June 2018

Louisiana Agent JUNE 2018 A publication of the: Independent Insurance Agents & Brokers of Louisiana

IIABL STAFF Jeff Albright Chief Executive Officer jalbright@iiabl.com

In this issue: 116th IIABL Convention Recap ........................................ 5 2018 Convention Sponsors & Exhibitors ....................... 6-8 IIABL 2018-2019 Officers & Board ................................ 10

Francine Berendson Director of Communications & Events fberendson@iiabl.com

What are your new hire training plans? .....................12-13 Agency Management System Selection Summit .............. 14 Ask Mike Host Liquor Coverage in the CGL ..............................15-20 Does Your Agency Have a Catastrophe Plan? ................ 20

Mike Edwards, CPCU, AAI Director of Education medwards65@aol.com Karen Kuylen Director of Accounting kkuylen@iiabl.com Ed O’Brien Marketing Representative eobrien@iiabl.com Rhonda Martinez, CIC Director of Insurance rmartinez@iiabl.com Jamie Newchurch Insurance Services jnewchurch@iiabl.com Lisa Young-Crooks Executive Assistant lyoung@iiabl.com

Big I Louisiana/Mississippi Young Agents Conference .22-23 Improper Claim Declinations & the Value of the Agent .........................................24-26 How to Capture Anything on Your Screen ................. 28,38 Rule & Rate Filings ...................................................... 28 Interpretation & Application of the Separate Named Storm or Hurricane Deductible .......................... 32 The Customer Experience Journey Webinar .................... 34 Education & Events Calendar ........................................ 35 IIABL Partners .............................................................. 37 Commissioner’s Corner DOI Legislative Update .............................................38-39 2017-2018 Officers & Board of Directors .................... 40

2018 IIABL CONVENTION The 116th IIABL Convention & Exposition did not disappoint! What a fun-filled 4 days with beautiful weather.

to participate are still scratching their heads today wondering….how did he know that or do that!!

The start of the convention with our Exhibit Exposition was amazing. Our exhibit hall was jammed pack from opening to closing with agents, companies, brokers & vendors networking. A complete list of our exhibitors is listed on page 7.

Monday afternoon, Steve Barone with InstraSpect Advisors, presented a 3 hour CE Session entitled, Cyber For You—Are you Buying What You Are Selling?

The opening session on Monday started off with IIABL President Neil Record with the Record Insurance Agency in Clinton welcoming all attendees.

The afternoon and evening were finished off with Frozen Drink Treats, Company & Broker Cocktail Reception and Sweet Treats Desert Reception.

IIABL Past President, Richard Jenkins introduced your 2018—2019 incoming IIABL Officers & Board of Directors (complete list found on page 10). The following outgoing board members were recognized: Byram Carpenter Moreman, Moore & Co., Shreveport

Morris Funderberg Reeves, Coon & Funderberg, Monroe Richard Jenkins Moore & Jenkins, Franklinton David Perry Arthur J. Gallagher, Baton Rouge Ross Henry with Henry Insurance Service was recognized with the 2018 IIABL Outstanding Service Award for his contributions as the liaison for agency technology issues.

Insurance Commissioner Jim Donelon was our next speaker. Commissioner Donelon updated the attendees on the latest and greatest within the Louisiana Insurance Department.

Tuesday started off with the Breakfast of Champions and the IIABL Golf Tournament held at Kelly Plantation. The all day IIABL Beach Tailgate and ice & beer on the Barefoots deck finished off the afternoon and gave attendees ample time to get ready for Where Y’acht at the dance party.

The Wednesday closing session brought the passing of the torch from IIABL President, Neil Record to IIABL President-Elect, Johnny Beckmann. Thank you Neil for your service and we look forward to the next year with President Johnny Beckmann. IIABA Chairman-Elect, Joey Leahy updated the crowd on initiates by IIABA. IIABL CEO, Jeff Albright ended the convention with his presentation on the 2018 Regular Legislative Session and plans for tort reform and improving the automobile insurance market.

To close out the opening session was Sean Bott, comedian and mentalists. Sean had the audience mesmerized and the individuals who were chosen

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#bigImembersrock

Acadian Managers, LLC Access Home Insurance Co Accident Fund Insurance Co All Risks, Ltd. Allied Trust Insurance Co AmCap Insurance American Modern Insurance Americas Insurance Co Amerisafe, Inc AmWins Access Insurance Bankers Insurance Group Bass Underwriters Berkshire Hathaway Guard Burns & Wilcox, Ltd. Centauri Specialty Insurance Co Commercial Sector Insurance Brokers Compass Premium Finance Crescent Payroll Solutions Emergency Restoration Employers EZLynx Foremost Insurance Group Group Insurance, Inc. Gray Insurance Co Guide One Insurance Gulfstream P&C Homebuilders SIF

Houston International Insurance Group IIABL Young Agents Imperial PFS Lane & Associates LA Restaurant Assoc SIF LA Workers’ Compensation Corp LCI Workers’ Comp LCTA Workers’ Comp Lighthouse Property Insurance LUBA Worker’s Compensation Maison Insurance Company Orchid Insurance Pennsylvania Lumbermens Mutual Prime Insurance Progressive Insurance Property Insurance Association QEO Insurance Group RISCOM Risk Placement Services RMS Safehold Special Risks SafePoint Insurance Co SageSure Insurance Managers Selective Insurance Southwest Risk State National Fire Insurance Co Stonetrust Commercial Insurance

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John L. Beckmann, III, President Assured Partners—New Orleans

Joseph A. O’Connor, III, President-Elect The O’Connor Insurance Group—Metairie

Brenda Case, Secretary-Treasurer

H. Lee Schilling—National Director

Lowry-Dunham, Case & Vivien—Slidell

Schilling & Reid Insurance—Amite

Neil Record, Past-President Record Agency—Clinton

Brittany Mohr, Young Agent Representative Lewis Mohr Real Estate & Insurance-Baton Rouge

Joseph Cunningham, Jr. Cunningham Agency—Natchitoches

Donna DiCarlo Riverlands Insurance Services—LaPlace

Rob Eppers Risk Services of Louisiana-Shreveport

Stuart Harris

Ross Henry Henry Insurance Service—Baton Rouge

Bret Hughes Hughes Insurance Services—Gonzales

Harry B. Kelleher, III Harry Kelleher & Co—Harahan

Brother Marine Regions Insurance—Lafayette

Philip “Phe” McMahon Paul’s Agency—Morgan City

Lydia McMorris Alliant Insurance Services—Baton Rouge

Eugene Montgomery Community Financial Ins Services—Monroe

Joe King Montgomery Thomas & Farr Agency—Monroe

Paul Owen John Hendry Insurance—Zachary

Martin Perret Quality Plus—Lafayette

Robert Riviere Riviere Insurance Agency—Thibodaux

Armond Schwing Schwing Insurance Agency—New Iberia

Michael D. Scriber Scriber Insurance Services—Ruston

Donelson P. Stiel David H. Stiel, Jr. Agency—Franklin

McClure, Bomar & Harris—Shreveport

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What are your new hire training plans this year?

quotes and running reports to learn the business.

To create immediate impact and employee engagement, be sure to have your training program ready for launch from day one. Your State Association has an immediate solution for you to begin the onboarding process with your new hires.

Here’s a tip – space the learning! Varied and intermittent approaches reinforce concepts and increase the chance of content retention.

You will find online courses for introduction to insurance, commercial insurance, personal insurance and business skills readily available under the education tab. The course bundles can be mapped into an overall training plan with hours of learning for the new hire.

Integrate the structured online courses with responsibilities such as product review, agency management processes, client calls/visits, creating

According to Dartmouth College published research:

The timing or arrangement of review/practice affects learning.

•

•

•

•

Practice is more effective when spaced out over time, instead of massed or grouped together (equating total practice time).

Spaced practice enhances memory, problem solving, and transfer of learning to new contexts.

Spaced practice offers great potential for improving students’ educational outcomes.

Continued page 12

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Advice – space out the online learning over time, at least two months. The new learner will need a resource or internal coach for questions and stories of the concepts in action. Avoid crunching 40 hours of learning into the first week.

Congratulations on growing your team – Good luck!

ACT Updates Texting Resources Recently, the U.S. Court of Appeals for the D.C. Circuit struck down the Federal Communications Commission's (FCC) 2015 guidance on text messaging compliance, creating a murkier regulatory environment for businesses subject to the Telephone Consumer Protection Act (TCPA). Given the latest development, agents must remain diligent in regularly obtaining opt-in consent for sending texts to clients.

conjunction with the Big “I" Office of the General Counsel, has updated its guidance, sample text messaging opt-in form and sample terms and conditions.

Of note, the opt-in form, which is included as Exhibit A, has been revised to a one-page, fillable PDF for ease of use. Sample text messaging terms and conditions are included as Exhibit B and designed to be easily posted to an agency's website.

To access the sample resources, member can log in with their Big “I" credentials. Direct questions to Ron Berg, Scott Kneeland or Eric Lipton.

To help members meet the requirements of the TCPA, the Agents Council for Technology (ACT), in Continued page 11

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You’ll receive access to Steve’s Agency System Selection Digital Course, which includes:

• The Agency Management System Selection Summit will help agencies who think they might need to update or replace their existing agency management system. The Summit provides an easy way for agency owners to compare and contrast the top Agency Management Systems and vendors to start the process of deciding which platform might be the best fit for their organization.

Developed by Steve Anderson, an acknowledged expert on agency management systems, the Summit consists of about twenty 90-minute webinars, each featuring a different system management system platform handpicked by Steve to be involved.

Register for the Summit Today

Details on the 5-Step process Steve has used to help hundreds of agents and brokers select the best system for their organization.

•

A comprehensive list of agency management system vendors and their platforms (there are over 40).

•

A simple comparison grid of various platform functionality.

•

What to consider when choosing a hosted platform.

•

Samples of all the forms Steve uses when consulting with clients including a sample request for information, vendor demo script, AMS vendor demo scoring sheet and comparison, and an annual AMS System Cost Calculation spreadsheet.

IIABL Member’s will receive a discount on the registration fee.

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IIABL Director of Education, Mike Edwards, CPCU, AAI is your source for technical questions.

Contact Mike at medwards65@aol.com or 770.402.1011

Subject:

Q.

In last month’s article, you responded to an agent’s question about a young lady who was hosting an event for a small group of friends at a local salon and spa called ChillOut, where wine was going to be included in the group package plan. The article discussed the host liquor coverage under ChillOut’s CGL. My question is something of a follow up to that situation. First, would the young lady’s Homeowners Policy apply for her potential liability if an injury occurred on ChillOut’s premises during the event, such as a slip and fall? It is my understanding that the liability coverage in a Homeowners Policy excludes any premises that is not an “insured location.”

And what if the young lady brought extra liquor, since these types of group package deals I have attended limit the wine the establishment furnishes to one or two glasses per person, or otherwise limits the alcohol they make available. Does the young lady have host liquor coverage under her Homeowners Policy, especially in the situation where an attendee has an at-fault auto accident after the event?

A. Your point is well taken, and I’m glad

you raised this question. In today’s world, plaintiffs cast a wide net for tortfeasors,

Continued page 13 Louisiana Agent 15

which means that even if ChillOut has coverage for serving wine, individuals may need to look to their personal insurance for coverage as well.

Overview:

Assume that the young lady who was hosting the event is Jill, and she is the named insured in a Homeowners Policy and a Personal Auto Policy.

Comments below are based on ISO (Insurance Services Office) coverage forms. Proprietary forms may be different.

(2) In addition to suing Becky and ChillOut, Sam sues Jill, in both her capacity as host, as well as having brought additional liquor to the event.

Issue #1: Is ChillOut an “insured location” in Jill’s Homeowners Policy?

Excerpt:

HO 00 03 05 11 Homeowners 3 – Special Form Section II – Liability Exclusions E. Coverage E – Personal Liability And Coverage F – Medical Payments To Others

(1) Assume that Becky is one of Jill’s guests.

She has had too much to drink, and as she leaves ChillOut’s parking lot, she hits pedestrian Sam.

(3) There is no liquor exclusion, or reference to “host liquor” coverage, in the ISO Homeowners Policy. However, since Sam was injured by an auto, the liability exclusion for claims arising out of an auto will require close examination.

(4) Over the years, ISO has significantly changed the liability exclusion relating to autos.

Therefore, the edition date of Jill’s policy will be very important. Here is a comparison of the auto exclusion in the 3 most recent editions of the ISO HO (1991, 2000, 2011).

Coverages E and F do not apply to the following:

Excerpt(s) from Jill’s Homeowners Policy:

4. "Insured's" Premises Not An "Insured Location"

Homeowners 3 – Special Form

"Bodily injury" or "property damage" arising out of a premises:

HO 00 03 04 91 [1991 edition]

a. Owned by an "insured";

1. Coverage E – Personal Liability and Coverage F – Medical Payments to Others do not apply to "bodily injury" or "property damage":

b. Rented to an "insured"; or c. Rented to others by an "insured"; that is not an "insured location"; Comments: (1) This exclusion applies only to a premises that is owned by, or rented by or to, an insured. By merely hosting an informal social event at ChillOut, it seems unlikely that Jill actually rented any part of ChillOut’s premises.

(2) In addition, even if she did, the exclusion still would not apply, since one of the definitions of an “insured location” is “Any part of a premises occa-

sionally rented to an "insured" for other than business use.”

Issue #2: Host liquor liability coverage in Jill’s Homeowners Policy

Section II – Exclusions

f. Arising out of: (1) The ownership, maintenance, use, loading or unloading of motor vehicles or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an "insured"; (2) The entrustment by an "insured" of a motor vehicle or any other motorized land conveyance to any person; or (3) Vicarious liability, whether or not statutorily imposed, for the actions of a child or minor using a conveyance excluded in paragraph (1) or (2) above.

Homeowners 3 – Special Form HO 00 03 10 00 and HO 00 03 05 11 [2000 and 2011 editions]

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Section II – Exclusions A. "Motor Vehicle Liability" 1. Coverages E and F do not apply to any "motor vehicle liability."

Definitions 1. "Aircraft Liability", "Hovercraft Liability", "Motor Vehicle Liability" and "Watercraft Liability", subject to the provisions in b. below, mean the following:

(4) Failure to supervise or negligent supervision of any person involving such vehicle or craft by an "insured"; or (5) Vicarious liability, whether or not imposed by law, for the actions of a child or minor involving such vehicle or craft.

Comments:

(1) Ownership of such vehicle or craft by an "insured";

(1) If Jill has the 1991 edition of an ISO Homeowners Policy (HO 00 03 04 91), her liability coverage in Section II will respond to Sam’s lawsuit.

Her exposure would be a vicarious tort arising from Becky’s auto hitting Sam, which Sam would allege was the result of the liquor made available

by Jill.

(2) Maintenance, occupancy, operation, use, loading or unloading of such vehicle or craft by any person;

(2) In the excerpt from the 1991 edition above [Section II Exclusion 1.f.(1)], note that the auto exclusion applies to “motor vehicles... owned or

a. Liability for "bodily injury" or "property damage" arising out of the:

(3) Entrustment of such vehicle or craft by an "insured" to any person;

operated by or rented or loaned to an insured.”

Continued page 16

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Since Becky is not “an insured” in Jill’s Homeowners Policy, the exclusion does not apply to Jill when she is sued by Sam. (3) The two more recent editions (2000 and 2011) of the ISO Homeowners Policy made significant changes to the motor vehicle exclusion. The change was made in the 2000 edition, and the exclusion remained unchanged in the 2011 edition.

(4) The operative change in 2000 that pertains to Jill’s situation is not readily noticeable. The 1991 exclusion applies to motor vehicles, while the 2000 and 2011 exclusion applies to “motor vehicle liability.” [See excerpt above: Section II Exclusions A.1.] Since “motor vehicle liability” is a defined term, the scope of the exclusion is now found in the Definitions section of the policy. [See excerpt above: Definitions 1.a.(2).]

