Resources Magazine Summer 2016 by resourcesmagazine

BECOME A PRODUCING

BEAST OCTOBER 2–14, 2016

PRODUCER SCHOOL. OCTOBER 2–14, 2016 • DALLAS, TX Producer School is all about transforming YOU to sell better and sell smarter. We’ll help you build the confidence, sales skills, and insurance knowledge that will improve your ability to identify valuable new prospects and grow existing ones. After

2–WEEKS TRAINING & PRACTICE

with the best coaches in the

industry, you’ll return to the office ready to ROAR! Seating for Producer School is limited. Be part of the next group of elite producers. Register now!

Find us on Facebook

Join us on LinkedIn

Contents FEATURES

4 The Wide, Wide World of Executive Liability

Ruble Specialty Topic Seminars

Update options focusing on industry niches

Business insurance to cover human risks

ALLIANCE NEWS

Free Webinars

Outstanding topics—filling up quickly

BY CHRIS CHRISTIAN, CIC, RPLU

CISR Elites

Honoring those who’ve gone above and beyond

20 Pathways to Success What will be your next move?

The Sun Never Sets

News about RIMS, Connections, Symposium

31 Ask Bettie

14 The Luster of Clusters

CIC expansion, CRM curriculum update

The what, why, and how of agency clustering

Dallas MEGA Seminar

BY ROY PHILLIPS, CIC, CISR, AAI, CPIA

A get-away that pays

COLUMNS

10 Tech Beat

In the Spotlight

Movin’ on up!

Agency Automation By Mark Stolly, CIC, CRM, CPCU

22 On a Personal Note

FEATURE

Mi Casa es Su Casa

26 Success

By Joann Clarke, CIC, CRM, CISR, CSRM, CPCU, ARM, AAI, CPIW, ARe

Story

28 Risky Business

Partners in education excellence— a game-changer for agents

Sell Total Cost of Risk—Not Insurance By David Quinn, CIC, CRM, ARM

34 HR Hotline The Undeniable Need for Effective Mentors By Mary Husk, CIC, CRM, CPCU

Website: www.TheNationalAlliance.com

EMAIL: alliance@scic.com

Phone: 800-633-2165

BY CHRIS CHRISTIAN, CIC, RPLU

4 Resources | Summer 2016

Disclaimer: This article is the opinion of Chris Christian and is provided for educational purposes only. Information provided is necessarily brief and paraphrased and is not legal advice. If any of the information provided conflicts with specific policy language, the policy language controls.

he terms “executive liability” and “management liability” were practically unheard of 30 years ago. Today, lines of insurance coverage catering to the needs of entities and executives for what used to be considered uninsurable business risks constitute a multibillion dollar industry.

This article is a brief introduction to the exposures addressed by executive and management liability coverages, and will provide you with a background to delve deeper into these specialty lines in the future. The terms “executive liability” and “management liability” are nearly interchangeable, but note that some of the coverages in this class pertain specifically to personal liability of individuals, and others pertain to liability of the entities themselves. The whole segment of the industry at large can be referred to as “executive liability” or “management liability” lines of coverage, as the actions in question all revolve around executive and managerial decision-making and

oversight. These coverages are a subset of the professional liability world, as they relate to standards of care, reliance on expertise, and malpractice allegations, rather than simple negligence. As with other forms of professional liability, coverage tends to be written on a claims-made basis, and losses are caused by “Wrongful Acts.” The core coverages of management liability insurance (MLI) were created in response to regulatory pressures that impacted both individuals (directors, officers, and fiduciaries of sponsored plans) and entities in ways that had not previously existed. As corporate America faced the possibility that Continued on page 6.

Resources | Summer 2016

Executive Liability

…continued from page 5.

these most needed individuals might not be willing to assume the responsibilities and liabilities of elevated positions in entities, insurance coverages were developed to protect them from personal liability, and later, to protect the entities from many claims, as well. This trend started in the 1960s and has picked up speed ever since. Let’s look at each of the major components of management liability:

Directors and Officers Liability: Then, Later, and Now As a trade-off for the protection of the corporate veil enjoyed by shareholders of entities, directors and officers of those entities are held personally liable for their wrongdoings. Similar concepts apply to Limited Liability Companies (LLCs), where the managing members are the equivalent of corporate directors. Managing or general partners also have exposures, but since partnership structures and exposures are a bit different from corporations and LLCs, they are outside the scope of this article. When Directors and Officers Liability (D&O) coverage first arrived on the scene in a big way, it was in response to Security and Exchange Commission regulations that threatened the willingness of qualified directors to serve on boards of publicly-traded companies. With a D&O policy in hand, a corporation could attract qualified directors and retain qualified officers, because the corporation’s ability to fund indemnification for claims brought against the individuals was more certain, and the policy also would provide indemnification in those cases where the corporation could or would not defend or indemnify the individual directors or officers. This desire to attract qualified board members also applied in the non-profit world, and policies have existed to protect non-profit directors, and often the entity as well, for quite some time. You can think of D&O liability as arising from “managerial malpractice” in the boardroom or C-suite.

6 Resources | Summer 2016

In response to certain court decisions, carriers started providing limited coverage for publicly-traded entities for the entity’s own liability in the mid-1990s. Shortly thereafter, carriers translated that concept to privately-held entities. Adding the entity as an insured on an executive liability policy changed the perspective of carriers from covering only the boardroom and officers to one of looking at the entity more broadly as an insured for its own mistakes in its role as a good corporate citizen. Those mistakes are always an outcome of errors or omissions in the management of the company—hence the term “management liability” was coined and became the flagship term for this entire line of business. Coverage for privately-held entities has flourished over the last 20 years and is now a critical part of any well-consid-

the Civil Rights Act. These changes, which included the availability of jury trials, and the granting of punitive damages awards, were favorable to the plaintiffs and set the stage for a sea of change in regulatory complaints and follow-on litigation regarding employment matters. A few carriers started rolling out EPL policies predominantly to larger companies that had robust Human Resources departments, policies, and procedures, and were able and willing to carry six-figure retentions. Those policies covered three major causes of action: Wrongful Termination, Sexual Harassment, and Discrimination. Some of the earliest offerings were for defense only. Within a few years, a couple of underwriting facilities offered terms that were more appropriate for companies with fewer than 50 employees, and EPL started to gather steam.

[D&O] coverage can address claims not only from shareholders or creditors, but from regulators, customers, vendors, competitors, and others. ered insurance program for all but the smallest, most closely held, and innocuous of insureds. This coverage can address claims not only from shareholders or creditors, but from regulators, customers, vendors, competitors, and others.

Employment Practices Liability: Human Resources Malpractice Coverage The mid-90s were a very exciting time for professional liability fans, because in addition to the advent of entity coverage and D&O policies for privatelyheld companies, this time frame also saw the development of Employment Practices Liability (EPL) coverage. EPL coverage sprang forth in response to the 1991 amendment to Title VII of

Coverage available under an EPL policy has expanded significantly over the years, and now commonly includes coverage for claims of discrimination or harassment made by third parties (customers, vendors, business invitees, etc.), workplace torts, and retaliation coverage. Some carriers also offer coverage for wage and hour violations (usually a defense sublimit), illegal immigration investigations, and other quirky regulatory situations in which an insured might find itself. Although EPL is a robust coverage with a broad footprint, there are still many insureds that do not carry an appropriate limit or have the right form for their needs. EPL is still just an infant—in insurance years—being just over 20 years old.

Fiduciary Liability: Benefits Malpractice As with directors and officers, fiduciaries are personally liable for their acts, due to legislative mandate. A fiduciary is a person who is legally responsible for the oversight and decision-making of retirement or health and welfare benefit plans that fall under the purview of the Employee Retirement Income Security Act of 1974 (ERISA). ERISA was passed in response to notable abuses in pension plan management in the 1960s and early 1970s. There are three types of insurance that hover around ERISA plans, and it’s important to be able to distinguish amongst them: Employee Benefits Liability (EBL) EBL is coverage for the entity and any employees that are involved in the administration of the plan. This includes such clerical duties as making sure that payroll deductions are properly processed to keep employees enrolled in their plans, explaining the benefits to the employees, and getting the employee enrollment forms processed properly. EBL can be added to a general liability policy in many cases, and it is also commonly included in fiduciary liability policies. When included in a fiduciary liability policy, this exposure is referred to as “administration” of the plan, which is part of the definition of “Wrongful Acts.” The term “Employee Benefits Liability” is generally not used in a fiduciary liability policy, which can lead to confusion when trying to determine if the coverage is being duplicated between a General Liability and a fiduciary liability policy. ERISA Bond The bond is required by law any time an insured has a pension or retirement plan. The amount required is set by formula up to a maximum, depending on the value of the assets in the plan. This is a specific type of employee dishonesty coverage. It can be purchased on a monoline basis, or as part of the insured’s crime policy, or the crime endorsement on their property policy or package. It is not part of an EBL en-

Learn More, Earn More Attend the CIC Personal Lines Institute to learn more about homeowners exposures and coverages. You can also learn more about the homeowners and dwelling policies in the CISR Insuring Personal Residential Property Course. And remember that The National Alliance Research Academy’s Property & Casualty Insurance Essentials book is also a good source of information about the homeowners and dwelling policies, as well as many other personal lines coverages (shop www.TheNationalAlliance.com/bookstore).

dorsement, nor is it part of a fiduciary liability policy. Fiduciary Liability Fiduciary liability (there are no nifty acronyms in common use for this line), is a liability policy written to address the personal liability of the fiduciaries, the employer, and the plans themselves. What is or is not a fiduciary or a liability thereof is actually the subject of frequent litigation. The Affordable Care Act expanded the definition of who is a fiduciary, and some of the duties that used to be considered merely administrative are now spilling over into the fiduciary liability bucket. This coverage is in flux and will remain so for some time. Typical fiduciary claims would include allegations such as the following: • Mishandling of funds • Provision of a healthcare plan that is not compliant with applicable regulations • Reclassifying employees as part-time to avoid having to provide healthcare insurance • Providing insufficient or inappropriate investment choices in retirement plans • Using an administrator that charges excessive fees

Crime: Beyond Employee Dishonesty Crime coverage has become a part of the management liability suite of products due to the positioning of the offering on a monoline basis. When an insured wants a higher limit or more

sophisticated coverage than the crime endorsement available in his package or property policy, a few monoline crime underwriters made their services available. These underwriting facilities frequently aligned themselves with underwriters providing management liability lines of coverage, and eventually some carriers started bundling crime into their management liability forms. One of the most common coverages sought in a standalone crime policy is that of coverage for theft of client property. Insureds may be concerned about this exposure from the perspective of employees stealing client property, or their concern could reach to the theft by others of client property (generally money or securities) for which they are responsible.

Kidnap, Ransom, Extortion, and Workplace Violence I like to call Kidnap, Ransom, and Extortion (KRE) coverage the ultimate executive protection policy, because it literally protects the executive from physical harm. KRE policies are worthy of their own article, as they are complex and cover so much more than just ransom. However, in brief, let’s make a note that they are generally written on a reimbursement basis, so if a ransom payment must be made, the insured still needs to scrape up the money. That can frequently be done by using the policy to secure a bank loan, if the insured entity does not have liquid assets. Extortion coverages can extend to threats against the insured’s physical plant, not just its personnel, and can also apply Continued on page 8. Resources | Summer 2016

Executive Liability

…continued from page 7.

to computer and data threats, so there can be some overlap here with cyber coverages. The most important thing about having a KRE policy, though, is that it gives the insured someone to call when the unthinkable happens. Unless the insured already has a hostage negotiation and retrieval team on retainer, the value of having people on tap that are experienced in dealing with these situations is immeasurable. Workplace violence coverage can be part of a KRE policy, or it can be an enhancement to a multi-line management liability policy. This coverage will assist an insured in preventing or responding to an incident of workplace violence, whether the action is perpetrated by an employee or third party.

