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NY OGC Opinion on Agent Website Advertising

The NY Office of General Counsel issued an opinion recently that addresses a question about website advertising. While the question and answer were pretty narrowly drawn, it is always helpful to get some additional insight into how the various insurance departments are dealing with electronic advertising issues. We get a lot of questions about various advertising programs and methods and so additional regulatory insight is fantastic!

Here the inquiry was regarding an agent who wanted to post sample rates on his or her website without attributing them to a particular company. The agent wanted to know if that is allowed and the NYSID said clearly that it is not. The opinion says that if one is quoting rates, they must be a particular company’s—otherwise they would be misleading, deceptive or illusory. And then because they refer to a certain company’s rates, that triggers the §2122(b) mandate that every advertisement referring to an insurer must identify the insurer and provide the location of the insurer’s principal office.

In my practice, I am often asked to apply very old advertising laws and regulations to new media—particularly social media. So I appreciate this opinion and look forward to more guidance from departments on electronic and, especially, social media.

Social media is where I find the questions to be the toughest, but also the most interesting. Legally interesting and socially interesting—it is where marketing is happening. This NY opinion requires that an agent or broker wanting to tweet about some new rates or product feature they’ve just seen, be sure to allocate enough characters to identify the company and principal location of the home office. (Of course, they must also comply with all the other advertising requirements—including any home office approval, copy for advertising file, etc.)

But what about other disclosures? This opinion notes it assumes the inquirer only “represents insurers that are authorized to do an insurance business in New York.” The issues get a lot more complex without that assumption. With even one complicating fact like representing a company not authorized in NY, the required disclosures are likely to exceed the total space available in some media. After decades of moving towards more and more disclosure as a means of regulation in all consumer industries, social media turns that all upside down. Disclosure doesn’t work in 140 characters. The challenge for all of us, I think, is to find new ways to achieve fairness in the market when the most important advertising media won’t allow you to just push more words at the consumer. That is a big challenge, but one that I don’t think is going away.