Armond Schwing Page 6
Jeff Albright
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Jeff Albright
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August 24-26 ~ Biloxi, MS
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JEFF ALBRIGHT
Chief Executive Officer
jalbright@iiabl.com
(225) 236-1366
BENJAMIN ALBRIGHT
Vice-President of Strategic Initiatives balbright@iiabl.com
(225) 236-1357
KAREN KUYLEN
Director of Accounting & Finance
kkuylen@iiabl com
(225) 236-1353
JAMIE NEWCHURCH
Director of Insurance Programs
jnewchurch@iiabl.com
(225) 236-1350
KATHLEEN O'REGAN
Director of Communications & Events
koregan@iiabl.com
(225) 236-1360
BRANDI VAN PELT
Insurance Programs Administrator
bvanpelt@iiabl.com
(225) 236-1358
DUSTIN WAMBSGANS
Agency Consultant
dwambsgans@iiabl.com
(225) 236-1361
LISA YOUNG-CROOKS
Director of Member Relations
lyoung@iiabl.com
(225) 236-1351
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July 2023
It’s safe to say that most people reading this newsletter are insurance industry professionals. So, it should come as no surprise to anyone reading this that we are currently experiencing a market crisis. Capacity is low, underwriting is extremely strict, and premiums have risen significantly. While this is the environment across the country, the situation in Louisiana is much worse than in most every other state.
Even our neighboring states, with whom we share many similarities including geographical disadvantages related to our propensity for catastrophic losses, are not facing the same level of market upheaval as we are right here at home. It begs the question, why?
There is a segment of our population that likes to lay the blame at the feet of the “Big, Bad, Insurance Companies.” But why are they only the “Big, Bad, Insurance Companies” here? Why are they able to make a go of it right next door?
Certainly, the biggest difference can be attributed to our legal system and the laws on our books. Louisiana has laws that do not exist anywhere else in the country. We also have versions of laws that differ in significantly worse ways than exist in other states.These bad laws drive up the number of claims and the cost per claim here at home. When that happens, carriers take notice and decide to use their resources in other places where ROI is better.It is simply business.
So, what can we, as an association, do to level the playing field? We must remain active in promoting good legislation, working to amend current legislation that needs change and killing newly introduced bad legislation before it gets on the books.
This kind of effort has always been a principal component of what IIABL has done. The staff is well respected at the Capitol, has great relationships and usually has immense success in
Armond Schwing
their efforts.The problem is, there are people who oppose our agenda and who benefit from the current system. To have the kind of impact we need for meaningful change it will take all of us to get involved.Even with the next legislative session at least 8-9 months away, it is not too early to commit to working hard for the change our industry desperately needs.
We need as much participation from each member agent as you can give. Support our efforts when you are called upon to do so. Respond to requests for grassroots efforts on legislation that impact us, our carriers and/or our insureds. Let it be known to anyone of us…the board or the staff if you have a relationship with a legislator that might be impactful. Your association needs you as much as you need your association.
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Remember, if we do not work for a better insurance climate in Louisiana, who will? Our responsibility to the people who trust us to look out for their best interest does not end with placing coverage for them.It requires a much broader approach.Working to give them better choices is a key component of that.
One of the most common questions IIABLs receives is about the nuances of the “ more than 3-year rule” for cancellation and nonrenewal of Homeowners policies in Louisiana. Most agents know about the law, but few understand the details of how the law applies.
There are actually two statutes that limit the ability of insurers to cancel or nonrenew Homeowners policies in Louisiana. It is important to note that Louisiana is the only state that has such a statute. The following are the relevant provisions of the two laws. These provisions are virtually identical.
R.S. 22:1265.D.
D. No insurer providing property, casualty, or liability insurance shall cancel or fail to renew a homeowner's policy of insurance or to increase the policy deductible that has been in effect and renewed for more than three years unless based on nonpayment of premium, fraud of the insured, a material change in the risk being insured, two or more claims within a continuous threeyear period of time within the five years preceding the current policy renewal date, or if continuation of such policy endangers the solvency of the insurer. This Subsection shall not apply to an insurer that withdraws from the homeowners' insurance market in this state or to policy deductibles increased for all homeowners' policies in this state. For the purposes of this Subsection, an incident shall be deemed a claim only when there is a demand for payment by the insured or the insured's representative under the terms of the policy. A report of a loss or a question relating to coverage shall not independently establish a claim. As used in this Subsection, the phrase "two or more claims within a
Jeff Albright July 2023
continuous three-year period of time within the five years preceding the current policy renewal date" shall not include any loss incurred or arising from an "Act of God" incident which is due directly to forces of nature and exclusively without human intervention.
(There are other provisions in the statute, which can be found HERE.)
R.S. 22:1333.C.
C. No insurer providing property, casualty, or liability insurance shall cancel or fail to renew a homeowner's policy of insurance or to increase the policy deductible that has been in effect and renewed for more than three years unless based on nonpayment of premium, fraud of the insured, a material change in the risk being insured, two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date, or if continuation of
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such policy endangers the solvency of the insurer. This Subsection shall not apply to an insurer that withdraws from the homeowners' insurance market in this state or to policy deductibles increased for all homeowners' insurance policies in this state. For the purposes of this Subsection, an incident shall be deemed a claim only when there is a demand for payment by the insured or the insured's representative under the terms of the policy. A report of a loss or a question relating to coverage shall not independently establish a claim. As used in this Subsection, the phrase "two or more claims within a continuous three-year period of time within the five years preceding the current policy renewal date" shall not include any loss incurred or arising from an "Act of God" incident which is due directly to forces of nature and exclusively without human intervention.
