Association of Insurance Compliance Professionals May 17, 2013

1. Association of Insurance Compliance ProfessionalsMay 17, 2013 Advertising Compliance Erin Mirza, Insurance Examiner-Senior State of Wisconsin, Office of the Commissioner of Insurance (OCI) Life and Health Section Susanne Spear, Consultant, Marketing Materials Compliance Compliance/Best Practices, Northwestern Mutual

2. Introductions • Erin MirzaInsurance Examiner-Senior State of Wisconsin, Office of the Commissioner of Insurance (OCI) • Susanne SpearConsultant, Marketing Materials Compliance, Compliance/Best Practices Northwestern Mutual

3. Agenda – ‘Look at Life From Both Sides’ • Regulator Perspective • What We Don’t Like to See • What We Do Like to See • Industry Perspective • Life Company Best Practices • Strategies and approaches

4. Regulator PerspectiveWhat We Don’t Like to See • Lack of oversight of agents • Lack of Procedures • Typically results in non-compliant practices Section 628.40, Wis. Stat - Effect of Agent’s Appointment on Insurer

5. Regulator PerspectiveWhat We Don’t Like to See • When you say you do have a social media presence, but yet there is no record in your files (tweets, screenshots, etc.) of your activity.

6. Regulator PerspectiveWhat We Don’t Like to See • Incomplete Advertising Files • Section Ins 2.16(3)(a)1,a, Wis. Adm. Code (life) • Section Ins 3.27(5)(a)1, Wis. Adm. Code (health)

7. Regulator PerspectiveWhat We Don’t Like to See • When you say you don’t have a social media presence, but yet we find your Facebook page without even ‘liking’ it or logging in…

8. Regulator PerspectiveWhat We Don’t Like to See • Missing Form numbers • Section Ins 2.16(30), Wis. Adm. Code (life) • Section Ins 3.27(28), Wis. Adm. Code (health)

9. Regulator PerspectiveWhat We Don’t Like to See • Manner and extent missing in files • Manner = distribution type, i.e. print, internet, TV, billboard, etc. • Extent = when the advertisement will be used, what geographical area will it be sent, etc. • Lack of sources for statistical information • Section Ins 2.16(16), Wis. Adm. Code • Section Ins 3.27(20), Wis. Adm. Code

10. Regulator PerspectiveWhat We Do Like to See • Agents understanding insurer’s policies • Accurate and complete information being provided in order to make informed decisions • Consumer protection from false or misleading claims

11. Strategies and Approaches • Compliance Best Practices Strategy: Protection of the company’s reputation through business and compliance integration • Business partnering (product lines, field training, marketing and communications) • Liaison teams; Departmental Marketing Materials Coordinator • Marketing promotes pre-approved materials and supports best practices • Communications works with Compliance • Compliance does not approve in a vacuum • Consistent messaging, branding

12. Strategies and Approaches • Make compliance easier (not ‘compliance light’ ) • E-forms • Marketing Portal (intranet access ‘behind the scenes submission) • Social Media Portal • Access to pre-approved materials and published policies • Help lines in addition to sales support (marketing, communications, compliance) • Culture of compliance Rep to Client • ‘I gotta show this to you’ (embarrassed) • ‘To help ensure that you understand’ (distinguishes)

13. Strategies and Approaches • Social Media is subject to the same regulatory and retention requirements, privacy guidelines, and existing company policies that govern all facets of a rep’s business • Social Media must not circumvent Do Not Call • Social Media Goals Differ • Corporate – promote the brand • Representative – promote representative; engage clients

14. Strategies and Approaches • Growth requires increasing the number of feet on the street • Current recruits grew up with technology and social media • Policy for field use • Required Training, Registration, use of Social Media Portal • Approved social media sites • Resources for ongoing questions • Social Media team for reviews

15. Strategies and ApproachesSocial Media • Clearly defined boundaries to avoid misunderstanding an ‘I thought that it meant….’ • Definition of ‘business use’ - any business related information beyond a simple listing • Template and custom content • Define usage for each approved site (static and interactive) • Don’t refer to specific products or services by name • Don’t refer to investment specific financial concepts

16. Strategies and ApproachesSocial Media • All recommendations/testimonials related to character as a business professional or financial services practice posted on sites other than LinkedIn must be removed • LinkedIn Recommendations may be displayed after approval (for those reps permitted) • If you receive a complaint through social media, immediately inform your field supervisor. Do not remove it.

17. Strategies and Approaches • Rep understanding • Promotion of pre-approved • Awareness, Accessibility, Resources • Outreach to Field Supervisors/Field shadowing program • Communication of policies, access to policies (ease of access) • Policy/process for submission, review and approval of self-created • Description of material content, type, intended use, and audience

18. Help ensure consumers are protected from false or misleading claims Strategies and Approaches Field Created Materials Language/Content Guidelines • ‘If it shows, you must disclose’ substantiate the claim • ‘Guaranteed’ explain the limits of the guarantee • Clarify what is not guaranteed • Fair and balanced – ‘provides lifetime income and has no liquidity’ • ‘lower taxes’ not permissible • Strategy designed to manage the impact of taxes – permissible • Peace of Mind – context

19. Strategies and ApproachesEarly Intervention • New producers who are most likely to leverage technology and social media, are also the most likely to have limited understanding of advertising regulations/compliance • Nowadays, publication can escalate from local to national with a mouse click • Veteran producers may be aware of advertising regulations/policies, but are more likely to be on a learning curve relative to the social media business applications

20. Questions?