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January - February CA INSURANCE COMMISSIONER JONES ISSUES STATEMENT ON TRUMP AFFORDABLE CARE ACT EXECUTIVE ORDER

LOOKING FORWARD TO BIG’S 2017 CONVENTION! DOES YOUR COMPANY NEED A SERVICE OVERHAUL? Eight "Red Flags" that demand action

VALENTINE'S DAY FUN FACTS


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January/February 2017


by Jon Spaugy, BIG CEO

LET’S HAVE A GREAT 2017 By Jon Spaugy, BIG CEO Welcome to the latter part of the “twenty-teens,” my friends. 2017 brings us quite of bit of promise or ominousness to Washington, DC, depending on your political preference. Either way, we are in for quite a ride this year. Same with our industry. There are a lot of changes in the offing, and we all need to be ready to react proactively and positively. Each New Year brings new opportunities. We only need to keep our eyes and ears open. It amazes me that we are 17 years removed from the year 2000. Remember the “Y2K” scare when experts predicted airliners would fall from the sky, our banking system was going to be brought to its knees, and convicts would be set free due to computer errors?. Of course, none of the doomsday predictions came true and we’ve been slogging along ever since.

Of course, a great way of developing that expertise is through professional development, talking with colleagues, and keeping abreast of the latest insurance products. This makes going to the upcoming BIG convention May 4th – 7th a no-brainer. Check out the convention article in this issue to see what is being offered. Plan your strategy so you can take advantage of the full agenda and make the most of your convention experience. Then visit www.BIGInsUSA.com and register. The bottom line is not to make too much about what the doom and gloom crowd is saying. Let’s face it, they are wrong most of the time anyway. We need to be as prepared as possible to face whatever challenges are ahead. We can neither be scared little bunnies nor blustering fools. Stay grounded in reality and keep your eyes on the prize.

With the insurance industry, the same kind of naysayers are chronically predicting the demise of the independent agent. We’ve heard about insurance aggregators and direct writers pushing Main Street agencies off the map. Automation and insurance kiosks will make human interaction obsolete. Dealerships offering auto insurance with every vehicle sale. Pay at the pump virtually eliminating the need to pay for insurance. The list is long and deep. But independent producers have not just persevered, but prospered. Because no matter how much impersonal our technology grows, customers still need the human touch. They can search the internet all they want, but nothing can take the place of a “friend in the business” explaining the intricacies of different insurance coverages, and providing expert advice on which are needed and which are not.

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Get Active, Get Involved, Get BIG!​


Sidebar with

Harper & Heim Lawyers

By Jon S. Heim, Attorney at Law

TRADE SECRETS IN CALIFORNIA INSURANCE PRODUCTION In our last Sidebar, we addressed California’s uniquely jaded perspective on contractual restraints against competition. This month we look at the type of competitive restraint that is practicable and enforceable in our state: trade secret protection. Trade secret law sounds in tort rather than contract. In California, trade secret law has been codified in a statute, the Uniform Trade Secrets Act (UTSA), California Civil Code sections 3426 thorough 3426.11. Under this act, a trade secret is anything which derives economic value from being unknown to the public at large or to others who may gain economic value from its use, and which is the subject of reasonable efforts to protect its secrecy. (Civ. Code, § 3426.1, subd. (d).) Under the UTSA as well as under prior common law, insurance expiration dates and insurance customer lists are generally trade secrets. (American Credit Indemnity Co. v. Sacks (1989) 213 Cal. App.3d 622, 630-632.) It is a tort to steal and use (or in the UTSA’s words to “misappropriate”) a trade secret. Misappropriation of trade secrets can be enjoined, or redressed in damages or royalties. (Civ. Code, §§ 3426.2, subds. (a), (b), 3426.3, subd. (b).) If the misappropriation is willful, punitive damages and attorney fees may be awarded. (Civ. Code, §§ 3426.3, subd. (c), 3426.4.) Something that is known or readily ascertainable cannot be a trade secret. So, for example, if you sell commercial insurance to known or easily identifiable indus-

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trial firms, a list of your customers, by itself, would not constitute a protectable trade secret. (American Paper & Packaging Products, Inc. v. Kiergan (1990) 183 Cal. App.3d 1318, 1326.) On the other hand, auto insurance expiration dates and customer lists are not known or easily ascertainable to anyone. Such information is usually protectable as a trade secret. Information is or is not a trade secret regardless of whether an employment or other contract characterizes the information as trade secret. Generally, trade secrets are characterized and protected as such by operation of law, independent of and even without any contract so specifying. At Harper & Heim, Lawyers, we see many contracts which purport to define or characterize trade secrets. Frankly we pay little attention to such clauses. Whether something is trade secret depends primarily if not exclusively on circumstances rather than contractual recitals. As the Court of Appeal reasoned long before the UTSA was enacted, “The essence of the protected interest is the trade secret or trust. The contract of the parties is not decisive in establishing the interest; the contract cannot make a trade secret out of a situation where none exists; the interest itself as developed from the accepted relationship of the parties must be determinative.” (State Farm Mut. etc. Auto Ins. Co. v. Dempster (1959) 174 Cal.App.2d 418, 426.) In light of the severe limitations on contractual competitive restraints in California, trade secret law is the best if not only protection insurance production employers have against raiding of their books of business by former employees. As we discussed here last year, employers generally cannot enforce non-competition agreements in this state. However any California court will protect against or redress misappropriation of trade secrets, if it is proven. There are a few obstacles and limitations, of course. For one, misappropriation of trade secrets must be indeed be proven, ideally without disturbing the clients in play. Often that’s not easy. Writings are the best proof. If a client gives you a former employee’s solicitation to purchase insurance written, say, 30 or 60 days before renewal, you reasonably may infer misappropriation of


