Wisconsin Independent Agent | May 2021 Magazine

wisconsin INDEPENDENT AGENT MAY 2021

Introducing Catalyit All the agency tech guidance you need... in one place.

UFG Insurance celebrates 75 years In celebration of our 75th anniversary, we at UFG reflect on all the people who have had a hand in our success over the years. After all, our company was founded on the belief that the insurance business is a people business — and that remains at the heart of who we are today.

As we begin our next 75 years, we give our most humble thanks to our independent agents. We owe our success to you.

UFG INSURANCE | 118 Second Avenue SE, Cedar Rapids, Iowa 52401 | ufginsurance.com | 800-332-7977 © 2021 United Fire & Casualty Company. All rights reserved.

CONTENTS wisconsin INDEPENDENT AGENT

COVER STORY: Introducing Catalyit

Catalyit was founded by a group of people who believe in you and the work that you do with the understanding that your time is valuable, and resources are limited. Catalyit wants you to be able to focus more on what you do best and take the stress and pain that technology can cause you, away.

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INSURANCE BARTENDER...........................................................4-7 Introducing Catalyit

RISKY BUSINESS.............................................................................10-11

INDEPENDENT INSURANCE AGENTS OF WISCONSIN 725 John Nolen Drive Madison, Wisconsin 53713 Phone: (608) 256-4429 Fax: (608) 256-0170 www.iiaw.com

2020-2021 EXECUTIVE COMMITTEE President:

Darrel Zaleski | Spectrum Insurance Group, Eau Claire

President-Elect:

Marc Petersen | American Advantage - Petersen Group, New Berlin

Secretary-Treasurer:

Nick Arnoldy | Marshfield Insurance Agency, Inc., Marshfield

Chairman of the Board:

ADA Compliance and Website Accessibility - What’s the Big Deal?

Chris Costakis | Midwest Insurance Group, Delafield

NEW TO THE TEAM.......................................................................14

State National Director:

Meet Laura Pitsch, Agency Accounting Specialist

Steve Leitch | Leitch Insurance, River Falls

FINANCE............................................................................................16

2020-2021 BOARD OF DIRECTORS

Positive Pay Could Protect Your Agency From Fraud

Mike Ansay | Ansay & Associates, Port Washington

AGENCY OPERATIONS................................................................18

Mike Harrison | R&R Insurance Services, Inc., Waukesha

Remote Onboarding Mistakes (& How to Avoid Them)

Aaron Marsh | Marsh Insurance Services, Inc., Rice Lake

ERRORS & OMISSIONS................................................................20

Joanne Lukas Szymaszek | Johnson Insurance Services, LLC, Racine

Legal Action Against the Insurance Carrier: What is the Agent’s Responsibility?

GOVERNMENT AFFAIRS.............................................................23

Dan Lau | Robertson Ryan & Associates, Milwaukee Chad Tisonik | HNI Risk Services, LLC, New Berlin Andrea Nelson | Unisource Insurance Associates, LLC, Wauwatosa

New Chart Reveals Where Wisconsin Gets its Money

Jonathon Zwettler | Baer Insurance Services, Middleton

VIRTUAL UNIVERSITY.................................................................28-29

IIAW Staff

A Year in Review: COVID-19 Business Interruption Coverage Disputes

MEMBERS IN THE NEWS..............................................................32-33 COMMENTARY FROM COUNSEL...............................................34 Surprise! New Disclosure Requirements for Employee Benefits

FOOD FOR THOUGHT....................................................................35

Matt Banaszynski | Chief Executive Officer 608.256.4429 • matt@iiaw.com Mallory Cornell | Vice President and Director of Risk Management 608.210.2975 • mallory@iiaw.com Kim Kramp | Association and Agency Accounting Manager 608.210.2976 • kim@iiaw.com

ADVERTISERS INDEX

Trisha Ours | Director of Insurance Services 608.210.2973 • trisha@iiaw.com

AAA......................................................................11 ACUITY...............................................................28 Badger Mutual Insurance............................35 Berkshire Hathaway GUARD....................9 IMT........................................................................36 JM Wilson..........................................................27 Keystone............................................................22 Robertson Ryan & Associates...................7 Secura...................................................................12 Security Financial Bank................................17 Society Insurance............................................19 UFG........................................................................2 West Bend..........................................................21 Western National............................................24

Evan Leitch | Technology and Risk Advisor 608.210.2971 • evan@iiaw.com

Kaylyn Zielinski | Marketing and Communications Coordinator 608.210.2977 • kaylyn@iiaw.com

Andrea Michelz | Membership Engagement Coordinator 608.210.2972 • andrea@iiaw.com Diana Banaszynski | Education Coordinator 608.256.4429 • diana@iiaw.com Laura Pitsch | Agency Accounting Specialist 608.256.4429 • laura@iiaw.com Wisconsin Independent Agent is the official magazine of the Independent Insurance Agents of Wisconsin (IIAW) and is published monthly by IIAW 725 John Nolen Drive, Madison WI 53713. Phone: 608.256-4429. IIAW does not necessarily endorse any of the companies advertising in publication or the views of the writers. IIAW reserves the right, in its sole discretion, to reject advertising that does not meet IIAW qualifications or which may detract from its business, professional or ethical standards. © 2021 For information on advertising, contact Kaylyn Zielinski, 608.210.2977 or kaylyn@iiaw.com. wisconsin INDEPENDENT AGENT

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Introducing Catalyit The IIAW is a proud co-founder and investor of Catalyit.

We simplify technology for insurance agencies. Catalyit gives you all the agency tech guidance you need...in one place.

The number of ways you can leverage tech to increase profits and serve customers is nearly unlimited. But time, know-how, and fear of risk are getting in the way.

Catalyit solves it for you.

See how Catalyit can help you thrive by visiting:

Catalyit.com Sign up today and receive a FREE download of our Top 10 Tech Tips!

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wisconsin INDEPENDENT AGENT

INSURANCE BARTENDER

FAILURE WE CAN DO ALONE. SUCCESS ALWAYS TAKES HELP! The all-inspiring Simon Sinek asks, “How do you explain when things don’t go as we expect, or how do you explain when others are able to achieve things that seem to defy all of the assumptions?”

For example, how are some insurance agencies so innovative? How do they seem to thrive, grow and expand at a pace that is greater than the vast majority of others? Why do they appear to have something different?

If you ask someone why their product, service or company failed, people will always give the same three answers: 1.

Under capitalized 2.

The wrong people/employees 3.

Bad market conditions Simon, in one of his famous Ted Talks asks, “Why is it that the Wright brothers were able to figure out controlled, man-powered flight?” When there were other teams who were better qualified to achieve man-powered flight, better funded and all around better equipped, the Wright brothers beat them to it. Simon goes on to discuss that there is something bigger at play.

He codified it in his very simple, yet revolutionary idea titled the Golden Circle and the theory, “Start with Why”. This theory explains why some organizations are able to inspire where others aren’t.

Photo Courtesy: Smart Insights

You see, people do not buy what you do, they buy why you do it. What is your purpose? What is your cause, your belief? Why does it exist and why should anyone care?

