Electronic bond forms to improve operational efficiency
Surety bond producers know all too well the frustrations of entering the same bond data over and over into different surety companies’ systems. Now, there may be an end in sight to that repetitive task.
NASBP, in conjunction with the Surety and Fidelity Association of America and ACORD, a global, nonprofit insurance standards organization, is working to develop standardized electronic versions of all surety forms. The goal is to have a library of universal electronic forms that would make the exchange of data much easier.
“It all has to do with efficiency and processing of forms,” said Nick Newton, Owner of the NASBP Member firm of Newton Bonding of Stillwater. MN. The dream, he said is to develop a system that will allow bond producers to enter information on bond requests one time on their systems and then send it out to as many sureties as desired. The sureties would be able to incorporate that data into their own systems.
NASBP’s Automation and Technology Committee and its Forms Working Group have been trying to make this vision come true. The problem is that that most surety companies have their own individual application and management systems and that there are several agency management systems used by bond producers.
So the Forms Working Group decided the best approach would be to emulate the insurance industry.
“The situation is very similar to the insurance industry, where bond producers had to do the same things for multiple companies for submission,” said Jenni Waggoner, Assistant Vice President and Bond Manager for the NASBP Member firm of M.J. Schuetz Insurance Services and Chair of the Forms Working Group. By partnering with ACORD, the insurance industry developed standardized electronic forms that could be read by both parties’ data management systems.
To help make this a reality in the bonding industry, NASBP donated all of its previously developed printed bond forms to serve as the basis for the new electronic bonding forms. ACORD already had one bond industry form in its library, an execution report numbered 501. Committee members updated the NASBP’s bid bond form and used the 501 as a starting point/naming convention in developing a bid bond form (502).
Once the working group completed that task it passed the 502 form to ACORD, which added e-labels.
“Someone can fill out an e-label form and can mail it to whomever their partner is,” explained Carolyn “Cal” Durland, CPCU, Director,Industry Relations Compliance at ACORD. This form is not based on an OCR (optical character recognition) system; surety partners with the right reading software will be able to actually take data right off the form the agencies submit.
Once the 502 form becomes available in the ACORD library this fall, vendors of agency management software can begin incorporating it into their client agencies’ systems. Sureties, too, can start upgrading their own systems’ capabilities to handle the data entered on the form.
Over the course of the next few years, the Forms Working Group will be developing other electronic bond forms. Committee members will next tackle the commercial bond form and then the contractor questionnaire. More complicated forms that involve number manipulation—financial statements and the work on hand report, for example—will come after that.
Both agencies and sureties have responded favorably to presentations at NASBP meetings about the electronic forms and the data exchange possibilities. Bond producers, who are hoping for an end to the repetitive entry of data, are more enthusiastic than the sureties, which fear they may have to invest heavily in changes to their systems to accommodate the changes.
Once agencies start to use the forms in their own systems, they likely will look more favorably on sureties whose systems use these forms. . It will provide those sureties who make the switch with a competitive advantage.
In the meantime, Waggoner is inviting agencies, sureties and software vendors to be part of the forms project so that they have a say in their development. “As bond producers we need this technology, and we need as many agencies and carriers as possible to be on board,” she said.
2016 Surety IT Survey
NASBP’s Automation and Technology Committee is working with ACORD and SFAA’s e-Business Advisory Committee to analyze new technology trends to develop the questions for the 2016 IT Survey. The Survey was first created by NASBP in 2007 with a goal of examining the current use of technology by membership. The results of this survey provide valuable information to determine technology needs within our industry.
With continuing growth and a robust response to the survey each year, NASBP is able to produce detailed statistics that help impact important IT-related decisions. The results are broken down into four categories based on annual surety premium. As technology has become an important and integral part of the day-to-day activities of our industry, NASBP continues to create new tools and resources for its membership to assist them in addressing their automation and technology challenges.
NASBP, ACORD, and SFAA will work together to create a comprehensive survey with greater distribution and improved survey results in 2016. Your participation is needed to improve our fifth IT survey. Previous NASBP IT Surveys are available at http://www.nasbp.org/itsurvey. Contact Dave Golden, Director of Technology at email@example.com, for more information. Be on the lookout for the survey in early 2016.