1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 551 By: Montgomery
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6 AS INTRODUCED
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7 An Act relating to unfair insurance practices;
7 amending 36 O.S. 2021, Section 1204, which relates to
8 definitions of unfair methods of competition and
8 unfair or deceptive acts; modifying rebate actions to
9 be considered unfair methods of competition and
9 unfair and deceptive acts in the business of
10 insurance; providing for the Insurance Commissioner
10 to promulgate rules; providing exemptions for certain
11 actions by an insurer or producer; and providing an
11 effective date.
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14 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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15 SECTION 1. AMENDATORY 36 O.S. 2021, Section 1204, is
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16 amended to read as follows:
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17 Section 1204. The following are hereby defined as unfair
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18 methods of competition and unfair and deceptive acts or practices in
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19 the business of insurance:
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20 1. Misrepresentations and false advertising of policy
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21 contracts. Making, issuing, circulating, or causing to be made,
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22 issued or circulated, any estimate, illustration, circular or
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23 statement misrepresenting the terms of any policy issued or to be
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24 issued or the benefits or advantages promised thereby or the
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 1 dividends or share of the surplus to be received thereon, or making
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2 any false or misleading statement as to the dividends or share of
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3 surplus previously paid on similar policies, or making any
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4 misleading representation or any misrepresentation as to the
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5 financial condition of any insurer, or as to the legal reserve
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6 system upon which any life insurer operates, or using any name or
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7 title of any policy or class of policies misrepresenting the true
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8 nature thereof, or making any misrepresentation to any policyholder
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9 insured in any company for the purpose of inducing or tending to
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10 induce such policyholder to lapse, forfeit, or surrender his or her
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11 insurance.
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12 2. False information and advertising generally. Making,
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13 publishing, disseminating, circulating, or placing before the
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14 public, or causing, directly or indirectly, to be made, published,
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15 disseminated, circulated, or placed before the public, in a
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16 newspaper, magazine, or other publication, or in the form of a
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17 notice, circular, pamphlet, letter or poster, or over any radio or
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18 television station, or in any other way an advertisement,
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19 announcement or statement containing any assertion, representation
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20 or statement with respect to the business of insurance or with
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21 respect to any person in the conduct of his or her insurance
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22 business which is untrue, deceptive or misleading. No insurance
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23 company shall issue, or cause to be issued, any policy of insurance
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24 of any type or description upon life, or property, real or personal,
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 1 whenever such policy of insurance is to be furnished or delivered to
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2 the purchaser or bailee of any property, real or personal, as an
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3 inducement to purchase or bail said property, real or personal, and
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4 no other person shall advertise, offer or give free insurance,
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5 insurance without cost or for less than the approved or customary
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6 rate, in connection with the sale or bailment of real or personal
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7 property, except as provided in Section 4101 of this title. No
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8 person that is not an insurer shall assume or use any name which
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9 deceptively infers or suggests that it is an insurer.
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10 3. Defamation. Making, publishing, disseminating, or
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11 circulating, directly or indirectly, or aiding, abetting or
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12 encouraging the making, publishing, disseminating or circulating of
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13 any oral or written statement or any pamphlet, circular, article or
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14 literature which is false, or maliciously critical of or derogatory
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15 to the financial condition of an insurer, and which is calculated to
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16 injure any person engaged in the business of insurance.
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17 4. Boycott, coercion and intimidation. Entering into any
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18 agreement to commit, or by any concerted action committing, any act
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19 of boycott, coercion or intimidation resulting in or tending to
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20 result in unreasonable restraint of, or monopoly in, the business of
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21 insurance.
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22 5. False financial statements. Filing with any supervisory or
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23 other public official, or making, publishing, disseminating,
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24 circulating or delivering to any person, or placing before the
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 1 public or causing directly or indirectly, to be made, published,
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2 disseminated, circulated, delivered to any person or placed before
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3 the public, any false statement of financial condition of an insurer
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4 with intent to deceive.
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5 Making any false entry in any book, report or statement of any
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6 insurer with intent to deceive any agent or examiner lawfully
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7 appointed to examine into its condition or into any of its affairs,
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8 or any public official to whom such insurer is required by law to
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9 report, or who has authority by law to examine into its condition or
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10 into any of its affairs, or, with like intent, willfully omitting to
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11 make a true entry of any material fact pertaining to the business of
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12 such insurer in any book, report or statement of such insurer.
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13 6. Stock operations and advisory board contracts. Issuing or
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14 delivering or permitting agents, officers, or employees to issue or
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15 deliver agency company stock or other capital stock, or benefit
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16 certificates or shares in any common-law corporation, or securities
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17 or any special or advisory board contracts or other contracts of any
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18 kind promising returns and profits as an inducement to insurance.
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19 7. Unfair discrimination.
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20 (a) Making a. making or permitting any unfair
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21 discrimination between individuals of the same class
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22 and equal expectation of life in the rates charged for
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23 any contract of life insurance or of life annuity or
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24 in the dividends or other benefits payable thereon, or
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 1 in any other of the terms and conditions of such
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2 contract.,
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3 (b) Making b. making or permitting any unfair
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4 discrimination between individuals of the same class
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5 and of essentially the same hazard in the amount of
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6 premium, policy fees, or rates charged for any policy
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7 or contract of accident or health insurance or in the
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8 benefits payable thereunder, or in any of the terms or
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9 conditions of such contract, or in any other manner
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10 whatever.,
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11 (c) As c. as to kinds of insurance other than life and
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12 accident and health, no person shall make or permit
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13 any unfair discrimination in favor of particular
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14 persons, or between insureds or subjects of insurance
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15 having substantially like insuring, risk, and exposure
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16 factors, or expense elements, in the terms or
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17 conditions of any insurance contract, or in the rate
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18 or amount of premium charged therefor. This
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19 subsection shall not apply as to any premium rate in
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20 effect pursuant to Article 9 of the Oklahoma Insurance
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21 Code.
