the Agent’s Voice October 2010 Vol. XXXVII, No. 8 How to Avoid Being Left Behind in 2011 pg 12-13 Introduction to the Agent’s Guide to social Media pg14-15 Recent Changes to HIPPA Rules Could Be Costly To You pg 19 iv iD e n D D A t C e l l o C You g t h e r ig h t in s o o h C r o F in s u r e r . p m o C ’ s r e k Wor When your customers make the move to LWCC, they get a company that has paid $15 million in dividends to its policyholders for 2009, and $136 million over the past seven years. Meanwhile, LWCC lowered overall rates by 12.9% in 2009, with an overall rate reduction of 53% since it began operations in 1992. So, why should your customers roll the dice? Have them make their next move to LWCC. www.lwcc.com Inside This Issue The Agent’s Voice Published by the Professional Insurance Agents of Louisiana, Inc. DEPARTMENTS President’s Message………………………………...........4 Commissioner’s Column.........................................6 No material may be reproduced in whole or in part without written consent of PIA of Louisiana, Inc. Statements of fact and opinion in The Agent’s Voice are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the Professional Insurance Agents. Participation in PIA events, activities and/or publications is available on a non-discriminatory basis and does not reflect PIA endorsement of the products and/ or services. The Agent’s Voice is published ten times a year by the Professional Insurance Agents of Louisiana, Inc. Free subscription is included in PIA membership. Non-member subscription is $2.50 per copy, $25 per year. Contact the Editor for more details. All communications for publications, including news, features, advertising copy, cuts, etc. must reach publisher by 1st of month prior to month of publication. Advertising rates furnished upon request. Address inquiries to: EDITOR, THE AGENT’S VOICE 8064 Summa Avenue, Suite C Baton Rouge, LA 70809 Phone: (225) 766-7770 Watts: (800) 349-3434 Fax: (225) 766-1601 Email: info@piaoflouisiana.com Website: www.piaoflouisiana.com Passing It On..........…………….………….........…..........8 Legislative Update.…………….………….........…..........9 Errors & Omissions…………….………….........….........10 FEATURES How to Avoid Being Left Behind in 2011................12-13 Introduction to the Agent’s Guide to Social Media........................................................14-15 Customer Service: The Time for Thinkers Has Come for the Insurance Industry............................17-18 Recent Changes to HIPPA Rules Could Be Costly To You...........................................19 Workplace Violence Can Put Your Company at Risk.............................................20 IN EVERY ISSUE 2010 CISR Schedule....................……………............11 Index of Advertisers………….………….…....................26 Member Benefit in Focus.……...………….……...........26 Mission Statement Promoting the professional insurance agency system, leading through support, representation and fellowship. OFFICERS President’s Message Duane Dimattia, Baton Rouge President Gene Galligan, Monroe President-Elect Manuel DePascual, Metairie Secretary/Treasurer Brian Prejean, Brusly Immediate Past President Richie Clements, Chalmette PIA National Director DIRECTORS Karen Bryant, Denham Springs David “Moose” Bulloch, Hammond Lisa Donlon, Lafayette Dawn Duhé, Hammond John Erny, Lafayette Darryl Frank, Metairie Chad Joffrion, Bunkie Patrick LeBoeuf, Westwego Joe Lohman, Baton Rouge Jim Moore, Destrehan Kevin Woods, Monroe PIA OF LOUISIANA STAFF Jody M. Boudreaux Executive Vice President & Editor Caroline Gregory Adams Director of Marketing Natalie S. Cooper Director of Industry Affairs Peggy Grace Director of Education Brittany Davis Administrative Assistant Page 4 • October 2010 T he PIA National Fall Governance Condustry. As agency owners and principals, ference was held in Traverse City, one can easily get complacent waiting on Michigan the first weekend of October clients to phone our office or walk in our 2010 and the PIA of Louisiana Execudoor as this approach may have worked in tive Committee attended this year. First, the past. But, this approach is likely to fail before I provide details about the conferwith the younger segment of our populaence, I wanted to state what an honor it tion. The growth and survival of our agenis to attend a PIA National event and recies depend on our ability to adapt and ceive such recognition and respect from change in today’s electronic world. Agenthe other states. Louisicy Web sites and the use of President, ana is recognized as one social media are HERE and PIA of Louisiana of the premier states in for those who are reluctant the PIA system and the to embrace (including myDimattia Insurance Agency Louisiana contingency self), we need to wake up. definitely has a presence. dimattiaagency@bellsouth.net The high recognition can More and more agencies only be contributed to our are utilizing non-traditional predecessors: Our past executive commitforms of advertising and experiencing tee members along with Jody Boudreaux, positive impacts to their business. In our executive vice-president, set the path fact, PIA awarded for the first time, The for our current respect. Need I remind, PIA National Excellence in Social Media, Robert Page from Houma was a recent an award honoring an agency that uses national president and Richie Clements social media outlets, like Facebook, to from Chalmette is our current national dipromote and introduce products and serrector who is highly respected and more vices. The recipient of this award spoke importantly, liked. Richie’s knowledge of of how much his agency has grown due our industry, including his ability to grasp to the implementation of next generation the details of a topic and still see the big advertising during a time when his compicture, is recognized by his peers. petitor’s agencies remained flat. Attending a national conference with national focus and meeting fellow insurance agents throughout the country with the same desire to be better leaders for our affiliate state stirred excitement in my middle-aged body. The PIA staff, together with the committees and state leadership, focus so much of their attention on member services and how we, as your state leaders, can bring back that knowledge to the members of our home state. The PIA can help with these efforts. Check out what PIA has to offer and utilize the services to become more accessible to the younger generation and those who want their insurance at their fingertips. Reaching Gen Y, with the assistance of PIA, is just one of the member services that are getting the attention of many in our in- Continued on page 19 The next big member benefit: PIAPRO, a PIA Captive E & O Program for PIA Members should be operational in the first part of 2011. The creation of PIAPRO will assist our association to take control October 2010 • Page 5 Commissioner’s Column By James J. Donelon H.R. 4173 Dodd-Frank Wall Street Reform and Consumer Protection Act T financial stability, to prohe Dodd-Frank Wall Street Reform mote market discipline by and Consumer Protection Act, Pubeliminating expectations lic Law 111-203, enacted in July of this of a federal intervention year made many changes to the regulato shield others from tion of financial services including insurlosses when an institution is in finanance. Federal recognition of insurance cial trouble, and to respond to systemic in this legislation is in large part a realthreats to financial stability. Both the diization of the size of the financial assets rector of the new Federal Insurance Ofunder the control of insurers, the imporfice (FIO) and a state intance of insurance in personal and business Commissioner of Insurance surance commissioner will be non-voting memfinancial planning and bers of the FSOC. There risk management, and, Louisiana Department of will be “an independent like banking services, Insurance member appointed by the presence of insurpublic@ldi.state.la.us the President, by and ance throughout the with the advice and coneconomy. Although prisent of the Senate, havmarily directed to Wall ing insurance expertise” who will have a Street and the banking industry in revote on the FSOC. State insurance comsponse to the financial meltdown resultmissioners have written the President ing from the subprime mortgage crisis asking that he appoint someone with and related credit default swaps in the regulatory experience to the voting seat Fall of 2008, only a few revisions were and have named John Huff, the Missouri made to the insurance industry. The Act Insurance Director, as the non-voting preserves the authority of state regulamember. tors over the insurance industry since state regulators have a proven track Title V of the Dodd-Frank Act is devoted record of maintaining insurer solvency to insurance. The Federal Insurance Ofand protecting consumers. However, fice Act of 2010, the first subtitle, crethe Act includes representation of inates the Federal Insurance Office, which surance, a traditionally state-regulated among other mandates has the authority business, on