messenger MARYLAND - bigimd.com NovDec... · • Small-Business, Multi-Line Coverage • 3rd...

INDEPENDENT INSURANCE AGENTS DUTIES IN MARYLANDPAGE 10

M A R Y L A N D

messenger 2016 / novdec

page 5

page 30

page 18

Protect your Agency and Prevent Cyber Attacks

Maryland’s Education Department Gets the Gold

HMS Named 2016 Best Practices Agency

page 28Quality Tech Reaffirms Agency Relevance

A.M. Best Rating of “A”(Excellent) FSC “XIV”

Connect with us

I AmTrustedJoin our unmatched team of independent agents offering workers’ comp and commercial lines insurance, including:

• Small-Business, Multi-Line Coverage

• 3rd Largest National Workers’ Comp Provider

• A.M. Best Rating of “A” (Excellent)FSC “XIV”

Get started with an application at amtrustnorthamerica.com or call 877.528.7878 for more information.

4.5.8.9.10.13.15.16.18.23.26.27.28.29.30.

Chairman’s Message

Protect your Agency and Prevent Cyber Attacks

HO Coverage

Ask Pat

Independent Insurance Agents Duties in Maryland

Insurance Society of Baltimore Presents Check to IIAM

IIABA Installs New Leadership Team

Website Privacy Statements


Tidbits

Life Corner

A New I-9

Quality Tech Reaffirms Agency Relevance

Education Corner

Maryland’s Education Department Gets the Gold

IIAM OFFICERS 2016-2017Don Grauel, CIC Immediate Past Chair

Rick Raley, AAI Chairman

Angela Ripley, CIC State National Director

Albert Lietzau IV, AU Chairman-Elect

John Cabrera Vice Chairman

Sandy Chaney, CIC Director-At-Large

Terry Katz, CPCU Past President Rep.

Shelley Arnold, CPCU President

Editor: Shelley Arnold, CPCU, AU, ARM, AAIGraphic Designer: Maritza DintinoAdvertising Info: www.iiamd.orgThe Maryland Messenger is a bi-monthly publication published for the exclusive use of regular and associate members of the Independent Insurance Agents of Maryland. Publication of any article, letter to the editor or advertisement in the Maryland Messenger should not be deemed an endorsement by IIAM of the opinions expressed or product advertised. Questions and comments should be directed to the editor; Shelley Arnold.

Editorial Office, IIAM, 2408 Peppermill Drive, Suite A, Glen Burnie, MD 21061phone 410.766.0600 • fax 410.766.0993email [email protected] • www.iiamd.org

THE MARYLAND MESSENGERTHE INDEPENDENT INSURANCE AGENTS OF MARYLAND, INC.

3

tableofcontents

marylandmessenger 2016 novdec 3

34marylandmessenger 2016 novdec

chairman’smessage

Rick Raley, AAI

Walking to my office this morning, thinking of all the deadlines and commitments that are on my plate for the day, I heard the sound of a flock of geese flying overhead. “WOW it’s Fall”, one of my favorite times of year. This made me think it’s a good time to reflect on some of my experiences the past few months.

Back in September at the Big “I” Fall Leadership Conference in Chicago, I was fortunate to see firsthand our National Association at work and proud of our State Association when Rebekah Langford, our Education Director, received the 2016 Excellence in Insurance Education Award. Rebekah focused her efforts on helping U. S. Veterans enter the workforce by developing a P/C pre-licensing program offered free of charge due to generous donations from our members and associates to the IIAMD Education Foundation.

Later in the month of September,

the Big “I” of Maryland Board of Directors were the guest of MCVET (The Maryland Center for Veterans Education and Training Inc.) in Baltimore. Before the Board met, we were given a tour of their facility, use of their conference room for our meeting, then they graciously provided us lunch. MCVET is a national residential and support program for homeless veterans. They provide homeless veterans and other veterans in need of comprehensive services that enables them to return to their communities as productive citizens. If you want any additional information you can check out their web site www.mcvet.org or you can go on the Big “I” of Maryland web site at www.iiamd.org and check out the MCVET wish list.

If by chance you have time available, go to our website, mentioned above, check out the Member Benefits Packet under the Quick Links heading. You

will find more information on MCVET in addition to a wealth of information on the benefits of your membership. Hopefully you are taking advantage of all of the services provided by the Big “I”. Also, if you know of any independent insurance agencies that don’t belong to our association, give them a packet and ask them to join. There is great value in getting involved with the association, engaging with fellow agents, some who are competitors, makes us all better at the job of protecting our clients. That I would say is …….priceless.

Well the geese are still heading south for the winter, to bad I can’t follow. Hard to believe Thanksgiving and Christmas are right around the corner. Time goes by so fast so be sure to spend plenty of time with your loved ones over the Holiday Season. Happy Thanksgiving and Merry Christmas.

ACT has the tools you need to help protect your agency from cyber threats and prepare your agency to recover should disaster strike. Visit independentagent.com/ACTSecure to find more than 50 helpful resources in 12 areas that you need to address now to protect your agency against the threats of tomorrow. PreventionMitigate Cyber RiskWith proper planning, you can protect your agency from significant risks, including data breach and cyberattack.

What you will find: Disaster planning and recovery resources

Protect PasswordsA Post-it note on a computer monitor doesn’t count. Discover the best way to manage passwords.

What you will find: Resources to help you manage passwords and implement a strategy

Monitor Equipment In Real TimeUnderstand and monitor the contents of data flowing in and out of your network.

What you will find: Data Loss Prevention (DLP) solutions

Use ASP Systems for SecurityASP systems keep agency management and other system data accessible, backed up and automatically updated.

What you will find: ASP comparisons, price points, keep antivirus in mind

KnowledgeStay on the Right Side of the LawUnderstand the data breach laws and prevention requirements for your state(s).

What you will find: Resources for navigating PCI, the FTC, Omnibus Rule and more

Mobile DevicesWhile mobile is becoming essential, using mobile devices to conduct business exposes your agency to additional security threats.

What you will find: Information on encryption, “BYOD,” secure wireless connections, other device security

Educate and TrainMake sure everyone knows their roles and responsibilities in safeguarding company assets and client information.

What you will find: HIPAA security awareness resources, agency security guidelines

Electronic CommunicationKnow the laws and master the best practices regarding electronic communications.

What you will find: Resources on e-signature, the Uniform Electronic Transition Act and ACCORD standards

Document RetentionShould Documents Stay or GoYour agency needs a compliant document retention strategy to help prevent information from getting in the wrong hands.

What you will find: Federal legislation, state laws and best practices on document retention and destruction

Go PaperlessBefore taking the leap, it’s critical to make a plan for a successful paperless transition.

What you will find: Data hosting, information on security vulnerabilities and precautions.

5

(Con’t on page 6)

marylandmessenger 2016 novdec

Take Small Steps to Protect your Agency andPrevent Cyber Attacks

36

(Con’t from page 5)


Protect Confidential InformationKnow state and federal laws, conduct risk analysis and compliance gapping, they create PHI and PPI compliant policies.

What you will find: Rules and tools for HIPPA, FTC, HITECH, and PCI

Document DestructionDevelop and follow a process for destruction of paper and electronic files located on LANs, cloud drives, local and mobile devices, and USB or external drives.

What you will find: FTC disposal

of consumer information, and shredding resources

SecurityEncrypt Your DatabasesErr on the side of caution when it comes to encrypting data. We’ve got the best practices for compliant data encryption, and a primer on state regulations.

What you will find: State privacy and PII regulations

Secure Your VoLPBe aware of the overall security level of your data infrastructure, including your IP phone system.

What you will find: Resources to protect your VoLP traffic from

packet analyzers

Remotely Accessing Agency SystemsRemote access requires awareness, authentication, intrusion detection/prevention systems and a secure VPN to lessen risks.

What you will find: Remote Access software rankings, VPN and server specifications

ACT has what you need to fill your tech protection gaps.

Visit independentagent.com/ACTSecure

GUARDPlusComp • Businessowner’s • Auto • Umbrella

Go to www.guard.com/apply

One-Stop Shopping

� Workers’ Compensation insurance

nationwide for a company’s employees.

� Businessowner’s Policy for Total Insured

Property Values up to $12.5 million (up to$25 million upon request) – now available inover half the U.S.

� Commercial Umbrella for added protection.

� A newly enhanced Commercial Auto

product (gradually being introduced in ourBizGUARD states).

