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Agency-Carrier Technology Agreements

What Every Agency Principal Needs to Know

We have learned from our own agency’s experience that agency principals and managers should be a lot more vigilant about the agency-carrier technology agreements that their agencies are signing. Moreover, it is extremely important for agency leaders to bring up these issues and press for these improvements when they meet with carrier executives or participate in agency advisory councils. A few carriers have already acted to address some of these problems—which is encouraging—but unfortunately most have not.
It is important to set the stage as to why these agreements have become a lot more significant to agencies. In today’s business environment, one of the key factors influencing an independent agency’s financial success—whether the agency is large or small—is a constant focus on operational efficiency. Effective use of the carrier’s web-based technology tools, especially when accessed in real-time through the agency management system, is an important way to improve efficiency and increase profitability.
Carriers are also encouraging agencies to rely more and more on their web-based tools, which include on-line rating & policy issuance, on-line rating manuals & marketing information, billing and claims status inquiries, and electronic copies of policies and other policy related documents. In fact, more and more carriers are requiring agencies to use these tools because they are no longer sending hard copies of policies, no longer providing phone support for billing inquiries, or allowing agencies to send endorsement requests via mail or fax.
In short, both agencies and carriers agree that the use of carrier provided electronic information whether accessed through the agency management system or from the carrier’s website can be very beneficial. And, many agencies have become more reliant on this carrier supplied electronic information, pulling the latest information when needed from the carrier, rather than storing it in the agency’s system.
At the same time, many of the carriers have required their agencies to sign an agency-carrier technology agreement, or click on an electronic acceptance option, in order to have access to the website. Agency principals and managers need to make sure only authorized personnel commit the agency to such agreements, and that the agency leadership has read these documents closely.
One of my greatest concerns is that only a few carriers explicitly commit to give the agency continuing rights to access the electronic information upon which the agency is increasingly relying. Almost every agency-carrier technology agreement I have read to-date, whether it be from a national carrier or regional carrier, contains a clause that reads something like: “We reserve the right to modify, limit, or eliminate your access to the Website/Network or any Website/Network features at any time, for any reason.”
Now you might say, my carrier would never deny my agency access to the website as long as we have a valid business contract in place. If that is the case, then why does the technology contract contain such a broad provision? And, what rights to continuing access will you have, if either you or the carrier decides to terminate the relationship? Most agreements today terminate the agency’s access to the carrier website upon termination of the underlying agency contract. If a carrier terminates your access, how do you deal with the fact that you no longer have paper copies of the declarations pages and policy forms, and no longer have access to that information from the carrier electronically?
You also need to ascertain your continuing rights to access information in agent of record letter situations, where you are no longer the agent of record, but need to access information relating to the time period when you were the agent of record. The policy of some carriers is to cut off continuing access to the insured’s former agent, even though the agent continues to be in good standing with the carrier.
The issues raised in these agreements are extremely important to our agency, as we look to become as efficient as possible through the use of technology. When the Agents Council for Technology published its 2004 report, “Guidelines for Effective Agent-Carrier Technology Agreements”, we found the document to be a very useful tool in identifying the priority issues for our agency to address with our carriers. These issues are:
  1. The agency-carrier technology contract should in no way supercede the primary agency-carrier contract, especially with respect to the indemnification provisions.
  2. Carriers need to provide the agency full website access & electronic access to policy information for at least seven years, as long as the primary agency-carrier contract is in force. 
  3. In the case the agency-carrier contract is terminated, the agency needs to have limited access to the website for the historical policy information for seven years.
  4. While agencies should have the obligation to maintain password security for their employees, carriers should have a parallel obligation to carry out their responsibilities with regard to agency password security. A good example would be the carrier obligation to only re-set passwords or provide new passwords to authorized agency staff. Another would be to immediately act on agency requests to turn off particular employees and to check to make sure this action has been promptly taken. (This relates to situations where such changes are made by the carrier and not directly by the agency administrator.)
All of these items would seem to be very basic and are consistent with the carriers’ desire to have agencies rely on their website and electronic information, so that they can “turn off the policy paper” to their agents.
Every year in the fourth quarter, our agency leadership holds meetings with our primary carriers to discuss the year-end results and to review the plans for the upcoming year. During our 2004 meetings, we discussed our four priority agency-carrier technology contract issues with our carriers. At the end of this series of meetings, based upon the discussions we had, we put together a contract addendum document covering these issues. We sent this document out this past summer to many of our carriers and asked them to sign it. To-date none has done so.
We now are going through our 2005 carrier year-end meetings. We are again discussing these technology agreement concerns in every meeting. We are getting some interest, but we have yet to receive a modified carrier technology agreement or have any carrier sign our addendum. In many cases, the carrier business teams do not even know what is written in these technology contracts.
We urge carriers to “grab the ball” and address these agency concerns, as a few carriers have already begun to do. We also need the help of every agency—no matter how large or small—in articulating these concerns to the carriers at every opportunity. If enough agents do so, we will convince the carriers that these agreements should be amended to further their larger business objectives to encourage greater agency usage of their websites and electronic technology tools and to “turn off the policy paper” sent to their agents. You will find the ACT report to be a great resource in reviewing these issues in greater depth. The report had broad support from the carrier as well as the agent representatives to ACT when it was adopted. The report can be found at by clicking on the “Technology Reports” icon.
Cyndy Smith is Vice President, Director of Technology at Haylor, Freyer and Coon, Inc., an independently owned independent agency based in Syracuse, New York, with 250 employees in 13 locations. Cyndy also has been heavily involved in several industry initiatives to improve technologies and workflows for independent agents and brokers. She participates actively in ACT, AUGIE, ACORD, and the AMS Users Group. Cyndy can be reached at She prepared this article for the Agents Council for Technology (ACT) which is part of the Independent Insurance Agents & Brokers of America. For more information about ACT, contact Jeff Yates, ACT’s Executive Director. This article reflects the views of the author and should not be construed as an official statement by ACT.
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Alexandria VA 22314
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fax: 703.683.7556

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