October 31, 2016 Insurance Advocate by C Acunto

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Serving New York, New Jersey, Connec cut, Eastern Pennsylvania and Washington, DC

Vol. 127 No. 17 | October 31, 2016

NYiDAY Lights Up Times Square HVRAP Recap page 10

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Contents

October 31, 2016 | Volume 127 Number 17

In the Associations: The Hill Names “Big I” Leaders Among Top D.C. Lobbyists WIFS Announces 2016 Award Winners PCI Elects New Ofﬁcers NYSIF Creates Producer Council

Looking Back: September, 1991

Courtside: Notice of Claim Not Required for Suit Against Sheriffs Lawrence Rogak

Classiﬁeds

[ A D F E ATUR E S ] NYiDAY LIGHTS UP TIMES SQUARE

[FEATURES]

LICONY: Life Insurance: New York’s Economic Driver

Insurance Industry Charitable Foundation: 10th Anniversary Beneﬁt Dinner

Foreword: Where the Vitality Is Steve Acunto, Publisher

On the Level: Industry and Family Pride N. Stephen Ruchman, CPIA

102nd Annual Award Luncheon

In Focus: It’s What We Do Consistently That Counts Kelly Donahue-Piro

11:30 A.M. RECEPTION 12:30 P.M. LUNCHEON

Wednesday, Nov. 30, 2016

*NEW LOCATION* UNION LEAGUE CLUB | 38 EAST 37TH STREET | NYC

In the Associations: HVRAP Emphasizes Action and Presence In the Associations: PIA Expands to Include Vermont Association

The Free Enterprise Award

Public Service Award

STEVEN A. KANDARIAN

DANIEL A. NIGRO

Chairman & CEO MetLife

Fire Commissioner New York City

Guest Speaker

MARIA T. VULLO

On My Radar: Georgia Refuses to Adopt Continuous Trigger Barry Zalma

Superintendent, NYDFS

GO TO WWW. IFNY.ORG TO REGISTER 914.966.3180, x113 INSURANCE ADVOCATE / October 31, 2016 3

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[ FOREWORD ]

STEVE ACUNTO

Where the Vitality Is

VOLUME 127, NUMBER 17 OCTOBER 31, 2016

uScience and business really do work together when leadership listens and follows the trails set by innovators. GWG Holdings, Inc. (Nasdaq:GWGH), a financial services company engaged in the life insurance secondary market, has secured the exclusive license for the “DNA Methylation-Based Predictor of Mortality” technology from the University of California, Los Angeles (UCLA). The technology was discovered by Dr. Steve Horvath and is featured in the September 2016 edition of “Aging.” In 2013, Dr. Horvath reported that human cells have a mechanism that records biological aging progression based on DNA methylation that is independent from chronological aging progression. In 2016, Dr. Horvath discovered a specific set of DNA methylation-based bio-markers that are highly predictive of all-cause mortality. The discovery was made through a statistical analysis of bio-markers found in DNA samples from over 13,000 individuals whose health was studied for decades. The implications of Dr. Horvath’s discovery are simple and profound: Individual lifespans can now be estimated with significantly greater precision across large groups of individuals. The leadership part of the equation is Jon Sabes and the bright team he quarterbacks: “We believe Dr. Horvath’s technology will revolutionize the prediction of human longevity,” commented Jon Sabes, Chief Executive Officer. “We expect to immediately implement this technology into our current business to enhance our actuarial underwriting precision. In addition, we intend to explore a more comprehensive application of this technology to the life insurance business. While we have some work to complete to firm up our expectations, we believe we may hold some of the most innovative financial technology the life insurance industry has seen in over a century.” More information regarding the DNA Methylation-Based Predictor of Mortality technology and a discussion on the implications for GWG’s current business, as well as its potential application to the wider insurance industry, can be found on the website at www.gwgh.com. ... 4 October 31, 2016 / INSURANCE ADVOCATE

Speaking of vitality…John Hancock has announced that its Vitality program, an approach to life insurance that rewards people for healthy living, is now available on a number of its life insurance products in New York state, including universal life, indexed universal life, and variable life. New York policyholders have the potential to save thousands of dollars a year through the John Hancock Vitality program, simply through the everyday things they do to stay active and live healthier lives. They can save up to 15 percent on their life insurance premiums as well as earn valuable rewards and discounts, such as $600 per year in savings on healthy food purchases at participating grocery stores, and gift certificates for retailers such as Under Armor, Adidas, Goplay Golf and Spa Week. The program also offers policyholders personalized health goals, expert nutritional information, wellness tips and additional resources for healthy living, including a free Fitbit® device. “We are very excited to be able to offer our John Hancock Vitality life insurance solutions to customers in New York, whether they want insurance to protect their families, to save money to help with retirement or college, or for estate planning,” said Michael Doughty, president, John Hancock Insurance. “With the Vitality program, we’ve reimagined life insurance so it’s relevant, rewarding and engaging for our policyholders as we support their pursuit of a longer, healthier life. We also appreciate all the efforts by the New York Department of Financial Services in making this offering a reality.” When they purchase a John Hancock Vitality life insurance policy, policyholders immediately begin accumulating “Vitality Points” through their everyday healthy activities, such as walking or exercising, buying healthy food and getting regular check-ups. The number of Vitality Points policyholders earn over the course of a year determines their program status level. The healthier their lifestyle, the more points they can accumulate and the more significant the savings will be on their premiums, and the greater the rewards[IA].

EDITOR & PUBLISHER Steve Acunto 914-966-3180, x110 sa@cinn.com CONTRIBUTORS Peter H. Bickford Jamie Deapo Kelly Donahue-Piro Michael Loguercio Christopher Paradiso Lawrence N. Rogak N. Stephen Ruchman Jerome Trupin, CPCU Barry Zalma PRODUCTION & DESIGN ADVERTISING COORDINATOR Director of Operations and Creative Services Gina Marie Balog 914-966-3180, x113 g@cinn.com EDITORIAL ASSISTANT COPYEDITOR & PROOFREADER Maria Vano mariavano9@gmail.com SUBSCRIPTIONS P.O. Box 9001, Mt. Vernon, NY 10552 914-966-3180, x111 circulation@cinn.com PUBLISHED BY CINN Media, Inc. P.O. Box 9001, Mt. Vernon, NY 10552 (914) 966-3180 | Fax: (914) 613-1595 www.cinn.com | info@cinn.com President and CEO Steve Acunto

CINN MEDIA, INC.

INSURANCE ADVOCATE® (ISSN 0020-4587) is published bi-monthly, 20 times a year, and once a month in July, August, September and December by CINN ESR, Inc., 22 Bedford Road, Greenwich, CT 06831. Periodical postage paid at Greenwich, CT and additional mailing ofﬁces. POSTMASTER Send address changes to Insurance Advocate®, P.O. Box 9001, Mt. Vernon, NY 10552. Allow four weeks for completion of changes. SUBSCRIPTION RATES $59.00 US, Canada $65.00, International $135.00. TO ORDER Call 914-966-3180, fax 914-966-3264, write Insurance Advocate® PO Box 9001, Mt. Vernon, NY 10552 or visit www.Insurance-Advocate.com. INSURANCE ADVOCATE® is a registered trademark of CINN ESR, Inc. and is copyrighted 2016. All rights reserved. No part of this magazine may be reproduced in any form without consent. Trademark registered U.S. Patent and Trademark Ofﬁce.

