2011_Dec_PA by Insurance Agents & Brokers Service Group Inc

PENNSYLVANIA

INTHISISSUE: _____________ 9 reasons for IA&B members’ good cheer

Good people

Make great partners!

Take Harleysville, for instance. Like others who have helped you along the way, we’re committed to ensuring that our agency partners succeed. By working with you to land key accounts. By helping you cross-sell to existing customers. By getting your policyholder a fast, fair claims settlement. And, well, whatever it takes to help you grow profitably with us. If you’d like to partner with an “A” rated carrier known for its strong agency relationships, call the “Good people to know” at 1.800.523.6344, ext. 5016, or visit our website at www.harleysvillegroup.com.

Weâ&#x20AC;&#x2122;re celebrating our 100th year by planning for our next 100 years. Tanya Wentzel, Des Moines Branch Marketing Manager Troy Boysen, Minneapolis Branch Commercial Underwriter Connie Jarzynka, Omaha Branch Claims Adjuster Emails and teleconferencing may be time-savers, but there is no substitute for the one-to-one relationships with insurance professionals who know you and your community. Early on, EMC Insurance Companies realized the value of being close to agents and policyholders. That value continues to pay off in products and services tailored to individual market needs. Whatever the future holds, insurance will always be a relationship business and EMC will continue to keep those relationships as close to your office as possible.

Valley Forge Service Branch: 800.333.3622 | Home Office: Des Moines, IA

Contents PRIMARY AGENT MAGAZINE

Nine reasons for IA&B members’ good cheer Year-end is a time for retrospection. Here, IA&B looks back at 2011 and highlights nine of the many ways the organization responded to members’ needs.

Page 12

Mission Statement Primary Agent delivers ideas to help Insurance Agents & Brokers’ members negotiate their unique position as guardians of trust between insurance consumers and companies while facing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission to preserve and advocate the American Agency System.

Get social with IA&B

In every issue 4 5 6 8 10 21

Chair of the Board’s Message Member FAQ State News Preventing Errors & Omissions Coverage Corner Glance at Events

23 24 28 28 28

IA&B Partners Technology Update Advertisers Index Classified Ads Last & Least

Subscriptions: Non-member price: $2.25 per copy or $15 per year. All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two months prior to publication. Advertising rates furnished upon request. Address inquiries to: Primary Agent Editor Mechanicsburg, PA 17055-0763 Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347 Periodical postage paid at Mechanicsburg, Pa. and additional entry post office. Postmaster: Send address changes to above address. Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2011-12) is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

Copyright 2011. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and is not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before making any decisions and we disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.

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Board of Directors

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P

Officers Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P Chair of the Board West Chester, Pa. Norman F. Basso, CPCU Vice Chair of the Board York, Pa.

Chair of the Board’s M

David Rosenkilde, CIC Immediate Past Chair of the Board Reisterstown, Md.

Reflection

Members Joyce M. Bailey, CIC, CRM, CPIW Newark, Del. Henry “Butch” Bradley, Jr. Forest Hill, Md.

So this is Christmas And what have you done Another year over And a new one just begun

Timothy P. Burris Mifflintown, Pa.

~ John Lennon

N. Lee Dotson, CIC, AAI Wilmington, Del.

It’s the holiday season, the end of the year — time to pause and reflect. How did you fare with those resolutions? And what about your goals, personal and professional? It’s time to take note of where you’ve been, how far you’ve come and where you’d like to go.

John L. Frankenfield Telford, Pa. G. Greg Gunn, CIC Lemoyne, Pa. John B. Hollister Milford, Pa. Diana M. Hornung Hanby, ACSR Wilmington, Del. Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa. +

Robert S. Klinger, LUTCF, CPIA Germantown, Md. Douglas A. Loesel, CPCU Erie, Pa. Michael F. McGroarty Sr. Pittsburgh, Pa. Ann Gallen Moll, CIC Reading, Pa. April E. Ressler, CIC Altoona, Pa. Scott C. Rogers, CPIA* York, Pa. David B. Wasson Sr., CIC State College, Pa.

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** New Castle, Del.

The IA&B Boards of Directors and staff do much of the same this time of year. We take inventory of our members’ needs and of how we’ve done meeting them. Times remain tough. We recognize that. And we recognize that that means IA&B’s work is more valuable to members than ever, so we stepped up our efforts this year and plan to do the same in 2012. This issue of Primary Agent highlights nine ways that the organization came through for members in 2011. I invite you to grab a warm drink (or a cold one that will warm you), prop your feet up and turn to page 12 to learn more about what IA&B accomplished on your behalf this year. Wishing you and yours a safe holiday season and a prosperous new year. Bob

Driving members to distinction.

* Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director

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Member FAQ QUESTION:

One of my carriers’ agency agreements requires me to have a separate “trust

account” for that carrier only, where I can’t combine the premiums with other carriers’ premiums? Can they require me to have a separate trust account just for them?

ANSWER: This will call for a two-prong answer: 1. Trust accounts – Your carrier can require you to have a separate “fiduciary” account, but they shouldn’t require you to have any “trust” account at all. The industry’s chronic misuse of the expression “trust accounts” is problematic. Trust accounts are mentioned in countless agency agreements and are not the proper way to define an agency’s responsibility to his carriers ... and to its clients for that matter. Under law and regulation, at least for our states of Delaware, Maryland and Pennsylvania, but many others as well, agents bear fiduciary responsibilities with regard to the premiums they hold on behalf of their carriers. And that’s exactly what fiduciaries do: They are “entrusted with handling money or property for another person.” Does responsibility ensue? Yes. Is good faith expected? Yes. Are you on the hook if you lose the money? Absolutely. You are responsible for every penny that made its way to your agency until it makes its way to the carrier. Period. A position of “trust” or “trustee” however, bears other requirements … and limitations that can be incompatible with an insurance agency’s common and accepted practices. For example, certain states will require separate trust accounts for each beneficiary (as seems to be your case here) whereas this is not required for fiduciary accounts. No monies belonging to the agency (think: commissions) can ever be in this account. Finally, all interest earned by the trust account is in the sole and undisputed possession of the beneficiary. That means you can’t claim the interest collected … no doubt a significant issue. Keep in mind this is a partial list.

➠ So, start with asking the carrier to rephrase your duty as a fiduciary duty and reference the accounts as fiduciary and not trust accounts.

