Independent Agent March 2018 by Independent Insurance Agents of Wisconsin

wisconsin

INDEPENDENT AGENT MARCH 2018

As we Empower Independent Agents, Transform the Insurance Industry, and Revolutionize Your Agency!

WELCOME TO THE FUTURE OF

THE INDEPENDENT INSURANCE AGENTS OF WISCONSIN!

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wisconsin

INDEPENDENT AGENT MARCH 2018

InsurCon2018. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 IIAW Member Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Open Door Policy We’re Blowing Up the Traditional Insurance Association Model . . . . . . . . . . . . . . . . . 7 Employee Benefits Trump Administration works to Give Relief. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Agency Management Producer Equity and Its Effect on Agency Value. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 Why you Should Quit Working For a Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Technology How will Blockchain Disrupt Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Agency Operations LinkedIn Profinder: Another Way to Find Quality Prospects . . . . . . . . . . . . . . . . . . . 14 Commentary from Counsel Coverage Lessons From the 18th at Greenbrier. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Government Affairs Governor Walker Proposes End of Session Health Care Plan. . . . . . . . . . . . . . . . . . . 19 Virtual University: Ask an Expert. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 Errors and Omissions Potential E&O Claim: Should I report It to my E&O Carrier? . . . . . . . . . . . . . . . . . . . 24 Emerging Leaders Spotlight Dustin Hemenstine, American Risk Management Resources Network. . . . . . . . . . . 25 Risky Business Protecting Your Agency Starts Today. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Members in the News. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30 IIAW Employee Spotlight. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Food for Thought. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 Independent Insurance Agents of Wisconsin 725 John Nolen Drive, Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 ■ Fax: (608) 256-0170 ■ Web: www.iiaw.com Executive Vice President - Matt Banaszynski 2017-2018 Executive Committee President............................................................ Lise Meyer Meyer Insurance - P.O. Box 633, Sauk City, WI 53583 President-Elect.................................................... Jason Bott Robertson-Ryan & Associates - 330 East Kilbourn Ave., Milwaukee, WI 53202 Secretary-Treasurer......................................Chris Costakis Avid Risk Solutions- 2501 Parmenter Street, Ste 200A Middleton, WI 53562 Chairman of the Board................................. Matt Weimer Diversified Insurance Solutions - 100 North Corporate Dr., #100, Brookfield, WI 53045 State National Director ................................Steve Leitch Leitch Insurance - P.O. Box 85, River Falls, WI 54022 2017-2018 Board of Directors Mike Ansay, Ansay & Associates 101 East Grand Ave. #11, Port Washington, WI 53704 Cindy Burns, Burns Insurance 500 South Central Ave., Marshfield, WI 54449 Marc Petersen, American Advantage-Petersen Group 15171 W. National Ave., New Berlin, WI 53151 Jack Riesch, R&R Insurance Services P.O. Box 1610, Waukesha, WI 53187-1610 Chad Tisonik, HNI 16805 W Cleveland Ave, New Berlin, WI 53151 Pam Utpadel, Universal Insurance Advisors 100 West Lawrence St. Suite 313, Appleton, WI 54911 Ryan Waite, Neckerman Insurance Services 6200 Mineral Point Road Madison, Wisconsin 53705 Darrel Zaleski, Spectrum Insurance Group 4233 Southtowne Drive, Eau Claire, WI 54701

WISCONSIN INDEPENDENT AGENT

2017-2018 Committee Chairs Agency Services ............................................Kim Dandrea M3 Insurance - N19 W24200 Riverwood Dr. Waukesha, WI 53188 Automation/Technology ...............Cathleen Christensen Hierl Insurance - P.O. Box 949, Fond du Lac, WI 54936

On The Cover… At the IIAW, we are redefining our business model and value proposition to ensure we are aligned with the needs of our agency members and deliver a return on their investment. If you are already a member, engage with us as we seek to empower independent agents, transform the insurance industry and revolutionize your agency. If you’re not a member, what are you waiting for? Join Us and align with a strategic business partner who offers you the tools and resources necessary to grow your business and adapt to rapidly changing marketplace.

> A DVERTISERS & INFORMATION AAA Wisconsin................................................. 34 ACUITY............................................................ 23 AM Trust............................................................ 8 Arlington Roe...................................................18 Badger Mutual................................................. 28

Emerging Leaders ..........................................Ryan Waite Neckerman Insurance Services - 6200 Mineral Point Road Madison, WI 53705

Berkshire Hathaway/Guard............................. 33

Employee Benefits.......................................... Mike Farrell David Insurance - 1300 South Green Bay Rd Racine, WI 53406

IIAW Pre-licensing Classes.............................. 20

Government Affairs .......................................Jeff Thiel R&R Insurance Services - P.O. Box 161 Waukesha, WI 53187

JM Wilson........................................................ 32

Carrier Relations ......................................... Kevin Murray Johnson Insurance Services - 525 Junction Road, Madison, WI 53717

Risk Management Services............................. 26

Marketing/Membership Development....Jamie Durocher Arlington Roe- 2 Carlson Parkway N., Suite 175 Plymouth, MN 55447

Risk Placement Services..................Inside Cover

Technical...............................................Timothy Kakuska Robertson-Ryan & Associates - P.O. Box 547 La Crosse, WI 54602

Erickson Larsen............................................... 25 IIAW CE............................................................. 21 ProtectYourAgency.com.....................Back Cover Robertson Ryan & Associates.......................... 28 Save the Date: Leadership Conference.............. 8 SECURA............................................................ 16 The IMT Group.................................................. 15 West Bend....................................................... 35 Western National............................................. 29 MARCH 2018 | 3

2018

REGISTRATION INFORMATION Your annual convention registration options are below. Option A F ull Registration, both Tuesday and Wednesday Early bird pricing: Member: $209 Non-Members: $249 After February 28: Member: $249 Non-Members: $299 Option B Full Registration, Spouse $149 Option C T uesday Only Member: $169 Non-Members: $209 Option D W ednesday Only Member: $189 Non-Members: $229 Group reservations of 6 or more receive a 10% discount. This applies to full registrations only. For complete descriptions, please go to IIAWConvention.com. Cancellations received by April 6 will be refunded less a $20 processing fee. No refunds will be given for cancellations received after April 6. Attire is business casual for all convention events. Questions? Please Please call the IIAW at (800) 362-7441 or (608) 256-4429. Refer to IIAWConvention.com and our e-brochure for the latest convention information and expanded details of each session.

HOTEL INFORMATION All convention events take place at the Madison Marriott West. 1313 John Q Hammons Dr. Middleton, WI 53562 Phone: (608) 831-2000. Rooms in our reserved room block are available at the price of $145/night for May 8 & 9. The last date to receive the room block, discounted rate is April 16th, 2018. Additional rooms for May 8 & 9 can be reserved at the Comfort Suites. 1253 John Q. Hammons Dr., Madison, WI, 53717 Phone: (520) 257-3116. Please indicate that you are attending the IIAW Annual Convention to ensure the group rate. The hotel reservation deadline is April 15, 2018.

REDEFINING THE CUSTOMER EXPERIENCE

FEATURED SPEAKERS BLAKE MORGAN is a Customer Experience Futurist. Her first book is “More is More: How The Best Companies Work Harder And Go Farther To Create Knock Your Socks Off Customer Experiences.” Blake is adjunct faculty at the Rutgers executive education MBA program. Blake contributes to Forbes, the Harvard Business Review and the American Marketing Association. She is the host of The Modern Customer Podcast and a weekly customer experience video series on YouTube. She has worked with Intel, Verizon Wireless, and many more. She lives in the Bay Area with her husband, daughter and their two Yorkie rescues. Her work has been endorsed by the CEO of 1-800 Flowers Chris McCann, the CEO of ACE Hardware John Venhuizen, Claire Burns, Chief Customer Officer, MetLife, Darren Pleasance, Managing Director, Global Customer Acquisitions, Google, Andreas von der Heydt, Director of Kindle, Amazon, James Staten, Chief Strategist, Microsoft Cloud, Zoher Karu, Chief Data Officer, ebay, Pete Blackshaw, Global Head of Digital and Social Media, Nestle, Vala Afshar, Chief Digital Evangelist, Salesforce, and Nova Spivack, Entrepreneur, Investor, Grandson of Peter Drucker. In addition Blake is the host of The Modern Customer Podcast where she’s interviewed the CEO of AT&T Mobility, the CMO of Xerox, and the President of FedEx Express Canada. She is also the host of a weekly customer experience video series on YouTube called Blake’s Take.

DOUG LIPP Build the Culture. Live the Culture. Differentiate! Candid. Passionate. Relevant. Doug Lipp is on a crusade to help organizations strengthen their corporate culture, boost business performance, and unapologetically, have fun while doing it. Doug is a distinguished international consultant, eight-time author, and former head of training at the legendary Disney University. Drawing on his 30 plus years of combined experience at Disney and in private practice, Doug inspires and challenges hundreds of organizations worldwide. In presentations, he shares how Disney overcame spectacular strategic challenges to unleash one of the most improbable success stories in corporate history. Through riveting examples and powerful, relevant stories about innovation, service, value and leadership, Doug pulls back the curtain and reveals the behaviors, tools and attitudes that are representative of cultural excellence at Disney and other great institutions. He also discusses common organizational traps that undermine companies and impede their ability to build a thriving and sustainable culture. Consistently ranked as one of the best presenters every time he speaks, Doug painstakingly researches and customizes each of his presentations and workshops.

MARCUS SHERIDAN Called a “web marketing guru” by the New York Times, the story of how Marcus was able to save his swimming pool company, River Pools, from the economic crash of 2008 has been featured in multiple books, publications, and university case studies around the world – and is also the inspiration for his latest book, “They Ask, You Answer,” which was dubbed the #1 marketing book to read in 2017 by Mashable and one of “11 Marketing Books Every CMO Should Read” by Forbes. Known for his incredibly unique ability to excite, engage and motivate live audience, Sheridan has become a highly sought-after international keynote speaker and consultant in the digital sales and marketing space and is, according to Forbes, 1 of 20 “Speakers You Don’t Want to Miss.” As founder and president of The Sales Lion, he also works with hundreds of businesses, helping them to become the most trusted voice in their industry while navigating the ultra-fast rate of change occurring within consumers and buyers today.

TUESDAY, May 8 9:30 AM – 11:30 AM

IIAW BOARD MEETING

11:30 AM

CONVENTION REGISTRATION OPENS

12:00 PM12:50 PM

CE SESSION Wisconsin vs. Federal Government: Responsibility in health insurance reform. (1 CE) Speaker: Deputy Insurance Commissioner J.P. Wieske

12:15 PM – 2:00 PM

INNOVATION SESSION What does Omni-channel Servicing mean to the Independent Agent Speaker: Auto-Technology Committee

EXHIBITOR INFORMATION

12:15 PM – 2:00 PM

CE SESSION E&O Mock Trial: Not Your Trial…Yet (2 CE) Speakers: Mallory Cornell, IIAW & Josh Johanningmeier, Godfrey & Kahn *Does not qualify for E&O Loss Control Credit*

1:00 PM2:00 PM

CE SESSION Federal Health Care Reform, Helping Your Customers through the ACA (1 CE) Speaker: David Grunke

Exhibitor registration fees are as follows: Early bird pricing: M ember registration: $850 Non-member: $950 After Feb. 28: Member registration: $900 Non-member: $1000 For complete details and to register as an exhibitor, please visit IIAWConvention.com. Exhibitor fees include 2 Registrations to the entire Convention. As a friendly reminder, please conduct your agent entertaining during the designated company hospitality hours from 6:00pm- 9:00pm on May 9, 2018.