Competitive Pricing Coverage Extensions• •

Excellent Commission Easy Submission•

Process Superior Customer Service New• •

Complementary Lines in Select Jurisdictions!

Visit for productwww.guard.com

availability in specific states.

We’re the quote you could come

up against, so why not join us?

GUARDBerkshire Hathaway

Companies

Insurance


BuildersMutual.com

Meeting my customers where they work.

Crafting each policy to meet different needs.

Partnering with Builders Mutual insurance.

That’s how I get the job done right.


Here are the three most common sources of E & O claims involving homeowners insurance and what you can do to successfully defend them or, better yet, avoid them in the first place.

1. Lack of coverage. A client suffers a loss and their HO policy does not cover the damages as broadly as they anticipated. The client then sues the carrier for not properly adjusting the claim, or they sue the agent for not selling them the proper coverage. The HO-3 and HO-5 forms offer the broadest coverage to your customer and best protect you from E & O claims. In order to sell these policies, educate your customer on the reasons behind the price difference between various HO policies-namely, the superior coverage the HO-3 and HO-5 provide. If your client still insists on

purchasing a lesser policy form, fully explain the limitations of the coverage and document the same in your records.

2. Home valuations. As an agent, you specialize in procuring insurance, not appraising property. Your client best knows the value of their home. If they are unsure of the value, they should pay for an appraisal.Many carriers require using an estimator to determine the necessary amount of HO coverage. If that’s the case, make sure you use the correct square footage in your calculation. If your client provides the square footage, document that they were the source of the figure and remind them that the coverage amount is an estimate, not a guarantee of

the cost of rebuilding their home. You should also inform them they can request higher limits.

3. Coinsurance. On a 90% coinsurance policy, most customers understand that if they only purchase $180,000 in coverage on their $200,000 home, the most they can recover from the carrier is $180,000. What they may not realize is they may not have $180,000 in coverage, or full coverage for a lesser loss.At the time of loss, the carrier assesses the value of the home. If the value is greater than $200,000, the carrier applies coinsurance. Using our example, if the customer suffers $100,000 loss but the carrier assesses the home’s value at $225,000, the customer will only recover [$180,000 / (.9 x 225,000) x $100,000] = $88,889. The customer will be responsible for the balance of the damages because they failed to carry coverage of at least 90% of the home’s value.Be sure to ask about home additions or improvements at renewal, and document that you have explained coinsurance. If the customer decides to insure for less than 100% of the estimated value, document that decision, as well as your offer to write higher limits.

Jim Redeker is vice president and claims manager at Swiss Re Corporate Solutions and works out of the office in Overland Park, Kansas.

HO Coverage: 3 Common Sources of E & O ClaimsBy Jim Redeker

Patricia McHugh LambertPesin Katz Law, P.A.

901 Dulaney Valley Road, Suite 400Towson, Maryland 21204

410.938.8800 • 410.339.6759 (direct)410.832.5628 (fax) • [email protected]

askpat

THE CAMPAIGNS SHOULD HAVE THOUGHT ABOUT INSURANCE

Some people tell me I have a warped view of current events. When a fire is shown on the eleven o’clock news, my first thought—after hoping that no one was hurt—is to wonder whether the building’s owner had insurance. When there is a hurricane, I wonder how many CAT teams (a/k/a catastrophic action team) an insurer will send to the disaster area. When there is an earthquake or flood, I think about the exclusions in a typical homeowner’s policy. When everyone else is watching Fox News or TMZ, my insurance geekiness makes me think of insurance and how it impacts current events.

Thus, it is no wonder that when I think about the upcoming election I think about insurance. Who insures the candidates? What coverages do they have? Are the strange events that occurred during this election cycle covered? So, somewhat tongue in cheek, here are my most recent insurance musings about the current presidential race.

1. Identity Theft. There is only one way to explain some of the illogical and extraordinary events of a presidential campaign. At some point in time, the identities of the candidates were stolen. How else could some of the early morning tweets be explained? How else could you

make sense of the insensible policy statements? Stupid is stupid—and neither Donald Trump or Hillary Clinton is, at a basic level, stupid. Thus, my only explanation is that their identities were stolen and someone, using their identities, made the ‘how could they say that’ statements made on the campaign trail. I suspect that the candidates do not have identity theft insurance. Otherwise, they clearly would have coverage—which might be able to undo the damage by the apparent imposter.

2. Employment Practices Liability Insurance Coverage. I’ve never seen so much political discussion regarding female body parts. What can a politician touch? When can he touch it? And most importantly, what can a politician say about his desire to grope to his male locker room buddies? With candidates sharing their “go to” methods to impress the opposite gender, there is clearly a need for EPLI coverage. Republican or Democrat, there is the risk that someone will accuse a candidate of pinching private parts. This coverage, unfortunately, now appears to be a must.

3. Cyber Liability Coverage.

Emails are ‘lost.’ Emails are ‘hacked.’ Hacked political emails turn up being uploaded to WikiLeaks. Cyber liability and data breach coverage might help with the cost of recovering lost data or recovering from an unwanted hack—if that is what someone wants. One can imagine a scenario where an insurance professional explains to a politician that there is coverage for recovery for the ‘lost’ data and the politician asking whether there is coverage for keeping the data in the lost abyss of cyber space. Perhaps that is a new line that a specialty insurer can invent.

4. Health insurance. I have heard a lot of people tell me that they are concerned with the health and mental health issues of the presidential candidates. No worries. Both are eligible for Medicare health benefits. But one of them should be concerned about retirement and all the health and disability insurance issues that retirement raises.

Regardless of my tongue and cheek list, there is a serious choice to be made this election. The face of insurance will be impacted by whomever is elected. Consequently, this election is important and I urge each of my readers to vote.


As an independent agent you have the unique ability to provide a wide selection of insurance products to

your clients and prospective clients. Maryland law considers you to be a professional, and you should be proud to accept that characterization, because that is precisely what you are. Along with this designation comes a series of duties. In its simplest terms, your legal duty is to follow your client’s instructions and obtain the best insurance available to you through your markets at the best commercially reasonable price and terms, using reasonable skill and ordinary diligence. This duty is essentially the same across the United States. The duty is summarized in an early Maryland case, Lowitt v. Pearsall Chemical Corp. of Maryland, 242 Md. 245 (1966):

An agent, employed to effect insurance, must exercise such reasonable skill and ordinary diligence as may fairly be expected from a person in his profession or situation, in doing what is necessary to effect a policy, in seeing that it effectually covers the property to be insured, in selecting the insurer, and so on.

In other words, you have a duty to procure the coverage that has been requested by your client.

Breaking down the legal duty into its component parts should make understanding the various elements easier to appreciate.

Follow your client’s instructions: This responsibility is often the underpinning of a claim against an

insurance agent, and it can be reduced to one word: miscommunication. Whether it is a new client or one that has been a client for years, failure to understand what the client is requesting, or, worse, assuming you know what is being requested, can lead to problems:

• I thought I had full coverage, why isn’t this claim covered?

• I expected that all my business would be protected.

• I thought ‘all risk’ meant everything would be covered.

• You are in insurance; you should know the value of my (fill in the blank).

• I thought you knew what insurance I needed and/or wanted.

• I don’t need Crime (or any other rejected) coverage [becomes “why didn’t you tell me about Crime coverage?”]

• You mean “comprehensive” isn’t comprehensive?

These are all phrases we have heard at one time. Your client’s idea of “full coverage” is not the same as yours, which is why you must make certain there is no misunderstanding. For example, a polite explanation that there is no such thing as “full coverage” and then well-placed questions designed to learn precisely what is being requested should solve this potential problem. Your client believes “full coverage” means literally everything is covered by insurance. What is full coverage for an auto policy? BOP? CGL? CP policy? Without an in depth discussion with the client, there is an E&O claim on the horizon. Being accused of careful attention to detail is a compliment.

Listen to the client. Visit the client’s business or home. A client’s description of what he/she needs or wants might be accurate, but why take the chance? Being present at the location allows the agent to observe potential risks and ask questions that might not be obvious from a telephone call.

• “This sure looks like a nightclub, but you told me it was a sports bar. Where are the giant TV’s? Why does your menu have so few food items, and so many beers and mixed drinks?” “What is the ratio of food to alcoholic beverages?”

• “You forgot to tell me you leased part of your warehouse to a company that makes fireworks!”

