Postal Life and Casualty Insurance Company

Text (OCR of the scan at left; may contain errors)

IN THE l\1:A TTER POSTAL LIFE AND CASUALTY INSURANCE COl\fP ANY ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE CO::\HnSSION ACT Docket 62,"6. Complaint, Dec. 28, 195J,-Ord.er, Oct. , 195" Order dismissing- for failure of proof C'oll1p1aint charging false ad\ertising of accident and heath insurance policies.

Ill?'. John lV. B?' ookfield and il1r. Donald Ii. Iiing for the Commission.

ill T. Ii enne th Teasdale of St. Louis, :Mo. Ill?'. Ii arold Ii nig ht Kansas City, :Mo. ; and il1T. A. Alvis Layne of 'Yashington, D. for respondent.

INITIAL DECISION BY J. EARL Cox, HEARING EXAMINER The complaint charges that respondent has disseminated false misleading and deceptive advertisements relating to its ac.cident and health insurance policies and, by so doing, has engaged in unfair and deceptive acts and practices in commerce in violation of the Federal Trade Commission Act, as that Aet is applicable to the business of insurance under the provisions of Public Law 15, 79th Congress (Title 15, U.S. Code, Sections 1011 to 1015), hereinafter referred to as the l\fcCarran Act.

Responde.nC:s answer admits the allegations of the complaint as to its existe.nee and business, but denies Federal Trade Commission jurisdiction and the allegations as to violation of the Federal Trade Commission Act.. The ans,yer states as an affirmative defense that the. respondent has engaged in a long course of cooperative dealing with the Federal Trade Commission in connection with and under trade practice rules promulgated by the Commission, during which the Commission s staff found respondent' s advertising material, inchlding the advertising circulars which are at issue in this proceeding, to bl:~ in accord with the trade practice rules and not objectionable or subject to criticism.

In connection with its answer respondent moved that the complaint be dismissed on the ground that the Federal Trade Commission Act has no application to the business of respondent, and because the Commission s pleading "does not state a complaint upon v,ohich relief can or should be granted as a matter of law, lorJ, in the alternative, that the complaint be dismissed and the matter referred to the Bureau of Consultation of the Commission for han- POSTAL LIFE AND CASUALTY INSURANCE CO. 495 494 Decision dling and disposition, under the cooperative procedures of that Bureau. This motion was denied by the Hearing Examiner. A motion to make the complaint more definite and certain was likewise denied following a statement by counsel supporting the complaint "that only those advertisements from which the quotations set out in P ARAGRAPI-I FIVE of the complaint were taken would be relied on for proof of the Commission s case. Thereafter hearings "ere held at which evidence in support of and in opposition to the allegations of the complaint was presented duly recorded and later filed in the office of the Commission. Proposed findings of fact and conclusions of law, "ith supporting memoranda of law, have been submitted by counsel. Upon the entire record, the follo"ing findings of fact and conclusions of law are made:

1. Respondent, Postal Life and Casualty Insurance Company, is a corporation organized July 29, 1927, existing and doing business under and by virtue of the laws of the State of ~1missouri, with its office and principal place of business at 612 'Vest 47th Street, Kansas City, ~lissouri.

2. Respondent is now and for more than two years preceding the filing of the complaint had been engaged in the aeeident and health is defined in theinsurance business in commerce, as "commerce Federal Trade Commission Act, by entering into accident and health insurance contracts with insureds located in various states of the. United States other than the State of ~lissouri. Respondent's business in commerce has been and is substantial; in 1953 its insurance written or re-total accident and health premiums for newed during the year, exclusive of premiums from within the 610, and inState of :Missouri, amounted to approximately $984 195J to approximately $1 008 000. Some proportion of this represented business carried on with customers in each of the several states and in Alaska, 1-lawaii and the District of Columbia. A negligible amount of business receipts came from Puerto Rico foreign coun-Canada, :Mexico, the Philippine Islands, and other tries. Practically an the premiums came from holders of individual accident andpoJicies-in 1953 respondent's receipts from group health policies amounted to approximately one-half of one percent of its total premium receipts; in 1954, the proportion was approximately 1.26%.

insurance business in ~1is- 3. Respondent is licensed to engage in , Illinois, lowa, Kansassouri and in seven other states-Colorado Nebraska, Texas and Virginia. Of its total premium receipts from states and areas other than :Missouri, the premiums from the states in which respondent is lic.ensed amounted approximately, in 1953 ,., Decision 54 F.

