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The insurance industry is evolving, and for carriers and MGAs, outdated appointment processes can slow down operations, create unnecessary costs, and hinder efficiency. Just-in-time (JIT) appointments provide a cost-effective alternative, allowing insurers to delay producer appointments until they submit business. In this article, we explore how JIT appointments work, their benefits, best practices for implementation, and why they are becoming a popular approach for carriers looking to streamline compliance and reduce costs.
What Are Just-in-Time Appointments?
Just-in-time (JIT) appointments is a streamlined carrier appointment process that enables insurance carriers to appoint producers only when they submit business (more on this in a moment), rather than preemptively appointing them. This approach reduces unnecessary administrative burdens, reduces costs for appointment fees, and improves efficiency in producer management.
The Evolution of Just-in-Time Appointments
Historically, insurance carriers required producers to be fully appointed before conducting business, leading to delays and high costs. As regulatory frameworks evolved, many states permitted JIT appointments, allowing insurers to wait until a producer submits business before initiating the appointment process. This shift has enabled insurance companies and MGAs to better manage resources and compliance.
Benefits of Just-in-Time Appointments
Faster Processing & Reduced Administrative Burden
JIT appointments eliminate unnecessary pre-appointment processes, allowing carriers to quickly onboard producers only when necessary. This results in:
- Faster turnaround times
- Reduced paperwork
- Lower administrative costs
Improved Compliance & Accuracy
By leveraging digital tools and automation, JIT appointments ensure compliance with regulatory requirements while minimizing human errors. Real-time data exchange between NIPR and insurance license management software facilitates instant verification, reducing risks associated with non-compliance.
Cost Savings & Financial Efficiency
Since many states allow insurers to delay paying producer appointment fees until business is written, JIT appointments help manage financial resources more effectively. This allows carriers to allocate funds where they are most needed and avoid unnecessary expenses.
Think about it. We’re all familiar with the 80:20 rule. It’s not a precise, scientific ratio. But it does capture the essence of sales activity. Namely, that 80% of sales will come from 20% of the salespeople (with many selling nothing at all).
Now, appointment costs vary widely, from $2/appointment for residents in Kansas to $70/appointment for non-residents in Maine, to $120/appointment for non-residents in Kentucky.
Let’s say you appoint an agency with 100 non-Kentucky-resident licensed producers, 80 of whom will sell little to nothing. Appointing those non-productive agents will cost you up to $9,600!
But wait, Kentucky allows JIT appointments. Appointments in Kentucky must be submitted either:
- Within 15 days of when the date the agent/agency contract is executed; or
- Within 15 days of the first piece of business being submitted to the carrier
This changes things dramatically. And most states that allow JIT appointments have similar approaches – allowing anywhere from 15 to 60 days to submit the appointment.
Roll that out across multiple states, for an agency needing 500 or 1000 appointments, and you don’t have to be a CFO to understand the value of adopting JIT appointments.
(Please note: All information in the article was up to date at the time of publication, but please check with each state’s Department of Insurance before mapping out your own JIT appointment strategy.)
How Just-in-Time Appointments Work
Keep in mind not all states require appointments at all, and not all states allow JIT appointments. For instance, FL, ID, NY, SC, KS, VT, WA, and WV allow JIT appointments while CO, ME, PA, and UT do not. Then there are states like CA that allow JIT for some lines of authority, but not others. And several states allow producers affiliated with an appointed agency to work under the agency’s appointment and don’t require individuals to be appointed in that case.
In states that allow JIT appointments, the process will look something like this:
- Producer Licensing & Onboarding – The producer obtains the necessary licensing in their state of operation.
- Business Submission – The producer submits an application for a client.
- Real-Time Compliance Checks – Digital platforms verify producer credentials, ensuring they meet regulatory requirements.
- Carrier Appointment Activation – If the producer meets all criteria, the insurance carrier finalizes the appointment, often in real-time.
- Fee Payment & Record Keeping – The carrier pays the required appointment fee at the time of activation, ensuring compliance while reducing costs.
Best Practices & Challenges in Implementing JIT Appointments
Many forward-thinking carriers and MGAs have already implemented JIT appointments. But there are plenty who have not yet adapted their business and workflow processes to embrace this time and cost saving practice. If you’re considering adopting JIT appointments, be mindful of these challenges and best practices:
Challenges
- Technology Adoption – Some carriers may struggle with integrating digital platforms for real-time appointment processing.
- Change Management – Shifting from traditional appointment processes to JIT requires training and strategic implementation.
Best Practices
- Invest in a Robust Carrier Appointment System – Utilize compliance software that automates and streamlines JIT appointments.
- Ensure Regulatory Compliance – Work with a solution that keeps up with state-specific regulations.
- Educate Stakeholders – Provide training for producers, carrier representatives, and compliance teams.
Future Outlook of Just-in-Time Appointments
As technology continues to evolve, just-in-time insurance appointment systems will become more sophisticated. Innovations such as AI-driven compliance checks and blockchain for credential verification are likely to enhance efficiency further.
Embrace the Future of Insurance Appointments
Just-in-time appointments offer a strategic advantage by reducing administrative burdens, ensuring compliance, and improving overall efficiency and profitability. Insurers can streamline producer onboarding and remain competitive by adopting a modern carrier appointment system
Get Started Today! 3H Compliance Group offers industry-leading solutions for insurance compliance. Learn how our Creative Compliance Hub can help streamline your operations and ensure compliance with minimal hassle.
