Insurance Journal West 2019-01-07 by Insurance Journal

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National January 7, 2019 â&#x20AC;¢ Vol. 97 No. 1

IDEA EXCHANGE

NEWS & MARKETS

46 3 Reasons Recovery from Hurricane Florence Is Different from Hurricane Michael

8 SEC Actions Against Public Companies Surged in Second Half of 2018

48 When Words Collide Resolving Insurance Coverage and Claims Disputes

9 Safety Agency Streamlines Approval of Driverless Vehicles 9 UK Signs Agreement with UK on Post-Brexit Insurance Regulation

50 The Competitive Advantage How P/C Insurance Is Becoming Less Valuable

10 CoverWallet Opens Its Tech Platform, Carriers to Independent Agents

52 The Customer Is in Control 56 Ask the Insurance Recruiter 3 Female Agency Leaders on Opportunities in Insurance

SPECIAL REPORT 26 Agents of the Year 30 The Future of Agency Distribution

CLOSER LOOK 34 Not#YouToo: How Not to Become Part of the #MeToo Conversation, and Where to Look for Help If You Do

59 2019 Insurance Industry Meetings & Conventions Directory 66 Closing Quote: SignOn Once: The Solution to Password Security

INTERNATIONAL

National Departments 12 Declarations 12 Figures 58 My New Markets

4 | INSURANCE JOURNAL | JANUARY 7, 2019

44 Most UK Small Businesses Remain in the Dark About Cyber Risks

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Regional January 7, 2019 • Vol. 97 No. 1

Special Report 2019 Legislative Outlook 16 West 18 Midwest 20 South Central 22 Southeast 24 East

NEWS & MARKETS 38 Braking Bad Scooters Electric Scooters Have Been Burned, Buried and Butchered. They’re About to Be Regulated.

40 Mapping Marijuana First States to Legalize Marijuana See Rise in Car Insurance Claims, Research Shows

CLAIMS REPORT 42 States Surprised with Burst of Insurance Fraud-Related Legislation in 2018 Lawmakers Debated More Than 100 Fraud-Related Bills and Passed 33 into Law

Regional Departments 15 People 36 Business Moves

41 Bikers Reap Benefits State Laws to Curb Drivers’ Use of Cell Phones Appear to Be Saving Lives of Motorcyclists

6 | INSURANCE JOURNAL | JANUARY 7, 2019

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Opening Note Write the Editor: awells@insurancejournal.com

Millennial Business Owners Like Agents

M Publisher Mark Wells mwells@wellsmedia.com

EDITORIAL

SALES

Editor-in-Chief Andrea Wells awells@insurancejournal.com

West Sales Dena Kaplan (800) 897-9965 X115 dkaplan@insurancejournal.com

East Editor Elizabeth Blosfield eblosfield@insurancejournal.com

Romeo Valdez (800) 897-9965 X172 rvaldez@insurancejournal.com

Chief Content Officer Andrew Simpson asimpson@insurancejournal.com

Southeast Editor/MyNewMarkets Amy O’Connor aoconnor@insurancejournal.com South Central Editor/ Midwest Editor Stephanie K. Jones sjones@insurancejournal.com West Editor Don Jergler djergler@insurancejournal.com International Editor L.S. Howard lhoward@insurancejournal.com Columnists Chris Burand, Mary Newgard, Bill Wilson Contributing Writers Michael Foy, Troy Korsgaden, Holly Tachovsky IJ ACADEMY OF INSURANCE Director Patrick Wraight pwraight@ijacademy.com

ADMINISTRATION

Chief Financial Officer Mark Wooster mwooster@wellsmedia.com

MARKETING

Chief Marketing Officer Julie Tinney (800) 897-9965 X148 jtinney@insurancejournal.com

South Central Sales Mindy Trammell (800) 897-9965 X149 mtrammell@insurancejournal.com Southeast and East Sales (except for NY, PA and CT) Howard Simkin (800) 897-9965 X162 hsimkin@insurancejournal.com Midwest Sales Lisa Whalen (800) 897-9965 X180 lwhalen@insurancejournal.com East Sales (NY, PA and CT only) Dave Molchan (800) 897-9965 X145 dmolchan@insurancejournal.com Advertising Coordinator Erin Burns (619) 584-1100 X120 eburns@insurancejournal.com Insurance Markets Manager Kristine Honey (619) 584-1100 X132 khoney@insurancejournal.com Social Media Manager Ly Short (619) 890-7735 Lshort@insurancejournal.com Classifieds, Jobs, Agencies Wanted/For Sale Sr. Sales & Marketing Coordinator Kelly De La Mora (800) 897-9965 X125 kdelamora@insurancejournal.com

DESIGN/WEB

Marketing Director Derence Walk dwalk@insurancejournal.com

Chief Technology Officer/ Chief Innovation Officer Joshua Carlson jcarlson@insurancejournal.com

Marketing Administrator Gayle Wells gwells@insurancejournal.com

V.P. of Design Guy Boccia gboccia@insurancejournal.com

NEW MEDIA

Senior Web Developer Chris Thompson cthompson@insurancejournal.com

New Media Producer Bobbie Dodge bdodge@insurancejournal.com Videographer/Editor Ashley Waldrop awaldrop@insurancejournal.com

CIRCULATION

Circulation Manager Elizabeth Duffy eduffy@wellsmedia.com

Web Developer Jeff Cardrant jcardrant@insurancejournal.com Web Developer Terrance Woest twoest@wellsmedia.com

illennial business owners are more likely to work with insurance agents than those in other generations. What’s more, they’re seeking agent counsel on a variety of financial issues, according to Nationwide’s fourth annual Business Owner Survey. The insurer sees the trend driven, in part, by caution in the wake of the 2008 financial crisis. “Millennial business owners came of age during the 2008 recession — a time of economic crisis marked by uncertainty in financial markets, significant job reductions across the country and a sudden downturn in the real estate market,” Amy Shore, president of Nationwide’s P&C Sales and Distribution, said in prepared remarks. “For that reason, it’s not hard to understand why this generation is more motivated than generations that came before them to proactively take steps that satisfy their need for stability.” With that in mind, Shore said that “seeking professional advice intended to position a business for success over the long-term is exactly what business owners stand to gain by working with an agent.”

All generations most often said that they work with an agent because they trust in the guidance and expertise that one can bring. Nationwide found that 69 percent of millennial business owners work with an insurance agent, versus 66 percent for baby boomers and 59 percent of Gen Xers. All generations most often said that they work with an agent because they trust in the guidance and expertise that one can bring. About 37 percent of millennials also use agents for guidance on retirement, versus 26 percent of boomers. Twenty-five percent of millennials rely on agents for expertise on banking, compared to 4 percent of boomers. The survey found that 21 percent of millennials rely on agents for succession planning, compared to 9 percent of boomers. FOR QUESTIONS REGARDING SUBSCRIPTIONS: The survey also found that for those who Call: 855-814-9547 work with an insurance agent, 41 percent said Outside the U.S., call 847-400-5951 or you may subscribe or change your address online at: they seek guidance and expertise, but only 25 insurancejournal.com/subscribe percent talk to agents about practical issues Insurance Journal, The National Property/Casualty Magazine (ISSN: 00204714) is published semi-monthly by Wells Media Group, Inc., 3570 Camino del Rio North, Suite 200, San Diego, CA such as level of coverage. 92108-1747. Periodicals Postage Paid at San Diego, CA and at additional mailing offices. SUBSCRIPTION RATES: $7.95 per copy, $12.95 Business owners choose an insurance agent per special issue copy, $195 per year in the U.S., $295 per year all other countries. DISCLAIMER: While the information in this pubmost often due to price, followed by coverage/ lication is derived from sources believed reliable and is subject to reasonable care in preparation and editing, it is not intended to be legal, accounting, tax, technical or other professional offerings and then customer service. Trust and advice. Readers are advised to consult competent professionals for application to their particular situation. Copyright 2019 Wells guidance are reasons cited, but reputation is Media Group, Inc. All Rights Reserved. Content may not be photocopied, reproduced or redistributed without written permission. Insurance Journal is a publication of Wells Media Group, Inc. also an important factor, the survey found. POSTMASTER: Send change of address form to Insurance Journal, The Nationwide findings, via Edelman Circulation Department, PO Box 708, Northbrook, IL 60065-9967 Intelligence, involved a 20-minute online survey ARTICLE REPRINTS: For reprints of articles in this issue, contact: Kelly De La Mora at 1-800-897-9965 ext. 125 or kdelamora@wellsmedia.com of about 1,000 U.S. Visit insurancejournal.com/reprints/ for more information. business owners.

Andrea Wells Editor-in-Chief INSURANCEJOURNAL.COM

JANUARY 7, 2019 INSURANCE JOURNAL | 7

National News & Markets

Federal Report SEC Actions Against Public Companies Surged in Second Half

he number of new U.S. Securities and Exchange Commission (SEC) enforcement actions against public companies and subsidiaries jumped substantially in the second half of fiscal year 2018. According to a report by New York University’s Pollack Center for Law & Business and Cornerstone Research, the SEC filed 55 new actions against public companies and subsidiaries in the second half of FY 2018, reversing a decline in filings that began in the second half FY 2017 and continued into the first half of FY 2018. The data in the report show that despite the lower level of activity in the first half of the year, the record number of cases filed in second half 2018 brought overall enforcement activity broadly in line with recent trends. For all of FY 2018, which ended September 30, the SEC filed a total of 71 new enforcement actions against public companies and subsidiaries, compared to 65 in FY 2017. 8 | INSURANCE JOURNAL | JANUARY 7, 2019

Monetary settlements in public company and subsidiary actions totaled over $2.4 billion in FY 2018 — more than the total in any fiscal year since at least FY 2010, and an 87 percent increase from FY 2017. “The SEC made a dramatic comeback in the second half of the 2018 fiscal year, filing a record-setting 55 new enforcement actions against public companies and subsidiaries — the most in any half-year covered by SEED,” said Stephen Choi, professor at the NYU School of Law and director of the Pollack Center for Law & Business. “While we often see end-of-year upticks, the number of actions filed in the second half of fiscal year 2018 was more than triple the number filed in the first half of the year.” The last quarter of FY 2018 saw the highest number of public company and subsidiary actions that also named individuals as defendants in a single quarter tracked by SEED. The SEC continued to bring the substantial majority (85 percent) of actions

against public companies and subsidiaries as administrative proceedings in FY 2018. In contrast, the majority (55 percent) of actions without public companies or subsidiaries were filed as civil actions in FY 2018. Almost half (45 percent) of public company and subsidiary actions involved Broker Dealer or Investment Advisor/ Investment Company allegations. This is consistent with the SEC’s focus on retail investors and the launch of its Retail Strategy Task Force at the end of FY 2017. More than half (61 percent) of public company and subsidiary defendants cooperated with the SEC during the fiscal year. This marked the fourth fiscal year in a row in which more than half of public company and subsidiary settlements noted some form of cooperation. The SEC imposed monetary penalties in nearly all (89 percent) of its FY 2018 settlements with public companies and subsidiaries. This is consistent with the FY 2010–FY 2017 average of 84 percent. INSURANCEJOURNAL.COM

U.S. Signs Agreement with UK on Post-Brexit Insurance Regulation

Safety Agency Streamlines Approval of Driverless Vehicles By David Shepardson

he U.S. auto safety regulator said it is speeding up the process for reviewing whether automakers can deploy self-driving vehicles without devices such as brakes and steering wheels. Automakers must currently meet nearly 75 auto safety standards, many of them written with the assumption that a licensed driver would be able to control the vehicle using traditional human controls. The National Highway Traffic Safety Administration (NHTSA) said it issued a final regulation streamlining the review process. NHTSA eliminated a requirement that calls for the agency to determine a petition is complete before publishing a summary for public comment. Deputy NHTSA Administrator Heidi King said in a statement the “rule improves both the efficiency and transparency of the process to focus on the safety review.” Under the law, automakers can petition for an exemption for up to 2,500 vehicles for vehicle safety standards as long as they are at least as safe as existing vehicles. In January, General Motors Co. filed a petition with NHTSA seeking an exemption to use fully automated vehicles as part of a ride-sharing fleet it plans to deploy INSURANCEJOURNAL.COM

in 2019. NHTSA has not yet declared the GM petition complete and the agency did not immediately say when it will publish a summary of the plan. Alphabet Inc.’s Waymo unit launched a limited autonomous ride-hailing service in Arizona in December. Unlike GM, Waymo’s vehicles have human controls. NHTSA also said it is seeking comment on the use and integration of vehicle communications technologies. It said these technologies could improve motor vehicle safety and efficiency as well as support cooperative vehicle automation concepts. The U.S. Transportation Department said it intends to “maintain the priority use of 5.9Ghz spectrum for transportation safety communications” even as some Federal Communications Commission members want to designate the spectrum for personal wireless communications. In December 2016, the Obama administration proposed requiring all new cars and trucks to be able to “talk” to one another using short-range wireless technology to potentially avoid tens of thousands of crashes annually. The Trump administration has not acted on the proposal.

he U.S. Treasury and U.S. Trade Representative have officially signed an agreement with the United Kingdom to provide insurance regulatory continuity after Britain exits the European Union. The agreement is similar to one the U.S. signed with the European Union in 2017 and affirms the U.S. state-based system of insurance regulation and increases opportunities for U.S. insurers, according to the Trump Administration. U.S. Trade Representative Robert Lighthizer said the deal “will allow U.S. insurers and reinsurers to maximize business opportunities and cut red tape for their cross-border operations.” While the U.S insurance community is split over the wisdom of U.S. covered agreements with foreign countries, with state regulators worrying they infringe on their authority, critics have been somewhat muted since this latest pact mirrors the U.K.- EU agreement that is already in place. The National Association of Insurance Commissioners (NAIC), which represents state insurance regulators and has been one of the strongest critics of covered agreements, did not object to this pact. “As we have previously noted, the UK is an important market for the U.S. and is currently included in the existing U.S./EU covered agreement," the group said in a statement. “Given these unique circumstances, despite our concerns with the covered agreement mechanism, we do not object to its use in this instance to replicate consistent treatment for the UK,” the organization said.

National News & Markets

Technology CoverWallet Opens Its Tech Platform, Carriers to Independent Agents

By Susanne Sclafane “

e give you a login and password, and then every time that you talk to a customer, you can use our platform to sell faster, simpler, quicker,” said CoverWallet CEO Inaki Berenguer, referring to insurance agents he hopes will use his tech-savvy small business insurance program that includes access to CoverWallet’s carriers. “They [agents] can get multiple quotes from one quick application, buy [coverage] online, full end-to-end experience, no cost for them, access to top carriers…Very simple.”

Asked about the “no cost” part, Berenguer said that if an agent sells a policy, CoverWallet keeps part of a commission that is highly competitive with the industry, with the agent keeping the majority. CoverWallet, which has been on a mission to “reinvent insurance for small business” customers, only recently began offering its platform to insurance agencies. About 16 agencies are already using it and another 100 are on a waiting list, according to Berenguer. CoverWallet makes it easy for small businesses to understand, buy and manage insurance policies — ranging from simple business owners policies to more compli-

cated directors and officers liability covers. Berenguer demonstrated the quote process on the original direct-to-customer platform that spawned agents’ interest, taking seconds to get a quote for a full-service restaurant with a Queens, N.Y. ZIP code. Accessing the “Advice” section of the CoverWallet website first, he input the industry, number of employees and revenues — about a 20 second process — and instantly saw the average premium paid by similar businesses for a range of small business coverages and indications of popular purchases (100 percent buy general liability, 80 percent buy BOPs instead, etc.) Checking off the GL coverage for free

Digital Briefs Travelers Eyes Wearables

The Travelers Companies has partnered with contractor company Gilbane, and Triax Technologies, a provider of Internet of Things (IoT) construction technology, to explore the potential safety benefits of wearable devices. Over 20 months, Travelers will review data collected from Triax’s Spot-r IoT devices, including those used at a Gilbane construction site in New York City. More than 130 employees will use the Spot-r Clip, a waist belt device that detects worker falls and provides real-time notification of worker location and other safety incident

10 | INSURANCE JOURNAL | JANUARY 7, 2019

details. It also allows workers to easily report hazards or incidents. In addition, they will deploy Spot-r EquipTags that monitor equipment location and usage and Spot-r EvacTags that allow managers to trigger high-decibel, highly visible emergency alarms to workers. Rick Keegan, president of Construction at Travelers, said keeping workers safe is a priority the insurer. He said this project will help Travelers “gain valuable data-driven insight.”

Progressive Adds Online Cyber

Progressive Insurance is now offering small business owners the ability to compare, quote and buy cyber insurance online, alongside other coverages, through CyberPolicy, an online cyber insurance marketplace. CyberPolicy works with Progressive, Chubb, Hiscox,

SecurityScorecard, UpGuard and other firms to develop bundled cybersecurity offerings to help small businesses against cyberattacks. CyberPolicy is owned by CoverHound.

JLT Pact with Pact

Reinsurance broker JLT Re North America is partnering with Pact Insurance to develop digital insurance products for mobility risks. Pact is a managing general agency in San Francisco that offers low cost, on-demand auto insurance in Ohio that customers can buy and manage from their smartphones. “Pact has a level of data and underwriting granularity that is rare amongst new entrants. Pact takes data to another level in its plans to distribute to niches of underserved risks,” said Gregg Holtmeier, insurtech practice leader for JLT Re.

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West Takeaways from the California Wildfires - W2 More Pot Products Passing Safety Tests - W6 Did PG&E Falsify Pipeline Safety Record? - W10

BevMo in California Warns of Customer Credit Card Data Breach

evMo warned that a data breach may have allowed a hacker to steal credit card numbers and other information from more than 14,000 customers who used the alcohol-sellerâ&#x20AC;&#x2122;s website. The Concord, Calif.-based company notified the California attorney generalâ&#x20AC;&#x2122;s office that someone was able to plant malicious

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computer code on its checkout page. BevMo says the code was designed to capture information from orders placed

between Aug. 2 and Sept. 26. The company says the hacker potentially could have captured customer names, phone numbers and addresses along with credit and debit card numbers and security codes. BevMo said the code was removed and an investigation is under way.

JANUARY 7, 2019 INSURANCE JOURNAL | WEST | W1

West News & Markets

California Wildfires 5 Lessons to Take Away from the California Wildfires

A member of the Sacramento County Coroner’s office looks for human remains in the rubble of a house burned at the Camp Fire, Monday, Nov. 12, 2018, in Paradise, Calif. (AP Photo/John Locher) By Don Jergler

he California wildfires of 2018 were devastating, burning hundreds of thousands of acres, costing numerous lives and destroying thousands of properties. The California Department of Insurance in early December put the official tally for insured losses from the W2 | INSURANCE JOURNAL | WEST JANUARY 7, 2019

year’s major California wildfires at $9.05 billion. That figure is likely to go higher. For now the best thing the insurance industry can do is pay claims, and comfort insureds. But in the long run, the industry and the state can learn a few lessons from the fires, according to Michael Brown, vice president with Golden Bear Insurance Co. The long-time industry veteran spoke

with Insurance Journal about the impact of the fires, including the impact on surplus lines and the FAIR Plan, the state’s property insurer of last resort. Brown offered up five lessons we can all learn from these events. This has been edited for brevity and clarity.

No. 1: I think the first thing we’re learn-

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Michael Brown ing is the ability of the residual market in California to respond. The California FAIR plan is being, I guess the term would be, inundated with new applications following the severe wildfire seasons, both in 2018 and 2017, which are driving admitted markets out of the brush-exposed urban wildland interface homeowners business. In addition to the FAIR plan we have a number of non-admitted markets … very active in that space. That is a great example of a system working the way it’s supposed to. Admitted markets have, pardon the pun, been burned by this business, and have pulled away a little bit and the FAIR plan and the surplus markets are stepping in to fill the void.

‘I think the first thing we’re learning is the ability of the residual market in California to respond.’ No. 2: I think it’s a great opportunity for California in particular to revisit W4 | INSURANCE JOURNAL | WEST JANUARY 7, 2019

building codes and requirements for more fire resistant construction in the wildland urban interface. There are areas that don’t necessarily have any professional fire departments nearby, there’s going to be delays in getting fire support there … so making each home as able to withstand heat and fire as possible might help mitigate some of these losses that we’re talking about. No. 3: I think it’s a great opportunity for us to learn a little something about forestry management. In the last 30 or 40 years we have done a great job of reducing logging with an emphasis on protecting the environment and keeping sustainable growth in our forest. The pendulum may have swung a little bit too far because we have, depending on who you talk to, from a couple million to many million dead trees in forests in California. Now, a live tree burns relatively slowly — it’s hard to get the fire started — a dead tree burns like a match. These dead, unharvested trees are creating an opportunity for a fire to really get a foothold, and if there happens to be a number of them in a small area, build up enough heat and enough momentum to catch the live trees nearby on fire. So I think the takeaway here would be for the U.S. Department of Forestry, and California’s Department of the Interior, Agriculture, or whoever it is that’s in charge of that, to step in and say, “We need some responsible harvesting of dead fall and dead standing trees just to help minimize the fuel load and maybe slow down some of these wildfires that they’re spreading.” No. 4: I think the fourth point, and quite possibly the most serious out of the group, is for the insurance carriers to really monitor their spread of risk. What used to be considered safe from conflagration, these would be homes in some sort of a community with hire hydrants and a fire department, such as Paradise, in California. We’re now seeing with the

severity of wildfire in the last few years, these small communities can be overwhelmed and virtually destroyed by a wildfire, which is just moving faster and hotter than even a paid, professional fire service with hydrants and access to water can prevent. We saw a company not too far from where our company lives, Merced Property & Casualty Co., get themselves in over their heads with too many losses from the Camp Fire around Paradise. We’ve also seen in an AM Best update ... another carrier has had their outlook turned to negative due to losses from the wildfires exceeding expectations. So spreading risk, making sure that as a carrier you’re not taking on more exposure than you can reasonably handle, is gonna be a very important lesson to carry forward for all of us.

‘‘I think it’s a great opportunity for us to learn a little something about forestry management.’’ No. 5: I think the last thing I want leave you with goes out to the agents and brokers out there — there’s still an awful lot of people with homes and businesses in the brush exposed urban wildand interface areas who need insurance. It’s not going to be as easy to place that insurance … so be ready to dig in a little bit, it’s going to be a little bit harder work to find the right coverage and the right carrier. These people need the insurance. The insurance is out there, it’s just going to take a little extra effort to connect the consumer with the right insurer.

Audio Resource Listen to full audio interview at www. InsuranceJournal.tv. INSURANCEJOURNAL.COM

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West News & Markets

Marijuana More Marijuana Products in California Passing Safety Tests

By Michael R. Blood

higher percentage of California marijuana products are passing strict safety tests, but the sudden closing of a lab that state authorities found wasn’t correctly checking for pesticides has raised new questions about the system intended to protect the purity and potency of legal cannabis. California broadly legalized marijuana at the start of the year, and mandatory testing began in July 1. During the first two months the failure rate was about 20 percent, but state data collected through November showed improvement, about 14 percent of nearly 24,000 products were blocked from store shelves by tests. Cannabis-infused cookies, candies and tinctures continued having the most W6 | INSURANCE JOURNAL | WEST JANUARY 7, 2019

trouble in test labs: About 26 percent were rejected, though that also was an improved rate compared to the July-August period, when one-third failed. “With any news rules, there’s always going to be a period of adjustment that takes place,” said Alex Traverso, a spokesman for the state Bureau of Cannabis Control. “The cannabis industry in California adapts pretty quickly, and I think that’s what we’re seeing with these lower fail rates in testing. That’s encouraging.” The integrity of the testing program was shaken last month when Sacramentobased Sequoia Analytical Labs surrendered its license after state regulators found it was conducting faulty tests for pesticides, apparently since the program kicked off at midyear.

State regulators asked retailers and distributors to recall any batches tested by the company after July 1. Any batches returned by consumers must be destroyed. Products pulled back from a company’s inventory can be retested with state permission, or destroyed. But it’s likely many of those products already have been consumed. It wasn’t immediately clear how much cannabis was cleared by the lab for sale, but it’s almost certainly a large amount, covering five months of testing. The state has issued only a few dozen lab licenses. State regulators declined to comment on specifics of the case, other than to confirm the company no longer holds a license to test cannabis in the state. In a statement posted on its website,

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the company blamed the flawed tests on a faulty instrument that failed to check for 22 of 66 required pesticides. The company said it terminated its lab director who “knew about this and was secretly falsifying the results” since July 1. The company said it is seeking to have its license reinstated. The lab did not return a phone call or email from The Associated Press seeking comment. Swetha Kaul, chief scientific officer at Santa Ana-based testing company Cannalysis who sits on the board of the California Cannabis Industry Association, said there are concerns that some companies might not be getting sufficient oversight from regulators. At this point, it remains unclear how one company was able to falsify test results for so long. “We need more labs. We need better labs,” she said. “We have bad actors, just like every other section of the industry.” In the high-stakes cannabis market, it’s obvious that testing companies — the pathway to the legal market — could be targets for abuse, either from unscrupulous producers eager to pay for favorable results, or labs willing to sweeten results to attract more business.

There have been scattered reports of apparent problems. In Washington state in 2017, regulators suspended certification of a pot lab after auditors found an unusually low number of samples had been failed in certain cases. The company never regained certification. California for months has been reviewing a vast set of regulations that govern the legal market, including setting standards for testing labs. Those revised rules are expected to be finalized early this year, replacing temporary ones that have been guiding businesses since broad legal sales kicked off Jan. 1. Josh Drayton of the California Cannabis Industry Association said it’s an open secret in the industry that companies have been known to pay for favorable test results. He said California needed rigorous rules to keep out shady operators. “We don’t want to create a pay-to-play system with our testing labs,” said Drayton, who was unfamiliar with details of the Sequoia case. “We do need to make sure we get standard operating procedures.” The state has been facing pressure to revamp testing requirements that have been alternately described as going too far or not far enough. Others say the tests

add too much to the cost for consumers, providing another reason for customers to turn to a black market that still flourishes in California. Current rules require all cannabis products clear a range of tests at labs before reaching consumers, from ensuring THC, the compound that gives pot its high, is distributed evenly in chocolate bars to making sure buds have not been contaminated by fuzzy blankets of mold. From July 1 through Nov. 30, labs tested 23,864 batches of various products, and 3,373 failed. The test results through November showed that about 90 percent of buds are cleared for sale, suggesting a mostly clean market for growers. The biggest reason for failure is improper claims on labels, such as overestimating a product’s potency, which blocked over 2,100 products from sale. The California Growers Association, an industry group, is among those concerned the state is forcing growers and manufacturers to hit too tiny a target when gauging levels of THC. Pesticides, meanwhile, accounted for over 700 rejections in various products. Copyright 2018 Associated Press. All rights reserved.