(There are other provisions in the statute, which can be found HERE.)
The first area of confusion with these statutes is the time frame upon which the protection for cancellation and nonrenewal. Most people in the insurance industry refer to these statutes as the “3-year rule.” This incorrectly leads people to believe that when the second renewal (third policy) is issued that the policy is protected. However, the statute reads, “that has been in effect and renewed for more than three years,” so it is actually the effective date of the third renewal (fourth policy) that establishes protection under these statutes. IIABL is trying to rebrand these statutes as the “ more than 3-year rule” to help reduce the confusion and misperceptions in the industry.
Once a policy has been in effect for “ more than 3years” an insurer may not cancel or nonrenew a policy except for very limited reasons. Exceptions that allow an insurer to cancel or nonrenew include:
The prohibition to cancel or nonrenew a policy also extends to the increase of individual policy deductibles, including various wind & hail, named storm, and hurricane deductibles. Insurers may establish a statewide minimum deductible (including wind deductibles) and increase all policies statewide to the new minimum deductible, but they may not increase an individual policy deductible on a protected policy.
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Continuation
There is also an exception for an insurer that
withdraws from the homeowners insurance market in Louisiana. This provision has created much confusion in recent years as a number of insurers have left the state. An insurer is able to nonrenew protected “ more that 3year” Homeowners policies if they are leaving the state.
Cancellation or nonrenewal for 2 or more claims with a continuous three-year period within the last 5 years may not include “acts of God” and must be formal demand for payment of a claim by an insured, it may not include questions about claims or coverage or an “incident report” that does not seek payment by the insurer.
The exception for “material change in the risk” is a tricky provision as such material change is somewhat in the eye of the beholder. Insurers may look at a homeowners risk and based on age of the roof, electrical, plumbing, etc. or based on their inspection which may find housekeeping or maintenance not up to their standards as a “material change in the risk” which would justify a cancellation or nonrenewal. A policyholder might see it very differently. The Louisiana Department of Insurance (LDI) has historically taken a very conservative approach to this exception. Generally, LDI has not considered age by itself to be a material change without some physical manifestation of significant deterioration and risk of loss. Insurers and agents are advised to be very careful with cancellations or nonrenewals based on “material change in the risk.”
One ancillary issue with the “ more than 3-year rule” relates to the termination of an insurer contract with an agency. R.S. 22:23 prohibits an insurer from soliciting the customers of an independent insurance agency. (Brought to you by IIABL to protect your “ownership of expirations.”) However, the “ more than 3-year rule” requires the insurer to continue to offer renewals to policies more than 3-years old. In order to protect our members, IIABL passed legislation to require insurers to pay independent agents 36 months of commissions on Homeowners policies that the insurer takes over after the termination of an agency agreement.
(4) When the agency contract is terminated and the insurance company is required by law to continue coverage for the insured; however, in that event, the insurance company shall continue to pay the producer commissions on such policies that the company is required to renew during the thirty-six month period following the effective date of the termination or three years, whichever is sooner. The commission shall be at the insurer's prevailing commission rates in effect on the date of renewal for that class or line of business in effect on the date of renewal for producers whose
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As you can see, there is a lot to these “ more than 3-year statutes.” We hope that is analysis is helpful to your understanding, but if you have questions, you can contact Benjamin Albright at BAlbright@IIABL.com or JAlbright@IIABL.com for more information or clarification.
The Louisiana Department of Insurance has issued Regulation 126 establishing the rules for the LA Fortify Homes Program (LFHP). LDI plans to open the Program for grant applications on or around October 1, 2023. Agents may want to start talking to customers now, so they can complete their LFHP profile and be prepared to apply quickly when the Program is open for applications before all of the grant money is gone.
The LFHP grants up to $10,000 for homeowners to upgrade their roofs to the FORTIFIED™ Roof standard set by the Insurance Institute for Business & Home Safety (IBHS). The program will help Louisiana homeowners strengthen their roofs to better withstand hurricane-force winds.
To apply for the grant, homeowners must visit www.ldi.la.gov/fortifyhomes to create a profile in the LFHP system, then when the application process opens complete and
Jeff Albright
July 2023
submit an online grant application. The application process will open periodically to receive online applications, which will accept a limited number of applicants on a first-come, firstserved basis. The first application period is expected to by on or around October 1, 2023.
The grant will cover the cost of the roof upgrade up to $10,000, which will be a direct payment to the contractor upon completion of the project and submission of required paperwork, including the FORTIFIED™ certificate from IBHS. Once selected, a grantee will pay all costs for the roof upgrade including permits, inspections, and construction costs beyond the amount of the grant, which is limited to construction costs. Grant funds are distributed directly to contractors. Homeowners are financially responsible for all costs beyond the full grant amount.
Most existing primary residences, including duplexes and similar structures, are eligible for
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the program. New construction homes, condominiums and mobile homes do not qualify. Homeowners are only eligible for their primary residence and will be asked to verify they have a homestead exemption on the property during the application process. Homeowners must also provide proof of an in-force wind insurance policy and in-force flood insurance policy if the home is in a Special Flood Hazard area. The home must be in good repair and eligible for upgrade to the FORTIFIED™ Roof standard as determined by a FORTIFIED™ Evaluation.
