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SPRING 2013

BIG I The

Official Publication of the Independent Insurance Agents of Virginia

Virginia

IIAV STAFF

Teri Chester Executive Secretary/ Receptionist & Membership Coordinator tchester@iiav.com Sherry Grubbs, AISM Accounting Manager sgrubbs@iiav.com Joe Hudgins, CPCU Technical Consultant jhudgins@iiav.com cell (804) 929-4138 Bonnie Joyce Insurance Administrative Assistant bjoyce@iiav.com Melanie Kjar Communications/Website Director mkjar@iiav.com Linda Loving, CIC, AISM, AIAO IIAV Chief Operating Officer & VFSC Executive Vice President loving@iiav.com cell (804) 929-4133

Inside this issue

Nettie Ardler, CPIW, DAE, AIAM Insurance Account Executive aardler@iiav.com Robert N. Bradshaw, Jr., MAM President & CEO rbradshaw@iiav.com cell (804) 929-4134

Danny Mitchell Vice President Business Development dmitchell@iiav.com cell (804) 929-4135 Susan E. C. Perkins Membership/Education Coordinator sperkins@iiav.com Kristina Preisner IIAV Director of Education & VAIA Executive Director kpreisner@iiav.com Lori R. Reed, CISR, CPIA Insurance Account Executive lreed@iiav.com Marie Toney Sales Associate mtoney@iiav.com cell (804) 929-4136 James West Director of Finance jwest@iiav.com

THE BIG “I” VIRGINIA • Spring 2013

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia 8600 Mayland Drive, Richmond, VA 23294 Phone: 804.747.9300 / Toll-free: 800.288.IIAV (4428) Fax: 804.747.6557 / E-mail: members@iiav.com Website: www.iiav.com

IIAV is an organization devoted to promoting, enhancing, serving and assisting independent insurance agents.

Message from the Chairman of the Board - Tommy Via

Message from the State National Director - James P. Bradner

Message from the President and CEO - Bob Bradshaw

Is Your Agency Management System Working for You?

Don’t Overlook Agency Opportunities

E&O Considerations for the Automated Agent

50 Awesome Social Media Ideas for Insurance Agencies

Become and IIAV Young Agent

2013 Compensation Trends - News Your Business Can Use

File Documentation and Records Retention

Four Tips for Getting Through and Talking to the Prospect

IIAV Education Checklist

Agency Records Retention Guidelines

IIAV extends our appreciation to the following sponsors of this publication: Allstar Financial Group

JMWilson 37

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Jackson Sumner & Associates

AmTrust NA

Johnson & Johnson

Anderson and Murison

Millers Mutual Group

Atlantic Specialty Lines

Penn National Insurance

Preferred Property Program

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FCCI Insurance Group

Southern Insurance Company of VA

GUARD Insurance Group

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Harford Mutual

The Iroquois Group

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For information on advertising please contact: Jim Aitkins, Blue Water Publishers, LLC / 22727 161st Ave SE, Monroe, WA 98272 phone: 360.805.6474 / fax: 360.805.6475 / jima@bluewaterpublishers.com

The Big I Virginia is a publication of the Independent Insurance Agents of Virginia and is published quarterly by Blue Water Publishers, LLC. IIAV and Blue Water Publishers, LLC do not necessarily endorse any of the companies advertising in the publication or the views of its writers.

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Chairman of the Board Tommy Via tvia@LLBrown.net

oy, the years seem to be getting shorter the older I get and this year as the IIAV president is no exception. With a little over three months remaining in our fiscal year, we have several objectives and goals that we continue to pursue. I hope that you will support and participate in these activities. I would like to acknowledge the fact that the Young Agents of Virginia surpassed their INSURPAC goal in 2011. This is the first time this goal has ever been surpassed. A major “Thank You” to the IIAV Young Agents Committee. We have held several regional “roundtable” meetings with diverse panels of our membership. Bob Bradshaw and Danny Mitchell shared the variety of services available through IIAV and IIABA for our Virginia agencies. More importantly, IIAV has received valuable input from the membership concerning the issues that “keep them up at night.” I know that the association has benefited from the meetings and several agents commented that they obtained helpful information concerning many of the association’s activities. As an agent, it has been a pleasure to meet agents throughout the Commonwealth and I have to admit that I, as an agency owner, came away with some worthwhile information from my fellow agents too. You, your agencies and your employees can help us with our goal to increase the number of Virginia agents who contribute to Insurpac, VAPAC and VAIA. Our industry is facing many legislative issues from Federal Regulation of Insurance to who will be eligible to be a “navigator” for the Health Insurance Exchanges. Virginia has repeatedly lagged behind most states for years in contributions and percentage of agencies participating. Now is the time to change this statistic. Your contribution, whether larger or small, will be greatly appreciated and used wisely. VAIA is building the future of the insurance industry by educating young adults on the variety of occupations available in our industry and the benefits it provides to the economy. In addition, this non-profit (tax deductible) offers educational opportunities to provide more qualified applicants for our agency positions. Finally, I invite you to attend our Annual Conference at Virginia Beach this June. This event will provide great networking opportunities among our agencies, our association and our other industry service providers. I am looking forward to seeing you there!

THE BIG “I” VIRGINIA • Spring 2013

Spring 2013 • THE BIG “I” VIRGINIA

State National Director James P. Bradner

jbradner@towneinsurance.com

o….you are thinking of upgrading your management system. Probably nothing affects your ability to run your business efficiently as much as your “system”. My agency is going through the process now, and it’s very “eye opening”. There are 2 major vendors and several smaller, specialized vendors from which to choose. While the end product should be similar (reports, financials, marketing, etc.) the way they get there is different. Here are a few issues you’ll have to deal with: 1. Cloud vs. hosting your own server. Make sure you understand the advantages and all of the costs with each. 2. Costs…maybe the number one issue. With costs you get the initial, and then the continuing, costs. For instance, one vendor charges for their “seat” licensing by the individual, and another by the number of “seats” (the most you can have logged on). 3. Conversion, not only how much it costs, but what is converted and for how far back. Be prepared to have an “old” computer available for “read only” for account history; oh, and you’ll have to pay for it. 4. How 3rd party vendors are handled, such as rating systems, document management systems, etc. 5. And don’t forget training and continuing support. What is the cost and what are the hours for training and accessibility ( availability, ease of access ). Read all you can on the systems, and above all, leverage your membership in IIAV by tapping the relationships you’ve built. The insight you’ll get from someone who’s “been there” will be invaluable.

