wisconsin
INDEPENDENT AGENT DECEMBER 2016
118 IIAW ANNUAL CONVENTION TH
DAVID SPADE LIVE! APPEARING MAY 3
MAY 3-4, 2017
VISIT IIAWCONVENTION.COM CONVENTION SCHEDULE OF EVENTS & INFORMATION, PAGE 30
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INDEPENDENT AGENT DECEMBER 2016 Eric Schwartz, Editor
Open Door Policy From the WCRB: Anniversary Rating Date Eliminated . . . . . . . . . . . . . . . . . . . . . . . . 5 Association Leadership 2016-17 IIAW Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Virtual University Covering a Vehicle’s Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Government Affairs Elections Yield Republican Gains in Wisconsin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Technology Despite InsurTech Gains, Independents Are Secure . . . . . . . . . . . . . . . . . . . . . . . . . .14 Industry Forecast What to Expect in Commercial Insurance Pricing in 2017 . . . . . . . . . . . . . . . . . . . . . . 17 Commentary From Counsel FLSA Salary Basis Increase Put On Hold: What Now? . . . . . . . . . . . . . . . . . . . . . . . . .18 Agency Management What Sets Your Agency Apart From the Competition?. . . . . . . . . . . . . . . . . . . . . . . 20 Members in the News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Industry Regulations Effective Jan. 1, 2017: Audit Noncompliance Charge . . . . . . . . . . . . . . . . . . . . . . . . . 24 Errors & Omissions Did You Endorse Your EPLI Policy to Include Wage & Hour Defense? . . . . . . . . . . 27 Sales What Genuinely Confident People Do Differently . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 118th IIAW Annual Convention Schedule of Events. . . . . . . . . . . . . . . . . . . . . . . 30 Marketing Video Content Set to Boom on Social Media . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Independent Insurance Agents of Wisconsin 725 John Nolen Drive, Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 ■ Fax: (608) 256-0170 ■ Web: www.iiaw.com Executive Vice President - Matt Banaszynski 2016-2017 Executive Committee President....................................................... Matt Weimer 100 North Corporate Dr., #100, Brookfield, WI 53045 President-Elect................................. Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583 Secretary-Treasurer ............................................ Jason Bott 330 East Kilbourn Ave., Milwaukee, WI 53202 Chairman of the Board .................................. Steve Leitch P.O. Box 85, River Falls, WI 54022 State National Director ................................ Linda Steiner 555 Main Street #320, Racine, WI 53403 2016-2017 Board of Directors Mike Ansay 101 East Grand Ave. #11, Port Washington, WI 53704 Cindy Burns 500 South Central Ave., Marshfield, WI 54449 Gerald Couri 379 West Main Street, Waukesha, WI 53186 Jack Demski 101 East Grand Ave. #11, Port Washington, WI 53074
Jack Riesch P.O. Box 1610, Waukesha, WI 53187-1610 Pam Utpadel 100 West Lawrence St. Suite 313, Appleton, WI 54911 Darrel Zaleski 4233 Southtowne Drive, Eau Claire, WI 54701 2016-2017 Committee Chairs Agency Services ............................................ Kim Dandrea N19 W24200 Riverwood Dr., Waukesha, WI 53188 Automation/Technology ............... Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949 Emerging Leaders ...........................................Jack Demski 101 East Grand Ave. #11, Port Washington, WI 53074 Employee Benefits.......................................... Mike Farrell 1300 South Green Bay Rd., Racine, WI 53406 Government Affairs .......................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045 Carrier Relations ......................................... Kevin Murray 525 Junction Road, Madison, WI 53717
Ryan McClone 150 Main St. Suite 102, Menasha, WI 54952
Marketing & Membership Development ........... Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610
Marc Petersen 15171 W. National Ave., New Berlin, WI 53151
Technical ...............................................Timothy Kakuska P.O. Box 547, La Crosse, WI 54602-0547
On The Cover… You know him from Saturday Night Live and movies like Tommy Boy and Joe Dirt, but now you can see David Spade LIVE at our convention on May 3! David is the star of the event which features world-class speakers, CE credits, a fantastic exhibit hall, and so much more! See pages 30-31 for a schedule of events and information. Online registration is coming soon! Visit IIAWConvention.com today for complete convention details.
> ADVERTISERS & INFORMATION AAA Wisconsin ................................................ 34 Acuity Insurance ............................................ 35 Axley Brynelson ............................................. 23 Badger Mutual ................................................ 32 Berkshire Hathaway/Guard .............................. 4 Big “I” Retirement ......................................... 25 Burns & Wilcox ................................................. 7 Convention w/David Spade ................Back Cover EMC Insurance..................................................11 IIAW Online CE ................................................. 16 IIAW 2107 Prelicensing Classes ....................... 26 Integrity Insurance .......................................... 6 Partners Mutual ............................................. 32 Pekin Insurance...............................................18 Robertson Ryan & Associates......................... 23 SECURA Insurance ........................................... 15 The IMT Group ................................................ 33 West Bend ........................................................ 2 Western National............................................. 21
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FROM THE WCRB:
ANNIVERSARY RATING DATE ELIMINATED In November 2016, the Office of the Commissioner of Insurance approved the elimination of the Anniversary Rating Date (ARD) rules set forth by the Wisconsin Compensation Rating Bureau (WCRB). The policy’s effective date is May 1, 2017. Wisconsin is the last state to adopt this policy. Effective May 1, 2017, prior policy effective dates will not be used to govern the application of rates, rules and forms with the issuance of a replacement policy. Policies with an effective date of May 1, 2017 or later, will not have an anniversary rating date applied. The Anniversary Rating Date endorsement will be withdrawn. The WCRB’s FAQ about this policy is below. For more information about the ARD, go to WCRB.org, click FAQ and enter ‘Anniversary’ in the Search by word or phrase field. You can also contact me about this issue.
What is an Anniversary Rating Date (ARD)?
What will the impact to my premium be if I cancel and rewrite my policy? If a policy is cancelled and rewritten to take advantage of a rate or rule change, short rate penalties and changes to potential dividends will apply. Changes to a policy effective date may also have an impact on future experience rating modifications as the Rating Effective Date (RED) rules have not been eliminated.
What prevents employers or carriers from cancelling policies to take advantage of lower rates? Higher rates?
The change is the elimination of the ARD rule. The elimination of the ARD is countrywide and WI made the change to be consistent with other states.
In a system without the ARD rule, nothing would prohibit an employer from cancelling a policy to take advantage of a recent rate filing decrease. The short rate penalty exists, which acts as a deterrent to an employer who cancels. That penalty would likely substantially reduce, or completely eliminate, any “gains” to be had by cancelling early to take advantage of the new, lower rates. Wisconsin statute contains specific prohibitions for a carrier to cancel a policy except for issues such as nonpayment of premium, breach of the policy terms, fraud, and misrepresentation.
What happens if my policy is rewritten with a new effective date?
When and how will employers be notified that they no longer have an ARD?
If a policy is cancelled and rewritten, the rules, rates and classifications effective on the date of the rewritten policy apply.
Most employers continue to routinely renew their workers compensation policies on an annual basis. For them, this change will be
The ARD is the effective month and day of the policy in effect and each annual anniversary thereafter unless a different date has been established by the WCRB or other licensed rating organization.
What is the change effective 5-1-17? Why is it being made now?
WISCONSIN INDEPENDENT AGENT
a nonevent. For others, when a cancellation occurs, the new policy they receive from the rewriting carrier will apply the rates, rules, classifications, experience rating modifications, etc., that are in effect as of the effective date of the new policy.
How will the ARD removal be implemented? WCRB’s standard is to file changes on a new and renewal basis, with a specific implementation date. For this particular item, this means that ARD is eliminated for new, renewal, and rewritten policies effective 5/1/2017 and later. EXAMPLE 1 A policy effective 4/30/2017 (one day before ARD is eliminated) and has an ARD of 8/1/2017. That 8/1/2017 ARD would still apply. When the renewal policy is written 4/30/2018, the rates in effect as of that policy effective date would apply for the full term of the policy. The ARD will apply. EXAMPLE 2 A policy is effective 9/1/2016. The rates effective 10/1/2015 apply until the 9/1/2017 renewal. The policy is cancelled and rewritten effective 5/1/2017. No ARD applies and the rates effective 10/1/2016 are applicable to the 5/1/2017 rewritten policy.
> Matt Banaszynski is the Executive Vice President of the Independent Insurance Agents of Wisconsin. Contact him at matt@ iiaw.com.
DECEMBER 2016 | 5
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ASSOCIATION LEADERSHIP
NEW IIAW BOARD MEMBERS PAM UTPADEL Pam Utpadel is a broker-agent and president of Universal Insurance Advisors, a family-owned employee benefits firm in Appleton, Wisconsin. Pam bought the employee benefits division of the business in 2008. Pam’s 32 years of experience in the industry encompasses property and casualty, employee benefits, Medicare and individual markets. This mix makes her a valued member of the Employee Benefits Committee and the IIAW Board of Directors. During her time on the Board, Pam would like to create even more value for health and life agents to join the IIAW by introducing programs to assist agents with managing their ACA books of business. This could involve software, more carrier engagement, meaningful continuing education, and even agency owner learning workshops. “We must band together to help sustain the value of the independent broker in the eyes of the government and even with our carriers,” she said. “It would be valuable for brokers if we engaged more carriers that specialize in health and ancillary lines of insurance to become members of IIAW.” In addition to her agency responsibilities, Pam served as the 2011-12 president of the Fox Valley chapter of the Wisconsin Association of Health Underwriters. She also is one of the founders of Well City Fox Cities, an initiative of the Wellness Council of America (WELCOA).
