The Tennessee Insuror Mar/Apr 16

THE TENNESSEE

INSUROR March/April 2016

Vol. 27 No. 2

www.insurors.org

8 10 48

The Top 4 Cybersecurity Risks for Insurance Agencies Financing Agency Growth?

A Primer on Best Practices

What Do Dues Do? Insurors Membership Can Help Grow Your Agency

The Best Defense is a Good Offense

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

For information call (877) 234-4450 or visit auw.com/us. Š2016 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

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

The Tennessee Insuror

contents

THE TENNESSEE

INSUROR Vol. XXVII, Number 2 March/April 2016

features

Phone (615) 385-1898 Toll Free: 1-800-264-1898 Email: info@insurors.org Editor: Charles T. Bidek, CPCU Publisher: Daniel D. Smith Jr.

4 What Do Dues Do? INSURORS OFFICERS

President ............................. Christie Reeves, CIC, CPCU, CPIW Immediate Past President ......................... Cindi Gresham, CIC IIABA National Director ......................................... Lou Moran III Vice President, Region I ..................................... Chris Allison, CIC Vice President, Region II ................................................... Joe Hunt VP, Region III and President Elect ................ John McInturff III Treasurer .............................................. Battle Bagley III, CIC, CPA Secretary ...................................................................... Rush Powers Director, Region I ....................................................... Portis Tanner Director, Region I ............................................ Stephen Masterson Director, Region I .......................................................... Tim Roberts Director, Region II ....................................................... Chip Fridrich Director, Region II .................................. Matt Swallows, CIC, CRM Director, Region II ................................................. Steve Copeland Director, Region III ..................................................... Kevin Ownby Director, Region III .................... Kym Clevenger, CPCU, CACW Director, Region III .................................................... Eric Campbell Young Agents Chairperson .................................. Brent Chance

ADVERTISING

Display advertising rates, deadlines and specifications may be obtained by writing to Insurors of Tennessee, 2500 21st Avenue South, Suite 200, Nashville, TN 37212, calling 615.515.2601, e-mailing dsmith@insurors.org or online at www.insurors.org The Tennessee Insuror is provided to all Insurors of Tennessee members and associate members as a member service.

Insurors Membership Can Help Grow Your Agency

8

The Top 4 Cybersecurity Risks for Insurance Agencies

10

Financing Agency Growth? A Primer on Best Practices

14

Daniel Learns About Ins.: Chrome, Classics and Coverages

31

Government & Legal: The Agent’s Standard of Care

48

The Best Defense is a Good Offense

departments 21

From Your President

You’re Never Too Big or Too Small for Insurors

23

From Your IIABA National Director

25

From Your CEO

29

Education Calendar

31

Government and Legal Affairs

37

Broker Spotlight

INSURORS OF TENNESSEE 2500 21st Avenue South, Suite 200 Nashville, TN 37212-0539 www.insurors.org

The Surging Collector Car Market is Ready to Be Covered

The New Kid in Town

All for One, and One for All?

Burns & Wilcox

39 Company Spotlight

Rate Recovery Plan by Cornerstone National 51 Meetings 53

Member Tips

RLI Home Business Insurance

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What Do Dues Do? Insurors Membership Can Help Grow Your Agency

As an Insurors member, you pay dues each year to particpate in the organization. You probably know that those dues go towards supporting Association activities on the State and National level. But do you know all the things those dues do for your agency? Let’s take a look at a breakdown of what dues do with this overview based on our name – I-N-S-U-R-O-R-S.

I – Information The Insurors staff can answer questions about almost anything the insurance industry throws at you. Need info on carriers, rates or policies? Former State Actuary and Insurors Market Development Manager, David Williams, has over 40 years of industry experience. Have questions about agency best practices, M&A or management? Our CEO, Chuck Bidek, CPCU, has been working with agencies for over 40 years at Insurors. Have a legal or HR question? Insurors General Counsel, Ashley Gold, J.D., has worked with businesses for almost two decades on legal matters.

The Insurors staff can also help you with marketing questions, technology issues, professional liability and more. As a whole, your nine Insurors staff members have over 175 years of combined experience in the insurance industry.

When news effects our industry, especially in this state, we want you to hear about it. That’s why we work hard to include 4

the latest and most pertinent information in the Association publications – The Tennessee Insuror, The Insurors Bulletin and The Marketplace Update. Add to that the national information you receive from the Big “I” and you have all the sources of industry news you need.

N – Networking Need to find new markets? We offer two trade shows each year with a combined 100+ exhibitors on hand. Want to get to know your company partners, peers and even competitors?

Over 1,000 people attend Insurors events, classes and outings each year. Interested in learning about the government affairs process? Our annual State legislative reception is the largest in the industry.

There are numerous opportunities to meet and network with your industry peers as an Insurors member. Take a look at the event calendar on www.insurors.org and find one that works for your needs.

S – Study The world of insurance is competitive, and it takes work to set yourself and your agency apart. One of the best ways to differentiate yourself is through education. We offer over 200 hours of continuing education credit each year. Everything The Tennessee Insuror

from online webcasts through the Agents and Brokers Education Network to seminars at our annual Agency Growth Conference are available. We are also the state-sponsoring organization for the programs of The National Alliance for Insurance Education and Research, including designation programs like the Certified Insurance Counselor (CIC) program and the Certified Insurance Service Representative (CISR) program. Visit www.insurors.org to view our education schedule now.

U – Underwriting One of the most important products we offer members is errors & omissions insurance (E&O). We strive to provide you with the security of knowing you are getting the best overall E&O value in the marketplace – not just a policy, but a comprehensive program. Over the past two decades the Big “I” Professional Liability Program, underwritten by Westport Insurance Corporation, a member of the Swiss Re Group, has grown into the largest and most stable insurance agents E&O program in the nation. It is rated A+”Superior” by A.M. Best. While other carriers have come and gone from the E&O marketplace, Westport has remained a strong, reliable partner for Tennessee’s agents.

Our E&O department includes E&O Specialist Stephen Holmes, CIC, CISR and approved agency E&O auditor Don Cunningham, CIC, CPCU. Along with our CEO Chuck Bidek, Stephen and Don are the industry experts you want helping you protect the future of your agency. Their expertise and experience with Tennessee agencies sets us apart from the competition.

In addition to Swiss Re, we have E&O markets available from Fireman’s Fund and A.J. Wayne, as well as cyber liability, commercial umbrella and EPLI options for your agency. For information, contact our E&O Department at 866.515.2609 or e-mail sholmes@insurors.org.

R – Regulation Insurance is a regulated industry, and that regulation shapes how you do business. From continuing education requirements to professional privilege taxes, there are issues that come up year after year at the State level. There are also issues like sinkhole coverage, workers’ compensation OptOut and financial responsibility laws that turn into prolonged efforts. Insurors has three registered lobbyists that monitor activity on “The Hill,” meet with other industry groups, and help strategize how to respond to these and other issues.

Our lobbyists have a combined 70+ years of government affairs experience. When an issue is raised that affects the insurance industry, they are called on by legislators and stakeholders to give insight. Insurors also has a long history of working on issues with the Department of Commerce and Insurance and the Department of Labor.

On the Federal level, the Big “I” has one of the most respected The Tennessee Insuror

Government Affairs teams in our industry. As an Insurors member, you can rest assured that your voice is being heard on regulatory and legislative issues.

O – Options One of the most important assets of membership in your Association is the options it can provide your agency. Take a look at some of the market options available to you as an Insurors member: Preferred Comp of Tennessee Preferred Comp of Tennessee (Preferred Comp), a division of Meadowbrook Insurance Group, Inc., is exclusively endorsed by the Insurors of Tennessee to provide a strong market and competitive options for workers’ compensation coverage and services to Insurors member agencies. Preferred Comp has been in existence since 1996 and is committed to producing profitable business to meet its obligations to agency and company partners and to insure the sustainability of longterm markets for Insurors members.

Now, the Preferred Comp partnership will offer Insurors members expanded access to the work comp marketplace.

New for 2016, your Insurors membership will gain you access to SEVEN new work comp markets and TWO new BOP and multi-line markets. All without contracts or production requirements. And as always, you have access to the carriers of Meadowbrook Insurance Group, including Star Insurance Company and Williamsburg National Insurance Company.

Contact Keller Chapman at keller.chapman@meadowbrook. com for more information.

RLI PUPs and Home Business Personal Umbrella Policies (PUPs) and Home Business Insurance are coverages sometimes overlooked by your clients that could provide extremely valuable protection.

Written through RLI and administered by Insurors, the RLI PUP is a stand alone product that does not require the insured to place underlying coverages with RLI. Coverages are available with $1M, $2M, $3M and $5M limits.

The RLI Home Business Insurance policy responds to the needs of over 100 eligible business classes on an ISO BOP form. Premiums start at $150, with competitive commissions, easy underwriting and a self-rating application that make this product an easy sell. Contact David Williams at dwilliams@ insurors.org for more information.

Big “I” Markets Big “I” Markets provides free online access to specialty/niche coverages, program business and hard-to-find markets exclusively for Association members. The program uses proprietary technology to give agents access to coverages, forms and applications. Over 50 product categories are available, including Surety Bonds, Commercial Lessor’s Risk, Vacant Dwelling, Marine Insurance, Affluent Homeowners, Event Liability, Life Insurance, Cyber Liability, EPL, D&O, 5

Habitational Programs and more! Visit www.bigimarkets.com for more information.

Big “I” Flood The Big “I” Flood Program is available to all Insurors members and provides access to flood markets for most flood risks offering the National Flood Insurance Program (NFIP) for primary flood coverage and excess flood products for risks that have higher values or are ineligible for the NFIP. Selective Insurance, a NFIP Write-Your-Own company since 1984, has been the Big “I” Flood program partner for the primary NFIP for over 12 years. Contact Tammy Goodman at tammy. goodman@selective.com for more information on the Selective program.

Wells Fargo Special Risks, an experienced flood broker provides access to the Lloyds syndicates for excess flood products providing limits over the maximum available or ineligible for the NFIP. Contact Jeff St. John at jeff.stjohn@ iiaba.net for more information on the excess flood insurance program.

• • •

Web Quoting and online account management for you and your clients Flexibility of billing & payment options, including mail, online, payment in agency, or at a local Western Union Take control over your premium finance business with one centralized source for all your needs

Contact Dave Baker at daveb@ipfs.com for more information.

DocuSign DocuSign is used to accelerate transaction times to increase speed to results, reduce costs, improve customer service and reduce E&O exposure. DocuSign will help members: • • • •

Increase speed to revenue Reduce costs Improve customer service Reduce E&O exposure

DocuSign also offers exclusive discounted pricing to members. Visit www.docusign.com/iiaba for more information.

Big “I” Eagle Agency Eagle Agency is general agency created exclusively for Big “I” members that provides access to top-rated carriers like Travelers, The Hartford, Progressive and MetLife Auto & Home with low volume commitments and no fees. Contact eagleagency@iiaba.net for more information.

WAHVE Work at Home Vintage Experts (WAHVE) utilizes an innovative work-at-home model, contracting skilled vintage insurance professionals to help insurance firms have continued access to experienced insurance talent regardless of location and at a cost-savings. Visit www.wahve.com for more information.

R – Resources

Trusted Choice Trusted Choice® and TrustedChoice.com are the branding partners of the independent agent. Over 60 companies, and more than 20,000 independent insurance agencies across the country are now part of the Trusted Choice Brand. With detailed agency profiles, expanded consumer resources, and comparative quoting, TrustedChoice.com is unlike any other insurance website – and more new prospects are discovering that difference every month. Prepare or improve your agency’s profile and get consumer leads today. Personal and Commercial Lines leads with over 50 carrier partners are now available. Visit www.trustedchoice.com/for-agents for more information.

Your agency needs more than markets to succeed, and we have other resources that can help give you an edge.

Check out some of the other resources available to Insurors members: INSBANK INSBANK offers banking and loan services to agents and other small businesses throughout the state. INSBANK entity Finworth Mortgage adds residential mortgages to its available products. INSBANK’s leadership and staff are comprised of experienced professionals who are committed to serving their customers. Visit www.insbanktn.com for more information.

