Page 1

ʲʱʮʫʥʻ Current Earns Commendation


2012 Legislative Focuses


Teubner, Wood, Bramlett

Winter 2012

LEADERSHIP TRIFECTA IIAO will celebrate sending its third Oklahoman to serve as IIABA national chairman in 2012

On target. Specialized insurance for specialized businesses.

At Mid-Continent, our focused expertise in specialized insurance products and services allows us to craft targeted solutions that maximize your productivity and profitability. 速

MID-CONTINENT GROUP Mid-Continent is a member of Great American Insurance Group.

301 E. Fourth Street I Cincinnati, OH 45202 I 0042-15-MCG (01/11)

1437 South Boulder I Suite 200 Tulsa, Oklahoma 74119

Vol. 34, No. 2



Dan Ramsey, CIC Kathy Rose, CPIW Kathryn Jenson White Sarah Cavanah Susan Titus, PMP


ON THE COVER IIAO’s national leaders, past and future: Dick Teubner, Courtney Wood and Bobby Bramlett.

25 IIAO’s National Leaders

EYE ON IIAO 18 19 22

IIAO Community Service OKPac and InsurPac Contributors And the Conferees Are...

COLUMNS 2 4 6 10 12 14


FEATURES 32 34 36 40

Big “I” Study Indicates Industry May Be on Road to Recovery New Survey Finds Bad Economy has Many Considering Changes to Insurance Policies Agency Perpetuation from the Lender’s Perspective New Swiss Re Corporate Solutions Insurance Agents E&O Policy Approved in Oklahoma



POLICY is the official publication of the Independent Insurance Agents of Oklahoma. POLICY is published quarterly and distributed to all member agencies and other interested parties in Oklahoma. Manuscripts and contributions are welcome, and will be considered for publication at the discretion of the IIAO Publications Committee. Correspondence and advertising inquiries may be addressed to IIAO, P.O. Box 13490, Oklahoma City, OK 73113. Ph: 405-840-4426 or 1-800-324-4426

The Independent Insurance Agents of Oklahoma is the largest insurance trade association in Oklahoma. With more than 475 independent insurance agencies, we represent nearly 4,000 independent insurance agents and their employees. IIAO member agencies range in size from one person to some of the largest agencies in the region.

staff located in Oklahoma City. IIAO’s mission, shown below, is carried out through a variety of programs designed to enhance the business of independent insurance agencies.

Founded in 1906 as the Oklahoma Association of Local Fire Insurance Agents, IIAO is a result of the consolidation of the Independent Insurance Agents of Oklahoma, Inc. (IIAO) and the Oklahoma Association of Professional Insurance Agents (OAPIA) on Jan. 1, 1992.

IIAO is affiliated at the national level with the Independent Insurance Agents and Brokers of America with offices in Alexandria, Va., and Washington, D.C.

IIAO policy is set by a board of directors elected at the annual convention. Policy is implemented by a professional


IIAO is an active advocate on behalf of independent agents before legislative, regulatory and judicial groups in Oklahoma and at the federal level.

IIAO is an excellent source of information through POLICY magazine, published quarterly, and the Oklahoma Agent, a monthly newsletter of time-sensitive material for its members.

The mission of the Independent Insurance Agents of Oklahoma, working in the public’s best interests, through active member participation, is to be the unrelenting advocate of independent insurance agents and to fulfill the education, political and business needs of its members.


OK Better Than OK As we near the end of the year, our state is excelling in many areas: collegiate sports, the economy and weather; as an organizational citizen, IIAO is also excelling in many areas. See below for details. Jed Dillingham


Dillingham Insurance, Enid

s I began thinking about this article, both Oklahoma and Oklahoma State remained undefeated for the 2011 football season. Hunting season in Oklahoma had started, and we had ďŹ nally been given a reprieve from the brutally hot weather we experienced this summer. Thanksgiving was on its way and Christmas was just around the corner. Oklahoma’s unemployment rate remained signiďŹ cantly below the rest of the country. Reminds me of the phrase the tourism department has used many times: “Is Oklahoma a great state or what?â€? Well, since I started thinking, things in that ďŹ rst category have changed, but not much. The big change is that OU is now down three and headed for the Insight Bowl, with one of those losses being a win for OSU when the Cowboys came out on top after eight straight losses to the Sooners. Although your association has been busy since the last issue of the Policy magazine, I’m not sure we can top that. However, here is our list of what we’ve been up to since I last reported to you:Â




Ed McGrath, CIC Wilcox & McGrath Insurance, OKC VICE CHAIRMAN

David Eaton, CIC Advantage Insurance Group, El Reno SECRETARY-TREASURER

Mark Carlin, CIC Cole Paine & Carlin, OKC STATE NATIONAL DIRECTOR

Vaughn Graham, CIC, CPCU, AFSB Rich & Cartmill, Tulsa IMMEDIATE PAST CHAIRMAN

t 8FQSFTFOUFEUIF'PPEGPS,JET#BDLQBDL1SPHSBN with a check for $25,000. The Regional Food Bank of Oklahoma runs this program helping children in almost every county in the state. Many of our member agencies and company partners are also running campaigns to raise funds for this worthy cause. The Young Agents Committee has raised more than $5,000. I am incredibly proud of the interest our members have shown in this charity and moved by the compassion our efforts reect. t #PCCZ #SBNMFUU IBT CFFO JOTUBMMFE BT UIF chairman-elect of the IIABA. Bobby will be the third national chairman from Oklahoma when he takes over next year. You can read more about that and our other two national presidents in an

Denise Johnson, CIC ECI Insurance, Piedmont

DIRECTORS Brad Berrong Berrong Insurance Agency, Weatherford

Tom Caraway Agar-Ford-Jarmon & Muldrow/INSURICA, Norman

Bruce Jordan, CIC Jordan Carris Agency, McAlester

Wes Magill, CIC





article later in this issue. We are fortunate to have so many strong national leaders come from our state. %BO 3BNTFZ IBT UFTUJmFE CFGPSF UIF *OTVSBODF Committee of the Oklahoma Legislature trying to provide information and receive clariďŹ cation from legislators regarding inducements, rebates and consulting agreements. 5IF,"*304DPOGFSFODFXBTIFMEJO/PSNBO Attendees and vendors alike all seemed to appreciate the opportunity to network in a smaller venue. The breakout sessions were well attended. I was thoroughly impressed by the tour of the National Weather Center on OU’s South Campus. 8FIBWFEFmOFEBOFXNFFUJOHGPSNBUGPSFYFDVtive and board meetings to engage members more actively in ďŹ ne tuning speciďŹ c issues rather than just make the gatherings a series of reports. This will take some time to get used to, but our new approach should allow the association leadership to make sure all participation is worthwhile and meaningful. :PVSFYFDVUJWFDPNNJUUFFBOECPBSEPGEJSFDUPSTBSF reading a book called “The Race for Relevance.â€? This book details ďŹ ve radical changes for associations to implement in preparing for the future. We are going to use this as our guidepost this year to make sure everything we do is relevant to you, the members of our association.

I am thankful to live in a state whose people have a true pioneer spirit, an internal drive to be steadfast in tough times and the tendency always to look for opportunities. Insurance agents are leaders within their communities. I am thankful to be surrounded by a group of individuals who give of their time and talents to help others. Let me repeat, “Is this a great state or what?�

Magill Insurance Agency, Weatherford


Mark Tedford, CIC Tedford Insurance, Jenks







Chris Torres, CIC

Phil Eitzen, CIC

Larry Neal, CIC, AAI, LUTCF

Thad Leonard

Donna Baker, CIC, CPIW

Mike Somers, CIC

Kelly Smith, CIC

Oklahoma Agents Alliance, OKC

Eitzen Agency, Fairview

J.T. Neal Agency, Lawton

Carl M. Leonard & Son, Tulsa

C.L. Frates & Co., OKC

Somers Insurance Agency, Lindsay

JWB Insurance, Holdenville



Fall 2011

You’re an independent agent.

Who’s got your back?

The Big “I” Professional Liability Program Protect. Prevent. Prosper. Our risk management resources keep your agency from making common preventable mistakes.

Our superior coverage through Swiss Re and our expert claims teams are in your corner in the event of a claim.

When you know you have the best agency E&O protection, you can focus on growing your most important asset–your business.

The Big “I” and Swiss Re are jointly committed to providing IIABA members with leading edge agency E&O products and services. The IIABA and its federation of 51 state associations endorse Swiss Re’s comprehensive professional liability program.

Insurance products underwritten by Westport Insurance Corporation, Overland Park, Kansas. Westport is a member of the Swiss Re group of companies and is licensed in all 50 states and the District of Columbia. ©2008 Big “I” Advantage, Inc. and Swiss Re


Legislative Tasks 2012 At the top of the legislative list for the new year is creating the state-based health insurance exchange; IIAO is working on that and other legislative issues to ensure that independent agents’ voices are heard. Dan Ramsey CIC



ell, it is that time of year when legislators begin returning to the state Capitol. Many individuals and groups have conducted a variety of interim studies since the session adjourned in May, and IIAO has been extremely busy working on several of them. It is almost a certainty that legislation will result from the work these studies represent. The biggest challenge the Legislature faces in the 2012 session is the creation of a state-based health insurance exchange. In that regard, I was named to a Joint Legislative Task Force to look at this issue. In November, I appeared at a task force hearing, along with Ryan Young, senior director of federal government affairs for the Insurance Agents & Brokers of America, to discuss the important role agents play in the insurance process and how and why they need to be included and compensated for their work in the creation of a state-based exchange in Oklahoma. The key elements we discussed were the following: 1 Because of the role agents play in representing carriers and consumers, they have an excellent understanding of the needs of both, so an agent representative must be included in any governance structure to form and operate the exchange. 2 Any person selling, soliciting, enrolling, consulting or contacting individuals to discuss the exchange must be subject to all of the provisions of the Oklahoma Producer Licensing Act. 3 All meetings of the exchange should be subject to Open Meeting Laws. 4 A sunset provision should be in the Oklahoma law that will repeal the law should the federal law be repealed. 5 A registration process should be in place to assure all persons placing business through the exchange have and maintain a minimum of $500,000 professional liability insurance. Failure to do so at any time will result in loss of all compensation to the producer until evidence is provided. In addition, agents should provide the exchange with tax information to receive compensation and should complete some sort of orientation program so they will understand how the exchange will operate and what tax allowances and incentives are available to enrollees.


