IIABL STAFF
2017 IIABL Legislative Agenda
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ACT Releases E-Signature Tool
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Jeff Albright Chief Executive Officer jalbright@iiabl.com
How TrustedChoice.com Works with Your Website
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Francine Berendson Director of Communications & Events fberendson@iiabl.com
Should Customers Be Able to Modify Certificates of Insurance
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NCCI Offers Open House & Workshop
10-11
Evolving Cyber Concerns
12-15
Kim Jackson Education & Membership kjackson@iiabl.com
Executive Action on Fiduciary Rule
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Karen Kuylen Director of Accounting kkuylen@iiabl.com
Ask Mike
20-25
E. Lee Mowe Marketing Representative lmowe@iiabl.com
Commissioner’s Corner
31-33
Mike Edwards, CPCU, AAI Director of Education medwards65@aol.com
Rhonda Martinez, CIC Director of Insurance rmartinez@iiabl.com Jamie Newchurch Insurance Services jnewchurch@iiabl.com Lisa Young-Crooks Executive Assistant lyoung@iiabl.com
IIABL Calendar
26
Rate & Rule Filings
27
Tech Tips IIABL Partners
28-29
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2017 IIABL Legislative Agenda The 2017 Regular Session of the Louisiana Legislature will convene on April 10, 2017. This will be a “fiscal session� where the primary focus of the session will be taxes. Will Louisiana finally overhaul its archaic tax system and pass real tax reform? Or, will we extend temporary taxes and patch together the budget with chewing gum, duct tape and baling wire? During fiscal sessions, each legislator is limited to five bills of general jurisdiction. That means that there are usually far fewer insurance bills in the legislature, and less danger for the insurance industry. The IIABL Board of Directors met on January 20, 2017 to discuss priorities for the upcoming legislative session. The board decided that IIABL will try to pass two bills this year. The IIABL Board discussed LDI Directive 209 which prohibits agency fees on individual health
insurance. The dramatically reduced commissions on individual health insurance make it essential that agencies be able to collect agency fees. IIABL plans to work with LDI and other agent associations to introduce legislation to permit agency fees on individual health insurance. Recently, IIABL met with the four other agent associations: Professional Insurance Agents, Health Agents For America, National Association for Insurance & Financial Advisors, and Louisiana Association of Health Underwriters to discuss agency fee legislation. The five associations have come to agreement on bill language and has asked Rep. Mike Huval to sponsor this language in a bill. The IIABL Board discussed legislation from 2016 that limited LA Citizens to only writing policies through Louisiana resident producers and proContinued page 5
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hibits any nonresident producers from writing Louisiana Citizens policies. This bill was in response to a similar statute in Mississippi that prohibits Louisiana agents from writing business in the Mississippi Wind Pool. Unfortunately, the law has had unintended consequences. For example, the Texas Wind Pool allows Louisiana agents to write business, but the new law now prohibits Texas agents from writing in Louisiana Citizens. Texas agents are understandably upset and plan to pass retaliatory statutes or regulations. We could end up with a multistate border war. Instead, IIABL plans to work with LDI, LA Citizens, and other agent associations to make the statute reciprocal so that LA Citizens will treat nonresident agents the same way their state treats Louisiana agents doing business in their state. Of course, the most important strategy in any legislative session to protect independent agents and their customers from any harmful legislation. Rest assured that IIABL will be there playing defense to protect your interests.
Virtual University—Free Webinars The Virtual University has a variety of free webinars to help you and your agency. Below is a list of a few of the recorded webinars available to IIABL members:
Certificates of Insurance
How to Compete with Direct Writers in Personal Lines
Cyber Risk Exposures & Insurance
NCCI Experience Rating Split Point Change
Using the Best Practices Study—Your Guide to Agency Growth, Profitability & Value
To review the Virtual University library of webinars click here!
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Spread the Word: ACT Releases E-Signature Tools for Agents by Ron Berg
The Agents Council for Technology (ACT) distribution channel continues progressing as more agents adopt key technology tools—including esignature. Although e-signature is gaining popularity in the insurance industry, challenges can get in the way of implementing this technology, including misunderstanding the benefits for both agencies and customers; not knowing how to integrate it with existing agency workflow; and troubleshooting issues that may arise. In response to these challenges, ACT has created several resources any agency can use to ensure smooth e-signature implementation and advocacy. Free tools now available for download include: Benefits Guide: concise guide with resources that outline the benefits of e-signature products. Agents can adopt and brand this guide as
their own to drive use of e-signatures among their customers. Training & Troubleshooting Guide: resource for agencies to choose, implement and develop their e-signature workflow. It contains guidance for selecting an e-signature solution, as well as workflow insights and additional background resources. Workflow Overviews: visual workflow comparisons that reveal the dramatic time savings that result from using e-signature in the agency management system workflow. All three guides are available on ACT's e-signature webpage, along with a number of other resources, including a list of carriers that accept esignatures and agency management system vendors that integrate e-signature within their workflows. Remember—all ACT resources are free for Big "I" agencies! Continued page 7
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How TrustedChoice.com Works WITH Your Website
Most agencies today have a website. However, many websites deliver less value than agencies expect. While there are a number of reasons why, there is an easy and inexpensive way to address these issues. The easiest and least expensive way to improve your agency’s presence on the web is to purchase an Advantage profile on www.TrustedChoice.com to compliment your agency website.
