Page 1

Photo by Tracy Grabowski

Convention Photo Gallery Page 20 Can Brokerage Deduct Commission on Unpaid Premiums?

June - July 2012

Treasure Hunt

Scott Treasure 2012-2013 IBAA President

Differentiate or Die! Cdn Publication Mail Registration 40018149

Annette Hubick

Message from the Editor I know you’re not used to see ing my face on this page, but this is the one issue a year in which there is no “Message from the President,” a source of great relief for the freshly-minted 2012-2013 IBAA president, Scott Treasure. However, he didn’t get off scot-free (get it? ) as he was subjected to my lengthy list of questions in my effort to encapsulate Scott’s experience, character and views. See “Treasure Hunt” on page 6. As you’ll know after reading Scott’s profile, he’s a man of action when it comes to political involvement and advocacy, which dovetails nicely with the columns by both IBAA director of operations Rikki McBride (“The Advocate,” page 16) and PYIB president Steve Evanson (“PYIB Perspective,” page 34). The pair echoes each other’s

message imploring IBAA members to meet with the many new MLAs across the province — the summer’s BBQ and golf circuit should provide some opportunities to meet with elected officials. For those of you who prefer to golf with “your own kind,” you’ll find an industry tournament listing on the next page. Kudos to the organizers and sponsors for staging yet another enjoyable and thoughtprovoking IBAA

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You Answer.

We Ask.

How did the Slave Lake wildfires impact the way you do business or view your business?

Email your replies to by June 30, 2012.


June - July 2012 The Alberta Broker is the official publication of the

convention. (And whoever invented mashed potato martinis is a genius!). As one wise fellow delegate advised, “It’s a marathon, not a sprint.” You’d think I’d learn this after all these years — I blame Peace Hills.

3010 Calgary Trail, Edmonton, AB T6J 6V4 T: 780.424.3320 •1.800.318.0197 F: 780.424.7418 •

President Dean Bailey Chief Executive Officer George Hodgson Published six times annually by:

9249-48 Street Edmonton, Alberta T6B 2R9 T: 780.448.0936 • F: 780.465.6201 E: Publisher and Editor Annette Hubick Printing McCallum Printing Group Design and Layout Ron Leckelt Advertising Michele Schuldhaus 780.448.2890 The Alberta Broker welcomes articles about the insurance industry and its people. Letters to the Editor are welcome.The opinions and viewpoints expressed in The Alberta Broker may not necessarily be those of the association and its members. Material in The Alberta Broker may be reproduced with the credit to the author and the following: “Reprinted from the Insurance Brokers Association of Alberta’s magazine - The Alberta Broker (date).” Please send a copy to the publisher.

3 4


Message from the Editor Insurance Industry Golf Tournaments Treasure Hunt


Differentiate or Die





30 32 34

Did You Know? Chinook Country Report PYIB Perspective


Commercial Break


Professional Development


Start Talking


IBC Insight

14 16

Northern Exposure The Advocate

Timely Introductions

Know E&O

Taking the Extra Steps to Assess Your Client’s Insurance Needs

Convention Photo Gallery



Deductive Reasoning

Scott Treasure is IBAA’s 2012 President

Brokers Are Losing Market Share

State of the Industry

Busy Times at IBAC

Pump Up the Volume Should Your Clients Have 3-D Protection? Time to Think About Fall Boost Your Business by Speaking to Service Clubs

The Alberta Broker June - July 2012


continued from page 3 Both “Northern Exposure” (page 14) and “Chinook Country Report” (page 32) include convention recaps and the photo gallery starts on page 20. Industry expert and convention speaker Karen Rutherford authored what some may think is a horror story in “Differentiate or Die” (page 24). While her intent is in fact to scare readers about the threats to the broker distribution model of personal lines insurance, don’t fear; she follows that up with strategies and tactics to meet the challenge head on. Looking for more marketing ideas? Check out “Start Talking. Boost Your Business by Speaking at Service Clubs,” on page 40. Other topics covered in this issue include comprehensive crime insurance (page 36), planning for your fall education needs (page 38), why client needs assessment is good for business and loss control (page 18), IBC’s state-of-theindustry report (page 12) and a court case involving a dispute over commissions paid on subsequently cancelled policies (page 28). If you’ve ever heard yourself saying, “I wish the industry would … If I was in charge, I would … What we really need to do … If there’s one thing I’d change …” then we invite you to sound off in the “We Ask, You Answer” feature. After attending this year’s convention, I know there’s no shortage of opinions on pretty much any subject so why not share your wisdom, stir the pot or just get it off your chest? We’re not looking for in-depth analysis or lengthy dissertations; just email us a line or two (or three) to In marking the anniversary of the Slave Lake fires, this issue’s question asks how this tragic and historic event impacted you and your views about the insurance industry. A final note: Thank you to the many brokers and suppliers I met at the IBAA convention who told me they liked the magazine, its look and content. It’s always great to get feedback, especially positive feedback. That said, my door (or email inbox) is always open for your suggestions. Drop me a line at


The Alberta Broker June - July 2012

Summer 2012 Insurance Industry Golf Tournaments Host Date Location Wawanesa June 4 June 6 Intact Claims Managers June 6 June 7 Blue Goose - Alberta June 14 North East Local Council June 14 Edmonton Local Council June 19 Crystal Kids Golf Tournament June 19 Peace River Local Council June 21 Calgary Local Council June 28 Insurance Professionals of Calgary East Central Local Council July 4 July 16 Fairways for Hope July 24 Central Local Council Aug. 13 Insurance Institute of Northern Alberta Aug. 16 Peace Hills All Industry Aug. 20 Aug. 22 Peace Hills - Claims Aug. 25 Yellowhead Local Council Sept. 6 Lethbridge Local Council Sept. 13 Medicine Hat Local Council

Northern Bear Cougar Creek Sturgeon Lacombe Whitetail Landing River Ridge The Links Fairview Woodside Greens Woodside Greens Drumheller Blackhawk Innisfail Legends Wolf Creek Blackhawk Broadmoor Whitecourt Paradise Canyon Medicine Hat

Compiled by Chris Lewis, Peace Hills Insurance

Photo by Tracy Grabowski

Treasure Hunt

Scott Treasure 2012 - 2013 IBAA President

By Annette Hubick He’s a third-generation insurance broker, devout family man, volunteer and political junkie, and now Scott Treasure can add “industry leader” to his list of descriptors. His ascension to the IBAA president position is the result of several factors: his longtime involvement in the Progressive Conservative party (served as president of a local constituency association); his participation in IBAA’s political advocacy activities, which lead to his running for positions on the board and executive; and, his father, Randy Trea-


The Alberta Broker June - July 2012

sure, a well-known and respected broker who passed away in the fall of 2011. “Over the years, I’d had many conversations with my dad about the industry, how we were a community and how we all had to fight together.” A past director of IBAA himself, the senior Treasure encouraged his son to run for the association president’s position. “He thought it was a great idea, and he was proud that I’d been approached to consider it,” Scott recalls. “I agreed. It fit with who I was … and I really wanted a ball in my honour,” he adds jokingly.

Getting to Know IBAA’s Newest President Scott Treasure was born and raised in Edmonton and, other than a brief time in Vancouver, Alberta’s capital has always been home. “I like Edmonton’s little-big city feel. We have practically all the amenities of a large metropolitan centre, while still being a great place to live and raise a family.” He knows what of he speaks — he and his wife Cheri have four children: Jonah (6), Maxwell (4) and twins Vivian and Henry (2). Scott and Cheri have known each other since high school, but didn’t begin dating until after graduation. “Our first date was on December 18, 1992, to be exact, and we got married just a few short (seven) years after that on September 11, 1999,” recounts Scott. Although the prospect of joining the family insurance business was often discussed, Scott began his business career elsewhere. “My sister and I were always told that if we wanted to get into the family business, we would have to get hired by someone else and prove ourselves before getting ‘the call.’” And so, after graduating from the University of Alberta with a Bachelor of Commerce with Distinction in 1997 (number four in his class), he was hired by Nortel Networks in its New Grad Program that placed commerce grads into the major account sales teams. “It was a good times program that had us traveling across North America to meet as a team. Nortel was an amazing experience and taught me a lot,” Scott says. The job included a transfer to Vancouver to work with the newly-merged BC Tel and Telus in 2000. While in Vancouver, Scott decided to volunteer as a Big Brother when he met Kaleb Wallace. Kaleb is now 21, and the two are still in regular communication to this day. In fact, Kaleb happened to be visiting Scott and his family when Randy became ill. When Scott lost his dad just over a week later, Kaleb, all on his own, decided he was coming back for the funeral. “True to his word, there

continued on page 8

The Alberta Broker June - July 2012


continued from page 6 he was on that rough, rough day, just to be there for me and my family. I couldn’t have been more proud of my ‘little brother,’” recalls Scott. He and Cheri had been in Vancouver about a year when he got “the call” from his dad. With thoughts of starting their own family, the couple decided to take the opportunity to move home and go to work for Treasures — Cheri as the manager of its Grey Power office and Scott in the mailroom (taking a 60% pay cut, but with an focus on the future opportunity). Treasures Insurance was founded in 1945 by Scott’s grandfather, Ralph Treasure, as an insurance and real estate brokerage. Randy Treasure, along with Gerry Kristjanson (now of Bankers and Traders) purchased the brokerage from Ralph in 1969. The partners fostered great growth for the business, peaking in 2003 with three offices and about 100 staff including the registry office in Leduc (by this time, only Randy was at the helm after the partnership was dissolved in 1998). In 2003, Randy elected to sell the brokerage’s personal lines business, and Scott and long-time Treasures employee Terry Funk purchased the Treasures name and commercial book. Since joining the brokerage, Scott committed to proving himself, having become integral in the business and earning his CAIB Honours designation, achieving the provincial highest mark awards for CAIB 1 in 2002 and CAIB 3 in 2003. Scott and Terry moved the offices into their current location, a new building that Randy owned, along with the registry office. With Scott as CEO focussing on business development and Terry as vice president of operations with his strong technical expertise, “our skill sets dove-tail,” Scott contends. With an average tenure of 15 years on the Treasures sales team, Scott is proud of the expertise Treasures offers and the relationships they’ve built with their clients. “Our goal is to have our clients LOVE to do business with us,” he explains.


