Traditionally, processing of transactions, insurance claims and other aspects of consumer-based plans have been handled internally. However, in an era of increased emphasis on financial management and cost cutting, this has shifted. Many credit unions are discovering that outsourcing these functions to third-party administrators (TPAs) can provide significant cost-savings, improve member service, enhance flexibility and ensure that the process meets all current standards.

For a start, individual insurance plans often have highly technical aspects and difficult administration standards that require specific and up-to-date knowledge that can be difficult and expensive to maintain in-house. And, from a management point of view, a partner can often provide more accountability than is available when using an internal department that is, by necessity, serving multiple masters and determining its own priorities.

Proper administration ensures that credit unions and members are protected. Finding the right partner is the first step. When considering a partner relationship, below are the key questions to ask.