteed renewable" must: (A) have a clear and conspicuous statement that coverage may terminate at certain ages, if such is a fact; and(B) include, in a prominent place, a statement indicating that rates for the policy may change if the advertisement suggests or implies that rates for the product will not change. Such statement must generally identify the manner in which rates may change, such as by age, by health status, by class, or through application of other general criteria.(3) No advertisement may represent or imply that an insurance policy may be continued in effect indefinitely or for any period of time, if the policy provides that it may not be renewed or may be cancelled by the insurer, or terminated under any circumstances over which the insured has no control, during the period of time represented.(4) The term "noncancellable" or derivation thereof may not be used by an insurer or agent to describe a policy if the insurer has a right to periodically, by individual or class, revise rates or premiums.(5) An invitation to contract must contain a notice stating that the person to whom the policy is issued is permitted to return the policy within 10 days (or more as stated in the policy) of its delivery to that person and to have the premium paid refunded.(h) Description of premiums, cost, and interest.(1) Consideration paid or to be paid for individual insurance, including policy fees, must be in all instances described as premium, consideration, cost, or payments.(2) Consideration paid or to be paid for group insurance, including enrollment fees, dues, administrative fees, membership fees, service fees, and other similar charges paid by the employees, must be disclosed in an invitation to contract advertisement as a part of the cost and consideration.(3) An advertisement may not offer a policy that uses a reduced initial premium rate in a manner that overemphasizes the availability and the amount of the initial reduced premium. If an insurer charges an initial premium that differs in amount from the amount of the renewal premium payable, the advertisement may not display the amount of the reduced initial premium more prominently than the renewal premium.(4) A reduced initial or first-year premium may not be described by an insurer or agent as constituting free insurance for a period of time.(5) An advertisement of an insurance product may not imply that it is "a low-cost plan" or use other similar words or phrases without a substantial present or past cost record for the policy advertised or similar policy, demonstrating a composite of lower production, administrative, and claim cost resulting in a low premium rate to the public.(6) The words "deposits," "savings," "investment," and other phrases used to describe premiums may not be used by an insurer or agent to hide or untruthfully minimize the cost of the hazards insured against.(7) An insurer or agent may not make a billing of a premium for increased coverage or include the cost of increased coverage in the premium for which a billing is made without first disclosing the premium and details of the increased coverage and obtaining the consent of the insured to such increase in coverage. This does not apply to policies that contain provisions providing for automatic increases in benefits or increases in coverages required by law.(8) If the cost of home collection results in a higher premium an advertisement must state that fact.(i) Dividends. (1) An advertisement may not use or describe dividends in a manner that is misleading or has the capacity or tendency to mislead.(2) An advertisement may not state or imply that the payment or amount of dividends is guaranteed. If dividends are illustrated, the dividends must be based on the insurer's current dividend scale and the illustration must contain a statement to the effect that the dividends are not to be construed as guarantees or estimates of dividends to be paid in the future.(3) An insurer or agent may not, as an inducement to purchase insurance, circulate, publish, or otherwise exhibit to any person who is an insured, or prospective insured, any form of director resolution, stockholders resolution, or form of company action stating or implying the action an insurer will take on a declaration of dividend or other matter in the future if the insurer, its directors, or its stockholders are not bound to take the action stated or implied, or if the insurer does not presently have the earnings or other funds or assets to make the payments, or to complete the transaction in accordance with the appropriate statutes.(j) Compliance with statutes or rules as grounds for changing policy. In consideration of the comprehensive content of this division and, among other reasons, the division being applicable to substantially all insurers, an insurer or agent may not, particularly if used as a "twisting" device, inform any policyholder or prospective policyholder that an insurer or agent was required to change a policy or contract form or related material to comply with the provisions of this division or other rules or statutes.(k) Deception or deceptive method as to introductory, initial, or special offers. (1) An advertisement of a particular policy may not state or imply that prospective policyholders become group or quasi-group members that enjoy special rates or underwriting privileges ordinarily associated with group insurance as recognized in the industry unless such is the fact.(2) If an insured or prospective insured is provided a policy or coverage of insurance and the first premium has not been paid, or an application has not been returned to the insurer or its agents or representatives, the insurer, its agents, or representatives may not make any billing or attempt to collect a premium on such policy until an application or acknowledgment of acceptance is received. If coverage is issued before acceptance, it must be accompanied by a written statement describing it as follows:(A) giving the facts concerning the delivery of the policy and whether or not the policy was requested by the insured;(B) stating that the insured is under no obligation to pay the insurer if the insured does not want to continue or initiate the coverage; and(C) clearly stating when coverage will be effective.