If you cannot obtain the insurance being requested by the client, you must timely notify the client that the coverage requested is unavailable or available, but at an extremely high cost. It is always the client’s decision whether to purchase insurance; let the client make the decision.

Same caution for existing clients. When a client requests a modification of any existing policy, any addition or subtraction, unless it is absolutely clear from the written instructions from the client, get more information, and get it in writing. Changes should only be made when instructions are written. This is especially important when a client requests that certain coverages be deleted, policies cancelled or deductibles increased. Clients have very short memories; make sure your position is memorialized in your management information system.

Applications are another way

310

Independent Insurance Agents Duties in MarylandBy Stanley L. Lipshultz, JD, CPCU

(Con’t on page 11)


of clarifying a client’s insurance request. Regardless of the procedure used by the agency in completing an application, there should be no question unanswered; and, by requesting the insured to review the application and sign it, there is little left to chance. Requesting the insured to initial all pages where there is no signature required adds another layer of protection and prevents the insured from the customary “I was in a hurry, you prepared the application so I assumed it was correct, you didn’t tell me to read each page, and I didn’t read everything before I signed it.”

Obtain the best insurance at the most commercially reasonable price and terms: What this means is that you should search the markets available to your agency for the best price and broadest coverage. The least expensive policy may not be the best insurance policy for the customer. Nor do you have to refer your client to another agent because there might be a policy available for less premium. Once upon a time insurers used incentives to direct an agent to their product. Who would not want a free trip to Hawaii? All you have to do is sell 35 new homeowners policies for Shifting Sands Mutual during the year. The only problem is that every other insurance company offering homeowners insurance in your available markets has a better product and a cheaper rate. This practice came to an end in the late 1970’s because of the inherent conflict created by the offer.

Using reasonable skill and ordinary diligence: This is the part of the duty that separates the winners and losers in a litigation contest. It is also referred to as the “standard of care” part of the legal duty of all insurance agents. Oftentimes, whether an agent has made an error is a subjective assessment. In its

simplest terms, the standard of care is a level of performance expected in each transaction between the agency and client. In order to establish an agent’s professional malpractice, the classic tort elements of negligence must be present: duty, a breach of that duty, a causal connection (relationship) between the duty and the breach of the duty, and damages. The “reasonable skill and ordinary diligence” element focuses on the steps leading to how the agent reached the decision of which insurance policy or policies to procure for the client.

In some matters, a claimant may allege a “special relationship” between the claimant and the agent. The special relationship allows for an affirmative continuing duty to provide unsolicited advice concerning the suitability, or advisability of the level of liability insurance selected by the client as well as the cost of such additional coverage. The leading case in Maryland is Sadler v. The Loomis Company, 776 A.2d 25(Md. App. 2000) which held that:

[I]t is the nature of the relationship, and not merely the number of years associated therewith that triggers the duty to advise. Some of the factors relevant to the developing entrustment between the insured and the insurer include: exercising broad discretion to service the insured’s needs; counseling the insured concerning specialized insurance coverage; holding oneself out as a highly skilled insurance expert coupled with the insured’s reliance upon the expertise; and receiving compensation above the customary premium paid, for expert advice provided.

The special relationship is rarely found in the typical agent – insured transaction. Knowing what acts create the special relationship is

the key factor here. However, the special relationship is generally not applicable in situations where the agent recommends specific coverages or policies such as crime, D&O, or EPLI. The special relationship does not apply to the selection of limits. The insured is the only party qualified to select limits, not the agent. As discussed in the first section, knowing what your client wants by obtaining the necessary information is critical.

What about an insured’s responsibility to read their policy? In the case of Twelve Knotts Limited Partnership v. Fireman’s Fund Insurance Company, et al., 589 A.2d 105 (Md. App. 1991), for the first time, a Maryland court held:

[W]hen an insured accepts a policy, he accepts all of its stipulations …. Where changes from the application appear in the delivered contract, under a more stringent doctrine the insured had a duty to examine it promptly and notify the company immediately of his refusal to accept it. If such policy is accepted or is retained an unreasonable length of time, the insured is presumed to have ratified any changes therein and to have agreed to all its terms.

By accepting this principle, the court agreed that the insured has a responsibility to read their policy. The holding in this opinion is not all encompassing and there are several exceptions to the responsibility to read a policy. Urging the insured to read the delivered policy is of paramount importance.

Unlike an insurance agent, an insured does not have a legal “duty” to read their policy. Rather, “the duty is not necessarily to read the policy but simply to act reasonably under the circumstances.” International Brotherhood of Teamsters v. Willis

311





Corroon Corp., 802 A.2d 1050 (Md. 2002). In other words, whether an insured should have read a policy depends on the relationship between the client and the insured, how much reliance was properly placed on the agent, and how difficult it would have been to learn or discover any problem with the policy language. Regardless of the manner in which the policy is delivered to the insured, the agent should always, in the transmittal correspondence, encourage the insured to read the policy and contact the agent with any questions, discrepancies or other problems with the policy.

Conclusion: Maryland courts treat insurance agents as professionals. The standard of care required to be exercised by an agent when engaging

with an insured is dependent upon such factors such as training, education, and designations. Careful attention to what the client wants – as opposed to unspoken expectations – will result in the insured getting the best insurance at the most commercially reasonable price and terms and the agent satisfied at having performed well on behalf of a pleased client. Be certain to get a completed application signed by the insured and acknowledgement that all pages have been reviewed. By far, the best defense an agent can secure if an E&O claim is made is documentation of all transactions with the client.

About the Author: Stanley L. Lipshultz is a consultant and expert witness in insurance matters. He

received his JD degree from the American University Washington College of Law in 1970 and the CPCU designation in 1989. He began his career as an outside adjuster and then liability supervisor for the Insurance Company of North America (INA). As a practicing attorney he defended insurance agents, brokers and their E&O insurers for over 25 years. In 1999 he started his own consulting practice and serves as an expert witness in disputes involving agents and brokers standard of care and errors and omissions, claims handling and bad faith. He has been an instructor for the Maryland Independent Insurance Agents since 1993, teaching an errors and omissions course and ethics, among many others.


7.5X4.625General JGS Umbrella Program ad

Service is our specialty; protecting you is our mission ®

960 Holmdel Road, Holmdel, NJ 07733

JGSI N S U R A N C E

A subsidiary of

Our Umbrella ProgramsGive You More OptionsPreferred Property Program gives you broader,more flexible coverage with a range of limits

Contact us for a quote:www.umbrellaprogram.com

[email protected]

Fast Service and more security are what you get with Preferred PropertyProgram. Our umbrella liability policies are written by XL Insurance with ChubbInsurance Group for excess layer – two of the industry’s most highly rated carriers.

• Options of $5 to $50 million in umbrella coverage.• Hi-Rise apartments up to 35 stories eligible.• Developer-sponsored board eligible.• Excess of D & O General Liability, Auto

Liability, and more

Celebrating Our 95th Year


The IIA Maryland Board of Directors held their September meeting at the MCVETS (Maryland Center for Veterans Education & Training) facility in Baltimore City. The staff, veterans and facility are truly amazing. As you know IIAM has supported MCVETS through donations and education. We have a program in place that allows veterans to attend our licensing programs and obtain their insurance license. During our meeting, Mark Marszal and Deborah Wagener, President and Treasurer of the Insurance Society of Baltimore presented IIAM with a $4,000 check. The check was given to the Education Foundation to be used to further our work with Maryland veterans and MCVETS. The donation is greatly appreciated. Please visit our website (http://iiamd.org/MCVET) and get the wish list of items for MCVETS. You can bring items to our classes, drop them off if you are in the area or call and we will pick up. Watch the slideshow on the MCVET website (http://www.mcvet.org/) so you too may see the great work done by this non-profit group. The only two criteria for admission are you must be a veteran and you must be homeless. Please, if you have any questions contact the association office or any board member.

Insurance Society of Baltimore Presents Check to IIAM at MCVETS


ALEXANDRIA, Virginia,— Spencer Houldin was inaugurated as the new chairman of the Independent Insurance Agents & Brokers of America (IIABA or the Big “I”), with Vaughn Graham as chairman-elect and Joe Leahy as vice chairman. Earlier in the day, John Costello was elected by IIABA’s board as an at-large executive committee member. The new officers and at-large member began their terms at the conclusion of the board meeting held in conjunction with the Big “I” Fall Leadership Conference in September in Chicago.

