PIA Connection—End The Federal Insurance Overreach

PIA CONNECTION

2023 V4

NATIONAL ASSOCIATION OF PROFESSIONAL INSURANCE AGENTS

PRESIDENT

Gerald F. Hemphill, CIC, LUTCF (VA/DC) ghemphill@gfhinsurance.com

PRESIDENT-ELECT

Rich A. Savino, CIC, CPIA (NY) richs@broadfieldinsurance.com

VICE PRESIDENT/TREASURER

Ariel Rivera, CIC (PR) ariel@deerinsurance.com

SECRETARY/ASSISTANT TREASURER

Mark A. Suhr, CIC, CPIA (NE) msuhr@suhrlichty.com

IMMEDIATE PAST PRESIDENT

Anthony Curti, CIC, LIC (MI) tcurti@acrisure.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

Shawn Moynihan

May 2023

PIA Connection is published ten times yearly by the National Association of Professional Insurance Agents. 419 North Lee Street

Alexandria, Virginia 22314

©2023 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.

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.

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

NEWS BRIEF

Costs of Dog Bites Rise by Double Digits…First Three Months of 2023 Had a Record 400+ Tornadoes…Time to Consider Flood Insurance…P/C Insurance Industry Had a $26.9 Billion Net Underwriting Loss in 2022… Outgoing CEO: NAIC “At Its Strongest Position Yet”… Colorado to Consider Forming “Insurer of Last Resort.” REGULATORY BRIEF

PIA Counsel and Director of Regulatory Affairs Lauren G. Pachman, Esq. with a summary of federal regulatory activity. CAPITOL

PIA Vice President of Government Relations Jon Gentile with an update on

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The very existence of the Federal Insurance Office (FIO) threatens the primacy of state regulation. PIA opposed the creation of the FIO from the outset and in November 2016, PIA became the first national insurance association to publicly call for the repeal of the FIO.

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PIA supports a forum that was part of the Travelers Institute’s Cyber: Prepare, Prevent, Mitigate, Restore® initiative, a national series of educational symposia helping businesses and organizations tackle evolving cyber

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Thank you to our valued agency partners.

Westfield was founded in 1848 by a small group of hardworking farmers who believed in the promise of the future and the power of the individual. Today, 175 years later, as a leading U.S.-based property and casualty insurance company with $8.5 billion in GAAP assets, Westfield underwrites commercial, personal, surety, and specialty lines of coverage through a network of over 1,000 leading independent agents and brokers. Westfield recently acquired Lloyd’s of London Syndicate 1200, establishing the Company as a global franchise. Learn more at westfieldinsurance.com.

Pictured below: The Broadcaster launched in 1922 as a way for employees and agencies to share information. Image provided by Westfield Archives.

FROM THE PRESIDENT

ONE

OF PIA’S FOUR KEY PILLARS IS ADVOCACY.

Our members and industry have come to expect an aggressive, dedicated, professional and engaged voice to appropriately support and/or oppose the many legislative actions that affect our industry.

PIA stands second to none in this effort. Each year, PIA holds an Advocacy Day in Washington, D.C. during which members converge on Capitol Hill to meet with our elected representatives to let them know our concerns and priorities in an effective manner—up close and personal. We also meet with key government officials and regulators who set policy in insurancerelated areas such as crop insurance and flood insurance.

But PIA’s advocacy is not a one-day affair. Our engagement with legislators, regulators and policymakers is a year-round endeavor. The agents who gather in our nation’s capital each year for PIA Advocacy Day form the vanguard of a nationwide agent force that is fully engaged at the national, state and local levels. I encourage you to be part of our Advocacy efforts, as they are among the most powerful and unique member experiences.

FROM THE CEO

TECHNOLOGY HAS THE POWER TO CHANGE how independent agencies work with customers. There are many potential opportunities – and recently, more and more questions -- as new capabilities unleashed by rapid advances are quickly deployed.

Agents are always looking for new solutions that will drive client satisfaction, more business, and better profits. That’s why PIA recently formed the PIA Technology Council, to position independent agents at the forefront of this rapid advance in technology.

The group’s mission is to advance agents’ access to and adoption of technology, enabling them to grow revenue, profits, and market share. This council of technology leaders will provide ideas, input, and insights on technology and agents to PIA and PIA leadership. In turn, solution providers will have opportunities-–both in person and online—to drive awareness among agents.

The Council will meet with PIA leadership and other members to discuss agency trends and strategies, market

As 2023 has shown a continued volatile insurance market, with rising inflation & material costs, associated delays with claims, unprecedented reinsurance increases, and consumer inquiries to our members, there has never been a more important time to support your Association and take advantage of all PIA has to offer.

I encourage all our members to regularly check the National PIA website www.pianational.org, as its constantly being updated with information, products and services, National and Affiliate events, education opportunities, and a comprehensive listing of Member benefits.