the newly created Financial “to monitor all aspects of the insurance Stability Oversight Council (FSOC). The industry, including identifying issues or Dodd-Frank Act also makes important gaps in the regulation of insurers that changes to the regulation of insurance could contribute to a systemic crisis in by creating a new federal agency for inthe insurance industry or the United surance matters, by mandating changes States financial system.” The scope of in the fields of nonadmitted insurance the FIO excludes health, long-term care and reinsurance, and by affirming state insurance without a life or annuity cominsurance jurisdiction over fixed-indexed ponent, and crop insurance. variable annuities. The Financial Stability Oversight Council has a broad mandate to identify risks to The FIO is largely an information gathering entity and it has the power to require the production of information from insurers that insure or reinsure risks in more than one state except for small insurers as defined by the FIO itself. By law, the information gathering will require coordination with other relevant federal agencies and with state insurance regulators. There are other provisions relating to confidentiality and information sharing agreements. The substantive authority of the FIO is mostly limited to international matters. The FIO can preempt state insurance regulation to the extent that the regulation is inconsistent with certain international agreements and that the regulation results in less favorable treatment of the non-US insurer than a domestic insurer would receive. The second subtitle of Title V is the Nonadmitted and Reinsurance Reform Act of 2010 (NRRA). The president’s signing Dodd-Frank enacted financial reform on July 21, 2010, and began “the 12-month period” after which the NRRA shall take effect. One should not confuse the effective date of the NRRA with the very real effects that it is having on the business and regulation of insurance today. Efforts are underway to implement an interstate system of requiring, collecting, and allocating premium taxes for surplus lines and independently procured insurance. The NRRA gives only the home state of the insured as defined in the NRRA the authority to regulate the placement of Continued on page 22 Contact the Louisiana Department of Insurance at www.ldi.state.la.us or call 1-800-259-5300 Page 6 • October 2010 Vacant Property Don’t Let Your Clients Skate By with an Inferior Vacant Property Policy. Want Vacant Property coverage your clients will flip over? Partner with Burns & Wilcox and you partner with a national network of brokers and underwriters with unparalleled access to the leading markets for Vacant Properties. Plus, full brokerage capabilities and large limits in protection against vandalism, fire and other unforeseen claims. So, for the best Vacant Property coverage across the board, turn to Burns & Wilcox, North America’s largest specialty insurance MGA/wholesaler. New Orleans, Louisiana 504.838.9941 toll free 800.442.8621 fax 504.834.3615 Baton Rouge, Louisiana 225.295.7588 toll free 866.710.5484 fax 225.295.3150 Monroe, Louisiana 318.807.6028 fax 225.295.3150 neworleans.burnsandwilcox.com 25898_Burns_NewVacn_AgentsVoice_BW.indd 1 5/21/10 5:42:21 PM October 2010 • Page 7 Passing It On! By Jody M. Boudreaux T Other articles, such his issue of the Agent’s Voice, we as How to Avoid provide you with several articles Being Left Behind in that are geared toward helping you with 2011 and Customer agency management issues. First, our Service: The Time for feature article, Introduction to the Agent’s Thinkers Has Come Guide to Social Media, provides you with a for the Insurance teaser. We’ve written about it before and Industry, provide you you should have received a copy of it: PIA some helpful tips you can apply to your National’s 2010 Agency Marketing Guide. agency. If you read something that you If so, I sure hope you’ve had a chance to find interesting, be sure to pass it on to read it, because it provides a wealth of your employees. knowledge. If not, check out this article to whet Executive Vice President, Our hope is that we your appetite…you’ll can provide you with want to read more! If you PIA of Louisiana beneficial tools that aid you can’t find your copy that with agency management PIA National mailed you, jody@piaoflouisiana.com issues. If you have just call me and I’ll be specific issues that you’re happy to provide you with struggling with, please be sure to pass another copy. those on to us, so we can work on getting solutions for you. Often, someone else has Just this week one of our company experienced a similar struggle and found members emailed me to ask, “Do you an answer that could be shared with have any perspective of how agents are you. No sense in reinventing the wheel! using social media? I was so excited to send him a copy of this PIA National We’re often told that what we do best is publication, because it really does have provide networking opportunities. Our some great information in it. Just some members are wonderful about sharing of the articles include: Social Networking information with their colleagues. We (Twitter, YouTube, Facebook, MySpace and do this well at local chapter meetings, LinkedIn) Demystified, Blend Social and convention and other face-to-face Traditional Media to Grow Your Agency, meetings. But, we can also do this through PIA Members Embracing the Internet and Social Media – Making it Your Own, A New Era for Marketing, and on and on… As PIA National Immediate Past President Jon Spalding wrote, “In 2010, few marketing topics elicit as much excitement, confusion and anxiety as social media. And that’s from the same person!” Even if you’ve just figured out how to use the fax machine, you should be a little curious about what all the fuss is about, right? Well, this is the publication for you!” Also, in this issue, we give you some meaty information about changes in HIPAA rules. While many of our P&C agents feel this is just an issue for those in health care, you may be surprised these changes can affect you as well. Not only is there information about it, but the author provides a solution for how you can address the new challenges in privacy issues. Check it out! Page 8 • October 2010 other channels…like through our Web site, publications, etc. We just need you to make the call or send us an email with your concerns. We can be your research specialist…and then we can pass on the information we’ve gained to other members as well. Again, I’d like to remind you that we keep archived issues of this publication on our Web site now at www.piaoflouisiana.com. We realize that it’s difficult to keep up with all the different magazines and general mail that you get. But now each and every issue of the Agent’s Voice is just a few clicks away! Lastly, I want to let you know that we’ll be sending out a member survey shortly. We hope that you’ll take the time to complete it. We need to hear from you in order to best know how to serve you. We are working on the questions now and you have our commitment that we’ll keep it short, sweet and to the point. It will be an on-line survey, so it should be very easy and take hardly no time at all to complete. We’ll use your input to help develop our agenda for this year’s Board Retreat. We want to know what issues are important to you, so let us hear from you! Mark your calandar for PIA of Louisiana’s 68th Annual Convention July 16-19, 2011 Bay Point Marriott Golf Resort & Spa, Panama City Beach, FL Check out this year’s convention photos at www.piaoflouisiana.com Legislative Update By J. Robert Wooley Passage of Bill Highlights Power of Consumers; Grants Policy Holders More Choice E very year hundreds of bills are policy. After hearing introduced in the legislature the frustrations of resulting in scores of new laws and the everyday citizens, repeal or revision of countless existing Campbell worked with laws. It often comes as a surprise to Senator McPherson to revise the law. many people that a good percentage Campbell argued before the Senate of the laws passed each year do Insurance Committee that during hard not originate in the economic times, citizens offices of individual and businesses should PIA Lobbyist legislators, but rather not be penalized for trying represent the ideas to lower their cost of Adams & Reese, LLP and opinions of a wide insurance. McPherson robert.wooley@arlaw.com variety of citizens. framed the debate on his Whether at work or bill as a revision to the while enjoying weekend activities, law that helps Louisiana consumers. individual citizens often identify Speaking before the House Insurance current laws that make little practical Committee, McPherson argued that sense. Similarly, individuals frequently policy holders should only be charged recognize the need for new laws to for the services they utilized without correct problems in their communities. penalty. Most great elected officials will seek out and encourage their constituents Although the bill faced some opposition to bring these ideas