PIANJ Hits GEICO Mailings

A New Jersey lawmaker said yesterday he plans to introduce legislation in response to a complaint by insurance agents that GEICO has made an improper arrangement with the state turnpike authority to mail out advertisements.

“I'm drafting a bill to bar this type of practice. I want it to stop immediately,” said Assemblyman Neil Cohen, D-Union, who chairs the Assembly Insurance Committee.

His requests to the Turnpike Authority and Gov. Jon Corzine's office for a halt of the mailings have been unsuccessful, he said.

If GEICO wants to reach drivers with its message, “they can bid on the billboards on the turnpike,” he said. GEICO did not respond to a request for comment.

Under the authority's pilot program with a Connecticut marketing firm, mailings of advertisements from GEICO, Citibank, The New York Times and Bose are going to 500,000 motorists who are billed through the mail for their use of E-ZPass to go through turnpike toll booths.

The Professional Insurance Agents of New Jersey objected in a statement to the mailing of “junk mail from GEICO.” John A. Latimer, PIANJ president, said the group believes that “sending advertisements for any for-profit enterprise is wrong. The implied endorsement of state government should not be for sale to the highest bidder.”

“We applaud Assemblyman Cohen's recognition that a state authority should not support any single company over another in ours, or any, industry, and we appreciate his taking action.”

PIA said affiliates in other states have addressed this practice with some success. In Ohio, PIA persuaded Gov. Bob Taft to intervene and halt the distribution of fliers from any single insurance company–and specifically Allstate Auto Insurance–inside mailers for vehicle registration reminders.

As of this month, these types of advertisements will not be put into the Ohio Bureau of Motor Vehicles notices. PIA noted that Gov. Taft had requested that no ads be sent that may be viewed as a conflict of interest, or that may encourage drivers to think they must use a particular product related to their vehicles included in the mailers.

PIA said since the request, auto insurance companies have complied willingly and have not submitted any bids for placement in Ohio, and that success has encouraged PIA of New York to renew its criticisms of the same practice by the New York Department of Motor Vehicles.

Mr. Cohen said the turnpike's program allowed only certain ads. “The problem is it's not open to everybody,” and that it “lends itself to misleading advertising,” he added.

The arrangement, which gave GEICO access to 500,000 drivers, has so far only netted the state $20,000, he said. Mr. Cohen said it was the PIANJ that alerted him to the problem.

A turnpike spokesman did not return e-mail and phone call requests for comment.