March 2015 WI Independent Agent by Independent Insurance Agents of Wisconsin

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INDEPENDENT AGENT MARCH 2015

A KEY PIECE OF YOUR BUSINESS PROTECTION

THE IIAW PROFESSIONAL LIABILITY PROGRAM SEE PAGE 5

People who run a business know. The most valuable things

are also the hardest to get.

Your customer’s business didn’t grow overnight. It came from years of hard work, confidence in what they could do, and making smart decisions. That’s why an insurance policy from West Bend makes sense. It protects these valuable and hard-earned businesses so your customers can focus on doing what they do best: making sure their clients look and feel their best. And as an Official Supplier of The Silver Lining, it’s backed by your knowledge and experience. West Bend. Insurance your customers buy when they can’t afford anything less.

wisconsin

INDEPENDENT AGENT MARCH 2015 Eric Schwartz, Editor

Open Door Policy The IIAW Provides A Comprehensive E&O Program . . . . . . . . . . . . . . . . . .5 Professional Development Six Competencies Of A High Level Executive Assistant . . . . . . . . . . . . . . .8

On The Cover…

Virtual University A New Twist In The Evolution Of Carpooling . . . . . . . . . . . . . . . . . . . . . . . 12

is an important piece of your

Government Affairs IIAW Government Affairs Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

of our partnership with Swiss Re

As an IIAW member, E&O coverage membership benefits. We are proud

Errors & Omissions E&O And The ACA: Increase Your Knowledge & Know Your Limits . . . . 16

Corporate Solutions and the A+

Member Profile Austin Mutual & Main Street America: Building A Strong Business And Industry . . . . . . . . . . . . . . . . . . . . . . . . . . 18

provides. It’s the best in the

IIAW Staff Meggen Gagas Joins The Staff Of The IIAW . . . . . . . . . . . . . . . . . . . . . . . .23

E&O program’s features, please see

Members In The News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

5. For a member’s perspective, read

Commentary From Counsel Who Let The Dogs Out? Clarifying The Dog Bite Statute . . . . . . . . . . . . 28

Skip Hansen’s testimonial on page

Technology Make It Harder To Crack Your Pin & Password . . . . . . . . . . . . . . . . . . . . 30

right around the corner!

Superior rated product the company business. For more about the our Matt Banaszynski’s article on page

21. Have a great month...spring is

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 2014-2015 Executive Committee President.................................................... John Wickhem P.O. Box 1500, Janesville, 53547-15 President-elect ................................................ Steve Leitch P.O. Box 85, River Falls, WI 54022 Secretary-Treasurer ....................................... Matt Weimer 100 North Corporate Drive #100, Brookfield, WI 53045 Chairman of the Board ................................ Dave Dunker P.O. Box 443, Brookfield, WI 53008-0443 State National Director ................................ Linda Steiner 555 Main Street #320, Racine, WI 53403 2014-2015 Board of Directors Mike Ansay 101 East Grand Ave. #11, Port Washington, WI 53704 Mark Behrens 555 Main Street #320, Racine, WI 53403 Jason Bott 330 East Kilbourn Avenue, Milwaukee, WI 53202 Gerald Couri 379 West Main Street, Waukesha, WI 53186 Mike Farrell 1300 S. Green Bay Rd., Racine, WI 53406 Chris Hanson 5601 Grande Market Drive, Appleton, WI 54913 Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583 Brian McClone 505 North Westfield Street, Oshkosh, WI 54902 WISCONSIN INDEPENDENT AGENT

Jeff Rasmussen 525 Junction Road, Madison, WI 53717 Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236 Darrel Zaleski 4233 Southtowne Drive, Eau Claire, WI 54701 2014-2015 Committee Chairs Agency Operations....................................... Kim Dandrea 1300 South Green Bay Rd. #100, Racine, WI 53406 Automation/Technology ............... Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949 Emerging Leaders ...................................... Janelle Higgins 6200 Mineral Point Road, Madison, WI 53705-4504 Employee Benefits............................................. Tim Bever 555 Main St. #320, Racine, WI 53403 Finance & Compensation ............................ Matt Weimer 100 North Corporate Drive #100, Brookfield, WI 53045 Government Affairs .......................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045 Industry Relations ....................................... Kevin Murray 525 Junction Road, Madison, WI 53717 Marketing & Membership Development ........... Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610 Smaller Agencies .................................... Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236 Technical ................................................... Mark Truyman P.O. Box 6 , Seymour, WI 54165

> OUR ADVERTISERS AAA ................................................................ 34 ACUITY Insurance ........................................... 35 Amerisafe....................................................... 20 Applied Underwriters ........................Back Cover Badger Mutual ................................................. 31 Burns & Wilcox ................................................. 6 Erickson-Larsen, Inc........................................ 16 Guard Insurance ............................................. 26 IIAW Continuing Education ............................. 32 Insurance Associates of America .................... 14 JM Wilson ....................................................... 22 Northern Underwriting Managers .................. 10 Pekin Insurance.............................................. 29 Robertson Ryan............................................... 13 SECURA Insurance ............................................11 Swiss Re E&O Program .......................... 9, 21, 33 The IMT Group .................................................. 7 West Bend ........................................................ 2 Western National .............................................. 4 Wilson Mutual .................................................. 31 MARCH 2015 | 3

4 | NOVEMBER 2014

WISCONSIN INDEPENDENT AGENT

OPEN DOOR POLICY

MORE THAN JUST A POLICY:

THE IIAW PROVIDES A COMPREHENSIVE E&O PROGRAM

agency with knowledgeable staff, proactively working with customers to put themselves in a position of having less exposure to E&O claims.

DPrevention Tools - Resources for Agency Management. DAgency E&O Self-Assessment. DCoverage Checklists. DDisclaimers. DFile Documentation & Records Retention - You can

For over 25 years, the IIAW Professional Liability Program has been the premiere E&O insurance choice for independent insurance agents and brokers. As an IIAW member, professional liability coverage is just one of your exceptional member benefits. Designed by agents for agents, our E&O Program is administered locally by our expert staff here at the IIAW.

reduce your E&O deductible up to 50% by documentation! Whether your agency operates in a totally automated environment, is still paper-based, or exists anywhere in between, file documentation is rule number one when it comes to protecting against errors and omissions losses. Resources are available to help your agency develop procedures for file documentation including SwissRe/ Westport’s timeline guide for document retention.

Underwritten by Westport Insurance Corp., a member of Swiss Re Corporate Solutions, the program is rated A+ Superior by A.M. Best, and has grown into the largest and most stable E&O program in the nation. Our members rely on this stability and long-term market to protect their greatest assets — their businesses.

DSample Procedures Manual - Sample procedures your agency can use to get started in developing a customized procedures manual.

DTips to avoid the most common E&O exposure. DSample Customer Form Letters - Audits, cancellation,

Our professional liability program is not just a policy – it’s a comprehensive program for agents. Our policyholders have many program features at their disposal such as:

DPremium reduction options. DAsk an Expert - Experts who can usually answer, or find an answer, to your questions.

DE&O Happens - Website (iiaba.net/eohappens) dedicated to E&O risk management for insurance agencies. The website contains claim frequency data, real-life case studies, sample client letters, sample agency procedures and podcasts on important E&O topics.

claims, acknowledgement of coverage rejection.

DVirtual Risk Consultant (partnered with Rough Notes) Subscription provides you access to risk evaluation tools including over 700 specific risks and exposure analysis, customized questionnaires, codes and checklists.

DSwiss Re’s claims department includes a highly rated attorney experienced in handling agency E&O claims. In addition, agents who attend seminars and E&O classes receive a 10% credit on their premium and, according to studies, have fewer claims and perform better.

DClaims Frequency Data - Understanding what drives E&O claims can provide direction in areas within the agency’s operation to focus risk management efforts.

DCommon Errors Alleged - Knowing the common E&O claims can point your agency in the right direction of knowing how to proactively avoid them.

DCommon Problems - To truly eliminate E&O exposure it’s necessary to understand the root cause of E&O losses and implement change at that level. In general, E&O losses occur because of inadequate training and education, poor risk identification and analysis, lack of uniform practices and procedures, inappropriate organizational structure, lack of compliance with office practices and procedures, time constraints and/ or chronic backlog.

DE&O Case Studies - Real-life case studies provide the good, the bad, and the ugly of E&O claims made against agents and provide an excellent learning tools for agency staff to keep E&O claims prevention at the forefront of their minds.

DStandard of Care - Do agents have a duty to advise? Knowing your legal duties as an insurance agent is critically important. A professionally run WISCONSIN INDEPENDENT AGENT

Another very important and often overlooked reason to place your E&O with the IIAW is how we reinvest commission earned from the sale of policies. We return commission earned to our members in the form of industry leading products and services. Without the revenue generated from E&O and cyber liability insurance products, the IIAW would not be able to meet the evolving needs of our members. We keep our finger on the pulse of regulators, legislators and policy so you don’t have to. Currently, the governor included a proposal in his budget that would eliminate the Local Government Property Insurance Fund (LGPIF). We have been advocating for this measure for a long time. The fund, which is the largest of its kind in the country, insures roughly 1,000 properties valued at around $50 billion dollars. Currently, rates in the fund (which lack adequate underwriting) are 40-50% CONTINUED ON PAGE 7

> Matt Banaszynski is the Executive Vice President of the Independent Insurance Agents of Wisconsin. Contact him at matt@ iiaw.com.

