The Rest Is History: How Carriers Can Navigate Backdating Variations to Operationalize Just-In-Time Appointments

– Regina Stephenson

One of the trickier aspects of compliance administration and producer management for carriers is maintaining producer appointments. Sure, if your carrier only works in one state, this can be a low lift – one set of rules to memorize and follow. But, for the carriers that work across state lines, the variations in state rules can be nauseating. 

It’s not just the variations in state law that make this a tricky area for compliance. It’s also the existence of Just-In-Time appointments, which allow carriers to hold off on appointing a producer until that producer has submitted business. It’s also the existence of “brokers,” who in some states still must be appointed, and in some states can’t be appointed, and in some states don’t exist. And it’s the existence of Registry states, which don’t require you to proactively inform the states of your appointed agents but do require you to maintain internal appointment registers. And it’s the fact that a state’s laws may not exactly align with their business rules on the National Insurance Producer Registry (NIPR) Gateway.

Still, it’s better than adjuster licensing, we suppose.

Today, we’ll be exploring the nuances of how states handle appointments through the NIPR Gateway, how backdating factors into the equation, and pro tips for staying compliant as you navigate state appointments for your downstream producers.

Existential crisis: What is an appointment?

An appointment, broadly speaking, is an acknowledgment to the state that an individual producer or firm is acting on behalf of an insurance carrier.

We say broadly because there are a few variations on this theme. In many states, the appointment is just the filing with the state. Sometimes this means appointing an agency, and then allowing that agency appointment to cover all its downstream producers. Sometimes an appointment specifically applies to every single downstream producer and agency, or maybe a state doesn’t appoint agencies and so appointments only designate individual producers.

Another consideration is that this relationship isn’t always called an appointment. For example, in Georgia, a carrier designates a downstream relationship with a producer through what they call a “certificate of authority.” This gets confusing because certificate of authority is also a writ that allows carriers to operate in each state. 

While most states consider themselves the arbiters of whether a carrier has designated its producers appropriately, New Jersey takes a different variation on the theme. According to a call with New Jersey regulators, the state’s opinion is that, because it’s the carrier that has skin in the game on the appointment, then recording an appointment with the state is mostly a formality. (We’ll get into this more later.)

Just-In-Time appointments

Just-In-Time appointments, sometimes dubbed “pre-appointments,” are appointments where a state allows carriers and producers to establish a relationship before the carrier has to appoint the producer. In this case, the carrier might wait until a producer has submitted business before the carrier notifies the state of the appointment (and pays the appointment fees).

This provision of state law is intended to help carriers save money. If a carrier takes a proactive approach in every state and appoints every downstream producer that gives them a come-hither look, then a carrier could be paying tens of thousands of dollars to appoint producers who never write a dime of business for them. Instead, by holding off until a producer has written business in a given state, the carrier can avoid paying for appointments that don’t pay them back.

Sounds amazing, right?

Unfortunately, the ambiguity and nuance of state rules coupled with the sometimes slow internal processes of multi-layered and manual onboarding means few carriers can take advantage of Just-In-Time appointments. 

Most states that have a Just-In-Time appointment law have some variation of this language:

“To appoint a producer, the insurer must file a notice of appointment with the Commissioner within [x] days from the date the agency contract is executed, or the first insurance application is submitted.”

Now, some states, such as Washington, note that the appointment trigger should be “whichever comes first,” but most states allow carriers to decide whether to select the contract date or business submission date as their appointment trigger. And states vary as to whether the timeline to appoint is 15 days, 30 days, or more.

NIPR Gateway backdating rules for appointments

State laws and bulletins are all important, but where the rubber meets the road of appointments is at the NIPR Gateway. This is where carriers actually submit appointment applications for most lines of authority, or they do it via a reseller (like cough cough AgentSync). And these rules are the ones that give order, form, and meaning to whatever it is that the states have written in their laws.

NIPR doesn’t make these rules. And sometimes a state’s written regulations won’t match the business rules they have established through NIPR. Of course, NIPR builds the tech and maintains the infrastructure that supports these rules, but, ultimately, the National Insurance Producer Registry reflects what each state asks it to. So, if you’re scratching your head at a backdating rule or rule change, or if you think a set of rules seems particularly obtuse, your issues might best be solved by the state in question.

Case in point: In 2023, Washington ended NIPR Gateway backdating for appointments, causing some kerfuffle among us nerds in the industry. Are they still a Just-In-Time state? Does this mean we have to proactively appoint everyone? WHAT DOES IT ALL MEAN?!?!

We interviewed regulators in Washington to get their take, which you can read here, if you’re interested in the longer version.

But the short version is that Washington is actually doing what many states do. Their laws already say you’re in compliance if you reported the appointment within X days of the trigger, so no backdating necessary! 

Via the NIPR Gateway, 27 states and jurisdictions allow backdating of some kind, and 18 states and jurisdictions don’t allow backdating (plus you’ve got all those daggum Registry states). So, if you’re operating across multiple states, there’s a good chance you’ll find yourself working in a mix of regulations, with backdating that could stretch to 60 days, or zero.

So, why the discrepancy?

We interviewed more than 25 states, a mix of states that allow backdating via the NIPR Gateway and those that don’t. Of the states that self-identified as Just-In-Time or pre-appointment states and didn’t allow backdating, the rules were clear. They expect carriers to submit the appointment within the statutory timeline from whatever the appointment “trigger” is (depending on the state, this could be the producer’s contract or the producer’s first business submission). And, as long as any enforcement officer at the Department of Insurance can go back and see that the appointment date was within that specified timeframe, then the carrier is golden.

Of the Just-In-Time states that allow backdating, the answer was generally the same – if the appointment date a carrier submits to the state comes after the appointment trigger, as long as it’s still within the statutory timeframe, that’s considered fine. But, with backdating, a carrier can also choose an appointment-effective date that coincides with the trigger date. However, according to the states we talked to (so, not all states, but a good sample), it’s not strictly necessary that carriers backdate the appointment through the NIPR Gateway.

New Jersey’s notable approach to appointments is worth calling out here, however. With a rather generous backdating timeline of 60 days, our contact at the New Jersey Department of Banking and Insurance said carriers are encouraged to backdate their appointments. Our contact at the state noted the state’s regulation says carriers must appoint their producers within 15 days of either the contract or first business submission. They said the 60-day backdating period allows carriers to wait until after the first business submission to report their appointment, but then backdate the appointment to reflect their earlier relationship up to two months prior if that better aligned with the producer’s contract date. 

However, it’s worth noting that New Jersey appears to be an outlier in how they view backdating with the Gateway.

Getting Just-In-Time appointments right

Getting appointments right can be daunting, but states aren’t out to get you – they want the insurers in their state to be compliant, and they’re generally willing to communicate as necessary to get you there.

Don’t let the difficulties of state-by-state appointment laws discourage you from the real savings offered by Just-In-Time appointment provisions. With AgentSync, customers have built processes that allow the time and cost savings of JIT appointments while still appropriately appointing their producers for a fully compliant distribution force.

See how AgentSync makes appointment management and other parts of your distribution easier and more efficient. Watch a demo today.

More from this Author