ACT Wants Improved Tech Agreements
By Mark E. Ruquet
NU Online News Service, May 13, 9:56 a.m. EDT?Technology contracts between agents and carriers have not kept up with advances in the field and need to be revised, according to an Agents Council for Technology report that recommends areas for updating.[@@]
ACT, the technology advocate group of independent agents, brokers and insurance companies sponsored by the Alexandria, Va.-based Independent Insurance Agents & Brokers of America, put out a report analyzing the current language of agent-carrier technology agreements.
The study by a committee comprised of agents, brokers and carrier representatives found that the agreements are "all over the lot" and "have not kept up with the new electronic relationships."
"What has been identified [in this report] is that as technology has become an increasingly integral part of the operating relationship, we find that there has been an absence of formal recognition of the need for contractual language agreements between the two parties," said Ed Higgins, principal of Thousand Island Agency in Clayton, N.Y., and past-chairman of ACT.
"It's not a matter that something is broken, it's just that, for the most part, this is a matter that has been unaddressed," said Mr. Clayton.
The concern, the report said, is that the agreements do not reflect the true nature of the agent-carrier technology relationship today and could pose problems in the future if not updated and corrected.
Among some of the recommendations in the report:
? Agents should manage technology access to limit it to current employees and authorized users.
? Better language is needed to define what electronic information can be shared with customers and other third parties.
? In the case of terminated relationships, agents should have limited access to electronic data for legal or administrative use.
? Warranties and indemnification agreements should be updated so that agents and carriers are responsible for protecting their own systems but commit to using their best efforts to correct problems affecting the other party.
Jeff Yates, ACT's executive director, said in a statement that data on the carrier's Web site should be just as reliable as paper transactions or phone calls to a carrier's representative. Companies should also indemnify agency losses caused by inaccurate information obtained over the Internet from the carrier's site, he added.
The report, available through IIABA's Web site (www.independentagent.com/act), is not a legal analysis, the report stipulated, "but a tool for agents and carriers to use to identify" issues covering these agreements.
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