2:00 PM – 2:15 PM

Networking Break

2:15 PM – 4:00 PM

CE SESSION Data Breach : How to Hack it in Cyber & Privacy Liability (2 CE) Speaker: Michael Schultz, Burns & Wilcox

2:15 PM – 5:00 PM

CE SESSION The Road to Ethics (3 CE) Speaker: Brian Sorge, WPS Insurance

4:10 PM – 5:00 PM

CE Session New Certificates of Insurance Law: What it means to your Agency and Clients (1 CE) Speaker: Matt Banaszynski, IIAW

5:15 PM – 5:45 PM

Business Meeting All attendees encouraged to attend

5:45 PM – 6:30 PM

Networking Break

6:30 PM – 9:00 PM

AWARDS RECEPTION AND ENTERTAINMENT Entertainment by The Ancora String Quartet Heavy hors d’oeuvres and cocktails. (All attendees encouraged to attend)

2018

WEDNESDAY, May 9 7:15 AM

CONVENTION REGISTRATION OPENS Breakfast Buffet

8:00 AM – 8:50 AM

CE SESSION Employment Agreements for an Independent Insurance Agency (1 CE) Speaker: Josh Johanningmeier, Godfrey & Kahn

8:00 AM – 8:50 AM

CE SESSION How Agencies and Carriers can stay off of OCI’s Radar (1 CE) Speaker: Cari Lee, WI OCI

8:00 AM – 8:50 AM

INNOVATION SESSION- Boost Your Agency’s Revenue and Value Proposition Speaker: Employee Benefit Carries and Vendors. Moderated by Jason Sczepaniak. Speakers will have 2 to 3 minutes to share how their company is empowering agents/brokers to remain relevant and increase revenue. The first 30 minutes will be lightning round speeches followed by a 20 minute Q&A session with the audience.

9:00 AM – 9:15 AM

WELCOME REMARKS IIAW President, Lise Meyer Kobussen & IIAW CEO, Matt Banaszynski

9:15 AM 10:00 AM

A Simplified Approach to Shaping Customer Experience with Technology Speaker: Blake Morgan When you think of customer experience technology does your mind start spinning? There’s a lot of technology out there, so how do you decipher what will actually help your company? Most of us are familiar with a traditional CRM, but what critical components of your customer program do you need beyond that? There’s a lot of buzzwords being thrown around: digital transformation, machine learning, automation, artificial intelligence, IoT…it’s all so overwhelming! In this workshop we simplify what an ideal technology stack looks like and how you can get it without draining your company of all resources. In this session we’ll give you a completely unbiased view of what the critical components of a customer experience technology program should be. You will learn: a Examples of technology that delivers great cx a Taking the scary out of technology a Making the business case for technology within your company

10:00 AM 10:15 AM

Networking Break

10:15 AM – 11:00 AM

The Magic of Exceptional Customer Service Speaker: Doug Lipp How has Disney managed to keep its employees and customers so fiercely devoted to the brand? How has it managed to continually top the charts as one of the world’s most loved brands? How can you learn from its practices to catapult your organization’s service strategies to even higher levels? Learn the four components that are at the heart of Disney University: Innovate. Support. Educate. Entertain. Discover how legendary service is a delicate balance between art and science. “Doing the ordinary in an extraordinary fashion” isn’t rocket science; customer service excellence must be ingrained throughout your culture. In this ever-changing economy, more companies than ever are realizing the strategic importance of transforming their service culture to differentiate themselves from competitors.

11:00 AM – 11:45 AM

Leadership and Service Magic- Innovation, Transformation and Growth Workshop Speaker: Doug Lipp Leaders build the culture, live the culture, and reinforce the culture every single day. Leadership has always set the tone within an organization, but today there’s growing consensus that a winning, sustainable culture is only achieved when it is ‘actively’ steeped throughout the entire organization. In this workshop Doug will help you Innovate, transform and grow your agency!

11:45 PM – 12:45 PM

LUNCH BUFFET & NETWORKING BREAK

1:00 PM – 1:45 PM

The Digital Seller: How to Make the Internet Your Best Friend and Dramatically Increase Sales Success Speaker: Marcus Sheridan We’ve all heard about the “digital consumer,” but what about the “digital seller?” Studies have shown that over 70% of the buying decision today is made BEFORE someone actually talks to a sales person. This shift has had a dramatic impact on Sales Teams around the globe, and few have managed to properly adjust to this change in where the sales cycle actually starts. In this talk, Marcus Sheridan will explain exactly what Sales Teams must do in order to embrace the new way consumers buy and ultimately become “digital sellers” in the process.

2:00 PM – 3:00 PM

CEO PANEL (1 CE) Featuring Progressive, West Bend Mutual Insurance & Burns & Wilcox

3:15 PM – 5:45 PM

CONVENTION SHOWCASE & NETWORKING $ 1200 Cash Give-a-way Sponsored by The IMT Group

6:00 PM – 9:00 PM

COMPANY HOSPITALITY & ENTERTAINING

9:00 PM – 12:00 AM

INSURCON BASH Whether you are a beer drinker, a wine connoisseur, or like to mix things up, we have something for everyone. Visit our beer tasting, wine tasting, and mixologist station or just grab your favorite drink at the bar. Then dance the night away with A Personal Touch DJ Service before the big Money Balloon Drop at Midnight!

Visit IIAWConvention.com for complete details

IIAW Agency Member Benefits Take Advantage of Everything your Membership in the IIAW offers!

For more, go to IIAWSolutions.com

Membership in Wisconsin's Premier Association for Independent Insurance Agents entitles you to exclusive products and consultative services! The Independent Insurance Agents of Wisconsin and the Independent Insurance Agents and Brokers of America provides the tools, resources and knowledge to help you serve your clients effectively and grow your agency. We are your go to source for information for your business. We do the work so you don't have to. Our Value is Finding Your Solution. Just pick up the phone and call!

Business Solutions

! ! ! ! !

Consultative Services: Risk Management & Technology InVEST Program: Classroom educational program Best Practices Big “I” Retirement Services for your Agency Big “I” Employee Benefits Program

Insurance Products and Services

! Swiss Re Errors & Omissions Insurance Program ! Beazley Data Breach Insurance Program ! Philadelphia EPLI Program

Risk Management Services

! ! ! ! ! ! ! !

Government, Regulatory, and Legal Affairs

! Award winning Year-Round Capitol Hill (WI &DC) Government Affairs Representation ! Day on the Hill Events ! Legal Advocacy and advice ! Special Legislative and Regulatory Publications, Seminars and Webinars ! Voice in the Media (Public Relations)

! ! ! ! !

Brand Builder

! Trusted Choice Co-Brand ! TrustedChoice.com ! Advertising on Fox News, CNBC, CNN, Fox Business. As well as plethora of digital advertising.

! Providing Support to: Make-A-Wish, USO-Wisconsin, MACC Fund, SFM Foundation, Trusted Choice Disaster Relief Fund, Independent Insurance Agents of Western and Northwestern Wisconsin.

Networking Events

! Annual Convention (InsurCon) ! Leadership Conference ! Fall Planning Strategy Session

! Day on the Hill ! Emerging Leaders Networking events ! Committee Meetings

Professional Development & Education

! ! ! !

Errors and Omissions Loss Control Seminar Risk Management Consulting E&O Happens Website Claims Prevention Resources Operational Improvement Review Risk Analysis Agency Health Check Mergers and Acquisition, Personal Lines and Commercial Lines Checklists

Producer, CSR New Hire Training Emerging Leaders Development Series Online and Classroom CE Free Relevant Seminars

! ! ! ! !

Big “I” National Flood Insurance Program Big “I” Markets: Insurance market access program Virtual Risk Consultant Agency Universe and Mark Share Study Technology Solutions

! Life Insurance and Short & Long-Term Disability Insurance ! Health Insurance (Coming soon) ! More

! ! ! ! ! ! ! ! !

Free Legal advice pertaining to potential claims Free legal documents and disclaimers Website and Procedures Manual Review A practical guide to E&O Risk Management Online Compliance Materials Training and Awareness Programs Claims Assistance and Legal Loss Assistance Hotline Strategic Planning and SWOT Analysis Sample Agency Procedures Manual

IIAW Legal Briefs and Guidance IIABA Memoranda and FAQs Legal Services Hotline Agency-Insurance Company Contract Review State Political Giving Program- Insuring Wisconsin Conduit Fund and PAC ! Federal Political Giving Program- InsurPAC

! ! ! !

Best Practices Webinar Series National Conferences Pre-Licensing Designations, and much more

RECEIVE THE FOLLOWING PUBLICATIONS: IIAW & IIABA INDEPENDENT AGENT MAGAZINE, WEEKLY E-NEWSLETTER, IIABA INSURANCE NEWS & VIEWS, IIABA TWO FOR TUESDAY, IIABA VUPOINT.

OPEN DOOR POLICY

WE’RE BLOWING UP THE TRADITIONAL INSURANCE ASSOCIATION MODEL George Zimmer, Founder and Executive Chairman of Men’s Wearhouse sold suits. Lots and lots of suits. He’s most famous for his commercials and catchy slogan, “You’re gonna like the way you look. I guarantee it.” This famous slogan not only sold millions of suits for Men’s Wearhouse, but more importantly instilled confidence into millions of men. At the Independent Insurance Agents of Wisconsin, we sell many things from Membership, Errors and Omissions Insurance and Insurance Education to Consulting and Risk Management services, but the thing we want most of all is to instill success. The insurance industry and the independent agency channel are rapidly evolving, and the IIAW must transform with it. We must constantly evaluate our value proposition to ensure its relevant to aiding in your success. That’s why we have decided to blow up the traditional insurance trade association model. IIAW’s strategic plan is to continue to

focus and improve on our core competencies of insurance products, networking events, education and advocacy while offering new services that agencies would find helpful and valuable. We have identified three areas of focus: Agency Risk Management, Agency Development & Strategic Planning, and Agency Technology. As an example, we have traditionally sold our members errors and omissions, data breach, employment practices liability insurance and more. We now offer an industry leading program with competitive pricing and comprehensive coverage combined with supporting risk management and mitigation strategies coupled with education and technology. As your strategic business partner, we are not going to just sell you a policy that reacts to a claim, we are going to work with you to prevent a claim from ever happening. This is just one way we plan to empower your agency with the knowledge and tools necessary to be proactive instead of reactive. Over the last several years, the IIAW and IIABA has been hard at work evaluating and re-working our products and services. Our objective is to help agencies build a sustainable business model focused on growth and to help ‘future proof’ your business so you will continue to be successful despite market and technological challenges. We’ll soon be launching new initiatives to help your agency deploy an omni-channel service and sales model by integrating technology solutions that empower the independent agent like never before. We’re a 119-year-old insurance trade association acting and thinking like a new tech start-up, but with a whole lot of historical perspective and experience. It’s not the product or the service we sell that we are most proud of, it’s your success. Join us and engage with us as we empower independent agents, transform the insurance industry, and revolutionize your agency! If you do, “you’re gonna like the way you look. I guarantee it”! Welcome to the future of the Independent Insurance Agents of Wisconsin!

