Automation key to insurance product approval process

Even in states that require hopping and twirling, body-piercing parlors can get insured

The filing requirements in the insurance industry can be daunting. In addition to federal guidelines, each state imposes its own requirements. As insurance companies migrate from a labor-intensive manual process to an automated filing system, they seek tools that ease that regulatory burden.

Frontier Insurance (www.frontierins.com) dedicates a filing unit to researching state requirements for proposed product offerings. Once a product is developed, the unit prepares submissions to the regulatory authorities to obtain necessary approvals. The sooner the process is accomplished, the sooner products can be offered by Frontier's agents, directly affecting the company's profitability.

Nancy Bowden, with Frontier's State Filing Division, sought to speed the process by centralizing submissions into a single database. Further, Frontier needed a way to deal with the many changes in regulations and a way to report to field agents how long to expect before products are approved.

"One thing we struggle with in compliance is that it's constantly changing," said Bowden. "You have not only 50 states, but divisions within those states. Those laws are constantly being changed."

The insurance industry must also adapt to regulation changes with each new insurance commissioner. "People donÕt realize the politics involved," said Bowden. "Every time a new governor comes in, a new insurance commissioner is appointed."

"We see regulations as silly as where you staple the check or that pink paper must be used," said Bowden. "We're waiting for a state to require you to hop on one foot and twirl in a circle before you put it in an envelope."

Each state's regulations require unique submissions; those can include policy forms, rate sheets, actuarial information and endorsements. The manual filing process was hindered by the fact that any of those documents might reside at different locations throughout the unit.

After weighing the merits of developing an in-house solution, Frontier opted for the Tracker System from InSystems Technologies (www.insystems.com). Tailored specifically for the insurance industry, Tracker manages the filing process through a single data source. The software guides workflow and automatically prepares requisite filing documents.

Prior to automating, the company had to build a macro that was customized for every state because most of the plans are sold nationwide. "We looked for a solution that would allow us to put information in one time with files for each state," said Bowden, "rather than put in information 50 times."

After more than two years of using the automated system, Frontier has reduced its average approval time from as many as 60 days to an average of just 20 days. According to Bowden, the automated system has made the business unit much more productive. The company now handles nearly 200 filings per month, compared to taking three months for the same number of filings previously. According to Bowden, every one of those days has meant additional revenue.

"The temperament of filing analysts in general is stereotypical-we're all perfectionists," said Bowden. "It was interesting to see how quickly the staff adapted."

A recent (and colorful example) came when Frontier filed for approval to sell general liability and professional liability insurance for tattoo artists and body piercing parlors. Filing in each state was made easier by the system's automatically knowing which forms were required.

"When we go to individual states, the general liability and professional liability form pops up," said Bowden. "In the new version (Tracker 4.0), if you've done it previously, the information is already filled inÑdown to the requisite number of copies of each form, which can vary from state to state."

Finally, an automated filing system allows Frontier to report to its agents the status of product offerings in the pipeline. What used to be guesswork regarding when state approval might come through, can now be accurately predicted. " We can say to the agents, "It takes 20 days for that state to get back to us, " explained Bowde