Cyber as an Executive Risk Last, but not least, let’s discuss cyber liability as an executive risk. The term “cyber” can mean many things, from data to all computer-related activities. Right now, our insurance lexicon leads us to think of liability related to data breaches, and many carriers are providing policies or endorsements that address that exposure in some way. But cyber risk, whether liabilitydriven or not, can be so much more than that, and depending on what type of computer, internet, or network related disaster befalls an insured, D&O claims may follow the initial loss. Such claims will allege that the directors and officers failed to put into

place proper policies and procedures to protect subject data, or that they failed to put proper breach mitigation and response measures into place. Cyber policies may respond to these allegations, but it depends on how they’re framed. If a cyber liability policy won’t respond (or if there is no such policy in place), the insured may turn to a D&O policy for potential coverage. If the insured is a publicly-traded company whose stock price has dropped due to a breach or the mishandling of same, a cyber policy will

Can an executive risk policy cover some of the fallout? Possibly. If claims are brought against the insured by regulators or customers for misrepresenting the safety and security of the widget, that could be covered by a

…the scope of cyber exposures is so broad that we must never depend upon a cyber liability policy to address them all. be of no help at all in the subsequent stockholder or SEC actions. The SEC requires that publicly-traded entities protect their intellectual property, and if an entity’s intellectual property is stolen through a cyber breach, the cyber policy certainly is not going to cover it. In addition, if the entity does not have sufficient funding to recover the data and prevent infringement, they will certainly incur scrutiny from the regulators. Further, the scope of cyber exposures is so broad that we must never depend upon a cyber liability policy to address them all. For example, if your insured manufactures or distributes a

About the Author: Chris Christian, CIC, RPLU Chris Christian is a member of The National Alliance National Faculty. She stumbled into insurance in 1985 as a temporary worker in a bank-owned agency and got hooked on the delightful mix of legal concepts, contracts, sales, and services that comprise the industry. She has specialized in professional liability since 1991, working on the carrier and wholesaler sides. In addition to her daily practice of the art and science of wholesale brokering, Chris is a frequent contributor to industry publications, speaker at events and educational seminars, and the author of Cyber Insurance Basics, available on Amazon.

8 Resources | Summer 2016

connected widget that later is hacked with resulting mayhem, especially if it includes bodily injury, a cyber policy is generally not going to cover that loss. The insured’s products liability policy may also not cover it, depending on how that policy treats computer-driven losses.

properly written management liability policy. In many cases, the disasters that can befall us due to cyber attacks do not belong in any specific coverage line yet developed, so we are grasping at straws and hoping that some policy somewhere will pick up the loss. Over the next several years, we may well see clarification of these matters with some carriers rolling out cyber-specific exclusions while others add cyberspecific endorsements and embrace the exposures.

Conclusion As you can see from this overview, executive liability and management liability coverages run the gamut and address a lot of exposures that had previously been considered “business risk” and uninsurable. There’s no telling what exposures and coverages will develop next, but I have no doubt they will be interesting and will provide significant opportunities for carriers and agents to write more business, and for insureds to protect themselves against more causes of loss so they can enjoy greater financial security. n

Food & Beverage

Glendale, CA • July 25–26 Atlanta, GA • Oct. 3–4

Contractors

Minneapolis, MN • Aug. 3–4 Las Vegas, NV • Oct. 10–11

Small to Middle Market Charleston, SC • Oct. 3–4

Advanced Risk Management

Memphis, TN • Oct. 13–14

Cyber Risk

King of Prussia, PA • Sept. 22–23

Executive Risk

Charlotte, NC • Dec. 5–6

Large Commercial

Independence (Kansas City), MO • Nov. 3–4

Legal Concepts

Milwaukee, WI • Aug. 25–26

Truckers II (Annual MCIEF Conference) Orlando, FL • Sept. 29–30

• Identification of most commonly missed exposures • Characteristics and causes of food-borne illnesses • Safety measures to avoid food contamination • Important property coverages and most challenging liability issues • Construction contract analysis • Who is an insured for contractors • The contractors’ CGL Policy • Contractors property exposures and coverages • Review of property and liability coverage gaps • Learn the latest on e-commerce and executive risk coverages • Maximize your use of the latest technology to increase sales and services • Contractual risk transfer options • Crisis management/disaster planning • Legal liability and litigation trends • Intellectual property protection for agencies and companies • Identification of the most commonly missed exposures • Risk finance options for cyber exposures • Protecting sensitive and private client information against security breach • First-party and third-party coverages examined • Executive risk exposures • D&O coverages and endorsements • Fiduciary and employee benefits liability • Employment practices • Operational management risks • Property and casualty issues for the large account • Disaster preparedness planning • Adding value by adding risk management • Alternative funding mechanisms • Employment practices liability issues • Contractual risk transfer • Risk implications—leases, contracts, and hold-harmless agreements • Policy formation, interpretation, and indemnity principles • Review of changes in motor carrier regulation and the impace on insurance • Technology available to motor carriers to help their operations • Review of recent court cases and the effect on insurance providers • Panels of experts in this niche sharing their knowledge

Ruble Seminars are exclusively for dues-paid CICs, CRMs, and CPRMs.

Resources | Summer 2016

T E C H B E AT

MARK STOLLY, CIC, CRM, CPCU

Agency Automation The Past, Present, and Future

esterday

I remember the early days when we would sit and wait for the month-end financial statements to be delivered from our batch system vendor so we could review the income and expenses, browse account receivables, deliver statements to our insureds, and relish in the hopeful profits we generated from the previous month. All this information would be at our fingertips within three to four days of month-end. Needless to say, at that time we felt we were on the cutting edge of technology as an agency. In my experience as an agency owner, principal, and producer of a mid-sized independent agency in the Midwest, I look back at those days, shake my head, and marvel at where we’ve been, where we are today, and where we might be in the not-too-distant future. A common concern in our industry is that we don’t implement new technologies fast enough to see real change. If you look back at where we’ve been, it’s clear that the technology we did have and—more importantly—what we had and how effectively we were using it, drove good agencies to become better, and better agencies

Learn More, Earn More Learn more about agency workflow by attending a CISR Agency Operations Course. The CIC Agency Management Institute is a good opportunity to take a more involved look at agency productivity and effectiveness. And the Ruble Agency Management Practices Seminar provides an in-depth discussion of how to analyze your agency’s financial and productivity efficiencies and effectiveness.

10 Resources | Summer 2016

to become the best! This is just as important now as it was thirty years ago. Over the years, agencies have been able to replace the thought of “expense” regarding automation and technology costs and replace it with “investment,” similar to the process of hiring “good” people. Finding the right candidate in sales or service, with proper training and education, and providing a positive work environment with good feedback will pay dividends to the agency, as any good investment would. Finding and using your agency technology tools in the same way as we would with good team members is no different. Without these support systems in place there is an expense without the return. The simple formula becomes: bad automation with good people is an expense, good automation with bad people is an expense, but good automation with good people becomes an investment that generates a positive ROI (return on investment).

Today Independent insurance agency automation has improved immensely over the past 10 years. Technology changes have traditionally been slow to market, slow to adopt, and far from perfect, causing further delays. We were frustrated. Large annual and semi-annual software upgrades were the norm. As end-user independent agents, we looked forward to these events, usually surrounded with fanfare and excitement, followed many times with frustration due to the additional training needed to work it into our systems effectively. We accepted what came to market, but the frustration levels were quite high due to the imperfections. Although much effort had gone into standardization, being “independent” by nature often built roadblocks for real change.

We agents are no longer asking ourselves if these technologies should be implemented—we ask ourselves if we are effectively using these new “abilities.”

Today, technology improvements have moved into a new era. The problem of needing additional space to store information has been solved; the speed to access this data is also no longer the problem it once was. As a result, we now have more information at our disposal that can be retrieved faster than ever. We agents are no longer asking ourselves if these technologies should be implemented—we ask ourselves if we are effectively using these new “abilities.” In our office, we’re constantly attempting to be on the “cutting-edge” of technology. Whereas in the past, we ran to open our batch accounting month-end statements, today we are looking for the next advancement. Needless to say, we are far from the edge, but this is the exciting part of the business. The once or twice-a-year software improvements have been replaced with a seamless flow of system upgrades throughout the year. Each one improves the customer experience, provides better internal and external agency work flows, and most importantly, opens opportunities for the independent agency to focus on improving growth, service, and ultimately, profit.

• Agency staff development – Service, employee stratification, culture – Producers • Opportunities

Growth Can you measure production within the agency by producer, account manager, agency accounts, carrier, and type of business in real time? Use the powerful reporting tools available to help identify this type of data. The problem of relying on carrier data for this information is that you cannot aggregate it well nor identify interior sources. As a result, you will be making either delayed or improper decisions on how best to obtain your agency growth goals, which should be separate and apart from your carrier growth goals.

Profit

We look at each release in terms of how it will improve our sales, accounting systems, our policy management, and most importantly, our customer experiences. Breaking it apart, how are we using our automation system in order to maximize the efficiencies within these areas?

As an industry, many agencies look at profit in the short-term, but not the long-term. We recently upgraded our system to include image documentation, third-party policy check and processing, and a new communication (phone) system. All three of these have tremendous up-front costs and the big question has been our ROI (return on investment)? All three of these investments will improve our customer experiences, our agency culture, and hopefully open new opportunities that will result in faster and higher returns.

• Agency growth – Internal, external, organic • Profit – Return on investment • Customer experiences – Retention – Client relationships and culture

We recently upgraded our producer technology tools to be mobile. This cut across several platforms including our agency app, mobile tablets for all producers, website design with customer portals, and broadening our social presence to now include our own YouTube channel. Effectively measuring the use of these new technologies is just as important as was the Continued on page 12.

Resources | Summer 2016

Agency Automation…continued from page 11. decision to implement them. We have teams who are responsible to oversee these areas and report back on what is and is not working successfully. If something is not working well, we are quick to change as needed. We recently converted our producers to a new sales management platform that supports our mobility resources. When we are with prospects, we expect to use real-time tools while implementing sales and risk management opportunities; we can then begin aggregating the data, which in turn supports our carrier relationships. This has been successful for two reasons: 1) the technology finally supports the workflow, and 2) our agency culture no longer hopes for change, but rather expects change. Another major area of using automation effectively involves the service and processing in which most agencies “specialize.” We independent agents argue that our service sets us apart, and that the value we bring to our client is why our clients remain good loyal customers. This may be true, but I will argue that we all can provide better service and do so with less cost. Take some time to understand

how to implement these tools with strong knowledge-based teams who will demand quick response to market changes. What works today will not necessarily work tomorrow. Agents will identify their customer bases with attributes not even thought about today. Intuitive underwriting, interpersonal customer-based relationships, and the demand and ability to drive technology changes with the proper agency culture will lead to success. Being on the mobile platform that drives the customer to a good experience will be critical. A recent snow storm caused many loss of power claims in the Midwest. Over 70% of reported claims came to the agent through mobile tablets and smart phones. Your customer and or prospect will expect instant replies and follow-ups; the better agencies will use this technology to create proactive resources. Instant feedback will be the norm, not the expectation. We are learning to implement and effectively use new technologies with our automation systems. We need to understand this as investing, with the return on that investment

When we are with prospects, we expect to use real-time tools while implementing sales and risk management opportunities; we can then began aggregating the data, which in turn supports our carrier relationships. your internal work processes and the reasons why you do them. Most of us will discover that our higher, more productive account managers are tied down with remedial work. Staff stratification suggests that the most productive, higher-compensated staff members should not be spending their time on remedial work that could be done by lessercompensated staff members. However, proper work allocation is not always achieved. Reasons may include improper training, the inability to communicate, and often the misuse or non-use of available technology. I encourage agent friends to go out into our industry and talk to fellow agents who can help. Many times, we have leaned on our peers for help and understanding with how we can provide better service and deliver it at a lower cost to the agency. The National Alliance, state and national insurance organizations, and the user groups for our specific automation vendor network have always been great resources for us.

What’s Ahead? The successful independent agencies will continue to push for strong technology tools while, at the same time, know

12 Resources | Summer 2016

being directly correlated to how we are effectively implementing the usage. We must be willing to monitor activity and make changes as needed, while always considering innovations in the future. With this attitude, we should continue to see good agencies getting better, and the better agencies becoming the best! n

About the Author: Mark E. Stolly, CIC, CRM, CPCU Mark is a faculty member for The National Alliance. Having begun his insurance career in the mid-1970s, he is now a principal of Stolly Insurance Group (SIG) in Lima, Ohio—a five-generation family-owned agency founded in 1904.

President/Publisher William T. Hold, PhD, CIC, CPCU, CLU Editor-in-Chief/Senior Art Director Becky Keeling bkeeling@scic.com Managing Editor James R. Cuprisin, MBA, CIC, CRM, ARP jcuprisin@scic.com Department Editors Mary I. Husk, CIC, CRM, CPCU mhusk@scic.com Beverly A. Messer, CIC, CRM, CISR bmesser@scic.com Contributing Editors Mike Bown mbown@scic.com Carol Crysup, CISR Elite ccrysup@scic.com Contributing Designers Chuck Lickert Wendy Scoggins

May 4—Additional Insured Endorsement in the CGL Policy: Problems of the Named and Additional Insured Presented by Dwight Kealy, J.D., CIC—Go to http://irmka@scic.com to listen to the archived recording June 21—Construction Defects and the ISO CGL: A Matter of Policy Terms, Law, and Facts Presented by Gerald T. Hargrove, J.D., CIC, CPIA, FCLA, SCLA, PICS, LICS, CBIA

Resources is published by The National Alliance for Insurance Education & Research, P.O. Box 27027, Austin, TX 78755-2027, 800-633-2165, Fax: 512-349-6194, Internet: www.TheNationalAlliance.com, email: alliance@scic.com. At present, Resources is available to dues-paid Certified Insurance Counselors (CICs), Certified Insurance Service Representatives (CISRs), Certified Risk Managers (CRMs), Certified School Risk Managers (CSRMs), Certified Personal Risk Managers (CPRMs), and affiliates of The National Alliance Research Academy. Entire contents Copyright © 2016, The National Alliance for Insurance Education & Research. All rights reserved. Material in this publication may not be reproduced in any form without permission. Authorization to photocopy items for internal or personal use, or the internal or personal use of specific clients, is granted by The National Alliance, provided that the following words are included on any copy: “Reproduced from Resources with permission of The National Alliance for Insurance Education & Research.”

