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Why Insurers Need to Know About the TCPA

The Telephone Compliance Protection Act (TCPA) was enacted in 1991.The law places restrictions on telemarketing calls, the use of automatic telephone dialing systems (ATDS) and the use of pre-recorded or artificial voice messages. Updates to the TCPA include the creation of the Do Not Call Registry in 2003.

Compliance with the (TCPA) is an important concern for any insurer that engages in outbound calls or texts with consumers in the United States. The TCPA includes restrictions regarding whom telemarketers can call, how they can call them, and when they can call them. Generally, communication is allowed with customers, where there is an existing business relationship. The TCPA is also a concern for any insurer that uses text messages to communicate with people whom they do not yet have an established relationship. Failure to comply with these regulations may result in major penalties and lawsuits.

What Is an Established Business Relationship?

Businesses may be able to call individuals on the Do Not Call Registry if they have an established business relationship with them.

  • A company may call for up to 18 months after the consumer’s last delivery, purchase or payment.
  • A company may call for up to three months after a consumer makes an inquiry or submits an application.

If a consumer asks the company not to call again, the company must stop calling, even if there is an established business relationship. Continuing to call after being asked not to is a violation of the Do Not Call Registry and may result in a fine.

Wrong Number Violations

Organizations may violate TCPA regulations as a result of wrong numbers. For example, an organization may have obtained permission to call an individual at a certain phone number. Then the individual changes numbers, and a new individual acquires the phone number. To deal with the issues caused by recycled numbers, the FCC created a comprehensive database of recycled numbers. On April 15, 2021, the Reassigned Numbers Database (RND) went live. Callers should use this database to determine if a phone number has been reassigned and should therefore not be called.

TCPA Non-Compliance: The Risks are Substantial

The risks of TCPA non-compliance are substantial. Allstate Insurance is currently facing a class action lawsuit over allegations that the insurance company’s telemarketing campaign violated the TCPA. Violations of the TCPA and the Do Not Call Registry can result in expensive fines. Calling a number on the Do Not Call Registry can result in a fine applied per call. Because telemarketers usually engage in a high volume of calls, these fines can add up quickly.


  • $500 per violation,
  • $1500 if you send a call, text, or fax without consent, if it was done willfully or knowingly.

TCPA cases are the 2nd most prevalent type of litigation filed in federal court because they are profitable. Just a basic telemarketing campaign can easily reach 3500 customers and be subject to a per penalty class action suit aggregated to a settlement of over $5M. When an ATDS can quickly send out 10,000 text messages in a matter of seconds, it is easy to see how a TCPA class action lawsuit can amount to $15M.

Prior Express Consent

Under the TCPA, insurers need to obtain permission before engaging in automated phone calls or text messages. Although telemarketing calls or texts using an ATDS or pre-recorded voice require prior express written consent (PEWC), noncommercial and non-telemarketing commercial calls or texts require only prior express consent. Since dual-purpose calls are subject to TCPA regulations, insurers need to be cautious about any communications that could be considered both informational and a form of marketing or solicitation.

The FCC dictates that consent must:

  • Be obtained through a clear and conspicuous notification
  • Be evidenced by a signature (traditional or electronic) of the person called or texted
  • Messages have to be reasonably related to subject matter of consent agreement

The agreement must disclose:

  • The Organization or Company Name delivering the marketing
  • The telephone number authorized to receive the messages
  • The anticipated number of messages & frequency
  • Any message and data rates
  • No purchase is required
  • The methods available to ‘opt-out’ with ease

Compliance Challenges for Insurers

The most common challenges insurers face with TCPA compliance:

  • Failure to know the ins-and-outs of the TCPA
  • Failure to consult the National Do Not Call Registry
  • Failure to obtain customer express consent
  • Inability to properly track and maintain customer opt-ins/opt outs
  • Failure to properly train staff and third-party vendors
  • Failure to update lists after number reassignment
  • Failure to properly respond to revocation requests

Digital Engagement and the TCPA

Insurers have been increasingly turning to digital engagement to quickly connect with existing insureds to improve retention and strengthen relationships. Digital Engagement (outbound calls and text messages) is an extremely valuable communication tool that can lead to an increase in customer retention up to 10% and ultimately decrease loss ratio. Insurers can reach their policyholders in less time by messaging them through digital channels, which is especially helpful during policy lifecycle events, such as pending cancellation notices, policies cancelled for non-payment, expired policies, digital claim payment notifications, and reminders of upcoming renewals.

Digital Engagement Best Practices for TCPA Compliance

How can insurers leverage digital engagement and ensure TCPA compliance?

  • Obtain an “express agreement” that allows for receipt of calls, texts or faxes.
  • Maintain a database that houses the opt-in and opt out status of all insureds.
  • Check the database for opt-in/opt-out status prior to any contact.
  • If an insured has not Opted In or Opted Out, you must obtain an Opt-In
  • Ensure that recipients always have an Opt-Out avenue

10 Important Steps Insurers Need to Take NOW to Obtain Insured Opt-Ins

  1. Insert Express Agreement Language into your Insured Application
  2. Insert Express Agreement Language into your Endorsement Application
  3. Insert Express Agreement Language into your Renewal Offer
  4. Insert Express Agreement Language into your First Notice of Loss Process
  5. Have CSRs Opt-In Insureds on the Phone
  6. Have Insureds Opt-In via Inbound IVR solution
  7. Have Insureds Opt-In on your Website
  8. Have Insureds Opt-In on your Mobile Application
  9. Add Opt-In Language into Broker Agreements and Amendments
  10. Add Opt-In Language Wherever you have a Written Agreement or Partnership

Leveraging a Third Party for Technical Compliance

The risks of TCPA non-compliance are substantial. But the effort involved with TCPA compliance is also significant. Having to monitor both federal and state TCPA regulations, while also obtaining and managing customer express consent for opt-ins and opt-outs can be overwhelming. Using a trusted third party experienced in TCPA regulation, who utilizes legally compliant opt-in/opt-out protocols, an insurer-focused digital engagement engine, and an Opt-in/Opt-out database can significantly help insurers with critical TCPA compliance efforts and drastically reduce the risk of severe penalties.

Stay Compliant with One Inc

To discuss your unique customer engagement and TCPA compliance challenges, please call (822) 209-1688 or email inquiries@OneInc.com

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