An advertisement for a New York individual accident and health policy highlights the daily hospital benefit payable and the policy's low premium, but says nothing about the policy's renewability, cancellability or termination provisions. Under Reg 34 (11 NYCRR Part 215), the advertisement:
Select an option to reveal the answer and the full 3-part explanation — free, no signup.
Answer & full 3-part explanation (select an option above, or peek)
Why B is correct
Under Reg 34 (11 NYCRR Part 215), whenever an advertisement refers to a dollar amount or a period of time for which any benefit is payable, the cost of the policy, a specific policy benefit, or the loss for which the benefit is payable, the advertisement must also disclose the provisions relating to renewability, cancellability and termination, and any modification of benefits or premiums because of age or for other reasons. The disclosure must appear in a manner that does not minimize or render obscure the qualifying conditions, so a premium-and-benefit ad that is silent on renewability and termination is misleading by omission.
Why the other options are wrong
- A) Accurate prices and benefits alone are not enough; once cost or benefits are advertised, the renewability, cancellability and termination provisions must also be disclosed.
- C) The fact that the policy itself contains the required provisions does not excuse the advertisement; the ad must disclose them where the benefits and cost are being promoted.
- D) A general reference to the policy does not substitute for disclosing the qualifying conditions in a manner that is clear and not obscured.
Memory hook
Advertise the price, disclose the strings: renewability, cancellability, termination.