DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES

                             INSURANCE BUREAU

               ADVERTISEMENT OF LIFE INSURANCE AND ANNUITIES


(By authority conferred on the commissioner of insurance by  section  210  of 
Act No. 218 of the Public Acts of 1956, as amended, being  S500.210  of   the 
Michigan Compiled Laws)


R  500.1371   Definitions.
  Rule 1. As used in these rules:
  (a) "Advertisement" means material designed to create  public  interest  in 
life insurance or annuities or in an insurer, or to induce  the   public   to 
purchase, increase, modify, reinstate, or retain a policy,  including  all of 
the following:
  (i)  Printed  and  published   material,    audiovisual    material,    and 
descriptive literature of an insurer used in any of the following:
  (A) Director mail.
  (B) Newspapers.
  (C) Magazines.
  (D) Radio and television scripts.
  (E) Billboards and similar displays.
  (ii) Descriptive literature and sales aids of all  kinds   issued   by   an 
insurer or agent, including, but not limited to, any of the following:
  (A) Circulars.
  (B) Leaflets.
  (C) Booklets.
  (D) Depictions.
  (E) Illustrations.
  (F) Form letters.
  (iii) Prepared sales talks, presentations, and material for  use  by  sales 
personnel and agents.
  "Advertisement" does not include communications or materials used within an 
insurer's own organization and  not  available  for  dissemination   to   the 
public; communications with policyholders other than  material  designed   to 
persuade policyholders to purchase, increase, modify, reinstate, or retain  a 
policy; or a general announcement from a group or  blanket   policyholder  to 
eligible individuals on an employment or membership list that  a   policy  or 
program has been written or arranged.
  (b) "Policy"  means  any  of  the  following  which   provides   for   life 
insurance or annuity benefits:
  (i) A policy.
  (ii) A plan.
  (iii) A certificate.
  (iv) A contract.
  (v) An agreement.
  (vi) A statement of coverage.
  (v) A rider.
  (viii) An endorsement.

  History: 1984 AACS. 


R  500.1375   Form and contents of advertisements.
  Rule 5. (1) Advertisements shall be truthful and not misleading in  fact or 
by implication. The form and content of an advertisement  of  a  policy shall 
be sufficiently complete and clear so  as  to  avoid  deception.  Whether  an 
advertisement is misleading or  deceptive  shall  be  determined   from   the 
overall impression that the advertisement may be   reasonably   expected   to 
create.
  (2) An advertisement shall not use the  terms   "investment,"   "investment 
plan," "expansion plan," "profit," "profits,"  "profit  sharing,"   "interest 
plan," "savings," "savings plan," or other  similar   terms   in   connection 
with a policy in a context or  under  circumstances   or   conditions   which 
mislead a prospective insured to believe that the  prospective   insured   or 
beneficiary will or may receive something other  than  a   policy   or   some 
benefit not available to  other  persons  of  the  same   class   and   equal 
expectation of life.

  History: 1984 AACS. 