to 28.9%, and in 1954, to 30.2%. Respondent's business in states other than those in which it is licensed is therefore substantial. . 4. In determining jurisdiction this distinction is not vital in view of the Commission s decision in the matter of The American Hospital and Life Insurance 001npany, Docket No. 6237, nor is it necessary to examine the laws of the various states as they relate to false and deceptive advertising practices such as those which constitute the aggregate of the charges in the complaint in this proceeding. The Commission, in deciding that case, said: rllclpl' tile Federal Trade Commission .Act, which the McCarran-Ferguson \.ct made applicable to the l)Usiness of insurance, there must remain an irreducibJe area of Commission jurisdiction oyer the interstate activities of insurance companies 'which cannot be rene-heel \)~. State Jaw and as to which the Jimitation "to the extent tllat such business is not regulated by State Jaw " is inoperatin'. * * * Our Jwocef'.eJing to abate deceptive practices by such (insurance) companies does not impinge on tllose 1 State functions "' By executting- its statutory l1mndute to prey!"nt deceptive practict's in tile interstate business of insurance, the Commission in no wise usurps State Imvs prohibiting- fa lse n(lYertisin~. The Federal 'l' ach: Commission Act and the State laws are boo) designed to sllppress deception in nrlvertisin:;. The Commission s action in tlle instant matter aiels tile States in their own lout! procedures to protect their citizenry from such excesses.

The Commission s assertion of jurisdiction in the A me?"ican 11 ospital case and in the other insurance cases 2 that have been before it is still controlling precedent in this proceeding, and upon that precedent it must be found that the Federal Trade Commission has jurisdic.tioll of the respondent and over the issues here.in raised. 5. The foregoing conclusion is applicable to all phases of this proceeding, even though the complaint, in its allegations, seems to envision three areas in which diflerent conclusions might be reached as to jnrischction. There is, first of all, the solicitation by mail of insurance sales in states other than those in which respondent licensed to do business; in the second place there is the area of operation in states in which respondent. is licensed, in which, by inference at least, the complaint admits that respondent's insurance aebvitips are regulated, since all such states have applicable regulatory statutes; thirdly, there is that business which was originally transacted with insureds living in states in which respondent is licensed, ,yho later, in substantial numbers, moved to states in which respondent is not lieensec1, but \':ho continued doing business with 1 HeJ'erring to the States' power to reyol;e cbarters of insurance corporations organized nnller their Ja\\'s. to n' guJate, tax, and 11x rates for insurance companies doing business wi/hill Their bnrcJers.

~ In th!' ).!atter nf Xatio1lf11 Ca.o/la1t:1l CI)/IIW/lI,I/, eorporati011. Docket (,Rll; in the Matter of Pf'rle/'ftl Life CIIS/IIIlIy COlllfW' /I. CO/'PO/'fltiOIl. Docket (i~:l~ , order granting appeal from Hearing Examiner s order limiting scope of proceeding. ,, POSTAL LIFE AND CASUALTY INSURANCE CO. 497 494 Decision respondent in the renewal and servicing of such policies. The amount of business falling within this third category was infinitesimal in comparison with respondent's total business, and may be disregarded as de m.ini1nis. The business falling into the second category is specifically within the finding in the American Hospital case supra, and in National Casualty Oo'Tnpany, Docket 6311; while that in the first category is clearly embraced by the broad implications of those decisions, and is specifically made the subject of conclusive findings of jurisdiction in several initial decisions in cases similar to the instant proceeding.

6. In the course of its business during the years 1953 and 1954 respondent sold the following policies:

(1) A Twenty-Fifth Anniversary Accident Policy bearing the identification G-68- 52;

(2) A Series E Accident and Sickness Policy bearing identification ES- 53;

(3) An Individual 1-10spital Expense Policy identified as II-1- 53; and (4) A Family Group 1-Iospital Expense Policy covering losses resulting from accidental bodily injury or sickness, identified as FII- 53.

7. Policy ES- 53 is no further involved in this case for two reasons: the extent of responc1enes business during 1953 and 1954 in connection -\with this policy was inconsequential, and no advertising material relating to it or its coverage is contained in the record or shown to have been disseminated. Policy 11-1- 53 may be disregarded here-in because the complaint contains no charge that any of its provisions were misrepresented in any of respondent' advertising.