2. Separating the fiduciary account from other carriers’ premium accounts – While it is unusual for companies to do so, they can require the agency to keep their premium monies separate from other carriers’ premium accounts. Traditionally, carriers tend to allow premium funds to be held in a single premium fiduciary account, as long as the agency complies with its fiduciary duties under law and regulation. These requirements generally include the fact that: ◗ The funds are reasonably ascertainable from the agency’s books and records ◗ The amounts due insurers are at all times above a certain threshold

➠ You can certainly ask your carriers for clarification, or if they will reconsider the separate account requirement, but ultimately they can make it a requirement. To learn more about your fiduciary responsibilities, including how to maximize your FDIC protection at no additional cost, go to www.iabgroup.com/fiduciary. If you have questions about your agency agreement and how this or other provisions are worded, you can also seek guidance from IA&B.

DO YOU HAVE A QUESTION? E-mail it to us at iab@iabgroup.com. Please use “Primary Agent FAQ” in the subject line of your message. You can also fax your question to (717) 795-8347. We look forward to answering your questions!

State News Primary Agent | December 2011

Adding the Trusted Choice® logo pays — literally

Industry outlook: light at the end of the tunnel?

Getting the greatest benefit from the Trusted Choice national brand involves letting everyone know that you’re a Trusted Choice agent. The good news is that Trusted Choice will actually pay you to add the logo to your letterhead, business cards, website, and many other places.

That might not be a train after all, according to the 2011 Big “I” Best Practices Study. The light could be the first signs of industry recovery following a deep recession and unprecedented soft market. The study, released this fall, found that organic growth improved (albeit modestly) and profitability held constant among most revenue groups.

Trusted Choice will reimburse agencies up to $500 for costs related to producing co-branded marketing materials for your agency. So whether you’re designing new brochures, re-ordering folders, or you simply need an excuse to update that tired old sign, you can get some help paying for GENCY A E C N A R it simply by adding the SU ICAN IN ALL AMER Trusted Choice logo. eet

AAIA

where Str 123 Some PA 11111 Anytown,

The guidelines for the marketing 2 1 reimbursement 2 -1 5 717-55 cy.com n e g a n program are very a c m allameri agency.co n a c ri e m specific and should a info@all be reviewed before ordering new materials with the Trusted Choice logo. Don’t make the mistake of designing first and asking questions later. If not done right, you will not be reimbursed. To read more about reimbursement, log in at TrustedChoice.com/agents.

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Many surveyed agencies benefited from the growth strategies (account development, increased advertising/marketing, producer management techniques) and efforts to control and lower expenses that they implemented in light of recent years’ market struggles. Personal lines and group medical rates grew over the past year, and the drop in commercial lines growth was far less than last year. Big “I” and Reagan Consulting conduct the Best Practices Study every three years. They survey agencies from across the country known for their outstanding management and financial achievement. The goal is to highlight their best practices for other agencies to follow. Access the findings: http://bp.reaganconsulting.com/bp2011/ intro.html

Legislative year in review Producers found themselves affected by some of the top legislative stories in 2011 — health care reform and the budget. The following recaps those and other newsworthy notes from the Capitol: This year marked the passage of one of IA&B’s priority pieces of legislation: workers’ compensation coverage for members of an LLC or partners of a partnership. IA&B worked diligently to educate legislators on the need for this (volutary) coverage. Championed by Rep. Mark Mustio, the bill was signed by Gov. Corbett on June 29 and became effective Aug. 29. The 2011-2012 state budget left agents relatively unscathed. The Insurance Department maintained its level of funding, but the Crop Insurance Program (housed in the Department of Agriculture) was completely zeroed out. Pennsylvania legislators helped to bring the state into compliance with the Nonadmitted and Reinsurance Reform Act of 2010. The bills allow Pennsylvania to impose surplus lines premium taxes only when it is the home state of the insured. Lawmakers and officials at the Insurance Department spent the summer collecting expert testimony and public input on the prospect of a state health exchange. The state is required by the federal health care law to have a health insurance marketplace or risk having one set up by the federal government. IA&B staff and member agents testified to need to preserve the role of the producer in the process. Help IA&B maintain – and grow – its voice in Harrisburg. As the year comes to a close, AgentPAC remains behind its fundraising goal. Help bridge the gap and allow producers’ perspectives to be heard at the Capitol in 2012. Contribute: www.iabgroup.com/pa/pol_act_ctr [7]

New rules for teen drivers effective Dec. 24 Producers can show their value and stay top-of-mind by sharing the latest teendriver rules with affected insureds. The law, which takes effect this month, mandates the following for junior drivers (age 16 1/2 to 18): ◗ Limit on the number of passengers under age 18: no more than one (except for immediate family members) for the first six months; no more than three after the first six months ◗ Increase in behind-the-wheel training: 65 hours (up from 50), 10 of which must be at night and five of which must be during inclement weather The measure also will make failure of drivers and underage passengers to wear a seatbelt a primary offense, meaning violators can be pulled over and ticketed for this infraction alone.

knowledge about an advanced topic, taking them beyond the information shared in the Institutes. IA&B's James K. Ruble Graduate Seminars offer a variety of agendas based on designee input for each date and location, allowing participants to tailor their educational experience. Access the 2012 schedule: www.iabgroup.com/ruble

Is your latest contact info on file with the department? Informing insurance departments of your whereabouts is often overlooked, but vital. The Kentucky Department of Insurance this fall reminded licensees (non-residents included) that they have 30 days to provide notification of an address change — or face a $250 fine. Delaware, Maryland and Pennsylvania also require licensees to report a change of address within 30 days. And all three states’ regulators interpret that to include a business address, which — indirectly — requires producers to report a change of employer. Learn more: www.iabgroup.com/pa/ change_employer

WELCOME

New Members Chessman Agency Inc West Pittston, Pa. Bechtel Insurance Agency Inc Monaca, Pa. Metcho Insurance & Surety Bonds Inc Taylor, Pa. JAB Insurance Brokers Inc Pottstown, Pa. Keen Risk Management & Insurance LLC Philadelphia, Pa.

Preventing Primary Agent | December 2011

ERRORS AND OMISSIONS

EXCESS & SURPLUS LINES: UNIQUENESS THAT COULD SPELL ERRORS & OMISSIONS TROUBLE CURTIS M. PEARSALL CPCU, AIAF, CPIA Curtis M. Pearsall, CPCU, AIAF, CPIA, president of Pearsall Associates Inc. and special consultant to the Utica National Errors & Omissions Program, supplied this article.

