NAPSLO - WSIA · NAPSLO 2012 Annual Report | 3 Mission NAPSLO is an association of insurance...

2012 Annual Report

NAPSLONational Association of Professional Surplus Lines Offices, Ltd.

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2 | NAPSLO 2012 Annual Report

Association ProfileThe National Association of Professional Surplus Lines Offices, Ltd. (NAPSLO) is a national professional trade association representing the surplus lines industry and the wholesale insurance distribution system. Since it was founded in 1975, NAPSLO has become the authoritative voice of surplus lines. Acting as a source of information, NAPSLO spends a great deal of time identifying and explaining to regulators, other segments of the industry, the media and the public the vital role surplus lines plays in the insurance industry.

3,440 attendees. I attribute this to growing optimism and enthusiasm within our industry, coupled with NAPSLO’s continued expansion of valuable services and benefits to members.

NAPSLO’s schools and educational programs are experiencing the same record-breaking success. Not only have our three schools – E&S School, Marcus Payne NAPSLO Advanced School and the Executive Leadership School – continued to draw more students, but our two online courses – Surplus Lines Compliance and Surplus Lines Fundamentals, which were introduced in 2011 and 2012, respectively – have been very popular. All of these programs continue to receive exceptional ratings in student feedback surveys. And we are finding most professionals are using these programs in the manner in which they were created – to offer professional development throughout our members’ surplus lines career.

Not long ago, surplus lines brokers were apportioning premium, calculating taxes at multiple tax rates and making separate tax filings and payments in every jurisdiction involved in a multi-state insurance risk. The NRRA ushered in a national framework for uniformity and efficiency in the regulation and taxation of the surplus lines industry, and we have made great strides in the implementation of the NRRA. To date, 49 jurisdictions

Dear Members,

On behalf of the NAPSLO Officers and Board of Directors, I am pleased to present NAPSLO’s 2012 Annual Report, highlighting the activities, accomplishments and financial health of the Association during the past fiscal year.

This past year was characterized by growth, enthusiasm and interest in the surplus lines business. From our ever-increasing number of delegates attending our events and completing our educational courses, to the near-nationwide acceptance of the Nonadmitted and Reinsurance Reform Act (NRRA) – the efforts NAPSLO is making to support industry networking, training and legislative advocacy are clear in our 2012 results.

The employees of our 1,512 member offices are more engaged than ever. More than 560 leaders of our industry attended the 2012 NAPSLO Mid-Year Leadership Forum in Scottsdale, Ariz., representing a near 17 percent increase over 2011. The 2012 NAPSLO Annual Convention in Atlanta was the largest in the Association’s history – drawing

President’s Message

NAPSLO 2012 Annual Report | 3

MissionNAPSLO is an association of insurance brokers, agents and underwriters who are committed to the wholesale value distribution system and the surplus lines industry. The Association provides networking opportunities, regulatory and legislative advocacy, and educational activities on behalf of its members.

ValuesNAPSLO is committed to the wholesale distribution system, freedom from rate and form regulations, high ethical standards, professionalism and added value.

INDEXValue of NAPSLO Member Services .......................... 4-5Convention Committee ............................................. 6-7Education Committee ................................................... 8Legislative Committee .................................................. 9Career Awareness & Internship Committee .......... 10-11Mid-Year Committee .................................................. 12Communications & Technology Committee ............... 13Membership & Ethics Committee .............................. 14Political Action Committee ......................................... 15Budget, Finance, Audit & Investments Committee .... 16NAPSLO Finances ........................................................ 17NAPSLO 2012-2013 Board of Directors ...................... 18NAPSLO 2012-2013 Committee Members ................. 19

Our committees continue to deliver tremendous accomplishments through the hard work and dedication of more than 150 volunteer members. From planning NAPSLO events, to supporting our internship program and career awareness activities to develop talent for our industry, to advancing industry technology standards, to building NAPSLO’s Next Generation with now close to 600 members – our work simply could not be done without our committee volunteers, the NAPSLO Board of Directors and the NAPSLO team. I offer my sincere thanks and appreciation to those of you participating in and supporting NAPSLO. Each of you plays an important role in providing and maximizing NAPSLO’s value to its membership, and your dedication is evident in the accomplishments throughout the Annual Report.

I urge you to read through this Annual Report – it will illustrate how your firm’s membership works for you, and I hope it makes you proud to be a member of NAPSLO. Thank you for all you do to make NAPSLO a great success and leader in the industry.

Matt NicholsPresident, 2012-2013

have implemented the NRRA with 46 jurisdictions, representing more than 80 percent of nationwide premium volume, collecting and retaining surplus lines taxes as the home state. Our work continues to promote the uniform implementation of the NRRA’s two-prong criteria for insurer eligibility, and to improve uniformity in forms, filing requirements, dates and procedures for the reporting and payment of surplus lines premium taxes. NAPSLO’s Legislative Committee continues to develop and facilitate uniform standards and processes nationwide.

