PIA Connection—An Update on Business Interruption (BI) Claims

Open Up the U.S. Capitol, PIA Says

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PIA CONNECTION 2022 V3

An Update on Business Interruption (BI) Claims

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NIPR’s 25th Anniversary page 19

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PIA CONNECTION NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS PRESIDENT Anthony Curti, CIC, LIC (MI) tcurti@acrisure.com PRESIDENT-ELECT Gerald F. Hemphill, CIC, LUTCF (VA/DC) ghemphill@gfhinsurance.com VICE PRESIDENT/TREASURER Richard A. Savino, CIC, CPIA richs@broadfieldinsurance.com SECRETARY/ASSISTANT TREASURER Ariel Rivera, CIC (PR) ariel@deerinsurance.com IMMEDIATE PAST PRESIDENT Wayne F. White, CPA, CPIA, PFMM (AR) wwhite1948@aol.com EXECUTIVE VICE PRESIDENT/CEO Mike Becker (PIA National) mbecker@pianational.org PUBLISHER/EDITOR-IN-CHIEF Ted Besesparis | tbesesparis@pianational.org MANAGING EDITOR Sade Hale | shale@pianational.org ADVERTISING DIRECTOR Robert Holt, CLU, ChFC, CASL | rholt@pianational.org GOVERNMENT AFFAIRS EDITOR Jon Gentile | jgentile@pianational.org REGULATORY AFFAIRS EDITOR Lauren Pachman, Esq. | lpachman@pianational.org MARKETING EDITOR Madeleine Stern | mstern@pianational.org CONTRIBUTING EDITOR Patricia A. Borowski, CPIW PRODUCTION EDITOR Laurel Prucha Moran | laurelpm@blueroomstudio.com March 2022 PIA Connection is published ten times yearly by the National Association of Professional Insurance Agents.

419 North Lee Street Alexandria, Virginia 22314 ©2022 All rights reserved.

The information in this publication is general in nature and is not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before making any decisions and we disclaim any responsibility for any decisions or actions by readers.

CONTENTS NEWS BRIEF Central U.S. Needs to Prepare for Next Earthquake…Connecticut and UK Reach Insurtech Agreement…Renewal Rates Fall for Four Commercial Lines: Ivans…Insurance Industry’s Cash + Assets = $7.5 Trillion…Is Flood Damage Underestimated?...”Unprecedented” Increase in Auto Thefts…

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INTRODUCING THE PIA 401(K) PLAN PIA is pleased to announce the PIA 401(k) Plan, a turn-key, low-cost solution for agency owners and their employees.

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CAPITOL HILL UPDATE 11 Open Up the U.S. Capitol, PIA Says. Plus the latest on the National Flood Insurance Program. PIA National VP of Government Relations Jon Gentile reports.

COVER STORY TWO YEARS ON, COURTS AND CORONAVIRUS BUSINESS INTERRUPTION (BI) CLAIMS 12-13 PIA Counsel and Director of Regulatory Affairs Lauren G. Pachman, Esq. with a status update.

WHY A BALANCED BOOK EQUALS ENHANCED VALUE FOR YOUR AGENCY Columnist Kevin Callahan on why diversification is becoming more important as the personal lines market evolves.

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TWO INSURANCE COMMISSIONERS CALL FOR CARRIERS TO DIVEST RUSSIA BUSINESS 15 Georgia Insurance Commissioner John F. King and California Insurance Commissioner Ricardo Lara urge insurance companies to divest their Russian business interests in light of that country’s bloody invasion of Ukraine… PIA President Tony Curti shares his thoughts on the RussiaUkraine war…page 5.

NIPR CELEBRATES 25TH ANNIVERSARY 19 The National Insurance Producer Registry marks 25 years of innovation in producer licensing. Ex officio NIPR board member Lauren G. Pachman, Esq. of PIA comments, “Serving on the NIPR board has been and continues to be one of the highlights of my career.”

DEPARTMENTS From the President . . . . . . . . . . . . . . . . . . 5 From the CEO . . . . . . . . . . . . . . . . . . . . 5 PIA Member Benefits . . . . . . . . . . . . . . . . 16 PIA Member Benefit Spotlight . . . . . . . . . . . 17 PIA Connection Marketplace . . . . . . . . . . . . 17 PIA Affiliate Listings . . . . . . . . . . . . . . . . 18

All PIA members receive PIA Connection at the member subscription rate of $12.00 per year.

Non-member subscriptions available at $24.00 per year ppd.

PIA CONNECTION | of www.pianational.org For additional information on any the subjects addressed in this publication, please access the PIA National website at www.pianational.org.

Cover image: iStockphoto/ Halfpoint

2022 V3 | 3

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FROM THE PRESIDENT EVENTS CAN CHANGE THINGS QUICKLY. JUST a short time ago, the nations of Europe were at peace. Then, for no good reason, Russia invaded Ukraine and has waged a brutal, murderous and completely illegal and inexcusable war on its people.

What we have seen is an ongoing series of unspeakable war crimes that have justifiably shocked the conscience of the world.

As an association, PIA has always confined its actions and commentary to matters of insurance, especially as they affect professional, independent insurance agents. But occasionally – as infrequently as once in a lifetime – circumstances demand that we join with all the good people of the world in condemning this manifestation of pure evil.

Two state insurance commissioners, John F. King in Georgia and Ricardo Lara in California, have issued public statements condemning Russia’s attack on Ukraine and calling for insurance carriers to divest their Russian business interests in light of that country’s bloody invasion of Ukraine.

It has been said that the only way for evil to triumph is for good people to do nothing, and say nothing. Fortunately, the good citizens of the United States and the rest of the world have not remained silent. Far from it.

PIA believes in freedom, liberty, democracy and self-determination, the same principles upon which our own nation was founded. The people of Ukraine aspire to the same and deserve no less.

Let there be no doubt: the good people of PIA stand with the good people of Ukraine and condemn the inhuman war crimes being perpetrated upon them. #StandWithUkraine Tony Curti President

FROM THE CEO IT IS SOMETIMES SAID THAT “NO NEWS IS good news.” What that saying really means is that the absence of bad news can be positive.

The insurance industry as a whole and independent insurance agents in particular are in a good position, especially when you consider the increased uncertainty in the current economic environment. For example, the last time the United States economy experienced anything like the current level of inflation was in the 1970s. In fact, it was much worse back then.

The stability of our industry is one of its greatest strengths.

The sheer size of the insurance industry serves as a solid foundation upon which our businesses are built and provides our economy with critical stability in challenging times.

A recent report illustrates this. At year-end 2020, U.S. insurance companies reported total cash and invested assets including affiliated and unaffiliated investments of $7.5 trillion, an increase of 7.7 percent compared to $7 trillion at year-end 2019, according to the valuation office of the NAIC. That’s not a misprint. That’s “trillion” with a “t”.