THE BIG “I” VIRGINIA • Spring 2013

P E R S O N A L

I N S U R A N C E

When it comes to placing personal insurance for high-net-worth clients, your success is our success. Grow your business by partnering with Burns & Wilcox. By working with our Elite Client Solutions team, you do not have to turn away clients: We have the products to cover all their needs. Our high-net-worth specialists have the expertise to create personalized solutions. Plus, our unrivaled access to markets allows us to create solutions with speed and diligence. Making personal insurance even more personal is what Burns & Wilcox does best as the largest independent wholesale broker. Baltimore, Maryland | 410.891.4200 | toll free 800.729.1273 fax 410.540.9140 | baltimore.burnsandwilcox.com Charlotte, North Carolina | 704.525.1152 | toll free 800.999.3434 fax 704.525.7399 | charlotte.burnsandwilcox.com Morehead City, North Carolina | 252.726.8992 | toll free 800.498.1600 fax 252.726.9484 | moreheadcity.burnsandwilcox.com

President and CEO Bob Bradshaw rbradshaw@iiav.com

Agency Management Systems - Headache or....

n my profession we call it the “association management” system and I’ve worked with systems that would virtually send you and your staff into orbit. In fact, I worked with one association that spent over $1 million on their system and it still didn’t work. Besides the hard costs of AM systems, the soft costs of having a dissatisfied staff can be enormous. In short, if you sent the following question to your staff, how would they respond? “Have we provided you with the tools you need to do an exceptional job?” When your AMS doesn’t work or you outgrow it or just have user questions, what do you do? At IIAV we have a wide range of programs to assist you...not the least of which is the annual convention trade show. All sorts of AMS vendors attend the trade show and you can get up close and personal with them. You can directly ask all sorts of questions and quickly compare systems to see how they can work for your agency. Moreover, the networking opportunities at the convention - especially as they relate to management systems - are critical. Just a short discussion with fellow members will provide you with critically valuable information on the good, the bad, and the ugly of all sorts of agency management systems. No matter what your concern, you’ll find it at the IIAV convention - from world class sales leaders and visionaries, to even HR professionals ready to go one on one with you. And how can you not make the IIAV Convention in Virginia Beach anything but a family event? It’s perfect for Father’s Day. Again, from the Internationally known Boardwalk Art Show, beach activities, entertainment by Danny Morgan & The Janitors and even a trip to the Norfolk Aquarium, you and your family will love this year’s convention. So plan now to come to Virginia Beach - June 16-18 - for not only a great time, but a great investment in your profession and agency.

THE BIG “I” VIRGINIA • Spring 2013

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t n e m e g a n a M r u o Y Is g n i k r o W m Syste ? u o Y For

By Stephanie J Hulcher, CPIW stephanie@agencysystems.com Phone: (253) 549-7370

ver the past decades, most Independent Insurance Agencies have been forced to work harder and harder, but have realized less and less from their efforts! Technology is key, and most agencies have a significant investment in management software to help them become more efficient—to work smarter, not longer. Has yours worked for you? Are agencies really being smart in the way they use technology? At a time when you are being swamped by information overload and data processing demands, the right system is critical. Many agencies are paying very high fees for technology, most of which is a decade old or more. Many of these systems are simply unable to help you quickly perform the everyday tasks necessary to sell your products and provide the services your customers need. What you need is a solid, cost effective agency management system, one your employees can learn quickly and use efficiently. In today’s economy, that technology must also come at a cost you can justify. 12

THE BIG “I” VIRGINIA • Spring 2013

The beginning of a new year is a great time to assess what your management system is doing for you. Most agencies can evaluate where they are by answering these questions: 1. Can I quickly answer questions when talking with customers? 2. Can I quickly process common tasks like quoting, issuing forms, and emailing? 3. Are real-time reports available for all aspects of managing my agency? 4. Can new employees be trained quickly and inexpensively? 5. Does the system have any automated marketing capabilities? 6. Can I call and have immediate answers to question(s)? 7. Are updates provided on a regular basis (and does my staff get training to use these updates)?

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8. Does your system help you proactively service clients; e.g., download alerts for renewals that have had significant increases? 9. Do I have to pay for features my agency will never use? 10. Is new technology available, like client portals and real data analysis? 11. Does the system perform to a level that justifies the fees being charged? Most agencies can do a good job of a review themselves; consultants are not required. One option is to simply divide the task among your staff, just a few questions each, and involve everyone in the process. But always keep in mind, CSRs do not always embrace a change in management systems—they are only affected in a negative way until they can experience the positive effects a better management system will provide. Here are some current issues you may want to consider in your review. Cloud Computing Programs and data must reside somewhere. Traditionally, it has been on your own server in your office, that is, workstations connected by wire to the server. In recent years, cloud computing has become available—your programs and data reside on a secure server located some distance away (in the Cloud), to which your workstations connect via the internet. There are several advantages to cloud computing: (1) data is usually much more secure from loss and attack by viruses and other malware, (2) backups are more reliable, (3) updates to all programs are handled automatically by skilled IT staff who know insurance agency software, (4) employees can access agency data and programs wherever they have access to the internet (greatly facilitates mobile computing with laptop, smartphones and i-pads), and agency personnel no longer have to spend time dealing with the ever increasing complexities of technology. The disadvantage is the apparent cost—apparent because the actual cost may be the same or less than your current costs, especially as you consider the cost of employee time, hardware upgrades, and IT consultants. Emailing With the now universal acceptance of electronic communication, even in courts, you are probably experiencing an explosion of email communication. Are you capturing the information automatically, quickly and effectively for both inbound and outbound emails? This 14

THE BIG “I” VIRGINIA • Spring 2013

is a key E&O issue and the “filing” of email in a separate outlook folder is no longer adequate. You should be managing email, recording them in un-editable records, easily accessing them for further action, and creating related suspense items for follow-up. Mobile Computing Having access to information when and where you need it increases productivity and the service you can provide your customers. Laptops with wireless connections make this possible. Access using smartphones and i-pads for some tasks is also possible, although most programs are not very small-screen friendly. Real Time Direct Connect Most agency management systems offer a feature that directly connects with insurance carrier systems. Some are very fast—click on a policy number in your system, and an immediate connection is made to where you want to go in the insurance company system. This lets you order endorsements, post payments, review claims, etc.— no website passwords to remember, and few windows to navigate. Paperless Going paperless has been around for a long time, but many agencies are still keeping paper files. Being able to scan documents and attach them directly to customer records in your management system is a huge plus. For example, scanning a professional liability application and attaching it to the policy in your management system saves the application to a logical place, one that makes it easy to find in the future and is permanent. Whether you keep a paper file or scanned images, what you want to avoid is separate and redundant information systems. Policy Download and Commission Download This is another area where your system should provide all carrier information, not just select parts. In addition, your system should analyze your downloads and notify you (download alerts) of changes in premiums, cancellations, and key client notifications. This essential for an effective management system. Manually filtering through the reams of data you need to service your customers and manage your operations is nearly impossible with today’s information overload. Take a hard look at your current system and be sure these issues are addressed. They are necessary ingredients to a well managed agency. Be sure your management system is really working for you!

