The Anchor

THE MAGAZINE OF THE INDEPENDENT INSURANCE AGENTS OF RHODE ISLAND

The AnchorThe Anchor

IN THIS ISSUE

From the President .................... 5Convention Registration .......... 14Profile of an IIARI Member ...... 28Legislative Wrap Up ................ 41

Third Quarter2011

SPECIAL ARTICLE

Sales IS Still a Numbers Game

ALSO

Convention RegistrationForm Enclosed

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table of contentsSales IS Still a Numbers GamePage 11

Convention Registration FormPage 14

Ever Wonder? A Historical PerspectivePage 27

Case Law NotePage 29

2011 Partners ProgramPage 45

Advertisers45

13

34

2

18

4

9

46

37

17

21

10

39

33

44

48

40

6

12

46

19

2011 Partners Program

Big “I” Advantage

Big “I” Flood Program

Clean Care of New England

DeCotis Insurance Associates

EMC Insurance Companies

Enviro-Clean, Inc.

InsurBanc

JH Communications

Partridge Snow & Hahn, LLP

Providence Fire Restoration

RIAIA E&O

Servpro of Providence

Servpro of Washington County

Shred-It

Smoke Clean of New England

TC Reimbursement Program

Trusted Choice Plaque

Trusted Insurance Alliance

US Premium FInance

Utica National E&O

From the PresidentPage 5

Executive Vice President PerspectivePage 7

National Director’s ReportPage 9

Legal BriefsPage 16

HR CornerPage 20

Profile of an IIARI MemberPage 28

Young Agents0

E&O CornerPage 32

Marketing ThoughtPage 36

WC UpdatePage 38

features & articles

The quarterly magazine of the

2400 Post Rd., Warwick, RI 02886401-732-2400, Fax: 401-732-1708

Officers of the IIARIPresident Michael T. Dacey, CPIAPresident Elect Howard Thorp, AAI, CICVice President Doug Mayhew, CICState National Director Myron MitchellImmediate Past President Antonio Pires

Board of DirectorsDistrict Vice PresidentsEast Bay Greg Troy, CIC, CLU, AAICentral Andrew PalazzoNorthern David White, AAISouthern Tom Regan, AAI

District Vice Presidents, At LargeDonald J. Curran, CIC Robert T. HartnettGarry Mansfield, CIC

District RepresentativesCentral Edward F. Bishop, CIC Mark RotondoEast Bay Colette McKeon, CIC Richard B. PaquinNorthern Marc Nadeau, CPIA Denise SmithSouthern Stan Tabak David Woodmansee, CIC

STAFFState Account Manager Marcia L. Berthiaume, AAI, ACSR

E&O Administrator & Mbr Coordinator Helen Collins

SVP, State Account Executive Sean R. Donaghey, CPCU

Executive Administrative Assistant Kathryn E. Griffiths

Executive Vice President Mark A. Male

AVP, Director of Education Jean E. Nagle, ACSR, AAI, AIS

Finance & HR Manager Maureen E. Sears

Administrative Assistant Sarah Van Grootheest

The Anchor is the magazine of the Independent Insurance Agents of Rhode Island (IIARI).

Statement of fact and opinion is made based on the responsibility of the authors alone and does not imply an opinion on the part of IIARI, it’s of-ficers, directors or members.

Subscription rate for members is $15, which is included in dues. Subscription rates for non-members is $75 per year (single copies $10). Reprint requests should be referred to IIARI.

Copyright©2011, Independent Insurance Agents of Rhode Island.

iiariIndependent InsuranceAgents of Rhode Island

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

Chad Veach, Engineering Services Supervisor

Today we’re expanding the use of new technologies to identify risks and train workers on how to avoid them. Tomorrow it could be the use of nanotechnology needing monitoring in the workplace or the development of smart systems to better match employees with their responsibilities. EMC Insurance Companies is committed to investing in the necessary resources to achieve our vision of being the best in loss control—today, tomorrow and in the future.

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learn about the many agent offerings. I also wanted to use this article to respectfully request that everyone make it a point to attend our upcom-ing 111th Annual Convention (which runs from Tuesday, September 20th to golf on Thursday, September 22nd). Our Convention Committee has been working hard to bring us some exciting things this year, such as a new venue for the opening night reception (The Culinary Arts Museum at Johnson & Wales Harborside campus), informa-tion on the new online Consumer Agent Portal (CAP) distribution channel, and a chance to learn about some impor-tant product offerings from our valued sponsors. We will also have a chance to relax and have a good time among friends in the business. So, please, if you haven’t already done so, register today. Thank you for your confidence in allowing me to serve the Association this past year. I know the baton will be passed to an extremely capable person in Doug Mayhew, and I look forward to my continued involvement. I hope to see everyone at the Convention!

from the president

Michael T. Dacey, CPIAIIARI President

Third Quarter, 2011 The Anchor5

Working Together is Success

As our 111th Annual Convention approaches and my term as president comes to a close, I want to publicly thank everyone who volunteered to serve the Association over the past year. From the Board of Directors to all of the various Committee members, we couldn’t function as an effective As-sociation without all of your hard work. I also want to recognize the outstanding job that Mark Male and his Staff at the Association do for our organization on a daily basis. My close involvement this year has given me a new apprecia-tion for their professional work. With the dynamic nature of our industry, it is important to continue to work together and stay involved. At my Inauguration a year ago, I read the following quote from Mr. Henry Ford: “Coming together is a beginning. Keeping together is progress. Working together is success.” We should all keep this sentiment close to heart. If we all work together, we can continue the rich history of this Association which is now more than a century old. Working together will en-able our agency members to succeed by maintaining a competitive advantage in this ever-changing marketplace. Re-member, our strength is in our numbers and the fact that we are local experts providing face-to-face advice to our clients. Please continue to stay involved and support our Association. We need participation from all of our agency members, both small and large. Stay involved by coming to an event, volun-teering for a committee, or simply by reaching out to the Association staff to

Trusted Choice© Plaque

IIARI has obtained a limited quantity of Trusted Choice wall plaques available to hang on your agency wall with your company plaques. These plaques are available on a first come, first serve basis. They are 8” x 10” and two color (Blue & Black) on brushed metal and mounted on a dark board. Supplies are limited so order yours today!

$45 plus tax

Contact Helen Collins at (401) 732-2400 to order.

Independent Insurance Agents of Rhode Island2400 Post Road, Warwick, RI 02886Phone: 401-732-2400 Fax: 401-732-1708www.iiari.com

Your Name

Agency Name

Address, City, State, Zip

Phone & Email

Quantity

executive vice president perspective

I learned good at Penn State. Of course that’s meant to be humor-ous - I don’t really talk like that, much. Everyone knows that our ability to think, learn and adapt as human beings makes us superior to other forms of life. Putting a finger into the flame of a burning candle will leave an impression that won’t go away anytime soon. I’ll bet that you won’t stick your finger in a flame again. Curious George, however, will keep sticking his finger in that flame until all ten fingers are gone and then he’ll start with his feet. As a traditional association, IIARI provides the essentials for its members in order to assist them in operating their agencies efficiently and effectively. The range of products and services runs the spectrum from retirement products to premium finance companies, profes-sional liability to Big “I” Markets, advocacy to education. But like any or-ganization, we need to change not only our product offerings, but also how we deliver them in order to stay relevant in the eyes of our members. As tradi-tion goes, failing to plan translates into planning to fail and the quickest way to become irrelevant is to fail to evolve. A few years ago IIARI began to transition the delivery of its educational distribution to coincide with the chang-es in the member’s preferences and priorities. Over that time, we experi-mented with different delivery methods and courses by adding webinars, online study, self-study, in-agency, and re-mote locations in addition to the tradi-tional classes held in Warwick. With the diversification of our distribution came increased utilization by members

- including some who had never taken advantage of our offerings in the past. By improving accessibility we focused on easing our members’ ability to seek alternate choices. In the past three years we’ve wit-nessed a sustained bad economy cou-pled with soft market conditions and a lack of homeowners markets. Conse-quently, members have been busy and money has been tight, forcing members to prioritize discretionary time and money. Gone was the trip to Warwick and the traditional CE courses which focused on changes in forms and cover-age. Members instead began to focus more on core designation programs as a more efficient use of time and money. We are proud to provide designa-tion programs on Accredited Adviser in Insurance (AAI), Accredited Cus-tomer Service Representative (ACSR), Certified Professional Insurance Agent (CPIA) and Construction Risk and In-surance Specialist (CRIS). Additionally, we promote the Certified Insurance Counselor (CIC) and Certified Insur-ance Service Representative (CISR) designation program in cooperation with MAIA. Next year IIARI will add the Associate in Insurance Services (AIS) to our menu of designation pro-grams. Before I abandon the designation discussion I would be remiss if I did not talk about CPCU. What was once the pinnacle of insurance designa-tions still remains the gold standard in the industry. Historically, CPCU was embraced by all industry profession-als - both agent and company employ-ees. Today fewer agents than ever are

Mark A. MaleIIARI Executive Vice President

You Need Good Learnin’


The Anchor Third Quarter, 20118

pursuing the designation and the reason appears to be the time required to ob-tain the designation. The other desig-nations we offer are classroom based which can be a quick and more efficient way to optimize everyone’s most valu-able resource - time. Some other changes we are mak-ing are also with our members’ time in mind. This year we will begin to market WebCE as our new online CE course provider. WebCE has over 80 courses to choose from and includes mandated courses as well. Not only will you have choices but you can do your courses from your office or in the comfort of your home. Our previous provider offered less than 20 classes and failed to deliver the options you required. One last change to note; effective January 1, the 40 hours of pre-licensing requirement in order to sit for the producers exam will be eliminated. This may sound like a money saver but

don’t overlook the depth and breadth of questions you can expect on the state licensing examination. From personal experience I can tell you that those who self-study and pass the exam success-fully are the exception and are far and few between. The IIARI P&C Pre-Licensing School will be retooled and the name will be changed to the P&C Licensing Preparation School. This article may sound like a sales pitch but it’s not. It is a means to demonstrate to you how IIARI contin-ues to evolve and change in order to respond to the needs of our members. We all live in a very dynamic industry and challenging world and if we fail to recognize and change with the times, we fail as an organization. I want you recognize that your Association is here to help you become the best you can be and we will always be there to change and grow with you. Please never hesi-tate to let us know what we need to do to continue our evolution.

national director’s report

Through the Door

Myron MitchellIIARI State National Director

Sitting in my office reflecting on our insurance business. If you don’t already know I have decided to step down as the SND for Rhode Island. It’s been a great ride but I have got some other things I would like to do. I have worked on your behalf over the years, but it’s time for someone else to take over. There have been many, many years of volunteering my time to IIARI; but there’s no reason to thank me because I got far more out of it than you. The people – yes, the people in this state that I would have never con-nected with without IIARI, the people on the national board that I would not have had the chance to meet--they are what makes it all worthwhile--they are what makes it FUN.