I can’t mention our progress in affecting legislation, without acknowledging the generous support of individual NAPSLO members. Since 2007, more than $310,000 has been raised to tell NAPSLO’s story and educate federal lawmakers about the most important issues facing the surplus lines insurance industry. 2012 was the second largest year of donations since the PAC was formed, and it continues to be instrumental in supporting candidates for U.S. Congress whose philosophies and attitudes are consistent with the goals of NAPSLO, the surplus lines industry and the wholesale distribution system.

The Association’s financial position is strong and key to supporting critical resources for NAPSLO to provide valuable member services and to promote, advocate and protect our industry. Additional financial information and metrics are reflected within the Annual Report.


Legislation and Regulation• NRRA enacted in 2010 and effective July 2011 and state implementation through 2012• Advocacy for uniform NRRA implementation to all states and the NAIC – 49 states implemented NRRA-enabling legislation through 2012• Investment of $953,963 and $601,887 in consulting services toward NRRA implementation and advocacy efforts nationwide in 2011 and 2012, respectively• Development of comprehensive NRRA compliance resources on NAPSLO’s website• 14 members of NAPSLO’s Legislative Committee and Board met with members of Congress and their senior staff to discuss the NRRA and other insurance legislative issues important to NAPSLO and the surplus lines industry

• Led coalition of trade associations in advocacy with the NAIC and state regulators for NRRA compliance• NAPSLO PAC fundraising in excess of $310,000 since 2007, with 2012 representing second largest year of fundraising since the PAC was formed

NAPSLO closed 2012 with 727 members, representing 1,512 offices. Each and every NAPSLO member plays an important role in providing and maximizing NAPSLO’s value.

Value of NAPSLO Member Services...

Meetings• 2012 NAPSLO Annual Convention – 3,440 attendees• 2012 NAPSLO Mid-Year Leadership Forum – 561 attendees

ADVOCATING

NETWORKING

Derek Hughes/NAPSLO Educational Foundation• Sponsor of 2012 A.M. Best Special Report – U.S. Surplus Lines Market Review• $568,067 raised in 2011-2012 • $6.3 million in assets as of July 31, 2012• 14 college scholarships sponsored totaling $67,500• 109 ASLI designees conferred in 2012 – 1,835 since 1997

Schools and Education Programs• Excess & Surplus Lines School – 79 students• Marcus Payne NAPSLO Advanced School – 59 students• Executive Leadership School – 32 students• Online Surplus Lines Compliance Program – 499 students• Online Surplus Lines Fundamentals – 65 students

EDUCATING


Career Awareness, Internship and Next Generation• Career Awareness initiative to attract young professionals to surplus lines business • 13 internships sponsored totaling more than $87,000• Formed in 2008, NAPSLO Next Generation has more than 500 members• Outreach to 15 colleges and universities

News and Public Relations• 83,140 visits to napslo.org websites • 6,255 visits to NAPSLO’s blog and 62 posts• 2,442 members of NAPSLO’s LinkedIn discussion group • 53 newsletters, e-News, messages and news releases

Since it was founded in 1975, NAPSLO has become the authoritative voice of surplus lines. Our mission is to provide networking opportunities, regulatory and legislative advocacy, and educational activities on behalf of NAPSLO members. Acting as a source of information and service provider, NAPSLO spends a great deal of time communicating the vital role surplus lines plays in the insurance industry.

To accomplish this, we are focused on providing the highest-quality services to members as described within our 2012 Annual Report.

No matter how you calculate it, NAPSLO’s annual membership is an excellent investment in the valuable benefits and services NAPSLO provides. All NAPSLO members play an important role in providing and maximizing the Association’s value, and it is your enthusiasm and dedication to NAPSLO, the wholesale distribution system and the surplus lines industry that make the Association so great.

Thank you for the value you bring to NAPSLO each year through your membership.

Brady R. KelleyExecutive Director

DEVELOPING

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...2012

COMMUNICATING


Convention CommitteeThe NAPSLO Annual Convention provides an opportunity for members to network and participate in programs and presentations relevant to the surplus lines industry.

2011-2012 Key Initiatives and Accomplishments:• 3,440 delegates and spouses participated in the 2012 NAPSLO Annual Convention in Atlanta – the highest attended convention in NAPSLO’s history.• NAPSLO’s Brokers’ Club was expanded, allowing members to purchase three tables, increasing the Brokers’ Club to 74 tables in 2012.• Early registration and check-in allowed more than 2,000 attendees to get a head start on their networking meetings.• The E.G. Lassiter Lecture Series, presented by the Derek Hughes/NAPSLOEducationalFoundation, sponsored former Florida Governor Jeb Bush’s keynote address at the 2012 General Session.• A recap of convention highlights, “Daily News,” was introduced and emailed to attendees each day of the 2012 Annual Convention.

Former Florida Gov. Jeb Bush delivers the keynote address at the 2012 Annual Convention sponsored by the E.G. Lassiter Lecture Series, presented by the Derek Hughes/NAPSLOEducationalFoundation.

Attendees utilize the Brokers’ Lounge for networking meetings at the 2012 Annual Convention.