As an independent agent, you should strive to do business with people who believe what you believe. Insurance is vital to one’s economic security and that you are not just selling them an insurance policy, but peace of mind. Price is not a determining factor in what policy they purchase. What drives the decision is the superior coverage, the value of working with an independent agent and the ancillary benefits the insurance company offers. How all of these factors come together to support their American dream is what drives the passion within the industry. wisconsin INDEPENDENT AGENT

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When it comes to hiring individuals or companies to work for you, your goal should be to not just hire people who need a job, but to hire those who believe in what you believe as it relates to the products and services you sell and offer.

Simon Sinek says, if you hire people just because they can do a job, they will work for your money, but if you hire people who believe what you believe, they’ll work for your dream.

Nowhere else is there a better example of this than with the Wright brothers. In Simon’s famous talk, he goes on to tell a story of Samuel Pierpont Langley. Samuel was given $50,000 (which was a lot of money back in the late 1800’s and early 1900’s) by the United States government to figure out and create a flying war machine or airplane.

He had, what everyone would assume to be, the recipe for success. He was well capitalized, had access to some of the best and brightest minds money could afford and the perfect market conditions to achieve their intended objective.

How come very few people today have ever heard of Samuel Pierpont Langley?

That’s because two brothers, Orville and Wilbur Wright, beat him to it. You see, the Wright brothers didn’t have any money, not a single person on the Wright Brothers’ team had a college education. The difference was that Orville and Wilbur were driven by a cause, by a purpose, by a belief.

That if they could develop this flying machine it would change the course of history. Those around them believed in the same cause driven by the same belief. Samuel Pierpont Langley was driven by the pursuit of fame and fortune and so were the people around him. The people who believed in the Wright Brothers did so with blood, sweat and tears and not for the paycheck.

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As a result, on December 17, 1903, the Wright Brothers took flight and very few people were there to experience it. The irony is that on December 17, 1903, Samuel Pierpont Langley quit. He wasn’t getting rich or famous as he had hoped so he quit.

Simon finishes this story be saying if you talk about what you believe in, you will attract those that believe in what you believe, whether that be your customers or employees.

Here at the Independent Insurance Agents of Wisconsin, we co-founded Catalyit with the belief that we were founded for you, to support you, and to work for you with blood, sweat and tears!

We understand that working hard for something we don’t care about is called stress but working hard for something we love is called passion. We are enthusiastic towards seeing you succeed and to help you pursue a sustainable competitive advantage for your agency and its employees.

We understand why you do what you do, why your customers respond the way that they do to what you do, and why your employees and coworkers are loyal to you.

At Catalyit we don’t just understand your why, we want you to spend more time finding your why, growing your why, and to come together with others that want to see you, your agency, and your employees/co-workers be successful.

Catalyit was founded by a group of people who believe in you and the work that you do with the understanding that your time is valuable, and resources are limited. Catalyit wants you to be able to focus more on what you do best and take the stress and pain that technology can cause you, away.

Catalyit is more than a company. It’s an enlightening experience that simplifies technology for insurance agencies because with the right tech, agencies will thrive and that is exactly what we are going to help you do.

We believe that with the right experts, solutions, training and community, we can come together to help your agency increase profit, improve its customer experience, cultivate its ethos among its employees all while digitally transforming itself.

In a world dominated by a lot of Samuel Pierpont Langleys - be the Wright Brothers and let Catalyit help you take flight. > Matt Banaszynski CEO of IIAW

Matt’s Mixology

Easy Access

This recipe should be the official cocktail for Catalyit because easy access to tech solutions is what Catalyit is all about.

Ingredients

• 0.75 ounces orange liqueur • 0.75 ounces vanilla vodka • 0.25 ounces peach schnapps • 0.25 ounces triple sec • 0.25 ounces amaretto almond liqueur • Top with orange juice

Directions

1. Mix alcohol ingredients, ice and OJ in a bar tin, strain & enjoy!

Recipe Courtesy of Mixed Drink Lab

wisconsin INDEPENDENT AGENT

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Agency Solutions TRUSTED CONSULTING FOR THE INDEPENDENT AGENT

We know how important it is for you to succeed in business.

The IIAW has created a portfolio of solutions built just for you.

OPERATIONAL EVALUATION Evaluate agency workflows and operational procedures with a customized plan for your agency

VISIT IIAW.COM/AGENCYSOLUTIONS TO START YOUR FREE PERSONALIZED EVALUATIONS.

Explore other Agency Solutions evaluations:

TECHNOLOGY

STRATEGIC

FINANCIAL

MARKETING

Questions?

Contact Mallory Cornell IIAW Vice President mallory@iiaw.com 8 | MAY 2021 |

wisconsin INDEPENDENT AGENT

AmGUARD • EastGUARD • NorGUARD • WestGUARD

Homeowners Insurance

Recognizing that the typical insurance needs of homeowners have changed over the years, our Homeowners products have been designed for all kinds of circumstances. We cover: Single-family homes & multi-family dwellings Condominium units Renters and lessors/landlords Home-sharing services Browse all of our products at www.guard.com

APPLY TO BE AN AGENT: WWW.GUARD.COM/APPLY/ Our Homeowners Insurance is not available in all states. Please refer to www.guard.com/states for state availability.

RISKY BUSINESS

ADA COMPLIANCE AND WEBSITE ACCESSIBILITY – WHAT’S THE BIG DEAL? You may have noticed the recent buzz surrounding ADA and Fair Housing Act (FHA) violations as it relates to website accessibility requirements. Law firms in Florida, California, Colorado and Massachusetts have been targeting insurance agency websites for ADA or FHA violations. Different law groups will send demand letters looking for quick financial compensation for the allegation that the website is not meeting federal accessibility guidelines.

In the past couple years, insurance agency websites have been brought into the mix. The attorneys are looking for a quick settlement outside of a court for violating the ADA or FHA guidelines. An important fact to point out is that zero of these cases have been decided in a court of law and very few turn into a lawsuit. However, that doesn’t mean they won’t be in the future; it just means there is no case law surrounding this issue.

So you may be wondering, what is ADA website accessibility? Well, nobody knows as there is no case law and no legislation regarding website accessibility rules and the American’s with Disabilities Act was created before the internet 10 | MAY 2021 |

wisconsin INDEPENDENT AGENT

was a thing.

All that is known is that the ADA applies to websites.

While there are no clear accessibility guidelines, the generally accepted level of care to follow is the Web Content Accessibility Guidelines (WCAG). WCAG 2.1 is the most recent version to follow. These guidelines have the goal of making web content perceivable, operable, understandable and robust.

The issue with WCAG 2.1 is that to be 100% compliant, it likely means to redesign and rewrite an entire website.

The cost associated with redesigning a website to be “ADA compliant” is likely thousands, if not tens of thousands, to meet every WCAG 2.1 requirement.

While 100% compliance may be difficult, other solutions exist to become up to 95% compliant.

Enter the world of Accessibility Widgets. These are text/website overlays that require you to add a short line of code into your website that creates a small button in the corner for web visitors to click on and modify the webpage to meet their needs.

With these widgets, you have options:

visual impairment.

• Free, most basic widget, likely not close to 95% compliance. - UserWay • Starting at $348/year – Neilson Marketing Services • Starting at $490/year - AccessiBe • Starting at $490/year – UserWay with AI

Website accessibility is not something to consider merely from a legal standpoint, it is also a customer service for many Americans looking for insurance.

