March La Voz by Independent Insurance Agents of NM

March 2009

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"The Voice" of Independent Agents since 1934

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La Voz â&#x20AC;&#x153;La Voz is a monthly publication of the Independent Insurance Agents of NM 1511 University Blvd. NE Albuquerque, NM 87102. (505) 843-7231. Fax (505) 243-3367. Web site www.iianm.org. This publication is intended to provide accurate and authoritative information on the subject matter covered, but is distributed with the understanding that neither IIANM, nor any contributing author, publisher, contributor or advertiser is rendering legal, accounting or any other professional service and assume no liability whatsoever in connection with its use. Further, the electronic links to our advertisers and/ or contributors found in this publication are provided as a courtesy to our readers and do not necessarily indicate an endorsement by IIANM. News items from members of Independent Insurance Agents of New Mexico and the general insurance industry are encouraged. The advertising deadline is the fifteenth day of the month, preceding publication. Advertising rates are available upon request. Please contact Rachel Sheffield at rachel@iianm.org for details

IIANM Staff President/CEO Thom Turbett, CIC

Features

Click on the title & it will take you directly to that page.

Coaching Sales People Deductibility of Your IIANM Dues Outlook 2009 2009 Annual Convention Incentive An International E&O Divide L&H Trends: IRS Announces 2009 Retirement Plan Limits 2008 Agency Universe Findings Give Your Kids a Chance to Succeed Agency Model Delivers Happy Customers An Ode to Rational Financing Anyone Searching for Silver Bullets Shall be Filled with Lead Where are Potential E&O Claims Lurking in Your Agency? Win an iPod Shuffle! Partners Program Company Listings IIANM/NMM Scholarship Golf Tournament IIANM Education Seminar Class Schedule & Registration

05 06 10 11 13 14 15 16 17 18 19 20 22 22 24 27

Monthly

VP Of Membership Services Lorri Gaffney

Big I Advantage

Tech Talk

Director Of Communications Rachel Sheffield

Fraud News & Reviews

Director Of Insurance Programs Carmen Reese Porter, ACSR, CISR

Education Edge

March's Clickable Calendar

Odds n Ends

Director Of Education Jeff Straight, CIC, LUTCF Receptionist / Member Services Associate Renee Trujillo

Advertiser Index

- Click to view Ad -

2008-2009 Officers

Allstate Workplace Division

American Mining

Chair Angela Vasquez

Burns & Wilcox

Vice-Chair Alma Franzoy-Capron

Colonial General Insurance Agency, Inc.

Market Finders, Inc.

Secretary/Treasurer Kathy Yeager

The Midlands Companies

NCMIC - Finance Corporation

National Director Patty Padon, AAI, CIC, LUTCF

New Mexico Mutual

Immediate Past Chair Sam Conlee

Transwestern General Agency

Truscto, Inc.

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Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

www.colonialgeneral.com

Colonial General Insurance Agency, Inc. Founded in 1985, Colonial General Insurance Agency, Inc. is a wholesale General Agency providing quality insurance products to the Independent Insurance Agent. Colonial General specializes in both standard and non-standard business, and writes Property and Casualty business including Commercial Auto, Commercial Contract, Personal Lines, and Professional Liability. With 2,500 active producers under contract, Colonial General operates in eight states throughout the southwest with offices in Murray, Utah and Scottsdale, Arizona. Most of all, we pride ourselves in our friendly customer service and our ability to help our producing agents with their many insurance needs.

P.O. Box 14770 Scottsdale, AZ 85267-4770 8475 E. Hartford Drive, Suite #100 Scottsdale, AZ 85255 Phone: (480) 991-7889 Wats: (800) 848-8860 Fax: (480) 948-1394 www.colonialgeneral.com www.colonialgeneral.com

Commercial Lines/Brokerage Department • Preferred BOP

• Property

• Inland Marine

• Professional Liability

• Commercial Liability

• Workers Compensation

Avoid monthly or annual membership fees, use Colonial General for your Preferred Business Owners Policies. We have several markets available to give you the best quote. For additional information contact your underwriter.

Transportation Department • Truckers

• Physical Damage

• NB Mexican Truckers

• Local Radius

• Garage

• Intermediate Radius

Please contact our Utah office for all your Transportation needs. P.O. Box 571770, Murray, Utah 84157 (801) 562-1188 *Wats: (800) 594-8900 Fax: (801) 562-2218 * Toll Free Fax: (800) 332-9285

Personal Lines Department • Masterpiece Company

• Standard Company

• Umbrellas

• Stand-alone Liability

• Vacant

• Seasonal

• Dwelling Fire

• Homeowners

Preferred Commercial Lines Division

You will never pay a fee to access our companies. No volume or binding contracts. Contact John Weber at (800) 848-8860 x278 for additional information.

For a full description of the products highlighted on this page, click on:

www.bigimarkets.com

IIABA and IIANM are ideally positioned to create an electronic bridge between product providers and independent agencies. IIABA has the technological expertise, systems and industry contacts; IIANM has local marketing and educational ability, as well as close relationships with agents. Together IIABA and IIANM can bring product providers to agentsâ&#x20AC;&#x2122; desktops and make agents aware of what products are there and how to take advantage of them. You will need to log-in in order view more information. Please contact Rachel for your log-in information. With some planning, there is light at the end of the tunnel, as there is a way to protect yourself and your family in the event of a disability: short and/ or long-term disability insurance. While disability insurance plans come in all shapes and sizes. for groups and individuals, the purpose is simple: to provide a level of income replacement during a time of disability.

Big I Employee Benefits Like to gamble? Can you beat the odds?

Don't take the chance that it won't happen to you. You insure your car, your home, your valuables - why not your "income"? Aside from health insurance and retirement plans, short and long-term disability insurance is one of the most valuable benefits an employer can offer to their employees.

A few facts to think about: o A disabling injury occurs every two seconds. National Safety Council, Injury Facts 2004 Ed. o 3 in 10 workers entering the work force today will become disabled before retiring. Social Security Administration, Fact Sheet 2007

The Big "I" Employee Benefits program can help. As a member benefit, we offer access to group short and long-term disability, group life insurance and dental programs. All benefits are provided through The Guardian Life Insurance Company who has a reputation for being a leader in the insurance industry. Visit us on the web at www.iiaba.com or contact Christine MuĂąoz at christine.munoz@iiaba.net for more information

o 70% of the private sector workforce has no long-term disability insurance. Social Security Administration, Fact Sheet 2007 o An illness or accident will keep 1 in 5 workers out of work for at least a year during their working careers. U.S. Census Bureau, December 1997 o Over 100 million workers do not have private disability income insurance. Council for Disability Awareness, Long Term Disability Claims Review, 2005

Did You Know?

Did you know that you are likely to become disabled during your lifetime? Are you prepared to handle a short or long period where you can no longer work but are expected to pay all your current bills? Sadly, over 70% of working Americans do not have enough savings to meet these types of emergencies. Combine the fact from the Federal Reserve that 44% of US Families spend more than they earn, with the negative savings rate for the average American family and it's the perfect mix for financial disaster. Think about your current situation and what would happen if you could not work for a short period of time - how would you replace your income? Pay your mortgage or rent? Buy groceries? Make car payments? Pay for childcare? Truth be told, the reality is that a disability has the potential to financially devastate many Americans. Recent studies have shown that unexpected illnesses and injuries cause 350,000 personal bankruptcies each year.

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Your agency can list what languages it supports in order to better serve your clients. By going to your agency management information at www. iianm.org, logging in and clicking your name, you can specify if you have agents who speak Spanish, French, German, Portuguese, and more. When clients visit our www.iianm.org website looking for agents to represent them, they will then be able to see what bi-lingual services your agency supplies.

Our website is being constantly updated. Please take a look at our updated Member Resource pages. There are some great technical insurance articles (Under "Resource Central") you can use for discussions in agency staff meetings. IIANM ensures you receive the most up-to-date information affecting the insurance industry in New Mexico.

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Coaching Sales People All the books you've read, all of the "rah-rah" rallies you've attended, all of the workshops you sat through don't mean squat if you don't convert the knowledge into skill.

by Bob Ayrer

tation. Chances are the client won't give your "day visitor" a second look. Have your coach take a position out of the frame of vision where they can observe both you and the prospect/customer. Have him remain silent throughout the sales call.

Take a lesson from the pros and get yourself a coach....

go has cost the average salesman more than all the fast cars and fancy clothes put together. It has been said that the worst enemy in sales is Arrogance - and boy, does that come through with some successful sales people! They 'know-it-all'. Really?

After the call, do a complete "autopsy" of the call - everything from the moment you entered the premises of the prospect through to the exit. Take it apart like a jeweler taking a watch apart - study every move. LISTEN to your coach. Don't debate. Accept the comments and Learn.

Then let's take a look at the top performers in other Big Pay areas of life. In football the super pro's have a coach - in fact, one for almost every position - a quarterback coach, line coach, defensive coach, offensive coach. I think the water boy has a coach!

How do you think you did in achieving your objectives? What did you do well? What could you improve?

