Stay Compliant in the Insurance Industry: Licenses Made Easy
Please be advised that these free recorded webinar presentations have been edited from the original format (which might include a poll, product demonstration, and question-and-answer session). To set up a live demo, please complete the form to the right.
Managing your insurance license compliance presents a set of challenges in addition to your daily job responsibilities. They can range from managing filing deadlines to centralizing insurance licensing data, and if any step is missed, your company is susceptible to fines and delays to business.
The good news is CSC® can help. Our services can simplify your compliance efforts by streamlining the entire insurance license process from start to finish, and everything in between!
Join us for this informative and complimentary presentation on how organizations within the insurance industry rely on CSC for their compliance needs.
Annie: Hello everyone, and welcome to today's webinar, "Stay Compliant in the Insurance Industry: Licenses Made Easy." My name is Annie Bruxelles, and I will be your moderator. Joining us today are Brian Bartnicki and Mike Rosenberg. Brian is the Business License Sales Engineer at the forefront assisting customers with their industry-specific requirements, which range from research, portfolio management, and renewal services. Brian has worked with CSC for more than a decade offering his expertise in the field of license compliance.
Mike is a Business License Project Manager at CSC. He provides expertise in the field of business license compliance, assisting customers with their industry-specific requirements. Since joining CSC in 2014, Mike has focused on business license renewal services and portfolio management, and brings the unique viewpoint on license solutions for CSC customers. And with that, let's welcome Brian and Mike.
Brian: Thanks Annie. We thank everyone for spending some of your day with us. We want to begin by talking about the agenda of what we're going to cover today regarding this webinar. First, we're going to talk briefly about CSC, and then we're going to dive into some common compliance standards. We'll then talk about the insurance industry and the licenses that are specific to it. Then we're going to talk and dive into some challenges, followed by consequences of noncompliance. And then very briefly, at the end, dive into how CSC can help along with the Q&A. And so why don't I first just briefly talk about CSC before I turn it over to Mike to talk about the first item regarding common compliance matters.
Just in general, CSC, we've been in business since 1899. We service over 180,000 corporate customers. We manage and assist some of the largest brands in the world. And we have, in some capacity, we do service 90% of the Fortune 500. And our employees are very proud to say that we have over 2500 employees worldwide as well. And so, with that, I'm going to kick it over to Mike to dive into the first topic of some common compliance standards.
Mike: Thanks very much, Brian, and thank you, everyone, for taking the time to speak with us today. To go into some common compliance standards that we see. You guys are probably familiar with a number of these, but from a very high level, regardless of business activity, if you're doing business in the United States, more often than not, you are required to interact with that individual state's secretary of state office. Usually, you are required to have some sort of registration allowing you to do business in that state, and that's regardless of industry. To that point, you also are usually required to file annual reports, things where you list any officer changes, any large changes in the company, things of that nature. Some states require this to be on a biannual basis, but the vast majority do it year to year.
From that point, there are specific-industry-level requirements depending on what you're doing. So, if you're an engineer, you have certain requirements that are going along with that, or in this case, what we're going to be talking about is the industry-specific requirements for the insurance space.
Brian: So some of the insurance licenses that we are going to dive into, there's going to be six of them that we want to cover that we see frequently on a day-to-day basis here that our customers have. And the first one that we're going to talk about is going to be the agency or individual resident licenses. Then we're going to dive into non-resident licenses, followed by surplus lines, adjustor licenses, third-party administrator licenses, and then appointments. So I'm going to start and talk about the agency/individual resident license first.
So conceptually, this is going to be similar. Mike mentioned the secretary of state. Let's say you formed a company, you incorporated it, maybe it was a corporation or an LLC, and it's doing business. It's your home state. With insurance side, maybe you have an insurance agency or you have an individual and maybe you're producing insurance, you have a producer license and your home state in which you're doing that is going to be your resident license. So again, it's the same concept. It's just the home state in which you are actually working on selling these policies.
