POLICY MAGAZINE - Spring 2023

P OLICY

SPRING 2023

Could this be you?

Find out more on page 18

Get Involved, Plug In and Share Your Knowledge

What an exciting time to be in insurance! A group of us just attended the 2023 Big “I” Winter Meeting in Savannah, Georgia. Rest assured our national Association is dedicated to finding out what will help all of our members be better informed, more efficient and prepared for the future.

The conference started with the inaugural Big “I” InsurTech Summit. With the industry changing so fast and the constant dog whistle of new software or services being offered, it is hard to know where and when to jump in. It’s easy to be overwhelmed because even I, as a younger tech-savvy individual, feel like it’s even outrunning me.

The truth to all this advancement is that it’s actually there to make things easier and faster for your agency. Do

One of the items discussed was market access. If you’re a startup agency or just a smaller agency, having market access is a make-or-break situation. If the IIABA was to broaden its Big “I” Markets for the smaller agencies, this could be a very big deal. But for our larger agencies, market access isn’t relative to them at all. So, it was nice hearing all the different takes on many subjects.

yourself and your agency a favor and look into what these companies have to offer. I think you will find that they are not wanting to get between you, your insureds or your companies but are wanting to help all of you work more efficiently together.

The rest of the conference was very productive. We held several breakout sessions designed to dig up new ideas, determine strategies warranting reconsideration, and decide which items just need to be walked away from. The IIABA is a diverse group of small, medium and large agencies, and all of their agency needs are completely different.

I think if you look at all the different services Big I Oklahoma and the IIABA have to offer, you’ll see that they really try and cater to all their members. I have learned it’s not the easiest task to satisfy such a diverse group. One comment that stuck with me from the winter meeting was “We need a homerun to come from this meeting.” That comment best reflects the group as to how important each meeting is. I know a lot of us have been associated with groups over the years and have seen them divided and not organized. We have seen these industries get crushed and left to the whims of the masses. I am involved in several different industries associations. “How can we best serve our members” has been a constant topic across all of them.

I want to encourage our agents to get excited about making their agency and other agencies better. My message to our agents across the state is this. Get involved, plug in and share your knowledge. We all will work better, smarter and more efficiently if we get involved and share what works and what doesn’t in this collective manner. Let’s see what we can accomplish together in 2023!

“I want to encourage our agents to get excited about making their agency and other agencies better.”

For over 75 years, Mid-Continent Group has been committed to providing specialty commercial insurance for the construction industry. Our specialized expertise and entrepreneurial, relationship-driven approach has allowed us to offer solutions which address the unique needs of our agents and insureds.

With roots dating back to 1947, we have navigated other periods of uncertainty and various economic cycles.

Denise Johnson, CISR, CIC BIGiOK President/Chief Executive Officer

Move Forward with YOUR Association!

It’s hard to believe that we are looking for spring! The older I get the faster time seems to move. But saying all of that, there is so much going on with your Association that we can’t help but to move forward.

Our goal as an Association is to make agencies better. As we look to some of our upcoming programs, it’s important for our members to understand the many programs that are available to them as a BIGiOK member.

Technology – As a member of BIGiOK, we have many programs that will assist our members with technology.

• Catalyit – All the agency tech guidance you need in one place. I like to call it the “consumer report” of Insurance Tech. You can research the various technology programs and decide which would fit your agency best. You get the basic subscription as a member of BIGiOK free. Go to catalyit.com for more information.

• ACT (Agent Council for Technology) – This is a program developed from IIABA and will provide our agencies’ technology solutions for your business. All the information on this site is through your BIGiOK membership. You can access more information at independentagent.com/ACT

Education – We make education good for you! It’s important to an agency to have quality education for their agents –BIGiOK can do that!

• Designation Programs – Want to get certified with your CIC or CISR designation? We can assist. Our classes are live or online and will give an outstanding education for anyone in the agency. For more information, check here: BIGiOK.com/designations

• Online Courses! – Check out our calendar for many free options or specialty classes. BIGiOK.com/education

• License Training and New Hire Training – We have something for everyone! If you are needing an employee to get licensed, we have a program with a pass guarantee! OR if you have a new employee and they need to learn insurance lingo, we have the program in our New Hire Training.

• Did I mention that we have scholarships available?

Leadership

• Agency Consulting – Are you wanting your agency to go to the next level? Allow our Agency Opportunities Department to facilitate the staff or prepare a strategic plan. We can help! BIGiOK.com/kolbe

• MyNetwork – Our own Facilitated Mastermind Network for those in our industry. You won’t find a better support system! MyNetworkINS .com

Legislative Advocacy – The Oklahoma Legislature goes into session the first week of February, and we’ll be at the state Capitol to stay in touch. Always feel free to send me a note if you have questions or concerns.

