Section 70. Policies and benefits

A. An advertisement shall not use as the name or title of a policy any phrase which omits the words "life insurance" or "annuity," as appropriate, unless accompanied by other language clearly indicating it is life insurance or an annuity.

B. An advertisement shall clearly and prominently describe the true nature or type of policy advertised.

C. An advertisement shall not state, represent or imply that a prospective or current policyholder will receive the right to benefits that are not a part of the policy itself, or made an effective part of the policy by rider or other instrument approved by and on file with the commission.

D. An advertisement shall not represent, directly or indirectly, that a policy may be sold only to certain persons because of their occupation, association, age, sex, or other condition unless it can be shown that the policy advertised is, in fact, sold only to those persons.

E. An advertisement shall not contain statements indicating that because a prospect has agreed to furnish names of potential purchasers, he is entitled to any specific benefits not available to all policyholders generally.

F. An advertisement shall not represent an increasing or other term insurance provision as a return of premium, a cash surrender value, or anything other than a guaranteed insurance benefit for which a premium is charged.

G. An advertisement shall not state or imply that a policy contains features or benefits that are not found in other policies, unless that is true.

H. In any advertisement, the basic death benefit shall be shown as a single amount, not arbitrarily or deceptively split into two or more parts, implying that there is a relationship between some part of a premium or other policy amount and some part of the death benefit, unless that is the fact, and provided the relationship is not for the purpose of, or may likely have the effect of, misleading or deceiving.

I. If nonforfeiture values are shown in any advertisement, the values must be shown either for the entire amount of the basic death benefit or for each $1,000 of initial death benefit.

J. An advertisement shall not state or imply that on the death of an insured, the beneficiary will receive, or should have received, the cash value of a policy in addition to the face amount, unless the policy so provides.

K. An advertisement shall not state or imply in any way that interest charged on a policy loan or the reduction of death benefits by the amount of outstanding policy loans is unfair, inequitable, or in any manner an incorrect or improper practice.

L. The use of savings "passbooks" and similar misleading techniques to show a policy's cash value is prohibited.

M. Analogies between a policy's cash values and savings accounts or other investments, and between premium payments and contributions to savings accounts or other investments shall be complete and accurate. The analogy shall make clear that the representation is an analogy only and that cash values and premium payments are not identical to a savings account or other investments and contributions.

N. An advertisment shall not represent a pure endowment benefit as earnings on premiums paid or represent that a pure endowment benefit in a policy is other than a guaranteed benefit for which a specific part or all of the premium is being paid by the policyholder. For the purpose of this section, coupons or other devices for periodic payment of endowment benefits are included within the phrase "a pure endowment benefit."

Historical Notes

Derived from Volume 27, Issue 14, eff. July 1, 2011.

Statutory Authority

§§ 12.1-13 and 38.2-223 of the Code of Virginia.