Do You RTFP?

I first heard about the above acronym when listening to Bill Wilson’s farewell webinar earlier this month.  For those of my readers who don’t know, Mr. Wilson was one of the founders of the IIABA’s Virtual University and has been largely responsible for its growth into one of the premier educational tools for independent insurance agents since its beginning around the turn of the century.  He is retiring from IIABA at the end of this year and for his last webinar, chose to speak about the six worst things to happen in the insurance industry during his almost 50 year involvement with it.  Mr Wilson has many interesting and thought provoking things to say about that and other subjects in his webinar, which lasts a little over an hour.  For those of you who don’t have the time for that, Mr. Wilson also wrote an article in the current IA Magazine that summarizes his thoughts about the main topic of his webinar.

The acronym RTFP recurs in many of Mr. Wilson’s observations as a cure for the bad things he sees happening in the insurance industry.  They range from the increasing belief that insurance is a commodity to the rise of disruptors who claim to have a better way to provide insurance to what he refers to as the “dumbing down” of the industry.  A response to these trends is to remind the consumer that what they are buying for their premium payment is not what appears on a TV ad or smart phone app, but what is contained in the language of the insurance policy itself.  With respect to the Farmer’s Insurance TV ad about dogs swimming in a flooded living room that was caused by a pet, Mr. Wilson made the point that after actually reading its basic homeowner’s policy, he could not find anything in the policy that would provide coverage for such an event.

By now, you have probably guessed what RTFP stands for, if you did not already know. Although it could be “Read the Fine Print”, that does not pertain specifically to the insurance industry.  The industry specific meaning is “Read the F***king Policy”, or for those who prefer a less vulgar interpretation, “Read the Freaking Policy.”  By doing so, both an agent and the consumer will realize that every insurance company’s policy is different in some way.  They may well find out that the policies of the so-called disruptors provide much less coverage than those of the established insurance companies.  What better way for an agent to convince a customer to buy a policy through him or her than to point that out and how that lack of coverage can come back to haunt the customer if the unexpected happens.

Discovering the differences in the coverage provided by both the policies that an agent sells and those of his or her competitors is at the heart of providing the “added value” that distinguishes the services of an independent insurance agent.  Providing all the coverage needed by a particular potential customer can only be done if the agent knows what coverages are provided by the policies offered by the companies he or she represents, which requires the agent to RTFP.  Being able to explain why such policies are better than those of a competitor or a disruptor also requires the agent to RTFP of those entities. (For those who would like a reminder of this essential fact, an agent in Missouri sells t-shirts with this logo here.)



Seasons Greetings (Do You RTFP?)

It’s almost Christmas and my plan to have a post up earlier this week that would not get lost in the holiday rush did not work out.  So, I decided to just say to all my readers BEST WISHES FOR A SAFE AND ENJOYABLE HOLIDAY SEASON FOR YOU AND YOUR FAMILIES and give you a heads up on the topic I was hoping to address earlier this week.  To find out what RTFP means and how it applies to insurance, stay tuned for my next post, which I hope to have up by the middle of next week.  Until then, enjoy time with your family and friends and try to experience the true spirit of the season for at least a little while.

Privacy Notices No Longer Required (in some cases)

On November 28, 2016, the Georgia Insurance Commissioner’s Office issued a Bulletin, 16-EX-2, that clarified the duty of insurance agencies in Georgia to give annual notices to their customers of their data sharing and privacy policies.  In that Bulletin, the Insurance Commissioner’s Office confirmed that it would adopt a change that had been made to the Gramm-Leach-Bliley Act (the “GLBA”) by Congress at the end of 2015. This change created an exemption from the requirement imposed by that Act for certain “financial institutions”, which include insurance agencies, to give their customers an annual notice of their policies on the sharing with other entities of nonpublic personal information they collected about their customers.  These notices are commonly referred to as privacy notices.

The giving of privacy notices under GLBA was a very hot topic back around the turn of the century when that law was first enacted.  I gave many seminars on who had to give those notices and what they had to contain, but since then I have not heard much about those notices from my clients.  Apparently, it has not been something the Insurance Commissioner’s Office and the federal regulatory agencies involved have been that concerned about.  I have sometimes wondered how many of my clients were actually giving the required notices every year.

In any event, there is now an exemption from the requirement for the giving of privacy notices.  That exemption applies to any insurance agency that only shares the nonpublic personal information they collect about their customers in ways that are explicitly permitted by the GLBA and that have not changed their data sharing policies since their “most recent disclosure sent to consumers in accordance with” the GLBA.  An agency that satisfies these two requirements is relieved of the obligation to provide annual privacy notices to their customers until they no longer meet both requirements, i.e., they begin to share nonpublic personal information about their customers in ways that are not explicitly permitted by the GLBA or they otherwise change their data sharing policies from what was said in the last notice sent to their customers.

The list of ways in which nonpublic personal information is explicitly permitted to be shared under the GLBA is a long one, but the permitted sharing of such information that is most relevant to insurance agencies involves three main areas:  marketing, the use of such information to perform the services requested by the customer, and the disclosure of such information to insurance rate advisory organizations or other state or federal regulatory bodies and the agency’s attorneys, accountants, and auditors.  Disclosing such information to consumer reporting agencies and in connection with the sale, merger, or other transfer of the ownership of all or a portion of an agency’s business is also permitted.  Of course, any such disclosure to which the customer consents is permitted.

The most likely situation where an insurance agency may step over the line, so to speak, and thus, be required to give a privacy notice is in connection with its marketing activities.  Under the GLBA, an agency can disclose the nonpublic personal information of its customers to parties affiliated with it and to a non-affiliated third party to perform marketing activities for its products or services, if the agency fully discloses that it is doing so to its customers and enters into a contract with the non-affiliated third party that requires the third party to maintain the confidentiality of the information provided to it.  If the full disclosure of such information sharing has previously been made by an agency to its customers in a privacy notice, it is no longer required to continue to give such notices every year, unless and until its data sharing practices in this regard or in other ways change.