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IAdCA 2017...A fun time was had by all!

Kasbah Pool, Omni Scottsdale Resort and Spa, Scottsdale AZ

The setting for IAdCA 2017 could not have been more beautiful – the Omni Scottsdale Resort and Spa at Montelucia in Scottsdale, Arizona. The scenery was simply spectacular and we all had rooms that gave us perfect views – if not of Camelback Mountain, of scenery equally magnificent. The conference was definitely fun, but there was also a lot of fantastic content presented by talented speakers.

For me personally, it was an honor to start our time at the Montelucia by being elected as president of the organization – a role in which I will serve for the next two years, finishing my term at the close of the 2019 conference.

As is the IAdCA custom, we opened Wednesday night with a wonderful welcome reception on the Kasbah Patio next to one of the stunning pools throughout the property. Because I was still on crutches due to a weightlifting injury, I happily sat still and enjoyed talking to those who made their way to where I was sitting. The food and drinks were appreciated and it was both a relaxing and pleasant way to start the conference.

We kicked off on Thursday with the opening keynote speaker, Joseph Jordan, who spoke on the topic of Living a Life of Significance. As a former life insurance agent and executive turned motivational speaker, he provided great content, which included an introduction to a concept that was repeated throughout the conference. I think one of the measures of a good motivational speaker is the ability to do what Joseph did: plant a seed that stays with the audience. What he talked about was the importance in our industry to share stories about how our products have touched peoples’ lives. He did so in a way that moved several people to share their personal or family stories about life insurance.

Joseph’s session was followed by two more general sessions before we moved on to the breakouts: one in which Rod Perkins, VP at ACLI was the speaker and the other was David Bolton of the Oregon Division of Financial Regulation and John Reilly of the Florida Office of Insurance Regulation where they shared hands-on information about how to make clean advertising and product submissions to their respective states. Rod had the dubious distinction of being asked to speak in two consecutive years on the DOL Fiduciary Rule – last year it was the sole topic of his general session and this year it was an obvious part of his more general “ACLI Update” session. Last year he spoke just days after the rule was finalized and everyone’s head was spinning. He did a great job last year giving us one of the first overviews and this year he brought us up-to-date on the current confusion about what it actually means to have April 10, 2017 come and go. He did a superb job in a very difficult situation two years in a row with the timing of the conference and the regulatory activity. We are certainly hopeful that he will not let that dissuade him from giving future conferences a chance to prove that the third time’s the charm!

CCS staff was busy during the Thursday afternoon breakout session schedule! Rod and I spoke on Regulatory Shifts in Standards of Care, while Glenda Bean, newly elected IAdCA vice president, spoke with Debby Paris of First Consulting on Effective Communication Tips & Tricks. In the standards of care session, Rod and I decided to broaden our discussion to more than the DOL Fiduciary Rule by including a discussion of the NAIC’s new working group on this topic and getting a bit into the weeds of how a transactional suitability standard may end up moving to a more transactional best interest standard that takes pieces of traditional insurance regulation as a transaction at a moment in time and the DOL’s fiduciary standard that changed the nature of the relationship well beyond any individual transaction. At this early stage of the NAIC effort and the ongoing uncertainty about DOL and SEC action, there are more questions than answers and we had a lively and entertaining discussion about how it could all play out – both the positive and negative outcomes that we could collectively foresee. Glenda and Debby presented on a topic that is one of Glenda’s passions. She has presented it many times and is also in the process of developing a course for our online platform that addresses this soft, but vital skill in compliance – effective communication.

Being the trooper that Glenda is, she rushed right into the second breakout session to substitute for Heidi Gabel of GamePlan Financial who was suffering from a terrible case of laryngitis. Heidi was completely unable to speak on Tuesday so Glenda agreed to take over the moderation of the Mobile Advertising breakout session. It was an easy fit for her since she is hosting a full CCS symposium (CICS) on advertising compliance around social media May 11-12 in Cincinnati, OH. She rounded out the afternoon with a session on Stories from the Trenches that she co-presented with Gary Romo of Allianz. They offered cautionary tales of recent market conduct and disciplinary actions related to sales practices and advertising compliance. While she was spinning scary yarns, our expert researcher, Kaycie Tyll, was presenting with Judith Villareal of CoreCap Investments on gifts and rebates. Kaycie has a 50-state research chart on this topic available on our educational platform (CICEd), so this session was a perfect fit for her expertise!

By the end of Thursday, the CCS team was exhausted, but exhilarated! Glenda and Kaycie went out on the town with local clients, while I hobbled to the resort’s restaurant with a group of eight for a very nice meal with great company. Friday always arrives so quickly at IAdCA and this year we all had to leave on the early side to make connections to Albany. At the last minute, Margaret Jones was added to our list of travelers because my injury made things much more difficult, both at our booth and in transit. Sadly for her that meant cross-country travel in middle seats! I must admit to feeling guilty as I upgraded to first class so that I could prop my bad leg up and move around more easily. The doctor had warned me that deep vein thrombosis is correlated to crush injuries of the type I suffered, so I felt compelled to take his warning seriously, wear compression socks, and sit in upgraded seats.

Fortunately, no adverse consequences happened and we all arrived home very late and exhausted, but feeling great about another fabulous IAdCA conference! Just like the Macy’s Thanksgiving Day Parade, the IAdCA officers are already working on making next year’s event – in Austin, Texas – even better! If you have never been to IAdCA, think about coming to Austin in 2018! If you have been once or all 16 times, make sure to put it on your schedule for April 2018 and check the website regularly for updates.

Put a #hashtag on it!

Put a #Hashtag On It

Hashtags – those little tags that turned the pound key to a hash sign – are a popular way to add searchability and a bit of personality to social media posts. But just like any other piece of advertising, they need to be reviewed from a compliance perspective. Here are some ways to go about reviewing hashtags.

  1. Understand the #basics: All the advertising rules and regulations apply to hashtags. They can’t be absolute, promissory, scary, incomplete, unfair, deceptive, or misleading. Due to their brief nature, and wanting to use tags that are punchy, clever, and eye-catching, keep these basic standards in mind to make sure that adding a few hashtags doesn’t change the overall tone of an ad.
  2. Understand the #context: What will the hashtags be used with? Do you have a copy of the entire ad? Or are you reviewing a list of possible hashtags to be used with any number of ads? The list approach can absolutely be workable; however you’ll want to make sure that you closely review the list with each applicable ad. If one of the terms is deemed inappropriate for a given ad, there needs to be some type of measure in place to ensure it doesn’t get used. For example, add within brackets on the approved ad [use any of the approved hashtags except: #XYZHashtag.] Another option would be to remove the hashtag in question from the approved list, or create more segmented lists by general product type or subject matter so that it won’t show up as an option for some scenarios. The big takeaway here is that context matters, and you need to be considering the big picture. Signing off on a list of hashtags and not looking at how they impact an ad can lead to unnecessary risk exposure.
  3. Understand #wheretheygo: Hashtags are used for searching, so it’s wise to understand what else is tagged with those terms. I can’t imagine an insurer, agent, or intermediary would be held responsible for other content that happens to be tagged with some of the same keywords, especially if it’s something as broad as #insurance. However, what if your company or firm makes hashtags specific to a company promotion? Or product? Or event? What if the hashtag is your company name? Aside from ongoing audits of what may be on the internet that’s associated with your company, when you’re reviewing hashtags, click on them. Look at what else is tagged with that content. Is it appropriate? Is it how you’d want consumers to find your company and information? Does it impact the overall ad? You may not end up making any changes, but it’s worth the time to investigate and flag any potential issues.
  4. Understand #whatworks: Hashtags are a microcosm within the marketing universe. Writing effective, timely, smart, and applicable hashtags is a skill, and also requires a fair amount of research to really understand the reach of any hashtag. There may be legitimate reasons why certain tags are desired over others. Understanding the marketing goal and why certain terms are being tagged are important for an ad reviewer to keep in mind. This allows ad reviewers to make suggestions that are in line with regulatory requirements, as well as speak to the marketing needs. Generally, long wordy hashtags are not effective. They can be hard to understand, and the more words used, the more unlikely it is someone is going to be searching for that specific sentence. On the flip side, using hashtags that are too simplistic or too broad results in content that will only get buried. You don’t need to become a marketer, but keeping the goals and length of the tag in mind can help provide more valuable feedback.

Namaste from Camelback Mountain

At the top of Camelback Mountain, Arizona

At the top of Camelback Mountain, Arizona

Another year, another wonderful IAdCA conference in the books! And this year’s event DID NOT disappoint! While we’re just settling into some spring-like weather here in upstate NY (fingers crossed…it’s still early in April, after all…), Scottsdale, AZ delivered in a big way by providing zero humidity, warm sunshine, and a view that must be experienced in person. The location (Omni Scottsdale Resort & Spa at Montelucia) is just one of the elements that made this year’s event so great; the content provided was stellar as well.

Thursday’s events kicked off with a powerful and unique discussion around Living a Life of Significance presented by Joe Jordan. Joe, a notable industry professional in his own right, shared his perspective on the importance of the industry we work in, and how providing meaningful services to consumers is the way to be successful.

With that point, I couldn’t agree more. As a compliance professional, it’s my belief that the work we do is to ensure that valuable products are made available to consumers in a way that’s fair and reasonable. By doing the right thing, success will flow.

