Final answer:
Insurance companies must file new advertising materials with the state insurance commissioner and observe a state-mandated waiting period. The length of this period varies by state but is often 10 to 30 days. If no response is received during this time, the company may proceed to use the advertising piece.
Step-by-step explanation:
The student is asking about the regulations regarding the use of new advertising materials by an insurance company licensed to offer variable contracts in a given state. When an insurance company wishes to use a new advertising piece, they must file the prototype with the state's insurance commissioner. There is usually a waiting period after which, if no response has been received from the commissioner, the insurance company may begin to use the advertising material. The specifics of this waiting period can vary by state law, but often it ranges from 10 to 30 days.
For instance, if GHI insurance company files their new advertising prototype on Monday, August 1st, and the state regulation stipulates a 30-day waiting period, the earliest the company could use the new advertising piece without any response from the commissioner would be Wednesday, August 31st. However, if the period is only 10 days, then the company might be able to use the advertisement as early as Thursday, August 11th. It is critical for the insurance company to be familiar with the specific state laws regarding this waiting period to ensure compliance and avoid any legal issues.
It is important to note that these regulations are in place to protect the consumer. By having a filing and review process, the state can ensure advertising materials are not misleading or misrepresent the insurance products offered. Insurance companies must adhere to these rules closely to maintain their license to operate within the state.