“The Big ‘I’ is honored to have such a distinguished group of professionals among the association’s leaders,” says Robert Rusbuldt, Big “I” president & CEO. “Spencer Houldin, Vaughn Graham, Joe Leahy and John Costello, along with the rest of the executive committee and officers, are an outstanding team of industry leaders who position us well for a productive year.”

Spencer M. Houldin is president of Ericson Insurance Advisors, a second generation insurance agency with offices in Litchfield County, Connecticut, and New York City. From 2008 - 2011, Houldin served as chairman of the Big “I” Government Affairs Committee and testified before numerous congressional committees on behalf of the association. He also represented the state of Connecticut on the IIABA Board from 2006 to 2011. In 2004, Houldin served as Independent Insurance Agents of Connecticut president. He has held seats on agent advisory councils for several insurance companies. Houldin is also active in his local community serving on the executive committees of Western Connecticut Health Network, which is a multi-hospital organization. He is also past president of the local

rotary. Houldin earned a Bachelor of Arts degree at Lafayette College. He resides in Roxbury, Connecticut, with his wife, Carol, and two children.

Vaughn Graham is president of Rich & Cartmill, Inc. headquartered in Tulsa, Oklahoma. He is a past chairman of the IIAO and has served on the Big “I” national board of directors. Graham was recognized in 2012 with IIAO’s highest honor, The Eagle of Excellence Award. At the national association level, since 2009 Graham has chaired the IIAA Member Services Board, served on the Big “I” Advantage Board, was a Trustee on the InsurPac Board, and was a member of the Agents & Brokers Roundtable. Graham remains active in his community with charitable and civic organizations. He is a graduate of the University of Oklahoma and resides in Tulsa, Oklahoma, with his wife, Candace. They have two children, Hayden and Vaughn, Jr.

Joseph “Joe” P. Leahy is co-owner and founder of Leahy and Brown Insurance & Realty, Inc. in Springfield, Massachusetts. He and his wife, Frances, started the agency in 1989. He previously served as chief of staff to Massachusetts State Sen. Martin T. Reilly (D-Springfield). At the state association level, Leahy was elected to the executive committee of the Massachusetts Association of Insurance Agents in 2001 and served as chairman in 2005 and Massachusetts director on the Big “I” national board from 2008 to 2013. At the national level, Leahy served on numerous Big ‘I” committees and task forces including the Government Affairs Committee, the Tax Task Force, and the InsurPac board of Trustees. Leahy also serves on the board for numerous other professional and civic organizations

in Massachusetts. He and his wife live in Northampton, Massachusetts, and have six children and seven grandchildren.

John Costello is first vice president and construction practice leader at First Niagara Risk Management in Rochester, New York. He served as Independent Insurance Agents & Brokers of New York (IIABNY) chair of the board from 2001 to 2002 and on the IIABNY Trusted Choice committee. Costello also served as Independent Insurance Agents Association of Monroe County president from 1992 to 1993 and was honored as its 1995 Insurance Professional of the Year. At the national level, he served on the IIABA Trusted Choice board of directors and Professional Liability Committee. Costello currently serves as the New York national director, former IIABA Finance Committee chair, and is a member of the IIABNY executive committee and board. He is a member of the Society of Certified Insurance Counselors and past president of the board of directors of Sunset House, a home for the terminally ill. He is also a past president of Brook-Lea Country Club and former director and alumni member of the National Ski Patrol at Bristol Mountain. Costello formerly served as vice president and treasurer of OASIS Adaptive Sports, a not for profit charity providing financial and emotional support to military veterans. Costello earned a Bachelor’s degree in finance at Villanova University.

The 2015-2016 Big “I” chairman, Randy Lanoix, who will serve on the committee as immediate past chair for one year, is president of Lanoix Insurance Agency in Lutcher and Brusly, Louisiana.

IIABA Installs New Leadership TeamConnecticut’s Spencer Houldin as Chairman, Oklahoma’s Vaughn Graham as Chairman-Elect, Massachusetts’s Joe Leahy as Vice Chairman; John Costello of New York Joins Executive Committee.

316



Maintaining internet visibility is a challenge faced by most independent insurance agents in today’s digital marketplace. First-Page web search presence increases the agency’s internet visibility and can be achieved through various means as described by Marty Agather, CPCU, ARM, in his article, “Great Agency Websites”¹. One way described, is through Search Engine Optimization. Search engines determine which sites have the newest relevant information. Therefore, updating agency websites with fresh content is an important element of ongoing search engine optimization.

Many agencies are using this strategy, however, after updating the agency website, some agencies are forgetting to keep or add a Privacy Statement. The responsibility of the agency to provide a Privacy Statement on the agency’s website may fall under federal laws such as the Gramm-Leach-Bliley Act (GLBA), Federal Crime Act (FCA), Health Insurance Portability and Accountability Act (HIPPA) & Fair Credit Reporting Act (FCRA). Members of IIAM have online access to reviews of these federal laws at http://www.iiamd.org/technicalinfo.

If the agency website collects data, some E&O carriers require the agency to include a Privacy Statement because it protects the agency by acknowledging that private information is collected and how that information is used and/or shared with others. In some states, having a privacy statement and maintaining the security of personal

data collected on a website is a regulatory requirement. Maryland’s COMAR 31.16.08 Privacy of Consumer Financial and Health Information² and the California Online Privacy Protection Act (CalOPPA)³ may affect the agency’s use of a Privacy Statement.

CalOPPA states:

“An operator of a commercial Web site or online service that collects personally identifiable information through the Internet about individual consumers residing in California who use or visit its commercial Web site or online service shall conspicuously post its privacy policy on its Web site“.

Regardless of where your website or online service originates, it may still collect personal information from customers who are California residents.

What is considered Personally Identifiable Information (PII)? The definition of PII varies among the federal and state laws.

Maryland Commercial Law §14-35014 defines PII as an individual’s first name or first initial and last name in combination with any one or more of the

following data elements, when the name or the data elements are not encrypted, redacted, or otherwise protected by another method that renders the information unreadable or unusable:

• A Social Security number;

• A driver’s license number;

• A financial account number, including a credit card number or debit card number, that in combination with any required security code, access code, or password, would permit access to an individual’s financial account; or

• An Individual Taxpayer Identification Number.

In a 2007 memorandum from the Executive Office of the President, Office of Management and Budget5, PII refers to “information which can be used to distinguish or trace an individual’s identity, such as their name, social security number, biometric records, etc. alone, or when combined with other personal or identifying information which is linked or linkable to a specific individual, such as date and place of birth, mother’s maiden name, etc.”

If the agency’s website collects specific information or simply provides an open text box for the consumer to enter any information – which could potentially include personally identifiable information, then the website should provide a Privacy Statement to advise the consumer what information is being collected, how their information will be used and who will have access to their information. A sample Privacy Statement is available to IIAM members in the Member Only section

Website Privacy StatementsBy Carla McGee, ACSR, RPLU

326317



of the website under Technical Information – www.iiamd.org. Other Privacy resources such as MIA Bulletins, Summaries, FAQ’s, and upcoming changes to GLBA are also located in this section.

IIAM Members also have access to the Agents Council for Technology (ACT) website – www.iiaba.net/ACT. ACT is a program within the Independent Insurance Agents and Brokers of America (IIABA) providing an open, action-oriented forum to address the critical technology workflow issues facing the Independent Agency system. IIAM members can access materials and articles related to social media, internet marketing, websites, system purchases, agency workflows and much more.

¹GREAT AGENCY WEBSITES, Marty Agather, CPCU, ARM, Trusted Choice Senior VP of Client Development

http://www.independentagent.com/Resources/AgencyManagement/ACT/Pages/marketing/Internet/Great%20Agency%20Website%20-%202014%20Apr.aspx

²Title 31 MARYLAND INSURANCE ADMINISTRATION Subtitle 16 MISCELLANEOUS Chapter 08 Privacy of Consumer Financial and Health Information

http://www.dsd.state.md.us/COMAR/SearchTitle.aspx?scope=31

³The Online Privacy Protection Act of 2003, Cal. Bus. & Prof. Code §§ 22575-22579 (2004).

http://leginfo.ca.gov/cgi-bin/displaycode?section=bpc&group=22001-23000&file=22575-22579 4Maryland Commercial Law §14-3501

http://mgaleg.maryland.gov/webmga/frmStatutesText.aspx?article=gcl&section=14-3501&ext=html&session=2017RS&tab=subject5 5Office of Management and Budget Memorandum M-07-16

https://www.whitehouse.gov/sites/default/files/omb/assets/omb/memoranda/fy2007/m07-16.pdf

“I have a sincere passion for helping FCCI policyholders manage risk and prevent loss. The best phone call I’ve gotten started with the words, ‘Brad, you saved my life.’ ”

Brad Ross, ARM, AIS Loss Control Manager FCCI Southeast Region Duluth, Georgia

Now, let’s talk about your business.