The Alberta Broker June - July 2012

Like his father Ralph before him, once Randy sold the business to his son, he took a big step back to let the next generation run things its own way. That said, Scott and Randy grew even closer over the next years (facilitated by the addition of a few grandchildren), often talking daily on the phone about everything from the day-to-day building issues to business, politics and family. When speaking of his father, the grief and admiration Scott expresses is palpable and he is still reeling from the loss, expressing it simply: “My father led primarily by example, and what a

great example he was.” It was also Randy who encouraged Scott to get actively involved in politics in 2003. “He asked me to stop in on a PC constituency meeting that was taking place in our building on a Saturday. And as a young person, you just have to go near a political meeting and you’ll find yourself on the board as VP of youth. I was hooked,” Scott recalls. Over the years, “I gained a lot of respect for elected representatives and an understanding of how hard of a job it is to do,” says Scott.

continued on page 10

Scott Treasure Plays 20 Questions 1. If we’re buying, what are you having for dinner? Cheeseburger and Fries … or Indian food 2. What’s your “guilty pleasure” TV Show? The Ultimate Fighter and Celebrity Apprentice 3. What’s your favourite snack food or candy? Too many to list. But I enjoy hunkering down with a bag of Old Dutch Taco chips and a bag of skittles 4. If you could build a house anywhere, where would it be? Anywhere overlooking the River valley in Edmonton or a condo in Downtown Vancouver 5. At which single store would you choose to max out your credit card? Best Buy/Toys R Us 6. If you could meet anyone, alive or not, who would it be and WHY? Carl Sagan 7. Where would you want to retire to? Vancouver 8. What is your best childhood memory? Summers at Seba Beach 9. If you didn’t do what you do for a living, what would you be? Teacher or a psychologist 10. Dogs or cats? Totally Dogs! But the real answer is neither. Allergies 11. If you could go anywhere in the world on vacation, where would you go? Hong Kong 12. If you could see one concert, who would it be? Led Zeppelin

13. Tim’s or Starbucks? Tim’s 14. What’s playing in your iPod right now? Don’t have one, but it would be Top 40 stuff and artists like Bare Naked Ladies, Eminem and Jay-Z 15. What’s your favourite game app? Super Stickman Golf as far as apps go but Batman: Arkham Asylum is the best video game I’ve ever played. I actually am excited to pick up the sequel Arkham City after convention 16. What’s your favourite restaurant in Edmonton? Daddy O’s 17. What’s your culinary specialty? I have none. I’m not proud of this fact, by-the-way 18. What’s your dream car? I love trucks and am driving my dad’s 2011 F-150. Don’t know if I’m going to be able to do anything better than that. Cue the tears … 19. What’s your favourite ice cream flavour? I’ve always been more of a sherbet guy. And I’ve always loved rainbow flavor 20. What’s the one thing you haven’t done that you’d love to do? Buy my wife anything she wants, and tell her that I know she is the one who is right all the time. – Cheri. So it looks like in helping me with the factual questions in this document, Cheri decided this was one she could also handle. Ha! That said, she is right. I need to do something special for my awesome wife who has provided me with so much love, support and children. Without her I am nothing.

continued from page 8 That involvement resulted in IBAA’s invitation to Scott to sit in on some meetings that centred on countering a resolution involving government insurance that was being proposed at the convention that year. IBAA not only sought Scott’s counsel, but also asked him to present opposing arguments at the convention, which he did, beginning the merge of Scott’s political and insurance backgrounds into his current role as IBAA’s president. Scott contends that one key thing he’s learned about the political process is “the importance of having a voice at the table before that burning issue comes up.” And, with so many new faces in Alberta’s post-election legislature, he stresses the need for political relationship building and involvement is even more pressing and underscores his focus as IBAA president, “Promoting the broker. We need to educate these new politicians as to who we are, the service we provide and the role we play in the community. We advocate for consumers, we support local businesses and causes, we work with Victims Services. Basically, we need to show them the Sleep Easy ads,” he replies. The battle to keep credit unions (and banks at the national level) from retailing insurance from

their branches will be ongoing and consumers and brokers need to be protected from coercive selling tactics. “No matter your political stripe, get involved,” he challenges. Scott’s focus on promoting the bro-

ker also extends to the general public. If there is one thing he doesn’t like about being an insurance broker, he says, “It’s how the public tends to perceive us. We have a product that can truly help people when they need it

Father Knows Best Scott Treasure shares some of the nuggets of wisdom that his dear father Randy passed on to him. On being an insurance broker “The one thing he had to explain to me coming into this industry was the sense of community within the insurance brokerage industry. I was coming from a pretty cut throat world in the technology sector and we really disliked our competition, in the likes of Cisco and Lucent. It was quite the shift, as he explained how we were very regulated and susceptible to government interference, and that as a result it was necessary and beneficial to work together as an industry. He also talked about how much he learned from his friends in the industry (in both what to do and what not to do), and that I would be wise to make some relationships with other brokerages.” On being a business owner “Dad always had a way with people. He was the kind of guy that you just

wanted to know, and I think that was because he was unbelievably trustworthy and always treated everyone with the utmost respect. As a result, he hated liars and bullies and should you prove yourself to be either in his presence it was pretty much over between you and him. Oh, and, ‘one bad apple spoils the bunch.’ ” On family and social life “My dad was a principled man with kind of a serious image, but I also loved how he always had that twinkle in his eye, which meant he was always up for a good joke and I lived to make him laugh. Oh how I miss that laugh. The idea of taking responsibility for your actions and being a responsible person was also something that my dad instilled in us as kids. You never wanted to hear my dad call you ‘irresponsible.’ I felt like I was the only one of my peers who had to worry about that kind of stuff, but in hindsight I’m obviously glad it stuck.”

2012-2013 IBAA Board of Directors

Back Row (left to right): Derek Connick, Steve Hambly, Steve Evanson Jr., Sheldon Bos, Ken Holst, Gord Cowan (vice president), Eileen Cholowski, Darren King; Middle Row (left to right): Shelley Dueck, Dennis Milligan, Gloria Corkum, Scott Treasure (president), Robyn Young, Gord Enders (president-elect), Patti Hunt; Front Row (left to right): Jackie Doell, Dean Bailey (past president), Julia Marshall


The Alberta Broker June - July 2012

the most and everything always seems to come back to the clichéd ‘insurance salesman’ and all that entails.” He lists three key initiatives that IBAA is developing to help promote IBAA members (At time of writing, the first two were yet to be presented to the membership at the annual general meeting.) 1. Broker Branded Mobile App — smart phone app, available on iPhone, BlackBerry and Android devices, branded to the individual brokerage, that provides valuable information and tools to clients, e.g., home inventory list, after a collision form, instant contact to brokerage 2. My Insurance Shopper — online directory and quoting website to readdress the erosion of market to competitors who offer this service 3. Insurance Goal of the Game — promotion that offers a branding opportunity for IBAA member brokers while also supporting Victims Services, further reinforcing insurance brokers’ community involvement With his roles as IBAA president, brokerage owner and father — he’s taking a break from his PC riding association activities to avoid any perceived conflict of interest — (or maybe it’s the four kids), the upcoming years will certainly pose a work/life balancing challenge. “I guess I’m lucky that I have a passion for both business and politics. That said, now that the family has fully arrived, I expect to have practically no free time whatsoever for about the next 15 years. I feel very lucky.” Whether at home or at work, his philosophical approach is the same: “Don’t be a jerk. Kind of a ‘treat others the way you want to be treated’ kind of thing,” he summarizes. “Also, always sleep on big decisions and emails written in the heat of the moment … which comes back to the whole don’t be a jerk thing.” The Alberta Broker June - July 2012


IBC Insight James Geuzebroek


Uncertain World From the economic global meltdown of 2008 to the international debt crisis, we live in uncertain times. In the face of this uncertainty, the property and casualty insurance (P&C) industry is a reliable force for stability. The P&C insurance industry and the many brokers across Alberta strive to provide peace of mind for Canadians, helping them manage risk in these uncertain times.

