Producer Advertising Session at IAdCA in March

Excerpt from Insurance Compliance Insight, Jan. 30, 2012 posting:

“Materials, Regulatory Impacts on Insurers, Fraud Management

It is one of the most critical areas of insurance advertising, yet one that not every company addresses properly.

We’re talking about the review of producer-generated advertising and marketing materials – an evergreen issue on regulator’s watch lists that can lead to sanctions if an insurance company doesn’t have a good compliance plan to monitor them.

If your company doesn’t have one, or it could be improved, consider attending the annual meeting of the Insurance Advertising Compliance Association. The IAdCA meeting is March 28-20 at the Hyatt at Olive 8 Hotel in Seattle, and will feature a session about producer advertising from industry compliance expert Cailie Currin, president and CEO of Currin Compliance Services.

It is one of three industry meetings in the next few months that should be of interest to compliance professionals. Also coming are the annual meetings of the National School on Market Regulation and the Insurance Fraud Management Conference.

The IAdCA is ideal for those involved in the creation and compliance review of advertising and marketing materials. It’s the best place there is to find out how to meet legal, compliance and marketing requirements and still preserve the sizzle in your company’s marketing materials.

Knowing what producers are saying in the marketplace is one of those compliance requirements that can’t be ignored. “If a company doesn’t know what’s out there, they could have a liability issue,” warns Currin, whose company has a staff dedicated exclusively to advertising and producer compliance. It sees a lot.

“Regulators are looking at invitations to sales seminars, and companies should, too,” she said. Insurers should also watch to see how their producers are referring to their products.

“We look at ads that no one else is reviewing regularly and see producers not calling annuities what they are – annuities. Instead, we see them calling a fixed indexed annuity a ‘safe money account’ or a ‘smart money account,’ rather than what it is.” Currin says she and her team also have seen producers discussing guarantees that could be misleading as they pertain to what’s actually guaranteed in the insurance or annuity contract. One common problem: comparisons of insurance products to certificates of deposit.

Currin will be discussing ways to address such issues, and her presentation will be packed with examples of producer advertising, both good and bad. She said the presentation will be “on an advanced level,” so expect more than Producer Advertising 101.

Also on the IAdCA agenda are several sessions about social media, a regulator panel featuring Leslie Krier of Washington and Jim Mumford of Iowa, who will talk about advertising filing procedures, advertising violations, specific state advertising regulations and what is expected of companies doing business in those states.

The meeting will also feature discussions about:

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  • fixed and variable life insurance and annuities;
  • health insurance;
  • long-term care insurance;
  • property & casualty lines;
  • state market conduct issues and developments;
  • variable product advertising;
  • Internet advertising compliance;
  • threats associated with today’s technologies and how to use them responsibly.

The meeting also features a keynote speech about leadership by Howard, Behar, one of the founders of Starbucks. Register by Feb. 8 and you’ll have a chance to win one of 10 copies of his book, It’s Not About the Coffee: Lessons on Putting People First from a Life at Starbucks.

Registration information and the agenda are on the IAdCA website. Registration is $575 for first-time attendees and $475 when more than one person is attending from the same company (with a $50 discount for those who have attended previous IAdCA meetings).”

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.