In addition, a FORTIFIED™ Evaluation is performed by a FORTIFIED™ Evaluator and is a required step in the grant process that determines whether the home can be upgraded under the LFHP and what work is needed to upgrade the home. Homes must be in good repair as determined by a FORTIFIED™ Evaluator. Homeowners are responsible for paying the evaluation fee, which is typically between $300
and $500. A list of FORTIFIED™ Evaluators can be found here. We recommend confirming there is at least one FORTIFIED™ Contractor that is willing to perform work before paying for an Evaluator to inspect the home. A list of FORTIFIED™ Contractors can be found here.
An evaluation is also performed after the work is complete to confirm the home was properly upgraded to the FORTIFIED™ Roof standard. Homeowners are responsible for paying the evaluation fee. After the work is complete and your home is upgraded to the FORTIFIED™ Roof standard, you will be issued a certificate that can be shared with your insurer for a discount on your premium. When you sell the house, the certificate can be passed along to the new owner.
The wind mitigation standard adopted by the LFHP is known as the FORTIFIED™ Roof standard and was developed by the Institute for Business & Home Safety (IBHS). All materials used in the Fortified standard have been extensively tested and approved. Please refer to the IBHS site for more information about specific materials e.g., metal roof panels. More information about the FORTIFIED™ Roof standard is available at www.fortifiedhome.org. Wind mitigation consists of construction methods that strengthen a building against severe storms, high winds, and wind-driven rain. Learn more about mitigation-related tax deductions and premium discounts by clicking here.
Buildng our ndependent Agency's Future
Are you a young agent anxious to become a better leader in your agency? Do you struggle to relay information to clients about this hard market; are you speaking their language? Is technology a challenge for your agency? Are you using what you have to its fullest extent or are you looking for something that meets your needs better?
It all comes down to two things: Leadership & Technology
The IIABL & IIAM Joint Young Agents Conference is designed with the young agent in mind Emerging leaders of our industry from Mississippi and Louisiana meet up once a year to engage with each other and further their insurance knowledge. We invite all young agents (and those young at heart) for a weekend of professional development and networking that will focus on these two great topics.
But first… let’s play like a kid on Thursday!
Roll into Biloxi on Thursday and make plans to participate in our Inaugural Agent’s Alley Bowling Tournament at Big Play Entertainment Center. Come enjoy a couple of hours of bowling and cocktails while catching up with old friends and
making new before we get to business on Friday
Leadership Friday!
Join speaker and entrepreneur Luke Nurnberger for an engaging keynote to learn about how people really to communicate in color Luke will stretch how we use our brains to understand others and offer a system to help us better understand ourselves and each other to improve relationships and maximize productivity. If you are anxious to become a better leader in your agency, struggle to relay information to clients about this hard market and speak their language, this session was made for you! You will come away energized and knowing yourself better through the language of Insights Discovery. Following this session, we will have our popular exhibitor reception with delicious food, beverages, and great networking.
Before we get started Saturday we plan to fuel you with a wonderful spread at the Big I Brunch. Grab breakfast and brag about your casino night winnings before we talk tech!
Aubie Knight will share the most important and profit-generating technologies that all independent agencies should consider utilizing and how they can take your agency to the next level. You will also have a chance to chat with subject matter expert, Jack Wingate, on how he has implemented technology into his agency and your peers to learn about ways your agency can utilize and maximize the benefits of tons of new (or new to you) agency technology tools.
After this session, and enjoying some downtime at the spa or pool, we will conclude our event with a cocktail reception on the Azaela Terrace before everyone disperses for dinner and the casino.
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We have a great event in store for our young agents with the hopes that you create “Timeless Memories” at a beautiful location, the Beau Rivage. This premier destination not only has sweeping views of the Mississippi Sound, southern hospitality, attention to detail with the luxury you deserve, but has been home to the IIABL and IIAM Joint Young Agents Conference for several years.
If you, or someone in your agency could benefit from this event, please do not hesitate to sign up and share the good news about what we have in store. We believe in our young agents and want to help build the future of our independent agencies! We look forward to seeing you in Biloxi in August!
IIABL & IIAM Young Agents Conference
August 24-26, 2023 ~ Beau Rivage, Biloxi, MS Learn More
Attendee Registration
Exhibitor & Sponsor Registration
Registration Brochure
After decades of low premiums and abundant capacity, we are in the midst of a hard insurance market.
But what exactly does that mean? A hard market is defined by the Insurance Risk Management Institute as “the upswing in the insurance market cycle, when premiums increase, coverage terms are restricted, and capacity for most types of insurance decreases.”
Or to put it simply, insurance costs a lot more for our clients and is harder to find. Although insurance markets are cyclical, every hard or soft market is different. Each line of business is affected differently by the market’s conditions.
Trusted Choice has released a Hard Market Toolkit aimed to provide resources to help you streamline a plan, communicate effectively, handle tough questions, and ultimately retain clients in a hard market.
Trusted Choice
July 2023
During these challenging times, independent insurance agents are more important than ever. Agents can prove their value to their clients and improve retention
through consistent and thorough customer communication. This should include telling customers why their premiums are rising and what they should expect at renewal time and explaining coverage changes or restrictions that may impact their exposure.
This Trusted Choice® Hard Market Toolkit provides resources agents can use to successfully navigate the current market conditions.
Included in this toolkit are:
1) Overview of Market Conditions
2) Expert Advice for Surviving a Hard Market from Savvy Independent Agents
3) Talking Points for Clients
4) Client Email Templates
5) Frequently Asked Questions from Clients
6) A General Communication Timeline to Keep Your Agency on Track
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7) Remarketing Standards Document (Fill-in Template)
8) Personal Lines and Commercial Lines Renewal Forms
9) Creative to Help Your Agency Stand Out (Customizable Video’s and Graphics) Get The Toolkit Now!
