Wow !! what a year although I am not one to wish away the days I am looking forward to the New Year and hoping that things turn around not just in the insurance industry but really more impor-tantly the economy. It has been a rollercoaster this year with gas reaching new highs and then 4 months later plummet-ing to 6 year lows! Although ef-fecting everyone the financial melt down has unfortunately put an increased strain on as many peo-ple with most of us feeling its im-pact in one form or another. So we look to the new year to be better and help kick start the econ-

omy and build it back up. In these tough times we are very apprecia-tive of our clients and our employ-ees. With the uncertainties that are out there we are still able to offer a solid and reliable resource.

Despite the economic turmoil we have grown this year by both inter-nal growth and acquisition, we wel-come our new teammates as part of the Allstar group and we feel

Outdoor Underwriters, Inc. will be

based in our Columbia, SC office.

This is a line new to Allstar and we are

really excited about this venture into

the woods! In addition to hunt clubs,

they write Timberland Liability, Stand-

ing Timber, Consulting Foresters, Pre-

scribed Burn, Guides & Outfitters and

many others. Ed Wilson, Vice Presi-

dent comes to us with 18 years of experience in this arena;

his CSR Jody Byrd has 23 years experience along with

CSR Julia Schofield with 13 years. This is a very experi-

enced and dedicated group with a large book of business to

offer Allstar. They’ve got their work boots on and they are

ready to go!

A Note from David Brett, Exec. VP/A Note from David Brett, Exec. VP/

Chief Operating OfficerChief Operating Officer

Allstar Welcomes Allstar Welcomes

Outdoor Underwriters, Inc.Outdoor Underwriters, Inc. Vendor SpotlightVendor Spotlight

Getting to know your

“real” client

I recently discovered another hidden benefit of escrow….”INFORMATION”. If you have an agent that presents a new file/bond submission,

there are certain forms, financial statements, etc. that are needed in order to begin the un-

derwriting process. In some cases, the agent may not want the underwriter to directly talk to the client in order to protect “their” account.

When this is the case, the only things that you can rely on are the validity of the documents provided and the verbal input from the

CONGRATULATIONS TO:CONGRATULATIONS TO:

David Brett

who has been promoted to

Executive Vice President/Chief Operating Officer

that we are doing our part to make a difference. In closing thank you all for your support and we will continue in the New Year to grow and maintain quality service. ‘Discover the Difference’ is not just a tag line for us but it is what sets us apart from the rest of the industry. Happy New Year!

P A G E 2

CONTRACT BONDSCONTRACT BONDS State Bond Limit

Sitework GA $2,697,788

Replace Rest Area Buildings TN $2,286,710

Fiber Optic Work GA $2,286,000

Industrial RR Track Construction

OH $1,929,290

VA Medical Center Work WI $1,912,865

Commercial Building Con-struction

GA $1,605,480

Asphalt Surface Treatment GA $1,543,039

Modular Office Construction GA $1,448,856

Hospital Patient & Em. Rms. TN $1,307,812

2009 Distribution Contract CO $1,230,885

Renovation Project NC $982,137

Sewer Repair Work AL $979,825

Glass Work FL $819,495

Office & Living Qtrs. Const. AL $749,729

Guardrail and Fencing Work NC $711,794

In the 4th quarter ALL-STAR was well repre-sented at the following Conventions/Tradeshows:

October Small & Rural Conven-tion—Alabama

If you were unable to attend any of the conven-tions, and would like to speak to one of our staff, please call them for assistance.

800-424-0132 www.allstarfg.com

Vendor Spotlight Vendor Spotlight cont.cont.

agent…..the same agent who is trying to sell the account to the surety so they can get paid. So how good is the infor-mation that is being relayed?

Just last month I had received a call about a new account that, if written, would require escrow. They were a new ac-count to Allstar, had not needed or obtained a bond in over 10 years. There was concern about recent late payments to vendors. In a 15 minute phone call, I had learned that this company had been in business for over 30 years, started by

the father-in-law, passed on to the 3 sons who were now engineers. Like most accounts, they did not believe that es-crow was needed since “they pay their bills”. But…..this client went on to say two very important things that were not divulged either by the agent or in their paperwork…….1.) they had recently changed their internal process and only “pay

when paid” and most important 2.) as a company practice they DO NOT obtain written subcontracts or purchase orders from their vendors. After all “this is the way we have been doing business for years. Everyone knows us and likes do-ing business with us.” I shared this information with the underwriter, and needless to say, the account was not written.

“Hand-shakes” are great between friends, but it is no way to do business in today’s marketplace.