customer lists and expiration dates, all typically trade secrets. If you prefer not to depend on client alerts, try “salting” your customer lists with a few names of relatives or friends, whether or not they are your insurance clients. You might be surprised and intrigued by some of the mail and email your “clients” receive. Another limitation on trade secret protection is the common law right of announcement of new employment. In California, a former employee has a right to announce a new job or affiliation without soliciting business, even if he or she uses a customer list. (Aetna Bldg. Maintenance Co. v. West (1952) 39 Cal.2d 198, 202-204; American Credit Indemnity Co. v. Sacks , supra, 213 Cal.App.3d 622, 634-636.) Lawyers call such an effort a “tombstone announcement”. It must indeed be blunt and bland: no advertising, no solicitation, and no description of new products or services. But if it is a mere announcement and it is sent after termination of employment, it is likely lawful. And it can be effective. If a client contacts the former employee in response to the tombstone an-

nouncement, the employee may solicit that client or sell to that client, provided no trade secrets are used and no misrepresentations are made. At that point, the former employee heeds no trade secrets, as he or she can merely ask the client for expiration dates. In view of the tombstone announcement loophole, trade secret protection is an imperfect safeguard of established goodwill in the insurance production industry. But it’s the best protection California employers have. Take every reasonable step to protect and monitor your customer lists and expiration dates. If you think they have been stolen or compromised, contact your lawyer or our law firm right away. You worked hard and spent much to compile your customer lists and to establish your goodwill. Do whatever California law allows to protect them. Call Jon Stanley Heim at (510) 725-7593, or e-mail him at jshinslaw@gmail.com or harperandheim@gmail.com. ​

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CA Insurance Commissioner Jones wins major battle against insurance industry as supreme court affirms his regulatory authority CDI press release I​n a sweeping victory for consumers, Insurance Commissioner Dave Jones recently announced the California Supreme Court, in a 7-0 decision, affirmed his authority against a major insurance industry legal challenge. Rejecting the insurance industry’s arguments, the Supreme Court ruled the insurance commissioner has broad discretion to adopt rules and regulations as necessary to promote the public welfare. The insurance industry lost their challenge to Jones’ consumer protection regulations that require insurers replacement cost estimates actually reflect the complete cost of rebuilding a policyholder’s home after a fire. “We have won an important victory for California consumers over the insurance industry with the Supreme Court’s decision today upholding our consumer protection regulation,” said Insurance Commissioner Dave Jones. “The Supreme Court rejected the insurance industry’s effort to strike down the department’s regulation, which protects consumers from misleading insurer estimates of home replacement costs, which left homeowners without adequate coverage or ability to rebuild their homes after fires.”

unaware they were underinsured, and many could not rebuild after fires destroyed their homes. The insurance industry, led by the Association of California Insurance Companies and the Personal Insurance Federation of California, used its lawsuit challenging the regulation to challenge the Insurance commissioner’s authority to adopt regulations that protect consumers from insurers’ unfair and misleading practices. While the insurance industry did not argue insurers would have difficulty complying with the regulation, or that the general rule requiring all insurers’ replacement-cost estimates include all costs necessary to replace a home is a bad idea, the industry argued that the regulation was overreaching by the commissioner. T​he Supreme Court rejected the challenge and affirmed the commissioner has broad authority under the Unfair Insurance Practices Act to adopt regulations prohibiting insurers from unfair practices, like misleading consumers into believing they have replacement-cost insurance coverage that is not intended to cover all costs of replacement.

