2. Agenda Actiance, why we are here The evolution of social media User adoption Risks of using social media Regulations worldwide FINRA Regulatory Guidance 10-06, 11-39 NAIC White Paper Why social is important to Insurance What you can do NOW
3. Why are we presenting to you today? Joanna Belbey Social Media and Compliance Specialist FINRA Education Department Running training firm I help firms use social media while complying with the regulations Twitter: @belbey LinkedIn: http://www.linkedin.com/in/belbey My biggest challenge?
6. Internet Application Usage: Perception vs Reality Perception: 62% of IT Professionals estimated social networking was used within their corporate network Reality: 100% used social networkingActual customer traffic history (150+ organizations)Representing all Internet activity from over 150K end users
7. What is Driving Social and Insurance? Sales & Marketing Promotions Advertising Branding Producers / Reps HR & Personnel Background checks Recruiting Analysts & Researchers Information exchange Collaboration IT Investigation of security breaches Interns, Colleagues, New Hires.. Collaboration
10. Risks of Using Social Media and Web 2.0 Data Leakage Incoming Threats Compliance & eDiscovery User BehaviorPersonal SEC, FINRA EmployeeInformation Malware, Spyware Productivity HIPAA, FISMAIntellectual Property Viruses, Trojans Bandwidth SOX, PCI, FSACredit Card, Explosion InappropriateSSN FRCP- eDiscovery Content Every employee isClient Records FERC, NERC the face of business
11. Industry-Specific Legislation and Regulatory Bodies Fin Ser / Insur Energy Healthcare Gov’t FINRA FERC HIPAA FRCP SEC NERC State of Oregon GLBA CFTC Florida GRS State of North SOX NFA Carolina NAIC / STATES
12. Pg. 13
13. FINRA Regulatory Notice 10-06:Guidelines for Social Networks Regulation Social Network and Web 2.0 ImpactRecordkeeping Retain records of communications related to business for specific time periods. If you type it out, it’s written. Recommendations must be suitable for every investor. Consider prohibitingSuitability product recommendations, unless preapproved. Consider blocking testimonials. Content standards. Responsible for third party content (links, posts) .Communications with the Public Entanglement / adoption. Consider blocking tweets, favorites, likes. Static content is advertisement, require preapproval. Interactive electronicAdvertising forums is public appearance, do not require pre-approval. Both supervised. LinkedIn, Facebook and Twitter have both. Use similar written supervisory procedures in place. Employ risk basedSupervision principals for review. Limit access unless supervised. Training required. Restrict communications between research and investment bankingFINRA Regulatory Notice 07-59 departments
14. FINRA Regulatory Notice 11-39Social Media Websites – AND use of personal devices for businesscommunications Key Topics Social Network and Web 2.0 ImpactCommunications with the Public Further clarification on personal versus business communications. SEA Rule 17a-4: Communications relating to the “business as such”.Personal Electronic Devices Independent of the ownership of the device. A reminder to preserve records of business communications, for a period of not less than three years. No difference between static and interactive contentRecord Keeping retention requirements.Social Networking Websites A change from 10-06. Approvals in the form in which they will be launched. Interactive content can become static. Therefore NASD 2210 applies and preSupervision approval is required. Appropriate training is required.
15. National Association of Insurance Commissioners (NAIC)The Use of Social Media in Insurance – Draft 9/29/11 Recordkeeping Suitability of Content Communications with the Public (3rd parties, adoption and entanglement) Advertising (Static & Interactive) Supervision
16. So, what’s a tweet? Pg. 17
17. The First FINRA Sanction for Social Media Jenny Ta FINRA found that Ta failed to inform a registered firm principal that she had a Twitter account which, on occasion, she used to tout a particular stock. FINRA determined that Ta’s “tweets” were unbalanced, overwhelmingly positive and frequently predicted an imminent price rise, and Ta did not disclose that she and her family members held a substantial position in the stock. Fined $10,000. Suspended one year.
18. So why is social important to us in Insurance? In the USA Gen Y accounts for $2.4 trillion worth of personal income In 2025 Gen Y will account for 46% of personal income Source: Javelin Research http://www.stltoday.com/business/local/article_719f49d8-15e6-5c5d-94b7- 992ab12d9f97.html?print=1 Base 26,749 online adults, USA, Source: Forrester Research, June 2011
19. What can you easily do: Now 1. Understand your firms landscape, get visibility. 2. Engage stakeholders in policy setting. Set the policy. 3. Consider and address the risks, in a granular fashion. 4. Provide education for your users on acceptable and appropriate use. 5. Issue and implement best practice guidelines. 6. Understand and manage the fallibility of human beings. 7. Record and retain (appropriate) communications. 8. Review and refine policies (regularly).
20. Contact Information firstname.lastname@example.org @Actiance, @belbeyFurther reading:NAIC: The Use of Social Media in Insurance http://www.naic.org/documents/committees_d_s ocial_media_exposures_110729_whitepaper_draf t.pdf Osterman Research White Paper“The Impact of New Communications Tools on Financial Services Firms” 2010 Internet Usage Survey Results Meeting FINRA 10-06 Compliance Guidelines White Paper Actiance Collateral Library http://actiance.com/products/collateral- library.aspx