MARCH 2015 | 5

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Building restoration projects are a complex business with multiple risks. This presents multiple opportunities for you if you partner with Burns & Wilcox. From builderâ&#x20AC;&#x2122;s risk, to the contractors and architects doing the work, we have solutions for every exposure related to any project. Find the structure you need to capitalize on this opportunity. Work with the global leader in wholesale insurance â&#x20AC;&#x201C; Burns & Wilcox.

OPEN DOOR POLICY

MORE THAN JUST A POLICY:

THE IIAW PROVIDES A COMPREHENSIVE E&O PROGRAM below market, essentially pricing independent agents and the companies they write for out of the market. The fund has experienced a negative net income five out of the last six years and had a loss ratio of 165%. Those familiar with the LGPIF know that the problems mentioned do not even begin the scratch the surface. Here are your premium dollars working for you in more ways than one. We are leading the charge to eliminate the LGPIF and give independent agents the opportunity to write business that previously was virtually untouchable. The elimination of this fund could mean millions of dollars in increased revenue for independent insurance agents across Wisconsin. This is just one illustration of how we are constantly advocating for you in the halls of the Capitol. Agency perpetuation is another way we are working diligently on your behalf. Whether it’s by offering legal services, perpetuation guides, high school and college curriculums preparing and introducing students to careers in insurance, training and onboarding programs for new producers WISCONSIN INDEPENDENT AGENT

CONTINUED FROM PAGE 5

and CSRs, or forming a strategic partnership with UW-Madison to educate current and future managers and agency owners to be better business leaders, we are leading our agencies into the future. When you purchase your E&O or cyber liability insurance through the IIAW, you can trust that you’re receiving a good return on your investment. Remember, we work for you and are here to serve. If you already purchase your E&O insurance through us, thank you. Now go forth and use all the industry leading products and services at your disposal. I am sure you will be impressed. If you currently have your E&O insurance with another carrier, please give us a shot. Get a fast quote. It will only take you a few minutes. It may save you some money, gain you access to tools and resources to help your agency grow and be successful, and you’ll be supporting historical efforts to strengthen independent insurance agencies and our industry in Wisconsin.

MARCH 2015 | 7

PROFESSIONAL DEVELOPMENT

SIX COMPETENCIES OF A HIGH LEVEL EXECUTIVE ASSISTANT

In my last article on professionalism, one of the topics I spoke on was competency. We know that leaders are confident, well versed, trusted and respected. We also know or should know that leaders require a colleague and partner with similar tendencies that represent him or her and the company. That person is a high level assistant that has the ability to free up time for the executive to do his job - and do it well. I recently read that the U.S. Department of Labor estimates the average cost of a bad-hiring decision can equal 30% of the individual’s first-year earnings. For example, an employee making $60,000 annually can potentially cost an employer $18,000. A comment on CareerBuilder indicated that forty-one percent of companies estimate that a bad hire costs more than $25,000, and one in four said it costs more than $50,000. Having a high level competent assistant can help to avoid these pitfalls. Outlined below are six key competencies that define a high level assistant: 1. Effective with Strategic Acumen: To have an outstanding assistant is to have one who saves the executive hours doing tasks that the assistant can handle. That person will save you time, money and increase your profitability. In order to be highly effective the executive assistant has to be able to manage the scheduling of multiple calendars, meetings, details and logistics, and travel arrangements while maintaining open communication with

employees, customers, vendors and visitors. They are polished, poised and polite. They understand the company’s vision and goals and have the ability to keep the executive apprised of the daily happenings in his business. They have intuitive insight to create a well-honed partnership. The role of the assistant should appear seamless to everyone in the office.

correspondence on the executive’s behalf. The high level assistant fences phone calls, is the sounding board for difficult situations that need to be dealt with and looks into technology issues when necessary. This role may also include acting as proxy in meetings whereby freeing up the leader’s time to handle the organization’s strategic goals.

2. Managing Up with Intellectual Insight: This is the assistant who has their pulse on the company. They are the barometer that senses things before they occur, diffuses tension, creates synergy within a diverse culture of personalities and mindsets, and is able to connect to the human side by acknowledging with empathy. They know the expectations and meet critical deadlines, and are able to present different points of view within acceptable parameters. They are the filter for the CEO and the ambassador at large. The executive assistant is the calm in the storm, has the ability to avert conflicts and energize employees with a positive attitude. Face-to-face interaction with others is key to creating cohesiveness within a company.

5. Indispensable Team Player: To be able to build bridges between departments is another strength the high level assistant brings to the table. They know how to respond in a diplomatic way without creating dissention or disgruntled customers. The executive assistant is respected for understanding the importance of confidentiality and adhering to it. They remain subtle as the eyes and ears of the company to diffuse misunderstandings or conflicts that may arise. An indispensable assistant is loyal and knows how to create synergy.

3. Intuitive and Proactive: To be intuitive is to sense what’s coming down the pike before it happens. Knowing what to expect and taking the approach to act rather than react shows the true skill of a high level assistant. When you can ease into a surprise rather than scramble, the waters remain a lot calmer for everyone involved. When the assistant can diffuse a lot of the unknowns, a bond of trust and reliability begin to form creating a well-oiled machine where two people work as one. 4. Key Business Partner: The high level assistant is well versed in multiple areas. For example, they act as the intermediary for the executive by grooming, creating and cleaning up

8 | MARCH 2015

6. Strong Communicator: The high level assistant is able to bring one voice to a document that has many authors. They represent the group by bringing clear, concise, accurate and intelligent information together for viewing. They will ask questions for clarification and give feedback if there are serious concerns on what is being communicated. The executive assistant is the sounding board for the voices behind the document. This role also includes acting as a liaison within the company, working at some capacity within each department, and keeping the lines of communication open. Now that you know the competencies of > Kathy Paulson is the a high level assistant, founder of The Assistants’ how do you find Coach. She is leading a that person? To learn session at the 2015 IIAW Annual Convention. more, please go to Contact Kathy at kathypaulsonconsulting. kapaulson48@gmail.com, com. and 608.220.6918. WISCONSIN INDEPENDENT AGENT

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H Rated A+ by A.M. Best H State of the art coverage form exclusive to Big "I" Members H Claims Made Coveage H Coverage for the sale of both Property/Casualty and Life/Health insurance products H Limits of liability up to $20 million H Broad definition of covered professional services and activities H Comprehensive definition of "who is an insured" H Aggregate deductibles H Defense cost outside the limit H $25,000 1st Party Personal Data Breach (cyber) H $1,000,000 3rd Party Personal Data Breach (cyber) sublimit H Full prior acts available H Deductible reduction up to $12,500 per claim for risk management, no limitation on the number of claims H Catastrophe Expense $25,000 per policy period H Regulatory defense $25,000 per policy period H True worldwide protection H 10% premium credit 3 years for attending an approved loss control program H 10% Premium Credit for 5 years for having an approved in-house E&O audit

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10 | MARCH 2015

WISCONSIN INDEPENDENT AGENT

Let’s make sure they’re safe at home.

Covering all the bases since 1900 Commercial • Personal • Farm-Ag • Specialty WISCONSIN INDEPENDENT AGENT

MARCH 2015 | 11

VIRTUAL UNIVERSITY

A NEW TWIST IN THE EVOLUTION OF CARPOOLING… The U.S. has seen an explosion in what is often referred to as the emerging “sharing economy” or “collaborative consumption.” In an increasingly connected society where most people have access to mobile communication devices, peer-to-peer services are springing up, based on mobile apps that consumers can use to access transportation services that historically have either not existed or were controlled by often highly regulated business or government entities.

One might argue that this is not a new concept, given that hitchhiking has been around since not long after the wheel was invented and was quite common in the 1950s and 1960s until it fell out of vogue as its inherent dangers gained more attention from the media and increasing numbers of consumers owned or had access to automobiles or mass transit. But what we’re witnessing today is a relatively new phenomenon. Uber, Zimride, Lyft, ZipCar, RelayRides, GetAround, TaskRabbit, JollyWheels, RentMyCar, Zilok, CityCarShare, bla, bla, bla, bla, bla...