Watch world-class tennis stars - Agassi and Sampras hammering it out in center court at the U.S. Open. But, every two minutes the TV cameras went to the stands and did a close up of their coach. Athletes have coaches. Opera singers have coaches. Actors have coaches. What about sales people? Naw, they already know it all! Wait a minute. If you're one of the few that really wants to increase your income and your sales closes, think about hiring a coach. Here are some truths about us as sales people: We get away with all kinds of mistakes because there is no one watching us! What rare buyer will call a Company and say, "Boy, you've got some lousy sales rep calling on me. Get him/her outta here!" Unlikely. So we need a Watcher, a coach, an on-site critic - and the best one would be a competent sales person you know who will accompany you on sales calls. Oh, and tell you the truth.

Here's what to do:

Next, have your coach give you feedback on the two areas you agreed to be coached on - just those two areas. This autopsy will take you about 2 times as long as the actual call. Now, go make the second call. The second time, repeat the process -- you either did or did not achieve your objective, etc. (It's called Practice - like a football player or Agassi.) Move on to your next call and try again - repeat the process. Three coaching calls in any coaching day gives plenty to learn and think about! Plan to be coached on an ongoing basis. Like the Pro's, you're becoming a real student of selling, not just another doo-doo walking around day by day repeating the same small mistakes you are not even aware of. All Pro's accept help. Just remember Peter Drucker's line, "The greatest knowledge that doesn't result in action is meaningless data!" All the books you've read; all of the "rah-rah" rallies you've attended; all of the workshops you sat through don't mean squat if you don't convert the knowledge into skill. Take a lesson from the pros and get yourself a coach. And for Heaven's sake, lose the ego!

Recruit a coach that understands that selling is a process. You can't coach chaos; you can't develop selling skills without knowing and following the disciplines of selling. For real effectiveness, on each coaching call, first define your strategic objectives for your coach so you're both on the same page. That is, clearly describe the strategy you plan to use and the techniques you intend to use to achieve your call objective. When you arrive at the sales call, introduce your coach casually: "This is Jack Colligan, he's working with me today" and then proceed to make your presenPage 5

Bob Ayrer is a successful survivor of corporate life who now consults to organizations on building top performing sales programs. Bob Ayrer can be reached through: REA Performance Consultants, Inc. 9082 Bermuda Dr., Suite A Huntington Beach, CA 92646 (714) 968-4136 Fax (714) 962-1889 E-mail: perform@improvingsales.com Web site: www.ImprovingSales.com

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Deductibility of Your IIANM Dues Dues to the Independent Insurance Agents & Brokers of America (IIABA) are not deductible as a charitable contribution but may be deductible as an ordinary and necessary business expense. To the extent that IIABA engages in lobbying, the portion of the dues that relate to lobbying expenses is not deductible as an ordinary and necessary business expense. This law was enacted in 1993, effective January 1, 1994. The non-deductible portion of dues for 2007-2008 is 17.99%. The following is a recap of the non-deductible portion of dues for the past five years: FY 2003-04

Estimated 18.21%

Actual 16.20%

FY 2004-05

Estimated 18.74%

Actual 17.84%

FY 2005-06

Estimated 18.51%

Actual 18.88%

FY 2006-07

Estimated 22.98%

Actual 24.93%

FY 2007-08

Estimated 25.16%

Actual 17.99%

Should you have any questions, please give us a call at 505-843-7231.

Page 6

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

www.scottsdale.burnsandwilcox.com

Who has the ability to handle all your specialty insurance needs?

The

Answer is Your Specialty Insurance Professionals

Professional Liability Umbrella & Excess Employment Practices Commercial Property Products Liability General Liability Commercial Auto Personal Lines

Global Resources. Local Relationships. Albuquerque, New Mexico

(866) 643-8538 / (505) 822-0018 / fax (505) 822-0092 scottsdale.burnsandwilcox.com

www.scottsdale.burnsandwilcox.com

by G. Barry Klein

Watch, Learn, &nn Enjoy!

Maybe you watch a lot of television. Maybe you don't. If you're a regular reader of La Voz, though, you probably do spend a lot of time looking at your computer screen. Sometimes you're doing critical work, and you need to focus and concentrate. But you probably have times when you're doing more mindless busy work: cleaning out your spam filter, reading blogs, or just plain surfing. In this short article, I'm going to write a little bit about watching videos on your monitor - Web videos, not Netflix or Blockbuster movies, and recommend a few you might enjoy. Also, I'll give some sites to look at and places to go to subscribe to ongoing new postings. First - you probably already know this—the universal symbol to start a video or a movie is a right-facing triangle. With Web videos, this may appear in the middle of a (frozen) screenshot, or it may be below the video. There will also be a solid square to stop the video, and two vertical lines (sometimes in a square) to pause it. Secondly, before we dive into the material, please recognize that Web videos tend to be very small (in screen size), compared to watching a DVD movie on your computer. DVDs tend to play, and look great, in full screen mode, but they're huge (in size) compared to Web videos. Videocasts and Web movies tend to come up very small, and often Viewing Tip don't have high enough Normally, clicking on a link either brings resolution to be blown up. it up in the same window, or in a new That can actually be an tab. When watching a Web video, I recadvantage. (See the viewommend right-clicking and choosing the ing tip sidebar.) option to open it in a new browser. Then, YouTube is the Web's sinbefore starting it, I grab the lower right gle largest source of Web corner and shrink the browser to just the videos. It can (sometimes size of the video screen and move it to fairly) be compared to the the upper right corner of my main moniWeb version of the "boob tor. That way, I can watch the video while tube" (TV), since you still seeing my e-mail, blogs, or whatever can easily waste mindelse I'm working on in the first browser. numbing hours watching Remember to put on headphones, if cat antics, karaoke, and you're sharing an office with others. the like. However, it is a terrific video publishing system, and there are an amazing number of great and useful postings on it. Want to know how to do something, such as install memory in your computer or fix a leak under the sink? Do a Google search, and the odds are that one of the hits will be someone's YouTube video of how to do it. Page 8

Searching for something is a "pull" activity, because you go out and find it and "pull" it into your browser (or your media player, depending on its format). The alternative is "push" format, where you sign up for something and it gets "pushed" to you, automatically, either through an occasional e-mail or downloaded as a video podcast (videocast). Here are some suggestions for a couple of sites that can push videos to you, with e-mail notification, and a few items you might want to pull down and watch. Push sites • The all-time best site for educational, inspiring, and just plain fabulous Web videos is TED. TED started as an annual conference on Technology, Entertainment, and Design, and they filmed the presentations. Today, it includes a network of similar conferences and posts about three or four new presentations every week. Browsing the site is fun, and you can sort and search the nearly 400 presentations many ways, but here is a link to the full list of presentations. • Insurance Journal is a long-time insurance publication - I first started writing for them in 1968, over 40 years ago! - and they now have a video broadcast service called Insurance Journal TV. Sign up to receive their free periodic (one or two a week) short videos by e-mail (IJ TV is one of the free newsletters offered, along with their great daily newsletter). You can also see their library of recent videos by choosing the Videos tab on the home page. Videos to pull • Kevin Kelly, from Wired Magazine, one of the elder statesmen in technology, on the Next 5000 Days of the Web. If you're interested in technology, this is a must-see. • Peter Diamandis, while pursuing his goal of taking people into space, developed a new way of funding scientific development (Hole In One insurance was involved!). In addition, you might also want to watch his TED presentation about taking Stephen Hawking into zero gravity. • The late Randy Pausch, a tenured professor at Carnegie Mellon, gave a very thoughtful and inspiring last lecture at CMU. This is a long one, over an hour (bring tissues), but well worth the time. • Jennifer Lee has a really interesting and enjoyable presentation about Chinese food and its relationship to Americans. • And for pure (short) entertainment, Anita Renfroe packs everything a mother says during a day into two minutes of The Mom Song, sung to the tune of William Tell Overture. Watch, learn, & enjoy.

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

www.marketfindersnm.com

Phone: (505) 822-8711 Fax: (505) 822-1165 Toll Free: (800) 530-8711

New Mexicoâ&#x20AC;&#x2122;s Locally Owned Managing General Agency Since 1977 Representing some of the most financially strong and innovative insurance companies in the specialty marketplace!

Top-Tier Markets For:

Commercial / Public Auto General Liability Property / Vacants Garage / Dealers Liquor Liability Special Events Inland Marine Directors & Officers Liability Professional Liability / E&O Commercial Umbrella Watercraft / Motorcycles / ATVs Personal Umbrellas Homeowners Mobile Homes Dwelling Fire / Vacants At Market Finders, Inc., our mission is to professionally provide quality specialty markets and service to the Agents of New Mexico.

Market Finders, Inc.

4910 Alameda Blvd NE - P.O. Box 90280 Albuquerque, NM 87199 Page 20

www.marketfindersnm.com

Independent Insurance Agents of New Mexico - www.iianm.org - * September 2008

Outlook Economic challenges will continue, but the P&C sector is well-positioned to handle tough times. The tough economy will continue to take its toll on property-casualty insurers in 2009, according to industry experts, resulting in weak underwriting performance and flat to gradual premium growth. However, most analysts agree that the P&C sector will maintain adequate capital and remain more resilient than other financial sectors in the coming year. Fitch Ratings has a negative outlook for the industry and predicts more ratings downgrades than upgrades for P&C insurers in 2009. The ratings service anticipates a meager .5% increase in written premium and a 104% combined ratio in the upcoming year, compared with a less than 1% decline in written premium and a 104.8% combined ratio in 2008. "Premium growth will continue to be relatively flat, accident-year underwriting results are likely to decline further and favorable loss reserve development will likely decline as the industry's reserve redundancy has diminished in the last two years," says Fitch Ratings. "While this capital reduction may influence market conditions going forward, market capacity and other competitive factors have not changed enough to foster a hard market turn." Obama's proposed economic stimulus plan will open doors for insurers.

By contrast, the global insurance consultant Advisen predicts a gradual hardening of commercial lines markets in 2009. "Average rate levels for commercial insurance will level off by the second quarter of 2009 and will begin to creep higher beginning in the fourth quarter of 2009," according to Advisen. "However, a deepening global recession may delay the return of hard market conditions by suppressing demand for insurance. In the absence of major natural catastrophes, the hard market will be more gradual, and also more prolonged, than has been the case in recent cycles." Standard & Poor's also foresees continued underwriting losses in 2009 and maintains a negative ratings outlook for the P&C sector. S&P predicts a slight increase in some personal lines premiums such as auto insurance but does not foresee a hardening market in commercial lines in the near future. "The current industry challenges might cause companies to rethink their underwriting strategies and bring a halt to the deterioration in commercial lines pricing, but we believe it is too early to call a turn in the commercial lines underwriting cycle," says S&P. "Despite current uncertainties and our belief that short-term pressures are significant, in our view the sector's long-term fundamental strength remains intact." Bob Hartwig, president of the Insurance Information Institute (III), has a positive outlook for the P&C sector in 2009 and believes President-elect Barack Page 10

"Anything that stimulates the economy will be a direct benefit to insurers," says Hartwig. "For example, the proposed creation of three million jobs would generate about $960 million of workers' compensation premiums per year. Insurers should act quickly and scout out new sectors of the economy that will be opened up by the stimulus plan." Hartwig acknowledges the sector's biggest challenge: a sharp decline in profits due to investment and catastrophe losses. However, Hartwig says insurers recognize the need to focus on underwriting profitability in the coming year and are well-positioned to deal with decreased income from investments. "There have been no failures of property-casualty companies this year, compared with 25 bank failures," says Hartwig. "Looking ahead, I see the glass more half full than half empty for the P&C sector." Catastrophe losses for 2009 will strongly hinge on the severity of the hurricane season. William Gray, professor of atmospheric science at Colorado State University, predicts that approximately seven hurricanes, three of them major, will make landfall in the Atlantic in the coming year, a number slightly above the average of 5.9. According to Gray, there is a 63% chance that at least one major hurricane will strike the U.S. coastline in 2009. Veronica DeVore (veronica.devore@iiaba.net) is Big "I" writer/editor.

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

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Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

You’re not thinking about supplemental insurance right now.

That’s OK. We are. Imagine soaring through the sky without a care in the world. Feels good, doesn’t it? Now imagine a company that’ll help make your benefits package top notch without you having to deal with all the hassles and paperwork. Allstate Workplace Division offers a broad range of supplemental insurance, from life to health to disability. We handle enrollment, process claims quickly and save you tax money with Section 125 qualified plans. So call today and get ready for lots of blue skies ahead. Call 1-444-444-4444 to set up an appointment with one of our Agents. Then kick back, Call 505-228-4279 to setWorkplace up an appointment with Gary Sandoval. Thensupplemental kick back, relaxinsurance and let Allstate relax and let Allstate Division take care of all your needs. Workplace Division take care of all your supplemental insurance needs.

Allstate Workplace Division is the marketing name for American Heritage Life Insurance Company, a wholly-owned subsidiary of the Allstate Corporation. All products are underwritten by American Heritage Life Insurance Company, Jacksonville, FL. www.allstateatwork.com

An International

E&O Divide

If you were Swiss, would your agency E&O cost half as much?

This impacts Big "I" members because insurance agencies must focus on E&O loss prevention.

"Essentially, our civil litigation system puts an exclamation point on the old adage 'an ounce of prevention is worth a pound of cure,'" says Ronnie Tubertini, chairman of the Big "I" Professional Liability Committee. According to Tubertini, half of all E&O claims close with no payment. "To me that says if an agent leaves any opening, no matter how small, our legal system increases the odds an agent will have to defend themselves, even when no fault exists," he says.

f your agency was located in Zurich or Paris, paying less for errors & omissions coverage is probably a safe bet, but then a lot of other things might be different as well. Perhaps a better question is, if the U.S. ran its civil litigation system more like other countries, would your E&O insurance cost dramatically less? This question has been in the news lately with some lively debate. A recent report by the right-leaning Manhattan Institute is creating a stir over the cost and structure of the U.S. civil litigation system. The report points out that the U.S. --- unlike the rest of the world --- operates its tort system under the premise that if person X sues person Y and the lawsuit proves no liability for person Y, person X and person Y both walk away paying their own legal expenses. According to the study, the rest of the world has a better system in place under the premise of "loser pays." Under "loser pays," person X, on failing to prove wrongdoing by person Y, would have to reimburse person Y for their defense cost. Arguments in the U.S. against "loser pays" maintain that under "loser pays," the little guy gets hurt. The prospect that bringing suit could bring responsibility for all legal fees ostensibly would prevent many of modest means from bringing suit. On the other hand, supporters of "loser pays" say the "American system" creates an unproductive propensity for litigation, since meritless suits do not bring with them the cost of bringing and defending the suit.

The PLC has a dedicated working group focused exclusively on agency E&O risk management, and substantial resources go into helping member agencies avoid the possibility of E&O claims. Tubertini encourages members to contact their state associations for tools and techniques to help avoid claims. "We are moving our risk management tools to be state-specific and rarely does a month go by without some new tool, technique or information becoming available," he says. For a list of contacts at your state association who can help you with E&O claim prevention or for a general description of these offerings through the Big "I" Professional Liability Program, go to www.independentagent.com/eo. Paul Buse (paul.buse@iiaba.net) is president of Big I AdvantageSM and a licensed P&C agent.

To get a sense of the costs under "loser pays" versus the "American system," Insurance News & Views examined estimates of per capita cost of the U.S. civil justice system and compared them to other western, developed countries where "loser pays" is in place. The graph below is based on estimates of costs of litigation and judgments established by Towers Perrin in 2004 combined with current data on Gross Domestic Product and population.

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Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

L&H Trends

IRS Announces

2009 Retirement Plan Limits

New contribution amounts will affect the way agents and their customers plan for retirement.

fter significant declines in the stock market this year, most people saving for retirement realize they need to increase their contributions in order to partially offset the losses in their portfolios. This week the Internal Revenue Service announced the amounts that can be contributed to retirement plans for 2009. The increases apply to 401(k) and other defined contribution plans, and the maximum benefit that can be funded through defined benefit plans will also go up. The maximum annual contribution an employee can make through salary reduction to a 401(k) plan will increase to $16,500 from $15,500 in 2008, while the maximum annual "catchup" contribution employees age 50 and older can make to a 401(k), and certain other defined contribution plans, will rise to $5,500 from $5,000. In addition, the maximum annual total contribution, including employer contributions, to defined contribution plans will be $49,000 per participant in 2009, up from $46,000 this year. The maximum annual benefit that can be funded through a defined benefit plan will increase to $195,000 from $185,000 and the amount of employee compensation that can be considered in calculating pension benefits and contributions to defined contributions will rise to $245,000 from $230,000.

supplemental security income benefits increase automatically each year based on the rise in the Bureau of Labor Statistics' Consumer Price Index for Urban Wage Earners and Clerical Workers. This year's increase in the CPI-W was 5.8%. The 5.8% cost-of-living adjustment will begin in January 2009 with increased benefits for 50 million Social Security recipients. Higher payments to more than seven million supplemental security income beneficiaries will begin on Dec. 31. Some other changes that take effect every January are based on the increase in average wages, according to the Social Security Administration. Based on that increase, the maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase to $106,800 from $102,000. Of the estimated 164 million workers who will pay Social Security taxes in 2009, about 11 million will pay higher taxes as a result of the increase in the taxable maximum. Dave Evans (dave.evans@iiaba.net) is a certified financial planner and IA L&H contributing editor.

These increases are good news for independent insurance agents for two reasons: 1) they allow customers to set aside more through their own retirement plans and allow companies to maximize their tax-deductible contributions, lowering their income tax liability; and 2) independent agents can increase contributions to their own retirement plans. Also, for agency principals considering selling their agency, there are opportunities to utilize retirement plan contributions as part of the perpetuation plan. For example, typically purchasers of agencies prefer to have some of the sales price treated as compensation so the buyer can immediately deduct the some of the cost versus spreading the expense over 15 years. The disadvantage to the seller is that they want to have as much of the sales proceeds as possible treated as capital gains because of the lower tax rate. However, if the sales transaction involved both compensation of $100,000 for five years and the balance as capital gain payments, utilizing a retirement plan, the seller could have as much as $48,000 annually go to their retirement account and have a taxable income of only $77,000. And, of course, the same is true for the agency's commercial clients who are considering selling their businesses. Also announced this week, monthly Social Security and supplemental security income benefits for more than 55 million Americans will increase 5.8% in 2009, the largest since 1982. Social Security and Page 14

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Big "I" and Future One Release

to be younger. This is a positive finding since the bulk of agents are baby boomers nearing retirement.

