Wisconsin Independent Agent - August 2019 by Independent Insurance Agents of Wisconsin

wisconsin INDEPENDENT AGENT AUGUST 2019

Your customer has years of memories in this house.

The most valuable things the family will ever own. As an Official Supplier of the Silver Lining®, you can help them protect it with a Home and Highway® policy from West Bend. Your customers will benefit from the convenience of one policy, one bill, one deductible, and one agency. With West Bend’s identity protection program, they can have access to a variety of identity protection services. And with the claim free award, they’ll even get a portion of their annual premium back if they don’t have a claim. To find out more, talk to your West Bend underwriter.

Celebrating 125 years of valued relationships with our agent partners.

wisconsin INDEPENDENT AGENT CONTENTS 4-6........... Partner Sponsor Profiles 7..............ACORD - Big “I” Pres Release 8, 9.......... Insurance Bartender Innovation Through Cooperation 11............ Risky Business Breaking Up Is Hard To Do 12............ Commentary From Counsel OCI Offers Guidance Bulletin On “Negative Enrollment” Into Policies 14, 15...... Virtual University Meth Labs, Explosions, and Homeowners Insurance 18, 19...... Agency Operations 6 Personality Traits That Make An Impact On Top Performing Teams 21........... Government Affairs Evers Administration Seeks to Crack Down On Payroll Fraud and Workers Misclassification Abuse 22............ Errors and Omissions Save Up To 30%on Big “I” Professional Liability Premium With New Risk Management Credits 25............ Virtual University Ask An Expert 26-28.......Members In The News 30............Food For Thought

Independent Insurance Agents of Wisconsin 725 John Nolen Drive Madison, Wisconsin 53713 Phone: (608) 256-4429 or (800) 362-7441 Fax: (608) 256-0170 www.iiaw.com

2018-2019 EXECUTIVE COMMITTEE President: Jason Bott Robertson-Ryan & Associates, Milwaukee President-Elect: Chris Costakis Avid Risk Solutions, Middleton Secretary-Treasurer: Darrel Zaleski Spectrum Insurance Group, Eau Claire Chairwoman of the Board: Lise Meyer-Kobussen Meyer Insurance Agency, Inc. Sauk City State National Director: Steve Leitch Leitch Insurance, River Falls

2018-2019 BOARD OF DIRECTORS

Mike Ansay Ansay & Associates, Port Washington Nick Arnoldy Marshfield Insurance Agency, Inc., Marshfield Mike Harrison R&R Insurance Services, Inc., Waukesha Dan Lau Robertson Ryan & Associates, Inc., Milwaukee Aaron Marsh Marsh Insurance Services, Inc., Rice Lake Marc Petersen American Advantage - Petersen & Assoc., Inc., New Berlin

Joanne Lukas Szymaszek Johnson Insurance Services LLC, Racine Chad Tisonik HNI Risk Services LLC, New Berlin Pam Utpadel Universal Insurance Advisors, Inc., Appleton

IIAW STAFF

ADVERTISERS & INFORMATION 32...........AAA 27...........Badger Mutual 24...........EMC 7.............Erickson & Larsen Inc. 20...........IIAW Agency Accounting 10...........IIAW Agency Solutions 17...........IIAW CE Education Calendar 22...........IIAW E&O Premium Discounts 28...........IMT 13...........Partners 16...........Prelicensing Schedule 30...........Robertson Ryan 29...........Society 2.............West Bend 31...........Western National 23...........West GUARD

Wisconsin Independent Agent is the official magazine of the Independent Insurance Agents of Wisconsin (IIAW) and is published monthly by IIAW 725 John Nolen Drive, Madison WI 53713. Phone: 608.256-4429. IIAW does not necessarily endorse any of the companies advertising in publication or the views of the writers. IIAW reserves the right, in its sole discretion, to reject advertising that does not meet IIAW qualifications or which may detract from its business, professional or ethical standards. © 2019 For information on advertising, contact Ashley Hale, 608.210.2977 or ashley@iiaw.com.

Matt Banaszynski Chief Executive Officer 608.256.4429 | matt@iiaw.com Mallory Cornell Vice President and Director of Risk Management 608.210.2975 | mallory@iiaw.com Kim Kramp Association and Agency Accounting Manager 608.210.2976 | kim@iiaw.com Trisha Ours Director of Insurance Services 608.210.2973 | trisha@iiaw.com Emily Mydlowski Member Engagement Coordinator 608.210.2972 | emily@iiaw.com Ashley Hale Graphic Designer and Creative Marketing Manager 608.210.2977 | ashley@iiaw.com Evan Leitch Technology and Risk Advisor 608.210.2971 | evan@iiaw.com Diana Banaszynski Education Coordinator 608.256.4429 | diana@iiaw.com

On The Cover... At the IIAW, we are focused on providing our members with innovative solutions to succeed in today’s bricks and clicks marketplace. This dedication to innovation through cooperation doesn’t stop with providing our members with new products and services, but also helping them change their agency’s culture to encourage ideation and innovation. The IIAW recently hosted a Capstone Leadership conference hosted by Integrity Insurance Company sponsored by the IIAW Exclusive Company Sponsors. To learn more read page 8. wisconsin INDEPENDENT AGENT

AUGUST 2019 3

Partner Sponsor Profiles Company Name: Arlington/Roe

Company Name: Auto-Owners Insurance

Location of Company: 8900 Keystone Crossing, 8th Floor, Indianapolis, IN 46240 Date Company Was Founded: August, 1964

Location of Company:

Current Officers: • James A. Roe, President and Chief Executive Officer • Andy Roe, Executive Vice President • Jim Eades, Executive Vice President and Chief Brokerage Officer • Rick Pitts, Vice President and General Counsel • J. Patrick Roe, Vice President, Director of Sales & Marketing • John Immordino, Vice President

Date Company Was Founded: July 1, 1916

Products Company Specializes In: Arlington/Roe is a family-owned managing general agency and wholesale insurance broker headquartered in Indianapolis, Indiana with offices also in Ohio, Michigan, Illinois, Kentucky, Tennessee, Missouri, Minnesota and Wisconsin. The company specializes in Aviation, Bonds, Commercial Binding, Commercial Brokerage, Personal Lines, Farm/Commercial Agriculture, Healthcare and Human Services, Professional Liability, Transportation and Workers’ Compensation. In addition to specific department expertise, the company specializes in finding the right solution for complex risk challenges through crossdepartment teamwork and access to a broad range of over 200 carriers. Outlook for The Company’s Future: Arlington/Roe’s growth includes significant increases in sales, state offices, and markets available to assist our independent agents. In five years, premium volume is expected to grow to $300 million from the current $220 million. For Wisconsin, the most significant development has been the acquisition of Robert W. Schmidt, a surplus lines broker, based in the Milwaukee area.

Lansing, Michigan

Current Officers: • Jeff Tagsold, Chairman & CEO • Dan Thelen, President • Carolyn Muller, Executive Vice President Products Company Specializes In: A wide range of preferred personal, commercial and farm products. Auto-Owners also specializes in garage risks, contractors, light manufacturing, and commercial auto including trucking as well as main street BOP business. We also offer loss control services within the state of Wisconsin. We offer a full range of life, health and annuity products taking care of all our policyholders needs. Outlook for The Company’s Future: Our company’s goal for the future is to continue to provide a wide array of insurance products and protection at very competitive prices. We will continue to be committed to the independent agency system in marketing our products. We’ve grown to become the 15th largest property & casualty company in the nation. We look forward to continued growth, in part due to our acquisition of Atlantic Casualty Insurance Company, an excess and surplus lines company, in 2016; our affiliation with Concord General Mutual Insurance in 2017; and our acquisition of Capital Insurance Group in 2019.

Company Name: CNA

President and CEO Jim Roe said, “This purchase allows us to add a ninth state office and effectively doubles our Wisconsin staff. We chose Wisconsin as an expansion state for Arlington/Roe and have three associates working in the state. We have a total of six associates in Wisconsin and now have an office in the greater Milwaukee area.” WI Team: Jamie Durocher, Naomi Nickel, Molly Knox, Aimi Kunesh, Bev Lautenbach and Kelly Cannistra Company Website: ArlingtonRoe.com

Location of Company: CNA Wisconsin 10000 Innovation Drive, Suite 320 Wauwatosa, WI 53226 Date Company Was Founded: 1897 Current Officers: • Dino E. Robusto, Chairman and Chief Executive Officer • Douglas M. Worman, Executive Vice President and Chief Underwriting Officer

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wisconsin INDEPENDENT AGENT

Partner Sponsor Profiles Local Leadership: • Kristina Talkowski, Branch Manager, CNA Wisconsin Email: kristina.talkowski@cna.com Phone: 414-844-2544 Products Company Specializes In: In addition to our broad appetite for business risks, CNA focuses on construction, manufacturing, technology, healthcare, professional services, financial institutions, real estate and small business. The breadth of our product portfolio enables CNA to provide customized insurance solutions that anticipate and address our customers’ risks. Outlook for The Company’s Future: We know your time is valuable. You expect to work with insurance specialists who have the expertise and understanding of their clients’ business needs, and can deliver full and meaningful solutions. That is why CNA Wisconsin has added branch staff to respond even more effectively to you and your clients. With a powerful legacy, an international reach built on a strong local presence, well-known business insurance expertise, and a deep commitment to our agents, brokers and customers, we offer more than just a policy – we deliver distinctive insurance solutions and promise a superior customer experience. It is these core attributes and our relationships with you that provide a strong foundation for continued mutual growth.

