May 2016 Wisconsin Independent Agent Magazine by Independent Insurance Agents of Wisconsin

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INDEPENDENT AGENT MAY 2016

At West Bend, weâ&#x20AC;&#x2122;re proud of our broad base of knowledge when it comes to commercial risks. Over the years, however, weâ&#x20AC;&#x2122;ve developed extensive expertise of certain risks and the skills needed to underwrite them. Thatâ&#x20AC;&#x2122;s why weâ&#x20AC;&#x2122;re more competitive in writing these classes. Like auto services. If you have an auto service risk, contact your West Bend underwriter. We look forward to sharing our expertise with you, and providing the best coverages necessary to protect your valued customers.

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INDEPENDENT AGENT MAY 2016 Eric Schwartz, Editor

Open Door Policy The IIAW Goes To Washington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Government Affairs State Government Affairs Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Member Resource Pinpoint Your Customers: Facebook As An Advertising Option . . . . . . . . . . . . . . . . 9 Virtual University Homeowners Coverage For Camper Trailers. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 Technology Snapchat: The New Social Frontier For Insurance Agents . . . . . . . . . . . . . . . . . . . . . 12 Marketing Why Business Today Needs To Be More Than Business . . . . . . . . . . . . . . . . . . . . . . .14 Sales Building Rapport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Members in the News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Errors & Omissions Choose Wisely: Coverage Limits For E&O Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Commentary From Counsel Wisconsin’s Campaign Finance & Election Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22

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 2015-2016 Executive Committee President......................................................... Steve Leitch P.O. Box 85, River Falls, WI 54022 President-elect .............................................. Matt Weimer 100 North Corporate Dr., #100, Brookfield, WI 53045 Secretary-Treasurer .......................... Lise Meyer Kobussen P.O. Box 633, Sauk City, WI 53583

Jack Riesch P.O. Box 1610, Waukesha, WI 53187-1610 Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236 Darrel Zaleski 4233 Southtowne Drive, Eau Claire, WI 54701 2015-2016 Committee Chairs

On The Cover… In business you must evolve and adapt to the changing market and times. That goes for the IIAW, too. This year, the Sales & Leadership Conference has transformed into the Leadership Conference to better reflect the content of the event. The conference’s quality speakers and sessions are still intact as is our valued partnership with the UW-Madison School of Business. Check out the conference’s schedule of events in the brochure included in this magazine and register at IIAW.com.

> ADVERTISERS & INFORMATION AAA Wisconsin ................................................. 15 ACUITY Insurance ............................................ 31 AmTrust North America .................................... 8 Badger Mutual .................................................. 7 Berkshire Hathaway/Guard ............................ 28

Chairman of the Board ............................. John Wickhem P.O. Box 1500, Janesville, WI 53547-15

Agency Operations....................................... Kim Dandrea N19 W24200 Riverwood Dr., Waukesha, WI 53188

State National Director ................................ Linda Steiner 555 Main Street #320, Racine, WI 53403

Automation/Technology ............... Cathleen Christensen P.O. Box 949, Fond du Lac, WI 54936-0949

2015-2016 Board of Directors

Emerging Leaders ...........................................Jack Demski 101 East Grand Ave. #11, Port Washington, WI 53074

IIAW Continuing Ed./Prelicensing ............... 11, 27

Employee Benefits.......................................... Mike Farrell 1300 South Green Bay Rd., Racine, WI 53406

IIAW Leadership Conference ..............Back Cover

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 Cindy Burns 500 South Central Ave., Marshfield, WI 54449 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 Brian McClone 505 North Westfield Street, Oshkosh, WI 54902

WISCONSIN INDEPENDENT AGENT

Finance & Compensation ............... Lise Meyer Kobussen P.O Box 633, Sauk City, WI 53583

Burns & Wilcox ................................................ 6 Erickson-Larsen, Inc........................................ 13

InVEST ............................................................ 26 JM Wilson ....................................................... 25

Government Affairs .......................................Skip Hansen 100 North Corporate Drive #100 Brookfield, WI 53045

Madison Mutual .............................................. 29

Industry Relations ....................................... Kevin Murray 525 Junction Road, Madison, WI 53717

Pekin Insurance.............................................. 30

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 Technical ...............................................Timothy Kakuska P.O. Box 547, La Crosse, WI 54602-0547

Robertson Ryan & Associates......................... 29 SECURA Insurance ........................................... 17 The IMT Group ................................................ 25 West Bend ........................................................ 2 Western National.............................................. 4 MAY 2016 | 3

OPEN DOOR POLICY

THE IIAW GOES TO WASHINGTON The Independent Insurance Agents of Wisconsin (IIAW) sent a contingent to the Big “I” Legislative Conference in Washington, D.C. Held April 13-15, the conference is the insurance industry’s best-attended, most effective legislative meeting. After securing multiple legislative wins in the past year to protect the independent agency system and promote competitive and stable state insurance markets, IIAW members and staff looked to continue the IIABA’s success while in the nation’s capital. Association members and staff advocated for issues such as: flood insurance reform, crop Insurance, a state based regulatory system, and ACA fixes and remedies. The IIAW also advocated against the Department of Labor’s efforts to expand the application of the ERISA “fiduciary” standard from just investment advisors to include broker-dealers, who are currently subject to a “suitability” standard. We also advocated for not allowing Risk Retention Groups to expand their insurance offerings to include all lines of commercial coverage, while retaining a weaker and preferential system of regulatory oversight. As part of a whirlwind week, we heard keynote addresses from Senator Tim Scott (R-South Carolina) and Senator Chuck Schumer (D-New York), and met with Congressman Glenn Grothman, Congressman Sean Duffy, Senator Tammy Baldwin, Senator Ron Johnson, and Speaker of the House Paul Ryan. During Sen. Schumer’s speech, he talked about the collaborative effort between independent insurance agents and leaders on the Hill on three key areas: crop insurance, flood insurance and terrorism insurance. Last year, overwhelming opposition from the agriculture industry to proposed Federal Crop Insurance Program cuts led Congressional leaders and Agriculture Committee Leadership to negotiate a legislative fix. In March, the Big “I” sent a letter to Senate and House Budget and Appropriations Committee chairs urging them to reject calls for additional cuts to the FCIP during the fiscal year 2017 appropriations process. Specifically, Sen. Schumer discussed the growing craft brewery industry and the need to keep barley farmers in mind when reforming crop insurance mandates. WISCONSIN INDEPENDENT AGENT

“It will not just help those who grow barley,” he said. “It’ll help an industry that’s thriving.” Thanks to the Homeowner Flood Insurance Affordability Act of 2014, major NFIP Members of the IIAW met with Wisconsin Congressman Glen Grothman. From left: Derek changes took effect on Wickhem, Mike Walston, State National Director Linda Steiner, Sen. Glenn Grothman, IIAW April 1, including new Executive VP Matt Banaszynski, IIAW Director of Agency Services Meggen Gagas, and IIAW mapping procedures and President Steve Leitch. premium increases. As the NFIP remains under scrutiny, H.R. 2901, the “Flood Insurance Market Parity and Modernization Act,” continues to circulate in the U.S. House of Representatives. This bill clarifies that state regulators have authority over private flood insurance Senator Chuck Schumer (left) and Senator Tim Scott addressed conference attendees and ensures that Thursday morning. policyholders can return to the NFIP without losing their grandfathered regulatory power over financial services, the status or subsidy if they had previously left the future of the insurance market is becoming program and obtained coverage in the private dependent on agents’ ability to engage in the market. This is an important protection for federal political process. The Big “I” federal consumers and an E&O protection for agents. government affairs team advocates for agents in Washington, but they can’t do it alone. Senator Tim Scott, a former insurance agent, also delivered a keynote address to the It’s of the utmost importance that our members assembled just prior to the Association’s annual continue to advocate for and against federal day on Capitol Hill. He discussed issues that legislation that has an impact on their business. directly impact the industry and are currently That’s why its important before Congress—including regulation and we have as many agents taxes—and the importance of business as possible attend experience. the IIABA Legislative Conference. Grass roots “Unfortunately in Washington, there aren’t advocacy and InsurPac, many people who have actual business the federal political experience,” said Senator Scott. “My ask of the action committee for industry is to stay consistently engaged in the independent agents, > Matt Banaszynski is process of reminding people like me that we complements the the Executive Vice President of the work for you. We need to be reminded that we work that the IIABA serve the people, not lead the people.” Government Affairs team Independent Insurance Agents of Wisconsin. does on our behalf in Contact him at matt@ iiaw.com. As the federal government exercises more Washington.

