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January 27, 2010
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| In this Issue
• Breaking News: NYSID OKs Referral Fees from Online Defensive Driving Course Providers
• Don't Forget to Participate in the IIABNY Industry Index Survey
• LinkedIn Workshop, Reception for Next Generation Insurance Professionals Set for L.I.
• Agents, Brokers will Speak with One Voice During IIABNY Capital Event, L Day
• Attention Excess Lines Brokers: 2009 Premium Tax Statement is Due Soon
• Health Care Update: GOP Win in Mass. Senate Race Changes Dynamics in Washington
• ACT Introduces Webinar to Assist Agencies with Social Web Policies
• Insurance Dept. Opinions: Agency Ownership, Prelicensing, Affiliated Corporations
| Hot Links Local Events | Education Calendar | E&O Reports |Capitol Reports | The Situation Room | Technology
Word on the Street Podcast | Ask Tim Podcast
| Breaking News: NYSID OKs Referral Fees from Online Defensive Driving Course Providers
An attorney for the New York State Insurance Department has told IIABNY that insurance producers may accept referral fees from online defensive driving course providers, but they should fully disclose the arrangements to their potential and existing clients. Shortly after the state Department of Motor Vehicles started approving online defensive driving courses last spring, course vendors began to offer producers arrangements under which a producer displays the online course provider’s Web site link on its Web site and the provider pays referral fees to the producer based on the number of clicks on the link. Several IIABNY members contacted the association to ask whether they would break New York law by accepting these fees. Tim Dodge, IIABNY director of research and external communications, formally requested an advisory legal opinion from the department late last summer. In the opinion faxed to IIABNY on Jan. 26, the attorney for the department’s Office of General Counsel found that nothing in the New York Insurance law or regulations prohibits these types of arrangements. The attorney noted, however, that: …the producer should inform insureds or potential insureds on the website (sic) that the producer will receive compensation from the course provider each time a visitor to the website clicks on the link. The producer also may wish to include language on its website that informs all visitors that the purchase of an online driver safety course from the course provider whose link appears on the website is entirely optional on the visitor’s part. In addition, the producer should take reasonable steps to ensure that neither the link appearing on its website, nor other information on the producer’s website, contains incorrect or misleading information about the driver safety course.
The complete text of the opinion should be available on the department’s Web site within the next few weeks. | | | Top of page | | | Don't Forget to Participate in the IIABNY Industry Index Survey
Since 2007, the IIABNY Industry Index has taken the pulse of the insurance industry in New York by measuring how insurers are performing in the eyes of their producers. Judging by the calls we receive from various insurance companies, we believe they seriously review and consider the results. The IIABNY Industry Index provides insurers a group report card, but it also tells individual insurers how their producers think they are doing. Research firm Vincent McCabe is in the process of gathering data for the winter 2010 edition of the index. If you have not received a survey request from them yet, you may well receive one soon. Whether you love what your companies are doing or hate it, this is your chance to grade them. We strongly encourage all IIABNY members to spend a few minutes answering the survey questions. | | | Top of page | | | LinkedIn Workshop, Reception for Next Generation Insurance Professionals Set for L.I.
