If you sold a client a life insurance or annuity contract two years ago, are you legally allowed to call the client back and offer services or ask for a referral? Surprisingly, the answer may now be "no."
Recently, the Federal Communications Commission (FCC) clarified how financial and insurance contracts are subject to the Established Business Relationship (ERB) exemption of the Telephone Consumer Protection Act (TCPA). This exemption provides an 18-month window after the sale of goods and services during which the vendor may initiate calls to the same customer without violating National Do Not Call Registry rules. For example, if you sold a client a mutual fund, you could make unsolicited calls to that same client for 18 months after the sale.
Some agents who sell life insurance or annuity contracts have assumed that the 18-month window continues as long as the contract stays in force, but the FCC has held otherwise. The window only stays open for the duration of the contract (plus 18 months) for companies and agents that have an ongoing contractual relationship with the client. Of course, the issuing insurance company has such a relationship as long as the contract stays in force, but do you? The FCC says that making a sale does not give you such a relationship. If you just make the sale and have no further contractual obligation, you may only call a client who is on the Do Not Call Registry for 18 months from the date of sale.
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A contractual relationship means that you have agreed with the client to provide specified ongoing services, such as portfolio or policy reviews. Ideally, to create a valid contract, such an agreement should be in writing and involve compensation. Now, it's even more important to establish contractual continuing service agreements with your clients.
Separately, the FCC also has clarified that a call in which you ask for referrals is subject to Do Not Call Registry restrictions, if you offer services in the same call. Be sure not to include any specific solicitations for business or offers of service in referral-activity calls. Focus these calls totally on asking for personal introductions and building networks.
Note: To take advantage of the ERB exemption, you are required to notify all ERB clients at least once per year that they may request to have their names removed from your ERB list, in which case you may no longer call them.
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