This publish is a part of a sequence sponsored by AgentSync.
Managing compliance all through the producer licensing course of is complicated, particularly when it’s completed by hand and much more so when it includes managing variable strains brokers. Because of the securities side of variable strains, compliance administration for people who promote these merchandise includes an further degree of oversight on prime of the already complicated state-based regulatory framework the insurance coverage business operates in.
Identical to typical producers, with regards to 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 satisfy further necessities with the Monetary Trade Regulatory Authority (FINRA), the onboarding course of includes a number of extra steps. Whether or not it’s completed manually or utilizing an automatic resolution, the onboarding course of for variable strains brokers goes a bit one thing like this:
- Step 1: Acquire basic data together with proof that the dealer maintains an E&O coverage, background verify 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 Sequence 6 or Sequence 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 apply of filling out the identical data over and again and again senseless and time consuming for brand spanking new recruits, but it surely additionally doesn’t make an excellent first impression of your provider or MGA.
3 pitfalls of handbook compliance
It’s vital to recollect, dealer compliance administration doesn’t finish after onboarding. Compliance checks ought to exist all through your complete variable strains dealer 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 handbook compliance administration on a number of separate events, however in case you’re new to our weblog, right here’s a refresher on among the main setbacks.
1. Lack of knowledge visibility
As we’ve already established, onboarding new variable strains brokers requires amassing knowledge from quite a few sources. From background checks to E&O insurance policies to verifying state insurance coverage licenses and FINRA registration, manually guaranteeing the data you obtain is correct and up-to-date will be fairly the problem.
After all, you may all the time simply ask the dealer to listing all of the states they’ve ever been licensed in, however, the fact is, typically they don’t even know what’s up-to-date with regards to their licensing.
2. Poor use of time and expertise
A scarcity of knowledge visibility within the onboarding course of means somebody in your group goes to be spending a whole lot of time buried in heaps of paperwork simply to validate current licenses or safe appointments for a brand new distribution associate. Whereas some organizations depend on compliance groups to handle this, others search the data straight 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 forwards and backwards 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, but it surely’s additionally a fairly poor use of your new recruits’ expertise. These people ought to concentrate on constructing relationships and promoting merchandise, not happening a wild goose chase simply to onboard.
3. Elevated likelihood of human error
When finding correct, up-to-date dealer data includes navigating between a number of totally different spreadsheets, paper information, on-line databases, and extra, the possibility of human error will increase considerably. Particularly when the information is being transferred from one supply to a different by hand.
It’s very important that variable strains brokers preserve correct data because of the further degree of oversight concerned in promoting variable life insurance coverage and variable annuity merchandise. However the actuality is, the extra human arms you will have touching your knowledge, the extra possible data will get neglected or entered incorrectly.
Enhance knowledge visibility with a single supply of fact
Should you’re having hassle 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 resolution that may present real-time dealer data from a single supply of fact on the click on of a button.
By way of automated dually licensed communications, you’ll be able to eradicate knowledge silos on your inner group and guarantee your brokers have entry to real-time, correct data the primary time round.
Not solely can an automatic compliance administration resolution validate your knowledge to make sure accuracy, it additionally takes the repeat knowledge entry out of onboarding by permitting brokers to submit all mandatory 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’ll be able to relaxation assured you’re not growing your threat of human error or oversights. Speak about making the entire course of rather a lot 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 resolution on your provider or MGA/MGU. To make sure you’re shielded from dangers, ongoing compliance upkeep needs to be a precedence all through your complete dealer lifecycle – from onboarding to termination.
Having full visibility into your dealer knowledge is vital as you’re employed to confirm licenses, observe persevering with training necessities, and renew provider appointments. AgentSync Handle provides a consolidated view of dealer eligibility that unifies Monetary Trade Regulatory Authority (FINRA) and Nationwide Insurance coverage Producer Registry (NIPR) knowledge right into a single profile.
Should you’re prepared to extend your knowledge visibility and reduce your compliance threat with efficient, environment friendly, and ongoing compliance help at each step of the dealer lifecycle, e-book a demo and learn the way AgentSync will help.
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