Call it a mixed blessing.

The 7-month-old Do-Not-Call (DNC) Registry, while restricting insurance producers ability to reach residential prospects through telemarketing, has spurred them to accentuate efforts that yield greater success in winning customers: business-to-business prospecting, referrals and networking. But the change in direction comes at the expense of one group of people the insurance industry needs more than evernew recruits.

Howard Soltoff, an agent and chair of the AAX (Agents Association eXperience) Compliance Marketing and Training Committee at Massachusetts Mutual Life Insurance Co., says, “The legislation has more greatly impacted new agents, who tend to rely more on contacting people at home.”

The Federal Trade Commission and the states began enforcing the National DNC Registry provisions of the Amended Telemarketing Sales Rule (TSR) on Oct. 1, 2003. Producers found in violation of the rule face potentially stiff fines: up to $11,000 per incident.

Advisors may call clients with whom they have an established business relationship for up to 18 months after the client’s last purchase, delivery or payment, even if the client is on the DNC Registry. They may also call for up to 3 months after the client makes an inquiry or submits an application to the company.

The National Association of Insurance and Financial Advisors, among other industry organizations, remains opposed to the DNC provisions, arguing that insurance professionals should be exempted. NAIFA General Counsel Michael Gerber says that?s because producers provide a much needed service for a poorly underserved market and because they don’t operate like telemarketers, who depend on predictive dialers and devote their full time to cold calling.

Particularly harsh, adds Gerber, is the rule’s restrictive view of referrals. Agents cannot contact referred leads unless prospects first contact them or unless the person providing the referral makes an introductory call.

“We’re not seeking a reversal of the rule but a clarification as to its scope,” says Gerber.

Not everyone sees the rule as a bad thing. Dan Tromblay, president of Communications Works, a Chicago, Ill.-based content developer for financial services companies, says many producers told him during a conference this month of the Mid-America Field Development Association that they view the DNC provisions as an incentive to relying more on referrals and networking methods that have proven more effective than cold calling at securing interviews and sales.

So, too, calls to businesses, an activity exempted from the rule, is something MassMutual encourages its agents to pursue to the extent possible.

“It?s generally harder to get to someone during business hours,” says Soltoff. “But once you do, it?s a more valuable contact. People accept calls more readily at work than at home because they?re in a different frame of mind.”

Business-to-business calls, he adds, dovetail with MassMutual’s strategy. The company derives roughly 60% of its revenue from business owners in need of varied financial services for their companies, such as succession planning. Many of these owners, once secured as clients, then tap MassMutual’s agents for personal insurance products.

To be sure, the company still reaches out to home-based consumers. Aiding the insurance carrier in its marketing efforts is its Lead Generation Center. The online database gives agents access to residential contacts they are permitted to call. To stay up-to-date, the database leverages software that automatically “scrubs” (removes) people who have added themselves to the DNC Registry.

The de-emphasis on cold calling cannot, perhaps, be entirely attributed to the DNC registry. Bob Littell, president of Littell Consulting, Atlanta, Ga., also points to a decline in new agents.

A 2004 report from LIMRA International, Hartford, Conn., lends support to this view. The study noted that 32 insurance firms surveyed by LIMRA recruited 30,000 full-time career agents in 2003, a 3% decline compared to 2002. Almost 80% of recruits had no prior insurance sales experience.

Still residential cold calling won’t be disappearing anytime soon, advisors say. And, some suggest, agents who do make the occasional forbidden call to a DNC registrant won’t necessarily be hit with an automatic penalty.

“I think the [$11,000] fine is excessive,” says Bill Zimmerman, a producer with Life Pro, Solana Beach, Calif. “But I see it as a deterrent that probably won?t be strictly enforced.”


Reproduced from National Underwriter Edition, May 28, 2004. Copyright 2004 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.