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An
Independent Assessor’s IMSA Journey
(Reprint
from NAILBA, 1998) Kenneth J. Kalis, CLU, certified IMSA assessor
and President of KJKC
IMSA,
like life, is what you make it. Some see it as a bunch of
hoops to jump through to stay competitive with the pack. Others
see it as means of cleaning up the image of life insurers,
recently tarnished by scandals. Still others see it as a golden
opportunity to strengthen the ethical and marketing culture
of their company and solidify customer relationships.
Of course,
there is truth in each one of these. Most of us come to see
IMSA in one light and then proceed to deeper understandings.
I came to IMSA after a 21-year career with Prudential, then,
the nation’s largest life insurer. My career was spent entirely
working in individual insurance operations, and was capped
by 5-year stint looking at process-improvement as a way of
building customer relationships.
It was
from this context that I first began focusing on ethical market
conduct in the insurance industry in 1994. At that time I
had the opportunity to give some recommendations to the ACLI’s
CEO panel charged with looking at the ethical market conduct
situation. I felt that the approach was sound but recommended
some changes. One was a "live" field test of the questionnaire
with some willing companies. Another was a greater sensitivity
to the different types of distribution systems companies used.
I was
then asked to participate in the field test for three of the
companies. This involved visiting the companies and asking
how they would answer the questions. This was a great exercise
in diversity. The first company I visited was a direct marketer.
For them, the question dealing with sales illustrations was
too narrow. It had to be broadened to include all sales materials
not simply illustrations.
The second
company marketed its products through over 100,000 independent
agents and brokers. Here it became clear that the communication
with and the monitoring of such a large and independent field
force required methods and policies that were significantly
different from those that would be used with a career agency
distribution system.
The third
company was primarily a career agency company. In fact, it
operated through a good number of independent agents as well.
This meant that there would be need to be different assessment
standards within the same company when there were different
distribution channels. This, of course, is how many companies
do operate, and it added another dimension to the process
in terms of assessment criteria.
The recommendations
to the ACLI from the field pilot were that changes needed
to be made to the questionnaire to broaden it and include
indicators that would be appropriate for these different marketing
systems. The concept of continuous improvement was also strongly
endorsed, so that IMSA would not just serve as a one-time
crisis management tool but become a vehicle for building public
trust and a tool for fostering ethical marketing. Virtually
all of these recommendations were accepted, and I thought
my IMSA journey was nearly over. Actually, it had just begun.
Support
for IMSA (as yet un-named) was building, and I went to work
developing an IMSA Self-Assessment seminar for delivery on-site
to companies. I first delivered this one-day seminar to 18
people from a group of midwestern companies in June of 1996,
launching the companies’ IMSA team training and my IMSA consulting
career.
That was
around the same time that I created a quarterly newsletter
devoted exclusively to IMSA issues. Soon after I began relationships
with two large eastern mutuals, and it became clear that IMSA
was going to grow.
These
were exciting days for me, and I was learning more and more
about how different companies approached and managed ethical
market conduct issues. Fortunately, I was able to put some
of these experiences to good use on IMSA’s Assessment Handbook
and Training teams. I was pleased that there was some representation
on these teams of companies that marketed through brokers
and independent agents. Two or three very large brokerage
companies have been supporting IMSA from its earliest stages,
and they continue to be outspoken proponents in the public
arena of this approach to strengthen ethical market conduct
within the brokerage community.
While
I had some experience with brokerage and direct response marketing,
most of my experience had been with career agents. I felt
the need to create a widespread team of life insurance and
annuity professionals to help conduct the IMSA assessments.
Through a national recruitment drive, I identified only people
who had the life insurance experience necessary to become
IMSA certified assessors. Then I trained them in how to do
an assessment with an eye towards continuous improvement and
worked with them in three or four person teams to conduct
independent assessments.
But there
was also a need to work with companies on their self-assessments.
One great opportunity arose in March of 1997 when a large
southern company asked me to facilitate the self-assessment
of their independent marketing organizations’ distribution
channel. In a very concentrated time, I was able to help them
complete their self-assessment for this distribution channel
and use it as a model for five of its other distribution systems.
