Complying with the Affiliated Agent Process in Insurance Licensing
I could start off this blog by saying we care because affiliated agents have to do with complying with state statutes and regulations, but then that would start things off on a negative note. Let me give you some history.
Affiliated agents, or more correctly stated, affiliated “individuals,” are those who represent the agency. Twenty-eight states have some type of affiliation process. In some states, only officers, owners, partners, DRLPs (Designed Responsible Licensed Producers), or DRPs (Designated Responsible Persons) have to be registered with the state in which the agency does business; in other states, requirements may apply to actual producers who transact business on behalf of the agency. And to make matters more complicated, various states require affiliated individuals to be appointed separately by the insurer from the agency appointment or require the agency appointment to include the individuals.
The next question you may ask is, what are the reasons some states affiliate and some don’t? The main reasons are twofold: The main purpose for affiliating an individual such as an officer or DRLP is for the state to have someone on record if compliance issue arises. They will go to that person or persons to manage the process. The other reason states affiliate individuals is to keep track of who is representing the agency, in case of a consumer complaint lodged against a producer. The state would again know who to contact on behalf of the producer.
From an insurer standpoint, the state would require an agency to affiliate its individuals to the agency, in addition to maintaining compliance, because in those states, the agency appointment would cover the individuals; hence one appointment means one appointment fee paid to the state. That would be a huge savings if you are an insurer and have thousands and thousands of producers who sell in the states where the agency only has to be appointed. An added bonus is being in compliance and avoiding a market conduct fine or sanction.
VUE Software knows the rules by state: who must be affiliated and who has to be appointed to comply. VUE has a compliance team that keeps up to date with all compliance issues, not just affiliated individuals. The VUE system not only assists in maintaining compliance, but makes your job easier by pulling data directly from the PDB to keep your licensing and appointment records up to date at all times, no matter if your demographic, licensing, appointing, or RIRS actions change.