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GREEN MOUNTAIN AGENT VERMONT INSURANCE AGENTS ASSOCIATION | February 2022

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 ________________ February 2022

05 Letter from the President

600 Blair Park Road, Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org

12 Basics of Trusted Choice 20 On the Hill

VIAA Officers President Michael R. Barrett

25 NewsFlash

Vice President Jessica Fleury, ACSR

31 E&O Corner

Secretary/Treasurer Ian Sutherland, CIC, AAI-M

35 Commentary

National Director Ronald Bixby

40 Agency & Company News

Directors Daniel J. Rodliff, CIC, CPIA, LUTCF Aislyn M. Allen, CISR Laurie Audy Executive Director Mary M. Farley, MBA, AAIM

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LETTER FROM THE PRESIDENT ______________________________

February 2022 Love is in the air, and I would love to find out if you have taken advantage of the Member Plus profile with Trusted Choice?!?! If not, what are you waiting for? Log on to go.trustedchoice.com/memberplus, follow the quick and easy steps, you will take your basic listing to the Member Plus profile for free! One of my favorite sayings is “not advertising is like winking at someone in the dark, you know you are doing it, but nobody else does”. If you are the decision maker in your agency, please take this easy step; if you are not the decision maker, pass along this information to those who are. There is nothing but benefit to your agency to become easier to find, and with over 36 million online shoppers having visited TrustedChoice.com to research their insurance options, the odds are in your favor.

Michael R. Barrett VIAA President

Another item I am excited about is the Vermont Trusted Choice Agent Awareness Campaign. Just another amazing opportunity for members. We will be working on a campaign for 30 second TV ads on WCAX and WPTZ, along with inserts on cable networks (CNN, ESPN, TNT, Fox News, etc.), that can really give your agency an opportunity to shine, via this cobranding opportunity with VIAA. For this, there will be a cost to participate for the agency, though there will be incredible grant matching from Trusted Choice, to greatly increase the reach of these ads. If you are at all interested in participating, or wish to learn more, simply email me, mike@thebarrettagency.com, or call VIAA. Leveraging the power of Big I and Trusted Choice are just some of the incredible benefits to your membership with VIAA. I encourage you all to learn all that we can do for you, as we are all in this together. Stay well! PS if you don't understand what Trusted Choice is, go to page 12 for a breakdown of the program and resources available to you.

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ON THE HILL: Democrats Push Forward with Build Back Better Package

In November 2021, the U.S. House of Representatives passed the Build Back Better (BBB) package in a partisan vote with all but one Democrat voting for the package and every Republican voting against it.

ever. In fact, just this week President Joe Biden hosted a group of business leaders at the White House to highlight certain aspects of the BBB package in the hopes of moving forward with it.

Following the House vote and just days before Christmas, Sen. Joe Manchin (D-West Virginia) announced he would oppose the roughly $1.75 trillion tax and social spending package as it is currently written. However, in the aftermath of Sen. Manchin declaring his opposition to the bill, Senate Majority Leader Schumer (D-New York) maintains that he will push forward with negotiations with Senate Democrats, including Sen. Manchin, in hopes of eventually passing a pared-down or “skinny" version of BBB.

Congressional Democrats are also continuing negotiations regarding the package. This week, discussions continued on specific issues, such as the state and local tax (SALT) deduction. Some Democrats from high-tax states are pushing to repeal the SALT cap and others are characterizing repealing the SALT cap as a giveaway to the rich.

The legislation is far from dead and Big “I" advocacy efforts against some of the most onerous provisions remain as important as 20

As negotiations over the tax and spending package continue at the White House and among Democrats in Congress, opposing the most onerous tax provisions will be a top issue for the Big “I" at the in-person Legislative Conference, which will take place April 27-29.

