Close Close

Life Health > Life Insurance

A New Proposed Telemarketing Rule Could Include The Industry

Your article was successfully shared with the contacts you provided.

A New Proposed Telemarketing Rule Could Include The Industry



The Federal Communications Commission is proposing a new rule on telemarketing that could include the life insurance industry.

The FCC says it is examining establishment of a national “do-not-call” list that would allow consumers to prohibit calls from any telemarketer by placing their telephone number in a central registry.

The FCC notes that the Federal Trade Commission is also proposing creation of a “do-not-call” list, but that that proposal is limited.

“Because the FTC lacks jurisdiction over banks, common carriers, insurance companies and certain other entities,” says the FCC, “these entities could continue to make telemarketing calls to individuals on the FTCs do-not-call list.”

FCC says it is seeking comment on whether it should use its own authority to extend national do-not-call requirements adopted by the FTC to those entities such as insurance companies that fall outside the FTCs jurisdiction.

In addition, FCC says, it is seeking input on what role it should play in the administration and enforcement of a national database.

David Winston, vice president of government affairs with the National Association of Insurance and Financial Advisors, Falls Church, Va., says telemarketing is an important tool for NAIFA members to promote their products and services and increase their visibility in the community.

Unfortunately, he says, the credibility and usefulness of the practice is being threatened by certain “bad actors” who engage in deceptive, unwanted or late-night telemarketing calls.

Winston says NAIFA is studying the FCC proposal and will submit comments to the agency.

Essentially, Winston says, NAIFAs comments will make several points. First, he says, it is premature for the FCC to issue a notice of proposed rulemaking when the FTCs effort has not yet been completed.

Acting before the FTCs process is complete, Winston says, creates opportunities for inconsistent rules and unnecessary burdens on regulated entities.

In addition, he says, the FCCs rules ought not apply to the insurance industry or banks because there are no factual data that the insurance industry or banks are engaging in abusive practices.

Finally, Winston says, NAIFA will suggest certain exemptions from the proposed rules.

For example, he says, NAIFA believes telemarketing rules should not apply to situations in which no sale is final and no payment is authorized until there is a face-to-face meeting.

In addition, Winston says, there should be a “de minimis” rule that would exempt small businesses.

The burden on small businesses of having to check a national database could be severe, he says, adding that for many life insurance agents, telemarketing is a small part of their businesses.

In addition to comments on whether the FCC should use its authority to sweep the insurance industry into the do-not-call regime, the agency is more generally seeking input on the potential costs of establishing and maintaining a national do-not-call database, the compliance burdens and whether there should be a small business exemption.

The FCC also seeks input on how consumers should be informed about the existence of a national do-not-call database and how it would function.

Comments are due to the FCC by Nov. 22.

In other regulatory agency news, the Federal Election Commission has agreed not to try and bar U.S.-based subsidiaries of foreign companies from making political contributions.

The American Council of Life Insurers, Washington, had filed comments with the FEC opposing any such ban.

The issue involves the Bipartisan Campaign Reform Act of 2002, which is now in effect.

One aspect of the legislation bans political contributions made “directly or indirectly” by foreign nationals.

The FEC questioned whether the intent of Congress in using the term “indirectly” was to apply the ban to U.S. subsidiaries.

ACLI sent comments to the FEC strongly opposing any such interpretation, saying there is no legislative history supporting that view. Moreover, ACLI says, barring U.S. subsidiaries of foreign corporations from making political contributions would effectively disenfranchise these businesses and their employees.

The FEC recently issued a statement saying it would not try to bar U.S. subsidiaries from making contributions.

Finally, at this writing, the outlook was good for Congress to pass a terrorism insurance bill that would authorize the Treasury Secretary to extend the program to group life pending the results of a study.

In the aftermath of the Nov. 5 election, several leading Republicans advocated suspending discussion of the legislation until next year.

These Republicans, sources say, are unhappy with the liability provisions in the bill and believe they could get stronger language in the next Congress when Republicans will control both the House and the Senate.

However, after a “full-court press” by President Bush, sources say, the legislation appears back on track.

For an update, check the National Underwriters Web site at

Reproduced from National Underwriter Life & Health/Financial Services Edition, November 18, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.