S – Support

Imperial PFS Imperial PFS (IPFS) is endorsed by the Insurors of Tennessee to provide members with a first class premium financing experience. IPFS is the nation’s leading premium finance company, offering the following benefits to agency partners and borrowers:

Your Association is here to support you above all else. If there are issues that need addressing, contact us for assistance. If we don’t have the answers, we will find them for you. If you have ideas on products or services we could be offering, please let us know. We want to be your one-stop-shop for agency support.

•

Even More Resources Are Available

• • •

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Flexible terms & down payments with no volume commitments Financing for most policies as low at $250 Opportunities to earn revenue, where permitted by law Efficient and knowledgeable service from a dedicated Sales Executive and local Branch office

This list is just some of the products and services that are offered to you as members by your Association. You can always see more information by visiting our website at www. insurors.org or calling 1.800.264.1898. u The Tennessee Insuror

IT’S THE RIGHT THING TO DO. Arlington/Roe. You have our word on it.

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7

The Top 4 Cybersecurity Risks for Insurance Agencies

The following article initially appeared in the March issue of IA magazine.

Every type of insurance policy collects sensitive data to determine and qualify risk. Insurance agents and brokers collect full names, dates of birth, social security numbers and payment information from every prospective customer. Since today’s insurance marketplace requires every insurance professional to be connected to the Internet, it is imperative that they keep this accumulated sensitive data safe.

by Ken Butler, founder of eVo

globe—and they can penetrate any wireless device in your office without your knowledge. By the time you’ve realized a breach has taken place, the sensitive information that belongs to clients and employees is already up for sale.

Hackers can be individuals, small groups or even large syndicates intent on stealing data and selling it on the black market. Hackers may also use “ransomware” to force their target to pay a ransom or lose access to all the data stored on their computer or device.

There is no better way to ensure financial devastation in your business than to allow hackers to steal the sensitive data of your cherished prospects and clients during a security breach. As more and more businesses use wireless connections, hackers can instigate threats to your network in many different ways:

Threat 2: Your Employees

Threat 1: The Lone Wolf Hacker

Your former employees have the ability to wreak havoc on your company out of spite. Your current employees have that ability even more so. It is not uncommon to hear about a server in your favorite restaurant who was caught stealing data

Your worldwide Internet connection puts you at risk from hackers, whether they’re living down the street or across the 8

Ponemon Institute surveyed 945 individuals who were laid off, fired or quit their jobs in the past 12 months for the “Jobs at Risk = Data at Risk” survey, showing that 59% admitted to stealing company data.

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from customers’ credit cards, or a nursing assistant at your primary physician’s office stealing and then selling private information. What about your employees? Have you taken the necessary pre-employment steps to make certain you can trust them, or do you simply assume you can?

Threat 3: Mobile Devices Allowing your employees to use their own mobile device, tablet or laptop to access your network without proper security measures is like giving them the keys to the office and the security code for the alarm system. The insurance industry is especially vulnerable since a large segment of the workplace typically telecommutes.

Mobile devices are the most common form of communication for insurance agents and brokers who are usually out of the office during the day. Most agents and brokers can access their CRM from their phone and therein lies a significant risk.

Accessing unsecured wireless networks via your smartphone is a recipe for disaster if there ever was one.

Threat 4: Third-Party Service Providers Generally speaking, this could be a very large category. For the insurance agent or broker, third-party service providers typically consist of companies hired to help complete the insurance transaction.

For property-casualty insurance, this might include property inspectors and motor vehicle records agencies, either private or state controlled. For life-health, this might include medical exam providers, as well as agencies like MIB Group, Inc. (formerly The Medical Information Bureau Inc.). For commercial insurance, this might include building inspectors, credit agencies and Comprehensive Loss Underwriting Exchange.

All these agencies—and others—transmit sensitive client data over the Internet directly to the agent or firm that has a valid subscription. These transmissions, if intercepted by a hacker, can open a gigantic hole in the security net over your network and put your clients at risk.

Sophisticated hackers can obtain your valued clients’ sensitive and private information 24/7. That makes implementing a security program at your agency essential in mitigating risk and protecting the information with which you are entrusted.

Could your agency weather a data security breach?

A full 80 percent of businesses that experience one don’t.1 The right insurance can keep your agency from becoming part of this startling statistic.

Data breaches are common among smaller businesses, and responding to a breach is both costly and complex.

You are obligated to protect the data you collect, and package policies are often not enough.

Make sure your agency has the right coverage in place to protect you and your insureds.

Contact your Insurors E&O Specialist, Stephen Holmes, CIC, CISR, for information on Data Breach coverage.

1. Privacy Rights Clearinghouse: Chronology of Data Breaches

About the Author Ken Butler is the founder and manager of Evolution Agency Management, LLC, and agency management system company. Ken’s background includes being a high school math teacher, a financial systems manager for a Fortune 500 manufacturer, a Big 8 management consultant, and 26 years in the agency management systems arena. He may be contacted at Kenb@evolutionagencymanagement.com. u The Tennessee Insuror

Stephen Holmes, CIC, CISR sholmes@insurors.org 615.515.2609

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Financing Agency Growth? A Primer on Best Practices

written by Jim Rieniets, INSBANK President and CEO

At some point in time, many insurance agents will be faced with opportunities and challenges that center around funding an agency acquisition, financing a succession plan, or buying out a partner. Often times in these situations, it is easy to become enamored with “making a deal work.” Motives for growing an agency are very understandable and tempting, but doing so must be done in a manner that does not impart too much risk for the agency and its principals.

Why Make an Acquisition?

The intuitive response to this question is: “To grow.” That makes sense in many cases, where synergies and economies of scale can improve operating ratios, diversify portfolio exposures, or provide new revenue streams. For many smaller agencies an acquisition might manifest in access to more insurance markets. But determining that a particular acquisition is a good strategy is just the first step in the process. Determining value is the next step, and can be one of the more difficult tasks. There is no simple formula in the agency world, as not all agencies are made alike and circumstances vary. It is highly recommended that agency principals engage a thirdparty expert to advise them in this process. A consultant will not ultimately make the decision, but he/she can provide expertise on current valuation trends, methods of determining value, and identifying any deal-specific considerations. One factor to consider is that at any given moment, a competing buyer may be willing to pay more for an agency than what others can afford, for various reasons. It is also true that the greater fool theory can come into play. Buyer beware!

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Evaluating Risk Once a general range of value is determined, then the process of evaluating risk is required. Quantitative risk elements include: • • •

Portfolio revenue diversification Carrier concentrations Loss ratios and other data

One of the greatest risks with any agency transition is personnel, to the extent that any material level of revenue is controlled by an agent(s) that is not part of the ownership structure. In these situations it may be necessary to incorporate compensation agreements to minimize this risk. Other examples of conditions that could impact a risk assessment would be the market-specific economic situation or new competitors coming to the subject market. Risk has a direct correlation with the price of any asset such that relatively higher risk to revenues reduces value, other things being equal. Con-

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versely, if a risk assessment demonstrates relatively minimal risks to on-going revenues then a premium price for a portfolio may be justified.

Funding an Acquisition In theory a purchase can be funded entirely from equity or entirely from debt or, more commonly, from some combination of the two. Bank lenders generally like to see total debt not exceed 80%, inclusive of some form of seller financing.

In my experience lending to insurance entities, I consider the use of some form of seller financing to be a critical success factor for the acquirer. In any transition, buyers want the seller to be motivated to see continued success. Incorporating an “earn-out” as part of the total purchase price is a good way to ensure alignment of the parties.

less consent is provided by the lender.

As for the partners in the agency, they will likely be required to personally guarantee the loan, in whole or in some prorated fashion. It goes without saying that lenders like to see individuals with good credit histories, some cash savings or other liquid assets, as well as manageable amounts of personal debt.

In summary, while the process of acquisition and finance may be complicated, borrowers should try to approach a transaction with a one-word test: reasonableness. Is the price reasonable? Is the risk reasonable? Are the loan terms reasonable? If an agency owner can feel good about the answers to these three questions, then they may have an opportunity to make a difference in the future of their agency.

What Does a Lender Look For?

About the Author

Borrowers and lenders need to have similar perspectives on a transaction. Lenders like to see good portfolio diversification, loss ratios within industry norms, quality carrier representation, quality agency procedures, etc. Generally speaking underwriting requirements call for debt service coverage of 1.25, so that there is a cash flow cushion. Bankers also typically require a loan agreement that restricts a borrower from taking on additional debts of a significant amount, a change in ownership, or distributing assets out of the company un-

Jim Rieniets serves as President and CEO of INSBANK, which requires him to manage the day to day activities of the bank. He also serves as a director of INSBANK and on the Loan and Investment Committees, as well as being the Chief Manager of the bank’s subsidiary, Finworth Mortgage, LLC. Jim has an extensive banking career and leadership background and formerly served on the Credit Committee of the Tennessee Bankers Association. He may be contacted at jrieniets@insbanktn.com u

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Daniel Learns About Insurance: Chrome, Classics and Coverages The Surging Collector Car Market is Ready to Be Covered

Insurors Director of Communications Daniel Smith is far from an insurance expert, but he is trying to learn! In this series he will look into insurance industry and coverage questions he has about popular trends in day-to-day life.

The world of collector cars is booming. You may have seen the recent story about comedian Jerry Seinfeld selling off seventeen of his classic cars at auction for a total of $22,244,500. At the same auction, a 1961 Ferrari 250 GT SWB California Spider was sold for $17 million. That’s right, one car – 17 million dollars.1 And while that is an astonishing number, it speaks to the overall trend of collector cars that is taking place right now.

The auction where these cars were sold took place at the Amelia Island Concours d’Elegance, a classic car show that places some of the most sought after collectible automobiles in the world on display across the resort’s pristine golf course lawn.

My father, a longtime car aficionado himself, and I attended the Concours d’Elegance a few years ago. We saw some of the most impressive vehicles I’ve ever seen displayed, and met some people who really knew a lot about them.

One of those people was McKeel Hagerty, the president and CEO of Hagerty Insurance Agency. McKeel is very friendly, and very knowledgable about the world of collector cars and insurance. He recently discussed the surge in classic car sales – specifically the American “muscle cars” from the ‘70s and ‘80s, in an article for USA Today.2 “They are driving the low and mid-market now,” he said. “Good, solid muscle cars are sell-

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written by Daniel Smith

ing at rational prices that are determined by the rarity of the vehicle. Prices for cars from the ‘70s, ‘80s and ‘90s are showing the most growth.”

Part of the reason for that interest is the influx of collectors from Generation X who now are achieving the financial capability to purchase these autos. “Generation X is finally coming into some money,” Hagerty said. They’re interested in cars that were relevant to their youth.”

Collector Cars and the Insurance Industry With more and more investors interested in the classic car segment, the insurance niche for classic autos is also on the upswing. Hagerty, Chubb, Grundy and J.C. Taylor are some of the most well-known players in this segment, which was “invented” by James A. Grundy in 1947. Grundy’s father-in-law, Sam Bailey, had agreed to let him insure his factory, but there was one stipulation: he needed to cover the antique cars Bailey had begun collecting. To achieve this, Grundy developed policy language for antique autos that kept cost low but insured the auto at its full value. He also added liability protection for multiple cars, but only charged for one. His reasoning behind this was simple – you can only drive one of your cars at a time.3 Flash forward seventy years and you will find roughly 5-6 million “collector cars” in the marketplace. Values for these cars range from the hundreds to around $30 million. The Antique

image credit The Drive article by Brett Berk via

http://www.thedrive.com/article/2153/is-thisThe Tennessee Insuror

ferrari-250-gt-swb-california-spider-the-mostitalian-car-ever

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Chubb is the marketing name used to refer to subsidiaries of Chubb Limited providing insurance and related services. For a list of these subsidiaries, please visit our website at www.new.chubb.com. Actual coverage is subject to the language of the policies issued. Chubb, PO Box 1600, Whitehouse Station, NJ 08889-1600.

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15

Automobile Club of America defines classic cars as “‘fine’ or ‘unusual’ vehicles, foreign or domestic, that are between 25 and 50 years old. Anything over 50 years old is defined as “antique.”

Value and Coverage The value of the classic and antique car market as a whole is hard to pinpoint, but it numbers well into the billions of dollars. If you are looking for opportunities to insure collector cars, here are a few things to keep in mind:

800-226-3224 www.fcci-group.com

Is it classic, antique or neither? Different carriers have different restrictions and qualifications for these standards.

Is the car going to be driven? Garaged? How the car is used, how frequently, and how it is stored are big factors in determining coverage. The only constant is that the car cannot be your insured’s “daily driver.” Most policies will require the car to be stored in a private residential garage or specified storage facility.

Driver infractions still matter. Excessive speed violations, alcohol-related offenses and reckless driving can still effect eligibility for policyholders, even if the cars are not frequently driven.

Proper valuation. Determining the proper value of a claissc car is key for insurance purposes. Most classic car insurers have their own valuation systems, but you can also check trusted resources like NADA Guides and Hemmings.

Additional coverages. There are many endorsements available for classic car owners, including construction or restoration endorsements, parts & equipment endorsements and more. Different limits of liability and uninsured motorist coverages are also important to review.

The owners of these vehicles often care deeply about their classics and want the best for them, including their insurance.

If you need market access for collector cars, don’t forget the Chubb Collector Car Program available to all Insurors members through Big “I” Markets.

1-Per “An Interview With David Gooding, the Man Who Sold $20M Worth of Seinfeld’s Collectibles” via http://www.thedrive.com/article/2564/an-interview-with-david-gooding-the-man-who-sold-20m-worth-of-seinfeldscollectibles 2-Per “Muscle cars lead resurgence in classic car prices” via http://www. usatoday.com/story/money/cars/2016/02/21/muscle-cars-lead-resurgenceclassic-car-prices/80640914/ 3-Per Gundy Insurance History at http://www.grundy.com/about/history. aspx

About the Author

PERSONAL SERVICE. EXCEPTIONAL PARTNERSHIP. “At FCCI, we are here for our agents and our insureds for the long term, and we live by our values: loyalty, integrity, vision, excellence and service.

I’m proud to work for a company that believes in ‘doing what we say we’ll do’ and I strive to do that for my agents and their clients.”

Babs Fowler Underwriting Specialist FCCI Insurance Group Gulf Coast Region Ridgeland, Miss.

Now, let’s talk about your business.

General liability • Auto • Property Crime • Workers’ compensation Umbrella • Inland marine Agribusiness • Surety Coverage available in 18 states. © 2016 FCCI

Daniel Smith serves as the Director of Communications for Insurors of Tennessee. He has a Bachelors degree in Marketing with a minor in Graphic Design from the University of Tennessee at Chattanooga.

He may be contacted at dsmith@insurors.org. u 16 TI16_Fowler_3.625x10.indd 1

The Tennessee Insuror

2/16/16 10:42 AM

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17

Future Leaders Spotlight

presented by

Matt Swallows, CIC, CRM • Swallows-Newman Ins. Agency - Cookeville Matt Swallows is a Cookeville native who earned a degree in Finance from Tennessee Tech University and started his insurance career with Aetna in 1999. In 2001 he started with his family’s agency at Swallows Insurance. He now serves on the Insurors Board of Directors as a Director of Region II. In addition to his work with Insurors, Matt served as the Mayor of Cookeville from 2010-14, and has served on the Cookeville Regional Medical Center Board of Directors. He currently serves as the Chairman of the Cookeville/Putnam County Sports Council and the Cookeville/Putnam County Chamber. He is married to Kelly Swallows, who also works in the agency in commercial lines, and they have two children, Channing who is five and Xavier who is three.

Matt Swallows of SwallowsNewman

The Insuror: Can you tell us a little about your current job title and responsibilities?

Matt: I guess you could say my official title is Vice President, but as most know being in a small, family-owned business titles mean very little. Just like everyone else in the organization, I have to pitch in and do whatever is required. From sales to management to service, I touch a little of everything. I even answer the phone if I am near the front desk and it’s ringing.

The Insuror: What can you tell us about your educational background?

Matt: I graduated with a degree in finance from Tennessee Tech in Cookeville. That is my “background” – but my education is a continual thing. I acquired my CIC designation in 2007 and my CRM designation in 2010. I may get started on my CPCU this year. We are big proponents of continuing education and professional designations in the agency, and almost half of our staff have their CIC designations with four currently pursuing their CIC.

The Insuror: How and why did you get your career in the insurance industry started?

Matt: I grew up in the industry, and my grandfather, Elmo Swallows, started our agency in 1956. Watching he and my 18

father, Mike Swallows, really got me interested in the business.

I always enjoyed the relationship side of the business and helping people. Back in the day, the agency’s company representatives were truly friends of the family. They would come to my ballgames and sometimes even come to the house for dinner and I loved that. I also can’t tell you how many times as a kid we would get a call at dinner or even in the middle of the night because of a wreck or a fire. Many times I would go with my father to check on the client. I always remember the look on the customers faces – just because we were there in a very tragic time in their life – it was a very powerful thing to see at a young age. The impact you could have for someone in such a time of need was a wonderful thing to see and participate in.

The Insuror: Do you have any influences/role models in the industry?

Matt: That one is easy, my father, Mike, and my grandfather, Elmo. My grandfather used to always tell me as a kid how the insurance industry was “recession proof” and that whatever I chose to do for a living make sure it was “recession proof” too.

And my father always said, “If you love what you do you will never work a day in your life”. Both of those thing stuck with me and I love what I do!

The Insuror: Is there any advice you could offer Young Agents or others in the industry to achieve success?

Matt: First, I would say that this is a phenomenal industry and if you get started in it you should stick with it. But a couple of pieces of advice would be; find a mentor when you first get started, preferably someone in the industry but even if it’s not find a local businessman that you respect and look up to.

Then, become friends with them, take them to lunch and ask them questions, pick their brain. I was very fortunate and had my father to look up to. Not only is he my dad – he is also the smartest businessman I have ever been around.

Second, really focus on the continuing education the industry has to offer, from sales courses to professional designations.

You should never really stop learning because that is the easiest way to set yourself apart.

The Insuror: As an independent agent, you have many partners in this industry, including carriers, MGAs and many more. How do you determine which ones are the right relationships?

The Tennessee Insuror

Matt: The last word of that question is exactly what we are looking for. Who can we have a true relationship with?

Someone that views us as true partners not just the next agent down the street. A lot of companies these days try to be so black and white with every decision and relationship, “you guys don’t fit this model” or “this risk doesn’t fit that model.”

To us everything in this industry isn’t black and white, there is a lot of gray, and we look for the companies that can live in the gray with us. That’s where the real world happens.

The Insuror: You formerly served as Mayor of Cookeville. What led you to seek office and how has that impacted your insurance career?

Matt: I am old fashioned when it comes to serving your community, meaning I believe everyone should do so in some capacity. I was never in the military so I chose to run for local office to serve my community. My grandfather and great grandfather were always involved in politics so I guess some of it rubbed off on me. Serving as Mayor of Cookeville was one of the great joys of my adult life. I actually got to serve as Mayor when both of my kids were born, something that is very special to me! I never knew how much I would learn and love that position. Dealing with the public from a position like that really opens your eyes and teaches you many things a book never could. I grew more as a person and businessman from that experience then I ever thought I could.

The Insuror: Thank you for giving us your time, Matt, we appreciate it and wish you continued success in your career.

Matt: Thank you so much, I enjoyed it! And thank you to the Insurors for watching out for our industry and providing all the services that you guys do! u

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Upcoming Events and Information Berkley Southeast Insurance Group is a member company of W. R. Berkley Corporation, whose insurance company subsidiaries are rated A+ (Superior)

by A.M.Best.

The Young Agents Committee held their first event of 2016 during this year’s Agency Growth Conference on March 9th.

The event was a reception was held in Murfreesboro, and we had over 40 attendees on hand. The committee has begun finalizing dates for as many as six more local receptions throughout this year, and we should have all the dates and locations out soon.

Products and services are provided by one or more insurance company subsidiaries of W. R. Berkley Corporation. Not all products and services are available in every jurisdiction, and the precise coverage afforded by any insurer is subject to the actual terms and conditions of the policies as issued. ©2016 Berkley Southeast Insurance Group. All rights reserved.

berkleysig.com

If you are interested in providing suggestions and/or participating in events, please e-mail Daniel Smith at dsmith@ insurors.org or call 615.515.2601. You can also visit our website at http://insurors.org/what-we-do/young-agents/ The Tennessee Insuror

19

for updates and articles tailored for young professionals.

The following is the current schedule of events for Young Agents in 2016. Please mark your calendars and join us for these great opportunities to network and grow in the insurance industry.

April 14 - Memphis Young Agents Reception Schweinehaus • 5-7 pm CST • Memphis April 28 - Nashville Young Agents Reception Urban Grub • 5-7 pm CST • Nashville May 19 - Chattanooga Young Agents Reception Southside Social • 5-7 pm EST • Chattanooga June TBD - Knoxville Young Agents Reception Location TBD • 5-7 pm EST • Knoxville June TBD - Tri-Cities Young Agents Reception Location TBD • 5-7 pm EST • Johnson City October 30 - Convention Young Agents After Party Location TBD • 8-11 pm CST • Nashville

Young Agents Committee Brent Chance - Chair Principal Agent/Owner Ivy Insurance Brentwood bchance@ivy-insurance.com Stuart Oakes, CRIS - Immediate Past Chair Producer/Construction Division TIS Insurance Services Knoxville sfoakes@tisins.com Tim Treadwell V - Region I Account Executive Boyle Insurance Agency Memphis timt@boyle.com Alan Sisk, AU, AINS - Region II Producer Geny Insurance Nashville alan@genyinsurance.com David Allen, CIC, CRM - Region III Principal Agent RSS Insurance Chattanooga dallen@rssins.com For more information, please e-mail dsmith@insurors.org. u

INTRODUCING

Exceptional Agents Berkley Southeast Insurance Group recognizes the need to mentor the growth of new talent and to perpetuate the Independent Agency System, as well as provide young agents with a competitive advantage. Tennessee’s Young Agents are the future of our business. That’s why we are working together for success.

Congratulations Exceptional Agents 2016 Aaron Jensen Adam Reeves Andrew Powers Blake Dickens Brandon Patterson Chad Richardson Charlie Taylor Clement Ledbetter Cooper Permenter David Allen David Clark David Evans Gabe Mudd Jamie Williams Jared Smith Jason Stiltner Jason Teague Jeremy Stiltner John Brock John Fritts Josh Witt KC Covington Kevin Lockmiller Kevin Ownby Matt Spellings Michael Greer Michael Novarese Mike Thomas Neil Scott Paul Steele Preston Martin Ramsey Brock Robert Harris Stacy Woodard Stuart Oakes Taylor Ragan Taylor Walker Tim Treadwell Trey Powell Will Webb

Shafer Insurance Agency, Knoxville Union City Insurance Agency, Union City Burke, Powers, and Harty Insurance, Bristol Harris, Madden and Powell, Memphis Ownby Insurance Services, Sevierville Swallows-Newman Insurance, Cookeville Burke, Powers, and Harty Insurance, Bristol Battle Page Insurance, Franklin Harris, Madden and Powell, Memphis RSS Insurance, Chattanooga RSS Insurance, Chattanooga The Insurance, Group, Inc., Knoxville Allison Insurance Group, Jackson Hardin County Bank Ins. Agcy., Savannah TIS Insurance Services, Knoxville Heritage Insurance, Kingsport Watauga Insurance, Johnson City Heritage Insurance, Kingsport Brock Insurance, Chattanooga TIS Insurance Services, Knoxville The Insurance Group, Inc., Knoxville Carroll Insurance Agency McKenzie V.R. Williams & Company, Winchester Ownby Insurance Services, Sevierville Consolidated Insurance Agency, Paris V.R. Williams & Company, Winchester McDaniel-Whitley, Inc Insurance, Inc., Nashville Insurity Group, Chattanooga Martin & Zerfoss Insurance, Nashville Union City Insurance Agency, Union City Brock Insurance, Chattanooga Tigrett & Pennington, Nashville Shafer Insurance Agency, Knoxville TIS Insurance Services, Knoxville Martin & Zerfoss Insurance, Nashville Thompson & Smith Insuance, Jackson Boyle Insurance, Memphis RSS Insurance, Chattanooga Battle Page Insurance, Franklin

berkleysig.com local people helping agents professionally serve clients 031016

20

The Tennessee Insuror

From Your President

You’re Never Too Big or Too Small for Insurors

One of the questions I am frequently asked is, “Now that you are part of Gallagher you don’t need Insurors, right?” Many people assume that larger agencies/brokers do not need the services of a trade association like Insurors. My answer to these people is a resounding “Yes, we absolutely do need Insurors!” There are several very good reasons why this Association is important to everybody who is involved in insurance in this state.

The recent conversations we’ve had with Middle Tennessee State University as to how we can work together to train insurance professionals is also exciting. We all know we need more good young people to fill the voids we will have in our aging industry. This is a great way to get more young people excited about the insurance industry and to steer them to our agencies. I look forward to see what develops with this new initiative.

Government Affairs

Information

We all need Insurors in our corner for legislative issues. While some large brokers do have some presence on the national legislative level, I don’t know many who get involved at the state level. This is where we live and work and we need someone looking out for our interests right here. Chuck and Ashley do a great job of listening to us and fighting for our issues on The Hill. Because of their good work over the years, we do not have a “professional privilege tax” levied on each licensed agent. They have also worked on sinkhole coverage, uninsured motorist for auto, and fighting opt-out for workers’ compensation just to name a few.

Have you ever had a question and did not know where to get the answer? I know we can Google most anything, but that does not always give me the answer I need. When I have questions, I e-mail Insurors or the Virtual University and I get answers from experts in our industry very quickly. I use this service a lot and find it to be very helpful.

They have an excellent reputation and have great relationships with legislators and officials at the Department of Insurance. Having such influential representation is huge and that alone is worth the cost of our dues.

Continuing Education We also need Insurors for quality education.

Although there are some other insurance courses offered through companies, agencies and other vendors, Insurors offers a broad array of educational courses from CIC to courses on ethics, flood, E&O and current topics of the day.

They can be counted on to provide good quality instructors and they file for the continuing education credits a lot of us need. The Agency Growth Conference, although still a relatively new event, is a great place for agents to get some industry education on a variety of issues over a quick two-day span.

The Tennessee Insuror

Networking Last but not least are the tremendous networking opportunities within Insurors. Serving on committees, attending seminars, conventions, etc. all lend themselves to meeting and working with your peers in the industry. This has been so beneficial to me over the years, especially in my first years as an agent. I found that other agents were so willing to help me and that made a huge difference in my career. I also met a lot of company people I might not have met otherwise and this has led to some very beneficial carrier partnerships.

“Not all of us need ever y thing Insurors has to offer, but we all need something.”

I have also made some great friends in the process and would not take anything for these friendships across the state.

So, regardless of your size, do not let anyone tell you that you don’t need Insurors! Not all of us need everything that Insurors has to offer, but all of us need something. From markets to state laws; from continuing education credits to professional answers to your questions, this association has plenty to offer to agencies of all sizes! u

Christie Reeves, CIC, CPCU, CPIW 21

Meeting my customers where they work.

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The Tennessee Insuror

From Your IIABA National Director The New Kid in Town With my first meeting as the Tennessee National Director (ND) firmly in the rearview mirror here are a few of my thoughts, in reflection.

First, everyone wanted to know if I was the “new” Brad Smith. While I assured them I was no Brad Smith, I stressed that I was going to do everything in my power to live up to the level of professionalism and expectation of the commitment that Brad had for the both the National IIABA and the state Association, Insurors of Tennessee. I quickly learned that Tennessee’s past NDs – Brad Smith, Davis Porch, John Pitts, Arch Northington and others – have left a lasting impression on folks across this great country of ours.

I was also appreciative of Chuck Bidek and the other NDs who took the time to give me insight and understanding of issues that were on the table. Chuck was quick with a text message during a discussion to “fill me in.” And others were readily available during breaks to give additional background information that was beneficial in the discussions.

In the ND meeting itself, the “horseshoe” – as the IIABA board meeting room set up is referred to – is an impressive gathering of caring and thoughtful insurance agents and brokers who are committed to help maintain and improve the state of our national association. Several of the topics of note brought spirited discussion amongst the “horseshoe.” The following were the most “discussed” items on the agenda:

What/who is an independent insurance agency today?

This seems like a pretty straightforward question with an easy answer, but let’s looks at what is happening with Nationwide lately. Are the Nationwide agents who are now allowed to contract with independent carriers for commercial lines but maintain their direct contract for personal lines now considered independent agents?

Federal Government Affairs Issues Another hot topic was governmental affairs and everything that goes along with it, from the AfThe Tennessee Insuror

fordable Care Act, and how we maintain servicing clients in the face of reducing commission on healthcare, to revising once again the National Flood Insurance Program (didn’t we just do this?).

The National PAC and Elections Insurpac National passed the $1,000,000 mark again last year, and it continues to be of great importance to our Association. The PAC discussion led to election talk, which of course led to the most heated discussion – who was going to be our next President and what does that mean for not only our country but our industry.

The above is just a small sampling of the items covered during the board meeting. Being the “new” Brad Smith, I learned quickly that you have to pay attention as sometimes the pace is extremely quick, but everyone is very willing to take the time during breaks to provide the back ground on the topics previously discussed, which was greatly appreciated.

With regards to the National PAC, Brad has set a very high bar for me to follow. Under his leadership, Tennessee has met or exceeded its goal for the National PAC each of the past several years.

This year, we will be calling on each of you to continue to contribute at the same or at higher levels than you have recently given, not only for the National PAC but also for our State PAC. Whether you like it or not, money is the grease that makes the wheels turn in Washington D.C. and Nashville. And in order for our industry to survive and prosper we have to have a strong voice on Capitol Hill. So please make a commitment to increase your PAC giving by 10% this year. We need your help!

Our Association has been represented extremely well over the past years, with dedicated individuals who have added great insight and who will always be highly respected by their peers on a national scene. I will work very hard to maintain that same level of dedication to both our state and national Associations. It is my extreme pleasure to represent Insurors at the national level. If I can be of service to you please do not hesitate to call. u

“Whether you like it or not, money is the greas e that makes the wheels turn in Washington, D.C. and Nashville.”

Lou Moran III 23

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The Tennessee Insuror

From Your CEO

All for One, and One for All?

You would be surprised at the calls and e-mails we receive from agencies and companies who claim to be members seeking information. Just recently, one of our staff members received a call at 3:40 pm asking for a clarification of a state law. The staffer responded the next morning via e-mail. He e-mailed the staffer with a second request at 8:20 am. He then informed me by voicemail at 8:45 am that my staff member had failed to respond. We suggested he read his e-mail.

None of this would be an issue if he was a member! Turns out he was a company representative whose company has never joined as an Associate Member. Never to miss an opportunity, I left him a message to call me about joining. It remains to be seen if I ever hear from him again.

I received another call, this time from an agent who needed licensing information. I asked if he was a member, and he said he “thought he was.” I informed him that our records showed that he had not been a member since 2008. But never fear, he was “thinking” about rejoining! I had our field representative, Don Cunningham try to make contact. He did not receive a response back.

These two recent examples are more common than we’d like, but they demonstrate our value to the entire insurance community. So much of what we do effects everyone in our industry whether they’re a member or not.

Protecting the Interests of All Agents When the licensing law regarding grandfathering agents for CE was changed, the position of the Department (based on an National Association of Insurance Commissioners [NAIC] model) was to eliminate existing grandfathered agents.

We negotiated leaving the grandfathered agents alone and they subsequently eliminated grandfathering the future. Frankly, I would have preferred to have this apply to only our members, but the State Constitution would have stood in the way.

Just this year we have been working with the The Tennessee Insuror

Department on modernizing Surplus Lines procedures. The discussions are based on what constitutes a diligent search for an admitted market prior to using surplus lines. The practice of finding three companies to turn a risk down is not in statute nor a rule, but it is relied upon as the “due diligence” test. But what about when you are faced with a scenario of not even finding three companies that write a particular risk? We don’t have all the answers yet, but I can report that we are diligently working on it and are making progress.

Now we will be facing a similar challenge regarding cyber liability for both companies and agents. This is another NAIC model bill will likely be brought before the legislature next year. As written, the draft bill would require you to have a plan to prevent cyber attacks and a monitoring system with a designated administrator.

This requirement applies even to the smallest agency or company. Talk about government intervention in small business!

We began opposing workers’ compensation Opt-Out legislation in August 2014 and we remain in that position today. Before the companies and other stakeholders even noticed it or believed it was a real threat, we were hard at work on its defeat. This has been at substantial cost from our operating budget and our PAC funds, which are resources funded by our members.

“...ever y day for us is an on ‘The Hill’ day.”

Our efforts at the Capitol cost us time and treasure. I like to say that we don’t have an “On The Hill Day,” because every day for us is an on “The Hill” day.

I know that some of our efforts benefit members and non-members alike, but we can’t let that get in way of the mission of the Association – to support independent agents in Tennessee.

The late, John Pitts, Sr., an Insurors Past President and 1979/80 Insuror of the Year, once said, “Everybody is a member of Insurors, but only the good ones pay.” I do find that to be true, but it won’t stop us from protecting the interests of all agents. u

Chuck Bidek, CPCU 25

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26

The Tennessee Insuror

Education Calendar

2016 CONTINUING EDUCATION SCHEDULE

Nashville 3/2-4

CIC

Agency Management

4/13

CISR

Personal Auto

5/4-6 CIC

Commercial Property

7/28-29 CIC

Ruble Graduate Seminar*

8/9

CISR

Commercial Casualty II

8/16-19 CRM

Analysis of Risk

9/14-16 CIC

Life & Health

11/9-11 CIC

Commercial Casualty

12/1

CISR

MEMPHIS 4/6-8 4/14 6/15 8/10

onal Lines CIC Pers erty mercial Prop CISR Com Health II CISR Life & cial Casualty CISR Commer

The Insurors of Tennessee offers education opportunities to member agents across a wide range of insurance specialities that satisfy individuals at many different experience levels.

If you are looking to further your career, seeking a professional designation, or need to satisfy continuing education requirements, check out the variety of courses available.

Elements of Risk

CIT Y JOHNSON LINES -PERSONAL IAL 3/8 CISR -COMMERC 7/21 CISR Y II CASUALT

2016

Registration is fast and easy at www.insurors.org. More information about each class can also be found online.

Chattanooga

4-12 CISR Personal Auto 10-5 CISR Personal Residential KNOXVILLE

MARCH 9th CISR PERSONAL LINES JULY 20th CISR COMMERCIAL CASUALT YI OCTOBER 4th CISR PERSONAL RESIDEN TIAL register ONLiNe NOW at wwW.iNsurors.org or *wwW.scic.cOm CALL Laura thrOwER at 615.515. 2607 fOR MORE INfO OR E-MaIL LthrOwER@INSurORS.ORg

CISR

4/12 Personal Auto 4/13 Personal Auto 4/14 Commercial Property 6/15 Life & Health

7/13 Commercial Casualty I 7/14 Commercial Casualty I 8/9 Commercial Casualty II 8/10 Commercial Casualty II 10/4 Personal Residential 10/5 Commercial Casualty I 12/1 Elements of Risk

CIC

Fee: $186

CE: 7

Chattanooga Nashville Memphis Memphis Knoxville Johnson City Nashville Memphis Knoxville Chattanooga Nashville

Fee: $424 (Ruble $430)

CE: 24 (Ruble 16)

Memphis Nashville Nashville Nashville Nashville

The National Alliance for Insurance Education & Research is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE credit. Complaints regarding registered sponsors may be addressed to the National Registry of CPE Sponsors, 150 Fourth Avenue North, Suite 700, Nashville, TN, 37219-2417. Website: www.nasba. org. Advanced Curriculum Rating = 20 CPE Credits. For more information regarding administrative policies such as complaint and refund, please contact our offices at 800-633-2165.

