§ 83.57. Penalties.
(a) For failing to make adequate disclosure of basic information about the product being sold, after an administrative hearing as provided by law, an agent or broker may be subject to the penalties provided in section 639 of The Insurance Department Act of one thousand nine hundred and twenty-one (40 P. S. § 279) for conduct that would disqualify an agent from the initial issuance of a license under section 603 of that act (40 P. S. § 233) and for misrepresenting the terms of an insurance policy, a violation of section 637 of The Insurance Department Act of one thousand nine hundred and twenty-one (40 P. S. § 277).
(b) For failing to insure adequate disclosure of basic information about the product being sold, after a hearing as provided by law, a company may be subject to the penalties provided in section 350 of The Insurance Company Law of 1921 (40 P. S. § 475) for violations of sections 347—349 of that act (40 P. S. § § 472—474).
(c) For failing to insure adequate disclosure of basic information about the product being sold, after a hearing as provided by law, a fraternal benefit society may be subject to the penalties provided in sections 817(b) and 904(d) of the Fraternal Benefit Society Code (40 P. S. § § 1141-817(b) and 1141-904(d)).
(d) In addition to subsections (a)—(c), failure to make the disclosure outlined in this subchapter may be considered a violation of the Unfair Insurance Practices Act (40 P. S. § § 1171.1—1171.15).
Source The provisions of this § 83.57 amended through December 28, 1979, effective March 1, 1980, 9 Pa.B. 4251. Immediately preceding text appears at serial pages (42677) to (42678).
APPENDIX A
Cross References This appendix cited in 31 Pa. Code § 83.3 (relating to disclosure statement).
APPENDIX B
Surrender Comparison Index Disclosure
Per $1,000 of Face Amount of Basic Insurance
Name of Insurer
Name of Insured
Age
Sex
Face Amount of Policy
Descriptive Title of Policy (Whole Life, 20 year decreasing term, endowment at age 65) Policy Number.............. 10 Year Surrender Index:
*(reflects equivalent level annual dividend and a termination dividend in the total amount of
) 20 Year Surrender Index:
*(reflects equivalent level annual dividend and a termination dividend in the total amount of
) *Based on 19
Dividend Scale. Dividends are not guaranteed and are subject to change.The Surrender Comparison Index was designed to measure the relative cost of life insurance protection and may be useful for comparison of similar policies offered by other companies. Technically, the Index shows the relationship between the amounts paid by the insured (the average annual premiums minus any average annual dividend) and the amounts paid by the insurer (the cash value of the policy in the event of surrender over periods of 10 and 20 years all adjusted for compound interest at the rate of four percent per annum to reflect the timing of the payments). *The Index reflects illustrative dividends based upon the current year’s dividend scale. In the case of participating life insurance policies, the Index may change since future dividends are subject to change depending on the company’s experience. If future dividends increase within the 10 or 20 year period, the Index will be lower; if dividends decrease, the Index will be higher. When comparing similar policies, if all things are equal, the policy with the lower Index is generally the lower cost policy and the better buy in the event that the policy was surrendered at the end of the designated period. If death would occur during the designated period, the policy with the lower Index would not necessarily be the lower cost policy. The Index does not take into account, among other things (1) the value of the services of an agent or company; (2) the relative strength and reputation of the company; and (3) small differences in policy provisions. The Index does assume that annual premiums are paid, *that dividends are taken in cash or applied to premiums, and that no additional benefit provisions are included. *If inapplicable, section may be deleted entirely or clearly marked ‘‘Not Applicable.’’
Cross References This appendix cited in 31 Pa. Code § 83.55 (relating to delivery).
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