(1) No policy or annuity contract may provide for, and no person may engage in any of the following, as an inducement to the purchaser or in connection with or as reference to the policy or annuity contract, directly or indirectly:
(a) Paying, allowing, giving, or offering any paid employment or contract for services of any kind.
(b) Giving, selling, or purchasing or offering or agreeing to give, sell, purchase, allow, or provide for any agreement promising returns and profits, or any stock, bonds, or other securities, including trading stamps or other properties or present or contingent interest therein of any insurer or other corporation, association, partnership, or person, or any dividends or profits accrued thereon.
(c) Giving, allowing, arranging for, or offering any advisory board contract, or similar contract, promising returns and profits.
(2) Subsection (1) does not prohibit a licensed agent who is registered under Chapter 1, Title 35 from offering to sell shares of or interests in mutual funds in connection with or as reference to a policy or annuity contract if the agent, at the time of the offer, gives the prospective buyer a written prospectus which has been filed with and approved by the director or his designee and the Securities Commissioner.
(3) Nothing in this section may be construed to:
(a) permit an unfair method of competition or an unfair or deceptive act or practice; or
(b) prohibit an insurer from offering or giving an insured, for free or at a discounted price, services or other offerings that directly and reasonably relate to the loss control of the risks covered under the policy.
HISTORY: Former 1976 Code Section 38-57-150 [1947 (45) 322; 1952 Code Section 37-1163; 1962 Code Section 37-1163; 1978 Act No. 585, Section 13] has no comparable provisions in 1987 Act No. 155; Former 1976 Code Section 38-55-150 [1947 (45) 322; 1952 Code Section 37-1202; 1962 Code Section 37-1215; 1964 (53) 2293; 1968 (55) 2500] recodified as Section 38-57-150 by 1987 Act No. 155, Section 1; 1993 Act No. 181, Section 710; 2019 Act No. 6 (S.360), Section 8.C, eff July 1, 2019.
Effect of Amendment
2019 Act No. 6, Section 8.C, added (3), clarifying that certain practices are prohibited.