Even with the business issues that insurance entities must face in the online world, insurance e-commerce is here to stay. While regulatory guidance is still in a nascent stage, the relative absence of regulatory directives has not deterred the entrance of new niche players that are willing to assume the risks and rewards of online insurance sales. Regulatory obstacles to a certain extent will remain, but pro-active participants will succeed in overcoming such impediments and in leveraging their current distribution channels to take advantage of the Internet. Especially licensing requirements have come to the forefront as licensed producers partner with unlicensed websites, either merely to display their advertisements or to engage in joint ventures or other business arrangements. In the context of advertisements, two interrelated questions frequently arise: whether the unlicensed website advertisement is actually a solicitation, which would require the site owner to obtain a license, and how the unlicensed website may be compensated for posting the advertisement. In the few states that have issued guidance, the answer depends on the nature of the activity conducted on the unlicensed website, i.e., whether it is a passive advertisement, an advertisement coupled with a link to the insurance website, or one coupled with a recommendation of a particular agent or product. In addition, licensed and unlicensed entities faced numerous other issues, such as online excess insurance transactions, as they have tried to apply existing insurance laws to the world of insurance e-commerce.
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