This post is part of a series sponsored by AgentSync.
Historically, compliance has been seen as a necessary evil for insurance carriers. The dynamic often pits compliance or operations teams against sales, it causes silos, and it sows division in your organization.
Everyone has gotten used to compliance being the “no” team, seeing it as a priority for only as long as it needs to be. In fact, for some carriers, onboarding might be one of the only times a producer is subject to the compliance team’s review.
For carriers stuck in this mindset, compliance can be clunky and burdensome, and staff turnover will plague their efforts to establish a thoughtful and efficient team, as institutional knowledge and processes are challenged by professionals who want to find meaning and purpose in their work.
Let’s look at the challenges of the current state of compliance, and how a mindset-shift can transform this cost-center into a core aspect of your business architecture.
Current approach to compliance in the insurance industry
Many carriers – even carriers that have a tech-based compliance solution – still work off a spreadsheet, or they work in a single system that requires a lot of manual touches. Each process is highly tedious, which means your team likely faces these common challenges:
- Appointing every producer that asks, when they ask, because the appointment process may take a month or more
- Waiting for agencies to notify you of producer-level data because you don’t have insight into your individual producers
- Using paper or PDF licenses to verify that your producers are “authentic” with their relevant states
- Trying to speed up your appointment and onboarding processes by doing steps asynchronously, even though it just causes more confusion
While these are all concessions that attempt to bridge the gap between the full compliance you need and the speed and service your recruiting team would like to see, your producer compliance ends up feeling chaotic. Your team feels inefficient and demoralized, having to look in three places to answer questions from recruiters, agency partners, or producers about where someone is in the onboarding process.
You know this process frustrates your producers and your internal teams alike. But you might also be overlooking the business risks of keeping with the status quo:
- Paper licensing is a regulatory risk because it only validates that your producer was in good standing with their state when the license or renewal was first issued
- Appointing every raised hand could leave you with a bunch of fees for people who might not write for you
- Asynchronous processes get messy, where you’re not saving time you’re just causing confusion
- Often, for every day it takes to onboard a new producer, they’re writing business for a competitor, assuming they even stick it out to finish the onboarding process as opposed to abandoning the relationship altogether
Rethinking producer compliance as part of your core business function
What if you reprioritized compliance? What if you saw compliance as a critical component of your core business functions, and not as a necessary sidecar, an obstacle to overcome for your onboarding?
Tech isn’t the (entire) answer
Tech is certainly part of the answer. But many carriers that have digitized their processes often do just that – take their current process and make it digital. How many carriers did a tech upgrade and then started to collect paper licenses via PDFs in emails instead of paper faxes? That’s not an upgrade. It’s just a digitization.
Instead, carriers need to get organizational buy-in to transform not just their compliance processes but their business processes to think about compliance in terms of quality data.
Better data transforms compliance into a business center
Today’s compliance looks like a checklist of necessary (but s-l-o-w) processes. By breaking it into its essential data components, you can begin to envision how your business can not only do compliance better, but also use that data to make essential – and efficient – business decisions.
For instance, many carriers have a backlog of “pending” or “held” commissions. These are a sore spot in carrier relationships with their agencies, producers, and other downstream distribution partners. But carriers that want to do their due diligence know that some of the biggest regulatory actions come when a carrier pays a commission to a producer who sold business out of licensure. So, they understand that checking producer licenses before cutting the checks is an important aspect of protecting the business from risk.
If we re-imagine the commission cycle as a series of data – data about who sold the policy, their licenses and appointments, their upline structure, their contract with the insurance carrier – we can then envision how to get the most reliable data. Sourcing data via the National Insurance Producer Registry (NIPR) gives you the most accurate and reliable data about producers. Hopefully your policy admin system and contract management software keeps upline relationships and commission structures current. So if you, the carrier, can integrate that data into your entire commission system and workflows, you can pay out commissions automatically, knowing every payment is compliant. This also leaves your staff free to only focus on the commissions that run afoul of your de-risked parameters.
Once your business has shifted this mindset, there are limitless ways to leverage your compliance data in core business functions. Read more about how to make use of atomized compliance data and move beyond simple producer management.
Best practices for embracing compliance as a data function
How do you move your organization into this lush future state of constant compliance and transformative data that makes you efficient, profitable, and competitive?
Embrace that onboarding is crucial, and individual producers matter
It can be easy to onboard an agency and skimp on collecting individual-level data, but your understanding of your own business data actually starts with making sure you’re collecting more from your producers on the front end.
Use data fed via API from the industry source of truth
No more paper licenses, no more requiring producers to print or have a copy of a PDF license. That only tells you that a producer got a license at some point in time, it doesn’t tell you if that producer has a red flag today! Use a direct sync with NIPR to ensure your producer data is actually up to date.
Meet individual producers where they’re at with an opt-in combination of portals and automatic notifications
Self-service matters to your producers. But so does white-glove, done-for-you service. Meet your producers’ expectations by giving them the best of both worlds, providing transparency into your entire process – the more your producers can do for themselves, the less time your internal team spends on reminders, updates, and hand-holding.
Getting organizational buy-in
It can feel impossible to get the powers that be to buy into this mindset shift. But offering up a vision of your future-state can be of great assistance. Some of these potential benefits include:
- True visibility into ROI of downstream distributors
- Smoother onboarding = less risk AND ALSO better retention of recruited partners
- Reduced appointment costs both at onboarding and renewal
- Faster pivoting to respond to shifting economic conditions
- Lower operational headcount
Making these kinds of sweeping changes to your organizational approach to compliance isn’t something you can do in isolation. But better compliance ultimately starts with rethinking data.
At AgentSync, we’re here to help you meet producers where they’re at by meeting you where you’re at. If you’re looking for a producer compliance management solution that surfaces your data with robust reporting and intuitive dashboards so your team can monitor the near-real-time license and appointment information of your total distribution channel, we’ve got that. If you’ve got in-house software but you need data from the industry source of truth to integrate into your other core systems, we’ve got that, too. And if you want to offload your processes onto an external team but keep the visibility and data access that makes compliance a business differentiator for you, we can cover you there, as well.
Get started with a demo today.