Gerald F. Hemphill President

outreach, and learn about opportunities for meetings, education, and other agent communications both nationally and regionally.

As of the time of publication, four insurtechs have officially become founding members of the PIA Technology Council: AgentSync, blueC, HawkSoft; and Xanatek. We’re adding additional members and look forward to launching the full council with a meeting in June.

Technology continues to advance at an accelerating pace, improving agency efficiencies, the customer experience, and the insurance industry as a whole. PIA’s Technology Council will help ensure that the digital landscape will be beneficial to independent agents.

Mike Becker CEO

COSTS OF DOG BITES RISE BY DOUBLE DIGITS

The Insurance Information Institute (Triple-I) found a 2.2% drop in the number of dog-related injury claims nationwide in 2022, but the cost of such claims rose 28% from 2021, totaling $1.3 billion.

Average costs of dog-related injuries rose 32% year on year per claim, totaling $64,555. “Educating dog owners about being responsible will reduce dog-related injuries because, under the right circumstances, any dog might bite,” said Triple-I’s Janet Ruiz.

FIRST THREE MONTHS OF 2023 HAD A RECORD 400+ TORNADOES

The number of preliminary tornado reports this year reached over 400 reports by March 31, a record for the first three months of the year since recordkeeping began in 1950, according to a National Weather Service (NWS) analysis. The NWS recently updated the number of preliminary tornadoes in the country since the year began, putting the number at 466. The preliminary figure is a record-high tornado count through the first three months of the year since record-keeping began in 1950. As storm data is finalized, the count may change.

TIME TO CONSIDER FLOOD INSURANCE

Spring is a good time for people to start thinking about buying flood insurance, says the Colorado Division of Insurance. As homeowners insurance doesn’t cover flood damage, flood insurance must be purchased as a separate policy. And when just one inch of flood water can cause thousands of dollars in damage, it is valuable coverage.

Because there is typically a 30-day waiting period after applying and paying the first premium for the insurance to become effective, now is the time to consider flood insurance. Floods

can happen anywhere, anytime. About 25% of all flood insurance claims come from outside of highrisk areas. Regardless of the risk factor of an area, homeowners insurance does not cover flood damage, which is why separate flood insurance is so important.

Contact your insurance agent about buying flood insurance!

P/C INDUSTRY HAD A $26.9 BILLION NET UNDERWRITING LOSS IN 2022

Key financial results for private U.S. p/c insurers significantly worsened in 2022 from a year earlier, according to preliminary results from

Verisk, a leading global data analytics provider, and the American Property Casualty Insurance Association (APCIA). The industry experienced a $26.9 billion net underwriting loss in 2022, more than six times the $3.8 billion underwriting loss in 2021. The underwriting loss was the largest the industry has seen since 2011.

“Hurricane Ian and the effects of inflation resulted in major losses for property insurers last year, while accident severity continued to plague personal and commercial auto lines,” said Neil Spector, president of underwriting solutions at Verisk.

OUTGOING CEO: NAIC “AT ITS STRONGEST POSITION YET”

The National Association of Insurance Commissioners is at its strongest position yet with regard to leading and supporting the state-based system of insurance regulation, said the NAIC’s outgoing chief executive.

Michael Consedine, in an interview with BestWire, said he went into the position with the intention of leaving the organization in better shape than when he started six years ago. He said he feels confident the NAIC hit that goal under his leadership but with the support and effort of the staff and NAIC members.

“The NAIC is in the strongest position it’s ever been both as a support organization and as a standard setter,” he said. “It’s really the primary voice of insurance in the U.S. and representing the U.S. internationally.” Consedine also said he is “extraordinarily proud” of the NAIC’s strides on diversity, equity and inclusion goals.

COLORADO TO CONSIDER FORMING “INSURER OF LAST RESORT”

While Florida and Louisiana have experienced problems in recent years with ballooning participation in

their respective “insurers of last resort,” Colorado may move to form such an entity. Colorado lawmakers have introduced legislation that would establish a state-run Fair Access to Insurance Requirements Plan for businesses and homeowners unable to

secure property coverage from private insurers.

Under the bill (HB 1288), the governor would appoint a nine-member board by Jan. 1, 2024, that would have until July 1 to establish and submit a plan of operation to the

insurance commissioner for the property insurer of last resort, reports Business Insurance

In the last five years, Colorado has experienced three of the largest wildfires in its history.

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

REGULATORY BRIEF

FEDERAL REGULATORY ACTIVITY

EARLIER THIS YEAR, THE Federal Trade Commission

(FTC) issued a notice of proposed rulemaking (NPRM) that would ban the use of non-compete provisions and agreements between employers and workers in all economic sectors. The NPRM invited members of the public to comment on the proposal, and PIA submitted comments on behalf of our independent agency members. Independent agencies are among millions of businesses that rely on non-competes to protect their livelihoods. For that reason, and featuring extensive, direct feedback from PIA members, our comments requested that the FTC withdraw its proposal in favor of a more tailored policy that would address the alleged corporate overuse of such documents.