Corporate Office Version

Company Name: EMC Insurance Companies Location of Company: Des Moines, Iowa Date Company Was Founded: 1911 Current Officers: • Bruce Kelley, President and CEO • Mick Lovell, Executive Vice President – Operations • Scott Jean, Executive Vice President – Finance & Strategy Products Company Specializes in: • Commercial (businessowners, property, liability, auto, workers’ compensation, umbrella, cyber liability) • Life (EMC National Life)

businesses. We also partnered with CJ Cooper, a third-party administrator for drug and alcohol testing, to provide our policyholders with preferred pricing on their services. We listen to our agents and work with them to develop what’s needed for the local marketplace. We are investing in a steady stream of advanced tools, products, services and resources. We’re seizing opportunities and tackling challenges head on. We are currently involved in incubators, accelerators, wearable devices, telematics, drones, new technology platforms and more. Insights from data and analytics are helping us refine our product development, underwriting, pricing and risk selection, as well as improve our loss control and claim services. Milwaukee Branch Version Company Name: EMC Insurance Companies Location of Company: Milwaukee, Wis. Date Company Was Founded: 1956 Current Officers: • Dave Young, Resident Vice President and EMC Milwaukee Branch Manager Products Company Specializes in: • Commercial (businessowners, property, liability, auto, workers’ compensation, umbrella, cyber liability, employment practices liability, linebacker) • Life (EMC National Life) • Target markets (manufacturers, wholesalers, municipalities, schools, breweries and wineries, fine dining restaurants, water well drillers, liquid waste haulers, auto services) Outlook for the Company’s Future: The EMC Milwaukee Branch enjoys a strong surplus position and is well positioned for growth. We have a strong franchise with our independent agent partners in Wisconsin and are looking to continue our pattern of steady growth into the future. Our goal is to provide a stable market for our independent agents, allowing them to provide suitable solutions to their clients. About EMC Insurance Companies EMC Insurance Companies is among the top 50 insurance organizations in the country based on net written premium, with more than 2,500 employees. Employers Mutual Casualty Company (EMCC) was organized in 1911 to write workers’ compensation protection in Iowa. Today, operating under the trade name EMC Insurance Companies, the company provides property and casualty insurance products and services throughout the United States and writes reinsurance contracts worldwide. EMCC is licensed in all 50 states and the District of Columbia. For more information, visit emcins.com.

Outlook for the Company’s Future: EMC is a financially solid, secure, trusted mutual insurance company that operates with honesty and integrity. Those are key components of our brand and what we represent. But in this competitive market, having the basics isn’t enough, we must continuously develop and deliver new and better products that will make us—and our agents—stand out. Last year, we introduced a new breweries and wineries product as well as a new fine dining restaurants program. This year, we rolled out a new workplace violent event response coverage for all commercial wisconsin INDEPENDENT AGENT

AUGUST 2019 5

Partner Sponsor Profiles Company Name: Madison Mutual Insurance Company

Sports, Management & Professional Liability, Surety, E&S, Antique Auto, and Commercial Flood. Outlook for The Company’s Future: AM Best Rating is A++ Superior/XV. S&P Rating is A+. Company Name: Wisconsin Mutual Insurance

Location of Company: Edwardsville, IL Date Company Was Founded: January 1920 Current Officers: • Michael H. Wenos- CPCU, President • Ann Frank- Vice President and Treasurer • Jaime Wagoner- Director of Sales and Agency Development • Brian Gifford- CPCU, CHFC, CLU, Director of Claims • Dan Navarro- Director of Underwriting • Paul Beckley- Director of IT Products Company Specializes In: Madison Mutual is proud to specialize in Auto, Home, Farm and Personal Umbrella insurance for residents in Illinois, Missouri, Indiana, and Wisconsin. Outlook for The Company’s Future: Madison Mutual Insurance Company has always believed that to ensure that our policy holders are taken care of, we must provide quality products and assistance. At Madison Mutual, our agents and policy holders are not just clients, they are family. The future of the company is strong. Madison Mutual intends to do the same thing we have done for almost 100 years in business, which is to build and maintain a superior relationship with our policy holders, independent agents, and the local community through our competitive pricing and care of their well- being. Company Name: Philadelphia Insurance Companies

Location of Company: Bala Cynwyd, PA Date Company Was Founded: 1962 Current Officers: • Jamie Maguire, Jr.- Chairman • Bob O’Leary- President & CEO • Brian O’Reilly- EVP and Chief Marketing Officer • Karen Gilmer-Pauceillo- EVP, CFO, and Treasurer • John Glomb- EVP and Chief Underwriting Officer • Bill Benecke- EVP and Chief Claims Officer Products Company Specializes In: PHLY specializes in 120= niche markets including: Commercial Auto, Cyber Security, Education, Entertainment & Recreation, Habitational, Health & Fitness; Non-Profit and Human Services, Outdoor Products, Public Services, Real Estate, Special Events,

Headquarters: Madison, WI Founded: 1903 Executives: • Dan Keyes, President/CEO • Holly Casavant, Corporate Secretary/HR Director • Kurt Goetzka, Assistant Treasurer • Kellye Golden, Vice President Products Company Specializes in: WMI has written personal lines insurance in Wisconsin, and recently Minnesota, through independent agents for over 100 years. Throughout this time we have focused on customer service and the “human touch” that allows our policyholders to have confidence in the insurance process and our partnership. Calls are answered by a person who directs them to the WMI specialist that can best service their needs, not an endless automated system. However, we also appreciate the convenience that technology offers and are constantly working to offer new online tools. We continue to focus on the changing needs of our policyholders and that has led to more coverage options, endorsements, and socialized programs. Our personal lines products include auto, home, umbrella and farm. In addition, Wisconsin Mutual is proud to support the small to medium size farms that are so critical to Wisconsin and Minnesota. We grow in this market segment every year, and pride ourselves on the local expertise we can offer farmers in the communities we serve. Our commercial book of business in tailored for small to medium size residential accounts and small artisan contractors. Outlook for the Company’s Future: Wisconsin Mutual’s strong performance is a product of the contributions of our dedicated employees and agents providing exceptional customer service to our policyholders through both person-to-person interaction and the effective use of technology. Finding a balance between maintaining our industry-leading expense ratio and continuing to invest in and cultivate the use of technology, is a strong focus in our immediate future. Comments: Independent Agents interested in learning more about WMI should contact our Marketing Representative, Caleb Fredrickson at 608-828-1403 or Vice President, Kellye Golden at 608-828-1431. Company Website: Learn more on our website at www.wiins.com.

ACORD AND THE BIG “I” ANNOUNCE PARTNERSHIP TO PROVIDE FORMS ACCESS TO INDEPENDENT AGENT COMMUNITY Industry organizations to extend ongoing collaboration in order to ensure access to industry-standard forms for agents and brokers Pearl River, NY, July 31, 2019 – The Independent Insurance Agents & Brokers of America (the Big “I”) and ACORD, the global standards-setting body for the insurance industry, today announced a joint program to provide qualifying Big “I” member independent insurance agencies with a complimentary license to use ACORD Forms. The Big “I” is the nation’s oldest and largest national association of independent insurance agents and brokers, representing more than 25,000 agency locations united under the Trusted Choice brand. The association is dedicated to providing tools, education, and advocacy to help members run more effective and profitable agencies. ACORD, a not-for-profit industry organization, has been providing forms to the insurance industry since 1972. ACORD currently maintains a library of over 850 forms in a variety of formats, widely used throughout the global industry. As part of its ongoing collaboration with ACORD, the Big “I” has announced that it will fund ACORD Form end user licenses for the majority of its member agencies, allowing them to claim these licenses free of charge. “Industry-standard forms are a critical component of an independent agent’s business,” said Bob Rusbuldt, Big “I” president & CEO. “With this licensing program, the Big ‘I’ is helping our members improve their operational effectiveness. We are proud to play a key role in facilitating the delivery of these assets to our members and to further enhance the value of their Big ‘I’ membership.” All agents and brokers using ACORD Forms are required to obtain licenses from ACORD. Users who are not already members or subscribers of a qualifying ACORD program are able to purchase a stand-alone End User License from ACORD. Under this agreement, Big “I”

members with a group gross revenue of under $50 million will be eligible for a license from ACORD due to their Big “I” membership, with no additional payment necessary. “The Big ‘I’ has been an invaluable partner to ACORD in standards development, industry outreach, and many other activities in service to the insurance industry at large,” said ACORD President and CEO Bill Pieroni. “By ensuring access to ACORD Forms, the Big ‘I’ has once again affirmed its commitment to enabling success for the independent agent and broker community.” For more information on ACORD Forms, see www.acord.org/forms.

