Crimes Against Customers: Part 1 – Financial Crimes

Insurance compliance is serious business. Falling out of compliance can have real consequences for everyone from insurance agencies, carriers, MGAs, and MGUs, to individual producers, adjusters, and dually licensed broker-dealers. 

Whom you choose to partner with for your compliance needs matters. Choosing the right technology partner can transform your insurance licensing compliance practices from a nightmare into a dream-come-true. 

Choosing the wrong partner, on the other hand, can lead to undesirable outcomes, such as:

• Spending too much money on something that’s not meeting your needs
• Risking compliance and data security mishaps
• Failing to achieve organization-wide adoption and the continued use of manual and error-prone processes
• Losing staff and distribution channel partners because of how frustrating it is to work for – or with – you 

While the industry urges insurance businesses to adopt more modern practices, many insurance compliance technology vendors still have no qualms doing business the way they’ve always done it. Often, this includes committing some serious “crimes” against their own customers. No, we’re not talking about the kinds of crimes that land anyone in jail, but these transgressions are frustrating, costly, and just plain wrong nonetheless. 

In this three-part series, we’ll cover some of the most common “crimes” we see insurance compliance tech vendors committing against their customer base. First up are crimes of the financial variety: the ones that cost you more money than they should, or, worse yet, leave you in the dark about how much money you’ll be spending.   

When insurance compliance vendors commit financial crimes

If you’re looking to invest in a modern, automated producer compliance management solution, it’s likely that saving money is one of your motivations. Unfortunately, customers all too often find themselves spending more money than they anticipated, or even wondering from month to month and year to year how much money they’ll need to spend keeping their producer, adjuster, and broker-dealer licenses and appointments in good order. 

Some commonly perpetrated financial crimes include: 

No. 1: Fees on top of fees

There are unavoidable fees associated with producer and adjuster licensing and appointments. But, when a technology provider charges transaction fees just for giving you the privilege of paying another fee, that’s just not right.

When evaluating a compliance technology partner, make sure to ask what they charge per transaction on top of the fees that entities likes states and NIPR charge. If the answer isn’t “nothing,” there’s a good chance you’ll find yourself paying more each month than you’ve budgeted for getting and keeping your producers, adjusters, and broker-dealers licensed.   

Customer confession: “Another company we’re talking to is charging $2.50 for each appointment, $2.50 for each termination, and $1.75 for each PDB lookup. And all that’s on top of the regular NIPR fee to do these transactions.” 

No. 2: Opaque pricing

Agreeing to pay a fee is one thing, but having no idea what you’re paying for is something else entirely. Many compliance vendors send their customers a bill that makes it impossible to know what they’re paying for. Is that a subscription fee? A state fee? An NIPR fee? An add-on transaction fee? Who can say? 

Before getting into a contract with a compliance technology partner, clear and transparent pricing is a must-have. Once you’re in that relationship, it shouldn’t take a PhD in finance to decode your monthly bill. 

Customer confession: “We’ve got a bill for $2 million and it’s hard to tell what part of that is the unavoidable fees, like the NIPR electronic processing fee or state-specific application fees, and how much of that is just going to the vendor.” 

No. 3: Paying for up-to-date data

When signing up for a compliance management solution, you wouldn’t expect to have to pay extra each time you want to manage compliance. Yet, that’s exactly what some technology providers demand. Paying a PDB fee to feed accurate data from the industry’s source of truth to the system you’re already paying for should be criminal! 

Instead, look for a compliance technology partner that bases its pricing on one straightforward fee, such as a cost based on the number of producers (unique NPNs) you want to keep tabs on. Having accurate, up-to-the-day information about that producer should be included in that cost, not re-charged every time you want to verify the producer’s license is still valid in a state, for example!

No. 4: Various bait-and-switches

Whether it’s signing up for something and then learning you’re not getting what you saw in the demo (without paying extra), or being forced to pay to upgrade a software you bought years ago and thought you could use forever, there are plenty of examples of customers thinking they’re getting one thing and learning the truth later. 

Honesty is important, even when it’s not the answer you want to hear. We believe compliance partners should be upfront about what their solution can and can’t do, how much it costs, and all other terms and conditions, so customers can make fully informed decisions about what’s best for them. 

Customer confession: “To be honest, we’re gun shy to try again with another vendor because of the lack of transparency we’ve been dealing with.” 

No. 5: Holding your data for “ransom”

While insurance compliance providers aren’t technically going all-out “ransomware attack” with your organization’s data, it can feel a bit like that! Many vendors make you pay extra to run reports so you can analyze the data you input and maintain. If you’ve put the data in, but you have to pay to analyze it or report on it, is it really “your” data? 

Sometimes, by necessity, it costs extra to have a custom report built so that you can see exactly what you need in a specific way. We’re not against anyone making money for performing add-on services. But that’s different than a charge for each time you use that report in the future, or want to access today’s version of that data (not last month’s). Don’t let vendors hold your data hostage or make you pay extra to use it for data-driven decisionmaking. Insist on free access to look at your data and do what you want with it. 

Avoid falling victim to financial crimes from your compliance technology

If you’re currently working with an insurance compliance technology that isn’t treating you the way you deserve – in these ways or others! – see how AgentSync is different. AgentSync’s committed to the idea of Customer Love. This means fair and transparent pricing, support that’s actually supportive, and a tech platform that delights its users and is regularly updated and improved. 

See how different insurance compliance could be at your organization by speaking with someone at AgentSync today. 

About AgentSync

AgentSync builds modern insurance infrastructure that connects carriers, agencies, MGAs, and producers. With customer-centric design, seamless APIs, automation, and unparalleled service, AgentSync’s solutions provide data intelligence and streamlined onboarding and compliance management processes that reduce costs, increase efficiency, and get producers ready to sell in hours instead of weeks. Founded in 2018 by Niranjan “Niji” Sabharwal and Jenn Knight, and headquartered in Denver, CO, AgentSync has been recognized as one of Denver’s Best Places to Work, a Forbes Magazine Cloud 100 Rising Star, and as an Insurtech Insights Future 50 winner, and was ranked 65 in Forbes – America’s Best Startup Employers 2023. To learn more, visit www.agentsync.io.