Our comments set forth several arguments, a sampling of which are summarized below:

· The FTC lacks the authority to ban non-competes, and its NPRM infringes on states’ rights to regulate contracts. In insurance specifically, the proposal would also improperly disrupt our successful statebased insurance regulatory system. If finalized as written, the proposed ban would preempt existing state law and disrupt the local economies of the 47 states that permit the use of non-competes.

The NPRM is overly broad. Its definition of “workers” includes employees, volunteers, interns, and independent contractors, whether paid or unpaid. It would ban future non-competes, and

By Lauren G. Pachman, Esq.

it would rescind existing noncompetes—whether they involve existing or former workers. It would require employers to notify current and former workers of the ban and would unilaterally invalidate existing non-competes, regardless of the interests of the parties involved.

The NPRM would invite expensive, lengthy litigation by businesses trying to extract greater specificity from the FTC and prevent bans on other, less restrictive covenants.

Now that the comment period has ended, the FTC will review the comments it received and likely make changes to the NPRM. Considering the extensive feedback garnered by the proposal, the FTC will probably issue a revised NPRM and solicit further public comment before finalizing a policy.

In March, PIA and other agent groups sent a letter to the Risk Management Agency (RMA) urging the agency to reinstate an inflation adjustment for crop agents that had been in place until 2016. Earlier this month, RMA responded to the letter and advised us that, without renegotiating the Standard Reinsurance Agreement (SRA), it could not reinstate the inflation adjustment. RMA’s position conflicts with the report language included in last year’s omnibus appropriations bill, which laid out Congress’s conclusion that RMA could legally reinstate the inflation adjustment without renegotiating the SRA.

STATE REGULATORY ACTIVITY

The National Association of Insurance Commissioners (NAIC) is in the process of updating the regulatory framework that forms the basis for all 50 states’ insurance consumer data protection regimes. Late last year, the NAIC’s Privacy Protections Working Group announced plans to consolidate two of its existing models: the 1992 Insurance Information and Privacy Protection Model Act (MDL670) and the Privacy of Consumer Financial and Health Information Regulation (MDL-672, which was developed in response to the 1999 passage of the Gramm-Leach-Bliley Act [GLBA] and its threat of federal oversight), into one new model, which will be known as the Insurance Consumer Privacy Protection (ICPP) Model Law (MDL-674). The initial draft of the ICPP model was exposed for a 60-day comment period that ended earlier in April.

PIA submitted a comment letter and draft markup reflecting our comments and offering edits to the draft text. We have been and will continue to collaborate with members of the Working Group to help regulators understand the unique challenges that the model, as drafted, could present to independent agents.

PIA will continue to offer updates on these and other regulatory developments as they become available. For the most updated information, please check out our advocacy blog at www.piaadvocacy.com

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

CAPITOL HILL UPDATE

By Jon Gentile Vice President, Government Relations PIA National

RMA TO PIA: REINSTATEMENT OF INFLATION ADJUSTMENT WOULD REQUIRE SRA RENEGOTIATION

RECENTLY, THE RISK Management Agency (RMA) responded to a letter sent by PIA and other agent groups, including the Crop Insurance Professionals Association, urging them to reinstate the inflation adjustment for crop agents. In its response, the RMA stated that, without renegotiating the Standard Reinsurance Agreement (SRA), it cannot reinstate the inflation adjustment, despite Congress’s recent confirmation that it is within RMA’s legal authority to do so.

Last fall, PIA and its allies successfully advocated for the inclusion of provisions in the omnibus appropriations bill stating the view of Congress that RMA has the legal authority to reinstate the inflation adjustment without renegotiating the SRA. Despite Congress’s conclusion that RMA has the power to restore the inflation adjustment, RMA continues to deny it has the legal authority to do so.

PIA will continue to advocate in support of the reinstatement of the inflation adjustment for crop agents.

PIA URGES REFORMS IN FLOOD INSURANCE HEARING TESTIMONY

The House Financial Services Committee Subcommittee on Housing and Insurance held a hearing entitled Encouraging Greater Flood Insurance Coverage in America. This hearing focused not just on the National Flood Insurance Program (NFIP) but also on the overall accessibility and availability of flood insurance, as well as ways to increase flood insurance coverage across the country.

This was the first hearing in the House of Representatives focused on flood insurance of the 118th Congress and the first since a May 2022 hearing on NFIP reauthorization and reform, at which PIA of Puerto Rico National Director and current PIA National Vice President, Ariel Rivera-Miranda, testified on PIA’s behalf.

PIA submitted testimony for the record for this hearing, noting our support for the NFIP because it provides critical flood insurance coverage and post-disaster relief to residential and commercial property owners. We also highlighted our support for H.R. 1392, which would extend the NFIP beyond its current expiration date of September 30, 2023, to December 31, 2024. H.R. 1392 was recently introduced by Rep. Warren Davidson (R-OH), the chairman of this subcommittee. Passage

of this bill would provide Congress with additional time in which to consider various ways to reform the program and reauthorize it long term. In our testimony, we note that we would also support a longer-term “clean” extension of the program (without reforms) to give Congress additional to agree on reforms.