NETWORKING


Convention Committee

2011-2012Committee Members:

Matthew D. Nichols, ChairAll Risks, Ltd.Hunt Valley, MD

Nick Abraham MarkelGlen Allen, VA

Dennis BurtonACE WestchesterPhiladelphia, PA

Steve DresnerEnduranceNew York, NY

Chris GiadrosichCRCBirmingham, AL

Staci HughesGeneral StarChicago, IL

Michael S. KravitzInsurance Innovators, Inc.Glenside, PA

Kathleen KuczajAmerican Empire S/L Ins. Co.Cincinnati, OH

Mary A. PierceWestern Pacific Ins. Network, Inc.Littleton, CO

Kristen SkenderUSG Insurance Services, Inc.Canonsburg, PA

Sharon WardAmWINS BrokerageDallas, TX

Attendees gather in the lobby of the Atlanta Marriott Marquis.

Maria Williams of FaegreBD presents the Federal Legislative Update.

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ADVOCATING


NAPSLO’s Education Committee is committed to providing educational opportunities for its members.

2011-2012 Key Initiatives and Accomplishments:• The Committee continues to enhance NAPSLO’s Schools of Professional Education to support and develop NAPSLO members throughout their professional career. NAPSLO’s Excess & Surplus Lines School, Marcus Payne NAPSLO Advanced School, and Executive Leadership School were attended by 79, 59 and 32 students in 2012, respectively.• The NAPSLO Surplus Lines Compliance Course, the first course of its kind, launched online in September 2011 and was completed by 499 members.• The Surplus Lines Fundamentals Course, developed in partnership with The Institutes, was launched online in May 2012 and was completed by 65 members.• NAPSLO offered discounts for members’ participation in its online courses.• The Committee expanded the NAPSLO School’s State Surplus Lines Scholarship program, which was awarded to 3 state associations in 2012.

Education Committee


Gilbert C. Hine, Co-ChairMcClelland & Hine, Inc.San Antonio, TX

Jacqueline M. Schaendorf, Co-ChairInsurance House, Inc.Atlanta, GA

Matthew BrownGeneral StarLos Angeles, CA

Kristina BurkeAll Risks, Ltd.Hunt Valley, MD

Douglas DayTravis-Pedersen and AssociatesChicago, IL

Steve GirardMarkel, Southeast RegionGlen Allen, VA

Glenn HargroveMSWDallas, TX

Josh HartAll Risks, Ltd.Hunt Valley, MD

Randall JonesNAPSLOAtlanta, GA

Edward LevyRPS ScottsdaleScottsdale, AZ

Aaron MikulskyArch Insurance GroupChicago, IL

Lora Moncrief-RobbinsAll RisksCharlotte, NC

Stephanie NoesserS/L Stamping Office of TexasAustin, TX

Brian NolanEndurance American Specialty Ins. Co.Los Angeles, CA

Greg RubelMarkel, Mid South RegionPlano, TX

Jennifer WilliamsInsurance HouseAtlanta, GA

Jason Kunert teaches at the 2012 Marcus Payne NAPSLO Advanced School.

DEVELOPING

Students take part in classroom discussions at the 2012 NAPSLO Executive Leadership School at the Darden School of Business at the University of Virginia in Charlottesville.

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Legislative Committee


James C. Drinkwater, Co-ChairAmWINS BrokerageNew York, NY

David E. Leonard, Co-ChairRSUI Group, Inc.Atlanta, GA

Doris BarnettAmWINS BrokerageChicago, IL

Johanna BrooksGeneral StarNew York, NY

Michael ByrneDewey & LeBoeufNew York, NY

Don CarsonBurns & Wilcox, Ltd.Farmington Hills, MI

Paul M. DeCotisDeCotis Insurance Assoc., Inc.Providence, RI

David ErtelTravelers Excess and Surplus LinesHartford, CT

Ronald GaborGabor Insurance Services, Inc.Miami, FL

Robert GreenebaumSwett & Crawford – New YorkChicago, IL

Alan J. KaufmanBurns & Wilcox, Ltd.Farmington Hills, MI

Daniel MaherELANYNew York, NY

David L. OcasekSurplus Line Association of ILChicago, IL

Bobby OwensRPSLexington, KY

Lana S. ParksThe Parks Group, Inc.Arlington, TX

Ernie TaylorCentury Insurance GroupWesterville, OH

Patricia VillegasGeneral StarStamford, CT

The Legislative Committee is dedicated to promoting the legislative and regulatory interests of NAPSLO members and the surplus lines industry.

2011-2012 Key Initiatives and Accomplishments:• The 2012 state legislative sessions closed with all states except Michigan and Washington D.C. taking action to address the NRRA.• NAPSLO played a key role in the adoption of NRRA implementation in Colorado, Iowa, Illinois, South Carolina and Wisconsin.• Various steps were taken to promote implementation of home state taxation and to work with states pursuing tax sharing to implement a workable tax allocation approach. Based on 2011 premium, more than 80 percent of nationwide premium is now taxed and maintained by the home state of the insured.• NAPSLO led a coalition of trade associations to promote the uniform implementation of the NRRA’s insurer eligibility standards and to advocate nationwide uniformity in all areas of surplus lines regulation and taxation.• The Committee maintained strong relationships with federal lawmakers through an effective NAPSLO Legislative Fly-in to Washington, D.C., meetings with members of Congress and outreach to the Federal Insurance Office regarding NRRA implementation and issues of importance to NAPSLO and the surplus lines industry.• NAPSLO endorsed the National Association of Registered Agents and Brokers legislation in the 112th Congress.

