Florida’s Insurance Advertising and Promotional Gift Law Expanded
Jun 15, 2018
By Wes Strickland
In its 2018 session the Florida Legislature passed a bill (CS/CS/HB 483) that expands the types and value of advertising and promotional gifts that insurers and agents may give to insureds and prospective insureds. The legislation was signed by the Governor on April 6, 2018 and becomes effective on July 1, 2018.
Prior to July 1, 2018, Section 626.9541(1)(m) of Florida’s Unfair Insurance Trade Practices Act permits insurers and agents to give insureds, prospective insureds and others, for the purpose of advertising, articles of merchandise having a value of not more than $25. The Florida Department of Financial Services (DFS) has narrowly interpreted this law to limit such gifts to articles of merchandise valued at $25 or less, such as umbrellas, calendars, pens, bags and other promotional items bearing the insurer or agent’s name or logo. Items such as gift cards and event tickets have historically been deemed not to constitute “articles of merchandise” and fall outside of the scope of this law. Advertising gifts that do not fall under the scope of this law could be deemed unlawful inducements or rebates.
Effective July 1, 2018, the new legislation substantially expands Section 626.9541(1)(m), Florida Statutes, by allowing insurers and agents to give advertising and promotional gifts having a total value of not more than $100 per insured or prospective insured in any calendar year. Although an annual limit has been added to the law, the total value has increased by $75. It should be noted that the annual limit is based on a calendar year, so insurers and agents should avoid providing multiple gifts in any calendar year that exceed a total value of $100 per insured or prospective insured.
In addition, the new legislation expands the types of promotional items that may be provided by insurers and agents to insureds, prospective insureds or others. The language in the current law restricting gifts to be made “for the purpose of advertising” has been deleted, which allows something other than branded merchandise to be given. As of July 1, 2018, insurers and agents will be permitted to give not only branded “articles of merchandise,” but also goods, wares, store gift cards, gift certificates, event tickets, anti-fraud or loss mitigation services, or “other items.”
It is important to note the legislation refers specifically to “store gift cards” and does not mention pre-paid debit cards, or bank branded gift cards (e.g., Visa or American Express) that could be used at any merchant who accepts such debit or gift cards. Such pre-paid debit or gift cards would likely be deemed a cash equivalent and not a permissible “item” that falls under the scope of the new law. Giving cash and cash equivalents to insureds or prospective insureds is still prohibited as an unlawful inducement or rebate unless provided pursuant to a lawful rebate program. However, a new exception to the prohibition on giving cash or cash equivalents is provided for charitable donations made by an insurer or agent on behalf of an insured or prospective insured, subject to the calendar year limit of $100 per insured or prospective insured.
The new legislation further allows title insurance agents, title insurance agencies and title insurers to give to insureds, prospective insureds or others, for the purpose of advertising, any article of merchandise having a value of not more than $25. This addition to Section 626.9541(1)(m) of Florida’s Unfair Insurance Trade Practices Act permits title insurance agents and insurers to provide advertising gifts under the same limitations as to value and type that non-title insurance agents and insurers are permitted to give under the current law prior to July 1, 2018.
Insurers and agents are cautioned to confer with compliance counsel or the DFS prior to giving promotional items that are not specifically enumerated in the new legislation, i.e. goods, wares, store gift cards, gift certificates, event tickets, anti-fraud or loss mitigation services. Title insurance agents and insurers should be mindful of the more limited category of advertising gifts that they are permitted to provide to insureds and prospective insureds or others under the new legislation.
About the Author
Wes Strickland is a Shareholder at Colodny Fass and heads the firm’s Insurance Regulatory & Transactions Practice in Tallahassee, Florida. He can be reached at (850) 321-3475 or wstrickland@colodnyfass.com.