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					                             TAC CHAPTER 3 ADVERTISING RULES


MEDICARE SUPPLEMENT
§3.3313 Filing Requirements for Advertising
A Medicare supplement policy shall not be deemed to meet the standards and requirements set
forth in this subchapter unless the filing company has complied with the requirements of the
following paragraphs.
 (1) Every issuer providing Medicare supplement insurance or benefits in this state shall provide
to the department for review a copy of any advertisement, as defined in §21.102 of this title
(relating to Scope), used to promote a policy which is approved under the provisions of this
subchapter. The copy of the advertisement shall be submitted to the department no later than 60
days prior to its first use. At the expiration of the 60-day period provided by this paragraph, any
advertisement filed with the department shall be deemed acceptable, unless before the end of
that 60-day period the department has notified the entity of its nonacceptance.
 (2) All advertisements shall comply with all applicable federal and state laws and shall be
submitted in accordance with §21.120 of this title (relating to Filing for Review). This section does
not require prior departmental approval of the advertisement. Nothing in this section relieves any
person from otherwise complying with all applicable laws or from any sanction imposed by law.


§3.3319 Standards for Marketing
(a) Every issuer marketing Medicare supplement coverage in this state, directly or through its
agents, shall establish marketing procedures to ensure that:
     (1) any comparison of policies by its agents will be fair and accurate;
     (2) excessive insurance is not sold or issued;
     (3) all prospective policyholders are advised prior to the time an application is taken, that the
    basic "core" benefit package is available, including the contents of such basic "core" benefit
    package;
     (4) every reasonable effort and inquiry is made to identify whether a prospective applicant or
    enrollee for Medicare supplement insurance already has accident and sickness insurance
    and the types and amounts of any such insurance; and
     (5) auditable procedures for verifying compliance with provisions of this section are in place
    and utilized.
(b) Every issuer marketing Medicare supplement coverage in this state, directly or through its
agents, shall ensure that the following notice is prominently displayed by type, stamp, or other
appropriate means on the first page of the policy: "Notice to buyer: This policy may not cover all
of your medical expenses."
(c) In addition to the practices prohibited in the Insurance Code, Article 21.21, the following acts
and practices are prohibited in the marketing of Medicare supplement policies or coverages in
this state.
      (1) Twisting--Knowingly making any misleading representation or incomplete or fraudulent
    comparison of any insurance policies or insurers for the purpose of inducing, or tending to
    induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or
    convert any insurance policy or to take out a policy of insurance with another insurer.
      (2) High pressure tactics--Employing any method of marketing having the effect of or
    tending to induce the purchase of insurance through force, fright, threat, whether explicit or
    implied, or undue pressure to purchase or recommend the purchase of insurance.
      (3) Cold lead advertising--Making use directly or indirectly of any method of marketing which
    fails to disclose in a conspicuous manner that a purpose of the method of marketing is
    solicitation of insurance and that contact will be made by an insurance agent or insurance
    company. This requirement is in addition to other regulations applicable to lead card
    advertising.
      (4) Issuers may utilize additional benefit designations in the marketing of the benefit plans;
    however, such designations shall be accompanied by a clear statement as to the applicable
    benefit plan, "A" through "J," being marketed. Additional benefit designations shall not be
    deceptive or misleading.


§3.3324 Open Enrollment
(f) Invitation to contract advertisements, as defined in §21.113(b) of this title (relating to Rules
Pertaining Specifically to Accident and Health Insurance Advertising and Health Maintenance
Organization Advertising) shall include the following statement: "Benefits and premiums under
this policy may be suspended for up to 24 months if you become entitled to benefits under
Medicaid. You must request that your policy be suspended within 90 days of becoming entitled to
Medicaid. If you lose (are no longer entitled to) benefits from Medicaid, this policy can be
reinstated if you request reinstatement within 90 days of the loss of such benefits and pay the
required premium."


