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GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | December 2021

Happy Holidays!

Vermont Insurance Agents Association is a statewide trade association representing nearly 100 independent insurance agencies in Vermont, with more than 900 employees. VIAA member independent insurance agents represent more than one insurance company, and as a result, can offer clients a wider choice of auto, home, business, life and employee benefits.t

Green Mountain Agent is a publication of

CONTENT ________________ December 2021

05 Letter from the President

12 11 Requirements for Management Success

17 On the Hill

22 Client Expectations Grow for Insurance Agents

28 E&O Corner

32 Commentary

36 Agency & Company News

600 Blair Park Road, Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org VIAA Officers President Daniel J. Rodliff, CIC, CPIA, LUTCF Vice President Michael Barrett Secretary/Treasurer Jessica M. Fleury, ACSR National Director Ronald Bixby Directors Chip Ams Ian Sutherland Alan Kinney

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LETTER FROM THE PRESIDENT ______________________________

December 2021 First and foremost, Happy Holidays to you and yours! Let me introduce myself to those who may not know me; I am Michael “Mike” Barrett, and on January 1, 2022 I will begin my term (proudly I might add) as the President of the Vermont Insurance Agents Association (VIAA). I hail from St. Johnsbury, and co-own and operate our family owned agency, Barrett Insurance Agency, LLC, with my lovely bride Jennifer. We are an independent agency, and quite honored to be the second generation husband and wife ownership team! For those in attendance for Evolve21, some of what I say may be a “repeat”, but I feel it worthy of bringing up again. A huge debt of gratitude to Dan Rodliff for his leadership and guidance through the very challenging, and everchanging year we called 2021! We are grateful to his commitment to the members of VIAA.

Mike Barrett VIAA President

As 2021 comes to an end, we have our sights set on 2022. The VIAA board is in the budget planning process, have been reviewing legislative activity that could impact our industry, and planning the year for you and your staff. You can always count on us to bring you options for Continuing Education Credits, courses for new agency staff, and more. The success of VIAA is incumbent upon our members, every single one of us. I plan on highlighting the many positive, and often underutilized, tools that are at all of our fingertips, just for being members of VIAA. Through the added benefits available from Big “I”, to the branding available from Trusted Choice. From coop advertising and marketing to empowering tools like “Ask the Expert”, there is plenty available to you as part of your membership. If you have not logged on to either in recent weeks, months, or longer, I would encourage you to do so. If you do not know your login credentials, please let us know, as you are missing out! For the coming year, I would encourage you and your staff to get more engaged with all the VIAA has to offer. Keep an eye out as we are excitedly planning Evolve22, our annual convention that is a great opportunity for all agencies, big and small. If you have any questions, reach out to us, we are here to help! Happy Holidays, here’s to a New Year! Stay safe and be well! - Mike

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11 Requirements for Management Success

AGENCY MANAGEMENT

By Chris Boggs

Employees are your greatest expense, but they are also your most valuable asset. The loss of great or even just a "good" employee has a tremendous effect on the agency. A lot of "experts" postulate that good employees don't quit jobs, they quit bosses. I don't fully or always agree with that philosophy. Your employees may love you, but they may not like some of the inconsistencies they feel exist in the agency, or the lack of structure in their work. In essence, you may not manage them the way THEY need to be managed. Two truisms of management are: You can't necessarily manage people the way you like to be managed. Personally, I like to be left alone. Tell me what you want done and when you need it done and then let me do my job. It would be a mistake for me to treat another employee that way if he or she needs and wants constant contact, feedback and

confirmation); and you can't manage everyone the same way. If you manage a person that doesn't require much oversight and a person who craves (and even needs) constant attention the same way, you're going to drive one of them nuts – and they will leave. So, the employee may like you personally, they just don't like how they are managed. As a manager, you have to lead on an individualized basis. Don't misunderstand, there must be "corporate" rules, but each person must be guided differently towards compliance with those group or "corporate" rules. Following are 11 "rules" or guidelines around the goal of successful management. Each rule contains nuances not detailed here, but that doesn't diminish their usefulness: Hire smart, ethical, positive, and customercentric people. All four characteristics are

