Delaware Primary Agent - November 2017

PR

EM

IU

M F Pa I NA ge NC 20 I N G

10

1

NOVEMBER 2017 | DELAWARE

SOLUTIONS TO COMMON

COVERAGE GAPS

AGENTS’ E&O INSIGHTS MARIJUANA & WORKERS’ COMP Q&A: ONLINE PRESENCE

THERE’S more FOR YOU AT MILLERS.

SM

At Millers, we choose to be part of the affordable housing solution.

Finding an insurance company that embraces the affordable housing market can be difficult because most do not understand it or appreciate its value to strengthening communities.

This often makes it difficult to obtain fair coverage and rates.

A focus on insuring affordable housing.

We maintain a keen awareness of the industry and provide creative solutions through knowledgeable underwriting, affordable pricing, swift claim resolutions, and courteous service.

To learn more, contact one of our Underwriting Leaders: Scott Billett at 717-237-7202 or sbillett@millersinsurance.com Derek Shaffer at 717-237-7244 or dshaffer@millersinsurance.com

800.745.4555 millersinsurance.com Rated A- (Excellent) by A.M. Best Rated A Prime (Unsurpassed) with Demotech Š2017, Millers Mutual Group, Harrisburg, PA

B US IN E S S OW N ER S PO L I C Y | C O MMER C I A L AUT O | COMME RCI AL UMBRE L L A | L E SSORS RI SK | BUI L DE RS RISK

IN THIS

12

SOLUTIONS FOR COMMON COVERAGE GAPS Follow along as we look at exposures that aren’t new but still confuse agents, even those who spend most days selling standard policies.

22

SHOW OFF A LITTLE TO DRAW IN CUSTOMERS Learn how to differentiate yourself in a noisy world with a meaningful digital presence.

IN EVERY ISSUE 2 3 4 6 8 11 28 32 32 32

Chairman of the Board’s Message Ask Our Experts Preventing Errors & Omissions Coverage Corner State News IA&B Partners Technology Update Advertiser’s Index My Events Classified Ads

Periodical postage paid at Mechanicsburg, Pa. and at additional mailing offices.

Postmaster: Send address changes to Insurance Agents & Brokers, 5050 Ritter Road, Mechanicsburg, PA 17055.

Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2017-11, is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

12

Copyright 2017. 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 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. 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 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.

1

CHAIRMAN OF THE BOARD’S MESSAGE

INSURANCE AGENTS & BROKERS

WORKING SMARTER

5050 Ritter Road | Mechanicsburg, PA 17055 800-998-9644 | IABforME.com

OFFICERS

T

Chair of the Board

ime seems to pass more quickly in the final weeks of the year. Every November I notice a shift in the pace. There’s no doubt that our mounting to-do lists, competing priorities and endless commitments are the culprits.

From holiday preparations and travel plans at home, to year-end financials and Jan. 1 renewals at the office, the crunch is on to find enough hours in the day.

I’d love to encourage you to slow down. To be present. To simply prioritize.

But that’s not my reality, and I doubt that it’s yours either. We will remain strapped for time. That pace is part of what makes us successful insurance professionals, and it comes with the territory of operating a small business.

Instead, I encourage you to rely on your agents’ association and take full advantage of IA&B’s resources. Whether you have regulatory compliance questions or HR concerns, whether you need CE credit or legal advice, look to IA&B for support. They are the best and are always willing to assist!

Bottom line: We can’t add more hours to the day, but we can work smarter during the ones we have. And relying on the resources available to us is one way to do that. Good luck out there! n

John B. Hollister

Vice Chair of the Board

Craig S. Mader

Immediate Past Chair of the Board

Michael F. McGroarty Sr.

MEMBERS Emory Stephen Burnett, CIC, ARM Wilmington, Del.

Richard F. Corroon, CPCU Wilmington, Del.

Michael P. Ertel Sr.+ Columbia, Md.

Ashley M. Fitzsimmons, CISR Forest City, Pa.

G. Greg Gunn, CIC* Lemoyne, Pa.

Bryan C. Hanes, JD Hagerstown, Md.

David C. King Lancaster, Pa.

Lisa A. Leach Goth, CIC New Bethlehem, Pa.

Elizabeth H. Martin, CIC Millersville, Pa.

Mark J. Monroe

West Chester, Pa.

All the best,

Joseph R. Pastor, CPCU, AAI Oil City, Pa.

Richard M. Rankin, CIC Lancaster, Pa.

April E. Ressler, CIC

John Hollister Chairman of the Board

Altoona, Pa.

D. Bradley Rosenkilde Jr. Hunt Valley, Md.

Tara S. Silfies, CPCU Bethlehem, Pa.

Glenn R. Strachan

Ft. Washington, Md.

Bryan S. Willey Dover, Del.

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** Newark, Del.

J. Marshall Wolff, CIC, CPCU Easton, Pa.

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

2

NOVEMBER 2017

Ask Our Experts Claire Pantaloni, our advocacy senior director, provided this answer.

Question: With lawmakers debating gun liability insurance, a customer is asking about his personal liability and existing coverage in connection with his gun ownership. What coverage, if any, does he have?

Answer:

T

here’s a tremendous gap in understanding between the general public and the insurance industry on liability, intentional and criminal acts, and insurability. It’s important to differentiate the exposures and educate your customers on the fact that not everything may be insurable – particularly in the context of “mandatory gun liability” proposals.

HOW DO HO POLICIES GENERALLY ADDRESS GUN LIABILITY? Most policyholders don’t realize that the homeowners’ policy covers many types of liability claims that can include gunrelated accidents. “Accident,” here, is key.

Under a traditional ISO HO-3 form* (HO 00 03 05 11), there is no specific gun-related exclusion. There is, however, an “Expected or intended injury” exclusion, which itself contains an exception for “use of reasonable force by an ‘insured’ to protect persons or property.” Therefore, under the HO policy some coverage:

• would be available for the accidental firing of a gun (e.g. the gun discharging while the insured is cleaning it), and • may be available for certain selfdefense situations, if the gun firing was deemed “use of reasonable force,” something that obviously is 1) fact-specific and 2) subject to interpretation.

Keep in mind that 1) reviewing the customer’s specific policy language* is a must, as it may not include the use-ofreasonable-force exception language, and 2) coverage determination is always factspecific, but it’s particularly true here.

WHAT ABOUT INTENTIONAL FIRING? When inquiring in the context of legislative proposals, customers often are focused on the intentional firing of the gun, such as in a public setting, during an active shooter event. The ability to argue self-defense or “use of reasonable force” depends on the circumstances: Was the insured defending from a home invasion? Was he in a public setting?

Did the insured shoot an active shooter, shoot another person he confused for the shooter, or accidentally hit a bystander, etc. Producers should stay away from speculating on coverage – except maybe for the active shooter himself, who obviously is never covered.

ARE THERE OTHER OPTIONS FOR BROADENING COVERAGE? Yes, for gun owners who are concerned about liability issues, several gun organizations have developed additional insurance programs that expand coverage, mostly to provide defense costs and sometimes indemnity under broader claims of self-defense. A shooting range or a club may offer insurance. National associations such as the United States Concealed Carry Association (USCCA) or the National Rifle Association (NRA)

offer coverage options for gun owners.

These specialized policies have their own focus and their own exclusions.

