GREEN MOUNTAIN AGENT A PUBLICATION OF VERMONT INSURANCE AGENTS ASSOCIATION
June 2016
Green Mountain Agent is a publication of
In This Issue: June 2016
600 Blair Park Road Suite 100 Williston, VT 05495 Phone: 802-229-5884 Fax: 802-876-7912 www.viaa.org
4 Invitation to the 110th Annual Convention
President Daniel Lussier
11 Federal Update: Multi-State Producer Licensing
VIAA Officers Vice President Peter Richards Secretary/Treasurer Erin Odell
IIABA & PIA State National Director Ron Bixby
Directors Chip Ams
7 Legislative Update 8 Young Agents News Brief 10 Help Wanted
Features 13 Agency Management: Adjust for New Overtime Law 16 Agency Management: 3 Ways to Compensate Personal Lines Producers 24 Selling Success: Stand Proud! 28 E&O: Mergers & Acquisitions Exposure
News
Alan Kinney Paul Plunkett
Staff Executive Director Mary Eversole meversole@viaa.org
GMA Publication Design Thorin Markison thorinmarkison.com
31 In Memoriam: Stephen Paul Stanitis 32 Hickock & Boardman 33 Union Mutual
Are you trying to reach Vermont’s Independent agent’s? Do you have a great ad that represents your company and have nowhere to place it? Are you looking to hire? Place your ad in VIAA’s monthly publication and have the opportunity to advertise and market to Vermont’s Independent Agents.
Questions on how to place an ad? Contact Mary Eversole at meversole@viaa.org for placement options and advertising rates. Vermont Insurance Agents Association ATTN: Advertising/ PO Box 1387/ Montpelier, VT 05601
It is my distinct honor, as Convention Chair, to invite you to participate in VIAA’s 110th Annual Convention, at the Burlington Hilton September 22, 2016. We all work hard and most of us play hard, that is why we have chosen the theme “Laissez Les Bon Temps Rouler!” Translation: Let the Good Times Roll. I also have a deep affinity for New Orleans and glad to share some of its traditions with you this year. We are honored to have, William C. Wilson, Jr., CPCU, ARM, AIM, AAM, Vice President of Education and Research and founder and director of the Virtual University of the Independent Insurance Agents & Brokers of America, as our Continuing Education instructor this year. Bill Wilson is the nation’s foremost leading expert on form, coverage, and technical issues. He will share his wit and wisdom and teach agents how to compete with direct writers and to stay out of trouble! The Young Agents Committee is in charge of the entertainment and I’m excited to see how they out do themselves after last year’s phenomenal casino night. They’ve added a Young Agents Brew Tour networking event in the afternoon before the opening of the tradeshow to kick off the festivities early. Overnight accommodations are available at the Hilton Burlington Hotel to convention participants at a discounted rate of $189/night for September 21, 2016 – September 24, 2016. The special room rate will be available until August 30th or until the group block is sold-out, whichever comes first. 4
Our annual golf event will be held Friday, September 23, at The Country Club of Vermont, in Waterbury. The CCVT course is a Graham Cooke design located on a site that can only be described as a magnificent setting for a golf course, offering stunning views in all directions. Built among the beautiful vistas of the Green Mountains, the course features a front nine reminiscent of an Irish links land, while the back nine wanders through the trees and hills of Vermont. It offers a very playable yet challenging par 72 layout featuring dramatic elevation changes, rolling fairways, and large undulating bent grass greens. The greens, tees and fairways are framed by blue grass rough and outlined by native grasses. Remember, Customer Service Representatives and Young Agents, with VIAA member agencies, attend this event free of charge, as a way to give back to our members. Registration opens on-line June 13, 2016. The VIAA 110th Annual Convention and Golf Tournament will be a memorable event. We look forward to providing a world class insurance education experience and unique networking opportunities. See you there! Laissez Les Bon Temps Rouler,
Pete Richards, The Richards Group VIAA Convention Chair & Incoming President
SAVE THE DATE FOR VIAA'S LARGEST AND MOST ANTICIPATED EVENT OF THE YEAR! Approximately 300+ member agents, Young Agents, and company representatives join together to network and learn. This event is an invaluable opportunity for insurance professionals of all ages, rank, and experience levels and is a must-attend for all independent agents. This year, the Annual Convention includes informative Continuing Education sessions with William C. Wilson, Jr., CPCU, ARM, AIM, AAM and lively social events along with golf. The Young Agents Committee is hosting Casino Night. Local and national exhibitors will be in attendance to provide updates on their
