Rule 20:06:21:33 Standards for marketing -- Associations.
20:06:21:33. Standards for marketing -- Associations. If an association, as defined in
SDCL 58-17B-2(4)(c), endorses or sells long-term care insurance, the primary responsibility of the association regarding the obligations set forth in this section is to educate its members concerning long-term care issues in general so that its members can make informed decisions. Associations shall provide objective information regarding long-term care insurance policies or certificates endorsed or sold by it to ensure that members of the association receive a balanced and complete explanation of the features in the policies or certificates that are being endorsed or sold. The obligations are as follows:
(1) The insurer
shall file with the division the following material:
(a) The policy
corresponding outline of coverage; and
advertisements requested by the insurance division.
(2) The association
shall disclose the following in any long-term care insurance solicitation:
specific nature and amount of the compensation arrangements, including all
fees, commissions, administrative fees, and other forms of financial support,
that the association receives from endorsement or sale of the policy or
certificate to its members; and
(b) A brief
description of the process under which such policies and the insurer issuing
such policies were selected;
(3) If the
association and the insurer have interlocking directorates or trustee
arrangements, the association shall disclose that fact to its members;
(4) The board of
directors of an association selling or endorsing long-term care insurance
policies or certificates shall review and approve the insurance policies as
well as the compensation arrangements made with the insurer;
(5) At the time of
the association's decision to endorse, the association shall engage the
services of a person with expertise in long-term care insurance who is not
affiliated with the insurer to conduct an examination of the policies, including
benefits, features, and rates, and shall update the examination thereafter if
material change occurs;
(6) The association
shall actively monitor the marketing efforts of the insurer and its agents;
(7) The association
shall review and approve all marketing materials or other insurance
communications used to promote sales or sent to members regarding the policies
A group long-term care
insurance policy or certificate may not be issued to an association unless the
insurer files with the division the information required in this section. The
insurer may not issue a long-term care policy or certificate to an association
or continue to market such a policy or certificate unless the insurer certifies
annually that the association has complied with the requirements in this
Failure to comply with the
filing and certification requirements of this section constitutes an unfair
trade practice within the meaning of SDCL 58-33-38.
Source: 22 SDR 97,
effective December 18, 1995.
General Authority: SDCL 58-17B-4.
Law Implemented: SDCL 58-17B-2(4)(c).
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