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By Mary M. Eisenhart, CPCU hen it comes to implementing and managing effective agency operations and the E&O considerations tangential to them, the challenges are steep. While having strong written procedures that are invariably followed by all employees is a given, there are a number of other considerations. Today’s service has been eroded in many business sectors, not just insurance. It seems processing responsibilities have replaced true service for many agencies, and it takes many forms. Checklists or risk management questionnaires, properly employed, are critical to this process, as well as a great sales and learning tool. The client response to this professional approach is overwhelmingly positive. Producers should sell; account managers should provide quality service. When producers take on “servicing,” no one sells, service levels aren’t enhanced and E&O exposure often increases. Account managers should not be deprived of the opportunity to learn and grow, while providing a quality service experience to their clients. When more substantial parts of servicing are handled by others, it becomes a self-fulfilling

THE BIG “I” VIRGINIA • Spring 2013

prophecy that the account manager position becomes dumbed down to a basic processing level. It’s not surprising that a large portion of the work on any CL account manager’s desk will often have to do with renewals. So why not do it right? The agencies that start the renewal process at least 120 days out are the ones that deliver a better experience in every way to the client—and to themselves. When it comes to compensation, desired behavior comes from being rewarded. Keep rewards simple, and keep a bit of every employee’s skin in the game. Ultimately, the operations

most there when it matters most there when it matters m

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there when it matters most Spring 2013 • THE BIG “I” VIRGINIA

manager’s compensation should also be tied to performance to reach desired objectives. Base salary plus bonus (not commission for servicing staff) really works if implemented properly. The fewer the exceptions, the better you will operate. Producer-owners are easily swayed by employees’ excuses for non-performance and tend to hire more staff than necessary; and they can even be at the root of most exceptions that reduce the agency’s operational effectiveness. Real leadership is needed at an operational level, to counteract objections effectively. It takes intimate knowledge of all operations to create the best results. Once an agency owner can say “We’ll miss you” to the employee he is most afraid of losing, the real work can begin. Leadership is the ability to get people to do what they should do, not necessarily what they want to do. This includes the courage to eliminate those from the equation who cannot or will not operate properly. One of an agency’s most important assets is its database. Agencies that can move beyond using their MIS as a typewriter can harness the power of having real, consistent, accurate information in place for making quality decisions, increasing sales and providing worldclass service. It makes sense, saves time, eliminates E&O, increases profitability and delights clients. Consider the real cost of not leveraging the full power of your automation tools; it’s more than you can afford to lose. Most agencies do not have training programs in place, yet they hire green, unlicensed individuals with the best intention of growing their own. Creating an educational career path for every employee is critical. It should include components of agency training and education, as well as outside, national level designation classes. The key is to create a baseline for knowledge and expertise, and make certain all employees attain at least that level while continuing to learn and grow. If you can’t do it for yourself, do it for your clients. Commit to a plan, and oversee its execution. Leverage your current resources. Assess your needs and fill any critical gaps with the proper tools, staff and resources. Start by letting go of something old and truly implementing something new for a different, desired result.

Effective operational management takes discipline, but it is achievable. The results just might be: • • • •

•

• • •

Producers who prequalify and sell quality accounts; Motivated account managers who handle significant books of business; Redefining service as exposure analysis and risk management rather than rote processing; EFT and credit card premium payments made directly to carriers, rather than any agency staff serving as bill payment clerks accepting walk-in payments; Outgoing calls to round existing, quality accounts rather than playing “beat the bank” with the same, chronically poor paying clients each month; Consistent procedures with few exceptions; A truly automated environment; and Profitability and growth.

Mary M. Eisenhart, CPCU, is the owner of Eisenhart Consulting Group, Inc., specializing in providing management and operations consulting for insurance industry organizations. 11716 WA IIABA ad.pdf

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THE BIG “I” VIRGINIA • Spring 2013

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E&O Considerations for the Automated Agent By Keidel, Weldon & Cunningham, LLP

A noted law firm specializing in agencies’ E&O defense work provides several recommendations as to how agencies can use their technology most effectively to protect against E&O exposure.

echnology is providing agents and brokers today with several tools to increase sales and profitability, as well as to provide better customer service. Automation is also helping many agencies manage their E&O risks more effectively because of its capabilities to retain accurate data, foster consistent processes, document transactions and conversations and to generate reports to monitor adherence to agency procedures. However, if the agency does not implement its technology in a disciplined way, this same technology can be used against the agency in connection with an E&O claim or lawsuit. The following is an overview of considerations agents should keep in mind when using technology, provided by a law firm with expertise in defending agents in E&O lawsuits. Electronic Delivery of Insurance Policies It is crucial in defending many E&O claims and lawsuits that the agency be able to demonstrate that it delivered the insurance policy to the customer. Without this evidence, we are unable to raise one of our most valuable defenses – the “Duty to Read” defense. However, many agencies are now delivering insurance policies and other insurance documents to customers in electronic form rather than in paper form. Providing insurance documents to customers in this way can help save both time and money and also allows the agency to provide a higher level of customer service. However, the agency should make certain that the customer consents to electronic delivery and understands that going forward, until such time as he or she indicates otherwise, he or she will only receive electronic copies of insurance documents and will not receive paper 20

THE BIG “I” VIRGINIA • Spring 2013

copies. The best practice for the agency to follow is to have the customer sign a letter acknowledging his or her acceptance of this practice. If policies are being emailed to customers, the agency should not rely upon automatic receipts, since sometimes they can be falsely generated by the recipient’s antivirus software. Instead, the agency should request that a customer who is sent a policy by email affirmatively respond that he or she has, in fact, received the email and attachment. If the customer does not affirmatively respond, the agency should be sure to call the customer to confirm receipt, and then be sure to make a note of that conversation in the agency management system. If a customer is being provided with an electronic copy of his or her insurance policy contained on a CD, the agency should be sure to send or hand deliver that CD along with a letter stating that the electronic document is the policy and that the customer should be sure to review the policy carefully and advise the agency of any questions he or she may have or changes that need to be made. In addition to email or a copy of the insurance policy on a CD, there is also an electronic system whereby an agency sends an email to the insured with a link to a stand-alone secure server where the client can obtain a copy of his or her policy. If the insured retrieves an electronic copy of his or her policy, the agency management system is documented to show that it was retrieved, by whom and when. However, if the insured does not retrieve the electronic copy of his or her policy, an email is sent to the agent to advise that the policy has not been retrieved. The agency can then either send the customer another email reminding him or her to access the policy through the secure portal or print the policy out and send it the old fashion way, via the mail.