With many industry journals and experts indicating a firming of the marketplace, activity to the Excess & Surplus Lines marketplace could increase. While this segment of our industry plays a vital role, it is important to understand the uniqueness it presents. Failure to do so could spell Errors & Omissions trouble. There are a number of issues for which to look out, so let’s review some of the main ones. Lack of authority to bind In the standard marketplace, carriers typically spell out the types and sizes of risks agencies can bind. This adds to the efficiency of the process. Conversely, in the E&S marketplace, accessing these carriers typically requires you to deal with an agency that has an E&S license, traditionally referred to as a wholesaler.

provide your agency with access to additional carriers that write more specialized risks and potentially some hard-to-place risks. The wholesaler is technically the agent for that carrier and will have some type of brokerage contract. Your retail agency is not an agent for these carriers and thus you do not have binding authority. To bind a risk, you would need to advise the wholesaler of your desire that the risk be bound. In some cases, they may not even have the authority to bind the risk and may need to contact the carrier.

it or will the wholesaler advise you that they need premium payment and the necessary affidavit forms before they can bind? Clearly know the rules of engagement when working with wholesalers. Professional wholesalers will make it clear on the proposals what is needed to bind coverage. Be aware of these “rules” and factor them into your handling of the risk. Look for wholesalers who will provide you with an account current for your business. This will take away some of the potential headaches.

Bottom line: As the retailer, do not advise the client that coverage is bound until you have confirmation from the wholesaler.

Classification Limitation endorsement/other unique endorsements Do you know if the E&S carriers in your state include the Classification Limitation endorsement on their policies? You need to know because this form has the potential to be your biggest headache.

Binding requirements If you deal with multiple wholesalers, chances are the procedures and expectations to bind among those wholesalers differ. Let’s say you want to bind a risk at 4 p.m. on a Friday. Can you do

The wholesaler’s job – which most do very well – is to

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What this endorsement essentially does is restrict coverage under that policy to only those classifications noted on the policy. For example, if you insure a painter who only performs inside painting, the coverage would state only claims arising from inside painting would be covered. If the painter gets the opportunity to paint the outside of a house, there would be no coverage unless the policy was modified accordingly. Look out for this form and, if it is included on that particular policy, advise your customer in writing of this limitation. Explain that if they perform any work outside the stated classifications, they have no coverage and should contact the agency before undertaking this additional work. There is also the possibility the proposal/policy may contain other unique endorsements that could severely limit the coverage actually provided. Watch for these forms. It is highly recommended advising your client of these various limiting endorsements or exclusions at proposal time and when you send them the policy. Note in your cover letter to them that they should read their policy carefully and contact the agency with any questions. Don’t expect the renewal policy to look like the expiring one — it probably doesn’t When your E&S accounts come up for renewal, there is a good chance you will need a renewal application as automatic renewals are not the norm on the E&S side. When you receive the renewal proposal from the wholesaler, review it carefully, identifying any changes or new endorsements being added. When a carrier wants to modify coverage in

the E&S industry, they do not need to issue a conditional renewal notice, unlike the standard marketplace. The E&S carrier may add new exclusions or even reduce the limits. While it’s hoped they will give you advance notice, they typically are not required to. It is wise to ask your wholesaler ahead of time if they expect any changes on the renewal policy. There is a chance the coverage changes could be significant. In some cases, the customer may not be agreeable to the changes, so make it part of your process to contact the client and review the renewal proposal with them to get their approval on whether they want coverage bound. No backdating It is critical that the agency’s staff clearly understands there is no backdating of coverage in the E&S market. As account executives prioritize their work, special attention should be given to accounts in the E&S market. If there is an account that renews on a Saturday and you leave the office on Friday not having bound the account, there is a very good chance that when you call on Monday to bind, the account will be bound as of Monday – once again, no backdating. If there was a loss over the weekend, there probably will be no coverage in effect. This could be a significant issue with property coverage. No Guaranty Fund With the exception of New Jersey, the State Guaranty Fund does not provide any protection if an E&S carrier is declared insolvent. As a result – and even for agents in New Jersey – it is highly recommended to know the financial condition, the A.M. Best rating, of the carrier. When you

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receive proposals, know who the carrier is. It may be a new carrier you have never heard of or a carrier you have dealt with. Carrier ratings change, so know the carrier’s current rating. While it is not a bad idea to ask the wholesaler, don’t rely strictly on their feedback. It is very easy to check carriers’ ratings through the A.M. Best website (www.ambest.com). Compliance with state regulations on accessing the E&S market There are a number of states requiring that a risk be declined by a specific number of admitted markets before business can be placed in the E&S marketplace. In addition, in many states, the account cannot be placed in the E&S market if there is an admitted market willing to write the risk. It is essential that you comply with these regulations. Hard market or soft, E&S can be a tremendous asset to your agency While the E&S industry has significant uniqueness to it, you will need this side of the industry for certain risks. Establish a solid relationship with several wholesalers, as no one can do it all — and be on the lookout for the issues discussed above … because an ounce of prevention is worth a pound of cure.

Coverage Primary Agent | December 2011

CORNER

WATER VERSUS WATER

JERRY M. MILTON, CIC Jerry M. Milton, CIC teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He is also the education consultant for IA&B, working with CISR, CIC and continuing education programs.

By most estimates, Hurricane Irene wound up as one of the top 10 destructive and deadly hurricanes to hit the United States since 1980. The storm caused transportation to be shut down along the East Coast, and more than 5.8 million customers lost electricity. Thousands of flights were cancelled, flooding washed out roads and destroyed homes, and evacuation orders were issued for hundreds of thousands. As if that wasn’t enough, a couple of weeks later along came Tropical Storm Lee, which sat over the eastern part of the country and dumped over 20 inches of rain in some areas. As everyone knows, the end result was water, water everywhere. In the aftermath of these storms, issues are certain to arise concerning insurance coverage for storm-related damage. The primary question will be, “What

caused the damage – flood, wind-driven rain or back-up from a sewer or drain?” In the event of hurricanerelated flooding, or tropical storm flooding, determining what caused the damage is absolutely imperative since one cause of loss may be excluded (flood) and the other cause of loss may be covered (wind or water backup). When more than one cause of loss causes the damage, and one is covered and the other is excluded, we insurance folks like to say “concurrent causation.” And, we usually exclude any damage arising out of concurrent causation. The Superior Court of Pennsylvania addressed this issue in 2009 in the case of Bishops, Inc. v Penn National Insurance. Bishops, which is located in the Borough of Millvale in Allegheny County, purchased a property policy from Penn National which included the Penn Pac Endorsement.