July 7—Uncertainty: Underwriting Unmanned Aerial Vehicles Presented by Richard S. Pitts, J.D.

Resources is designed to provide accurate and timely information in regard to the subject matter covered. It is published with the understanding that the publisher is not engaged in providing legal, accounting, or other professional services. If legal advice or other expertise is required, the services of a competent professional should be sought. The publisher has taken all reasonable steps to verify the accuracy and completeness of information contained in Resources. The publisher may not, however, be held responsible for any inaccuracies or omission of information in any article appearing in Resources.

November 1—Affordable Care Act Update Presented by Jerry E. Rhinehart, CIC, CLU, ChFC, RHU

The National Alliance Standards of Conduct: www. scic.com/about/Standards_of_Conduct

The National Alliance conducts FREE monthly webinars presented by outstanding faculty. Each webinar is conducted live from 12:30 pm–1:30 pm CST. Join us—for FREE—as we explore current topics of interest in insurance and risk management.

August 9 (Spanish)/August 10 (English)— The Risks of Hyperconnectivity—The Internet of Things Presented by Jesus Levy, CRM September 15—Grasping the Impact of Risk Management in Schools Presented by Judith Ann Robinson, CSRM October 11—Cyber Crime—What You Need to Know Presented by Chris Christian, CIC, RPLU

December 8—Lifestyle Exposures of the High Net Worth Client Presented by Nicole Nouhra Webinars fill up quickly—register online today:

www.TheNationalAlliance.com/webinars

Resources | Summer 2016

BY ROY PHILLIPS, CIC, CISR, AAI, CPIA he purpose of this article is to review and explore the potential benefits of agency “clustering”—a reemerging and attractive alternative to selling an agency to a larger agency or shutting the doors completely. While the concept of clustering has been around since the early 80s, agents now have more information about the formation and organization of a cluster, as well as a body of experience they can reference which demonstrates the pros and cons.

The Reasons for New Interest in Joining a Cluster: • Agents are becoming more aware of the need to grow in order to stay competitive and be better positioned to perpetuate their firms. • Agents are aware that larger market share is out of reach for many small firms, and clusters provide favorable positions in areas of commissions, contingents, and carrier programs that are specifically designed to attract prospective industries. • Agents—by virtue of their clustering—have broader skill sets in sales and marketing, allowing the cluster to access more flexibility and competencies in all the important roles for the financial management of agency assets. • Agents are gaining a better realization of both the importance of personnel recruitment and the subsequent training, supervision, and compensation of professional staff.

Learn More, Earn More Attend the Ruble Agency Management Practices Seminar to gain an in-depth understanding of what’s involved in perpetuations, mergers and acquisitions, and agency valuation. You can also learn about evaluating and managing the financial strength of an agency in a CIC Agency Management Institute. In addition, The National Alliance Research Academy’s publication, Starting, Buying, Selling, and Perpetuating Insurance Agencies, is full of valuable information about the process of agency acquisitions. Shop www.TheNationalAlliance. com/bookstore.

14 Resources | Summer 2016

• Agents have become more attuned to the significance of employee benefits sales, unique benefits marketing strategies, and the need to develop this vital revenue stream. • Agents need assistance in order to acquire profitably underwritten business that is available in their area of operation. That word, “cluster,” used to bring expressions of terror to carrier management—and rightly so, since many of the earlier clusters were simply for the purpose of accessing more markets. Unfortunately, to some agents, that meant more markets to turn away. That does not have to be the case. Carriers have a new marketing strategy. They want larger, well-managed,

[Carriers] want larger, well-managed, profitable, perpetuated agencies that can provide larger premium volumes with greater spread, producing profitable, underwritten business, at expense factors that are less than dealing with a multitude of smaller agencies. We at the American Association of Insurance Management Consultants (AAIMCo) have our own definition of an independent insurance agency cluster: a cluster is an organizational structure with the legal standing of a C-Corporation, S-Corporation, Limited Liability Company, or perhaps a partnership. Its purpose is to provide a single point of contact for insurance carriers, in select product lines, with sufficient premium volume, professionally managed, and offering the agency members economies of scale that successfully attain designed goals. I believe that the resurgence of interest in this structure has occurred due to the dynamics of insurance carrier consolidation and agency selection. In the past few months, I have received queries from some agents/agencies directly related to a rekindled interest in clusters. AAIMCo members noted recently that, over time, the agency distribution system has been significantly reduced as a result of many mergers and acquisitions. That should tell us something about the current, mature—yet staid and expensive—delivery system.

profitable, perpetuated agencies that can provide larger premium volumes with greater spread, producing profitable, underwritten business, at expense factors that are less than dealing with a multitude of smaller agencies. That’s the profile of today’s cluster. In defining the nature of “clusters,” we do not find any legal foundation—statutory or codified—which shows that a cluster is anything other than a word attached to a concept. For example, a cluster might be said to be the unification of separate elements in order to provide greater strength and benefit for the collective good. A simplistic example could be that of tree branches tied together—it is obvious that the cumulative strength of the bundled branches is the desired goal.

Further, the history of consolidations and outright acquisitions in the carrier arena from 1995 to 1997 clearly indicated the demise of many independent agency carriers, and therefore a decimation of many agency contracts. Think about this for a moment. Now that we have changed the culture of clustering and have, hopefully, gotten past the relative infamy of this innocuous term, “clustering,” let’s reinvestigate just what current-day clustering is all about. Clusters are nothing more than innovative legal organizations—as previously described—and created for a specific set of desirable goals. They may exist in a centralized form with all member agencies enjoying the convenience and cost effectiveness of a central service center. A cluster can be deployed in an urban or rural setting, and is a natural for member agencies whose area of operations ring a large city and are domiciled in its suburbs. The service center may be located within a member agency, or in a free-standing location—separate and apart from the member agencies. Clusters may provide client support services in personal lines, commercial lines, and/or related lines such as group, Continued on page 16. Resources | Summer 2016

The Luster of Clusters

…continued from page 15.

disability, and life products. They may also be computer-driven, providing immediate access to policy applications, coverages, claims, and pertinent renewal requirements. This may necessitate the expansion of system access to the insurance carrier, so the carrier may interface for policy input, printing, or downloading of data already captured by the individual carriers. In essence, a cluster is whatever member agents want it to be.

• The major carrier was represented in all three agencies and had embraced the concept, endorsing the effort (a real benefit).

For our more cautious readers, let’s take a look at an example of our experience with the formation of a new cluster.

• There was youth in two of the member agencies—an important element needed to nurture our older established industry.

During our initial contact with the agencies, we developed the following information: • There were three agencies with long-standing personal relationships between the individual owners. • These agencies had a desire to form an alliance that would place them in a collective, proactive role to meet the dynamics of insurance carriers’ future planning. • They developed account rounding in personal lines with a professionally managed effort to include this important product line. • The agencies became the single point of contact between select carriers and the client, therefore meeting higher volume requirements while offering greater potential, market stability, and competitive pricing. • They encompassed their goals in a professionally managed profit center—often organized in a separate C-Corporation— with a member agency management team to oversee and assure its success. • The agencies coordinated their clustering efforts to align with the efforts of carriers to establish their own service in order to deliver the product to the client, and the premium to the carrier, without duplication of carrier efforts. The agencies provided underwriting controls at the agency level by establishing a third-party, arms-length staff and manager to eliminate the potential erosion of carrier confidence in the new cluster. • The agencies offered select carriers an opportunity to recommend valued, but smaller, agencies that could assimilate their profitable books of business in order to meet premium volume objectives in a mutually cost-effective manner. • They developed a systemic method of due diligence in researching the pedigree of agencies that might wish to become member agencies. Having said all this, where did we start? The prospective members provided their confidential and sensitive information to our consultant. With that data, we were able to conduct objective due diligence and establish why each party wanted to become part of the cluster. What if the financial, marketing, and management philosophy was not supported by the agencies’ management? If that were the case, our response would have been: Don’t do it! In this case, however, all of these essentials were present. • Each agency was solidly established in its own right, and had proven management skills.

16 Resources | Summer 2016

• The member agencies had comparable skill levels in the areas of finance, personnel, insurance markets, marketing, product knowledge, and operational management. (We were glad to see that!)

• Our three parties had several additional things going for them in this enterprise: they knew, liked, trusted, and respected each other. (Not bad qualities for any relationship, in our view.) Best of all, they came to the table with the realization that everyone would need to compromise, adjust, and contribute. With this context established, a natural sequence of steps were followed: Step One is the assembly of information from each party. This can be accomplished with what I call a “Cluster Development Study Checklist.” This checklist outlines the information that will help us assess the compatibility of all parties concerned. Here are the components of that study checklist: Cluster Development Study Checklist Gather from the potential members: 1. A list of major objectives 2. Answers to a questionnaire, covering the areas of: • Financial • Carrier representatives • Client base • Area of operations • Automation compatibility • History of agency • Background of members • Agency service staff personnel • Personnel contracts • E&O history Collecting this important information enabled us to analyze each of the functions to be integrated into the organizational structure. Step Two is the creation of a cluster candidate profile. Here is an example of a profile showing some of the depth explored by our consultant: Profile of a Potential Cluster Member • Owner age: 45–60 years old • $150,000–$300,000 salary range • $1.2–$4.0 million annual revenue • Six standard carriers • Nine specialty carriers

• One general manager • One IT specialist/accountant • No perpetuation plan • Owner doesn’t want to sell Step Three is where we schedule a site visit and meeting with potential cluster members. This may also include meeting with their chosen attorneys and CPAs. In this case, our site visit consisted of two days of education and examination. Although previously submitted, we took the editorial liberty to rewrite the agencies’ founding documents, which included the Mission Statement, Organizational Objectives, insurance carrier role, and pertinent job descriptions. We also recommended areas of responsibility to be assumed by the management team. These responsibilities mirrored the purpose and objectives of the newly-formed entity. And then we unveiled the cluster service center. Here’s how this final cluster looks: Organized as a C-Corporation, the cluster is licensed in the member’s state, meeting the departments of insurance codes, with its own E&O insurance naming the member agencies as additional insureds. Further, the cluster will sign contracts with selected carriers, receive

…clustering may be a valuable tool for the growth and profitability of your agency… direct bill statements and revenues, and distribute those revenues into the Income and Expense Statement of the service center, ultimately distributing the remaining profits to the three agencies. Ownership of the cluster is often a matter of working out the details. Here’s how it works in this example: each of the three agency owners have an equal equity position in the cluster. Each agency continues to own its own book of business and operates under a management agreement between the agency and the center. The center codes the business received to the appropriate source, and the direct billing statement identifies that source of business. The carrier will provide separate codes for each agency—thereby rendering a unique direct billing statement to each of the three member agencies—and will be requested to offer production and loss runs on each agency, as well as a consolidated statement indicating production and loss history. In addition, there are several contractual agreements that must be defined. They include:

• Each individual agency’s agreement with the cluster’s service center that defines their relationship as to ownership, compensation, duties, and responsibilities • Corporate documents that specifically define and address: 1. Membership requirements 2. Membership termination 3. Admittance of new members 4. Underwriting integrity 5. Company contracts/relationships 6. Profit sharing division of revenues 7. Niche marketing agreements 8. Competition for new accounts 9. Earned/audited premium collection 10. Data processing equipment/software • The establishment of “task forces” to identify and resolve problems and explore opportunities. Task force missions include: 1. Examination of all pertinent data to determine the marketing position of each carrier. 2. Determination of appointment of new carriers. 3. Determination of the termination of existing carriers. 4. Development of a system to investigate each prospective agency/agent who applies to the cluster to become a member. 5. Perpetuation planning/funding with appropriate documents defining terms. 6. Personnel staffing and training of service representatives. 7. Recruitment, screening, and compensation of additional producers. These are not the only areas where task forces may be employed, but they represent, in my opinion, the basic areas most likely to cause concern and friction. In conclusion, clustering may be a valuable tool for the growth and profitability of your agency, or it may not fit into your management philosophy. Whichever the case, clustering is back! n

About the Author: Colonel Roy L. Phillips, CIC, CISR, AAI, CPIA Roy Phillips is a 30-year member of the American Association of Insurance Management Consultants and co-author of Standards for Evaluation of Agencies. Mr. Phillips serves as an Officer and Director of King-Phillips Insurance Agency in Houston, TX. He served as an adjunct Professor of Insurance at the University of Houston and is often retained for expert witness testimony. Mr. Phillips also served as an officer in Special Forces and trained troops for 26 years.

