ACORD is Changing How You Access Forms

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NOTE: As I anticipated there have been a number of updates to the information contained in this article. I have done my best to update where new information has been added or updated. If you read an early version of this article be sure to read to the end again for the latest information I have. 

ACORD license change

ACORD® (Association for Cooperative Operations Research and Development) was created in 1970 as a non-profit organization by insurance carriers and agent organizations focused on streamlining policy applications and other industry forms. In the late 1970s, ACORD began developing data standards.

Every entity (agency, insurance company, and vendor) that uses ACORD forms or ACORD data standards is required to have a license to access and use ACORD forms. There are currently about 850 forms in the library. The current ACORD license agreement for vendors who provide ACORD forms in their platforms includes a sublicense for agency access to the forms in the platform. The vendor paid the license fee for their clients. This agreement expires on December 31, 2019.

Access to ACORD Forms is Changing

As of January 1, 2020, the vendor providing access to ACORD forms will no longer be able to provide access through sublicensing. Each organization will be required to obtain their license directly from ACORD.

The new ACORD vendor agreement (ACORD Forms Value-Added Redistribution Licensing Agreement) makes several changes that affect all organizations that use ACORD forms.

  • All end users of ACORD Forms will require a license directly from ACORD. Vendors will be responsible for informing their clients and/or customers of this requirement.
  • Program fees will be based on the participating organization’s group gross revenue, instead of by “seat count.” This brings the program’s fee structure in line with other ACORD programs and will provide a pricing metric that is more accurate, equitable, and convenient to report.

Updated: EZLynx Announcement to Their Clients

The announcement below was posted on the EZLynx website on November 26, 2019, and updated recently:

As of January 1, 2020, licensing of ACORD forms is changing. EZLynx will continue to offer forms as part of our software, so there is no change on our end. However, ACORD is now requiring you to also purchase a license directly from them. If you are a member of the National PIA or the IIABA, the new ACORD license may already be available to you.

For more information on ACORD licensing, please contact ACORD at (845) 620-1700 or by visiting https://www.ACORD.org/forms-pages/forms-participation-programs.

Official ACORD Statement

As of January 1, 2020, software vendors including, but in no way limited to, EZLynx, are unable to furnish rights to use ACORD® forms, any sublicenses issued by EZLynx (and other software vendors) expire on December 31, 2019, and ACORD form users must obtain a written license directly from ACORD in order to use the ACORD forms contained in EZLynx One Platform. Persons and organizations can obtain written licenses to use ACORD forms by contacting ACORD at +1-845-620-1700 or through the additional contact information available at www.acord.org. Users who fail to obtain a written license from ACORD are not permitted to use ACORD forms contained in EZLynx on and after January 1, 2020.

Applied Systems Email to Clients [Updated]

Applied Systems sent this email to their clients on December 12th.

Dear customer,

I wanted to inform you about ACORD’s new licensing policy. Effective January 1, 2020, ACORD will require all insurance agencies to directly license and pay membership fees to ACORD for the usage of the ACORD Forms. This licensing decision, made independently by ACORD, still requires Applied and other solution providers to obtain a license for the use of ACORD Forms; however, ACORD also now requires all agents and brokers who continue to use ACORD Forms after January 1 to obtain licenses directly from ACORD.

We have also been advised that under ACORD’s new licensing policy, members of The Independent Insurance Agents & Brokers of America (Big “I”) and/or National Association of Professional Insurance Agents (PIA) that have a group gross revenue of under $50 million will be eligible for a license from ACORD as part of their membership(s), with no additional payment necessary. Additional information for Big “I” members can be found in their FAQ and for PIA members in their press release.

Users who do not qualify for a license under their Big “I” membership, PIA membership or a qualifying ACORD membership are able to purchase a stand-alone End User License from ACORD. For additional information, please review the ACORD membership programs.

As always, thank you for selecting Applied as your trusted technology partner.

Regards,

Greg Shiple
SVP of Support
Applied Systems

Vertafore Comment

This comment from Vertafore was posted on the NetVU forum.

In 2019, ACORD announced that starting in 2020, all agents and brokers using ACORD forms are required to obtain licenses directly from ACORD.

In July 2019, ACORD and the IIABA (the Big “I”) announced they had established a joint program whereby the Big “I” would fund ACORD Form end user licenses for its member agencies. Under this agreement, Big “I” members with annual gross revenue of less than $50M are eligible for a license from ACORD due to their Big “I” membership, with no additional payment necessary. To learn more about this change, you may read the press release.

Our customers will continue to be able to access ACORD forms as part of their solutions from Vertafore. Any customers that are not Big “I” members will need to ensure that they are properly licensing the use of ACORD Forms directly from ACORD. Additional information about ACORD as well as how to contact them directly may be found here.