As I said earlier, there are so many benefits of being a BIGiOK member to make your agency better. I would encourage you to explore our website at BIGiOK.com and see the value of your membership.

Wishing everyone the best spring. We look forward to seeing you at our conference, which will be held this year in Branson, Missouri. We are going to have incredible speakers and a lot of networking. It’s not too late to register!

BIGiOK.com/bigexcellence

Remember – the Big I has your back!

OKPac is BIGiOK’s state political action committee. It provides financial support for state elected officials who will provide support for or have shown support of issues affecting the insurance industry and to those who share our business philosophies. Only individuals or partnerships can make contributions to OKPac. Under Oklahoma law, OKPac can accept no contributions from corporations.

2022 Contributors

Wes Becknell*

Stewart Berrong

Travis Brown

Debbie Burton

Jeff Burton

Jerrad Van Coots

Vicky Courtney

Scott Dull

Brett Easton

David Eaton

Eitzen Family Trust

Vaughn Graham

C Ross Harris

Donald Hass

Michael Hood

Denise Johnson

Kasey Jones

Mark Long

Bruce Magill

Pat Mandeville

Mark McPherson

Mike Mosley

Brandy Mullins*

Rob Piearcy

Sara Bradshaw Ray

Kathy Reeser

Jason Riggs*

Michael Ross

Daniel Somers

Joe Strunk

Belynda Tayar

Ryan Teubner

Thrive Insurance

Scott Wiedemann

InsurPac is IIABA’s national political action committee. It pools the voluntary and individual financial contributions of thousands of independent insurance agents to help elect candidates to Congress who share IIABA’s business philosophies. InsurPac is the largest property-casualty insurance industry PAC in the country.

2022 Contributors

Kent Bradford

Mike Cole

Jerrad Van Coots

Sheila Couey

Brett Easton

Austin Greenhaw*

Rich Haverfield

John Hester

Gerald Keeton

Mark McPherson

Chance Morgan

Avery Moore*

Rob Piearcy

Ryan Teubner

Brad Warwick

Tammy Watson

See more information and quantifiable examples of contributions by going to: OKPac - BIGiOK.com/OKPac InsurPac - BIGiOK.com/InsurPac

Market Impact on Agency’s Profit

How a Hard Market Can Impact Your Agency’s Profitability

A hard market is a term used in the insurance industry to describe a period of time when insurance premiums are generally increasing and underwriting standards are becoming more stringent. A hard market may be the result of a variety of factors, including increased claims and losses, rising costs for insurance companies, and increased regulation.

In this environment, an independent insurance agency’s profitability may be impacted in several ways. That impact can be positive for some agencies and negative for others based on how well an agency responds to their customer’s needs.

During a hard market, insurance companies may experience increased commission and fee revenue, provided their customers can withstand the rate increases. This can also occur due to their customers incurring higher claims and losses, which can lead to higher premiums for policyholders. As a result of these increased premiums, independent insurance agencies may find it more difficult to sell policies to potential customers and retain their current customers, as the higher premiums may be less affordable for some consumers. This can lead to lower sales and retention revenue for the agency.

Additionally, during a hard market, insurance companies may also be more selective about the risks they are willing to cover, which can result in a decrease in the number of policies that are available to sell. This can also lead to lower sales and revenue for the agency.

Independent insurance agencies may also face increased competition from other agencies as they try to win business in a challenging market. This can lead to lower profit margins for the agency.

There are several things that independent insurance agencies can do to minimize the impact of a hard market on their agency:

1. Focus on providing excellent customer service: Providing outstanding customer service can help to retain existing clients and attract new ones, even in a challenging market.

2. Build and execute a strong retention strategy: Communicate clearly to your current customers about the market conditions and be proactive in your approach. This is a time when your advice and guidance are key to building a strong relationship with your customers.

3. Diversify the types of insurance products offered: Offering a variety of insurance products can help to mitigate the impact of a hard market in any one specific area. For example, if one type of insurance is experiencing higher premiums due to increased claims, the agency may be able to offset this impact by selling more policies in a different area where premiums are stable or even decreasing.

4. Develop a strong digital presence: In today’s world, having a strong presence online is essential for businesses of all types, including insurance agencies. By improving your website, maintaining an active social media presence, and using digital marketing techniques, agencies

can reach new customers and expand their reach.

5. Look for opportunities to save money: In a hard market, it may be necessary to look for ways to reduce expenses in order to maintain profitability. This could include negotiating lower rates with suppliers, finding more cost-effective ways to advertise, or streamlining operations to reduce inefficiencies. Investments in your agency’s efficiency are key, and those agencies that have made these investments will be well-positioned to perform well in a hard market situation.