Mike: And to follow up from that, there's obviously the non-resident license. So for example, if we have a John Smith who's doing business in the home state of Delaware, that what he's based out of, it's where his headquarters is, if you will. But he also wants to do business in Pennsylvania, New Jersey, Maryland, just for an example, those licenses that he would have would be referred to as the non-resident licenses. And the two of them, as we'll go into later, can often have a very close connection with one another.
Brian: Right, so the next item that people may have or be familiar with is going to be a surplus line. Now, these are generally licenses where, you know, you might have insurer that won't accept the risk on a particular line of authority. It doesn't meet the established guidelines of the state. And so, based on that situation, there may be a special, like, licensed producer or a surplus-line producer, so to speak, and they really allow a certain to procure a policy that allows, you know, that type of ability to have that in a particular state.
Mike: And following up from that, the next common one that we see is an adjuster license. So an adjuster is basically someone who settles the insurance claims. Oftentimes, they're referred to as a claims adjuster. So we often, as individuals probably see them as, you know, if a tree falls on our house or on our car, that's the person who comes out and actually determines what the insurance is going to cost and what they're going to cover.
Brian: And then the fifth item is going to be your TPA licenses, or for those of you that have third-party administrator licenses. This is going to be more of a license that's based off of a firm or maybe an individual even that has various types of administrative responsibilities. Usually, it does involve claims. An example would be if an employer, you know, self-insure their employees. You know, this license will be needed for those claims.
Mike: And finally, the other main license that we see usually across the board is related to appointments. Appointments are what links an individual agent or an agency with a specific insurance company and that allows them to sell a company's policies. So for example, if we're going back to John Smith, having the proper appointments would allow John to sell State Farm's different insurance plans.
Brian: We are going to talk about some common challenges. I'm going to talk about the first one here, which is going to be really manually tracking due dates. So generally, when I talk to customers, I find that many times they are tracking their due dates because they could be based off of the birthday of somebody or could be based off of their anniversary month when they obtained their license. There may be a set date based on the year in a particular state. But sometimes, I hear that people are tracking on Excel, sometimes they're tracking it on Word, sometimes they are tracking in Outlook. And many times, with all other things, other calendars which we'll talk about, keeping up to date with those changes is difficult.
Mike: Yes. And following up from that point, we find that a lot of customers that we speak to have issues with having full transparency into where their licenses really stand. So if, you know, John Smith, again, is having licenses in 40 different states, does he know for a fact from a high level where all of those licenses stand? Are they all in good standing. Or for the ones that are in progress, for example, say he's applying for a new license, where does that stand? What steps does he need to take to make sure that he stays in compliance with that? And having that certainty and real-time transparency about where your licenses stand, we found that having that can be a real challenge for a lot of people in the industry.
Brian: So the next plan will be more of a reactionary model . Sometimes in the insurance world, a good example of this would be, you're filing a license, but it gets rejected because the individual did not complete continual education. And you're scrambling around to make sure that person completes it so you can get your license approved. And a lot of times, we all have busy things going on, priorities are right now, and we find that generally, it's more of, "Oh my gosh, didn't know about that, but I need to resolve it," or maybe there's just a plain miss. You missed a file and you failed to renew it, and now you're unable to actually sell a policy or something to that effect.
Mike: And that goes into really another challenge with being internal administrative costs. So, spending the manhours to make sure that you're handling the licenses that are coming to you before they're due, cutting the checks, renewing online or renewing via paper contact in the jurisdiction. These are all things that add up to manhours and overall cost which can interfere with another challenge of alternative priority. So as a business, the object is obviously not to spend the majority of your time working on internal administrative things just to keep the lights on. Rather, it's focusing those priorities on growing the business and expanding in that direction. So to that point, if you're spending all your time at being reactive and not proactive to all of these different licensing challenges, you find yourself unable to really push your business forward.
