m mm m

MARYLAND MESSENGER MAY | JUNE 2013

Congrats to Emily Bucci, ACSR, AAI, AINS

page 6

MarylandACSR ofthe Year!

As a Big I member, you can offer an RLI personal umbrella policy (PUP) to every client. Doing so reduces your E&O risk, provides your client with better service, helps you round accounts and earns your agency more commissions. You'll also be supporting the IIABA relationship with RLI, a key company supporter of state and national Big I for over 25 years.

You should also be sure your staff offers and explains Uninsured and Underinsured Motorist (UM/UIM) coverage to every personal lines account. This coverage availability is being phased in to our program by state during 2011, stay tuned to www.bigimarkets.com or watch your email for updates.

Learn more about your access to RLI at www.iiaba.net/umbrella, or if you need support creating a mailer or flyer, contact Carla M. Short, ACSR at 410-766-0600 x 100, or visit www.iiamd.org/insprog.htm.

Avoid a PUP E&O Claim...RLI and the Big I Can Help!

Source: Big I Professional Liability and Swiss Re

E&O E&O

FAIL.FAIL.Almost nine out of 10 E&O claims

involving personal lines are failure to

offer/explain/procure/limits.

www.iiaba.net/umbrella

Sources of Personal Lines E&O Claims

34%

29%

12%12%

Failure to recommend

Inadequate limits

Failure to procure

Failure to explain

All other errors

IIAM OFFICERS 2012-2013Dennis Lawson Immediate Past Chair

Angela Ripley, CIC, CRM, AIS Chair

Michael McCartin, CPCU State National Director

Terry Katz, CPCU Chair-Elect

Jay Duke Vice Chair

Don Grauel, CIC Director-At-Large

Thomas C. Lowe, CPCU Past President Rep.

Shelley Arnold, CPCU, AU, PresidentARM, AAI, ACSR, AINS

THE MARYLAND MESSENGER INDEPENDENT AGENTS OF MARYLAND, INC.Editor : Shelley Arnold, CPCU, AU, ARM, AAIGraphic Designer: Laurie HareAdvertising Info: www.iiamd.orgThe Maryland Messenger is a monthly publication publishedfor the exclusive use of regular and associate members ofthe Independent Insurance Agents of Maryland. Publicationof any article, letter to the editor or advertisement in the Maryland Messenger should not be deemed an endorsement by IIAM of the opinions expressed or products advertised. Questions and comments should bedirected to the editor, Shelley Arnold.

Editorial Office, IIAM, 2408 Peppermill Drive, Suite A, Glen Burnie, MD 21061 phone 410.766.0600 • fax 410.766.0993 email iiamarnold@aol.com • www.iiamd.org

t a b l e o f c o n t e n t s

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Chairman’s Message

Congrats to Emily Bucci, Maryland ACSR of the Year

Ask Pat

Sine Die ‘The End of the Maryland Session’

Life Corner

Tidbits

Preparing Your Organization for Risk, Threats and Opportunities

Education Corner

Big Changes Coming to Big “I” Maryland Education Department

Catastrophic Weather Events Affect Coverage

Erie Insurance releases police data on top 10 driving distractions involved in fatal car crashes

chairman’s messageAngela Ripley, CIC, CRM, AIS

Spring has finally arrived and it appears that warmer weather is finally upon us and ‘Sine Die’ has come and gone for2013. The 2013 Legislative session was extremely busy for the Independent Insurance Agents of Maryland. Although theIIAMD had no bills introduced the legislative committee followed over 80 pieces of legislation that affected the insuranceindustry.

I enjoyed reading the Legislative updates from our new www.iiamd.org website. The ability to click right through to theMaryland General assembly and follow the process of the bills was wonderful and time saving! Some of the bills thatwere monitored and followed closely ; HB 1203 Homeowner’s or Renters Insurance Policy Exclusions for Specific Breeds or Mixed Breeds of Dogs Notices. This was signed into law and becomes effective October 1, 2013, HB 71Homeowner’s Insurance –Underwriting Based on Geographic Area and HB 537 Insurance Producers – Continuing Education. Information on these and other bills are included in this newsletter.

I encourage everyone to check out the newly designed website and follow-up on these bills. Thanks to Rebekah Langford who designed the new website. The website is very easy to navigate and find what is needed to get started as a new agency, the application to receive an E & O quote, the technical information and law buttons appear on the righton the first page. The website provides up to date information at the top! Review the new website and reach out to Rebekah to thank her today! She put a lot of time and energy outside of the office into the website! I would like to personally THANK YOU! Love the new Maryland logo too!

The Annual “Big I” Legislative Conference was held in Washington DC on April 17-19. Jay Duke, Terry Katz, Michael McCartin and I attended this conference. We had an opportunity to meet our Maryland Legislators, Congressman JohnSarbanes, Senator Ben Cardin, Congressman Any Harris and Congressman John Delaney. During our meetings with ourlegislators, we discussed:1. Agent Licensing Reform – Uniformity across the states 2. Terrorism Insurance – enacted Nov. 2002 and up for renewal December 2014 3. Taxes – small business 4. *Crop Insurance

Lastly, writing about our legislative activities with both our state and national governments this month, it is time to showyour support for those who help us every day on Capitol Hill. Please contribute to InsurPAC today…. http://www.inde-pendentagent.com/GovernmentAffairs/InsurPac/default.aspx or you can click right through on the new awesome Independent Insurance Agents of Maryland website to make your contribution. The goal for Maryland this year is $9,700of which three agents have contributed since the end of March totaling $1,350. Please take your moment today andmake your donation so that we can execute the agenda above. Support your InsurPAC.

I would like to thank everyone for a great year as Chairperson of the Independent Insurance Agents of Maryland. This has truly been an experience far greater than I could have ever imagined. Thank you!

I would like to welcome Terry Katz as our new Chairperson for the 2013 – 2014 year. I wish her the very best for continued success of this wonderful organization.

Saving the best for last, The IIAMD has announced the ACSR of the year and the Tribute Day was held on April 24th2013. I would like to congratulate Emily Bucci of HMS Insurance as Maryland 2013 ACSR of the year! Congratulations Emily and keep pursuing your insurance education! MAY | JUN 13:4

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MAY | JUN 13:6

Maryland ACSR of the Year!

Emily Bucc iACSR, AAI, AINS

The Independent Insurance Agents of Maryland (IIAM) announced the recipient of the 2012

Maryland ACSR (Accredited Customer Service Representative) of the Year Award. Emily Bucci,

ACSR, AAI, AINS, has been selected for the honor, which was presented to her on April 24th at

the Annual ACSR Tribute Day, held in Timonium, MD. Ms. Bucci is a Senior Account Manager at

HMS Insurance Associates, Inc., where she has worked for the past nine years. Ms. Bucci earned

her Commercial Lines ACSR designation in 2008. Since that time she has also earned her AINS

and AAI designations and her CRIS certification, further demonstrating her commitment to

professionalism and her clients.

The ACSR designation was established by the Independent Insurance Agents & Brokers of

America to recognize the tremendous contributions made by customer service personnel to

the success of the independent agency. “Today’s CSR plays such a vital role in the success of an

agency, it is important that their professionalism be recognized. Independent agencies today

require greater sales volume supported by fewer staff than ever before. Without the technical

and customer service skills provided by the agency staff, this challenge could not be successfully

met.”, said Shelley Arnold, CPCU, AU, ARM, AAI, ACSR, AINS, IIAM President.