(5) In the 2000 and 2011 editions, the “motor vehicle liability” exclusion in Jill’s policy applied to the “Maintenance, occupancy, operation, use, loading or unloading of such vehicle or craft by any person. [See Definition 1.a.(2).] In short, the exclusion applied to the use of any motor vehicle by any person. Therefore, Jill would have no coverage for a lawsuit against her by Sam, arising from Becky’s use of her own auto

which injured Sam.

(6) In addition, the list of torts related to a motor vehicle accident were increased, so that newly included in the motor vehicle exclusion was “Failure to supervise or negligent supervision of

any person involving such vehicle or craft by an insured.” [See excerpt above: Definition 1.a.

(4).] This would likely have been one of the torts alleged by Sam against Jill, for failing to monitor the consumption of alcohol by Becky.

(7) When ISO made these changes to the 2000 edition, many coverage experts and observers concluded that this enhanced exclusionary language essentially killed host liquor coverage in the Homeowners Policy, where an auto accident was involved.

(8) However, since then, there has been more comprehensive analysis within the industry, including ISO, on the effect of the revisions to the so-called host liquor coverage. In addition, a sizeable body of case law has had an influence on how the exclusion is interpreted. Many experts have concluded, paraphrasing Mark Twain,

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that rumors of the death of the host liquor coverage in the ISO Homeowners Policy have been greatly exaggerated.

Issue #3: Host liquor liability coverage in Jill’s Personal Auto Policy

(9) Here is one expert’s opinion, which is supported by many in the industry:

Personal Auto Policy

The negligent supervision language was developed by ISO in order to respond to an increasing number of judicial rulings where coverage was found for incidents that directly or indirectly involved motor vehicles in which an insured's act or decision was involved. Many of these cases used the term negligent supervision, which was not previously referenced in ISO policy forms. This brought the focus on what we believe to be the original underwriting intent of the preHomeowners general liability policies, which was to exclude coverage for the defense and indemnification of any claim or suit alleging negligent supervision by an insured for an accident involving an excluded vehicle. "Host Liquor" liability was not the focus, nor the reason for the modification of the language.”

Excerpt:

PP 00 01 01 05 Part A – Liability Coverage Insuring Agreement 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

Continued page 16

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Provision (B.4.) applies only if the person or organization does not own or hire the auto or "trailer".

“Personal Lines Host Liquor Liability Revisited”

Comments:

“Insured’s Party Gives Her Agent Heartburn”

(1) Since Sam’s lawsuit will include issues related to the use of an auto, Jill’s PAP should be examined for coverage, in addition to whatever coverage she may have in her Homeowners Policy.

“Holiday Parties and Insurance”

(2) As a defendant in Sam’s legal action, Jill is covered in her PAP under B.1., which provides her coverage for the ownership, maintenance or use of any auto or trailer. [See excerpt above.] This provision is often misunderstood in a situation such as Jill’s, where the auto in question – owned and operated

by Becky – and which struck Sam, was not owned, maintained, or used by Jill.

(3) However, the intent of the coverage is much broader, and is best understood by this rephrasing of B.1.: Jill is covered for the ownership, maintenance or use of any auto...by anyone. Simply stated, if there is a nexus (legal connection) that can be sustained in court between Jill and Becky’s auto, Jill is covered. In this case, the nexus is Becky’s negligent driving due to the alcohol provided by Jill.

(4) Liability coverage is provided on an excess basis for non-owned autos. Under Becky’s ISO PAP, Jill is an “insured” under B.3., and coverage is on a primary basis.

Issue #4: A word of caution (1) Proprietary auto forms populate a substantial segment of the personal auto market, and some are decidedly inferior in coverage to the ISO PAP. Sometimes the differences are obvious, and sometimes they are subtle, and require a close reading by any agent selling that particular policy.

(2) Here is one example from a recent claim. In a situation similar to Jill’s, the proprietary form added one word and dramatically reduced the coverage Jill would have had under an ISO PAP. In their B.1. provision, it read: “You or any family member for

(the) YOUR ownership, maintenance or use of any auto or trailer. [Caveat emptor] and [Caveat agent.]

Additional information: “Personal Lines Host Liquor Liability”

“HO and PAP Coverage for Social Events Involving Facility Rental, Valet Parking, and Liquor”

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.

Does Your Agency Have a Catastrophe Plan?

It is that time of the year...hurricane season and it is time to check on your agency’s catastrophe plan or to implement a catastrophe plan. Although with the frequency of flood events in Louisiana it might be a good idea to have your agency review your catastrophe plan at the beginning of each year.

IIABL has a comprehensive section of our website dedicated to Catastrophe Planning. Login to the IIABL website and under the Information & Membership tab you will find the Catastrophe Planning Section.

Download the Agency Catastrophe Guide and review it with your staff. Valuable information for you, your agency, your employees and your insureds can all be found under the Catastrophe Planning section.

This is one of the many IIABL Member Benefits available to you.

When you go to the IIABL website we request the first thing that you do is to login. If you are not logged in on the IIABL website you are missing out on valuable member only content that only IIABL members have access to.

Don't know your log-in/password? Retrieve it here Louisiana Agent 20

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AUGUST 2—5, 2018 RITZ CARLTON—NEW ORLEANS The Independent Insurance Agents & Brokers of Louisiana & the Independent Insurance Agents of Mississippi invite you to attend the 15th annual joint Young Agents Conference. This conference is designed to help young agents succeed through education, motivation and networking opportunities among fellow agents and company personnel.

Who Should Attend: This event is designed for young insurance professionals who are looking to expand their skills, network and share information with fellow agents and strengthen relationships with company representatives. (Those who are young at heart are welcome too!!)

Venue: This year’s conference will be held at the beautiful Ritz Carlton in New Orleans. The room rate for the conference is $149.00. Reservations can be made online here or by calling 1/800-826-8987.

Group Rate Code

VLOVLOA (Deluxe King Accommodations - $149) VLOVLOB (Deluxe Double Accommodations - $149)

TENTATIVE AGENDA: Thursday, August 2, 2018 12:00pm

Golf Shotgun Bayou Oaks @ City Park South Course

Friday, August 3, 2018 1pm—4pm 6pm—7pm 8pm—12am

How Your Agency Can Leverage the Big Social Disruptors Aubie Knight Welcome Reception Hospitality Suite

Saturday, August 4, 2018 9am—12pm 12pm—1:30pm 5:30pm—6:30pm

Young Agents Roundtable Discussion Meet the Sponsors Luncheon Cocktail Reception Louisiana Agent 22

Badge Name

Name Agency/ Company

Spouse/ Guest

Address

City/State/ Zip

Email

Phone

Registration Fees:

□ □ □

Agent/Company Representative

$140.00

Spouse/Guest

$ 90.00

□

Thursday Golf

$135.00

First-Time Member Young Agent Attendee

Method of Payment:

□

Check

FREE

□ Credit Card (click here) □ Invoice

Mail registration form and payment to: Independent Insurance Agents & Brokers of Louisiana (IIABL) 18153 East Petroleum Dr. Baton Rouge, LA 70809 Phone: 225/819-8007 Fax: 225/819-8027

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Bill Wilson, CPCU, ARM, AIM, AAM

A fire started in a cabinet of a tenant in a building. In addition to the fire damage, there was water damage from the fire sprinkler system, as well as openings cut in the roof by the fire department to ventilate the smoke. It appears that the tenant is responsible for

the damage.

The claim was submitted to the tenant’s E&S CGL insurer and the adjuster denied it, citing this exclusion in the ISO policy: Damage To Property “Property damage” to:

(1) Property you own, rent, or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another’s property; According to the policy language above, there is no coverage for damage to property you own, rent or occupy. So, what’s the problem?

The problem is the selective use of policy language to deny a covered claim. If you continue to read this exclusion in the ISO form, you will come to the following exception {EMPHASIS added]: Paragraphs (1), (3) and (4) of this exclusion do not apply to “property damage” (OTHER THAN DAMAGE BY FIRE) to premises, including the contents of such premises, rented to you for a period of seven or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in Section III – Limits Of Insurance.

Continuing in this section of the policy, you will find the following as well [EMPHASIS added]: Exclusions c. through n. DO NOT APPLY TO DAMAGE

BY FIRE to premises while rented to you or temporarily occupied by you with permission of the owner. A sepa-

rate limit of insurance applies to this coverage as described in Section III – Limits Of Insurance.

This is what we traditionally refer to as “fire damage legal liability” (FDLL) coverage and this insured had a limit on his declarations page of $50,000. While there are better ways to cover the exposure for damage to rented premises, the point here is that the adjuster only cited the exclusionary portion of the policy and left out the exceptions to that exclusion that created coverage.

Why is this? Was this done deliberately and selectively to avoid paying a covered claim? Was it done because the adjuster lacks the minimal knowledge and skill to competently do the job?

In either case, there is state law that governs both reasons. Or is there some other reason we can’t possibly fathom? None of the possibilities that come to mind are flattering and the possibility that this could be a deliberate attempt to defraud the insured is troubling.

In my forthcoming book, “When Words Collide: Resolving Insurance Coverage and Claims Disputes,” I devote a large section, with several real-life examples like this, to improper claim declination and reservation of rights letters. For example: To illustrate a “selective” language denial, a condo owner rented the clubhouse for his child’s birthday party. The property management company required at least $300,000 of liability insurance. Fortunately, this was a coverage inquiry and not a claim denial, though the agent likely made the mistake of posing the question to the underwriting, not claims, department. An underwriter responded that, while his limits were adequate, there would be no coverage under his homeowners policy and that the agent should procure a special events policy for the insured.

In the email response, the underwriter cited this liability exclusion: Arising out of a premises: Continued page 26 Louisiana Agent 24

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(2) Rented to an “insured” The problem with this policy language citation is that it did not include the exception to the exclusion [emphasis added]: Arising out of a premises: (2) Rented to an “insured”; that is not an “insured location”; The definition of “insured location” includes “Any part of a premises occasionally rented to an ‘insured’ for other than ‘business’ use.” In other words, the clubhouse is an “insured location,” so the exclusion does not apply. It is unknown whether this was an oversight or a deliberate attempt to conceal relevant policy language. The moral for EVERYONE involved is “RTFP!” In addition, in this section of the book, I discuss Unfair Claims Settlement Practices laws.

For example, here is an excerpt of the law for the state in which this claim took place: Unfair claim settlement practices.— A material misrepresentation made to an insured or any other person having an interest in the proceeds payable under such contract or policy, for the purpose and with the intent of effecting settlement of such claims, loss, or damage under such contract or policy on less favorable terms than those provided in, and contemplated by, such contract or policy; or

In this claim, the agent knew that the denial was improper and, when it was challenged, it was immediately reversed. I suspect that a regulatory inquiry should also be made based on the following state law [emphasis added]: 626.611 Grounds for compulsory refusal, suspension, or revocation of agent’s, title agency’s, adjuster’s, customer representative’s, service representative’s, or managing general agent’s license or appointment.