and concerns to from insurance carriers, the legislation them. Such is the case with recently passed through both the House and enacted Senate Bill 246 by Senator Joe Senate Insurance Committees and McPherson and Representative Major through both Houses of the Legislature Thibaut. unanimously and was signed by the Governor. Prior to the enactment of Senate Bill 246, Louisiana law allowed an insurance As a result of this new law, which company to charge a policy holder a applies to personal or commercial fee for the early cancellation of their line insurance policies, (surplus line policy. According to testimony provided insures are exempt from this change) by Public Service Commissioner Foster if an agent is able to identify a cheaper Campbell, an independent agent in policy for an insured with another Bossier City, clients of independent carrier, they can suggest that the policy agents were penalized anytime their holder migrate to the less costly policy agent was able to find a policy that without having to worry about the was less costly than their current customer being hit with a penalty. Not a day goes by during the legislative session when I do not hear friends, family, or colleagues remark about their desire to see changes made to our state laws to improve the quality of life for our citizens. The introduction and passage of this legislation by Senator McPherson and Representative Thibaut is a stirring reminder that each and every citizen has a representative and a senator that goes to Baton Rouge to change laws that affect all of us. Having been around the legislature for decades, I have seen firsthand that the vast majority of legislators are eager to take ideas from their constituents and turn them into positive changes in the law. Advertise Today! Contact Jody at the PIA office at (800) 349-3434. October 2010 • Page 9 PIA Errors & Omissions By Curtis M. Pearsall, CPCU, AIAF, CPIA Writing Professional Liability: make sure you know the language! W Regarding the coverage hile traditional lines of business form, most (but not all) (Auto, Homeowners, BOP, WorkProfessional Liability ers Compensation) require a solid carriers provide this understanding of the coverage forms, in coverage on a claims-made basis, which many respects Professional Liability is in means that claims reported during the a class by itself. To begin, the coverage policy period are covered provided the is traditionally written on a claims-made actual error (which could have occurred form, as opposed to the occurrence form months or years ago) was after any used on most other lines of business. applicable retro date (more on this shortly). In addition, it is widely acknowledged On the other hand, an that no two forms are occurrence policy (your the same; this makes Special Consultant traditional GL coverage) coverage comparisons Utica Nat’l E&O Program covers claims that occur very detailed. Moreover, the terminology is Utica Mutual Insurance Co. during the policy period. Therefore, the difference unique, with terms like is that one form factors “retro date,” “full prior in when the claim was reported, while acts,” “extended reporting period” and the other form deals with when the “consent to settle,” just to name a few. As claim actually occurred. you will note in the claim discussed below, mistakes can occur and they can be big! Retro Date vs. Full Prior Acts – This is an extremely important concept that When one thinks of Professional Liability, will have a huge impact on whether the oftentimes the following classes of claim is valid. Using Agents E&O in our professional business come to mind: example, for a claim to be valid, the error Real Estate Agents, Lawyers, Medical committed by the agency (example: failure Professionals, Accountants and Insurance to put collision on a vehicle) must be after Agents. While these are some of the the retro date. If it was before the retro more common, there are more than 100 date, no coverage would be provided. additional professional occupations The retro date is typically shown on the –including Appraisers, Engineers, face of the policy. If the declarations Pharmacists, Court Reporters, Speech sheet states “Full Prior Acts” or “None” Pathologists, Consultants, Therapists in the area where a retro date would be and Teachers – that have a Professional noted, this essentially means there is no Liability exposure. With many of these retro date and the insured is protected classes, the General Liability carrier will for errors made regardless of when they include a Professional Liability exclusion were committed. The following E&O claim as it is not their intent to protect that illustrates this well: segment of the client’s business. Need E&O? Call Caroline at (800) 349-3434 TODAY! Page 10 • October 2010 The agency’s client, a real estate agent, had a claims-made Real Estate Professional Liability policy which was non-renewed based on loss history. The real estate agent made a conscious decision not to replace the coverage due to pricing concerns, as the premium would have been 4 times higher with a new carrier. He later changed his mind and procured a new claims-made policy with a retro date even with the new policy’s inception date. The client was sued for a loss where the alleged wrongful act occurred during the period covered by the expired policy and prior to the new policy’s retro date. The new carrier disclaimed based on the retro date, and the client was forced to spend $211,000 defending himself. The agent never advised the client to purchase a “tail” for the old policy, which would have covered the loss had a tail been in place. In addition, the agent did not fully explain how the “newer” retro date would affect claims based on older wrongful acts. The claim against the agent was settled for $200,000. As this claim also points out, defense costs in this line of business can be significant. A word of caution: if your client states they want to reduce their premium and would be willing to take a “current” retro date,” this should be emphatically discouraged as this leaves a significant gap in protection. This is also strictly prohibited in many states. Some other issues/differences to be aware of: Virtually all of the policy forms are different, even within the same class of business. Therefore, a Lawyers Professional Liability policy with Company A may be significantly different than a Lawyers Professional Liability policy with Company B. If you are looking to move your client to a different carrier, analyze Continued on page 21 FOREST INSURANCE FACILITIES Commercial Wholesale Brokerage Wayne Forest Wayne Forest Jr. Matthew Forest Specializing in: • Property, Casualty, Inland Marine • Umbrellas and Packages Debbie Libasci Courtney Kelly Stacy Lauer 2901 N. I-10 Service Rd. E., Suite 300, Metairie, LA P.O. Box 7635, Metairie, LA 70010-7635 PHONE: (504) 831-8040 FAX: (504) 831-4499 2010 CISR Schedule Agency Operations November 03: Houma November 04: New Orleans November 09: Baton Rouge November 10: Shreveport November 11: Lafayette Register today at www.piaoflouisiana.com or call (800) 349-3434. October 2010 • Page 11 How to Avoid Being Left Behind in 2011 by John Graham E ven after three years of economic gloom, the predictions about 2011 range from optimistic to less so. In some industries, the landscape remains desperately arid, while for others, the green shoots that poked their way to the light are actually growing stronger. Speculating about the year ahead is an interesting exercise, but one that may not have much value. What may be more useful are certain guideposts that can help point the way for a beneficial 2011. 1. Get your employment record straight. Anyone who reviewed resumes over the last decade recognized one fact stood out like the proverbial sore thumb: job-hopping. Employees often moved from one job to the next in a matter of months, let alone a year. For many, this was the plan. While the “plan” may have brought pay hikes, it also created an interesting unintended consequence. Once the recession hit, performance became an employee’s most valuable asset, not a string of jobs on a resume. It takes time to master an understanding of a company, along with its products or services and most importantly, its customers. This is what has value to employers today. 