Of course, there are many other options out there. These are just a few of the most popular widgets. Regardless of what path or option you decide, you should take action to make your website more accessible to reduce the risk of an ADA demand letter or lawsuit.

Lastly, it is important to note that more than 7 million people in the U.S. are blind or have a

If you have been contacted by an attorney regarding ADA compliance, we ask that you reach out to the IIAW. The earlier we can learn that this may be becoming an issue in the state, the faster we can not only monitor but also respond.

> Evan Leitch,

Technology & Risk Advisor

To become an Independent Agent with AAA George Maglares (847) 867-6099 GSMaglares@acg.aaa.com

wisconsin INDEPENDENT AGENT

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Commercial | Personal | Farm-Ag | Specialty

Lori M., Personal Lines Underwriter

Josh P., Specialty Lines Underwriter

Kayla S., Farm Lines

Underwriter

Honest relationships SECURA’s team of insurance experts is making insurance genuine.

They are here to support you and your clients. Our underwriting teams are quick to reply, open-minded, and know their stuff. Plus they are backed by our caring claims group who will get your clients back on their feet.

Interested in building a relationship?

Contact us at secura.net/WI-agents.

Lisa P., Wisconsin Sales Manager

Samantha G., Commercial Lines Underwriter

Hear from our experts.

Want to learn more about what SECURA has to offer? Scan the QR code or visit secura.net/WI-agents for more information about the SECURA team.

IIAW Agency Accounting Services Our Services: • Provide day-to-day bookkeeping • Payroll processing • Direct agency bill reconciliation • Financial statement preparation and interpretation • Prepare annual budget plan • Work with your external accountants for tax and auditing needs

Who is best fit for our services: Agencies lacking financial acumen on staff Agencies with mature staff looking forward to retiring Agencies looking for additional bookkeeping knowledge and support

Contact: Matt Banaszynski, IIAW CEO 608-256-4429 matt@iiaw.com

NEW TO THE TEAM

We recently sat down to learn a bit more about Laura: What’s one of your favorite memories from the past year?

Flying to Austin, TX to meet my first granddaughter, Jordan! When I was holding her at just two days old, I saw all the goodness in my daughter, myself and the world. She has filled my life with so much joy!

What is your guilty pleasure?

Iced coffee and chocolate.

The IIAW Welcomes Laura Pitsch, Agency Accounting Specialist

When you were a kid, what did you want to be when you grew up?

A gymnast - my neighbor had a trampoline and we did flips on it all day, every day.

What would we most likely find you doing on the weekend?

Chauffeuring my son around, doing yoga and snuggling my cat.

Please join us in welcoming our newest team member, Laura Pitsch. Laura is joining the IIAW as If you have any questions or if you’d like to our new Agency Accounting Specialist! welcome Laura, she can be reached at laura@iiaw.com.

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wisconsin INDEPENDENT AGENT

AUGUST 10-11 KALAHARI RESORTS WISCONSIN DELLS, WI

TUESDAY, AUGUST 10TH 1PM -3PM

IIAW BOARD MEETING

This meeting is invite-only.

5PM-9PM

SUNSET DINNER BOAT CRUISE

Join us for a Sunset Dinner Boat Cruise. Transportation for the dinner cruise will depart at 5PM from the Kalahari Convention Center. Kick off InsurCon2021 with dinner and cocktails on the Wisconsin River.

Africa East

Kalahari Convention Center Entrance

(Limited space available on a first come, first serve basis. Additional charge)

WEDNESDAY, AUGUST 11TH 9AM-9:45AM Africa East

10AM-10:45AM

Africa East

11AM-12PM Africa East

12PM-1:15PM Africa East

1:15PM-2PM Africa East

2PM-5PM

Africa West

9PM-MIDNIGHT Africa East

INDUSTRY INSIGHTS

As the industry continues to experience many technology, legislative and regulatory changes, it is important to take the time to discuss what is most important for agents to know.

Join Matt as he leads a discussion with thought leaders about industry knowledge and insight on emerging trends, threats and opportunities. This discussion will also include Q&A if time permits.

POWERED PRODUCTIVITY

Beth, aka your Nerdy Best Friend, will provide a light-hearted, entertaining look at tools and apps that will help you increase efficiency.

DIGITIZATION & DISTRIBUTION

Bill Pieroni, President & CEO of ACORD

Bill will offer an enthusiastic, yet statistical discussion of the independent agency carrier arena.

AWARDS LUNCHEON

Join us as we honor our 2021 Award Winners.

KEYNOTE SPEAKER

Listen to former Washington Redskins star quarterback and NFL Network Analyst Joe Theismann discuss managing unforeseen change with adversity. Joe has evolved from an athlete to a businessman and his high-energy presentation is one you will not want to miss! We will also be giving away autographed items.

Matt Banaszynski, IIAW CEO

Beth Ziesenis, Your Nerdy Best Friend

Joe Theismann, Hall of Fame Quarterback & NFL Analyst

EXHIBITOR SHOWCASE

This year’s Exhibitor’s Showcase is a must-see event!

With more exhibitors and more prizes, don’t miss the opportunity to win cash or to meet your next great partner for success. InsurCon2021 will feature the first ever Blackout Bingo, where agency owners and employees will have the opportunity to win prizes, including cash!

EVENING ENTERTAINMENT

It’s time to cut loose and enjoy some great entertainment and music from Granny Shot. This is a great time to network, enjoy company hospitality lounges and just have fun!

FINANCE

POSITIVE PAY COULD PROTECT YOUR AGENCY FROM FRAUD More and more often insurance agencies are utilizing the banking service of Positive Pay as a means of fraud protection. Positive Pay services allow banking clients to upload a Positive Pay file (a listing of checks written from the client’s account), which is used to compare against the checks presented to the financial institution for payment.

When a check is attempting to clear the client’s account but is not referenced within that client’s Positive Pay file, the check is considered an exception. To manage that exception, the client is notified and asked to review whether the check should be cleared. Positive Pay is often considered a cost-effective theft prevention offering. Some financial institutions even offer this service for ACH debits as well.

Most Positive Pay service offerings consist of a monthly service fee (averaging between $30 - $70) and an exception item fee (averaging $1-3/exception item). With business banking clients having a reduced timeline to dispute invalid account debits, the concept of theft protection services is gaining traction. Does your agency utilize Positive Pay? What forms of theft protection services is your agency utilizing today?

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wisconsin INDEPENDENT AGENT

Now might be a good time to meet with your banker to discuss.

About Deirdre Tumm Deirdre Tumm is a treasury management officer for Security Financial Bank, a Wisconsin financial institution that specializes in lending to insurance agencies. Deirdre uses her cash management expertise to seamlessly guide SFB’s insurance agency clients with their depository needs and specialized business services. Some of those services include remote deposit capture, Positive Pay and ACH services.

> Deirdre Tumm

Treasury Management Officer, Security Financial Bank

WE’CAN HELP YOUR AGENCY GROW. We understand the insurance industry.

As your agency grows, we are here for every stage — from purchasing your first agency to acquisition to perpetuation.

Call us today.

Serving Agents throughout Wisconsin www.sfbank.com • 888.254.0615

wisconsin INDEPENDENT AGENT

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AGENCY OPERATIONS

REMOTE ONBOARDING MISTAKES (& HOW TO AVOID THEM) Most likely, your organization, like many others, has spent the better part of a year operating remotely. Your employees and managers have addressed challenges, and are adapting well.

