Delaware Primary Agent - July 2015

JULY 2015 | DELAWARE

HOW DOES

YOUR AGENCY

STACK UP?

PARADOXES OF AN AGING WORKFORCE GENERATIONAL DIFFERENCES, COMMON GROUND

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IN THIS

ON THE COVER 12

HOW DOES YOUR AGENCY STACK UP? Rely on a self-audit to measure your agency’s HR function.

You’ll learn whether you’re managing your agency and employees in an effective and legally compliant manner and, if not, what you could change.

ALSO 18

PARADOXES OF AN AGING WORKFORCE In a recent survey, respondents sang the praises of older workers. Yet in spite of these convictions, more than half said they don’t actively recruit older workers. Learn how one group, Work At Home Vintage Employees, aims to change that dynamic.

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RESPECT: A GENERATIONAL PERSPECTIVE Despite inherent generational differences, Boomers and Millennials can find common ground with a little respect and understanding.

IN EVERY ISSUE 2

Chairwoman of the Board

3

Ask Our Experts

4

Preventing Errors & Omissions

6

Coverage Corner

8

State News

11

IA&B Partners

IBC My Events IBC Advertiser’s Index IBC Classified Ads Periodical postage paid at Mechanicsburg, Pa. and at additional mailing offices. Ride-along enclosed. Postmaster: Send address changes to Insurance Agents & Brokers, 5050 Ritter Road, Mechanicsburg, PA 17055.

Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2015-07, is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

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Copyright 2015. 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.

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CHAIRWOMAN OF THE BOARD’S MESSAGE

PUTTING OUR OWN HOUSES IN ORDER

E

INSURANCE AGENTS & BROKERS 5050 Ritter Road | Mechanicsburg, PA 17055 800-998-9644 | IABforME.com

OFFICERS Chair of the Board

Diana M. Hornung Hanby, ACSR Vice Chair of the Board

mployee management is the unknown quantity at any business, with the players and the rules always in flux. Independent agencies are no exception. And while we know the importance of handling human resources, most of us wear many hats and juggle conflicting priorities and, in turn, push HR to the back burner.

The bad news? That will only exacerbate issues and require more of our time in the end to put our own houses in order. The good news? IA&B membership provides resources to simplify our HR function. And this issue of Primary Agent magazine highlights several of them.

The first – HR Solution© – is a wide-ranging compilation of products and services, including an HR audit, which is detailed on page 12. Then on page 18, you’ll learn more about an alternative staffing solution that combines the skills of older, experienced workers with the needs of stretched-too-thin agencies. Finally, on the opposite end of the spectrum, turn to page 22 for an insightful look at managing younger workers ... a concern we heard time and again during our most recent Member Agent Panel meetings.

Truth be told, very few of us want to spend time on employee management.

But being proactive – in part by relying on IA&B resources – is a time saver in the end. n

Robert S. Klinger, LUTCF, CPIA Immediate Past Chair of the Board

G. Greg Gunn, CIC

MEMBERS Henry “Butch” Bradley, Jr. Forest Hill, MD

E. Stephen Burnett, CIC, ARM Wilmington, Del

Richard F. Corroon, CPCU Wilmington, Del

N. Lee Dotson, CIC, AAI Wilmington, Del

Michael P. Ertel+ Columbia, MD

John B. Hollister Milford, PA

Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, PA

Douglas A. Loesel, CPCU Erie, PA

Michael F. McGroarty, Sr. Pittsburgh, PA

Crag S. Mader

Gambrills, MD

Ann Gallen Moll, CIC Reading, PA

Mark J. Monroe

West Chester, PA

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

Until next time,

Richard M. Rankin, CIC Lancaster, PA

April E. Ressler, CIC Altoona, PA

Scott C. Rogers, CPIA*

Diana M. Hornung Hanby Chairwoman of the Board

York, PA

Glenn R. Strachan

Ft. Washington, MD

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

J. Marshall Wolff, CIC, CPCU Easton, PA

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

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JULY 2015

Ask Our Experts This month’s answer was provided by Claire Pantaloni, CIC, CISR, our industry affairs director. Catch Claire in our Human Resources Pitfalls education offering, coming this fall.

Question: A local news channel recently highlighted insurance for water and sewer lines, suggesting people could put a rider on their homeowners’ policies to extend coverage. Is this a scam? I’m not aware of any carrier offering this coverage.

Answer:

W

hat you heard is likely not a scam,… but it is worth a discussion.

Coverage for water and sewer lines is an interesting topic, in great part because the industry has communicated so little about it. As insurance producers know, water and sewer lines are typically excluded from the homeowners’ policy, and, unfortunately, many policyholders don’t realize this until they have a claim. These claims generally run in the thousands of dollars, making it an unpalatable experience (and one that they are sure to talk about with their friends and neighbors).

