Mixed Regulatory Decisions For Life Agents On Telemarketing
The Federal Communications Commission has decided to delay implementation of its do-not-fax rule until July 1, 2005 to give time for Congress to reverse the regulation through legislation next year.
The agency decision was part of a mixed bag of federal decisions for life insurance agents in the last week or so. In a ruling the industry opposed, the Supreme Court last week decided not to review the constitutionality of Congress decision to ban telemarketing. Before the court was a decision whether to review a lower court ruling that said banning of telemarketing calls without prior permission did not violate telemarketers free speech rights.
The high court was asked to review the case by the American Teleservices Association, which said it represented about 650 call centers that make sales calls, usually on behalf of other businesses.
The decision the Supreme Court was asked to review was handed down in February by a three- judge panel of the 10th U.S. Circuit Court of Appeals, based in Denver. The panel ruled that the do-not-call list was a valid restraint of commercial speech because it “targets speech that invades the privacy of the home, a personal sanctuary that enjoys a unique status in our constitutional jurisprudence.”
The decision reversed an earlier ruling by a federal judge who found the list unconstitutional because it barred commercial solicitations while allowing calls from politicians and charities. The appeals court said such a distinction was merited because the government had found that commercial callers are more likely to engage in prospective and abusive practices.
Regarding the Supreme Court decision, the National Association of Insurance and Financial Advisors said it was “disappointed, but not surprised, by the Supreme Courts ruling.” NAIFA said it “understands consumers frustration with unwanted calls by telemarketers and respects Congress duty to safeguard personal privacy. However, we have maintained from the outset that certain industries, including insurance, should be exempt from the rule.”
NAIFA argued that “insurance agents have never been part of the problem. The FCCs unwillingness to exempt insurance agents from its rule and subsequent court decisions, including the high courts, are disappointing to those agents whose legitimate use of the phone to inform the public of the need for financial security has been hampered by the do-not-call registry.”
With that said, NAIFA added, “We respect the law of the land and will continue to keep our members informed to ensure that they are in compliance with the law.”
The FCC action delayed implementation of a regulation that the agency drafted to implement another title of the law, the Telephone Consumer Protection Act. That provision bars businesses from sending faxes to prospective customers without the customers prior consent.
NAIFA responded by saying the agency was “prudent” in delaying implementation of the do-not-fax rules. The trade group had joined a petition to extend the stay for 6 months to allow Congress to revise the rule before it goes into effect. The legislation, H.R. 4600 and S. 2603, would allow insurance agents to send faxes to their clients without receiving prior written consent.
In its current form, the FCC rule requires that businesses and nonprofits obtain written consent from all fax recipients, even those with whom the sender has an established business relationship. “As it is now the rule poses a major hurdle to legitimate business communication,” NAIFA said. “These business relationships must be exempt from the rule so that legitimate fax communication can continue unimpeded.”
Reproduced from National Underwriter Edition, October 7, 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.