Yet there’s one more hurdle facing you – onboarding your new employees remotely.

Define that culture at the outset. Integrate the new hire into the culture as quickly as possible, and keep them in front of other employees and managers to ensure that the message is reinforced. As a rule, your culture should be clearly defined and promote throughout your organization.

Even with the best remote onboarding process, mistakes happen. New employees can get lost quickly without the right amount of hands-on mentoring. We know – WAHVE was founded as a 100-percent remote organization. We’ve overcome the very challenges your company may be facing when bringing new people on board.

Foregoing Benchmarking and Measurement

Because of this, we’ve been able to identify the most common mistakes companies can make during the onboarding process.

And we’ve found solutions that can help transition those new employees into the workforce more successfully.

Rushing the Onboarding One of the biggest mistakes we see is companies that rush the new hire through onboarding in order to get them up to speed and on the job quickly. However, that employee could be missing out on key information or training. That can impact their productivity, and their overall job satisfaction.

Set an onboarding timeframe for all new hires. Even in cases where you have a critical need, slow down. Make sure that employee has the time and training to grasp the job duties, make connections to help them collaborate with various teams.

Ignoring the Culture Part Just as in any brick-and-mortar operation, your work culture is critical to the success of your employees. If you’re not nurturing it, those working relationships will suffer. By not paying attention to your company’s culture, your employees are left to their own devices. How they interpret every aspect – from task performance to the company’s ethical standards – can create a chaotic environment that can increase your loss exposure.

In order to see and correct issues your new hire is experiencing, you have to be looking. You can’t know if the employee needs more training or mentoring unless you’re checking in regularly. That impacts employee morale and productivity, and it impacts the overall health of your organization.

Have a mentoring process in place. Meet with your employee weekly in a one-on-one. Open the channels of communication so that they can reach out with questions at any time. Make sure they understand the job, how it fits within the larger company structure, and what is expected of them. Then make sure to give them the tools and support necessary to make them a success.

Stepping Off on the Right Foot Consistent onboarding applied across the organization increases the likelihood that your new hire will be satisfied and productive. Whether your remote operations are temporary or more permanent, bringing new hires on board requires a different process than traditional onboarding.

By paying attention to the needs of your new hire, your organization can improve both the onboarding process and the retention rate of all new hires. That can only result in better productivity, happier employees, and a stronger work culture for all.

> Sharon Emek, Ph.D., CIC Founder & CEO of Work at Home Vintage Experts

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wisconsin INDEPENDENT AGENT

© 2020 Society Insurance

Filling them up now so they won’t be hungry later.

Small detail. Big difference.

You know as well as anyone that today’s cut corner can easily turn into tomorrow’s missing piece. With our forty years of experience in specialized coverage and policies developed alongside actual restaurant and bar owners, you can rest assured that your policyholders are protected against the unique risks they face every day.

If you agree that details like these make a big difference, give us a call at 1-888-5-SOCIETY or visit societyinsurance.com.

ERRORS & OMISSIONS

LEGAL ACTION AGAINST THE INSURANCE CARRIER: WHAT IS THE AGENT’S RESPONSIBILITY Several agents have recently asked essentially the same question in different ways: • “What is our responsibility as the agent regarding the Legal Action Against Us provision in the Commercial Property Conditions?”

• “Many of our clients turned in COVID-related business income claims that were all denied, do we have a duty to explain to them their right to sue and the limitation on the time to bring suit contained within the policy?”

• “Should we notify our insureds about their time limit to sue the insurance carrier?”

Each of these questions relate specifically to the “Legal Action Against Us” provision found in the Commercial Property Conditions (CP 00 90) that reads: D. LEGAL ACTION AGAINST US No one may bring a legal action against us under this Coverage Part unless: 1. There has been full compliance with all of the terms of this Coverage Part; and 2. The action is brought within 2 years after the date on which the direct physical loss or damage occurred.

Although some states apply different time limitations for suits against the insurance carrier, the unendorsed ISO form grants the insured two years from the date of the direct physical loss or damage to sue the carrier. Ignoring the obvious issue of the lack of direct physical loss or damage (as most courts are ruling), most insureds have already eaten up the first year of this limited time for COVIDrelated business income losses. So… Does the agent have a duty to notify the insured of this time limit on lawsuits?

Short Answer No! Is that short enough?

Explanation (Longer Answer) Questions or advice on suits against this insurance carrier represents one of those situations where the agent walks a fine line between who they think they represent and who they actually represent. Agents must remember that 20 | MAY 2021 |

wisconsin INDEPENDENT AGENT

when they are appointed by an insurance company, they represent the insurance carrier, not the client. The agent’s generally expected duty is to work in the best interest of the company.

If the insured has submitted a claim and the insurance carrier has denied it, the next steps are up to the insured (the party to the contract). The agent is not a party to the contract and is also not an attorney. Insureds desiring to pursue the insurance company in court must seek advice from legal counsel. The agent is not licensed or qualified to act as an attorney.

If the agent undertakes to advise the client to sue the carriers, they may be creating major problems from themselves; the carrier may sue the agent or cancel the contract. This is a time for the agent to stay neutral and answer questions but not offer preemptive advice in relation to this specific policy provision.

Do not undertake to notify your clients regarding any time limit to sue the insurance carrier regarding COVID business income claims (or any other claims). Address this issue only if the insured specifically asks; and when asked point them to the policy wording without offering an opinion.

Closing Thoughts Advising clients that they have only a certain amount of time remaining to sue the insurance carrier is a very bad decision from an errors and omissions (E&O) perspective.

This is not the agent’s duty and it likely violates the agency’s understood duty to work in the best interest of its principal – the insurance company.

Leave lawsuits and advice on lawsuits to the lawyers!

Agents should not undertake any legal recommendations or advice (or opinion) regarding the time limitations for suing the insurance carrier. > Chris Boggs, IIABA Executive Director of Risk Management and Education

It shouldn’t take a four-foot diameter oak tree in your customer’s kitchen to find out who you can trust.

BUT SOMETIMES IT DOES. And that’s the Silver Lining®.

Strengthen your independence.

Keystone’s partners maintain their independence while benefiting from added resources on a national scale. We work shoulder-to-shoulder with partner agencies to strengthen their agency and offer resources and solutions to support their specific goals.

Agency Solutions

Business Solutions

Personal Solutions

Agency Management Partner Support Services Organic Growth Claims Management Carrier Relations Profit & Growth

Property & Casualty

Property & Casualty

Bonds Insurance Placement Services Programs

Insurance Placement Services

Financial Services

Employee Benefits Group Health Ancillary Benefits

Financial Services Risk Management

That’s how independence works better together!

FOR MORE INFORMATION: JoAnn Hartung 570.473.4340 | jhartung@keystoneinsgrp.com keystoneinsgrp.com ©2021 Keystone Insurers Group ®. All rights reserved. This does not constitute an offer to sell a franchise in any state in which the Keystone Insurers Group franchise is not registered.

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wisconsin INDEPENDENT AGENT

GOVERNMENT AFFAIRS

NEW CHART REVEALS WHERE WISCONSIN GETS ITS MONEY A new infographic from the nonpartisan research group, the Pew Charitable Trusts, recently highlighted where each state gets the lionshare of its funding. Did you know that in combination, taxes and federal funding account for more than 80 percent of revenue for the 50 states?