New ACORD forms fee schedule Gross Rev Min - 150,000.00 500,000.00 1,250,000.00 2,500,000.00 10,000,000.00 25,000,000.00

Gross Rev Max Per Agency Charge 149,999.99 10.00 499,999.99 20.00 1,249,999.99 60.00 2,499,999.99 150.00 9,999,999.99 500.00 24,999,999.99 1,750.00 49,999,999.99 2,500.00

* Big “I” members ACORD license fees are included in membership for entities up to $50M in revenue.

Proud to be independently owned since 1980

* * * * * * *

INSURANCE BARTENDER

INNOVATION THROUGH COOPERATION What happens when you put a group of our industry’s emerging leaders in a room together with a panel of Shark Tank judges? A fun and forward-thinking innovation experience focused on finding solutions to some of industry’s biggest challenges. Participants spent the day participating in an Innovation Shark Tank as part of IIAW Emerging Leader’s Leadership Conference: Capstone Innovation event. Activities took place in Madison at the beautiful Edgewater Hotel. A group of Integrity participants and emerging leaders conference attendees engaged in creative collaboration — leading to solutions to help the independent agency system succeed. The groups focused their efforts on developing solutions and a supporting business plan for several opportunities:

OPPORTUNITIES

SOLUTIONS

Find a balance between personalized service and on-demand service while continuing to deliver and drive customer loyalty, gain efficiencies and improve the customer experience

Develop a universal database for purchases with automatic reporting for new purchases that are sent directly to the insured through an app. Purchases trigger a push notification to ask if the insured would like to increase or change coverage based upon the purchase.

Access to a constant 360 degree view of the customer

Microchipping babies – tracks information and builds profiles based on behaviors Using an app, the chip provides on demand information for insurance agents and other investors/interested industries.

Ensuring independent agents stay relevant in the changing insurance landscape

Double the growth rate over the next three years

Provide new producers with formal training on insurance concepts and coverages to increase credibility with clients and prospects *Winning Idea*

Create a portal for insureds to capture all their information – credit score, loan approval, purchases, buying habits and predictions. This is to provide independent agents with a timeline of their life stages, to prepare them for these conversations and the clients insurance needs. Provide easy to understand interactive info when and where the client wants it through augmented reality, live agent video chat, AI “What If” bot. Provides clients with a visual demonstration of what they are and are not covered for. Provide producers with a 360 platform to learn efficiently, effectively, and with real world data in an increasingly complex and evolving landscape. Virtual Reality – real life training allows agents to simulate hands-on training. This platform also provides a database of manuals, documents and forms making them easily accessible.

The purpose of the Innovation Shark Tank was to teach agents the process of ideation, which leads to the formation of innovative ideas and concepts. The session was led by a team from Integrity Insurance and ended with a tough panel of “Shark Tank” judges tasked with choosing their best investment opportunity. Bobbie Collies, VP, Sales & Marketing at Integrity Insurance, who helped plan and facilitate to the exercise said, “At Integrity, we

AUGUST 2019

wisconsin INDEPENDENT AGENT

have a passion for creativity and innovation,” said Integrity VP, Sales & Marketing Bobbie Collies. “Innovation Shark Tank gave us the opportunity to teach emerging leaders the importance of being innovative, ground-breaking and forward-focused. These are skills crucial for our industry which is changing at a rapid pace.” At the IIAW, we are focused on providing our members with innovative solutions to succeed in today’s bricks and clicks marketplace. This dedication to innovation through cooperation doesn’t stop with providing our members with new products and services, but also helping them change their agency’s culture to encourage ideation and innovation. Use these techniques to help your team develop new creative ideas to help your agency and its insureds during your next team building or strategic planning exercise. ❍❍ Rapid idea generation • Assemble a group, spell out the basic ground rules for brainstorming (no criticism, wild ideas are welcome, focus on quantity, combine ideas to make better ideas) and then have people write out their ideas. Encourage to build on each other’s ideas ❍❍ Think opposite • If you challenge assumptions and create an alternative scenario, you likely will trigger creativity and come up with a lot of new ideas that you’ve never had before. First write assumptions about your problem statement then write opposites (think 10x’s bigger, remove something critical, flip something around). Last step is to come up with solutions as if the opposite were true ❍❍ Pick your idea • Gather all the ideas and group common ideas together. Individually, vote on the best idea that is a single, well-established answer to your opportunity statement ❍❍ Develop the concept • Further develop your idea. Identify the customer, problem, solution and how success will be measured ❍❍ Make it fun! • Brainstorming is a creative process. Design an event that breaks down the structure of your regular business environment Finally, consider bringing the following tools to your next meeting for creative stimulation and brainstorming. ❍❍ Bring clay, Play-Doh® or Koosh balls. People will play with them and that’s good. Rather than be a distraction, they will help people be more divergent and open their thinking ❍❍ Offer fruit or a protein snack. Having a little something to eat keeps blood sugar up and helps people be more creative ❍❍ Research shows that listening to happy music increases creative performance on overall divergent thinking This event would not be possible without the support of our Exclusive and Partner sponsors. Thank you for helping us continue to bring important professional development and networking opportunities to the valued members of the IIAW.

> Matt Banaszynski CEO of IIAW

When you’re in Madison, you need Participants of our Innovation Workshop gather on the patio of The to stop and appreciate the beauty Edgewater to enjoy the beautiful views of Lake Mendota and to celebrate of our state capital building! a great day of teamwork and brainstorming.

The day provided great opportunities for individual and group thinking and encouraged teams to think outside the box.

Josh Johanningmeier (Godfrey & Kahn), Matt Banaszynski (IIAW) and Bobbie Collies (Integrity) were the Shark Tank judges at the end of the day. They challenged team innovations and had the final decision on the “winners”.

It’s always a good idea to give your brain a break during intense working sessions. This break involved some competitive Rock! Paper! Scissors!

The winning team focused on innovative professional training opportunities that mitigate E&O risks and keep a strong pipeline of talent within the independent agency channel.

Matt’s Mixology If you are looking for a flash of inspiration, it might be at the bottom of a pint of beer or your favorite cocktail glass. According to numerous published studies moderate drinking is good for creativity as it loosens the brain’s controlling instincts and makes individuals feel spontaneous by freeing up the brain to think in a different way. Try serving this refreshing summer cocktail at your next meeting or strategic planning event. Its sure to get those creative juices flowing (pun intended).

Strawberry Gin Smash Servings: 8

Ingredients 2 tablespoons granulated sugar 2 limes, juiced (about 1/4 cup) 1 pound fresh strawberries 2 cups gin 3 cups club soda Fresh mint sprigs, for garnish

Steps to Make It 1. Muddle the sugar and limes in a pitcher that holds at least 8 cups (64 ounces). Set aside 6 to 8 small strawberries and make a small slice in their tips. Hull and slice the remaining strawberries and muddle the slices lightly with the sugar and lime juice. 2. S tir in the gin and club soda and pack the pitcher full of ice. Add mint sprigs to garnish. Pour into ice-filled glasses and garnish with a strawberry, slotted onto the edge of the glass. **RECIPE NOTES** Make-ahead: You can make this pitcher ahead; mix everything except the club soda and ice, then refrigerate overnight. A night in the fridge will also help the strawberries add more flavor and color to the drink.

AGENCY SOLUTIONS

TRUSTED CONSULTING FOR THE INDEPENDENT AGENT Because we know how important it is for you to succeed in business, IIAW has created a portfolio of solutions built just for you.