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Bishop’s claim against Penn National arose out of sewer and drain back-up followed by extensive flooding of its business premises on Sept. 17, 2004 during Hurricane Ivan. They suffered a total loss of their inventory and office equipment when water runoff backed up through the municipal drainage system and nearby bodies of water overflowed their banks. Bishops filed its claim with Penn National, and they paid for the damaged office equipment under their Electronic Data Processing Equipment Endorsement. However, Penn National refused to pay for the damage to Bishop’s inventory, quoting the Water Exclusion which includes flood, surface water and water back-up. Bishops informed Penn National that they had purchased the Penn Pac Endorsement which specifically removed the “water that backs up from a sewer or drain” exclusion.

Penn National acknowledged the endorsement but declined coverage, asserting that the damage Bishops suffered was caused concurrently by general flooding. Penn National asserted that their policy excludes coverage for covered causes of loss if the damage is caused concurrently by an excluded cause.

appears in the Causes of Loss – Special Form. The Causes of Loss – Special form covers “risks of direct physical loss” except as excluded. Loss by sewer or drain back-up was excluded, but that exclusion was deleted by the Penn Pac Endorsement. Therefore, water back-up was a “covered cause of loss.”

Bishops filed a motion for summary judgment, and the trial court entered a judgment in favor of Bishops, finding that Bishops was entitled to receive coverage provided by the Penn Pac Endorsement up to $5,000. Bishops filed a second motion requesting that the court find that its claim arose out of a “covered cause of loss” as that term applies to the Business Income (and Extra Expense) Coverage Form, and therefore they should be reimbursed up to $600,000 for their business interruption loss. The court denied this motion.

Y’all take care!

COMMITMENT A PROMISE WE DON’T TAKE LIGHTLY

“Volunteerism is a rewarding commitment. This same feeling of gratification comes from my 16-year career in the insurance industry, working with experienced managers and underwriters and assisting our agents in being successful.”

On appeal, the Superior Court of Pennsylvania concluded that the trial court ruled correctly in awarding coverage for Bishops in the amount of $5,000 for its inventory, but erred in failing to award further coverage for “extra expenses.” In their ruling the Superior Court stated, “Given our determination that the concurrent cause language is not enforceable to exclude coverage of the loss Bishops sustained, our inquiry shifts to the extent of coverage available to Bishops under both the Penn Pac Endorsement and the Business Income (and Extra Expense) Coverage Form.”

Chuck Craycraft Branch Manager in Westerville, Ohio—and Habitat for Humanity volunteer Connect with Chuck on LinkedIn!

Bishops argued that other forms of loss (i.e., business interruption) are eligible for coverage since the Penn Pac Endorsement removed the backup exclusion. The court stated that the Business Income (and Extra Expense) Coverage form does not define “covered cause of loss,” but instead incorporates the definition that

Managing General Agency Since 1920 Property/Casualty t Professional Liability t Surety Commercial Transportation t Personal Lines t Premium Finance

800.388.8178

COMMITMENT A PROMISE WE DON’T TAKE LIGHTLY

Chuck Craycraft Branch Manager in Westerville, Ohio—and Habitat for Humanity volunteer Connect with Chuck on LinkedIn!

Managing General Agency Since 1920 Property/Casualty t Professional Liability t Surety Commercial Transportation t Personal Lines t Premium Finance

800.388.8178

[ 11 ]

“Concurrent cause” – one cause covered, one cause excluded – we’re not going to pay. That argument doesn’t appear to work.

jmwilson.com

ASSOCIATION AT WORK

On cloud nine 9 reasons for IA&B membersâ&#x20AC;&#x2122; good cheer

Independent agents face daily challenges: from meeting the (often dueling) expectations of clients, carriers and regulators, to managing a book of business and an office. So itâ&#x20AC;&#x2122;s no surprise that they could use someone in their corner. Enter IA&B.

Primary Agent | December 2011

ear-end is a time for retrospection, so on the following pages IA&B looks back at 2011 and highlights nine of the many ways the organization responded to members’ needs.

Certificates of insurance That banging sound? It might just be a producer slamming his head against the wall, a common (and warranted) response to certificates of insurance frustrations. Producers often are pulled between client and third-party onerous requests on one side and regulatory and E&O constraints on the other. Mounting pressure on agents led IA&B to maintain certificates as a priority issue in 2011.

In Maryland, IA&B successfully lobbied for passage of a law that made it illegal for third parties to request certificate changes. Work will continue there in 2012. In Pennsylvania, IA&B pushed for preparation of a similar bill through ongoing stakeholder meetings. And, in Delaware, staff alerted the Department of Insurance to the issue through communications and meetings. IA&B will continue advocating on behalf of producers next year. In the meantime, members can read more about the issue and access association resources via the links below.

Staff training can cause a trifecta of dread…. IA&B responded in

Read more: Delaware www.iabgroup.com/de/certificates Maryland www.iabgroup.com/md/certificates Pennsylvania www.iabgroup.com/pa/certificates

2011 with the launch of on-demand training

On-demand training For agency principals, staff training can cause a trifecta of dread: expense, time and inaccessibility. IA&B responded in 2011 with the launch of on-demand training — training that allows agency staff to earn CE credit while remaining accessible to clients and eliminating travel costs and time. The new program fully integrates audio and video to mimic an actual classroom, even allowing for questions of the instructor. Participants can access their seminar anytime and anywhere with an Internet connection, and subject matter is organized into chapters for easy stopping and restarting. Courses already in the queue: ◗ “Understanding the National Flood Insurance Program:” Taught by nationally recognized flood expert Rita Hollada, the course explains how to

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ASSOCIATION AT WORK

best protect clients and avoid E&O exposure. It is approved for three CE credits in Delaware, Maryland and Pennsylvania. ◗ “E&O and Ethical Behavior:” Perennial seminar favorite Jerry Milton teaches this course on the ethical practices that build relationships and keep lawsuits at bay. The course is approved for three CE credits in Maryland and Pennsylvania; CE approval in Delaware was pending as this issue of Primary Agent went to print. In addition, Utica policyholders receive loss control credit for course completion.

The organization followed up in October by dedicating its annual executive management conference to the topic. Nationally recognized consultants presented the gamut of management: from transferring producers into relationship managers and understanding the asset protection model of relationship selling, to managing in a way that connects motivations and rewards. Participants left with realistic strategies for building an effective team. What’s more, IA&B continues to enhance its related memberresource offerings. Highlights include the Producer Agreement Toolkit and HR Solution.