California’s 376 Fatal Occupational Injuries in 2017 Equals Previous Year, Report Shows

he California Department of Industrial Relations issued a report last month showing that 376 Californians died on the job in 2017, the same as in 2016. California’s workplace fatality rate remains stable with slight fluctuations over the past eight years, while on a national level the rate of fatalities fell from 3.6 to 3.5 per 100,000 workers, according to the DIR. W8 | INSURANCE JOURNAL | WEST JANUARY 7, 2019

There were were 388 fatal on-the-job injuries in 2015, 344 in 2014, and 396 in 2013, the DIR report shows. The DIR data comes from the Census of Fatal Occupational Injuries, which is conducted annually in conjunction with the U.S. Bureau of Labor Statistics. Figures for 2017 are the latest numbers available.

Key findings from the latest census in California include: • 22 percent of California workplace deaths identified in 2017 were attributed to trips, slips and falls; with 88 percent of those deaths involving falls to a lower level. • Assaults and violent acts in the workplace accounted for one-of-five workplace deaths in the state in 2017. • 37 percent of California workplace deaths identified in 2017 occurred in transportation-related incidents. INSURANCEJOURNAL.COM

SOME CARRIERS DO IT ALL. THIS IS ALL WE DO. We protect the people who make California work. For more than 100 years, we’ve been a reliable market and one of the most stable providers of workers’ compensation insurance. And no matter how the California workers’ compensation market fluctuates, we’re here when you need us. It’s what we do.

statefundca.com

West News & Markets California Regulators Say Utility Falsified Pipeline Safety Record

egulators have accused one of California’s largest utilities of falsifying safety documents for natural gas pipelines for years following its criminal conviction and multimillion-dollar fine for a pipeline explosion that killed eight people near San Francisco. The California Public Utilities Commission said an investigation by its safety and enforcement division found Pacific Gas & Electric Co. lacked enough employees to fulfill requests to find and mark natural gas pipelines. Because of the staff shortage, PG&E pressured supervisors and locators to complete the work, leading staff to falsify data from 2012 to 2017, regulators said. The company “had common knowledge among its supervisors that locators falsified data,” the commission said. “Utility falsification of safety related records is a serious violation of law and diminishes our trust in the utility’s reports on their progress,” commission President Michael Picker said in a statement. “These findings are another example of why we are investigating PG&E’s safety culture.” PG&E said it has hired more employees and improved its pipeline tracking system. “We’re committed to accurate and thorough reporting and record-keeping, and we didn’t live up to that commitment in this case,” utility spokesman Matt Nauman said in a statement. A U.S. judge fined the utility $3 million

after it was convicted of six felony charges for failing to properly maintain a natural gas pipeline that exploded in 2010 and wiped out a neighborhood in suburban San Bruno. Regulators also fined PG&E $1.6 billion for the blast. “This is the period immediately following the 2010 San Bruno gas explosion and fire that resulted in eight fatalities, numerous injuries and damage to property,” the commission said in its report. “This commission would expect that after such a tragedy, caused by multiple proven violations of law, PG&E would have sought to vigorously enhance and increase its effectiveness in all aspects of its gas safety.” The investigation was forwarded last month to a judge, who will hear testimony

on the findings and will allow PG&E to provide evidence that it didn’t violate safety laws. The utility that provides service to millions of people throughout Northern California also is under scrutiny for its role in igniting wildfires. The California Department of Forestry and Fire Protection found that PG&E equipment was responsible for starting 16 wildfires in 2018. While a cause has not yet been determined for the massive fire that wiped out the town of Paradise and killed at least 86 people last month, PG&E equipment is being scrutinized. A number of victims have sued the utility, alleging negligence. Copyright 2018 Associated Press. All rights reserved.

Grocer Bringing Unmanned Delivery to Arizona Customers

uro and grocery chain Kroger are teaming up to bring unmanned delivery service to customers. The companies said in mid-December that Nuro’s unmanned vehicle, the R1, will be added to a fleet of autonomous Prius vehicles

that have run self-driving grocery delivery service in Scottsdale, Ariz., with vehicle operators since August. The R1 can travel on public roads and has no driver or passengers. It only transports goods. Delivery service via the R1 or Prius vehicles is

W10 | INSURANCE JOURNAL | WEST JANUARY 7, 2019

available for a single Fry’s Food Stores in Scottsdale. Customers will pay a flat fee of $5.95, with no minimum order requirement. Shoppers can place their orders immediately and request same-day or next-day delivery. Delivery service is available seven days a week. Copyright 2018 Associated Press. All rights reserved. INSURANCEJOURNAL.COM

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West News & Markets 20 Indicted in Washington for Staging Crashes to Defraud Auto Insurers

wenty people have been indicted by a grand jury in Spokane, Wash., for allegedly staging vehicle crashes to defraud insurance companies. Defendants are accused of staging a series of automobile, boating, pedestrian/vehicle and other accidents in Washington, Idaho, Nevada and California between 2013 and 2018. Most of the crashes were two-vehicle collisions on remote roads at night where there were no witnesses other than the occupants of the intentionally crashed vehicles. Most people named in the indictment are Spokane-based.

Court documents say the defendants staged 33 crashes, collecting payment for property damage, wage loss and bodily injury. The documents say in some cases conspirators would urinate in a bottle, which they would pour on their clothing to make it appear they lost consciousness. Copyright 2018 Associated Press. All rights reserved.

AM Best: Negative Rating Implications from Wildfires for California Capital and Subsidiaries

M Best has placed under review with negative implications the Financial Strength Rating of A(Excellent) and the Long-Term Issuer Credit Ratings of “a-” of California Capital Insurance Co. and its subsidiaries Eagle West Insurance Co., Monterey Insurance Co. and Nevada Capital Insurance Co. The rating actions follow management’s discussion with AM Best regarding the potential losses related to the Camp and Woolsey wildfires in California in November.

“Based upon current estimates, gross ultimate losses will far exceed losses previously contemplated in Capital’s ratings,” AM Best stated in an announcement on the rating change. The status reflects the need for AM Best to fully assess the financial and operational impacts of the wildfire activity and Capital’s response to these events. Despite the expected gross and net losses, risk-adjusted capital currently remains supportive of the ratings, according to AM Best.

W12 | INSURANCE JOURNAL | WEST JANUARY 7, 2019

Workers’ Lawsuit Against Washington Farm Given Class-Action Status

U.S. District Court judge in Seattle, Wash., has certified a class-action lawsuit on behalf of some 600 Mexican workers who have alleged labor abuses at a Whatcom County blueberry farm. The suit alleges the company violated the Trafficking Victims Protection Act, which prohibits forced labor, through threats and implied threats that the workers would be sent to Mexico if they complained or did not meet production standards. The suit’s other allegations include that Sarbanand Farms breached its contract with workers by providing

low-quality food and violated state law. The December ruling by U.S. District Judge John Coughenour sets the stage for a jury trial. Tom Pedreira, the company’s attorney, noted that the ruling is not a finding of wrongdoing, and company “takes seriously its responsibilities with respects to working conditions and worker safety.” Copyright 2018 Associated Press. All rights reserved.

Wyoming Boss Required Scientology for Employee, Suit Alleges

former employee of a Wyoming occupational therapy office says the owner of the business pressured her to take Scientology courses as a condition of her employment. Julie A. Rohrbacher filed a lawsuit in federal court Dec. 17 against Teton Therapy, a group of physical and occupational therapy offices in four Wyoming locations. Rohrbacher worked at an office in Lander. She claims in court documents that owner Jeff McMenamy declined to

promote her and then forced her to resign in 2013, after she refused to enroll in Church of Scientology courses. She sued under the Civil Rights Act of 1964, which prohibits religious harassment at work. Scientology is a church founded by science fiction writer L. Ron Hubbard in the early 1950s. McMenamy said neither he nor his attorney had seen filings and could not comment on the lawsuit. Copyright 2018 Associated Press. All rights reserved. INSURANCEJOURNAL.COM

'We are making it easy for them [agents] to leverage technology without needing to build their own complex integrations or to have direct relationships or appointments with carriers.'

CoverWallet CEO Inaki Berenguer in his New York office quotes prompted more questions, many with pre-filled answers, and that generated actual quotes from three carriers in just over one minute. Then, he selected a carrier and limits, answered a question about how he wanted to pay — in full or in monthly payments from a credit card — and the system returned a policy, certificate of insurance and proof of payment. “Agents are an integral part of small business insurance, and we are making it easy for them to leverage technology without needing to build their own complex integrations or to have direct relationships or appointments with carriers,” said Aman Khaira, vice president of product at CoverWallet. Agents who are onboarded to

INSURANCEJOURNAL.COM

CoverWallet for Agents act as subproducers of CoverWallet and gain access to all the carriers that CoverWallet has on the platform, including Chubb, Starr, CNA and AmTrust. “As a result, they will be able to generate quotes and bind policies without needing direct appointments from the carriers. In order to be onboarded, they are required to be licensed in the state(s), sign an agreement with CoverWallet, and have $1 million in E&O coverage,” said Hally Peck, director of communication at CoverWallet. According to Berenguer, there are 40,000 agencies, in the U.S. and a half million agents that “unfortunately don’t have access to the same tools that we have. And they don’t have the resources to invest in technology.”

Registering with CoverWallet for Agents can change that, he believes. In essence he says his company is not an insurance company; it’s a technology company. “I think some other competitors are insurance companies that are trying to tech-enable business,” he said, noticing that experience in data, design and technology are some of the things that differentiate CoverWallet from Insureon, CoverHound and other insurtechs serving the small business market. Since launching the direct-to-customer site in 2016, CoverWallet has received more than $30 million in funding from investors including Union Square Ventures, Index Ventures, Two Sigma, and Foundation Capital, as well as Zurich Insurance Group and Starr Companies.

JANUARY 7, 2019 INSURANCE JOURNAL | 11

Figures

$19 Million

The Connecticut Foundation Solutions Indemnity Company — the new entity charged with overseeing the distribution of state funds to help Connecticut homeowners with crumbling foundations - has finally received a long-awaited $19 million. The captive insurance company had hoped to receive $20 million more in state bonding this year, but the Dec. 7 meeting of the State Bond Commission was canceled. It will now be up to Democratic Gov.-elect Ned Lamont, who will oversee the commission, to decide when that second batch of money will be released. He takes office in January.

$712,290 The value of a single-engine Cessna aircraft destroyed in a 2015 crash in Arkansas that a federal lawsuit says was caused by a drill bit left in a magneto, a self-contained electrical generator which fires the engine spark plugs, when it was being repaired. The complaint was filed in U.S. District Court in Kansas against Textron Aviation in U.S. by MidContinent Aircraft Corp. of Missouri and its insurance company. It alleges the misplaced drill bit caused the crash and that Cessna’s parent company Textron refuses to pay for the loss of the 2014 Cessna T206H Stationair TC aircraft.

Declarations Caution Advised

“I encourage New Yorkers to exercise caution when disclosing sensitive personal information.” — New York Attorney General Barbara D. Underwood warned in a press release announcing that a Manhattan man has been convicted of engaging in two separate identity theft schemes between 2013 and 2014 and has been sentenced to prison. An investigation by Underwood’s Auto Insurance Fraud Unit revealed that Sharif King stole the personal identifying information of employees and prospective employees, and then fraudulently used their identities to steal an $8,000 insurance settlement, buy a $58,000 2015 Mercedes Benz Sprinter passenger van and attempt to take out a $29,000 loan.

Emerging Problem

“Since this problem emerged, we have been committed to finding a solution that

will assist our customers dealing with this unfortunate and complex issue.”

— Michael Klein, executive vice president and president of personal insurance at Travelers, said in a press release announcing that The Travelers Companies Inc. has established the Travelers Benefit Program, a $5 million fund to assist customers in repairing homes with crumbling foundations in Northeast Connecticut. To help homeowners with the repair costs associated with pyrrhotite-related damage, the state recently created the Connecticut Foundations Solutions Indemnity Company (CFSIC). As some repairs may cost more than the CFSIC will cover, Travelers created the fund to provide additional financial support for its customers.

Optimism, Despite Challenges

“Despite the challenges, the reasons for optimism are clear: business is growing and jobs are relatively abundant.”

— Mike Seling, vice president of Business Development and Regional Operations, Accident Fund Insurance Company of America, comments after the release of a

12 | INSURANCE JOURNAL | NATIONAL JANUARY 7, 2019

survey commissioned by Accident Fund and the Michigan Business Network that shows acquiring and retaining talent remains the top challenge for Michigan’s small- to mid-sized business leaders. The latest Michigan Future Business Index (MFBI) data also show the rising cost of health insurance and higher wages have emerged as additional concerns. Still, business owners said they are continuing to have strong sales and profits.

Astronomical Odds

“The odds are astronomical. …People are telling me I should buy a lottery ticket.” — Phil Sevening, the owner of Corner Hardware in Correctionville, Iowa, comments after his store was damaged in two separate incidents in the space of five days when vehicles collided with the building after failing to negotiate a tricky curve in the street where the store is located. Sevening, who has

$22 MILLION

Payments made by FEMA’s National Flood Insurance Program (NFIP) for insured losses from flooding in central Texas in mid-October have exceeded $22 million and could exceed $30 million when all claims have been filed and paid, the Insurance Council of Texas (ICT) reported. This total does not include homeowners who did not have flood insurance coverage. FEMA has received flood claims on more than 800 homes, but more than half of the homes were not covered by flood insurance.

BILLION

That’s how much state and federal authorities estimate that it will cost to clear debris from 19,000 homes and businesses destroyed by three California wildfires in November. Disaster relief officials said the cleanup costs will far surpass the record cleanup expense of $1.3 billion the U.S. Army Corps of Engineers spent on debris removal in Northern California in 2017.

owned the business for 12 years, has estimated $9,000 in damage from the accidents.

Fire Request

“Requiring thousands of wildfire survivors, who’ve suffered through such heartbreaking loss to create detailed inventories of their belongings and other property is adding insult to injury.” — California Insurance Commissioner Dave Jones in mid-December asked residential insurers to pay at least 75 percent and up to 100 percent of personal property or contents coverage in the event of a total loss without requiring detailed personal property inventories to help victims of the Camp and Woolsey fires.

Firenado Explainer

“This paints a clear picture of the sequence of events leading to the vortex development and intensification.” — Neil Lareau of the University of Nevada, Reno, talked about a study he co-authored explaining a rare fire tornado that raged during this summer’s deadly Carr Fire in

INSURANCEJOURNAL.COM

Northern California. The study shows the firenado was created by a combination of scorching weather, erratic winds and an ice-topped cloud that towered miles into the atmosphere.

No Ordinary Care

“Patterson Drilling had the most direct control over the drilling operations and emergency response to changing conditions and failed to use ordinary care with respect to its conduct.” — A wrongful death lawsuit filed by the family of one of the workers killed in an explosion at an Oklahoma gas well in January 2018 alleges that the driller of the well, Patterson-UTI Drilling, ignored multiple warnings that safety equipment on the gas well was malfunctioning before the blast that killed five workers and badly injured another. The Jan. 22 blowout occurred near Quinton, about 125 miles east of Oklahoma City. The U.S. Chemical Safety and Hazard Investigation Board found that the rig’s accumulator, a piece of safety equipment that closes part of the well to prevent an uncontrolled release of

fluids, wasn’t able to fully close the well on the day of the blast. The suit alleges Patterson knew of the problem.

Flooding Down in Texas

“Due to a combination of population growth and related development, Texas can be certain that without proper planning, flood events will impact more lives and cause more damage in the future. … This statement is just as true on the High Plains near Post as it is along Dickinson Bayou near Galveston.” — The Texas Water Development Board, in a flood assessment report, asserts the cost to curtail damaging flooding across Texas over the next 10 years is more than $31.5 billion. The report, produced for the state lawmakers ahead of the legislative session that begins in early January, says coastal and river flooding alone is expected to cause more than $6.8 billion in property losses over the next five years.

JANUARY 7, 2019 INSURANCE JOURNAL | 13

Regional People Michael Windstein

Geraldine DelPrete

Insurance broker Willis Towers Watson has appointed Bill Creedon as

Construction Industry leader for North America within its Corporate Risk and Broking segment. Creedon, a 30-year insurance and construction risk industry veteran, is returning to Willis Towers Watson where he previously spent 20 years in national and global leadership roles. Creedon has spent the past two years at Construction Risk Partners and Fairly Group. Creedon will be broadly responsible for client relationships, business development and services for construction clients in North America including contractors, project owners, developers, project financiers, architects and engineers. He will also work to strengthen relationships with insurance carriers. Swiss Re Corporate Solutions has appointed Daniel Vetter as head of Excess & Surplus North America, a newly-created role. Vetter will be responsible for growth of the company’s E&S Property and Casualty business, as well as for establishing a Financial & Professional lines team within the unit. Based in New York, Vetter will oversee dedicated sales and underwriting teams across the region. He brings 20 years of insurance experience to this role. He joined Swiss Re in 2000. AXA XL Insurance has appointed new Excess & Surplus (E&S) Casualty product leads in the U.S. Ankur Chokshi has been promoted to head of E&S Primary Casualty and Brokerage and Binding Authority while Kimberly Smid joins to lead the Excess Casualty E&S business. Both report to Matt O’Malley, head of AXA XL’s E&S Casualty business. Based in Chicago, Chokshi previ14 | INSURANCE JOURNAL | JANUARY 7, 2019

Paul Tetrault

Aaron Head

Sebastian Sanchez

ously served as E&S’s Central regional vice president. Chokshi joined AXA XL in 2013 as an E&S underwriter after positions at CoverX and Chubb. Chokshi also assumes leadership of AXA XL’s Binding Authority and Brokerage insurance operation from Karl Fischbach, who continues in his role a leader of Wholesale Broker, Programs and Binding Relationships. Smid joins AXA XL’s New York office from QBE where she served as an E&S underwriting manager on the National Excess Casualty team. She brings 13 years of experience including positions at Can, Swiss Re and AIG. Allianz Global Corporate & Specialty reported that Wanda Phillips has taken on responsibility as the North America regional head of Entertainment. Phillips replaces Sue McGuirl who has left Allianz to pursue other opportunities, according to the company. Based in New York, Phillips is responsible for leading North American underwriting teams in support of Entertainment’s product strategies. She joined AGCS in 2016 as a senior underwriting team leader and has more than 25 years of experience including tenure with Entertainment Brokers International, Aon, Chubb and OneBeacon Entertainment.

East

Energi, the Peabody, Mass.headquartered parent company for Energi Insurance Services Inc., has named Michael Windstein as chief underwriting officer. Windstein will support Energi’s underwriting operations with the recent launch of its eCaptiv programs for the energy and transportation industries. Windstein previously worked as assistant vice president for the Mid-Atlantic, where

Graham Gardner

he managed the underwriting portfolio for the region. Prior to Energi, he was at Victor O. Schinnerer. SterlingRisk Insurance, a Woodbury, N.Y.-based, independent insurance brokerage, has hired Geraldine DelPrete as director of programs and senior vice president. DelPrete brings 25 years of experience to SterlingRisk, having held positions with Aon Re, Guy Carpenter, American Re and Willis Re. Prior to joining TigerRisk Partners in 2008, DelPrete was senior executive vice president for Gallagher Re, where she assisted with the sale of Gallagher Re to Aon. The Insurance Library Association of Boston has named Paul Tetrault as its executive director. Tetrault, an attorney and former editor of the insurance publication The Standard, has more than 25 years of experience in the insurance industry. He joins the Library from the National Association of Mutual Insurance Companies, where was an in-house counsel for government affairs for more than 13 years. He also has experience in litigation defense and insurance coverage matters. Founded in 1887, The Insurance Library is offers literature, information services and professional education.

Midwest

Ellsworth Insurance Agency in Edwardsville, Illinois, has hired Aaron Head as an insurance advisor and producer. Head will generate leads, develop new accounts, and handle existing accounts. Prior to joining the company, Head worked as an insurance producer for a local Illinois agency. He previously worked as INSURANCEJOURNAL.COM

Eric Rioux

Norman Ives

an account executive at various print and broadcast organizations. Founded in 2016, the agency is owned by Kurt Ellsworth and is a member of Valley Insurance Agency Alliance (VIAA). Brightway Insurance has added a new agency location in Illinois — Brightway, The Nadelhoffer Family Agency in Warrenville opened by Matt and Rebecca Nadelhoffer. The Nadelhoffers come to Brightway with experience in business, teaching and coaching. Rebecca started a home-based health and wellness business that she has operated for the past five years. She has taught exercise science and education courses as an adjunct professor at Millikin University in Decatur, Ill., and at Eastern University in St. David’s, Pa. Matt coached men’s college basketball for nearly 20 years and most recently served as the head coach at Millikin University.

South Central

Sebastian Sanchez joined RHSB (Roach Howard Smith & Barton) as assistant vice president in the Dallas agency’s Employee Benefits division. Sanchez is a consultant with an emphasis on small to mid-market employers. Prior to joining RHSB, Sanchez led a team of benefit coordinators for a national broker in the Dallas area. RHSB has offices in Dallas and Fort Worth. Oklahoma Insurance CommissionerElect Glen Mulready tapped Oklahoma native and longtime conservative adviser, Tyler Laughlin, as chief of staff and first deputy insurance commissioner at the insurance department. Laughlin, currently a deputy commissioner for the OID, will lead Mulready’s transition into the post. INSURANCEJOURNAL.COM

Mulready will be sworn in as insurance commissioner on Jan. 14, 2019. Specialist insurer Beazley appointed Reese Lever as a U.S. marine underwriter for the Southwest region. Reese joins Beazley’s office in Houston, Texas, from QBE where he was a vice president for Marine, based in the same city. He is responsible for the portfolio in the Southwest states for a range of marine classes including primary and excess marine liabilities, hull and P&I. He previously held senior underwriting roles at Zurich and Great American. This followed a career with Military Sealift Command. Southeast Turbeville Insurance Agency (TIA) of South Carolina has hired Graham Gardner as vice president of Large Construction Insurance in the company’s Columbia location. Gardner has more than 20 years of experience in the insurance industry, most recently as vice president at Hub International. mBill Turbeville, TIA owner and president, said Gardner’s addition marks the beginning of the company’s new sector for large construction. Employee benefits consultant Eric Rioux has joined Lockton Southeast as a business adviser. Lockton’s Southeast operation has offices in Atlanta, Charlotte, Naples, Miramar, Miami, Tampa and Greenville, South Carolina. Rioux previously spent a decade as an account manager and business development executive with Northwestern Benefit Corp. where he helped clients navigate the health insurance marketplace, stay compliant with

regulations, and boost employee communication efforts. He was also a benefits consultant for Arthur J. Gallagher. Rioux is based out of Lockton’s Atlanta office.

West

National wholesale broker Worldwide Facilities has named Norman Ives to the management and brokerage team in its NutraRisk division, which specializes in cannabis, nutraceuticals and dietary supplements insurance coverage. Ives, based out of Washington, was previously the cannabis program manager at Mosaic Insurance Alliance. He was a commercial sales specialist at Farmers before that. Gorst & Compass Insurance, a wholesale broker headquartered in Chatsworth, Calif., has expanded its Northern California operations with the opening of an office in Napa, Calif. and has named Katie Sholders, senior broker/underwriter in commercial lines, to open the office. She has 14 years of wholesal commercial lines wholesale experience with a focus on contractors. She was previously senior underwriter/broker with R.E. Chaix. Alliant Insurance Services Inc. has named Megan Davidson vice president within the company’s real estate group. Davidson will be based in Alliant’s Seattle, Wash. office, and will provide insurance and risk management solutions to real estate clients with a focus on affordable housing and nonprofit organizations. Davidson was previously a sales executive at Propel Insurance. She was a vice president at Wells Fargo Insurance Services before that. JANUARY 7, 2019 | INSURANCE JOURNAL | 15

Regional Special Report

West

Western Region Could See Action on Disaster Mitigation, Independent Contractors, Workers’ Comp By Don Jergler

ost eyeballs were on California during the midterm elections in November, with polar opposite candidates facing off in the race for governor as well as the office of insurance commissioner. As in most years, Democrats carried the day in a state that’s traditionally heavily painted blue. Democrat Gavin Newsom defeated businessman John Cox in a race in which left-leaning Newsom promised to not only continue the legacy of departing Democratic Gov. Jerry Brown but likely bring a more liberal bent to office. In the race for insurance commissioner, state Sen. Ricardo Lara defeated former insurance commissioner Steve Poizner. Lara, the son immigrants from Mexico, campaigned on universal healthcare. The Republican-turned-independent Poizner

Alaska

2018.

Governor: Mike Dunleavy, R, elected 2018. Insurance committees: House Finance;

Insurance committees: Senate Standing

Insurance commissioner: Lori Wing-Heier,

(D), elected 2018. Served in the state Senate since 2012.

Senate Finance

appointed 2014. Has 30 years of insurance experience including as an agent.

Arizona

Governor: Doug Ducey, R, won election 2018.

Insurance committees: House Banking and Insurance; Senate Finance

Insurance commissioner: Keith Schraad (R), appointed 2018. Executive experience in tech, insurance, government.

California

Governor: Gavin Newsom, D, won election 16 | INSURANCE JOURNAL | JANUARY 7, 2019

Committee; Assembly Insurance.

Insurance commissioner: Ricardo Lara

Colorado

Governor: Jared Polis, D, elected in 2018. Insurance committees: House Business

Affairs and Labor; Senate Business Labor and Technology. Insurance commissioner: Michael Conway (D), appointed 2018. Was deputy commissioner and assistant AG.