We also got to hear from Rod Perkins of the ACLI with some industry updates, as well as a Q&A session with state regulators John Reilly (Florida) and David Bolton (Oregon.) It’s always so great to get some perspective from state regulators, and there’s a reason these two have been repeat speakers – they’re extremely approachable and helpful!

The breakout sessions covered a range of topics, and it’s always hard to pick just one session per block to attend! Those attendees that are lucky enough to come with co-workers often take a “divide and conquer” approach to make sure they can get as much info as possible. But even if you can’t get to all the sessions you’d like, there are great networking opportunities available to talk about new things you’ve learned or ask about other sessions with attendees and presenters.

Friday’s general sessions included a wonderful (and eye-opening) session on Social Media & Big Data from Randa Zalman including tips on more effective direct mail from Jim Svoboda. Finally, it was time for some general Q&A (which I unfortunately missed – it was time to head out) I’m sure this session was great to close out the conference.

Finally, and perhaps most exciting of all for us at CCS, Cailie is now officially the president of IAdCA, and I have the privilege of serving as the vice president of the organization. It’s such an honor to represent IAdCA as an officer, and I look forward to this next chapter. As I said in my last post, this organization is near and dear to my heart – this only grows truer with time.

If you didn’t get a chance to attend this year’s event, we hope you’ll be able to join us in Austin in 2018.

Another successful AICP E-Day in the Heartland!

Well, I made it home safely from the trip to Des Moines where I attended the AICP Heartland Chapter’s E-Day. It was great to see everyone, enjoy some very nice meals, and catch up on what has been keeping all of us busy – both personally and professionally! Attending this E-Day was a very nice reminder that while it is true we are peers with similar agendas to network, learn, and ultimately do what we need to so we can get the work done, we are also friends with common interests.

Those of us in the compliance profession all want to do the right thing for the companies we represent, but more importantly, for the consumers who benefit from the products we help create. I think it is this commonality of caring that truly brings us together - those with the desire for a compliant, quality product can be found gathering in groups across the country to talk about how these goals can be achieved. To an outsider, that fact alone could raise eyebrows – why do we need to go to so many meetings to talk about compliance? Obviously, if the question is asked, the understanding is lacking. We care because it is in our nature; it’s what makes us good at what we do!

While attending these events, we are all in the role of a compliance professional, but I like to think of us as kindred spirits as well. We have the same goals as professionals, but it is the recognition of the caring, like-(compliant)-minded spirit in peers that makes us friends. It was great to see you all again, my dear friends!

IAdCA here we come!

It’s hard to believe that tomorrow morning I’ll be on a flight headed to Scottsdale for the 16th Annual IAdCA Conference. I’m so excited to spend some time in Arizona, although I'm a little disappointed that we’ll be a day late - missing the Final Four excitement just by the skin of our teeth!

Camelback Mountain, Scottsdale, AZ

This is my third year attending the conference and it’s something that I look forward to each year. It's so interesting and eye-opening to have the opportunity to meet other insurance compliance professionals and hear all about the various issues, challenges and trending topics from their own perspectives. My involvement this year is a bit different than the first two because this year I had the opportunity to volunteer on the education committee and I’ll be speaking alongside Judith Villarreal of CoreCap Investments, Inc. and M&O Marketing.

Although the topic of sales inducements and rebating is one that Judith has previously presented at IAdCA, I’m looking forward to putting my own spin on the information by discussing a few case studies and several enforcement actions to get a real feel for how the offer of gifts and giveaways can easily turn into a cause for concern that could warrant a violation.

Jim Svoboda’s Direct Mail Makeover session is one that I’m especially excited about attending that is loosely related to the session that Judith and I will be presenting. We all know that direct mailing is a tried-and-true marketing strategy used in the life insurance industry, and it will be interesting to hear his suggestions, analysis, and reviews of the campaigns that other IAdCA attendees submitted to him prior to the conference.

Like Glenda Bean noted in her post, I am also looking forward to this event, the sunshine, and meeting up with industry colleagues. We hope to find some time to hike the summit of Camelback Mountain while we're there – so keep your eyes peeled for our scenic selfie with the infamous Compliance Hero!

16th Annual IAdCA Conference

Omni Scottsdale Resort & Spa at Montelucia Scottsdale, AZ

IAdCA is an organization that’s near and dear to my heart because it’s an organization that focuses exclusively on advertising compliance for insurance compliance professionals. And next week I’ll be on my way to their annual conference at the gorgeous Omni Scottsdale Resort & Spa in Scottsdale, AZ.

When I first started with ad review, IAdCA was like a beacon of light where I could meet like-minded people and learn from those that had experience in this specific area. Don’t get me wrong, there are other great organizations for insurance compliance professionals, but to have an event solely focused on advertising compliance really makes IAdCA unique!