MAY 2016 | 5

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GOVERNMENT AFFAIRS

STATE GOVERNMENT AFFAIRS REPORT OCI Staff Changes

Legislative Retirements

2015-16 Session Stats

The Office of the Commissioner of Insurance (OCI) recently announced several staff changes in the Bureau of Market Regulation: Ms. Melody Esquivel has been promoted to Section Chief of Agent Licensing in the Bureau of Market Regulation. Ms. Esquivel formally held the position of Agent Licensing Consumer Protection Investigator and has more than 11 years of experience working at the agency. Ms. Esquivel has been tasked with streamlining the agent licensing process, improving customer service and creating greater uniformity.

With members of the state legislature unofficially adjourned for the 2015-16 session and looking ahead to the 2016 elections, now is when incumbent lawmakers start making decisions on whether or not they will seek re-election. So far, nine legislators have announced they will not be returning next session, and possibly more may follow in the coming weeks and months. To those that are leaving, the IIAW extends our sincere thanks and appreciation to those that supported our industry and for their combined years of public service to the people of Wisconsin.

Ms. Jaclyn de Medicci will be leaving the OCI to take a position with the Wisconsin Compensation Rating Bureau (WCRB). Ms. De Medicci has served as the Property and Casualty Section Chief in the Bureau of Market

Retiring from the legislature are: Sen. Rick Gudex (R-Fond du Lac), Sen. Nikiya Harris Dodd (D-Milwaukee), Sen. Mary Lazich (R-New Berlin), Rep. Dave Heaton (R-Wausau), Rep. Andy Jorgenson (D-Milton), Rep. Dean

Every legislative session, thousands of proposals are introduced in the form of Senate and Assembly bills. The vast majority of them are never enacted into law and many do not even get more than a public hearing. This session, there were a total of 1,829 bills introduced. Of those, 804 were Senate bills and 1,025 were Assembly bills. Only 370 bills, or slightly more than 20 percent, have been enacted into law to date. The IIAW lobbied directly on 48 bills this session and this figure does not include our involvement on several administrative rules, state budget bill issues, and numerous other topics impacting the insurance industry. The Senate Insurance, Housing and Trade Committee held seven public hearings and voted in eight separate executive sessions. The Assembly Insurance Committee held three public hearings and

Regulation. Ms. Rebecca Rebholz will serve as the team lead in the P&C Section on an interim basis until a new section chief is hired.

Knudson (R-Hudson), Rep. Tom Larson (R-Colfax), Rep. John Murtha (R-Baldwin), and Rep. Al Ott (R-Forest Junction).

Mr. Tim Cornelius has accepted a new position at OCI as Market Regulation Insurance Examiner in the Bureau of Market Regulation. Mr. Cornelius previously worked in OCIâ&#x20AC;&#x2122;s Legal Department for two years after earning his law degree from the University of Wisconsin. He also holds a Masters in Public Policy from the University of Michigan Ford School for Public Policy. Mr. Cornelius will work with the Market Regulation and Legal staff to provide statutory guidance, as well as legal case review.

Assembly Reps To Run For Senate Seats

Same

Not included in the Assembly retirement count are three sitting Assembly representatives who have announced plans to run for State Senate. Two of them are running for open seats being vacated by retiring senators and one is challenging an incumbent senator in the August primary. Rep. Mandela Barnes (D-Milwaukee) is running in a primary against fellow Democrat, Senator Lena Taylor (D-Milwaukee) in the 4th Senate district. Rep. Dave Craig (R-Big NEW LOGO Bend) is running for the 28th Senate district to succeed Sen. Mary Lazich (R-New Berlin) who is retiring. Rep. LaTonya Johnson Commitment to the Independent Agent (D-Milwaukee) is running for the 6th Senate district to replace outgoing Senator 800/837-7833 Nikiya Harris Dodd badgermutual.com Milwaukee, WI (D-Milwaukee).

WISCONSIN INDEPENDENT AGENT

voted in four separate executive sessions. In the most recent reporting period, there were 763 lobbying principals registered with the state Government Accountability Board (GAB). The IIAW ranked 136th in total number of hours lobbied with 395 hours over a 12-month period. In comparison, the PIA ranked 497th with only 52 hours of lobbying over the same period. The IIAW government affairs team has been working diligently on your behalf this past session and scored some major victories, most notably with leading the legislative effort to reform the Local Government Property Insurance Fund (LGPIF). Because of these reforms, the private commercial insurance market will now be able to compete for this business and independent agents throughout Wisconsin can reconnect with their local communities and school districts. It has been a tremendous privilege for me to represent the Association in Madison as your lobbyist and I look forward to our continued success together as the leading voice for independent agents in Wisconsin.

> Misha Lee is Owner/ Founder of Lee Government Relations, LLC and lobbyist for IIAW. Follow Lee Government Relations on Twitter @mishavlee.

MAY 2016 | 7

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MEMBER RESOURCE

PINPOINT YOUR CUSTOMERS: FACEBOOK IS AN EFFICIENT AND EFFECTIVE ADVERTISING OPTION Does your agency have a Facebook page? Have you noticed how advertisements on Facebook seem to be tailored to your age demographic, gender, and/or interests? That is the beauty of Facebook advertising. Advertising has changed with the introduction and expansion of technology. According to the book Customer Service is Just Foreplay, author Jason Cass writes that the change in technology has “… completely shifted how consumers buy and perceive value. The Internet is now the main hub to get information on insurance.” It is important for any business to adapt to the current trends, especially when it comes to advertising, which means that to be relevant in today’s market, a presence on social media is necessary. Advertising on Facebook may also be the means of differentiation a company needs. For those who are not on Facebook, or are skeptical of its potential benefit to their agency, it may be helpful to know that as of December 2015, 1.44 billion people were on Facebook. This sheer magnitude of users provides companies with unparalleled access to a wide consumer base at all times. It also provides great exposure for an agency and its offerings, allowing it to advertise cheaply and effectively due to Facebook’s advertising algorithms. These algorithms target individuals who are more likely to be interested in the respective services. Facebook advertising can be customized WISCONSIN INDEPENDENT AGENT

based on a company’s needs and budget. An agency can set an advertising budget for as little as $1 per day, recycle and refeed posts, and create ad campaigns in order to reach the targeted market. In fact, Facebook marketing is less expensive than other advertising methods and has the lowest cost per 1,000 impressions to date. For example, Facebook advertisements average around $0.25 per 1,000 impressions, which is only 1% of the cost of advertising on television. The goal of any agency should be to pay for and place advertising on websites (i.e., Facebook) where potential customers frequently visit. Instead of paying for print ads or other means of offline marketing (which are difficult to track and metricize), online marketing allows one to track and better reach their target market with limited costs, and are only charged only when someone clicks on the advertisement, which is known as the “performance click” system. The ability to target a specific segment of Facebook users is easy to do. An agency can narrow down their target market by adjusting and filling out what behaviors, interests, demographics, connections, age ranges, languages, and/or locations in which one is interested to reach. By narrowing down and focusing on a specific type of person, an agency can limit anyone

who is not interested and remove “out-ofmarket” clickers (who increase expenses via performance clicks). Is your web page mobile friendly? As more and more people are opting to use their smartphones and mobile devices to access the Internet, an advantage to having a Facebook page for your agency and advertising on Facebook is that it’s already set up to be mobile friendly. By advertising on Facebook, you automatically reach your market through their mobile device. Based on the magnitude of users, the ability to reach people at any time, the affordability, and the ease of use, an agency should give Facebook advertising a try. We have created a step-by-step guide for members, “An Agent’s Guide to Facebook Advertising,” that can be accessed on IIAW.com. After logging in, go to Member Resources, then Agency Operations and click Facebook Advertising > Haley Clark is Guide. For questions, contact Haley at 608.256.4429, or Haley@iiaw.com.

