Section 110E: Standards for disclosure of form, content and advertising of accident and sickness insurance policies; rules and regulations; enforcement procedures and penalties
Section 110E. The commissioner shall make rules and regulations, and may at any time alter, amend, or make interpretations thereof, to establish minimum standards of full and fair disclosure, for the form and content of policies of accident and sickness insurance which provide medical, surgical, or hospital expense benefits, whether on an indemnity, reimbursement, service or prepaid basis, as defined in section one hundred and eight and contracts to subscribers of hospital service corporations subject to section six of chapter one hundred and seventy-six A and contracts to subscribers of medical service corporations subject to section four of chapter one hundred and seventy-six B and contracts to subscribing members of medical service corporations subject to section four of chapter one hundred and seventy-six C and contracts to subscribers of dental service corporations subject to section four of chapter one hundred and seventy-six E. Such rules and regulations may apply to all, any portion or reasonable classifications of such policies or contracts, and shall be made to bring about:
(a) reasonable standardization and simplification of coverages to facilitate understanding and comparisons;
(b) elimination of provisions which may be misleading or unreasonably confusing, in connection either with the purchase of such insurance or with the settlement of claims;
(c) elimination of deceptive practices in connection with the sale of such insurance;
(d) elimination of provisions which may be contrary to the health care needs of the public;
(e) elimination of coverages which are so limited in scope as to be of no substantial economic value to the holders thereof.
When a rule or regulation has been adopted pursuant to this section and an individual policy of accident and sickness insurance form regulated by section one hundred and eight is not in compliance with such rule or regulation, such noncompliance shall be grounds for a withdrawal of approval of such policy form and the commissioner may withdraw his approval of any such form upon written notice to the insurer specifying his reasons therefor.
The commissioner shall make, and may at any time alter or amend, reasonable rules and regulations, and interpretations thereof, concerning advertising of insurance policies described in sections one hundred and eight or one hundred and ten of this chapter so as to assure that such advertising is truthful and not misleading, in fact or in implication. Such regulations shall contain, but not be limited to, the following principles:
(1) Words, phrases or illustrations shall not be used in a manner which misleads or has the capacity and tendency to deceive as to the extent of any policy benefit payable, loss covered or premium payable. An advertisement relating to any policy benefit payable, loss covered or premium payable shall be sufficiently complete and clear as to avoid deception or the capacity and tendency to deceive.
(2) When an advertisement refers to any dollar amount, period of time for which any benefit is payable, cost of policy, or specific policy benefit or the loss for which such benefit is payable, it shall also disclose those exceptions, reductions and limitations affecting the basic provisions of the policy without which the advertisement would have the capacity and tendency to mislead or deceive.
(3) An advertisement which refers to the right to renew, cancel or terminate a policy, or which refers to a policy benefit, or which states or illustrates time or age in connection with eligibility of applicants or the right to continue a policy, shall disclose the provisions relating to the right to renew, cancel and terminate and any modification of benefits, losses covered or premiums because of age or for other reasons, in such manner as not to minimize or render obscure the qualifying conditions.
(4) All information required to be disclosed shall be set out conspicuously and in close conjunction with the statements to which such information relates or under appropriate captions of such prominence that it shall not be minimized, rendered obscure or presented in an ambiguous fashion or intermingled with the context of the advertisements so as to be confusing or misleading.
(5) Testimonials used in advertisements must be genuine, represent the current opinion of the author, be applicable to the policy advertised and be accurately reproduced. The insurer, in using a testimonial, makes as its own all of the statements contained therein.
(6) An advertisement relating to the dollar amounts of claims paid, the number of persons insured, or similar statistical information relating to any insurer or policy shall not be used unless it accurately reflects all of the relevant facts. Such an advertisement shall not imply that such statistics are derived from the policy advertised unless such is the fact.
(7) When a choice of the amount of benefits is referred to, an advertisement shall disclose that the amount of benefits provided depends upon the plan selected and that the premium will vary with the amount of the benefits.
(8) When an advertisement refers to various benefits which may be contained in two or more policies, other than group master policies, the advertisement shall disclose that such benefits are provided only through a combination of such policies.
(9) An advertisement shall not directly or indirectly make unfair or incomplete comparisons of policies or benefits or otherwise falsely disparage competitors, their policies, services or business methods.
(10) The identity of the insurer shall be made clear in all of its advertisements. An advertisement shall not use a trade name, service mark, slogan, symbol or other device which has the capacity and tendency to mislead or deceive as to the true identity of the insurer.
(11) An advertisement of a particular policy shall not state or imply that prospective policyholders become group or quasi-group members and, as such, enjoy special rates or underwriting privileges, unless such is the fact.
(12) An advertisement shall not state or imply that a particular policy or combination of policies is an introductory, initial or special offer and that the applicant will receive advantages by accepting the offer, unless such is the fact.
(13) An advertisement shall not state or imply that an insurer or a policy has been approved or an insurer's financial condition has been examined and found to be satisfactory by a governmental agency, whether or not such is the fact.
(14) An advertisement shall not state or imply that an insurer or a policy has been approved or endorsed by an individual, group of individuals, society, association or other organization, unless such is the fact.
(15) An advertisement shall not contain untrue statements with respect to the time within which claims are paid or statements which imply that claim settlements will be liberal or generous beyond the terms of the policy.
(16) An advertisement shall not contain statements which are untrue in fact or by implication misleading with respect to the insurer's assets, corporate structure, financial standing, age or relative position in the insurance business.
The commissioner may order any insurer or agent or broker violating such regulations as he makes pursuant to this section to cease and desist from such advertising and to put all policyholders or applicants on notice of the violation in such a manner as he deems appropriate and, in the case of repeated violations, he may suspend or revoke the license of any such persons and impose reasonable conditions for its reinstatement.
Rules and regulations made pursuant to the authority of this section shall be adopted in accordance with the procedures of section two of chapter thirty A and shall be subject to review as set forth therein.
An insurer not authorized to do business in the commonwealth shall be subject to the requirements of this section and may be made a defendant in accordance with the provisions of chapter one hundred and seventy-five B in an action at law by any person damaged by its failure to abide by the current regulations. The measure of damages in such an action shall be the amount the person damaged could reasonably have anticipated he would have recovered had the advertising or the policy provisions not been contrary to the regulations plus reasonable costs and attorney fees. Any such action may be brought by the representative of a deceased person.