8. Policy F1-1- , respondent claims, should be excluded from consideration because it "as sold by agents only in states in which respondent ,vas licensed, and, during the years 1953 and 1954, only eight purchasers of that policy moved to states in which respondent as not. licensed, and thereafter only one semi-annual premium of $11.40 was received applicable to such a policy. Under respondenfs interpretation of the theory of jurisdiction upon which the complaint "as based, this claim would be valid, but since that interpretation is rejected, the claim is likewise rejected. 9. The record contains only one piece of advertising relating to the FJ-I- 53 policy, ,yhic.h, like other of respondents policies :! See A lIIcrican Life 0'1111 Accirlent In81/ranCC Co'))l11ony.. Docket 6238: A11.tomovile 01cner.q SlIfely 1'1/1111/"1/1/('6COUljWlIlJ.. 'Ooc1,et 623n: nlpelc/"8 Health A ,qsocint.-ion Doe:l,et 6252 : Rrlllclltor8 Mllt-IIIII 111.qllrl/llcc Colilpany.. Docla't 6308. Conclusion of Law No. 5; find Norlh Alilcriel/I/. Accident 1'1/811/",nlc6 CompallY.. Docket 6456. 498 FEDERAL T'TRADE COMMISSION DECISIONS Decision 54 F.

is renewable at the option of the company only. This is a fourpage folder, the first two pages of which contain descriptive material relating to the policy. The third page is an application form and the last page is a blank form for home-office use. This folder was not circulated generally to the public, but was distributed by respondent to its agents with instructions that it be used, along with a sample policy with which they were also supplied, in explaining to prospective purchasers the provisions of the policy. After taking an application, the agent, according to his instructions, was to tear the sheet containing pages 1 and 2 from the application part of the folder, and give it to the policy-purchaser, so that he could later assure himseH that the delivered policy was as represented. At the bottom of the first column on page 2 of this folder appears the following :

ARE BE:\TEFITS REDUCED WHEN YOU REACH 60 OR 65? NO! Adult benefits never reduce after the policy is issued. This is the only bit of advertising relied upon to support the charge that respondent has disseminated false, misleading and deceptive advertising relating to this policy. It is alJegec1 that the foregoing language constitutes a re.presentation that respondent's said policy may be continued to age 65 or indefinite.1y at the option of the insured. The bottom hah of the second column on page 2 of the folder contains a tabulation showing benefits and premium rates for various types of coverage provided by the F1-1- 53 policy. 10. Read in context, the statement relied upon means only what it says: that benefits never diminish after the policy is once issued. Taken lite.raJIy or with reasonable infe.rence, the statement cannot be interpreted as applieable to policy termination, whether by action of the insured or by action of the insurer. The concept of termination is neither expressed nor implicit in the language, which is no broader in scope, nor more susceptible of misinterpretation than the language contained in respondent's advertising in the matter of The Ame?'ican Hospital and Life Insurance Company, Docket 6237, as to which, on review, the Commission said: The ('.ommi:;:sion does not C'onstrne these ::;tatenwnts ::IS ha\'ing the meaning nscribed to them. Said statements can be rea:;:on::lbl~T read to rnenn only that the policies contain no provisions terminating or reducing benefits on account of increasing age * * * : nn(l the evidence is that the statements as so construed are both true. On this phnse of thf~ case the allegations of the complaint h~n-e not been sustained.

