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AgentSync Knowledge Base

Producer Offboarding

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Challenges

Offboarding may be either expected or unexpected, planned for or completely spontaneous. One thing carriers and agencies can plan for is that offboarding producers will happen. There are several reasons a producer’s appointment with an insurance company, or for a specific insurance product, may end. 

From the most mundane (a producer leaves the industry) to the most serious (an appointment is terminated for cause), the process of offboarding a licensed producer includes the same steps. In each case, the insurance carrier needs to notify the State Department of Insurance of the appointment termination. The information then must be conveyed to the individual producer as well as to any agency the producer is associated with. 

Delays in this flow of information can lead to serious mishaps, such as a producer conducting business for which he or she is not appointed.

Best Practices

Having the right system in place can take the producer offboarding process from a complete headache to nearly effortless. A producer compliance management technology should be capable of communicating license expirations and appointment terminations in real-time between every stakeholder.

Ideally you can integrate offboarding in real-time with the respective state departments of insurance and NIPR. Your bottom line is to let all stakeholders know as soon as possible when you are no longer working with an agent or agency to avoid the potential for missteps or regulatory actions that could occur during any lags in communication over what entities have responsibility for agents. 

Producer Offboarding FAQs

There are plenty of reasons to have an eye on your offboarding process. Sometimes offboarding is predictable: An agent is retiring, they’re moving outside of your regional distribution range, etc. Insurance companies selling Medicare Supplemental policies often have onboarding and offboarding in rapid succession just before and just after open enrollment season. Other times, it’s something less pleasant or predictable – in some states, a charge for driving under the influence or similar could warrant an immediate termination of a producer’s resident license. Regardless of the reason, when an agent is no longer doing business with your organization, divesting the responsibility for them becomes mission-critical.

Different states have different rules. Some states require agencies and carriers to notify the agent in writing such as with an email, while other states require carriers and agencies to issue a termination notification on paper via mail.

As long as an agent is appointed with a carrier or affiliated with an agency, that entity bears some degree of responsibility for that agent’s actions. In general, you don’t want this burden to keep you open to risk. For example, if a carrier fails to offboard a retiring agent, the state may still include that agent in the head count for that carrier’s annual appointment fees. The carrier may not want to pay to renew that agent’s appointment, but if they missed a deadline to notify the state, failure to pay the fee could jeopardize the carrier’s standing for all agents in the state.