Over the years, I’ve had the opportunity to participate as a speaker, a volunteer on the education and planning committees, and now as a board member.

Another reason IAdCA is so great? A lot of thought that goes into the program and how to provide exceptional value for attendees. This year, I’ll be speaking on two important topics – both of which I would want to learn about from an attendee perspective. Here’s what I’ll be jamming on:

Effective Compliance Communications

In this session, we’ll be covering top tips to facilitate discussions around advertising compliance issues. It’s one thing to have substantive knowledge of what the issues, rules, and regulations are. Getting buy-in from others around what changes need to be made, and why, is a vital piece of the puzzle. We’re providing practical tips that can be implemented immediately to foster connections and improve buy-in for compliance needs.

Stories from the Trenches    

No one wants to learn the hard way – fines, sanctions, consent orders. This session covers common themes that have come up in market conduct exams and consent orders directly related to advertising. I’ll be discussing specific takeaways for each of the real-life stories so that companies don’t have to wait until it’s too late to address an issue.

I’m looking forward to this event, the sunshine, and meeting up with industry colleagues. Will we see you there?

AICP Heartland Chapter E-day

AIPC Heartland Chapter E-day at the Des Moines Marriott Downtown

With the AICP 2017 Heartland Chapter E-Day right around the corner, I look forward to the opportunity to see many familiar faces as well as meeting those I haven’t yet had the pleasure. I’ve never been to Iowa, so the short trip to Des Moines will knock another off my list of states yet to visit. Rain seems to be likely, so my visit may not extend far from the hotel, but it still counts as a visit, right??

For us “Lifers” the Life, Health & Annuity topics should prove to be very interesting! The DOL Fiduciary Rule is something keeping many of us at CCS busy, so learning what others are doing to help their clients prepare will be insightful. The implications are so broad; from advertising to issue processes – one can only wonder how things will look when everything is said and done. And of course, I am very interested in hearing more about my home-state, California! I don’t know anyone who can talk about their CA filing without a groan or sigh – it is one fun state!! For those of you who don’t know, I live in CA and travel to the CCS Greenwich, NY office regularly. I love being bicoastal; each month, I get to experience the best of both worlds from sunny So Cal beaches to quaint upstate villages – what more could a girl want? 

If you know me, you know that I will be so very happy to see you in just a day or two. If we haven’t yet met, please come by the CCS exhibit and introduce yourself! I will have our famous Compliance Heroes as well as our super cute CCS Cows to send home with you, plus chocolate and CCS info if you are interested, so come on by – I look forward to seeing everyone soon! Iowa, here I come!

Standard/Duty of Care at the State Level

DOL Fiduciary Rule

Next week at the IAdCA’s (Insurance Advertising Compliance Association) annual conference in Scottsdale, Arizona, I am co-presenting with Rod Perkins of the ACLI on “Regulatory Shifts in Standards of Care.”  We had initially planned this as a session on the DOL fiduciary rule, but as all readers know what we know about the future of the DOL rule can be summarized pretty quickly: “We don’t know.”  See some of the 1,000 plus comments received by the DOL as collated by Financial Planning here.  Immediate enforcement seems off, a delay seems likely, confusion a sure thing.  But what we do know is that the standard of care owed in life insurance and annuity transactions is only going in one direction. Higher. That is coming in the context of suitability – not only on the front lines of determining what is an individual suitable sale, but also in the enforcement of annual reports to senior management. 

This week’s Bloomberg Businessweek has an article that could indicate that duties in the standard of care area could also come from another quarter: Democratic State Attorneys General.  Especially if the Trump administration does pull, water down, delay, or ignore enforcement of the DOL fiduciary rule.  In a piece called Blue State AGs: The Dems’ New Resistance, Erik Larson, Esme E. Deprez, and Kartikay Mehrotra, say “since the election, Democratic AGs have almost daily conference calls.” There is nothing in the article to suggest that the standard of care owed in insurance transactions is on this group’s radar – they are busy with the travel ban, other immigration issues and environmental protection regulations. But that does not mean that we won’t hear from them if the DOL’s rule gets rolled back like the EPA’s regulations. The article puts forward a reason why we very well could see such action: It explains this way: “Serving as a state attorney general is ‘probably the most direct path to higher office.’ Says Chris Wilson, founder of WPA Research, a political strategy firm. He should know: His firm did polling and data analysis for [Greg] Abbott’s gubernatorial campaign. In Texas, Abbott was able to run on his record of suing a locally unpopular president [former President Obama] more than 30 times. ‘You can build an entire campaign for higher office around that.’ Says Wilson. ‘The flip side is that you’re going to see a lot of Democrats angle for the same thing.’” How easy does it sound to campaign on the sound bites around the fiduciary rule? The details of the complicated exemptions and the challenge of effective and meaningful disclosure get lost so easily.

