5 STEPS TO STREAMLINED INSURANCE INDUSTRY LICENSING

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Annie: Hello everyone and welcome to today's webinar, "Five Steps to Streamlined Insurance Industry Licensing." My name is Annie Triboletti, and I will be your moderator. Joining us today is Brian Bartnicki. 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. And with that, let's welcome Brian.

Brian: Thank you, Annie. So I'd like to begin by just talking about the agenda for the meeting. First, we're going to briefly talk about CSC as a whole. We're then going to get into the common compliance standards of licensing, more of the items outside of the insurance realm. Then we're going to talk about the industry specifically, what licenses are out there that you may or may be considering applying for. Talk about some common challenges in the insurance world, the consequences of non-compliance. And then, we're going to dive into some five steps that CSC can assist with in streamlining your insurance compliance, followed by a Q&A session at the end of the webinar.

So, briefly again about CSC, I don't know how many of you are aware, but we've been in business since 1899 and we're very proud of it. So 120 years. I don't know how many companies can say that. We are privately held. I work with customers across many, many markets, whether it be financial market, may be legal markets, corporate markets. We do even internet domain markets and represent a lot of the largest brands in the world. And we employ today over 2,500 people in many, many offices across the globe.

So let's start with the common compliance standards that you may be experiencing today and some of the knowledge that's out there. So whenever you form a company, the first thing that comes to play is deciding whether you need to register with the Secretary of State Office. You may decide to do that maybe in one state. You may decide to do it many states. And once you do that, you also have to . . . most of them file an annual report to remain in compliance.

So this is going to be completely different as it relates to the industry-specific requirements, which we're going to get in a second. But one of the common things that I get asked all the time is, "Brian, if I am going to have an insurance license, do I need a Secretary of State registration?" And there's a lot of ambiguity between that. Some states may indirectly force you to do it, and others are going to be really vague, right? So what does that mean? What applies to you and is it absolutely necessary?

So the insurance industry specifically, I want to really focus on a handful of insurance types, just to make sure that we understand the appropriate items that we may run into on a daily basis. We're going to have agency-related licenses, surplus lines, adjuster licenses, third-party administrator licenses, and appointments.

So I mentioned Secretary of State to begin. You might register with Delaware and qualify to do business in other states. In the insurance world, whether it be an individual or a particular agency, you're going to have your resident state. That's a fancy way of saying your domestic place that you're doing business. And domestic could be either a . . . if you work for a company, it may be the headquarters of that office, or if you're just a John Smith working out of your home, it could be your own home as that resident state.

Beyond that, we have your non-resident states. Now, these are going to be the foreign states or the places that you're selling policies potentially on different lines of authority. Whether you're selling property and casualty insurance, maybe you're selling life and health insurance, these are going to be the places that you're wanting to be licensed to broker or sell outside of your resident state.

And then we have surplus lines. Maybe you're trying to procure a policy or you want to obtain a policy, but the state says it's just too much. They can't actually insure you for that risk. So they're giving you a surplus line license to have the authority to seek a policy outside of the state, to be over-insured, so to speak.

Then we have adjuster licenses, which are really going to be maybe a claims adjudicator, maybe somebody who is going to settle a claim or make it an understanding of loss and what is covered.

And then we have your third-party administrator, which is going to be separate from the insurance company and the insurance agency. And the third-party administrator is going to usually be a company that's responsible. It sounds very simple, but maybe claims administrations or benefit enrollments. Really going to be the true administrative, financial, behind-the-scenes work that's being done.

The last item I want to cover is going to be appointments. Appointments are going to be where an individual potentially is now going to be linked up to sell on behalf of a certain carrier. So once you have your agency license, again, whether that'd be domestic resident or non-resident, and there's many insurance companies that you want to be able to sell, that's their types of insurance, maybe you want to be appointed to work with that carrier. And you might have that in one state. You might have that for one carrier, I mean, or five carriers in the state. That could become exponential depending upon how much you want the authority to sell it.