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Notes of Discussions with Insureds and Insurers The rule within every agency should be that all employees must consistently make notes within the agency management system of any discussions with insureds, insurers or anyone else that concern in any way issues related to coverage or claims. The agency management system notes the date and time for any such notes entered. These notes can be very powerful proof if needed to defend the agency against an E&O claim or lawsuit. There are five important aspects to documenting any communications: 1. Note the date, time and duration of the conversation; 2. Note the name and title of the individual that your agency is communicating with; 3. Note how the conference took place, such as office conference, telephone conference and/or cell phone conference; 4. Note the salient points of the conversation; and, 5. If possible, follow-up with the insured in writing to confirm the conversation. While this seems extremely basic, you would be amazed at how many times we open an agency’s file and the notes are missing such details as whom they spoke with, where the conversation took place, or even the issues that were discussed. Without some, or all, of this basic information it may be more difficult or even impossible to defend an agent in an E&O claim properly. Activities Noted in the Agency Management System Activities that are created within the agency management system are a great way for employees to diary matters for follow-up. No matter what agency management system you are utilizing, the first and most important thing to confirm is that any activity performed is reflected by an activity within your system. For example, if your agency creates a certificate of insurance for a customer, your agency management system should create an activity in the log that corresponds to the creation of the certificate of insurance. This action would likewise apply to any other type of task, such as the completion of applications, change endorsements, performing a function on the carrier website, etc. The second most important thing to keep in mind is that the activities that are created should always be closed when the activity has been completed. A very powerful piece of evidence in defending E&O claims and lawsuits is to demonstrate that an activity was opened, handled and then closed when completed. Conversely, it can be very damaging for an agency to have activities within its agency 22

THE BIG “I” VIRGINIA • Spring 2013

management system that have never been followed up on; or if they have been followed up on, they have not been closed. Accordingly, every agency should make certain that all employees are creating, following up and then closing all activities within the agency management system. Voice Mail Messages and Disclaimers Voice mail messages are regularly left by customers on the voice mail system of agencies, asking questions on coverage, reporting claims and requesting changes in coverage. For this reason, it is recommended that a voice mail disclaimer be used on both the message for every employee and also on the main message for the agency. This disclaimer should state that coverage cannot be bound or modified, nor can a claim be reported, by use of the voice mail system. In addition, it is a good practice for an agency to consider adopting a procedure whereby voice-mail messages are retained either in the original recorded form or in written form. Some agency management systems are compatible with phone systems to allow a copy of voicemail messages to be attached to an insured’s electronic file. There are also programs that exist where you can have a written version of your voice mail messages sent to you by email and then retain that written version of the message. Disclaimers for E-mail, Websites and Social Media Sites In addition to a disclaimer on voice mail, it is also important for every agency to have similar disclaimers on their email transmissions, websites and social media sites. Some agencies advise us that they like to use email for their customers to report claims. For those agencies, the disclaimer might state as follows: “Please note that an email will not be effective to report a claim or request a coverage change until such time as you receive a confirmation from us that the claim submitted or change requested has been processed.” Additionally, some agencies have interactive websites that allow customers to report claims or request policy changes. A similar type of disclaimer should be used for those interactive websites as well. Where an agency or brokerage is utilizing a social media site like Facebook or Twitter, it should use a disclaimer similar to that mentioned above with the addition of advising that these vehicles should not be used to communicate client-specific information to the agency,

any content the customer provides becomes the property of the agency and the agency is at liberty to add, modify or delete any content that is not acceptable. Certificates of Insurance Certificates of insurance are still one of the largest sources of E&O claims and lawsuits. As such, it is important for every agency to have good documentation concerning how certificates were issued. The agency should be sure to retain, either in paper form or electronically, a copy of every certificate of insurance issued. While agency management systems will automatically save a copy of the certificates on the system, one problem we have encountered is that many of those systems will only print out the current date as opposed to the date the certificate was issued. Because of the importance of having an exact copy of the actual certificate issued (including the exact date it was issued), agents should make certain that if they are saving the copies of certificates electronically, that their agency management system will either: (a) print out the date that the certificate was actually issued when printed at a later date; or (b) scan a copy of the certificate that is actually issued by the system and maintain an electronic copy of it within the respective insured’s file. ACORD Forms It is equally important that every agency use the most current and up-to-date ACORD forms in connection with its daily operations. Doing so will help protect the agency from potential E&O claims and lawsuits and will often help better serve your customers. For example, the ACORD 80 Homeowners Application was revised in October 2009, but some agencies appear to still be using the earlier versions of the application. The new ACORD Homeowners Application now contains five pages and it is akin to a checklist of coverages and exposures, which is one of the best means to dispute a claim by a customer that coverages were never reviewed. Reviewing the completed application with customers will help protect the agency from claims that the agency did not review a particular type of coverage with the customer or ask about a certain exposure that may exist. Another form that is often not used in its most current version by agencies is the ACORD 25 Certificate of Insurance. The most recent version of the ACORD 25 is the May 2010 edition. As mentioned above, because certificates of insurance are involved in a great many E&O claims and lawsuits, it is of the utmost importance that agencies use the most recent version of the ACORD 25 Certificate of Insurance.

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Downloads and Uploads Another area to address is the agency’s uploading and downloading documents and information from the carriers with whom they do business. While we understand that uploading and downloading has become a major tool to increase agency efficiency, there are several points to keep in mind: 1. Confirm that your agency management system is not allowing your agency’s downloads to change the applications from insureds unless it creates a new version. 2. Downloads can greatly enhance the accuracy of the agency’s data, which is essential when counseling insureds, but it is important to audit these downloads regularly to make sure they are accurate and that the agency’s database contains good data overall. Critical to all of these recommendations is that the agency incorporate them into its written procedures, train its employees on them and require that they be followed, as well as audit the agency’s systems regularly to make sure the procedures are being followed. This overview is not meant to be an exhaustive list of potential E&O issues that you may face when you examine

THE BIG “I” VIRGINIA • Spring 2013

the electronic side of your business. Agencies should always keep in mind all of the other E&O risk management principles they have learned and how the technology they are using might impact them. Editor’s Note: Additional ACT articles on agency E&O and risk management issues are available on the ACT website, of particular interest is Creating a Social Web Policy for Your Independent Agency (comprehensive checklist); and ACT Prototype Agency Information Security Plan (tool to build your agency’s written information security plan). Both tools, along with many informative articles, can be found in Quick Links, the gray shaded box on the left, of the ACT home page, www. iiaba.net/act. This article was prepared for ACT by Jim Keidel, Chris Weldon and Darren Renner of Keidel, Weldon & Cunningham, LLP, a law firm with offices located in New York, Connecticut, New Jersey and Rhode Island, concentrating its practice in the defense of insurance agent and broker E&O claims and litigation, loss control and education as well as insurance coverage analysis and litigation and insurance regulatory matters for insurance agents and brokers. Contact Jim or Chris at 914-948-7000 or by email at jkeidel@kwcllp.com and cweldon@kwcllp.com . This article reflects the views of the authors and should not be construed as an official statement by ACT.

