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This put up is a part of a sequence sponsored by AgentSync.
Have you ever ever tried brewing beer at dwelling? There are a ton of steps concerned – cleansing the tools, brewing the grains, including the hops, cooling the wort, cleansing the tools once more, aerating the wort, fermenting the brew, cleansing every thing once more, bottling the beer, letting the bottles sit for 2 weeks – and even in the event you do each step completely, it’s possible you’ll find yourself with exploding glass beer bottles stinking up your own home.
Monitoring Nationwide Producer Numbers (NPNs) by yourself is lots like this.
In all seriousness, although, NPNs are necessary. Very, essential. And precisely monitoring them will be the distinction between compliance and noncompliance. However that’s simpler mentioned than finished.
What are NPNs and why do they have to be tracked?
NPNs are distinctive identifiers assigned to each particular person and most companies on the Nationwide Insurance coverage Producer Registry’s Producer Database. Everybody concerned in insurance-related actions regulated by a state insurance coverage division wants an NPN, together with adjusters, navigators, and producers.
NPNs are nationwide, a rarity on this planet of insurance coverage regulation. Whereas insurance coverage is usually regulated on a state-by-state foundation, the aim of getting a nationally tracked quantity is so as to add consistency and oversight throughout state insurance coverage departments.
For example, think about a producer is licensed in Nebraska and racks up a bunch of regulatory actions, which then makes their license inactive. With out a nationally acknowledged identifier, different states – and companies inside these states – might not find out about these actions and should permit that producer to get licensed of their state.
Since each particular person or entity within the insurance coverage distribution chain is on the hook for compliance, it’s necessary to make sure everybody has the suitable licensure. And by monitoring NPNs – monitoring licenses – carriers, businesses, and MGAs/MGUs can make sure the producers and entity companions they work with meet the regulatory necessities to promote, solicit, or negotiate insurance coverage.
This will likely sound easy sufficient, however lest there’s any doubt: It isn’t.
A sticky state of affairs
There are greater than two million people and over 236,000 companies licensed to supply insurance coverage providers in the USA. That’s a whole lot of NPNs.
And certain, carriers, businesses, and MGAs/MGUs don’t essentially want to trace all 2,236,000+ NPNs to stay compliant and keep away from regulatory actions. However some carriers want to trace the NPNs for hundreds, if not a whole bunch of hundreds, of producers. And a few of these producers is likely to be licensed in fairly a couple of states or territories (56!) throughout a number of traces of authority.
That has the potential so as to add as much as a sum complete of a complete lot of knowledge.
Monitoring these NPNs and managing all of this knowledge with out a specialised know-how resolution – even when finished meticulously – comes with a slew of prices.
Salaries
Manually sorting by hundreds of thousands of knowledge factors takes a village. In actual fact, you’ll most likely want to separate the work throughout organizational groups or departments, together with gross sales, enterprise operations, advertising, engineering, and compliance.
Your gross sales workforce might must confirm they’ve the suitable licensure for each state during which they function earlier than promoting a coverage. Are there any new regulatory actions? Is a license reaching its renewal interval? A gross sales director or gross sales consultant might must log in to NIPR to examine the standing of purposes and licenses. This takes day trip of their day, time that might be spent operating the gross sales ground.
And also you’ll actually want a compliance workforce to make sure a constant compliance technique throughout your organization. However with out a know-how resolution to facilitate the method of monitoring NPNs, your compliance workforce will spend valuable hours cross-referencing a number of spreadsheets in opposition to a number of web sites. That isn’t very environment friendly and it isn’t a very good use of your staff’ time.
Now, take into account what number of staff are presently concerned in your NPN monitoring course of? Ten? Fifty? Salaries are costly and that’s a whole lot of salaries. So what in the event you may lower that quantity all the way down to half? Or all the way down to 1 / 4?
Errors
The most important worth of monitoring NPNs by yourself is the price of human error.
In 2019 there have been 5,546 regulatory actions with a complete of $30,441,868 in fines. Certain, a few of these regulatory actions occurred as a consequence of deliberately shady conduct on the a part of carriers, businesses, MGAs/MGUs, or producers, however most regulatory actions and fines are the results of errors.
It doesn’t have to be this manner.
Spend money on a tech resolution
Thankfully, we now have the know-how to resolve this downside.
With licensing software program, firms can scale back the variety of staff who must have a hand in monitoring NPNs and managing compliance. That doesn’t imply these staff are in need of a job. Slightly, they’ll have extra time to spend promoting insurance coverage insurance policies, creating state-of-the-art compliance methods, or partaking in any variety of artistic and thought-provoking duties.
Since computer systems are good at crunching numbers and evaluating knowledge factors, utilizing a software program resolution to assist monitor NPNs will scale back the variety of errors made in compliance administration. That’s inarguably a very good factor.
Take a look at our options overview web page to be taught extra about how AgentSync will help you streamline your compliance administration whereas concurrently decreasing prices.
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