Accident And Health Insurance Industry
16 CFR Part 29 · Trade practice rules · in the Code of Federal Regulations 1959-1960 (2 annual editions)
Scanned CFR pages, OCR text may contain errors; the linked Library of Congress PDF is the authority. Not legal advice; not affiliated with the FTC. These rules and guides are historical: most were rescinded or replaced, so do not assume any is in force.
Latest edition: Library of Congress, 1960 CFR · Earliest edition: 1959 CFR
Decisions that mention this industry's rules (1)
Text (1960 edition, OCR)
Chapter I—Federal manufacturer of reproduction equipment of the obligations of expressed or implled war- rantles attached to the equipment of his manufacture (e) Inducing or receimng an illegal discrimination in price It 1s an unfair trade practice for any member of the 1n- dustry engaged in commerce m the course of such commerce knowingly to induce or receive a discrimination in price which 1s prohibited by the fore- going provisions of this section (f) Purchases by U S Government— Applicability of Robinson-Patman Anti- discrimination Act to same In an opin- ion submitted to the Secretary of War under date of December 28, 1936, the U S Attorney General advised that the Robinson-Patman Antidiscrimination Act 1s not applicable to Government contracts for supplies” (38 Opinions Attorney General 539 ) PART 29—-ACCIDENT AND HEALTH INSURANCE INDUSTRY Sec 290 Definitions Group I 291 Deception in general 292 Advertlsements of benefits losses cov- ered or premiums payable 293 Disclosure as to exceptions reduc- tions and limitations 294 Disclosure of policy provisions relat- ing to renewability cancellability or termination 295 Method of disclosure of required in- formation 296 Testimonials 297 Deceptive use of statistics 298 Availability of policy or refund of premlums 299 Identification of plan or number of policies 2910 Disparagement 2911 Deceptive use of trade names service marks etc 2912 Deception as to group or quasl- group policles 2913 Deception as to introductory initial or special offers 2914 Misrepresentation as to approval or endorsement of advertisements or policies 2915 Musrepresentation as to payment of claims 2916 Musrepresentation concerning the in- surer AvuTHorITY §§ 290 to 2916 issued under sec 6 38 Stat 721 15U S C 46 Interpret or apply sec 5 38 Stat 719 as amended 15 US OC 45 Source §§ 290 to 2916 appear at 21 F R 4228 June 15 1956 Trade Commission § 291 §290 Definitions (a) ‘Advertisement’ for the purpose of this part, shall mean any of the follow- ing material when used in connection with solicitation of the original purchase of a policy or renewal or reinstatement thereof (1) Any printed and published mate- rial and descriptive literature, state- ments or depictions of an insurer used in newspapers magazines radio and TV scripts or presentations, billboards, and simular displays and (2) Descriptive literature and sales aids of all kinds issued by an msurer for presentation to members of the public, including but not limited to, circulars leafiets, booklets depictions, illustra- tions and form letters, and (3) Prepared sales talks, presenta- tions, and material of all kinds for use by agents and brokers, and representa- tions made by agents and brokers in accordance therewith (b) “Policy” for the purpose of this part, shall include any policy plan, cer- tificate contract agreement statement of coverage rider or endorsement, which provides accident or sickness benefits, or medical surgical, or hospital expense benefits whether on a cash mndemnity rezmbursemeni, or service basis, except when issued 1n connection with another kind of insurance other than hfe and except disability and double undemnity benefits included in life insurance and annuity contracts (c) Insurer” for the purpose of this part shall include any individual cor- poration association partnership re- ciprocal exchange, inter-insurer, Lloyds fraternal] benefit society and any other legal entity, engaged in the advertise- ment of a policy as defined 1n this section (d) Agents and brokers This part shall also apply to agents and brokers to the extent that they are responsible for the advertisement of any policy Group I § 2912 Deception in general It 1s an unfair trade practice for an insurer to use 01 cause to be used any advertisement which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers Nore Words or phrases the meaning of which is clear only by implication or by Page 115 § 292 familiarity with insurance terminology are subject to this section § 292 Advertisements of benefits, losses covered, or premiums payable It 1s an unfair trade practice for an 1n- surer to use, or cause to be used, in any advertisement, words, phrases, or Wus- trations which muslead or have the capacity and tendency or effect of mis- leading or deceiving purchasers or pro- spective purchasers with respect to any policy benefit or benefits loss or losses covered, or premium or premiums pay- able (a) It 1s an unfair trade practice for an insurer to use, or cause to be used, in any advertiseinent words or phrases such as “all,” ‘full’ “complete’ ‘com- prehensive” “unlimited,” ‘This policy will pay your hospital and surgical bills, “This policy will replace your income,’ or words or plirases of simular import in connection with losses covered or ben- efits which are subject to exceptions reductions or limitations unless such exceptions reductions or limitations are disclosed 1n accordance with the require- ments of §§ 293 and 295 (b) It 1s an unfair trade practice for an insurer to use or cause to be used in any advertisement such words or phrases as up to,’ “as high as, etc, In connec- tion with dollar amounts payable for medical hospital, surgical