2. Job security depends on strategic thinking. We might also call this “goal thinking” or recognizing the objective and then pushing aside anything that doesn’t bring value to reaching it. Needless to say, strategic thinking is Page 12 • October 2010 a rare commodity in the workplace. “Total immersion is the best way to learn a new language,” says Michael Watkins of Genesis Advisers. “Immersion is important because people need significant �soak time’ in a milieu in order to build powerful mental models.” answer. It appeared that students didn’t make a connection between “scholastic success and information and communication technology.” In fact, the belief in the value of such competence was low compared with the use of technology in other areas of their lives. It seems doubtful that the John R. Graham is president of Graham workplace is very much Communications, a marketing services and different, particularly when sales consulting firm. He writes for a variety of a substantial percentage of business publications and speaks on business, those who are unemployed are marketing and sales issues. technologically incompetent. Contact: 40 Oval Road, Quincy, MA 02170 617-328-0069 jgraham@grahamcomm.com Blog: grahamcomm.com/wordpress Website: grahamcomm.com It’s fun to sit around and dream up clever “stuff,” whether it is a product promotion, a new smart phone app or a sales campaign. But it’s something quite different to come up with solutions that contribute to making that app of value to users or a sales campaign more than a glitzy gimmick. In effect, the ability to think strategically is significant because it focuses on the consequences of an action or an idea. And that’s a valuable commodity in the workplace. 3. The necessity of technological competence. Although society appears to place importance on technological competence, how much of a connection is there, for example, between such competence and success in school? The results of a large, recently reported survey of secondary students in England revealed the 4. It’s not what we do but how we think. “There is a fundamental shift in rules from manualbased work (where you follow instructions and an increase in productivity means doing the steps faster),” blogs author Seth Godin, “to project-based work (where the instructions are unknown, and visualizing outcomes and then getting things done is what counts).” The latter requires grasping the task, thinking through the implications, developing a plan, implementing it and evaluating the results. Ironically, such initiative is as necessary behind the counter at McDonald’s as it is in the c-suite, and every place in between. It is often missing in both. Continued on page 13 Continued from page 12 (How to Avoid Being Left Behind in 2011) 5. Jump at small opportunities. It’s popular today to talk about “less is more,” although there are indications that we don’t believe it. Salespeople are often impatient for the moment they can move up and go after the “really big accounts.” In the same way, national attention takes precedence over local stardom. We grab every “Top 100” list we can find and add the names to our prospect list. A marketing executive took a call from a company president for a small order of a particular promotional product, but over the next 30 years, that first order grew into a steady flow of very good business. No one wants to get burned today. It’s too costly. Buyers want to see how we perform. Do we take small orders seriously? If we do, they are more likely to give us more of their business. 6. Look at the long term. The last time Marc Buoniconti moved his arms and legs was when he made a tackle for The Citadel in 1985. Although a quadriplegic since that fateful moment, he has become a mover and shaker, having raised $350 million to find a cure for paralysis. Almost hidden in the last part of a USA Today story about this determined man, Marc reports that his medical care runs from $500,000 to $600,000 a year. Who pays for it? All his medical expenses are covered by a “catastrophic insurance policy” his father had taken out. That’s serious long-term thinking. The issue is not about having objectives in life or on the job, but creating the personal infrastructure to make sure we get there. Without that, we become like so many people, subject to forces well beyond our control. 7. Put yourself on the line. My wife and I play a game as we walk through Newport, RI, on weekends. We guess which stores and restaurants will make it and which won’t and we speculate about the outcome, one way or the other. This is no different than placing an ad for a job and using your name as the headline and the name of the town where you live as the sub-head. What would that attract? Not much; just a few people who say, “I saw your name on a website.” One example is the attractive Gelato shop that opened in a good location on a high-traffic street. As soon as we tried it, we gave it a “doomed” rating because of tiny portions and high prices. It closed at season’s end. The college might have stated, “93% of our graduates land a job fast,” followed by, “Get the details here.” Start with the benefit, not the name of the school. A retail store opened on the same main street, but in something of a less desirable location. It featured interesting and fun, non-clothing items for the home (such as the “Gone to Newport” sign we have at home). It seemed to have a plan to make it, particularly since it was friendly and owner-managed. Before long, it was gone––across the street to a larger space. It’s a productive game for figuring out who has a winning concept and why and whose idea is problematic. It’s a good exercise in testing one’s business acumen. In the same way, a person looking for a job in advertising might use the same space this way, “My ad sold 342 pairs of jeans. Check it out here.” Now, visitors are ready to listen to your story. A name of a person, a product or a company doesn’t become important until someone is hooked. It’s the same with everything we do. The year ahead will be pushed one way and then another by an endless series of events beyond our control. The eight tools may help move our prospects for success several notches, which might just make it a very good year. 8. Focus on what’s important. Surprisingly, this doesn’t include your own name or the name of your company, whether you’re an employee or own it. If this seems a little crazy, it isn’t. Take the ad, for example, that a college in Boston ran on boston.com. Attracting the attention of prospective students seemed to be the objective. Yet, the headline was the name of the school and the sub-head was its location. It was a missed opportunity and a costly mistake. October 2010 • Page 13 Introduction to the Agent’s Guide to Social Media By Alexi Papandon, CAE O ver the past year I’ve had many social networking for that very reason. stand to get out of it. Indeed, you had agents ask me about social media. Social media is merely a new venue for better have a compelling reason to use During that time, the most often asked networking. It’s like a cocktail party on social media or there is a good chance question has changed from “ What is your computer, but without the olives you will give up on it before it’s done anything other than steal your precious social media?” to some variation of an ice. time. “What should I be doing with social media?” The latter question The electronic social networks is often accompanied by Alexi Papandon is assistant vice president (i.e. the social media) are some anxiety. These agents of communications for the National where increasing numbers of want to take advantage Association of Professional Insurance consumers are forming trusted of this new medium but relationships. They are taking Agents. Over the years he has worked aren’t quite sure how . This control of the medium, in on the association’s print and electronic anxiety is not just a result contrast to the past in which communications, the PIA Branding Program of the brand new platforms companies pushed out the and the marketing of PIA member benefits that have emerged, but the message en masse. It may not among other responsibilities fact that each is based in be a stretch to say that agents computer technology. The who don’t embrace social sheer number of platforms media risk being left behind. involved and the speed with which they Why Social Media? Many of your customers and prospects have been adopted further compounds So why should you care about social are already there, and may even be the angst. When viewed as a whole, media? Why not stick with the tried talking about you, whether you are the social media mountain can appear and true techniques that have gotten there to respond or not. to be a bit overwhelming. Where does you where you are today? The truth is, the latter question hardly even needs Thankfully, social media tools are one even begin the journey? an answer. Many agents recognize largely free and accessible to all. Relax! As an insurance professional, that change is afoot and that they can The biggest investment is your time. you’ve already mastered the primary either be out in front of it or, they fear, Social media tools such as Facebook, LinkedIn, Twitter, YouTube, MySpace skills necessary to excel at social they just might get trampled by it. and blogs enable agents of any size media. That’s because, at its core, social media is really just a new way of Nevertheless, if you are going to delve to: networking and connecting. As a matter into the rabbit hole of social media • create a presence of fact, the term social media is often you should have an understanding of •position themselves as used interchangeably with the term what you are getting into and what you a trusted expert Page 14 • October 2010 • create new personal relationships with