We also highlighted one of PIA’s top priorities for any long-term NFIP reauthorization, the inclusion of a continuous coverage provision like the one contained in H.R. 900, the Continuous Coverage for Flood Insurance Act, a bipartisan bill recently introduced by Reps. Kathy Castor (D-FL) and Blaine Luetkemeyer (R-MO). Continuous coverage would allow policyholders to move between the private market and the NFIP without penalty.

Beyond the hearing, as the effort to reauthorize the NFIP continues this Congress, PIA will also caution against provisions that would harm independent insurance agents’ involvement in the NFIP. Specifically, PIA will oppose any legislation that includes proposals like cutting the Write Your Own Reimbursement Rate or creating an online NFIP sales model unless it includes a clear role for independent agents.

PIA PUTS SPOTLIGHT ON FIO IN HOUSE COMMITTEE HEARING TESTIMONY

The House Financial Services Committee’s Subcommittee on Oversight and Investigations held a hearing entitled: “Holding the Biden Administration Accountable for Wasteful Spending and Regulatory Overreach.” PIA submitted written testimony for the record in advance of the hearing to highlight the recent actions by the Federal Insurance Office (FIO).

In 2010, in a misguided response to the 2008-2009 financial crisis, advocates of federal insurance regulation created the FIO as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as Dodd-Frank). PIA opposed the creation of the FIO from its inception; its very existence threatens the primacy of statebased insurance regulation.

In our written testimony, we noted that the states are the proper place for the regulation of insurance; state regulation has served the insurance industry and consumers well for over 100 years. Any attempt to increase the scope of the federal

And 600+ more

TRUST ACCOUNTING AND WHAT YOUR AGENCY MIGHT BE MISSING

AS

AN AGENCY OWNER,

there is so much more to running your business than just selling insurance. You are also focused on building the right team, training them appropriately, marketing, keeping your pulse on financials, implementing the right technologies, and managing the various ways you engage with carriers and brokers (just to name a few things that might keep you up at night). All these areas require careful thought and planning, but some tend to be overlooked, like Trust Accounting. This is an area that is hardly ever talked about and so many agency owners have no idea what trust accounting is, why it is important, and how to best position their agency.

WHAT IS TRUST ACCOUNTING?

Trust Accounting refers to any type of financial account that is opened by an individual or company and managed by a designated trustee for the benefit of a third party per agreed-upon terms.

A basic example would be a parent who can open a bank account for the benefit of their child and stipulate rules to when the minor can access the funds or assets in the account as well as any income they generate. In most cases, the trustee who manages the funds and assets in the account acts as a fiduciary, meaning the trustee has a legal responsibility to manage the account prudently and manage assets in the best interests of the beneficiary.

In insurance context, an example would be if an insured (third party) pays for their insurance policy in full, sending the entire premium payment to the insurance agency (trustee). The insurance agency is then responsible for ensuring the insurance company

receives the insured’s payment minus any commission that is owed to the agency, so the insured’s policy is in force. This arises in any situation where the agency bills the customer directly. The amount of agency bill business can vary greatly from agency to agency depending on the insurance marketplace, the type of business that the agency writes, and the particular carriers and brokers that the agency has access to through their direct appointments or partner relationships.

WHY IS TRUST ACCOUNTING IMPORTANT?

While trust accounting sounds simple in practice, scaling up and tracking agency bill transactions without the right processes in place gets difficult. Agency bill transactions can become difficult to track if the right processes are not in place. Remember, as the insurance agency you are the fiduciary of your client’s policies from a financial standpoint. When payments are late from your clients or a policy cancels, headaches start to creep in and carriers come knocking for their premium dollars. If an agency does not keep close track of transactions or even worse, combines the agency funds with the funds that are being held on behalf of the carrier, the agency can quickly become ‘out of trust.’ Being ‘out of trust’ means that the agency does not have enough funds to pay the carrier the amount that is due and it will be difficult to unravel the mess.

HOW CAN YOU BEST POSITION YOUR AGENCY?

Here are the key things you need to do to stay in trust and avoid any unnecessary issues in maintaining your accounting records:

Open a separate Trust Account

This account is where you will deposit all of your agency bill receipts. By having a separate account, you can easily track the agency bill accounts and keep track of the funds that you must remit to the carrier related to these accounts. This will also limit the transactions that will need to be reviewed if a problem occurs, making it easier to reconcile.