>M att Banaszynski is the CEO of the Independent Insurance Agents of Wisconsin. Contact him at matt@iiaw.com. WISCONSIN INDEPENDENT AGENT

MARCH 2018 | 7

DISCOVER WHAT WE COVER.

We provide

BOP CybermoreLiability than Property General Liability Workersâ&#x20AC;&#x2122; Comp

Commercial Auto

Employment Practices Liability Insurance

Inland Marine Commercial Package monoline coverage.

Get to know AmTrust. Discover what we cover at d20.amtrustinsurance.com AmTrust is AmTrust Financial Services, Inc., located at 59 Maiden Lane, New York, NY 10038. Coverages are provided by its property and casualty insurance company affiliates. In TX, coverage is provided by AmTrust Insurance Company of Kansas, Inc.; AmTrust International Underwriters Designated Activity Company; Associated Industries Insurance Company, Inc.; First Nonprofit Insurance Company; Milwaukee Casualty Insurance Company; Republic Underwriters Insurance Company; Republic-Vanguard Insurance Company; Security National Insurance Company; Southern County Mutual Insurance Company; Southern Insurance Company; Technology Insurance Company, Inc.; or Wesco Insurance Company. In WA, coverage is provided by AmTrust Insurance Company of Kansas, Inc.; AmTrust International Underwriters Designated Activity Company; Associated Industries Insurance Company, Inc.; Developers Surety and Indemnity Company; Milwaukee Casualty Insurance Company; Security National Insurance Company; or Wesco Insurance Company. Consult the applicable policy for specific terms, conditions, limits and exclusions to coverage.

EMPLOYEE BENEFITS

TRUMP ADMINISTRATION WORKS TO GIVE RELIEF TO AMERICANS FACING HIGH PREMIUMS, FEWER CHOICES Proposed rule to allow short-term, limited-duration insurance for longer periods providing increased choice at a lower cost In direct response to President Trump’s October 2017 Executive Order, the Departments of Health and Human Services (HHS), Labor, and the Treasury (the Departments) issued a proposed rule today that is intended to increase competition, choice, and access to lowercost healthcare options for Americans. The rule proposes to expand the availability of short-term, limited-duration health insurance by allowing consumers to buy plans providing coverage for any period of less than 12 months, rather than the current maximum period of less than three months. The proposed rule, if finalized, will provide additional options to Americans who cannot afford to pay the costs of soaring healthcare premiums or do not have access to healthcare choices that meet their needs under current law. “Americans need more choices in health insurance so they can find coverage that meets their needs,” said Health and Human Services Secretary Alex Azar. “The status quo is failing too many Americans who face skyrocketing costs and fewer and fewer choices. The Trump Administration is taking action so individuals and families have access to quality, affordable healthcare that works for them.” Short-term, limited-duration insurance, which is not required to comply with federal requirements for individual health insurance coverage, is designed to provide temporary coverage for individuals transitioning between healthcare policies, such as an individual in between jobs, or a student taking a semester off from school. Access to these plans has become increasingly important as premiums have more than doubled - PDF between 2013 and 2017 in health plans on the Federal Health Insurance Exchange. And half of the counties in America have only one insurance carrier to choose from. “Americans who find themselves between jobs or simply can’t afford coverage because prices are too high will be helped by President Trump’s Healthcare for All Executive Order,” said Centers for Medicare WISCONSIN INDEPENDENT AGENT

& Medicaid Services (CMS) Administrator Seema Verma. “In a market that is experiencing double-digit rate increases, allowing short-term, limited-duration insurance to cover longer periods gives Americans options and could be the difference between someone getting coverage or going without coverage at all.” This announcement builds on the President’s October 2017 Executive Order 13813, “Promoting Healthcare Choice and Competition Across the United States,” which directs the Departments to consider proposing regulations or revising guidance to expand the availability of short-term, limited-duration insurance and allow it to cover longer periods. The Departments published a final rule in 2016, which restricted short-term, limited-duration insurance to less than three months. Key stakeholders, including state regulators, have expressed concerns that the current limit could cause harm to some consumers, limit consumer options, and have little positive impact on the risk pools in the long run. Today’s proposed rule would address these concerns by reverting to the previous definition of short-term, limited-duration insurance which permits coverage for nearly a full 12 months. A fact sheet on today’s proposed rule can be found here: https://www. cms.gov/Newsroom/MediaReleaseDatabase/Fact-sheets/2018-Factsheets-items/2018-02-20.html. The link to the proposed rule can be found here: https://www. federalregister.gov/documents/2018/02/21/2018-03208/short-termlimited-duration-insurance.

> U.S. Department of Health and Human Services

MARCH 2018 | 9

AGENCY MANAGEMENT

PRODUCER EQUITY AND ITS EFFECT ON AGENCY VALUE Many agents use ‘creative’ equity deals to compensate producers beyond commission rates. Few agents think forward sufficiently to ascertain the immediate and long term risks associated with these equity arrangements. The most common equity practice is the granting of immediate or vested

If they are not successful, why would you give up the only thing

equity in a producer’s book of business. The feeling of the agency owner

you’re working for – the growth of your asset value? Keep any equity

is of course, that the agency will both incent the producer to grow and

arrangements as an incentive to grow to a relatively important part of

enjoy the remaining equity in a book of business that they would not

your book of business.

have had at all were it not for the producer’s efforts. Some agents use that equity to create a Non-Compete or Non-Piracy Agreement in which

2. An equity agreement usually lies on top of a standard agreement

either the agency or the producer would have certain rights to purchase

for a portion of the commission that the producer is to earn for his

or sell the balance of the book of business owned by each of them.

daily efforts. If you offer a competitive commission arrangement you

This “seems” to be an equitable arrangement for a new producer to

must remember that the rest of the agencies in your area offer this

join an agency but it is shortsighted on the part of the agency since more

commission schedule contemplating the competitive pressures of the

things can go wrong than right with such an equity agreement.

agency business in your area. So what they are offering for producers to

Imagine what happens if you vest 50% of a producer’s book of

help build the book of business owned by the agency, you are offering

business in the producer and he fails. You will have to pay that producer

AND yielding a part of the value of that book of business, thereby

additional funds for any revenue generated (for which you have already

lowering the value of your agency. And the larger the producer’s book

paid him when he generated the production) when that producer leaves

of business becomes, the more value you are relinquishing – while the

and/or risk him buying out the other 50% or trying to take the accounts.

agency (not the producer) still must pay ALL OF THE EXPENSES related

Now imagine what happens if the producer succeeds and already owns

to the service and administration of that book of business.

50% of a substantial book of business that he can leave and use to buy

If you try to offer a lower commission using the sponsorship of

into another agency (or negotiate additional compensation) for half the

expenses and the equity position you will probably not gain production

value of that book of business. If you don’t give the producer the option

staff since they traditionally respond to highest value compensation

to buy the book of business and choose instead, to require the agency

before all else.

to buy the vested interest back at departure of the producer, then you

If you end up offering a standard compensation schedule in your area –

will BOTH see a productive producer leave AND have to pay him to do

more on New Business than on Renewals or more on Growth of book of

so. THERE ARE ALTERNATIVES THAT WILL INCENT A PRODUCER TO

business than on Base, you are probably breaking even on the producer’s

GROW YOUR BOOK OF BUSINESS.

efforts (or losing money considering all of your costs) in the first year and

Here are a few other reasons that equity should not be considered for a

earning agency profits on longevity of accounts. Providing equity as an

producer in the producer’s generated book of business:

additional benefit in the producer’s book of business is the gift that keeps on giving – lowering your agency value accordingly and providing the

First, how do you know the producer will be successful? You may

producer an annuity or retirement benefit when he leaves the agency.

end up with a producer several years down the line who has generated $50,000 or $100,000 of total commission and you have granted him

3. When a producer is granted equity in his/her book of business

some form of equity that obligates you to repurchase a small amount

instead of some form other form of compensation arrangement it is

of income (again) after paying the producer to produce that income

natural for the producer to become more enveloped in the success

initially. Any form of equity should be pegged to the attainment of a

of that portion of the book of business that accrues value to the

“significant” amount of revenue for the agency. What’s “significant”?

producer than in the rest of the agency’s book of business. Most

That term should be reserved to an amount of income that actually

agents claim that would ‘never happen’ to their dedicated young

increases the agency’s total value. Consider that mostProducers that

producer – until it happens – then all hell breaks loose.

generate less than $100,000 are likely COSTING you money, not earning you profit or value. Producers start breaking even on the overall costs to

4. You can’t sell what you don’t own. If you are building your agency

the agency between $150,000 and $200,000. Above $200,000 they are

toward your future retirement benefit you must realize that you can only

likely earning you annual profits and starting to impact the value of your

sell the portion of the book of business that you own. If you have one

agency (depending on your size).

or more producers who each claim an equity position in the books of business that they generated, it directly diminishes your equity value in

10 | MARCH 2018

WISCONSIN INDEPENDENT AGENT

WHY YOU SHOULD QUIT WORKING FOR A COMPANY IF THEY DON’T ALLOW YOUR PERSONAL BRAND TO GROW We live in such an amazing time period. One where, assuming they are motivated, anyone can absolutely build their individual brand and bring more value to the world. Of course, the most prominent way this can be done is through all the social media and digital platforms available to each of us at a minimal cost. But as I’ve traveled the world as a speaker and chatted with thousands of employees these past few years, I’ve noticed something disturbing:

Many companies don’t want their employees to build their individual brands. Sure, it’s fine if the company (or CEO) brand grows, but not that of the individual workerbees. Yep, it’s as true as it is disturbing.

A Culture of Fear It’s also why I’ve received so many emails over the years from employees of other organizations who feel stuck, overshadowed, and un-empowered to do that which they know would not only help market themselves, but their company in the process. Of course, the reasons for this vary. Often times, the leadership team has an ego the size of Texas and simply can’t imagine

one of their own employees outshining their “greatness.” Then of course there are those that feel like allowing (and promoting) the brands of their employees will lead to higher attrition rates as employees “outgrow” their role within the company and move on to their next phase. And finally, there are those organizations that are so morbidly afraid of headhunters coming in and stealing their employees that the thought of them even posting their name (much less other content) online or on the company website is absurd. But experience tells me that not only do these beliefs lack merit, but they kill company culture and morale in the process.

