The Producer's Role In Avoiding Misleading Ads

Other jurisdictions have taken issue with third-party mail houses that use a central processing center for a return address. Some lead generating advertisements that do not reference the specific producer's name or return address have been called into question. The comments center on the need for the producer to be clearly identified at all times. The concern here is that using a processing center with an address other than the producer's actual address may mislead the public.

Insurance carriers offer significant direction to producers on avoiding the use of misleading or deceptive advisements. Through the use of advertising guidelines, published by each carrier, producers are given additional examples and in some cases, pre-approved language and descriptions.

Most carriers use the definition of advertising developed by the National Association of Insurance Commissioners. This includes any material designed to create public interest in an insurance or annuity product, an insurance company, an agent; or to induce the public to purchase, increase, modify, surrender, borrow on, reinstate or retain a policy. Such advertisements must be submitted to the carrier for review, modification (if necessary) and final approval.

In addition, carriers often require recruiting material to be submitted for compliance review. In all cases, the use of a carrier's logo or likeness must be submitted prior to use.

Not all producers, unfortunately, submit their advertisements to the carrier for compliance review. The most common objections these producers give are that the review process takes too long or the guidelines are too inflexible.

As a practical matter, submitting all advertising is a safety net for producers. The carrier keeps a copy, as should the producer. This can be shown during state department of insurance market conduct exams. If an advertisement is questioned, the producer will need written documentation that the carrier approved the advertisement before use with the public.

In all cases, producers should consider how the public may view the advertisement. What may be clear and obvious to a producer with years of experience may be subject to misinterpretations by a lay person. Avoiding misleading or potentially deceptive advertisements is often achieved by disclosing the true nature of the producer's business.

Danette Kennedy is president of Gorilla Insurance Marketing, Inc. Waukee, Iowa. Her e-mail address is [email protected].