TECHNOLOGY

STRATEGIC

OPERATIONAL

FINANCIAL

MARKETING

We help you navigate and choose the best solutions to fit your needs

Protect your investment by reviewing business goals and strategies

Update and improve agency workflows and operating procedures

Review financial processes for accuracy and efficiency

Review your agency marketing efforts and discover helpful tools and resources

YOUR FIRST CALL

We are a trusted partner for independent agents across the nation and a leader in agency risk management and agency solution

Mallory Cornell, IIAW Vice President mallory@iiaw.com www.iiaw.com

RISKY BUSINESS

BREAKING UP IS HARD TO DO

Have you ever wondered if you’re able to just “break up” with a client? Are there clients whose name you dread seeing on the caller ID? Or those clients that you’re constantly trying to follow up with? What about those “oh, I forgot to mention” clients who love to give you important information at the last minute? Is it ok to tell them to find another agent? In short, yes. But, as with any respectable breakup, you should be mindful of your timing, your language, and how it may impact the other party. (You don’t want them to ruin your chances of other relationships, right?) Here are a few simple things to keep in mind if you’d like to end a relationship with a client. (Note: this is not legal advice, but rather comments from an E&O and management perspective) 1. Timing: Send a notice to the insured well in advance of their renewal. This provides them with ample time to find a new agent. 2. Language: The notice should provide language regarding the reasons for ending the relationship. Perhaps the insureds needs may be better met by another agent. 3. Resources: Advise the client that they can continue with the same carrier by obtaining an agent of record letter. You may also want to provide the client with loss runs and a schedule of policies to make their transition easier.

There are also some internal business practices you may want to consider before you decide to end any relationships. 1. Develop internal criteria to help determine what customers are a “good fit” for the agency and would be better services elsewhere. Set standards for your book of business and then follow those standards. 2. Create a letter that can be used as a standard template for “referring” clients that don’t meet the criteria the agency has set. 3. Consider how an unhappy customer may be handled and the potential reputational risk. Is the individual in influential circles or a position to easily influence a large group of people? 4. Take steps to consider why the customer may not be profitable to the agency and consider ways to make that customer profitable that instead of terminating the relationship. Neil Sedaka said it best when he told us that “Breaking Up Is Hard to Do”. An agent should not take relationships lightly but should consider the ideal book of business that will keep them profitable. If you’re looking to end relationships but are worried about the legal ramifications you should seek legal advice from your agency counsel or the IIAW retained attorney’s at Godfrey & Kahn.

> Mallory Cornell,

IIAW Vice President and Director of Risk Management wisconsin INDEPENDENT AGENT

AUGUST 2019 11

COMMENTARY FROM COUNSEL

OCI Offers Guidance Bulletin on “Negative Enrollment” Into Policies On April 19, 2019 the OCI issued an interpretive bulletin addressing the situation where an insurer is exiting the market and an offer of coverage is being made by a new carrier that is unaffiliated with the exiting insurer (not to be confused with coverage offers by affiliates of exiting insurers, which are subject to Section 631.29 of the Wisconsin Statutes). The OCI refers to this as “negative enrollment” and, according to the agency’s bulletin, there is “confusion in the marketplace” regarding consumer consent to bind coverage when the consumer’s existing insurer is exiting the market. The OCI poses the question as follows:

An insurer or agent that participates in a process whereby a consumer is enrolled in or is issued an insurance policy without their consent or where a consumer is sent a premium bill or invoice for an insurance policy that the consumer did not actively consent to has committed a misrepresentation under Wis. Stat. § 628.34.

[W]hether an insurer may collect data from the exiting insurer or its agents without application from the consumer, and simply issue new policies to those consumers whose policies are being non-renewed by the exiting insurer[?]

[C]onsent in this instance means an affirmative statement from the consumer, either verbally or in writing, that indicates acceptance of an offer of coverage.

Essentially the OCI focuses its analysis on the following scenario: An insurer is exiting the marketplace, with no affiliate in place to renew coverage under Section 631.29, and the consumer has not submitted an application for coverage with the proposed new insurer. One must infer from the scenario that the consumer’s agent has shared information with an unaffiliated insurer in order to quote and place coverage. Drawing on basic contract principles such as the required “meeting of the minds” to form a contract, as well as the statutory mandate that OCI “maintain freedom of contract” under Section 601.01(7), the OCI concludes:

As you are surely aware, violations of Section 628.34 subject agents to serious penalties. The OCI goes on to offer a specific interpretation of “consent”:

Seems straightforward, right? There’s a wrinkle though—the OCI also says that “payment of the first month’s premium, in and of itself, is not sufficient to show consent for purposes of the insurance regulations.” The takeaway for agents is that placement of coverage with an unaffiliated replacement insurer requires more than billing and payment—some form of verbal or written consent must also be obtained. I encourage you to review the OCI bulletin, which is available at https://oci.wi.gov/Pages/ Regulation/Bulletin20190419.aspx. The IIAW will keep an eye on developments related to this bulletin.

> Josh Johanningmeier IIAW General Counsel

12 AUGUST 2019

wisconsin INDEPENDENT AGENT

We help people feel secure and make life better when bad things happen

Partners Mutual Insurance is proud of the rich history we have enjoyed since our founding in 1931. So, when we affiliated with Penn National Insurance, a super regional carrier in 2012, we set out to accomplish even more. Together we bring the personal attention and local focus of a regional carrier, along with the products and services of national carriers. We want to partner with the best agents and are appointing select top-performing agencies in Wisconsin. Interested in partnering with a thriving insurance carrier with superior customer experience? Contact Mike Ottman at 262.432.3418; Ottman.Michael@PartnersMutual.com Or visit our website at partnersmutual.com

We help people feel secure and make life better when bad things happen

• Strong financial performance and A.M. Best Financial Strength Rating of A• Expanded Commercial Lines products and services with competitive pricing and comprehensive coverages to help our agents grow profitably • Comprehensive Personal Lines product offerings, including Homeowners Equipment Breakdown and additional protection plans • State-of-the-art quoting, processing and self-service tools, making it easier and faster to meet your customers’ needs • Local, experienced underwriting, claims and management staff

VIRTUAL UNIVERSITY

METH LABS, EXPLOSIONS, AND HOMEOWNERS’ INSURANCE Believe it or not, these two photos are of the same house:

According to early reports, an explosion caused by a natural gas leak turned this $1.2 million house into a pile of sticks and rubble. Tragically, the homeowner was killed in the explosion and her husband was severely injured. But even in the midst of this tragic situation, and while the investigation was still progressing, rumors about the real” reason the explosion happened began to swirl. One unconfirmed and unfounded rumor was the operation of a meth lab. Although the meth lab theory is almost certainly nothing but idle gossip (and interesting water cooler talk), an exploding meth lab does trigger an interesting homeowners’ (HO) insurance question: Does participating in an illegal act affect insurance coverage? In this case, does an explosion in a meth lab preclude coverage? Coverages A Dwelling and B Other Structures Dwelling (Coverage A) and Other Structures (Coverage B) are provided open peril (risk of direct physical loss, all risk”) protection in the HO-3 and HO-5. Coverage is provided unless it is specifically excluded. Are there any applicable exclusions related to damage caused by the explosion of a meth lab? No, there are no exclusions in the unendorsed HO related to an explosion caused by poor management of a meth lab. The only two exclusions that could potentially applying are: SECTION I PERILS INSURED AGAINST A. Coverage A Dwelling And Coverage B Other Structures 2. We do not insure, however, for loss: c. Caused by: (6) Any of the following:

B caused by any of the following. However, any ensuing loss to property described in Coverages A and B not precluded by any other provision in this policy is covered. 3. Faulty, inadequate or defective: b. Design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction; c. Materials used in repair, construction, renovation or remodeling; or d. Maintenance; of part or all of any property whether on or off the “residence premises”. Both exclusions contain a similar exception that gives back coverage for any damage caused by any ensuing loss not otherwise excluded. Even if any of these exclusions possibly apply, the exception means the carrier owes someone for this loss. However, there are provisions specific to Other Structures that could present a problem is this loss occurred in or to an other structure”: B. Coverage B Other Structures 2. We do not cover: c. Other structures from which any “business” is conducted; or d. Other structures used to store “business” property. However, we do cover a structure that contains “business” property solely owned by an “insured” or a tenant of the dwelling, provided that “business” property does not include gaseous or liquid fuel, other than fuel in a permanently installed fuel tank of a vehicle or craft parked or stored in the structure.

And/or:

Unless the makers are altruistic pushers, giving this away to those poor folks addicted to meth, most meth labs are for business purposes. If the carrier discovers that there was a meth lab, the explosion damaged the other structure and that the liquid was gaseous or liquid fuel, they have grounds to deny coverage for the outbuilding (if there is one).