Administrative & Marketing Assistant at the Independent Insurance Agents of Wisconsin. Contact her at Haley@iiaw. com.

MAY 2016 | 9

VIRTUAL UNIVERSITY

HOMEOWNERS COVERAGE FOR CAMPER TRAILERS We’re a little confused on the liability coverage provided by a 2000 edition ISO Homeowners Policy for a camper trailer while it is parked at a campsite. In looking at the coverage form, it seems that the campsite is an “insured location,” under definition 6.d.: “Any part of a premises: (1) Not owned by an ‘insured’; and (2) Where an ‘insured’ is temporarily residing.” Would that pick up liability coverage outside the camper, but not inside? Also, since the camper has a tag and is registered, would that bring it under the motor vehicle exclusion? You’ve raised several interesting issues. Let’s look at them one at a time. First, I agree with you that a campsite where the insured has parked a camper trailer could qualify as an “insured location” under definition 6.d., as you noted. In addition, definition 6.h. would also clearly apply: “Any part of a premise occasionally rented to an ‘insured’ for other than business use.” As to the issue of coverage “outside” the camper vs. “inside,” I assume you’re distinguishing between an injury that occurs to someone in the camper, contrasted with an injury that happens to someone walking around outside the camper, but not involving contact with the camper itself. In my view, liability could arise from: (1) “inside the trailer”; (2) “outside the trailer,” (as in some defect in the steps, a metal screw sticking out of the siding, etc.); or (3) from the premises (“land”) on which the trailer is sitting (premises could be owned, rented or borrowed) - and the accident not be related to the trailer.

trailer were hitched to an auto. When a to an auto, it is considered within the vehicle,” and thus within the “motor

Coverage for each of these 3 scenarios, as I see it:

7. “Motor vehicle” means:

> Scenarios (1) and (2): Coverage is found in the HO – so long as the

a. A self-propelled land or amphibious vehicle; or

trailer is not hitched to an auto. See further discussion below, regarding the tag and registration issue you raised. > Scenario (3): Of the three scenarios above, this is the only one that is linked to the issue of “insured location.” In my view, since liability could arise separately out of the trailer, or out of the “land” on which the trailer is parked, only the claim arising out of the “land” would need to be reviewed in the context of the definition of an “insured location.” A claim arising solely out of the trailer is merely a trailer claim, and not one that is connected to the campsite itself. In other words, I think there is automatic coverage for the rented campsite premises by virtue of the two parts of the definition of “insured location” discussed above (6.d. and h.). Regarding the issue you raised about the trailer having a tag and registration, this would only matter in Homeowners Section II if the

trailer is hitched definition of “motor vehicle” exclusion.

Excerpt from the Homeowners Policy in question (HO-2000 edition): SECTION II – EXCLUSIONS A. “Motor Vehicle Liability” 1. Coverages E and F do not apply to any “motor vehicle liability” if, at the time and place of an “occurrence”, the involved “motor vehicle”: a. Is registered for use on public roads or property; DEFINITIONS

b. Any trailer or semitrailer which is being carried on, towed by or hitched for towing by a vehicle described in a. above. Also, the Personal Auto Policy provides liability coverage for “the ownership, maintenance or use of any auto or trailer.” Note: In the PAP there is no requirement that the trailer be hitched to an auto, and it doesn’t matter if the trailer is owned, rented or borrowed. By the way, there is an article on the Virtual University that may also be helpful. (Find the article at independentagent. com and search “Insuring Trailers – HO or > Mike Edwards is a PAP?”). Within the short article is a link to faculty member for a longer article analyzing trailer coverage the IIABA Virtual University. in both HO and PAP.

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 | MAY 2016

WISCONSIN INDEPENDENT AGENT

CONTINUING EDUCATION

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FOR MORE CLASSES AND TO REGISTER, PLEASE GO TO IIAW.COM WISCONSIN INDEPENDENT AGENT

MAY 2016 | 11

TECHNOLOGY

SNAPCHAT:

THE NEW SOCIAL FRONTIER FOR INSURANCE AGENTS The insurance and financial services industry, as we all know, is very competitive, different and quirky when it comes to the nuances of each organization and advisor. However, that being said, there are two things that connect us all together as advisors and agents from a marketing, advertising, branding and business standpoint. It is my belief that both of those can be realized by the customer through different social media platforms, but most effectively with Snapchat.

separating yourself from your competition. That being said, the primary focus for my business and most of my counterparts would be differentiating my agency from the online companies. We accomplish this not only by outstanding customer service, but also by doing the one thing a computer cannot do: we act like human beings.

The first point would be attention.

With these two points in mind, the number one marketing tool to accomplish both of these objectives in 2016 is Snapchat. The number one objection I get when I bring up this point is always some version of: “That’s just a bunch of young kids sending stupid videos.”

What I mean by that is, when marketing for your business, it makes sense that you would advertise where there is an abundance of attention. Let’s say you were going to buy a billboard, and you had two options to choose from, one that was on a busy intersection and the other that was on a rural country road that is never traveled. Let’s assume – for all intents and purposes – both spots are the exact same price. You would obviously choose the billboard on the busy intersection. I firmly believe there is no advisor that would intentionally advertise where there is no attention. The second would be the importance of

12 | MAY 2016

I’m sure these same people said the same thing about Facebook, and you know how vital that platform is to your business today. Do a small amount of research and you will discover that not only does Snapchat have all of the attention, but many technology experts predict that this platform will be named the app of the year for business and personal use of 2016. Most advisors are still worried about the age demographic on Snapchat. However,

that demographic is considerably younger – but are young clients that bad for your business? Remember that a few years ago, before Facebook paid a billion dollars for Instagram, the platform was in the same situation, with 98 percent of its audience under 25 years old. Fast forward to just a few years later and just last year, in 2015, Instagram was the most popular and fastest growing platform amongst 45- to 60-year-olds. Snapchat is next, and the key is moving fast and getting in early, before the platform is over saturated with marketers. The “selfie” culture is here, and it is not going anywhere, anytime soon. How do you get started? Easy, do precisely what you think you should do to market yourself as a human being, not a corporation and certainly not a robot. Personally, I believe that social media marketing is all about marketing to people without them knowing you are doing so. This process is known by many, thanks to Gary Vaynerchuk as “jabbing,” which means providing valuable content separate from WISCONSIN INDEPENDENT AGENT

TECHNOLOGY small things that make a big difference to my clients. Some examples are: working a late appointment, visiting a client who is in the hospital, or simply taking someone to lunch.

Marketing in the social age is all about going where the attention is, getting there quick, and portraying your personality as someone real and human.

