Section 6.07. Insurance policy language simplification.

 

(1)   Purpose. The purpose of this rule is to establish minimum standards for legibility, coherence and understandability in consumer insurance policies delivered or issued for delivery in the state of Wisconsin on or after the effective dates stipulated in sub. (8) . Sections of statutes interpreted or implemented by this rule are ss. 631.20 (2) (a) and 631.22 , Stats.

(2)   Scope. This rule shall apply to "consumer insurance policies"as defined in sub. (3) and not exempted under sub. (5) .

(3)   Definitions.

(a) In this section "consumer insurance policy"means a life, disability, property or casualty insurance policy, or a certificate or a substitute for a certificate for group life, disability, property or casualty insurance coverage, which is issued to a person for personal, family or household purpose and a copy of which is customarily, in the insurance industry, delivered or is required by law, rule or agreement to be delivered to the person obtaining insurance coverage.

(b) The term "text" as used in this section shall include all printed or electronic matter except the following:

1. The name and address of the insurer; the name, number or title of the consumer insurance policy; the table of contents or index; captions and subcaptions; specification pages, schedules or tables; and

2. Any such form language that is drafted to conform to the requirements of any federal law, regulation or agency interpretation; any form language required by any collectively bargained agreement; any medical terminology; any words which are defined in the form; and any form language required by state law or regulation; provided, however, the insurer identifies the language or terminology excepted by this subdivision and certifies, in writing to the commissioner, that the language or terminology is entitled to be excepted by this subdivision.

(4)   Minimum standards.

(a) In addition to any other requirements of law, no consumer insurance policy, unless excepted under sub. (5) , shall be delivered or issued for delivery in this state on or after the dates such forms must be approved under this section, unless:

1. The text achieves a minimum score of 50 for those policies labeled as Medicare supplement policies as defined by s. Ins 3.39 and a minimum score of 40 for all other policies included under this rule, on the Flesch reading ease test as described in par. (b) , or an equivalent score on any other comparable test as provided in par. (c) or this subsection unless a lower score is authorized under sub. (7) ;

2. It is printed, except for specification pages, schedules and tables, in not less than 10 point type, one point leaded;

3. It is appropriately divided and captioned, presented in a meaningful sequence, and the style, arrangement and overall appearance of the policy enhance its understandability;

4. It contains a table of contents or an index of the principal sections of the policy if the policy contains more than 3,000 words or if the policy has more than 3 pages;

5. It contains a single section listing exclusions or the exclusions are listed within the form and given at least equal prominence including same type size;

6. It defines words and expressions which are not commonly understood, or whose commonly understood meaning is not intended;

7. Cross-referencing between sections of the policy is maintained at a minimum.

(b) For the purpose of this section, a Flesch reading ease test score shall be measured by the following method:

1. For consumer insurance policies containing 10,000 words or less of text, the entire form shall be analyzed. For such forms containing more than 10,000 words, the readability of two 200-word samples per page may be analyzed instead of the entire form. The samples shall be separated by at least 20 printed lines.

2. The number of words and sentences in the text shall be counted and the total number of words divided by the total number of sentences. The figure obtained shall be multiplied by a factor of 1.015.

3. The total number of syllables shall be counted and divided by the total number of words. The figure obtained shall be multiplied by a factor of 84.6.

4. The sum of the figures computed under subds. 2. and 3. subtracted from 206.835 equals the Flesch reading ease score for the consumer insurance policy.

5. For purposes of subds. 2. , 3. , and 4. , the following procedures shall be used:

a. A contraction, hyphenated word, or numbers and letters, when separated by spaces, shall be counted as one word;

b. A unit of words ending with a period, semicolon, or colon, but excluding headings and captions, shall be counted as a sentence; and

c. A syllable means a unit of spoken language consisting of one or more letters of a word as divided by an accepted dictionary. Where the dictionary shows 2 or more equally acceptable pronunciations of a word, the pronunciation containing fewer syllables may be used.