“Climate change, years of drought, and more devastating wildfires have changed the landscape of California and led to a year-round fire season. This regulation offers homeowners peace of mind, should disaster strike,” Jones added. The regulations were needed because insurance companies were misleading consumers by giving them incomplete home replacement cost estimates, sometimes by removing key components from the actual estimates they calculated, in order to undercut competitors with lower premium. The practice unfairly left consumers who relied on their insurers’ estimates

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Dave Jones


USING PICTURES WITHOUT COPYRIGHTS ON YOUR WEBSITE

​By Andree Ochoa There’s no doubt that the use of images and video without copyrights in your website is a matter of importance. I’d known many website/business owners that have had strong legal issues regarding the use of copyrighted material. The use of copyrighted videos and images can bring you losses of large amounts of money in legal settlements, so it’s always better to use pictures and/or videos of public domain or free stock photos. There are many websites on the internet that can give you stock photos for free with some usage license or common rights. However the best way to get pictures is to take your own, yes! Taking your own pictures is the best way to go, now a days with technology and smartphones taking pictures for your website is pretty easy. Almost any smartphone now can take great pictures that you can use in your e-commerce or company/business website. Think about it, if you’re a socially active person sharing pictures, sharing videos, comments, or other social activity you are most likely already taking a lot of pictures you can use on your websites or publications. Taking pictures of objects while you’re on the road, traveling, or in your own city could be the best way for you to acquire the pictures you need and the best is that you will hold the authorship of the pictures leaving you out of all legal issues. It’s just a matter of making it a daily task to take pictures, and soon enough you will have more pictures than you can handle to use in your websites or blogs. Hope you liked the article and as always please visit andreeochoa.com for more related articles or send me your questions to info@andreeochoa.com I’ll be more than happy to answer them or write about them.​

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Rolando Recinos, Jr.

Vice president, S&R Insurance Group

By Don Lukenbill At the very heart of the insurance industry are the men and women who make up the independent agency workforce. Without these dedicated insurance professionals, most transactions would not occur. BIG is proud to count as a majority of its supporters leading insurance companies and producers utilizing the independent agency distribution network.

BTM: S&R offers a large variety of coverages and markets to its customers. What advice would you give to someone with a primarily auto/homeowners book of business looking to expand?

It is our pleasure to introduce Rolando Recinos, Jr.:

RR: My advice is simple: Diversify your book of business as much as possible. The days of offering just auto and homeowners are over. At the very least, successful agencies will combine life and other lines of insurance. At S&R, we target commercial businesses and their employees. This helps us to round out our accounts and maintain a high retention rate. We pride ourselves on being our clients “forever agents.” With the number of carriers we can write at our agency, there are plenty of options our clients are looking for at the competitive rates they want.

BIG TIMES MAGAZINE: Let’s start out with a little background on you. What was your first connection to the insurance business?

BTM: What are your thoughts about offering non-insurance products and services (DMV registration, notary public, utility payments, etc.)?

ROLANDO RECINOS: I started my insurance career in 2001 when I went to work for a small nonstandard insurance agency named Speedway Insurance Services. The agency later changed its name to West Coast Auto Insurance. Soon after, I obtained my fire and casualty license and quickly learned the business.

RR: Offering clients a wide array of products certainly can contribute to their staying with your agency for a longer period of time. I don’t find anything wrong with people offering other products, such as DMV services, etc. But make sure the focus is still on your core insurance business. Be careful with becoming a jack of all trades but a master of none. While some agencies do well with offering other services, and it has become part of their business model, remember that you are an insurance agency first and foremost.

Like many independent agents and brokers, Rolando Recinos, Jr. started working in a nonstandard agency. Also as with most success stories, he quickly moved up the agency ladder into a management position, followed by opening his own agency. He is now vice president of S&R Insurance Group in Rancho Cucamonga, CA.

Finding an aptitude and interest for the business, I quickly advanced from sales agent and nine months later, I was managing the office I opened for West Coast Insurance. It was at this point I knew insurance would be my career. That first office I opened became a success, and West Coast brought me to San Diego where I continued to open up more offices. The total number in San Diego I managed was four, with a grand total of seven throughout southern California.

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BTM: The New Year just started. What plans do you have for 2017? RR: At S&R, we plan on 2017 being a year of growth and expansion, in particular expanding our commercial lines department as well as our life insurance department. We will continue to cultivate our real


estate and lender relationships and continue to grow our relationships with commercial brokers. This gives us access to sizable business accounts. I believe 2017 will definitely be a year of tremendous growth for all agencies. BTM: What issues should producers be paying attention to? RR: Agency owners should always be paying attention to growing trends in the market, especially how they relate to millennials. In fact, we should all really learn to tap into this upcoming demographic and remain alert on how it is evolving. We also need to make sure to keep our book of businesses as profitable as possible, both for our agencies and our partner insurance companies. Carriers are faced with higher loss ratios and will look to help grow profitable agencies that care about the partnership. BTM: As you work closely with Jon Spaugy, I imagine you are a supporter of insurance trade associations like BIG. How do you think such organizations help its members? RR: Associations such as BIG are absolutely something every insurance professional should be a part of. Through groups like BIG, agency owners and others can keep up with growing trends, industry changes and keep themselves informed with new companies and education. I have been part of BIG since its inception and have realized many benefits from being part of our industry through the association. The relationships you will make by coming out to meetings, convention, and other association events are priceless. Every owner should keep themselves plugged into their industry through BIG.