Employees + Individual Branding = Better Culture The fact is, when we help our employees build their brand, they sense a greater, not lesser, connection to the organization. Furthermore, when we find ways to shine a light on our employees, they in turn develop a stronger sense of self-worth, impact, and their entrepreneurial appetites are significantly more satiated. With my company, The Sales Lion, we require employees to build their brand. We look for ways to highlight them, promote them, and help them grow. And because of this, we’ve got a rich culture

of intrapreneurs that are building value for themselves and the marketplace. For me, as president of the company, this is what owning a business is all about. And for those that say, “Yeah, but what happens when they leave?” my response is simple: Then they leave. But at least I know I helped them become their best selves in the process. That’s the big picture I believe every brand and organization should have. It’s also why I’ve had to tell many, many employees of other organizations who have emailed me over the years that, if they couldn’t fulfill their desire for personal brand growth with their existing company, then it was time to move to another organization with more of a “big picture” outlook and culture. So if you’re in an organization and you feel like your talents are being intentionally overshadowed, my suggestion for you is this:

Don’t settle. Build the company and build your brand. If you’re not allowed to do both, and your intentions are truly pure, then it’s time to move on. The opportunities and organizations are out there, you just need to be willing to find them. Heck, they may even find you. > Marcus Sheridan, Keynote Speaker, Author, Owner/Partner at IMPACT.

the agency. What happens if you attract a buyer and the producers don’t want to

agency’s growth and productivity, equity should be earned in the agency, not just

sell their parts of the books of business? Complications arise when the business is

in the part of it that he has produced. If the new partner earns or buys a minority

split apart.

interest in the entire agency they quickly realize that ALL customers, ALL expense

These points make it sound as if we are against equity arrangements. NOT TRUE.

control, and ALL growth accrues to their benefit and they will contribute more to

But equity should be reserved for people who will help you increase the value of

your goals and objectives than any individual performers.

the agency in total, not as an incentive to produce business. There are other, better

These equity agreements can still include tight non-piracy and non-solicitation

ways to accomplish the goal of incenting producers to grow the agency’s book of

agreements and should be vested over a five year period to assure longevity of the

business.

employee.

And, when you find someone who becomes important enough to the agency that you a) don’t want to risk losing that person, and b) has earned his/her way into a real ownership role in the agency by virtue of the contribution made to the entire

WISCONSIN INDEPENDENT AGENT

> Al Diamond, a 32+ year veteran of the insurance industry with agency, stock company and direct writing experience.

MARCH 2018 | 11

TECHNOLOGY

HOW WILL BLOCKCHAIN DISRUPT INSURANCE? One of Bitcoin’s greatest successes has been to show how a network of individuals can exchange value without the need for a central authority. When you consider the implications of projecting the same underlying technology, blockchain, onto the complex web of underwriters, insurers, MGAs, affiliates and brokers that make up the insurance industry, you start to see how disruptive it might be.

TECHNOLOGY

As anyone who works in insurance knows, the industry is still awash with old technology and administrative tasks that weigh heavily on operational costs and ultimately lead to higher prices for consumers. This is what occurs across established, profitable markets, while the uptake of insurance in potentially massive emerging markets remains stubbornly low. My own experience of the insurance industry tells me that blockchain could be truly transformational in reducing the costs associated with issuing policies and managing claims. However, to truly take advantage of this innovation, insurance companies need to stop standing around the sides, thinking about dipping their toes in the blockchain water. They need to jump in before they’re crowded out.

The fundamentals of blockchain To really understand how blockchain might transform insurance, it’s worth briefly summarizing some of the key characteristics of the technology. Blockchain technology is more correctly referred to as distributed ledger technology and can include a number of blockchain protocols, with some of the best-known being Bitcoin, Ethereum and Ripple. At its heart, blockchain removes the need for a centralized authority that controls information and validates exchanges of value between different parties. In the decentralized model of the blockchain, the entire ledger of records and transactions is stored on each of the nodes in the network for every participant to see. Crucially for the world of insurance, blockchain technology could allow any type of asset to be tracked and traded digitally, with information about the provenance, identification, credentials and rights all stored securely and transparently. Some well known examples of the blockchain being used to track assets in

12 | MARCH 2018

complex supply chains are logistics giant Maersk’s tracking of global shipping cargo and EverLedger’s tracking of diamonds. While these aren’t insurance products, these blockchain powered solutions will clearly have a significant effect on the industry.

The claims opportunity When you consider the characteristics of the blockchain in the area of claims, the far reaching effect of this innovation start to become clear. An important element of blockchain technology that is worth mentioning here is smart contracts. These are lines of code that contain rules and regulations for actions that need to be taken in the event of certain things occurring, as well as the mechanism for executing these actions. In essence, they are digital contracts that are unambiguous in their design and don’t need any human administrator to action. Therefore, instead of waiting days or weeks to settle a claim, the introduction of smart contracts could mean that claims are settled instantaneously and without the need for transmitting paper documents. Our own work with a major global insurer showed what improvements can be made. The personal injury insurance app we collaborated on allowed someone to buy an insurance policy and have it issued on the blockchain. If the person was injured, they could go to a validated doctor, be treated and have the claim managed in real time, rather than sending photocopied documents and waiting 12 weeks for an answer. We’re seeing smart contracts pop up in other areas of insurance too, including the decentralized applications built by Etherisc. These smart contracts execute payouts when certain parameters are hit, such as when a flight is delayed. The idea of tracking systems and sensors brings us onto a parallel technology that is WISCONSIN INDEPENDENT AGENT

TECHNOLOGY

linked to blockchain disruption in insurance, the Internet of Things (IoT).

IoT plus Blockchain will change insurance IoT will play an important role in the future of insurance because of the important role that ‘things’ play in insurance. When you think how many insurance products can be categorised under the headings of protection for ‘things’ and protection for ‘people’, the significance of IoT becomes clear. As more and more consumer products become connected products, the potential repercussions for insurance are huge and probably go some way towards explaining why Amazon is starting to push into the European insurance markets. Looking forward just a few years, a world where the vast majority of consumer devices are connected to the internet and capable of sending data to providers that offer a sufficiently tempting service is a recipe for disruption in the insurance market. However, as well as providing a sufficiently desirable service to convince users to hand over their data, providers will need to consider the implications of how this data is used to make better decisions. This is where blockchain becomes such a fundamental foundation technology. The blockchain protocol is already proving how, through a range of cryptocurrency and early smart contract applications, it is capable of handling the complex interplay of multiple data sources to automate decision making. If you compare this imagined future of real time data from a range of devices feeding into complex smart contracts that action instantaneous decisions based on this information and compare it to the slow, paperbased process of human interactions that exist in most insurance businesses now, the opportunity for disruption is brought into sharp relief. This is why it’s so important for insurance businesses to start experimenting with the blockchain as soon as possible, so they can see how it could impact their business. If they don’t, they risk extinction. If they do, they will quickly see operational efficiencies as well as long term opportunities to develop new innovative products.

Blockchain-powered onboarding It is worth remembering that, in itself, the blockchain is not a particularly tempting consumer proposition. The lack of a shiney consumer blockchain brand is often one of the reasons sceptics point to in dismissing the suggestion that it will transform all industries. However, much like cloud computing before it, this foundation technology will open up huge cost efficiencies in existing business models as well as entirely new business models. It is the organisations that can understand and utilise it properly in order to overlay customercentric services on top that will win. After all, consumers aren’t generally interested in the tech stack behind the product they buy. They are interested if that tech stacks makes a product cheaper or more personalised to their needs. Microinsurance that is highly personalised to the needs of individuals but still cheap to administer is entirely possible in a world of IoT devices and smart contracts. Personalisation within insurance is sometimes seen as a bad thing, with the secure, healthy or young getting the best WISCONSIN INDEPENDENT AGENT

deals and the vulnerable, unhealthy and old missing out. Certainly the question of societal good will not go away in insurance but blockchain provides a potential solution here too because of its transparent features. The shared ledger means that individuals can securely store their data on the blockchain and control who can access it and for what purpose. Our own experience in this area came in the related field of finance, with a Know Your Customer (KYC) process we developed for a consortium of major financial institutions including HSBC, MUFG and OCBC. The shared ledger application that was developed leveraged the Ethereum blockchain to help banks reduce the time and cost of onboarding customers, share customer data in a secure manner and facilitate ease of customer data management. Once onboarded, an individual’s customer profile was encrypted and stored on the blockchain. Then, because of the proprietary multiparty key encryption protocol that was used, the data could also be shared with other banks if the customer chose to do so. As a result, the solution not only eliminated the duplication of work that came from each bank having its own KYC process but also reduced the human error that was inherent in all these processes.

Test your hypothesis now In my opinion, there’s little doubt that the blockchain will disrupt the insurance industry. The fact that data, contracts and ‘things’ (which will become ever more connected) play such an important part in insurance products means there’s almost no chance that it won’t. The reliance on legacy technology and administrative tasks completed by humans only increase this likelihood. With this in mind, my advice to businesses is to stop prevaricating when it comes to blockchain. The exact future of a blockchain powered insurance industry may not be crystal clear yet but the wide brushstrokes that define this future state are being made. Businesses that do not make their own mark soon could find themselves squeezed into a corner or excluded from the picture entirely. Insurance companies should be getting their hands dirty with blockchain as soon as possible. Test a hypothesis that connects your business objectives to the benefits of blockchain. In the first place, this doesn’t have to be (and probably shouldn’t be) a grand scheme based on an imagined future of personalised microinsurance built on smart contracts making automated decisions using multiple feeds from a series of connected devices. Think of a quick win related to a key business goal that blockchain could potentially solve and which could provide measurable benefits that your colleagues understand. I imagine smart contracts might be a good place to start. By testing and learning you’ll start to build a familiarity with the technology that will bring about a clearer understanding of how it might be used to solve more operational issues, create innovative new products and protect your business from industry disruption. > P avel Bains is an entrepreneur, futurist, designer and investor in exponential technologies. He is the CEO of Bluzelle Networks, which builds blockchain and distributed ledger solutions for the finance and insurance industries.

MARCH 2018 | 13

AGENCY OPERATIONS

LINKEDIN PROFINDER:

ANOTHER WAY TO FIND QUALITY PROSPECTS I suspect you have never heard of LinkedIn’s ProFinder platform. It is LinkedIn’s professional services marketplace that helps people looking for services find the best freelance or independent professionals in their area. It is currently only available in the U.S. and within specific service categories. Fortunately, Insurance is one of the categories included. Any individual on LinkedIn can request more information including a request for proposal from professionals who have a ProFinder profile. The ProFinder profile is in addition to your standard LinkedIn profile, although it does include some shared information. Making sure you have a fully complete profile is a crucial step to getting opportunities, as it’s one of the first things potential clients will see. I am not suggesting that the LinkedIn ProFinder service will be a massive new lead source. I completed a ProFinder profile a few months ago and have received only a handful of requests for insurance information from people in the Nashville area. However, it cannot hurt to have another source of possible leads, and it only takes a few minutes to apply.

Apply for LinkedIn ProFinder Access Inclusion in the ProFinder platform is not automatic. You will need to apply for access and be approved. It only takes a few minutes to apply and being part of the network can only help increase your visibility to potential clients on LinkedIn. Go to this link to start the application process: www.linkedin.com/profinder/pros Following are a few things to keep in mind:

When you apply, the system will ask you to select your services. Make sure to include as many areas of your insurance

14 | MARCH 2018

expertise as possible to increase the likelihood of someone finding you. You can always edit your services later.

Before applying, make sure your LinkedIn profile is complete and up-todate. The ProFinder concierge team will manually review all applications to ensure each professional has a full profile that demonstrates his or her professional status and experience.

to provide more service providers the opportunity to bid on the project. You can receive email notifications when the ProFinder system determines that you are a good fit for a new project request. Your email notification preferences can be adjusted. By reviewing your client request folders regularly, you can view all the project requests that are available in your area at any given time. Any listed as “available” are still open to accepting proposals and are first-come-first-served.

