PENNSYLVANIA

ALSO INTHISISSUE:________________

Company Satisfaction Index

10 hidden treasures

IA&B members have access to a wealth of information at www.iabgroup.com.This article serves as a treasure map for where to find 10 gems that are worththeir weight in gold.

Page 10

Company Satisfaction Index digest

A record number of independent insurance agency personnel spoke, and theresults and analysis of their feedback are in. Read on for highlights from IA&B’s2012 Company Satisfaction Index.

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ContentsP R I M A R Y A G E N T M A G A Z I N E

Copyright 2012. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and is not intended to serve as legal, accounting, financial,insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult withcompetent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before makingany decisions and we disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in PrimaryAgent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the IA&B.Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&Bendorsement of the products and/or services.

Subscriptions: Non-member price: $2.25 per copy or $15 per year.

All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two monthsprior to publication. Advertising rates furnished upon request.

Address inquiries to:Primary Agent Editor5050 Ritter RoadMechanicsburg, PA 17055-0763Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347

Periodical postage paid at Mechanicsburg, Pa. and additional entry post office.

Postmaster: Send address changes to above address.Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2012-10 is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

2 Chair of the Board’s Message3 Member FAQ4 State News6 Preventing E&O8 Coverage Corner15 Glance at Events

23 IA&B Partners24 Technology Update28 Advertisers Index28 Classified Ads28 Last & Least

In every issueMission StatementPrimary Agent delivers ideas to help InsuranceAgents & Brokers’ members negotiate their uniqueposition as guardians of trust between insuranceconsumers and companies while facing thechallenges of maintaining a small business. PrimaryAgent also supports IA&B’s mission to preserve andadvocate the American Agency System.

Get social with IA&B

OfficersNorman F. Basso, CPCU

Chair of the BoardYork, Pa.

G. Greg Gunn, CICVice Chair of the BoardLemoyne, Pa.

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-PImmediate Past Chair of the BoardWest Chester, Pa.

MembersJoyce M. Bailey, CIC, CRM, CPIW

Newark, Del.

Henry “Butch” Bradley, Jr.Forest Hill, Md.

Timothy P. BurrisMifflintown, Pa.

N. Lee Dotson, CIC, AAIWilmington, Del.

Michael P. ErtelColumbia, Md.

John L. FrankenfieldTelford, Pa.

John B. HollisterMilford, Pa.

Diana M. Hornung Hanby, ACSRWilmington, Del.

Jocelyn R. Howard-Sinopoli, CIC, CISRButler, Pa.

Robert S. Klinger, LUTCF, CPIA+

Germantown, Md.

Douglas A. Loesel, CPCUErie, Pa.

Michael F. McGroarty Sr.Pittsburgh, Pa.

Craig S. Mader Gambrills, Md.

Ann Gallen Moll, CICReading, Pa.

April E. Ressler, CICAltoona, Pa.

Scott C. Rogers, CPIA*York, Pa.

David B. Wasson Sr., CICState College, Pa.

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM**New Castle, Del.

* Pa. IIABA National Director** Del. IIABA National Director+ Md. PIA National Director

Board of Directors

[ 2 ]

Norman F. Basso, CPCU

Chair of the Board’sM E S S A G E

All of the help, none of the payroll

Let’s face it: We could all use a little help around the office. Anextra employee or two would be nice. And, while we’re at it,making them insurance, regulatory or legal gurus wouldn’t hurt….

IA&B recognizes today’s high demand on agency personnel. The combination of stubborn market conditions, growing carrierexpectations and, yes, even the technology that is intended tosimplify our lives continue to increase workloads.

That’s why your association — with its industry and legal expertson staff, growing member-resource library and expandingprofessional training opportunities — strives to be an extension of your staff. Truth be told, many of us only reach the tip of the IA&B-offerings iceberg. And, as a member, it’s all yours for the taking.

This issue of Primary Agent magazine highlights a few of the many IA&B member resources available to streamline agencyoperations, ensure legal and regulatory compliance and minimize E&O exposure. I encourage you to start here and then explore www.iabgroup.com. I guarantee it will be precioustime well spent.

Until next month,Norm

Driving members to distinction.

ANSWER:What it is: The national producer number, or NPN, is aunique number that is assigned to every licensedproducer in the country. This includes individuals andsome business entities (agencies).

It was developed and is used by the National InsuranceProducer Registry (NIPR) as a single identifier for thenational producer database (PDB). Initially created toavoid privacy issues by circumventing the use of socialsecurity numbers, the NPN has the great advantage ofimmediately identifying a person, even if that personholds licenses in multiple states. The NPN is automaticallyassigned to the producer as soon as he or she is added to the PDB.

Some state insurance regulators (e.g. Delaware) now use the NPN to assign CE credits. It is anticipated that all states will eventually do away with their own statelicense numbers.

How to find yours: The NPN can be located easily bygoing to the NIPR website at www.nipr.com and selectingthe “National Producer Number (NPN) Access” link in the left-hand side “Products & Services” menu. Fromthere, the NPN can be retrieved by typing in the socialsecurity number and last name or the resident licensenumber and home state. For an agency NPN, the FEINnumber can be used.

DO YOU HAVE A QUESTION? Email it to us at iab@iabgroup.com. Please use “Primary Agent FAQ” in the subject line of your message. You can also fax your question to 717-795-8347. We look forward to answering your questions!

QUESTION: I have been asked for my national producer number: Do I have one, and where do I access it?

Member FAQ

Primary Agent | October 2012

State NewsSave the date, winbattle for businessA historic battle for insurance business isbeing waged between independentagents and a variety of opposing forces.To prepare agency owners and otherhigh-ranking officers for the fight, IA&Bwill hold its fourth annual ExecutiveManagement Conference (EMC 2012) inthe location of another historic battle —Gettysburg.

Held at the Wyndham Gettysburg, Oct.30-31, EMC 2012 will help agency ownersand principals achieve operationalexcellence and competitive advantagesthat will make gaining market share anuphill battle for direct writers. Attendeeswill come away with practical knowledgeon topics that include:

w Branding and marketing

w Creating a sales culture forproducers and CSRs

w Staff evaluation and compensation

w Agency valuation

w Agency agreements

w Social media and 24/7 service

Included with conference registration willbe admission to a private reception atthe National Military Park Museum andVisitor Center. Guests will enjoy exclusiveaccess to the museum’s galleries, famedGettysburg cyclorama and the short film,“A New Birth of Freedom.”

www.iabgroup.com/EMC2012

Don’t fall behind onautumn NFIPchangesThe National Flood Insurance Program(NFIP) is floating changes more quicklythan a minnow can swim a dipper. Thefollowing carry an Oct. 1 effective date.

Rebating suspension: Rebating of agents’commissions for flood sales soon will dryup. The no-rebating rule applies to allnew and renewal NFIP business writtenwith an effective date of Oct. 1 and later,even when premium payment isreceived before that date.

