Negative Options

Issued and entered June 30, 1972 by Russell E. Van Hooser, Commissioner of Insurance

It has come to the attention of the Insurance Bureau that certain insurers in this state are using "negative options" or "roll-ons" in the sale of insurance.

A "negative option" or "roll-on" is a sale of insurance or of additional or changed coverage for which a premium is directly charged to the insured, and in which the insurance becomes effective unless the insured rejects the coverage.

It is the opinion of the Insurance Bureau that the use of a "negative option" or "roll-on," where not specifically required by statute, generally constitutes an unfair method of competition or an unfair or deceptive act or practice in the business of insurance. Whenever such practices are detected or proven, the Insurance Bureau will apply the appliable sanctions provided in the Insurance Code.