those who might become prospects • reinforce existing relationships between sales points • get useful feedback from customers and prospects • dispel misconceptions and answer questions • locate target markets and become known and trusted by those within them Social media tools might even reduce your overall marketing costs as social networking replaces some of your more traditional marketing expenses such as advertising and direct mail. OK, I’m Listening Hopefully you have decided that social media could hold some promise for your agency and are ready to take a few minutes learning how. That’s precisely what the Agent’s Guide to Social Media is all about. Here’s a rundown on what’s inside: Ted Janusz kicks off the Guide* with a concrete explanation of what the various social media tools are. He’ll help you understand what Twitter, YouTube, Facebook, MySpace and LinkedIn are. Next, Alan Shulman provides suggestions for blending social media with your agency’s traditional marketing initiatives. Following that Bill Jenkins shares specific examples of what other PIA members are doing in their agencies. Nancy Doucette continues with more real world case studies of agencies that are using social media successfully. Valerie Brennan advises readers about some of the legal considerations of social media. Curtis Persall educates agents about some of the best practices for using social media. The Guide ends with some pointers on how to get started and suggestions for developing a social media strategy and agency policies. From everyone at PIA, we hope that this Guide helps make your journey through the new world of social media a bit easier. We would love to hear your feedback. Please send it to us at agencymarketingguide@pianet.org. * This guide was mailed to all PIA agency members. To receive another copy, contact PIA of Louisiana at 1-800-349-3434 or e-mail info@piaoflouisiana.com October 2010 • Page 15 15676 Tapco Ad - Agents Voice, Oct. 2010.pdf 9/7/10 12:13:31 PM Mobile Home Parks and Campgrounds coverage in a five-minute phone call. Call. Quote. Bind. Using TAPCO’s courteous and prompt call center, Mobile Home Parks and Campgrounds coverage can be quoted, bound and delivered to your e-mail inbox quickly and accurately during one five-minute phone call. CGL Coverage Available: • Primary limits up to $3 million Occurrence/Aggregate • $5,000 Medical Payments Coverage • Additional Interests • Liquor Liability • Hired and Non-Owned Auto • Excess or Umbrella limits up to $5 million * Available coverages and markets may vary dependent upon risk characteristics. Property Coverage Available: • Building • Contents • Business Income • Basic, Broad or Special Form • Replacement Cost or Actual Cash Value • Equipment Breakdown • Food Spoilage • Inland Marine • Computer Equipment • Outside Signs The TAPCO Service Pledge • “A”-rated non-admitted carrier • Competitive pricing • Fast policy turnaround • In-house financing available in most states • Quick claims handling • $10 credit to your personalized TAPCO EZ Bucks Visa debit card with each policy • Visa, MasterCard and ACH payments accepted 1,000 Strong Page 16 • October 2010 More than 1,000 classes of P&C business written under binding authority. 800-334-5579 www.gotapco.com Customer Service: The Time For Thinkers Has Come For The Insurance Industry! By Dana Borowka, CEO of Lighthouse Consulting Services, LLC & Judy Estrin, Customer Service Training Specialist, JorgensenHR I n the Insurance Industry, when 1. Evaluate your customer base. Ask 6. Foster trust. Integrity is the key. it comes right down to it, the one yourself who your best customers are Do what you say you do – and don’t definitive factor that separates us and why. What similarities do they pretend you can do or provide services from our future competitors will be share? What are their core needs and you can’t. the quality of customer service today! how do you solve them? Customers can deal with the 7. Be consistent. Branding occasional problem if they are works – from how you Lighthouse Consulting Services, LLC provides a treated like jewels when they answer the phone to what variety of services, including in-depth work style contact the company to rectify you put in your promotional assessments for new hires & staff development, whatever the problem was. material. team building, interpersonal & communication training, career guidance & transition, conflict Sure sounds easy, doesn’t it? 8. Be easy to work with. management, workshops, and executive Just be nice to everyone and Make it easy for customers & employee coaching. To order the book, customers will never leave you. to buy. “Cracking the Personality Code” please go to http://www.crackingthepersonalitycode.com Tom Peters once addressed the 9. Create a customerargument that you can’t build a business on customer service as your differentiator because anyone can do it. He countered that, in fact, you can use customer service as a differentiator, because the truth is anyone CAN’T do it. It’s very hard, if not impossible, to replicate great customer service in an existing organization that doesn’t have it. Only with a leader who is a customer service fanatic can you even have a remote chance of doing it. In today’s market, the objective is to have customers who are delighted with your service – over and over again. Customers who will make referrals who in turn become customers and the word spreads. Peggie Arvidson-Dailey, founder of Pet Care Business University and the Pet-Care Business Success System™ and author of “How to Make Your Customers Crazy…about You” advocates business owners become customer-enthusiasm gurus. Take the time to focus on your customer in everything you do and follow these nine simple guidelines: 2. Keep the customer in mind. Before you initiate any new policy/procedures, ask yourself how it will benefit your IDEAL customers. Changing your hiring practice? Changing your billing process? Remember to look at everything from the customer’s perspective. 3. Create systems that maintain customer contact. Don’t expect customers to return. Regularly invite them back! 4. Communicate even when you have nothing to sell. Pay attention to them as individuals; show interest in your customer as a member of your community – no matter how large that community is! 5. Ask for feedback and follow through. How can you serve your customers better? When you get suggestions, consider them seriously – and implement when appropriate. Developing ways to serve customers better based on their feedback leads to enthusiastic customers. enthusiasm training program. Hire and train to the customer service level you want for your customers. Think you are on top of your game? Got the 9 steps down to a science? Take the Customer Service 101 quiz developed by Bill Werst founder of Growth Associates and author of Common Sense Managing: Simple Actions That Produce Results. If you would like to get a copy of the quiz, please go to the following link: http://lighthouseconsulting. o r g / A r t i c l e s / KOTC u s t S e r v Q u i z / signupform.php FINAL EXAM: Would your customers answer the customer quiz questions as you just did? Looking inside, how would your staff answer these same questions? Continued on page 18 October 2010 • Page 17 Continued from page 17 (Customer Service) Do they know and understand the company vision? Have you conducted workshops to talk about how to have a shared vision and a living entity? Are your employees free to make decisions on service without having to always ask a higher source? How do they treat each other? Internal customer service should hold equal value with external customer service! Do you have a performance management system in place to train and develop your people? Do you hire for today or for the organization, as you want it to be? Bottom-line, it takes leadership and vision to instill a customer service philosophy in your company. It takes training, leadership and reinforcement to achieve the employee performance at your desired customer service level. It takes REGULAR communication with your customers – those who are delighted and those who may not be – to ensure that you are consciously monitoring what your employees are doing and how customers perceive your business. It means moving into action and implementing changes at the very least in reaction to what you regularly learn if not ideally, being ahead of the curve, anticipating shifts and staying on top of your customers’ needs and expectations. The theme repeated by all the customer service “gurus” is: know your customer, what their needs are, adapt accordingly, empower employees to act and hire for the BestFit®! CONCLUSION: The Time for Thinkers Has Come! It is vital to have �Thinkers’ in our organizations. A client of ours has several hundred customer services reps and encourages all the various teams to contribute ideas for improving Page 18 • October 2010 processes, systems, customer interactions, etc. One individual was very frustrated with having to wait 10 seconds while the system updated information, thus having to make customers wait during the updating cycle. 