September 2015 WI Independent Agent Magazine

wisconsin

INDEPENDENT AGENT SEPTEMBER 2015

DRIVING CONSUMERS TO TRUSTEDCHOICE.COM

The things people care about the most are the things they just

can’t afford to lose.

Most people are looking to save money any way they can. Especially on things they can’t even see. Like insurance. But inferior insurance is just plain useless.

That’s why West Bend’s Home and Highway® policy makes sense. Not only does it protect just about everything your customers own, they also get great benefits like our Claim Free Award. If they don’t have a claim on their policy all year, they’ll get a portion of their annual premium back – in cash!

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 SEPTEMBER 2015 Eric Schwartz, Editor

Open Door Policy Partnership with Trusted Choice & Packers a Winning Combination . . . . . . 5 Public Service Burns & Wilcox Chairman Builds Insurance Endowment . . . . . . . . . . . . . . . . . 7 Sales Twitter for Insurance Agents: 5 Quick Tips . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Member Profile ACUITY Celebrates 90 Years in Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Government Affairs Check Out the Latest Capitol News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Errors & Omissions Understand Your Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Marketing How to Text Your Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Technology E&O Implications: Storing Client Information . . . . . . . . . . . . . . . . . . . . . . . . . 18 Virtual University The ISO Personal Auto Policy & Pizza Delivery . . . . . . . . . . . . . . . . . . . . . . . 21 Data Breach Protect Your Agency’s Data. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22 Association Leadership Meet Steve Leitch, 2015-16 IIAW President. . . . . . . . . . . . . . . . . . . . . . . . . . 24 Members in the News . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .26 Commentary From Counsel The Vanishing Independent Contractor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 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

On The Cover…

Thanks to a grant from Trusted Choice, the IIAW is once again tapping the power of the Green Bay Packers to drive consumers to TrustedChoice.com with radio and web advertising. Partnering with a winning team makes good business sense. The NFL ranks the Packers as the #1 market for local broadcast listeners and the Packers Radio Network reaches 1.1 million listeners per week who are 18 years old and older – prime insurance consumers. For more about our advertising efforts and why your agency should take advantage of TrustedChoice. com, please see Open Door Policy on page 5.

> ADVERTISERS & INFORMATION

Jack Riesch P.O. Box 1610, Waukesha, WI 53187-1610

AAA Wisconsin ................................................ 30

Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236

ACUITY Insurance ............................................ 31

Darrel Zaleski 4233 Southtowne Drive, Eau Claire, WI 54701 2015-2016 Committee Chairs

Applied Underwriters ........................Back Cover Badger Mutual ................................................ 29

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

Agency Operations....................................... Kim Dandrea 1300 South Green Bay Rd. #100, Racine, WI 53406

Burns & Wilcox ................................................ 15

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

Erickson-Larsen, Inc........................................ 17

2015-2016 Board of Directors

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

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

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

Guard Insurance .............................................. 19 IIAW Continuing Education .............................. 12 Integrity Insurance ..........................................11

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

JM Wilson ....................................................... 23

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

Pekin Insurance.............................................. 25

Industry Relations ....................................... Kevin Murray 525 Junction Road, Madison, WI 53717 Marketing & Membership Development ........... Jeff Thiel P.O. Box 1610, Waukesha, WI 53187-1610

Robertson Ryan................................................ 7 SECURA Insurance ............................................ 8 Society Insurance............................................. 6

Smaller Agencies .................................... Michael Walston P.O. Box 236, Kewaunee, WI 54216-0236

The IMT Group ................................................ 20

Technical ................................................... Mark Truyman P.O. Box 6, Seymour, WI 54165 Technical ...............................................Timothy Kakuska P.O. Box 547, La Crosse, WI 54602-0547

West Bend ........................................................ 2 Western National.............................................. 4 SEPTEMBER 2015 | 3

4 | NOVEMBER 2014

WISCONSIN INDEPENDENT AGENT

OPEN DOOR POLICY

PARTNERSHIP WITH TRUSTED CHOICE AND GREEN BAY PACKERS A WINNING COMBINATION

As the Green Bay Packers take the field this season, expectations are high that the team will again lead the division and prepare for a long run in the playoffs. We’ve all become accustomed (and maybe a little spoiled) to the winning ways of the Green & Gold.

That’s why the Independent Insurance Agents of Wisconsin are once again tapping the power of the Packers to drive consumers to TrustedChoice.com with radio and web advertising. We are partnering with a winner.

Thanks to a generous grant from Trusted Choice, you will hear TrustedChoice.com advertising before, during and after the games all season long, including this past preseason.

The NFL ranks the Packers as the #1 market for local broadcast listeners. The Packers Radio Network blankets the state of Wisconsin and reaches 1.1 million listeners per week who are 18 years old and older.

This ad buy is calculated to reach one audience — potential insurance customers — and our two-pronged media strategy is doing just that.

The NFL ranks the Packers as the #1 market for local broadcast listeners. The Packers Radio Network blankets the state of Wisconsin and reaches 1.1 million listeners per week who are 18 years old and older. Over the course of a long season, the radio spots could reach more than 200 million listeners. That’s a lot of people with homes and cars that need insuring.

Nearly 50% of the fans that watch the games on TV are listening to the radio broadcast. More than 75% of the audience are homeowners and many own two homes.

The audience is 55% more likely to have a household income over $100,000 and 57%

WISCONSIN INDEPENDENT AGENT

more likely to have a household income over $150,000.

Our online big box ad on WIsports.com (part of 620 WTMJ-AM, the Packers flagship station and one of the most popular in Milwaukee) generated another 500,000 impressions.

We are getting the word out about TrustedChoice.com and consumers are taking notice. Like I wrote last month, Web traffic has increased from 184,000 visitors in June 2014 to 237,000 in June 2015.

It’s not just young people who are always connected. We live in an online world and it’s time for your agency to realize the benefits of TrustedChoice.com.

The website is unlike any other currently available to insurance prospects. For example: D Tools and filters allow customers to find an independent agent that fits their unique needs.

D Personal lines quoting for Auto and Home help them form an expectation about pricing.

D Exhaustive resources are available for research on specific lines of insurance.

D Consumers have the ability to evaluate multiple insurance companies.

The website was recently upgraded with several key improvements, most notably that Advantage agency profiles are now mobile enabled. In conjunction with this, the “Find An Agent” (FAA) feature was augmented on mobile to show the list of Advantage agencies.

Statistics show that 31% of FAA searches come from mobile. Google reports that 55% of their inquiries to Google Compare are coming from mobile devices.

If your agency’s website is not mobile

friendly, Google lowers your site’s ranking when consumers are searching with a mobile device. In other words, consumers are less likely to find you.

The easiest and most cost effective way to be found by mobile searchers is to purchase an Advantage subscription for your agency. Right now is a great time to sign up. Agencies that bundle both the Personal and Commercial Lines Advantage subscription receive an expanded profile, enhanced positioning, and other key benefits – all rolled into one subscription for just $98 a month. This is an exceptional value that can’t be beat!

Both agencies and carriers are finding value in TrustedChoice.com. ACUITY Insurance recently agreed to participate for both personal and commercial lines and we couldn’t be more excited. It’s fantastic to have another great IIAW sponsor and supporter of the independent agency channel join TrustedChoice.com.

ACUITY joins Austin Mutual, Liberty Mutual, Safeco Insurance, Selective Insurance, State Auto, The Hanover, Travelers, Westfield Insurance and Wilson Mutual as IIAW members that partner with TrustedChoice. com.

Let’s keep the momentum going!

To find out more about the Advantage subscription, please contact David Roeber, Account Executive, at 952.715.5911, or David. > Matt Banaszynski is the Executive Vice Roeber@trustedchoice.

President of the Independent Insurance com. You can also visit Agents of Wisconsin. agents.trustedchoice.

Contact him at matt@ com. iiaw.com.

SEPTEMBER 2015 | 5

© 2015 Society Insurance

Coverage for outages from overhead lines.

Small detail. Big difference.

When the power goes out, your customer’s business goes dark—and they start losing money. With Society, they’re automatically covered for loss of business income even if the outage is caused by storm damage to an overhead power line. After all, that’s how most outages occur. Ironically, other insurance companies see this as reason to exclude losses that result from storm damage to overhead power lines. If you agree that details like these can make a big difference, give us a call at 888-5-SOCIETY or visit societyinsurance.com.

