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FCC’s new rule likely to cost agencies, brokers

If you purchase leads for your business, things are about to change and get very expensive.  A new rule passed by the Federal Communications Commission could result in a significant increase in your expenses next year.

The rule, designed to close loopholes that have allowed robocallers and robotexters to “inundate consumers,” would go into effect in August or September 2024. It forces comparison-shopping websites and lead generators to obtain consumer consent “one seller at a time.”

While this initiative is designed to protect consumers, it presents enormous challenges for insurance agents and brokers who rely on lead generation for business growth. Lead generators, in order to comply with the rule, are likely to increase prices significantly to remain in compliance.

The crux of the rule lies in requiring one-to-one consent. Lead generators can no longer use a single consent to connect consumers with multiple insurance agencies or brokers. Instead, they must obtain explicit consent for each individual agency.

Impact on health insurance agents and brokers

The FCC’s new rule is projected, at least by The National Law Review, to be challenged in court. According to the publication, other similar challenges that expand TCPA have “seen previous rulings overturned as arbitrary and capricious and inconsistent with reasoned rulemaking.” However, insurance agencies and brokers should begin planning now for the new rule to go into effect. Here are some things to expect:

Reduced Lead Flow: With stricter consent requirements, the flow of leads from comparison websites might decrease. This could lead to fewer initial contacts and potentially lower sales.

Increased Focus on Building Trust: With the emphasis on individual consent, agents need to shift their approach from mass marketing to personalized interactions. Building trust and demonstrating value will be crucial in securing leads and conversions.

Emphasis on Compliance: Navigating the intricacies of the new rule is essential. Agents need to ensure their lead generation practices comply with Telephone Consumer Protection Act (TCPA) regulations and document consent meticulously. This includes prior written consent for sending marketing text messages. Upcoming regulations might expand this requirement to other types of text messages.

Message Content Regulation: This reflects trends in countries like the UK, where the PECR (Privacy and Electronic Communications Regulations) mandate clear sender identification and message purpose. Similar regulations might be implemented elsewhere.

Opt-Out Mechanisms: This is a common theme across regulations worldwide. The GDPR (General Data Protection Regulation) in the EU and CCPA (California Consumer Privacy Act) in the US, for example, both emphasize easy and effective opt-out options for consumers.

Data Privacy and Security: This concern is gaining traction globally, with stricter data protection laws like GDPR and CCPA setting the standard. Enhanced regulations for call centers could be forthcoming.

Monitoring and Reporting: This is a potential outcome of stricter regulations, with call centers needing to demonstrate compliance through logs and reports. Similar requirements exist in other areas, like email marketing.

Technology Compliance: This emphasizes the need for call centers to adopt text messaging platforms that adhere to regulatory requirements, preventing spam and unauthorized messages.

Employee Training: This is crucial for ensuring call center staff understand and implement new regulations. Similar training requirements exist for other compliance areas like data privacy.

Vendor Management: This is important for call centers that rely on third-party vendors. Ensuring vendor compliance with regulations mitigates risks and avoids liability.

Carrier Leads: This point likely refers to specific regulations in certain countries or carrier agreements. It’s important for call centers to understand and adhere to the specific rules governing their use of carrier leads.

 Finding Opportunities in Change

While the new rule presents challenges, it also offers opportunities for proactive and adaptable agents and brokers. Here are some ideas to continue growth through the changes:

 Utilize your marketing reimbursements and co-op opportunities  Ensure that you are working with Agility to utilize all your marketing reimbursements and partner up with Luminos Creative, Agility’s partner ad agency, who specialize in health insurance.

Invest in Direct Outreach: Focus on building relationships and referrals through personalized communication channels like email or social media.

Highlight Expertise and Value: Demonstrate your knowledge and understanding of specific client needs to stand out from the crowd.

Embrace Technology: Be on the lookout for companies that work to become compliant lead generation platforms. These companies will adjust to the new rule and will find ways to continue delivering leads to agencies and brokers.

Advocate for Fair Regulations: Engage with industry associations and regulators to ensure the new rule considers the specific needs of health insurance agents.