For high-quality article reprints (minimum of 100), including digital rights, contact Gina Marie Balog at g@cinn.com or call 914-966-3180, x113

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[ O N T H E L E VE L ]

N. STEPHEN RUCHMAN, CPIA

Industry and Family Pride uOctober is a busy month in our industry and particularly at PIA of New York. It comes right after the association’s annual change of administration, and the newly inducted president hardly has a chance to get comfortable with his new title before he begins touring the state on behalf of our members. I remember when I was PIANY president in 2004. I hadn’t driven home from my first board meeting as president before hearing from thenAssistant Executive Director for Government Affairs Ellen Kiehl, Ph.D., about planning for our legislative meetings with lawmakers in Albany. While it wasn’t a presidential election year, it was, as always, right before an election and PIA never lets moss grow under its feet with regard to its work on behalf of professional agents and the independent agency system. That was an incredibly busy year for me and my business, but my work as a volunteer with PIA—as a director, officer, and as president— always has been gratifying and beneficial to me. I was reminded of my presidency during the PIANY change of administration last month. During the installation dinner, newly elected president John Parsons II, CIC, CPIA, AAI, spoke about his recently deceased father and his grandfather. Both were officers of PIA. In fact, John’s grandfather was a founding member of the association. I know I can speak on behalf of the entire board when I say, as we listened to John—who was there with his family— we couldn’t be more proud. He represents the hard-working, ethical and selfless type of person of which we know our industry is made. I couldn’t help but get a little choked up. As I sat in the PIANY board meeting the next day, I was still moved by John’s speech. I looked around the room and realized how important family is to PIA. Sitting next to me was David Sidle from the Southern Tier (his father was a PIA director); Bruce Rowlege in the Capital Region is a second-generation independent agent; Justin Fries’s father, Stu, from Long Island, was a PIA director and a leader with

While it wasn’t a presidential election year, it was, as always, right before an election and PIA never lets moss grow under its feet with regard to its work on behalf of professional agents and the independent agency system.

CIBGNY and the IIABNY. NY-YIP President Jason Bartow, also of Long Island, is in business with his father. Michael Plafker has moved up from the NY-YIP to serving on the PIA board, like his father Alan, who is past president of PIANY. PIANY National Director Rich Savino, who works with his brother Keith, is following the family tradition in the insurance industry; my own daughters worked with me in my agency and continue their successful careers in the business: The list goes on and on. In fact, PIANY’s Young Insurance Professionals organization is celebrating its 30th anniversary this year. This strong group of emerging leaders was formed by the PIANY board to help their sons and daughters grow into the business. PIA truly is a family based organization. Family is what our organization is about. PIA itself is a family; our members embody this philosophy, both at our offices and in our association; with our staffs, and our actual blood. This quality sets PIA above any other organization with which I’ve been affiliated. And, I truly believe that the success of our industry today, in a time when mega-agencies are buying out those that don’t have perpetuation plans, a family atmosphere is what will keep us in business. Just as PIA put in place a perpetuation plan 30 years ago with the YIPs, all independent agencies need a plan for their family business, or with existing key staff.

N. Stephen Ruchman, CPIA, is a retired independent agent and founder of Ruchman Associates, Inc., the agency he started in 1961. A past president of the Professional Insurance Agents of New York State, Inc., he is an active supporter of PIANY, and he has sat on or chaired nearly every committee including the Executive Committee and the Long Island Advisory Council and PIANY’s Political Action Committee. He can be reached via email at: nsruchman@gmail.com.

We need to ensure that family firms that hold similar values can merge or expand and maintain the foundation that makes them strong. As all PIANY presidents do, John has hit the ground running. In his first month, he already has spoken at Hudson Valley RAP and at Binghamton I-Day. He’s been to PIANY Advisory Councils around the state and attended meetings with the NYDFS and lawmakers, which is a continuation of the work he’s been doing on agents’ behalf for years. I know he is a great leader. He’s got fantastic support from his agency, his family and his PIA family. Speaking of families, PIA’s Glenmont family is growing! The PIA Management Services board announced it has taken on The New PIA of Vermont as yet another state affiliate it serves. I know agents in the Green Mountain State will thrive as the newest members. Welcome to the family, Vermont![IA]

6 October 31, 2016 / INSURANCE ADVOCATE

Jack_C

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4310 Greeting Card Dealer 7390 Beer/Ale Dealer 7999 Hardware Store 8018 Wholesale Store/NOC 8021 Meat, Fish Dealer-Wholesale 8032 Dry Goods, Clothing, Shoe 8047 Drug Store 8048 Fruit & Vegetables 8111 Plumbers Supplies Dealer-Wholesale Restaurant

8864 Developmental Organizations 8865 Residential Care Facility Hotel/Motel 9052 Hotels NOC 9058 Restaurants in Hotels

9061 Clubs 9071 Full Service Restaurants 9072 Fast Food Restaurants– Including Drivers 9074 Bars & Taverns Social and Health Services 8854 Home Health Care – Prof. Employees 9051 Home Health Care – Non Prof. Employees 8857 Counseling – Social Work – Traveling Oil and Gas Dealer 5193 Oil Burner Installation 8350 Fuel Oil & Gas Dealer 8353 Gas Dealers, LPG & Drivers

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[ IN FOCUS ]

K E L LY D O N A H U E - P I R O

It’s What We Do Consistently That Counts uWe all know the things we are suppose to do, right? Eat well, exercise, get enough sleep, account round and ask for the business. The challenge I all too often find is that we do these things inconsistently yet expect a consistent result. My trainer says it all the time “If you were only consistent…” Well, you try not to drink at an airport bar waiting three hours for a flight! So we supplement what we know we need to do consistently with consistent excuses. What I have learned is that with consistency comes routine, and with routine comes results. We can’t sometimes recruit and expect to find every rock star. No, we have to do it all the time! When we operate out of desperation we find it takes way more energy than preparation so we end up running around putting out fires. In order to be a consistent person you have to have a few key concepts down: 1. You have to learn excellent time management. You need to always be thinking about where your time is best served. If you are doing something you shouldn’t, you need to ask yourself why and who can do it better than you. 2. Consistency requires an excellent and dedicated plan. You can’t wing your day. You have to be deliberate in your day. Planning your week means starting with the big rocks and then adding in the little things around them. 3. Delegation is key. In order to run a successful business you have to empower people around you. This may stretch them outside of their comfort zone and they may need your mentorship, but that’s okay.

Well, you try not to drink at an airport bar waiting three hours for a flight! You’re putting investments into a bank that you can take withdrawals from. 4. You have to hold yourself accountable to your plan. There can be no excuses. If you are passionate and focused you will align your activities around them. If you don’t really care, it will be hard to stay on track. 5. Gather a group. Delegation is key but so is having a team of people collaborating and working together. The best way to start something consistently is to gather a team. In agencies we work with we see a consistent pattern. We often hear the staff say “Well we tried that before. We didn’t stick with it.” Or “Here’s another idea we won’t follow through on.” This sends a deadly message to your team. When your team believes they can be inconsistent then low and behold, they will. As an agency leader you need to hold yourself to a higher standard of excellence. Don’t be average, be extraordinary. We often aren’t consistent because we don’t see results fast enough. Our society is about immediate gratification. The sooner the better. This is why Amazon has drone delivery. We simply can’t wait. However, true change take time. It takes commitment, testing and refining to get to the good stuff. So don’t rush the process. Be consistently awesome by doing the things you know matter most.[IA]

Kelly Donahue-Piro, founder and president of Agency Performance Partners, is a no-nonsense effectiveness expert who has helped hundreds of insurance agencies identify and capitalize on sustainable improvement opportunities. Her specialties include agency culture assessment and change; management and supervisory coaching and benchmarking; customer retention strategy development; digital marketing strategy, planning and implementation; and sales planning, management and skillbuilding. In 2014, she created Agency Performance Partners with a mission to “partner with insurance entrepreneurs who dream to take their business to the next level and beyond, by relentlessly pursuing excellence in worldclass service and sales strategies.” The centerpiece of the organization’s transformational work is its Agency Performance AssessmentTM, a comprehensive survey tool Kelly created to zero in on organization-wide improvement opportunities and provide the foundation for a customized agency action plan. Mrs. Donahue-Piro is an engaging speaker who is available to conduct in-person and online agency success presentations that complement her firm’s one-on-one on-site and virtual consulting practice. Connect with her on social platforms, via email at kelly@agencyperformancepartners, or by phone at 401-415-6205.

FOR ADVERTISING OR SUBSCRIPTION INFORMATION Call 914-966-3180 | g@cinn.com 8 October 31, 2016 / INSURANCE ADVOCATE

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[ I N T H E A S S O C I AT I ON S ]

HVRAP Emphasizes Action and Presence Have a strong web presence; be aware of E&O trends uMore than 200 insurance professionals from across the state gathered on Oct. 20 in the Doubletree Hotel in Tarrytown, to enjoy a day of networking, education and more, as part of PIANY’s annual Hudson Valley Regional Awareness Program. President’s Message During the event’s luncheon newly elected PIANY President John Parsons II, CIC, CPIA, AAI, delivered his first formal remarks as president. In his speech, Parsons stressed the importance of reaching out to younger generations and setting an example of how rewarding a career in insurance can be. He also took time to reflect on all PIANY has accomplished over his time with the association and encouraged everyone in attendance to become more involved in the association.