Dan Maher (left to right), Ron Gabor, Rep. Ed Royce, Past President Robert Sargent, Secretary Hank Haldeman and Ernie Taylor meet in Washington, D.C. to review legislative issues.

ADVOCATING

NAPSLO Legislative Committee members meet with Roy Woodall of the U.S. Treasury’s Financial Stability Oversight Council during the 2012 Washington, D.C., Fly-in.

BUILDING


The Career Awareness & Internship Committee’s mission is to network NAPSLO members to create interest, awareness and enthusiasm about surplus lines and to attract bright, enthusiastic college students majoring in Insurance/Risk Management to our industry through NAPSLO’s internship program.

Career Awareness & Internship Committee

NAPSLO interns Lynden Lyles (left to right), Eric Mutch, Kacy Jones, Cameron Annas and Will Smith were selected to attend the 2012 NAPSLO Annual Convention.

Demmie Hicks with DBH Consulting speaks to Next Generation members during her presentation, “Managing Change: Selling Strategies for a Transitioning Market.”

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DEVELOPING

2011-2012 Key Initiatives and Accomplishments:• NAPSLO committee volunteers visited and made presentations to more than 15 schools to promote the surplus lines industry.• An outreach database was created containing all student information gathered during NAPSLO college visits. Students in this database receive information from NAPSLO, NAPSLO’s Next Generation and the Derek Hughes/NAPSLO Educational Foundation.• NAPSLO’s Next Generation increased its size to close to 600 members, focusing on networking, promoting professionalism amongst members and encouraging young professionals to become more engaged in the surplus lines community, NAPSLO and its committee work.



Steven R. Gross, Co-ChairMetro Insurance Services, Inc.Springfield, NJ

Carlton Maner, Co-ChairAXIS InsuranceAlpharetta, GA

Elease BarnesMcClelland & Hine, Inc.San Antonio, TX

Josh BowenCentury Ins Grp-EnvironmentalWoodstock, GA

Karen DavisScottsdale Insurance CompanyScottsdale, AZ

Thomas DeCotisDeCotis Insurance Assoc., Inc.Providence, RI

Jim DeSimoneWestern World Insurance GroupFranklin Lakes, NJ

Randy L. DossCRC – HoustonHouston, TX

Kristin DowneyAmWINS BrokerageCharlotte, NC

Seth FischerWestern World Insurance GroupFranklin Lakes, NJ

Steve R. FrankeScottsdale Insurance CompanyScottsdale, AZ

Sarah GavlickMarkel, Northeast RegionRed Bank, NJ

Elise GayBurns & Wilcox Ltd.Farmington Hills, MI

Emily HulingSelling Strategies, Inc.Terrell, NC

Jeff LambMarkelPlano, TX

Donna LusignanBurns & Wilcox Ins. ServicesSan Diego, CA

Jeffrey LyngaasCapitol Insurance CompaniesMiddleton, WI

Jonathan McKenzieSwett & CrawfordBirmingham, AL

Catherine MoranVela Insurance Services, LLCChicago, IL

Terri MoranVela Insurance Services, LLCWalnut Creek, CA

Clint L. NokesRSUI Group, Inc.Atlanta, GA

Darrell PippinSwiss ReAtlanta, GA

Eric QuinnAll Risks, Ltd.Hunt Valley, MD

Michelle RayIAT SpecialtyScottsdale, AZ

Brian SloanGreat American Specialty E&SCincinnati, OH

Van N. SpanosGreat American Specialty E&SCincinnati, OH

Yiana StavrakisMetro Insurance Services, Inc.Springfield, NJ

Next Generation President Yiana Stavrakis.

NAPSLO President Matt Nichols (right) and Michael Carr participate on the Next Generation panel, “Lessons Learned from My First Hard Market,” at the 2012 NAPSLO Annual Convention.

COMMUNICATING

BUILDING

Next Generation members network at the Next Generation Cocktail Reception at the 2012 NAPSLO Annual Convention.

NETWORKING


Kevin Westrope, ChairWestropeKansas City, MO

Robert P. AbramsonBliss & GlennonRedondo Beach, CA

Laura AllenRPS Fort LauderdaleFort Lauderdale, FL

Dawn D’OnofrioWKF&C Agency of CaliforniaSan Francisco, CA

Wendy HouserMarkelGlen Allen, VA

Karl OlsonSullivan BrokersSan Francisco, CA

Jennifer PintoSwett & Crawford – New YorkNew York, NY

The Mid-Year Leadership Forum provides industry leaders the opportunity to network and exchange ideas in a relaxed setting.

2011-2012 Key Initiatives and Accomplishments:• More than 560 delegates attended the 2012 NAPSLO Mid-Year Leadership Forum in Scottsdale, Ariz.• The “Afterburner” session, in which a cutting-edge management training team composed of a select group of top military fighter pilots discussed the “Flawless Execution Model,” was an overwhelming success, with more than 250 members attending the session.