or other ex- penses or for loss of income, unless full indemnification 1s provided in all cases up to sucli amounts for expenses actually incurred or income actually lost by the policyholder, or there is full disclosure, in accordance with § 29 5, of the schedule of payments for specified expenses or loss of income for which the policy pro- vides and there 1s also a disclosure, in accordance with § 29 5, of such other ex- ceptions, reductions, or limitations as may be required by § 29 3 (c) It 1s an unfair trade practice for an insurer to use or cause to be used any advertisement 1n which a policy covering only one disease or a hist of specified diseases 1s described in such a manner as to imply coverage beyond the terms of the policy, or in which synony- mous words or terins are used to refer to any disease or physical condition so as to imply broader coverage than 1s the ac (d) It 1s an unfair trade practice for an insurer to use or cause to be used, any advertisement in which representation is made as to the benefits of a policy Page 116 Title 16~——Commercial Practices which pays varying amounts for the saine loss occurring under different con- ditions or which pays benefits only when a loss occurs under certain conditions without disclosing the hmited conditions in accordance with the requirements of §295 (e) It is an unfair trade practice for an insurer to use, or cause to be used, in any advertiseinent phrases such as “This policy pays $1,800 for hospital room and board expenses without disclosure of the maximum daily benefit and the max- imum time limit for such hospital room and board expenses and without disclo- sure of any other exceptions, reductions, or limitations in accordance with the re- quirements of §§ 293 and 295 (f) It 1s an unfair trade practice for an insurer to use, or cause to be used, any advertisement wluch represents, directly or indirectly, that a policy provides for the payinent of certain benefits in addi- tion to other benefits when such is not the fact $293 Dhusclosure as to exceptions, re- ductrons, and limitations (a) It 1s an unfair trade practice for an insurer to use or cause to be used any advertisement which refers to any dollar amount period of time for which any benefit 1s payable cost of policy or specific policy benefit or benefits or the loss or losses for which such benefit or benefits are payable without disclosing in accordance with the requirements of §295 the exceptions reductions, and limitations relating thereto without which the advertisement would have the capacity and tendency or effect of mis- leading or deceiving purcliasers or pro- spective purchasers Note 1 The term ‘exception shall mean any provision in a policy whereby coverage for a specified hazard is entirely eliminated It is a statement of a risk not assumed under the policy Notre 2 The term reduction’ shall mean any provision which reduces the amount of the benefit a risk of loss is assumed but payment upon the occurrence of such loss is limited to some amount or period less than would be otherwise payable had such reduc- tion clause not been used Note 3 The term lmitation shall mean any provision which restricts the duration or extent of coverage losses covered or bene- fits payable under the policy other than an exception or a reduction (b) It 1s an unfair trade practice for an insurer to use or cause to be used, any advertisement covered by this section Chapter |—Federal when by the terms of the policy adver- tised, there 1s a time period between the effective date of the policy and the effec- tive date of coverage under the policy, or a time period between the date a loss occurs and the date benefits begin to accrue for such loss without disclosing the same in accordance with the require- ments of § 295 (c) It is an unfair trade practice for an imsurer to use or cause to be used any advertisement covered by paragraph (a) of this section without disclosing, in accordance with the requirements of § 29 5, the extent to which any loss 1s not covered 1f the cause of such loss 1s trace~ able to a condition existing prior to the effective date of the policy (da) It is an unfair trade practice for an insurer to use or cause to be used any advertisement representing or 1m- plying— (1) That the condition of the in- sured s health at the time of issuance of the policy will not be considered by the insurer in determining its liability there- under, or (2) That the insurer will not, as a claims practice, require proof of good health of the insured at the time of the issuance of the policy when such 1s not the fact § 294 Disclosure of policy provisions relating to renewability, cancellabil- ity, or termination It 1s an unfair trade practice for an msurer to use or cause to be used, any advertisement which refers directly or by umplication to renewability cancel- lability or termination of a policy or which contains a statement or illustra- tion of time or age in connection with benefit or benefits payable loss or losses, eligibility of apphcants, or continuation of a policy unless there 1s disclosure in accordance with § 295 of the provisions relating to renewability, canceliability and termination, and to modification of benefits, losses covered or premiums be- cause of age or for other reasons § 295 Method of disclosure of requred information It 1s an unfair trade practice for an msurer to fail to disclose In any adver- tisement the information required by the rules in this part conspicuously and prominently, and in suffictently close conjunction with the statement or rep- resentation to which such required in- Trade Commission §$ 299 formation relates as will relieve the representation of deception or the ca- pacity to deceive § 296 