How to Streamline Your Regulatory Compliance Process in the Insurance Industry
The insurance industry is amongst the most heavily-regulated industries, perhaps only behind the financial sector when it comes to the sheer number of regulatory bodies and the pervasiveness of the regulations that they are required to follow.
Streamlining your regulatory compliance process in the insurance industry can be challenging, especially when you consider the dynamic nature of the regulatory landscape. But there are a few strategies for arriving at a more effective process flow that drives compliance.
The Objectives of Regulatory Compliance in the Insurance Industry
In the insurance space, there are several key objectives that all regulatory bodies strive to achieve with their oversight. These include the following measures.
- Maintaining insurer solvency is a priority, as regulators want to ensure that insurance companies are able to provide policyholders with compensation when a legitimate claim is submitted.
- Maintaining fair, affordable insurance premiums up is another priority. This way, consumers can purchase coverage, including in regions where certain types of insurance are mandatory (e.g. auto insurance is required in many states.)
- Maintaining insurance availability in all regions is challenging because some insurers may wish to stop offering certain forms of insurance coverage to individuals in a particular region. For instance, an insurer could seek to stop offering homeowner’s insurance to residents who live in a hurricane-prone region. Or they may wish to stop offering coverage for older homes because there is less potential for profit. Limitations such as these can have an adverse impact on the industry as a whole, so regulators work to ensure insurance remains available to those who need it.
- Compensating for consumers’ lack of knowledge of insurance-related processes and policies. Misunderstandings can lead to major problems in the insurance space, so there are regulations in place that require insurers to provide consumers with specific bits of information that are designed to help promote a greater understanding of key points. It’s akin to the way in which police officers are required to read Miranda rights to a suspect. Insurance agents are required to inform prospective policyholders about certain facts.
Insurance industry regulatory groups tend to develop their regulatory requirements with these four overarching objectives in mind. And there is no shortage of regulatory obligations in this business space, which leads to the question: How do you streamline your regulatory compliance process in the insurance industry?
Forming a Regulatory Compliance Task Force
The first step for streamlining your insurance company’s regulatory compliance process is to develop a task force that will work to identify regulatory burdens, evaluate areas of non-compliance, develop an action plan, and oversee your regulatory compliance program as a whole. This group will be proactive and reactive, reacting to existing compliance challenges and working to maintain compliance and avoid non-compliance in the future.
Your regulatory compliance task force should be composed of individuals from across all of your insurance company’s departments and divisions. This gives you an across-the-board view of the dynamics, processes, and challenges that will be affecting your regulatory compliance program.
Understanding the Insurance Industry Regulatory Requirements
The second step for streamlining your insurance company’s regulatory compliance process is to identify all of the applicable regulatory requirements. What specific regulations do you need to consider? List them out and take the time to understand each one. How does each of these regulations affect your organization, its interests, its employees, and its operations? Dissect the regulation’s impact and list out precisely what needs to happen in order to achieve — and maintain — regulatory compliance. This will serve as the basis of your action plan.
Once you’ve identified the measures that must be implemented in order to achieve compliance, it’s a matter of developing a plan with actionable steps for achieving that goal. Many turn to regulatory compliance risk management software platforms to streamline the regulatory compliance process. These software systems are used to evaluate, assess, prioritize, and plan a response, effectively streamlining and centralizing your regulatory compliance program.
This type of software platform will often feature project management-type tools that allow a task force to map out steps and collaborate on tasks. This makes it possible to execute your plans and effectively monitor progress as these new measures are rolled out.
Establishing a Formal Process and Action Plan
A regulatory compliance task force must develop processes that will be used in the course of their work. For example, let’s say the task force learns of a serious non-compliance issue that’s affecting their insurance agency. This is something that must be addressed immediately! There needs to be an established process in place for tackling this sort of issue. Consider:
- How will the task force members be alerted?
- Who’s in charge of scheduling a meeting on the matter?
- What is the exact process to be used for addressing this non-compliance situation?
- What is the timeline for gathering the task force members, developing a plan, and taking action?
All of these questions ought to be addressed in your generalized action plan. This way, everyone knows their role and what to expect when a challenge arises.
Training as Part of Your Regulatory Compliance Program
The world’s savviest task force members and the absolute best regulatory compliance software platform won’t bring results if your employees lack the knowledge and training required to put your recommendations and processes to work. Training is essential for success.
An insurance company’s regulatory compliance process must include training and education. This may be offered internally or you may choose to bring in a third-party trainer to host webinars, training sessions, and workshops. Achieving regulatory compliance often requires an overhaul of existing processes and workflows. Employees will need to re-learn these workflows and processes. Beyond this, though, they must also be educated on why they’re being asked to perform a task in a new way. This understanding of the underlying “why” is important. We’re naturally resistant to change, but people tend to be more likely to adopt a new method or process if they understand the negative consequences that could arise if they were to veer off the path.
It’s also helpful to provide staff with a more general understanding of regulatory compliance and how it affects the insurance industry as a whole. In this way, an insurance agency can see benefits from offering educational workshops on the topic of regulatory compliance in the insurance industry.
Using Regulatory Compliance Software to Streamline Your Processes
Regulatory compliance software platforms offer a robust framework for dealing with regulatory compliance or lack thereof. Many of these platforms are industry-specific, with tools designed to guide an organization in its efforts to learn about its regulatory burdens and monitor compliance. The features and functionalities commonly include the following.
- Tools for identifying relevant regulations affecting an insurance company.
- Tools to evaluate, assess and prioritize issues that can lead to non-compliance.
- Project management tools for planning a response and monitoring the roll-out of a regulatory compliance-related initiative.
- A dashboard and update feed with information on new regulatory changes that may affect your insurance business.
These software platforms go a long way toward centralizing efforts and streamlining your regulatory compliance process as a whole.
At iTech, we specialize in providing clients in the insurance industry with the technology they need to make the most of their regulatory compliance process. Our solutions blend today’s top technologies with a user-friendly platform that streamlines efforts and maximizes efficiency. Contact iTech today and let’s discuss your regulatory compliance process and how we can help you harness today’s best technology to take your risk management efforts to the next level.