Mobile First Too many agency websites are not mobile enabled. As anyone with a smart phone knows, more and more searches are done on mobile devices. If the searcher is using a mobile device, Google penalizes websites that aren’t mobile friendly. Advantage profiles are mobile optimized, allowing searchers to interact with your agency in a much more intuitive and attractive manner.
Profile Rank Most agency websites don’t rank (show up on page one) for any search terms other than the name of the agency. Many times, they don’t even rank for that. TrustedChoice.com is considered to be a very reputable site by Google. That means that Advantage agency profiles rank very well, in some instances more highly than the agency’s own website! Power of Content Agencies inability to rank for insurance search terms is problematic. The number of agencies with unaided recall (the ability to remember that Smith Insurance is an agency in Turkey Creek, LA without a reminder) is very small. Thus, anyone who is Googling the agency name already is very familiar with the agency, but a minute percentage of searchers. Continued page 8
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Real world search is more likely to involve keywords related to insurance. And when the consumer searches for volunteer board insurance, the majority of agencies have ZERO chance of being shown in the top 20 pages of the results. This is where TrustedChoice.com’s value proposition comes into it’s own. Today, TrustedChoice.com is one of the top 5 results on page ONE (one of the 5 best pages in the internet) for over 11,000 insurance search terms. This is due to the breadth and quality of the content (web pages) that TrustedChoice.com publishes every week. When that consumer educates themselves on their insurance issues and then looks to find a local agency with whom they can work, Advantage agencies are shown at the top of the list. Call Today! These three reasons, the breadth of content and its high rank in Google search, the added visibility to an agency’s own presence in search, and the mobile optimized profile all create significant benefit and are a very cost effective way to leverage an agency’s web presence. For more information, call TrustedChoice.com at 1855-372-8755.
Should Customers Be Able to Modify Certificates of Insurance? Bill Wilson, CPCU, ARM Last week I was asked for my opinion on a certificate of insurance (COI) issue. The agency permits customers to order/issue certificates of insurance through AMS and their Client Portal or, for more complex requests, through EBIX. The customers are allowed to modify the Description of Operations field. Is this OK? The short answer is “No!” In fact, the LONG answer is “No!” Period (or, rather, exclamation point). In the inquiry, the agent gave an example of where the customer writes in that “XYZ” is an additional insured and waivers of subrogation are provided but they really aren’t. That’s why the answer to the question of whether this is OK is “No!” In the past, I’ve written about some online COI systems that allow someone other than the agent to modify the COI on file. One system allowed the insured to modify the Description of Operations. Another system was even worse, allowing the certificate holder (the insured’s customer) to enter a list of additional insureds in this field. Needless to say, information could easily be entered that implied that the COI amends, extends or alters the policies. This is almost certainly illegal in every state that has passed laws or regulations regarding COIs and quite possibly illegal under unfair trade practices or other laws in every state. ACORD COIs have an “Authorized Signature” line for a reason. Somewhere in the agency/company contract or underwriting guidelines or supporting documentation for many, if not most, insurers is something addressing COIs. Allowing a customer or even one of their customers to modify a COI is an E&O claim waiting to happen and quite possibly a violation of the agency/company agreement (s) and/or state laws, regulations, or insurance department directives. Do NOT use ANY system, in your shop or an outside online vendor, that allows anyone outside the agency or carrier to modify the content of a certify Continued page 10 Louisiana Agent 8
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icate of insurance. Make sure that any such feature or option is turned OFF. Bill Wilson, CPCU, ARM, AIM, AAM Founder & CEO, InsuranceCommentary.com Bill@InsuranceCommentary.com or InsuranceCommentary@outlook.com
Com•men•tar•y … an expression of opinions or offering of explanations William C. Wilson, Jr., CPCU, ARM, AIM, AAM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and director of the Big “I” Virtual University for over 17 years.
NCCI Offers Open House and Agent Education Workshop in Baton Rouge NCCI is offering two different learning opportunities in one location—Baton Rouge, LA—on March 21, 2017. These two events will address different audiences as highlighted below, however, they may create opportunities to add more value and efficiency for you. Location For the Two Events: Renaissance Baton Rouge 7000 Bluebonnet Boulevard Baton Rouge, LA 70810 225-215-7000
Open House The Open House will be on Tuesday, March 21 for our affiliated insurance companies. Join us to find out how to connect with us from anywhere using online and mobile-friendly services. Hear about our Continued page 11
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tools and resources that can help you make informed decisions and be more productive. Meet face-to-face with NCCI experts. Learn how NCCI is the trusted source of information for workers compensation. Open House Date/Time Tuesday, March 21 12:30 p.m. to 4:00 p.m. Register today at ncci.com.
programs. Please share with your agents and encourage them to register and attend. Agent Education Workshop Date/Time Tuesday, March 21 8:30 a.m. to noon Register today at ncci.com Register for the Open House or Agent Education Workshop at our Upcoming Events page at ncci.com, or contact our Customer Service Center at 800-NCCI-123 (800-622-4123).