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On the Hill continued While advocacy efforts from the Big “I" have proven successful in shaping the legislation so far, especially regarding some of the most damaging tax provisions, negotiations are continuing and any of these tax provisions could be added back into the legislation, especially as Sen. Manchin has shown an openness to voting for tax increases. As Democrats push forward with their agenda, the Big “I" will continue to advocate against the most harmful tax provisions, including capping or eliminating the 20% small business deduction; increasing tax rates on Big “I" members both on the corporate side and the individual side, which would impact Big “I" members organized as pass-through businesses; expanding the 3.8% net investment income tax; increasing the capital gains tax; and making changes to stepped-up basis. Additionally, the Big “I" continues to oppose a new expansive tax information reporting regime that would require financial institutions and other providers of financial services to track and submit information to the IRS on the inflows and outflows of every account above a de minimis threshold of $10,000 during the year. As negotiations on the BBB package continue in the halls of Congress, the Big “I" will update members on important changes and provide details on the association's advocacy efforts.

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NEWSFLASH

VERMONT BUSINESSES TO SEE DECREASE IN WORKERS' COMPENSATION INSURANCE FOR RECORD SIXTH YEAR IN A ROW

Governor Phil Scott and Department of Financial Regulation (DFR) Commissioner Michael Pieciak today announced that Vermont businesses will see another rate decrease in workers’ compensation insurance in 2022. This is the sixth straight year workers’ compensation rates have decreased, and when combined with decreases from 2017-2021, Vermont employers will pay an average of 41% less in premiums than they did in 2016.

The rate reduction will be effective on April 1, 2022, which is estimated to save Vermont employers over $8 million in premiums during the upcoming year. “As we work to grow the economy and our workforce, addressing the high cost of doing business in Vermont is critical,” said Governor Scott. “A major expense for Vermont businesses has been workers’ compensation insurance, so I’m proud that we’ve been able to reduce these costs each year, without reducing benefits for workers. These savings will help Vermont employers of all sizes hire more workers, increase salaries and expand their operations in our state.” “As Vermont businesses and workers face unparalleled challenges brought on by the COVID-19 pandemic, it is very encouraging to see that workplaces are

continuing to become safer, which translates into lower workers’ compensation rate,” said DFR Commissioner Pieciak. “I applaud Vermont’s business community and the staff at the department for their work to make our workplaces safer and our state more affordable.” The multi-year decreases reflect the continuing efforts of Vermont employers to maintain safe workplaces and a continued focus by the DFR to make workers compensation insurance more affordable to Vermont businesses. Employers purchase workers compensation through one of two markets, the voluntary market and the assigned risk market. In the voluntary market — the open competitive market — loss costs will decrease by an average of 4.9%, which is the primary component of workers’ compensation rates. Approximately 90% of Vermont employers receive voluntary market coverage. In the assigned risk market — the market for employers unable to obtain coverage in the voluntary market — rates will decrease by an average of 5.6%. The continued rate relief in the assigned risk market is particularly good news for new businesses which are often required to obtain coverage through this market due to their lack of a claims history. Read More

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C E O & R O N ER

E&O and Policy Changes ByBig “I” Advantage, Inc. and Swiss Re Americas

Making mid-term policy changes is a normal part of the insurance agency business. In fact, it is so routine that there is a danger of making ordinary, perfunctory policy changes without considering the potential E&O exposure. In particular, there is a big E&O risk when making policy changes based on information or instructions (or lack of information or instructions) from third parties. The two E&O cases below illustrate the hazards of not verifying with insureds information or instructions which are received from third parties. Actual case #1 A car dealer calls the agency to report that an insured of the agency is in his office, and in the process of trading cars. The car dealer has the insured's auto ID card, with the correct policy number. In addition, the agency person can hear the insured talking in the background, so there is no reason to doubt the legitimacy of the call. The agency takes the necessary information on the new car. The car dealer also informs the agency that the insured is trading in his older car. Based on that, the agency also deletes the older car from the insured's auto policy. Several days later, the insured calls the agency to report a serious accident involving the older car. It seems that during last minute negotiations with the car dealer, the insured decided against trading the older car, opting instead to sell it himself.

