Rule 20:06:10:09 Testimonials or endorsements by third parties.
:09. Testimonials or
endorsements by third parties. Requirements for
testimonials or endorsements by third parties are as follows:
(1) Testimonials used in
advertisements or solicitations 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 in it;
(2) If the person making a
testimonial, an endorsement, or an appraisal has a financial interest in the
insurer or a related entity as a stockholder, director, officer, employee, or
otherwise, that fact must be disclosed in the advertisement or solicitation. If
a person is compensated for making a testimonial, endorsement, or appraisal, that
fact must be disclosed in the advertisement or solicitation by language
substantially as follows: "Paid Endorsement." This section does not
require disclosure of union scale wages required by union rules if the payment
is actually made at the union scale rate for television or radio performances.
The payment of substantial amounts,
directly or indirectly, for "travel and entertainment" for
filming or recording of television or radio advertisements remove the filming
or recording from the category of an unsolicited testimonial and require
disclosure of the compensation;
(3) An advertisement or
solicitation may 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 organizations unless that is the fact and unless any
proprietary relationship between an organization and the insurer is disclosed.
If the entity making the endorsement or testimonial has been formed by the
insurer or is owned or controlled by the insurer or the person or persons who
own or control the insurer, that fact must be disclosed in the advertisement or
(4) If a testimonial refers
to benefits received under a policy, the specific claim data, including claim
number, date of loss, and other pertinent information must be retained by the
insurer for inspection for five years.
4 SDR 6, effective August 9, 1977; 12 SDR 151, 12 SDR 155, effective July 1,
1986; 15 SDR 143, effective March 29, 1989; 27 SDR 54, effective December 4,
2000; 38 SDR 116, effective January 10, 2012.
Authority: SDCL 58-33A-7.
Implemented: SDCL 58-1-26, 58-3-1, 58-33-5, 58-33-6, 58-33-7, 58-33A-8, 58-33A-10.
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