The Office of General Counsel issued the following opinion on February 25, 2003 representing the position of the New York State Insurance Department. Must an advertisement for accident and health
insurance that includes statistics provide the source of those statistics? Yes. Pursuant to N.Y. Comp. Codes R. & Regs. tit. 11, § 215.9 (1995) (Regulation 34) if the advertisement includes statistics, it must provide the source of those statistics. Mr. A stated that ABC is a not for profit organization that currently represents five professional associations with a collective membership of well over 3200 insurance and financial service
professionals and almost 300 business offices throughout the major metropolitan area. One of ABCs members would like to run a long term care advertisement in a local newspaper. The advertisement will quote certain long term care statistics (i.e. approx. annual nursing home costs, the percentage of seniors who will require some form of long term care). Mr. A would like to know whether ABCs member must include the source of these statistics in the advertisement or whether, in the interests
of keeping advertisement costs down, the member can omit the information from the advertisement (if in fact the member is using reliable sources and can document same). Pursuant to N.Y. Ins. Laaw § 3217 (McKinney 2000), the Superintendent promulgated N.Y. Comp. Codes R. & Regs. tit. 11, Part 215 (1995) (Regulation 34), which governs the advertisements of accident and health insurance. 1 Its stated purpose is to assure the truthful and adequate disclosure of all
material and relevant information in the advertising of accident and health insurance. Section 215.9(c), in regard to the use of statistics in accident and health insurance advertisements, requires that the source of any statistics used in an advertisement must be identified in the advertisement. Accordingly, if the advertisement includes statistics it must provide the source of those statistics. For further information you may contact Senior Attorney Pascale Joasil at the New York City
Office. 1 Please note that the Department considers long term care-type insurance policies to be a form of accident and health insurance. See N.Y. Ins. Law § 1117 (McKinney 2000) and N.Y. Comp. Codes R. & Regs. tit. 11, Part 52 (2001)(Regulation 62). Life insurance ownershipAccording to the 2022 Insurance Barometer Study, conducted by LIMRA and Life Happens, 106 million adults lack life insurance, or adequate coverage. The need gap, what people have versus what they said they need, is at an all-time high and more than double what it was 12 years ago. The percent of households that say they would be financially secure if the primary wage earner suddenly passed away is 68 percent among life insurance owners, versus 47 percent among those who do not own life insurance. Seventy-eight percent of those who own employer based and individual life insurance said they feel secure. Life/Annuity SectorTraditional life insurance is no longer the primary business of many companies in the life insurance industry. The emphasis has shifted to underwriting annuities, which accounted for 48 percent of life/annuity direct premiums written in 2021. Annuities are contracts that accumulate funds or pay out a fixed or variable income stream. The income stream can be for a set period or over the lifetime of the contract holder or beneficiaries. Accident and health insurance, which includes distinctive products apart from traditional health insurance, account for 26 percent of direct premiums written. In addition to annuities, accident and health, and life insurance products, life insurers may offer financial services such as asset management. Traditional health insurance, which is not included in this section and is not considered a part of the life/annuity sector, is described under Private Health Insurance. Health insurance pays for medical, surgical and hospital services received by the insured, as well as routine and preventive care, usually within a network format. Of the many types of plans available, most include a deductible paid by the insured, and benefits received are tax-free. Accident and health insurance, a product provided by the life/annuity and property/casualty (P/C) sectors, encompasses a variety of specialty products related to health, such as reimbursement for the time a policyholder spent in a hospital or was disabled; short- and long-term disability based on employment; long-term care, and critical or catastrophic illness insurance. Accident and health insurance is not meant to replace health insurance. Life/Annuity Insurance Income Statement, 2017-2021($ billions, end of year)
(1) Calculated from unrounded data. NA=Not applicable. Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. View Archived Tables Premiums by lineDirect Premiums Written By Line, Life/Annuity Insurance, 2019-2021
(1) Before reinsurance transactions. Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. View Archived Tables Credit life insuranceCredit life insurance, a form of decreasing term insurance, protects creditors, such as banks, but the borrower pays the premium. The policy covers the outstanding loan balance if the borrower dies before the loan is repaid. The face value of a policy decreases as the loan balance is paid down until both equal zero. When insured loans are paid off early, the insurer returns the premiums for the remaining term to the policyholder. Credit accident and health, a similar product, provides a monthly income if the borrower becomes disabled. Credit Life, And Credit Accident And Health Insurance Direct Premiums Written, 2010-2019
Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. View Archived Tables InvestmentsLife/annuity and P/C insurers are key players in capital markets, with $9.7 trillion in cash and invested assets in 2020, according to S&P Global Market Intelligence. Life insurance and annuity cash and invested assets totaled $4.7 trillion in 2020, and separate accounts assets and other investments totaled $3.0 trillion. P/C insurer cash and invested assets were $2.0 trillion in 2020. Because life insurance products are long-term, generally in force for 10 years or longer, payments are predictable. Therefore, life/annuity insurers invest primarily in long-term products. In 2020 life insurers, excluding separate accounts, invested 70 percent of their assets in bonds and 3 percent in corporate stocks. Life insurers invested 13 percent of their assets in mortgage loans on real estate that take seven years or longer to mature. Investments, Life/Annuity Insurers, 2019-2021 (1)($ billions, end of year)
(1) Data are net admitted assets of life/annuity insurers. Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. View Archived Tables Top 10 Writers Of Life/Annuity Insurance By Direct Premiums Written, 2021
(1) Includes life insurance, annuity considerations, deposit-type contract funds and other considerations, and accident and health insurance. Before reinsurance transactions. Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. View Archived Tables Top 10 Writers Of Individual Life Insurance By Direct Premiums Written, 2021
(1) Before reinsurance transactions. Based on U.S. total, includes territories. Excludes annuities, accident/health, deposit-type contract funds and other considerations. Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. View Archived Tables Top 10 Writers Of Group Life Insurance By Direct Premiums Written, 2021
(1) Before reinsurance transactions. Based on U.S. total, includes territories. Excludes annuities, accident and health, deposit-type contract funds and other considerations. Source: NAIC data, sourced from S&P Global Market Intelligence, Insurance Information Institute. View Archived Tables Distribution channelsIndependent agents control about half of the individual life insurance market. From 2012 to 2021 independent insurance agents’ share of the personal life insurance market grew from 44 percent to 50 percent. The direct response channel increased slightly over the same ten years, from 5 percent to 6 percent. Affiliated agents have lost some ground, falling from 43 percent to 39 percent, as shown in the chart below. Online salesAccording to LIMRA’s 2021 Insurance Barometer Study, there has been a substantial consumer shift in favor of online life insurance shopping and purchasing because of technological advances and the COVID-19 pandemic. Consumer preference for online life insurance shopping increased 29 percent since 2016 when online purchasing was first added as an option to the study. Other sales channelsWorksite marketing is the selling of voluntary (employee-paid) insurance and financial products at the worksite. The products may be sold individually or in groups, and policyholders usually pay premiums through periodic payroll deductions. Worksite sales of life and health insurance totaled $8.3 billion in 2021, up from $7.46 billion in 2020, according to Eastbridge Consulting Group. Separate AccountsSeparate accounts, funds maintained separately from an insurer's general assets, contribute to the revenue of life/annuity insurers. According to the National Association of Insurance Commissioners, separate accounts were originally established in response to federal securities laws concerning investment-linked variable annuities. Variable annuities operate like mutual funds, with earnings that vary based on the annuities' investments. After evolving rapidly in the past 20 years, separate accounts now support an array of hybrid investment products. (See Life/Annuity Insurance Income Statement chart above). In 2021 separate accounts contributed $41 billion to the overall life/annuity insurance revenue of $945.7 billion. What must be included in all life insurance advertisements?The name of the insurer shall be clearly identified in all advertisements about the insurer or its products, and if any specific individual policy is advertised it shall be identified either by form number or other appropriate description.
Which of the following may not be included in an insurance company advertisement?(3) An advertisement shall not omit information or use words, phrases, statements, references or illustrations if the omission of information or use of words, phrases, statements, references or illustrations has the capacity, tendency or effect of misleading or deceiving purchasers or prospective purchasers as to the ...
Which of the following terms may not be used in a life insurance advertisement?No advertisement shall use the terms “investment,” “investment plan,” “founder's plan,” “charter plan,” “deposit,” “expansion plan,” “profit,” “profits,” “profit sharing,” “interest plan,” “savings,” “savings plan,” “private pension plan,” “retirement plan” or other similar terms in connection with a policy in a ...
What must be disclosed when a producer advertises a life insurance policy?An advertisement for a life insurance policy containing graded or modified benefits shall prominently display any limitation of benefits. If the premium is level and coverage decreases or increases with age or duration, that fact shall be commonly disclosed.
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Health insurance advertisements that mention statistical information are required
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