The team will review and respond to all applications within two business days.

The Process When a consumer submits a project request, the project is distributed by the LinkedIn ProFinder algorithm. The algorithm considers the following criteria when notifying you of potential leads: > Location > Services offered via Pro finder > Keywords > Completeness of profile ProFinder is a localized marketplace, so location is a primary factor when leads are distributed. If there aren’t enough professionals in a given area to respond to a project request, the geographic radius for the project is automatically expanded

ProFinder Cost Your first ten proposal responses through ProFinder are free to submit so you can get a sense of how the platform and the process works. After ten proposals, a LinkedIn Premium Business subscription is necessary for unlimited responses to project requests. The Premium Business subscription costs $59.99 per month. Paying annually will save you up to 25%. The LinkedIn ProFinder platform will not be a viable option for everyone. I do believe, however, that it is worth adding your profile and experimenting to see what type and quality of leads you might gather. What LinkedIn actions or activities have you found to provide the most and highest quality leads? > S teve Anderson provides information to insurance agents about how they can use technology to increase revenue and/or reduce expenses. He speaks professionally to hundreds of agents each year on the future of technology, the social web, and how insurance agencies can establish their Internet presence.

WISCONSIN INDEPENDENT AGENT

AGENCY OPERATIONS

KEEP YOUR SOCIAL MEDIA POLICY CURRENT, OR ELSE Most of you have by now heard the story of the cyclist who gave the one-finger salute to the President’s motorcade. She told her employer when the picture went viral and they fired her. Before you get worried, let me assure you that this is not a political post. This incident is a great example of why so many companies need to evolve - and quickly - their understanding of social media and how their employees use it. In another age and another job, I had the privilege to revise the company’s social media policy. It was fascinating to think about how

employees are an in-house population of folks who, likely, mean you well and have some kind thoughts about the company and its work. Let them put a face on it and endear the company to their friends and families. But it’s also risky. Social media policies started out pretty draconian - full of “don’t,” and “must not,” and “employees are forbidden…” Along with today’s more evolved and

spotlight had no company logos associated with it. In fact, I imagine most of us wouldn’t know the company’s name (Akima, LLC - let’s say it loudly for the folks in the back) if they hadn’t flown off the handle and sacked her. This isn’t a freedom of speech issue, and it’s not really even a political issue. It’s a fairness issue, and I think that’s where the company is going to find themselves up a proverbial creek.

the employees use these platforms, how that use had changed since the initial policy had written, and how the company’s own use of the medium (not to mention Medium) had evolved. Many companies are moving into “employee advocacy,” encouraging the folks who work there to be boosters of the organization - sharing events and milestones on their own personal accounts to amplify the work of the company and help it to reach a wider audience. This is good stuff on the face of it. Your

ubiquitous use of social media, we have to create and commit to more evolved policies and treat employees like the adults we trust them to be. “Don’t” doesn’t cut it. A good policy has to be clear, consistently enforced, and loathe to interfere in the personal lives and accounts of employees. And that’s where these guys fell down. They’d recently let a dude off the hook for a pretty nasty display of political speech and profiles that directly linked him to the company. Whereas Julie Briskman’s moment in the

And, in my unsolicited opinion, they deserve it. Given how divided we currently are politically, and how people are accustomed (and apparently entitled) to share their every waking thought for good or ill, if your company’s policies aren’t aligned with our current reality, buckle up.

BE WORRY FREE WITH IMT

> T hea Joselow, Founder, Digital Media Strategist, Writer and Editor Nutgraf LLC. Former Director of Communications and Social Strategy and Channel Management for Aetna.

We understand the importance of partnerships and take great pride in building strong, stable relationships with our agents and policyholders. Through experienced claims expertise and hightouch customer service, we are there when we are needed most. Learn how you can represent IMT Insurance & Wadena Insurance at imtins.com/contact_us.

imtins.com | west des moines, iowa WISCONSIN INDEPENDENT AGENT

MARCH 2018 | 15

COMMENTARY FROM COUNSEL

HOLE-IN-ONE HEADACHE: COVERAGE LESSONS FROM THE 18 TH AT GREENBRIER With no shortage of avid golfers in the independent agent world, many of you surely have attended your share of charity golf events. Inevitably, there is one hole – a par three – with a car parked next to the tee box. If a golfer is lucky enough to ace this particular hole, he or she wins the car. One of my law partners aced just such a hole a few years ago (no fluke, he is a legit single handicap golfer). Of course, as savvy members of the insurance industry, you understand that, most of the time, the charity does not bear the cost of purchasing the car. Instead, a competitive market exists for this type of insurance product, transferring the risk of paying out on the car from the charity to the insurer, in return for a small premium. Some of you have probably helped charitable organizations or other event sponsors obtain this coverage. But, like any policy, a “hole-in-one” policy has terms, conditions, limitations and exclusions that are binding on the policyholder, and should be clearly understood before the golf event. This is illustrated by fallout from the 2015 Greenbrier Classic PGA golf tournament. There, the hole-in-one prize was for the fans—the tournament’s charitable partner promised that if any golfer made a hole-in-one on the 137yard 18th hole, they would pay the fans in attendance $100. But wait, there’s more! If a second golfer repeated the feat, spectators would be paid an additional $500. You can probably see where this is headed. As luck (and skill) would have it, both George McNeill and Justin Thomas aced the hole, and the charity paid out almost $200,000 to the fans. The charity filed its claim with the tournament’s hole-in-one insurer, which was promptly denied. It turns out that the policy specified a minimum yardage of 170 yards for the prize hole (the application stated that the hole had to be at least 150 yards). Again, the 18th at the Greenbrier that day was set up at just 137 yards. Naturally, litigation ensued. The charity included claims for coverage, WISCONSIN INDEPENDENT AGENT

plus bad faith, breach of contract, negligence and fraud. The district court dismissed these claims on summary judgment, finding that the plain language of the policy foreclosed all of the charity’s claims. The charity appealed, but the U.S. Court of Appeals for the Fourth Circuit affirmed in late-December 2017. The Fourth Circuit’s opinion does not include a lengthy discussion of the facts or theories, but offers enough to show that the basis of the charity’s arguments was that it was never informed of the minimum yardage requirement and that, in addition, it was without authority to dictate hole yardages during the tournament. (This last point is not unusual, as the PGA Tour determines course setup, rather than tournament sponsors or organizers). Also lurking in the opinion is the specter of a claim against the insurance broker, but there was neither discussion nor resolution of such a claim. The court was unsympathetic that the policyholder had neither read its policy (or the application) nor noticed the yardage requirement. The court enforced that clear and unambiguous provision, also holding that the charity did not have a reasonable expectation of coverage. The court also noted that the carrier had notified the charity’s broker of the minimum yardage requirement and that it could not be held responsible for the apparent failure of the broker to inform the charity. With the issue of coverage resolved against the insured, the court also dismissed the bad faith and other extra-contractual claims. The takeaway for an agent or broker in this scenario is no secret: your clients need to read their applications and policies and ensure they are meeting the conditions of coverage.

> Josh Johanningmeier, IIAW General Counsel

MARCH 2018 | 17

Doing The Right Thing Since 1964

James A. Roe, CPCU, ASLI President

Our people will earn your trust. Our service will keep it. We understand the needs of today’s independent agents, so we offer more than a diverse line of product offerings. We have personable experts who will work seamlessly with your team to meet the needs of your customers, where and when you need it. When you want service that exceeds your expectations, we’re ready.

Let us help you find the right solutions. ®

GOVERNMENT AFFAIRS

GOVERNOR WALKER PROPOSES END OF SESSION HEALTH CARE PLAN Governor Scott Walker, who is facing re-election later this year, has proposed what he has dubbed a Health Care Stability Plan in an effort to deal with unstable, rising health insurance costs the state level. Parts of the plan have already received bipartisan approval from state lawmakers. The Governor’s plan, initially unveiled less than a month ago in his annual State of the State Address, consists of three parts:

Governor said the waiver, if approved, will help reduce insurance premiums for approximately 200,000 residents who receive insurance through the individual marketplace.

1. A Permanent Waiver for Senior Care The State of Wisconsin is applying for a permanent waiver for Senior Care. Governor Walker said the program is affordable and popular in the state and instead of continually applying for waivers for the program, he has asked his administration to apply for a permanent waiver for the program from the federal government.

2. Pre-Existing Conditions Governor Walker is calling on the State Senate to quickly approve legislation (Assembly Bill 365) introduced by Milwaukee Democratic State Representative Daniel Riemer. Riemer’s bill originally proposed that a health insurance policy or governmental self-insured health plan would be prohibited from imposing a lifetime or annual limit on the dollar value of benefits provided under the policy or plan. A substitute amendment was adopted to the bill that removes that provision and instead specifies that a health insurance policy or governmental self-insured plan is prohibited from imposing a preexisting condition exclusion under the policy or plan. A “preexisting condition exclusion” is defined in the bill as a limitation or exclusion of benefits relating to a condition that existed before the date of enrollment for coverage. The amendment also specifies that if a person has had continuous coverage for the 12 months before the date of enrollment with no breaks in coverage for any period longer than 63 continuous days, a health insurance policy or governmental self-insured plan is prohibited from considering a preexisting condition for the purposes of setting premiums or cost-sharing provisions. Assembly Republicans passed the bill on a partisan 62-35 vote with all Democrats voting against the measure, including the original bill’s chief sponsor. Several health insurance carrier groups oppose the measure. It remains unclear what action, if any, the Senate will take before they adjourn in March. The bill is currently sitting in the Senate Insurance, Financial Services, Constitution and Federalism Committee.

3. State Innovation Waiver for Reinsurance Lastly, Governor Walker requested legislation that takes advantage of the State Innovation Waiver (Section 1332 Waiver) currently allowed under the federal Affordable Care Act (ACA). The waiver would enable Wisconsin to create its own state-based reinsurance program. The WISCONSIN INDEPENDENT AGENT

The Section 1332 Waiver was included in the ACA and became available to states on January 1, 2017. To date, three states three states including Minnesota, Oregon and Alaska have implemented the waiver and many others are now pursuing this option. As of December 2017, 24 states were considering legislation to authorize a 1332 waiver. As more insurance companies leave the individual marketplace the cost of premiums for those companies that remain in the individual marketplace rise considerably. The Office of the Commissioner of Insurance (OCI) indicates that on average Wisconsin has seen a 36 percent increase statewide and some areas in northern Wisconsin have seen increases as much as 105 percent. When reinsurance programs were instituted, Minnesota saw a 20 percent decline in premiums and Oregon saw a 7.1 percent reduction. Walker expects the proposal to be in place and operational for 2019. In addition, a second waiver would be proposed in early 2019 that would impact the 2020 plan year. Walker’s proposal is a “corridor based” reinsurance program. The anticipated program would provide coverage up to 80 percent for claims above $50,000 and below $250,000, similar to the State of Minnesota program. Claims above $250,000 would be covered 100 percent by the insurer creating an incentive to control costs. The Governor said this type of program is the most predictable for state budgeting and for health insurance providers. The plan is expected to cost approximately $200 million of which $50 million would come from state funds that have yet to be identified, but there will be no fiscal impact to the state until 2020 according to administration officials. The legislation (Senate Bill 770) authorizing the waiver was quickly approved by both houses of the Legislature recently and now awaits final approval by Governor Walker. Once signed by the Governor, Wisconsin would begin the process of applying for the Section 1332 Waiver with the Center for Medicare and Medicaid Services (CMS). Then once approved by the federal government, the reinsurance program would be operational in 2019 and in subsequent years if the state continues it. The Office of Commissioner of Insurance (OCI) will be charged with state oversight and management of the program. > Misha Lee, IIAW Lobbyist

MARCH 2018 | 19

2018 PRE-LICENSING CLASS SCHEDULE Conducted at State Association Headquarters, IIAW pre-licensing classes fulfill the study requirements for life, health, property and casualty. Full course materials — not just an outline — are included with registration. The classes are:

LIFE & ACCIDENT/HEALTH January 8-11 February 5-8 March 5-8 April 9-12 May 14-17 June 4-7 July 9-12

PROPERTY & CASUALTY January 22-25 February 12-15 March 19-22 April 23-26 May 21-24 June 18-21 July 23-26

August 6-9 September 10-13 October 8-11 November 5-8

August 20-23 September 24-27 October 22-25 November 12-15

December 3-6

December 17-20

Designed to help you pass your state licensing examination. The quickest way to meet the Wisconsin education hours requirement. Taught by experienced insurance professionals who know the business. Conducted in a comfortable classroom with free parking. Approved by the Office of the Commissioner of Insurance.

