Producers, Brokers and Vendors

Objectives

After completing this lesson, you will be able to:

  • Understand the concepts of Brokers, Producers and Vendors
  • Create a Producer Record

Managing Producers, Brokers and Vendors

Have you ever purchased an insurance product? Maybe you’ve purchased a policy on your car or motorcycle, taken out a renters insurance policy or even a homeowners policy. If so, you probably know the agent personally, or at least you live in the same community.

Personal connection has traditionally been a cornerstone of the insurance industry, where we often think of the Agentas the key contact between a customer and the insurance carrier. However, an agent is only one type of Producer. A Producer is any entity who guides customers in selecting the best insurance plans for their needs.

In a typical scenario, many different types of entities are producers. Some examples are insurance carriers, agents, and agencies. These entities can work independently, or they can be connected to each other in a hierarchy.

The concept of Producers, Brokers and Vendors

Let’s look at a scenario in which multiple producers work together. Max Martinez is a licensed agent who can sell life and property & casualty insurance for SafeCare, and medical insurance through MediSure. He works for Saber Management, an insurance agency.

Deborah Willis is also a licensed agent who works for Saber Management. She is currently only selling property & casualty insurance for SafeCare.

All of these entities: Max, Deborah, Saber Management, SafeCare, and MediSure, are producers. As we go through the next few topics, you will see how we can create and configure a producer, and designate their place in the hierarchy.

Brokers versus Producers

Think about some of the interactions with your own insurance agent. You probably know what carrier you use for most of your policies, and even refer to your agent as a representative of that carrier. Some examples of major carriers of auto insurance in the United States are Farmers, State Farm, or Prudential, while in Europe or Latin America you may be familiar with Allianz or AXA. You may have also noticed that if you ask your agent about a new type of policy, such as adding an umbrella or motorcycle policy, he or she may recommend a policy from a completely different carrier. This happens because your agent knows that one carrier may not be the best solution for all types of policies, so they are authorized to sell policies from multiple carriers.

Why is this important? It means the relationship between carriers and agents can be quite complex. APMe manages this by replacing a single entity, the Agent, with three distinct but interrelated entities: the Producer, the Broker, and the Vendor.

As we just saw, a Producer is any entity that sells the carrier’s products, and therefore needs to have the appropriate credentials. These may include licenses, appointments, or continuing education credits. The link between a broker and a producer is done through the L&C Number field on the main broker screen.

A Broker in APM is the entity that is assigned to a customer as part of the Book of Business functionality; in other words, when they sell a policy. The Broker screens and fields may be labelled as "Producer..." but the screen is actually tied to the Broker entity in APM.

Note that the broker and the producer may or may not be the same person or corporate entity, but in APM they are stored as separate entities.

The Vendor (often called Payee or Pay Entity) is the entity which receives the payment voucher. The Broker and Vendor may or may not be the same corporate entity in the real world; similarly, in APMe they can be the same or separate entities.

There are numerous ways these three entities can be related to each other. For example, a single individual can be a broker, producer and vendor. A vendor can be related to a single broker, or related to multiple brokers.

To clarify, let’s go back to the example of Max Martinez. Max is a producer, because he has the qualifications to sell products. He is also a broker, because he has a relationship with the customers to whom he is selling these products. Finally, he is a vendor, because he receives a payment for these sales.

In contrast, Saber Management is only a vendor, because the agency only receives payment.

Note
That's not to say that Saber Management couldn't also be a producer or broker, but in this case the agent only plays the role of the payee/vendor.

How do you know if the record you are viewing is a producer or a broker, if they can be one and the same? The easiest way to tell is the L&C Number field on the record. This field is the unique identifier for the producer. If the producer and broker are the same, the L&C Number will be the same as the Producer ID. If the producer and broker are not the same, the L&C Number will be different.

Select the link 'Brokers, Producers and Vendors' to get more information.

The Producer record shows basic information about each producer, including status, producer type, and contact information.

To view the broker information, select the Producer Details tab at the top of the form.

The details show information such as effective date, business type, and producer status. You can also add or view the upline producer, which represents the entity above the current producer in the hierarchy.