2008 Agency Universe Findings

Other key findings of the 2008 Agency Universe Study include:

Anticipated biannual study reveals industry growth and stability.

he results are in: the 2008 Agency Universe Study has found that, despite tough economic times in many areas of the financial services sector, independent agencies remain strong, stable, flexible and have much potential for growth.

- A long-term trend interrupted. The long-term trend toward fewer, larger agencies has been interrupted. Compared to 2006, the number of agencies has remained the same. This stabilization reflects a decrease in acquisitions and an increase in the number of start-up agencies.

The study by Future One, a collaboration of the Big "I" and leading independent agency companies, is hailed as the most comprehensive of the independent agency system.

- Growth in the number of small agencies. The percentage of small

The study surveys a wealth of issues about independent agencies operating in the U.S. including their numbers, revenue base and sources, number of employees, ownership, mix of business, diversification of products, technology uses, non-insurance income sources and marketing methods.

- Doing more with less. Agency operations are becoming measurably

agencies (less than $150,000 in insurance revenue) grew between 2006 and 2008, while the percentage of all other size agencies decreased slightly.

The study also found that the number of independent agencies has stabilized, halting a decade-long trend of larger and fewer firms. More agencies are being formed than in past years, particularly in areas of the country suffering from difficulties in the availability of coverage, and their principals tend

more efficient. Agencies are able to do more work with fewer employees. Increased use of technology likely contributes to more efficient processes.

- Satisfaction with carriers continues to improve. Satisfaction with personal lines and small commercial lines carriers is up since 2006. The area showing the most improvement across carriers is their ability to "make it easy for CSRs to write business."

- Concern about controlling expenses. While "maintaining experienced staff, finding carri-

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ers who will maintain their commitment to agent's market and to providing the coverage agency's customers need" still remain major concerns for agencies , "controlling expenses and reinvesting in agency" has risen as a concern since 2006. The 2008 Agency Universe Study is the ninth in

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a series that was first conducted in 1983. Subsequent studies were released in 1987, 1992, 1996 and 2000. Since 2000, the study has been completed biannually. Approximately 1,900 agencies were included in the 2008 analysis. Margarita Tapia (margarita.tapia@iiaba.net) is Big "I" director of public affairs. For more information on the survey results, click here to view the full report.

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Page 15

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

overheard a mother angrily arguing with her daughter at the airport a few weeks ago. When I turned to see what was going on, I expected to see a middle-aged mother with her 20 year-old daughter. I was very surprised to see the mother was at least eighty and the daughter at least sixty! I guess it is true that you never stop being a parent, no matter how old you or your children are.

Give Your Kids a Chance to

Parents are always parents and most parents never stop worrying about their children. Such worry, though, sometimes robs children of their success and happiness. In agencies, the parent/owner is often so worried about their son or daughter failing, they put their children in a position that definitely prevents total failure, but it prevents success too. Most often, the son (it's usually a son rather than a daughter) is given a book of business or a management position. If given a book, the book is usually so big, the son never really has to build it to make a good living or he is simply overpaid while he is getting established (and "getting established" often takes a very long time).

by Chris Burand

Succeed

achieving specific goals. When the son achieves success, the reward will be so much sweeter because he will know he earned his success and the father can be proud for the same reason. When it comes time to perpetuate the agency, the desire to protect the son from failure is often visible in the terms and the price for which the father sells the agency to his son. Many reasons may exist for selling the agency to the son for a relatively low price. However, doing so to keep the son from failing is robbing the son of the opportunity to succeed and even robbing him of the motivation to succeed. If the price is too low, the terms are too easy, or even if the debt is so low the son does not have to grow the agency to survive, how will the son have an opportunity to succeed on his own? Sure, the son is not failing - now. However, if he does not learn early to grow the agency, he will eventually be trampled by his more competitive peers. If the son is going to fail, wouldn't it be better to fail at 30 with fewer financial commitments and time to start over rather than at 50 with kids in college?

The son does not ask for this. Dad (again, it's usually a father) just wants to make sure the son does not fail so he gives the business and the income to his son. The dad never gives his son a chance to fail. For a person to grow and to become someone that can successfully manage an agency, a person absolutely must have the opportunity to fail. By removing this opportunity, dads are robbing their sons of the opportunity to succeed on their own.

Sometimes failure is key to a person's success. Some people need to fail in the agency business so they can go on to succeed in some area that fits their skills and personality better. I have witnessed this hidden blessing many times. If your grown son needs your help to keep from failing and you are personally ensuring he does not fail, maybe you are really preventing him from real success and from finding his real calling.

The son has to have the opportunity to try selling to learn if he can sell successfully. He has to learn the emotional highs and lows of selling, as well as the technical methods, to build confidence and earn respect. If he fails in sales, then he can learn to do something else productive. Giving the son a book of business and letting the dad and the son pretend he can sell is like a weak acid that slowly eats away confidence and any opportunity for success. It is better to try and to fail, and then to move on to greater success in another capacity than to not fail due to a false environment.

Sometimes the key for a son to succeed on his own can only occur if the father leaves the agency. Sometimes Dad hangs around because he is a control freak or because he has nothing to do in retirement. Often though, the father hangs around because deep inside, he fears his son cannot succeed on his own. Sometimes this is true and sometimes it is not, but either way, the son, no matter how old he is, often cannot become his own man as long as Dad is around. The parent-child relationship is just too strong. Give your son the opportunity to succeed on his own.

If the son is put in a management role, dads have a habit of not creating measures of success or failure for their sons. Without measures, no one can fail. I have seen many sons put in charge of branch offices and small divisions that really did not need high level management because Dad wanted to make sure his son did not fail. Not failing and succeeding are two different things.

If parents never stop parenting, then parents need to work on their parenting skills, forever. This means helping your kids succeed. It does not mean robbing them of success by preventing them from failing. You likely let them fall down as toddlers. It is okay if they fall down as adults too. They will likely get right back up, just like they did when they were toddlers. Let them succeed by allowing them to fail. Do not rob your kids of their opportunity to succeed on their own.

If a father really wants a son to succeed in management, on their own, then the father must create appropriate goals, address required training, and make the son's compensation and continued employment dependent on Page 16

Chris Burand is president of Burand & Associates, LLC, an insurance agency consulting firm. Readers may contact Chris at (719) 485-3868 or by e-mail at chris@burand-associates.com.

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Agency Model Delivers Happy Customers Routine interaction and convenience have the biggest impact on customer satisfaction.

ndependent agencies edge out call centers and the Internet when it comes to satisfying insurance customers, according to the J.D. Power & Associates 2008 Insurance Customer Contact StudySM.

The inaugural study asked 11,828 home and auto insurance customers to rate their last insurance experience based on key service practices. Agencies ranked highest in overall satisfaction, at 884 points on a 1000-point scale, while the call center model scored 824 points.

by Veronica DeVore

gan, president of Hannigan Insurance Agency in Clinton Township, Mich., responded to this trend by extending his hours to meet the needs of his customers. "If you don't pick up the phone when clients are ready to talk, they get frustrated and you risk losing the account," Hannigan says. "Extended hours have helped our retention and added new business." While the agency channel scored highest overall in the study, its performance was less consistent from category to category than call centers or the Web. Bowler attributes this variation to the diversity among agencies.

The study found that routine service interaction ranks most important when it comes to keeping customers satisfied, and independent agencies benefit most from this interaction, according to Jeremy Bowler, senior director of the insurance practice at J.D. Power & Associates. "The relationship between customer and agent drives business," says Bowler. "Customers think of the agent as their primary contact, a person they have a working relationship with." J.D. Power also found that customers who resolve their insurance issue through a single channel are much more satisfied than those who make multiple contacts. Brian Hanni-

"Call center and Web models are just easier to monitor," he says. "The silver lining for agencies, though, is in the heightened level of personal touch. Whereas a customer who has a lousy call center experience is quickly dissatisfied, the customer is much more forgiving with the agency." One agency has found a way to combine the consistency and speed of a call center with the personal touch of an agent. Kim Brubaker, vice president and chief operating officer at Quorum Insurance, LLC in Tampa, Fla., says her agency recently introduced self-service kiosks to enable customers to pick up a phone and talk to an agent face-to-face via webcam from a remote location "We want to have technology available so customers who would like a faceto-face relationship can have that," says Brubaker. "It's important to be able to put a face with a name."

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Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

An Ode to Rational Financing Monitor price-earnings ratios to understand real value. Price-earnings ratios of major market indexes are estimated to be trading in the lower teens, down from results of 18.5 in 2007 and as high as 30 several years ago. Clearly, stock promoters are reflecting on what p-e ratios actually mean, as agents realize they may have bought stocks, in recent years, at equivalent prices they would never pay for an insurance agency acquisition. Below is the S&P 500 historic p-e ratio going back to 1936 (first available data).

The average p-e ratio has been 15.75 since 1936, and ratios have only reached and been consistently above that average since the 1990s. The market has also remained at ratios well below the average for extended periods of time. To understand p-e ratios, one must understand the Gordon Growth Model - perhaps the most widely used measure of any business value. It quickly and efficiently adjusts a stream of future income to its value today, accounting for the investment's risk and expected profit growth. In the formula shown below, "K" represents the business cost of obtaining funding (the average cost of paying investors and l enders), while "G" represents the average growth in projected profit. The calculation used to estimate the value of $1 of earnings is analogous to a p-e ratio and represents what an investor would pay for $1 of earnings at a given risk. The calculation uses 10% as the average cost of financing for a business in the U.S. and 3% as the growth rate. U.S. Gross Domestic Product increases have averaged about 3% on a real basis since the Great Depression. Price or Value ' Profit / (K-G) or Average Example ' 14.3 ' $1 / (.10-.03) This formula generates a p-e of 14.3, which is slightly below the average for the S&P 500 since 1936. This calculation has guided the business world for many years, and the recent financial crisis will surely encourage many to more carefully watch the p-e ratio of stocks. Paul Buse (paul.buse@iiaba.net) is president of Big I AdvantageSM and a licensed P&C agent. Page 18

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Anyone Searching for Silver Bullets Shall be Filled Full of Lead! Do you seek solutions where you don't have to think too hard about how to improve your agency? For example: • Which sales approaches appeal to you? Do you look for structured sales systems where all you have to do is fill in the blanks and the system begins sending customers automatically to you? Think about the sales approaches you have tried and have failed. Why did they fail? • Do you seek a marketing system that results in clients calling you all day long so no one in your agency has to make sales? • Are you seeking a paint-by-number agency management system that tells you exactly what you need to do? High quality data is so lacking in this industry, this is an impossible solution. Even if it existed though, every agency is different and to be successful, every agency owner has to figure out what works best in his or her agency. This is hard work that requires concentrated effort. • How prone are you to dismissing solutions that sound like work while jumping on ideas that sound simple? I am all for the K.I.S.S. approach, but keeping it too simple is a dangerous approach. Agents with silver bullet disease spend their time searching for easy solutions where simple is the primary criteria. Agents searching for simple solu-

Page 19

by Chris Burand

tions waste valuable time and money on solutions that will not work. They waste time and money they could be spending on implementing more difficult solutions that actually work. Searching for silver bullets often results in temporarily believing you have discovered a perfect solution, only for the pain to be worse once reality sets in. Some agents are truly addicted to buying silver bullets from consultants because the pain of dealing with the real problems using real solutions is just too great. The greatest damage done by the U.S. government's easy money and low interest rate policies of the last ten years is that a lot of people made a lot of money without having to work or think hard. Thinking is very hard work (which is why the brain consumes more calories than any other organ) and a lot of thinking is going to be required to succeed now. If you are searching for silver bullets, if you prefer easy solutions over the more correct but more difficult solution even though you know in your heart you're making the wrong decision, you are doomed. If you choose to work hard on real solutions, you have great opportunities and success will be yours. As John Hiatt said, "We ain't no amoeba. We can choose." The choice is yours.

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Where are Potential E&O Claims

Lurking

n the average 1 in 12 agencies will report a potential E&O incident to their E&O carrier in a given year. You talk with agency owners that over the years may have never experienced an E&O claim and you hear them say with an air of confidence in their voice, "it will never happen to me." I'm sorry to say but even the best run agencies in the country with the most thorough and consistent agency procedures can be involved in an E&O claim. It is, however, your agency practices and procedures that can extricate you from a claim or mitigate its impact with a solid defense. Looking at common errors we see in the Big "I" Professional Liability Program, the largest writer of agents E&O in the country, can help you discover some potential E&O claims lurking within your agency. In most cases in order for there to be an E&O claim brought against an agent there must be an uncovered loss for which the client or a third party suffered damages generated from a breach of the agents duties. So, the leading E&O claim made against agents is for "failure to procure" coverage. When there is an uncovered claim often times the agents E&O carrier becomes the insurance backstop. A more recent trend is that even if the clients claim is paid by the primary carrier, that carrier is turning around and suing the agency for damages the carrier incurred from the agent's negligent error. On a macro level, "failure to procure" types of claims can be broken down in two different but very interrelated categories: knowledge and procedural based errors. In general, knowledge-based errors occur because of inadequate staff training or familiarity with the coverage being offered or an inability to appropriately analyze the risk exposures to be insured. Procedural based errors on the other hand are those that are generated from a lack of timely action or follow-up. Avoiding both knowledge-based and procedural types of errors should be the overall goal for the E&O risk management of the agency. A few high level things your agency can do to create a solid foundation within the agency for avoiding E&O claims are: 1. Understand your state's specific standard of care. 2. Hire qualified employees and provide adequate training. 3. Implement employee education programs (both agency E&O and coverage lines in general). 4. Implement and monitor an agency workflow procedures manual. Periodically allow comments from staff on enhancements to the workflow process. 5. Use exposure analysis checklists on new business and renewal accounts. 6. Thoroughly document your client file with offers and declinations of coverage and other vital client dialog that would provide a defense in the event of a claim. 7. Have an on-going dialog with agency staff throughout the year about the importance of avoiding E&O claims. Page 20

in your Agency?

Now, let's take a look at the general demographics of the claims made against agents. Agency producers are the ones in the agency most frequently named in E&O claims, followed by CSR's. This is not surprising because they are the ones who most frequently touch accounts. E&O claims are most frequently made on new business transactions and commercial lines policies drive both claims frequency and severity. Commercial general liability is the most common underlying coverage in which claims are made. Below are the most common types of E&O claims made against agents. These examples can provide your agency with direction on where you may find existing E&O claims lurking, just waiting to rear their ugly head, and where to focus on preventing new ones. 1. Failing to recommend a specific coverage type or adequate limits - This is the most frequent claim made against agencies and these types of errors can be considered both knowledge and procedural based errors. Producers need to be aware of the potential for these types of E&O claims. Risk management prevention tip: Using risk analysis checklists and questionnaires can help uncover areas of exposure to the client. This is an excellent opportunity to increase revenue for the agency by offering needed products to your customer. Also, let the client select the limits but do offer higher limits to avoid the claim of offering inadequate limits. E&O claims revolve around documentation so make sure the client file includes solid documentation including offerings and declinations of coverage and higher limits. Review the policy when it comes in to make sure that the policy is reflective of the information included in the proposal. In those states where the policyholder has duty to read their policy it is especially important to deliver the policy in a timely fashion as this could be a defense strategy in a claim. 2. Failure to provide timely notice of a claim to the carrier - This is a procedural driven error that would seem to be easily addressed within the workflow procedures of the agency. Risk management prevention tip: First, don't affirm or deny coverage, that is the carrier's job. Second, clients need to understand the process they should follow if a claim occurs. During the policy delivery process, reference the provisions within the policy that should be followed should a claim occur. If the policyholder is responsible for reporting claims directly to the carrier let them know that and document your file. If claims are submitted to the agency, endeavor to submit them to the carrier within a predetermined timeframe and set a reminder in the agency management system to follow-up with the carrier to be sure it is being taken care of. The client file should be documented accordingly. Finally, be sure to put on notice any carriers who might provide a defense or coverage. This is especially important in areas

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

of liability and where excess coverage may be involved. 3. Failure to process applications in an accurate or timely manner - Commonly seen, this is an error more procedural in nature. Risk management prevention tip: Communications between the agency team responsible for the new business process is key with these types of claims. The person gathering the client information for the application, in most cases the producer, needs to communicate effectively with the person entering the information and marketing it to the carriers, the CSR. The agency procedures manual needs to outline the process and make certain that an appropriate system for follow-up is in place. Also, if the application can not be processed then confirm in writing to the insured any time and notify them of the required information to proceed. 4. Failure to duplicate coverage upon renewal - This error is another that straddles the line of procedural and knowledge based errors. It can involve not only the renewal within your agency but also when an account is taken over via Agent of Record (AOR). Risk management prevention tip: Don't get complacent in the renewal process. Offering additional coverages and cross selling products upon renewal is an excellent way to counteract the most common claims against agents of failure to offer coverage. For accounts taken over on AOR look at these in the same way you would new business accounts including using risk analysis exposure checklist. 5. Failure to make policy changes requested by the client - In the claims that we see producers are often involved in these types of claims in a process that should more likely be handled by the CSR. Improper imple-

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mentation or following of workflow procedures are the causes of these types of errors. Risk management prevention tip: Policy changes come in three shapes and sizes: increasing, reducing, or modifying coverage. The key ingredient to avoiding these types of policy change errors lies in the follow-up process to be certain that changes are made in a timely fashion and do not fall through the cracks. Policy changes should be confirmed in writing and only accepted from the named insured. If the insured asked for a reduction in coverage, advise them of the consequences and document the file accordingly. Finally, make sure that when adding additional insureds to the policy you confirm this with the company. We often see CSR's attempting to add additional insureds to the policy via a certificate of insurance which can lead to the failure to procure coverage claim. Many of the above common E&O claims can be prevented by having a knowledgeable agency staff that constantly follows agency workflow procedures. As an agency principal, monitoring compliance of agency procedures is paramount to uncovering E&O claims that may be lurking in your agency. The most important element to any E&O claim is documentation. So many E&O claims are "he said, she said" situations. Your agency may have acted appropriately but if you did not document your actions using invariable practices you will lose in court. This article is written as value-added service of the Risk Management department of the Big "I" Professional Liability Program. For more information about joining the Big "I" Professional Liability Program or other benefits of membership to the Independent Insurance Agents and Brokers of America visit www.independentagent.com/EO. Any reprint of this article without written consent is prohibited.