6. Consider joining a network: By joining a network an agency can expand the range of products and services offered and increase the number of customers they can serve.

By implementing these strategies, independent insurance agencies can minimize the potential negative impacts of a hard market and continue to operate successfully. Agencies that anticipate and prepare for the changing insurance environment are better equipped to meet the needs of their customers.

By simply having the infrastructure, procedures and foresight to be proactive, they will be able to outperform agencies that continue to operate the way they always have. The ability to be nimble and adjust as the market conditions change will be appreciated by their customers and will serve agencies well in a hard market.

Reprint of Jan. 11, 2023, Agency Focus Blog by Carey Wallace

BIGiOK LEADERSHIP

Chairman

Jerrad Van Coots

Burrows Agency Claremore

Chairman-Elect

Vaughn Graham Jr., CIC

Rich & Cartmill Inc.

Oklahoma City

Treasurer Vicky Courtney Ricketts Fennell & Assoc. Tulsa

Secretary Kathy Reeser VIP Insurance

Edmond

Director at Large Scott Dull

Omega Insurance Agency Choctaw

Company Liaison

Rebecca Easton CompRisk Management Inc.

State Director

Chris S. Floyd, CRM, CIC

Brown & Brown Insurance Pryor

Director at Large Ryan Teubner

Rich & Cartmill, Inc. Oklahoma City

Company Liaison

Meredith Cole

Graham-Rogers Inc. Bartlesville

BIGiOK MISSION STATEMENT

Immediate Past Chairman Stewart L. Berrong, CRM, CIC Ed Berrong Insurance Agency Edmond

Director at Large Rob Piearcy Arnett Insurance Agency Durant

YAC Chairman Ryan Smith

Smith & Sons Insurance Agency Lawton

As the new voice of the independent agents of Oklahoma, BIGiOK promotes and provides education, legislative advocacy, innovative concepts and practical solutions, and community and career opportunities.

ABOUT BIGiOK

BIGiOK is the largest insurance trade association in Oklahoma. With more than 475 independent insurance agencies, we represent nearly 3,000 independent insurance agents and their employees and more than 100 company members. BIGiOK member agencies range in size from one person to some of the largest agencies in the region.

Founded in 1906 as the Oklahoma Association of Local Fire Insurance Agents, BIGiOK is a result of the consolidation of the Independent Insurance Agents of Oklahoma, Inc. (IIAO) and the Oklahoma Association of Professional Insurance Agents (OAPIA) on Jan. 1, 1992.

BIGiOK policy is set by a board of directors elected at the annual conference. Policy is implemented by a professional

staff located in Oklahoma City. BIGiOK’s mission is carried out through a variety of programs designed to enhance the business of independent insurance agencies.

BIGiOK is an active advocate on behalf of independent agents before legislative, regulatory and judicial groups in Oklahoma and at the federal level.

BIGiOK is affiliated at the national level with the Independent Insurance Agents and Brokers of America with offices in Alexandria, Virginia, and Washington, D.C.

BIGiOK is an excellent source of information through POLICY magazine, published quarterly, and the Oklahoma Agent, a monthly newsletter of time-sensitive material for its members.

Beginning Your Insurance Career? You need FILO

If you’re looking to take your new career in insurance to the next level, FILO is a fantastic opportunity to do just that. The Future Insurance Leaders of Oklahoma program provides unique resources to help you excel - think networking with industry professionals, continuing education credits, the chance to develop and maintain leadership and sales skills, and fresh ideas for agency growth. With FILO, you have the chance to expand your knowledge and skillsets with professionals from across Oklahoma. Check out our 2022 Future Insurance Leaders of Oklahoma (FILO) program in

action. This past year we had our biggest attendance yet with 20 participants. We wrapped up our last module in December with our group community service project by volunteering at the Ronald McDonald House, then followed by an outing of bowling at Dust Bowl Lanes in Oklahoma City!

2023 FILO Modules will include:

• Underwriting & Claims

• Sales & Marketing

• Leadership

• Tour at the Oklahoma Insurance Department

• Legislative Update

• Community Service Project

• Toastmasters Presentation Style Class

• & More!

The benefit of Young Agent’s Committee Mentors are a vital part of the FILO program. Each FILO participant will be pared and be welcomed into many networking opportunities with industry professional.

Don’t wait, modules start in April. Find out more at BIGiOK.com/Filo

“Learning that everyone goes through the same struggles was very nice. Step out of your comfort zone, go for it, and achieve your success.”

Brooke Henley, Insurance Producer at Extra Mile Insurance Solutions

“Helps grow confidence as a young agent. I feel much more confident to grow and take on more.”