panies and agency owners. As time progresses, I would like to play a bigger and more intricate role with BIG by helping grow the BIG Latino side of the association. BTM: The BIG Convention is coming up in a few months. Are you planning on attending? If so, why should insurance professionals save the date? RR: The convention is a must for all agency owners for many reasons. New technology companies that can help producers capture the millennial market, along with the many insurance companies who are looking to make appointments right on the trade show floor. There are also the educational meetings and seminars to help keeps everyone informed. This year, the convention changed locations and is taking place in the Palm Springs area. The desert is still nice and cool in May and people can make a long weekend getaway out of it. A nice, relaxing couple of days getting caught up with old friends, making new business connections, learning about the latest products and innovations, and maybe even hitting that little white ball around sounds like a great mini-vacation. BTM: Any final thoughts? RR: Keep positive thoughts and stay focused on what’s important. Don’t sweat the small stuff and face your challenges head on. Like Jon Spaugy likes to say: “Stay active and involved and think BIG!”​

BTM: Do you see yourself becoming more involved with BIG? RR: I have been a huge supporter of BIG and will continue to do so. Jon Spaugy has helped many agency owners and continues to show his passion for the insurance industry by bringing together vendors, com-

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Why breaking the team building code is so important today By Dana Borowka, Lighthouse Consulting Services of cooperation between departments, defensiveness, lies, sabotaging projects, etc. If your team exhibits more negative attributes than positive ones than that needs to be addressed and resolved quickly. The Age-Old Challenge: How to Get People to Work Toward a Common Goal

There is certainly a lot of interest in team building. Try searching for “team building help” on Google and you’re presented with 62.9 million search results! Search for “team building activities” you’ll see another 38.9 million results. The information and solutions available are mind boggling.

Successful coaches and managers are adept at melding different personalities and skills into a single unit with a common objective. For an example of how a large company builds a unifying focus look no further than The Ritz Carlton chain of luxury hotels. Here is the company’s list of service values and the employee promise. As you review this example, think about the ways you can build a genuine customer focus in your company. Service Values – I Am Proud To Be Ritz-Carlton

Unfortunately, we’ve talked with too many companies that tried team building exercises only to see the results, if any, fade quickly. That’s because team building is much more than going zip lining together. (And we love zip lining!)

1. I build strong relationships and create Ritz-Carlton guests for life.

In the sports world, championships are frequently won not by teams with the most star players, but by the teams that play like a team – not by a group of individuals. As business managers, we understand this concept. Few of us have the resources to attract only the very best employees in their respective fields. Yet, if zip lining doesn’t pull the team in the same direction, what will?

3. I am empowered to create unique, memorable and personal experiences for our guests.

DO YOUR TEAMS HAVE THE RIGHT STUFF? It can be difficult to know why a team is performing or not. It helps to take note of all the attributes (positive and negative) that are present on the team. Warning signs can be silos, poor listening skills, lack

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2. I am always responsive to the expressed and unexpressed wishes and needs of our guests.

4. I understand my role in achieving the Key Success Factors, embracing Community Footprints and creating The Ritz-Carlton Mystique. 5. I continuously seek opportunities to innovate and improve The Ritz-Carlton experience. 6. I own and immediately resolve guest problems. 7. I create a work environment of teamwork and lateral service so that the needs of our guests and each other are met.


8. I have the opportunity to continuously learn and grow. 9. I am involved in the planning of the work that affects me. 10. I am proud of my professional appearance, language and behavior. 11. I protect the privacy and security of our guests, my fellow employees and the company’s confidential information and assets. 12. I am responsible for uncompromising levels of cleanliness and creating a safe and accident-free environment. HE EMPLOYEE PROMISE At The Ritz-Carlton, our Ladies and Gentlemen are the most important resource in our service commitment to our guests. By applying the principles of trust, honesty, respect, integrity and commitment, we nurture and maximize talent to the benefit of each individual and the company. The Ritz-Carlton fosters a work environment where diversity is valued, quality of life is enhanced, individual aspirations are fulfilled, and The Ritz-Carlton Mystique is strengthened.

If you would like additional information on this topic or others, please contact Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting. com. Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development. LCS can test in 19 different languages, provide domestic and international interpersonal coaching and offer a variety of workshops – team building, interpersonal communication and stress management. About the Author Dana Borowka, CEO, has over 25 years of experience in business consulting. He has an undergraduate degree in Human Behavior and a masters degree in Clinical Psychology. Dana, along with his wife Ellen, are authors of the books, “Cracking the Personality Code” and “Cracking the Business Code.” The Borowkas are also nationally recognized as experts in their field. They have appeared on television and radio and have been published in various national and international publications.​

BREAKING THE TEAM CODE IS HARD The difficulty of the team challenge is one reason we’ve seen a big uptick in call volume from our clients who have gotten frustrated with the lack of observable results from team-building consultants and team-bonding exercises. PUTTING DATA WHERE OUR MOUTH IS We’ve been receiving these calls because our clients know that we excel at assessing work style personalities. They figure if we’ve done a great job over the years of helping them hire or promote the right individuals, we can have the insight to make a positive impact on team performance, too. They are correct, or course. Since 1994 we’ve been combining behavioral science with human resource management principles to help our clients outperform their competition through periods of growth and recession.