Resources | Summer 2016

Stepping Up to Elite Status From the first to the latest, those who have earned the CISR Elite distinction stand as role-models for customer service representatives, account managers, and industry professionals. Not only have they successfully completed the five-course requirement to achieve the CISR designation, they have gone on to complete— and pass—all nine of the courses offered by the CISR Program. For their commitment to continuing professional education, each is recognized as a CISR Elite, meeting the highest standards for CSRs, anywhere. In this CISR 30th Anniversary year, all of us at The National Alliance salute their extraordinary accomplishment and contribution to our industry!

18 Resources | Summer 2016

Jeneshia Abrams, CISR Elite Lois Alderfer, CISR Elite Michelle Allen, CISR Elite Julie Allwardt, CISR Elite, AIS Rhonda Anders, CISR Elite Danielle Andre, CISR Elite Helen Andrews, CISR Elite, ACSR, CPIW, AINS, AIC, AIS Syrette Anthony, CISR Elite Lori Atuk, CISR Elite Elaine Audette, CISR Elite, CPIW, CRIS Dawn Augustine, CISR Elite Karen Basista, CISR Elite Melanie Begley, CISR Elite Lisa Benton, CISR Elite Allison Berna, CISR Elite Brook Bernier, CISR Elite Tracey Black, CISR Elite Susan Blum, CISR Elite, AIC Leslie Bodge, CISR Elite, AAI Linda Bomarito, CISR Elite Abigail Bonney, CISR Elite, CRIS Kristin Boruta, CISR Elite Adriane Boulware, CISR Elite Kimberly Buswell-Bradley, CISR Elite, AINS, AIS Richelle Cabral, CISR Elite Melinda Cannette, CISR Elite Rhonda Casteel, CISR Elite Kalynn Champagne, CISR Elite April Clemmer, CISR Elite Alicia Colon, CISR Elite Farrah Cork, CISR Elite Jeannie Cox, CISR Elite Maureen Cronin, CISR Elite Tasha Crusinberry, CISR Elite Carol Crysup, CISR Elite Jean D’Addario, CISR Elite, AAI Melissa Dalton, CISR Elite, AINS, AIS Donna Dates, CISR Elite Susan Davidheiser, CISR Elite Lyzain De Jesus Delgado, CISR Elite Jessica DeHart, CISR Elite Kevin Decker, CISR Elite Carrie Dennis, CISR Elite Jerilyn DiCanio, CISR Elite Terri Doremus, CISR Elite Carolyn Doughty, CISR Elite Kathleen Ducote, CISR Elite Nancy Duffy, CISR Elite

Bridgette Durbin, CISR Elite Steven Duvall, CISR Elite Jack Ecrement, CISR Elite, AIC Janelle Esparza, CISR Elite Angelina Estevene, CISR Elite Heidi Evans, CISR Elite Jessica Fager, CISR Elite, AINS, AIS, API Yodi Fagio, CISR Elite Lisa Farrell, CISR Elite Danielle Fett, CISR Elite, AINS, CPhT Cindy Frechette, CISR Elite, ACSR Laura Frye, CISR Elite Donna Funk, CISR Elite Doreen Gaines, CISR Elite, CRIS Rosanna Garrison, CISR Elite, AINS Melissa Gilbody, CISR Elite, CPIW Patricia Gilliland, CISR Elite Amanda Gilpin, CISR Elite Jennifer Glammeyer, CISR Elite Marco Gonzalez, CISR Elite Judith Guimond, CISR Elite Patricia Haase, CISR Elite Erin Hamilton, CISR Elite Karen Haney, CISR Elite D’one Hanisch, CISR Elite Evelyn Hara, CISR Elite Susana Haro, CISR Elite Eleanor Hayworth, CISR Elite Melanie Hennessee, CISR Elite Michele Hills, CISR Elite Linda Holland, CISR Elite Todd Holland, CISR Elite Bobbi Hollingshead, CISR Elite, AINS, AIS Carole Hoover CISR Elite, AAI Stephane Horstead CISR Elite May Huang CISR Elite Stacey Isenhour, CISR Elite, CPSR Kevin Jenkins, CISR Elite Joely Jones, CISR Elite Randy Jones, CISR Elite Wendy Jungbluth, CISR Elite Holly Kauffman, CISR Elite, AINS, AIS Linda Keene, CISR Elite, AINS, AIC Amy Kelley, CISR Elite Colleen Kelly, CISR Elite

Paul Kendall, CISR Elite Ashley Kendrick, CISR Elite, AIAM Pamela Keyes, CISR Elite Kaitlin Killacky, CISR Elite Lori King, CISR Elite Amy Kling, CISR Elite Tara Knight, CISR Elite Christine Knudson, CISR Elite Holly Kondas, CISR Elite Rosemary Kuczera, CISR Elite Crystal Kuenzler, CISR Elite, AINS Sarah Kurvers, CISR Elite Trina LaFollett, CISR Elite Sandra Lapasnick, CISR Elite Tiffany LeBlanc CISR Elite Gina Leander CISR Elite Natashia Lee CISR Elite Valerie Leonard CISR Elite Mitzi Lewis CISR Elite Adena Lightner, CISR Elite Tammy Lofthus, CISR Elite Angela Lollar, CISR Elite, CPIA Kim Ludwig, CISR Elite Michele Lutz, CISR Elite, CPIA Nicole Mapp CISR Elite Terri Marshall CISR Elite, AU, AINS, AIS Lynn Martinez CISR Elite Connie Martz CISR Elite Natalie Mason CISR Elite Andrea Mathisen CISR Elite Kelly McGowan CISR Elite Megan McQuade CISR Elite Leticia Mendez CISR Elite, CLCS Laura Meredith CISR Elite Brandon Miller, CISR Elite Joanna Miller, CISR Elite Brenda Mitchell, CISR Elite, ACSR Misty Molloy, CISR Elite Sabrina Morgan, CISR Elite Jessica Morin, CISR Elite Lauren Moser, CISR Elite Dawn Mott, CISR Elite Brittany Murray, CISR Elite Rita Nale, CISR Elite Erick Nauch, CISR Elite Jo Nece, CISR Elite, PHR, SHRM-CP, ADP-CPS Kay Newyear, CISR Elite Jessica Nunley, CISR Elite

Colleen O’Connor, CISR Elite, ACSR Vanessa Ocasio Negron, CISR Elite Kristi Oliver, CISR Elite Mary Olson, CISR Elite Ignacio Ortiz, CISR Elite Jennifer Osborn, CISR Elite Dara Parsons, CISR Elite Patricia Pei, CISR Elite Gayle Persson, CISR Elite Mallory Peterson, CISR Elite Hope Pfautz, CISR Elite Emily Pfeffer, CISR Elite Jelzen Pineda, CISR Elite Stephanie Portera, CISR Elite Ann-Marie Post, CISR Elite Melissa Poulimas, CISR Elite Heather Prestwood, CISR Elite Kristen Pruitt, CISR Elite Charice Quintana, CISR Elite Diane Racette CIC, CISR Elite, CPIW Cathy Radke, CISR Elite Susan Reardon, CISR Elite Angela Richards, CISR Elite Rhonda Richardson, CISR Elite, CPIW Deanette Richhart, CISR Elite Melissa Rios, CISR Elite, AINS, CLCS Iliana Rosario Huertas, CISR Elite Patricia Rose, CISR Elite Amy Roth, CISR Elite, CPCU, AAI Nadine Rowe, CISR Elite Katherine Rutsch, CISR Elite Kelly Salmon, CISR Elite Jennifer Scarberry, CISR Elite, AAI, ACSR, CPIW Amy Schmidt, CISR Elite Jenny Schuller, CISR Elite Lisa Scott, CISR Elite Laura Sharples, CISR Elite Tammy Shelton, CISR Elite Robyn Shook, CISR Elite Renee Sibilia, CISR Elite Jason Silver, CISR Elite Linda Simpleman, CISR Elite

Kimberly Skarren, CISR Elite Diane Smith, CISR Elite, AINS, AIS, API Denise Snyder, CISR Elite Susan Sorensen, CISR Elite Dawn Steinmann, CISR Elite Christy Stewart, CISR Elite Robyn Stewart, CISR Elite Kathryn Stjernstrom, CISR Elite Shannon Suber, CISR Elite, ACSR, CRIS Jennifer Sultner, CISR Elite, AINS, AIS Blanca Svatek, CISR Elite Heather Sword, CISR Elite Kimberly Tate, CISR Elite Nicole Taylor, CISR Elite Crystal Temple, CISR Elite Carlos Torres Bonilla, CISR Elite Careli Trani Valentin, CISR Elite Leo Travers CIC, CISR Elite Sandy Travis, CISR Elite Blake Vaughan, CISR Elite Karen Villafane Rodriguez, CISR Elite Jesie VonGehlken, CISR Elite Diana Vuksic-Harris CIC, CISR Elite, AAI, AIS Sheila Waguespack, CISR Elite Melissa Walker, CISR Elite Tracie Ward, CISR Elite Christina Webb, CISR Elite Nicole Weber, CISR Elite Alexander Weinberger CIC, CISR Elite Jennifer Whisler, CISR Elite, API Dorothy White, CISR Elite, CPIA, CPPL Irene Wickert, CISR Elite Sherry Wiley, CISR Elite Sidney Wilson, CISR Elite, AAI, AIS Diane Wojcik, CISR Elite Leigh Woods, CISR Elite Ashley Workman, CISR Elite Vicki Young, CISR Elite, CPSR Connie Zeo, CISR Elite

Salute! Resources | Summer 2016

Pathways National Alliance Programs Prestigious designations and career development for all insurance and risk management professionals. As a National Alliance designee, you already understand the value and pride of obtaining a professional insurance or risk management designation. Reaching far beyond mere CE requirements, your commitment to life-long continuing education is a symbol of your dedication to your customers, your employer, and yourself. What will be your next move? Dozens of National Alliance education opportunities await you and your team. Pursue an additional designation to broaden your repertoire; let us help train your producers and bring your newto-the industry employees up-to-speed; reduce your E&O risks by training your team; fine-tune your sales culture for profitable results; stock your reference library with top-notch reference materials and publications; and increase customer (and employee) retention with valuable customer service skills. Our programs are known—first and foremost—for their “put-itto-use today” practicality, as well as their affordability and accessibility. Some provide the best networking value when presented in a classroom setting, while many others maximize convenience with a choice of classroom or online formats; and the majority of our programs can be customized for in-house group training. All are taught by practicing industry professionals, using regularly-updated curricula. The National Alliance now offers five highly-respected and internationallyrecognized professional designations: • Certified Insurance Counselor (CIC) • Certified Risk Manager (CRM) • NEW Certified Personal Risk Manager (CPRM) • Certified Insurance Service Representative (CISR) • Certified School Risk Manager (CSRM)

20 Resources | Summer 2016

Certified Insurance Counselor

Certified Risk Manager

NEW Certified Personal Risk Manager

(CIC) Designation Program 20-Hour Classroom or Online Topics

(CRM) Designation Program 20-Hour Classroom or Online Topics

(CPRM) Designation Program 16-Hour Classroom Topics

• Personal Lines • Commercial Casualty • Commercial Property • Agency Management • Life & Health

• Principles of Risk Mgt. • Control of Risk • Analysis of Risk • Financing of Risk • Practice of Risk Mgt.