PUBLIC SERVICE

BURNS & WILCOX CHAIRMAN BUILDS ENDOWMENT

FOR INSURANCE PROFESSORSHIP AT MSU Alan Jay Kaufman, chairman, president and CEO of Burns & Wilcox, has established a major endowment within the Eli Broad College of Business at Michigan State University to provide academic leadership in insurance.

The metro-Detroit based Burns & Wilcox is North America’s largest independent specialty insurance wholesaler.

The gift of more than $1 million from Kaufman and his wife Sue will establish the Alan J. and Sue E. Kaufman Endowed Professorship in Insurance and Risk Management.

A graduate of the MSU business school, Kaufman shares MSU’s passion for fostering growth through education. He has built emerging leadership and executive education programs within Burns & Wilcox, for universities and insurance professionals around the world, but believes more investment is required.

The insurance industry faces an enormous challenge in recruiting and developing top talent. We believe it demands a meaningful investment from the insurance community and universities.

“The insurance industry faces an enormous challenge in recruiting and developing top talent,” Kaufman said. “At Burns & Wilcox, we believe it demands a meaningful investment from the insurance community and universities. This professorship is just the first step. We want to build a complete program within the Broad College of Business where talented students can discover the wealth of opportunities that come with pursuing insurance as a career.”

The Broad College of Business seeks to raise more than $136 million

through the Empower Extraordinary campaign. Increasing the number of endowed professorships is an important goal.

“The Kaufmans’ Alan Jay Kaufman leadership gift demonstrates their confidence in our ability to graduate students with business acumen, practical judgment and hardworking excellence,” said Sanjay Gupta, acting dean of the Broad College. “It will go a long way in our quest to develop transformational thinkers and doers who make business happen.”

Today, the Broad College and MSU are among the many organizations and educational institutions Kaufman supports with his time and resources. He has been a member of the MSU Foundation Board of Directors and helped lay the groundwork for the university’s 1995 affiliation with the Detroit College of Law. “We are tremendously proud of Alan Kaufman for his exceptional contributions and leadership in business, law and the insurance industry,” said MSU President Lou Anna K. Simon. “Alan and Sue are philanthropic leaders for MSU at a critical time when greater investment is needed in higher education and specifically within insurance and risk management. It will make a significant difference in our ability to inspire and empower a new generation of business leaders.”

ϳϬй ŽĨ ĂŐĞŶĐLJ ŽǁŶĞƌƐ ĚŽŶ͛ƚ ŚĂǀĞ Ă ƉĞƌƉĞƚƵĂƟŽŶ ƉůĂŶ Ͳ >Ğƚ ZK Zd^KE Zz E Ğ WĂƌƚ KĨ zŽƵƌ &ƵƚƵƌĞ You’ve built a successful agency and book of business but don’t have someone to take it ŽǀĞƌ ǁŚĞŶ LJŽƵ ƌĞƟƌĞ͘ tŚĂƚ ĚŽ LJŽƵ ĚŽ͍

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

SEPTEMBER 2015 | 7

© SECURA Insurance

Let’s make sure they always dig what they do.

Building working relationships since 1900 Business • Home • Auto • Farm-Ag • Nonprofit

When you partner with SECURA, you’re family.

8 | SEPTEMBER 2015

Watch: secura.net/partners WISCONSIN INDEPENDENT AGENT

SALES

TWITTER FOR INSURANCE AGENTS: 5 QUICK TIPS The insurance industry has made huge strides in the last decade. Our underwriting decisions are now informed by complex computer models and mapping tools, and yet our networking has stayed more or less the same.

Although lunches, sporting events, happy hours and phone calls have driven marketing in the insurance industry since the beginning, with social media we now have the opportunity to reach our clients even when we can’t be physically together. Nothing will ever replace face-to-face meetings with our clients, but we can supplement those meetings using social media.

Go to Twitter.com and sign up, filling out the information requested. Then add a profile picture, header image and bio.

We commonly think of Twitter as a great place to read up on the latest celebrity gossip, follow a favorite company or keep up with the news.

But did you know that financial services is one of the most active industries on Twitter?

2. START FOLLOWING. Search for your colleagues, clients and competitors on Twitter and start “following” them. If they’re active on Twitter, you’ll see regular tweets.

And the insurance industry is a growing part of that segment. B2C (business-to-consumer) companies are leading the way; many B2C brands have done a great job at reaching customers via Twitter, earning them points for customer service and helping them gain new business. Meanwhile B2B (business-to-business) brands have been a bit slower to embrace social media, perhaps due to a lack of statistics linking social media to monetary gains. But it’s time to give it a try.

You also can search for industry terms like “insurance,” “insurance agent” or “property and casualty,” and see who appears in the search results. You may find industry leaders or organizations that you’d also like to follow as a result of your search.

Remember that this is your professional Twitter account, so be sure the information you provide reflects that. You can still have a personal Twitter account to share with friends; just be sure to keep the two separate.

3. JOIN THE CONVERSATION. Spend a few days just reading tweets from other insurance industry professionals to get an idea of what people are thinking and saying. Then, share

Nothing will ever replace face-to-face meetings with clients, but we can supplement those meetings using social media.

If you’re new to the insurance industry or just new to Twitter, here are five tips to help you use Twitter more effectively.

1. SIGN UP. You need to have an account to use Twitter, but getting one is easy. It’s easiest to sign up from a desktop or laptop computer, then download the app for your smartphone or tablet.

WISCONSIN INDEPENDENT AGENT

your own news and observations in 140 characters or less.

It may take some practice, but you’ll get used to being concise and using abbreviations. If you want to link to a website, use a service like Bitly or goo.gl, for example. That will help your character count stay below 140.

4. ENGAGE, DON’T SELL! Successful tweeting is more about sharing others’ posts than promoting your own content. Try to start a conversation or ask a question about something you’ve read that may be of interest to other insurance professionals.

The ideal ratio is 3:1—that is, three posts from others to every one of your own.

5. LEARN THE LINGO. Before you start using Twitter extensively, learn the language and understand the symbols. The following list is a brief overview of the most common terms and symbols; you can read more here or by searching online for the many articles and explanations available. > @Handle/Username: the @ symbol points to a Twitter user’s handle. This is your username on Twitter. > Home/Feed/Stream: This is where all of the tweets appear for everyone you follow. > Hashtag (#): A way to categorize your tweets.

You can search by hashtag to find tweets on a specific topic/event. > Mention: A tweet containing another user’s Twitter username, preceded by the “@” symbol. > Tweet: Your update or 140-character message. > Retweet (RT): A tweet by someone that is reposted or shared.

> Kerri Tanner is a Property Facultative Underwriter for Gen Re.

SEPTEMBER 2015 | 9

MEMBER PROFILE

The company has undergone undergone a cultural metamorphosis, transforming from a rigid workplace that suffered 28 percent annual turnover prior to 2000 into one of the best companies to work for anywhere.

ACUITY CELEBRATES 90 YEARS IN BUSINESS ACUITY marked its 90th year in business on August 24, 2015. The insurer began operations in 1925, when it was founded as the Mutual Automobile Insurance Company of the Town of Herman.

Over the years, the company changed its name — to Heritage Insurance and then ACUITY in 2001 — and became a leading regional insurer.

Today, ACUITY writes personal and commercial insurance in 24 states and manages over $3.5 billion in assets.

Over the past 16 years, ACUITY has undergone a remarkable transformation, beginning with the company’s corporate culture.

“We’ve undergone a cultural metamorphosis, transforming from a rigid workplace that suffered 28 percent annual turnover prior to 2000 into one of the best companies to work for anywhere,” said Ben Salzmann, ACUITY President and CEO. Fortune and Great Place to Work rank ACUITY as the #3 large company to work for in the nation. Only Google and The Boston Consulting Group are above the Sheboygan-based insurer.

ACUITY’s cultural renaissance has contributed to its financial success.

Year after year, ACUITY has outperformed the industry, and the company did so again in 2014, growing its revenue 10.6 percent while

10 | SEPTEMBER 2015

recording a combined ratio of just 94.9.

In its 90th year in business, ACUITY has grown to become the 61st largest property-casualty insurer in the nation, setting all-time company records for written premium, policyholders’ surplus, and assets under management.

The company was recently named a Super Regional P&C Insurer and has made the Ward’s 50 Benchmark Group of top-performing insurance companies for 16 consecutive years. This places ACUITY in the top 2 percent of insurers nationwide.

ACUITY’s achievements over its first 90 years in business position the company well for continued growth and success.

“We’ve become a leading regional insurer by recruiting and retaining top employees and agents and providing them the best technology the industry has to offer,” Salzmann said. “We are poised operationally, strategically, and financially to create a successful future for all our stakeholders — agents, policyholders, and employees. ACUITY is a company that people can rely on, year after year.”