Bottom line: The HO policy generally will cover accidental discharge, and in some cases, self-defense. Only specialized policies provide additional coverage, mostly targeted at defense costs in broader self-defense scenarios.

Fundamentally, issues of liability will be extremely fact-specific, and may also differ based on the state (and case law) where the incident occurs. * Even if the carrier is an ISO member, and the policy displays an ISO copyright, this does not mean that the language is identical to ISO, and you need to check the exact wording in the policy. Most ISO members are not “automatically follow,” and file their own forms with the state (either due to delayed implementation or modified language). n

Have a question? Ask our experts!

Rely on our experts – Advocacy Senior Director Claire Pantaloni, CIC, CISR and Legal Affairs Manager Don Bankus – to answer your most perplexing questions. Visit the Ask Our Experts section of IABforME.com (find the link in the website footer) to submit your question and review answers to other frequently asked questions. Or email your question to us at IAB@IABforME.com.

We look forward to hearing from you.

3

PREVENTING ERRORS & OMISSIONS

WHEN WAS THE LAST TIME YOU READ YOUR E&O POLICY?

By Curtis M. Pearsall, CPCU, AIAF, CPIA

Y

our Agents’ Errors & Omissions (E&O) policy is one of the most important coverages your agency will secure, especially if you are facing allegations of negligence. Although there are many Agents’ E&O policies in the marketplace, no two are the same.

While most agencies have this coverage, how many agency owners truly know the intricacies of the coverage’s various elements? The time to understand those intricacies is now, not when your agency

4

is hit with an E&O claim. Key areas to note include: WHAT’S COVERED Every E&O policy includes a list of professional services and activities that are covered. It is critical for agency management to review this list. It’s possible that your agency may have some exposures that are not covered by its E&O policy. Identify those exposures and determine what to do next.

NOVEMBER 2017

WHAT’S NOT COVERED AND WHERE COVERAGE IS LIMITED Every policy contains exclusions or areas where the coverage grant is limited in scope or limits. These areas should be reviewed to determine if there are areas of concern. There have been numerous situations where agencies found out, after being presented with an E&O claim, that they didn’t have the coverage they thought. However, there is not much that can be done at that point.

LIMITS AND HOW THEY WORK A crucial aspect of the coverage is the limits that are provided. Many E&O carriers are reluctant to increase policy limits mid-term, so this issue should get a tremendous amount of attention, especially at renewal time. Agency ownership should request a variety of limits to allow them to make an educated decision. There is no magical formula to determine the “right” limit for your agency. Remember, too, that the agency’s size is not a factor in the potential size of an E&O claim.

E&O limits are provided on a per-claim/aggregate basis, so it is highly suggested that your agency secures an aggregate limit that is a multiple of the per-claim limit.

THE DEDUCTIBLE Virtually every Agents’ E&O policy has a deductible, but there are different types.

Some policies only require the agency to pay the deductible if they are determined to be liable (aka a loss-only deductible), while others require the agency to share in the defense costs. Don’t wait for an E&O claim to occur to find out how your deductible works.

A “RETROACTIVE DATE” VERSUS “FULL PRIOR ACTS” Agents’ E&O policies are written on a claims-made basis. This form provides coverage for claims filed during the policy term provided that the incident occurred after the applicable “retroactive date” (aka “retro date”) noted on the policy. Therefore, for coverage to potentially apply, the date of the “error or omission” must be after this date. In other words, there is no coverage for any wrongful act that occurred prior to the retroactive date.

For the agency to have coverage for all prior wrongful acts, it should secure “full prior acts” coverage. If there is a “retro date” on the policy, the agency only has coverage, subject to other policy wording, for “errors or omissions” that occurred after the “retro date.”

SERIOUS BUSINESS The decisions you make about your errors and omissions coverage are vital.

Reading your policy will help you know whether you are protected to the degree you thought. n Curt Pearsall, CPCU, AIAF, CPIA, provided this content on behalf of Utica National Insurance Group. IA&B’s My Agency is the exclusive agent for the Utica E&O program in Delaware, Maryland and Pennsylvania. For questions regarding this article or your E&O coverage, contact IA&B at 800-998-9644 or IAB@ IABforME.com.

RELY ON ‘MY AGENCY’ WHEN IT comes to protecting the agency you worked so hard to build, there’s no better partner for your insurance needs than My Agency at IA&B. My Agency is staffed by independent agents just like you. And our team has the industry’s leading carriers, offers hands-on service to tailor coverage to your needs, and advocates for you to improve coverage and options.

We don’t just sell insurance. We provide risk management. From industryleading loss prevention to active involvement in E&O litigation that might erode your rights, nobody else has our track record.

IABforME.com/MyAgency

The material contained in this article is for informational purposes only and is not for purposes of providing legal advice.

You should contact you attorney to obtain advice with respect to any particular issue or problem.

5

COVERAGE CORNER

MARIJUANA AND WORK-RELATED INJURIES

By Jerry M. Milton, CIC

M

arijuana is legal for recreational use in eight states (California, Oregon, Washington, Alaska, Massachusetts, Colorado, Nevada and Maine) and Washington, D.C. In addition, 28 states have legalized the use of marijuana for medical purposes.

However, not all of these states have implemented their laws regarding the use of medical marijuana.

Although marijuana has been decriminalized for medical use in these 28 states, could physicians be

6

at risk for prescribing marijuana due to its classification as a schedule I controlled substance under the Federal Controlled Substances Act? That is one of many questions that need to be resolved. According to the U.S. Department of Justice Drug Enforcement Administration (DEA), marijuana has no medical value.

Are insurers and employers obligated to provide payment for marijuana that has been recommended for treatment?

The answer to this question, like so

NOVEMBER 2017

many, is unsettled. This issue was recently addressed by the New Mexico Court of Appeals. The court ruled that an injured worker’s request for medical marijuana was compensable. Is this the tip of the iceberg?

The use of marijuana as a legitimate medical service has by no means been determined. The National Council for Compensation Insurance (NCCI) has reported that it is now receiving requests to cover the costs of medical marijuana, and they are

monitoring the state decisions. Whether marijuana should be considered a legitimate medical treatment will be determined by the various states workers’ compensation boards and courts.

If marijuana is prescribed for medical use, there is no formal way to bill for marijuana, there is no usual and customary charge, there is no fee schedule, and there are no pricing guidelines.

The Centers for Medicare and Medicaid Services (CMS) will not review the costs of marijuana when considering Medicare Set-Asides (MSA) since it is federally banned. The MSA providers are starting to include the costs in their calculations, but CMS still considers it a non-Medicare expense.

Many states have provisions in their workers’ compensation statutes that either reduce or exclude workers’ compensation benefits if the injured worker is under the influence of alcohol or drugs at the time of the injury. In most cases the employer must prove the injured worker was impaired and the impairment was the proximate cause of the injury in order for the employer to avoid workers’ compensation liability. Although marijuana can stay in a person’s system for up to 30 days, unlike alcohol, it is difficult to prove impairment.

One final issue. Under the Americans with Disabilities Act (ADA), an employee who is a medical marijuana user could possibly argue for an accommodation based on the employee’s impairment due to the use of the marijuana. Some states have laws stating that if an employee who uses medical marijuana can’t fulfill any or all of the job responsibilities, the employer is not required to provide accommodation. Employers will need to work with their human resources department and legal counsel to ensure that the job descriptions and accommodations satisfy the ADA’s requirements.