PIA CONNECTION | www.pianational.org

At the same time, many independent insurance agents, a key part of our industry, continue to thrive. The annual NU/PIA Independent Insurance Agent Survey showed that agency production and gross earnings improved in 2021 as compared to 2020.

Whenever times turn uncertain, insurance carriers and the local agents representing them provide their customers with certainty. Making people whole again, helping them recover from disasters, protecting incomes and property, and insuring health and lives while serving their communities—are all part of what we do.

We are all stronger thanks in no small part to insurance.

Mike Becker CEO

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NEWS BRIEF

CENTRAL U.S. NEEDS TO PREPARE FOR NEXT EARTHQUAKE Hundreds of emergency man-

trying to raise awareness with

agers, transportation leaders,

residents.

and other experts gathered in

Associated Press reports that

St. Louis on March 3 for the

the New Madrid Fault Line

annual Missouri Earthquake

centered near the southeast

Summit to discuss the latest

Missouri town of New Madrid

information on risks, prepared-

produced three magnitude 7.5

ness strategies, and recovery

church bells as far away as

ment of Commerce and Insur-

South Carolina, caused farm-

ance said the percentage of

land to sink into swamps and

homeowners with quake insur-

briefly caused the Mississippi

ance in the Missouri counties

River to flow backward. Those

near the New Madrid zone dropped from 60.2 percent in

quakes happened in late 1811 and early 1812. Though the

2000 to 12.7 percent in 2020. The agency blamed the sky-

fault line still produces about 200 small earthquakes each

rocketing cost of the insurance, which rose 760 percent in

year, people within the region have heard warnings for

those counties over the 20-year period. Emergency man-

so long about the next Big One that, for many, it goes in

agers from the city, county, and state levels said they’re

one ear and out the other.

CONNECTICUT AND UK REACH INSURTECH AGREEMENT Connecticut and the United Kingdom have agreed to a cooperative arrangement intended to ease the way for tech firms looking to

kets, connect with busi-

Commissioner to North

ness development and

America.

auto renewal rates rose

investment opportunities and make trans-Atlantic connections to accelerate business growth. “We look forward to new ideas cross-pollinating across the Atlantic,” said Con-

Data shows commercial 4.06 percent in February,

RENEWAL RATES FALL FOR FOUR COMMERCIAL LINES: IVANS

down from 4.13 percent in

According to Ivans Insur-

down from 5.58 percent

ance Services, the com-

January. Umbrella renewal rates were up 4.68 percent, in January. Commercial

mercial auto, general

property renewal rates

liability, commercial prop-

increased 6.01 percent,

erty, and umbrella lines of

down from 6.17 percent in

business saw declines in

January. General liability

average premium renewal

renewal rates were up 4.11

“As the home to one of

rates in February. Only the

percent in February, down

the oldest and largest

business owners policy

from 4.23 percent in Janu-

The so-called InsurTech

insurance industries in the

and workers’ compensa-

ary. Workers’ compensa-

Corridor is seen as a way

United States, Connecti-

tion lines saw month-

tion and business own-

for participating U.S. and

cut is a perfect fit for the

over-month increases in

ers policy renewal rates

UK companies to increase

UK,” said Emma Wade-

premium renewal rate

increased 5.41 percent and

their knowledge of mar-

Smith, Her Majesty’s Trade

changes for the month.

0.95 percent, respectively.

expand in each other’s markets. It’s believed to

necticut Insurance Commissioner Andrew Mais at

be the first-ever state level

the memorandum-signing

financial services agree-

ceremony.

ment between the two countries.

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www.pianational.org | PIA CONNECTION

photo ©iStockphoto/SDubi

to 7.7 earthquakes that rang

planning. The Missouri Depart-

NEWS BRIEF INSURANCE INDUSTRY’S CASH + ASSETS = $7.5 TRILLION At year-end 2020, U.S. insurance companies reported total cash and photo ©iStockphoto/torwai

invested assets, includ-

“UNPRECEDENTED” INCREASE IN AUTO THEFTS The National Insurance Crime Bureau (NICB) has warned that major cities across the United States have seen an “unprecedented” surge in auto thefts and carjackings in recent years. According to the NICB, car thefts nationwide increased by 16.5% in 2021 compared to 2019, and nearly 29 percent compared to 2017.

State-wise, certain jurisdictions such as Colorado and Wisconsin posted 79 percent and 74 percent more auto theft incidents in 2021 than in 2019, respectively. The NICB also found that many large cities, like New York, Chicago, and Washington, D.C., have experienced tripledigit increases in carjackings over the past two years.

!

NAIC, which maintains its own valuation office that assesses the risk of default for particular investments.

IS FLOOD DAMAGE RISK UNDERESTIMATED?

ing affiliated and unaffili-

Researchers from North

ated investments, of $7.5

Carolina State University

trillion, an increase of 7.7

have used artificial intel-

percent compared to $7

ligence to predict where

trillion at year-end 2019,

flood damage is likely

according to the National

to occur in the United

Association of Insurance

States. Their findings

Commissioners (NAIC).

suggest that current flood

The NAIC Capital Markets Bureau monitors developments in the capital markets globally and analyzes their potential impact on the investment portfolios of U.S. insurance companies.

maps used by the Federal Emergency Management Agency (FEMA) do not fully account for flood risks around the country. The researchers found that there is a high probability for flood damage for over

As of the end of 2020,

a million square miles of

U.S. insurers had $7.5

land in the country over

trillion in cash and invest-

a 14-year period. That is

ments, with more than 60

more than 790,000 square

percent of that — roughly

miles greater than flood

$4.7 trillion — invested in

risk zones identified by

bonds, according to the

FEMA’s maps.

Frank and Ernest is used with the permission of the Thaves and the Cartoonist Group. All rights reserved.

PIA CONNECTION | www.pianational.org

2022 V3 | 7

INTRODUCING THE PIA 401(k) PLAN THE NATIONAL ASSOCIATION OF Professional Insurance Agents is pleased to announce the PIA 401(k) Plan, a turn-key, low-cost solution for agency owners and their employees.

The PIA 401(k) Plan provides what employees want and what independent agents need to deliver it, in an efficient and cost-effective way. As an independent agent: You want a retirement plan for your agency that: · is easy to administer. · minimalizes fiduciary responsibility. · is low-fee and low-cost.

As a new PIA Member benefit, the PIA 401(k) Plan has you covered performing over 90% of administrative tasks and becoming your retirement department support team—allowing you to focus of what you do best—selling insurance.

The plan offers:

1.

COMPLIANT 401(k) PLANS Employers are faced with a voluminous number of regulations, documentation, record keeping, and tasks that come from both DOL and IRS requirements. The PIA 401(k) Plan takes on the oversight and execution of the tasks required to keep each plan compliant.

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SUBSTANTIAL AND WELL-KNOWN PROVIDERS The PIA 401(k) Plan works with various established 3(38) Investment Managers.

4.

PROTECTION FROM FIDUCIARY LIABILITY The PIA 401(k) Plan takes on the highest level of fiduciary liability and is responsible and accountable for operational and investment oversight.