HVRAP COMMITTEE CHAIR FRANCES A. SCOTT WELCOMES EVERYONE TO THE LUNCHEON.

As an active member of PIANY, Ryan has served on the Kingston Advisory Council and as past president of the New York Young Insurance Professionals.

NEWLY ELECTED PIANY PRESIDENT JOHN PARSONS II, CIC, CPIA, AAI, DELIVERS HIS FIRST FORMAL REMARKS AS PRESIDENT.

“Because you are here today, you’ve demonstrated that you are committed to our industry and dedicated to improving yourself and your business to better serve your clients,” he said. “I applaud you for your work, and ask each of you, as the best marketing examples our industry can have, to take a more active role in PIA.” Parsons wrapped up his speech by expressing his hopes and plans as president of PIANY, “I promise, this year and beyond, I will work with PIA to continue to bring you the best programs and benefits that we can to help you build your businesses.” Keynote/Awards Luncheon During the luncheon, Hudson Valley RAP Committee Chair Frances A. Scott presented Robert J. Ryan Jr., CIC, of Ryan & Ryan Insurance, with the HVRAP Distinguished Insurance Service award. The award is presented to individuals in the insurance industry who have a history of significant contributions and support to the regional insurance community. Ryan was presented with the award for his continued dedication and support to the professional, independent insurance agent. 10 October 31, 2016 / INSURANCE ADVOCATE

ROBERT J. RYAN JR., CIC, ACCEPTS THE HVRAP DISTINGUISHED INSURANCE SERVICE AWARD.

Also during the luncheon, Casey Preston, CEO of Stratosphere Marketing Solutions, delivered the event’s keynote address, speaking to the importance of social media and a strong web presence for all businesses. Drawing on his more than 15 years of experience in the digital marketing/web design industry, Preston provided attendees with strategies to strengthen an agency’s online presence. The overarching theme of Preston’s presentation was: Keep it simple. “I think we all overcomplicate our marketing online to the point where we have so many moving parts and nothing’s working for us,” Preston said. “The solution to this comes down to four factors: Time management, knowledge of digital marketing, retention and staying connected.” Preston provided insight into how to work social media into an agency. He suggested starting a blog and posting four times a

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[ IN TH E A S S OC IAT I ONS ]

CASEY PRESTON DELIVERS HIS KEYNOTE ADDRESS ON THE IMPORTANCE OF SOCIAL MEDIA AND A STRONG WEB PRESENCE.

month; making sure you are posting on Facebook and other social media sites (e.g., Twitter and LinkedIn) and engaging your base; and making sure you like what comes up when you search for your agency online. Preston called this winning the battle of you. “You need to match your online brand with your offline brand because consumers are going to find you there first,” he said. “Even if you are the most established agency in your market, you might be losing business to an agency that doesn’t provide the same quality service.” Staying connected and engaged with the local community and ensuring you are creating strong connections both online and offline, is where independent agencies win against larger insurance companies. Preston suggested having your agency’s web presence reflect your community involvement. Being consistent across the digital landscape is key. “As an independent agent, we have to offer much more value and service, and we have to simplify our web presence to serve these modern technologies,” Preston said. “That’s going to allow you to continue to provide the value that an independent agency offers.”

AAI, ARM, CRIS, AIS, walked agents and brokers through contemporary issues being faced in the insurance industry today. The morning session—What’s New in Personal Lines and Commercial Lines?—aimed to “bring people up to speed with all of the massive changes that are going on in the insurance industry with the rise of the sharing economy,” Lyon said. The class tackled this goal by examining emerging issues, risks and exposures that clients of professional, independent insurance agents face in this emerging technology world and how agents and brokers can reconcile those risks and exposures to insurance products that ensure clients have proper protection. The session also explored ride hailing, the host liquor liability coverage, price optimization and more. In the afternoon session—25 Potential Errors-and-Omissions Issues—Lyon led the class through real-life errors-and-omissions claims to address how agencies can prevent similar issues. The class took a proactive approach to policy language and exposures that agents and brokers face by analyzing actual court cases and focusing on policy language. “In the class we look at current court cases where agents get dragged into court for not meeting the standard of care that an agent owes in the state of New York,” Lyon said. “The primary goal is to keep the agency out of court because once you get to court and involved in an E&O claim, it’s a lose-lose situation for anybody. Be proactive, understand the products you are selling and stay out of court.” Networking HVRAP offered attendees the opportunity to connect with fellow agents, catch up with friends and make new contacts at its expansive trade show. With nearly 50 exhibitors and major door

Education HVRAP attendees had the opportunity to earn much-needed continuing-education credits by participating in two education sessions offered at the event. In both the morning and afternoon sessions, insurance expert Steven D. Lyon, CPCU, CIC, CRM,

(L-R) PIANY IMMEDIATE PAST-PRESIDENT GENE SANDY, CIC; PIANY PRESIDENT JOHN PARSONS II, CIC, CPIA, AAI; PIANY EXECUTIVE DIRECTOR KELLY NORRIS, CAE; AND PIA NATIONAL PRESIDENT GARETH W. BLACKWELL JR., CPCU, POSE FOR A PICTURE DURING THE TRADE SHOW.

STEVEN D. LYON, CPCU, CIC, CRM, AAI, ARM, CRIS, AIS, DURING ONE OF THE EDUCATION SESSIONS.

prize drawings, the trade show offered participants the perfect venue to catch up on the latest innovations, products and markets. This year’s event closed with another networking opportunity, sponsored by PIANY-YIP. The networking reception offered insurance professionals the opportunity to discuss the day’s events over complimentary cocktails and hors d’oeuvres.[IA] INSURANCE ADVOCATE / October 31, 2016 11

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LICONY

A DV E R TO R I A L

LICONY

Life Insurance: New York’s Economic Driver By Mary A. Grifﬁn, President & CEO, Life Insurance Council of New York, Inc. Life insurance. It is something too many people only think about in terms of the protection it provides to the insured. While the financial security life insurance provides is unquestionably vital and something every person should have, what is often overlooked is the fact that the industry is also one of the strongest drivers of New York’s economy. In New York State alone, the life insurance industry provides direct jobs, indirect employment, needed investments in other industries and payments to policy holders, who in turn spend that money on goods, services and necessities in New York. It is why the Life Insurance Council of New York (LICONY) fights so hard every day to make sure the legislative and regulatory climate in New York is one that will allow our member companies and affiliates to do business and grow in New York. There is absolutely no doubt – without a thriving life insurance industry, the economy of New York would suffer. In fact, the life insurance industry, directly or indirectly, supported approximately $22.5 billion in Gross Domestic Product (GDP) in 2012. This generated an estimated $2.5 billion in state and local taxes, with an estimated 1.8 billion of that coming directly from life insurers and their employees. Those are some impressive numbers, but let’s take a deeper dive into just what life insurers contribute to New York’s economic picture. A Direct and Indirect Job Creator New York is the center of the U.S. life insurance industry. In fact, the industry began in this state more than 250 years ago.

The life insurance industry, with 171 life insurers licensed to do business in New York and with 85 domiciled here, employs approximately 61,000 people in this state alone. Those jobs support an additional 92,000 non-insurance jobs, which means the industry is responsible for more than 153,000 jobs in New York. Investments that Power a State The impact life insurers have on New York’s economy does not stop at employment. According to the American Council of Life Insurers, in 2016 life insurance companies will invest approximately $462 billion of their assets in New York's economy. Of that, approximately $378 billion is in stocks and bonds that help finance state and municipal infrastructure, utilities, public and private construction. These widespread investments generate thousands of jobs and innumerable services for New Yorkers across the state. In addition, the life insurance industry provides $34 billion in mortgage loans on farm, residential and commercial properties and owns $1 billion in real property in New York. Protecting New Yorkers Currently New Yorkers own eight million individual life insurance policies that average $195,000 in coverage per policy. This translates to $2.2 trillion in total life insurance coverage and our industry is there when these policyholders need us. In 2014, $32 billion was paid to New York residents in the form of death benefits, matured endowments, policy dividends, surrender values, and other payments.