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LOOKING FORWARD TO BIG’S 2017 CONVENTION! Be sure to mark May 4th - 7th on your new 2017 calendars and start making plans to head out to Indian Wells, CA for the 2017 BIG Convention! Along with sultry desert nights, you will enjoy the best trade show, professional development and networking events in the insurance industry! WHO: All Insurance Professionals looking to improve their businesses WHAT: BIG’s “BIG 80’s” Convention WHERE: Renaissance Esmeralda Resort in Indian Wells, CA WHEN: May 4-7, 2017

session will pose questions from audience members and provide frank, unscripted answers from people who CHARITY GOLF TOURNAMENT Start your 2017 Convention experience helping two wor- know. thwhile causes – The Aktion Club and the Pomona Valley Workshop. For several years, BIG has raised thousands TWO-DAY TRADE SHOW of dollars in contributions for these charities through What has become the crown jewel for the BIG Convenour annual Golf Tournament. Put together a foursome tion, the Trade Show draws to companies and service with your favorite business partners and enjoy playing providers looking to begin successful business relationsat one of the country’s top golf courses at Indian Wells. hips as well as maintain them. BIG limits the number of The tournament will take place on Thursday, May 4th. exhibit spaces available for the two full days of the Trade Show, so vendors able to secure a booth are exceptioTee times go quickly so be sure to reserve yours soon. nally motivated and are looking for insurance producers Aktion Clubs, sponsored by local Kiwanis Clubs, draw who are the same. Check out the latest products and members from the community to support individuals innovations available for growing your business. There with disabilities. The Pomona Valley Workshop is a lea- are plenty of tools for business success available to you. der in service delivery to adults with developmental Come to the Trade Show on Friday, May 5th and Saturdisabilities, as well as a premier provider of assembly day, May 6th and see for yourself. Doors open and 12pm sub-contracting, vocational training, employment pre- both days and stay that way until 5pm. paration and placement services.

INSURANCE EXECUTIVE PANEL Instead of reading about the latest insurance industry news, why not hear it from those making the news? A new feature of the BIG Convention is our Executive Panel. Comprised of top leaders from leading carriers, this roundtable will give attendees a “board room perspective” on today’s issues as well as upcoming trends. A Q&A

EDUCATION DAY(S) Anyone looking for seminars about new markets or just need a refresher course on insurance basics will definitely find something they like at the BIG Convention Education Day. While the full scheduled has yet to be finalized, past course offerings have included Earthquake (CEA) Insurance. Marketing to the Latino Community, Basics of Personal Lines, Promoting Your Agency, Developing a

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Diverse Product Portfolio, Employee Management and Training, and Developing (and Keeping) Customers. Education Day is scheduled for Friday, May 5th from 9am to 5pm. Don’t forget to bring a notebook and a pen. Remember that your education opportunities do not end on Friday. The Luncheon on Saturday has historically been host to a keynote speaker from within the insurance industry, as well as top marketing gurus, business consultants and others with years of experience helping insurance professionals of all stripes. Convention favorite Jon Heim, attorney at law, will be providing his usual informative Legal Update during a continental breakfast on Sunday morning. “It is hard to believe we are celebrating our 8th annual BIG convention and have decided to riff on the theme with ‘BIG 80’s,’” said BIG CEO Jon Spaugy. “The Convention Committee is looking forward to bringing the industry together with a combination of education, entertainment, and networking.” NETWORKING/SOCIAL ACTIVITIES Naturally, there are plenty of opportunities to network with colleagues and friends throughout the convention. Friday night will kick of the entertainment portion of the weekend with the annual Hospitality Party. In the past there have been belly dancers, sword swallowers, fire dancers, Elvis impersonators, and much more. You’ll need to come and see for yourself how much more over the top things can get. On Saturday afternoon, the Key-

note Luncheon allows attendees to relax and connect with old and new friends over a nice lunch and informative speaker presentation. Sunday morning’s Legislative Update provides the opportunity to have a cup of coffee and say your final goodbyes until next year. Of course, the BIG event is the BIGGIE Awards presentations and BIG 80’s Party. Come and congratulate the top companies, representatives, producers, and other industry leaders as they are deservedly recognized with BIG’s top honor. Then get ready to break out your finest Izod polo shirts and Topsiders (or Def Leppard tour shirt and Chuck Taylors), jump in your Delorean head back to the 80’s. Remember this party is limited to those registering prior to April 1st. “We are pleased to be able to keep convention cost at $80 per person for early bird registrations,” said Spaugy. “The all event pass includes all convention and hospitality events, as well as the two-day trade show. to the convention and tradeshow and access to hospitality events.” Spaugy warned that the price for the pass will increase to $200 for those registering after April 1st. For more information on attending the Convention, or for sponsorship and other marketing opportunities, visit BIG’s website at www.BigInsUSA.com. ​

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CA INSURANCE COMMISSIONER JONES ISSUES STATEMENT ON TRUMP AFFORDABLE CARE ACT EXECUTIVE ORDER