Testimonials It 18 an unfair trade practice for an insurer to use or cause to be used, any advertisement contamimg a testimonial unless such testimonial 1s genuine accu- rately describes the facts, represents the current opinion of the author 1s appli- cable to the policy advertised and 1s accurately reproduced Nore The insurer in using a testimonial in an advertisement makes as its own all of the statements contained therein and the advertisements including such statements are subject to all of the provisions of the Tules in this part § 297 Deceptive use of statistics It 1s an unfair trade practice for an insurer to use or cause to be used any advertisement in which representations are made as to dollar amounts of claims paid the number of persons insured, or other statistical information relating to any insurer or policy unless 1t accurately refiects all of the relevant facts and does not imply that such statistics are derived from the policy advertised unless such 1s the fact §298 Availabilty of policy or refund of premiums It 1s an unfair trade practice for an insurer to use or cause to be used any advertisement which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective pur- chasers even though the policy adver- tased 1s made available to the insured prior to the consummation of the sale or an offer 1s made of a premium refund §299 Identification of plan or number of pobcies. (a) It 1s an unfalr trade practice for an insurer to use, or cause to be used, any advertisement in which a choice of the amount of benefits 1s offered without disclosing that the amount of benefits provided depends upon the plan selected and that the premium will vary with the amount of the benefits (b) It is an unfair trade practice for an insurer to use or cause to be used, any advertisement which refers to vari- ous benefits which may be contained in two or more policies, other than group master policies, without disclosing that such benefits are provided only through a combination of such policies Page 117 § 2910 § 2910 Dusparagement It 1s an unfair trade practice for an insurer to use, or cause to be used, any advertisement which directly or indi- rectly falsely disparages competitors, their policies, services, or business methods § 2911 Deceptive use of trade names, service marks, etc It 1s an unfair trade practice for an insurer to use or cause to be used, in any advertisement a trade name _ service mark slogan symbol or other device which has the capacity and tendency or effect of misleading or deceiving pur- chasers or prospective purchasers as to the true identity of the msurer or its relation with public or other private institutions §2912 Deception as to “group” or “quasi-group” policies It 1s an unfair trade practice for an insurer to use or cause to be used any advertisement in which a representa- tion 1s made directly or by implication that prospective policy holders become group or quasi-group members and as such enjoy special rates or privileges ordinarily associated with group insur- ance as recognized 1n the industry, unless such 1s the fact § 2913 Deception as to introductory, mutial, or special] offers It 1s an unfair trade practice for an insurer to use, or cause to be used any advertisement in which representation 1s made directly or by implication that a particular policy or combination of poli- cles 1s an introductory, initial or special offer and that applicants will receive advantages not available at a later date unless such 1s the fact § 2914 Miusrepresentation as to ap- proval or endorsement of advertise ments or policies It 1s an unfair trade practice for an insurer to use or cause to be used any advertisement 1n which a representation is made directly or by imphcation (a) That an insurer, or any policy or advertisement thereof has been ap- proved by any governmental agency or department, unless such 1s the fact, (b) That an insurer, or a policy or advertisement thereof, has been ap- proved or endorsed by any individual Page 778 Title 16—Commercial Practices group of individuals, society, association, or other organization, unless such is the fact § 2915 Misrepresentation as to pay- ment of claims It is an unfair trade practice for an insurer to use, or cause to be used any advertisement 1n which a representation ls made, directly or by implication which has the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to (a) The time limit within which claims are paid, (b) The dollar amounts of claims paid or the number of claims paid under a particular policy (c) The hberahty and generosity be- yond the terms of the policy in settlement of claims § 2916 Misrepresentation the insurer It is an unfair trade practice for an insurer to use or cause to be used any advertisement which directly or by implication has the capacity and tend- ency or effect of misleading or deceiving purchasers or prospective purchasers with respect to the insurers assets, cor- porate structure financial standing age, or relative position in the msurance business concerning PART 30—PLASTICS HOUSEWARES INDUSTRY Sec 300 Definitions Group I 801 Misrepresentation and deception in general 802 Misrepresenting products as conform- ing to standard 303 Misuse of terms ciose-outs discon- tinued lines special bargains ete 304 Substitution of products 805 Deceptive use and imitation of trade or corporate names trade-marks ete 306 Deceptive invoicing 807 Fictitious prices price lists etc 308 Guarantees warranties etc 309 Use of lottery schemes etc 8010 Prohibited forms of trade restraints (unlawful price fixing ete ) 3011 Prohibited saies below cost 3012 Prohibited discrimination 3013 Lifting of stocks 3014 Defamation of competitors or false disparagement of their products