Manual updates: Revisions to the “NFIP Flood Insurance Manual” — which is available atnfipiservice.com/nfip_docs.html –became effective Oct. 1.

Re-underwriting requirement: Severerepetitive loss (SRL) policies that weretransferred to the NFIP Special DirectFacility must be re-underwritten beforethey can be renewed as of Oct. 1. FEMA believes that many existing SRLpolicies are misrated due to continualrenewals based on years-old, originalflood applications.

[ 4 ]

New MembersW E L C O M E

Sylvester & Keating IncPenndel, Pa.

AIS Insurance Group IncMalvern Pa.

Towne and CountryAgents & Brokers Inc

Kennett Square, Pa.

Queenan Insurance Agency LLCErdenheim, Pa.

Mark A Throne AgencyBethlehem, Pa.

New on-demandofferingsOpportunities for members to continuetheir education whenever and whereverthey want it are on the rise. IA&B’slibrary of on-demand programsincreases this fall, with new coursescovering pollution, cyber liability andcertificates of insurance.

IA&B’s on-demand programming allowsflexibility: Staff can maximize their timein the office while gaining qualityeducation (and CE credits) at theirconvenience. At the same time, theexperience mimics classroom learning,with fully integrated auto and video andthe opportunity to ask questions.

The latest trio of on-demand programsjoins others on the National FloodInsurance Program, compliance, ethics and E&O.

www.iabgroup.com/on-demand

WC auditsdemystified? The workers’ compensation (WC)premium audit process has long beenprone to disputes. One of the mostchallenged items is the extra-premiumcharged for independent contractorswhen the client does not produce acertificate of WC coverage for thoseindependent contractors. Howsubcontractors are treated in an auditgreatly varies based on thecircumstances of the case, and alsobased on the carrier.

To shed some light on this sometimesdifficult process, IA&B summarized theissue of subcontractors and premiumaudits on a dedicated Web page andshares where the issue currently stands.Producers can help their clients bypreparing them for the audit process atthe beginning rather than at the end ofthe policy period.

www.iabgroup.com/pa/wc/subcontractors

MAPs recapThe association’s Member Agent Panels(MAPs) reconvened last month in ninelocations across Pennsylvania.Participants weighed in on theassociation’s work — particularly itsprofessional training offerings — andswapped agency struggles andsolutions. Inputs from the meeting willgo to the IA&B Board of Directors,whose members will use it to formulatethe association’s strategic direction.

These MAP meetings marked the lastfor participants who met each fall andspring over the past two years. Asincere thank-you goes out to the over100 IA&B of Pennsylvania memberswho volunteered their time andprovided valuable insight to guide theassociation into the future.

Dentists required tocarry malpracticeinsuranceAgents now have a captive audience indentists. Effective Aug. 21, Pennsylvania’sAct 65 mandated liability coverage forall dentists practicing in the state.

The law requires each dentist inPennsylvania to maintain minimummedical professional liability insuranceof $1 million per occurrence or claimand $3 million per annual aggregate.Dentists need to show proof of thisinsurance to the State Board ofDentistry within 60 days of policyissuance in order to maintain theirlicense in good standing.

Pennsylvania is just the tenth state tomandate this coverage, which wassupported by the Pennsylvania DentalAssociation and the PennsylvaniaInsurance Department.

Neighboring news:N.Y. also wantsdisability insuranceClients doing business in New Yorkstate may find out the hard way aboutthe disability policy requirement, whichapplies to any employee in the state for30 days or more in a calendar year.That’s right, the headaches do not stopwith the workers’ compensation (WC)policy and whether to place New Yorkin 3.A. or 3.C. Those employers whomissed that tidbit may receive areminder in the mail, along with a finefor violating the law.

While producers do not have a legalduty to know and advise the client ofthe requirements under law, they dohave an opportunity to shine. Byreminding clients that they should keeptrack of the amount of time spent inNew York state and secure a disabilitybenefits policy as needed, they couldsave their clients an unsavory penalty.

A summary of New York’s WC anddisability requirements, along with links to the New York Workers’Compensation Board, are available onthe IA&B website.

www.iabgroup.com/PA/WC/NY

[ 6 ]

CURTIS M. PEARSALLCPCU, AIAF, CPIA

Curtis M. Pearsall, CPCU, AIAF,

CPIA, president of Pearsall

Associates Inc. and special

consultant to the Utica

National E&O Program,

supplied this article.

Insurance Agents & Brokers

Service Group Inc. is the

exclusive agent for the Utica

E&O program in Delaware,

Maryland and Pennsylvania.

For questions regarding this

article or your E&O coverage,

contact IA&B at 800-998-9644

or iab@iabgroup.com.

Primary Agent | October 2012

With few exceptions, anapplication is a necessarydocument to secure aproposal or to bind coverage.If accurately completed andsigned by the applicant, anapplication possessestremendous power … “morepowerful than a locomotive!”to borrow from theintroduction of the 1950s“Superman” TV program. Inthe event of an errors &omissions (E&O) claim, thisdocument could play a hugerole in the outcome oflitigation. Conversely, anapplication that doesn’taccurately portray theaccount’s true exposure canbe an agency’s worstnightmare. The role thisdocument plays is up to you.If you are serious aboutreducing your E&O exposure,proper handling ofapplications is a great place to start.

A critical taskThe first thing to consider isthe completeness of theapplication. While most

producers probably don’tenjoy completingapplications, it is a criticaltask in the sales process.

Are applications from youragency completed fully orare some questions leftblank? The answers to theseblank items could

significantly impact theaccount’s desirability orpricing. What happens ifyou’re unsure of the correctanswer as applications arecompleted? Do you“presume” to know theanswer or do you contact theprospect to check? In thehaste to get applications

submitted, producers/account executives mayanswer the questionsbelieving they are answeringhonestly and correctly.Carriers rely heavily on theapplication and presume theinformation to be truthful.

What happens if, after a loss,the carrier discovers theinformation was incorrect?They may very well take theposition that they would nothave written the account hadthey known the correctinformation. They mayrescind the policy or chooseto honor the claim but thentake action against theagency. There are many E&Oclaims where the carriersuccessfully sued the agentdue to misrepresentation ofthe nature of the risk. Thisreinforces the benefits ofgetting the insured to signthe app as it is hoped thatthis affirms the accuracy ofthe information.

A SIGNED APPLICATION — “MORE POWERFULTHAN A LOCOMOTIVE!”

PreventingE R R O R S A N D O M I S S I O N S

If you are seriousabout reducing your

E&O exposure,

proper handling

of applications is a

great place to start.

[ 7 ]

The best approachThe best approach is to complete theapplication face to face with theprospect, asking them the questionsexactly as they appear and accuratelynoting the response on theapplication. After completing theapplication, request that theprospect/customer reviews it toensure you have accurately statedthe exposure. Then have them sign it. This is one of the mostimportant procedures for an agencyto insist upon.