Insurance Commissioner Dave Jones issued the following statement after President Donald Trump issued an Affordable Care Act Executive Order: “President Donald Trump’s Executive Order is directly contrary to his pledge to replace the Affordable Care Act with terrific “insurance for everybody” while repealing the ACA. The effect of the Executive Order will be to create uncertainty in health insurance markets as to whether the federal government will enforce critically important provisions of the Affordable Care Act. The Executive Order specifically directs federal agencies not to enforce ACA provisions that make sure that all Americans are getting health insurance so that the costs of treating sick and unhealthy Americans are spread across large enough risk pools so as to make it possible for private health insurers to provide health insurance. Without the enforcement of these ACA provisions, many health insurers ultimately will be forced to withdraw from health insurance markets. Health insurers withdrawal from health insurance markets will decrease competi-

tion, make health insurance unavailable, and drive up health insurance prices. Based on my experience as the regulator of the largest insurance market in the United States, this Executive Order is likely to destabilize health insurance markets across the United States. President Trump’s Executive Order also is contrary to his promise to provide health care coverage to all Americans.”​

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Building a foundation creating shareholder wealth, value and capital. Giving away great wealth should be as personal a matter as compiling it. By Stephen S. Santoro

race. Having accepted these, it follows that there must be great scope for the exercise of the special ability in the merchant and in the manufacturer who has to conduct affairs upon a great scale. That this talent for organization and management is rare among men is proved by the fact that it invariably secures enormous rewards for its possessor, no matter where or under what laws or conditions. It is inevitable that their income must exceed their expenditure and that they must, therefore, accumulate wealth.”

What to do with wealth is a bigger problem for such Warren Buffet has captured the imaginations of the people as Buffet, Gates and Carnegie than how to creapeople of the world with his past, present and futu- te it. Warren was right on track when he decided to re gifts to the William and Melinda Gates Foundation. give his money to the Gates Foundation rather than (Gates is the only man richer than Warren.) We Ame- creating and staffing his own foundation. ricans love to see the rich doing good, especially the self-made rich-people like Bill Gates and Warren Bu- “What can be more logical, in whatever you want ffet, who earned their great wealth rather than inheri- done, than finding someone better equipped than you ting it. If altruism validates the accumulation of wealth, are to do it?” Warren asked. He then hired Bill and then it should not be taxed away with an estate tax. Melinda Gates to give away his money, because they Warren said he and his late wife Susan “agreed with were doing a fine job of giving away their own money, Andrew Carnegie, who said that huge fortunes that just as Warren hires talented managers to run the buflow in large part from society should in large part be sinesses that comprise Berkshire Hathaway. This is a returned to society.” I could not agree more with both tragedy of charity: When charity provides freely what Warren and Andrew. government failed to provide from taxes collected, the government’s failure is enabled and the government Warren told Fortune Magazine during a subsequent continues for the life of the grant or project, while interview, “In my case, the ability to allocate capital doing NOTHING to reduce taxes. would have had little utility unless I lived in a rich, populous country in which enormous quantities of mar- Andrew Carnegie further said, “It were better for manketable securities were traded and were sometimes kind that the millions of the rich were thrown into the ridiculously mispriced.” Warren is man of rare ability. It sea than so spent as to encourage the slothful, the is often said the estate tax simply compensates society drunken, and the unworthy. Of every thousand dofor providing conditions to earn wealth. llars spent in so-called charity today, it is probable that nine hundred fifty dollars is unwisely spent-so spent, Here is precisely what Andrew Carnegie said in his indeed, as to produce the very evils which it hopes to 1889 essay “The Gospel of Wealth” which Warren ci- mitigate or cure.” Charities do their best work when ted and insisted that Bill and Melinda Gates read: “We they invest in the creation of new medicines, such as accept and welcome, therefore, as conditions to which spending large sums on the search for an HIV vaccine we must accommodate ourselves, great inequality of and funding research seeking new ways to block the environment; the concentration of business, industrial transmission of malaria from mosquitoes to humans. (I and commercial, in the hands of a few; and being the just described the work of the Gates Foundation.) law of competition between these, as being not only Saving people in corruptly managed countries from beneficial, but essential to the future progress of the death by disease is going to improve life in those coun-

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tries, regardless of inept governments who manage these countries. This work can then pave the way for order, education and honest regimes to govern. Andrew Carnegie was a great proponent of estate taxes. This cause too, was taken up by Warren Buffet, Bill Gates father, George Soros and Peter Lewis (former Chairman, CEO and major individual shareholder of the Progressive Corp.

large profit). This did NOT occur due to overcharging policyholders. It occurred due to ‘paying attention’ to their instructors at their business classes during their collegiate days. When they, you, me and many like them die this money gets put back into society for the good of all.

Andrew Carnegie further stated, “Of all forms of taxation, this seems to be the wisest. Men who continue hoarding great sums all of their lives, the proper use of which for public ends would work good to the community, in the form of the State, cannot thus be deprived of its proper share. By taxing estates heavily at death, the State marks its condemnation of the selfish millionaires/billionaires unworthy life.” (Mr. Carnegie: with great respect, I do disagree with you on estate taxation!)

