This post is part of a series sponsored by AgentSync.
Historically, compliance has been seen as a necessary evil for insurance carriers. Change often pits compliance or sales teams against sales, creates silos, and sows division in your organization.
Everyone has become accustomed to being the “no” group, seeing it as the most important thing as long as it is needed. In fact, for some carriers, onboarding may be one of the occasions when the operator is under review by the compliance team.
For those involved in this concept, compliance with the law can be difficult and burdensome, and employee benefits will hinder their efforts to establish a thoughtful and efficient team, as institutional knowledge and procedures are challenged by professionals who want to find meaning and purpose in their work.
Let's take a look at the challenges of the current compliance landscape, and how a mindset shift can transform this cost center into a core part of your business architecture.
The current state of compliance in the insurance industry
Many carriers – even carriers with a technology-based compliance solution – still work on a spreadsheet, or work on a single system that requires a lot of manual touch. Each process is very stressful, which means your team is likely to face these common challenges:
- Nominating every producer who asks, if they ask, because the nomination process can take a month or more
- It is waiting for the agencies to inform you of the manufacturer level data because you do not have information on your individual manufacturers
- Using paper or PDF licenses to ensure that your manufacturers are “authentic” with their respective states
- Trying to speed up your appointment and onboarding processes by doing the same steps, even just creates more confusion.
While these are all deals that try to bridge the gap between the full compliance you need and the speed and service your search team would like to see, your manufacturer's compliance ends up being noisy. Your team feels understaffed and disrespected, having to look in three directions to answer questions from recruiters, agency partners, or producers about where someone is in the onboarding process.
You know this process is frustrating for your producers and your internal teams alike. But you may also be overlooking the business risks of maintaining the status quo:
- Paper licensing is a regulatory risk because it only ensures that your producer was in good standing and standing at the time the license was issued or renewed.
- Picking all the hands that are raised can leave you with a lot of money to pay people who might not write for you
- Asynchronous processes get worse, when you don't save time you just create confusion
- Often, every day you need to onboard a new producer, they write to a business competitor, thinking they've stuck it out to complete the onboarding process instead of abandoning the relationship altogether.
Rethinking manufacturer compliance as part of your core business function
What if you reprioritized compliance? What if you saw compliance as an integral part of your core business operations, and not as a necessary sidecar, hurdle to overcome on your ride?
Tech is not (all) the answer
Tech is certainly part of the answer. But many carriers that have digitized their processes tend to do just that – take their current process and digitize it. How many carriers have developed technology and started collecting paper licenses in PDFs from emails instead of paper faxes? That's not an upgrade. It's just digital.
Instead, carriers need to get organizational buy-in to transform not only their compliance processes but also their business processes to think in terms of quality data.
Better data turns compliance into a business center
Today's compliance looks like a checklist of necessary (but slow) processes. By breaking it down into its key data components, you can begin to envision how your business will not only improve compliance, but also use that data to make important — and effective — business decisions.
For example, many carriers have a backlog of “pending” or “held” commissions. These are pain points in the carrier's relationship with their agencies, producers, and other downstream distribution partners. But carriers who want to do their job right know that some of the biggest regulatory actions come when a carrier pays a commission to a manufacturer who sold the business without a license. Therefore, they understand that checking the manufacturer's licenses before cutting the checks is an important aspect of protecting the business from risk.
If we re-think the commission cycle as a series of data – data about who sold the policy, their licenses and designations, their upline structure, their contract with the insurance company – we can think about how to get more reliable data. Finding data through the National Insurance Producer Registry (NIPR) provides you with the most accurate and reliable data about producers. I hope your policy management system and contract management software keeps your senior relationship and commission structures up to date. So if you, the manager, can integrate that data throughout your commission system and workflow, you can automatically pay commissions, to know every payment is compatible. This also leaves your staff free to focus solely on commissions that abuse your risk-removal limits.
Once your business has evolved this mindset, there are limitless ways to improve your compliance data for core business functions. Learn more about how to use atomic compliance data and go beyond simple manufacturer management.
Best practices for adopting compliance as a data function
How do you move your organization to this comfortable future state of constant compliance with changing data that keeps you efficient, profitable, and competitive?
Accept that riding is important, and individual manufacturers do matter
It can be easy to jump on board with an agency and skip collecting individual-level data, but your understanding of your business data really starts with making sure you're collecting more from your producers in the first place.
Use API-fed data from a true industry source
No more paper licenses, manufacturers no longer need to print or have a PDF copy of the license. That only tells you that a producer got a license at a certain time, it doesn't tell you if that producer has a red flag today! Use direct synchronization with NIPR to ensure your manufacturer's data is up to date.
Meet individual producers where they are with a combination of opt-in portals and automated notifications
Self-service is important to your producers. But so is white-glove, personalized service. Meet your producers' expectations by giving them the best of both worlds, providing transparency throughout your 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 may seem impossible to find the buying power in this mindset shift. But giving an idea of your future situation can be very helpful. Some of these potential benefits include:
- True visibility into the ROI of downstream distributors
- Smoother onboarding = less risk AND better retention of fellow recruits
- Reduced appointment fees for both onboarding and renewal
- Quick pivoting to respond to changing economic conditions
- Low performance figure
Making these kinds of big changes to your organization's approach to compliance is not something you can do alone. But better compliance ultimately starts with rethinking data.
At AgentSync, we're here to help you meet producers where they are by meeting you where you are. If you're looking for a manufacturer compliance management solution that puts your data into robust reporting and intuitive dashboards so your team can monitor real-time license and appointment information for your distribution channel value, we've got it. If you have in-house software but need data from a true industry source to integrate with your other critical systems, we've got that, too. And if you want to offload your processes to an external team but retain visibility and access to the data that makes compliance a business differentiator for you, we can cover you there too.
Get started with a demo today.
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