WISCONSIN INDEPENDENT AGENT

!

"

WISCONSIN INDEPENDENT AGENT

SEPTEMBER 2015 | 11

CONTINUING EDUCATION

1 . !" " + ! % 0 +- "

/5" /-.2 & ( !)

4#0- ' /#0-

" $ $"# $&+ ! "$% !&% & ! "' "! +-

//" /-.2

' $ $ .#-- ' 0#--

$" &" & * ! / & ( $+ !& "' !") !

$ /1 * $ /5" /-.2

' $ $ ..#-- ' 1#--

&+ %%' % &" "$$+ "'&/

! ! &+ $ !&% 1 & "! !%'$ %

3" /-.2

' $ $ .#-- ' 0#--

& $ ( + !%'$ !

5" /-.2

' $ $ ./#-- ' /#--

!%'$ ! ! & $"# $&+ %

.2" /-.2

' $ $ 4#-- ' .-#--

$" '$ % !' 2.3.4 0 ! 1 ( $( )

/-" /-.2

' $ $ ./#-- ' 0#--

" $ ! $ &+ "( $ %

.4" /-.2 ' $ % 4#-- ' ..#--

$"& & ( % &$ & % "$ "'$ ! +

/0" /-.2 ' $ % ./#-- ' 0#--

$&+ ", !

/1" /-.2 ' $ % ./#-- ' 0#--

'% ! %% '&" "( $ %

/2" /-.2 ' $ % 4#-- ' ..#--

$%"! '&" "& "# %

/4" /-.2 ' $ % ./#-- ' 0#--

" ")! $% ! *#"%'$ %

/5" /-.2 ' $ % ./#-- ' 0#--

& % ! !& &+

/5" /-.2 ' $ % ./#-- ' 0#--

FFOORR M MOORREE CCLLAASSSSEESS AANNDD TTOO RREEGGIISSTTEERR,, PPLLEEAASSEE G GOO TTOO IIIIA AW W..CCOOM M

GOVERNMENT AFFAIRS

CAPITOL NEWS OCI Joins State Based Systems For Producer and Company Licensing The National Association of Insurance Commissioners (NAIC) has announced that Wisconsin will be the 29th state to license State Based Systems (SBS), an electronic-filing tool designed specifically for NAIC member states to help improve efficiency for licensees, insurers and consumers. SBS offers a variety of product services for producer licensing, company licensing, consumer services, enforcement, fraud, exam tracking and revenue management.

SBS is designed to be compatible with the National Association of Registered Agents and Brokers Reform Act (NARAB II) enacted by Congress earlier this year that provides a mechanism through which licensing, continuing education, and other nonresident insurance producer qualification requirements and conditions may be adopted and applied on a multi-state basis without affecting the laws, rules, and regulations, and preserving the rights of states to regulate insurance producers.

Wisconsin is expected to transition to the new system in December and be fully operational

by January 2016.

New Worker’s Compensation Division Administrator Appointed Wisconsin Department of Workforce Development (DWD) Secretary Reggie Newson has appointed Delora Newton as the next Worker’s Compensation Division Administrator. Newton succeeds John Metcalf who retired from state government in June.

Newton first joined DWD in July 2014 performing several roles and most recently as Director of the DWD Secretary’s Office of Program Integrity and Accountability (SOPIA). Prior to joining DWD, Newton served as Vice President from 2006 to 2014 at the WISCONSIN INDEPENDENT AGENT

Greater Madison Chamber of Commerce.

She also worked directly for former Governor Tommy Thompson as well as for a Lieutenant Governor, senator and representatives.

Governor Walker Announces Staff Changes

Newton will oversee the WC Division that administers programs designed to ensure that injured workers receive required benefits from insurers or self-insured employers; encourage

JAY RISCH – Deputy Secretary, Department of Financial Institutions (DFI). Risch most recently served as Deputy Secretary of the Department of Safety and Professional Services (DSPS).

The Walker administration recently announce the following staff changes:

JONATHAN BARRY – Deputy Secretary, Department of Safety and Professional Services (DSPS). Barry previously served as Deputy Secretary of the Department of Workforce Development (DWD).

GEORGIA MAXWELL – Deputy Secretary, Department of Workforce Development (DWD). Maxwell previously served as Assistant Deputy Secretary of the Department of Financial Institutions (DFI) and also served as Assistant Deputy Secretary for the Department of Workforce Development (DWD).

rehabilitation and re-employment for injured workers; and promote the reduction of workrelated injuries, illnesses, and deaths. Newton will also take over responsibilities related to the Worker’s Compensation Advisory Council (WCAC) that advises the DWD and Legislature on policy matters concerning the development and administration of the Worker’s Compensation law.

Insurance Department Announces New Chief Legal Counsel OCI has announced the appointment of James C. Boll to the agency’s senior management team as Chief Legal Counsel. Boll replaces Mollie Zito who left the department earlier this year for a position with Illinois Governor Bruce Rauner. Richard Wicka will continue to serve as Assistant Chief Legal Counsel.

Boll graduated from Marquette University Law School and most recently worked at Madison Gas & Electric as Senior Corporate Counsel.

Boll also was a Claims attorney at American Family Insurance, as well as an attorney with the Peterson, Johnson & Murray law firm.

ALEX IGNATOWSKI – Assistant Deputy Secretary, Department of Financial Institutions. Ignatowski was a Legislative Advisor for the Department of Health Services (DHS). He also previously served as Operations Director for Gov. Scott Walker.

Kapenga Wins Special Senate Election Republican State Representative Chris Kapenga (R-Waukesha) recently won a special senate election with 72 percent of the vote to become state senator of the 33rd Senate district in southeastern Wisconsin. In June, Kapenga easily won a three-way GOP primary special election with 52 percent of the vote.

Kapenga is a reliable supporter of the free market system and small business sector.

He replaces former Sen. Paul Farrow (R-Pewaukee) who resigned to fulfill his duties full-time as Waukesha County Executive.

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

SEPTEMBER 2015 | 13

ERRORS & OMISSIONS

UNDERSTAND YOUR AUTHORITY As an independent insurance agent, the specific authorities granted to your agency through your agency contract temper the relationships you develop with your carriers. These contracts often concretely define the authority you possess to bind and represent a carrier in your daily insurance related activities. Make sure you and your employees understand the limits of the agency’s authority.

Implement these best practices in your agency:

Review your contracts At its inception, and on a yearly basis thereafter, review the authority granted to your agency under the agency/carrier contract. If you discover that your authority has changed, communicate those changes to your staff through a written memorandum or in-person agency meeting. Staff turnover

GET IT IN WRITING It is in your agency’s best interest to document alterations to your authority with a carrier. The easiest way to do so is to clearly document any temporary and/or additional authority you are granted by sending a confirming letter or e-mail to the carrier. Keep a copy of the correspondence in your file so it will be available should the need arise.

14 | SEPTEMBER 2015

can be your greatest enemy when it comes to possible errors and omissions claims regarding an agency exceeding the authority a carrier granted it.

Maintain relationships with your carrier’s regional representatives Often times an agents only link to a carrier is its regional representative. The relationship you foster with your representative is an important tool in understanding your authority level with a carrier. A representative can answer your questions and provide you with direction on how to remain faithful to the authority that the carrier granted to you at the inception of your relationship. In addition, that representative also can serve as a liaison for your agency in requesting new authority with the carrier or clarification of existing authority.

Don’t rely on pattern and practice with the carrier At times, a carrier may make concessions to your written agency contract and orally provide you with increased and/ or alternative authority to bind it to risks.

These modifications of your written binding

authority are important to your everyday functioning as an independent agent and allow you to respond quickly and effectively to your client’s needs. With this authority, however, come certain risks.

Carriers are large entities, and often the left hand does not know what the right hand is doing. If confronted with a question of authority, a carrier will always turn to its written agreement with your agency to establish the extent of your authority.

Unfortunately, the burden of proof is often going to be on your agency to prove that the additional authority was granted either orally or through pattern and practice (see sidebar).

Following these simple best practices will allow your agency to confidently abide by your contractual authority with a carrier.

In addition, it will place your agency in a position to weather an E&O claim by providing concrete documentation of any significant changes to that authority and will allow you to build a strong communication line with your carrier. > Matt Rengel is senior counsel for YRC Worldwide, Inc. WISCONSIN INDEPENDENT AGENT

At Burns Wilcox, our expertise becomes your expertise.