The Business of Insurance – what a great business that I was lucky enough to stumble into. I know some days you don’t think so, but when you’re sitting in another room looking in, there aren’t many businesses that could be better. Work hard and it pays off – that’s all there is to it. I’m just going through the door. I’ll be in the next room it you need me.


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John ChapinComplete Selling

you need to make to talk to that number of people? If you’re not sure of the numbers you need in each area, talk to your manager and other salespeople, or take an educated guess. Just start some-where.

2. Track your numbers. Have a sheet of paper in which you keep count of your cold calls, follow-up calls, presentations, etc. You don’t have to be fancy here, just mark them down so you know what your numbers are at the end of the day.

3. Keep track of what happens on each call. For example, if you made ten cold calls, perhaps two weren’t there, two you didn’t get in to see, two weren’t qualified, two weren’t interested, and you got two leads.

4. Get some reasons behind the num-bers. When will the two people be there? Why didn’t you get in to see the two prospects? Why didn’t the two qualify? Why weren’t the two interested? Why were the two leads you did get inter-ested?

5. Analyze the information. From the above pieces of informa-tion, you will start to recognize patterns and areas of the sales process that need work. For example, are you making your cold calls at the right time of day? Are you effectively handling the gate-keeper? Are you calling a qualified list?

Sales IS Still a Numbers Game6 Tips to Make the Numbers Work For You

There seems to be a new cliché among sales trainers these days and that cliché is: “Sales isn’t a numbers game.” I believe most sales trainers are saying that for shock effect and to sound dif-ferent and controversial. I also believe they are saying that because they think that’s what salespeople want to hear. The reality, and what salespeople need to hear, is that sales is and always will be a numbers game. It’s simple, the more people you talk to, the more business you will do, even a blind pig finds corn. In other words, if you talk to enough people you’ll eventually bump into someone who is looking for ex-actly what you have. Now granted, you have to have quality behind the num-bers, but assuming you’re talking to the right people the right way, it’s all about the numbers. Talking to a large num-ber of people means a large amount of business, talking to a small number of people means a small amount of busi-ness. Following are 6 ways to make the numbers work for you.

1. Set goals. How many calls are you going to make, how many presentations, how many sales? The most effective way to do this is to work backwards. Start with the total number of sales you want to make for the year, then break that down to monthly, weekly, and daily numbers. Next, based upon the averages, how many leads do you need to make your sales numbers? Now how many people do you need to talk to in order to get those leads? Finally, how many calls do

special article


pany, get their feedback, and then work on your weak areas.

6. Adjust the numbers if necessary. If you find you are not reaching your sales goals, adjust your numbers ac-cordingly. Continue to tweak the num-bers until you’re where you want to be.

Running your sales business by the numbers will add some certainty to your career. The one element you have complete control over is your activity: the number of people you call on and reach out to on a daily basis. Use the 6 tips above to have more success and make more sales and remember: if you take care of your sales numbers, your sales numbers will take care of you.

Are you building sufficient interest? What are you doing right on the leads you do get? What about your presentations or sales calls? What happened on each call? Did you close the sale? Did you lose the sale because the person got cold feet or didn’t qualify for financ-ing? Did you get an objection you couldn’t overcome and you have to return? What does that information tell you? Did you not build enough urgency? Was the person not really an interested lead? Did you fail to properly qualify the prospect? What are you doing right and what do you need to work on? Save these numbers in a log book so you can come back to them later to re-view and look for trends. This will give you some ideas as to what you need to improve in order to make more sales. Also, take the results to your manager and the top salespeople in your com-

The Trusted Insurance Alliance is a group of various size agencies that have a proven track-record of success and performance.

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For a confidential discussion on how your agency would benefit from participating in TIA, call Bob Loiselle at (401) 723-8510 or Brian Hunter at (401) 769-9500.

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As an award winning speaker, author, trainer, and coach, John Chapin has over 21 years of extensive sales, customer service, and management experi-ence. In his 21 years, John has been a number one sales rep in three industries and has sold in some of the toughest markets and economies.

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Tuesday, September 20

Continental Breakfast & Morning Education - 8:00 am – 12:00 pmThe day begins with breakfast being served at 8 am and class at 9 am. Students will enjoy a 3 CE credit seminar on “Why Be Ethical”, presented by Tom Ashley.

Lunch - 12:00 pm – 1:00 pmRelax and enjoy a casual lunch while we provide some light entertainment. After lunch, feel free to stroll through the Exhibit Hall.

Afternoon Education - 1:30 pm – 4:30 pmIt’s back to school again, with Tom Ashley presenting another 3 credit seminar, “Personality Profiling and Making The Sale.”

Exhibit Hall Reception & Opening Night Reception - 4:30 pm – 10:00 pmThe evening begins with a Exhibit Hall Reception then it’s off to the Johnson & Wales Culinary Arts Museum for the Opening Night Reception. The night includes a Charitable Silent Auction organized by the Young Agents in support of The Tomorrow Fund.

Wednesday, September 21

Continental Breakfast/Annual Business Meeting/Morning Education - 8:00 am – 12:30 pmThe day begins with a breakfast being served at 8:00 am and all members are invited to attend the Annual Business Meeting at 9:00 am. At 9:30 am, it’s back to the classroom with another 3 credit Ethics program.

Installation Luncheon - 12:30 pm – 2:00 pm

Agency Principals Session - 2:00 pm – 4:30 pmEnjoy an elegant lunch while you witness the new Officers and Directors being sworn in. After lunch, Agency Principals will be introduced to the new “Consumer Agent Portal” (CAP).

Cocktail Reception/Dinner/Entertainment - 4:30 pm – 10:00 pmJoin us for a “Pre-Concert” Cocktail Reception and Dinner Party. Then, back by popular demand, is the #1 dance band from California, “LIQUID BLUE.” Be prepared to dance the night away!

Thursday, September 22

Golf Tournament & Reception- 11:30 am – 7:00 pmThe afternoon begins with a buffet lunch, followed by a 12:30 pm shotgun start at the Pawtucket Country Club. This Club is considered one of the best in the East. After golf, join us for a Cocktail Reception where prizes will be awarded. Please use separate golf registration form to register.

Celebrating RI Past, Present, Future

111th Annual IIARI ConventionThe Westin Providence, RI

Tuesday, September 20 - Thursday, September 22, 2011

SCHEDULE OF EVENTS

REGISTRATION INFORMATION

Full Name

Agency/Company

Mailing Address

City/State/Zip

E-mail

Phone

Register Online at www.iiari.com or complete this form and return with check payable to:Independent Insurance Agents of Rhode Island, 2400 Post Road, Warwick, RI 02886

Phone: (401) 732-2400 www.iiari.com Fax: (401) 732-1708

PLEASE CHOOSE A PACKAGE AND INDICATE THE EVENTS YOU WILL BE ATTENDING.

AMOUNT DUE $

PACKAGE PRICETUESDAY ONLY $145AMCE

LUNCHPMCE

EXHREC

J&WREC

PACKAGE PRICEWEDNESDAY ONLY $110MBRMTG

AGCYPRINC

INSTLLUNCH

AMCE

DINR &ENTR

PACKAGE PRICEFULL CONVENTION $250AMCE

MBRMTG

LUNCHAGCYPRINC

PMCE

INSTLLUNCH

EXHREC

J&WREC

AMCE

DINR &ENTR

Hotel ReservationsAt the end of the evening, if you’re too tired to drive, take advantage of the special IIARI $149 room rate.For reservations call The Westin at 401-598-8000.

Celebrating RI Past, Present, Future

111th Annual IIARI ConventionThe Westin Providence, RI

Tuesday, September 20 - Thursday, September 22, 2011

A LA CARTE PRICEJ&W RECEPTION $65INSTALLATION LUNCHEON $55DINNER & LIQUID BLUE $65PRINCIPAL’S SESSION $45

Melissa E. Darigan, Esq.Partner



of five placards. With these plac-ards displayed, adjusters, with proper company identification, will be granted vehicle access into disaster areas.

More Adjusters Will Be Authorized to Adjust Claims in Disaster Areas R.I. Gen. Laws §27-10-8 authorizes experienced adjusters who are not li-censed in Rhode Island to adjust claims on an emergency basis for designated Rhode Island-licensed employers. Per Department Insurance Bulletin 2005-14, the only losses that may be adjusted by such persons are those that are related to an event declared by the Department as “catastrophic” and that are in areas declared to be a state of disaster by the State of Rhode Island or the President of the United States. An adjusting entity or insurer licensed in Rhode Island may elect to engage qualified individuals upon the occurrence of such an event by filing an online notice with the Department within two business days of when the entity or insurer first begins using the adjuster. From the time of notice, the adjuster will have temporary authoriza-tion to adjust in the State for 120 days. The Rhode Island-licensed employer is legally responsible for the adjuster and accountable for any violations of Rhode Island law or regulation by the adjuster while working on Rhode Island claims.

The Department May Provide Guid-ance On Claims Handling and Other Matters Related to Policies Covering Claimed Losses The Department has made a com-

The Basic Things You Should BeAware of When Disaster Hits

legal briefs

With the National Ocean and Atmo-spheric Administration predicting 14 to 19 named storms and 7 to 10 hurricanes to form in the Atlantic over the next several months, agents should familiar-ize themselves with the disaster man-agement procedures and guidelines that have been put in place for the insurance industry over the last several years. When faced with devastating property damage and loss, insureds rely heav-ily upon their agents to help them with claims, provide relevant information, and make recommendations. To ready themselves for their customers’ inqui-ries and requests for assistance, agents should know about the following procedures and laws that are triggered when the Governor declares a disaster emergency or the Department of Busi-ness Regulation designates a storm as a “catastrophic” event:

Claims Adjusters Will Be Able to Ac-cess Disaster Areas One of the biggest sources of anxi-ety for an insured during an extreme weather event will be the speed (or lack thereof) at which help arrives to address the insured’s property damage. In 2009, the Department implemented a vehicle placard identification system designed to facilitate adjuster access to impacted areas. The Department required each Property and Casualty insurer doing business in Rhode Island to order the number of vehicle placards estimated by the insurer to be needed for vehicle access in the event of an emergency in Rhode Island. Insurers were encouraged to order a minimum

Jennifer R. Cervenka, Esq.Partner


mitment to issue Insurance Bulletins before, during, and after a disaster is declared in Rhode Island for the express purpose of offering the insurance in-dustry guidance and assistance. Some of this guidance is directed at ensuring that insurers follow legally required and appropriate claims handling procedures. In response to the floods in the Spring of 2010 when the State was declared a federal disaster area, the Department also urged insurers to adopt certain claims handling best practices to ben-efit impacted insureds. For example, the Department encouraged licensed Rhode Island insurers to provide im-mediate relief to affected policyholders, including the temporary suspension of premium payments and suspension of vacancy provisions in policies for those temporarily displaced. The Department also warned insurers that it was not ap-propriate to re-rate, cancel, non-renew, or refuse to provide insurance coverage based solely upon an insured’s status

as a victim or evacuee of a disaster, nor was it reasonable to change a rating clas-sification or increase an insured’s rates based upon such circumstance. Given their role in assisting insureds with their claims reporting and coverage issues, agents will want to carefully track all In-surance Bulletins issued by the Depart-ment commenting on these issues.