These funds provided financial resources for children to go to college, allowed surviving spouses to stay in their homes, and enabled new leadership in small businesses when unexpected change occurred. Simply put, it meant families, businesses and people stayed in New York, and kept contributing to the economy, when otherwise it may have been impossible. A Strong and Vital Industry, Now and in the Future New York needs to maintain an environment that allows the insurance industry to continue to help grow the state’s economy and provide consumers with products that help grow and protect their assets. That is what we fight for every day here at LICONY. Our companies are so much more than just a safety blanket for a worst-case scenario – they are one of the strongest economic engines driving our economy. Mary A. Griffin is the President and Chief Executive Officer of the Life Insurance Council of New York, Inc. LICONY is the principal voice of the life insurance industry in New York. LICONY works to create and maintain a legislative, regulatory, and judicial environment that encourages its members to conduct and grow their life insurance businesses here in New York State. For stories about New Yorkers who have benefitted greatly from purchasing the products of life insurers, go to www.licony.org, and click on “Published Articles” in the NEWSROOM box on the homepage.

111 Washington Avenue, Ste. 300, Albany, NY 12210 O: (518) 436-8417 | website: www.licony.org 12 October 31, 2016 / INSURANCE ADVOCATE

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Focus.. Vision. Reach.

New Yo ork Insurance Associa i tion ti

KNOW BE T TER NE W YORK CONN O EC TIONS w w w.nyia.org

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NYiDAY Lights Up Times Square 14 October 31, 2016 / INSURANCE ADVOCATE

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View from 50,000 Feet Set in Times Square, IIABNY crafted the NYiDAY program to offer solutions to the pain points agency leaders are experiencing. From a super session panel discussion on emerging issues to breakout sessions focused on hiring, agency perpetuation, customer experience and agency management systems, and ending with a fun chat with Mike Greenberg—the program was top notch. Post-session buzz was excellent across the board. The show floor was filled with almost 60 invitation-only solution providers; a high-quality group the team felt would directly address the needs of attendees. In a post-event survey—attendees

LISA LOUNSBURY, SENIOR VICE PRESIDENT OF IIABNY AND PRESIDENT OF IAAC, THANKS EVENT PARTNERS

resources, the ability for businesses to successfully recruit talent has never been easier. But, there are some pitfalls to watch for including the interview process. Leaders need a process that is

KEYNOTE SPEAKER: MIKE GREENBERG, ESPN’S “MIKE & MIKE” TODD HART, CEO OF NARRAGANSETT BAY INSURANCE COMPANY

unanimously agreed the providers were great. Networking was easy on the show floor, the connection lounge and during the cocktail hour. While technology was a constant theme in the program, it also was used throughout the event with a technology-vibe atmosphere and an interactive mobile app. Over 75 percent of attendees used the app for polling, connections and access to class and exhibitor materials.

effective and legally compliant. If nothing else, she suggests agencies Google “prohibited interview questions.” Claudia also shared the power in behavioral testing and group interviews. The class

Session Round Up Super Session: Solutions for Emerging Exposures Industry experts from the DFS, Moody’s, ISO and ELANY spoke with Sam Friedman of Deloitte about the new risks and exposures emerging daily through cyber threats, the internet of things, terrorism and tech advances. This power group jumped into the ideas of stand-alone vs add-on cyber coverage, how driverless cars could impact commercial and personal lines and what the sharing economy means for insureds. From potential markets and coverage forms to regulatory issues, the depth of this session shows there is much more to come.

How to Hire and Train Great Talent A very popular session with Claudia St. John of Affinity HR She shared her belief that due to the number of online

DICK POPPA, IIABNY PRESIDENT AND CEO, DELIVERS TALK ON INDIVIDUAL ACCOUNTABILITY CONTINUED ON PAGE 16

INSURANCE ADVOCATE / October 31, 2016 15

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should do). Steve says no one in an agency gets enough training and that vendors, user groups and outside consultants are willing and able to fill that void. The Shock and Awe of the Customer Experience “How well are you delivering a positive customer experience?” After seeing the shock and awe experiences examples, you can bet attendees were left feeling they have room to grow. Sydney Roe, of

AGENCY NATION & TRUSTEDCHOICE.COM’S SYDNEY ROE LEADS THE CUSTOMER EXPERIENCE SESSION

wrapped with IIABNY’s Training Tracks—a self-directed guide to creating valuable employees. HR GURU CLAUDIA ST. JOHN FROM AFFINITY HR GROUP SHARES HOW TO FIND AND RETAIN TALENT

Agency Nation shared examples ranging from human touch to digital touch, including an example phone call from an agency (Yikes). Sydney suggested leaders review all interactions a customer could CONTINUED ON PAGE 20

IIABNY CHAIR OF THE BOARD, JACK SMITH, ON WHAT MATTERS

Maximizing the Value in Your Agency Management System Your agency management system, and the information in it, is likely underutilized. Steve Anderson shared the importance of evolving to a new mindset and building a digital sales culture, creating effective workflows, working with documents and how to master carrier communications (which he says you can and

VERTAFORE’S SHERI PROUT

YOU WANT TRUSTED CHOICE

YOU NEED IIABNY. 16 October 31, 2016 / INSURANCE ADVOCATE

The association who give you access to the brand of the independent insurance agent.

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ROBERT HESTER FROM PERCY HOEK IN VERTAFORE'S SESSION

THE NBIC TEAM

Something Unique – Students

have with employees, websites and everything in between. Then make improvements—many are easy. Tool tip: Trusted Choice’s free “Power of 30 Seconds” helps employee phone skills.

Another unique and interesting aspect to the day, IIABNY invited students from St. John’s University–School of Risk Management, Insurance and Actuarial Science to apply for a grant to attend. Fifteen students, armed with resumes, soaked in sessions and networked with agency owners needing qualified can-

RON BIEDERMAN FROM ISO, STEPHEN DOODY FROM THE NYS DFS, MOODY’S PANO KARAMBELAS AND ELANY’S DANIEL MAHER DISCUSS SOLUTIONS FOR EMERGING EXPOSURES WITH SAM FRIEDMAN OF DELOITTE

MIKE POLENDNA DEMOS RISK GENIUS FOR JACKIE GERBINO OF KAY DINA INSURANCE AGENCY

Key Considerations of Agency Acquisition and Perpetuation

didates. IIABNY says helping to grow and educate the talent pool is an area of focus.

With mergers and acquisitions growing in the IA channel, the timing of this session, like all the others in this program, is spot on. Insurbanc’s Dave Tralka, Sica Fletcher’s Michael Fletcher and Sabrina Sally of Swiss Re discussed the pillars, pros and challenges of perpetuation, how to gain capital, and insight on structuring the deal. They presented valuation techniques and shared an impressive increase in leveraged buyouts, including which companies are buying. Tips were given on E&O considerations before you buy.

Other Sessions Applied and Vertafore both presented innovative new tools. Pictometry is an interesting and cool tech asset. They demonstrated how their fleet of drones provide aerial photos of properties for the insurance industry.

