Canada: CASL Is Here – Now What? Practical Issues For Insurers And Brokers

Last Updated: July 9 2014
Article by Bernice Karn

"You are receiving this message either because you have opted in to our email list, you are one of our customers or you work for an organization with which we have a relationship."

As of July 1, 2014, this type of message may become a familiar refrain in the emails you receive. Canada's new anti-spam law (commonly known as "CASL") prohibits the sending of any type of non-exempt "commercial electronic message" ("CEM") unless the recipient has first provided his or her informed, express, opt-in consent or consent can be implied.

Broadly speaking, CASL is a complex piece of legislation which is often ambiguous and contains a multiplicity of exemptions and implied consents that are found throughout the statute and its associated regulations. It also has "teeth", given the severe administrative monetary penalties of up to C$10 million per violation (in the case of corporations and other legal entities), C$1 million per violation (for individuals), vicarious liability of directors and officers, and a private right of action that will come into effect in 2017. Significantly, CASL has extraterritorial application; not only does it apply to messages sent within Canada but it also applies to messages received from senders located outside of Canada.

With CASL's wide reach, what are some practical takeaways for the insurance industry?

1. Messages and Relationships

In the absence of having obtained a CASL-compliant opt-in consent from the intended recipient, insurance industry participants must look at the types of messages that they are sending and the relationships that they have with various groups of recipients to determine whether any of the exceptions or implied consents apply to them.

CASL provides an exemption for "B2B" types of communications (i.e., where CEMs are sent between organizations that have some type of "relationship"). Broadly speaking, to take advantage of this exception, the message must be sent by an employee, representative, contractor or franchisee of an organization, and be relevant to the activities of the recipient organization. We note that this B2B exemption could extend to third-party business partners, such as marketing agencies, recruiting firms, service providers, and financial partners, to name a few. Insurers should be able to rely on the B2B exemption for the communications they send to their brokers.

However, insurance industry participants should be cautious about electronic communications sent to policyholders. Where the policyholder is an organization, again, the B2B exemption would likely apply. However, it is a slightly different situation if the policyholder is an individual. In that case, the insurer or broker would need to rely upon the "existing business relationship" implied consent, which generally expires two years after the policy terminates. That said, any such communication sent to the policyholder on the basis of implied consent must meet the CASL disclosure requirements and include an unsubscribe mechanism.

Maintaining a robust business development program while complying with CASL maybe difficult. Although there is a very limited one-time exception for referral emails, insurers and brokers who are prospecting for business electronically will find it challenging since this is exactly the type of behaviour CASL is designed to prevent. Creative advertising campaigns, incentives, paper-based promotions/contests, mailing, faxing and old fashioned cold calling will become the norm. One-to-one social media solicitations are permissible so long as the disclosure information and unsubscribe mechanism are available on the social media platform interface and the terms of use for the platform require at least implicit consent by users to receive these types of messages.

Requested quotes are a special problem under CASL. In the absence of an outright exemption between the parties based on their relationship (such as the "B2B" exemption discussed above), although the requested quote may be sent, the sender has to ensure that the message contains full CASL disclosure requirements and an unsubscribe mechanism.

2. Updating Forms and Agreements

Much in the same way as privacy consents have become commonplace in applications for insurance and in various types of contracts where the parties are dealing with personal information, CASL will likewise need to be addressed in these documents. It is always preferable to obtain an express, CASL-compliant opt-in consent because that type of consent does not expire (until the individual unsubscribes) and there is no argument about the type of exemption or implied consent that may or may not apply to it. Accordingly, insurance application forms should be revised to request CASL consents. Similarly, we recommend that, where appropriate, general commercial agreements should include a CASL clause between the parties to facilitate the sending of all types of electronic messages between them.

Where insurers are contemplating retaining third parties to communicate with policyholders on their behalf, they should ensure that the agreement governing their relationship includes CASL compliance provisions (including indemnification in case of any CASL violation by the third party), especially since CASL contains specific rules for consents that are sought or messages sent on behalf of third parties.

3. Effective Compliance Policies

Insurers and brokers should adopt a CASL compliance policy that addresses CASL compliance requirements and procedures, record keeping and regular audits of the company's CASL compliance program. Having a CASL compliance policy is an important risk management tool, since it forms part of an effective due diligence defence to violations of CASL, in which guilt is presumed.

The Canadian Radio-television Telecommunications Commission ("CRTC"), the agency responsible for enforcing CASL, recently issued guidance about the contents of a CASL compliance policy. The CRTC recommends that CASL compliance policies address the following elements:

  • Have senior management involvement;
  • Be based on a risk assessment and offer procedures to mitigate the risk;
  • Be reduced to writing and be updated on a regular basis;
  • Be available to all employees;
  • Include provisions for training and employee testing, auditing and compliance monitoring;
  • Address procedures for communications with third parties;
  • Establish record keeping and complaint handling mechanisms;
  • Create disciplinary procedures for non-compliance; and
  • Provide feedback mechanisms.

Record keeping under CASL may prove to be particularly onerous, depending on the complexity of an organization's activities and technological infrastructure. In a typical CASL compliance policy, the CRTC expects the following types of records to be maintained:

  • CEM policies and procedures;
  • All unsubscribe requests and actions;
  • All evidence of express consents (which may include audio recordings or forms);
  • CEM recipient consent logs (presumably for an online opt-in process);
  • CEM message scripts (where obtaining consent orally);
  • Records of actions taken re: CEM unsubscribe requests;
  • Marketing campaign records;
  • Staff training documents;
  • Business procedures related to CASL; and
  • "Official" financial records of the organization.

We suggest that any CASL compliance policy also include a complaint handling mechanism (and possibly identify a CASL compliance officer) since inevitably, individuals will come forward with complaints. Unfortunately, unscrupulous complainants may suggest that they will forego reporting it to the CRTC in exchange for "compensation" – this is where a clearly defined complaint handling protocol will facilitate the internal management of such situations. An effective CASL compliance policy should be coupled with regular training for staff.

4. Conclusion

CASL compliance is not always a straightforward task. It requires a detailed analysis of an organization's business operations, the types and roles of senders, the types of message recipients, the media, and platforms used and message contents. Depending on the situation and the business, in some instances it may be easier to treat various types of electronic messages differently at the front end, if they can be carefully tracked and managed. On the other hand, for some organizations that have many different business units, relationships and types of messaging, it may be easier to default to a single standard for its messaging and/or to rely on only a couple of types of consents, such as an existing business relationship or an express opt-in.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Bernice Karn
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions