Bulletin draft by Insurors of Tennessee

BULLETIN VOL11-01 • JANUARY 1,2011

Insurors New Logo Now Available Online

Submitting Your 2011 Membership Renewal By now you should have received by mail your 2011 Dues Renewal kit. The kit should have contained an explanation of the dues structure and an estimate of your 2011 dues based on the number of employees we have on file for your agency. There should have also been a listing of those employees that we currently have in our database. Please review both the renewal form and the employee listing and make any necessary corrections and/or additions. To return your form, simply fax it to 615.385.9303 or scan and e-mail it to info@insurors.org. You can also start the dues renewal process online by visiting http://www.insurors.org/ duesrenewal In addition, don’t forget that through the first week of the new year (by 1/7/10), if you pay your membership renewal fee in full and by check, you are eligible for a 5% discount. This is an easy way to save money on an important business expense, so be

sure to get your check in to Insurors today! Now is your chance to save 5% and still receive all of the great member benefits that Insurors has to offer. These benefits include: • • • • • • • • • •

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Continuing Education Lobbying Trusted Choice branding Top-rated E&O Coverage Access to Specialty Markets Access to Umbrella Markets Meetings & Events Research & Expertise Discounts on Shipping and Rentals Publications such as: • The bi-weekly Bulletin • The bi-monthly Insuror magazine • The monthly MarshBerry • The monthly Marketplace Update Membership in IIABA National and more!

Along with your Insurors Dues Renewal kit, you should have received a 2011 Branding Guide which illustrated the ways to incorporate Insurors new logo and Trusted Choice into your agency marketing. In order to make the transition easier for you, we have posted all the formats you may need for your marketing and promotional pieces online. The logos available include the following: A high resolution EPS file for • signage • print projects • collateral materials A medium resolution JPEG file for • everyday printing • some web applications A low resolution GIF file for • most web applications • e-mail signatures Visit www.insurors.org and if you find another format or file that you need made available, please e-mail Daniel Smith at dsmith@insurors. org or call 615.515.2601.

Insurors of Tennessee Web: www.insurors.org Phone: 615.385.1898 Toll-free: 1.800.264.1898 Fax: 615-385-9303 E-mail: info@insurors.org

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JANUARY 1, 2011

More Information & Answers on PC1149

to register with the Secretary of State and be listed on the Exemption Registry.

After our Wednesday webinar on the new Workers’ Compensation law, some good questions were posed that we would like to share with you. First, the Secretary of State says that the website for declaring Construction Service Providers (CSPs) exempt will be up on January 4th, and that application and information will not be available before then.

If an exempt CSP is injured on a job, can he sue the GC under a negligence theory? Yes. The injured CSP will be allowed to file suit under negligence or any other theory, other than workers’ comp.

Now, please take a look at some of the questions and answers from the webinar. You can view all of the FAQs at http://www.insurors.org/ Content/NavigationMenu/Home/ MembersOn ly/ Techn ical Info/ WorkersComp/WCFAQs/default. htm How will contractors be notified of the new law and the registration procedures? The state is not under any obligation to notify anyone of law changes. The TWCIP will be sending out information about the new law to all policyholders with construction classifications. Regarding registration, it appears that the SOS website will be very user friendly, and the filing instruction sheet is very detailed. Should we recommend that a noncommercial subcontractor with no employees register with the Secretary of State? It depends upon whether your noncommercial subcontractor wants to purchase a policy on himself or not. If he does not want to purchase workers’ compensation insurance on himself, then he would be required

the exclusions in the policy. The new law specifically provides that an injured exempt CSP may seek common law damages.

If the exempt CSP had a policy of comp on his employees, but not covering himself, that policy would not provide any third party relief or recovery to the GC because the exempt CSP was not insured under that policy. (Logically, policies only provide recovery for those insured.)

If a subcontractor becomes listed on the exemption Registry effective March 1, 2011, would he be picked up on the GC’s policy at audit? If he was published on the registry effective March 1, then he should not be picked up on the GC’s policy at audit.If a subcontractor was published on the exemption Registry after March 1, 2011, then there is a potential that the GC’s audit would pick that sub up as an employee between 3/1/11 and the publication date. The payroll should be applied pro-rata for the time of the gap.

Another example could be: If the GC has employees covered on his own WC policy, and an exempt CSP on the job as well injured one of the GC’s employees, the GC’s WC carrier could subrogate back against the exempt CSP for payments made on behalf of the injured employee.

How does the new law apply to contractors domiciled outside of Tennessee? It will apply to anyone doing construction work in Tennessee. So, a KY contractor doing work in TN will be required to either cover himself with comp or file for an exemption.

GL will not respond to WC related injuries, correct? You are correct. However, if the injured person is not an employee and exempt from comp, the injured person may file a negligence action against the GC. At that time, the GC may seek defense and liability coverage from his CGL policy. If your insured receives a liability claim for an injury that occurred on the premises or jobsite, he can look to the CGL if there is a claim of negligence on his part. The CGL may also cover the negligence of his employees. Liability claims for work-related injury are brought regularly against CGL insureds and may be covered despite

How Does Swiss Re Determine Premium Ever wonder how Swiss Re determines your E&O premium? They use a process called predictive modeling to more accurately allocate premium to loss drivers. Agencies with more exposure pay more, those with less exposure, pay less. Predictive modeling is a process in which long term historical loss data (application and policy data) is used to identify causes of claims frequency and severity. Activities typically

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JANUARY 1, 2011

generating higher claim frequency and severity include bonds, long-haul trucking, commercial auto, and nonstandard auto, as well as agencies with multiple locations and those that have had a disciplinary action imposed against them by a Department of Insurance.

nation helps insureds understand the reason behind it.