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Page 21

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

From the Wild, Wild West to the Best of the Best! IIANM Celebrates our 75th Anniversary in 2009! We would like to invite everyone in the Association to celebrate our collective success in this endeavor, so throughout 2009, we will be announcing a number of fun and informative initiatives to commemorate this milestone year. Every month La Voz will feature a trivia question where the answers can be located on our web site.

! e fl f u h S d in an iPo

Last month's WINNER!! Debra Stiles, Berger Briggs Real Estate & Insurance

This month's trivia question is:

"Which three types of people will get a FREE ticket to attend this year's convention?" Email your answers to rachel@iianm.org by March 13, 2009. On March 16th, there will be a drawing for the winner from the correct entries. Look out for next month issue of La Voz for your next chance to win!

2009 Company Partners

Diamond

New Mexico Mutual Gold Mountain States Insurance Group Builders Trust of New Mexico / Letcher Golden & Associates

Silver Allstate Workplace Division Cresta Insurance, LLC FirstComp MetLife Home & Auto Page 22

IIANM gratefully acknowledges the following companies, who are our 2009 Company Partners. They have generously agreed to support all our major conferences and events held in 2009. Without their assistance, fees for these events would be significantly higher and/or the quality of programming would be restricted. IIANM's Partners Program is a special program for insurance companies and others who support the Independent Insurance Agents of New Mexico on an on-going basis. Become a Partner! We invite companies to experience the enormous networking, recruiting, and branding opportunities presented by becoming an IIANM Corporate Partner. Our Associate's Partnership program puts supporters' front and center in a meaningful and memorable fashion. Click here for full details and registration form. If you have any questions, please call VP of Membership, Lorri Gaffney at (505) 999-5805 or send an email to lorri@iianm.org. Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Fraud News & Review

SOURCE: North American Training Group

LEGISLATION & REGULATION The New Mexico Senate has approved a bill allowing courts to aggregate the amount of fraud to stiffen sentences of convicted fraudsters. "Fraud rings - usually target several entities and unless the totality of the activity is considered, the penalty might be a fraction compared to the total fraud," the coalition's Howard Goldblatt wrote to the bill's sponsor and key House members. The House is considering SB 117, but the measure has only a short time window before the legislature shuts down for the year in mid-March. The coalition encourages fraud fighters in the state to contact their House members and urge support for this measure.

The New York legislature is looking at a bill allowing law enforcement access to information on automobile event data recorders "so-called black boxes" for accident and crime investigations. AB 3059 also would let vehicle owners suppress the information under strict guidelines. The Florida legislature soon will consider whether to increase protection of seniors against predators who sell them annuities. SB 1372 would give seniors 60 days to unconditionally cancel an annuity. Current Florida law allows 14 days to cancel, but SB 1372 is specific to seniors. Agents would face a third-degree felony conviction and $40,000 fine for willfully twisting or churning a client's account, and $5,000 for non-willful acts. The bill has been pre-filed, with the legislature scheduled to open in early March.

To read more on Fraud Convictions, Verdicts, Government Updates & Related News, click the following links and check out last months editions of NATG Fraud News WEEKLY:

Volume 17 Volume 18 Volume 19 Volume 20

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To receive this publication directly, simply email your request to rlippman@fraudeducation.com

Page 23

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Golf Tournament 15th Annual Scholarship

May 18th, 2009

Tanoan Country Club

Preparation is in progress for the New Mexico Mutual and Independent Insurance Agents of New Mexico’s 15th Annual Scholarship Golf Tournament which will be held on May 18th, 2009 at the beautiful Tanoan Country Club at 10801 Academy Road NE, Albuquerque, NM 87111 This event is designed to fund college scholarships for deserving candidates. Since we are set up as a ‘C-3’ charitable organization, your contributions are entirely tax deductible. We are asking that you contribute to this very worthwhile cause by way of monetary donations, gifts, sponsorships or participation to help us make a dream come true for a worthy nominee. NMM & IIANM are also soliciting nominations for this years recipient. If you are interested in nominating an individual, please contact Cecil Rudd at (505) 343-2823. The scholarship will be awarded at the reception immediately following the tournament. Your participation is vital to the success of our scholarship program. See the reverse side of this for a registration form. Your contributions and registrations should be mailed to the address below. Registrations may be faxed to (505) 243-3367. Should you require additional information, please contact Lorri Gaffney at (505) 999-5805 or 800-621-3978.

Upon Completion of Play: Recipient Award Presentation / Dinner / Golf Awards - Special prizes for: Hole-in-One, Closest to the Pin, Longest Drive, and Numerous door prize giveaways.

Tournament Details: Registration begins at 11:30 am Pick-up box lunches at 12 noon Tee-off at 1:00 pm

Mail or fax this form back to us:

Registration Deadline: May 15th, 2009 Includes: Golf, Lunch & Dinner/Award Presentation $100/per person

IIANM Attn: Lorri Gaffney 1511 University Blvd. NE Albuquerque, NM Fax: (505) 243-3367

Golf Tournament

15th Annual Scholarship May 18th, 2009 Tanoan Country Club

Hole-in-One Sponsor $5,000 or more... • • • • • •

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Full Registration for Four Players Hole Sponsorship and Recognition Sign Recognition in Event Program Listing an Appreciation Sign at Event

Company / Agency Contact: Company / Agency Name: Address: City, State & Zip: Phone:

Double Eagle Sponsor $2,500 - $5,000 1/2 Page Ad in La Voz Recognition Plaque Full Registration for Four Players Hole Sponsorship and Recognition Sign Recognition in Event Program Listing an Appreciation Sign at Event

Birdie Sponsor $500 - $999 • • • •

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Sponsorship Level Selections:

E-mail: Play as one team

Hole-in-One Sponsor

Willing to play on various teams

Double Eagle Sponsor

Eagle Sponsor

(4 players to include) Name Name Name Name

Please fax this form back to: (505) 243-3367 Attn: Lorri or mail to:

Birdie Sponsor (2 players to include) Name Name

IIANM 1511 University Blvd. NE Albuquerque, NM 87102

Par Sponsor Individual Registration Form: Golfer: Company / Agency Name: Address: City, State & Zip: Phone:

$100 per person

Fax:

Your Desired Team: This is for team assignments only! A separate registration form is required for each player. We will try our best to honor your requests. Questions may be directed to Lorri Gaffney at 999-5805. Registration deadline is May 15, 2009.

Yourself Name Name Name

E-mail: Method of Payment: Bill Agency (for Members Only) Check Enclosed (payable to IIANM) Credit Card Name: #: Exp. Date:

Golf Tournament 15th Annual Scholarship

May 18th, 2009

Tanoan Country Club

Recipient Nomination Form Name of Scholarship Nominee: Nominee’s Relationship to Injured Worker: Name of Injured Worker: Place of Employment: Nominee’s Address:

Nominee’s Phone Number Day:

Night:

Mailing Address (If different from above):

Why do you recommend this nominee for the NMM/IIANM Scholarship? (Please attach another page if more space is needed)

Person Nominating:

Company:

Contact Information:

Please return this completed nomination form no later than April 24, 2009. NMM / IIANM Scholarship Attn: Cecil Rudd 3900 Singer NE Albuquerque, NM 87109 (505) 343-2823 Fax: (505) 345-3451

th Annual Educatio n 9 S 4 e m s ’ i nar M N A II 15 Hours of Continuing Education for the Insurance Professional From the Wild, Wild West to the Best of the Best Celebrating 75 Years of Independents in New Mexico

elcome to the Independent Insurance Agents of New Mexico’s 49th Annual Education Seminar! This seminar is designed to specifically meet the annual continuing education requirement for licensed NM insurance agents. We encourage you and your staff to join us on March 11th & 12th, 2009 at The Hilton Hotel in Albuquerque. This two-day program offers educational opportunities, a great Trade Show with over 30 exhibitors, and provides a venue for industry professionals, agents, CSRs and company representatives to network.

For those of you who have not attended before, this is how it works: We will be featuring 20 classes, taught by various instructors. Choosing your classes is much like making selections from a menu. You may choose to take all your classes within one track (i.e. commercial lines only) or you may choose to mix and match tracks so you can take advantage of the wide variety offered. The entire program is approved for both the P&C and L&H licenses, so you may attend any class you like. If you have any questions about registering, instructors, hotel accommodations, or anything else, please call Jeff at (505) 999-5802 or (800) 621-3978. This is an event you don’t want to miss!

Career Track (Menu of Classes)

Commercial Lines

Personal Lines

Agency Management

Employee Benefits

Young Agents / Professional Development

March 11

March 12

8:00am - 12:00pm

1:00pm - 4:00pm

8:00am - 12:00pm

1:00pm - 4:00pm

4 Hours of CE

3 Hours of CE

4 Hours of CE

3 Hours of CE

Commercial Line’s Related Coverages

Bonds 101

Certificates of Insurance & Additional Insureds

Business Income & the ISO CPP

Jack Cleary

Paul Martin

Betsy Carlson

Manny Mansour

Risk Management for Personal Lines

FEMA’s Basic Flood Insurance Course

Personal Lines Round Up

Myths & Misconceptions Personal Lines

Bob Zettel

Tammy Goodman

Paul Martin

Jack Cleary

Organizing Your Agency for the 21st Century Jack Fries

Building an Effective Insurance Office Team Teresa Cross

Strategic Alliance Program for the P&C Agency

Insurance Fraud Is it on the Rise?