Here was
a real opportunity to look at the key differences between
the independent marketing organizations and the career operations.
Of course, the first major distinction is in the area of training.
Career agency operations must provide training for their agents
while brokerage operations must make training available to
their distributors. This is fairly straight forward, but the
sticky questions come in defining just what criteria will
satisfy the "make-available" definition, and, stickier still
is how to determine adequate deployment and monitoring.
The second
major distinction comes under the supervision, where companies
distributing through independents are given specific criteria
to satisfy the supervision requirement. These are clearly
set forth in the IMSA questionnaire and include distributor
selection, licensing, contracting and training criteria and,
of course, monitoring. While this should give great comfort
to brokerage people, there is no stipulation as to whose responsibility
it is to oversee all of these, the company’s or the General
Agents’. Different companies have taken different approaches,
and I have worked with companies who followed each approach
to satisfy the "approach, deployment and monitoring" indicators
that lead to IMSA membership.
Communicating
these provisions for independents has not always been easy.
While there are some brokerage companies who are strongly
on board, some times sparks really flew. At one large company
where I was presenting our "Orientation to Self-Assessment"
seminar to 25 people, someone stood up and shouted, "But you
don’t understand! This just doesn’t apply to Brokerage operations!"
There was a very strong perception in that company that IMSA
was trying to squeeze brokerage companies into a career agency
mold and threatening the independence that is the keystone
of the brokerage concept.
I found
this again at other brokerage companies. But as I worked with
the people, explaining the provisions IMSA had intentionally
established for companies marketing through independent intermediaries,
the resistance changed into a new understanding of the IMSA
assessment process, and people who had been animated against
IMSA now become IMSA proponents.
Just after
mid-year, the independent assessments began. I was pleased
to be a part of the IMSA team that admitted the first two
IMSA members, both brokerage companies. Using a team-assessment
approach, we put together team members with expertise in the
company’s distribution system and drew them, whenever possible,
from the company’s geographical region. The team approach
also enabled us to conduct an independent assessment in one
week per distribution channel.
The last
half of 1997 was filled with independent assessments for some
15 companies, some with multiple distribution systems. At
the same time, I continued to work with 10 companies on their
self-assessments and provided training for 12 companies just
beginning their self-assessments. I am very pleased to have
had the opportunity to work with so many fine companies, representing
over 35 distribution systems. My conviction is that their
management sees IMSA not just as a series of hoops to jump
through, but as a real opportunity for improvement – improvement
of their ethical market culture and strengthening of their
relationships with their customers.
But our
work is not done. IMSA is not a one-shot deal. Although many
major companies are now IMSA members, many companies are still
not there. Some have decided to wait and see, other have stronger
reservations. In particular, there continue to be some reservations
from people in the brokerage community. There is apprehension
on their part that IMSA does not address itself specifically
to their unique needs.
Some of
this apprehension will be relieved when there is a fuller
understanding that IMSA does indeed recognize the uniqueness
of brokerage distribution. This will become clearer as more
brokerage companies join IMSA. IMSA is NOT trying to force
brokerage people into a relationship that would jeopardize
the brokers’ status as independents. Distinct training and
supervision approaches to address the unique brokerage situation
are prominent in the Assessment Handbook and other IMSA materials,
as I have mentioned above. But, they are prominent there because
people from brokerage companies made sure they were, by giving
of their time to the process so that all brokerage companies
would benefit.
There
are countless other opportunities for involvement for people
from companies who see IMSA as an opportunity to improve their
companies and the industry’s image. We can do this by working
together, by continuously improving as the IMSA journey goes
on.
I trust
that the readers of this article will move forward on two
fronts to improve ethical market conduct. First, that you
will get more involved in the industry efforts to encourage
IMSA membership by raising your concerns with IMSA, offering
to take part in the on-going discussions to address the specific
needs of your distribution system and of your customers. Second,
that you will encourage your company to move ahead on the
IMSA journey to strengthen the ethical market conduct culture
of your company and of our industry – to rebuild the trust
that is at the heart of our business.
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