University Associate CIC

University Associate CRM

(UACIC) Designation Program (2 parts of CIC)

(UACRM) Designation Program (2 parts of CRM)

• Personal Client Risk Mgt. • Understanding Coverage Differences • Evaluating and Protecting the Lifestyle • Practical Application of Personal Risk Mgt. • Winning the Business

THE NATIONAL RESEARCH AC

RISK AND INSURAN

The National Alliance Research Academy

James K. Ruble Seminars Advanced 16-Hour Classroom Topics for CICs and CRMs • Advanced Risk Management • Agency Management Practices • Contractors • Cyber Risk • Executive Risk • Financial Institutions • Food & Beverage • Graduate

• Healthcare Providers • Large Commercial • Legal Concepts • Managing People • MEGA • Small to Middle Market • Truckers I • Truckers II

Advanced education opportunities: • William T. Hold Seminars (open to all) • James K. Ruble Seminars (exclusively for CICs, CRMs, and CPRMs) World-class sales and producer training: • Dynamics Series Sales Training Programs • P&C School for Producer Development • Employee Benefits Producer Training Programs for university students and those new to the industry: • University Associate CIC (UACIC) • University Associate CRM (UACRM) • Introductory Series

Industry Research and Advancement Shop from a wide selection of books, eBooks, studies, CDs, DVDs at www.TheNationalAlliance.com/ bookstore

Websites, publications, career assistance, and industry advancement: • The National Alliance Research Academy • Knowledge Alliance (http://irmka.scic.com) • My Career Advancement (www.MyCareerAdvancement.com) • Careers For Life (www.CareersForLife.com) Visit www.TheNationalAlliance.com for complete schedules, details about our programs, and to register for your next update. And remember to recommend National Alliance programs to your team members, friends, and colleagues!

to Success

www.TheNationalAlliance.com Call toll-free: 800-633-2165 • Email: alliance@scic.com

Our Licensed-Partner Organizations Certified Insurance Service Representative (CISR) Designation Program Classroom or Online Topics (choose five of nine courses) • Commercial Casualty I— CGL, Additional Insureds • Commercial Casualty II— BAP, WC, Excess Liability • Insuring Commercial Property • Insuring Personal Auto Exposures • Insuring Personal Residential Property • Personal Lines Miscellaneous • Life & Health Essentials • Elements of Risk Mgt. • Agency Operations

CISR Elite

Pass all nine CISR courses

Dynamics of Service 7-Hour Classroom Topic

Insuring Flood Exposures— NFIP Review Online or Classroom; Hours Vary

Ethics Online; Hours Vary

Certified School Risk Manager (CSRM) Designation Program 8-Hour Classroom or Online Topics • Fundamentals of Risk Mgt. • Measuring School Risks • Handling School Risks • Funding School Risks • Administering School Risks

William T. Hold Seminars Advanced Programs 7-Hour Classroom Topics: • Commercial Lines • Personal Lines • Multi Lines • Risk Management 4-Hour Online Classroom Topics: • Understanding School Employment Liability Practices • Effective School Crisis Management • Bullying Prevention: Solutions for Your Schools • Workers Compensation: Claims and Cost Containment 4-Hour Online Topics: • Preparing for CIC—Personal Auto • Preparing for CIC— Homeowners • Life Insurance • Health Insurance • Disability Income & Long-Term Care Insurance • Spoilage, Utilities, and Ordinance or Law • HO Property Endorsements • Insuring “Toys” • Professional Liability Concepts • Workers Compensation • Additional Insureds/Certificates of Insurance • Employment Practices Liability • Commercial General Liability • Business Auto Policy • Liquor Liability

Providing sales education to insurance leaders.

Dynamics Series 20-Hour Classroom Topics • Dynamics of Selling • Dynamics of Sales Mgt. • Dynamics of Company/Agency Relationships

P&C School for Producer Development 2-Week Classroom Course

Employee Benefits Producer Training 10-Day Classroom Course

Introductory Series* 3-Hour Online Topics • Introduction to Property & Casualty Insurance • Introduction to Commercial Property Insurance • Introduction to Commercial Casualty Insurance • Introduction to Personal Auto Insurance • Introduction to Commercial Miscellaneous Exposures and Coverages • Introduction to Personal Residential Property • Introduction to Life & Health Insurance • Introduction to Employee Benefits—An Overview • Introduction to Employee Benefit Retirement Plans • Introduction to Employee Benefit Healthcare

In many states, The National Alliance partners with professional state organizations to present certain CE programs in that state. We appreciate these licensee organizations and their spirit of cooperation as we work together to bring the number one insurance and risk management continuing education programs to their areas. Alabama IIA, Inc. IIAB of Arizona, Inc. IIA of Arkansas PIIA of Colorado, Inc. PIA of Connecticut, Inc. Florida AIA PIA of Georgia, Inc. IIA of Illinois IIA of Indiana, Inc. PIA of Indiana, Inc. Kansas AIA IIA of Kentucky, Inc. PIA of Kentucky, Inc. PIA of Louisiana, Inc. Massachusetts AIA Michigan AIA Minnesota IIAB Missouri AIA Montana Insurance Education Foundation IIA of Nebraska PIA of Nebraska & Iowa PIA of New Jersey, Inc. PIA of New York State, Inc. IIA of North Carolina Ohio Insurance Agents Association IIA of Oklahoma PIA Western Alliance Insurance Agents & Brokers of PA, MD, & DE PIA of Puerto Rico and the Caribbean IIAB of South Carolina Insurors of Tennessee TASBO Utah AIIA PIA of Virginia & DC PIA of Wisconsin, Inc. Wisconsin Association of School Business Officials Washington Association of School Business Officials Association of Wyoming Insurance Agents

Resources | Summer 2016

ON A PERSONAL NOTE

JOANN CLARKE, CIC, CRM, CISR, CSRM, CPCU, ARM, AAI , CPIW, ARe

Mi Casa es Su Casa (My House is Your House)

Popularity of the Short-Term Rental

he 2015, U.S. Open PGA Tournament in Washington state provided golf enthusiasts the opportunity to enjoy a spectacular view of Puget Sound while watching their favorite golfer battle a challenging course. This tournament also provided homeowners the opportunity to generate revenue by renting their homes to any of the thousands of people attending the event. Even those who would never have imagined renting their home to complete strangers were swayed by the amount of money that could be made. One of the online companies specializing in home rentals by owners during special events had hundreds of listings, with many of them exceeding $2,000 per night. When a client decides to rent their home through one of the many online rental companies or online networks, they don’t typically think to call their insurance professional first to find out if special insurance is needed or if their insurance coverage is jeopardized. After all, what could really go wrong? • Joe and Bobbi return to their home after renting it for a week during a national sporting event. They discover some of their belongings are missing.

Learn More, Earn More To gain an in-depth understanding of the ISO Homeowners Policy, attend a CIC Personal Lines Institute. The CISR Insuring Personal Residential Property Course also covers the Homeowners Policy, as well as tenants exposures and coverages. Consider purchasing The National Alliance Research Academy’s P&C Insurance Essentials book for details on Homeowner’s coverages and other personal lines coverages.

22 Resources | Summer 2016

• Matt returns to his high-end condo only to discover it had clearly been used as a party scene for the weekend it had been rented. There is substantial damage to the carpet, furniture, and walls. • Jay’s rental arrangement included the tenant’s use of Jay’s personal watercraft. The tenant was injured while operating the watercraft. The protection afforded by the ISO Homeowners 3 – Special Form policy is in jeopardy when the residence is rented on a short-term basis, as there are both property and liability limitations that may apply. Let’s examine this policy for coverage while a home is rented on a short-term basis. Property As coverage for the Dwelling is on an open peril basis, any damage to the house itself is covered unless excluded. In the “party condo” loss, the damage to the building itself is not excluded since there is not an exclusion to take coverage away. The loss to the personal property is covered as long as the cause of loss is determined to be vandalism or malicious Vandalism: Willful or ignorant mischief or one of the other destruction of public or private property. named perils. While theft is one of the named perils, it Malicious Mischief: The common-law misdemeanor includes a significant limitaof intentionally destroying or tion! There is no coverage for damaging another’s property. the theft of personal property Source: Black’s Law Dictionary from that part of the residence premises rented to others. When the entire residence is rented, there is no coverage for theft of personal property from any part of the residence. Liability There are two questions that need to be answered before coverage can be determined.

The protection afforded by the ISO Homeowners 3 – Special Form policy is in jeopardy when the residence is rented on a short-term basis… 1. Is the rental of the residence a business, as defined in the policy?

Coverage, many policies automatically include this valuable protection.

• The definition of business includes any activity engaged in for money or other compensation unless the client received $2,000 or less in the 12 months before the beginning of the policy period.

Amenities Does the rental arrangement include the tenant’s use of recreational vehicles and/or watercraft? Don’t forget that the homeowners policy excludes coverage for an otherwise covered recreational vehicle or watercraft if rented to others.

2. Is the house only occasionally rented or held for rental? • If the rental is a business by definition, the Coverage E – Personal Liability and Coverage F – Medical Payments To Others business exclusion applies. However, there is an exception for the rental or the holding for rental of the house on an occasional basis for use as a residence. When this is the situation, liability coverage continues to be provided, subject to any other applicable exclusion. • What is occasional? The common definition of occasional means done infrequently and irregularly. Does this mean renting the house once a year? Twice a year? While the courts will typically rule in favor of the insured when the language is ambiguous, waiting on that decision to take place after a loss has occurred is not the desired situation. If it is determined the rental or holding for rental was on more than an occasional basis, liability coverage would not be provided. Personal Injury Exposures Personal injury coverage for this exposure is a must! Clients need the protection in the event the tenant makes a claim against them for wrongful eviction, wrongful entry, or the invasion of the right of private occupancy. Coverage may also be needed if the tenant is unhappy with the online review of the tenant given by the homeowner, resulting in a libel suit. While ISO requires an endorsement for Personal Injury

Protection Provided By Online Home Rental Service While insurance protection may be available from the online home rental service, the client should read the contract carefully so they understand what property is limited or excluded, as well as their responsibilities in the event of damage to their property.

Home-Sharing Endorsements There are insurance companies that offer endorsements to provide coverage for clients who occasionally rent their home to others through an online service. This endorsement typically removes the exclusions discussed previously and may also give back coverage for watercraft and/or recreational vehicles while rented to others. As these are non-standard forms, they need to be closely analyzed to determine the coverage actually provided.

Non-Insurance Related Considerations In addition to the more traditional types of losses occurring when a home is rented to others, clients need to be aware of the local/state laws that apply. An individual in California learned the hard way that renting for a period longer than 30 days gave the tenant rights to occupy the house even when Continued on page 24. Resources | Summer 2016

Mi Casa es Su Casa …continued from page 23. failing to pay the rent. The homeowner was then forced to go through months of a costly legal battle to evict the tenant. Clients may also be required to have a business license and be responsible for collecting sales tax, paying tourist fees if applicable, paying B&O (business and occupation) taxes, etc. Many Homeowners Associations may prohibit the rental, as well.

Risk Management It is important to know when clients have this rental exposure. Include a question on new business and renewal questionnaires about renting their home to others through an online service or similar business. Be sure clients understand their exposures to loss and the coverage provided by their personal insurance. Consider making these recommendations to them: • Secure valuable personal property and confidential documents. • Use an established online rental service rather than advertising through social media. • Be aware of and comply with any applicable local or state laws.

Final Thoughts This type of home-sharing is not going away; it is here to stay. Identifying clients with this exposure is the only way you can begin to (1) properly counsel them on their insurance protection, (2) obtain the coverage they need, and (3) help them reduce their exposures to loss through risk management. n

About the Author: JoAnn Clarke, CIC, CRM, CISR, CSRM, CPCU, ARM, AAI, CPIW, ARe JoAnn is the Personal Lines Academic Director for The National Alliance, in addition to being a National Faculty member and an Educational Consultant. She has been in the insurance industry for over 40 years, with past experience as an agency CSR, a marketing representative for an insurance company, a state regulator, a college faculty member, and the owner of a consulting practice.

24 Resources | Summer 2016

Through their generous donations, Academy Research Associates help fund and participate in the research and publication activities of The National Alliance Research Academy, and also assist in outreach efforts to attract students to the insurance industry through career-oriented programs offered in cooperation with various educational institutions. For more information about the benefits of becoming a Research Associate, contact William J. Hold at wjhold@scic.com, or call 800-633-2165, ext. 3325. Companies: AAA, Inc. All Risks American Agents Alliance Assurex Global Bancorp South Insurance Services, Inc. BB&T Insurance Services Bowen, Miclette & Britt Brown & Brown, Inc. CRC Insurance Services, Inc. Calhoun, Thomson, & Matza, LLP Disabled Veterans Insurance Careers (DVIC) HR&R Intergovernmental Pool Administration, Safety & Loss Control HUB International Hylant ISU Insurance Agency Network Insurance Technologies Corporation Jerry Montgomery Memorial Research Fund Keystone Insurers Group Marble Box MarketScout, Inc. McGriff, Seibles & Williams Patra Corporation Popular Insurance, Inc. Selective Insurance Group, Inc. State Auto Insurance Companies Synergy Comp Insurance Company United Valley Insurance Services USI Southwest

Velocify Westwood Trust Zurich North America Associations: Alabama IIA IIAB of Arizona PIIAC PIA of Connecticut IIAB of Delaware Florida AIA PIA of Georgia IIA of Illinois IIA of Indiana PIA of Indiana Kansas AIA IIA of Kentucky PIA of Kentucky IIAB of Maryland Massachusetts AIA Michigan AIA MIIAB Missouri AIA PIA of Nebraska and Iowa PIA of New Jersey PIA of New York State IIA of North Carolina Ohio Insurance Agents Association IIA of Oklahoma IIAB of Pennsylvania IIAB of South Carolina Insurors of Tennessee PIA of Virginia and D.C. PIA of Washington/ Oregon PIA of Wisconsin

The RIMS 2016 Annual Conference Each year, The National Alliance participates in the RIMS Annual Conference displaying a booth dedicated to the CRM Program, and welcoming any who are interested in a specialized education and designation in the ever-more interesting and necessary field of risk management. This year, The National Alliance Research Academy interviewed several of the risk management professionals in attendance at the Conference in San Diego, California. One interview was with Brian Elowe, the U.S. Client Executive Practice Leader from Marsh. Elowe presented at RIMS on the topic of “Leveraging Risk-Related Thought Leadership in Your Organization.” Marsh releases an annual study titled, “Excellence in Risk Management.” The latest study was released in April 2016, and looks at the impact of emerging risks and threats, including cyber exposures and regulation, and the resources available to identify and manage these risks. Another interview was with Laura Langone. Laura is a Senior Director of risk management and insurance at PayPal. She also serves as the chairperson of the Enterprise Risk Management Sub-Committee for RIMS National. In her interview Laura discussed her career, the risk management profession, and how the industry has changed over the years. Listen to these interviews, and others, presented as “Speaking Insurance” podcasts on the Insurance & Risk Management Knowledge Alliance website (http://irmka.scic.com). The website—made available to you by The National Alliance—presents industry-related articles, videos, and podcasts, and is another great resource to help you keep your knowledge up-todate and ready to serve your clients.

