If you’re at a carrier reeling from several unanticipated new appointees in Kansas, you’re not alone, but don’t give up: There are different options for getting your agent appointments correct and up-to-date, including an easy bulk termination.
New regulations went into effect July 1 in Kansas, changing the business rules for affiliations and appointments, and the state anticipates putting more regulatory changes into effect at year-end.
The state previously required both appointments (carriers designating which agencies and producers they worked with) and affiliations (agencies designating which producers they work with), and decided to drop the affiliations piece. In doing so, they took all affiliated agents and automatically appointed them to any carriers that had previously appointed the affiliated agency.
Many carriers were then startled to see previously unappointed agents show up on their Kansas appointment-fee balance sheet. Carriers generally don’t want to appoint agents that don’t write for them – it’s costly and exposes them to undue compliance risk. Yet, untangling that is easier said than done.
Unfortunately, terminating more than a few appointments may be a manual and labor-intensive process. As you look at your options, it’s worth keeping in mind that, while this may be a one-time thing for Kansas appointments, there are more than 50 other states and territories that go through similarly extensive changes in their licensing process from time to time.
Kansas’s new process necessitates appointments and terminations go through NIPR.
Specifically, Kansas’s new terminations guidance that took effect July 1, 2021:
“Cancellations/terminations of producer appointments must be submitted by the company electronically through NIPR. The Department does not charge a termination fee; however, the company is responsible for the transaction fee charged by NIPR for the termination. The company is responsible for notifying the producer and/or agency of the termination.”
For many carriers, agencies, and MGAs/MGUs that already do business with NIPR, this is a welcome change from having to log in to Kansas’s state-maintained website specifically. The NIPR producer database will in the future provide all stakeholders – carriers, producers, and the state alike – with a more standardized method of maintaining information. However, at the moment, NIPR’s “Interactive Appointments & Terminations” tool has a limit of 100 producers at a time.
We’ve talked with carriers whose unexpected new Kansas appointments number in the thousands. The manual process of having someone track and submit 100 at a time is pretty time-consuming, and is understandably causing some stress.
Good news: A carrier or MGA/MGU isn’t likely to be held accountable for any mistaken appointments in this period – the Kansas Department of Insurance will likely be forgiving during the changeover. However, once the end of the year rolls around, Kansas will charge you for appointment renewals, and, if you renew these appointments, you’ll be on the hook for providing oversight and validation of those agents and their CE, renewals, and general actions. Like impromptu babysitting or being handed the wrong keys by the valet, unexpected responsibilities come with unasked-for risks.
Because of our unique application programming interface (API) with NIPR’s Gateway – an impressive and complicated way to say “we put a tech doorway into their database for our users” – the AgentSync Manage tool bypasses the limit of 100 producers.
Put another way, carriers looking to terminate many producers can do so in bulk, whether they have 10 or 10,000. So, for carriers that discovered many unintended agents previously affiliated with partner agencies were automatically appointed through the Kansas changeover, you could designate a single team member – or several – to bundle 100 producers to terminate at a time through the NIPR termination tool. Or you could use a tool like AgentSync Manage to simply select all the agents you intend to terminate and move them out of your zone of responsibility with the push of a button.
It’s worth repeating that these changes are part of a broader package of reforms Kansas made to its producer compliance regulations, spanning appointments and continuing education. In an interview with Lee Modesitt, the director of government affairs and communications for the Kansas Insurance Department under Kansas Commissioner of Insurance Vicki Shmidt, Modesitt contextualized the changes as a necessary part of standardization.
In that interview, Modesitt said the state processing appointments via the NIPR PDB instead of through its own portal was expected to be a significant process improvement for carriers and agencies that work across state lines. However, that’s not to say the changeover from the old “three-way appointment” method is a simple one, as we have seen.
The reality is that insurance is still a largely fragmented industry, and, for the time being, in a thousand small ways, changes like this will be ongoing. Today it’s Kansas’s insurance appointments and agency affiliations process, but tomorrow it could be Missouri’s producer license renewal deadline (spoilers, it literally is).
Keeping up with the infinite state variations on the producer licensing theme is not an easy task. If you don’t want to be caught flat-footed, working with partners who make compliance automatic, and build in alerts and easy processes even when it’s not, can make it that much less daunting.
If you need to offload unexpected Kansas appointments, talk to our team and book a demo at AgentSync to see what our Manage tools can do for you.