Rule 20:06:10:06 Exceptions, reductions, and limitations.
reductions, and limitations. The exceptions, reductions, and limitations
(1) When an advertisement
or solicitation refers to either a dollar amount, or a period of time for which
any benefit is payable, or the cost of the 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
(2) If a policy contains a
waiting, elimination, probationary, or similar time period between the
effective date of the policy and the effective 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, an advertisement or solicitation which is
subject to the requirements of § 20:06:10:06 shall disclose the existence of
(3) An advertisement or
solicitation may not use the words "only", "just",
"merely", "minimum" or similar words or phrases to describe
the applicability of any exceptions and reductions, such as: "This policy
is subject to the following minimum exceptions and reductions";
(4) A solicitation may not
contain descriptions of a policy limitation, exception, or reduction worded in
a positive manner to imply that it is a benefit, such as describing a waiting
period as a "benefit builder" or stating "even preexisting
conditions are covered after two years." Words and phrases used in a
solicitation to describe such policy limitations, exceptions, and reductions
must fairly and accurately describe the negative features of such limitations,
exceptions, and reductions of the policy offered.
4 SDR 6, effective August 9, 1977; 12 SDR 151, 12 SDR 155, effective July 1,
1986; 27 SDR 54, effective December 4, 2000; 38 SDR 116, effective January 10,
Authority: SDCL 58-33A-7.
Implemented: SDCL 58-33-5, 58-33-6, 58-33-7, 58-33A-8, 58-33A-10.
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