In the health insurance industry, contractual agreements are required between the insurance carrier and the policy owner; and the insurance agent, also known as a broker or producer, stands in the middle of both. The broker, through an appointment contract is designated as a recognized representative of the carrier. Although the broker is legally contracted with the carrier, he or she must also work on behalf of the policy owner. The health insurance broker offers a complicated financial service product, the health insurance policy. Over the life of the policy, the health insurance policy, or contract, can involve large sums of money and require both parties, the policy owner and insurance carrier, to complete multiple financial transactions to maintain the contract. For this reason, the Broker’s role in the health insurance transaction, and more importantly, their continuing education are important in delivering consumers the most up-to-date and accurate information.
HISTORY OF INSURANCE REGULATION
Because of health insurance complexity, state regulatory authorities were created in order to monitor and regulate activities related to all forms of insurance. In 1851, New Hampshire appointed the first insurance commissioner, thus creating the current state regulatory framework. Twenty years later the National Association of Insurance Commissioners (NAIC) was established to coordinate activities of individual state regulators and share resources. The NAIC is used to pool resources, discuss common issues, and align oversight of the insurance industry; however, each state decides how the insurance industry will function individually within that state. Texas’ recorded history reflects that the first iteration of insurance law, and the predecessor of the Texas Department of Insurance (TDI), was established early 1875. It was a year later the Texas Constitution, during the 14th legislative session, authorized the Board of Insurance Commissioners to become effective April 18, 1876.
ROLE & RESPONSIBILITY OF INSURANCE REGULATIONS
Insurance regulation was established with the purpose of protecting American consumers. Congress adopted the McCarran-Ferguson Act in 1945 and so affirmed state responsibility to regulate insurance. This act is responsible for protecting consumers, ensuring that insurance carriers meet their policies’ obligations and that brokers operate ethically and knowledgably. To sell insurance brokers must be licensed in a designated home state and must comply with the laws of that state. State authority regulations are organized around several responsibilities, such as company and broker licensing, product and financial regulation, market conduct, and consumer services. These authorities oversee the activities of brokers as they complete the insurance transaction.
The Patient Protection and Affordable Care Act (PPACA) was signed into law on March 23, 2010 and ushered in a new period of increased regulation of the insurance market segment. Although it concentrates on reforming the health insurance market, the PPACA passage also put more emphasis on continuing education. Continuing education programs are a source of information pertaining to PPACA regulations and how they will be implemented. Increased education means that brokers must remain well versed in how this new legislation and components of the legislation will affect clients.
BROKER’S COMMITMENT TO CONTINUING EDUCATION
To ensure brokers are meeting the established standard and maintaining high quality knowledge on current insurance products, and industry trends, continuing education programs were established. Due to the ever-changing policies and laws continuing education is an easy way for insurance professionals to maintain their professional standing while improving their ability to provide expert service at the same time. Brokers should be expected to provide the appropriate products and provide knowledgeable service, while abiding by the laws and regulations defined by the home state. Providing quality service to insurance customers resides on the ability of the agent. Continuing education ensures agents are continually updating their industry knowledge.
Each state requires continuing education credits and monitors fulfillment when the broker renews his or her license. Specific requirements vary by state, but typically 30 hours of continuing education are required in every two-year renewal cycle. Half of the total hours must be completed in a classroom setting. There is a list of approved subjects from which the courses must be taken, which includes a two-hour course regarding ethics or consumer protection.
Brokers must maintain their continuation education credits in order to renew their license. If brokers do not maintain the required number of continuation education credits, their renewal can be delayed until the hour requirement is met, and the broker may be subject to a financial penalty. Consumers should always request a broker’s insurance license number and verify that the license is current and in good standing. Agent license verification can be confirmed with Texas Department of Insurance at https://txapps.texas.gov/NASApp/tdi/TdiARManager.
STATESIDE CAN HELP!
Stateside Insurance Services, since 2003, has focused on providing comprehensive health insurance information, responsive customer service and expert industry knowledge for Texas consumers. Stateside has annually been recognized by health insurance carriers and the Health Insurance Marketplace as a Top Producer in Texas.
Whether the health insurance policy is for an individual, family, small business or supplemental Medicare coverage, Stateside dedicates the time, and our deep industry expertise, to ensure our clients have identified the best health insurance plan for their specific needs. Stateside is available to answer any general questions regarding your coverage options, can provide a subsidy determination, and even assist in creating and submitting online applications for ACA compliant plans during an Open Enrollment or throughout Special Enrollment periods.
By using the Telephone Appointment System, clients can take advantage of scheduling a health insurance discussion when convenient for their schedule. During Open Enrollment phone appointment availability is expanded to include extended hours and weekends.