Aecordingly, it is found that respondent's statement above quoted does not have the meaning ascribed to it in the complaint. It is POSTAL LIFE AND CASUALTY INSURANCE CO. 499 494 Decision further found that the statement is true, there being no evidence this case that benefits under respondent's policy are ever reduced because of the increasing age of the insured. On this phase of this proceeding, the allegations of the complaint as they relate to the advertising of policy FH- 53 have not been sustained. 11. The G-68- 52 policy was sold by mail throughout the United States. :Mailing lists were purchased for use by respondent under an arrangement whereby the respondent was entitled to use each name but one time. Therefore, except by pure accident, no prospective customer ever received more than one of the four pieces of advertising literature which the record shows were used to promote the sale of this policy. Three of these were two-page form letters; the other was a four-page combined form letter and advertising circular. The impression made upon a prospect would result from his having received and read n. single one of these documents, not from having received or considered them as a cumulative series, as the complaint alleges. All of these documents and the policy to which they relate had been submitted to the Commission and discussed with the Commission ~s staff in 1953, at which time respondent WfiS advised that all were in compliance with the trade practice rules then in effect.. A previous examination of this same ndl'ertising mflterial, or material containing identical statements, and the same or similar policies had been made by a member of the Commission s staff in 1951 , and the same conclusion stated to respondent. 12. 1With respect to the 0-68- 52 policy, the complaint contains two charges. The first relates to renewability and is the same charge as that made with respect to policy FI-I- , to wit, that respondent hns represented that the policy "may be continued to age 65 or indefinitely at the option of the insured " and that this is false, misleading and deceptive beeanse the policy is renewable at the option of respondent only, and that the use of such false and misleading representations "has the tendency and capacity to mislead and deceive a substantial portion of the purchasing public and to induce said portion of the purc.hasing public to purchase insurance coverage from the respondent * * * " The provision that the policy is renewable at the option of the respondent only clearly and conspicuously displayed on the front page of the policy in IS- point bold-face type. If respondent's advertising statements can be interpreted to mean that the policy "may be continued to aae 65 or indefinitely at the option of the insured " then respondent is guilty, as charged, of having disseminated deceptive and misleading advertising in violation of the Federal Trade Commission Act.

Decision 54 F.

13. Excerpts from the advertising alleged to embody this representation are set forth in the complaint Paragraph 5 1. (a), as follows:

THIS POSTAL POLICY COVERS l\IAJ.'\1'Y DANGEROUS ACCIDENTS For Men, 'Vomen and Children-Ages 7 to 65 Years You receive insurance protection under this improved low cost plan regardless of your age between 7 and G5 * * * and benefits are PAID DIHECT TO YOU or to your beneficiary.

You are protected if you are killed or injured (whol1~' disabled and confined and under medical attention) from any of these common accidents that happen everyday! This extract is from the middle of the inside double page of the four-page letter-circular. It appears in no other advertising material relating to this policy, and is the sole statement upon which this charge is founded. It differs from the statement quoted and discussed in paragraphs 9 and 10, above, referring to the FH- 53 policy, but, like that statement, embodies no concept referable to policy.y continuation or termination. In the National Oa.sualty O07npany proceeding, Docket 6311, the l-learing Examiner and the Commission found misrepresentation as to policy duration based on the over-an impression created by numerous advertising statements, including phrases such as "Life indemnity accident coverage Security plan with lifetime benefits Lifetime accident benefits I understand this peace of mind and security will be mine from the first day--even for life " and other phrases of similar import contained in many of the forty-five separate pieces of advertising material introduced into evidence in that case, twentyeight of which were still being used at the time of the issuance of the complaint therein. The voluminous advertising propaganda inducing the cumulative effect which results from the continued repetition of phrases of similar import does not exist in this proceeding.

14. If the representation charged is rea.d into the advertising la.nguage used by respondent in this case, it must be by inference and not by accepting the plain meaning of the language used. One witness, a man with several.l years' experience in the Insurance Department of the State of :Missouri, having, during the course of his duties in this department, discussed insurance problems and insura.nce advertising ,,-ith many members of the public, and therefore being familiar with their interpretation of language used in such advertising, stated' that it was his opinion that persons who rea.d the statements above quoted would take them to mean "that a.nybody between the ages of 7 years and 65 years could purchase the policy being advertised. There is no evidence that the statements .. \. \, (jj) POSTAL LIFE AND CASUALTY INSURANCE CO. 501 494 Decision would be interpreted otherwise. Accordingly, it is found that respondent' s statements do not have the meaning ascribed to them, but can be reasonably read to mean only that the policies contain no provisions termina6ng or reducing benefits on account of increasing age, and that applicants for such policies must be within the - age limits specified. That being the natural meaning of the language in the context in which it is found, and respondent's G-68- 52 policy being available to purchasers between the ages stated the conclusion as to this charge is the same as that reached with respect to the similar charge relating to policy FH- , and for the same reasons, that the allegations of the complaint as they relate to this charge have not been sustained. 15. Actual deception need not be shown in a proceeding under Section 5 of the Federal Trade Commission Act. The Commission through the exercise of its "expertise ': may find that an advertisement has a tendency or capacity to deceive, and may issue an appropriate order to stop such deception. It has been said that "The. expertise' of a commission usefulJy serves it in evaluating the evidence: but that expertise can not supply evidence and can not without findings made upon the critical issues before it, guide commission to a rational and lawful decision; and that the ultimate decision reached by the Commission must follow as a matter of law from the facts found as its basis, and such facts must have substantial support in the evic1ence.4 Two courts have indicated that "the exercise of c1isc.retion, the making of judgments, and the issuance of sanctions, on basis of administrative expertise are precisely the matters which Congress intended should be under and not exempt from the Administrative Procedure Act " and that there must be basic findings of facts.