Create clear processes and procedures. The people who are involved with receiving income in the agency must have a clear understanding of what distinguishes agency bill and direct bill and how to manage the different types of income that are being collected by the agency. You will need to outline the receipts that can be deposited in the operating account as well as those that must be deposited in the trust account. For those receipts where the correct deposit account is uncertain, establish a clear process on how to resolve these questions. Providing clear guidelines on how to manage agency bills and direct bill income will minimize errors and ease the process of reconciling accounts.

Limit access to the operating account and trust account. Do not allow anyone that does not have a clear understanding of these processes to have access to the accounts. It is important to note that a CPA or accounting firm most likely will not understand the trust accounting rules that are unique to an independent insurance agency, so the agency owner needs to make this clear from the beginning of any new accounting relationship.

Be consistent. Reconcile each account and ensure that the carriers

END FEDERAL INSURANCE OVERREACH

Repeal the Federal Insurance Office to Protect the State Regulatory System

By Lauren G. Pachman, Esq.

and economic circumstances.

PIA strongly supports our thriving, state-based insurance regulatory system and opposes federal law and regulatory action that encroach on and thus threaten it. The existence of the FIO is an unnecessary threat to the state insurance

FEDERAL INSURANCE OFFICE

Over decades, advocates of enlarging our already sprawling and bloated federal bureaucracy have sought to remove state insurance regulatory authority in favor of empowering the federal government to regulate insurance. Some of these efforts have been disingenuous, like a proposal to offer a nominally “optional” federal charter for carriers and producers, which would have inevitably led to a de facto dismantling of the state-

In 2010, in a misguided reaction to the 2008-9 financial crisis, advocates of federal insurance regulation passed the Dodd-Frank Wall Street Reform and Consumer Protection Act (commonly referred to as Dodd-Frank), which created the Federal Insurance Office (FIO). PIA opposed the creation of the FIO from its inception; its very existence poses a constant and existential threat to the primacy of state-based insurance

Many of the FIO’s statutory duties are examples of federal overreach and are duplicative of activities that are already being done by the states within our existing regulatory system. Additionally, like most federal offices do, the jurisdictional authority of the FIO has consistently expanded since its

Insurance has been regulated at the state level for more than a century, and Congress has routinely reaffirmed that jurisdictional authority legislatively, beginning with its 1945 passage of the McCarran-Ferguson Act, which exempted the business of insurance from most federal law and regulation. At the time, Congress opted to make explicit its delegation of insurance regulatory power to the states, and, since then, Congress has consistently reinforced that position.

For over a century, state insurance regulation has worked well for policymakers, consumers, and members of the industry. Its success is tied directly to the fact that, comparatively, state insurance regulators have far greater familiarity with and flexibility to address their residents’ insurance needs within the context of their specific geographic

In the nearly fifteen years since Dodd-Frank was passed, the FIO has sought to federally regulate mortgage insurance; to be included in international supervisory colleges; and to promulgate uniform national standards for state guaranty associations. Every one of these acts is well outside the FIO’s mandate. In addition, over the years, it has sought to be considered as a potential overseer of the National Association of Registered Agents and Brokers (NARAB).

In November 2016, PIA became the first national insurance association to publicly call for the repeal of the FIO. We support the Federal Insurance Office Elimination Act, sponsored by Rep. Ben Cline (R-VA), and a companion bill was introduced by Sen. Ted Cruz (R-TX), both initially introduced during the 117th Congress. In the 118th Congress, PIA succeeded in getting both the House bill and companion Senate legislation reintroduced.

“THE VERY EXISTENCE OF THE FEDERAL INSURANCE OFFICE (FIO) THREATENS THE PRIMACY OF STATE REGULATION.”

RECENT OVERREACH BY THE FIO

Climate Risk Activity

The administration’s May 2021 Executive Order (EO) on Climate-Related Financial Risk provided the FIO with directives that exceed its mandate. In so doing, the administration demonstrated again the regulatory overreach engendered by the FIO’s very existence. The EO instructed the Treasury Secretary to direct the FIO to, among other tasks, assess “climate-related issues or gaps in the supervision and regulation of insurers,” even though the insurance industry has long been successfully regulated by the states rather than the federal government. In response, the Treasury Secretary issued a Request for Information on the Insurance Sector and Climate-Related

Financial Risks

In response, PIA registered its objections to the existence of the FIO and this broadening in scope of its mandate. Specifically, PIA said that any necessary climate assessment should be conducted by state insurance regulators and not by the federal government. In the past year, the FIO contacted state insurance departments requesting zip-code-level data regarding property insurance coverages, liabilities, and losses. In accordance with the FIO’s communication with state insurance departments, the Treasury Secretary then announced its intent to pursue a data collection on climaterelated financial risks and solicited comments on the project. The data collection would request information from more than 200 property and casualty (P&C) insurers across 34 states regarding each insurer’s current and historical homeowners’ insurance underwriting data. If executed, this data collection will only serve to further improperly expand the FIO portfolio.