IIAM congratulates Ms. Bucci for her many accomplishments. Persons interested in attaining the

ACSR designation should call Rebekah Langford at IIAM, 410-766-0600 or email her at

rebekah@iiamd.org.

One of the eligibility requirements for ACSR of the Year is an essay question. Ms. Bucci chose,(con’t on page 7)

MAY | JUN 13:7

‘How can the ACSR program reducethe chance of agency errors or omissions losses? ‘ Describe how this haschanged your own procedures or those of the

agency.

Errors and Omissions losses can be costly to anagency, not only monetarily, but also with regards to time. Knowing that our agency focuses on delivering excellent customer service and being atrusted advisor for our clients, I knew that we already had the base for a good Agency E&O RiskManagement Program. After reviewing the curriculum for the ACSR program, I could instantlysee that the topics included would be beneficial toour agency.

The first module I completed was Professional Development and Customer Service Skills. Thetopics reinforced many procedures that we werealready using at our agency. It was the Errors &Omissions module that included many ideas that Ithought could benefit us. The curriculum includedan “Action List” which I filled with items I thoughtshould be implemented in our office right away.After discussions with my supervisor, we decidedthat the two most important action items on mylist were to end all reminder calls for non-paymentcancellations and to begin using a renewal letter toobtain updates from the insured. My manager recognized both ideas were important and webegan implementation immediately.

While we had discussed ending reminder calls inthe past, we had failed to establish a consistent procedure throughout the department. We addedsome verbiage to our policy delivery letter that explained that although we may have contactedthem in the past, effective immediately, we wouldno longer be doing this. While we knew that some customers relied on our calls each month, we

communicated with every client regarding ourchange in procedures.

In looking back, this was accepted well and has certainly proved to have been a positive change.The new procedure provided invaluable time savingfor our staff as well as the consistency necessary toavoid any possible errors.

The second item we implemented was a “RenewalUpdate Letter”. This letter has evolved throughoutthe years, but began with a note to the client 90days prior to the renewal asking for any changesthat are necessary to be included on the renewalquote or policy. We include a brief schedule of coverage, drivers list, and vehicle and propertyschedules to allow the client to view the currentexposures and make any changes that are needed.Not only has this process reduced endorsementsafter the policies have been issued, it has allowed usto be in front of any potential issues that could giverise to an errors and omissions claim.

When I began the courses for my ACSR designation, I was fairly new to commercial linesand extremely eager to learn everything I could.The ACSR program has given me a solid foundationon which to build my career in the insurance industry. The program touched on everything fromErrors & Omissions to dealing with difficult clientsto proper document retention. The more I learn,the more I realize the importance of education,procedures and checklists to help reduce errorsand omissions. I apply many of the principleslearned from the ACSR program every day andcontinue to pass these insights onto my staff. This education has provided me with knowledge and confidence to be able to accept new and challenging tasks. I sincerely believe that my growthat HMS Insurance can be attributed to thefoundation of principles of the ACSR program.

(con’t from page 6)

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Dear Pat:I am soliciting business for a non-profit organization.

I will make a large commission if I can capture and write the property and casualty insurance for this association. In orderthat I am able to rope in this potential client, I am trying tothink creatively. I was wondering whether I can tell the association that I will give money back to them if I am thewriting agent.

Cindy in Clinton

Dear Cindy:Beware! The Maryland Insurance Code is replete

with prohibitions against rebating of premiums. The issue that you face is whether the structure of

what you want to do would come within these rebating prohibitions. In that regard, let me mark the two extremes.An insurance producer is not prohibited from donating to acharity, doing business with an insured who has given business to the producer, or otherwise supporting clients.There are prohibitions against telling a potential insured thatits premium would be effectively reduced because of a kickback/rebate. The reason that this prohibition exist is thatrates charged to an insured must be those which are on filewith the Maryland Insurance Administration. A rebate circumvents these rate filings.

So what can an insurance producer do? The producer can sell an approved affinity program which allowsa reduced rate to an organization. The insurance producercan split a commission with a licensed insurance producer associated with the nonprofit. The insurance producer canpay for legitimate advertising and marketing, including spon-sorships. The insurance producer can even pay under somecircumstances rent to the organization.

Bottom line—be smart, be legal and do not rebate.Pat

Dear Pat:I am an insurance producer who had flooding at my

home due to Hurricane Sandy. I was surprised at how littlethe flood policy actually covered and how much I have to payfor premiums. Is there anything I can do for myself and myclients?

Fred in a Flood Zone

Dear Fred:Flood insurance is and will continue to be a real

issue for insurance producers and customers. This is particularly true since post-Katrina, the National Flood Insurance Program (NFIP) had to borrow heavily from the

federal government. This past summer Congress amended and

reauthorized the NFIP. The new legislation will transform the NFIP rate and underwriting assumptions. Of note, thecurrent cap on annual premium has been increased from 10percent to 20 percent. There are mapping changes and “severe repetitive loss” changes that will also cause dramaticpremium increases.

A smattering of companies have now begun offeringnon-governmental flood insurance policies on the excessmarket.

So what can you do for yourself? Probably not muchin reality, except pay an extra premium. But what should youdo for your policyholders? It would make good businesssense for a producer to suggest that clients review theirflood policy and the NFIP in order to understand their limited coverage.

And if there is a flood approaching, move everythingyou safely can from the basement.

Pat

Dear Pat:I am tired. Tired of the rat race. Tired of having to

continue to sell, sell, sell. Tired of having to deal with unhappyemployees, insurers and clients. And I am starting to havesome health issues. I think I might just retire. Any suggestions?

Peter from Parkton

Dear Peter:My sympathies to you. The insurance business is not

easy these days. Nor is getting old.Your letter mentioned that you had some health

issues. I would at least consider whether you have disabilityinsurance which might provide coverage. I know of manypeople “retire” because health issues prevent them from performing the essential functions of their job.

You also need to have a financial plan. Althoughmany agents sell retirement products, many have not done avery good job of planning for their own retirements. At aminimum, you should meet with a financial planner who willhelp you consider whether you can afford to retire.

If you can afford to retire, you need to consider howto maximize the value of the good will of the business youhave developed. While agencies are not being sold for whatthey used to go for, there is value in an agency—even onethat has grumpy clients and difficult insurers. A good lawyercan help you explore options that make sense for you.

Pat MAY | JUN 13:9

askPATPatricia McHugh Lambert901 Dulaney Valley Road, Suite 400Towson, MD 21204Pessin & Katz, P.A.410.938.8800 • 410.339.6759 (direct)410.832.5628 (fax) • plamber@hpklegal.com

MAY | JUN 13:10

Senate Bill 65-Workers Compensation-ClaimsProcessing-Electronic Delivery of Decisions- Effective October 1, 2013. Allows a decision or order to be sent to each party’s attorney and to each unrepresented party by first class mail or by electronicmeans, if the party’s attorney, the party or the unrepresented party consents to it. (SA)

House Bill 342/Senate Bill 446-Homeowner’sor Renter’s Insurance and Private PassengerMotor Vehicle Insurance- Bundling Requirement-Prohibited-Effective October 1,2013. This bill prohibits an insurer from denying, refusingto renew, or cancelling homeowners or renters insurancefor an applicant or policyholder solely because the applicant or policyholder does not carry private passengerauto insurance with the same insurer. Conversely, the billalso prohibits an insurer from denying, refusing to renewor cancelling auto insurance because the applicant or policyholder does not carry homeowners or renters insurance with the same insurer. (DC)

House Bill 392-Motor Vehicle Liability Insurance-Personal Injury Protection Coverage- Prohibition on Premium Increases-Effective October 1, 2013. The IIAM Legislativecommittee strongly supported the passage of the bill, submitted detailed written testimony read during the hearings, and the bill passed a vote of both chambers. Thislaw will protect the Maryland insurance consumer fromany premium increase for a claim made and paid under thepolicy PIP coverage. The insurance companies will nolonger be able to remove or reduce loss free discounts,add surcharges, retier, or reclassify a policy as a result ofsuch a claim being made.