• Advocating for inclusion of severe weather adaptation into climate change strategies of governments at every level. • Working with communities to design a municipal risk assessment tool (MRAT) to identify infrastructure weak spots. • Informing consumers on risk reduction and promoting simple solutions such as using rain barrels.

Ensuring Affordability for Consumers Insurance Bureau of Canada (IBC) strives for an affordable auto insurance product for consumers by urging the government to strike the right balance between competition and balanced regulation. Since the 2004 reforms, Alberta has seen its auto insurance system remain consistently stable, with decreasing premiums and healthy competition levels. IBC continues to work with the government to maintain affordability with the best possible coverage for drivers across the province. IBC also provides consumers with valuable insurance tips and other advice through traditional and social media.

2011 proved to be a difficult year for Albertans. Communities were hit hard by hail storms, wind storms and raging fires that devastated thousands of residents and cost hundreds of millions in insured claims. IBC’s Community Assistant Mobile Pavilion (CAMP) was sent out within 24 hours to assist victims of the Slave Lake disaster by providing on-site insurance information.

Adapting to Severe Weather Catastrophic events caused by severe weather are a growing risk that disrupts lives and costs billions. Environment Canada reports that extreme weather events are becoming more frequent. Albertans have seen more incidents of wind and thunderstorms and hail. This also means more flooded basements, sewer backups and washed-out roads. Insured losses from natural catastrophes, like the wind storms that crossed southern Alberta last fall, are rising with losses hitting $1.7 billion in 2011 across Canada. In Canada, the P&C insurance industry leads adaptation strategies nationally by:


The Alberta Broker June - July 2012

Reaching Out to Communities Insurers are deeply involved in their communities, helping to rebuild in times of disaster and human tragedy, with a strong interest in seeing communities grow and prosper. In August 2011, IBC presented a new Rapid Deployment Craft rescue boat to the Calgary fire department’s aquatic rescue team to recognize their efforts to keep Calgarians safe on the water. In the fall of 2011, IBC donated a Hazard House, an interactive exhibit used to teach consumers about fire safety and injury prevention, to the Edson fire department. The Hazard House is used to educate children on the importance of fire and home safety. Educating Consumers Consumers have many questions about choosing insurance products, understanding their policies and reducing their risk of losses. Through IBC, the P&C insurance industry helps by providing various resources to answer these

questions for consumers and brokers alike. IBC’s five Consumer Information Centres (CIC) across Canada answer more than 60,000 inquiries a year including more than 7,000 at the Alberta CIC. Advocating on consumers’ behalf with federal and provincial governments to include insurance education in financial literacy initiatives is also a top priority for the P&C industry. IBC’s various online resources (, and in Quebec) provide information to more than one million visitors a year. Maintaining a Twitter feed and blogs on insurance topics are also helping to engage consumers and brokers in the P&C insurance community to lead the discussion on important issues that affect the industry. The future of the P&C insurance industry is bright. The industry, with the help of thousands of brokers and agents, is a major contributor to the economy and makes substantial positive contributions to the communities in which we all live. While many uncertainties exist, our industry will continue to thrive if we make it a priority to work together to pursue our common objectives while maintaining our lasting commitment to the issues that matter most to consumers. Finally Doug Noble, the vice president for IBC in Alberta, recently left our organization. We thank Doug for his work and wish him well. IBC is currently doing an extensive search to fill this position. We will update you when the new person is hired. JAMES GEUZEBROEK Vice-president, Communications, Insurance Bureau of Canada jgeuzebroek@ibc .ca

Who? What? Where? Chris Lewis

Northern Another IBAA convention has come and gone and even after some great attempts by certain brokers, I can safely say that I’m still alive to talk about it. I do believe that next year there should be a curfew in place to refrain brokers from keeping us company people up to all hours of the night. No matter how hard we try to go to bed, the likes of Rob Dyck (Dyck Insurance), Chad Hudson (Access Insurance) and Steve Hambly (Sadler Insurance) always manage to keep us up for “just one more.” However, one usually turns into twenty-one. Convention Recap Sunday evening began with the CFL kickoff-themed tradeshow and strolling dinner. There were numerous venders at the always very well-attended event — many prizes and draws to be won. As always, the Milligan family (Sexsmith Insurance) came away with another prize; however, they may have been a tad disappointed this year as they are accustomed to winning the big screen TVs. From the tradeshow, everyone flocked to the Peace Hills Party night; the Peace Hills staff was all dressed up as referees in keeping with the evening’s theme. Balloons and flags of all the CFL teams were on the tables and the dance floor. A DJ played tunes along with a Karaoke machine, which became quite the entertainment throughout the night. Rumour has it that if you were awake long enough, you were even able to see John Lee (AGM Insurance) up there singing away. Monday. Many of the red-eyed


The Alberta Broker June - July 2012

brokers attended the annual AGM meeting followed by lunch with entertainment. The much-awaited CEO panel followed the luncheon and was very well attended. The panel always seems to be one of the most anticipated events at the IBAA convention. A variety of questions were prepared in advance by the IBAA board, as well as taken live from the audience via Twitter, and posed by moderator Diane Francis. In my opinion Serge Lavoie ( JEVCO) stole the show with his wit and humour of referring to Jean-François Blais (Intact) as “my boss” in reference to the recent Intact purchase of JEVCO. The president’s ball followed the CEO panel where Scott Treasure (Treasures Insurance) was introduced as the new president of IBAA. His inaugural speech was fantastic and even left many people in tears when referring to the passing of his father Randy Treasure this past year. We all know he would be very proud of you Scott! On came the famous Moose Milk and music from the Accidental Benefits while many danced the night away. Tuesday. If you did not attend the education seminars, you were probably swinging the sticks at the annual golf tournament. Elbow Springs Golf course was this year’s choice for the event and the course was in great shape along with the weather. The only thing that could have improved the day was my golf game. Bryce Dzenick (Crawford) did a fantastic job organizing the event and $1,440 was donated to WICC on behalf of all the golfers. Hospitality night followed this year’s golf tourna-

ment and was held at the Calgary Art Gallery just down the street from the hotel. Rumour had it almost 400 people attended the event and most eventually ended up on a restaurant/pub patio after hospitality night eventually came to close. Only one injury to report at this year’s brokers convention: Gail Tory (McLean & Shaw) unfortunately fractured a bone in her foot late on Sunday night (the story will remain untold) and was out of commission for some of the weekend. I think if you had looked really closely you may have seen Diane Brickner (Peace Hills) sneaking moose milk up into Gail’s room the night of the president’s ball. Gail, we are all hoping for a speedy recovery. Just wanted to say congratulations to Lori Bartlett, Margaret Buhay and everyone who helped organize this year’s IBAA convention. As always, you did a wonderful job. Keep up the great work. What’s new? The Blue Goose Gala was held on April 21, 2012, at the River Cree Casino. Over 320 insurance industry people attended the event. This year’s charity was the Brain Care Centre, and Dr. Martin Mrazik was there to speak about the devastating effects of sport concussions. The gala, which included a silent and live auction, raised $27,000, which will enable 7,600 minor sports athletes in Edmonton to take advantage of baseline post-concussion testing. Mark Connelly (CBC News) was the MC, and Lewis Lavoie once again

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The Advocate

Rikki McBride

Timely Introductions With the election complete, a number of new faces are now in the legislature (let alone a new official opposition). Over all, approximately 45% of MLAs are new to the role — they need to be educated about who Alberta insurance brokers are, what role we play in both the business and public communities and how we are the trusted advisors of their constituents. Our grassroots lobby effort with politicians has always been two-fold. We not only advocate on behalf of Alberta brokers for specific outcomes but also spend time and effort to build relationships with those in power. Politicians must know who we are and what we do in the community in order to build strong relationships and position ourselves as valued stakeholders. That element of education is vital to building a strong, long-lasting relationship with these people. We need to meet them, introduce ourselves, and explain who we are and why the things we want are important to everyone. IBAA’s positions on credit unions, the New West Trade Partnership

Northern Exposure continued from page 14 painted a wonderful portrait throughout the night that was eventually auctioned off in the live auction. Underwriters Appreciation was once again hosted by the North East Council brokers on April 19th. The event this year was held in Lloydminster, which is a different venue from the usual pool hall in Wainwright. Eighty people attended the event this year where “Minute to Win It” was the theme. Everyone had a wonderful time. A BIG thanks to all the staff at WFG (LLA) and everyone else who helped organize this event. Great work!


