Producer Credentials

Objectives

After completing this lesson, you will be able to:

  • Licenses and Appointments
  • Create Credentialing Data

The difference between Licenses and Appointments

When you buy an insurance policy, you can safely assume that your agent knows what they are selling. Insurance producers can only sell products for which they have credentials. Licensing and Compliance (L&C) is an important part of producer compensation, since a broker's License, Appointment, Contract, Insurance, and Background Check can have an impact on the broker's commission payment. These rules are established at the Certificate of Authority (from here on referred to as Certificate), Line of Business (LOB), and Product levels.

Producer credentials are managed in the Credentialing Portal. Let’s look at three types of credentials: Licenses, Appointments, and Education.

Note
E&O Insurance = Errors & Omissions Insurance, also known as E&O Insurance or professional liability insurance, covers court costs or settlements from lawsuits claiming they made a mistake in professional services. 

Licenses refer to credentials issued by a government entity, such as a country, state or province, and are generally assigned for a combination of geography and product or line of business. For example, Max Martinez may have a license to sell life insurance products in both California and Nevada, but only property & casualty (P&C) products in California.

When a license is associated with a producer, a Legal Entity must be identified. The Legal Entity is the financial entity or subsidiary of the company that can own certificates of authority. For example, SafeCare Insurance California would be the legal entity that issues the license for Max to sell life insurance products in Nevada.

Appointments refer to credentials issued by the carrier, and are generally assigned by product or line of business. For example, an appointment by SafeCare Insurance may grant Max the credentials to sell SafeCare P&C and Life Insurance products.

Education allows you to keep track of any continuing education the producer has completed. This can be for reporting purposes only, or you can configure the system to base payouts on completion of required training.

Most states require both the License and Appointment to sell a given Product or line of business, though there are some exceptions.

Creating Credentialing Data

Licenses, Appointments and other credentials are managed in the Credentialing – Producers menu. Before creating licenses and appointments, we need to set up our credentialing data. This will consist of the following tasks:

  • Create Lines of Business
  • Associate Lines of Business with the State
  • Create the State Entities
  • Create the Legal Entities
  • Assign the Certificates to one or more Lines of Business (LOBs)

Exercise: Set up Credentialing Data

In this exercise, we will create the credentialing data that will permit Max to sell property & casualty (P&C) and life insurance in California and Nevada for SafeCare Insurance, and medical insurance in California only for MediSure.

Prerequisites

Steps

  1. Set up Lines of Business (LOBs) and Certificates for each state.

    1. Go to Administrator – Configuration  - Code Type Search.

    2. Search for and open Code Type ID LOBCODES.

    3. Scroll to the Related Entities section and select Add (+).

    4. Enter the following details to create the P&C Line of Business:

      • Stored Value: P&C
      • English: Property and Casuality
      • Repeat these steps to add Lines of Business for LIFE and Health.
    5. Select Save.

  2. Edit the State of Lines of Business.

    In this step, we will edit the State LOBs to allow P&C, health, and life insurance in California, and P&C insurance only in Nevada.

    1. Go to Credentialing – Certificates – State LOB.

    2. Next to the California entity, select Edit.

    3. Select Add (+).

    4. Add an L&C LOB for Property & Casualty as shown in the image below.

    5. Select Save, then Close.

    6. Repeat these steps to add the Life and Health LOBs to the state of California and the Property & Casualty LOB to the state of Nevada.

  3. Create state profiles.

    The next step is to specify that the credentials for each state are effective on the correct date.

    1. Go to Credentialing – Certificates – State Profiles.

    2. Select Add (+).

    3. In the State field, select CALIFORNIA.

    4. In the Effective Date field, enter 1/1/2022.

    5. Check the Appointment Used? field.

    6. Leave all other fields blank and select Save.

    7. Select Activate.

    8. Repeat these steps to create a State Profile for Nevada with the same effective date.

  4. Create two legal entities; one for SafeCare Insurance and one for MediSure.

    1. Go to Credentialing – Certificates – Legal Entities.

    2. Select Add (+).

    3. Enter the Legal Entity ID: SFC01.

    4. Enter the Name: SafeCare Insurance-CA.

    5. Select Save.

    6. Repeat these steps to create a legal entity for MediSure Insurance with the Legal Entity ID MSR01.

  5. Create three certificates: one for SafeCare California, one for SafeCare in Nevada, and one for MediSure in California.

    1. Go to Credentialing – Certificates – Certificates.

    2. Select Add (+).

    3. Enter the Certificate ID: SFC01-CA.

    4. Enter the name: SafeCare Insurance-CA.

    5. In the Legal Entity Field, enter SFC and select SFC01-SafeCare Insurance.

    6. In the State field, select California.

    7. Set the Appointment Method to Confirm.

    8. Leave all other fields at the default and select Save.

    9. Select Activate.

    10. Repeate these steps to create a certificate for SafeCare Insurance – NV and for MediSure Insurance – CA.

  6. In each Certificate Detail, assign each certificate to the Line of Business.

    Note
    The Certificate Detail panel allows you to configure how a broker's License, Appointment, Contract, Insurance, and Background Check should impact the broker's commission payment. 
    1. Return to the list of Certificates.

    2. Select SFC01-SafeCare Insurance - CA

    3. Select Certificate Details

    4. Select Add (+)

    5. Set the L&C LOB field to Property & Casualty.

    6. Leave the Product field blank.

    7. Set the Effective Date to 1/1/2022.

    8. Leave all Impacts at the default.

    9. Select Save.

    10. Return to the Certificate Master tab.

      Note
      Either the LOB or the Product must be populated. In this case we are using the LOB so there’s no need to select the product.
    11. Add the P&C LOB to the Certificate Detail.

      • Select the LOB Products tab.
      • Select Add (+).
      • Select the L&C LOB Property & Casualty.
      • Set the Effective Date to 1/1/2022
      • Select Save.
    12. Return to the Certificate Master and select Activate.

    13. Repeat these steps to assign the other LOBs to their certificates

Exercise: Add credentialing information for a Producer

Now that the credentialing data is set up, we can assign the license and appointment to our producer, Max Martinez.

Prerequisites

Steps

  1. Add the license information to Max Martinez’ producer record.

    1. Open Manager - Producers – Licenses.

    2. Select Add (+).

    3. Enter the following information about the license:

      • Producers L&C ID: MM-001 (Max Martinez)
      • DOI License ID: 10010
      • State: California
      • Effective Date: 1/1/2022
    4. Select Save.

    5. Add the Lines of Business to the License.

      • Select Reopen.
      • Scroll to the ProLicenseDet Details section.
      • Select Add (+).
      • Enter the L&C LOB: Property & Casualty
      • Enter the Effective Date: 1/1/2022.
      • Select Save, then Activate.
      • Repeat these steps to add the Life LOB to the License.
      • Return to the producer detail screen.
  2. Add Appointment information for Max Martinez, referencing the certificates for SafeCare in California and Nevada, and MediSure in California.

    1. Select the Appointmentstab.
    2. Select Add (+).
    3. Enter the following information about the appointment:
      • Appointment: Enter SFC and select SFC-01-CA
      • Appointment start date: 1/1/2022
      • Select Save.
      • Select Activate.
    4. Repeat these steps to add the Appointments for SafeCare Nevada and MediSure California.
  3. Add an Education record for Max Martinez

    1. Open Manager – Producers – Education.

    2. Select Add (+).

    3. Enter the following information in the Education record:

      • Producer IDMM-001
      • Education ID MEDADV
      • Institution/Facility Name MEDADV Training Center
      • Education Type Medicare Advantage
      • Education Status Passed
    4. Select Save.

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