EASIER TO ADMINISTER 401(k) PLANS With The PIA 401(k) Plan, employers outsource the functions and liability of the retirement plan administration. PIA 401(k) becomes each employer’s retirement solution, support team in action, and accountability and eliminates a majority of a plan’s administration burden, allowing you to focus on your business.

2.

3.

5.

PAY REASONABLE COST There are minimal billables to employers with retirement Plans in the PIA 401(k) Plan Retirement Solution. Money that would normally be spent on fees, to instead be used for enhancements to the retirement Plan offering. The PIA 401(k) Plan is competitively priced, and often costs less than other programs offering fewer comprehensive services.

READY FOR A BETTER RETIREMENT SOLUTION? LEARN MORE AT: PIANATIONAL.ORG/401K

www.pianational.org | PIA CONNECTION

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RCIS is here to help build your business. Our team approach works for you and your customers, with a company-wide focus on responsive claims handling and payment and advanced technology and resources to work smarter, not harder. All supported by a dedicated team that make connections count when it matters most.

We’ve Got This To become an agent representing RCIS, contact an RCIS Business Development Representative or visit https://www.rcis.com/home/pages/agent/join-us today.

RCIS is a registered trade name of Rural Community Insurance Company. RCIC is an equal opportunity provider. © 2022 Rural Community Insurance Company. All rights reserved.

CAPITOL HILL UPDATE

By Jon Gentile Vice President, Government Relations PIA National

OPEN UP THE U.S. CAPITOL, PIA SAYS SINCE THE PANDEMIC BEGAN two years ago, access to the Capitol complex has been limited. The resulting restrictions have placed a damper on one kind of advocacy that has been productive for PIA members: in-person contact with members of Congress and their staffs.

Currently, while it is possible to meet with Congressional offices, security concerns have led to ongoing restrictions. For instance, access now requires an appointment and check-in by security personnel at select entrances.

Visitors must wait outside House or Senate buildings until they are met by a congressional staff member, who escorts advocates into the buildings and all the way to their meeting locations. The escort returns for visitors departing a meeting; they are accompanied from the meeting location until they are outside the building. Visitors are not allowed to wander the Capitol complex unescorted by staff.

The result is that in-person meetings are technically possible with some congressional offices, but the experience is difficult for and unfamiliar to many visitors. Moreover, because each congressional office sets its own rules, the accessibility of legislators and their staffs varies greatly around the Capitol.

Members of PIA support House and Senate leadership taking seriously the safety and security of one another, their staffs, and their constituents. But the time has come to reevaluate these measures and modify them as needed.

Doing so will encourage more dialogue among members of Congress, their staffs, and constituents and will encourage the resumption of vital in-person PIA CONNECTION | www.pianational.org

advocacy. PIA has joined with 250 organizations and individuals in the advocacy profession to urge House and Senate leadership to reopen the Capitol office buildings to the public.

2022 PIA ADVOCACY DAYS In the meantime, PIA decided to seize the opportunity presented by these challenges to reimagine the 2022 Advocacy Day using a new approach that addresses this year’s needs and can potentially be deployed in various ways in the future. While the vast majority of these “rolling” fly-ins will be held virtually, we hope to offer some state- and/or issue-specific events inperson later in the year, if possible.

By holding state-specific Advocacy Days throughout this year instead of on one day, the PIA government relations team can provide our participants with a more detailed issue briefing and overall, a more personalized experience. Our 2022 shift to rolling Advocacy Days will ultimately lead to a more robust and fulfilling advocacy experience for our agents.

So far, agents participating in the new format have been pleased.

FLOOD INSURANCE PROGRAM EXTENDED TO SEPT. 30 The National Flood Insurance Program (NFIP) has been extended to September 30, 2022. The extension was included in a $1.5 trillion omnibus federal government spending package that passed both the House and Senate and was signed into law by President Biden. The omnibus also extends funding for the entire federal government to September 30, 2022.

The history of NFIP extensions has been notoriously messy. The program was extended 17 times between 2008 and 2012, at which time the NFIP was reauthorized again for five years. That multi-year reauthorization was the NFIP’s last long-term renewal to date.

PIA SUPPORTS FLOOD INSURANCE PRICING TRANSPARENCY BILL PIA strongly supports the Flood Insurance Pricing Transparency Act, a bill introduced in March by Sens. Bill Cassidy (R-LA) and Kirsten Gillibrand (D-NY).

As Risk Rating 2.0 has been implemented, it has become clear that independent insurance agents need more information about how the new methodology uses its rating factors to calculate NFIP premiums, especially when mitigation credits are at issue. This bill requires the Federal Emergency Management Agency (FEMA) to publish the formulas used to calculate mitigation credits for policyholders under Risk Rating 2.0.

PIA is also pleased that the legislation would require FEMA to create a tool that could be used to estimate the cost of an NFIP policy for new construction without compromising proprietary information. Such a tool would not allow unlicensed members of the public to produce quotes, but it would help agents for policyholders to see for themselves how their rates will change.

Jon Gentile is vice president of government relations for PIA.

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PIA LEGAL ANALYSIS

By Lauren G. Pachman, Esq.

TWO YEARS ON, COURTS CONTINUE TO CONTEND WITH CORONAVIRUS BUSINESS INTERRUPTION (BI) CLAIMS TWO YEARS HAVE PASSED since the insurance indus-

try first learned of the “novel coronavirus” wending its way around the globe. In the intervening time, many of us learned about properly fitted masks, the size of various respiratory particles, our children’s school curriculum, and pandemic risk insurance options. The applicability of business interruption (BI) provisions of commercial insurance policies spawned litigation around the country and worldwide.

Both state and federal courts were asked to consider the applicability of a particular BI provision to various plaintiffs’ COVID-19-related circumstances. Over time, patterns have begun to emerge. Here is a sampling of the conclusions we can draw from the courts’ decisions thus far: State courts are more plaintiff-friendly than federal courts.1 A state court will view BI provisions more broadly and plaintiffs’ claims more favorably than a federal court. The applicability of a property insurance policy is generally a question of state law, but many BI litigation cases are pending in federal court, where coverage is more often rejected.2 State courts are more likely to uphold coverage, subject to the specific language of the policy and the facts at issue.

Many first-filed cases implicating BI coverage for COVID losses involved policies that included an exclusion titled “Exclusion of Loss Due to Virus or Bacteria,” and were dismissed out of hand by federal courts. The exclusion, which was drafted by the Insurance Services Office (ISO) independently of the pandemic, was colloquially known as the “ISO Virus

1

See “Key COVID-19 Insurance Coverage Case Tracker (US): 2020 and 2021,” available at https://content.next.westlaw.com/Document/ If80a0d3879ae11ea80afece799150095/View/ FullText.html?originationContext=document& transitionType=DocumentItem&ppcid= ba69c4d5d42a48528c6d53a359c1a77d& contextData=(sc.DocLink)&firstPage=true (last visited Feb. 10, 2022).