If you have any further questions you can post them here or contact me directly.

Doug Mohr – Vertafore

[Update] Other AMS Vendor Announcements

I will use this section to list the announcements for other vendors.

Hawksoft: https://blog.hawksoft.com/changes-to-how-agencies-license-acord-forms-in-2020

Association Agreement

The Independent Insurance Agents and Brokers (IIABA) has “negotiated an agreement with ACORD, wherein Big ‘I’ will cover the cost of the end-user license when accessing by a management system or redistributor or provide a EUL discount when accessing directly through ACORD Advantage Plus Program.” Bob Rusbuldt, CEO of the Big I, is a member of the ACORD Board of Directors.

The key part of the agreement is:

“All Big I members with less than $50 million in P&C revenue will receive a Forms End User License free of charge as part of their Big ‘I’ membership.” This threshold does mean that 98% of their membership falls under $50 million in P&C revenue.

You should read the full details on the IIABA site here.

[Update] The National Big I has confirmed that they have finalized the validation database to identify Big ‘I’ members under $50m in premium – which is being used by ACORD. Anything outside of that involving agent workflow to validate is ACORD’s responsibility, as well as coordination between ACORD and the management system vendors.

The National Association of Professional Insurance Agents (PIA) announced yesterday an agreement with ACORD that appears to have similar provisions as the IIABA agreement. You can read the ACORD / PIA Press Release here. You should monitor the PIA website for additional details as they become available. [Updated] The National PIA FAQ page is here.

I have no information on whether the Council of Insurance Agents and Brokers (CIAB) is negotiating with ACORD.

[Updated] ACORD Forms End User Licenses

The process for agents and brokers to obtain a license through the IIABA and the National PIA is available on the ACORD website by clicking here. Following are the steps necessary to secure your license:

If your organization qualifies for a complimentary license, you can claim it by clicking on the appropriate link.

Note the edition date of the agreement. As of this update, it was 12.19.19

You will need to create an account with ACORD if you do not have one or log in if you do.

Before anyone in your office clicks “I Agree” be sure to review the agreement so you understand what you agreeing to.

If you have any trouble with the process you should contact ACORD Member Services.

Questions and Implications

I have spent the last few weeks trying to understand the reasons for the changes ACORD is making for industry access to the forms library and the implications of these changes. Below are my questions and current thoughts.

Why the secrecy? – The new Redistribution Licensing Agreement is a significant change in how agents and brokers access ACORD forms. There has been remarkably little communication about the move, the implication for all organizations that currently use ACORD forms or standards, and the consequences for the future. Why the veil of secrecy?

Agency/Broker End User License Agreement – I have been unable able to obtain a copy of the Agency/Broker End User License Agreement. I reached out to ACORD last week, and their response was, “Thank you for reaching out to ACORD. ACORD and Big I are finalizing the steps and we will have detailed information about end-user license agreement by next week.”

[Update] A clarification from The National Big I — Regardless of ACORD’s statement above, the Big ‘I’ has no input on what the EULA contains in any form.

[Update] There are a couple of provisions in the agreement that you should make sure to review so you fully understand your obligations:

  • Section 1.8 “Prohibited Activity” – should be reviewed carefully to make sure your organization is using ACORD forms appropriately. Sub-section 1.8 (iv) deals with blank forms posted on a website.
  • Section 5.1 – states the agreement is for only one year.
  • Section 6.1 – ACORD has the right to audit the organization’s use of ACORD forms for a minimum of (7) years.
  • Section 11 – Non-Disparagement – “Licensee agrees to not engage in any action that tends to disparage, dilute the value of, or reflect negatively on ACORD, ACORD goods or services (including Forms and Tools), and/or any ACORD Marks.” I do have to question why this section is included. Why is ACORD concerned?

When a EULA becomes available, This agreement should be reviewed very carefully before signing. This is not a situation where someone in your office should simply click, “I Agree.”

ACORD Forms NOT in a Vendor System – Many agency management systems do not support all 850+ ACORD forms. In the future, if you need to access a form not maintained by your vendor, you will need to subscribe (for an additional fee) to ACORD Advantage Plus (agencies with less than $1 million in annual P&C revenue) or to the ACORD Agent & Broker Redistribution Program (agencies with more than $1 million in annual P&C revenue).

Agent/Broker Access to existing form Data after 1/1/2020? – One of the provisions in the vendor agreement (section 9.3) says, “Under these terms, if an agent uses any agency management system to complete and store ACORD forms, and that agency management system discontinues its contract with ACORD for any reason, the agent/agency will not be able to access previously completed ACORD forms from the agency management system.” While I am not an attorney, this section seems like a significant legal issue for agents and brokers who need access to completed ACORD forms.