Which brings us to the latest incarnation of car sharing that has emerged in Europe, BlaBlaCar (blablacar. com). Founded in France in 2006, and featured in a recent Wall Street Journal article, BlaBlaCar now claims to operate in about a dozen European countries and is exploring expanding into other regions such as India and Brazil. BlaBlaCar bills itself as a “ride sharing” mechanism, as opposed to “car sharing,” falling somewhere between fee-based hitchhiking and a somewhat irregular share-the-expense carpooling arrangement. Details on how their system operates can be found at their website.

the U.S. For example, a driver can refuse to transport particular passengers. If such a driver is white and a declined passenger applicant is black, would there be civil rights issues that could be addressed by claims or suits for discrimination? The question addressed by this article is, if BlaBlaCar were to begin operations in the U.S., would the personal auto insurance policies of their drivers cover this type of activity? According to the terms and conditions area of BlaBlaCar’s website and media articles about their service, most auto insurance in Europe covers this exposure because there is no “profit” involved. They refer to the passenger fee as a “cost contribution and claim to ensure that drivers do not make a profit but rather share the cost of a trip with the passenger(s). Their terms and conditions include a stringent hold harmless provision and a liability cap to protect BlaBlaCar. However, their position on how personal auto insurance responds in Europe would be immaterial if they were to commence operations here in the U.S. Many, if not most,

Many, if not most, personal auto policies in the U.S. may exclude this activity regardless of whether a “profit” is sought or made.

BlaBlaCar currently does not operate in the U.S. There is some question as to whether they can be as successful here as they claim to be in Europe. Owning and operating a vehicle in Europe is far more costly than it is here in the U.S. There is also a perception that Europeans may be more trusting of, or accustomed to, riding with strangers than Americans are. In addition, there are social issues to consider in

personal auto policies in the U.S. may exclude this activity regardless of whether a “profit” is sought or made. This could depend on the facts of each situation and the exclusion

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.

12 | MARCH 2015

WISCONSIN INDEPENDENT AGENT

VIRTUAL UNIVERSITY wording in the policy. The first question is whether there can be assurance that a driver is not making a profit. Second, the policy language may not consider profit to be an issue. For example, these are the two most common exclusions found in most U.S. personal auto policies: We do not provide Liability Coverage for any “insured”...For that “insured’s” liability arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance. This Exclusion (A.5.) does not apply to a share-the-expense car pool.

The only conclusion we can reach at this point is that how a vehicle is being used and how that use fits with an insurance policy’s insuring agreements and exclusions are becoming much more important and more difficult to determine.

•We do not provide Liability Coverage for any person... For that person’s liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee. This exclusion (A.5.) does not apply to a share-the-expense car pool. This language is taken from two different

edition dates of the “ISO-standard” Personal Auto Policy. In the case of use as a “public or livery conveyance,” ISO’s filing memorandum stated that the intent of this exclusion is to preclude coverage for vehicles available for “hire” to the general public for the transportation of people or cargo (e.g., taxis, sightseeing vans, package delivery services, etc.). The exclusion is not contingent on the profitability of the person or enterprise holding their vehicle out to the general public for hire. In the case of a vehicle used to “carry persons or property for a fee,” there is no mention whatsoever of whether this fee generates a profit for the owner/driver. In one case, this exclusion was held to apply to someone who used his pickup truck to transport a friend’s son’s belongings to college in exchange for gas money. However, both exclusions admittedly exempt a “share-theexpense carpool.” So what is meant by a “carpool”? One dictionary definition describes it as: ...an arrangement between people to make a regular journey in a single vehicle, typically with each person taking turns to drive the others. Note the reference to “regular” and alternating as drivers. On the other hand, Wikipedia’s discussion of the term “carpool” implies a potentially broader concept that could include how BlaBlaCar operates. This

muddies the water to the point that no blanket statement can be made about how U.S. personal auto policies might respond to claims arising from BlaBlaCar and similar ride sharing services. If this were to become a significant exposure, one might expect U.S. insurers to define “carpool” in a way that precludes coverage for these services. In the past year or two, we have seen various forms of “car sharing” exclusionary endorsements introduced by ISO and individual insurers, though many of them still do not fully address the “share-theexpense carpool” situation. The only conclusion we can reach at this point is that how a vehicle is being used and how that use fits with an insurance policy’s insuring agreements and exclusions are becoming much more important and more difficult to determine. The insurance industry is not known for either its innovation or its ability to respond quickly to emerging social changes. The usual reaction is to exclude an unanticipated exposure until such time that the industry can reasonably measure and predict the risk of loss. The growth of car and ride sharing (not to mention home > Bill Wilson is Director sharing) is something of the Virtual University that will need to be of the IIABA. Contact closely monitored by Bill at bill.wilson@iiaba. net. the industry.

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Plan your future with Robertson Ryan & Associates͘ Ǉ ũŽŝŶŝŶŐ ŽƵƌ ƚĞĂŵ ŝƚ ĂůůŽǁƐ ǇŽƵ ƚŽ͗ ͻ ͻ ͻ ͻ ͻ

Keep your book Remain a trusted advisor to your clients to give them peace of mind ŽŶƟŶƵĞ ǁŽƌŬŝŶŐ ƵŶƟů ǇŽƵ ĚĞĐŝĚĞ ƚŽ ƌĞƟƌĞ Find the right buyer for your book within Robertson Ryan to maximize your return Ğ ŝŶ ƚŚĞ ϯϬй ƚŚĂƚ ŚĂǀĞ Ă ƉůĂŶ

&Žƌ ŵŽƌĞ ŝŶĨŽƌŵĂƟŽŶ ĐĂůů 'ĂƌǇ ƵƌƚŽŶ͕ ŚŝĞĨ KƉĞƌĂƟŶŐ KĸĐĞƌ͕ Ăƚ ϰϭϰ͘ϮϮϭ͘Ϭϯϴϲ͘ ůů ĐĂůůƐ ǁŝůů ďĞ ŬĞƉƚ ŝŶ ƚŚĞ ƐƚƌŝĐƚĞƐƚ ĐŽŶĮĚĞŶĐĞ͘ WISCONSIN INDEPENDENT AGENT

MARCH 2015 | 13

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Not all markets are available in all states.

GOVERNMENT AFFAIRS

IIAW GOVERNMENT AFFAIRS UPDATE With the 2015-16 legislative session well underway, the IIAW’s government affairs team is working on a variety of issues on your behalf at the Wisconsin State Capitol: Closure of the Local Government Property Insurance Fund (LGPIF) Governor Walker in his $68 billion biennial state budget has recommended closure of the Local Government Property Insurance Fund (LGPIF) to allow the private insurance

no longer exists with the wide variety of affordable property insurance products that are available in the private insurance market today. We believe that state government should not be in the business of competing with the private sector and that our industry,

caucus has created a “Red Tape Review” initiative to dissect Wisconsin regulations in the administrative code line by line and make changes that will improve the state business climate. Based on this initiative, we are working with the Office of the Commissioner of Insurance (OCI) and the chairs of the Senate and Assembly Insurance committees on a few, simple regulatory changes that we believe are common sense reforms to help independent agents further their profession. > The first proposed rule change would allow for any excess CE credit hours accrued in an agent’s renewal month to be carried forward into the next reporting period. Current regulations do not allow for this. > The second administrative code rule change we are proposing would allow for education courses related to sales, marketing, and agency operations to qualify for no more than 8 CE credits. Current regulations disqualify these subject areas altogether from being used for CE. We believe these subject areas are fundamentally important to the role of an agent and how they interface with the consumer and therefore should qualify as CE course content.

With the new legislative session underway at the state Capitol, the IIAW government affairs team has been busy advocating for the insurance industry on a variety of important issues. market through agents and carriers to insure these risks. The IIAW strongly supports the governor’s recommendation and is pleased to champion this effort on behalf of our agent members. Your government affairs team in Madison is working closely with leaders in the state legislature and members of the Joint Finance Committee to ensure passage of this provision. The LGPIF is the largest public sector property insurance fund in the nation insuring nearly $52 billion in property owned by 982 public entities that include 69 counties, 128 cities, 161 towns, 242 villages, 252 school districts, and 130 other governmental entities. The fund was created many years ago to ensure those local governmental units had access to affordable property insurance when a viable market to insure these risks did not exist. That situation WISCONSIN INDEPENDENT AGENT

through experienced independent agents, is best qualified to insure these types of risks. The private insurance market will better protect Wisconsin taxpayers, too. Review the most recently filed 2014 annual statement at oci.wi.gov/lgpif/financial.htm to understand that the LGPIF is not in good financial condition.

Continuing Education (CE) Modernization The IIAW has also been leading an industry effort to help streamline and improve insurance agent continuing education (CE) requirements. At the outset of the legislative session, leaders in the State Assembly reached out to the IIAW requesting ideas on how we could improve government regulations for our industry. The Assembly Republican

Oppose Health Care Liability Insurance Out-of-State Risk Retention Group Legislation Last session, the IIAW and the Wisconsin Insurance Alliance (WIA) successfully defeated an effort that would have authorized foreign Risk Retention Groups (RRGs) to legally provide medical malpractice insurance in Wisconsin without having to fully comply with our state insurance laws and regulations. The same legislation is being introduced again this session and we continue to oppose any effort that creates an un-level playing field for out-of-state Risk > Misha Lee is Owner/ Retention Groups at Founder of Lee the expense of a viable Government Relations, LLC and lobbyist medical malpractice for IIAW. Follow Lee insurance market Government Relations CONTINUED ON PAGE 17

on Twitter @mishavlee.