The problems never end.

Y’all take care! n

Jerry M. Milton, CIC, teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He also serves as our education consultant, working with our CISR, CIC and continuing education programs. Catch him at one of our upcoming seminars: IABforME.com/MyTraining.

HOW TO HANDLE AN EMPLOYEE’S ADDICTION THE USE and abuse of alcohol and drugs, whether illegal or not, can create a myriad of problems – and trigger an average of $3,500 in workplace costs annually – for even a small employer.

POLICIES It’s incumbent to specifically define your alcohol, drug and substance abuse policies and procedures in an employee handbook. The handbook should also encourage employees to seek professional help should they feel they have a problem, as well as inform them that the agency will work with them to meet their objectives.

PROTECTIONS The Family Medical Leave Act and the Americans with Disabilities Act may provide workplace protections because alcoholism and drug addiction can be considered a disease or disability. Therefore, the statutes may preclude the termination of an “at will” employee and require employers to make reasonable accommodations (e.g. to attend a rehab program).

However, the statutes don’t require employers to tolerate continued relapses or refusals to seek treatment. Nor do they necessarily protect an employee who possesses or uses alcohol or drugs while on duty.

RESOURCES A member benefit, HR Solution© (IABforME.com/ emp_mgmt) includes a customizable associate handbook and complimentary consultation services from the HR professionals at Mosteller & Associates. Or, for those who prefer to outsource handbook-preparation duties, IA&B-subsidiary Independent Agency Solutions (IABforME.com/IAS) offers an affordable alternative.

7

STATE NEWS

DOI TO CONDO ASSOCIATIONS, INSURERS: YOU NEED TO COVER UNITS Condo coverage commonly causes headaches for condo associations, unit owners and, obviously, their producers.

In recent years – with the push to increase association deductibles in order to suppress premium increases – the issue of coverage coordination between the association and the unit has become more acute.

Commissioner Trinidad Navarro in mid-September stepped in and reminded all parties of the underlying statute and its proper application. Specifically, in Bulletin No. 27 the commissioner: • Denounced the practice by some property managers of denying access to the condo master policy to unit owners whose units have been damaged by an insured peril, and • Urged producers to make sure the claim is reported to the insurer for the association’s master policy.

WHAT IS THE BASIS FOR THE POSITION? Bulletin No. 27 reminds insurance carriers, producers, adjusters and property managers that the Delaware Uniform Common Interest Ownership Act squarely places responsibility for damage to both the common elements and the units on the condo association.

Only improvements and betterments (and contents, of course) remain the responsibility of the unit owners.

ANNUAL CRAB FEAST Veni, vidi, vici! It’s always fun to crack crabs with our insurance friends. We returned to Boondocks in Smyrna on Sept. 20. Thanks to all who attended!

8

NOVEMBER 2017

As always in condo situations, the applicability of the law to the condominium hinges on the date when that condo was formed. Therefore, referring to the bulletin, the following table can help producers identify insurance coverage obligations (or flexibility about those obligations):

If the condo association was formed on or after Sept. 30, 2009: The statute applies, and the association is responsible to insure both the common elements and the units, but not the improvements and betterments.

If the condo association was formed before Sept. 30, 2009 and the declarations’ insurance provision is silent (or defers to the statute): The statute applies, and the association is responsible to insure both the common elements and the units, but not the improvements and betterments.

If the condo association was formed before Sept. 30, 2009 but the declarations expressly define a different insurance requirement: The declarations will prevail.

You may have an association that selects “bare walls,” “all in” or “single entity.”

Whether you insure residential condo associations or unit owners, make sure you provide proper guidance to your insureds. Unit owners who feel they are improperly pushed to report claims to their HO insurer can submit complaints to the Consumer Services Division and to Christopher Curtin, Deputy Attorney General and Common Interest Community Ombudsman.

DELAWARE GOES DIGITAL FOR SL FILINGS IN NEW YEAR Surplus lines brokers who write in Delaware must use the Online Premium Tax for Insurance portal (OPTins) as of Jan. 1, 2018. The Department of Insurance late this summer released Surplus Lines Bulletin No. 21 to explain the transition. According to the bulletin, the OPTins registration process may take two weeks or longer, so impacted producers are encouraged to act at least 30 days in advance.

MINIMUM LIMITS INCREASE AROUND THE CORNER As a reminder, HB 114 – our legislative priority the 2017 legislative session – increases the current minimum limits of 15/30/5 to 25/50/10. Although most auto policies in Delaware currently provide $10,000 in property damage coverage as the minimum, we learned while drafting the bill that the current law only requires $5,000. This legislation corrects that inconsistency in the law and raises Delaware’s limits to the level of several other states, including Kansas, Kentucky, Missouri, New Mexico, New York, Vermont, Washington and Wisconsin.

The new law takes effect Dec. 13 and applies to all renewals and new policies.

DELAWARE ANNUITY TRANSACTIONS TRIGGER TRAINING BY NOV. 29 The Delaware Department of Insurance recently revised its regulation of annuity transactions. As a result, all Life and Annuity producers (resident and nonresident alike) must comply with a new training requirement.

Effective in July, Delaware regulation 1214, section 5.0 requires completion of a onetime, four-hour approved training course

by Nov. 29, 2017 in order to sell, solicit or negotiate life and annuity products.

The regulation requires insurers to supervise their appointed producers’ compliance with the training. As such, we encourage producers to contact their carriers with questions about approved courses.

Note that the regulation also revamps insurer and insurance producer duties when selling annuities, including suitability standards.

IA&B HONORED FOR EDUCATION EXCELLENCE At its annual Education Convocation, the Big “I” takes the opportunity to celebrate and recognize state associations and staff who make significant contributions to education for their members and the industry. This year IA&B joined the cream of the crop when our staff received a Diamond Excellence Award for our Delaware programming.

IA&B Deputy CEO Jason Ernest and Professional Training and Events Director Jessica McWilliams were on hand to receive IA&B’s Excellence in Insurance Education Award Delaware.

Diamond Excellence recognizes the pinnacle of performance in the key areas of class offerings, continuing education, professionalism, designation offerings, industry collaboration, planning goals, marketing, resources and more.

WELCOME NEW MEMBERS FARM FINANCIAL SERVICES INC. Georgetown, Del.

9

PLATINUM PROFILE

Insurance Agents & Brokers proudly recognizes MMG Insurance Company as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

E

very minute of every day, you can count on us to protect your piece of the world — in good times and bad — just as we have for all of our customers for 120 years.

At MMG Insurance, a progressive regional property/casualty insurance company, we value the trusted relationships we’ve built with our agency partners and work to serve our policyholders. It’s our belief that behind every accomplishment you’ll find hard work and a commitment to excellence.

That’s a big reason MMG is a carrier of choice for agencies across Maine, New Hampshire, Vermont, Pennsylvania and Virginia.

To differentiate ourselves from other companies, MMG works to ensure top-notch service. We take a tremendous amount of pride in being there when our agents and policyholders need us. We still answer the telephone in person and have empowered employees to resolve issues quickly. We do business exclusively through independent agents and live by the philosophy that people do business with people. MMG management and

10

staff meet face to face with agents to see what they are dealing with and bring innovative ideas back, making changes where necessary.

