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Compliance journey: what happens when one agent submits one piece to 5 carriers?

To give you an idea of what you may be up against when it comes to compliance, ASJ had a seasoned producer send a general marketing piece to five major carriers with which he works. We removed the names of these companies, instead assigning them numbers.

This is a piece with which most agents would deal--a marketing flyer explaining why the prospect should make an appointment to discuss doing business with this producer, based on the merits of the products that they offer: It details the need for long term care insurance, names the company offering the product, and offers several statistics, It's fairly general, but to err on the side of caution, this agent submitted the piece to compliance anyway.

So how long does all this take? What types of things are carriers looking for? Is there a standard practice across companies? Let's find out.

[ILLUSTRATION OMITTED]

WEEK 1

8/13/09

Emailed piece to five carriers

8/17/09

Received phone call from Carrier 1:

They advised that the piece would not be allowed for submission since it was not specific to that company's policy. They stated they would discuss the general content with compliance, but it would not result in an actual approval. They also noted that if they did approve a letter of this nature, the process would take several weeks since they would also be filing with the specific state(s) for their approval. as well. Promised some form of response within two days.

8/18/09

Received email and verbal confirmations from Carriers 2, 3, and 4:

The piece had been forwarded to these companies. appropriate internal personnel for initial review.

WEEK 2

8/20/09

Emailed response from Carrier 1:

Per our conversation today, this piece is not a Carrier 1 piece and is not approved or disapproved.

A Carrier 1 piece could include:

* Stats less than two years old (all stats must have a source)

* Require policy forms# and disclaimers on consumer pieces

* No absolute statements

WEEK 4

9/10/09

Response from Carrier 4:

Included 14 revision requests that will be managed for resubmission. Agent emailed them new version containing requested revisions on 9/15/09.

9/15/09

Carrier 4 requested additional changes:

Thank you for the information, just a couple changes first please before I send this in for the final review.

1 Please note that the Carrier 4 assigned reference number and edition date needs to be in the bottom left corner of the page.

2 Font size shouldn't be smaller than 10 font (There is a disclosure at 9 font I noticed.)

3 All sources must, be dated.

4 All sources should be within three years.

If you could please update then return to me and I will send in for the final review process.

9/15/09

Submitted to Carrier 4 with changes.

WEEK 5

9/18/09

Received approval from Carrier 4

WEEK 8

10/9/2009

Follow-up request sent to Carriers 2, 3, and 5:

As of press time, agent had still not heard from Carriers 2 or 3.

WEEK 9

10/14/2009

Received a call from Carrier 5:

They lost the original submission; however, from what they could see, the compliance department would decimate virtually everything in the piece and probably take at least three months for a reply. The agent asked them to instead offer feedback about more general needs for this type of letter from their marketing staff rather than compliance staff.

How to Stay Compliant--and Sane

The word "compliance" is a source of trepidation--and sometimes outright fear--for many agents. However, the fact is that we cannot conduct business without adhering to appropriate and compliant practices. We shouldn't even try. This obviously includes, but is not limited to, any solicitation material we may be sending clients. Any and all "advertising" (that is what the compliance professionals may call even a simple cover letter to a client) requires scrutiny and approval by the insurance company or, for some, their broker-dealer:

Of course, you may communicate with your clients and prospects routinely without every little thing you do being "approved" by someone else, but the challenge is to figure out when you may have crossed the line into something that should be reviewed. Usually, the products and services we offer as agents will be accompanied by carrier-provided material that has already passed scrutiny from compliance. However, there are times when you may wish to communicate something generic that doesn't refer exclusively to any particular product or service.

Here are some tips for saving your business and your peace of mind:

* Make sure you err on the side of caution and at least ask someone if what you are doing is OK or if it should be reviewed. The compliance review process can be time-consuming and frustrating, particularly if your piece is complex, but the consequences for not following proper procedures could be detrimental to your career.

* Be patient, but follow up with your carrier or contact.

* Make sure that you are going to the right source, and then listen to what they tell you with an open mind. If you are defensive about your position or language, you may be simply compounding the problem and making the process even more difficult.

* Think carefully about what you send to your sources. Compliance rules are mostly based on good, common-sense ideals. There may be some specific guidelines you are not aware of, but rarely will they dramatically change your objectives, if what you are doing is proper to begin with.

Source: Scott D. Boyd, vice president of long term care, National Benefit Corp. He can be reached at sboyd@tnbc.com.

ON THE WEB

What do compliance officials suggest you do to make things easier all around? The compliance departments from four major carriers offer their advice at www.ASJonline.com/comply.
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Title Annotation:ACT 2: COMPLIANCE
Publication:Agent's Sales Journal
Date:Jan 1, 2010
Words:978
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