This sounds silly, but in doing all of these things I am getting between 20 and 50 people watching each “snap” and when most of these people are needing insurance, they will think of me.

solicitations. This content can sometimes even be irrelevant to your business.

I would like to also add that the closest I get to a solicitation is taking a photo with a new client whom I have saved a large amount of money on their premiums. The most interesting thing I have done is coincidentally one of the most irrelevant posts thus far. I like to wear wacky socks, it is part of my personality, and therefore, every day, I take a Snapchat of my socks for the day with the tag line “sock game strong.”

I like to record my day-to-day activities on Snapchat and send them out to my followers, and within that, I like to include pictures or videos of myself doing those

This started as a joke and has unintentionally turned me into “The insurance agent with the crazy socks,” This has actually driven some business my

WISCONSIN INDEPENDENT AGENT

way. I even had a person approach me in a restaurant, on a day that I did not do a “sock game strong” post, and ask me what socks I was wearing. The person then told me that he loved logging in to see my crazy socks for the day and wanted to know if he could get an insurance quote. Marketing in the social age is all about going where the attention is, getting there quick, and portraying your personality as someone real and human. But, at the same time, you are different and unique from your competition. I am 100 percent sold that Snapchat accomplishes all of these objectives and I have the results to prove it. Don’t wait until it is too late, start snapping.

> Bradley Flowers runs a property, casualty and life insurance agency representing Alfa Insurance in Saraland, AL. This article first appeared on LifeHealthPro. com (ALM Media) in January 2016.

MAY 2016 | 13

MARKETING

WHY BUSINESS TODAY NEEDS TO BE MORE THAN BUSINESS Imagine visiting the local TV and appliance store. You are there to purchase a new flat screen for the living room. Before you is a huge display of televisions. There must be more than a hundred! A salesperson comes over to assist you. He answers your questions about resolution, quality, and features, as you stare at the colorful images dancing on the screens in front of you. After a short time, you make up your mind on the exact brand and model you want and start out the door. Before you have reached your car you receive notification from an online retailer that they have your model in stock for $200 less and with free shipping to your house. Score! This scenario isn’t a whole lot different than the world of insurance. In an age where a few minutes online could save you fifteen percent or more it is easy to see why agents face bigger challenges today than just fifteen years ago. Your product is being commoditized. Because the consumer doesn’t understand the value of the agent they look for ways to minimize the cost on something they know they need and hope they never use.

world, the little guy can win. He or she has to make a difference. Over the last decade I have helped scores of businesses define what makes them unique while putting in place the business culture to achieve double-digit growth. For any company to succeed today they have to make their organization more than the products or services they sell. If you don’t, you face being one of the many businesses forced to compete on price. When price wins, everybody loses. Consider how the following could impact your business:

DToday’s consumer is more civic minded. DSeventy percent of Millennials have purchased a product to support a cause.

Many businesses face this challenge regardless of industry. Salespeople and CEOs alike make the tired argument, “We are better because of our quality and service!” To date, I never had someone tell me their products were crap and their service sucked, but I should buy anyway. Creating sustainability in your business takes more, much more, now than it did in the past. There needs to be a clearer definition of “why you” and it has to be backed with proof that the consumer can relate to. When going up against the Geicos and State Farms of the

Marketing has changed with the Internet and social media. Information is shared so rapidly that it’s outdated if you wait for the

DNinety percent are likely to switch from one brand to another if the second supports a cause. This is even if quality and price are equal.

DOnly thirty-two percent of US workers were engaged in their jobs in 2015.

DGen Y is now the majority of the workforce and they are driven by open communication, a great company culture, and involvement with causes, and achieving purpose and fulfillment. Bottom line: if you are going to sustain your business you have to be more than a business. If you face challenges with growth, hiring, retention, or competition there are things you can do that will make a positive impact to your bottom line today and your success tomorrow. It all starts at the top.

six o’clock news. Your first cause is YOU - Maybe you have heard of the book, Start With Why by Simon

14 | MAY 2016

Sinek. He states great leaders need to inspire action. Most companies haven’t defined what their cause is nor have they developed a story to explain why they are different. People are looking for purpose. They want to know what they do makes a difference. As an owner, you need to ignite that passion. As a producer you need to share that ‘why’ with your clients and prospects. As a CSR you have to show the client that you mean it. What’s your story? Why does your agency matter? Your second cause is your community - Some of you might interpret this as sponsoring local high school sporting events. Today it involves getting your team to rally around making a difference in your community. Money is important. I can’t think of a not-forprofit that would turn down cash. However, time matters just as much. Employees should be encouraged and supported when it comes to volunteering or fundraising. Making causes part of your business model will be critical for the foreseeable future. Visibility of your actions - Marketing has changed with the Internet and social media. Information is shared so rapidly that it’s outdated if you wait for the six o’clock news. With smartphones, the average Joe is now the reporter constantly logging and tagging the actions of others. Why not use this to your advantage? Encourage your > Dan Paulson is CEO of team to share their IDI, LLC. He works with volunteerism and businesses to develop strategies and leadership celebrate their actions. that create high growth When you become companies. Learn more the forum everybody at plan-coach-develop. com. wins. WISCONSIN INDEPENDENT AGENT

MARKETING

Get clients in on the action - Share with your clients what you are passionate about. Record testimonials if it’s celebrating the why for your business. People can relate to stories more than they can to statistics. Share the family business you helped save after a fire. Have a customer tell how, by having the right insurance, they were able to avoid serious legal or financial hardship. If the story is about causes you support try to get customers involved through donation or participation.

Be authentic - Do good because it’s the right thing to do and is something you can support wholeheartedly. People can tell if your actions are not cause related. Consumers want authenticity and are willing to overlook mistakes if they believe a business is trustworthy. On July 15, I will be speaking at the IIAW Leadership Conference where I will be sharing the tools for growing a profitable and sustainable business. That morning I will expand on this topic and many others that will help your agency thrive for years to come. See you there!

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MAY 2016 | 15

SALES

BUILDING RAPPORT BRINGS SALES Most salespeople handle rapport casually compared to how important recognizing client rapport is. Few really prepare for rapport, and in not doing so, miss a big chance to differentiate themselves and make critical personal connections.

Like all other aspects of the sales dialogue, being excellent at rapport takes thought. The goal is to create a connection and build on it in a way that is concise and genuine. As for how much time to spend on rapport, rapport can be established in two to ten minutes (or more) depending on the client, situation, and culture. Regardless of how much time, and especially if time is short, it is important to effectively establish rapport. Here are some best practices for building highmileage rapport: > Prepare to build rapport. Do your homework. Ask colleagues and gain insights into the client. (After you meet with your clients, include personal information in addition to business needs and strategy in your CRM. Refer to the information before each contact so you can use it.) > Ask personal interest questions appropriately. Show interest — for example, if a client says, “My daughter is in an ice skating competition,”

16 | MAY 2016

ask about the competition and his/her daughter. > Most importantly, know how to keep the focus of rapport conversation on the client, not yourself! It’s okay to make a comment such as, “Our family has also been very involved in ice skating, and our daughter competes in college.” Sharing is important, BUT STOP there and ask a question to get back to the client’s daughter or situation. Too many salespeople mistakenly think rapport is 50/50 (or more in their favor). > Be prepared with ideas for rapport, but also be flexible to cues in the office — such as posters, décor, photos — and be ready to adjust the discussion. > Read client signals for appetite for rapport, but don’t assume there is no interest on the client’s part in rapport. Initiate rapport. > Maximize the opening for rapport, but don’t limit it there. Look for opportunities during the call to connect. For example, if the client says, “I met with our production group in Hong

Kong. I was there three weeks,” take a second to acknowledge and ask about travel and if he/ she had some free time before exploring the needs of the production group. Often with prospects, the end of the call is an even better time to build rapport because they can feel more comfortable with you at that point than in the opening. > End each call with personalized rapport based on the discussion. For example, “I wish your daughter great success in the competition.” Create a final positive impression with a summary of the next step and a thank you. > Remember to rapport in e-mails (or any communications) in the first sentence (Thank you…), and end with personalized rapport based on the personal information you learned, such as by saying, “Enjoy the conference.”

