Kansas Administrative
Regulations
Agency 40. Insurance Department
Article 4. Accident and Health Insurance
40-4-23 Accident
and sickness insurance; deceptive practices; requirements; prohibitions.
(a) Paragraphs
(3), (4) and (5) of subsection (b) shall not apply to credit accident and
sickness insurance, group accident and sickness insurance, nor to medicare
supplement policies as defined in K.A.R. 40-4-35.
(b) Each authorized issuer of accident and sickness insurance contracts
and each authorized insurance agent who solicits, negotiates or procures such
insurance within this state shall meet the following requirements:
(1) Each agent shall, at the beginning of any solicitation, inform the
prospective purchaser that he or she is acting as an insurance agent.
(2) The prospective purchaser shall be informed of the insurer's full
name.
(3) The agent or insurer shall provide to the prospective purchaser
before or with the delivery of a contract, a dated outline of coverage
describing the elements of the contract including:
(A) The name and signature of the insurance agent, or if no agent is
involved, the name of the employee of the insurer who assumes responsibility
for completing the outline;
(B) the full name of the company writing the accident and sickness
insurance;
(C) a statement identifying the applicable category or categories of
coverage provided by the policy or contract and any supplemental riders as
prescribed in K.S.A. 40-2218(a);
(D) a statement disclosing any provision in the policy or any
supplemental riders which will reduce the benefits payable while the policy and
riders are maintained in force on a premium-paying basis;
(E) the premiums for the accident and sickness insurance policy and a
separate listing of the premiums for each optional or supplemental benefit
provided by the contract;
(F) a statement disclosing the provisions of the policy and any
supplemental riders relating to renewability, cancelability and termination and
any modification of benefits, losses covered or premiums because of age or for
other reasons. The description shall be written in a manner which will not
minimize or render obscure the qualifying conditions;
(G) a statement disclosing those exceptions, reductions and limitations
affecting the basic provisions of the policy and any supplemental riders;
(H) a statement disclosing the existence of any waiting, elimination,
probationary or similar time period between the effective date of the policy
and effective date of coverage under the policy and any supplemental riders, or
a period of time between the date that loss occurs and the date the benefits
begin to accrue for the loss;
(I) a statement disclosing the extent to which any loss is not covered
under the policy and any supplemental riders, if the cause of the loss is
traceable to a condition existing before the effective date of the policy or
rider;
(J) a statement disclosing all the principal benefits provided by the
policy or contract and any supplemental riders;
(K) a statement that the outline of coverage is a summary of the policy
or contract and any supplemental riders issued or applied for and that the
policy or contract and any supplemental riders should be consulted to determine
governing contractual provisions; and
(L) if the policy or contract and any supplemental riders do not provide
the standards for benefits promulgated by the commissioner, as provided in
K.A.R. 40-4-24 through 40-4-33, a statement which clearly sets forth the policy
restrictions.
(4) The outline of coverage shall accompany the policy. Alternatively,
the outline may be delivered to the prospective purchaser at the time
application is made, if an acknowledgment of receipt or certificate of delivery
of the outline is obtained with the application. If an outline of coverage was
delivered at the time of application, and the policy or contract is issued on a
basis which would require revision of the outline, a substitute outline of
coverage properly describing the policy or contract and any supplemental riders
shall accompany the policy or contract and any supplemental riders when it is
delivered. The substitute outline shall state clearly that the policy or
contract and any supplemental riders are not the same as that for which
application was made.
(5) The outline of coverage may consist of a separate written
presentation or the outline may be included in the solicitation material
advertising the policy. All information required to be disclosed shall be set
out prominently in an uninterrupted sequence in one location in the separate,
written presentation or advertising material. Additional material, other than
that required, shall not be inserted between each required disclosure item. The
style, arrangement and overall appearance of the outline of coverage shall not
give any undue prominence to any portion of the text. Each printed portion of
the text of the outline of coverage shall be plainly printed in lightfaced type
of a style in general use. The size of the type shall be uniform and shall not
be less than tenpoint with a lowercase, unspaced alphabet length not less than
120 point.
(c) Unfair or deceptive acts or practices in the selling of the insurance
subject to this regulation shall include:
(1) Making any misrepresentation or false, deceptive or misleading
statement;
(2) using comparisons or analogies or manipulating amounts and numbers in
a way that will mislead the prospective purchaser concerning the cost of the
insurance protection to be provided by the insurance contract, or any other
significant aspect of the contract;
(3) referring to an insurance premium as a deposit, an investment, a
savings, or using other similar phrases when referring to an insurance premium;
and
(4) Recommending to a prospective purchaser the purchase or replacement
of any accident and sickness insurance policy or contract with reasonable
grounds to believe that the recommendation is unsuitable for the applicant on
the basis of any information furnished by the person or otherwise obtained.
(Authorized by K.S.A. 40-103, 40-2404a; implementing K.S.A. 40-2219, 40-2221; effective May 1, 1975; amended Feb. 15, 1977; amended May 1, 1979; amended May 1, 1982; amended May 1, 1986.)