MARC PETERSEN Marc Petersen is president of personal lines at American Advantage-Petersen Group, a family-
8 | DECEMBER 2016
owned, full service risk management and insurance agency located in New Berlin, Wisconsin. Since graduating from UW-La Crosse in 2005 with a degree in Finance (specializing in Risk & Insurance), he earned his Certified Insurance Counselors (CIC) designation in 2006 and has served four years on the IIAW’s Emerging Leaders Committee. In 2014, Marc was honored as the Emerging Leader of the Year. Marc’s professional success and service to the Independent Insurance Agents of Wisconsin makes him a welcome addition to our Board of Directors. He began a three-year tenure on the Board this past September. With his experience on the Emerging Leaders Committee, Marc is focused on the next generation of the industry. “I would like to engage the younger generation, and get them more involved in this industry and with the Association. It’s important to have fresh, innovative ideas as we move forward.”
JACK DEMSKI Jack Demski is a commercial insurance advisor with Ansay & Associates headquartered in Port Washington, Wisconsin. Ansay is one of the largest independent insurance agencies in the state with 11 satellite locations in addition to the home office. Jack’s involvement with the Association has practically coincided with the start of his professional life. Since joining Ansay five years ago, he has served four years on the Emerging Leaders Committee, two of those as chairman. For his work on the committee, he earned the Emerging Leader of the Year award in 2015. With a strong work ethic, ambition, and a commitment to the Independent Insurance Agents of Wisconsin, we are grateful to Jack for serving a one-year term on the Board of Directors. “During my time on the Board, my aim is to spread the word about the insurance industry to the leaders of tomorrow, educate and develop professionals looking for guidance, and better the insurance world for the next generation.” WISCONSIN INDEPENDENT AGENT
2016-17 IIAW BOARD OF DIRECTORS
The 2016-17 Independent Insurance Agents of Wisconsin Board of Directors. Front row: Secretary-Treasurer Jason Bott, President-elect Lise Meyer Kobussen, President Matt Weimer, State National Director
Linda Steiner, and Chairman Steve Leitch. Back row: Ryan McClone, Marc Petersen, Pam Utpadel, Jack Demski, Cindy Burns, and Jack Riesch. Not pictured: Mike Ansay, Jerry Couri, and Darrel Zaleski.
RYAN MCCLONE Ryan McClone is executive vice president of McClone Agency based in Menasha, Wisconsin. McClone is a third generation family-owned independent insurance agency with seven locations in the state. Ryan is the grandson of founder, Ralph McClone, who started the business in 1949. After graduating from Lake Forest College in 1998, Ryan began his career as an employee benefits consultant at Unum WISCONSIN INDEPENDENT AGENT
in Milwaukee. In 2006, he joined the family business to open the agency’s Milwaukee branch office. Five years later, Ryan joined McClone’s executive team in his current role. With 20 years of industry experience as a leader, Ryan is an excellent addition to our Board of Directors. “I would like to work with the rest of the board to continue to bring innovative and impactful resources to the membership.”
DECEMBER 2016 | 9
VIRTUAL UNIVERSITY
COVERING A VEHICLE’S EQUIPMENT I’m working on a quote for a piece of new business. I would appreciate your thoughts on an issue currently under review with the underwriter. The insured owns a large work truck that has about $20,000 of specialty equipment attached. The underwriter’s initial indication was to attach the Stated Amount endorsement. I’m not certain that is the best approach; I’ve heard numerous instructors in seminars over the years urge caution about using the endorsement. Any suggestions? I agree with you – the Stated Amount endorsement (CA 99 28) is not my first choice, either. As you know, this endorsement deals with valuation, not coverage. But more on that in a minute. I think the first key issue is whether or not the specialty equipment is covered for physical damage in the unendorsed Business Auto Policy. Here is the pertinent coverage excerpt in Section III Physical Damage [emphasis added]: SECTION III – PHYSICAL DAMAGE COVERAGE A. Coverage 1. We will pay for “loss” to a covered “auto” or its equipment under: a. Comprehensive Coverage b. Specified Causes Of Loss Coverage c. Collision Coverage As you can see, the specialty equipment is automatically covered as the auto’s “equipment.” Attaching the Stated Amount endorsement would have no effect on what is and isn’t covered by the BAP, only how a loss to such property is valued. What often confuses the issue is that the Personal Auto Policy (PAP) excludes certain “equipment” under Part D Coverage For Damage To Your Auto, such as “facilities or equipment for cooking, dining, plumbing or refrigeration, awnings or cabanas, a camper body or trailer, custom furnishings or equipment such as height-extending roofs” and so forth. However, the only types of equipment excluded by the BAP are specific electronic devices. Regardless of whether the equipment on this work truck was installed at the factory, or an after-market specialty shop, or by the truck’s owner, it is still covered by the unendorsed BAP. Therefore, the main stumbling block for the underwriter probably is obtaining sufficient premium for the increased value of the equipment covered by the BAP. And since a key component of physical damage rating is based on “cost new and age group/model year,” determining the value of the additional equipment would have to be done on a case-by-case basis. Here are three options I think could be considered to properly insure the truck and its equipment. To illustrate these in detail, assume the following: (1) the truck has a “cost new” value of $72,000; (2) it is 2 years old, and has an ACV of $60,000; and (3) the equipment has a “cost new” value of $23,000 and ACV is $20,000. Option #1: Rate the truck on the combined cost-new value of the truck (chassis) and the equipment ($72,000 + $23,000 = $95,000),
modified by age group/model year. This if the vehicle came custom-fitted from a conversion shop, such as a fire truck, medical vehicle, etc.
would be relatively easy manufacturer or specialty TV satellite truck, mobile
Option #2: Write the truck in the customary way, and insure the equipment under an inland marine coverage form. Most are ACV, but some can be written on an agreed amount basis. (Agreed amount is different than stated amount – see below). It would be important to write both coverages in the same insurer. I’ve seen cases where the auto coverage and the IM coverage were placed with different insurers, and in situations where only the truck is damaged, and the undamaged equipment has to be removed in order the repair the truck, and neither insurer wanted to pay for the removal and reattachment of the undamaged equipment. One additional advantage of using an inland marine form is that coverage is usually broader than the standard physical damage coverage in the BAP. This is especially important where the equipment is highly specialized, and/or incorporates high-tech electronics. Additionally, an inland marine form which values equipment on an agreed value vs. ACV is preferable. Option #3: Write a BAP with the Stated Amount endorsement (CA 99 28), and schedule the amount of coverage as close as possible to the ACV of the truck and equipment. The danger in using the Stated Amount endorsement is how losses are valued. Here is the key excerpt [emphasis added]: Limit Of Insurance 1. The most we will pay for “loss” in any one “accident” is the least of the following amounts: a. The actual cash value of the damaged or stolen property as of the time of the “loss”; b. The cost of repairing or replacing the damaged or stolen property with property of like kind and quality; or c. The Limit of Insurance shown in the Schedule.
CONTINUED ON PAGE 14
> Mike Edwards is the director of education at the Independent Insurance Agents & Brokers of Louisiana.
The Virtual University is a Big “I” members-only resource. Many articles are based on real-life questions received by the Ask an Expert service. This service ensures that the information is current and topical. Go to www.independentagent. com/Education/VU/. You will need to login with your IIABA username and password before using the VU. The IIABA does not assume and has no responsibility for liability or damage which may result from the use of any of this information.
10 | DECEMBER 2016
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GOVERNMENT AFFAIRS
ELECTIONS YIELD REPUBLICAN GAINS IN WISCONSIN The 2016 election is over and it’s one for historians to write about.
In Wisconsin, voters expanded Republican legislative majorities to historic levels, reelected United States Senator Ron Johnson to another 6-year term, welcomed GOP newcomer Mike Gallagher to the 8th congressional
U.S. House of Representatives and second in the presidential line of succession after the Vice President. In mid-November, Wisconsin Governor Scott Walker assumed the reigns as 2017 national chairman of the Republican
industry and profession. It takes just one onerous state regulation or law to negatively impact your job and your livelihood.
district with 63 percent of the vote, and chose a Republican President for the first time since 1984.
Governors Association (RGA). Republicans are now expected to hold at least 33 governorships next year, something that hasn’t happened in 94 years.
future by considering a contribution to the IIAW Conduit Fund. I look forward to continue representing you at the State Capitol. Please do not hesitate to contact me with questions or issues.