As is so often the case, those who would cheer the loudest at a roll-back of the DOL fiduciary rule may be sorry what they wished for. The reality is there are market place abuses and there should be a clear standard of care in insurance transactions, if not relationships. I would like to see that come from the state regulators who really understand the market and the abuses happening there. Suitability is a big step toward that standard of care, but the number of problems still out there make clear that it isn’t enough as currently written and enforced in most states. Companies with strong programs don’t get rewarded with more sales because those with weak programs don’t get penalized by fines.

Perhaps if the DOL rule becomes a footnote in history that never really came to pass and the state AGs become more active in this area again – like some were when the first suitability rule was drafted – that calculation will change. Perhaps state regulators will pick up the mantle and write new regulations or revise and enforce existing ones. Perhaps the DOL rule survives the Trump administration confusion on what to do and becomes effective. One way or another, it seems likely a higher standard of care is coming. Shouldn’t we, as an industry, get out in front and work with state regulators on what that should be rather than waiting to see what might happen in Washington DC or in court?

Training and Education: 4 Key Ways Your Business Benefits

1) Affordability

Investing in training and education is one of the best ways to make the most of your resources and budget. New employees are better able to hit the ground running when there is a focused training program in place. Looking to maximize your current resources and improve the existing capabilities of your department? Training and education is the answer!

2) Competitive edge

Stay on top of current regulatory requirements, issues, and risk mitigation techniques to give your company the competitive edge. By overlooking this area, you might unknowingly end up behind the 8-ball.

3) Protection

Demonstrating a commitment to compliance is one way to protect your company. Having a training program allows you to document your commitment, as well as create records showing what’s been offered, to whom, and when. If there’s ever a question about who was told what, a formal training program can provide you with the documentation you need.

4) Doing the right thing

Frankly, spending the time to educate your employees and/or distribution partners is one way to do the right thing! “Right” and “wrong” are subjective, but “do to others as you would have them do to you” is one of the universal principles that many support. Ensuring that your team and distributors are educated means you’re making sure that clear limits about acceptability are established and followed.

Are you interested in learning more about our training and educational services?

We're happy to help! The Currin Insurance Compliance Education Program (CICEd) is a comprehensive training platform. Webinars, online courses, customized training, presentations, and research all crafted to support your compliance needs.

You can view this free course that breaks down the different educational services we offer. From there, feel free take a closer look at the other courses we offer online. We are diligently working to add more online courses as soon as possible. In the meantime, please don't hesitate to contact Glenda Bean, Director of CICEd, if you have any questions about what's available now, what might be coming soon, and/or personalized training (in person or video). Enroll in CICEd today...there's no charge to start exploring!


Rebate, Gift, or Inducement – What Does It Matter?

Everyone likes to get something extra, something for free, a little treat, right? Buy one pair of shoes, get another one half off. Buy a $100 gift card, get another $25 gift card for free. No big deal, right?

But if we’re talking about gifts in connection with the sale of insurance or annuity products, it IS a big deal, and one that can land you in hot water with state insurance regulators. Most insurance departments have published regulations that limit what, if anything, an insurance agent or carrier can give to prospective or existing clients as a gift. Some states have what I call a “zero tolerance” for gifts of any kind that are offered as a means to induce a consumer to purchase an insurance product. In these states, their rules generally state that gifts “of any valuable consideration or inducement not specified in the policy” are prohibited.

Other states have similar wording in their regulations, but they still allow gifts up to a certain limit to be provided, with amounts generally in the $5-50 range per consumer, per year. There are outliers, though. For example, the state of Idaho includes this same wording in their regulations, yet has the highest limit of $200 per person, per year. It’s also important to note that some of the states that do allow certain gifts not only have a monetary limit, but only allow the gifts to be given if they are unrelated to and not dependent on the purchase of insurance.

Whether you call it a rebate, a gift, or an inducement, the basic premise of the rule is the same – state insurance regulators want clients on even footing when it comes to the policies they purchase. To pass the rebate test in most states, any benefit must be expressly stated in the insurance or annuity policy, and provided to everyone who purchases the product. This also helps to ensure that consumers are not influenced to purchase a product primarily because of the gift, and that they have a real need for the product itself.

According to the NAIC Unfair Trade Practices model regulations (Model Reg 880-4(H)(1)), “Paying, allowing, giving or offering any of the following, if not specified in the contract, is an unfair method of competition and an unfair or deceptive act:

Rebates of premiums payable on the policy; special favors or advantages in the dividends or other benefits; any valuable consideration or inducement not specified in the policy; giving, selling, purchasing or offering, as an inducement, any stocks, bonds or other securities, any dividends or profits accrued, or anything of value not specified in the policy.”

