SECTION 3.3319. Standards for Marketing

(a) Every issuer marketing Medicare supplement coverage in this state, directly or through its agents, shall establish marketing procedures to ensure that:

(1) any comparison of policies by its agents will be fair and accurate;

(2) excessive insurance is not sold or issued;

(3) all prospective policyholders are advised prior to the time an application is taken, that the basic "core" benefit package is available, including the contents of such basic "core" benefit package;

(4) every reasonable effort and inquiry is made to identify whether a prospective applicant or enrollee for Medicare supplement insurance already has accident and sickness insurance and the types and amounts of any such insurance; and

(5) auditable procedures for verifying compliance with provisions of this section are in place and utilized.

(b) Every issuer marketing Medicare supplement coverage in this state, directly or through its agents, shall ensure that the following notice is prominently displayed by type, stamp, or other appropriate means on the first page of the policy: "Notice to buyer: This policy may not cover all of your medical expenses."

(c) In addition to the practices prohibited in the Insurance Code Chapter 541, the following acts and practices are prohibited in the marketing of Medicare supplement policies or coverages in this state.

(1) Twisting--Knowingly making any misleading representation or incomplete or fraudulent comparison of any insurance policies or insurers for the purpose of inducing, or tending to induce, any person to lapse, forfeit, surrender, terminate, retain, pledge, assign, borrow on, or convert any insurance policy or to take out a policy of insurance with another insurer.

(2) High pressure tactics--Employing any method of marketing having the effect of or tending to induce the purchase of insurance through force, fright, threat, whether explicit or implied, or undue pressure to purchase or recommend the purchase of insurance.

(3) Cold lead advertising--Making use directly or indirectly of any method of marketing which fails to disclose in a conspicuous manner that a purpose of the method of marketing is solicitation of insurance and that contact will be made by an insurance agent or insurance company. This requirement is in addition to other regulations applicable to lead card advertising.

(4) Issuers may utilize additional benefit designations in the marketing of the benefit plans; however, such designations shall be accompanied by a clear statement as to the applicable benefit plan being marketed. Additional benefit designations shall not be deceptive or misleading.

Source Note: The provisions of this §3.3319 adopted to be effective December 1, 1990, 15 TexReg 6594; amended to be effective April 15, 1992, 17 TexReg 2238; amended to be effective January 1, 1997, 21 TexReg 10753; amended to be effective July 6, 2009, 34 TexReg 4532