During this turbulent year for the financial services industry, insurance businesses have not been immune to public scrutiny and fiscal pressures. The news of struggling holding companies leaked into the business side of insurance, creating skepticism and frustration for many policyholders who are worried about being able to plan and protect themselves and their families.
As the new year approaches, the National Insurance Producer Registry (NIPR) - a non-profit organization that works with agents, companies and regulators to facilitate the exchange of insurance licensing and reporting information - believes the key to restoring consumer trust in the insurance industry lies with increased transparency through technological developments and more uniformity in industry standards.
"Reputation and customer security is at stake, so it's especially important for insurance agencies to be organized and efficient in 2010," said Maryellen Waggoner, Executive Director of NIPR. "Being vigilant about regulatory and licensing responsibilities internally ultimately affects the quality of customer experiences and protection policyholders receive from their agents. It will also help agents retain and build their customer base after a tough year."
Digital Tools Will Make Transparency Easier
Policyholders might not consider whether their insurance agents are meeting regulatory requirements, but fulfilling these requirements helps ensure insurance businesses are operating and reporting lawfully - and, therefore, keeping customers protected.
Licensing and regulatory tasks tend to be time-consuming and often confusing. However, advanced digital tools are cutting down on the red tape associated with these processes and making it more efficient and cost-effective for agents to file required paperwork. Keeping costs low helps agents run lean, and reducing the time associated with administrative works frees up more time for agents to work with their customers.
"We know more people are conducting business online; this past year we've seen a 114 percent increase in traffic on our own Web site," said Waggoner. "Not only is it apparent that technologically advanced tools are making a difference in the insurance industry, but we expect agents to demand additional digital capabilities in 2010 to cut down further on costs and complications."
Digital services such as NIPR's Attachments Warehouse tool make it possible to handle a large volume of documents cost-effectively. The Warehouse is a secure database that electronically receives, stores and shares application, renewal and background information requested by regulators from producers. When additional information or documentation is needed by a state insurance department, the tool allows producers to submit this data electronically to multiple states at one time, instead of by fax or by mail.
Since its inception in September 2008, 6,300 attachments for 49 states have already been submitted through the Attachments Warehouse.
In addition, NIPR recently introduced the Reporting of Actions (ROA) function of the Warehouse to expand electronic filing abilities to allow producers to submit necessary documents for reporting administrative, criminal or civil action.
"Getting qualified individuals licensed quickly, and appointed where necessary, is the key to delivering financial advice and products in underserved markets and reaching more customers in 2010," said Linda Hall, Director, Alaska Division of Insurance, NIPR Board President. "NIPR is committed to meeting the technology licensing needs of the industry and will unveil additional enhancements to the Warehouse in the coming year that will support more requirements."
Creating More Uniformity in the Industry
While digitizing industry tools is an integral part of restoring faith in the industry, creating consistent industry standards and universal tools is equally important. Uniformity will help the industry collaborate and measure against the same standards.
"As an industry, we have to work together and adopt more universal practices in order to improve our business," said Waggoner. "Insurance producers and companies need an infrastructure that allows for efficient and timely compliance with state licensing, renewal and appointment requirements."
Centralizing databases and tools and making more uniform reporting systems will not only make it easier for agents to meet reporting requirements, but also for regulators to keep an accurate pulse on the industry and protect consumers.
As part of a continual effort to create a one-stop shop for submitting regulatory required documents online, NIPR is committed to increasing the number of jurisdictions that participate in the system as well as partnering to harmonize more processes.
In order to do this, NIPR occasionally partners with other groups to harmonize data. Recently, NIPR signed an agreement with the Association for Cooperative Operations Research and Development (ACORD) to fuse specific NIPR processes with existing ACORD Messaging Library data and message definitions in a major move toward improving the producer licensing and appointment processes.
NIPR also works closely with its Authorized Business Partners (ABP) to integrate its data with ABP's suite of products and services, giving users more options to support the licensing and compliance processes needed for resident producer licensing and renewals.
"Centralized industry standards will be key in 2010 for keeping our industry healthy and efficient, ultimately restoring faith among our customers," said Waggoner.