For insurance carriers, agencies, MGAs, MGUs, and everyone else across the insurance distribution channel, “compliance” is often a four-letter word. With a reputation for being slow, manual, and tedious, it’s no wonder insurance license compliance doesn’t have most people jumping for joy. But, with new technology solutions, it doesn’t have to be that way.
Whether you’re just starting the journey towards automated compliance or you’re well on your way and trying to remove those last few roadblocks, we’ll explain how and why you’ll want to add background checks into your modern insurance workflow.
Keeping your insurance producers and dually licensed broker-dealers compliant with all state and federal regulations can be a slow and manual job. It often leads to high operational costs, unsatisfied employees, and can even cause otherwise great insurance agencies to lose talented new producers midway through a tedious onboarding process.
And, lest you think that compliance isn't really "your problem," the truth is that each member of the insurance distribution channel – from carriers to agencies to MGAs and MGUs – is responsible for playing a role in compliance.
If dealing with insurance agents and adjusters wasn't enough, the complexity of dual insurance and securities licensing creates an even bigger burden for any carrier or agency working with dually licensed broker-dealers across multiple insurance and financial products in multiple states.
Luckily, modern compliance solutions have the potential to make this process more efficient, cost-effective, and worry-free for everyone, from insurance carriers and agencies to individual producers, adjusters, and broker-dealers. Unfortunately, many insurance industry organizations aren't taking advantage of these solutions. Even for companies modernizing other parts of their operations, like customer service or billing, producer license compliance management remains largely manual.
Getting producers licensed and appointed, and renewing their licenses each year (or alternate schedule) in each state that requires it is no small task. Many insurance carriers and agencies have at least one person dedicated full-time to manually checking each producer, adjuster, or broker-dealer's license status, background information, continuing education requirements, and more.
Doing this manually, or (best case) with outdated technology like spreadsheets and home-grown workarounds, costs insurance businesses more than they realize.
For example, what's the cost – in both dollars, time, and reputation – for each of the following?
These are just a few of the many costs and risks that come with managing compliance by hand or by spreadsheet, PDF, Google Drive, shared network drive, or any less-than-ideal method still used by much of the insurance industry.
Living in the 21st Century has its benefits: Streaming services, same-day grocery delivery, and modern cloud-based insurance compliance management solutions, just to name a few.
Take AgentSync for example. It creates modern insurance infrastructure that connects the entire industry, automates the most important parts of producer compliance management, and reduces the costs and risks associated with legacy methods.
"When we started looking for a solution, our goal was to get the agent onboarding process down from two-and-a-half or three months to a couple of weeks. That would have been ideal. After implementing AgentSync, we saw brokers being turned around in two days."
With AgentSync, insurance carriers, agencies, and everyone in between can stay informed of real-time producer compliance statuses with state regulations baked in. Agencies can offer their producers a personalized, user-friendly experience for onboarding and license renewal tasks. And, for both agency and carrier staff and downstream producers, agents, and brokers, a two-way data sync with the National Insurance Producer Registry (NIPR) provides a single source of truth about each producer and their compliance status.
With a modern compliance solution like AgentSync, the producer license management process goes from tedious, costly, error-prone, and painfully slow to automated and nearly instantaneous.
But not so fast! There's still the background check to contend with.
If you're a new insurance producer lucky enough to be onboarding at an agency that uses AgentSync to automate and streamline the experience, you might be surprised when the otherwise efficient process comes to a grinding halt at the background check stage.
Just when you thought you were on your way to being ready to sell within a couple of days, it's time to enter your information again into more systems and then hurry up and wait for the background check process to complete.
A typical background check process looks like:
This slowdown is a major speed bump, which no one likes. And it's even more problematic when a company invests in modernizing the producer onboarding experience only to have a glaring gap in the process.
On top of the time it adds to obtaining a producer's license initially or at renewal, background checks can be an expensive piece of the licensing puzzle.
Thankfully, there are ways to remove background checks as a major obstacle to a fast and efficient producer experience. Plenty of companies provide electronic background checks, but the real key is integrating this step into the larger picture.
Integrating automated background checks into your producer management workflow can be the key to providing a smooth onboarding process and removing manual speed bumps.
Because AgentSync can seamlessly incorporate background checks by Verified First into its workflow, there's no slowdown when a producer reaches that point.
Insurance organizations that have implemented both AgentSync and Verified First see an average cost savings of 68 percent compared to performing traditional background checks. Better yet, these savings can be realized quickly because it only takes minutes (not weeks or months) to connect AgentSync and Verified First.
Time and money savings aren't the only benefits, either. When you automate your producer onboarding and license management process and integrate background checks into it, compliance managers get a transparent, 360-degree view of the status of each producer's licenses across multiple states and lines of business. Instead of a black hole that requires countless follow-up emails, the person or team managing compliance can see exactly where each producer is in the process and what, if any, necessary information is missing or causing a hold-up.
The manual process of managing producer license compliance is tedious, time-consuming, and costly. Without a modern solution, it requires collecting data from numerous sources to verify each producer's status in every state. And then there's the waiting, the following up, the re-entering information: The cycle repeats over and over again.
The costs are too high, whether it's costing you time, money, wasted effort, security risks, regulatory risks, industry reputation, or any other way. Instead, you could be providing staff and producers with a modern and seamless experience, building a reputation as a great place to work (or do business with), and reducing hard dollar costs and regulatory risks simultaneously. You can do all of that with AgentSync, but even more when you pair it with Verified First for your background checks.