Brian: And a good example of the final item is confusion as to what's needed. Someone might say, you know, CSC or Brian, "Look, I have John Smith and I need to get John Smith a surplus line in these 20 states, but I don't know what's needed to make that happen." Or, you know, "Hey, we've just amended our officer or we've moved our address and now we need to reflect that appropriately in all these other states. How do we go about doing that? Are there paper forms? Can I do it online? What is it that we need based on this scenario?" And a lot of the challenges pertain to the logistics based on these changes that occur within many companies.
So what are things that can happen in the event that you fall out of good standing or you don't have a license or you fail to renew a license? There are a couple things. The four bullet points that we want to shed light on. Mike's going to talk about the first here.
Mike: Sure. So the most common consequence that we're all familiar with whenever we're dealing with the government agencies usually if you're not in compliance, there's some sort of fine. That is the most common thing that we will normally see. And normally, this is often fines for failure to report a timely administrative action. Now, an administrative action is a disciplinary action that usually needs to be reported within 30 days of it occurring within the insurance industry. And often, if it's not reported in that timely manner, it can result in an additional administrative action. Essentially, you get in trouble for not reporting the fact that you were in trouble. So that really, that can kind of compound upon itself if it's not kept up to date. That in additional to filing annual reports, which were similar to what I spoke about at the beginning, just at the insurance level.
Brian: So one example that might be extreme but it does fall suit in California is you could not only lose your license, that being it's not in good standing if you don't, you know, file it. But California, you could even provide potentially cease and desist, not allowing you to even obtain the license in the future because of continual neglect, a failure to renew it in quite a lot of times or failure to report administrative actions, as Mike alluded to. If you're completely negligent to the point that California deems it egregious, they could actually cease and desist so you don't even have the ability to be licensed in their state anymore.
Mike: And following from that, let's say, for example, that this person was based out of California as their resident state, the status of the resident license has a direct correlation, more often than not, with the non-resident license. So, for example, if this person falls out of compliance in their home state, that can affect whether or not they're in compliance with the rest of their state. So kind of alluding back to what I'd mentioned before, it really has a compounding, almost snowballing potential with if you're not keeping up with being in compliance, it can very quickly spiral out of something that's really kind of out of your control.
Brian: And then something that seems . . . I was very surprised that, you know, many years ago the first time I heard of this, but actually, individuals can affect the licensing status of the agency. So if, you know, Mike, who's next to me right here, if Mike continued to have these issues of noncompliance for multiple reasons, it could actually have a negative effect as to the status of the agency in which he is working with. It's something that sort of the reputation effect, so to speak.
So we've talked about consequences now and, you know, the next thing would be what here at CSC can we do to potentially assist our customers in these items. So we'll dive into some of those things now.
Mike: Right. So where CSC really comes in to help deal with these challenges across the insurance industry is with handling of the licenses through outsourcing. So the main point that we initially want to go through as a benefit is that we look to minimize your risk, minimizing the risk of falling out of compliance, having an effect to your non-resident state, having an effect to your agency, avoiding that snowball effect.
To that point, we're also looking to decrease the administrative burden that handling all of those licenses places on you as a business. We're looking to eliminate the complexity surrounding that, so that you have really a transparent, high-level looked. Kind of what I alluded to earlier, so that you have a centralized point where you can see from a very high level where your licenses stand, what actions you may need to be taking, and how CSC can help you get there. All of that, overall, leads to reduced costs. Instead of being reactive, you're now being proactive.
And what allows us to help work with that is our direct relationship with the National Insurance Producer Registry, otherwise known as NIPR. I'm sure you folks are familiar with hearing this acronym all the time. We have a direct relationship with them which allows us to really stay on top of a customer's licenses and help them stay in compliance. And to that point and detailing that partnership, Brian is going to walk us through that piece.