Voter turnout in Wisconsin was about 66 percent of the voting-age population, marking the lowest turnout in a presidential election in 20 years. The roughly 2.9 million votes cast fell below the predicted turnout of 70 percent, which would have been consistent with the past two presidential election cycles. Milwaukee County, which includes Wisconsin’s only Class A city, saw roughly 60,000 fewer votes in this election than in 2012. What is interesting and somewhat surprising is that the lower than expected turnout in the general election completely contradicts record high early voting numbers and the highest presidential primary turnout for both political parties since 1972.
Also notable, Wisconsin Commissioner Ted Nickel, who was appointed by Gov. Walker in 2011, becomes president of the National Association of Insurance Commissioners (NAIC) in 2017. The NAIC advises state regulators on policy implications of federal legislation and other federal and international actions affecting their authority over the insurance business. Regardless of your politics one thing is clear: Wisconsin is uniquely positioned to help lead the country on many fronts.
On a parallel track, I am pleased to report that the IIAW is also well positioned as we enter into With the 2016 elections behind us, the the new, two-year spotlight is now on Wisconsin. The state, legislative session. Over the last arguably, has never been more influential several months up politically than it is today. until the election, your Association Government With the 2016 elections behind us, the Affairs team has been working hard on spotlight is now on Wisconsin. The state, meeting many new candidates around the arguably, has never been more influential state and financially supporting candidates politically than it is today. and incumbent lawmakers who value the importance of our industry. Kenosha native and current Republican National Committee (RNC) chairman, Reince Between conduit and corporate funds, the Priebus, was recently named White House IIAW and its membership disbursed almost Chief of Staff to President-elect Donald $65,000 for 2015-16. An annual report will Trump. Janesville Republican congressman, be published early next year providing more Paul Ryan, retained his position as Speaker details on the Association’s campaign finance of the House with the unanimous support of activities. his caucus just days following the election and despite media reports of his demise. The Thank you to all current participating members House Speaker is the presiding officer of the for stepping up and helping to protect your
12 | DECEMBER 2016
I strongly encourage all of you to invest in your
The following is a brief overview of the 2016 election results.
Presidential Results Donald Trump swept several key battleground states, including Wisconsin where he won the state’s 10 electoral votes with a narrow 48 to 47 percent margin. He is the first Republican to carry the state in 32 years since Ronald Reagan’s re-election. Trump won over voters in 59 out of 72 counties in the state. The soon-to-be official electoral vote results are projected to be 306 for Trump to 232 for Clinton. A transition team has been formed and will be headed up by Vice President-elect Mike Pence. President-elect Trump will officially take the oath of office on January 20, 2017. Libertarian candidate Gary Johnson picked up 3.6 percent of the Wisconsin vote and 3.3 percent nationally. Green Party candidate Jill Stein picked up 1.1 percent of the Wisconsin vote and 1 percent nationally.
U.S. Senate Results Republican U.S. Senator Ron Johnson won the highly watched U.S. Senate rematch by a comfortable 3 percent margin. Democratic challenger Russ Feingold consistently led in all the polls up until the election and was expected to win the race. But Johnson gained momentum in the final weeks to win re-election by a 50 to 47 percent margin. Johnson carried 55 of the state’s 72 counties and Feingold received a lower vote total than Democratic presidential nominee Hillary Clinton. Johnson’s victory helped Republicans WISCONSIN INDEPENDENT AGENT
GOVERNMENT AFFAIRS
The 2016 elections netted GOP gains nationally and in Wisconsin. Senator Ron Johnson retained his seat in the Senate by defeating challenger Russ Feingold. Feingold led in the polls leading up to the election but Johnson carried 55 of the state’s 72 counties to emerge victorious. maintain control of the U.S. Senate with a narrow 51-seat majority.
Democrats and seven Republicans making up 11 percent of the 99-member lower house.
U.S. House of Representatives Results
Some other noteworthy races from the election are:
Across the country, Republicans performed better than they expected by only losing a total of seven seats to the Democrats. In the next Congress, Republicans will have a 239 to 193 majority in the U.S. House of Representatives. All seven Wisconsin incumbents facing re-election easily held onto their seats, while Republican newcomer Mike Gallagher of the Fox Valley, overwhelmingly won the open 8th congressional district. He defeated Democratic challenger and Outagamie County Executive Tom Nelson by a 63 to 37 percent margin. Outgoing Congressman Reid Ribble is retiring at the end of the year. Republicans continue to hold 5 of 8 seats in the congressional delegation. House Speaker Paul Ryan is also expected to keep his high ranking position as Speaker of the House in the next Congress.
Wisconsin State Assembly Results Assembly Republicans returned all their incumbents and open seats, and surprisingly knocked off one Democratic incumbent, Rep. Chris Danou (D-Trempealeau), increasing the Assembly GOP majority to an unprecedented 64 seats. Assembly Republicans went into the election prepared to lose a few seats, but lower turnout hurt many state Democrats down ballot. This is the most seats held by Republicans and their largest majority in the State Assembly since 1956. There are a total of 11 new members in the Assembly - four WISCONSIN INDEPENDENT AGENT
longtime Democratic incumbent Julie Lassa in the 24th District in central Wisconsin. There is likely to be a recount in the 32nd Senate District in the western part of the state where Democratic Senate Minority Leader Jennifer Shilling of La Crosse has a slight lead over Republican Dan Kapanke. At least four new members will join the State Senate in January – three Republican and one Democrat making up 12 percent of the 33-member State Senate. Some notable Senate races include:
a
Longtime incumbent State Sen. Rob Cowles defeated his Democratic opponent John Powers by a margin of 30 percent to win re-election to the 2nd Senate District in the northeast.
a
Republican Robert Stafsholt won the open 29th Assembly District (St. Croix/Dunn) by a margin of 22 percent.
a
In one of the closely watched legislative races this season, Republican Ed Brooks defeated Democratic challenger Arthur Shrader to hold on to the 50th Assembly District (Reedsburg/Mauston) seat by a margin of 16 percent.
a
In the 51st Assembly District (Iowa/ Lafayette), Republican incumbent Todd Novak kept his seat against Democrat challenger Jeff Wright by a margin of 2 percent. This is a heavily Democratic district.
a
Republican Rob Summerfield won the 67th Assembly District (Chippewa Falls) seat by a margin of 28 percent.
a
Republican Pat Snyder defeated Democrat Mandy Wright in the rematch of the 85th Assembly District (Wausau) by a margin of 6 percent.
Wisconsin State Senate Results Senate Republicans increased their majority by at least one seat, from 19-14 to 20-12, with one race still too close to call. Republicans held onto the open 18th Senate District and, in a surprising upset to many, knocked off
a
In the heavily contested race for the open 18th Senate District, Republican Dan Feyen defeated Democrat Mark Harris by a margin of 12 percent. This was a seat Democrats had hoped to pick up.
a
State Sen. Jennifer Shilling in the unofficial canvass leads challenger Dan Kapanke by just 56 votes. Over 86,000 votes were cast in the race and this one appears to be headed for a recount. Normally, this is a heavily Democratic district in a presidential election year.
a
In the biggest surprise to many observers, Republican Patrick Testin of Stevens Point won 52 percent of the vote in the 24th Senate District ousting longtime Democratic incumbent Julie Lassa. Testin, who now goes on to serve a 4-year term and who previously failed at running > Misha Lee is Owner/ for Assembly Founder of Lee several years ago, Government Relations, LLC and lobbyist increases the Senate for IIAW. Follow Lee Republican majority Government Relations from 19 to 20 seats. on Twitter@mishavlee.
DECEMBER 2016 | 13
TECHNOLOGY
STAY STRATEGIC: DESPITE INSURTECH GAINS, INDEPENDENTS ARE SECURE have been remarkably unmoved by the threat InsurTech startups represent. According to a joint report from Vertafore and Hanover Research, 76% of agencies view these entrants as a small threat or not a threat at all – down notably from the 54% of agents who said they felt moderately to seriously threatened a year earlier. And that’s as it should be, a bevy of industry figures suggest – provided agencies make the technological adjustments necessary to reflect changing consumer mores. “Independent agents are acutely aware of the disruption facing their industry and their businesses, but they’re not letting it impact their spirits,” said Bruce Winterburn, vice president of industry relations at Vertafore. “By doubling down on technology
The InsurTech space is booming. According to a Dow Jones VentureSource report, venture capital firms put $167 million into insurance technology companies in the third quarter. In fact, the space saw more funding in each quarter of 2016 than in any corresponding period last year, and InsurTech Connect – a new conference targeted at these groups – exceeded their aggressive target of 1,000 attendees by drawing a crowd of 1,500 in Las Vegas earlier this month.