In virtually every state, the customeris held responsible for the contents of the application once they’ve signedit. If the prospect misled you in thecompletion of the application, theirsignature on the document could play a significant role if a problemdevelops. If getting the signature is not feasible for some reason,explore the possibility of providingthe customer with the applicationelectronically, asking them to review and approve the informationfor correctness. Be certain your file is well documented with theinsured’s approval.

In fact, when completing theapplication, look to complete the questionnaire from your exposure analysis checklist. Thesequestionnaires will help the producer thoroughly understand therisk and accurately market it tovarious carriers.

It is also highly suggested thatagencies not sign the insured’ssignature to the document. While theagency may believe the customer hasauthorized you to do so, after a lossthe customer may disavow giving youthis authorization. Handwritingexperts have found their way intoE&O claims, so extreme cautionshould be exercised in this area.

Complete and accurateAnother issue that occurs now andagain involves agencies completing“this year’s application” using theinformation from “last year’sapplication.” Avoid this. It is extremelydangerous and fraught with potentialproblems. Because of the possibilitythat your risk has changed, it isalways best — to ensure completeaccuracy — that the application iscompleted through current discussionwith the customer.

If the account is a prospect andyou’re looking to provide them with a proposal, secure copies of their current coverage, if possible.When completing the application, this will enable you to request thenecessary coverages to ensure your proposal is at least equal towhat the prospect currently has. Ifthis is not possible, advise the account accordingly. This is alsoextremely important whenremarketing the account to othercarriers in your office. Review thecurrent coverage, including allendorsements, to ensure that, at aminimum, coverage is beingduplicated. This is your agency’sresponsibility and should be handled as such.

Review and reinforce with your staff the issue of providing yourcarriers with complete, accurateapplications signed by the customer.This is also a great time formanagement to clearly state theexpectation that applications will notbe submitted to the carrier unlessthey are complete and accurate. This requirement typically falls,especially with commercial accounts,on the producers. Customer servicerepresentatives (CSRs) should beauthorized to return an application to the producer if the app isincomplete or if the CSR is concernedabout accuracy.

In your favorApplications you submit to yourcarriers are extremely important andmust be handled accordingly. Youragency’s goal should be that theinformation in the applications iscomplete, current and correct (the 3 Cs) and that the application isreviewed and signed by the customer.While getting the insured’s signaturemay be an additional step that takestime, the power of this signed appcannot be emphasized enough.Anything less could spell trouble if aloss develops and the carrier believesthey were misled. By mandating andenforcing these requirements, you areturning the power of the applicationto work in your favor.

CoverageC O R N E R

[ 8 ]

JERRY M. MILTON, CIC

Jerry M. Milton, CIC teaches

and consults on industry

issues. The legal profession

recognizes him as an

expert on insurance

coverages. He is also the

education consultant for

IA&B, working with CISR,

CIC and continuing

education programs.

Primary Agent | October 2012

Go with me, if you will, toonce-upon-a-time, long, long ago, and far, far away.At that time, if you were an independent insuranceagent, you actually issued some policies (e.g.,Homeowners’) yourself. You inserted theDeclarations page into thetypewriter and typed in allthe required information.Then you signed(countersignature) yourname. There was a copy for the insured, themortgagee, the insurancecompany and you, the agent.

It didn’t make any differenceif the policy was agencyissued or company issued.You, as the agent, billed theinsured and collected thepremium. You then paid thecompany monthly. They sentyou a bill for your writtenpremiums less yourcommission. Remember“accounts current”? That wasthen, this is now. How thingshave changed!

Company billed: It all startedin personal lines — PersonalAuto, then Homeowners’.Commercial lines followed.You looked up one day andrealized that all, or most, ofyour clients were beingbilled by your insurancecompanies. To add insult toinjury, you also becameaware that those clientswere now paying theinsurance companiesdirectly. You even startedcalling it “direct bill.”

Prior to direct bill, the clientowed you — it was calledaccounts receivable. If youdidn’t collect, it cost youmoney. You still had to paythe insurance company,Therefore, you could allowthem to pay later (after theeffective date of the policy),arrange premium financingor cancel for non-payment.That was your option.

Direct bill is now a way oflife in the independentagency system. If the insureddoes not pay the requiredpremium by the due date, acomputer-generated notice

of cancellation will be mailedto that insured. The noticewill give the insured acertain number of days (asrequired by state law) tomake payment.

This direct bill system withautomatic notices ofcancellation has createdpotential E&O exposures foryou, the agent. When aclient receives a notice ofcancellation, and you receivea copy, what do you do? Doyou call some of them, all ofthem or none of them?

If you call some, but not all,it’s called “discrimination.”That’s a big no-no! You’reprobably tired of going toE&O classes and hearing,“Call all of them or none ofthem.” What else can I say —that’s good advice. Especiallyif you want to stay out of thecourt room.

What if you have beencalling them and after yearsof periodically remindingcertain clients to make theirpayment, you, for onereason or another, fail toremind them. Their policy is

IF THE INSURER CANCELS, WHAT’S THEAGENT’S DUTY?

cancelled, and they have a claim. Didyou have a duty to notify them eachand every time? Certainly you set aprecedent. You have provided a“service” in the past and, withoutnotifying the client, you discontinuedthat “service.”

What if you have been calling all ofthem and decide to stop. You can’tjust stop. You must notify each andevery one of them that beginning on a certain date the agency will nolonger contact them regarding theirlate payment. This notification mustbe in writing.

Direct bill is between the insurancecompany and the insured. The moreyou, the agent, get involved, thegreater your E&O exposure. Enough said.

Y’all take care!

[ 9 ]

Coastal AgentsAlliance, LLC

Coastal Homeowners Insurance

Sharon KarlssonPhone: 201-407-7151

skarlsson@coastalagentsalliance.com

ISO HO3/HO6Immediate Quotes15% commission

on new and renewal businessPrimary and Secondary

Homes are eligible.

For an appointment, contact:

That’s just one of the reasons we’ve been ranked among the top 10 carriers nationally in ease of business by Deep Customer Connections.

www.PennNationalInsurance.com

Business Surety Auto Home

wow!

We don’t just create fast and simple

automation solutions for our agents.

With a “WOW” quoting system

and superior service,

we set out to delight them.

How to discontinueoverdue paymentnotificationAs Jerry says, you can’t just stop!IA&B recently released a newmember resource — to include a sample letter to customers —with guidance on how to correctthe practice.

Delaware:www.iabgroup.com/de/notif_overdue

Maryland:www.iabgroup.com/md/notif_overdue

Pennsylvania:www.iabgroup.com/pa/notif_overdue

AGENCY MANAGEMENT

10 hidden treasuresDiscovering valuable resources in IA&B’s online gold mine

IA&B members haveaccess to a wealth ofinformation atwww.iabgroup.com. The following pages dig up 10 gems that areworth their weight in gold.