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22 8. Rebates.
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23 (a) Except a. except as otherwise expressly provided by
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24 law, knowingly permitting or offering to make or
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 1 making any contract of insurance or agreement as to
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2 such contract other than as plainly expressed in the
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3 contract issued thereon; or paying or allowing, or
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4 giving or offering to pay, allow or give, directly or
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5 indirectly, as inducement to any contract of
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6 insurance, any rebate of premiums payable on the
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7 contract, or any special favor or advantage in the
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8 dividends or other benefits thereon, or any valuable
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9 consideration or inducement whatever not specified in
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10 the contract; except in accordance with an applicable
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11 rate filing, rating plan or rating system filed with
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12 and approved by the Insurance Commissioner; or giving
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13 or selling or purchasing or offering to give, sell, or
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14 purchase as inducement to such insurance, or in
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15 connection therewith, any stocks, bonds or other
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16 securities of any company, or any dividends or profits
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17 accrued thereon, or anything of value whatsoever not
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18 specified in the contract or receiving or accepting as
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19 inducement to contracts of insurance, any rebate of
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20 premium payable on the contract, or any special favor
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21 or advantage in the dividends or other benefit to
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22 accrue thereon, or any valuable consideration or
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23 inducement not specified in the contract.,
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 1 (b) Nothing b. nothing in subsection 7 or paragraph (a) a
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2 of this subsection shall be construed as including
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3 within the definition of discrimination or rebates any
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4 of the following practices:
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5 (1) In in the case of any contract of life insurance
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6 or life annuity, paying bonuses to policyholders
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7 or otherwise abating their premiums in whole or
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8 in part out of surplus accumulated from
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9 nonparticipating insurance, provided, that any
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10 such bonuses or abatement of premiums shall be
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11 fair and equitable to policyholders and for the
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12 best interest of the company and its
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13 policyholders;,
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14 (2) In in the case of life or accident and health
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15 insurance policies issued on the industrial debit
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16 or weekly premium plan, making allowance to
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17 policyholders who have continuously for a
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18 specified period made premium payments directly
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19 to an office of the insurer in an amount which
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20 fairly represents the saving in collection
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21 expense;,
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22 (3) Making making a readjustment of the rate of
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23 premium for a policy based on the loss or expense
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24 experience thereunder, at the end of the first or
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 1 any subsequent policy year of insurance
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2 thereunder, which may be made retroactive only
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3 for such policy year;,
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4 (4) In in the case of life insurance companies,
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5 allowing its bona fide employees to receive a
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6 commission on the premiums paid by them on
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7 policies on their own lives;,
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8 (5) Issuing issuing life or accident and health
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9 policies on a salary saving or payroll deduction
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10 plan at a reduced rate commensurate with the
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11 savings made by the use of such plan;, and
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12 (6) Paying paying commissions or other compensation
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13 to duly licensed agents or brokers, or allowing
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14 or returning to participating policyholders,
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15 members or subscribers, dividends, savings or
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16 unabsorbed premium deposits.,
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17 (c) As c. as used in this section, the word “insurance”
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18 includes suretyship and the word “policy” includes
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19 bond.,
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20 d. the offer or provision by insurers or producers, by or
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21 through employees, affiliates, or third-party
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22 representatives, of value-added products or services
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23 at no or reduced cost when such products or services
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 1 are not specified in the policy of insurance if the
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2 product of service:
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3 (1) relates to the insurance coverage, and
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4 (2) is primarily designed to satisfy one or more of
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5 the following:
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6 (a) provide loss mitigation or loss control,
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7 (b) reduce claim or claim settlement costs,
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8 (c) provide education about liability risks or
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9 risk of loss to persons or property,
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10 (d) monitor or assess risk, identify sources of
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11 risk, or develop strategies for eliminating
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12 or reducing risk,
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13 (e) enhance health,
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14 (f) enhance financial wellness through items
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15 such as education or financial planning
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16 services,
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17 (g) provide post-loss services,
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18 (h) incent behavioral changes to improve the
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19 health or reduce the risk of dead or
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20 disability of a customer, or
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21 (i) assist in the administration of the employee
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22 or retiree benefit insurance coverage,
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23 (3) the cost to the insurer or producer offering the
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24 product or service to any given customer must be
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 1 reasonable in comparison to that customer’s
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2 premiums or insurance coverage for the policy
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3 class,
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4 (4) if the insurer or producer is providing the
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5 product or service offered, the insurer or
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6 producer shall ensure that the customer is
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7 provided with contact information to assist the
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8 customer with questions regarding the product or
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9 service,
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10 (5) the Commissioner may adopt regulations when
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11 implementing the permitted practices set forth in
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12 statute to ensure consumer protection. Such
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13 regulations, consistent with applicable law, may
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14 address consumer data protections and privacy,
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15 consumer disclosure, and unfair discrimination,
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16 among other issues as deemed necessary,
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17 (6) the availability of the value-added product or
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18 service shall be based on documented objective
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19 criteria and offered in a manner that is not
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20 unfairly discriminatory. The documented criteria
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