MARCH 2015 | 15

ERRORS & OMISSIONS

E&O AND THE ACA

INCREASE YOUR KNOWLEDGE BUT KNOW YOUR LIMITS The Affordable Care Act (ACA) has created a major shift in the health insurance landscape, forcing independent agents to re-evaluate how they approach servicing their health insurance customers. Businesses will encounter an increased set of variables to analyze when structuring

Here are just a few E&O exposures agents face from the change in health insurance

A “loose understanding” of the ACA will not suffice in the face of so many technical requirements. Like in any new area of business, inexperience can lead to significant exposure.

their health care programs — which means agents will need to know their boundaries and communicate them clearly to manage the expectations of customers.

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delivery and some risk management considerations that could help prevent E&O claims:

Know thy self. Is agency staff knowledgeable and prepared to assist customers? Does it make economic sense to continue to offer health insurance? Don’t make a guinea pig out of your customers if your agency is not committed. Will your E&O coverage respond? Find out if your E&O policy offers the appropriate

WISCONSIN INDEPENDENT AGENT

ERRORS & OMISSIONS property-casualty agents that are using the ACA as a springboard to enter the health insurance marketplace. Don’t dabble. Understanding the insurance plans is not enough. There are thresholds, fines, subsidies and plan requirements to consider. A “loose understanding” of the ACA will not suffice in the face of so many technical requirements. Like in any new area of business, inexperience can lead to significant exposure.

coverage for your health benefits operations. This is especially important for traditional

Protect your data. Cyber liability remains a major exposure for businesses that collect, use

and store Protected Health Information (PHI) and Personal Identifiable Information (PII). Agents need to understand the data protection standards required by the exchanges and how they relate to other privacy laws, such as HIPAA. Exit with caution. Should an agency decide to exit the health benefits business, it must discontinue or transition the business in a way that limits liability to future E&O claims. This includes thorough documentation > David Hulcher (david. of conversations hulcher@iiaba.net) is Big with customers.

“I” assistant vice president of agency professional liability risk management.

GOVERNMENT AFFAIRS

IIAW GOVERNMENT AFFAIRS UPDATE CONTINUED FROM PAGE 15

that already exists in Wisconsin. Despite our lone opposition to the proposal this session, there may be an attempt to include this law change in the state budget. If that happens, it will be difficult to defeat. To counter this measure, the IIAW has proposed draft disclosure language to require foreign RRGs to provide notice to their insureds and prospective insureds of the risks associated with participation in a foreign RRG. The IIAW remains opposed to this effort and will keep you apprised of any new developments as the session progresses.

Worker’s Compensation Wisconsin has one of the best worker’s compensation (WC) systems in the country. Since 1911, our system has been a model because of its efficiency and stability that it provides to workers, employers and insurance industry. Governor Walker in his state budget bill has proposed moving the state Worker’s Compensation Division from the Department of Workforce Development (DWD) to the Office of the Commissioner of Insurance (OCI). Walker is recommending this change because he wants the DWD to be focused WISCONSIN INDEPENDENT AGENT

on job creation and training programs. The governor believes OCI is best suited to oversee the WC system. The IIAW is working with our industry partners, members of the legislature, and the Walker administration to ensure that the transfer of the WC Division, if approved, does not undermine the integrity and strength of our system. In addition, your Association is also working with other state business organizations as part of a larger coalition to advocate for controlling employer health care costs that are overwhelming the WC system. One proposal being considered is the adoption of a medical fee schedule that would put Wisconsin in line with the vast majority of states that have similar cost control mechanisms. The Worker’s Compensation Advisory Council (WCAC) meets monthly and has already begun the process of developing a two-year WC Agreed Upon bill. It remains to be seen whether or not a medical cost containment provision will be included in the Council’s final recommendations to the legislature or if this issue will be addressed separately in the state budget.

Repealing the Personal Property Tax Finally, the IIAW is also working alongside our friends in the business community on advocating for the elimination of, or at a minimum, a gradual phase out of the personal property tax. This archaic tax unfairly burdens small businesses, including IIAW members. Over the years, the legislature has chipped away at the personal property tax with exemptions that arbitrarily pick winners and losers. In the 1970s, manufacturing equipment was exempted, in the 1980s it was agricultural equipment, and in the 1990’s computers were exempted. Eliminating the tax creates a more equitable tax code treating everyone equally under the property tax. More importantly, all of our neighboring states have eliminated or are working towards phasing out the personal property tax and are using it as an economic development incentive. Providing tax relief for small businesses will further improve the state’s economy by allowing for business growth, additional spending and job creation.

MARCH 2015 | 17

By Eric Schwartz

MEMBER PROFILE

AUSTIN MUTUAL & MAIN STREET AMERICA:

BUILDING A STRONG BUSINESS AND INDUSTRY The partnership between Austin Mutual Insurance Company and The Main Street America Group (MSA) has been mutually beneficial. The affiliation has helped the super-regional carrier generate a surplus of over $1 billion and written premium approaching the $1 billion threshold. “With a premium to surplus ratio of .96 to 1, we are well-capitalized to grow,” said Jeff Kusch, the recently appointed senior vice president/head of field operations at MSA. Jeff is responsible for developing and leading the company’s customer relationship strategies, as well as directing the management of regional field operations. The natural fit between the two companies extends beyond the impressive financial standing. Both entities share the common mission to actively support the independent agency system.

agents have to do battle with direct writers the better it is for the independent channel.” Friedlander represents MSA on various Big “I” committees that focus on the independent agency system. Two notable assignments involve the next generation of insurance leaders – InVEST and Young Agents. He is also a member of the Trusted Choice Company Partner Advisory Committee and Agency Best Practices. “The insurance industry needs to do a better job or marketing to the younger generation,” said Friedlander. “The industry desperately needs an infusion of youth and we are passionate about getting the word out. When our executives give presentations and talk about what this industry has to offer, the students are surprised that it’s more than just about selling insurance. There’s communications, customer service and marketing. There is something for everyone.”

Austin Mutual is the newest Exclusive Company Sponsor of the Independent Insurance Agents of Wisconsin. This is a huge commitment from the company that joined the Association last year. In 2001, MSA became a founding partner of the Trusted Choice co-brand. Ten years later, the company stepped up to become one of six charter members to sponsor Project CAP and the founding of TrustedChoice.com. The six original company partners are now a coalition of 70 companies and managing general agencies. “We (MSA) have the reputation of being at the forefront of such initiatives,” said Mark Friedlander, MSA’s head of corporate communications. “The investment is well worth it and we gladly do it.” Kusch continued: “We know who our customer is - the agent. That thinking is part of our culture and it trickles down to all levels of our organization. The more tools that

18 | MARCH 2015

Kusch knows first-hand about opportunity in the insurance industry. He joins a long list of professionals who didn’t intend to make insurance their chosen vocation but are gratified they did. After receiving an accounting degree from Winona State University in 1988 (and playing football on scholarship), Kusch worked for Arthur Andersen LLP and Coopers & Lybrand (now PricewaterhouseCoopers) in public accounting. He became licensed as a Certified Public Accountant in 1991. He acquired insurance experience from a few clients along the way so he was ready when Austin Mutual offered him a job as accounting manager in 1992. Twenty-three years later, Kusch still calls Austin his professional home.

Kusch worked his way up through the corporate ranks at Austin Mutual. He served as treasurer from 1994 to 2004. While still treasurer, he was named president in 2002. He became CEO in 2004 and ascended to chairman of the board in 2009. After Austin partnered with MSA in 2012, Kusch became its Western Region president. He assumed his new national role in February 2015. Tiffany Daly, who was the company’s regional sales director, has been promoted to Western Region president, overseeing its operations in Wisconsin and 18 other Midwest, Southwest and Pacific Northwest States. Throughout his tenure, Kusch has witnessed many ups and downs in the industry, but regardless of the economic landscape, he believes customers will respond to a business with a foundation of integrity and solid products. “The insurance business is built on reputation,” said Kusch. “People buy insurance from agents they know and trust, hoping they won’t need it. But when they do, they want to be confident that the underwriter will be financially secure, their claims will be settled quickly, and their questions answered by competent service professionals. We have that in the people who work here and in the service they provide.” To date, Austin has appointed 40 agencies in Wisconsin since it became affiliated with Main Street America and is looking to grow. The company’s goal is to strategically add 15 agencies in underserved markets by the end of 2015. From a coverage standpoint, Austin offers a full slate of personal and commercial lines products. Its Main Line Business Owners Policy (BOP) provides standard BOP coverages, as well as some 50 additional ones. For example, WISCONSIN INDEPENDENT AGENT

MEMBER PROFILE for agents and policyholders. They demand these efficiencies to make their jobs easier.

Austin Mutual Insurance Company became part of The Main Street America Group (MSA) in 2012. Since then Austin has appointed 40 independent agencies in Wisconsin and is looking to grow. The leadership’s goal is to add 15 agencies by the end of 2015. From left: Jeff Kusch, senior VP/head of field operations at MSA; Tiffany Daly, Austin’s Western Region president; and Mark Friedlander, MSA’s head of corporate communications.

