(1) It is the intent of the general
assembly that the purpose of this section is to provide a prospective viator with
clear and unambiguous statements in the advertisement of a viatical settlement
contract and to assure the clear, truthful, and adequate disclosure of the benefits,
risks, limitations, and exclusions of a viatical settlement contract. This purpose is to
be accomplished by the establishment of guidelines and standards of permissible
and impermissible conduct in the advertising of a viatical settlement contract to
assure that a product description is presented in a manner that prevents unfair,
deceptive, or misleading advertising and is conducive to accurate presentation and
description of a viatical settlement contract through the advertising media and
material used by a licensee.
(2) This section applies to an advertising of a viatical settlement contract or
a related product or service intended for dissemination in this state, including
internet advertising viewed by a person located in this state. Where disclosure
requirements are established pursuant to federal regulation, this section shall be
interpreted so as to minimize or eliminate conflict with federal regulation wherever
possible.
(3) Each viatical settlement licensee shall establish and at all times maintain
a system of control over the content, form, and method of dissemination of an
advertisement of its contracts, products, and services. An advertisement,
regardless of by whom written, created, designed, or presented, is the
responsibility of the licensee, as well as of the individual who created or presented
the advertisement. A system of control by the licensee shall include regular
notification, at least once a year, to agents and others authorized to disseminate
advertisements, of the requirements and procedures for approval before the use of
an advertisement not furnished by the licensee.
(4) An advertisement shall be truthful and not misleading in fact or by
implication. The form and content of an advertisement of a viatical settlement
contract shall be sufficiently complete and clear so as to avoid deception. It may
not have the capacity or tendency to mislead or deceive. Whether an advertisement
has the capacity or tendency to mislead or deceive shall be determined by the
commissioner from the overall impression that the advertisement may be
reasonably expected to create upon a person of average education or intelligence
within the segment of the public to which it is directed.
(5) (a) The information required to be disclosed pursuant to the provisions of
this section may not be minimized, rendered obscure, or presented in an ambiguous
fashion or intermingled with the text of the advertisement so as to be confusing or
misleading.
(b) An advertisement may not omit material information or use words,
phrases, statements, references, or illustrations if the omission or use has the
capacity, tendency, or effect of misleading or deceiving the public as to the nature
or extent of any benefit, loss covered, or state or federal tax consequence. The fact
that the viatical settlement contract offered is made available for inspection before
consummation of the sale, or that an offer is made to refund the payment if the
viator is not satisfied, or that the viatical settlement contract includes a free look
period that satisfies or exceeds legal requirements, does not remedy misleading
statements.
(c) An advertisement may not use the name or title of a life insurance
company or a life insurance policy unless the advertisement has been approved in
writing by the insurer.
(d) An advertisement may not state or imply that interest charged on an
accelerated death benefit or a policy loan is unfair, inequitable, or in any manner an
incorrect or improper practice.
(e) The words free, no cost, without cost, no additional cost, or at no
extra cost, or words of similar import may not be used with respect to a benefit or
service unless true. An advertisement may specify the charge for a benefit or
service or may state that a charge is included in the payment or use other
appropriate language.
(f) (I) Any testimonial, appraisal, or analysis used in an advertisement shall:
(A) Be genuine;
(B) Represent the current opinion of the author;
(C) Be applicable to the viatical settlement contract, product, or service
advertised, if any; and
(D) Be accurately reproduced with sufficient completeness to avoid
misleading or deceiving prospective viators as to the nature or scope of any
testimonial, appraisal, analysis, or endorsement.
(II) In using any testimonial, appraisal, or analysis, the viatical settlement
licensee makes as its own all the statements contained in them, and the statements
are subject to all the provisions of this section.
(III) If the individual making a testimonial, appraisal, analysis, or endorsement
has a financial interest in the viatical settlement provider or related entity as a
stockholder, director, officer, employee, or otherwise, or receives a benefit, directly
or indirectly, other than required union scale wages, that fact must be disclosed
prominently in the advertisement.
(IV) An advertisement may not state or imply that a viatical settlement
contract, benefit, or service has been approved or endorsed by a group of
individuals, society, association, or other organization unless that is the fact and
unless any relationship between an organization and the licensee is disclosed. If the
entity making the endorsement or testimonial is owned, controlled, or managed by
the licensee or receives payment or other consideration from the licensee for
making an endorsement or testimonial, that fact must be disclosed in the
advertisement.
(V) If an endorsement refers to benefits received under a viatical settlement
contract, all pertinent information shall be retained for a period of five years after
its use.
(VI) An advertisement may not contain statistical information unless it
accurately reflects recent and relevant facts. The source of all statistics used in an
advertisement shall be identified.
(VII) An advertisement may not disparage insurers, viatical settlement
providers, insurance producers, policies, services, or methods of marketing.
(VIII) The name of the viatical settlement licensee shall be identified clearly
in all advertisements about the licensee or its viatical settlement contract,
products, or services, and if any specific viatical settlement contract is advertised,
the viatical settlement contract must be identified either by form number or some
other appropriate description. If an application is part of the advertisement, the
name of the viatical settlement provider shall be shown on the application.
(IX) An advertisement may not use a trade name, group designation, name of
the parent company of a licensee, name of a particular division of the licensee,
service mark, slogan, symbol, or other device or reference without disclosing the
name of the licensee if the advertisement has the capacity or tendency to mislead
or deceive as to the true identity of the licensee or to create the impression that a
company other than the licensee has any responsibility for the financial obligation
under a viatical settlement contract.
(X) An advertisement may not use any combination of words, symbols, or
physical materials that by their content, phraseology, shape, color, or other
characteristics are so similar to a combination of words, symbols, or physical
materials used by a government program or agency or otherwise appear to be of
such a nature that they tend to mislead prospective viators into believing that the
solicitation is in some manner connected with a government program or agency.
(XI) An advertisement may state that a licensee is licensed in the state
where the advertisement appears if it does not exaggerate that fact or suggest or
imply that a competing licensee may not be so licensed. The advertisement may ask
the audience to consult the licensee's website or contact that state's division of
insurance to find out if that state requires licensing and, if so, whether the licensee
or any other company is licensed.
(XII) An advertisement may not create the impression that the viatical
settlement provider or its financial condition or status; the payment of its claims; or
the merits, desirability, or advisability of its viatical settlement contracts are
recommended or endorsed by any government entity.
(XIII) The name of the actual licensee shall be stated in all of its
advertisements. An advertisement may not use a trade name, group designation,
name of any affiliate or controlling entity of the licensee, service mark, slogan,
symbol, or other device in a manner that has the capacity or tendency to mislead or
deceive as to the true identity of the actual licensee or create the false impression
that an affiliate or controlling entity has any responsibility for the financial
obligation of the licensee.
(XIV) An advertisement may not, directly or indirectly, create the impression
that any division or agency of the state or of the United States government
endorses, approves, or favors:
(A) A licensee or its business practices or methods of operation;
(B) The merits, desirability, or advisability of a viatical settlement contract;
(C) Any viatical settlement contract; or
(D) Any policy or life insurance company.
(XV) If the advertiser emphasizes the speed with which the viatical
settlement contract occurs, the advertising must disclose the average time frame,
from completed application to the date of offer and from acceptance of the offer to
receipt of the funds by the viator.
(XVI) If the advertising emphasizes the dollar amounts available to viators,
the advertising shall disclose the average purchase price as a percent of face value
obtained by viators contracting with the licensee during the past six months.