Blakeleigh Mashburn, Agency Development Representative at Cornerstone National Insurance

Education at BIGiOK

MARCH 2023

March 1: Ethics, Professionalism and E&O: How We Do What We Do (1 Hour of Ethics)**

March 10: Episode 4: Free Friday Ethics Webinar**

March 21: Commercial Casualty 1

March 22: CIC Commercial Casualty

March 24: CISR Commercial Casualty 2

APRIL 2023

April 5: James K. Ruble Graduate Seminar Webinar **

April 14: Episode 4: Free Friday Ethics Webinar

April 19: Cyber Liability & Data Breach: Needs Based Solutions (1 Hour of General CE)**

April 26: CISR Insuring Personal Auto Exposures Webinar **

April 27: CISR Insuring Personal Residential Property Webinar **

MAY 2023

May 12: Episode 4: Free Friday Ethics Webinar**

May 16: CISR Life & Health Essentials

May 17: CIC Personal Lines

May 19: CISR Other Personal Lines Solutions

JUNE 2023

June 7: CISR Elements of Risk Management Webinar **

June 14: Episode 4: Free Friday Ethics Webinar

June 21: CIC Agency Management

JULY 2023

July 14: Episode 4: Free Friday Ethics Webinar**

AUGUST 2023

August 8: CISR Insuring Personal Auto Exposures Webinar**

August 9: CISR Insuring Personal Residential Property Webinar**

August 10: CISR Other Personal Lines Solutions Webinar**

August 11: Episode 4: Free Friday Ethics Webinar**

** NOTE: ONLINE ONLY CLASSES

More information at BIGiOK.com/education

“Are you planning to be with us on April 20-21?” Hurry to bigiok.com/bigexcellence to get registered.

From the Young Agents Committee A Rare Breed of Insurance Professionals

You are in one of two camps. So is everyone you work with. Either you knew you would have a career in the insurance industry, or, like most, you started in the industry by chance or necessity. Among those who pursued a job in insurance, many were “born into it,” myself included. But what about those in this camp with no familial insurance ties? What possessed them? Where did they come from? Do they have an advantage of any kind? How many of these are out there now, looking for their first or next role in this great industry?

From the first day of my internship in underwriting at an Oklahoma City call center for a national exclusive carrier, I’ve been asked how I got into insurance. You probably hear this question from time to time as well. My answer is straightforward: “It’s the family business.” However, when others at the call center, and company reps we work with today – even those in my agency – are asked the same question, the answer is slightly different: “I fell into a position at this carrier/agency.” Or, “I needed a job and tried everything else except for insurance.”

Yet, there is a rare breed out there who had no prior working experience in insurance, and no direct family ties to the industry, but pursued education and training in insurance early on in their life. The motivating factors for these individuals are powerful and pure. They can clearly see the global economic impact, as well as the personal and community impacts of our business. They see the potential for limitless compensation or the stability of the industry, or the flexibility and freedom that so many enjoy. These future titans of industry are coming straight out of high school – even some dropouts are more successful than you might assume

– to get an early start on their insurance careers. Some are using their college years to get a head-start on the principles and terminology we use every day.

My own experience from the University of Central Oklahoma’s Finance – Insurance & Risk Management degree was positive and hugely impactful in my early industry roles. These programs are becoming more and more common at the university level across the country, with the help of Gamma Iota Sigma. But then (10 years ago) and even now, the job opportunities being presented to this young talent are largely from the company side. Now, there is a definite benefit to getting experience in that corporate environment. Their resources are nearly endless for training newcomers and those who are semifamiliar with the industry. Not to mention, surveys of recent graduates consistently show that the office culture that many carriers provide is a major attractant. Our Association’s carrier partners do a fantastic job at this.

We’ve all heard that you don’t hire someone from another agency because you don’t want to bring in their “bad habits.” That always sounded so arrogant to me, but not without some spark of truth. If you take a firm stance on not hiring someone from inside the industry, you may be interested in hiring someone with a foundation of insurance education and training them to fit your agency’s style. So how do we present the IA channel opportunities to this group?

Like everyone on the BIGiOK Board, I believe that this Association must work together to attract this young talent to opportunities on our side of the business. If you’d like to be involved in that conversation, I’d be happy to take your call.

Ryan Smith

Young Agents Committee Chairman

From the State National Director

What Is Insurtech?