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FOR MORE INFORMATION OR TO REGISTER, GO TO VIAA.ORG 6
oll! es r m i t d goo e h t Let
Legislative Stalemate With Democrats holding the Governor’s office and overwhelming margins in the Vermont House and Senate, one might have expected the 2016 session to be filled with a succession of liberal initiatives, following the relatively consistent trend over the last twenty years. During that time, lawmakers have enacted major changes in health care, marriage, taxes, energy and education that have left virtually no aspect of Vermonters’ lives untouched. This year was different. Democratic leaders pursued an agenda that was far less ambitious and partisan than any in recent years. Lawmakers were reluctant to push initiatives that were viewed as anti-business. It’s not that lawmakers weren’t busy. The legislature passed 192 bills this biennium, which is very close to the average of 201 for the three prior sessions. To varying degrees, each of them mattered to one interest group or another. But they all lacked the historic significance that was present in at least some of the bills that were passed in each biennia of the last twenty years. This was, instead, a workmanlike session, with the goal at the outset to complete the basic business of governing, and then adjourn. The legislature’s rare departure one day ahead of schedule was symbolic of the desire to finish work and leave. Although legislators were eager to avoid being viewed as anti-business, they showed little interest in passing bills that would improve the state’s business climate. Exhibit A on that list was H.867, a bill that would have clearly established who may be an independent contractor for workers’ compensation purposes. The House Commerce and Economic Development Committee spent weeks hammering out the details of a bill that received
bipartisan and unanimous support by the committee and the business community. When the bill hit the House floor, however, organized labor voiced its strong objection, and the bill was pulled back. House leaders desperately sought a compromise that could pass the House, but none was to be found. The bill was pulled from the floor in the final days of the session. The legislative stalemate on business issues resulted in large part from a lack of direction from the top. Holding part-time positions with few staff, lawmakers rely heavily on the Administration to set their agenda. But the Administration’s agenda focused almost exclusively on two issues that fell too far outside of the mainstream, even for Vermont, to gain much traction: marijuana legalization and divestiture of state funds from coal and oil stocks. Vermont continues to face a long list of problems that pose a tangible threat to the state’s future wellbeing: a shortage of affordable housing; dwindling numbers of young people; a growing rate of drug addiction; unaffordable higher education; and high tax rates. The 201516 legislature seemed unwilling or unable to go anywhere near most of them, but perhaps next year they could form the basis for a postliberal agenda that begins to address some of the core challenges that defy ideology.
John Hollar
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VERMONT
YOUNG AGENTS BUSY PLANNING EVENTS FOR SUMMER AND FALL The Vermont Young Agents Committee met on May 19 in Brattleboro. The Richards Group hosted the event and SAFECO sponsored lunch. The meeting focused on upcoming summer and fall events including the Trusted Choice Junior Golf State Qualifying Tournament, Young Agents Leadership Conference, Make-A-Wish Walk for Wishes and the Young Agents Events at the VIAA Annual Convention and more.
VT YAC 2016 CALENDAR OF EVENTS* TBA
Young Agents Fun Day Vermont Lake Monsters
Burlington, VT
August 25
Quarterly Meeting Hosted by Union Mutual
Montpelier, VT
September 8
VIAA Annual Business Meeting
Montpelier, VT
September 9 -10
YAC Leadership Conference
Chicago, IL
September 11
Make-A-Wish Walk for Wishes
Manchester, VT
September 22 – 23 VIAA Convention
Burlington, VT
October 12, 13, 25 CPIA Designation
Williston, VT
Dates, times and events are subject to change. Additional events will be added throughout the year. Check for updates via emails and the Vermont Young Agents Facebook Page. Interested In Joining? Questions? please email Kerri O’Connor, Vermont Young Agents Committee President.