Mid-Year Committee

NETWORKING

Jim “Boots” Demarest explains the “Flawless Execution Model” to attendees of the Afterburner session of the 2012 NAPSLO Mid-Year Leadership Forum.

DEVELOPING

Attendees network during the Opening Reception of the 2012 NAPSLO Mid-Year Leadership Forum.



Joel D. Cavaness, Co-ChairRPS ItascaItasca, IL

F. Marshall Turner, Co-ChairMaxum Indemnity CompanyAlpharetta, GA

Mark BolandEnduranceStamford, CT

Daniel DrennenEnvironmental Ins. ServicesBirmingham, AL

David FinklesteinCapitol InsuranceMiddleton, WI

Jon HahnAlterra SpecialtyRichmond, VA

Tim HoelleW.N. Tuscano Agency, Inc.Greensburg, PA

Timothy HortonUSG Insurance Services, Inc.Canonsburg, PA

Neil KesslerCRCDallas, TX

Steve McDonnellPartners Specialty Group, LLCSanta Monica, CA

Geoff ParrisNautilus Insurance GroupScottsdale, AZ

Blake StockThe Combined GroupDallas, TX

Elaine WhiteS/L Stamping Office of TexasAustin, TX

The mission of the Communications & Technology Committee is to assist the NAPSLO staff in communicating the activities of the Association and its positions on issues facing the surplus lines industry; inform members on current industry technology issues; raise awareness and influence development of technology standards for the industry and members; and work with other industry organizations on technology initiatives impacting the surplus lines industry.

2011-2012 Key Initiatives and Accomplishments:• The Committee’s sponsorship of the keynote presentation at the AAMGA Automation & Technology Conference continued with “The Science Fiction Vision” at the 2012 event.• The NAPSLO Marketing Campaign Awards Contest was offered once again in partnership with the Insurance Marketing and Communications Association. Three NAPSLO members received awards at the 2012 NAPSLO Annual Convention.• The Committee sponsored the Joint E&S Working Group with the AAMGA, Insurance Agents Council for Technology (ACT) and Association for Cooperative Operations Research and Development (ACORD) to facilitate the development and discussion of industry technology standards.• NAPSLO hosted the “Current Technology Issues: Bringing Carriers into the Mix” session at the 2012 NAPSLO Annual Convention.

Communications & Technology Committee

Mike Ardis (left to right), Peter Montanaro, Sarah Thacker, Tammie Miller, Greg Ricker and Scott Good participate in the panel discussion, “Current Technology Issues: Bringing Carriers Into the Mix,” at the 2012 NAPSLO Annual Convention.

COMMUNICATING

The Membership & Ethics Committee’s mission is to recommend new members to the Board of Directors. This includes recommendations for voting members: Wholesale Broker/Agent members, Company members, and Underwriting Manager members, as well as non-voting members: Associate members, Life members and Honorary members.

Wholesale Broker/AgentDefined as a sole proprietorship, partnership or corporation licensed in at least one jurisdiction within the U.S. or Canada as a broker, agent or managing general agent, which is engaged in an insurance business predominately as a wholesaler.

Subsidiary or Affiliated FirmsFor the purpose of qualifying for this class of membership, any firm or organization must transact over 50 percent of its insurance business with firms other than any parent or affiliated firm or organization.

CompanyDefined as a risk-bearing insurer, incorporated or organized in any state in the U.S. or Canada, engaged in the writing of insurance principally through wholesale broker/agents. Companies that meet all the NAPSLO membership criteria other than those driven by percentages can qualify for Associate membership.

Underwriting ManagerDefined as a firm which derives its business from wholesalers

42 new members joined NAPSLO in 2012.

Membership & Ethics Committee



Gregory T. Crouse, ChairCrouse & Associates Insurance BrokersSan Francisco, CA

Sue BishopRPS CM&M ParamusParamus, NJ

Andrew BownRFIB Group LimitedLondon, England

Andrew CarrabisPowers McNalis Torres & TeebagyWest Palm Beach, FL

Lindy GardnerAdmiral Insurance CompanySeattle, WA

Timothy P. HochkeppelWestern World Insurance GroupFranklin Lakes, NJ

Robert C. ItzingerIFISLos Angeles, CA

James KeatingtKgPhoenix, AZ

David S. McDermidScottsdale Insurance CompanyScottsdale, AZ

Art McDevittU.S. Risk Insurance GroupDallas, TX

Len MikulskiAmerican Empire S/L Insurance Co.Cincinnati, OH

James Runyan, Jr.ZurichOmaha, NE

Jeff M. ShortPartners Specialty Group, LLCSanta Monica, CA

Chris SiegelMacDuff Underwriters, Inc.Daytona Beach, FL

and has specific underwriting authority from one or more risk-bearing insurers for specified classes of business in designated geographic areas and the companies for whom it underwrites would themselves qualify for Company membership. Underwriting managers that meet all of the NAPSLO membership criteria other than those driven by percentages can qualify for Associate membership.

AssociateDefined as an individual, firm or organization that does not qualify for voting membership, but supplies services to voting members and/or supports the wholesale excess/surplus lines system.

