Chapter Ins 3

Ins 3.27(14)(a) (a) An advertisement which may be seen or heard beyond the limits of the jurisdiction in which the insurer is licensed shall not imply licensing beyond those limits.

Ins 3.27(14)(b) (b) An advertisement shall not state or imply, or otherwise create the impression directly or indirectly, that the insurer, its financial condition or status, the payment of its claims, its policy forms or the merits or desirability of its policy forms or kinds or plans of insurance are approved, endorsed or accredited by any agency of this state or the federal government.

Ins 3.27(14)(c) (c) In any advertisement any reference to licensing shall contain an appropriate disclaimer that such reference is not to be construed as an endorsement or implied endorsement of the insurer or its products by any agency of this state or the commissioner of insurance.

Ins 3.27(14)(d) (d) An advertisement shall not contain a reproduction of a portion of a state insurance department report of examination.

Ins 3.27(15) (15) Introductory, initial or special offers and limited enrollment periods.

Ins 3.27(15)(a) (a) An advertisement shall not state or imply that a policy or combination of policies is an introductory, initial or special offer and that the applicant will receive advantages not available at a later date by accepting the offer, that only a limited number of policies will be sold, that a time is fixed for the discontinuance of the sale of the policy advertised because of special advantages available in the policy, or that an individual will receive special advantages by enrolling within an open enrollment period or by a deadline date, unless such is the fact.

Ins 3.27(15)(b) (b) An advertisement shall not state or imply that enrollment under a policy is limited to a specific period unless the period of time permitted to enroll, which shall be not less than 10 days and not more than 40 days from the date of the advertisement, is disclosed.

Ins 3.27(15)(c) (c) If the insurer making an introductory, initial or special offer has previously offered the same or similar policy on the same basis or intends to repeat the current offer for the same or similar policy, the advertisement shall so indicate.

Ins 3.27(15)(d) (d) An insurer shall not establish for residents of this state a limited enrollment period within which an individual policy may be purchased less than 6 months after the close of an earlier limited enrollment period for the same or similar policy. Such restriction shall apply to all advertisements in newspapers, magazines and other periodicals circulated in this state, all mail advertisements sent to residents of this state and all radio and TV advertisements broadcast in this state. Such restriction shall not apply to the solicitation of enrollments under individual policies issued on a group basis.

Ins 3.27(15)(e) (e) Where an insurer is an affiliate of a group of insurers under common management and control, the word “insurer” for the purposes of this subsection means the insurance group. The requirements and restrictions applicable to an insurer shall apply to the insurance group.

Ins 3.27(15)(f) (f) Similar policies for the purposes of this subsection include policies which provide similar benefits even though there may be differences in benefit amounts, elimination periods, renewal terms or ancillary benefits.

Ins 3.27(16) (16) Mail order refusal form. An insurer shall not use a mail order advertisement which requires the recipient, in order to refuse a policy, to sign a refusal form and return it to the insurer.

Ins 3.27(17) (17) Group, quasi-group or special class implications. An advertisement shall not state or imply that prospective policyholders or members of a particular class of individuals become group or quasi-group members or are uniquely eligible for a special policy or coverage and as such will be subject to special rates or underwriting privileges or that a particular coverage or policy is exclusively for preferred risks, a particular segment of people, or a particular age group or groups, unless such is the fact.

Ins 3.27(18) (18) Inspection of policy.

Ins 3.27(18)(a) (a) An offer in an advertisement of free inspection of a policy or an offer of a premium refund shall not be a cure for misleading or deceptive statements contained in such advertisement.

Ins 3.27(18)(b) (b) An advertisement which refers to the provision in the policy advertised regarding the right to return the policy shall disclose the time limitation applicable to such right.

Ins 3.27(19) (19) Identification of plan or number of policies.

Ins 3.27(19)(a) (a) When an advertisement refers to a choice regarding benefit amounts, it shall disclose that the benefit amounts provided will depend upon the plan selected and that the premium will vary with the amount of the benefits.