I do now want to move on and discuss the challenges that you may come across in the licensing world. So we all have many hats. But one of the things I hear all the time, when I talk to customers, are really just understanding when they're due, because insurance is unique in this aspect. Some states may require a due date. They might say, "Strict, it's going to be October 31st." Some states might say, "Well, it depends on the anniversary in which you actually registered in that state, the anniversary month." So maybe you applied in June. They might say, "Well, maybe every year in June, or maybe every other year in June, or every three years." The frequency is variable. And many states will even require an individual license, believe it or not, to be renewed on their birthday. So I don't know about you, but I can't track everybody's birthday. So that's really one of the big challenges that comes into play.

The other factor is that there's really no transparency as to the licensing status. There are platforms out there that you can look it up. NIPR is the National Insurance Producer Registry. But it's always difficult. If you don't have a login and password, you might need an NPN number to do that. Just having that transparency as to what's out there, especially when you have multiple agents or you have multiple types of filings, it's very difficult to track that. And as a result, when you don't have transparency and you don't know what's coming due, sometimes you're reacting when things are missed, or you get an alert and you know you have to file something immediately. You're not really proactively tracking it. Or maybe you have an Excel spreadsheet and you haven't been really good in keeping it up, so it's really hard for you to be proactive about it.

And there are internal administrative costs that you may be dealing with. Whether that's sending licenses overnight to the Department of Insurance, you're cutting checks. You're getting check approvals. You're obtaining . . . you're paying interest on credit card payments. Not just that, but the physical time that you're spending when you could be focusing that on other areas.

And that goes, also coincides with alternative priorities. Maybe this isn't your main job responsibility and maybe you really are supposed to be selling and not really handling the administrative side.

One of the other things, which I really think is most important with challenges is there really is confusion as to what you need to file. Some of the common things that I hear from customers, someone might say, "Brian, I'm not sure. Do we need an adjuster license, or can we have a TPA instead or vice versa? Does it allow us to . . . do we need to have one license or the other?" Some people might say, "Well, do I require an individual in my agency to be licensed before I can get the agency license? Or do I have to have both? And do I need the Secretary of State registration? What do I need to be compliant in the insurance world?"

And some people, if you're just getting into the TPA world, and I know I used this example . . . I talked about this in the poll, some of you might not know that there are financial statements that need to be attached and there's a lot of work in getting that or going to accounting and getting that information as well. So there's just a lot that you have to juggle.

I do want to move forward to our next agenda item. And I really think it's important to talk about some of the consequences that can occur if you are non-compliant. Maybe things happen and it could really affect your business as a whole.

And some of the items I want to talk about are going to be first some of the fines or penalties that can occur for failure to report administrative actions or file reports. An example of something failure to file a report would be, let's say, I have a license in Pennsylvania, and my marital status changes, and I've been selling the policy for five years, and now I owe child support. I need to report that with the Department of Insurance. If I fail to do that, then I can have an administrative action record put on my license.

So some of the things as a result of that, people will ask me, "Well, I don't want to have to report an administrative action," because once you have it, you have to report it to all new states that you file in. So some of the common questions that I get, it's really also to go back of questions of, "What do I need? What do I have to file?" Somebody will ask me frequently, "Is it better for me to file in all 50 states or X States now just to get it out of the way in the event that I have an administrative action? So, if I don't do that, maybe something happens and I grow, I don't want to have to report that administrative action." These are common things that I hear all the time.

Some States even have like a "3 Strikes, You're Out" policy, where if you lose your license due to maybe failure to report a misdemeanor or a felony, anything that can occur and you can be a cease and desist. You can't actually have a license in that particular state anymore. That's an extreme example, but that can occur.

The other thing that's really important some people, and this is simply failure to track a due date, if you don't renew the license in your resident state on time, it's a complete blanket trickle-down effect as it pertains to your non-resident states. So it's very important that we make sure none of these licenses fall out of compliance. And that also goes to the fact that your employees, from a commission perspective, aren't going to be able to have that paid out either.

