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March 24, 2010
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| In this Issue
• IIABA Announces Changes to Trusted Choice®
• Big ‘I’ Health Care Reform Update: Debate Moves Back to Senate after House Vote
• More than $50,000 in InVEST Student Scholarship Money is Up for Grabs
• NYIA: Earthquakes Don’t Only Happen Out West
• Auto Plan Announces New Rules for Snowmobiles
• ELANY Issues Reminder about E&S Export List, Affidavits & Declinations
• Insurance Dept. Opinions: Gap Waivers, BOCES-Owned Broker, No Cash, Please
• Using SEO, Other Online Tools Can Help Customers Find Your Agency on the Web
• Tips You Can Use: Purchase Proper Watercraft Coverage for Your New Boat
| Hot Links Local Events | Education Calendar | E&O Reports | Capitol Reports | The Situation Room | Technology
Word on the Street Podcast | Ask Tim Podcast
| IIABA Announces Changes to Trusted Choice®
Editor’s Note: Look for more information from IIABNY after the association’s May board of directors meeting that will determine IIABNY's plan for implementation of these changes. At this time, current Trusted Choice® members don’t need to do anything differently from what they are currently doing right now. Non-Trusted Choice members can take advantage of reduced membership fees, but again they don’t have to take any steps at this time. Following is an outline from IIABA regarding the direction for the Trusted Choice branding program. Earlier this month, the IIABA national Board of Directors approved two very significant initiatives that will usher in a new era for IIABA members, consumers and the insurance industry at large. First, after concluding that a strong national consumer brand is fundamental to the success of members, and completing a thorough review of how best to support members’ use of Trusted Choice® as the consumer brand, the decision was made to have all members support Trusted Choice via a reduced cost for participating in Trusted Choice, enabling them to focus their expenditures on living and promoting the brand. Effective March 6, 2010, the new annual fee for Trusted Choice will be $60 for agencies with less than 10 employees or $120 for agencies with 10 or more employees. These fees apply to member agencies new to Trusted Choice as well as those renewing their participation. Members will receive communications in the future from state associations about any changes to the amounts or timing of fees they will collect in order to implement the decision to have all members support the consumer brand. The transition period for implementing this new approach to Trusted Choice participation will be completed by Sept. 1, 2011. In the interim, agencies in New York with questions about the cost of participating in Trusted Choice should check with Jamie Deapo, as each state association can customize the roll-out to best meet its needs. All agencies new to participation in Trusted Choice will need to sign the Trusted Choice License Agreement, which includes the Pledge of Performance, as has always been the case. Go online to learn more about Trusted Choice and the tools and resources it offers. The second major decision that the IIABA Board of Directors made was to update the IIABA logo to be harmonious with key elements of the Trusted Choice logo. The new association logo still includes the words "Independent Insurance Agent," but they are embedded within the iconic eagle "swoosh" used by Trusted Choice. IIABA will use its updated logo for lobbying and industry communications, as it represents the association. However, member agencies participating in Trusted Choice will be encouraged to co-brand their agencies with the Trusted Choice logo, which was designed in response to attributes consumers indicated were important to them. The logo transition process includes filing for a trademark with the United States Patent & Trademark Office, and preparing the final graphic files with guidelines for use. As soon as those steps are completed, the new logo will be made available to members. In the nine years since Trusted Choice was launched, more than 10,000 agency locations chose to join the branding program, with 53 carriers providing significant support as company participants. With the strategic decision to have all members support Trusted Choice, there is an enhanced opportunity for state associations like IIABNY to target member education and convention programming to assist membership in "Living the Brand." Trusted Choice was developed and based on consumer research – which continues to be validated in subsequent research – that consumers value choice, customization and advocacy, the very attributes that independent insurance agents offer to their customers. The competitive environment that prompted the launch of Trusted Choice has increased, especially in the face of the large advertising budgets of direct writers and captive agency carriers. Trusted Choice provides professional marketing resources and the opportunity to leverage the collective efforts and scale of Trusted Choice members for Internet Search Engine Optimization. It also enables agencies to piggyback on the state association and national promotion of the Trusted Choice brand, through local, state and national advertising. In the coming month alone, Trusted Choice ads will run on the Fox Network and TNT, and will appear in Smart Money magazine. In addition, Trusted Choice will be a sponsor for American Public Radio’s "Marketplace" and will continue its aggressive Facebook advertising campaign. Advertising campaigns will continue throughout the year. | | | Top of page | | | Big ‘I’ Health Care Reform Update: Debate Moves Back to Senate after House Vote
