Brokers looking to send out mass emails about an insurance product to a blind prospect list might want to brush up on the Canadian government’s proposed anti-spam regulations.
The Government of Canada recently posted revised anti-spam regulations for public comment. Canada's new anti-spam law was passed in December 2010 and will enter into force following a Governor in Council order. A specific date for coming into force will be set in the coming months.
Essentially, the legislation requires email senders to gain the consent of their recipients before sending out “commercial electronic messages.”
“Spam has become the vehicle for a wide range of threats to online commerce affecting individuals and businesses,” said Debbie Thompson of Beyond Insurance Brokers. “Education and awareness are keys to ensuring that individuals and businesses are taking the right steps in proactively combating spam, and spam filters and anti-virus software are especially helpful in this regard.
“I would agree that a consumer opt-in approach should be adopted, which stipulates that businesses must get consent prior to sending any marketing material if you don’t have a pre-existing relationship with your customer.” (continued)#pb#
Several brokers and associations contacted for this story said the legislation has not yet passed, and so it’s too early to tell exactly how these proposed regulations might affect brokers. One potential area of application could be sending out emails to prospective clients with whom brokers have not yet done business.
The anti-spam regulations apply to all commercial electronic messages, which the government defines as “any electronic message that encourages participation in a commercial activity, regardless of whether there is an expectation of profit.”
Once the regulations are in effect, brokerages and other businesses sending out commercial messages will have to obtain consent from the recipient before sending the message. Also, the sender will need to include information that identifies the sender and enables the recipient to withdraw consent, such as an ‘unsubscribe’ option.
The maximum penalty for a violation is $1 million for an individual, and $10 million for a corporation.
The legislation does not apply to sending out business quotes for the supply of a product (so long as the recipient solicited the quote), or if the broker has “an existing business relationship” with the recipient.
The limits of the existing business relationship are defined as the purchase of a product within a two-year period before the day a message is sent, or within six months of an inquiry or application being made by the recipient related to the purchase of a product.
The Insurance Brokers Association of B.C. (IBABC) has referenced the anti-spam legislation in past newsletters and in an online blog. It generally cautions brokers to be aware of the forthcoming legislation.
In terms of general counsel, the IBABC advises brokers to:
• provide an opt-in mechanism to obtain consumers' consent to be contacted.
• be aware of the limits for "pre-existing business relationship" exemptions.