Jim McDaniel, Sharon Stark, Roy Cavazos

Alan Rackstraw

The Impact of Wellness Programs on Premium Rates

New Mexico Health Care Legislation

Pre-Tax Health & Retirement Plans

Anne Sperling

Linda Parker

Dealing with Difficult Clients (& others)

Maximizing Relations with Current & Future Customers

Teresa Cross

It’s All About Me! (and everyone else)

Jack Fries

Ready - Aim - Fire! Goal Setting, Planning & Leveraging Time

Patty Padon

JoDee Martinez

Group Health Insurance Carole Henry Gloria Vigil

Jim Campbell

Commercial Lines

Commercial Lines Related Coverages, Instructor: Betsy Carlson, CIC, RPLU, ASLI March 11, 8 to 12 noon 4CE Hours Betsy will discuss Related Commercial Lines Coverages: DIC, Ordinance of Law, Hired/Non-Owned Auto, Fiduciary, Travel Accident, Intellectual Property, Cyber Security, D&O, and EPLI to assist agents in protecting clients from excluded perils in standard insurance policies. This class will identify the exclusions and what policy form is appropriate to cover the exposure. It will give you practical tools to identify companies offering coverage and estimated premium. Bonds 101, Instructor: Manny Mansour, LUTC, AAI March 11, 1 to 4 pm 3CE Hours Need to sell bonds but just don’t know enough about them to feel comfortable? The objective of this class is to give you the basic knowledge needed to be comfortable in selling and working with surety bonds. This class will cover Surety basics, risk and responsibility, understanding the contract, obtaining surety credit, and reducing subcontractor financial risk. Additional Insured’s & Certificates of Insurance, Instructor: Jack Cleary, CPCU, ARM

March 12, 8 to 12 noon 4CE Hours This class will discuss types of insureds such as Named Insured, Additional and Miscellaneous Insureds under the CGL, Commercial Auto, Umbrella, and Workers Compensation policies. Other topics include: Intercompany Products Suits, Separation of Insureds, Subrogation among Insureds, Cross Liability, Additional Insured Endorsements, Application of Exclusions to Insureds, Forms of Business Organizations, Ownership and Insurance Problems, and Discontinued Operations Problems.

Business Income and the ISO CPP, Instructor: Paul Martin, CPCU (w/ IIAT)

March 12, 1 to 4 pm 3CE Hours This course will give you a thorough review of the use of the ISO business income forms to treat customer’s business interruption exposures. The class will show you how to determine the amount of insurance needed for business income and extra expense. Also, learn how to prepare illustrations which avoid your insured’s confusion about the available options.

Personal Lines

Risk Management for Personal Lines, Instructor: Bob Zettel, CIC, CPCU, ARM, AU March 11, 8 to 12 noon 4CE Hours In this course you will learn the most common loss exposures of personal lines clients and the various methods for identifying those exposures. You will learn to determine the best risk management technique beyond just insurance to address each exposure. Finally you will participate in a case study.

FEMA’s Basic Flood Insurance Course, Instructor: Tammy Goodman March 11, 1 to 4 pm 3CE Hours At the end of this course, you will have a basic understanding of the National Flood Insurance Program (NFIP) to be able to share with your clients. You will understand the general rules, review policy coverage, provide basic rating information and program eligibility. This course satisfies the one time 3 hour FEMA flood training requirement that New Mexico adopted in September of 2006. Personal Lines Round Up, Instructor: Paul Martin, CPCU (w/ IIAT) March 12, 8 to 12 noon 4CE Hours This fast-paced workshop is designed to provide you with exposure and coverage reviews for these key areas in personal lines – personal auto policy, watercraft insurance, homeowners liability, condo policies, as well as the common law obligations agents have to customers and companies. Myths & Misconceptions - Personal Lines, Instructor: Jack Cleary, CPCU, ARM March 12, 1 to 4 pm 3CE Hours Many clients face exposures not properly covered by a homeowners or personal auto policy. This class will analyze and explain common misconceptions in personal lines policies such as “Students away from home,” “Husband & wife as named insured under auto policies”, and “Uninsured motorists’ problems and issues with recreational vehicles”.

Agency Management

Organizing Your Agency for the 21st Century, (Achieve more production & profit from your present staff .) Instructor: Jack Fries March 11, 8 to 12 noon 4CE Hours This course is designed for agency owners, officers, and Managers. The primary goal is to assist management in organizing insurance agencies to grow profitably into the 21st century. Since the independent agencies of the 21st Century will face competition from direct writers, non-traditional direct writers and the Internet, they must focus their attention on structuring their agency in such a way as to provide their clients with above average customer service. The course explains how an agency can combine small commercial lines and personal lines servicing into one unit to better serve the customers. It goes on to describe exactly how to eliminate paper and how the structure of the agency must be altered to accommodate these changes.

Building an Effective Insurance Office Team, Instructor: Teresa M Cross, Ph.D. March 11, 1 to 4 pm 3CE Hours Unless we learn how to work together more effectively, Insurance agencies cannot be effective or competitive. In these changing times, we must learn to use the wisdom, vision and intelligence of EVERY member of the agency. Every individual must become an “entrepreneur” who is interested and involved in the process of managing the office. This interesting and exciting workshop uses several video segments which further enhance the learning experience.

Strategic Alliance Program for the P&C Agency, Instructors: Jim McDaniel, Sharon Stark, Roy Cavazos

March 12, 8 to 12 noon 4CE Hours Looking for new sources of income? Many P&C Agencies leave money on the table and their clients unprotected because they don’t understand how Life and Health products can be used with their commercial accounts. Learn how Life, Disability Income and Long Term Care products can be used with existing clients to improve your account retention and your bottom line.

Insurance Fraud - Is it on the Rise? Instructor: Alan Rackstraw, Chief Prosecutor, NM Insurance Fraud Bureau

March 12, 1 to 4 pm 3CE Hours As fraud fighters know, insurance schemes tend to spike when the economy heads south. Alan Rackstraw leads a team of fraud investigators as they discuss Health Care, Auto, Homeowners, and Business fraud. Find out what is the cost of fraud, how to identify it, and steps you can take to reduce fraud in your agency.

Employee Benefits

Group Health Insurance, Instructors: Carole Henry, AVP Underwriting and Gloria Vigil, Marketing Manger, Lovelace Health Plans March 11, 8 to 12 noon 4CE Hours The purpose of this class is to take an in depth look at Group Health Insurance including the basic concepts. The discussion will include the features and benefits of the various Health plans and how they are underwritten and priced. Additionally, it will investigate the impact that New Mexico regulations have on pricing and underwriting for small employer groups. The case studies will look at underwriting submissions and common mistakes which are made. New Mexico Health Care Legislation, Instructor: Anne Sperling, CSA, LPRT

March 11, 1 to 4 pm 3CE Hours Anne will be discussing the 2009 Legislative requests made by the Legislative Health and Human Services Subcommittee. She will discuss the comprehensive health care reform strategy. Anne will also be discussing how the requests turn into statute and how the state will move forward based on the legislative outcome. She will also weave the national health care discussion into the NM discussion.

Pre-Tax Health Plans, Instructor: Linda Parker

March 12, 8 to 12 noon 4CE Hours The purpose of this class will be to investigate the tax impact on Health and Retirement benefit plans and how you can add value for your clients. Linda will demonstrate that the agent doesn’t have to know everything about the various plans an employer could offer. However, they should have an idea about the benefits and where they can create a team of experts to bring added value to their clients.

The Impact of Wellness Programs on Premium Rates, Instructor: Jim Campbell March 12, 1 to 4 pm 3CE Hours This class will provide you with information to communicate to clients proven ways to mitigate future rate increases by addressing the factors which cause the increases. Specifically, you will learn how to create added value for your clients by reducing needs for employee health care utilization. The result will be greater client good will, loyalty and retention.

Young Agents/Professional Development

Working with Difficult Clients and Others, Instructor: Teresa M Cross, PhD March 11, 8 to 12 noon 4CE Hours This workshop addresses a universal need and is based on the work of organizational psychologist, consultant and author, Robert Bramson, Ph.D. Dr. Cross uses a variety of clips from popular movies and TV shows to demonstrate the way difficult people behave and how others generally respond to them. This is an entertaining, yet effective seminar that helps people to use the strategies that have been shown to be most effective in dealing with these frustrating personalities. Maximizing Relationships with Current & Future Customers, Instructor: Jack Fries

March 11, 1 to 4 pm 3CE Hours This seminar is directed towards Customer Service Representatives, Agency Salespeople and Account Managers. The program begins with a checkup of agency marketing and sales activities. It provides information regarding prospecting activities as well as, and analysis of prospecting and sales methodology. It also provides information that will allow the agency staff to better understand and address their client’s needs. The program will also provide tools that will enable agency personnel to establish and measure individual goals.