As far as we know, most carriers do not offer endorsements (it’s possible some do and are simply not promoting it). We do know that coverage can or could be available, since we know that: • Some water companies have taken advantage of the coverage gap in the homeowners’ policy and are offering coverage for water and

sewer lines. When people select it, the premium is included with the water bill; • On the insurance industry side, at least one insurer developed an insurance program for “service lines” several years ago. Because this insurer doesn’t sell homeowners’, it was designed to be sold by HO carriers, by partnering with these carriers and tacking on the endorsement to their HO policies, with the risk being “carried” by the original insurer. The coverage has expanded to other lines since (with the option to extend to electric and communications or data transmission wiring).

Interestingly, in spite of the fact that in many communities this peace-of-mind enhancement could be a new marketing angle and opportunity for product differentiation, there still is very little knowledge about it. It is possible, if not likely, that the lack of widespread

knowledge about the program is part of the limited interest shown in the product. Ironically, the insurance industry would probably offer a better product than what is currently available through the utilities company.

Bottom line: If you want to know if you can offer it, ask your homeowners’ carriers if they have an endorsement currently available or if they are considering offering one in the near future.

Have a question?

Ask our experts!

Rely on our experts 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.

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PREVENTING ERRORS & OMISSIONS

GET YOUR DUCKS IN A ROW TO PREVENT E&O Utica National E&O Program

W

ouldn’t it be nice to know where your agency is on the errors-and-omissions loss control continuum? This is a question to which every agency owner/manager likely would want to know the answer. While assessing the degree to which your agency is E&O proof is not a perfect science, there are ways to get a handle on this important issue.

A great starting point is to ask, “Is the agency a better E&O risk today compared to a year ago?” It is crucial to be honest because many issues factor into determining this. A key aspect of E&O loss prevention involves maintaining a culture of constant improvement.

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Here are some areas to review to help determine whether your agency is realizing E&O growth: MANAGEMENT/LEADERSHIP An insurance agency’s E&O culture starts with its management. Management must clearly and frequently demonstrate its E&O commitment by “walking the walk” and “talking the talk.” Without this commitment, it will be difficult for the staff to embrace a strong E&O culture and achieve the agency’s desired commitment level.

JULY 2015

STAFF COMMITMENT AND EDUCATION In the world of agents’ E&O, these are significant areas because agencies don’t make mistakes, people do. Very simply, every staff member must perform his or her duties ethically and professionally.

The work of an agency’s staff involves many different functions and disciplines.

As a result, an assessment of the agency culture requires an assessment of each person. Ideally, each member of your agency had an “E&O goal” over the past year. Maybe this involved technical or sales training, or attending an E&O class.

Did every member of the staff accomplish his or her E&O objectives and grow in his or her E&O commitment?

Technical proficiency is vital because your customers count on the staff’s expertise on a variety of insurance matters. Since an agency can be liable for what it says and what it puts in print, the manner in which the agency staff responds to customers’ questions is important.

However, technical training may not be enough. It is also important for the staff to receive the necessary training in sales, customer service and systems.

EXPOSURE ANALYSIS CHECKLISTS ARE A MUST These checklists have often been referred to as the “silver bullet” for preventing E&O claims. They are a great source of information, enabling producers and account executives to understand the various exposures of over 650 different SIC classes of business. They also provide questions to ask the client for that specific class of business. If an agency really wants to make a strong commitment to E&O loss prevention, securing and effectively using of one of the many industry exposure analysis checklists is a great positive step.

EDUCATING YOUR CUSTOMERS To what degree are your customers being held accountable for their insurance decisions? One of the best means to enhance this accountability is through actively educating customers on the various coverages and how these coverages respond. There are many approaches to accomplish this, including newsletters and social media. Even starting with a simple weekly “Did you know?” email message helps clients better understand insurance coverages and exposures.

While many agencies want to perform an annual agency review for clients, this can cause some logistical issues. One approach agencies use is sending a checklist each year to clients asking them to what degree their exposures have changed while bringing to clients’ attention a variety of key coverages such as umbrella, flood, earthquake, fine arts, etc.

Providing each client with this checklist will help in the agency’s defense should a problem arise down the road and the customer contends that he or she was unaware of specific lines of insurance protection. In fact, some exposure analysis checklists contain sample checklists that can be mailed to each customer.

Another common approach is to use your agency management system to identify how many customers are missing certain coverages. For example, you can identify customers that have auto and homeowners’ coverage but no umbrella, or how many have UM/UIM at a limit that is less than the policy limits. Most agency systems have this capability.

DOCUMENTATION Because accurate, complete, timely and professional documentation is one of the most important, if not the most important, aspects of quality E&O loss prevention, agencies should determine how well agency standards and expectations for documentation are being met. Here are two good rules of thumb regarding documentation: • Another staff member should be able to review the documentation and exactly know the account’s issues and open items.

• If your documentation was displayed for a jury to read, you wouldn’t cringe at the revelation of it.

OTHER KEY ASPECTS TO CONSIDER • Does your agency provide a cover letter that goes out with all policies?