> Linda Richardson is the founder of Richardson, a global sales training business. Learn more at richardson.com

WISCONSIN INDEPENDENT AGENT

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S W E N E H T N I S R E B MEM Meyer-Kobussen a Torchbearer for Womenowned Businesses In April, Meyer Insurance president Lise Meyer-Kobussen received an unexpected letter from Wisconsin’s governor. In it, Gov. Scott Walker identified her as a “torchbearer” for women, a recognition she received as part of the 2016 Governor’s Trailblazer Awards for Women in Business.

business so much, she and her husband Dan took over as owners of the agency in 2004. “I can vicariously enjoy other people’s lives through insurance,” MeyerKobussen said. “I have long-term relationships with people. I watch their kids grow up. They all have interesting stories about their lives. You find out what’s important to them.” In a press release about the Trailblazer awards, Gov. Walker highlights the importance of women like Meyer-Kobussen.

“Here in Wisconsin, we have many woman-owned businesses leading the She is one of 14 recipients from eight counties way for others like them. It’s great to acknowledge these business owners around the state, and the only winner from Sauk for their hard work and commitment to excellence. We hope they will County. To date, 71 Wisconsin women-owned continue their businesses legacy and be role models to other women who Lise Meyer-Kobussen businesses across 24 Wisconsin counties have been are considering opening a business and creating jobs in Wisconsin.” recognized as Torchbearers and Trailblazers. The torchbearer designation comes from Meyer-Kobussen’s role as a third generation business owner of For more information about Meyer Insurance, please visit meyeragency. an insurance agency that’s nearly 100 years old and has had women as its com. principles beginning with her grandmother. Kim Lamoreaux of the Sauk Prairie Eagle wrote this article. The agency was started in 1919 by Meyer-Kobussen’s grandfather, Rolf Meyer after he returned from World War I. Her parents, Paul and Barbara Meyer, bought the agency in 1956 after Rolf’s sudden death, and operated it SFM Board Names Miller out of the their home. Executive VP & COO The SFM Mutual Insurance Co. Board “People would come to the door; they’d have to walk over my legs as I was of Directors has named Terry Miller watching TV,” Meyer-Kobussen said. “So my parents added on a separate executive vice president and chief entrance.” operating officer. She was in college when her parents bought Meyer’s current location across the alley from her parents’ home, where she and her husband Dan live and have raised their family. As the family business thrived, Meyer-Kobussen had other plans once she was out of college. She lived in Washington, D.C. where she sold specialty foods to restaurants and hotels. While living there, a missionary group called Youth With a Mission visited her church. They were part of a traveling hospital ship that visited underdeveloped countries Terry Miller giving medical services to poor people. Meyer-Kobussen was hooked. “My ship came in – literally,” Meyer-Kobussen said. “I was one of 355 people who lived on board the ship.” She managed the ship’s gift shop, bookstore and snack bar. After nearly 10 away from the Sauk Prairie area, she came home. Her dad had heart surgery in 1994, so Meyer-Kobussen jumped in to help out. Her sales and marketing background served as a good basis to help run the business. Her parents retired in 1999 and Meyer-Kobussen took over managing the firm. She said she never expected to be in the family insurance business, but since 1999, she hasn’t looked back. She immersed herself in insurance classes and got her agent’s license. She loved the

18 | MAY 2016

“Terry brings deep knowledge of workers’ compensation and a strong vision for the future of SFM,” said SFM President and CEO Bob Lund. “As someone who has been instrumental in making SFM the leader it is today, he is an exceptionally good fit for the role.”

Miller, of Eagan, was the company’s original controller, and he rose through the ranks in his 30-plus years at SFM to become vice president of accounting, vice president of finance, and then senior vice president and CFO. Over the years, he’s overseen the evolution of the finance department’s role from focusing on just the basics of accounting and financial statements to providing deep data analysis into forces and trends that affect the business. “To continue to be successful, we have to really understand better than our competitors what’s happening in the marketplace and be nimble enough to adjust,” he said. Miller started in the newly created role April 18. WISCONSIN INDEPENDENT AGENT

S W E N E H T N I S R E B MEM Wade Retires from Badger Mutual Miller is a certified public accountant and chartered financial analyst. He’s also a member of the Minnesota State Society of CPAs, the American Institute of CPAs, the CFA Institute and the Insurance Accounting and Systems Association. He serves on the National Association of Mutual Insurance Companies Accounting Issues Committee and the Insurance Federation of Minnesota’s Tax Committee as well as the board of directors for Small Sums, a St. Paul, Minnesota-based nonprofit.

Ansay & Associates Acquires Servant Insurance Regional insurance and benefits agency Ansay & Associates said it has acquired Servant Insurance Services, of Franklin, continuing its expansion in Wisconsin. Port Washington-based Ansay adds 13 employees and the personal, employee benefits and commercial insurance business of Servant in the transaction. “This acquisition aids in Ansay & Associates’ vision of being a statewide insurance and employee benefits advisor,” Mike Ansay, chief executive of Ansay & Associates, said in a statement.

Badger Mutual Insurance Company congratulates Dave Wade, CIC, on his announcement that he is retiring June 30, 2016. Dave has been Badger’s Marketing Regional Manager for 35 years servicing agents in Wisconsin from Madison to Superior. His forte has been his professionalism and dedication to his agents. Dave is Dave Wade respected by his agents and is known for his thoroughness, attention to detail and never failing to “get back promptly with an answer.” He served several terms as company representative on the Wisconsin PIA Membership Committee. He also served all offices of the Wisconsin 1752 Club, including President. Dave is an avid hunter and fisherman. For more information about Badger Mutual, please visit Badgermutual.com.

Robertson Ryan & Associates Welcomes Wallrich Agency

Mark Priestaf, president of Servant, and his wife, Tamia, chief financial officer, will continue in their leadership roles.

On March 1, 2016, Wallrich Agency based in Shawano, WI, joined Robertson Ryan & Associates. Wallrich has an established reputation as a family agency and has been providing Shawano area residents with personal, farm, health and commercial insurance for over 80 years.

“My wife, Tamia, and I are excited with the unique nature of the Ansay model, which enables our wonderful team of insurance professionals to keep right on serving our valued clients, yet provides access to more products, services and resources for our clients.” Priestaf said. Servant has an office in Oshkosh, in addition to Franklin.