The department shall deny an application for, suspend, revoke, or refuse to renew or continue the license or appointment of any applicant, agent, title agency, adjuster, customer representative, service representative, or managing general agent, and it shall suspend or revoke the eligibility to hold a license or appointment of any such person, if it finds that as to the applicant, licensee, or appointee any one or more of the following applicable grounds exist: (8) Demonstrated lack of reasonably adequate knowledge and technical competence to engage in the transaction authorized by the liContinued page 31

Committing or performing with such frequency as to indicate a general business practice any of the following: Misrepresenting pertinent facts or insurance policy provisions relating to coverages at issue; Denying claims without conducting reasonable investigations based upon available information; Failing to promptly provide a reasonable explanation in writing to the insured of the basis in the insurance policy, in relation to the facts or applicable law, for denial of a claim or for the offer of a compromise settlement;

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Company

Coverage Type

State Farm Fire & Casualty

Overall % Impact:

Overall $ Impact:

+3.1%

$652,283

4—Homeowners

By Steve Anderson

How to Capture Anything on Your Screen with Snagit Many of you probably already know and use this versatile software program. The current version is 2018, so even if you have used this software tool for a while, it might be a good idea to glance through my comments below to make sure you’re utilizing all of the current functionality. If you do have a prior version, it also might be worth upgrading.

Over the last few years, TechSmith has added a lot of new features and functionality to the platform. So below I am highlighting the capability of the program. It’s no longer just a screen capture program.

Screen Capture Many organizations use the screen capture function to insert screenshots from their agency management system into their procedure and workflow guides.

–All-in-One Capture® Simply click and drag the crosshair to get the perfect screenshot every time. Allin-One Capture grabs your entire desktop, a region, a window, or a scrolling screen. Grab any webpage, application or capture video — all with a single hotkey or click.

–Scrolling Screen Capture Take a full-page, scrolling screenshot. Snagit’s screen capture tool makes it simple to grab vertical and horizontal scrolls, infinitely scrolling web pages, long chat messages, and everything in between.

Number of Policyholders:

26,853

Changes

New: 6/15/2018 Renewal: 8/1/2018

–Grab Text Extract the text from a screen capture or file and quickly paste it into another document for edits. Easily copy information without retyping all the text.

Screen Recording A much better way to capture workflow processes within any software platform, including agency management systems, is to use this screen-recording function.

–Screen Recorder Software Snagit’s screen recorder lets you quickly record yourself working through steps. Or, grab individual frames out of the recorded video. Save your video file as an MPEG-4 or animated GIF. –Record Webcam Toggle between webcam and screen recording during a video. Use the recorder to add a personal touch with teammates or clients, no matter where they are.

–Record Audio Include audio in your videos from either a microphone or your computer’s system audio.

–Create Animated GIFs Turn any short recording (MP4) into an animated GIF and quickly add it to a website, document, or chat. Snagit comes with default and custom options to create the perfect GIF, every time.

–Trim Video Clips Remove any unwanted sections from your screen recordings. Cut any section at the beginning, middle, or end of your video. This is not a full video editing suite but does give you the basic functionality to trim your recorded video.

–Record iOS Screen The TechSmith Capture App lets you record your iOS screen with just a few taps and instantly share it back into Snagit for trimming.

Louisiana Agent 28

Big I members are invited to register for Digital Update, a new webinar from Trusted Choice®, to learn how to improve their digital presence and remain industry leaders.

The Digital Update webinar will explain how to develop and maintain an effective online brand by exploring uses, features and strategies for website and social media platforms.

Areas of focus will include: •

The importance of a digital presence.

•

Features of successful website and social media.

•

Website and social media integration.

•

A Trusted Choice digital review.

Members will also learn how to leverage available tools and resources to expand their online brand through services such as digital reviews, which explore an agency's website and social media properties to identify weaknesses, discover opportunities and build on strengths.

Webinars are scheduled for Wednesday, June 27 at 1-2:30 p.m. ET and Thursday, June 28 at 34:30 p.m. ET.

Louisiana Agent 29

Louisiana Agent 26

cense or appointment.

This is yet another example of the value of having an agent, especially an independent agent, who will advocate for a customer. Agents…remain vigilant!

Bill Wilson, CPCU, ARM, AIM, AAM Founder & CEO, InsuranceCommentary.com Bill@InsuranceCommentary.com or InsuranceCommentary@outlook.com

Com•men•tar•y … an expression of opinions or offering of explanations William C. Wilson, Jr., CPCU, ARM, AIM, AAM is the founder of InsuranceCommentary.com. He retired from the Independent Insurance Agents & Brokers of America in December 2016 where he served as Assoc. VP of Education and Research and was the founder and director of the Big “I” Virtual University for over 17 years. He is the former Director of Education & Technical Affairs for the Insurors of Tennessee and, prior to that time, he was employed by Insurance Services Office, Inc. He is a graduate of the Illinois Institute of Technology with a B.S. degree in Fire Protection & Safety Engineering.