SECTION I EXCLUSIONS

Coverage C Personal Property

B. We do not insure for loss to property described in Coverages A and

Unlike Coverages A and B, Coverage C in the HO-3 is named peril coverage meaning that the peril causing the loss must be specifically

(b) Mechanical breakdown, latent defect, inherent vice or any quality in property that causes it to damage or destroy itself;

14 AUGUST 2019

wisconsin INDEPENDENT AGENT

listed for coverage to apply. There isn’t much question here, the list of covered perils specifically lists explosion: SECTION I PERILS INSURED AGAINST B. Coverage C Personal Property We insure for direct physical loss to the property described in Coverage C caused by any of the following perils unless the loss is excluded in Section I Exclusions. 3. Explosion The apparent total destruction of personal property is also covered by the HO-3 policy in effect. And if the HO-5, which grants open peril coverage for personal property, is in place, the loss is not excluded and is thus covered. Section II Liability If the explosion injured another person or damaged property, could the insured, or their legal representative, be held legally liable for the injury or damage because of the exploding meth lab? That is a question for the courts, not this article; however, the concept of legal liability is detailed in the article, How Does a ‘Person’ Become Legally Liable. For the purposes of this article, assume the insured is found legally liable? Is there coverage from the HO policy? Unequivocally, there is no coverage from the HO for such liability. Two exclusions take away any chance of coverage, the business exclusion and the controlled substance exclusion.

Endorsements Within the ISO world, there do not appear to be any endorsements that alter these conclusions. Yes, there is the Permitted Incident Occupancies endorsement (HO 04 42) that removes the business” use exclusion for other structures; but it seems unlikely any homeowner would ask for the endorsement saying that there is a meth lab operating at the premises (what is the rating structure for such an operation). And saying that it was anything else is material misrepresentation which voids coverage. Who Gets Paid and How Much? Regardless the ultimate findings of cause, the insurance carrier owes someone but who. The owner was killed in the explosion and her husband lives and works as a doctor in West Virginia, thus he does not appear to reside with the named insured precluding him from protection as an insured (unless named on the policy). For sake of the discussion, assume the husband is not named on the policy and does not qualify as a you” or an insured otherwise. If this is the case, who gets paid when the insured is no longer around? The mortgagee is ignored as a known loss payee. Once the mortgagee is satisfied, does the insurance carrier owe anyone else? Death of the named insured is addressed in the very last provision of the unendorsed HO policy. The form states: G. Death If any person named in the Declarations or the spouse, if a resident of the same household, dies, the following apply:

E. Coverage E Personal Liability And Coverage F Medical Payments To Others

1. We insure the legal representative of the deceased but only with respect to the premises and property of the deceased covered under the policy at the time of death; and

Coverages E and F do not apply to the following:

2. “Insured” includes:

2. “Business”

a. An “insured” who is a member of your household at the time of your death, but only while a resident of the “residence premises”; and

a. “Bodily injury” or “property damage” arising out of or in connection with a “business” conducted from an “insured location” or engaged in by an “insured”, whether or not the “business” is owned or operated by an “insured” or employs an “insured”. This Exclusion E.2. applies but is not limited to an act or omission, regardless of its nature or circumstance, involving a service or duty rendered, promised, owed, or implied to be provided because of the nature of the “business”. (Note: “Business” means: a. A trade, profession or occupation engaged in on a full-time, part-time or occasional basis; or b. Any other activity engaged in for money or other compensation, except the following (none of the exceptions apply)); Or 8. Controlled Substance “Bodily injury” or “property damage” arising out of the use, sale, manufacture, delivery, transfer or possession by any person of a Controlled Substance as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812. Controlled Substances include but are not limited to cocaine, LSD, marijuana and all narcotic drugs. However, this exclusion does not apply to the legitimate use of prescription drugs by a person following the lawful orders of a licensed health care professional. There are no exceptions applicable to either of these exclusions in this loss situation. As already stated, few build a meth lab for personal use, so the intent is to make money. Even if the business use exclusion does not apply, the controlled substance exclusion applies because the explosion in our fantasy case resulted from the manufacture of a controlled substance. Remember, this is only a theoretical discussion. No law enforcement official has postulated on the theory of a meth lab. Please don’t spread the idea a meth lab was the cause of this explosion.

b. With respect to your property, the person having proper temporary custody of the property until appointment and qualification of a legal representative. The insured’s legal representative becomes the insured and is entitled to payment for the property. But the amount of payment is a function of plans to rebuild. Although both the HO-3 and HO-5 provide dwelling coverage on a replacement cost basis (subject to proper limits), replacement cost is paid only when the dwelling is rebuilt. If the new” insured makes the decision not to rebuild the premises, the carrier owes actual cash value (ACV) only. Personal property is covered at ACV in the unendorsed HO-3 and HO-5. Valuation of personal property is changed to replacement cost if the HO 04 90 Personal Property Replacement Cost Loss Settlement endorsement is attached. But, like the real property side, replacement cost is owed only when the property is replaced or repaired, otherwise the carrier owes only the personal property’s ACV. Depending on the decisions made by the legal representative, the carrier may owe only the ACV for all real and personal property damage. Nothing in the policy requires more than the ACV when property is not replaced, even when a mortgagee is involved. Bringing this to a Close Investigators determined the cause was, in fact, an internal gas leak. There was no meth lab and there never was (as best we can tell at this point). Although I knew this up front, the goal of this article was to review how a homeowners’ policy might respond when the damage is the result of this type of an illegal act.

>C hris Boggs

Big “I” Virtual University Executive Director

2019 Prelicensing Class Schedule Conducted at State Association Headquarters, IIAW prelicensing classes fulfill the study requirements for life, health, property and casualty. Full course materials are included with registration. The classes are: • • • • •

Designed to help you pass your state licensing examination The quickest way to meet the WI education hours requirement Taught by experienced insurance professionals who know the business Conducted in a comfortable classroom with free parking Approved by the Office of the Commissioners of Insurance

REGISTER AT IIAW.COM To register, click the Education tab on IIAW.com. For WI exam info, visit Prometric.com. IIAW Member Pricing: $340 Pricing given for full class registration Non-Member Pricing $355 You may also take individual classes Contact Kim@iiaw.com for multi-registration discounts. For any other questions please contact Diana@iiaw.com.

LIFE & ACCIDENT/HEALTH

PROPERTY & CASUALTY

January 7-10 February 4-7 March 4-7 April 1-4 May 6-9 June 3-6 July 8-11 August 5-8 September 9-12 October 7-10 November 4-7 December 2-5

January 14-17 February 11-14 March 18-21 April 15-18 May 20-23 June 17-20 July 15-18 August 19-22 September 16-19 October 21-24 November 18-21 December 9-12

The course fee includes all class materials. Materials are distributed on the first day of class. You receive: • Life & Accident/Health or Property & Casualty Insurance Study Manual • The Intermediary’s Guide to Wisconsin Insurance Law • The Stat of Wisconsin Ins. Licensing Candidate Handbook (This provides all the information to obtain a license)

DAILY SCHEDULE

Day 1 (Monday) 8:30 am - 4 pm ($85) Section A: Principles of Insurance & General WI Ins. Law Ethics Day 2 (Tuesday) 8:30 am - 4 pm ($90) Section B: Life Policies, Terms & Concepts or Section B: Property Policies, Terms & Concepts Day 3 (Wednesday) 8:30 am - 11:30 ($45) Section B: Life Policies, cont. & WI Life Insurance Law or Section B: Property Policies, cont. & WI Property Insurance Law Noon - 4 PM ($45) Section B: Accident & Health Policies, Terms & Concepts or Section B: Casualty Policies, Terms & Concepts Day 4 (Thursday) 8:30 am - 4 pm ($90) Section B: Accident & Health, cont. & WI Health Insurance Law or Section B: Casualty Policies, cont. & WI Casualty Insurance Law

CLASS SITE/DIRECTIONS

The IIAW is located at 725 John Nolen Dr. in Madison, WI. When traveling south on John Nolen, it’s the last driveway before Highway 12/18 (Beltline). Located near the Alliant Energy Center and Sheraton Hotel.

INCLEMENT WEATHER

If weather conditions are questionable, use your own judgment regarding your personal safety.. If Madison public schools are closed, the IIAW is closed and pre-licensing is canceled for the day. Canceled classes are made up on Friday.

HOTEL INFORMATION

Student requiring lodging will receive a special rate at the Clarion Suites, 2110 Rimrock Rd. in Madison. Please call the hotel directly at 608.284.1234, and ask for the “Independent Insurance Agent” discount.