Insurtech refers to the use of technology to improve and innovate in the insurance industry. This can include a wide range of applications, such as digital platforms for the purchase and management of insurance policies, data analytics and artificial intelligence (AI) for underwriting and claims processing, and the use of IoT (Internet of Things) devices for risk assessment and prevention. Insurtech also includes the use of blockchain technology in insurance. Insurtech companies aim to provide

examples of how independent agents and brokers are incorporating Insurtech include:

• Using online platforms and apps to more efficiently gather and process client information and provide quotes

• Utilizing data analytics to better understand customer needs and preferences, and to identify new sales opportunities

• Implementing digital tools to automate and streamline back-office processes, such as policy issuance and claims handling

• Offering digital self-service options for customers to purchase and manage their policies online

consumers with more convenient, transparent and personalized insurance products and services. They also help insurance companies, agents and brokers to streamline their operations, reduce costs and become more efficient.

Some examples of Insurtech include:

• Digital insurance platforms that allow customers to compare and purchase insurance policies online

• Telematics-based auto insurance, which uses data from connected devices to track driving behavior and adjust premiums accordingly

• Healthtech, which uses technology to improve the health care experience and reduce costs

• Digital claims management and fraud detection solutions

• SEMCI – Single Entry Multi-Carrier Interface quoting

With the rise of Insurtech, many independent agents and brokers are finding new ways to use technology to improve their business operations and better serve their customers. Some

• Incorporating virtual and augmented reality technology to enhance the customer experience, such as by providing virtual tours of properties being insured

Although many challenges and changes lie ahead, Insurtech is providing independent insurance agents and brokers with new tools and opportunities to improve their business operations and better serve their customers.

The Big I hosted an Insurtech Summit in January at the Big I Winter Conference. It is becoming apparent that this is a rapidly evolving field and is expected to have a major impact on the insurance industry in the coming years.

The BIG QUESTION is: What role will the independent agent play in this? The Big I will continue to educate its members and advocate on behalf of its members as Insurtech becomes an everincreasing part or our industry.

Want more information regarding technology solutions for your business? Start here: independentagent.com/ACT

Chris Floyd, CIC, CRM State National Director

Insurtech is providing independent insurance agents and brokers with new tools and opportunities.

From Strategic Initiatives Could This Be You?

Sara Bradshaw Ray, CIC, CKC BIGiOK Senior Vice President of Strategic Initiatives

For many of us, this toy is a blast from the past. Originally released for Christmas 1965, the Shape-O was designed to teach kids the meaning of the idiom “square peg in a round hole” at a young age though the lesson is still valuable today, at any age.

I’ll bet you’ve never considered how the Shape-O is just like our organizations. Just like this timeless child’s toy with its varied shaped holes and corresponding pegs, our offices follow the same theme, only with different names. Just like the rectangle, triangle, oval holes in the Shape-O, we, too, have holes/slots called Account Manager, Producer, Principal, etc. Each has its own unique “shape” and the corresponding

“peg” that fits beautifully. With each synchronized hole/peg combination, everything operates like well-oiled machine.

Then, one day we discover an empty round spot in our organization, and we embark on a search to fill that round-shaped vacancy, and the flood of resumes begins. As we expect, a round resume arrives, then a trapezoid, an octagon, even a star – and we think how fortunate we are to get such varied response to our job posting. Then Mr. Square resume arrives. Wow – Mr. Square has had incredible square experience with an amazing square book of business and even more impressive squareshaped clients! Before we know it,

we’ve shared Mr. Square’s resume with a colleague, coupled with statements like “I know we need to fill a round opening, but look at this guy’s incredible square resume; surely, he can do the round-shaped job.” Then to another we say, “he’s young and resilient; I bet he can transition to the round-shaped needs of this position,” and we offer Mr. Square the round job and he takes it.

Everything back in our world is again synchronized masterfully, or so we think until a big roundshaped challenge occurs with Mr. Square. Maybe it’s a round ball that got dropped, perhaps a round claim that’s not covered, or a round miscommunication that “hits the fan,”

and we begin to say things like “well, he just wasn’t committed” or maybe “he’s just not a team player.”

Sometimes those things are true, but more times than not when I’m helping an agency trouble-shoot a situation like this, I find it’s really a problem of their own making because they’ve tried to cram a “square peg in a round hole”! For a little while we can try to get that square peg to fit or even just balance perilously in the round slot, but over time it’s just not going to be successful.

For several months now, we’ve been coming alongside a number of agencies, organizations and individuals to help them identify the shapes of the positions and people

who make up their own unique version of the Shape-O. Trendsetter Avery Moore, third-generation owner of ECI Insurance, was one of the first to leverage the power of the Kolbe Strengths™ tools and training to help her team identify their innate strengths to increase individual productivity, align the agency talent with appropriate roles, build her team with the right chemistry for high performance as well as plan for future agency growth.

“I’ve known the value of Kolbe strengths awareness for a while now, but it wasn’t until we went through the workshop together as a team that I realized how integral it is to quality communication, team synergy, and

even how we recognize potential for and how to handle conflict,” Moore said.