General liability • Auto • Property • Crime

Workers’ compensation • Umbrella

Inland marine • Agribusiness • Surety

Coverage available in 18 states. © 2016 FCCI

800-226-3224www.fcci-group.com

INDUSTRY EXPERTISE.PERSONAL SERVICE.

MMJ16_Ross_3.75x9.5.indd 1 2/16/16 10:40 AM



Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) has released its 2016 Best Practices Study (BPS) benchmarking analysis which found modest declines in organic growth but steady profitability across the group of 260 Best Practices Agencies studied. Among the 260 agencies, IIAM Member, HMS Insurance Associates of Hunt Valley made the cut. The Study:

The 2016 Best Practices Study benchmarking analysis includes in-depth discussion on four key challenges facing the insurance brokerage industry:

• Growth: The average Best Practices firm grew organically by 6.9% in 2015, down from the recent high of 9.0% in 2012. While growth has slowed, the Best Practices agencies have found that specialization can enhance growth and create new revenue streams.

• Consolidation: The consolidation pace has steadily increased since 2009, which M&A activity temporarily cooled due to the Great Recession. According to SNL Financial, 469 transactions were announced in 2015. The Best Practices agencies have been active in the acquisition market enhancing their footprint and increasing their agencies’ value.

• The workforce is aging: The average age of the employees at most agencies has significantly increased. Savvy firms are placing an emphasis on early succession planning for all key leadership positions. The Best Practices agency recognizes that their future independence hinges on creating an environment that attracts and retains talented employees to successfully perpetuate their business.

• Technology: New technologies may disrupt the traditional broker model. According to CB Insights, a firm that tracks technology investments in the insurance industry (which they call “Insurtech”), there were 82 investments in insurance start-ups during the first half of 2016 totaling more than $1 billion. These start-ups are permeating every segment of the insurance industry. Best Practices agencies are ensuring that they are well-informed on new technologies and products and continue to provide their clients with the expert advice and stellar service that consumers expect.

“The 2016 results indicate that Best Practices agencies continue to show that over the past 23 years that the study has tracked these benchmarks, agencies continue to adapt and lead the way to a brighter future, regardless of the challenges they face,” says Robert Rusbuldt, Big “I” president & CEO. “The independent insurance agency system remains stable and strong, despite various challenges.”

Every three years, the Big “I” collaborates with Reagan Consulting to select “Best Practices” firms throughout the nation for outstanding management and financial achievement in six revenue categories (less than $1,250,000; $1,250,000 to $2,500,000; $2,500,000 to $5,000,000; $5,000,000 to $10,000,000; $10,000,000 to $25,000,000; and more than $25,000,000). Agencies are nominated by either a Big “I” affiliated state association or an insurance company and qualified based on operational excellence. Financial and benchmarking information for the participating agencies are also reviewed and updated for the following two years.

This is the 24th edition of the annual benchmarking analysis and the first year of the current three-year study cycle.

The Best Practices Study was initiated by the Big “I” in 1993 as the foundation for efforts to improve agency performance and create higher valued agencies. The survey and study of leading independent insurance agencies documents the business practices of these “best” agencies and urges others to adopt similar practices.

The complete report can be purchased as an e-book (http://www.iiaba.net/cbsupx/education/evtpreview.aspx?evt=25734).


About HMS:

Founded in 1943, as The Hartman Agency, the firm was originally located in the Canton House in downtown Baltimore. The agency was established to provide surety bonds for area contractors. This service proved to be an integral part of Baltimore’s growth and development over the years. HMS was formed in 1992 and has since developed into one of the largest full-service independent insurance agencies in the United States providing comprehensive insurance products and services to individuals and businesses throughout the Mid-Atlantic region. Our professional account service teams develop commercial insurance solutions, risk management programs, surety bond programs and employee benefit packages for small and large business owners alike. HMS also provides a full range of personal insurance solutions for individuals; including our Private Client Group for affluent individuals.

Shelley Arnold, President, IIA Maryland spoke to HMS President and CEO Gary Berger.

Ms. Arnold: Why do you believe your agency was chosen to be a Best Practices Agency?Mr. Berger: There are several reasons including growth, financial performance, customer retention, our service model including technology investment and employee engagement.

316319



Terry Katz with husband

Stephen Katz before the

Catie Carnes Giddy-Up 5K.

Gary Berger, President & CEO

HMS Insurance Services


Lori Monsky of Safeco Insurance presents the “Make More Happen Award” check

to HMS for our commitment to community charities and service. Harry Trostle, Vice

President of Personal Lines accepts the check, surrounded by representatives from

his department and several other charity coordinators from HMS. HMS will in turn

present this check to HopeWell Cancer Support to benefit the wonderful services and

facilities they offer for cancer patients, survivors and their families. HMS has been a

long-time supporter of HopeWell.


Ms. Arnold: What one specific area do you think your agency exemplifies as a Best Practices Agency? Mr. Berger: I think it is hard to pinpoint one but clearly our growth, financial performance and expense allocation to training and education stood out in relation to the in-depth agency performance analysis report prepared by Reagan & Associates.

Ms. Arnold: How does HMS invest in their people? Mr. Berger: First let me say that being in a very competitive service industry, our people are our most important asset. Hiring well and giving our employees the proper training and educational opportunities are vital to our ability to survive as a business. We tell our employees they have not chosen a job, when coming to HMS, but a profession and as such there is an expectation that they will participate in the many professional education opportunities that are available. Terry Katz, vice president of education, training, quality assurance and claims, is responsible for promoting this philosophy within our organization and the results speak for themselves. 88% of our staff has at least one professional designation and 23 additional employees are working towards one. In the past year we have held over 50 in house training classes and continuing education seminars in addition to the in house designation classes that we offer for AAI and AINS. This investment matters in that we expect our staff to serve our customers well and their training and insurance knowledge is obviously important in that goal.

Ms. Arnold: What is the benefit of being on the HMS team?Mr. Berger: Aside from the obvious of competitive compensations and benefits I feel we offer great opportunity. There is a clear track outlined for our employees of what it takes to be qualified for promotion within the company. Our growth makes this opportunity readily available for those within the organization. I also feel like our employees feel secure at HMS. Since the company was purchased in 1992 we have never had to downsize or lay off any employees, reduce hours or reduce compensation for financial reasons.

Ms. Arnold: What goals are important to set and measure?Mr. Berger: We measure a lot. Client retention and customer satisfaction as well as employee satisfaction come to mind very quickly if pure production metrics are not to be included. We survey both our clients and our employees on a regular basis. Some of the best practices our agency has put into place come from those surveys.

Ms. Arnold: How do you and your staff monitor legislative and regulatory changes within the industry?Mr. Berger: We belong to the Independent Insurance Agents and Brokers of Maryland and America and the Council of Insurance Agents and Brokers among other organizations. They do an excellent job of keeping us up to date on legislative and regulatory changes on both a state and national level. We have been very involved in these organizations and supported their efforts. Again Terry Katz is a past president and board member of IIAM and this has certainly given us firsthand information that impacts us and our customers. I would also add the current Insurance Commissioner, Al Redmer and his staff are working very closely with the agent community as well.

Ms. Arnold: What is the biggest challenge facing independent agents today?Mr. Berger: This could be an article unto itself as I think there are many. We all need to stay relevant and bring value to our customers.

Ms. Arnold: What does being a Best Practices Agency do for you?Mr. Berger: I feel it is another way to differentiate ourselves from other agencies and we will certainly promote our inclusion. There aren’t very many in Maryland. The benchmarking to other agencies our size throughout the United States is also very valuable. It certainly lets us know where we are excelling and where we could make improvement. I also think it validates the investments we have made and continue to make in our agency to perform at the level necessary to qualify as a Best Practices Agency. My only regret is that we waited until this year to apply. So we qualified in our first attempt.

