Advertising Regulations (Topic 3) in Module 5 – General-Provisions (BG)

Advertising Regulations

Insurance advertising must be truthful, not misleading, and comply with state regulations. Strict rules prevent deceptive marketing and protect consumers.

What Is Advertising?

Broad definition includes: - Print ads (newspapers, magazines) - Broadcast (TV, radio) - Internet and social media - Direct mail - Email marketing - Websites - Business cards - Sales presentations - Promotional materials

False or Misleading Advertising

Prohibited:

Misrepresentation of: - Policy benefits - Dividends or returns - Financial condition of insurer - Policy terms and conditions

Deceptive practices: - Unfair comparisons - Misleading headlines - Omitting material limitations - False urgency - Guarantees that don't exist

Examples - Prohibited:

"Tax-Free Returns Guaranteed!"
(Misleading - not guaranteed)

"This is NOT Insurance"
(Deceptive when it is insurance)

"$1,000,000 for Only $20/Month!"
(Omits that it's term expiring at age 40)

Required Disclosures

Must include:

Identity: - Insurer name - Producer name and license # - Contact information

Product type: - Life insurance - Annuity - Type of policy

Material limitations: - Exclusions - Waiting periods - Restrictions - Surrender charges

If illustrated: - Non-guaranteed elements - Assumptions stated - Disclaimer required

Specific Prohibited Practices

Rebating references: - Cannot advertise rebates (in most states) - No inducements beyond policy

False credentials: - No fake designations - No misleading titles - Must have actual certifications

Disparagement: - No false statements about competitors - No unfair comparisons - No defamation

Testimonials: - Must be genuine - Representative experiences - Disclosures if paid - Not misleading

Filing and Approval

Some states require: - Pre-approval of advertising - File with insurance department - Waiting period - Approval before use

Massachusetts: - File if requested - Maintain copies 4 years - Available for review

Social Media Regulations

Same rules apply: - Truthful and not misleading - Required disclosures - Maintain records - Monitor content

Special considerations: - Character limits (Twitter) - Third-party posts - Comments and reviews - Endorsements

Record Retention

Must maintain: - Copies of all advertising - 4-5 years (varies by state) - Available for examination - Electronic acceptable

Key Exam Concepts

  • Advertising = broadly defined: Includes all marketing materials
  • Must be truthful: Not false or misleading
  • Required disclosures: Identity, product type, limitations
  • Prohibited: Misrepresentation, deceptive practices, unfair comparisons
  • Testimonials: Must be genuine and representative
  • Filing: Some states require pre-approval
  • Record retention: Maintain 4 years minimum
  • Social media: Same rules apply

Advertising Regulations

Insurance advertising must be truthful, not misleading, and comply with state regulations. Strict rules prevent deceptive marketing and protect consumers.

What Is Advertising?

Broad definition includes: - Print ads (newspapers, magazines) - Broadcast (TV, radio) - Internet and social media - Direct mail - Email marketing - Websites - Business cards - Sales presentations - Promotional materials

False or Misleading Advertising

Prohibited:

Misrepresentation of: - Policy benefits - Dividends or returns - Financial condition of insurer - Policy terms and conditions

Deceptive practices: - Unfair comparisons - Misleading headlines - Omitting material limitations - False urgency - Guarantees that don't exist

Examples - Prohibited:

"Tax-Free Returns Guaranteed!"
(Misleading - not guaranteed)

"This is NOT Insurance"
(Deceptive when it is insurance)

"$1,000,000 for Only $20/Month!"
(Omits that it's term expiring at age 40)

Required Disclosures

Must include:

Identity: - Insurer name - Producer name and license # - Contact information

Product type: - Life insurance - Annuity - Type of policy

Material limitations: - Exclusions - Waiting periods - Restrictions - Surrender charges

If illustrated: - Non-guaranteed elements - Assumptions stated - Disclaimer required

Specific Prohibited Practices

Rebating references: - Cannot advertise rebates (in most states) - No inducements beyond policy

False credentials: - No fake designations - No misleading titles - Must have actual certifications

Disparagement: - No false statements about competitors - No unfair comparisons - No defamation

Testimonials: - Must be genuine - Representative experiences - Disclosures if paid - Not misleading

Filing and Approval

Some states require: - Pre-approval of advertising - File with insurance department - Waiting period - Approval before use

Massachusetts: - File if requested - Maintain copies 4 years - Available for review

Social Media Regulations

Same rules apply: - Truthful and not misleading - Required disclosures - Maintain records - Monitor content

Special considerations: - Character limits (Twitter) - Third-party posts - Comments and reviews - Endorsements

Record Retention

Must maintain: - Copies of all advertising - 4-5 years (varies by state) - Available for examination - Electronic acceptable

Key Exam Concepts

  • Advertising = broadly defined: Includes all marketing materials
  • Must be truthful: Not false or misleading
  • Required disclosures: Identity, product type, limitations
  • Prohibited: Misrepresentation, deceptive practices, unfair comparisons
  • Testimonials: Must be genuine and representative
  • Filing: Some states require pre-approval
  • Record retention: Maintain 4 years minimum
  • Social media: Same rules apply
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