Section 760IAC1-18-7. Method of disclosure

   METHOD OF DISCLOSURE OF REQUIRED INFORMATION. All information required to be disclosed by these rules [760 IAC 1-18] shall be set out conspicuously and in close conjunction with the statements to which such information relates or under appropriate captions of such prominence that it shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of the advertisements so as to be confusing or misleading.

(a) Policy provided waiting periods, such as "there will be a waiting period of three (3) days before which sick benefits become payable," shall be printed as prominently as the amount of policy benefits payable.

(b) Policy provisions which reduce benefits due to age, such as "after age 65," shall be printed as prominently as the amount of policy benefits payable under the age specified.

(c) Statements such as "this policy pays $1,000 a month for hospitalization for accident only" must have the phrase "ACCIDENT ONLY" printed in the same size print as the "$1,000."

  Interpretation of Section B 4 [this section]

  The purpose of this Section is to assure that all information required to be disclosed by the Rules [760 IAC 1-18] will be disclosed under one of two alternative methods in such a manner that the arrangement of the material itself will not have the capacity and tendency to confuse or mislead.

  The first alternative permits the disclosure of exceptions, limitations, reductions and other restrictions either in the description of a specific benefit to which they relate or in a paragraph set out in close conjunction with the description of specific policy benefits. An example of incorporating a reduction in the description of a specific policy benefit follows:

  $200.00 per month will be paid during total disability, beginning with the first day of such disability for as long as 24 months. Benefits are reduced 50 per cent for disability commencing after attainment of age 65.

  An example of incorporating exceptions, limitations, reductions and other restrictions in a paragraph set out in close conjunction with the description of specific policy benefits follows:

THIS PLAN WILL PAY YOU

Accident Benefits

$1,000.00 for accidental death.

$200.00 per month for total disability, beginning with the first day of such disability for as long as 5 years.

$100.00 per month for partial disability, beginning with the first day of such disability or immediately following total disability for as long as 6 months.

Sickness Benefits

$200.00 per month for total disability, beginning with the 8th day of such disability for as long as 2 years.

Hospital and Surgical Benefits

$10.00 per day during hospital confinement from first day of such confinement for as long as 90 days.

$5.00 to $200.00 under comprehensive surgical schedule specifying the maximum payment for each operation listed. The maximum payment will vary depending upon the nature of your operation.

Total premium $_____ per _____.

The benefits described do not cover injury or disease: (1) existing before the policy date; (2) caused by war; or (3) occurring or commencing while in the Armed Forces.

The acceptance of a renewal premium is optional with the Company. Benefits payable are reduced 50% for disability commencing or loss occurring after attainment of age 65.

The second alternative would permit the disclosure of exceptions, limitations, reductions and other restrictions in some portion of the advertisement which is not in close conjunction with the provisions describing specific policy benefits, provided they were properly captioned.

For example, assuming that the last two paragraphs of the preceding example were separated from the description of the specific policy benefits by other material so as not to be in close conjunction with the benefit descriptions, then such paragraphs would have to be appropriately captioned as follows:

LIMITATIONS

  The benefits described do not cover injury or disease: (1) existing before the policy date; (2) caused by war; or (3) occurring or commencing while in the Armed Forces. The acceptance of a renewal premium is optional with the Company. Benefits payable are reduced 50% for disability commencing or loss occurring after attainment of age 65.

  The particular caption used above need not be used. For example, instead of the caption "Limitations," you might use "Exceptions," "Exclusions," "Not Covered," "Restrictions," "Extent of Coverage," or any other caption or combination of captions which would serve as notice of the exceptions, limitations or reductions from policy coverage.

  An example of incorporating the amounts payable per day under a hospital indemnity policy which sets forth the total amount of indemnity payable would be: "This policy provides benefits in the amount of $600 per month at the rate of $20 per day when confined in a hospital."

  Because of the different types of advertising media used to sell and promote accident and sickness insurance and the tremendous number and variety of techniques employed in each media, it was not practical to establish minimum and maximum requirements with respect to the size and style of type. Therefore, the "equal prominence" test was not employed in the Rule [760 IAC 1-18] nor should it be applied in the interpretation of the Rule [760 IAC 1-18].

  In summary, the purpose of this Rule [760 IAC 1-18] is to make certain that the information required to be disclosed is presented clearly and in such a manner as to be readily noticed. (Department of Insurance; Reg 19,Sec B4; filed May 9, 1972, 4:15 pm: Rules and Regs. 1973, p. 416; readopted filed Sep 14, 2001, 12:22 p.m.: 25 IR 531; readopted filed Nov 27, 2007, 4:01 p.m.: 20071226-IR-760070717RFA; readopted filed Nov 26, 2013, 3:43 p.m.: 20131225-IR-760130479RFA)