Ins 3.27(19)(b) (b) When an advertisement refers to various benefits which may be contained in 2 or more policies, other than group policies, it shall disclose that such benefits are provided only through a combination of such policies.

Ins 3.27(20) (20) Use of statistics.

Ins 3.27(20)(a) (a) An advertisement which sets out the dollar amounts of claims paid, the number of persons insured or other statistical information shall identify the source of such statistical information and shall not be used unless it accurately reflects all of the relevant facts. Irrelevant statistical data shall not be used.

Ins 3.27(20)(b) (b) An advertisement shall not imply that the statistical information given is derived from the insurer’s experience under the policy advertised unless such is the fact. The advertisement shall specifically so state if such information applies to other policies or plans.

Ins 3.27(20)(c) (c) If a loss ratio is to be shown in an advertisement, it shall be derived from either premiums received and benefits paid or premiums earned and losses incurred.

Ins 3.27(20)(d) (d) If loss ratios are to be compared between insurers in an advertisement, comparison shall be limited to policies or plans of the same type issued to similar classes of risks.

Ins 3.27(20)(e) (e) An advertisement which sets out the dollar amounts of claims paid shall also indicate the period during which such claims have been paid.

Ins 3.27(21) (21) Service facilities. An advertisement shall not:

Ins 3.27(21)(a) (a) Contain untrue statements with respect to the time within which claims are paid.

Ins 3.27(21)(b) (b) State or imply that claim settlements will be liberal or generous or use words of similar import.

Ins 3.27(21)(c) (c) State or imply that claim settlements will be beyond the actual terms of the policy, or

Ins 3.27(21)(d) (d) Contain a description of a claim which involves unique or highly unusual circumstances.

Ins 3.27(22) (22) Statements about an insurer. An advertisement shall not contain statements which are untrue in fact or are by implication misleading with respect to the insurer’s assets, corporate structure, financial standing, age, experience or relative position in the insurance business.

Ins 3.27(23) (23) Disparaging comparisons and statements. An advertisement shall not directly or indirectly make unfair or incomplete comparisons of policies or benefits and shall not falsely or unfairly disparage, discredit or criticize competitors, their policies, services or business methods or competing marketing methods.

Ins 3.27(24) (24) Method of disclosure of required information.

Ins 3.27(24)(a) (a) All information required to be disclosed by this rule shall be set out clearly, conspicuously and in close conjunction with the statements to which such information relates or under appropriate captions of such prominence that it shall be readily noticed and not minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of the advertisements so as to be confusing or misleading.

Ins 3.27(24)(b) (b) An advertisement or representation of a specific individual policy or policies which constitutes an invitation to apply shall include an outline of coverage as required by sub. (8).

Ins 3.27(24)(c) (c) Information required by this rule shall not be set out under inappropriate captions or headings or under inappropriate questions where a question and answer format is used.

Ins 3.27(24)(d) (d) An advertisement of a hospital confinement indemnity policy shall disclose in close conjunction with any description of the benefits the existence in the policy of a provision which eliminates benefits for sickness and/or injury conditions for a stated number of days at the beginning of a hospital confinement.

Ins 3.27(24)(e) (e) An advertisement of a non-cancellable policy or of a guaranteed renewable policy shall also be subject to sub. (25).

Ins 3.27(25) (25) Non-cancellable and guaranteed renewable policies.

Ins 3.27(25)(a) (a) No person, in the presentation, solicitation, effectuation, or sale of a policy, and no advertisement, relating to or used in connection with a policy, shall use the terms “non-cancellable” or “non-cancellable and guaranteed renewable” or “guaranteed renewable,” except in connection with policies conforming to s. Ins 3.13 (2) (e).

Ins 3.27(25)(b) (b) An advertisement describing a non-cancellable and guaranteed renewable or guaranteed renewable policy form shall be subject to sub. (11).

