How the FCC’s recent decisions on AI robocalls and lead-generation will impact the insurance industry
Overview and intent of the new legislation
By Mark Mckinney
In January 2024, the Federal Communications Commission (FCC) passed a law designed to close the “lead generation loophole.” This new law is a significant change from previous practices. Organizations must now obtain explicit, individual one-to-one consent from each consumer before contacting them. It also states that consent must be logically and topically related, meaning that consent only applies to services aligned with the interest a consumer originally expressed.
In February, the FCC passed another law making it illegal to place calls using AI-generated voices which is a common technique in robocalling scams. Bad actors are using AI-generated voices in unsolicited robocalls to extort vulnerable family members, imitate celebrities, and misinform voters.
The intent of both of these laws is to protect consumers from unwanted robocalls, robotexts, and to promote transparency in how consent is obtained and used. Previously, companies could obtain consent from consumers to receive robocalls and robotexts, and then sell that consent to other businesses without needing the consumer’s individual approval for each company. The new law requires companies obtaining consent on behalf of third parties (like lead generators) to get one-to-one, prior express written consent from consumers for each individual marketing partner. This means a single consent no longer allows multiple companies to contact the consumer. For example, someone who signs up for mortgage quotes can’t be contacted about car loans, insurance, credit cards, etc.
How the new FCC regulations impact insurers
When it comes to how the new FCC regulations will impact insurers, businesses will need to reassess their lead generation programs and ensure their sources are credible and align with the new regulation. Affiliate marketing programs and lead dissemination methods must be revised and audited routinely to ensure compliance.
Additionally, consumers will be more cautious about sharing their information due to stricter consent requirements. Insurers need to build trust and transparency by clearly explaining how they use consumer data and offering easy opt-out options.
How insurers can adjust their practices to remain compliant
To comply with these new regulations, insurers will need to adjust their practices in a few different ways.
1. Review and update marketing practices
• Conduct a thorough audit of current marketing practices: Identify any activities that rely on broad consent obtained through lead generators.
• Develop a compliance plan: Outline steps to achieve compliance with the new regulations, including obtaining individual consent for each marketing partner.
• Update marketing materials and forms: Ensure that marketing materials and forms clearly explain how data is used, offer opt-out options, and obtain verifiable one-to-one consent every time.
2. Invest in new lead generation methods
• Develop opt-in strategies: Build organic lead generation through website forms, social media engagement, targeted ads, and content marketing.
• Explore alternative lead sources: Partner with trusted organizations, leverage existing customer relationships, or invest in developing in-house lead generation capabilities.
• Invest in lead management tools: Implement tools to effectively track, manage, and nurture opt-in leads.
3. Focus on transparency and trust
• Be clear and upfront about data usage: Inform consumers how their information is collected, used, and shared with third parties.
• Offer easy opt-out mechanisms: Provide clear and accessible ways for consumers to opt-out of future communications.
• Respect consumer privacy: Implement strong data security practices and adhere to privacy regulations.
4. Take measures to ensure compliance
• Train employees on the new regulations: Ensure every employee involved in marketing and communication understands the requirements and best practices.
• Implement compliance monitoring tools: Track marketing activities and ensure adherence to the new rule.
• Stay updated on regulatory changes: Monitor the regulatory landscape for further developments and updates to the regulations.
Why more legislation will likely follow
Consumers are frustrated with unwanted, intrusive, and repeated calls that are disrupting lives. In addition to excessive call volume, robocalls and robotexts are frequently used for scams and fraudulent activities. Given the increasing focus on consumer privacy and protection, similar regulations impacting the insurance industry are very possible.
The areas where insurers might see changes include data privacy, personalized marketing, and communication practices.
Data Privacy
Insures should expect more stringent rules on how insurers collect, store, and use customer data. This could include limitations on data sharing with third parties, stricter opt-in requirements, and increased consumer control over their information.
Stronger data security mandates are also highly likely, which will require insurers to implement robust measures to protect customer data from breaches and unauthorized access.
Personalized Marketing
Be aware of increased transparency in algorithms. Insurers might be required to disclose how they use algorithms in decision-making and risk assessments.
Communication Practices
Further restrictions may also arise on robocalls and robotexts. The FCC might tighten regulations on unsolicited communication channels, potentially requiring even stricter consent requirements or opt-in options for different communication methods.
Tips for insurers to start doing now to get ahead of upcoming legislation
With more legislation likely to arise, there are few things insurers can do now to stay ahead.
The first thing insurers can do is invest in compliance tools and expertise. Investing in a compliance tool will help insurers to stay informed about evolving regulations and build internal expertise in data privacy and communication compliance. The next tip is to prioritize data privacy. Implement robust data security practices, obtain clear consent for data collection and use, and offer transparent data management options. Thirdly, focus on customer control. Empower customers with control over their information through accessible opt-out options and clear data usage disclosures. Lastly but certainly not least, build consumer trust and practice transparency. Develop ethical marketing practices, be upfront about data usage, and build trust through transparent communication. [IA]
About Mark McKinney
As VP of Market Intelligence and Innovation, Mark supports our business strategy and strategic decision-making efforts to integrate customer and industry requirements into our go to market strategy.
Most recently, he held an executive position at T-Mobile where he was responsible for Data Governance, Customer Data Compliance, Business Intelligence, and Advanced Analytics supporting Back Office functions.
Mark brings over 30 years of experience building high performing teams that deliver innovative solutions and high impact results for his partners.
