Feb 2016

LOUISIANA AGENT FEBRUARY 2016

“With the shuttering of Google Compare, independent insurance agents are well-positioned to take advantage of the marketplace void via TrustedChoice.com: the online platform that links consumers with independent agents and independent agency companies.

Robert Rusbuldt Big I President and CEO

IIABL STAFF Jeff Albright Chief Executive Officer jalbright@iiabl.com Francine Berendson Director of Communications & Events fberendson@iiabl.com

IIABL & LSLA Work Together to Address Surplus Lines Cancellation & Nonrenewal Issues

Swiss Re Policy Alert January IIABL Board Meeting Report

4-7

8-13 17-19

Google Compare Closure

27

Legislative Fiscal Session

28

Local News

30

Mike Edwards, CPCU, AAI Director of Education medwards65@aol.com

Commissioner’s Corner

13—16

Ask Mike

21-23

Tech Tips

29

Rhonda Martinez, CIC Director of Insurance rmartinez@iiabl.com

Rate & Rule Filings

27

Jamie Newchurch Insurance Services jnewchurch@iiabl.com

IIABL Calendar

25

Lisa Young-Crooks Executive Assistant lyoung@iiabl.com

IIABL Partners

32

Kim Jackson Education & Membership kjackson@iiabl.com Karen Kuylen Director of Accounting kkuylen@iiabl.com E. Lee Mowe Marketing Representative lmowe@iiabl.com

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IIABL & LSLA Work Together to Address Surplus Lines Cancellation & Nonrenewal Issue Over the past several years, a number of IIABL member agents have encountered problems where surplus lines insurance companies have cancelled or nonrenewed policies with less than 30 days notice. This can create very difficult situations for policyholders and agents, who may have difficulty replacing coverage in a short period of time.

Historically, policyholders and agents have been able to rely on the 30 day notice of cancellation or nonrenewal required under LDI Advisory Letter 02-01. However, passage of the federal Nonadmitted Reinsurance Reform Act (NRRA) which significantly deregulated the surplus lines insurance industry, made the state insurance department “white list� voluntary. This essentially removed the regulatory penalty for noncompliance under LDI Advisory Letter 02-01.

The IIABL Board of Directors discussed this issue over the course of several board meetings and decided to pursue legislation to require a 30 day notice of cancellation.

However, the IIABL Board decided to reach out to the Louisiana Surplus Lines Association (LSLA) in an effort to work with the surplus lines industry to resolve the problem.

IIABL met with the LSLA Board of Directors and explained the problem with short term notice of cancellation and nonrenewal of surplus lines policies. The LSLA Board was sympathetic to the concerns of IIABL on behalf of agents, but was also surprised that surplus lines insurers were cancelling or nonrenewing with less than 30 days.

The surplus lines brokers and insurance companies represented on the LSLA Board all indicated that it was their standard business practice to provide 30 days notice of cancellation or nonrenewal.

After further discussion, consensus developed that a very small number of surplus

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lines insurance companies were cancelling or nonrenewing policies with less than 30 days notice. The LSLA Board of Directors requested that IIABL delay filing legislation to mandate a 30 day minimum notice, and work with LSLA to resolve the problem by urging all surplus lines insurers to provide 30 days notice of cancellation or nonrenewal as an industry best practice.

LSLA committed to IIABL that they would issue a notice to all surplus lines insurers and brokers urging them to adopt 30 days notice of cancellation and nonrenewal as an industry standard. LSLA also agreed to work with IIABL to advocate on behalf of any agents who received less than 30 days notice of cancellation or nonrenewal to convince the insurance company to adopt the 30 day industry standard.

surplus lines industry. However, if the problem persists, IIABL may request legislation in the future to mandate a 30 day notice of cancellation and nonrenewal.

Please see the insert with the announcement from the LSLA Board of Directors to the entire surplus lines industry, requesting the adoption of 30 days notice as an industry best practice standard.

Any agents who receive a surplus lines notice of cancellation or nonrenewal less than 30 days should contact IIABL CEO Jeff Albright at JAlbright@IIABL.com or (225) 236-1366 for assistance. IIABL and LSLA stand ready to assist agents and policyholders who receive less than a 30 day notice of cancellation or nonrenewal.

Based upon the request by the LSLA Board of Directors for a cooperative effort, the IIABL Board of Directors agreed to defer filing legislation this year. IIABL will work with the LSLA Board to resolve the problem within the

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February 12, 2016 Dear LSLA Members: It is the responsibility of the LSLA board to review and address potential issues within our industry. One of the issues brought to our attention involves issuing a 30-day notice of cancellation and non-renewal on commercial accounts.

Louisiana's statute, Title 22, states that all companies doing business in Louisiana must adhere to the cancellation and non- renewal laws on personal lines policies. Excess and surplus lines carriers are not exempt from this law.