LifeMembership is granted to each Past President of the Association.

HonoraryAn individual nominated and elected by the Board of Directors.

NAPSLO Membership Classifications

2011-2012 Key Initiatives and Accomplishments:• The NAPSLO PAC builds awareness in Congress of NAPSLO and the vital role surplus lines insurance plays in the U.S. economy. Issues regarding the Federal Insurance Office, regulation and taxation of surplus lines insurance across state lines, uniform licensing, and financial services reform requires continued education of members of Congress and candidates for federal office.• Through various initiatives, the PAC generated its second largest year of fundraising with $64,187, exceeding more than $310,000 to support candidates for federal office since the PAC was formed in 2007.• The PAC brochure was created for members’ use as an educational tool, which can be downloaded from the NAPSLO website.• The PAC’s online contribution tool was enhanced to provide easier access for NAPSLO members.

The NAPSLO Political Action Committee (PAC) manages NAPSLO’s efforts to support candidates for the U.S. House of Representatives and Senate whose philosophies and attitudes are consistent with the goals of NAPSLO, the surplus lines industry and the wholesale distribution system.

Political Action Committee

Nick AbrahamGadine ActonLarry BalesBrenda Ballard AustenfeldKevin BarbeeJohn BauerAndrea BestKurt BingemanKrystal BoggsDavid BrinkerhoffMartha BuretzJean BuschHarry Michael ByrneJoel CavanessDavid CelettiMichael CoelhoNick CorteziGreg CrouseScott CullerM. Steven DeCarloPaul DecotisRandy DossDavid DowJames Drinkwater

Sheryl EckingerSteve EilersMark EnglishKurt FitzgeraldVincent FlemmingCarla FrostJames GanttThomas GarlandSteven GrossKathryn GustafsonJonathan HahnHank HaldemanLetha HeatonHank HenryGilbert HineKeith HinsonStacey HinterlongPhil HoldernessColleen HoltorfNicole HuckstorfMatthew JarrettLorelei JohansenSteven KassBrady Kelley

Kathryn KerekesDaniel KilcoyneJohn KlagMarie KovacikKathleen KroegerScott LandryDavid LeonardHenry LopezCarla MakowskiCarlton ManerTerry McCannMonica McHenryKay MillerMichael MillerSuzette MischlerBrendan MoellerJoel MooreChristopher MorrisBrad MossMatthew NicholsJohn OwensRyan PearsonBrian PoleseScott Purviance

David RademakerRobert RochelleBryan SandersRobert SargentDwayne SaucierJessica SavageJim ScarboroughJacqueline SchaendorfWhitney SimonettiLaurie SmithPaul SpringmanYiana StavrakisWilliam StroutSusan SwansonJoseph TimmonsJill TruittMarshall TurnerKevin WestropeBrad WoodDavid WoodJohn WoodKelly YagerNationwide Mutual Ins. Co.

2012 PAC Contributors


Michael D. Miller, ChairScottsdale Insurance Co.Scottsdale, AZ

David BrinkerhoffWestropeKansas City, MO

Scott CullerMarkel, West RegionWoodland Hills, CA

Chris DayHouston Casualty Co.Chicago, IL

Keith HinsonSLB Insurance Group of LAMetairie, LA

Henry A. LopezNavigators Management Co.Chicago, IL

Joel MooreGulf Coast Claims ServiceHouston, TX

Brian PoleseWKF&C Agency of IllinoisChicago, IL

Bryan SandersAlterra SpecialtyRichmond, VA



2011-2012 Key Initiatives and Accomplishments:• A new committee charter was developed to enhance the oversight and governance of NAPSLO financial management and financial reporting practices.• The Financial Review Subcommittee was appointed to review NAPSLO’s monthly financial statements.• The Investment Review Subcommittee was appointed to review NAPSLO’s investment reports and assist in NAPSLO’s oversight and management of invested assets.• The Association’s financial statements were reviewed by new, independent accountants Mayer Hoffman McCann and their report and unqualified opinion was made available as part of the Treasurer’s Report during the 2012 Annual Convention. See Page 17 for more information regarding the July 31, 2012, financial statements.

The Budget, Finance, Audit & Investments Committee assists the Board in overseeing the Association’s long-term financial health and manages the budget process, periodic financial reporting and the annual audit. In addition, the Committee assists NAPSLO staff in managing Association assets and investments.