POLICY Winter 2012

6 The plan must include compensation for agents. I have suggested the Utah model, which allows the writing carrier to pay the exchange an access fee. If the policy is written without the help of an agent, the exchange will retain the entire fee. If an agent writes it, the exchange will compensate the agent. The Utah plan allows for $37.50 per person per month to the exchange with the agent receiving $30.00 per person per month. This is an item that will likely require negotiation, but it is imperative for the consumer that the agent be compensated for the services performed. The second task force is the Business and Professional Licensing Task Force. This is another joint task force of 15 individuals consisting of legislators and individuals appointed by the governor, speaker of the House, and president of the Senate. Gov. Mary Fallin appointed me to serve. This task force is considering the requirements of a bill passed last session to study ways to have a one-stop agency for registration and licensing of Oklahoma businesses. Florida, Utah and Ohio have developed programs to simplify and streamline the process. The task force is looking at how and whether Oklahoma can successfully implement such programs. The challenge is to determine how to bring more than 1,400 license programs under one roof: plumbers, electricians, attorneys, architects and insurance agents. The requirements are obviously quite varied, but if the state could develop a structure for this, state agencies would be allowed to share information and remove duplication and additional demands on businesses for satisfying registration and licensure requirements. The third task force is a study of taxes. Quite frankly, although I have been appointed by Senate President Brian Bingman, R-Sapulpa, to serve, I have not been able to attend a meeting. However, I have reviewed the reports and submitted comments. I believe lawmakers will attempt to phase out the personal income tax in Oklahoma, an action I applaud. Removing this tax burden should help to bring growth to our economy by allowing the people who earn the income to keep more of it. It should also send a signal that Oklahoma is ready for business. I also had the opportunity to make a presentation to a separate task force in the House expressing my concerns about consideration of the removal of tax offsets for assessments made to insurance companies for money they pay


into the Oklahoma Property & Casualty Guaranty Fund. Currently, the fund receives its money to pay for insurance company insolvencies through assessments to insurance companies based upon a proportional share of the business they write in Oklahoma. It has three pools: automobile, workers’ compensation and all other. When a company pays money into one of these pools, the current law allows it to recoup its assessment over a 10-year period. If the offset is disallowed, consumers will see increased premiums as the cost of assessments are passed along to them; even more potentially disturbing to me is the potential negative impact such a change would have on the marketplace. I believe companies look at the offset as an incentive to do business in Oklahoma; the removal may be a signal that they reduce the writings or possibly consider other more dramatic strategies. The fourth study, and perhaps the most important to IIAO members and the insurance industry, is a House Insurance Committee study on valueadded services. I made a presentation to the committee explaining the need for our current laws concerning rebating and incentives. Some agents, in the IIAO Board’s opinion, have stretched the envelope and are going far beyond the intent and letter of the law. In fact, IIAO has enjoined a lawsuit challenging a current allowed practice. I explained to the committee that insurance rebating and incentive laws are necessary for the protection of consumers. Purchasing insurance is unlike purchasing an automobile or a refrigerator, where rebates are common practice. An insurance contract is often a 17 to 20 page (or more) legal document, a document the consumer doesn’t really understand. The consumer may purchase a policy solely because of the rebate or incentive allowed and discount the policy coverage and service provided by the professional insurance agent. I think there may a need to review our statutes and consider whether we have a way to address the value-added services currently being provided by many of our agents. However, as one of them told me recently, perhaps vagueness isn’t such a bad thing. We’ll see. I think the court may have to help us decide what we can and cannot do in this particular instance.


“I go the distance on my bike—just like my 30-year journey with J.M. Wilson. I lead a great team of managers and underwriters that work hard to help our agents be successful.”

Sandi Fritz, CIC Vice President, Underwriting and Branches—and fixture on the bike trail Connect with Sandi on LinkedIn!

Managing General Agency Since 1920 Property/Casualty t Professional Liability t Surety Commercial Transportation t Personal Lines t Premium Finance


POLICY Winter 2012



My Answers Introducing myself to all the state’s independent agents is a challenge; as a shortcut, I’m providing background information about myself, from personal philosophies and tastes, to my thoughts on legal issues agents face, to why Monty Python is the funniest group of men ever to walk the planet. Tom Cooper Pignato, Cooper, Kolker & Roberson, P.C.



completed this survey for IIABA as part of its efforts to identify and learn about each state’s E&O counsel. I decided that while IIAO members could probably identify me, many of them didn’t know much about me. To solve that problem, I decided to reproduce the survey instead of writing a column for this issue. I hope to meet more of you in person during the coming year, but here I am on paper for now. Name: Tom Cooper Firm: Pignato, Cooper, Kolker & Roberson, P.C. Address of Firm: 119 N. Robinson, Oklahoma City, OK 73102

About You

My awesome children make me smile. Monty Python makes me laugh until I hyperventilate. 6. Your heroes in real life? My maternal grandparents, who started with nothing and were self-taught (high school education); they built a telephone company from the ground up. 7. What’s your favorite book or movie? Book: “Babbit,� by Sinclair Lewis. Movie: “Monty Python’s Holy Grail� 8. Your favorite motto? Not so much a motto as a quote: “Nearly all men can stand adversity, but if you want to test a man’s character, give him power.�

Thoughts on Defending Agents

1. What is your greatest strength? Analytical ability, quick study and quick on my feet. 2. If not a lawyer, then what? Physician. Or pro golfer. 3. If not you, who would you be? Jack Nicklaus 4. Your idea of happiness? I guess I should say “Beating the pants off a plaintiff’s lawyer,� but in reality it is “The perfect balance between work and home life.� 5. What makes you smile?

1. In which states do you actively practice law? Oklahoma 2. How long have you been representing insurance agents? 12 years 3. How many E&O claims have you handled? 100 to 150 4. How would you describe the legal environment and the standard of care for agents in your state? Legally, the standard of care is very favorable to agents. Practically, (1) it is tough to get a judge to



POLICY Winter 2012


apply the law properly, and (2) plaintiffs suddenly “rememberâ€? a phantom phone call or conversation with an agent which gets them past the summary judgment stage. 5. What are the ďŹ ve most common allegations included in suits ďŹ led against agents? Aside from the general “You didn’t take care of meâ€? allegation, the top ones are failure to procure adequate limits, and, more recently, failure to follow up on additional insured issues. Also, more recently, I’ve seen a general allegation of negligence on the part of the agent when the insured has to pay signiďŹ cantly more in premiums after a GL or worker’s comp audit. 6. When an agent is sued, what is the most important thing they should remember? Do not call (1) the customer who sued you, (2) opposing counsel or (3) the subject carrier. Call your E&O carrier, only. And (even though you asked for only one thing), remember that there is no gatekeeper at the court clerk’s ofďŹ ce who can judge the merits, or lack thereof, of a lawsuit. If the plaintiff has a hungry lawyer and can afford a ďŹ ling

fee, that’s all it takes to kick off a lawsuit. 7. What are the three most common errors you see made by agents when defending agents and brokers? (1) Going to bat for a customer — after a problem with the carrier has arisen but before the agent has been accused of wrongdoing — by writing a letter to the carrier explaining how/why a claim should be paid, (2) holding himself/herself out as providing some sort of risk management service, (3) worrying about the cost of defense (especially when there’s a large deductible) instead of assisting defense counsel by focusing on depo prep and the like. 8. What are the ďŹ ve agent “best practicesâ€? an agent can do to prevent E&O claims from occurring or getting a claim resolved quickly? (1) Do not hold yourself out as a risk manager or an expert, (2) be very familiar with what is on your website and avoid statements about creating an insurance plan for the customer, knowing your customer’s business better than your customer and the like, (3) encourage, by way of Continued on Page 8

GREAT IDEAS FOR AGENCY GROWTH General & Building Trades Contractors Transportation Construction Contractors Utility Construction Contractors Land Improvement Contractors

Expanding your range of niche business is one way of increasing it. Bituminous gives agents an “in� with a wider variety of contractors. And, our programs – appealing to contractors’ specific needs – encourage valuable repeat business. Bituminous remains the stable source for specialty business. V Visit us online at w to see how you can run with our ideas.

Water Well Drilling Structural Moving Construction Materials Suppliers Forest Products On Shore Oil & Gas Extraction

Oklahoma City Branch Office 1601 NW Expressway, Suite 700 P.O. Box 12936 Oklahoma City, OK 73157-2936 (405) 767-2064 or 1-800-947-0809 FAX (405) 767-9438

POLICY Winter 2012



Continued from Page 7 transmittal letter with the insurance policy, your customer to read the policy to ensure that it is in accord with the insurance that the CUSTOMER ordered, (4) do not go to bat for a customer — at least not in writing — when the customer has a problematic claim, because the letter will likely be used against you and/or the carrier once suit is filed, (5) REPORT SUBPOENAS TO YOUR E&O CARRIER. 9. After a claim is made what are the top three things an agent can do to win a claim? Aside from promptly reporting subpoenas, addressed above, other factors include avoiding talking or communicating to third parties about the lawsuit or the claim and listening to your attorney when it comes time for your deposition (i.e., quit offering information!). 10. What are the three most dangerous things an agent or broker can do to expose herself or himself to an E&O claim? (1) Going to bat for a customer — IN WRITING —


POLICY Winter 2012

when a problem arises with a carrier, (2) failure to notify the E&O carrier after receiving a subpoena or even a friendly request for documents. 11. What is the largest E&O claims settlement that you’ve ever participated in? Significant six-figure settlement after insurer paid $4.5 million to settle a bad faith claim. Please provide some general details on the allegation, the defense, and the most critical areas of the case that influenced the outcome, and lessons learned by the agent? The allegation was the failure to add an additional insured. The agent had communicated with both the customer and the additional insured about the need to be added but dropped the ball. While that was not good, what made it much worse was the fact that, before the agent was sued, he received a subpoena for documents. He had a low-level employee gather some documents and send them on. No copy was made of what was sent as responsive to the subpoena. Later, when requests for production were being responded to, many MORE documents were produced, which caused the carrier to allege a fraudulent cover-up by the agent, which, according to the insurer, made them pay more to the insured in settlement of the bad faith claim. 12. What would you consider to be good documentation in a file? Doesn’t have to be perfect necessarily, but consistency is key — both with regard to the customer at issue and from customer to customer. You will eventually get burned if you treat some customers differently than others. Describe what characteristics and what should be included or not included in a well-documented customer file. Just the facts. No editorials by staff, especially in activity logs. And if you do have to actually describe something, do not use pronouns. It causes mass confusion later, when the attorneys are trying to interpret “he,” “she,” “them,” “they,” etc. 13. Do you recommend use of risk exposure analysis questionnaires and E&O coverage checklists? As long as that’s done in a way to keep them from being discoverable in a subsequent lawsuit, sure. 14. Generally, describe a case that was the most airtight case you ever had and why. Allegation was failure to adequately insure on a replacement cost policy. Customer alleged that the agent dictated the replacement cost at the time of procurement and that the customer simply went along