Austin provides 24-hour claim reporting, agent downloading, electronic funds transfer, credit card payments for premium bills, and maintains a user-friendly web-rating and policy-upload tool ART (Austin Rating Tool) and web site for both agents and consumers. Commercial business is written on Main Street America’s proprietary Main Street Station platform. “Our processing systems are user-friendly and get great reviews from our agents,” said Kusch.

coverages include no waiting period for business income, business income/ordinary payroll coverage for up to 12 months, and generous money and securities coverage. “Our Main Line BOP program for contractors is a specialized product,” said Kusch. “In Wisconsin, we have had great success with contractors – they lead the way. The policy offers coverages that other companies do not offer so we rarely get beat on coverage.

WISCONSIN INDEPENDENT AGENT

We promote this product and help agents find markets.” Austin’s products also include unique personal lines coverages. Kusch cited as an example a homeowners product that extends a single loss deductible. “You don’t see that very often anymore.” In addition to high quality products, it’s necessary today to have superior online tools

Austin Mutual is a member of The Main Street America Group. The company writes policies in 18 states, including Wisconsin, through a network of more than 250 independent agents. Austin’s home office is located at 15490 101st Ave. North, Maple Grove, MN 55369. Contact Clint Collins, Wisconsin field sales representative, at CollinsC@msagroup.com, or (920) 252–1316. Learn more at austinmutual.com, or call (800) 328–4628.

MARCH 2015 | 19

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EMERGING LEADERS AT MILFORD HILLS

The Emerging Leaders met for their annual pheasant hunt at Milford Hills on January 28. From left: Marc Petersen, Ryan Leitch, Matt Weimer, Justin Staebler, Matt Banaszynski, Jack Demski, Kevin Murray, Rob Gudates, Dan Lau, Alan Neva, and Mike Anderson. Not pictured Derek Wickhem.

ENTHUSIASM IT’S CONTAGIOUS “I am passionate about underwriting Personal Lines. That enthusiasm gives me the ability to brighten a customer’s day and let the agent know that I really do care about the account they are sending me. They know I will get the job done for them.”

Calvin McNamara Personal Lines Manager

800.595.0063

jmwilson.com

Managing General Agency Since 1920 Brokerage/Professional Liability • Property & Casualty • Personal Lines • Surety • Commercial Transportation • Premium Finance

22 | MARCH 2015

WISCONSIN INDEPENDENT AGENT

IIAW STAFF

MEET MEGGEN GAGAS IIAW DIRECTOR OF AGENCY SERVICES

So how does a graphic artist by trade end up in the insurance industry? “By the time I completed my degree in 2002, the economy had taken a drastic turn,” said Meggen Gagas, the IIAW’s new Director of Agency Services. “Companies were cutting marketing budgets. Experienced designers were desperate for work and taking entry-level positions at entry-level compensation. I turned to my passion for the outdoors.” Meggen left the world of graphic design to lead youth outdoor adventure trips. “This experience afforded me - although barely supported me - the ability to travel the country with few strings attached.” However, the strain of living out of her car became greater than her passion for adventure. While working a couple of part-time jobs and considering her next career move, Meggen met the owner of an insurance agency in Madison. “He was a genuine person and very intelligent,” said Meggen. “When he offered me a position at his agency I was just looking for work. As it turned out, this job transformed my desire for work into a passion for a career in insurance. The agency’s culture really encouraged learning. Everyone, from CSRs to the owner, was more than willing to share what they knew.” Her primary role in the commercial lines marketing center was to collect quotes from carriers on behalf of producers and analyze the coverage differences. On accounts with unique or uncommon exposures, the producer and marketing specialist or CSR reviewed coverage language to address the unique risk characteristics and the recommended coverages. “The agency owner made himself available to join the consultation,” said Meggen. “It would have been easy to be intimidated but, since the office culture promoted collaboration, it WISCONSIN INDEPENDENT AGENT

felt more like a reward to ask questions and gain knowledge.” After five years at the agency, Meggen’s interests in the insurance industry expanded into multiple areas. “I wanted to experience underwriting. Many of the producers at the agency had once been underwriters, and I recognized the coverage knowledge they had because of that.” In 2009, she accepted a position as a commercial underwriting assistant at a surplus lines broker in Milwaukee. Six months later she was promoted to underwriter. In that role, she had the pen for several carriers but other business was brokered directly to the carrier. Said Meggen: “As I built my book, I tried to focus on the characteristics of those that I admire - namely sincerity, resourceful knowledge and an eagerness to succeed. The agents that I needed to broker with didn’t know me so I hit the pavement to meet Wisconsin agents. As I gained knowledge about surplus lines, I found that most agents were hesitant. I found it rewarding to explain unique coverages and to share my expertise as I helped them gain market access.” All of these experiences, with a background in agency and company perspectives, have prepared her for her current position as Director of Agency Services at the Independent Insurance Agents of Wisconsin. “I began serving on the Emerging Leaders Committee a year and a half ago and was immediately drawn to the energy and skill of my fellow committee members and IIAW staff. Their sincere enthusiasm and understanding of the industry was evident. These are the people you want fighting for your industry.”

Meggen Gagas is Director of Agency Services at the Independent Insurance Agents of Wisconsin. Contact her at meggen@iiaw.com, or call 608.210.2975. Since she started in January, Meggen has been working closely with Mary Morrison, the IIAW’s in house E&O expert. They are collaborating to increase the breadth of the E&O program and educating agents about the cyber liability insurance program. Education is a big part of her new job. “There are countless resources available to agency owners via the IIAW,” said Meggen. “Part of my role will be to consult with agencies regarding these resources and to assist with implementation. I will also be evaluating, developing and offering relevant risk management tools and resources to Wisconsin agents.” Meggen’s connection to the IIAW has been positive and she knows firsthand the benefits of getting involved in the Association. “Involvement in the IIAW is a great avenue for you to increase your industry knowledge and ignite or reignite your passion for what you do. I encourage everyone to attend an Association event and find out what the IIAW is all about. Please feel free to reach out to me and introduce yourself at the convention. I am pleased to be part of the IIAW and am here for our members. If you have a question, need a resource, or a reference, please give me a call.”

MARCH 2015 | 23

WS E N E H T N I S R E B M ME The Main Street America Group Promotes Jeff Kusch to SVP/Head of Field Operations; Tiffany Daly to Western Region President The Main Street America Group, a super-regional property/casualty insurance company, has announced the appointments of Jeff Kusch to senior vice president/head of field operations and Tiffany Daly to president of its Western Region. “These internal promotions will enable us to leverage the leadership and expertise of two key members of our field operations unit,” said Tom Van Berkel, Main Street America chairman and chief executive officer. Kusch has been the company’s Western Region president since 2012. He is also the president and CEO of Main Street America’s Austin Mutual Insurance Company affiliate. In conjunction with Jeff Kusch his promotion, Kusch will become a member of Main Street America’s senior management team and report to Van Berkel. He will split his time between the company’s regional office in Maple Grove, Minn., and its corporate headquarters in Jacksonville, Fla. “In Jeff’s new role, he will be responsible for leading our national field operations function and spearheading state-specific strategies to spur profitable growth via our distribution network of 3,000 independent insurance agent-customers in 36 states,” Van Berkel said. Chris Cox, Main Street America’s assistant vice president of distribution management, as well as the company’s four regional presidents – Tiffany Daly Mark Berger (Northeast Region), Steve Berry (New England Region, Tiffany Daly (Western Region) and Gregg Effner (Southeast Region) – will report to Kusch, as will his executive assistant, Bev Krall. Kusch joined Austin Mutual in 1992 as an accounting manager. His leadership roles at Austin Mutual included treasurer, secretary, president, chief executive officer and chairman of the board. Following Austin Mutual’s affiliation with Main Street America in 2012, Kusch became its Western Region president.

24 | MARCH 2015

“Tiffany will assume Jeff’s responsibilities as our Western Region president, overseeing the region’s management and performance, and providing leadership to our sales team throughout the region’s 19 states located in the Midwest, Southwest and Pacific Northwest,” Van Berkel said. Daly joined Main Street America’s Grain Dealers Mutual Insurance Company in 2005 in Indianapolis, Ind. She has held various marketing and sales roles with the company, including regional field supervisor. In 2011, Daly became Main Street America’s Indiana business development executive and assumed the Western Region regional sales director role in 2013, when she relocated to its Maple Grove, Minn., office. In her new leadership position, Daly will remain based at the company’s Maple Grove office. To learn more, please visit austinmutual.com or msagroup.com.