We strive to add value to the agents’ operations, so our major focus is making it easy for them to do business with us, particularly through cutting-edge automation. It’s that combination of high-tech, high-touch that enables business to flow quickly from the agents to us and back, and ultimately benefits the policyholder. n

FEATURED PARTNER MMG Insurance Company PRESIDENT & CHIEF EXECUTIVE OFFICER Larry M. Shaw, CPCU COMPANY LOCATIONS Presque Isle, ME Corporate Headquarters Concord, NH & Bethlehem, PA 1-800-343-0533 A.M. BEST RATING A (Excellent) WEBSITE www.mmgins.com RECENT AWARDS 2017 Named among the Best Places to Work in Maine – seven time recipient 2016 & 2015 Company of the Year – Maine Insurance Agents Association 2016 & 2014 Top Performing Company – Professional Insurance Agents of New Hampshire

Proud Partner of the Trusted Choice network of Independent Insurance Agents

NOVEMBER 2017

2015 Champion of Attraction, Retention and Engagement – Maine Development Foundation

PARTNERS PROGRAM

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? To become an IA&B Partner, choose the sponsorship package that matches your commitment of support.

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

PLATINUM LEVEL

BRONZE LEVEL

ACUITY

Aegis Security Insurance Company

Agency Network Exchange LLC

Agency Insurance Company

Amerisafe Berkley Mid-Atlantic Group Brethren Mutual Insurance Company

Auto-Owners Insurance Company

Donegal Insurance Group

Berkshire Hathaway GUARD Insurance Companies

Erie Insurance Group Insurance Agents & Brokers Service Group Inc Liberty Mutual Insurance

Briar Creek Mutual Insurance Company Conemaugh Valley Mutual Insurance Co

MAPFRE Insurance

Countryway Insurance Company

MMG Insurance Company

Encompass Insurance

Millers Mutual Group Mutual Benefit Group Nationwide Insurance Company

Goodville Mutual Casualty Company Grinnell Mutual Reins Company

Penn National Insurance

Insurance Alliance of Central PA Inc

Plymouth Rock Assurance

Insurance Placement Facility of PA

Swiss Re The Main Street America Group United Fire Group Utica National Insurance Group GOLD LEVEL Progressive Universal Property & Casualty Insurance Company Westfield Insurance SILVER LEVEL CM Regent Insurance Company

Watch for a revamped IA&B Partners program in 2018.

In the months ahead, we’ll unveil greater benefits for our company partners and member agents alike.

AmWINS Program Underwriters Inc

Cumberland Insurance Group Farmers Mutual Insurance Company of Western Pennsylvania Juniata Mutual Insurance Company Keystone Insurers Group Inc

Johnson & Johnson Kite Technology Group Lackawanna Insurance Group Lebanon Valley Insurance Company Merchants Insurance Group Millville Mutual Insurance Company PennPRIME Municipal Insurance Reamstown Mutual Insurance Company Rockwood Casualty Insurance State Auto Mutual Insurance Company Strategic Comp TAPCO Underwriters Inc Travelers

Selective

Tuscarora Wayne Group of Companies

The Hanover Insurance Group

Zenith Insurance

11

12

S O LU TI O N S FOR COMMON COVERAGE

G A P S

By Kevin C. Amrhein, CIC

Follow along as Kevin looks at exposures that aren’t new but still confuse agents, even those who spend most days selling standard policies.

13

I

agents, even those who spend most days selling typical/standard insurance policies.

nsurance can’t keep up with life. Not possible. No way.

The force of societal evolution is too strong, and people will always find ways outside the “norm.” Nobody has just a “regular” job anymore … everyone has a “side-hustle.” The “traditional” family model – you, your spouse, two kids who live at home until graduation and then go off to college – hasn’t been traditional for decades. People can make their own money, literally, using a home computer (google “cryptocurrency”).

And toys? Yeah, they fly now (e.g. drones).

You know the drill. New exposures arrive, and we the insurance industry scramble to find answers to the inevitable influx of “is this covered?” or “what if this?” questions from our customers and colleagues. We often search for answers using policy language that never contemplated such exposures when written.

Frustrating.

So let’s talk about something else. Let’s talk about a few exposures that, even in the face of relentless evolution, have stood the test of time. Exposures that aren’t new but still confuse

14

Before we dive in, here’s the obligatory and shameless plug: The following exposures are selected from the personal lines section of a webinar course I teach, “Tricks to Fix: Closing Coverage Gaps in Home, Work and Auto.” In this course, these and a slew of other personal and commercial lines coverage problems are reviewed. All contemplate Insurance Services Office (ISO) policy forms and language.

EXPOSURE: SHARING A PERSONAL AUTO Let’s look at exposures for a personal auto furnished or available for regular use, as well as vehicles owned by a “family member.”

Have a company car? It’s not covered by your personal auto policy (PAP). Okay, fine. It’s frustrating to me that this often seems to be the only exposure people contemplate when they see exclusions B.2. and B.3. in the ISO PAP. Sure, it’s an easy example. But it’s not practical. Realistically, what percentage of your book of personal auto business has a company car? Two percent? One? Less?

NOVEMBER 2017

So here’s something to chew on instead: What percentage of your book has access to a relative’s car? A roommate’s car? A neighbor’s car? Are we getting warmer?

How about a family with multiple children of driving age still living at home?

When teaching, to convey the potential breadth of these exclusions, I often use two examples: Joyce and Ruth, and Elizabeth and Jimmy.

Joyce and Ruth

endorsement is called Extended Non-Owned Coverage – Vehicles Furnished or Available for Regular Use (PP 03 06 01 05).

Identifying who in your book of business would benefit from this endorsement is not difficult. Simply ask your PAP insureds this question: “Do you have regular access to a vehicle that isn’t yours?” Remember, this could be a car owned by a relative, fiancé, roommate, neighbor, employer, etc. Most will say “yes” (those that say “no” are probably lying). Anyone who answers “yes” should be given the opportunity to purchase this endorsement.

Joyce is my wife’s grandmother (who turned 100 this past July and is in exquisite health). Ruth is my wife’s great aunt (who passed a few years ago). The two sisters spent much of their lives living a few blocks apart in the same city.

Elizabeth and Jimmy

When Ruth decided her vision was no longer adequate to drive, do you think she got rid of her low-on-miles, high-on-luxury Cadillac El Dorado (a beautiful car that my mother-in-law now owns)? Nope.

First, let’s acknowledge this fact: Elizabeth is going to drive her brother’s truck. It’s going to happen. And should she cause an accident while doing so, the primary coverage is his PAP … with minimum limits. Because she still resides with her parents, she’s

Backstory: Elizabeth is 18, Jimmy is 21. They’re siblings who live at home with their parents. Jimmy has a pickup insured on his own PAP with … you guessed it, minimum limits of liability.

And when Ruth stopped paying for her car insurance, did her state of residence tow the Caddy out of her garage? Nope.

And when Joyce would drive Ruth to the grocery store, church or social engagement, do you think these two ladies hit the streets in Joyce’s old beater Malibu? Nope.

Since Ruth stopped paying for car insurance, there’s no primary coverage on this car, which means the only coverage available should Joyce (in her 90s at the time; could you see a car accident happening?) cause an accident while driving the Caddy is her own PAP. Except there’s a problem. Joyce drives this Caddy all the time.

She even has her own key to it.