CONTINUING

EDUCATION IIAW ONLINE EDUCATION & CE CLASSES DATE

COURSE

TIME

05 06 06 08 12 13 15 15

Commercial General Liability Coverages E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two Insuring Hobby and Small Farms Contractual Liability...Separating Fact from Fiction Additional insureds and Certificates of Insurance Condominiums Fiduciary Liability, ERISA Bonding, and Employee Benefits Liability The Affordable Care Act contains significant responsibilities for benefit plan decision makers Farm Property Coverage Insuring Trusts - Protecting Your Client’s Wishes Who Is An Insured Ethics and the Law Life Insurance...Benefits for the Living

12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM

AUGUST

19 20 26 27 29

SEPTEMBER

05 09 10 10 11 12 16 23 24 25 25 26 26

OCTOBER

10 14 15 15 16 17 21 24 28 29 29 30

12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM

Lying, Stealing, New Types of Fraud: The Importance of Crime Insurance Dispelling the Myths of Workers’ Compensation E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two It’s Not My Fault, or Is It? - Liability Issues in Personal Lines Policies Insuring Technology Exposures - Products, Property and Professional Liability 10 Things Every Commercial Lines Agent Ought to Know Personal Auto Policy Cyber Liability Farm Liability Coverages Ethics - Walking a Straight Line Income After Retirement - Where Does the Money Come From? E&O Risk Management: How to Manage Changing Risks and Opportunities Onsite at the IIAW Office

12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM 9 AM - 3:30 PM

Workers’ Compensation When the Child Becomes the Parent - Aging Parents and Insurance Decisions Contractors Liability Exposures ... Risk Analysis to Coverage Solutions Business Auto Coverages Protecting Your Most Valuable Asset Ethical Dilemmas ... Making the Right Choices Top 10 Countdown of Personal Lines Coverages & Current Issues Insuring Trusts - Protecting Your Clients Wishes Insuring Toys and Collectibles E&O: Roadmap to Policy Analysis - Part One E&O: Roadmap to Policy Analysis - Part Two An Agent’s Guide to Insuring Nonprofits

12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 8 AM - 11 AM 12 PM - 3 PM 12 PM - 3 PM

TO REGISTER, PLEASE GO TO IIAW.COM

AGENCY OPERATIONS

6 PERSONALITY TRAITS THAT MAKE AN IMPACT ON TOP PERFORMING TEAMS Building mentally tough teams requires mentally tough employees. In our latest whitepaper, our research team defines the psychological advantage of six essential personality traits that make up mental toughness. And while some people are more naturally inclined to possess these traits, mental toughness is also a skill that can be developed by honing in on these key characteristics and building upon them over time. Sharpening your team’s skill sets can improve their performance and outcomes in the workplace, so let’s dig into the six personality traits associated with mental toughness. We’ll use our research to show you how to spot mental toughness in your employees and how to further develop these traits on your team.

1. LEVEL-HEADEDNESS “A measure of emotional expressivity, [level-headedness] relates to the tendency to effectively manage the expression of one’s emotions. Individuals who manifest higher levels tend to remain composed in a variety of stress-inducing situations. Those who score lower tend to react more emotionally.” You know the saying “cool heads prevail?” When it comes to high-performing teams, it’s true. The employees on your teams must possess level-headedness to ensure the long-term success of the organization. So, how do you know if your team members have it? When the going gets tough, look for those who remain composed and can stabilize their emotions and reactions. They will continue to work towards solving the issues and not let downfalls blind them with emotions. Not everyone on your team will have this in high levels, and that’s okay. You can help other employees develop compensating behaviors by teaching and practicing different habits and techniques. Emphasize to your employees how important it is for them to stay calm, especially around other employees who may be more emotionally expressive. Showing your employees the long-term benefits of managing their emotions at work will not only benefit your bottom line, but it will also help their careers grow in a healthy manner.

2. STRESS TOLERANCE “A measure of the capacity to remain unworried about possible negative consequences. Those showing high scores may remain unconcerned when faced with events beyond their control. People displaying low scores tend to focus on what might go wrong or potential negative consequences before moving to action.”

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wisconsin INDEPENDENT AGENT

All employees experience stress at some point, especially when things get busy or timelines get tight. During that time, you’ll notice that the employees who can maintain a cool, calm, and collected mindset will focus on the task at hand and worry less than their counterparts. Stress can make some individuals single-minded, making negatives seem catastrophic. This can make employees frustrated and disengaged. Here are some tips to help you develop those who show a lower tolerance for stressful situations: 1. Help them find the silver lining when they’re overwhelmed and coach them on how to continue this practice for themselves. Once they’ve discovered the positive, help them create a plan to move forward. Often, stressed employees are just suffering from work paralysis, which can in turn cause more stress. 2. Keep an optimistic attitude yourself. Lead by example, and you will be able to better coach your team in maintaining positivity in stressful situations when things get chaotic. 3. Look for new opportunities that recurring issues reveal. That might come in the form of gaps in efficiency or the need for improved communication methods. An employee who always struggles at the end of the month due to poor reporting may need technology support or better time management from her team to avoid this in the future. Coaching and reinforcing these strategies with your employees will help them learn to manage their stress levels when they start to feel overwhelmed. Practicing and maintaining a level of calmness in the face of negative pressures will allow employees to develop endurance towards stress in the future.

3. RESILIENCY/EGO-STRENGTH “A measure of one’s capacity to handle setbacks, criticism, and rejection. High scores indicate that one is less negatively impacted by failure and setbacks. Those who score low tend to internalize failure, criticism, and rejection, and often have trouble bouncing back and re-establishing self-confidence.” Employees who are emotionally resilient adapt more easily to workplace change, manage workloads more effectively, and foster better working relationships in their teams. Those who show lower levels of resilience, however, might need a boost to help them bounce back.

One way you can encourage them to build stronger emotional resilience is by offering skills training, such as communication courses, technical skills development, soft skills classes, and more. Learning new tools and skills to help them carry out their daily role shows your employees that you care and support their overall well-being. Because resiliency is so dependent on security and egostrength, offer employees the chance to share in meetings, present on a topic in which they feel confident, or lead a project they can master. When employees feel more secure in their role, it improves resilience and they recognize and respond to stress better. Now your employees are emotionally proactive when faced with difficult situations.

4. ENERGY/PERSISTENCE “A measure of one’s potential to sustain a high level of activity over extended periods. High scores relate to being active and persistent in overcoming obstacles. Those with lower scores tend to be less energetic with respect to tasks and may not always persist when necessary to achieve a goal.” Employees who show a strong drive towards goals are fueled by high levels of persistence, and it will show in their work. They take ownership of their work and will persist to accomplish tasks to their best abilities, regardless of outlook. But not all employees exhibit persistence when times get tough, so how do you avoid this and cultivate energy and persistence on your team? Set clear goals and milestones so employees can get on board, stay focused, and remain energized. Many leaders assume the team is already committed, but motivation must also come from the top-down. Uncommitted and disengaged workers may just be going through the motions, but managers have an opportunity to win back an employee who has become disengaged. Ask employees what you can do to help them push through a difficult task or offer to support them during a project. Give your team a long-term goal and map out the key marks they need to hit in order to reach it. Break down their workloads into smaller, more manageable parts that they can use to stay on track. Communicate with them continuously on their progress, hold them accountable for reaching their goals, and acknowledge them when they reach a milestone. The more markers they meet, the more encouraged they feel to persist.

5. SELF-STRUCTURE “A measure of one’s preference for independently determining work methods. A high score indicates the motivation to work independently. A low score indicates one is unlikely to define one’s own work habits and methods.”

Do you have a team member who can set goals for themselves, both short- and long-term? Do they have the ability to make strategic decisions? These employees likely prefer to work with little management oversight and exhibit a strong propensity for self-structure. It’s not uncommon, however, for some employees to struggle with organizational skills and time management on their own. Encourage them to develop proficiency in self-structure by offering continuous coaching in project management competencies. Learning how to properly prioritize task work and manage deadlines will help them learn valuable organization skills they can apply to their workload and job function as a whole. Many leaders are learning to maximize this trait with technology. From efficiency platforms to project management platforms, these tools are created to help employees communicate, organize their days, and collaborate better. Since one of the fundamental skills to self-structure is communication, these platforms are helping teams build great communication practices and organize their structure internally.

6. THOROUGHNESS “A measure of one’s tendency to be concerned with details and to take full ownership of tasks, jobs, and roles. Those that score high tend to take responsibility and can, at times, be perfectionistic. Those who score low tend to be a bit less conscientious and may not always attend to the details required to continue to develop skill sets.” Mentally tough employees take pride in their work. Your detail-oriented employee focuses not only on the big picture, but also on the small facets of the assignment and the minor adjustments that need to take place in order to accomplish the goal. So, how do you develop those who aren’t as thorough? Start by incorporating lists and getting organized. Prioritize major tasks and coach them on how to rank the importance of each part as it relates up the whole. This will help your employees understand which tasks need particular care and how the quality of each piece can affect the greater project. By understanding the value of the task, employees learn to accept ownership and responsibility for their work. Reinforce this practice and make it routine. Part of thoroughness is consistency. Embracing routine makes for a process that has a built-in priority for thoroughness. Mental toughness coaching will provide your team members with better skills and insights for their individual roles and provide them the support they need to take challenges head-on and finish strong. You’ll see a better overall performance and more consistent outcomes from those who employees who practice mental toughness, and they will be able to continue to develop those skills on their own throughout their career. Need a little more data to understand how these work? Download our Mental Toughness whitepaper today!