The Alberta Broker June - July 2012

Agreement, and a number of other issues have always been focused on the good of the consumer as well as the Insu ra nc e brok er, co good of the nsum er advocate, com mun it broker. That y su pporter, perspective busi ness person, vo ter. .. strengthens our arguments to maintain legislation and regulation comment on issues that come to the that prevent credit unions and banks forefront in the legislature. from retailing insurance products. The IBAA website contains provincial You may be thinking, “What can I and federal lobby kits that outline the do?” Well, the answer is simple. Get out issues facing brokers today, IBAA’s there and meet your local representaposition on those issues, and descriptive. Politicians are just people. As a tions of how to arrange a meeting with constituent, you have a right, perhaps your MLA. The lobby toolkit contains a even an obligation, to meet them and number of tips and advice on having an tell them about your concerns, hopes effective and memorable meeting. You and thoughts. Such interaction is really can access the IBAA Provincial a win-win scenario for the politicians. Advocacy Toolkit while logged into They get to know their constituent under the “Advocacy” tab — a voter — and they become better in the top toolbar. Then look under informed to make decisions and

Who? What ? Where ? When? • Brokerlink purchased the personal lines book from Lloyd Sadd Insurance. • Johnson Insurance purchased JB Insurance in Grande Prairie. • As I mentioned earlier, congratulations once again to Scott Treasure on becoming the 2012-2013 IBAA president. • There must be something in the water at Cornerstone Insurance as they seem to be having babies left, right and centre. First off, congrats to Karim Mouait and his wife Amanda on the birth of their second daughter, Julia. Also, to Ryan Van Niejenhuis and his

wife Jennifer on their birth of triplets — yes, triplets — Emily, Caitlyn and Brooke. • Jill Bradford moved back to Grande Prairie and is now working for WFG. • Prairie Villa Insurance hired Courtney Hayes, formerly of JB Insurance, and promoted Jody Lohr to office manager.

CHRIS LEWIS Business Dev. Advisor, Peace Hills Insurance clewis@Phgic .com

“Government Relations” and “Provincial and Federal Lobby Kits.” IBAA will also be holding complimentary Politics 101 seminars around the province in the fall as another benefit to our members. This short course will outline how to meet with your MLA, effective meeting techniques, and a brief overview of what the issues are and IBAA’s position on them. Ultimately, the reason that we are a successful lobby for our industry is because of you. Please take the time to meet your representative and start building that relationship now. It makes a difference for brokers across the province.

RIKKI McBRIDE, CAIB (Hons.) Director of Operations, IB AA

The Alberta Broker June - July 2012


Know E&O David Holt

Taking the EXTRA STEPS to Assess Your Client’s Insurance Risks:

Ask questions


Courts in Canada frequently impose a duty on brokers to assess each client’s insurance needs and advise the client accordingly. A significant percentage of errors and omissions (E&O) liability claims involve allegations that a broker failed to adequately assess a client’s risks and that the client ended up with a liability claim for which it had no insurance coverage. While claims alleging failure to assess risks can arise out of requests for a variety of types of insurance policies, a large number involve commercial general liability (CGL) policies. While they provide a broad range of liability coverages for businesses, CGL policies do not cover everything. Consequently, if a client comes to a broker asking for CGL coverage, the broker should request information about the client’s business in order to identify and assess the client’s risks. Without question, some useful information about the client will be provided in response to the CGL insurer’s application form, but no ‘generic’ questionnaire can take the place of an inquisitive, experienced broker who provides added value by probing further in order to identify the risks presented by each client’s unique operations. Take, for example, a prospective client who comes to a broker and asks for a


The Alberta Broker June - July 2012

CGL policy for his restaurant. The broker has his CSR prepare an application and gets bids. The client then purchases a CGL policy through the broker. If the client is later sued for a slip and fall in the restaurant, the CGL policy would very likely provide a defence and indemnity to the restaurant, and the client will, presumably, be pleased with the broker’s work. But what if the CGL carrier denies coverage on the basis that the allegations of the suit are outside the scope of its CGL policy? The client may then assert a claim against the broker on the grounds that he did not recognize that the restaurant had risks not addressed by the CGL policy, and therefore failed to advise the client that additional coverage should be considered. Assume, for instance, that the restaurant offered a service by which clients could call in a food order that the restaurant would then deliver. One evening, while making a delivery, an employee runs a red light and strikes another car causing serious injuries to the driver and passengers in the other car. The injured parties sue the employee for their personal injuries, but his personal auto insurance limits are insufficient to satisfy their claims. They also sue the restaurant, but the CGL carrier denies coverage on the basis that claims arising out of use of automo-

biles are excluded by the policy. The restaurant then sues the broker alleging that he should have identified the risk presented by the restaurant’s delivery service and recommended owned and non-owned business auto coverage. A similar illustration: assume the restaurant uses a heating oil tank that leaks and runs into a neighbouring building’s basement, causing significant property damage. Most CGL policies exclude bodily injury or property damage caused by the release or discharge of pollutants from the policyholder’s premises, so it is likely the CGL carrier would deny coverage when the neighbour seeks recovery from the restaurant. In turn, the restaurant would likely sue the broker for not identifying the pollution risk and recommending pollution coverage. Granted, a broker hopes that his client will volunteer sufficient information to allow the broker to identify insurance needs, but the best way to be sure is to ask the right questions. In addition to seeking and recording accurate, complete responses on the CGL insurance application(s) and asking about standard risks for the client’s type of business (e.g., does the restaurant serve alcohol and thus need liquor liability coverage?), it is a good idea to: • Ask open-ended questions about the client’s business. • Visit the business, if possible. • Look at a client’s website and other marketing materials. • Obtain valuable documentation such as prior policies. Once the broker has assessed the client’s insurance risks, they can then recommend insurance to address those risks. As a practical matter, some clients will decline insurance recommendations because they simply do not want to pay the premiums, while others believe the risk is too low to justify the cost. Clients are entitled to make those decisions about their business, but it is a good idea for the broker to document in writing both the recommendation made to the client and the client’s

declination. If there is an uncovered loss and the broker is sued, arguing that the broker did not recommend coverage to address the risk because he was certain the client would decline due to cost is not an ideal defence. Even if the broker is right about what the client would have done, proving that proposition with no documentation is difficult, at best. Consider the example discussed earlier of the restaurant delivery car that was involved in an accident for which the restaurant had no coverage under its CGL policy. The outcome of the restaurant’s claim against the broker for not identifying that risk and recommending business auto coverage would turn on the evidence in the case. If the broker could show that he or she had identified the restaurant’s delivery service risk and recommended owned and non-owned business auto coverage, and can produce credible proof that the client had declined the recommendation, the broker would almost certainly prevail. Of course, if the broker offers only his word that he made the recommendation, which the client denies while saying she would gladly have purchased the coverage, the judge would be left with having to decide who to believe. On the other hand, written proof of both the recommendation and the rejection will make it easier for the judge to decide the case in the broker’s favour, and could even persuade the client’s attorney not to pursue the case in the first place! Of course, in addition to protecting against a possible E&O claim, identifying the client’s insurance risks and recommending coverage is good business. Imagine the reaction of the restaurant client if the broker had identified the risk and persuaded her to buy business auto coverage that responded to the auto accident when the restaurant was sued. The broker would likely have won that client for life and received elated recommendations of his work. So try to take that extra step when assessing

your client’s insurance risks, make your recommendations for coverage based on that assessment and document your recommendations and the client’s decisions.

DAVID HOLT Claims Expert/ Vice President Swiss Re Corporate Solutions

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 Alberta Broker June - July 2012



IBAA Convention Photo Stan Foster

ield Murray Hatf

Murray Hatfield

Glenn White

Entertainment &Speakers Jared Smith

Karen Rutherford

CEO Panel


The Alberta Broker June - July 2012

Gallery – May 6-9, Calgary The Parties

Photos by Tracy Grabowski

Peace Hills Party, President’s Ball, Hospitality Night

The Alberta Broker June - July 2012



IBAA Convention Photo The Trade Show



The Alberta Broker June - July 2012

Gallery – May 6-9, Calgary Photos by Tracy Grabowski

The Alberta Broker June - July 2012





Brokers are losing market share. What are you going to do about it? 24

By Karen Rutherford The Alberta Broker June - July 2012

Well that’s a catchy title, isn’t it? While some may deem it overly dramatic, it makes the point that it’s never been more important to demonstrate (i.e., show AND tell) your value proposition to your clients and prospects. Do you look and sound the same as everyone else? Do you do the same exact things as your competitors? How are you standing out in the crowd, especially against those with much larger budgets? Brokers, especially brokers with small commercial and personal lines as the bulk of their business, are facing great challenges from banks and direct writers. I guess they always have, but as recent research shows, the numbers really tell the tale. Personal Lines written by direct writers in 1990: 22% Personal Lines written by direct writers in 2011: 31% Direct writers’ growth has been consistent year over year and many brokers haven’t realized the true impact on the Canadian market place. Direct writers have used their size to bring attention to all things they do. Everyone is familiar with Flo and Progressive Insurance and the “pick your price” advertising. Flo will build an insurance product that the consumer gets to price. Consumers everywhere think that is a great idea. Too bad independent brokers can’t do the same. Oh wait, they can and do … but how would the general public know? You all recognize that Progressive Insurance is just allowing the client to alter the price with a higher deductible or lesser coverage. All brokers do that, but few have a cool way to show the client what they do. Far too often the only message brokers send to the consumer is one to which they have given very little thought. The most common message is “We provide great service and we have been in business 40 years.” This message does not differentiate you or build you any credibility with clients because everyone says the same thing.