Agent Education Workshop This event for agents will be on the same day of the Open House. This workshop provides key information to assist agents in the significant role they play with their customers regarding workers compensation coverage. This workshop will provide a better understanding of the classification and experience rating processes, workers compensation rules, and available premium pricing
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Evolving Cyber Concerns Create Gaps in Homeowners’ Coverage BY MATT CULLINA
Today’s criminals don’t want just your jewelry or car anymore — they want your digital property. According to the FBI, there were nearly 8 million property crimes in 2015, with victims of these crimes suffering losses of over $14 billion. Property losses were dwarfed, however, by nearly $30 billion in estimated losses that cybercrime inflicted on U.S. consumers in the past year, according to Symantec.
reputational harm in the free-for-all of the internet.
Digital risks are outpacing traditional risks, creating new opportunities for the home insurance marketplace. The current generation of cyberattacks have begun to target the digital devices and systems that connect us all on a daily basis, exposing novel areas of risk. Online cyber thieves encounter a wealth of avenues to steal components of an individual’s identity, starting with something as simple as a social media account that lists an individual’s birth date, which can be matched with other stolen personal data to hijack an identity. Most people’s mobile devices contain personal data that are a gold mine for hackers, including passwords to banks and healthcare portals and copies of tax statements with social security numbers.
At the same time, people routinely expose themselves to cybercrime by sharing a wide range of personal details on social networks. Birth dates and locations, addresses, schools, family members’ names and other affiliations can all be used to authenticate an identity, and cybercriminals are all too ready to use these kinds of details to their advantage.
On a daily basis, major retailers, banks and online providers report stolen data, with each hack exposing more consumers. Juniper Research predicts that the rapid digitization of consumers’ lives and enterprise records will increase the cost of data breaches to $2.1 trillion globally by 2019, almost four times the estimated cost of global breaches in 2015. At this point, the digital identities of millions of consumers have already been exposed and offered for sale on the dark side of the Internet. Today, however, digital risk is much broader than identity theft. A new generation of risks has emerged as people spend more of their lives on online. Fake news, Internet trolls and cyber bullying have notoriously victimized innocent people and businesses online, causing reputational harm that can have devastating consequences. Most victims lack the skills or technology to address
Once reserved for business owners and prominent public figures, ransomware is trickling into the consumer space, and malware has begun to infiltrate any vulnerable system that cannot defend itself. Criminals can purchase hacking kits online for just a few dollars and they are turning their sights on security gaps in homes as well as businesses.
For many victims, the impacts can be life-changing. Identity theft creates immediate financial hardship for victims, but it can go well beyond, potentially impacting a victim’s employment and housing options, even their educational opportunities. The damage can extend for years as victims’ personal data is bought and sold on illicit websites to any number of criminals. It’s difficult to make someone whole again after such an intrusion, and monetary compensation only addresses a portion of the person’s loss. For more than 10 years, homeowners’ insurance carriers have offered a variety of coverage options to victims of identity theft, which range from expense reimbursement to expert assistance that helps victims recover their identities, to tools that monitor and detect fraud. Millions of Americans are already covered, or have access to services, for free or at a significant discount, through their insurance company. But current coverage options don’t address the latest cybercrime techniques, leaving consumers on their own without expertise or recourse. Most policies that cover identity theft are aligned with the Fair Credit Reporting Act (FCRA) regulations, which shield consumers from fraudulent charges when their data is stolen. HowLouisiana Agent 12
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ever, a growing number of cyber exposures don’t fall into this category. Social media credentials stored in a stolen smartphone are not covered by FCRA or similar protections, for instance. Hackers may also attempt to use a pilfered device to execute social engineering scams, which can include posing as a victim to solicit money from relatives or trying to initiate an electronic funds transfer, a transaction that isn’t covered by federal reimbursement laws. Commercial insurers have already recognized the opportunity to address a business’s full-scale digital risk with fast growing cyber insurance offerings. Now these approaches have been adapted for the home insurance market, enabling carriers to offer family cyber coverage. Rethinking personal lines policy coverage for the digital age Policies that provide family cyber coverage can help pay for the extortion associated with ransomware and similar attacks. Coverage to address system compromise is also gaining traction. It helps victims whose technology
platforms have been attacked, either by a targeted hack or by malware, and who may need assistance restoring everything to working order. The forensics consulting that identifies the source of these exposures and outlines solutions to close existing leaks may also be included in cyber policies. These coverage options may also provide reimbursement for technical assistance. With these updates, conventional personal lines coverage can provide adequate protection for valuable digital assets. Most people don’t know how to respond to cyber bullies, social media hijackers or Internet trolls. Reputational coverage can act like a personal advocate online, clearing away erroneous or negative statements and restoring the victim’s control. In 2017, the insurance market will see family cyber coverage being introduced for the first time that addresses issues such as cyber bullying and protection against online reputational damage. Carriers will be able to respond to these more complex risks, offering coverage, expert support and tools that make a real impact on victims’ lives. Continued page 15
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In the cold world of cybercrime, technical savvy and the human touch are essential components of the next generation of personal lines coverage for these kinds of digital exposures.
Matt Cullina has 15 years of insurance industry management, claims and product development experience. He is the CEO of Scottsdale, Ariz.based CyberScout (formerly IDT911), a consultative provider of identity and data risk management, resolution and education services. Connect with him via LinkedIn.