The Senate is expected to conclude 20 hours of debate today or Thursday morning on a reconciliation bill to finalize health care reform legislation the House passed on Sunday. Republicans will object to provisions that they think violate rules that require all reconciliation legislation to deal with federal revenue. Using the parliamentarian (Alan Frumin) as his guide, Vice President Biden as Senate president will issue rulings on these points of order. If Republicans do not approve of Frumin's advice, they can try to override the ruling but that requires 60 votes, making it almost impossible for them to succeed. If Frumin sides with Republicans on a particular provision, it would be dropped from the reconciliation bill — unless Democrats themselves can find 60 votes to override the ruling. That would be unlikely since Republicans are staunchly opposed to the Democratic bill. Such a ruling would force the Senate to return the reconciliation measure to the House for another vote. During the debate, Republicans are allowed to offer an unlimited number of amendments, and those will be set aside for a voting marathon after the debate. The Republicans will attempt to force votes on tough amendments, thereby either requiring Senate Democrats to make changes to the bill (and sending it back to the House for another vote) or voting against a politically popular amendment. At this time, final votes in the Senate are expected on Friday or Saturday, though this timeline could change. IIABNY has posted online IIABA’s summary of the reform bill that would be enacted if the Democrats are successful. As the summary points out, it is noteworthy that a public option and federal Health Rating Authority are absent from the bill. | | | Top of page | | | More than $50,000 in InVEST Student Scholarship Money is Up for Grabs
Today's reality is that many parents and students are scrambling to find ways to pay for the ever rising costs of college tuition. InVEST can help. Each spring, InVEST awards thousands of dollars in scholarships to program graduates who plan to enter the insurance industry as their career. Whether they plan to enroll in a community college or university, or are going straight from the classroom to a career and need assistance with insurance exam fees, InVEST has scholarships ranging from $500 to $2,000 to assist with costs. However, there is a short window for applying. The deadline is April 9. Head to www.investprogram.org and click on scholarships for more information and the application. InVEST, a 501(c)(3) non profit, is dedicated to improving insurance literacy in students and attracting new talent to the industry. For more information on the InVEST program in New York, e-mail Dee Macheda or call her at (800) 962-7950, ext. 215. | | | Top of page | | | NYIA: Earthquakes Don’t Only Happen Out West
Earthquakes don’t just happen in California, Haiti and Chile, the New York Insurance Association recently pointed out. They can and have happened in the Empire State. According to the group’s news release, New York has a history of moderate-sized earthquakes, including a 5.1 magnitude quake near Plattsburgh in 2002, a slightly stronger one that hit Attica in 1929 and a 1944 quake that caused the modern-day equivalent of $24 million in damages to the Massena area. Even New York City had a 5.5 magnitude quake in 1884. NYIA noted that New York’s densely populated areas and large supply of older brick buildings make its risk of significant monetary damage from an earthquake quite high. Standard homeowners and business property insurance policies do not cover earthquake damage, which could include things like cracked foundations, broken furniture and windows, and damaged piping. The group encouraged property owners to discuss buying this coverage with their agents and brokers. | | | Top of page | | | Auto Plan Announces New Rules for Snowmobiles
Assigned risk auto insurers will be subject to new rules regarding snowmobiles starting in May, according to a bulletin from the New York Automobile Insurance Plan. Effective May 1, the new rules: provide that insurers will issue a policy for snowmobiles exclusively; clarify that insurers will issue a separate policy for snowmobiles providing coverage that meets the requirements of New York insurance regulations; provide that snowmobiles cannot be combined with private passenger non-fleet vehicles and must be submitted separately through the NYAIP’s Producer Application Submission System; and clarify that policy change requests for snowmobiles must be submitted separately from those for other vehicles.
| Top of page | | | ELANY Issues Reminder about E&S Export List, Affidavits & Declinations
The Excess Line Association of New York issued a list of reminders for retail and excess line brokers on procedures for placing risks in the excess line market. The association encouraged brokers to use the "export list," which is the list of coverages and classes for which a broker need not obtain declinations from admitted carriers. Examples include property coverage for vacant commercial property, liability coverage for construction risks and environmental impairment coverage for underground storage tanks. ELANY also reminded brokers that they must still file affidavits and related documents even when they place risks that are on the export list. The group reminded brokers that they must obtain three declinations from admitted carriers before placing a risk that is not on the export list with a non-admitted carrier. Either wholesale or retail brokers may obtain these declinations. Lastly, it reminded excess line brokers that only New York licensed retail brokers may be producing brokers for New York excess line risks. Excess line brokers are responsible for verifying the licensing status of producing brokers.