ABEN Webcasts (insurors.aben.tv) E&O - Agency/Carrier Relationships E&O - Role of Agency Defenses D&O Liability Insurance Hot Topics in Personal Lines Business Income-Beyond the Basics Certificates of Insurance & Bus. Auto

CE: 3 $48 CE: 3 $48 CE: 2 $48 CE: 2 $48 CE: 3 $72 CE: 2 $48

Fee: $430

8/16-19 Analysis of Risk*

Risk Seminars

Nashville

Fee: $430

10/13-14 Advanced Risk Management*

Memphis

Online Courses (www.iiaba.net/vu) Available from IIABA Virtual University. Member pricing shown.

Ethics for Insurance Professionals How to Calc. Business Income in 5 Min. National Flood Insurance Program New Employee Training Course

4/6-8 Personal Lines Institute 5/4-6 Commercial Property Institute 7/28-29 Ruble Graduate Seminar 9/14-16 Life & Health Institute 11/9-11 Commercial Casualty Institute

4/7 4/19 4/19 4/19 4/20 4/20

CRM

CE: 3 CE: 3 CE: 6 CE: 9

$75 $50 $80 $100

*check VU site for current information on CE and pricing

Available from The National Alliance

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Legal & Ethical Requirments of Insurance CE: 4 Insuring Flood Exposures - NFIP Review CE: 4 Available from The Institutes

$75 $75

(insurors.ceu.com)

Insurance Principles and Policies CE: 7 Long Term Care CE: 24 Workers’ Compensation CE: 10 Employee Benefits for Small Companies CE: 4 Healthcare Reform and Affordable Care CE: 5 e-Coverage CE: 15 Fundamentals of Personal Auto Insurance CE: 3 Management Process for Ins. Professionals CE: 21 Intro to Flexible Spending Accounts CE: 4 Terrorism and Its Impact on Insurance CE: 4 Toxic Mold and Homeowners Insurance CE: 15 Understanding the Industry of Insurance CE: 5

$49 $99 $59 $39 $49 $79 $29 $89 $39 $39 $79 $39

Register Online at www.insurors.org

Indicates course is presented by The National Alliance. Register for these courses at www.thenationalalliance.com The Tennessee Insuror

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The Tennessee Insuror

keller.chapman@meadowbrook.com | 615.514.5562 | insurors.org/products-programs/preferred-comp/

Government and Legal Affairs The Agent’s Standard of Care

Written by Ashley N. Gold, JD, Insurors General Counsel In March, Insurors held its 3rd Annual Agency Growth Conference in Murfreesboro. As a part of the education component, Richard Lund, J.D. Senior Underwriter, Westport Insurance Corp., Steven Keyt, Leitner, Williams, Dooley, Napolitan PLLC, defense counsel, and I presented a 6 hour E&O Fundamentals class to attendees. One of the areas we spent significant time discussing was the Standard of Care in Tennessee and elements relating to that standard.

As a refresher, the general, basic standard of care in Tennessee is that an insurance agent who undertakes to procure insurance for another and unjustifiably, through fault or negligence, fails to do so will be held liable for any damages resulting therefrom. A failure to procure claim may be based on either negligence or breach of contract. Basically the courts look at what a reasonable agent in the same situation would do and then compare the actions of the agent in question to determine whether that duty has been breached.

$1,000,000 benefit based upon a misrepresentation with regard to that question. The widow testified her husband would have provided correct information if asked, and that he had signed the application completed by the agent without reading it. The trial court held the agent had breached the contract by failing to procure an enforceable life insurance policy and the holding was sustained by the Court of Appeals and the Supreme Court of Tennessee.

Special Relationship An agent’s duty can be expanded if the court finds that a special relationship exists between the agent and the client. In Magnavox Company of Tennessee v.

Boles & Hite Construction Company, 585 S.W.2d 622 (Tenn. App. 1979), Gulf Insurance Company denied coverage to Boles & Hite based on a contractual liability exclusion. The agent was familiar with Boles & Hite’s operations, including the existence and contents of contracts with Magnavox, and undertook to provide complete liability coverage. The court held that because of this knowledge, the agency had a duty to ascertain the required coverages and should have either secured coverage for contractual liability or called the exposure to the attention of the customer.

Additional Case Law In another case, the agent created an expanded duty by promising more than he could deliver. The plaintiff owned and operated a marina, and asked the insur-

Several years ago, the Supreme Court of Tennessee, in Morrison v. Allen, 338 S.W.3d 417, 426 (Tenn. 2011), discussed a failure to procure claim based upon breach of contract.

The Court set forth the following criteria in determining whether an agent failed to procure the insurance: 1. An undertaking or agreement by the agent or broker to procure insurance; 2. The agent’s or broker’s failure to use reasonable diligence in attempting to place the insurance and failure to notify the client promptly of any such failure; and 3. That the agent’s or broker’s actions warranted the client’s assumption that he or she was properly insured.

The Morrison case involved a life insurance policy that was issued based upon a signed application indicating the insured had never been convicted of driving under the influence. The carrier denied the payment of the The Tennessee Insuror

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ance agent to procure “all-risk” insurance for the marina. The initial “all-risk” policy included ice and snow damage. Upon expiration of the “all-risk” policy, the agent was unable to find like coverage and instead purchased insurance covering only “named perils.” The agent did not disclose that ice and snow coverage was excluded. When there was a claim, the insurance carrier declined coverage, and the marina owner sued the agent alleging that he was negligent for failing to disclose that the new policy did not cover ice and snow damage. The agency was held liable on a negligence theory for failing to obtain a replacement policy with the same coverage or notify the customer if it was impossible to do so. Wood v. Newman, Hayes & Dixon Insurance Agency, 905 S.W.2d 559 (Tenn. 1995).

Duty to Insured to Prevent Lapse of Policy Last but not least, we spent time on our favorite E&O warning “Do Not Notify your Client of a Notice of Non-Payment” unless you are going to do it for everyone, all the time.

This case involved payment of a life insurance premium. The testimony established that the insurance company mails a “premium notice” 30 days before the premium due date, a “reminder” notice 20 days after the due date, and a “lapse notice” 53 days after the premium due date if premium is not received. Yarnell v. Transamerica Life Ins. Co., 447 Fed.Appx. 664 (6th Cir. 2011). Tennessee courts have consistently held that a duty to prevent an insurance policy from lapsing only arises where there is an express or implied agreement to maintain coverage on behalf of the insured. See Ezell v. Associates Capital Corp., 518 S.W.2d 232 (Tenn.1974) Finally, in Quintana, the plaintiffs purchased property insurance from defendants through an independent insurance agent. Quintana v. Tennessee Farmers Mutual Insurance Co., 774 S.W.2d 630 (Tenn.App.1989). After plaintiffs filed two claims due to their farm being burglarized on two different occasions, the insurance company decided to cancel the plaintiffs’ property insurance policy. The company sent plaintiffs and their insurance agent letters stating that the policy had been canceled; the insurance agent received his letter, but plaintiffs were on vacation in Texas when their letter arrived. The insurance agent did not attempt to contact them after receiving the notice, even though he was aware the plaintiffs were on vacation. After the insurance was cancelled, but before plaintiffs had returned from vacation, an arson fire destroyed the plaintiffs’ barn.

The Tennessee Court of Appeals entered judgment in favor of the agent, noting that, “[i]n the absence of an agreement creating continuing responsibilities, an insurance agent’s obligation to a client ends when the agent obtains the insurance for the client.” The court held that, even though the plaintiffs had a long business relationship with their insurance agent, and the agent knew the plaintiffs had recently left for a vacation in Texas, he “did not have a duty to try to contact the [plaintiffs] when he received his copies of the cancellation letters.”

These last cases show that even though it is difficult, it is bet32

ter in the long run to avoid contacting your insured when you receive a Notice of Non-Payment. You will avoid E&O exposure if you wait until after the policy cancels to contact your insured.

Take a look at the most recent claims data from Swiss Re. The following claim statistics are a summary of the most common claims between January 2010 through December 2015, and will give you an idea of some of the areas of concern for agencies: Breakdown by Type of Policy: • 16 notices involving Commercial Lines-Claims Made coverage • 88 notices involving Commercial Lines-Occurrence coverage • 19 notices involving Personal Lines-Claims Made coverage • 26 notices involving Personal Lines-Occurrence coverage Breakdown by Coverage Type (Top 5): • 31 notices related to commercial property coverage • 19 notices related to workers compensation coverage • 23 notices related to commercial general liability coverage • 21 notices related to homeowners coverage • 16 notices related to auto coverage Breakdown by Transaction Type (Top 4): • 19 notices related to a mid-term change • 23 notices related to new business- existing client • 17 notices related to new business- new client • 62 notices related to a renewal Breakdown by Process Step (Top 8): • 17 notices related to an application error • 14 notices related to a claims-related error • 11 notices related to a policy cancellation error • 14 notices related to a policy change error • 13 notices related to a policy interpretation error • 12 notices related to a policy issuance error • 19 notices related to a policy renewal error • 18 notices related to a recommendation error (type/limit of coverage) Breakdown by Agency Personnel Involved (Top 4): • 20 notices related to an alleged error by the agent/broker account manager • 19 notices related to an alleged error by the licensed CSR • 34 notices related to an alleged error by the owner/partner/sole proprietor • 72 notices related to an alleged error by the producer About the Author Ashley N. Gold has served as General Counsel of Insurors of Tennessee since 2007, and previously consulted for the Association on legal and government affairs matters. She received her undergrad degree from the University of Kentucky and her Juris Doctor from Samford University. She may be contacted at aarnold@ insurors.org or by calling her at 615.515.2606. u The Tennessee Insuror

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The Tennessee Insuror

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Association Update

Insurors Adds Weatherford to Staff

Insurors Young Agent chair Chip Hoover in the agency’s Murfreesboro office.

Insurors of Tennessee has announced the addition of Dakota Weatherford to the Association staff, where she will serve as Marketing & Research Associate. In her new position, Weatherford will promote membership and execute marketing campaigns across multiple platforms.

She will also assist with social media and member support projects, including the Association’s Young Agents program.

A native of Murfreesboro, Chip received his Bachelors of Arts in Political Science from Middle Tennessee State University.

He is a graduate of Leadership Middle Tennessee, past Board Chair for Main Street Murfreesboro, Inc., and the 2007 recipient of the Insurors Young Agent of Year award.

Chip and his family are members of St. Paul’s Episcopal Church.

Weatherford is a native of Mt. Juliet, Tennessee and a graduate of Tennessee Tech University with a bachelor’s degree in public relations. She joined Insurors from the Wilson County Mayor’s Office, where she was the special projects coordinator for the county. Prior to the Mayor’s Office, she served as the marketing and sales manager at the Wilson County Convention and Visitors Bureau; and the marketing director of the Lebanon/ Wilson County Chamber of Commerce. She is also a graduate of the Dale Carnegie Course and Leadership Wilson.

Hite Joins The Crichton Group The Crichton Group recently announced that it has hired industry veteran, Dan Hite, one of the region’s top business advisors, as commercial insurance advisor. At The Crichton Group, Hite will immediately bolster the company’s expertise and lines of services by focusing on commercial insurance and risk management. He is a former executive vice president at Brown & Brown of Tennessee, Inc., where he spent the last 30 years working with healthcare, specialty general liability, construction and financial institutions.

Hite first began his career at Cooper, Love & Jackson. He is a former member of the Board of Directors for the Council of Insurance Agents & Brokers and The Hanover Regional Agents Advisory Council. He earned his bachelor’s degree from Birmingham-Southern College and obtained his master’s in business administration from Samford University. He also earned a J.D. from the Nashville School of Law. In addition, Hite is a member of The Hartford Insurance Broker Council and the Tennessee Bar Association.