Beazley Data Breach Information Guide Data Security Risk Management
Chubb CyberSecurity: Insurance for Data Security Breach & Privacy Losses CyberSecurity: ForeFront Portfolio 3.0
Cyber Liability for Agents IIABL Offers 2 new cyber liability programs through Beazley and Chubb. These programs provide IIABL members with coverages designed especially for independent insurance agencies with significant discounted pricing. Independent agents handle a lot of sensitive personal customer information and are potential targets for data breach and cyber liability.
Earn the cyRM designation online! Click here for additional information on how to obtain this designation.
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MARCH 9, 2017
IIABL Spring Education Conference Crowne Plaza—Baton Rouge AGENDA:
IIABL CEO Jeff Albright will be the instructor for a 3 hour Ethics & Business seminar from 9am until Noon.
8am—9am 9am—12pm
Breakfast Session 1 Ethics & Business 12pm—1:00pm Lunch with Exhibitors 1:00pm—4:00pm Session 2 Flood Seminar 4:00pm—5:00pm Cocktail Reception
12pm-1:00pm stay for lunch with our awesome exhibitors.
The session from 1:00pm—4:00pm will feature Selective Insurance’s Gregg Porter with a 3 hour flood seminar which will include the new changes effective 10/1/2016. This is great opportunity to meet the ethics & flood CE requirements for your 2017 birth month license renewal.
Name: Agency:
Address:
City:
Phone #: Microsoft
License #:
Members: Non Members:
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Full Day $180.00
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AM Session $90.00
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PM Session
Full Day $225.00
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AM Session $113.00
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PM Session
Return & make check payable to:
$90.00 $113.00
IASC Attn: Kim Jackson 18153 E. Petroleum Dr. Baton Rouge, LA 70809 225.819.8007 E: kjackson@iiabl.com W: www.IIABL.com
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BIG “I” PRAISES EXECUTIVE ACTION ON FIDUCIARY RULE President Trump directs DOL to cease implementation of misguided rule.
The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) praises action taken today by the Trump Administration calling for the Department of Labor (DOL) to halt implementation of the Obama Administration’s controversial fiduciary rule and undergo a complete rereview of the measure. “The Big ’I’ is grateful to the Trump Administration for standing up and taking action to direct the DOL to halt implementation of the fiduciary rule,” says Robert A. Rusbuldt, Big “I” president & CEO. “The DOL rule places overly burdensome requirements on Big ‘I’ members who offer retirement advice, leaving many insurance agents and brokers struggling to find a way to effectively serve their clients moving forward. President
Trump’s order has come just in time, as implementation of the rule is already resulting in less consumer choice for the middle class.” The DOL rule was finalized in April 2016, but operation of the rule was delayed until April 2017 in order to give the industry time to comply. The rule tightens conflict of interest rules under the Employee Retirement Income Security Act (ERISA) and requires insurance agents and brokers who give guidance about certain retirement investments to adhere to a fiduciary standard of care. "While the association does not necessarily oppose a best interest standard for insurance agents and brokers, the Obama Administration’s fiduciary rule is simply unworkable for many Big ‘I’ members and harmful to many consumers,” says Charles Symington, Big “I” senior vice president of external and government affairs. “The Big ’I’ looks forward to working with the Trump Administration and Congress as the DOL reviews the next steps pursuant to the President’s executive order.”
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IIABL Director of Education, Mike Edwards is your source for technical questions. Contact Mike at medwards65@aol.com or 678.513.4390
Subject: When Is A Specialty or Commercial Policy Needed When You Rent Your Home? Subject: When Is A Specialty or Commercial Policy Needed When You Rent Your Home?
Q.
I am dealing with something of a surreal situation, and would appreciate your thoughts. A local, upscale Bed & Breakfast sustained substantial fire damage over the weekend. (We did not insure it.) It sits on a large lakefront lot, with beautiful landscaping, a rose garden, and is frequently used for outdoor weddings. Present estimates are that it could be closed for 2-3 months.
sonal business, since they did not contact me about this.
A.
In my 30+ years in insurance, I have learned that some days are like a Halloween Fun House, so a “surreal situation” now and then is par for the course! I think you should contact your insureds, since they could need some additional or specialty insurance, possibly available only under a commercial lines policy.
I was reading a follow up article in the local newspaper last evening, and it featured a Happy Ending story about a couple who had booked the entire facility for three days next month for their wedding. They wanted their parents and grandparents to stay in the sleeping rooms, and to have other family members be able to have meals there, as well.
Here are my thoughts on some coverage issues, as well as some recommendations to consider. Coverage form excerpts and comments below are based on ISO (Insurance Services Office) forms. Proprietary forms may be different, especially if their HO coverage is with a High Net Worth-type program.
The couple was able to rent, as a replacement venue, a large house on the other side of the lake, for all 3 days. The surreal part of this situation is that the house is owned by my insureds. This rental was news to me! I had a few chest-pounding moments when I considered all the exposures my insured might face. They have a gorgeous house, with a gourmet kitchen, and high-end furnishings, including a few antiques. In addition, there is a separate guest house on the premises, as well as a boat dock with an enclosed gazebo. The newspaper article said the owners of the home will be out of town during the 3 days their house is being rented.