>R icardo Roman

Director of Association Management, Caliper

AGENCY ACCOUNTING

IIAW can help your agency with your accounting needs. Here are some services we offer:

Agency Accounting Services: • • • • • •

Provide Day-to-Day Bookkeeping Payroll Processing Direct and Agency Bill Reconciliations Financial Statement Preparation and Interpretation Prepare Annual Budget Plan Work with Your External Accountants for Tax and Auditing Needs

Agency Accounting Best Practices and Education: • Provide Education and Training on Agency Accounting Terminology • Review Agency Accounting Practices and Workflows • Recommend and Implement Financial Best Practices

MATT BANASZYNSKI IIAW CEO

608-256-4429 matt@iiaw.com

KIM KRAMP

IIAW Association and Agency Accounting Manager

608-256-4429 kim@iiaw.com

GOVERNMENT AFFAIRS

Evers Administration Seeks To Crack Down On Payroll Fraud And Worker Misclassification Abuse In April of this year, Democratic Governor Tony Evers signed an executive order launching what is now known as the Joint Enforcement Task Force on Payroll Fraud and Worker Misclassification. The creation of a formalized task force is a clear indicator that Governor Evers has made this issue a top priority for his administration. The task force is charged with coordinating worker misclassification and enforcement matters handled by the Departments of Revenue (DOR), Workforce Development (DWD) Worker’s Compensation and Unemployment Insurance divisions, Justice (DOJ), as well as the Office of the Commissioner of Insurance (OCI) and other state agencies. The task force consists of: a) the Secretary of Workforce Development, or a designee, who shall serve as chair; b) the Attorney General or a designee; c) the Secretary of the Department of Revenue or a designee; d) the Commissioner of Insurance or a designee; e) the Administrator of the Worker’s Compensation Division; f) the Administrator of the Unemployment Insurance Division; g) the Administrator of the Equal Rights Division; h) Other individuals appointed by the Governor to serve at the pleasure of the Governor, including at least one individual representing workers and at least one individual from the business community in an industry affected by misclassification, such as construction. The task force will report to the Governor on or before March of each year on its progress and activities. In some cases, external organizations with relevant subject matter expertise, will be asked to present information at a task force meeting. For example, preliminary discussions have already taken place about the task force requesting the Wisconsin Compensation Rating Bureau (WCRB) provide information, expertise and data specifically related to Worker’s Compensation and the insurance industry. The WCRB is a licensed rate service organization created by state statute and the bureau assists DWD in its enforcement activities. Why should the insurance industry care about Governor Evers’ executive order and the task force? For starters, payroll fraud and worker misclassification has been a growing problem in Wisconsin and in many other jurisdictions across the country. According to DWD, from January 2016 to April 2019, the agency

conducted 1,963 investigations resulting in 422 audits. The 422 audits found 5,841 misclassified workers and found under-reported gross wages of almost $70 million. The issue in the insurance industry can be referred to as employer premium fraud where in some instances certain employers shirk their responsibility to properly classify certain workers, yet the insurer may very well still be on the hook for a workplace injury without having had the ability to adequately collect premium for the risk. In other industry sectors like trucking, construction or agriculture, the abuse is referred to as labor or human trafficking. Worker misclassification happens when an employer improperly classifies a worker as an “independent contractor” instead of an “employee” which is illegal under Wisconsin law. Sometimes premium fraud can generate larger losses than claim fraud. Past practice for some in the insurance industry has been to accept such activity as a cost of doing business rather than expend the time and resources into investigating and trying to prosecute when financial recovery may very well be negligible. However, with the executive order from Governor Evers and a task force formalized, the insurance industry and business community now have a partner with the state of Wisconsin to help eradicate the abusers of the system. Governor Evers’ executive order should be welcome news for honest employers and policyholders who abide by the rules and want a level playing field, as well as for insurers and agents who seek to underwrite risks as precisely and fairly for the customer as possible. The first meeting of the task force has not been set, but is expected to be held sometime towards the end of August. Your IIAW Government Affairs team will be there to follow the meetings, so stay tuned for more to come on this important topic that affects all of us.

> Misha Lee IIAW Lobbyist

wisconsin INDEPENDENT AGENT

AUGUST 2019 21

ERRORS & OMISSIONS

Save Up to 30% on Big “I” Professional Liability Premium with New Risk Management Credits The Big “I” Professional Liability program is pleased to announce that your agency can now access Swiss Re Corporate Solutions agency professional liability premium credits that help you save up to 30% of your agency’s insurance premium. Effective 1/1/2020, policyholders can take advantage of these additional risk management resources:

10% Attendance at a qualifying Risk Management course

5% At least 50% of agency staff Attendance at a qualifying Risk Management* course

5% Using coverage checklists*

5% Agency Website Improvement review by a qualified auditor*

* ( Risk management course attendance is required for application of the other credits. Maximum additional credit is 10% for a total of 20%)

10% Agency Improvement review by a qualified auditor We know that while risk management training is valuable, so is your time. That’s why the Risk Management Course has been reduced to 3 hours (from 6 hours), with streamlined information that best impacts your agency’s safety and bottom line. In addition, the number of staff required to attend has been simplified to better reflect agency makeup. In some states, a written exam may be substituted for attendance at a risk management course.

Comprehensive risk management resources are available to Big “I” Professional Liability Swiss Re Corporate Solutions policyholders at www.iiaba.net/EOHappens. Not yet part of the Big “I” Professional Liability program, the strongest and most stable agents E&O program in the nation? Reach out to your program manager for more information and to receive a proposal. We serve agencies of all sizes, from a oneperson shop to an alliance group. Learn more today at www.iiaba.net/EO. This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article. The information contained or referenced in this article is not intended to constitute and should not be considered legal, accounting or professional advice, nor shall it serve as a substitute for the recipient obtaining such advice. The views expressed in this article do not necessarily represent the views of the Swiss Re Group (“Swiss Re”) and the IIABA and/or its subsidiaries and/or management and/or shareholders.

Our data proves that risk management works! The new risk management program structure enables more people to have better access to risk management materials, which makes your agency operate better and helps you avoid E&O claims.

To learn more about how to take advantage of risk management credits, contact any of the staff at IIAW. The IIAW Vice President, Mallory Cornell, can teach the Risk Management course and is an approved auditor for the Agency Website review as well as the Agency Improvement review.

22 AUGUST 2019

wisconsin INDEPENDENT AGENT

>R ICHARD LUND

Senior Underwriter and Vice President, Swiss Re Corporate Solutions

We are pleased to recognize the critical role of our partner insurance agents and brokers in helping us achieve another remarkable year. Thank you for your ongoing commitment to our company.

Berkshire Hathaway

GUARD

Insurance Companies

COMMERCIAL LINES | PERSONAL LINES See state availability at www.guard.com

Safety is no accident. Provide more than coverage to your clients. Offer them the added protection of EMC’s loss control services. Whether it’s making operational changes to reduce injuries, implementing new work policies or coordinating targeted safety courses, our experts provide valuable services that can result in meaningful loss reduction. A safe work environment often leads to a more profitable business. And offering our loss control services at no additional cost to your clients often leads to a more profitable business for you too.

Count on EMC ® to have your clients’ best interests in mind.

ASK AN EXPERT

VIRTUAL UNIVERSITY

Q: Coverage for a Vehicle Hit by a Ball at a Sporting Event If a party parks their car at a sporting event (softball or baseball game) and they are parked in normal parking area and their vehicle is hit by a foul ball and they do not carry comprehensive coverage, can the person who hit the ball be liable? Can the school or city that owns the ballpark be liable? Does it make a difference if it is a youth sponsored event such as little league versus a high school, college or professional game?

It’s an assumption of risk. When you are close to the field, even in a marked parking space, you take your chances. Who has the duty? Was there any duty breached? I guess you could try to go after the venue for having parking spaces where cars could be hit but the driver chose to park there. -------------------You assume a risk when you park a car near sporting events of all kinds, including those you list. If damage is sufficiently extensive to exceed the deductible, a claim made be made under the comprehensive or other than collision” coverage on a vehicle. There is really only a very remote chance that liability for the damage would or could be assigned to the ball-hitter. -------------------It depends on the particular fact patter of the situation. Typically, there is an assumption of risk when you park near a baseball field or golf course and likely others would not pay your damages.

