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The Complete Guide to Insurance Advertising Compliance

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FM Engage

Insurance marketing compliance is serious business.

That’s because insurance ads are held to a higher standard than many other industries, and insurance marketers have more hoops to jump through than the average advertising professional.

Insurance advertising is held to high regulatory standards for good reason: to prevent companies from misleading consumers and prospective purchasers, either intentionally or unintentionally.

Consequences for failing to comply with marketing compliance laws can range from cease and desist letters to sizable lawsuits. But in addition to avoiding penalties, maintaining compliance comes with benefits: If you follow the rules laid down by each state, you’ll see longer campaign lifespans, more campaign success and less frustration.

With all this in mind, insurance advertisers need to balance compelling messaging with careful compliance.

There are numerous steps and rules to follow. Instead of committing everything to memory, this guide shares the most important aspects to help you keep everything top of mind.

The Basics of Insurance Regulations

Achieving marketing compliance in the insurance advertising space requires more than abiding by just one set of regulations.

While the National Association of Insurance Commissioners (NAIC) dictates the broad strokes of compliance regulations, individual states determine their own requirements for compliance. On top of that, many insurance carriers have their own rules to abide by.

These regulations apply to all forms of advertising. And because the NAIC was outlined before many modern digital channels existed, internet advertising presents even more challenges.

States typically base their models of compliance on the NAIC’s regulation templates. Those templates fall under the following categories such as:

  • Third Party Administrators, or TPA: these models encompass regulations for claims processing and employee benefits management.
  • Life and Health: As the name suggests, this category regulates any health insurance or life insurance policies.
  • Accident and Sickness: Insurance products that cover accidents or illnesses are regulated under these models.
  • Producer Licensing: Insurance agents and brokers in the U.S. are required to be licensed as a “producer.” These models oversee producer activities.

Each category has an extensive model of regulations, covering every aspect of a campaign to prevent misleading statements and unfair trade practices—and state insurance laws vary.

Insurance Policy Advertising Regulation Guidebook

While specific laws vary between states, the essential tenets of insurance marketing advertising remain the same. As long as you keep these compliance measures in mind, your insurance advertisements will be easier to set up and move out to market.

Control Your Content

Every advertisement, regardless of who made it, is the responsibility of the insurer whose policies are being advertised. Insurance producers should always submit content for review to the insurance company they represent to ensure nothing slips through the cracks and prevent any false advertising.

Always Be Truthful

Your content needs to be truthful and in no way misleading. A degree of scrutiny equal to the Commissioner of Insurance should be taken to ensure this is true for every ad to avoid creating ads that are misleading or deceiving purchasers in any way.

Avoid Untrue Implications

Going hand-in-hand with being truthful, ads shouldn’t imply an insurer or producer is licensed in states where they aren’t. Licenses are all or nothing; either you’re licensed in the state or you aren’t.

Keep Disclosure Requirements Top-of-Mind

Exclusions and limitations must be easily seen and understood. In other words, there shouldn’t be important details hidden in the fine print. Any information that is required to be disclosed can’t be minimized or obscured in any way.

Prioritize Clarity

The name (and in some cases policy number) of the producer has to be on every advertisement related to their business or offerings.

Don’t Attack Competitors

Ads for an insurance company or insurance policy can’t disparage another insurer or their product. That also goes for false or misleading information about any aspect of their business, including commercial ratings.

Use Statistics—Carefully

When using statistics, only use recent and relevant information with clearly defined sources.

Vet Any Testimonials

All third-party testimonials should be genuine, accurate and back up the author’s claims.

Address State Insurance Regulator Concerns

Keep up with regulations in the states you will be advertising in. Insurance regulations on a state and carrier level are constantly changing and it’s on you to be aware of changes as they occur.

An Effective Advertisement & The Future of Insurance Advertising

A compliant advertisement in the insurance industry is one that is truthful, informative and up-to-date. While other industries can sometimes bend the truth slightly or use hyperbole to fit the needs of their marketing efforts, insurance advertising has clear guidelines that must be upheld.

The NAIC has been around since 1871 helping to set the standards over the years in the insurance industry. The guidance they offer allows states to create their own set of insurance regulations. Any changes to the guidelines are slow and can take months to years to occur. At the time of publishing, no potential changes are in the pipeline. For now, you can expect no changes to the current system will be passed any time soon.

But always have the national regulation templates in mind and keep up with changes to state regulations to see the most success from your marketing materials.

Keeping Up With Compliance With FM Engage

Even for industry veterans, attempting to achieve and maintain marketing compliance in the insurance advertising industry can be a challenge.

A partner can help you navigate the compliance process and avoid violations. The insurance marketing experts at FM Engage have all the skills and tools necessary to help you create an effective, compliant marketing campaign. We stay up to date on regulations and provide the guidance your team needs. Connect with FM Engage today.

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