Issue #1: Liability
Can you give me your comments on how the standard Homeowners Policy handles situations like this? One big concern I have is the $2000 limit in a HO policy on income earned from a business. I have no doubt that the rent on this house for 3 days could be far more than that. Lastly, do you think I should contact my insured? I am a little concerned that they might think I’m poking my nose into their per-
I suspect your first concern was the Business exclusion for Section II. Excerpt:
Homeowners 3 – Special Form HO 00 03 05 11 Section II Exclusions E.2. “Business”
a. "Bodily injury" or "property damage" arising out of or in connection with a "business" conducted from an "insured location" or engaged in by an "insured", whether or not the "business" is owned or operated by an "insured" or employs an "insured". b. This Exclusion E.2. does not apply to: (1) The rental or holding for rental of an "insured location"; Continued page 22 Louisiana Agent 20
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(a) On an occasional basis if used only as a residence; (b) In part for use only as a residence, unless a single-family unit is intended for use by the occupying family to lodge more than two roomers or boarders; or (c) In part, as an office, school, studio or private garage; Comments: (1) The exclusion for business activities clearly applies to a “business” conducted from your insured’s home. [E.2.a.] (2) However, exceptions are provided for three specific rental situations. [E.2.b.(1)(a)(b)(c)] (2) In your insured’s situation, “occasional” rental is exempted from the “business” exclusion. [E.2.b.(1)(a)] (3) A perennial problem with this exception to the “business” exclusion is that the HO policy does not define “occasional.” But if this rental by your insured is a one-off, I think the exclusion is inapplicable.
(4) On the other hand, the term “business” is defined, and one part of the definition that limits business income to $2,000 often trips up those who stop their coverage analysis after reading this provision, without reviewing other sections of the form. This is further complicated by the fact that the definition of “business” is on page 1, while the Section II exclusion, and exemptions, for “business” are found on page 19.
Definitions 3. "Business" means: a. A trade, profession or occupation engaged in on a full-time, part-time or occasional basis; or b. Any other activity engaged in for money or other compensation, except the following: (1) One or more activities, not described in (2) through (4) below, for which no "insured" receives more than $2,000 in total compensation for the 12 months before the beginning of the policy period; Continued page 23
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Comments:
(1) You expressed a concern that your insured’s house would probably rent for more than $2,000 for the 3-days function, which would appear to bring the rental arrangement within the definition of “business,” and thus within the exclusion for “business.” (2) Note, however, that the $2,000 is based on
total compensation for the 12 months before the beginning of the policy period. [3.b.(1)] In other
words, the amount your insured would be paid for this rental event has no bearing on the determination of whether or not such rental is a “business” in his current HO policy. It could, however, be an issue if he has any business income in his renewal policy period. (3) In addition, even if your insured was paid $20,000 for the rental of his house for this wedding event, it would not make the arrangement within the “business exclusion.” See the above discussion on the Section II exclusion for “business.” Occasional rental of the residence is specifically exempted from the “business” exclusion. [E.2.b.(1)(a)] Therefore, the amount of income received is irrelevant.
Issue #2: Household personal property of your insured (Coverage C). One potential exposure I see for your insured is theft of his personal property during the rental. Excerpt:
Homeowners 3 – Special Form HO 00 03 05 11 Section I – Perils Insured Against B. Personal Property 9. Theft
a. This peril includes attempted theft and loss of property from a known place when it is likely that the property has been stolen. b. This peril does not include loss caused by theft: (3) From that part of a "residence premises" rented by an "insured" to someone other than another "insured" Comments: (1) Since members of the wedding party are rentContinued page 24
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ing the entire house for 3 days, there will be no theft coverage for any items of your insured’s personal property stolen during that time. [B.9.b.(3)] (2) Note that this exclusion for theft during the rental period applies without qualification as to who stole the property. It excludes theft by the members of the wedding party, their friends or guests, and, for that matter, a third party who enters the house while no one is there during the rental period. For example, if they go off and leave a door unlocked, and a thief enters the house, your insured’s HO policy will still not cover the theft, as I understand the theft exclusion. (3) The HO 00 05 – Comprehensive Form does not have such an exclusion applicable to theft during a rental. Nor do the ISO Scheduled Personal Property endorsements. Issue #3: Damage to the house (Coverage A) There is no business exclusion applicable to Coverage A.
Issue #4: Recommendations
Recommendation #1: Special Event Policy for your insured homeowner. Comments: (1) While the Section II exclusion for “business” does not apply in this particular situation, that’s not to say that all other potential liability exposures are covered. (2) For example, liquor legal liability comes to the forefront of my mind. Various exposure points exist, including guests’ access to your insured’s liquor cabinet (with or without permission), leading to an inebriated person falling off the dock into the lake, driving drunk, etc. Louisiana’s “host liquor” exemption may or may not apply in this situation, since I think it could be argued that your insured is not acting as a host, but a landlord. See the article linked in the Reference section at the end of this article. (3) With the use of drones growing by leaps and bounds, it would not be surprising that the wedding party will employ a drone to film the wedding and subsequent activities around the grounds. The drone could be used by a family member or guest, or by the Continued page 25
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wedding photographer. Any serious bodily injury claim could certainly include the homeowner as a defendant.
home rental. This insured is going to rent his house to a movie company for about 3 weeks, so they can shoot scenes both inside and outside the house.