Read more: www.iabgroup.com/disaster

MUTUAL BENEFIT GROUP Huntingdon, Pennsylvania www.mutualbenefitgroup.com

Mettle you can count on. You don’t just wear it; you earn it.. t/carrier “MBG is committed to strong agent/carrier e fact relationships. That’s reflected in the that more than half of our agents have ears. been associated with us for 5-20 years. 2 01 0 And it showed in the results of the 2010 Company Satisfaction Survey. We were the #1 personal lines carrier most likely to be recommended to peers as a good company, and we were the #1 commercial lines carrier er among the top three when it comess to providing a consistent, stable market.” - Todd Heisey, ey, Senior Marketing Representative ve

Start with MBG, and you’ll finish with a winner.

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2011-2012 IA&B Leadership IA&B Service Group Chair Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P Francis Hall Insurance Services West Chester, Pa. IA&B Service Group Vice Chair Normal F. Basso, CPCU E.K. McConkey & Co. Inc. York, Pa.

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P

Norman F. Basso, CPCU

Chair of Board Francis Hall Insurance Services West Chester, Pa.

Vice Chair of the Board E.K. McConkey & Co. Inc. York, Pa.

IA&B Service Group Immediate Past Chair David Rosenkilde ABCO/ICS Insurance Services Inc. Reisterstown, Md. Delaware Association of IA&B Chair Diana M. Hornung-Hanby, ACSR Thomas J. Hornung & Associates Wilmington, Del. Delaware Association of IA&B Vice Chair Joyce M. Bailey, CIC, CRM, CPIW AAA Mid Atlantic Newark, Del.

David Rosenkilde, CIC

Joyce M. Bailey, CIC, CRM, CPIW

Henry “Butch” Bradley Jr.

Immediate Past Chair of the Board ABCO/ICS Insurance Services Inc. Reisterstown, Md.

AAA Mid Atlantic Newark, Del.

Bradley Atlantic LLC Forest Hill, Md.

Timothy P. Burris

N. Lee Dotson, CIC, AAI

John L. Frankenfield

Sausman Insurance Agency Mifflintown, Pa.

Bellevue Insurance Services Wilmington, Del.

Franconia Insurance & Financial Services Telford, Pa.

G. Greg Gunn, CIC

John B. Hollister

Diana M. Hornung-Hanby, ACSR

Gunn-Mowery LLC Lemoyne, Pa.

Rodgers Olver Polley Inc. Milford, Pa.

Thomas J. Hornung & Associates Wilmington, Del.

IA&B of Maryland Chair Henry “Butch” Bradley Jr. Bradley Atlantic LLC Forest Hill, Md. IA&B of Maryland Vice Chair Robert S. Klinger, LUTCF Klinger and Associates Inc. Germantown, Md. IA&B of Pennsylvania Chair G. Greg Gunn, CIC Gunn-Mowery LLC Lemoyne, Pa. IA&B of Pennsylvania Vice Chair Michael F. McGroarty Sr. McGroarty & Bradburn Insurance Inc. Pittsburgh, Pa. National PIA Director – Md. Robert S. Klinger, LUTCF Klinger and Associates Inc. Germantown, Md. IIABA National Director – Pa. Scott C. Rogers, CPIA The Glatfelter Agency York, Pa. IIABA National Director – Del. Lawrence A. Wilson, CIC, CPIA, CPUC, ARM S.T. Good Insurance New Castle, Del.

Robert S. Klinger, LUTCF

Douglas A. Loesel, CPCU

C.W. Howard Agency Inc. Butler, Pa.

Klinger and Associates Inc. Germantown, Md.

Loesel-Schaaf Insurance Agency Inc. Erie, Pa.

Michael F. McGroarty Sr.

Ann Gallen Moll, CIC

April E. Ressler, CIC

McGroarty & Bradburn Insurance, Inc. Pittsburgh, Pa.

Gallen Insurance Inc. Reading, Pa.

Teeter Insurance Agency Inc. Altoona, Pa.

Scott C. Rogers, CPIA

David B. Wasson Sr., CIC

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM

The Glatfelter Agency York, Pa.

Wasson Insurance Agency Inc. State College, Pa.

S.T. Good Insurance New Castle, Del.

2011 â&#x20AC;&#x201C; 2012 Board of Directors

Jocelyn R. Howard-Sinopoli, CIC, CISR

IA&B Financial Reports IA&B remains in good financial health with strong reserves; continues to provide and expand programs, products and services to meet membersâ&#x20AC;&#x2122; needs; and is poised for future growth. The accountantsâ&#x20AC;&#x2122; review for the fiscal year, which ended March 31, is on file at IA&B headquarters. These statements are a summary of that report. Combined member equity increased to $6.345 million, on $8.629 million of total assets and $2.695 million of total liabilities. Combined net operating loss was $(9) thousand on total revenues of $5.586 million and total expenses of $5.595 million. The combined change in net assets was $110 thousand.

[ 20 ]

Glance at Events D E C E M B E R

C A L E N D A R

Date

Topic

Location

Dec. 5-7

James K. Ruble Graduate Seminar

Lancaster, Pa.

Dec. 6

E&O Best Practices Seminar

Erie, Pa.

Dec. 6-8

P&C Licensing Study Course

Philadelphia, Pa.

Dec. 7

CISR—Personal Residential Course

Pittsburgh, Pa.

Dec. 8

Dynamics of Service

Mechanicsburg, Pa.

Dec. 13

CISR—Personal Residential Course

Lehigh Valley, Pa.

Dec. 14

CISR—Personal Residential Course

Philadelphia, Pa.

Dec. 15

CISR—Agency Operations Course

Dover, Del.

Ruble Graduate Seminars condensed to two days for 2012 James K. Ruble Graduate Seminar attendees will enjoy substantial travel and lodging savings and reduced time out of the office next year. The Society of CIC Board of Governors announced a new condensed two-day format for James K. Ruble Graduate Seminars, beginning in 2012. The new format will maintain the same high quality standards and comprehensive curriculum as the two-and-a-half-day format. Graduate Seminars are advanced, specialized education programs for designated CICs and CRMs. Each seminar enhances designees’ level of knowledge about an advanced topic, taking them beyond the information shared in the Institutes. IA&B’s James K. Ruble Graduate Seminars offer a variety of agendas based on designee input for each date and location, allowing participants to tailor their educational experience.

James K. Ruble Graduate Seminars March 12-13 Ellicott City, Md. April 23-24 Pittsburgh, Pa. May 16-17 Philadelphia, Pa. July 11-12 Annapolis, Md. July 18-19 Lehigh Valley, Pa. August 8-9 Hershey, Pa. August 13-14 Ellicott City, Md. October 1-2 Ocean City, Md. November 14-15 Lancaster, Pa. To register online, go to: www.iabgroup.com/ruble.