Hurricane Deductibles May Be Trig-gered In anticipation of or following a disaster, agents may be asked about the applicability of hurricane deductibles. Hurricane deductibles are the only type of windstorm deductible allowed for a homeowner policy issued in Rhode Island and are capped, per Insurance Regulation 110, at a maximum of 5% of the dwelling’s insured value. An insurer is required to waive any applicable hur-ricane deductible where the insured has installed mitigation measures approved by the Rhode Island Insurance Com-


LEGAL EXPERTISE

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• Regulatory compliance and licensing

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• Policy interpretation

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• Litigation/dispute resolution

Closer to the issueswww.psh.com | 401 861-8200

INSURANCE PRACTICE GROUP MEMBERS

Jennifer R. Cervenka, Chair • Christopher C. Cassara

Melissa E. Darigan • Howard Merten

John J. Partridge • Steven E. Snow • Paul M. Kessimian

The Rhode Island Supreme Court licenses all lawyers in the general practice of law. The court does not license or certify any lawyer as an expert or specialist in any field of practice.

iiari 09_IIARI 06 8/11/2010 11:33 AM Page 1

Agents are the link between insureds and insurers and play an integral role in guiding their customers through what can be a complicated process during a time of great stress. Understanding the resources and assistance available to their customers before, during, and after disaster strikes is an invaluable service.


Jennifer R. Cervenka ([email protected]) and Melissa E. Darigan ([email protected]) are attorneys with Partridge Snow & Hahn LLP, a Providence based business law firm. Ms. Cervenka is a partner with the firm and Chair of its Insurance group. Ms. Darigan is a partner with the firm and Co-Chair of its Litigation group.

missioner and subject to the insurer’s inspection and/or submission of satis-factory proof of installation. Agents should be aware that an insured may still be subject to an all perils deduct-ible if included in the policy and in the event the hurricane deductible does not apply to the loss. Further, the only losses to which the deductible will apply are those that occur between the issuance of a hurricane warning for the applicable part of the State by the National Weather Service and 24 hours after the termination of the last hur-ricane warning bulletin for the affected part of the State.

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401-732-2400 Contact: Helen Collins

9A2097 2-11 Claims Free.indd 1 5/24/11 11:28 AM

• Stability of the resume• Employment breaks in the resume• Accomplishments • Location and commuteStep 5 - Qualify candidates on paper.Step 6 - Make applicable phone calls…develop log of candidates. Use screen-ing form and evaluation form. For candidates qualified, set up interviews.Step 7 - First Interviews (complete employment application, background release form, obtain current resume, etc). Use interview (more depth) and evaluation forms.Step 8 - Make final recommendations (2-3 candidates).Step 9 - Client to conduct 2nd inter-views (a lot more depth with additional more comprehensive interview and evaluation forms).Step 10 - Offer, background check, check out references.

Take a moment and reflect if you are in good shape. If this is a concern, con-tact someone in the Human Resources field that can help you. Thanks for your time. See you next quarter.


Dave Nichols Quality Transitions, Inc.

hr corner

Dave Nichols is the principal of a human resource management business, Quality Transitions, Inc., located in Charlestown, RI. He has 25 years of experience in the field and is also retired from the US Army as a Lieutenant Colonel. If you are interested in learning more please visit his website at www.qualitytransitions.net.

In Making the Right Hire...Do You Have a Process?

This is a continuation in the series of human resource articles for the “The Anchor.” My goal is to bring value to your organization in accomplishment of the Essentials of Human Resources. This article will deal with discussing a process in making the right hire. This is the result of making many successful hires over the years. Consider answer-ing the following questions:

• Do you have a current process in place in making the right hire?

• Have you had good experience with your hiring, e.g. low turnover, low cost per hire?

• Do you have all of the right tools in place in making the right hire?

• Are you compliant? When was the last time you checked to insure compliance to your hiring prac-tices?

• Do you have a competitive edge in the market place to attract and retain?

Here is a 10 step process that Qual-ity Transitions has been using for a number of years:Step 1 - Complete employment requisi-tion and job description.Step 2 - Complete any advertising…post ads.Step 3 - Finalize planning documents: Screening form, Interview form.Step 4 - Respond to applicant flow from advertising and social networking.Commence review of resume to in-clude:• Education and work history


by Roger L. Messier, CPCU

The total written premiums for Rhode Island decreased for the 3rd year in a row – $8 million this year, after a $50 million drop last year. More important, however, is the loss ratio for all lines increased on a Paid to Earned basis from 49.8 to 68%, and the Incurred to Earned Loss Ratio jumped from 50.8 to 67.2. This is a true indication that the underpricing that has been going on is finally telling everyone that rates must go up. On individual lines, Private Passenger Auto Liability stayed flat at 66 and increased 4% on Private Passenger Auto Physical Damage. Homeowners loss ratio jumped 7% to 44, and Workers’ Compensation rates also increased, while written premiums decreased about 8 mil-lion. Allstate continues to be the top writer in Rhode Island, and although they have recently gotten increases in homeowners and auto, they are still our main competition. With all the money Progressive spends on advertising, they decreased slightly, and Geico increased very slightly to 3.8% for 36. Makes you wonder if advertising has a limit. Extreme competition continued all through 2010 and continues, but it seems that most com-panies are getting auto and homeowner increas-es, so perhaps, we’ll see some sanity return to our industry.

2010 Rhode Island Insurance Industry Market Share and Loss Ratio Report

(Source: A.M. Best, Best’s Data Services)

Group Lines 2005 2010

PP Auto Liability $ 483,695,000 $ 448,644,000

PP Auto Physical Damage 235,416,000 217,830,000

Homeowners 222,434,000 293,653,000

W.C. 227,019,000 147,771,000

Products Liability 13,668,000 9,354,000

Comm’l Multi-Peril Non-Liability 80,295,000 81,400,000

Comm’l Multi-Peril Liability 57,297,000 47,015,000

Other Liability 193,271,000 160,999,000

Comm’l Auto Liability 87,160,000 69,657,000

Comm’l Auto Physical Damage 22,957,000 15,437,000

Inland Marine 40,535,000 52,775,000

Med Mal - Other Than MMJUA 38,402,000 43,815,000

Fire 31,111,000 43,846,000

Allied Lines 23,395,000 35,153,000

RI Group Line Results 2005 vs. 2010


RANK NAME

2010 MARKET SHARE

2009 MARKETSHARE

2008MARKETSHARE

WRITTEN PREMIUM (000) P/E I/E

1 Allstate 9.0 8.6 7.9 151,700 55.1 56.1

2 Liberty Mutual 7.8 7.6 7.4 131,966 58.2 65.8

3 Progressive 7.1 7.2 7.3 119,285 62.2 62.8

4 Amica 6.6 6.2 5.7 111,978 57.8 52.9

5 Travelers 5.6 5.1 5.4 93,636 86.6 54.4

6 Nationwide 5.3 5.4 5.6 89,193 63.1 56.2

7 Beacon Mutual 5.0 5.4 6.4 85,054 74.3 61.8

8 MetLife Auto 4.5 4.2 4.4 75,539 54.4 55.7

9 Berkshire Hathaway 3.8 3.6 3.2 64,549 61.5 71.5

10 Amer. Int. Group 3.0 3.0 3.8 51,089 152.9 202.6

11 USAA 2.5 2.4 2.3 42,420 62.5 61.5

12 Chubb 2.3 2.4 2.5 39,619 89.1 50.5

13 Hartford 2.1 2.2 2.4 34,980 72.1 59.9

14 Mapfre USA 2.0 1.8 1.7 33,906 59.4 58.9

15 Selective 1.6 1.5 1.3 27,644 69.6 72.1

16 Harleysville 1.6 1.6 1.5 26,858 65.4 72.5

17 Main St. America 1.5 1.4 1.3 26,045 47.0 45.7

18 Zurich 1.4 2.7 3.0 24,398 40.6 72.5

19 NLC Pool 1.3 - - 21,578 70.9 82.1

20 CNA 1.2 - - 19,800 75.9 61.1

RI - Overall State Ranking (All P/C Lines)

2010 2009 2008Private Pass. Auto Liability 448,644,000 437,735,000 436,002,000Private Pass. Phys. Damage 217,830,000 219,675,000 230,260,000Homeowners 293,653,000 286,319,000 275,872,000W.C. 147,771,000 155,908,000 183,821,000Products Liability 9,354,000 9,645,000 10,991,000Comm’l Multi-Peril (Non-Liab.) 81,400,000 84,156,000 85,415,000Comm’l Multi-Peril (Liability) 47,015,000 48,502,000 52,423,000Other Liability 160,999,000 123,053,000 194,448,000Comm’l Auto Liability 69,657,000 70,353,000 77,695,000Comm’l Auto Phys. Damage 15,437,000 16,641,000 18,247,000Inland Marine 52,775,000 49,933,000 55,207,000Med Mal - Other than MMJUA 43,815,000 40,603,000 40,190,000Fire 43,846,000 39,835,000 38,604,000Allied Lines 35,153,000 31,330,000 28,521,000

RI - Group Line Results (By Line)

