In 2004, the Big “I” Agents Council for Technology (ACT) published recommendations for agency-carrier technology agreements regarding a wide range of issues, from data access and integrity to document retention and third-party information.

Since that report’s publication, much has changed—and more developments are on the way. This led a work group of ACT volunteers to take a fresh look at carrier-agency contracts—those that incorporate technology and those that address it as a standalone topic—and to publish updated guidelines.

Many issues the work group addressed don't get enough attention during busy day-to-day operations. It’s kind of like insurance: You don’t think about it until something happens, and then it’s the most important thing in your life. Failure of both carriers and agencies to ensure clarity on technology issues up front can lead to significant problems down the road—for them and for their customers.

The ACT work group identified key overarching principles that govern agreement language and details. These include:

• Addressing technology as an addendum to a broader agency agreement
• Establishing the agency agreement as the controlling document
• Handling data ownership and expirations in the main agency agreement and addressing retention and systems of control in the tech addendum
• Ensuring negligent parties bear responsibility for resolution

The group also identified 10 specific issues agency-carrier technology agreements should address:

• E-signatures. Significant growth in the use of e-signatures calls for clear understanding of procedures and policies, particularly around integration, characteristics of identity, consent, disclosure and audit trail.
• Click-through/click-wrap agreements. These on-screen license agreements are typically one-sided and “signed” only by parties against whom terms will be enforced. The work group recommends avoiding these.
• Single sign-on/federated IDs. As vendors implement Single Sign-On and the industry moves toward ID Federation, agreements should address access restrictions and administrative responsibilities of both parties.
• Data breach. It’s important to spell out notification responsibilities and incorporate “hold harmless” and other language that addresses what happens for both parties—carriers and agents—when a data breach occurs.
• Prompt correction of data and system errors. Either party must immediately notify the other when they find incorrect information in the system and the responsible party must make prompt corrections.
• Telematics. Carriers should provide agents and brokers with clear education, direction and access to available telematics-generated data and procedures to ensure responsive agency- and carrier-driven customer service.
• Agency agreement controlling document. Significant inconsistency currently occurs from agreement to agreement. Recommendations offer guidance on form, timing issues, duties and an array of content-related topics.

• Access by authorized users. Carrier policy on website access and definitions of “user” and “permitted use” must be clear, as should processes for granting access and responsibilities for misappropriation or misuse of information.
• Use of data by third parties. Agreements should address use of third-party information and disclosure of customer information to third parties, as well as use of click-through and click-wrap agreements for customer access.
• Access to data by active and terminated agencies. Agencies that terminate their agreements still need access to their data—including policy information and full activity logs.

The ACT work group created a six-page document, “Summary Review of Agency Agreements for Technology Content,” which reviews these critical and emerging issues. A section for each briefly discusses how agreements should address the topic and, more importantly, offers guidance for contractual improvement.

Ron Berg is executive director of ACT. This article is adapted from the ACT article “Updated Carrier-Agency Technology Agreements Recommendations.”