We felt this was good legislation for the consumer, particularly for those who are more or less 'forced' tomake a PIP claim under their own policy for medical expenses in 'not-at-fault' accident situations when they

would have preferred to not make any claim to their policyat all. We also felt this was good for agents, as thereshould really be no negative impact to our business as a result of this law. Outside of the few 'habitual PIP claimmaker' clients that agents may have, the impact should infact be a very positive one. Agents will no longer have thethankless duty of trying to explain a premium increase toour current clients at the renewal following a PIP claimmade as a result of a 'not-at-fault' accident. The law couldconceivably reduce some the necessity for agents to remarket at renewal as the 'playing field' becomes leveledbetween those carriers who have in the past chosen to increase premiums for PIP claims and those who have chosen not to. And as a member of IIAM, now when askedby their client if their premium will be increased if theymust make a PIP claim to their policy, agents can now an-swer them with a definite 'No' and explain that they arepart of a group that worked to make it so this year. (WK)

House Bill 537-Insurance Producers-Continuing Education – Online Courses-Effective October 1, 2013. This bill authorizes insurance producers to obtain all or part of their credithours for continuing education for license renewal fromcorrespondence courses or online courses that have beenapproved by the Commissioner. (SA)

House Bill 695-Homeowner’s Insurance- Anti-Concurrent Causation Clause-Notice andStudy-Effective June 1, 2013; October 1, 2013;December 31, 2013. This Bill addresses, through consumer education and specific notification, the problemscaused by the Anti-Concurrent Causation exclusion whichis designed to exclude all causes of loss of a given claimshould one such cause be specifically excluded, i.e. Flood.There are a number of examples of the use of this clause,especially during an event such as a hurricane. Accordingto the Maryland Insurance Administration, the use of thisclause was infrequent in Maryland until Hurricane Katrinain 2005. Up until this time, most insurers separated Flood (con’t on page 11)

Sine Die ‘The End of the Maryland Session’By the IIAM Legislative Committee

The General Assembly closed the 2013 session on April 8, 2013 atmidnight. Several insurance bills passed during this session. To makeyou aware of some of those bills that could have definite impact onyou, your business or your client, we offer:

MAY | JUN 13:10 MAY | JUN 13:11

(con’t from page 10)caused damage from Fire or Windstorm damage if separateloss figures could be ascertained. Due to the enormity ofKatrina, insurers started to apply the Anti-ConcurrentCausation policy language to such “dual-cause” claims,thereby resulting in the total exclusion of a loss. Whilesuch clauses are perfectly legal if the policy form containingthem has been approved by the respective state insuranceauthorities, it has become obvious that the general publicwas either unsure of the clauses true application or wascompletely ignorant of its existence.

The bill requires the following:1. An annual notice must be sent to each and every

policyholder, whose policy contains an Anti-Concurrent Causation Clause (ACC), advising him/her of the existence of such a clause

2. The notice must be clear and specific3. It must describe fully the workings of the ACC and

how it applies to the insurance in question4. It must provide at least one example of the

workings of the ACC 5. It must inform the insured of the need to read

their policy, specifically its exclusions6. It must state that the insured should communicate

with the insurance producer or the insurer regarding the need for further details as to the application of the ACC.

Although the Bill takes effect on June 1, 2013, its provisionspertaining to the Notice Provision will not go into effecton new and renewal policies until October 1, 2013. Thebill also requires the House Economic Matters Committee(assisted by the MIA) to perform a specified study on thehandling by both Insurers and the National Flood InsuranceProgram (NFIP) of property claims involving two or moreCauses of Loss. The study report is due on or before December 31, 2013. (JD)

House Bill 1203-Homeowner’s or Renter’s Insurance-Policy Exclusions for Specific Breedsor Mixed Breeds of Dogs-Notices-EffectiveJanuary 1, 2014. In a nutshell this bill adds a measureto the current law that mandates an insurer send a ‘summary of coverages’ to the insured. The summaryurges the insured to read their policy. It further states theinsurer is required to notify each consumer of exclusionsof coverage for certain breeds of dogs and those breedsmust be identified by the insurer.

The responsibility of notification is with the carrier to include in their summary. It also allows the carrier to bemore specific in the animal exclusions thereby clarifying aggressive breeds rather than stating "an animal who has

shown aggressive behavior". (RS)

House Bill 1330- Workers’ Compensation- Insurance Coverage-Employer Compliance- Effective October 1, 2013. Under current law,Workers Compensation Commission (WCC) must orderany employer that fails to otherwise secure workers’ compensation insurance for its covered employees tomaintain insurance with IWIF. An employer that fails tocomply with such an order within 10 days is liable to theState for a penalty equal to the premiums for six monthsof insurance coverage from IWIF. Although IWIF has historically been a quasi-governmental agency and theinsurer of last resort in Maryland, Chapter 570 of 2012 (SB745) converted the fund, effective October 1, 2013, into aprivate, nonprofit, competitive insurer named the Chesapeake Employers’ Insurance Company. Chesapeakeis, for purposes of workers’ compensation law, consideredan authorized insurer.

This bill modifies the above provisions such that, if an employer fails to secure compensation for its covered employees, and found to be noncompliant. WCC mayorder a noncompliant employer to obtain workers’ compensation insurance with any authorized insurer (including Chesapeake) and provide the commission withproof of coverage. The bill has minimal or no effect onmember agents and their businesses.

Senate Bill 339-Motor Vehicles-use of WirelessCommunication Device- Prohibited Acts, Enforcement and Penalties October 1, 2013.This bill now allows primary enforcement when using ahandheld telephone for the following drivers: 1) a minoroperating a motor vehicle; 2) an adult driver with a provisional license or learner’s permit; 3) operator of aschool vehicle that is carrying passengers and in motion;and 4) the fully licensed driver using their hands with ahandheld phone other than to initiate or terminate a wireless telephone call.

Minors convicted of the violation may have their licensesuspended for no more than 90 days. For adult drivers;fully licensed drivers and school bus operators, this bill willincrease the maximum fine for a first offense from $40 to$75. For a second offense the increase is from $100 tomaximum of $125. The bill adds a maximum penalty of$175 for a third or subsequent offense and that points areonly assessed if the offense contributes to an accident.

This bill will have the largest impact on the Maryland Consumer now making this a primary offense. (con’t on page 18)

The Need for Policy Review:It is the job of all Risk Managers to mitigate their clients’ liability by utilizing all tools at their disposal.

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

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

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

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

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

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

FOUR KEY POINTS COVERED IN A POLICY REVIEW:

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

2. Survey the marketplace for products that may provide long-term coverage, additional benefits andfeatures such as disability and/or long-term care coverage, and provide a better premium structure for your clients.