Primary Agent | October 2012

Fierce competition lurks around every corner, and E&O stumbling blocks line the most well-intentionedway. The independent agent’s daily workflow islittered in land mines, but IA&B members don’t

have to go it alone: www.iabgroup.com is a virtual gold mineof resources.

The following pages cut a path through the website andhighlight resources developed in response to the mostcommon member questions and concerns. Vetted by industryand legal experts and, where appropriate by state regulators,these turnkey tools help members to stay on the straight and narrow.

1. Certificates of insuranceCertificates of insurance have become a lightning rod forconflict nationwide. On one side are clients and third partieswho request modifications to certificates or use of outdatedACORD forms. On the other are legal and/or regulatoryrepercussions (depending on the state). Stuck in the middle?Insurance agents.

At the heart of the issue is the public’s misunderstanding ofcertificates’ function. They are, of course, simply snapshotsof policies, which limits what agents can (or should) dowhen asked to adjust them. And using outdated forms oradjusting proprietary ones is a legal nightmare waiting tohappen.

Strike gold!

Visit IA&B’s online resource for a state-specific letter that educates requesters on what certificates are and why modifications cannot be done without involving thepolicy itself. And watch for IA&B's new on-demand trainingon certificates, set to launch this fall.

Delaware:http://www.iabgroup.com/pdfs/ag_operations/certificates/letter_de.doc

Maryland:http://www.iabgroup.com/pdfs/ag_operations/certificates/letter_md.doc

Pennsylvania:http://www.iabgroup.com/pdfs/ag_operations/certificates/letter_pa.doc

On a related slippery-slope-of-requests note, it is notuncommon for clients to ask their agent to review a contractbetween them and a third party. But that seeminglyinnocuous ask is fraught with errors and omissionsrepercussions.

F

[ 11 ]

Take a power hourIA&B members can attend a free webinarevery other month. The Power Hourseries offers timely topics covered byindustry experts.

Much of this article was derived from the June webinar, “Online Gold Mine:Discovering Valuable Resources atiabgroup.com.” The full recording, as well as associated PowerPoint slides, for that and other Power Hours onconcurrent causation, vacated propertiesand out-of-state workers’ compensationare available in the online Power Hourresource library.

Watch Agent Headlines for upcoming Power Hour announcementsand registration.

www.iabgroup.com/power_hour

Strike gold!

Check IA&B’s website for asample cover letter explainingthat the review is of insurance —and not legal — specificationsand that policy modifications arenecessary to change coverage.

Delaware:www.iabgroup.com/de/ContractReviews

Maryland:www.iabgroup.com/md/ContractReviews

Pennsylvania:www.iabgroup.com/pa/ContractReviews

2. Non-English-speakingclients

“Hablas español?” Answering no, that no one in the agencyspeaks Spanish (or Korean orArabic or Pig Latin, for thatmatter) is a missed opportunity.The U.S. non-English-speakingpopulation is on the rise — andremains underserved by theinsurance industry.

On the flip side, conductingbusiness in multiple languagesexposes an agency to risksrelated to miscommunication.After all, insurance terminologyis complex for those fluent inEnglish, let alone someone withlimited use of the language.

The best course of action is touse an interpreter. A bilingualagency employee or theinsurance applicant’s bilingualfamily member or friend will do. (Agencies also can contractwith a telephone languageservice.) The interpreter shouldtranslate the application as theagent explains and completes it. Then the client should sign the application and join the agent in signing a hold-harmlessagreement.

Strike gold!

Use IA&B’s sample translationagreement that holds the agencyharmless from liability related toerrors, omissions or negligenceof the translator.

www.iabgroup.com/pdfs/e_o/translation_agrmt.doc

3. Agency-clientcommunication

More “senior” agency staff willremember when in-personmeetings, telephone calls,standard mail and faxes summed up all agency-clientcommunication. But those daysare long gone. Today there arevoice mail, email, online forms,social networking and textmessaging to name a few. Andwith each new communicationvehicle comes new challenges for agencies.

Voice mail

Clients are prone to thinking thatleaving a voice mail message fortheir agent is equivalent totalking with him or her. At issue,of course, are requests to bindand alter coverage.

Strike gold!

Manage the risks of voice mail by instituting standard policiesand procedures for agencyemployees. IA&B’s onlineresource shares tips — and a sample voice mail greetingdisclaimer.

Delaware:www.iabgroup.com/de/e_o/voice_mail

Maryland:www.iabgroup.com/md/e_o/voice_mail

Pennsylvania:www.iabgroup.com/pa/e_o/voice_mail

AGENCY MANAGEMENT

Agency agreementreview 2.0

IA&B has long offered agency

agreement reviews. This fall

the member benefit will take

on a new form: an online,

streamlined, user-friendly

matrix that allow members

to see how their agreements

stack up and where they can

be improved. Watch Agent

Headlines for the launch

of this new gem.

[ 12 ]

Valley Forge Service Branch: 800.333.3622 | Home Office: Des Moines, IA www.emcins.com

© Copyright Employers Mutual Casualty Company 2011 All rights reserved

I’m celebrating our 100th year by planning for our next 100 years.

Jason Bogart, CPCU, ARM, Vice President of Branch Operations

Our future will be marked by the relationships we forge with you—the independent insurance agents who represent us. You’re the reason we’ll continue to investigate new market opportunities. Why we’ll develop competitive products. Why we’ll maximize the use of new technologies. Why we’ll emphasize ongoing professional development for our staff. By helping you profitably and efficiently grow your agency, EMC Insurance Companies will continue to serve you and your customers today and well into the future.

Recordings

Archiving telephone callrecordings and voice mailmessages in an agencymanagement system may seemlike a no-brainer to reduce E&Oexposure, not to mentionimprove customer service. Butfood for thought: There arestate laws that govern thepractice and the issue ofconsent.

Strike gold!

Count on IA&B’s Q&A todissect the legal issues, providecompliance guidance and offera sample notice for employees.

Delaware: www.iabgroup.com/de/record_phone_calls

Maryland: www.iabgroup.com/md/record_phone_calls

Pennsylvania: www.iabgroup.com/pa/record_phone_calls

Email

Privacy is paramount in email exchanges, especiallywhen personally identifiableinformation is included. While some agencies rely on a confidentiality statementadded to all outgoing messages,truth be told, the practice is not required — or binding. Itsimply relies on the intimidationfactor. A more comprehensiveand effective approach to emailsecurity is to create a safe email connection.

Strike gold!

Read up on transport layersecurity (TLS) — a secure emailpathway for communicationwith commercial clients thatTLS-enable their email servers.

Delaware: www.iabgroup.com/de/technology/email_tls

Maryland: www.iabgroup.com/md/technology/email_tls

Pennsylvania: www.iabgroup.com/pa/technology/email_tls

Text messages

No discussion on agency-clientcommunications would becomplete without a look attexting. Close to 200,000 textmessages were sent everysecond in 2010 with usagegrowing annually. So it wasonly a matter of time before itentered the realm of agencycommunications — andintroduced concerns aboutdocumentation.