• Does the agency provide limit options for customers? This forces customers to make a decision on what limit they want and those they don’t.

• Is your agency using a standard template for the proposals you provide? Have your proposals been enhanced with some explanations and definitions of key words and phrases? This will not only help educate your customers, it will help make your customers more accountable for their buying decisions.

• Are your producers securing sign-offs from customers for unwanted coverages?

• Does your agency hold periodic staff meetings? These have been shown to be effective in ensuring that all staff members are on the same page on various issues.

Following even some of the suggestions above can help improve your agency’s E&O culture. Then, next year when you ask “Is the agency a better E&O risk today compared to a year ago?” your answer will be a resounding “Yes!” n

The Utica National E&O Program supplied this article. Our sales center 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.

• Are agency procedures documented and being followed consistently by staff? Does your agency have an audit program to verify your beliefs?

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COVERAGE CORNER

RIDESHARING AND RIDESOURCING Jerry M. Milton, CIC

I

m sure many of you have heard of Uber. It’s possible that some of you have even used the company. But, how many of you have heard of Lyft, Sidecar, Haxi or Wingz? These are also ridesharing companies. They just haven’t received as much publicity as Uber.

Ridesharing is provided through transportation network companies that arrange shared rides on short notice.

Ridesharing is like carpooling and is promoted as a way to better utilize the empty seats in a car. The driver shares the same destination as the passengers.

Recent technological developments such as GPS navigation systems that determine a driver’s route and cell phones that allow

6

a traveler to request a ride from wherever they happen to be have made these types of arrangements possible.

However, most of these services are not “ridesharing,” they’re “ridesourcing.”

The traveler contacts the transportation network company, and a driver is dispatched. The companies provide a service similar to taxis, and the drivers do not share a destination with their passengers. These independent drivers operate through the same transportation network companies (Uber, Lyft, etc.) as the true ridesharing drivers.

“Ridesharing” or “ridesourcing” – it doesn’t really make a difference. Both have been controversial and criticized

JULY 2015

for inadequate regulation, insurance, licensing and training. Strong opposition has come from taxi companies and public transit operators because they are seen as a competitive alternative.

Under this concept of ridesharing or ridesourcing, most drivers use their personal vehicles. Many of them probably have a Personal Auto Policy, which provides absolutely no coverage. The Personal Auto Policy excludes liability “arising out of the ownership or operation of a vehicle while it is being used as a public or livery conveyance.”* I wonder how many of those drivers know that.

Until recently no state had enacted legislation regulating these companies.

That changed in March 2015 when Georgia became the first state to pass a ridesharing bill. Maryland followed in short order and in April 2015 enacted a bill regulating transportation network companies such as Uber, Lyft, etc.** The Maryland bill and the Georgia bill are similar. They both contain many of the items contained in an agreement reached by insurers and the transportation network companies. The bills require the transportation network companies to provide commercial insurance to cover any commercial activities undertaken by the drivers.

The Maryland bill contains insurance coverage limits that apply throughout the time commercial business is being conducted. The Georgia bill requires that the coverage begins when the driver accepts a request for the transport of a passenger.

Minimum liability limits are $50,000 for bodily injury or death of one person, $100,000 for bodily injury or death of more than one person, and $25,000 for property damage in Maryland; $50,000 for property damage in Georgia.

These minimum limits apply from the time the driver logs on to the mobile application networking system until a passenger accepts a ride. Once a ride is accepted, the minimum insurance requirement is $1,000,000 for bodily injury, death and property damage. Any other state compulsory coverages must also be provided.

These bills should help close the insurance gaps that currently exist with these transportation network companies.

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.

Editor’s notes: * ISO recently made two countrywide filings – one with three PAP forms and another with a PUP form, all effective Oct. 1, 2015. The PAP forms include an exclusion endorsement, as well as coverage forms for drivers with and without a passenger. The PUP form is an exclusion endorsement. ** As this issue went to print, several bills relative to transportation network company regulation and insurance were pending in the Pennsylvania legislature.

Delaware lawmakers had yet to introduce any related legislation. Please monitor Agent Headlines for updates.

CIC CORNER OUR FOUR CIC education consultants boast a combined 170 years of insurance industry experience.

Here, one of our consultants – Dan Lawyer, CIC, CPCU – offers his advice to those beginning the program.

Q. I’m about to take my first CIC institute. How should I approach it?

A. Don’t be so consumed by taking notes and highlighting text that you don’t hear the instructor’s presentation.

Ask questions – either of the instructor or wise fellow students – at breaks and before or after class.

Q. I’m nervous about the exam! What’s your advice?

A. B eing nervous is normal, but try to channel that energy and direct it toward a positive attitude. Be careful and concerned but confident. Ask yourself, “What is the worst possible outcome if I don’t pass this exam?” The answer is that you just have to take it again. Many CICs didn’t pass all five parts on their first go around and are considered successful.

