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N A T I O N A L L E G I S L A T I V E C O N F E R E N C E & C O N V E N T I O N
National Leaders, Top Industry Executives Headline Must-See Event
National Legislative Conference & Convention runs April 26 through 28.

Newly elected House Majority Leader John Boehner (R-Ohio) will speak at this year’s National Legislative Conference & Convention, adding yet another all-star to the lineup at this must-attend industry event running April 26 through 28.

Boehner, an eight-term congressman, will address agents and brokers at the legislative breakfast on Thursday, April 27. He joins a distinguished speaker list that includes the following leaders:

· Gen. Colin Powell (USA, Ret.), former secretary of state, the convention’s keynote speaker.

· House Financial Services Committee Chairman Mike Oxley (R-Ohio), the leadership luncheon speaker.

· Sen. Mark Pryor (D-Ark.), a leading Senate moderate who also will speak at the legislative breakfast.

· Rep. Bobby Jindal (R-La.), House freshman class president, who will address the InsurPac-Young Agent Luncheon.

"Majority Leader Boehner is one of the most effective legislators in Congress, and now his colleagues have elected him to lead the House of Representatives," says Big "I" CEO Robert A. Rusbuldt. "He is in a prime position to advance legislation on issues that affect our members on a daily basis. Our agents and brokers are eager to hear what he has to say on issues that affect their businesses and livelihoods, including tax reform, insurance regulatory modernization and other insurance, economic and national issues."

This power-packed speaker lineup is one of many reasons why the Big "I" National Legislative Conference & Convention is a must for independent insurance agents and brokers. Attendees will also have the chance to hear from top industry leaders at Friday’s CEO Panel, which will include the following executives:

· Edward Liddy, chairman & CEO, Allstate Corp.

· Ramani Ayer, chairman & CEO, The Hartford Financial Services Group.

· Paula Rosput Reynolds, president & CEO, Safeco Corp.

· Gary Gregg, president & CEO, Liberty Mutual Agency Markets.

· Michael Browne, president & CEO, Harleysville Group.

The event also includes a must-see flood seminar, which will feature David Maurstad, director of the Federal Emergency Management Agency’s National Flood Insurance Program, along with the top flood insurance experts in the country. With flooding among the predominant issues in the industry, don’t miss this great opportunity. Attendees will never have the chance to hear from more flood experts at the same time than at this seminar.

Other highlights of the Big "I" National Legislative Conference & Convention will include an update on the rapidly growing Trusted Choice® branding program; an in-depth issues briefing session; the annual Big "I" congressional reception on Capitol Hill; hundreds of meetings on Capitol Hill between Big "I" attendees and their elected representatives in the Congress; and the industry’s largest and best-attended trade show.

The legislative conference provides an excellent opportunity for agents and brokers to discuss important issues with their congressional representatives. Top issues this year include insurance regulatory reform, legal reform, tax reform and more.

For the first time, attendees can have all this in a "one-stop" event. To register online, click here. Register now!

There is no such thing as a perfectly smooth transaction. Among the roadblocks that pop up daily in a producer’s quest to serve customers quickly and efficiently: clients’ skepticism of needing advice and product providers’ complicated and time-consuming paperwork requirements.

A recent ING U.S. Financial Services survey finds that these two problems create major headaches for producers selling financial products. However, the survey says there is one solution that could concurrently cure both ails: make financial products, processes and information easier for both producers and clients.

The survey posed the following agree-disagree statement: "When a financial institution is difficult to work with, it costs me money." Nearly nine out of 10 of the survey’s 300 respondents agreed.

The Feb. 2 IN&V article "Agents Speak Out to Shape their Future" suggests ways that insurance carriers can become easier and more efficient for independent agents to deal with, mainly via improved rating workflow, real-time multiple company rating.

"Real-time multiple company rating enables an agent or broker to request and receive rates from multiple carriers simultaneously working through the agency management system or a comparative rater," the article says. "This improved agency workflow eliminates the separate logons, passwords and multiple data entry required in today’s environment of multiple company Web sites."