J. Smith Lanier Promotes Hoover J. Smith Lanier & Co., one of the largest privately owned insurance brokers in the United States, has announced a promotion for Senior Vice President was awarded to past The Tennessee Insuror

Senior Vice President promotions are awarded based on achieving established sales goals in 2015, their expertise in the industry, overall performance, leadership and individual production efforts.

Berkley Southeast Names Its Agency and Young Agent of the Year Berkley Southeast Insurance Group recently announced its 2015 award winners for Agency and Young Agent of the year, and Frank E. Neal & Co. in Nashville and Cooper Permenter of HMP Insurance in Memphis were the proud winners recognized for these achievements.

Wink Neal of Frank E. Neal & Co.

First, Berkley Southeast recognized Frank E. Neal & Co. as the Tennessee Agency of the Year winner for 2015. Frank E. Neal & Co. principal agent Wink Neal accepted the award on the agency’s behalf from Berkley Southeast Regional Vice President Bill Emerick. The award recognizes the top Tennessee Independent Agency in the areas of profitability and growth.

Berkley Southeast also awarded their 2015 Young Agent of the Year Championship Belt to HMP Insurance producer Cooper Permenter. The award recognizes the top Tennessee Young Agent in profit and production.

Cooper Permenter receives his award for Young Agent of the Year from Bill Emerick and Andy Wilder

Cooper will be the proud new owner of this year’s Young Agent belt and receive his registration for the Insurors of Tennessee 2016 Convention in Nashville paid for by Berkley Southeast, a proud supporter of the Insurors of Tennessee and its members. continued on page 41 35

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The Tennessee Insuror

Broker Spotlight

Burns & Wilcox

Burns & Wilcox, North America’s leading privately held, family-owned, specialty insurance wholesaler, has long been committed to Tennessee, supporting the Nashville region for 28 years.

• • • •

In 2012, to meet the industry’s increased demand for specialty products and services, Burns & Wilcox established an office in downtown Nashville. Today, the Burns & Wilcox Nashville office, located at the American Center, is recognized for its industry expertise in commercial and professional liability, property, marine and personal insurance.

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Burns & Wilcox, a member of H.W. Kaufman Financial Group, was founded in 1969 by the late Herbert W. Kaufman. Today the entrepreneurial spirit of Burns & Wilcox continues to thrive under the direction of Mr. Kaufman’s son, Alan Jay Kaufman, the company’s Chairman, President and CEO. Burns & Wilcox now stretches to 50 offices throughout North America and includes more than 1,600 professionals.

Fueled by its freedom from Wall Street and private equity, Burns & Wilcox’s standards of service, depth of market relationships and outstanding talent are unsurpassed in the specialty insurance sector.

Speed, Access, Expertise 100% committed to helping brokers and agents grow, Burns & Wilcox facilitates that growth by consistently delivering fast turnaround times with vast global market relationships, expert advice and access to a wide range of domestic and international carriers.

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For more info call 615.251.1297 or visit burnsandwilcox.com. u

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Visit the E&O Risk Management website at www.independentagent.com/eohappens 37

“Exclusive member agencies, collaborating to bring the best insurance solutions to their clients.�

The Allison Insurance Group - Jackson Bagley & Bagley Insurance - Fayetteville Boyle Insurance Agency, Inc. - Memphis Burke, Powers & Harty - Bristol Carnal-Roberts Agency, Inc. - Lexington Cate-Russell Insurance, Inc. - Maryville Goss Insurance - Hixson Inter-Agency Insurance Services - Knoxville Martin & Zerfoss, Inc. - Nashville

McInturff, Milligan & Brooks - Greeneville Miller | Loughry | Beach Insurance Services - Murfreesboro Ownby Insurance Service, Inc. - Sevierville Smith-Berclair Insurance, Inc. - Memphis S.N. Anthony, Inc. - Ripley Tigrett & Pennington Inc. - Dyersburg V.R. Williams & Company - Winchester Watauga Insurance, Inc. - Johnson City

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The Tennessee Insuror

Company Spotlight

Rate Recovery Plan by Cornerstone National Cornerstone National Insurance (CNI), a Missouri-headquartered personal auto company is excited to be a 2016 Platinum sponsor of the Insurors of Tennessee 123rd Annual Convention.

Cornerstone National Insurance has been serving the independent agency network throughout the Midwest since 1997. Cornerstone expanded its Rate Recovery Plan to Tennessee during the fourth quarter of 2015.

Cornerstone National Insurance has been serving the independent agency network throughout the Midwest since 1997. Cornerstone expanded its Rate Recovery Plan to Tennessee during the fourth quarter of 2015.

The Cornerstone mission statement is, “Our Foundation is You.” As such they pride themselves on having a friendly and knowledgeable team that truly enjoys identifying increased efficiencies.

When working with Cornerstone, expect a carrier that is continually becoming one of the strongest partners in your agency.

The Rate Recovery Plan Cornerstone National Insurance is a preferred auto insurance carrier for nonpreferred drivers. The Rate Recovery Plan drives insureds back to where they want to be. Cornerstone accepts drivers without prior insurance or those with slight MVR issues by offering a monoline personal auto product that specializes in 25/50 or 50/100 limits. It offers a six to eight percent discount upon every six-month renewal for three years to drivers maintaining favorable payment and claim activity. These discounts are accompanied by the opportunity for insureds to regain their coverage tier to the preferred status of 100/300 limits at annual renewals via an endorsement process.

All Rate Recovery Plan Policies include roadside assistance, even those that are The Tennessee Insuror

liability only. With the Rate Recovery Plan, Cornerstone agents often see 75 to 80 percent retention levels.

More importantly, Cornerstone is renowned for unparalleled claims service. CNI is continually improving payment times by offering top technology like Snapsheet’s mobile app Speed Estimator. Should an insured have a claim and wish to use their smart phone to take photos of the vehicle damage, Cornerstone often makes the claim payment to the insured within 24 hours.

Get Started Today Cornerstone believes in offering strong reward programs to their agency partners. These incentives include profitability-based contingency bonuses that begin at $50,000 books of business and are accompanied by higher commission percentages. The commission levels begin at 15 percent on new business and at 12 percent on renewal. Cornerstone encourages growth by paying a tiered commission system. The tiers may grow as high as 18 percent on new business and 15 percent on renewal business once books of business reach the half million dollar threshold.

Recognizing that ease of doing business is key to attain these levels of growth; this is paired with ever developing technology. Cornerstone agents are greeted with a faster quoting and binding system – thanks to data prefill technology – paired with arguably the most supportive underwriting team in the industry. Agents interested in additional information or potential appointment should visit www. cornerstonenational.com for more info.

We look forward to helping you drive your insureds back to preferred status today! u

Tennessee Contacts Don Ellis, CPCU, CIC West TN VP Agency Relations DEllis@CornerstoneNational.com 501.400.3570 Central TN & Northern AL Sales Manager Interested Applicants may e-mail resume to the National Sales Dir. at Sidney.Neate@Cornerstone National.com Robert Ream East TN Sales Manager RReam@CornerstoneNational.com 864.884.1277 About Cornerstone National Ins. CEO: William Wheeler COO: Roger Walker National Sales Director: Sidney Neate Company Headquarters: Columbia, MO Founded: 1997 Agent Network: 800+ Company Website: www.CornerstoneNational.com Main Number: 573.817.2481 About Rate Recovery Plan Keep your insureds happy and improve renewal rates with our Rate Recovery Plan. Automatically decreasing rates paired with priority service for agents and insureds will drive your insureds back to preferred status while keeping it easy and profitable for your agency.

39

Bringing the Best Together IN TENNESSEE Partner with the best and distance yourself from the competition.

Stephen Bryant Heritage Insurance Group

Dave Porch

Van Robins Robins Insurance Agency

Andy Porch Porch–Stribling-Webb

Taylor Porch

Roger Smith Thompson & Smith Insurance

Matt Swallows Swallows Insurance Agency

Mitch Rader Burchfiel-Overbay & Associates

David Palmer Holman & Holman Agency

Charlie Rowland RSS Insurance

Ed Kaiser Jamieson & Fisher

Tom Strate Strate Insurance Group

Page 1 of 1 Bob McIntire McIntire & Associates Insurance

Busch Thoma E.B. Thoma & Son Agency

Art Gernt Art E. Gernt Insurance

Al Oliver Portis Tanner Westan Insurance Group

Thomas H. Chappell Christopher J. Turnbull CS&A Insurance

Jack Spann Spann Insurance

Walt Bradshaw Bradshaw & Company Insurors

Richard Hollis Hollis & Burns

Jeff Brown First Insurance

Derek Raborn William Blount Ashley Wyatt Raborn Insurance Agency William Blount & Associates Wyatt Insurance Services

Partners in Pennsylvania, North Carolina, Virginia, Indiana, Ohio, Kentucky, Tennessee, Georgia, Illinois, and Missouri.

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#2 on Insurance Journals’ Top 20 Agency Partnerships Increasing Agency Value for Over 270 Partners Strengthening the Independent Agency System Individually Owned & Operated https://fbcdn-sphotos-d-a.akamaihd.net/hphotos-ak-xfa1/v/t1.0-9/305408_228733... 10/9/2014

Contact Michele Bicknell at mbicknell@keystoneinsgrp.com

888-892-5904 Or visit www.keystoneinsgrp.com

40 Thefranchise Tennessee Insuror ©2015 Keystone Insurers Group®. All Rights Reserved. This does not constitute an offer to sell a franchise in any state in which the Keystone Insurers Group is not registered.

Association Update (continued from page 35) United Heartland Names TIS as Its Agency of the Year United Heartland, a leading national workers’ compensation insurance company, recently announced TIS Insurance Services, Inc. of Knoxville as its 2015 Agency of the Year.

honor, including Insurors members Cate-Russell Insurance of Maryville, Lipscomb & Pitts Insurance of Memphis, Shafer Insurance Agency of Knoxville and Wyatt Insurance Services of Knoxville.

Clay Jackson Serving Final Term for Big “I” Clay Jackson, CPCU, Regional Insurance President of BB&T Insurance Services in Nashville, has announced that this will be his last term serving on the Big “I” Large Agents and Brokers Roundtable. Jackson has chaired the committee for the past three years, and was awarded with the Big “I” Sidney O. Smith Award for his service to the Association.

“TIS Insurance Services has been a tremendous partner from the time we began to work with their Healthcare Division in late 2014,” said Mike McKeon, United Heartland regional director of Business Development.

Accident Fund Names Top Performing Agencies Accident Fund Insurance Company of America has announced its President’s Club Award honorees. President’s Club qualifications for 2015 included written premium exceeding $1.5 million, a cumulative loss ratio of 50 percent or less, and premium retention of 82 percent or higher.

Fifty-seven agencies were recognized nationwide for the

Merit Insurance Named Best in Mt. Juliet In its annual “Best of Mt. Juliet Readers Poll,” The Chronicle of Mt. Juliet has named Merit Insurance Agency as the “Best Insurance Agency” in the area. The list is compiled from a poll of the publication’s readers. u

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The Tennessee Insuror

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The Tennessee Insuror

Company Briefs

McPeak Elected to NAIC Board as VP

Tennessee Department of Commerce & Insurance (TDCI) Commissioner Julie Mix McPeak was elected as vice president of the National Association of Insurance Commissioners (NAIC), the nation’s insurance regulatory support organization. McPeak was elected vice president after a February 7th special election.

“It is a tremendous honor and privilege to represent the State of Tennessee as an NAIC officer,” McPeak said. “As Tennessee’s Insurance Commissioner, I am committed to the responsible regulation of the insurance industry and consumer protection. I will bring that same level commitment to my new leadership role in the NAIC.”

Oasis Outsourcing Completes Franklin Office Oasis Outsourcing, the largest privately held PEO in the country, has completed the grand opening of their Tennessee office in Franklin. Tracey Cartee, District Manager of the flagship office, is joined by Professional Employer Consultants Paul Maynard, Troy Brooks, Lynn Shaffer and Charlie Payne – a multi-year associate member of Insurors of Tennessee.