PIA registered its objections to the proposed data collection, noting that it would be unnecessarily duplicative of the deliberative, targeted regulatory data collections in which state insurance departments typically engage and that it would impose an unnecessary burden on proposed respondents. The proposed climate-related data collection is another example of FIO’s improper and ongoing overreach into the regulation of the insurance sector.

Troubling Report Language

During the Fiscal Year 2023 appropriations process, Congress considered including draft report language in the House Financial Services and General Government appropriations bill that would have contained several troubling messages to the FIO. Specifically, the report language being considered would have expressed approval of the FIO’s recent investigation of climate-related insurance risk and would have noted that its forthcoming report is expected to include a study of the effect of wildfire risk on the insurance sector and how to ensure the continued affordability and availability of home, business, and commercial property insurance against wildfire losses.

The draft committee report language would have also

directed the FIO to gather data on property damage exclusions in homeowners’ and renters’ insurance policies covering both property damage and liability across the industry. The draft report language would also have requested that the FIO investigate the types of property damage that are excluded from coverage; whether insurance companies offer “riders,” or supplemental insurance policies, to cover such exclusions; and whether and at what rates consumers purchase such supplements.

Finally, the draft committee report language would have directed the FIO to examine the impact of non-driving related factors like credit history, homeownership status, census tract, marital status, professional occupation, and educational attainment, on the affordability of auto insurance premiums for traditionally underserved communities.

Thankfully, this report language was ultimately cut from the final report accompanying the year-end omnibus. However, expansive directives like these will continue until Congress eliminates the threat the FIO poses to the state insurance regulatory system by repealing the office for good.

FIO Annual Report

The FIO’s annual report sets forth the intended scope of its office; each report makes clear the FIO’s intent to continue to expand its work into new areas. For example, in its 2022 report, the FIO announced its intent to explore the following areas: Monitoring macroeconomic developments and assessing their financial implications for the U.S. insurance industry

· Monitoring climate-related financial risks

Monitoring the role of the insurance industry in improving the nation’s cybersecurity

· Assessing the affordability and availability of auto insurance products for underserved communities and consumers

Assessing the affordability and availability of homeowners’ insurance for underserved communities and consumers

CONCLUSION

State regulation has served the insurance industry and consumers well for over 100 years, and it remains the proper venue for the regulation of insurance. Attempts to expand the federal government’s role in insurance regulation are inappropriate and, if successful, will negatively affect policyholders and agents alike.

The FIO should be repealed; at a minimum, its growing authority must be curtailed before it spreads any further. Repeal of the FIO is the only way to safeguard the primacy of the state insurance regulatory system and guard against further federal encroachment.

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

7,000 Appx

pianational org/propeller

PIA JOINS TRAVELERS IN FIGHT AGAINST CYBER THREATS

The Travelers Institute presented an impactful discussion of one of the biggest issues facing business today: threats to cybersecurity. The forum was part of the Travelers Institute’s Cyber: Prepare, Prevent, Mitigate, Restore® initiative, a national series of educational symposia helping businesses and organizations tackle evolving cyber threats.

The event was held on March 21, 2023 and broadcast live from the New York Stock Exchange (NYSE).

“PIA was happy to support an event that put focus on a critical challenge facing the industry and the entire business community,” said PIA CEO Mike Becker who represented PIA at the event along with Tom Wilkens, president of PIA of New Jersey. “Congratulations to Travelers for executing a successful event.”

Travelers Institute President Joan Woodward was joined in a panel discussion by Valerie Cofield, Chief Strategy Officer at the Cybersecurity and Infrastructure Security Agency; Tim Francis, Enterprise Cyber Lead at Travelers; Ryan Hebert, Business Information Security Officer at the NYSE; and Jennifer Coughlin, founding partner at Mullen Coughlin LLC.

CAPITOL HILL UPDATE

CONTINUED FROM PAGE 9

administrative state’s role in the regulation of insurance is inappropriate and would negatively affect policyholders. We also highlighted several areas related to the FIO that have been concerning recently: in the FIO’s recent climate risk data collection; with recent report language that, while unsuccessful in part thanks to PIA’s advocacy efforts, would have directed the FIO to gather data on property damage exclusions in homeowners’ and renters’ insurance policies, as well as examine the impact on the auto insurance market of non-driving related characteristic homeowners’ and renters’ insurance; and in the recent 2022 FIO annual report where the FIO laid out its intended scope for its office.

The FIO should be repealed, or its mandate significantly curtailed. Some substantial limitation on its growing authority is the only way to protect the primacy of state insurance regulation and ensure against further federal encroachment.

PIA is pleased by the reintroduction the “Federal Insurance Office Elimination Act,” by Rep. Ben Cline (R-VA) with companion legislation introduced in the Senate.

PIA will continue to encourage support for legislation that would repeal the FIO, or meaningfully reform it, in the 118th Congress.

Jon Gentile is vice president of government relations for PIA National.

