Presentation by: Joanna Belbey, Social Media and Compliance Specialist, Actiance, Inc www.bdionline.com

1. Business Development Institute
Insurance Social Communications Leadership Forum
October 20, 2011
#BDI1
Joanna Belbey – Social Media & Compliance Specialist
@belbey, @actiance
www.linkedin.com/in/belbey
Confidential and Proprietary © 2011, Actiance, Inc.
All rights reserved. Actiance and the Actiance logo are trademarks of Actiance, Inc.

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?

4. About Actiance
Enable the New Internet
– 5,000+ Web 2.0 apps, Unified
Communications, Social Networks
Global operations
– USA, EMEA, India, Asia/Pacific
Market Leader
– 9 of the top 10 US banks
– 284 FINRA firms
– Top 5 Canadian banks
– 77,000 Social Network Users Under
License
Broadest Partner Ecosystem
– Technology alliances
Confidential and Proprietary © 2011, Actiance, Inc. All rights reserved.

7. Confidential and Proprietary © 2011, Actiance, Inc. All rights reserved.

8. Internet Application Usage: Perception vs Reality
Perception: 62% of IT Professionals estimated social networking was used within
their corporate network
Reality: 100% used social networking
Actual customer traffic history (150+ organizations)
Representing all Internet activity from over 150K end users

9. 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. Insurance Companies use of Social Media
Marketing (videos, recruitment, cause-based, Farmville)
Forensic Data Mining (workman’s comp, claims, assess risk in
future?)
Customer Service
Understanding Marketplace
Producers
9 Confidential and Proprietary © 2011, Actiance, Inc. All rights reserved.

11. e

12. Risks of Using Social Media and Web 2.0
Data Leakage Incoming Threats Compliance & eDiscovery User Behavior
Personal SEC, FINRA Employee
Information Malware, Spyware Productivity
HIPAA, FISMA
Intellectual Property Viruses, Trojans Bandwidth
SOX, PCI, FSA
Credit Card, Explosion
Inappropriate
SSN FRCP- eDiscovery
Content Every employee is
Client Records FERC, NERC the face of business

13. 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

14. Pg. 13

15. FINRA Regulatory Notice 10-06:
Guidelines for Social Networks
Regulation Social Network and Web 2.0 Impact
Recordkeeping 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 prohibiting
Suitability 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 electronic
Advertising 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 based
Supervision
principals for review. Limit access unless supervised. Training required.
Restrict communications between research and investment banking
FINRA Regulatory Notice 07-59 departments

16. FINRA Regulatory Notice 11-39
Social Media Websites – AND use of personal devices for business
communications
Key Topics Social Network and Web 2.0 Impact
Communications 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 content
Record 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 pre
Supervision approval is required. Appropriate training is required.

17. 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

18. So, what’s a tweet?
Pg. 17

19. 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.

20. 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

21. 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).

22. Contact Information
info@actiance.com
@Actiance, @belbey
Further 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

23. To infinity….. And beyond..