However, for commercial lines, Title 22 does not require excess and surplus lines carriers to issue cancellation notices or non- renew policies within a required time frame as with personal lines. The LSLA board recommends, as a good business practice, that we make every effort to adhere to a minimum 30-day notice for non-renewals and cancellation notices for commercial policies. (Non-pay of premium would be 10 days).

While we all enjoy the benefits of writing commercial business in Louisiana on excess and surplus lines paper, we certainly would like to continue to maintain our freedom from additional legal restrictions. As an industry, let's rally to endeavor to give a 30-day notice on commercial policies.

If you have any questions, please reach out to me or one of the LSLA board members.

I hope to see you all at the upcoming annual convention in New Orleans on March 16-18, 2016.

Thank you.

Bonnie Steen, CIC Burns & Wilcox President The information contained in this document is provided for general information purposes only. LSLA accepts no liability for the content of this document or for the consequences of any actions taken or not taken on the basis of the information provided. LSLA is not giving legal advice and individual members should seek their own legal advice regarding any questions they might have regarding their rights and obligations under the statute or contact the Louisiana Department of Insurance directly.

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Special Swiss Re Corporate Solutions Policy Alert Important Information Affecting Your E&O Policy Renewal We look forward to the opportunity to work with you on the renewal of your Swiss Re E&O policy.

This year Swiss Re Corporate Solutions has launched a new, state-of-the-art Insurance Agents E&O policy form developed with IIABA to meet the changing E&O needs of member agents. One very timely and important coverage afforded by the new policy form is coverage for 1st and 3rd party breach of personal data. The 1st party coverage is automatically afforded. Eligibility for 3rd party coverage, however, hinges upon your agency meeting specific underwriting and policy requirements.

These requirements focus on your agency's security procedures in protecting the privacy of your clients’ personal information. Please note that this coverage does NOT replace or act as a substitute for a standalone Cyber Liability policy.

The application contains the following question, to evaluate your agency's eligibility for the 3rd party breach of personal data coverage: 18. L. Do you encrypt or use other measures to protect personal data when transmitted? Yes or No If you respond “NO” to this question, 3rd party

breach of personal data coverage WILL NOT be afforded by the policy. If, however, you answered “YES”, coverage can be afforded subject to provisions within the policy. To be afforded this coverage the agency must have implemented current and commonly accepted technologies and methodologies to secure personal data and must also comply with any privacy regulations found in HIPAA or any other federal or state law. It is extremely important that you understand the data privacy and security requirements of the states in which you do business. Some examples of commonly accepted technologies and methodologies may include, but not be limited to:      

Password protecting or encrypting agency systems, Locking paper files when not in use, Encrypting personal data of customer stored on portable devices Using secure email when emailing personal data, Using a secure fax service when faxing personal data, Using a secure tunnel or password protection on the website before allowing consumers to enter personal data.

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IIABA’s Agency Council of Technology has written an article highlighting the importance of agencies’ implementing a written security plan and has provided a free prototype. Click here to review the article, which includes a direct link to the prototype. When properly implemented, an information security plan can assist your agency in implementing the procedures to manage the risk of data breaches and to qualify for third party breach of privacy data under the new E&O policy form.

Listed on the following pages are additional resources and tools on agency security and breach of personal data. These materials and more can be found on ACT’s website at www.iiaba.net/act under the Agency Security/Customer Privacy section, or visit the Big “I” Risk Management.

Website – E&O Happens at www.iiaba.net/ EOhappens and click on the “Resources” tab, then “ACT.” This website is available exclusively to Swiss Re Corporate Solutions policyholders.

In addition, we encourage you to speak with your IT provider, your Agency Management software provider, and an attorney to fully evaluate your systems operations and legal obligations. Here are a few questions to consider:

1. What types of private customer information does your agency retain that needs to be protected?

2. What are the state and federal privacy laws affecting your agency?

3. Is personal data encrypted when transmitted electronically through email, fax, or carrier systems?

4. Is personal data collected through your website done through a secure interface?

5. Do your agency procedures addressing collection, storage, transmittal, and disposal of private customer information comply with all applicable regulations

Resources and Tools Available— Security & Privacy Federal Trade Commission—”Protecting Information: A Guide for Business: (Website) This website offers some good resources to help you education yourself on the reason for protecting personal date: Click here to visit,

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Implementing an Effective Information Security Program Your Agency (Webinar) Highlights the major security risks independent agencies face and the practical steps they should take to protect the privacy of their private client & employee personal information whether in paper or electronic form. The session outlines how federal and state law, as well as good risk management practices, have made it mandatory for agencies to implement an information security program that is anchored by a written security plan. The program also covered the numerous free tools and articles that ACT has produced to assist agencies with their security program-- including a prototype agency information security plan. To view the recorded webinar, click here.