So what happens when Joyce’s claims adjuster deems that the Caddy is furnished to/available for her regular use?

Enter Exclusion B.2.b. in the ISO PAP: We do not provide Liability Coverage for the ownership, maintenance or use of any vehicle, other than “your covered auto,” which is furnished or available for your regular use.

Since Joyce is “you” in her PAP, and Ruth’s car is not “your covered auto” on her PAP, this is not good.

CATCH KEVIN AND HIS COLLEAGUES ONLINE LEARN ABOUT industry hot topics (such as the exposures explored in this article) – and earn CE – without leaving your desk. We’ve partnered with Kevin and his colleagues to present an ongoing series of live CE webinars.

Benefits of these live CE webinars: • More dates and times to fit your busy schedule • More convenience with no travel or time away • More ways to earn CE credit without taking an exam Cost: $75 for IA&B members, $105 for non-members IABforME.com/webinars

Luckily, for this exposure, ISO has an endorsement which Joyce could add to her PAP that would remove this exclusion. The

15

still a “family member” as defined in their PAP, so they assume she’s covered by their PAP on an excess basis.

TRICKS TO FIX: CLOSING COVERAGE GAPS

Problem solved, right? Nope.

So what happens when the parents’ claims adjuster enforces an exclusion stating that this vehicle is owned by a “family member”?

LEARN MORE from Kevin about common home, work and auto policy exposures – as well as coverage solutions – in his upcoming live CE webinar. “Tricks to Fix: Closing Coverage Gaps in Home, Work and Auto” builds upon the examples presented in this article, plus discusses side jobs, change of ownership, loss assessments and other classic coverage concerns.

Thursday, Dec. 7 9 a.m. – noon 3 CE credits IABforME.com/webinars

Enter Exclusion B.3.a. in the ISO PAP: We do not provide Liability Coverage for the ownership, maintenance or use of any vehicle, other than “your covered auto,” which is owned by any “family member.”

Since Jimmy still resides with his parents, he’s still a “family member” as defined in their PAP. And since he owns the pickup, it’s not “your covered auto” on the parents’ PAP (hence why Jimmy has his own PAP).

As my two-year old daughter is fond of saying: uh, oh.

Unfortunately, the endorsement discussed in the prior example will not remove this exclusion. In this situation, there really are only two options you should discuss with the parents: 1) Never allow Elizabeth to drive her brother’s truck (not likely), or 2) Have a conversation with Jimmy about the importance of higher PAP limits (I’m sure he’ll love that discussion).

It should be noted that this exclusion (B.3.) does not apply to you (Named Insured and resident spouse) while maintaining or occupying this vehicle. This is an important giveback regarding the parents, but it does not resolve the coverage gap for siblings.

EXPOSURE: RELATIVE IN ASSISTED LIVING In just a minute, I’m going to talk about your mother. And you’re not going to like it.

Owner-occupancy is a long-time fundamental of obtaining a Homeowners’ insurance policy. This becomes a concern when the owner-occupant relocates to an Assisted Living Facility. And if you haven’t heard it mentioned enough times over the past few years, here’s one more: The population is aging.

The percentage of insureds in your book of Homeowner’s policies that are at the point of deciding on Assisted Living – either for themselves or for a relative – is growing. Further, it’s likely you have insureds who have already experienced this and haven’t told you. Why? Because they don’t think it matters.

Continued on page 18.

16

NOVEMBER 2017

17

Continued from page 16.

It does. A resident of such a facility may still need insurance for her stuff. Additional funds may become necessary should the resident have to temporarily relocate to another facility if hers is damaged. Oh, and she still needs personal liability coverage should she injure someone or damage someone’s property.

Now let’s talk about your mother.

Here’s the problem: Without Homeowners’ insurance, how is mom protected from a personal property loss or liability claim?

There are two realistic options: 1) Mom could obtain a renter’s insurance policy (ISO HO4). This is the better of the two options but may be easier said than done. Assisted Living Facilities are traditionally a high-risk claims environment that some HO-4 carriers may not like.

2) A relative of mom could add an endorsement to his/her own Homeowner’s policy. It’s not perfect but it’s better than nothing.

When I teach this issue, I’m often surprised at how many agents are unaware that option two exists.

ISO endorsement HO 04 59 – Assisted Living Care Coverage provides a relative of mom the opportunity to add limited coverage to his/her own Homeowners’ insurance policy. Stated differently, if it’s your mother, you could add her to your policy using this endorsement.

You’re such a good boy/girl…. Here’s a second scoop of ice cream.

It’s important to note that adding this endorsement to your Homeowners’ policy does not simply make mom an “insured” under your policy and thus grant her full access to your coverage.

(You’re still a good boy/girl, but maybe only one scoop.)

• Third, the endorsement has no Coverage F – Medical Payments to Others.

• Fourth, while there is Coverage E - Personal Liability, the limit may be lower than the limit included in the Homeowner’s policy. Further, certain losses such as “bodily injury” to a facility staff member is excluded.

CONCLUSION New is in. New is different. New situations and exposures grab your attention and demand your time. But in the “Tricks to Fix: Closing Coverage Gaps in Home, Work and Auto” webinar, the focus is not just on how policy forms may/may not contemplate new exposures which effect a small number of insureds. Rather, agents are taken through exposures like those above which exist in a high percentage of the typical independent agent’s book of business. I hope you’ll join me next time!

Cheers!

Kevin is president of the Florida Insurance School of Continuing Education, where he served as senior adviser from 2004-2013. He is also a national faculty member for the National Alliance for Insurance Education and Research’s Certified Insurance Counselor and Certified Insurance Service Representative programs.

A graduate of the University of Central Florida, Kevin first taught as a golf instructor (although he frequently was kicked off driving ranges for giving free lessons). He began his insurance career as a marketing intern before serving as a commercial lines agent for an independent agency in Orlando, Fla. He received the CIC designation in 2003.

As mentioned, this endorsement is limited.

Among its limitations: • First, you choose a limit for Coverage C - Personal Property. (It is not an automatic factor of Coverage A – Dwelling.) Further, some specifically listed items, such as hearing aids and wheelchairs, are subject to special (e.g. small) limits of liability.

• Second, the Additional Living Expense coverage includes both a maximum monthly dollar amount ($500) as well as limited time frame for which it’s payable (12 months).

18

NOVEMBER 2017

PREMIUM FINANCING 101

P

remium finance is the business of providing loans to consumers, providing an insured party the ability to cover the cost of general insurance premiums. Available for commercial and personal policies, the premium financing loan helps the insured alleviate the need for large up front capital costs normally associated with insurance premiums.

HOW IT WORKS The premium finance company provides payment in full to the insurance company that issued the policy. Then the insured pays the premium finance company on a monthly, quarterly or semi-annual basis. These payments include any fees and/or finance charges associated with the loan.

WHY IT WORKS The premium finance company is given “power-of-attorney,” which affords it the right to cancel the insurance contract in the event of non-payment by the insured. The unearned portion of the insurance premium is also assigned to the finance company in the event of a return premium. This provides the finance company security (collateral) in the loan and helps to ensure repayment in the event of a default. Using the insurance policy as collateral is very similar to a consumer using his or her new vehicle as the collateral for the loan. n

This content was adopted from the Premium Finance Brokerage, LLC blog.

