This publish is a part of a sequence sponsored by AgentSync.
Managing compliance all through the producer licensing course of is complicated, particularly when it’s executed by hand and much more so when it includes managing variable strains brokers. As a result of securities facet of variable strains, compliance administration for people who promote these merchandise includes an additional level of oversight on high of the already complicated state-based regulatory framework the insurance coverage trade operates in.
Identical to typical producers, on the subject of onboarding newly recruited variable strains brokers, compliance is a excessive precedence for any group attempting to keep away from regulatory errors and their related penalties. However, as a result of these brokers have to fulfill extra necessities with the Financial Industry Regulatory Authority (FINRA), the onboarding course of includes just a few extra steps. Whether or not it’s executed manually or utilizing an automatic answer, the onboarding course of for variable strains brokers goes a little bit one thing like this:
- Step 1: Gather common info together with proof that the dealer maintains an E&O coverage, background examine info, and a W-9.
- Step 2: Get working contracts and approvals between brokers and the entities they work with signed and saved.
- Step 3: Confirm state insurance coverage licenses in every line of enterprise and state the dealer will promote enterprise.
- Step 4: Confirm the dealer’s Central Registration Depository quantity and guarantee they’ve a FINRA registration, have handed a Sequence 6 or Sequence 7 examination, and have established a relationship with a broker-dealer agency.
- Step 5: Make appointments in a fashion compliant with every state’s particular rules.
- Step 6: Confirm annuity coaching for states that require it.
To acquire the licensing knowledge and securities info wanted for onboarding, variable strains brokers are sometimes subjected to near-tortuous ranges of repeat knowledge entry. Not solely is the apply of filling out the identical info over and time and again senseless and time consuming for brand spanking new recruits, nevertheless it additionally doesn’t make an excellent first impression of your service or MGA.
3 pitfalls of handbook compliance
It’s necessary to recollect, dealer compliance administration doesn’t finish after onboarding. Compliance checks ought to exist all through the entire variable lines broker lifecycle from hiring to termination and each step alongside the way in which. Due to its ongoing nature, managing compliance by hand might be notably irritating. We’ve mentioned the downfalls of manual compliance management on a few separate occasions, however in case you’re new to our weblog, right here’s a refresher on among the main setbacks.
1. Lack of information visibility
As we’ve already established, onboarding new variable strains brokers requires gathering knowledge from quite a few sources. From background checks to E&O insurance policies to verifying state insurance coverage licenses and FINRA registration, manually guaranteeing the data you obtain is correct and up-to-date might be fairly the problem.
In fact, you may all the time simply ask the dealer to checklist all of the states they’ve ever been licensed in, however, the truth is, generally they don’t even know what’s up-to-date on the subject of their licensing.
2. Poor use of time and expertise
A scarcity of information visibility within the onboarding course of means somebody in your staff goes to be spending numerous time buried in heaps of paperwork simply to validate present licenses or safe appointments for a brand new distribution accomplice. Whereas some organizations depend on compliance groups to handle this, others search the data straight from the horse’s mouth – their new recruits.
It’s protected to say that variable annuities brokers have sufficient on their plate with out the forwards and backwards of attempting to trace down essentially the most correct and up-to-date info. Not solely is that this irritating and time consuming, nevertheless it’s additionally a reasonably poor use of your new recruits’ expertise. These people ought to give attention to constructing relationships and promoting merchandise, not happening a wild goose chase simply to onboard.
3. Elevated likelihood of human error
When finding correct, up-to-date dealer info includes navigating between a number of totally different spreadsheets, paper information, on-line databases, and extra, the possibility of human error will increase considerably. Particularly when the information is being transferred from one supply to a different by hand.
It’s very important that variable strains brokers preserve correct information because of the extra stage of oversight concerned in promoting variable life insurance coverage and variable annuity merchandise. However the actuality is, the extra human palms you may have touching your knowledge, the extra possible info will get neglected or entered incorrectly.
Enhance knowledge visibility with a single supply of fact
Should you’re having bother monitoring down correct, up-to-date info all through the onboarding course of, don’t depend on your new recruits to do the heavy lifting. As a substitute, contemplate a contemporary answer that may present real-time dealer info from a single supply of fact on the click on of a button.
Via automated dually licensed communications, you may eradicate knowledge silos in your inside staff and guarantee your brokers have entry to real-time, correct info the primary time round.
Not solely can an automatic compliance administration answer validate your knowledge to make sure accuracy, it additionally takes the repeat knowledge entry out of onboarding by permitting brokers to submit all obligatory documentation in a single central and simply accessible self-service portal. Your variable strains brokers will probably be a lot happier after they can spend much less time on knowledge assortment and extra time doing what they do greatest.
Plus, with much less figurative and literal touches all through onboarding, you may relaxation assured you’re not increasing your risk of human error or oversights. Discuss making the entire course of so much smoother and extra environment friendly for everybody concerned!
Prioritize actionable knowledge all through the whole dealer lifecycle
Rising knowledge visibility within the variable strains dealer onboarding course of is simply one of many advantages of investing in an automatic compliance administration answer in your service or MGA/MGU. To make sure you’re shielded from dangers, ongoing compliance upkeep must be a precedence all through the whole dealer lifecycle – from onboarding to termination.
Having full visibility into your dealer knowledge is necessary as you’re employed to confirm licenses, observe persevering with training necessities, and renew service appointments. AgentSync Handle affords a consolidated view of dealer eligibility that unifies Monetary Trade Regulatory Authority (FINRA) and Nationwide Insurance coverage Producer Registry (NIPR) knowledge right into a single profile.
Should you’re prepared to extend your knowledge visibility and reduce your compliance danger with efficient, environment friendly, and ongoing compliance help at each step of the dealer lifecycle, book a demo and find out how AgentSync can help.
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