🔒Insurance attorneys tap tech for broker compliance venture

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Just as many employers outsource payroll functions to a third party, some insurance agencies and brokers outsource their tracking of myriad state regulations.

Insurance attorneys and Connecticut natives Chuck Welsh and Mike Griffin took note of a growing cottage industry of companies offering compliance management to insurance sellers, who are increasingly operating online and across state lines.

With their background and expertise in the industry — and some help from technology — Griffin and Welsh thought they could do it better.

The two UConn Law grads who had worked together as insurance attorneys for 12 years in the Hartford office of the former Edwards & Angell, left their partner positions three years ago and set out to do just that.

They quickly launched their own law firm, ACCEL Law Group, in West Hartford, which helps insurers with regulatory compliance.

So far, they've found early success, building up a client base along the East Coast and Midwest and launching a new compliance software program and related business unit. They've also recently received state aid to grow their firm.

Griffin said he and his partner know the insurance industry “frontwards and backwards,” but building a compliance software system wasn't in their wheelhouse. So as they began building up a client base for their new firm, they worked with software developers to create a cloud-based platform that helps insurance sellers streamline and keep track of broker and agent licenses.

“We had a good concept, kind of like a painting, but we didn't know how to paint it,” Welsh said.

Last year, when they felt the technology was ready for prime time, they launched a second business entity, ACCEL Compliance, and started pitching the platform, called ACCEL Compliance Management Suite.

The software allows users to keep track of and streamline required regulatory filings, and to securely upload other important documents all in one place. It also provides ACCEL Compliance fairly predictable monthly revenue on a per license, per state basis.

Now in its first full calendar year of operation, ACCEL Compliance has approximately 20 clients, spanning from Massachusetts to Florida to Illinois, according to Welsh and Griffin, who expect to be in the black on their investment this year. ACCEL doesn't disclose its revenue.

Recently, the Department of Economic and Community Development (DECD) decided to back ACCEL with an $80,000 grant and a $100,000 loan to help them drive more customers to their compliance business.

DECD Commissioner Catherine Smith said ACCEL “has shown much promise and is working to be a vital player in the insurance industry going forward.”

The company plans to use the money to beef up its marketing and add at least two employees to its compliance business over the next eight months, doubling its full-time staff.

“We really want to be a bigger player,” Griffin said.

There seems to be plenty of opportunity to do it. According to Welsh, there's an estimated 38,000 independent agencies in the U.S.

“There's a huge market out there, and compliance is not the focus — it's selling insurance and risk management,” he said. “[Compliance] is kind of white noise they'd rather not deal with.”

License headaches

Licenses are important in the insurance industry, as they authorize an employee or company to sell insurance in a particular state.

If a company sells insurance in all 50 states, an agent could have as many as 50 licenses, often with different renewal timelines and requirements. Multiply that by a workforce of several dozen agents, and it can be a big headache for an insurance agency, many of which still handle compliance in-house, Griffin said.

Agencies must keep track of license statuses to ensure they don't lapse, since regulatory violations can be costly, depending on the state.

Violations can also tarnish a company's reputation, perhaps even leading to carriers to stop doing business with them.

“When you start losing markets, it's like not having goods on the shelf,” Griffin said.

Just over the Massachusetts border in Agawam, Insurance Center of New England/Special Risks LTD has been using ACCEL's software for the past five months.

Denise Remillard, vice president of operations, said the company switched from a previous software provider because it wanted a system that provided more proactive warning about upcoming obligations. She said Welsh and Griffin's legal background was also a plus.

In addition to the company's own licenses, there are approximately 10 sales people who need licensing across the country.

“We keep track of our agency licenses as well as the producer licenses,” Remillard said. “If they are on the road and they go into a business, they need to be licensed.”

Remillard has been using various kinds of compliance software for a decade or more, but she recalls having to do it in a handwritten ledger.

”It was not good,” she said. “It's hard to keep track of and do other tasks.”