Ms. Arnold: What can the IIAM, your trade association, do to assist agencies in becoming “Best Practices” agencies? Mr. Berger: Recognizing that many agency owners don’t like anyone telling them what to do, IIAM should continue to support




education and programs that can help agencies be better. Keep them informed and continue to protect them in Annapolis and Washington, DC. The rest is up to them.

HMS Insurance was the recipient of the Dan Fulwider Award for Community Involvement in 2013. This award carries a $2500 check issued to the charity of their choice. HMS is involved in multiple charities and chose HopeWell as the recipient. They are also involved with the Polar Bear Plunge, the Kennedy Krieger Festival of Trees, the Jessica Meredith Jacobsen Memorial 5K, the Catie Carnes Giddy Up 5K to benefit the Juvenile Diabetes Association, the United Way and more. They truly give back to their community.

HMS joins IIA Maryland’s list of those named Best Practices Agencies over the past years: Atlantic, Smith Cropper & Deeley, The Avon-Dixon Agency, Basil-Voges, ISG International, Joseph W. McCartin Agency, L.E. Goldsborough & Son, RCM&D and Rossman-Hurt-Hoffman.

HMS proudly sponsors the REACHOUT & RUN 5K for HopeWell Cancer Support.


Mutual Benefit Group Joins Trusted Choice®Pennsylvania-based carrier is latest brand movement company partner.

ALEXANDRIA, Virginia–Mutual Benefit Group is the newest member of the Trusted Choice® consumer branding program for independent insurance agents and brokers. Mutual Benefit Group, headquartered in Huntingdon, Pennsylvania, has joined 70 other leading companies nationwide as a Trusted Choice® company partner.

“Trusted Choice® is excited to welcome Mutual Benefit Group as a company partner,” said Dave Evans, Trusted Choice® executive director. “For more than 100 years, Mutual Benefit Group has partnered with independent insurance agents to provide personalized service to

their policyholders. By joining forces with Trusted Choice®, the Mutual Benefit Group team is further demonstrating its commitment to the independent agent community and serving the needs of agents and insurance customers.”

In 1908, Mutual Benefit Group was founded by 14 businessmen in a small Pennsylvania town built entirely of wooden structures. They realized they needed a way to protect themselves from the threat of fire so they pooled their financial resources to form a mutual insurance association. That association eventually became known as Mutual Benefit Insurance Company and today is a member of Mutual Benefit Group that offers a full line of personal and commercial insurance coverage, including homeowners, automobile,

commercial package plans, business owners, contractors, workers’ compensation, inland marine, and umbrella through its member underwriting companies, Mutual Benefit Insurance Company and Select Risk Insurance Company.

“Mutual Benefit has always sold its coverage exclusively through independent agents because we’ve seen first-hand how the advice and advocacy of agents benefit our policyholders,” says Kevin O’Brien, Mutual Benefit Group senior vice president of insurance. “Supporting Trusted Choice® is one more way that Mutual Benefit can demonstrate its strong belief in the invaluable contributions independent agents make to the protection of the consumers they serve and to the vitality of the insurance industry.”


tidbits1

Maryland Insurance Department’s Website Ranks High In New AnalysisA new NerdWallet analysis looked at insurance departments across the country, to determine how helpful their sites were to the average consumer in their state.

Insurance is a complicated issue and state regulated, meaning that there are fifty one (including the District of Columbia) organizations regulating insurance. How do the insurance departments ‘stack up’ when it comes to consumer helpfulness?

The findings were helpful and Maryland ranked 4th. The analysis

was based on four key categories:

• Insurance Rate Comparisons

• Insurance Complaints

• Consumer Assistance and

• Consumer Education and Resources

The Maryland Insurance Administration had the fourth-highest score, receiving an 87% in the NerdWallet analysis. Maryland publishes updated premium comparisons for both homeowners and automobile in their annual rate guides. They also publish complaint data for all major lines, auto, health, homeowners’ and life, within their annual reports. The MIA received full points for their

state-specific consumer education series. This series is produced in-house by the MIA.

As for consumer assistance, when researchers called the agency’s consumer helpline, their question was answered within four minutes.

Our congratulations to the MIA for their achievement. The only departments with higher scores were Texas (98%); Kansas (93%) and Colorado (91%).

NerdWallet’s only criticism is that the site could be more user friendly. For more information see https://www.nerdwallet.com/blog/insurance/state-insurance-websites-ranked/.

2

andbits


Chesapeake Employers Promotes Marty Balenger to Underwriting Director (TOWSON, Md.) — Marty Balenger, AU, AINS, was recently promoted to Director of Underwriting at Chesapeake Employers’ Insurance Company.

In this position, Ms. Balenger

is responsible for leading and directing the daily activities and operations of the Underwriting department, while ensuring the department achieves its organizational goals, objectives and standards. Previously, she was an Underwriting Technical Specialist providing underwriting expertise to corporate initiatives.

Ms. Balenger joined Chesapeake

Employers as a Senior Underwriter in 2003, and since 2011 she has held the position of Underwriting Technical Specialist. Previously, Ms. Balenger held various underwriting positions with a large multi-line carrier. She possesses an Associate in General Insurance (AINS) and Associate in Commercial Underwriting (AU).

3

Agents Council for Technology Releases “Carrier Bridging Best Practices” RecommendationsALEXANDRIA, Virginia—The Agents Council for Technology (ACT) Small Commercial Rating work group has released “Carrier Bridging Best Practices” recommendations. This project’s intention is to assist with increased Bridging adoption among agents in using carrier portals and ultimately help carriers become the ‘carrier of choice’ of their agents.

“Bridging” is the process of an agency transmitting existing quote data from its agency management system where data is exported (‘bridged’) from the management system, then ‘bridged’ into the carrier’s agency portal to complete the quote in fewer keystrokes.

“These recommendations are an important step to reaching the ultimate goal of Real-Time

Comparative Rating but, even more importantly, give our distribution channel the strategic template needed to implement consistent, intuitive workflows,” says Ron Berg, ACT executive director. “Ultimately, we hope the Small Commercial Rating work group’s hard work will lead to an increase in return on investment in bridging and carrier portals.”

The guiding principles for these recommendations were provided by Best Practice carriers for the development, testing and rollout phases. As one example, bridging development should focus on the following as guiding principles (listed in order of priority assigned by surveyed carriers):

• Agent ease-of-use (overall intuitive flow and integration into workflow)

• Minimal field entry

• Data prefill functionality wherever possible

• Intuitive error messages (guides correction on edit mismatch, or

missing field entry)

• Good training & support (dedicated team to handle training & support)

• Minimal underwriting questions

• Speed – returning a result quickly

• Interview process (screen dedicated to confirming accuracy on required fields)

• Quote accuracy (returning a bindable quote)

• Use of ACORD XML

The work group is co-chaired by Jim Armitage, owner of Arroyo Insurance in Arcadia, California, and Susan LaBarre, Liberty Mutual Insurance director of agency automation and quoting.

Additional detailed insights on the recommendations as well as the full working document is available on the ACT website. (http://www.independentagent.com/Resources/AgencyManagement/ACT/Pages/default.aspx)

4


Trusted Choice® Social Media Campaign Raises $150,000 for Make-A-Wish®

ALEXANDRIA, Virginia—Trusted Choice®, the consumer branding program for independent insurance agents and brokers, exceeded its goal of 15,000 Facebook “shares” during the month of August in its sixth annual social media campaign to raise money for Make-A-Wish.

For every “share” from the Trusted Choice® Facebook page (www.facebook.com/TrustedChoice) during the month of August, Trusted Choice® donated $10 to Make-A-Wish, up to $150,000. Trusted Choice® committed to donating a minimum of $100,000 and a maximum of $150,000 with this campaign and reached the goal of 15,000 “shares” before the end of the month.

“Trusted Choice® is proud to

continue utilizing social media in such a positive way to raise funds and awareness for Make-A-Wish,” says Dave Evans, Trusted Choice® executive director. “We have sponsored wishes for 46 children with life-threatening medical conditions as a result of this annual social media campaign since 2011. We are pleased to announce that our $150,000 contribution will make even more life-changing wishes possible.”

In addition, Trusted Choice® is providing 40 grants this year, totaling $300,000, to Make-A-Wish chapters through a local sponsorship initiative.