16. If a cosmetic manufacturer states that its product has rejuyenescent qualities, the conclusion is justified that the statement is deceptive, since restoration of youth to the old has never been accomplished. In such a case, the basic fact of representation established. If the respondent, in the instant case, had printed in its advertising the representations with which it is charged in the complaint, \ye might, upon examination of the policy to which the advertising refers, readily conclude, through exercise of the Commission s expertise, that the capacity and tendency to deceive are inherent in the advertisements. The respondent, however, did not print the representations as charged, but used other language which Capita.7 'lra'/l.~it Co. Pli7J7ic Utilitics Co/ll.. .. C. C., 12/10/53. 213 F. 2d lig, f; marillo-Burrlcr Ercprcss v. S., 139 F. SlIpP. '111 418; D. D. of 'Texas, Dallas Di, 1/24/51): Automubile Sale.~ Co. , 111c. Holdes, Ad/ll.I'" 58 F. Supp, 469, D. N'. Ohio, E. D., 4/27/44, 502 FEDERAL T'TRADE COMMISSION DECISIONS Decision 54 F.

the complaint alleges imports the same thing. The respondent contends that the language it used does not constitute the alleged representations. It produced a witness, who, as an expert in insurance advertising and its meaning to the public, testified in support of respondent's contention. The record contains no evidence on this issue contradicting that testimony. Thus, to support a fulding that the respondent made the representations charged, all the evidence of record relative to this issue would have to be disregarded and a conclusion as to the meaning of the language would have to be reached, based wholly on implication, inference and Commission expertise. The issuance of a cease-and-desist order in this proceeding \,ith respect to this charge cannot be justified except by reliance upon the doctrine of expertise to support a factual finding, contrary to the evidence of record, that respondent's advertising language constitutes the alleged representations. Such a substitution of the doctrine of expertise for uncontradicted evidence not \valTanted.

17. The second charge of the complaint relating to policy G-68- 52 is that respondent has represented " that adequate benefits are payable for losses resulting from accidents of the type covered the policy," whereas "in truth and in fact :I,: :I,: :I,: respondent's policy 68- 52 * * :I,: does not provide o?' oad and adequate insuranee for the type of accidents named in the policies (underscoring sup- ..J plied). Assuming, a?'g' llendo that respondent has made the representation alleged, yet it is a fact that "broad" and "adequate" are not synonyms; hence proof that respondents policies do not provide broad and adequate" coverage would not necessarily establish that :I,:such policies do not provide "adequate benefits * for losses resulting from aceidents of the type covered by the policy." A basic rule of pleading and practice is that proof must conform to the charge. Passing over this deviation as being inadvertent, and interpreting the charge to be that respondent's policies do not provide adequate. insurance, as allegedly represented, the facts will be examined.

18. This second representation alleged to be false is based upon the follmying advertising statements used by respondent and quoted in the complaint:

FIYE. 3. (a) One serious accident could wipe out ~'our life savings or put you in debt. Be sure ,;, * have adequate insurance when accidents happen.