Cap Wallrich

Ansay & Associates has more than 5,000 Wisconsin business clients and 20,000 individual customers. It has more than 220 employees in 10 offices throughout Wisconsin. In 2009, when the firm launched its expansion strategy — which includes expanding existing operations as well as acquisitions — it had about 75 employees. For more information about Ansay & Associates, please visit Ansay. com. Aaron Wallrich Paul Gores of the Journal Sentinel wrote this article. WISCONSIN INDEPENDENT AGENT

The owners joining Robertson Ryan from Wallrich include Cap Wallrich and Aaron Wallrich. Both will assume the role of vice president within Robertson Ryan. The agency will remain a Shawano independent agency and continue to be staffed with their dedicated service team. This is Robertson Ryan’s 9th Wisconsin location. Cap Wallrich specializes in small and medium-sized business insurance. He has over 30 years’ experience in insurance and has built specialty plans for contractors and CONTINUED ON NEXT PAGE

MAY 2016 | 19

WS E N E H T N I S R E B M ME Philadelphia Insurance Renews Mission to Plant 80,000 Trees CONTINUED FROM PREVIOUS PAGE

equine (horse/farm) operations. Aaron Wallrich specializes in personal lines insurance and service improvements at the agency. He has 15 years’ experience and is passionate about technology and the insurance industry. Tony Von Rueden, Robertson Ryan & Associates’ Board President said, “Robertson Ryan is pleased to welcome Cap, Aaron and the entire Wallrich team. Their family values and client focused service philosophies closely align with that of Robertson Ryan. They will continue to bring industry expertise and insurance solutions to existing and new clients in Shawano, Gresham, Bonduel, Keshena and beyond.” For more information about Robertson Ryan, please visit Robertsonryan.com.

ACUITY Earns Best Workplace Video Award For the third year in a row, ACUITY is the winner of the “We Love Our Workplace” video contest from Great Place to Work®. By being chosen as the 2016 Grand Prize Winner, ACUITY earned $5,000 for the Wisconsin chapter of myTEAM TRIUMPH, an athletic mentoring program created for children, teens, adults, and veterans with disabilities who would normally be unable to experience endurance events such as triathlons or road races. In the 2016 contest, companies from across the country submitted a one-minute video that demonstrated why employees love their workplace. The winner was chosen based on the results of online voting. ACUITY’s video, which features many of the company’s staff members, highlights workplace benefits and elements of its corporate culture that also helped the insurer earn the #2 spot on the FORTUNE “100 Best Companies to Work For®” list. The video will be featured at the 2016 Great Place to Work Conference in San Diego in April.

Philadelphia Insurance Companies (PHLY) is continuing its partnership with the Arbor Day Foundation with a goal of planting 80,000 trees for the second year in a row. PHLY reached its 2015 goal of planting 80,000 trees through the combined efforts of its employees, independent agents and brokers, and policyholders. In January 2016, fifty PHLY employees traveled to Bastrop, TX to complete the 2015 PHLY 80K Trees campaign. The group joined TreeFolks and Texas Parks & Wildlife to plant the final 6,000 trees in Bastrop State Park, a park and community devastated by wildfires. To achieve the goal of planting 80,000 trees in 2016, PHLY is once again inviting its independent agents and brokers and policyholders to sign up for paperless statements. PHLY will plant ten (10) trees for each agent who enrolls in direct deposit of commissions. PHLY will plant fifteen (15) trees on behalf of each customer who enrolls in electronic billing. “Environmental changes have drastically affected our industry, requiring that we closely look at how to best serve our customer,” shared Bob O’Leary, president and chief executive officer of Philadelphia Insurance Companies. “PHLY 80K Trees addresses the imperative need to build healthy forests and ecosystems to provide greater security to communities, including PHLY’s policyholders.” There are over one million acres in desperate need of replanting due to natural disasters according to the U.S. Forest Service. PHLY’s efforts to support the planting of 80,000 trees will help provide greater security to communities, including PHLY’s policyholders. For more information about the initiative, please visit PHLY.com/ GoPaperless.

CNA To Relocate Its Wisconsin Branch CNA recently announced it will relocate its Wisconsin Branch to 10000 Innovation Drive in Wauwatosa, Wisconsin, on April 18, 2016. CNA’s Wisconsin Branch is currently located at 13845 Bishop’s Drive in Brookfield, Wisconsin.

“Our team is excited to call 10000 Innovation Drive in Wauwatosa our new home,” said Kristina Talkowski, Vice President, Wisconsin Branch. “2016 marks CNA’s 85th year with a branch in Wisconsin and we are excited to mark this milestone with a move to a new location where we “ACUITY is honored to be chosen as the best video for the third will continue to provide our valuable Wisconsin customers, agents and consecutive year,” said Ben Salzmann, ACUITY President and brokers distinctive insurance, risk control and claim solutions for their CEO. “Our people make us who we are. Their passion for their work and their love of the workplace shows in everything they do businesses delivered through our outstanding local team.” and the service we provide our agents and customers.” The Wisconsin Branch is among CNA’s network 49 offices in the U.S., five All of ACUITY’s award-winning videos are available for viewing at in Canada, and 14 in Europe and Asia, with the ability to access more than 200 countries and territories. www.acuity.com/careers. For more information about ACUITY, please visit Acuity.com.

20 | MAY 2016

For more information about CNA, please visit CNA.com. WISCONSIN INDEPENDENT AGENT

ERRORS & OMISSIONS

CHOOSE WISELY: COVERAGE LIMITS FOR E&O POLICIES It’s very common for a customer to ask his or her insurance agent, “How high should my liability limits be?” It’s about equally as common for a member of our Association to ask our E&O administrators, “Please recommend a limit of insurance for my E&O policy.”

Tom Cotton, is an IIABA member and expert witness in his “spare time.” When a customer asks Tom, “What liability limits should I carry?” his response is, “How big will the claim be? You need liability limits that are one dollar more than you’ll be sued for.” Of course, Tom’s kidding around with his answer because we never know what a claim might be. Tom’s “serious” answer to the question is, “You should always buy as much insurance as you can comfortably afford.” When it comes to liability limits for customers, agency staff should explain the coverage, quote what was requested and then provide quotes for limits above what was requested. Errors & Omissions classes stress (and E&O defense attorneys advise) to quote the next higher limit, and maybe a few additional options. Today’s quoting technology makes it fairly simple to obtain multiple limits. E&O attorneys will tell you that by quoting multiple limits of coverage above what was requested, the agency is a lot better off if the limits on the policy are not adequate. The same concept is true when it comes to selecting a limit for an agency E&O policy. How bad will the E&O claim be? That question, of course, has no answer. A few things to consider when selecting a limit of coverage for an E&O policy might be: >> What is the most expensive building you insure? >> Of the accounts you write, which has the highest liability limit? It makes sense that the E&O limit should be for the worst possible mistake an agency could make. Dan Britto, an attorney at the William W. Price law firm, has been defending agents in E&O claims for over a decade. WISCONSIN INDEPENDENT AGENT

About 75 percent of his practice is E&O defense. His expert response to this topic follows:

I have many clients who ask the same question. I think it’s a slippery slope for an agent to “pick” limits for the insured. In the world of CGL and auto liability claims, there is always the potential for a claim that will far exceed any given limit. The question regarding limits should be answered with another question: “How big will your future claim be?” I think it’s a good way to open the conversation with the customer to make the point that there is no predicting or completely controlling how big a future claim might be. Unlike auto and CGL claims, most of the time we know what the cap will be on an E&O claim. Usually the exposure on a claim against an agent is what the insurance policy would have paid out had it been “properly procured.” For example, if an agent negligently fails to renew a $1 million umbrella and there is a claimed loss of $5 million, the agent’s liability is capped at $1 million. There are exceptions to this rule, such as consequential damages, but for the most part, the worst day in court is set at the limits of the policy that was not properly procured. Using this rule as a measuring stick, if an agent is writing policies with a $5 million limit, then his or her exposure is $5 million. Ideally, an agent should have E&O limits high enough to cover the largest policy it sells. Insurance professionals who quote and rate liability insurance know that the cost to increase liability limits can be minimal. The premium to increase your limits may surprise you. Take a look at the additional limits offered with your next renewal and request additional limits after examining your book of business if your exposure is greater than the limits offered.

> Meggen Gagas (meggen@iiaw.com) is the IIAW’s Director of Agency Services. Adapted from David Thompson’s 2016 article, “How High Should My E&O Limits Be?” David is a CE instructor on a variety of insurance topics throughout the country.