PREMIUM FINANCE BROKERAGE IA&B MEMBERS have access to an endorsed program through Premium Finance Brokerage, LLC. The program is designed for accounts of any size.

Highlights include: Credit card down payment option: Eliminate your agency’s risk of a disputed charge or bounced check.

Interest rate guarantee: Work to provide you a competitive rate so you don’t have to shop anywhere else.

Flexible payment terms: Fit the needs of your clients.

Quick loan technology: Submit your agreements online for immediate processing.

Rapid quoting and servicing: Access your customer’s account information online.

Minimum account size: Submit any size commercial or personal lines contract.

Revenue sharing: Create an extra source of income for your business.

IABforME.com/PremiumFinance

20

NOVEMBER 2017

grinnellmutual.com

TRUST IN THE ROAD AHEAD The future doesn’t always keep its promises. Fortunately, we do. Even if the road ahead feels uncertain, your customers can trust that their auto insurance will be there for them — today and into the future. Trust in Tomorrow.® Contact us today.

AUTO | HOME | FARM | BUSINESS

“Trust in Tomorrow.” and “Grinnell Mutual” are registered trademarks of Grinnell Mutual Reinsurance Company. © Grinnell Mutual Reinsurance Company, 2017.

TECHNOLOGY UPDATE

22

NOVEMBER 2017

SHOW OFF A LITTLE TO DRAW IN CUSTOMERS By the ACT News Team

ACT News wanted to know how independent agencies can differentiate themselves in a noisy world, so we turned to Dale Steinke, Director of Independent Agency Digital Marketing with Safeco Bricks & Clicks, to find out what it takes to develop a meaningful digital presence.

23

A

CT News: Dale, the world is a noisy place, and there are thousands of companies and people vying for consumers’ attention every day. How is an agency to get noticed and—more than that — develop a following?

Dale Steinke: The first thing is for your agency to have a highquality online presence that emphasizes the value of who you are and what you do. It should talk not only about what you sell but also about your people and where you do business. It should look great on a desktop and on mobile devices. People today research before they buy. They shop from their smartphone or their computer before they make a purchasing move. They might not close business online, but they’re unlikely to take you seriously if you’re not online at all. They’ll think either you’re not serious about your customer relationships or you’re not legitimate.

Your online presence should spotlight the knowledge of the agents in your firm and drive clients and prospects to a personal interaction with them in the way they prefer.

ACT News: Yes, nowadays it seems like a business that doesn’t have a good Web presence isn’t interested enough in communicating to me to get my business. I don’t have time to call and converse with every local agency. I want to learn a little before I call—see if they share my values or appeal to me.

24

NOVEMBER 2017

Dale: Exactly. That is why it is important on your agency website to not only emphasize your community involvement but to also provide the means for people to interact with them in the ways they prefer. Client portals where they can access their accounts and request changes are a pretty easy method since many agency management systems offer these. Click-to-chat is another useful feature. And make your agency’s phone number easy to find.

Another thing to consider is how your agency is viewed outside your own website. For instance, Yelp, where people post reviews of their experiences with local businesses, is an important place to have a positive presence. People form opinions based on what they see there, and if there’s negative stuff about your agency, that could harm your business. Likewise, positive reviews can drive traffic to your agency—most likely starting with your website, so make sure it gives a good first impression. Make sure it’s easy to navigate and it looks good.

The better websites have richer content. They spotlight their specializations. They also have blogs and other information that answer the questions of prospective clients who are just beginning to research.

Once people land on your website, is there a call to action? “Call us for a quote.” “Click here for a quote.” Calls to action drive up conversion rates. For most agencies, encouraging people to call is probably the most effective since it gets the prospect speaking to a live person who can really listen to their needs and make the sale. A call center, or other off-hours phone coverage, can make you available 24/7.

Something else you’ll start seeing more of is “intelligent agents” or bots. Think of an automated click-to-chat that answers typical questions. It searches for key words in the user’s question and provides targeted answers that hopefully generate a deep enough conversation that it ultimately results in a connection between a live agent and the online user, resulting in a sale or the addressing of a service need.

If the Q&A is going on in the middle of the night and it gets too complicated or specialized, the automated algorithm could be programmed to say something like, "I need to get an agent to talk with you further on this issue. May we call you in the morning? Yes? Great, what time would you like a call?"

It’s about giving people options.

DO YOU HAVE AN ACTIVEAGENCY WEBSITE? THE VALUE of an effective, responsive website can’t be overstated, especially when it comes to appealing to today’s online insurance shoppers. But you know that.

What you may not know is that you can have a brand new website that’s customized for your agency and meets the latest standards for appearance, user experience, security and functionality without a large up-front investment.

ActiveAgency is a collaboration between IA&B subsidiary Independent Agency Solutions and Lehigh Valley digital marketing firm Forge3, Ltd. It is exclusively for insurance agencies and offers an attractive, functional site that includes features available only to IA&B members.

IABforME.com/IAS

TECHNOLOGY UPDATE

Independent agents can and do win by providing ease, choice and advice. Your online presence should spotlight the knowledge of the agents in your firm and drive or draw clients and prospects to a personal interaction with them in the way they prefer.

something like that, where you make yourself a local specialist on something. That creates interest. Then, when people find out you also sell insurance, they may turn to you when they need coverage and will pay attention when you tweet about insurance.

ACT News: Can Twitter be a successful venue?

A key to succeeding at social media in general is to make it a scheduled part of your business week. Put it on your calendar to post regularly. You can even schedule posts to publish days or weeks into the future so you don’t have to have someone sitting there at the computer or phone at the exact time you want to release information. HootSuite and Facebook, among others, have this ability. They also have analytics that allow you to measure how well you are doing on social media — the number of views, likes, shares, etc.

Dale: Twitter is good for monitoring events and pushing out new content or important alerts, but it can be difficult to generate meaningful conversation on Twitter. And it’s hard to get a bunch of followers if all you are tweeting about is insurance.

There are a couple of agents who do use Twitter in a special way and have developed a lot of followers. One is @NibbyP, Nibby Priest, an agent from Henderson, Ky. He has almost 4,000 followers, but a lot of that is because he primarily tweets about his community. That generates a following of businesses and individuals who want to keep their finger on the pulse of that city. If you’re going to try Twitter, I suggest doing

In our Safeco Bricks & Clicks program, we have a proprietary tool called Social Media Score that looks at the quality of your agency’s social media efforts. Do they post photos? Do they talk about their communities? If so, their grade goes up. Do they

key piece of agent advocacy

AgentPAC is a

IN DOVER.

IA&B gives members a strong voice in the

100 Ways in 100 Days Help us meet our critical annual fundraising goal with a contribution of $100 (or more) in the final 100 days of 2017.

Read more and contribute online at IABforME.com/DelPAC.

26

NOVEMBER 2017

Legislative Hall, but a big piece of the advocacy puzzle is the ability to support legislators who back our positions.

That’s only possible with the financial support of individual agents like you. Make a contribution to AgentPAC of Del. It’s like insurance for your career.

Provide more than protection for your clients. Offer them the added value of EMC’s no-fee loss control services, which could help reduce the cost of their insurance. It’s just one of the many reasons policyholders Count on EMC ®.

JIM JANAK, CSP Risk Improvement Manager

REDUCING LOSSES ADDS

VALUE FOR CLIENTS.