Configuring the Broker Entry

Before creating the producer record, you can use the Broker Entry Configuration screen to select which entities to include and which are required. For example, you may require the user to include credential information when creating the producer record. Alternatively, if this information is not required, the user can go back and add credentials after the producer record has been saved.

This configuration screen consists of a set of related entities that can be populated when creating a producer. For each of these entities, you can choose to set "Enable Creation" to No, Yes, or Always. If you select Always, you will be required to create this entity while creating the producer.

For example, you may wish to require the license information to be entered when the producer is created. To do so, find the section labelled Enable Producer License Creation and select Alwaysin the dropdown field.

Keep in mind that this configuration only applies to the creation of new producer records. You can always add license information to an existing producer.

To configure producer entry requirements:

  • Use the Search field to find Broker Entry Configuration

OR

  • Go to Administrator- Commission Settings- Broker Entry Configuration
  • Make any required changes and select Save

Exercise: Configure the Broker Entry Settings

In this exercise, you will use Broker Entry Configuration to customize the requirements for creating a new producer.

Prerequisites

Steps

  1. Configure the Broker Entry Settings

    1. From the Administrator portal, select Commission Settings – Broker Entry Configuration.

    2. Set Activate Records toYes.

    3. Set the following choices:

      • Enable Broker Address Creation =Always.
      • Enable Vendor Creation =Always.
      • Enable Producer Creation =Always.
      • Enable Producer License Creation =Yes.
      • Enable Producer Appointment Creation =Yes.
      • Enable Producer Insurance Creation =Yes.
      • Enable Broker Detail Creation =Checked .
        • Broker Entry Detail Creation =1.
        • Required Broker Detail Entry Rows =0(no entries are required)
      • Enable Broker Vendor Creation = Yes.
        • Broker Vendor Entry Rows = 1.
        • Required Broker Vendor Entry Rows = 1(one entry is required)
      • Enable Education Creation = Checked.
        • Education Entry Rows = 1.
    4. Select Save.

Creating a Producer Record

Most of the time, producers and producer data will originate from source systems using data integration methods. We will cover this in Unit 5. However, in some cases, you will need to create or maintain producer data in the user interface.

Producers can be created from the Manager portal under Producers - Producers.

SEN Walkthrough: Create a Producer Record

Exercise: Create Producer Records

In this exercise, we will create two producer records: one for the Saber Management Agency, and one for Max Martinez, one of the agents with Saber Management.

Prerequisites

Steps

  1. Create a new producer record for the Saber Management Agency.

    1. From the Manager Portal, select Producers - Agents.

    2. Select Add (+).

    3. Enter or select the following details:

      • Individual: Unchecked
      • Agent ID: SAB-001
      • Broker Type: Agency
      • Last Name: Saber Management
      • Writing Producer: Unchecked
  2. Enter the address information.

    1. Scroll to the Address section.

    2. Enter or select the following details:

      • Address 1: 1234 Pomeroy Avenue
      • City: Irvine
      • State: California
      • Zip: 92613
  3. Add the vendor information for the producer.

    1. Scroll to the Broker Vendor Entry section.

    2. Enter the Effective Date 1/1/2022.

    3. Leave the Vendor ID blank.

    4. Select OK.

    5. Select Save.

  4. Create a new producer record for Max Martinez.

    1. From the Manager portal, select Producers – Agents.

    2. Select Add (+).

    3. Enter or select the following details:

      • Individual: Checked
      • Producer ID: MM-001
      • Producer Type: Agent
      • Full Name: Max Martinez
      • Birth Date: 4/10/2012
      • Hire Date: 11/1/2012
      • Schedule ID: STANDARD
  5. Enter the address information.

    1. Check the Create Broker Address? Box.

    2. Scroll to the Broker Address Entry section and enter or select the following details:

      • Address 1: 2965 St. James Blvd
      • City: Irvine
      • State: California
      • ZIP: 92612
    3. Scroll to the Broker Vendor Entry section.

    4. Enter the Effective Date 01/01/2022.

    5. Leave the Vendor ID blank.

    6. Select OK.

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