2010 2009 2008

Total Written Premium 1,686,957,000 1,695,032,000 1,745,412,000

Paid to Earned Loss Ratio 68.0 49.8 48.7

Incurred to Earned Loss Ratio 67.2 50.8 47.0


2010 2009 2008 WRITTEN RANK NAME MARKET SHARE MARKET SHARE MARKET SHARE PREMIUMS P/E I/E

1 Allstate 15.4 15.3 14.0 45,280,000 46.8 43.0 2 Amica 12.0 11.6 11.2 35,185,000 48.4 44.7 3 Liberty Mutual 9.8 9.9 10.4 28,848,000 35.9 33.7 4 Nationwide 7.8 8.1 8.4 22,928,000 48.5 52.8 5 MetLife Auto 5.8 5.8 6.0 17,104,000 37.2 45.0 6 USAA 4.6 4.4 4.3 13,647,000 35.5 35.3 7 Chubb 4.5 4.7 5.3 13,101,000 42.6 36.5 8 Andover 3.6 3.9 4.4 10,696,000 48.6 42.5 9 Prov. Mutual 3.5 3.3 3.2 10,205,000 37.3 45.910 Travelers 3.3 3.4 3.8 9,684,000 41.0 49.711 NBIC 3.3 1.7 1.1 9,638,000 24.4 19.612 NLC Pool 3.0 1.4 1.6 8,747,000 66.8 82.613 Mapfre USA 2.9 2.6 2.4 8,371,000 50.6 45.014 Main St. America 2.1 2.1 2.1 6,207,000 36.8 26.715 Harleysville 2.1 2.1 2.2 6,091,000 57.8 52.716 Tower Group 1.9 - - 5,509,000 21.3 28.417 Amer. Int. Group 1.6 - - 4,799,000 32.8 71.018 Quincy Mutual 1.4 2.9 3.0 3,994,000 52.1 43.719 Allianz 1.3 1.7 1.7 3,811,000 56.3 37.820 EMC 1.1 1.2 1.3 3,130,000 48.5 22.5

RI - Homeowners

2010 2009 2008Total Written Premium: 293,653,000 286,319,000 275,872,000Paid to Earned Loss Ratio: 44.6 37.5 35.3Incurred to Earned Loss Ratio: 44.1 36.6 37.5Market Shares: National Agency 14.6 17.1 18.8 State & Regional 26.2 23.6 23.5 Direct Writers 59.2 59.3 57.7


RI - Private Passenger Auto Liability

2010 2009 2008Total Written Premium: 448,644,000 437,735,000 436,002,000Paid to Earned Loss Ratio: 66.7 66.4 62.9Incurred to Earned Loss Ratio: 66.5 66.9 62.0Market Shares: National Agency 6.5 9.0 10.7 State & Regional 31.0 30.0 29.5 Direct Writers 62.5 61.0 59.9

1 Progressive 18.1 18.5 18.6 81,026,000 62.0 63.6 2 Allstate 13.6 17.8 12.3 61,089,000 67.2 73.5 3 Amica 11.0 10.1 9.4 49,445,000 64.1 58.3 4 Berkshire Hathaway 9.5 9.1 8.2 42,630,000 59.5 67.6 5 MetLife Auto 8.0 7.8 8.8 35,796,000 63.7 62.1 6 Nationwide 7.8 8.4 9.1 35,168,000 74.3 67.6 7 Liberty Mutual 6.6 6.4 6.6 29,553,000 56.4 58.4 8 Travelers 3.8 4.1 4.5 17,202,000 64.7 54.7 9 Mapfre 3.7 3.7 3.3 16,542,000 62.2 62.910 USAA 3.3 3.3 3.2 14,902,000 90.5 86.411 Integon 2.3 2.6 2.7 10,220,000 79.6 76.912 Main St. America 1.7 1.5 1.3 7,639,000 52.0 54.513 NLC 1.4 - - 6,122,000 91.3 97.914 Tower Group 1.4 - - 6,069,000 25.0 63.615 Quincy Mutual 1.0 1.1 1.2 4,589,000 58.8 68.416 Harleysville 1.0 1.1 1.1 4,342,000 75.1 87.717 Hartford 0.8 0.8 0.8 3,434,000 117.5 99.618 Selective 0.7 0.5 - 3,294,000 44.9 62.819 Providence Mutual 0.6 - - 2,824,000 75.6 85.720 State Farm 0.6 0.7 0.7 2,770,000 78.2 98.0



1 Allstate 16.4 16.3 16.5 35,630,000 41.9 40.5 2 Progressive 12.8 13.9 14.5 27,910,000 65.1 65.8 3 Amica 10.6 10.6 10.7 23,050,000 61.9 60.2 4 MetLife Auto 9.8 9.0 8.9 21,387,000 52.7 53.7 5 Berkshire Hathaway 8.3 7.7 6.6 18,015,000 76.3 76.6 6 Liberty Mutual 7.8 7.4 7.2 16,977,000 50.8 50.8 7 Nationwide 7.0 6.9 7.3 15,270,000 56.2 55.7 8 USAA 4.8 4.9 4.9 10,554,000 64.9 64.8 9 Travelers 3.9 3.9 4.1 8,546,000 62.2 62.710 Mapfre 3.6 3.5 3.3 7,837,000 62.7 64.511 NLC 1.7 - - 3,761,000 62.6 62.812 Main St. America 1.6 1.3 1.2 3,437,000 74.2 75.013 Integon 1.5 1.7 1.9 3,366,000 73.1 74.314 Tower Group 1.4 - - 3,037,000 60.1 56.115 Harleysville 1.3 1.3 1.3 2,913,000 52.1 51.316 Quincy Mutual 0.9 1.0 0.9 2,054,000 49.3 49.617 Selective 0.9 - - 1,862,000 80.9 81.118 State Farm 0.7 0.7 0.8 1,592,000 65.7 68.319 Hartford 0.7 0.7 0.7 1,421,000 47.5 49.320 Prov. Mutual 0.6 0.5 - 1,266,000 83.5 80.3

RI - Private Passenger Auto Physical Damage

2010 2009 2008Total Written Premium: 217,830,000 219,675,000 230,260,000Paid to Earned Loss Ratio: 58.3 54.8 51.6Incurred to Earned Loss Ratio: 58.2 54.5 51.7

1 Beacon 57.6 58.7 60.8 85,054,000 74.3 61.8 2 Hartford 8.2 7.4 7.4 12,064,000 69.7 52.6 3 Liberty Mutual 7.7 9.9 7.2 11,420,000 118.1 105.6 4 Travelers 5.5 3.9 3.4 8,163,000 63.7 36.6 5 Amer. Int. Group 3.3 3.5 6.1 4,903,000 108.7 135.2 6 Zurich 1.9 1.9 2.4 2,753,000 95.0 129.4 7 MEMIC 1.7 1.6 1.2 2,570,000 49.3 58.9 8 Chubb 1.7 1.7 1.0 2,459,000 22.1 47.5 9 CNA 1.7 1.2 1.1 2,452,000 69.6 94.610 Guard Ins. Group 1.3 1.2 1.0 1,863,000 43.0 15.711 ACE INA 1.1 1.3 1.8 1,634,000 108.1 -2.512 W.R. Berkley 0.8 0.5 0.5 1,153,000 35.6 54.213 Markel Corp. 0.8 - - 1,145,000 2.9 38.514 Arbella 0.7 0.7 0.4 1,030,000 32.5 54.715 Meadowbrook 0.6 0.7 1.0 920,000 113.2 66.316 Old Republic 0.6 0.5 0.4 862,000 63.3 85.417 White Mtns. Group 0.5 0.5 0.5 677,000 62.7 51.318 AmTrust Financial 0.4 0.3 - 645,000 170.8 999.919 Selective 0.3 0.3 0.3 485,000 53.1 39.220 Magna Carta 0.3 0.4 0.4 444,000 58.9 55.0


RI - Workers’ Compensation




1 Travelers 12.8 12.7 11.6 8,928,000 34.7 31.5 2 Progressive 10.5 11.0 11.7 7,300,000 46.3 38.3 3 Liberty Mutual 9.3 7.2 6.5 6,499,000 36.5 38.1 4 Selective 6.9 7.5 7.1 4,807,000 48.7 46.3 5 EMC 4.9 5.2 5.7 3,422,000 49.3 43.4 6 Arbella 4.8 3.4 2.6 3,330,000 33.7 71.9 7 Tokio Marine 3.8 3.4 3.1 2,644,000 24.5 45.4 8 Harleysville 3.8 3.6 3.2 2,641,000 41.5 75.1 9 Zurich 3.8 4.6 4.4 2,623,000 46.0 57.0 10 Amer. Int. Group 3.3 3.1 5.4 2,318,000 3.5 96.2 11 Nationwide 3.1 3.4 3.9 2,180,000 31.9 2.7 12 Hartford 3.1 3.2 3.4 2,178,000 33.2 59.9 13 Main St. America 2.7 2.8 2.5 1,888,000 50.1 44.4 14 ACE INA 1.8 - - 1,245,000 0.5 40.4 15 Hanover 1.7 1.7 2.1 1,188,000 28.8 53.3 16 Amer. Nat. P&C 1.7 1.9 1.8 1,188,000 97.1 35.0 17 Canal Group 1.7 1.8 1.9 1,173,000 77.6 36.9 18 W.R. Berkley 1.6 - - 1,131,000 33.7 16.9 19 Merchants 1.6 1.6 1.5 1,106,000 54.1 75.8 20 CNA 1.6 1.6 1.9 1,083,000 42.8 33.2

RI - Commercial Auto Liability



RI - Commercial Auto Physical Damage


1 Travelers 10.8 10.7 10.6 1,663,000 70.8 60.3 2 Progressive 9.1 9.6 10.3 1,404,000 77.1 77.7 3 Liberty Mutual 8.9 6.8 6.8 1,368,000 67.8 67.0 4 Selective 7.5 6.6 6.2 1,161,000 92.1 99.8 5 EMC 5.2 5.1 5.4 799,000 70.3 68.3 6 Harleysville 4.3 4.0 3.7 658,000 94.0 90.5 7 Zurich 4.1 5.6 6.4 629,000 55.0 48.6 8 Arbella 3.3 2.4 2.0 508,000 119.2 104.5 9 Nationwide 3.2 3.3 3.6 492,000 59.6 51.5 10 Tokio Marine 3.0 2.4 2.2 469,000 67.4 68.9 11 Hartford 3.0 3.0 3.4 465,000 79.0 68.0 12 Amer. Nat. Group 2.9 3.3 3.3 443,000 80.1 76.3 13 Main St. America 2.8 2.7 2.6 434,000 75.9 74.8 14 Canal Group 2.3 2.0 2.8 350,000 60.1 61.7 15 Munich-American 2.0 1.6 - 312,000 98.5 84.7 16 CNA 2.0 - - 304,000 76.0 82.4 17 Hanover 1.9 1.8 1.7 295,000 47.7 46.8 18 ACE 1.9 - - 287,000 1.6 24.9 19 Merchants 1.8 1.7 - 271,000 101.0 97.0 20 W.R. Berkley 1.4 - - 221,000 48.2 47.7