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

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

CASE STUDY:

Mr. Smith had purchased a policy when he was 37 yearsold. The policy had a large premium and the ability tobuild substantial cash value. Mr. Smith is now 60 years oldand entering retirement. He would like to limit his out ofpocket expenses while maintaining his life insurance coverage and protect against the costs of Long Term Care. Mr. Smith decided to look at new coverage and has qualified for Preferred. Non-Tobacco rates.Product: Universal LifeCoverage Amount: $1,000,000Long Term Care: $1,000,000 of Guaranteed LongTerm Care Benefit with a maximum monthly allowance of$20,000. Payable for qualified long term care services including: Home Health Care, Nursing Home Care, Assisted Living Care and Adult Day Care.Premium: $239,497 of cash value from the existingpolicy. Zero out-of-pocket expense and no future premiumrequired. Cash Value: Potential Cash Value In Year 10: $259,466Policy Duration: Death benefit guaranteed to Mr. Smith’sage 81 and projected to age 105.

SUMMARY:

• Maintain death benefit• Reduce expenses in retirement – $0 future outlay;

$8,200 annual savings. • Potential Cash accumulation• Guaranteed Tax Free Long Term Care benefit

(con’t on page 13)

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MAY | JUN 13:12

(con’t from page 12)

HOW DO I GET STARTED?

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

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

Belman Klein Associates and the IIAMDAs a member of the IIAMD we look forward to working with other members to help them round out their business bypartnering to bring our services to their clients. In 2013 we will continue our Life Insurance Made Easy series in theMaryland Messenger and continue to offer free life insurance continuing education credits to IIAM members.For more information contact Scott Zilber at szilber@belmanklein.com or 1-800-729-6007

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MAY | JUN 13:12 MAY | JUN 13:13

THE MIGHT OF MANYINSURANCE AGENCIESBECOMES THE POWER OF ONE.

WHY I JOINED PIN

“I have been associated with PIN for over 14 years.

There is no other program in our industry that can match the

services they provide to help independent agencies grow.”

– Will Fleming

Owner of Fleming Insurance Group, LLC

Towson, MD

(443) 692-4000www.pinsiaa.com • jpappas@pinsiaa.com

Potomac Insurance Network

2360 Boston Street, Baltimore, MD 21224

Tid bits 1.

2.

INSURBANC RESOURCES GROW THROUGH MERGER BANK WILL HAVE MORE LOAN CAPACITYFOR AGENCIES.

ALEXANDRIA, Va.— The Independent Insurance Agents &Brokers of America (IIABA or the Big “I”) announced thatInsurBanc, a federal savings bank based in Farmington,Conn. founded by the Big “I,” is now a division of Connecticut Community Bank N.A. (“CCB”).

InsurBanc's mission will remain the same as when itopened its doors in 2001: to provide the tailored financialproducts and services that independent insurance agenciesand brokers need nationwide to optimize growth opportunities, build value and remain independent.

“InsurBanc’s new structure will strengthen its ability toserve the independent agency system by providing an attractive source of additional capital to lend to agenciesacross the country, along with offering additional beneficialresources to agents and their businesses,” says Bob Rusbuldt, Big “I” president & CEO. “InsurBanc is better positioned now to serve the growing banking needs of ourmembers and their clients.”

InsurBanc will be led by David W. Tralka, who was InsurBanc’s president and CEO and now is CCB’s

president and CEO. In addition, the staff of InsurBanc hasbecome employees of CCB, and will continue providing independent agents the service and expertise they havecome to value.

“The business models of InsurBanc and CCB are verycomplimentary,” says Tralka. “InsurBanc provides bankingservices, including loans, to independent insurance agenciesand brokerages across the United States, while CCB is focused on retail and commercial customers in its localcommunity. The combined entity will have more productsand more resources than either institution had on itsown.”

As a division of CCB, an FDIC insured bank, InsurBanc isthe only bank in the United States designed for insuranceprofessionals. InsurBanc was founded by the IndependentInsurances Agents & Brokers of America and others committed to the independent agency system. To readmore about InsurBanc, visit www.insurbanc.com.

Founded in 1896, the Big “I” is the nation’s oldest and largest nationalassociation of independent insurance agents and brokers, representing anetwork of approximately a quarter of a million agents, brokers andtheir employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies.Independent agents and brokers offer all lines of insurance—property,casualty, life, health, employee benefit plans and retirement products.Web address: www.independentagent.com.

MAY | JUN 13:14

NIPR RELEASES 2012 ANNUAL REPORT

HOUSTON-The National Insurance ProducerRegistry (NIPR) released its 2012 Annual Report highlighting advancements made toward the realization of a single-point,online producer licensing tool.

In 2012, NIPR implemented 182 initiatives expanding initialproducer licenses and renewals for residents and non-residents, including major, limited and surplus lines. The organization also assisted state insurance departments tomeet Surplus Lines fee requirements of the Dodd-FrankWall Street Reform and Consumer Protection Act.

"The nearly two hundred initiatives accomplished this yearprovide significant value and continue to enhance NIPR's vision as a technological innovator in producer licensing,"said NIPR Board President and New Hampshire InsuranceCommissioner Roger A. Sevigny. "NIPR anticipated the

needs of the states and was able to facilitate solutions itcould easily implement."

In addition, the annual report highlights the release of theAdjuster Designated Home State (ADHS) License Renewaltool designed to complement the 2011 ADHS initial licensing application, and a new Interactive Appointmentsand Terminations (IA&T) tool making the process of submitting appointments and terminations with the stateseasier for smaller companies.

"These tools continue our goal of bringing the producer licensing process online, making it easier and faster," saidNIPR Executive Director Maryellen Waggoner. "Every accomplishment brings us closer to the more cost-effective,streamlined and uniform process we are working to create."Go to http://www.nipr.com/documents/2012_NIPR_An-nual_Report.pdf to view the NIPR 2012 Annual Report.

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MARYLAND AGENCY HONORED FOR COMMITMENTTO COMMUNITY

HMS Insurance Associates in Hunt Valley, Md., received theDan Fulwider Award for Community Involvement duringthe Big “I” Legislative Conference general session. TerryKatz of HMS accepted the award.

The award is given annually by Trusted Choice® to a member agent who goes above and beyond in volunteeringtime and enthusiasm to causes close to his or her heart.

HMS Insurance Associates embraces a team approach notonly in servicing its customers, but also in community involvement. Whether it is through monetary donations,sitting on a board of directors or direct involvement in fundraising, the collective efforts of the agency’s staff makea difference in the community.

The agency supports organizations such as Hopewell Cancer support, Maryland Special Olympics and KennedyKrieger’s Festival of Trees. Its focus includes charities related to cancer.

“As is the case with many companies, this agency has lostfriends and co-workers to cancer, which makes supportingthe American Cancer Society, Sidney Kimmel Foundation,Baltimore Ronald McDonald House and the Leukemia andLymphoma Society especially meaningful for this agency,”Big “I” Chairman Bobby Bramlett said during the presentation.

Hopewell Cancer Support will be the recipient of a $2,500donation that is given with the award.

“The Hopewell Cancer Walk is this Sunday, and we haveraised $10,000 this year,” Katz said when accepting theaward.

The award’s namesake, Dan Fulwider, was the governmentaffairs coordinator and membership liaison for the Inde-pendent Insurance Agents of Iowa, and a huge proponentof Trusted Choice. His dedication to his community andthe causes he believed in inspired all who knew him.

NAIC 2012 ANNUAL REPORT: SIX DEGREES OF NAIC

Online Report Highlights 2012 Regulatory AchievementsHOUSTON — The National Association of InsuranceCommissioners (NAIC) today released its 2012 Annual Report, "Six Degrees of NAIC: Reflecting. Connecting. Protecting." Inspired by the theory of six degrees of separation, the report highlights the association’s notableaccomplishments through the theme of connectivity.

