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Regulation and Compliance > State Regulation

How Admin Support Staff Can Protect Agents From Compliance Problems

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The old image of the agent who worked alone and did everything is outdated. Agents who want to be effective and productive need administrative support to reduce the time spent on tasks that don’t lead to sales. It is rare to find successful, experienced agents who do not have one or more administrative support staff members working with them. It is these staff members who can provide key protection to agents against compliance and market conduct errors.

Policies, rules, procedures … being in compliance means dealing with details. It takes organization and follow-through to be in compliance with rules and regulations and company policies and procedures, and administrative staff members are the ones who can relieve agents of much of this burden.

An agent needs to begin by knowing how his or her administrative staff can help with compliance and market conduct and then once that is identified, he or she can train and educate them so that they can carry out these responsibilities.

How administrative staff can help

Checking for errors, omissions, etc. on applications, supplemental forms and required forms.

Many compliance mistakes can be traced back to administrative mistakes on applications and forms that get compounded and magnified as time passes. Not paying attention to administrative procedures can create situations where there is the temptation to fix the problem by “cutting corners.” For example, failing to get a signature on a form when the application is completed can lead to the temptation to have it signed later, which might be improper. Not conducting a complete needs analysis and risk profile can lead to an unsuitable sale.

Some of the things agents can have their administrative staff members do to avoid potential compliance problems are:

o Maintain up-to-date copies of the administrative guidelines for each company the agent works with and have them provide the agent with a synopsis for the product he/she plans to recommend.

o Check the agent’s work to make certain he/she is following procedures, such as including the proper form, that all signatures are present, etc.

o Develop checklists that the agent can use to ensure that he/she covers all of the administrative requirements in the proper order.

Keeping a compliance calendar

Compliance is an ongoing stream of activities, due dates, etc. It is sometimes easy to lose sight of a key date given the pressure of a busy insurance practice. Administrative staff can monitor due dates and alert the agent in advance of the date so the agent can meet his or her obligations without taking the chance of making errors in a last minute scramble to meet a deadline.

An agent’s administrative staff can help by keeping an annual calendar of compliance responsibilities up-to-date and alerting the agent on a regular basis of what is coming due. For example:

o What are the due dates for meeting continuing education requirements; e.g., for state license renewal and registered products? (This may be several dates if the agent holds licenses with several states.)

o When are the agent’s and support staff member’s license renewal dates? (This may be several dates if the agent holds licenses with several states.)

o When is the annual compliance meeting for registered representatives?

o When is it likely the agent will have an annual or quarterly office examination or audit?

o When must illustration software be updated?

Keeping up-to-date on rules and regulations

An experienced insurance professional has every right to rely on his or her tried and try methods and procedures, but not keeping up-to-date can lead to potential compliance blunders. For example, agents who do not keep up-to-date may not realize that features, costs and benefits of familiar products may have changed, that some of their favorite sales materials have become obsolete or that newer products are more suitable than older, familiar ones. It can be difficult to find the time to keep up-to-date, but it is a price agents have to pay to avoid potential compliance problems. Potential accusations of misrepresentation, unsuitable sales and improper disclosure could result from not keeping up-to-date.

Some of the things agents can have their administrative staff members do to avoid these potential problems are:

o Have the administrative staff organize information on product changes and provide them to the agent on a weekly basis to review. Have them hold updates, etc. until they have all of the information so that the agent only needs to review it once.

o Have them periodically check the dates on the sales materials the agent typically uses. Are any particularly old? Have them see if there are more up-to date materials available.

o Have them alert the agent to any significant changes in administrative procedures that could have an impact on consumers or clients.

o Have them flag as important any changes to rules and regulations that impact the agent or his or her clients.

o Since most agent have appointments with a number of companies, have them collect and organize all of the information on a change to a law or regulation from all of the companies the agent does business with and provide it to the agent, rather than give the agent a number of different communications on the same regulation change.

o When a company changes a policy or procedure, such as adding questions to a supplemental form, have them review the changes and provide the agent with a comparison and direction on what needs to be done differently. Have them remind the agent in advance of the due dates form switching over to a new compliance procedure.

o Have them maintain a file of all compliance related information organized by company, product and compliance topic. This should be a paper file and a computer file.

Keeping client files up-to-date

Client files are the bane of some agents. Some agents forget to put the right information in the file or they put in the wrong information. When questions arise, they sometimes can’t quickly put their hands on the information they need. Without good information they may have difficulty dealing with questions some of which have compliance implications.

Some of the things agents can have their administrative staff members do to avoid these potential problems with client files are:

o Have them develop a checklist to identify what should be in every client file; e.g., fact finder, contact letters, basic client information, etc.

o Have them prepare a checklist for the agent to follow for every sale that includes the information they need for their files.

o Have them follow up after every sale to check that the agent has obtained the information they need for the files.

o Have them screen all incoming information related to an application, file the original and provide the agent with a copy.

How to make your administrative staff effective at protecting you

Administrative staff can’t protect the agent without the training, information and resources needed to do the job. It is critical that the agent only rely on his or her administrative staff members if they have received training, are kept up-to-date by sharing all information the agent receives and given time and resources to master compliance and market conduct.

The following are some of the things that an agent’s administrative staff can do to help themselves become more effective at protecting the agent from compliance problems.

o Identify all of the agent’s compliance-related responsibilities to determine which ones the agent can and can not delegate to the administrative staff.

o Develop a list of all of the compliance-related responsibilities they have.

o Have the staff to create compliance guidelines for their work activities.

o Identify and obtain compliance and market conduct resources from the companies with which the agent does business.

o Collect all of the compliance training and educational resources available from the companies with which the agent does business. This should be both agent and staff oriented training and education.

o Identify and contact compliance staff in the companies the agent does business with so that the staff members have ready access to advice on compliance matters.

o Screen all incoming information on compliance and market conduct from the companies with which the agent does business.

o Meet regularly with the agent to review compliance-related information.

The agent can help make his or her administrative staff more effective by:

o Avoiding being critical about compliance rules and regulations since it does not set the right tone and may de-motivate the staff from focusing on compliance and market conduct responsibilities.

o Encouraging his or her administrative staff to become involved in compliance and market conduct, including recognizing and rewarding them for their efforts.

o Setting an example for the staff by paying attention to compliance and market conduct in his or her own work.

o Sharing any compliance-related information the agent receives at meetings or via the internet with the administrative staff.


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