O’Brien Elected to Young Nonprofit Professionals Network Milwaukee Board Therese O’Brien, Account Representative at Arthur J. Gallagher & Co., joined the Young Nonprofit Professionals Network (YNPN) Milwaukee Board as the chair of the newly formed mentorship committee. As chair, Therese will recruit mentors and participants for a pilot of YNPN Milwaukee’s one-on-one mentorship program. Therese will also plan two group-format mentorship programs for YNPN Milwaukee in 2015. Therese is a graduate of UW-Madison majoring in Marketing and Management. She works with long-term care facilities, nonprofits and public entity sector clients. The YNPN is where next generation leaders can connect and support each other to strengthen their own leadership skills and, as a result, the nonprofit sector. YNPN began in 1997 as a small gathering Therese O’Brien of young nonprofit professionals in San Francisco. It has grown into a nationwide grassroots movement. The YNPN mission is to involve young people in the nonprofit community. This is done primarily through education and networking events. Founded in 2006, the Greater Milwaukee Chapter is one of thirty YNPN chapters located throughout the WISCONSIN INDEPENDENT AGENT

S W E N E H T N I S R E B MEM country that represents nearly 30,000 young nonprofit professionals working in a variety of capacities. YNPN continues to grow and gain momentum, organizing at least eight events annually ranging from educational programming to service opportunities, to our annual membership kick-off and our holiday social.

SECURA Recognizes 2014 Top-Performing Agencies SECURA Insurance announced its topperforming agencies for 2014. To earn this prestigious recognition, these independent agencies met specific criteria based on their premium volume, profitability, growth, retention, and loss history with the super-regional insurance carrier.

To learn more about Arthur J. Gallagher & Co., please visit ajg.com.

ACUITY’s Growth Creates 150 Job Openings ACUITY announced that it plans to hire 150 employees in 2015 due to strong, sustained business growth. Staff will be added at the insurer’s corporate headquarters in Sheboygan and throughout the 23 states in which it does business. ACUITY has grown to become the 62nd-largest property-casualty insurance company in the nation. In 2014, the insurer increased its revenue by nearly $120 million to reach $1.24 billion in written premium, a 10.6 percent gain over 2013. ACUITY is also continuing work on a 240,000-square-foot addition to its corporate headquarters to accommodate expansion. “We are increasing our staff not only to respond to our strong growth, but as an investment in our future,” said Ben Salzmann, ACUITY President and CEO. “We need to be certain to have the people and resources in place to maintain our level of world-class service to a growing number of families, individuals, and businesses.” ACUITY will be hiring processors and underwriters, software developers and technical support staff, business analysts, claims staff, customer service representatives, premium auditors, and more. “Because of ACUITY’s continued expansion, we have been able to provide rewarding jobs for more and more people,” said Joan Ravanelli Miller, General Counsel and Vice President - Human Resources. “From new recruits and college graduates to professionals with years of experience, ACUITY offers rewarding career opportunities, interesting and meaningful responsibilities, and employment benefits that make us the employer of choice in the insurance industry.”

Dave Gross, SECURA’s President & CEO, congratulates the 2014 top-performing agents. Back row from left: Tom Dawson, Dawson Insurance Agency; Tim Heyroth, SECURA VP–Sales; Jerod Blakestad, Blakestad; Roger Beth, Beth & Rudnicki Insurance; Mike Reedy, Crane Agency; Tom Berra, Crane Agency; Dave Gross; Doug Dittmann, The Neckerman Agency; and Mike Ansay, Ansay & Associates. Front row from left: Brian McClone, McClone; and Pat McClone, McClone. The Charles L. Crane Agency Company, from St. Louis, Mo., was named the Top-Performing Agency for 2014. The Crane Agency has partnered with SECURA for 21 years, and this is the agency’s seventh time earning a top-performer award from the company. Tom Berra, Executive Vice President-Director; and Mike Reedy, President; accepted the award at a ceremony in January at the company’s annual Premier Agent Professional Development Conference. These independent agencies also received top-performing agency awards: Ansay & Associates, LLC, Port Washington, Wis., is a twotime award recipient and has represented SECURA since 1985. Beth & Rudnicki Insurance Agency, Inc., Rockford, Ill., is a two-time award recipient and has represented SECURA since 2000.

To learn more about ACUITY, please visit acuity.com. CONTINUED ON PAGE 29 WISCONSIN INDEPENDENT AGENT

MARCH 2015 | 25

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S W E N E H T N I S R E B MEM CONTINUED FROM PAGE 27

Dawson Insurance Agency, Inc., Fargo, N.D., is a first-time award recipient and has represented SECURA since 2006. Indianhead Insurance Agency, Inc., Eau Claire, Wis., is a ninetime award recipient and has represented SECURA since 1978. McClone, Menasha, Wis., is a five-time award recipient and has represented SECURA since 1976. The Neckerman Agency, Madison, Wis., is a two-time award recipient and has represented SECURA since 1992. In addition, the carrier recognized independent agency Blakestad from Minneapolis, Minn., as its Rookie of the Year. The agency has worked with the insurance company for 12 years. “It’s an honor to celebrate the success of our agent partners,” said Dave Gross, SECURA’s President & CEO. “These agencies are the best of the best, and that’s why we love working with them. They display a longstanding commitment to our company, which leads to mutual success and valuable friendships.” To learn more about SECURA, please visit secura.net.

Philadelphia Insurance Cos. Promotes Two New Senior VPs Philadelphia Insurance Companies (PHLY), a leading commercial property/casualty and professional liability insurance company for niche markets, announces the promotion of two Vice Presidents to Senior Vice President. Bob Morgan is now Senior Vice President of Underwriting and Seth Hall assumes the position of Senior Vice President of Customer Service. Mr. Morgan will continue oversight of PHLY’s Habitational, Real Estate, and Small Business Unit (commercial property) segments in his new position.

commercial property insurance will continue to enhance the direction and growth of the Underwriting department in this new role.” Mr. Morgan has a 35-year career in the insurance industry. In 1989 he was hired as the first employee to develop and lead the underwriting team at Community Association Underwriters. He eventually rose to the position of Senior Vice President. He joined PHLY in 2006 as Vice President of the Habitational Division and his role was expanded to include oversight of real estate products in 2014. Mr. Morgan graduated from the College of Insurance (now part of St. John’s University) in New York, NY. He is a member of the CPCU Society of America, the Society of Financial Service Professionals, and Community Associations Institute. Seth Hall joined Philadelphia Insurance Companies in 2009 as the Vice President of Customer Service. Over the past five years, his key responsibilities have expanded to include the oversight and direction of PHLY’s Account Management team, as well as being a leader for key strategic initiatives. “Seth is an outstanding leader, who motivates our employees and has helped improve service across our company,” shared Brian O’Reilly, executive vice president and chief marketing officer. “By leading several key business initiatives, including Voice of the Customer, PHLY has received recognition from our customers and industry for exceptional service.” Mr. Hall’s career began as a Management Consultant for Accenture (formerly Andersen Consulting) focused specifically within Service Operations within the Property & Casualty industry. He then started and eventually sold a company he coowned in Dallas, TX. He then returned to the customer service industry working as a consultant for eLoyalty, before moving on to oversee CIGNA International’s global service operations. Mr. Hall is a graduate of Pennsylvania State University. To learn more about Philadelphia, please visit phly.com.

“Bob has played a critical role in driving strategy and success around our property business,” Executive Vice President and Chief Underwriting Officer John Glomb commented. “His expertise in WISCONSIN INDEPENDENT AGENT

MARCH 2015 | 27

COMMENTARY FROM COUNSEL

WHO LET THE DOGS OUT?

WISCONSIN SUPREME COURT FURTHER CLARIFIES WHO IS A DOG OWNER UNDER THE DOG BITE STATUTE

You can easily imagine all sorts of scenarios involving dogs and insurance and, if you are in the personal lines business, you have likely had discussions with your clients about dogs, insurance covering dogs, or even a dog bite scenario. Wisconsin even has a dog bite statute, Wis. Stat. § 174.02, which doubles damages in situations where a dog has put its owner on notice by way of a previous attack on a person, domestic animal or property. Statutory liability rests on “owners” of dogs. In a recent decision in Augsburger v. Homestead Mutual Insurance Company, the Wisconsin Supreme Court determined that a man could not be held liable for injuries caused to a woman who was attacked by dogs that were kept on the man’s property but actually owned by his daughter. While the dog bite statutes imposes strict liability on dog owners for all injuries caused by the dogs that they own, even if the dog “innocently” caused injuries, “owner” is broadly defined as “any person who owns, harbors or keeps a dog.” Previous Wisconsin cases had determined that a landlord is not liable under the “dog bite” statute for injuries caused by a tenant’s dog, but that a landowner is a statutory “owner” subject to liability if she allowed the dog and its owner to stay in her residence with her. The issue in front of the court in Augsburger was whether a property owner legally “harbors” a dog kept on that person’s property, even if the dog belongs to another person. The court decided that merely owning the property on which a dog resides is insufficient, by itself, to establish that an individual is liable for the dog’s actions under Wis. Stat. § 174.02. Therefore, the court held that the property owner’s insurance does not cover the injuries caused by the dog simply because the insured owns the property. A property owner only becomes a “harborer” (and thus an owner) under the statute — liable for injuries caused by a dog — when it exercises some requisite level of control over the property, which is a determination that depends on the totality of the circumstances.