According to the study, taxes are the largest source in 46 states, while federal funds are greatest in just four states - Alaska, Louisiana, Montana, and Wyoming.

dollars that the state stands to receive in the months ahead, it’s important to understand where Wisconsin ranks with the rest of the nation on where it gets its funding. Also notable is that Governor Evers has full authority over how the ARPA dollars are disbursed with little to no input from the Legislative branch.

The state of Wisconsin is projected to begin the next two-year budget cycle with a $1.7 billion surplus. This is welcome news for Wisconsin taxpayers. Moreover, the nonpartisan Legislative Fiscal Bureau (LFB) projects that under the recently approved American Rescue Plan of 2021 (ARPA), that the state of Wisconsin will receive an additional $3.2 billion in federal aid with an additional $2.1 billion in federal aid going directly to Wisconsin municipalities. The Wisconsin Senate Co-Chair of the Joint Finance Committee (JFC), Howard Marklein (R-Spring Green), estimates that since the beginning of the pandemic Wisconsin has received in total all funds an unprecedented $45 billion in federal funding which equals about half of the state’s biennial budget of $91 billion dollars. According to the Pew data, Wisconsin ranks 40th overall for federal funding. Only ten other states receive less federal dollars than Wisconsin currently.

• 16th for Taxes at 51.6% (50 state average is 49.1%) • 40th for Federal Funds at 26.6% (50 state average is 31.4%) • 16th for service fees at 12.7% (50 state average is 11.3%) • 20th for Miscellaneous at 8.7% (50 state average is 7.4%) • 25th for Local Funds at 0.5% (50 state average is 0.8%)

According to the Pew Charitable Trusts chart, Wisconsin ranks:

See the state-by-state rankings at bit.ly/MayGovAffairs.

>M isha Lee IIAW Lobbyist

As the Evers Administration and Republican controlled Legislature debate vociferously over how best to spend the billions of federal ARPA wisconsin INDEPENDENT AGENT

| MAY 2021 | 23

IIAW CONTINUING EDUCATION

2021 ONLINE EDUCATION & CE CLASSES

MAY & JU NE 2 0 2 1 SC H EDU L E DATE

TIME

COURSE

5/03

11AM-1PM

Insight on Modern Day Cyber Exposures & Risk Management

5/04

8AM-10AM

Builders Risk and Contractors Equipment

5/05

12PM-2PM

Personal Lines Issues that Keep You Up at Night

5/06

8AM-9AM

Claims-Made Policies - The Most Dangerous Insurance Policies

5/07

9AM-12PM

E&O - Roadmap to Homeowners Insurance

MAY

5/11 9AM-11AM Embracing Directors & officers Liability Insurance 5/14

9AM-12PM

Commercial Lines Claims That Cause Problems

5/18

12PM-2PM

The Guy in the Bar Returns

5/19

10AM-12PM

Business Auto Claims That Cause Problems

5/20

9AM-11AM

Contracts Agents Should Read

5/24

12PM-3PM

Agency Management Based E&O and Ethics

5/25

8AM-9AM

Setting Business Income Limits: It’s Easier Than You Think!

JUNE 6/01

8AM-10AM

Builders Risk and Contractors Equipment

6/02

12PM-2PM

Personal Lines that Keep You Up at Night

6/03

12PM-2PM

Those Kids and Their Cars

6/04

9AM-12PM

E&O - Roadmap to Homeowners Insurance

6/07

11AM-1PM

Insight on Modern Day Cyber Exposures & Risk Management

6/08

11AM-1PM

5 Contractor Coverage Concepts Every Agent Must Understand

6/11

9AM-12PM

Commercial Lines Claims That Cause Problems

6/16

10AM-12PM

Business Auto Claims That Cause Problems

FOR MORE INFORMATION AND TO REGISTER FOR THESE CLASSES, VISIT IIAW.COM/EDUCATION

OPINION

THERE IS A SEASON The views reflected in this article are strictly the opinions of the writer and are not necessarily endorsed by the IIAW.

Ecclesiastes 3:1 tells us “to everything there is a season.”

Pete Seeger (late 1950’s) and “The Byrds”(1960’s) put that concept to music. I will be changing seasons shortly. As I look back on my insurance career, I can attest that change is constant in our profession, but not necessarily in a predictable manner like a season is.

most Wisconsin independent agents lucky enough to have a contract. Those agents without a contract tried very hard to get one. That company no longer exists. Marginal insurance companies became great companies and viceversa. Times change, just like seasons.

It seems like only yesterday that company “field men” (yes, they were all men) would stop at our offices and offer us lunch, dinner and/or drinks, but not necessarily in that order. Many agents welcomed the opportunity to be taken to a restaurant or supper club they wouldn’t pay for themselves. How that has changed, on so many levels.

Claim handling has changed also. Claim settlements, for the most part, have improved tremendously.

We had a customer years ago whose vehicle was seriously damaged in an accident. The adjustor depreciated the oil in the crankcase. Another adjustor denied a claim where an item listed on an “all risk” inland marine schedule was swept away in a flood. The adjustor said that “mysterious disappearance” was not covered. I’d like to think that our industry has improved a little since those claims.

It wasn’t very long before I started in the business that agents still typed policies in their offices. Waste baskets had lots of carbon paper in them. I remember that well as I cleaned my father’s office while still in school. Virtually all policies were agency billed. Many agencies struggled to collect premiums from some of their customers. Some agents went out of business because of poor collection practices. Every office had a ton of file cabinets. Filing was usually an entry level position that was despised by most that had to do it. Now you can barely give those same file cabinets away. Technology brought us Polaroid cameras, which really were a big deal at the time. Equally innovative was the bag phone. I have several clients that swear their bag phones had better reception than their cell phones.

There were annual company meetings at regional locations.

Many companies served alcohol with lunch. People smoked in their offices, at meetings and in the restaurants. Ladies wore dresses and skirts and men wore coats and ties.

Underwriting has changed too, but not necessarily for the better. We have entered an era of what I call “cookie cutter” underwriting. The days of negotiation with an underwriter, especially in personal lines, seem to have all but disappeared. We are at the mercy of software algorithms designed for consistency and efficiency. We had several situations where a husband died and the surviving widow called to delete her husband’s name from the auto policy. This change resulted in a bill to the poor widow because the credit score of the deceased husband was higher than his wife’s credit score. We also had a company non-renew a gold star home, auto, recreational vehicle and umbrella package policy because the policyholder could not provide a serial number for a boat trailer to satisfy the company’s automation system. The cookie cutter technology concept is not always smarter than a human.

The software programmer doesn’t always have common sense. But I don’t see those problems going away.

Companies have changed also and many have gone through their own seasons. A lot of companies have changed their names. Some no longer exist. Others merged with other companies. There was a company in the 1970’s and 1980’s that was the favorite company of

One of the biggest changes to our industry comes from the direct writers. Their multi-million dollar advertising lacks an accurate depiction of professionalism that the insurance industry is known for. I encourage direct writers to mirror the advertisements utilized by other business professionals.

