Annual Background Checks

[walthamny]

I saw this on the Ohio National Email today.

Ohio National will begin to conduct annual background checks on active agents beginning in October 2017. As referenced in the Ohio National Business Practice Guide (Section 2.10 Personal Conduct), agents have a continuing obligation to disclose to the company events and occurrences which affect their personal history disclosure forms, such as criminal charges, foreclosures, liens, etc.

I know captive companies conduct or at least make the agent sign a form saying that there are no changes, this is the first time as an independent I have seen them do it. I got no issues with it, I think it is a good idea to see if any independent agents have something criminal in the background, because it seemed like they only conducted background checks at the initial licensing and nothing after that. Let see if other companies also follow through. One of the unseen side effects of DOL.

 

[scagnt83]

One of the unseen side effects of DOL.

Maybe, maybe not.

SC just put in new regs this year about getting re-fingerprinted (and verified by FBI database) every license renewal.

Has nothing to do with DOL regs. Everything to do with a serial killer rapist real estate agent who kept his license despite getting put on the offenders registry.

The big question was "how did this man still have a real estate license". The case made national headlines.

He owned his own business and had no outside affiliations. But insurance carriers can be held liable for the actions of their appointed agents. So perhaps this is a safety measure until all states require mandatory background checks at license renewal.

I doubt it has anything to do with the DOL regs. IARs dont have to get yearly background checks do they? At least not industry wide to my knowledge.

 

[walthamny]

I have different opinion. Of course, it is clouded by personal experience. My ex-wife is a Dentist licensed in Florida. She has warrant issued in Massachussetts but Florida licensing has no issues with that. She was forging my signature on her dental school loans.

I once went to Mass society of CPA's about someone who is faking a CPA license. They did not care and they would only take action if the DA did something. The DA's in Massachussetts dont have time or resources to prosecute fake CPA licenses. He was also saying that he completed all the CFP courses and that he was practically a CFP already. Of course, I knew that CPA's are exempt from the education requirement for CFP so that's how I caught him.

The example you give is about a sex offender who was 15 at the time of conviction and failed to register later on and lied on the real estate licensing application. Later on he probably could not get a job so kept up the lie. And the people who are in charge of tracking sex offenders after they leave jail obviously were incompetent.

The SEC director in Boston had finally agreed that Madoff was a fraud in 2005, but he could not do anything as Madoff was not in his region.

So I have very little confidence in licensing boards doing much. In many ways, I support frequent background checks. I think they can catch some bad apples and if done correctly build more confidence in the general public.

 

[VolAgent]

The punishment you will receive is inversely proportionate to your income and net worth.

I'm sure someone will quickly tell me how wrong I am.

 

[pfg1]

Yep, I saw that on ONL as well. First for me.

 

[ginniferhadley]

What about DWI? Does that come up in background checks as well?

 

[scagnt83]

I have different opinion. Of course, it is clouded by personal experience. My ex-wife.....
.....

She was forging my signature on her dental school loans.

......

The example you give is about a sex offender who was 15 at the time of conviction and failed to register later on and lied on the real estate licensing application. Later on he probably could not get a job so kept up the lie. And the people who are in charge of tracking sex offenders after they leave jail obviously were incompetent.

............

So I have very little confidence in licensing boards doing much. In many ways, I support frequent background checks. I think they can catch some bad apples and if done correctly build more confidence in the general public.

The example I gave was the exact reason for the change in SC And he would have lost his license had the new background check law been instituted sooner.


The guy didnt lie initially if I remember correctly. When he first got licensed they didnt ask the same questions or do background checks at all. Later on, he lied when renewing his license.

And there was no incompetence on the tracking of sex offenders in that situation. Professional licenses use a "self-reporting" system for infractions after the initial issue of the license. Cops dont report sex offender status to jobs or regulatory bodies. Same with DUIs or any other crime. Its the Licensed Professional who is required to report it...

But that is the issue. Self-reporting only works with honest people. Criminals dont self-report themselves. Hence the reason for enhanced background checks.

---------

And generally speaking, I agree that regulators do not care. In SC, agents cant report other agents who are participating in fraud... only consumers can.... wtf?

However, regulators do care when they get put in the spotlight. Which is what happened this year in SC.

But I will tell you who does care.... and thats Insurance Carriers. They in no way want to be affiliated with criminals. And that has nothing to do with DOL regs. ON has a strong presence here in SC. Id bet they saw this loophole and decided to fix it.

 

[Ektachrome]

There is a bad side to annual background checks too. One of the GAs I do business with told me he loses Brokers every year. They start with "ax murderers" and progress to people with an alimony dispute. Then they get to people with unpaid parking tickets and untreated athlete's foot. The real purpose is to lower their cost of paying renewals. There is testing for each kind of infraction against their database so they can decide which items can be added based on how much money in renewal payouts they want to save. Will they tell you they are doing this? No, they won't.

 

[scagnt83]

There is a bad side to annual background checks too. One of the GAs I do business with told me he loses Brokers every year. They start with "ax murderers" and progress to people with an alimony dispute. Then they get to people with unpaid parking tickets and untreated athlete's foot. The real purpose is to lower their cost of paying renewals.

Serious Crimes and Debts... find a new industry if you dont like those being knockout issues.

If they get to the point of parking tickets and athletes foot then I might agree with you.

If an agent is in violation of their state license or contract with the insurer, then I have no issue with them being cut. Thats how it should be.

Perhaps some GAs do this to limit recurring expenses. But that makes no sense for an agent that is producing. Its normal to cut non-producing agents to limit renewal expenses. But not producing agents... thats a loss for the GA or Carrier. I also doubt that the cost of renewal is more than the cost of running background checks on every agent (it costs man hours in addition to the hard cost).

 

[walthamny]

Actually, there is little incentive to fire independent agents for small crimes in the hopes of not paying them renewals. They would just go somewhere else and replace all the business. You can fire an agent who sells Medical supplements over an unpaid parking ticket only to see the whole business get replaced. Now captives have a different take. I have seen NYL fire an agent with 28 years saying his files were a mess. He was suing to get his files back. There is also reverse discrimination in this business. If you are a minority and doing well in your community, when they fire you to stop paying renewals, all that business will find another agent who speaks their language and switch the business.

I generally got no problem with frequent background checks, if they catch a life agent forging documents on his auto insurance policy claim, fire him. Tax fraud, I will say fire him. Unpaid alimony, I am not so sure. Unpaid car repair bill thats in dispute, who cares.