(b) 'The policy covers many dangerous acciclents that happen e,eryday! (c) It pays you ~100.00 A j\JO~TI-I while under' medical attention for as Jong as TWELVE l\10~':rhs if you are wholly disabled and confined from (/,111/ accitZ.ent covered by this policy. , , , , , ,, POSTAL LIFE AND CASUALTY INSURANCE CO. 503 494 Decision The foregoing statements are completely out of context. They do not appear adjacent or contiguous to each other anywhere in any of respondent's advertising material. The expression "One serious accident could wipe out your life savings or put you in debt. Be Slf,1' * * * have adequate insurance when accidents happen (3. (a) above) appears only once in respondent's advertising. It is in a two-page letter of solicitation identified in the record as Commission s Exhibit No. 13. This also is the only bit of advertising containing the three excerpts, (a), (b) and (c) above, even disjunctively. The letter is on respondent's letterhead; in the upper right corner, just below the printed letterhead, in the similitude of an attached, hand-written note, appears the following: Special N'ote- 30 days Accident Insurance for only 25~ Now be protected whi.le you examine the actual policy on 11 money back guaranteed Special 1j~ price Introductory Offer! The letter is addressed Dear Friend: ; following this is a sentence in red type Here Is 'Vonderful Good News. Then come three short paragraphs in black type, of which 3. (a) above is the third; follm\ing this is a centered heading in red Special Introc1uctory Ofler " under which there are two paragraphs, the second one in red, the last sentence of which reads: "I honestly believe you ",in Eke it so well, you win ,,-ant to keep it in force. Then comes another centered statement, this time in black :Here s why: fol1myec1, on page 1, continuing over to page 2 of the letter, by a paragraph containing, in varinnt form, the quotation 3. (c) above. Follo,,-ing this is a short paragraph, then, as a sort of sub-heading, in red, the statement, 3. (b) above The policy covers many dangerous accidents that happen every day, Immediately thereafter in black, are the following two paragraphs, not quoted in the complaint. :

It pny~ ~2 000. 00 if ~'on are ki11e(1-or the ~100.00 a month disability benefit if )'ou are injured-in accidents to a 'railroad train, street car, cl,crated subway trail/ , pul.J7.ic01' sc1l00l bus, licensed ilur:icao or licensed comm.ercial nirlJla'lle on which yon are a passeJ)gf~r.

It pnys ~1.000. 00 if yon HJ'e kille(l-ol' the $100.00 a month disability benefit if Y011 are injured-in nC'ciclents to motor cllr Ol' trllck in whicll you Hle riding Ol' driving * * * by veil/!! strllc'k b)" a JlIoying yehide on any J)nbJic street 01' bigJI\Will * * * or by accident; to a nldor or tractor-ezra/en vehicle on which yon ale riding 01' c1riYing: 01' to pon;cr- projJcl1cd Il1r/ll. implement. 011 which you are riding or driving * am1 other specified types of accidents. After this are fiye other paragraphs, the first and third in red the others in black; then the printed facsimile signature of J.'V. , , 504 FEDERAL TRADE CO:.'VIMISSION DECISIONS Decision 54 F.

'Valker, Vice President. The two paragraphs last quoted also appear in every letter used to promote the sale of the G-68policy. In addition, the four-page letter-brochure lists four classes and sixteen specific kinds of accidents that are covered by this policy. 19. The expression "Be sure * * * have adequate insurance when accidents happen" must be interpreted in this context. It is not a statement that respondent's G-68- 52 policy is adequate for everyone, but rather a suggestion or urging that each prospective purchaser examine his own circumstances, his own needs, then look at respondent' s offering at 25i for thirty days, $3.60 for six months, or $6.95 by the year, and determine whether that would be adequate for his needs for the type of coverage provided. Asked by counsel supporting the complaint 'Vhat insurance would the average member of the public need to have * * * adequate insurance r' , the witness hereinbefore mentioned, from the Department of Insurance of the State of :Missouri, replied:

think that is a question impossible to answer, sir. I could not plan an insurance program for anybody without knowing all of the details of his particular situation, including his family situation, his income situation, his occupation situation.

Prior to this answer, in response to another question put by counsel supporting the complaint as to the meaning of the phrase here under discussion as used in respondent's solicitation letter, he said: I think that means, have the insurance you need for your protection. You know your needs, get the insurance you need to fill them in the event of incapacity from accillent.

There is no evidence in the record to contradict this witness' interpretation of this advertising, and it is the obvious and reasonable meaning of the language as used.