Despite the influx of cash and confidence, the nation’s independent agencies have been remarkably unmoved by the threat InsurTech startups represent. While the aims of these startups vary, many are focused on distribution. The fact that the area has traditionally been dominated by the independent agency means there are certain pain points in the system that can be addressed by better technology, says Matt Miller, founder and chief executive of Embroker. “There’s a massive opportunity for welldesigned modern technology products to transform the world of commercial insurance, which is unsustainably inefficient,” explained Miller, whose company formally launched this week. Yet despite the influx of cash and confidence, the nation’s independent agencies
that bolsters customer relationships and continuing to integrate mobile technology into the whole of the business, the research shows the investment is paying off.” Recently conducted research in the sector tends to agree. An August report from Applied Systems showed that while only 25% of agencies currently use a client self-service portal, those who do have 9% higher revenue per employee. Precious time is also saved by using such tools as the cloud, business intelligence software, market search functionality, download and real-time capabilities. By attracting more money into insurance distribution, InsurTech startups may actually
help agencies more fully recognize these and other opportunities, said Applied Chief Executive Reid French. “At the end of the day, competition brings out the best in everybody,” French told Insurance Business America at AppliedNet last month. “It can help to spur activity in the independent channel to make sure it’s up to speed and ready to handle its customers whenever and however they want to be handled.” And while mainstream carriers are connecting with InsurTech startups – The Hartford and Travelers have signed on with Embroker, for example – they are also continuing to invest in the independent channel. The Hartford recently announced new download capabilities in the area of ACORD eDocs, which have been shown to improve agency efficiency by at least one hour a day per employee for the majority of firms. The important variable in the equation is whether or not agencies take advantage of these new offerings, says Michael Howe, senior vice president of product management with Applied. “You will always need someone to help you make smart choices in the complicated world of insurance, so the core value proposition offered by agencies will continue to exist,” he said. “If agencies don’t adapt and evolve with time, though, customers will go somewhere else and > Caitlin Bronson is a these startups could senior journalist with absolutely be a threat.” Key Media.
COVERING A VEHICLE’S EQUIPMENT CONTINUED FROM PAGE 10
Note that the endorsement never pays more than ACV, nor does it add specific coverage for equipment. Its sole purpose is to provide an alternative valuation method. In contrast, if an inland marine form was written on the equipment on an agreed value basis, ACV is not used, but instead the maximum amount payable is the valued agreed to by the insured and insurer. While not part of your question, is there a potential for loss of
14 | DECEMBER 2016
business income if there is damage to the truck or the equipment? For example, some businesses depend heavily on their vehicles as the source of their income. This runs the gamut from food trucks to shredder trucks, to mobile medical, dental or veterinarian vehicles, and so forth. If you have an interest in this, login to the Virtual University (independentagent.com/Education/VU/) and search for article titled, “Business Income from Specialty Vehicles.” WISCONSIN INDEPENDENT AGENT
© SECURA Insurance
Let’s be there when they need that little push.
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Watch: secura.net/partners DECEMBER 2016 | 15
CONTINUING EDUCATION
ABEN ONLINE CE CLASSES
ABEN ONLINE CE CLASSES, continued
Certificates of Insurance: Emerging Issues and Other Stuff That May Scare You! 3 CE Credit Approved Date: December 19, 2016 Location: ABEN Online – iiaw.aben.tv Time: 10:00 AM – 1:00 PM
Commercial Property Endorsements That Can Make You Money 2 CE Credits Approved Date: January 17, 2017 Location: ABEN Online – iiaw.aben.tv Time: 1:00 – 3:00 PM
From Medicaid to the Exchange: What Every Agent Should Know 4 CE Credit Approved Date: December 29, 2016 Location: ABEN Online – iiaw.aben.tv Time: 8:30 – 11:50 AM
E&O Risk Management: Meeting the Challenge of Change 6 CE Credits Approved Date: January 5, 2017 Location: ABEN Online – iiaw.aben.tv Time: 8:00 AM – 2:45 PM
Long Term Care Insurance 2 CE Credits Approved Date: January 6, 2017 Location: ABEN Online – iiaw.aben.tv Time: 8:00 – 10:00 AM
Commercial Claims That Cause Problems 2 CE Credits Approved Date: January 6, 2017 Location: ABEN Online – iiaw.aben.tv Time: 8:00 – 10:00 AM
Data Privacy Insurance 2 CE Credits Approved Date: January 9, 2017 Location: ABEN Online – iiaw.aben.tv Time: 12:00 – 2:00 PM
Ethics in Today’s Changing Times 4 CE Credits Approved Date: January 17, 2017 Location: ABEN Online – iiaw.aben.tv Time: 2:00 – 6:00 PM
E&O Risk Management: Meeting the Challenge of Change 6 CE Credits Approved Date: January 19, 2017 Location: ABEN Online – iiaw.aben.tv Time: 9:00 AM – 3:45 PM
Premium Financing 2 CE Credits Approved Date: January 20, 2017 Location: ABEN Online – iiaw.aben.tv Time: 10:00 AM – 12:00 PM
Cyber Gaps, UASs and TNCs 3 CE Credits Approved Date: January 31, 2017 Location: ABEN Online – iiaw.aben.tv Time: 1:00 – 4:00 PM
From Medicaid to the Exchange: What Every Agent Should Know 4 CE Credit Approved Date: February 8, 2017 Location: ABEN Online – iiaw.aben.tv Time: 12:00 – 3:20 PM
Ethics in Today’s Changing Times 4 CE Credits Approved Date: February 15, 2017 Location: ABEN Online – iiaw.aben.tv Time: 2:00 – 6:00 PM
Insuring Condominiums 3 CE Credits Approved Date: February 21, 2017 Location: ABEN Online – iiaw.aben.tv Time: 9:00 – 11:00 AM
FOR MORE CLASSES AND TO REGISTER, PLEASE GO TO IIAW.COM
INDUSTRY FORECAST
CRYSTAL BALL: WHAT TO EXPECT IN
COMMERCIAL INSURANCE PRICING IN 2017 The marketplace for commercial insurance will continue to favor insurance buyers in 2017, particularly those with strategic risk management and risk transfer strategies, according to Willis Towers Watson’s 2017 Marketplace Realities report (go to willistowerswatson.com and enter Marketplace Realities 2017: The search for growth in the Search bar).
The report points to strong marketplace capacity as a key driver in market conditions and contends that this ample capacity will likely allow insurers to absorb any natural catastrophe losses in 2016, including those from Hurricane Matthew and the Atlantic hurricane season. Overall, buyers’ individual risk profiles will determine their fate at the negotiating table, according to the report. But in general, downward or stable pricing will continue for most property and general liability risks, while certain lines such as cyber, auto liability and health insurance will see rate increases. “The mix of increases and decreases, while subject to some change line by line, overall remains steady,” said Matt Keeping, Willis Towers Watson head of broking, North America. “The marketplace continues to offer opportunities for buyers, but as always, strategic planning yields the best results. The key point for buyers is to understand the nuances of the market so they can optimize their risk management programs.” In property lines, the ongoing declining rate trend continues, according to the report. Catastrophe-exposed programs, having led the softening cycle last year, continue to lead the declines. Property rates are expected to decline 7.5 percent to 10 percent for companies without significant exposure to natural disasters and 10 percent to 12.5 percent for those more exposed. For general liability, rates for 2017 are expected to be down 5 percent to flat, although buyers with recent claims can anticipate increases of 5 percent to 10 percent. Workers’ compensation costs are forecast to remain steady, with small increases or decreases for most buyers. In the auto liability line, an increase in the frequency and severity of losses is driving up rates as much as 10 percent. International casualty rates are predicted to remain flat or fall by up to 10 percent. Cyber renewals are facing primary premium increases of 5 percent to WISCONSIN INDEPENDENT AGENT
10 percent for most buyers, and 15 percent to 20 percent for point-ofsale retailers and large health care companies with no loss experience. For organizations with strong risk controls, premium increases can be lessened. Organizations that operate in the middle-market space (annual revenues below $1 billion) can expect a very competitive cyber-market with aggressive pricing and broad policy language, as many carriers are eager to write these accounts, the authors of the report said. In executive risk lines, buyers will continue to find a mix of modest increases and decreases, with rate increases driven largely by adverse risk profiles. For example, in the errors and omissions market, large technology companies with new media and service offerings can expect to see rate increases due to expanding global privacy laws. Meanwhile, the directors and officers liability market remains robust as insurers roll out coverage enhancements and buyers are obtaining unprecedented value in the trade-off between terms and price, according to the report. “While insurance companies have been struggling to achieve the level of growth that shareholders and industry analysts hope to see, the overall stability of the industry—its ability to absorb losses, pay claims following catastrophes and support sustainable business growth—is a positive sign,” Keeping said. The report summarizes lines for which increases and decreases are expected each year. The most notable change from last year’s report moves the auto line into the “increases” category. Willis Towers Watson had predicted a mix of small increases and decreases for the auto line in its forecast for 2016 published in October 2015. Casualty, for which decreases were forecast in the prior report, will see smaller decreases and some increases in 2017, the report says. > Source: Willis Towers Watson. Originally published on carriermanagement.com.