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50 Awesome

Social Media Ideas

for Insurance Agencies

ocial media is a good marketing tool when used wisely. Today’s agencies are creating interaction among fans while developing promotions that generate revenue. The following includes 50 marketing ideas that agencies can use with social media. 1. Be personable. If posts on social media are too sales-y, it will be difficult to get and engage with followers. To many consumers, a hard sell on social media is a turn off. Balance self-promotional posts with posts that are informational, posts that are personable and posts that are helpful. 2. Write regular posts at least once a week, but two to three times a week is even better. 3. Write social media posts on ideas for home improvement, car care and businesses tips. 4. Keep customers engaged. 5. Create fun contests for fans with Facebook. Give prizes, like a gift card, to winners. 6. Post a fact, story or comment relevant to a particular insurance product or market and end the post with a question. 7. Use blog posts to share content and drive traffic to the agency’s website (also helps with search engine optimization) and on social media profiles. 8. Sign up for Facebook, LinkedIn, Twitter, Google+, Pinterest and YouTube. 9. Like the page and write ‘I love ABC Agency’ on the Wall. 10. Give away a free car wash for every person who requests an auto insurance quote on Facebook or Twitter. 28

THE BIG “I” VIRGINIA • Spring 2013

11. Profile agency employees and post a photo of them. 12. Post information about community events and news. 13. Share pictures of the agency’s community involvement. 14. Incorporate what agency fans and followers say about the agency, owners or employees in social media in other marketing. For example, use positive reviews that people post on Facebook in direct or email marketing. 15. Identify the agency employee who is most passionate about social media and put that person in charge of the agency’s social media marketing. 16. Host live Twitter chats so people can ask questions and a dialogue is started. It doesn’t always have to be about insurance. Invite different subject matter experts to answer questions about a variety of topics. 17. Create boards for each line of business on Pinterest and pin pictures and articles about the topic. For example, if Agency ABC writes motorcycle and boat insurance, they might have a board for motorcycles and a board for boats. They could pin pictures of motorcycles, tips on taking care of a boat, great places for a motorcycle ride, etc.

Spring 2013 • THE BIG “I” VIRGINIA

18. Create boards on Pinterest for what the agency is all about. If it’s a family-oriented agency, share fun stuff and ideas for family activities, recipes for family dinners, etc. If it’s more business-oriented, pin inspiring business quotes, good books on business, technology for businesses, etc. 19. Promote the agency’s referral program. 20. Run a promotion to increase Facebook fans by donating a dollar to a local charity for every new fan on Facebook. 21. Use your mobile website to promote social media profiles. 22. Recognize a fan or follower of the week on the agency’s Facebook or Twitter profile as a way to say thank you.

34. Don’t just retweet and link to the work of others. 35. Employ a multi-tweet campaign to plant doubt in the minds of potential buyers. Begin each tweet off with the phrase “When was the last time your family [or business] insurance agent…” Then complete it with a positive action such as “… contacted you with a money-saving idea?” Include a link to a landing page on the agency’s site to convert the person’s doubt into a sales lead. 36. Buy an ad through Facebook that will go out on the agency’s network. 37. Don’t ask followers or friends for favors. 38. Keep postings fresh and timely.

23. When the agency gets a new follower on Twitter, @ the follower, and say thanks for the follow.

39. Be a participant via sharing, liking and voting; don’t just sit there.

24. Spend one hour a week looking for five articles to share. They can be about insurance, community news and events, general interest articles about the lines of business the agency writes, e.g., home improvement, car care tips, etc. Schedule the posts for each day of the week using a service like Hootsuite or Tweetdeck.

40. Have employees participate in the agency’s social media campaign.

25. Schedule posts for Saturday and Sunday and after hours. Just because the office is closed, doesn’t mean the agency’s followers aren’t reading social media.

41. Include social media addresses on business cards and email signatures. 42. Target “influencers” including editors, bloggers, consultants and PR pros in the agency’s target markets. 43. Use Google to identify major trends in the agency’s target markets and tailor comments and questions to those trends.

26. Start a community group on LinkedIn and every day suggest topics for discussion.

44. Ask for recommendations from LinkedIn contacts to some of their contacts.

27. Talk about events and holidays and share articles or information that discusses risks associated with those.

45. Avoid number envy — the quality of contacts is more important than the number of contacts.

28. Post information on education and training events for a particular industry. They do not have to be related to insurance but could be geared toward the agency’s specialty business. 29. Create polls and surveys for followers and fans on current events, community news, industry trends and customer service. 30. Post videos and audio periodically on an agency blog, YouTube, Facebook, and agency website. 31. Display the social media channel links on the agency’s website. 32. Integrate the agency’s Twitter account with its LinkedIn account. Find out how in the LinkedIn Learning Center. 30

33. Create a schedule for checking social media and content posting; don’t leave it unscheduled.

THE BIG “I” VIRGINIA • Spring 2013

46. Create and share holiday cards with social media contacts. 47. Don’t be negative or defensive on responding; stay positive. 48. Keep up with changes in social media platforms. 49. Make the agency’s Facebook wall different. Focus on the visual by attaching videos, colorful large print flyers on various insurance topics (formatted as pictures), creative postings designed to elicit comments from fans, such as “Hit Our Facebook Wall with the Cause of Your Worst Car Accident” and other interesting, visual content. 50. Let customers say whatever they want.

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2013 Compensation Trends –

News Your Business Can Use By Susan Palé, Executive Consultant, Affinity HR Group

2012

is quickly drawing to a close. As we said this time last year, there has been no remarkable economic recovery for most businesses. And once again, many top economists predict that little will change in 2013. If this sounds like Déjà vu all over again (thanks, Yogi Berra), in many ways it is. And if your business results this year have been less than stellar, you may be tempted to put your compensation planning on the back burner. But it’s more important than ever to focus time and attention on employee compensation. Why? In order to plan for future growth, retain your best talent, and spend your compensation dollars wisely. So as you begin your 2013 compensation planning, here are some issues and trends to be aware of: 2013 Salary Budget Projections Early 2013 salary budget projections forecast pay raises of 2.9 percent - 3.0 percent for all employee groups across industries. These figures represent a slight increase from 2012, but still remain much lower than the four percent – five percent budgets of the early 2000’s. These smaller forecasts are particularly challenging for employers using a merit-based pay system that attempts to recognize and meaningfully reward differing levels of performance. If you’re attempting to keep your salary expenditures to a pre-set budget amount of three percent, the majority of employee increases will fall between two percent and four percent - not a 32

THE BIG “I” VIRGINIA • Spring 2013

big difference, especially for lower-paid employees. And chances are health insurance premiums for most employees will increase by more than that next year. (A recent Pricewaterhouse Coopers survey projects average 2013 increases of 7.5%.) Salary Freezes A piece of good news for most employees is that only about two percent of organizations are expected to freeze salaries in 2013. That’s down from 4.6 percent in 2012 and five percent in 2011 – and down a lot from 21 percent in 2010 and 48 percent in 2009. If your organization has frozen salaries in one or more of the past few years, there may be significant “catching up” to do, both in terms of noncompetitive individual salaries and outdated salary structures. Growth of Incentive/Bonus Plans The number of organizations using variable, performancebased pay programs continues to rise and includes companies of all sizes across industries. Ninety percent of companies responding to a 2012 survey conducted by the human resource consulting firm Aon Hewitt reported using at least one such pay program. In addition, respondents reported spending a higher percentage of total payroll costs (12 percent) on these programs than in previous years. The growth of these types of programs reflects the need for organizations to better manage limited compensation dollars by emphasizing