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11 Requirements for Management Success continued

required, three out of four isn't good enough. If any one of these four is lacking, you are hiring a future problem. Teach your employees the history of the agency. This gives them a sense of place and pride that they are now part of the story. To misquote Walt Whitman and Dead Poets Society, everyone wants to contribute a verse. When your employees know the history, they are excited because they are contributing a verse to the agency's story. Create a picture of what you want the agency to accomplish. If you have a vision, the employees need to see the vision, and maybe it will become their vision. When your vision becomes your employee's vision, the agency is guaranteed to reach its goals. Create a clear vision of what you want that person to accomplish. Everyone wants to know their place and how they contribute. Remember, "I need to feel needed." Again, the right employees (back to Rule 1.) want to contribute a verse to your company; help them do that by explaining their place in the agency and your goal for that position (and even them personally). Give them the tools, or access to the tools, necessary to accomplish the vision you have cast for the agency and them personally. Be available. Always be there if needed; but balance accessibility with the need for them to learn and do their job. It's too easy and sometimes expedient to just do it for them. If you do that, they don't learn anything; and you won't get your own job done. But the worst part about not letting the employee do his or her own work, there is no sense of accomplishment or contribution. GET OUT OF THE WAY! – While remembering rule 6 (Be available), let them work.

doing that, don't get in the way of their personal accomplishments. If you think about getting in the way and imposing your will, think, "Is it worth losing this employee just to get my own way?" Of course, don't let them do anything that will get the agency in regulatory, contractual or financial trouble, that's not what I mean. There are still standards that must be followed; I'm talking about style. They may interact and work differently than you, but unless their style disrupts operations – let them work. Praise great results! Notice I said GREAT results. Don't praise someone for just doing their job – praise when they do a great job. When I sold my first policy I was very happy, the agency manager said, "Congratulations on doing your job." He saw no reason to praise me just because I did what I was hired to do. When you overly praise people for simply doing their job, your praise become worthless. It's the "everybody gets a trophy" syndrome. Save praise for extraordinary work. When you do praise, praise in public. Know how and when to discipline. If you are afraid to have the "tough" conversations, your staff will run all over you. It's your agency, you can't be afraid to lead; and sometimes that means disciplining people and even cutting people loose, as harsh as that sounds. But if you did a good job with rule #1, it's less likely you will ever have to do this. But remember, even though you praise in public, you discipline in private. Management is about leadership, not power. Leaders cast the vision, lead by example, and make tough decisions when necessary. You set the course for your agency's success, and your employees are a key to that success – this requires you to manage them well.

STAY out of the way! Yes, you must manage each employee according to their style, but in

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ON THE HILL: Build Back Better Package Moves to Senate

The U.S. House of Representatives passed the Build Back Better (BBB) reconciliation package in a partisan vote.

BBB has some significant differences from what the House Ways and Means Committee passed out of committee earlier this year.

All but one Democrat voted for the BBB package and every Republican voted against it. The roughly $1.75 trillion tax and social spending package now heads to the U.S. Senate where its fate remains uncertain.

Over the last several months, the Big “I" has strongly advocated against numerous tax increases and other policies that would cause significant harm to Big “I" members. Advocacy efforts included sending several letters to Capitol Hill, meeting with numerous members of Congress and their staff both virtually and in person and launching grassroots campaigns toward targeted members of the Ways and Means Committee.

While the House-passed legislative text represents the most recent version, the contents of the package are likely to change when the BBB is considered in the Senate. Additionally, it remains unclear if the package has the necessary Democratic party support in the Senate chamber. Both Sen. Joe Manchin (DWest Virginia) and Sen. Kyrsten Sinema (DArizona) have noted their concerns about the contents of the package and the speed it is moving through Congress. In order for the BBB bill to pass the Senate, every Senate Democrat would have to support the package. In terms of raising revenue, the latest version of

These advocacy efforts proved successful on many fronts and several damaging provisions have been dropped from the legislation. While previous versions of the package capped the 20% small business deduction, the latest version includes no changes to the deduction. Additionally, all tax rate increases on both the corporate side and the individual side (impacting Big “I" members organized as pass-through businesses) of the tax code have been dropped from the BBB. Read More Here

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AGENCY MANAGEMENT

Client Expectations Grow for Insurance Agents

Commercial lines and personal lines clients expect and need their insurance agents' advice on a wider variety of business solutions than last year, according to a Nationwide survey, which means agents have more cross-selling opportunities. The latest Nationwide Agency Forward survey found that insurance consumers are looking for counsel from agents as they continue to worry about the ongoing coronavirus pandemic's impact. The reliance on agents comes with consumers' growing confidence in their agent's ability to help protect them—90% of midsize business owners (up 7% from June 2020) and 69% of personal lines consumers (up 8%) say their agent regularly works with them to ensure they have the right coverage for their needs. Employee benefits is the nontraditional product most likely to catch a business

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owner's eye, with 59% of midsize business owners indicating they are interested in employee benefits. Among small business owners, 37% are interested in employee benefits, a 15% increase since the same time last year. Additionally, 39% of midsized businesses are interested in retirement products. Thirtytwo percent of small business owners said they are interested—a 14% increase since last year. Among personal lines consumers, 29% indicated they are interested in retirement topics from their agent. When it comes to cybersecurity, 41% of midsize businesses, 28% of small businesses, and 20% of personal lines consumers express interest in receiving resources and advice about how to safeguard themselves. One area that saw a significant growth of interest across the board was banking. Midsize business owners' interest jumped

