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November 11, 2009
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| In this Issue
• Five NY Congressmen Side with Agents in Health Care Reform Vote
• Insurance Superintendent Wrynn Visits IIABNY Office
• I.I.I.: Second Quarter Sees Spike in NY No-Fault Medical Claims Costs
• Electronic Records Consent Form Available on IIABNY Web Site
• IIABA Issues White Paper on Catastrophic Homeowners 'Exclusion'
• Hartford AARP Program Agency Addendum Review Posted on IIABA Web Site
• ACT Launches Podcast Series
• Consumers Cite Agents as Most Credible Insurance Resource
• Survey Finds 'True Partnership' Among Carriers, Agents, Brokers Remains Elusive
| Hot Links Local Events | Education Calendar | E&O Reports |Capitol Reports | The Situation Room | Technology
Word on the Street Podcast | Ask Tim Podcast
| Five NY Congressmen Side with Agents in Health Care Reform Vote
Three New York Democrats voted for agents when they voted against the House Democratic Health Care Reform bill (H.R. 3962 – the so-called "Affordable Health Care for America Act"). Congressmen Eric Massa (D-29th), Mike McMahon (D-13th) and Scott Murphy (D-20th) all voted against the bill, which passed by a slim five-vote margin. (220-215). In addition to their votes, Republicans Peter King (R-3rd) and Chris Lee (R-26th) also voted against the bill. IIABA and IIABNY strongly opposed the House bill because it contains a government-run health insurance plan that would unfairly compete with the private market, limit consumer choice and increase the taxpayer burden by imposing new taxes and mandates on employers. "In order to finance the government-run health insurance plan, a 5.4-percent surtax would be imposed on successful small businesses that file as individuals," IIABA stated in a news release issued following the House vote. "The legislation will also force small employers with more than $500,000 in payroll to offer their employees health insurance and subsidize their premiums, 72.5 percent subsidy for individual plans and 65 percent for family plans, regardless of their current plans or taking into account what they can actually afford. If a small business is unable to afford this new mandate, they will be subject to an 8 percent payroll tax. "Finally, the legislation creates a new Small Business Administration grant program that would award federal money to non-profits for the purpose of providing small businesses with less than 100 employees assistance with consumer information, outreach, counseling and enrollment." Debate on a final Senate bill, which has not yet been released, is not expected until next week at the earliest. Any legislation approved by the full Senate would have to be reconciled with the House bill. | | | Top of page | | | | |  | | | NYS Supt. of Insurance James Wrynn |
Insurance Superintendent Wrynn Visits IIABNY Office
New York State Superintendent of Insurance James Wrynn visited the IIABNY office in DeWitt Nov. 6 and met with members of the association’s staff following an earlier meeting in Syracuse that included several member agents representing IIA of Central New York. Wrynn spoke in IIABNY’s Stephen T. Dooley Memorial Conference Room and briefly answered a range of questions before heading back to Albany later in the day. Staff from Kemper Insurance Cos.’s DeWitt office also greeted Superintendent Wrynn during his visit at IIABNY’s office. The discussion centered on the superintendent's priorities, which he said include enhancing New York's status as a world financial center; making New York an easier place to conduct insurance business; and reviving the New York Insurance Exchange. Other topics of conversation were the state Insurance Department's proposed regulation on producer compensation disclosure and the medical malpractice insurance market. For more photos from Wrynn’s visit, go to the IIABNY page on Facebook. | | | Top of page | | | I.I.I.: Second Quarter Sees Spike in NY No-Fault Medical Claims Costs
New York’s auto insurers saw their typical no-fault payment for the medical care of accident victims rise by 56 percent to $8,748 per claim in the second quarter of 2009. This represents a dramatic increase from late 2004, when the average no-fault payment stood at $5,615 per claim, according to an Insurance Information Institute analysis. The insurance industry, the state Insurance Department’s Frauds Bureau, the National Insurance Crime Bureau and law enforcement agencies continue to investigate suspicious claims vigorously, according to I.I.I. President Robert Hartwig, who is an economist and former IIABNY at-large director. Yet loopholes in the no-fault system make it particularly vulnerable to fraud and abuse by a "no-fault industry" of corrupt medical professionals, attorneys, and street-level criminals who work on their behalf. "In less than five years, New York’s auto insurers have seen an extraordinary 56 percent increase in the average cost of no-fault claims, to a great extent the result of abuse and, sometimes, outright fraud in the system," stated Hartwig in remarks delivered to the New York Insurance Association’s annual meeting. "The costs of fraud and abuse of the state’s no-fault system ultimately are borne by New York’s honest policyholders. New York’s no-fault claim costs are now the second highest in the country and are 111 percent higher than the U.S. average of $4,152." | | | Top of page | | | Electronic Records Consent Form Available on IIABNY Web Site