If you have any questions or need more information, please contact Kasey.connors@iiaba.net
23 June 2023
When we're starting our insurance career, we're regularly warned about “insurance regulation." What is industry regulation and how did insurance regulation come about? Let's review the history of insurance regulation and the main reasons for the regulation of the insurance industry.
The U.S. business model thrives with competition. One of the main reasons for insurance regulation is to maintain competition. In the U.S., our nation wants to prevent monopolies – one entity – an insurer – covering more than its fair share of homeowners and businesses. How much competition is there and how badly could harm occur to your insured or your agency financially by poor insurer performance?
If insurers deliberately set rates to write a lot of new business, will they remain solvent to pay all the claims that may arise as a result of that new business? This is just one of the concerns of insurance regulatory bodies.
Regulation also protects the consumer from improper treatment. Certain regulations exist to prevent the insurer from being treated unfairly. These include bad faith claims-handling statutes and policy cancellation provisions in state law.
There are two main reasons for the regulation of the industry.
We serve the public welfare to protect the public and its assets. Insurance is vital to the American economy. To avoid competition such as price-fixing or rate inadequacy that would be damaging to our industry, and ultimately to the public, which insurers serve.
Coverages evolve as society and consumer needs change. Premiums must be reasonable given predicted losses. Necessary coverages must be readily available. As society changes, insurance coverages emerge, such as coverage for social media liability and active assailant events.
As you continue in your career, you'll experience what we call “hard" insurance markets and “soft" insurance markets, which change coverage availability and pricing. For more on industry
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cycles, read the linked article. At this time, we're in a hard market, and for many newer producers, this will be a new challenge.
Since the founding of America's first insurance company in 1736, states regulated the insurance industry. After the Civil War, a case arose in 1869, Paul v Virginia An insurance agent violated Virginia law by selling insurance without a Virginia producer's license. After Paul was arrested, he sued the state, claiming insurance was interstate commerce, and lost. The U.S. Supreme Court ruled that insurance was not interstate commerce and that state regulation applied. That decision stood for the next 75 years.
In 1944, in United States v. South-Eastern Underwriters Association (SEUA), the U.S. Attorney General sued the SEUA, alleging it colluded to set property insurance rates.
The Supreme Court reversed its decision in Paul, ruling that since insurance is interstate commerce, it is subject to regulation by the federal government.
In response to the above, Congress began to debate bills that would rule on industry regulation. Interestingly for you history buffs, the insurance industry viewed the overturn of Paul “with considerable alarm," according to one insurance textbook, and introduced bills to preserve the ability to develop rates.
While early bills failed, the National Association of Insurance Commissioners successfully drafted a bill that did pass, Public Law 15 or the McCarranFerguson Act. However, the caveat in McCarranFerguson was this – as long as the states adequately regulated the insurance industry, the federal government would not act to regulate the industry.
This is the common law of the land today. However, the Sherman Act, the Clayton Act and the Federal Trade Commission Act allow Congress to regulate if the states fail to do so. This is why so many questions that arise as you navigate your state's rules can best be answered by your state Independent Agents & Brokers Association. State legislators enact laws that admitted carriers must adhere to.
The practice of spreading risk is an integral part of how businesses can function. Under McCarranFerguson, state legislators enact laws governing the conduct of insurers within its boundaries. Whether domestic, foreign, or alien carriers, the state regulates them. Let's define these types of carriers.
Domestic carrier – A carrier domiciled in that state.
Foreign carrier – A carrier based in another state, even if that carrier has a branch in that state.
Alien – A carrier domiciled in another country.
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Admitted carrier – Also known as a “standard market" insurer, that company files with each state's insurance commissioner (or another title) and that commissioner approved them to do business. An admitted carrier's customers can access that state's guaranty fund should the carrier become insolvent.
Non-admitted carriers do not file their forms and rates with the states. There are two types, approved (the state says “ you can operate here), and non-admitted, which the states have not approved.
State courts rule on insurance, and in the case of workers' compensation cases, administrative law judges in those states generally rule on whether an injury occurred in the scope and course of employment, and which benefits apply. Interestingly, each workers compensation policy refers to the state statutes that apply to any injury or illness arising in that state.
Occasionally insurance litigation lands in federal court due to issues of civil rights, jurisdiction, claims involved Native Americans, or other matters. For the most part, however, states adjudicate the majority of insurance proceedings.
Here is a not-inclusive list of actions states regulate.
Licensing insurers
Licensing brokers, agents and adjusters
Examination of insurance carriers
Carrier insolvency
Rates Reserve Investments
Forms
Unfair trade practices
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This advisory body assists most states' regulatory agencies develop forms, model laws and model financial regulations. The NAIC is an advisory body, not a regulatory body, so states can use their information or choose to develop their own. While laws are common across many states, each state is different. We cannot always answer a question in one state and assume it applies to another. This is why your state Big “I" is so invaluable to you, even if your agency has branches in more than one state.
This article is a brief overview of insurance regulations as they stand today in the United States. For more information, you can sign up for Understand the Insurance Industry: From Regulations to Operations, a three-hour training available on ABEN.
ChrisBoggs
19June2023
Face it, most personal lines clients are functionally illiterate regarding insurance.
Don't misunderstand, it is not that your insureds lack intelligence, the issue is most have never been taught insurance fundamentals. Even clients who bought their first insurance policy 40 years ago only know what they hear on commercials, read on the Internet, or are told by their friends and neighbors - who are just as illiterate. In fact, most of what your personal lines clients think they know is actually lies and misinformation.