Client Expectations Grow for Insurance Agents continued from 12% in 2020 to 52% in 2021. Small business owners interest gained 7% to hit 18% in 2021, and consumer interest gained 6% to reach 24%. However, increased cross-selling opportunities are irrelevant if agents can't reach their clients—and shifting consumer locations mean agents must implement digital tools to do so. More than 1 in 3 personal lines consumers plan to move away from their current location in the next five years, with 1 in 4 of those saying the pandemic impacted their decision. And 1 in 5 business owners intend to reduce, move or eliminate offices in the next five years— with middle market business owners being three times more likely than small business owners to say the pandemic influenced their plans.

takes to set up their coverage, an increase of 11% since 2020. Difficulty in receiving insurance quotes and in quickly connecting with their agent by phone each increased by 7%. Similar to 2020, consumers continue to struggle with the length of time it takes to settle claims (69%), understanding different types of coverage (42%), and finding the best price (42%). This article is reprinted from IA magazine. The author, AnneMarie McPherson. is IA news editor.

As a result of the geographical shift, 47% of agents are concerned about their ability to retain clients who relocate and 61% plan to invest heavily or moderately to attract, maintain and foster relationships with clients outside their current geographies. Interestingly, “although 57% of agents feel clients want their agent located nearby, less than half of consumers and small business owners agree with that sentiment," said Peter McMurtrie, president of property-casualty commercial lines at Nationwide. Unfortunately, insurance customers report increased challenges with their insurance needs in 2021. Half of all small business owners struggle with the length of time it takes to settle claims, to find the best price for their protection needs, and to understand insurance terminology. Middle market business owners have similar challenges, but about 75% also report difficulties with the length of time it

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C E O & R O N ER

Proceed Carefully If You Receive A Subpoena

By Mark Shackelford, Senior Underwriter, Vice President Swiss Re Corporate Solutions

Over the past few years, we have seen an increase in the number of subpoenas served on insurance agents even if they are not a party to the litigation. How those subpoenas are handled can mean the difference between whether or not they develop into E&O lawsuits. The purpose of this article is to instruct and inform you as to how to proceed should you ever be served with a subpoena in litigation wherein you are not a party to the lawsuit. Any agency receiving a subpoena should proceed with caution. Though the caption on the subpoena does not list the agency as a party to the litigation, the fact remains that a legal proceeding is pending and it is not difficult for the lawsuit to be amended to add the agency as a party. Sophisticated attorneys will often serve subpoenas in order to try and obtain documents or testimony that could help support a claim against your agency. For this reason, we suggest every agency should have procedures in effect as to exactly what must be done if it receives a non-party subpoena. An agency that receives a subpoena is legally obligated to comply with that subpoena, or it runs the risk of possibly being held in contempt of court, even if the subpoena is somehow defective. A subpoena cannot simply be ignored or disregarded. For this reason, Swiss Re Corporate Solutions always suggests that an attorney be involved to assist the agency in responding to any subpoena received. Often, a subpoena is defective because it fails to comply with the

statutory requirements for service, or it requests information that is beyond what is permissible. If your agency responds without the assistance of counsel, it is possible that it will be complying with an improper subpoena and, thus, disclosing information that it is not required to be disclosed pursuant to state law. In fact, responding to a defective or improper subpoena may result in an agency disclosing information that may be protected by state insurance regulations or Federal laws. Therefore, an agency that responds to a defective or improper subpoena puts itself at risk of facing a possible E&O claim, lawsuit, or possible regulatory action. There are three types of subpoenas that an insurance agency and insurance agent might receive when the agent and agency are not parties to a lawsuit. One, a subpoena that demands documents and electronically stored information (“ESI”). It is important for you to be represented by a lawyer when you produce the documents and ESI. For example, the documents and ESI might contain financial information about the insured that is confidential and might not otherwise be something to which the party issuing the subpoena has a right to obtain. The documents and ESI should be reviewed by your lawyer to ensure the proper documents and ESI are disclosed. The second type of subpoena requires someone to appear at a deposition or trial to testify. Usually it is a deposition for a lawsuit involving one of your insurance customers. Again, it is important for an agent to be