We reported in September on a New York State Insurance Department opinion stating that an insurer or producer must obtain a client’s consent before sending policies to the client electronically. Attorney James C. Keidel of Keidel, Weldon & Cunningham, LLP, IIABNY’s errors and omissions legal counsel, also addressed this issue in the December 2008 issue of The E&O Report. (Please note that a member login is required to access The E&O Report.) The department cited Section 309 of the New York State Technology Law, which states that no one can be required to use or accept electronic records unless other provisions of the law require it. In the months since, some IIABNY members have asked for a sample permission form that they can have clients sign. This form is now available for download from the E&O TLC main page of the IIABNY Web site. Members are free to use it in client agreements. | | | Top of page | | | IIABA Issues White Paper on Catastrophic Homeowners 'Exclusion'
The Big "I" Technical Affairs Committee has published a white paper entitled, "’Where You Reside’ – The ‘Where’s Waldo®?’ Catastrophic Homeowners Policy ‘Exclusion’ That Could Bankrupt Your Insureds." Most homeowners policies provide coverage for the dwelling on the "residence premises." The term "residence premises" is typically defined to include the dwelling "where you reside." The question is, what happens if you no longer (or never) reside(d) there? This situation can arise unexpectedly with emergency admissions into long-term care facilities, urgent job relocations, military deployments, illnesses or deaths, and other situations beyond the control of insureds. Other circumstances may include foreclosures, temporary rentals, and renovations. It is not uncommon for a homeowner who has sold her home to move out and allow the purchaser to move in days before the closing, leaving the existing homeowners policy in force. According to some interpretations and court cases, these situations could result in claims for damage to the dwelling to be denied by insurers. IIABA is aware of at least four real-life claim denials up to six-figures in size because of circumstances not contemplated by agents, much less consumers. The Big "I" has also documented at least nine court decisions that have upheld claim denials of these types. In the case of foreclosures, both the homeowner’s and lender’s interests may be imperiled, despite the existence of the standard mortgage clause. A one-hour nationwide Webinar on this subject will be presented Dec. 3. Additional information is posted online. Members can also download the white paper and executive summary at the Big "I" Virtual University Web site. | | | Top of page | | | Hartford AARP Program Agency Addendum Review Posted on IIABA Web Site
The IIABA Office of the General Counsel recently completed the contract review for The Hartford AARP Program Agency Addendum. IIABNY members can download it by visiting the IIABNY Research Library main page and clicking the Contract Reviews link. We encourage agents to read carefully every agreement they consider signing, including company appointment agreements. The Big "I" contract reviews are a free member benefit to assist members with the important job of reading and evaluating appointment agreements as part of the agent’s decision-making process. This benefit is limited to members only, so it is necessary to log in with an IIABNY user ID and password. The reviews are in the Legal Advocacy section of the IIABA Web site, which also contains extensive legal analyses of subjects such as the federal laws regulating e-mail, faxing, privacy protection, and money laundering. For more information about contract reviews, e-mail Debra Perkins or call her at (800) 221-7917. | | | Top of page | | | ACT Launches Podcast Series
The Agents Council for Technology has released podcasts on agency productivity and Internet marketing. The podcasts include audio of two highly successful panel discussions that took place at the ACT Special Event with Young Agents and IIABA state officers in New Orleans this fall. Each podcast is about one hour in duration and is set up for one click download to an iPod or listening on a PC. Free downloads are available by visiting the ACT Web site. "These podcasts provide a great summary of the breakthrough strategies agencies are employing today to enhance their productivity and Internet marketing presence," says Jeff Yates, ACT executive director. "These sessions will be of great value to any agency principal, manager, producer or customer service representative who is interested in selling more, serving clients more effectively and enhancing the value of his or her business." | | | Top of page | | | Consumers Cite Agents as Most Credible Insurance Resource