10 seconds is a long time to wait – try it for yourself – count – 1 one thousand – 2 one thousand – 3 one thousand and you get the idea. So this person went to the IT/IS manager to share the challenge which then was followed by several group meetings with team leaders and within two weeks they reduced the time from 10 seconds down to 2 seconds. That’s huge! 8 second savings multiplied out by 200 customer services reps – you do the math. Everyone was so excited that they had a party to celebrate and provided the individual with a “thank you” check along with a three day cruise to Mexico. imperative that every organization hire right the first time, do appropriate skills testing for grammar, computer, email, and phone etiquette, and understand how the person will interact with others and their learning style. This can be done through having them complete an in-depth work style and personality assessment. You can read more about the various options and how to select an instrument in our book, Cracking the Personality Code. To find out more, please give us a call at (310) 4536556, ext. 403, email us at Dana@ lighthouseconsulting.com or by visiting our website, www.lighthouseconsulting.com If you would like additional information on this topic or others, please Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com By having just one thinker on board – someone willing to speak up – to be dissatisfied when customers are having to wait – to want to improve things in the work environment… amazing results can take place. We all need to have more of these types of thinkers on board. We need to create an environment At your desk, so individuals are at your convenience. encouraged to contribute and share ideas that will increase client satisfaction as Gain a Competitive Advantage for Your Agency well as affecting the By Investing in Your Employees bottom line. Hiring is the key. Today is the Your agency’s success is directly tied to the knowledge and skills of your employees. You can gain a competitive day to add the key advantage for your agency by simply providing more educharacteristics to your cational opportunities for your staff. PIA’s online business job descriptions so skills and CE courses make it easy! that you can begin to add to your teams the Realize Big Returns Tomorrow thinkers that will drive By Making a Small Investment in Your Staff Today! your organization to the next level! Online Education for Insurance Professionals Small Investment, Big Return If you hire the right people, you’ll not only have satisfied customers but you can also create potential savings and profit. It is PIA’s Online Courses…Get Started Now! Visit www.piaoflouisiana.com/default.asp?id=43 Questions? Contact info@piaoflouisiana.com or 800-349-3434. Recent Changes To HIPAA Rules Could Be Costly To You by Bill Campbell, Manage-Trak M ention the term HIPAA to someone in a firm that works primarily in the workers’ compensation or property and casualty field and they will most likely have little to no interest. If this represents your perspective on HIPAA, you may find your pocketbook affected in the near future. To give you some background, it’s generally understood that the HIPAA Privacy Rule does not apply to workers’ compensation insurers, workers’ compensation administrative agencies or employers when disclosing health information as required by state law for workers’ compensation system purposes. There are reasons to care about recent changes to HIPAA legislation, however. For example, the above disclosure exemption noted above is quite different than the issue of protecting the information from a future breach whether by unintended access, theft, or by a hacker. The Stimulus Bill also known as the American Recovery and Reinvestment Act of 2009 contained a little-known section (Subtitle D of the Health Information Technology for Economic and Clinical Health Act -HITECH Act)) which significantly expanded current federal protections for health information under HIPAA Privacy and Security requirements. New penalties became effective February 23, 2010 of up to $50,000 for each violation, not to exceed $1.5 million for all such violations of an identical type during a calendar year. At its core, HITECH changes breach notification requirements for protected health information (PHI). This change affects individuals, covered entities and business associates as defined under HIPAA. A breach of unsecured protected health information requires that individuals be notified of unauthorized disclosures or use of their health information. Under HITECH, individuals may request an audit trail showing all disclosures of PHI made through an electronic record. For many people, HITECH is still a mystery and may prove to be more than a speed bump. The Department of Health and Human Services (HHS) is gearing up to put real teeth into enforcement and has allocated over $25 million for this purpose at the federal level alone. In addition, each state’s Attorney General has enforcement authority. To aid covered entities with compliance, HHS provides a safe harbor rule where “covered entities and business associates that implement the specified technologies and methodologies with respect to protected health information are not required to provide notifications in the event of a breach of such information that is, the information is not considered unsecured in such cases.” Encryption and destruction are the two HHS specified technologies and methodologies for rendering protected health information unusable, unreadable, or indecipherable to unauthorized individuals. Covered entities must now consider addressing the minimum requirements by conducting a risk analysis around the HITECH guidance provided for the four states of data (data in motion, data at rest, data in use, and data disposed.) Although you or your firm may be exempt from HIPAA’s Privacy Rule in your activities related to workers compensation or other P&C activities, the Security Rule and its requirements to secure Protected Health Information (PHI) may apply to healthcare information related to workers compensation or P&C claims. Additionally, if you now or in the past handled health or life insurance applications or if you have group life and health clients you may very well find yourself facing stiff penalties or worse media notification requirements if you don’t take the appropriate actions to properly secure the past and current data you store, access, use, or transmit from. For more information on the HITECH ACT, we encourage you to talk with your legal counsel. In addition, you can learn more at www.manage-trak. com or call Bill Campbell at 225-7090334. October 2010 • Page 19 Workplace Violence Can Put Your Company at Risk By Teresa Long Traditionally, the workplace has been thought of as a safe environment, the place where we often spend more time with our co-workers than our own families. But that perception changed dramatically on a hot August day in 1986, when a postal worker in Edmund, Oklahoma walked into the post office with a mailbag containing the usual assortment of sales circulars and utility bills, right alongside three hand guns and 100 rounds of ammunition. Ten minutes later 17 co-workers were dead, the shooter had killed himself, and a workplace where the greatest danger up until that moment was probably a sore back from lifting a mailbag, was now the site of what has become an alarming trend across the country. According to a study by the U.S. Institute for Occupational Health & Safety, 1,000,000 workers are assaulted and another 1,000 are murdered each year in the workplace. Most of them aren’t the high-profile incidents that make the six o’clock news. Everyone remembers Columbine and Oklahoma City, but few recall the Fort Lauderdale beach worker who reacted to his firing by killing five of his co-workers or the refinery worker in Texas who killed his boss, his boss’ wife, and three other workers because he was having a bad day. Talk with employees after such an incident and they will almost always share a similar observation of the killer they may have worked side by side with for years. “There was something that didn’t seem right,” they say. Chances are what that worker noticed were warning signs of a mental and/or physical short-circuit, which could include: a. Making verbal or physical threats b. Unexpected mood shifts c. Defensive and hostile attitudes d. Bouts of depression e. Suicide threats f. Being obsessed with weapons or carrying a weapon. Once employers recognize the warning signs of impending workplace violence, and understand the potential triggers – domestic problems, drug and alcohol abuse, termination or disciplinary actions – they need to put a plan into place to protect their employees. Page 20 • October 2010 Any plan should begin with educating employees, the ones most likely to interact on a dayto-day basis with a potentially hostile co-worker. Recognizing the red flags is a good start. But employees also need training to take their observations a