Hawaii

Governor: David Ige, D, elected 2018. Insurance committees: House Intrastate

had said he would focus on making sure homeowners have adequate protection against wildfires and other natural disasters. He promised a crackdown on insurance fraud and wants to develop better insurance policies against cybercrime. The outlook for this year is to expect more laws and regulations that insurance professionals should pay attention to. There was no shortage of legislation that arose from the 2017 wildfires, and the state could see more new laws and regulations stemming from the record-breaking 2018 wildfires. “There should be no lack of challenges with continuing concern relative to homeowners insurance and fire settlement, as well as Inverse Condemnation,” noted John Norwood, an industry lobbyist with Norwood & Associates. A possible key change in California could center on altering how state courts have interpreted what is known as “inverse conCommerce; Senate Committee on Commerce, Consumer Protection, Health. Insurance commissioner: Gordon Ito (D), appointed 2010. Was chief deputy commissioner and staff attorney.

Idaho

Governor: Brad Little, R, elected 2018. Insurance committees: Senate Finance; House Business

Insurance commissioner: Dean Cameron (R), appointed 2015. Served in state Senate; former insurance salesman.

Montana

Governor: Steve Bullock, R, elected 2013. Insurance committees: Finance Insurance commissioner: Matt Rosendale (R), elected 2016. Worked in real estate.

INSURANCEJOURNAL.COM

2019 Legislative Outlook demnation” as it applies to wildfires under which utilities can be held liable for damages caused by wildfires linked to their own equipment, even if the companies followed accepted safety procedures. Utility PG&E has been under intense scrutiny over whether its equipment sparked the blaze, which killed 86 people and caused billions-of-dollars in damage. No cause has been determined. PG&E Corp. revealed in mid-December that on the day California’s deadliest and most destructive wildfire started, its workers saw damage and a fire near one of its transmission towers, which are the focus of investigations and a lawsuit as a possible ignition point. The “Dynamex decision” is another matter that Norwood said the insurance community in California should take note of. The California Supreme Court earlier this year issued a landmark decision in Dynamex Operations West Inc. v. Superior Court of Los Angeles. The court in its decision rejected the standard Borello test for determining whether workers should be classified as employees or independent contractors and embraced a standard presuming that all workers are employees instead of contractors. It also placed the burden on any entity classifying an individual as an independent contractor of establishing the classification is proper under a

new “ABC test.” One thing Norwood doesn’t expect in California going forward for the next year and beyond is a business-friendly environment. “With Democrats controlling more than two-thirds of the Legislature and all of the state constitutional offices, things will not be easy,” he said. In other Western U.S. states both the predominantly red states of Alaska and Arizona saw Republicans win races for governor. Arizona saw a new insurance commissioner in early 2018 with the appointment of Republican Keith Schraad by Gov. Doug Ducey, who himself won reelection in November. Democrat Jared Polis won election as Colorado governor in 2018. Michael Conway was appointed in early 2018 by Gov. John Hickenlooper, who was term-limited this year, as interim insurance commissioner. David Ige, a Democrat, successfully won reelection as governor of Hawaii. Gordon Ito was appointed insurance commissioner in 2010 and was reappointed by Ige in 2015 and continues to serve. Republican Brad Little won election

in 2018 as Idaho’s governor. The path for Little was cleared when fellow Republican Butch Otter chose not to seek a fourth term in office. Dean Cameron remains insurance commissioner. He has been serving in that role since 2015.

New Mexico

Oregon

Washington

and Labor; Senate Business and Transportation. Insurance commissioner: Andrew Stolfi, appointed 2018. Was International Association of Insurance Supervisors operating officer and chief counsel.

& Financial Services; Senate Financial Institutions & Insurance Insurance commissioner: Mike Kreidler, D, elected 2000. Longest serving insurance commissioner. Was in Congress, before that an optometrist.

Governor: Michelle Lujan Grisham, D, won election 2018.

Insurance committees: House Business &

Industry; Senate Finance Insurance commissioner: John Franchini, appointed 2010. Previously owned insurance agency.

Nevada

Governor: Steve Sisolak, D, elected 2018. Insurance committees: Assembly

Commerce and Labor; Senate Commerce, Labor and Energy. Insurance commissioner: Barbara Richardson (D), appointed 2016. Had been N.H. insurance department’s director of operations and fraud.

INSURANCEJOURNAL.COM

Governor: Kate Brown, R, elected 2018. Insurance committees: House Business

Utah

Governor: Gary Herbert, R, elected 2009. Insurance committees: House Business and Labor; Senate Business and Labor

Insurance commissioner: Todd Kiser (R),

appointed 2013. Was in state Legislature. Founded insurance agency.

Key States

The Property Casualty Insurers Association of America said it will be watching these key states and issues::

California

• Wildfire legislation – important to prevent unintended consequences for the homeowners market • Workers’ compensation may become a topic with a

new governor • Distracted driving legislation – adding a point to one’s record to deter the behavior

Colorado

Colorado turned from a blue state to a purple state in November. Colorado consumers are already experiencing increasing car insurance costs, and the change in the state’s political climate is unlikely to bring any relief to consumers from Colorado’s expensive litigation environment. Insurers are expecting a push for an increase of damage caps and limitations on alternative dispute resolutions such as arbitration.

Governor: Jay Inslee, D, elected 2012. Insurance committees: House Business

Wyoming

Governor: Mark Gordon, D, elected 2018. Insurance committees: Minerals, Business & Economic Development.

Insurance commissioner: Tom Glause,

appointed 2015. Was with State Board of Equalization, a prosecutor and private practice lawyer.

JANUARY 7, 2019 | INSURANCE JOURNAL | 17

Regional Special Report

Midwest

Midwest Legislative Priorities Include No-Fault Auto, Distracted Driving, Contractor Fraud, Tort Reform

ith some of the highest auto insurance rates in the nation, Michigan’s no-fault insurance laws — much maligned by the insurance industry and business interests — are sure to be a target for legislative reforms. Insurance trade associations, including the Property Casualty Insurance Association of America (PCI), along with the Michigan Chamber of Commerce and other business groups, have said no-fault auto insurance reform will be a focus in the state’s legislative session that begins on Jan. 9. Part of the problem with no-fault is the unlimited personal injury protection required under the law. Previous attempts to allow insurers to offer consumers other options, such as PIP limits of $250,000 and $500,000, have been shot down in the legislature. Dan Gilbert, founder of the Detroit-

based mortgage lender, Quicken Loans Inc., reportedly has threatened legal action against no-fault and may push to get no-fault reform on the 2020 ballot if state lawmakers don’t tackle the issue next year. Gilbert, and other business interests in the state, say the no-fault system is a deterrent to economic development. According to the National Insurance Crime Bureau, a bill introduced in the Michigan Senate late in 2018 would create an auto-fraud authority and catastrophic claims board to oversee high-risk losses — including fraud. Another Michigan bill that supporters say would help lower both auto insurance and workers’ compensation costs, would strengthen the state’s oversight of pharmacy benefit managers, giving that responsibility to the insurance department. NICB noted that it will be tough to get either measure passed in the waning days of the 2018 session, but the bureau expects to see them resurrected in 2019 if

Illinois

Indiana

Michigan

Health & Life, Insurance Property & Casualty; Senate Insurance Insurance Commissioner: Jennifer Hammer, appointed in 2017. Was deputy chief of staff for the governor.

Senate Insurance and Financial Institutions Insurance commissioner: Stephen Robertson, appointed in 2010, 2013 and again in 2016. Was executuve at Conseco Insurance Group and general counsel at the Nebraska Department of Insurance.

Insurance committees: House Insurance;

By Stephanie K. Jones

Governor: J.B. Pritzker, D, elected 2018 Insurance committees: House Insurance

Iowa

Governor: Kim Reynolds, R, elected 2018 Insurance committees: House Commerce; Senate Commerce

Insurance commissioner: Doug Ommen,

appointed in 2017. Was deputy commissioner. Also Missouri insurance director.

18 | INSURANCE JOURNAL | JANUARY 7, 2019

Governor: Eric Holcomb, R Insurance committees: House Insurance;

Kansas

Governor: Laura Kelly, D, elected 2018 Insurance committees: House Insurance;

Senate Financial Institutions, Insurance

Insurance commissioner: Vicki Schmidt,

elected in 2018. A pharmacist and state senator.

Governor: Gretchen Whitmer, D, elected 2018

Senate Insurance

Insurance commissioner: Patrick

McPharlin, appointed 2015. Was CEO of credit union.

Minnesota

Governor: Tim Waltz, D, elected 2018 Insurance committees: Commerce and Consumer Protection

Insurance commissioner: Jessica Looman, appointed in 2017. Was deputy labor commissioner.

INSURANCEJOURNAL.COM

2019 Legislative Outlook passage fails in 2018. Jeffrey Brewer, vice president for Public Affairs for PCI outlined some of the other issues PCI would be working on in the Midwest. He said the group backs stronger distracted driving laws in Midwest states. “Specifically, we would like to see a ban on hand-held devices in Minnesota and the current hand-held ban for young drivers in Indiana extended to all drivers,” he said. PCI would oppose any proposed body shop legislation in Minnesota that would restrict the ability of insurers to offer direct repair program options to consumers. The insurers association will also keep a watch on towing issues in Indiana and will pursue the passage of towing protections there. Roofing and contractor fraud and abuse are issues in Iowa, Kansas and Ohio that PCI will be watching. “We will be supportive of legislative efforts in Iowa and Kansas to address assignment of benefits abuses associated with roofing repairs. Nebraska passed assignment of benefits reform in 2018 that created key disclosures for consumers and provided protections so that they don’t unknowingly sign away their rights. PCI would like these provisions adopted in Iowa and Kansas. We would also like to see Ohio pass stronger consumer protections to prevent con-

Missouri

Governor: Mike Parsons, R Insurance committees: House Insurance Policy; Senate Insurance and Banking

Insurance commissioner: Chlora Lindley-

Myers, appointed in 2017. Was property/ casualty section chief for insurance department and worked in Tennessee department.

Nebraska

Governor: Pete Ricketts, R, re-elected 2018 Insurance committees: Banking, Commerce and Insurance

Insurance commissioner: Bruce R. Ramge

since 2010. Was acting director and deputy director; past president of the Insurance Regulatory Examiners Society.

INSURANCEJOURNAL.COM

tractor fraud and abuse,” Brewer wrote. A significant priority for PCI and other groups in Missouri is tort reform. St. Louis, in particular, has for years been tagged as a “judicial hellhole” by the American Tort Reform Foundation (ATRF) due to its popularity as a forum for litigation and its reputation for handing down big awards in civil cases. According to the ATRF, issues such as venue laws, punitive damages in lawsuits and statute of limitations, are expected to be debated by Missouri lawmakers in the coming session. Brewer said PCI expects workers’ compensation reform will likely “resurface in Illinois, and PCI will be focused on ensuring that proposals address the true under-

North Dakota

Governor: Douglas J. Burgum Insurance committees: House Industry,

Business and Labor; Senate Industry, Business and Labor Insurance commissioner: Jon Godfread, elected in 2016. Was with Greater North Dakota Chamber.

Ohio

Governor: Mike DeWine, R, elected 2018 Insurance committees: House Insurance;

Senate Insurance and Financial Institutions Insurance commissioner: Jillian Froment, appointed. Joined the department in 2011 as chief administrative officer and subsequently served as deputy director. Was a city administrator.

lying costs for Illinois businesses.” In Wisconsin and Michigan, outgoing Republican governors Scott Walker of Wisconsin and Rick Snyder of Michigan each signed lame duck legislation passed by Republican controlled legislators that limit the powers of Democrats in both states. Voters elected to replace Walker and Snyder with Democrats — Tony Evers and Gretchen Whitmer in Michigan. Insurance commissioners in Wisconsin and Michigan are appointed, so it’s possible both states may have new top insurance regulators. Kansas also has a new governor, Democrat Laura Kelly, and a newly elected insurance commissioner, Vicki Schmidt, a Republican and a former state senator.

South Dakota

Governor: Kristi Noem, R, elected 2018 Insurance committees: House Commerce

and Energy; Senate Commerce and Energy Insurance commissioner: Larry D. Deiter, appointed in 2015. Was in market conduct and investigations with the department. Served as vice president/market manager of a financial institution.

Wisconsin

Governor: Tony Evers, D, elected 2018 Insurance committees: House Insurance; Senate Insurance, Housing and Trade

Insurance commissioner: Ted Nickel,

appointed in 2011. Worked for Church Mutual Insurance Co.

JANUARY 7, 2019 | INSURANCE JOURNAL | 19

Regional Special Report

South Central Natural Disasters to Dominate Insurance Agenda in Texas Lege; Oklahoma’s New Commissioner Eyes Uninsured Motorists By Stephanie K. Jones

he Texas Legislature meets every two years, so when state lawmakers are in Austin, they have a lot to deal with. That’s unlikely to change when the 140-day 86th Legislature’s regular session convenes on Jan. 8, 2019. When the Texas Lege last met in 2017, it considered more than 6,600 bills during the regular session and passed more than 1,200, according to the Texas Coalition for Affordable Insurance Solutions, a lobbying group representing major property/casualty insurers in the state. TCAI has said it expects a similar volume of filed and considered bills during the 2019 session. Texas lawmakers in 2017 passed House Bill 1774, which addressed the problem of long-tail litigation of property insurance claims following extreme weather events and natural disasters, such as wildfires. The legislation, which was supported by the insurance industry and some Texas business groups, curtails the ability of policyholders to sue insurance companies over property claims following extreme weather events.

Arkansas

Governor: Asa Hutchison, R, re-elected 2018

General Assembly: House Republican

majority; Senate – Republican majority; Session begins Jan. 14, 2019 Insurance committees: House Insurance and Commerce; Senate Insurance and Commerce Insurance commissioner: Allen Kerr was appointed in January 2015 by Gov. Asa Hutchison. Kerr is a former insurance 20 | INSURANCE JOURNAL | JANUARY 7, 2019

agency owner and served three terms in the Arkansas House of Representatives before becoming commissioner.

Louisiana

Governor: Jon Bel Edwards, D Legislature: House – Republican majority; Senate – Republican majority; Session begins April 8, 2019 Insurance committees: House Insurance; Senate Insurance Insurance commissioner: James Donelon

It’s been fairly successful, according to the lobbying group Texans for Lawsuit Reform (TLR), which was instrumental in both crafting the bill and ushering it through the legislative process. TLR reported in September 2018 that in the year after HB 1774 went into effect, the number of lawsuits against insurers following natural disasters had dropped significantly. Mark Hanna, a spokesperson for the insurer trade group Insurance Council of Texas, said he expects trial lawyers will attempt to get lawmakers during the 2019 session to water down some of the more onerous anti-litigation aspects of the bill. Both the ICT and the TCAI expect a related issue – the licensing of roofing contractors – will once again be brought to the attention of legislature. Proponents of roofing contractor licensing, including insurance industry representatives, have tried twice — and failed —to get a licensing bill passed by Texas lawmakers. ICT’s Hanna said the third time will hopefully be the charm. There will likely be some legislative focus on the Texas Windstorm Insurance Association, the state’s property insurer of last resort wind and hail in coastal has served as insurance commissioner for more than 12 years. He was first appointed in February 2006 when the seat was vacated by the incumbent. He was later elected to fill the unexpired term in 2006 and has been re-elected to three consecutive full terms in 2007, 2011 and 2015. The next insurance commissioner election will be held in 2019.

Oklahoma

Governor: Kevin Stitt, R, elected 2018 INSURANCEJOURNAL.COM

2019 Legislative Outlook counties. In a recent report released by the state’s Sunset Commission, staff found TWIA’s current structure to be unsustainable. “In the aftermath of Hurricane Harvey, TWIA is broke, in debt, and facing a shrinking revenue pool,” the report states. TWIA’s legislative mandate is to provide coverage to those who can’t find it in the private market, but it receives no funding from the state in order to do so. For funding, it relies mostly on premiums and debt that has to be repaid by policyholders. According to the Sunset staff report, the legislature needs to decide whether to allow TWIA to function as a true insurer of last resort (which likely would require some funding from general revenues) or allow it “to function like an independent insurance company with adequate (higher) rates and fewer restrictions.” The first scenario is not likely to be popular with inland lawmakers and their constituents who aren’t fond of the idea of subsidizing coastal properties. The second scenario is unlikely to find support among coastal lawmakers, who have in the past challenged TWIA’s attempts to raise policyholder premium rates. The insurance industry maintains that TWIA’s rates are inadequate, an assertion to which TWIA’s board of directors agrees. But the association’s latest attempt to raise rates was denied by the Texas Department of Insurance after pressure was applied by both Gov. Abbott and coastal lawmakers to deny the rate request. Oklahoma has a new commissioner, Glen Mulready, but he’s no stranger either to

Legislature: House – Republican majority; Senate – Republican majority; Session begins Feb. 4, 2019 Insurance committees: House Insurance; Senate Retirement and Insurance Insurance commissioner: Before being elected insurance commissioner in 2018, Glen Mulready had served in the Oklahoma House of Representatives since 2011. He has served as chair of the House Insurance Committee and most recently as House Floor Leader INSURANCEJOURNAL.COM

politics or the workings of the insurance industry in the state. He served in the House of Representatives from 2011 until he was elected as Oklahoma’s insurance commissioner in November 2018. A small business owner, he also has been involved in the insurance industry as an agent, broker, agency owner and insurance company executive. Mulready has said one big challenge in his state and an issue on which he intends to focus is that of uninsured motorists. “We have tried to make some changes in the legislature to address that, but we have a real problem in our state. More than one-in-four on the road today are uninsured,” Mulready said in a pre-election interview with Insurance Journal. “That’s a little scary, when you drive down the road, start counting every fourth car, Emeritus. Mulready is a small business owner, has worked as an independent agent, a broker and has held executive positions at two Oklahoma health insurance companies.

Texas

Governor: Greg Abbott, R, re-elected 2018 Legislature: House – Republican majority; Senate – Republican majority. Session begins Jan. 8, 2019 Insurance committees: House Insurance;

so I think more work needs to be done there.” Competitive availability of health insurance is also an issue on which Mulready intends to focus. A strong proponent of the free market in all lines of insurance, Mulready said there has been a definite lack of choice when it comes to providers in the state’s individual health insurance market. “The good news is that we are, for 2019, we’re adding a second option. We have Medica coming into our individual market, so that’s a positive step, but there’s some need there,” Mulready said. Mulready said he recognizes that Oklahoma can “be a tough state to do some business in … we have our share of catastrophic claims with hail and tornado, but overall, I think the current state of the Oklahoma insurance market is good.” Senate Business and Commerce

Insurance commissioner: Kent Sullivan

was appointed by Gov. Greg Abbott in September 2017 to lead the Texas Department of Insurance. He succeeded David Mattax, who passed away in April of that year. Sullivan has 35 years of legal experience. He previously served as a justice on the Texas Court of Appeals, as a state district court judge, and as first assistant attorney general for Texas.

JANUARY 7, 2019 | INSURANCE JOURNAL | 21

Regional Special Report

Southeast

Southeast Officials Focus on Curbing Fraud, Rising Auto Rates, Flood Insurance, and Distracted Driving By Amy O’Connor

or the seventh year in a row, the Florida insurance industry, regulators, and consumer advocates will push for reforms to the state’s assignment of benefits issue that has now become an insurance crisis, according to a report from the Insurance Information Institute (I.I.I.) “The state’s legal environment has encouraged vendors and their attorneys to solicit unwarranted AOBs from tens of thousands of Floridians, conduct unnecessary or unnecessarily expensive work, then file tens of thousands of lawsuits against insurance companies that deny or dispute the claims,” the report says of the misuse of the policyholder protection known as AOB. Michael Carlson, president of the Personal Insurance Federation of Florida, said it is "well past time for the [Florida] Legislature to fix this problem," he said. With rates rising and insurers pulling back in parts of the state where the abuse

Alabama

Governor: Kay Ivey (R), won election 2018 Insurance committees: House Insurance;

Formerly chief analyst and insurance agent.

Senate Banking & Insurance

Georgia

(non-partisan), appointed 2011. Has 50 years of experience in insurance, including positions with Fireman’s Fund.

Insurance committees: Insurance & Labor

Insurance commissioner: Jim Ridling

Florida

Governor: Ron DeSantis (R), elected in 2018

Insurance committees: House Insurance & Banking Subcommittee; Senate Banking & Insurance Insurance commissioner: David Altmaier (non-partisan), appointed 2016. 22 | INSURANCE JOURNAL | JANUARY 7, 2019

Governor: Brian Kemp (R), elected in 2018. Senate; Insurance House

Insurance commissioner: Jim Beck (R),

elected 2018. Has 30 years of experience in the industry, including with an insurance agency, and a director for an insurance company. Formerly deputy insurance commissioner.

Kentucky

Governor: Matt Bevin (R), elected in 2016

is most rampant, such as in South Florida, insurance leaders say the crisis must be addressed. A bill addressing attorney fees – Senate Bill 122 – has already been filed for 2019 session that begins in March. In previous sessions, bills to reform the statute have failed thanks to lobbying by the trial bar. But the industry is hopeful 2019 will be different. “I believe that there is real interest in the Senate to finally and meaningfully address the AOB crisis that is hurting consumers in Florida,” Carlson said.

Georgia

A new commissioner is now heading up the Georgia Department of Insurance, and he has promised bring changes to the department. Jim Beck, a Republican, was elected in November, taking over for Ralph Hudgens, who served since 2011. Beck was a former deputy insurance commissioner and also served as Hudgens’ chief of staff. Beck has said his top priorities will be fixing health care, defending seniors and

Insurance committees: House Banking &

Insurance; Senate Banking & Insurance.

Insurance Commissioner: Nancy Atkins

(non-partisan), appointed 2017. Has 33 years of experience in the insurance industry, including as an agent and employee benefit manager. Formerly worked for Kentucky department and for Blue Cross Blue Shield.

Mississippi

Governor: Phil Bryant (R), re-elected in 2016

Insurance committees: House Insurance; Senate Insurance

Insurance commissioner: Mike Chaney

(R), elecetd to three terms since 2007. INSURANCEJOURNAL.COM

2019 Legislative Outlook veterans from insurance fraud and protecting consumers from “runaway” auto rates. “I will organize and begin holding teletown hall hearings on all proposed excessive rate increases, and if appropriate, challenge them in court,” he said. Georgia is now leading the U.S. when it comes to the cost of auto insurance, according to S&P Global Market Intelligence. Jerry Duke, president of the Professional Insurance Agents (PIA) Southern Alliance, said the association plans to work with Beck on cyber insurance regulation that clarifies responsibility and assigns company agency responsibility. The state also has a new governor, Brian Kemp, also a Republican. The 2019 session begins Jan. 14.

feel there’s a greater opportunity for discussion of these topics in 2019,” he said.

Tennessee

The 2019 North Carolina legislative session will begin on Jan. 30. There will be plenty of insurance industry representation, thanks to the election of several independent agents to the Senate and House. Joe Stewart, vice president of Government Affairs, said a hands-free driving law similar to what was passed in Georgia is a priority. Cybersecurity will likely come up again in some legislative form, as will flood insurance. “With this many independent insurance agents now in the General Assembly, there’s a greater critical understanding of these issues in the body, so that makes me

Tennessee has been enjoying lower workers’ compensation rates, competitive auto and homeowners markets and a booming captive industry for the last several years. Moving forward into 2019, Insurance Commissioner Julie Mix McPeak says the new administration of Governor-Elect Bill Lee, who just reappointed her as commissioner, will help determine what the department’s legislative priorities will be, but she expects that health insurance will be at the top. “Certainly, maintaining competition in our health insurance market - that’s been a big focus in Tennessee for my time here. We want to remain focused on that. Also, our new administration is very interested in efficiency of licensure, and we do a lot of things at commerce and insurance besides just insurance, and so I think that’s going to be a large focus of ours going forward as well,” she said. McPeak says she is working on enhancing the state's flood insurance market, encouraging more people to buy coverage and pushing Congress to reuathorize the federal flood program long-term. “We have asked all of our members to reach out to their congressional delegations and talk about the importance

Former state legislator, Chaney is also active in the NAIC.

Insurance committees: Senate Banking &

North Carolina

Governor: Roy Cooper (D), elected in 2016 Insurance committees: Senate Commerce & Insurance; General Assembly Insurance. Insurance commissioner: Mike Causey (R), elected in 2016. Former insurance agency owner with 25 years’ experience in the insurance industry. Began career with Metropolitan Life.

South Carolina

Governor: Henry McMaster (R), elected in

INSURANCEJOURNAL.COM

2018

Insurance; House Labor, Commerce & Industry. Insurance commissioner: Raymond G. Farmer (non-partisan), appointed 2012. Has more than 40 years’ experience in insurance. Served as Deputy commissioner for the Georgia Department of Insurance. Also with American Insurance Association.

Tennessee

Governor: Bill Lee (R), elected in 2018. Insurance committees: Senate Commerce & Labor; House Insurance & Banking.

of the long term reauthorization, and also [worked with] the states that are interested in creating a private market solution,” she said.

Kentucky

The Kentucky Legislature convenes for 2019 on Jan. 8, and the Insurance Institute of Kentucky says it has several initiatives it will pursue in the short 30-day session. According to Mark Treesh, executive director, IIKY will offer a more limited personal injury protection (PIP) bill than what passed the Kentucky Senate last year but was later dropped by the House. The proposal is to use the workers' comp fee schedule for PIP medical payments. “Our hope is that a fee schedule will rein in some of the fraudulent activity rampant in [the state],” Treesh said. IIKY is also working on insurance fraud, especially PIP fraud that is a real problem in Jefferson County (Louisville). “The provisions that we hope to bring are enhancing the criminal penalties for insurance fraud, eliminating contact information from accident reports purchased in bulk, and requiring medical licensing boards to report provider activity that may be insurance fraud to the Department of Insurance,” he said. IIKY is also working to support asbestos trust transparency and an industry response to the American Law Institute’s “Restatement of the Law” – which covers a range of liability insurance law topics. McPeak (non-partisan), appointed 2011; reappointed in 2019. Has more than 20 years of experience in state government, including with Kentucky Office of Insurance.

West Virginia

Governor: Jim Justice (R), elected in 2016. Insurance committees: House Banking &

Insurance; Senate Banking & Insurance.