Prototype Agency Information Security Plan and Companion Article (Articles) This is a prototype security plan for agencies to use in developing their own written security plans customized to their own operations. This prototype plan also serves as a great checklist in formulating a security program. In addition to the plan itself, you will find an article discussing the importance of agencies' having a written security plan and how to use ACT's prototype security plan most effectively. The article also provides agencies with a series of steps to take to put a strong security program in place. Click here for the ACT article, "ACT Releases Prototype Agency Information Security Plan" and Click here for the ACT Prototype Agency Information Security Plan (Best to "save" this Word document to your desktop to avoid prompt for a password. If you "open" the document, click "cancel" when you get the password prompt to open it.)

Data Privacy Federal Law Summary (ARRA,HIPAA, and GLBA and State Specific Laws (Web sites)

To learn more about the applicability of federal laws requiring insurance agencies to protect personally identifiable information visit IIABA’s Office of General Counsel—”Legal Advocacy” webpage on the IIABA Website clicking here.

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There you will find information on legislation effecting data security including: ARRA, HIPAA, and GLBA. Member login is required.

effective approach to secure email by enabling their email servers for TLS (Transport Layer Security) email encryption. This article explains how TLS works. Click here.

TLS Email Encryption-- Agents' Frequently Asked Questions - This document builds upon ACT's article, "Protect Your Clients with Secure Email Using TLS," and provides answers to agents' most frequently asked questions, including giving examples of carriers that are enabled for TLS for their agents. Click here.

To learn more about state specific laws here are some websites that may be of use: 1. http://www.ncsl.org/default.aspx?tabid=13489 2. http://privacylaw.proskauer.com/articles/securitybreach-notification-l/ 3. http://www.aicpa.org/InterestAreas/ InformationTechnology/Resources/Privac y/FederalStateandOtherProfessionalRegulations/ StatePrivacyRegulations/Page s/State%20Security%20Breach%20Laws.aspx

Email Encryption -Protecting Data Over Email To gain a better grasp of email encryption review these resources: Protect Your Clients with Secure Email Using TLS - Agencies and carriers are encouraged to implement an efficient and cost

ACT Recorded Webinar: Protecting Independent Agent Clients with Secure Email Using TLS - Recorded May 13, 2010 (Demo in last 15 minutes puts more focus on implementation on Microsoft 2007 Exchange Server). Features Jim Rogers (The Hartford) & Tim Woodcock (Courtesy Computers) Click here to watch.

Combat Cybercrime and Protect Your Agency with Simple Security Steps (Article) Protect your agency from cybercrime. The most potent tools to fight this threat are to keep a wary eye and practice proactive online security techniques and policies. Danielle Johnson, Vice President of InsurBanc, suggests several steps to protect personal privacy, banking information, and agency data, including adoption of recent advancements in banking security. Click here to read the article.

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Encryption and Your Agency’s Website (Webinar) The Florida Association of Independent Agents recently had Sabrena Sally from Swiss Re on their Friday Morning Live webinar discussing cyber liability and the E&O issues surrounding websites.

Here is a link to that and you’ll see the topic is discussed about ten minutes in the webinar: Friday Morning Live - Encryption and your agency's website with Sabrena Sally, CPCU, Senior VP of Swiss Re. The information provided and statements made in this policyholder alert are for informational purposes and are not intended as legal or other professional advice.

Please procure the appropriate legal or other professional advice and services to address your individual circumstances. There is not representation, guaranty or warranty made as to the sufficiency or accuracy of the information provided. This document is provided for informational purposes only and is intended as a general overview of the policy descried and should not be considered a contract of insurance. In addition, all policies are individually underwritten and subject to the underwriting guidelines of Westport Insurance Corporation, a member of the Swiss Re Group. For complete policy language, refer to form SP 4 585 0510, or the most current edition thereof. The opinions and views expressed by other contained un URL links do not necessarily reflect the opinions and views of Swiss Re or IIABA.

Commissioner’s Corner

Louisiana Property & Casualty Insurance Markets Update

The property and casualty markets in Louisiana saw positive developments in 2015 with continued stability and as well as signs of growth. Last year we witnessed a noticeable increase in competition in this sector with overall rate increases at 2.5 percent for all lines of business (private passenger and commercial auto, homeowners, commercial multi-peril and workers’ compensation).

We continue to work to strengthen competition and have aggressively recruited new companies to our state. By implementing a combination of strategies to rebuild Louisiana’s property insurance market, we now have 22 new insurance groups actively writing homeowner policies in our state who were not here prior to the hurricanes of 2005. The homeowners market experienced double digit average rate increases after the 2005 hurricane season but the market has now stabi-

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2015 at .4 percent. That represents the lowest average statewide rate increase in more than ten years. In 2014, the overall rate increase for homeowners was 2.8 percent. In line with this trend, Louisiana Citizens Property Insurance Corporation, which is required by law to have rates higher than the private market, recently submitted a personal lines rate filing that will result in an average statewide rate cut of -2.4 percent.

