Sec. 261.6. Prepaid legal services plans; mass merchandising basis

(a) In addition to marketing to individuals, individual prepaid legal services plan policies may be issued through a mass merchandising program where the program is marketed to:

(1) cardholders of a credit card, charge card or payment card which can be used to buy goods or services, and such card is issued by a bank, retailer or other issuer of such cards;

(2) depositors, account holders or members of a bank, savings and loan association, credit union, mutual fund, money market fund, stock broker or other similar financial institution regulated by state or Federal law, that has agreed to facilitate such coverage from an insurer to such persons; or

(3) a policy issued to an association or the trustee or trustees of a trust established, or participated in, by one or more associations, to cover association members, where each association shall have:

(i) been organized and maintained in good faith for purposes principally other than that of obtaining insurance;

(ii) been in active existence for at least two years; and

(iii) a constitution and by-laws which provide that:

(a) the association hold regular meetings not less than annually to further the purposes of the association;

(b) the association collect dues or solicit contributions from members; and

(c) the members have voting privileges and representation on the governing board and committees;

(4) any of the groups specified in section 261.5 of this Part.

(b) No insurer shall provide coverage in regard to a mass merchandising plan policy if:

(1) it is a condition of employment or membership in an association, organization, or other entity that an employee or member must purchase insurance pursuant to the plan; or

(2) any penalty is imposed upon an employee or member if insurance is not purchased.

(c) No insurer shall provide coverage in regard to a mass merchandising plan policy if:

(1) the purchase of any good or service is a condition of purchasing insurance available under the plan; or

(2) the purchase of insurance available under the plan is a condition of purchasing any good or service.

(d) A mass merchandising program under this Part shall be subject to the provisions of sections 153.3(f) and (g), 153.5, 153.6, and 153.7(a), (b), (d) and (e) of this Title (Regulation 135) as those provisions relate to mass merchandising.