Hank Haldeman, ChairThe Sullivan GroupLos Angeles, CA

Wyeth CoburnCRC – New JerseyParsippany, NJ

Patrick DriscollAmerican Safety Indemnity Co.Atlanta, GA

Mark HaushillAmerican Safety Insurance Holdings, Ltd.Atlanta, GA

Phillip McCrorieRSUIAtlanta, GA

Lee SjostrumRSUI Group, Inc.Atlanta, GA

Budget, Finance, Audit & Investments Committee

Historical NAPSLO Revenues and Expenses

Revenues Expenses


“I am pleased to report NAPSLO closed its 2012 fiscal year in a strong financial position,” said NAPSLO Executive Director Brady Kelley. “While we experienced some unique and nonrecurring expense items during the year, including our continued investment in NRRA implementation, strong membership dues, record-breaking registration levels for the 2011 NAPSLO Annual Convention and management of discretionary spending helped us manage a budgeted deficit to net income.” NAPSLO reported total income of $5.5 million, an increase of approximately 6.9 percent from 2011, and expenses of $5.1 million, a 6.0 percent decrease from 2011. NAPSLO ended fiscal year 2012 with more than $5.4 million in net assets, providing continued strength and stability in financial operations. A significant portion of the expenses in 2012, while lower than 2011, were external costs associated with the NRRA’s implementation and costs associated with the Executive Director transition. “We have been very focused with our legislative efforts at both the state and federal level, and I believe our members are seeing a return on NAPSLO’s investment,” said NAPSLO President Matthew Nichols. “With 49 jurisdictions implementing the NRRA and with the home state tax rule now working in 46 jurisdictions, representing more than 80 percent of nationwide premium, we believe our legislative advocacy efforts are paying off. We will continue to set aside funds for similar activity and to maintain all of NAPSLO’s programs and services in the coming years.” Convention registration revenues increased significantly with 301 more members attending NAPSLO’s 2011 Annual Convention, along with growth in attendance at the 2012 Mid-Year Leadership Forum. With 727 member firms, representing 1,512 member offices, membership dues, which renew in June of each year, remain steady and the dues schedule has not increased in the past five years. NAPSLO’s financial statements were reviewed by independent auditors, Mayer Hoffman McCann P.C. Their report included an unqualified audit opinion, no material financial statement adjustments, and noted no material weaknesses in NAPSLO’s internal control structure.

NAPSLO Balance Sheet July 31, 2012 July 31, 2011Assets Cash & Cash Equivalents $ 3,110,681 $ 2,726,718 Certificates of Deposit 2,270,000 2,670,000 Investments 3,520,238 3,000,973 Accounts Receivable 842 435,306 Accrued Interest Receivable 31,495 34,494 Prepaid Expenses 82,739 167,618 Property and Equipment 37,240 42,110 Deposits 9,005 9,005 Total Assets $ 9,062,240 $ 9,086,224 Liabilities and Net Assets Liabilities Accounts Payable $ 95,667 $ 162,696 Accrued Retirement Expenses - 300,000 Accrued Expenses 62,396 98,113 Deferred Revenue 3,492,850 3,501,780 Total Liabilities 3,650,913 4,062,589

Net Assets Undesignated 5,411,327 4,723,635 Board Designated - 300,000 Total Net Assets 5,411,327 5,023,635

Total Liabilities and Net Assets $ 9,062,240 $ 9,086,224

NAPSLO Income Statement

For the Years Ended July 31, 2012 July 31, 2011Revenues Membership Dues $ 1,621,827 $ 1,646,264 Program Service Revenue 3,534,052 3,216,909 Total Revenues 5,155,879 4,863,173

Expenses Program Services 1,708,750 1,449,109 Committee Activities 1,271,471 1,627,841 General and Administrative 2,122,070 2,353,474 Total Expenses 5,102,291 5,430,424

Investment Income 334,104 273,668 Change in Net Assets 387,692 (293,583) Net Assets, Beginning of Year 5,023,635 5,317,218 Net Assets, End of Year $ 5,411,327 $ 5,023,635

NAPSLO Finances


PRESIDENTMatthew D. Nichols, ASLIAll Risks, Ltd.Hunt Valley, Maryland

VICE PRESIDENTKevin T. WestropeWestropeKansas City, Missouri

SECRETARYHank HaldemanThe Sullivan GroupLos Angeles, California

TREASURERGilbert C. Hine, Jr., CPCU, CFPMcClelland & Hine, Inc.San Antonio, Texas

PAST PRESIDENTRobert T. Sargent, CPLU, CPCU, RPLUTennant Risk Services Insurance AgencyWest Hartford, Connecticut

WHOLESALE BROKER DIRECTORS Joel D. Cavaness, CPCU, ARMRisk Placement Services, Inc.Itasca, Illinois

Davis D. MooreWorldwide Facilities, Inc.Los Angles, California

NAPSLO Staff Mike Ardis, APRDirector of Technology

Cheryl AsburyExecutive Assistant/Office Manager

Richard Bouhan Counsel on Special Projects

Rachel CallagyDirector of Marketing & Communications

Debbie Hill, CMPDirector of Meetings & Conventions

Vicky FlemingAdministrative Assistant/Registration Manager

Brady R. KelleyExecutive Director

Keri Kish, J.D.Director of Government Relations

Greta RobertsAccounting & Membership Manager

James C. DrinkwaterAmWINS BrokerageNew York, New York

Steven R. GrossPreferred Concepts, LLCSpringfield, New Jersey

Jacqueline M. Schaendorf, CPCUInsurance House, Inc.Atlanta, Georgia

COMPANY DIRECTORSScott A. CullerMarkel West, RegionLos Angles, California

David E. Leonard, CPCU, ARe, AIAF, ARMRSUI Group, Inc.Atlanta, Georgia

Carlton ManerAXIS InsuranceAlpharetta, Georgia

Michael D. Miller, CPCU, CLU, ASLI, AReScottsdale Insurance CompanyScottsdale, Arizona

F. Marshall Turner, CPCUMaxum Indemnity CompanyAlpharetta, Georgia

NAPSLO 2012-2013 Board of Directors

National Association of ProfessionalSurplus Lines Offices, Ltd.

