Chapter Ins 23
STANDARDS FOR INSURANCE MARKETED TO FUND PREARRANGED FUNERAL PLANS
Ins 23.25 Agent representation of affiliation. Ins 23.30 Requirements for funeral policies. Ins 23.50 Minimum standards for claims payments under a funeral policy. Ins 23.60 Requirements for advertisements of funeral policies. Ins 23.70 Marketing procedures. Ins 23.90 Solicitation and disclosure requirements. Ins 23.01Ins 23.01 Purpose. The rule establishes minimum standards for benefits, claims payments, marketing practices, compensation arrangements and reporting practices for funeral policies. Ins 23.01 HistoryHistory: Cr. Register, July, 1997, No. 499, eff. 10-1-97. Ins 23.10Ins 23.10 Definitions. In this chapter: Ins 23.10(2)(2) “Consideration” means remuneration of any kind including, but not limited to, commission payments, cash, services, benefits, bonuses, goods or the benefit of marketing efforts. Ins 23.10(3)(3) “Cumulative premiums” means all sums paid as consideration, net of dividends paid in cash in an orderly progression, for the coverage during the first 10 years of the policy, excluding amounts which are designated in the policy or certificate as providing for annuity benefits. Ins 23.10(6)(6) “Funeral policy” means a life insurance or annuity policy sold for the purpose of funding a prearranged funeral plan which is sold by an insurance intermediary who is the authorized and appointed agent of the funeral director or funeral establishment providing the prearranged funeral plan. Ins 23.10(8)(8) “Solicitation” means offering a policy for sale by telephone or personal contact or by written or printed communication at any location including the insurance intermediary’s regular place of business. Ins 23.10 HistoryHistory: Cr. Register, July, 1997, No. 499, eff. 10-1-97. Ins 23.20(1)(1) An insurance intermediary may sell a life insurance or annuity policy for the purpose of funding a prearranged funeral plan only if: Ins 23.20(1)(a)(a) The insurance intermediary is an authorized and appointed agent under s. 445.125 (3m), Stats. of the funeral director or funeral establishment which provides the prearranged funeral plan; or Ins 23.20(1)(b)(b) The insurance intermediary does not, directly or indirectly, receive referrals or other marketing information from a funeral director or operator of a funeral establishment or an agent of the funeral director or funeral establishment, sell the prearranged funeral plan, or participate in the sale of the prearranged funeral plan. Ins 23.20(2)(2) No insurer may accept an application which an insurance intermediary solicited in violation of sub. (1) or another provision of this chapter. Ins 23.20(3)(3) An insurer shall establish reasonable procedures to prevent violations of subs. (1) and (2). Ins 23.20 HistoryHistory: Cr. Register, July, 1997, No. 499, eff. 10-1-97. Ins 23.25Ins 23.25 Agent representation of affiliation. Ins 23.25(1)(1) No insurance intermediary may represent that he or she is affiliated with or representing a funeral operator or funeral establishment unless he or she is an authorized agent of the funeral operator or funeral establishment under s. 445.125 (3m), Stats. Ins 23.25(2)(2) An insurer shall establish reasonable procedures to prevent violations of sub. (1). Ins 23.25 HistoryHistory: Cr. Register, July, 1997, No. 499, eff. 10-1-97. Ins 23.30Ins 23.30 Requirements for funeral policies. Ins 23.30(1)(1) No insurer may sell or issue a policy as a funeral policy unless all of the following occur: Ins 23.30(1)(a)(a) The policy is an individual whole life or group whole life or an annuity policy. Ins 23.30(1)(b)(b) The funeral policy if issued on a multi-premium basis provides an unintentional lapse provision which requires written notification to the insured and to one person designated by the insured to receive notification if no premium is received by the insurer during a grace period of no less than 30 days. Ins 23.30(1)(c)(c) The funeral policy provides that death benefits which exceed the actual final costs of the burial expenses shall be paid to the insured’s beneficiary or if no beneficiary is named, the insured’s estate. Ins 23.30(1)(d)(d) The funeral policy provides the unrestricted right to return the policy or certificate within 30 days of the date it is received by the policyholder. If the policyholder returns the policy or certificate, the insurance contract is void and all payments made under it shall be refunded directly to the policyholder by the insurer. Ins 23.30(1)(e)(e) Notification of the right to return is conspicuously printed on the front page of the funeral policy or conspicuously attached to the funeral policy. Ins 23.30(1)(f)(f) The insurance intermediary obtains a delivery receipt from