DECEMBER 2016 | 17
COMMENTARY FROM COUNSEL
FLSA SALARY BASIS INCREASE PUT ON HOLD:
WHAT NOW? With those words, a district court in Texas put on hold the implementation of the new rules applicable to the White Collar Exemptions under the Fair Labor Standards Act (FLSA). The rules, originally scheduled to go into effect on Dec. 1, 2016, have been indefinitely delayed for employers throughout the United States. In granting the injunction, the court stated that the plaintiffs (various states and business groups)
“The Court finds the public interest is best served by an injunction.” for hints about what could happen with the rule in the news media, especially when President-elect Trump names a nominee for secretary of the DOL. Will the judge lift the injunction and allow the rule to be implemented before Jan. 20, 2017? The judge has already started the process for accepting arguments from both parties, and it is possible he could make a final decision before Jan. 20, 2017. That decision, however, could be
The rules, originally scheduled to go into effect on Dec. 1, 2016, have been indefinitely delayed for employers throughout the United States. challenging the rule had shown a likelihood of success in their arguments that the Department of Labor (DOL) exceeded its statutory authority in issuing the rule. As a result, the court will now spend time reviewing the arguments of both parties in depth before making a final decision. The next big date is Jan. 20, 2017, when President-elect Donald J. Trump is sworn in as President. It is not clear what a DOL under President Trump would do with the rule. Watch
appealed no matter who wins at the district court level. During an appeal, the injunction could remain in place. Practically, what does this mean for employers? It means you have options. In large part, an employer’s next steps depend on the message that has been delivered to employees already and systems you have in place to implement the new rule. Has the company informed those to-benewly-non-exempt employees that they would start receiving overtime compensation as of
EVERY DAY. EVERY HOUR. ALWAYS.
Dec. 1? If so, then the company will need to decide whether to roll back that promise. (Note that, if you conducted an audit and determined that, based on the employee’s responsibilities they do not meet the duties test, you should nonetheless reclassify them as non-exempt to avoid potential claims in the future). Overtime for those newly non-exempt employees may not be required any longer as of Dec. 1, but a company must balance what is required by law with the human resources impact of taking that potential benefit away from employees. Watch this column for more updates as developments occur. (Editor’s note: Accompanying Josh’s article on the next page is the IIABA’s guidance about this issue. It explains the impacts of the Big “I” lawsuit and injunction.)
> Josh Johanningmeier is the IIAW’s General Counsel. Call the Legal Services Hotline at (877) 236-1669.
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What Does the DOL Overtime Rule Delay Mean for Independent Insurance Agencies? (November 28, 2016) In a striking legal victory for independent insurance agencies and the Big “I”, a federal judge in Texas issued a temporary injunction on November 22 to delay implementation of the Department of Labor (DOL) overtime rule pending the outcome of ongoing litigation. The injunction is the result of lawsuits filed by the Big “I”, other business groups, and 21 state governments. The Big “I” is the only insurance trade association to join the lawsuits. What are the immediate implications of the court’s ruling? The overtime rule, including the provisions related to commissions, will not go into effect on December 1, 2016. While agencies do not need to implement changes to comply with the rule by December 1, the court, after hearing the full case, may still allow the rule to go forward. In the meantime, agencies are still required to comply with current state and federal labor laws, but they will not be liable for complying with the new overtime rule. There is more time for Congress or the new Administration to stop or seek changes to the rule. The incoming Trump Administration now has more time to make changes to the rule, end the rulemaking permanently, or issue a new rule. Congress could also address the final overtime regulations during December or after the beginning of the 115th Congress. What’s next? The court’s decision is welcome news for agencies that have been struggling with the impacts of the rule. The court’s decision is likely to take some months. While the court decision is pending, and potential changes to the rule are considered, some uncertainty for agencies on if the rule will ultimately be enacted, and if so how it might change, will exist. However, the hope is that final disposition on the rule will result in a more workable rule for both agencies and their employees. If your agency has already started to implement changes in anticipation of complying with the new rule, it is at the agency’s discretion whether or not to leave those changes in place until a final decision is made by the court, or otherwise. If you have not yet started to implement changes you may wish to delay any decisions until more information is available. In the meantime, all agencies are encouraged to ensure that they are in compliance with existing federal and state employment laws.
More information on the rule and current laws can be found at: independentagent.com/GovernmentAffairs. Login is required.
AGENCY MANAGEMENT
WHAT SETS YOUR AGENCY APART
FROM THE COMPETITION?
Years ago, a mentor of mine would say the independent agent space was like a cult, because we all say the same thing when asked to explain why we’re different: “We have great service, we’ve been in business for ‘X’ years, we’re active in the community, and if you ever have a claim, I’ll be there for you.”
Independent agents, does this sound familiar? New salespeople are often asked to refine their “elevator pitch” or “value proposition.” This is what you’ll say when a prospect asks why they should buy from you instead of the competition — and it needs to be said quickly, as if you were truly telling them in an elevator. Your goal is to find a differentiator — something that makes you stand-out above everyone else — that can be delivered concisely and consistently by every independent agent in your office. Differentiators can take many forms — you, your agency, coverage, hours, programs or a need you discover during the sales process. If you don’t have something different than the competition, then
small and short-term, and don’t write nearly as much new business — or repeat business — as the independent agents that follow the core principles I’ve outlined. Beyond developing your differentiation and elevator pitch, here are my suggestions on a few basic methods to convert a higher percentage of your prospects into new business: Don’t “always be closing.” Sure, it’s the goal, but the hard sell leaves your prospects feeling shell-shocked, and likely to hightail it out of your office. That said, ask. Asking for the sale will increase your close rates dramatically. Ask for the sale 100% of the time — but do so respectfully.
One thing to remember about differentiators — think about the prospect and what’s important to them.
price is all that matters. I’m not saying consumers aren’t price-driven, especially in auto insurance. However, everyone reading this article has clients on the books that received a lower price from other agents than the one you offered, but still bought from you. Why is that? Why would they pay more, and how can we make that the norm, as opposed to the exception? But let’s be honest, if you need the lowest price to sell something, you’re not a salesperson — at least not in this industry. The worst way to start a conversation with a prospect is “Let’s see if we can save you money” or asking questions such as “Is my quote the lowest you heard”? Re-frame the conversation to “We’ll find you the best coverage for the best price,” and then document several differentiators so when you’re close on price, you’re winning business — because of these unique differentiators. One thing to remember about differentiators — think about the prospect and what’s important to them. Too many times we’re locked into our day-to-day activities and are inwardly focused — “of course it’s important, it’s important to me!” Turn outward and do something critical: Listen to your client. You’ll learn what’s most important to them, and build rapport throughout the sales process. In my career, I’ve listened to thousands of recorded phone calls and agents that discuss benefits, features and build rapport—all while touting their differentiators. These are the independent agents that have the most success. Agents that focus solely on price are thinking
20 | DECEMBER 2016
It’s not about price. Prospects will always tell you the reason they requested a quote is to save money, and that’s true, to a point. It’s up to you to find the real reason. Always stay positive. Negativity is felt over the phone and hurts conversions. Embrace rapport. Be a great listener and learn why the prospect is shopping. You’ll be surprised at how often they’re not shopping price. Be quick. Speed applies to your contact strategy, quoting process, application taking everything in between. The 21st century consumer expects speed, so your pace determines whether or not you close a sale. Have fun. Prospects can sense a positive attitude and want to work with charismatic people. If you’re not feeling it, fake it until you make it! Data. Track metrics and learn to use data for important business decisions. Make statistics visible to everyone and create friendly competition. As competition becomes fiercer than ever and direct writers are commoditizing insurance, independent agents need every advantage possible to compete.
> Stuart Ganis is the founder of Ganis Consulting, which provides sales, marketing, operations, and mergers and acquisition consulting to insurance agencies.
WISCONSIN INDEPENDENT AGENT
WISCONSIN INDEPENDENT AGENT
DECEMBER 2016 | 21
WS E N E H T N I S R E B M ME Mandwee Promoted to Fleet Underwriter
Adam Mandwee
J.M. Wilson is pleased to announce the promotion of Adam Mandwee as Fleet Underwriter in their Portage, Michigan office. Adam is responsible for quoting new and renewal fleet transportation accounts, setting up and binding policies and serving independent insurance agents in 21 states. Prior to this promotion, Adam served as an Assistant Fleet Underwriter.
Prior to joining J.M. Wilson, Adam was the General Manager at Zooroona Mediterranean Grill and a Supervisor at Tiffany’s Wine and Spirits. Adam attended Western Michigan University where he earned a Bachelor’s Degree in Business Management with a minor in General Business.
Dodd Awarded 2016 Acord Scholarship J.M. Wilson Corporation is proud to announce that Property & Casualty Technician, Devan Dodd, is a 2016 ACORD Scholarship recipient. Devan was recognized among 4 other young professionals and Devan Dodd students working in the insurance industry at the recent ACORD2016 Conference held in Boca Raton, Florida. Devan is a student at Western Michigan University and has been with J.M. Wilson for 3 years. ACORD, a non-profit organization founded in 1970, provides the global insurance industry with data standards and solutions that facilitate accurate, effective, and efficient data exchange. As a member-driven Standards Development Organization (SDO), ACORD brings together a diverse mix of industry stakeholders having a vested interest in improving effectiveness and efficiency.
O’Leary Earns Lean Six Sigma Green Belt Certificate J.M. Wilson is pleased to announce Director of Strategic Quality, Kristin O’Leary, recently earned her Lean Six Sigma Green Belt Certificate of Achievement from Villanova University. Lean Six Sigma is a Kristin O’Leary disciplined, data-driven approach and methodology for eliminating defects in any process. As a green belt, Kristin will lead process improvement teams to consistently eliminate inefficiencies and increase quality through continual improvement. Kristin first came to J.M. Wilson in 2005 as an Intern in the Marketing department and was hired as Research Coordinator that same year.