Also problematic at times are consumers’ attitudes toward financial professionals. (See "Why Consumers Need Independent Agents" below for more on battling consumer perceptions.) About a third of survey respondents say that it is more difficult to advise clients today than it was five years ago. Among the difficulties:

· Getting people to make decisions (90%).

· Convincing prospective clients that they need a financial professional’s help/guidance to prepare successfully for their financial future (85%).

· Overcoming people’s lack of interest in financial planning (82%).

· Overcoming people’s intimidation about financial planning (81%).

"In today’s world, the average American needs a trusted financial professional more than ever," says Toby Hoden, ING U.S. Financial Services chief marketing officer. "People are still intimidated by managing their finances or just aren’t interested in taking action to ensure a secure financial future. If we make financial services easier, perhaps more people would be more engaged in the process."

The survey does have a silver lining. Respondents who reported an improved ease of doing business with financial companies cited the following differences:

· Support became better/more accessible (28%).

· The amount of information, paperwork or number of products they offered was streamlined or made better (28%).

· Their wholesalers have become more responsive (22%).

In the spirit of actor Albert Finney ("Network") and newsman Andy Rooney ("60 Minutes"), I’m interrupting this week’s regularly scheduled article because I’ve hit the wall with ignorant, bombastic messages that lambaste insurance agents. What precipitated my fury? I received the following solicitation via e-mail:

NEVER ACT ON RETIREMENT ADVICE FROM ANYONE WHO EARNS A COMMISSION AT YOUR EXPENSE!

Totally independent, practical, realistic help and advice from an honest, trustworthy—if sometimes unpopular—retirement authority.

While you can view this advertisement as the self-serving message that it is (touting retirement Internet advice newsletters), independent insurance agents need to look at it in terms of the current regulatory framework. For the sake of full disclosure, let me state that I have received compensation via both hourly fees and commissions during my career.

Now let’s analyze the message. First, is the message of the ad that life insurance, mutual funds, Medicare supplements, long-term care insurance and all financial products should not be purchased from an agent? Second, is the company making this statement naïve enough to believe that all consumers are the do-it-yourself types? If so, then why did total sales of life insurance actually decrease from 2004 to 2005 if consumers supposedly can purchase inexpensive life insurance online?

If the concept of independent advice from afar is valid, why is the rate of savings relatively low for corporate 401(k) plans? In most cases, no salesperson "sells" anything, and major retirement plan providers’ Web sites tout the advantages of saving through a 401(k) plan. Yet consumers are saving far less and spending far more that they should. It is great that companies provide information people can use to learn basic financial information, but tax laws’ complexity, coupled with the uniqueness of an individual’s objectives and needs, dictates that the vast majority of the public needs individualized, customized recommendations. Insurance agents are implementers, first and foremost.

In terms of compensation and objectivity, all service providers, from insurance agents to CPAs to lawyers, should tell clients how they get paid at the beginning of a business relationship—and virtually all do. Goodwill is independent agencies’ greatest value, and reputation drives that goodwill. Independent agents are located on Main Street, not Wall Street, and they see customers almost every day.

While it’s easy to shrug off these types of solicitations, agents need to remember that so-called "consumer advocates" regularly stalk regulators, painting regulation with a very broad brush and enjoying enacting cumbersome rules. Agents who have delivered life insurance proceeds to beneficiaries know the importance of their work. Beginning in 2011, if the estate tax laws are not repealed, insurance agents once again will have to assist clients to ensure that their businesses and families are protected and that their assets are not liquidated to meet large estate tax obligations.

While independent insurance agents have developed a thick skin when it comes to unfair characterizations, they should never hesitate to educate customers and the public at large on the value of their services.

Dave Evans (dave.evans@iiaba.net) is a certified financial planner and IA l-h contributing editor.

What happens if an insured is sued for damages arising out of an occurrence that took place many years ago, and he is unable to find the policy in force at that time, so the insurer says it won't respond?

The Virtual University recently pondered this dilemma when it received the following question about what to do when a policy is lost:

"We have an insured with a claim arising out of occurrences that took place in the late ’60s and early ’70s. We have received a copy of a letter that the carrier sent to the insured that reads in part:

‘If you have copies of the alleged policies, please forward them to us immediately. While we will continue to cooperate with you in an effort to locate documentation of the alleged policies, pleased be advised that it is the burden of the party seeking benefit of an insurance policy to prove both its existence and provisions. Until the existence and provisions of the alleged policies are proven through satisfactory written evidence, we cannot undertake any action whatsoever on behalf of (insured named) in regard to this matter under the alleged policies.’