with it. At time of loss, coverage limit was too low. What did the agent do well? Took depo prep very seriously, focused and knocked it out of the park at the time of the deposition. Plaintiff’s counsel (whom I know well) said after the depo that the agent was the most prepared witness he’d ever seen. 15. Generally describe the hardest case that you didn’t think you would defend well and win. $7 million indemnity claim by an insurer after paying a bad faith verdict. Very complicated case to explain to a jury. What was the result? Defense verdict. 16. What advice would you give in preparing for and participating in a deposition? (1) Listen to your attorney, (2) you are not there to win the case (it is NOT a trial), but rather answer questions, so answer the question on the table and stop talking (translation: for one day, stop being a talkative salesperson!) 17. What advice would you give in preparing for and participating in a mediation? Manage expectations and try to be objective. 18. Are there any underlying lines of insurance coverage involved in E&O claims that you ďŹ nd more difďŹ cult to defend and why? For the most part, no. 19. Can you describe some of the emotions that your agent clients experience throughout the E&O claims process? Sure. First disbelief in being sued, then anger about being sued, then concern/worry about the process taking away from normal business. 20. On the average how much time would you estimate the E&O claims process takes away from agency staff’s daily activities? Of course the activity comes in waves, but spread out to a daily average, perhaps 30 minutes to one hour? That’s a tough question. Very case-speciďŹ c. 21. In your opinion, what should agents be looking for in their E&O carriers’ claims department? Responsiveness and genuine interest in the

claim, including the outcome. And, willingness to listen when the agent voices concern about the cost of the next E&O renewal (typically something the claims counsel can do nothing about, of course, but sometimes the agents just want/need to be heard on that issue).

,B@84:8AGF ;4I8F88A<G4??

-;4GFJ;8A G;8L64??BAHF

0(+$+, (&) "',.+'

@8E<64A"AG8EFG4G8"AFHE4A68B@C4AL ,<?I8E(4>4FH4?GL"A6 GB??9E88   94K    JJJ 4@8E<F498 6B@

POLICY Winter 2012



2012: A Class Act Weâ&#x20AC;&#x2122;re increasing our online offerings and providing the opportunity to enroll in two new designation programs: CRM, certiďŹ ed risk manager, and AIAM, associate in insurance account management. Susie Current



012 will be all about meeting member needs in the IIAO education department. We will increase our offerings to ensure we meet everyoneâ&#x20AC;&#x2122;s preferences for continuing education. We will have online courses, webinars, video webinars, and classroom courses covering general topics regarding coverage as well as speciďŹ c niche topics that you, our members, have requested. The old familiar courses are still on the calendar, too, of course, and the CIC and CISR courses are stronger than ever. These courses get content facelifts frequently. If you already have your CIC or CISR designation and are looking for something different to update your designation, we have new selections on our calendar for you. The CISR courses are called CISR William T. Hold seminars. Hold Seminar topics change each time we pres-

ent a seminar, so you can look forward to new information and discussions every time. For those with their CIC designations, we have the James K. Ruble Seminars. We hold the Ruble Seminars every year in October. In 2012, we will return to Stillwater with some of the best national speakers from around the country to bring you in-depth sessions full of information you can take back to use in your ofďŹ ce immediately. Getting your CE online has also become even more convenient and stress free. We have teamed up with other state associations across the country to bring you great speakers on timely topics in a very easy-to-use format. On the education calendar these courses are listed as video webinars. During a webinar, the screen is divided into three sections. In one section, you see the speaker in action. In another, you follow along with the PowerPoint

2LLWPUN@V\*VUULJ[LK American General American National AVIVA AXA Banner Fidelity Life Genworth ING Reliastar John Hancock Lincoln Benefit Lincoln Financial Group MetLife Nationwide Petersen International Prudential Savings Bank Life Transamerica United of Omaha West Coast Life and moreâ&#x20AC;Ś

We specialize in impaired risk underwriting, business planning coverage, estate planning strategies and other advanced planning needs. Our product portfolio includes Life Insurance, Annuities, Long Term Care Insurance, Disability Insurance and Life Settlements. Visit our website for upcoming events, quotes, impaired risk information, carrier products, ratings, underwriting guidelines and much more.

Call Taber Brokerage Services Today!

The strength of many. The power of one.


We now have more paperless solutions available with See our ad or visit our website for more details.


POLICY Winter 2012


Plan ahead so you can take advantage of our new offerings and find a seat, virtual or real, in the courses that interest you most. presentation and post questions. In the third, you take notes to email to yourself at the courseâ&#x20AC;&#x2122;s end. The reviews from participants have been great. Donâ&#x20AC;&#x2122;t forget, for a webinar or video webinar, you do not have to take a test to receive your CE. Throughout the seminar, letters pop up on the screen. Write down those letters and plug them in at the conclusion of the program to verify you were in attendance throughout the webinar. These courses are fun, easy and informative, with no travel involved. Very exciting news is that we are adding two new designation programs to our 2012 calendar. The workshop for the ďŹ rst â&#x20AC;&#x201D; CRM, certiďŹ ed risk managers â&#x20AC;&#x201D; will be in Tulsa, Feb. 8-11. The CRM designation demonstrates you are knowledgeable in all areas of managing risks, hazards and exposures. The courses provide you with an in-depth knowledge about todayâ&#x20AC;&#x2122;s highest priorities: identifying, analyzing, controlling, ďŹ nancing and administering operational risks. They also provide valuable information about political risks, catastrophic loss exposures, third-party exposures, ďŹ duciary exposures, employee injury exposures, juridical risks, legal risks and more, whether insurable or not. The skills you learn will make you more proactive and, therefore, more valuable to your organization in discovering how risks can interrupt the ďŹ&#x201A;ow of earnings and how to protect against that possibility. The second new designation is AIAM, associate in insurance account management. This program is designed to assist account representatives, account managers and others who interact with clients in the property-casualty insurance agency, including owners, receptionists, accounting practitioners, etc., obtain the needed skills to provide the very best service possible. The success of any insurance agency is built upon the solidity of the relationships between agency staff and clients/prospects. AIAM focuses on the relationship side of the equation, which is

just as important as the technical side. Unfortunately, insurance agents often overlook this aspect of the profession or take it for granted. As a result, the AIAM designation has become the nationâ&#x20AC;&#x2122;s most respected mark for those in property-casualty account service. It is the only nontechnical customer service account designation approved by IIABAâ&#x20AC;&#x2122;s Best Practices Council. Are you a person who likes online courses better than in-the-classroom experiences? We have a discount for members who take courses. Visit our education calendar for the link that gets you a deep discount on those online courses. Plan ahead so you can take advantage of our new offerings and ďŹ nd a seat, virtual or real, in the courses that interest you most and would be the most beneďŹ cial to you and your organization. We have something on the calendar for everyone. Visit for our full calendar.

Our underwriters are experienced, efficient, and accessible. Tired of waiting on hold or leaving voice mail? Not with M. J. Kelly. Weâ&#x20AC;&#x2122;re doing business with youâ&#x20AC;&#x201D;our friends and neighbors. Itâ&#x20AC;&#x2122;s personal.




ZZZPMNHOO\FRPĆ&#x2019;  POLICY Winter 2012



Community Outreach As we move into 2012, we can congratulate ourselves on our end-of-year donation to the Food For Kids Backpack Program and anticipate our many upcoming options for professional and personal growth. Ryan Bebee Cole Paine & Carlin



s we cotemplate the meaning of the holiday season, we are wise to remind ourselves of how fortunate most of us are and to remember the many people who will go without during this season. No matter the individual circumstance, let’s do our part to share and help others. Whether you had a bad year or great year relative to sales, I urge you to continue the great American tradition of sharing some of your bounty with others not as fortunate. On that note, I am very pleased and impressed to tell you that the Young Agents has raised $5,201 for the Food For Kids Backpack Program for the Regional Food Bank of Oklahoma. Eighty-one golfers participated on a glorious September day at John Conrad Golf Course in Midwest City. Thank you to all the golfers, sponsors and helpers who made the event successful. We were pleased to participate as IIAO presented a $25,000

check to the Food Bank at our tournament. A lot will be going on in the next several months. We will continue into December to give back by collecting items for the Citizen’s Caring for Children “It’s in the Bag” program. This program gives foster children a bag of necessities when they are placed. These children are generally removed from their own homes with nothing but the clothes

Future Insurance Leaders of Oklahoma will resume March 2012. The mission of the FILO program is to develop dynamic leaders for the future. on their backs and usually do not get the chance to go back to get a change of clothes, a favorite toy or stuffed animal or even a toothbrush. These bags will provide the children with items that most of us take for granted. You can see a list of needed items on our website,, if you read this before the holiday season is over. We will bring back our popular leadership program, Future Insurance Leaders of Oklahoma, in March 2012. FILO’s mission is to develop dynamic leaders for the future of Oklahoma’s independent agency system. This six-module training program provides exposure to the Big “I,” our state office, the state Capitol, the underwriting & claims processes, the department of insurance and sales. The program will give participants a better understanding of the insurance industry. This will be FILO’s fourth year, and we encourage any young agent who has yet to complete the program to sign up. You can email for additional information on how to get signed up. We encourage all Young Agents to get involved and all agency owners to send their young agents to events. Make sure to visit us online for upcoming events at youngagents. com and go to our Facebook page and LIKE us. We are located at


POLICY Winter 2012

We’re celebrating our 100th year by planning for our next 100 years. Tanya Wentzel, Des Moines Branch Marketing Manager Troy Boysen, Minneapolis Branch Commercial Underwriter Connie Jarzynka, Omaha Branch Claims Adjuster Emails and teleconferencing may be time-savers, but there is no substitute for the one-to-one relationships with insurance professionals who know you and your community. Early on, EMC Insurance Companies realized the value of being close to agents and policyholders. That value continues to pay off in products and services tailored to individual market needs. Whatever the future holds, insurance will always be a relationship business and EMC will continue to keep those relationships as close to your office as possible.

