The Office of the Insurance Commissioner adopted rules relating to lead cards in January 2016. The following is a brief summary of the amendments and rule changes along with some suggested best-practices guidelines and examples to assist in promoting compliance and minimizing confusion.
Lead cards are defined as communications distributed to the public that are used to compile a list containing names or other personal information regarding individuals who have expressed an interest in receiving information about insurance. A licensed insurance producer may pay a person for the purchase of lead cards or a mailing list under certain conditions.
- The amount of compensation cannot be based upon the number of prospects that actually apply for or obtain insurance or the number of quotes issued,
- The person selling the lead cards or mailing list must be in the business of selling lead cards or mailing lists,
- The lead cards must not seek information on behalf of a specific insurance company, and
- The lead cards must not seek information on behalf of a specific insurance producer.
1. An insurance producer pays a lead generator $100 a year.
An insurance producer may compensate a lead generator for the purchase of lead cards or a mailing list of prospective insureds, provided the amount of the compensation is not based upon the number of prospective insureds that apply for or obtain insurance or the number of quotes issued to prospective insureds.
2. An insurance producer compensates a lead generator for all of the leads provided with a bonus payment for those leads that resulted in a sale.
This is not permitted. The amount of compensation to a lead generator cannot be based on the number of individuals that obtain insurance.