Louisiana Agent 31

Advisory Letter No. 2018-01 is issued to inform all property and casualty insurers, both admitted and surplus lines, how the separate named storm deductibles or hurricane deductibles are to be interpreted and applied to claims resulting from a subtropical storm which has been named by the National Hurricane Center of the National Weather Service.

It has come to the attention of the Louisiana Department of Insurance (LOI) that there is some confusion as to whether a named storm deductible or hurricane deductible should be applied to claims for damages resulting from a named subtropical storm.

This confusion is cause for the LOI to issue Advisory Letter No. 2018-01 to provide guidance to all property and casualty insurers, admitted and surplus

lines, as to how they should interpret and apply separate deductibles when damage to an insured property results from a named subtropical storm.

The interpretation and application begins with the understanding of La. R.S. 22:1337. In pertinent part, this law states that all insurers issuing homeowners insurance, or insurance on a one or two-family owner occupied premise, that use a separate deductible that is to be applied in place of any other deductible to loss or damage resulting from a named storm or hurricane shall apply that separate deductible on an annual basis to all named storm or hurricane losses that occur during the calendar year.

Download the official and complete advisory letter here.

Louisiana Agent 34

Louisiana Agent 30

ACT to Host: The Customer Experience Journey Webinar Agents Council for Technology plans to host a special 30-minute webinar on the Customer Experience Lifecycle. The presentation plans to guide attendees on the 6 steps that make or break a customer's experience.

A 15-minute Q&A will follow immediately after the webinar.

Tuesday, July 24, 2018 2:00 to 2:30pm EST Cost: FREE Presenter: Claudia McClain, ACT Customer Experience Work Group Chair and Founder of McClain Insurance Services Click here to register!

Louisiana Agent 36

Webcasts E&O Risk Management July 3, 10, 24, 26 Available on Demand

Available on Demand

Available on Demand

Commercial & Personal Lines Courses Click above for courses & dates for 2018

Virtual University

Virtual University

July Webinars

July Webinars

Live webinars July 18 Pricing is Dead! Long Live Pricing: To Truly Succeed, You Need to Learn to Adapt

Ethics July 3, 27, 30, 31

July Lightning Learning:

July 10

Insurance & Autonomous Vehicles

July 24

Flood July 19

17 Scary CGL Exclusions 17 Cyber Liability: the 21st Century Peril

Applying the "Business Use Exclusion" in the Personal Auto Policy

19 Additional Insureds: The Quandary

July 31

23 Your Agency Online: Communication Cure or E&O Plague

Why Personally-Owned Autos Don’t Belong on the BAP

26 Home Business Versus Home Insurance 31 Insuring the Building Project: Builders Risk and Installation Coverage

Seminars E&O Risk Management 10/16/2018 –Shreveport 10/17/2018—Lafayette 10/18/2018—Kenner 10/19/2018—Covington

Events Big I Louisiana/ Mississippi Young Agents Conference August 2-5, 2018 New Orleans

On-Demand Webcasts

Pre-Licensing

Click here for the course catalog of all of the on-demand webcasts. Reminder– all of the IIABL online courses do not require a test for CE Credit

Online prelicensing 3 optional study packages Click here for additional information

Louisiana Agent 37

Image Editing Using the included editor, you can annotate screen captures with professional markup tools. Add personality and professionalism to your screenshots with a variety of pre-made styles. Or you can create your own.

Document Steps Quickly document steps and workflows with a series of numbers or letters that automatically increase.

–Blur Out Information Hide or mask sensitive information in an image. Obscure account numbers, addresses, or other information in screen captures that you share publicly.

–Smart Move Automatically make objects in your screen captures movable. Rearrange buttons, delete text, or edit other elements in your screenshots.

–Snagit Stamps Personalize your images with stickers specifically designed for screenshots. Get the latest stamps straight from Snagit or download previous stamps.

–Library Find all your past captures without wasting time digging for them. Your screen captures are automatically saved to your library. Tag captures to keep your projects organized.

–Resize Images Get your images to the correct size, right down to the pixel. Use the Resize option to enter new dimensions to scale the size of the image.

The program costs $50 for an individual license, with discounts available for five or more licenses purchased at the same time. I found the best place to acquire the software is on the TechSmith website.

–Text Replace Snagit recognizes the text in your screenshots for quick editing. Change the words, font, colors, and size of the text in your screenshots without having to redesign the entire image.

–Magic Wand Tool Use the Magic Wand tool to select an area on your image based on color. Quickly remove a background or replace the color in objects such as text or logos throughout a screenshot.

Louisiana Agent 38

GOLD LEVEL

SILVER LEVEL

BRONZE LEVEL

ACCIDENT FUND

AMERISAFE

AMERICAS INSURANCE

BANKERS INSURANCE

EMC INSURANCE

EMPLOYERS

FCCI GROUP

FOREST INSURANCE

GULFSTREAM P&C

HOMEBUILDERS SIF

IROQUOIS SOUTH, INC.

LANE & ASSOCIATES

RPS COVINGTON

STONETRUST INSURANCE

LUBA WORKERS’ COMP

MARKEL FIRST COMP

SUMMIT CONSULTING

Louisiana Agent 39

Commissioner’s Corner Department of Insurance Legislative Update In a session shortened to allow for a special session prior to the end of the fiscal year on June 30, the Department of Insurance was successful in proposing and promoting several pieces of legislation to modernize the insurance industry and better protect consumers. This month’s column provides a recap of legislative instruments important to our regulatory efforts.