Wichita Branch: 800.223.0562 | Home Office: Des Moines, IA © Copyright Employers Mutual Casualty Company 2011 All rights reserved


A True Bargain Is membership in IIABA worth the dues? Of course. Membership provides help with issues related to agency success as well as a chance to influence policy that has an impact on your business. Vaughn Graham CIC, CPCU, AFSB




s I hear periodically from you around Oklahoma on varying national issues relating to our insurance business, in almost every one of those conversations, I hear these questions: “What is the real value of my membership in our national association” or “I wonder if my membership is worth it?” Since I have the pen for this article, I will use it to say a few things relating to those questions. The first is thank you. Thank you for the opportunity to answer your questions about our business and industry. Please don’t stop asking me your questions. I’ll add another dose of gratitude for the opportunity to represent you on a national level at IIABA. Through our work and interaction with other states’ directors I have developed a clearer view of insurance industry issues and how they affect each of us. We are

POLICY Winter 2012

probably not conscious of these multitudes of issues as we go about representing our Oklahoma customers every day. My observation is that the national dues you and I have paid to IIABA in the last several years have not increased at all. Not one cent. I am not sure I can say that about many expenses related to the professional running of our agencies, as we know IIABA membership is. When you pay your dues to IIABA, what do you get? Again, my observations are that we get the attention of agent advocacy we couldn’t get anywhere else, advocacy that fosters and protects Trusted Choice independent insurance agents’ ability to serve our clients and to offer customized policies for their needs. This advocacy also provides a watchful eye to alert us to threats that might challenge our ability to remain independent business owners. Along with strong advocacy, we get access to a variety of things many agents find valuable in their daily agency


IIABA is an association of all independent insurance agents, from the smallest to the largest. We have to serve them all at the same time.

is not dedicated to the service of only small agencies nor is it dedicated to the service of only large agencies. We are changing and adapting to represent all independent insurance agents in today’s dynamic business environment. The value of being a dues-paying member of IIABA is like beauty; it is in the eye of the beholder. The agents who take advantage of and use more of what IIABA has to offer will more readily recognize the value of their memberships and gladly pay their dues this year and the next. I truly hope you are one of them. Candace and I thank you for the opportunity to represent each of you and Oklahoma as state director at Independent Insurance Agents and Brokers meetings. If you have comments or questions about issues or about how your association is working on your behalf, please call me at 918.293.7191 or email me at to let me know what is on your mind.

operations. Those include access to the Agents Council for Technology, which makes available to you practical technology and business process educational tools. You can access Virtual University, the leading technical insurance and agency management information source. Here, you have access to those who know a lot about insurance in the “Ask an Expert” option. Also available to you is access to the Young Agents Committee, which provides leadership training to Oklahoma’s younger agency producers and timely, accurate insurance industry information in Independent Agent magazine and the electronically delivered Insurance News & Views. In our current industry climate, many agents are glad they have available to them IIABA’s national E&O programs options and, if they choose, InsurBanc, an independent insurance agents’ bank that understands your business and offers a full range of banking products to help your agency grow. I would point out to you that these valuable items available to you by virtue of your IIABA membership are really only a few of all the tools and opportunities available. To get a better idea of the professional bounty available to you, visit, which is like a giant table of contents to those areas of interest to you. The question of “I wonder if my membership is worth it?” comes as often from the largest of Oklahoma agencies as it does from the smallest. As Oklahoma’s director to IIABA, I have participated in many ongoing discussions whose central question is, “Whose needs do we try to serve first?” My answer is “IIABA is an association of all independent insurance agents, from the smallest to the largest. We have to serve them all at the same time.” IIABA POLICY Winter 2012



An honor in another field

Usually when we write about those being honored, we’re talking about professional achievements in the field of insurance. Not this time, though: This time, we’re talking about the field of battle. Director of Education Susie Current’s husband, Gunnery Sergeant Colton Current, United States Marine Corps, has received the Navy and Marine Corps Commendation Medal from the Department of the Navy. Below is the description of why Current earned this deserved award: “For meritorious achievement while serving as battery field Artillery Chief, 2D Platoon, Rocket Battery K, 1st Battalion, 12th Marines, 2D Marine Division (Forward) from January 2011 to July 2011 in support of Operation Enduring Freedom. Staff Sergeant Current oversaw the execution of six 70-kilometer tactical movements and ensured the readiness of a rocket artillery platoon throughout a major named operation. Staff Sergeant Current’s determination, dedication, supervision, and leadership enabled the platoon to successfully execute 13 rocket artillery fire missions in a 10-day period with devastating effects leading to the success of the operation. Quickly thrust into the role of battery field artillery chief, a billet two grades senior to himself, he quickly grasped the enormity of the duties and excelled in the new role by completing 8014 Military Occupancy Specialty Certification for over 50 Marines and mentoring the Marines battery-wide, ensuring continuous readiness.

ABOVE: Gunnery Sergeant Colton Current, USMC, receives the Navy and Marine Corps Commendation Medal; LEFT: Susie, Makayla and Colton Current

Staff Sergeant Current’s initiative, perseverance and total dedication to duty reflected credit upon him and upheld the highest traditions of the Marine Corps and the United States Naval Service.” We at IIAO salute this brave man providing service of the highest order to his country.

The IIAO Board of Directors took a dinner cruise on the Oklahoma River during its annual planning meeting Aug. 18-19. After working on the yearly, three-year and five-year plans for the association, board members took the two-hour cruise to relax and enjoy the sights.


Each year, IIAO offers ffers three $1,000 scholarolarships to childrenn of agents or IIAO employployees going back to school. hool. Here’s a thank-you letter etter we received from thee son of Suzanne Cerneyy of Cornerstone Insurance ance in Kingfisher. Wiinter


Oklahoma agent advances on national Big “I” leadership team

The Independent Insurance Agents & Brokers of America has announced that Robert “Bobby” Bramlett was installed as chairman-elect of the IIABA’s executive committee at the association’s 2011 Fall Leadership Conference in Minneapolis, Minn. Bramlett is president and CEO of the Bramlett Agency in Ardmore, Okla. “Bobby Bramlett has been instrumental in providing valuable insight to our agent and broker members on a myriad of issues, especially during the recent health care debate,” says Robert Rusbuldt, Big “I” president and CEO. “The Big ‘I’ is pleased to announce that he will now serve as the executive committee chairman-elect.” Bramlett began his insurance career with The Bramlett Agency in 1975 and has served as its president and CEO since 1983. He purchased the agency, founded in 1948, from his parents, Jim and Janie Bramlett. Bramlett has long been active at the state and national association levels. He is past president of Independent Insurance Agents of Oklahoma and served as a director on IIABA’s national board. In 2008, Bramlett received the IIABA’s highest government affairs award, “The Sydney O. Smith National Legislative Award.” He also was honored with IIAO’s highest award, “The Eagle of Excellence Award,” in 2009. In his community, Bramlett serves as a director of First National Bank and Trust Company and trustee of The Glen Foundation. He is also a trustee of St. John’s Northwestern Military Academy in Delafield, Wis., from which he is a graduate. He earned his bachelor of business administration degree from the University of Oklahoma. Bobby and his wife, Nanette, are proud parents of son, Jake, who is now a producer in the agency, parents-in-law to Jake’s wife, Jennifer, and grandparents to their son, Bryce.

Safeco Insurance names Paul Jones regional manager Safeco Insurance recently announced Paul Jones II as the new regional manager for Oklahoma, Louisiana and Arkansas. Jones comes to Oklahoma from Texas, where he served as Safeco’s territory manager for North Dallas. “Paul has shown great leadership managing Safeco’s production and profitability,” says Rich Meuret, vice president and regional general manager, distribution. “His track record and experience will certainly serve him well in his new role. He has demonstrated an ability to build deep partnerships with Safeco’s agency force and play a critical role in driving success in the marketplace.” Before joining Safeco, Jones was both an independent agent and an underwriting manager for Republic Insurance, responsible for Oklahoma, Louisiana and Texas. He holds a bachelor’s degree from Jackson State University in marketing. In business since 1923 and based in Seattle, Safeco sells insurance to drivers and homeowners through a network of independent agents and

brokers in eight regions throughout the United States. Safeco is part of Liberty Mutual Agency Corporation, a strategic business unit of Liberty Mutual Group, consisting of property and casualty and specialty insurance carriers that distribute their products and services primarily through independent agents and brokers. Liberty Mutual Group ranks 82nd on the Fortune 100 list of the largest U.S. corporations based on 2010 revenue. The company has financial strength ratings of A (Excellent) from the A.M. Best Company, A2 (Good) from Moody’s Investors Service, and A- (Strong) from Standard & Poor’s. For more information: POLICY

Winter 2012



The Young Agentsâ&#x20AC;&#x2122;s work day at the Regional Food Bank of Oklahoma in November led to assembling enough bags of food to fill 1,872 backpacks for the Food For Kids Backpack Program, which provides backpacks of food to needy children so they will have food over the weekends. Each bag was the equivalent of 2.5 meals for one child, or 4,689 meals for Oklahoma children in need. Sixteen members of YA, four staff members and eight board members gave their time to this important project.


Community Service


IAO has endorsed the Food for Kids Backpack Program, which provides nutrition for low-income children on the weekends. The program reaches 546 school districts across the state and helps over 17,000 children. Just as our membership reaches every corner of the state, so does the need for helping provide food for children. The cost to provide a backpack of food for the school year is $200. The program helps children who would otherwise have little or nothing to eat between school lunch on Friday and school

breakfast on Monday. IIAO has a goal of seeing every member agency and company adopt a child. Each quarter IIAO will present a check to the Regional Food Bank of Oklahoma on behalf of our members. The money you contribute will be distributed to a needy child in your county. Our initial goal is $25,000, which we met at the end of this year, and our long term goal is $100,000. Thank you in advance for your support. The generosity of independent agents in giving back to their communities is something of which we all should be proud.

Contributors: Thank you, one and all Advantange Insurance Group Belynda Tayar Insurance Bill Schuenemann The Bramlett Agency Cole Paine & Carlin Dan Ramsey Dawkins Insurance Agency Donna Baker Eitzen Agency EMC Insurance Company

IIAO Eagle Agency J.T. Neal Insurance Janet Rogers Jeff Campbell Kelly Smith Magill Insurance Agency Malinda Day Mel Holt Nease Insurance Agency One General Agency

Tom Caraway Somers Insurance Agency Susan Titus Susie Current Thad Leonard Universal Insurance Agency Vaughn Graham Wilcox & McGrath Insurance Young Agents Golf

To adopt a child, send your contribution payable to the IIAO Insurance Foundation to PO Box 13490 Oklahoma City, OK 73113 This is a 501(c)3 organization, so your contributions will be fully tax deductible.


POLICY Winter 2012

OkPAC Contributors OkPAC is IIAO’s political action committee. It provides financial support for state elected officials who will provide support for or have shown support of issues affecting the insurance industry and to those who share our business philosophies. Only individuals or partnerships can make contributions to OkPAC. Under Oklahoma law, OkPAC can accept no contributions from corporations.