You no longer have to get caught in a “square peg in a round hole” situation. The Kolbe Strengths™ team at Big I Oklahoma is here to help you. We have the tools to identify individual strengths, look at team synergy, even plan for future perpetuation and growth. We’re already helping many individuals, agencies and other organizations with all of these needs and more. Let us know how we can help you, too!

To learn more, contact me at Sara@ BIGiOK.com. I can’t wait to talk with you about how you can leverage the Kolbe tools in your organization.

Trust Accounting

In insurance, sometimes we like to think it’s as simple as understanding our insureds, their risk profiles, and making sure they have the right coverage for their needs. There is a lot more to it, but the nuances of insurance feel endless sometimes.

In this blog*, we will dive into one of the more overlooked aspects of operating your agency in a fiscally responsible way: Trust Accounting.

As an agency owner, there is so much more to running your business than just selling insurance. You are also focused on building the right team, training them appropriately,

focusing on marketing, keeping your pulse on financials and implementing the right technologies, and managing the various ways you engage with carriers and brokers – just to name a few things that might keep you up at night.

All of these areas require careful thought and planning, but some areas tend to be overlooked, like Trust Accounting. This is an area that is hardly ever talked about so many agency owners have no idea what trust accounting is, why it is important, and how to best position their agency until it is too late.

What is Trust Accounting?

For starters, let’s define trust accounting, and then we can get into the details that you as an agency owner need to know. Trust Accounting, or Account in Trust, defined by Investopedia, refers to any type of financial account that is opened by an individual or company and managed by a designated trustee for the benefit of a third party per agreed-upon terms.

A basic example would be a parent who can open a bank account for the benefit of their child and stipulate

rules as to when the minor can access the funds or assets in the account as well as any income they generate. In most cases, the trustee who manages the funds and assets in the account acts as a fiduciary, meaning the trustee has a legal responsibility to manage the account prudently and manage assets in the best interests of the beneficiary

In the insurance context, an example would be if an insured (third party) pays for their insurance policy in full, sending the entire premium payment to the insurance agency (trustee). The insurance agency is then responsible to ensure the insurance company receives the insured’s payment minus any commission that is owed to the agency, so the insured’s policy is in force. This arises in any situation where the agency bills the customer directly. The amount of agency bill business can vary greatly from agency to agency depending on the insurance marketplace, the type of business that the agency writes, and the particular carriers and brokers that the agency has access to through their direct appointments or partner relationships.

Why is Trust Accounting important?

While trust accounting sounds simple in practice, scaling up and tracking agency bill transactions without the right processes in place gets difficult. Agency bill transactions can become difficult to track if the right processes are not in place.

Remember, as the insurance agency, you are the fiduciary of your client’s policies from a financial standpoint. When payments are late from your clients or a policy cancels, headaches start to creep in and carriers come knocking for their premium dollars. If an agency does not keep close track of transactions – or even worse, combines the agency funds with the funds that are being held on behalf of the carrier – the agency can quickly become “out of trust,” meaning that the agency does not have enough funds to pay the carrier the amount

that is due and it will be difficult to unravel the mess.

How can you best position your agency?

Here are the key things you need to do to stay in trust and avoid any unnecessary issues in maintaining your accounting records:

Open a separate Trust Account. This account is where you will deposit all of your agency bill receipts. By having a separate account, you can easily track the agency bill accounts and keep track of the funds that you must remit to the carrier related to these accounts. This will also limit the transactions that will need to be reviewed if a problem occurs making it easier to reconcile.

Create clear processes and procedures. The people who are involved with receiving income in the agency must have a clear understanding of what distinguishes agency bill and direct bill and how to manage the different types of income that is being collected by the agency. You will need to outline the receipts that can be deposited in the operating account as well as those that must be deposited in the trust account. For those receipts where the correct deposit account is uncertain, establish a clear process on how to resolve these questions. Providing clear guidelines on how to manage agency bill and direct bill income will minimize errors and ease the process of reconciling accounts.

Limit access to the operating account and trust account. Do not allow anyone who does not have a clear understanding of these processes to have access to the accounts. It is important to note that a CPA or accounting firm most likely will not understand the trust accounting rules that are unique to an independent insurance agency, so the agency owner needs to make this clear from the beginning of any new accounting relationship.

Be consistent. Reconcile each account and ensure that the carriers are paid the portion that is owed to

Trust Accounting

them. Once that has been completed, you can calculate the amount that the agency can keep for each of the policies. Once a month, move the agency’s money into its operating account, being sure that you have clear documentation for each account that makes up the total amount being transferred each month. Adopting this process will allow you to limit the number of transfers with a limited number of transactions to research if there is ever a problem.