Nationally recognized and highly respected, the CIC program challenges agents to take their knowledge to a higher level with five intensive institutes. Designees are set apart by their ability to maximize coverage in innovative ways for their customers.

Visit our website to read more about the program and to register for an institute near you.

IABFORME.COM/CIC

7

STATE NEWS

SURPLUS LINES BURDEN LIFTED The administrative headaches associated with placing business in the surplus lines market will be a little lighter thanks to our legislative priority passing the General Assembly in Dover in early May. House Bill 40 removes once and for all the notarization requirement on the surplus lines diligent effort form (SL-1923), a requirement that placed undue burden on agents.

WE’VE SET THE STAGE Our $225,000 investment will deliver at least 55 million impressions of Freedom Campaign ads online between May 1 and the end of July. Our target audience? Pennsylvania and Delaware consumers in specific life stages that trigger insurance purchases. The call-to-action? To visit TrustedChoice.com to find a local independent agent who’s “free to do what’s right for you.”

Late last year the Delaware Department of Insurance (DOI) took a literal stance of the law and began requiring notarization of all surplus lines affidavit forms. We immediately began to work with legislators and the DOI on legislation to provide a “fix” to this new notarization requirement. Rep. Bryon Short, chairman of the House Economic Development/Banking/Insurance/ Commerce Committee and long-time friend of our association, served as the primary bill sponsor. Additionally, the DOI was extremely receptive to our concerns and very helpful in supporting this legislation.

IT’S YOUR TURN Buying into an online ad flight that runs from September through November allows you to leverage the Trusted Choice brand recognition generated during our ad buy, yet to personalize the Freedom Campaign ads to your agency.

The customized ads are “geo-targeted” to your preferred three to five ZIP code area and link to your website.

The legislation will take effect 90 days after Gov. Jack Markell adds his signature – which, at the time this issue of Primary Agent went to print, was anticipated in a matter of days. Watch Agent Headlines for updates.

DEADLINE FOR DIGITAL AD BUY Just as our Internet advertising campaign winds down, your opportunity to piggyback with a three-month campaign of your own has arrived.

With the Trusted Choice Marketing Reimbursement Program, you can spend: • $2,250 for 500,000+ Internet ad displays and 250+ clicks • $1,125 for 250,000+ Internet ad displays and 125+ ad clicks • $2,250 for 1 million+ social media ad displays and 500+ ad clicks • $1,125 for 500,000+ social media ad displays and 250+ ad clicks The deadline to sign up is Friday, July 31. Visit www.Freedom.IIABA.net and log into the Trusted Choice Groupsite for agents. From there, contact Trusted Choice to set up your ad buy and download application materials for the Marketing Reimbursement Program.

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JULY 2015

NEW DELAWARE PRIVACY LAWS IN EFFECT

SAVE THE DATE TO SUPPORT MAKE-A-WISH

Effective Jan. 1, 2015, the Delaware General Assembly enacted two new laws addressing proper disposal of records. The laws aim to curb the risk of unauthorized access to employee and customer records by requiring the development and implementation of reasonable steps for the safe destruction of records.

Trusted Choice independent agents nationwide have joined forces to support their regional Make-A-Wish chapters.

Join them by supporting the 2nd Annual Wishes on Tap at Nassau Valley Vineyards in Lewes on Sunday, Aug. 23 from 2-5 p.m. Trusted Choice is a sponsor of the fundraiser, which allows attendees to taste a variety of local beers and wines.

The two laws work hand in hand: • One applies to employers and has to do with employee records (HB 294).

• The other one (HB 295) applies to businesses in general and has to do with customers’ and prospective customers’ records.

Under both HB 294 and 295, the requirement does not distinguish between paper and electronic records: Properly vetted procedures must be in place for both.

While insurance agencies are exempt from the requirement contained in HB 295, it is likely they were exempt because they are already subject to strict requirements regarding information safeguarding standards and proper disposal of records under other federal and state laws and regulations.

Our website includes more information on HB 294 and HB 295, such as practical tips for safer disposal of records, best practices for replication devices and shredding vendors, and our updated Privacy “cheat sheet” (a list of applicable federal and state privacy laws and regulations in a condensed format).

Watch Agent Headlines or visit our website for more information.

IABforME.com/MyBrand

ANNUAL CONVENTION A RESOUNDING SUCCESS Our 58th Annual Convention, held June 3-4 in Ocean City, Md., was a successful marriage of networking and education. The fun began on Wednesday with our golf tournament at The Links at Lighthouse Sand and then transitioned to the Sponsor Welcome Reception at the Clarion Resort Conference Center.

Day two focused on education, with an executive management session, four CE classes and an awards luncheon.

TRAVEL INSURANCE PRODUCERS IN ACTION – WITH RESTRICTION The 2014 passage of House Bill 379 to allow for a limited-lines travel insurance producer license triggered this year’s regulatory response. The Delaware Department of Insurance in May released Producers & Adjusters Bulletin No. 25 detailing the regulation of the license, referred to as “17B Travel Producer.”