Insurance commissioner: Allan McVey,

appointed 2017. Was formerly an insurance agent and worked as a medical claims examiner with the West Virginia Workers’ Compensation Fund.

Insurance commissioner: Julie Mix

JANUARY 7, 2019 | INSURANCE JOURNAL | 23

Regional Special Report

East

East States See Health, Flood Coverages as Key in 2019 with Insurtech, Recruitment Raising Concerns By Elizabeth Blosfield

rom big data and blockchain to autonomous vehicles and new technology that isn’t yet on the radar, “change is inevitable” for the insurance industry in 2019. “Insurance companies, insurance producers and insurance regulators alike will be making decisions this year and in the years to come about how we prepare for and implement those changes,” Pennsylvania Insurance Commissioner Jessica Altman told Insurance Journal. Some of the change won’t come in legislative form per se. According to Altman, Pennsylvania will be watching what she sees as an overlooked concern related to adapting to new technology; that is the insurance industry’s workforce. “Recruitment, retention,

New York

Governor: Andrew Cuomo, D, re-elected 2018

Insurance committees: Assembly Insurance; Senate Insurance

Insurance commissioner: Maria T. Vullo

appointed in 2016; stepping down Feb. 1.

New Jersey

Governor: Phil Murphy, D, elected 2018 Insurance committees: Assembly

Financial Institutions and Insurance; Senate Commerce Insurance commissioner: Marlene Caride, appointed in 2018. The first Hispanic to head the department, which oversees insurance, banking and real estate.

Pennsylvania

Governor: Tom Wolf, D, re-elected 2018 24 | INSURANCE JOURNAL | JANUARY 7, 2019

Insurance commissioner: Jessica Altman

appointed in 2018. Served as chief of staff for former Insurance Commissioner Teresa Miller beginning in June 2015.

Massachusetts

Governor: Charles D. Baker, R, re-elected

training, attracting new talent and even attracting new types of talent with skill sets steeped in these new technologies will be critical to the success of the insurance industry in this endeavor,” she said. East region states cited efforts regarding reauthorization of the National Flood Insurance Program as a priority in 2019 that, while national in scope, has a local impact. “The reauthorization is critically important to anyone purchasing or selling a home within a flood zone, since most lenders require flood coverage in those areas,” said Massachusetts Association of Insurance Agents President and CEO Nick Fyntrilakis. “There have been several temporary reauthorizations, but a comprehensive fix remains elusive, with strong differences of opinion on how best to make the needed structural changes with the program.” The focus on the flood program comes stepped down on December 19, 2018. Incoming Gov. Lamont will appoint a new commissioner. Life & Health Director Paul Lombardo will serve as acting commissioner in the interim.

Maryland

Insurance committees: Joint Committee

Governor: Larry Hogan, R, re-elected 2018 Insurance committees: House Economic

Insurance commissioner: Gary D.

Insurance commissioner: Alfred W.

2018

on Insurance

Anderson, appointed 2017. Joined as its First Deputy Commissioner in February of 2014.

Connecticut

Governor: Ned Lamont, D, elected 2018 Insurance committees: General Assembly

– Insurance and Real Estate Insurance commissioner: Katharine Wade

Matters; Senate Finance

Redmer, Jr. appointed in January 2015. His term ends May 30, 2019. Former member of General Assembly and executuve with insurance businesss.

Maine

Governor: Janet Mills, D, elected 2018 Insurance committees: Joint Health Coverage, Insurance and Financial

INSURANCEJOURNAL.COM

2019 Legislative Outlook as its debt exceeds $20 billion. “It’s the National Flood Program in debt to the U.S. Treasury. It’s kind of like my right pocket’s in debt to my left pocket,” John Tomassi, president-elect of the Professional Insurance Agents of New York, said. “So we’re trying to get something that involves more risk-based pricing.” Maine Insurance Commissioner Eric Cioppa beleives consumer-facing products such as app-based insurance are going to be a focus for next year. “Many insurers see opportunities to attract younger customers with electronic interfaces and, behind the scenes, to speed up underwriting and claims-handling with technology,” he said. Beyond technology challenges and the flood program, health insurance and the Affordable Care Act (ACA) have received and are expected to continue receiving lots of attention from states as well. Maryland Insurance Commissioner Al Redmer believes the most significant accomplishment for the state in 2018 was implementing a waiver that created a reinsurance program for the individual market, leading to a double-digit reduction in health premiums for Maryland this year. “It’s too early to tell exactly what’s going to pop up regarding legislation, but the cost of health insurance and the ACA continues to be of major concern,” he said.

Similarly, in Maine, Cioppa cited the approval of the state’s federal insurance waiver and relaunch of the Maine Guaranteed Access Reinsurance Association as two big accomplishments in 2018 that brought individual market rates down for the 2019 plan year and brought another insurer back to the ACA Exchange. He said health coverage will continue to be a priority next year. In New York, health care costs are also expected to present challenges, according to Scott Hobson, director of government relations at Big I New York, as he sees the public debate around The New York Health Act – a proposal to create a single-payer health plan - gaining momentum. Reports say the bill calls for $139 billion in new state tax revenue by 2022. “That is an issue that is going to be front and center for independent agents in 2019,” he said. “We’re supportive of increasing healthcare coverage. We want people to have affordable health insurance, but we’re just concerned about it being done entirely by the state. I think there are some major cost concerns there.” New Jersey Insurance Commissioner Marlene Caride pointed to two laws signed by Governor Phil Murphy as steps forward in improving access to health coverage. The first law takes effect January 1, 2019,

and continues a shared responsibility payment in the state after its repeal at the federal level. The law requires residents to have health coverage or pay a penalty unless they qualify for an exemption. Governor Murphy also signed a law to create a state reinsurance program. Combined, the two laws resulted in an average overall 9.3 percent reduction in rates in the individual market for 2019, Caride stated. “The governor and this department believe that access to quality affordable coverage and care plays a key role in creating a stronger and fairer New Jersey for all of its residents,” she said. East region leaders are positive about the upcoming year and changes from the November mid-term elections. “For us this year in New York, we have a whole new set of players,” Tomassi said. “We’re trying to get our arms around that to see what it’s like and what their outlook is in regards to some of the insurance issues we have.” Maryland's Redmer said his administration has always tried to be proactive as well as transparent and collaborative. "While there has been a turnover and there will certainly be a learning curve for those new legislators, our process will be the same and the way we conduct business will not change at all,” he said.

Services; House Insurance and Financial Services Insurance commissioner: Eric A. Cioppa, re-appointed in 2017 for another fiveyear term. Joined the staff in 1988 as a statistician, then served as supervisor of Workers’ Compensation.

Insurance committees: House Finance;

Virginia

New Hampshire

Governor: Chris Sununu, R, re-elected 2018

Insurance committees: Senate Finance; House Finance

Insurance commissioner: John Elias,

approved by executive council to serve a five-year term beginning June, 2018.

Rhode Island

Governor: Gina Raimondo, D, re-elected 2018

INSURANCEJOURNAL.COM

Senate Finance

Insurance commissioner: Beth Dwyer,

appointed in 2016. Prior to this appointment, Dwyer was with the Department of Business Regulation for 15 years, first as General Counsel to the Insurance Division and later as Associate Director.

Governor: Ralph Northam, D Insurance committees: House Finance; Senate Finance

Insurance commissioner: Scott White,

appointed in January 2018. Joined in 1998 as a research analyst; later moved to the general counsel office.

Vermont

Delaware

and Economic Development; Senate Finance Insurance Commissioner: Michael S. Pieciak, appointed in 2016. Regulates financial services, including the insurance, captive insurance, banking and securities industries.

Development/Banking/Insurance/ Commerce; Joint Finance Insurance commissioner: Trinidad Navarro was elected in 2016.

Governor: Phil Scott, R, re-elected 2018 Insurance committees: House Commerce

Governor: John Carney, D Insurance committees: House Economic

JANUARY 7, 2019 | INSURANCE JOURNAL | 25

2018 AGENTS of the Year Welcome to Insurance Journal’s Agents of the Year report. This report features 20 agents who define what it means to be a successful independent agent today. These agents are more than top sellers. While they have achieved impressive success in sales and demonstrated laudable business intelligence and

Jacob Barzivand Paramount Exclusive Insurance Services Inc. Encino, California Jacob Barzivand started working as an insurance producer right after college at the age of 20. Now, at just 26, he’s built a sizable book of business in the transportation sector. “I was intrigued by the fact that insurance companies had such a big impact on the world, and if there was no insurance, we wouldn’t be able to survive,” he told Insurance Journal. He attributes his success to hard work, persistence, and honesty but he understands teamwork plays a huge role as well. “The key to success is to have the right team in place,” he said. “My team is like my family; we get things done.” His biggest challenge so far is youth. “It’s difficult for a business owner to trust someone who has not been in the business as long as they have, but I overcome that with my expertise and knowledge.” His advice to other young people on insurance: “It is an amazing career.”

entrepreneurial skills, they also have shown they have a passion for what they do and a commitment to professionalism and, in many cases, specialization. For them, being an insurance agent is more than a job. Insurance Journal’s Agents of the Year come from all regions of the country, live and

Ryan Moss

Higginbotham Ft Worth, Texas Ryan Moss and his team at Higginbotham are specialists in the marine and energy silos. Moss started in the insurance business in 1997 after working as a stock broker with a national firm. “I always liked the insurance world and knew that it was a very stable environment to establish a career,” he said. Moss started his own agency in 1999 and grew it organically until 2010 when it was acquired by Higginbotham. He now serves as managing partner for Higginbotham’s South Texas region. Persistency and building a credible brand around his local team, are some of Moss’ keys to success. “My team mates in our local office deliver an exceptional customer experience,” Moss said. In the future, Moss plans to trade down some smaller accounts and continue the team’s accountability program to remain competitive in today's market.

26 | INSURANCE JOURNAL | JANUARY 7, 2019

work in cities or towns big and small, and know the importance of giving back. Information included in this report was voluntarily submitted online by agents and was supplemented by other public information sources. There are many more agents who deserve mention than are profiled here.

Robert Foote

Steve Brooks

Brian Schneider

Frank H. Furman Inc. Pompano Beach, Florida

B&B Premier Insurance Solutions Agoura Hills, California Steve Brooks started his own agency in 1988, after four years at a small agency. In 2010, the agency merged with another agency to form B&B Premier Insurance Solutions. Today, B&B Premier Insurance Solutions is the largest independent agency in the Conejo Valley area of California with 50 employees. Brooks targets high net worth accounts and attributes his success to networking. “I get all of my clients from networking, and centers of influence, charitable groups,” he told Insurance Journal. “I always try to meet people and get interested in what they like … People do business with people they know, like and trust.” Brooks has remained an active member of the insurance industry and has served as president of the San Fernando Valley Association. He has served on many committees for IBA West/IIABCal and on insurance company agents’ councils and on legislative insurance councils.

Higginbotham Fort Worth, Texas Brian Schneider is a commercial insurance broker and managing director with clientele in a variety of sectors, both nationally and abroad. He uses his knowledge and experience to develop strong relationships with his clients and insurance carriers. He helps implement specialized insurance and risk management solutions for businesses. He also serves as a mentor to new producers in Higginbotham’s Mentor Program. Schneider attributes his success and the growth in his book of business to the power of referrals. “The growth in my book is primarily attributed to referrals from clients and colleagues,” he told Insurance Journal. “Additional team and support staff for our clients will be the key to future growth.” Mason specializes in private equity, public sector, hospitality, franchise industries and holds designations for Commercial Lines Coverage Specialist (CLCS) and Certified Insurance Counselor (CIC).

Rob Foote is an experienced insurance and risk management advisor to the roofing industry. In 1992, Foote launched the Roofing Division of the Furman Agency to provide innovative insurance programs and risk management services that serve the financial objectives of the firm’s roofing contractors by helping them reduce insurance costs and protect their balance sheet. With 27 years of expertise in the roofing industry, the agency is licensed in 50 States, employs 68 experienced insurance professionals and provides insurance and risk management services for 109 roofing professionals. Having established a roofing industry Center of Excellence in 1992, Foote is actively involved in local, state, and national roofing contractors' associations in order to keep on the cutting edge of trends and threats. The market intelligence that he gathers allows him to communicate with his clients.

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2018 AGENTS of the Year Brian Kapiloff

Insgroup Inc. Houston, Texas Brian Kapiloff is a fourth-generation independent insurance agent specializing in the real estate and construction industries. His great-grandfather, Wolf Bell, started Bell Insurance Agency in Houston in the 1920s. Kapiloff’s great uncle, "Bussie" Bell, and father, David Kapiloff, later joined the firm, which was sold in the 1970s. David Kapiloff eventually opened his own agency, which Brian joined in 1992. What began as a small local agency primarily handling small commercial and personal lines has evolved “into a leading regional firm focused on mid-market and large commercial accounts in a variety of industries, employee benefits for large groups, and private clients,” said Brian Kapiloff. Kapiloff serves as president and CEO at Insgroup and continues to produce insurance business. He attributes much of his success to mentors both inside and outside the agency, as well as to its many talented long-term employees. “If there is one thing I've learned over the past 26+ years it is that we are really in the people business, and that growth is dependent on having the right people on the team to serve clients and help solve their problems,” Kapiloff said.

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J. Colin MacNab

MJ Insurance Indianapolis, Indiana With a book of business currently concentrated in the energy/mining and manufacturing sectors, as well as some temporary services, J. Colin MacNab began his insurance career as an underwriting trainee with CNA in 1990. He attributes CNA's robust training program and his experience as a multi-line underwriter with the company, with providing him with “a deep understanding of how insurance companies operate.” “Having that foundation enabled me to immediately succeed in engaging with business owners/operators to help them select the right insurance carrier and programs to fit their business,” he said. Since joining MJ in 1993, he has worked mostly with midto large-sized companies that have unique or difficult risks inherent in their business. MacNab says he continues to hone his craft and works to stay current as the insurance business evolves. He seeks “to be an advisor that helps businesses understand what drives their total cost of risk in order to create the most appropriate risk transfer strategy (including insurance placement) to help them achieve their business goals.”

Laura Sherman

Baldwin Krystyn Sherman Partners Tampa, Florida Having co-founded Baldwin Krystyn Sherman Partners (BKS-Partners) in 2006 and Baldwin Risk Partners (BRP) in 2012, Laura Sherman specializes in providing risk management solutions for successful individuals and families. BKSPartners in 2018 was named Gold Best Agency to Work For – Southeast by Insurance Journal and recently was tagged as one of the best places to work for women in the U.S. by Fortune Magazine. Sherman led the private risk management practice for BKS-Partners until 2017, when she began focusing on family office and private risk management clients. Earlier in her career, Sherman was the senior vice president and managing director of Wachovia Insurance Services Private Risk Management division for the Georgia region. She also worked with Chubb Group of Insurance Companies in various roles, created the Ferrari Insurance Program and toured with the PBS series, Antiques Roadshow, for many years. “My practice has been built on education: speaking engagements, white papers, webinars and benchmarking,” Sherman said.

Maureen Gallagher

Kendall McEachern

AssuredPartners Southfield, Michigan

Acentria Insurance Destin, Florida

As AssuredPartners’ national practice leader for real estate, Maureen Gallagher specializes real estate accounts and large complicated workers’ compensation. In her own book of business, Gallagher has enjoyed a long-time client retention rate of 98.7 percent and has assisted many producers reach their goal of exceeding a $1 million commission book. She has developed a proprietary process for negotiating collateral return under large deductible workers’ compensation programs. Gallagher also has assisted businesses secure more than $100 million in returned collateral in the last five years and has developed a proprietary audit process correcting errors and misclassifications. In addition, she has developed, and teaches, real estate and workers’ comp certification classes. Having earned numerous professional designations, Gallagher has served as an expert witness in her area. When it comes to achieving success, Gallagher says “it’s important to build and support a team around you, have a service first attitude, think strategically, pay attention to details, work hard and do the right thing.”

As chief executive officer, Kendall McEachern brings more than three decades of industry expertise to Acentria Insurance. He specializes in risk management and insurance for the real estate and construction industries, while focusing on the placement of property insurance. McEachern’s team of professionals insures over 400,000 multi-family units, with property values in excess of $22 billion and four million square feet of commercial office space and real estate buildings. Prior to founding Acentria, McEachern served as a managing partner, senior vice president and board member for Insurance Office of America (IOA). He was recognized as Rookie of the Year, Agent of the Year and Top Sales Award for seven out of his nine years with IOA. McEachern prides himself with building and cultivating relationships with his clients, some of which he has had for decades. McEachern works tirelessly to reduce potential risks to keep claims at a minimum for his clients. In the event his clients do have a claim, he has an in-house claims team that works directly with carriers on behalf of his clients.

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2018 AGENTS of the Year John Gaynier

Chad Hoxie

Michael Tomasulo

Negar Sharifi

Rogers & Gray Insurance South Dennis, Massachusetts John Gaynier began his career in insurance in Florida after graduating for Western Michigan University in 2006. Like most people in insurance, he fell into the industry and didn’t specifically seek it out. Early years in the industry were spent on the phone and networking to grow his book of business, which eventually grew to a large network of referral sources. In 2011, he relocated to Massachusetts and started again from scratch with Rogers & Gray. In seven short years he rebuilt a large book of business. Focusing on a few specific niche markets, including real estate, hospitality, construction and transportation, has helped Gaynier find success. “Focusing on a couple niche market segments has helped me to become an expert in those fields,” Gaynier told Insurance Journal. “As I continue to grow my book, my reputation has grown within those industries, which has produced consistent referrals,” he said. In 2017, Gaynier became a partner/executive vice president at Rogers & Gray. He continues to grow his book while mentoring newer producers.

Alliant Insurance Services San Diego, California Chad Hoxie is a vice president with Alliant Insurance Services specializing in workers’ compensation. Prior to joining Alliant he worked on the insurance carrier side of the business in various roles including serving as an analyst/compliance specialist, underwriter and claims adjuster. After joining Alliant, Hoxie used his background and skills developed on the carrier side to create “out of the box” solutions for his client’s workers' compensation programs. He works to further enhance Alliant’s proprietary workers’ compensation offerings. Hoxie's expertise includes the buildout and negotiation of client insurance programs, and evaluation and analysis of alternative risk transfer plans. He says maintaining a high level of education is critical to growing and retaining a book of business. “The learning experience from my time on the carrier side and through my professional designations has proven to be invaluable,” Hoxie said. “Using my skillset to develop best in class solutions, transparency of my work, and tailoring a risk management program to the clients’ needs will remain the objective for my work product.”

AHT Insurance Boston, Massachusetts Mike Tomasulo has more than 20 years of experience working with companies to negotiate and understand their management liability and risk management programs. Tomasulo has worked with hundreds of publicly traded companies, from OTC to Fortune 100s, in placing their directors and officers liability insurance. Today, he serves as AHT’s national practice leader for management liability, as well as a principal of the firm heading up the Northeast operations. Prior to AHT, Tomasulo was a senior vice president and team leader at AON Risk Services in New York City in the Financial Services Division. In addition, he was a founding member of the NASDAQ Insurance Agency, creating the Nasdaq Stock Market’s in-house insurance brokerage. He ran the agency’s East and Central regions up until the time he assisted in successfully selling the agency to AON. Tomasulo is a frequent speaker at industry events discussing topics regarding management liability, board education and corporate governance. He attributes his success to building excellent client relationships through expertise, service and results.

AssuredPartners Lake Mary, Florida Negar Sharifi graduated from the University of Florida with a degree in accounting. Her first job out of college was within the audit department at Deloitte & Touche. During her time there she worked within the timeshare/hotel/ property sector of accounting. In 2008, Sharifi decided to leave accounting behind and learn more about the insurance side of real estate specializing in large scale property insurance and contractors. Since then, she has been the insurance agent on approximately $4.5 billion in total property values throughout Florida. Her book of business is comprised of condos, apartments, commercial buildings and hotels. She was named as one of the top 5 percent of agents nationwide in new business sales and book size from 2008 – 2018. Sharifi says her background working for a Big 4 accounting firm taught her how to work hard and be disciplined in setting and achieving goals. She credits some success to her gender. “I also believe that being a woman in a mostly male-dominated business helps me bring a different dynamic to my clients,” Sharifi told Insurance Journal.

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James Chalmers

Chalmers Insurance Group Bridgton, Maine James Chalmers is a fourth generation Chalmers owner. After graduating from Bowdoin College, he worked with an insurance company in the Boston area, attending its producer school as well as working in various company departments. He then returned to Maine to join the family insurance agency. Chalmers specializes in summer camps, from traditional eight-week boys and girls summer camps to intensive one-week sports camps to organizations that offer year-round programming. He also oversees the outside sales team and benefits division of Chalmers Group. The Chalmers Camp Insurance program is a multi-generational niche within Chalmers. “We have close to 100 years of continued experience of working with youth summer camps across the Northeast and our passion for camps shows through in our work,” he told Insurance Journal. “Because of this experience we know the camp industry, we are involved in state and national organizations that work specifically with camps and we have a dedicated team within Chalmers that services our camp program.”

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2018 AGENTS of the Year Kevin Mason Acentria Insurance Destin, Florida Kevin Mason is president of Acentria Insurance. He has more than 25 years of industry experience, specializing in multi-family protection, while focusing on national condominium associations. Before co-founding Acentria Insurance, he served as branch manager for Insurance Office of America (IOA) where he was recognized as Rookie of the Year. During his tenure with IOA, he received the prestigious honor of Agent of the Year and became managing partner for North Florida operations, while serving on the IOA Advisory Council. Mason earned his degree in Management from the University of West Florida. He is very active in his community and served for more than a decade on the board of directors of Destin Charity Wine Auction Foundation, which funds over 14 children’s charities along the Florida Panhandle. He is also a member of the Destin Chamber of Commerce, Community Association Institute and Florida Association of Insurance Agents. Mason attributes his success to the agency’s focus on risk management services, having an in-house claims department and cultivating relationships. INSURANCEJOURNAL.COM

Kevin Loar

Woodruff Sawyer San Francisco, California Currently a senior vice president and partner at Woodruff Sawyer, Kevin Loar began his career there in the IT department while still in college. He worked in the tech industry for several years before returning to Woodruff Sawyer in 2003, where he has served in various positions, including as primary account handler for key technology clients. Loar also has worked with the agency’s Assurex Partners to develop a guide of compulsory policies placed internationally, focusing on brokerage and consulting services that address clients’ global property/casualty exposures. He was able to work for a while in London where “I gained valuable expertise placing and managing international insurance programs, an expertise that continues to be of critical importance in consulting my international clients today,” he says. Being disciplined and confident has helped him in his career, Loar says. “Discipline in following a process that works for me and being confident in that process and the success it can bring me.” In the coming years, he hopes to ccontinue to fine-tune both.

Carrie Babij Desert Insurance Solutions La Quinta, California Carrie Babij is president and co-owner of Desert Insurance Solutions Inc. of La Quinta, Calif., and Scottsdale, Ariz., where she specializes in insuring high net worth clients and in management liability. Desert Insurance Solutions is a rapidly growing independent insurance agency that provides comprehensive risk management for businesses and sophisticated individuals. Before starting Desert Insurance Solutions, Babij served as senior vice president at Wells Fargo Insurance, where she provided commercial insurance to Wells Fargo institutional clients, first in Seattle and later in Los Angeles. She also has extensive insurance experience with personal lines insurance for complex risks and high net worth individuals. She is considered the only producer for the agency. “We have one business development professional in Arizona but otherwise all of our staff are salary paid, inside service people,” she said. “We offer a high touch level of service for every client which is almost extinct now in this industry,” she told Insurance Journal. “Our growth of 35 percent year over year is proof this method is working.”

Scott Reese

AssuredPartners Eugene, Oregon As team leader and producer at AssuredPartners/ Alliance, Scott Reese and his team develop insurance, risk management and financial protection strategies that fit today’s complex financial environment and his customers’ personal and commercial needs. In addition to serving as client advisor to several national accounts, Reese designs and implements association group insurance programs, including risk management programs for clients, alternative market arrangements, educational training and quality management initiatives. Prior to forming Alliance Insurance Group in 2007, he began his career as a loss control representative for both the EBI and CIGNA insurance companies, working on large, complex risk management accounts. From there he went on to develop and manage a risk management practice group for an independent agency in Colorado. He later joined a national brokerage firm to provide leadership in the development and building of the Senior Housing Healthcare Practice group. Specializing in the senior living market has been key to Reese’s success over the past 20 years.

Gregory Deems Rogers & Gray Insurance Agency Kingston, Massachusetts Greg Deems, vice president and sales executive at Rogers & Gray Insurance, began his career in the insurance industry in 2011. Prior to that he worked for a company that often partnered with insurance agencies and taught a hands-on crash prevention class geared towards fleet safety and new drivers. “When it was time to move on from there, I saw the insurance industry as the next logical step,” Deems told Insurance Journal. He interviewed with a few of the agencies he had worked with but decided Rogers & Gray was the best fit. Deems has found success by specializing in construction accounts. “I took some time looking at lots of different industries to focus on and hit on a couple of construction companies early,” he said. “With the agency having an expertise in this area it quickly became my focus and has remained so.” Deems said his book has been built primarily through cold calling. “As my network builds, I am looking to work my book and connections to add a flow of referral driven business over the next few years.”

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National Special Report

Future of Agent Distribution How Agents Are Becoming Stronger, More Valuable Carriers need what agents have control over the customer

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By Andrea Wells

funny thing is happening on the way to the future. As consumers’ and carriers’ behaviors, attitudes and expectations have been changing, independent agents are evolving to better serve both customers and carriers. In terms of customers, agents who have been lectured for years about adding value, are positioning themselves to offer products and services their customers want when and how they want them. In terms of carrier-agency relations, agents are maneuvering to where they may now have the upper hand and some carriers need them more than they perhaps ever have. Heading further into the future, experts say the lines between agency types will continue to blur and brick-and-mortar agency operations may become less important. At the same time having a local brand, including a digital presence in a community and in targeted markets, is so important and will perhaps become even more so in the years ahead. As they head into the future, agents are positioned to become even stronger as they continue to evolve to meet the needs of customers and carriers.