2

“Recent Policyholder Victories in U.S. Coronavirus Insurance Coverage Litigation,” available at https://www.cov.com/en/ news-and-insights/insights/2021/08/recentpolicyholder-victories-in-us-coronavirusinsurance-coverage-litigation (last visited Feb. 11, 2022).

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Exclusion.”3 As state courts began to consider similar cases, they often allowed cases to proceed that might have been dismissed in federal court for failing to plead a claim that could trigger coverage pursuant to the insurance policy at hand.

To wit, state courts allowed plaintiffs to proceed in the following cases: · The existence of an exclusion for losses caused by “contaminants” did not warrant a case’s dismissal because the list of applicable contaminants included “pollutants,” “fungi,” and “microbes,” but not “viruses.” · Coverage for “all risks of physical loss or damage” is broader than coverage for “direct physical loss”; the absence of the word “direct” modifying “physical loss or damage” left open the possibility that loss of physical use of the premises was meant to be covered. · A “communicable disease or virus” exclusion applicable to other provisions of a policy does not apply to its BI provision unless explicitly stated; policyholders with a virus exclusion applicable to other provisions of the policy could reasonably expect their BI coverage to apply to COVID-related BI losses. · Where the policy covers loss or damage (rather than loss and damage), “loss” need not refer to physical damage or destruction. Rather, “loss” should focus on the policyholder’s deprivation of use of the property. · Coverage for a “direct physical loss” can be found where a property is made unusable for its intended purpose.

Applicable case law can make all the difference. The Superior Court of Merrimack County, New Hampshire granted a policyholder motion for summary judgment on the basis that “physical loss” in the subject insurance policy included not

3

“Recent Policyholder Victories in U.S. Coronavirus Insurance Coverage Litigation,” available at https://www.cov.com/en/ news-and-insights/insights/2021/08/recentpolicyholder-victories-in-us-coronavirusinsurance-coverage-litigation (last visited Feb. 11, 2022).

www.pianational.org | PIA CONNECTION

only physical changes to the covered property, but also changes that were not indicative of structural damage, as long as said changes were “distinct and demonstrable.” The court thus concluded that the presence of COVID-19 caused physical loss or damage, relying on a holding in an earlier (non-COVIDrelated) NH case that set forth the “distinct and demonstrable” standard. The court found that COVID-19’s detectability and survivability on surfaces within and around covered properties made the damage it caused “distinct and demonstrable.”

The phrase “physical loss of property” requires a tangible, physical loss for a plaintiff to recover, according to the 2nd, 5th, 6th, 7th, 8th, 9th, 10th, and 11th federal circuit courts.

More specifically, a demonstration of “loss” involves a showing of destruction or ruin, according to the 5th Circuit; it requires more than the plaintiff ’s inability to use the property for its intended purpose.

Procedural decisions may favor plaintiffs without rendering a judgment on the merits of the underlying case.

A complaint filed in the Middle District of North Carolina was permitted to proceed because it sufficiently alleged direct physical damage or loss arising out of COVID-19-related BI losses. The court concluded that whether the claimant suffered physical damage or loss was a question best answered after the development of a factual record.

Similarly, proof of physical contamination caused by COVID-19 could render a loss recoverable if the physical contamination caused by COVID-19 made the covered property unsafe, according to the Western District of Missouri, which denied in part a defendant’s motion for summary judgment. The court there held that “physical loss” could be found in covered physical damage if the plaintiff established physical contamination that rendered the covered property unsafe.4 Like the North Carolina case above, this procedural decision essentially held that more information was needed to determine whether the claimant suffered compensable losses.

However, in the 11th Circuit, an allegation that COVID-19 particles were present in the air did not establish physical damage to the covered property.

On the other hand, where a commercial property policy’s BI provision expressly includes coverage for losses caused by communicable diseases and coverage for communicable disease response cost and cleanup, coverage may be found for COVID-19-related BI losses, according to the Connecticut Superior Court (District of Hartford). Still, applicable sublimits will still apply.

Loss of use does not qualify as a covered loss for purposes of finding BI coverage if that loss of use is unconnected to a direct physical loss, according to the 7th Circuit’s decisions in six related cases. The Cook County Circuit Court in Illinois agreed, throwing out 17 COVID-related BI cases filed by various restaurants and bars because the complaints did not demonstrate any “physical alteration or structural degradation” of the covered properties.5 The judge rejected plaintiffs’ claims that the presence of COVID particles on the premises was sufficient to trigger coverage because any such particles could easily be removed using ordinary cleaning supplies.

Likewise, restaurants claiming to have incurred BI losses because of prohibitions against indoor dining cannot establish coverage based on that fact alone. According to the 6th Circuit, the prohibition on a type of dining did not demonstrate a direct physical loss or direct physical damage.

4

5

However, the Western District’s decision does not mark the case’s conclusion. As of the time of publication, K.C. Hopps, Inc. must still demonstrate proof of physical contamination for its business interruption claim to succeed.

PIA CONNECTION | www.pianational.org

CONCLUSION Among the array of cases that have been decided thus far, perhaps their most reliable feature is that the kinds of losses that qualify as “direct physical losses” are as varied as the details of each individual case. Reasonable minds may differ on whether COVID-related BI losses will be covered when contaminants are present, when the property cannot be used, when it cannot be used for its intended purpose, when damage to the property is not physical but is “distinct and demonstrable,” when the property is rendered unsafe by a contaminant, and when COVID particles are in the air on the property.

So many decisions turn on the specific language included in the business interruption provision of the policy. When bringing claims against insurance carriers seeking coverage for COVID-related BI losses, policyholders will have greater success in state court than in federal court; conversely, carriers facing such suits may find it advantageous to request transfer to federal court, if a jurisdictional basis exists for doing so.

Perhaps the most valuable lesson to be learned from these cases is to take seriously the varying interpretations of both state and federal courts thus far. Many facets of future lawsuits will be beyond the control of the insurance industry, but the industry can be both responsible and responsive in crafting policies and exclusions that meet the expectations of both underwriters and policyholders in the future.

Lauren G. Pachman, Esq. is Counsel and Director of Regulatory Affairs for PIA.

“17 COVID-related business interruption cases tossed,” available at https://www.chicagolawbulletin.com/ court-denies-17-covid-19-businessinterruption-coverage-claims-20210902 (last visited Feb. 11, 2022).

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$

AGENCY MARKETING

By Kevin Callahan

WHY A BALANCED BOOK EQUALS ENHANCED VALUE FOR YOUR AGENCY Diversifying your client base is becoming more important as the personal lines market evolves.

DIVERSIFICATION HAS LONG been regarded as an effective tool for managing your investment portfolio— and savvy independent agents know that it’s also a smart strategy to employ when balancing their agency’s book of business.

If you’re looking to enhance your agency’s value, a diversified book is a smarter bet, especially in the long term. On average, a balanced book is worth more to someone who would acquire your agency than a book that is more narrowly focused.

Over the past six months, I’ve heard several successful independent agents say they’re looking to shift the ratio between their personal and commercial lines accounts. Two separate agents both said they currently had a balance of 80% personal to 20% commercial – and despite the good retention they had enjoyed with their personal lines clients, those principals were looking to boost their commercial premiums in order to establish more balance.

While the environment is as challenging as ever for commercial lines, in time, things might prove even more volatile for personal lines. I’ve written previously about a 2021 report from MarshBerry, in which the M&A advisor states that on a long enough timeline, InsurTechs could gain a larger slice of personal lines market share than independent agents might expect.

It can be challenging for independent agencies to achieve meaningful growth on the backs of small personal lines business. At some point,

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an agency needs the opportunity to service accounts at higher levels of premium in order to sustainably grow. Additionally, commercial lines loss ratios tend to be more stable over time and have performed better than personal lines over the last decade.

AM I REALLY DIVERSIFIED? It’s always a good idea to regularly review your operations and consider whether the decisions you’ve made and that you’re currently making will have a positive impact on your business in the long term. With that in mind, now might be the right time to ask: as an independent agent, is my book of business really as diversified as I think it is?

Periodic review of your list of accounts is essential in ensuring your agency is doing all it can to serve a wider variety of clients. This can prove a profitable approach for several reasons.

First, as sectors like homeowners and auto become increasingly commoditized, it’s harder for an independent agency to stand out as being a specialist in personal lines. Even if your agency is known for specializing in personal lines, that can put you in a “box” that can limit the scope of your referrals.

Conversely, having a diverse customer base helps get you get more referrals as an agency known for being able to place both Main Street business and harder-to-place commercial lines risks. Being known as an agency that possesses strength—as well as valuable carrier partners—in serving both commercial and personal lines clients will

pay off not only in expanded premium, but also in reputational equity.

This is not to say that developing expertise in commercial lines is easy; far from it. Not every independent agency has the resources to gain specialization in serving commercial clients. Selecting which commercial lines you want to do business in requires a balanced scale between the profitability of those lines and the level of investment you want to make in having the bench to effectively serve those customers—and that equation looks different for every independent agency. Is it large contractors, or manufacturers, or even technology companies that you want to be serving? Long-haul trucking? Only you can answer that question.

NOT ONE, BUT BOTH Specializing in both personal and commercial can also tee up crossselling opportunities for your business. I’m not at all suggesting that you should serve commercial lines clients in lieu of personal lines customers.

Independent agents are the insurance industry’s boots on the ground, and their personal lines clients depend on them for their experienced counsel and service. It’s not a matter of one or the other, it’s having the right mix.

Balancing personal and commercial lines is something to strive toward in diversifying your own portfolio of risk, as well as an effective way to enhance your agency’s value.

Kevin Callahan (kcallahan@renaissanceins.com) is Chairman and CEO of Renaissance Alliance.

www.pianational.org | PIA CONNECTION

TWO INSURANCE COMMISSIONERS CALL FOR CARRIERS TO DIVEST RUSSIA BUSINESS

— GEORGIA INSURANCE COMMISSIONER JOHN F. KING

BROADER INSURANCE IMPACT More broadly, S&P Global Market Intelligence reports that the U.S., European Union and U.K. and a number of other countries, have imposed economic sanctions on Russian companies and individuals in response to the country’s invasion of Ukraine. A handful of those sanctions are directly aimed at blocking Russian entities and interests from accessing global insurance markets, and many other restrictions may affect insurers’ business.

Aviation and space insurance and reinsurance lines will be hit predicts S&P, as both the U.K. and EU have signaled they will block Russian companies from accessing that coverage.

Marine, trade credit and political risk covers also are likely to be directly affected.

Reinsurance News reports that following Russia’s move to nationalize jets stranded in the wake of Western

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PIA CONNECTION | www.pianational.org

“WE MUST STAND WITH THE UKRAINIAN PEOPLE AND DO ALL WE CAN TO PUT AN END TO RUSSIA’S CRIMINAL AND COWARDLY INVASION OF UKRAINE.”

sanctions, analysts and industry leaders have warned that the aviation insurance market could be facing a historic loss. More than 500 Westernbuilt aircraft worth roughly $10 billion are thought to be grounded in Russia, as authorities in the country have blocked the leased planes from leaving its airspace.

It’s thought that Lloyd’s provides the majority of aviation coverage at risk, with the Financial Times having previously reported that the marketplace is expecting an ultimate loss of between $1 billion and $4 billion, after reinsurance.

The Wall Street Journal reports that prices of other insurance products have gone up in recent weeks as the potential for fighting increased. It is all but impossible to secure insurance to sail into Ukraine’s Black Sea ports, said an executive at a tanker company.

To operate in Russia’s Black Sea ports such as Novorossiysk, insurers in the Lloyd’s of London market are charging a premium of up to 2% of the value of a new-build tanker, which equates to about $800,000, for 10 days of coverage, according to a source.

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sioners of Georgia and California are urging insurance companies to divest their Russian business interests in light of that country’s bloody invasion of Ukraine.

Georgia Insurance Commissioner John F. King issued a bulletin to all carriers doing business in the state urging action. “While the State of Georgia’s role in international affairs is modest, we must stand with the Ukrainian people in opposing tyranny in whatever manner we are able,” King wrote. “Accordingly, I want to urge insurance companies who do business in the state to do their part in opposing Russia’s invasion of Ukraine. We must stand with the Ukrainian people and do all we can to put an end to Russia’s criminal and cowardly invasion of Ukraine.”

California Insurance Commissioner Ricardo Lara issued a notice to all admitted and non-admitted insurance companies as well as all licensed insurance producers. “In the coming days, I intend to make sure that the insurance industry is doing its part—not just through words, but action—to support the unified global community in condemning Russia’s invasion of Ukraine.

I will explore all remedies available under California insurance law to push the industry to demonstrate that they are aligning with the global community to hold Russia accountable.

Citing information from AM Best, US-based insurers’ direct investments exposed to Ukraine and Russia include almost $2 billion in bonds, the California Department of Insurance reported. Indirect investments in businesses that derive shares of earnings from Russia may be even more substantial.

“If insurance companies do not

voluntarily act now to dispose of direct investments in Russia, I will explore all options to compel them to follow through,” sais Lara. “We must do all that we can to stand with the Ukrainian people and put an end to Russia’s unlawful, violent aggression towards Ukraine and to global peace, stability, and freedom.”

P I NN

THE INSURANCE COMMIS-

Encompass Insurance Erie Insurance State Auto Insurance Companies

2022 V3 | 15

YOUR PIA MEMBER BENEFITS BUSINESS-BUILDING TOOLS

INSURANCE PRODUCTS

AGENCY MANAGEMENT TOOLS

✦ PIA MEMBER REIMBURSEMENT PROGRAM: Receive reimbursements on PIA marketing and PIA Partnership programs (up to $250 per program, for a total of up to $500). www.pianational.org/agentsupport

✦ E&O INSURANCE. With access to admitted and non-admitted markets with differing appetites chances are we can find the coverage and price that’s right for you. www.pianational.org/eando

✦ THE PIA 401(K) PLAN is easy to administer, offers minimal fiduciary responsibility, is low-fee and low-cost. It has PIA members covered by performing over 90% of administrative tasks and becoming your retirement department support team.

✦ PIA AGENTS UMBRELLA PROGRAM. Excess insurance protection includes E&O and business liability coverage, with available endorsements for EPL and personal coverage.

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✦ MARKETING SUPPORT FOR PIA MEMBERS. Print ads, radio commercials, consumer-oriented flyers and social media support for PIA members. www.piabrandingprogram.com

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TOOLS FROM THE PIA PARTNERSHIP, PIA’S COMPANY COUNCIL

✦ HARTFORD FLOOD INSURANCE. PIA’s endorsed flood provider since 2004.

Dedicated local sales directors and book transfer/rollover team plus great commissions for PIA members. Call (860) 547-5006.

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✦ AVYST EFORMS WIZARD. Quickly and easily prepare ACORD, agency-specific, and carrier-unique applications and forms, entering data only once in an organized interview format. Get to market faster!

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✦ PIA CYBER INSURANCE: Robust coverage tailored to small and mid-sized businesses. Coverage with special PIAonly enhancements is available for PIA members to sell.

✦ PIA LOGO. Put the PIA logo on your business card, website, stationery and signage. Order items with the PIA logo in our online store.

✦ READY FOR EVERYTHING. The online crisis resource hub for insurance agents.

✦ AGENCY JOURNEY MAPPING. Value your agency, maximize your retirement income, and plan for unexpected death/disability while creating a k perpetuation plan for your agency.

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✦ ROUGH NOTES - ADVANTAGE PLUS. Identifies risk exposures. Provides detailed coverage analysis. PIA member price $600 annually (reg. $700). Call 800-428-4384.

Use your PIA member ID# above name on mailing label.

WINNING@VIRTUAL. Your guide to evolving your sales and service in a digital world.

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✦ PIA Agency Marketing Guide. Hands-on marketing tips from industry experts.

Published annually.

✦ AGENCY REVENUE TOOLS. Boost personal lines sales by engaging in employee worksite marketing using your appointed markets at regular commission rates.

✦ WINNING@CYBERSECURITY DEFENSE is a four-part educational resource created to teach agents and their clients about the most common cyber dangers faced by small and mid-sized businesses as well as the best business practices and insurance coverages i c k that can reduce these risks.

SMALL COMMERCIAL and the DIGITAL OPPORTUNITY. A variety of resources that help agents increase their digital capabilities and improve the digital experience for their customers.

✦ CLOSING THE GAP—GROWTH & PROFIT. Plan for growth and profitability. Includes tools for improving retention, sales and account-rounding. ✦ AGENCY TOUCH POINTS—THE VOICE OF THE CUSTOMER. Give personal lines customers what they really want. ✦ REACHING GEN Y. Convert Gen Y age group insurance consumers into loyal agency customers. ✦ PRACTICAL GUIDE TO SUCCESSFUL PLANNING. Plan for success within your own agency.

✦ THE AGENT EXPERIENCE. Practical information and resources about how to develop and grow customer relationships online. ✦ PIA BLUEPRINT FOR AGENCY SUCCESS. A 3-part resource guide for business planning, growth strategies, and agency continuity. ✦ ACORD FORMS END USER LICENSES. Available for free to qualifying PIA members who access ACORD forms through agency management systems and other authorized distributors. Plus PIA member discounts on the ACORD Advantage Plus Program. ✦ AGENCY AGREEMENT REVIEW SERVICE. Free to members and carriers, PIA recommends changes to carriers and highlights concerns for members. ✦ AGENCY PREPAREDNESS AND RECOVERY PLAN. The PIA guide to creating an agency-specific business contingency plan. ✦ EMPLOYEE PROFILING. Hire the right people with skills and personality testing from OMNIA. ✦ HIRE WITH IDEALTRAITS. The comprehensive, go-to hiring tool for agencies looking to hire top performers. www.idealtraits.com/pia ✦ PIA member discounts on licensing and more.

LEGISLATIVE & REGULATORY OUTREACH ✦ PIA ADVOCACY BLOG. Timely updates about what’s happening on Capitol Hill and on state and federal regulatory issues. www.PIAAdvocacy.com. ✦ GRASSROOTS ALERTS. Send pre-written, fully-editable letters directly to your elected officials. www.pianational.org/grassroots ✦ PIA ADVOCACY DAY. Every spring, PIA members visit Capitol Hill to talk with their elected representatives about issues that are important to independent insurance agents. www.pianational.org/advocacyday ✦ PIA POLITICAL ACTION COMMITTEE (PIAPAC). PIAPAC contributes to the campaigns of candidates to federal office who share our pro-insurance, pro-business perspective and who support our issues. www.pianational.org/piapac

Learn more about these PIA member benefits at www.pianational.org.

PIA MEMBER BENEFIT SPOTLIGHT

PREPARE FOR ANY CRISIS WITH READY FOR EVERYTHING CAN A CRISIS MAKE YOUR AGENCY STRONGER? The answer is yes according to many who have found opportunities to connect with customers in new ways, stress test workat-home capabilities, and build greater teamwork.

Insurance agencies are well-versed in all types of crises, regularly steering clients through the claims process after floods, fires, storms (and now pandemics) to name a few. Good planning, flexibility, and work-from-anywhere technology are key to surviving — and thriving — during any crisis.

When a crisis hits, it’s the planning and preparation that really counts. Ready For Everything is a crisis information hub brought to you by The PIA Partnership. The Ready For Everything toolkit gives agents resources on planning, remote working, and employee and customer communications. We’ve curated and organized a host of industry articles, videos, and podcasts, and provided key takeaways to make it as easy as possible for insurance agencies to be more prepared — when the next crisis hits.

Creating a plan can help lessen the impact and speed up the path to recovery. Ready For Everything provides best practices for creating a plan, avenues for financial assistance, and technologies that can help.

When disaster strikes, it can create uncertainty amongst insurance clients. Many customers have questions concerning policies and employees want to know how their jobs will be impacted. Ready for Everything provides multiple resources to help insurance agents prepare for future disasters.

During a crisis, it is imperative to have an effective communication strategy to insure the smooth operation of business.

This hub brings credible information together for crisis planning such as ideas for maintaining constant communication, types of information to share, and technologies to ensure information gets out quickly.

No matter the disaster, we have you covered.

To get started with Ready For Everything visit: http://www.getreadyforeverything.com/.

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PIA Connection Marketplace rates: $95/issue for 10 issues; $120/issue for 5 issues. To learn more and get a contract, or inquire about display advertising, please contact Robert Holt at rholt@pianational.org or 703-518-1353.

PIAtoCONNECTION | www.pianational.org 2022 V3 | 17

PIA AFFILIATES ALABAMA

MARYLAND

OREGON/IDAHO

PIA Southern Alliance, 3805 Crestwood Pkwy NW #140, Duluth, GA 30096 PHONE: (770) 921-7585 | FAX: (770) 921-7590 e-mail: info@piasouth.com | Web Site: piasouth.com

Insurance Agents & Brokers of Maryland 650 Wilson Lane, Suite 200, Mechanicsburg, PA 17055-4440 PHONE: (717) 795-9100 | FAX: (717) 795-8347 e-mail: iab@iabforme.com | Web Site: www.iabforme.com

PIA Western Alliance 3205 Northeast 78th Street, #104, Vancouver, WA 98665 PHONE: (888) 246-4466 | FAX: (360) 571-7600 e-mail: piawest@piawest.com | Web Site: www.piawest.com

MASSACHUSETTS

PENNSYLVANIA

PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

MICHIGAN

PUERTO RICO & CARIBBEAN

Michigan PIA, P.O. Box 99579 Troy, Michigan, 48099 PHONE: (616) 454-4461 | FAX: (616) 454-4491 e-mail: inquiry@mipia.com | Web Site: www.mipia.com

PIA of Puerto Rico and the Caribbean Inc 419 N. Lee Street, Alexandria, VA 22314 PHONE: 800-742-6900 | FAX: 703-836-1279 e-mail: membership@pianational.org | Web Site: www.piapuertorico.org

ARKANSAS PIA of Arkansas Inc. 102 Country Club Parkway, Suite 201, Maumelle, AR 72113 PHONE: (501) 225-1645 e-mail: staci@piaar.com | Web Site: www.piaar.com

CA/NV/AZ/NM PIA Western Alliance, 3205 Northeast 78th St #104, Vancouver, WA 98665 PHONE: (888) 246-4466 | FAX: (360) 571-7600 e-mail: piawest@piawest.com | Web Site: www.piawest.com

COLORADO

MINNESOTA

RHODE ISLAND

PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

PIA of Minnesota, 8646 Eagle Creek Circle, Suite 202, Savage, MN 55378 PHONE: (866) 694-7070 | FAX: (866) 749-8678 e-mail: info@piamn.com | Web Site: www.piamn.com

CONNECTICUT

MISSISSIPPI

SOUTH CAROLINA

PIA of Connecticut, P.O. Box 997, Glenmont, NY 12077-0997 PHONE: (800) 424-4244 | FAX: (518) 434-2342 e-mail: pia@pia.org | Web Site: www.pia.org

PIA Southern Alliance, 3805 Crestwood Pkwy. NW, Ste. 140, Duluth, GA 30096 PHONE: (770) 921-7585 | FAX: (770) 921-7590 e-mail: info@piasouth.com | Web Site: piasouth.com

PIA of South Carolina, PO Box 6167, Columbia, SC 29260 PHONE: (803) 772-0557 | (888) 742-6372 | FAX: (803) 772-0846 e-mail: PIASC@piasc.net | Web Site: www.piasc.net

DELAWARE

MISSOURI

SOUTH DAKOTA

PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

Missouri Association of Insurance Agents 3315 Emerald Lane, Jefferson City, MO 65109-6878 PHONE: 573-893-4301 | FAX: 573-893-3708 e-mail: mbarton@moagent.org | Web Site: www.missouriagent.org

PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

MONTANA

PIA of Tennessee Inc 504 Autumn Springs Court Suite A-3, Franklin, TN 37067 PHONE: (615) 771-1177 | FAX: (615) 771-3456 e-mail: piatn@piatn.com | Web Site: www.piatn.com

FLORIDA PIA of Florida, Inc., 419 N. Lee Street, Alexandria, VA 22314-2353 PHONE: (850) 893-8245 | FAX: (703) 549-5190 e-mail: piafl@piafl.org | Web Site: www.piafl.org

GEORGIA PIA Southern Alliance, 3805 Crestwood Pkwy NW #140, Duluth, GA 30096 PHONE: (770) 921-7585 | FAX: (770) 921-7590 e-mail: info@piasouth.com | Web Site: piasouth.com

HAWAII PIA of Hawaii, 1247 Kelewina St. Kailua, HI 96734 PHONE: (808) 261-9460 | FAX: (808) 262-5355 e-mail: piahi@hawaiiantel.net | Web Site: www.piahawaii.com

ILLINOIS PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

PIA Western Alliance, 3205 NE 78th St Ste 104, Vancouver, WA 98665-0697 PHONE: (888) 246-4466 | FAX: (360) 571-7600 e-mail: piawest@piawest.com | Web Site: www.piawest.com

NEBRASKA/IOWA

NEW HAMPSHIRE

UTAH

PIA of New Hampshire, P.O. Box 997, Glenmont NY 12077-0997 PHONE: (800) 424-4244 | FAX: (518) 434-2342 e-mail: pia@pia.org | Web Site: www.pia.org

Utah Association of Independent Insurance Agents 4885 S. 900 E., Suite 302, Salt Lake City, UT 84117 PHONE: (801) 269-1200 | FAX: (801) 269-1265 e-mail: mattchild@uaiia.org | Web Site: www.uaiia.org

NEW JERSEY

PIA of Indiana, 50 E. 91 Street Ste. 207 Indianapolis, IN 46240 PHONE: (317) 899-9200 | FAX: (317) 493-0408 e-mail: info@piaindiana.com | Web Site: www.piaindiana.com

NEW YORK

KENTUCKY PIA of Kentucky, 107 Consumer Lane, Frankfort, KY 40601 PHONE: (502) 875-3888 | FAX: (502) 227-0839 e-mail: clemay@piaky.org | Web Site: www.piaky.org

LOUISIANA PIA of Louisiana Inc. 4021 W. E. Heck Ct., Building K, Baton Rouge, LA 70816 PHONE: (225) 766-7770 | (800) 349-3434 LA only | FAX: (225) 766-1601 e-mail: jody@piaoflouisiana.com | Web Site: www.piaoflouisiana.com

MAINE Maine Insurance Agents Association 17 Carriage Lane, Hallowell, ME 04347 PHONE: (207) 623-1875 | FAX: (207) 626-0275 e-mail: lisa@maineagents.net | Web Site: www.meiaa.com

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TEXAS PIA of Texas 5605 N. MacArthur Blvd. Suite 1000, Irving, TX 75038 PHONE: (972) 862-3333 | FAX: (972) 307-7888 e-mail: vicki@piatx.org | Web Site: www.piatx.org

INDIANA

Kansas Association of Professional Insurance Agents 216 SW 7th Ave, Topeka, KS 66603 PHONE: (785) 232-4143 | FAX: (785) 232-0272 e-mail: trina@kansaspia.org | Web Site: www.kansaspia.org