performance-based rewards for top performers rather than focusing on base pay increases for all workers. Incentive Plans for Customer Service Representatives Sales incentive plans have been used to reward sales professionals for decades. Recently, companies have begun to include customer service professionals as participants in their sales incentive plans. As product and service offerings become more diverse and complex, successful selling in many organizations becomes a team effort rather than a task accomplished exclusively by the sales representatives. Increasingly, Customer Service Representatives perform cross selling and product/servicing marketing tasks as part of their regular interaction with both existing and potential customers. The U.S. Department of Labor identifies Customer Service Representatives as among the occupations with the most potential job growth for the period 2010 – 2020. Customer service positions are forecast to increase by 15.5 percent during this decade. The increased demand for individuals with customer service skills will challenge the print and print services industries to create innovative compensation plans to aid in the successful recruitment and retention of top level customer service talent. Changing Role of the Sales Representative In many organizations the Sales Representative is increasingly responsible for business/account development activities. Identifying new markets and developing relationships with prospective customers places the Sales Representative in a role that often involves having less direct influence over customer buying decisions and may also require time commitments that significantly lengthen/alter the sales cycle from the organization’s typical sales cycle. Sales Representatives working on a commissiononly basis often suffer financially when asked to assume this new role. For this reason, some organizations have chosen to replace their commission-only plans with new salary-plus-commission plans that better support these changing roles and sales cycles. Bottom line – it’s time to do some compensation planning to prepare for 2013 and beyond. Taking some positive steps now can provide your organization and your employees with benefits for many years to come. Susan Palé is an executive consultant with Affinity HR Group, LLC, IIAV’s affiliated human resources partner. Affinity HR Group specializes in providing human resources assistance to associations such as IIAV and their member companies. To learn more, visit www. affinityHRgroup.com.

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File Documentation & Records Retention Good Documentation: The Best Way to Protect Your Agency

hether your agency operates in a totally automated environment, is still paperbased, or exists anywhere in between, file documentation is rule number one when it comes to protecting against errors and omissions losses. Claims adjusters and defense attorneys who handle agency E&O claims all agree—there is no such thing as an over-documented file. Many E&O claims result in a version of “he said, she said” when it comes to reconstructing the conversations that took place, often many years before. No one can perfectly recall exactly what took place when handling a customer transaction, and unfortunately, in a court of law the buyer is much more likely to be believed than the seller. It goes without saying that each and every step in the process must be documented in the customer’s file, whether electronic or paper. The file needs to tell the story of what transpired, with sufficient detail provided that anyone in the agency can read it and clearly see what took place. As is often the case, when an agency is involved in an E&O situation, not every person who was involved is still with the agency. Record-keeping is vital to defending oneself from a claim that something was done improperly or not at all. What Constitutes Proper Documentation? Every conversation with a prospect, customer, underwriter or other insurance company staff member, or third party (such as a person who requests a certificate of insurance or a vendor with whom the insured does business) must be recorded in the customer file. It is important to specify who initiated 34

THE BIG “I” VIRGINIA • Spring 2013

the call, what was the substance of the conversation, what action is to be taken, and what the next steps, if any, would be. Letters, faxes, and emails are less problematic from a documentation standpoint, because they actually exist and are in the words of the person who created them. They must, however be attached to the proper customer file. Form letters, ACORD forms, and other items created in an automated system will generally attach automatically to the customer’s electronic file at the conclusion of the transaction. Who Should Document Files? The simple and obvious answer is that the person who had the conversation should be the one who documents the file. However, this is not always practical. Producers spend a large percentage of time outside the office, and may not have ready access to the agency’s paper files or agency management system. Files need to be updated immediately, so that anyone speaking with the customer is working with the latest information. If there is going to be a delay before a producer can document a file, the information must be immediately transmitted to the CSR via telephone, fax, or email to retain the integrity of the agency’s file. The best course of action would be for the producer not to have the conversation in the first place, and to simply advise the insured to call the CSR directly. This does not always happen, however, so a process must exist whereby the producer transfers the information obtained in the conversation at the earliest possible time.

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Four Tips for

GETTING THROUGH and TALKING TO THE PROSPECT We’re not telling you to deceive the receptionist and tell her you know the prospect when you don’t. A significant portion of communication is “how” you say something, if you simply ask for the prospect as if you’re a friend, you’ll find that many times the receptionist will hear that in your voice and put you through.

By John Chapin

ne of the most frustrating aspects of selling is having a great list of potential leads and then being unable to actually get through to and talk to those people. It may be a receptionist with bulletproof teeth, the person you never seem to be able to get on the phone after the initial contact or that won’t get back to you, that no soliciting sign, or that nagging question: How do I continue to chase this person without being a pest or seeming desperate? Here we’ll look at the quickest ways to get past these obstacles and talk to the prospect. Four Ideas for Getting Through to the Prospect 1) Getting past the receptionist Probably the most common roadblock to the prospect is the receptionist. In order to get around the receptionist, employ the following techniques: a) Speak as if you know the prospect. Imagine calling a friend at work, how would you ask for your friend? If the receptionist asked who was calling, what would you say and how would you say it? Use that “friend” mindset when calling. When you encounter the receptionist, say, “Hi, is (prospect’s first name) there?”, in a friendly and upbeat tone. When she asks who’s calling, say, “Yeah, (your name).” If she asks what company you’re with, say, “Um, (the name of your company).” And say the company name in a questioning tone of voice, as if the company name is not of any significance. 36

THE BIG “I” VIRGINIA • Spring 2013

b) Call or stop by when the receptionist isn’t there. Most receptionists are there between 8 a.m. and 5 p.m.; simply call or stop by before 8 or after 5. c) Get referred to the prospect. Mentioning a friend or business associate that referred you to the prospect will usually get you through the receptionist. d) Send a letter, e-mail, or fax and follow up with a phone call or send any of these and request a meeting with the prospect. 2) No-pest multi-contact prospecting to make initial contact with the prospect If you are targeting specific prospects, you need to reach out to them 7 to 10 times before you give up and move on. You can’t expect people to get back to you after one, two, or even more contacts. Start with a phone call and send a follow-up e-mail or letter immediately. Call again and send out another letter or e-mail a week later. Repeat this the following week. After your third call and letter, stop by in person. If an in-person visit isn’t feasible, make a fourth call a week after the third call and letter. Finally, finish with a “last-chance-to-get-backto-you” phone call. Also, be pleasant and conversational in all your communication, as if you are talking to a close friend or family member. 3) How to handle No Soliciting Signs If calling in person and you run into a No Soliciting sign,

ignore it. Occasionally, someone will refer to the sign, but you’ll find that most people won’t. If they do, simply state the purpose of your call. For example, say, “Oh, I’m sorry. My name is (your name) with (your company), I was just hoping to catch (prospect’s name) for a moment.” If they persist, say, “I’m not selling anything. I was simply hoping to introduce myself to (the prospect).” If they continue to stick to their guns, say thank you and leave. You can call on the phone later and try to set up an appointment or call before or after the receptionist is in. Obviously the one sure way to avoid all No Soliciting signs is to call people on the phone instead of in person.

KNOWLEDGE COMES FROM EXPERIENCE

“I go the distance on my bike— just like my 30-year journey with J.M. Wilson. I lead a great team of managers and underwriters that work hard to help our agents be successful.”