Strike gold!

Give those text-weary fingers abreak and surf the IA&Bwebsite for an in-depth look atagency concerns and bestpractices of texting with clients.

Delaware: www.iabgroup.com/de/technology/texting

Maryland: www.iabgroup.com/md/technology/texting

Pennsylvania: www.iabgroup.com/pa/technology/texting

4. Mailed applicationsAdding signature flags orhighlighter marks to a mailedapplication may be secondnature, but it’s worth a secondthought. In the event of a claimand disagreement down theroad, a client could argue thathe or she was misled by thatseemingly innocuous customerservice gesture.

There are ways, thankfully, tomaintain the practice. First andforemost, agency personnelshould check, and doublecheck, to make sure theymarked the correct lines forsignature. Secondly, a coverlever should accompany theapplication that reiterates theselections were made by theclient and asks the client toreview the paperwork and tocontact the agency if somethingis amiss.

Strike gold!

Visit the IA&B website for tipson how to reduce E&Oexposure when using pre-filledapplications in general.

Delaware: www.iabgroup.com/de/e_o/signature_flags

Maryland: www.iabgroup.com/md/e_o/signature_flags

Pennsylvania: www.iabgroup.com/pa/e_o/signature_flags

AGENCY MANAGEMENT

[ 14 ]

Date Topic Location

1-2 James K. Ruble Graduate Ocean City, Md.

2 Employment Relationships Pittsburgh, Pa.

2-4 P&C Licensing Study Course Mechanicsburg, Pa.

3 Employment Relationships Baltimore, Md.

8-11 CIC Commercial Property Erie, Pa.

9 Employment Relationships Allentown, Pa.

10 CISR Agency Operations Hagerstown, Md.

Employment Relationships Mechanicsburg, Pa.

11 CISR Personal Residential Reading, Pa.

Power Hour Webinar

15-18 CIC Commercial Casualty Pittsburgh, Pa.

16 William T. Hold Mechanicsburg, Pa.

17 William T. Hold Altoona, Pa.

17-20 CIC Life & Health Ellicott City, Md.

23 Best Practices of E&O Allentown, Pa.

23-25 P&C Licensing Study Course Pittsburgh, Pa.

24 William T. Hold Erie, Pa.

Best Practices of E&O Mechanicsburg, Pa.

25 CISR Agency Operations Pittsburgh, Pa.

30 CPIA Module 1 Mechanicsburg, Pa.

CISR Personal Residential Hagerstown, Md.

30-31 Executive Management Conference Gettysburg, Pa.

31 CPIA Module 2 Mechanicsburg, Pa.

CISR Personal Residential Lancaster, Pa.

CISR Personal Residential Pittsburgh, Pa.

Glance at EventsO C T O B E R C A L E N D A R

[ 15 ]

5. Electronic delivery ofpolicies

The practice of deliveringpolicies electronically iscatching on as quickly aselectronic delivery itself.Carriers more often are sendingpolicies electronically to agents.Clients more often arerequesting electronic receipt oftheir policies. And agenciesmore often are looking for waysto streamline operations andavoid extra costs (think: paper,postage, mail supplies). Could itbe a win-win-win?

Legally, nothing forbids it.However, there are privacyissues and E&O exposures at stake.

Strike gold!

Read up on IA&B’s threerecommendations — consent,proof of delivery and privacyprotection — before clicking thesend button.

Delaware: www.iabgroup.com/de/e_o/electronic_delivery

Maryland: www.iabgroup.com/md/e_o/electronic_delivery

Pennsylvania: www.iabgroup.com/pa/e_o/electronic_delivery

6. Authority to signdocuments

The delegating (or busy or golf-course-distracted) head honchois not always in the loop onevery last detail of his or hercompany’s daily operations. Butwhen it comes to insurance,communication between anagent and a commercial client’s

executive assistant, officemanager or even second incommand is a legal no-no …unless the officer of thecorporation granted writtenpermission.

Strike gold!

Score official permission to talkinsurance with commercialclients’ employee of choice.IA&B’s online resource providesstep-by-step instructions,sample language to delegateauthority, a look at variousbusiness structures and asample letter.

Delaware: www.iabgroup.com/de/cl_granting_authority

Maryland: www.iabgroup.com/md/cl_granting_authority

Pennsylvania: www.iabgroup.com/pa/cl_granting_authority

7. Overdue paymentsHabits developed in a souringeconomy can leave a bad tastein agents’ mouths in the end.For example, as clients struggleto make their insurancepremiums on time and agenciesstruggle to keep clients,agencies’ overdue-payment-notification practices often are born.

While insurers must notifypolicyholders of cancellation forlack of payment, there is norequirement for agencies …unless they have notified clientsin the past and, in effect,created a duty where noneexisted. And the dangers in theduty are teaching clients not to

rely exclusively on thecompany’s letter and trainingthem not to pay on time.

The best way to nip this E&O-exposing situation in the bud isa client letter, ideally certifiedwith return receipt requested,explaining that the agency nolonger will notify them ofoverdue payments. Then thepolicy must be appliedconsistently — with all clientsand by all producers.

Strike gold!

Model your letter ofdiscontinued late-paymentnotification after IA&B’s sample.

http://www.iabgroup.com/pdfs/e_o/sple_discont_overdue.doc

8. Value-added servicesDifferentiation (not to mentionthe lure of additional income)drives many agencies to thinkbeyond the sale of insuranceand about value-added services.The most common agencyoffering offshoots are losscontrol, risk management andsafety consulting. But, alongwith additional selling pointsand revenue sources emergeE&O risks.

Strike gold!

Visit www.iabgroup.com for asample disclaimer for contracts,inspection reports andmarketing materials thatexplains the agency’s intent isnot to identify all hazards.

http://www.iabgroup.com/pdfs/e_o/disclaimer_loss_control.doc

AGENCY MANAGEMENT

[ 16 ]

9. Carrier downgradesJust how low can a carrierrating go before an agencynotifies its clients? It depends.Did an agent review the client’scontract that contains astipulation of carrying a certain-rated carrier? Is it standardagency procedure? Or doagency advertisements stress its carriers’ financial rating?

If the answer to any of these is yes, notification should occur — with careful wording to avoid a statutory violation of“malicious” criticism, withoutmention of the State GuarantyFund and without sharing thefinancial rating organization’sproprietary information.

Strike gold!

Personalize one of IA&B’ssample notification letters,either the one for simplenotification or the one foragencies that made it theirpolicy to do business only withcarriers above a certain rating.

http://www.iabgroup.com/pdfs/carriers/ratings/downgrade_ltr.doc

http://www.iabgroup.com/pdfs/carriers/ratings/downgrade_ltr_agcy_policy.doc

10. Licensing exemptionsKnowing who needs licensed todo what is enough to trip up themost compliant agencies. Addknowing who is exempt andhow non-resident licensesfactor in, and it becomes agame of Double Dutch.

