Whether state department of insurance regulations, healthcare laws, or government-imposed employer requirements, there is no shortage of rules to follow when it comes to insurance.
Knowing which regulations apply to your organization is only part of the battle. Equally important is insight into how your organization performs when it comes to meeting each aspect of regulatory compliance, especially around compliance reporting and data. Planning for data and reporting on your organization’s compliance benchmarks requires knowledge of all existing regulations, meticulous record-keeping, and the ability to analyze and interpret data.
It seems simple enough, but if that were the case, the insurance industry wouldn’t be drowning in fines and penalties associated with compliance violations. The reality is, the number of laws, the speed at which they change, and the differences across both state lines and insurance product lines creates a perfect storm for non-compliance.
Likely, your organization doesn’t have a team of state-by-state insurance experts, lawyers, and data analysts working full time to report on your compliance. A technology solution that allows you to track producer license compliance in real-time is the best way to avoid costly fines and penalties.
With the right producer compliance management system, insurance carriers, MGAs, and insurance agencies can easily view which producers are at risk of falling out of compliance at any time—and, more importantly, take immediate steps to correct it.
By using NIPR to pull data using producers’ NPNs on a daily basis, you can avoid paying inappropriate commissions and the ensuing regulatory fines.
Compliance Reporting and Data FAQs
1. What are some of the ways insurance regulations can change?
The easiest to spot and least common way for insurance regulations to change is through a law, executive action, or judicial action at the federal level. More common are that each state’s legislature, judicial branch, or gubernatorial office will issue a law, ruling, executive action, respectively, that changes that state’s (or territory’s) rules. Additionally, each state’s insurance commissioner may issue regulatory guidance, and processes may change depending on the approved vendors each state uses to maintain their insurance licenses.
2. What kinds of data gathering would be useful for insurance compliance?
At-a-glance reporting to show whether an agent or a set of agents is properly licensed and appointed can expose gaps in your compliance straightaway. Additionally, having a system that integrates with your policy administration system to stop inappropriate business before it happens serves two purposes: Obviously doing the right thing is its own reward (an ounce of prevention etc.), but also flagging repeat offenders can reveal which agents might be a bigger risk than is necessary.