The Federal Communication Commissions definition of “existing business relationship” in its do-not-call regulation does not take into account the unique nature of the life insurance business, say two leading life insurance groups.
In joint comments filed with the FCC, the National Association of Insurance and Financial Advisors, Falls Church, Va., and the American Council of Life Insurers, Washington, say that unless the definition is clarified, the regulation could have a dramatic impact on insurers and insurance agents.
The issue concerns the ongoing do-not-call controversy and the requirement that telemarketers check a list maintained by the government of people who do not want to receive telemarketing calls.
The FCCs do-not-call rule, which applies to the insurance industry, contains an exception relating to established business relationships (EBR).
The rule defines an EBR as a prior or existing relationship between a business and a consumer based on the consumers purchase or transaction within 18 months preceding the date of the telephone call.
NAIFA and ACLI say this 18-month cutoff period does not take into account the long-term nature of life insurance products.
“A consumer may purchase an insurance policy or annuity and there may not be any further purchases or transactions between the company and the consumer, or inquiries by the consumer, until a claim is filed several years later,” the groups say.
“Nevertheless,” they say, “the insurance policy or annuity remains in force and a business relationship exists between the parties.”
Similarly, they add, agents often serve as financial advisors to their client, thus extending the agent-client relationship beyond the initial policy placement and renewal.
Agents and companies, the groups say, often call consumers to provide information about enhancements to existing products or new products and services.
“Thus relationships between insurers and policyholders, insureds and annuitants, as well as relationships between licensed insurance professionals and their clients, typically extend for many years and may continue for months or years without an additional purchase, transaction or inquiry by the policyholder,” NAIFA and ACLI say.
They cite paid-up life policies and single-premium policies as examples of where an ongoing business relationship exists even though there may not necessarily be an additional purchase or transaction.
Because of the nature of the life insurance business, NAIFA and ACLI are asking the FCC to clarify the definition of an EBR to say it exists between the consumer and the insurer and the consumer and the agent for as long as there is an insurance policy or annuity in force.