In late April, The National Alliance invited all of its licensed business partners (state-level insurance associations) from across the country to attend the biennial Connections Meeting, held this year at the Lakeway Resort & Spa in Austin, Texas. Representatives of twenty-six licensees gathered for three days to share ideas, hear about strategic directions, and participate in focused break-out sessions for Educational Consultants, Technology & Efficiencies, and Marketing. Extended time was provided for licensee representatives to interact in a think-tank environment, and evenings were dedicated to relaxed networking during meals, dancing to a live band, and a shuttle ride to downtown

Austin’s Sixth Street to attend Esther’s Follies—a lively improvisational show. The meeting was a great place for the kind of connections and collaboration that make National Alliance programs the nation’s top quality education with the broadest accessibility.

A Different Kind of Update: The 2016 Entrepreneurial Insurance Symposium Network. Learn. Be Inspired—and Get Update Credit! MarketScout’s 10th annual Entrepreneurial Insurance Symposium will be held Sept. 7–8, 2016, in Dallas, Texas, to promote innovation in the insurance industry. Until recently, our industry had long been in need of a thinktank, or incubator, supporting new insurance concepts and ideas. In response to that need, MarketScout, with support from The National Alliance, created the Entrepreneurial Insurance Symposium, where over 400 forward-thinking insurers,

intermediaries, and agents come together to share new ideas, trends, and concepts related to insurance distribution, underwriting, and automation. You won’t want to miss this exciting event—open to all insurance and risk management professionals. CIC and CRM designees who attend the entire two-day symposium can receive update credit. For more details and to register, visit https://www.scic.com/courses/eis.

Resources | Summer 2016

SUCCESS STORY

Partners in Education Excellence Farm Bureau Insurance and The National Alliance

n Tuesday, October 20, 2015, Farm Bureau Insurance offered an entirely new opportunity for its Game Changer agents. These exceptional agents are charged with expanding the commercial writings of the organization. With Farm Bureau’s long-term commitment to agent development and education, it was a top priority to provide these 100 agents with the premier education provided by the coveted Certified Insurance Counselor (CIC) designation program—a commitment that includes financial support for all five of the institutes for each

Michigan Farm Bureau CIC Institute

26 Resources | Summer 2016

of the agents. CEO Jim Robinson stated, “Michigan Farm Bureau Insurance has found that the CIC Program offers a solid foundation for commercial lines education. This forum will give our Game Changer agents the tools they will need to help us grow our commercial insurance footprint.” “At Farm Bureau Insurance we like to ask the question: ‘Customers can be insured, but are they protected?’ In a world of increasingly commoditized sales experiences, we believe that an apples-to-apples comparison is one of the most dan-

gerous experiences that a consumer can have. What if the apples are rotten? Proper coverage results in two parties coming together to assure that on someone’s worst day, we are their best friend. The greatest pathway to success in the insurance sales arena is to assure that a trusted agent and advisor has taken the time to consider all the risk. Agents simply need to have all the education and resources at their fingertips. This education investment makes sense when you hold agent distribution as a key priority in the war for market share,” said Vice President of Marketing, Vic Verchereau. These CIC institutes are one more step in Michigan Farm Bureau’s commitment to insurance education. According to Michigan Educational Consultant and Director of the Insurance Program at Olivet College, Carol Breed, J.D., CIC, CRM, CPCU, AAI, ASLI, Michigan Farm Bureau has always been very supportive of insurance education. “Michigan Farm Bureau has been the most consistent industry supporter of Olivet College’s insurance program; whenever we have a need, Farm Bureau Insurance is there to help us out.”

Left: Jim Robinson, CLU, FLMI, LLIF, Chief Executive Officer at Farm Bureau Insurance of Michigan; Center right: Carol Breed, J.D., CPCU, CIC, CRM, AAI, ASLI, Director of the Risk Management and Insurance Center/Professor of Insurance and Risk Management at Olivet College; Far right: Mike Nelson, AFIS, Farm Bureau Partners Group Manager

Michigan Farm Bureau is celebrating its fifth year of hosting high school students in an insurance class that meets at Farm Bureau’s Headquarters five days a week. “When we had a need for an industry partner for our high school insurance program, our first thought was Farm Bureau. They have graciously opened up their headquarters and even built us a classroom.

cational Consultant for the CIC institutes. There is something really special about leading these institutes with a group that already has such a strong relationship. They are an incredible support to each other,” remarked Carol Breed. The response from agents has been positive and brings forth a new appreciation for opportunities

“It’s incredible that Farm Bureau Insurance has committed to us in this way. It shows they really want to thrive in the commercial market and are giving us the tools to do so…” Farm Bureau is helping our young people understand the great career opportunities available in insurance through hosting our class, providing guest speakers, job shadowing, and internships. They are a great education partner,” added Breed. “I am delighted to be taking this education journey with these great agents. I will be acting as the Edu

like these. “Knowledge is king. This is a big undertaking for us at this time of year, but it’s not an opportunity we can pass up. I speak for many agents when I say that we really appreciate the offer. This designation is not cheap in any way. It’s incredible that Farm Bureau Insurance has committed to us in this way. It shows they really want to thrive in the commercial

market and are giving us the tools to do so,” said Randy Katerberg, an agent in the western region. “I’m so impressed at how this first round went. The engagement and camaraderie of the agents in this group is invigorating,” said Mike Nelson, AFIS, FB Partners Group manager. “This is the first step in a long journey and it could be difficult, but things that take time and effort are worth it. I’m very excited about the future for these agents and our commercial growth initiatives we have set forth this year.” Dino Gavanes, CIC, Director of Industry Relations with The National Alliance commented, “We’ve seen major national insurance brokers and insurers gather agents in one place for these reasons and possibly provide the opportunity free of charge to their agents, but nothing like this before from a Farm Bureau organization or a one-state insurer. Farm Bureau Insurance may even be the first of its kind to provide this to their agents. In fact, the way they’ve handled it at a terrific facility and paying for these classes is just outstanding. It shows the investment they have in their agents’ success.” n Resources | Summer 2016

RISKY BUSINESS

DAVID QUINN, CIC, CRM, ARM

Sell Total Cost of Risk— Not Insurance The Educated Agent’s Strategy for Tapping the Environmental Market

n today’s insurance market, niche players have an edge over generalists. Knowledgeable about specific markets, niche agents “talk the talk” of prospects and are a resource to clients, compared to generalists, who face a stiff learning curve before they can approach a prospective business opportunity. Instead of competing on lower insurance premiums, educated niche agents can offer clients a lower Total Cost of Risk (TCOR) through risk management. (Cost of risk usually includes insurance premiums, retained losses, risk management department costs, and outside services.) Providing insurance and risk management for environmental contractors and consultants is a niche with few specialists and many opportunities. Environmental risks range from underground storage tanks to brownfield (industrial land) projects, nationwide. Environmental business owners (individuals who work with the land, air, and water) are heavily regulated by the government, both at the state and federal levels, and their employees must be properly trained and certified. For environmental businesses that work in danger-

Learn More, Earn More To gain a comprehensive understanding of the risk management process, including total cost of risk, enroll in the CRM program. The National Alliance Research Academy’s book, Risk Management Essentials, is also an excellent resource for learning about risk management. Shop for this title, and many others, at www.TheNationalAlliance.com/bookstore.

28 Resources | Summer 2016

ous—sometimes toxic—environments, safety and prevention are major concerns. However, some environmental firms— particularly small to medium size firms with cost concerns— may not be as vigilant as they should be. Environmental risk can seem daunting to an agent seeking a niche opportunity, but it doesn’t have to be. The National Alliance of Environmental Specialists Insurance Program (NAESIP) is a unique program that educates agents about providing environmental insurance (www.naesip.com). Developed in conjunction with environmental consultants and contractors, NAESIP writes environmental exposures for both environmental firms as well as non-environmental businesses that have environmental exposures. It also provides a full range of insurance administration and risk control services. The American Society of Environmental Professionals (ASEP) enables agents and policyholders to access www.ASEPsafety. com for online tools that promote safety, education, loss control, and networking. Environmental risk management focuses on reducing the indirect costs of TCOR. Direct costs might include insurance, deductibles, and legal costs from uninsured claims. Indirect costs such as lawsuits, lost productivity due to accidents, or increased premiums due to claims that tend to be higher than direct costs. By helping business owners reduce indirect costs through risk management and prevention, insurance agents specializing in the environmental niche can help reduce owners’ overall insurance costs. Defining potential risk issues and measuring efforts to address them provides environmental business owners with more control and influence over their insurance, as well as other risk factors that greatly impact their bottom line. In

…there are still many small and mid-sized accounts that do not understand the value of the risk management tools and capabilities an agent can provide. addition, safety measures, education, and loss control tools help improve policyholders’ experience, which decreases the businesses’ TCOR and increases their profitability. According to Brian Brusoski, President of Keystone Program Group (a division of Keystone Insurers Group), “We have agents in nine states receiving TCOR training. We feel the environmental market represents an excellent opportunity for our partner agents to build their books of business. By training our agents to use the TCOR approach to environmental accounts, we hope to expand and build on our success in this niche.”

really understand the safety issues faced by environmental business owners.” Even with a receptive environmental business owner, it is a challenge for an agent to divert the owner’s focus from premium price alone. Crayon said, “There are two levels to implementing a change towards a safety culture. One is getting management’s buy-in, and the other is getting the employee buy-in. It can be difficult to convince someone, if they’re non-believers, of the potentials for a return on investment in safety. The unfortunate part, when it comes to health and safety, is that you can quantify an injury, but you can’t quantify a non-injury.”

Robert Kreilick, Jr., CEO of Summit Drilling Company, a provider of environmental drilling services, stated, “The most While some accounts have come to expect more services from important part of TCOR is the preventive piece of it. We’ve their insurance agencies, the fact is there are still many small really embraced health and safety, and and mid-sized accounts that do not uncommitted to it fully. Our behaviorderstand the value of the risk manageClient Benefits of Focusing on based health and safety program has ment tools and capabilities an agent can Total Cost of Risk (TCOR) permeated our entire organization and provide. They often focus on the end reduced our indirect costs. Instead of premium with little regard to the agent’s • Control and influence your looking at prevention as an expense, knowledge. A well-educated agent who insurance premiums. we look at it as an investment in our understands environmental risks can ef• Focus your training programs so future—reducing risk by investing in fectively communicate how the TCOR that you will positively impact health and safety. That investment has concept may have a greater impact on your bottom-line. paid dividends in improved employee lowering overall costs than a reduced • See the immediate financial morale and a cultural change within the premium. impact of your efforts toward organization. Plus, our experience mod controlling “risk” in your To help agents specializing in envihas gone down dramatically, which recompany. ronmental risks make their case, the flects on the bottom line.” National Alliance of Environmental • Measure your performance and Nationally-recognized OSHA safety speSpecialists Insurance Program has a the performance of those you cialist Denis Crayon, President of the long history of continually evaluating “hire” so you can reduce TCOR. Experience Safety Institute, expressed, its book of business to predict future • Help establish goals and “The environmental business segment claims. That data has enabled NAESIP objectives for becoming a more is growing rapidly, with everything from to establish tools to prevent and reduce profitable operation. drilling to tank pulling. I would strongclaim costs. This continual monitor• Make timely and informed ly encourage any insurance agent who ing of environmental risks began when decisions. wants to get involved in this segment to Continued on page 30.