R  500.1377   Disclosure requirements.
  Rule 7. (1) The information required to  be  disclosed   by   these   rules 
shall 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.
  (2) An advertisement shall not omit material information  or   use   words, 
phrases, statements, references, or illustrations if such  omission  or  such 
use is misleading or deceptive to purchasers or prospective purchasers  as to 
the nature or extent of   any   policy   benefit   payable,   loss   covered, 
premium payable, or state or federal tax consequences. The  fact   that   the 
policy offered is made available to a prospective  insured   for   inspection 
prior to consummation of the sale, or an  offer  is  made   to   refund   the 
premium if the purchaser is not  satisfied,  does   not   remedy   misleading 
statements.
  (3) If an advertisement uses terms or phrases such  as   "Non-Medical"   or 
"No Physical Examination Required" or uses similar terms or  phrases  and  if 
issue is not guaranteed, such terms or phrases shall be  accompanied   by   a 
further disclosure of equal prominence  and  nearby  to   the   effect   that 
issuance of the policy  will  depend  upon  answers   to   health   questions 
contained in the application, if such is the fact.
  (4) An advertisement shall not use as  the  name  or  title   of   a   life 
insurance policy any  phrase  which  does  not  include   the   words   "life 
insurance," unless accompanied by other language clearly  indicating  it   is 
life insurance.
  (5) An advertisement shall  prominently  describe  the   type   of   policy 
advertised.
  (6) An advertisement of an insurance policy marketed  by  direct   response 
technique shall not state or imply that  because  there  is   no   agent   or 
commission involved there will be cost savings  to  prospective   purchasers, 
unless such is the fact.
  (7) An advertisement for a policy containing graded  or  modified  benefits 
shall prominently display any limitation of benefits. If   the   premium   is 
level and coverage decreases or  increases  with  age   or   duration,   such 
coverage changes shall be prominently disclosed.
  (8)  An  advertisement  for  a  policy  with   non-level   premiums   shall 
prominently describe the premium changes.
  (9) All of the following provisions apply with respect to dividends:
  (a) An advertisement shall not utilize or describe dividends  in  a  manner 
which is misleading.
  (b) An advertisement shall not state or imply that the payment or amount of 
dividends is guaranteed. If dividends are illustrated,  they  shall  be based 
on the insurer's current dividend scale, and the illustration  shall  contain 
a statement to the effect  that  they  are  not  be  construed  as guarantees 
or estimates of dividends to be paid in the future.
  (c) An advertisement shall not state or imply  that  illustrated  dividends 
under a participating policy or pure endowments, or both, will be  or  can be 
sufficient at any future time to  assure,  without  the  further  payment  of 
premiums, the receipt of benefits, such as a paid-up   policy,   unless   the 
advertisement clearly and precisely explains  what   benefits   or   coverage 
would be provided at such time and under what conditions this would occur.
  (d) If level benefit insurance is contingent   upon   dividends   providing 
term insurance  or  paid-up  insurance,  or  both,   any   advertisement   or 
illustration shall disclose that insufficient or not  dividends  will  either 
cause  a  reduction  or  elimination  of  supplemental   coverage   or   that 
additional premium will be required to keep  the   original   death   benefit 
amount in force.
  (10) An advertisement shall not state or imply that  a   purchaser   of   a 
policy will share in or receive a stated  percentage  or   portion   of   the 
earnings on the general account assets of the company.
  (11) An advertisement shall not contain statistical information relating to 
any insurer or policy unless it accurately reflects recent and relevant facts 
and is sufficiently complete and clear so as not to  be  misleading.
The source of any such  statistics  used  in  an   advertisement   shall   be 
identified therein.
  (12) All of the following provisions apply with  respect  to  introductory, 
initial, or special offers and enrollment periods:
  (a) An advertisement of an individual  policy  or   combination   of   such 
policies shall not state or imply that such policy or  combination  of   such 
policies is an introductory, initial, or special offer,  or  that  applicants 
will receive substantial advantages not available at a later  date,  or  that 