For policyholders concerned with rising premiums, it is important to note that insurers’ profitability in our homeowners market has not been attractive due to the massive losses resulting from Hurricanes Katrina and Rita. According to the Insurance Information Institute, the Louisiana homeowner insurance industry’s return on net worth (RNW) between 2004-2013 (-19.6 percent) is the lowest in the nation with the exception of Mississippi (-25.8 percent) – both of which are far lower than the 10-year average RNW for the homeowners’ insurance market nationally (+6.6 percent).

Like homeowners insurers, companies writing auto insurance in Louisiana also face the challenge of profitability. Louisiana ranks near the bottom nationally for the RNW of private passenger auto insurers, with a 3.3 percent return on net worth.

That figure places Louisiana only above Michigan which was the least profitable state for auto insurers between 2004-2013.

Louisiana has long been known for having some of the nation’s highest auto insurance rates, but recent data from the National Association of Insurance Commissioners (NAIC) shows Louisiana is moving in the right direction. According to the NAIC, Louisiana ranks third nationally with an average premium of $1308 in 2013. New Jersey continues to rank number one in the nation, followed by Washington, D.C. This is significant because we have seen our ranking for the cost of insurance improve despite our minimum coverage requirements increasing in 2010 from 10/20/10 to 15/30/25 (i.e. $15,000 of bodily injury coverage per person/$30,000 of bodily injury coverage per accident/$25,000 of property damage coverage).

Other national reports have shown an improvement in our rankings as well. The Insurance Information Institute shows that between 2008 and 2013, Louisiana’s ranking for highest auto insurance rates dropped from second highest in the nation to fourth. Insure.com shows similar improvement with Louisiana dropping from most expensive in the nation in 2010 to fourth in 2014.

Though our auto markets remain competitive, starting in 2012 Louisiana’s private passenger market saw some hardening of prices, similar to what many other states observed after many

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years of stable rates that increased less than 1.5 percent per year. Private passenger auto rates in 2015 were up 5.7 percent statewide while commercial auto rates increased 3.2 percent.

The combination of dropping gas prices and increased distracted driving are significant factors driving up auto insurance premiums. With more people hitting the roads and increasingly distracted by cell phones and other electronic devices, Louisiana and other states are seeing an increase in accidents. At least one major insurer has said the higher frequency rates of accidents will continue to push premiums higher – but that in the long-run as automobiles become more sophisticated, accident rates may eventually decline.

2015 was marked by continuing positive news in the workers compensation market.

Rates, as measured by loss costs filed by the National Council on Compensation Insurance (NCCI), have declined dramatically over the last 20 years. I recently approved a rate request from the NCCI to lower workers compensation rates by 2.7 percent beginning May 1, 2016. The decrease follows a drop of 2.4 percent in 2014 and is the result of fewer and less severe workplace injuries. Louisiana rates have declined by 38 percent since 2006 – and by 51 percent since 1996.

We are also seeing more companies writing workers compensation insurance in Louisiana, an indicator of a competitive market. In 2007, there were 197 companies writing workers compensation – today there are 235 companies that’s an increase of 38 new companies, or 19 percent over that period..

While property and casualty insurance rates remain stable overall and new companies continue to enter the market, there remains a lot of work to be done. I look forward to continuing to work with you to strengthen our markets for the benefits of policyholders and our overall Louisiana economy.

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January IIABL Board Meeting Report IIABL President-Elect, Richard Jenkins, called the meeting to order.

Trusted Choice Grant IIABL National Director, Lee Schilling, presented a proposal to the board for a Trusted Choice grant to conduct Search Engine Optimization (SEO) to help consumers find Louisiana independent agents. IIABL would contribute $25,000 in order to qualify for a $30,000 Trusted Choice grant. The $55,000 budget will allow TrustedChoice.com to utilize search engine optimization for various key insurance terms specifically targeted for Louisiana and the largest 45 Louisiana communities.

For example, insurance terms like “insurance”, “automobile insurance”, “homeowners insurance”, “workers compensation insurance”, “commercial insurance”, etc. will be paired with “Louisiana”, “Shreveport”, “Monroe”, “Alexandria”, “Lake Charles”, “Lafayette”, “Baton Rouge”, “New Orleans”, etc. for the top 45 Louisiana communities.

The impact of the Search Engine Optimization project is that when Louisiana consumers search for insurance in their community, TrustedChoice.com will appear in the top three organic searches. When consumers click on TrustedChoice.com, they will find IIABL member agencies to provide the insurance coverages they need.

The IIABL Board of Directors discussed the pros and cons of the SEO project and the merits of IIABL funding the project. The board concluded that IIABL members need to have a significant presence in digital internet marketing, and that Search Engine Optimization for TrustedChoice.com is the best option available at this time.

On a motion by Joey O’Connor with a second

by Johnny Beckmann, the $25,000 IIABL expenditure for the Trusted Choice Grant was approved by the Board without objection.