the insured when the policy is given to the insured. Ins 23.30(1)(g)(g) The funeral policy provides that cancellation of the prearranged funeral plan does not automatically cancel the policy. Ins 23.30(2)(2) No insurer may submit policy forms for funeral policies pursuant to s. 631.20, Stats. unless the forms comply with ch. Ins 2 and all of the following are included in the filing: Ins 23.30(2)(a)(a) An application form with provisions for signature by the applicant and insurance intermediary. Ins 23.30(2)(b)(b) A consideration plan and, within 30 days of any revisions to the consideration plan, the revised consideration plan including all of the following: Ins 23.30(2)(b)1.1. A description of consideration which may be paid to any person relating to the sale or renewal of a funeral policy. Ins 23.30(2)(b)2.2. A listing describing all consideration the insurer provides to the funeral director or operator of the funeral establishment for endorsing the insurer’s product or direct or indirect assistance in marketing of the product. Ins 23.30 HistoryHistory: Cr. Register, July, 1997, No. 499, eff. 10-1-97; r. (1) (b) and (2) (d), renum. (1) (c) to (h) to be (1) (b) to (g), am. (2) (b), Register, January, 2001, No. 541, eff. 2-1-01. Ins 23.50Ins 23.50 Minimum standards for claims payments under a funeral policy. Ins 23.50(1)(1) The insurer shall not pay policy death benefits to a funeral director or funeral establishment unless the prearranged funeral plan is in effect at the time of the insured’s death. Ins 23.50(2)(2) In the event of the insured’s death, the insurer shall not pay to the funeral director or establishment more than the actual final costs billed by the funeral director or funeral establishment. The remainder or excess due under the policy is to be paid to the beneficiary designated by the insured to receive any policy benefits which exceed the actual final costs or, if no beneficiary has been designated by the insured, the insured’s estate. Ins 23.50 HistoryHistory: Cr. Register, July, 1997, No. 499, eff. 10-1-97. Ins 23.60Ins 23.60 Requirements for advertisements of funeral policies. Ins 23.60(1)(1) Advertisements for funeral policies shall comply with all relevant statutes and rules, including but not limited to ch. Ins 2. Ins 23.60(2)(2) An insurer or insurance intermediary placing or using or publishing an advertisement which may be utilized directly or indirectly in the solicitation or sale of a funeral policy shall disclose the following in a clear and conspicuous manner: Ins 23.60(2)(a)(a) That a purpose of the advertisement is the solicitation of insurance. Ins 23.60(2)(b)(b) That an insurance intermediary may contact any person who responds to the advertisement. Ins 23.60(3)(3) No insurer or insurance intermediary may use a response from an advertisement of a prearranged funeral plan regardless of who placed or published the advertisement unless the advertisement includes the disclosures required under sub. (2). Ins 23.60(4)(4) The insurer whose policy is advertised has the responsibility for the content, form and method of dissemination of all advertisements, regardless of who designed, created, wrote, printed or utilized them. Ins 23.60(5)(5) An insurer shall require its insurance intermediaries, and all other persons or agencies acting on its behalf in preparing advertisements, to submit advertisements to it for approval prior to use of the advertisement. Ins 23.60(6)(6) An insurer shall maintain a copy of every advertisement and all correspondence for each advertisement submitted for approval or used in Wisconsin for 3 years after the advertisement was last used. Ins 23.60 HistoryHistory: Cr. Register, July, 1997, No. 499, eff. 10-1-97. Ins 23.70(1)(1) The insurer shall establish and implement written marketing procedures for funeral policies to ensure compliance with solicitation, disclosure, and suitability requirements. Ins 23.70(2)(2) The insurer shall train and monitor its agent force to ensure compliance with the written marketing procedures and provide each a copy of the written procedures. Ins 23.70(3)(3) The insurer shall maintain a copy of the marketing procedures. Ins 23.70(4)(4) The insurer shall maintain a copy of the list of funeral goods and services contracted for in the prearranged funeral plan at the time of the application. Ins 23.70(5)(5) No insurer may accept an application unless the application is complete and on a form approved under s. 631.20, Stats., and in compliance with this section. Ins 23.70(6)(6) The insurer shall provide the following disclosures and statements and ask the following questions on the application form in print no less than 12 point type:
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