the offer is available only to a specified group   of   individuals,   unless 
such is the fact. An advertisement shall not describe an enrollment period as 
"special" or "limited" or use similar words or phrases in describing it  when 
the insurer uses  successive  enrollment  periods  as  its  usual  method  of 
marketing its policies.
  (b) An advertisement shall not state  or  imply  that   only   a   specific 
number of policies will  be  sold,  or  that  a  time  is   fixed   for   the 
discontinuance of the sale of the particular policy  advertised,  because  of 
special advantages available in the policy, unless such is the fact.
  (c) An enrollment period during which a particular insurance policy  may be 
purchased on an individual basis shall not be  advertised  within  this state 
unless there has been a lapse of not less than 3 months between  the close of 
the immediately preceding enrollment period for the   same   policy  and  the 
opening of the new enrollment period,  but  not  more  than   twice   in  any 
calendar year. The advertisement  shall  specify  the  date  by   which   the 
applicant shall mail the application, which shall be not less  10  days   and 
not more than 40 days from the date on which  such   enrollment   period   is 
advertised for the first time. This rule applies to all advertising by any  1 
insurer, which includes all the  affiliated   companies   of   a   group   of 
insurance companies under common management or control. This  rule  does  not 
apply to the  use  of  a  termination  or  cutoff  date   beyond   which   an 
individual application for a guaranteed issue policy will not be  accepted by 
an insurer in those instances where the  application  has  been  set  to  the 
applicant in response to the applicant's request. It is also  inapplicable to 
solicitation by the group policyholder  of  employees   or   members   of   a 
particular group or association which otherwise would   be   eligible   under 
specific provisions of Act No. 218 of the Public Acts of  1956,  as  amended, 
being S500.100 et seq. of the Michigan Compiled Laws, for group insurance.
In cases where an insurance product is marketed on a direct  mail  basis   to 
prospective  insureds  by  reason  of  some  common   relationship   with   a 
sponsoring organization, this rule shall be  applied   separately   to   each 
sponsoring organization.
  (13) An advertisement of a particular policy shall not   state   or   imply 
that prospective insureds shall be or become members of a  special  class  or 
group  and  as  such  enjoy  special  rates,   dividends,   or   underwriting 
privileges, unless such is the fact.
  (14) An advertisement shall not make unfair or  incomplete  comparisons  of 
policies,  benefits,  dividends,  or   rates   of    other    insurers.    An 
advertisement shall not falsely or unfairly  describe   other   insurers   or 
their policies, services, or methods of marketing.
  (15)  For  individual  deferred  annuity  products   or   deposit    funds, 
excluding  variable  annuities  and  investment  annuities,   all   of    the 
following provisions shall apply:
  (a) Any illustrations or statements containing or   based   upon   interest 
rates higher than the guaranteed accumulation  interest   rates   shall   set 
forth  with  equal  prominence  comparable   illustrations   or    statements 
containing or based upon the guaranteed accumulation  interest  rates.   Such 
higher interest rates shall not be  greater  than   those   currently   being 
credited by the company  unless  such  higher  rates   have   been   publicly 
declared by the company with an effective date for  new   issues   not   more 
than 3 months subsequent to the date  of   declaration.   Any   illustrations 
shall be based on gross premiums.
  (b) If an advertisement illustrates or  states   premiums,   net   interest 
rates, or accumulative values, the actual relationship between  the  net  and 
gross premium shall be disclosed in close proximity thereto  and  with  equal 
prominence, describing the first year and renewal  charges,  including,   but 
not limited to, expenses and annual contract,   collection,   and   mortality 
charges.
  (c) If any contract does not provide a cash value or  return   of   premium 
benefit due to surrender or death prior to the commencement  of  payment   of 
any annuity  benefit,  any  illustration  or   statements   concerning   such 
contracts shall prominently state that these benefits  are  not  provided.
Return of premium or cash value shall  not  be  referred  to   as   a   death 
benefit.

