Taking Advantage of Just-In-Time Carrier Appointments
May 18, 2021
At AgentSync, we’re excited to be a part of the democratization of data, or what you might see as using the wider available data of the insurance industry to transform and improve everyday processes for insurance businesses across the board.
While we have a variety of ways that we use data to innovate, one trend we’ve seen that brings tech advances right alongside changes in state regulation is using NIPR integrations to take advantage of Just-In-Time (JIT) appointments. If that sounds like a bunch of gibberish to you, let me break it down.
In 2000, NAIC opened model legislation to the states for Just-In-Time appointments. Previously, if an agent wanted to sell, quote, or explain information about a policy in a given state, they had to be licensed in that state and appointed with the carrier. An insurance broker would raise their hand to ask to be appointed, the carriers would have to file appointments and pay the associated fees in each state individually. And all too often, some percentage of the appointed agents would never write a single contract’s worth of business.
States that allow for JIT appointments instead allow carriers to wait to appoint agents until an agent is actively writing business. Carriers can onboard agents, background check them, and then wait to pay state appointment fees until they have a financial incentive to do so. Timelines vary by state, but most states at this point have JIT appointment guidelines.
From what our team has seen from our partners in the industry, this has the potential to be very valuable, but a lot of carriers and agencies are still handling things the same way they always have. They onboard a bunch of insurance agents across many states, and submit appointments to all of the states, thinking “well we’re spending the time to verify licensure, so we might as well submit appointments, too.” Unfortunately, this means they are taking risks and paying to appoint maybe thousands of agents who might not ever write business in all of the appointed states.
If you think about it, using the industry-standard that 80 percent of your business is written by 20 percent of your agents, you could be wasting thousands or even millions of dollars in appointment fees in states for agents who will never write a single piece of business in that state.
Using APIs to make JIT regulation work
An application programming interface (API) is techspeak for a doorway between different software systems. AgentSync Manage is powered by our first-in-the-industry real time synchronization with NIPR, bringing complex data structures into a user-friendly and accessible interface.
We put in the effort to standardize and make a doorway into these data sets, now others are also able to do that and get the information they need without having to go and hire a team of engineers to build and maintain it. Our hard work is yielding fruit beyond just our team to increase usability for others in the industry.
Using the integration with NIPR, we can help people who have limited technical knowledge use identifiers like Social Security numbers or national producer numbers for insurance agents to plug into our API to get up-to-date information. They don’t have to do guesswork to interpret the state specific regulations or know how to code – our open API has made it easy to do things like auto-populating producer data on insurance applications, verifying licenses in real-time, submitting appointments, etc. This is actually a fairly low bar of automation that hasn’t existed due to the usability and access to the data.
This makes it much easier to onboard brokers and then hold off on appointing them until they actively write business. With manual processes, it’s much more likely that the timeline for a JIT appointment could be missed, or that an agent’s state license may have expired. Instead, we’ve leveraged real time access to the data and automation to take a process that used to be days or weeks and made it minutes long.
Now, carriers using the tech built on our API can take better advantage of JIT appointments by holding off on paying expensive state fees until they know they will see a return on their investment.
Currently, we have yet to see many carrier or MGA partners fully leverage this now-20-year-old change in regulation, although it’s something that, especially with the help of modern tools and platforms, could keep thousands or even millions of dollars in the bank for these organizations.
The downstream implications of this technology are driving a whole wave of innovation. The largest source of fines across the insurance industry stem from commissions being paid to improperly credentialed agents, typically from lapsed licenses or missing appointments.
Using our API, we can spell out what licenses and appointments an agent has in what states, and, with a fairly low lift, we can now stop problematic commissions from getting paid out and/or prevent agents from transacting without the proper credentials before it happens – and completely automated by software.
This one integration alone can help insurance carriers, MGAs, and agencies avoid compliance risk while also uncapping their growth funnels. This short video shows you how AgentSync can help you manage JIT appointments.