Kristi Abdo Donna Baker Fred Barker John Battaliou Ryan Bebee Brad Berrong Bob Bramlett Todd Brandon Travis Brown Tom Caraway Mark Carlin Michael Cole Scott Cornelius Terry Cupp Gerald Dawkins Malinda Day

Jed Dillingham David Eaton Phil Eitzen Stefanie Fields Ben Gorrell Vaughn Graham Vaughn Graham, Jr Raymond Hale III John Harper Rich Haverfield Mel Holt Erin Howell Jesse Hyde Jimmy Irwin Denise Johnson Kasey Jones

Bruce Jordan Theresa Kamler Thad Leonard Bill Livermon Michael Loftis Mark Long Bruce Magill Wesley R Magill Pat Mandeville Ed McGrath Cody McNeill Jonathan Molder Cindy Munden Larry Neal Heidi Nease Daniel O’Neil

Allen Paine Chris Paine Justin Peavler Rob Piearcy Steve Poleman Dan Ramsey Kathy Reeser Lyra Roberts Kathy Rose Michael Ross Traci Rowe Karl Seizinger Scott Selman Clark Smith Kelly Smith Daniel Somers

Mike Somers Adriane Stachmus Dick Teubner Ryan Teubner Susan Titus Chris Torres Brad Warwick Bill Wetzel Travis Wiedemann Trent Willis Steve Wilson Jenny Wood Bailey Word

InsurPac Contributors InsurPac is IIABA’s political action committee. It pools the voluntary and individual financial contributions of thousands of independent insurance agents to help elect candidates to Congress who share IIABA’s business philosophies. InsurPac is the largest property-casualty insurance industry PAC in the country.

Kristi Abdo Donna Baker Neil Barfield Ryan Bebee Jake Bramlett Nanette Bramlett Robert Bramlett Travis Brown Kent Carlin Mark Carlin Jeff Clymer Earnie Cornelius Jim Couch Bill Cox Terry Cupp Gerald Dawkins

Jed Dillingham Tim Driskill David Eaton Phil Eitzen Ben Gorrell Vaughn Graham Vaughn Graham, Jr. Ray Hale John Harper Charles Harris Rich Haverfield Tim Hill Erin Howell Denise Johnson Kasey Jones Bruce Jordan

Thad Leonard Jill Lester Bill Livermon Mike Loftis Mark Long Bruce Magill Pat Mandeville Leslie McGahey Ed McGrath Cody McNeill Kelly Miller Jonathan Molder Jon Moon Duane Murray Larry Neal Heidi Nease

Jerry Oden Daniel O’Neil Chris Paine Allen Paine Steve Poleman Dan Ramsey Lyra Roberts Kathy Rose Will Rosebure Mike Ross Traci Rowe Jane Seals Karl Seizinger Scott Selman Clark Smith Dabney Smith

Kelly Smith Daniel Somers Mike Somers Joe Strunk Belynda Tayar Dick Teubner Susan Titus Brad Warwick Bill Wetzel Travis Wiedemann Trent Willis Jenny Wood Bailey Word Bernie Zalaznik

Is your name not on the list? Use the contributors statement on the back of this page to donate. POLICY Winter 2012


Insure Your Future! InsurPac





OkPac Contribution 

Â&#x2030;Yes, I want to INSURE MY FUTURE with a Personal Contribution to OkPac! &KHFNFRQWULEXWLRQEHORZ  


Â&#x2030;0LOOHQLXP Â&#x2030;3LRQHHU

Â&#x2030;3ODWLQXP Â&#x2030;)RXQGHUV

Â&#x2030;&HQWHQQLDO Â&#x2030;<RXQJ$JHQW

Â&#x2030;*ROG Â&#x2030;2WKHUBBBBBBB

InsurPac Contribution 

Â&#x2030;Yes, I want to INSURE MY FUTURE with a Personal Contribution to InsurPac! &KHFNFRQWULEXWLRQEHORZ  


Â&#x2030;0LOOHQLXP Â&#x2030;3LRQHHU

Â&#x2030;3ODWLQXP Â&#x2030;)RXQGHUV

Â&#x2030;&HQWHQQLDO Â&#x2030;<RXQJ$JHQW

Â&#x2030;*ROG Â&#x2030;2WKHUBBBBBBB



Declaration: The contribution listed above was freely and voluntarily given by me from my personal property. I have not, directly or indirectly, been compensated or reimbursed for the contribution listed above. 



Payment Information

(All contributions must be made by PERSONAL check or PERSONAL credit card.)





Credit card information:Â&#x2030;0DVWHU&DUGÂ&#x2030;9LVDÂ&#x2030;$PHULFDQ([SUHVV

&UHGLW&DUG1XPEHUBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB ([SLUDWLRQ'DWH BBBBBBBBBBBB 1DPHDVLWDSSHDUVRQFDUGBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBBB Contributions or gifts to InsurPac and OkPac are not deductible as charitable contributions for purposes of federal income tax. Federal and State law require us to use our best efforts to collect and report the name, mailing address, occupation and name of employer for each individual. Your contribution should be considered strictly voluntary. Any corporate contributions are prohibited.


POLICY Winter 2012


SWETT&CRAWFORD OKLAHOMA RETAIL BROKERS — DON’T SETTLE FOR SECOND STRING. GO WITH THE PRO’S PRO. Capacity and capability. Access and expertise. Passion and performance. Just a few of the qualities that put Swett & Crawford in a league of our own. Not to mention almost a century of experience and a global network of risk experts. It’s no wonder we’ve been named Best Wholesale Broker for six consecutive years by the readers of Business Insurance. So for all your specialized risks—every class, size and place on earth—go with a proven winner. Go to

For more information about what Swett can do for you, please contact: Jim Bishop, Senior Vice President/Sales Leader : – 214.672.2753 Jessica Lovinggood, Broker : – 405.312.3338

©2011 The Swett & Crawford Group, Inc.

Globally, Everything We Know Goes Into Everything We Do®

The 2011 Class of CIC, CISR, CRM and CSRM conferees

And the

Conferees Are...


oining a growing group of well prepared and committed insurance professionals, 81 individuals added professional designations to their names at a Nov. 2 Conferment Ceremony. Held at the Oklahoma History Center, the event saw 32 earn the designation of certified insurance counselor, 42 of certified insurance service representative, six of certified risk manager and one of certified school risk manager. Special recognition went to Annissa DeJarnett, with Rooney Insurance Agency in Tulsa, when she was named 2011 Oklahoma CSR of the Year, and to Michael Messner, CSRM, CFPS, CSP, with Union Standard Insurance Group in Oklahoma City, who became the first to earn a CSRM designation in the state. “One of IIAO’s most rewarding experiences for me each year is the awarding of the CIC, CISR and CRM designations to our members,” IIAO President/CEO Dan Ramsey says. “Having completed my CIC designation in 1979 (now that is a long time ago), I recognize, first hand, the challenging nature of these programs.  It is a tribute to the designees but also an acknowledgement that the owners


POLICY Winter 2012

and managers of these agencies and companies recognize the value these programs bring to their organizations. These designations signify a hallmark of achievement.”    The CIC program began in Oklahoma in 1977. Currently, 1,380 Oklahomans participate in the program, and 585 in the state have earned their CIC designation. To earn the right to put CIC after a name requires completion of a rigorous insurance education program the Society of Certified Insurance Counselors sponsors. Currently, more than 29,500 agents and insurance professionals throughout the country have received the CIC designation. The CISR program began in Oklahoma in 1988. Oklahoma has 2,008 participants in the program and 745 who have earned their designations. To earn the designation, individuals complete five, one-day courses covering all areas of insurance risks and exposures, followed by extensive examinations. The CISR is distinguished from other programs of its kind by an annual continuing education requirement, which ensures that designees stay current on the important policy changes and trends within the industry. The Society of CISR, a not-for-profit organization, awards the designation. This year, the Society


Scenes form the program, clockwise from top left: 2011 Oklahoma CSR of the Year award winner Anissa DeJarnett, CIC, of the Rooney Agency in Tulsa with her boss, George Kolczun, CPCU, ARM, AAI. Scott Naugle, CIC, AAI, board member of the National Alliance Board of Governors, presented the 2011 Oklahoma CSR of the Year Award to DeJarnett. IIAO Chairman Jed Dillingham served as emcee for the event, congratulating the CIC, CISR, CRM and CSRM conferees. Rick Farmer, assistant commissioner of government affairs, public policy and communication for the Oklahoma Insurance Department, updates the crowd on happenings at the department.

of CISR celebrates its 21st anniversary, with more than 77,500 participants in the program and more than 26,000 individuals holding the CISR designation. The CRM program began in 1997. Oklahoma has 200 participants in the program and 45 who have earned the designation. Certified Risk Managers International, a nonprofit organization recognized as a significant source of insurance and risk management education, awards the designation. To attain the CRM designation, individuals complete five courses in the program and pass extensive examinations in each of the following subject areas: principles of risk management, analysis of risk, control of risk, financing of risk, and practice of risk management. The CRM program features practical, hands-on course content, designed to be applied immediately to the risk manager’s daily work. The CSRM program began in 2005. Eight from Oklahoma are in the CSRM program, and the state has one who has earned a CSRM. All three societies are members of The National Alliance for Insurance Education & Research, the nation’s preeminent provider of insurance and risk management education. The National Alliance conducts more than 2,500 programs annually, throughout all 50 states and Puerto Rico. POLICY Winter 2012


Independent Insurance Agents of Oklahoma


Partners Diamond


Independent Insurance Agents Association of OKC

Platinum Gold Taber Brokerage Services Patriot National Underwriters Inc./Old Glory Insurance Company

EMC Insurance Companies Columbia Insurance Group Midlands Management Corporation Chubb Group of Insurance Companies Premium Financing Specialists National American Insurance Company

M.J. Kelly Company Specialty Insurance Managers of Oklahoma Cornerstone National Insurance Company Farmers Alliance Insurance Companies AMERISAFE Risk Placement Services, Inc. CNA Insurance



Chartis Insurance Safeco Insurance Republic Group of Insurance Companies Union Mutual Insurance Company Hartford Insurance Group Great American Insurance Company State Auto Insurance Companies Equity Insurance Company Swett & Crawford of Texas Westphalen Insurance Services Acton Inc. Graham-Rogers Triangle Insurance Company First Guaranty Insurance Company

The Pride of Oklahoma No Oklahomans have sat in the White House, but when it comes to national leadership in insurance, the Sooner State is a go-to locale. As another national president from Oklahoma prepares himself to take office, we look at the three men who have been chosen to lead. POLICY Winter 2012


Courtney Wood at a planning meeting


he Independent Insurance Agents & Brokers of America, founded in 1896 as the National Local Association of Fire Insurance Agents, is the national organization under which all 50 state associations, IIAO included, function. With the expansion of property-casualty business and coverages, the organization’s name was changed to the National Association of Insurance Agents in 1913. To emphasize its members’ ability to work with a variety of insurance companies, the organization became the Independent Insurance Agents of America in 1975. The Association’s name was changed in 2002 to the Independent Insurance Agents & Brokers of America to reflect the diversity of its membership, which includes both independent insurance agents and insurance brokers. 26

POLICY Winter 2012

Members from the 50 state associations serve as officers at the national level after going through a national nomination and election process. Bobby Bramlett, The Bramlett Agency, Ardmore, will serve as IIABA’s 20122013 national chairman, Oklahoma’s third insurance professional to do so. The first two were Dick Teubner, who served in 1982-1983, and Courtney Wood, who served in 1993-1994. When Teubner and Wood served, the title was national president. IIAO is proud of each of these individuals not only for their service to the state association but for taking recognition of the superb group of insurance professionals found in Oklahoma to the national level. Throughout these pages of pictures and information about the three men who have earned — and are in the process of earning — us such positive recognition are comments and memories from colleagues who have watched — and are watching — their impact.