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2016 IIABL Strategic Operating Plan

Legislation Requiring Notice of Agency Termination

IIABL President, David Dethloff, presented the updated 2016 IIABL Strategic & Operating Plans. The plan outlines three strategic goals.

The IIABL Board decided in November to introduce legislation that would require insurance companies to notify an agency six months before termination of their agency contract. The legislation is based on statutes in Iowa and Missouri. The proposed legislation would provide important protections to IIABL member agencies and their policyholders.

1. Attract additional market capacity to Louisiana and find ways to help small agents access markets 2. Talent development and staff perpetuation for member agencies 3. Member involvement, communications, consumer branding, & networking

The board discussed implementation plans for the plan this year.

On a motion by Don Stiel with a second by Paul Owen, the 2016 Strategic/Operating Plan was approved by the Board without objection.

2016 IIABL Legislative Agenda IIABL CEO, Jeff Albright, updated the board on the legislative issues the board identified as top priorities at their November meeting.

The board reviewed and discussed the draft termination notice legislation.

On a motion by Neil Record, with a second by Robert Riviere, the draft agency termination and policyholder renewal legislation was approved by the Board without objection.

Legislation Requiring Insurance Consultant Licensing & Regulation The second key legislative issue involves passing legislation which would require insurance consultants to be licensed and regulated by the Louisiana Department of Insurance.

The board reviewed and discussed the draft insurance consultant licensing legislation.

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IIABL has been working with the Professional Insurance Agents (PIA) Association and the Louisiana Department of Insurance (LDI) to draft comprehensive insurance consultant licensing legislation.

The board reviewed and discussed the draft insurance consultant licensing legislation.

On a motion by Neil Record, with a second by Bret Hughes, the draft consultant licensing and regulation legislation was approved by the Board without objection.

Surplus Lines Cancellation & Nonrenewal The IIABL Board had decided at their November meeting that IIABL would introduce legislation to require a 30 day notice of cancellation and nonrenewal. However, discussions with the Louisiana Surplus Lines Association (LSLA) led to a cooperative joint effort to resolve the problem without legislation. Please see the separate article in this newsletter for more details on this issue.

IIABL Officer Reports IIABL President, David Dethloff reported on various aspects of IIABL Association business.

IIABL Secretary-Treasurer, Neil Record, reported on the finances of the association.

IIABL National Director, Lee Schilling, reported on national IIABA issues.

IASC President, Jeff Mohr, reported on the for-profit activities of the association.

Young Agents Chairman, Lydia McMorris, reported on young agent activities.

IIABL CEO, Jeff Albright, reported on association business.

The meeting was adjourned.

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IIABL Director of Education, Mike Edwards is your source for technical questions. Contact Mike at medwards65@aol.com or 678.513.4390

Subject: Independent contractors and BAP/PAP issues Q. I am fighting to keep a renewal on a nice commercial account, and have run into a quagmire that I think has been created (intentionally or through ignorance) by a competitor who is also quoting on the account.

My insured specializes in renovating older upscale homes. They use independent contractors (ICs) as estimators, and these folks drive their own personal autos on the job. The company’s supervisors are all employees, and they also drive their own autos on the job. The three project managers drive company cars.

This other agent told my insured that he has no coverage if these independent contractors have an at-fault auto accident, and that the only way his company can be covered is to be added as an additional insured in each IC’s personal auto policy. Alternatively, he said the ICs could be added to my insured’s business auto policy.

He also told my insured that the fact that we did not uncover and fix this coverage gap is probably negligence on our part, and would be an E&O claim. As you can imagine, I’m pretty steamed about the whole thing. One concern I have is that this agent has a CPCU and a couple of other designations I did not recognize, so I don’t want to crawl out on a limb unless I’m sure of my facts. I would really appreciate your advice.

A. Here is how coverage applies in the BAP (Business Auto Policy) and PAP (Personal Auto Policy) for both independent contractors and employees, as well as for commercial insureds like yours.

Assume the following: (1) Your insured is Smithco Quality Renovations, and they are the named insured in a BAP. (2) Jack is an estimator for Smithco as an independent contractor, who drives his Ford Explorer on the job, and is a named insured in his PAP. (3) Jill is a supervisor and employee of Smithco, who drives her Ford F-250, and is a named insured in her PAP. Excerpts and comments below are based the ISO BAP and PAP. Proprietary forms may be different.

Accident #1: Jack (independent contractor) runs a red light and causes an at -fault accident.

Jack’s PAP - Excerpts PP 00 01 01 05 Part A – Liability B. "Insured" as used in this Part means: 1. You or any "family member" for the ownership, maintenance or use of any auto or "trailer".

2. Any person using "your covered auto".

3. For "your covered auto", any person or organization but only with respect to legal responsibility for acts or omissions of a person for whom coverage is afforded under this Part.

4. For any auto or "trailer", other than "your covered auto", any other person or organization but only with respect to legal responsibility for acts or omissions of you or any "family member" for whom coverage is afforded under this Part. This Provision (B.4.) applies only if the person or organization does not own or hire the auto or "trailer".