Thank you to Jon Spaugy and the Board of BIG for allowing my viewpoints. I’ll be back next time!

Feeling it is your duty to attempt to force others to give away their fortunes is noble. However, it is refuses the millionaire/billionaire the privilege to live as he or she deems fit. Just like a bum living on the street should have that option too. Taxing the rich more than others, no matter how noble is nothing more than bank robbery or burglary at gunpoint.

You decide folks!

About the Author Stephen S. Santoro is a former senior executive officer from two Fortune 200 Insurance Holding Companies. Both firms were/are traded on the NYSE. Stephen’s background focused on reinsurance in both USA and tax haven venues. Stephen attended the University of UT from 1975/1980. You can contact Stephen via email at ssantoro@ stephensantoro.com, on Twitter: http://twitter.com/ stephenssantoro, on Facebook: Stephen Samuel Santoro, and on Instagram: Stephen Samuel Santoro.​

My approach (and my mother’s) was to cajole, politic and talk the 1% into giving their wealth away. NOT TAX IT, CONFISCATE OR STEAL IT! Where governments are concerned, past performance is VERY MUCH an indication of future returns or losses. Even if estate taxes are a political necessity, the revenues should be handed to some sort of a private foundation/institution aiming to invest in the public good. Just ask Warren or Bill. So Insurance Commissioners, Superintendents, Regulators and Governmental Supervisors around the world and on all continents (a phrase I use frequently on Facebook, Instagram, LinkedIn, Twitter and all social media) when you and your ‘advisors’ are promulgating rules for auto insurance or any other insurance covers in the future, please remember these stock companies have shareholders (like Warren, Bill, and YOU). These shareholders are often are wealthy. This wealth came from seeking out mispriced assets and buying them inexpensively and holding them or selling them (at a

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Valentine’s day Fun Facts

E​ very February 14th, single people throughout the country (and world) are made to feel inadequate by Hallmark, See’s Candy and the scores of businesses that nourish their bottom lines during the 24-hour lovefest. As married men and boyfriends will attest, the pain is not exclusive to singles, as they whip out their credit cards to purchase wildly overpriced long-stemmed roses and pay for prix-fixe dinners from Valentine’s Day menus. But how many people truly understand that dark history of this special day during the Ides of February? For your reading pleasure, here are some fun facts about Valentine’s Day: The most popular theory about Valentine’s Day origin is that Emperor Claudius II didn’t want Roman men to marry during wartime. Bishop Valentine went against his wishes and performed secret weddings. For this, Valentine was jailed and executed. While in jail he wrote a note to the jailor’s daughter signing it “from your Valentine.” In Victorian times it was considered bad luck to sign a Valentine’s Day card. About 1 billion Valentine’s Day cards are exchanged each year. This makes it the second largest seasonal card sending time of the year. Mother’s Day is #1. Many believe the X symbol became synonymous with the kiss in medieval times. People who couldn’t write

their names signed in front of a witness with an X. The X was then kissed to show their sincerity. In the Middle Ages, young men and women drew names from a bowl to see who would be their Valentine. They would wear this name pinned onto their sleeves for one week for everyone to see. This was the origin of the expression “to wear your heart on your sleeve.” In 1537, England’s King Henry VII officially declared Feb. 14 the holiday of St. Valentine’s Day. Over 50 percent of all Valentine’s Day cards are purchased in the six days prior to the holiday, making Valentine’s Day a procrastinator’s delight. More than 35 million heart-shaped boxes of chocolate will be sold for Valentine’s Day. That translates into over $1 billion. 73 percent of people who buy flowers for Valentine’s Day are men, while only 27 percent are women. 15 percent of U.S. women send themselves flowers on Valentine’s Day. 189 million stems of roses are sold in the U.S. on Valentine’s Day. The red rose was the favorite flower of Venus, the Roman goddess of love. Thanks to the List 25 website (www.list25.com) for the information.​

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Does Your Company Need a Service Overhaul? Eight “Red Flags” That Demand Action ​By Joseph A. Michelli, PhD, CSP These days providing a great—heck, exceptional—product or service won’t keep customers happy. (You can thank the hyper-connected global economy for their fickleness.) No, we must also delight customers with an outstanding service experience. Problem is, it’s all too easy to assume they’re delighted while, in reality, they have one foot out the door with an eye trained on one of your many (many) competitors. Is there a way to tell if your company needs a service overhaul... before your customers take their leave?

web traffic, or even sales metrics isn’t good enough.) Even if you’re doing well profitably right now, you lack indicators to tell you if you’ll be dead in the water tomorrow. It’s possible that you’re flatlining and you don’t even know it yet. Consistently harvesting customers’ opinions is the only way to keep your finger on the pulse of their service experience. Red Flag #2: You aren’t taking a “customer’s-eye view” of the service experience. Sure, you might be investing plenty of time, money, and energy in making customer service improvements. But if you haven’t taken the time to map and design the service experience from the customer’s perspective, you’ll inevitably do a lot of work that’s irrelevant. It’s important to take a holistic view of the customer’s journey at all touchpoints, “cradle to grave,” even beyond the transaction. If you don’t, sooner or later, all of your incremental efforts at positive change are going to miss the mark.