Brokers often think they have said everything they need to when they say they provide great customer service. Unfortunately, this language has no real meaning to the public. So, what is a broker to do? Differentiate! Tell the public what makes you better than a direct writer. Many brokers I know really do provide a better level of service, but most don’t tell the story very well. Recently, one direct writer I worked with guaranteed to return an email or voice mail within 48 hours. That is really awful service if you have a problem that needs attention within the hour. Would you make your client wait 48 hours? Of course not. But do you have clear service standards in writing to share with your clients? Have you created a comparison chart about your response time versus that of the direct writers? Lots of brokers still represent more than one market, but do they always showcase that for their clients? Sadly, far too many brokers only present the cheapest quote to their clients, failing to tell the story that they really did check the marketplace, consider the wording and then make a recommendation. You need to show your clients you are different by providing the details of the work you do for them in an engaging and accurate way. Brokers often think they have said everything they need to when they say they provide great customer service. Unfortunately, this language has no real meaning to the public. If you have great service, then find a way to write concrete examples so that your clients and your future clients can understand exactly what you mean. If you can issue pink cards in 60 minutes, say so. If you actually do renewal reviews, say so. If you provide claims assistance, say so and give a great example with a testimonial. Another way brokers can differentiate from direct writers is often in the claims process. Virtually every broker

has gone to bat for a client, helped sort out a messy claim, and worked with difficult adjusters and clients to find a solution, right? But are their nice testimonials in your promotional material confirming this? Is it on your comparison chart? You are local, your clients can come in and see you, and they can find a human being to work with. Check with people who have had a claims problem with an anonymous body on the other end of a tollfree number. Then build a comparison your clients can appreciate. Brokers once were the advocate for their clients. They knew which wording was the best fit and why. I recognize that today fewer and fewer brokers feel they have the time to service their clients because the work they do for insurance companies takes up more and more of every day. Many brokers have thrown in the towel on service and just quote and input to company portals and hope for the best. These are the most vulnerable brokers to the ever advancing efforts of direct writers. Commercial lines clients still need support and advice. If you are one of the brokers who can actually talk to clients about their operations, truly understand their exposures and build a solution right for the client, then you really need to find a way to show your clients what you are doing for them. Create premium comparison worksheets. Create and show your client the checklist of coverages you considered on their behalf. Tell your clients why you include companies that are the best, not just the cheapest for them. I find The Cooperators Insurance ads particularly offensive. “We are the

continued on page 26

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continued from page 25

not only do that, but offer them a wide variety of enhancements such as an umbrella policy, or legal expense insurance or outbreak coverage? Differentiating yourself is critical at the local

only company that puts our client’s needs ahead of profits.” Frankly, I can’t believe the CRTC hasn’t received complaints about this ad — I wonder how their shareholders feel? “Many brokers have thrown in the However, the towel on service and just quote and message that they are input to company portals and hope doing a better job because they don’t care for the best. These are the most about profit needs a vulnerable brokers to the counter-point from you. What is your message? ever-advancing efforts of The other offensive ad direct writers.” The Cooperators runs is the one about “we are the only ones level because the bigger the competiwho care enough to create community tion, the more money they have to guard.” Really? The commercial says throw at an advertising program and they are the only one clients are impressionable. If you wonwho created a product for non-profits der if national advertising works, Flo and charities! Can’t just about every gets marriage proposals, has a fan base broker in this province create the same in social media and is regularly written package — D&O for non-profits plus about in business journals, newspapers liability coverage? Of course brokers and magazine articles. can, but would the folks in your town Brokers live and work in virtually know? Do you tell them how you can every community in the province.


The Alberta Broker June - July 2012

Their contributions to community life are enormous. It is your job to be sure your community recognizes the difference you make. Independent brokers provide local employment, contribute to local charities, support local causes and businesses, coach minor hockey AND provide insurance services. Progressive Insurance or other direct writers haven’t spent a dime in your local restaurant or bought a hockey jersey for a single kid in your town. Direct writers and banks can’t compete in the same way. So make sure your messaging, your marketing, your office, your documents and materials reflect the role you play for your community and your clients.

KAREN RUTHERFORD International Accelerated Learning

The Alberta Broker June - July 2012



Shelley L. Miller and Terry J. Williams

Deductive Reasoning Court Rules on Whether Brokerage Can Deduct Commissions on Unpaid Premiums from Producer’s Earnings A recent Ontario case considered whether an insurance brokerage was entitled to deduct unpaid premiums on policies sold by the producer for which the brokerage had advanced the premium to the insurer from a producer’s earnings. The brokerage, Dan Lawrie Insurance Brokers Ltd. (“DLIB”), has a transportation unit within its commercial line which deals with insurance for owner/operator trucks and for fleet owners of trucks. The role of a producer is to prospect for business, call on potential clients, determine the client’s needs, find solutions and obtain quotes from insurers. Premiums, net of commission, are paid to the insurer. Ten percent of the premium for truck insurance is retained by the brokerage. The producer who sold the policy is paid a portion of that ten percent in accordance with the terms of DLIB’s contract with the individual producer. DLIB’s policy is to require a down payment on the premium from the client in every case. Some clients pay the full premium up front while others negotiate payment plans. DLIB advances the premium to the insurers when the client does not pay the full premium up front and often uses a finance company to finance the premium payment to the insurer. When the premium is not subsequently paid by the client, the insurance coverage is cancelled. Dan Lawrie (“Lawrie”), DLIB’s president and CEO, testified that it was DLIB policy to charge unpaid premiums to the producer if DLIB had advanced the premium and the receivable from the client was more than 60 days old. In January 2004, DLIB hired Monica White (“White”) as a producer to help build DLIB’s trucking insurance portfolio. White had previously been a 13year employee of Baird MacGregor, a competing brokerage. She testified that


The Alberta Broker June - July 2012

her earnings at Baird MacGregor had been about $90,000 per year comprised of $60,000 salary and $30,000 in commissions. On January 19, 2004, White signed a written Producer’s Agreement. However, the matter of compensation was agreed upon orally as comprising salary plus draws against anticipated earned commissions as follows: Year 1 Year 2 Year 3

Salary $24,000 $12,000 No salary

Draw $36,000 $48,000 $60,000

During the salary negotiations Lawrie made a handwritten note in which he wrote the word “validation” next to the Year 1, Year 2 and Year 3 commission amounts. He explained that “validation” meant that under the Producer’s Agreement, White was to cover the unpaid premiums. However, he did not testify that he discussed the significance of the term “validation” with White. White eventually resigned from DLIB effective January 26, 2007, and was hired by a competing brokerage called Hargraft Schofield LP. At least 14 former clients of DLIB transferred their business to Hargraft Schofield LP shortly after White joined that firm on February 1, 2007. DLIB sued White for the commission payments received by her as a result of DLIB’s former clients transferring their business to Hargraft Schofield LP. DLIB’s claim was based in part on a “Non-interference” clause in the Producer’s Agreement under which following termination DLIB could elect to pay the producer deferred compensation based on a percentage of the value of the producer’s book of business. However, if DLIB elected to

do so, the producer was prohibited from accepting any insurance business from any customers which formed part of the producer’s book of business. The producer was further prohibited from accepting any commission as a result of the insurance business of such customer being accepted by anyone else. White then counterclaimed for the amounts DLIB had charged to her account for unpaid premiums. In defending White’s counterclaim, DLIB relied upon paragraph 5 of the Producer’s Agreement which was entitled “Administration” to shift the risk of unpaid premiums to the individual broker. It purported to do so by incorporation by reference of “any and all administrative procedures and underwriting requirements as given verbally or as set out in writing from time to time by the Company.” However, the trial judge found that “Administration,” “administrative procedures” and “underwriting requirements” were not defined terms in the Producer’s Agreement, nor was

their meaning self-evident. Instead, they were open-ended terms which could potentially permit unilateral amendment of a fundamental term of the contract. The trial judge further held that because the Producer’s Agreement was prepared by DLIB, it should be interpreted contra proferentem. This legal principle holds that, if a provision in a contract is ambiguous it should be interpreted against the interests of the person who drafted the contract. For her part, White testified that it was never her understanding that she would have to pay a client’s unpaid premiums and that she had never heard of such a practice in the industry. The first charge back occurred in October 2004. White objected frequently to Lawrie and on one occasion in 2005 tendered her resignation over this issue. DLIB argued that White had condoned the practice of charging back unpaid premiums to the producers by not resigning. The trial judge found that Lawrie had persuaded her to stay

on with assurances that assistance in collecting premiums would be provided, while insisting that deduction of unpaid premiums was the way things were done at DLIB. The trial judge found that White had not condoned the practice of charging back the unpaid premiums. White ultimately did resign. In the interim, she tried to make the best of the unilaterally-imposed alteration in her compensation, based on assurances that assistance would be provided in collecting unpaid premiums. The trial judge held that DLIB took advantage of its superior bargaining position and that the imposition of the charge back policy amounted to a

breach of contract by DLIB. DLIB was, therefore, required to reimburse White $42,281.03 for the unpaid premiums charged to her account. With respect to DLIB’s claim against White, the trial judge found that although White had not solicited DLIB’s former clients, she had received commissions as a result of former DLIB clients transferring their business to Hargraft Schofield LP. White had received a twenty-five percent share of the ten percent commission received by Hargraft Schofield LP. The trial judge, therefore, ordered White to disgorge those commissions in the amount of $34,289.50 to DLIB.