Submitted by Susie Syrus, National Escrow ssyrus@natlescrow.com

Insurance Ad CampaignInsurance Ad Campaign——

Call or e-mail us today! 800-424-0132 www.afg.com

Nothing’s too Unusual— A different kind of Business needs a Different kind of Insurance

P A G E 3

COMMERCIAL SURETYCOMMERCIAL SURETY State Bond Limit

Subdivision Maintenance GA $163,621

Financially Responsible Officer FL $100,000

Utility Deposit TN $87,000

Subdivision Maintenance AL $74,457

Subdivision Performance Bond AL $62,254

Private Detective License GA $25,000

Contractor License SC $10,000

COURT/PROBATECOURT/PROBATE State Bond Limit

Supersedes/Appeal Bond GA $2,142,660

Administrator Bond FL $168,000

Administrator AL $110,000

Conservator GA $45,000

FIDELITY/FIDUCIARYFIDELITY/FIDUCIARY State Bond Limit

ERISA Bond GA $265,000

Business Services GA $50,000

Business Services Bond GA $25,000

A Note from Don Gibbs, A Note from Don Gibbs,

Sr. VP/CUOSr. VP/CUO As we move into 2009, Allstar is optimistic about

some leading indicators and projections as to opportu-

nities that will be present. Allstar will position itself to

assist good character contractors adversely affected by

the current financial downturn; or contractors new to

the construction arena needing surety due to the disas-

ter in the residential market.

The anticipated stimulus package is touted to be aimed

at increased spending for infrastructure from the Fed-

eral to state, county and municipal entities most of

which will require bonding. More subcontractors will

be required to bond than in the past as risk managers

realize the need to pass the risk of subcontractor fail-

ure to others, due to the concerns about the current

economic climate.

Allstar intends to maintain consistency in our under-

writing going forward providing a market for contract

surety for good people that may have been adversely

affected by the 2008 economic downturn or are new

entities in the market place.

Hawkins & Rawlinson, Inc. founded in 1999 are Logging specialists located in Auburn Alabama. Be-

ing in the Forest Products/Logging Industry, this group is right at home in the woods! Brad Rawlison

has 17 years experience along with Chuck Hawkins with 14 years working in the logging industry; they

write Worker’s Comp., GL, Property, Commercial Auto and Inland Marine just to name a few. Brad and

Chuck have 15 employees working with them serving the loggers. We are so excited to welcome the

HRL group to our Team and a new arena in the Forest Products/Logging Industry to Allstar!

Allstar Welcomes Hawkins & RawlinsonAllstar Welcomes Hawkins & Rawlinson

INSURANCE Coverage Type

State Premium

Logging Contractor

Equipment AL $91,855

Engineering Firm Architects &Engineers

GA $48,000

Plastic Mfg. Property Ga $36,434

Commercial Roofing GL AL $30,000

Adhesive Mfg.

GL/Products GA $12,411

Senior Apts.

Excess D&O AL $9,888

Boxing Assoc.

D&O/EPL CO $8,772

Mortgage Broker

Misc. E&O GA $6,399

Motel/Hotel

Package SC $5,981

Motel

Package GA $5,296

Assisted Living D&O/EPL LA $2,724

SPECIALTY BROKERAGE

Coverage Type

State Premium

Residential Contrac-tor

GL FL $90,000

Water Blasting GL/XS/Pollution

FL $62,500

Roofing Contractor GL FL $52,000

Commercial Con-tractor

GL GA $35,000

Sporting Goods Equipment Mfg.

GL CA $25,550

FIDUCIARY LIABILITY 101

WHY IS IT SO MISUNDERSTOOD?

Fiduciary Liability is one of the most misunder-stood of all the management exposures we write within the Professional Liability department at Allstar. Most often it is confused with Crime or Fidelity coverage’s, or with Bonds or Employee Benefit Liability.

Many fiduciaries believe incorrectly that their ERISA Fidelity Bond protects their personal as-sets, but the Fidelity Bond only protects the Plan’s assets. Many fiduciaries think that cover-age is included in their D&O policy, but these policies specifically exclude fiduciary liability exposures, as well as those exposures pertain-ing to the Employee Retirement Income Security Act (ERISA). Some also believe incorrectly that selecting an outside investment manager elimi-nates their exposure, but it only reduces it, since the fiduciaries can still be brought into a suit and be made to pay large amounts in defense costs.

What most fiduciaries and administrators of these plans don’t realize is that the laws (ERISA) that pertain to Welfare, Benefit and Retirement plans hold insured’s personally liable for any failure on their part to comply with the law. This makes it very important to keep an insured’s personal assets protected with the proper coverage.

In these poor economic times, and with all the corporate scandals, mergers & acquisitions, bankruptcies and bailouts, Fiduciary Liability (also sometimes known as Pension Trust Liabil-ity) is a product that fiduciaries and administra-tors need now more than ever.

THE HISTORY OF ERISA

The first employer-sponsored retirement plans were established in the late 19th cen-tury. These early plans were regarded as gifts from their employers in appreciation for long and faithful service. Since many of these plans were inadequately funded, most were ultimately terminated. In the 1920s, shortly after the adoption of the fed-eral income tax, (believe it or not there was-n’t always a federal income tax!). Con-

gress allowed certain retirement plans special tax-favored treatment. In 1935, Congress passed the Social Security Act, which established a basic level of retirement income protection. In the 1940’s the fact that pension plans were exempt from wartime wage controls made these plans more attractive to both employers and employees, and then the thriving economic times of the 1950s and 1960s brought about the growth of the defined benefit pension plan -- a plan which “promised” a fixed monthly payment for life. As pension funds grew however, financial abuses followed. These abuses ranged from mismanagement, or actual abuse or inadequate funding of the plans, to illegal use of the plans funds.