Strike gold!

Brush up on exemptions forclerical and claims-processingwork using IA&B’s duty-specificdescription of what unlicensedpersonnel can and cannot do.

Delaware: www.iabgroup.com/de/licensing/producer

Maryland: www.iabgroup.com/md/licensing/producer

Pennsylvania: www.iabgroup.com/pa/licensing/producer

Learn which commercialpolicies qualify for the non-resident license exemption andwhich states offer reciprocity.Then, for non-qualifiers, find astep-by-step guide on what toexpect from the non-resident-licensing process.

Delaware: www.iabgroup.com/de/licensing/non_resident

Maryland: www.iabgroup.com/md/licensing/non_resident

Pennsylvania: www.iabgroup.com/pa/licensing/non_resident

[ 17 ]

Primary Agent | October 2012

Get Real! Get MBG

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MUTUAL BENEFIT GROUPHuntingdon, Pennsylvania

www.mutualbenefitgroup.com

ASSOCIATION AT WORK

CSI digestHighlights from IA&B’s 2012 Company Satisfaction Index

A record number ofindependent insuranceagency personnel spoke,and the results and analysisof their feedback are in.Read on for highlights fromIA&B’s 2012 CompanySatisfaction Index.

Primary Agent | October 2012

IA&B’s 2012 Company Satisfaction Index (CSI)gauged members’ experiences with personal lines carriers —and boasted an 80 percent increase in completed surveyssince the last CSI. More feedback means a morecomprehensive look at the agency-company relationship. Inturn, that means a greater benefit for members who want tocompare their experience with others or who are consideringa new appointment.

IA&B now conducts the formerly biennial CSI on an annualbasis, rotating between personal and commercial linescarriers. The 2012 CSI, which focused on personal linesbusiness, included 35 questions divided into four categories:products, pricing and underwriting; policy service and claims;technology; and agency/company relationship.

The following analysis highlights the results by category ofquestions and by carrier size (see sidebar). A full report, aswell as an online comparative tool that allows members toexamine and compare specific carriers’ results, is available atwww.iabgroup.com/csi.

Product, pricing and underwriting satisfactionIA&B members' overall satisfaction with their personal linescarriers' products, pricing and underwriting slipped slightlyagain. In addition, the 2012 CSI once again noted a parallelbetween carrier size and members' satisfaction in thiscategory: For the third consecutive CSI, members noted themost satisfaction with regional I carriers' products, pricingand underwriting and the least with national carriers'.

[ 19 ]

More where thiscame from

Read IA&B’s complete CSI results and analysis and use the interactive,online comparison tool by visitingwww.iabgroup.com/csi.

Carrier groupsFor the purpose of analyzing the CSIresults, IA&B places carriers into fourgroups, based upon direct premiumwritten (DPW) and the number of states intheir footprint.

National carriers: 35 or more states

Super regional carriers:11-34 states

Regional II carriers:1-10 states, more than $100 million in DPW

Regional carriers:1-10 states, less than $100 million in DPW

Policy service and claimsWhile participants noted theirhighest level of satisfaction inthis category, the 2012 resultsbroke a pattern and, for the first time since the CSI’sinception, showed an overalldecline in satisfaction from theprevious CSI.

When analyzed by carrier size,results in this category returnedto the status quo following a2010 shakeup, when superregional carriers stole the show.This year, regional II carriersreclaimed the coveted spot ofhighest satisfaction – the positionthey held in the 2004, 2006 and2008 CSI results.

TechnologyTechnology remains the area inwhich IA&B members relay theirgreatest dissatisfaction withcarriers. In fact, the 2012 resultsshowed less satisfaction than CSIresults from 2008 and 2010.

Super regional carriers continueto make a comeback in thiscategory of questions. Aftermembers reported their leastsatisfaction with this carriergroup in the inaugural CSI, superregional carriers inched their wayback and received members’highest satisfaction ratings in2010 and 2012.

Agency/company relationshipMembers’ satisfaction in thecategory of agency/companyrelationship remained nearlyconstant, as it has over the pastseveral years. Satisfaction in thiscategory when compared bycarrier size also trendedconsistently through nearly everyCSI, with regional II carriers onceagain receiving the highestratings and national carriersreceiving the lowest.

ASSOCIATION AT WORK

[ 20 ]

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Donegal Mutual Insurance Companybegan doing business in 1889. Over the years, the Donegal InsuranceGroup has grown significantly to now include nine property andcasualty insurance companies. The Donegal Insurance Group enjoys an A (Excellent) rating by theA.M. Best Company.

As our operations have grown, wehave expanded our ability to provideour independent insurance agentswith a comprehensive suite ofproducts. In addition to providing afull line of personal insuranceproducts, we have developedcompetitive commercial products thatallow our agents to serve a broadspectrum of small, mid-market andlarger commercial accounts. We work

very hard to provide exceptionalproducts and service in lines ofbusiness and markets that we knowand understand well.

At Donegal, we focus on providingsuperior technology and outstandingservice to our agents and customers.We know that “ease of doingbusiness” has become increasinglyimportant to independent agents.

Donegal has invested millions ofdollars developing advancedtechnology that greatly enhances ouragents’ and policyholders’ experiencein doing business with us.

Donegal has long recognized thevalue of an independent agent inassisting individual and businessconsumers navigate the insurance-buying process. Every day, we proveour commitment to the independent

agency system by distributing ourproducts exclusively throughindependent agents. We areconstantly looking for ways to deliverincreased value to our agents andsolidify company-agency relationships.

We have benefited greatly from thefeedback we receive from ourregional agency forums, which helpsus enhance our products andoperations.

Much has changed since we started in the insurance business over 120 years ago, but one thing remainsthe same — Donegal remains firmlycommitted to delivering a better value to our agents and policyholders.We look forward to our prospects formutual success as we work togetherwith our independent insuranceagents in serving the insurance needs of our customers.

FEATURED PARTNERDonegal Insurance Group, Inc.

CHIEF EXECUTIVE OFFICERDonald H. NikolausPresident and CEO

CORPORATE HEADQUARTERSMarietta, Pennsylvania

SUBSIDIARY COMPANIESAtlantic States Insurance Company,

Southern Insurance Company of Virginia,Le Mars Insurance Company, Peninsula Insurance Group,

Sheboygan Falls Insurance Company,Michigan Insurance Company

A.M. BEST RATINGA (Excellent)

WEBSITEwww.donegalgroup.com

Platinum ProfileInsurance Agents & Brokers proudly recognizes

Donegal Insurance Group, Inc. as one of its Platinum Partners. IA&B Platinum Partners dedicate

the highest level of sponsorship to our organization.