(4) In My Perfect Insurance World (MPIW), your insured should consider some sort of Special Event policy. And given that the exposure is based on a rental exposure, it may require a commercial policy.
(2) He and I both agreed that the exemption for “occasional rental” of the residence in the Section II “business” exclusion did not apply to this situation, since the actual exemption applies to rental “On an occasional basis if used only as a residence.” See Section II Exclusion [E.2.b.(1)(a)] above.
Recommendation #2: Special Event Policy for the wedding party, naming your insured as an Additional Insured. Comments:
(3) This insured most likely needs commercial insurance (maybe Special Event Policy), along with some sound legal and risk management advice.
Renting your house for “home sharing.”
(1) I think this would be especially beneficial for the potential liquor exposure, and also the possible Comments: drone exposure. (1) Airbnb is the most well-known home sharing business. The Section II exemption for “occasional rental” is probably not applicable in this endeavor. However, rentIssue #5: Other related exposures. ing one’s house “in part” can be covered under certain conditions. See Section II Exclusion [E.2.b.(1)(b)] Renting your house for a movie shoot location. above. In addition, see the article linked in Reference Comments: section below. (1) The same week I received your question, I got (2) Also, see link to article below on roomers, boarders a similar question from a colleague in another and tenants. state, wanting to brainstorm a situation involving a (3) It is important to note that ISO is currently making filings around the country which will essentially exclude any exposures related to “home sharing.” (4) This ISO filing will also revise the definition of “aircraft” to include what are commonly referred to as “drones,” meaning that there will no longer be an exception for “model or hobby aircraft” under Coverage C or Section II Liability. This filing is not yet adopted in Louisiana. Reference articles. “Rent Your Home for the Super Bowl” “Roomers & Boarders” “Rent Your Home, Void Your Insurance Policy?” “House Sharing and Car Sharing” “Louisiana Liquor Liability Law” These materials are intended for educational purposes only and should not be relied upon as legal advice. Please consult a qualified attorney for legal advice.
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Webcasts E&O Risk Management March 7, March 28, March 30
Ethics February 24, March 16 & March 21
Available on Demand
Available on Demand
Flood March 16
Available on Demand
Commercial & Personal Lines Courses Click above title for courses & dates for 2017 Available on Demand
Seminars IIABL Spring Education Conference March 9, 2017 Crowne Plaza Baton Rouge Flood & Ethics CE
2017 E&O Classes 3/28—Monroe 3/29—Lafayette 3/30—Baton Rouge 3/31—Metairie
2017 Flood Classes 5/9—Bossier City 5/9—Monroe 5/10—Lafayette 5/11—Kenner 5/11– Covington
IIABL Fall Education Conference October 19 Shreveport Convention Center
Events IIABR Company Appreciation Event Scavenger Hunt March 9, 2017 Lava Cantina— Downtown
Trusted Choice Make A Wish Bowling Fundraiser April 20th—New Orleans April 28th—Shreveport, Monroe, Lafayette, Baton Rouge
Young Agents Crawfish Boil
2017 Alvin Shepherd Big “I” Charity Golf Classics
March 24, 2017 Lakeside Daiquiri Baton Rouge
March 10, 2107 Audubon Park
Environmental Strategists (eS) Becoming a certified environmental Strategist™ (eS) will equip you with the knowledge to identify, manage and transfer environmental exposures impacting everyday business.
Cyber Risk Manager (cyRM) Completion of the Cyber Exposures & Insurance – Training for Agents & Brokers course qualifies you to register for the cyRM certification for FREE.
On-Demand Webcasts Masters Series: The Master Series are unique agency management courses from industry experts. in the Masters Series.
CSR Training: The Customer Service Representative is key employee in every agency and is a difficult commodity to find.
Pre-Licensing Online prelicensing 3 optional study packages available Click here for additional information
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Company
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Number of Policyholders:
Changes
Berkley National Insurance Berkley Regional Insurance Tri-State Insurance
16 – Workers Comp
-14.492%
-$376,154
171
New: 5/1/2017 Renewal: 5/1/2017
Ace American Insurance Ace Fire Underwriters Bankers Standard Insurance Indemnity Insurance Co. Insurance Co of North America Pacific Employers Insurance Westchester Fire Insurance
16 – Workers Comp
-11.90%
-$2,606,467
2,028
New: 5/1/2017 Renewal: 5/1/2017
Great Northern Insurance Pacific Indemnity Company Vigilant Insurance Company Federal Insurance Company
4 – Homeowners
+7.5%
+$2,084,674
3,739
New: 2/13/2017 Renewal: 3/30/2017
Accident Fund General Ins Accident Fund Ins of America Accident Fund Ins Company United Wisconsin Insurance
16 – Workers Comp
-6.60%
-$310,889
184
New: 5/1/2017 Renewal: 5/1/207
Employers Ins Co of Wausau Wausau Underwriters Liberty Mutual Insurance Liberty Mutual Fire LM Insurance Corp First Liberty Insurance Corp Liberty Insurance Corp
16 – Workers Comp
-10.50%
-$2,335.807
820
New: 5/1/2017 Renewal: 5/1/2017
American Fire & Casualty Ohio Casualty Insurance Ohio Security Insurance West American Insurance
16 – Workers Comp
-5.50%
-$129,397
388
New: 8/1/2017 Renewal: 8/1/2017
Peerless Indemnity Insurance Netherlands Insurance America First Insurance
16 – Workers Comp
-10.10%
-$172,672
360
New: 8/1/207 Renewal: 8/1/2017
American Interstate Ins Co
16 – Workers Comp
-10.60%
-$2,501,103
917
New: 5/1/2017 Renewal: 5/1/2017
LA Farm Bureau Casualty LA Farm Bureau Mutual Southern Farm Bureau Casualty
19 – Private Passenger Auto
+14.239%
+$32,186,197
227,550
New: 6/1/2017 Renewal: 6/1/2017
Louisiana Agent 27
By: Steve Anderson
An Update on the Optimum Setup for Multiple Monitors in Your Office
I began suggesting that every insurance agency should add a second screen to their desktops over 15 years ago. I could see blank stares from the people in the audience. “Why would we do that?” I no longer need to convince agency owners of the wisdom of having at least two monitors on every desk. Today, the questions I receive revolve around fine-tuning the setup, and how many and what type of monitors is optimum.