[ 21 ]

Platinum Profile Insurance Agents & Brokers proudly recognizes Ohio Casualty™ as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

FEATURED PARTNER Ohio Casualty™ CHIEF EXECUTIVE OFFICER Mike Winner, President & CEO COMPANY HEADQUARTERS Fairfield, Ohio REGIONAL OFFICES Fairfield, Oh.; Lexington, Ky.; Camp Hill, Pa.; Columbia, Md. UNDERWRITING OFFICES Delaware Valley, De.; Columbia, Md.; Pittsburgh, Pa. & Camp Hill, Pa. A.M. BEST RATING “A” (Excellent) WEBSITE www.ohiocasualty-ins.com

hio Casualty is one of the eight super regional companies that comprise Liberty Mutual Agency Corporation (LMAC). The company’s market focus is small and mid-sized commercial lines. Over the past ten years, Liberty Mutual has assembled an impressive lineup of companies and products for independent agents across the country. LMAC, the largest business unit of Liberty Mutual, writes business exclusively through independent agents and brokers. Agents positioning for the future are developing strong relationships with the organization to share in the company’s growth and success. LMAC has a unique business model in the industry. The Regional Companies provide responsive frontline service to agents as they work together closely in local markets while the LMAC national backbone provides the back office support such as systems, finance, product development and specialty claim expertise bringing the benefits of national scale to regional companies.

As a result of these and other actions, Liberty Mutual consistently ranks in the top 100 on the Fortune 500 list of largest U.S. corporations based on revenue. For agents in Pennsylvania, Delaware, and Maryland, a contract with Ohio Casualty is also the gateway to connections with Liberty Agency UnderwritersTM, Liberty International UnderwritersTM, Liberty Mutual Global, and Liberty SuretyFirstTM. These specialized divisions write monoline Umbrella and Excess Casualty, Ocean Marine, Bonds, and other specialty products. Ohio Casualty also has dedicated underwriting units for specialty Inland Marine, Schools and Farms. While Liberty Mutual is a relative new-comer to the Independent Agency system, the company has taken strong positions to defend the independent agency compensation model.

Ohio Casualty works hard to provide the tools Independent Agents need to be successful. We feel so strongly about our agency-focused culture that we trademarked the tag line Vested in TM Our Agents’ Success to show our dedication and commitment to our agent partners.

Listed below are those companies that strongly support the independent agency system and Insurance Agents & Brokers. Thank you for your continued sponsorship.

WHAT IS IA&B PARTNERS? The IA&B Partners program gives company and allied businesses the opportunity to demonstrate their commitment of support to independent agents and receive maximum market exposure. As an IA&B Partner, you will also realize the benefits of IA&B membership to help you succeed in the insurance industry.

DO YOU SEE YOUR NAME?

PLATINUM LEVEL

BRONZE LEVEL

ACUITY Berkley Mid-Atlantic Group Donegal Insurance Group Erie Insurance Group Harleysville Insurance Highmark Casualty Insurance Co Insurance Agents & Brokers Service Group Inc

Aegis Security Insurance Co

MMG Insurance Company Millers Mutual Group Millville Mutual Insurance Co Mutual Benefit Group Ohio Casualty Penn National Insurance Selective Swiss Re The Main Street America Group Utica National Insurance Group

Encompass Insurance

GOLD LEVEL

choose the sponsorship

Progressive

package that matches your

Contact the Member Sales Center at (800) 998-9644, (717) 795-9100 or visit us online at www.iabgroup.com to get started.

AmWINS Program Underwriters Inc Auto-Owners Insurance Company Briar Creek Mutual Insurance Company Builders Insurance Group Chubb Group of Insurance Companies Countryway Insurance Company First General Services Foremost Insurance Group Goodville Mutual Casualty Company Guard Insurance Group Harford Mutual Insurance Co Hanover Fire & Casualty Insurance Company Insurance Alliance of Central PA Inc Insurance Placement Facility of PA Keystone Insurers Group Inc Lebanon Valley Insurance Company

To become an IA&B Partner,

commitment of support.

Agency Insurance Company

Mercer Insurance Group Merchants Insurance Group Mercury Casualty

SILVER LEVEL

Penn PRIME Municipal Insurance

Access Insurance Company Allied Insurance American Mining Insurance Co Cumberland Insurance Group Frederick Mutual Insurance Co Juniata Mutual Insurance Co PSBA Insurance Trust The Philadelphia Contributionship Westfield Insurance

Rockwood Casualty Insurance

Reamstown Mutual Insurance Company State Auto Mutual Insurance Company TAPCO Underwriters Inc The Brethren Mutual Insurance Company The Motorists Insurance Group The Mutual Service Office Inc Travelers Tuscarora Wayne Insurance Company Zenith Insurance Primary Agent December 2011

Primary Agent | December 2011

Technology U P DATE

SALES AND SERVICING STRATEGIES TO GROW YOUR AGENCY’S BUSINESS

Consumer reasons for buying direct or through an agent

JEFF YATES Jeff Yates is executive director of the Agents Council for Technology (ACT), which is part of the Independent Insurance Agents & Brokers of America. Jeff can be reached at jeff.yates@iiaba.net. ACT’s website is iiaba.net/act. This article reflects the views of the author and should not be construed as an official statement by ACT.

Recent consumer studies provide several insights that can be helpful to independent agencies to attract new personal lines business, as well as to retain current clients. In my article last month, I cited some of the findings in these studies to outline how independent agents can use the technology tools now available to them to attract online auto insurance

shoppers and offer them a better value proposition than the direct carriers.1 Below, I drill down further into the comScore and J.D. Power & Associates research2 to ferret out additional trends in automobile and property insurance consumer preferences and behavior that independent agencies can use to gain competitive advantage.

What struck me about the comScore research was that the reasons given by most consumers for buying from an online carrier rather than through an agent were not very compelling and could be effectively overcome by agencies if they were to use available online tools and were able to get across their “value add” message to consumers while they are in the shopping process.3 The top five reasons given by consumers for not using a local agent were: ◗ I found it more convenient to use a website or 24-hour tollfree number (29%).