Resources | Summer 2016

Sell Total Cost of Risk—Not Insurance…continued from page 29. the organization was regional and has expanded as it has become a national presence. The data ties together information from the claims adjuster, the insurance company, and the insured to determine how they can work together to prevent or lower claims. The data enables agents to better quantify the return on investment in health and safety because it is a real-life, customer-based analysis. Agents can point to actual experiences for other insureds and show tangible results in the form of better experience mods by using value-added safety tools. As agents grow their books of business in environmental risks, they are able to point to their own clients as proof of the value of the program and its focus on TCOR.

grams and more—is worth the up-front cost because it reduces the overall expense to their business. TCOR helps business owners better understand the impact of the direct expenses they incur to transfer and retain risk, and the overall indirect costs associated with having claims or incidents that interrupt the normal flow of business. Helping your environmental business owner clients understand TCOR allows them to really understand their risks and how major risk factors can reduce the profitability of their businesses. When it comes to environmental risks, focusing on TCOR, and not just the cost of premiums, is a win-win for the business owner and the agent. n

Kreilick said, “I can buy insurance from anybody, but I see the benefit of risk management. An agent who is educated about TCOR and presents how preventive safety measures can reduce direct and indirect costs provides an added value to my business. I don’t expect insurance agents to be safety experts themselves, but it makes a difference when they offer a program—via a consultant or online program— that can guide you and provide training. I want an agent who is doing more than just selling me insurance and reappearing at renewal time.” Using the principles of TCOR enables agents to show that the investment to prevent claims—fleet safety programs, safety training, health and safety, moisture control pro-

About the Author: David A. Quinn, CIC, CRM, ARM Dave Quinn has 28+ years as a retail insurance agent specializing in environmental and general commercial business. Quinn is the President of the National Alliance of Environmental Specialists Insurance Program (NAESIP) and is Executive Director of the American Society of Environmental Professionals which promotes safety, education, loss control, and networking opportunities for the environmental industry.

So what is your Total Cost of Risk? To better understand, one should review the preventative measures your company or organization is taking, the direct expenses you incur to transfer and retain risk, and the overall indirect costs associated with having claims and/or incidents that interrupt the normal flow of business. Preventative

Direct

Indirect

Toolbox Talks

Insurance Premiums

Lost Time

Safety Committee

Claims—Self-Insured Retentions or Deductible

Lost Growth

Pre-employment Screening

Claims—Not Covered

Lost Expertise

Personal Protective Equipment (PPE) Training

Experience Modification

Lost Profit

OSHA Training

Legal Expenses

Ability to Bid Jobs

Medical Monitoring

Time Away From Work

Legal—Contract Review

Company Morale

Indoor Air Quality (IAQ) Training

Supervisory Time

Hazardous Waste Operations and Emergency Response (HASWOPER) Training

Investigate Accidents

Fleet Safety

First Aid to Injured Worker

Wellness Program

Post-Accident Testing

Commercial Driver’s License (CDL) Program

Lawsuits/Contracts Certificate of Insurance Issues Medical Visits While on Light Duty Clean-up Costs Transportation Expenses Re-training Employees Increased Premiums Experience Modification Loss of Reputation “Goodwill”

30 Resources | Summer 2016

Dear Bettie, I understand that The National Alliance has big news about changes in the CIC Program. What are these changes and how will they affect me? —Paula Pyron, CIC Dear Paula, There are now two additional CIC institutes—you still need to complete only five to earn the CIC designation, but you may choose from seven options. These new institutes will allow you to more closely tailor your education to the work you do. They are also excellent choices for meeting your annual designation update. Here’s a quick review of the expansion: • The first new CIC institute, October 17–19, in Richardson (North Dallas), Texas, is Commercial Multiline. It will be coordinated with the Commercial Property and Commercial Casualty Institutes to include Businessowners Policy, Inland Marine, Crime, Cyber, EPL, and Umbrella/Excess topics. • The second new CIC institute, scheduled to roll out Summer 2017, is Insurance Company Operations.

Do you have a question to “Ask Bettie?” Bettie Duff, Senior Vice President of Customer Care, has been with us more than 35 years and is the person to contact for information on just about anything related to operations and procedures. Email your questions to: bduff@scic.com.

These new institutes mean that you can choose from seven options to focus your designation on an area of specialization—seven institutes, and the opportunity to substitute a Certified Risk Manager (CRM) Course or a Certified Personal Risk Manager (CPRM) Course for any one of the five required CIC institutes. You are not required to take the two additional institutes, but you will find them to be excellent update options. —Bettie Dear Bettie, I have heard that the CRM Principles of Risk Management Course has been improved. How do I find out more about the course and what the changes mean for my colleagues and me? —Carolyn Stapleton, CIC Dear Carolyn, The CRM Principles of Risk Management Course is the first of five courses (each offered in classroom and online formats) that comprise the CRM designation program. Collectively, the five courses describe and demonstrate the entire risk management process. This initial course has been significantly enhanced to help risk managers positively impact their organization’s bottom-line by continuing to build an arsenal of risk management tools that can be applied in the first and most important step of the risk management process—the identification of risk. Here’s what the newly revised curriculum means for you and your colleagues: • A more comprehensive understanding of the impact of an effective risk management program • Broadened discussion of risk identification methods, including explanations and examples of their application • Expanded dialogue about Enterprise Risk Management and how it differs from Traditional Risk Management approaches • Additional skill-building exercises that will allow students to assess their understanding of risk identification concepts • A more in-depth approach to recognizing and preparing to manage emerging risks The materials, faculty, curriculum, and practice exercises have all been sharpened to provide practical and proven methodologies for immediate use with present and prospective clients. You can find dates, locations, and enrollment information at www.TheNationalAlliance.com. —Bettie

Resources | Summer 2016

I like it my way. I like it mine.

Instructor-Led Courses I take courses from home Everything I learn is practical I learn directly from the best instructors I network with colleagues via the web My course has interactive exercises I don’t have to travel

... ... ... ... ... ...

Self-Paced Courses I can too. Same here. I work at my own pace. I pause, start, and stop when I want. Mine too. Me neither.

.LEARN THE WAY YOU LIKE IT.

ONLINE

.INSURANCE Instructor-Led • CIC Institutes • CRM Courses • 4-hr. William T. Hold Risk Management and Workers Comp Seminars 32 Resources | Summer 2016

& RISK MANAGEMENT

Self-Paced • CISR Courses • CSRM Courses • Flood • Ethics • 4-hr. William T. Hold Seminars • Introductory Series

James K. Ruble MEGA Seminar October 17–20, 2016 • Dallas, Texas The Dallas MEGA Seminar is an exciting corral of exceptional topics and faculty talents—a pick-and-choose bonanza that takes your education rodeo up a notch! It’s completely up to you to choose from more than 20 four-hour topics to make your schedule fit your individual plans. Whether you prefer to space out your sessions during the week, attend them all in two days so you can sightsee and relax, or squeeze in as many extra as you can, this is the place for you—and you get to decide.

MEGA Seminars offer many benefits, in addition to the wide variety of topic choices: • Meet your annual update requirement in a vibrant Texas metropolis. • Benefit from four days of transformative sessions for just $430. And if you want to stretch beyond the required 16 hours, you can do it at NO extra cost. • Network with a community of industry professionals who share your interests. • Understand industry trends so you are on the front-wave of them.

Advanced concentrations taught by expert faculty:

• Financial Institutions • Life and Health • And many more individual topics!

For study or recreation—luxury accommodations! We’re back at the Renaissance DallasRichardson Hotel—an extraordinary setting for learning, meaningful reunions, and new designees. Surrounded by a flourishing metropolis that features an exciting culinary scene, art districts, select entertainment venues, and sports and shopping opportunities, there are dozens of choices for your leisure-time and/or family-time. Renaissance Dallas–Richardson Hotel 900 East Lookout Drive Richardson, TX 75082 For reservations, call 972-367-2000 (ask for The National Alliance room block); $131 single/double accommodations; cutoff date 9/24/16.

• Property & Casualty • Risk Management

To view a detail agenda for this seminar, go to www.TheNationalAlliance.com. Ruble Seminars are exclusively for dues-paid CICs, CRMs, and CPRMs.

Resources | Summer 2016

HR HOTLINE

MARY HUSK, CIC, CRM, CPCU

The Undeniable Need for Effective Mentors Investing in Others Rewards All Involved

o you consider yourself a mentor? Your answer will likely be “Yes,” because at some point in your career, you have served as a mentor to others in the risk and insurance communities. Whether you have filled this role formally or informally, you have participated in mentorship activities that have resulted in the training and development of others. Perhaps your mentees have been new hires, employees stepping into different positions, those with changes in responsibilities, or peers who simply need or want to learn new skills. In any of these scenarios, you have dedicated time and effort toward the professional growth of others, just as others have done for you. According to Webster’s Dictionary, a “mentor” is “a wise and trusted guide or advisor.” Mentors are often bosses, supervisors, or team members asked to fill the role of mentor, or they can be fellow employees who voluntarily rise to the occasion. By providing valuable information, guidance, and support, mentors take under their wing those embarking on a new endeavor or new responsibility. It is important to recognize that there are mentors—and there are “effective” mentors. Those who are continually success-

Learn More, Earn More If you have practical experience and expertise in a risk management or insurance subject, and you enjoy teaching and training others, contact The National Alliance (www.TheNationalAlliance.com • 800-6332165) to learn more about faculty opportunities.

34 Resources | Summer 2016

ful in achieving desired results as intended are “effective” mentors. “Effective” mentors are seriously committed to their mentoring role with purpose and resolve. Demonstrating strong leadership skills, they further their careers and the careers of others. For insurance agencies, effective mentors are especially needed for the training of new producers. Typically, the agency owner or an experienced producer serves as mentor. For new CSRs or account managers, most often the department manager or an experienced service person does the mentoring.

The Art of Mentorship Whether impromptu or within an established structure, the role of the mentor carries considerable responsibility, including the following: 1. Training and teaching Sharing knowledge, expertise, and experience with others, mentors enable mentees to consider varying perspectives and approaches to learning. Both producers and CSRs need to learn insurance coverages and other aspects of the industry. 2. Being a role model Mentors carry the huge responsibility of representing their organization and industry in an exemplary manner. They are the “fish” in the “fishbowl” and must always behave in a professional and ethical manner. For example, CSRs must mentor new employees on how to communicate with difficult clients, and other communication skills. 3. Encouraging the setting of goals that are achievable A mentor’s first step is to collaborate with the mentee to establish goals that can be attained. Setting unrealistic goals

are counter-productive in the mentoring process. Establishing clear goals creates a roadmap to success. New producers need sales goals set so they can increase production on a quarterly basis during their first year or two. 4. Being available and accessible The mentor/mentee relationship can only succeed if the mentor is ready, available, and accessible for the mentee. The mentoring process requires considerable time of both parties. The mentoring process has a beginning, a middle, an end, and a beyond. It requires ongoing communication and conversation so that success is not achieved “only once,” but for years to come. Even though producers are often on the road and very busy, they still must be available for the people they are mentoring. Sometimes, all it takes is a short phone call, text, or e-mail to send the proper advice and suggestions. 5. Being a good listener Being a good listener is an art. The mentor must be respectful in listening to the mentee’s questions, insights, and observations. The mentor must encourage the mentee to speak and share their thoughts and ideas while the mentor listens intently. Also, with purpose, mentors listen to confirm the mentee’s understanding. When training a new CSR, all of the rules and procedures can get confusing. Allow the trainee time to ask questions and even make suggestions about the training process.

6. Providing a safe environment that is positive and supportive A safe environment is one in which the mentor provides positive support in a friendly manner enriched with encouragement. The mentee will always have the expectations that the mentor has the mentee’s best interests in mind. New producers, in particular, need positive feedback and encouragement, because they will inevitably have to deal with some rejection from prospects. Mentors can be especially helpful by providing suggestions for maintaining a positive attitude. 7. Giving relevant, honest, and constructive criticism and feedback The mentee has the greatest opportunity for success when the mentor offers constructive criticism and feedback that is pertinent to the performance of the mentee. Additionally, a mentor’s failure to provide both positive and negative feedback will give the mentee a false sense of success. The mentor’s goal is to motivate the mentee to make adjustments, resulting in continued improvement. A new producer needs sales tips from experienced producers. The experienced producer can advise about what should be said and how to say it. 8. Reviewing and reporting progress The mentoring process requires that the mentee’s progress be consistently reviewed. Mentors are accountable for reviewContinued on page 36.

…effective mentors are especially needed for the training of new producers.

Resources | Summer 2016

The Undeniable Need for Effective Mentors…continued from page 35. ing and reporting the mentee’s progress in achieving their goals. Both producers and CSRs have number goals which must be met, whether it’s sales or service. New employees need to know if they are staying on track with what is expected from them. Commitment to the mentor responsibilities highlighted above will effectively impact the mentee’s opportunity for success.

What’s In It for the Mentor? Why do people choose to become mentors? First and foremost, mentors recognize the value of mentoring. By sharing their knowledge and experience, mentors are “paying it back” and “paying it forward” to the industry. They are actively helping their mentees learn and grow at a faster rate than they could on their own. Nothing enriches knowledge and understanding of a subject or skill better than being able to teach it as a mentor. Learning is a two-way street; the understanding flows in both directions, because during the mentoring process, both mentor and mentee gain new ideas and perspectives.