“This annual report’s theme illustrates how state regulators evaluate various aspects of the insurance marketplace by connecting with consumers,” said BenNelson, NAIC Chief Executive Officer. “While the detailsof health care, financial reform and international regulatorycooperation are complex, they have a real-world impact onreal people. Discovering how public policy connects withthe public in general is a unique responsibility for ourmembers.”

Produced for approximately 20% of the cost of a traditional print version, the online report offers enhancedinformation for readers by employing interactive media tolink readers to active, relevant content on the NAIC website.

The NAIC Annual Report provides an overview of regulatory activities in the following areas: government relations, international insurance supervision, SolvencyModernization Initiative, financial regulation, market regulation, and consumer education. The report also features video messages from 2012 officers, highlights andstatistics, a gallery of photos, and a copy of the NAIC's audited financial statements.

The online report is available at http://www.naic.org/an-nual_report_2012/index.htm.

MAY | JUN 13:15MAY | JUN 13:14

NEW STUDY FINDS LOWER ACCEPTANCE OF INSURANCE FRAUD AND STRONG SUPPORT FORFRAUD-FIGHTING EFFORTS

MALVERN, PA— According to new findings from an onlineInsurance Research Council (IRC) public opinion study, 24percent of Americans believe it is acceptable to increase aninsurance claim by a small amount to make up for deductibles they are required to pay, lower than the 33percent found in a 2002 telephone survey. Additionally, 18percent believe it is acceptable to increase a claim to makeup for premiums paid in previous years when they had noclaims, the lowest percentage since the question was firstasked in a 1981 in-home survey. Younger respondents, especially young men, were much more likely to view claimpadding as acceptable. For example, among males age 18-34, 23 percent agree it is all right to increase claimamounts to make up for premiums, compared with just 5percent of their older male counterparts and just 8 percent of females aged 18-34.

The IRC study, Insurance Fraud: A Public View, 2013 Edition, also found that 86 percent of Americans agree withthe statement “insurance fraud leads to higher rates foreveryone.”

"The decline in the public acceptance of fraud is encouraging," said Elizabeth Sprinkel, senior vice presidentof the IRC. "However, the fact remains that nearly one infour Americans are tolerant of claim padding behavior thathas direct implications for claim costs and the cost of

insurance for consumers. Moreover, one in ten believethat insurance fraud doesn’t hurt anyone, indicating theneed for continued public education."

Respondents showed strong support for fraud-fighting efforts. Two-thirds (66 percent) approved of legislation tolimit attorney and medical provider access to police accident reports for the purposes of soliciting new clientsor patients, a marked increase from 2002. Eight in tenwere willing to participate in claim processes that couldhelp insurers detect and prevent fraud, such as examinations under oath (85 percent) or independentmedical exams (80 percent). Eighty-two percent agreedthat persons who commit insurance fraud should be prosecuted to the fullest extent of the law, although theconsequences favored for specific fraud activities weregenerally less severe than in 2002.

The 2012 results are from an online survey conducted inJune 2012 among 2,005 adults countrywide. Survey resultswere weighted by known demographic distributions to ensure that the final results were representative of thetotal U.S. adult population.

For more detailed information on the methodology andfindings from this study or previous IRC studies of insurance fraud attitudes, contact David Corum, at (484)831-9046, or by e-mail at irc@TheInstitutes.org. Copies ofthe study are available for $300 for an electronic version,or $400 for a printed copy. Visit IRC’s website at www.insurance-research.org for more information.

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NICB REPORTS A 27 PERCENT RISE IN QUESTIONABLE CLAIMS SINCE 20102012 REFERRALS REACH ALL-TIME HIGH

The National Insurance Crime Bureau (NICB) released its2012 questionable claims (QC) referral reason analysis.Over the period from 2010 to 2012, there was a 26.7 percent increase in QCs referred to NICB, going from91,797 in 2010 to 116,268 in 2012—a new record. In 2011,the total was 100,450.

Questionable claims are those claims that NICB memberinsurance companies refer to NICB for closer review andinvestigation based on one or more indicators of possiblefraud. A single claim may contain up to seven referral reasons.

The report examines six referral reason categories ofclaims: property, casualty, commercial, workers’ compensation, vehicle and miscellaneous referred in 2012,with those referred in 2010 and 2011.

Within the property category, “suspicious disappearance/loss of jewelry” had the highest percent change—up 86percent, while “suspicious theft/loss (not vehicle)” had thehighest increase in volume to 10,680 in 2012 from 7,152reached in 2011. In the vehicle category, “hail damage”with 1,505 referrals and “suspicious hit while parked” with5,006 referrals were the top two referral reasons.

In 2012, the top five states generating the most QCs were:California (21,935), Florida (10,693), Texas (10,368), NewYork (9,059) and Maryland (4,296).

Although there have been year-to-year increases in QCs,they represent a small percentage of the overall claimsprocessed. Each year over 56 million claims are processed,making 2012 QCs just 0.20 percent of total claims. Moreover, while QCs are by definition suspicious, at thetime of referral they have not been identified as definitiveacts of fraud.

The full report and individual state totals are available athttps://www.nicb.org/newsroom/news-releases/rise-in-questionable-claims.

TRUSTED CHOICE EXPANDS MARKETING REIMBURSEMENT PROGRAM FOR 2013THE PROGRAM REIMBURSES AGENTS UP TO $500.00 FOR EXPENSES TO CO-BRAND WITHTRUSTED CHOICE

Don’t miss out on receiving $500.00 back when you usethe Trusted Choice logo! Trusted Choice has released therevised guidelines for the Marketing Reimbursement Program, which has been extended for 2013.

The program reimburses expenses incurred in 2013 byTrusted Choice agencies for co-branding materials such asbusiness cards, letterhead, envelopes and marketing or advertising materials. It also provides reimbursement for

creating or updating a digital presence to include theTrusted Choice logo, link to Trusted Choice.com and thepledge of performance.

In order to qualify for a reimbursement, the activity mustinclude the Trusted Choice logo in external messaging withconsumer impact, documentation that an expense was incurred and paid and that the nature of the expense iscorrelated to the external messaging and consumer impact.

**NEW**

In addition to covering advertising, the 2013 guidelines remove a lifetime cap on MRP benefits that was implemented in 2012, so agencies that previously reachedthe maximum reimbursement will be eligible for fundsagain in 2013. The full program guidelines and applicationare available online at: www.trustedchoice.com/mrp

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7.

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(con’t from page 11)Producers should provide reminders, to their insureds, ofthe importance of acquiring a “hands-free” device. (HP)

Senate Bill 736-Insurance Fraudulent Insurance Acts- Compensation for Deductible-Effective October 1, 2013. This law makes it a fraudulent insurance act for a contractor offering home repair or remodeling services for damages to a private residence caused by weather, to directly or indirectly payor otherwise compensate an insured, or offer or promiseto pay or compensate an insured, with the intent to defraud an insurer, for any part of the insured’s deductibleunder the insured’s property or casualty insurance policy, ifpayment for the services will be made from the proceedsof the policy.

In other words, the contractor cannot pay or offer to paythe insured’s property deductible if their home is damagedby weather, if they are making the claim under their insurance policy. It further states that if the amount paid is$300 or more, then it is a felony and subject to a fine, imprisonment, or both. If it is less than $300, then it is amisdemeanor subject to a fine, imprisonment, or both. (AF)

Senate Bill 749-Maryland Automobile Insurance Fund-Operational Changes-EffectiveJuly 1, 2013. Chapter 73 (introduced as Senate Bill749), entitled Maryland Automobile Insurance Fund - Operational Changes, was signed into law by the Governoron April 9, 2013. This bill came out of a recommendationof the Task Force to Study Maryland Insurance of Last Resort Programs.