WHAT IS IA&BPARTNERS?The IA&B Partners

program gives company

and allied businesses

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DO YOU SEEYOUR NAME?To become an IA&B Partner,

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Contact the Member Sales

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to get started.

Listed below are those companies that strongly support the independent agencysystem and Insurance Agents & Brokers.

Thank you for your continued sponsorship.

PLATINUM LEVELACUITYBerkley Mid-Atlantic GroupDonegal Insurance GroupErie Insurance GroupHarleysville InsuranceHM Insurance GroupInsurance Agents & BrokersService Group Inc

MMG Insurance CompanyMillers Mutual GroupMillville Mutual Insurance CoMutual Benefit GroupOhio CasualtyPenn National InsuranceSelective Swiss ReThe Main Street America GroupUtica National Insurance Group

GOLD LEVELProgressive Westfield Insurance

SILVER LEVELAccess Insurance Company Allied InsuranceAmerican Mining Insurance CoCumberland Insurance GroupFrederick Mutual Insurance CoJuniata Mutual Insurance CoPSBA Insurance TrustThe Philadelphia Contributionship

BRONZE LEVELAegis Security Insurance Co

Agency Insurance Company

AmWINS Program Underwriters Inc

Auto-Owners Insurance Company

Briar Creek Mutual Insurance Company

Builders Insurance Group

Chubb Group of Insurance Companies

Countryway Insurance Company

Encompass Insurance

First General Services

Foremost Insurance Group

Goodville Mutual Casualty Company

Guard Insurance Group

Harford Mutual Insurance Co

Hanover Fire & Casualty Insurance Company

Insurance Alliance of Central PA Inc

Insurance House

Insurance Placement Facility of PA

Keystone Insurers Group Inc

Lebanon Valley Insurance Company

Mercer Insurance Group

Merchants Insurance Group

Mercury Casualty

Penn PRIME Municipal Insurance

Reamstown Mutual Insurance Company

Rockwood Casualty Insurance

State Auto Mutual Insurance Company

TAPCO Underwriters Inc

The Brethren Mutual Insurance Company

The Motorists Insurance Group

The Mutual Service Office Inc

Travelers

Tuscarora Wayne Insurance Company

Zenith Insurance

Primary Agent October 2012

Primary Agent | October 2012 TechnologyU P D A T E

The Internet and mobilityrevolutions have enabledagents and their clients tolive in an electronic worldwhere the parties can workand communicate with eachother from anywhere,opening up wonderful newopportunities for agenciesto reach out to newconsumers and providetheir clients with enhancedservices and responsiveness.These developments,

however, have multipliedthe security risks thatagencies must manage inorder to protect theirclients’ personal data.

It is no wonder then thatE&O underwriters extendingcoverage for data breach toagencies increasingly areasking their applicantswhether they encrypt or useother protective measuresto safeguard this client

personal data when it isbeing transmitted. Thisarticle explores approachesagencies can take to protect personal data intransit and then referencesa number of resources toassist agencies.

EncryptionA common question agentsask is: “What isencryption?” When youthink of encryption,

JEFF YATES

Jeff Yates is executive director of

the Agents Council for Technology

(ACT). Jeff can be reached at

jeff.yates@iiaba.net. ACT’s website

is www.iiaba.net/act. This article

reflects the views of the author and

should not be construed as an

official statement by ACT.

[ 24 ]

AGENCY STRATEGIES TO SEND & RECEIVEPERSONAL DATA SECURELY

consider those codes the militaryemploys to keep conversationsunintelligible to the enemy. You canfind many definitions of encryption onthe Internet, but I like this simple onefrom Microsoft:

Encryption is a way to enhance thesecurity of a message or file byscrambling the contents so that itcan be read only by someone whohas the right encryption key tounscramble it. For example, if youpurchase something from awebsite, the information for thetransaction (such as your address,phone number, and credit cardnumber) is usually encrypted tohelp keep it safe. Use encryptionwhen you want a strong level ofprotection for your information.

Requiring a strong password to gainaccess to your system is an importantsecurity procedure, but it is not thesame as encrypting the data withinthe system.

Personal dataWhat are the types of “personal data”that are most sensitive and need to beencrypted when transmitted? Thedefinition of “personal data” can vary by state and is contained in thestate data breach notification andprivacy laws (http://www.ncsl.org/issues-research/telecom/security-breach-notification-laws.aspx), as wellas in various federal laws, such asHIPAA (http://www.hhs.gov/ocr/privacy/hipaa/understanding/summary/privacysummary.pdf), which definesprotected health information (PHI).Insurers, too, might employ variousdefinitions of “personal data” in theirpolicies, so it is incumbent upon theagency to be familiar with not onlythe specific laws but also the coveragedefinitions that apply to the agency.

Note also that the applicable state lawis based upon the residency of theindividual whose personal data isbeing protected, not the location ofthe agency. This is an importantconsideration for both agencieswriting business in multiple states and agencies writing policies thatcover individuals who reside inmultiple states.

With all of the above caveats, themost commonly mentioned types ofnon-public, individually identifiable“personal data” covered in the lawsare those such as: social securitynumbers, driver’s license numbersand other government issued IDs;debit and credit card numbers andpins; bank and financial accountnumbers; and protected healthinformation (PHI under HIPAA). Whileoften not mentioned in state laws,other particularly sensitive personaldata that should be protected includesinformation commonly used forsecurity verification (mother’s maidenname, date and place of birth, etc.) orsensitive insurance information (suchas jewelry schedules).

It is important for agencies to knowwhat types of personal informationthey collect, where it is retained andwho has access to it. They then need

to decide whether they really need tokeep this sensitive information. Forexample, many agencies no longerretain copies of bank checks and arecareful only to pass along credit cardnumbers to carriers, but not to retainthem, so that they do not becomesubject to the comprehensivepayment card industry (PCI)compliance requirements. Theseagencies are also extremely careful toshred this personal data as soon as itis no longer needed.

Further, if the agency decides it mustkeep particular sensitive personaldata, it should limit access to it to onlythose employees who need to see it,to the maximum extent possible. Thisis particularly true for protected healthinformation. Finally, the agencyshould be careful to make sure thatthis personal data is kept off of PCs,mobile devices and thumb drives,where there is a significant risk of lossor theft.

PCs and mobile devicesUsers of PCs and mobile devicesshould be trained to remove anyemails with personal data that may bereceived on these devices, as soon asthey are read. In addition, the agencyshould audit to make sure any PCsand mobile devices that can accessagency applications are passwordprotected. Further, the agency shouldimplement software that can wipe allof the data off of these devices shouldthey be lost or stolen, restoring themto their original manufacturer’s state.

Secure emailEmail is the first major area whereagencies need to begin to encrypttheir communications to carriers andclients when personal data isincluded. Some prominent examplesof emails likely to include personal

Primary Agent | October 2012

[ 25 ]

It is important for

agencies to knowwhat types of personal

information they collect,where it is retained and

who has access to it.