200 N.E. 54th St., Ste. 200Kansas City, MO 64118

(816) 741-3910(816) 741-5409 - Fax

[email protected]


Budget, Finance, Audit & Investments CommitteeGilbertHineJr.,CPCU,CFP – ChairPatrick Driscoll Mark Haushill Catherine Mausner Phillip McCrorie, CPCUWhitney Simonetti Lee Sjostrom

Career Awareness & Internship CommitteeScottCuller–Co-ChairStevenGross–Co-ChairNick Abraham Susan Altrock, CPCUKim Anthony Josh Bowen Paul Burger Tony Chimera Wyeth Coburn Laura Corwin Karen Davis Tom DeCotis Jim DeSimone Randy Doss Kristin Downey Steve Franke, CPCU, AReSarah Gavlick Emily Huling, CIC, CMCNeil Kessler Jeff Lamb, CPCURenee Lerche Donna Lusignan, CISR, CPIWJeffrey Lyngaas, CPCU, CICJonathan McKenzie Catherine Moran Terri Moran Clint Nokes, CICEarl O’Garro, Jr. Susie Parks Darrell Pippin Michelle Ray Brian Sloan Christine Snowberger Van Spanos ASLI, AIS

Communications & Technology CommitteeDavisMoore–Co-Chair

F.MarshallTurner,CPCU– Co-ChairLisa Barnes Mark Boland Dawn Brost Daniel Drennen Rob Einer David Finkelstein Seth Fischer Tim Hoelle Timothy Horton B. Scott Landry Vincent Pugliese Eddie Robinson Blake Stock Elaine White, ASLI

Convention CommitteeKevin Westrope – ChairDennis Burton Steve Dresner Chris Giadrosich Robert Gilbert Wendy Houser Staci Hughes Mary Pierce, CIC, CRISKristen Skender Yiana Stavrakis Sharon Ward

Education CommitteeJoel Cavaness, CPCU, ARM – Co-ChairJacqueline Schaendorf, CPCU–Co-ChairKristina Burke Comas Paul Dastis Douglas Day Steve Girard Glenn Hargrove Randall Jones Edward Levy, CPCU, ASLIAaron Mikulsky Roxanne Mitchell Lora Moncrief-Robbins Stephanie Noesser Brian Nolan Cole Palmer Greg Rubel Robert Sanders, Jr., ASLI, CPCUTracy Wade

Legislative CommitteeJamesDrinkwater–Co- ChairDavidLeonard,CPCU–Co- ChairNicole Allen H. Michael Byrne Paul DeCotis, ASLIDavid Ertel Andrew Forstenzer Ronald GaborDavid Green Robert GreenebaumDavid Johnson Alan Kaufman Daniel Maher, ASLIBenjamin McKay David Ocasek Bobby Owens Lana Parks, CPCU, CICErnie Taylor Membership & Ethics CommitteeCarlton Maner – ChairLaura AllenSuzette Bishop Andrew Bown Brian DeGraw Dave Dow Lindy Gardner Timothy Hochkeppel, ASLIRobert Itzinger, ARMRobert Jones, CPCUJames Keating, J.D., CPCULen Mikulski James Runyan, Jr. Jeff Short

Mid-Year CommitteeHank Haldeman – ChairRobert Abramson, CPCULarry Bales Dawn D’Onofrio Karl Olson Jennifer Pinto

Political Action CommitteeMichael Miller, CPCU, CLU, ASLI, ARe – ChairDavid Brinkerhoff John Curry, CPCU

Chris Day John Farrey Keith Hinson Marie Hohensee Henry Lopez, CPCU, ASLIJoel Moore Brian Polese Bryan Sanders

Past Presidents CouncilRobert Sargent, CPCU, RPLU, ARM – ChairRobert Angle, CPCUKurt Bingeman, CPCU, ASLI, RPLUThomas Bloom, CPCUKevin Brooks James Bryson Maureen Caviston, CPCUJeremy Cooke Nicholas Cortezi John Crowther Eugene Eisenmann H. James Griffith Mitchell Gwinn, Sr., CPCUDavid Hartoch Letha Heaton Tapley Johnson, Jr., CPCU, CICOrville Jones Marshall Kath John Latham Anthony Markel Charles McAlear, CPCUWilliam Newton Roy Oddy Timothy Pedersen Richard Polizzi, ASLIPaul Springman Neil Strickland Joseph Timmons Lawrence Wesson, Jr. Gary Westphalen John Wood, III

NAPSLO 2012-2013 Committee Members

National Association of ProfessionalSurplus Lines Offices, Ltd.

200 N.E. 54th St., Ste. 200Kansas City, MO 64118

(816) 741-3910 (816) 741-5409 - Fax

[email protected]

NAPSLO - WSIA · NAPSLO 2012 Annual Report | 3 Mission NAPSLO is an association of insurance...

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