The legislation changes the number of Board of Trusteemembers from the previous 13 to nine. At least three arerequired to have insurance industry expertise and at leasttwo shall have financial management expertise. Of themembers with insurance industry expertise, at least one isto be appointed from a list of two or more individuals recommended by the Board of Directors. Finally, eachmember of the Board must be a State resident.

The legislation requires that the government appoint all ofthe Board members with the advice and consent of theMaryland Senate. No longer does the Board of Directorshave the ability to appoint five Board members, nor doesthe requirement exist that the Executive Director be onthe Board and that the requirement that the position of Chairman alternate for each successive term.

The legislation removed the handling of the legal affairs ofMAIF from the Office of the Attorney General. It gives theBoard authority to hire attorneys to represent the entity.

The legislation also removed MAIF employees from theState Personnel Management System. It provides that askilled service employee of the Fund hired before July 1,2013, in a nonprofessional or nontechnical position, shallremain in the skilled service of the State Personnel Management System or its equivalent as long as the employee remains in such a position with the Fund.

The legislation removes the requirement that MAIF besubject to review by legislative auditors. Instead, the AuditCommittee, which is composed of members of the Boardof Trustees and the Executive Director, shall require theFund’s internal auditor to conduct fiscal compliance and fiscal audits of the accounts and transactions of the Fundeach year.

The legislation also exempts MAIF from State procurementlaw relating to real property. It did not, however, impactMAIF’s official role as the insurer of last resort in the automobile insurance market. However, the work of theTask Force is ongoing and it will be necessary to monitorits activities.

Of note during this past legislative Session: the Independent Insurance Agents of Maryland offered anamendment to allow an independent insurance producerto be a part of the Board of Trustees of MAIF. The amendment was met with opposition and was not accepted by the Senate Finance Committee nor the HouseEconomic Matters Committee. (BL)

Senate Bill 930-Property and Casualty Insurance-Premium Payments-Acceptance on Installment Payment basis and Premium Finance Agreements-Effective July 1, 2013.This bill authorizes the Maryland Automobile InsuranceFund (MAIF) to accept premiums on an installment payment basis on 12 month personal lines policies if specified requirements are met. The bill also authorizesMAIF add-on coverage to include motor club services. Italso authorizes premium finance companies to enter into apremium finance agreement that includes the costs of amotor club service contract. The bill also alters 1) theamount of a cancellation charge in years after 2014 and 2)the circumstances in which a premium finance agreementmay require an insured to pay a cancellation charge and areinstatement charge. The bill requires premium financecompanies to make specified disclosures, including that theactuarial method will be used to calculate an earned finance charge when applicable. The bill also requires specified studies from MAIF and the Maryland Insurance Administration (MIA) with various reporting dates. (SA)(con’t on page 19)

MAY | JUN 13:19MAY | JUN 13:18

(con’t from page 18)All of the bills may be read or printed from the MarylandGeneral Assembly website at http://mgaleg.maryland.gov/webmga/ frm1st.aspx?tab=home. Just insert the bill number using SB or HB and the number and when thepage comes up go to document. Print the third reading(which should include amendments) or if available, the enrolled bill.

For questions regarding any of these bills or the session ingeneral, please feel free to contact a Legislative Committeemember:

LEGISLATIVE COMMITTEE:

Denise Carnes, CPCU-Co-ChairmanInsurance Services Group, Inc.901 Dulaney Valley Road, #616Towson, MD. 21204-2689Telephone: 410-296-5700Fax: 410-296-7546Email: dcarnes@isgusa.com

John J. Darlington, Jr.-Co-ChairmanTelephone: 410-252-5909Cell Phone: 410-804-9593Email: Jjdjr3@verizon.net

Angela FergusonBrothers Insurance Associates, Inc.Box 740Westminster, MD. 21158Telephone: 410-876-6414Fax: 410-857-5590Email: angelaferguson@verizon.net

William Knobloch, IIIKnobloch Insurance Agency, Inc.P.O. Box 10Manchester, MD. 21102Telephone: 410-239-4010Fax: 410-239-7506Email: bill@knoblochinsurance.com

Heather Parker, ACSRInsurance Management Associates, Inc.

P.O. Box 6609Annapolis, MD. 21401-0609Telephone: 410-266-8888Fax: 410-266-2774Email: hparker@insurancemgt.com

Rick Raley, AAICombs, Drury, Reeves Insurance Agency41625 Park AvenueLeonardtown, MD. 20650Telephone: 301-475-5674Fax: 301-475-5665Email: rick.raley@inscenters.com

G. Bradford Reeves, AAI, AFISCombs, Drury, Reeves Insurance Agency41625 Park AvenueLeonardtown, MD. 20650Telephone: 301-475-5674Fax: 301-475-5665Email: brad.reeves@inscenters.com

Ron Smith Smith Insurance Services, Inc.P.O. Box 599Huntingtown, MD. 20639Telephone: 410-535-0416Fax: 410-535-6567Email: Rrrsmithins@yahoo.com

Staff:Shelley Arnold, CPCU, AU, ARM, AAI, IIAM2408 Peppermill DriveGlen Burnie, MD. 21061Telephone: 410-766-0600 or 800-544-3368E-mail: shelley@iiamd.org

Legislative Advisor:Brett S. Lininger, Esq.Semmes, Bowen & SemmesSuite 140025 South Charles StreetBaltimore, Maryland 21201410-576-4815Fax: 410-576-4826blininger@semmes.com

If today’s volatile business climate has taught us anything, it is that organizations must deal with uncertainty in a thorough and systematic manner. But how? Organizationsof all sizes are struggling to understand how to effectivelydeal with the uncertainties of conducting business to notonly survive, but also to thrive. The answer is implementingan enterprise-wide risk management (ERM) approach tomanage risks that are caused by uncertainties. These riskscan be threats or opportunities.

What is ERM? It is a holistic approach to managing an organization’s uncertainty in order to maximize stake-holder value and optimize risk taking. Unlike traditionalrisk management, ERM deals with the strategic risks yourorganization faces, not just the operational ones. With aproperly designed and implemented ERM program, an organization can optimize its risk taking, which will allow it to react more quickly and efficiently to avoid or mitigatethreats and capitalize on opportunities.

Developing and implementing an effective ERM approachrequires a significant investment of resources, as well as education across the enterprise. But it is an investmentthat will yield two important organizational benefits:

• Enhanced decision making• Improved risk communication

Enhanced Decision MakingNo matter what kind of business you run, an ERM approach allows you to explore new opportunities forprofit and growth while effectively managing internal and external threats. Rather than consolidating risk management decisions at the top of the organization, anERM approach opens this up to decision makers at all

levels. The idea is that when risks, threats, and opportunities are understood across the enterprise, decision making is made more nimble to meet marketplacechallenges. In addition, the following advantages can be realized:

Increased Profitability. ERM increases your organization’sprofitability because strategic decisions involve more than preparing only for adverse outcomes. Properly implemented, ERM allows organizations to engage in additional business opportunities by allocating resourcesthrough rational decision making at the optimal level. With ERM, strategic decision making is integrated across departmental and unit silos, which makes it more soundand improves economic efficiency. Over time, organizations with a sound ERM approach will show higherearnings.

Reduced Earnings Volatility. In addition to maintaining cashflows and balancing its budget, your organization mustmanage its cash flow to ensure adequate capital to meetchallenges and to explore strategic growth opportunities.ERM provides a framework that allows organizations todeploy capital through organization-wide decision making,which ultimately results in stable earnings projections toachieve higher financial ratings, appeal to stakeholders, andfund future projects.

