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Litigation

: Structured Settlements 4Real

Florida Insurance Advertising Compliance Issue For Settlement Industry

By John Darer

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The Florida Department of Financial Services states in its April 2010 newsletter "we continue to see a pattern of noncompliance" in insurance advertising. The state regulatory agency has created a resource to assist agents and brokers to keep their insurance business in compliance. The PULSE newsletter was sent to all Florida licensed agents and brokers on April 5, 2010.

Some of the non compliant advertisers appear to be members of the structured settlement and settlement planning industry. What a pity!

This author has posted several blog posts on Structured Settlements 4Real and Legal Broadcast Network's Speaking of Settlements describing the compliance issue in another state, New York, yet of those firms with websites, only 4structures.com, LLC and Forge Consulting, LLC appear to be in compliance at the time of this writing.

This author sent an email on May 13, 2009 to the NSSTA President and its former Executive Director to which a response was made requesting a list of names of brokers who appeared to be non compliant as well as stating that a request was made to add the subject to the June 3, 2009 Board of Directors meeting.. Yet 11 months later this easily fixable problem still festers like an unattended boil.

In my email I suggested that in light of Principle VI of its published Code of Ethics (which requires compliance with state laws). Doesn't NSSTA have a duty to (1) inform its members (2) take a proactive role to assure that at the very least those professional members ( and the organizations they represent) who serve on its board and committees make an effort to set an example in this area?

Now a similar issue arises with Florida and no doubt other states. Here is an excerpt from the recent Florida Department of Financial Services publication:

Florida Administrative Code 69B-150.013 Identity of Insurer.

(1)(a) The name of the actual insurer shall be stated in all of the insurer?s advertisements.

(b) The form number or numbers of the policy advertised shall be stated in any invitation to contract.

(c) An advertisement shall not use a trade name, any insurance group designation, name of the parent company of the insurer, name of a particular division of the insurer, name of any reinsurere (sic) or any other party, service mark, slogan, symbol or other device which would be misleading as to the true identity of the insurer or create the false impression that the parent company or reinsurer or any other party would have any responsibility for the financial obligation of the insurer.

(6) The use of letters, initials, or symbols of the corporate name or a trademark that would have the tendency or capacity to mislead or deceive the public as to the true identity of the insurer is prohibited unless the true, correct and complete name of the insurer is in close conjunction and in the same size type as the letters, initials, or symbols of the corporate name or trademark.

(7) The use of the name of an agency or other nomenclature in type, size and location so as to have the capacity and tendency to mislead or deceive as to the true identity of the insurer is prohibited.

(10) All advertisements used by agents, producers, brokers or solicitors of an insurer must have prior written approval or prior oral approval with subsequent written confirmation of approval by the insurer.

If one does a brief survey of websites associated with structured settlement industry today one sees a number of websites with:

Full legal name of insurance company not displayed
City and State of Home Office of insurer not displayed ( a New York Insurance law requirement)
Use of insurer marks without the full legal name and in the same size and type as the mark.
A communication that inaccurately implies that an insurer's obligations are backed by Berkshire Hathaway (see 1(c) above).
Apparent violations of the prohibition on advertising of state guaranty funds

Why does it seem that little is done until names are published, or threatened to be published on the Internet? To wit, the industry's credential puffery sickness.

It seems to me that it would make sense to develop a "blue sky" way of displaying the information that incorporates the various state requirements. Furthermore, for the umpteenth time, the trade association should provide a best practices digest to its members that is updated annually. Is there any benefit to anyone if industry members are not in compliance?

Prior posts of interest

Amicus Settlement Planning SEO Effort Results in Stub Toe With New York Insurance Law December 24, 2009

What do 4structures.com, LLC and Forge Consulting Have in Common? September 9, 2009

Why Do Certain Structured Settlement Industry Websites Continue To Skirt New York Insurance Law June 13, 2009

A Number of Structured Settlement Industry Websites Continue To Skirt New York Insurance Law May 13, 2009

New York Structured Annuity Advertising, Compliance Issues Continue. Violators Beware, AGAIN! May 24, 2008

Compliant With New York Law? May 2008 Speaking of Settlements

Why Do Some Structured Settlement Brokers Still Appear to Contravene New York Insurance Law April 24, 2008

Is Your Insurance Advertising in Compliance With New York Insurance Advertising Law? This May Surprise You? January 29, 2008