Join the Next Generation Insurance Professionals Feb. 24 for an evening of connecting with other young agents at Dave & Busters in Farmingdale. The meeting will be an opportunity to learn how LinkedIn, as a social networking platform, can help an agent identify prospects, strengthen existing relationships and maintain a robust professional network. A cocktail reception that follows will be an opportunity to connect with peers in a relaxed atmosphere with games and entertainment. Register today and then visit the IIABNY page on Facebook to see photos from previous Next Gen events. E-mail Paul Banuski with any questions or call him at (800) 962-7950 ext. 226. | | | Top of page | | | Agents, Brokers will Speak with One Voice During IIABNY Capital Event, L Day
Insurance agents, brokers and carriers, concerned and committed to speaking out about laws and regulations affecting their industry, have gathered in Albany for the past 40 years. During all that time, attendees at IIABNY’s L Day have taken time from their busy schedules to make a difference for all of us earning a livelihood in the insurance business. If you have not attended in the past, maybe it is time to make the commitment as well. Although IIABNY regularly advocates for all its members, nothing is more impressive or powerful to elected officials than seeing large numbers of voters from one particular industry coming together on important common issues. L Day will focus this year on several critical issues, including the proposed compensation disclosure regulation and regulation of the State Insurance Fund. It is also extremely important that we continue to press for coastal market availability and affordability. Your presence could positively influence the outcome of many of these important issues. Check out the 2010 Legislative Position Paper that can assist you in speaking with authority on these primary issues as well as other issues important to independent agents and brokers throughout New York. An issues briefing* with IIABNY Legislative Representative Michael Barrett follows a new format. The briefing will be conducted from 5:15 p.m. to 6 p.m. Feb. 8 at the Crowne Plaza. Materials that can assist you in your discussions with legislators during L Day will be distributed at that time. Is it too much to commit two days out of the year to the profession that is our livelihood? Is it fair to expect some agents to represent everyone? IIABNY’s Capital Event and L Day offer agents and brokers the opportunity to improve your professional skills, speak out about laws and regulations governing your industry and spend time socializing and networking with other agents, brokers and company representatives. That’s why our theme is Grow. Connect. Influence. If you haven’t yet registered, don’t wait. Register today. *As a preview of the issues that will be discussed with our legislators on L-Day, a 2010 Legislative Briefing Webinar will be presented Friday from 11 a.m. to noon. IIABNY's legislative representatives Michael Barrett and Jill Muratori will discuss the association's legislative priorities for the 2010 New York State Legislative Session during this free Webinar. | | | Top of page | | | Attention Excess Lines Brokers: 2009 Premium Tax Statement is Due Soon
The Excess Line Association of New York last week reminded excess line brokers that tax day for them comes a month early. By March 15, all licensed excess line brokers must file a 2009 premium tax return even if they did not make any placements last year. ELANY has written instructions and a short instructional video on its Web site. | | | Top of page | | | Health Care Update: GOP Win in Mass. Senate Race Changes Dynamics in Washington
by Joe Wall, IIABA senior director of government relations Scott Brown, a Republican state senator from Wrentham, Mass. turned the health care reform debate upside down last week. Brown’s upset victory over Massachusetts Attorney General Martha Coakley (D) in the special election to fill the balance of the late Sen. Ted Kennedy’s term in the U.S. Senate has put the prospects for passage of the current health care reform proposals in peril and left the White House and Democratic Leadership soul-searching for the best way forward. Gone is the filibuster-proof majority of 60 votes in the Senate as is the ability of Democrats to pass a House/Senate health care reform compromise under regular order without the help of at least one Senate Republican. Perhaps even more concerning for Democratic Leadership is the reaction from their rank-and-file members whose appetite for passing health care reform legislation, as currently drafted, is waning at a steady clip. The following are some options for health care reform that seem to be on the table; however, the option most likely to prevail remains unclear. Pass a scaled-back, bipartisan health care reform bill. The president has suggested, in private meetings this week, that he is willing to go down this avenue and there appears to be extensive support from rank-and-file Democrats as well. This option may include one scaled-back, bipartisan health care reform bill or a series of bills. This option would take cooperation from both sides of the aisle and could be difficult to achieve in the polarizing political environment. However, some consider this the most viable option. The House passes the Senate health care reform bill. This is the White House’s preferred option, but it’s under fire from House Democrats and some labor unions. This option would force the House to take a difficult vote, but allow the Senate to wash their hands of the process. Moderate House Democrats, wary of the political climate, do not want to further endanger their political careers with another tough vote, and the more liberal side of the caucus is opposed to the funding mechanism included in the Senate bill. A good chunk of the funding for the Senate bill is from the Cadillac tax on high-cost insurance plans. The tax is expected to hit many union health care plans, making it a volatile issue for Democrats. One way around the issue is to ask the House to pass the Senate bill with the promise of amending controversial issues such as the Cadillac tax through a separate reconciliation bill that will only require the support of a simple majority of both chambers. The House and Senate pass health care reform by using the partisan budget reconciliation process. Given the new 59-41 margin in the Senate, this option is back on the table, but it comes with great political risk. Should it be invoked, Senate Democrats would only need 50 votes from their caucus, plus a visit to the Capitol from Vice President Joe Biden, in his role as president of the Senate, to push it over the top. Aside from the political calculus, this path is very messy from a legislative perspective. In order to qualify for the reconciliation bill, a provision must be tied to revenue – either positive or negative. In this scenario, several provisions included in the current bill would be excluded from the reconciliation bill because there is no revenue associated with them. As several Senate experts have noted, a reconciliation bill would closely resemble Swiss cheese. The White House and Congressional leaders decide to put health care reform on the shelf and pivot to working on economic/jobs issues. This is obviously the worst-case scenario for the White House and Congressional Democrats, but it became much more viable after Brown’s election results. According to the Rasmussen post-election poll of Massachusetts voters, 56 percent of voters said health care reform was the most important issue, meaning their votes were a referendum on the health care bill. Those poll numbers, along with Brown’s margin of victory, will force Democrats to at least ponder this option.