| Top of page | | | Insurance Dept. Opinions: Gap Waivers, BOCES-Owned Broker, No Cash, Please
Nine new advisory legal opinions have come from the New York Insurance Department’s Office of General Counsel in recent weeks. New York insurance law and regulations do not apply when a person who is a trust beneficiary wants to sell or assign his interest in the trust to a friend or relative and the trust owns a life insurance policy, regardless of whether the insured has a catastrophic or life-threatening health condition. An insurer may not issue a group health insurance policy to an employer that makes employees and their spouses ineligible for healthcare benefits, simply because other sources of healthcare coverage are available to them. A bank that holds a motor vehicle retail installment contract subject to the New York Personal Property Law must offer a gap waiver. The bank cannot require the borrower to waive the bank’s obligation to offer the gap waiver. A creditor or lessor who issues a gap waiver must waive the full amount of the debtor’s or lessee’s liability for the gap amount on the loan or lease, less the actual cash value of the property. New York Insurance Law permits a not-for-profit corporation to hold an insurance broker’s license. An insurance broker that is a wholly owned subsidiary of Boards of Cooperative Educational Services or BOCES may offer value-added services that directly relate to the insurance it provides to BOCES member school districts, if the broker provides the services in a fair and nondiscriminatory manner. An admitted insurer may issue a group property travel insurance policy to any railroad company, steamship company, carrier by air, public bus carrier, or other common carrier of passengers, where the policy insures its passengers. An admitted insurer also may issue a group property travel insurance policy to any other group where the Insurance Department has determined in a regulation that the members are engaged in a common enterprise or have an economic or social affinity or relationship, and issuance of the policy would not be contrary to the best interests of the public. An admitted insurer must return the gross unearned premium due under a financed insurance policy on a pro rata basis to the premium finance agency for the benefit of the insured, regardless of who cancels the policy. However, the insurer is entitled to a minimum earned premium of 10 percent of the gross premium or $60, whichever is greater. Although there may be some circumstances where an insurance producer should accept cash payment (where the insured would be adversely impacted by imminent cancellation, non-renewal or non-issuance of the policy), the producer should not do so if it would break the insurer’s rules; where the cash payment would circumvent anti-money laundering procedures; or where the acceptance of the cash payment would otherwise be imprudent.
The other opinion pertained to how the state Insurance Law applies to Health Maintenance Organizations. All OGC opinions issued since 2000 are available on the Insurance Department’s Web site. | | | Top of page | | | Using SEO, Other Online Tools Can Help Customers Find Your Agency on the Web
by Matthew Marko, marketing process manager for Progressive Insurance A quality Web site is a necessary first step to online success, since it is the agency’s Internet "hub" that Web users should eventually reach whether they get there from an Internet yellow pages listing, a search engine, a carrier site or a social media site like Facebook. But, it’s equally important that agencies constantly work to attract people to their sites. When someone types in a business name or a city name and the search term "insurance" into Google or Yahoo, some of the top listings that show up are "local listings." Local listings are like Internet phone books that show a company’s phone number, address (sometimes including a visible map of the area), background information and Web site. These listings are free, but businesses have to claim them and check them for accuracy and consistency. Progressive has run agent surveys indicating that fewer than one in five independent agencies have claimed free online local listings. Don’t miss this high-impact opportunity. To start, claim free local listings at Google, Yahoo! and Bing. To get started on Google, for example, type "Google local listing" into the Google search engine and select the Google Local Business Center. Make sure all agency information is consistent and accurate and that each listing links back to the agency’s Web site. Also, be sure to choose appropriate business categories and keywords. Take note of how the highest-ranking local competitors are listed and mirror that format. The agency also should claim free listings at localeze.com, infousa.com, yellowpages.com and superpages.com – the more listings, the better. Next, help people find the agency’s Web site when they perform searches on sites like Google and Yahoo for common insurance terms. That’s called "Search Engine Optimization" and it’s driven by two main factors: a Web site’s content and the other sites that link to it. Web users can control both. Use Google Analytics and Google Keywords to better understand the words people use to search for insurance in your local area. For example, an agency in Boca Raton, Fla., might discover that people search for "Boca Raton