Facing these Issues? Say Hello to NYiDAY On Demand The topics that NYiDAY addressed were chosen because they are the issues agencies face today. And not just the agencies who were able to attend, but the entire IA channel. The IIABNY team developed a tool for leaders and their teams around the state, and beyond, to gain access to the valuable knowledge the event offered. Enter NYiDAY On Demand. Launching later this month at NYiDAY.com, visitors can watch sessions, learn about and connect with solution providers and access a library of resources provided at NYiDAY. “Independent agents are facing incredible challenges, both in the changing landscape of exposures and in the competition to CONTINUED ON PAGE 22

20 October 31, 2016 / INSURANCE ADVOCATE

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IN THE MATTER OF THE LIQUIDATION OF COLONIAL COOPERATIVE INSURANCE COMPANY Supreme Court County of New York Index No.: 400236/10 NOTICE Pursuant to an order of the Supreme Court of the State of New York, County of New York (“Court”), entered on October 4, 2010, the then-Superintendent of Insurance of the State of New York and his successors in office were appointed as liquidator (“Liquidator”) of Colonial Cooperative Insurance Company (“CCIC”) and, as such, has been directed to take possession of CCIC’s property and liquidate its business and affairs pursuant to Article 74 of the New York Insurance Law (“Insurance Law”). The Superintendent of Financial Services of the State of New York has now succeeded the Superintendent of Insurance as Liquidator of CCIC. The Liquidator has, pursuant to Insurance Law Article 74, appointed Gail Pierce-Siponen, Assistant Special Deputy Superintendent (“Assistant Special Deputy”), as her agent to liquidate the business of CCIC. The Assistant Special Deputy carries out his duties through the New York Liquidation Bureau (“NYLB”), 110 William Street, New York, New York 10038. The Liquidator has submitted a motion to the Court seeking an order: (i) approving the Liquidator’s recommendation to allow the claim of the New York Property/Casualty Insurance Security Fund (the “P/C Fund”) for expenses and losses it incurred and paid from April 1, 2016 to June 30, 2016 in the amount of $7,109 (the “Remaining Portion of the P/C Fund Claim”); and upon the Court’s approval, the Remaining Portion of the P/C Fund Claim becoming an allowed claim; (ii) approving the Liquidator’s report on the status of the CCIC liquidation proceeding (the “Liquidation Proceeding”) and the financial transactions delineated in such report; (iii) authorizing the payment of administrative expenses, including such expenses for the closing of the Liquidation Proceeding; (iv) terminating and closing the Liquidation Proceeding; (v) releasing and discharging the Liquidator, her predecessors and successors in office, and their agents, attorneys and employees, from any and all liability arising from their acts or omissions in connection with the Liquidation Proceeding; (vi) authorizing the NYLB to continue, after the termination of the Liquidation Proceeding, to receive and disburse assets to those creditors of CCIC with allowed Class two claims who are eligible to share in a pro-rata distribution, and to pay any and all administrative expenses incurred in connection with the collection and disbursement of any such assets; and (vii) granting the Liquidator such other and further relief as this Court deems appropriate and just. The Return Date on the Liquidator’s motion is the 7th day of December 2016, at 12:00 o’clock, p.m., before the Court at the Courthouse, 111 Centre Street, New York, New York, Room 623. If you wish to object to the Liquidator’s application, you must serve by first class mail a written statement setting forth your objections and all supporting documentation upon the Liquidator at the following address: Superintendent of Financial Services of the State of New York as Liquidator of Colonial Cooperative Insurance Company, 110 William Street, 15th Floor, New York, New York 10038, Attention: General Counsel. The application, including the Closing Report, is available for inspection at http://www.nylb.org and at the above address. In the event of any discrepancy between this notice and the documents submitted to Court, the documents control. Requests for further information should be directed to the NYLB, Creditor and Ancillary Operations Division, at (212) 341-6241. Dated: October 7, 2016. MARIA T. VULLO, Superintendent of Financial Services of the State of New York as Liquidator of Colonial Cooperative Insurance Company.

INSURANCE ADVOCATE / October 31, 2016 21

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provide protection for them. Our mission is to help agencies succeed,” said Lisa Lounsbury, IIABNY’s Sr. Vice President, “The incredible feedback for NYiDAY’s sessions made it a no-brainer to push forward—with support from our amazing sponsors —in sharing it on a bigger scale. The more independent agents who benefit, the better.”[IA]

A PEEK INSIDE A SESSION

IIABNY’S DICK POPPA, SHARON EMEK OF WORK AT HOME VINTAGE EXPERTS AND SABRINA SALLY OF SWISS RE

ABOVE: MIKE GREENBERG HAVING FUN WITH TEAM NBIC

SUFFOLK AND TRI-COUNTY AGENTS - TOM CROWLEY, ALEX GIRALDO, STEVE FOLAN, FRANK ELORZA AND CHRIS WUKOVITS

LINDA REY OF THE REY INSURANCE AGENCY

22 October 31, 2016 / INSURANCE ADVOCATE

BELOW: IIABNY’S NYIDAY CREW: JEANNE ABATELLI, KATHY LAWLER, KATHY WEINHEIMER, KATHY GLAHN, JAMIE DEAPO, BRENDA STRONG, LISA LOUNSBURY, MIKE GREENBERG, DICK POPPA, BRIAN BIXBY, JOANNE CLANCY, TIM DODGE, ALLISON JUST, JENNIFER LINDACHER, JULIE MACCONNELL

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JOIN US FOR THE DINNER THAT MAKES A DIFFERENCE

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Join 1,000 insurance industry executives and friends at the premier industry beneﬁt event. Your support will provide signiﬁcant grants to community charities as the Insurance Industry Charitable Foundation Northeast Division tops $7 million in total grants funded in our area since 2007.

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[ I N T H E A S S O C I AT I ON S ]

PIA Expands to Include Vermont Association uGLENMONT, N.Y.—PIA Management Services Inc., today announced it has reached an agreement with PIA National to assume management of the PIA state affiliate in Vermont. Formerly, PIA members were part of a merged association, which in-

cluded PIA and IIAB members to comprise the Vermont Insurance Agents Association. Professional Insurance Agents of New York State, New Jersey and Connecticut have been business partners in a highly successful joint-management agreement

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for nearly 50 years. Through this arrangement, and the support of PIA Management Services Inc., which is wholly owned by the three state associations, PIA of New Hampshire members have enjoyed the benefits of the association’s participation in this group since 1999. “PIA Management Services is pleased to offer the expertise and service of our 80 professionals to independent agents in Vermont,” said PIA Management Services President and CEO Mark LaLonde, CPIA, CIC, AAI. “And, we welcome Vermont to the Glenmont-based coalition of PIA affiliates, an organization that focuses on the business success of member agencies and their employees.” “This is an exciting time for professional, independent agents in Vermont, who will now have access to all of the benefits and services to which fellow agents in neighboring states have access,” said PIAVT Executive Director Kelly Norris, CAE. The Glenmont-based PIA partnership evolved over more than 75 years, beginning in the 1940s as the Mutual Agents Association. In 1977, the Professional Insurance Agents identity was established at a national level and adopted by each of the respective state affiliates, in response to the expanding markets accessed by member agencies. Membership in PIAVT will be available to independent agents and insurance-related businesses affiliated with independent agents starting in November. Initial, but always-expanding, benefits will include: agents E&O and other coverages; education; information; creative services; networking opportunities and advocacy. Businesses that want to join the association can do so by logging on to the PIA website at pia.org/VT; by calling (800) 424-4244; or by email at memberservices@pia.org.[IA] PIA Management Services Inc. is the umbrella corporation that manages the Glenmont-based Professional Insurance Agents associations, representing independent insurance agencies, brokerages and their employees in New York, New Jersey, Connecticut, New Hampshire and Vermont. PIANY, PIANJ, PIACT, PIANH and PIAVT is a partnership of ﬁve state trade associations representing independent insurance agencies, brokerages and their employees throughout their respective states.

www.insurance-advocate.com 24 October 31, 2016 / INSURANCE ADVOCATE

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[ O N M Y R A DA R ]

BA R RY Z A L M A

Georgia Refuses to Adopt Continuous Trigger CGL Not Limited to Insuring Injury Taking Place During the Policy Period uWhen an insured has a continuous loss where pollutants leak into the soils and cause damage over a long period of time, it can be held for the damages that result, as part of a continuous loss, over a long period of time. In Columbia Casualty Company v. Plantation Pipe Line Company, Court of Appeals of Georgia, — S.E.2d —-, 2016 WL 4548664 (August 31, 2016), Plantation Pipe Line Company (Plantation) sued five of its excess liability insurers, including Columbia Casualty Company (Columbia), seeking relief including a declaratory judgment as to each insurer’s respective share of Plantation’s losses arising from a pipeline leak. The trial court granted Plantation’s motion and denied Columbia’s crossmotion. Columbia appealed both rulings, contending that the trial court erred in allocating all of Plantation’s losses to the policies that were in place at the time of the fuel leak, rather than allocating Plantation’s losses pro rata among the multiple, successive policies that were issued to Plantation over the thirty-year period during which the environmental contamination continued to accrue.