§3.3325 Medicare Select Policies, Certificates and Plans of Operation
(k) A Medicare Select issuer shall make full and fair disclosure in writing of the provisions,
restrictions, and limitations of the Medicare Select policy or certificate to each applicant. This
disclosure shall include at least the following:
      (1) an outline of coverage sufficient to permit the applicant to compare the coverage and
    premiums of the Medicare Select policy or certificate with other Medicare supplement policies
    or certificates offered by the issuer and with other Medicare Select policies or certificates;
     (2) a description (including address, phone number, and hours of operation) of the network
    providers, including primary care physicians, specialty physicians, hospitals, and other
    providers;
     (3) a description of the restricted network provisions, including payments for coinsurance
    and deductibles when providers other than network providers are utilized (except to the
    extent specified in the policy or certificate, expenses incurred when using out-of-network
    providers do not count toward the out-of-pocket annual limit contained in plans K and L);
     (4) a description of coverage for emergency and urgently needed care and other out-of-
    service area coverage;
     (5) a description of limitations on referrals to restricted network providers and to other
    providers;
     (6) a description of the policyholder's rights to purchase any other Medicare supplement
    policy or certificate otherwise offered by the issuer; and
     (7) a description of the Medicare Select issuer's quality assurance program and grievance
    procedure.
     (8) For hospital network providers, the statement in 12-point bold-face type: "Only certain
    hospitals are network providers under this policy. Check with your physician to determine if
    he or she has admitting privileges at the network hospital. If he or she does not, you may be
    required to use another physician at time of hospitalization or you will be required to pay for
    all expenses." This statement shall also be included in the "invitation to contract"
    advertisement, as that term is defined in §21.113(b) of this title (relating to Rules Pertaining
    Specifically to Accident and Health Insurance Advertising and Health Maintenance
    Organization Advertising).


LONG-TERM CARE INSURANCE
§3.3838 Filing Requirements for Advertising


A long-term care insurance policy shall not be deemed to meet the standards and requirements
set forth in this subchapter unless the filing company has complied with the requirements of the
following paragraphs.


 (1) Every insurer or other entity providing long-term care insurance or benefits in this state shall
provide to the commissioner for review a copy of any advertisement, as defined in §21.102 of this
title (relating to Scope), used to promote a policy which is approved under the provisions of this
subchapter. The copy of the advertisement shall be submitted to the commissioner no later than
60 days prior to its first use. At the expiration of the 60-day period provided by this paragraph, any
advertisement filed with the commissioner shall be deemed acceptable, unless before the end of
that 60-day period the commissioner has notified the entity of its nonacceptance.
 (2) All advertisements shall comply with all applicable federal and state laws and shall be
submitted in accordance with §21.120 of this title (relating to Filing for Review). This section does
not require prior approval of the advertisement. Nothing in this section relieves any person from
otherwise complying with all applicable laws or from any sanction imposed by law.
 (3) The insurer or other entity providing long-term care insurance shall retain all advertisements
relating to long-term care insurance as provided in §21.116 of this title (relating to Special
Enforcement Procedures for Rules Governing Advertising and Solicitation of Insurance).