Insurance practitioners who wallow around in the insurance muck every day forget that insurance" is a unique and foreign language to our clients. We fail to realize our insureds don't know the basis of
the insurance contract they purchased; they just know they bought the policy because someone or something made them buy it (contract, statute, or mortgagee).
Without correct information, only price matters. Remember, somewhere between $6 and $7 BILLION is spent on television advertising telling consumers insurance is all about the best price. That's a lot of dollars to support a lie.
When misinformation and lies are replaced with knowledge and truth, the insurance purchase becomes more about protection than price. Give buyers the correct information needed to feel empowered and they feel better about their decisions; and they also feel better about the person who gave them the information. What better reason to teach your client's kids about insurance?
Every parent worries about his or her kid(s). Are they eating well, getting enough sleep, studying like they should, dating the right person (or not dating the wrong person), and learning how to be an adult?
Being an adult, a contributing member of society, requires the ability to properly manage financial affairs. Insurance, though not always portrayed this way, is a key part of personal financial management; that's why you want to focus on your client's kids.
When you teach their kids about insurance, you help your client prepare their children for life; and if you do it right, you help your client be better prepared themselves - without them looking like they need the help. No 42-year-old will go to a homeowner's or personal auto training session on his own (they don't want to appear unprepared themselves), but tell them the class is for their kids and you will get them as well.
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The key to getting and keeping the parents in the room - the topic and its hook." Want the parents to stay? Conduct a class about the realities of personal auto coverage for new drivers. Discuss the insurance implications surrounding going away to college, or getting your first job, or your first apartment, or whatever is changing in the kids and parents lives. Parents will gladly come because they feel they are helping their kids, not because they don't know themselves even though they don't.
Beyond educating the kids and their parents about the realities of insurance, you are creating and cementing long-term relationships with your current clients while concurrently developing contacts with future clients - you know, the kids who will one day buy insurance. Insurance is a relationship business, build the relationship before the kids are in the market for insurance. (A side note: the industry needs new talent as thousands retire every year; this exercise may trigger some kids to explore insurance as a career.)
Use the information in your agency management system to run a list of your client's children. Remember, the personal auto policy application requires all residents of the household to be listed on the application, not just drivers. (The application requests, RESIDENT & DRIVER INFORMATION [List all residents & dependents (licensed or not) and regular operators].") The same requirement is not found in the ACORD homeowners' application, but a proprietary application may ask for such family information.
Invite the 14 to 19-year-old kids. These are the ones learning to drive, just beginning to drive, getting ready to graduate, headed to college, and looking towards their futures. Encourage them to bring their friends (because no kid wants to go anywhere without a friend) and their friend's parents.
Have personal invitations printed. Kids rarely get mail and the invitation will be special to them in a strange way. Send a separate letter to the parents explaining the topic or topics you plan to cover and personally invite them to attend with their child(ren) so they can continue the conversation at home."
Place open invitations on your website, Facebook page, or any other media you use.
Ask for an RSVP so you know how many to expect.
Make this a big deal! An event! Have snacks and drinks and even a door prize if you want.
But remember, your goal is to teach not sell.
Initially focus on the personal auto policy. Parents feel the economic pain of a new driver, and the new(er) driver hears about this pain quite often from his/her parents I know, I keep telling my daughter how much she is going to cost me. Plus, personal auto coverage is the focus of most TV advertising's half-truths and neighborhood lies.
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Every state Department of Insurance makes available some level of basic personal auto training for consumers. Click here to access PAP educational resources by state. If you look at multiple states, you will notice the level of detail and focus varies by state.
If you want to provide more detail than the state provides or just want to develop your own outline, you can use the following outline for ideas to build your own personal auto program.
Download the Sample Outline
Regardless the source, the state, or an internally developed outline, limit the class to no more than 90 minutes with a 10-minute break in the middle. But because there is so much needed information, consider holding two sessions over a couple weeks a basic class and an advanced class (but come up with better names Beginners and Masters, or something like that).
And lastly, give a Certificate of Completion to each person. If more than one session is held, indicate the level" completed: John Jones has successfully completed the Masters Training in Personal Auto Protection." You get the idea.
Parents want their kids to be prepared for life; insurance is an important part of life especially when something bad happens. As independent agents we strive to help our communities through coaching, volunteering, and various other ways. Why not use our knowledge to increase our community's insurance IQ"?
Remember, your goal is to teach, not sell. But by doing this, you will be seen as the trusted advisor you are which will likely gain you new clients.
19 July 2023
Conversations about artificial intelligence (AI) have been everywhere recently. But how does it impact companies and their human resources?
Sixty-two percent of Americans believe AI will have a major impact on workers, but only 28% believe it will impact them directly, according to the Pew Research Center. Unfortunately, AI is already impacting employees, with 4,000 jobs lost in May 2023 due to AI, according to Challenger, Gray & Christmas.
While most of the recent conversation involves AI-generated content, other AI formats have been used in the workplace for a while.
AI tools used in the hiring process have been praised for saving hiring managers valuable time and creating a diverse pool of applicants by removing bias from the initial review process. Nevertheless, concerns have been raised that there is an unintentional bias built into these tools.
Paige McAllister
Resume review tools can use predictive analysis to determine what candidate profile would be the best fit for an open position and then compare received electronic resumes to find the “best available" candidates. However, if a candidate uses certain words or phrases which may not fit the AI tool's expectations, the candidate will receive a lower evaluation for no real reason.
More concerning are tools which analyze an applicant's personality, knowledge and communication skills using recorded responses to interview questions and facial expressions.