1 “The Independent Agents’ Opportunity to Take Back Personal Lines,” www.iiaba.net/act . The article outlines how independent agents can give consumers a more efficient shopping experience than the direct carriers, where they can get quotes from multiple carriers in one stop. And independent agents can offer prospects the value add of personalized professional counsel and debunk the myth reinforced by massive advertising campaigns that auto insurance is a commodity and that the coverage and limits bought are not important. 2 comScore 2011 Auto Insurance Shopping Report (May 2011) & 2011 Auto Insurance Servicing Report (May 2011); comScore 2010 Online Property Insurance Report (November 2010); J.D. Power & Associates 2011 U.S. Insurance Shopping Study (May 2011); J.D. Power & Associates 2011 National Auto Insurance Study, Management Discussion (June 2011). 3 See “The independent Agents’ Opportunity to Take Back Personal Lines” for more details on how agents might do this. www.iiaba.net/act

◗ It was faster to purchase online or via a toll-free number (28%). ◗ I got a quote online and decided to purchase online (26%). ◗ I prefer to use a website or toll-free number (20%). ◗ It was cheaper to purchase online or via a toll-free number (20%).4 In contrast, the top reason given by consumers who buy through an agent would be difficult for the direct carriers to match: ◗ I like having a real person who I can visit with or call (39%). Followed by: ◗ I have always used a local agent (31%). ◗ The local agent quoted me the best price (28%). ◗ I wanted a local agent from one company to help me with all my insurance needs (25%). ◗ Recommended by a family/ friend (23%).5 Based upon this research, as well as comScore’s additional finding that 81 percent of the consumers who use an agent find their agent to be valuable,6 it is no wonder consumers insuring through an agent are more loyal than consumers who use a direct carrier. (Seventy percent of online purchasers are seriously considering changing their insurance company, compared to 50 percent of those with a local agent.7) While most agency clients value the relationship they have with their agent, their loyalty goes only so far. Client

shopping has hit unprecedented levels, even for agency clients, as every independent agent knows. In addition, as consumers get more comfortable doing business online in other areas, they increasingly are willing to try new distribution methods for insurance as well. For example, in 2011, the percentage of agency clients “not likely” to consider using a distribution method other than a local agent (online, tollfree number) was down to 25 percent (versus being “likely” or “neutral”); the “not likely” percentage having been 34 percent in 2009.8 Communicate proactively and regularly with clients A major way for agents to keep clients loyal to them is to communicate with them regularly. When agents interact with their clients often (monthly) or even rarely (a few times a year), the percentage of clients “not likely” to consider an alternate distribution method rises to 26-27 percent, whereas if the agent never contacts the client, the percentage “not likely” to consider another distribution method drops to 17 percent.9 Similarly, J.D. Power & Associates found in its research that day-to-day policy service interactions “most influence a customer’s overall satisfaction with their insurer, and hence their likelihood to both renew their policy and recommend their insurer to others.”10 One would expect this finding to apply equally to the client’s satisfaction with the agent. Agencies should use each proactive outreach to clients and each service interaction to communicate and live the agency’s “brand” to reinforce it with

their clients. Every agency employee should be trained to clearly articulate the agency’s special “value add” succinctly and to understand what “living” the brand entails. Agencies will strengthen their client relationships in this way, as well as counter the direct carriers’ efforts to neutralize the agent’s value proposition. The direct carriers understand that many consumers want to deal with a real person in certain situations. This is why GEICO has appointed employee agents in various areas and Esurance has introduced an advertising campaign touting the availability of a person when wanted to supplement the online options it offers. Offer the communications options clients want One of the major findings of the research is that clients are now in the driver’s seat and they increasingly expect their agent and carrier to be able to interact with them via the channels they use in everyday life.11 We have seen that this means that direct carriers offer some option for consumers to deal with a “real person.” For agencies, it means supplementing their personal client interactions via phone and in person with increasingly robust online options including e-mail, website portals and social media. Most agency clients still want to talk with the agent when the issue involves counseling, such as policy coverage, obtaining a quote, adding or changing drivers or cars, price changes and billing inquiries. However, there are certain routine transactions where most agency customers’ first preference would be do to do them online, such as

4 comScore 2011 Auto Insurance Shopping Report, p. 46.

8 comScore 2011 Auto Insurance Shopping Report, pp. 44-45.

5 Op. cit., p. 43.

9 comScore 2011 Auto Insurance Servicing Report, p. 12.

6 comScore 2011 Auto Insurance Servicing Report, p. 7.

10 J.D. Power & Associates 2011 National Auto Insurance Study, p. 1.

7 comScore 2011 Auto Insurance Shopping Report, p. 7-8.

11 J.D. Power & Associates 2011 National Auto Insurance Study, p. 4.

[ 25 ]

TECHNOLOGY UPDATE

to make a payment (45 percent online vs. 31 percent talk with agency), update contact information (43 percent online vs. 36 percent talk with agency), order insurance cards (41 percent online vs. 37 percent talk with agency); and with verify payment receipt, agency customers’ top two preferences do not even include talking with the agency (33 percent online vs. 30 percent by email).12 It is important for technology providers, carriers and agencies to work together to respond to these changing client preferences by developing agency website portals that provide customers with these online servicing capabilities. Enabling clients to make payments to the company through the agency portal should be the first priority, given that online payments constitute 44 percent of overall consumer online servicing visits.13 As agencies increasingly offer online quoting and make sales by phone, it is also time for them to begin to offer their clients the convenience of using e-signature tools for required applications and other signed documents. Currently, 87 percent of all online auto insurance purchasers using other distribution systems have been able to sign all required documents electronically.14

Growing agency client interest in other online communications E-mail is second only to calling as agency clients’ preferred method of contact to the agency, beating out visits to the office. Seventy-seven percent of agency customers send or receive e-mails with the agency. As might be expected, greater percentages of younger clients (18-34 years) use e-mail as their first method of contact with the agency.15 While the trend to use social media for business purposes is still emerging, 20 percent of 18 to 24 year olds would have an interest in interacting with their agents via a social media outlet like Facebook or Twitter. This level of interest contrasts with that of agency clients overall, where 86 percent express not being interested in interacting with their agents in a social media context.16 One wonders, however, if this overall interest level will change when consumers start to use social media more regularly in their daily lives and begin to see how valuable consumer information can be conveyed to them by their providers.

Another emerging trend is for consumers to use their mobile devices to access business accounts. As of 2011, 12 percent of consumers with the mobile capability to do so have accessed an insurance site via their mobile browser, while 10 percent accessed an insurance site via an app. Only 9 percent of insurance consumers have used text messaging to communicate regarding their insurance. With regard to those who have used a mobile device for their insurance, the top functions used in descending order have been to pay a bill; access the insurance policy; text or chat with an agent; find the nearest insurance agent or office; update personal information; find useful tips or tools; find the agent’s contact info; receive an insurance quote; change coverage, limits or deductibles; receive policy alerts; track a current claim; and report an accident.17 Additional strategies to grow personal lines The consumer research points to additional ways in which independent agents can attract online shoppers and take business from the direct carriers. Consider these possibilities: 1. Sell convenience as part of your agency’s value proposition. As discussed above, most of the shoppers that buy from a direct carrier do so because they believe the online approach is more convenient, when in fact independent agents can shop

12 Op. cit., p. 3.

16 Op. cit., p. 9.

13 comScore 2011 Auto Insurance Servicing Report, p. 35.