Whether it is cyber liability or medical malpractice, EPLI or fiduciary liability, we will ensure your clients avoid any gaps in coverage. Raise the level of your professional liability expertise with Burns Wilcox.

Milwaukee, Wisconsin | 262.347.0266 toll free 800.544.5700 | fax 262.347.0440 milwaukee.burnsandwilcox.com Minneapolis, Minnesota | 612.564.1880 toll free 800.328.1693 | fax 612.564.1881 minneapolis.burnsandwilcox.com WISCONSIN INDEPENDENT AGENT

Commercial | Professional | Personal | Brokerage | Binding | SEPTEMBER Risk Management 2015 |Services 15

MARKETING

EVOLVING THE MOBILE CONVERSATION:

HOW TO TEXT YOUR CLIENTS

Is texting the new email? Remember a few years back when this was a hot button issue?

Email providers scrambled to acknowledge the adoption of mobile and refine their mobile platforms. They wanted to answer the above question with a loud “No!” But underneath the texting vs. email debate lies another issue: the evolution of mobile communication. As more people see their phone as a primary source of communication, the business world will need to find ways to adapt and cater to their clientele.

I text and call my friends and family. I check my email. I connect on Facebook, Twitter, Instagram, Snapchat and LinkedIn. I read the news. I browse the web. I shop. I look up directions. I search for restaurants and coffee shops. I listen to music. I update my calendar. I save pictures and videos. I transfer money to my friends.

device running the Windows Mobile 6.5 operating system or later.

Of course – many clients may not have a Windows Mobile 6.5 operating system (because they too have been sucked into the ‘Apple Cult’ like myself). So, there is another option, but the catch is cost.

You can also send or forward messages through a third-party SMS text messaging service, which links to the program to send and receive text messages on your behalf. TxtImpact (txtimpact.com) is one example of this third-party text messaging service.

The final option to send a text from any email provider (Outlook, Gmail, etc.) is by substituting a 10-digit cell number into the email addresses below:

I do all of these things and more on my iPhone.

AT&T: number@txt.att.net

In response, businesses have started making their websites mobileresponsive, building mobile apps, and finding other ways to acclimate to the mobile world. The interesting part of this evolution is how it has started desensitizing the privacy of direct mobile communication.

T-Mobile: number@tmomail.net Verizon: number@vtext.com Sprint: number@messaging.sprintpcs.com or number@pm.sprint.com

By direct mobile communication, I mean communication that is sent to a phone, like texts or push notifications. This is different from indirect mobile communication like email or social media that isn’t sent to a phone, but can be accessed with a phone.

If I had received a text message from a business a few years ago, I probably would have turned to whoever was in the room and started venting about how businesses don’t know how to respect personal boundaries.

Virgin Mobile: number@vmobl.com Tracfone: number@mmst5.tracfone.com Metro PCS: number@mymetropcs.com Boost Mobile: number@myboostmobile.com Cricket: number@sms.mycricket.com

Now I sign up for and welcome texts from businesses regarding sales, coupons or updates.

Nextel: number@messaging.nextel.com

Obviously, I’m careful to give out my number to businesses that I frequent (I don’t want every clothing store harassing me). But I’ve noticed that receiving a well-timed, relevant text from a business I like often results in some positive interaction – from browsing their site or store to making a purchase.

Alltel: number@message.alltel.com

The moral of the story: agencies should explore integrating direct mobile communication into their practices.

Qwest: number@qwestmp.com

Ptel: number@ptel.com Suncom: number@tms.suncom.com

U.S. Cellular: number@email.uscc.net

Texting Microsoft Outlook includes an SMS message feature that allows you to send text messages in the same way you would normally send or forward an email or calendar appointment to groups or individuals. To use the standard, free Outlook SMS feature your business must have a Microsoft Exchange Server 2010 account and a smartphone or wireless

16 | SEPTEMBER 2015

To take this to the next level from a productivity standpoint, I’d recommend creating ‘contacts’ within your email account so that you aren’t constantly looking up all of those cell numbers that you don’t have memorized each time you send an email.

WISCONSIN INDEPENDENT AGENT

MARKETING Push Notifications If texting feels too personal for your clientele, you might look into push notifications.

These are messages sent directly to a person’s phone through an app even when that person isn’t using the app.

Because the user can choose to turn the notifications on or off, it gives them control and the option for more or less privacy.

News outlets typically use these for breaking news. My CNN app sends them to me, for example. Insurance App companies, like Insurance Agent Mobile App and RedHead Mobile App, also have this capability.

Here is an example of a push notification from Redhead Mobile App:

Also, check out push notifications on goinsuranceagent.com.

Every agency is different. Every client base is different. Explore how you can use different channels of communication, like texting and push notifications, to help service your clients and keep your agency on the tip of their tongue.

A few years ago, I probably would have… started venting about how businesses don’t know how to respect personal boundaries. Now I sign up for and welcome texts from businesses regarding sales, coupons or updates.

WISCONSIN INDEPENDENT AGENT

> Sydney Roe is the State Relations Coordinator at Trusted Choice and Digital Marketing Analyst at TrustedChoice.com.

SEPTEMBER 2015 | 17

TECHNOLOGY

E&O IMPLICATIONS: DON’T STORE CLIENT PAYMENT INFORMATION One of my more popular workshops is “Managing Errors and Omissions in a 24-7 World.” In this program, I highlight emerging technology solutions and the advantages and benefits, as well as the pitfalls, these solutions bring to managing errors and omissions within your agency organization.

One item I talk about is agency staff storing customer electronic payment information within the agency management system. This information could include credit and/or debit card numbers, card expiration date, and the CVC code (the 3 or 4 digit number on the back of the card). It also includes bank routing numbers and bank account numbers used to process ACH transactions.

Before you think “we do not do that”, please don’t assume that your staff does not capture this information. Very often, agency owners have no idea what happens at the desktop.

I have been in multiple agencies over the last six months where I observed staff on the phone with clients making electronic payments on their behalf on the insurance company website.

In many cases, they were writing down the credit card information on a yellow pad and then entering it into the insurance company payment processing page.

Some CSRs have told me that they capture this information as part of the client notes so they do not have to keep asking for the payment information.

Your agency should not capture any client electronic payment information within your systems. Period.

While many agencies understand that they should not be capturing credit card information, it is a more common practice to scan and store checks received in payment for insurance premiums as part of the client file. These scanned checks are then attached to an activity note to verify the payment was received.

Your agency should not capture any client electronic payment information within your systems. Period.

Forty-seven states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands have

18 | SEPTEMBER 2015

all enacted legislation that requires private entities to notify individuals of security breaches of information involving personally identifiable information (PII).

While there are slight variations within each state, most statutes identify personal information that requires notification if breached as: “An individual’s first name or first initial and last name in conjunction with any one or more of the following data elements, 1) Social Security number; 2) driver’s license number; 3) or account number, credit or debit card number, in combination with any required security code, access code, or password that would permit access to an individual’s financial account.”

Electronic payment information falls under this definition regardless of whether it’s credit/debit card information or bank account information.

The bank routing number and bank account number contained on a check will be considered as part of the definition of “personal information” and be subject to the state data breach notification requirement.

The liability your agency is incurring as a result of this practice is substantial.

But Isn’t It Required?

A common reason the agency is storing this payment information is that the “carriers require us to keep that information.”

Another common reason I’ve heard to keep copies of client checks is for EFT payment setups on carrier websites. The carriers say they don’t want customer banking information

sent to them, so agencies are keeping a copy of the check in an activity note in case there are questions down the road or the EFT doesn’t get set up properly by the carrier.

If this is your procedure, you are putting your agency at risk. Here are my recommendations: DMake sure your staff understands that they should not be capturing in any form — in the management system or written down on yellow pads — any type of electronic payment information.

DDo not scan checks and attach them to the client file. There is no need for any agency to keep this payment information.

DVerify with every insurance company their actual requirements regarding retention of electronic payment information (including checks). Make sure to ask for this verification in writing from an officer of the insurance company.

DPush back hard against any insurance company that says you are required to keep electronic payment information.

DStoring client electronic information is simply bad business practice. Your organization cannot and should not take on the additional liability exposure if this personal information is breached.

> 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

Our Role in Your Office We’re specialists. !

! !

Targeting “Main Street” commercial accounts and more Workers’ Compensation “lead line” Complementary coverages in select states

We’re secure. ! !

Part of the Berkshire Hathaway group A+ (”Superior”) A.M. Best Company rating

We’re growing. ! ! !

