Last-minute legal challenges to the federal Do Not Call list may have made a strong impression on the public, but the insurance industry has generally been expecting that the list will be enforced. However, that expectation didn't necessarily translate into preparedness, either from a policies-and-procedures or a technological standpoint.
Contacting potential customers by telephone has been a useful tool for insurers. Considerable legal debate has centered on whether such activity is permitted under the McCarran-Ferguson Act's pre-emption of laws that would interfere in the conduct of "the business of insurance," observes Brian Casey, an attorney at Lord Bissell Brook LLP (Atlanta). Nevertheless, industry trade associations have shown little resistance to the Do Not Call (DNC) law, he says.
"Maybe they did the McCarran-Ferguson analysis and concluded that it's not going to carry the day-or, recognizing that it's such a sensitive political issue, they just said, 'You know what? We're just going to roll with the punches,'" Casey speculates.
An FCC ruling allowing no exception for referrals-related calls hasn't met resistance from the American Council of Life Insurers (ACLI, Washington, D.C.).
"We're gratified that the final FCC rule has an exception for established business relationships," says Robbie Meyer, senior counsel, ACLI. "We look forward to working with the FCC to get clarification on how they envision the exception, and to making sure their enforcement of the rule doesn't inadvertently jeopardize our ability to serve our customers."
Whether such acquiescence to DNC within the industry has translated into action is another question. By early September, 50 percent of financial services executives polled did not have a DNC policy firmly in place, and another 16 percent didn't even know they had one, according to a Celent Communications (New York) report entitled Crunch Time for Do Not Call Compliance: Are Financial Institutions Ready?
The executives surveyed were also split on the effort required to implement DNC procedures and systems: 17 percent said a major effort was necessary, 25 percent saw the need for a medium-intensity effort, and 25 percent said a minor effort would do.
The varied responses may be due to policy and technology decisions already implemented by financial services companies with regard to customer communications' preferences and the regulations that support them. The study notes that 70 percent of respondents already have an internal list in place, and at least 40 percent reported having opt-out lists for privacy for telephone, e-mail and regular mail. According to Craig Weber, the analyst who authored the Celent study, follow-up questioning suggests "financial institutions put these tools in place partly in response to existing state regulations and partly because they're becoming standard business practice."
Insurers with significant call center operations are more likely to be in compliance with DNC, Weber says. He cautions that the increased threat of exposure to DNC violations is likely to reside in field-force operations, where companies often rely on manual solutions-a bad idea, he says, because "people making calls don't like to flip through lists in numerical order, and the method generates no record of who you called and whether they're on the list," the latter being the minimum a company can do to fall within the federal safe harbor provisions for DNC.
Weber advises companies to take automated approaches to DNC compliance. "For example, firms can build their own interface, access their data, update it regularly and store it in their own customer databases," he says. "The other choice is a packaged solution that sits between your call center reps and the customer they're calling, or between agents and the customers they're calling."
AXA Financial depends in great measure on a centralized customer file to ensure compliance with DNC and opt-out customer preferences. The customer file sits in a central layer of "technical architecture that is really the glue that holds together all of our legacy systems and [the outward-facing layer that provides] access to the legacy systems," says Don Buskard, CTO, AXA Financial (New York, a subsidiary of AXA Group, $863 billion in assets under management). "The architecture also contains all of our security and authentication processing. The combination of having that all in one place has put me in a good position to react."
According to Joel Tietz, AXA's chief privacy officer, the carrier has reacted to DNC by "inserting a variety of indicators that line up against each one of our customer records, which are then sent downstream to whatever systems are necessary." He adds that "we have policies wrapped around [our systems] that address all the business areas and activities, whether service centers, sales agents or marketing activities."
Outside the central technology apparatus, AXA finds room for a solution in keeping with Celent's Weber's recommendations. The carrier uses a Gryphon Networks (Norton, Mass.) screening system installed at outbound telemarketing points to preclude calls to parties on any of the internal, federal and state DNC lists that AXA maintains or accesses. "We saw the need to add filtering to be compliant," Tietz says. "We've also layered policy across that, along with training and educational activities, so [telemarketers and agents] are aware of how they're supposed to be working, whether the technology controls are there or not."
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio