July 2016 Texas Connection

the

TEXAS CONNECTION TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

JULY 2016

In This Issue 

How Do You Handle Rejections?



Using Voluntary Benefits to Help Retention



By the Numbers

PLATINUM PARTNERS

GOLD PARTNERS

BRONZE PARTNERS

Shirley Almany

……..……………....……..…

Presidents Corner …………………....….…

Ho Do You Handle Rejections? ….………...

By The Numbers ….….…………...…….…

Our Partners

Page 2 Page 3 Page 5 Page 9

Using Voluntary Benefits to Help Retention Page 11 Word Scramble …………..…………..….…

Page 18

………………………..……….…

TDI Enforcement Actions …….……..….….

The Last Word …………………………….…

Page 23

Classifieds

I hope everyone is enjoying their summer with family and friends. As you hit the road for summer vacations, trips to the lake and baseball games, I wanted to remind everyone to stay safe on the roads. Most people believe that driving is more hazardous in winter, when in fact, the summer presents more risks.

Page 24 Page 25

Tap into your inner child, grab your inner tube and let’s hit the river. It doesn’t matter where you get in. The beautiful Guadalupe River starts in Kerr County and empties into the Gulf of Mexico at Guadalupe Bay. If you’re not a floater, grab your fishing rod. The river is home to rainbow and brown trout, smallmouth, largemouth, striped and white bass, as well as rio grande cichlid.

Be aware that there are more people on roadways during the summer and numerous construction projects are underway across the state of Texas, so slow down and stay aware of warning signs. Be patient with other drivers who might be driving in unfamiliar areas. Make it a habit to check your tires more often as worn tires can be a dangerous threat for blowouts when temperatures spike. Finally, make sure you always have an emergency kit.

Safe travels.

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Shirley Page 3

Every day, agencies provide prospects and customers with proposals on coverages addressing a multitude of exposures. Some proposals are provided at the anniversary of the customer’s insurance program, while others occur during the policy year, more of a mid-term situation. While it would be nice if the customer bought coverages that were proposed, unfortunately, that is not the norm. Quite possibly, the customer does not see the need for the coverage or the premium could be an issue. Since customers will probably reject certain elements of a proposal, the degree to which the agency has documentation of the rejection is a key element in the event of an uncovered claim.

Good, but not enough Most agencies have an expectation for handling the issue of rejected coverages. Yet, this could mean that one producer at your agency handles it one way and another producer at your agency handles it differently. This potential lack of consistency can lead to problems. It is important that the agency staff recognizes that if there is an uncovered claim, it is possible that the customer will take a strong position that it was his or her understanding a specific coverage was requested, not rejected. It will now be up to the agency producer to provide some element of proof that the coverage was, in fact, rejected. (continued on page 6) THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 5

It might not be enough if your proof solely involves the documentation you have in your agency management system detailing the discussion between the agency producer and the client. While it’s better than nothing, the potential inadequacy of this approach is that the documentation in the file is your agency’s recollection of the conversation. The customer may allege that he or she had an entirely different understanding of the conversation.

One often-applied approach is for the customer to sign the proposal acknowledging which coverages he or she desired and which coverages he or she rejected. If that is your agency’s procedure, how confident are you it is being applied consistently? If there is not a notation next to a specific type of coverage (cyber insurance, for example), will the courts construe this “lack of a signature” as an indication that the coverage was requested, not rejected? Moreover, what about those situations where the proposal was not personally delivered and the rejection of coverage was provided verbally? What proof will you be able to provide? While the agency can ask the customer to send them an e-mail detailing the conversation, many agencies have become increasingly frustrated by customers’ delays in honoring these requests.

Written confirmation The suggested approach for those situations where a customer does not purchase all of the proposed or suggested coverages is to provide that customer with some element of written confirmation of his or her decision. A variety of approaches can be undertaken. A vital element is that the written confirmation should be sent electronically or delivered without delay. Losses have occurred shortly after the binding of coverage and prior to actual policies being delivered, so it is not suggested to wait until policy delivery to review what coverages were bound and which were rejected.

The essence of this approach is for the agency to confirm its understanding of the customer’s final decision, essentially requiring the customer to advise if this information was not correct. This will help heighten the agency’s desire for the customer to be accountable for his or her buying decision. (continued on page 7) THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 6

A solid defense Agents will often provide a copy of the proposal (manually or electronically) noting what was purchased and what was not. If the customer “wants to think about it,” the documentation on the proposal should note “no coverage bound at this time.” A common and effective approach is for the agency to send a “thank-you letter” to the customer that includes the necessary detail/decision on each coverage proposed. This serves two purposes: the agency is thanking the customer for the business and it memorializes the various details. Imagine if an uncovered loss occurred and the customer alleged that he or she thought coverage had been ordered. A detailed written document would provide solid defense for the agency.

While the previously mentioned scenarios involved a new business or renewal meeting, the same approach can be used when the customer makes a mid-term request for different limits or additional coverages. When the agency provides the proposal, the proposal should state that “no coverage is bound at this time” or include clear instructions detailing what is needed to put coverage into effect. If and when the customer rejects the proposed coverage, the agency should provide detailed documentation of the discussion, the decision and the date.

A duty Since it is not possible to pinpoint exactly which agency file will be the next one to have a loss, it is paramount for the agency to have standards and expectations on how the declination/rejection of coverages will be handled. Ensuring that these standards and expectations are consistently applied is equally important. This is where the auditing of files can bear tremendous benefit. While producers have a responsibility to sell, they also have a duty to ensure that the agency has a solid defense if something happens that results in errors-and-omissions litigation.

by Curtis M. Pearsall, CPCU, AIAF, CPIA President – Pearsall Associates, Inc. & Special Consultant to the Utica National Agents E&O Program THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 7

Approximately

people visit theme parks in the United States each year.

Between and , approximately children under gency rooms after suffering injuries from amusement park rides.

were taken to emer-

An additional suffered injuries on rides outside amusement parks, such as those found at local malls, restaurants, or arcades.

Children represent about one half of those injured by amusement park rides, with kids between ten and ries.

years old sustaining the most injuries of any age group -

Texas Amusement Park injuries from

to

of all reported inju-

:

Six Flags over Texas—Arlington Six Flags Fiesta Texas—San Antonio Sea World—San Antonio

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 9

An improving economy will bring sighs of relief to many employers. Unfortunately, it could also bring increased employee turnover. A strong benefits program can help you retain your valuable employees.

What factors do employees cite when they talk about leaving their jobs? Leigh Branham, an employee retention consultant, wrote in Workforce Management that only 12 percent of people exit-surveyed by the Saratoga Institute cited pay as the reason they left their employer. Of the seven “hidden” factors of why employees left, most had to do with poor job fit, poor management (i.e., lack of feedback and feeling disrespected) and lack of opportunity. Ranking Number Six after these was: “Stress or burnout issues arising from work-life imbalance, inflexibility and excess of work hours and schedules, understaffing, poor health benefits, substance abuse and work-family complications.” (continued on page 12) THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 11

Using Voluntary Benefits to Combat Employee Dissatisfaction A good benefits program can help employers reduce employee stress caused by work/life imbalance. And voluntary benefits can help employers soften the blow of changes in health benefits due to cost-cutting.

MetLife, in its annual Study of Employee Benefits Trends, found a “correlation between the number of benefits offered and the likelihood employees will stay with their company.�

The 2015 study found that the magic number was 11: with 11 or more benefits offered, employees were more loyal, more likely to recommend the company as a great place to work and expressed a higher intent to stay. On the other hand, when an employer offered fewer than five benefits, employees were less loyal, less likely to recommend the company as a great place to work, and expressed a lower intent to stay.

Employee Access to Benefits by Employer Size 1-99

100-499 500+

Medical

59%

93%

98%

Dental

31%

55%

73%

Life

40%

70%

86%

STD *

29%

46%

62%

LTD**

22%

38%

61%

Source: U.S. Bureau of Labor Statistics. National Compensation Survey, March 2014. *Short-term disability: Defined as plans that provide benefits for non-work-related illnesses or accidents on a per-disability basis, typically for a 6-month to 12month period. **Long-term disability: Defined as plans with waiting period of 3 to 6 months, or until sick leave or STD benefits end. LTD benefits generally continue until retirement or a specified age.

(continued on page 13) THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 12

The MetLife survey also found a correlation between benefits satisfaction and job satisfaction. Employees who are very satisfied with their benefits are almost four times more likely to be very satisfied with their jobs.

As the “big three benefits”—medical, dental and life insurance—become standard, employers that offer more can stand out from their competitors. Voluntary benefits allow employers to expand their benefit portfolio at no cost. Interestingly, employees want these benefits even if they have to pay for them. However, as the chart in this article illustrates, small employers are not meeting their employees’ benefit needs.

In addition to the core benefits listed in the accompanying chart, voluntary benefits include programs designed to fill the gaps in employer health plans. These include:

   

Accident, or accidental death and dismemberment (AD&D) policies, which pay benefits when an insured suffers a covered injury accident Cancer and critical illness policies, which pay benefits when an insured receives a diagnosis of cancer or other critical illness listed in the policy Hospital confinement indemnity plans, which pay a specified per diem amount when an insured is admitted to a hospital Intensive care plans, which pay a benefit for each day an insured is confined to intensive care.

Most supplemental health plans have no deductible, and many are compatible with health savings accounts. Offering these benefits can increase employee acceptance of high-deductible health plans and boost employee satisfaction with their benefits…at no cost to the employer.

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 13

Quality E&O Insurance Texas PIA offers members exclusive PIA programs with Utica, Liberty Mutual, & other quality carriers.

Get an analysis of your current coverage.

Members who switch to exclusive PIA programs say they found better coverage & price.

Marketing Assistance    

Website Design Help Search Engine Optimization Social Media Expertise Advertising… Find what works before you spend the money

Market Access Members gain access to new products & companies, as well as reduced subscription rates with top quality aggregators.

For more information go to www.piatx.org

Continuing Education CE for your entire staff:  4 hours for just being a member  Regular Local Meetings with CE  Big discounts on On-Line CE  Annual Convention: 2 days of CE

Business Building Tools PIA Branding Program: Add the PIA logo on your business card, website, stationery and signage.

Identify your agency with a national association of insurance professionals. Agency websites: Cutting-edge website tailored specifically for your agency… by the world’s largest insurance agent website provider. Offered at an incredible rate exclusively to Texas PIA members Consumer Brochures: PIA’s attractive brochures answer customers’ questions about insurance.

Email: vicki@piatx.org

Call: Vicki Reece 972.862.3333

Arrange each of the following anagrams to form a single insurance related word.

Keep in mind that the anagram is not a clue. It has nothing to do with the insurance related word. Send us your answers to be entered in a drawing to win a fabulous CASH prize! Feel free to call us if you’re stuck.

972.862.3333 Email to: vicki@piatx.org or fax to 972. 692.5624

ICY CAT PA

C

I I

C

A RITUAL CLAY

Y

V

IVY TREES

M

OWN FRAMER

T

TENT FAITH SEE TRANSIT

T

R

T

A

ICE ASSAULT

L

SOLDIERLY CHOP

O I

I MOLD DICE TALL ORACLE

R

C

D A

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

L Page 18

Competitive Rates  Agency Compensation  No Minimum Premium  Personal & Commercial Lines Financing  Full Lines Premium Finance Servicing Center  Document Delivery via web, fax, email or mail  Multiple Payment Options  Funding by Check, Laser Draft or Direct Deposit  Multiple Installment Schedules  Easy Online quoting & account management system  available 24/7/365 

Jack Roehrig ssistan Vi

sid n and usin ss D &

Tel: 2 1 4 - 4 0 2 - 3 1 3 7 jroehrig@afco.com

lop FCO C

n Offi di Corp.

Here’s the answers to last month’s puzzle. Remember there’s a $50 prize for the first person to submit the correct answers. (before the answers are published obviously.)

DUD EXCEL CHAOTIC PARTS LAME RIDE OUR BEER AD BAKED CAT IS MOMS COINS NAIL IF CANS RATE SENTIMENT

EXCLUDED CATASTROPHIC REMEDIAL BORDEREAU BACK DATE COMMISSION FINANCIALS REINSTATEMENT

GET MEANER

AGREEMENT

RIOTERS PEP

PROPERTIES

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 20

Texas Insurance Professional Services Ray Reyes

or

Bob Dixon

(214) 618-2365

(832) 375-0787

ray@piatx.org

bdixon@piatx.org

Check out the rates for the most cost effective method of keeping your message in front of your customers… professional insurance agents.

Ad Size

Monthly

Pre-Pay 6 Issues

Full Page

$200.00

$1,000.00

Half Page

$150.00

$750.00

Third Page

$100.00

$500.00

Quarter Page

$50.00

$250.00

Questions? Contact Vicki Reece at vicki@piatx.org or 972.862.3333.

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Page 23

Texas PIA Offers Members Satisfying E&O Solutions “Fifteen

minutes could save you

15%....

Everyone knows that… but did you know that not all E&O policies are the same?

This space is dedicated to all Member Agents or Companies.

It’s FREE!

Look for employees buy & sell agencies Sell your mother-in-law’s cat Sell your mother-in-law!

Send Ads to classifieds@piatx.org

E&O is like other types of insurance… you buy it hoping you’ll never need it… but if you do…

E&O can be the difference in whether you stay in business or not.

How about it? Do you know what your policy covers…. And more importantly, what it doesn’t?

Texas PIA offers members, quality E&O markets and coverage.

And members say they have saved as much as 40% when they switch to exclusive PIA programs.

Call today and get an analysis of your coverage and a competitive quote from multiple markets.

Call Texas Insurance Professional Services: Ray Reyes (214) 618-2365 ray@piatx.org

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

or

Bob Dixon (832) 375-0787 bdixon@piatx.org

Page 23

TEXAS DEPARTMENT OF INSURANCE ACTIONS

Prevost, Shedrick D Date of Action: 2/1/2016 Location: Harris County Action Taken: Indicted Violation: Insurance Fraud, State Jail Felony Forgery, State Jail Felony Aguilar, Juan Date of Action: 1/29/2016 Location: Houston Action Taken: Sentenced to 30 days county jail Violation: Insurance Fraud, Class A Misdemeanor Aguilar, Velia Date of Action: 1/29/2016 Location: Houston Action Taken: Sentenced to 20 days county jail.

Violation: Insurance Fraud, Class A Misdemeanor Buckner, Deborah D Date of Action: 1/27/2016 Location: Dallas County Action Taken: Indicted Violation: Misapplication of Fiduciary Property, 3rd Degree Felony

Contact Us Need more information on the benefits of membership?

Have a question about member services? Give us a call: Texas PIA & Young Insurance Professionals P.O. Box 700877 Dallas, Texas 75370 972.862.3333 vicki@piatx.org www.piatx.org

Diaz, Ann M Date of Action: 1/27/2016 Location: Bexar County Action Taken: Indicted Violation: Acting as Insurance Agent with Revoked/Suspended License Hart, Wesley Date of Action: 1/27/2016 Location: Bexar County Action Taken: Indicted Violation: Insurance Fraud, State Jail Felony House, LeeAnn C Date of Action: 1/27/2016 Location: Dallas County Action Taken: Indicted Violation: Insurance Fraud, State Jail Felony

A nickel ain't worth a dime anymore.

Nance, Hondree Date of Action: 1/27/2016 Location: Bexar County Action Taken: Indicted Violation: Insurance Fraud, State Jail Felony

Yogi Berra

: https://wwwapps.tdi.state.tx.us/inter/asproot/fraud/indictments/clips.asp

THE TEXAS CONNECTION - TEXAS PROFESSIONAL INSURANCE AGENTS DIGITAL JOURNAL

Pa ge 24

the

Last word

Mark your calendars for the summer and fall Texas Professional Insurance Agents and Young Insurance Professionals schedule of Agent CE Classes and enjoy food, fun and education at Dave & Buster’s. Take the opportunity to reach out to a non-member agent and encourage them to join us and learn more about Texas PIA and its many benefits of membership.

Registration:

Members $20 Non-Members $30

Cost includes: Dinner Buffet, 2 Hours of CE Credit, Dave & Buster’s Gaming Card and a chance to win a Door Prize. All of the events are scheduled for 6:00 p.m. to 9:00 p.m.

San Antonio

August 10, 2016

Dallas/Fort Worth

September 14, 2016

Houston

October 12, 2016

San Antonio

November 9, 2016

For questions or additional information please call 972.862.3333 or email vicki@piatx.org.