They didn’t pop champagne corks, but there were high-fives all around August 8 when APEXA, the cloud-based advisor contract and compliance platform, officially went live after some delays.
“We were expecting to feel like fireworks going off and streamers falling from the ceiling,” says Tonya Blackmore, CEO of parent company APEXA Corp. “But while we were excited we still felt we had a lot of work to do to make sure that everything was an excellent experience and that we continue to deliver. There was that little bit of realism as well.”
Part of that reality is to bring on board some 85,000 life and health insurance advisors and corporations by the end of 2018 – including those who are not as eager to use APEXA as others.
Blackmore says many of those from whom she has heard negative comments about APEXA are either misinformed or are not clear on exactly what APEXA does. For these “cautious” individuals and companies, Blackmore says she welcomes them to sit down and talk about their issues.
But after that, those not willing to use the APEXA system may not have many options, she says.
“We are a service provider, but we’re providing APEXA for the industry. The carriers have decided that if an MGA wants to do business with them then they need to use APEXA – that way they are assured that the business is being managed properly and in compliance. A lot of the effort of having the MGAs on [APEXA] is going to be coming from those carriers who are requiring it.”
APEXA Corp. is a privately held company owned by insurance services and software provider LOGiQ3 Group. The APEXA platform is meant as a single advisor screening, contracting and compliance tool. Nine members have been at work putting together the new system, including carriers Canada Life, Empire Life, Industrial Alliance, Manulife and Sun Life Financial. Also on the project are MGAs HUB Financial, Financial Horizons, IDC Worldsource and PPI Solutions. Software firm Bluesun Inc. is APEXA’s technology partner.
APEXA first started to take root in 2014 and was originally slated to begin in early 2016. But stakeholders said they wanted to make the project more appealing to advisors. The next launch date had been scheduled for mid-2016, but then APEXA announced it needed more time to fix issues stemming from complicated internal systems of the large insurers.
Blackmore says the group’s next step is to bring in more carriers and MGAs to see APEXA adopted as the industry standard. “That’s a significant effort.”
While the price tag for APEXA is not being released publicly, there are some advisors, like Richard Gilbert, president of Megacorp Insurance Agencies Inc., who feel that advisors will feel the brunt of the costs of the new system – if not now, then down the line.
“You can’t make something mandatory and it’s not going to be free,” says Gilbert. “If they are charging the carriers and MGAs, how long is it going to be before that trickles down and causes the agents to take a hit? You know as well as I do that MGAs are pushed to the limit and they are getting everything downloaded on them. They’re not going to keep absorbing all sorts of charges and fees.”
But Jim Virtue, president and CEO of PPI Solutions, says not one word has ever been said to suggest that.
“I’ve been involved with APEXA as one of the founding companies, and I have never been in a room where it’s been discussed that APEXA is going to be funded by advisors,” says Virtue. “This has been paid for by the five founding insurance companies and the four funding MGAs. It has cost advisors nothing. I’ve never been in a room where it has ever been discussed that costs will be downloaded to advisors.”
Blackmore echoes that comment, saying she too has not heard anything from any of the MGAs that they will push costs down to advisors. Carriers and MGAs already spend considerable sums on compliance obligations and see the cost of monitoring advisors on both the outgoing method and APEXA as the cost of doing business. “In a lot of ways they were doing everything that APEXA is doing today but were doing it in a more manual, inefficient manner, so they are just replacing one cost with another.”
The major difference with APEXA will be to simplify some compliance work for advisors. Advisors will go in once to the system to set up their account, including their licences and errors and omissions insurance. Any changes, like banking information or an address, will then be put into the APEXA system once with the information passed on to everyone that advisor has a contract with in the industry. Blackmore says some advisors may have 10-15 relationships with carriers and MGAs and using the APEXA system will be a massive improvement in their process.
Virtue says APEXA’s digital method may well be considerably cheaper than the current paper-intensive way.
Gilbert says he is also concerned about who owns the data and about cyber security.
APEXA owns the data, says Blackmore, with contributions coming in from MGAs, carriers and advisors. But neither MGAs nor carriers can go in and make any changes to the information – only the advisor can.
“The advisor is responsible for their profile and it’s their information and they’re the only ones who are allowed to make changes,” she says. “We had to create those lines because where it is a contributory database and multiple people have access, you can’t have everybody changing data.”
APEXA is also responsible for the data security and has developed “a very high bar” to ensure the information remains secure, including annual security reviews, says Blackmore.
She says the company’s next step is to integrate the rest of the carriers and some of the larger MGAs, especially those who have come forward and said they want on. Others will come on throughout 2018.
Virtue says while APEXA had a few bumps along the way, the industry will see in no time that it was the best decision that could be made.
“It’s too bad the teething pains were more severe than we thought they would be. But I still really believe that with APEXA, in two or three years, we are not going to be able to imagine how we lived without this. I really think this is a right-minded thing for the industry to do.”