US/Canadian insurance marketers – Your regulators are watching you …

Whether you are in the US or in Canada, if you are in the business of insurance compliance, you know that the regulators are watching you. Few industries are so heavily regulated.

In this two-part article, we will discuss the compliance issues and exposures insurance companies (and their compliance professionals) face when they bring their product to market:

PART 1 – REGULATING US INSURANCE MARKETING

 In the US, compliance is especially complicated because every state has its own version of laws and guidelines covering every aspect of selling insurance – including advertising. This makes the life of compliance professionals especially complex. In conventional financial services organizations where, regulatory oversight is executed by a small handful of agencies. But for those responsible for keeping their insurance firms on the straight and narrow, there are 50 different agencies – each with its own special rules – policing your firm’s activities.

What are US regulators looking for?

How you communicate with clients and prospective clients. That means your marketing materials – your ads in publications, on the radio, and on television. Your web content, your brochures, and your display materials. Everything you create designed to convince individuals and business clients to buy your product. Everything.

 Protecting consumers from…bad actors

Like every other aspect of doing business in the financial service sector, insurance regulators monitor marketing materials to protect the public from fraudulent claims or implied inducements, ensure they comply with (50) state laws, and include appropriate disclosures.

According to Reporter Dyanne Weiss, writing in the Houston Chronicle, like other regulatory bodies, insurance regulators pay particular attention to sales pitches for products geared to seniors – in particular for marketing materials for long-term care coverage, life insurance, and Medicare supplements. Many states such as Texas, Weiss says, require prior approval for advertising materials for some senior products, such as Medicare supplements, at least two months before the materials are distributed.

Are regulators watching what you say?

Yes. All states ban advertisements that include untrue, deceptive or misleading claims. Several states have laws about promoting tax benefits; most have rules on advertising premium savings.

For example, Massachusetts will not permit car insurers to advertise that every driver who switches to them will save money. Michigan insurers cannot imply an insurance policy is an investment – hence words like “investment” or “savings” are prohibited.

Must you keep records of your marketing materials?

Yes! You must keep copies of your marketing material and records of how they were used (mailed/posted online, etc.). How long you have to hold on to those varies by state. Texas expects you to save your records for at least three years; Michigan wants you to retain content for four years.

In Missouri, your ads and marketing material will be compared to those of your competitors as the state’s regulators look for significant departures from the “norm.”

Must you control your agents’ message?

It’s a good idea to monitor and control how your insurance agents market themselves, your products, and your name. Most state regulators expect you to keep a tight rein on ads using your name – even when they were placed by outside agents. They will want proof you gave them written approval.

Some states, even stipulate what can appear on an agent’s business card. California, for example, requires insurance agents to print their license number on their business cards in the same size type as their address or phone number.

How do you keep up with so many regulators?

That’s where Patrina comes in. We’ve built our business based on helping organizations stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective and comprehensive, 8-module compliance solution, and compliant data capture, file storage, records archiving, and designated third-party services specifically designed for the financial services community. Be smart. Be covered.