22 | DECEMBER 2016
In 2012, she was promoted to Project Coordinator and was promoted to her current role in 2015. Kristin earned a bachelor’s degree from Western Michigan University with a major in Marketing and has since achieved Project Management Mastery training from Stanford University. She is currently an active member of the American Society for Quality. For more about J.M. Wilson, please visit jmwilson.com.
Acuity Adopts Valen Analytics Platform Mutual insurance firm Acuity will adopt Valen Analytics’ InsureRight platform for its workers’ compensation business line, Valen said in a recent statement. Acuity’s workers’ compensation business represents 31% of its commercial lines, and a quarter of the company’s total premium. In its engagement with Valen, Acuity will use the Predict and Manage applications. Predict is a predictive analytics tool that enables underwriters to make more informed and consistent decisions relating to risk quality. Manage, on the other hand, provides performance indicators that helps insurers better manage their portfolio. The implementation of the custom built predictive model on the InsureRight platform will be directly integrated into the underwriter’s work processes. The applications are expected to enable real-time decision support for more efficient and accurate risk assessment of policies. “In the process of selecting which partners to work with, we ensure that their values match our own,” said Ed Warren, Acuity’s vice president of commercial lines, in the statement. Additionally, Valens chief executive Dax Craig said, “We are excited to work together to help Acuity utilize our analytics platform and gain a competitive edge in their worker’s compensation business.” For more about Acuity, please visit acuity.com. Allie Sanchez of Insurance Business America wrote this article.
Society Names Saldana Director of Commercial Underwriting Society Insurance has announced the promotion of Dennis Saldana to director of commercial underwriting. In his new role, Saldana will be responsible for Illinois, Indiana, Iowa, Tennessee and future state expansion. WISCONSIN INDEPENDENT AGENT
WS E N E H T N I S R E B M ME Saldana brings more than 18 years of commercial underwriting experience to this position from both inside and outside of Society Insurance. Since joining Society in 2003, he has served on many leadership committees throughout the company. Prior to accepting this new role, Saldana was a commercial underwriting manager for the state of Illinois. “Dennis’ experience and creative approach to problem solving will make him valuable in this role,” said Holly Lifke, Society’s vice president of commercial underwriting. “He has led the underwriting side of Society’s most recent state
Dennis Saldana
Attorney ROBERT PROCTER
Attorney TIM FENNER
Attorney MICHEAL HAHN
expansion in Tennessee, demonstrated the ability to stabilize and turn around volatile markets to growth and profitability success, and has worked closely with his team to develop them individually.” Saldana received a bachelor’s degree in marketing from Drake University in Des Moines, IA. He has earned his Certified Insurance Counselor (CIC) designation and is a commercial lines committee member with the National Association of Mutual Insurance Carriers (NAMIC). For more about Society, please visit societyinsurance.com.
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DECEMBER 2016 | 23
INDUSTRY REGULATIONS
AUDIT NONCOMPLIANCE CHARGE IN EFFECT JAN. 1, 2017 The Wisconsin Compensation Rating Bureau (WCRB) adopted (and OCI approved) an Audit Noncompliance Charge (ANC) in March 2016. These changes become effective January 1, 2017, applicable to new and renewal business only. The ANC’s purpose is to provide uniformity in assessing a penalty for noncompliance with the final audit of an expired policy. The ANC is premium and is subject to premium tax. After discussion regarding OCI’s concerns over the characterization of the ANC, the carriers, WCRB, and its members agree that the ANC is acceptable with the following amendments:
Current term policies cannot be canceled for nonpayment of the audit bill. Likewise, this additional audit premium cannot be sent to a collection agency.
mandatory NTC. Therefore, subject to fine for carrier non-compliance.
>
There are no changes to the Wisconsin cancellation rules.
For example: $50,000 Estimated Annual Premium + $100,000 Audit Noncompliance Charge ________________________________________ $150,000 Total Amount Due
This filing establishes uniform rules, an endorsement, and statistical code related to auditing and reporting of noncompliant accounts. Penalties for noncompliance will not be used in the calculation of the experience modification nor be used in ratemaking.
> > The ANC penalty is fixed at a flat 2 times the estimated annual premium. The ANC is not a premium surcharge. It is an incentive for the insured to cooperate with the premium audit as required by the policy contract. This will affect all workers’ comp and pool policies.
24 | DECEMBER 2016
The ANC endorsement is mandatory on all Wisconsin worker’s compensation insurance policies. The ANC endorsement will be treated the same as the Wisconsin Law Endorsement and the Wisconsin Cancellation and Nonrenewal Endorsement. Policies without the ANC endorsement attached will be sent a
Changes to the Wisconsin Basic Manual, the Wisconsin Statistical Plan Manual, and the premium algorithm will be posted to the WCRB Website along with the Audit Noncompliance Charge Endorsement WC 00 04 24. Please go to wcrb.org for more. WISCONSIN INDEPENDENT AGENT
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When it comes to securing your future, there’s no room to miss the mark. The Big “I” MEP 401(k) Plan was designed with our Big “I” members’ needs in mind. By capitalizing on our collective size, the Big “I” assembled a line up of best-of-breed retirement providers usually only available to Fortune 500 companies. With the Big “I” MEP 401(k) Plan, members experience all the benefits of an unbundled plan without having the stress of managing the providers. Big “I” Retirement Services, in conjunction with our administrator, serves as a gatekeeper and provides members with one main point of contact for the operation of your plan. The MEP is a top-tier 401k plan with low cost mutual funds, competitive administrative costs, cutting edge educational tools and plan consulting. Learn how our plan compares; contact us for a complimentary consultation today. Participation in our plans is available exclusively to Big “I” members.
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©2016 Big “I” Retirement Services, LLC (“BIRS”), sponsor of the Big “I” MEP 401(k) Plan. Participating employers may retain limited fiduciary responsibility in connection with a decision to participate in the MEP and other matters. BIRS assumes fiduciary responsibility of sponsorship and administration unless otherwise delegated. Mesirow assumes certain fiduciary responsibilities as investment manager for investment selection and other similar functions.
2017 PRELICENSING CLASS SCHEDULE
Conducted at State Association Headquarters, IIAW prelicensing classes fulfill the study requirements for life, health, property and casualty. Full course materials — not just an outline — are included with registration. The classes are:
REGISTER AT IIAW.COM 2017 CLASS DATES L IFE & A CCIDENT /H EALTH January 9-12 February 6-9 March 6-9 April 3-6 May 15-18 June 5-8 July 10-13 August 7-10 September 11-14 October 9-12 November 6-9 December 4-7
P ROPERTY & C ASUALTY Jan. 30-Feb. 2 February 20-23 March 27-30 April 17-20 May 22-25 June 19-22 July 24-27 August 21-24 September 25-28 October 23-26 November 13-16 December 11-14
!Designed to help you pass your state licensing examination. !The quickest way to meet the Wisconsin education hours requirement. !Taught by experienced insurance professionals who know the business. !Conducted in a comfortable classroom with free parking. !Approved by the Office of the Commissioner of Insurance.
IIAW MEMBER PRICING: $340 - Pricing given for full class registrations.
NON-MEMBER PRICING: $355 You may also take individual classes.
DAILY SCHEDULE Life & Accident/Health Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Life Policies, Terms & Concepts Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) SECTION B: Life Policies, cont. & WI Life Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) SECTION B: Accident & Health Policies, Terms & Concepts Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Accident & Health, cont. & WI Health Insurance Law
Property & Casualty
Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Property Policies, Terms & Concepts CLASS SITE/DIRECTIONS The IIAW is located at 725 John Nolen Dr. in Madison, WI. Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) When traveling south on John Nolen, it’s the last driveway SECTION B: Property Policies, cont. & WI Property Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) before Highway 12/18 (Beltline). Located near the Alliant SECTION B: Casualty Policies, Terms & Concepts Energy Center and Sheraton Hotel. Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) INCLEMENT WEATHER SECTION B: Casualty Policies, cont. & WI Casualty Insurance Law If weather conditions are questionable, use your own judgment regarding your personal safety. If Madison public ! Please contact Katie@IIAW.com for information about multiple registration discounts. schools are closed, the IIAW is closed and prelicensing is canceled for the day. Canceled classes are made up on The course fee includes all class materials. Materials are Friday. distributed on the first day of class. You receive: HOTEL INFORMATION • The Life & Accident/Health or Prop. & Casualty Insurance Students requiring lodging will receive a special rate at the Study Manual. Clarion Suites, 2110 Rimrock Rd. in Madison. Please call • The Intermediary’s Guide to Wisconsin Insurance Law. the hotel directly at 608.284.1234, and ask for the • The State of Wisconsin Ins. Licensing Candidate Handbook. independent insurance agent’s discount. This provides all the necessary information to obtain a license.
To register, click the Education tab on IIAW.com. For Wisconsin exam info, visit prometric.com.