Improved Ability to Meet Strategic Goals. ERM provides fororganization-wide involvement in the strategic formulationand decision-making process. This process examines internal and external factors that contribute to threats togrowth and the achievement of established goals. Whenused effectively, ERM can reduce variation through (con’t on page 21)

Preparing Your Organization for Risk, Threats and Opportunities:

MAY | JUN 13:20

The Importance of Enterprise-Wide Risk Management (ERM) Education

By: Richard G. Berthelsen, JD, CPCU, ARMThe Institutes

(con’t from page 20)risk identification, assessment, and management, thus improving your organization’s ability to meet its strategicgoals.

Increased management accountability. While an ERM approach must be supported in the C-suite, those closestto a particular risk are in the best position to evaluate andmanage it. Therefore, ERM must be embedded throughoutyour organization’s corporate culture. When ERM is part of your organization’s DNA, the board and senior executives establish the overall mission, vision, and strategic goals, but each manager is responsible and accountable for decision making about risks within his or her individual unit, which increases accountability.

Improved Risk CommunicationERM allows your organization to develop systems that driveinformation, eliminating the barriers created by “informationsilos.” You know the problem with silos—they limit accessto critical knowledge about risks, corporate strategies, and organizational frameworks. ERM also encourages communication about risk management across all layers of the enterprise. This includes making managers aware of the need to identify obstacles and opportunities that could interfere with or aid in the achievement of your organization’s strategic goals.

Improved organization-wide communication results in fewersurprises for managers who could otherwise lack adequateinformation or full knowledge of the gravity of risk. Strongcommunication can also mean greater management consensus and improved stakeholder acceptance.

Management consensus. ERM improves management consensus by creating a culture that embraces risk as acomponent of each decision. By empowering all managersto consider risk optimization and the cost of risk, ERMprovides them with more complete information about thepotential effects of a decision, including the downsides andupsides. Managers who can successfully gauge threats andopportunities act more confidently because they can appropriately evaluate the alternatives associated with acourse of action. Upper management must lead the

initiative and motivate all employees to embrace ERM and encourage risk ownership across all levels of your organization.

Stakeholder acceptance. ERM improves acceptance by internal stakeholders by building a spirit of cooperationamong management, which can also increase confidenceamong employees. Boosting the spirit of cooperation begins with managers understanding that the way theymanage risk will have a positive impact on the organization,employees, and themselves. A strong ERM program alsoencourages the buy-in of an organization’s externalstakeholders by establishing management strategies thatprotect the organization’s reputation and assets. Expertsestimate that for many organizations, intangible, reputation-related assets may be worth several times more than tangible ones.

Establishing an effective ERM approach can be a complexendeavor. This is why ERM education is critical. Like thepractice of ERM itself, ERM education must be providedthroughout your entire organization, from the C-suite tothe loading dock. There are a variety of ways to acquirethe necessary knowledge and skills. An education programlike Enterprise-Wide Risk Management: Developing andImplementing from The Institutes will help provide the necessary understanding for building a solid ERM foundation within your organization. Whatever educationprovider you choose, it is critical that the program beERM-specific. It is also critical that ERM training be conducted at all levels of your organization, so managersand other decision-makers understand the role and benefits of ERM as they relate to their job functions.

Richard G. Berthelsen, JD, CPCU, ARM, is senior director of content development for The Institutes in Malvern, Pennsylvania. The Institutesare the leader in delivering proven knowledge solutions that drive powerful business results for the risk management and property-casualty insurance industry. He can be reached at berthelsen@TheInstitutes.org.

© 2013 American Institute For Chartered Property Casualty Underwriters www.TheInstitutes.org

MAY | JUN 13:20 MAY | JUN 13:21

IIA Maryland sends special Congrats to Carla Short, our program administrator, who married Tommy McGee on April6th. We wish Carla, Tommy and Gavin many years of goodhealth and happiness!!!

Congrats

MAY | JUN 13:22

5/06/13Personal Automobile - ACSR 2Joseph Conroy, ACSR9:00 AM - 4:00 PM

5/7/13Risk Management, Loss Exposures, and InsurancePolicies - AINS 21CShelley Arnold, CPCU, AU, ARM, AINS, AAI, ACSR9:00 AM - 4:30 PM

5/8/13Commercial General Liability - ACSR 7Don Dudey, CPCU9:00 AM - 4:00 PM

5/9/13E&O Risk Management: Meeting the Challenges ofChangeStanley Lipshultz, CPCU9:00 AM - 4:00 PM

5/13/13 - 5/19/13Property/Casualty Pre-Licensing Course - 5 daysJoseph Conroy, ACSR8:30 AM - 4:30 PM

5/14/13Flood SeminarVince Phillips9:00 AM - 11:00 AM

5/14/13Insurance Ethics

Vince Phillips1:00 PM - 4:00 PM

5/22/13Foundations of Insurance Production - Commercial Property (AAI81C)Don Dudey, CPCU8:30 AM - 4:30 PM

6/5/13Commercial Automobile - ACSR 8Don Dudey, CPCU9:00 AM - 4:00 PM

6/10/13Miscellaneous Personal Lines - ACSR 3Joseph Conroy, ACSR9:00 AM - 4:00 PM

6/11/13Personal Insurance - AINS 22AJoseph Conroy, ACSR9:00 AM - 4:30 PM

6/19/13Commercial Liability Insurance for ContractorsDon Dudey, CPCU8:30 AM - 5:00 PM

6/26/13Commercial Liability Insurance - AAI 82AVince Phillips8:30 AM - 4:30 PM

Education CornerMAY/JUNE

Kudos! IIAM congratulates staffer, Rebekah Langford, for passing her AIS examination. Rebekah is now an ACSR, AINS,AAI,AIS. We are very proud of your accomplishments.

Big Changes Coming to Big “I” Maryland Education Departmentby Rebekah Langford, ACSR, AINS, AAI, AIS

The Independent Insurance Agents of Maryland (IIAM) hasalways prided itself on providing the best education programs possible. We want to continue to do that notjust for our members but for all Maryland insuranceagents. We want to be your ‘go to’ association for all ofyour education needs.

Recently legislation was passed that will change the wayMaryland agents may obtain their continuing educationcredits. Yes, you still need 24 credits to renew your producer license but the way you can obtain those creditsis going to change. As of right now, anyone that holds aProperty/Casualty or Life/Health producer license mustobtain at least 50% of their CE credits in the classroom.Beginning October 1, the classroom requirement will beeliminated. You can still attend classroom courses to receive your CE credits but you will now have the abilityto obtain all 24 credits online or through self-study.

To keep up with the recent changes in legislation, IIAM is excited to announce that we have partnered withWebCE . IIAM and WebCE will bring you quality online insurance continuing education courses. IIAM memberswill also receive discounts by using WebCE. IIAM has alsojoined with over 20 other Big “I” state associations toform the Agents & Brokers Education Network (ABEN).ABEN offers professional insurance training and continuing education using live webcast technology. Thelive webcast will stream professional instructors right intoyour office, along with related course material and theability to ask questions and chat with other students. IIAM will continue to provide classroom continuing education courses. The only thing that’s going to changeabout our classroom courses are the price. We currentlyhave 59 courses approved for classroom instruction including four designation programs. In addition to ourCE classes we also offer property/casualty pre-licensing.The price of all 59 approved courses including pre-licensing will be reduced. The price change for our licensing course will be immediate. The new pricing formembers is $275. For all other CE courses, the pricechange will take effect July 1, 2013. IIAM members- don’tforget that all Flood, Ethics, and Long Term Care classroom courses held at the association office are FREE to you and all of your employees.