28 | MARCH 2015

Getting to Court The property owner purchased the property with the intention that his daughter and her family would move from Colorado and live there. He purchased homeowner’s insurance for the property through Homestead Mutual. The property owner himself never lived on the property, and his daughter and her family inhabited it without a formal lease and without any expectation for paying rent. At the time the property owner bought the property, his daughter’s family had two dogs. After they moved there, they rescued a third dog, which then had four puppies, of which they kept three. The property owner was not fond of these six dogs, but he did not tell his daughter to remove them (though he clearly could have). He only visited the property sporadically, and he had no control over the dogs’ health or well-being. In 2008, the daughter invited her friend, Augsburger, to the property. Augsburger had

visited the property before, and she knew they had dogs. Augsburger arrived and made her way to the barn when, according to her complaint, she was viciously attacked by four of the dogs. The dogs attacked her and bit her multiple times.

Lower Court Decisions Augsburger then sued the the property owner, his daughter, and Homestead Mutual. The parties agreed that the property owner did not “own” or “keep” the dogs, and thus the sole question at issue for his liability under the dog bite statute was whether he had “harbored” the dogs. The circuit court determined, on summary judgment, the property owner had WISCONSIN INDEPENDENT AGENT

COMMENTARY FROM COUNSEL harbored the dogs by knowingly providing lodging and shelter to the dogs on his property and that he was, therefore, liable. The court of appeals agreed and affirmed the judgment.

the owner of the dog is using the property more like a houseguest of the property owner (which is more likely to constitute harboring) or more like a tenant of the property owner (which is less likely to constitute harboring).

While the dog bite statutes imposes strict liability on dog owners for all injuries caused by the dogs that they own, even if the dog “innocently” caused injuries, “owner” is broadly

was no rental agreement or rent due, his daughter and her family were more akin to tenants than they were to houseguests because he did not live there, prescribe particular rules for them to follow, or frequently visit the property. Essentially, the property was provided for them to live there as if it was their own, and it was thus the daughter’s family who harbored the dogs. The property owner was, therefore, not liable to Augsburger, and Homestead Mutual consequently had no indemnification or defense obligations.

Now What?

defined as “any person who owns, harbors or keeps a dog.”

The Supreme Court reversed, holding that “harbor” means to provide lodging, shelter, or refuge to a dog and that whether a property

Merely owning the land on which a dog lives, however, is not sufficient to turn the property owner into a “harborer” of any dogs residing on the property.

Even though the decision in Augsburger provides clarification regarding who is a dog “owner” by way of “harboring” for the purposes of Wisconsin’s

owner is a “harborer” depends on a “totality of the circumstances” factual determination. In assessing the totality of the circumstances, the Court noted that two of the key factors are (1) whether the property owner lives on the premises with the dog, and (2) whether

Having clarified the statutory definition of “harbor,” the Court went on to hold that, under the totality of the circumstances, the property owner did not harbor his daughter’s dogs. The Court held that, even though there

dog bite statute, it is clear that case-by-case factual inquiries will continue by looking at the totality of the circumstances.

Supreme Court Opinion

WE DON’T TAKE A BACKSEAT

> Josh Johanningmeier is the IIAW’s General Counsel. Call the Legal Services Hotline at (877) 236-1669.

TO INNOVATION

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WWW.PEKININSURANCE.COM MARCH 2015 | 29

TECHNOLOGY

MAKE IT HARDER TO

CRACK YOUR PIN AND PASSWORD Every day there seems to be a new story or article about cyber criminals and hackers stealing identities and revealing sensitive information. These hackers wreak havoc on lives by disclosing their private information. While hackers have become more sophisticated in the tactics they use to steal information, a report from SplashData notes that they still prefer the easy route. Your personal passwords and Personal Identification Numbers (PINs) may not be as clever or nearly as secure as you thought. The following is information on how to create a more secure login. This month, SplashData published its list of the worst passwords of 2014. These were gathered from files of stolen passwords that hackers had posted online. Topping the list were “123456,” “password,” and “12345.” Some other combinations in the top 25 of the worst passwords for the year also included “letmein,” “dragon,” and “football.” Nick Berry, the founder of technology consulting firm Data Genetics, stated that a majority of people use the same passwords and PINs. Out of 3.4 million four-digit passwords that Berry analyzed, 11% were “1234,” followed by “1111” (6%) and “0000” (2%). Creating unique and hard to break passwords is more important today than ever. This is especially true for access to sensitive information such as online banking, online investments, and medical information.

Tips to strengthen your codes and passwords Avoid using your birth date/birth year. In the event your license is stolen along with your bankcard, it will be easier to figure out your PIN. Berry’s analysis also reveals that all possible 19XX combinations were among the top 20% most-common PINs. Create different passwords for different accounts. You are better off having a separate and unique password for your most sensitive online accounts — email, bank, and credit card websites, for example. A hacker cracking one account will not be able to expose all of your personal information. SplashData suggests making sure your data is encrypted on all devices. Also, you should not leave password lists in unsecured documents or on sticky notes. Make sure your passwords are complex. They should have at least eight or more characters that consist of a mix of letters, numbers, and symbols. When speaking with Yahoo! Finance, Berry also noted that typical PIN combinations tend to use numbers that are close together, either in value or on the keypad. Do not choose a mix such as 45 or 12, or picking

The number of data breaches and security incidences in 2015 will likely increase. Taking appropriate steps to make sure your online transactions are as secure as possible is well worth a little bit of effort. 30 | MARCH 2015

numbers in a straight line (like “2580”), Berry says. Instead, try to pick numbers far away from each other. Use Two-Factor Authentication whenever possible. This process adds an additional layer of security beyond the User ID and password. For example, my bank sends a code via text to my cell phone that I then must enter on the website within a few minutes for access. Some websites are beginning to add this process to enhance their security. For example, Gmail now allows you to create a two-factor authentication process when logging into your account. It adds a little more time to the process but greatly enhances your security.

Warning signs > Make sure you review bank and credit card statements on a regular basis. This can help you catch discrepancies early, potentially minimizing the damage of a cracked PIN or password. > Although hackers and identity thieves are getting more sophisticated in their approach, old-school tricks are still common. These can include planting card skimmers and cameras on public ATMs, for example. To prevent getting your PIN “skimmed,” cover the keypad from view while entering in your ATM PIN and pay attention to anything that might seem “weird” with the machine itself. > You get three free credit reports a year. Use them. Experian, Equifax, and TransUnion are all required to provide consumers a free credit report annually. This allows you to check the history of accounts opened in your name.

> Steve Anderson provides information to insurance agents about how they can use technology to increase revenue and/or reduce expenses. Go to steveanderson.com.

WISCONSIN INDEPENDENT AGENT

TECHNOLOGY

DON’T GET

HACKED! Tips to strengthen your passwords DONT_HACK_ME-1234 > Don’t use your birth date or year. > Different accounts? Create different passwords. > Encrypt your data. > Make passwords complex. > Pick numbers far away from each other. > Use Two-Factor Authentication.

WISCONSIN INDEPENDENT AGENT

MARCH 2015 | 31

C O N T IN U IN G E D U C A T IO N

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WISCONSIN INDEPENDENT AGENT

MARCH 2015 | 33

FOOD FOR THOUGHT RISKY BUSINESS

U.S. News & World Report recently published the top 10 schools with undergraduate programs focusing on risk management and insurance. Only two schools from the Midwest appeared on the list. The University of Illinois in Champaign placed 8th and UW-Madison came in 3rd. Madison offers undergraduate degrees in both Risk Management & Insurance (RMI) and Actuarial Science. Founded in 1938, the RMI program is the second oldest of its kind in the United States. Each fall, the department hosts a career fair that attracts nearly 50 companies, where both full-time and internships are offered. The school’s Risk Management and Insurance Society is the oldest collegiate risk management society in the country and its RMI network has more than 2,200 alums. The program graduates about 60 students a year. Total enrollment is 31,319.

LINCOLN CREATED THE SECRET SERVICE TO PROTECT MONEY

The number one school on the list is the University of Georgia in Athens.

On April 14, 1865, Lincoln signed legislation creating the U.S. Secret Service. That evening, he was shot at Ford’s Theatre. Even if the Secret Service had been established earlier, it wouldn’t have saved Lincoln: The original mission of the law enforcement agency was to combat widespread currency counterfeiting. It was not until 1901, after the killing of two other presidents, that the Secret Service was formally assigned to protect the commander-in-chief.

Source: PropertCasualty360.com

Source: History.com

All this education comes at a cost. In-state tuition and fees amount to $10,410; out-of-state tuition and fees total $26,660.

Crash course in service excellence.

The last known high-quality photo of Lincoln alive – on the White House balcony, March 6, 1865. Photo: Henry Warren

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What Would You Do If Your Agency Had A Data Breach?

80% of businesses fail to recover from a breach because they do not know this answer. Responding to a breach is a complicated process that requires the assistance from many different professionals. Failure to notify the effected individuals “without unreasonable delay” could cost your agency up to $1,500,000 in fines from government agencies. Add this to the $200,000 average cost to comply with notification laws, the legal liability and the reputational harm caused by the breach and you can quickly see how this exposure can be devastating to your agency.