Direct written premium of over $600 million Doubled in size in recent years Active in 46 states (many with our BizGUARD Plus Businessowner’s Policy product)

Berkshire Hathaway GUARD Insurance Companies can be a key carrier resource in your office. We have a well-defined focus that has enhanced the income stream of countless agencies across the

We’re competitive. ! ! !

Accurate pricing (that can be sold!)

Tiered Workers’ Comp rate structure Other standard and unique special discounts

country. Plus . . . our longer-range vision is to bring one-stop insurance shopping to business owners nationwide.

We’re growing and hope you are interested in joining us! We currently have agency appointments available.

To learn more, visit: We’re fast and easy. !

! !

Same day (often samehour) turnaround on Workers’ Comp quotes On-line rating application Extensive Service Centers

Remember: We’re the quote you could come up against . . . so why not join us?

www.guard.com/apply

Berkshire Hathaway

GUARD

Insurance Companies

GOLFING FOR A GREAT CAUSE

The Independent Insurance Agents of Wisconsin was proud to sponsor a hole at the 16th annual golf outing to support the Bryon Riesch Paralysis Foundation. The group’s goal is to find a cure for paralysis through funding the latest in medical research and to provide assistance to those that suffer from neurological disorders. This research not only benefits spinal cord injuries but also stroke victims, people diagnosed with ALS, Alzheimer’s, Parkinson’s and

other neurological disorders. Over the past 16 years, the event has raised more than $3 million. Taking part in this great event at Silver Springs Country Club in Menomonee Falls: Misha Lee, IIAW Lobbyist and principal at Lee Government Relations; Steve Cooper, United Heartland CEO ; Jeff Thiel, Account Executive at R&R Insurance; and Matt Banaszynski, IIAW Executive VP.

ARE YOU totally

WORRY FREE? Coverage for your auto, home, business and more! ®

®

WWW.IMTINS.COM

WEST DES MOINES, IOWA • 800.274.3531 • WWW.IMTINS.COM

20 | SEPTEMBER 2015

WISCONSIN INDEPENDENT AGENT

VIRTUAL UNIVERSITY

DOES THE ISO PERSONAL AUTO POLICY

COVER PIZZA DELIVERY?

After years of instructing personal auto seminars, probably the question that comes up most often (except, perhaps, for rental car issues) is whether or not the ISO PAP covers claims that arise out of the use of a personal auto for pizza delivery. Here’s my opinion (along with that of several courts).

According to the 2005 ISO Personal Auto Policy, there is no coverage for an insured’s ownership or operation of a vehicle while it is being used as a public or livery conveyance, except that the exclusion does not apply to a share-the-expense car pool. The expressed intent of the policy drafters (via 1989 ISO filing memorandum) is that this exclusion is designed to preclude coverage for vehicles available for hire to the general public for the transportation of people or cargo (e.g., taxis, sight-seeing vans, package delivery services, etc.).

The wording of this exclusion in the 1986 ISO Personal Auto Policy made it applicable to the transportation of “persons or property for a fee,” but it was determined that the wording in that policy edition was being more restrictively applied than intended by the policy drafters. Therefore, in the 1989 ISO Personal Auto Policy, ISO reverted to the “public or livery conveyance” language of prior forms (e.g., the non-simplified Family Auto Policy) which had been extensively adjudicated to mean “a vehicle held indiscriminately for hire to the general public.”

This exclusion presents “gray” areas as to coverage for certain activities such as newspaper deliveries, rural mail carriers (for subrogation claims under the Federal Tort Claims Act), home products sales reps (e.g., Avon, Amway, etc.), and so forth. For example, a continuing controversy is whether or not the exclusion applies to “pizza delivery.” One court, in interpreting the more restrictive “transporting persons or property for

One Pennsylvania court found that the “carrying persons or property for a fee” exclusion DID bar recovery, though the dissenting opinion makes a compelling argument that the court was mistaken, given the body of case law on this exclusion around the country.

In recognition of the likelihood that the unendorsed policy covers such use, at least one company has addressed this issue by introducing a mandatory “Food Delivery Exclusion” endorsement that can be removed, on a case-by-case basis, for a premium surcharge. When in doubt, clarify the company’s claims position in advance.

When in doubt, clarify the company’s claims position in advance. a fee” exclusion, ruled that the exclusion did not apply to an employee using his own auto in the course of employment, largely because the delivery charge did not directly benefit the insured (United Services Automobile Association v. Couch, Tennessee Court of Appeals, 1982).

At least two other state courts (and Supreme Courts at that) have also found coverage under the PAP for pizza delivery: (1) USF&G v. Lightning Rod Mutual Ins. Co., Ohio Supreme Court, 1997, and (2) RPM Pizza, Inc. v. Automotive Cas. Ins., Louisiana Supreme Court, 1992. In addition, other courts holding the exclusion to be ambiguous include Progressive Cas. Ins. Co. v. Metcalf, 501 N.W.2d 690 (Minn. Ct. App. 1993), Pizza Hut of Am., Inc. v. W. Gen. Ins. Co., 36 Ark. App. 16, 816 S.W.2d 638 (Ark. Ct. App. 1991), and Cincinnati Ins. Co. v. W. Am. Ins. Co., 112 F. Supp.

2d 718 (D. Ill. 2000). The first two of these three cases involved pizza delivery and the last mail delivery.

In addition, comparison of this exclusion with the Insuring Agreement seems to indicate that the exclusion may not be as broad as usually interpreted. The insuring agreement covers the “ownership, maintenance or use” of any auto by “you” or “family members” and the “use” of “your covered auto” by other persons. This exclusion, however, applies only to “ownership or operation...while” the vehicle is being used as a public or livery conveyance. Therefore, the exclusion does not apply while the vehicle is not being used as a public or livery conveyance.

And, even while being used as such, “you” > Bill Wilson is director of the IIABA and “family members” would be covered for Virtual University. maintenance of the vehicle, plus any “use” not Contact him at bill. involving “operation” of the auto. wilson@iiaba.net.

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.

WISCONSIN INDEPENDENT AGENT

SEPTEMBER 2015 | 21

DATA BREACH

HOW DO YOU PROTECT YOUR AGENCY’S DATA? You’ve purchased data breach insurance for your agency, but constant, high-profile breaches against big corporations and government systems with the best security leave you feeling like a sitting duck. It can be overwhelming to think about data breach prevention.

Give yourself some peace of mind and make sure you have a data breach policy in place. The Independent Insurance Agents of Wisconsin has an exclusive program for agents that can’t be beat.

Go to the IIAW’s homepage (IIAW.com), select Insurance Services and click Cyber Liability to

learn more about our cyber liability program.

You can also contact me directly.

The Ponemon Institute and Symantec have developed a data breach cost calculator - databreachcalculator.com - to help you determine adequate limits for your agency.

This useful tool estimates your risk exposure.

It can be used as a guide to determine your readiness if you experience a data breach.

A recent Ponemon Institute study found the average cost of a data breach to be $5.5 million with average cost per compromised record more than $194. Don’t become a statistic!

The IIABA’s Agents Council for Technology (ACT) has collected the resources you need to help you protect your agency from cyber threats and prepare your agency to recover should disaster strike. Visit independentagent. com/ACTSecure to find helpful resources in 12 areas that you need > Meggen Gagas is to address now to the IIAW’s Director of Agency Services. protect your agency Contact her at against the threats of 608.210.2975 or tomorrow. meggen@iiaw.com.

S T E P S TO P R OT E C T YO U R A G E N C Y AND PREVENT CYBER ATTACKS 1

2

PREVENTION

KNOWLEDGE

MITIGATE CYBER RISK

STAY ON THE RIGHT SIDE OF THE LAW

With proper planning, you can protect your agency from significant risks, including data breach and cyberattack.

Understand the data breach laws and prevention requirements for WI.

What you will find: disaster planning and recovery resources

What you will find: resources for navigating PCI, the FTC, Omnibus Rule and more

PROTECT PASSWORDS

MOBILE DEVICES

A Post-It note on a computer monitor doesn’t count. Discover the best way to manage passwords.

What you will find: resources to help you manage passwords and implement a strategy

MONITOR EQUIPMENT IN REAL-TIME Understand and monitor the contents of data flowing in and out of your network.

What you will find: Data Loss Prevention (DLP) solutions

USE ASP SYSTEMS FOR SECURITY ASP systems keep agency management and other system data accessible, backed-up and automatically updated.

