FEDERALTRADECOMMISSIONONADVERTISING.docVIP

“GROUND ZERO” FOR INSURANCE ADVERTISING LAW Although many insurance advertising regulations exist on the state level, most of these rules apply to life, annuity and health insurance products. Property/casualty insurers have very little to be concerned with in this area. Conversations with advertising reviewers for P/C advertising indicate they mostly rely on “not misleading” guidelines of the states’ Unfair Trade Practices acts. Some additional discussion of the basis for advertising law may be helpful. Although other insurers have numerous laws to follow for general advertising, all insurers might want to review the notes on internet advertising at the end of this article. DIRECTIONS FROM THE FTC One of the main regulators of all types of business advertising is the Federal Trade Commission (FTC). Under the primary Act, the FTC indicates that advertising in general must Be truthful (not deceptive) Be provable Be fair Truthful and Not Deceptive The FTC has a Deception Policy Statement to explain this concept. An ad is deceptive if it contains or omits information that is material, or important to the consumer’s ability to make a good decision, and is misleading, or would cause a “reasonable consumer” to make their decision based on false conclusions. Materiality has to do with the product’s benefits or cost, for instance. In general, when the FTC is reviewing advertising to determine whether or not it is deceptive, the reviewers take the viewpoint of a “reasonable consumer” (not unlike the “reasonable person” standard used in legal cases). Looking at the entire ad in context, rather than a word-by-word analysis, the FTC looks at both “express” (literal) and “implied” (inferred) claims. For instance, these two could be demonstrated such: “This policy will save you money.” Or “This policy has saved Americans like you thousands of dollars each year.” If an advertisement leaves out language that is material for the consumer to make a valid decision, it is also