Power Shift

The main point about the future is that the power balance in the industry has shifted, with insurance carriers now relying much more heavily on distribution than in years past when underwriting was king. Dennis Chookaszian, University of Chicago professor and the former CEO of CNA, analyzed the carrier-agent shift at an Insurance Journal sponsored conference in July 2018. “If you look at the profitability of an insurance transaction today, maybe 40 percent or close to 50 percent goes to distribution, [while] the underwriter gets 30 to 40 percent and service has come up to maybe 5 percent to 10 to 15 percent,” Chookaszian said. That’s a big shift from 40 to 50 years ago when carriers derived most of their profitability through positive underwritINSURANCEJOURNAL.COM

ing results. “Today, the core competency has shifted primarily to distribution and control of the customer,” he said. He believes large commercial brokers in particular command the power in today’s industry quite simply because they control the customers. “What’s happened is that the carrier has been unable to sustain the margins that they once were able to achieve, and those margins have gone to both distribution and service,” he said. “In the end, the profitability of an insurance transaction is controlled by core competencies.” Today, brokers are valued more highly, according to Chookaszian, because they are able to achieve a higher return on equity. “While distribution in the past was kind of sleepy and the insurance agents would make a little bit of money,” industry competition for customers has fueled a “fundamental shift toward distribution,” he told Carrier Management in a 2018 interview. “It’s become so competitive that the carriers basically are always out looking for new accounts,” and in their efforts to capture new business, “they’ve got to pay more in commissions.”

Old Lines Blurring

Old definitions of agency types — captive, independent and direct channels — are less useful than they used to be. “The three major forms of traditional distribution — captive, independent agency and the direct channel — as we know it, that’s all kind of gone out the door,” said Matt Masiello, CEO of SIAA. In his view, the industry has experienced a “merger” of distribution channels. “Now we’ve got all these other things — online aggregators claiming that they’re independent agencies and box stores doing [selling] insurance and claiming that they’re independent.” On top of that, carriers are themselves experimenting with multiple forms of distribution. Masiello sees the changing focus on distribution as a huge opportunity for all independent agencies, not just for the large brokers.

continued on page 32

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National Special Report continued from page 31 “Consumers are looking for choice” and that’s going to benefit the independent agency channel, he said. Not only are traditional captive carriers reducing their captive agent pool, but they are also opening their doors to independent agents, Masiello added. “In many instances we’re now representing those same brands … independent agencies now represent Liberty, Nationwide and Allstate, all these brands. Where there’s a captive vacuum created in some of these communities, independent agencies not only have the ability to fill the gap, but also have the ability to fill it with the same brands that the consumers had before,” he said. Consumers don’t know whether their insurance is represented by a captive agent or an independent agent. “That’s a huge opportunity for independent agencies to get out in their marketplace, raise their hand and say, ‘Hey, we’re here, and we have choice.’” Consumers do not delineate among distribution channels, according to Mark A. Ribisi, president and CEO of AIS Management. The process by which consumers now purchase insurance can be a circuitous route similar to purchasing cars where consumers bounce between online and in person purchases, he said. “Research is performed online and execution occurs direct, through an independent agent or captive,” Ribisi said. “I believe that the lines between channels will blur,” he predicts. “Independent agents will be important, but they will need to be more comfortable with consumers that come to them online.” Human touch will remain important to many. Even today, all direct funnels have a call center, he noted. Ribisi predicts on-demand buying and consumer choice will affect other lines the way they have personal lines. “Certainly, in the personal lines space, insurance shopping has become an on-demand product,” he said. “Consumers want the flexibility to purchase it and use it when, where and how they want.”

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Building and maintaining a local identity in a tech-focused global age will be a challenge. SIAA’s Masiello believes the local brand will become even more important than it has been in the past. He admits he’s bullish on the local brand as SIAA’s membership encompasses many smaller, family-owned agencies, but he’s a believer that most people still want to buy locally. “The challenge for local independent agencies will be how to remain relevant,” he said. “They can’t be the independent agency of the past. They’re going to have to evolve. They’re going to have to have a digital footprint in their community.” Ribisi believes that the internet has changed the definition of local brand. The traditional agency brick-and-mortar brand is not as important because more consumers wish to transact and interact via mobile devices and online. “Typically, it has been brick-and-mortar with a sign,” he said. “The reality is that 20 years ago, part of the agent’s value proposition was access to products. Now, there is unlimited access to product 24/7 online so the agent value proposition has to evolve.” One way to evolve might be to pay attention to demographics. Ribisi cited the insurtech insurer Lemonade’s ties to altruism as an example. “Profits are passed to charities,” he said. “That may have value in certain demographics.” He also thinks independent agencies will have to offer more advisory services and be able to target niche markets to succeed in the future. For AIS, losing some of its brick-andmortar brand has been a good thing. “Over 40 percent of our staff is home-based and reside in eight states.” That has allowed AIS to have expanded hours of operation while lowering the attrition rate. Plus, Ribisi says the firm doesn’t risk losing good employees because they decide to relocate. Brightway Insurance, a national property/casualty insurance retailer selling through franchised independent shops nationwide, is banking on the local brickand-mortar still being somewhat relevant.

“We believe a local presence is important to consumers; it gives them the peace of mind that there is someone in their community with whom they can speak/ ask questions if they want to,” said Leslie Kolleda, vice president, agency growth and development, at Brightway Insurance. However, whether the interaction happens in a brick-and-mortar location, by phone, or video chat, is not important. “What’s important is that the consumer has the choices in how, when and where to interact with their agents available to them,” she says. Brightway began franchising operations in 2008 and is now in 21 states but serving customers in all 50 states. Brightway agency owners receive customer service, carrier relationships, marketing, accounting and technology tools. “So, while we believe a local presence is important and a well-known brand is important, what’s really important is that, as an insurance distribution company, we are committed to helping consumers do business with us in a way they want, when they want,” Kolleda said. “The onus is on us — as agents — to be there in ways that are meaningful to consumers and that fulfill their needs at the time.”

Technology Levels the Playing Field

Technology is creating new opportunities in agency distribution by changing the user experience. Sean Conrad, principal at EPIC Insurance Brokers & Consultants in Irvine, Calif., likens the insurance industry to the transportation industry where tech-enabled firms such as Uber have been able to disrupt a very established industry by changing the user experience. “People decided, ‘I liked this experience better and I’m going to use this instead of calling a number for a taxi.’ The company grew enormously and I think that surprised everyone in that industry,” he said. He sees similar trends happening in insurance as technology continues to level the playing field. “When you have an absence of customer INSURANCEJOURNAL.COM

choice, and you have very solidified giants in a space like the insurance brokerage space, it can feel like buyers have limited selection,” he said. But technology changes all of that as the user experience becomes more and more important, he says. “I’ve met people in my local market that are starting new agencies that are leveraging technology and a user interface and pitching this to middle market companies,” he said. Years ago, those middle market firms would never have given a new, startup agency the time of day. “Now they’re taking a look at those agencies and saying, ‘Hmm, interesting. It gives me a different user experience. Something I’m more accustomed to, or that I as a consumer just like better.’” Technology allows new players with good ideas to push those out into the world in a cost-effective way, Conrad said. “If buyers like what they see, they’re prone to give those new companies or people that are doing new things that feel a little bit more like an Amazon, Uber-type experiences, I think they’re going to get an opportunity to pitch that to buyers that maybe a couple of years ago would never consider it,” he says. It’s not only customers who will enjoy a better user experience. Agents themselves should enjoy better working conditions and tools. “I think more is going to be expected out of agency management systems,” Conrad said. The overall customer experience depends on that — from agent customers to consumers. “There’s going to be a continual push to develop those systems and I think there are possibly changes on the horizon with better versions from an agency operator side.” How agencies prospect for business has already changed, with a focus on data. “The expectation today and in the future will be that if you’re going to prospect and call on a middle market company, that you have a very full picture around that business and how they fit into their industry,” Conrad said. That means having data. “Using data from a variety of sources INSURANCEJOURNAL.COM

is going to be more and more important when insurance professionals walk into a prospect meeting,” Conrad said. That means agents must understand on a real functional level what’s happening with that business. “What that business is all about, what they do, their unique signature in terms of their loss profile, what’s happening with claims, what’s happening on the employee benefits side,” he said. Agents must be equipped with knowledge on the business’ competition, too. “Are they an outlier in the sense that they’re performing better than their peers and, if so, what’s the strategy to help them continue to stay out in front? Are they having some challenges in areas like claims that are causing them to be less than competitive and then as an agent or as an advisor, how can you fix that?”

Consolidation and Partners

Professor Chookaszian thinks agents are in a strong position. In fact, they may be so strong that they are scaring some property/casualty insurance companies, according to Chris Burand, CEO of Burand & Associates and columnist for Insurance Journal’s The Competitive Advantage. The ones that are scared are scared because of scale, Burand says. The consolidation of agencies, especially the very large brokerage houses, is a real concern. “Consolidation that is happening today has led to 15 distributors of insurance that are bigger than all but say 40 insurance companies out of 900 insurance companies in total,” Burand said. “And the insurance companies are pretty nervous about this.” Some carriers are smart and they don’t care. “They know they’re smart enough to make it work anyway, and that’s valid,” Burand said. “But a whole lot of companies out there are pretty scared, because they’ve never run their company in a fashion that wasn’t dependent on being able to tell their agents exactly what to do.” And now agents, the top agents, whether it’s an aggregator [group] or whether it’s a consolidator … they’re in the position to abso-

lutely tell those companies what to do.” Agents now have the power to tell their carriers to invest in technology, to invest in interface and automation. “Some of these consolidators and aggregators are going to force this issue; they’re already starting,” he said. To counter, carriers are creating partnerships of their own. “They have invested collectively billions of dollars in about 100 new insurtech independent insurance agencies,” he said. “So their idea I think, I can’t speak for all of them, is to invest and partially own these new independent insurance agencies. It’s their counterweight to the consolidation that’s occurring. And if the consolidators, aggregators are too big, then they can maybe place more emphasis back on these insurtech insurance agencies they own.” It’s an arms race, Burand says. “The battle from the agents’ perspective is to get big enough to thwart the carriers’ growth,” he said. “So, they sell or join clusters.” Burand predicts the battle between agencies and companies will continue to go back and forth as they fight for control over customer relationships in the future. “It’s about control of that customer relationship,” he says. Obtaining and maintaining that control in a competitive environment will take work, as always. “Agents have to decrease their cost and/or increase the quality of their service,” Burand said. “They don’t really have a choice because in a perpetual soft market with all this competition companies are going to be pressed to find less expensive ways to distribute insurance.” SIAA’s Masiello sees more evolution ahead in terms of agency relationships with customers and carriers. “Independent agencies that are just sitting there servicing their books of business, that’s not a value proposition to either the companies or consumers,” he said of relationships with customers. “They’ve got to start to evolve into a sales-distribution, community-based, brand-based, both digital and out in the community doing things [organization].” JANUARY 7, 2019 INSURANCE JOURNAL | 33

National Closer Look

Sexual Harassment Not#YouToo

How Not to Become Part of the #MeToo Conversation, and Where to Look for Help If You Do

By Lainee Beigel

ot long ago, if someone asked you if you had heard about Harvey Weinstein and Kevin Spacey, you would assume they were working on a film together. Or, if you were asked your thoughts on casino mogul Steve Wynn, you would think the question was in reference to his next big project in Las Vegas. However, in a very short period of time, Weinstein, Spacey and Wynn have become three of the bigger names mentioned as part of the #MeToo conversation sweeping the country. Employees, colleagues and even job seekers have made allegations of sexual harassment against a number of celebrities, politicians and workplace supervisors across nearly every industry. The results of these allegations (true or not) can cause significant financial and reputational damage to an individual and/ or an organization. And if you think your organization is immune, it’s not. Truth be told, what gets reported in the news is only the tip of the iceberg. That’s because sexual harassment occurs anywhere people interact. Many instances of sexual harassment in the workplace never make their way into the mainstream discourse even though they result in internal investigations, arbitrations and lawsuits. Companies are taking a fresh look at 34 | INSURANCE JOURNAL | JANUARY 7, 2019

internal processes to see where issues can be identified and how they can be prevented. Companies dealing with their own #MeToo situations often look to their insurance policies to cover potential liabilities that may arise from those situations. It is also becoming more common for these types of claims to trigger more than one policy. This article provides an overview of some of the issues presented when investigating coverage under different policies and discusses strategies companies can employ in order to avoid triggering their insurance coverage in the first place.

CGL Coverage

Most companies carry commercial general liability (CGL) coverage, which for purposes of this article,f applies to third-party liabilities arising out of “bodily injury” and “personal and advertising injury.” Coverage generally is available for “bodily injury” only if: (1) the “bodily injury” is caused by an “occurrence” — i.e., an accident, including continuous or repeated exposure to substantially the same general harmful conditions; and (2) the “bodily injury” takes place during the policy period. Coverage is available for “personal advertising injury” only if it arises out of an offense — such as oral or written publication of material that either slanders or libels a person, or violates their right of privacy — that is related to the insured’s business and occurs during the policy period. At first blush, allegations of sexual harassment could potentially trigger coverage under CGL policies. For example, bodily injury liability coverage might be available for emotional injuries claimed by employees that allegedly resulted from inappropriate interactions with co-employees facilitated by employers failing to supervise those co-employees. Emotional injuries may or may not qualify as bodily

injury depending on what state the allegation occurs in. More likely, CGL coverage for any bodily injury to an employee of the insured would be barred by the employer’s liability exclusion. This exclusion is standard in CGL forms and excludes coverage for bodily injury to an employee of the insured arising out of and in the course of employment by the insured. CGL policies are also frequently endorsed with employment-related practices exclusion endorsements that preclude coverage for bodily injury and personal and advertising injury to a person arising out of “[e]mployment-related practices, policies, acts or omissions,” such as defamation, harassment, and humiliation, among other things. The rationale for including these endorsements on CGL INSURANCEJOURNAL.COM

basis as opposed to applying on an occurrence basis. Only a policy in effect when the claim is made — as opposed to when the actions giving rise to the claim occur — would be triggered. • Policies providing EPLI coverage often relate later claims to earlier ones so as to ensure that only one policy is triggered. • EPLI policies may also include a bodily injury and/or criminal conduct exclusion. Depending on the circumstances, the insured may have to look to another policy for coverage. • The limits available under EPLI coverage may be less than the limits available under CGL coverage. Not only that, EPLI coverage limits can often be reduced by both indemnity payments and costs paid by insurers to defend their insureds.

D&O Coverage

policies is simple: CGL insurers don’t provide coverage for risks that are within their insureds’ control.

EPLI Coverage

To address the general absence of coverage for employee injuries under CGL policies, the industry developed employment practices liability (EPLI) coverage endorsements to CGL policies, and separate EPLI policies, for damages or losses arising out of wrongful acts/wrongful employment acts against the insured’s employees and others, including applicants for employment. Some of the main issues to focus on in EPLI coverage are as follows: • EPLI coverage often applies on a claims-made or claims-made-and-reported INSURANCEJOURNAL.COM

One type of coverage that might be overlooked when it comes to alleged sexual harassment is directors and officers liability (D&O) coverage. Specifically, if a company operates through a board of directors, then: (1) allegations might be levied by the victim of the alleged harassment stating that the board failed to properly ensure company policies and practices were enforced; (2) a board member’s conduct might cause one of the corporation’s shareholders to initiate a derivative suit; (3) the company might have to indemnify a board member alleged to have done the harassing if the company’s by-laws require it; and/or (4) the company may be served with subpoenas or other requests for information as part of an investigation into the harassing board member’s conduct. D&O policies might provide coverage for a loss that an insured becomes obligated to pay in these situations. But D&O policies may bar coverage for matters pertinent to sexual harassment allegations through exclusions applicable to claims arising out of any: (1) employment-related wrongful act and/or (2) deliberate violations of law.

Company Efforts to Prevent Harassment It is important to understand the types

of coverage outlined in this article and the ways in which policies may be triggered. Having these types of policies in place provides companies with security in the face of potentially adverse circumstances. However, like most problems, common sense measures can go a long way. The best way to prevent claims from the outset is to implement extensive and consistent harassment training throughout all levels of an organization (including company executives, who might find this type of training unnecessary). Executives may not sign and acknowledge anti-harassment policies, allowing a plaintiff’s attorneys to argue that employees are not held to the same standards. In order to prevent such occurrences, companies might consider implementing protocols (whether internally or with a third-party vendor) that hold all employees accountable for completion of corporate training. Moreover, reporting structures should allow employees to feel comfortable reporting such incidents.

Early Renewal

Due to an uptick in claims and potential exposure, underwriters may begin requesting more detail on applications regarding procedures and protocols during the renewal process. There may also be higher levels of scrutiny involving certain venues, claims history, and resolution of outstanding claims.

Conclusion

Against the backdrop of the #MeToo movement, there are a number of strategies that companies can employ to prevent harassment in their workplaces. Education is a great starting point for companies to begin to understand their risks and implement controls. However, even the best efforts sometimes fail. In that case, there are insurance products like the ones discussed to protect companies. Beigel is a juris doctorate and client executive in the Philadelphia office of RCM&D, an independent insurance advisory firm for risk management, insurance and employee benefits in Baltimore, Md. JANUARY 7, 2019 INSURANCE JOURNAL | 35

Regional

Business Moves

WebBank, National Partners

Salt Lake City-based digital lender WebBank has agreed to acquire Denverbased National Partners, an insurance premium finance company and subsidiary of MLF Financial Group. This is the first foray into premium finance for WebBank, a national issuer of loans in partnership with brand names like Dell, Prosper, PayPal, Fingerhut, LendingClub and Yamaha. WebBank is owned by Steel Partners Holding Corp. National Partners, founded in 2016, provides commercial premium finance services to agents and insureds.

Hub International, Altas Partners

Global insurance broker Hub International said it has received a “substantial minority investment” from funds managed by Altas Partners, an investment firm based in Toronto. Funds managed by Hellman & Friedman remain the largest investor in Hub and the company’s management team continues to hold a significant equity position. The latest transaction implies a total enterprise value for Hub of more than $10 billion.

East AssuredPartners, AOPA Insurance

AssuredPartners Inc. has added the aviation book of business formerly owned by AOPA Insurance Agency Inc. into the AP 36 | INSURANCE JOURNAL | JANUARY 7, 2019

Aerospace operations of AssuredPartners. AOPA is a Frederick, Md.-based aerospace specific association for aircraft owners, renters, and certified flight instructor or aviation business operators. Following the acquisition, the association will continue to operate its agency with non-aviation related insurance products. This transaction marks the 34th acquisition for AssuredPartners in 2018.

Kaplansky Insurance, Burak Insurance

Kaplansky Insurance, an independent, Needham, Mass.-based agency, has acquired Burak Insurance, located in Canton, Mass. The addition of Burak marks Kaplansky Insurance’s 31st overall acquisition and its fourth for 2018. The agency currently operates 12 locations throughout Massachusetts.

Hub International, Nolen Associates, Dadgar Insurance Agency

Global insurance broker Hub International has acquired the assets of Nolen Associates Inc. in Springfield, Penn., a medical malpractice insurance agency representing more than 1,000 healthcare professionals in Pennsylvania, New York, New Jersey, Delaware and Maryland. Following the acquisition, Nolen Associates President Ray Nolen and Vice Presidents Patrick Nolen and Michael Nolen will report to Shawn McLaughlin, national

practice leader of Hub Healthcare and CSO for Hub New England. In a separate transaction, Hub acquired the assets of Dadgar Insurance Agency Inc. in Woburn, Mass., an independent insurance agency that provides coverage to more than 500 restaurants and 1,500 landlords and apartment building owners throughout Massachusetts and New England. Following the transaction, Dadgar Insurance President Anowsh Dadgar will join Hub New England and will report to Charles Brophy, U.S. East regional president of Hub.

Hilb Group, Mackintire Insurance

The Hilb Group has acquired Massachusetts-based Mackintire Insurance Agency Inc., a commercial and personal lines retail insurance agency in Westborough, Mass. The company specializes in the hospitality industry. Following the transaction, Mackintire Managing Director Bob Mackintire and his associates will continue to operate under the company’s existing name. The Hilb Group, a portfolio company of Boston-based private equity firm Abry Partners, now has 65 offices in 17 states.

Midwest AssuredPartners, Carriage Insurance

AssuredPartners Inc. has acquired Carriage Insurance Agency Inc. in Hudson, Ohio, a general insurance agency that will continue to operate under the leadership of Bill Landess. In operation in Hudson since 1983, the agency currently reports annualized revenues of $1.1 million.

Arthur J. Gallagher, Captive Design

Global insurance broker Arthur J. Gallagher & Co. has acquired Chicagobased Captive Insurance Company Design and Operations. Terms of the transaction were not disclosed. Formed in 2002 by Clarity Group Inc., Captive Insurance INSURANCEJOURNAL.COM

Company Design and Operations is a captive consultant focused exclusively on medical and professional liability. Captive participants are all principally healthcare providers from various areas of the industry, including medical facilities, physicians and senior care organizations. Andrew Becker and his associates will relocate to Gallagher’s office in Rolling Meadows, Illinois, under the direction of Patrick Gallagher, head of Gallagher’s Midwest retail operations.

Marsh & McLennan, Otis-Magie

Dean & Draper, Painter Reichman

Dean & Draper Insurance Agency has acquired Painter Reichman & Co., a Houston-based personal and commercial insurance agency. Painter Reichman was founded in 1906 and was purchased by J.T. Curson in 1935. Since then, it has remained family-owned until its acquisition on Dec. 1, 2018, by Dean & Draper, an agency headquartered in Houston. Don Curson joined Painter Reichman & Co in 1976 as the third generation in the Curson family to make a career in the insurance industry.

Marsh & McLennan Agency, the middle market agency subsidiary of Marsh, has acquired Otis-Magie Insurance Agency Inc., an independent agency in Duluth, Minnesota. Otis-Magie’s 46 employees will continue operating out of their existing locations under the name Otis-Magie, a Marsh & McLennan Agency company. Tom Stender, who has served as chairman and CEO of Otis-Magie since 2011, will continue to lead the operation.

Risk Strategies, RiskPro Global Partners

Alera Group, Bailey & Co.

Brown & Brown, Dealer Associates

Alera Group has acquired Bailey & Co., an employee benefits firm in Cincinnati. Beyond traditional employee benefits, Bailey has expertise in private exchanges, partially self-funded benefit plans, and captive-based reinsurance programs. Based in Illinois, Alera Group is an independent insurance agency formed in 2017.

South Central NSM Insurance, KBK Insurance

NSM Insurance Group has acquired the assets of Harahan, Louisiana-based program manager, KBK Insurance Group, which specializes in the towing and transportation industries. NSM has said its ambition is to be the leading provider of niche insurance programs in North America and the UK. NSM is a subsidiary of White Mountains Insurance Group. INSURANCEJOURNAL.COM

Risk Strategies has acquired RiskPro Global Partners, a property/casualty and employee benefits firm in Dallas. RiskPro Global Partners focuses on a number of industries that complement existing Risk Strategies markets including real estate, financial services, hospitality, healthcare, construction and technology. In addition to Dallas, RiskPro Global has offices in Austin and Houston.

Brown & Brown of Kentucky Inc. has acquired substantially all assets of Arlington, Texas-based Dealer Associates Inc. (DAI). DAI provides finance and insurance (F&I) products, coupled with sales and service training, financial performance consulting, and reinsurance services for auto dealers in Texas and other states. DAI has annual revenues of $8.5 million. DAI principals Tony Fincannon and Rick Messenger and their team will join the Brown & Brown Dealer Services practice, which is overseen by Mike Neal, president of Brown & Brown of Kentucky Inc.

Southeast JenCap Holdings, Risk Innovations

New York-based JenCap Holdings (JCH), a specialty insurance business, is acquiring privately-held Risk Innovations, a spe-

cialty wholesale broker in Atlanta. Risk Innovations was founded in 2002 and has been led by Bruce Peddle since then. John F. Jennings, president and CEO of JCH, said the wholesale broker, which has focused on worker’s compensation, was a strategic target for JCH. JCH was formed in 2016 by The Carlyle Group and JCH management to consolidate specialty insurance distribution businesses. This acquisition is the eighth by JCH since its founding.

Hilb Group, Huckaby & Associates

The Hilb Group has acquired South Carolina-based Huckaby & Associates, which sells in South Carolina, North Carolina and Georgia. Ricky Spiro, CEO of Hilb, said Huckaby’s South Carolina presence supports the growth of its Southeast footprint. Managing Director Joey Huckaby will continue to lead Huckaby’s associates out of their existing location in Columbia, S.C. The Hilb Group, a portfolio company of private equity firm Abry Partners, now has 64 offices in 17 states.

West Valley Insurance, Leavitt Group

Leavitt Group has made Valley Insurance Agency, an independent agency located in downtown Redmond, Wash., part of Leavitt Group Northwest. Valley’s Robert Bush, Sheila Siggins and Ginger Patton will remain with the merged agency. Bush and Siggins will work out of Leavitt’s Everett, Wash., office, and Patton will work out of the Auburn, Wash., office. Leavitt Group Northwest has offices in Oak Harbor, Auburn, Everett, and University Place.

Hub International, G.P. Barich Insurance

Hub International Ltd. has acquired the assets of G.P. Barich Insurance Agency Inc. in Redlands, Calif. George Barich, president of Barich Insurance, will join Hub California andreport to Jim Jesser, executive vice president of Hub California. JANUARY 7, 2019 INSURANCE JOURNAL | 37

Regional News & Markets

Braking Bad Scooters Electric Scooters Have Been Burned, Buried and Butchered. They’re About to Be Regulated. by Jenni Bergal, Stateline

housands of new riders have embraced the electric pay-per-minute scooters that have proliferated on America’s streets. Other people have set them on fire, tossed them off buildings and decorated them with dog droppings. Depending on your point of view, the scooters are an environmentally friendly convenience or a mechanical menace. One thing is certain: Until now, most states have done almost nothing to regulate e-scooters, in large part because the scooter explosion happened after most legislatures adjourned for 2018. That may be about to change. Next year, at least a dozen states are likely to take up e-scooter measures, according to Douglas Shinkle, who follows transportation issues for the National Conference of State Legislatures. Only about 10 states specifically regulate them now, he said. “It’s on lawmakers’ radar,” Shinkle said. “There’s controversy and consternation in some communities about where they should operate and whether they should be prohibited from sidewalks.”