Independent Insurance Agents of Wisconsin has partnered with Arlington/Roe & Co., Inc. to offer our members an exclusive program to help protect their agencies from information security breaches. This program is a holistic risk management process that will help train your staff on privacy compliance in addition to handling data breach notification and third party suits. This program offers the following benefits:

• • • • • • • • • •

Available To IIAW Members Only No Encryption Requirement HIPAA Compliance Tools Step-‐By-‐Step Procedures for Compliance Newsletters Data Breach Coach To Help With Notification Forensic Investigators Privacy Counsel Call Center Credit Restoration Services

• • • • • • • • • •

Up To 50% Off Premium IIAW Members Are Pre-‐Qualified For Enrollment* On-‐Line Compliance Materials Staff Training Programs Expert Support On-‐Line Regulatory Fines and Penalties Public Relations Firms Notification Costs Outside Limit of Liability Credit Monitoring Security & Privacy Liability

*Some restrictions apply. Agencies over $5M in revenue, over 50% benefits or with prior losses need to be underwritten.

To Bind: 1. Choose the option number and premium from the chart on the left. Make check payable to: Agents Assistance Corporation 2. Complete the application and addendum attached. 3. Attached check to app/addendum and mail to: Agents Assistance Corporation, 725 John Nolen Drive, Madison, WI 53713

Companies with revenues less than $1,000,000 Option #1 Limit of Liability Agg. Notification Limit Legal, Forensics & PR

Retention

(outside limit of liability) Notification Threshold

Sublimits

Security & Privacy Liability Regulatory Def. & Penalties PCI Fines & Penalties Website Media Liability Cyber Extortion Data Protection Loss and Business Interruption Loss

Premium less than 50% benefits

$250,000

Option #2

Option #3

$500,000

25,000 records $250,000

$2,500

$1,000,000

50,000 records $500,000

100 records

$2,500

100,000 records $1,000,000

100 records

$2,500

100 records

$250,000 $250,000 $250,000 $250,000 $250,000 $250,000

$500,000 $500,000 $250,000 $500,000 $500,000 $500,000

$1,000,000 $1,000,000 $250,000 $1,000,000 $1,000,000 $1,000,000

$257.50

$515.00

$772.50

If you would like additional information or if you have questions, please contact one of the people below:

IIAW Director of Agency Services Meggen Gagas P: 608.210.2975 meggen@iiaw.com

IIAW Program Administrator John Immordino P: 800.878.9891 Ext: 8732 jimmordino@arlingtonroe.com

Data Breach Program Pricing Premium Includes WI SL Taxes

Companies with revenues from $1M to $2M Option #1 Limit of Liability Agg.

Retention Notification Limit Legal, Forensics & PR (outside limit of liability) Notification Threshold Sublimits Security & Privacy Liability Regulatory Def. & Penalties PCI Fines & Penalties Website Media Liability Cyber Extortion Data Protection Loss and Business Interruption Loss Premium less than 50% benefits

$500,000 50,000 records $500,000 $500,000 $500,000 $250,000 $500,000 $500,000 $500,000

$2,500

100 records

$566.50

Option #2

Option #3

$1,000,000

50,000 records $1,000,000

$2,500

100 records

$2,500 100,000 records $1,000,000 100 records

$1,000,000 $1,000,000 $250,000 $1,000,000 $1,000,000 $1,000,000

$875.50

$978.50

Option #2

Option #3

$1,000,000

Companies with revenues from $2M to $3M Option #1 Limit of Liability Agg.

Retention

Notification Limit Legal, Forensics & PR (outside limit of liability) Notification Threshold Sublimits Security & Privacy Liability Regulatory Def. & Penalties PCI Fines & Penalties Website Media Liability Cyber Extortion Data Protection Loss and Business Interruption Loss Premium less than 50% benefits

$500,000 50,000 records $500,000 $500,000 $500,000 $250,000 $500,000 $500,000 $500,000

$2,500

100 records

$772.50

50,000 records $1,000,000

$2,500

$2,500 100,000 records $1,000,000

100 records $1,000,000 $1,000,000 $250,000 $1,000,000 $1,000,000 $1,000,000

$978.50

$1133.00

* Companies with revenues of $3M or greater should contact Meggen Gagas, IIAW Director of Agency Services, for more information:

IIAW Director of Agency Services Meggen Gagas P: 608.210.2975 meggen@iiaw.com

IIAW Program Administrator John Immordino P: 800.878.9891 Ext: 8732 jimmordino@arlingtonroe.com

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Take advantage of everything your membership offers! Producer Onboarding & New Hire Training

Membership in the Independent Insurance Agents of Wisconsin includes every owner, producer, and service employee of an agency. Every member of the IIAW has unlimited access to services and information from both the Independent Insurance Agents of Wisconsin and the Independent Insurance Agents and Brokers of America. This includes the Trusted Choice® independent agency brand.

Looking for industry training for your new employee? The IIAW has partnered with New Level Partners to bring online training to new hires in the insurance industry. Online learning is ideal for new hires CPF LQD EJCPIGTU CPF KU CP GZEGNNGPV YC[ VQ ƂV EQXGTCIG GFWECVKQP into the workday. Our new hire training is on-demand, interactive, cost-effective and measurable!

A detailed list of benefits and where to find them are listed below:

The VU provides unique and valuable services free of charge, such as the research library, Ask An Expert, Webinar classes, and Best Practices.

Big “I” Virtual University Virtual Risk Consultant

Membership In IIABA

The most powerful agent resources right in the palm of your hand. IIAW membership includes access to many services and information that are guaranteed to help you succeed. From Ask An Expert, Big “I” Markets, the Agents Council for Technology, Virtual University, and just about every other service to run your agency, the IIABA is here for you.

Online sales and service resource designed to help your agency better serve its customers.

Big “I” National Flood Program

Written through Selective Insurance (A+ A.M. Best rated). Visit YYY KPFGRGPFGPVCIGPVU EQO ƃQQF

Professional Development Series

E&O Insurance

Partnering with UW-Madison and The Institutes to offer an industry leading professional development series for your agency’s emerging leaders.

Continuing Education

Consult with our legal expert for 15 minutes free each quarter.

Comprehensive coverage from Swiss Re/Westport, an A.M. Best A+ rated company. Online and in class continuing education classes are available to members at a discounted rate. For more information visit www.iiaw.com and click on Education/Events.

Agency Consulting

Dirk Nohre - Nohre & Co. (nohre.com) Dan Paulson – InVision (invisionbusinessdevelopment.com)

Government Affairs

Perpetuation Guide

Ensuring independent agents role in the insurance industry along with advocating for favorable regulations for our profession at both the state and national level.

Prepared and vetted by our General Counsel, this guide provides invaluable information about how to successfully prepare a perpetuation plan.

Prelicensing Classes

Property & Casualty and Life & Health prelicensing classes available. Visit www.iiaw.com (Education/Events then Agent Prelicensing Schools) to learn more.

Trusted Choice

Take advantage of this unique national branding and marketing program for IIAW members. Go to www.trustedchoice.com/agents to learn more.

TrustedChoice.com

Agency online marketing services, lead generation, quoting capabilities, and more to help you compete in today’s changing marketplace.

Cyber Liability Coverage

The IIAW has partnered with Arlington/Roe & Co., Inc. to offer our members an exclusive program to help protect their agencies from information security breaches. This program is a holistic risk management process that will help train your staff on privacy EQORNKCPEG KP CFFKVKQP VQ JCPFNKPI FCVC DTGCEJ PQVKƂECVKQP CPF VJKTF party suits.

Big “I” Markets

No fee brokerage operation within the Big “I.” This is a product driven program available to IIAW members. To enroll visit www.bigimarkets.com.

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Free Quarterly Legal Advice

Big “I” Advantage

Having trouble deciding which retirement plan is right for you or your agency? Big “I” Retirement Services is here to help you choose which plan best meets your circumstances. We’ve worked with more than 1,000 agencies to help them achieve their retirement goals. Receive The Following Publications: • Independent Agent Magazine (IIABA) • Wisconsin Independent Agent Magazine (IIAW) • IIAW Spotlight Weekly E-news, includes Action News (IIAW) • IIAW Ed-Zone E-news (IIAW) • The Marshberry Letter (IIAW) • HR Toolkit (IIAW) • Online and Print IIAW Membership Directory • Insurance News & Views (IIABA) • Two for Tuesday (IIABA) • VUpoint (IIABA)

Networking Opportunities: • Annual Convention • Fall Planning Session • Sales & Leadership Conference • A Day on the Hill Government Affairs Day • Regional Social Events • Committee Opportunities Join a Committee! • Facebook and LinkedIn Member-only Network • Proud Sponsors of MakeA-Wish Wisconsin - Annual Volunteer Opportunities

Receive Discounts From These Companies: Agility Recovery, Caliper, UPS, Hertz, Imperial Financing, InsurBanc, Mines Press and DocuSign

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