INSURERS' DO-NOT-CALL EXEMPTION MAY BE LIFTED

Although insurers currently are exempt from the language of a Federal Trade Commission (FTC) amendment to the Telemarketing Sales Rule requiring that telemarketers abide by a national do-not-call list, the exemption may be eliminated and fines enforced as early as August, according to Keith Fotta, president and CEO, Gryphon Networks, a provider of automated do-not-call services.

Currently, 33 US states have do-not-call legislation, which prohibits telemarketers throughout the nation from calling those on a state's list. Seventy-five percent of the US population lives in states with do-not-call lists, according to Fotta. An insurer's exemption from state legislation is dependent upon the individual state's law.

The federal amendment proposes a federal registry that will be enforceable by the FTC, but only in the cases of interstate commerce. For example, if an insurer's domicile is New York, it will not have to refrain from contacting consumers listed on the Federal registry who live in New York. However, the insurer would have to refer to New York state do-not-call laws.

Before the federal registry can be implemented, funding must be granted. Currently, notes Gryphon's Kelleen Brennan, director of regulatory affairs, both the House and Senate versions of the Omnibus Fiscal Year 2003 Appropriations Bill provide $16 million of funding for the FTC's do-not-call registry. Differences between the versions will be reconciled by a conference committee comprised of members designated by both the House and Senate. The versions will be conferenced in the coming weeks and it is anticipated that President Bush will receive a final version sometime in February.

If granted, the funds will be used to support the economics of selling Federal do-not-call lists to telemarketers, according to Fotta. Additionally, "if funding is approved, the FCC (Federal Communications Commission) will work with the FTC to eliminate all telemarketing exemptions, except for charities and political organizations," he predicts.

If insurers are required to abide by both state and federal do-not-call legislation the technology implications could be numerous, and telemarketing campaigns would be dramatically affected. "Insurers would have to figure out how to integrate 33 state do-not-call lists along with the federal do-not-call list," says Fotta. "Otherwise carriers could be subject to an $11,000 fine per call made to a member of the federal list and between $2,000 to $25,000 per call, depending on the state with which the violation is made."

States may publish their lists at different periods throughout the year, but the majority are updated quarterly, Brennan explains. Also, the federal list will be updated every three months. Normally, depending on the state do-not-call legislation, a grace period of between two weeks and one month is granted from the time changes are made to a list.