The agency had not yet sent the insured a copy of the Change Endorsement, and the insured denies instructing the agency to delete the older car. Recommendation: In this particular situation, the simplest approach would probably have been to ask to speak directly to the insured. That way, the agency would have been acting on direct instructions from the insured. The burden would then fall on the insured to countermand the original instructions to delete the older car. Actual case #2 An insured calls the agency to report receiving a very expensive diamond bracelet for her anniversary. The agency informs the insured that the insurer requires an appraisal in order to schedule the jewelry. The insured states that she will call the jeweler and have them contact the agency. Three months later, the insured calls to report that the bracelet was stolen in a burglary. As it turns out, the jeweler never contacted the agency. Also, the agency did not suspense the item, nor do any follo`w up, and the CSR that originally handled the call has since left the agency. The agency manager did, however, find an entry in the insured's data base logging in the original call, so there is no doubt that the insured called the agency. Recommendation: In any situation in which coverage cannot go into effect until additional information is received by the agency, it is critical to inform the insured of that fact, with documented written follow up as necessary.

E&O Policy Changes continued Next, any pending transactions such as this must be entered into suspense, and followed up on in a timely manner. Lastly, it might have been wise to advise the insured to have the jeweler send the appraisal directly to her, and she could then forward it to the agency. One advantage of this approach is that the insured would certainly know whether or not the appraisal had been done by the jeweler.

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On Policyholder Attorneys and Public Adjusters

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. www.viaa.org

This coming June marks the beginning of my 54th year in the insurance industry. I’ve enjoyed something of a 3-phase career. The first 7 years was spent largely as a fire protection engineering graduate providing loss control and underwriting services to insurers. The next 8 years I spent in management with highly successful, if unfulfilling, results. But my real passion has always been research and education. Before stumbling into an engineering college scholarship, my plan had been to become a high school math and/or science teacher. It took me almost 20 years to get into the education side of the insurance industry when I left a management position at ISO to join the Insurors of Tennessee, the state affiliate of the Independent Insurance Agents & Brokers of America (the Big “I”). I moved to the Big “I” national 11 years later to build their Virtual University and retired 17 years after that as Assoc. VP of Education and Research. For the past 5 years, I’ve been blogging, writing books, and doing some speaking (not to mention gigging with my band The Spyders). So, for over 30 years now I’ve been involved in researching, writing, and speaking (aka “educating”) on insurance and risk management. Much of my work during that time has been in assisting independent insurance agents with coverage and claims issues. As you might guess, these activities, especially when the agent was unable to resolve a denied claim with a carrier, frequently brought me in contact with attorneys and adjusters responding to disputed claims from the policyholder side. It is probably no secret that policyholder attorneys and public adjusters are not especially highly regarded within the industry by insurers and the claims personnel they employ. To a lesser degree, that’s probably generally true of many agents who feel that the claims process works better as a private party among friends (insurers and insureds) where a 36

disagreement breaks out that is best resolved, when possible, by the agent as a mediator and, in many cases, an advocate for the insured. (That being said, it’s not unusual for an agent to refer a customer to a public adjuster or policyholder attorney if they strongly believe a claim is covered but they’ve hit a brick wall with the insurer’s adjuster.) Frankly, with a very few expert witness experiences, most of my dealings with policyholder attorneys had been adversarial and most of my knowledge about public adjusters was second hand. Like most people, my general knowledge of policyholder attorneys came from the handful that advertised during shows like Jerry Springer (not, in my defense, that I ever watched a lot of Jerry Springer shows…at least that’s my story and I’m sticking to it) that portray insurance companies largely as tools of Satan. In other words, at least within the insurance industry, policyholder attorneys and public adjusters have not historically been held in the highest esteem. However…. What I’ve discovered over the past five years is that this view is largely as invalid as the general public negative view of insurance agents and companies. Yes, there are attorneys and adjusters who really have no business in ‘our’ business. But the same can be said about those operating within the carrier side of the industry. One of the first policyholder attorneys I’ve gotten to know is Chip Merlin who heads up the Merlin Law Group, based in Florida, but with offices around the country. I first became aware of Chip when he reached out to me after the publication of my first insurance book “When Words Collide: Resolving Insurance Coverage and Claims Disputes.” Presenting largely a propolicyholder view of insurance contracts (that is, the premise that the purpose of insurance is to insure, not look for a way out of a claim), it’s not