“We are very excited to have a presence in Tennessee. The market for Tennessee is one of growth an opportunity for all business types and we look forward to partnering with Insurors members in providing a wide array of services,” Cartee shared.

The Oasis Outsourcing Independent Producer program offers a generous compensation to reward brokers and foster a winwin relationship. The unique residual commission structure yields ongoing income year after year, but more importantly, offers cost-effective employment-related solutions that will help further solidify your value and relationship with clients.

Grange Names Cunningham as CIO Grange Insurance announced recently that Tim Cunningham has joined the company as VP – Chief Information Officer. In this role, Cunningham will lead major technology investments across all lines of business with the goal of delivering excellent customer service through innovative solutions.

With nearly 30 years of experience managing technology systems and processes, Cunningham spent the majority of his career rising through the ranks at Bank One. Following Bank One’s The Tennessee Insuror

merger with JPMorgan Chase, he served as Chief Technology Officer, Managing Director, retail technology services, where he was instrumental in developing digital and mobile strategies.

J.M. Wilson Adds Mandwee and Benda J.M. Wilson has announced the additions of Adam Benda, CISR, as Claims Representative and Personal Lines Underwriter and Adam Mandwee as Assistant Fleet Underwriter.

Benda is responsible for the intake and processing of claims for Property and Casualty, Transportation, Brokerage, Professional and Personal Lines accounts. He is also responsible for quoting, processing, and binding new and renewal personal lines risks and serving independent insurance agents in 21 states. Prior to joining J.M. Wilson, he worked as an Underwriting and Technology Manager for an insurance agency. Adam graduated Magna Cum Laude with a Bachelor’s Degree in Business Administration from Northwood University.

Mandwee is responsible for quoting new and renewal fleet transportation accounts, setting up and binding policies, assisting underwriters, and serving independent insurance agents in 21 states. Prior to joining J.M. Wilson, he worked in retail. Adam attended Western Michigan University where he earned a Bachelor’s Degree in Business Management with a minor in General Business.

Accident Fund Holdings Now AF Group Accident Fund Holdings has announced that the group of companies will now be branded as AF Group. AF Group and its four brands (Accident Fund Insurance Company of America, United Heartland, CompWest and Third Coast Underwriters) have become a notable force in the workers’ compensation industry. The group also released its new logo (seen in inset).

Each brand will continue to focus on their specific niche and region, but will be presented new opportunities for growth and diversification. The new name, AF Group, demonstrates the group’s longevity in the industry and the strength that the collaboration of brands offers to agents and customers.

Builders Mutual Distributes $1.6M Dividend Builders Mutual Insurance Company is distributing a $1.6 mil43

lion dividend to eligible policyholders in Tennessee, as well as Florida, Georgia, Maryland, Mississippi, North Carolina, South Carolina, Virginia and Washington, D.C.

the opportunity to join the ACUITY team and to help maintain and grow its success from the corporate governance standpoint.”

This year, as Builders Mutual continues to focus on jobsite safety and risk management, they return a dividend to nearly 9,600 eligible workers’ compensation policyholders.

Throughout their history, Builders Mutual has returned dividends in 27 out of 31 eligible years, totaling more than $50 million dollars. Builders Mutual continues to provide financial stability to policyholders and shows steady, strategic growth as a company.

Dick is a native of Mississippi. He is a graduate of Yale University and Duke University School of Law.

“Our ability to consistently return a dividend is directly linked to the importance our policyholders place on jobsite safety and our continued financial stability as a company,” stated John Boggs, President/CEO. “When our policyholders prevent injuries through education and training, they promote a culture of safety on their jobsites and in the construction industry. This positive safety culture helps employees stay safe, reduces employer expenses and increases policyholders’ opportunity to receive future dividend distributions.”

Central Insurance Promotes Etzler The Central Insurance Companies has announced the promotion of Scott Etzler, MBA, CPCU, to Vice President of Risk Management effective February 26th.

As Vice President of Risk Management, Etzler’s responsibilities include chairing the Risk Management Committee, managing Central’s Innovation Team, directing the company’s reinsurance programs, and coordinating its compliance with the Ohio Department of Insurance. He will also assist with the continuity phase of our Disaster Recovery Plan.

A graduate of the Indiana Institute of Technology and the University of Saint Francis, Etzler joined Central in 2004 in the Facilities Department.

ACUITY Names Dick Riley to Board

such as ACUITY.

Richard F. Riley, Jr. (Dick) is the newest member of ACUITY’s Board of Directors.

Riley is a tax partner in the Washington, D.C., office of the law firm Foley & Lardner LLP, which is headquartered in Milwaukee.

His areas of expertise in his law practice include tax and corporate matters for property and casualty insurance companies

“It is a real honor to join the Board of Directors of ACUITY,” Dick said. “The company has a stellar reputation as a leader in the insurance industry for financial success, customer service, agent relations, and as a great place to work. I am grateful for 44

The Hartford CEO to Chair Trade Group The Hartford Chairman and CEO Christopher J. Swift has been named as the chairman of the board for the American Insurance Association (AIA), and will serve a one year term. His service began at the group’s March meeting.

“I look forward to working with the board of directors and AIA staff on important policy issues, such as the pace of technological change, cyber security risk and the changing regulatory environment, each of which have important consequences for consumers, our industry and the regulatory community,” said Swift.

Utica Names CEO/COO At a meeting of the Boards of Directors of the Utica Mutual Insurance Company on February 22nd, Richard P. Creedon, Esq. officially began his tenure as Chief Executive Officer (CEO) of the company with the retirement of J. Douglas Robinson as CEO. Robinson will remain as Chairman of the Board. Kristen H. Martin, Esq. officially assumed the role of Chief Operating Officer (COO) at the same meeting.

Creedon was appointed President and Chief Operating Officer in December 2013. He joined the company in 1998 as Assistant Vice President and Director of Workers Compensation Claims. He was promoted to Vice President/Senior Claims Officer in 2001 and assumed responsibility for managing the claims department. Two years later he was named Senior Vice President and one year after that was named General Counsel and Senior Claims Officer. In 2007, he was promoted to Executive Vice President and elected to the Utica Mutual Board of Directors in 2012.

Martin is the first woman in the company’s history to hold the title of COO. Reporting to Martin in her role as Executive Vice President and COO will be the senior officers of the following departments: Actuarial, Claims, Customer Experience, Information Technology, Project Management, Reinsurance, Marketing and Sales and Underwriting.

Brentwood Services Promotes Brothers Brentwood Services Administrators Inc. (BSA) has promoted Nicole Brothers to the position of claim representative I in the Tennessee Claims Department, according to Jeff Pettus, president and chief executive officer of BSA. In her new position, Brothers’ responsibilities include reviewThe Tennessee Insuror

FROM THE DELTA TO THE SMOKIES WE’RE PROUD TO SUPPORT THE INDUSTRY’S BEST.

Construction • Education • Financial Institutions • Healthcare • Manufacturing Professional Services • Real Estate • Retail • Technology • Wholesale Distribution

CNA is proud to support Tennessee’s independent agents and brokers with customized coverages, local industry knowledge and the strength and stability of an “A” rating by A.M. Best. When you’re looking for a carrier with a broad industry appetite, who understands your commitment to business success … we can show you more.® Learn more about our coverages and services today.

Contact our local Nashville Branch at 615-886-3300, or visit www.cna.com.

CNA is a service mark registered by CNA Financial Corporation with the United States Patent and Trademark Office. CNA Financial Corporation subsidiaries use the “CNA” service mark in connection with insurance underwriting and claims activities. Copyright © 2016 CNA. All rights reserved.

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45

ing, processing and handling workers’ compensation claims as assigned by Judy Betzold, AIC, claim supervisor in the Tennessee Claims Department. In addition, Brothers will determine compensability of the claim and extent of liability and communicate directly with clients, employers, injured workers, physicians, and attorneys.

Brothers was employed by BSA in 2009 as a claim assistant, then was promoted to claim examiner II. Before joining BSA, she worked in positions providing clerical support.

SIU Intoduces Active Shooter Coverage

2015. He also led AMERISAFE in its initial public offering in 2005.

Bradley commented, “After serving years as CFO, Janelle Frost’s transition to the CEO role of AMERISAFE began when she was promoted to Chief Operating Officer in May 2013.

When I announced my retirement in March 2015, I agreed to remain until September 2016 to assist her in the transition to CEO. This transition has gone extremely well and now is the right time for me to fully retire. I have full confidence in Janelle and the Company’s management team, and I am looking forward to retirement.”

Southern Insurance Underwriters, Inc. (SIU) has introduced an innovative insurance product designed to protect educational institutions against the unfortunate effects of an active shooter incident on campus. The increasing incidence of gun violence in our nation’s schools makes proactive risk management a high priority for school administrators. SIU’s new product provides up-front risk assessment services, primary liability coverage and emergency responder services, all of which are designed to minimize the disruption and financial consequences of an active shooter event. For more information, visit www.activeshooterins.com.

The Board has appointed Jared Morris as Chairman of the Board of AMERISAFE effective upon Mr. Bradley’s retirement.

InVEST Welcomes New Executive Director

Ware previously served as senior vice president, chief actuary, a position he held with EMPLOYERS since 2012. Ware has been EMPLOYERS’ Appointed Actuary since 2015. He is located in EMPLOYERS headquarters in Reno, Nevada.

InVEST, the insurance industry’s premier classroom-to-career education program, is pleased to announce that Deborah M. Pickford has joined the program’s team as executive director.

Pickford previously served as Allstate Insurance Company’s senior field corporate relations manager.

“InVEST is pleased to announce that Deborah Pickford will now lead the team as executive director,” says Cindy Hower, InVEST board chair and president of Kellerman Insurance, an independent agency in Holton, Kansas. “We are excited to work with her as InVEST continues to grow in its mission to educate students about the insurance industry and provide financial literacy.”

The InVEST program is a key driver to attract new talent to the insurance industry and is currently in more than 600 college and high schools across the country.

Pickford will replace Diane Mattis, CPCU, AFIS, AIAM, who served as InVEST executive director since 2010 and retired effective April 1st.

Bradley Retires as Executive from Amerisafe AMERISAFE, Inc. a specialty provider of hazardous workers’ compensation insurance, has announced that C. Allen Bradley, AMERISAFE’s Executive Chairman, will retire effective April 22nd.

Bradley joined the Company in 1994 and served in a number of management roles, including as CEO from 2003 through 46

EMPLOYERS Promotes Ware to Executive VP Employers Holdings, Inc. has announced that Bryan C. Ware has been promoted to executive vice president, chief actuary.

Ware is responsible for overseeing reserving, pricing and risk analysis, predictive analytics, enterprise risk management, as well as the development and implementation of strategies and initiatives that support operational and strategic goals.

Ware has over 31 years of experience in the insurance industry with significant experience in workers’ compensation. He is a Fellow of the Casualty Actuarial Society, a Member of the American Academy of Actuaries and a Chartered Enterprise Risk Analyst. Ware holds a B.S. degree in Mathematics from Wichita State University. He completed the Advanced Executive Education Program jointly sponsored by the American Institute for Chartered Property Casualty Underwriters and the Wharton School of the University of Pennsylvania.

Burns & Wilcox Announces Walker Sponsorship Burns & Wilcox, a leading wholesale insurance broker and underwriting manager, recently announced its official sponsorship of American professional golfer Jimmy Walker. Walker, who is currently on the PGA Tour and is ranked 22nd in the world, has a long track record of wins including five PGA Tour victories and appearances on the most recent Ryder Cup and Presidents Cup teams. Walker will be the company’s first professional athlete brand ambassador.