TRUST ACCOUNTING AND WHAT YOUR AGENCY MIGHT BE MISSING

CONTINUED FROM PAGE 11

are paid the portion that is owed to them. Once that has been completed, you can calculate the amount that the agency can keep for each of the policies. Once a month move the agency’s money into its operating account, being sure that you have clear documentation for each account that makes up the total amount being transferred each month. Adopting this process will allow you to limit the number of transfers with a limited

number of transactions to research if there is ever a problem. Documentation is key. Clear records of how you reconciled each customer account is critically important. This will be essential if your agency is ever subject to an audit and ensures that the process goes smoothly. There are a lot of things to consider to ensure your agency is well-protected and remains financially sound. Agencies that have clean financial

statements and well-thought-out policies and procedures are much better positioned in both internal and external ownership transitions than those that have messy books and questionable liabilities.

This is where PIA and Ascend come in to help.

Tom Wilkens, President of PIA of New Jersey (l), PIA CEO Mike Becker

YOUR PIA MEMBER BENEFITS

BUSINESS-BUILDING TOOLS

✦ DISABILITY INSURANCE. With instant quotes, an online application process, and case management done for you, Breeze makes it easy to earn competitive commissions and grow revenue by offering top-rated disability insurance to clients. pianational.org/breeze

✦ 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. pianational.org/hartford

✦ 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). pianational.org/moneyformembers

✦ PIA DMV: PIA’S DIRECT MARKETING VAULT. Targeted direct mail and digital advertising campaigns. Turn-key yet highly customizable. pianational.org/dmv

✦ MARKETING SUPPORT FOR PIA MEMBERS. Print ads, radio commercials, consumer-oriented flyers and social media support for PIA members. Plus a guide with tips from industry experts. pianational.org/marketingsupport

✦ PIA MARKET ACCESS. Access to over 50 national and specialty carriers, real-time online rating, ownership of your book and no exit fees for a low monthly rate. pianational.org/marketaccess

✦ 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! pianational.org/avyst

✦ ROUGH NOTES - ADVANTAGE PLUS. Helps identify risk exposures and provides detailed coverage analysis for C/L and P/L. Save $200/year with PIA member discount. pianational.org/roughnotes

INSURANCE PRODUCTS

✦ 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. pianational.org/eando

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

✦ CYBER LIABILITY INSURANCE. Coverage and pricing tailored to small and mid-sized businesses. pianational.org/cyberinsurance

TOOLS FROM THE PIA PARTNERSHIP, PIA’S COMPANY COUNCIL

✦ WINNING@CUSTOMER RETENTION. Designed to help you improve customer service and retention with resources to track client retention rates, segment, and communicate with your customers. pianational.org/customerretention

✦ WINNING@CYBERSECURITY DEFENSE. An action oriented educational resource created to teach you and your clients about the most common cyber dangers faced by small and mid-sized businesses as well as the best business practices and insurance coverages that can reduce these risks. pianational.org/cybersecurity

✦ WINNING@VIRTUAL. Your guide to evolving your sales and service in a digital world. pianational.org/winningatvirtual

✦ READY FOR EVERYTHING. The online crisis resource hub for insurance agents. pianational.org/readyforeverything

✦ WINNING@TALENT. Your guide to hiring, motivating and retaining the best agency employees. pianational.org/winningattalent

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

✦ 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. pianational.org/voiceofthecustomer

✦ CLASSIC PIA PARTNERSHIP PROGRAMS: Less recent (but still relevant) programs including Reaching Gen Y, Closing the Gap, Agency Touchpoints and Practical Guide to Succession Planning. pianational.org/classicprograms

AGENCY MANAGEMENT TOOLS

ASCEND. Simplifying payment to increase customer retention and team efficiency - improving your agency’s bottom line. pianational.org/ascend

PROPELLER. The completely automated way to sell surety bonds. pianational.org/propeller

✦ PIA 401(K). The PIA 401(k) plan has you

covered by performing over 90% of administrative tasks and becoming your retirement department support team. pianational.org/401k

✦ PIA BLUEPRINT FOR AGENCY SUCCESS. A 3-part resource guide for business planning, growth strategies, and agency continuity. pianational.org/blueprint

✦ 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. pianational.org/acord

✦ AGENCY AGREEMENT REVIEW SERVICE. Free to members and carriers, PIA recommends changes to carriers and highlights concerns for members. pianational.org/agreementreview

✦ EMPLOYEE PROFILING. Hire the right people with skills and personality testing from OMNIA. pianational.org/omnia

✦ HIRE WITH IDEALTRAITS. The comprehensive, go-to hiring tool for agencies looking to hire top performers. pianational.org/idealtraits

✦ THE AGENT EXPERIENCE. Practical information and resources to help you develop and grow customer relationships online. pianational.org/agentexperience

EDUCATION

✦ TOP TIER EDUCATION. PIA members have access to and receive discounts on prelicensing courses, designation classes, and continuing education courses.

