The agent’s impact on underwriting
Our client’s well-being and our livelihood depends on us not just filling out applications but ultimately getting them through the underwriting process and as such we take the topic very seriously. There are no points for trying. It can be enormously irritating for the client who after a sometimes lengthy process of researching and picking a plan is rejected and it is equally disheartening for us because our efforts are all for naught as well. As a consequence, we have learned just about every trick in the book, sometimes the hard way, on how to get things done.
Agents can be their own worst enemy
Underwriting is one of those intangibles that separate the amateurs from the pros and we take a lot of pride in what we do. We are contracted with perhaps 50 insurance carriers all of which have different applications and underwriting requirements. They also have the final decision on whether someone can be insured so it behooves us to get good at it.
Long before the underwriter sees an application we have already gone through a lengthy process with the client which is known in the industry as field underwriting. This means more than doing the obvious things such as checking all the boxes and properly filling in the data. Whenever we can, we try to draw a picture or tell a story with a beginning, middle, and end so the person making the final decision fully understands the situation and we try to avoid surprises.
It is not just the agent who goes through the process. We always prepare the client by being realistic and fully explaining what to expect. Frequently there is follow up information needed or there are modifications and it is much harder when this is not anticipated by either the agent or the client.
Focusing on the things we can control
As agents, we are in the middle. We have a fiduciary responsibility to help the client while having only limited authority to write applications with the carriers who have the final say regarding approval. This means we get pushed and pulled. We are obligated to fully disclose all relevant information we are aware of and must obey all insurance laws of which there are many.
The one thing we have full control of is the quality of the applications we submit. Before an app leaves our office we have thoroughly ‘scrubbed’ it and forewarned the people who are receiving it of any issues that might be in the offing. Things sometimes go sideways but that is why we track it and stay in constant communication.
Part of our job is to politely drive the process forward and to prevent applications from dying in underwriting. Sometimes there is just one or two things holding up the final decision and it can be agonizing when we have to roll an application over to the following month or we are past the proposed effective date with no decision from the carrier. To combat this we try to get applications in as early as possible but the client always controls the timing and frequently things don’t go according to schedule.
We Cherish our Relationship with our Carriers
We take a sense of pride in not just doing a good job for our clients but we also try to polish our bona fides with the carriers we represent which can really help in a pinch. They have a dog in the fight too and any agent who has been in the business for any length of time develops a reputation with the powers that be which becomes either a blessing or a curse. In time it becomes clear which agents are upfront and honest vs. the ones who are sloppy or try to pull fast ones. To keep us at arm’s length, we usually do not have direct access with the underwriters. Even if we don’t know who the person making the final decision is, they know us, and once burned they are not quick to forget. Knowing this, we make every effort to cultivate our relationship and we start by being careful what we submit.
On occasions where the application is questionable or we are having trouble complying with the requirements we try to get the benefit of the doubt and this is helped by having a high trust working relationship with those higher up the food chain. When all else fails we will ask for a favor but this is a lot easier if the agent has not abused the relationship. This is also one more reason why we are careful about scrubbing our applications. By always submitting neat and tidy work the team surrounding the UW does not have to be bothered by things we should have done allowing everyone to focus on the more critical issues. As a rule, we want our business to go to the top of the stack.
It is trickier than it looks
Working in a post-ACA world, many applications are no longer subject to medical underwriting. However, there are now more financial underwriting requirements such as reporting income which can be even more sensitive than questions about someone’s health! The carriers have their own way of cherry picking so even if they cannot exclude someone or a group on the basis of risk; they can use participation requirements, open enrollments, and deadlines so we still have to be on the ball.
In a sense, everything that needs approval from the insurance carrier is a form of underwriting. This includes recertifications, Plan upgrades / downgrades, Appeals, Plan Additions, New Enrollments, and COBRA elections. So being diligent is its own reward because we don’t want to lose business on the back end after working so hard on the front.
Then there are applications such as individual life insurance which are underwritten based on mortality rather than morbidity. This means there are a whole set of other questions and conditions they are looking for including aviation questionnaires, paramedic exams, and blood tests. The last life insurance policy I wrote had over 28 pages!!!
Electronic enrollments were supposed to make things easier but those are “fault-tolerant” or fault-intolerant as we like to say and will not progress unless every i is dotted and t crossed. They are also harder to nuance which is what we as experienced agents have learned to do.
When things go sideways
Handling approvals and declinations is one of the most sensitive parts of our business, especially the declinations, and we always do so with tact and diplomacy. It is important to be fully candid with the client so we can determine their next course of action. Whenever possible, we try to recommend a second course of action and not just offer our condolences. This is also why we always advise the client to keep their existing policy in force until we have confirmed the approval.
We are not always privy why the client was declined, especially if it is for medical reasons. In these circumstances, what we will typically do is ask the client for a copy of the declination letter before appealing or applying with another carrier to avoid falling into the same pit again. Quite often this is the point where we find out the real reason. Irrespective, we try to be factual and not judgmental.
Relentless Follow Up
There is a standing joke in our office that the only time I touch an application is to sign it. While that sounds funny (or cynical) it has some truth. I have a staff of highly competent people around me that I could not function without. We also work very closely with our General Agent partners who are critically important to us. It is always better to have more than one set of eyes looking at things.
Thank you for making it to the end of my letter. This one was more esoteric than usual but I hope it added value due to the importance of the subject. Time to go for now and feel free to contact me if you have any questions or know someone who does.
Peace & Love,
John Helms & Associates Insurance Brokers
2940 Camino Diablo Ste. 205
Walnut Creek, CA 94597 (925) 287-8600
California Life License # 0702479
With us, You’re a big fish in a small pond.