20. "Adequate" is a relative term. 'Vhat is adequate for one person may not be adequate for another. It is such a term as "amazing distance" or "perfect lubrication " under consideration in the Ii idder case 6 or "easy " as discussed in the recent TVashi'ngton 11fushroO1n ease.' In those cases it is pointed out that such terms, being relative are largely a matter of personal opinion " and in the a,bsence of clired evidence to establish that they have been used deceptively, this in casesdo not support a specific inhibition against their use where the words, without question, were used to describe respondent' s products or operations. In this proceeding a finding that the term "adequate" is used descriptively of respondent's policy would Kidder Oil Co. v. C. (C.A. 7, 1941), 117 F. 2d 89:!. OJ In the ::\Iattcr of Wa,qh'i'J/gton Jlush1'oom Indu..qtries, hlc., ct al. Docket 6273 , issued hy the Commission October 24 , 195(;' POSTAL LIFE AND CASUALTY INSURL~CE CO. 505 494 Opinion be reading into language an unwarranted implication, and would be founded upon an unjustified inference and contrary to positive evidence of record. Clearly, under the facts and circumstances disclosed in this proceeding, this charge of the complaint has not been sustained and should be dismissed.

21. Respondent contends that, in any event, its record of cooperation with the Commission, and its willingness, in the future, to conform in all respects to the law as interpreted by the Commission or its staff \yould justify a dismissal of this proceeding without prejudice. In view of the findings hereinabove made, this contention of the respondent need not be discussed further. 22. Upon consideration of all the facts of record, the conclusion is reached, as hereinabove indicated, that the charges of the complaint have not been established by reliable, substantial, probative evidence, and that the complaint should be dismissed. Accordingly, It is 0 ?Yle-re d That the Complaint herein be, and the same hereby , dismissed.

OPINION OF THE CO)IMISSIOX By E:ERN Commissioner:

Respondent, Postal Life and Casualty Insn1'I111('e Company, is charged in the ('(1mplaint in this proceeding with having (ljsseminatecl false, misleading and deceptive representations in connection with the advertising and sale of certain of its accident and health insurance policies. Respondent is licensed by I\Iissouri and seven other states, where it has agents, to conduct an insurance business. It operates a mail-order insurance business in each of the several other states and in Alaska, Hawaii, and the District of Columbia. About 70% of the volume of its business is conducted by mail outside the State of :Missouri and the seven other states where respondent is licensed.

Two groups of statements were attacked in the complaint. The first category allegedly misrepresented the renewable features of respondents policies. The second group, it is charged, misleadingly presented the extent of coverage, or adequacy of benefits, secured through respondents policies.

As to the first group of statements wherein the complaint charges misrepresentation as to renewability, the following are typical statements which are the subject of this allegation: (a) Aile BE::\'Efits REDUCED WHEN YOU REACH GO OR 65? NO! Aclult benefits never reduce after the policy is issued. (11) For men, women and chiJdl'en-Ages 7 to G5 Years. You receh-e insurance protection under this improved low-cost plan regardless of your ug-P. between 7 and 65 * * * Opinion 54 F.

The complaint ascribes to the quoted statements the meaning that respondent' s policies can be continued to age 65 or indefinitely the option of the insured and alleges such representations to be false and misleading since respondents policies are renewable only at the option of respondent company.

The hearing examiner found as to (a) above that the statement read in context means only that benefits never diminish after the policy is once issued and stated that the concept of termination by either the insured or the insurer is neither expressed in, nor inferable from, the statement.

As to statement (b) quoted above, the hearing examiner, after noting that it differed somewhat from statement (a), concluded that if the representation charged is read into the advertising language it must be by inference and not by accepting the plain meaning of the language used. I-le found accordingly that respondents statements do not have the meaning ascribed to them, but can be reasonably read to mean only that the policies contain no provisions terminating or reducing benefits on account of increasing age, and that applicants for such policies must be within the age limits specified. In other insurance cases ,,-which have been before the Commission wherein represe.ntations as to duration of coverage have been prohibited, the contexture in which the representations appeared and the eireumstances surrounding them were entirely different than we find here. In the instant case but one circular containing the questioned statement was sent to a prospect. In other case.s mentioned there was a definite. series of representations, a pattern, 01' continuity, and reiteration of the representations in many subtle and repetitive forms. In fact, in one case. the record showed that as many as thirty letters might be sent to one individual.1 l\Ioreover, in the cases mentioned the repreE'entntion "-as tied in with others which emphasized, for example, that security is afforded for older people, together with certainty of cash assistance when needed most. 1-were there is no voluminous advertising of a definitely deceptive pattern producing the "setting" present in other similar proceedings. No persuasive. argument to the contrary having been acha.need by counsel supporting the complaint, the Commission is of the opinion that the hearing examiner correctly concluded that the. aHegntions of the complaint as they relate to the charge as to " renews bility have not been sustained.