It’s All About Me! (and everyone else), Instructor: Patty Padon, AAI, CIC, LUTCF, AFSR March 12, 8 to 12 noon 4CE Hours Why is it you like one type of person over another type? Do you cringe when told you’ll have to work with someone on a special project? Discover what type of person you are and learn to appreciate differences and avoid conflicts with others. This class will help you become a better communicator while you discover who you are. “Ready - Aim - Fire!” Goal Setting, Planning and Leveraging Time, Instructor: Jo Dee Martinez

March 12, 1 to 4 pm 3CE Hours In this program you will learn to identify the difference between dreams and well-stated goals and how to strategically plan and tactically execute the goal processes. You will develop sales or professional strategies and goals based on where you are and where you want to be. Also, you will learn tactics to leverage time to achieve goals. Time management is about being more efficient in your use of time, but leveraging time is about using time more effectively, to achieve goals. You will learn to identify time wasters and tactics for dealing with them. You will also learn how to allocate time for your strategic goals and plan activities based on peak productivity periods.

E l d a u u c n a t n i A o n 9 S 4 e m s ’ inar M N A I th

Registration Form 15 Hours of Continuing Education for the Insurance Professional

hank you for choosing IIANM to provide you with quality education for the year 2009. Please fill out this form and return it to the address below before classes fill up. Please photocopy and complete a separate form for each registrant. Select a morning and afternoon class for both days of instruction to receive your full fifteen hours of continuing education. If you have any questions regarding the registration process, please call Jeff Straight at (505) 999-5802 or (800) 621-3978. Cancellation Policy: Cancellations received after Friday, March 27, 2009 will be assessed a $50 cancellation fee. Cancellations received on or after Friday, March 6, 2009 and ‘no shows’ will forfeit the registration fee altogether. A substitute is always welcome, with no extra fee, but prior notification would be appreciated. Non-Member Price

Entire Seminar One Full Day One Half Day Ethics Only

   

IIANM Member Price

$240 $140 $75 $45

$200 $105 $70 $35

Includes:

Two Full Days of Instruction - Ethics (15 hours of NM CE) One Full Day of Instruction - Ethics (8 hours of NM CE) Four Hours - AM Class / Three Hours - PM Class - Ethics included after PM session

Thursday - March 12, 2009

Wednesday - March 11, 2009  AM Course :

 AM Course :

 PM Course :

 Ethics

Attending Wednesday’s TownHall Luncheon?  Yes or  No

Thursday: Lunch on your own

Please note: The room temperature may vary, please bring a sweater

Full Name:

Method of Payment (Please note that full payment must be received with Registration Form in order to secure class reservation)

First Name for Badge:

 Bill Our Agency (For Members Only)  Charge my credit card (VS, MC, AMEX, DISC):

Address:

Amount: $ ___________ (all prices include sales tax)

City, State, Zip: Telephone: Fax:

*All fees include sales tax.

 Check Enclosed (Payable to IIANM)

Agency / Company:

(

Card No.: _____________________________________

(

) )

Exp. Date: ______________

Authorized Signature:

E-Mail:

P lease R eturn this R egistration F orm and Payment to : I I A N M , 1 5 1 1 U ni v ersity B lv d . N E , A lbu q uer q ue , N M 8 7 1 0 2 - F a x ( 5 0 5 ) 2 4 3 - 3 3 6 7 Seminar Location & Accommodations:

The Albuquerque Hilton 1901 University Blvd. NE Albuquerque, NM 87102 Phone (505) 884-2500 or (800) 274-6835

Group Name: Group Rate: Hotel Cut-off:

Independent Insurance Agents of New Mexico (IIANM) $100 - single / double March 17, 2009

IIANM’s

EducationEDGE Insurance Education Programs in New Mexico are critical to a successful and profitable career in the insurance industry. Every year, we offer exciting opportunities to expand your professional horizons. All of these education programs are designed to help insurance agents thrive in the most competitive of marketplaces. The pre-licensing classes are designed to be a review for the state licensing examination. We recommend that students be familiar with the study material prior to attending class.

Pre-Licensing Study Materials

Pre-Licensing Classes

To see a list of what is available and to purchase your study materials online, click here.

*Study materials are NOT included in class prices.

Property & Casualty Review Class (2 days)

Life & Health Review Class (1 day)

Regular Price: $150 Member Price: $120

Regular Price: $115 Member Price: $90

Instructor: Instructor:

Jack Cleary Kitty Leslie

- March 17 - 18 8am - 5pm - April 7 - 8 8am - 5pm

Instructor: Instructor:

Click here for a full listing of our education program.

Manny Mansour - March 19 8am - 5pm Bob Ouellette - April 9 8am - 5pm

The FINE PRINT: IIANM reserves the right to cancel/reschedule classes. Please call ahead to verify when classes will run. Decisions will be made three days prior to class. Cancellations received after 5 business days, will be assessed a $50.00 cancellation fee. Cancellations received on or after deadline and ‘no shows’ will forfeit the registration fee altogether. A substitute is always welcome, with no extra fee, but prior notification would be appreciated.

Class Name/Date: Full Name:

Method of Payment:  Bill Agency (Members Only)

First Name for Badge:

 Check Enclosed (Payable to IIANM)

Agency / Company:

 M/C  Visa  Disc  Amex

Address:

Amount:

(all prices include tax)

Card No:

City, State, Zip:

Exp. Date:

Telephone: ( Fax: ( Send in your registration:

)

Signature:

E-Mail:

) Go on-line: www.iianm.org or E-mail: jeff@iianm.org

Page 31

Give us a call: (505) 843-7231 (800) 621-3978

Mail in: 1511 University Blvd. NE Albuquerque, NM 87102

Fax in: (505) 243-3367

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

March's Clickable Calendar - Click on a class to register online -

Sunday

Monday

Tuesday

CE ‘ continuing education

Wednesday Thursday Commercial Property (ACSR #6) 8 CE

Friday

Saturday

Education Seminar See page 28 for more info

10 P&C Pre-licensing Class

P&C Pre-licensing Class

L&H Pre-licensing Class

Classifieds

Page 32

Where Will You Find Your Next Great Hire? Looking to fill a position within your agency? Trying to find a job but don’t know where to look? Whether you are looking for somewhere new to share your special skills or an employer looking for quality, professional employees, we are there to lend a helping hand. The staff at IIANM knows that “Teamwork Makes Us Stronger” and we want to help all interested individuals find that perfect fit. Click here to take advantage of IIANM’s Job Bank.

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

nE s d

nd s

Which is the True Shamrock? Do you know that there is no such thing as a "Shamrock Plant"? The word shamrock comes from the Irish word "seamrog" meaning "little clover". However, there are hundreds of varieties of clover. The question is...what is the "Original Irish Shamrock"? Here is what some respected authorities have to say: v "White Clover, Trifolium repens forma minus, family Leguminosae, was the original shamrock of Ireland..." Academic American Encyclopedia, Vol. 17, 1990. v "In Ireland, the plant most often referred to as shamrock is the white clover." The World Book Encyclopedia, Vol. 17, 1993. v "Those most commonly called shamrocks are: the white clover, Trifolium repens, a creeping white-flowered perennial..." Collier's Encyclopedia, Vol. 20, 1992. v "The clovers also occupied a position in the cultural life of early peoples. White clover (T. repens L.) in particular was held in high esteem by the early Celts of Wales as a charm against evil spirits. According to Evans (1957), this pagen tradition was continued by early Christian leaders and became the symbol of the Holy Trinity for the Irish people." Clover Science and Technology, N.L. Taylor, 1985.

Shamrock Facts:

Oodles o' noodles

v Before the arrival of the Christians to Ireland the plant was sacred to the Irish Druids because the three leaves formed a triad. v St. Patrick used the Shamrock leaf to illustrate the mystery of the Holy Trinity: How one God divided into three, The Father, The Son and the Holy Spirit. when preaching Christianity to the Irish people. v The tradition of wearing Shamrock on Saint Patrick's Day can be traced back to the early 1700s. v For good luck, it's usually included in the bouquet of an Irish bride, and also in the boutonniere of the groom.

It's National Noodle Month, a good time to reflect on the diversity and widespread use of this simple food. It's not certain where noodles originated, but they've been on the menu in China for at least 2,000 years. This staple is a tribute to a cook's imagination, for the dough may be made from any number of ingredients (chickpea, finger millet flour, acorn meal, rice flour, buckwheat flour, potato starch) and formed into a variety of shapes (Italy alone boasts INGREDIENTS some 300 shapes) and sizes. • 1 (8 ounce) package rice noodles • 2 tablespoons sesame oil • 1 tablespoon soy sauce • 1 teaspoon cayenne pepper • 1 red bell pepper, julienned • 1 bunch fresh scallions, chopped • 2 cloves of garlic, chopped

Asian Noodles

DIRECTIONS 1. Bring a large pot of lightly salted water to a boil. Add noodles and cook for 8 to 10 minutes or until al dente; drain and rinse under cold water to cool. 2. Place noodles in a large bowl, and toss with the sesame oil, soy sauce, and cayenne pepper. Add the red bell pepper, garlic and scallions and toss again until well mixed. Cover and refrigerate for one hour. Serve chilled. Page 33

Independent Insurance Agents of New Mexico - www.iianm.org - * March 2009

Insuring New Mexicans @ work for over 17 years

S A F E T Y

T H E

J O B S I T E

PEACE OF MIND @ THE OFFICE SM

CUSTOMER SERVICE @ ITS BEST SM

PO Box 27825 • Albuquerque, NM 87 125-7825 1.505. 345.7260 • toll free 1.800.788.8851 www.NewMexicoMutual.com