26 | MAY 2021 |

wisconsin INDEPENDENT AGENT

Not everything changes, however. The insurance industry has always been a people business. That is still mostly the case. People like to do business with people they know and trust. There is hope for us in spite of the fact that insurance is being sold on the internet like cans of soup. We have lost clients to internet companies just like you have. Many of them came back to our fold at a later date after finding out how good their company was after going through a claim experience. We add value to the products we sell. We are available after the sale. We serve a very important function.

The insurance business is still a great profession. Most insurance jobs come with good pay and decent benefits.

Regardless of whether one has a personality for being a producer, or an actuary, or anything in between, the industry offers good employment opportunities to almost every aptitude and personality type. The average person cannot comprehend working in the insurance industry. Many, perhaps most, of us are in the industry by accident. Many are here because we were desperate for a job. But we stayed. We stayed because the industry is full of opportunities. We need to communicate these opportunities to others so that our industry can attract the best and the brightest.

Many of you have seen the changes I have seen.

2021 JM Wilson CF WI Indep Agent.indd 3

Most of you will see more change, changes we can’t even contemplate right now.

Change is constant, just like the seasons. But past is probably not prologue when it comes to insurance. We aren’t likely to go backwards or full circle. We will continue to evolve. We do need to prove our value by providing sound advice and superior service. We need to build trust and professional relationships with our clients. We need to be professionals. If we continue to do those things, we will survive in spite of the on-line insurance sales outlet. I see a bright future for our industry.

I consider myself very fortunate to have been part of an amazing service industry. I had help and encouragement from many different people along the way. Sometimes there was conflict, heartache and sleepless nights. But the good always outweighed the negative. Thank you to everyone that made my insurance career possible! I hope to run into you somewhere next season! > David Klinner

President of Klinner Insurance, Inc.

The IIAW would like to wish Dave the best as he enjoys his retirement!

3/31/21 10:52 AM

VIRTUAL UNIVERSITY

A YEAR IN REVIEW: COVID-19 BUSINESS INTERRUPTION COVERAGE DISPUTES March 13 marked one year to the day from when the COVID-19 pandemic was declared a national emergency in the United States. Around that time, the pandemic spurred widespread state and local government shutdown orders requiring the full or partial closures of businesses across the country. These government-mandated shutdowns, of course, resulted in substantial economic losses.

Not surprisingly, many business owners looked to their property-casualty coverage to offset their losses, even if policy language did not clearly support a claim. To date, hundreds of business interruption coverage disputes are winding their way through the judicial system.

Unlike in the U.K., where its Supreme Court issued a more sweeping interpretation of policy language in January, procedural efforts in the U.S. by plaintiffs to consolidate these claims in multidistrict litigation against large carriers have met with limited success. To add to the uncertainty, some states have even considered legislation that would shift losses to carriers regardless of whether the policy excludes coverage, though these efforts also have largely failed to gather steam. This has led to a patchwork of rulings and different outcomes across the country.

Most Decisions To Date Are In Favor of Insurers On the whole, most substantive decisions to date have been in favor of insurers based on the fact that insureds are simply unable to allege or prove the type of direct physical loss required for coverage under most policy language.

For example, in Rose’s 1, LLC et al. v. Erie Insurance Exchange (D.C. Superior Court, Aug. 6, 2020), the trial court granted summary judgment upholding the denial of a restaurant group’s business interruption claim. The court found that the District of Columbia’s shutdown order standing alone did not constitute a direct physical loss under the policy. The decision stated that “in the context of property insurance, the term ‘direct loss’ implies some form 28 | MAY 2021 |

wisconsin INDEPENDENT AGENT

of direct physical change to the property.” The decision has been appealed.

Courts from New York to California have followed similar reasoning: • Social Life Magazine v. Sentinel Insurance Company Ltd. (Southern District of New York, May 20, 2020) dismissed the insured publisher’s claim because the virus “damages lungs [and] doesn’t damage printing presses.”

• Legal Sea Foods LLC v. Strathmore Insurance Company (District of Massachusetts. March 8, 2021) dismissed restaurant’s claim because the virus does not affect the structural integrity of the property and thus does not constitute “direct physical loss of or damage to” property.

• Gavrilides Management Company LLC v. Michigan Insurance Company (Michigan Circuit Court, July 21, 2020) granted summary judgment to the insurer because shutdown orders were not a physical loss that “alters the physical integrity of the property.”

• Diesel Barbershop, LLC et al. v. State Farm Lloyds (Western District of Texas, Aug. 13, 2020) found the failure to plead a direct physical loss and that virus exclusion would have barred the claim anyway.

• 10E, LLC v. Travelers Indemnity Company of Connecticut et al. (Central District of California, Aug. 28, 2020) dismissed the restaurant owner’s claim because physical loss or damage only occurs with a “distinct, demonstrable, physical alteration.”

These decisions make sense in the context of the longstanding precedent that “direct physical loss or damage” requires an actual physical alteration of property in a way that impairs value. It is difficult to argue that any virus particles would satisfy such a requirement. Moreover, in many cases, plaintiffs have not even alleged the coronavirus was present at the business location prior to or during the shutdown.

The Trend Is Likely To Continue With Some Limited Exceptions A few recent decisions, have raised some doubts as to whether all insurers will avoid COVID-19 business interruption claims.

For example, in Studio 417, Inc., et al. v. The Cincinnati Insurance Company (Western District of Missouri Western Division, Aug. 12, 2020), the court denied a motion to dismiss a hair salon’s putative class action. According to the decision, the plaintiff adequately alleged that COVID-19 was a physical substance that attached to property making it “unsafe and unusable, resulting in direct physical loss to the premises and property.” The court also found that the term “direct physical loss” could include “when the property is uninhabitable or unusable for its intended purpose.”

The court recognized that some case law supported the requirement of physical alteration, but it found that those decisions turned on particular facts and could not be applied at the dismissal stage.

In North State Deli, LLC et al. v. The Cincinnati Insurance Company (Superior Court of Durham County, North Carolina, Oct. 9, 2020), another court took things a step further against the same insurer and granted partial summary judgment for the insureds based on similar reasoning. The court found that the plain definition of “direct physical loss” includes an “inability to utilize or possess something in the real, material, or bodily world” and “described the scenario where business owners [and others] lose the full range of rights and advantages of using or accessing their business property.” Thus, the court held that the relevant policies did provide coverage.

There are several important caveats to note before reading too much into decisions against the insurer in these cases, which are likely to remain outliers from the broader trend.

First, the policy language at issue in these cases covered “direct loss to Covered Property.” This does not resolve the question of whether coverage would exist where the policy only provides for “direct physical loss or damage” instead.

Second, the plaintiffs in these cases alleged the virus was physically present. Third, unlike many similar policies, the terms did not include an express virus exclusion. And, finally, these decisions are subject to appeal and may be overturned.

Indeed, in another case against the same insurer, NeuroCommunications Services, Inc. v. The Cincinnati Insurance Co. et al. (Northern District of Ohio, Jan. 20, 2021), an Ohio federal district court recently noted the “differing interpretations” that have arisen as business interruption cases have wound “through the various court systems.”

district court certified a question to the Ohio Supreme Court: “Does the general presence in the community, or on surfaces at a premises, of the novel coronavirus known as SARS-CoV-2, constitute direct physical loss or damage to property; or does the presence on a premises of a person infected with COVID-19 constitute direct physical loss or damage to property at the premises?”