IIAW MEMBER PRICING: $340 - Pricing given for full class registrations.

NON-MEMBER PRICING: $355

You may also take individual classes.

DAILY SCHEDULE

Life & Accident/Health

Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Life Policies, Terms & Concepts Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) SECTION B: Life Policies, cont. & WI Life Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) SECTION B: Accident & Health Policies, Terms & Concepts Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Accident & Health, cont. & WI Health Insurance Law

Property & Casualty

Day 1 (Monday) 8:30 a.m. - 4:00 p.m. ($85) SECTION A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 a.m. - 4:00 p.m. ($90) SECTION B: Property Policies, Terms & Concepts CLASS SITE/DIRECTIONS The IIAW is located at 725 John Nolen Dr. in Madison, WI. Day 3 (Wednesday a.m.) 8:30 - 11:30 a.m. ($45) When traveling south on John Nolen, it’s the last driveway SECTION B: Property Policies, cont. & WI Property Insurance Law Day 3 (Wednesday p.m.) Noon - 4:00 p.m. ($45) before Highway 12/18 (Beltline). Located near the Alliant SECTION B: Casualty Policies, Terms & Concepts Energy Center and Sheraton Hotel. Day 4 (Thursday) 8:30 a.m. - 4:00 p.m. ($90) INCLEMENT WEATHER SECTION B: Casualty Policies, cont. & WI Casualty Insurance Law If weather conditions are questionable, use your own judgment regarding your personal safety. If Madison public  Please contact Kathy@IIAW.com for information about schools are closed, the IIAW is closed and pre-licensing is multiple registration discounts. canceled for the day. Canceled classes are made up on The course fee includes all class materials. Materials are Friday. distributed on the first day of class. You receive: HOTEL INFORMATION • The Life & Accident/Health or Prop. & Casualty Insurance Students requiring lodging will receive a special rate at the Study Manual. Clarion Suites, 2110 Rimrock Rd. in Madison. Please call • The Intermediary’s Guide to Wisconsin Insurance Law. the hotel directly at 608.284.1234, and ask for the • The State of Wisconsin Ins. Licensing Candidate Handbook. independent insurance agent’s discount. This provides all the necessary information to obtain a license.

To register, click the Education tab on IIAW.com. For Wisconsin exam info, visit prometric.com.

CONTINUING EDUCATION ABEN ONLINE CE CLASSES

IIAW ONLINE CE CLASSES – Continued

Commercial Property Endorsements That Can Make You Money! 3 CE Credits Approved Commercial Property Coverages Date: March 13, 2018 3 CE Credits Approved Location: ABEN Online – iiaw.aben.tv Date: March 19, 2018 Time: 9:00 AM – 11:00 AM Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM

IIAW ONLINE CE CLASSES

Workers Compensation 3 CE Credits Approved Date: March 5, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM E&O: Roadmap to Policy Analysis – Part One 3 CE Credits Approved Date: March 8, 2018 Location: IIAW Webinar – iiaw.com/events Time: 8:00 AM – 11:00 AM E&O Roadmap to Policy Analysis – Part Two 3 CE Credits Approved Date: March 8, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM Income After Retirement – Where Does the Money Come From? 3 CE Credits Approved Date: March 12, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM Insuring Toys and Collectibles 3 CE Credits Approved Date: March 13, 2018 Location: IIAW Webinar – iiaw.com/events Time: 8:00 AM – 11:00 AM Insuring Hobby and Small Farms 3 CE Credits Approved Date: March 14, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM

An Agent’s Guide to Insuring Nonprofits 3 CE Credits Approved Date: March 20, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM Ethical Dilemmas…Making the Right Choices 3 CE Credits Approved Date: March 22, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM Personal Auto Policy 3 CE Credits Approved Date: March 23, 2018 Location: IIAW Webinar – iiaw.com/events 8:00 AM – 11:00 AM Condominiums 3 CE Credits Approved Date: March 26, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM Business Income – Coverage Analysis through Claims 3 CE Credits Approved Date: March 27, 2018 Location: IIAW Webinar – iiaw.com/events Time: 8:00 AM – 11:00 AM Additional Insured and Certificates of Insurance 3 CE Credits Approved Date: March 28, 2018 Location: IIAW Webinar – iiaw.com/events Time: 12:00 PM – 3:00 PM

FFO AW W..CCO OR RM MO OR REE C CLLAASSSSEESS AAN ND D TTO OR REEGGIISSTTEERR P PLLEEAASSEE G GO O TTO O IIIIA OM M

VIRTUAL UNIVERSITY

ASK AN EXPERT

Q&As ABOUT LLCs AND HOLDING COMPANIES Q:

Drive Other Car Endorsement Is there a reason (or advantage) to have Drive Other Car coverage endorsement on an individual who also has a Personal Auto Policy? Is there ‘other insurance’ clause issues? Will the DOC endorsement be excess coverage if PAP limits are exhausted? The need for DOC is greatest when there is no PAP in the house. If you have a PAP and also DOC, you get “double coverage” many times. If my employer offered it to me, I’d jump on it! DOC won’t provide coverage for the autos owned by the named insured and family members. If the underwriter knows there is a PAP in the house I’d be surprised if they offer DOC. The PAP with a Personal Umbrella Policy is much better than the DOC. Both the DOC endorsement and the PAP provide coverage on an excess basis. The two policies would share on a proportionate basis.

BAP Other Insurance When this Coverage Form and any other Coverage Form or policy covers on the same basis, either excess or primary, we will pay only our share. Our share is the proportion that the Limit of Insurance of our Coverage Form bears to the total of the limits of all the Coverage Forms and policies covering on the same basis.

PAP Other Insurance (Liability) If the coverage under this policy is provided on an excess basis, we will pay only our share of the loss that must be paid under insurance providing coverage on an excess basis. Our share is the proportion that our limit of liability bears to the total of all applicable limits of liability for coverage provided on an excess basis. The ISO DOC only covers the designated person’s nonowned auto exposure. The endorsement eliminates any coverage for an auto if that auto is owned. I don’t see a problem having an extra set of limits for a claim. When I had a company car, I also had the ISO Extended NonOwned Coverage for Named Individual on my ISO PAP and it extended to my non-ISO PUP. At the time, I had over a million bucks in extra insurance for the cost of a couple of pizzas. It is not necessary to have DOC along with a PAP policy. The language restrictions within the DOC can be accessed thru Virtual University. Most states have anti-staking provisions or sharing provisions with the insuring agreements. If limits are the concern, then Excess Liability coverage would be a better solution for the named insured both personally and commercially. Depending upon the carrier of record you may be able to obtain a true Umbrella for the commercial aspect. This would provide the most effective coverage approach. Regardless of the limits selected you must have the named insured sign either corporately or individually concerning the level selected.

Umbrella and Primary & Noncontributory Provisions

Normally liability insurance flows horizontally before it goes vertically and by that, I mean the Primary GL insurance pays before excess (this happening in the other insurance wording). So, if you are Additional Insured on ABC’s GL policy and there is a claim, ABC’s GL policy is going to pay but before it goes to ABC’s umbrella to protect you your own primary GL responds. Once it’s exhausted, ABC’s umbrella would respond. Notice I said normally! There are a few carriers that now have umbrella endorsements that will grant Additional Insured primary coverage, so the additional insured would not have to use their own GL.

Lately we have been getting quite a lot of requests asking for proof that the Umbrella includes primary and noncontributory (PNC) provisions. Some additional insureds are now saying that even if the Umbrella is considered follow form it does not include the PNC because this is an endorsement to and not part of the underlying coverage form, which makes sense to me. Is this correct? Would an actual PNC endorsement need to be added to the Umbrella policy to comply with this requirement?

There is no such endorsement. Umbrella policies are excess over either underlying or a retained limit. They are never primary. The policy has an Other Insurance condition. You would have to read this condition to determine how it responds. If you want it to respond differently, the policy will have to be endorsed. ISO has a noncontributory endorsement for this, though I don’t think it really does what they designed it to do. This issue comes up most often when someone is using a CGL and an umbrella/ excess policy to meet minimum liability limits requirements. Say the insured has a $1M CGL and they have a job requiring $2M, they could up their CGL limit or they could buy a $1M excess policy that sits over both CGL and BAP. Or maybe both CGL and auto requirements are higher, so that an umbrella/excess policy is warranted rather than increasing underlying limits. The issue is horizontal vs. vertical exhaustion of limits. Does the order of payment go Insured’s CGL then AI’s CGL then Insured’s excess then AI’s excess or does it go Insured’s CGL then Insured’s excess then AI’s CGL then AI’s excess? Needless to say, the AI wants the latter. A few Umbrella and Excess Liability insurers have built PNC into their forms. The bulk have not. In the case of the latter, a PNC endorsement is needed. Yes, you need to have an endorsement added to the Umbrella policy which provides the PNC wording. Yes, Umbrella forms are excess by the form not PNC. It is an endorsement. The umbrella will not be PNC. The question is will the additional insured status provided by the umbrella be PNC?

The Virtual University is a Big “I” members-only resource. Many articles are based on real-life questions received by the Ask an Expert service. This service ensures that the information is current and topical. Go to www.independentagent. com/Education/VU/. You will need to login with your IIABA username and password before using the VU. The IIABA does not assume and has no responsibility for liability or damage which may result from the use of any of this information.

22 | MARCH 2018

WISCONSIN INDEPENDENT AGENT

Independent Insurance Agents Every day, you as independent agents put on a rocking show for your clients. We are proud to give you a standing ovation!