As a reminder, we successfully lobbied for an amendment to the legislation which requires a disclosure stating that: • The coverage offered may duplicate existing coverage maintained by the consumer • The consumer may wish to compare the terms with his/her existing policies The new state law is based on a 2012 model law from the National Conference of Insurance Legislators and has been passed in almost half the country. delawareinsurance.gov/departments/ documents/bulletins/

Watch next month’s Primary Agent magazine for event photos.

IABforME.com/resource_center/ breach/de_disposal

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PLATINUM PROFILE

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

“ Mutual Benefit’s employees have always taken the high road and done the appropriate thing, especially in difficult situations.”

- Dale Blaha, partner at Altany, Loynd & Lindquist, Tarentum, PA

MUTUAL BENEFIT GROUP

M

ark Twain once quipped, “Do the right thing. It will gratify some people, and astonish the rest.”

The 155 people who work at Mutual Benefit Group believe that doing the right thing should be anything but astonishing; it should be an everyday expectation.

• We stay true to our roots as a regional, mutual insurance company, which allows us to focus on the needs of our policyholders, not on pleasing stockholders.

• We support and empower our employees so that they can create the products and deliver the services that our policyholders and agents expect and deserve. Our commitment to our employees has landed us on the list of Best Places to Work in PA for the past six years in a row.

• We give back to the community that’s given us so much. Over 50 percent of our employees volunteer their time in 60 different community organizations/ activities. Mutual Benefit makes regular monetary contributions to educational, health, economic development, and safety programs in our region as well.

Here are some of the things we do simply because they are the right things to do:

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• We settle claims quickly, fairly, and compassionately. Even in the midst of an unprecedented hailstorm in Eastern Pennsylvania in 2014, our claims adjusters earned a claims satisfaction rate of 96 percent, according to our paid-claims surveys.

• We answer the phone when it rings. Each day, our receptionist directs nearly 600 calls to the right staff member.

• We listen when agents and policyholders speak, and we respond.

We can’t be all things to all people, but we consider every suggestion that comes our way as an opportunity to evaluate our practices and continually improve them.

• We strive to remain a stable, consistent, financially sound insurance market, even in uncertain economic times.

• Most importantly, we remain committed to the independent agency system. Mutual Benefit believes that the independent agent is the American consumer’s best advocate when it comes to making critical, life-long decisions about insurance protection. We support independent agents because it’s the right thing to do. n

JULY 2015

FOCUSED ON RESULTS FEATURED PARTNER

Mutual Benefit Group CHIEF EXECUTIVE OFFICER:

Steven C. Sliver, President and CEO HOME OFFICE LOCATION:

Huntingdon, Pennsylvania A.M. BEST RATING

A- (Excellent) WEBSITE

www.mutualbenefitgroup.com

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.

PLATINUM LEVEL

BRONZE LEVEL

ACUITY

Aegis Security Insurance Co

Berkley Mid-Atlantic Group

Agency Insurance Company

Donegal Insurance Group

AmWINS Program Underwriters Inc

Erie Insurance Group

ARI Insurance Companies

Harleysville Insurance HM Insurance Group Insurance Agents & Brokers Service Group Inc

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.

Bailey Special Risks Inc Brethren Mutual Insurance Company

Liberty Mutual Insurance

Briar Creek Mutual Insurance Company

MMG Insurance Company

Conemaugh Valley Mutual Insurance Co

Millers Mutual Group

Countryway Insurance Company

Millville Mutual Insurance Co

Encompass Insurance

Mutual Benefit Group

Foremost Insurance Group

Penn National Insurance

GMI Insurance

Swiss Re

Goodville Mutual Casualty Company

The Main Street America Group

Guard Insurance Group

United Fire Group

DO YOU SEE YOUR NAME?

Auto-Owners Insurance Company

Utica National Insurance Group

Insurance Alliance of Central PA Inc Insurance House Insurance Placement Facility of PA

GOLD LEVEL

Keystone Insurers Group Inc

Progressive

Lackawanna Insurance Group

Westfield Insurance

Lebanon Valley Insurance Company Merchants Insurance Group

SILVER LEVEL

Mercury Casualty

Access Insurance Company

PennPRIME Municipal Insurance

American Mining Insurance Co

Reamstown Mutual Insurance Company

Cumberland Insurance Group

Rockwood Casualty Insurance

Farmers Mutual Insurance Company of Western Pennsylvania

State Auto Mutual Insurance Company

Frederick Mutual Insurance Co

TAPCO Underwriters Inc

Juniata Mutual Insurance Co

The Motorists Insurance Group

MAPFRE Insurance

The Mutual Service Office Inc

PSBA Insurance Trust

Travelers

Selective

Tuscarora Wayne Group of Companies

The Philadelphia Contributionship

Zenith Insurance

11

HOW DOES YOUR AGENCY

STACK UP MEASURING HR COMPLIANCE

by Karen H. DiGioia

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JULY 2015

AUDIT! Got your attention, didn’t I? “Audit” is a word that does that. It strikes fear in the hearts of the bravest of us.