§3.3839 Standards for Marketing
(a) Every insurer, health care service plan, or other entity marketing long-term care insurance
coverage in this state, directly or through its agents, shall establish marketing procedures to
assure that:
     (1) any comparison of policies by its agents or other producers will be fair and accurate;
     (2) excessive insurance is not sold or issued;
     (3) every reasonable effort is made to identify whether a prospective applicant or enrollee
    for long-term care insurance already has accident and sickness or long-term care insurance
    and the types and amounts of any such insurance;
     (4) no person shall, in selling or offering to sell a long-term care policy, misrepresent a
    material fact;
     (5) the policy shall be delivered no later than 30 days after the application for the long-term
    care insurance policy or certificate is approved;
     (6) the terms non-cancellable and level premium are used only to describe a policy or
    certificate that conforms to §3.3810 of this subchapter (relating to Policy or Certificate
    Standards for Noncancellability); and
     (7) auditable procedures are in place to verify compliance with this subsection.
(b) Every insurer or other entity marketing long-term care insurance coverage in this state,
directly or through its agents, shall ensure that the notice provided in paragraph (1) or (2) of this
subsection, as appropriate, is prominently displayed by type, stamp, or other appropriate means
on the first page of both the policy (or certificate) and the outline of coverage.
     (1) For any policy or certificate which contains inflation protection provisions, the notice shall
    read as follows: "Notice to buyer: This policy (or certificate) may not cover all of the costs
    associated with long-term care incurred by the policyholder (or certificate holder) during the
    period of coverage. The policyholder (or certificate holder) is advised to review carefully all
    policy limitations."
     (2) For any policy or certificate which does not contain inflation protection provisions, the
    notice shall read as follows: "Notice to buyer: This policy (or certificate) may not cover all of
    the costs associated with long-term care incurred by the policyholder (or certificate holder)
    during the period of coverage. The policyholder (or certificate holder) is advised to review
    carefully all policy limitations. In addition, the policyholder (or certificate holder) is advised
    that based on current health care cost trends, the benefits provided by this policy (or
    certificate) may be significantly diminished in terms of real value to the policyholder (or
    certificate holder), depending on the amount of time which elapses between the date of
    purchase and the date upon which the policyholder (or certificate holder) first becomes
    eligible for those benefits."
(c) The marketing of a long-term care insurance policy or certificate which includes benefits
provisions under §3.3818(b) of this title (relating to Standards for Eligibility for Benefits) shall
disclose within a common location and in equal prominence a description of all benefit levels
payable for coverage described in §3.3818(b).
(d) In addition to the practices prohibited in the Insurance Code, Article 21.21, the following acts
and practices in the marketing of long-term care policies or certificates in this state are prohibited.
     (1) Twisting--Knowingly making any misleading representation or incomplete or fraudulent
    comparisons of any insurance policies or insurers for the purpose of inducing, or tending to
    induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or
    convert any insurance policy or to take out a policy of insurance with another insurer.
     (2) High pressure tactics--Employing any method of marketing having the effect of or
    tending to induce the purchase of insurance through force, fright, threat, whether explicit or
    implied, or undue pressure to purchase or recommend the purchase of insurance.
     (3) Cold lead advertising--Making use directly or indirectly of any method of marketing which
    fails to disclose in a conspicuous manner that a purpose of the method of marketing is
    solicitation of insurance and that contact will be made by an insurance agent or insurance
    company.
     (4) Misrepresentation--Selling, marketing, offering, or advertising any insurance policy,
    certificate, or rider to such policy or certificate, which substantially meets the definition of
    long-term care insurance found in the Insurance Code Article 3.70-12, §2, but which provides
    benefits for a period of fewer than 12 months.


§3.3840 Requirements To Deliver Shopper's Guide


A long-term care insurance shopper's guide in the format developed by the National Association
of Insurance Commissioners shall be provided to all prospective applicants of a long-term care
insurance policy or certificate, as provided in this section.


 (1) In the case of agent solicitation, an agent must deliver the shopper's guide prior to the
presentation of an application or enrollment form.
 (2) In the case of direct response solicitations, the shopper's guide must be presented in
conjunction with any application or enrollment form.
 (3) At such time the department develops a long-term care insurance shopper's guide, this guide
shall be provided to all prospective applicants of a long-term care insurance policy or certificate in
lieu of the aforementioned guide.


VIATICAL/LIFE SETTLEMENTS
§3.1702 Definitions
(a) The following words and terms, when used in this subchapter, have the following meanings,
unless the context clearly indicates otherwise.
(1) Advertisement--Includes, but is not limited to:
      (A) printed and published material, audio-visual material, and descriptive literature of a
    viatical or life settlement provider, provider representative, or broker, including materials used
    in direct mail, newspapers, magazines, the internet, radio, telephone and television scripts,
    billboards, and similar displays;
      (B) descriptive literature and sales aids of all kinds used by a viatical or life settlement
    provider, provider representative, or broker and distributed to members of the public,
    including circulars, leaflets, booklets, depictions, illustrations, and form letters;
      (C) prepared sales talks, presentations, and materials for use by a viatical or life settlement
    provider, provider representative, or broker, and those representations made to members of
    the public;
      (D) materials used to solicit viatical or life settlements;
      (E) material included with a viatical or life settlement or an application for a viatical or life
    settlement, when the settlement is solicited or when the contract is delivered, including
    materials used in connection therewith;
      (F) lead card solicitations, which are communications that, regardless of form, content, or
    stated purpose, are used to compile a list containing names or other personal information
    regarding individuals who have expressed a specific interest in a product and are used to
    solicit persons in this state for a viatical or life settlement; and
      (G) any other communication directly or indirectly related to a viatical or life settlement or
    application for a viatical or life settlement, and used in the eventual sale or solicitation of a
    viatical or life settlement or application for a viatical or life settlement.
      (H) The term "advertisement" does not include:
          (i) communications or materials used within a viatical or life settlement provider's,
      provider representative's, or broker's own organization, not used as sales aids and not
      disseminated to members of the public;
          (ii) communications with individuals, other than materials urging individuals to purchase
      or inquire into the potential purchase of a viatical or life settlement;
          (iii) materials used solely for the recruitment, training, and education of a viatical or life
      settlement provider's, provider representative's, or broker's personnel, provided it is not
      also used to induce individuals to inquire into the potential purchase of a viatical or life
      settlement or application for a viatical or life settlement.


