Is Insurance-Related Telemarketing Covered by the Telemarketing Sales Rule?

The Federal Trade Commission’s Telemarketing Sales Rule (“TSR”) helps the FTC enforce the federal Telemarketing and Consumer Fraud and Abuse Prevention Act. It provides the FTC with law enforcement tools to combat telemarketing fraud, gives consumers defenses against unscrupulous telemarketers, and helps consumers tell the difference between fraudulent and legitimate telemarketing.

If your telemarketing campaigns involve any calls across state lines — whether you make outbound calls or receive calls in response to advertising — you may be subject to the TSR’s provisions. However, some types of businesses are not covered by the TSR even though they conduct interstate telemarketing campaigns; specifically banks, common carriers, and non-profit organizations.

Businesses that sell insurance have a special limited exemption due to the effect of another federal law, the McCarran-Ferguson Act, 15 U.S.C. §§ 1011-1015. The McCann-Ferguson Act exempts the business of insurance from most federal regulation, including the FTC Act and (by extension) the TSR. The McCarran–Ferguson Act does not itself regulate insurance, but rather it allows states the freedom to regulate that business.

However, the FTC and the TSR are applicable to the business of insurance in any area in which such business is not regulated by state law. In other words, whether insurance-related telemarketing is exempt from coverage of the TSR depends on the extent to which state law regulates the telemarketing at issue. Most states extensively regulate the insurance industry, so there is often little room for federal enforcement.