These tools assess a candidate's fit for a job by matching them to a profile of the company's “ideal employee" using appearance, communication skills, speech patterns, body language, and personality. However, some of these tools have been found to be biased, eliminating people of certain genders, races, ethnicities, and disabilities by giving lower scores for factors that do not
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match the “ideal" parameters in the programming such as facial structure, accents, hairstyle, or wearing glasses or head coverings.
Regulations on the use of these tools are already in place. On April 25, four federal agencies the U.S. Equal Employment Opportunity Commission (EEOC), Department of Justice (DOJ), Consumer Financial Protection Bureau (CFPB), and Federal Trade Commission (FTC) issued a joint statement addressing the concerns about AI and its potential impacts.
The statement covered several topics, including defining AI, acknowledging its potential positive uses and negative impacts, highlighting potential areas for discrimination, and affirming each agency's commitment “…to monitor the development and usage of automated systems and promote responsible innovation…" as well as “ … pledge to vigorously use our collective authorities to protect individuals' rights regardless of whether
legal violations occur through traditional means or advanced technologies."
Illinois, Maryland, and New York City have already passed laws regulating the use of “automated employment decisions tools" in the hiring process, with many other states and cities considering similar laws.
Most of the latest news is around chatbots and the AIgenerated content they produce. Chatbots, such as OpenAI's ChatGPT, Microsoft's Bing, and Google's Bard, are available to the public by simply setting up an account
In the HR department, chatbots can be used to research topics and generate content such as policies, procedures, emails, letters and disciplinary action. On the positive side, AI used for HR purposes can help effectively address legalities, uncomfortable topics and messages for general audiences.
However, AI has also been shown to generate content that lacks empathy, is non-specific, disregards the privacy of others, does not offer face-to-face interactions, or contradicts itself. Asking the same question in different ways can give different results, which could complicate or confuse the issue more.
Beyond these concerns are the inherent limitations o chatbots as they are built on a large language model (LLM), which relies on many available data sources. T end results are only as good and valid as the data it references, which is not always valid or accurate For example, Wikipedia is an often-used resource, but sin it relies on user-generated content, it has been prove to be only 80% accurate.
In some cases, chatbots have also created their own inaccurate reference material from which to develop and validate an answer even though it is incorrect or fictional.
To build its database, chatbots retain all entered information for future reference by any user Since users must input specific information to get the best results, they may need to enter sensitive or confident information or trade secrets which is added to the chatbot's database. Depending on the information entered and the parameters entered by a future user companies may find their confidential data available t anyone asking the right questions.
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As tools develop and improve, AI will find a place in most workplaces As you determine how AI will be allowed in your workplace, consider taking the following actions:
1) Do your research into AI. Understand what defines AI, as well as the advantages and drawbacks to each tool. Consider reading resources to educate yourself as much as possible on AI, such as the New York Times' chatbot primer and prompts for more effective chatbot results or Conductor's article on using a chatbot.
2) Research your AI tools. Learn what AI is and how it is incorporated into tools you may use now or may rely on in the future. If you choose to use AI tools, be sure to understand their validity and limitations. For example, if you are going to use virtual analysis of recorded interviews, understand the science behind it, including if the tool has been properly tested to remove implicit biases.
3) Establish policies and procedures on AI use. Draft a
discrimination and revea information. While the p cover any AI, develop ex expectations as you initi
4) Train employees and the use of AI tools in you employees and manager them properly and legal and is not allowed, as we reviewing and fact-chec releasing it or personaliz employee or customer.
Paige McAllister is vice pr Affinity HR Group Inc. Aff partner of Big “I" Hires, th Agents of Virginia, Big I N Jersey.
Reach out to Affinity HR G 6400 if you have question your agency.
Independent Market Solutions was created with the goal of providing Louisiana agents with access to quality insurance markets. Whether you’re looking to diversify your current book of business or just need a little head start securing company appointments, IMS can help.
If you haven’t signed up with IMS yet, here are five reasons to join:
1) It’s free to join. There is no cost for IIABL members to join IMS, and agents own their book of business. The larger your strike zone, the easier it is to hit a home run, so we’ve made market access an integral part of your membership.
2) You can earn competitive commissions. Profitable growth is key to the success of an independent agency. That’s why IMS offers agents competitive commissions as well as 100 percent ownership of expirations to help maximize agency income.
3) You can graduate to direct carrier appointments. IMS opens the door for agents to more easily qualify for appointments that can often lead to “graduation” a direct appointment after minimum premium thresholds and performance standards are met.
4) You can earn contingency commissions. When agents consistently produce profitable business with certain IMS markets, they can qualify to participate in any earned program contingencies. IMS also shares 100 percent of any carrier production bonuses and incentives with agents, putting more money in the pockets of IIABL members.
5) The IMS menu is always evolving. Thanks to the partnership among several state associations, the IMS program creates greater volume, leverage, and, ultimately, better terms for member agents.
If you’d like to apply for an appointment or learn more about the carriers IMS can get you connected with, click here.
What would you say is the most prominent theme throughout human history? Most people argue that conflict or culture defines humanity. Still, when we examine the entirety of human existence, we see one central point that outshines the rest: Advancement.
Each age of humanity has been defined by an innovation that changed the course of history forever. Whether it be the wheel, the invention of steel, or the internet, humans seem determined never to settle for their current reality and are always rushing towards that next defining moment.