What you will find: ASP comparisons, price points, keep antivirus in mind

22 | SEPTEMBER 2015

While mobile is becoming essential, using mobile devices to conduct business exposes your agency to additional security threats.

What you will find: Information on encryption, “BOYD,” secure wireless connections, other device security

EDUCATE AND TRAIN Make sure everyone knows their roles and responsibilities in safeguarding company assets and client information.

What you will find: HIPAA security awareness resources, agency security guidelines

ELECTRONIC COMMUNICATION Know the laws and master the best practices regarding electronic communications.

What you will find: Resources on e-signature, the Uniform Electronic Transaction Act and ACORD standards WISCONSIN INDEPENDENT AGENT

3

DATA BREACH

4

DOCUMENT RETENTION

SECURITY

SHOULD DOCUMENTS STAY OR GO?

ENCRYPT YOUR DATABASES

Your agency needs a compliant document retention strategy to help prevent information from getting in the wrong hands.

Err on the side of caution when it comes to encrypting data. We’ve got the best practices for compliant data encryption, and a primer on state regulations.

What you will find: federal legislation, state laws and best practices on document retention and destruction

GO PAPERLESS

What you will find: State privacy and PII regulations

Before taking the leap, it’s critical to make a plan for a successful paperless transition.

SECURE YOUR VOIP

What you will find: Data hosting, information on security vulnerabilities and precautions

PROTECT CONFIDENTIAL INFORMATION Know state and federal laws, conduct risk analysis and compliance gapping, then create PHI and PPI compliant policies.

What you will find: rules & tools for HIPPA, FTC, HITECH, and PCI

DOCUMENT DESTRUCTION Develop and follow a process for destruction of paper and electronic files located on LANs, cloud drives, local and mobile devices, and USB or external drives.

What you will find: FTC disposal of consumer information, and shredding resources

Be aware of the overall security level of your data infrastructure, including your IP phone system.

What you will find: resources to protect your VoIP traffic from packet analyzers

REMOTELY ACCESS AGENCY SYSTEMS Remote access requires awareness, authentication, intrusion detection/prevention systems and a secure VPN to lessen risks.

What you will find: Remote Access software rankings, VPN and server specifications

KNOWLEDGE COMES FROM EXPERIENCE “I have a passion and love for working with agents and writing transportation business. My 34 years of experience in underwriting and working with our markets helps me to be a valuable resource for our customers and the relationships we’ve built together are priceless.”

Sandi Fritz, CIC, TRS Vice President, Director of Transportation Underwriting

Managing General Agency Since 1920

800.666.5692

jmwilson.com

Brokerage/Professional Liability • Property & Casualty • Personal Lines • Surety • Commercial Transportation • Premium Finance WISCONSIN INDEPENDENT AGENT

SEPTEMBER 2015 | 23

INTRODUCING STEVE LEITCH, IIAW PRESIDENT

Steve Leitch (center) is the owner of Leitch Insurance Agency in River Falls and the 2015-16 IIAW President. His sons, Brandon (left) and Ryan, represent the 4th generation to work in the family business.

Steve’s grandparents started an agency in Mercer, Wisconsin in 1952.

Steve Leitch, the 2015-16 IIAW President, is a rarity in the insurance business.

While many of his peers came to the industry while making other plans, Steve planned on making insurance his career.

In 1983, while enrolled at UW-Madison, his Dad, Paul Leitch, established an agency in River Falls. With his eye on joining the family business, Steve graduated with degrees in Risk Management & Insurance, and Human Resources Management.

“It became apparent that the timing was right for me to join the agency when I graduated,” said Steve. “That decision has worked out pretty well.”

In 1987, right out of college, Steve joined his Dad and worked with him until he retired in 2002.

“I had a lot to learn after graduating so I’m incredibly lucky to have worked with him for 15 years before he retired,” said Steve, who bought the agency in 2002. “I learned lessons in integrity, customer service and the industry in general. He was a great mentor and helped point me in the right direction. There’s no substitute for this type of experience but my formal education provided a foundation from both an operations standpoint and my ability to be a resource for clients. I think we’re seeing a nice transition with more young people choosing insurance as a vocation. We need more, obviously, but it’s a start. I’m also very

24 | SEPTEMBER 2015

encouraged to see more universities, like UWOshkosh, offering an insurance curriculum.”

The agency’s family connection actually goes back another generation to Steve’s grandparents.

In 1952, while shopping in the produce section at the local grocery store in Mercer, Mrs. Thompson asked Steve’s grandmother, Margaret, if Paul, her husband and Steve’s grandpa, were interested in buying a small agency. They were

handles personal lines in the Prescott office.

Ryan, after graduating from UW-Madison and spending a few years as a commercial underwriter for Auto-Owners Insurance, came aboard in 2013. He splits his time between the River Falls and Prescott offices.

“As much as I enjoyed working with my Dad, it’s been great working with my sons,” said Steve.

“I get a huge kick overhearing them discuss insurance coverages with clients.”

and they did.

“My grandmother loved to tell this story,” said Steve. His grandparents operated the agency until the late 60s when his father took it over.

He operated the Mercer agency until the late 70s.

In the near future, Steve could be eavesdropping on another son with insurance in his blood.

Evan is a freshman at UW-Madison and his goal is to attain a degree in Risk Management & Insurance.

Steve said there isn’t a direct connection between the Mercer agency and their present location, but his Dad did use the Mercer office to broker business as he built the River Falls business.

“There is one black sheep in the family who avoided the call of the insurance industry,” said Steve. Michael, Brandon’s twin, lives in Madison and is a chemist at Pharmaceutical Product Development (PPD) in Middleton.

In the last few years, the agency and family link have grown.

In case you were wondering, Steve did not raise these boys alone. Lori, his wife, has been there for the entire 28-year journey. He met her while attending college in Madison.

Steve recently acquired the Croix Insurance Agency in Prescott and the Leitch-McSorley Insurance Agency in Hudson.

Two of Steve’s sons have already joined the fold.

Brandon started in 2011 and now primarily

“None of this would have been possible without Lori,” said Steve. “After graduating, we got married, headed north and have been happy to call River Falls our home ever since.”

WISCONSIN INDEPENDENT AGENT

ASSOCIATION LEADERSHIP Steve progressed through the Executive Committee to become IIAW President on September 1, but his Association involvement began more than a decade ago.

He served on the board of directors from 2002 to 2008, and then returned in 2013 to act as SecretaryTreasurer. He’s also worked on the Young Agents (now Emerging Leaders), Technical, and Smaller Agents committees.

involvement – if you give a little, you get a lot back.

Committee service is not only a great way to stay current of what’s happening in the industry, it’s truly an opportunity to help shape what is going on.”

Fall Planning is the place where Association business is front and center. It’s a unique occasion where the board of directors and all IIAW committees meet to form the agenda for the upcoming year. This year, Fall

“Leading into the 2015 convention, we tried to emphasize that involved members are truly VIPs, and that message continues. The success of our organization depends on member involvement, and those that are at Fall Planning are leading the way. I’m really excited to work with our members to keep moving the Association forward.”

Relationship building is a big part of Association work and it’s one facet of being an independent agent that Steve values.

Committee service is not only a great way to stay current of what’s happening in the industry, it’s truly an opportunity to help shape what is going on.

“It was big step for us when the Young Agents Conference transformed into the Sales & Leadership Conference,” said Steve. “It has evolved into a more forward-thinking and focused event with more constructive continuing education and increased networking opportunities.

It’s still a family-friendly event, too. Members that get involved with the Emerging Leaders Committee get so much value. I think this is true of any committee

Steve hopes to build on last year’s success during his tenure as president.

Planning is at Milford Hills Hunt Club in Johnson Creek on September 16.

“Fall Planning is really the kick off to our year and sets the tone for all the committees,” said Steve. “It’s a great time for everyone to revisit what’s been accomplished, recognize areas that can be improved, and discuss new plans for the future.”

“When I started down the insurance path in college, I loved the numbers side of it. I liked the concept of the right price for every exposure. However, as I became more involved in the business, I grew to appreciate the personal side of it – the relationships with clients and companies.

It’s those relationships > Eric Schwartz is the that make it enjoyable IIAW Communications on a daily basis.”

Supervisor.

THINKING FOR TOMORROW TO HELP YOU AND YOUR POLICYHOLDERS TODAY

We are dedicated to becoming the easiest company for you and your policyholders to do business with!

That’s why we have taken advantage of technology to serve you both better!

MOBILE APP

Take the wait out of filing a claim, viewing your current claim status, obtaining your personal policy information, and so much more!

