Falling Behind on Your Producer Compliance Doesn’t Have to Happen

This submit is a part of a sequence sponsored by AgentSync.

Query: If every state is accountable for regulating its personal insurance coverage trade, and there are 50 states within the U.S., what number of totally different entities dictate insurance coverage compliance?

Reply: 56

Looks as if a trick query? Together with every of the 50 state departments of insurance coverage, the District of Columbia, and every of the 5 U.S. territories have their very own insurance coverage division or fee. Every state can, in concept, set completely totally different guidelines for any producer who needs to be licensed in that state. On high of that, the federal authorities can and does weigh in on insurance coverage trade legal guidelines from a nationwide degree.

As you may think, the variety of cooks within the kitchen on the subject of insurance coverage legal guidelines could make the system troublesome to maintain up with. The Nationwide Affiliation of Insurance coverage Commissioners strives to deliver some consistency to state insurance coverage legal guidelines, significantly via its Producer Licensing Uniformity Working Group, however thus far, there’s nonetheless a big degree of variability from one state to the following.

This disparity makes complying with insurance coverage trade legal guidelines and rules an actual ache level for a lot of carriers, MGAs, and insurance coverage companies – significantly on the subject of insurance coverage producer licensing.

Regulatory compliance in a related world

In immediately’s distant world, it’s uncommon for an insurance coverage company to do enterprise in just one state. Using digital instruments to attach with clients from wherever opens up enterprise alternatives that weren’t out there to native brokers twenty or thirty years in the past. This chance, nonetheless, comes with the problem of complying with multiple set of legal guidelines.

And, if attempting to maintain up with as many 57 totally different units of guidelines was not sufficient, every state (and the federal authorities!) continues to make adjustments to their insurance coverage legal guidelines – actually by the day. Whether or not it’s a legislative change, a judicial evaluation that recharacterizes our understanding of current legal guidelines, or steerage from a regulatory physique, there are a number of methods for quite a few regulators to disrupt your present understanding of insurance coverage legal guidelines.

The distinctive challenges of insurance coverage regulatory compliance

Think about an insurance coverage company with 10 producers, and every solely does enterprise inside a single state. This company may really feel that holding data on a spreadsheet is the best strategy to handle their producer licensing and appointments. If a state or federal insurance coverage regulation adjustments, they will modify uniformly throughout their workforce.

Think about now that an insurance coverage company has 50 licensed producers who’re every licensed to promote varied traces of enterprise throughout varied states and territories. When a regulation adjustments, the company’s first activity is to find out which of their producers these adjustments even apply to! That’s no straightforward feat if the company doesn’t have a streamlined system in place.

Then, what occurs when a producer who was beforehand not licensed in a specific state turns into so? Does the company make use of a compliance officer and is that individual on high of each new state, or line of enterprise, that every producer is writing enterprise in always?

This doesn’t even contact on the query of what occurs when one new regulation impacts how current legal guidelines are anticipated to be dealt with. In all however the smallest companies, the altering state of insurance coverage legal guidelines and rules has a ripple impact that’s arduous to handle.

With the tempo of change in insurance coverage trade legal guidelines and rules, the room for human error is simply too nice.

How expertise solves the challenges of insurance coverage producer licensing and compliance

With regards to insurance coverage producer compliance, having expertise in place to remove the handbook effort and guesswork is usually a actual lifesaver. Regulatory adjustments within the insurance coverage trade are inevitable, however with the best expertise, getting misplaced in a sea of legal guidelines and compliance points doesn’t should be.

Think about an company with 50 licensed producers appointed to promote varied traces of enterprise, with a number of carriers, throughout numerous states and territories. Now, think about that this company has entry to a hen’s eye view of each single producer’s licensing and appointment standing for every line of enterprise, in every state.

Think about real-time updates from precise state-level knowledge every time a rule or regulation adjustments, together with alerts that notify the company if motion is required for any certainly one of its 50 producers to stay in compliance with all relevant legal guidelines.

With AgentSync, none of those situations are restricted to your creativeness. AgentSync is really an end-to-end producer licensing and insurance coverage compliance administration instrument that can aid you keep forward of insurance coverage compliance pitfalls. In case you are able to spend extra time serving shoppers and constructing enterprise and fewer time monitoring the near-daily adjustments to insurance coverage legal guidelines, watch a demo and see how we can assist.

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