31A-28-119. Prohibited advertisement of the association -- Notice to policyholders.
(1) (a) Except as provided in Subsection (1)(b), a person, including an insurer, agent, or
affiliate of an insurer may not make, publish, disseminate, circulate, or place before the public, or
cause directly or indirectly to be made, published, disseminated, circulated, or placed before the
public, in any newspaper, magazine, or other publication, or in the form of a notice, circular,
pamphlet, letter, or poster, or over any radio station or television station, or in any other way, any
advertisement, announcement, or statement written or oral, which uses the existence of the
association for the purpose of sales, solicitation, or inducement to purchase any form of
insurance.
(b) Notwithstanding Subsection (1)(a), this section does not apply to:
(i) the association; or
(ii) any other entity that does not sell or solicit insurance.
(2) (a) Prior to January 1, 2002, the association shall:
(i) prepare a summary document describing the general purposes and current limitations
of this part that complies with Subsection (3); and
(ii) submit the summary document described in Subsection (2)(a)(i) to the commissioner
for approval.
(b) Sixty days after the day on which the commissioner approves the summary document
described in Subsection (2)(a), an insurer may not deliver a policy or contract to a policy or
contract owner unless the summary document is also delivered to the policy or contract owner
prior to, or at the time of, delivery of the policy or contract.
(c) The summary document shall be available upon request by a policy owner.
(d) The distribution, delivery, or contents or interpretation of the summary document does
not guarantee that:
(i) the policy or the contract is covered in the event of the impairment or insolvency of a
member insurer; or
(ii) the owner of the policy or contract is covered in the event of the impairment or
insolvency of a member insurer.
(e) The summary document shall be revised by the association as amendments to this part
may require.
(f) Failure to receive the summary document as required in Subsection (2)(b) does not
give the policyholder, contract holder, certificate holder, or insured any greater rights than those
stated in this part.
(3) (a) The summary document prepared under Subsection (2) shall contain a clear and
conspicuous disclaimer on its face.
(b) The commissioner shall, by rule, establish the form and content of the disclaimer
described in Subsection (3)(a), except that the disclaimer shall:
(i) state the name and address of:
(A) the association; and
(B) the insurance department;
(ii) prominently warn the policy or contract owner that:
(A) the association may not cover the policy; or
(B) if coverage is available, it is:
(I) subject to substantial limitations and exclusions; and
(II) conditioned on continued residence in the state;
(iii) state the types of policies for which the association will provide coverage;
(iv) state that the insurer and its agents are prohibited by law from using the existence of
the association for the purpose of sales, solicitation, or inducement to purchase any form of
insurance;
(v) state that the policy or contract owner should not rely on coverage under the
association when selecting an insurer;
(vi) explain the rights available and procedures for filing a complaint to allege a violation
of this part; and
(vii) provide other information as directed by the commissioner including sources for
information about the financial condition of insurers provided that the information:
(A) is not proprietary; and
(B) is subject to disclosure under public records laws.
(4) (a) An insurer or agent may not deliver a policy or contract described in Subsection
31A-28-103(2)(a) and wholly excluded under Subsection 31A-28-103(2)(b)(i) from coverage
under this part unless the insurer or agent, prior to or at the time of delivery, gives the policy or
contract holder a separate written notice that clearly and conspicuously discloses that the policy or
contract is not covered by the association.
(b) The commissioner shall by rule specify the form and content of the notice required by
Subsection (4)(a).
(5) A member insurer shall retain evidence of compliance with Subsection (2) for the
later of:
(a) three years; or
(b) until the conclusion of the next market conduct examination by the department of
insurance where the member insurer is domiciled.
Amended by Chapter 161, 2001 General Session
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Last revised: Thursday, May 28, 2009