The other item I think that's important is individual license status can be affected. Your agency, I'm sorry, can be affected through individual non-compliance. I mentioned misdemeanors and felonies. If somebody gets a DUI, and they're a designated responsible party on behalf of your agency, and they don't report that, that could have an indirect effect on your agency license. So it's very important, again, that you make sure everything is understood, everything is transparent, you're really keeping in touch with when things are coming due, and you're reporting the appropriate items when they need to be reported.

So now that we're done talking about the scary stuff, let's talk about how CSC can help you potentially in these endeavors. We do have the ability to assist when it comes to monitoring and filing your licenses to minimize your risk, take that administrative burden off, reduce your costs or reallocate your time that you're probably spending from a return on investment perspective. We do have a relationship with NIPR, which we're very proud of. And with that, I'll talk about how that relationship transfers into what would be your CSC account. And we can really centralize everything and implement that transparency that I spoke to. And really the capstone is it eliminates the complexity so you don't have to worry about it. You don't need to deal with all of the idiosyncrasies that come with the industry.

So, with the CSC partnership, I'm going to talk about five steps that will . . . first is really gathering the license data and the documentation. So, with that NIPR relationship that we have, you are able to provide CSC with your NPN numbers or your National Producer Numbers. So whether you have TPA licenses, adjuster licenses, appointments, resident and non-resident licenses, surplus lines, whatever those licenses are, all you have to do is simply provide the NPN numbers to CSC, whether they'd be for an individual or agency, sign a consent form. And what we're able to do is gather all that documentation, all of those data vitals, expiration dates, lines of authority, no matter whatever you have on file, and map the file numbers and map it into a centralized portal on a CSC's account.

And I'll dive into this further, but the platform that I'll show you later on in the presentation and you can even have unlimited and users to access that as well. Once we have that in there, what we're also going to do is give you that transparency and that FYI as to what's coming due, whether you have licenses coming due in 60 days, or 50 days, or you have a glimpse as to what's being handled, instead of you having to worry about missing them or having an uncertainty as to what's coming up.

We can help you prepare and file the renewals with our relationship with NIPR. Or if the state doesn't allow for NIPR filing, we absolutely will be able to prepare and file the applications, send it to the Department of Insurance. Now we would reach out to you if there are any financials or bonds or fingerprint cards in Florida, for example, we'd reach out to you and ask for that.

And then we would actually confirm that it was filed. We'd obtain the evidence for you. We would then do all the administrative updating within your portal. So you would always have, again, that transparency and that centralized way of viewing the data, and we would send it to you thereafter.

But we also provide flexible billing options. And it's important to know that CSC is only going to bill you for work that we physically complete. And what I mean by that is if you have 200 licenses, many of them are only going to be due every other year, maybe 60%, 50% of them. So why should you have to pay for something just to store it? Here at CSC, we're going to give you a dedicated contact, and we're only going to bill you after the work has been processed, whether that be a monthly consolidated bill or as they're completed, depending upon the options. Again, the flexible options that would be best for your organization.

So now that I've talked about really, from a high level, the ways that we can partner with you, I would like to show you the portfolio manager, how we would visually give you this. So I'm going to talk to some of the key factors that provide some value with the portfolio.

One, just keep in mind, it is web-based, so you have 24/7 access to it. It's not software that you're downloading. There are no costs for users as I alluded to. And you can give users different levels of access. So you can have a user that has complete admin control, where they can make changes, they can view, they give you documents, and they can add users. Then we have a read-only level, where you just could, as it sounds, just view the information. And then we have an access, which is really valuable for those of you that have . . . you want multiple individuals to have access to the portfolio, called a limited access. Where, James, who's in the room with me may only . . . I only want James to see his own licenses. I don't want James to see my licenses. I don't want him to see Annie's licenses. I don't want him to see Kim's licenses. I want James to only see James' license. So just know there is flexibility as to who can see what.

With this, you're going to have that proactive reminder. Penalties and missed filings will not occur. And there's predetermined alerts I mentioned that will be sent to you as to what's coming due in the next 60 days.

Not only is it web access, it's easy implementation. I mentioned the NIPR relationship. Again, it's scalable. If you're small or large, there's no IT involvement. There's unlimited support, and it's turnkey, and training is also included.