And, at the very least, it’s a subject that is approached with the same level of enthusiasm as a root canal.

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B

ut what if we put the words “human resource” before the word audit? Human resource audit. Does that sound better? I’m hoping that it does.

And, to make it even a little friendlier, what if I tell you that that it’s a self-audit? That you – or someone on your staff – will be the one doing this audit? And (it gets even better) that this audit will help you ensure that you are managing your agency and employees in an effective and legally compliant manner consistent with HR and organizational best practices?

You feel your blood pressure returning to normal already, don’t you? You may not be sure what an HR audit is, but I’m guessing that it sounds a lot better than a tax audit – or that root canal!

WHAT IS AN HR AUDIT? An HR audit is a self-conducted process to verify the current state of HR-related affairs at your agency, identify areas of weakness and areas of potential legal non-compliance.

The audit tool will lead you through questions about a number of areas related to HR and agency management, ranging from the structure of your HR function to your recruiting and selection process.

If you haven’t conducted an HR audit in the past, it’s a process that will greatly benefit you and your agency. It will help you determine if the HR function at your agency is operating in a manner that will maximize the effectiveness of your employees and ensure legal compliance.

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JULY 2015

WHERE DO YOU START? As part of your IA&B member benefits, you have access to an HR audit tool at IABforME.com/resource_center/ HR_Solution. From here the process is reasonably selfexplanatory. Just answer the questions (a little more about that later) and generate a report.

The audit tool will lead you through questions about a number of areas related to HR and agency management, ranging from the structure of your HR function to your recruiting and selection process. It asks about employee recordkeeping and communication. About supervision, performance management and training. Compensation, promotion and employee development. All critical areas of running your agency but areas in which you may or may not feel you have expertise.

IS THE HR AUDIT PROCESS EASY? The process itself is easy. Just click on “yes” or “no” answers to a series of questions. Some of the questions should be simple for you to answer, for example: “Does the agency have an up-to-date associate handbook that explains its objectives, policies, procedures and practices?” I’m guessing you know the answer to that one right now.

FREQUENT QUESTIONS ABOUT THE FAIR LABOR STANDARDS ACT DETERMINING COMPLIANCE with the Fair Labor Standards Act (FLSA) is included in our HR audit tool – and used as an example in this article. Understanding which staff members are impacted by the FLSA and whether your agency’s hourly wage and overtime practices are appropriate are common sources of confusion among agency owners and principals.

Get the scoop on FLSA compliance by reviewing our online resources – penned by Karen DiGioia, our contracted HR consultant and the author of this article.

Unravelling the exempt vs. non-exempt mystery

Other questions, however, may require more thought and a bit of research: “Do hourly wage and overtime pay practices comply with the Fair Labor Standards Act (FLSA)?” If you are familiar with the requirements of the FLSA (and have read previous articles on this topic which appeared in the April and October 2014 issues of Primary Agent magazine), you may be able to answer this easily. However, if you’re not up-to-date on the FLSA – or, if you’re familiar with the FLSA but not entirely certain how overtime is being handled at your agency – it may take some time and research.

• To whom does the FLSA apply?

At the end of the process, you will be able to generate a report which will show you the areas where your current policies and practices may have gaps. The report will address each “no” answer that you gave and provide you with details regarding what needs to be done to address the gap and why it is important to do so.

• How does the FLSA apply to typical agency staff: executive, administrative, professional, outside sales, skilled computer professionals, highly compensated employees, and remaining positions?

Quite honestly, done right, the HR audit process will take you some time. The good news is that it will be time well spent.

The tool will point you in the right direction. By asking the right questions, it will help you to identify key areas that are crucial for effective and compliant management of your agency and your employees. It will ensure that you are asking the right questions and finding the right answers.

• What are the risks of non-compliance?

• What “exempts” an employee?

• Detailed description of exemptions IABforME.com/resource_center/ exempt_vs_nonexempt How the FLSA applies to agency staff

• What if you have incorrectly classified an employee in the past?

• What if any employee works overtime without prior authorization?

• What risk am I taking if I don’t classify an employee correctly?

IABforME.com/resource_center/ flsa_agency_staff

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And, if you find yourself at a roadblock – unable to answer a question or unsure of what to do next – don’t forget, as part of your IA&B membership benefits, basic support is only a phone call or email away. I can be reached at 610-779-3870 or karen@mostellerhr.com.

Now, wasn’t that better than a root canal? n

IA&B’s HR Solution© is a compilation of products and services – available exclusively for our member agencies – that simplifies establishing or improving your human resources program. It includes base-level consultation and discounted professional services from Mosteller & Associates. Learn more at IABforME.com/emp_mgmt.