IIAM is very excited about all the changes to come withinthe next few months. If you have any questions regardingthe new legislation or any general education questionsplease feel free to contact Rebekah Langford, EducationDirector, at rebekah@iiamd.org or 410-766-0600.MAY | JUN 13:22

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Certain seasons herald an increase in particular types ofsevere weather events in the United States. As we haveseen with Hurricane Sandy, such catastrophes can have asignificant impact on property losses, as a result, also potentially impact insurance professionals’ liability exposure. Therefore, it’s always opportune to discussweather-related catastrophes and their potential impactand reflect upon the steps an insurance professional mighttake to insure that customers are adequately protectedand informed about the nature of the weather-related risksthey face. Even if the insurance professional and client arelocated in an area of the country where there is a low riskof a particular type of weather-related catastrophe, thecustomer might still face exposure to these risks. Althoughthe impact of weather-related catastrophes is wide-spread,this article will focus on two areas: seasonal properties andbusiness interruption coverage.

Seasonal properties: Many agents have customerswho own seasonal properties, such as a mountain cabin or a seaside bungalow, located in a different part of the country than the agent’s office. Consequently, it is crucialthat the agent be mindful of particular weather-relatedrisks associated with the area of the country in which theseasonal property is located. For example: Does the area where the property is located have a high risk of earthquakes? Does the area have high winter snowfall, orextremely cold temperatures, making the property susceptible to collapse from the weight of snow/ice orwater damage as a result of frozen pipes? Is the propertyvacant for long periods of time and does a vacancy clausein the policy preclude or limit coverage if a loss occurswhile the owner is away? Does the property sit on a floodplain, or is it otherwise susceptible to damage as a result offloods, severe storms or hurricanes?

As with any insurance transaction, the axiom, “know yourclient” is crucial. It is a good idea for the agent to discussweather-related risks with the client and find out whattypes of risks the customer needs insurance coverage for.Particular types of coverage, such as earthquake or flood,could be difficult or costly to obtain, depending on where

the property is located. Nevertheless, the agent can reducetheir E&O exposure by thoroughly discussing all potentialexposures and coverage options with the customer anddocument these discussions in a letter and a note to thefile. Additionally, the agent should consider obtaining asigned rejection form for all significant coverage offersthe customer declines. In short, communicate, inform and document.

Business interruption due to catastrophicweather events: We are all familiar with business interruption coverage and its traditional application in theevent of a property loss. However, one often overlookedarea is how a catastrophic weather event could impact asupply/distribution chain. Again, the weather related exposures could be quite different in the area of thecounty where the supplier or customer of the policyholderis located vs. the location of the policyholder. Also, the nature of this exposure depends, in part, on the nature ofthe customers business. For example, is the customer anend customer, supplier or middleman? If the customer is anend-user whose supply chain is cut, the customer’s business could be significantly impacted by a catastrophicweather-related event affecting one of the suppliers, whoselocation is in a higher risk area. If so, the agent should consider discussing coverage which could help minimizethe customer’s loss of business. Two such coverage options include: contingent business interruption coverage(generally covers lost profits resulting when a customer orsupplier sustains property damage that prevents the customer or supplier from accepting goods from or supplying goods to the insured, thereby interrupting theirbusiness) and contingent extra expense (covers certain additional costs the insured incurs to avoid or minimizethe interruption of business when a customer or suppliersustains property damage which prevents the customer orsupplier from accepting or supplying goods from the insured).

Again, the agent should follow best practices for documenting the discussion and offering of coverage.

In short, it is worth remembering that even if the agentdoes not think he is in a high-risk weather area, it is quitepossible that his customer may have a risk in one of thoseareas that needs coverage.

Brian Butcher is an assistant vice president, claims and liability management with Swiss Re Corporation Solutions, and handles claims against insurance professionals out of the Overland Park Kansas office. MAY | JUN 13:24

Catastrophic Weather Events Affect Coverage

By Brian Butcher

MAY | JUN 13:24

Erie Insurance releases police data on top 10 driving distractions involved in fatal car crashes

ERIE, Pa. -Of the more than 65,000 people killed in car crashesover the past two years, one in 10 were in crashes where at least one of the drivers was distracted. That's according to police report data analyzed by Erie Insurance in the FatalityAnalysis Reporting System (FARS), a nationwide census of fatalmotor vehicle traffic crashes maintained by the National Highway Traffic Safety Administration. Erie Insurance consulted with the Insurance Institute for Highway Safety in itsanalysis.

"Distracted driving is any activity that takes your eyes off the road, your hands off the wheel, or your mind off your primary task of driving safely," said Doug Smith, senior vice president of personal lines at Erie Insurance. "We looked at what law enforcement officers across the country reported when they filled out reports on fatal crashes and the results were disturbing. We hope the data will encourage people to avoid these high-risk behaviors that needlessly increase their risk of being involved in a fatal crash."

The analysis, which looked at data from 2010 and 2011, showed police listed the majority of drivers who were distracted as "generally distracted" or "lost in thought." Police also listed several more specific types of distractions.Below are the top 10 distractions involved in fatal car crashes:

Smith added that because FARS data on distraction is based largely on police officers' judgment at the time of thecrash, and because some people may be reluctant to admit they were distracted when being interviewed by police aftera fatal car crash, the numbers are difficult to verify and may, in fact, under-represent the seriousness and prevalence ofdriving distractions. (con’t on 27) MAY | JUN 13:26

(con’t from page 26)The data is meaningful, however, because unlike surveys in which consumers self-report the types of distracted behaviors they engage in, the FARS data is based on actual police reports on fatal crashes.

In addition to encouraging drivers to avoid the distractions above, Erie Insurance offers the following tips to avoid cellphone distraction: • Let incoming cell phone calls go to voice mail• If someone calls you while they're driving, ask them to call you back later and hang up• If you must talk or text, pull over• Lead by example; if you want your children to drive safely, show them how it's done

Visit www.erieinsurance.com/distracteddriving to see an infographic on distracted driving.

According to A.M. Best Company, Erie Insurance Group, based in Erie, Pennsylvania, is the 15th largest homeowners insurer and 12th largest automobile insurer in the United States based on direct premiums written and the 20th largest property/casualty insurer in the United States basedon total lines net premium written. The Group, rated A+ (Superior) by A.M. Best Company, has nearly 4.5 million policies in force and operates in 11states and the District of Columbia. Erie Insurance Group is a FORTUNE 500 company. Erie Insurance is proud to be named a J.D. Power and Associates' 2012 Customer Service Champion. ERIE is one of only 50 U.S. companies so named. Erie Insurance is also recognized on the list ofWard's 50 Group of top performing insurance companies, which analyzes the financial performance of 3,000 property and casualty companies andrecognizes the top performers for achieving outstanding results in safety, consistency and financial performance over a five-year period (2007-2011).

MAY | JUN 13:26 MAY | JUN 13:27

ACSR Tribute Day: April 24, 2013

Rebekah Langford, ACSR, AINS, AAI, AIS (IIAM Education Director), Emily Bucci, ACSR, AAI, CRIS (2012ACSR of the Year) and Terry Katz, CPCU (IIAM'sincoming Chairperson of the Board).

4th Annual

Symposium

FREE TO AGENTS AND

EMPLOYERS

SCAN ME!