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Comments: (1) Jack is an insured under B.1.

(2) Smithco is an insured under B.3. (for their vicarious liability) (3) Jack’s PAP is primary (4) Any other insurance is excess (5) ISO does not have an additional insured endorsement (naming Smithco) in their PAP program, because the coverage is included under B.3. More on that later.

Smithco’s BAP - Excerpts CA 00 01 10 13 Section II – Covered Autos Liability Coverage 1. Who Is An Insured The following are "insureds": a. You for any covered "auto". b. Anyone else while using with your permission a covered "auto" you own, hire or borrow except: (1) The owner or anyone else from whom you hire or borrow a covered "auto".

(2) Your "employee" if the covered "auto" is owned by that "employee" or a member of his or her household.

Comments: (1) Smithco is an insured under 1.a., if symbol 1 (“any auto”) or symbol 9 (“non-owned auto”) is used.

(2) Jack is not an insured as a permissive user under 1.b., since Smithco did not “own, hire or borrow” his auto (in the opinion of most experts).

(3) ISO does not have an endorsement that would provide Jack with insured status in this situation.

Accident #2: Jill (employee) is leaving a job site and accidentally backs into a pedestrian.

Jill’s PAP - Excerpts: Same as for Jack’s PAP – see above.

Comments: (1) While Jack is an IC, and Jill is an employee, her PAP responds the same way Jack’s does as to coverage for them individually, and for Smithco. See excerpts and comments above.

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Smithco’s BAP - Excerpts:

See coverage excerpt above Comments: (1) Smithco is an insured under 1.a., if symbol 1 (“any auto”) or symbol 9 (“non-owned auto”) is used.

(2) Jill is not an insured as a permissive user under 1.b., since Smithco did not “own, hire or borrow” her auto (in the opinion of most experts).

(3) If Smithco wanted to provide Jill with insured status, endorsement CA 99 33 Employees As Insureds could be attached. The endorsement provides the following coverage: “Any "employee" of yours is an "insured" while using a covered "auto" you don't own, hire or borrow in your business or your personal affairs.”

(4) Smithco’s BAP is excess.

Additional comments on PAP and additional insureds.

Where an employee drives his or her personal auto on business, requests from employers

to be added to the employee’s PAP as an additional insured are not uncommon.

While coverage for the employer is automatically provided by the employee’s Personal Auto Policy (as illustrated above), there is nothing in writing that the agent can give the employer to verify this, since there is no ISO endorsement for Additional Insureds (other than Lessors).

However, the Business Auto Policy has just such an endorsement – CA 20 48 - Designated Insured. It basically provides a space to put the “Designated Insured,” but the endorsement states that “Each person or organization shown in the Schedule is an 'insured' for Liability Coverage, but only to the extent that person or organization qualifies as an 'insured' under the Who Is An Insured Provision contained in Section II of the Coverage Form.” Translation: “We’ll show your name on the Schedule, but the endorsement doesn’t provide any coverage not automatically contained in the policy.”

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Webcasts E&O Risk Management February 2, 9 & 18 March 3 & 17

Ethics February 16 March 3 & 15 April 13

Flood March 22 April 28

Commercial & Personal Lines Courses Click above title for courses & dates for 2016

E&O Risk Management April 6, 2016 Lafayette Tuesday April 19, 2016

E&O Risk Management April 7, 2016 Baton Rouge Speaker: Cheryl Koch The Independent Agency of the Future

E&O Risk Management April 8, 2016 Kenner Baton Rouge Crowne Plaza

Young Agents Crawfish Boil March 18, 2016 Baton Rouge

Trusted Choice Make A Wish Bowling Event April 8, 2016 – Shreveport, Monroe, Lafayette, Baton Rouge April 14, 2016 New Orleans Sponsorship Form

CSR Training: The Customer Service Representative is key employee in every agency and is a difficult commodity to find.

Environmental Strategists (eS) Becoming a certified environmental Strategist™ (eS) will equip you with the knowledge to identify, manage and transfer environmental exposures impacting everyday business.

Seminars E&O Risk Management April 5, 2016 Monroe 2016 Education Conference

Events Young Agents Seminar & Mixer March 3, 2016 – Shreveport Speaker: Commissioner of Insurance Jim Donelon

On-Demand Webcasts Masters Series: The Master Series are unique agency management courses from industry experts. in the Masters Series.

Cyber Risk Manager (cyRM) Completion of the Cyber Exposures & Insurance – Training for Agents & Brokers course qualifies you to register for the cyRM certification for FREE. Coming soon!!

Pre-Licensing Online prelicensing 3 optional study packages available Click here for additional information

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Because this problem arises frequently, some individual insurers have developed a Personal Auto Additional Insured endorsement, patterned after the Business Auto endorsement CA 20 48. Other insurers have proprietary endorsements or additional coverage provisions that recognize “additional interests” in the auto policy. These may or may not be the same as making a person or entity an additional insured, so each endorsement should be read carefully.