SHELLEY L. MILLER, Q.C. and TERRY J. WILLIAMS are lawyers with Fraser Milner Casgrain LLP and practice in the professional liability insurance area.

The Alberta Broker June - July 2012


Viewpoint Dale Rempel

Busy Times at IBAC Spring has been a very busy time on the government relations front for IBAC. Your national association continues to be in constant contact with the federal government in Ottawa on a wide range of issues. Here is a little update on developments that have taken place over the past few months. At the end of March, Parliament passed Bill S-5, which is the financial institutions package. This bill contains the five-year mandatory review of the Bank Act. As usual, the banks have been asking the government to amend the act to give them more powers into insurance. Through consistent advocacy and outreach, IBAC has been able to make the case that allowing the banks the ability to promote and retail insurance in their branches would not be in the best interest of Canadian consumers. Legislators agreed, and the current restrictions were maintained. The next review will take place in 2016-17. The Minister of Finance introduced the federal budget, Bill C-38, in the House of Commons at the end of March. Of note to the insurance sector is the reaffirmation that the government will introduce legislation that would clarify the definition of an insurance annuity in order to make it clear that banks are not allowed to promote or retail these products in their branches. This is a result of BMO selling an “annuity-like” product from their branches last year. In addition, the budget bill also included a preamble of the Bank Act, which clarified the intent that all banking activities must fall under one jurisdiction: the federal regime. The bank website regulations came into force March 1st of this year. The banks had six months to comply with the regulations published in October 2011. IBAC has been diligently monitoring bank websites since the date of implementation and we have noticed that several banks are not in compli-


The Alberta Broker June - July 2012

ance with these regulations. As a result, IBAC has filed a complaint about this non-compliance with the federal regulator, the Office of the Superintendent of Financial Institutions (OSFI). In addition, we have had discussions with the Department of Finance about this issue, and they are aware of our position. IBAC is also closely monitoring developments related to the govern-

ment’s intent to draft a regime for P&C mutual insurers to demutualize. This is an on-going effort. IBAC, along with Toronto Insurance Conference, continues to be engaged with the Canadian Revenue Agency and the Department of Finance on several Excise Tax Act issues. Of note are the application of an excise tax on a premium where there is more than one

Did You Know... There were 20,129 new vehicle sales in Alberta in February 2012? If all of those people chose to write their new vehicles with a member broker that would mean on average 58 new auto policies in February alone per brokerage!

The IBAA convention will be located in the Rocky Mountains for the next three years?

Yes, it is true! You will have three consecutive years enjoying convention in different mountain destinations. Banff 2013 here we come!

The most frequently stolen vehicle in Canada is a 2009 Toyota Venza?

Six of the top ten most frequently stolen vehicles are cars, two are pickup trucks and two are SUVs.There were no minivans on the top ten list.Thieves seem to prefer vehicles that don’t shout “family” — go figure.

Google logs over 1 billion unique visitors per month?

What are you doing to get noticed on the web by one of those 1 billion people?

IBAA is putting on a complimentary Politics 101 seminar in the fall?

After incredible feedback on the complimentary Legislative Changes 2012 seminar, the professional development team will be offering complimentary Politics 101 seminars in all 9 local councils in the fall. Keep your eyes peeled for the upcoming dates. Information sources from Alberta Finance, AIRB, IBAA, Google, IBC and Statistics Canada

broker involved in the placement of a policy and an excise tax that is applicable for non-licensed insurers placing a policy in Canada. These discussions continue. Once again, IBAC is holding its Parliament Hill Day in Ottawa in June. There wasn’t one in 2011 due to the election being called. This is the premier advocacy event of the year where brokers from across all parts of the country have an opportunity to meet with their legislators and discuss legislative matters dealing with the insurance sector. The year on the advocacy and government relations front continues to be busy indeed.

DALE REMPEL President, Insurance Brokers Association of Canada drempel@ibac .ca

The Alberta Broker June - July 2012


Who? What? Where? Darrell Verbonac

Broker News On the broker side, there have been a number of changes, both in personnel and office moves around the southern part of the province. In news from Calgary, a new broker is now on the scene as Charlene Gouthro and Harvey Kunz purchased the book of business from Clarke Insurance and are now operating under the name of Gold Star Insurance. As reported in the last issue of The Alberta Broker, Westland Insurance out of British Columbia, which already owned Ashford Insurance, purchased Palliser Insurance. Westland has now moved the Ashford operation into Palliser’s premises and is operating under the name of Palliser. Lynn Butters, who was with Ashford, is the new manager for the combined operation. John White, who was a partner in Palliser, retired. Costen and Associates, which purchased Glenmore Insurance, closed the former Glenmore office off of Macleod Trail and moved all the operations into Costen’s Kensington Road NW location. As part of the change, former Glenmore owner Karen Sandeman, moved to the Costen office. In staffing moves … • Karen Peterson moved from Young & Haggis Insurance to MHK Insurance • Kasandra Klassen moved from Blue Circle Insurance to Heritage Benefit Planners • Anna Marie Piccone is new at BKI Risk Management, having left Rogers Insurance • Tam Kuria and Mike Alarie joined Marsh Canada from Aon


The Alberta Broker June - July 2012

• Two Calgary brokers left the city and headed a bit south – Ian McFarland left Church Eaton for McFarlane Agencies in Okotoks and Chris Sharp left Renfrew Insurance to join Western Financial Group in its head office commercial marketing division • Chad Schmiedge left Unigroup Western Insurance Brokers to join HUB International • Alex Husain moved from HB Group to Rogers Insurance • Over at Lloyd Sadd, Mark Shaul who had been with Marsh Canada has come on board, and congratulations go to Paul Constance and his wife on the arrival of a new son, Luke. New brokerage staff include: • John Martin at BFL Canada • Alison Dixon at Dalton Timmis Insurance • Tracy Stewart at The Insurance Place • Bryan Pitchko at Renfrew Insurance • Dawn Rankin at Action Insurance • Fardin Ahmed at Sharp Insurance Congratulations & Best Wishes • Doug Lyall was appointed to vice president of product development and supplier relations. Doug was the office manager of WFG’s Olds office before making this move to its head office. Doug gets a second set of congratulations for his marriage to Carmen Cloutier, who previously worked for HUB Phoenix in Red Deer. • Best wishes go to long time veteran of the insurance industry Cheryl Tyson, who retired from Renfrew Insurance and moved down to Costa Rica.

• Rogers Insurance was selected by Alberta Venture magazine as the Best Workplace for Organizations of 101 to 750 Employees in Alberta. • John and Ellen Lee and the staff of AGM Insurance on the celebration of their 10th Anniversary on March 1st. John and Ellen hosted a very nice celebratory luncheon with many customers, underwriters and competitors in attendance. • Up in Red Deer, Harley Shoemaker took over the reins as president at Platinum Insurance as Lee Sherback left the organization to join Lloyd Sadd. • Congratulations go to Ing & McKee’s Sandy Vogt on becoming a grandmother, with the birth of a grandson Dre Willy Vogt. •Another long time friend, Pam McDonagh, retired from Western Financial Group’s Red Deer office. Pam bought a new truck and trailer and has plans for touring around Alberta. • Down in Lethbridge, Lundgren & Young opened an office, which is being staffed by Chad Leniuk, who moved down from L&Y’s Calgary office. In Sympathy Sadly, Don Walker of A-WIN Insurance passed away March 25th at the age of 57 years after a battle with cancer. Don was one of the good guys, and spent almost 30 years in the insurance industry. Condolences go to his wife, and co-worker at A-WIN, Debi.