Bob Rusbuldt CEO, IIABA

IIAO has two Big “I” legends with a third in the making. Dick and Courtney are both Woodworth Memorial Award recipients, the highest honor an independent insurance agent can receive in the United States.  Dick still attends the Woodworth Luncheon and Past Presidents/Chairs Dinner every year.  These three Okies are the epitome of Big “I” independent insurance agents. Oklahoma has a long tradition of providing excellent national leadership for the Big “I,” and Bobby is continuing that tradition.

Jeff Yates

Executive Director of the Agents Council for Technology Former CEO, IIABA

Both Dick & Courtney were excellent presidents for the IIABA, and we were very fortunate to have their leadership over many years as key players on important committees, culminating in their years as president. Dick was a mainstay of our Finance Committee for many years and was president during the time when one of our major independent agency carriers opened up a direct distribution arm through a major association.  He expressed the independent agents’ strong concerns with the program and urged the carrier to open up the program to independent agents as well, so that they could access it for their clients.  Interestingly, the carrier eventually did open the program up to its independent agents more than a decade later. It is a testament to Dick’s calm, steady leadership that he was able to reflect the agents’ strong objections to the program, while also maintaining the association’s good relationship with the carrier.  Dick’s monthly presidential columns in the Independent Agent magazine were eagerly awaited by the agents and still set the standard for others to follow.  Dick would come into IIABA’s New York office (where we were then located) and bang out the columns himself on the electric typewriter outside my office.  The columns provide an excellent prism as to how independent agents view their role in the marketplace and how they seek to learn their clients’ businesses and become their risk manager.  Each year that Dick would attend IIABA’s Legislative Conference, he would say goodbye to his wife, Barbara, and his wife would say: “Say hello to the president for me.”  Well, Dick got the chance to do just that in 1984 when he introduced President Reagan at the Legislative Conference.  This was the first time we had a sitting U.S. president speak at our Legislative Conference, which was an indication of Continued on Page 28 POLICY Winter 2012


Dick Teubner doesn’t quite know what to say!

Continued from Page 27 the growing clout of the independent agents in Washington. Dick also delivered the best summation I have ever heard about what it means to move from the position of IIABA president to IIABA past president, when the phone abruptly stops ringing: He said, “Now that I know all of the answers, nobody asks me the questions.” Courtney led IIABA’s Technical Conference Committee during IIABA’s golden age of technical insurance coverage advocacy when ISO, NCCI and AAIS exerted a greater role in determining the provisions in insurance forms. Courtney represented the independent agents’ interests in fighting to secure experience modifications from NCCI on a more timely basis and in keeping defense costs outside of the coverage limits on general liability policies.   Courtney also brought IIABA’s company visits initiative to new heights by visiting more than 40 companies during his year as president.  This allowed the association to reach out to many smaller carriers for the first time, and today many of these smaller carriers are some of IIABA’s best supporters.  Courtney also played an instrumental role in putting the association on a stronger financial footing over the long term, by insisting that IIABA renegotiate its mortgage on its headquarters office building in Alexandria, Va., to change it from a fixed term with a balloon at the end to one that would be paid off by a certain time. That mortgage has now been paid off, and IIABA owns the building free and clear.

Vaughn Graham CPCU, AFSB, CIC Oklahoma Director, Independent Insurance Agents and Brokers of America President Rich & Cartmill, Inc.

POLICY Winter 2012


Back in the day, when I had a different shade of hair color and by virtue of the fact I was the current Young Agents chairman, I was also its representative to IIAO’s Board of Directors. Charlie Simone was our association executive and was making board assignments for teams to make calls on agents who were not yet members of IIAO. As a dutiful young agent, I showed up at the association offices on the appointed hour, to learn that I had been assigned to Courtney Wood and Dick Teubner to make calls with. At the time, Courtney was Oklahoma’s state director, and Dick was only a couple of years removed from his year as national president. Driving to our first call, I sat in the back seat wondering what in the world I could talk to these two about and be worthwhile. I decided I would do more listening than talking. A good thing too, given that as I recall, Dick and Courtney did so much talking that I was not needed for any contribution to the conversation. “This is going to be easy,” I thought. We walked into the office of the unsuspecting agent

Bob Bramlett and Bill Hofmann, former IIABA chairman, at an IIAO conference

On a slightly less serious note, but to make the sincere point that I saw early signs of Bobby Bramlett’s leadership skills many years ago during our first business meeting session at the site of often educational and always instructional Young Agents Conventions, Shangri La Resort on Grand Lake. Our YAC speaker was a newly minted, agency management and operations consultant, just beginning his business in Ft. Myers, Fla., Roger Sitkins. Bobby let the YAC planning committee know he could get this nationally renowned, hard-charging, dynamic speaker to address our meeting and at a price we could afford, which was not much. That Friday night Roger joined the YAs in having a rollicking good time. When 8:30 a.m. Saturday rolled around, we had neither a fired-up audience of young agents nor a fired-up Roger Sitkins. Bobby recognized the room’s dynamics had to change, and, as any good leader would do, he improvised. Roger has told many other insurance gatherings over the years that Oklahoma Young Agents Conference was the only one ever in which he had to share the spotlight with a cooler of adult beverages, which was what Bobby had had the good sense to locate and bring to the front of the room for Roger and the YAs to draw upon in their hour of need. No surprise that the same Bobby will be Oklahoma’s third IIABA chairman. He has the stuff true leaders are made of. Continued on Page 30

and sat down with him. I expected Courtney and Dick to double team the agent with facts and information on the value of the agency joining IIAO. To my surprise, silence; not a word was said by anyone for what seemed like a day and a half. Dick, Courtney and the agent just looked at me. Just before I began to hyperventilate, Dick asked me some softball question about IIAO, which got me talking, with one question and answer leading to another. We left the agency with an association membership application and a check for dues. Walking back to the car and not wanting to press my luck, I asked Dick and Courtney, how many more calls were we going to make, not really wanting to hear the answer: ‘Only five,’ one of them said. While either or both of these legends could have had some real fun that day with a young agent making IIAO membership drive calls, neither did. They shared the benefit of their professional experience and knowledge with me that day and my take away was I hope I can do the same for a young agent someday and pay it forward. Having the benefit of time, I have had the honor and good fortune to know and work with Courtney, who was Oklahoma’s second president of the Independent Insurance Agents of America. Dick was Oklahoma’s first president to IIABA and as special as he is to me from a professional, business point of view, I am most pleased and proud to call Dick my friend. Thank you, both, for the leadership you have to given to Oklahoma and provided from Oklahoma

POLICY Winter 2012


Courtney Wood, Dan Ramsey and Gary Wright at an IIABA National Legislative Conference

Continued from Page 29

Dan Ramsey CIC CEO/President, IIAO

It reflects the quality of individuals and knowledgeable insurance professionals Oklahoma has that by 2012 we will have sent three men like Dick, Courtney and Bobby to the top national spot in IIABA. I first observed Dick Teubner in 1976, when I was a young pup and saw him leading the first IIAO meeting I ever attended. He was very, very well spoken and very knowledgeable about not just the broad picture but also the nuts and bolts of how the system and business of insurance companies and agencies worked. He had a passion for and a firm, solid foundation and belief in the importance of insurance as well as a commitment to professional excellence. Courtney Wood knew so much that talking to him was like getting a drink of water out of a fire hydrant. If any-


POLICY Winter 2012

body had an insurance question about anything, he had the answer. And he had the most amazing vocabulary: He introduced me to the word “bifurcate.” I didn’t know anything about bifurcation until I talked to Courtney. He just worked it in a sentence one day; I’m thinking “Bifurcate? I don’t know what he’s talking about!” Courtney was brilliant, and his ability to communicate was superb. He was also the most tenacious man I’ve ever met; he had a purpose. Since his stroke he’s had his most tenacious purpose ever: to get this word out to help prevent strokes. He became a tiger about stroke awareness. Bob Bramlett is a visionary. He knows how to work a room, how to get along with and work with people of all stripes. He, like Courtney, is very, very tenacious and like both Dick and Courtney, very, very committed. He was the chair of the search committee that hired me, and he would not take “No” for an answer. I told Bob I don’t know how many times, “No. I’m happy in the Legislature,” but he just would not accept that. He believed that I would be good for IIAO, and IIAO would be good for me. He was right, which I know since he finally wore me down and I said “Yes.” Our friendship goes back 30+ years, beginning as members of the Young Agents Committee. Dick is retired but still active in consulting with Rich & Cartmill. Courtney has challenges communicating since

An unknown partygoer, John Martin, Courtney Wood, Bruce Schutte and Bill Dobbs share some IIAO fellowship. Dan Ramsey chats in the background.

around, we are positioned to regain some market share we’ve lost, especially over personal lines the last few years. Bob is a guy who can bring people together. The governance of the national association is very difficult because you have 50 states represented and the District of Columbia, and there’s constant turmoil. You might go to a meeting in Washington in April with one set of directors. Then you go back to a meeting in the fall, and you’ve got maybe a third new members again. They all must be brought up to speed and brought together, and then you may go to a new meeting in January and there’s another new third there. So it’s a governance challenge, but Bob will be able to work with different groups and different interests to bring people together. All three of them have a tremendous work ethic that I think is a model. All three of them had a goal, and, I think, envisioned that they were going to be in the top leadership position. Then they figured out a way to get there. All three of them took the national election through hard work and building relationships. I think that’s what our three national leaders say about what Oklahoma is. We can get along with people whether on the East Coast, the West Coast or in between. We are negotiators. These men are all three capable of achieving a greater goal for the greater good: They represent us well.