Conversely, in the area of brokerage business, data revealed that those agencies producing a greater amount of brokered business actually performed better and, as such, will receive a premium credit. In a nutshell, the 2011 rates include a small base rate increase, combined with the variables that predictive modeling indicated drives frequency or severity of claims. This rating approach is designed to more fairly allocate premiums. While no one welcomes a rate increase, hopefully this expla-

While experiencing an increase in premium is never easy, this change will assure Swiss Re is charging adequate premiums, which helps ensure the stability and longevity of the E&O program.

If your premium is increasing substantially it is likely that your agency has characteristics or writes business that has been shown to have an increased exposure to loss.

For more information on Swiss Re’s E&O program, contact one of your Association E&O Administrators: Stephen Holmes at 615.515.2609 sholmes@insurors.org; or Coit Holbrook at 615.515.2608 cholbrook@ insurors.org

Give the Gift Disaster Preparedness in ‘10

Recent reports indicate that 2011 will be an active hurricane year—help the Big “I” prepare now by making a tax-deductible contribution to the Trusted Choice® Disaster Relief Fund. The Disaster Relief Fund was established by the Big “I” Educational Foundation to assist those who have suffered losses due to natural or man-made disasters. The foundation is a 501(c)(3) entity and all contributions are tax deductible. To make a contribution to the fund or to apply for a grant, go online and visit http://www.independentagent.com and click on “About Us” and “Trusted Choice Disaster Relief Fund.”

You or someone you nominate may be the next Outstanding CSR of the Year! Call for Nominations: Nominations are now being accepted for the 2010 Outstanding Customer Service Representative of the Year award. The national winner will receive $2,000 cash, a gold and diamond pin, and a framed certificate of recognition. National finalists win $500 and a gold and garnet pin. And if you nominate the national winner, you receive a $1,000 prize! All it takes to enter is a nomination, a letter of recommendation, a competition entry form, and a 1,000-word essay written by the nominee on a customer service topic specified by The National Alliance. Entries are due no later than May 1, 2010. For more information about the contest, the essay topic, and to download forms, visit: www.scic.com/CISR/CompeteWin/CompeteWin.htm

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Average HO Premium Tennessee and Nevada are tied for the 24th lowest HO 3 average premium in the country for 2008. The Tennessee average premium for 2008 was $692 while the highest and lowest average premiums were $1,460 in Texas and $387 in Idaho respectively. The countrywide average premium was $791. Tennessee ranks 4th in the Southeast behind Kentucky, Virginia and North Carolina. The average premium is an imperfect measure of the relative price of insurance due to wide variations in hazards, economic conditions and real estate values. The 2008 average HO 3 premiums are listed below: State 1. Idaho 2. Utah 3. Oregon 4. Washington 5. Wisconsin 6. Delaware 7. Ohio 8. Maine 9. Pennsylvania 10. Kentucky 11. Virginia 12. South Dakota 13. Iowa 14. Arizona 14. Illinois 16. Maryland 17. West Virginia 18. New Hampshire 19. Vermont 20. Indiana 21. Wyoming 22. North Carolina 23. New Jersey 24. Nevada 24. Tennessee

HO-3 $387.00 $432.00 $439.00 $471.00 $503.00 $535.00 $565.00 $572.00 $586.00 $601.00 $604.00 $609.00 $612.00 $628.00 $628.00 $637.00 $638.00 $647.00 $650.00 $658.00 $676.00 $683.00 $691.00 $692.00 $692.00

$703.00 $715.00 $721.00 $749.00 $788.00 $788.00 $798.00 $808.00 $814.00 $842.00 $845.00 $845.00 $856.00 $862.00 $897.00 $911.00 $916.00 $926.00 $980.00 $980.00 $983.00 $1,026.00 $1,048.00 $1,155.00 $1,390.00 $1,460.00 $791.00

OKBig“I”Association Trusted Choice Video

Stephen Holmes, CISR, formerly of Preferred Comp, has joined Insurors full time as an E&O Specialist. A Nashville native, Holmes graduated from the University of Tennessee in 2002 with a Bachelors degree in Communications. He joined Preferred Comp in Jan. 2004 as a CSR.

Insurors has put together an online member survey to help us gather information on who our Association can contact for help with grassroots political efforts. If you have a personal relationship with any of Tennessee’s incoming or current elected officials, please take a few minutes to complete the survey and let us know.

26. New Mexico 27. Michigan 28. Montana 29. Georgia 30. Arkansas 30. Missouri 32. South Carolina 33. North Dakota 34. Nebraska 35. Colorado 36. Alabama 36. Minnesota 38. Alaska 39. Hawaii 40. Rhode Island 41. California 42. Kansas 43. District of Columbia 44. Connecticut 44. Mississippi 46. New York 47. Massachusetts 48. Oklahoma 49. Louisiana 50. Florida 51. Texas Country

Holmes Joins E&O Staff at Insurors

He started at Insurors on an interim basis in August of this year and we are pleased to have him available permanently to work with our members. He can be contacted at 615.515.2609 or by e-mail at sholmes@insurors. org

Our counterparts at the Oklahoma Big “I” have put together a very innovative video on Trusted Choice for their members. Their Executive Director, Dan Ramsey, even gets a tattoo to help illustrate their message. To view the video, visit http://www. youtube.com/user/IIAOTV and then scroll down to the far left side under “Recent Activity” and click “Trusted Choice Advertising.”

Our Elected Officials Survey Still Available After the recent state elections we have a new political landscape in Tennessee. Some of these changes are unprecedented and will have a major impact on legislation in 2011. Along with a new Governor, we will have a new Speaker of the House, new Committee Members and Chairs as well as new Department Commissioners.

Please take a moment to view the complete list and complete the short Insurors elected officials survey online now at http://www.surveymonkey.com/s/MJW83PX