§3.1703 Application for Certificate of Registration for Viatical or Life Settlement Providers,
Provider Representatives, or Brokers; Fees
(d) Any registered viatical or life settlement provider, provider representative, or broker may have
additional offices or do business under assumed names as that term is defined in §19.901 of this
title (relating to Definitions Concerning Conduct of Licensed Agents) without obtaining an
additional certificate of registration; provided, each viatical or life settlement provider, provider
representative, or broker shall furnish the department with a list identifying any and all offices
from which the viatical or life settlement provider, provider representative, or broker will conduct
viatical or life settlement business, and show any and all assumed names which the viatical or life
settlement provider, provider representative, or broker will utilize in conducting viatical or life
settlement business at each of those offices.
     (1) Where such a filing is required under the Assumed Business or Professional Name Act,
    Texas Business and Commerce Code §36.01, et seq., or any similar statute, the viatical or
    life settlement provider, provider representative, or broker shall provide the department with a
    copy of the valid assumed name certificate reflecting proper registration of each assumed
    name utilized by the viatical or life settlement provider, provider representative, or broker.
     (2) The assumed name shall comply with subsection (e) of this section.


§3.1707 Advertising, Sales and Solicitation Materials; Filing Prior to Use
(a) Upon issuance of a certificate of registration, each viatical or life settlement provider, provider
representative, or broker shall file with the department all advertising or other solicitation
materials used to market viatical or life settlements or the viatical or life settlement provider's,
provider representative's, or broker's services in this state, on or before the date such materials
are disseminated. Advertising filings should be filed with the department's Advertising Unit at the
address specified in §3.1703(f) of this subchapter (relating to Application for Registration for
Viatical or Life Settlement Providers, Provider Representatives, or Brokers; Fees).
(b) The filings required by this section are for informational purposes only. Viatical and life
settlement providers, provider representatives, or brokers may use or disseminate the materials
referenced in this section without the prior review of the department.
§3.1710 Prohibited Practices Relating to Advertising and Solicitation; Applications and
Contracts
(a) No viatical or life settlement provider, provider representative, or broker shall advertise or in
any other way solicit business in a manner that is untruthful or misleading by fact or implication. In
considering whether or not the advertising or other solicitation is untruthful or misleading, the
department shall use the standards set forth in this subchapter, Insurance Code Article 21.21,
and Chapter 21, Subchapter B of this title (relating to Insurance Advertising, Certain Trade
Practices, and Solicitation), or any other applicable law.
(b) No viatical or life settlement provider, provider representative, or broker shall state or imply
any advantage, right, or preference which, if granted or performed, would be a violation of any
law of this state or the United States.
(c) No viatical or life settlement provider, provider representative, or broker shall:
     (1) condition the consideration of an application for a viatical or life settlement on the
    exclusive dealing between the viator or life settlor and owner and the viatical or life settlement
    provider, provider representative, or broker;
     (2) directly or indirectly contact any owner's, viator's, or life settlor's parents or family
    members, including a spouse or significant other, for any purpose, unless the owner, viator,
    or life settlor has designated a member of his or her family, a spouse, or a significant other as
    a contact person for health status information as provided in §3.1712 of this title (relating to
    Contacting the Viator, Life Settlor, or Owner for Health Status Inquiries; Limits and Prohibited
    Practices);
     (3) discriminate in the availability or terms of viatical or life settlements on the basis of race,
    color, national origin, creed, religion, occupation, geographic location, marital or family status,
    sexual orientation, age, gender, disability or partial disability, unless it can be demonstrated
    that any such factor affects the life expectancy of the viator or life settlor;
     (4) discriminate between viators or life settlors with dependents and those without
    dependents;
     (5) enter into any viatical or life settlement contract without:
       (A) obtaining the written consent of both the viator or life settlor and owner, if the two are
    separate individuals under the policy which is the subject of the viatical or life settlement; and
