§ 27-1-12-39 — Direct response solicitations; notice of payment of compensation

(a) As used in this section, "direct response
solicitation" means a solicitation through a sponsoring or endorsing
entity through the mails, telephone, or other mass communications
media.
(b) As used in this section, "sponsoring or endorsing entity" means
an organization that has arranged for the offering of a program of
insurance in a manner that communicates that:
(1) eligibility for participation in the program is dependent upon
affiliation with the organization; or
(2) the organization encourages participation in the program.
(c) This section applies to any program of insurance that, if issued
on a group basis, would not conform to one (1) of the descriptions in
section 37 of this chapter.
(d) If compensation of any kind will or may be paid, under a
program of insurance described in subsection (c), to:
(1) a policyholder or sponsoring or endorsing entity in the case of
a group policy; or
(2) a sponsoring or endorsing entity in the case of individual,
blanket, or franchise policies marketed by means of direct
response solicitation;
the insurer shall cause to be distributed to prospective insureds under
the program a written notice that compensation will or may be paid
under the program as indicated in subdivision (1) or (2).
(e) The notice required under subsection (d) shall be given:
(1) whether the compensation that will or may be paid is direct or
indirect; and
(2) whether the compensation is to be paid to or retained by:
(A) the policyholder or sponsoring or endorsing entity; or
(B) a third party, at the direction of the policyholder or
sponsoring or endorsing entity, or any entity affiliated with the
sponsoring or endorsing entity by way of ownership, contract,
or employment.
(f) The notice required under subsection (d) shall be placed on or
accompany any application or enrollment form provided prospective
insureds.

Legislative History

As added by P.L.254-1985, SEC.3.