Co-Sourcing Regulatory Compliance, Product Development and Form Filings
At First Consulting & Administration, Inc., our flexible approach to regulatory assistance including product development, forms filings and other compliance consulting is much better described not as outsourcing - but as Co-Sourcing.
With Co-Sourcing the insurer maintains a role in the process at whatever level is most appropriate for the specific company and project. In some cases, the insurer may only provide required officer signatures with First Consulting completing all other functions. For other projects, First Consulting may only perform specific sub-tasks, such as the completion of a SERFF filing, while the insurer handles all product development and answers all objections. The point is, with Co-Sourcing, First Consulting provides the specific services and tasks needed and shares with the insurer's staff in the completion of the project or function.
What is the difference between Outsourcing and Co-Sourcing?
Outsourcing transfers the entire responsibility for the completion of certain of the insurer's functions to an outside party, vendor, or consultant.
Co-Sourcing involves both the insurer's internal staff and the outside vendor or consultant in the completion of selected company functions.
In some situations, outsourcing of certain tasks or functions may be the best alternative. An example might be when it is necessary to gather information without revealing the insurance company's identity. However, outsourcing is not without its challenges. Consider a few of the issues that may be associated with outsourcing compliance functions.
At times, the insurer's priorities may not be clearly communicated to and understood by the outside consultant.
An outside consultant may make decisions that, while the decisions are sound and based upon what the consultant believes is in the insurer's best interest, are different decisions than the insurer's executives and managers would have made.
Since completion of the project is totally in the hands of the consultant the insurer gives up control.
Since insurer personnel are not involved when a project is outsourced, little, if any knowledge is retained by the insurer.
The challenges associated with outsourcing and other issues often create a stumbling block in many insurers who might otherwise consider looking for third party assistance with compliance and regulatory matters. However, these same organizations often struggle with the challenges of relying solely on in-house provisioning of such functions.
The demands upon the regulatory and compliance or product filing staff is rarely uniform. Management is faced with the difficult choice of staffing for peak demand, and thus over-staffing, or staffing at some lower level, and thereby ceding a degree of response and service levels.
Because many regulatory and compliance functions are infrequent, and may even occur only once a year or less, in-house operations often lack the economies of scale to develop the in-depth knowledge and streamlined methods.
Because of limited opportunities, in-house regulatory and compliance associates may not develop the relationships with regulatory staffs that personnel of a third party, performing more limited tasks on behalf of numerous clients, are able to develop.
The regulatory and compliance functions of an insurance company require specific knowledge and experience. Often the departure of a key in-house staff member can have devastating results.
The Co-Sourcing Alternative
Co-Sourcing of regulatory and compliance functions with First Consulting can address many of the challenges, while offering additional benefits unavailable with either of the unilateral approaches (in-house and outsourcing). Briefly stated, Co-Sourcing with First Consulting involves the deployment of both in-house and outsourced resources in a manner that effectively leverages expertise and resources. The actual split between in-house and First Consulting resources is totally flexible. Subject only to third-party requirements, such as the fact that once a SERFF filing is started all responses to a regulator must come from the same party; the actual combination can be almost infinitely varied for each client and project.
Co-Sourcing with First Consulting allows an insurer's compliance professionals to maximize their efforts by delegating specific sub-parts of the total function. Insurer personnel maintain control of all projects.
Co-Sourcing with First Consulting can improve quality. Insurer personnel can function as the reviewers and not be the doers reviewing their own work.
Co-Sourcing with First Consulting also resolves the staffing level dilemma. After a working relationship is established, First Consulting is quickly able to respond to an insurer's unique needs and requirements. With First Consulting available to assist with peak workloads, insurers do not need to choose between staffing for such situations or missing opportunities because of compliance, product development or product filings backlogs.
Since insurer personnel are involved in any project that is co-sourced with First Consulting, it is easy for the insurer's staff to learn as the work progresses. Knowledge does not remain solely with an outside consultant, as it may when work is outsourced. Equally important, Co-Sourcing with First Consulting can provide the specialized knowledge that is needed to complete a specific project that the insurer may not use again.
Co-Sourcing regulatory compliance product development and forms filings with First Consulting offers benefits that cannot be obtained from any other approach. Co-Sourcing is flexible so it can be customized to the specific needs of each insurance company and project. Discover the synergies and new capabilities that result from Co-sourcing with First Consulting.
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