.

New York State Seal

STATE OF NEW YORK
INSURANCE DEPARTMENT

160 WEST BROADWAY
NEW YORK, NEW YORK 10013

                                                                                                

Circular Letter No. 2 (1994)
January 31, 1994

                                                                             

TO: All Insurers Licensed to Write Life Insurance or Annuities 
RE: Questionable Marketing and Sales Practices

It has come to the Department's attention that certain sales materials and marketing techniques currently being used in connection with the marketing and/or sale of life insurance and annuity products in this State involve practices that are misleading to consumers. Such questionable practices may include one or more of the following: the use of advertisements that tend to mislead and deceive the public, failure to provide truthful and adequate disclosure of all material and relevant information in advertising, mislabeling of products and selling unapproved products. A number of these practices were originated and used by agents, demonstrating an inadequate control by the company over the content, form and method of distribution of its advertisements. It is the opinion of the Department that such practices are violations of Sections 2123, 2403, 3201, and 4226 of the New York Insurance Law and Regulation No. 34-A (11 NYCCR 219).

The Department is currently in the process of investigating several life insurance companies for such possible violations. Further, the Department is aware of instances where New York domiciled insurers and their agents are not complying with rules and regulations regarding the marketing of such products in other jurisdictions. In order to address the Department's concerns, all authorized insurers issuing life and annuity products are directed pursuant to Section 308 of the New York Insurance Law to take the following actions immediately and report their findings to this Department by March 31, 1994:

If, after analyzing the results of the reports required hereunder and after evaluating any future action taken by the life insurance industry, it is determined by the Department that life insurers are not taking appropriate steps to remedy questionable marketing and sales practices, further action may be taken. Such action may include a finding by the Superintendent that certain advertising material or the use of certain terms therein is misleading and a requirement that particular insurers submit all their advertisements to the Department for approval prior to use.

The reports required by this Circular Letter shall contain an executed jurat in the form attached hereto. The reports and any questions relating to the content of this Circular Letter should be directed to:

 

Very truly yours,

SALVATORE R. CURIALE
SUPERINTENDENT OF INSURANCE

 

 

Attachment

 

State of ________ }

                                SS:

County of ________}

                 ______ , President, of the _________  , being duly sworn, deposes and says that, to the best of his/her information, knowledge and belief, the above Report, together with all attachments thereto, constitutes as of the date below a fair and true statement of the status of compliance by the Company and its agents with all laws, regulations, internal controls and operating procedures governing the sale and marketing of life insurance and annuity contracts, as detailed in the Superintendent's Circular Letter No. 2, dated January 31, 1994.

Subscribed and sworn to before me this

______ day of ______ 1994