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June 16, 2010
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| In this Issue
• Members Express Interest in What's Happening to NY's Self-Insured Trust Industry
• IIABA Calls on Congress to Enact Long-Term Extension of Flood Program
• Lost an Account Written with The Hartford to Payroll Co.? PMC PayGo is the Solution
• Survey: Commercial Lines Prices Remain Level for 5th Straight Quarter
• Former IIABNY Chair is Honored at Long Island Dinner
• Is it Annual Performance Review Time at Your Agency/Brokerage?
• Travelers Finds Opportunity for Independent Agents Serving Small Businesses
• Position Your Agency to Meet a Client's Total Risk Management Needs
| Hot Links Local Events | Education Calendar | E&O Reports | Capitol Reports | The Situation Room | Technology
Word on the Street Podcast | Ask Tim Podcast
| Members Express Interest in What's Happening to NY's Self-Insured Trust Industry
Many IIABNY members are again asking how they should respond to inquiries from their clients affected by insolvent group self-insured trusts or those trusts facing default. Here is what you should know. The renewed agent concern over the state’s self-insurance industry follows the release earlier this month of a report by the Task Force on Group Self-Insurance. In the report, the Task Force, appointed by Gov. David Paterson, is calling for legislation to terminate all group self-insured trusts in New York by Dec. 31. In the interim, IIABNY is advising members to review a checklist of questions to pose to a trust manager in evaluating the status of a group self-insured trust. Please note a member login is required to access the checklist, which is posted on IIABNY’s Web site. The association has also developed a set of principles to serve as guidelines to advance and evaluate legislative and regulatory proposals. The principles are outlined on IIABNY’s Web site. IIABNY members with additional questions should contact Tim Dodge, Jamie Deapo or attorney Jim Keidel. | | | Top of page | | | IIABA Calls on Congress to Enact Long-Term Extension of Flood Program
In its continuing efforts to advocate for an immediate reauthorization and long-term extension of the expired National Flood Insurance Program, IIABA sent a pointed letter on June 9 to the leadership of the U.S. Congress. The Big "I" urged "Congress to immediately pass a reauthorization of the NFIP retroactivity to June 1, 2010." The NFIP is currently in the midst of its third shutdown this year. Congress has enacted a series of short-term extenders but has failed to take action on a long-term measure. In its press release, IIABA said that lapses in the program cause confusion and leave many homeowners and small businesses unprotected during a delicate economic period and a dangerous time of the year. June 1 was the first day of the 2010 hurricane season, which weather forecasters and scientists estimate will be quite active. | | | Top of page | | | Lost an Account Written with The Hartford to Payroll Co.? PMC PayGo is the Solution
PMC Insurance, IIABNY’s newly endorsed workers’ compensation wholesaler, has recently added The Hartford to its stable of carriers that will participate in the PMC PayGo product when using E-chx Inc., the association’s newly endorsed payroll provider. The PMC PayGo product allows for your clients’ workers’ compensation premiums to be paid and automatically deducted based on actual payrolls. The Hartford joins Chartis, AmTrust and ACE in supporting the PMC PayGo solution. Some advantages of offering PMC PayGo to your clients include: Low minimum deposits No transaction fees for IIABNY members Cash flow management and control – Premiums are calculated and collected every pay period in relation to overall payroll activity Reduced audit exposure or "surprises" for clients or agents High customer retention and satisfaction Maintain ownership of the expiration (most payroll companies will pay the agents some type of referral fee but will not give the agent ownership of the account)
If you are interested in selling the PMC PayGo solution, follow these steps: Submit worker’s comp submission to PMC for a quote Decide how you want to use E-chx with your clients Your PMC comp quote will include an explanation of the PMC PayGo payment option and the forms your insured needs to begin the process (ACH authorization form and PMC PAYGO agreement) Sell the account It’s that simple!
So, if you recently lost a piece of workers’ compensation business to a competing payroll company, go back after that account with a new solution designed exclusively for IIABNY members! To learn more, contact PMC directly. Phone: (877) 762-2667
E-mail: IIABNY@pmcinsurance.com
Web: www.pmcinsurance.com
| Top of page | | | Survey: Commercial Lines Prices Remain Level for 5th Straight Quarter
A fragile global economy, excess capacity in virtually every line of commercial insurance and last year’s below-average catastrophic losses combined to keep commercial insurance prices flat during the first quarter of 2010, according to professional services company Towers Watson's most recent Commercial Lines Insurance Pricing Survey. The latest results mark the fifth consecutive quarter of little or no price increases after nearly five years of steady decreases. The survey compared prices charged on policies underwritten by 37 participating insurance companies — representing about 20 percent of the commercial insurance market (excluding state workers’ compensation funds) — during the first quarter of 2010 to the prices charged for the same coverage during the first quarter in 2009. This information is consistent with the pricing observed during all of 2009. Data for most lines indicate flat or small increases in prices, offset by price reductions in commercial property, directors and officers liability and employment practices liability. CLIPS findings indicate that accident-year-to-date 2010 loss ratios deteriorated 5 percent relative to year-to-date 2009. This deterioration — based on only three months of information and, therefore, preliminary — compares to an estimated deterioration of 4 percent for accident-year 2009 over 2008. Early estimates of claim costs through the first quarter point to somewhat higher inflation than in 2009, which contributes to the larger loss ratio deterioration. Aggregate price change indications showed little differentiation by account size, as all were nearly flat. | | | Top of page | | | Former IIABNY Chair is Honored at Long Island Dinner
Immediate Past IIABNY Chair of the Board Lane S. Rubin was honored June 9 by UJA-Federation of New York Long Island Insurance Division at the organization’s annual dinner. The acknowledgement, which was presented at the Temple Beth Sholom in Roslyn Heights, was in recognition of Rubin’s unwavering commitment to his community, according to UJA. Rubin, co-principal of The Excelsior Group Inc. in Valley Stream, was honored at the dinner along with attorney Donald D. Gabay, who leads the Insurance Practices division at the law firm of Stroock & Stroock & Lavan LLP. | | | Top of page | | | Is it Annual Performance Review Time at Your Agency/Brokerage?