I have heard from many agency staff that they have moved from 2 to 3 monitors on their desk. This certainly makes sense for high-transaction positions — typically personal lines and small commercial. These positions often have the need to access multiple carrier websites simultaneously. The additional monitor just makes this that much easier. A word of caution: I hear many staff say that one of the monitors has Outlook open on it all the time. I think this is a mistake. I do not have time nor space in this issue to go into how to best manage your email, but know this: email is already a major distraction and having it visible to you all the time just adds to the problem.
One Big Monitor? The cost of computer monitors has dropped dramatically. So, should you buy one large wide monitor instead of the two or three traditional computer monitors? Is there any inherent advantage of one large monitor over multiple smaller monitors? Unfortunately, the answer is, “it depends.”
Following are some of the questions I receive and my opinion on what might be best for your particular situation, or your office. My disclaimer is that your final decision on how to best set up your desk is ultimately your decision based on your personal preference and what will work best for you.
How Many Monitors? There’s no question in my mind that every desk in your office should have a minimum of two monitors. In addition to desktop computers, any laptop docking stations that you might have set up for temporary employees should have a minimum of two screens. Most laptops sold in the last 18 months have the internal capability of attaching up to three monitors. A docking station simply makes this much easier to accomplish.
I do not like the one large, wide monitor setup. Most people are very comfortable working in Microsoft Windows, and for power users it will take them more time to size, resize, and move open windows around the single wide desktop for maximum efficiency. Also, once program windows are set the way you like them, your desktop will remember those same positions in the future, cutting down the amount of time you need to set up your desktop to work the way you want. The advantage of a multiple monitor setup is that when you maximize a window, it is maximized to the particular monitor where it appears. On a large monitor, the window would maximize to the whole monitor, not necessarily the behavior you would want. Continued page 29
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Desk space might be an issue when you have a three or more monitor setup.
Monitor Stands Monitor stands help to better manage the amount of space required on a desktop. Typically, monitor stands have one upright stand with a horizontal arm where the monitors are mounted. This allows the user to have access to most of the desktop underneath the monitors for additional workspace. Another option is to have a cube (or over/under) monitor setup. I do not especially like this setup because I think the ergonomics of needing to look up at the top monitors may become uncomfortable over time. However, the individual's personal preference should be taken into account.
viewed and read. For example, this monitor setup would allow you to see a full page of the document at one time so you do not have to scroll up and down to read the full document. It is also likely that the page will be larger than life-size, also making it easier to understand. Most agency staff spends hours in front of a computer monitor. Taking some of the suggested steps to enhance the setup of computer monitors further will help improve productivity and, at the same time, reduce ergonomic strains and problems. This is a win for employees and management.
Document Viewing Monitor Another less common option is to use the third or fourth screen as a document display monitor. You can accomplish this by rotating the monitor into a portrait position. The aspect ratio of an 8.5 x 11 piece of paper will fit perfectly to the monitor assuring electronic documents can be more easily
Continued page 30
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Louisiana Agent 30
Commissioner’s Corner
Louisiana Property & Casualty Insurance Markets Update I’m pleased to report that, by and large, the property and casualty markets are trending positively. At the end of 2016, the overall market overall lines of business (private passenger and commercial auto, homeowners, commercial multi-peril and workers’ compensation) saw a rate increase of 3.5 percent. Despite some curve balls thrown by mother nature, we’ve been able to successfully strengthen our homeowners market – adding 22 new insurers in the eleven years since Hurricanes Katrina and Rita. While consumer choice is on the rise, insurer profitability in Louisiana has been below the national average. The Louisiana homeowner insurance industry’s return on net worth (RNW) between 20052014 (-20.1 percent) is the lowest in the nation with the exception of Mississippi (-26.8 percent) –
both of which are far lower than the 10-year average RNW for the homeowners’ insurance market nationally (+7.6 percent) according to the Insurance Information Institute. Needless to say, that reflects our state’s hurricane experience to include Gustav, Isaac and Ike in addition to Katrina and Rita. Additionally, we don’t have to think too far back to understand why insurer profitability in the state is low. The state has been hit with multiple severe rain events that have caused property damage and loss of life. The most recent event just this month was a series of tornadoes that caused widespread damage in southeast Louisiana. This follows the flooding last August which caused billions of dollars of damage to homes and businesses across South Louisiana. We estimate that comprehensive auto claims for private passenger and commercial auto related to the August flood top 65,000 claims totaling $690 million in statewide insured losses. That’s on top of the major flooding we experienced in March of 2016 in 36 parishes – and in several parishes in Continued page 32
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northern Louisiana in spring 2015. Just for the August flood, the NFIP has paid about $2.3 billion resulting from 30,000 claims. That makes it the fourth largest NFIP payout following Hurricane Katrina, Superstorm Sandy and Hurricane Ike. As flood events grow in frequency and severity across the country, it stands to reason that flood insurance, whether through the National Flood Insurance Program (NFIP), surplus lines or admitted private insurers, will be a vital part of our future planning. With the NFIP due to expire on September 30, we are working with Congress to support long-term reauthorization of the program to avoid short-term extensions, while also making changes that encourage more growth in the private market. While many in our state have been hard hit by weather events, the market and rates for homeowners insurance has stabilized. For 2016, the market impact of statewide rate changes was 1.0 percent, which represents the lowest average statewide increase in more than ten years. In 2015, the market impact of approved changes for homeowners was 1.2 percent.