Learning is a two-way street; the understanding flows in both directions…both mentor and mentee gain new ideas and perspectives. Undoubtedly, mentees find tremendous value in being mentored. Benefiting from the support, feedback, and guidance of the mentor, mentees are empowered to achieve their goals. They learn from the successes and failures of mentors as they prepare to face their own challenges with greater confidence and credibility.

tion’s personnel. It provides the framework for leadership and management training. Mentoring is no longer the sole responsibility of a mentee’s manager or supervisor. Coworkers, team members, and peers can be mentors. Consider establishing a formal mentoring program for your organization. There is enormous value for the mentor, mentee, the organization, the industry as a whole, and the consumers of our products and services. Remember, everyone is a mentor—the key is to become an “effective” mentor. Over the 47-year history of The National Alliance for Insurance Education & Research, more than 500 faculty members have been trained through a formal mentoring process. Currently, 220 mentors are actively involved in the mentoring of faculty candidates for Ruble Seminars and CIC, CRM, CISR, and CSRM programs. This process ensures that The National Alliance meets the needs of our program participants by continuing to develop outstanding faculty for the present and future. Make sure that the new employees in your organization are getting the mentoring they need. While mentors are often busy, they must realize that the time spent mentoring provides enormous value to all the participants and the entire organization. n

About the Author: Mary Husk, CIC, CRM, CPCU Mary is Vice President of The National Alliance for Insurance Education & Research. She manages global programs, the Certified Risk Managers International Program, and directs the development of new instructors and the National Faculty.

Not only is there value for mentors and mentees, the mentoring process also brings value to the organization. It positively impacts the organization’s health, growth, and perpetuation. It provides a more highly-trained work force and fosters more collaborative teams, resulting in improved quality of work as well as a competitive edge in the marketplace. As customers recognize the positive reputation of the organization, greater customer satisfaction is achieved. Efficiency and productivity is enhanced. Through the mentor’s feedback, training needs are further identified. Improved retention of employees will assist in the implementation of an effective perpetuation and succession plan. Today, mentoring is especially important for organizations because of the aging workforce in the insurance industry. Tremendous expertise exists within the industry that can be tapped for mentoring so that gaps in talent do not adversely impact the industry as a whole. Mentorship focuses on developing the expertise and experience of an organizaiStock.com/andrewgenn

36 Resources | Summer 2016

A Collection of Success Stories and Press Clippings from Around the World

IntheSpotlight Welcome: New Board Members for The National Alliance The National Alliance recently elected new members and officers for the Society of CIC Board of Governors; the Society of CISR Board of Governors; and The National Alliance Research Academy Board of Directors. Members serve six-year terms and Officers serve one-year terms in their executive board positions. CIC Board of Governors Chairman: Craig W. Sparks, CIC, Union Standard Insurance Group, Irving, TX Vice Chairman: Steven C. Pearson, CIC, CRM, ISU Insurance Agency Network, San Francisco, CA Member-at-Large: Jeannie Y. Hylant, CIC, Hylant Group, Inc., Toledo, OH Member-at-Large: Todd Jackson, CIC, CWCA, Jackson-McCormick Insurance, Lebanon, IN Immediate Past-Chairman: Kathleen Hicks, CIC, HR&R, LLC, San Angelo, TX Members: Jenny L. Bolt, CIC, Hub International Mountain States, Ltd., Missoula, MT Ray Bouchard, CIC, Bouchard Insurance, Clearwater, FL James F. Glasser, CIC, CRM, CPCU, Central Mutual Insurance Company, Inc., Waltham, MA Ramon D. Lloveras, CIC, CRM, J.D., LL.M., CFE Popular Insurance, San Juan, PR

Members: Jack H. Elliott, CIC, CISR, CRC Insurance Services, Birmingham, AL Carlos O. Olivencia, CIC, CRM, Carrion, Laffitte & Casellas, Inc., San Juan, PR Mary K. Russell, CIC, CISR, Higginbotham Insurance Agency, Fort Worth, TX Kim M. Swan, CIC, CISR, Brown & Brown, Inc., Phoenix, AZ Marilyn D. Williams, CIC, BB&T Insurance Services, St. Petersburg, FL National Alliance Research Academy Board of Directors Chairman: Kenneth L. Fields, CIC, MSM, CPCU, CLU, ChFC, State Auto Insurance Company, Columbus, OH Immediate Past-Chairman: Patrick F. Maroney, J.D., Tallahassee, FL Members: Brenda Goodwin, CPCU, CPIW, Willis North America, Nashville, TN Dr. Victor A. Puleo, Ph.D., CIC, CFP, University of Central Arkansas, Conway, AR

Gregory J. Massey, CIC, CRM, CPCU, ARM, CLCS, PMP, Zurich North America, New York, NY

Kevin Ray, CIC, AU, AINS, AIS, API, Erie Insurance Group, Erie, PA

Luis Felipe Barros y Villa, M.A., CRM, of GS Definición S.A. de C.V., Mexico City, MX

“Each of these new board members and officers are top industry professionals and leaders with extensive knowledge of our programs and designations. Their contributions to the growth of The National Alliance and practical understanding and experience of the insurance and risk management industry is invaluable. The guidance they provide for enrichment of the programs will benefit our participants and designees for years to come,” said William T. Hold, Ph.D., CIC, CPCU, CLU, President of The National Alliance.

CISR Board of Governors Chairman: Kathleen A. Fraley, CIC, CPIW, Medical Lake, WA Vice Chairman: Melvin A Russell, CIC, Heritage Insurance Company, Clearwater, FL Secretary: Linda H. Luka, CISR, CPCU, AAI, AINS, AIS, CIIP, DAE, CLP, West Bend Mutual Insurance, West Bend, WI Treasurer: Sharian L. Brown-Taylor, CIC, CISR, AIS, ACSR, AU, ASLI, AINS, DTM, Higginbotham— William Gammon Insurance, Austin, TX

Immediate Past-Chairman: Cristina I. PedrazaMartinez, J.D., CPA, CIC, CFE, Popular Insurance, San Juan, PR

Continued on page 38.

Resources | Summer 2016

A Collection of Success Stories and Press Clippings from Around the World

IntheSpotlight Young Agent Mentor

Nicole Broch Dedicated Educator

Adam Jackson, CIC, of Ron Jackson Insurance Agency, Inc., in Kalamazoo, MI, has been named Vice Chair of the Michigan Young Agents Council. He also serves on MAIA’s Task Forces for Strategic Planning and Technology. His strong work ethic and contributions to his state association, community, and the industry make him an ideal role model for other young agents.

CISR faculty member, Nicole Broch, CIC, CISR, PLCS, was named the Young New Professional of the Year at the International Association of Insurance Professionals (IAIP) Region V Conference held in Wisconsin in April. This prestigious award recognizes the accomplishments of a member of the Young New Professionals group who has made significant contributions in association affairs, involvement in education programs, industry involvement, and activities undertaken in their community.

From Way Out of Right Field CIC Committee members Emily Koleno, CIC, of Associated Insurance Services, LLC, and Randy Pipal, CIC, CRM, of Higgins & Rutledge Insurance, Inc., were at the Big “I” Legislative Conference with five other agents last week and caught Nationals baseball player Bryce Harper’s 100th home run ball. The ball was actually caught by Michael Martin’s wife, Misty, who, just before it was to be stolen by a man two rows down, handed it to her daughter, Lauren. They were escorted to a Nationals representative, who negotiated a postgame meet-andgreet with Harper in exchange for the ball. The entire group posed for photos in the Nationals’ clubhouse with Harper, who signed programs and hats and gave Lauren an autographed bat. Everyone had a ball!

PIA’s Young Agent of the Year Ryan Von Haden, CIC, of TRICOR Insurance in Madison, WI, has been selected by PIA National as the National Young Agent of The Year. Ryan has served as the Chair of the Young Professionals Club (YPC) of PIA of Wisconsin. He led the YPC as they increased their scholarship program from $500 per year to $25,000 per year for students entering the insurance profession. Earlier this year, Ryan was named to the prestigious “40 Under 40” list by In Business magazine and also honored by Insurance Business America magazine when they named him to their “100 Top Producers” list.

McClendon Appointed Chairman

Have you been “IntheSpotlight”? To submit an item for editorial consideration, send article with photo to: The National Alliance/Resources, P.O. Box 27027, Austin, TX 78755-2027, or email bkeeling@scic.com.

38 Resources | Summer 2016

Timothy L. McClendon, CIC, CWCA, Managing Partner with Hertel McClendon, LLP, in Fort Worth, TX, has been appointed Chairman of the IIABA’s Technical Conference Committee, which serves as a liaison between IIABA and various industry groups. Tim is a Distinguished National Alliance National Faculty member (having served more than 20 years), CIC and CISR mentor, and a past CISR Board member. He is also a past-Chairman of Mid-America Insurance Conference, and serves as an expert witness in insurance-related litigation.

www.TheNationalAlliance.com

PIA’s 2016 Professional Agent of the Year

PIACT Elects Officers and Directors

Augusto Russell, CIC, of Farmington, CT, has been named the 2016 Professional Agent of the Year by PIA National. Russell is a partner with May, Bonne & Walsh, Inc., located in Glastonbury, CT.

Five of the nine Connecticut independent insurance agents elected to serve as officers and directors of the PIA of Connecticut are CICs. We congratulate them all in their new leadership roles:

The PIA National Professional Agent of the Year award is the association’s highest national award of distinction. It is presented annually to one outstanding professional insurance agent. Russell has been an active member of PIACT since 2005, serving as its President in 2013–14. He has served with distinction on many PIA committees and was honored as the PIACT Professional Agent of the Year in 2015. His contributions to his community and industry have made him an exemplar for young agents and experienced colleagues alike.

Maurice Herndon Scholarship Winner Emily Koleno, CIC, of Associated Insurance Services in Boise, ID, was the recipient of the 2016 Maurice Herndon Scholarship funding her attendance at the Big “I” Legislative Conference held in Washington, D.C., in April. In addition to becoming operations manager at her agency in Boise, Koleno served as Chair of the community engagement team of Boise Young Professionals in 2015, leading 14 volunteer and three civic events that donated more than 800 volunteer hours to the community. She is a CIC/CISR Committee member, actively committed to Idaho Young Agents, and is pursuing both her CRM designation and MBA.

Congratulating Another First CISR Mauricio Ramirez Esteban, CRM, CISR, is not just the first CISR designee in Mexico; he is the first in all of Latin America! We are delighted to salute this international achievement and to thank Mauricio for his continuing support of both the CISR and CRM programs as they grow in Mexico. Mauricio’s agency is Excelencia Integral en Riesgos, in Zapopan, JAL, MX.

Get a digital copy of Resources magazine on your MyPage!

• Loretta Lesko, CIC, of Shelton, CT, is VP of operations for The DiMatteo Group in Shelton, and will serve as PIACT President for 2016–17. She is the VP of the Administrative/Nominations Committee, a member of the Executive/Budget & Finance Committee, and an ex-officio member of the Association Programs and the Legislative/Business Issues Committees, as well as Chair of PIA’s Western Connecticut Advisory Council. • Mark Connelly, CIC, of Fairfield, CT, is President and CEO of Fairfield County Bank Insurance Services, LLC, in Ridgefield, CT. He will serve as Secretary of the association for 2016–17 and as member/consumer relations Vice Chairperson of the Association Programs Committee.

Lesko

Connelly

Rabbett

• Shannon Rabbett, CIC, of Windsor, CT, is Principal of McKiernan Rabbett Insurance Agency in Windsor. She is conference Vice Chairperson of PIACT’s Association Programs Committee. • Kevin McKiernan, CIC, CPIA, of Wilton, CT, is President of Abercrombie, Burns, McKiernan & Co., in Darien, CT. He is conference Chair of the Association Programs Committee. He also is a member of The National Alliance Education Committee in Glenmont and an ex-officio member of the Western Advisory Council. Not pictured: • William Malloy Jr., CIC, of Stamford, CT, is President of William F. Malloy Agency, Inc., in Stamford. He serves as the legislative Chairperson of the Legislative/Business Issues Committee.

Resources | Summer 2016

PRSRT STD U.S. Postage

PAID Austin, TX Permit No. 93

The National Alliance Research Academy has published the NEW 5th edition of Producer Profile: Compensation, Production, and Responsibilities. Use the survey results contained in Producer Profile to make comparisons that count!

Order your copy TODAY! www.TheNationalAlliance.com/ bookstore

• Compare to your peer group • See how today’s top producers are compensated

+ shipping & handling

• Set goals to improve growth and productivity • Read experts’ opinions • Includes a bonus CD with checklists, producer agreements, and job descriptions

Also available as an e-book