Download the mobile app by searching Pekin Insurance in the App Store or Google Play.

SOCIAL MEDIA

Stay connected with us via our social media outlets, Facebook and YouTube. Weekly posts on our Facebook page provide both fun and useful information while videos on our YouTube channel provide new information regarding products and endorsements for you to share with your policyholders.

FROM THE COMFORT OF HOME

With My PI, policyholders have secure online access to policy information, policy documents, billing information, auto ID cards, and claim information right from their smartphone, tablet, or computer!

WWW.PEKININSURANCE.COM WISCONSIN INDEPENDENT AGENT

SEPTEMBER 2015 | 25

WS E N E H T N I S R E B MEM Hausmann-Johnson Named a Best Place to Work in Insurance Forbes released its list of the best places to work in insurance and Madison-based Hausmann-Johnson Insurance came in at #10.

This firm of 68 employees runs the company “like a family” with bi-weekly meetings, group meals and one-on-one lunches with executives. Employees receive 50 hours of training per year and offers flexible scheduling and remote work opportunities.

To learn more about Hausmann-Johnson, please visit hausmann-johnson. com.

Forbes: EMC Insurance Group Named to 50 Most Trustworthy Financial Companies List EMC Insurance Group Inc. is listed on the 2015 50 Most Trustworthy Financial Companies list, announced by Forbes. EMC achieved a top accounting and governance risk (AGR) score in the small cap category.

Forbes asked MSCI ESG Research to compile a list separate from the Forbes 100 Most Trustworthy Companies list. To create the trustworthy financial companies list, MSCI ESG Research examined more than 700 publicly traded North American companies with market caps of $250 million or greater for the year ending March 2015. MSCI ESG Research considers accounting and governance behaviors, including high risk events, revenue and expense recognition methods, SEC actions and bankruptcy risk in scoring a company’s credibility. An AGR number is then given to each company and is the final composite by which organizations are scored.

Travel Insurance Division. Hitt also held executive positions at Zurich North America.

As President and CEO Sy Foguel explains, “Within about two years, our BizGUARD Plus product will, like our workers’ compensation policies, be available in all states. Our longterm goal is to be a One-Stop Insurance Shop for commercial accounts; Lyle Hitt’s leadership and years of experience building and managing business units will help us achieve our objectives.”

Hitt notes that he is joining the organization at an exciting time.

“The chance to help a company evolve into a national, multiline player is a special one that does not come your way every day, and becoming part of the Berkshire Hathaway family is a bonus.”

In 2013, GUARD unveiled a new identity as Berkshire Hathaway GUARD Insurance Companies. Each of the organization’s carriers (AmGUARD, EastGUARD, NorGUARD, and WestGUARD) are rated A+ (“Superior”) by A.M. Best.

To learn more about GUARD, please visit guard.com/apply.

J.M Wilson Hires Yingling and Schell as New Underwriters J.M. Wilson announced the addition of Lori Yingling to their Portage, MI office as Personal Lines Underwriter. Lori is responsible for quoting new and renewal personal lines risks, and serving independent insurance agents in the 31 states that J.M. Wilson writes in, including Wisconsin.

“The companies that make the cut are ones where there’s a very high level of integrity in the financial reporting, whether the results are good or bad,” says Ric Marshall, executive director of MSCI ESG Research. “These companies pass a very rigorous test.”

To learn more about EMC, please visit emcins.com.

Berkshire Hathaway GUARD Names Hitt Executive VP of P&C Liability Insurance Berkshire Hathaway GUARD recently named Lyle Hitt Executive Vice President of Property and Liability Insurance. In his new role, Hitt will oversee activities related to lines of coverage used to complement the company’s traditional workers’ compensation specialty. Specifically, he will lead the expansion of the organization’s property and liability lines into new states; refine existing products to address the needs of an even wider audience of commercial accounts; and develop new products.

Lyle Hitt Hitt brings over a quarter century of experience in the insurance industry to his new role. As an executive at Arch Insurance Group, he most recently oversaw the insurer’s Professional Liability Division, Corporate Training, and

26 | SEPTEMBER 2015

Lori Yingling

Sarah Schell

Lori has 12 years of experience as a CSR and Personal Lines underwriter, as well as 16 years of experience as a CSR and Office Manager. She began working for her family’s insurance agency at the age of 15 and continued through college. Lori studied Computer Science and English Grammar at Western Michigan University, and she earned her CISR designation in 2009.

J.M. Wilson is also pleased to announce the addition of Sarah Schell to their Arlington Heights, Illinois office as Transportation Underwriter. Sarah is responsible for quoting new and renewal commercial transportation risks and serving independent insurance agents in the states of Illinois, Iowa, Nebraska, and Wisconsin.

Prior to joining J.M. Wilson, Sarah worked for an insurance company as a claims adjuster for eight years. She handled WISCONSIN INDEPENDENT AGENT

S W E N E H T N I S R E B MEM commercial general liability, inland marine, commercial transportation, builders risk, watercraft and heavy equipment claims. Sarah earned a Master’s Degree from Aurora University and a Bachelor’s Degree from Northern Illinois University.

To learn more about J.M. Wilson, please visit jmwilson.com.

Company Named Best Place to Work in Insurance Forbes released its list of the best places to work in insurance and Sheboygan-based ACUITY Insurance topped the list at #1.

ACUITY offers unlimited tuition reimbursement, no cap on paid sick days for full-time employees and a 401K plan offering a match of 8% of pay every quarter. The company even built a 65-foot Ferris wheel at headquarters, and voluntary turnover is a miniscule 2%.

Company Named a Top Performer

by Ward Group ACUITY has been named to the 2015 Ward’s 50 list of top-performing companies based on the insurer’s overall performance, putting ACUITY in the top 2 percent of insurers nationwide. This is ACUITY’s 16th consecutive year on the Ward’s 50.

“Ward Group recognizes ACUITY for achieving outstanding financial results in the areas of safety, consistency, and performance,” said Jeffrey J. Rieder, Partner and Head of Ward Group. “From 2010 through 2014, ACUITY demonstrated its ability to consistently generate outstanding results.”

“It’s immensely gratifying to be recognized as one of the top performers, out of more than 3,000 insurers nationwide, for 16 straight years,” said Ben Salzmann, ACUITY President and CEO. “Being part of the Ward’s 50 is a remarkable testament to our operational consistency, stability, and efficiency. It is also an important measure of strength to our employees, our independent agents, and the individuals, families, and businesses who count on us to protect their financial well-being.”

To develop its annual list of the 50 top-performing insurance companies, Ward Group analyzes the financial performance of over 3,000 property-casualty insurance companies domiciled in the United States based on objective data and quality measures. Top performers have passed all safety and consistency tests and achieved superior performance over a five-year period.

Company Named to List of Super Regional P&C Insurers ACUITY announced that it is named to the 2015 list of Super Regional P&C Insurers, an annual ranking prepared by the Insurance Journal and research firm Demotech of the leading multi-state P&C carriers in the WISCONSIN INDEPENDENT AGENT

nation. Of the nearly 3,000 property and casualty carriers nationwide, ACUITY was ranked in the top 26. Only 1% of all companies obtain that status.

According to Demotech, “Super regional insurers are critically important to the insurance industry, and of particular importance to their agents, producers, and insureds. These companies are typically strong, stable markets that work hard for their agents, insureds, and their reinsurers.”

ACUITY’s strong growth propelled its inclusion on the list, and the company’s sustained growth has kept it ranked consistently as a super regional. In 2014, ACUITY reported an overall gain of nearly $120 million in total written premium, a 10.6 percent increase over the prior year. By the end of 2015, ACUITY will have added more than $500 million to its top-line revenue over 48 months.

Robust growth throughout all of ACUITY’s operating regions and lines of business has defined the insurer’s performance. In 2014, ACUITY wrote a record $220 million in new business, driven by increases in both personal and commercial lines. In personal lines, ACUITY marked an incredible 18th consecutive year of positive premium growth by writing $66 million in new business. In commercial lines, the company added $154 million in new business premium while achieving a quote success ratio of 41 percent, also an all-time record.

Company Earns Multiple Awards for Creative Excellence ACUITY announced that it has earned several creative excellence awards for its 2014 Annual Report. These include: D 2015 Best of Show award from the Insurance Marketing and Creative Association (ICMA).

D Gold Stevie Winner from American Business Awards.

D Gold Award from Hermes Creative Awards.

D Silver American Advertising Award from the Fox River Chapter of the American Advertising Federation (AAF).

