Risk Mitigation and Producer Compliance, among other things
Written by Erin Gillooly, Manager of Distributor and Regional Carrier Sales at @VUE Software
Recently I read an article from Carrier Management, “AIG Will Fork Over $35M to Settle New York Licensing Issue.” Though I realize that compliance and compliance management is a big deal within the insurance industry, this headline really emphasized how big of a deal it is, especially how costly non-compliance can be. WOW!!! $35M for a group of producers selling insurance without being licensed. Not a reason you want your company’s name in the headlines.
Insurance is all about risk mitigation. The same amount of attention paid to administering policies should be applied to your producers’ compliance, or lack thereof. There are a variety of reasons compliance issues can go unnoticed. Here are a few; lack of communication between producers and home office, difficulties keeping up with the constant changes of rules and regulations around licensing and compliance, an old and antiquated manual system that is prone to human error, or a simple process/procedure breakdown. Whatever the reason is, AIG found themselves in this situation. Instead, it would have been far more cost effective to invest in an automated system like VUE Producer Management and Compliance. They would have ensured their adherence to the current rules and regulations keeping their reputation intact.