This put up is a part of a collection sponsored by AgentSync.
Managing compliance all through the producer licensing course of is advanced, particularly when it’s carried out by hand and much more so when it entails managing variable strains brokers. As a result of securities facet of variable strains, compliance administration for people who promote these merchandise entails an additional level of oversight on prime of the already advanced state-based regulatory framework the insurance coverage trade operates in.
Identical to typical producers, on the subject of onboarding newly recruited variable strains brokers, compliance is a excessive precedence for any group making an attempt to keep away from regulatory errors and their related penalties. However, as a result of these brokers have to fulfill extra necessities with the Financial Industry Regulatory Authority (FINRA), the onboarding course of entails a number of extra steps. Whether or not it’s carried out manually or utilizing an automatic answer, the onboarding course of for variable strains brokers goes a little bit one thing like this:
- Step 1: Acquire common data together with proof that the dealer maintains an E&O coverage, background examine data, and a W-9.
- Step 2: Get working contracts and approvals between brokers and the entities they work with signed and saved.
- Step 3: Confirm state insurance coverage licenses in every line of enterprise and state the dealer will promote enterprise.
- Step 4: Confirm the dealer’s Central Registration Depository quantity and guarantee they’ve a FINRA registration, have handed a Collection 6 or Collection 7 examination, and have established a relationship with a broker-dealer agency.
- Step 5: Make appointments in a way compliant with every state’s particular laws.
- Step 6: Confirm annuity coaching for states that require it.
To acquire the licensing knowledge and securities data wanted for onboarding, variable strains brokers are sometimes subjected to near-tortuous ranges of repeat knowledge entry. Not solely is the observe of filling out the identical data over and again and again senseless and time consuming for brand new recruits, nevertheless it additionally doesn’t make an excellent first impression of your provider or MGA.
3 pitfalls of handbook compliance
It’s necessary to recollect, dealer compliance administration doesn’t finish after onboarding. Compliance checks ought to exist all through the entire variable lines broker lifecycle from hiring to termination and each step alongside the best way. Due to its ongoing nature, managing compliance by hand will be significantly irritating. We’ve mentioned the downfalls of manual compliance management on a few separate occasions, however in case you’re new to our weblog, right here’s a refresher on a few of the main setbacks.
1. Lack of knowledge visibility
As we’ve already established, onboarding new variable strains brokers requires accumulating knowledge from quite a few sources. From background checks to E&O insurance policies to verifying state insurance coverage licenses and FINRA registration, manually making certain the data you obtain is correct and up-to-date will be fairly the problem.
In fact, you could possibly all the time simply ask the dealer to listing all of the states they’ve ever been licensed in, however, the truth is, generally they don’t even know what’s up-to-date on the subject of their licensing.
2. Poor use of time and expertise
An absence of knowledge visibility within the onboarding course of means somebody in your staff goes to be spending lots of time buried in heaps of paperwork simply to validate present licenses or safe appointments for a brand new distribution companion. Whereas some organizations depend on compliance groups to handle this, others search the data immediately from the horse’s mouth – their new recruits.
It’s secure to say that variable annuities brokers have sufficient on their plate with out the backwards and forwards of making an attempt to trace down essentially the most correct and up-to-date data. Not solely is that this irritating and time consuming, nevertheless it’s additionally a reasonably poor use of your new recruits’ expertise. These people ought to give attention to constructing relationships and promoting merchandise, not occurring a wild goose chase simply to onboard.
3. Elevated likelihood of human error
When finding correct, up-to-date dealer data entails navigating between a number of totally different spreadsheets, paper information, on-line databases, and extra, the prospect of human error will increase considerably. Particularly when the info is being transferred from one supply to a different by hand.
It’s important that variable strains brokers keep correct data because of the extra stage of oversight concerned in promoting variable life insurance coverage and variable annuity merchandise. However the actuality is, the extra human fingers you could have touching your knowledge, the extra doubtless data will get neglected or entered incorrectly.
Enhance knowledge visibility with a single supply of fact
For those who’re having bother monitoring down correct, up-to-date data all through the onboarding course of, don’t depend on your new recruits to do the heavy lifting. As an alternative, take into account a contemporary answer that may present real-time dealer data from a single supply of fact on the click on of a button.
By means of automated dually licensed communications, you possibly can eradicate knowledge silos to your inner staff and guarantee your brokers have entry to real-time, correct data the primary time round.
Not solely can an automatic compliance administration answer validate your knowledge to make sure accuracy, it additionally takes the repeat knowledge entry out of onboarding by permitting brokers to submit all needed documentation in a single central and simply accessible self-service portal. Your variable strains brokers can be a lot happier once they can spend much less time on knowledge assortment and extra time doing what they do finest.
Plus, with much less figurative and literal touches all through onboarding, you possibly can relaxation assured you’re not increasing your risk of human error or oversights. Speak about making the entire course of lots smoother and extra environment friendly for everybody concerned!
Prioritize actionable knowledge all through your complete dealer lifecycle
Rising knowledge visibility within the variable strains dealer onboarding course of is simply one of many advantages of investing in an automatic compliance administration answer to your provider or MGA/MGU. To make sure you’re shielded from dangers, ongoing compliance upkeep ought to be a precedence all through your complete dealer lifecycle – from onboarding to termination.
Having full visibility into your dealer knowledge is necessary as you’re employed to confirm licenses, observe persevering with schooling necessities, and renew provider appointments. AgentSync Handle presents a consolidated view of dealer eligibility that unifies Monetary Business Regulatory Authority (FINRA) and Nationwide Insurance coverage Producer Registry (NIPR) knowledge right into a single profile.
For those who’re prepared to extend your knowledge visibility and reduce your compliance danger with efficient, environment friendly, and ongoing compliance assist at each step of the dealer lifecycle, book a demo and find out how AgentSync can help.
Enthusiastic about Companies?
Get computerized alerts for this matter.