Similar questions about policy language are also pending before supreme courts in California and Pennsylvania.

The same day, another Ohio federal district court judge rejected the dismissal of a business interruption coverage suit against another insurer in Henderson Road Restaurant Systems Inc. v. Zurich American Insurance Co. (Northern District of Ohio Jan. 20, 2021). To reach this result, the decision involved a more strained interpretation of policy language, including a microorganism exclusion, further muddying the waters.

For more on that decision, please see the analysis, “Wow! Another COVID Decision in Ohio Favoring the Insured,” by Chris Boggs, Big “I” executive director of risk management and education.

Key Takeaways At this point, dozens of decisions—most in favor of insurers and some in favor of insureds—have been appealed. Until more cases and appeals have been decided, coverage questions will remain somewhat uncertain.

In the meantime, while the trend remains that most courts find claims are not covered, it is clear that each claim still needs careful consideration based on the specific policy language and factual circumstances at issue. It is also increasingly important to be mindful of any suit limitations period in the relevant policy, which may require initiation of legal action within a certain amount of time, for example, as soon as 12 months after inception of a loss.

The specific language and triggering event for any limitations period will vary by policy. Although some states may have overriding statutes of limitations, some policyholders will have to initiate a coverage action or enter into a tolling agreement sooner than others. If they fail to do so in a timely manner, policyholders risk forfeiting coverage regardless of whether or not a court might have found coverage for a claim based on the substantive merits.

If you have any questions about these issues, please feel free to contact Chris Boggs, Scott Kneeland or Eric Lipton.

> Scott Kneeland, Big I General Counsel > Eric Lipton, Big I Senior Counsel

In seeking to bring more uniformity to the application of Ohio law to business interruption coverage questions, the wisconsin INDEPENDENT AGENT

| MAY 2021 | 29

OPEN SEMCI Single-entry, multiple-company interface (SEMCI) is like magic!

Acuity, long recognized as a leader in agency interface technology, is committed to supporting SEMCI in commercial lines. SEMCI drives efficiency in the quote and application process and allows you to choose how you want to do business with Acuity.

Acuity currently partners with several of the leading commercial lines insurtechs. We are building, exploring partnerships, or expanding with numerous other independent agency technology solutions. And Acuity is on the forefront of integration technology, continually building the connections necessary to be ready to connect to new insurtechs as they emerge.

News Members in the

SOCIETY INSURANCE PARTNERS WITH LOCAL RESTAURANTS TO FEED HEALTHCARE WORKERS AND FAMILIES IN NEED

Austin, TX (February 22, 2021) - In response to the devastating winter storm that left thousands of Austinite’s without power, food and water, Wisconsin-based Society Insurance, which launches in the Austin market later this year, partnered with several locally-owned restaurants over the weekend to donate more than 1,200 prepared meals to healthcare workers and families in need.

With the assistance of the incredible teams at P. Terry’s, Taco Deli, Santa Rita Cantina and TacoShack, Society was able to purchase and distribute these meals to St. David’s Medical Center,Ascension Seton Medical Center and SAFE Alliance shelters.

“Our team feels incredibly fortunate that we could support the Austin community at such a critical time,”said Rick Parks, Society Insurance president & CEO. “Working alongside these beloved Austin restaurants, we were able to provide a warm, comforting meal to those who needed it most. We are proud to join this wonderful community.”

Society Insurance launches in the Texas market later this year and is recognized as an industry leader in providing superior restaurant and bar insurance coverage specifically tailored to the unique operations of each business.

To find out how Society can help your business, visit www.societyinsurance.com/texas.

ABOUT SOCIETY INSURANCE: Headquartered in Fond du Lac, Wis., Society Insurance has been a leading niche insurance carrier since 1915. As a mutual insurance company, Society focuses on the small details that make a big difference to its policyholders while offering top-notch insurance coverage, service and competitive pricing to businesses in Colorado, Illinois, Indiana, Iowa, Minnesota, Tennessee and Wisconsin. Visit www.societyinsurance.com to learn more.

32 | MAY 2021 |

wisconsin INDEPENDENT AGENT

PIE INSURANCE IS BUILDING THE FUTURE OF SMALL BUSINESS INSURANCE WITH $118 MILLION IN SERIES C FUNDING Led by Allianz X and Acrew Capital, the round will enable further innovation, new business offerings, and rapid expansion Denver, CO (March 25, 2021) - Pie Insurance, an insurtech specializing in workers’ comp insurance for small businesses, today announced the completion of a $118 million Series C funding round. Investors Allianz X and Acrew Capital led the round, and existing investors Greycroft, SVB Capital, SiriusPoint, Elefund, and Moxley Holdings also participated in the round.

Pie Insurance was built on a foundation of data and advanced analytics that power its entire coverage experience for small businesses. Today’s investment will enable Pie to invest further in technology and automation, as well as to grow its core workers’ comp insurance business, and lay the groundwork for new business offerings in 2021 and beyond.

“Commercial insurance is long overdue for the online transformation that personal lines have benefited from for years,” said John Swigart, Co-founder and CEO of Pie Insurance.

“Now more than ever, small businesses deserve to be supported, not hindered, by their insurance company. Pie is leading the charge in building a more affordable and modern insurance experience, and today’s funding enables us to expand our operations and invest in technology and tools that will have an immediate impact on our customers and partners.”

“Pie is fundamentally transforming the commercial property and casualty insurance market in the U.S.,” said Dr. Nazim Cetin, CEO of Allianz X. “Using pioneering technology, Pie has revolutionized the customer experience, ensuring that a previously-lengthy process has become more efficient for everyone involved. The company has enormous growth potential far beyond its current core business. For Allianz, there are plenty of opportunities for cooperation with Pie, for example, in the joint development and sale of insurance solutions. We also see collaboration potential with some of our other B2B portfolio companies.”

“In less than four years, Pie has become one of the fastest growing insurtechs in the country, and we’re thrilled to partner with a team that has a passion for improving small business insurance through technology,” said Lauren Kolodny, Founding Partner at Acrew Capital. “Pie’s impact on small businesses has been incredible to watch, and we believe they are one of the most compelling companies in insurance today.”

This funding round follows Pie’s $127 million Series B extension round in May 2020, in which it formed Pie Carrier Holdings with a $100 million equity capital commitment to create and purchase licensed insurance companies.

In total, Pie has raised over $300 million in funding since being founded in 2017.

ABOUT PIE INSURANCE Pie Insurance is modernizing small business insurance by automating the entire experience to provide simple, trusted, and affordable coverage. Pie’s unique combination of innovative technology, sophisticated analytics, and industry expertise enables savings of up to 30% for small business owners on AM Best A- (Excellent) rated workers’ comp insurance directly through its website or through partner agents. Since 2017, Pie has received over $300M in funding, grown its gross written.

ACUITY ANNOUNCES STAFF MANAGEMENT PROMOTIONS

Adam Dillman is promoted to Manager – Commercial Underwriting for the Wyoming and Western South Dakota teams. He joined Acuity in 2013 as a Commercial Underwriter.

During his time at Acuity, Adam has handled territories in the states of Nebraska, Kansas, Missouri, North Dakota, and most recently Oregon. He was promoted to Senior Commercial Underwriter in 2018. Prior to joining Acuity, Adam gained management experience in his work as an assistant branch manager of a bank. Adam is a 2010 University of Wisconsin-Whitewater graduate with a major in business administration. He lives in Sheboygan with his wife and two daughters.