Whether you are in the midst of conducting your annual employee performance reviews or are planning for them, employee developmental goals are always a top priority. The IIABNY Essentials for CSRs program is a unique, tailored approach for training customer service representatives. The program starts with a "Knowledge Check" (free for IIABNY members) of both business and technical skills to assess areas of strength and weakness. Based on the results, IIABNY's Education Counselor will create a customized training plan that matches skills needing further development with workshops near your office, in your office or online through Big "I" Virtual University. Twelve separate modules address verbal communication, errors and omissions loss prevention, customer management, business writing, negotiation skills and more. Through July 1, IIABNY has reduced the price of the on-demand Essentials for CSRs E-modules from $60 per module to $49 per module. Take advantage of the special, low price and benefit from a curriculum designed specifically for insurance agency CSRs. For more information, e-mail IIABNY Education Director Kathy Lawler. | | | Top of page | | | Travelers Finds Opportunity for Independent Agents Serving Small Businesses
Risk management ranks relatively low among the many priorities facing small business owners is the finding of a new survey conducted by Travelers. The survey, conducted recently at America's Small Business Summit 2010 in Washington, D.C., also found that nearly half of small businesses are operating without a Business Continuity Plan. "Small business ownership, while potentially very rewarding, also carries with it great risks," said Marc Schmittlein, President and Chief Executive Officer, Travelers Select Accounts. "Owners largely focus their efforts on growing their business and, too often, they overlook risks that could stunt that growth and/or even shut their doors for business permanently. The most successful owners are those that balance their pursuit of growth with a prudent approach to risk management." According to the survey, ranked in order from highest to lowest, business owners' most pressing priorities are: Marketing and sales Managing cash flow Attracting financing Attracting and retaining employees Identifying and managing insurable risks Compliance with federal and state regulations Protecting against litigation and lawsuits
In addition to the relatively low priority placed on risk management, 44 percent of small businesses are operating without a Business Continuity Plan and only 36 percent have ever spoken with an insurance agent about developing one, despite data from the American Red Cross that indicates that as many as 40 percent of small businesses do not reopen after a disaster. The survey found that business owners are confident that their businesses are protected against insurable risks that can result in significant financial losses or even cause them to go out of business altogether. In fact, only six percent of business owners are not at all confident that their business is adequately protected; 53 percent are somewhat confident and 41 percent consider themselves extremely confident. This confidence comes despite the fact that 39 percent of business owners are unable to make the time necessary to effectively identify and manage operational risks, given competing priorities, according to Travelers. Full results of the small business owner survey, Risk Management on Main Street, are available online. | | | Top of page | | | Position Your Agency to Meet a Client's Total Risk Management Needs
by Dave Evans, CFP The whole picture: It’s an important advantage independent agencies have that they often overlook. Agents can provide a holistic approach to a person or business’ total insurance and risk management needs. Typically, many life and health insurance producers work for small agencies that specialize in those areas or for a large career agency that represents one of the large traditional life insurance companies. As consumers’ lives become more hectic, they want a one-stop solution for their various financial and insurance needs. Independent agencies—if they are structured to take advantage of the opportunity—can solve this need. For example, most life insurance agents and financial planners do not address the total risk management needs of their clients. If the idea behind selling a long-term care insurance policy is to help a client protect assets from the potentially catastrophic cost of long-term care, isn’t it equally important to take the same approach for other potential liabilities? A tragic example of the types of exposures that Americans face is illustrated by the recent news that a Connecticut teenager and her mother have agreed to pay $1.1 million to the family of a toddler who drowned while the girl was babysitting. The New Haven Register reported that Cheshire Probate Judge Raymond Voelker approved the settlement between the Veenhuis family and Michelle and Krista Repko. Authorities say Krista Repko was babysitting three-year-old Cole Veenhuis and his twin sister when Cole drowned in the family’s pool on May 2. No criminal charges were filed, but the Veenhuis family pursued the case in probate court as part of Cole’s estate. They included Repko’s mother, Michelle, in their claim because she allegedly recommended her daughter to babysit. In addition to the typical types of liabilities that people worry about, such as slips and falls on their property and motor vehicle accidents, this event demonstrates that there are potential liabilities most people wouldn’t even consider, such as recommending a daughter to babysit. An independent insurance agency that truly takes a 360 degree view of a client’s risk exposure— both business and personal—can help them address the exposures they face, in addition to saving for retirement, in a comprehensive way. This approach affords the agency the latitude to demonstrate the collective expertise of the agency in developing cost-effective solutions for their clients. And, since clients have the comfort of knowing that they have an advocate, they are much less likely to "do it themselves" by shopping based solely on price. Does your agency take a true holistic approach to meeting customer needs or do your various producers sell products in an uncoordinated fashion? Take the time and effort to explain your agency’s capabilities to your clientele so that they truly understand what differentiates your agency from direct writers and captive agencies. Editor’s Note: Dave Evans is a certified financial planner and an Independent Agent Life-Health contributing editor. His column above originally appeared in the June 3, 2010 issue of IIABA’s Insurance News & Views. | | | Top of page | | |
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