We believe that the next defining moment is already here, and it has come in the form of artificial intelligence (AI). The floodgates are open, and in as little as five years from now AI will likely have significantly altered how we live and work. So what does this mean for insurance agents? Well, if history has taught us anything it is that those who properly implement innovative technologies are rewarded, and those that don’t either fade into obscurity or serve as a cautionary tale for why you shouldn’t blindly charge forward into uncharted territory.
In this article, we explore how the emergence of AI could impact independent insurance agents and make the case for why agents should work to
carefully implement this technology into their agencies’ operations.
The burning question that professionals of all stripes are asking themselves is “Can AI do my job better than I can and will it make my role obsolete?”. Insurance agents are not immune to this line of thinking, but thankfully it is unreasonable to assume that machines will eliminate the need for human agents. Most consumers are not experts on the different types of coverages available and defer to the expertise of an insurance agent when navigating the buying process.
While AI tools such as ChatGPT do a great job scouring the internet and organizing information to answer a question, purchasing insurance requires trust, and consumers trust that their agent is qualified and capable of advising them on their potential risks and securing the right coverage for their needs. That level of trust is not easily transferable to an artificial machine (do you prefer navigating an automated customer service menu or speaking with a live person?), especially considering the nuance required to properly advise and service a client. As such, it is highly unlikely that consumers would ever prefer their risk profile to be assessed and managed by a programmable machine instead of a real person.
BondExchange ACT Supporting PartnerNo one knows what the future holds, but we firmly believe that no matter how sophisticated AI becomes, it can never replicate the interpersonal value and expertise provided by agents.
With that being said, AI can potentially eliminate the need for agents to perform repetitive and mundane tasks and empower them to focus on where they provide the most value: Advising and servicing their clients. How will it do this? Let’s take a look:
The use of AI chatbots to answer basic customer questions is an increasingly popular feature that more and more companies are utilizing. These chatbots help companies stay connected to consumers and are especially useful outside normal business hours.
For example, imagine a customer needing information about your agency’s renewal process after you’ve locked up shop for the day and your customer service team has gone home. Featuring an AI chatbot on your website that is capable of answering this customer’s questions will add value to your customer and in turn strengthen their loyalty to your agency. Even today, using AI to enhance your level of customer service can reduce service costs by up to 30%, according to Entrepreneur. Imagine what that number will be 10 years from now as AI continues to advance. Additionally, companies such as synthesia allow users to create AI videos that could potentially be used for employee training or continuing education purposes.
It is important to note that AI chatbots are best used in tandem with your customer support team and should primarily be utilized when your team is unavailable (holidays, weekends, non-business hours, etc.) or as a fast reference for your team members when issues arise outside of their circle of competence. In our opinion, having a live person responding to customer inquiries is the preferred method (especially since being an insurance agent is a service-driven role), but when a live person is not available an AI chatbot can
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provide an acceptable level of support in the interim and is certainly better than no support. Remember, AI should not replace your customer service staff but instead work in tandem with them to increase the amount of value your agency can provide to your customers.
AI and machine learning (ML) technologies are already transforming the underwriting process by improving data collection and risk assessment methods. For example, instead of relying on potentially inaccurate data provided by customers on an application, insurance companies are beginning to utilize technology that can automatically gather data through many different sources and more accurately discern the level of risk present in each policy. According to management consultancy McKinsey and Company, by 2030 underwriting processes will be almost entirely handled by machines and most policies will be quoted instantaneously. This removes the need
for underwriters to handle repetitive tasks such as data entry and allows them to focus their energy on handling complex submissions. These innovations will be groundbreaking for carriers and brokers. However, independent agents stand to benefit as their customers receive increasingly accurate and error-free assessments of their risk profiles and instant quotes on most policies, allowing agents to focus on other value-add items such as product education and customer retention.
Claims processing can be a tedious task that requires hours of investigative work and the examination of countless documents. McKinsey and Company estimates that by 2030, AI and ML will play a significant role in the claims process with nearly half of all claims being fully processed without human oversight or intervention (Lemonade already handles half of their claims via AI and recently set a world record for processing a claim in just two seconds). What does this mean for agents? Well, less time focusing on data collection and information sharing with carriers and more time providing support and counsel to their customers. AI will never be able to match the interpersonal touch of a live agent, and using AI and ML to eliminate tasks such as data collection and information sharing allows agents to focus their efforts on ensuring their customers have the guidance needed to properly file their claims.
AI has already proven itself capable of enhancing customer support, underwriting and claims processes. The technology is here to stay and will only become more prevalent over time. The way we see it, insurance agents have three options for how to respond:
1. Reject its implementation and become the equivalent of an agency still using a typewriter in 2010
2. Rush to implement the technology without cause or consideration and watch it blow up in your face
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3. Identify the areas where AI can increase efficiencies and cut costs and meticulously implement the technology over time
The key to mastering the age of AI is to choose option three. If you don’t, you may be overtaken by competitors that are more efficient and provide more value to their customers.
ACT Supporting Partner, BondExchange is a surety bond platform and service that provides agents with the tools needed to instantly quote and issue surety bonds, generate new business, embed online quoting tools directly on their websites, and endorse bonds online. Learn more about BondExchange here.
The National Oceanic and Atmospheric Administration is forecasting between 12 to 17 named storms this hurricane season, running through November 30th.
Hurricane season is a great opportunity to grow your flood book with Selective through the Big “I" Flood Program.
Talk to current and new customers about the importance of National Flood Insurance Program (NFIP) flood insurance. Remember, the NFIP typically has a 30-day waiting period for a flood policy to go into effect. Remind existing customers to renew their NFIP flood policy. If an NFIP policy lapses, the customer will be taken off the Risk Rating 2.0 glidepath, subjecting the policy to full risk rates.