  History:  1984 AACS; 1997 AACS.


R  500.1379   Identification of insurer and policy.
  Rule 9. (1) The name of the insurer shall be clearly  identified.  If   any 
specific individual policy is advertised, it shall be  identified  either  by 
form number or other appropriate description. An  advertisement   shall   not 
use a trade name, an insurance  group  designation,  name   of   the   parent 
company of the insurer, name of a  particular  division   of   the   insurer, 
service mark,  slogan,  symbol,  or  other  device   or   reference   without 
disclosing the name of the insurer, in equal or greater  prominence  and   in 
close proximity thereto, if  the  advertisement  would   be   misleading   or 
deceptive as to the true identity of the insurer or  create  the   impression 
that a company other than the  insurer  has  any   responsibility   for   the 
financial obligation under a policy.
  (2) An advertisement or related material shall not use  any  combination of 
 words,  symbols,  or   physical   materials   which   by   their    content, 
phraseology, shape, color, or other characteristics are so   similar   to   a 
combination  of  words,  symbols,  or  physical  materials    used    by    a 
governmental program or agency or otherwise appear to be of  such  a   nature 
that they tend to mislead prospective insureds  into   believing   that   the 
solicitation is in some manner connected with such  governmental  program  or 
agency.

  History: 1984 AACS. 


R  500.1381   Advertising  beyond  limits    of    licensing    jurisdiction; 
recommendation,  endorsement,  or   rating   of   insurer   by   governmental 
entity.
  Rule 11. (1) An advertisement which is intended  to  be   seen   or   heard 
beyond the limits of the jurisdiction in which  the   insurer   is   licensed 
shall not imply licensing beyond such limits.
  (2) An advertisement may state that an insurer is licensed  in  the   state 
where the advertisement appears, if it does not exaggerate   such   fact   or 
suggest or imply that competing insurers may not be so licensed.
  (3) An advertisement shall not state or create the  impression   that   the 
insurer, its financial condition or status, the payment of  its  claims,   or 
the merits, desirability, or advisability of its policy forms  or  kinds   of 
plans of insurance are recommended or endorsed by  any  governmental  entity, 
unless such is the fact. The nature  and  extent   of   any   recommendation, 
endorsement, or rating shall be fully explained.

  History: 1984 AACS. 


R  500.1383   False and misleading statements; recommendation  or  rating  by 
commercial rating organization.
  Rule 13. An advertisement shall not  contain   statements,   pictures,   or 
illustrations which are false or misleading, in fact   or   by   implication, 
with respect to the assets, liabilities,  insurance   in   force,   corporate 
structure, financial condition, age, or relative position of  the  insurer in 
 the  insurance  business.   An   advertisement   shall   not    contain    a 
recommendation or rating by any commercial rating  organization   unless   it 
clearly defines the scope and extent of the recommendation or rating.

  History: 1984 AACS. 


R  500.1385   Advertisements  disseminated  in    state;    maintenance    of 
specimen copy; filing with the commissioner; certificate of  compliance.
  Rule 15. (1) An insurer shall maintain at its home or  principal  office  a 
complete file  containing  a  specimen  copy  of   printed,   published,   or 
prepared advertisements of its policies  hereafter   disseminated   in   this 
state, with a notation indicating the manner and   extent   of   distribution 
and the form number of any policy advertised. Such file shall  be  subject to 
inspection by  the   commissioner.   All   such   advertisements   shall   be 
maintained in the file for a period of either 4 years or until the  filing of 
the next regular report on  the  examination  of   the   insurer,   whichever 
period is longer.
  (2) An insurer subject to the provisions of these rules  shall  file   with 
the commissioner, with its annual statement, a  certificate   of   compliance 
executed by an authorized officer of the insurer wherein it  is  stated,   if 
such  is  the  fact,  that  to  the  best  of   the   officer's    knowledge, 
information, and belief, the advertisements which were disseminated by, or on 
behalf of, the insurer in this state  during  the  preceding  statement year, 
or during the portion of such year when these rules were in  effect, compiled 
in all respects with  the  provisions  of  these  rules  and   the  insurance 
laws of this state  as  implemented  and  interpreted  by  these rules.

  History:  1984 AACS; 1997 AACS.


R  500.1387   Conflict with other rules.
  Rule 17. It is not intended that these rules conflict  with  or   supersede 
any rules currently  in  force  or  subsequently  adopted   in   this   state 
governing specific aspects of the sale or replacement of  life  insurance  or 
annuities,  including,  but  not  limited  to,  rules   dealing   with   life 
insurance cost comparison indices, deceptive practices in the  sale  of  life 
insurance, and replacement of life insurance   policies.   Consequently,   no 
disclosure required under  any  such  rules  shall  be  deemed   to   be   an 
advertisement within the meaning of these rules.

  History: 1984 AACS.