       (B) making the disclosures required by §3.1708 of this subchapter (relating to Required
    Disclosure) to both the viator or life settlor and the owner;
     (6) enter into any viatical or life settlement contract that provides a payment to the owner
    that is unjust. In determining whether a payment is unjust, the department may consider,
    among other factors, the data submitted in the reports required by §3.1705 of this title
    (relating to Reporting Requirements), and the prevailing discount rates in the viatical or life
    settlement market in Texas, or if insufficient data is available for Texas, the prevailing rates
    nationally or in other states that maintain such data;
     (7) enter into a viatical or life settlement contract in which payments of proceeds are made
    in installments, unless the settlement is effected through an annuity purchased from an
    insurance company licensed by this state or licensed by the state in which the annuity is
    purchased or through an escrow or trust account which provides for installment payments
    and which is established by a financial institution licensed by this state or any other state in
    the United States, and is also a member of the FDIC;
     (8) enter into any viatical or life settlement in this state in which any form used to effect the
    settlement, including the escrow or trust agreement, contains a provision that either requires
    or limits a viator, life settlor, or owner to resolve a legal dispute with the viatical or life
    settlement provider, provider representative, or broker in any state other than Texas,
    specifies a particular city, county, or locality in Texas or elsewhere as the legal forum for
    resolving a dispute, or makes any other state's laws as the law applicable to the form;
     (9) enter into any viatical or life settlement in which any form used to effect the settlement,
    including the escrow or trust agreement, contains a provision that requires the owner, viator,
    or life settlor to pay for policy premiums that cover any period of time after the date in which
    the ownership of the policy is transferred, except as provided in §3.1709(e)(4) of this
    subchapter (relating to Application and Contract Forms: Required Provisions and
    Escrow/Trust Agreements);
     (10) retain any portion of the proceeds from the viatical or life settlement contract;
     (11) intentionally misstate the life expectancy of any viator or life settlor for the purpose of
    evading the tax laws of the United States, or for any other purpose; or
     (12) require any viator, life settlor, or owner to give the viatical or life settlement broker,
    provider, provider representative, or any person, a general power-of-attorney, or designate
    the broker, provider, provider representative, or any person as his or her attorney-in-fact;
    provided that the viatical or life settlement broker, provider, provider representative, or other
    person may obtain a special or limited power-of-attorney if such power-of-attorney is
    restricted only to purposes related to the viatical or life settlement transaction, and those
    purposes are explicitly described in the special or limited power-of-attorney form.
(d) No viatical or life settlement provider, provider representative, or broker shall purchase
benefits of a policy or rider which provides for additional death benefits for accidental death. Such
additional death benefits shall remain payable to the beneficiary last named by the viator, life
settlor, or owner, not including the viatical or life settlement provider, or in the absence of a
beneficiary, to the estate of the viator, life settlor, or owner.
LIFE INSURANCE
§3.4313 Notice and Disclosure Requirements for Marketing Materials
(a) Any "invitation to contract," as defined in §21.114 of this title (relating to Rules Pertaining
Specifically to Life Insurance Advertising), used in the marketing, solicitation or sale of a life
insurance contract containing an acceleration-of-life-insurance provision shall clearly and
concisely disclose the following:
     (1) the illness, condition, care, or confinement necessary to trigger eligibility for any
    acceleration-of-life-insurance benefit;
     (2) the effect that an acceleration-of-life-insurance benefit provision will have on the death
    benefit and other values available under the life insurance contract;
     (3) the tax-related disclosures contained in either subsection (a) or (b) of §3.4316 of this title
    (relating to Disclosures Related to Tax Qualification of Benefits and Benefits' Effect on Public
    Assistance), as appropriate, and the disclosure contained in subsection (c) of §3.4316, or
    disclosures substantially similar to these disclosures.
(b) No insurer or agent, in marketing a life insurance contract which provides acceleration-of-life-
insurance benefits, may mention, illustrate, or refer to the contract as an alternative or substitute
for catastrophic major medical health insurance.


