Writing in Insurance Forum, Harry Lew, a chief content officer at the National Ethics Association, says non-compliant advertising is an evergreen regulatory issue. Advertising, he says, is a powerful tool for establishing initial prospect (and ultimately client) expectations. If the content misleads them into expecting something other than what they’ll receive, the stage is set for complaints, lawsuits, and errors-and-omissions insurance claims.

Lew’s rules

1. If you are trying to get someone to think something or do something, it’s advertising. According to the National Association of Insurance Commissioners, advertising is any communication “designed to create public interest in life insurance or annuities, or in any insurer, or an insurance producer; or to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace, or retain a policy.”

2. Review everything. If your ad content references a company’s products, even without naming the company, says Lew, you must submit the content for company review before actually using it in the field. Change the copy, get another approval.

3. File everything. This includes, says Lew, filing advisor recruitment ads, along with sales concepts and visuals used in sales training, for company review.

4. Content must include all material facts including key conditions that must exist for someone to receive benefits under the policy. Fully identify the product being promoted, including the company underwriting it, the product type (annuity) and the product sub-type (variable annuity). If you use a company’s trade name in an ad, include the full legal name somewhere in the ad. When citing facts about a company’s financial condition, size, or investment portfolio, all data must be correct and current. The same is true for all discussions of company ratings.

5. In prospecting, Lew says, always fully identify yourself as a “licensed insurance agent” or “licensed insurance professional” and state the reason for your approach (to discuss the sale of life insurance, annuities, etc.). Avoid titles such as “investment advisor” or “securities representatives” unless you are properly licensed to sell such products and offer services.

6. Statistical data used to trigger interest or strengthen arguments must be fully sourced, including the origin of the information (researcher, author), the name of the publication, and issue date. Avoid using language or charts or graphs that lead a prospect to draw an incorrect conclusion.

7. Avoid statements of opinion, or if an opinion is expressed, clearly label it as such.

8. The product being promoted must be insurance department-approved in the state in which the ads will run. If they are not, you must state that in the ad.

9. Advertising that discusses non-guaranteed policy elements such as interest rates must make clear the element isn’t guaranteed and must also state the guaranteed value for that element.

10. All charts or illustrations that project future values must explicitly state they do not represent actual amounts to be paid in the future. Content must also describe all elements that might impact such values such as surrender charges, cap rates, and market value adjustments.

11. When discussing the tax implications of purchasing or holding an insurance product, explain the basis of for such statements. Also, provide a caveat stating that the discussion doesn’t constitute legal or tax advice and that the consumer should consult with his or her attorney.

12. In promoting the sale of annuities, refrain from using terms such as “CD annuity,” “certificate of annuity,” “investment account,” or “savings plan.” Never say “deposits” or “contributions” when you mean to say “premiums.” Avoid words that suggest the best or ultimate value, including “highest,” “lowest,” “safest,” “unique,” unless you can factually support your claim.

Bottom line – track everything

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