State “Bespoke” Insurance Processes: Florida, New York, Washington

We sometimes speak about the challenges in legacy insurance carriers and agencies building their own bespoke technology, but states with unique-to-them rules or processes can also be a challenge for the industry at large.

For carriers and agencies, their multivariate bespoke practices can make it more difficult for the downstream agencies, adjusters, and producers who work with them to keep up. And for states, it’s no different. While the advantage of 50-state regulation is the veritable Petri-dish insurance regulation that allows for innovative market approaches, the disadvantage is the practical obstacles for insurance businesses that work across state lines.

Here we have rounded up a few bespoke state processes that industry insiders say have caused misunderstandings for businesses working in multiple jurisdictions.

Florida fingerprinting requirements for agency (business entity) licensing

For agencies – also known as insurance business entities – getting started in Florida, it’s no surprise that you’ll need to incorporate your business with the secretary of state. Neither is it an issue to name a designated responsible licensed producer (DRLP) – a procedure that’s commonplace among the states.

What is unique about Florida is that all business entity owners must submit fingerprints to the state. And, to be clear, that includes owners of other business entities that have an ownership interest in the business getting its Florida license.

This is a somewhat unusual requirement, and one that is further complicated by a few other factors:

• Florida has a state-approved vendor that applicants must use for fingerprinting.
• This vendor requires all in-Florida applicants and many out-of-state applicants to complete fingerprinting onsite at the vendor’s locations.
• Out-of-state applicants can check their ZIP code against a database of approved locations and, barring a close enough location, can choose a mail-based process to be printed locally and mailed back to the vendor.
• Florida considers licensed producers’ fingerprints to be “good” for four years from their first fingerprint submission, making it less of a challenge to undertake this process if you are a licensed agency owner.
• Non-licensed agency owners’ prints are only “good” for a year.

The net effect is, if you’re trying to obtain an agency or business entity license in Florida, wrangling multiple business owners in various states to coordinate fingerprinting can be labor intensive. Wrangling multiple people to get fingerprinted by mail or by scheduling a visit to a fingerprint vendor’s in-person office can be intensely pressurized when you’re also working up against filing deadlines to be recognized as an official business entity and process business in the state.

New York unique producer expirations and appointment requirements

New York has many unique processes, and often very specific requirements that differ from the way other states approach insurance regulation. This blog will explore two that commonly cause concern: producer license expirations, and appointment requirements.

New York producer license expiration deadlines

Producer license renewal/expiration dates in most states are based on the producer’s birth month every two years based on whatever year the producer first obtained the license. In New York, however, the rule for license expirations and renewals is that the license will expire on the producer’s birth date in an odd or even year based on the producer’s birth year.

This rule can cause confusion for administrators in charge of license renewals for producers who work in multiple states. Fortunately, systems using AgentSync base the renewal deadline off of the renewal periods in the National Insurance Producer Registry’s producer database (PDB). By using the PDB renewal deadline, AgentSync’s automatic alerts can set the cadence of renewal workflows instead of your admins having to manually track and remember individual state license rules.

New York appointment requirements and specific license types 

New York has some very particular requirements about the lines of business it allows and how it categorizes and regulates each, and these requirements are quite disparate from other states.

One “for instance,”: While many states have done away with separate broker licenses, preferring instead to wrap them all under the same licensing for producers, New York maintains a license specific to life/health brokers, and one specific to property and casualty brokers. And, while New York doesn’t allow brokers to have any carrier appointments, agents actually have to have a carrier appointment before the state of New York will “activate” their license. 

Because many carriers operationalize Just-in-Time appointments, which allow them to delay appointing agents until that agent is actively selling business, this rule can bring teams up short. Although New York is a state that allows JITs, newly licensed agents in the state will have to get at least one carrier appointment before getting started on sales.

Washington producer license reinstatements

You have a producer who once got licensed in Washington. Maybe it was years and years ago. They moved to a different insurance agency, and let that license lapse. Now, they’re plugged in with you, they’re ready to reinstate their license, they’re rip-roaring-and-ready-to-go!

Except that any kind of reinstatement has to go through the Washington-specific online portal. And, lest you think, “Well, it’s been more than a year, so there’s no hope of actual reinstatement, and it’ll actually be a completely new license,” all non-new licensees will need to go through the Washington portal.

Where this can cause particular pain for agencies tasked with helping their producers get up-to-date is that portal logins are often connected to professional email addresses, not personal ones. So, a producer who hasn’t operated in Washington for quite some time will need to reset their login. Unfortunately, the initial reset often gets sent directly to their previous email, typically at an agency they no longer represent. And it becomes a time-intensive process to recover their account – definitely an individual set of tasks, and not something an agency can handle as a bulk action.

The best options to avoid this:

• Producers could always remember to keep their Washington licenses in force forever
• Producers could use personal and not professional email addresses in state license logins
• Producers could make friends with an IT administrator in the Washington state government

The general point is, this issue demands time and attention from producers, and likely isn’t something an agency can handle on their behalf, even if the agency handles other aspects of state licensing.

State-specific processes pose barriers to insurance business

None of these processes is inherently bad. Many of them make sense in the context of their state. However, for carriers, MGAs/MGUs, and agencies that do business across states, differences in how those states handle their licensing, appointment, or other insurance processes can be like navigating unfamiliar terrain with no map.

AgentSync strives to provide our partners with a road map to navigate these unique state requirements, but we also fast-track the pieces of license and appointment compliance where we can. To learn more and become a raving fan, book a demo.