Offer this expert guidance from the National Oceanic and Atmospheric Administration to help customers protect their families and homes.
Together, we can help our mutual customers get hurricane ready. Visit www.independentagent.com/Flood to learn more about the Big “I" Flood program, or connect with your Selective Territory Manager today.
Big "I" Flood Program Selective Flood Insurance
SafePoint Seeking 20,000 Additional Citizens Policies
Commissioner Jim Donelon today that over 17,000 policies have been written through the Insure Louisiana Incentive Program as of May 31. The top five parishes for new policies are Jefferson, Orleans, St. Tammany, Terrebonne and St. Charles.
"These results show the program is working as intended to provide immediate relief to thousands of homeowners who would otherwise be without an affordable policy. Unfortunately, many more of our friends and neighbors still need help," said Commissioner Donelon. "The Incentive Program companies will continue writing in the coming months, and I expect their success will encourage other insurers to resume writing in our market."
In addition to the 17,197 policies that have been written to date, SafePoint Insurance and its affiliate Cajun Underwriters (CURE) have been approved to take 19,689 policies out of Louisiana Citizens during the upcoming round of depopulation. The assumption date for those policies is October 1. 2023.
"I strongly urge all Citizens policyholders to contact their agents now and request to be notified if they have an opportunity to leave Citizens for SafePoint or CURE," said Commissioner Donelon. "Getting policyholders out of Citizens is vital to our state’s economic recovery."
The Insure Louisiana Incentive Program offers matching grants to incentivize insurance companies to write residential and commercial policies in vulnerable areas, including writing policies out of Citizens. Participating insurance companies must meet solvency standards that are in line with standards required by the federally backed mortgage companies. The insurers will also be subject to enhanced solvency monitoring including, but not limited to, newly increased capital and surplus requirements, monthly reporting and in-depth reinsurance program reviews.
The latest Incentive Program report can be viewed here.
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During the next IIAGNO Town Hall Meeting, IIABR Luncheon, & IIASB Luncheon Jeff Albright & Ben Albright will review the legislation that IIABL tracked during the 2023 Regular Legislative Session, how it impacts our insurance industry, and how it affects our agencies.
The 2023 legislative session was another busy one for the insurance industry, but there was a shift in tone from the last two years. The 2021 and 2022 sessions saw legislators reflect the anger of their constituents, and they brought an unprecedented number of bills targeted at punishing insurance companies for the poor claims response to the storms of 2020 and 2021. For this year’s session, the primary question was no longer “how can we punish the insurance companies?” Instead, policymakers were hearing from their constituents exactly how bad this market has become. They heard, “I can’t afford my insurance policies” and “I can’t find ANY insurer to write my policy”. This year, legislators were asking “what can we do to bring insurance companies BACK to the state?”
So, the big question is: now that it’s over, how did we do this session? Did we move the needle? Will companies want to come back to Louisiana? Overall, the 2023 session was a mixed bag.
Learn more at our upcoming chapter events. This presentation has been filed for 1 hour of CE credit with LDI.
IIAGNO Town Hall Meeting
August 31, 2023
11:30 am - 1:00 pm
Southern Yacht Club
Online Registration
IIABR Luncheon
September 28, 2023
11:30 am - 1:00 pm
Juban's Restaurant & Bar
Online Registration
IIASB Luncheon
September 26, 2023
11:30 am - 1:00 pm
The Shreveport Club
Online Registration
IIABL 2023-2024
PRESIDENT, ARMOND K. SCHWING PRESIDENT-ELECT, BRET HUGHES
SECRETARY-TREASURER, ROSS HENRY
NATIONAL DIRECTOR, JOHNNY BECKMANN, III
PAST PRESIDENT, MICHAEL SCRIBER
YOUNG AGENT REP, KRISTIN SWANSON SCOTT
ANN BODKIN-SMITH
MATTHEW DEBLANC
CHRISTY DESOTO
DOMINIQUE DICARLO CROUCH
ROB W. EPPERS
MATT GRAHAM
CHRISTOPHER S. HAIK
STUART HARRIS
BEAU HEAROD
CHARLES H. LEBLANC
CRAIG MARTEL
LYDIA MCMORRIS
A. EUGENE MONTGOMERY, III
JOE KING MONTGOMERY
HARTWIG "ROBBY" MOSS, IV
ROBERT LOUIS PALMER, JR.
RANDY PERISE
ROBERT STONE
Schwing Insurance Agency, Inc - New Iberia
Hughes Insurance Services, Inc - Gonzales
Henry Insurance Service, Inc. - Baton Rouge
Assured Partners - Metairie
Scriber Insurance - Ruston
Swanson & Associates - New Orleans
Thomson Smith & Leach Insurance Group - Lafayette
Continental Insurance Services - Marrero
1st Insurance of Marksville - Marksville
Riverlands Insurance Agency - LaPlace
Risk Services of Louisiana - Alexandria
Lincoln Agency - Ruston
Higginbotham Insurance - Lafayette
McClure, Bomar & Harris, LLC - Shreveport
Jeff Davis Insurance - Jennings
Bourg Insurance Agency, Inc - Donaldsonville
Insurance Unlimited of LA, LLC - Lake Charles
Alliant Insurance Services - Baton Rouge
Community Financial Insurance Center, LLC - Monroe
McGriff Insurance Services - Monroe
Hartwig Moss Insurance - New Orleans
Insurance Underwriters, Ltd - Metairie
Blumberg and Associates - Ponchatoula
Stone Insurance, Inc. - Metairie