Tonight, President Barack Obama is scheduled to deliver the State of the Union Address, and he will likely prescribe a pathway forward for Congress. Stay tuned. The preceding article was originally published in the Jan. 24, 2010 issue of IIABA’s Insurance News & Views. | | | Top of page | | | ACT Introduces Webinar to Assist Agencies with Social Web Policies
IIABNY encourages you to take advantage of the Agents Council for Technology's newest free hour-long Webinar, "Formulating a Social Web Strategy & Policy for Your Agency," scheduled Feb. 11 to begin at 2:30 p.m. The Webinar will discuss the management process two agents — Angelyn Treutel and Cindy Adams — and insurance company executive Katie Herbst underwent in deciding on an appropriate Social Web strategy for their organizations. Their example will also cover securing employee buy-in and creating an appropriate Social Web policy for their firms. The Webinar will also reference ACT's new agency resource, "Creating a Social Web Policy for your Independent Agency," which can be accessed online. The session will also feature Rick Morgan, Chair of ACT's Social Web Work Group and ACT Executive Director Jeff Yates. Register now. After registering, you will receive a confirmation e-mail message containing information about joining the Webinar. After logging in to the Internet session, you can listen to the audio through a computer headset or speakers. If you prefer, you will also be provided with a toll-number to call and listen to the audio over a phone line. System Requirements PC-based attendees: Required: Windows® 2000, XP Home, XP Pro, 2003 Server, Vista Macintosh®-based attendees: Required: Mac OS® X 10.4 (Tiger®) or newer
| Top of page | | | Insurance Dept. Opinions: Agency Ownership, Prelicensing, Affiliated Corporations
Insurance agency ownership, exemptions from prelicensing course requirement and how New York law applies to affiliated corporations were the focus of advisory legal opinions issued by the New York State Insurance Department’s Office of General Counsel during the first half of January. An employee of a licensed insurance broker who has work experience in a variety of underwriting-related activities is qualified to obtain a property-casualty broker’s license without having to complete the 90-hour prelicensing course. New York law and regulations permit a wholly owned subsidiary of a not-for-profit automobile club to own 50 percent or less of the shares of an insurance agent that will receive more than 10 percent of its aggregate net commissions from the placement of insurance with members of the automobile club. The auto club may not receive the benefit from dividends paid by the insurance agent to the automobile club subsidiary as a shareholder, where the insurance agent markets and sells insurance only to members of the automobile club. The insurance agent may sub-lease a mailing list, office space, staff and equipment from the wholly owned subsidiary of the automobile club for a flat fee determined in advance without violating the law. New York Insurance Law Sect. 3426, which governs cancellation, conditional renewal and non-renewal of many commercial lines policies, applies to policies covering affiliated corporations where the first-named insured’s location is in New York. An insurer that issues a policy to an insured principally headquartered outside of New York but that covers risks in New York must file its policy forms with the Insurance Department.
The OGC issued one other opinion pertaining to an insurer adjusting claims on behalf of another insurer. All opinions issued since 2000 are available on the department’s Web site. | | | Top of page | | |
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