1 Travelers 12.5 11.2 12.0 5,889,000 74.6 19.6 2 Liberty Mutual 11.0 9.8 8.9 5,164,000 47.7 62.1 3 Main St. America 9.0 8.7 8.2 4,226,000 35.0 31.3 4 Tokio Marine 6.8 6.1 5.1 3,210,000 12.7 66.6 5 Harleysville 6.2 5.4 5.2 2,893,000 19.9 94.5 6 Hartford 4.2 5.1 6.2 1,973,000 94.4 -83.9 7 Chubb 3.8 4.0 4.1 1,808,000 39.2 35.7 8 Nationwide 3.4 3.5 5.7 1,614,000 78.2 29.5 9 White Mtns. Group 3.0 5.8 6.2 1,401,000 77.2 66.5 10 Ohio Mutual 2.6 2.5 1.9 1,216,000 22.6 54.3 11 Merchants 2.6 2.6 2.9 1,202,000 13.1 34.6 12 Hanover 2.5 1.6 1.7 1,155,000 52.3 -32.4 13 Quincy Mutual 2.4 2.5 2.5 1,149,000 25.6 -15.0 14 EMC 2.3 2.2 1.7 1,096,000 37.8 31.2 15 CNA 2.2 2.3 2.0 1,052,000 101.7 -38.8 16 Great American 2.0 2.2 2.6 921,000 75.7 402.1 17 Allstate 1.9 1.8 - 915,000 111.1 84.6 18 Vermont Mutual 1.8 1.8 1.9 854,000 7.9 -10.6 19 Amer. Int. Group 1.6 1.7 1.7 756,000 65.4 67.0 20 Selective 1.4 - - 670,000 14.0 50.4

RI - Commercial Multi-Peril


Combined Liability & Non-Liability Multi-Peril

Liability $ 47,015,000 Paid to Earned Loss Ratio: 65.7Non-Liability 81,400,000 Incurred to Earned Loss Ratio: 71.6 TOTAL $128,415,000


RI - Commercial Multi-Peril (Non-Liability)


1 Travelers 10.0 10.3 11.6 8,159,000 37.4 44.3 2 Liberty Mutual 8.9 8.2 6.7 7,270,000 35.0 80.3 3 Hartford 7.2 7.2 7.8 5,845,000 12.3 5.1 4 Chubb 7.0 6.3 6.7 5,701,000 154.0 172.6 5 Tokio Marine 5.4 5.3 5.1 4,373,000 47.5 47.5 6 Allstate 5.2 4.7 3.9 4,261,000 53.2 54.3 7 Zurich 4.9 5.1 7.1 3,967,000 49.0 40.0 8 Harleysville 4.6 4.5 4.4 3,742,000 56.5 37.4 9 Nationwide 4.4 4.6 4.9 3,614,000 56.0 25.010 CNA 3.2 2.9 2.7 2,573,000 170.4 208.111 Quincy Mutual 2.9 2.9 3.0 2,341,000 53.0 60.512 White Mtns. Group 2.7 5.0 5.4 2,221,000 322.0 366.613 Greater NY 2.2 1.5 - 1,785,000 41.9 43.614 Providence Mutual 2.2 2.3 2.4 1,752,000 24.5 26.015 Hanover 2.1 - - 1,722,000 128.6 144.516 Vermont Mutual 2.1 2.1 2.2 1,707,000 24.2 24.217 Country Ins. & Fin. 1.9 1.8 1.9 1,546,000 31.6 29.018 EMC 1.8 1.8 1.6 1,465,000 43.2 38.419 Great American 1.8 2.0 2.5 1,437,000 27.2 5.520 Main St. America 1.5 - - 1,247,000 36.0 53.0

Ever

Won

der?

The thirties were the worst economic times in the history of the United States. Twenty-five percent unemployment was normal, and many of the people who had a job were working short hours. It was a time when welfare first began, a social security law was enacted and many, many other social programs were enacted. Pov-erty was the rule during this era, and the minutes of the RIAIA meetings are scanty but with a recurring theme. The minutes of the meetings indicate that the Board of Directors spent most of their time look-ing for new members and trying to collect delinquent dues. Every year the delinquent members were assigned to board members for collection. At the May meeting in 1933, banks and trust companies writing insurance riled the members present, and they voted to send Senator Hebert and their Representative in Washington a request to sponsor an amend-ment to the Federal Banking Law divorc-ing insurance and banking – in 1999, 66 years later, the opposite occurred, and now banks can be in the insurance business. The September 1932 minutes indicate that the Association had 86 members in good standing. On September 1, 1933, a year later, there were only 73 members – an indica-tion of the deepening depression. The annual meetings were held in the evening at the Turks Head Club, a presti-gious club located at the top of the Turks Head Building in downtown Providence. The usual attendance ran between 28 and 43, and the cost was $2. By 1938, conditions were bad, and the Board voted to have the annual meeting at lunch and at the annual meeting only 26 were present. The Association at that time had no of-fice or paid staff so everything was done by the elected officers. In July of 1938, Henri N. Morin, the Insurance Commissioner, and Horace G. Weller, the Director of Business Regula-tions spoke at a special meeting attended by 46 members and explained to the mem-bers that as a result of a recent law change anyone negotiating insurance contracts

would have to be licensed. They also out-lined steps to eliminate unfit brokers. Before this time, anyone could enter the insurance business. A common saying at that time was “If you failed at every-thing else, you could always open up an Insurance Agency.” It took many years to finally have a law passed that had even minimum requirements. In 1954 when I came into this business, I took the test without ever going to any class. I believe the hardest part was not misspelling your name and address. Our Association has worked very hard over the years to insure that the people selling insurance will not harm the public. In 1939, Carleton I. Fisher was appoint-ed Education Chairman. Carleton was a dedicated, hard-working member of this Association and was considered the Dean of Insurance in Rhode Island because of his vast knowledge. In 1979 the Association created the Carleton I. Fisher Award to be given to members who have devoted a great amount of time and effort on behalf of the Asso-ciation. Since 1979, five members have received this coveted award. They are:

Roger L. Messier 1979 Francis Lathrop, Jr. 1983 Richard Divver 1986 William Warburton. Jr. 1992 William Preston 1996 Robert Padula 2000 Robert Loiselle 2004 Robert Slocum 2008

Roger L. Messier, CPCU


PROFILE of an IIARI Member

ANCHOR: What are your greatest opportunities?

I started in the life & health insurance busi-ness in 1974 and was with MetLife for 26 years. In 1999 I decided to crossover to be an Independent Agent. I started working as a producer at an independent insur-ance agency and ended up purchasing the agency in 2009. I believe the agency was always a member of IIARI and I’ve main-tained that membership.

I like what I do because I have a passion for this business. I feel this business gives everyone a chance to work with their own strengths whether it be in sales, customer service, underwriting or claims.

I feel two of the greatest challenges are marketing and effective branding. You need to combine the old fashioned way of marketing your agency by being active and visible in your local community. Keep the Top of the Prospecting Funnel Full. We try to come up with one marketing idea per month. We then implement a few of those ideas and assess them after a few months to see if they are effective. At the end of

every day, I ask my staff, “How many cus-tomers did we add today?”

I always say there is no limit on work or rest. We have to balance the double edge sword. We have the opportunity to measure my activities so we can reach my goals. It’s not how much time you have but what you do with it. Effective use of time can be a great opportunity for every-one.

My advice would be to develop a market-ing plan in writing and be willing to invest time and money in that plan. Your plan has to be measurable and do fall trap to wishful thinking.

The world has changed, internet and social media are making things change even faster. You have to realize that there is not only one playing field out there. Set your own objectives. Early in my career, I learned that struggles can become chal-lenges which can lead to greater opportu-nities.

ANCHOR: How long have you been a member of IIARI?

ANCHOR: What do you like most about your business?

ANCHOR: What are your greatest challenges?

ANCHOR: What advice would you give to someone interested in becoming an independent agent today?

ANCHOR: What is your biggest struggle?

iConnexionStephen Cicerone636 Eddie Dowling HighwayNorth Smithfield, RI 02896

Employees of iConnexion include (left to right) Mark Thompson, Cheryl Chmura and Stephen Cicerone


Insurer duties under Asermely revisited: DeMarco, et al. v. Travelers Insurance Co., et al.; Rhode Island Supreme Court; 2011 R.I. LEXIS 116 (July 12, 2011).

Summary: In 1999, the Rhode Island Supreme Court promul-gated a new rule to govern insurance company conduct with respect to settlement of claims. In Asermely v. Allstate Insur-ance Co., the Court declared that insurance companies must do more than act in good faith in settling claims; they have a fiduciary obligation to act in the best interests of the insured in order to protect the insured from excess liability, and to refrain from acts demonstrating greater concern for the insurer’s own interests than the risk to the insured. As a result, the Court held that an insurance company has a fiduciary duty to serious-ly consider a reasonable offer to settle within the policy limits. When an insurer declines to settle within policy limits and a judgment results that exceeds the policy limits, the insurer is liable for the judgment including interest. The Court therefore assigned to insurers the risk of miscalculating the merits of the claim (and relevant settlement opportunities) and the burden of absorbing a judgment in excess of the policy limits. This rule applies even if bad faith cannot be shown. The Asermely case dealt with a single claimant, leaving un-resolved the standards to which an insurance company would be held in more complicated situations involving multiple claimants. The Rhode Island Supreme Court answered this question in DeMarco, et al. v. Travelers Insurance Co. This case arose from a car accident that resulted in serious injuries to multiple claimants. The vehicle’s owner had a Travelers policy with limits of $1 million. One injured party, Wayne DeMarco, filed suit and made numerous attempts at settlement for the policy limits before trial, in each settlement com-munication invoking the principles defined in the Asermely case. Travelers did not agree to pay to the policy limits and did not counteroffer. Travelers also did not respond to all of DeMarco’s overtures on settlement. On at least one occasion, Travelers asserted that the requirements of Asermely were not implicated because if Travelers were to pay the policy limit to DeMarco, that action could expose its insured to personal liability stemming from the non-DeMarco-related claims. At trial, the jury returned a verdict in favor of DeMarco for $2.8 million. In subsequent proceedings, DeMarco settled the claim to the $1 million policy, released Travelers’ insureds and accepted an assignment of rights from the insureds against Travelers. DeMarco then brought this suit demanding judg-ment against Travelers for the entire jury verdict and judgment