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Please send your resume to: Dan Rodliff Vice President, NFP P&C PO Box 2243 South Burlington, VT 05407 Or Email: dan.rodliff @nfp.com
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The Latest on Streamlining Multi-State Producer Licensing Despite their painstakingly slow pace, efforts to streamline multi-state producer licensing took a positive turn late last week when independent agents received representation on the National Association of Registered Agents and Brokers (NARAB) Board of Directors. President Barack Obama named Big “I” member Angela L. Ripley, president of VW Brown Insurance Service in Maryland, to the board. Background The purpose of NARAB is to establish true licensing reciprocity among states. Once the NARAB entity is functional, agents may choose to become members, which will allow them to handle non-resident licensing needs for different states simultaneously and identically. President Obama signed the NARAB Reform Act into law in January 2015, following nearly a decade of advocacy on behalf of our national affiliate, the Big “I”, and others in the independent agent community.
Progress Under the law, the NARAB Board of Directors must be comprised of 13 members: eight state insurance regulators and five industry representatives. Appointment of the directors was to occur within 90 days of the law’s enactment, and those members were to hold their first meeting within 45 days of their appointment. However, 15 months after the law’s passage, Ripley’s nomination marks only the fifth to occur. The insurance industry and Congress have been getting antsy for progress. Last summer the chairman of the U.S. House Financial Services Subcommittee on Housing and Insurance sent a letter to the Federal Insurance Office noting the importance of NARAB for agents and brokers and requesting a timeline for appointing the board. And then in December 2015 a bipartisan group of seven Senate Banking Committee members wrote President Obama to ask him the same. We’ll continue to monitor the progress of NARAB implementation and provide updates as they become available.
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Agency Management Agencies Need to Adjust for New Overtime Law By Heather Wright
Highlights & Next Steps:
Last week, the U.S. Department of Labor announced long-anticipated changes to the salary requirement for the “white collar” exemptions to overtime rules under the Fair Labor Standards Act (“FLSA”). The FLSA requires that all employees earn overtime pay for time worked in excess of 40 hours in a week, unless the employee is exempt from the law’s requirements. For “white collar” exemptions (including the executive, professional, and administrative exemptions), this requires the employee to perform certain primary duties AND earn a minimum weekly salary set by regulation.
• The salary test for “white collar” exemptions will raise to $913 weekly ($47,476 annually) effective December 1.
The changes announced last week double the salary requirement from $455 per week ($23,660 annually) to $913 per week ($47,476 annually). The new salary test will be effective December 1, 2016. If an employee earns a salary less than $913 per week, the employee must be paid overtime for hours worked in excess of 40 each week, regardless of the type of work performed. In the future, the salary test will be reviewed and increased every three years. Thus, employers should not necessarily adopt a default approach of simply increasing the salary of white collar employees currently earning less than $47,476, as the minimum will change on an ongoing basis. Just increasing the salary rates without considering broader implications to your compensation philosophy may result in wage compression and distorted compensation packages.
• The salary requirement for the Highly Compensated Employee exemption will increase to $134,004 from $100,000 annually. • Moving forward, the minimum salary requirement will increase every three years. • Employers should identify any exempt employees who currently earn a salary of less than $913 weekly. • Work with your HR Manager or an employment attorney to develop a sound strategy for compliance that meets operational needs and workplace culture. Heather Wright is an attorney with WrightJones, a law firm focusing exclusively on labor and employment law for New England businesses. To discuss the new FLSA regulatory changes, or any other HR or employment law concerns, Heather can be reached at (802) 497-3480 or wright@wrightjoneslaw.com.