VALLEY FORGE OFFICE Phone: 800-362-3620 | Corporate Office: Des Moines, IA

www.emcins.com © Copyright Employers Mutual Casualty Company 2017. All rights reserved.

talk about selling insurance? If it’s more than about 20 percent, their grade goes down. It’s social media, not selling media. Hard selling messages don’t build rapport and relationships.

We have another tool called SearchScore that assesses how easy it is for an agency to be found online, as well as how well agencies meet consumer expectations once users get there.

The report card gives the agency recommendations for improvement. We offer education as well, via webinars, workshops and online classes, to help our agency partners get where they need to be online. At Safeco, we’re all about the independent agency channel. It’s where we live and breathe, so we want our agency partners to grow their entire business.

ACT News: What role does the agency owner or principal play?

Is this all really in marketing’s hands and everyone else is peripheral?

Dale: No. Research from the Customers for Life team at Safeco shows that the vast majority of the best-performing agencies have dedicated marketing resources of some kind. The principal needs to buy in on marketing the agency but might be better off delegating the work to someone else. That’s why at our Bricks & Clicks workshops, we want the principal and the marketing

28

person doing the work to attend. There are particular skills that marketing people have, so I believe agencies should be hiring with that in mind. Ask prospective employees about their digital skills, keeping in mind that younger people don’t always list these things on their résumés because they are digital natives.

As an agency’s marketing person or team begins to involve other agency members in the effort, it is wise to look for certain traits—are any of your employees influencers (people with large social networks). Are they active in community causes? People do business with people, not businesses, so it is important to spotlight those in your agency who are doing appealing things.

Maybe they are involved in important community causes or local sports. Giving press to your agents’ community activities and maybe even personal accomplishments—say, running a marathon—can be a catalyst for business for both your agency and the other organization. And it’s another avenue of conversation that is relevant to the client outside of insurance.

ACT News: What about a concern about the very small family agency where hiring a dedicated marketing specialist is prohibitive?

Dale: I agree, but that doesn’t mean you can’t market. It just means you have to ask everyone to do their part. That can

NOVEMBER 2017

include encouraging employees to share what the agency is doing in support of the community through their own personal social media. To consumers, social responsibility is huge — nine out of 10 people will like your agency more, they’ll trust you more and they’ll be more loyal — so it’s a good idea to show that stuff and to retweet and repost information on the community from your organizations. It builds affinity.

Even if you can’t hire a full-time marketer, maybe a CSR or other employee can handle a few hours of marketing per week, or maybe a stay-at-home parent who has marketing experience who could help out part-time.

And remember, your customers can market for you. When you get a happy client, ask them to write an online review or provide a testimonial. Some agencies incentivize that by asking employees to request reviews, but they should make sure they ask the customer to mention them by name in the review. If that happens, the agency gives the employee a gift card or another little thank-you. The tone of the reviews changes when this happens from one of “they saved me money,” to “Susan gave me great advice and choices.

She made it easy…and I saved some money….” Now your employees are more invested in the agency and potential customers have a better sense of the value the agency provides.

It’s one of your best marketing tactics— clients who like you enough to take the time to tell others. Encourage that! n

Safe. Strong. Stable.

Insuring businesses for 175 years.

The Mutual Fire Insurance Company in Harford County was founded in 1842 to protect the citizens and businesses in the small rural town of Bel Air outside Baltimore, Maryland. As a mutual company, we’ve always put our policyholders first, working with our independent agents to grow responsibly and cautiously. Now a large regional carrier serving seven states and Washington, DC, we are celebrating 175 years of always

Agents Council for Technology provided this resource.

being Committed to Mutual Success.

HarfordMutual.com | 800.638.3669

29

IA&B Financial Reports INSURANCE AGENTS & BROKERS COMBINING STATEMENT OF ACTIVITIES March 31, 2017

IAB OF PA Revenues: Membership Dues Professional Training Events & Member Products Publications Royalties & Commissions Consulting Other Total Revenues

IAB of MD

Combined IAB Associations

DAIAB

384,385 1,563,458 55,353

83,710 363,001

596,943

142,451

116

589,162

40,291 164,837

2,864 2,603,003

21,942 44,403 58,085

Expenses: Membership Commission Professional Training Events & Member Products Publications Advocacy Corporate & Management Governance Total Expenses

51,744

2,675

3,746

1,224,942 62,115

322,932 166

50,187 37,464

25,552 1,116,276 17,398 2,498,027

59,558 219,142 5,710 610,183

11,140 56,475 6,314 165,326

Net Operating Income (Loss)

104,976

(21,021)

490,037 1,970,862 113,438 0 739,510 0 43,155 3,357,002

(489)

2,921,725 35,715 3,189,276

83,466

129,050

1,607 0

(135,259)

161,431

31,752

10,083

14,737 193,491 (6,569) 0 0 0 0 0 203,266

Change in Net Assets from Operations

266,407

10,731

9,594

286,732

Transfer of Agent PAC funds

(78,361)

(34,449)

(22,039)

(134,849)

Change in Net Assets

188,046

(23,718)

(12,445)

151,883

1,607

1,014 24,225 6,513

835 9,342 (94)

Intercompany Eliminations

(4,045) 17,261 110,981 1,617,553 34,100 1,538,431 3,318,326

58,165 0 1,598,061 99,745 0 96,250 1,391,893 29,422 3,273,536

Other Income (Expense): Contributions & interest to designated funds Depreciation & amortization Interest & dividends on cash equivalents Net investment income (loss) PAC income (loss), net of expense Pension expense Life insurance income Deferred compensation expense Pension related changes Income tax benefit (expense) Total Other Income (Expense)

12,888 159,924 (12,988)

IAB Service Group

(5,000) (19,341)

(1,388,668) (1,417,054)

(1,428) 126,835 10,361 94,640

1,618 5,632

(34,532) (882)

(1,389,224) (1,426,066) 9,012

485,992 1,970,862 125,699 91,640 2,357,063 34,100 192,918 5,258,274

56,737 126,835 1,563,529 109,224 94,640 96,250 2,924,394 65,137 5,036,746 221,528

1,607 (135,259)

(9,012)

131,794 (382,528) 145,520 (233,223)

Combined IAB

(9,012)

(104,173)

0

16,355 190,111 (6,569) 0 131,794 (382,528) 0 145,520 (38,969) 182,559 (134,849)

(104,173)

0

This allegiance to IA&B, combined with our carrier partnerships, supports the financial strength of the organization.