4) You’ve reached the prospect the first time, but can’t get them back on the phone. If you got to someone once, but can’t seem to be able to catch them again, try these techniques: a) Try contacting them at different times during the day. Most people have a time during the day when it is best to reach them, whether it’s first thing in the morning, at lunch, later in the day, or after normal business hours. Simply try at these different times. You can also make a note after the first call as to what time of the day you initially reached them. b) Ask when the best time to reach them is. Either ask the prospect on the first call or ask the receptionist on a followup call. c) Make a follow-up appointment the first time you talk to them. At the end of the first call, get on their schedule for the follow-up call. d) If you’ve been calling on the phone, stop by in person. e) Call every hour until you reach the prospect. This is a technique you will use sporadically for the hard-to-reach hot prospect. Make sure you’re calling from a blocked or unknown number and don’t leave any messages. Have a sales question? E-mail John at johnchapin@ completeselling.com. If you would like access to John’s free white paper on what it takes to be successful in sales, along with a monthly newsletter, you can visit his website at www. completeselling.com. John Chapin’s specialty is helping salespeople and sales teams double sales in 12 months. He is an award-winning sales speaker, trainer and coach, a number one sales rep in three industries, and the primary author of the gold-medal winning “Sales Encyclopedia”. In his 24 years of sales, customer service and management experience, he has sold in some of the toughest markets and economies.

Sandi Fritz, CIC Vice President, Underwriting and Branches— and fixture on the bike trail Connect with Sandi on LinkedIn!

Managing General Agency Since 1920 For permission to reprint, or to reach John, email him at johnchapin@completeselling.com John Chapin Complete Selling, Inc. Helping you find and get all the business you want Cell: 508-243-7359 johnchapin@completeselling.com www.completeselling.com

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Spring 2013 • THE BIG “I” VIRGINIA

THE BIG “I” VIRGINIA • Spring 2013

IIAV Education Checklist Check off the courses that interest you and check them out at www.iiav.com h h h h h h h h h h h h h h

AAI—Accredited Advisor in Insurance ACSR—Accredited Customer Service Representative AIAM—Associate in Insurance Account Management AISM—Associate in Insurance Supervisory Management AFIS—Agribusiness and Farm Insurance Specialist CRIS—Certified Risk & Insurance Specialist Ethics Classes Errors & Omissions Courses In-House Classes Laws & Regs Classes MLIS— Management Liability Insurance Specialist Pre-Licensing Classes Virtual University—Online Self-Study Webinars

Independent Insurance Agents of Virginia has a variety of offerings to meet your educational needs. If you are interested in a topic you do not see, let us know. We are here to help you be the best you can be when it comes to insurance knowledge.

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a Agency Records Retention Guidelines

Swiss ReSwiss offers these retention guidelines forcommon records common agencies. Re offers these retention guidelines for records to most agencies. to Theymost are grouped into four areas: Corporate/Partnership, They are grouped into four areas: Corporate/Partnership, Real Estate, Financial, Tax, Real Estate, Financial, Tax, Correspondence, Personnel, Agency/Company Files, Client Record Files, Licensing/ Legal, Electronic Data, Y2K Agency Records Retention Guidelines Correspondence, Personnel, Agency/Company Files, Client Record Files, Licensing/ Records, and Miscellaneous Records. Legal, Electronic Data,analysis Y2K Records, Miscellaneous Records. Although thorough has gone into and the preparation of this document, the retention periods are not offered as final authority but as a guideline. Statutes of limitations for your state as well as regulations of government agencies pertaining to your business must be considered Swiss Regone offers these retention guidelines forthat records most agencies. and discussed withanalysis your attorney. Permanent records represent the minimum documentation shouldthe becommon preserved in to order to document the Although thorough has into the preparation of this document, They are into four areas: RealofEstate, Financial, agency and its activities. Terminated andgrouped dissolved (and records deceased individuals) may beof disposed after seven years. When Tax, retention periods are not offered as final businesses authority but as aofCorporate/Partnership, guideline. Statutes Personnel, Agency/Company Client to Record Files, Licensing/ at all possible, be conservative. limitations for your stateCorrespondence, as well as regulations of government agenciesFiles, pertaining

Legal, Electronic Data, Y2K Records, and Miscellaneous your business must be considered and discussed with your attorney. PermanentRecords. Thethe following abbreviations have been used in that conjunction with retention periods: in order to records represent minimum documentation should be preserved P = Permanent WY = Work Years AC = After Calendar Year Reported Although thorough analysis has gone into preparation document the agency and its activities. Terminated and dissolved the businesses (andof this document, the S = Until Superseded may = After Termoffered afteras AP = After Pay-OffWhen retention periods are not final authority but at as all a guideline. Statutes of records of deceased individuals) beATdisposed of seven years. limitations for your state as well as regulations of government agencies pertaining to possible, be conservative. Electronic Record Retention Tips: must be considered and discussed with your attorney. Permanent your business • Develop a standard naming convention forin electronic records, and haveretention everyone inthat your agency usebe it. preserved in order to records the minimum documentation should The following abbreviations haverepresent been used conjunction with periods: • Retain and document dispose of electronic records according to the agency’s records retention policies. the agency and its activities. Terminated and dissolved businesses (and records on a regular basis (at least once a week) and store the back-up copies seven off site. years. When at all P = Permanent• Back up electronic WY = Work Years AC = After Calendar Year Reported records of deceased individuals) may be disposed of after • If your agency is=onAfter a Local Area Network, AP back=upAfter hard driver to the network server. S = Until Superseded AT Term Pay-Off possible, be conservative. •

Migrate all records (including those stored on floppy diskettes) when hardware or software is upgraded.

The following Type of Record Electronic Record Retention Tips:

abbreviations have been used in conjunction with retention periods: Retention Comments

P = Permanent Corporate/Partnership: S = Until Superseded

Period

WY = Work Years AT = After Term

AC = After Calendar Year Reported AP = After Pay-Off

Develop a standard naming convention for electronic records, and have of use Incorporation P In most states, all corporate records must everyone in yourArticles agency it. Minutes of Directors and P maintained in either written form or Retain and dispose of electronic records according tobethe agency’s records Stockholders Meetings another form capable of conversion into Electronic Record Retention Tips: retention policies. By-Laws, Charter P written form within a reasonable time, Back up electronic records on a regular basis (at once a week) disks and or store Annual Reports P leastsuch as computer other Develop a standard naming convention for electronic records, and have Buy/Sell Agreements S electronic storage media, microfilm or the back-up copies off site. Capital Stock Ledger P microfiche. everyone in your agency use it. driver to the network If your agency is on a Local Area Network, back up hard Election Records Pelectronic records according to the agency’s records Retain and dispose of server. Stock Certificates (canceled) 10 retention policies. Migrate all records (including those stored on Pfloppy diskettes) when hardware Stock Transfer Records Back up electronic records on a regular basis (at least once a week) and store Fixed Asset Purchases P or software is upgraded. Partnership Agreement the back-up copies offPsite. Contracts P If your agency is on a Local Area Network, back up hard driver to the network The material contained herein server. is for informational purposes only and is not intended as legal or other professional Please procure the appropriate legal otherdiskettes) when hardware advice. Migrate all records (including those stored onor floppy Real Estate: professional advice and services to address individual needs and circumstances. or software is your upgraded.