Ins 3.27(25)(c) (c) A printed advertisement describing a non-cancellable or non-cancellable and guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the terms “non-cancellable” or “non-cancellable and guaranteed renewable:”

Ins 3.27(25)(c)1. 1. The age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable, if other than lifetime,

Ins 3.27(25)(c)2. 2. The age or time at which the form’s benefits are reduced, if applicable, (the age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is non-cancellable or non-cancellable and guaranteed renewable), and

Ins 3.27(25)(c)3. 3. That benefit payments are subject to an aggregate limit, if applicable.

Ins 3.27(25)(d) (d) A printed advertisement describing a guaranteed renewable policy form shall disclose, as prominently as and in close conjunction with any prominent use of the term “guaranteed renewable:”

Ins 3.27(25)(d)1. 1. The age to or term for which the form is guaranteed renewable, if other than lifetime;

Ins 3.27(25)(d)2. 2. The age or time at which the form’s benefits are reduced, if applicable, (the age or time at which a form’s benefits are reduced need not be so disclosed if such reduction is not effected prior to the age to or form for which the form is guaranteed renewable or if regular benefits are payable at least to the age to or term for which the form is guaranteed renewable);

Ins 3.27(25)(d)3. 3. That benefit payments are subject to an aggregate limit, if applicable; and

Ins 3.27(25)(d)4. 4. That the applicable premium rates may be changed.

Ins 3.27(25)(e) (e) The foregoing limitations on the use of the term “non-cancellable” shall also apply to any synonymous term such as “not cancellable;” and the foregoing limitations on use of the term “guaranteed renewable” shall apply to any synonymous term such as “guaranteed continuable.”

Ins 3.27(26) (26) Form number. An advertisement which is an invitation to apply or an invitation to inquire and which is mass-produced shall be identified by a form number. The form number shall be sufficient to distinguish it from any other advertising form or any policy, application or other form used by the insurer.

Ins 3.27(27) (27) Insurer’s responsibility for advertisements.

Ins 3.27(27)(a) (a) The content, form and method of dissemination of all advertisements, regardless of by whom designed, created, written, printed or used, shall be the responsibility of the insurer whose policy is advertised.

Ins 3.27(27)(b) (b) An insurer shall require its agents and any other person or agency acting on its behalf in preparing advertisements to submit proposed advertisements to it for approval prior to use.

Ins 3.27(28) (28) Insurer’s advertising file. Each insurer shall maintain at its home or principal office a complete file containing every printed, published or prepared advertisement of its policies hereafter disseminated in this or any other state, whether or not licensed in such other state. With respect to group, blanket and franchise policies, all proposals prepared on the same printed form need not be included in the file; only typical examples of such proposals need be included. A notation shall be attached to each such advertisement in the file indicating the manner and extent of distribution and the form number of any policy, amendment, rider, or endorsement form advertised. A copy of the policy advertised, together with any amendment, rider or endorsement applicable thereto, shall be included in the file with each such advertisement. Such file shall be subject to regular and periodic inspection by the office of the commissioner of insurance. All such advertisements shall be maintained in such file for a period of 4 years or until the filing of the next regular examination report on the insurer, whichever is the longer period.

Ins 3.27(29) (29) Penalty. Violations of this rule shall subject the violator to s. 601.64, Stats.

Ins 3.27(31) (31) Effective date. This rule shall apply to all advertisements used in this state after June 1, 1973.

Ins 3.27 History History: Cr. Register, April, 1973, No. 208, eff. 6-1-73; am. (zb), (11) (c) 1. and (11) (e), Register, August, 1973, No.212, eff. 9-1-73; am. (5) (b) 1., Register, April, 1975, No. 232, eff. 5-1-75; emerg. am. (1), (2), (5) (c) and (m) 1., eff. 6-22-76; am. (1), (2), (5) (c) and (m) 1., Register, September, 1976, No. 249, eff. 10-1-76; cr. (9) (zh), Register, November, 1976, No. 251, eff. 12-1-76; am. (2), Register, March, 1979, No. 279, eff. 4-1-79; r. (29), Register, March, 1981, No. 303, eff. 4-1-81; cr. (10) (j) 43., Register, October, 1984, No. 346, eff. 11-1-84; r. (30) under s. 13.93 (2m) (b) 16., Stats., Register, December, 1984, No. 348; am. (4) (a), (9) (p) and (v) (intro.) and (10) (h), Register, March, 1985, No. 351, eff. 4-1-85; correction in (2) (and (5) made under s. 13.93 (2m) (b) 7., Stats., Register, April, 1992, No. 436; am. (5) (a) 1., Register, January, 1999, No. 517, eff. 2-1-99.