(3) An advertisement may not state or imply that a policy or combination of policies is an introductory, initial, special, or limited offer and that applicants will receive advantages by accepting the offer or that the advantages will not be available at a later date unless it is a fact. An advertisement may not contain phrases describing an enrollment period as "special," "limited," or similar words or phrases if the insurer uses these enrollment periods as the usual method of advertising insurance.(A) An enrollment period during which "a particular insurance product" may be purchased may not be offered within this state unless there has been a lapse of not less than three months between the close of the immediately preceding enrollment period for the same product and the opening of the new enrollment period. The advertisement must indicate the date by which the applicant must mail the application. The date may not be less than 10 days and not more than 40 days from the date that the enrollment period is advertised for the first time. (It is emphasized that this section is applicable to all advertisements as defined in § 21.102(1) of this title (relating to Scope)). This subparagraph is inapplicable to solicitation of employees or members of a particular group, except that this subparagraph does apply to the solicitation of members of an association group that otherwise would be eligible under specific provisions of the Insurance Code for group, blanket, or franchise insurance. This section applies to all affiliated companies under common management or control. The phrase "a particular insurance product" is used here to describe an insurance policy that provides substantially different benefits than those contained in any other policy. Different terms of renewability, an increase or decrease in the dollar amounts of benefits, or an increase or decrease in any elimination period or waiting period from those available during an enrollment period for another policy are not sufficient to constitute the product being offered as a different product eligible for concurrent or overlapping enrollment periods.(B) There may be no statement or implication to the effect 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.(C) An invitation to contract Medicare supplement advertisement must describe complete information regarding all available "open enrollment" opportunities or prominently disclose a means of obtaining complete information regarding such opportunities.(l) Acknowledgment of nonduplication; notice to consumer.(1) Acknowledgment of nonduplication; notice to consumer. (A) Acknowledgment of nonduplication--The document that contains and is limited to the language set forth in item (6) of Figure: 28 TAC § 21.113(l)(5).(B) Duplication--Policies of the same coverage type according to minimum standard classifications outlined in Chapter 3, Subchapter S and Subchapter Y of this title (relating to Standards for Long-Term Care Insurance, Non-Partnership and Partnership Long-Term Care Insurance Coverage Under Individual and Group Policies and Annuity Contracts, and Life Insurance Policies That Provide Long-Term Care Benefits Within the Policy). For example, two cancer insurance policies or two long-term care policies would be duplicative. Duplication is also present when two policy coverages overlap to the extent that a reasonable person would not consider the ownership of two such policies to be cost efficient in light of the consumer's needs and income level. Group health coverage obtained through an employer-sponsored plan, conversion from a group employer-sponsored health plan, short-term travel accident coverage, short-term nonrenewable coverage, Medicare risk contracts, and retired-employee group plans will not be considered duplication of other coverage.(C) Notice to consumer--The document that contains and is limited to the language set forth in item (7) of Figure: 28 TAC § 21.113(l)(5).(2) All insurers, other than direct response insurers, or their agents or other intermediaries, must obtain an acknowledgment of nonduplication with all applications for health insurance sold to an individual who is 65 years of age or older, other than group health coverage obtained through an employer-sponsored plan, conversion from a group employer-sponsored health plan, short-term travel accident coverage, short-term nonrenewable coverage, Medicare risk contracts, and retired-employee group plans. This acknowledgment must be obtained at the same time as the application and must be submitted to the insurer with the application. One copy of the acknowledgment must be left with the insured and one copy kept on file with the company. The form of the acknowledgment or notice must be printed on a separate piece of paper and must contain the specific language and must be in the format set forth in item (6) of Figure: 28 TAC § 21.113(l)(5).(3) To obtain this acknowledgment, all insurers or their agents or other intermediaries must offer to examine all health insurance policies and health care coverage owned by a prospective insured and advise the insured as to whether the purchase of the proposed policy will result in any duplication of benefits.(4) Direct response insurers that market to the consumer without agents or other intermediaries are exempt from the requirement to deliver the acknowledgment contained in item (6) of Figure: 28 TAC § 21.113(l)(5), but must deliver the notice to consumers set forth in item (7) of Figure: 28 TAC § 21.113(l)(5).(5) Failure to comply with paragraphs (1) - (4) of this subsection is an unfair business practice as defined by Insurance Code Chapter 541, concerning Unfair Methods of Competition and Unfair or Deceptive Acts or Practices. 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28 Tex. Admin. Code § 21.113
The provisions of this §21.113 adopted to be effective February 1, 1981, 5 TexReg 3336; amended to be effective February 15, 1991, 16 TexReg 557; amended to be effective October 6, 1997, 22 TexReg 9677; amended to be effective December 9, 2007, 32 TexReg 8830; amended to be effective September 8, 2010, 35 TexReg 8117; Amended by Texas Register, Volume 48, Number 25, June 23, 2023, TexReg 3411, eff. 6/27/2023