Insurance agents and brokers who want to jump aboard the social media train should know who how social media interplays with insurance advertising laws.
In a November 22, 2010 opinion the New York State insurance Department Office of General Counsel responded to an inquiry made by the structured settlement watchdog, John Darer, with the following points:
1. "The the use of a LinkedIn profile page or similar website for promotion of insurance, insurers, or insurance agents or brokers, constitutes an advertisement, announcement, or statement under New York Insurance Law".
2. "A licensed insurance agent or broker who solicits structured settlement annuities MAY NOT properly speak or write about guaranty funds even in general terms, in connection with the solicitation of annuities to lawyers or their personal injury clients". (emphasis ours). As part of its analysis the OGC cited to a January 26, 2009 opinion letter that was issued in response to a request by the structured settlement watchdog in conjunction with an NSSTA brochure containing a general discussion of such funds.
3. "The inclusion of an express disclaimer in marketing materials, such as statement that the existence of guaranty funds is not a reason to buy insurance, or a direct reference to the provisions of Insurance Law 7718, will not render guaranty fund references in such marketing materials acceptable" (emphasis ours)
It is a well known fact that business people use LinkedIn, Facebook, YouTube, blogs, video podcasts and other social media to expand their business network and as a result, to write more business. Indeed the inspiration for the request was the posting by a structured settlement broker, William Fazio, of a slide presentation on the subject within his LinkedIn profile and online social groups within theLinkedIn platform, that include New York attorney members. Fazio's slide presentation still resides on LinkedIn as of December 1, 2010 at 730pm EST.
The final and perhaps most poignant question addressed to the OGC was:
is there an acceptable way under Insurance Law 7718 for a licensed insurance agent or broker to respond to inquiries on the subject of guaranty funds?
Their Answer: "Agents and brokers are advised to refer any questions about guaranty fund protection to the Insurance Department or to a licensed insurer, which may, upon a written request, provide information about the guaranty fund to policyholders by means of a form prepared by the guaranty fund and approved by the Superintendent of Insurance" (emphasis ours)
A big thank you goes out to Michael Campanelli, Esq. of the new York State Insurance Department Office of General Counsel for taking the time to write the opinion and provide thoughtful analysis that provides practical "best practices" guidance to structured settlement brokers and agents of every persuasion, plaintiffs and personal injury lawyers.
For a copy of the complete opinion, including the questions posed to the department by the structured settlement watchdog, please click the following link Download NY Insurance Department 11222010 on Propriety of Guaranty Fund Ads in Social Media