The biggest of these abuses was in 1963, with the closing of the Studebaker automobile plant in South Bend, Indiana. This event is generally regarded as a pivotal event in the need toward broad federal regulation of pension plans. Stude-baker, who at the time had recently celebrated its 100th year in business, had been using their pension funds to support the company during a long period where the plant was losing money. After the plant closed, it became apparent that their pension fund was so poorly funded and maintained, that Studebaker couldn't actually give its employees their pensions. As a result, it left thousands of workers without the pensions they had been promised, and with their dreams of retire-ment ruined. As a way to protect employees from further abuses, ERISA was enacted.

WHAT IS ERISA?

The Employee Retirement Income Security Act of 1974 (more commonly referred to as ERISA), is a complex set of laws set up to regulate the conduct and liabilities of employee benefit plans, their fiduciaries, and other persons. It is a federal statute that establishes minimum standards for pension plans in private industry, and it was enacted to protect the inter-ests of employee benefit plan participants and their beneficiaries. It does this by:

1) Requiring the disclosure to the participants of the plans of financial and other information concerning the plans 2) Establishing standards of conduct for plan fiduciaries 3) Safeguarding pension benefits for workers whose pension plans are terminated 4) Determining that adequate funds are being set aside to pay promised pension benefits

ERISA is sometimes used to refer to the full body of laws regulating employee benefit plans, which are found mainly in the Internal Revenue Code and ERISA itself. Responsibility for the interpretation and enforcement of ERISA is divided among the Department of Labor, the Department of the Treasury (particularly the Internal Revenue Service), and the

Pension Benefit Guaranty Corporation.

Most importantly the laws within ERISA hold individuals personally responsible for their actions (or lack of actions) as

trustees and fiduciaries for failure to comply with ERISA.

WHAT IS FIDUCIARY LIABILITY COVERAGE?

Trustees and fiduciaries, directors and officers, administrators and employees of the trust and benefit plans, are ex-pected to act in the best interests of the plan participants. Fiduciary Liability is a Third Party Liability coverage providing protections for these persons (past, present and future) against claims that allege they breached their duties as defined by ERISA. Coverage can also be extended to include the “Plans”, ESOP’s and the Sponsor of the Benefit Plans. Fiduci-ary Liability pays, on behalf of the insured’s, for claims brought against them for a wrongful act in the performance of their duties. A wrongful act, by definition in the policy, includes any violations of ERISA, as well as any acts, errors, or omissions in the performance of their duties as a plan administrator.

WHAT IS A FIDUCIARY UNDER ERISA?

A fiduciary is a person who exercises authority or control over the management or disposition of plan assets. It may be someone who gives investment advice to a plan for a fee, or anyone who has the power to appoint a plan fiduciary. The definition could also be extended to plan administrators, bank trustees, and directors and officers and consultants of a plan, with discretionary authority over the plan. A person can also be a co-fiduciary with each person responsible for only those duties that they have been assigned. A fiduciary’s responsibility is to manage the assets of a plan so that the assets are only used to provide benefits for the employees and their beneficiaries. They are mandated under ERISA to be loyal and prudent, and they must diversify the investments of the plan and adhere to plan documents.

Stay tuned for more…………….. Submitted by Dale Borer, VP, Prof. Liability

ALLSTAR Welcomes a New Team ALLSTAR Welcomes a New Team

MemberMember——

We welcome Anna Jacobs to our Team! Anna will be working in our Accounting Dept. as an

Accounting Assistant.

National Claim Services, Inc.National Claim Services, Inc.

National Claims Service Inc. is a new entity within our group consisting of existing team members. Our goal with setting up this new Company is to have our own third party administrator that can handle claims and be paid for the work by several of

the new and existing programs in which the Allstar family is involved. With this new licensed en-tity we can and will be offering this service on a fee basis to outside companies that we hope will want to take advantage of our specialized and efficient team. We wish them all the best and look forward to their success.

Tip Carroll has been named President of NCSI in Atlanta. Working with Tip in At-

lanta will be Bill Hattings, VP Surety Claims and Sheri Dahlstrom. Working in the Columbia, SC office, will be Lori Rose, VP Casualty Claims.

THANK YOU THANK YOU FOR YOUR BUSINESS!FOR YOUR BUSINESS!

The ALLSTAR Production Incentive has been

extended to March 31, 2009. You are eligible to receive a

$20.00 gift card for every new Insurance policy you

write with ALLSTAR. (Minimum Policy premium of $2,500.00 required)

CONGRATULATIONS TO:CONGRATULATIONS TO:

Dale Borer—voted in as President of the Georgia Surplus Lines Association. Linda Kosakowski—voted in as Vice President of the Georgia Surplus Lines Asso-ciation

4th Quarter Winners4th Quarter Winners

Scott Searcy William Burkett, III

Patti Searcy Gwen Zander

Jeanne Tibbs Debbie Peak

Pam Flowers Jennifer Waller

Claudia McCoy

Allstar wishes you all Allstar wishes you all a very prosperous a very prosperous

and Happy New year!and Happy New year!