Subchapter A. REQUIREMENTS FOR ALL POLICIES AND FORMS

§ 89.1. Definitions.

 The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:

   Act—The Insurance Company Law of 1921 (40 P. S. § §  341—991).

   Advertisement—As defined in §  51.1 (relating to definitions).

   Department—The Insurance Department of the Commonwealth.

   The provisions of this §  89.1 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. § §  66, 186, 411 and 412); sections 510—514 of The Insurance Company Law (40 P. S. § §  510—514); and section 3(a) of the Accident and Health Filing Reform Act (40 P. S. §  3803(a)).

   The provisions of this §  89.5 reserved November 22, 2002, effective November 23, 2002, 32 Pa.B. 5747. Immediately preceding text appears at serial pages (214541) to (214542).

PREPARATION OF FORMS

§ 89.11. [Reserved].

   The provisions of this §  89.11 reserved November 22, 2002, effective November 23, 2002, 32 Pa.B. 5747. Immediately preceding text appears at serial pages (214542) and (287707).

 (a)  When submitting a policy form to which a copy of the application will be attached when the policy is issued, a copy of the application shall be attached to the policy form. If the form of the application has already been approved, the form number and date of approval shall be shown either on the form or in the transmittal letter.

 (b)  If it is the practice of the insurer to attach a reduced size reproduction of the application to a form when issued, the application should be attached to each copy of the form submitted. The application should be legibly reproduced in the size to be used in the contract.

 (c)  An application which includes a provision for home office endorsements or corrections may not be approved for use unless it is specifically stipulated therein that a change may not be made in the amount of insurance, the age at issue, the plan of insurance or benefits applied for by the endorsements or corrections. This subsection does not apply to group applications.

 (d)  Applications shall contain clear and direct questions by the insurer permitting answers by the applicant only in the form of direct statements of known facts. Applications may not contain questions or representations based on indefinite or ambiguous terms or which are inconsistent with policy provisions and may not require the making of warranties by the applicant.

 (e)  Questions as to race or color are not permitted on the application.

 (a)  The use of policy captions or descriptions such as ‘‘all coverage’’ or ‘‘complete coverage’’ is prohibited. The purpose of this section is to prevent misunderstanding in the minds of the insured public.

 (b)  A policy form bearing a caption or reference that this is a ‘‘Pennsylvania’’ policy or a ‘‘Standard’’ policy will not be considered for approval, except if the forms are so designated by statute or Departmental regulation. The purpose of this section is to prevent misunderstanding in the minds of the insured public. Use of words or abbreviations thereof as a part of the distinguishing form number are acceptable, however, if deemed necessary or convenient to the identification of the form.

 (c)  The word ‘‘special’’ may not be used which might reasonably cause the insured to believe that he is receiving preferential treatment.

 (d)  The word ‘‘compensation’’ may not be used which might reasonably cause the policyholder to be confused with workmen’s compensation coverage.

 In contracts providing specified benefits for dismemberment, death or surgical operations, if the insurer limits its liability to one such loss as a result of a single accident, the contract shall provide that the insured is entitled to receive the largest amount applicable.

   The provisions of this §  89.14 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. § §  66, 186, 411 and 412).

 A program which contemplates the simultaneous sale of insurance and equity products shall be submitted to the Department for review in accordance with the following guidelines:

   (1)  The prospective purchaser shall be given the option to purchase either the insurance product or the equity product completely independent of one another, and shall be clearly advised to this effect by the agent and in all sales material.

   (2)  The premium charged for the insurance product shall be a separate identifiable charge and be shown as such on sales material, bill, statement or draft used in connection with the program.

   (3)  Sales material or sales presentation shall separately set forth the matters pertaining to the insurance product.

   (4)  The premium rate for the insurance product may not be dependent upon the purchase of an equity product, fluctuate or vary with the investment experience of an equity product or vary with the amount of equity product purchased or contracted to be purchased.

   (5)  At any time subsequent to a simultaneous sale, the purchaser shall be given the right to divest himself of either the insurance or the equity product.

   (6)  A policy, contract or related form may not contain a provision which would automatically make payable insurance benefits to facilitate payment of an equity product, provided that with the consent of the insurer the beneficiary of the benefit may, by written instruction subsequent to the time he becomes eligible for the benefit, direct that all or part of the benefit be applied toward the purchase of an equity product.

   (7)  The term equity product as used herein may not include a variable annuity.

 (a)  Endorsements, if printed on the form or to be applied by stamp, shall be separately submitted in duplicate on the letterhead of the insurer for approval or filing.

 (b)  ‘‘Open face’’ or ‘‘blank’’ amendment forms, riders or endorsements may be used to change variable or illustrative material without submission to the Department.

 (c)  A rider or endorsement which reduces or eliminates coverage under the policy shall provide for signed acceptance by the policy owner, except in the case of a rider or endorsement which is used only at the time of policy issue.

 (d)  With respect to impairment riders, a representative selection of the type of fill-in material shall be shown when submitting the form. Additional or alternative material which differs in fundamental approach should also be submitted at the time when the material is to be used. The material may not be used with forms delivered in this Commonwealth after receipt of nonacceptance by the Department.

 (a)  Riot injuries. If a policy contains an exception for injuries arising out of riots, the exception should be confined to those instances in which the insured is injured while participating in the riot.

 (b)  Rate books. Rate books and revisions thereof should be submitted for filing. The name of the insurer should appear on revision pages, supplements and the like, in order to facilitate proper filing in the Department. This subsection does not apply to group insurance.

   The provisions of this §  89.18 amended under sections 206, 506, 1501 and 1502 of The Administrative Code of 1929 (71 P. S. § §  66, 186, 411 and 412); sections 510—514 of The Insurance Company Law (40 P. S. § §  510—514); and section 3(a) of the Accident and Health Filing Reform Act (40 P. S. §  3803(a)).

   The provisions of these §  89.21—89.23 reserved November 22, 2002, effective November 23, 2002, 32 Pa.B. 5747. Immediately preceding text appears at serial pages (214546) to (214547).