Company News • New staff at Intact Insurance includes Nina Stokoe, Trent Meyers who was with Marsh Canada and John Barry who is the new head of surety having moved to Calgary from Detroit, Michigan. • Best wishes go to claims vice president Denise Lang who retired after 27 years of service at Intact. • Mike Bertochhi left Ecclesiastical Insurance to join Aviva. • Neil Thomas is new at Travellers. • Fitri Hadiwardojo joined Sovereign General. • Long time RSA employee Ted Williams retired after 30 plus years with the company. Although based out of Saskatoon, Ted spent a number of years travelling east central Alberta as a Marketing Rep. Industry Elected Congratulations to two insurance industry people who were recently elected to the Alberta legislature. Ken

Hughes, one of the owners of Alpine Insurance, was elected in south-west Calgary, and Rod Fox of IFS Financing was elected in Lacombe. As a member of the PC party, Ken was also appointed to the cabinet as Energy Minister by Premier Alison Redford. Rod, as a member of the Wildrose Party, was appointed to the opposition’s shadow cabinet as Critic for Service Alberta by leader Danielle Smith. Convention Wrap The IBAA annual convention was held May 6-9 at Calgary’s Hyatt Regency Hotel. Although there was the usual carousing, I don’t know of too many far out things having gone on (or the bribes were hefty enough this year; I’ll leave you to wonder). Special shout outs go out to Dave Wright of Lucas & Wright Insurance and Rob Young of Young & Haggis Insurance for their assistance of magician Murray Hatfield at the Tuesday lunch. Not to be outdone, Sharon Cronin Roussel

of SMI Insurance joined Murray on stage to do some magic as well. Barry Haggis of Young & Haggis earned the nickname of Loud Guy, but this was pretty innocent, and actually was a term of endearment bestowed on him by one of the speakers. Congratulations to incoming IBAA president Scott Treasure. At the president’s ball, Scott delivered a heartwarming speech honouring his father Randy Treasure, who passed away in 2011. Lastly, thanks go to Bryce Dzenick of Crawford & Company Adjusters of Edmonton for his efforts to once again organize the golf tournament, raising $1440 for WICC.

DARRELL VERBONAC, FCIP, CRM Regional Business Development Manager Intact Insurance Company

The Alberta Broker June - July 2012


PYIB Perspective Steve Evanson As incoming president of Professional Young Insurance Brokers (PYIB), I feel a duty to write to you regarding a very important subject, one that could have consequences for all of us and the people we serve if we do not pay adequate attention. I write to represent the views of our association, but also, due to the extreme importance of this issue, I write as a fellow young broker myself. Part of the PYIB’s mission statement states that “we exist to create a strong professional network through political action … we will create a solid foundation for success and perpetuation of the broker profession.” It is that “political action” or involvement that I want to address. Voter turn-out statistics continually demonstrate that the younger generations are under-represented at the polls, leaving the impression that politicians and legislators are focused primarily on the issues that matter to older voters; my experience has been the opposite. In the many meetings and functions in which I’ve participated, I have witnessed the keen interest that our policymakers and elected officials take in the views of their younger constituents and the importance they give to the issues that matter to them, especially when adequate time has been taken to explain these issues. The political establishment is interested in the views of young professionals, and we need to realize that our voice will be respected and listened to. Because of that, our voice has power and we are therefore duty-bound to act on that strength and ensure our voices are heard. The old adage we heard from our mothers growing up comes to mind when I think of the strength of our voice, that we must indeed “use it or lose it.” Insurance Brokers Association of Alberta (IBAA), of which the PYIB is a standing committee, was created 90 years ago to be the common voice of everyday insurance brokers in their efforts to promote industry professionalism and protect the public against the threats to their insurance options, which would arise from the monopolistic practices of banks selling insurance. Has this raison-d’être changed? Has the purpose for our association’s original


The Alberta Broker June - July 2012

founding been achieved? No. It is amazing to know that we are still engaged in the same battle on behalf of the public and the insurance industry as we were 90 years ago. I believe that we must be more vigilant in our efforts to preserve the broker profession for the public who want to continue to have the insurance options and flexibility our profession provides. Financial institutions are only increasing their lobbying efforts to bring about change in the legislation, to allow the retailing of insurance directly out of their branches, and thereby be able to control the industry and the insurance options available to the public. As I write this article, it is Election Day here in Alberta and a slew of new MLAs from both the governing and opposing parties have been voted into office. This presents to us the unique challenge of having many new members of the provincial legislature who may not be well-acquainted with our industry. It is also a wonderful opportunity for us to go out and introduce ourselves to these new MLAs and familiarize them with these important issues, how they affect the public and the concerns we have for the future of the insurance industry.

IBAA is a great resource to us in our efforts to do this. They have created a package which lays out our association’s stance on the issues that face the insurance broker in a way that is easy to understand and retain. I personally have benefited from utilizing this resource when discussing these important issues with those that need to know. Politicians are not experts in our field. We are. We need to portray that expertise when talking with them. This package will assist us in demonstrating that expertise. I urge every broker, especially our young brokers like me, to download this specially designed IBAA Provincial Advocacy Toolkit from the IBAA website to use as a resource. Study it. Know it. The message it contains is the very heart of why we exist as an association. To further assist us in this important responsibility, IBAA is also coming out with a Politics 101 course slated for this fall, which will further benefit us in learning to utilize the strength of our voice better. I encourage all of our young brokers to participate in this course and take advantage of this additional resource. In order to realize the accomplishment of our mission statement, the PYIB has divided into committees that focus our efforts on different parts of the mission statement; I foresee the political committee becoming one of our most valuable entities. We also want to ensure that a young broker is participating at all IBAA functions and meetings. Whether serving on a PYIB committee or participating in an IBAA event, we need young brokers who are willing to stand up and participate. This is an official call to all young brokers who may receive a phone call to attend one of these meetings or functions. Our association, your profession, needs your voice!


Commercial Break Karen MacWilliam

A Crime in Progress Should your clients have 3-D protection?


ost of us are quite familiar with property damage caused by crimes such as vandalism (and more recently a rash of riots) that may be insured by a commercial property policy. However, we tend to gloss over the coverage provided by the Comprehensive Crime Policy, or the 3-D policy, as it is commonly known. Those Ds are disappearance, destruction and dishonesty. There are five parts to the insuring agreement, each of which can be mixed and matched to fit the insured’s needs:

Agreement III — Loss Outside the Premises

Agreement I — Employee Dishonesty (Form A or Form B)

1. The amount of loss is often difficult to predict. Selecting a replacement value for a building is difficult enough but can be calculable in a logical manner. How much cash might get stolen?

Agreement II — Loss Inside the Premises


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Agreement IV — Money Orders and Counterfeit Paper Agreement V — Depositor’s Forgery In my experience, many clients do not envision that they will suffer such losses and tend to minimize the importance of crime insurance. Here are my thoughts on some key points associated with this coverage:

2. Losses may be undiscovered or discovered only after a significant period of time. When I worked for the City of Edmonton in the 1990s, the city sustained an employee dishonesty loss that occurred over more than 12 years and which involved the theft of coins only. The total loss was in excess of $2 million. We didn’t even have loonies and toonies then! 3. Most insureds have a limit that should be their deductible. A good minimum limit is 1% of the organization’s annual budget or total assets. For example, an organization with annual sales of $10 million should have a MINIMUM limit of $100,000 on Agreement I. The limits on each insuring agreement DO NOT have to be identical. 4. Many brokers sell Form A, the Commercial Blanket Bond, because it’s easy. Coverage applies to all employees for the same limit. Form B (the Blanket Position Bond) may address the risks faced by most businesses more logically, since certain positions are more or less likely to perpetrate dishonest acts. Form A limits the total amount payable in a single loss to the limit of insurance. Form B provides coverage for EACH employee involved in the loss. Neither form is BETTER, but they are DIFFERENT. Care should be taken to analyze the insured’s needs. 5. The use of plastic cards has proliferated in Canadian society. However, some insurance forms have been slow to catch up with reality. Read each insurer’s policy carefully to make sure that it addresses your client’s needs. If your clients are doing business on the internet, they may not need coverage for “money,” but may

need an “e-commerce” or “cyber risk” policy instead. Check the definitions of such things as “money” and “securities” to make sure that the wording is a good fit for your client. 6. Understand whether your client uses third parties to process transactions such as payments and payroll. It may be prudent to have written agreements outlining who is indemnifying and insuring financial losses associated with electronic transactions. 7. The policy territory may be limited to North America. A friend of mine attempted to send his son a cheque for deposit in Japan and took great pains to ensure that it was drawn on a Japanese bank. The unexpected result was a finding that the Japanese do not use cheques. Several banks perceived the depositor as insane. After much frustration, it was determined that depositing the funds in a Canadian bank account gave the recipient immediate access to the funds in Japan via ATM/debit card. Unfortunately, the cheque was certified, and it took months to replenish the funds to the well-meaning giver’s account. Many of the coverages offered under our 3-D policy may be inconsistent with global banking practices.

continuity of coverage and reporting of losses. Make sure the client understands these. 9. Many insurers will require detailed information about banking practices, cash on hand and cash management procedures. Clients need to provide full disclosure. 10. Most crime insurance forms do require the insured to notify the police following a loss and prosecute the employee in the case of internal theft. Most business owners hope that an internal fraudster will go off quietly into the night. Insurers will require the cooperation of the policyholder

and may arrange for such things as a Mareva Injunction, which precludes the suspected fraudster of disposing of assets. This may mean that the organization’s loss is held up to public scrutiny. The 3-D policy is part of a comprehensive insurance program. Not offering it to your client is a real crime.