Most states have done almost nothing to regulate e-scooters but that may be about to change. The rules are needed in part to address safety issues. While no government agency keeps national statistics on injuries related to motorized scooters, accidents have spiked. In September, a man riding a rented e-scooter was killed in the District of Columbia in a collision with an SUV. 38 | INSURANCE JOURNAL | JANUARY 7, 2019

In October, nine people filed a class-action lawsuit in Los Angeles County against the nation’s two largest e-scooter rental companies, Lime and Bird, and their manufacturers, accusing them of “gross negligence.” Three of the plaintiffs claim they were injured by tripping over scooters left discarded on the sidewalk. Others, including a 7-year-old boy who suffered severe damage to eight of his front teeth and had to get his lip stitched back together, say scooters rammed into them from behind as they walked. The suit alleges that the companies don’t provide adequate safety instructions for riders and that some scooters’ electronic and mechanical parts are defective. In a suit against Bird, Lime and two cities, a California woman who is a paraplegic says the scooters left on sidewalks and curb ramps are creating barriers and hazardous conditions for people with disabilities. The companies say their e-scooters are safe and stress that rider safety is a top priority. They typically instruct riders about the rules of the road and other protocols. Lime, for example, requires first-time riders who download the app to flip through a safety tutorial. It also has begun asking riders to sign a pledge to ride responsibly, wear a helmet, abide by traffic laws and ride within designated areas only. Lime has acknowledged problems with some of its products. In a blog post two weeks ago, the company said it had discovered one of its models, the Segway Ninebot, experienced occasional smoldering from the battery. Those scooters now will be charged only at staffed charging facilities. Lime said it also is aware that another scooter model, manufactured by Okai, a

Chinese company, has had problems with its baseboard snapping on hard landings off a curb. The Washington Post reported that Lime would decommission those scooters, though the company did not disclose how many were affected by the recall or in what cities they were being used.

Easy to Use

To use the two-wheeled kick scooters — which consist of handlebars, a floorboard and an electric motor — riders simply download an app on their smartphone, open a map that shows the nearest e-scooter, and pay to unlock it. Because many states have no regulations specific to e-scooters, they treat them as motor vehicles or mopeds. That means they’re subject to the same laws that govern those vehicles, even though they typically don’t go more than 15 mph. In New York, for example, state law doesn’t address e-scooters, so they technically fall under the category of motor vehicles. But they’re not considered motor vehicles either because they can’t be registered by the Department of Motor Vehicles. And New York City explicitly prohibits them. This year, New York state legislators introduced bills in the Senate and Assembly late in the session that would have created definitions and standards for e-scooters, but neither measure made it out of committee. In some states, such as Colorado, e-scooters are considered toy vehicles. That means people can ride them on the sidewalk alongside pedestrians but not on the street or in bike lanes, where cities generally prefer them to be. Emily Warren, senior policy director at Lime, said many cities located in states without appropriate vehicle classifications INSURANCEJOURNAL.COM

want to move forward with an electric scooter program, but can’t until legislators act. “I think a lot of legislatures around the country are going to create new categories for scooters,” she said, “2019 is going to be a big year for this, and we will be pushing for that at the state level.”

Existing Rules Vary

The San Francisco-based Lime started as a dockless bike-share program in 2017 and expanded to include e-scooters in February. The company now has scooters in more than 40 U.S. cities. Another large e-scooter company, Bird, headquartered in Santa Monica, also began in 2017 and now lists more than 70 U.S. cities on its website. The states that do have regulations specifically allowing e-scooters have taken different approaches. In Virginia, e-scooters can operate on sidewalks unless prohibited by local ordinances. They also can be used on roads with speed limits of 25 mph or less. INSURANCEJOURNAL.COM

In Minnesota, electric scooters are not allowed on sidewalks but can operate on roads, and riders must follow the same traffic laws as bicyclists. And in Texas, e-scooters are allowed on sidewalks and on streets with speed limits of 35 mph or less, but state officials are deferring to local jurisdictions to govern how they operate. In California, where users must ride on streets unless there is a bicycle lane, Democratic Gov. Jerry Brown signed a bill into law in September that updates e-scooter rules. The measure boosted the maximum speed limit of roads that riders are permitted on from 25 to 35 mph and, similar to bicycle regulations, no longer requires adults 18 and over to wear helmets. Local governments can impose stricter standards. And while e-scooters are prohibited on interstate highways, which typically have speed limits ranging from 55 to 85 mph, that doesn’t mean that everyone complies. Last month, the Indiana Department of Transportation sent out a tweet reminding

the public that electric scooters are not allowed on highways and urging people to notify law enforcement immediately if they see one. The department was reacting to a tweet by an Indianapolis TV reporter who said she had spotted three people riding e-scooters southbound on northbound Interstate 65 at 3:30 a.m. “HOLY SMOKES. In disbelief that I am even tweeting this,” wrote RTV6 reporter Meredith Barack, who added: “The only thing between my car and them was a semi.” © Stateline, an initiative of The Pew Charitable Trusts. Bergal is a veteran journalist who covers transportation, infrastructure, and cybersecurity for Stateline. She has won numerous national awards, including the Gerald Loeb Award for Distinguished Business and Financial Journalism, the National Press Club Consumer Journalism Award and the Worth Bingham Prize for Investigative Reporting and is a two-time Pulitzer Prize finalist. She is a co-author of the book,City Adrift: New Orleans Before and After Katrina. JANUARY 7, 2019 | INSURANCE JOURNAL | 39

Regional News & Markets

Mapping Marijuana First States to Legalize Marijuana See Rise in Car Insurance Claims, Research Shows

rashes are up by as much as six percent in Colorado, Nevada, Oregon and Washington, compared with neighboring states that haven’t legalized marijuana for recreational use, according to research from the Insurance Institute for Highway Safety (IIHS) and Highway Loss Data Institute (HLDI). Colorado and Washington were the first states to legalize recreational marijuana for adults 21 and older in November 2012. Retail sales began in January 2014 in Colorado and in July 2014 in Washington. Oregon approved legalized recreational marijuana in November 2014, and sales started in October 2015. Nevada approved recreational marijuana in November 2016, and retail sales began in July 2017. HLDI analysts estimate that the frequency of collision claims per insured vehicle year rose a combined 6 percent following the start of retail sales of recreational marijuana in Colorado, Nevada, Oregon and Washington, compared with the control states of Idaho, Montana, Utah and Wyoming. The combined-state analysis was based on collision loss data from January 2012 through October 2017. Analysts controlled for differences in the rated driver population, insured vehicle fleet, the mix of urban versus rural exposure, unemployment, weather and seasonality. Collision claims are the most frequent claims insurers receive. Collision coverage insures against physical damage to a driver’s vehicle in a crash with an object or other vehicle, generally when the driver is at fault. 40 | INSURANCE JOURNAL | JANUARY 7, 2019

A separate IIHS study examined 2012–16 police-reported crashes before and after retail sales began in Colorado, Oregon and Washington. IIHS estimates that the three states combined saw a 5.2 percent increase in the rate of crashes per million vehicle registrations, compared with neighboring states that didn’t legalize marijuana sales. IIHS researchers compared the change in crash rate in Colorado, Oregon and Washington with the change in crash rates in the neighboring states that didn’t enact recreational marijuana laws. Researchers compared Colorado with Nebraska, Wyoming and Utah, and they compared Oregon and Washington with Idaho and Montana. The study controlled for differences in demographics, unemployment and weather in each state. The size of the effect varied by state. Although the study controlled for several differences among the states, the models can’t capture every single difference. For example, marijuana laws in Colorado, Oregon and Washington differ in terms of daily purchase limits, sales taxes and available options for home growers. These differences can influence how often consumers buy marijuana, where they buy it and where they consume it. The 5.2 percent increase in police-reported crash rates following legalization is consistent with the 6 percent increase in insurance claim rates estimated by HLDI. “The new IIHS-HLDI research on marijuana and crashes indicates that legalizing marijuana for all uses is having a negative impact on the safety of our roads,” said IIHS-HLDI President David Harkey. “States exploring legalizing marijuana should consider this effect on highway safety.”

Marijuana is still an illegal controlled substance under federal law. In addition to the study states, Alaska, California, Maine, Massachusetts, Vermont and the District of Columbia also allow recreational use for adults 21 and older and medical use of marijuana. Another 22 states allow medical marijuana, while 15 more permit specific cannabis products for certain medical conditions. New Hampshire, New Jersey, New York and Pennsylvania are weighing legalization of recreational use. This past November, Michigan approved legalizing recreational marijuana while Missouri and Utah approved medical marijuana. Driving under the influence of marijuana is illegal in all 50 states and D.C., but determining impairment is challenging. Unlike alcohol, the amount of marijuana in a body doesn’t consistently relate to impairment. THC, or Tetrahydrocannabinol, is the primary psychoactive component of cannabis. A positive test for THC doesn’t mean the driver was impaired at the time of the crash. Habitual users may have positive tests for THC days or weeks after using the drug. The researchers note that marijuana’s role in crashes isn’t as clear as the link between alcohol and crashes. Many states don’t include consistent information on driver drug use in crash reports, and procedures for drug testing are inconsistent. More drivers in crashes are tested for alcohol than for drugs. When drivers are tested, other drugs are often found in combination with alcohol, which makes it difficult to isolate their separate effects. “Despite the difficulty of isolating the specific effects of marijuana impairment on crash risk, the evidence is growing that legalizing its use increases crashes,” Harkey said. INSURANCEJOURNAL.COM

Regional News & Markets

Bikers Reap Benefits State Laws to Curb Drivers' Use of Cell Phones Appear to Be Saving Lives of Motorcyclists

aws to ban or curb drivers’ use of cell phones and other handheld devices have greatly reduced the rate of fatalities for motorcyclists. States with moderate to strong bans have motorcycle fatality rates that differ by as much as 11 percent compared to states with no bans, according to a study out of Florida Atlantic University and the University of Miami. The study’s findings were recently published in Social Science & Medicine. “In the case of motorcycles, these laws seem to be effective,” said study co-author Gulcin Gumus, Ph.D., an associate professor in health administration in FAU’s College of Business. “While it’s not clear that these laws have had an impact on reducing the overall number of traffic fatalities, when we focus specifically on motorcycles, we find that these laws are having a major impact in reducing deaths among motorcycle riders.” Motorcyclists account for a much higher proportion of traffic fatalities relative to the share of motorcycles among all motor INSURANCEJOURNAL.COM

vehicles and vehicle miles driven in the U.S. The study’s authors obtained annual data from the Fatality Analysis Reporting System on total and motorcycle-specific traffic fatalities for all 50 states during the period of 2005-2015. Those data were then merged with state-specific characteristics, texting/handheld device laws, as well as other traffic policies to estimate the effectiveness of strong, moderate and weak bans compared to no bans. While automobile safety has greatly improved over the last several decades, bringing the overall fatality rates down with it, motorcycle fatality rates have not declined. Although research is mixed on the effectiveness of texting/handheld bans for overall traffic fatalities, the study’s findings indicate that motorcyclists are at elevated risk of being a victim of distracted driving and thus could greatly benefit from these policies. This result is driven mainly by multiple-vehicle crashes (e.g., car hitting motorcycle) as opposed to single-vehicle

crashes, according to the research. According to the Insurance Insurance Institute for Highway Safety, 16 states and the District of Columbia ban talking on a hand-held cellphone while driving while 38 states and D.C. restrict the use of all cellphones by inexperienced drivers. Text messaging is banned for all drivers in 47 states and D.C. “Every day about nine Americans are killed and more than 1,000 are injured in traffic crashes that involve distracted drivers,” said the FAU study co-author Michael T. French, professor of health economics in the Miami Business School’s Department of Health Management and Policy and an avid motorcycle rider. “While our initial goal was to understand whether these laws save lives on the road, the broader application of our findings is even more powerful.” French said he hopes the results will “facilitate a more informed discussion between legislators, law enforcement officers, and the general public about distracted driving and traffic safety.” JANUARY 7, 2019 | INSURANCE JOURNAL | 41

Regional

Claims Report States Surprised with Burst of Insurance Fraud-Related Legislation in 2018 Lawmakers Debated More Than 100 Fraud-Related Bills and Passed 33 into Law

By Denise Johnson

he introduction of new bills slows down during years when legislators tend to be more concerned with reelection. That’s why 2018 was such a surprise, according to Matthew Smith, director of government affairs and general counsel for the Coalition Against Insurance Fraud. On the state level, there were 116 new pieces of anti-fraud-related legislation introduced, resulting in 33 new laws, he said. “There may still be a slight chance of a couple more slipping in before the ball drops in Times Square on New Years’ Eve,” Smith added. Patient brokering laws were passed in Arizona, Illinois, Utah and West Virginia. These laws ban payment to any medical facility or person in exchange for referring 42 | INSURANCE JOURNAL | JANUARY 7, 2019

patients to treatment facilities. Workers’ compensation reform continued to be a hot button issue last year with legislation passed in Arkansas, California and Illinois. One new law in California deals with liability for peace officers working outside the state. Arkansas in March approved a law providing for regulation and licensing of pharmacy benefits managers by the insurance department. Illinois lawmakers decided to require the pre-approval of workers’ compensation rates by the insurance department.

Storm-Chasers

Alabama passed a roofing contractor licensing law. “When you look at the potential for hurricanes, tornadoes, that face those types of states, we are very much supporting those types of laws that protect against the storm

chaser-type of frauds,” Smith said. Iowa passed a new law allowing insurers the ability to pursue restitution from fraudsters. This statute clarifyies that insurers can be considered a crime victim in Iowa, which was not previously the case.

Airbag Danger

CAIF continues to partner with Honda North America to protect American consumers on fraudulent airbags. When an airbag is replaced after an accident with a knock-off there can be a danger to the vehicle’s driver and passengers. “The tragedy of that fraud is the consumer doesn’t know they’ve been defrauded until the next accident when, literally, their life is at risk as they hit or fly through the windshield because their airbag did not properly deploy,” Smith said. “That’s a fraud that we don’t read about INSURANCEJOURNAL.COM

or hear about too often,” he said, noting that Rhode Island’s governor signed a law to deal with knock-offs.

Cyber, Data Privacy

Two of the most significant laws were in the area of cyber privacy and came out of South Carolina and California. This year, South Carolina became the first state in the nation to adopt the National Association of Insurance Commissioners’ (NAIC) cyber security law. Smith expects other states will either follow suit or create similar legislation for the protection of consumer’s rights of privacy and data usage. “The model bill is very comprehensive,” Smith said. “For example, it requires every insurance company to designate a person or a vendor responsible for their cyber security programs. It also requires written policies and procedures to be in place on the use of data, and when there are data breaches.” He offered an example to highlight the impact to insurers. “If a claims person so much as loses a laptop or…a smart device that has non-public personal data of an insured or a claimant, that is now unaccounted for because that device has been lost or stolen, it is mandatory to report that to the state DOI, and they have the right to investigate it and, under certain circumstances if there are blatant violations, fine or take licensing action over data breaches and the loss of personal information,” he said. California enacted a law protectng citizens’ data privacy that the industry is monitoring. “The California Privacy Law applies to insurers and all other businesses in the state and has very severe restrictions on the use of private data,” Smith explained. “We’re looking at it from the standpoint of what impact it might or might not have on an insurer’s ability to even report fraud. We think we’re all right there, but we’re partnering with others to look to make certain that it does not infringe on the ability to report insurance fraud under the Privacy Act.” INSURANCEJOURNAL.COM

Several amendments to the law are expected before it becomes effective on Jan. 1, 2020.

South Carolina and California passed significant cyber data privacy laws. Fraud Authority

The anti-fraud community in Michigan was taken by surprise when, in September, then outgoing Governor Rick Snyder issued an executive order creating a state insurance fraud authority. Smith said it’s something that had been in the works for years, but had continually stalled. “We at the Coalition have tried for years to work with the Legislature in Michigan, because the state desperately, in our opinion, needed an auto fraud authority, especially when you have that type of a personal injury protection (PIP) system and the frauds, abuses, and scams occurring in Michigan,” he said. “Unfortunately, the bills always failed, not because the legislators were not in favor of a fraud unit, but because it was always joined at the hip with PIP reforms and there could never be a consensus on that.” The scope of the fraud authority is much broader than just auto insurance, Smith said. “Without…a law on the books, future governors could decide to do away with it, and there’s also no funding for it,” he said. “It doesn’t have a funding structure or mechanism underneath it because it was created by executive order. So, one of our priorities — we’d love to have it yet this year or in 2019 — is to work with the legislature to take what the governor created by executive order, a free-standing insurance fraud authority, but created now with an actual legislative structure and with a funding mechanism to make certain that it’s permanent.”

the American Law Institute’s revised Restatement on Liability Insurance could create new theories of recovery and new areas of law in states. Even though ALI restatements are not laws, there is concern that this will be relied on as if it is the law. “They are probably the most cited authority on issues like liability insurance by judges in issuing decisions and by attorneys in submitting briefs to courts addressing those issues. So, there’s grave concern that the ALI Restatement, as they adopted it now, changes dramatically the world of insurance law,” said Smith. Ohio passed a law in July that says state courts don’t have to follow the new ali version. It remains to be seen if other states will follow suit. Johnson is editor of Claims Journal. Website: www.claimsjournal.com.

Web Resource

ALI Restatement

Many in the industry believe that

Now on insurancejounal.tv: 2018 watch “Record Year for Anti-Fraud Legislation” https://www.insurancejournal.tv/videos/17209/

JANUARY 7, 2019 INSURANCE JOURNAL | 43

International Most UK Small Businesses Remain in the Dark About Cyber Risks

Data breaches in the press raise awareness but can also cause breach fatigue.

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poll of small and medium-sized enterprises (SMEs) and micro businesses in the UK shows over half are confused by or even unaware of the rules around the EU’s General Data Protection Regulation (GDPR), while more than eight out of 10 don’t see cyber attacks or data loss as a significant risk for their business, according to a survey commissioned by Aon. The Aon poll comes on the heels of a survey earlier this year from the National Cyber Security Programme, which revealed nearly half of UK businesses experienced at least one cyber security breach or attack in 2017, noted Aon in a statement. The EU’s GDPR data rules, which came into force in the UK in May, drastically increased potential penalties on companies found to have misused or mismanaged clients’ personal data. However, the attitude of SMEs to cyber security is worrying, with one in five saying they have no plans to invest in it in the coming year, said Chris Mallett, broking manager for Aon. GDPR caused companies to focus on this issue but Dr. Emma Philpott from the UK Cyber Security Forum expressed concern that the focus was short-lived effect for far too many businesses.

Overwhelming Sense

Philpott is also CEO of the IASME Consortium, an accreditation body for assessing and certifying against the UK government’s Cyber Essentials Scheme. “As soon as the deadline for GDPR passed, too many thought that was job done and that’s where their responsibility ended,” she said in comments included in the survey report. “The big data breaches in the press help to raise awareness but they can also cause data breach fatigue; a sense that the time, cost and high-end security to tackle this is complicated and overwhelming,” said Philpott. “There is a lot of misunderstanding of risks, and still a worry among SMEs that it must be complicated. It is not always about high end security. It’s about having the INSURANCEJOURNAL.COM

basics in place to protect you from indiscriminate attacks. Educating staff takes time but doesn’t cost anything at all,” she continued. Mallett said there are particular vulnerabilities with the growth of flexible working with staff accessing data on-the-go.

Personal Devices

But the bring-your-own-device culture, which sees business leaders and their teams using their personal computers, smart phones or tablets for work purposes, can expose companies to the increased risk of a cyber security breach if data is not properly encrypted and controlled, noted Mallett. The poll of 1000 SMEs, which was carried out by OnePoll, indicates around one in four of SMEs allow staff to use their own devices for work. “What’s more, it revealed one in three don’t see personal information stolen as a result of cyber attack or fraud as a data breach, with the same number admitting they’re unaware of the time limit on reporting such a loss, exposing their companies to the risk of huge fines,” said Mallett. “I don’t think companies realize how awful the impact of a breach can be or the amount that actually has to be done,”

said Philpott. “It involves everything from mandatory reporting to keeping affected customers or clients informed. It can leave those clients fearful and cause reputational damage. It’s not just about replacing laptops or paying a fine.” While many companies have professional indemnity insurance (PII) in place, there are often significant costs that professional indemnity won’t pick up, added Mallett, who pointed to the poll results showing general confusion about the likely financial impact of a cyber attack (more than four out of 10 admitted they had no idea). “Around one in seven believe the costs are covered by their PII and more than three in 10 choose not to insure against cyber attacks or fraud,” said Mallett. “Although fines are expected to be issued as a last resort, they can be up to €20 million [$22.7 million] or 4 percent of annual turnover,” explained Mallett. “The risk presented by non-compliance with GDPR has the potential to bring a small business to its knees.” Companies are surprised by how affordable cyber insurance is. “Specialist policies not only cover for the cost of responding to a breach, but also the costs of damages you’re legally liable to pay in the event of a breach or security failure, as well as associated legal costs,” Mallett said.

Basic Protections

allett discussed simple actions companies can take to protect themselves:

backing up work to what data employees keep on their computers).

Install anti-virus software or check existing software is up to date on all employees’ computers and laptops. This helps to prevent employees downloading potentially harmful malware. And ask the IT team to check firewall settings.

Check what your PII or business insurance covers and consider buying cyber insurance. This can cover the cost of responding to a breach, as well as damages, and also provide access to specialist support ensuring the breach will be dealt with in line with GDPR requirements.

Have clear policies in place to create a cyber-conscious culture in the workplace (everything from password rules and

Make sure any cyber insurance comes with a pre-approved panel of providers who are immediately available in a breach.

JANUARY 7, 2019 INSURANCE JOURNAL | 45

National Idea Exchange Catastrophes 3 Reasons Recovery from Hurricane Florence is Different from Hurricane Michael Lessons from Past Storms and Economic Changes Suggest Rebuilding Efforts After Florence Will Be Arduous By Holly Tachovsky

s the saying goes – location is everything. Following the two largest U.S. hurricanes this year, Hurricane Florence in the Carolinas and Hurricane Michael in Florida, communities are rebuilding. Both hurricanes caused devastation throughout their respective regions and yet data suggests Florence recovery will be especially formidable, dictated by the area’s specific economic and environmental conditions. As rebuilding efforts post-Florence and Michael proceed, previous hurricanes show carriers that effectively incorporating data-driven solutions into their processes will promote more proactive underwriting and claims resolution.

Uninsured Flood Risks

Past storms can shed light on future hurricane recovery. A year after Harvey first made landfall in the greater Houston area, the city’s path to recovery is still far from over. The hurricane was catastrophic, ranking as one of the costliest storms on record at $125 billion, but the hefty price tag is not the only reason for longer rebuilding efforts. The low level of flood insurance coverage in the city is another key factor. Unlike other hurricane-prone regions in the continental United States, Houston and North Carolina were particularly underinsured in the face of such storms. In Houston, approximately 80 percent of impacted homes did not have flood insurance when Harvey hit, contributing to slower rebuilding efforts for homeowners. Similarly, in North Carolina, just 35 percent of at-risk properties had flood insurance in place compared to 65 percent of at-risk properties in South Carolina. 46 | INSURANCE JOURNAL | JANUARY 7, 2019

Fundamentally, the benefit of insurance is twofold. Properties get the money they need to begin reconstruction quickly as well as the resources to make their properties whole again. Early reports suggest insured losses from Hurricane Michael, which were primarily wind-related versus flood-related, won’t be disruptive for carriers as loss estimates climb. The region is well-insured partly because carriers and insureds expect to see some amount of catastrophe activity annually. This leads to a level of preparedness that is ultimately beneficial. Meanwhile, North Carolina tells a different story. Given the low level of flood insurance, there is a potential that properties without comprehensive coverage will be repaired to habitability but likely will not be made whole.

flooding rather than wind or storm surge. Hurricane Michael was by no means a mild storm. Over the course of 24 hours, Michael was upgraded from a Category 3 to a strong Category 4. However, the storm moved at a quicker pace, subjecting the panhandle to a lower volume of rain than Florence. While damage was extensive and communities were affected, a modest population density in the area means that subsequent costs will be more manageable for carriers. Harvey and Florence demonstrated back-to-back that hurricane preparation should take into account more than wind speeds and storm surge. Flooding causes

Record Rainfalls Distort Expected Losses

Just before making landfall, Florence was downgraded to a Category 1 hurricane, perhaps causing a false sense of security among residents of the Carolinas. However, like a number of recent hurricanes, the category of a hurricane does not always tell a comprehensive story of expected damage. While a lower category hurricane accurately reflects wind speeds subsiding, it does not account for the slow-moving rain storm and subsequent flooding. A week into the hurricane, Florence dropped 86 inches of rain in Wilmington, N.C., surpassing the city’s records for highest rainfall during a given year. The record rainfall and ensuing floods led to more damage than the strength of the storm itself. This resulted in underprepared residents who may have taken additional measures if they had understood true hazard —

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substantial damage and travels much further inland than a typical storm surge.

Floridaâ&#x20AC;&#x2122;s building codes are still some of the strictest in the United States.

Loosened Building Codes and Recovery

With more damage and less insurance than expected, properties can be built to be livable, but perhaps never made whole.

Enforcement of building codes is crucial to the level of risk a property maintains. In recent years, North Carolina made a few key changes to its construction regulations, for example, extending the amount of time between updates to building codes and waiving a requirement to anchor storm shutters permanently. The Insurance Institute for Business and Home Safety pointed out that North Carolinaâ&#x20AC;&#x2122;s building code would consequently remain two cycles behind national building code recommendations for hurricane-prone areas. These changes set Florence-impacted areas up for increased potential damage to properties. The same could be said for the Florida Panhandle, where building codes and construction regulations are more relaxed than other parts of the state. Nonetheless,

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Communities in the Panhandle require newly constructed homes to withstand wind speeds up to 130 miles per hour. This suggests that while the Panhandle was less prepared than an area like South Florida, regulations in the area are far from loose.

