69O-150.106. Disclosure Requirements for Indeterminated Value Life and Annuity Contract Advertisements

In addition to the requirements of Rules 69O-150.104 and 69O-150.105, F.A.C., advertisements of indeterminate value life and annuity contracts as defined in Section 627.8015(1), F.S., shall be subject to the following requirements:

(1) Advertisements containing a rate to be earned, including interest rates, rates of return, or any other designation of earnings performance, are prohibited unless all limitations and conditions which affect the rate of return ultimately realized by the policyholder/certificateholder or annuitant are disclosed prominently with equal emphasis to describe the interest rate or rate of return. The disclosure shall include:

(a) Premium expense charges, if any;

(b) Administrative charges, if any;

(c) The full surrender charge, year by year; and,

(d) Any policy fees;

(e) Free withdrawal provisions or bail-outs, if any;

(f) Market value adjustment, if any;

(g) Participation rates, if any;

(h) Any other provisions which affect the rate of return ultimately realized by the policyholder/certificateholder or annuitant, and how the return is affected;

(i) Guaranteed minimum interest rate during the accumulation period, if any;

(j) Guaranteed minimum interest rate during the annuitization period, if any.

(2) Advertisements of indeterminate life policies and annuities which have multiple fund crediting rates established by the insurer shall also disclose that if an interest rate is disclosed fo rany fund in the contract, the interest rate for any other funds shall be disclosued with equal emphasis.

(3) An advertisement shall not refer to an annuity as a CD annuity.

(4) All variable life and annuity advertisements shall clearly disclose whether the insured may realize positive or negative returns on the principal, including a potential loss of the original principal contribution.

(5) Any depiction comparing the returns possible under a specific contract to alternative financial vehicles, whether charts, graphs, or other methods, must compare the information in a comparable fashion. As an example, if comparing to an annually taxable investment, the indeterminate value life and annuity comparison shall also reflect the impact of all contract charges and illustrate the after-tax surrender value for all time points illustrated for the annually taxable investment. This does not prohibit the use of generic comparisons of a tax deferred return to a non-tax deferred account if used in an institutional advertisement.

(6) For annuities with a rate declared by the insurer to be applied to any or all of an account value held within the contract, the term “yield” shall only be used to reflect the net ultimate return to the policyholder/certificateholder or annuitant after all contract charges and deductions have been made. The term shall not be used to reflect the gross credited rate of interest to a fund.

(7)(a) Illustrations of policy or contract values shall clearly indicate whether the values are at the end of the year or the beginning of the year shown.

(b) All ages shown shall be for the same time point as the associated values.

(c) Policy or contract values may be indicated only if guaranteed values are also shown.

(d) The guaranteed values illustrated may only be those values explicitly guaranteed in the contract.

Rulemaking Authority 624.308, 626.9611, 627.805 FS. Law Implemented 624.307(1), 626.9541(1)(a), (b), (e), (g), (l), 626.9641(1), 626.99, 627.460 FS. History–New 2-26-92, Formerly 4-35.0051, Amended 5-27-96, 1-4-00, Formerly 4-150.106.