Effective 28 Aug 1985

376.694. Group life, definitions of direct response solicitation and sponsoring or endorsing entity — certain insurers required to give notice of compensation to policyholder or endorsing entity. — 1. As used in this section, the following terms shall mean:

(1) "Direct response solicitation", a solicitation through a sponsoring or endorsing entity or through the mails, telephone, or other mass communications medium;

(2) "Sponsoring or endorsing entity", an organization which has arranged for the offering of a program of insurance in a manner which communicates that eligibility for participation in the program is dependent upon affiliation with such organization or that it endorses participation in the program.

2. With respect to a program of insurance, whether issued on an individual basis or a group basis, which would not qualify under subdivisions (1), (2), (3), (4) and (6) of section 376.691 if issued on a group basis, if compensation of any kind will or may be paid to a policyholder in the case of a group policy, or a sponsoring or endorsing entity in the case of individual, blanket or franchise policies marketed by means of direct response solicitation, the insurer shall cause to be distributed to prospective insureds a written notice that compensation will or may be paid.

3. Such notice shall be distributed whether compensation is direct or indirect and whether such compensation is paid to or retained by the policyholder or sponsoring or endorsing entity or paid to or retained by a third party at the direction of the policyholder or sponsoring or endorsing entity or any entity affiliated therewith by way of ownership, contract or employment.

4. The notice required by this section shall be placed on or accompany any application or enrollment form provided prospective insureds.

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(L. 1985 H.B. 623)