"Isn't this why insurance companies micro-fiche their files? Is the insured ultimately responsible for providing these copies?"

As a general rule, yes, it is the responsibility of the insured to demonstrate that a policy or policies existed. If it's reasonably certain, even from circumstantial evidence, that the insurer was the insurer at that time, then the carrier—if not legally, at least ethically—has some obligations to assist in the search.

So, the insured usually has the burden of proof in establishing that a policy existed and the basic terms, while the carrier has the burden of demonstrating exclusionary provisions. The insured does not necessarily have to produce the actual policy. In general, if a diligent search does not produce the policy but does produce secondary evidence, a majority of courts appear to take the position a preponderance of evidence may establish coverage.

The article discusses several cases from the standpoint of litigation on this issue. For the VU’s detailed look at the often-cited case of Dart Industries, In.. v. Commercial Union Insurance Company, 28 Cal. 4th 1059, 52 P. 3d 79 (2002), click here.

The agency, from both E&O and customer-service perspectives, should keep an archived copy of policies indefinitely. It is probably not necessary to keep a copy of every policy of every insured, as long as you keep a sample copy of each form edition. For example, if you have dozens of insureds covered under a company's proprietary policy, you could retain one copy of that policy as long as the Declarations page or customer file accurately identifies that policy edition.

Insurance Archeology Group and R.M. Fields, International provide these kinds of services. They are consultants who rebuild historic insurance coverage. APH claims are still coming in from the ’50s and ’60s, and the burden does lie with the insured.

For businesses with operations that rely extensively on auto fleets, damage to vehicles can result in significant business income losses. Commercial property forms exclude damage to autos, but do they exclude any resulting business income loss?

"I need to see a copy of the endorsement/form for 'Truckers Downtime' coverage. I have a client with a large fleet of tractors and trailers. They want to be insured for business income in the event of a loss at their location, which results in non-operation of their fleet (e.g., flood, tornado, etc.). The client is located in a small town north of Atlanta and has limited access to replacement vehicles. They are afraid of a long 'downtime' period. It is my understanding that coverage usually provides rental, business income, and lease/loan payments if applicable. Any advice or possibly the form?"

There are three primary options to address this exposure: (1) standard business income insurance; (2) fleet downtime coverage; and (3) risk management.

First, while this is often misunderstood, the standard ISO Business Income form provides coverage for many perils. Direct damage to property on the premises triggers coverage, as shown in the following policy excerpt:

"We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your ‘operations’ during the ‘period of restoration.’ The suspension must be caused by direct physical loss of or damage to property, including personal property in the open (or in a vehicle) within 100 feet, at premises which are described in the Declarations and for which a Business Income Limit of Insurance is shown in the Declarations. The loss or damage must be caused by or result from a Covered Cause of Loss."

Note that there is no requirement in the ISO form that the insured own the damaged property or the property insured under the commercial property forms—it just says "property." While the ISO Building and Personal Property Coverage Form does not cover damage to automobiles, the Business Income form has no such property exclusion. Therefore, in the even of trucks and trailers damage, it would cover a resulting business income loss and the extra expense incurred to minimize the suspension of operations. Of course, damage would have to be the result of a covered peril, so one peril mentioned above—flooding—would not be covered. Of course, the VU recommends providing Business Income coverage using the ISO Special Causes of Loss form.

Second, according to VU faculty, some companies have proprietary Business Auto endorsements to provide this coverage (e.g., Farmland and possibly Great West Casualty), but we are not aware of any ISO form nor can anyone come up with a specimen of a company form. It is possible that such forms could provide broader coverage (e.g., flood damage) but, of course, it's just as likely that coverage could be more restrictive than the ISO Business Income forms.

Third, where possible and economically feasible, the insured may want to practice some basic risk management and loss mitigation techniques such as loss control and segregation of exposure units, particularly with respect to perils not covered by the ISO Special Causes of Loss form.