The team developing social media guidance for the National Association of Insurance Commissioners (NAIC) should define terms and avoid references to specific social media service providers.
Commenters give that advice in reactions to a draft white paper developed by the Social Media Working Group at the NAIC, Kansas City, Mo.
Drafters call for state insurance regulators to ask insurers to adopt policies and controls that cover use of social media by associated entities as well as by the insurers’ own employees.
If the current draft is adopted and implemented as is, an insurer could be held accountable for social media content posted to the sites of affiliated companies as well as to company-sponsored sites. An insurer might have to prohibit associated entities from engaging in business communications via social media venues that were not subject to the insurer’s supervision.
The Compliance & Ethics Forum for Life Insurers (CEFLI), Bethesda, Md., a group formerly known as the Insurance Marketplace Standards Association (IMSA), helped organize a social media regulatory meeting with NAIC officials in December 2009.
The Financial Industry Regulatory Authority (FINRA), Washington, then developed FINRA Notice to Members 10-06, which sets rules member firms are supposed to use when overseeing employees’ and others’ use of blogs and social networking sites.
Kelly Ireland, a senior counsel at the American Council of Life Insurers (ACLI), Washington, say they, and welcome, evidence that the NAIC white paper drafters are trying to take an approach that will be consistent with the FINRA approach.
But Ireland and other commenters have asked the white paper drafters to add a section defining terms such as “associated entity” and “related entity.”
“It is important that these terms be defined in order to better understand the white paper’s discussion, particularly as that discussion relates to the liability and responsibilities of insurers for these entities,” Ireland says.