ERRORS & OMISSIONS
DID YOU ENDORSE YOUR EPLI POLICY TO INCLUDE WAGE & HOUR DEFENSE? On December 22, 2016, a federal judge in Texas imposed a nationwide injunction on the Department of Labor’s (DOL) Overtime Rule. It was originally due to go into effect on December 1 but now the rule is on hold. The next noteworthy date is January 20, 2017, when President-elect Donald Trump is sworn in as President. It is unclear what direction President Trump will take the DOL but there may be clues in the upcoming weeks. He is slated to select a Labor Secretary soon. Despite how the regulations play out, the issue of a coverage gap remains in most Employment Practices Liability Policies (EPLI). In last month’s article, I discussed a couple of key coverage points that are missing from many EPLI policies including Wage & Hour Defense and Third Party Coverage. Since the proposed DOL changes apply to overtime regulations, any new regulations, moving forward, will be up for new judicial interpretation. Although you’d be hard pressed to find a policy to cover the wages duly owed, you certainly should have a policy that responds if you find yourself in the position to defend against unfavorable interpretation of the law.
WISCONSIN INDEPENDENT AGENT
I often hear from agency owners that they aren’t concerned about Wage & Hour Defense because their employees are like family and would never draw them into a lawsuit. I can tell you I’ve seen it happen to Wisconsin agents, even before the restrictive changes. The IIAW partners with Philadelphia Insurance to exclusively offer their EPLI product for agents. Philadelphia’s coverage automatically includes Third Party coverage and can include Wage & Hour Defense for nominal premium. If agents are overlooking these two key coverage points in their own EPLI insurance, what else could be missed or misunderstood? For this, I went to our partner, Philadelphia, for answers to a few common questions: What is the most misunderstood coverage for EPLI? The main coverage that is misunderstood for EPLI is Wage & Hour. We find that Wage & Hour coverage is often misinterpreted to include indemnity, when in fact it is typically a defense only sublimit. What are the most common types of claims? The most common types of
reported claims we experience are Equal Employment Opportunity Commission (EEOC) claims alleging various types of discrimination and harassment.
What are common claims that go uncovered? Common uncovered claims are Wage & Hour claims. Wage & Hour coverage typically requires a supplemental application with favorable responses regarding risk management practices. The supplemental application is often not provided so coverage is not afforded. For more information about what our exclusive Philadelphia EPLI program covers (including Third Party and Wage & Hour), please contact me directly, or go to IIAW.com/EPLI. For more information about the Overtime Rule and an FAQ (updated on September 29, > Meggen Gagas 2016), please go (meggen@iiaw.com) is to IIAW.com/ the IIAW’s Director of Agency Services. OvertimeRule.
DECEMBER 2016 | 27
SALES
WHAT GENUINELY CONFIDENT PEOPLE
DO DIFFERENTLY
True confidence—as opposed to the false confidence people project to mask their insecurities— has a look all its own. One thing is certain: truly confident people always have the upper hand over the doubtful and the skittish because they inspire others and they make things happen.
Whether you think you can, or you think you can’t—you’re right.”
Ford’s notion that your mentality has a powerful effect on your ability to succeed is manifest in the results of a recent study at the University of Melbourne that showed that confident people went on to earn higher wages and get promoted more quickly than anyone else. Learning to be confident is clearly important, but what is it that truly confident people do that sets them apart from everyone else? I did some digging to uncover the 12 cardinal habits of truly confident people so that you can incorporate these behaviors into your repertoire.
good or as bad as people say you are.
2. They Don’t Pass Judgment Confident people don’t pass judgment on others because they know that everyone has something to offer, and they don’t need to take other people down a notch in order to feel good about themselves. Comparing yourself to other people is limiting. Confident people don’t waste time sizing people up and worrying about whether or not they measure up to everyone they meet.
3. They Don’t Say Yes Unless They Really Want To Research conducted at the University of California in San Francisco shows that the more difficulty that you have saying no, the more likely you are to experience stress, burnout, and even depression. Confident people know that saying no is healthy, and they have the self-esteem to make their nos clear. When it’s time to say no, confident people avoid phrases such as “I don’t think I can” or “I’m not certain.” They say no with confidence because they know that saying no to a new commitment honors their existing commitments and gives them the opportunity to successfully fulfill them.
In order to be confident in what you do, you have to be happy with who you are.
1. They Get Their Happiness from Within Happiness is a critical element of confidence, because in order to be confident in what you do, you have to be happy with who you are. People who brim with confidence derive their sense of pleasure and satisfaction from their own accomplishments, as opposed to what other people think of their accomplishments. They know that no matter what anyone says, you’re never as
28 | DECEMBER 2016
HENRY FORD
4. They Listen More than They Speak People with confidence listen more than they speak because they don’t feel as though they have anything to prove. Confident people know that by actively listening and paying attention to others, they are much more likely to learn and grow. Instead of seeing interactions as opportunities to prove themselves to others, they focus on the interaction itself, because they know that this is a far more enjoyable and productive approach to people.
5. They Speak with Certainty It’s rare to hear the truly confident utter phrases such as “Um,” “I’m not sure,” and “I think.” Confident people speak assertively because they know that it’s difficult to get people to listen to you if you can’t deliver your ideas with conviction.
6. They Seek Out Small Victories Confident people like to challenge themselves and compete, even when their efforts yield small victories. Small victories build new androgen receptors in the areas of the brain responsible for reward and motivation. The increase in androgen receptors increases the influence of testosterone, which further increases their confidence and eagerness to tackle future challenges. When you have a series of small victories, the boost in your confidence can last for months. WISCONSIN INDEPENDENT AGENT
SALES
7. They Exercise A study conducted at the Eastern Ontario Research Institute found that people who exercised twice a week for 10 weeks felt more competent socially, academically, and athletically. They also rated their body image and self-esteem higher. Best of all, rather than the physical changes in their bodies being responsible for the uptick in confidence, it was the immediate, endorphin-fueled positivity from exercise that made all the difference.
to help get them there. They don’t crave approval or praise because they draw their self-worth from within.
9. They Aren’t Afraid to Be Wrong Confident people aren’t afraid to be proven wrong. They like putting their opinions out there to see if they hold up because they learn a lot from the times they are wrong and other people learn from them when they’re right. Self-assured people know what they are capable of and don’t treat being wrong as a personal slight.
8. They Don’t Seek Attention
10. They Stick Their Necks Out
People are turned off by those who are desperate for attention. Confident people know that being yourself is much more effective than trying to prove that you’re important. People catch on to your attitude quickly and are more attracted to the right attitude than what, or how many, people you know. Confident people always seem to bring the right attitude. Confident people are masters of attention diffusion. When they’re receiving attention for an accomplishment, they quickly shift the focus to all the people who worked hard
When confident people see an opportunity, they take it. Instead of worrying about what could go wrong, they ask themselves, “What’s stopping me? Why can’t I do that?” and they go for it. Fear doesn’t hold them back because they know that if they never try, they will never succeed.
WISCONSIN INDEPENDENT AGENT
people, on the other hand, aren’t worried about their relevance because they draw their self-worth from within. Instead of insecurely focusing inward, confident people focus outward, which allows them to see all the wonderful things that other people bring to the table. Praising people for their contributions is a natural result of this.
12. They Aren’t Afraid to Ask for Help Confident people know that asking other people for help won’t make them seem weak or unintelligent. They know their strengths and weaknesses, and they look to others to fill the gaps. They also know that learning from someone with more expertise is a great way to improve.
11. They Celebrate Other People Insecure people constantly doubt their relevance, and because of this, they try to steal the spotlight and criticize others in order to prove their worth. Confident
Building confidence is a journey, not a destination.
> Dr. Travis Bradberry is the co-founder of TalentSmart. Visit talentsmart.com.
DECEMBER 2016 | 29
118 IIAW ANNUAL TH
CONVENTION
SCHEDULE OF EVENTS WEDNESDAY, MAY 3 8 AM 8:30 9:30 AM
CONVENTION REGISTRATION OPENS IIAW AUTOMATION/TECHNOLOGY OPEN FORUM (1 CE FILED) Presented by the Automation/Technology Committee
8:30 10:30 AM
BECOMING A PERSON OF INFLUENCE Presented by Brent Kelly, CEO of BizzGrizz
8:30 – 10:30 AM
FEDERAL HEALTH CARE REFORM: NOW WHAT? (2 CE FILED) Presented by David Grunke
9:30 – 10:30 AM
LEGAL RISK OF AN AGENCY’S WEBSITE (1 CE FILED) Presented by Josh Johanningmeier, IIAW General Counsel
10:45 12:15 PM
WELCOME REMARKS: IIAW President Matt Weimer, Diversified Insurance Solutions
12:30 2:30 PM
KEYNOTE: CREATING GROWTH AND PROSPERITY FOR OUR ORGANIZATIONS: GETTING IN FRONT OF THE NEXT TECH TIDAL WAVE Presented by Artell Smith, Adjunct Faculty, UW-Madison CE SESSIONS Working lunch provided for all sessions AUTONOMOUS VEHICLES AND THE INDUSTRY (1 CE FILED) 12:30-2:30 PM AFLAC BROKER TOUR (2 CE FILED) Presented by Aflac 1:30-2:30 PM INSURTECH (1 CE FILED) Ryan Hanley, Sr. VP of Marketing, TrustedChoice.com 12:30-1:30 PM
2:45 4 PM
CEO Panel Featuring: Ben Salzmann, Acuity; Dave Gross, SECURA; Kevin Steiner, West Bend (tentative).