FACTS The record shows the following relevant undisputed facts: On April 2, 1976, Plantation employees discovered that turbine fuel had leaked from an underground Plantation pipeline located in Cabarrus County, North Carolina. Within 24 hours, Plantation repaired the pipeline and cleaned up the leak. Without resorting to insurance, it compensated the only affected landowner $50. More than thirty years later, on April 3, 2007, one of Plantation’s workers found contaminated soil during maintenance of Plantation’s pipeline, and the contamination was traced to the 1976 leak. Plantation filed this action in 2012, seeking recovery for amounts it has spent to settle third party claims, amounts it has expended for remediation, and projected 26 October 31, 2016 / INSURANCE ADVOCATE

The record shows that at the time the initial fuel leak occurred in Cabarrus County in April 1976, Plantation had $1,000,000 in primary coverage under a comprehensive general liability (“CGL”) policy …

costs to complete remediation. A Plantation executive estimates that Plantation’s costs through 2030 will total between $5.6 million and $8.6 million. The record shows that at the time the initial fuel leak occurred in Cabarrus County in April 1976, Plantation had $1,000,000 in primary coverage under a comprehensive general liability (“CGL”) policy issued by American Reinsurance Company (subject to a self-insured retention of $100,000), and had excess coverage, including $1 million under an umbrella policy issued by Lexington Insurance Company. In late 1975, Columbia issued an “Excess Third Party Liability Policy” to Plantation for the period of January 24, 1976 through November 30, 1976. Unless otherwise provided, the Columbia excess policy incorporated the terms of the Lexington umbrella policy. In the Insuring Agreements in the Lexington umbrella policy, Lexington agreed: “[t]o pay on behalf of [Plantation] the ultimate net loss in excess of the underlying insurance [(the self-insured retention and the primary CGL policy issued by American)], which [Plantation] shall become legally obligated to pay as damages by reason of the liability imposed upon [Plantation] by law… because of…[p]roperty [d]amage…caused by or arising out of an occurrence.” In the Insuring Agreements in the Columbia excess policy, Columbia agreed

Barry Zalma, Esq., CFE, has practiced law in California for more than 42 years as an insurance coverage and claims handling lawyer. He now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He founded Zalma Insurance Consultants in 2001 and serves as its only consultant. Look to National Underwriter Company for the new Zalma Insurance Claims Library, at www.nationalunderwriter.com/ZalmaLibrary. The new books are Insurance Law, Mold Claims Coverage Guide, Construction Defects Coverage Guide and Insurance Claims: A Comprehensive Guide. The American Bar Association, Tort & Insurance Practice Section has published Mr. Zalma’s book “The Insurance Fraud Deskbook” available at http:// shop.americanbar.org/eBus/Store/Pro ductDetails.aspx?productId=214624, or 800-285-2221 which is presently available. Legal Disclaimer: The author and publisher disclaim any liability, loss, or risk incurred as a consequence, directly or indirectly, of the use and application of any of the contents of this blog. The information provided is not a substitute for the advice of a competent insurance, legal, or other professional. The Information provided at this site should not be relied on as legal advice. Legal advice cannot be given without full consideration of all relevant information relating to an individual situation.

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[ ON MY RADAR ] to indemnify Plantation for loss in excess of the limits of liability of the Lexington policy, which was the “underlying insurance.” The Insuring Agreements in the Columbia policy further provide as follows: “This policy applies to injury or destruction taking place during this policy period, provided that when the immediate underlying policy insures occurrences taking place during its policy period, instead of injury or destruction taking place during its policy period, then this policy likewise applies to occurrences taking place during this policy period[,] and ‘occurrences’ is substituted for ‘injury or destruction’ in Part III of this policy [regarding reduction of the aggregate].”

ANALYSIS Columbia contends that it is entitled to judgment as a matter of law that the policy it issued to Plantation is not triggered by the claims at issue in this case. Columbia points to evidence that the environmental contamination caused by the occurrence at issue, the April 1976 fuel leak, continued to unfold (and even to this day continues to unfold), as the quantity of pollutant that Plantation failed to clean up in 1976 migrated downward through the soil, reached flowing groundwater and formed a plume in the water table, where it contaminated clean water that made contact with the contaminated water, and that such contamination of previously clean water will continue to occur until the remediation process is complete. Columbia argues that this is typical of environmental contamination cases because environmental contamination by its nature occurs over time, gradually or progressively causing personal injury or property damage, which may be unknown to the injured parties for years. Columbia points to evidence that from 1976 through 2005 several different insurers issued liability policies to Plantation. Over time, the overall coverage profile varied, as the limits of the different policies, the scheme of the different layers of coverage (self-insured retention, primary coverage, umbrella coverage, excess coverage, etc.), and areas of overlapping coverage all varied from year to year. Columbia argues that it is typical of environmental contamination cases that, because of the progressive nature of environmental contamination, the resulting personal injury or property damage over-

…Columbia contends that Plantation’s reliance on the so-called “known loss” doctrine is misplaced because the doctrine is not the law of Georgia and because the doctrine is inapplicable, given the fact that “Plantation judicially admitted it did not know petroleum product and contaminants remained subsurface at the Site after it repaired the leak in April, 1976.” laps multiple successive insurance policy periods of the insured’s liability coverage. And Columbia contends that in this case multiple successive insurance policies were potentially triggered during later policy periods by the unfolding environmental damage that originated with the 1976 pipeline leak and that Plantation’s losses from remediation costs and third-party claims should be allocated among those policies by the Court. Columbia urges the Court to adopt the so-called “continuous trigger theory.” Columbia argues that Plantation’s total financial loss from the latent, continuous, and progressive property damage that took place over three decades should be allocated pro rata among each successive policy period from 1976 to 2007, when the contamination was discovered and became “manifest.” When this is done, Columbia argues, the amount of loss properly allocated to the policy period of the policy it issued to Plantation is far less than the $2 million attachment point for the excess coverage it provides. As a result, Columbia contends, its policy is not triggered as a matter of law under the continuous trigger theory. Moreover, Columbia argues, the result would be the same if the Court were to adopt in the alternative the so-called “injury in fact” trigger theory. Even if this Court were inclined to adopt the continuous trigger theory, application of this theory is premised on the assumption that the Columbia policy con-

tains language that limits coverage to property damage that takes place during the policy period. The insuring agreement in the Columbia policy provides that the policy applies to injury taking place during the policy period unless, instead of insuring injury taking place during the policy period, the Lexington policy insures occurrences taking place during the policy period, which it does. In this case, then, the Columbia policy expressly “applies to occurrences taking place during [the] policy period. Columbia argues that Plantation failed to identify any evidence that more than $2 million worth of property damage occurred during the coverage period for the Columbia policy, again restating its argument that its policy was not triggered. In addition, Columbia contends that Plantation’s reliance on the so-called “known loss” doctrine is misplaced because the doctrine is not the law of Georgia and because the doctrine is inapplicable, given the fact that “Plantation judicially admitted it did not know petroleum product and contaminants remained subsurface at the Site after it repaired the leak in April, 1976.” If the insured knows or has reason to know, when it purchases a CGL policy, that there is a substantial probability that it will suffer or has already suffered a loss, the risk ceases to be contingent and becomes a probable or known loss. Where the insured has evidence of a probable loss when it purchases a CGL policy, the loss is uninsurable under that policy (unless the parties otherwise contract) because the risk of liability is no longer unknown.