Signs that you need to pay more attention to the customer experience can be very subtle. In fact, some signs might not initially seem to relate to “service” at all. The good news is, knowing and paying attention to these Red Flag #3: Your social media strategy is halfhearted red flags can help you correct your course while there’s (at best) or (worse) nonexistent. No matter how popular or established your company is, no matter how lostill time to recapture your customers’ loyalty. yal you think your customers are, you need to establish a social media strategy. The young market doesn’t look up companies in the yellow pages. Often, they don’t even use email when they need help or want to ask a question. They turn to Facebook, Instagram, and Twitter. But this isn’t just about millennial customers—even baby boomers are deeply interactive online! If you don’t make it easy for customers of all ages to contact and engage with you in the way they prefer, you’re treading on thin ice. Oh, and this may go without saying, but be sure you also have a working, updated, intuitive website. PrefeRed Flag #1: You’re not asking your customers how rably one with a blog that regularly pushes out helpful they feel. Directly asking customers what their level of information. satisfaction is, and why they feel that way, is a simple but crucial component of providing outstanding ser- Red Flag #4: You’re not listening to what people are savice. (No, making assumptions about how customers ying about you online. Maintaining an active, updated “seem to feel” based on their attitudes, foot traffic, social media presence is only half the online equation. Sooner or later, the voices online are going to turn the

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January/February 2017


market away from you. If you’re not monitoring what people are saying about your company, your competitors, and your industry in general, it’s just a matter of time before you find yourself wondering what went wrong. But be aware: Managing the online chatter doesn’t mean trying to argue with critics; it means really trying to fix problems and turn those critics into advocates.

scale two weeks later. So be sure you’re also capturing other real-time analytics and leading indicators—like high-value touchpoints, satisfaction ratings, and so forth—that will help you understand where breakdowns are happening and how you can intervene.

Red Flag #8: Your employee turnover exceeds industry standards. Yes, some employee turnover is healthy. A certain percentage of your population has to move to Red Flag #5: You aren’t transforming prospects into keep your organization dynamic. And if it’s the “right” buyers. If you’re spending plenty of money on marke- people who leave (i.e., low performers), all the better. ting to drive traffic but can’t get people to walk in the But if your turnover is approaching or exceeds industry door, it’s not them—it’s you. Your efforts to serve and norms, you have cause for concern. engage (potential) customers aren’t working, and it’s high time for an overhaul. Large pockets of turnover are often reflective of an unhealthy culture—and unhappy, disengaged employees The same thing is true for conversion. Say people are do not provide outstanding service. Plus, during tumulwalking in but you are not earning sales in ways that tuous turnover, your customers are interacting with a are in keeping with growth. While you may have lovely new brand every day. They’re not getting the benefit of products and a lovely visual, you’ve not figured out seasoned service professionals who have a great deal how to help people make the connection to becoming of corporate knowledge and product knowledge, as buyers—and that too is a service issue. well as the type of enthusiasm that becomes infectious in the life of the customer. Red Flag #6: You take a laissez-faire approach to referrals. Tracking referral business and rewarding referrals is an important part of providing outstanding post-transaction service. You’ve got to leverage your existing zealots to generate business and to make sure they continue to choose you instead of your competitors. Great service brands teach their staff how to help their customers effectively refer them to other like-minded consumers. Red Flag #7: You rely too heavily on your Net Promoter Score. A Net Promoter Score (NPS) is great for measuring the strength of your customer relationships right now—but it doesn’t give you the whole picture. A low NPS doesn’t tell you what to fix. A high NPS doesn’t reveal where you have an opportunity to forge an even better connection with customers by satisfying them at even more key moments.

There’s one more, not-quite-as-objective litmus test Relying too heavily on your NPS is like hoping to lose for gauging your customer’s satisfaction, engagement, weight just by looking at the scale. If you don’t track and loyalty: Do they seem willing to spontaneously other metrics like what you’re eating and how much sing your praises? If not, their opinion of you is probaenergy you’re using, you won’t know how to affect the bly “meh”...and “meh” can be deadly.

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Can you imagine a customer putting a bumper sticker on their car telling others how much they love your company. If not, that’s a red flag, because these days, Facebook “likes” are the new bumper stickers. If you can’t see your customers being excited enough to publicly say, Yes, this is a brand I’m proud to be associated with, you are missing opportunities to secure satisfaction and emotional engagement.

About the Author: Joseph A. Michelli, PhD, CSP, is an internationally sought-after speaker, organizational consultant, and New York Times number-one best-selling author. He is a globally recognized thought leader in customer experience design. For more information, please visit www. josephmichelli.com. ​

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