Additional Challenges

The composite effect of low levels of insurance, underanticipated losses, and looser building codes can lead to a homeowner without the resources to repair their home to pre-catastrophe standards in a timely manner. With more damage and

less insurance than expected, properties can be built to be livable, but perhaps never made whole. Unfortunately, this leaves those properties even more vulnerable to the next storm. As the estimated cost of Florence rises to anywhere between $38 and $50 billion, carriers must consider the right technologies that will allow them to monitor maintenance progress and know which properties are prepared for the next storm and which are not. Given the influx of larger storms with multiple perils in recent years, itâ&#x20AC;&#x2122;s important that carriers equip themselves with timely data about the evolving built environment. In doing so, they can improve pre-catastrophe preparedness and post-catastrophe response in order to better serve their customers when they need it most. Tachovsky is the CEO and founder of BuildFax, a national database of historic construction permit records.

JANUARY 7, 2019 INSURANCE JOURNAL | 47

National Idea Exchange When Words Collide Once Upon a Time … Resolving Insurance Coverage and Claims Disputes

By Bill Wilson

n independent agent in a small rural town insured a farmer whose barn burned down. The agent had failed to schedule the farm structure, so the farm policy did not cover the total loss. The agent routinely placed farm business with five different insurers his agency represented. To resolve the claim, the local manager of the insurer on the loss called the local managers of the

other four farm insurers to explain what happened. They all agreed to each share one-fifth of the loss “so their agent would not be embarrassed in his community.” This actual claim took place in 1952. If it happened today, do you think this is how the claim would be resolved? That, of course, was a rhetorical question. In this case, there really was no coverage dispute. The claim was not covered. Most denied claims are denied because they aren’t covered. However, sometimes claims are denied when there is a legitimate dispute about whether coverage exists. In such instances, all too often the method of resolution is contentious and involves litigation. It doesn’t have to be that way, even if it can no longer be the way it was in 1952 (though I have an idea about how that could still happen).

Making a Case for Coverage

I have spent much of the past 30 years assisting independent insurance agents in getting denied claims paid if, using logic and language, we could make a case for coverage. How we did this, time after time, is the basis for this series of Insurance Journal columns and a companion series of webinars from Insurance Journal’s Academy of Insurance. Over the next 12 months, I’ll be introducing proven legal and contractual doctrines and principles that I and others have used to resolve well over

90 percent of all coverage and claims disputes without litigation. The implications, just for customer retention, are significant. In subsequent columns, we’ll explore four reasons why claims are denied, two ways to deal with claim disputes, seven ways to avoid claim disputes, three sources of coverage gaps that lead to disputes, 12 important policy interpretation doctrines to use to determine if coverage exists, 17 indispensable legal and contractual principles, and so much more. You’ll learn why insurance is not a commodity, why coverage folklore is not fact, and why the most critical interpretive doctrine is something called “RTFP!” Revealed, perhaps for the first time, are the sole purpose of insurance, the industry’s “one thing” and the answer to the question, “What’s so funny?” We will investigate things like “weasel words” and discover the extraordinary power behind Latin phrases like "noscitur a sociis" and "ejusdem generis."

You’ll learn the subtle science and exact art of potion-making, how to bewitch the mind and ensnare the senses. I will teach you how to bottle fame, brew glory, even … wait. Sorry. That was from Professor Snape’s introduction to potions class. I sometimes get sidetracked when incorporating lessons learned from movies into insurance articles and presentations. In fact, over the course of this series of columns and webinars, I will quote from cinematic classics like the Oscar-neglected masterpiece Road House to illustrate important insurance doctrines made philosophically relevant by great minds like Snape and Road House’s Dalton. Little did you know that Dalton’s “3 Rules” had insurance implications. At the end of the series, we’ll demonstrate how all of these principles, procedures, and practices work as part of a proven four-step method I’ve employed to successfully resolve somewhere in the neighborhood of 100,000 claims. The process is simple. Step 1 consists of reading the applicable policy forms in their entirety. Step 2 involves interpreting the form language in the context of each claim’s unique set of facts and circumstances. Step 3 centers on researching and documenting that interpretation from authoritative sources. Step 4 concludes either with concurring the claim denial or pleading an alternative interpretation to overturn the denial.

Not a Commodity

Next month we will begin our journey in earnest. However, before we can do this, there is something that we must all agree on and that is: Insurance is NOT a commodity. I realize that most consumers and many business owners believe that insurance is a commodity differentiated only by price. And why not, given that we have drilled this into their minds via incessant industry price-focused advertising and insurtech promises of fast, easy and cheap. My experience over decades, and increasingly so, is that too many insurance INSURANCEJOURNAL.COM

professionals believe that there is little substantive difference between similar policies and that minor form language differences don’t really mean a lot. The trial bar will tell you otherwise. And we should know better. How do I know that so many agents don’t get it? By the literally hundreds, perhaps thousands, of questions I’ve received over the years that begin with something like, “Does 'a' homeowners policy cover …” or “Does 'an' auto policy cover ... .” Opining about typical policy coverages is fine as an intellectual and perhaps educational exercise, but when answering specific coverage and claim questions, the actual policy form must be examined. Generalizations about coverage are without constructive value in resolving coverage and claims disputes. For example, the ISO Personal Auto Policy has a “racing” exclusion, but it only applies while an auto is “inside a facility designed for racing.” Unfortunately for one agency owner, the policy which insured his testosterone-fueled teenage son had no such “inside a facility” qualification to limit the application of the exclusion. As a result, a street-racing accident involving a fatality was initially denied based on this non-ISO racing exclusion. Luckily, the accident involved a spontaneous racing incident and the non-ISO policy’s exclusion only applied to “organized” racing events, so it was not difficult to convince the adjuster that this was a covered claim. However, if he had resided in North Carolina with its bureau-mandated nonISO personal auto policy that all carriers must use, a denial in excess of state minimum liability limits would have been upheld because that policy’s racing exclusion also applies to “spontaneous” events which presumably would include street racing. Same claim scenario, three different auto policies, three different outcomes, even though each policy had a “racing” exclusion. Insurance is not a commodity. Not all auto policies are the same. Seemingly very similar language must be parsed for syntax

and semantics. You must know the policies you sell and service and the differences between them. Being able to read, understand and apply policy form language is a critical skill that is a fundamental prerequisite for successfully resolving coverage and claims disputes. To illustrate further, ISO’s “HO-3” homeowners policy, within certain constraints, has no exclusion for interior dwelling water damage caused by a roof leak. Many non-ISO homeowners policies exclude such damage unless the walls or roof have been breached by windstorm. ISO’s own commercial property forms are written that way. In addition, ISO’s “HO-3” policy, again within certain constraints, has no exclusion for repeated seepage or leakage of a water line over weeks, months or years. Many non-ISO homeowners policies exclude this, as do ISO’s commercial property forms. All things being otherwise equal, which homeowners policy is better from a coverage standpoint for a customer with an older home? Perhaps the one that covers roof and plumbing leaks. Are these the types of things most agents consider when placing an account or do they simply rely on the prices spewed out by their comparative rating systems? If the latter, then of what value is the agent in the consumer’s buying decision compared to an online or direct purchase? The coverage variations in commercial lines are even greater than those in personal lines, especially in the E&S marketplace. One word can make a difference. The tense of a verb may govern coverage. Punctuation marks are relevant. The meaning of words may be subject to varying interpretations. The physical damage coverage found in most auto policies applies to the auto “and its equipment.”

continued on page 54

Web Resource To watch Bill Wilson’s new 12-part series exclusively on Insurance Journal’s Academy of Insurance visit: www.ijacademy.com

JANUARY 7, 2019 INSURANCE JOURNAL | 49

National Idea Exchange The Competitive Advantage How Property/Casualty Insurance Is Becoming Less Valuable

By Chris Burand

wrote about this some months ago and received many interesting comments. I decided to follow up on the same subject because it is so important. Value is a relative term often specific to a given asset. For example, if the price of gold declines from $1,800 to $1,200 an ounce, as it has been hoovering, then gold becomes less valuable. The price of insurance is materially set to decline over the next 10 years. This means the declines will happen every year for 10 years. Whether the decline is 90 percent the first year and 1 percent each of the next nine years or the decline is 10 percent per year or 1 percent each of the first nine years and 90 percent

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the last year, I do not know. I suspect the decline will begin slowly, accelerate, and then slow again with the full decrease being realized by the end of year 10. The overall decrease will be material. One reason that insurance companies have been so profitable over the last decade is premiums have increased materially faster than claims. If premiums were even softer and matched claims, insurance would already be less valuable. Here is some toxic proof of my point: The combined ratio (including 2017’s cat claims causing the combined ratio to be tied for the second highest combined ratio in the last 15 years) is only 98.3 percent (unweighted) versus a long-term median of 101.9 percent. The industry is profitable, and one reason is the world is a safer place. They just do not have as many claims, and severity is not increasing enough to offset the decreased frequency. Going forward, less insurance, relative to GDP, will be required for many reasons including: • The world will continue to get safer, at least relative to insured property. Much of the concern regarding the world becoming less safe involves perils that are not typically covered. • Whether it is sharing cars, sharing rooms, or automakers providing insurance when consumers rent a vehicle for a month, the cost of insurance decreases on a mass basis. Insurance costs less per person.

Insurance is less valuable. • Automated water shut off devices will greatly reduce property claims. • The workplace sensor environment will greatly improve workplace safety. • The shift from manufacturing and transportation to being desk jockeys is a safer workplace environment overall. • The safety features on vehicles make driving safer even if driverless cars never arrive. The world is just going to become a safer place relative to insurance perils making insurance less valuable. The trends shown above will continue showing a safer and safer world. On a GDP basis, the number of claims filed is 25 percent less than two decades ago. That is a huge decrease. Cyber insurance will take up some of the slack, but until producers learn enough about the coverage to sell it and sell it correctly, and companies buy enough, which

will not happen until they understand this complex coverage more completely (and that may never occur), then in the best case scenario, cyber is a small bandage.

Insurance simply is and will become less valuable and less important. Insurance is for a dangerous world. The less dangerous the world is, the less important it is to protect oneself. Over 10 years (do not be Aesop’s frog in boiling water waiting for the 10th year to do something), the result will be considerable consolidation at the carrier level as they begin matching the consolidation on the distributor level. An interesting unknown is whether leadership at carriers and brokers can adapt to

an environment in which insurance is less valuable. I haven’t seen many leaders present a reasonable strategic plan for dealing with this inevitable reality. (Those readers that just can’t fathom insurance becoming less valuable, if you at least agree with the bullet points above, then the only way insurance does not become less valuable is a serious catastrophe, natural forces or financial markets crashing, because the industry now has around $750 billion in surplus, so “little” catastrophes of $5 - $10 billion do not have much effect.) The solutions, when carefully thought through and executed well, work even if I am wrong. When a person is facing the inevitable, the earlier a plan is built, the better. Burand is the founder and owner of Burand & Associates LLC based in Pueblo, Colo. Phone: 719-485-3868. E-mail: chris@burand-associates.com.

Get full admission to all upcoming live webinars, plus unlimited access to our entire catalog of 200+ course recordings for only $99/mo. ijacademy.com

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National Idea Exchange Marketing The Customer Is in Control

Itâ&#x20AC;&#x2122;s Time to Get Out in Front and Not Fight

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By Troy Korsgaden

one are the days of carriers leading the entire purchasing cycle of insurance products and financial services. In an environment of unprecedented change in our industry, today the customer is in control. To remain competitive, agents, advisors and brokers must become the local gateway to every potential option. This is a positive change for our industry. Instead of running our businesses in a way that focuses on our needs, now providers are shifting our focus to customers. And that’s the way it should be. Traditionally, customers buying property/casualty protection, life insurance, other insurance products and financial services have had little or no voice in the purchasing cycle. Up until now, this approach has enabled carriers to retain business, despite the plethora of offerings in the marketplace. Some well-established and well-run agencies have offered differentiators, but nothing radical enough to flip the industry upside-down. These agencies have enjoyed increased business as they’ve added a few other lines of insurance, but their dream of representing all products and services in their clients’ households has never materialized. The pricing might be great in one area, but not in another. Price seems to have been the only real driver, other than local or high-touch service. It was never enough to win the day — to have customers purchase every one of their products for property/ casualty, life insurance, financial services, etc., under one roof. The industry had hoped to become a INSURANCEJOURNAL.COM

one-stop shop using local distributors. Many of the best agents blamed their distribution for this unfulfilled dream, but they never took an inward look at what they were providing customers holistically. Today, the marketplace is changing rapidly. We are experiencing a tsunami of change. All agents seem to be committed to giving great customer service and offering quality products at reasonable prices. Consumers are brand-loyal on certain products, but they never seem to be brand-loyal without some type of consideration of pricing, delivery of additional products and other factors. To win customers’ loyalty in this new environment, we must evolve by offering customers more options and easier access to them.

Amazon Will Never Be the Local Gateway

Enter the new age of the customer. Customers are demanding more today than ever before. This expectation first affected retail and other consumer services. It’s easy for everyone to point to Amazon as the gold standard in responding to such demand. Amazon certainly excels in customer service and in providing the many products it carries, and the online behemoth is even attempting to enter the financial services sector, offering consumers loans, insurance and checking accounts. But these efforts are aimed mainly at increasing participation in the Amazon ecosystem, not replacing the agency system, according to CB Insights. Amazon will never be the gold standard when it comes to being a local provider who offers customized personal service and every possible insurance and financial services product that households and businesses need.

4 Ways to Provide Optimum Service Amid the Tsunami of Change

Have a 360-degree view of the consumer. The winners and long-term players will have a true 360-degree view of the customer. This will involve some type of local representation or position for the

agent who delivers these products and services. Why? Because “big data” is going to improve, and artificial intelligence is going to make data more usable and enable it to be delivered to the marketplace more quickly.

To win customers’ loyalty in this new environment, we must evolve by offering customers more options and easier access to them. As the agent who serves your local community and interacts with your customers regularly, you will always know more than the computer. The computer can’t tell you when someone is possibly going through a divorce, when there has been an illness or when a huge life change is imminent, like a marriage or the arrival of a baby as a new addition to the family. Local representation is and will forever be superior to a computer or a 1-800 number selling products. People will always buy from people they know and trust. People will always want someone to hold their hand through the maze of madness. This is the superior value you bring to the table. Today’s consumer needs agents who can handle everything. That means being a discussion partner — a knowledgeable, caring provider who has access to information to give, information that can be gathered, and the ability to look holistically at the consumer’s needs from a 360-degree view and provide products based on product suitability, reasonable pricing and the best coverage contracts that are available.

Constantly add new features to your customer service platform.

Carriers are in an arms race to get their technology into place to communicate from product to product and to provide delivery systems that make clients feel secure and enjoy smooth, easy business transactions.

continued on page 54

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National Idea Exchange continued from page 53 Google has referred to this as “a single pane of glass” - a complete 360-degree view of clients. We must always abide by the privacy laws in each specific state and marketplace, protect our clients’ data and deliver a seamless product suite.

Today’s consumer needs agents who can handle everything. Technology is evolving so fast that we can’t possibly keep up by buying new platforms and computer systems all the time. Instead, bolting on new technology features to our existing systems at a rapid pace will win the day. I have not seen one particular technology that ties it all together at this point. The arms race for technology will eventually lead to one integrated system that carriers, clients and agents can all use to ensure they are singing off the same page in the songbook, at all times. For now, we can add features as they become available, such as lead management, analytics or a claims tool, for example. The goal is to equip your existing system with all the features that will benefit your clients and the team members in your agency. Ask yourself, “What are the capabilities we don’t have?” and then add them to your system.

Improve all distribution systems, including local distribution.

special agreements with others, nirvana is offering all products and advice engaging specialist advisors in joint work. I don’t mean that we should refer clients over to other experts and then disengage. Rather, we should refer our clients to another specialist and be a part of the conversation. For example, let’s say an agent doesn’t have a second-to-die policy, but she has a relationship with someone who does, so she provides that product and service to the client through that other expert. She might not get a commission on that referral, but because she was in the conversation from start to finish, her client will look to her as the gateway to all insurance products and financial services.

Agents who expand their offerings by partnering with other specialists win because they have more opportunity to sell additional products and services, certainly much deeper than before.

Whether your agents are employees, brokers or managers of firms that have

Today, clients have a more transparent view into what they are buying holistically. Agents who expand their offerings

There are many small businesses representing agents and products in the financial services marketplace. Customer loyalty means being loyal to your customer, not being loyal to yourself. You can provide unrivaled service by upgrading and retooling your distribution system at the service level.

Partner with other specialists to expand your offerings.

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by partnering with other specialists win because they have more opportunity to sell additional products and services, certainly much deeper than before. And although we might not be competitive today, our distribution will place business when it is in the client’s best interest, and the carrier can provide the coverage and reasonable pricing.

Conclusion

Now that the customer is in control, it’s important to put your customers at the center of every decision you make as an agent, whether it’s about the products you offer, your pricing or your overall advice. Get out in front of this reality, and don’t fight it. Robo-advisors, digital platforms and lower-cost delivery options will have a place in the industry and will gain a big market share, but the real money is in providing it all through one gateway. That gateway is the true omnichannel experience. We can become that gateway by optimizing our offerings and tailoring them to our customers’ needs. Troy Korsgaden is a bestselling author, sought after speaker and consultant in insurance and financial services. Phone: 559-303-5407. Website: www.korsgaden.com. Email: troy@korsgaden.com INSURANCEJOURNAL.COM

Peter F. Drucker

Hundreds of hours of high-quality training webinars. Flexible purchasing options. Youâ&#x20AC;&#x2122;ve hired the top talent. Let us help you train them. Call 800.897.9965 x179

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National Idea Exchange Ask the Insurance Recruiter 3 Female Agency Leaders on Opportunities in Insurance

was so intrigued by McKinsey & Company’s “Women in the Workplace 2018” study that I decided to flip the script for my first column of 2019. From a simple question, “What are opportunities for women in the insurance industry?” came fascinating answers from three female agency leaders. They are at the forefront of addressing issues of inclusion and diversity. They are advocating for change in ways I believe many insurance organizations can learn from.

A Voice That’s Heard

You’d be smart not to say the phrase “women should have a seat at the table” to Barbara Bentley. Twenty years of human resources experience tells her this cliché doesn’t age well. As chief talent officer for Catto & Catto in San Antonio, Bentley focuses on attracting, engaging and developing diverse talent. “It’s more than women just having a voice,” she said. “It’s about women having a voice that’s heard.” Bentley designed plans for female employees to “move beyond being a believer to becoming a builder.” With a commitment to equality and engagement, the agency’s culture has been forever changed for the better. “Diversity began once we expanded the ways we thought about growth,” she said. “We unlocked a lot

of potential.” Bentley spoke about an evolving culture where men and women engage in real-time issues, from setting performance excellence standards to working on a project to change the agency’s management system. “How do you give people opportunities to develop and have leadership?” she asks. “Invite more voices into initiatives.”

Breaking Down Barriers

Then came my conversation with Karla Combs, chief operating officer at Lipscomb & Pitts Insurance in Memphis. After 25 years with the agency, Combs' perspective on the role of women in the insurance industry doesn’t start and stop with her own leadership journey. She is proud of the diversity within the agency’s sales teams. Lipscomb & Pitts has six very successful female producers across personal lines, commercial lines and employee benefits. Even more notable, four began their careers in account management.

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“We approached them about moving from service to sales,” Combs said. “All the credit goes to them for turning the opportunity into a huge success. The part I’m proud of is initially they didn’t necessarily see the potential in themselves, but we did and really wanted to foster their possibilities.” Having successful women in sales breaks down barriers and stereotypes. “Perception isn’t always reality,” Combs said from watching two of the producers concentrate in male-dominated verticals like construction and trucking to seeing young male producers co-sell with experienced saleswomen. She’s gone as far as to make sure they hire more men in support positions.

Belonging and Mattering

At BKS Partners, two of the original founders are women and female representation exists through all levels of the company. Elizabeth Krystyn, founding partner of BKS Partners, said they could rest on their laurels, but they don’t. “When you look traditional, you have to work harder to be different,” she said. “In BKS’ case, we don’t look traditional and yet still strive for diversity and inclusion. We’re building

By Mary Newgard Capstone Search Group a colleague-centric, ‘family inside of a larger family’ small group model,” she said. “Transparency and communication is respect,” a mantra Krystyn said has led to full engagement and productivity for female and male employees. Twice a year, the agency issues a survey of 10 questions categorized around safety, belonging and mattering; topics which she recognizes are important to women. The results provide insight into how well BKS’ culture fosters inclusion. It’s a springboard for employees to share goals and support one another in “Welcome Activities.” One new hire had 50 emails from BKS employees by her first day. “By planting the flag early on for engagement and community [between men and women], we’re making diversity a part of BKS’ everyday language.”

Newgard is partner and senior search consultant for Capstone Search Group, a national recruiting firm dedicated to the insurance industry. For questions and comments, email: asktherecruiter@csgrecruiting.com.

2019

INSURANCEJOURNAL.COM

Andrea Wells Executive Editor 2018 Young Agents Survey: Straight Talk from Young Agents Fo l i o E D D I E H o no ra b l e Menti o n E d i to ri a l U s e o f D a ta , B2 B

L. S. Howard International Editor A Brave New World: First Reinsurance Product Heads to the Blockchain Fo l i o E D D I E W i nne r S i ng l e A r t i c l e , B2 B > I ns u ra n c e

Susanne Sclafane Executive Editor Future of Insurance: Survivors and Game-Changers Fo l i o E D D I E H o no ra b l e Menti o n S i ng l e A rti c l e, Lo ng - Fo rm Fea ture Co nten t

Congratulations

are in order. (Again) Folio has again honored our staff with awards of excellence. Weâ&#x20AC;&#x2122;re so proud... though really not surprised at this point.

Guy Boccia VP of Design Insurance Journal: April 2, 2018 Fo l i o OZ Z I E H o no ra b l e Menti o n O ve ra l l D e s i g n E xc el l enc e, B2 B

National

My New Markets High Net Worth

Market Detail: Appalachian Underwriters

Inc. (www.appund.com) has expanded its presence in the personal insurance industry by forming Reliance Risk Solutions (RRS – A program of Appalachian Underwriters, within the Personal Lines department). Reliance Risk Solutions is provides tailor-made insurance products to address the risk transfer needs of successful individuals. RRS collaborates with agency partners through industry leading levels of technology and support them with client service teams in the personal insurance brokerage industry. Reliance Risk Solutions has partnered with insurance companies that offer comprehensive coverage that can be tailored to meet an insured’s specific needs. Available limits: Minimum $10,000, maximum $100 million Carrier: Various, admitted and non-admitted available States: All states Contact: Phil Kountz at 865-481-5061 or e-mail: paul.kountz@appund.com

Trucking

Market Detail: National Interstate Insurance Co. (www.NATL.com) provides insurance programs to the trucking industry with a full complement of specialty coverages, including: automobile liability, general liability, physical damage, garage liability, motor truck cargo, and workers compensation (captives programs only) with limits up to $1 million with excess liability limits available up to $3 million. Several different programs are available such as traditional,

58 | INSURANCE JOURNAL | JANUARY 7, 2019

deductible and captive options.

Available limits: Maximum $1 million Carrier: National Interstate Insurance Co. States: All states except Conn., D.C., Dela., Hawaii, Mass., N.H., N.J., N.Y., R.I.