6. The title or name of a state or federal government organization or regulatory entity that is required to be used within the policy form may be excluded from the Flesch readability score.

(c) Any other reading test may be approved by the commissioner for use as an alternative to the Flesch reading ease test if it is comparable in result to the Flesch reading ease test.

(5)   Exemptions. This section does not apply to:

(a) Any policy that is a security subject to federal jurisdiction;

(b) Any group policy; however, this shall not exempt any certificate issued pursuant to a group policy delivered or issued for delivery in this state;

(c) Any group annuity contract that serves as a funding vehicle for pension, profit-sharing or deferred compensation plans;

(d) Renewal policies whose terms are not altered in any way. Changes in premium, monetary limits or language required by federal and state laws and regulations adopted after the effective date of this rule are not alterations under this section.

(e) Any form used in exchange, pursuant to a contractual provision, for an individual life policy delivered or issued for delivery on a form approved prior to the date that the form must be approved under this section.

(6)   Certification. Filings subject to this section shall be accompanied by a certificate signed by an officer of the insurer stating that it meets the minimum reading ease score or stating that the score is lower than the minimum required but should be approved in accordance with sub. (7) . The actual readability score for each form shall be stated in the cover letter or as a data element in an electronic filing and the insurer shall fully identify the method or computer program used to determine the readability score . To confirm the accuracy of any certification, the commissioner may require the submission of further information to verify the certification in question.

(7)   Powers of the commissioner. The commissioner may authorize a lower score than the Flesch reading ease score required in sub. (4) (a) 1. , whenever, at the sole discretion of the commissioner, it is found that a lower score: will provide a more accurate reflection of the understandability of a consumer insurance policy; is warranted by the nature of a particular form or type or class of such forms; or is caused by certain language which is drafted to conform to the requirements of any state law, rule or commissioner's interpretation.

(8)   Effective date.

(a) This section shall apply to the following consumer insurance policies no later than 6 months after December 1, 1980:

1. Private passenger automobile.

2. Homeowners,

3. Dwelling fire,

4. Individual disability excluding disability income,

5. Medicare supplement,

6. Individual life and annuity.

(b) This section shall apply to the following consumer insurance policies no later than 12 months after December 1, 1980.

1. Renewal policies with altered terms,

2. Group disability certificates,

3. Disability income,

4. All consumer insurance policies not included under pars. (a) and (c) of this subsection.

(c) This section shall apply to all Town Mutual insurers and also other insurers whose written premiums for the most recent calendar year did not exceed $500,000 statewide, no later than 18 months after December 1, 1980, regardless of the requirements under pars. (a) and (b) .

(d) Any consumer insurance policy that has been approved prior to the effective date of this rule and meets the standards set by this rule need not be refiled for approval but may continue to be lawfully delivered or issued for delivery in this state upon the filing with the commissioner of a list of the forms and accompanied by a certificate for each form in the manner provided in sub. (6) .

(e) The dates in pars. (a) , (b) , (c) and (d) may be extended at the commissioner's sole discretion, but not beyond May 8th, 1982.

History: Cr. Register, November, 1980, No. 299 , eff. 12-1-80; CR 10-076 : am. (3) (b) (intro.), 2., (4) (a) 5., (5) (a), (c), (6), (8) (d), r. and recr. (4) (a) 1., 2., cr. (4) (a) 8., (b) 6., (d), (9) Register January 2011 No. 661 , eff. 2-1-11; EmR1101 : eff. 2-9-11; CR 11-021 : r. and recr. (4) (a) (intro.), 1., 2., 5., r. (4) (a) 8., (d), (9) Register August 2011 No. 668 , eff. 9-1-11.

Note

The treatment of s. Ins 6.07 by CR 10-076 first apply to policies issued or renewed eight months following February 1, 2011. Microsoft Windows NT 6.1.7601 Service Pack 1