This is the sixth year Trusted Choice® has held a social media campaign to benefit Make-A-Wish. The campaigns have raised more than $930,000 and Trusted Choice® has contributed an additional $1.8 million through

the local grant sponsorships. Collectively, Trusted Choice® has donated more than $2.5 million to Make-A-Wish since 2011.

“Independent insurance agents and brokers have an amazing track record of active participation and charitable contributions in hundreds of communities across the country and this annual campaign is an important opportunity for all of us to join forces for a very worthy, national effort,” says Robert Rusbuldt, Trusted Choice® president and Big “I” president & CEO. “Make-A-Wish is there for wish kids and their families in their greatest time of need and we are honored to continue our relationship with this wonderful organization.”

The social media campaign has also successfully promoted Trusted Choice® to a broader audience. During the month of August, 19,796 posts from the Trusted Choice Facebook page were shared.

5

morebits

Big “I” Applauds House Action to Delay Overtime RuleThe U.S. House of Representatives passes delay of harmful overtime rule.

WASHINGTON, D.C.—The Big “I” applauds the U.S. House of Representatives for passing H.R. 6094, the “Regulatory Relief for Small Businesses, Schools, and Nonprofits Act,” by Rep. Tim Walberg (R-Michigan), to delay implementation of the Department of Labor (DOL) overtime rule for six months, until June 1, 2017.

“This overtime rule will unnecessarily

increase burdens on independent insurance agencies, many of which are small businesses,” says Charles Symington, Big “I” senior vice president of external and government affairs. “The overtime rule will also hurt employees and insurance consumers by reducing employee flexibility and negatively impacting the ability of insurance agencies to respond to policyholders during emergencies outside of normal business hours.”

Among its many provisions, the DOL overtime rule, which was finalized in May, raises by 100% (from $23,660 to $47,476) the monetary

threshold at which employees can qualify for the so-called “white collar” exemptions from overtime pay, effective December 1. The new DOL rule also requires that the salary threshold be automatically adjusted every three years.

“The Big ‘I’ will continue working to mitigate the harmful consequences of the rule on Big ‘I’ members and their employees,” continues Symington. “The Big ‘I’ is thankful to the House for taking action to delay this harmful rule and urges the Senate to act before the rule takes effect on December 1.”

6

It is the job of all Risk Managers to mitigate their clients’ liability by utilizing all tools at their disposal.

Clients buy auto insurance to protect them on the road, home owners insurance to protect their residence and life insurance to protect their way of life. Typically, Auto and Home Owners Insurance coverage renews each year and the insured is given detailed information about their coverage including the premium cost, amount of coverage and duration of the policy.

An extremely lucrative way to boost Life Insurance sales in your agency and round out your client offerings is through policy reviews. Life Insurance is unique in that:

• Older life insurance policies may have been designed with assumptions that are no longer reasonable in today’s interest rate environment.

• Premiums required to maintain existing policies may need to be increased, or paid longer than the period expected at time of purchase due to underperformance.

• Medical advancements in recent years may allow the insured to improve their insurance rates.

• Original policies may be outdated as new insurance products that potentially provide more benefits and features become available.

Four Key Points Covered In A Policy Review:

1. Identify policies in danger of lapse or increased premium requirement due to underperformance.

2. Survey the marketplace for products that may provide long-term coverage, additional benefits and

features such as disability and/or long-term care coverage, and provide a better premium structure for your clients.

3. Analyze the best underwriting class available through our direct relationships with over 20 insurance carriers.

4. Provide details of carrier financial strength and how their ratings rank in relation to the overall landscape and competitors.

CASE STUDY:

Mr. Smith had purchased a policy when he was 37 years old. The policy had a large premium and the ability to build substantial cash value. Mr. Smith is now 60 years old and entering retirement. He would like to limit his out of pocket expenses while maintaining his life insurance coverage and protect against the costs of Long Term Care.

Mr. Smith decided to look at new coverage and has qualified for Preferred. Non-Tobacco rates.

Product: Universal Life

Coverage Amount: $1,000,000

Long Term Care: $1,000,000 of Guaranteed Long Term Care Benefit with a maximum monthly allowance of $20,000. Payable for qualified long term care services including: Home Health Care, Nursing Home Care, Assisted Living Care and Adult Day Care.

Premium: $239,497 of cash value from the existing policy. Zero out-of-pocket expense and no future premium required.

Cash Value: Potential Cash Value In Year 10: $259,466

Policy Duration: Death benefit guaranteed to Mr. Smith’s age 81 and

projected to age 105.

SUMMARY:

• Maintain death benefit.

• Reduce expenses in retirement – $0 future outlay. $8,200 annual savings.

• Potential Cash accumulation.

• Guaranteed Tax Free Long Term Care benefit

How do I get started?

Partnering with Belman Klein Associates to offer a complete and comprehensive review of current life insurance policies can help avoid unexpected product failure and avoid risks to your clients legacy planning. For the past 40 years, our firm has provided unbiased analysis of in-force policies and comparisons to the newest and most innovative products on the market.

We provide you a turn-key program to begin offering your clients policy reviews, starting with an authorization to retrieve in-force information on your client’s behalf. We then do all the work including procuring in force product information and providing a comprehensive analysis to present to your client that thoroughly analyzes their existing portfolio while comparing it to the overall marketplace.

Belman Klein Associates and the IIAMDAs an associate member of the IIAMD we look forward to working with other members to help them round out their business by partnering to bring our services to their clients. In 2017 we will continue our Life Insurance Made Easy series in the Maryland Messenger.

For more information contact Scott Zilber at [email protected] or 1-800-729-6007

life

323324marylandmessenger 2016 julaug 326marylandmessenger 2016 novdec

lifeinsurancemadeeasyThe Need for Policy Review:by Scott Zilber

Since the current version of the Form I-9, Employment Eligibility Verification, expired on March 31, 2016, employers have been awaiting a new, updated form. On August 25, 2016, the federal Office of Management and Budget (OMB) approved a revised Form I-9. Consequently, the U.S. Citizenship and Immigration Services (USCIS) has 90 days to update the form and must publish a revised form by November 22, 2016. According to the OMB Notice of Action, this new Form I-9 will expire on August 31, 2019 — a three-year validation period similar to previous validation periods. In the meantime, employers may continue using the current version of Form I-9 (with a revision date of 03/08/2013 N) until January 21, 2017. After January 21, 2017, all previous versions of Form I-9 will be invalid.

Changes to the Form

Many of the Form I-9 changes were designed to help with completing the form and assist in reducing technical errors. For instance, new smart error-checking features have been added when the form is completed using an Adobe PDF viewer or application. Some other new features include:

• Addition of a supplement where more than one preparer or translator is used to complete Section 1 (translator certification where an employee must check that he or she did or did not use a preparer or translator in completing the form).

• Controls within the form for users to electronically access the instructions, print the form, and

clear the form.

• Drop-down calendars and lists.

• Embedded instructions for completing each field.

• Provision of additional spaces to enter multiple preparers and translators.

• Quick-response matrix barcode (QR code) that generates once the form is printed and may be used to streamline audit processes.

• Rather than all other names used, only requiring employees to provide other last names used in Section 1.

• Removing the requirement that aliens authorized to work provide both foreign passport information and Form I-94 in Section 1 after attestation of such status.

• Separating instructions from the form.

• Specific area to enter additional information that employers are currently required to notate in the form’s margins.

• Validations on certain fields to ensure information is entered correctly.

The new Form I-9 instructions also provide revised abbreviations for use on the form. Employers should use these abbreviations although longer, commonly used abbreviations may still be acceptable. For example, “Permanent Resident Card” is now “Perm. Resident Card (Form I-551).”

Related Rulemaking

Also important, the federal Office of Special Counsel (OSC) has proposed to revise regulations implementing a section of the Immigration and Nationality Act concerning unfair immigration-related employment practices. In these revised regulations, the OSC proposes a new definition of discrimination along with a revision

to the language related to unfair documentary practices. The proposed definition clarifies that discrimination is the act of intentionally treating an individual differently, regardless of the explanation for the discrimination, and regardless of whether it is because of animus or hostility, to include the process related to completing the Form I-9.

There is also a proposed unfair documentary practices portion to prohibit unfair immigration-related employment practices. It would replace the current document abuse provision, which prohibits requiring more or different documents than presented if the employee presented documents from the list of acceptable documents. This also goes to an employer’s rejection of employee-completed Section 1 — which may be considered a discriminatory employment practice.

Currently, the USCIS provides this guidance in the prevention of discrimination in the Form I-9 process.