§3.4316 Disclosures Related to Tax Qualification of Benefits and Benefits' Effect on Public
Assistance
(a) Except as provided in subsection (e) of this section, on or after the effective date of this
subchapter, if an insurer markets, delivers, issues for delivery or renews a life insurance contract
in Texas that provides only acceleration-of-life-insurance benefits that are intended to qualify for
favorable tax treatment under federal law, the contract, and any invitation to contract as provided
under §3.4313 of this title (relating to Notice and Disclosure Requirements for Marketing
Materials), must include a disclosure substantially similar to the disclosure set forth in this
subsection. When a series of words are separated by back-slashes (e.g., policy/certificate/rider)
the insurer should choose the most appropriate word or words under the circumstances.
DISCLOSURE: "The acceleration-of-life-insurance benefits offered under this
policy/certificate/rider are intended to qualify for favorable tax treatment under the Internal
Revenue Code of 1986. If the acceleration-of-life-insurance benefits qualify for such favorable tax
treatment, the benefits will be excludable from your income and not subject to federal taxation.
Tax laws relating to acceleration-of-life-insurance benefits are complex. You are advised to
consult with a qualified tax advisor about circumstances under which you could receive
acceleration-of-life-insurance benefits excludable from income under federal law."
(b) Except as provided in subsection (e) of this section, on or after the effective date of this
subchapter, if an insurer markets, delivers, issues for delivery or renews a life insurance contract
in Texas a life insurance contract that contains an acceleration-of-life-insurance benefits provision
that meets the requirements of this subchapter, but that allows benefits to be accelerated in
circumstances in which such benefits would not qualify for favorable tax treatment under federal
law, the contract, and any invitation to contract as provided under §3.4313 of this title (relating to
Notice and Disclosure Requirements for Marketing Materials), must include a disclosure
substantially similar to the disclosure set forth in this subsection. When a series of words are
separated by back-slashes (e.g. policy/certificate/rider) the insurer should choose the most
appropriate word or words under the circumstances. DISCLOSURE: "The acceleration-of-life-
insurance benefits offered under this policy/certificate/rider may or may not qualify for favorable
tax treatment under the Internal Revenue Code of 1986. Whether such benefits qualify depends
on factors such as your life expectancy at the time benefits are accelerated or whether you use
the benefits to pay for necessary long-term care expenses, such as nursing home care. If the
acceleration-of-life-insurance benefits qualify for favorable tax treatment, the benefits will be
excludable from your income and not subject to federal taxation. Tax laws relating to
acceleration-of-life-insurance benefits are complex. You are advised to consult with a qualified tax
advisor about circumstances under which you could receive acceleration-of-life-insurance
benefits excludable from income under federal law."
(c) Except as provided in subsection (e) of this section, on or after the effective date of this
subchapter, if an insurer markets, delivers, issues for delivery or renews a life insurance contract
in Texas that provides acceleration-of-life-insurance benefits, the contract, and any invitation to
contract as provided under §3.4313 of this title (relating to Notice and Disclosure Requirements
for Marketing Materials), must include a disclosure substantially similar to the disclosure set forth
in this subsection. DISCLOSURE: "Receipt of acceleration-of-life-insurance benefits may affect
your, your spouse or your family's eligibility for public assistance programs such as medical
assistance (Medicaid), Aid to Families with Dependent Children (AFDC), supplementary social
security income (SSI), and drug assistance programs. You are advised to consult with a qualified
tax advisor and with social service agencies concerning how receipt of such a payment will affect
you, your spouse and your family's eligibility for public assistance."
(d) The disclosure requirements of this section must be provided only with the document actually
containing the acceleration-of-life-insurance provisions. For example if acceleration-of-life
insurance benefits are provided through a rider to a life policy, the disclosures must only be
provided with the rider, not the policy.
(e) In regards to certificates of coverage for group life insurance policies, the disclosures required
by this section must be provided only to certificate holders obtaining group life coverage on or
after the effective date of this subchapter.

				
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