[ 26 ]

data include: sending insuranceapplications to carriers for a quote orto clients to complete or to sign, andsending insurance policies to clients.

With respect to emails betweenagencies and carriers (and generalagents), ACT recommends thattransport layer security (TLS) beimplemented wherever possible. TLS is an open standard that onceimplemented between an agency and a carrier (both parties must haveTLS implemented), all of the emailsbetween the partners go securely in amanner that is transparent to the endusers. In other words, the agent orcarrier underwriter does not have togo to a proprietary website to pick upeach email (which many underwriterswill not do and is inefficient foragency employees to do). TLS is agreat solution for business partnerswhere there are frequent emailcommunications going back and forth.

Many agencies can implement TLS ifthey have email servers or hostedsolutions that offer TLS. Werecommend that the initial TLS set upbe handled by the agency’stechnology person, who should alsoverify that the TLS is working properlywith each carrier and general agent.You will find a number of resourcesthat explain TLS secure email morethoroughly on the ACT website (see“ACT Resources” below), including alist of carriers which have advised usthat they have TLS available.

Unfortunately, most agency clientswill not have TLS capability andtherefore, TLS is not a solution forcommunications with them. This willrequire the agency to implement aproprietary email solution as well forthese clients. When the agent sends a

secure email to the client using one ofthese proprietary solutions, the clientaccesses it on the email vendor’ssecure website. The secure email toolalso enables the client to send asecure email back to the agent, whichis very helpful when the client is beingasked to complete a D&O application,for example. Fortunately, there are anumber of vendors which can helpagencies with both TLS hosted emailsand proprietary emails, as well as toprovide many other useful tools. (Two examples of such vendors areAppRiver and RPost.)

Real TimeToday email is used heavily to conveyapplications and other informationbetween agencies and carriers andgeneral agents, particularly incommercial lines. It is important tonote, however, that Real Time offers a more efficient and secure method to handle these communications,where the communications areautomatically encrypted and keptwithin the agency’s and carrier’smanagement systems.

Agencies are heavily using Real Timefor personal lines and we need toincrease the usage in commerciallines. Many agencies and carriers arealready using Real Time to submitcommercial lines applications andmake quote requests for smallcommercial business, and some have started to use their real-timefunctionality to make mid-commercialsubmissions.

In addition, there is great potential forthe industry to use ActivityNotifications to communicate othertypes of messages directly betweenthe parties’ systems (such as the needfor more underwriting information),

without having to manage a morassof emails in employees’ mailboxes.

We urge agencies and carriers tocontinue to push the use of Real Timewithin their organizations and withtheir business partners, particularlyfor commercial lines transactions andcommunications. Real Time is theworkflow of the future for commerciallines, as well as personal lines. Email is not.

Agency websitesIt is also critical that agencies providesecure website connections forconsumers when they ask theconsumer to provide personal data onthe website — to receive a quote, forexample. The website should create asecure “https” tunnel before theconsumer can fill out any form thatasks for personal data, just as youwould experience when purchasingsomething online or banking online.

In addition, if the agency provides a“non-https” protected free-form textfield which the consumer can use tocontact the agency and makerequests, there is some risk theconsumer will enter private, personaldata. Therefore, it is a best practice totake one of the following steps withregard to this free-form text field:(1) to secure it, (2) change it tospecified fields that ask only for basiccontact information, such as name,phone number, email, address, or(3) include a note with the free-formtext field that it is not secure andshould not be used to provide anyprivate personal data.

If the agency provides clients with thecapability to access their insuranceinformation or documents online, thewebsite should create an “https”

TECHNOLOGY UPDATE

connection before any information can be accessed. Onceagain, agents should work with their website provider tohelp them with the technical aspects of creating this securewebsite capability.

Some agency E&O providers also require the agency topost a privacy statement on its website(s), if there is an option for the consumer to submit personal datathrough the website. It is important that the agencycustomize its privacy statement to track the agency’sparticular data collection, usage, sharing, and protectionpractices with regard to data collected through itswebsite(s). Honda’s financial services website privacystatement (http://www.hondafinancialservices.com/help/privacy-policy) provides a good example of the types ofinformation that are typically included in such statements.

ACT resourcesThis article has covered a few of the areas agencies mustmanage when protecting the security of their clients’ andemployees’ personal data. ACT has developed severalresources for agencies to review as they establish andimplement their agency’s comprehensive informationsecurity program. All of these resources are included onthe Security & Privacy page of the ACT website(http://iiaba.com/act). These resources include a prototypeagency information security policy which agencies can useas a template to build their own customized policy or as achecklist of security issues they should address.

For more on TLS secure email, the ACT Security & Privacypage includes articles, FAQs, a recorded webinar and a listof carriers which have implemented TLS. For more onsecuring your website and managing potential E&Oexposures arising from the website, see the article “Don’t Get Caught in the Web.”

ACT’s Security & Privacy page also includes sample website disclaimers, a recorded briefing on HIPAA-HITECH requirements for “Business Associates,”and additional articles focusing on: the E&O and security risks arising from the use of social media,precautions to take when using free, public Wi-Fi sites, and how to manage the “Bring Your Own Device” trend where employees are using their personal devices to access business applications.

[ 27 ]

More where that came from

In addition to ACT, IA&B’s websiteincludes technology resources dedicated to security and identity theft, as well as acomplete privacy review with turnkeycompliance resources.

Visit www.iabgroup.com. For technologyresources, select “Technology” from the left-hand menu and then “OtherResources.” For the privacy review, choose“Agency Operations” and then “Privacy.”

Primary Agent | October 2012

Coastal Agents Alliance . . . . . . . . . . . . . . . . . . . .9

EMC Insurance Companies . . . . . . . . . . . . . . .13

Guard Insurance Group . . . . . . . . . . . . . . . . . .26

IA&B . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IBC

IA&B Partners Program . . . . . . . . . . . . . . . . . . .23

Interstate Insurance Mngmnt. . . . . . . . . . . . .OBC

Millers Mutual . . . . . . . . . . . . . . . . . . . . . . . . .IFC

Mutual Benefit Group . . . . . . . . . . . . . . . . . . . .17

Penn National Insurance . . . . . . . . . . . . . . . . . .9

PennPRIME . . . . . . . . . . . . . . . . . . . . . . . . . . .IBC

Preferred Property Program . . . . . . . . . . . . . . .20

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[ 28 ]

Ah, zombies. How many times have you had to inform a client that, no, his or her homeowners’ policy won’t cover damage cause by the walking dead?

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Insureds receive an insurance card, proof of insurance certificateand window decal. And, since zombie insurance apparentlymakes a popular (gag) gift, the name area on the certificate isleft blank for personalization.

Source: www.myzombieinsurance.com

----------------------------------------------------------------———————-------The Last & Least column is dedicated to the industry’s oddities —from creative claims and kooky coverages, to (tasteful) jokes andstrange stories. Submit yours to iab@iabgroup.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.

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