For insurance providers to ensure business continuity during the coronavirus pandemic, they have had to switch to primarily remote sales processes. Besides the obvious safety advantages, insurers who rely on phone and text to close new policies see a number of advantages, including greater efficiency, faster turnaround times, a better customer experience, and a better agent experience.
Yet the rapid shift to new digital territory means there is a real risk of compliance lapses. Insurers that relied on well-worn compliance protocols during face-to-face sales need to ensure compliance is maintained even when prospects are remote. This will enable companies to enjoy all the benefits of digital insurance sales while adhering closely to industry regulations.
Here’s we’ll explore five key steps insurers can take to stay compliant when selling remotely.
Why Insurance Compliance Matters Now More Than Ever
As insurance agents work hard to close sales despite the “new normal” of remote transactions, they must remember that these unprecedented circumstances don’t change the imperative to avoid violations. In fact, they must tread even more carefully since there are regulations that specifically apply to remote insurance sales.
5 Ways to Ensure Compliant Insurance Sales––When Selling Remotely
Get Electronic Consent
Insurance companies put themselves at legal risk by merely contacting numbers obtained by the consumer or a lead generation source, such as the website or external service. The insurance company must provide clear disclosure and an empty checkbox that the prospect can tick to indicate consent. This also ensures compliance with the ESIGN Act; in such cases, ticking checkboxes is equivalent to providing eSignatures.
2. Enable Opt-outs
Whether contacting a prospect by phone or text, it’s crucial to allow them to opt-out of further contact. Simple and clear instructions and use of words like “stop, quit, and cancel” should be used to eliminate the appearance of ambiguity, which could be a liability down the road. Once a prospect opts-out of one channel, it should be assumed they are opting out of all channels, whether text or phone call.
3. Maintain Records
Insurance companies should adopt the approach of “prepare for the worst, hope for the best.” By getting consent and honoring opt-outs, insurers are protecting themselves from liability. But things happen, and the last thing an insurer needs is to receive a complaint from a customer and have no way to prove that no violation took place.
That’s why it’s so vital to keep records of all calls and text, including phone numbers, dates and time of interaction, recording of phone calls, and copies of text messages. Digitizing these records will make it far easier for insurers to both maintain them and refer back to them if legal proof ever needs to be produced.
4. Mind the Time
The Federal Trade Commission’s Telemarketing Sales Rule (TSR) requires that sales calls and text can only be made between 8:00am and 9:00pm, in accordance with the prospect’s time zone. Insurance agents should be instructed to determine the prospect’s location by looking at their home address and not their cell phone number due to the mobility of the latter. For example, a customer may have purchased a cell phone plan in California but they currently live in Boston, and should be called within the permitted hours based on Boston time.
5. Oversee Agents’ Work Habits
Agents should be fully aware of the regulations that govern what they are and aren’t permitted to do during remote sales professes. Nonetheless, agents who are eager to meet their quotas may bend compliance rules or underestimate their importance. That’s why it’s key for insurance companies to provide training on compliant sales practices, regularly check in and provide refreshers, and if needed, monitor calls and texts. It’s far better to conduct internal audits than to come under the scrutiny of the FCC or other regulatory bodies.
By knowing and adhering to compliance regulations, insurance agents can conduct remote sales without fear. As insurance providers expand their digital capabilities to become more agile and efficient, they should continuously ensure that new tools and workflows are used within the bounds of compliance.