(1)
Required disclosures. A producer shall inform the prospective
purchaser, prior to commencing an insurance sales presentation, that the
producer is acting as an insurance producer and inform the prospective
purchaser of the producer's full name and the full name of the insurance
company that the producer will represent in the insurance sales presentation.
In sales situations in which a producer is not involved, the insurer shall
identify the insurer's full name to a prospective purchaser.
(2)
Improper sales tactics.
a. Producers and insurers shall not employ
any method of marketing or tactic that uses undue pressure, force, fright,
threat, whether explicit or implied, to solicit the purchase of
insurance.
b. A producer shall not:
(1) Execute a transaction for an insurance
customer without authorization by the customer to do so; or
(2) Commit any act that shows that the
producer has exerted undue influence over a person.
c. Producers and insurers shall not, without
good cause:
(1) Fail or refuse to furnish any
individual, upon reasonable request, information to which that individual is
entitled, or to respond to a formal written request or complaint from any
individual.
(2) Sell an insurance
policy or rider to an individual that is a duplication of a policy or rider
that the individual owns or for which the individual has applied at the time of
the sale.
(3)
Prohibited designations and fees.
a. When an insurance producer is engaged only
in the sale of insurance policies or annuities, the insurance producer shall
not hold the producer out, directly or indirectly, to the public as a
"financial planner," "investment adviser," "consultant," "financial counselor,"
or any other specialist solely engaged in the business of financial planning or
giving advice relating to investments, insurance, real estate, tax matters or
trust and estate matters. This provision does not preclude insurance producers
who hold some form of formal recognized financial planning or consultant
certification or designation from using this certification or designation when
they are only selling insurance.
b.
An insurance producer shall not engage in the business of financial planning
without disclosing to the client prior to the execution of the agreement
required by paragraph 15.8(3)"c" or to the solicitation of the
sale of a product or service that the producer is also an insurance producer
and that a commission for the sale of an insurance product will be received in
addition to a fee for financial planning, if such is the case. The disclosure
requirement under this paragraph may be met by including the disclosure in any
disclosure required by federal or state securities law.
c. An insurance producer shall not charge
fees other than commissions unless such fees are based upon a written agreement
signed by the client in advance of the performance of the services under the
agreement. A copy of the agreement must be provided to the client at the time
the agreement is signed by the client. The agreement must specifically state:
(1) The service for which the fee is to be
charged;
(2) The amount of the fee
to be charged or how it will be determined or calculated; and
(3) That the client is under no obligation to
purchase any insurance product through the insurance producer or consultant.
The insurance producer shall retain a copy of the agreement
for not less than three years after completion of services, and a copy shall be
available to the commissioner upon request.
d. Producers shall not charge an additional
fee for services that are customarily associated with the solicitation,
negotiation or servicing of policies. This prohibition shall not apply to
assigned risk policies and commercial property and casualty policies. Any
additional fee that a producer intends to charge for assigned risk policies and
commercial property and casualty policies must be fully disclosed to the
insured.
e. Producers shall comply
with rule
191-10.19 (522B) in using
senior-specific certifications and professional designations in the sale of
life insurance and annuities.
(4)
Suitability. A producer
shall not recommend to any person the purchase, sale or exchange of any life
insurance policy, or any rider, endorsement or amendment thereto, without
reasonable grounds to believe that the transaction or recommendation is not
unsuitable for the person based upon reasonable inquiry concerning the person's
insurance objectives, financial situation and needs, age and other relevant
information known by the producer. For purposes of this subrule, when a
producer recommends a group life insurance policy, "person" shall refer to the
intended group policyowner.
(5)
Prohibited acts.
a. For
purposes of this subrule:
"Gift" means a rendering of anything of
value in return for which legal consideration of equal or greater value is not
given and received.
"Immediate family" shall include parent,
mother-in-law, father-in-law, spouse, former spouse, brother, sister,
brother-in-law, sister-in-law, son-in-law, daughter-in-law, child and
stepchild. In addition, "immediate family" shall include any other person who
is supported, directly or indirectly, to a material extent by a
producer.
"Loan" means an agreement to advance
property, including but not limited to money, in return for the promise that
payment will be made for use of the property.
b. A producer shall not:
(1) Solicit or accept, directly or
indirectly, at any time, a personal loan from an insurance customer that in the
aggregate exceeds $250, unless the customer is:
1. A bank, savings and loan, credit union or
other recognized lending entity; or
2. A member of the producer's immediate
family.
(2) Solicit or
accept, directly or indirectly, at any time, a gift to the producer or to a
member of the producer's immediate family from an insurance customer that in
the aggregate exceeds $250, unless the customer is a member of the producer's
immediate family. A gift to a member of the producer's immediate family shall
be included in calculating the aggregate amount. A gift received by a member of
the producer's immediate family from a customer that is not a member of the
producer's immediate family in excess of the aggregate amount shall be deemed a
violation of this subrule by the producer.
(3) Solicit or accept being named as a
beneficiary, executor or trustee in a will, trust, insurance policy or annuity
of a customer, unless the customer is a member of the producer's immediate
family.
(4) Evade or otherwise
violate the spirit of this subrule by terminating a producer relationship with
an insurance customer for the purpose of soliciting or accepting a loan or a
gift, or for the purpose of being named as a beneficiary, executor or trustee
in a will, trust, insurance policy or annuity that the producer otherwise would
have been prohibited from soliciting or accepting by this subrule. A producer
will not be in violation of this subrule if the producer has made a bona fide
termination of the producer relationship with the insurance customer and has
conducted no insurance or other business with the insurance customer for a
period of three years.
c. Transactions that involve nominal interim
ownership immediately precedent to transfer of ownership into a trust are
exempt from this subrule.