MAY 2016 | 21

COMMENTARY FROM COUNSEL

REVISIT WISCONSIN’S CAMPAIGN FINANCE & ELECTIONS LAWS Wisconsin’s Presidential primary and a contentious Supreme Court election are in the rearview mirror—but the campaign fun is not over. By the time you read this, election day will still be six months away. A presumptive nominee with an army of “super-delegates” will have emerged on the Democrat side, and they will be making room for a circus tent in Cleveland for the Republican convention. The volume (as measured both by amount and decibel level) of rhetoric present in this year’s campaign is amazing to behold and, of course, driven by strongly-held ideological positions. But, as everyone knows, campaigns are also driven—or at least fueled—by something else: money. The debate will continue to rage on over the propriety of money in elections, but for now, it is present and being put to use in unprecedented amounts. Late last year, Wisconsin campaign finance and election law was largely overhauled and now is a good time to look at some of the changes. With the help of my firm’s political law team, we put together the following summary.

Act 117 and Act 118 – Revising Chapter 11 and Creating New Commissions On December 16, 2015, Governor Walker signed into law 2015 Wisconsin Act 117 (“Act 117”), repealing and recreating chapter 11 of the Wisconsin statutes governing campaign finance. In addition to Act 117, 2015 Wisconsin Act 118 was enacted, which dissolved the Government Accountability Board (“GAB”) and replaced it with two independent commissions. First, the Ethics Commission, which will administer and oversee campaign finance under the new chapter 11, lobbying under chapter 13, and ethics laws under chapter 19. Second, Act 118 created an Elections Commission to administer and oversee election administration laws under chapters 5 through 10 and 12. And, while Act 117 became effective on January 1, 2016, the dissolution of the GAB and creation of these two new commissions will not be effective until June 30, 2016. The functions of the GAB and the two new commissions are not covered in this column, which focuses instead on legal entities, contributions and political activities.

Act 117 and Campaign Finance In response to a number of court decisions regarding Wisconsin campaign finance laws,

22 | MAY 2016

including the Wisconsin Supreme Court’s decision in State ex rel. Two Unnamed Petitioners v. Peterson, Act 117 codified contribution source restrictions, contribution limits, and the regulation of independent political speech. Some of the notable provisions in Act 117 that may impact your campaign contributions and activities include: Increased Contribution Limits. Limits on contributions to candidate committees are generally increased or eliminated. Individual and political action committee (“PAC”) contribution limits are doubled; existing PAC limits are rounded to the nearest $1,000 and then doubled. Contributions by candidate committees are now subject to the same limits as individuals rather than PACs. With the exception of contributions to the governor and the attorney general, this results in increased contribution limits for transfers by a candidate committee. Party and legislative campaign committee contributions are unlimited. Increased Contributions to Local Candidates. Limits on contributions to local candidates are also increased. While based on population of the jurisdiction or district the candidate seeks to represent, the new cap is no less than $500 and no more than $6,000 for individual contributions and candidate committee transfers, and no less than $400 and no more than $5,000 for PAC contributions. Unlimited Party Transfers. Political parties and legislative campaign committees may make unlimited contributions to candidate committees. Increased PAC Contributions. The annual limit on PAC contributions to political parties and legislative campaign committees is

doubled and set at $12,000. PACs may make unlimited contributions to other PACs and to a segregated fund established by a political party or legislative campaign committee provided that the fund does not make contributions to candidate committees or disbursements for express advocacy. “PAC-Out” Limits Eliminated. Candidates and political parties are no longer limited in the total amount of contributions they may receive from PACs. Corporations, Labor Organizations and Tribes Restricted. Corporations, cooperatives, unincorporated associations, labor organizations and federally recognized Indian Tribes (“tribes”) may contribute unlimited amounts to independent expenditure committees and referendum committees. They may also make contributions of up to $12,000 annually to a segregated fund established and administered by a political party or a legislative campaign committee provided the fund does not make contributions to candidate committees or disbursements for express advocacy. Otherwise, these contributors are prohibited from making contributions. LLC Contributions Permitted. Prior to Act 117, all LLCs were treated as corporations prohibited from making contributions to committees. Now, certain LLCs may contribute to committees, including candidate committees. These contributions are treated as individual contributions and subject to the applicable limits. In-Kind Valuation and Exception for Private Residence Events. For non-cash contributions, the requirements for establishing the value of in-kind contributions at fair market value and WISCONSIN INDEPENDENT AGENT

COMMENTARY FROM COUNSEL The debate will continue to rage on over the propriety of money in elections, but for now, it is present and being put to use in unprecedented amounts.

the value of polling per a statutory formula will not change. In-kind contributions do not include uncompensated services provided to a committee, even if the individual would normally charge a fee for those services. Inkind contributions do not include the cost of invitations, food and beverages for a candidate event at a private residence. Unlimited Sponsorship Exceptions and No Reporting. Sponsors of PACs, independent expenditure committees and conduits may spend unlimited amounts on administrative and solicitation activities. Independent Expenditures. Independent expenditure committees may receive unlimited contributions from PACs, other independent expenditure committees, corporations, cooperatives, tribes, unincorporated associations, and labor organizations for the purpose of engaging in express advocacy – communications that expressly advocate for the election or defeat of a clearly identified candidate. PACs, political parties, and legislative campaign committees may make independent expenditures as well, but they may not receive contributions from independent expenditure committees, corporations, cooperatives, tribes, unincorporated associations, and labor organizations to fund them. Issue Advocacy Exempt. Issue advocacy communications are not subject to regulation WISCONSIN INDEPENDENT AGENT

under chapter 11. These are communications that avoid any statements of express advocacy and provide information about a public official, candidate or public policy without calling for anyone’s election or defeat.

Corporate Campaign Spending Under both Wisconsin and federal campaign finance law, corporations are generally prohibited from contributing to candidates, political party committees, legislative campaign committees and political action committees (“PACs”). Instead, “hard money” contributions originate with individual funds. But while a corporation may not make direct contributions to state and federal political committees, corporate funds may be used under other circumstances including: > Corporations may establish state or federal PACs and spend unlimited amounts for administration and solicitation expenses related to operating the PAC; > Wisconsin allows corporations to make disclosed contributions of up to $12,000 annually to a political party’s or legislative campaign committee’s segregated fund account; > Corporations may contribute to PACs in states where such contributions are allowed and those nonresident PACs are not prohibited from making contributions to Wisconsin committees;

> Corporations may directly sponsor independent expenditures; and, > Corporations may make unlimited donations to: SuperPACs (donation publicly disclosed); Section 527 organizations (donation publicly disclosed); Section 501(c)(4) organizations (donation not publicly disclosed); and Section 501(c)(6) organizations (donation not publicly disclosed).

Conclusion This column is by no means an exhaustive summary of campaign finance law; and as you can tell, it is deep water and must be navigated with caution. Hopefully, however, by highlighting some of the changes in the law as well as the political activities that businesses which are either LLCs or corporations may participate in, you and your agency can enjoy the final six months of this election year with your eyes wide open. If you have any questions about a particular campaign event, a contribution issue or registration and reporting obligations (which are not > Josh Johanningmeier covered here), is the IIAW’s General please do not Counsel. Call the Legal hesitate to call or Services Hotline at (877) 236-1669. email.

MAY 2016 | 23

CHECK POINT Don’t let automatic renewals increase your E&O exposure

Insurance agents face significant E&O exposure when securing personal lines coverage for their clients.

process enables agents to document the client’s rejection of enhanced coverage, higher limits and other insurance products. A completed and signed application also documents both the scope and nature of the requested coverage and the exact information used to obtain that coverage.

