US Insurance Producer Licensing and Onboarding: Do You Know Where Your Agents Are?

TowerGroup Take-Aways

• The disparate 50-state licensing regulations of the insurance industry in the United States place an undue burden on agents and brokers in both cost and services.
• Consolidation of insurance carriers and of agents and brokers is causing licensing and education data to bounce between business entities, which creates challenges for management.
• Some large agent groups have lost their patience with protracted attempts by the National Association of Insurance Commissioners to modernize and simplify licensing and now want a national solution to the problem.
• The National Association of Registered Agents and Brokers Reform Act of 2008, house bill H.R. 5611, provides for a nonprofit, national membership association that will centralize producers' licensing without diminishing standards.
• Onboarding of new agents and producers must take place quickly and effortlessly, and leading carriers want technology solutions that will facilitate that goal.
• Technology exists today that automates external data sources, data capture, data retention, and reporting to fulfill regulatory requirements for licensing and continuing education, which benefits insurance agents, brokers, and carriers.

Report Coverage

US insurance carriers are in fierce competition to attract and retain the best producers. Complexity of process at a carrier is a clear impediment to that goal. Mergers and acquisitions at every level in the insurance industry continue to disrupt the status quo. The US insurance industry is wrestling with the growing global nature of the business, particularly in light of a regulatory environment that presents obstacles at almost every turn. Having a qualified and documented producer force is vital in the industry, yet many carriers deal with this documentation at a product level and manually. This TowerGroup Research Note looks at the issues impacting the management of requirements for producer licensing and continuing education.

Report Coverage

Background

Ease of Doing Business Is a Driving Force

Mergers and Acquisitions Create a State of Flux

Agents and Brokers Plead for Simplification

Carriers and Producers Must Be Prepared

Summary