ZALMA OPINION The facts make clear that there was an “occurrence” during the effective dates of the Columbia policy, therefore compelling —regardless of the trigger applied— Columbia to defend and indemnify Pipeline. Of course, since the subsequent policies were triggered when the contamination continued, Pipeline learned of the continuing pollution much later, but it seems to me all policies in effect during the occurrence over the years should be compelled to pro-rate with Columbia. Perhaps, if there is an appeal to the Georgia Supreme Court, the continuous trigger will be adopted since no insurer on the risk when loss is occurring should be exonerated from coverage.[IA] INSURANCE ADVOCATE / October 31, 2016 27

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[ I N T H E A S S O C I AT I ON S ]

The Hill Names Big “I” Leaders Among Top D.C. Lobbyists uWASHINGTON, D.C.—The Hill, a leading political newspaper, has named Bob Rusbuldt, Big “I” president & CEO, and Charles Symington, Big “I” senior vice president of external and government affairs, among the top trade association lobbyists in Washington, D.C. “The Big ‘I’ is proud to have its government affairs team recognized, once again, by one of the premier political newspapers in the country,” says Spencer Houldin, Big “I” chairman and president of Ericson Insurance Advisors in Washington Depot, Connecticut. “We are grateful to Bob Rusbuldt, Charles Symington and the entire government affairs team for the hard work and dedication that consistently results in our association being named among the most influential in the country.” The Hill piece noted the association’s work on delaying the ACA’s “Cadillac tax” provision and its effort to protect the National Flood Insurance Program. “The Big ‘I’ government affairs staff has been recognized for a number of years as one of the top lobbying operations in the country and was the only group listed that represents insurance agents and brokers,” says Lee Schilling, Big “I” government affairs committee chairman and president of Schilling & Reid Insurance in Amite, Louisiana. “The professional and well-respected team we have in our nation’s capital diligently represents our members from across the country and we thank them on behalf of the entire agent and broker community.” Congressional leaders regularly tap the Big “I” federal government affairs team for its political acumen, including sitting on congressional steering committees, raising campaign dollars, hosting political events, and strategizing to help members of Congress better serve their constituents and advance top issues. A vital component of the association advocacy efforts is InsurPac, the Big “I” political action committee. It has disbursed approximately $2.1 million this election cycle to U.S. Senate 28 October 31, 2016 / INSURANCE ADVOCATE

“The Big ‘I’ government affairs staff has been recognized for a number of years as one of the top lobbying operations in the country and was the only group listed that represents insurance agents and brokers.” and House campaigns on both sides of the aisle that are supportive of the independent agency system.[IA]

forward through published articles and interviews that promote financial services as a career for women. She frequently promotes Financial Services: Women at the Top–A WIFS Research Study at industry events and conferences.

CHAPTER OF THE YEAR The Chapter of the Year award recognizes the chapter that excels in the areas of membership, governance, planning, programs, and engagement. The 2016 Chapter of the Year is Portland. Chapter President, Marissa Sainz, accepted the award on behalf of the Portland Board and membership. About WIFS Eighty (80) years strong, Women in Insurance & Financial Services, headquartered in Albany, NY, is the only organization in the insurance and financial services industry exclusively devoted to supporting the careers of women and helping them succeed in this business. The WIFS mission is to attract, develop, and advance the careers of women in the financial services industry. Over 1,300 WIFS members

WIFS Announces 2016 Award Winners uALBANY, N.Y.—Several women were honored by Women in Insurance & Financial Services at the Annual WIFS Awards Ceremony held in Chicago recently. The following awards were presented:

WOMAN OF THE YEAR The 2016 recipient is Arthea “Charlie” Reed, Financial Representative at Northwestern Mutual. Arthea’s WIFS National Board service and commitment to helping women succeed resulted in the landmark publication, Financial Services: Women at the Top–A WIFS Research Study. Arthea was formerly a professor and chair of the Education Department at the University of North Carolina–Asheville (UNCA). She earned a doctorate at Florida State University. Her nomination cited her long-term commitment to women as an advocate, role model and mentor. She remains dedicated to moving the industry

Eighty (80) years strong, Women in Insurance & Financial Services, headquartered in Albany, NY, is the only organization in the insurance and financial services industry exclusively devoted to supporting the careers of women and helping them succeed in this business. throughout the country receive value from monthly education programs, local chapters in over 22 US markets, annual national conference, professional development, member discounts, corporate partnerships, and affiliations.[IA]

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[ IN TH E A S S OC IAT I ONS ]

PCI Elects New Officers to the Board of Governors uDALLAS—The Property Casualty Insurers Association of America (PCI) elected new officers to its Board of Governors during the association’s annual meeting. John Barbagallo, commercial lines group president, Progressive Insurance Group, was elected as PCI’s chair; Kurt Bock, CEO, COUNTRY Financial was elected first vice chair; and Pete McPartland, chairman of the board, president and CEO, Sentry Insurance, was elected second vice chair. “We are pleased to welcome John as PCI’s board chair,” said David A. Sampson, PCI’s president and CEO. “John is a very strategic leader. He dives deeply into understanding the industry’s emerging opportunities and is a clear thinker who can position PCI to help our member companies embrace the future. As an industry, we are experiencing a rapid pace of change, in addition to global unrest. We appreciate the insight and industry expertise of John, Kurt and Pete to help us navigate and embrace the challenges facing our industry, including the rising loss cost trends and unprecedented level of regulatory overreach at the state, federal and international levels.”

PCI’s New Board Officers John Barbagallo—Chair Commercial Lines Group President Progressive Insurance Group John Barbagallo is commercial lines group president at Progressive Insurance Group. He joined Progressive in 1983 and his career at Progressive spans more than 30 years and includes management positions in claims, sales, operations, product & development, and marketing. He received his bachelor’s degree from Union College and his master’s degree from Purdue University. Kurt F. Bock–PCI First Chair CEO COUNTRY Financial Kurt Bock is CEO of COUNTRY Financial. He joined the Illinois Agricultural Association (IAA) family of companies in 2003 as chief executive officer of the IAA Credit Union. He was appointed to the

Federal Advisory Committee on Insurance in 2015. He earned a bachelor’s degree of science from the United States Air Force Academy, a master’s degree in business administration from Southern Illinois University and a doctoral degree of philosophy in business administration from Saint Louis University. Pete G. McPartland–PCI Second Chair Chairman of the Board, president and CEO Sentry Insurance Pete McPartland is Chairman of the Board, president and CEO of Sentry Insurance. He joined Sentry in 2010. Prior to joining Sentry, McPartland served in a variety of executive positions with Fireman’s Fund, General Casualty, and Golden Eagle Insurance. He currently serves on the board of the Workers Compensation Research Institute. He is a graduate of the University of Florida. PCI is composed of nearly 1,000 member companies, representing the broadest cross section of insurers of any national trade association. PCI members write more than $183 billion in annual premium, 35 percent of the nation’s property casualty insurance. Member companies write 42 percent of the U.S. automobile insurance market, 27 percent of the homeowners market, 32 percent of the commercial property and liability market and 34 percent of the private workers compensation market.[IA]

Agents & Brokers of New York (IIABNY), said, "We are very pleased with the New York State Insurance Fund's decision to create a producer council. IIABNY and its member insurance brokers have strengthened their relationships with the State Fund over the past few years. The new council will formalize those relationships for the benefit of employers throughout New York State." Smith added, "On a personal note, I am very excited to represent New York insurance producers on the council. I look forward to a very productive relationship with the State Fund." These IIABNY members will serve on the council: • Jack Smith, Jr., CPCU, ARM, CIC, of William A. Smith & Son in Newburgh, and IIABNY chair of the board • John R. Costello, CIC, CRIS, of First Niagara Risk Management in Rochester, and at-large member of executive committee of the IIABNY • Valerie Geasor, CPCU, of Acrisure Agency doing business as The Signature BB Companies in Garden City Richard A. Poppa, IIABNY President and CEO, said that NYSIF Executive Director and CEO Eric Madoff indicated he was looking forward to working with the council and using it to continue to build the connection between brokers and the State Fund. Madoff also expressed appreciation to IIABNY for working with NYSIF on this project and others to improve service to their stakeholders. Working with IIABNY, NYSIF established the council for the purpose of obtaining guidance and reaction to NYSIF practices that impact producers. While the council does not have any governance or

NYSIF Creates Producer Council Body to include IIABNY members uDEWITT, N.Y.—The New York State Insurance Fund (NYSIF) today announced the creation of a Producers' Advisory Council. The move further establishes NYSIF's recognition of the important role that producers play in the placement of State Fund business. Jack Smith, Jr., CPCU, ARM, CIC, chair of the board of the Independent Insurance

policy authority, it serves as an important link between NYSIF and the producer community. Eight members will initially be selected to serve staggered three-year terms. Recommendations for council members were submitted by IIABNY and PIANY. The Council expects to have its first meeting by conference call in the next 60 days.[IA] INSURANCE ADVOCATE / October 31, 2016 29

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L AW R E N C E R O G A K

Notice of Claim Not Required For Suit Against Sheriffs Villar v. Howard Edited by Lawrence N. Rogak The Court of Appeals holds that a Notice of Claim is not a prerequisite for lawsuits against Sheriffs, because the New York State Constitution does not make Counties vicariously liable for the actions of a Sheriff. This remains so even in this case where Erie County had made a contractual agreement to act as the insurer for the Sheriff.— LNR

STEIN, J.: General Municipal Law § 50-e (1) (b) provides that service of a notice of claim upon a public corporation is not a condition precedent to the commencement of

Plaintiff alleges that, while being held for five days at the Erie County Correctional Facility in January 2010, he was sexually assaulted twice in a shower stall by an inmate. an action against “an officer, appointee, or employee of [the] public corporation” unless “the corporation has a statutory obligation to indemnify such person” under the General Municipal Law “or any other provision of law.” On this appeal, we are asked to determine whether Erie

Lawrence N. ("Larry") Rogak has been practicing insurance law since 1981. He has defended over 23,000 lawsuits and arbitrations and has represented over 75 different insurance companies and self-insured corporations. Lawrence N. Rogak LLC is listed in Best's Recommended Insurance Attorneys, a distinction that requires written recommendations from at least 12 insurance carriers. A 1981 graduate of Brooklyn Law School, Mr. Rogak has published more books and articles on insurance law than any other New York attorney in the field.