So, what does this mean, especially for insurance agents? What exactly is a rebate? In some states, a rebate means a gift of value, such as cash, a gift card, a fruit basket, or some other tangible gift or object. Other states, however, may consider it a rebate if an agent holds an insurance seminar and serves a nice meal. The cost of that meal, per person, may need to comply with the states’ rebating limits, or the agent runs the risk of a state enforcement action for violating state laws. The same issue may apply with a client appreciation event, such as wine tasting party, golf outing, or other similar events. To determine if the event is in line with their rules, many states will calculate the cost of the event, including all possible variables, such as food, drink, cost of entertainment, etc., and divide it by the number of attendees.

Insurance companies and agents often conduct business in multiple states, so being familiar with and staying current with each states’ position on rebates is important. Take a look at what we have to offer and let us do the work for you. Enroll today!

NY Circular Letter Raises Some Questions and Concerns

NY State Circular Letter

I totally get that insurance companies shouldn’t be denying death claims only because they occurred within two years of policy date. But is there an issue here that deserves some positive attention, and not just rebuke?

The NYS Department of Financial Services issued its first Circular Letter of 2017 in January, warning insurers not to rescind policies when beneficiaries fail to provide medical records of the deceased. We understand that New York will not be allowing companies to require beneficiaries to provide someone else’s medical records. This makes sense.

But what’s a company to do these days when it suspects that the deceased misrepresented a material fact on a life insurance application?

Times have changed with respect to medical privacy since HIPPA went into effect 20 years ago. And the headlines about identity theft and the collecting of electronic information about individuals have put personal privacy on everyone’s radar. Justifiably, medical providers are more than a little wary of releasing records. I’ve had some trouble getting my own records, and my doctor actually knows me!

Insureds generally sign a release of medical records on a life insurance application. But we believe that it’s not clear to anyone that the release remains effective upon death. And in New York, the release only lasts for two years, so the release could expire during an investigation. When in doubt, medical providers will err on the side of “don’t release.” So it appears that the insurer does not have any clear way to view a deceased insured’s medical records.

In this circular letter, which directly addresses death claims and their investigation within the 2-year contestable period, we would have liked to see the Department offer some advice on what actions it recommends insurers can take to determine material misrepresentation. The letter somewhat felt like it was shining light on a situation where a very sick person can lie on an insurance application, and the insurer’s hands are tied to do much about it. Claims must be paid promptly and fairly, the letter reminded us, even when misrepresentation is suspected.

One tack could be that companies investigate every application and take every case to court when an insured dies within the contestable period; but that solution does not feel like it’s best for everyone involved.

So the question remains; what’s an insurer to do? Can you give us a hand, New York?

Social Media & Advertising Compliance

Social Media and Advertising Compliance

Ah, social media – a topic that continues to grow and draw interest year after year for marketing professionals, compliance professionals, and the insurance industry as a whole. The NAIC published their Social Media Whitepaper in 2012, and while it’s certainly a great starting place for contemplating advertising compliance issues, there are a lot of questions left unanswered. There’s also the fact that, between 2012 and 2017, how we consume social media and what tools are offered has changed tremendously – and continued change, at faster rates, should be expected.

Let’s look at videos, for example. YouTube was around back in 2012, but Vine (a short-form video hosting service, acquired by Twitter) was just getting started. Vine’s popularity soared and was considered to be the most-downloaded free iOS app from the App Store in April of 2013. I will note that Twitter has now made it so that Vine users (via the app, now called “Vine Camera”) can only share their videos on Twitter, or save them to their camera. But the point isn’t how long these services last – it’s about their monumental impact on how people are consuming information today.

The thing to take away here is that the whole purpose of this service is to create very short (six seconds) videos. These videos are then played on a loop for the world’s viewing pleasure. The attention span of the social media consuming audience is not 30 minutes, it’s not even 30 seconds. That alone can translate into a huge advertising compliance issue.

This hyper-shortened viewing style is also a huge part of another apps’ success – Snapchat. With Snapchat, you take a picture (of yourself, your dog, your food, your crazy neighbor howling at the moon) add some comment to it (preferably witty) and send it to your buddies. The thing is, the image only displays for a matter of seconds, and it can only be viewed by the recipient twice, then it’s gone. Can you say record retention issue?

Or how about the live streaming of videos – content broadcast to the world, in real-time. Live streaming options can be found on Facebook, YouTube, Instagram, Periscope (owned by Twitter), and many, many other apps and services. Consumers want authenticity. They want to “talk” to people in ways that are comfortable (i.e., not on the phone). They want to see the real people behind brands and companies. Get their questions answered in real-time. But putting yourself, your company, and/or your products out there unscripted, and more importantly, with such ease (we’re literally talking press a button and go – no recording studios, no TV sets or radio stations – click button and you’re on air) can lead to a host of advertising compliance issues.