KAREN MacWILLIAM is an insurance and risk management consultant

8. The 3-D policy has different conditions than most insurance with respect to the discovery period,

The Alberta Broker June - July 2012


Professional Development Lori Bartlett


ime to Think About Fall

As we turn the corner into summer, I am quite certain most of you are not thinking about the fall and your license renewal just yet. Like me, you are probably daydreaming of those fun outdoor activities like boating, quading, fishing, camping and BBQs, maybe being bugged by those ever-pesky mosquitoes . . . Oh, wait — sorry, back to reality. The professional development team at your association has plans for you. We are finalizing the last details before the fall rush for those last-minute CE hours.

Stay Tuned for More Info

In the next few weeks, you will receive information on upcoming programs for our fall 2012 session. I strongly encourage all members to lay out their professional development plans early to reduce or eliminate panic about earning enough CE hours for your license renewal. Early planning and registration will also secure your spot in that course that will step up your career. Did you know that the spring Getting Started in Commercial Lines sold out and, as I write this article in April, members are already registering for the fall session?


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The October license renewal deadline will be here before you know it. Plan now to get education you want and need. As always, our curriculum contains many seminars and webinars specifically designed to meet the needs of the Alberta broker.

CAIB Your Way

We continue to run the CAIB (Canadian Accredited Insurance Broker) program in a number of formats. For self-motivated individuals who like to work at their own pace, we have selfstudy. If these terms describe you but you also enjoy peer input and a facilitator to lead the group, perhaps group discussion would suit you better. For those who just want to get it done, immersion is what you should consider. This program runs over five days with the exam on the sixth day. This fall, we are pleased to test a new CAIB delivery method in the Calgary area: Fast Track. Students will attend four full-day Saturday sessions just before the national exam in December.

Aim for Excellence

Another new objective this fall is to offer CPIB (Canadian Professional Insurance Broker) courses in a discussion group format. We are currently looking for individuals to facilitate this

course for our members. The CPIB program is a senior designation designed to promote excellence in property and casualty insurance brokers. CPIB is a university-level of study with the admission prerequisites of either the CAIB or CIP designations. This program is offered in three streams: Personal Lines, Commercial Lines and Broker Management. Along with our designation programs, we offer outstanding certificate courses including Customer Service for the Insurance Professional (CSIP) and Profesional Selling for the Insurance Broker (PSIB), which I had the pleasure of taking in April along with some very dynamic brokers in our province. Once again, Glenn White facilitated this program and will do so in Edmonton in the fall.

Education a Click Away

Online programs continue to be a viable choice for brokers who are looking to minimize costs and obtain CE hours without having to leave the office or arrange schedules to accommodate a group. We would love to travel to every community in Alberta with our seminars, but such travel is not feasible so we continue to grow our online of-

ferings. The vast online offerings in our Captus, VuBiz and VOLT programs have something to meet every broker’s needs. The prices range from $19 a course to $200 for packaged courses. The online methods range from exambased credits common to most programs to attendance-based videos with no exam in the VOLT courses. Why not rely on your association as the one place to go to acquire your CE hours? Utilize the options for career growth available through your association to keep membership costs down and obtain broker-specific quality education.

• Property • CGL (Incl. Truckers) • Cargo • COC • Umbrella/Excess • Fine Arts • Product Recall • Cross Border

• Auto Physical Damage (Incl. Logging) • Special Events • CEF • Aviation • High Value Homes • E&O • D&O

WHOLESALE BROKER FOR BROKERS Tel: 780.442.2240 • Toll Free: 1.866.328.1314 E:

Political Interest

As always at IBAA, we will offer a seminar in each local council area. With the elections over and some new faces in our government, it is imperative that our members get out and meet their MLAs. Since many may find meeting an MLA to be intimidating, we have created a new seminar: Politics 101. This seminar will outline big-picture issues such as what to expect as well as details such as how to address your MLAs and ministers properly. It will give you a clear understanding of the political issues that affect you as a broker and business owner and how to advocate for your best interests. After almost one full year as the director of professional development, I look to the past and the future. While our team has accomplished much this year, we still have a ways to go. I believe that focus on the needs of our members and building our relationships will enable us to accomplish some amazing things over the next year.

LORI BARTLETT Director of Education, IB AA The Alberta Broker June - July 2012


Start Talking Boost Your Business by Speaking at Service Clubs

By Patricia Fripp, CSP, CPAE Are you looking for an inexpensive way to promote your business? Have you ever wondered what a higher visibility in your community could do to increase business? Have you ever listened to a speaker at a service club and thought, “I could do better than that!” You can! Brenda was a successful men’s hairstylist in San Francisco’s financial district. At the encouragement of her mentor, she attended the Dale Carnegie Public Speaking course and then became a Toastmaster. The hair product company she was affiliated with hired her to deliver seminars for other stylists who carried its product line. Conversations with her executive clients about her weekend speaking activities led to invitations to speak at their Rotary, Kiwanis and breakfast clubs. They knew her bubbly personality and prior experiences with other groups would lead to an interesting program. When she exceeded their expectations, the executives recommended her customer service talks to their companies for staff meetings. What Brenda was delighted to discover was that speaking for groups in her community was a very effective way to help build her business.

Why Should You Give Free Talks?

Service clubs do not pay a fee. However, you are paid in a currency that is far more valuable: visibility and access to new contacts who are part of your local community where you do business. As Brenda told one of her salon owner friends, “Rod, clients who drive 80 miles for you to cut their hair feed your ego. Clients who walk or drive to you in a 15-minute radius feed your family.” Talking about your business, charity


The Alberta Broker June - July 2012

or major passion is exciting, fun and provides great visibility. Your first talks to local service organizations like Rotary, Kinsmen and Lion’s Clubs lead to many more invitations. Remember, every service club is looking for a free speaker for next Thursday! Al was one of Brenda’s loyal hairstyling clients and recommended her to speak at the Golden Gate Breakfast Club. At the time, all the members were men and good prospects for her salon. Brenda was excited to discover that the same day she addressed them, three members of the audience made lunchtime appointments in her salon. Even though your business may be in insurance, advertising specialties or printing, an effective speech will bring you recognition and eventual business. Even if you talk about your hobbies, interests or charity of choice, your introduction will mention your business. You will be networking and meeting new local business professionals.

What Should You Talk About?

What do you know that other people want to know about? What do

you know that other people should know? What are the questions people ask you most often about your business, industry, or even hobby or interests? Speaking at a service club or any local group is an excellent starting point for promoting your product or service. But remember, no one is eager to listen to a sales presentation. Your goal is to be interesting, informative and even entertaining. This leads to the audience members wanting to have a conversation with you. A conversation can lead to a friendship, a client or a referral. For example, an insurance professional, who also happens to be an athlete, can talk about running an Iron Man Triathlon, what it taught him, how that relates to planning for the future and add in his expert advice or investment philosophy.

You are paid in a currency that is far more valuable. service clubs in your town or city. In most cities, the local Chamber of Commerce will be at the top of your search. Find out who the program Chairperson

is; they have a tough job and are always looking for interesting speakers. An entertaining, interesting talk on any subject that is well delivered is always very well received. You now have the opportunity to make yourself and your business more visible in your community.

continued on page 42

How Do You Get Invited to Speak?

First, develop your speech. Then, tell your friends, clients, associates and acquaintances you are available and would love the opportunity to speak to local programs. Search online for

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continued from page 41 How Do You Maximize the Experience?

Be easy to work with. Write your own short introduction, including the importance of the subject and why you are the perfect person to deliver that message. Make your bio available to them well in advance for their newsletter. As most organizations now have websites that advertise the program, also send a good photo and link to your website.

But remember, no one is eager to listen to a sales presentation. Go early to the event and make sure you meet as many people as possible. Find the visitors from other organizations and mention, “If you enjoy my presentation, please give my card to your program chair.” Have a handout or flyer. Develop a one sheet detailing your key points and information on your topic. Offer a catalogue or brochure, if appropriate. If you’ve had an article published, make copies for the audience members. Make sure whatever you offer includes your contact information. Collect business cards. If your goal is to develop business contacts, always collect business cards from the audience members. You can hold a draw for small prizes, such as a gift certificate for your business. Drive traffic to your website or blog. If your audience is interested in the subject, where can they get more information? Let them know you are available to speak for other groups. Just as you did in conversation, before you close your speech mention, “If you belong to any other organizations that would be interested in hearing a speech on this subject, feel free to pass along my card and website.” Speaking before a group of strangers may be slightly intimidating at first. Just remember, this is the beginning of


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many long-term relationships. Go on! Step up on the podium and profit from the experience!

About the Author

Patricia Fripp CSP, CPAE, is a Hall of Fame keynote speaker, executive speech coach, sales presentation skills trainer and keynote speaker on sales, memorable presentation skills and executive communication skills. To learn more about Patricia, contact her at, (415) 753-6556, twitter@PFripp or

The Alberta Broker_June-July 2012  

Official publication of Insurance Brokers Association of Alberta