ERRORS & OMISSIONS

POTENTIAL E&O CLAIM: SHOULD I REPORT IT TO MY E&O CARRIER? The decision whether an insurance agency reports a potential claim to its professional liability carrier brings with it a host of issues to consider. What effect does reporting a potential claim have on my agency’s loss history? How will it affect my agency’s premium? What difference can it make? After all, it is a potential claim. My customer has not hired an attorney or filed a lawsuit against my agency. Am I only creating trouble for my agency by reporting this potential claim? The best source to answer this question is the agency’s professional liability policy. The policy requires that an agency report potential claims to its carrier. But apart from that, there are additional, common sense reasons for doing so. The following example highlights those reasons. An agency’s most important and long-term customer owned an engineering business along with numerous commercial buildings. The agency handled all of the customer’s insurance needs obtaining, among other coverages, commercial property coverage. A pipe burst in one of the commercial buildings resulting in over $200,000 in damage. Unfortunately, the building was vacant for several years, a fact not shared by the customer with the agency. As a result, the commercial property coverage placed by the agency contained limitations on coverage for vacant buildings. Even though the agency suspected the carrier would invoke the vacancy provisions of the policy, the agency thought it was best, nevertheless, to report the claim to the carrier. The agency’s suspicions were well-founded as the carrier denied coverage for the property claim because the building was vacant at the time of the loss and was vacant for several years. The customer was outraged by the lack of insurance coverage though it did not take issue with the carrier’s coverage position. Like many business owners, the customer believed that the significant premiums he paid each year entitled him to coverage in the event of a loss regardless of policy language. The agency was worried about losing its most important customer though it knew it did not breach any duty owed to the customer. After all, the customer never told the agency about the change in the building’s status: from occupied

to vacant. And the agency also agreed with the carrier’s coverage position. Faced with an angry customer who was litigious by nature, and a significant uncovered loss, the agency decided to report a potential claim to its professional liability carrier, Westport Insurance Corporation. The Westport claim handler made his initial contact with the agency within 24 hours of the potential claim being received by Westport. After collecting the claim information, the Westport claim handler and the agency worked together as a team to develop a strategy focusing on both the customer and the carrier. The customer was assured that the agency would advocate on the customer’s behalf with the carrier in an effort to identify any avenue of recovery for the customer. At the same time, it was explained to the customer that the agency did nothing wrong in placing the property coverage that included vacancy provisions. The customer’s indulgence was sought so that the agency could have time to then discuss the situation with the carrier. A commitment was made to provide frequent updates to the customer. The focus then turned to the carrier. As there was no dispute with the carrier’s coverage position, the Westport claim handler and agency agreed on a two-part strategy that would leverage the agency’s long-term profitable relationship with the carrier, and the customer’s profitable account history. The agency appealed to the carrier using empirical data to prove that the carrier benefited throughout the years by doing business with the agency and the customer. As a result, the carrier agreed to make a business accommodation by paying the customer $100,000 on the uncovered claim. This decision was relayed to the customer. The agency believed that the carrier would contribute more. After further discussions with the Westport claim handler, the agency made an additional appeal to the carrier resulting in an agreement to pay an additional $100,000 bringing the total recovery to $200,000. The agency’s contact with the carrier said that he had never seen a payment of this kind on a loss

that was clearly not covered by the policy. The Westport claim handler and the agency had many conversations about not only what to say to the customer and carrier, but how to say it. Of utmost importance were creating and keeping goodwill with the customer. While not every potential claim is resolved on such favorable terms, this example shows what can be achieved when a thought-out, collaborative approach is taken by an agency and Westport. Without question, had this potential claim not been reported to Westport, the customer would have sued the agency and the carrier, and the agency would have lost it most important customer. The agency may also be concerned about whether the mere reporting of a potential E&O claim will have any adverse underwriting effect on their E&O. Each situation is unique and each carrier is different. Westport will review the facts and circumstances of the individual situation, but as a general rule the mere reporting of a claim does not automatically result in any underwriting action or increase in premium. Because your E&O professional liability policy is claims made, it is imperative that you report any potential claims immediately to your E&O carrier. In fact, Westport recommends that you report them as soon as practicable to ensure that the claim is reported during your policy period so coverage can be determined. In the situation described above, there generally would be no underwriting action taken or premium increase as a result of the potential claim. Not every potential claim will end up with a result like this one, but if you give yourself (and your E&O carrier) the opportunity to resolve things before they develop into something bigger, the probability of a positive outcome increases dramatically. And if you don’t, the possibility is completely gone. By taking steps to report potential claims to Westport early, you may avoid actual claims and maybe even litigation. >B rian Snyder, JD, is Assistant VP and Claims Specialists with Swiss Re Corporate Solutions who joined the company in 1995 and has worked in several claims departments, and handled insurance agents and brokers professional liability claims since 2001. Prior to joining the company, Brian spent three years as a litigation attorney in Kansas City, Missouri.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re”) and/or its subsidiaries and/or management and/or shareholders. Copyright 2010 Swiss Re America Holding Corporation

24 | MARCH 2018

WISCONSIN INDEPENDENT AGENT

EMERGING LEADER SPOTLIGHT Each month we will be featuring one of the active members of our Emerging Leaders Committee. Our March Emerging Leader is Dustin Helmenstine from American Risk Management Resources Network, LLC. Tell us your name and a little more about you: Dustin Helmenstine. I grew up on our family’s farm in Blue Mounds, WI. I work for ARMR.Network, LLC. How long have you been on the Emerging Leaders committee? This will be my 1st year on the committee.

Why should a new agent join the EL committee? I think a new agent should join because the group is looking outside the scope of just insurance. I think it will be a great

How did you hear about the Emerging Leaders Committee? I learned about the Emerging Leaders Committee while attending the Leadership Conference last year.

way to build continuity with other professionals who are looking for something more than their day to day work activities.

Why did you choose to become active with the Emerging Leaders committee? I wanted to become active with the committee because I wanted to meet fellow insurance professionals in the area. I thought it would be a great way to bounce ideas or ask questions to individuals in the same demographic as myself. What is your favorite EL event or activity that you’ve done with the EL group? Up to this point, I have only attended the Fall Leadership Conference, which I am looking forward to again this year! WISCONSIN INDEPENDENT AGENT

Where is your favorite vacation spot? So far, my favorite vacation has been to Colorado. I do hope to travel more in the future. Do you have any pets? I have a yellow lab who just turned 6 months. Her name is Rey, based off of the Star Wars character. My hope is she’ll turn into a great hunting dog. What is one professional goal for you in the next 3-5 years? One professional goal of mine is to help the insurance industry advance with technology.

MARCH 2018 | 25

RISKY BUSINESS

PROTECTING YOUR AGENCY STARTS TODAY Prior to joining IIAW, I spent eight years as part of the Kimberly-Clark Corporation Global Risk Management team. Working for an international Fortune 200 company, I quickly learned that success is heavily dependent on the ability to get results. Results are based on our actions and our actions are driven by knowledge and experience. What happens when you don’t have the knowledge and experience to get intended results? You turn to a trusted partner. At IIAW, we continue to look for new ways to offer resources and professional experience to drive growth and excellence in the independent agency channel. That’s why we have created an Agency Risk Management program. The program is designed as a risk management map to determine where the agency should focus proactive efforts and what resources are available for specific areas of focus.

The Agency Risk Management process starts here. Engaging in a new opportunity can seem daunting. Where do you begin? The answer is simple: www.protectyouragency.com. Here you will find the Agency Risk Analysis tool which consists of 20 yes or no questions. By completing the analysis, you will immediately receive your agency risk score. This is followed by the receipt of a custom Risk Profile, which clearly outlines the risk management resources recommended based on the responses to the Risk Analysis. We make it simple for you to look at strategic, financial and operational risks and identify solutions that meet your needs. We feel confident in the Agency Risk WISCONSIN INDEPENDENT AGENT

Management program and that is why we make it available to any independent agency in the state. We recognize the importance of making efficient and effective solutions that allow you to grow your business and focus on your clients. Visit www.protectyouragency.com to learn more about the many Agency Risk Management solutions and complete your Agency Risk Analysis TODAY!

Can Recording Phone Calls Defend You in an E&O Claim? As the Director of Risk Management for the Independent Insurance Agents of Wisconsin, I’ve received this question from members on many occasions. Fortunately, there is some guidance in the form of state statutes that should be used to determine how your agency will handle calls. In the state of Wisconsin, it is completely legal to record a conversation if one of the parties is aware that the conversation is being recorded. For example, as an agency you can record incoming phone calls with clients and do not have an obligation to inform the client that the call is being recorded. However, according to state statute 885.365 “evidence obtained as the result of the use of voice recording equipment for recording of telephone conversation, by way of interception of a communication or in any other manner,

shall be totally inadmissible in the courts of this state in civil actions”. This statement does not apply where “such a recording is made in a manner other than by interception and the person whose conversation is being recorded is informed at that time that the conversation is being recorded.” According to this Wisconsin state statute, it is legal to record a phone conversation with a client but if you’re using phone recording equipment as an E&O claim mitigation strategy you must notify the caller, at the time of the call, that the conversation is being recorded.. Many of the conversations I have with agencies turn into a conversation regarding customer service and whether clients are deterred from doing business with an agency that records its phone calls. There are many strong invariable practices that can be put into place to avoid the need of recording phone calls. All states have individual statutes that can provide guidance around this question. As in any situation where legality comes into question, a professional attorney who is familiar with the insurance industry should be consulted.

> Mallory Cornell is the Director of Risk Management for the Independent Insurance Agents of Wisconsin.

MARCH 2018 | 27

SNAP SHOT into a Top 100 Agency How we grew from 28 Producers to 95 Producers.

Q: What markets do you have?

Q: How does carrier contingency work?

A. As the largest independent agency in Wisconsin, RRA has strong carrier relationships. We offer over 45 CL, 20 PL and 45 EB carrier partners.

A. Producers can share in all contingencies. Because of our size, our contingent return is more predictable and stable to our Producers.

Q: Will I make more money?

Q: Do you have a solid perpetuation plan?

A. Yes, we offer one of the strongest returns to Producers. We pay all office costs including staff salaries.

A. Scaling back hours, retiring or planning for the unexpected should be a priority. We help connect Producers with similar interests and backgrounds to develop a buy/sell plan where they are comfortable.

Q: How can I maximize my time? A. We handle staff management, HR, accounting, IT, rating, office management and other administrative details. This allows Producers to spend more time with their families or growing their book on their terms.

Q: What technology resources do you offer? A. A dedicated IT department ensures technology resources are performing and the latest tools are being reviewed. We operate on Applied Epic and offer Zywave, AccuComp and HR Workplace Services.

Learn More: Chris Illman I cillman@robertsonryan.com I 800.258.0277 I www.RobertsonRyan.com

Visit our website to quote your customer in the TRUST program today!

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2018

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badgermutual.com 800/837-7833 28 | MARCH 2018

WISCONSIN INDEPENDENT AGENT

Don’t let your clients get stuck in the penalty box.