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Agency Management 3 Ways to Compensate Personal Lines Producers by Jacquelyn Connelly If you’re like most independent agencies, you’ve got commercial lines producer compensation down to a science. But chances are you can’t say the same about personal lines. Al Diamond, president of Agency Consulting Group, Inc., works with myriad agencies on the issue of personal lines producer compensation. “Every place I go, they’re sort of mystified and stumped,” he says. “They have no idea how to pay personal lines producers.” Wondering what your options are for developing a successful personal lines producer comp plan—and sticking to it? Here are a few things to keep in mind. Pick Your Poison Typical payroll for personal lines producers amounts to about 30% of their book regardless of agency size, according to the 2014 Best Practices Study. But firms arrive at that 30% in a variety of ways. The Reagan Producer Recruiting & Development Study outlines three examples: COMMISSION WITH DRAW BASED ON PERCENT OF PRIOR YEAR’S PAY
have not been formally referred, and treating personal lines like commercial lines. As a result, the agency doesn’t have any purely personal lines producers—all salespeople produce all lines of business. “Why not incentivize the producer to completely round out the account and get all lines of coverage?” says Justin Moundas, executive vice president and principal. That “ability to pivot” is crucial for York’s validated producers, who receive commission based on a business percentage and a set renewal percentage, regardless of line of business. “We’ve had plenty of times where someone goes out and they think they’re going out with the commercial, but they come home with the personal policy, and that’s how we win the account,” Moundas says. Five personal lines producers work with entrepreneurs and affluent families at Swingle, Collins & Associates in Dallas, where personal lines makes up about 15% of business. The personal lines comp model is simple: draw vs. commission, same as commercial lines.
Diamond suggests paying validated personal lines producers 30% commission on the retained book of business for which they are the producer at the end of the previous year, plus a benefit in the form of increased compensation of 40-45% of growth beyond what they did last year. “If they lose business because people drop off, they may not get a raise next year,” he points out.
Although the margins are different, “the producers love it,” says Frank Swingle, founder & CEO. “Before we hire somebody, we make sure they’re on board with that type of structure. We’ve lost candidates to people that are offering salaries, and that’s fine. When you’re in the commission business, commission’s ultimately how you get rewarded. If you’re on a salary and you don’t sell anything, you’re not going to have a salary very long.”
York International Agency, LLC in Harrison, New York grows personal lines at a minimum of 15% a year by focusing exclusively on high net-worth clientele, refusing to write monoline policies or work with clients who
The same holds true for Baldwin Krystyn Sherman Partners in Tampa, Florida, which employs a pre-specialized private client group consisting of niche “advisors” (the firm’s nomenclature for “producer”) that
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focus exclusively on assisting high net-worth individuals and families with their personal insurance and risk management needs. Inside that group, 12 advisors receive either a draw with pure commission or a base salary plus commission. They also receive renewal commission on their book, because “they’re expected to be involved in the renewals and work with the clients on an ongoing basis,” explains Trevor Baldwin, partner. BASE SALARY PLUS INCENTIVE FOR NEW BUSINESS WRITTEN Personal lines makes up about 18% of the agency book at PayneWest Insurance, a $100 million-revenue agency with about 30 locations throughout Idaho, Montana, Oregon and Washington. The agency divides 111 personal lines producers into two roles: sales executives, who are responsible for bringing in new relationships, and account specialists, who focus on proactively nurturing and developing client relationships.
For a validated producer, PayneWest’s personal lines compensation plan includes a base salary plus 40% new business incentive. The benefit? “Instead of having people plateau and limiting the new business they could write or limiting the amount of business they could grow, we have personal lines producers that will produce north of $100,000 of commission revenue in a given year,” explains Stephen Smelley, COO. “You can’t do that if you’re focused on trying to personally service everything you’ve built over the last three or four or five years.” By the same token, “when you’ve got somebody assigned to a client and the client knows that’s who’s going to be handling their business, that specialist is going to be very proactive,” Smelley explains. SALARY PLUS DISCRETIONARY BONUS BASED ON ACHIEVEMENT Baldwin Risk Partners has multiple subsidiaries that operate as standalone insurance agencies, including The Villages Insurance—a
Fresh Off the Boat Most agencies compensate new producers differently than established ones. According to the Reagan Producer Recruiting & Development Study, personal lines producer success rates increase as initial compensation increases. York International Agency compensates first-year personal lines producers with a salary only. In the subsequent two years, producers maintain a base salary and also earn commissions based on their success in the previous year, says Justin Moundas, executive vice president and principal. As a result, salary may decrease in the second year, but generally in proportion to first-year commissions. “We have greater success when we provide producers with a significant compensation plan for their first two or three years,” Moundas says. “We see that as an investment, just like looking to change over to a new agency management system.” At PayneWest Insurance, new recruits receive a salary plus 15% new business commission, instead of 40% like a validated producer. “Their salary is obviously their biggest
portion of their comp in their startup phases,” explains Stephen Smelley, COO, who notes the agency pairs new producers with mentors who help them sell and receive the additional balance out of the total 40%. Al Diamond, president of Agency Consulting Group, Inc., suggests using a salary not yet earned approach for new recruits. “If I bring somebody new in and I have to pay them $30-40,000, that amount of compensation is anchored until they generate a little over three times their compensation in revenue,” he explains. The process usually requires three years. If the starting salary is $40,000, the producer must generate $40,000 of gross agency commission in the first year before qualifying for any bonus (for that, Diamond suggests 25% of sales over $40,000). In the second year, their salary remains at $40,000, but now they’re obligated to achieve an $80,000 total book of business. In the third year, the goal is to achieve three times their compensation—eventually landing at compensation that totals about 30-33% of their book of business. —J.C. 17
Agency Management predominantly Main Street personal lines “If you’ve got somebody who’s comped on agency in The Villages, Florida that employs new-new sales, and they’re very good at it, we about 75 staff members, 24 of whom are advisors. need people to mentor other people to be very good at that,” Smelley explains. “We can add There, the agency pays a base salary based on additional comp for mentoring, being team on licensure level, experience and skillset leads and focusing on new client acquisition and utilizes a bonus program based on and/or client retention specifically, so they can number of new sales and type of new sales increase their compensation by doing what they by policy type. Producers in this model do the best and sharing that with others.” do not receive renewal compensation. Baldwin says the differing comp plans make sense since the two types of insurance require a different sales skillset. “At the end of the day, we’re trying to design a compensation plan that motivates and incentivizes our advisors to source and generate new business in the areas we’re focused on,” he explains. For the private client group, that means personal lines accounts that generate north of $1,000 of commission revenue. For Main Street business, it’s about cross-selling and upselling monoline policies. In addition to the base salary and new business incentive, PayneWest also offers its personal lines producers a 10% bonus. “We’ll give them 50% new business basically back to dollar one if they produce more than $50,000 in new business in a given year,” Smelley explains. Account specialists, who are required to manage a book of business, enjoy additional incentives for retention and account rounding, while sales executives have more incentives for pursuing new relationships. Although some of PayneWest’s personal lines producers would prefer a comp plan that more closely mirrors that of commercial lines—commission based on a percentage of the book, plus commission for new business—the agency created alignment to focus on the client by creating even more incentives within the two specialized tracks.
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Falling Short?
But how can you hold producers accountable for getting the job done? “What I count on is some competitive pressures between producers, and what I measure is sales activity,” Diamond says. “I want to know how many times these producers are swinging the bat.” Measuring sales activity works for PayneWest, where each salesperson has a personal business plan and specific monetary- and activity-based goals and adheres to a “5x5 for prospecting,” which requires creating five new relationships, five days a week for a total of 25 new personal lines relationships each week. The agency measures progress through both management and reporting details as well as peer accountability, including regular calls with the personal lines teams and personal linesspecific management staff that Smelley says “gets right into the mix of things and helps out.” But York doesn’t rely on quantifiable measurements of any kind. “We tried it in the past, but we find that when someone’s getting compensated just because they scheduled appointments, it doesn’t drive the right behavior that’s necessarily producing good results,” Moundas says. “Sometimes people are making appointments just to make an appointment.” Instead, the agency holds weekly sales meetings and utilizes a mentoring program
that matches each new producer with a seniorlevel individual “who has a vested interest in seeing that person succeed,” Moundas says. Baldwin Krystyn Sherman Partners distinguishes accountability processes between new and veteran producers. “Before an advisor’s considered to be validated, where their book of business justifies the compensation we’re paying them, then we have more qualitative measurements around prospecting, activity, center of influence meetings, things of that nature,” Baldwin says.
The most important driver of accountability? “Hiring the right people—the right people are going to look at their reports and they’re going to be self-motivated to get the job done,” Swingle says. “If we hire people that require constant management, we’ve hired the wrong people under our system.” Jacquelyn Connelly is IA senior editor.
But post-validation, “accountability really becomes focused on sales outcome results,” Baldwin says. Every advisor puts together a yearly business plan including set new business and retention goals, “so we measure both pure new business and what we call net new business on a monthly basis, and then compare that to goals for every advisor.”
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Stand Proud! Phil Schuman The life of a salesperson is fraught with challenges. We are only as good as our last month’s numbers; we are not always made to feel welcome when we’re out knocking on doors or making phone calls and we face rejection as a part of our daily life. To make things even tougher, over the years the profession of selling has sometimes received a negative stigma. So it’s important to take a moment to consider what a salesperson really is, and appreciate what a critical role we play. The sales department is the engine room; the lifeblood of any organization. Without an effective sales effort there is effectively no business. If the organization is not growing at a pace quicker than the inevitable attrition, it is literally dying. A sales professional must hold their head high knowing they play an absolutely crucial role in the success of any business; contributing an immediate, tangible and profound part in growing the organization. In fact every other employee’s continued compensation is reliant on the salesperson going out and bringing in the business! My late father was the quintessential Englishman and master salesman who toured the length and breadth of Britain teaching, guiding and inspiring sales representatives of all levels to be the very best they could be, helping them earn more for themselves and for the companies they represented. But he also taught much more than just how to make money. His legacy was teaching the ideals of selling as an honorable profession and how to build solid and lasting relationships with customers. Gone are the days of those slick sales types putting one over on the naïve prospect. 24
For many reasons, including the access we all now have to information online, the customer is savvier than every before. The best salespeople know that rather than a deal simply being “closed”, a relationship must be “opened”. To be truly effective, a salesperson must be a consultant and advisor, with a genuine understanding of the customer’s unique needs and must foster a relationship that is built on trust. And with this comes the two most powerful and magical sales sources of all: recurring sales and enthusiastic referrals from existing customers. According to Dun & Bradstreet the number one reason for business failure is lack of sales. By the same token the number one reason for business success is abundant sales. And it is we the salespeople and how effective we are in our profession that will determine the level of our businesses’ success. And when a sale is made there is a domino effect that provides employment for everyone else in society. How can we not hold our heads high when we appreciate just how important we are and are equipped with the right tools to deliver on our responsibility to help the client and keep the dominos falling! As sales guru Brian Tracy so rightly says: “Nothing happens until somebody sells something!” So stand proud, hold your head high, and in the words of William Shakespeare: “Be bloody, bold and resolute!” Happy Selling! The Schuman Group empowers sales teams with real world tools through sales training, coaching and consulting services.
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Mergers and Acquisitions Can Create E&O Exposures By Barbara Rocco It’s a familiar tale: An agency has enjoyed great success, so its principals decide the time is right to expand their business and acquire another agency. After finding one that will blend in perfectly, they arrange meetings, sign contracts and the deal is done. Nothing left to do but enjoy the payoff, right? Not so fast. The assumption that “bigger is better” can lead to disaster if the agency’s focus is on growth alone, with no attention to E&O risks. What if the agency you’re acquiring made a few missteps that escaped attention? When those mistakes finally come to light, how can you ensure your agency isn’t stuck footing the bill? Here are a few steps to keep in mind. 1) Learn about the acquired agency’s policies and practices as soon as you can. Multiple locations increase exposure to professional liability claims: The larger the agency, the more people involved, and the greater the opportunity for error. 2) Establish a plan regarding each employee’s responsibilities. This should include a review of current responsibilities and training on how to handle business the acquired agency previously procured. 3) Actively integrate successful, well-established procedures into the merged agency. Meet with new employees and educate them on procedures and expectations. Consistent and uniform utilization of policies and procedures is imperative as an agency grows. 4) Before the deal is finalized, the acquiring agency should confirm that the purchase contract includes indemnification language protecting it from claims related to the negligence of the acquired agency, in case it committed a wrongful act prior to the acquisition. Similarly, 28
the acquired agency should purchase tail coverage for its own protection. 5) Notify your E&O carrier about the acquisition. Acquiring another agency typically means a change in risk, so E&O policy language commonly requires reporting of all mergers & acquisitions within 90 days. But not all E&O policies are created equal: Effective Sept. 1, Swiss Re Corporate Solutions will add an enhancement to its policy which increases the maximum reporting time to 120 days. Bigger can be better, but only if you take the proper steps to learn about the new agency, install your culture, educate your people and clearly document that your firm is not taking on the liabilities of the acquired agency for past mistakes. Barbara Rocco is an assistant vice president and claims specialist at Swiss Re Corporate Solutions and teleworks out of the Chicago office. Insurance products are underwritten by Westport Insurance Corporation, a member of Swiss Re Corporate Solutions. Case Study: What might a typical E&O scenario look like in an M&A? Consider the following example: A successful agency, “Buyer,” reaches an agreement to acquire a smaller firm, “Seller,” whose principal is retiring. Some, but not all, of Seller’s employees will move to Buyer. The contract includes indemnification language, and Buyer makes Seller an additional insured on Buyer’s E&O policy, with a retroactive date reflecting the date of acquisition. Seller terminates its E&O policy as of the date of the acquisition, but purchases tail coverage. So far, so good. Here’s what Buyer doesn’t know: Seller had procured workers compensation coverage for a longtime client, Widget Co., which had multiple facilities and locations. At renewal, but before the acquisition, Widget Co. requested a separate
workers comp policy for one of its out-ofstate facilities. Seller went to the state workers comp pool to procure coverage. Afterwards, Buyer completed its acquisition of Seller.
never informed that the policy was not issued, much less refunded the premium. The client has little choice but to file a lawsuit against both agencies, after which it will find a new broker.
The Widget Co. account had still not been reassigned when, several months later, one of its employees was injured on the job. At this time, it comes to light that the pool never issued the policy, but instead returned the premium. The precise timing of the returned premium and notification of “no issuance”—right around the agency acquisition date—is a matter of dispute between the two agencies’ employees.
If Buyer and Seller clearly articulated procedures and responsibilities and notified all employees, someone may have caught the fact that the policy was never issued and the premium had been returned, and the agencies could have taken corrective actions in a timely manner. Instead, a client went without coverage—and two groups of employees who are meant to be on the same team ended up pointing fingers at each other. —B.R.
Seller’s employees claim it was Buyer’s responsibility to complete the follow-up and issue the policy, and if not, advise the client. Buyer’s employees disagree, arguing that their agency planned to perform a review prior to the next renewal. Regardless, Widget Co. was
Reprinted with permission from IA Magazine.
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In Memoriam
Agency News
Stephen “Steve” Paul Stanitis Stephen Paul Stanitis, 69, lost his courageous battle with cancer on January 22, 2016 with his beloved family near.
Steve was born 3/13/46 in Northampton, MA to Joseph and Evangeline (Mayo) Stanitis and went to schools in Amherst, graduating UMass in 1968. After graduation, he served in the Army. Steve then went on to receive his MBA from Western New England College.
He began his long career in insurance with USF&G as an underwriter and then in marketing. Steve went on to work for Shelby Mutual in Marketing. His next career move was as commercial lines manager at Jones Neylon Insurance Agency in Amherst and later becoming an owner. In 1993 he went to work for Co-operative Insurance in Middlebury, VT as its marketing rep and retired in 2008 as President of its subsidiary, UI Insurance Services. Steve enjoyed his relationships with the agents and was gratified to help them in achieving success. He also served as a board member for the Vermont Insurance Agents Association. Steve’s greatest passion was time with his family and friends. He loved to travel, golf, woodworking, building his four homes in MA and spending time near the ocean.
Steve is survived by his beloved wife, Terrell Titus, daughter Julie Thompson her husband Brian and granddaughters Emery and Lillian of Greenfield, MA, son Michael Stanitis of Milford, CT, daughter Lesley Jenne of Burlington, VT, sister Cindy Dade and her husband, Ron of Amherst, MA and brother Gary and his wife Judy and their children Amy and Jackie. He is also survived by his brother-in-law Les Titus and his wife Lynn of Melbourne, FL and his children Meghan and Kelsey, his mother-in-law Margaret Titus and cousins and aunts and uncles in MA and Maine. He made a huge difference in so many people’s lives and will be terribly missed.
Visiting hours were held on Monday, January 25 from 3 to 5 pm with a prayer service to follow at 5 pm in the Ready Funeral Home South Chapel, 261 Shelburne Road, Burlington, VT. All were invited to join the family for a reception following the service at the Eagles Club, 1233 Shelburne Rd. So. Burlington. In lieu of flowers, donations may be made to Make A Wish Vermont or Healing Winds VT.
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Agency News Mary Farley elected Vice President for Hickok & Boardman Insurance Group Hickok & Boardman Insurance Group is proud to announce the promotion of Mary Farley to Vice President of Operations and Administration. Farley was elected an officer for the agency during this year’s annual Directors meeting. “Mary’s expertise in organizational development and structure leads our agency to strengthen our internal systems and to develop the next generation of talent to deliver excellence to our clients.” said Scott Boardman, President of the agency. As Vice President of Operations and Administration, Farley will continue to be responsible for the agency’s operations and internal management of teams and systems. “It is an honor to be elected an officer for an agency that is so invested in the community and socio-economic fabric of Vermont,” Farley said. Farley joined the Hickok and Boardman Insurance Group as the Director of Operations and Administration in September of 2013. She holds her MBA from Suffolk University and her Bachelors from Long Island University, C.W. Post. Farley’s diverse background in executive management includes organizations such as FedEx, Sunrise Senior Living, and Spalding Sporting Goods. Farley resides in South Burlington with her husband, Shaun, and their daughter, Amelia.
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Mary Farley
Company News Union Mutual Extends Sponsorship of Special Olympics Vermont Summer Games
Union Mutual, a central Vermont-based insurance provider, will present the 2016 Special Olympics Vermont Summer Games June 3-5 at the University of Vermont, extending its lead sponsorship through the 2018 Games. Athletes will compete in swimming, track and field, bocce, and softball. “We are proud to build on the relationship established last summer between Union Mutual and Special Olympics Vermont,” Union Mutual President and CEO Michael Nobles said. “The Summer Games are a chance to showcase the courage, determination and pure joy for these tremendous athletes, and we are honored to once again share in that experience with them. The experience for the athletes and our volunteers was life-changing in 2015, so Union Mutual has decided to make a long-term commitment to Special Olympics Vermont and will be the lead sponsor of the summer games for the next three years. As a Vermont-based company founded on the promise of helping our neighbors, we look forward to many more fantastic weekends alongside the athletes and their families.” Summer Games is Special Olympics Vermont’s largest competition event of the year featuring nearly 500 athletes representing every Vermont county. The weekend begins Friday, June 3
with Opening Ceremonies in Patrick Gym and the culmination of the Law Enforcement Torch Run. Opening Ceremonies will also feature guest speaker Andy Newell, a Vermont native sponsored by Union Mutual and three-time Olympic Nordic skier who has been competing internationally on the World Cup stage and in World Championships for the past 10 years. “We are honored to continue our sponsorship of the Special Olympics Vermont Summer Games,” Union Mutual director of Marketing Alexis Markolf said. “The games are a symbol of celebration and community that Union Mutual is proud to be a part of. We are thrilled to partner with an organization that brings so many Vermonters together in the spirit of athletic competition.” A large team of Union Mutual volunteers will run Olympic Town activities and the award ceremonies throughout the weekend. “We are thrilled to have Union Mutual on board for another three years,” said Lisa DeNatale, President and CEO of Special Olympics Vermont. “Their staff is so invested in helping to create a positive and memorable experience for our athletes on and off the field.”
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Helen Collins hcollins@viaa.org