amount. The Providence County Superior Court, applying the Asermely principles, granted summary judgment in favor of DeMarco and against Travelers. Travelers appealed, arguing that the rule in Asermely does not apply in multiple claimant cases. In a comprehensive 40-page opinion, the Supreme Court held that when an insurer is faced with multiple claimants with claims that in the aggregate exceed the policy limits, the insurer has a fiduciary duty to engage in timely and meaning-ful settlement negotiations in a purposeful attempt to bring about settlement of as many claims as is possible, such that the insurer will relieve its insured of as much of the insured’s po-tential liability as is reasonably possible given the policy limits and the surrounding circumstances. In meeting this duty, the insurer must negotiate as if there were no policy limits applica-ble to the claims and as if the insurer alone would be liable for the entire amount of any excess judgment. The Court stated that the insurer must exercise its best professional judgment throughout this process, always keeping in mind the best inter-ests of its insured and the necessity of minimizing its insured’s possible eventual direct liability. As with the Asermely rule when it is applied in the single claimant situation, the Court indicated that in order to show that an insurer has violated its fiduciary duty in a multiple claimant case, the insured (or a party to whom the rights of the insured have been assigned) need not demonstrate that the insurer acted in bad faith but only that the insurer did not act reasonably and in its insured’s best interests in light of the surrounding circumstances. The Supreme Court further held that in determining wheth-er an insurer has met these duties in a multiple claimant case it will be necessary to engage in a comprehensive factual analy-sis, taking into account all of the surrounding circumstances in the particular case. Such circumstances would include, among other things: the number of claimants; the relative extent of the damages suffered by each claimant; the time at which the extent of those damages was made known to the insurer; the amounts of the claimants’ settlement demands; the wishes of the insured; the timing and nature of the insurer’s attempts at negotiating a settlement; the perceived likelihood of litigation being commenced by a particular claimant; and the relative willingness of the various claimants to settle. The Court found that the reasonableness of Traveler’s actions with respect to DeMarco’s settlement offers was a question for the jury to decide and therefore vacated the summary judgment and re-manded the case to the Superior Court for further proceedings.

CASE LAW NOTEA Review of Case Law of Interest to IIARI Members

This feature of The Anchor reviews recent case law involving the insurance industry. Please contact the authors for more information: Jennifer R. Cervenka, Esq. and Melissa E. Darigan, Esq., Partridge Snow & Hahn LLP, 401-861-8200, www.psh.com.


On September 20, 2011, the Independent Insurance Agents of Rhode Island will hold its 111th Annual Conven-tion in Providence. In conjunction with the Opening Night Reception at the Johnson & Wales Culinary Arts Museum, The Young Agents Group will host a Silent Auction! All proceeds from the Silent Auction will be donated to The Tomorrow Fund. The Tomorrow Fund was founded in 1985 to ease the traumatic emotional and financial effects of childhood cancer. Their founders - a group that included doctors, child life specialists, and parents of children with cancer - recognized that, in addition to the very best in medical care, children with cancer and their families need and deserve financial and emotional assistance to cope with the overwhelming challenges of this insidious disease. The Tomor-row Fund is the only non-profit organization in Rhode Island that provides daily financial and emotional support to children with cancer and their families. Please join us at the Silent Auction and place your bids so that we can continue with our succes in being able to donate over $9,000 to The Tomorrow Fund for the third year in a row. If you should have any questions regarding the Silent Auction or The Tomorrow Fund please feel free to contact the Young Agents Staff Liaison, Marcia Berthiaume at (401) 732-2400 or e-mail at [email protected]. Be assured your participation will positively impact The Tomorrow Fund. Thank you so very much for your gen-erosity and consideration.


The Young Agents recently held its Second Annual Mini-golf tournament at Mulli-gan’s Island in Cranston on Thursday, August 18, 2011. We enjoyed some good food, great company and a friendly competition. When all score cards were turned in and counted, we found that all players did an excellent job and showed their true mini-golf skills. We did have one foursome that outshined the rest and they were: Chris Sanford from Puro Clean, Josh Wells from Euclid Financial, Jitka Brook and Christopher Brook from DeBla-sio Insurance. The winners were each awarded with a trophy and dinner gift certificate to Shula’s in Providence. Thank you all for attending and making it a fun night. Also, due to the generosity of our young agents, we were able to donate school supplies to those less fortunate. With that said, none of this could be possible without the generous support of our Spon-sor: Clean Care of New England. We sincerely thank you for your sponsorship along with the goodies you had for us that night.

Young Agents Recently Held its Second Annual“Mini Golf Tournament”

Johnson & Wales Culinary Arts MuseumSilent Auction being held on

September 20, 2011 to Benefit:

Pictured above (from left to right) are the winners of our 2011 Mini-Golf Tournament: Chris Sanford, Josh Wells, Jitka Brook, Christo-pher Brook.


IIARI Hosts 29th Annual Education Awards Luncheon The Independent Insurance Agents of Rhode Island continued a long-standing tradition of recognizing the educational achievements of its members and affili-ates by hosting the 29th Annual Education Awards Luncheon at the Providence Marriott. This year, we honored the following students:Accredited Adviser in Insurance (AAI) Margaret-Mary Arts Michele Ouellette Sarah Arts Tracey Pimentel Melissa Chevalier Jeffrey Reed Jennifer Doherty Susan Schenck Laura Honey Denise Schrutt Neal Leaheey Mary Lou Scolaro Joetta McKenna Jennifer Selvidio Jeffrey McKernan Eileen Simmons Hope Mitchell Melodye Simmons Michelle Mowry Rhonda Stiles Margaret Nelson Barbara Tomlinson Kathleen Noury Gregory Wicks Katherine Osborn Accredited Customer Service Representative (ACSR) Sarah Arts Laurie Lambert Monique Bouchard Valerie Longolucco Justin Bourque Linda Markey Erica Cavaliere Christine Preston Stacy Champlin Jessica Rosa Katherine Everett Nicole Smith-Bellavance Shelley Garcia Sandra Tisch Gladys Harrow Dianne Turek Wendy Hebert Anthony Villella Aimee JohnsonAssociate in General Insurance (AINS) Dawn Adams Cathy Sousa Jennifer Doherty Kelly Townsend Sarah Lassor Deborah Vadeboncoeur Joetta McKenna Rhonda Ziehl Eileen SimmonsAssociate in Insurance Services (AIS) Melissa Chevalier Elizabeth Morris Patricia Friedrich Lori Thomas Laurie Lambert

Associate in Information Technology (AIT) Patricia Matos Certified Insurance Counselor (CIC) Maria Barnowski Christopher Slocum Valerie Garvin Nicholas Slocum Sandra Lavery Bradford PrestonCertified Insurance Service Representative (CISR) Peggy OlaverriaCertified Professional Insurance Agent (CPIA) Susete Aguiar Gregory Paolino, Jr. Emmanuel Albaret Jeanne Vasconcellos Kristin Giardillo Donna Wilkinson Lori LaFlamme Construction Risk & Insurance Specialist (CRIS) James Bromage Christina Zaroogian Pamela PelletierCertified Risk Manager (CRM) Joetta McKenna Richard Sullivan Group photos by designation were taken and ap-pear on our website. Two special IIARI Education Scholarship Awards were presented to the following:• Susan Schenck from AAA Insurance was the AAI

graduate with the highest cumulative grade point average in Rhode Island.

• Dianne Turek from AAA Insurance was the ACSR graduate with the highest cumulative grade point average in Rhode Island.

Several members also were awarded education scholarships from the Donald J. Fallon Education Scholarship Fund. Funding for these scholarships is provided by John Woods of John A. Woods Appraisers. The 2011 awards were presented to:• Jennifer Medeiros - Doorley Agency, Inc.• Megan Mello - Carey, Richmond & Viking Ins.• Christine Preston - Troy, Pires & Allen LLC• Melanie Tatro - John J. Clarke Insurance, Inc.• Christina Vieira - John Andrade Ins. Agency

Timothy Mailloux presents Susan Schenck with the Highest AAI Grade Point Average

Award

Timothy Mailloux presents Dianne Turek with the Highest ACSR Grade Point

Average Award

e&o corner

James C. Keidel, Esq. Partner

Keidel, Weldon & Cunningham, LLP

Christopher B. Weldon, Esq. Partner

Keidel, Weldon & Cunningham, LLP


accounts. Accordingly, every insurance agency or brokerage that is not current-ly using insurance coverage checklists should seriously consider implementing the use of coverage checklists when discussing coverage options with a cli-ent or a potential customer. There are many sample insurance coverage checklists that are available for agencies and brokerages. In fact, coverage checklists (and other risk as-sessment tools) are available for pur-chase from such companies as IRMI, FC&S, Rough Notes and SilverPlume Sage. Also, the national association of the Independent Insurance Agents and Brokers of America (IIABA) offers a number of sample insurance coverage checklists and other risk assessment tools; the address for that web site is www.IIABA.net. A word of caution should be raised, however, since each agency and brokerage has its own distinct clientele and/or unique type of business, there is no form checklist that fits every agency or brokerage. An agency or brokerage that seeks to im-plement the use of coverage checklists should review the sample forms avail-able and then modify them to fit the framework of their particular business. In addition to using insurance coverage checklists for commercial coverage, every agency or brokerage should also be sure to have an insurance coverage checklist that is used for personal lines coverage. The IIARI website has avail-able some sample checklists for both commercial and personal lines cover-age that you can refer to; the address for that website is www.IIARI.com.

The Use of Coverage Checklists byInsurance Agencies and Brokerages

In this issue of The E & O Corner, we will discuss some of the benefits, for agencies and brokerages as well as for customers, of using insurance coverage checklists. Using coverage checklists is a simple, but very effec-tive, errors and omissions loss control practice that any agency or brokerage can easily implement and follow. The use of insurance coverage checklists often protects an agency or brokerage against inconsistent and con-flicting advice being given to custom-ers when discussing various insurance options that may be available in the market. Using an insurance coverage checklist is a recommended E & O loss control practice which, if followed on a consistent basis, can help an insurance agency or brokerage better service its customers. In addition to providing better customer service, an insurance coverage checklist can also be invalu-able if an agency or brokerage is forced to defend itself against an E & O claim alleging that it failed to obtain the proper type of insurance coverage. In fact, many professional liability insur-ers that provide insurance coverage to agents and brokers commonly ask on their application whether the agency or brokerage uses insurance coverage checklists. For example, the applica-tion for a very well known professional liability insurer specifically asks the following question: “Does the agency use a coverage checklist on all com-mercial accounts?” Other insurers also ask similar questions concerning the use of insurance coverage checklists for both commercial and personal lines

Conclusion For the reasons we have discussed, it is our recommendation that every agency or brokerage seriously consider using insurance coverage checklists on a regular basis. In our experience, such a checklist may be the “Get Out of Jail Free Card” that an agency or brokerage needs in defending an E & O claim or lawsuit. A checklist can show that a particular type of coverage was discussed with a customer or potential customer but then declined. An agency or brokerage that uses insurance cover-age checklists will not only help protect itself against potential E & O Claims and lawsuits, but will also provide better customer service and in addition likely sell more insurance.