Ins 3.28 Ins 3.28 Solicitation, underwriting and claims practices in individual and franchise accident and sickness insurance.

Ins 3.28(1) (1) Purpose. The purpose of this rule is to promote the fair and equitable treatment of Wisconsin residents in the solicitation, underwriting and administration of accident and sickness insurance and of contracts issued by a plan subject to ch. 613, Stats. Sections of statutes interpreted or implemented by this rule include but are not limited to ss. 601.04 (3), 601.01 (2), 611.20, 618.12 (1), and 632.76, Stats.

Ins 3.28(2) (2) Scope. This rule applies to the solicitation, underwriting and administration of any insurance issued by any insurer or fraternal benefit society under s. Ins 6.75 (1) (c) or (2) (c) and ss. 600.03 (22) and 632.93, Stats., except credit accident and sickness insurance under s. Ins 6.75 (1) (c) 1. or (2) (c) 1., and to any contract, other than one issued on a group or group type basis as defined in s. Ins 6.51 (3), issued by a plan subject to ch. 613, Stats. For the purpose of this rule, references to insurer, policy, and insurance agent or representative, also apply to organizations or associations operating non-profit plans, contracts, and persons within the scope of the rule, respectively.

Ins 3.28(3) (3) Application form. An application form which becomes part of the insurance contract shall provide to the effect that statements made by the applicant in the application form regarding the general medical history or general health of a proposed insured person which require an opinion or the exercise of judgment are representations or are to the best of the applicant’s knowledge and/or belief. Such form need not so provide with respect to statements regarding specifically named diseases, physical conditions, or types of medical consultation or treatment. Such form shall not require the applicant to state that he or she has not withheld any information or concealed any facts in completing the application; however, the applicant may be required to state that his or her answers are true and complete to the best of his or her knowledge and/or belief.

Ins 3.28(4) (4) Solicitation. An insurance agent or representative shall review carefully with the applicant all questions contained in each application which he or she prepares and shall set down in each such form all material information disclosed to him or her by the applicant in response to the questions in such form.

Ins 3.28(5) (5) Underwriting.

Ins 3.28(5)(a) (a) An insurer shall make provision for adequate underwriting personnel and procedures so as to process without undue delay each application for insurance received by it.

Ins 3.28(5)(b) (b) An insurer shall give due consideration to all statements in each application for insurance submitted to it and shall duly evaluate the proposed insured person before issuing coverage for such person.

Ins 3.28(5)(c) (c) An insurer which issues coverage for a person shall not use the statements, information or material set out in subds. 1., 2. and 3. to void the coverage on the basis of misrepresentation in the application, or deny a claim on the basis of a pre-existing condition defense, unless the insurer has:

Ins 3.28(5)(c)1. 1. Resolved patently conflicting or incomplete statements in the application for the coverage;

Ins 3.28(5)(c)2. 2. Duly considered information furnished to it:

Ins 3.28(5)(c)2.a. a. In connection with the processing of such application, or

Ins 3.28(5)(c)2.b. b. In connection with individual coverage on the person previously issued by it and currently in force, or

Ins 3.28(5)(c)3. 3. Duly considered the material which it would have obtained through reasonable inquiry following due consideration of the statements or information.

Ins 3.28(5)(d) (d) An insurer shall at the issuance or amendment of a policy, contract or subscriber certificate, furnish notice concerning statements in the application to the policyholder, contracting party or certificate holder, where the application for the coverage or amended coverage contains questions relating to the medical history or other matters concerning the insurability of the person or persons being insured and the application is part of the insurance contract.