Another approach some employers take is to require that any employee or independent contractor who drives his personal vehicle on business to increase their limit of liability insurance, since the PAP would be primary over the BAP of the employer (BAP is excess for non-owned autos). However, this can cause a hardship for some employees or independent contractors. For example, in situations where they have one or more teenage drivers in the household, increasing limits on such a policy would often cause a substantial increase in premium.

Lastly, a common-sense risk management step would be for an employer to review the

Motor Vehicle Report (MVR) of each employee or independent contractor who drives any auto (his own or a company auto) on company business. However, E&O experts strongly caution insurance agencies NOT to furnish MVRs to employers of their personal auto insureds. Most employers already do numerous types of background checks on employees, and there is no shortage of companies who provide MVR service. MVRs are protected by the Fair Credit Reporting Act (FCRA), which restricts access to various forms of personal information. See links to articles below.

Additional reference.

“The PAP and Additional Insureds” “Furnishing MVRs to Insureds Could Be Hazardous to Your E&O” “Furnishing MVRS...Legal But Not Permitted” “Authorization Form to Provide Driver MVRs to Employers” These materials are intended for educational purposes only and should not be relied upon as legal advice.

Please consult a qualified attorney for legal advice.

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Coverage Type

Overall % Impact:

Overall $ Impact:

Number of Policyholders:

Requested Effective Dates:

American Fire & Casualty; Ohio Casualty, Ohio Security, West American

Commercial Automobile

9.265

$1,130,489

981

New: 9/1/2016 Renewal: 9/1/16

Occidental Fire & Casualty North Carolina

Homeowners

3.5

$470,155

7816

New: 1/15/2016 Renewal: 2/28/2016

State Farm

Other Liability

13.100

$2,004,491

20165

New: 3/15/2016 Renewal: 5/15/2016

Ace American Insurance Co

Workers Comp

-3.10

-$831,476

644

New: 5/1/2016 Renewal: 5/1/2016

Company

BIG “I” RESPONDS TO GOOGLE COMPARE CLOSURE Google’s exit creates opportunities for Big “I” agents and TrustedChoice.com in digital universe.

ALEXANDRIA, Virginia, Feb. 23, 2016— The Independent Insurance Agents & Brokers of America (IIABA or the Big “I”) today issued the following statement from Robert Rusbuldt, Big “I” president and CEO: “With the shuttering of Google Compare, independent insurance agents are wellpositioned to take advantage of the marketplace void via TrustedChoice.com: the online platform that links consumers with independent agents and independent agency companies. The closing of Google Compare doesn’t lessen the consumer appetite for online shopping. In fact, consumer shopping

for insurance has exploded on TrustedChoice.com as consumers come to understand the ease of use and value added by Trusted Choice® independent insurance agents and brokers.

“Independent agents and brokers continue to increase their digital presence and marketing, while using TrustedChoice.com for both personal and commercial lines to ensure they are doing business the way consumers prefer.

“Consumers have choices on where to look for insurance, and TrustedChoice.com is increasingly becoming the preferred way to find an independent insurance agent, who offers a variety of coverages and options.”

Louisiana Agent 27

Insurance Industry Target in Legislative Fiscal Session No doubt you have read and heard a great deal in the news about the current First Special Session of the Louisiana Legislature. The mainstream media has reported that legislators are looking for every possible budget cut and tax increase to fill the nearly $1 Billion deficit for this year, and more than $2 Billion deficit next year.

The insurance industry has not escaped the new taxes dragnet. Two bills have been introduced which would seek to raise revenue directly from the insurance industry.

HB 56 - Reduces Insurance Premium Tax Credits HB 56 by Representative Andy Anders would reduce the premium tax credits that insurance companies receive for investing in Louisiana financial institutions. Historically, insurance companies have been able to earn tax credits when they keep various investments in Louisiana financial institutions. HB 56 makes two changes that will reduce the amount of tax credits that insurance companies can earn.

HB 69 - Suspends Louisiana Citizens Property Insurance Corporation Assessment Income Tax Credit HB 69 by Representative James Armes would suspend the income tax credit that policyholders receive for their Louisiana Citizens Property Insurance Corporation assessment for returns filed for the two years between January 1, 2016 and December 31, 2017.

The average rebate is estimated to be $113. As of December 31, 2014, about $240 million or 65 percent of current funds available from 2011 through 2014 were not claimed. The allotted time to claim funds for 2006 through 2010 has expired and more than $306 million or 53 percent of those funds went unclaimed. The option to claim the 2012 assessment will expire at the end of 2016.

First, HB 56 would eliminate cash and certificates of deposit as qualified investments to earn tax credits. Insurers would have to invest in government bonds, mortgages, real property, policy loans, or stocks of Louisiana domestic corporations.

