The Iowa Insurance Department, reversing an action in June, has decided it will allow insurers to provide promotional trinkets and brochures to policyholders or prospective policyholders.
Under the latest policy, issued as Bulletin 08-13, agents or insurers “may give inexpensive gifts to prospective or existing customers so long as such gifts are provided on a nondiscriminatory basis and so long as the giving of the gift is not conditioned upon the purchase of a policy of insurance.”
It replaces a bulletin issued June 30 that would have prohibited the offer of any goods or services to a policyholder or prospective policyholder that are not specifically included in the policy contract.
The action allows insurers to continue the long-held tradition of providing giveaway trinkets at the Iowa State Fair.
Ann Weber, vice president and regional manager for the Property Casualty Insurers Association of America, said PCI is still studying the new policy but finds it “definitely more reasonable.”
By contrast, the June policy “would have really prohibited everything that wasn't spelled out in the [insurance] policy.”
Specifically, she said this would have included calendars, pens, smoke detectors, driver safety CDs to new drivers in the household, maps, documents providing tips for winterizing your home, safety tips for boating and preventing ice dams in your homes–”problems that are really big in the Midwest.”
Earlier, during the debate, the Council of Insurance Agents and Brokers sent a comment letter to the agency urging development of clear, flexible standards based on a recently enacted law in New Hampshire that generally prohibits rebating but does permit producers to offer five types of services free of charge.
These include risk assessments, risk control tools, claims assistance, legislative updates and administration consulting. “These standards would permit the offer of value-added services that consumers have come to expect, while providing producers with the ability to adapt as the marketplace changes in the future, a CIAB official said in the letter.
Nicole Allen, vice president, industry affairs for the CIAB, told CIAB membership last week that Texas is dealing with a similar issue.
She said Texas issued a bulletin in January regarding the provision of administrative services–such as COBRA, flex account and human resource-related services–by agents in conjunction with the sale of health insurance policies. Texas similarly reminded agents such “inducements” are prohibited unless included in the insurance contract.
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