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).”

Marketing and Compliance

Today I leave Omaha, NE after attending the Insurance Advertising Compliance Association (IAdCA) Conference. I like this conference because of its smaller size and the way marketing and compliance folks come together and really engage with each other on advertising compliance issues. This year I presented twice on preparing for and handling market conduct exams. Interestingly, the two offered very different discussions. It would have been great to have all the participants in one session because I think each would have benefited from the discussions held in the other session. But that is not what was….

In the second session we had a discussion about how much marketing should be responsible for generating compliant pieces out of the gate, which was quite interesting. A couple of companies were moving some of that function out of compliance and putting it in marketing. I am a big believer in the compliance department’s obligation to not just say no, but to provide solutions…to provide a road map illustrating how marketing can both stay on-sides with the applicable regulations, but still make the point they want to make. In order to do that, compliance needs to know what marketing really wants to say, what they want the message to be, what they would say if they could say anything they want to. Compliance is the department that has the expertise to show them how to do that within the regulatory framework. But if marketing is creating pieces already trying to step into compliance’s head, they won’t do what they do best. And they won’t do compliance’s job well either because that is not what they are trained for and best at. Even if compliance is still reviewing the pieces, I think that approach does two things; it makes marketing less effective and it makes compliance less effective.

Instead, I recommend letting marketing do what they do best; use their creative energies to sell insurance products. But then compliance needs to do what it can do better than anyone - review those pieces carefully and make clear suggestions about how the piece can be changed, if necessary, so that the message stays clear but the piece does not bump up against unfair trade practices. It was discussed here at the conference several times, and I could not agree more, that marketing is generally open (not necessarily happy….but open) to making changes when there is a clear statement of what the regulatory issue is and suggestions made regarding alternatives.

When I work with companies on organizational and structural issues related to their compliance departments, I think it is important to stress to the compliance staff that their job is to provide the way, or better yet alternative ways, to accomplish the corporate goal. It is hard - and tiring - to be seen as the department that just says “no” and is the obstructionist. But if a compliance department is strong and is trained and empowered to provide real solutions, not only does their job become more rewarding, but now the company is getting the most value from their expertise in the regulation of insurance.

I don’t want you to be afraid to let marketing come up with the best pieces they can, using their talents as creative people. I want to see your compliance department be there, ready to work with marketing collaboratively to end up with a final product that both departments can feel proud of and confident that it won’t lead to market conduct problems. Let each department play to its strengths and a better product will result!