Swiss Re 7/08

Purchase, Lease Agreements P Most records pertaining to the Property Deeds P acquisition, disposition or use of real Depreciation Schedules P should be purposes retained as only permanent The material contained herein is forproperty informational and is not intended Blueprints and Plans P records. as legal or other professional advice. Please procure the appropriate legal or other Appraisals by outside professional advice and services to address your individual needs and circumstances. appraisers P 1 Bills of Sale P Construction, Appraisals, Improvements P

The material contained herein is for informational purposes only and is not intended as legal or other professional advice. Please procure the appropriate legal Swiss 7/08 or other professional advice andRe services to address your individual needs and circumstances.

(Continued on page 42)

THE BIG “I” VIRGINIA • Spring 2013

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Spring 2013 • THE BIG “I” VIRGINIA

a Type of Record

Retention Period

Comments

Financial: Bank Records Bank Statements Canceled Checks Check Registers Bank Reconciliations Bank Deposits Cash Receipt Records Balance Sheets Cost Accounting Records Accounts Receivable Ledgers/Schedules Accounts Payable Ledgers/ Schedules Business Expense Reports Income/Commission Records Financial Statements Copies of Promissory Notes Accountants Audit Reports Audit Working Papers Financial Statements, Certified Petty Cash Register Profit & Loss Statements

3-5 3-8 P 3-5 3-5 7 P 5 P

From later of tax return due date or filing date

P 3-5 3-5 P AP + 5 P 3 P 3 3

Tax: W-2s, W-2Ps, W-4s, 1099s Payroll Records, Summaries Federal, State & Local Tax Returns

Financial records are typically kept for 3-5 years. You might consider retaining such records through 2010, in case they are needed in Y2K-related claims or litigation.

WY + 4 7 P

For taxpayers who retain accounting records on a computer system, to satisfy IRS Rev. Proc. 91-59, taxpayers must retain their records in a computerized format and be able to be process those records at the time of an IRS examination.

Correspondence: General (with Clients, Insurers, Third Parties) Transitory Legal & Important Matters Interoffice Correspondence

Swiss Re 7/08 THE BIG “I” VIRGINIA • Spring 2013

3 30 days P 3

How long you keep copies or correspondence depends on the nature of such correspondence and your agency’s “comfort” factor.

a Type of Record

Retention Period

Comments

Personnel: ADA Complaints Formal Discipline Actions/ Documentation (including written warnings, suspension notices, disciplinary demotions, discharges) Exit Interviews Family Medical Leave Notice of Rights Leave Requests (not on time sheet), including Sick Leave, Disability & Maternity, Disaster & Emergency, Military, Jury Duty, Holidays, Leaves of Absence without Pay, Compensatory Time Off Policy Statements Procedure Manuals Benefit, Pension, ProfitSharing, Group Ins. Plans Employee Contracts Employee Records (including Reviews, Attendance Records, Termination) Compensation Structures Job Descriptions Employment Applications. Resumes (Not Hired) Employment Applications (Hired) Employee Testing Employee Training Employee Medical Records Wage and Hour Records Withholding Tax Statements OSHA Records Health & Safety Bulletins Time Cards

Swiss Re 7/08

AC + 10

The EEOC is suspicious of any employer who fails to create and maintain detailed personnel records.

WY + 7 WY + 7 WY + 7

WY + 7 P P P AT + 7

In any litigation involving an employee in a class protected by federal and state employment laws, an agency often must justify its actions by establishing that the organization’s policies were violated. Without written policies, manuals, and personnel records, a court usually sides with the employee..

AT + 6 S+1 S+3 S 1-3 WY + 6 3 1 WY + 7 4 7 AC + 5 S 3

Medical Records include Disability Documentation, Medical Exams, Inquiries about Medical Conditions, Handicap Status Certification

Spring 2013 • THE BIG “I” VIRGINIA 4

a Type of Record

Retention Period

Comments

Agency/Company Files: Agency Contracts Contingency Agreements Initial Letter of Appointment Underwriting Guidelines (including Prohibited Lists)

P P P

In a dispute between an agency and a carrier, the agency’s defense is often dependent on proper file documentation of the agency’s authority.

S+3

Client Record Files: Agent of Record Letters Applications (expired) Appraisals Binders Client, Data Sheets (Lost Accounts) Claim Reports (Closed) Expiration Slips/Policies not Taken Loss Drafts Coverage Recommendations Survey Reports Client Files (Personal LinesClosed) Client Files (Commercial Lines-Closed)

P 3 S 3 3 3

Our recommended retention period is longer for commercial lines accounts than for personal lines, due to the potential for tail coverage, occurrence policies, and product liability coverages. E&O claims arising out of such coverages may take longer to surface than claims based on personal lines policies.

3 P S+3 S+3 3 5

Licensing/Legal: Producer Licenses Agency Licenses Revoked, Suspended, or Voluntarily Surrendered Licenses Compliance Reporting DOI Complaints/ Investigative Reports DOI Hearings/License Legal Actions Producer Agreements 44

THE BIG “I” VIRGINIA • Spring 2013

Swiss Re 7/08

WY + 10 P WY + 10 7 5 10 WY + 6

If litigation, hearings, or audits are started before the recommended retention period ends, the records must be retained until final action is taken.

a Type of Record

Retention Period

Electronic Data:

Generally, records generated by computer systems have the same retention periods as records in other formats that are related to the same function or activity.

Email: Agendas, Minutes of Meetings Policies and Directives Communications Relating to Agency Business Work Schedules, Assignments Any document that Initiates, Authorizes or Completes a Business Transaction Drafts of Documents that are Circulated for Comment or Approval Final Reports or Recommendations

P p

Email includes sender/receiver identification, time and date sent and received, and compete message.

7 2 7

7 7

Transactional Filings: Personal Lines Commercial Lines

Comments

Retain for same length of time as required for paper forms of similar documents. 3 5

Y2K Records: Notices, Warnings to Clients Correspondence to/from Carriers/Clients Unpaid Losses, Claims Y2K Warranties, Disclaimers

Type of Record

Through 2010

Retention Period

While litigation out of the Year 2000 problems has not arisen as expected, an E&O claim potential does still exist. Therefore, an agency’s defense will largely turn on Y2K-related documentation. Be sure to preserve as Comments much as possible.

Miscellaneous: Agency Publications Newsletters Brochures Bulletins to Staff, Clients, Accident Reports - Closed (relating to agency loss Swiss Re 7/08 or personnel injuries) Agency Insurance Policies (expired)

1-3 1-3 1-3 3-7

Screen annually and destroy that material for which no further reference is required. Remaining material having continuing administrative or legal value should be kept at least 3 years. 6

1-3 Spring 2013 • THE BIG “I” VIRGINIA

THE BIG “I” VIRGINIA • Spring 2013

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