TENNESSEE

PIA of Nebraska/Iowa, 11932 Arbor Street, Ste. 100, Omaha NE 68144 PHONE: (402) 392-1611 | FAX: (402) 392-2228 e-mail: cathy@pianeia.com | Web Site: www.pianeia.com

PIA New Jersey, P.O. Box 997, Glenmont NY 12077-0997 PHONE: (800) 424-4244 | FAX: (518) 434-2342 e-mail: pia@pia.org | Web Site: www.pia.org

KANSAS

PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

PIA New York, P.O. Box 997, Glenmont NY 12077-0997 PHONE: (800) 424-4244 | FAX: (518) 434-2342 e-mail: pia@pia.org | Web Site: www.pia.org

VERMONT PIA of Vermont P.O. Box 997, Glenmont NY 12077-0997 PHONE: (800) 424-4244 | FAX: (518) 434-2342 e-mail: pia@pia.org | Web Site: www.pia.org

VIRGINIA/DC

NORTH CAROLINA

PIA Assn of Virginia & DC 1059 Technology Park Dr, Glen Allen, VA 23059 PHONE: (804) 264-2582 | FAX: (804) 266-1075 e-mail: kevin@piavadc.com | Web Site: www.piavadc.com

PIANC, 1059 Technology Park Dr, Glen Allen, VA 23059 PHONE: (804) 264-2582 e-mail: kevin@pianc.net | Web Site: www.pianc.net

WASHINGTON/ALASKA

NORTH DAKOTA PIA of North Dakota 827 28th Street South, Suite C-2, Fargo, ND 58103 PHONE: (701) 223-5025 | (800) 733-1050 ND&MN only FAX: (701) 223-9456 | e-mail: info@piand.com Web Site: www.piand.com

OHIO PHONE: (703) 836-9340 | FAX: (703) 836-1279 email: membership@pianational.org | Web Site: www.pianational.org

OKLAHOMA PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

PIA Western Alliance 3205 Northeast 78th Street, #104, Vancouver, WA 98665 PHONE: (360) 571-7100 | FAX: (360) 571-7600 e-mail: piawest@piawest.com | Web Site: www.piawest.com

WEST VIRGINIA PHONE: (703) 836-9340 | FAX: (703) 836-1279 e-mail: membership@pianational.org | Web Site: www.pianational.org

WISCONSIN PIA of Wisconsin, Inc., 6401 Odana Road, Madison, WI 53719-1126 PHONE: (608) 274-8188 | (800) 261-7429 | FAX: (608) 274-8195 e-mail: phanson@piaw.org | Web Site: www.piaw.org

WYOMING Assoc. of Wyoming Ins. Agents, PO Box 1321, Cheyenne, WY 82003 PHONE: (307) 201-4801 | FAX: (775) 796-3122 e-mail: awia@vcn.com | Web Site: www.awia.com

www.pianational.org | PIA CONNECTION

NIPR CELEBRATES 25TH ANNIVERSARY A groundbreaking partnership between the regulatory and insurance communities in producer licensing INNOVATION IN INSURANCE PRODUCER licensing in the U.S. has accelerated in the last few decades, and, since 1996, the National Insurance Producer Registry (NIPR) has been leading the way.

This year, NIPR is celebrating its 25th anniversary. Today’s NIPR is a vital technology company grounded in teamwork, service, and innovation—with incomparable expertise in the state-based system of insurance producer licensing.

It’s hard to imagine that producer licensing was once accomplished with paper applications and a long process of research and validation. Multi-state producers had no choice other than to subject themselves to individual application processes, timelines, and fees for each state in which they did business.

STREAMLINING PRODUCER LICENSING To improve the process, NIPR was formed in 1996 as a unique public-private partnership between the National Association of Insurance Commissioners (NAIC) and the insurance industry.

NIPR was founded on the concept that insurance producers and compliance professionals should have access to a “onestop-shop” for cost-effective, streamlined, uniform licensing across all states and jurisdictions.

Today, NIPR’s Producer Database (PDB) is the single source of comprehensive insurance producer data from all fifty states, the District of Columbia, Guam, Puerto Rico, and the U.S. Virgin Islands. In 2021, the insurance industry used NIPR to process more than 42 million credentialing transactions and move $1.1 billion in fees to state insurance departments.

NIPR’s business is led by a board of directors made up of state commissioners, insurance industry representatives, and NAIC executive leadership—an ideal mix of professionals for coordinated and effective solutions.

PIA has supported and been involved in NIPR since its creation. From 2017-2020, PIA counsel and director of regulatory affairs Lauren G. Pachman, Esq. served as a director on the NIPR board. She currently serves as an ex officio board member. “Serving on the NIPR board has been and continues to be one of the highlights of my career. Karen’s exemplary leadership is inspiring, and she and her team have nimbly

“THE COLLABORATION BETWEEN THE INDUSTRY, PROVIDER COMMUNITY AND REGULATORS HAS BEEN INSTRUMENTAL IN LEADING NIPR’S TRANSFORMATION, PARTICULARLY OVER THE LAST FIVE YEARS.” MICHAEL CONSEDINE, CEO, NAIC PIA CONNECTION | www.pianational.org

“NIPR’S ABILITY TO RESPOND TO CHALLENGE AND CHANGE—TO FULFILL ITS MISSION AND NAVIGATE THE UNKNOWN—IS INEXTRICABLY LINKED TO OUR TALENTED AND ENGAGED TEAM.” KAREN STAKEM HORNIG, CEO, NIPR steered NIPR through challenges and toward opportunities.

Every participant in the insurance industry could learn from the NIPR model,” said Pachman.

“Through the past 25 years, NIPR has adapted to meet evolving industry and producer needs, harnessed the power of emerging technology and responded purposefully to change.

These efforts have allowed us to humanize our technological offerings, ultimately building trust and a collaborative culture, which has been key to our success,” said Karen Stakem Hornig, CEO of NIPR. “This milestone anniversary is a celebration of the people of NIPR—past and present. We honor our volunteer leaders and dedicated employees for their customer-focused excellence. We appreciate the regulators and insurance producers who are our partners and customers,” Hornig said.

‘ONE-STOP SHOP’ Producers can access their own license information and apply for and renew their licenses on the NIPR website. Since 2018, NIPR has also offered a free mobile app that can be used to assist producers with state regulatory and legislative compliance.

Insurance agencies and carriers use NIPR to manage the licensing and appointment process. In the years since it was created, NIPR has supported the industry in its efforts to become more and more efficient and effective. In its 25th anniversary year, PIA celebrates NIPR’s evolution into a highfunctioning organization emphasizing teamwork, service, and innovation.

To view NIPR’s 25th anniversary commemorative booklet, Celebrating Our Journey, go to nipr.com/about.

ABOUT NIPR NIPR is a not-for-profit technology company with the goal of streamlining the producer licensing process. Governed by a board of directors representing state insurance regulators and members of the insurance industry, NIPR is an affiliate of the National Association of Insurance Commissioners (NAIC). To learn more, visit NIPR.com.

2022 V3 | 19

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