Brian: All right, so, you know, we will take the information from NIPR with our relationship. And there's a simply a consent form that the customer would sign listing the NPN or the national producer numbers that NIPR has assigned to those individuals or agencies. And we're going to be able to take all that data and we're going to stop part one or step one of our partnership is where we're going to map all the data points -- maybe your expirations or your surplus lines, the file numbers of your TPAs, the lines of authority that you have under a producer license. All those data points associated with it, the entities' information. Again the file number, state, all those data vitals. We're going to map it all into your CSC account, and then we're going to give you total access into it. So you'll have the ability to view in a transparent centralized world all of your licenses in one place. That's going to be step one.
Step two is where we're going to give you a dedicated centralized point of contact. And that contact is going to be responsible for managing what you have coming due in the next 60 days. And you're going to receive a report letting you know what's coming due. You're not going to have to do anything. It's just going to be your gateway into what your contact is going to be preparing. And we're going to file the renewal. You'll do it online. We'll do it online on an NIPR. We'll use our credit card, pay for it. If we have to send it overnight to the Department of Insurance, we will also facilitate the original license preparation.
If we have to submit additional items with it, maybe we need a copy of a driver's license of one of your producers or officer or something to that effect. We will ask you for it if you don't already have it on file. But once we have it, you know, we're not going to continue to ask you for the same information again and again. And again, we're going to pay for it so you don't have to worry about that administrative burden and check approvals. And then, we're just going to follow up. We're going to follow up on your behalf. You don't need to worry about calling departments asking for the evidence. We're going to handle that back and forth in that approval. If there's any rejection for any reason, maybe continual ed., I'll use that again as the example, we'll let you know that continual ed. has not been fulfilled. But then, we will continue to follow through with that process to get it filed.
And then ultimately, the very end, is we will invoice you for the license after it's completed. So you may have many licenses in the insurance industry that could be biannual. They're not going to be annual, they'll be every other year. Just have comfort in the fact that we're all going to bill you for that every other year when we file it. So there's value. We're only billing you for work that we physically do.
Mike: So to that point as well, what we're going to do now is we're going to show you from a high level and then Brian will walk us through what it actually looks like, how we manage that through our business license Portfolio Manager.
So essentially, from a very high level what this is, is a web-based portal, so it is accessible 24/7. And as Brian was referring to it centralizing the control and all the compliance requirements that you guys have. What this does is that it prevents penalties and fees from this fines. It allows us to do that work 60 days in advance, so that everyone is aware and being proactive rather than reactive by monitoring the expiration dates, setting predetermined alerts, and things of that nature.
And what some of the other benefits are, when it comes to this, are the ease of implementation. So due to our direct relationship with NIPR, we have the ability through once we have that consent sheet directly pull all of your active license data from the system and import it into our own. So we have an accurate snapshot of all of your licenses both in good standing and out-of-good standing at that time and we just bring it over into our system. This portfolio is adaptable for small to very large numbers of licenses. So as a customer, what we'll often see is if you're growing as a company and you and acquire an additional agency need to add additional licenses. The portfolio will scale with your growth.
As I said before, it's all online. So there's no hardware, software or any IT involved that required from your side of things. To that point, you're also allowed to have an unlimited number of users, and you can permission them as you would like. So if John Smith is from a new agency you acquire and you want to have allowed him to only see the license data related to his particular agency, you can add that permission. The whole idea of it is that this portfolio is turnkey. We'll set it up, we'll customize it for you based upon your preferences, and we'll upload your data and documents into it.
To that point, we'll also, of course, show you how to use the software will include training. Support is also included. We'll show you how to work through it so that as you know, partner with your account manager, you both are working together to help once again to relieve that administrative burden and allow you guys to have that transparency into your licensing data.
Annie: Thank you both, and thank you to everyone who joined us. That was a great session. That's all time we have for today. If we didn't get to your question, we will contact you with a response after the webinar. Thank you once again to Brian and Mike for a fantastic presentation, and everyone for joining us. We hope to see you next time.