step further. If an employee notices a co-worker acting strangely, which may include some form of a verbal or physical threat against themselves or someone else in their workplace, it should be reported immediately to a supervisor, no matter how innocent it might seem. It’s the company’s responsibility to protect their employees, not only from co-workers but also from non-employees, such as spouses or disgruntled customers. There should be a written policy stressing zero tolerance for workplace violence, meaning no violence and no threats, even in a joking manner. Pre-employment screening and preventive measures such as background checks should be an integral part of the hiring process. Putting a plan into place not only helps create a safer environment for employees, but it also minimizes Workers’ Compensation risks. While the Workers’ Compensation costs arising as a result of workplace violence can be significant, traditionally employers have been protected from lawsuits, particularly if the violence could not have been reasonably predicted. However, increasingly courts are awarding settlements against employers due to negligence on their part in preventing acts of workplace violence. A good example is the case in which the management of a Florida bank cut a guard position, even though it had prior knowledge that one of its employees was being harassed by someone coming into the bank. The employee even pleaded with her employer not to eliminate the guard position, as she feared for her life. The company dismissed the guard nonetheless, and shortly thereafter the teller was shot and killed by the harassing person. Because the court ruled that the employer knowingly created an unsafe work environment by eliminating the guard’s position, the teller’s family not only received Workers’ Compensation benefits, but successfully sued the employer in a general liability suit that cost the company a hefty settlement (and certainly more than they saved by eliminating the guard’s salary.) Employers should be aware that the adjudication system for Workers’ Compensation nationwide is becoming more and more liberal in its interpretation of the “exclusive remedy” afforded to the employee injured on the job and the degree of negligence it takes to open the door for the injured employee to pursue an Employer’s Liability claim. This is particularly true if it is known there was any form of “notice” or warning given (internal or external) and the company did not react properly to protect its employees. Business owners can no longer ignore or pretend they “didn’t know” when a tragedy occurs, because the ramifications could be severe. Beyond the loss of life and extreme emotional toll, workplace violence can generate significant legal costs. The National Safe Workplace Institute estimates that the average cost to employers of a single episode of workplace violence can amount to $250,000 in lost work time and other expenses. But that is just the tip of the legal iceberg. A case in California illustrates the legal impact of workplace violence on employers. On August 3, 1990, a 20-year-old woman was stabbed to death by a co-worker at a winery where they were both employed. The assailant had been fired from previous jobs due to poor work habits. He also had a criminal record indicating that he was a dangerous person, but the temporary agency that assigned him to the winery allegedly failed to check his work references. A jury awarded the victim’s survivors $5.5 million in damages against the temporary agency that had hired her murderer. Employers need to always be aware and proactive when it comes to potentially unsafe conditions in their workplace. If they ignore the warning signs and there is a resulting incident of an employee being harmed or worse, aside from a Workers’ Compensation claim, there could also a be much more expensive Employer’s Liability claim looming on the horizon. Continued from page 4 (President’s Message) of our E & O destiny. The product, rated A.M. Best – A, will be tailored for insurance agents. PIA Branding Programs, an Agency Agreement Review Service, Education opportunities, a Political Action Committee, and so much more is offered by PIA National. I was thoroughly impressed with the PIA’s deep desire for the attendees of the conference to go home and pass the word that our association is here to help its members with its agency needs. Traverse City, Michigan is a gem on the United States map and I hope to return one day with my golf clubs. On a personal note... My wife, Michelle, and I would like to thank Richie, Charmaine, Brian, Lynn, Manuel, Linda and Jody for a great trip and mention how much we missed Gene and Ellen’s attendance. Their son was married the same weekend...I guess that is an excused absence! Continued from page 10 (PIA Errors & Omissions) the two policy forms and be sure to bring any differences to the customer’s attention. Oftentimes, the new carrier may have a coverage comparison form that will be of benefit. Defense provision – Policies may be written with “Defense in addition to the Limit of Liability” or “Defense within the Limit of Liability.” If the Defense is “within the limit,” any dollars spent defending the customer will impair (reduce) the limit available for any settlement/judgment. Defense (unlimited) in addition to the limit of Liability is the broadest. Deductible – This may be on a loss-only basis or on a combined basis. With lossonly coverage, the insured would not participate in any claims defense, litigation or claims-handling expenses associated with the claim; these would be handled by the carrier. Conversely, with a combined loss and expense deductible, the insured would participate in these expenses up to the deductible limit. Make sure your customer knows their obligation. Extended Reporting Period – This is often called a “tail.” While virtually all claims-made policies contain this provision, this does not mean there is consistency among carriers as to the available options. Using agents as the example, if an agency sells its business to another agency, the seller would buy a tail. This provides an additional period of time after the expiration of the policy for which valid claims will continue to be accepted, provided the wrongful act occurred before the end of the policy period. In the claim example cited earlier, the agent should have advised the real estate agent to buy a tail to protect him for any claims that subsequently were made against him. Receipt of the policy – When you send out/ deliver the policies, always advise your clients to review the policy to ensure everything is in order. Obviously, the agency should also review the policy to make sure it matches what was requested. If you handle Professional Liability (also called Errors and Omissions), understand its uniqueness – the terms and the coverages. It is unlike most other forms of coverage. In addition, educating your customers is recommended and will certainly have solid FIRST PREMIUM® INSURANCE GROUP, INC., CMGA For over 35 years, as your General Agency, we have provided you with tools to make doing business with us easier than ever. First Premium® offers a wide range of Commercial Lines products for your agency! General Liability and Property, Professional Liability, Inland/Ocean Marine, Excess/Umbrella, Garage Liability/GK/DOL and much more. Online rating program for personal lines products with the ability to quote, bind, sign, premium finance and issue a policy in a matter of minutes. Premium Financing for “In House” products with real time payment and account information. Coming Soon: a new state of the art website and the ability to e-pay! 190 New Camellia Blvd. Covington, LA 70433-7812 (800) 256-2171 toll free | (800) 299-2171 fax www.firstpremium.com October 2010 • Page 21 Continued from page 6 (Commissioner’s Column) and to require any premium tax on such insurance. This home state primacy applies to multistate risks. The NRRA only gives states 330 days from July 21, 2010 to establish a multistate system for allocating premium taxes without interruption of current state revenue from surplus lines taxes. This legislation is not merely a premium tax law. It also applies to regulation of the surplus lines insurance contract and the licensing of the broker by the home state of the insured, including express preemption of contrary state laws, other than those related to the purchase of nonadmitted and excess insurance for workers’ compensation risks. After two-years from enactment, a state may not collect any fees for licensing surplus lines brokers unless it participates in a national producer licensing database such as that maintained by the National Association of Insurance Commissioners (NAIC). The NRRA prohibits states from imposing eligibility requirements on surplus lines insurers that do not conform to the NAIC’s Non-Admitted Insurance Model Act or other uniform requirements developed in accordance with the NRRA and from imposing a prohibition on the placement of surplus lines insurance with alien insurers that are on the