| | | | A tool to aid companies performing background checks on producers
IS IT NECESSARY TO “KNOW YOUR AGENTS”?
The 1994 Federal Crime Bill (Violent Crime Control and Law Enforcement Act, 18 U.S.C.A. §1033(e)), clearly states that an individual who has been convicted of “any criminal felony involving dishonesty or a breach of trust” may not engage in the “business of insurance” as defined in this Act. Non-compliance by company officials is punishable by fine and/or imprisonment.
Your company may be liable if it appoints or retains a producer convicted of this type of felony, especially if the company doesn’t have procedures in place to identify these producers.
HOW DOES THE INDUSTRY RESPOND?
Taking steps to meet the letter and spirit of the law can be costly. Companies’ preventive actions vary widely throughout the industry. Many do initial background checks (ranging from county to federal), but very few conduct regular background checks on their currently appointed producers.
Until now, some companies have relied solely on the honesty of the producer applicant when responding to the felony question.
Companies could research the NASD’s and each state’s public website each month to check the records against their producer roster. Most companies have relied on states and the NASD to notify them of producer or broker misconduct. Unfortunately, that process is tedious and oftentimes unreliable.
THIS NEW TOOL HELPS PROTECT YOUR COMPANY
Now, CLEAR Market Practices has helped make compliance easier! In addition to running your usual criminal background check prior to a producer’s appointment, you can use the new Producer Sanctions Report (PSR) to run a check on your appointed producers every month. All for one low, annual cost.
Each month we update the PSR with states’ publicly reported, recent disciplinary actions against producers and NASD actions against brokers. We report more than 5,000 sanctions each year.
No longer will you unknowingly keep producers after they have been disciplined or suspended by other companies. Now you have an additional tool to uncover their experiences with other companies and other lines of business. | | | |