Documentation is key. Clear records of how you reconciled each customer account is critically important. This will be essential if your agency is ever subject to an audit and ensure that the process goes smoothly.

There are a lot of things to consider when setting up the policies and procedures that you will follow to ensure that your agency is wellprotected and remains financially sound. Agencies that have clean financial statements and wellthought-out policies and procedures are much better positioned in both internal and external ownership transitions than those that have messy books and questionable liabilities, so not paying attention to this can be very costly for some agencies in more ways than one.

Trust Accounting is one of those areas that is not often talked about but can cause a great deal of issues if it is not managed properly. We have highlighted some of the key steps you can consider implementing to ensure that your agency stays in trust. We encourage you to dive deeper.

* Agency Focus Blog originally released Jan. 11, 2023, by Carey Wallace and Chris Peabody.

From the State Insurance Commissioner

How OID’s MAP Can Help

Medicare fraud is one of the most serious threats to the health and wellbeing of elderly and disabled individuals who depend on the Medicare Trust Fund. Every year, Medicare loses approximately $60 billion due to fraud, errors and abuse. Medicare fraud can happen anywhere and hurts us all. Whether you’re on Medicare or not, everyone pays the price with higher insurance payments and medical services and equipment costs.

Some examples of Medicare fraud include:

• A provider that bills Medicare for services or supplies they never gave you, like charging you for a visit you never had or a back brace you never got.

• A provider that charges Medicare twice for a service or item you only got once.

• A person who steals your Medicare number or card and uses it to submit fraudulent claims in your name.

• A provider who bills Medicare for a service that is reimbursed at a higher rate than the service that was provided.

How You Can Help

• Review your Medicare Summary Notices and Explanations of Benefits. If you see any charges you don’t understand, contact the provider, and ask them to explain them. If the charges are incorrect, make sure the providers correct the error.

• Report fraud. If you know or suspect someone is committing Medicare fraud, you can report it to the Medicare Fraud Hotline at 1-800-HHSTIPS (1-800-447-8477).

• Protect yourself. Make sure you protect your Medicare card and number. Don’t give it to anyone you don’t know and trust.

• Be aware. Be aware of the services you are receiving and make sure you get the care you need. Don’t be afraid to ask questions or get a second opinion. Be proactive. Take the time to understand your rights and responsibilities as a Medicare beneficiary. Educate yourself about your policies and call your agent if you have any questions.

How Oklahoma Medicare Assistance Program (MAP) Can Help

The MAP division at the Oklahoma Insurance Department is funded by the State Health Insurance Assistance Program and the Senior Medicare Patrol Grant from the Administration for Community Living. MAP provides a variety of much-needed services for Medicare beneficiaries.

MAP helps educate Oklahomans about Medicare and other senior health insurance issues, whether through group presentations or one-on-one assistance. This division provides accurate and objective counseling, assistance and advocacy relating to Medicare, Medicare supplements, Medicare Advantage, longterm care, Medicare fraud prevention, and other related health coverage plans for Medicare beneficiaries, their representatives or people who will soon be eligible for Medicare.

MAP can also assist beneficiaries if they suspect potential Medicare fraud but aren’t sure what to do. A MAP counselor can help review the situation and provide guidance to beneficiaries, such as contacting the provider, notifying CMS or helping them file a report that’s submitted to the Health and Human Services Office of Inspector General.

One of the MAP’s most valuable services is providing unbiased, one-on-

one counseling at no cost. In addition, the MAP counselors provide trusted Medicare education to help Oklahomans understand their policies and make the best choice for their Medicare needs. All services are unbiased and confidential and can be done in person, by telephone or virtually.

Some success stories from counseling sessions include:

• A man had enrolled in a Prescription Drug Part D plan but hadn’t reviewed it in years. An unbiased counselor helped identify a plan for him that brought his estimated annual costs down from $720 to $220, a savings of almost $500.

• A client recently diagnosed with cancer needed some very critical but expensive medications. This person met with a trained counselor who switch them to a plan that brought the annual estimated drug costs down by more than $14,000.

• A 71-year-old woman was still working because she believed that was the only way she could afford her prescriptions and food. After a session with a MAP counselor, she realized that if she retired, her income would be at a level that would allow her to qualify for a program that would pay

Glen Mulready State Insurance Commissioner

Newsmakers

INSURICA Receives Top Agent for the Future Award

In December, Liberty Mutual and Safeco Insurance announced the 2022 Agent for the Future Award winners, which saw Big “I” members secure a clean sweep across the six categories.

The award celebrates agencies that are leading the way into the future. The 2022 winners are making data-driven decisions to improve their agencies, giving back to their communities, using technology to drive efficiency and more.