his stroke, but he’s still very much aware of and connected to the world around him, including insurance. He has just moved to a retirement center. And I want to say that a fourth Oklahoman, Bob McKown, was just a step away from the position of national chairman. Because of political maneuvering he did not take the prize, but he would have been a superb leader, as well. He was very knowledgeable, very thorough. Dick was at a national convention, which President Reagan was going to address. Protocol required a specific way to introduce the president, “Ladies and gentlemen, the President of the United States,” or something like that. Someone in power said, “You know, we will be glad to do that, to make sure it’s done right” and Dick said, “No you’re not, I’m going to introduce the president. This is my opportunity to introduce the president of the United States, I’m going to do it!” So he did and he did it, obviously, perfectly. Bobby is going to bring ideas, lots of ideas to the table when he assumes the national leadership. He is full of ideas. I think the challenge is to harness some of those ideas and to maybe pare them back to what can be accomplished. He is a visionary, very much a visionary. We are in an opportune time with the Trusted Choice brand and the Consumer Agent Portal. Bob will lead the effort to make sure that when the economy comes

POLICY Winter 2012



Big “I” study suggests industry may be on road to recovery This year’s annual Best Practices Study shows a reversal after several years of not-so-good news: profits have held constant and organic growth has improved. This is heartening as we head into 2012. Independent Insurance Agents & Brokers of America


he Independent Insurance Agents & Brokers of America announced today the release of its 2011 Best Practices Study finding that organic growth improved, albeit modestly, and profitability held constant across most of the study’s six revenue groups.  “The results of this year’s Best Practices Study indicate good news after several years of negative growth, shrinking profit margins and declining agency values,” says Madelyn Flannagan, Big “I” vice president of agent development, research and education. “Most study participants benefitted from the growth strategies deployed over the last couple of years when the recession suddenly amplified the pressure of a prolonged soft market.” Other findings from the 2011 Best Practices Study include the following: Big Picture — Most study participants benefitted from the growth strategies deployed over the last couple of years when the recession suddenly amplified the pressure of a prolonged soft market. A strong focus on total account development, increased advertising/marketing activities and producer hiring/development/management strategies gave most agencies a competitive advantage when the economy began to rebound in 2010 and stopped or reversed the revenue decline that first became apparent in the 2006 study. Generally, the smaller revenue-sized agencies reported flat growth, while the larger commercial agencies reported improvement over the 2010 study results.  Organic growth for the $10-25 million group increased from 0.7 percent to 2.4 percent and the more than $25 million group increased from 1.2 percent to 3.3 percent.  Cutting the fat — As with revenue growth, the agencies benefitted from steps taken over the last couple of years to control and lower expenses. Profitability remained flat in all study groups with an average Pro Forma EBITDA margin of 26.2 percent for agencies with revenue less than $5 million and 20.0 percent for agencies with revenue above $5 million. Margins had decreased continuously since 2006 when they were at their highest in the study’s then 13 year history.     Rule of 20 — In recent years, the Rule of 20 outcomes, a quick measure for determining whether an agency is creating value for its shareholders, have



Winter 2012

The results of this year’s study indicate good news after several years of negative growth. fallen significantly short of the desired score of 20 for most of the study groups. The 2011 results leveled off at an average score of 13.2 for the less than $5 million agencies and increased to an average 11.7 for the more than $5 million agencies. Revenue per Employee — This industry standard productivity measure also remained flat, with the average for the less than $5 million agencies just over $150,000 and the more than $5 million at $172,000. These averages are down only slightly from the revenue per employee levels reached before the start of the soft market. The resulting drop in revenue forced agencies to concentrate on better using new and existing technology to support sales and marketing efforts and to contain costs. As a result, productivity remained stable. Personal lines — Personal lines once again had positive growth rates (an average of 3.1 percent for the less than $5 million and 3.8 percent for the more than $5 million). However, group medical grew more last year with an average of 3.0 percent for the “less than $5 million” and a strong 4.2 percent for the “more than $5 million,” up more than 3 percent from last year. Commercial lines — Commercial lines continued to see negative growth but far less negative than last year. Many agents said they are starting to see some commercial insurance rates hold at their current levels. This could indicate that the 2012 results are bound to improve providing the economy doesn’t stall again. “While the 2011 results are not stellar, they do indicate that Best Practices agencies are rebounding from the devastating effects of the recession and soft market, and are poised for new growth and stronger profitability, the key components of agency value,” says Robert Rusbuldt, Big


“I” president and CEO. “Overall, we are pleased, but not surprised, that the independent insurance agency system remains strong and stable.”    Every three years, the Big “I” collaborates with Reagan Consulting to select “Best Practices” firms throughout the nation for outstanding management and financial achievement in six revenue categories (less than $1,250,000; $1,250,000 to $2,500,000; $2,500,000 to $5,000,000; $5,000,000 to $10,000,000; $10,000,000 to $25,000,000; and more than $25,000,000). Either a Big “I”-affiliated state association or an insurance company nominates an agency and it qualifies based on operational excellence. Financial and benchmarking information for the participating agencies are also reviewed and updated. The Big “I” initiated the Best Practices in 1993 as the foundation for efforts to improve agency performance and create higher valued agencies. The survey and study of leading independent insurance agencies documents the business practices of these “best” agencies and urges others to adopt similar practices.           

Twelve insurance companies and four industry vendors provide financial support for the research and development of the Best Practices study: Applied Systems, Addis Intellectual Capital, Central Insurance Cos., Chubb, EMC Insurance Companies, Encompass Insurance, Erie Insurance, Great American Insurance Group, The Hanover Insurance Group, Harleysville Insurance, Imperial PFS, InsurBanc, Kemper Preferred, Liberty Mutual Agency Corporation, MetLife Auto & Home and Zurich North America. Founded in 1896, IIABA is the nation’s oldest and largest national association of independent insurance agents and brokers, representing a network of more than 300,000 agents, brokers and their employees nationally. Its members are businesses that offer customers a choice of policies from a variety of insurance companies. Independent agents and brokers offer all lines of insurance—property, casualty, life and health—as well as employee benefit plans and retirement products. Web address:


Winter 2012



New survey finds bad economy has many considering changes to insurance policies What may seem like discouraging news may really be an opportunity for agents to discuss the value of a personal umbrella policy as insureds consider cutting insurance corners during difficult times. Independent Insurance Agents & Brokers of America




any Americans are facing financial struggles and considering making changes to their insurance policies, according to a new national survey of homeowners by Trusted Choice® and the Independent Insurance Agents & Brokers of America. Almost 24 percent of those surveyed, representing about 39 million homeowners, say they have made changes to their insurance coverage because of the troubled economy, leaving them vulnerable to serious financial loss. “In tough economic times, people look for ways to trim household expenses, but cutting back on insurance coverage may leave them open to even bigger financial hardship,” says Madelyn Flannagan, Big “I” vice president for education and research. The survey found that more than 18 percent of respon-

Winter 2012

dents, more than 30 million Americans, have considered reducing their auto, home, life or health insurance coverage in the last few months. How can that create a marketing opportunity for an agent or producer? Take a proactive response to the consumer uneasiness and implement a customer contact process that shows your clients you are concerned about helping them get the best value for their insurance premium. One of the easiest things you can advise your clients to do is to change their deductibles. Owners of expensive homes and cars need to consider whether a low deductible makes sense. If someone steals the TV, it isn’t going to break the bank. Those same consumers need lots of insurance for a total catastrophe, though, or if they get sued. Therefore, they may want to take a $1,000 deductible or higher and use the savings, which can be 10 percent to 20 percent, to buy a reasonably priced umbrella


The survey found that more than 18 percent of respondents have considered reducing their insurance coverage. liability policy to give them $1 million or $2 million of coverage in case they are sued. This is a very important point. You want to help your clients save money where it makes sense but you also have to advise them that sometimes they have to spend money to save money. When it comes to Personal Umbrella polices ask your

clients a few simple questions. What if someone slips and falls in your yard and you get sued and the jury awards more in damages than your homeowner’s policy provides coverage for? What if someone in your household, perhaps your teenage driver, is responsible for an accident, you get sued and the judgment exceeds the liability limits on your auto policy? The answer to both of these questions is that your clients would be on the hook for the awarded damages, unless they had a personal umbrella policy. That’s why your clients who already have a personal umbrella policy need you to remind them of how important it is for them to keep it and why you need to offer a personal umbrella to all your clients who don’t have one. By showing them how they can pay for most if not all of the umbrella premium by increasing their deductibles on both auto and homeowner’s policies, you will be demonstrating your value to them. You have access to an A+ rated personal umbrella product from RLI Corporation. For more information call Cindy Munden at 405.840.4426.

ory Ol Glompany

Insurance C Members of Heartland Security Insurance Group

MGA WITH COMPETITIVE PRICING AND QUICK RESPONSE Auto Liability & Physical Damage Property Inland Marine General Liabilty Products Liabilty Excess & Umbrella Liability Environmental Liability (Pollution/GL) Miscellaneous Professional JIMMY HOLLAND, MARKETING MANAGER P.O. Box 803143 • Dallas, Texas 75380 • (972) 239-1458 • (800) 291-6846 • Fax (972) 233-3487

STANDARD WORKERS’ COMPENSATION Quick Response Competitive Commission Competitive Pricing Direct Bill Marketed & Underwritten through PATRIOT NATIONAL UNDERWRITERS Broad range of target classes including: Retail, Wholesale, Manufacturing & Services


Winter 2012



Agency perpetuation from the lender’s perspective Robert J. Pettinicchi CHIEF LENDING OFFICER InsurBanc

Before jumping into a decision to sell your agency, you need to consider not only your present but the future of the next generation of its owners and their descendants; it’s a complex issue requiring a good plan.


or insurance agency owners, a well-conceived and properly executed perpetuation plan is a great mechanism for harvesting the value generated through their dedication and commitment to building their business. If planned properly and structured correctly, the perpetuation plan is possibly the most rewarding and efficient method of harvesting value while allowing successors the opportunity to grow and yield value for themselves down the road. While a sale of the business to an aggregator or public enterprise may appear to be lucrative for the seller up-front, it forestalls the same opportunity for the next generation of owners, including the owner’s descendants. Further, an ownership transfer through a perpetuation takes place when the timing is right for all involved rather than relying on

the vagaries of the market or “which company is looking to buy right now.” Perpetuation is an option, however, only for well-run, profitable and growing agencies. If your agency is not a good performer, you are unrealistic to expect your younger producers to “bail you out” with an offer. However, businesses with reliable, recurring revenue will almost always have an opportunity to improve their operations if they are professionally run and managed with a daily focus on growing value. The best-conceived perpetuation plans resulting in completed transitions share some common characteristics. Again, the first leg of the stool is a profitable, well-run agency. The other legs are reasonable expectations on the part of the buyers and sellers, a properly structured and sustainable deal arrangement and buyers who have the

Tough cases got you stumped? We’ve got you covered. Since 1973, Taber Brokerage has built a solid and well-deserved reputation for helping you get tough life insurance cases underwritten. In fact, we’ve helped agents with thousands of cases others couldn’t work out, making us a premier brokerage for your atypical needs. Substandard Underwriting

Financial Underwriting

Avocation/Foreign Travel

At Taber Brokerage, we make doing business easy. Call us today to find out how we can help you with the hard cases.