-------------------My first response if I were defending the ballpark, ball team or golf course would be, “Where is the negligence? What did the park, team or course not do that a prudent individual or entity would do?” I would also question the comparative negligence of the vehicle’s operator when it was parked within range of the balls. This is one of the risks assumed by a vehicle owner when they remove Physical Damage coverage from their vehicles. -------------------The question is not which sport or venue it is. The question is the legal liability of the party or parties you are naming. In showing negligence as a prerequisite for liability, the alleged misfeasor must have a duty that he or she or they contravened. Can’t see finding that in the examples you have provided. If the insured is so worried about this exposure, perhaps he should carry comprehensive coverage or park his car further away from the venue and walk a bit.

wisconsin INDEPENDENT AGENT

AUGUST 2019 25

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policyholder to help protect what they value most, whether that be their family or business. We are proud to be Encova.” About Encova Mutual Insurance Group Encova Mutual Insurance Group, formerly Motorists Insurance Group and BrickStreet Insurance, provides commercial, auto, home and life insurance. A super-regional carrier ranked in the top 20 mutual insurance companies in the United States, Encova includes more than 1,200 associates writing in 28 states and the District of Columbia, premiums in excess of $1 billion, a surplus in excess of $1.46 billion and assets in excess of $4.1 billion. The group markets insurance solutions through more than 2,000 independent agencies in the Midwest, Northeast and South.

MOTORISTS INSURANCE GROUP AND BRICKSTREET INSURANCE RE-ENTER THE MARKET AS ENCOVA MUTUAL INSURANCE GROUP COLUMBUS, Ohio (July 12, 2019) – Motorists Insurance Group and BrickStreet Mutual Insurance Co. are now Encova Mutual Insurance Group following the announcement of the new brand name and identity this morning. Encova.com launches Monday, July 15. Motorists and BrickStreet affiliated in 2017. Bringing these two companies together allowed them to develop an all-encompassing new brand that gives agents and policyholders a one-stop-shop to provide peace of mind for every step in life’s journey. “For the last two years, we have continued to integrate our operations and truly become one company,” Encova CEO Dave Kaufman said. “Our new brand identity is designed to show our well-rounded product offering and capabilities.” Encova remains committed to the independent agency model that Motorists and BrickStreet employed in the past. Their superior financial strength, cutting-edge technology, local expertise, one-stop-shop model and 360° workers’ compensation coverage set them apart from their competitors. “We are redefining ourselves in the market,” Encova president and chief operating officer TJ Obrokta Jr. said. “We are debuting a new brand identity, but Encova has decades of industry knowledge to expand our product offerings. We’ve created a more robust experience for our agents and policyholders.” Over the course of the next year, Encova will continue to update building signage, marketing materials and other collateral to reflect the new brand identity. “Our success comes from trusting relationships with agents and policyholders and our commitment to leaving a lasting impression in the communities we serve,” Kaufman said. “We partner with our agents to provide customized solutions to meet the needs of each

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wisconsin INDEPENDENT AGENT

ASSOCIATED BENEFITS AND RISK CONSULTING CLIMBS TO 39TH PLACE IN LIST OF NATION’S 100 LARGEST BROKERS July 10, 2019 - Associated Benefits and Risk Consulting (ABRC) moved up to the 39th spot on this year’s list of the 100 largest insurance brokers in the United States, as published by Business Insurance. ABRC held the 46th spot in the 2018 rankings. The 2019 rankings are based on 2018 brokerage revenue generated by U.S.-based clients. Associated Benefits and Risk Consulting reportedly grossed $92,642,930, an 11.6% increase since the 2018 report was published. In 2018, ABRC acquired Anderson Insurance & Investment Agency, an independent firm based in Minneapolis, and Diversified Insurance Solutions, one of Wisconsin’s leading insurance brokers. With more than 400 employees across Minnesota, Wisconsin, and Illinois, ABRC provides expertise to employers and individuals looking for a competitive and well-rounded insurance program. “We have built on our foundation and long-term vision while growing significantly over the past year,” said William M. Bohn, executive vice president and head of Wealth  Management & Institutional Services, Associated. “Our expanded capabilities and partnerships create positive, lasting impacts for our clients, communities and shareholders.” The rankings were released by Business Insurance in July of 2019.

WEST BEND MUTUAL INSURANCE MAKES TOP 50 RANKING SECURA INSURANCE NAMED A TOP 50 CARRIER BY WARD GROUP FOR SIXTH CONSECUTIVE YEAR Appleton, Wis. (July 17, 2019) – SECURA Insurance has again earned a place among Ward Group’s 50 top-performing property and casualty insurers for its performance over a five-year period (2014-2018). This is the sixth consecutive year the company has been recognized on this list for superior financial performance. “This recognition speaks to the strength of relationships between our associates and our independent agent partners,” said Jeff Kargus, SECURA’s Vice President – Chief Financial Officer. “We share a commitment to long-term financial stability to be able to take care of our policyholders, and earning a place on Ward’s 50 shows how we continue to do that together.” Ward Group® is the leading provider of benchmarking and best practices studies for insurance companies. The company analyzes nearly 3,000 property-casualty insurance companies in the United States to identify top performers annually. Financial benchmarks include:

WEST BEND, WI (July 26, 2019) – West Bend Mutual Insurance Company has made the Ward Group’s list of the 50 top-performing property and casualty insurers for 2019. The recently-released list includes the best performers of the more than 3,000 U.S.-domiciled companies. This is the sixth consecutive year the company has been included on this list. To identify the 50 Top Performers, Ward Group analyzes the financial performance of nearly 3,000 P&C insurance companies domiciled in the United States. To be included on the 2019 list and awarded the Ward’s 50 designation, insurers must pass safety and consistency tests, as well as performance tests. Companies that meet the minimum thresholds are ranked based on these measurements. Ward Group then compares the top 50 companies’ performance with the rest of the industry for the previous five years. “We’re very pleased with our results,” said Kevin Steiner, president and CEO. “Being included in the Ward’s 50 again this year is affirmation that West Bend Mutual Insurance Company is truly one of the top property and casualty insurers in the U.S. I extend my thanks to our associates and the independent agents who represent our company. We couldn’t achieve this success without our associates’ hard work and dedication, or without our agents’ continued loyalty.”

Five Year Average Return on Average Equity Five Year Average Return on Average Assets Five Year Average Return on Total Revenue Five Year Growth in Revenue Five Year Growth in Surplus Five Year Average Combined Ratio In addition to being named to Ward‘s Top 50, SECURA has an A (Excellent) rating from A.M. Best, which affirms its solid financial results and its ability to pay claims. SECURA also is certified as a Great Place to Work for 2019 based on associate feedback about the company’s workplace culture, and was ranked number 13 in Best Workplaces in Financial Services & Insurance for small and medium companies. About SECURA

SECURA Insurance is headquartered in Appleton, Wis. More than 550 independent insurance agencies in 12 states represent the company, which provides a broad range of competitive commercial, personal, farm, nonprofit, and special events products. It is known for providing exceptional service to its agents and policyholders since 1900, and is rated A (Excellent) by A.M. Best for its excellent ability to meet policyholder obligations. The carrier is a Ward’s Top 50 company for outstanding results in financial performance and consistency over a five-year period, and it is a certified Great Place to Work®. Visit www.secura.net to learn more.

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ACUITY RANKED AMONG TOP SUPER REGIONAL INSURERS FOR 13TH CONSECUTIVE YEAR July 25, 2019 - Acuity announced that it is named to the 2019 list of Super Regional Property-Casualty (P&C) Insurers, an annual ranking prepared by the Insurance Journal and research firm Demotech, Inc. of the leading multi-state P&C carriers in the nation. Acuity is ranked at number 11.

“Super Regional Insurers are critically important to the insurance industry and of particular importance to their agents, producers, and insureds. These companies are typically strong, stable markets that work hard for their agents, insureds, and their reinsurers,” said Barry Koestler II, Demotech Chief Ratings Officer. “For 13 years, Insurance Journal has worked with Demotech Inc. to exclusively publish its ranking of the nation’s top Super Regional P&C Insurers. Super Regional Insurers are an important partner for agents and brokers in helping deliver insurance products to consumers every day,” said Editor-in-Chief Andrea Wells. Acuity has been named to the list every year since its inception in 2007 and has always ranked in the top 20. “Being ranked the number 11 Super Regional in the nation is a testament to the efforts and commitment of our employees and agents in sustaining our growth and momentum,” said Ben Salzmann, Acuity President and CEO. “We are pleased to again be recognized as a strong, stable, and growing market for agents and the individuals, families, and businesses we protect.” Acuity’s sustained growth has kept it ranked consistently as a Super Regional P&C Insurer. In 2018 alone, Acuity reported $255 million in new business premium, propelling the insurer to an all-time high revenue of $1.542 billion, an increase of 7.2 percent over 2017. Acuity has doubled its top-line revenue in the past eight years and, for the past 19 years, has consistently grown faster than the insurance industry.

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Learn More: Chris Illman I cillman@robertsonryan.com I 800.258.0277 I www.RobertsonRyan.com

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