Contact: Customer service at 800-929-

1500

Restaurants & Bars

Market Detail: S&H Underwriters, Inc. (www.sh-underwriters.com) offers liquor liability coverage with limits up to $1 million in certain states within its binding authority. Assault and battery coverage is available on most classes of business. Available limits: As needed Carrier: Unable to disclose, non-admitted States: Conn., Dela., Mass., Md., Maine, N.H., N.J., N.Y., Pa., R.I., and Vt. Contact: Chris Hull at chris@sh-underwriters.com

Auto Repair/Service

Market Detail: Roamnet Insurance Marketing Programs (www.roamnetins. com) offers workers’ comp, GL, BOP, fire legal liability, EPLI, tools & equipment, and garage keepers legal liability. Available limits: As needed Carrier: Unable to disclose, admitted States: Ariz., Calif., Colo., Ga., Ill., Maine, Mass., Mich., N.H., N.J., Nev., N.Y., Ore., Pa., Texas, Utah, and Wash. Contact: Rusty Manzo at 909-784-0266 or e-mail: rustym@roamnetins.com

Bond Of Qualifying Individual

Market Detail: California Contractors Insurance Services Inc. (www.ccisbonds. com) offers a bond of qualifying individual, which must be filed with the California Contractor State License Board on behalf of a contracting business lacking an owner with the required experience of any classifications listed on the license. Such a business must appoint responsible managing employee or officer (RME/RMO) as its qualifying individual on the license and post a BQI in the name of the RME or RMO. Available limits: As needed Carrier: Various, admitted States: Calif. Only Contact: Joseph Pappalardo at 916-3632663 or e-mail: software@ccisbonds.com

Welding Supply Dealers Railroad Industry

Market Detail: United Shortline Insurance Services Inc. (USIS) (www.unitedshortline. com) has remained exclusively focused on the insurance needs of the short line railroad industry and its hundreds of members across the United States. United Shortline focuses strictly on providing high-quality coverage, claims handling and loss control services. Available limits: As needed Carrier: Unable to disclose States: All states Contact: Customer service at 800-2472085

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National 2019 Insurance Industry Meetings & Conventions Directory Welcome to Insurance Journal's 2018 Insurance Industry Meetings and Conventions Directory. The information in this directory is taken from a larger database containing additional information on these and other meetings, including industy-related seminars, conferences and workshops. The online Insurance Journal events database can be found at: www.InsuranceJournal.com/events Meeting planners are invited to add new meetings, conventions and seminars to the databse free of charge, all year long. 2019 CIWA Industry Days

Jan 6-8 Hilton La Jolla Torrey Pines La Jolla, CA CIWA www.ciwa.net

2019 Big 'I' Winter Meeting

Jan 9-12 Hyatt Regency St. Louis at the Arch St. Louis, MO Independent Insurance Agents & Brokers of America Inc. www.independentagent.com

Motor Carrier Insurance Considerations Jan 10-11 Residence Inn Orlando Airport Orlando, FL MCIEF transportationriskspecialist.com

Economic Outlook & Jobs Summit

Jan 14 Guidewell Innovation Center- Lake Nona Medical City Orlando, FL Florida Chamber Foundation www.flchamber.com

Advanced Underwriting

Jan 14-15 Residence Inn Orlando Airport Orlando, FL MCIEF transportationriskspecialist.com

III 2019 Joint Industry Forum

Jan 17 Marriott Marquis New York City, NY Insurance Information Institute www.iii.org

Why New Year's Resolutions Don't Work Jan 21 Mick Morgan's Sharon, MA MAIW Mass Assoc of Insurance Women Norfolk Chapter maiw.org

INSURANCEJOURNAL.COM

Ohio Regional Conference Jan 25 The Ohio State University Columbus, OH Gamma Iota Sigma gammaiotasigma.org

Tennessee Regional Conference

Jan 25 Middle Tennessee State University Murfreesboro, TN Gamma Iota Sigma gammaiotasigma.org

Florida Regional Conference Jan 25 Florida State University Tallahassee, FL Gamma Iota Sigma gammaiotasigma.org

IIAT's 56th Annual Joe Vincent Management Seminar Jan 27-29 Renaissance Austin Hotel Austin, TX IIAT www.iiat.org

Insurance Agents Day on the Hill

Jan 30 Omni Richmond Hotel Richmond, VA Independent Insurance Agents of Virginia www.iiav.com

20th Anniversary Conference - 2019 Windstorm Insurance Conference Jan 30-Feb 2 Walt Disney World Dolphin Resort Orlando, FL Windstorm Insurance Network, Inc. www.windnetwork.com

89th Annual Farm Agents Mid-Winter Education Meeting Jan 31-Feb 1 Crowne Plaza Springfield, IL IIA Illinois www.iiaofil.org

2019 WSIA Surplus Lines Management Feb 4-7 Emory University Goizueta School of Business Atlanta, GA WSIA www.wsia.org

2019 PLUS Cyber University Feb 5 Convene New York City, NY PLUS www.plusweb.org

South Dakota Farm and Small Town Conference

Feb 6-7 Highland Conference Center Highland Way Mitchell, SD Independent Insurance Agents of South Dakota www.iiasd.org

2019 PLUS Cyber Symposium Feb 6-7 Marriott Marquis Hotel New York City, NY PLUS www.plusweb.org

2019 PLUS D&O Symposium Feb 6-7 Marriott Marquis Hotel New York City, NY PLUS www.plusweb.org

Surplus Lines Assoc of NJ - Continuing Education

Feb 7 Markel Assurance Home Office Red Bank, NJ Surplus Lines Association of New Jersey www.njsla.org

JANUARY 7, 2019 INSURANCE JOURNAL | 59

National 2019 IIABCal Forecast Luncheon & Installation Feb 8 Kimpton Sawyer Hotel Sacramento, CA IIABACal member.iiabcal.org

Advanced Coverage

Feb 11-12 Residence Inn Orlando Airport Orlando, FL MCIEF transportationriskspecialist.com

The Pipeline Virtual Career Fair Feb 12 Online International Gamma Iota Sigma gammaiotasigma.org

2019 NAMIC Claims Conference Feb 13-15 Wigwam Arizona Litchfield Park, AZ NAMIC www.namic.org

Michigan Association of Insurance Agents Annual Convention Feb 18-20 Amway Grand Plaza Grand Rapids, MI MAIA www.michagent.org

Houston Insurance Day 2019

Feb 20 Houston Marriott Westchase Houston, TX Independent Insurance Agents of Houston www.iiah.org

Independent Insurance Agents of Mississippi Agency Management Conference Feb 20-21 The Country Club of Jackson Jackson, MS Independent Insurance Agents of Mississippi www.msagent.org

2019 WSIA Underwriting Summit

Feb 24-27 Gaylord National Resort & Convention Center National Harbor, MD WSIA www.wsia.org

60 | INSURANCE JOURNAL | JANUARY 7, 2019

2019 Insurance Industry Meetings & Conventions Directory 2019 NAMIC Commercial Lines Seminar

Motor Carrier Insurance Considerations

All Industry Day at the Capitol

2019 PLUS Healthcare and Medical PL

IICF Southeast Annual Dinner

2019 Professional Development Conference

Feb 27-Mar 1 Renaissance Chicago Downtown Hotel Chicago, IL NAMIC www.namic.org Feb 28 State Capital Building Olympia, WA IIAB Washington www.wainsurance.org

Feb 28 Ford Center at the Star Frisco, TX IICF www.iicf.org

SIR 2019 Spring Research Workshops Mar 4-6 Mintel Chicago, IL Society of Insurance Research www.sirnet.org

Combined Claims Conference

Mar 5-6 Hyatt Regency, Garden Grove (Anaheim) Anaheim, CA Combined Claims Conference www.combinedclaims.com

Annual Insurance Public Policy Summit

Mar 6 Ronald Reagan Building and International Trade Center Washington, DC Networks Financial Institute isunetworks.org

IICF Blazing the Trail Benefit Mar 7 Four Seasons Hotel Chicago Chicago, IL IICF Midwest Division iicf.ejoinme.org

NextGen - Brewing Up Business 2019 Mar 7 BrewDog Canal Winchester, OH Ohio Insurance Agents www.ohioinsuranceagents.com

PIA of CT Annual Conference

Mar 7-8 Foxwoods Resort Casino Mashantucket, CT Professional Insurance Agents Association www.pia.org

Mar 11-12 Residence Inn Orlando Airport Orlando, FL MCIEF www.transportationriskspecialist.com Mar 12-13 Loews Chicago Hotel Chicago, IL PLUS www.plusweb.org

Mar 12 Jacobs Center San Diego, CA San Diego ASSP www.sandiego.assp.org

Los Angeles I Day

Mar 13 Pasadena Convention Center Pasadena, CA BGP/LA/SFV www.iday.us

Northern California Insurance Professionals Skiing & Snowboarding

Charity Fundraiser Mar 17-18 Base Camp Hotel South Lake Tahoe, CA Hull & Company, LLC

2019 WSIA Automation Conference

Mar 17-20 Walt Disney World Swan and Dolphin Resort Orlando, FL WSIA www.wsia.org

Missouri Small Agency Conference

Mar 21-22 Holiday Inn Columbia, MO Missouri Association of Insurance Agents www.missouriagent.org

Elevate 2019

Mar 24-26 New Orleans Marriott New Orleans, LA Agency Nation www.elevateconference.com

Agency Growth Conference

Mar 27-28 Doubletree Memphis Downtown Memphis, TN Insurors of Tennessee www.insurors.org

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National

2019 Insurance Industry Meetings & Conventions Directory

North Carolina Surplus Lines Association Annual Convention

Advanced Underwriting

Mar 27-29 Grandover Greensboro, NC North Carolina Surplus Lines Association www.ncsla.com

Apr 16-17 Sheraton Indianapolis Hotel at Keystone Crossing Indianapolis, IN MCIEF www.transportationriskspecialist.com

Motor Carrier Insurance Considerations

Global Insurance Symposium

Mar 28-29 Sheraton Indianapolis Hotel at Keystone Crossing Indianapolis, IN MCIEF www.transportationriskspecialist.com

The IAIABC Forum 2019

Apr 1-4 Paradise Point Resort San Diego, CA International Association of Industrial Accident Boards and Commissions www.iaiabc.org

2019 PIA National Spring Governance Meetings Apr 1-4 Hilton Crystal City Arlington, VA National Association of Professional Insurance Agents www.pianet.com

2019 - EDGE Conference Apr 3-4 Par-A-Dice Hotel East Peoria, IL IIA Illinois www.iiaofil.org

Buffalo I-Day

Apr 4 Buffalo Niagara Convention Center Buffalo, NY Big I New York www.biginy.org

FIWT Leadership & Education Mid Year Expo Apr 12-13 MCM Elegante Abilene, TX FIWT www.FIWT.com

2019 NAMC Personal Lines Seminar

Apr 15-17 Renaissance Chicago Downtown Hotel Chicago, IL NAMIC www.namic.org

INSURANCEJOURNAL.COM

Apr 23-25 Community Choice Credit Union Convention Center Des Moines, IA Global Insurance Symposium www.globalinsurancesymposium.com

RIMS 2019

Apr 28-May 1 Boston Convention Center Boston, MA RIMS www.rims.org

MIAA Annual Convention

Apr 29-30 Doubletree South Portland, ME Maine Insurance Agents Association www.maineagents.net

MIIAB/Trusted Choice Convention Apr 30 Mystic Lake Center Prior Lake, MN MIIAB www.miia.org

2019 WSIA Executive Leadership Summit Apr 30-May 3 Darden School of Business Rosslyn Campus Washington, DC WSIA www.wsia.org

BIG Independent Group 10X Tradeshow May 6-9 Ontario Airport Double Tree Ontario, CA BIG Independent Group www.biginsusa.com

2019 NAMIC Directors' Bootcamp 2.0 May 6-8 The Alfond Inn Winter Park, FL NAMIC www.namic.org

Target Markets Mid-Year Meeting

May 6-8 Hilton Baltimore Baltimore, MD Target Marketsâ&#x20AC;Šwww.targetmkts.com

2019 Big 'I' Legislative Conference

May 8-10 Renaissance Washington, DC Downtown Hotel Washington, DC Independent Insurance Agents & Brokers of America, Inc. www.independentagent.com

Motor Carrier Insurance Considerations May 9-10 Sonesta Suites Scottsdale Gainey Ranch Scottsdale, AZ MCIEF www.transportationriskspecialist.com

NJSLA Person of the Year / Honoree Dinner (Steve Powell)

May 9 Echo Lake Country Club Westfield, NJ Surplus Lines Association of New Jersey www.njsla.org

Advanced Coverage

May 2 TBA IIAC Young Agents Committee www.iiact.org

May 13-14 Sonesta Suites Scottsdale Gainey Ranch Scottsdale, AZ MCIEF www.transportationriskspecialist.com

Advanced Coverage

Albany I-Day

2019 Spring Conference

May 2-3 Sheraton Indianapolis Hotel at Keystone Crossing Indianapolis, IN MCIEF www.transportationriskspecialist.com

May 15 Albany Capital Center Albany, NY Capital District Insurance Community Inc. www.albanyiday.com

2019 Blue Ribbon Conference May 5-9 Monarch Beach Resort Dana Point, CA IIABACal member.iiabcal.org

JANUARY 7, 2019 INSURANCE JOURNAL | 61

National Independent Insurance Agents of Wisconsin's InsurCon2019 May 15-17 Madison Marriott West Madison, WI Independent Insurance Agents of Wisconsin www.iiaw.com

2019 Insurance Industry Meetings & Conventions Directory Independent Insurance Agents of Rhode Island Annual Convention Jun 10-12 The Atlantic Resort Newport, RI Independent Insurance Agents of Rhode Island www.iiari.com

Advanced Underwriting

Advanced Coverage

2019 NAMIC Farm Mutual Forum

Chief Data Analytics Officers & Influencers, Insurance

May 15-16 Sonesta Suites Scottsdale Gainey Ranch Scottsdale, AZ MCIEF www.transportationriskspecialist.com May 21-22 Radisson Blu Mall of America Bloomington, MN NAMIC www.namic.org

Accelerate, powered by NetVU

May 21-23 Duke Energy Convention Center Cincinnati, OH Network of Vertafore Users (NetVU) www.netvu.org

NAIC Insurance Summit

Jun 3-7 Kansas City Marriott Downtown Kansas City, MO National Association of Insurance Commissioners (NAIC) www.naic.org

122nd Independent Insurance Agents of Georgia (IIAG) Annual Meeting Jun 6-9 Hilton Head Marriott Resort & Spa Hilton Head, SC IIA Georgia www.iiag.org

Motor Carrier Insurance Considerations Jun 6-7 Residence Inn Orlando Airport Orlando, FL MCIEF www.transportationriskspecialist.com

PIA NJ/NY Annual Conference

Jun 9-11 Harrah's Resort & Casino Atlantic City, NJ Professional Insurance Agents Association www.pia.org

62 | INSURANCE JOURNAL | JANUARY 7, 2019

Jun 10-11 Residence Inn Orlando Airport Orlando, FL MCIEF transportationriskspecialist.com

Jun 11-12 New York, NY Corinium Global Intelligence www.chiefdataofficerinsurance.com

IICF Women in Insurance Global Conference

Jun 12-14 Sheraton New York Times Square Hotel New York City, NY IICF www.iicf.org

Independent Insurance Agents and Brokers of Louisiana Conference Jun 16-19 Sandestin Beach Hilton FL IIAB Louisiana www.iiaba.net

Florida Association of Insurance Agents (FAIA) 115th Annual Convention & Education Symposium Jun 19-21 Orlando World Center Marriott Orlando, FL FAIA www.faia.com

IIAT InsurCon 2019

Jun 19-21 Gaylord Texan Resort & Convention Center Grapevine, TX IIAT www.iiat.org

83rd Annual PIA VA/DC Convention & Trade Fair

Jun 22-24 Sheraton Hotels & Resorts Virginia Beach, VA Professional Insurance Agents of Virginia and the District of Columbia www.piavadc.com

IIAV Annual Conference & Exposition 2019 Jun 23-25 Hilton Virginia Beach Oceanfront Virginia Beach, VA Independent Insurance Agents of Virginia www.iiav.com

IMCA 2019 Annual Conference

Jun 23-25 Minneapolis Marriott City Center Minneapolis, MN Insurance Marketing and Communications Association www.imcanet.com

2019 NAMIC Management Conference Jun 23-26 The Omni Grove Park Inn Asheville, NC NAMIC www.namic.org

SITE Annual Conference

Jun 23-26 The Peabody Memphis Memphis, TN Society of Insurance Trainers & Educators www.insurancetrainers.org

2019 CIWA Summer Forum & Annual Meeting Jun 24-26 Monterey Plaza Hotel & Spa Monterey, CA CIWA www.ciwa.net

Independent Insurance Agents of Arkansas Annual Convention Jun 24-26 Pensacola Beach Hilton Pensacola, FL IIA Arkansas www.iiaar.org

Motor Carrier Insurance Considerations Jul 11-12 Residence Inn Orlando Airport Orlando, FL MCIEF www.transportationriskspecialist.com

Advanced Coverage

Jul 15 Residence Inn Orlando Airport Orlando, FL MCIEF www.transportationriskspecialist.com

Missouri Agents Connection (MAC) Summit

Jul 17-19 Tan-Tar-A Resort Osage Beach, MO Missouri Association of Insurance Agents www.missouriagent.org INSURANCEJOURNAL.COM

National TSLA 2019 Mid-Year Meeting Jul 21-24 Ritz Carlton Lake Tahoe Truckee, CA TSLA ww.tsla.org

2019 NAMIC Agricultural Risk Inspection School Jul 23-25 Renaissance Columbus Downtown Hotel Columbus, OH NAMIC www.namic.org

44th Annual Florida RIMS Educational Conference Jul 30-Aug 3 Ritz Carlton Naples, FL RIMS Florida florida.rims.org

Advanced Underwriting

Aug 5-6 Residence Inn Orlando Airport Orlando, FL MCIEF www.transportationriskspecialist.com

FSLA Annual Convention

Aug 7-9 The Hammock Beach Resort Palm Coast, FL Florida Surplus Lines Association www.floridasurpluslinesassociation.com

95th Annual Big 'I' State Convention Aug 11-14 Coeur d'Alene Resort Golf Course Coeur d'Alene, ID IIAB Idaho www.iiabi.org

IIABAZ's 85th Annual Convention & Trade Show

Aug 22-23 Talking Stick Resort & Casino Scottsdale, AZ Independent Insurance Agents and Brokers of Arizona www.iiabaz.com

IIABO 91st Annual Convention Aug 25-27 Eagle Crest Resort Redmond, OR IIAB Oregon www.iiabo.org

RIMS Western Regional Conference Sep 9-11 J. W. Marriott Las Vegas, NV Nevada Chapter of RIMS www.cvent.com INSURANCEJOURNAL.COM

2019 Insurance Industry Meetings & Conventions Directory 2019 Big 'I' Fall Leadership Conference

Sep 11-15 The Westin Savannah Harbor Golf Resort & Spa Savannah, GA Independent Insurance Agents & Brokers of America Inc. www.independentagent.com

Motor Carrier Insurance Considerations Sep 12-13 Hampton Inn by Hilton Salt Lake City Cottonwood Holladay, UT MCIEF www.transportationriskspecialist.com

Advanced Coverage

Sep 16-17 Hampton Inn by Hilton Salt Lake City Cottonwood Holladay, UT MCIEF www.transportationriskspecialist.com

Independent Insurance Agents of Iowa 113th Annual Convention Sep 18-19 Prairie Meadows Convention Center Altoona, IA IIAIowa www.iiaiowa.com

Advanced Underwriting

Sep 18-19 Hampton Inn by Hilton Salt Lake City Cottonwood Holladay, UT MCIEF www.transportationriskspecialist.com

Rochester I-Day

Sep 19 Artisan Works Art Museum Rochester, NY Big I New York www.biginy.org

2019 NAMIC 124th Annual Convention Sep 22-25 Gaylord National Convention Center National Harbor, MD NAMIC www.namic.org

2019 WSIA Annual Marketplace

Independent Insurance Agents of Texas Small Agency Conference Sep 23-24 Hilton Waco & Convention Center Waco, TX IIAT www.iiat.org

2019 American Agents Alliance Conference & Expo

Sep 26-29 JW Marriott Desert Springs Resort & Spa Palm Desert, CA American Agents Alliance www.agentsalliance.com

48th Annual International Conference Sep 26-28 Hilton Anatole Dallas, TX Gamma Iota Sigma gammaiotasigma.org

MCIEF Annual Conference

Oct 3-4 Hyatt Regency Orlando International Airport Orlando, FL MCIEF www.transportationriskspecialist.com

2019 NSPII Insurance Fraud Seminar

Oct 7-8 Doubletree by HIlton Lawrenceburg Lawrenceburg, OH National Society of Professional Insurance Investigations (NSPII) www.nspii.com

4th Annual Environmental Insurance Forum Insuring Resilience: Monetizing Environmental Risks Oct 7-9 Hyatt Regency Boston, MA Society of Environmental Insurance Professionals www.seipro.org

IA&B Futures Conference

Oct 8-9 Omni Bedford Springs Bedford, PA Insurance Agents & Brokers www.IABforME.com

Sep 22-25 TBA San Diego, CA WSIA www.wsia.org

JANUARY 7, 2019 INSURANCE JOURNAL | 63

National Independent Insurance Agents & Brokers of South Carolina (IIABSC) Annual Convention Oct 13-15 Westin Savannah, GA Independent Insurance Agents & Brokers of South Carolina (IIABSC) Annual Convention www.iiabsc.com

FIWT 75th Annual Convention Oct 17-20 Moody Gardens Galveston, TX FIWT www.FIWT.com

Insurors 126th Annual Convention Oct 19-22 The Westin Chattanooga Chattanooga, TN Insurors of Tennessee www.insurors.org

SIR 2019 Annual Conference & Exhibit Fair Oct 20-22 Sheraton Charlotte Hotel Charlotte, NC Society of Insurance Research www.sirnet.org

The IAIABC 105th Convention

Oct 21-24 The Westin Convention Center Pittsburgh, PA International Association of Industrial Accident Boards and Commissions www.iaiabc.org

2019 Insurance Industry Meetings & Conventions Directory Target Markets 19th Annual Summit Oct 21-23 Westin Kierland Resort Scottsdale, AZ Target Markets www.targetmkts.com

ACORD Connect 2019

Oct 29-30 TBA Boston, MA ACORD www.acordlomaforum.org

IICF Houston Chapter Clay Shoot Tournament 29-Oct Greater Houston Gun Club Houston, TX IICF www.iicf.org

Independent Insurance Agents of Nebraska Annual Convention

Oct 9-11 Younes Conference Center Kearney, NE Independent Insurance Agents of Nebraska www.iiaba.net

RIMS ERM Conference Nov 4-5 TBA New Orleans, LA RIMS www.rims.org

TSLA 2019 Annual Meeting Nov 10-11 Four Seasons Hotel Austin, TX TSLA www.tsla.org

Independent Insurance Agents of Indiana 2019 Annual Convention

Advertisers Index

Nov 11-13 Westin Hotel Indianapolis, IN IIA Indiana www.bigi.org

Applied Underwriters www.auw.com 2, 3, 68 California Earthquake Authority mvp.earthquakeauthority.com W3 M.J. Hall & Company www.mjhallandcompany.com W7 Monarch E&S Insurance Services www.monarchexcess.com W11 Pacific Gateway Insurance Services www.pgiainsurance.com W5 Philadelphia Insurance Companies www.phly.com 7 State Compensation Insurance Fund www.statefundca.com W9 United Fire Group www.ufgsolutions.com E1

64 | INSURANCE JOURNAL | JANUARY 7, 2019

INSURANCEJOURNAL.COM

National Idea Exchange continued from page 53 What constitutes an auto’s “equipment?” Is a dump truck tarp “auto equipment?” What about a detachable snow plow blade? Is this equipment covered only while attached to the vehicle? When not attached, is it covered by any non-auto policies? The answers to these questions must be known in order to properly insure the property and avoid claim disputes at a later date.

In the coming months, we will lay a foundation of principles and practices that will enable you to successfully resolve coverage and claims disputes for years to come. This series of articles will address the issues involved, with as many illustrations as we can squeeze into print, and the webinar series will dig even deeper to explore, via real-life claims and court cases, the issues. I believe you’ll find that the

practical knowledge and skills you acquire will make you more competitive, better able to serve your customers, and make it far less likely that you’ll endure the angst of an E&O claim. Come along for the ride.

January 7, 2019

Mid-Continent Assurance Company 301 E. Fourth Street Cincinnati, OH 45202

Mid-Continent Casualty Company 301 E. Fourth Street Cincinnati, OH 45202

ISMIE Mutual Insurance Company 20 N. Michigan Avenue Chicago, IL 60602

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

January 7, 2019

SFM Mutual Insurance Company 3500 American Blvd., Suite 700 Bloomington, MN 55431

National American Insurance Company 1010 Manvel Avenue, P.O. Box 9 Chandler, OK 74834

Peak Property and Casualty Insurance Corporation 1800 North Point Drive Stevens Point, WI 54481

The above company has made application to the Division of Insurance to obtain a Foreign Company License to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

The above company has made application to the Division of Insurance to obtain a Foreign Company License and to transact Property and Casualty Insurance in the Commonwealth of Massachusetts.

INSURANCEJOURNAL.COM

Wilson, CPCU, ARM, AIM is the founder and CEO of InsuranceCommentary.com and the author of the book “When Words Collide: Resolving Insurance Coverage and Claims Disputes.”

The above company has made application to the Division of Insurance to amend their Foreign Company License and to transact Property and Casualty Insurance in the Commonwealth of Massachusetts. Any person having any information regarding the company which relates to its suitability for the license or authority the applicant has requested is asked to notify the Division by personal letter to the Commissioner of Insurance, 1000 Washington Street, Suite 810, Boston, MA 02118-6200, Attn: Financial Surveillance and Company Licensing within 14 days of the date of this notice.

JANUARY 7, 2019 INSURANCE JOURNAL | 65

National Closing Quote SignOn Once: The Solution to Password Security

By Michael J. Foy

lot has been written about multi-factor authentication, especially in light of new cybersecurity requirements from the New York Department of Financial Services, NAIC and the federal government. A multi-factor login requires a second or third verifying credential in addition to a password — a one-time PIN texted to your smartphone or the answer to a security question. While multi-factor may be more secure than just a single password, it’s costing businesses in lost productivity. I’ve estimated that in my agency alone, the cost of implementing multi-factor across all of my offices would be in excess of $300,000. Mostly, it’s the time involved in creating new credentials for each account and the time lost when an employee has to wait to receive a PIN. You might say, “What’s 15 minutes here or there?” Multiply that by the number of employees in your operation, and you’ll see it can add up to the equivalent of several full-time positions during the course of a year. Multi-factor also brings its own headaches for management. How do you control the provisioning process for PINs? Do you really want a PIN texted to an employee’s personal smartphone? Or to a personal email account? It creates its own security risk in that employees can access sensitive information or carrier portals without your knowledge or control. And they could take 66 | INSURANCE JOURNAL | JANUARY 7, 2019

their credentials with them if they leave. A survey by the global IT security firm IS Decisions found that organizations are concerned about the way technology is impeding end users, with nearly half (47 percent) agreeing that security measures in their organization negatively impact productivity. U.S. employees lose about 22 minutes every week because of complex IT security procedures, IS Decisions found. Multi-factor isn’t a solution. It’s a BandAid. The solution lies in streamlining the login process so there are fewer credentials to begin with. Biometrics is one example, and most of us have now experienced the ease of logging into an app with the touch of a finger. It’s that ease of use and concern for security that spurred industry leaders to create ID Federation and the single sign-on technology called SignOn Once. The beauty of SignOn Once is that it requires agency employees to sign on just once to their agency management system. Once logged in, the user can easily and securely access other federated partners. SignOn Once won’t eliminate the additional layer of authentication required by new cybersecurity rules, but it will reduce the number of times you and your staff have to log into systems each day. With SignOn Once, there’s just one login. ID Federation has developed a trust framework (downloadable at IDFederation. org) to protect the security of its federated

partners. By using individual credentials and tokens, and certifying identity providers (vendors such as Vertafore and Applied Systems), SignOn Once ensures logins are safe and eliminates many of the issues associated with poor password protection. At a time when management experts keep telling us we need to move towards a “frictionless” customer experience, it’s time we also looked at the end user’s experience. SignOn Once allows carriers and agencies to do what they do best: sell insurance and service clients. With a seamless, secure connection, users can spend more time collaborating and less time worrying about passwords. In short, agency owners can direct more staff time toward customer-facing actions. Over time, the companies that are federated partners and accept SignOn Once credentials will have the competitive edge. Incidentally, carriers can also save money by adopting SignOn Once because it eliminates the need for password resets. If every agency reached out to at least their largest carrier and urged them to join ID Federation, we’d be one step closer to a world with fewer passwords and more secure systems. We’d also have more time for what we do best — interacting with customers. Foy is president of Foy Insurance Group in Exeter, N.H. He is chairman of the Network of Vertafore Users (NetVU).

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Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com. ©2019 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best. Insurance plans protected U.S. Patent No. 7,908,157.