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Proceed Carefully If You Receive A Subpoena continued

represented by a lawyer. The lawyer will review the pertinent materials with you and help prepare you for your testimony at the deposition. It is preferable to be prepared when you testify. It diminishes the chance the agency will be brought into the lawsuit as a party. Moreover, a lawyer will attend the deposition with you to ensure the rules of court are followed and that your rights are protected. For example, the rules of court, depending upon the state, usually require the agency to be compensated for the work it performs producing the documents and compensation for an agent’s professional time spent attending a deposition. Your lawyer will negotiate the compensation with the attorney who served the subpoena on your agency. The third type of subpoena is a combination: a subpoena that commands your agency to produce documents and commands a person from the agency to testify at a deposition. You should immediately contact Swiss Re Corporate Solutions. We will assign an experienced lawyer to review the materials, prepare you for testifying, and to ensure the rules of court are followed. Many E&O policies contain language that defines a “claim” or “potential claim” against the agency as including the receipt of a subpoena. For this reason, it is a good practice for every agency to review the language contained in its E&O policy related to subpoenas so that it understands the policy terms and provisions related thereto. Our recommendation has always been that when an agency receives a subpoena it should immediately advise Swiss Re Corporate Solutions of the subpoena. For example, the language contained in the Swiss Re Corporate Solutions E&O policy, issued to MIIAB members through Agents Assistance Corporation, defines a claim as including the receipt of “a summons, a subpoena, or any other notice of legal process.” As such, an

agency that receives a subpoena and responds to it on its own without notifying its E&O insurer runs the risk that it failed to report a claim in compliance with the terms of its E&O policy. This failure to provide notice to the insurer could potentially result in a disclaimer of coverage by Swiss Re Corporate Solutions for any claim or lawsuit that may arise in connection with it. An additional reason why an insurance agency should advise its E&O insurer of a subpoena that it receives is because many E&O policies provide coverage to help assist the agency in complying with the subpoena. As an example, your current Swiss Re Corporate Solutions E&O policy provides subpoena coverage of $10,000 per policy year, which is not subject to a deductible, to have counsel assigned to help the agency respond to subpoenas. In our experience, an agency with an attorney involved in responding to a subpoena is less likely to be dragged into litigation. It is for this reason E&O insurers provide this type of subpoena coverage. Every insurance agency should make certain that it has an established procedure in effect concerning how it will deal with any subpoena it receives. It should also ensure the procedure is known and followed by all employees. As part of that procedure, there should be a method for notifying the E&O insurer for the agency about a subpoena it receives. If, after being notified about the subpoena, the E&O insurer declines to assign counsel to assist in responding to the subpoena, the agency should then consider whether it may be best to retain counsel on its own. By following these steps, the prudent insurance agency will be in a better position to avoid becoming a party to litigation related to a subpoena it receives.

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Fried Chicken & Customer Loyalty

William C. Wilson, Jr. CPCU, ARM, AIM, AMM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and Director of the Big "I" Virtual University for over 17 years. 32

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I was perusing LinkedIn and I came across this post from Emily Glanz, a commercial insurance advisor at Cottingham & Butler in Iowa: We recently had a death in our family. My husband’s 98-year-old grandpa passed away. We were sad, but we celebrated his long and happy life. Grandpa was a “creature of habit” and ate at KFC every day for the last ten years until he passed away. One day after he passed, KFC in Dubuque, IA reached out to express their sadness. Taking it one step further, they updated their sign facing the busy street to pay tribute to Grandpa. Our family was so touched. I’ve worked in a client-facing role since the age of 16. I like to think I understand the power of strong customer service, client empathy, and the resulting loyalty that comes with that… BUT this is a shining example of creating loyalty. This is powerful customer-service. Kudos to you, KFC. And thank you. What a wonderful story and a lesson for the insurance industry, especially agents. Growth comes from acquiring new business; profitability comes from retaining existing business. Customer loyalty, and thus retention and profitability, isn’t driven by cheap prices, AI bots, big data, nor nifty phone apps. Loyalty springs as much (or more) from the heart as the mind. One of the first blog posts I ever wrote 4 ½ years ago was about customer loyalty. I explained why I had been with the same insurance agency since 1973. Here is my story.

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COMPANY & AGENCY NEWS 36

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UNION MUTUAL ANNOUNCES STAFF HONORS

Union Mutual is pleased to announce the Company’s Assistant Vice President of Marketing, Alexis Burrall, was recently recognized by Vermont Business Magazine as a “Rising Star” in recognition of her contributions to the community and the Vermont economy as an outstanding young leader. The Rising Star program recognizes 40 individuals under the age of 40 from the State of Vermont’s emerging business leaders. The individuals are chosen by a panel of judges for their commitment to business growth, professional excellence and involvement in their communities.

Union Mutual is pleased to announce the Company’s President & CEO, Lisa Keysar, was honored by the Central Vermont Chamber of Commerce with the ATHENA Leadership Award in recognition of her guidance, achievement, and community spirit. The ATHENA Leadership Award, named for the Greek goddess known for her strength, wisdom, courage and enlightenment, honors those whose mentorship has inspired others – particularly women – to realize their full leadership potential.