This post is part of a series sponsored by AgentSync.
Imagine this: you’ve taken all the steps necessary to become a licensed insurance agent. You’ve completed all of your state’s pre-licensing requirements, passed the official licensing exam, and submitted to a background check and fingerprints. You have everything you need to start selling insurance products, right?
Not exactly. In fact, there’s still one important step missing: getting a reservation with the carrier.
What is an insurance reservation?
An appointment is a way for an insurance company to tell the state which agent or agents can sell their products. An appointment establishes the relationship between the insurance company and the agent, and without an appointment, the agent cannot legally sell the insurance company’s insurance products.
While that may sound simple, it can get a bit complicated as appointment requirements vary by state. For example, most states require carriers to report producer appointments, but there are a few states that don’t, such as Alaska, Illinois, and Oregon. Registry status. Of the states do Some states require reporting, some consider an insurance agent’s appointment to be permanent (as long as the insurance agent has a valid license), some require annual renewal of the appointment, and some states require insurance agents to have at least one insurance company appointment in order to keep their insurance license active.
“Umbrella” and agency appointments
To further complicate matters, some states require carriers to disclose all of their agencies and other entities (MGAs, MGUs, and BGAfor example, carriers that work downstream and their manufacturers. In some states, the appointment of these agents means that the carrier must pay all of the agent’s producers the cost of appointing a carrier who does not actually sell the goods. In other cases, the agent Partnering with downstream producers If operating at the state level, a carrier only needs to appoint an agent and that agent’s producers are automatically allowed to operate “under” that agency. Some states also require all agents and each producer to appoint their own carrier, regardless of who is working with whom.
Side note: Keeping track of state-by-state appointment regulations can be a burden in itself, so if you’re looking for answers to questions like “Where do insurance companies update appointments in Texas?” or “Does California allow JIT appointments?”, check out our Appointment FAQ pages for each state’s insurance company.
What is Just-In-Time Booking?
To avoid insurance companies having to pay fees to appoint an agent before writing a contract, some states allow what are called just-in-time, or JIT, appointments. A JIT appointment allows an insurance company to postpone the appointment of an agent and the payment of associated fees until the agent actually begins writing for the insurance company.
JIT bookings offer significant cost-saving opportunities for insurers who take advantage of them. Learn more about the benefits of JIT bookings and how to take advantage of them here. here.
Does a producer need to contract with multiple carriers?
Contracting with an insurance company is not usually a one-and-done deal. Insurance agents usually contract with multiple insurance companies to sell a wider variety of insurance products and cover a wider range of risks. They may also need to contract with each insurance company separately for each state they operate in. When agents or representatives contract with a reputable insurance company, they are not only able to sell products, but they are also able to generate leads, benefit from the marketing efforts of that insurance company, and build more trusting relationships with their customers.
But signing with a carrier isn’t always easy. It can be difficult, especially for smaller agencies and producers who are new to the industry. Larger, more established carriers in particular might be hesitant to take the risk of partnering with a new, smaller agency. But everyone has to start somewhere, so we’ve put together some tips. Tips for getting an insurance company appointment as a new insurance agent.
How should producers choose which carriers to commission?
Insurance agents act as the link between insurance companies and policyholders, so a smooth partnership is important to the success of all involved. As a rule of thumb, agents should appoint insurance companies that:
Product-market fit
This one should be pretty self-explanatory. Insurance agents should aim to meet with insurance companies that offer products their customers are looking for. For example, if you work as an insurance agent in a flood-prone state, you should meet with at least one insurance company that offers flood insurance. If many of your customers are getting married or starting families, consider insurance companies that offer a wide range of life insurance options. Insurance agents should also consider meeting with insurance companies whose products provide opportunities to expand their business into new markets.
Strong reputation and financial stability
Insurance companies are obligated to pay their customers’ claims, but unfortunately, their ability to do so is not always guaranteed. And unforeseen risks, such as: Devastating natural disasters can rock even the sturdiest shipping vessels. Producers should aim to interview carriers that have a proven track record of meeting their financial obligations, and if the information is available, it’s never a bad idea to check a carrier’s score with a rating agency to get a better understanding of the carrier’s financial strength.
Deliver a great producer-client experience
An insurance agent’s revenue is tied to their ability to sell insurance products. When an insurance company’s onboarding process is rife with manual data entry and workflow silos, agents are stuck in onboarding limbo and unable to sell until the process is complete. To increase efficiency, insurance companies can leverage modern technology and automation for onboarding and onboarding processes. Modern InsurTech not only helps agents sell faster, it also demonstrates the insurance company’s commitment to delivering a world-class agent experience. That’s the green light!
Once the producer experience is aligned, insurers should also consider what they are offering as a client experience: do you want to sell a product from an insurer where your clients have access to a mobile app, claims processing is quick, and communication is excellent? Or do you want to sell a product from an insurer where it’s a nightmare for your clients to report claims and get paid?
What is the insurance agent appointment process?
As mentioned earlier, the appointment process varies from state to state and from insurance company to insurance company. Generally, once a producer finds an insurance company that fits their goals and target market, they must follow the specific state appointment requirements to become qualified. The insurance company must then submit an appointment request to the state Department of Insurance (DOI) and pay the associated fees.
If the DOI determines the producer is in compliance with the regulations, bada bing, bada boom, the appointment is confirmed. Of course, making sure the producer complies with all state-specific regulations is a challenge in itself, Integrated and Automated Insurance Compliance TechnologyThis may take days or even weeks to complete.
Insurance agency compliance throughout the appointment process
With nuances from state to state, insurer appointments can be a time-consuming and tedious piece of the compliance puzzle, especially when managed manually. With 50 states and multiple territories, each with their own unique and sometimes conflicting appointment rules, manually managing producer compliance throughout the appointment process can be a bit daunting, to say the least.
Fortunately, there’s a better way. Using a compliance-as-a-service platform that pulls information directly from trusted insurance industry sources simplifies the process and reduces the chance of errors. For insurers looking to reduce the burden on their compliance teams and provide a world-class experience for their distribution partners, AgentSync can help. Schedule a demo today.
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