In the private passenger auto market, rates were up 8.9 percent statewide in 2016 while commercial auto rates increased 2.7 percent. Auto rates continue to be driven by loss experience and recent national studies point to increased miles traveled as well as distracted driving as factors in the rise in insurance costs. According to the National Highway Traffic Safety Administration (NHTSA), traffic deaths in the first half of 2016 were up 10.4 percent over first half of 2015. And in 2015, traffic deaths rose by 7.2 percent which was the largest increase in 50 years (the largest percentage increase previously was 8.1 percent in 1966.) And, as with the homeowners market, according to the Insurance Information Institute, Louisiana ranks near the bottom nationally for RNW of private passenger auto insurers, with a 2.2 percent return on net worth. The state only outperforms Michigan (-2.9 percent) as the least profitable state for auto insurers between 2005 and 2014. The national average RNW is 6.2 percent while Hawaii (18.7 percent) is the most profitable for auto and home insurers. Continued page 33
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The most significant rate change in 2016 was in the workers’ compensation market and for the fourth year in a row, rates are on the decline. A statewide decrease of 9.8 percent takes effect May 1, following the previous drop of 2.7 percent last May. Increased competition in our workers’ comp market means companies today are paying nearly 34 percent less for the same coverage as they were 10 years ago – and 50 percent less than they were 20 years ago. There are several reasons for the ongoing decreases including a more competitive market. The amount of companies writing workers’ comp insurance in Louisiana has increased by 29 companies, or 15 percent, since 2007. Improvements in the rate of workplace injuries and the severity of injuries has also led to the decrease. You can find more information about the state of our markets and activities of the LDI in our Agency Snapshot which summarizes our Annual Report. I appreciate the opportunity to continue to work with you in serving the citizens of this great state and to strengthen our markets for a strong and bright future.
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Louisiana Agent 33
GOLD LEVEL
SILVER LEVEL
BRONZE LEVEL
AMERISAFE
AMERICAS INSURANCE
BANKERS INSURANCE
CNA INSURANCE
FCCI GROUP
FOREST INSURANCE
GULFSTREAM P&C
HOMEBUILDERS SIF
LANE & ASSOCIATES
LUBA WORKERS’ COMP
MAISON INSURANCE
MARKEL FIRST COMP
RPS COVINGTON
SUMMIT CONSULTING
EMC INSURANCE
Louisiana Agent 35
IIABL 2016—2017 BOARD OF DIRECTORS & OFFICERS Richard D. Jenkins President Moore & Jenkins Insurance—Franklinton Neil Record President Elect Record Agency, Inc.—Clinton
John L. Beckmann, III Secretary/Treasurer J. Everett Eaves—New Orleans H. Lee Schilling, Jr. National Director Schilling & Reid Insurance—Amite David Dethloff Past President Dethloff & Associates—Shreveport Derek Canchola Young Agent Representative Blumberg & Associates—Baton Rouge Byram H. Carpenter, III Moreman, Moore & Co—Shreveport Brenda Case Lowry-Dunham, Case & Vivien—Slidell Joseph Cunningham, Jr. Cunningham Agency—Natchitoches Donna DiCarlo Riverlands Insurance Services—LaPlace Morris Funderburg Reeves, Coon & Funderburg—Monroe
Ross Henry Henry Insurance Service—Baton Rouge Bret Hughes Hughes Insurance Services—Gonzales Philip McMahon Paul’s Agency—Morgan City Joe King Montgomery Thomas & Farr Agency—Monroe Joseph A. O’Connor, III The O’Connor Insurance Group—Metairie Paul Owen John Hendry Insurance Agency-Zachary Martin Perret Quality Plus—Lafayette David T. Perry Arthur J. Gallagher RMS—Baton Rouge Robert Riviere Riviere Insurance Agency—Thibodaux
Armond Schwing Schwing Insurance Agency—New Iberia Michael D. Scriber Scriber Insurance Services—Ruston Donelson P. Stiel David H. Stiel, Jr. Agency—Franklin
Louisiana Agent 35