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On Policyholder Attorneys and Public Adjusters continued

unexpected that a policyholder attorney would receive a book like this in a positive way. But I was surprised at what a vocal and public advocate Chip has been for the book. My guess is that he’s probably responsible for the sale of at least a couple thousand books to a market I never fully realized. I became a daily reader of his law group’s blog and found it different from what I expected. He and his staff often blog about court cases that an insured loses. One would expect them to tout predominantly policyholder wins, but just the opposite is generally true. The point of this approach is that not everything is covered and a particular adverse court case is a lesson learned in preventing uncovered losses. That’s exactly the point of my “When Words Collide” book. I met Chip in person not long before the pandemic hit when he arranged for me to speak at a public adjusters conference in Orlando. My experience there and since went a long way towards dispelling some of the myths about public adjusters. I was impressed by the enthusiasm and earnest commitment of the attendees to doing the right thing, as well as their knowledge about insurance contracts and industry operations. It was a group of individuals every bit as professional as what I’ve found in decades of attending CPCU conventions.

Most recently, I was contacted by a public adjuster who told me he had read my “When Words Collide” book multiple times. Nathan Ortiz of Bravura Claims Negotiation, LLC emailed me about a rather complicated claim he was attempting to resolve involving water damage and fungus remediation. He presented his coverage opinion in a very well thought out, logical and structured approach. His focus seemed to be on doing what’s right and what is unambiguously called for in the insurance contract. Like Chip Merlin, I also noted that his LinkedIn page included even-handed information like how to work with and not against agents. Policyholder attorneys and public adjusters are not the enemy. Like Coach Dale of the Hickory Huskers, give them a chance.

Since that time, I’ve gotten to know remotely several public adjusters whose qualifications, knowledge and professionalism rival most any of the agents and adjusters I’ve known within the industry. One such individual is David Princeton of Advocate Claim Service, LLC. David is a highly intelligent and knowledgeable public adjuster working on a law degree. We have had some enlightening discussions and debates on LinkedIn and, while we don’t always agree on coverage issues, his opinions and interpretations are always well reasoned and passionately and professionally articulated in a sincere and compelling way. www.viaa.org

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COMPANY & AGENCY NEWS 40

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Vermont Mutual Donates $15,000 to the Vermont Foodbank Vermont Mutual Insurance Group® recently presented a check for $15,000 to the Vermont Foodbank as part of their partnership with UVM Athletics and the Cats Win, Community Wins initiative. The check was presented by Dan Bridge, President and CEO of Vermont Mutual and Mark McDonnell, Executive Vice President and COO. The Catamounts secured 95 wins in 2021, bringing the donation amount to $9,500. However, to further help the Vermont Foodbank efforts, Vermont Mutual “rounded up” and increased the total amount to $15,000. The Cats Win, Community Wins is a community-based initiative by Vermont Mutual and UVM Athletics that gives back to local organizations. As part of their multi-year agreement, Vermont Mutual will give $100 to a specified local charity for each Catamount win – inclusive of every team, every sport, home and away victories. Fans recognize this initiative as “Cats Win, Community Wins” and is supported through in-game promotion, social media, broadcast and print. The Cats Win, Community Wins beneficiary selected for the new 2022 Catamount’s season is the Committee on Temporary Shelter (COTS). COTS advocates for long-term solutions to end homelessness and provides emergency shelter, services, and long-term housing for Vermonters who are experiencing homelessness or are marginally housed.

The Richards Group is Hiring The Richards Group is Hiring and is currently seeking: 1. Investments Account Executive- Remote/Nearby to Norwich, VT: https://smrtr.io/7F73n 2. Investments Account Executive- Remote/Nearby to Brattleboro, VT: https://smrtr.io/7F6TF 3. Personal Lines- Account Manager- Remote/Nearby to Manchester, VT: https://smrtr.io/7cfW8 4. Personal Lines- Account Manager- Remote/Nearby to Bennington, VT: https://smrtr.io/7cfWn 5. Receptionist: Brattleboro, VT https://smrtr.io/73x8z 6. Operations Software Specialist, IT: https://smrtr.io/7G3yt