Tr(Jrelcr8 Ifc(Jllh Associ(/tioll Docket No. G252. deci(led December 20, l!)flg (pending on petition for review, C.A. 8). See also North A. Ulcrica/l. Acci.flcnt Insurancc Company, Docket No. H4fig, decided Fdmwry 20, 19fi7. , : POSTAL LIFE AND CASUALTY INSURANCE CO. 507 494 Opinion The second group of statements alleged in the complaint to misleading are quoted therein as follows:

Five. (a) One serious accident could wipe out your life savings or put you in debt. Be sure . . have adequate insurance when accidents happen.

(b) The policy covers many dangerous accidents that happen every day. (c) It pays you $100.00 A MONTH while under medical attention for as long as TWELYE :i\10NTHS if yon are wholly disabled and confined from any accident coveretl by this policy. The complaint alleges that the policy involved does not provide broad and adequate" insurance for the type of aceidents named in the policies and asserts that under the terms of the policies no indemnification is provided for loss of life: vision or dismemberment unless such loss occurs within thirty days of the date of the accident; no indemnification for total disability unless such disability exists from the date of the aeeident or is preceded by total disability, and no indemniHeation for hospital expenses unless the injury involved is one which entitles the insured to total disability or elective benefits (Joss of limb or vision) and no indenmity unless the insured is continually under the care of a physician. The representations in question v,ere noted by the heating examinet to have bee.n lifted completely out of context. After reviewing the statements in their whole setting and interpreting the statements in that context, the hearing examiner characterizes the statement as to " adequacy': not to be a representation that the policy involved adequate for everyone: but rather a. suggestiOlL 01' admonition: that each prospective purchaser should examine his own circumstances and then determine whether the yarious programs offered by respondent would be adequate for his needs. Indeed, there is uncontradicted testimony of record to the effect that "adequate insurance means simply the insurance one needs for his own protection, having in mind his own particular circumstances: including his family situa60n: his income and his occupation.

Counsel for respondent argues in eflect that the statements pleaded are not representations and are not in themselves deceptive. Counsel asserts The.y are admonitions, cautionary statements. They have nothing to do with the realm of representation or promise, and hence cannot be deceptive. ,Ye think there is merit to this contention and agree with the hearing examiner s disposition of the argument phase of the case. Asof counsel supporting the complaint on this the hearing examiner correctly recognized adequate': is a relative term, and what is adequate for one may not be adequate for another. 528577-60- :! \. Order 54 F.

'V11ere terms similar to "adequate" have been considered by the courts or by the Commission in other eases, it has consistently been held that in the absence of direct evidence of their actual deceptive use, no inhibition will be entered against them. In the instant case the Commission has concluded that it would be unwarranted in finding that respondent's use of the term "adequate is deceptive. In fact, record evidence to the eontrary is uncontroverted. Counsel for respondent in the ans\vering brief on appeal invites the Commission to give further consideration to a motion of respondent, earlier denied by the Commission, to strike and delete portions of the appeal brief of counsel supporting the complaint. Because of the foregoing considerations leading to disposition of this proceeding on the merits, the Commission deems it unnecessary to express itself further on this and other matters urged in the appeal brief and the answer in opposition thereto filed on behalf of respondent.

The appeal of counsel supporting the complaint is denied. An appropriate order will be entered.

ORDER DENYING APPEAL FROM INITIAL DECISION Counsel supporting the complaint having filed an appeal from the hearing examiner' s initial decision containing an order dismissing the complaint in this proceeding; and the matter having been considered upon the whole record, including the briefs and oral arguments of counsel; and The Commission, for the reasons stated in its accompanying opinion, having concluded that the hearing examiner s dismissal of the complaint was appropriate:

It is o?'de?' That the appeal of counsel supporting the complaint , and the same hereby is, denied.

!(iddcr Oil Co, Federal 'l' /"(ulc Colllmi.Q8iO' 117 F, 2d 892 (C. A. 7. 1941) lVa.sh. iuUlon Jlushroom Industries, Iue" et az. Docket :No. 6273, decided October 24 , 1956. NATIONAL CLEARANCE BUREAU ET AL. 509 Decision