Named as Outstanding Agency

Overall was INSURICA. In the last few years, INSURICA has focused on harnessing the power of data to drive innovation.

“Evaluating data is essential for companies to push the needle forward in their industry and beyond,” INSURICA representatives wrote in the agency’s AFTF Award application. “Data is used to

make informed business decisions about a company’s present status and future direction.”

The agency also developed an in-house artificial intelligence robot to perform routine account-processing tasks, a digital revenue engine that generates sales through customer relationship management and automated marketing,

and a data-backed, industry-specific risk assessment to offer insights to their commercial clients and prospects.

This is the fifth iteration of the Agent for the Future Awards, which have honored the most future-thinking, growth-focused independent insurance agents and agencies. Congratulations to all the 2022 Agent for the Future Award winners!

The Arrow Group, Jordan Barnett Agency Partners with Combine Agents of America

Combined Agents of America, a privately held aggregator group based in Austin, Texas, recently announced the additions of two new partner agencies from Oklahoma to the organization. The group will now comprise 94 agencies across nine states and represent over $2 billion in total P&C written premium.

The Arrow Group, based in Broken Arrow, and Jordan Barnett Agency, based in McAlester, are the new agency members in Oklahoma. The two agencies have over 175 years in business combined and are composed of well-

respected teams of insurance professionals.

Founded in 1997, the mission of Combined Agents of America, LLC, is to strengthen the independent agency system through profitable growth with quality, stable insurance companies while providing unsurpassed service and a wide variety of products for its clients. Over the last several years they have consistently been ranked as a Top 10 agency partnership by Insurance Journal magazine.

Rich & Cartmill, INSURICA on Best Places to Work Listing

Congratulations to Rich & Cartmill and INSURICA for making the Business Insurance Best Places to Work 2022 listing, which recognizes employers for their outstanding performance in establishing workplaces where

In Memoriam

Former IIAO (now Big I Oklahoma)

Board of Directors Chairman (1970-71)

Richard David Teubner, Tulsa insurance executive, passed away Dec. 14, 2022, in Plano, Texas, after a brief illness.

A Tulsan for most of his life, Dick earned his bachelor’s degree in business administration-accounting from the University of Oklahoma, where he met, and later married, Barbara Johnson.

The couple spent their first few years of marriage in the Panama Canal Zone, where Dick served as a lieutenant in the U.S. Air Force, assigned to the Auditor General’s office. This plush assignment, during wartime, came as a direct result of Dick’s befriending an older student at OU, a student who, unknown to Dick, happened to be a high-ranking Air Force officer. This man so appreciated Dick’s kindness that he eventually paid Dick back with an amazing assignment.

While Dick initially planned to attend law school after his military service was complete, he returned to Tulsa with a child on the way and an ailing father who wanted them to start a business together. They formed a small property and casualty insurance agency, which later merged with Rich & Cartmill, now the largest agency of its type in

Oklahoma. Dick served as president of Rich & Cartmill from 1975 to 2001, later as chairman, and ultimately chairman emeritus.

Dick was thoroughly involved in the insurance industry, working at the local, state and national levels. In 1983, he was honored to be chosen to serve as president of the Independent Insurance Agents of America. In 1988, Dick received the Woodworth Memorial Award, the highest award that can be given by the national organization.

Locally, he also served as president of the Family & Children’s Service (1963) and of the Will Rogers Rotary Club (1965). In his retirement years, Dick became a member of the board of directors of Delta Dental of Oklahoma and served as the board chairman from 2007-2010.

He also enjoyed many years serving the city he loved as a Tulsa International Airport ambassador. As a mere volunteer, he was once chosen the airport’s “Employee of the Month” for the extraordinary assistance he provided a traveler. His puzzled response was, “I was just doing what I thought I was supposed to do.” Dick was an active member of First Presbyterian Church, as well as the Will Rogers Rotary Club.

employees can thrive, enjoy their work and help their companies grow.

Rich & Cartmill was listed in the Small Employer Category (25 to 249 U.S. employees). INSURICA was listed in the Medium Employer Category (250 to 999 U.S. employees).

YES WAY.

From time to time we meet a Big “I” member who hasn’t yet learned about the market access solutions available through Big “I” membership. After hearing about our stellar product lineup and competitive commissions, the reaction can often be summed up as, “No way!” But we assure you–yes way.

Big “I” Markets, featuring Big “I” Eagle Agency, has been working with our member agents to make insurance magic since 2002. As part of your national association, it’s our mission to bring you the best solutions to help your agency thrive. We know you because we are you. Find out how to plug into the power of cyber, affluent, bonds, umbrella, standard & non-standard personal lines, and small commercial today.

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