And there are other compliance issues for social media to keep in mind as well – privacy and data security, for example.

There are lots of things that insurers and agents can do to stay on top of advertising compliance on social media. First, have a written policy in place even if the policy is that your company and/or agents cannot engage in social media on behalf of your company – put it in writing.  Some things to consider include the scope of the policy, the purpose, definition of social media, best practices, restrictions, monitoring, and failure to comply.

As a general rule, do not use social media to sell products. Remember, you only get seconds of someone’s time. It’s just not enough to ensure full and complete information is being presented. And finally, do not underestimate the need to have exceptional record-keeping. You must be able to easily demonstrate that ads are in compliance with state insurance advertising laws. If you have agents, or you are an agent that is also a securities licensed individual, there are additional rules outside of state insurance laws that must be followed. 

Want to talk more about social media? Leave your thoughts and questions in the comments below or send them directly to Be sure to check out our upcoming symposium in May!

Compliance under Trump, Part II

Compliance under Trump

A few weeks after the election I wrote a post about a Wall Street Journal piece that asked whether compliance was dead under President Trump. At that time the question was forward looking as the new administration had not yet come into power. Now, with just a few weeks of experience with this administration, the answer to that question is starting to take shape.

On January 30, President Trump issued an Executive Order on Reducing Regulation and Controlling Regulatory Costs. In the Purpose of this section the order states: “[i]t is important that for every one new regulation issued, at least two prior regulations be identified for elimination, and that the cost of planned regulations be prudently managed and controlled through a budgeting process.”  That one-for-two concept is reiterated in Section 2. Regulatory Cap for Fiscal Year 2017, Subsection (a) states “Unless prohibited by law, whenever an executive department or agency (agency) publicly proposes for notice and comment or otherwise promulgates a new regulation, it shall identify at least two existing regulations to be repealed.” 

As someone who has made her career in regulatory compliance, this makes my head spin! There are outdated regulations that no longer serve an important or current regulatory purpose. There are regulations that were poorly conceived and therefore do not advance the regulatory purpose they were designed to address. There are overly complicated regulations that result in unnecessary compliance challenges. These, and other similar, regulatory issues should be addressed. However, a one-in to two-out concept for reducing regulations, which does not even look at the regulatory purpose (the benefit) of the regulations being added or removed reflects the notion that a smaller number of regulations is better regardless of the need or purpose for the rules. In my decades-long history in regulatory compliance, that is simply not the case. In fact, in my experience, there is nothing simple about effective regulation or regulatory reform.

One reason it is not a simple matter to reform a regulatory framework in any industry, but especially in financial services, is that typically a cost-benefit analysis is the approach used. Bloomberg Businessweek’s February 13-19 issue discusses some measurement challenges in Brendan Greeley’s article Trump’s New Math on Regulations. Both sides are hard, but there appears to be little doubt that measuring the benefit of a regulation is more difficult than measuring its cost. In Trump’s Executive Order, though, we don’t have to worry about measuring benefits. He makes clear that only one side of the equation matters: cost. He states in Section 2.(c) “any new incremental costs associated with new regulations shall, to the extent permitted by law, be offset by the elimination of existing costs associated with at least two prior regulations.” Section 2.(d) of the Executive Order goes on to state: “The Director [of the Office of Management and Budget] shall provide the heads of agencies with guidance [that shall] address, among other things, processes for standardizing the measurement and estimation of regulatory costs; standards for determining the costs of existing regulations that are considered for elimination; processes for accounting for costs in different fiscal years; methods to oversee the issuance of rules with costs offset by savings at different times or different agencies; and emergencies and other circumstances that might justify individual waivers of the requirements of this section. The Director shall consider phasing in and updating these requirements.” 

In my experience, regulatory agencies are not populated with people who like regulations for regulations’ sake. Instead people who work in regulatory agencies are committed to serve the purpose for which the agency exists and they see regulations, compliance with regulations and enforcement of compliance as an effective way to change individual and corporate behavior to accomplish the goals of the agency. That is not to say that we all agree on what the goals should be of any agency – certainly that is not the case. But to remove benefits from the equation makes the analysis simplistic in a way that, in my opinion, denigrates the importance of regulatory compliance in serving the public good. Even if one believes in limited regulation, presumably that limited regulation has to be effective, not just cheap.

I am not opposed to any discussion about whether a particular regulation or a group of regulations is actually beneficial or even to arguments about how much any benefit may be worth to us as a society. But I am totally opposed to the concept that any regulation is a bad regulation and that any regulation has merely a cost element and no offsetting benefit.