Are ACORD forms still relevant? — When forms applications were originally developed, they were an input device. You entered the application data on the form that was captured into a policy record. Today, an ACORD form is an output option. Data is more often gathered in a workflow that is most efficient (perhaps automatically from another database) and the output (the application) is a print option. Will this change accelerate a movement away from needing ACORD forms?

What does the future hold? One of the reasons I want to read the ACORD Agent/Broker End User License Agreement is to determine if the Agency (by signing the agreement) is granting ACORD any additional rights to use information and data entered on the forms on behalf of their clients in the future.

Recommendations

I have attempted to summarize the details and issues I see with the new ACORD agreements, both for vendors and agents. I recommend that your organization take the following steps:

  1. Contact your AMS vendor (and any other vendors that provide you access to ACORD forms) to find out their position regarding signing the new ACORD licensing agreement due on January 1. What help are they offering to their clients?
  2. Contact your state association to see if they have any additional information on this change.
  3. Do not sign the ACORD Agent/Broker End User License Agreement until you have had a chance to review the entire document.

There has been quite a bit of conversation over the last few weeks about the ACORD form licensing changes. The details continue to be very fluid. I will continue to update this article online as I receive new information.

Leave a comment below about any information you have received regarding the changes ACORD is making or steps you are taking to continue to access to ACORD forms.

Please note: I reserve the right to delete comments that are offensive or off-topic.

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5 thoughts on “ACORD is Changing How You Access Forms

  1. Steve, Back in the early 1970’s ACORD came to Rough Notes and wanted to make a deal to standardize the forms we were selling to companies. The first ACORD form drafts had a 5 -digit code number. All Rough Notes products product have a five digit code number to this day. Management said no to a deal because we were making money selling the different forms companies’ requested. Anyway long story short ACORD put us out of the company form business. The same will happen to them they are greedy and who gets hit with paying more the Independent Insurance Agent. Funny the Big I and PIA national associations didn’t fight this on behalf of their members.

  2. I think back to the thousands of hours independent agents spent on helping Acord convince companies that a standard was necessary to be competitive, and to help design and build those standards & forms in collaboration with our company and vendor partners. Much dedication by the INDUSTRY as a whole to help make it easier to do business. The jury is out on the ultimate intentions until the EULA for agencies is available to review, however 1/1/20 is looming fast.

  3. Steve, this post about 01.01.2020 changes to ACORD forms licensing is very informative. I thank you for taking the time to dissect & disseminate this complicated information.
    I have a few thoughts:
    • I absolutely agree with your assertion that ACORD forms have been relegated as an “Output Option”
    *[My Opinion] I’ll add: likely an unnecessary output option, still only being utilized because that’s the way it’s been done for 30 years.

    • It seems that the ACORD form license enforcement will occur with the Agency Management System vendors. I wonder how they feel about this new duty?

    • [My Opinion] – ACORD is likely using this update to forms licensing to prepare/pave the way for huge changes coming to the licensure of their ACORD standards. Many, many technologies have used the ACORD standard to build their programs.

    •[My Opinion] – I believe the update to ACORD forms license is really a forerunner to the real target: Licensing update for technologies that use the ACORD standard
    *[Just A Guess] 24 months or so away (01.01.2022)

    • [My Opinion] – The licensure update to forms and what I believe to be the forthcoming licensure update to the ACORD standard puts ACORD in the position to absolutely rake in revenue for any and all insurance technologies that use ACORD forms, have built to the ACORD standard, and who input, output, and electronically receive information utilizing the ACORD standard

    • [My Opinion] – Google made a significant investment in Applied. Applied owns IVANS.
    Applied and IVANS are already capturing massive amounts of anonymized data.
    Google can teach Applied & IVANS how to use that data to create substantial revenue.
    If being held to the ACORD standard is a hindrance to creating revenue off of this anonymized, Google has the resources to assist Applied with building it’s own, updated, modern standard.

    This ACORD form licensure update and [what I believe is forthcoming] the licensure update to the ACORD standard will enable ACORD to create as much revenue while they can to remain relevant (by force) and viable.

    [My Troubling Opinoin] If I’m correct and
    1. ACORD needs to remain relevant, and
    2. ACORD is successful at raising revenue with forms & standards licensing
    I bet they use those funds to to build the data capture & use technology that would allow them to duplicate what Applied and Google are setting out to achieve:
    Using anonymized data to create substantial revenue.

    The sad thing, the technology will be built on the very backs of those who submit the data under the updated ACORD licensing agreements.

    There, I said it. Am I reading to much into it? Let me know what you think.

  4. This change is disruptive, time consuming, and expensive for agents and vendors alike. None of it benefits the independent insurance agency system that ACORD was created to support. Is this a symptom of ACORD struggling to hold on to their monopoly as they become less relevant?