This post is part of a series sponsored by AgentSync.
Insurance compliance is a serious issue. Non-compliance can have serious implications for everyone from insurance agents, insurers, MGAs and MGUs to individual insurance agents, adjusters and dually licensed broker-dealers.
Who you choose to partner with for your compliance needs matters. Choosing the right technology partner can turn your insurance license compliance efforts from a nightmare to a dream come true.
On the other hand, choosing the wrong partner can lead to undesirable consequences, such as:
- Spending too much money on things that don’t meet your needs
- Risk of Compliance and Data Security Incidents
- Lack of organization-wide adoption means manual and error-prone processes continue to be used
- Losing staff or distribution channel partners due to the stress of working for or with you
Despite industry pressure on insurers to adopt more modern practices, many insurance compliance technology vendors have no qualms about doing business the same way they’ve always done business. In many cases, this includes committing serious “crimes” against their own customers. While not crimes that will land you in jail, these violations are frustrating, expensive, and just plain wrong.
In this three-part series, we’ll look at some of the most common “crimes” insurance compliance technology vendors commit against their customer base. First, there are financial crimes – crimes that cost you more than they should, or even worse, leave you wondering how much you’re going to pay.
When Insurance Compliance Vendors Commit Financial Crimes
If you’re considering investing in a modern, automated producer compliance management solution, cost savings are probably one of your motivations. Unfortunately, too often clients find themselves spending more than they anticipated or wondering how much it costs them month-to-month and year-to-year to keep their producer, adjuster and broker-dealer licenses and appointments in good standing.
Common financial crimes include:
1. Fees on top of fees
There are unavoidable fees for licensing and appointing producers and adjusters, but it would be a pain if technology providers charged transaction fees simply for the privilege of making payments. Another The fee, that’s not right.
When evaluating compliance technology partners, be sure to ask how much they charge per transaction. On top Fees charged by states, entities like NIPR, etc. If the answer is not “zero,” you’re likely paying more each month than you budgeted for to obtain and maintain your producer, adjuster, and broker-dealer licenses.
Customer confession: “Another company we are negotiating with is charging $2.50 per booking, $2.50 per cancellation, and $1.75 per PDB search — and that’s on top of the regular NIPR fees for making these transactions.”
2. Opaque pricing
It’s one thing to agree to pay a fee, but quite another to not know what you’re paying for. Many compliance vendors send their customers invoices without knowing what they’re paying for. Is it a subscription fee? A state fee? A NIPR fee? An additional transaction fee? Who knows?
Clear and transparent pricing is a must before you sign a contract with a compliance technology partner. Once that relationship is built, it doesn’t take a PhD in finance to decipher your monthly bill.
Customer confession: “I received a bill for $2 million, and I don’t know how much of that is unavoidable fees like NIPR electronic processing fees and state-specific filing fees, and how much is going to the vendor.”
3. Pay for the latest data
When you sign up for a compliance management solution, you probably don’t want to have to pay extra every time. Manage complianceYet some technology providers are demanding exactly that. It should be a criminal offense to pay a PDB fee to provide accurate data from the industry’s source of truth to a system you’re already paying for.
Instead, look for a compliance technology partner that bases pricing on one simple fee, such as a cost based on the number of producers (unique NPNs) you want to monitor. Accurate and up-to-date information about those producers should also be included in that cost, and you shouldn’t be re-charged every time you check to see if a producer’s license is still valid in your state, for example.
4. Various bait-and-switch tactics
There are plenty of examples of customers thinking they’re getting one thing and then finding out the truth later, like when they sign up for something and then find out they’re not getting what they saw in the demo (at no extra cost) or when they’re forced to pay to upgrade software they bought years ago and thought they’d use forever.
Honesty is important, even if it’s not the answer you want to hear. We believe a compliance partner should be upfront about what their solution can and can’t do, what it will cost, and all other terms so customers can make an informed decision about what’s best for them.
Customer confession: “I’ll be honest, I’m hesitant to work with another vendor again because of the lack of transparency I’ve dealt with so far.”
5. Holding data hostage
Insurance compliance providers aren’t technically going to launch a “ransomware attack” on your organization’s data, but it might feel a bit like it. Many vendors charge extra to run reports so they can analyze the data you enter and maintain. If you enter data but then have to pay to analyze or report on it, Is it really “your” data?
In some cases, it may cost extra to build a custom report so you can see exactly what you need in a specific way. We’re not against people making money by running add-on services. But that’s not the same as paying a fee every time you use that report in the future or access the current version of that data (not last month). Don’t let a vendor hold your data hostage or charge you extra to use it to make decisions based on the data. Demand free access to see the data and do what you need to do with it.
Avoid becoming a victim of financial crime with compliance technology
If you’re currently using insurance compliance technology and aren’t getting the treatment you deserve in these and other areas, see the AgentSync difference. AgentSync is committed to a philosophy of customer love, which means fair and transparent pricing, support that actually works, and a technology platform that keeps users happy and is regularly updated and improved.
See how insurance compliance can change your organization. Talk to an AgentSync representative today.
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