4:308 PM
CONVENTION SHOWCASE Food and beverage available in exhibit hall. $ 100 awarded every 5 minutes for 1 hour, sponsored by The IMT Group
7:30 – 11:30 PM
CONVENTION COMEDY SHOW Headliner: David Spade (10-11 PM) Opener: Kevin Farley (9:00-9:45) No alcohol will be served during the show. VIP Meet-and-Greet with David Spade to follow VIP package includes: Meet-and-greet, VIP seating, complimentary drinks and beverage service
THURSDAY, MAY 4 89:30 AM
ANNUAL AWARDS BREAKFAST & BUSINESS MEETING
10 11:45 AM
WALKING RISK MANAGEMENT TOUR AT CAMP RANDALL (2 CE FILED) Todd Davis, Principal of Davis Agency
12 PM
CONVENTION ENDS
[ Visit IIAWConvention.com for complete details ]
MAY 3-4, 2017 FEATURED ENTERTAINMENT AND SPEAKERS DAVID SPADE “And you are...?” There’s no doubt who he is! Nominated in
1999 for an Emmy Award for his memorable role as Dennis Finch, the wisecracking, power-hungry assistant on “Just Shoot Me,” David Spade became a household favorite during his five-year stint as a cast member of NBC’s “Saturday Night Live.” The comedian was nominated for a Golden Globe in 2000 and an American Comedy Award in 1999 for his work on NBC’s “Just Shoot Me”. On the big screen, Spade continues to be a box office draw. He was recently seen in Sony Pictures’ GROWN UPS 2 alongside Adam Sandler, Chris Rock and Kevin James. The film earned over $200 million dollars worldwide at the box office. On the small screen, Spade previously starred in the CBS comedy “Rules of Engagement”, which ran for seven seasons from 2007 through 2013. This will be an unforgettable performance!
KEVIN FARLEY is a regular at notable venues such as The Laugh Factory
in LA and Chicago, The Improv in LA and Palm Beach, Florida and The Comedy Store. Farley studied at the famous Second City in Chicago and then soon after starred in films such as Black Sheep (with his brother Chris Farley) and The Waterboy with Adam Sandler.
PAUL ARTELL SMITH has nearly 30 years of experience in all facets of
human resources management and has worked for four industry leaders during his career, including ExxonMobil, Fidelity Investments, Hewitt Associates, and Aon plc. Artell is also currently CEO of two entrepreneurial ventures, WatchWorks Management Consulting and CUPSAFE.
REGISTRATION INFORMATION Your annual convention registration options are below. Option A Full Registration, both Wednesday and Thursday Member: $199 Non-Members: $249 Option B Full Registration, Spouse $119 Option C Wednesday Registration Only Member: $179 Non-Members: $224 All registration options increase $50 on March 1. Group reservations of 8 or more receive a 10% discount. This applies to full registrations only. For complete descriptions, please go to IIAWConvention.com. Cancellations received by April 5 will be refunded less a $10 processing fee. No refunds will be given for cancellations received after April 5. Attire is business casual for all convention events. Questions? Please call the IIAW at (800) 362-7441 or (608) 256-4429. Refer to IIAWConvention.com and our e-brochure for the latest convention information and expanded details of each session.
HOTEL INFORMATION All convention events take place at the Madison Marriott West. The special IIAW room rate is $139 for all rooms. Reserve your room at Marriott.com, or call (888) 745-2032. Please mention that you are attending the Independent Insurance Agents of Wisconsin Convention. Rooms are available for the evenings of May 2-3. The hotel reservation deadline is April 11, 2017.
EXHIBITOR INFORMATION Exhibitor registration fees are as follows: Member registration: $850 until April 1, 2017. After April 1: $900 Non-member: $950 until April 1, 2017. After April 1: $1,000 For complete details and to register as an exhibitor, please visit IIAWConvention.com
NOAA NAMES BIG “I” AS WEATHER-READY NATION AMBASSADOR The Independent Insurance Agents & Brokers of America recently announced its partnership with the National Oceanic and Atmospheric Administration’s (NOAA) Weather-Ready Nation (WRN) initiative. Weather-Ready Nation (WRN) seeks to educate the public on readiness and response to extreme weather, water and climate hazards through a series of interactive online tutorials that present age-appropriate information. The safety modules are customized for children ages 10-12 or 13 to adults. Participants can select modules for a variety of disasters and geographical areas. A certificate is presented upon completion of
safety modules immediately with their clients and employees and to also consider becoming WRN Ambassadors themselves.” As a WRN Ambassador, the Big “I” is committed to working with NOAA and other Ambassadors to strengthen national resilience against extreme weather. In effect, the WRN Ambassador initiative helps unify the efforts across government, non-profits, academia and private industry toward making the
Service director. “We welcome the Independent Insurance Agents & Brokers of America, Inc., as a new ambassador who is committed to empowering its members with lifesaving information about extreme weather events.” Weather-Ready Nation Ambassador and the Weather-Ready Nation Ambassador logo are trademarks of the U.S. Department of Commerce, National Oceanic and
each set of modules. “The Big ‘I’ is proud to partner with NOAA and so many private and public sector stakeholders on such an important initiative to ensure families and businesses are as prepared as possible in the event of a natural disaster,” said Bob Rusbuldt, Big “I” president & CEO. “We encourage our member agencies to share the
country more ready, responsive and resilient against natural disasters. The Big “I” has long held that education and preparedness are keys to reducing the financial and collateral damage when disasters strike. “Ambassadors are critical to building a Weather-Ready Nation,” said Louis Uccellini, Ph.D., NOAA National Weather
Atmospheric Administration, used with permission.
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Resources: ■ Interactive online tutorials & safety modules: meted.ucar.edu/emgmt/wxreadynation/launch.htm For information about Weather-Ready Nation: nws.noaa.gov/com/weatherreadynation ■
Wisconsin STRONG For 85 years Partners Mutual Insurance Company has built lasting relationships with independent agents across the state. We are committed to the independent agency system as the only means to deliver our products and work hand-in-hand to help our agencies grow profitably. For information about becoming a Partners Mutual Insurance Agent please contact Brian Martin at 262.432.3439; Martin.Brian@PartnersMutual.com or Mike Ottman at 262.432.3418; Ottman.Michael@PartnersMutual.com
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WISCONSIN INDEPENDENT AGENT
PMIC_3-75x4-875_WIA.indd 1
6/30/2016 9:30:19 AM
MARKETING
VIDEO CONTENT SET TO BOOM ON SOCIAL MEDIA Online brand marketing specialist Ashley Karhoff said in a recent report that more dollars are going into digital video content, as demand for the medium increases over the Internet, especially on social media platforms. “To illustrate this is eMarketer’s data on the expected ad expenditure in the US over the next four years. These future projections indicate that not only will digital ad spend increase significantly, increasing on average $13 billion every year, but social and video are the only
create bespoke content that address their preferences.
ad types expected to grow in the near future.
higher click through rates than traditional static ads,” she stressed.
While social is expected to grow significantly, video ad types will boom 184% from $9.9 billion to $28 billion in ad spend – making them the fastest growing ad type,” Karhoff cited.
With video adoption still in its early stages, Karhoff also advised companies that now is a good time to experiment with video content delivered through social media and their corporate websites to gain better insight and understanding about how their audience will respond to different forms of video content.
Thus, she said, brands should anticipate the demand for video in their marketing programs. Further, she said that current customer behavior indicates that they will choose to engage with brands that
“In addition, marketers will be creating more video ads, especially on Facebook and Instagram, as they yield more engagement and
> Allie Sanchez writes for Insurance Business America.
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FOOD FOR THOUGHT THE LAST PERSON STANDING FROM THE 19TH CENTURY
Emma Morano today with a picture of herself when she was young.
Born on Nov. 29, 1899, when England’s Queen Victoria was still on the throne, Emma Morano is the oldest living person and the last person alive from the 19th century. She still lives on her own in northern Italy. In 1926, she married and in 1937 her only child was born, but died at a few months old. In 1938, she separated from her husband but never divorced. Until 1954, she was a worker at a jute factory in her town before working in the kitchen of a boarding school. She retired at 75.
When asked about the secret of her longevity in 2015, she first mentioned her daily glass of homemade brandy. But Morano mostly cites her eating habits for helped her live so long. “For breakfast I eat biscuits with milk or water,” she said. “Then during the day I eat two eggs — one raw and one cooked — just like the doctor recommended when I was 20 years old. For lunch I’ll eat pasta and minced meat then for dinner, I’ll have just a glass of milk.” Her physician, Dr. Carlo Bava, is convinced there’s a genetic component as well. “From a strictly medical and scientific point of view, she can be considered a phenomenon,” he told the Associated Press, noting that Morano takes no medication and has been in stable, good health for years. “She has always eaten what she wants, with a diet that is absolutely repetitive,” Bava said. “For years, she has eaten the same thing every day, not much vegetables or fruit. But she’s gotten this far.” Source: USA Today
HAPPY HOLIDAYS FROM THE STAFF OF THE IIAW
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