21 Key Components Reorganized

After the March 2018 Quality Management Consultant’s meeting in Columbus, it was decided to reorganize the 21 Key Components into three categories: Operations, Market Selection and New and Renewal Placement Services. No changes were made to the content of the Key Components. Below is a brief description of each of the Key Components listed under the new category:


  1. Human Resource Management – Effective management of human resources is critical to building a good team or working professionals committed to the firm’s Quality Management Program (QMP).
  2. Written Standard Procedures and Workflows – Every department should have written, up-to-date procedures. The procedures should include the Key Components of the Quality Management Program.
  3. Centralized Follow-up Suspense System – Agency should have a centralized suspense system the employees are expected to use which can be monitored by management as required.
  4. Claims Handling – The agency should have procedure in place and staff should be aware of the “dos” and “don’ts” involving handling claims.
  5. Client Communication – All conversations, emails, texts, form letters and other communication related to clients and prospects should be documented either electronically or, if manually, on a prompted form.
  6. Standard of Care and Professional Duty to Client – All materials that promote the agency and its expertise and services should be periodically reviewed to ensure that the information/message is consistent and accurate.
  7. Security and Privacy Compliance – Knowledge of and compliance with the various privacy/security mandates is vital to ensure proper protection of PHI/PII information/data.
  8. Internal Auditing – Regular reviews of a representative sampling of client files should be conducted to ensure procedures are consistently followed.
  9. Third Party Claims Administration (TPA) – TPA operations are highly specialized and require strict adherence to the applicable client and legal requirements.
  10. Managing General Agent/Underwriter/Program Administrator – Agencies acting as MGA/MGU must adhere to the authority granted by the carrier and properly manage appointed retail agencies.


Market Selection

  1. Carrier Financial Stability– The agency should establish a minimum acceptable rating and financial strength for carriers and have a process to monitor their financial ratings.
  2. Surplus Lines and Non-Admitted Carriers – Clients should be informed of non-admitted status in proposals and quote cover letters/emails prior to binding coverage.
  3. Placing Coverage through Intermediaries – Specific standards and frequent monitoring should be employed when placing coverage with wholesalers, MGAs and other intermediaries.


New and Renewal Placement Services

  1. Annual P&C Exposure Reviews – All P&C accounts should receive an exposure review each year. Standard checklists and questionnaires should be designed to inform clients of coverage options and to prompt them to provide information about exposures of which the agency may not be aware.
  2. Annual Offering of Benefit/P&C Products and Services – All clients should receive an explanation of the products and services offered by the agency.
  3. Submissions, RFPs and Proposals – The use of checklists to gather information, evaluate exposures and to manage the new and renewal process is extremely important. A standard form letter should be used for BOR/AOR situations sand approved templates stored in the agency management system should be used for proposals, submissions and RFPs.
  4. Written Confirmation of Purchase Decisions and Mid-Term Changes – A prospect or client’s decision to purchase or decline coverage should be communicated in writing and the final decision retained in the client file.
  5. Insurance Binders – Binders should be issued in accordance with state laws and within the agency’s binding authority granted by carriers.
  6. Certificates of Insurance/Additional Insureds – Certificates should be issued in compliance with state laws, carrier mandates and authority granted to the agency by contract. Requests to provide coverage for additional insureds should be properly evaluated and endorsed.
  7. Policy, Plan and Endorsement Checking and Delivery – There should be evidence in the clients files that policies, EB plans and endorsements have been checked for accuracy before they are forwarded to clients.
  8. Contract and Lease Review – A specific process should be in place when the agency is asked to determine if the client’s current insurance program meets current or potential contract requirements.

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