by Katie Butler, IA magazine editor & chief Despite the fact that the media is filled with members of Congress, President Barack Obama and pundits talking about insurance every day, consumers are more likely to trust what they hear from their local insurance agent. More than 64 percent of respondents in a recent study said they trusted their insurance agent for credible information about insurance industry issues – the highest ranking in the survey. The study, recently conducted by the Property Casualty Insurers Association of America, looked at the attitudes of registered voters and opinion elite (30+, college degree, household income of more than $50,000 and significant consumers of news) on the financial crisis and insurance-related topics. Agents topped the field of sources that consumers trust most for insurance information, followed by insurance companies (61 percent), local newspapers (52 percent) and President Barack Obama (51 percent). Members of Congress and U.S. Treasury Secretary Timothy Geithner ranked at the bottom of the list at 39 percent and 37 percent respectively. Although the survey found property-casualty companies are less likely than others to receive blame for the financial crisis, significant numbers do believe home/auto and commercial carriers played a major role. For example, 87 percent of national survey participants thought mortgage lending companies played a "major role" in the crisis, while 46 percent thought commercial insurance companies played a major role. Interestingly, respondents said home and auto carriers, at 29 percent, ranked below consumers themselves (38 percent) as a source of blame. Many focus group respondents lumped banks, mortgage lenders, insurance companies and other bad actors (such as Bernie Madoff) together in their views on the economic crisis. To prevent a future economic crisis, 61 percent said "determining which sectors of the marketplace caused the financial crisis and fixing the gaps in federal oversight" was the solution, rather than imposing comprehensive regulation on the entire sector. Study participants stressed the importance of enforcing regulations already in place. While the focus groups were largely unaware of how p-c companies were regulated, 57 percent thought p-c companies should be regulated at the state level. The preceding article appeared originally in the Nov. 5, 2009 issue of IIABA’s Insurance News & Views. | | | Top of page | | | Survey Finds 'True Partnership' Among Carriers, Agents, Brokers Remains Elusive
The much touted partnership between insurance carriers and their agents and brokers does not facilitate enough open communication and input on strategic business activities, according to a new survey of property and casualty agents and brokers by Deloitte and National Underwriter magazine. Results of the Producer Satisfaction Survey, released recently, found that the more frequently carriers sought input from producers about strategic business activities, the more satisfied the producers are with the carriers. Yet, the survey indicates that carriers do not routinely seek input from agents and brokers, with only an average of 10 percent of respondents saying they are consulted "often" by carriers on matters including marketing, product development, technology, claims and distribution. "Carriers need to develop an agent-centric approach that views producers as true business partners in co-creation of value. This may require a change in mindset from the carriers' perspective, both in terms of seeking agents' input on business activities and then actually processing and understanding what is important to the agents," said Rebecca Amoroso, leader of Deloitte's U.S. Insurance practice. Amoroso added, "Designing a relationship strategy that will accomplish this, and actively involving agents in strategic business activities, actually offers a true competitive advantage to the carriers that execute first. By creating an 'agency experience' similar to the customer experience — and then customizing it to unlock further value — the carrier can fulfill agents' needs while gleaning the kind of insight that can act as a strategic catalyst for growth at the carrier level." National Underwriter editor in chief Sam Friedman stated: "Insurers often talk a good game when it comes to being a partner with the independent agents and brokers who sell their products and services. But, to really walk the walk, carriers must get distributors of all sizes more closely involved with branding, marketing, pricing and service issues, not only for their own mutual benefit, but for the benefit of their clients." The July 2009 survey of 1,596 qualified agents and brokers focused on gauging agency experience attributes and related products and services most important to producers; measuring producer satisfaction and determining what priorities and concerns producers would concentrate on over the next 12 months. A copy of the survey is available on National Underwriter's Web site. | | | Top of page | | |
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