What to Do

As a response to the many pending changes to the Form I-9 and related laws, the next step for employers is to review current policies and procedures. For instance, employers will still be permitted to print and complete the new Form I-9 by hand, but that may not be a permanent option. In fact, employers and employees may elect to fill out any or all sections of the form by computer, by hand (printed), or a combination of both.

ThinkHR will keep you informed as more information is released. The USCIS suggests that employers visit I-9 Central and subscribe to GovDelivery to ensure receipt of the latest news on the revised Form I-9.

The post ‘Finally, a New I-9’ appeared first on ThinkHR Blog | State & Federal Law Updates.


Finally, a New I-9


You don’t have to be the first mover or the biggest adopter of technology, but you do need to stay relevant and not fall behind the curve.

We make sure we are keeping up by treating tech as another employee. We allocate to tech as if it were part of our mandatory payroll. We need to in order to stay relevant and ahead of the curve. But staying ahead of the curve doesn’t mean buying every shiny item in the shop. We don’t try to be radical with tech adoption, but we’re not going to be last either.

If we look at a technology and can see that there’s going to be a good return on investment, we go for it, but before we do, we always ask what the break-even point is.

At Huff Insurance Agency, our technology choices also dovetail with our internal workflow changes.

We’re in a dynamic business. As technology changes, we have to respond. There are many angles to pursue when it comes to what the tech evolution offers. Those include improvements to the customer experience, additions to product offerings and staff education.

Before we roll out any new technology, a small team tests it and figures out how the workflow or other processes have to change; then, we introduce it to the staff. A lot of agencies forget to change their workflow, and that just adds work. We look at what processes can be deleted or changed; then, we bring it to the staff for use.

What about Current Systems?The integration between Huff’s current agency management system and any new technology is key. Usually integration is done between the two vendors—the AMS company and new technology providers. Without that, the agency would

have to migrate data and manually do reports. That is way too time consuming. Migration and integration is one of the first questions we ask.

We use seven or eight vendors for the things we do because no one system does it all. And that’s OK. We are hunting for cutting-edge solutions that help us stand out. What would differentiate Huff if everything we use comes from inside the agency management system—an agency management system that other firms also have full use of?

We definitely want open communication between our AMS and our third-party systems. Some agency management systems are not as free with giving access to vendors because of security or privacy issues, but we find most parties are willing to work together. With newly developing open-architecture systems, we may see more application program interface—you might see that referred to as API—but those new systems might not yet be as rich in product offerings as the standard agency management systems.

We haven’t switched our AMS because of the amount of downtime and potential cost. Something has to be worth the pain to make that kind of change. Smaller software add-ons bring us a lot of improvement but take us offline for only an hour or two. And we have made a great deal of progress on efficiency and customer service with those add-ons.

The most important of those was the incorporation of e-signature, which streamlined workflow. Our closing success went way up after adding it. We use it for many things other than applications, too, such as confirming we got a document. It is much more efficient than certified mail, for example.

We got a ton of workload efficiency out of download and activity notes also. In fact, we lobby for those technologies with our carriers. It definitely helps expand carrier acceptance and use of technologies when agencies push for it.

Immediate Steps You Can TakeBeyond grabbing the low-hanging fruit from applications like e-signature and download, make sure your agency can be found online. A good website reaffirms your marketing authenticity. We don’t hire a firm to do our search engine optimization. We do that in-house; it’s easy enough to learn. We’ve budgeted some of our marketing funds to get that little push from Google’s AdWords, and it has really paid off. We get quite a few calls—more than other agencies in our area—because of our online presence.

A good website allows us to be open for business 24/7 and gives customers the opportunity to do business the way they want to. They can use the online interfaces or simply move from the initial stage of shopping to a more personal interaction with one of our agents.

The bottom line for us at Huff Insurance is that if we are providing value—through automated processes, personal expertise and quality interaction—there is no reason the customer will want to leave. We find our tailored solution to technology adoption a great way to please clients and staff within a budget that works for our agency. We adopt what we need to enhance education for our staff and choice for our clients, and that works for our employees and our customers.

Nancy Nicklow is president of Pasadena, Md.-based Huff Insurance Agency. Jerry Nicklow, Nancy’s husband, is chief financial officer.

Quality Tech Reaffirms Agency RelevanceBy Nancy Nicklow and Jerry Nicklow


educationcorner nov dec

November 16, 2016 Contractual Risk Transfer in Construction Don Dudey, CPCU9:00 AM - 4:30 PM

November 17, 2016E&O Risk ManagementMeeting the Challenges of ChangeStanley Lipshultz, CPCU9:00 AM - 3:30 PM

November 22, 2016Agency Errors & Omissions Shelley Arnold, CPCU, ACSR, AAI, AINS9:00 AM - 3:30 PM

December 1, 2016 The Basics of Flood Insurance Annette Winston9:00 AM - 11:00 AM

December 1, 2016 Ethical Guidelines for Insurance Professionals - Ethics 311Shelley Arnold, CPCU, ACSR, AAI, AINS1:00 PM - 4:00 PM

December 7, 2016 Agency Management Tools & ProcessesNancy Nicklow, CPCU, AAI9:00 AM - 4:30 PM

Deecember 20, 2016 Professional Development & Account Management Shelley Arnold, CPCU, ACSR, AAI, AINS9:00 AM - 3:30 PM

“Elections belong to the people. It’s their

decision. If they decide to turn their back

on the fire and burn their behinds, then

they will just have to sit on their blisters.”

-- Abraham Lincoln


Maryland’s Education Department gets the “GOLD”

The IIA Maryland was among the Big “I” independent insurance agent associations recognized by the Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) with Excellence in Insurance Education (EIE) Awards at the association’s Education Convocation in Chicago.

Rebekah Langford, ACSR, AAI, AINS, AIS, IIA Maryland’s Education Director accepted the award which was presented in part for IIA Maryland’s efforts to assist veterans by providing the licensing program at no charge. This and the many other programs and services provided by the IIA Maryland Association provide a premiere benefit for their membership.

“The Big ‘I’ Excellence in Insurance Education awards recognize the outstanding contributions by Big ‘I’ state associations through extraordinary efforts to promote quality insurance education,” says Sue Knobeloch, past chair of the Big “I” Virtual University committee

and executive director of Association of Risk Mangers Northwest in Seattle, Washington. “Through a variety of traditional and cutting edge educational programs, recipients of this award have proven their dedication, passion and commitment to education.”

The EIE awards celebrate and recognize state associations and staff who have made significant contributions to education for their members and the industry in the key area of class offerings, continuing education (CE), professionalism, designation offerings, industry collaboration, planning goals, marketing, resources and more. Each entrant is scored based on a state’s overall educational offerings in a variety of areas and a short essay detailing its overall education programs.

Congratulations Rebekah!


THE COMPLETE PACKAGE.

You actually can have it all.

SIAA provides a wide range of resources to help agencies increase sales, retention, income and value.

Find out what a membership with SIAA, the proven total solution for independent agencies, can do for you.

[email protected] | 443-692-4000 | www.pinsiaa.com


MOMENTS LIKE THIS.

THEY’RE WHAT WE WORK FOR EVERY DAY.

Every day, all across Maryland, Chesapeake Employers Insurance helps employers keep workers safe from accidents and injuries. We specialize in helping contain your workers’ comp costs through:

u safety guidance u effective medical cost reviewu competitive pricing u vigilant fraud protectionu responsive claims management

With our local presence and unwavering dedication to Maryland business owners and their employees, Chesapeake has become Maryland’s largest workers’ compensation insurance company.

To learn more, connect with your local agent or visit ceiwc.com.

P R O U D T O H A V E E A R N E D A N A - ( E X C E L L E N T ) F I N A N C I A L S T R E N G T H R AT I N G F R O M A . M . B E S T

Advertiser: Chesapeake Employers

Publication: Maryland Messenger Insertion Date: Nov/Dec 2015

Ad Size: 7.25” x 9.5” Full Page/4C Title: Moments / Dad & Child

If you have received this publication material in error, or have any questions about it please contact the traffic dept. at Weber Shandwick at (410) 558 2100.

messenger MARYLAND - bigimd.com NovDec... · • Small-Business, Multi-Line Coverage • 3rd...

Documents

Transcript of messenger MARYLAND - bigimd.com NovDec... · • Small-Business, Multi-Line Coverage • 3rd...