NAIC’s Quarterly Listing of Alien Insurers. The NRRA also creates a streamlined process for the purchase of surplus lines insurance by a class of exempt commercial purchasers as defined in the legislation. Exempt purchasers can give an informed written consent to the purchase of nonadmitted insurance, after certain disclosures from the broker, without the requirement of a due diligence search for admitted insurance. The last section of this part directs the Government Accountability Office (GAO) to study the effects of the NRRA on the nonadmitted insurance market and to deliver a report to Congress at the end of 2012. The GAO report is to address, among other things, changes in the market share of nonadmitted insurance, shifts in insurance coverage from admitted to nonadmitted, consequences of any change in the size and market share of nonadmitted insurance, and changes in the number of nonadmitted policyholders. The part on reinsurance addresses domiciliary state regulation of ceding insurers for credit for reinsurance and reinsurance agreements, and of reinsurers for financial solvency. No other state may deny credit for Page 22 • October 2010 reinsurance granted by a domiciliary state if the state of domicile of a ceding insurer is an NAIC-accredited State, or has financial solvency requirements substantially similar to the requirements necessary for NAIC accreditation, and recognizes credit for reinsurance for the risk transferred by the ceding insurer. The same section preempts the laws of states, other than those of the domicile of a ceding insurer, that prohibit the enforcement of contractual arbitration and choice of law clauses, that impose mandatory laws applicable to reinsurance agreements, and that apply to the reinsurance agreements of ceding insurers not domiciled in a state. If a state is NAIC-accredited, it shall be solely responsible for regulating the solvency of reinsurers domiciled in that state and other states shall not be able to require additional financial information from reinsurers domiciled in that state. Section 989J, the Harkin Amendment, of the Dodd-Frank Act gives greater certainty on regulatory jurisdiction over fixed-indexed annuities which has been the subject of litigation arising out of an attempt to regulate such annuities by the Securities and Exchange Commission (SEC). This provision requires the SEC to treat such annuities as securities exempt from SEC jurisdiction if they comply with state laws on nonforfeiture or, in the absence of such laws, relevant NAIC model laws on nonforfeiture and suitability in annuity sales. It effectively ends the current litigation, keeps jurisdiction over annuity products in the hands of state Small Office Tenant Package Auto Physical Damage Commercial Property General Liability Inland Marine Cargo And More!!! insurance regulators, and keeps the sales of such products in the hands of licensed insurance producers and not securities brokers. While both creating and strengthening the federal presence in insurance regulation, Dodd-Frank recognizes and institutionalizes the role of state insurance regulation in federal law on financial services regulation. The FSOC will have a major voice in future national policy on financial services regulation, and insurance will have a substantial presence in shaping that policy. The FIO will give the United States a single international voice on issues related to insurance without general preemption of state law. The NRRA gives the states a needed deadline to address lingering issues with surplus lines insurance and reinsurance. The Harkin Amendment ends both current litigation and federal regulation of genuine annuity products as securities. I am pleased to have been tasked with leading the NAIC initiative to enable states to comply with the NRRA’s surplus lines requirements and am working closely with the other 10 state members of the Surplus Lines EX Task Force towards that end. The future remains uncertain, but I feel that the insurance related portions of Dodd-Frank, particularly the NRRA, are positive for both the industry and for state regulation of insurance. 1-800-661-7905 Fax: 318-768-3025 PO Drawer 887 Ruston, La 71273 October 2010 • Page 23 Page 24 • October 2010 Dwelling Liability Program Occupied or Vacant Including Under Renovation Lane & Associates, Inc. is pleased to be able to provide a program providing Commercial General Liability insurance coverage for Artisan Contractors in the states of Louisiana and Texas. A Rated Carrier Dwellings - 1, 2, 3 or 4 Family Minimum Premiums $200 - 100/200 $300 - 300/600 $400 - 500/1 mil $500 - 1 mil/2 mil (1 or 2 units usually qualify for min. premium) www.Lane-Assoc.com 504-467-3123 800-899-1466 October 2010 • Page 25 Member Benefit in Focus Index of Advertisers Accu-Auto……………………………..……...…............24 Burns & Wilcox.....................................................7 First Premium Insurance Group.............….…....21 Forest Insurance Facilities……………………….....11 Archived NFIP PRP Webinar Now Available on PIA National’s Website PIA members and other agents may now access an archive of the September 27 webinar in which we educated agents about the changes that FEMA is making to the eligibility for the National Flood Insurance Program.s Preferred Risk Policy. That webinar and other resources is available now on PIA National’s website: http://www.pianet.com/IssuesOfFocus/HotIssues/ flood/. Hull & Company, Louisiana………………….……...15 Imperial Fire & Casualty Insurance……………...23 Lane & Associates……….…………………….……….25 LEMIC Insurance Company………………...…......…5 LUBA Workers’ Comp……………………..Back Cover LWCC…………………………………Inside Front Cover North Central Agency……………………….…….…..22 Progressive…............................Inside Back Cover FEMA is making changes to the eligibility for Preferred Risk Policies (PRP) to help reduce the financial burden placed on some property owners whose buildings are newly mapped from a low hazard zone into a high-risk flood area. These changes will directly affect many agencies that sell flood insurance and could affect some of their current policyholders. Changes apply on select new and renewal policies with effective dates on or after January 1, 2011. As of October 1, 2010, FEMA/NFIP began sending notices to current policyholders. As a result, PIA members must understand these changes now. Southern States General Agency........................5 Summit Consulting…………………………..……….....5 Tapco Underwriters...........................................16 U.S. Risk Brokers...............................................11 Find out more details on advertising in The Agent’s Voice by calling the PIA office at (800) 349-3434. Page 26 • October 2010 PIA wishes to thank Hartford Flood for sponsoring this important educational webinar. PIA also wishes to thank our webinar presenters: Rita Hollada, PIA’s resident PIA member expert on the NFIP, as well Karen Piacenta of Hartford Flood and Lindsey Erickson of National Flood Services (NFS), both of whom provided supporting guidance in preparing this PIA webinar. These agenTs have made Their mark Congratulations to Progressive’s signature agents SM Congratulations to the 42 Louisiana independent agents who’ve achieved Signature Agent status in our new Progressive Preferred program. The program recognizes and rewards agents for selling an average of at least one preferred Progressive personal auto policy per week. This elite group now earns higher commission and a variety of additional benefits, including the opportunity to leverage more of Progressive’s marketing firepower. Thomas insurance agency Abbeville harlan insurance agency Alexandria gary Losey insurance Baton Rouge insurance network of Louisiana Baton Rouge Bubrig insurance agency Belle Chasse arnold insurance group Benton moore Jenkins Bogalusa Beasley-keith, inc. Bossier City advanced insurance solutions Hammond gendusa insurance agency, inc. Hammond aBC agency network, inc. Harvey Pham & associates insurance Harvey Page and sons insurance agency, inc. Houma Pam Price insurance, inc. Jena aBC agency network, inc. Lafayette Thomson, smith, & Leach Lafayette Premier metro group Metairie Curtis insurance agency, inc. 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Burghardt insurance Metairie Castello agency Zachary Total insurance of Watson Denham Springs To find out what you need to do to make your mark as a Signature Agent, contact your Progressive account sales representative. ©2009 Progressive Casualty Insurance Company and its affiliates, Mayfield Village, Ohio. 09A00214.AP.LA (07/10) Prsrt Std U.S. POSTAGE PAID BATON ROUGE, LA PERMIT NO. 701 8064 Summa Avenue, Suite C Baton Rouge, LA 70809 DON’T WORRY ABOUT IT. Thanks to LUBA Workers’ Comp. With online quoting, competitive rates, and an AM Best rating of A- Excellent, we are there precisely when and where you need us. It’s not like we have ESP. It’s just that we’ve taken service to a whole new level. Visit lubawc.com. LUBA | Loo-buh | – Does the sound of good service ring a bell?
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