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County had a statutory obligation within the meaning of section 50-e (1) (b) to indemnify defendant, the Erie County Sheriff, such that a notice of claim was required. Because we agree with the Appellate Division that no such statutory obligation exists and we conclude that the complaint was otherwise sufficient to withstand a motion to dismiss, we affirm. Plaintiff alleges that, while being held for five days at the Erie County Correctional Facility in January 2010, he was sexually assaulted twice in a shower stall by an inmate. He commenced several actions following these incidents; the complaint in this action alleged that defendant Sheriff breached a duty to protect plaintiff from a reasonably foreseeable hazard of sexual assault, disregarded known risks of harm to inmates vulnerable to sexual abuse by other inmates at the facility, and had actual knowledge of the dangerous propensities of the inmate who assaulted plaintiff. Defendant moved to dismiss the complaint pursuant to CPLR 3211, arguing that plaintiff failed to serve a notice of claim naming defendant and that the complaint did not state a cognizable cause of action. Supreme Court granted defendant’s motion, dismissing the complaint because “no notice of claim was served nor was permission sought of the court to serve a late notice, prior to the expiration of the statute of limitations applicable to a sheriff.” The court reasoned that plaintiff was required to serve a notice of claim pursuant to General Municipal Law § 50-e because the County is statutorily obligated to indemnify defendant under “the County legislature’s resolution of May 16, 1985.” As relevant here, the court also concluded that the allegedly negligent acts were “inherently discretionary” and that, in any event, plaintiff failed to establish that defendant owed him a duty of care in the first instance. Upon plaintiff ’s appeal, the Appellate Division modified by reinstating the complaint except to the extent it alleged that defendant is vicariously liable for the negligence of his employees (126 AD3d 1297 [4th Dept 2015]). The court held that plaintiff was not required to serve a notice of claim prior to commencing this action because Erie County has no statutory obligation to indemnify defendant. The court further concluded that, pursuant to

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Correction Law § 500-c, defendant has a duty to safely “keep” the prisoners in the county jail, and rejected defendant’s argument that the complaint must be dismissed because his alleged negligence arises from discretionary acts for which he is entitled to governmental immunity, explaining that defendant’s argument presents a factual question that cannot be determined at the pleading stage. Addressing first whether a notice of claim was required, we conclude that the Appellate Division properly rejected defendant’s argument that a May 16, 1985 Erie County Resolution entitled “Liability Insurance for the Sheriff ’s Department” statutorily obligates the county to indemnify defendant Sheriff for purposes of General Municipal Law § 50-e (1) (b). In the “Whereas” clauses of the resolution, the County noted that the law enforcement liability insurance that it traditionally purchased for the Sheriff ’s Department had become prohibitively expensive, and that it was obligated to defend and indemnify the Sheriff ’s Department employees pursuant to a collective bargaining agreement and Public Officers Law § 18, “but the County cannot, under the New York State Constitution, be made responsible for the acts of the Sheriff.” Thus, the County resolved to act as insurer for the Sheriff, in exchange for an annual payment of $1, provided that the County’s obligation did not extend to punitive or exemplary damages and that the County would not be made responsible for the acts of the Sheriff or become a party in actions arising out of the acts of the Sheriff. The resolution, when read as a whole, makes clear that the County agreed to provide “Liability Insurance” for the Sheriff in exchange for consideration because “policies of law enforcement liability insurance paid for by the County” had become prohibitively expensive. In resolving to act as an insurer, the County recognized—as was commonly understood at the time—that it could not statutorily obligate itself to defend and indemnify the Sheriff, as it had agreed to do for the Sheriff ’s employees, under the New York State Constitution (see Rep of Law Rev Commn, 1981 McKinney’s Session Laws of NY at 2321 and n 47).[FN1] Absent the existence of any statutory obligation on the County to indemnify the Sheriff—as opposed to an 34 October 31, 2016 / INSURANCE ADVOCATE

Defendant Sheriff further argues that, to survive a motion to dismiss, the complaint would have to allege that he was present and failed to prevent the attacks on plaintiff, or had specific prior knowledge that plaintiff was particularly vulnerable to assault.

agreement to act as his insurer—the Appellate Division correctly ruled that service of a notice of claim was not required under General Municipal Law § 50-e. Defendant Sheriff further argues that, to survive a motion to dismiss, the complaint would have to allege that he was present and failed to prevent the attacks on plaintiff, or had specific prior knowledge that plaintiff was particularly vulnerable to assault. This Court rejected similar arguments with respect to state prison inmates in Sanchez v State of New York on the ground that the defendant sought to “improperly modify the test for foreseeability from what is reasonably to be perceived, to what is actually foreseen, and thus unduly circumscribe[] the standard of care normally due any party: reasonable care under the circumstances” (99 NY2d 247 [2002]). While the State is by no means an insurer of inmate safety or required to provide unremitting surveillance in all circumstances (see id. at 253, 256), we explained in Sanchez that, “having assumed physical custody of inmates, who cannot protect and defend themselves in the same way as those at liberty can, the State owes a duty of care to safeguard inmates, even from attacks by fellow inmates.” Inasmuch as “the Sheriff is [similarly] prescribed, by law, to safely keep inmates of the County Jail” (Adams v County of Rensselaer, 66 NY2d 725 [1985]; see Correction Law § 500-c; Kemp v Waldron, 115 AD2d 869, 870 [3d Dept 1985]), the rule set forth in Sanchez applies equally here. “Accepting the facts as alleged in the complaint as true, according plaintiff the benefit of every possible favorable inference...and considering the affidavit submitted by...plaintiff to remedy any

defects in the complaint” (Leon v Martinez, 84 NY3d 83, 87-88 [1994]), we conclude that the complaint adequately set forth a negligence claim to survive a CPLR 3211 (a) (7) motion to dismiss.[FN2] Finally, we agree with the Appellate Division that resolution of defendant’s argument that he is entitled to governmental immunity—an affirmative defense on which he bears the burden of proof (see Valdez v City of New York, 18 NY3d 69, 79-80 [2011])—is not appropriate at this stage of the proceedings. Defendant’s remaining arguments have been rendered academic by our decision. Accordingly, the order of the Appellate Division, insofar as appealed from, should be affirmed, with costs, and the certified question answered in the affirmative. ***************** Order, insofar as appealed from, affirmed, with costs, and certified question answered in the affirmative. Opinion by Judge Stein. Chief Judge DiFiore and Judges Rivera, Abdus-Salaam and Garcia concur. Judges Pigott and Fahey took no part.[IA] 2016 NY Slip Op 06944 Decided on October 25, 2016 Court of Appeals Stein, J.

Footnotes FN1: Although the constitutional bar has since been removed (see Bardi v Warren County Sheriff ’s Dept., 194 AD2d 21, 23 [3d Dept 1993]), Erie County has not adopted an obligation to indemnify the Sheriff or otherwise altered its 1985 resolution. FN2: Defendant’s argument that plaintiff was required to allege a special duty lacks merit (see Sanchez, 99 NY2d 247, 253 n 3 [2002]; Kemp, 115 AD2d 869, 870 [3d Dept 1985]).

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