insurance" the most. Therefore, those three words need to be integrated into the agency’s home page copy. To boost SEO, create separate pages for each product line. Also, remember to write for humans. Tell people exactly what the agency offers and why it’s the best. Integrate search terms, but don’t repeat them. Work with a Web development partner, like IIABNY-endorsed AgentQuote, that can improve the agency’s SEO. Behind-the-scenes metatags, link-building strategies, keyword optimization and other tactics can improve search engine rankings. Ask for local references of any partners being considered. Next, link to carrier sites and ask carriers to link to the agency’s site. For example, all of Progressive’s agents can be linked to and from the company’s agent locator site. Finally, start a Facebook "fan" page and be sure to have a listing on LinkedIn. These social networking sites also feed search engines. The most successful agents on the Internet are those who invest ongoing time and money in their online presence. These agents respond quickly to online inquiries. They designate team members to keep content fresh and regularly check online listings for consistency. And, most of all, they measure their results with online analytics and by the business generated through Internet activities. Editor’s note: This article, which originally appeared in the March 18, 2010 issue of IIABA’s Insurance News & View, is the second in a series about optimizing the independent agency’s Web presence. | | | Top of page | | | Tips You Can Use: Purchase Proper Watercraft Coverage for Your New Boat
The following insurance tips are from the International Risk Management Institute’s Personal Lines Pilot newsletter. You may use them on your Web site or in client communications subject to IRMI’s license terms. Spring is often the time of year when boat lovers start to consider purchasing a sailboat or powerboat. Many people, however, are unaware of the significant loss exposures associated with boat ownership, and some people mistakenly believe that there is coverage available under their personal auto policy. Virtually all PAPs, though, do not provide any liability or physical damage coverage for boats. Other people may look to their homeowners policy for coverage. But most homeowners policies only cover losses arising from certain low-valued or low-powered boats. You should thus contact us before buying a boat to discuss the proper insurance protection for it. Consider the following tips to assist you in this process. If you purchase a boat valued over $1,500, you probably lack proper coverage under your homeowners policy for physical damage losses to the boat itself. A separate watercraft or boat-owners policy is necessary to cover the physical damage to boats over this value. If you are considering the purchase of a sailboat, inquire about its length. If the length is 26 feet or more, there is no liability coverage under your homeowners policy. For motorboats, there are severe horsepower restrictions under the homeowners policy for liability coverage. For example, only insureds who own or lease boats with outboard motors of 25 horsepower or less have liability coverage under most homeowners policies. Yet most powerboats have motors with horsepower far exceeding this amount. This liability coverage restriction also necessitates the purchase of separate watercraft insurance. Ask us about the types of boats you are considering. Some insurance companies, for example, decline to insure personal watercraft such as jet skis and wave runners, since some of these crafts can reach speeds of 60 mph. According to the U.S. Coast Guard, personal watercraft account for a disproportionately high number of accidents. Many insurance companies also refuse to cover houseboats, homemade or kit boats, competition bass boats, and speedboats. You may have to pay a steep premium through a specialty insurance company to insure these types of craft. Be wary of purchasing older watercraft. Many insurance companies reject boats over 15 or 20 years of age because they experience a higher loss frequency than newer boats. You may have trouble finding insurance coverage for older boats or end up paying an extremely high premium. If you do purchase an older boat, consider ordering a marine survey or inspection of it prior to the sale. Marine surveys point out deficiencies in watercraft that may cause you to reconsider the purchase or renegotiate its price. If you don't already have one, procure a personal umbrella policy in addition to a watercraft policy, particularly if you purchase a speedboat, a boat designed for water skiing or some other craft with a higher potential to cause damage or loss of life. Umbrella policies are relatively inexpensive, and since most forms do not have limitations with respect to watercraft, they will provide excess limits above the liability coverage in the watercraft policy. In addition, the watercraft liability limits should meet the underlying limits requirements of any applicable personal umbrella policy. Lastly, you should use the same insurance company that writes your homeowners and personal auto policies for your personal umbrella policy.
Get more personal lines insurance and risk management tips and ideas from IRMI. Copyright 2010
International Risk Management Institute, Inc.
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