Karen H. DiGioia provided this article on behalf of Mosteller & Associates, IA&B’s contracted human resources consulting firm.

Reach out to Karen for more information on conducting an HR audit or with other human resources questions.

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JULY 2015

TRUSTED CHOICE CAN HELP YOU ADVERTISE YOUR AGENCY TO ONLINE CONSUMERS IN YOUR LOCAL MARKET

Next local online advertising flight runs September 1st through November 30th.

HURRY! Deadline to sign up is August 1st.

More on this and other branding resources for IA&B members at IABforMe.com/MyBrand.

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JULY 2015

PARADOXES OF AN

AGING

WORKFORCE EVERYBODY LOVES OLDER WORKERS, BUT FEW ARE HIRING THEM

by Sharon Emek, Ph.D., CIC

It’s a demographic fact: The American workforce is getting older, and just about every industry stands to lose from it — especially insurance.

T

he U.S. Bureau of Labor Statistics projects that nearly one in four members of the U.S. workforce will soon be 55 years or older. Many of these older workers are already gone from the labor market due to downsizing, disability or simply retirement. The bureau projects that baby boomer’s participation in the labor force will plummet to only 40 percent after they turn 55.

This talent drain could deal a crippling blow to businesses that are unprepared for their departure.

19

“Preparing for an Aging Workforce,” a recent study conducted by the Society for Human Resource Management (SHRM), confirms what we in the insurance have known for years: although most businesses are concerned about this loss of talent, few are prepared to address it.

Healthcare, nonprofits, government, and utilities top industry sectors for those with the most workers aged 55 and older. The financial sector (which includes finance, insurance and real estate) comes in near the top, with 28.7 percent of its work force comprised of older workers.

The SHRM survey shows that only one-fifth of organizations have conducted in-depth assessments about what the retirement of older works means to them in terms of filling potential skills gaps, and only a third of responders said their businesses had taken steps to fill those gaps. One in five said their organizations had no strategies in place to transfer knowledge between the older and younger generation of employees.

There’s a lot to like about older workers. Survey respondents said that older workers bring more work experience, more maturity or professionalism, a stronger work ethic, mentoring skills and more reliability.

There’s a lot to like about older workers. Survey respondents said that older workers bring more work experience (77 percent), more maturity or professionalism (71 percent), a stronger work ethic (70 percent), mentoring skills (63 percent) and more reliability (59 percent).

20

JULY 2015

In spite of these convictions, however, more than half of the survey respondents said they did not actively recruit older workers.

The ultimate irony is that many of today’s retirement-aged workers can’t, or choose not to, retire. Typical of the baby boom generation, which blazed trails in so many other areas of society, workers 55 and older are rethinking retirement, the workplace and employment.

A recent report published by the Federal Reserve found that while over half of retirees followed the traditional retirement model, only 26 percent of workers who have thought about retirement plan to follow their lead. In fact, workers in their 20s and 30s say they’re more interested in following the traditional retirement path; only 15 percent of people in their 60s or older plan to jump from a full-time job into retirement.

So what are they doing instead? The Fed report finds that these non-traditional thinkers are “doing” retirement on their terms.

Alternatives include, working for themselves (10 percent), and cutting back on hours (10 percent). Another 6 percent said they never plan to retire at all.

This is great news for insurance, and especially independent agents and brokers, which are especially vulnerable to losing talent to retirement.

However, the disconnect between how businesses can benefit from older workers and what they’re doing about hiring and keeping them will keep both sides of the equation from benefiting from what could be a mutually satisfactory arrangement.

U.S. businesses need to take off the blinders and put aside their ageist attitudes with the goal of creating a working environment where talented people of all ages can learn from each other. n

THE WAHVE CRAZE AGENCY OWNERS nationwide are getting caught up the Work At Home Vintage Employees (WAHVE) craze.

The unique, contract-staffing solution pairs experienced “pre-retiree” insurance agents with independent agencies that need staffing support without the commitment, time and cost of a full-fledged hiring process.

Whaves (as the contract employees are called) are located throughout the United States but work remotely. Common job duties include customer service or process work in support of CSRs, account managers and producers.

As an IA&B-member agency, you are entitled to a special offer: 50 percent off the one-time set-up fee.

IABforME.com/WAHVE

Written by Sharon Emek, president of Work at Home Vintage Employes (WAHVE). WAHVE (www.wahve.com) is a unique, cost-saving, remote contract staffing talent solutions for the insurance industry. Using an innovative work-at-home model, WAHVE employs skilled insurance retirees located in the U.S. who understand the industry’s technology, culture and language. By outsourcing to WAHVE, insurance firms can leverage these qualified, experienced, and technologically-savvy retirees to significantly lower costs and improve profitability.