These examples should serve merely as templates for an agency or brokerage to use in developing its own coverage checklists for its particular clientele. In addition to these samples, ACORD has created a detailed checklist within its Homeowner Application (ACORD 80 (2009/10)) which if used when writing homeowners coverage provides some of the same benefits that the above sample checklists provide. Insurance coverage checklists should be used by producers and those at the agency or brokerage who provide service to customers whenever they are discussing insurance coverage options with existing customers and potential customers either a face-to-face or by telephone. If the coverages contained on the checklist are reviewed in person with a customer, a good practice is to have the customer sign and date the form to acknowledge that the cover-ages were reviewed with them. If the insurance coverage checklist is dis-cussed over the telephone, the agency or brokerage employee who has the discussion should be sure to note the date and time that the checklist was reviewed with the customer. Once reviewed with the customer, the agency or brokerage should be certain to main-tain a copy of the insurance coverage checklist that was actually reviewed in a customer’s file. When using insurance coverage checklists, an agency or brokerage should always be cognizant of the constant theme running throughout all good E & O practices – that theme is “consistency.” What we mean by this is that these checklists should be used uniformly by all employees throughout the agency or brokerage to ensure that insurance coverage options are re-viewed and discussed with all custom-ers and potential customers.


The law firm of Keidel, Weldon & Cunningham, LLP concentrates its practice in handling errors and omissions claims, litigation and loss control for insurance agents and brokers. Please direct any comments or questions to either James C. Keidel or Christopher B. Weldon either by mail at the firm’s Rhode Island office located at 303 Jef-ferson Boulevard, Warwick, RI 02888, or by email at [email protected] or [email protected] or by telephone at 401-773-7730. The firm also maintains offices in White Plains, NY; Syracuse, NY; New York, NY; Wilton, CT; and, Bayonne, NJ.

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tomers. Central to this effort is search engine optimization. To ensure that your website is found, search engine best practices need to be applied to your site. This includes proper page encoding (META tags) and the creation of unique, accurate title tags for each page (briefly describing business name, service, location and page description). Unique keywords and descriptions should be applied to each page on your site. Your site also should be registered with major search engines (Google, Bing, Yahoo). In addition, Google Analytics should be implemented into your site, which involves placing code on every page, enabling you to track how people are coming to your site and where they are spending their time. You should also utilize Google’s Adwords keyword tool to see what terms us-ers are searching and make sure this content is reflected within your website. Lastly, you should establish a Google Places page, review the information to ensure that it accurately represents the agency, and then encourage your cus-tomers to write positive reviews.

Be part of the conversation with social media In today’s environment, personal phone calls and visits are no longer the only way to touch base with individuals interested in becoming involved with your organization. Each day more and more people learn about new services and stay in touch with people through social networking. In addition to the central benefits of reaching new and

John HouleJH Communications

marketing thought


Turning Your Website into an Effective Marketing Tool

How effective is your agency web-site? To build a website that is right for your agency and your customer, look at what the consumer really wants. First, find out the most common questions your customers have, and then provide answers for them. Consider what the most prevalent areas of interest are, and then include rich content about them. Think about why potential custom-ers would go to your competitors, and then deliver winning arguments in your favor. Keep in mind that the beauty of your website rests in its functionality, the relevancy of the content, and the ease of use.Ask yourself about your current website:• Can I get to any place with one

click of my mouse?• Does the home page tell visitors

what you do in easy to understand terms?

• Is the layout visually pleasing or is it challenging to find areas of inter-est?

In the end, content wins, but it must be delivered in a format that is easily understandable, simple to navigate, and useful to the visitor.

Make sure new customers can find your website Designing a dynamic website is only one aspect of building an effec-tive Internet presence. Once you have a website that is truly reflective of the quality organization you have built, it needs to be found by potential cus-

customers better in these platforms.

Is your website mobile friendly? Smart phones and tablets are in-creasingly becoming one of the pre-ferred ways to access the Web. When someone visits your website from their smart phone or iPad, what do they see? Is the text barely legible and is “Flash” animation prevented from playing? Have you formatted your website for these mobile devices? For smart phones, you should customize the most relevant pages that consumers are visiting your site for information. For iPad users, make sure that “Flash” animation is replaced with static graphics when the website is ac-cessed from these devices. This is just another example of how you can make your website more geared towards your customers. One of the many benefits of having a website for your customers and your business is the unlimited possibilities that can be developed.


current customers, social networking and blogging is instrumental to the search engine optimization of your website. You should incorporate a blog into your site, and write content based on what people are searching for in terms of insurance. While social me-dia and blogging are easy to do, you really need to make the commitment to do both consistently and effectively. Simply making posts to your business Facebook page or using generic content on a blog is not enough. You need to be engaged in the conversation. Don’t just be the town crier yelling out informa-tion in a crowded square, allowing your information to be simply dismissed as mere noise. Use social media and blogging for how they were intended, a dynamic communication tool to en-gage with people. Post and comment on other company’s and friend’s Face-book pages, and join blogs to make comments. This way you will see how conversations truly unfold in social me-dia, so that you can engage with your


wc update

Michael LynchVice President, Legal

Beacon Mutual

posals will be included in a proposed bill next year. The Workers’ Compensation Ad-visory Council and its subcommittees continue to work through the summer months. These groups are studying the Donley Center; the continued “Exclu-sive Remedy” protection afforded both the General and Special employer in the temp/employee leasing scenario and the procedural obligations of employers under the Act. Additionally, in concert with the Court and under the leadership of Judge Ferrieri, a combined group of Advisory Council and Workers’ Compensation Bench/Bar members is reviewing the costs and expenses as-sociated with workers’ compensation litigation. Chief Judge Healy continues to lead the Court in keeping all pre-trial hear-ings heard within twenty-one days of filing. Every year the Court is resolving more petitions than are filed. The vast majority of over 7,000 new petitions filed each year are resolved at the pre-trial level. This leaves the judges the time to quickly conduct trials on mat-ters that are not resolved at the pretrial. The Court also continues its educa-tional outreach efforts to the young employee’s of our state through the “Yes-RI” program and the immigrant community. The Court and Chief Judge Healy continue to make themselves available to groups of business and worker advocacy groups, particularly those in the minority community, in the hopes of providing an understanding of our system. The Medical Advisory Board and its Chairman Vincent Yakavonis, M.D

The Rhode Island workers’ com-pensation system remains strong in this trying economy, but not without a lot of hard work. Please accept this general update on our state’s system with an eye towards keeping your customers engaged and aware. The Rhode Island General Assembly passed a series of bills this year impact-ing workers’ compensation. The Work-ers’ Compensation Court was given jurisdiction over appeals by injured-on-duty police and fire personnel from determinations on accidental disability retirement from the state retirement board (H5894). This increased au-thority only applies to injuries on or after 7-1-11, so there should not be an immediate impact on the Court and the long term impact is expected to be minimal. The Department of Business Regulation proposed a bill that became law that eliminates the filing of one obsolete report (S513). Finally, pas-sage of the “Civil Union” bill (H6103) now means that there is another class of dependents who are entitled to benefits in the event of a work related injury or death. The Workers’ Compensation Advi-sory Council made recommendations to the General Assembly this year in the form of an “Omnibus Bill” (S1106). This bill sought to clarify the Court’s jurisdiction over post settlement medi-cal bills, the interplay between TDI, state disability retirement and workers’ compensation and extend the capital-ization requirements for the Uninsured Employer Fund. While the bill passed the Senate, it did not pass the House. You can expect that some of these pro-

Workers’ Compensation - What is Going On?


that is going on in Rhode Island work-ers’ compensation. I encourage you to stay involved and visit the Court with your customers, attend an Advisory Council meeting or a hearing at the General Assembly and attend a Medical Advisory Board meeting. Only with your continued focus and involvement will we be able to keep our workers’ compensation system healthy, thereby assisting our state in becoming a more competitive place to do business.

and Executive Director John McBur-ney continue to oversee the study and updating of protocols for the care and treatment of injured workers. The Board is presently studying a pharma-ceutical protocol and it is expected that the medical fee schedule will be re-visited again this year. The Board has also made some changes to its require-ments for the submission and approval of Preferred Provider Networks. I hope this provides you the context you need to know and understand all

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insurance distribution system and hav-ing knowledgeable committee members can make a difference. Some legislation of general interest was:• Casinos: A referendum will be in-

cluded in the 2012 general election ballot. House Majority Leader Nick Mattiello noted on the House floor we are facing “competition from the north.” If Massachusetts goes ahead with casinos, Rhode Island may lose massive amounts of revenue. Legislators feel the public will recognize this and be more likely to approve full casino gambling rather than face large tax increases.

• Seat Belts: Legislation passed mak-ing seat belt violations a primary offense.

• Government Employee Pension Re-form: We did not see any action but this will be dealt with in a special session in October.

• Election laws: Voters will need photo IDs in 2012 and polls will close at 8 p.m. instead of 9 p.m.

• Binding Arbitration: This legis-lation that would impact teacher contracts did not pass.

• Motor Vehicle Offenses: Drivers with three violations in one year must appear in traffic court instead of mailing in fines. Mobile phone usage is prohibited for drivers un-der age 21.

Insurance Legislation we followed that passed:• Commercial Lines Regulation:

IIARI promoted legislation that was enacted requiring insurers to provide loss runs to their insureds within 14 days. Insurers will also be required to notify insureds 60 days in advance of reductions in policy

IIARI’s Government Affairs Com-mittee (GAC) had another busy year monitoring the General Assembly session that ended July 1. As expected, the biggest issue was the state budget which was nowhere near as painful as first envisioned. Due to some human service benefit cuts, a little more tax revenue than expected and an actual surplus in the ending year’s budget; sales taxes were not increased on the vast array of items that were in Gover-nor Chaffee’s original proposed budget. Several interesting pieces of insurance legislation passed this year and even the new civil union law will have insur-ance ramifications. The GAC consists of IIARI mem-bers along with our Executive Vice President Mark Male, our association lobbyist Terry Martiesian, and Maureen Sears who provides staff support to the committee. We track hundreds of pieces of legislation and we regularly lobby in support, opposition or remain neutral and/or watch them for informational purposes. This year we were successful in passing legislation and were success-ful impacting other legislation to lessen onerous provisions on you and your customers. Before I go any further, it’s impor-tant that members support and con-tribute to IIARI PAC so we can meet legislators at fundraisers and get to communicate our message. We need to demonstrate to legislators we are the local insurance people - the ones in the local community - the ones providing local jobs and paying local taxes. If you haven’t contributed this year please do so. We are also seeking committee members with health insurance back-grounds as the Obama healthcare be-gins to unfold. The next couple of years will see major changes in the health

Legislative Wrap Up

Written byErnest Shaghalian Jr, CPCU, AAIErnest Shaghalian/Alpine Ins.Chairman, IIARI Government Affairs Committee


Reform was the sharing of surplus lines taxes for multi-state risks. Part of Rhode Island’s legislative changes this year allows the state to enter into a multi state compact with other states for the sharing of these multi state taxes. Among other changes in state requirements will be that surplus lines brokers will now be able to have one bond for the agency instead of a bond for every broker in the agency. In gen-eral, surplus lines companies and brokers will be governed by their home state, not every state they do business in.