From homeowners to auto, personal lines policies typically renew automatically without a formal renewal process that gives agents an opportunity to check for changes in customer needs. Coverage gaps often result—and the potential for an E&O claim goes hand in hand.

In order for a claimant to ‘win’ a negligence

case against you or your agency, he must prove

This is your first line of defense when facing an E&O claim: Such

several elements: duty, breach, causation and

documentation is often the determinative factor for a judge or jury when a client’s recollections regarding a coverage request differ greatly from the agent’s, or when the procured coverage does not comply with the agency’s request for insurance coverage.

legal (proximate) cause,

Here are three things to keep in mind when servicing your personal lines accounts to avoid E&O exposure:

and damages.

New personal lines accounts: Obtaining a signed application from your client, regardless of the relevant insurance carrier’s requirement, is the most effective way to protect your agency when procuring personal lines coverage. The application and proposal

24 | MAY 2016

Carrier change: Not all policy forms and exclusions are created equal in standard and surplus line markets. Many surplus lines—and some admitted carriers—are moving toward using non-ISO and manuscript forms. As a

result, a quote-to-quote comparison may not provide a true ‘apples-to-apples’ review. It may be more appropriate to share a copy of the carrier’s specimen policy to determine the exact coverage terms each quote sets forth. To reduce surprise coverage gaps that could expose the agency to E&O claims, the customer’s file should contain all communication between the agency and carrier concerning any aspect of procuring coverage. Existing coverage change: Consider adopting and enforcing a policy that requires all personal lines clients to submit, or the agency to confirm, all change requests in writing. This practice ensures the agency’s file fully documents all changes to existing personal lines coverage—the best weapon of defense against E&O claims. It’s easy to fall into the trap of ‘renewing as is’ when it comes to managing your personal lines book of business. Don’t limit your agency’s ability to better service clients, grow cross selling and avoid potential E&O claims.

> Crystal Ivy is an assistant VP and claims specialist with Swiss Re Corporate Solutions.

WISCONSIN INDEPENDENT AGENT

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HELP WANTED! and click on the ‘FLQG InVEST Near You’ link at the bottom of the page to find your local InVEST state champion or InVEST contact.

INDEPENDENT INSURANCE AGENTS OF WISCONSIN

2016 PRELICENSING CLASS SCHEDULE Conducted at the 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: Designed to help you pass your state licensing examination. The quickest way to meet the WI 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.

2016 CLASS DATES Life & Acc./Health No May class June 6-9 July 11-14 Aug. 8-11 Sept. 12-15 Oct. 3-6 Oct. 31-Nov. 3 Dec. 5-8

PRICING & CLASS D E S C R I P T I O N S

Property & Casualty May 23-26 June 20-23 July 25-28 Aug. 22-25 Sept. 26-29 Oct. 17-20 Nov. 14-17 Dec. 12-15

To register, click the Education tab on IIAW.com. For WI exam info, visit prometric.com.

NON-MEMBER PRICING: $335 You may also take individual classes. Class descriptions and prices are below. Life & Accident/Health Day One (Monday) 8:30 a.m. - 4:00 p.m. ($80) SECTION A: Principles of Insurance & General WI Insurance Law Ethics Day Two (Tuesday) 8:30 a.m. - 4:00 p.m. ($85) SECTION B: Life Policies, Terms & Concepts Day Three (Wednesday a.m.) 8:30 - 11:30 a.m. ($42.50) SECTION B: Life Policies, cont. & WI Life Insurance Law Day Three (Wednesday p.m.) Noon - 4:00 p.m. ($42.50) SECTION B: Accident & Health Policies, Terms & Concepts

CLASS SITE/DIRECTIONS The IIAW is located at 725 John Nolen Dr. in Madison, WI. Take the Rimrock Rd. exit (north) off of Highway 12/18 (Beltline), turn right on to John Nolen Dr., then turn right immediately into the driveway. Located near the Alliant Energy Center.

Day Four (Thursday) 8:30 a.m. - 4:00 p.m. ($85) SECTION B: Accident & Health, cont. & WI Health Insurance Law

Property & Casualty Day One (Monday) 8:30 a.m. - 4:00 p.m. ($80) SECTION A: Principles of Insurance & General WI Insurance Law Ethics Day Two (Tuesday) 8:30 a.m. - 4:00 p.m. ($85) SECTION B: Property Policies, Terms & Concepts Day Three (Wednesday a.m.) 8:30 - 11:30 a.m. ($42.50) SECTION B: Property Policies, cont. & WI Property Insurance Law

INCLEMENT WEATHER If weather conditions are questionable, use your own judgment regarding your personal safety. However, any missed class time will have to be made up.

HOTEL INFORMATION Students requiring lodging will receive a special rate at the Clarion Suites, 2110 Rimrock Rd. in Madison. Please call the hotel directly at 608.284.1234 and ask for the independent insurance agent s discount.

R EGISTER

IIAW MEMBER PRICING: $320 Member pricing given for full class registrations.

FOR

Day Three (Wednesday p.m.) Noon - 4:00 p.m. ($42.50) SECTION B: Casualty Policies, Terms & Concepts Day Four (Thursday) 8:30 a.m. - 4:00 p.m. ($85) SECTION B: Casualty Policies, cont. & WI Casualty Insurance Law Please contact Katie at Katie@IIAW.com for information about multiple registration discounts. The course fee includes all class materials. Materials are distributed on the first day of class. You receive: • The Life & Accident/Health or Prop. & Casualty Insurance Study Manual. • The Intermediary s Guide to WI Insurance Law. • The State of WI Insurance Licensing Candidate Handbook. This provides all the necessary information to obtain a license.

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MAY2/2/2016 2016 8:31:25 | 29AM

FOOD FOR THOUGHT THE WOMAN WHO STRUCK OUT THE BAMBINO & THE IRON HORSE

With baseball season in full swing, there’s no better time for a good baseball story.

On April 2, 1931, the AA Chattanooga Lookouts played the New York Yankees in an exhibition Days after Jackie Mitchell (center) struck out game in Chattanooga Yankee superstars (from left) Lou Gehrig and in front of 4,000 fans Babe Ruth, the duo watched the female phenom demonstrate her fastball during spring training in and journalists. Jackie Mitchell, a 17-year-old Chattanooga, Tennessee, on April 4, 1931. girl, was called up that week to face the mighty Babe Ruth and Lou Gehrig. In the 1st inning, she struck out both men. The Lookouts’ owner, Joe Engel, was a publicity hound and recognized as the P.T. Barnum of baseball, and there is evidence that the event was staged. According to reports, Ruth threw his bat “in mock disgust,” whereas Gehrig moped back to the dugout, bat dragging on the ground behind him. Both Ruth and Gehrig were in the running for American League MVP. In 1931, Ruth hit .373; Gehrig hit .341. Both men hit 46 home runs that year. The game was also originally supposed to be played the day before on April 1 - April Fool’s Day - but called due to rain. However, if Ruth and Gehrig were in on an orchestrated stunt, they never said so. Other Yankees later gave mixed verdicts. Pitcher Lefty Gomez said the Yankees manager, Joe McCarthy, was so competitive that “he wouldn’t have instructed the Yankees to strike out.” Third baseman Ben Chapman, who was due to bat when Mitchell was pulled from the mound, said he “had no intention of striking out. I planned to hit the ball.” But he suspected Ruth and Gehrig agreed between themselves to strike out. “It was a good promotion, a good show,” he said. “It really packed the house.” Read the great article in Smithsonian Magazine written by Tony Horwitz and decide for yourselves. Source: Smithsonianmag.com

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