Ins 3.28(5)(d)1. 1. The notice shall be printed prominently in contrasting color on the first page of the policy, contract, or subscriber certificate or in the form of a sticker, letter or other form attached to the first page of the policy, contract or certificate, or a letter or other form to be mailed within 10 days after the issuance or amendment of coverage.

Ins 3.28(5)(d)2. 2. The notice shall contain substantially the following as to text and caption or title:

IMPORTANT NOTICE CONCERNING STATEMENTS IN THE APPLICATION FOR YOUR INSURANCE

Please read the copy of the application attached to this notice or to your policy. Omissions or misstatements in the application could cause an otherwise valid claim to be denied. Carefully check the application and write to the insurer within 10 days if any information shown on the application is not correct and complete or if any medical history has not been included. The application is part of the insurance contract. The insurance contract was issued on the basis that the answers to all questions and any other material information shown on the application are correct and complete.

Ins 3.28(5)(e) (e) An insurer shall file with the commissioner a description of the procedure it will follow and the form or forms it will use to meet the requirements of par. (d).

Ins 3.28(5)(f) (f) An insurer which, after coverage for a person has been issued, receives information regarding such person which would reasonably be considered a sufficient basis to void or reform such person’s coverage shall effect such voiding or reformation as provided in s. 631.11 (4), Stats., or the insurer shall be held to have waived its rights to such action.

Ins 3.28(5)(g) (g) An insurer may use statements in an application form as a defense to a claim or to avoid or reform coverage only if it has complied with par. (d).

Ins 3.28(6) (6) Claims administration.

Ins 3.28(6)(a) (a) If the existence of a disease or physical condition is duly disclosed in the application for coverage in response to the questions therein, the insurer shall not use the pre-existence defense, under coverage providing such a defense, to deny benefits for such disease or condition unless such disease or condition is excluded from coverage by name or specific description effective on the date of loss. This paragraph does not apply to a preexisting condition exclusion permitted under s. 632.746 (1), Stats.

Ins 3.28(6)(b) (b) If an application contains no question concerning the proposed insured person’s health history or medical treatment history and regardless of whether it contains a question concerning the proposed insured person’s general health at the time of the application, the insurer may use the pre-existence defense, under coverage providing such a defense, only with respect to losses incurred or disability commencing within 12 months from the effective date of coverage, unless the disease or physical condition causing the loss or disability is excluded from coverage by name or specific description effective on the date of loss or the date the disability commenced. If, after 12 months from the effective date of coverage, there is a reoccurrence of the disease or condition causing the loss or disability, then the pre-existence defense may not be used. Under a disability income policy a disease or condition shall be deemed to have not reoccurred if the insured performs all important duties of the insured’s or a comparable occupation on the same basis as before the disability, for at least 6 months. Under a policy other than disability income a disease or condition shall be deemed to have not reoccurred if a period of 6 months elapses during which no expenses are incurred for the same or related disease or condition.

Ins 3.28(6)(c) (c) An insurer shall not void coverage or deny a claim on the ground that the application for such coverage did not disclose certain information considered material to the risk if the application did not clearly require the disclosure of such information.

Ins 3.28(6)(d) (d) A claim shall not be reduced or denied on the grounds that the disease or physical condition resulting in the loss or disability had existed prior to the effective date of coverage, under coverage providing such a defense, unless the insurer has evidence that such disease or physical condition, as distinguished from the cause of such disease or physical condition, had manifested itself prior to such date. Such manifestation may be established by evidence of:

Ins 3.28(6)(d)1. 1. Medical diagnosis or treatment of such disease or physical condition prior to the effective date, or

Ins 3.28(6)(d)2. 2. The existence of symptoms of such disease or physical condition prior to the effective date which would cause an ordinarily prudent person to seek diagnosis, care or treatment and for which such diagnosis, care or treatment was not sought prior to such date.

Ins 3.28(6)(e) (e) Coverage which contains wording which requires the cause of the disease or physical condition, as distinguished from the disease or physical condition itself, to originate after the effective date of coverage shall be administered in accordance with par. (d).