ASSETS

Cash & Cash Equivalents Cash, Premium Fiduciary Account Accounts Receivable Prepaid Expenses Deferred Income Tax Inventory Inter-corporate Loans, current portion Investments - Mutual Funds & ETFs Total Current Assets

IAB of MD

Combined IAB Associations

DAIAB

2,458,487

74,528

247,053

224,239 38,328

197,211 7,871

84,808 1,936

1,612 82,184 1,614,524 4,419,374

264,932 544,542

120,824 454,621

Property & Equipment, net Cash Whose Use is Limited, Board & Donor Designated Inter-corporate Loans, net of current portion Investment in Big I Reinsurance Co. Investment in IAB Service Group Other Assets, Net of Amortization Cash Value, Life Insurance Deferred Income Tax Total Other Assets

IAB Service Group

2,780,068 0 506,258 48,135 0 1,612 82,184 2,000,280 5,418,537

61,600 1,239,002

0

1,107,876

480,562 318,000 297,426 57,738 22,600 1,076

Intercompany Eliminations

(681,916)

(82,184) (764,100)

Combined IAB 3,260,630 318,000 121,768 105,873 22,600 2,688 0 2,061,880 5,893,439 1,107,876

307,247

307,247

315,805 90,000 486,082

39,070 1,380,548 740,350 2,159,968

(915,905)

0 120,000 0 39,070 1,380,548 740,350 3,695,091

4,506,846

(1,680,005)

9,588,530

1,199,134

102,013

42,005

315,805 120,000 600,100 0 0 0 1,343,152

Total Assets

5,618,508

646,555

496,626

6,761,689

Total Current Liabilities

1,470,193

102,013

30,000 12,005

307,247 (315,805) (600,100)

LIABILITIES & NET ASSETS

Inter-corporate Loans Retirement Obligations Total Long-term Liabilities

Net Assets, unrestricted Capital Stock Additional Paid-in Capital Designated Funds Undesignated Total Net Unrestricted Assets Total Liabilities & Net Assets

30

0

247,801

0

114,867

1,832,861

707,275

(764,100)

1,776,036

315,805 1,623,985 1,939,790

(315,805)

0

0 0 0

0 1,623,985 1,623,985

100 600,000

(100) (600,000)

1,259,681 1,859,781

(600,100)

0 0 306,685 5,881,824 6,188,509

4,506,846

(1,680,005)

9,588,530

306,685 3,841,630 4,148,315

398,754 398,754

381,759 381,759

0 0 306,685 4,622,143 4,928,828

5,618,508

646,555

496,626

6,761,689

IA&B supports the activities that our members value – effective advocacy, timely compliance resources and quality education.

We’re almost 1,260 members strong across three states.

Approximately 6,800 participants attend over 204 IA&B classes annually. And members buy over 1,600 policies through us for their agency insurance coverage.

47,710

INSURANCE AGENTS & BROKERS COMBINING STATEMENT OF FINANCIAL POSITION March 31, 2017

IAB OF PA

IA&B maintains a strong combined statement of financial position with $9.6 million in assets, $6.2 million in member equity and no third-party financed debt. Over $221,000 of net operating income is reflected on the combined statement of activity for the year ended March 31, 2017.

(315,805)

NOVEMBER 2017

The accountants’ review for the fiscal year ended March 31, 2017 is on file at IA&B headquarters.

These statements are a summary of that report.

Our Umbrella Programs Give You More Options Preferred Property Program gives you broader, more flexible coverage with a range of limits Fast Service and more security are what you get with Preferred Property Program. Our umbrella liability policies are written by XL Insurance with Chubb Insurance Group for excess layer – two of the industry’s most highly rated carriers.

• • • •

A subsidiary of

JGS INSURANCE

Celebrating Our 95th Year

Options of $5 to $50 million in umbrella coverage.

Hi-Rise apartments up to 35 stories eligible.

Developer-sponsored board eligible.

Excess of D & O General Liability, Auto Liability, and more

Contact us for a quote: www.umbrellaprogram.com

888.548.2465

info@umbrellaprogram.com

Service is our specialty; protecting you is our mission ®

960 Holmdel Road, Holmdel, NJ 07733

31

My Events

CLASSIFIED A DV E R TI S E M E N TS SOUTHEAST PA PRODUCERS & AGENCIES

DATE TOPIC

LOCATION

NOVEMBER 2017 1

CISR Commercial Casualty I

Pittsburgh, Pa.

1

Webinar: Time Element for Commercial Risks

1-4 p.m.

2

William T. Hold: Commercial Lines Challenges

Erie, PA

2

CISR Commercial Property

Salisbury, Md.

2

Webinar: Certificates of Ins. & Additional Insureds

1-4 p.m.

7-8

James K. Ruble Graduate Seminar

Lancaster, Pa.

9

E&O Risk Management

Philadelphia, Pa.

9

Webinar: Health Insurance—Myths, Truths & Solutions

9 a.m.-Noon

9

Webinar: Home Business vs. Home Insurance

1-4 p.m.

13-16

CIC Personal Lines Institute

Hunt Valley, Md.

14

*CPIA: Position for Success

Pittsburgh, Pa.

14

Webinar: Leases & Contracts vs. Policy Language

9 a.m.-Noon

14-16

Property & Casualty Licensing Study Course

Mechanicsburg, Pa.

15

*CPIA: Implement for Success

Pittsburgh, Pa.

16

*CPIA: Sustain Success

Pittsburgh, Pa.

16

Webinar: Money in Retirement Accounts

9 a.m.-Noon

16

Webinar: Top 12 Coverage Countdown

1-4 p.m.

28

CISR Agency Operations

Mechanicsburg, Pa.

28

William T. Hold: Commercial Lines Challenges

Philadelphia, Pa.

29

E&O Risk Management

Allentown, Pa.

29

CISR Commercial Casualty II

Wilkes-Barre, Pa.

30

E&O Risk Management

Newark, Del.

30

CISR Commercial Casualty II

Philadelphia, Pa.

30

Webinar: Commercial Property Claims Problems

1-4 p.m.

* Attend all 3 CPIA seminars to earn the CPIA designation.

Professional agency since 1926 located in Feasterville, Bucks County, Pa. Call for confidential information and a review of our services.

Contact Ray Reinard at 215-357-8600, Ext. 119.

If you would like to place a classified advertisement, please contact Laura Gaenzle at Laura.gaenzle@theygsgroup.com or (717) 430-2351.

AD INDEX Applied Underwriters............................................... IBC Berkshire Hathaway Guard Ins Cos...............31 Donegal Insurance Group.......................................19

DECEMBER 2017 4-7

CIC Commercial Property Institute

King of Prussia, Pa.

5

Webinar: The Things Kids Get Us Into

1-4 p.m.

5-7

Property & Casualty Licensing Study Course

Pittsburgh, Pa.

6

William T. Hold: Protect Your Client & Yourself

Hagerstown, Md.

7

CISR Agency Operations

Altoona, Pa.

7

William T. Hold: Protect Your Client & Yourself

Baltimore, Md.

7

Webinar: Closing Coverage Gaps—Home, Work, Auto

9 a.m.-Noon

11

Webinar: Commercial Liability Endorsements

1-4 p.m.

12

William T. Hold: Commercial Lines Challenges

Mechanicsburg, Pa.

12

Webinar: Long-Term Car Funding w/Life Insurance

9 a.m.-Noon

12

Webinar: Financial Planning

1-4 p.m.

13

Webinar: CGL—Drafts, Gaps, Forms & Fixes

2-5 p.m.

EMC Insurance Cos....................................................27 Grinnell Mutual Reinsurance Co.......................21 Harford Mutual Insurance Co..............................29 IA&B.........................................................................................26 IA&B Partners Program............................................11 Millers Mutual Group.................................................IFC Motorists Mutual Insurance Co..........................17 Plymouth Rock Mngmnt Co of N.J............OBC Preferred Property Program.................................31

32

NOVEMBER 2017

Expect big things in workers’ compensation. Most classes approved, nationwide. It pays to get a quote from Applied.® For information call (877) 234-4450 or visit auw.com/us. Follow us at bigdoghq.com.

©2017 Applied Underwriters, Inc., a Berkshire Hathaway company. Rated A+ (Superior) by A.M. Best.

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