• Health Insurance: Legislation passed which mandated health in-surance policies to provide $32,000 in coverage per child for treatment of autism until children reach age 15.

• Life Insurance: Bill of Rights legis-lation was passed that improves and increases the disclosure require-ments in life insurance policies.

• Workers Compensation: Statutes saw little change except for some technical changes that have minor effects on benefits. Government Affairs Committee member David White monitors the many workers compensation bills put in each year, attends meetings of the Workers Compensation Advisory Council and keeps us advised on these is-sues.

• Sales Tax on Insurance Claims: Part of the state budget will require in-surance companies include sales tax on automobile total loss claims be-ginning 10/1/11. Under current law companies could either include the tax on top of the ACV or not pay the tax and give the insured a letter stating that the sales tax wasn’t included in the claim payment. The letter allowed the insured to get a

coverage. Prior to this legislation coverage reduction notification was not required if it resulted from the use of new policy forms that were filed and approved by the Insur-ance Division. Notice on premium increases will be 60 days in ad-vance for commercial policies if the increase is greater than 10%. These items will go into effect January 1, 2012.

• Pre-licensing: Classes will no longer be required prior to taking insurance license examinations effective January 1, 2012. This bill was promoted by the Division of Insurance because other regulated professions do not require pre-licensing classes.

• Surplus Lines Laws: Some major changes were necessitated in order for RI to be in compliance with the Dodd-Frank Wall St. Reform Act passed by Congress in 2010 (which contained Surplus Lines reform). While following this issue the GAC learned many of our members were licensed surplus lines brokers (more as retailers for their own clients not as wholesalers), so we took an extra interest in these related bills. We were able to get one of the pro-posed bills amended so it was less onerous on brokers (agents). Mark Male was instrumental in secur-ing language from IIABA which changed the statutory responsibility of who “determined” the surplus lines company’s “financial integri-ty”. The original bill would put the onus on the broker to determine that the company had “financial integ-rity”. The amended language that became law requires the surplus lines company be responsible for establishing satisfactory evidence of “financial integrity”. The main issue of the National Surplus Lines


ance companies and IIARI lobbied against this mandate.

• Construction Indemnity Agree-ments: Legislation was introduced but didn’t pass that would have prevented the insurance transfer of risk from a project owner to a general contractor. Already in R I laws is a provision that prohibits the owner of a project from shedding the ultimate liability for their own negligence and transferring it to another party (like the contractor). The current law does allow for the project owner to transfer the insur-ance responsibility. However, even with the transfer of the insurance risk the project owner is still legally responsible for their project regard-less of hold harmless agreements or any other contractual agreements. It’s considered against public policy for an entity not to be responsible for their actions.

• Electronic Insurance Compliance: Legislation was introduced with about 10 days left in the session that would have required insurance companies to download daily auto insurance policies in force informa-tion to the state for the purpose of verifying consumer’s compliance with mandatory insurance require-ments. This bill would have also enabled the state to use digital cameras to randomly record license plates and instantly verify vehicle registration laws and insurance law compliance and mail out violation tickets of $350 when there wasn’t compliance. The vendor touting this system predicted $25,000,000 in fines that could be generated for the state from this. One senator on the Judiciary Committee that heard this proposal joked that the state would have to build debtor prisons for all the violators like they had in Eng-

sales tax credit for the amount of the claim to be used against the sales tax on the replacement ve-hicle. In those cases the state didn’t get sales tax on an amount equal to the claim payment. As of October 1, the state will no longer grant the credit so companies will have to pay the sales tax on all total loss claims and consumers will have to pay sales tax on the full cost of the replacement vehicle (if and when they buy a replacement car).

Legislation that didn’t pass:• Health Insurance Exchange: The

Obama federal health insurance law requires states to set up and regulate health insurance exchanges which would be the source of health insurance for individuals and small businesses starting in 2014. If the state doesn’t set up and regulate an exchange then the federal gov-ernment will govern the exchange. Since legislation didn’t pass, Rhode Island may need to accomplish this by executive order which could be less effective than doing so legisla-tively. Terry Martiesian will serve on the Governor’s Commission to address this issue. The role of private insurers and agents is very much up in the air for the under-writing and sale of health insur-ance.

• Required MVR’s: A proposed law would have mandated that insur-ance companies secure MVR’s from the DMV every three years. This original budget would have required insurers to order motor vehicle driving records from the DMV for every insured driver at least once every 3 years (at a cost of $20 each). This would have been an eight million dollar money maker for the state. The insur-

less the damage was at least 75% of the book value thus forcing repair of the vehicle and consumers to keep heavily damaged cars.

This was a synopsis of some of the many bills introduced this year that could affect us as agents or as general business people. It takes an entire com-mittee to review these bills. As chair-man of the Committee I’d like to thank the member volunteers that partici-pated in the GAC meetings this year. These members include Ed Bishop, Julia Bridges, Steven Brooks, Michael Carano (NAIFA-RI member), Mela-nie Flamand, Christie Hanaway, Brian Hunter, Peter Kenahan, Nancy Men-dizabal, Tony Pires, Kim Raymond and David White. They not only attend our meetings but also attend political fund-raisers on behalf of the Association.


land back in the days of Dickens. Luckily this bill wasn’t even given serious consideration when the insurance companies testified that this system would add a lot of cost, was not in use in any state and was rejected by every state that consid-ered it.

• Limited Towing Vehicles: Legisla-tion didn’t pass that would have put the same strict insurance and bonding regulations on private tow vehicles that are required on PUC regulated public towing companies. This would have hurt many of our clients like mechanics and auto body shops that provide free private towing to their customers as part of a related repair service.

• Auto Body Repair: Legislation would have prevented insurers from deeming a vehicle a total loss un-

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The Independent Insurance Agents of Rhode Island proudly introduces the 2011 Partners Program. The 2011 Partners Program is a mechanism to allow companies to demonstrate their support of the American Agency System and IIARI.

We thank all of our 2011 Partners Program sponsors. Diamond sponsor The Beacon Mutual Insurance Compa-ny, Gold sponsor Progressive, Silver sponsors Arbella Insurance Group, and Quincy Mutual Group, and Bronze sponsors American Commerce Insurance Co., The Andover Companies, EMC Insurance Companies, Hanover Insurance Group, Narragansett Bay Insurance Co., Phenix Mutual Fire Insurance Co., and Safeco Insurance.

Be sure to thank your companies for their unparalleled support of IIARI and all independent insurance agents. Look for all of our sponsors throughout the coming year as we acknowledge their commitment at all IIARI events and functions.

THANK YOU!

American Commerce Insurance Co.The Andover Companies

EMC Insurance Companies Hanover Insurance Group

Narragansett Bay Insurance CompanyPhenix Mutual Fire Insurance Co.

Safeco Insurance

BRONZE SPONSORS

Arbella Insurance GroupQuincy Mutual Group

SILVER SPONSORS

GOLD SPONSOR

InsurBanc was founded by insurance industry leaders, giving us the expertise to assess your independent agency’s financial position and, like you, provide professional advice and recommendations. We combine the flexibility and convenience of technology with the personal touch of our dedicated staff.

InsurBanc recognizes the uniqueness of your agency business and offers a range of specialized deposit products to help facilitate cash management and maximize value. We look at your agency’s individual cash flow situation, then design a cash management program to meet your needs.

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2011 Trusted Choice Big “I” Rhode Island National Qualifier

by Paul Damiano, Damiano Agency

On June 27 & June 28 we held our local qualifier for the National Trusted Choice Big “I” Tournament to be held Au-gust 1 – 4 at the Reunion Golf Club in Madison, Mississip-pi. When our qualifier began the only question we had was who was going with Jamison Randall to Mississippi? The dominant junior golfer in Rhode Island gave early notice he was going to be hard to beat shooting an opening round of 2 over par 73. The following day after starting 4 over par in his first 4 holes he shot 5 under on the next 14 holes to finish the day at 1 under par 70 for a 2 day total of 143. Jamison won this tournament in a walk over by 7 shots to his nearest competitor. You have to go back to 1994 with Mike Capone and 1995 with Chris Hynes (both 3 time win-ners) to find a 7 shot victory in our qualifier. We hold high expectations for Jamison in our National Tournament. He is seasoned and should prove steady under the pressure. The battle for second place was the one we anticipated. Finally Alex Grimes of Portsmouth won as second quali-fier over David Kraunelis and Ryan Southworth. In the

girls division Susan Cavanuagh won by 9 shots over Katie Rockwell, while in the boys 14 and under division Matt Corio won by 9 shots over Patrick Welch. Infrequently we do receive thanks for our efforts. Last year Mr. Randall sent me a thank you note for our time and efforts in December. This year he did not wait as long. Upon completion of the tournament he went to each volun-teer and offered his hand and words in thanks of our time and effort. Makes you want to come back and do it again. We are already planning for next year as we have con-firmed the opening round again at Potowomut on Monday June 25, 2012. Sounds like a long time away but we hold out hope for some younger players to develop their games to be able to compete in our National Tournament. Again many thanks to our committee of David Adamo-nis, Jr. and Steve Feinstein of the United States Challenge Cup, Maureen Sears of our association, Scott Cooke from the Barton Agency and Bill Combies of Bentsen Combies Insurance.

Congratulations to the successful students who recently completed the Pre-Licensing school held at IIARI in Warwick. Special congratulations go to the class vale-dictorian, Elisa Cardone from Gencorp Insur-ance Group, for achieving the highest score. The next Pre-Licensing school is scheduled for November 14 - 18. Register online at www.iiari.com.

AgentsIN Action


Congratulations Pre-Licensing Grads

Have an agency announcement or news you’d like to share? Let us know!

CALL US @ 401-732-2400 or EMAIL US @ [email protected]

The AnchorIIARI2400 Post RoadWarwick, RI 02886

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