“It’s not us, it’s you.” Several insurance agents that use large payment processors (operate in multiple verticals) have reported being kicked off their payment processor, with no other explanation than “our product is not a good fit for your industry.” Well, their loss is potentially your gain.We can’t tell you exactly why these companies are rejecting business from the insurance industry. But we have some educated guesses. Even better, we have a solution!First and foremost, the insurance industry is highly regulated and involves a lot of tracking funds for compliance purposes. Some payment processors are designed for straight sales transactions. They simply can’t handle the additional levels of accounting and code compliance the insurance industry demands, in other words, they don’t speak insurance.“Not a good fit” is their way of admitting they’re not set up for a complex, regulation-driven industry like insurance. Here are some likely reasons why they might be rejecting business from insurance agencies:
Insurance Code Mandates and Trust Account Management
Most vendors who use a large multi-vertical payment processor have a simple business model: receive payment in exchange for goods or services provided. It’s straightforward. No fancy accounting required. Think coffee shops, digital storefronts, hotdog guy at the block party.But not the insurance industry. As you know, premium payments in some states are subject to insurance code regulations. When you receive premiums you are operating in a “fiduciary” capacity. You are not the “owner” of the premiums paid but are acting as a fiduciary of those funds. As such, you must keep premiums in separate trust accounts that are segregated from the agency’s business operating funds. This is to protect premium funds from agency creditors. And you can’t take them out of the trust account without proper documentation of the commission earned and an audit trail, either.Truth be told, general payment processors are not set up for this level of sophistication. Volume, yes. Sophisticated accounting, no. Trust account (TA) management is a huge responsibility with potentially heavy consequences. You need a payment processor that understands the “ins and outs” — which, for insurance agents, involves more than simply depositing money from the client into your agency account, or even passing it directly through to the carrier! Terms like net funding and premium funds should sound familiar.
State Compliance and Regulations
Each state has its own set of regulations for selling insurance. The requirements in Ohio may be different from those in New York, California or Florida. That’s one reason why the trusted choice / BIG I associations are so valuable. They keep you on track to maintain compliance with any and all state-specific mandates.Needless to say, the big global payment processing companies are not operating at this micro (state regulations) level. But you are.And so are we at ePayPolicy. We maintain close relationships with the Big I / Trusted Choice state insurance associations nationwide and are in the process of getting all 50 states endorsements. Their stamp of approval is their way of saying, “This vendor gets it. We trust them. You should, too.”
An insurance Industry-Specific Solution
I’ve kind of hinted at the solution in the “issues/problems with general payment processors” sections above.
Yes. I am talking about ePayPolicy — the insurance payment processing platform built specifically for independent insurance agents.We are not a general-purpose payment processor. We are a payment processor that was built by insurance professionals for insurance. We work exclusively with and for the insurance industry. By focusing on your business needs, as well as the highly regulated nature of insurance, we have created an ecosystem that streamlines your operations while ensuring compliance across the board.Check outePayPolicy. We make collecting credit card and ACH payments as easy as possible and to get started takes only 5 minutes.
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Anamaria is the Brand & Partnership Coordinator at ePayPolicy. Being a marketer at heart, Anamaria is always looking for innovative ways to engage with prospects and clients. Originally from Nicaragua, she came to the United States in 2015 to attend college in Boston and moved to Austin in early 2020. When she's not working, she is developing recipes for her Instagram, jogging, or exploring coffee shops.
Built by insurance professionals for the insurance industry, ePayPolicy is on a mission to replace paper checks for all agency billing. By offering a convenient, secure solution for independent agencies, brokers, MGAs, and premium finance companies, ePayPolicy is transforming the way the independent insurance industry collects payments and sends funds.