21

R-E-S-P-E-C-T

FIND OUT WHAT IT MEANS TO ME A generational perspective

22

JULY 2015

I love talking to groups about generations in the workplace and the challenges it creates. Some experty experts find this a non-issue, but I respectfully disagree, with vigor. Almost every topic I teach these days, this issue of generations comes up in some way. And in those instances, it is typically a complaint about Millennials.

by Libby Spears

T

his makes sense of course because they are the new kids on the block (NKOTB: a little Gen X’er reference) and with that they are an unknown entity (which I find fascinating because most of them have Boomer parents, so why so much confusion?).

What I hear most often is this: “They are so entitled!” “Everyone expects a trophy for just showing up to work” “They have no work ethic”

book up to school when they forgot it and cried they wouldn’t be able to check a book out during library time, written their college essay, and rescued them any and every time they fell. And we gave them a trophy at the end of soccer season when their team’s record was 0-10. (When my daughter Maddie played soccer as a little one, she would get in the car and we would say, “Good game, but y’all lost.” Cruel? No way. The league may have not kept score but we did by God, and she would learn early what it felt like to lose versus when she was 20 years old.)

I can tell you this: There are upwards of 80 million Millennials in the United States, and more than 50 percent are in the workforce. How can we make such sweeping generalizations about 80 million people? Are you kidding me?

GENERATIONAL DIVIDE

A few years ago, while teaching a class on generations, I had a Millennial raise his hand about midway through the session.

Up to this point, he had said nothing. Not one word. I work very hard to create a classroom environment where one generation does not beat up the other, devolving into a finger pointing battle around who is right. In fact, I have a rule: If you say something critical of a generation, you must follow it with something nice.

AUTHOR LIBBY SPEARS’ take on the challenges of generational differences in the workplace strikes a chord.

Back to my Millennial. He raises his hand. I call on him. He says: “Everyone complains that we expect a trophy for just showing up.

But who was buying those trophies for us as kids? We weren’t. You were. You created this generation, and now you are complaining.”

You could have heard a pin drop.

Yes, that’s the cold, hard fact of the matter: We are to blame.

Boomers and Gen X’ers have wrapped this generation of Millennials in Saran wrap, knee pads and helmets. We have protected them from the mean kid on the playground, run their

When our boards of directors tasked us with researching members’ needs associated with young agents, our staff took a two-prong approach – talking with agency principals at our Member Agent Panel meetings and picking the brains of young agents at two get-togethers. Among other outcomes, both subsets of membership pointed to the need for intergenerational understanding and communication.

Watch for more information in the months ahead as we work on initiatives to meet the needs of agency principals struggling to manage a new generation of workers and the needs of young agents looking for a support network.

23

That brings me to a defining parent moment with my daughter Trinity.

When she was about 10 years old, I found myself getting onto her about something.

My mouthy and sassy child was crossing the line to which I said, “Trinity, you are being disrespectful.” Her reply? “Mom, if you want respect you have to give respect.”

By a show of hands, how many of you would have had your mouth slapped for a statement like that? Yeah, me too.

But I stopped in that moment and considered her statement. Instead of reacting I said, “Excuse me?” and Trinity told me the following: “We get in trouble for yelling, but you yell at us all the time.

We get in trouble for being sassy, but you are sassy all the time. It’s not fair.”

I learned some important things that day about my sweet Trinity: 1. Trinity’s core value is justice.

She does not care much for the whole “because I am older than you, you must respect me no matter what” mindset that generations before her were raised with. I remember as a kid feeling so helpless because I got in trouble for things I saw adults do all the time. But I didn’t say those things out loud because honestly, I would have gotten a beating. But we don’t beat our kids (and I can see my parents’ generation shaking their head in disbelief that we would not hit our kids as a discipline tool).

2. Millennials see themselves as equal players. My daughter’s generation (she is just at the tail end of Millennials) was raised to have conversations with adults. We trained our girls from an early age that when they meet adults, they should look them in the eye, introduce themselves clearly, and shake their hand. I don’t speak for my kids in the doctor’s office either. They do.

Mark and I do this because we want them to have great communication

24

skills. I want them to be assertive and speak up for themselves. That’s the upside. The potential downside is that they see themselves as an equal with adults. I say potential because it’s not good or bad. It just is.

RESPECT is a value of all generations.

How it is understood is different though for each generation. For Boomers, respect is given to anyone who is an “elder,” but for Millennials, they are more likely to approach respect as something that goes both ways and is earned through behaviors, character, etc.

Generations share many of the same core values, but their expression of the values is often different. We must all do the hard work to appreciate these differences and see their potential to make us better, together.

This content originally appeared on www.bravocc. com. It is reprinted with permission from the author, Libby Spears.

Spears aims to solve communication conundrums and shows others how to stand out in a crowded marketplace by using her two passions/gifts/talents/callings: teaching and entertaining. She is a self-proclaimed speaker, educator and rule breaker. The author of What’s Your Plan Be?, Spears presented at our spring CSR Evolution seminar. Learn more at www.bravocc.com.

Here’s to great conversations and finding common ground! n

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That’s what mutual success is all about.

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