Insurance Marketing Compliance
When advertising insurance, there are several marketing compliance rules that must be followed. When a person or a company does not follow these rules, they could face losing their insurance licensing, having their marketing materials pulled, and even being financially penalized, depending upon the severity of their marketing non-compliance. It is important for a marketer to look at their standards, as each state is different in regards to insurance marketing compliance.
What You Must Avoid
Publishers who are marketing insurance to the public, have to be extremely careful about how they word their marketing materials, as well as what they offer. Here are a few things that must be avoided:
- Never use the word “free”, as insurance is not free, and by using this word, you could be setting yourself up for a legal situation;
- Using the trademark names as a way to rank higher or for competitive reasons;
- Failing to keep records of your marketing;
- Failure to disclose costs and other issues in fine print.
There are several other aspects to avoid, but these are the major components that you must be sure to actively avoid while marketing insurance.
The Compliance Areas
The marketing compliance covers the following areas:
- Services Offered: The Company must be honest about the services they provide.
- Licenses: All companies must have valid licenses required by the state they operate in.
- Information Disclosure: All information must be disclosed to existing and potential clients. This may include what happens to their personal information, hidden costs and the like.
- Record Keeping: All businesses must keep records regarding their business, including the way in which they market their services. Electronic record keeping is the best option as this is often seen as the most effective record keeping method available. Simply keeping paper records will not be acceptable should the company be audited.
What Happens When Compliance is violated?
Should an publisher violate these compliance rules, it can result in serious consequences. Depending on the type of insurance an publisher is promoting, it will determine what compliance rules that they have to adhere to.
Companies can lose their license to practice, and the employees who commit these compliance blunders might no longer be able to practice in this field. Compliance rules make it easier for publishers to market insurance effectively. These compliance rules are not meant to penalize or burden the business but help to keep the market safer and honest for all those involved.