LEGISLATIVE & REGULATORY OUTREACH

✦ PIA ADVOCACY BLOG. Timely updates about what’s happening on Capitol Hill and on state and federal regulatory issues. PIAAdvocacy.com

✦ GRASSROOTS ALERTS. Send pre-written, fully-editable letters directly to your elected officials. 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. 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. pianational.org/piapac

CAN A CRISIS MAKE YOUR AGENCY STRONGER?

The answer is yes according to many who weathered disasters like fire, storms and floods and the COVID health crises— have found opportunities to connect with customers in new ways, stress test work-at-home capabilities, and build greater teamwork.

Insurance agencies are well-versed in all types of crises, regularly steering clients through the claims process after a crises. Good planning, flexibility, and work-from-anywhere technology are key to surviving – and thriving – during any crisis.

Prepare for disasters with Ready For Everything. This hub brings together information for crisis planning and preparation. The specific resources within this program include:

• Tools available to help teams collaborate

• Tips on how to manage employees remotely

• Guidance on how to protect information when out of the office

• Remote Set-Up and Management

• B est practices for creating a plan

• Avenues for financial assistance

• Technologies that can help

• Ideas for maintaining constant communications

• Types of information to share

• Technologies to ensure information gets out quickly

• Crisis Planning

• Employee and Customer Communications

PIA AFFILIATES

ALABAMA

PIA Southern Alliance, 3805 Crestwood Pkwy NW #140, Duluth, GA 30096 | PHONE: (770) 9217585 | FAX: (770) 921-7590 | e-mail: info@piasouth.com | Web Site: piasouth.com

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) 2464466 | FAX: (360) 571-7600 | e-mail: piawest@piawest.com | Web Site: www.piawest.com

COLORADO

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

Web Site: www.pianational.org

CONNECTICUT

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

DELAWARE

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

Web Site: www.pianational.org

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) 2625355 | 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

INDIANA

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

KANSAS

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

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) 7667770 | (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) 6231875 | FAX: (207) 626-0275 | e-mail: lisa@maineagents.net | Web Site: www.maineagents.net

MARYLAND

Insurance Agents & Brokers of Maryland, 650 Wilson Lane, Suite 200, Mechanicsburg, PA 170554440 | PHONE: (717) 795-9100 | FAX: (717) 795-8347 | e-mail: iab@iabforme.com

Web Site: www.iabforme.com

MASSACHUSETTS

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

Web Site: www.pianational.org

MICHIGAN

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

MINNESOTA

PIA of Minnesota, 8646 Eagle Creek Circle, Suite 202, Savage, MN 55378 | PHONE: (866) 6947070 | FAX: (866) 749-8678 | e-mail: info@piamn.com | Web Site: www.piamn.com

MISSISSIPPI

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

MISSOURI

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.moagent.org

MONTANA

PIA Western Alliance, 3205 NE 78th St Ste 104, Vancouver, WA 98665-0697 | PHONE: (888) 2464466 | FAX: (360) 571-7600 | e-mail: piawest@piawest.com | Web Site: www.piawest.com

NEBRASKA/IOWA

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

NEW HAMPSHIRE

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

NEW JERSEY

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

NEW YORK

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

NORTH CAROLINA

PIANC, 1059 Technology Park Dr, Glen Allen, VA 23059 | PHONE: (804) 264-2582

e-mail: kevin@pianc.net | Web Site: www.pianc.net

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

OREGON/IDAHO

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

PENNSYLVANIA

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

Web Site: www.pianational.org

PUERTO RICO & CARIBBEAN

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

RHODE ISLAND

PHONE: (703) 836-9340 | FAX: (703) 836-1279

e-mail: membership@pianational.org | Web Site: www.pianational.org

SOUTH CAROLINA

PIA of South Carolina, PO Box 6167, Columbia, SC 29260 | PHONE: (803) 772-0557 | (888) 7426372 | FAX: (803) 772-0846 | e-mail: PIASC@piasc.net | Web Site: www.piasc.net

SOUTH DAKOTA

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

Web Site: www.pianational.org

TENNESSEE

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

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

UTAH 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

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

PIA Assn of Virginia & DC 1059 Technology Park Dr, Glen Allen, VA 23059 | PHONE: (804) 2642582 | FAX: (804) 266-1075 | e-mail: kevin@piavadc.com | Web Site: www.piavadc.com

WASHINGTON/ALASKA

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., 725 Heartland Trl Ste 108, Madison, WI 53717-1976 | 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

Technology can establish and strengthen your agency’s customer relationships – if you have the right people and processes in place. Our 3-part toolkit will help you make the most of today’s digital solutions. You can use it to: assess your virtual readiness; decide which technologies are right for you; calculate ROI on the solutions you choose; apply best practices for maximum results; and learn from other agencies. There’s a big shift taking place in insurance. Visit WinningAtVirtual.com and discover how you can not only get prepared, but win.

Brought to you by The PIA Partnership – PIA’s national carrier council. Partnership companies include:

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