“We are proud to have Jimmy Walker join Team Kaufman as one of his official sponsors,” says Alan Jay Kaufman, Chairman, President and CEO of H.W. Kaufman Financial Group, parent to Burns & Wilcox. “We share many distinctive qualities: integrity, competitive drive, hard work and professionalism. I believe Jimmy will be a great partner and ambassador of our company.” u The Tennessee Insuror

2016 MARKETING REIMBURSEMENT PROGRAM

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(703)706-5443 | kiescha.cherry@iiaba.net The Tennessee Insuror

47

The Best Defense is a Good Offense

by Richard Lund, J.D., Vice President, Senior Underwriter, Swiss Re Corporate Solutions*

You’ve heard that phrase over and over, and while it may be a cliché, it doesn’t make it any less true. And it can be especially true when you are trying to do everything you can to prevent an E&O claim. While you’ve heard from many sources that one of the best ways to prevent an E&O claim is to have proper documentation, did you know that the carriers for whom you write insurance business also provide you with the offense to help you prevent an E&O claim? Have you considered utilizing the insurance companies’ expertise to help inform your customers of ways that they can prevent having a loss, and by so doing, provide you with a potential defense to an E&O claim?

Much like the E&O Happens website (http://rms.iiaba.net/Content/default.aspx) provided by Swiss Re Corporate Solutions and the IIABA provides risk management and claims prevention tools for you as insurance agents, many of the companies that you write with have pages on their websites devoted to helping their customers prevent claims. For example, on the Travelers Insurance Company website, www.travelers.com, is a tab at the top of their home page that says “Prepare & Prevent.” By simply clicking on that tab, a list of over 30 areas are revealed for individuals, business, weather, and even seasonal exposures that provide tips on how to prevent losses. For individuals, a quick review of just a few of them provides tips on how to prevent losses from proper use of fire extinguisher, to winter home maintenance tips, to how to protect yourself from package theft and ID fraud. For businesses there are tips on cyber risk, how to adjust a desk chair and work station, and business continuity plans. And there are many more.

Companies, such as Nationwide, The Hartford, CNA, Philadelphia, EMC, and many others, that are partners with your state IIABA insurance association have similar website pages that help their customers with similar information about how to prevent losses.

Provide the Right Information to Insureds So how do those websites help you provide a good offense to defense of an E&O claim? By informing your customers of the availability of these resources on how they can take steps to prevent claim, they will provide you with the ability to defend against an E&O claim against you without them being aware they are doing so.

sources and you direct them to the website and recommend that they take a look to see what they might do to help them prevent having a loss. One page of that website has a section on how to prevent water damage. Let’s assume this is a young new homeowner that may not be aware of all things they should be doing to prevent having water damage to their home. The website will contain information on how to protect water pipes from freezing, the benefits to keeping your gutters cleaned and how to landscape in a way that diverts water away from your home. It walks the customer through common situations that the customer may experience and then gives hints on how to prevent losses.

Just as we recommend that insurance agents use a checklist to make sure they are offering the right coverages to their customers, these prevention tips are checklists for preventing losses by your customers. By following these steps your customer is taking steps that will prevent them from having an uncovered loss that might later try to blame you for. Therefore, the best way to prevent an E&O claim against you as an agent is to stop the claim from ever happening in the first place. In other words, the best defense is a good offense.

About the Author Richard F. Lund, JD, is a Vice President and Senior Underwriter of Swiss Re Corporate Solutions, underwriting insurance agents errors and omissions coverage. He has also been an insurance agents E&O claims counsel and has written and presented numerous E&O risk management/ loss control seminars, mock trials and articles nationwide since 1992.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re”) and/or its subsidiaries and/ or management and/or shareholders. u

For example, let’s say you have a customer who has a homeowner’s policy, and the carrier you have placed them with has these resources available. As part of your normal good customer service you let them know that the carrier has these re48

The Tennessee Insuror

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We get you.

We understand what independent agents want and we’re committed to giving you the tools you need to grow your independent agency.

Look into a partnership with us by calling today.

Stacy Gardner 614-948-4107 Gardnes1@nationwide.com

Products underwritten by Nationwide Mutual Insurance Company and Affiliated Companies. Home Office: Columbus, OH 43215. Subject to underwriting guidelines, review, and approval. Products and discounts not available to all persons in all states. Not all Nationwide affiliated companies are mutual companies, and not all Nationwide members are insured by a mutual company. Nationwide, the Nationwide N and Eagle and Nationwide is on your side are services marks of Nationwide Mutual Insurance Company. Š 2015 Nationwide NPO-0605AO (03/15)

50

The Tennessee Insuror

Meetings

Spring Calendar Filling Up With Great Events Big “I” Legislative Conference April 13-15 The 2016 Big “I” Legislative Conference has been set for April 13-15, 2016 at the Renaissance Washington downtown in Washington D.C. In addition to meetings on industry legislative issues, the event will feature a political panel including Bob Beckel and Tucker Carlson.

Attend this one-of-a-kind legislative event for the independent agency system and educate members of Congress on issues important to you and your clients. Registration includes an indepth issues briefing, legislative breakfast with high-profile Congressional speakers, a general session and networking opportunities. The event is a great opportunity to make an impact in your industry on a National level.

View a new informational video at https://www.youtube. com/watch?v=oKJX4mENUto to learn more about the event, or register now at http://www.independentagent.com/ Events/LegislativeConference/home.aspx.

MTSU Chair of Insurance Golf Fundraiser 4/19 The MTSU Martin Chair of Insurance will host its 32nd annual invitational golf scramble on Tuesday, April 19th at Champions Run Golf Course in Rockvale. Proceeds from the tournament will benefit scholarships for students enrolled in the Insurance Program at MTSU. For more information, please contact Patti Parsons at patti.parsons@mtsu.edu.

YOUR FIT FOR WORKERS’ COMP AND MORE! Preferred Comp of Tennessee is endorsed by the Insurors of Tennessee (IOT) to provide member agencies competitive workers’ compensation options.

Meadowbrook Insurance Group, Inc. Low to Moderate Hazard Workers’ Compensation

• • • • • • • • • •

Artisan Contractors Auto Repair & Service Goods & Services Hospitality Light Contracting Light Manufacturing Office/Clerical Physicians Restaurants Wholesale/Retail

Insurors of Nashville Golf Tourney May 2nd The Insurors of Nashville will hold their annual golf tournament on Monday, May 2nd at Old Natchez Country Club. The event will feature a lunch, golf outing and social, with proceeds benefiting Tom Joy Elementary School. For more information, please visit www.insurorsofnashville.com.

Memphis Local Board Picnic & Golf May 10th The Insurors of Memphis local board will hold their annual picnic and golf tournament on Tuesday, May 10th at Windyke Country Club. More details will be released for the event soon. For more information, please contact Matt Lawrence at mlawrence@clayandland.com or download the forms at http://www.insurors.org/media/28706/PicnicRegistration16. pdf. u The Tennessee Insuror

For more information or to get started, please contact: Keller Chapman (615) 406-8033 keller.chapman@meadowbrook.com Josh Allen-Bottoni (978) 933-4161 joshua.allen-bottoni@meadowbrook.com

www.preferredcomp.com

51

Member Tips

RLI Home Business Ins. A Smart Source of Protection for Your Clients Your customers need business coverage if they sell a product or service. Generally coverage options on the homeowners policy are inadequate. The RLI Home Business Insurance Policy has provided affordable coverage tailored for home-based businesses for over 20 years, and can provide your customers peace of mind.

Benefits include: • Coverage for business personal property away from the premises location. Policy endorsement provides coverage to business personal property which is temporarily at a premises an insured may lease, operate or occupy.

• Coverage limits available up to $100,000 for the business personal property while at the location and temporarily off location.

• Package Policy priced for home-based businesses.

• Many business classifications include coverage endorsements designed to tailor coverage for business operations being conducted.

• Up to $1,000,000 in business liability coverage with aggregate limits at two times the per occurence limit.

• Liability limits follow the insured’s business operations conducted within the U.S. and provide for losses which result in bodily injury, property damage and personal and advertising injury.

Optional Coverages: • Variety of additional insured endorsement forms for a small premium fee of $20 for each eligible additional insured listed • Identity Fraud Expense Coverage • Garagekeepers Coverage • Money & Securities Coverage • Increased theft limitation for jewelry and watches Low Deductibles and Affordable Rates: • $250 deductible for property losses and liability losses resulting in property damage • Annual policies starting at $150 with average premiums of $300 Some of the top business classifications for home business include teachers/tutoring, bakeries, residential inspection services, handicrafts including crafters, photographers, artists, personal care products, costume jewelry sales, entertainers and sales of clothing and accessories.

Contact David Williams at dwilliams@insurors.org for more information or to get started today. u

Directory of Advertisers Advertiser

Phone

Website

Page

ACUITY (920) 458 - 9131 www.acuity.com 13 Allstar Financial Group (877) 950 - 3222 www.allstarfg.com 22 Amerisafe (800) 897 - 9719 www.amerisafe.com 17 AmTrust North America (877) 528 - 7878 www.amtrustnorthamerica.com 49 Applied Underwriters (877) 234 - 4450 www.auw.com/us 2 Arlington/Roe & Co. (800) 878 - 9891 www.arlingtonroe.com 7 Auto-Owners Insurance (615) 373 - 5200 www.auto-owners.com 55 Bailey Special Risks, Inc. (800) 768 - 7475 www.bsrins.com 12 Beazley Data Breach Coverage (615) 515 - 2609 www.insurors.org 9 Berkley Southeast Insurance Group (615) 932 - 5508 www.berkleysig.com 19, 20 Berkshire Hathaway Guard Insurance Cos. (800) 673 - 2465 x4567 www.guard.com/apply 24 BITCO Insurance Companies (800) 342 - 5786 www.bitco.com 24 Brentwood Services Administrators (800) 524 - 0604 www.bwood.com 17 Builders Mutual (800) 809 - 4859 www.buildersmutual.com 22 Burns & Wilcox (800) 341 - 4844 www.burnsandwilcox.com 36 CNA Insurance (800) 251 - 5852 www.cna.com 45 CHUBB (866) 227 - 9648 www.chubbcollectorcar.com 15 Consumers Insurance (615) 896 - 6133 www.ciusa.com 52 Donegal Insurance Group (800) 277 - 7442 www.donegalgroup.com 7 EMC Insurance (800) 239 - 2005 www.emcins.com 34 FCCI Insurance Group (800) 226 - 3224 www.fcci-group.com 16 Harford Mutual (800) 638 - 3669

www.harfordmutual.com 31 Heartland Ovation Payroll (901) 598 - 4829 www.ovationpayroll.com 20 INSBANK (866) 866 - 4268 www.insbanktn.com 11 J.M. Wilson (800) 595 - 0063 www.jmwilson.com 42 Johnson & Johnson (931) 704 - 0810 www.jjins.com 28-29 Keystone Insurers Group (800) 416 - 5498 www.keystoneinsgrp.com 40 MetLife Auto & Home (615) 812 - 4811 www.metlife.com 26 National Security Group (800) 239 - 2358 x267 www.nationalsecuritygroup.com 41 Nationwide (614) 948 - 4107 www.nationwide.com 50 Ole Miss Insurance Symposium (662) 915 - 2830 www.olemissalumni.com/events 53 Penn National Insurance (800) 395 - 0518 www.pennnationalinsurance.com 56 Preferred Comp/Meadowbrook (800) 755 - 8090 www.meadowbrook.com 30, 51 Preferred Property Programs (888) 549 - 2465 www.umbrellaprogram.com 42 Securerisk (770) 723 - 8096 www.securerisk.com 38 South & Western (800) 492 - 5351 www.southandwestern.com 33 Summit Holdings (800) 971 - 2667 www.summitholdings.com 26

BIG “I” LEGISLATIVE CONFERENCE 2016 APRIL 13-15 | WASHINGTON, D.C.

register now at iiaba.net

Thank you, agents.

Auto-Owners has always been dedicated to the independent agency system and proudly standing behind the agents who represent us. We would like to thank you for your continued loyalty, which has helped us achieve tremendous growth and accomplishments over the years.

2500 21st Avenue South Suite 200 Nashville, TN 37212

PRSRT STD U.S. Postage PAID Nashville, TN Permit No. 380

We look for the best independent agents and build relationships that last the duration. We are committed to the independent agency system as the only means to deliver our products. Because of that, we work hand-in-hand to help our agencies grow profitably.

Our agents set us apart.

Business • Surety • Auto • Home

www.PennNationalInsurance.com