17 Op. cit., pp. 33-34.

14 Op. cit., p. 13.

18 comScore 2010 Online Property Insurance Report, pp. 7 & 21.

15 Op. cit., pp. 8 & 35.

[ 26 ]

Primary Agent | December 2011

multiple carriers and take care of servicing needs with a simple phone call or comparative rating portal, along with providing professional guidance at the same time. 2. Bundle auto insurance with a quality property insurance product and provide the discount. Many direct carriers cannot offer consumers comparable property products. Also, 25 percent of nonbundling consumers said they did not even think about using the same company for multiple policies. In addition, 52 percent of non-bundlers said they would consider switching to the same company if they received a bundling discount.18 3. Sell renters insurance. Twentyseven percent of consumers rent rather than buy a home and that percentage is likely to rise in the aftermath of this tough economy. Many renters are currently uninsured, since they represent only 14 percent of those with property insurance.19 4. Understand that buying a new or used car triggers a lot of shopping by consumers. Next to looking for a lower price, buying a new or used vehicle is the most common reason for shopping, and 33 percent of vehicle purchasers shopped their insurance and chose a new insurer. Fifty-three percent of

these shoppers who switched carriers were agency customers (and may or may not have stayed with the agent).20 5. Offer clients the option for pay as you drive insurance, if you have it available. Of the 25 percent of consumers who have heard of this type of insurance, 55 percent said they would “definitely” or “probably” be interested in purchasing it.21 6. Point out the coverage enhancements and optional coverages that your various carriers offer and ascertain which are most important to your clients. This reinforces the benefits of having a professional advisor in your client’s mind and debunks the myth conveyed in most direct carrier advertising that personal lines policies are commodities, where only price and convenience matters. Creating a strong online presence The consumer research discussed above provides valuable guidance on how independent agencies can reshape and refocus their personal lines operations to respond to changing customer expectations and preferences. The challenge remains, of course, that the independent agency has to be able to get the attention of the increasingly online consumer as a first step, in order

19 Op. cit., pp. 4 & 12. 20 comScore 2011 Auto Insurance Shopping Report, p. 12. 21 Op. cit., pp. 39-40.

[ 27 ]

to convey its value proposition and the better experience it can provide. I believe independent agents finally have the technology tools available to them to create a strong online presence, particularly in their local communities, along with the needed tools to process personal lines business very efficiently. As I discussed in last month’s article, implementing Real Time, download and going “paperless” can greatly enhance the agency’s efficiency and operations. These technology tools create the time needed for agency employees to reach out to clients to bolster relationships, protect renewals, cross sell and attract new prospects. Finally, agencies now have the tools available to enhance online marketing and service — more effective websites, agent portals for consumers to obtain online comparative rates, free local search and social media sites. Editor’s note: For more on this topic, including the first article in this series (“The independent agents’ opportunity to take back personal lines”), visit www.iabgroup.com and select “Technology,” then “Other Resources.” The Web page also includes links to other articles about building effective websites, taking advantage of local search tools and using social media.

Classified ADVERTISEMENTS

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If you would like to place a Classified Advertisement, simply fax your ad on company letterhead to (717) 795-8347, and we will take care of the rest.

Ad Index Brokers Surplus Agency . . . . . . . . . . . . . . . .3, 15 EMC Insurance Companies . . . . . . . . . . . . . . . .1 Guard Insurance Group . . . . . . . . . . . . . . . . . . .3 Hanover Fire & Casualty . . . . . . . . . . . . . . . . . .15 Harleysville Insurance . . . . . . . . . . . . . . . . . . .IFC IA&B AgentPAC . . . . . . . . . . . . . . . . . . . . . . . .IBC IA&B Partners Program . . . . . . . . . . . . . . . . . . .23 Insurance Innovators Inc . . . . . . . . . . . . . . . . .15 Interstate Insurance Mngmnt. . . . . . . . . . . . .OBC JM Wilson . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 MMG Insurance Company . . . . . . . . . . . . . . . . .3 Mutual Benefit Group . . . . . . . . . . . . . . . . . . . .17 Preferred Property Program . . . . . . . . . . . . . .IBC [ 28 ]

Physician, heal thyself A la “Little Shop of Horrors,” Dr. Robert Berry was an anesthesiologist with a drug problem. While working at one center, his partners questioned his unaccounted-for Demerol withdraw and eventually fired him after he admitted to taking valium and passing out while on duty. Inexplicably, one of those colleagues, Dr. William Preau, wrote a glowing letter of recommendation for Berry. Berry landed a new gig, and within no time caused a patient to suffer brain damage under his — admittedly drug-induced — care. And so the cycle of lawsuits began: The patient’s family sued Berry and his new employer. His employer and its insurer sued Preau. And, when Preau lost, he sued his general liability insurer, St. Paul Fire and Marine Insurance Company, for refusing to cover his payments. St. Paul pointed to its policy’s intended or expected bodily injury exclusion. But the court sided with the good doctor, stating that St. Paul failed to prove that Preau “set out to cause an injury” by penning the letter of recommendation. Source: Preau v. St. Paul Fire and Marine Insurance Co., U.S. District Court, Eastern District of Louisiana ----------------------------------------------------------------———————------The Last & Least column is dedicated to the industry’s oddities — from creative claims and kooky coverages, to (tasteful) jokes and strange stories. Submit yours to iab@iabgroup.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.

SPEAK UP! YOUR JOB DEPENDS ON IT! SUPPORT AGENTPAC — your voice IN THE STATE CAPITOL. AgentPAC is your state political action committee and the collective voice of independent agents in the state capitol. Issues that affect your job are at stake, and backing legislators aligned with IA&B’s government affairs agenda depends on your support. Watch for Grassroots Action Alerts prompting you to contact your legislators on specific issues, and consider donating to AgentPAC at a level that speaks (loudly) to policymakers that support our cause.

LEARN MORE AND CONTRIBUTE ONLINE AT IABGROUP.COM/AGENTPAC.

Your voice in the state capitol.

PEACE ON EARTH

In Pennsylvania, Delaware, Indiana, Kentucky, Maryland, Ohio, Virginia & West Virginia 2307 Menoher Boulevard • Johnstown, PA 15905 814-255-7878 • 1-800-452-0297 • Fax: 814-255-6010 www.interstate-insurance.com

PEACE ON EARTH