800-627-3100 | 36


Winter 2012

“We make doing business easy.”


willingness and necessary experience to be agency owners. The ďŹ nal legâ&#x20AC;&#x201D; one that is often overlooked until it is too late â&#x20AC;&#x201D; is ďŹ nancing.

Show Me the Money The willingness of the seller to ďŹ nance a portion of the transaction is secondary only to the availability of thirdparty ďŹ nancing from a bank or ďŹ nance company. The ability to make a substantial down payment to the owner ďŹ nanced by a source outside of the business is the best way to convince a seller that the internal sale can be as good on day one as a sale to a public broker or aggregator. In these days of low investment returns and ratings agency downgrades, cash received in-hand speaks volumes. The well-run agency is one that can grow organically and produce a healthy bottom line. The agency valuation is dependent upon proďŹ tability since the value of an agency represents the capitalization of proďŹ ts to the owners over time. How can an agency that is not proďŹ table have good value? Agencies usually trade at multiples ranging from

ďŹ ve to seven times cash ďŹ&#x201A;ow. Even using the old revenue multiple rule of thumb that assumes an agency is worth 1.5 times revenue, an implicit assumption exists that the business has a 25-percent proďŹ t margin. The multiple represents approximately six times that bottom line. Agency proďŹ ts over time not only represent value but also provide the cash ďŹ&#x201A;ow needed to repay the debt used to acquire the agency. Agency owners can position their agencies to be peak performers by installing a growth culture in their organizations. To accomplish this, they must do the following: t )JSFPOMZQSPEVDFSTUIFZUSVMZCFMJFWFDBOCFPXOers someday. t 1BZGPSQFSGPSNBODFPGUIFTUBGGEPOPUQBZGPSOPO performance. t 1BZQBSUJDVMBSBUUFOUJPOUPUIFDPNQFOTBUJPOTUSVDture of producers and staff. Continued on Page 38

OUR COMPREHENSIVE MOBILE HOMEOWNERS INSURANCE ; 20% New Business Commission ; Partnership ProďŹ t Sharing ; 100,000 Maximum Policy Limits ; 50+ Age Of Insured Discounts ; Newer Home Discounts ; Fast Online Quotes, Policies And Endorsements


National Security strives to provide competitive, affordable insurance for policyholders, but we also reward our agents with some of the highest commissions in the industry, a partnership proďŹ t sharing program and an award-winning web site that provides fast online quotes, policies, and endorsements. Find out more by calling 1-800-239-2358 x213 or visit us on the web at

Elba, Alabama â&#x20AC;˘ 800-239-2358


Winter 2012



Continued from Page 37 Remember, compensation is usually the most significant expense for an agency. Be reasonable in the compensation expectations for yourselves, reduce debt aggressively whenever possible and keep balance sheet risk low by maintaining an appropriate level of working capital and staying in trust. A wealth of information is available to benchmark the financial performance of your agency to other agencies of similar size.

Coming to Terms Reasonable expectations of buyers and sellers are a little more subjective to determine. However, the most sensitive discussions usually pertain to differences in perspective regarding the value of the agency. Profitable, growing, well-run agencies are more valuable and can repay the debt incident to the perpetuation transaction. I strongly recommend that both parties get professional advice and a valuation from a reputable adviser early in the process. A proper and sustainable perpetuation structure is vitally important. The perpetuation plan should allow a selling owner to achieve retirement goals of reaping a solid return on the productive time and effort he or she put into the business. By the same token, the plan should enable



Winter 2012

the successor owner(s) to achieve their own business goals (which presumably are to buy a productive agency with a bright future). The plan cannot be one-sided. It must be designed to work for both the seller and the successors. Important elements of the plan should include how taxes will be minimized for both the buyer and seller, how control will be passed on to the succession team, how the buy/sell agreement is funded, what flexibility the plan allows and the role of outside financing. A strategic lending partner can help work out the details for a financing structure for an agency perpetuation. Traditional banks have not been a good source of capital for agency perpetuation transactions because they usually require hard collateral (tangible assets such as property, plant and equipment) to back up business loans. However, insurance agencies do not typically have significant tangible assets. When traditional bankers scan financial statements, they may not view intangible business assets as valuable for collateral. Thus, some banks may require agency owners to pledge a house or other assets as personal collateral. On the other hand, a specialized lender who works frequently with insurance agencies tends to understand agency value and the business’s ability to repay a loan.


To use intangible assets as collateral requires a lending institution that recognizes how independent insurance agencies operate and create value. When shopping for a lender for your agency, an agency owner or the acquiring parties should look for an institution with insurance industry knowledge. The more a lending institution’s decision-makers recognize the unique aspects of the agency business, the more likely they will understand the value to be created or harvested in a perpetuation transaction for an independent agency. A good rate does not a good deal make. Just as a consumer or business owner needs to shop on more than price, an agency principal should look at more than interest rates and terms. Banking professionals should be knowledgeable, informed, and informative.Finding the Right Advice The guidance and perspective of a qualified, experienced lending officer and/or an industry financial consultant can help agency principals avoid costly missteps and capitalize on opportunities. Often, banks tout their insights into business to try to attract customers. However, the number of bankers with insurance experience and expertise is relatively low.

One size does not fit all in agency perpetuation. Agency principals need lenders that are fair and disciplined in their analyses, while also being flexible and creative in developing lending solutions. As an agency owner looks to realize the value held within his or her agency, a key ally is an experienced lender who takes a complete look at the agency to determine needs and recognize the longterm value. A good banker is like a good insurance agent. Each looks at the whole picture of a situation, considers the client’s objectives and prepares a professional recommendation based on experience and expertise. The independent agency owner who has that type of relationship is an agency owner with a strong ally and a bright future. InsurBanc is a federally chartered bank dedicated to providing banking products and services to independent insurance agents. The bank is based in Farmington, Conn; 866-467-2262. This article originally appeared in the September 2011 issue of Florida Underwriter magazine and is reprinted here with permission.


Winter 2012



New Swiss Re Corporate Solutions Insurance Agents E&O Policy approved in Oklahoma Swiss Re’s updated coverage form has evolved to meet changing requirements of agents and brokers. The chart below explains added or changed features to help you acquaint yourself with this new document. Swiss Re Corporate Solutions


s the endorsed agents professional liability carrier of the IIABA and IIAO, Swiss Re Corporate Solutions is committed to protecting policyholder business, assets and reputation. In collaboration with the IIABA, Swiss Re Corporate Solutions has developed a new coverage form containing updated features and enhancements designed to reflect the evolving needs of agents and brokers. Call


Lyra Roberts for questions or to obtain a copy of the policy language. Please note that some coverage features may not apply to all policyholders. For current policyholders of Westport Insurance Corporation, a member of Swiss Re Corporate Solutions, written under insuring agreement W 1004C 0600, the liberalization clause in this form automatically gives you the benefits of the newly revised form.

New Policy Feature

Personal Data Protection for a breach of the agency’s netowrk security

New first party coverage provided with limits of $10,000 per incident/$25,000 policy period aggregate for agency expenses incurred, subject to a $1,000 each incident deductible.

Breach of Personal Data

New third party coverage provided with sub-limit of $1,000,000 per breach and aggregate if agency meets conditions set out in policy. (Subject to underwriting approval.)

Deductible Reduction

Deductible reduction applies to claims alleging failure to procure coverage where Swiss Re determines that the agency has written documentation in file refuting such claim. 50% reduction up to a maximum of $12,500.

Subpoena Expense Reimbursement

Limit increased from $5,000 to $10,000 per policy period.

Loss of Earnings Reimbursement

Increased to $500 per insured per day/maximum of $10,000 per policy period.

Definition of Personal Injury broadened

Definition broadened to include coverage for hazards similar to that provided by the general liability policy.

Consulting in conjunction with Employee Benefit Plans

Clarifies that insurance consulting for employee benefit plans is covered.

Advertising definition

Advertising is now defined in the policy and included in teh definition of wrongful acts.

Extended Reporting Period (tail)

Extended Reporting Period terms expanded to include a 2 year option where allowed.

Extended Reporting Period (tail)

Retirement age for the free unlimited tail was amended from 65 to 62.

EPL Coverage Endorsement limits

Added limit options of $1,000,000 and $2,000,000 in addition to existing limits of $250,000 and $1,000,000.

Investment/Securities Products Endorsement limits

Added limit option of $2,000,000 in addition to existing limits of $5,000,000 and $1,000,000.

Safety Consultants Endorsement limits

Higher limits may be available on a selected basis, dependent on individual risk characteristics.

Policy was in two parts

Now a single policy form, as opposed to separate General Terms and Conditions and Coverage Units.

This document is provided for informational purposes only and is intended as a general overview of the policy described and should not be considered a contract of insurance. 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 4 584 0510 or the most current edition thereof.



Winter 2012

Independent Insurance Agents of Oklahoma PO Box 13490 Oklahoma City, OK 73113 RETURN SERVICE REQUESTED

PRSRT STD U.S. POSTAGE PAID Oklahoma City, OK Permit No. 1659


<GDLI= ;D8JH:9DCNDJG<GDLI= >beZg^VaE;H!i]ZaZVYZg^cegZb^jbÒcVcX^c\!Xdci^cjZhid[dXjh dci]ZhjXXZhhd[djgV\ZcXneVgicZgh# DjggZ\^dcVahVaZh[dgXZVcYadXVaWgVcX]d[ÒXZhd[[ZgVjc^fjZ eZgheZXi^kZidjcYZghiVcYndjgX]VaaZc\Zh#DjgXgZVi^kZhZgk^XZ d[[Zg^c\h^cXajYZcjbZgdjhegd\gVbhi]ViVgZYZh^\cZYid WZcZÒindjVcYndjgXa^Zcih#LZadd`[dglVgYidndjgXdci^cjZY eVgicZgh]^el^i]>beZg^VaE;HVcYegdk^Y^c\ndji]Zbdhi XdbegZ]Zch^kZWZcZÒih^ci]Z^cYjhign#


Policy Magazine, winter 2012  

The official publication of the Independent Insurance Agents of Oklahoma.