Chris Lensmeyer is promoted to Manager – Business Systems. Chris started her career with Acuity in March 1993 as a Business Analyst. She was promoted to Senior Business Analyst in 1996 and Director – Business Systems in 2020.

Chris is a University of Wisconsin-Green Bay graduate with a double major in psychology and criminology. She furthered her education by earning her Certified Leadership Professional (CLP) designation. She resides in Manitowoc, Wisconsin.

ABOUT ACUITY INSURANCE: Acuity Insurance, headquartered in Sheboygan, Wisconsin, insures over 125,000 businesses, including 300,000 commercial vehicles, and nearly a half million homes and private passenger autos across 29 states. Rated A+ by A.M. Best and S&P, Acuity employs over 1,400 people.

WEST BEND, THE BIG I OF WISCONSIN, AND DAIS TEAM UP TO HELP AGENTS SELL DIGITALLY

West Bend Mutual Insurance Company, the Independent Insurance Agents of Wisconsin, and Dais have released the

West Bend digital Business Owners Policy for select office classes. Matt Banazynski, CEO of the Independent Agents of Wisconsin, says this digital product is significant because independent agencies can now launch a product with a single line of code.

Murali Natarajan, CIO for West Bend, describes why this digital offering is important: “We understand that technology is moving quickly and we want to give our agents every advantage we can help provide. The West Bend team engineered workflows to take customer experience to the next level by working side by side with our underwriters, agency partners, and the IIAW.” Agents can now get a “quick quote” for any operation in the Businessowners Policy (BOP) office segment using the Dais Agency Platform. This new feature allows agents to enter relevant information and receive a quote with our new digital product within minutes.

The number of risks eligible for the quick quoting feature total more than 30 and include accounting services, graphic art and design, insurance agents, medical offices, and veterinarian or veterinary hospitals.

Through the partnership with Dais, Big I members appointed with West Bend are able to start quoting West Bend products, and other complementary products, with a single line of code on their web site. Matt Banaszynski explained why this type of initiative is important for independent agents: “Online financial and insurance transactions are up 50% by most estimates, and the trend is clearly not going away. Our agents need the right tools and the right partners to compete in this new world, and we’re excited to see some of our agents’ favorite companies like West Bend enabling agents.”

Jason Kolb, CEO of Dais, explained why this is such a great partnership: “All of us believe in independent agents. They are the risk experts, the marketing and sales experts, and they are entrepreneurs. The shift to digital is an opportunity for growth, and it’s our job to provide the right tools. We are giving agents a single line of code that opens up a million possibilities, and this is just the beginning.”

ABOUT WEST BEND MUTUAL INSURANCE: Headquartered in West Bend, Wisconsin, the company employs more than 1,300 associates and partners with 1,500 independent insurance agencies in 13 states to offer their customers a broad personal lines coverage package and a full range of commercial products and services, including insurance for specialty lines and bonds. West Bend has been rated A (Excellent) or better by A.M. Best since 1971, and consistently ranks higher than its competitors in an agency loyalty survey.

ABOUT DAIS: Dais provides a cloud-based insurance platform that is used by agents and carriers to bring new products to market and to make it easier to do business with them. They use the Dais platform to quickly create new products, distribute them to policyholders, and make the insurance-buying and insurance-servicing lifecycle easier for everyone. For more information please visit dais.com wisconsin INDEPENDENT AGENT

| MAY 2021 | 33

COMMENTARY FROM COUNSEL

SURPRISE! NEW DISCLOSURE REQUIREMENTS FOR EMPLOYEE BENEFITS BROKERS AND CONSULTANTS As 2020 finally wound down, Congress passed its Consolidated Appropriations Act (the “Act”) which, among the numerous spending provisions and other Easter eggs, included the “No Surprises Act”—intended to address the problem of surprise medical bills that patients receive from out-of-network providers or facilities. Tucked further inside the No Surprises Act was a true surprise—some onerous new disclosure requirements on employee benefits brokers and consultants. The new disclosure requirements will impact IIAW members whose agencies are in the benefits business. The disclosure rules go well beyond Wisconsin’s existing fee disclosure requirements and largely track those that have applied for years to qualified retirement plans. The Act expands those rules to “covered plans” and “covered service providers” on the welfare plan side.

The IIAW has received numerous questions about the new disclosure requirement and we are working, in conjunction with the Agents & Brokers Education Network (ABEN), to put together a video presentation on the Act, and a high level overview of the disclosure obligations it created. The requirements begin to apply December 27, 2021. Here are some of the details Background Under the Employee Retirement Income Security Act (“ERISA”), a plan sponsor engages in a prohibited transaction if the compensation paid to applicable plan service providers is not “reasonable.” A prohibited transaction triggers excise taxes under the Internal Revenue Code. For this purpose, compensation will be “reasonable” only if the service provider satisfies advance written disclosure requirements. These obligations are implicated for “covered plans” and “covered service providers.” A “covered plan” is one that provides medical care to employees or their dependents directly or through reimbursement, insurance or otherwise. It includes medical, dental and vision benefits and applies to any plan that has a trust or any participant contributions. However, it does not include a qualified small employer health reimbursement arrangement.

Are you or your agency a “covered service provider?”

A “covered service provider” is an entity that provides brokerage or consulting services under an arrangement with a covered plan for which the provider reasonably expects to receive $1,000 or more in direct or indirect compensation. A covered service provider generally will include any such broker or consultant that assists with the development or implementation of plan design or the selection of insurance products, recordkeeping services, stop-loss insurance, pharmacy benefit management services, wellness services, transparency tools and vendors, group purchasing organization agreements, disease management vendors and products, compliance services, employee assistance programs, third-party administration

services, or medical management vendors. An entity can be a covered service provider even if the applicable services are performed by its affiliate or subcontractor.

What counts as compensation? For these purposes, “direct compensation” is compensation received directly from a plan and “indirect compensation” is compensation received from any source other than the plan, plan sponsor, covered service provider or an affiliate. This would include commissions. Also, compensation received from a subcontractor may be indirect compensation in some situations.

Required Disclosures The covered service provider’s disclosures must be in writing and made to a plan fiduciary. The service provider will be required to describe the services it will provide, the arrangement between the payer and the service provider pursuant to which indirect compensation may be paid, identification of the services for which indirect compensation will be paid and the applicable payer, and the direct and indirect compensation the service provider expects to receive. The Act also includes detailed rules on how the compensation may be described. The service provider also must indicate if it will serve as an ERISA fiduciary and may be required to disclose compensation that will be paid among the service provider, an affiliate or a subcontractor. In short, this new disclosure requirement will require careful preparation. And, the disclosure must be provided before the contract is entered into, extended or renewed. Going forward, any change to the information must be disclosed to the plan fiduciary within sixty days of the day the covered service provider learns of it.

The irony of this surprising new disclosure obligation in the so-called “No Surprises Act” would be more enjoyable if it were not so burdensome. Fortunately, as mentioned above, the IIAW is working to stay on top of this new requirement and to provide resources to help understand it. Stay tuned for details regarding the IIAW/ ABEN video tutorial as well.

>J osh Johanningmeier IIAW General Counsel

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