“ACUITY is honored to be recognized for creativity and innovation in designing materials that communicate with all our stakeholders in engaging and effective ways,” said Ben Salzmann, ACUITY President and CEO. “Our annual report is not just a way to deliver our outstanding results.”

ACUITY’s 2014 Annual Report, “Taking Care of Business: Another Noteworthy Year,” was created in partnership with DuFour Advertising. Designed as a legal pad, the report features more than 50 pages of unique, hand-drawn illustrations. To learn more about ACUITY, please visit acuity.com.

MEMBERS IN THE NEWS CONTINUED ON PAGE 29

SEPTEMBER 2015 | 27

COMMENTARY FROM COUNSEL

THE VANISHING INDEPENDENT CONTRACTOR The distinction between “employee” and “independent contractor” has troubled employers for decades, including within the insurance industry. On the heels of a recent interpretation from the United States Department of Labor (DOL), the time is right for all employers who are classifying workers as independent contractors to review their current workforce to ensure correct classifications are in place.

Employers may be surprised to learn far fewer workers qualify as independent contractors than once thought.

2. Does the worker’s managerial skill affect his or her opportunity for Profit or Loss?

The “Economic Realities” Test

3. How Does the Worker’s Relative Investment Compare to the Employer’s Investment?

Traditionally, employers have applied the common-law “control” test to determine if workers were employees or independent contractors. Under this test, an employer based its classification decision on the control it exercised over its workers both as to the work performed and the manner and means by which it was performed. The more control an employer exercised over its workforce, the greater the likelihood its workers were employees.

Recently, however, the DOL issued an Administrative Interpretation stating that employers’ reliance on the common-law “control” test for making classification decisions is misplaced. Instead, the DOL emphasized that employers must look to the “economic realities” of the working relationship to determine if the worker is economically dependent upon the employer (and thus an employee) or truly in business for him or herself (and properly classified as an independent contractor). Applied in conjunction with the FLSA’s expansive definition of employment, the DOL anticipates far fewer workers will qualify as independent contractors than what would be captured by the common-law “control” test.

4. Does the Work Performed Required Special Skill and Initiative?

5. Is the Relationship Between the Worker and the Employer Permanent or Indefinite?

6. What is the Nature and Degree of the Employer’s Control?

While these factors are intended to guide an employer’s decisionmaking process, there is no mechanical formula to determine when a worker crosses the line from independent contractor to employee.

Nor should one factor, particularly the control factor, be considered outcome determinative or granted undue weight. Instead, each factor is analyzed in relation to the other, used as guides to answer the ultimate question of economic dependence.

What About Wisconsin?

To guide employers in their classification decisions, the DOL has established a factor-based “economic realities” test. Under the “economic realities” test, employers must ask the following questions: 1. Is the work an integral part of the employer’s business?

28 | SEPTEMBER 2015

To further muddy the issue, under Wisconsin law, different tests govern whether a worker is an independent contractor or an employee under different laws. The independent contractor test for unemployment insurance is different from the test for worker’s compensation. Similarly, the test under the Wisconsin Fair Employment Act is different than the test under Wisconsin’s fair wage and hour laws. In nearly all cases, however, “employee” WISCONSIN INDEPENDENT AGENT

COMMENTARY FROM COUNSEL is defined more expansively than it otherwise would be under the traditional common-law “control” test.

employment taxes and an additional $15 billion in unpaid payroll and unemployment taxes.

Moreover, the Wisconsin Department of Workforce Development (DWD) expressly incorporates interpretations of the United States Department of Labor in its wage and hour determinations. This includes the DOL’s most recent “economic realities” test. More information about these tests, and tools to help employers navigate their classification decision under the myriad of Wisconsin laws, can be found on the DWD website at dwd.wisconsin.gov/worker_ classification.

Facing increased pressure to balance budgets and reduce deficits, governments on both the state and federal level have aggressively increased their auditing and enforcement efforts to recover these lost revenues. For example, in 2014, the DOL awarded $10.2 million to 19 states, including Wisconsin, to implement or improve worker misclassification detection and enforcement initiatives. Other states have enacted legislation that creates a “presumptive employee status” for all workers, shifting the responsibility to the employer to prove their workers are independent contractors. Federal and state agencies (and employees themselves) are also seeing increased success in the courtroom, winning large awards for retroactive compensation, overtime pay, and other lost benefits. In several high profile cases, awards have reached into the millions of dollars.

Implications for Employers Workforce classification decisions are not merely an exercise in semantics. Recent studies estimate that nearly 3.4 million American employees are misclassified as independent contractors, costing the federal government nearly $54 billion in underpayment of

Conclusion

Recent studies estimate that nearly 3.4 million American employees are misclassified as independent contractors, costing the federal government nearly $54 billion in underpayment of employment taxes and an additional $15 billion in unpaid payroll and unemployment taxes.

A review of the classification status of independent contractors is prudent. The DOL’s “economic realities” test provides employers clear guidelines as to what test will apply to the DOL’s and the DWD’s misclassification decisions and what the focus will be when they audit employers’ classification of workers as independent contractors.

Used correctly, the “economic realities” test can help employers manage the risks associated with classification of workers as independent contractors and foster a > Josh Johanningmeier is the IIAW’s General strong working relationship with employees Counsel. Call the Legal or properly-identified contractors for Services Hotline at (877) continued business success.

236-1669.

MEMBERS IN THE NEWS CONTINUED FROM PAGE 27

State Auto Announces Leadership Changes State Auto Corp. today announced changes to the company’s leadership. The changes, made

by President and CEO Mike LaRocco, promote alignment and clear accountability.

Jessica Buss, senior vp, specialty lines, has added middle market and large commercial business to her responsibilities. Kim Garland has joined the company as senior vp, standard lines, and will be responsible for all personal lines business, including farm and ranch, and small commercial business. To lead IT and corporate strategy, Greg Tacchetti will join State Auto as senior vp and chief information/strategy officer.

Steve Hunckler will become senior vp and chief administration/services officer. Paul Stachura will join as senior vp and chief claims and loss control officer. To learn more about State Auto, please visit stateauto.com.

WISCONSIN INDEPENDENT AGENT

NEW LOGO

Same Commitment to the Independent Agent

badgermutual.com

800/837-7833 Milwaukee, WI

SEPTEMBER 2015 | 29

FOOD FOR THOUGHT Cash Cow

GREEN AND (24 KARAT) GOLD

Professional football is once again dominating American sports and the Green Bay Packers are flying high. According to team president Mark Murphy, the season ticket waiting list is 115,000 strong and the team set records in total revenue and local revenue last year; their local revenue was $149.3 million, up 9.4 percent. They have one of the biggest stadiums in the NFL but ticket prices are only 18th in the league. Green Bay is the smallest U.S. city to have a major sports franchise. Part of the reason: each NFL team earns more than $226 million from revenue sharing.

Source: ESPN

DON’T MAKE IT EASY FOR HACKERS

Nearly 75% of Americans have fallen victim to cyber crimes, including computer viruses, online credit card fraud and identity theft. One easy fix is to make your passwords slightly more complicated and don’t use the same password for all your accounts. It takes a hacker only 10 minutes to crack a lowercase password that is 6 characters long. Add two extra letters and a few uppercase letters and that number jumps to 3 years. Add just one more character and some numbers and symbols and it will take 44,530 years to crack.

Source: stopthehacker.com

Crash course in service excellence.

®

Help clients through the stress of an accident with AAA Accident Assist .

One call brings AAA roadside assistance to their crash site, sets the stage for hassle-free repairs, and reserves a rental car for their immediate use.

And you made it happen.

Contact Heidi Nienow today to learn more.

(608) 828-2614

hqnienow@AAAwisconsin.com

It’s just one of the powerful tools AAA Independent Insurance Agents enjoy.

IE-0011

30 | SEPTEMBER 2015

Insurance underwritten by Auto Club Insurance Association or Auto Club Group Insurance Company.

WISCONSIN INDEPENDENT AGENT

A NEW FILM BY ACUITY U

NOW PLAYING!

WWW.ACUITYU.COM

CE VIDEO

Trusted Choice

PRSRT STD US POSTAGE

®

Independent Insurance Agents of Wisconsin

PAID

MADISON WI PERMIT NO. 2506

725 JOHN NOLEN DRIVE MADISON, WI 53713

Expect big things in workers’ compensation. Expect to save a third of your clients 30% or more. Most classes approved, nationwide.

For information call (877) 234-4450 or visit auw.com/us.

©2015 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

Insurance plans protected U.S. Patent No. 7,908,157.