The suggestion that the only thing that matters is the cost of a regulation is just a way of saying that all regulations are bad. Some may be “more bad” than others – but it is not those that are less effective or those that do not have a clearly identified purpose – no, those that are “more bad” are those that are more costly, however that is calculated and regardless of their benefit.

This simplistic approach to regulatory reform may have another consequence, one that a Thomson Reuters article dated February 14, 2017 calls “Slow-rolling” by agencies. Richard Satran, writing for Thomson Reuters’ Regulatory Intelligence notes that “Reversing regulations that strike at the heart of an agency’s prior work may be even more difficult than passing new ones…The president cannot simply issue an executive order rescinding regulations he does not like. [said Rachel Augustine Potter, assistant professor of politics at University of Virginia] The process requires research, stakeholder meetings, publishing of proposals, comment periods and final publication. Delays can occur at any of these stages.” 

Andrew Kent, a law professor and constitutional expert at Fordham University is also quoted in the Regulatory Intelligence piece. His analysis is another justification for considering the benefits of existing regulation: “In a bureaucracy there are a lot of different ways people can slow down presidential initiatives they don’t agree with… And given the things this administration has been saying about agencies’ work, it is pretty likely that will happen.” 

DOL Fiduciary Rule

DOL Fiduciary Rule

If you are like me, you are very interested in what our new president will decide to do with the DOL Fiduciary Rule with its first implementation date of April 10, 2017 looming. Given the implications, there are a good number of folks holding their breath in hopes that it will be repealed. For these folks, Trump’s repeal of the DOL Fiduciary Rule will likely turn into a big sigh of relief, but what about everyone else? The work to prepare for and implement the rule’s requirements has been nothing short of daunting. Many agents, agencies, IMOs and carriers started the long and arduous process to be ready many months ago, and this puts them in a good position should the rule survive, but what if it doesn’t? What, if any, benefits result from the progress they have made? 

Registered Investment Advisors and Investment Advisor Representatives (“advisors”) have always been subject to fiduciary standards. Some would be happy to go back to arguing they are “better” and should have a competitive advantage with consumers over insurance-only agents who are not now, and if the rule is repealed, would not become subject to those standards. ( Advisors argue that the fiduciary standard is much different from the suitability standards that apply to the sale of insurance products no matter who sells them. 

The DOL rule hasn’t become dinner conversation beyond our industry. Nonetheless, if it is repealed, the issues and perceptions that led to its adoption and to including insurance products will not go away. There is a clear perception that those who sell insurance products and are not now subject to fiduciary standards act in their own interest rather than the interests of their clients. So it seems quite possible that the DOL rule, repealed or not, will become the catalyst for change within our industry. 

So, what happens next? We are not convinced that our industry can stop preparing for the DOL. We think it is likely that even if it does not become effective as it currently exists, changes will come that will change the standard of care owed to consumers, perhaps at the federal level and perhaps at the state level. 

We recommend continuing to prepare for compliance and our clients are choosing that path – at least for now. Regardless of what will flow from the president’s executive actions, we continue to help our clients navigate reviewing their advertising materials, agent agreements, and incentive offerings. In addition, on-site, online, or remote training is recommended for your home office and field personnel. We have found in-person training to be the most effective as it can be developed with your specific organizational needs in mind. Policies and procedures reflecting impartial conduct standards of care are in place for many companies, but not across the board. We would be happy to help you look at what you have done, what might still need to be done, and what a repeal might look like for your organization. 

This is a time of great change and it can be overwhelming, but one thing we can do is focus on strong relationships with consumers and making sure that no matter what happens with the specifics of this DOL rule, our products are sold in a way that is respectful and takes into consideration the best interests of consumers.

Interesting Question

I was reviewing a life insurance application recently, and came across a yes-or-no question about whether the applicant’s driver’s license was suspended.

Hmmm. Interesting question.

I was reviewing the application for compliance in New York. The Life Insurance Application Outline says no question may be asked about past arrest or imprisonment; questions are allowed only about past convictions or a pending legal matter. A suspension certainly means something happened in the past, and maybe it was a conviction, but maybe it wasn’t.

A license can be suspended for obvious reasons, such as driving without liability insurance, DWI, and failing to pay a traffic ticket fine.

But the state can also suspend a driver’s license for failure to pay child support, and for owing more than $10,000 in taxes without a plan in place to pay it back.

I could not guess how the Life Bureau might react to the question (Is your driver’s license suspended or revoked?) given the possible connection to dubious financial matters.

So I called the Department.

The answer was not obvious to the attorney I asked. Unwaveringly polite, she said she’d get back to me. Which she did, after conferring with others at NYSDFS. And it turns out that the question is allowed.

I was surprised. I had put the odds in favor of the Department not allowing it. But the surprise was pleasant.