Second, HB 56 reduces the amount of qualified investments by 10% from January 1, 2016 through January 1, 2018. This effectively reduces the amount of tax credits earned on qualified investments by 10% for two years.

The fiscal note on this bill indicates a reduction in tax credits, and an increase in premium taxes paid of $16.6 million.

Louisiana Agent 28

By: Steve Anderson

Mini-Marketing Lessons from Google Being able to master your Internet presence is key for an insurance agency or individual agent who wants to be visible to the digital consumer.

It can seem overwhelming to learn all of the technical ins and outs of having your name show up on a search engine results page.

Google Primer is a and Android) designed learn more about marprovides digital online course takes about complete – on various A new lesson is reweek.

new app (iOS to help anyone keting. The app courses – each five minutes to marketing topics. leased each

Lesson categories curAdvertising, Content, and Strategy. Under of the lessons is ing Page That Lands

rently include: Measurement, Advertising one “Create a LandCustomers.”

The app makes it easy to utilize those few minutes between appointments to enhance your marketing education.

The content for each lesson is codeveloped by industry experts and Google, which works with these experts to simplify the language and add related interactions.

While Google’s goal is to highlight their products and services, I have found that the lessons provide great information that is easy to understand and apply. The design, functionality, and user experience of the app makes it a pleasure to use.

Check it out and let me know what you think.

What tools do you use to keep up-to-date on marketing online? Let me know in the Comments Section.

Louisiana Agent 29

If your local chapter or insurance group would like to include meeting dates, event flyers, etc.

Please send your information to Francine Berendson, fberendson@iiabl.com to be included in the Louisiana Agent Newsletter.

The Independent Insurance Agents of Baton Rouge held their monthly luncheon at Juban’s Restaurant.

Our guest speaker was Darrell Ourso, former Baton Rouge Metro Councilman and Louisiana Representative.

Darrell’s presentation featured insightful information on the Louisiana budget crisis and the ongoing saga regarding Baton Rouge traffic.

From left to right: IIABR Board Member, John Didier with Blumberg & Associates, Darrell Ourso, IIABR President Brad Hughes with Hughes Insurance Services and IIABR President-Elect Lydia McMorris with Regions Insurance

In regards to these 2 topics Darrell has provided information on the Dedicated Funds by Constitutional and Statute and General Points about Transportation Funding.

Events Calendar

IIABR Luncheon Charity Golf Tournament

IIAGNO Charity Golf Tournament Registration Form Sponsor Form Insurance Professionals of Shreveport/Bossier

March 10, 2016 May 5, 2016

Juban’s Restaurant Carter Plantation

March 11, 2016

Audubon Golf Course

February 25, 2016

Bunco Tournament Chimi V’s

Louisiana Agent 30

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

AMERISAFE

AMERICAS INSURANCE

AMTRUST GROUP

BANKERS INSURANCE

CNA INSURANCE

EMC INSURANCE

ENCOMPASS INSURANCE

FOREST INSURANCE

GULFSTREAM P&C

HOMEBUILDERS SIF

LUBA WORKERS’ COMP

MAISON INSURANCE

MARKEL FIRST COMP

RPS COVINGTON

SUMMIT CONSULTING

ASI

LANE & ASSOCIATES

Louisiana Agent 32

IIABL 2015—2016 BOARD OF DIRECTORS & OFFICERS David Dethloff President Dethloff & Associates—Shreveport Richard D. Jenkins President Elect Moore & Jenkins Insurance—Franklinton

Neil Record Secretary/Treasurer Record Agency, Inc.—Clinton H. Lee Schilling, Jr. National Director Schilling & Reid Insurance—Amite

Ross Henry Henry Insurance Service—Baton Rouge Bret Hughes Hughes Insurance Services—Gonzales Philip McMahon Paul’s Agency—Morgan City Lydia McMorris Young Agent Representative Regions Insurance—Baton Rouge Joseph A. O’Connor, III The O’Connor Insurance Group—Metairie

Mickey Bennett Past President Bennett Seymour Insurance—Monroe

Paul Owen John Hendry Insurance Agency-Zachary

John L. Beckmann, III J. Everett Eaves—New Orleans

Martin Perret Quality Plus—Lafayette

Byram H. Carpenter, III Moreman, Moore & Co—Shreveport

David T. Perry Arthur J. Gallagher RMS—Baton Rouge

Brenda Case Lowry-Dunham, Case & Vivien—Slidell

Robert Riviere Riviere Insurance Agency—Thibodaux

Joseph Cunningham, Jr. Cunningham Agency—Natchitoches

Armond Schwing Schwing Insurance Agency—New Iberia

Donna DiCarlo Riverlands Insurance Services—LaPlace

Michael D. Scriber Scriber Insurance Services—Ruston

Morris Funderburg Reeves, Coon & Funderburg—Monroe

Donelson P. Stiel David H. Stiel, Jr. Agency—Franklin Louisiana Agent 33