At Western National, our Personal Auto policyholders are never penalized with premium increases for tickets or accidents. That’s our Penalty-Free Promise®, and it’s one we’ve stood behind for over 50 years. For the lasting penalty protection your clients deserve, turn to Western. “Penalty-Free” means an individual’s Personal Auto rates are never increased due to tickets or accidents. Initial and ongoing eligibility for coverage not guaranteed. Coverage not available in every state.

www.wnins.com

News Members in the

Society Insurance Hires Ryan McClone as Vice President – Sales and Marketing

Society Insurance welcomes Ryan McClone as vice president – sales and marketing. In his new role, McClone will oversee regional sales managers based in Society’s five states of operation as well as a team of marketing professionals in the Fond du Lac office. McClone previously served as executive vice president – operations, co-owner, and director at McClone, an insurance and risk management provider based in Menasha, Wis. In this role, McClone guided the company’s evolution from traditional insurance agency to a complete risk management consulting firm, managed the largest acquisition in the company’s history, and developed a new vision, purpose, set of core values, and brand. “We are particularly pleased to have Ryan join us due to his significant experience in management for a successful independent insurance agency,” said Rick Parks, Society Insurance president & CEO. “In addition to his other duties, Ryan will provide valuable insights on how we can best support our most important business partners.” McClone holds a bachelor’s degree in business and psychology from Lake Forest College, and he has earned the Certified Insurance Counselor (CIC) and Certified Risk Manager (CRM) designations. McClone proudly serves as a board member for YMCA of the Fox Cities and Valley Kids Foundation.

Liberty Mutual scoops top award Liberty Mutual has been named the top insurer with the most satisfied commercial insurance agents by the J.D. Power 2018 Independent Insurance Agent Satisfaction Study. The J.D. Power Independent Insurance Agent Satisfaction Study – developed in partnership with the Independent Insurance Agents & Brokers of America – surveyed independent P&C agents, particularly their “business outlook, strategies and overall satisfaction with commercial lines insurers” in the US. The study surveyed 1,380 P&C independent insurance agents, resulting in a total of 1,217 evaluations of commercial lines insurers with whom the agents had placed policies within the last 12 months. Of the insurers that made the list, Liberty Mutual emerged as the top scoring company among independent agents. “Agents clearly appreciate our ability to help them meet the

30 | MARCH 2018

insurance needs of small businesses, no matter how simple or complex the risk,” said Steve McAnena, the president of Business Insurance – a Liberty Mutual operation that offers commercial insurance coverages to small businesses via independent agents. “With over one million small commercial policies in force, we understand the importance of offering independent agents a broad appetite, range of tailored products, easy-to-use tools and local relationships.”

Acuity Hits $2B in Policyholders’ Surplus, Earns Impressive 2017 Financial Results Acuity released its 2017 financial results, which showed that the insurer surpassed $2 billion in policyholders’ surplus (GAAP) for the first time in the company’s history. Acuity’s statutory surplus grew at 13.3 percent in 2017, compared to just 1.0 percent for the industry. Also highlighting Acuity’s 2017 performance is a 94.6 combined ratio, nearly 14 points better than the insurer’s competitors in the property/casualty industry. This marks the largest positive spread between Acuity’s performance and the industry’s in 15 years and the seventh consecutive year Acuity has earned a combined ratio of less than 100. For an incredible 18 years, Acuity has outperformed industry averages across key areas of measurement. “Acuity’s performance compared to the industry is confirmation that we are doing things right—pricing products fairly and accurately, maintaining underwriting discipline, and operating at a high level of efficiency,” said Ben Salzmann, Acuity President and CEO. “Most important to our customers and independent agents, our consistent performance builds financial strength they can depend on.” Acuity showed other areas of strength in 2017 as well. The company reached $4 billion in assets for the first time, ending the year at $4.378 billion (GAAP). Additionally, Acuity maintained a leverage ratio under 1:1 for the ninth consecutive year, finishing 2017 with 0:76:1. In 2017, Acuity combined financial performance with sales growth, including surpassing 300,000 policies in force for the first time. In commercial lines, Acuity received a record number of quote requests and achieved an all-time-high 43.7 success ratio on writing those quotes, finishing the year with over $1 billion in premium for the second consecutive year. In personal lines, Acuity achieved a new milestone in written premium with over $386 million, driven by new business growth that was greater than the previous year. Gallagher Named One Of The 2018 World’s Most Ethical Companies® By The Ethisphere Institute--For The Seventh Consecutive Year Gallagher is honored to have once again been recognized by the Ethisphere® Institute, a global leader in defining and advancing the standards of ethical business practices, as one of the 2018 World’s Most Ethical Companies®. Gallagher has been recognized as one of the World’s Most Ethical Companies® every year since 2012 and is the only insurance broker to have received this honor, underscoring the company’s ongoing commitment to leading with integrity and prioritizing ethical business practices. In 2018, 135 honorees were recognized, spanning 23 countries and 57 industries. The twelfth class of honorees had record levels of involvement with their stakeholders and their communities WISCONSIN INDEPENDENT AGENT

around the world. Measuring and improving culture, leading authentically and committing to transparency, diversity and inclusion were all priorities for honorees. “From our company’s inception in 1927, Gallagher has always been committed to maintaining the highest standards of moral and ethical behavior,” said J. Patrick Gallagher, Jr., Chairman, President and CEO. “Operating with integrity is a critical component of the Gallagher culture and we are truly honored to again be recognized as one of the World’s Most Ethical Companies® in 2018.” “We view the World’s Most Ethical Companies® award as a great recognition for our company. More importantly, we value Ethisphere’s research into highly ethical operations and we use that information to drive our ongoing improvement efforts,” added Thomas J. Tropp, Corporate Vice President – Ethics and Sustainability for Gallagher. “While the discourse around the world changed profoundly in 2017, a stronger voice emerged. Global corporations operating with a common rule of law are now society’s strongest force to improve the human condition. This year we saw companies increasingly finding their voice. The World’s Most Ethical Companies in particular continued to show exemplary leadership,” explained Ethisphere’s CEO, Timothy Erblich. “I congratulate everyone at Gallagher for being recognized as one of the World’s Most Ethical Companies.”

• Beth & Rudnicki Insurance, Inc., Rockford, Ill., is a fourtime award recipient and has represented SECURA since 2000. • Spectrum Insurance Group, Eau Claire, Wis., is a two-time award recipient and has represented SECURA since 2016. • Friedman Insurance, Inc./LMC Insurance, Dubuque, Iowa, is a two-time award recipient and has represented SECURA since 1995. • Coverra Insurance Services Inc., Sparta, Wis., is a five-time award recipient and has represented SECURA since 1994. • Vaaler Insurance, Inc., Grand Forks, N.D., is a first-time award recipient and has represented SECURA since 2006. “As a mutual insurance company, our focus is not on stock prices. Instead, we are dedicated to the mutual success of our stakeholders — policyholders, independent agents, associates, and the communities we serve,” said Dave Gross, President & CEO of SECURA. “Our independent agent customers bring us and allow us to serve their customers, our policyholders, and this recognition is a celebration of our shared success.”

Ansay & Associates Acquires Indianhead Insurance Agency

Dave Gross, SECURA’s President & CEO, congratulates the 2017 top-performing agents. From left to right: Roger Beth, Beth & Rudnicki Insurance, Inc.; Mike Tiedt, Spectrum Insurance Group; Chad Beth, Beth & Rudnicki Insurance, Inc.; Tim Heyroth, SECURA VP¬–Sales; Gary Ascher, Coverra Insurance Services, Inc.; Dave Gross, SECURA President & CEO; Bruce Vaaler, Vaaler Insurance, Inc.; Terry Friedman, Friedman Insurance Inc./LMC Insurance; Tom Dawson, Dawson Insurance/MarshMcLennan Agency.

SECURA recognizes 2017 top-performing agencies SECURA Insurance announced its top-performing agencies for 2017. To earn this prestigious recognition, independent agencies met specific criteria based on their premium volume, profitability, growth, retention, and loss history with the insurance carrier. Dawson Insurance, a Marsh-McLennan Agency LLC company (“Dawson”), from Fargo, N.D., was named the top-performing agency for 2017. Agency President Tom Dawson accepted the award at a ceremony in January at the company’s annual Premier Agent Professional Development Conference. This is the agency’s second time earning a top-performer award from the company. Dawson has represented SECURA as an independent agency since 2006. These independent agencies also received top-performing agency awards: WISCONSIN INDEPENDENT AGENT

Ansay & Associates, a leading regional insurance and benefits solutions agency, continues to expand its footprint in Wisconsin with the acquisition of top-rated Indianhead Insurance Agency. The move strengthens Ansay & Associates already-robust personal and commercial service lines. “From the beginning, we knew Indianhead was the perfect partner,” said Ansay & Associates Chairman & CEO Mike Ansay. “Customer service is their No. 1 priority. They are respected and trusted throughout the region. And they are honest, fair and treat their customers like family. Those are desirable qualities.” Indianhead Insurance Agency will continue to operate under its own name at all eight of its locations. Employees from all regions will also continue to report to Executive Vice President Toby Dutter. In addition to those duties, Dutter will also be a shareholder in Ansay & Associates. “The reputation of Ansay & Associates speaks for itself,” Dutter said. “They are committed to helping their customers secure, protect and grow their version of the American Dream. That’s our mission as well. We’re excited about the opportunity to partner with a premier agency like Ansay & Associates.” Indianhead Insurance Agency is partnered with DowdReliance Insurance Agency and County Line Insurance Agency and is one of the largest independent agencies in Northwestern Wisconsin. It is providing multiple lines of personal and commercial insurances services and policies. The agency revises coverages, products and costs to best service policyholders.

MARCH 2018 | 31

INTRODUCING THE NEXT BIG “I” ROCKSTAR:

EMILY MOTT!

IIAW has made another addition to the team and things just keep getting better! It is my pleasure to introduce your newest IIAW resource, Emily Mott. If there is one thing you can expect from Emily, it’s a passion for customer service. It has been an exciting journey so far and the learning never ends for this Michigan-native turned Wisconsinite. Emily is the middle child in a family of five; four girls and one boy. She was raised in a small town in Michigan about an hour north of Detroit and an hour west of the Canadian

in the insurance industry. As a Customer Service Representative and Account Manager at The Horton Group and a Customer Service Representative at R&R Insurance Services in Waukesha, Emily embraced the opportunities to grow personally and professionally. Now in her role as Insurance Services Coordinator at IIAW, Emily is looking forward to the opportunity to make a positive impact with independent agencies. Wisconsin has been good to Emily and she is

when they’re not hard at work. What should you expect from Emily in her new role as Insurance Services Coordinator? First and foremost, you will be greeted with enthusiasm and willingness to help. “Helping people has always been a passion of mine and I’m looking forward to continuing to find more efficient and effective ways to enhance our member’s experience.” A self-proclaimed ‘nerd’, she loves to learn and has found an interest in

border. As a young entrepreneur, Emily sold her own produce, chickens and sheep. She was raised to be independent and self-sufficient. When offered an internship at The Horton Group in Milwaukee, the Northern Michigan University senior took a chance and moved to a new state to explore a new industry. It did not take long for this young and eager woman to appreciate the opportunities that exist

taking full advantage of everything it has to offer. Although her entire family is still back in Almont, Michigan - and now includes six beautiful nieces and one handsome nephew – Emily, her boyfriend Chad and their two dogs enjoy an active Milwaukee lifestyle. Taking in the many festivals, Brewers tailgate parties and venturing out on walks during the warmer months are just a few of the things that keep Emily and Chad busy

how technology will continue to play a key role in the insurance industry. Bringing Emily on board is part of a strategic plan to offer seamless services to IIAW members and policyholders. She will help us on our quest to continue to offer best-in-class services and continuously improved products. Please join me in welcoming Emily to the IIAW family!

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