Currently, Louisiana law prohibits an insurance producer from hiring an individual to work in an agency, in any capacity, if the individual has a past felony conviction of any sort. In practice, this meant that an agency or producer was barred from hiring a qualified candidate if they had any sort of felony on their record, including simple possession of marijuana or other low level offenses that may have been committed decades earlier.

Act 299 now permits an insurance producer or agency to hire an individual with a previous felony conviction on their record if the applicant has submitted an application to the Commissioner of Insurance for review and received a waiver allowing them to work in the insurance industry. Such individuals may also have to obtain a “1033” waiver from a relevant insurance regulator under federal law. This act allows the Department to keep applicants with a criminal history that may be detrimental to consumers from participating in the business of insurance while allowing applicants who are not a risk to participate in the economy of Louisiana. Act 299 takes effect on August 1, 2018.

Another legislative change we promoted was to make changes to the Louisiana Life and Health Insurance Guaranty Association (LLHIGA). Act 97 adopts recent changes to the National Association of Insurance Commissioners (NAIC) Life and Health Insurance Guaranty Association Model Law, bringing Louisiana into line with other states. The primary purpose is to make changes to the LLHIGA membership and assessment structure to provide a sustainable assessment base in the event

of future insolvencies of member insurers that sell long -term care insurance policies. Insolvencies in the longterm care market have created a burden on health insurer members of guaranty associations across the country and this legislation is part of a compromise created with the cooperation of members of the life and health industries to stabilize the market.

Act 597 will go into effect in 2019. This law will also give the Department the authority to investigate complaints against pharmacy benefit managers and levy a fee to fund these efforts. It will increase transparency for consumers when acquiring prescription drugs and allow the Department to act upon complaints from pharmacies against these businesses.

Also part of our legislative package, Act 100 sets forth requirements for the Bail Bond Apprentice Program. It is now required that a bail bond apprentice and the supervising producer must notify the Department of status changes, such as if the apprenticeship is terminated prior to completion of the program or has not completed the apprentice program within a six-month time frame. Failure to complete the program within six months may lead to an expiration of the current apprenticeship approval. This solves an ongoing issue of incorrect information submitted by the apprentice and the sponsoring producers that makes it difficult to monitor the program. It also reduces the likelihood of perpetual apprenticeships that may contribute to unlicensed activity.

Act 371 requires the Department of Insurance to publish pharmacy benefit manager information, including the formulary and timely notification of any changes to the formulary by every licensed PBM. The law also require PBMs to issue an annual transparency report that discloses data on administrative fees and rebates from pharmaceutical manufacturers that will be published by the Department of Insurance. Both measures will add some transparency to the effect that pharmacy benefit managers have on the cost of drugs and the services they provide to consumers and insurers.

Of the pieces of legislation put forward for licensing, two deserve special mention. Act 15 clarifies that a non -resident licensee is not required to complete continuing education requirements for Louisiana as long as they comply with the requirements of their home state.

The same would be true of Louisiana producers who hold non-resident licenses in states that have reciprocity on this issue. Act 17 exempts adjusters from continuing education requirements for their first renewal.

This brings adjusters into line with current continuing education requirements for the renewal of producer licenses and minimizes confusion.

The Louisiana Legislature also took up Pharmacy Benefit Managers transparency this session. Act 597, promoted by the Department, ensures that pharmacists are permitted to share information regarding costs, efficacy or the availability of alternative medicines with insured customers. For instance, a pharmacist may currently be prohibited by contract from informing their customers if a prescription would cost less out of pocket without using their insurance unless the customer specifically asks. This can leave consumers paying more for prescriptions than they would had they not used their insurance benefit. The law will also require the pharmacy benefit managers to provide pharmacies with information about maximum allowable cost for specific drugs and the sources used to obtain the drug price data.

Finally, a measure was passed that changes the Louisiana Citizens Property Insurance Corporation (Citizens) Take-Out Program. Until now, Citizens has been required to open its book of business annually and offer to transfer policies to the private market.

This results in lower premiums for policyholders and reduces the potential need for future assessments charged to all property insurance consumers across the state. However, when the policy count reaches a certain level, Citizens may no longer generate enough revenue to maintain itself. Act 131 changes the Take Out program from a requirement to open their book of business each year into a possibility to offer policies to the voluntary market with governing board approval. It further allows Citizens to base their offerings on geographic and risk characteristics that reduce its exposure.

You can find legislative digests on bills in their entirety by logging onto the Legislature’s website at www.legis.la.gov.

IIABL 2017—2018 BOARD OF DIRECTORS & OFFICERS Neil Record President Record Agency, Inc.—Clinton John L. Beckmann, III President Elect J. Everett Eaves—New Orleans

Joseph A. O’Connor, III Secretary/Treasurer The O’Connor Insurance Group—Metairie H. Lee Schilling, Jr. National Director Schilling & Reid Insurance—Amite Richard Jenkins Past President Moore & Jenkins Insurance—Franklinton

Stuart Harris McClure, Bomar & Harris—Shreveport Ross Henry Henry Insurance Service—Baton Rouge Bret Hughes Hughes Insurance Services—Gonzales Harry B. Kelleher, III Harry Kelleher & Company—Harahan Philip McMahon Paul’s Agency—Morgan City Joe King Montgomery Thomas & Farr Agency—Monroe

Paul Owen John Hendry Insurance Agency-Zachary

Donnie Stiel Young Agent Representative Stiel Insurance of Acadiana, Inc.

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 40