The insurance industry is highly regulated by both the state and federal government, requiring agents and agencies to maintain licensing compliance in each state they solicit and sell insurance. In addition to maintaining your book of business, your responsibilities as a licensed agent also include maintaining your resident and non-resident state licenses, appointments with carriers in each state you solicit insurance products and annual or biennial continuing education requirements required by your home state. To further complicate the issue, if you hold an insurance license in multiple states or you sell more than one line of insurance, the maintenance of your various state licenses is compounded.
For example, if you hold a resident license in Texas and want to maintain your Indiana non-resident license, you must renew it every two years on the last day of the license issue month and pay a fee in an amount of $90. However, if you hold a resident license in Illinois, for example, and want to maintain your Indiana non-resident license, your renewal fee would cost $250 since the Indiana Department of Insurance imposes a retaliatory fee, in addition to its renewal fee. And, in the event you forget to renew your license on time and need to reinstate it, you will be required to pay a reinstatement fee of $270 in addition to your renewal fee. Of course, this reinstatement fee is also increased in those states where retaliatory fees are imposed!
Sounds confusing, right?
What if you, like many agents, hold multiple non-resident licenses? Or if you are responsible for the licensing of multiple agents from an agency that employs numerous producers in multiple states, each having different requirements, fees, forms and regulations?
So how can an insurance agency manage all these variables and remain compliant within each state it conducts business? Perhaps an in-house licensing team working from a shared spreadsheet or database, attempting to keep up with future licensing events while also trying to adjust to changing state regulations?
Many insurance agents, agencies and insurance carriers are turning to third-party licensing compliance companies that specialize in licensing maintenance. A third-party licensing compliance company provides a streamlined workflow process that is more cost effective than what can be accomplished through in-house licensing. They perform the research, assembly and filing of various licenses and appointments, allowing agents and agencies to focus on the day-to-day duties of building their book of business.
Licensing requirements maintained by a third-party company include:
- Initial licensing for resident and nonresident states
- Carrier appointments for agent
- Renewals for licenses and appointments
- Continuing education tracking
- Change of name or address
- Duplicate license requests
- Initial licensing for resident and non-resident states
- Agent-in-Charge application
- Agency registration
- Corporate filings with the Secretary of State
- Carrier contracts
Let’s take a look at some of the leading third-party compliance companies and see how they help to alleviate the burden of licensing.
Since 1997, ILSA has specialized in assisting individual insurance agents, adjusters, surplus lines and companies of all sizes with its licensing compliance. In fact, Lisa Miklojachak, Marketing Administrator with ILSA, advised that “Many of the services we now provide were researched and developed because a client asked if we could do it.”
ILSA is a full-service company with over 50 employees. They provide 24/7 access to online information through their company’s ‘online gateway’ portal so that you can track the status of your licenses, appointments and CE status, and download any necessary reports. In addition, agencies have access to their corporate information, as well as their agents’, which offers a centralized location all their licensing data. If you are enrolled in one of their CE tracking services, reminders are sent every 30 days beginning 6 months prior to the renewal deadline.
What’s especially nice is that for all of the benefits they provide, Insurance Licensing Services of America does not charge a membership fee or require any setup fee for its online gateway, and they consistently provide updates regarding the insurance industry on their social network pages including Facebook and Twitter.
ILSA is a fee per service company, so clients are billed only for the services that are provided, plus applicable state fees.
Developed to assist individual agents and agencies streamline the licensing process, LicenseLogix was started by a group of lawyers, technology professionals and legal service industry veterans. LicenseLogix offers insurance agencies the option to outsource their entire licensing compliance or choose services ‘a la carte’ to ease the workload of an in–house licensing department.
With 24/7 access to all licensing information and an account team determined to provide quick turn-around service, LicenseLogix has grown into a valuable provider to insurance agents and agencies– in all 50 States.
LicenseLogix provides a straightforward online tool called Client License Information Center (CLiC). This system allows you to access and manage your information and it offers several useful features. You can easily run reports, view an application status, see renewal deadlines, determine associated fees and more. CLiC will also notify you when you have an upcoming requirement, such as continuing education and automatic renewal reminders.
“Our online portal ‘CLiC’ provides a user-friendly, secure and cost-effective method to keep track of licenses in every jurisdiction while automating renewals and streamlining new license filings. Information on deadlines, renewal fees, and relevant corporate documents are easily accessible. Our account team is very responsive and can assist with any license filings – and have them ‘signature ready'” says David Yount, CEO of LicenseLogix.
Access to CLiC is available through an annual fee with a one-time development fee. If you prefer LicenseLogix to fully manager your licensing, you can pay per license/renewal or monthly which varies on the number of licenses managed.
Established in 2001, Supportive Insurance Services specializes in obtaining and maintaining licenses for agents, agencies, adjusters, surplus lines brokers and insurance companies. As Jeff Brinkmann, Supportive Insurance Service’s Sales & Marketing Vice President explains “Supportive Insurance Services can take this time-consuming, resource-eating job off your hands…and we can do it less expensively than you may think.”
Supportive Insurance Services provides clients with a password protected database allowing you to query each license, or all of the licenses, associated with your organization. They notify you of upcoming renewals and process them on your behalf. They also track continuing education and non-resident licensing, process address changes, director changes, duplicate license requests and more. Supportive Insurance Services has a staff of 22 dedicated individuals, averaging over 20 years of licensing and insurance experience. Supportive Insurance Services also keeps its members informed of licensing updates via their licensing blog and on Twitter.
For initial licensing, state fees and fees to process are paid up-front. For ongoing licensing maintenance, Supportive Insurance Services charges a monthly management fee. This management fee avoids messy invoicing and provides for easy budgeting, as opposed to transactional fees which can vary from month to month. In addition, a retainer for state fees is required.
Have you used any of these third-party compliance services? Have we missed any third-party companies that should be included? Share with us below!
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