Main Street - February 2013 by Cathy Klasi

INSIDE PIA National Sets Federal Legislative Summit »7 AIG Survey — Cyberattack a Big Worry »13 PIA National — 500th Agent Microsite in Partnership with Agoragate »17 TRIA Renewal — A Very Tough Road »22

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February 2013 | Published Monthly

Insuring the Midlands Since 1891 Les Hileman, CPCU, AIC Vice President of Agencies 800-742-7433 lhileman@fmne.com

Did you

know

Flood Is The New Hot Insurance Product!! Interest in flood insurance is growing since Superstorm Sandy or Tropical Cyclone or whatever you want to call it. You may be getting calls and queries about flood insurance. Selling flood insurance already? Then you’re ready to go. If you’re not selling through the PIA, read on and then visit PIA National’s Flood Insurance Marketing Support Center. Agencies flirting with selling flood can get help from the PIA. We offer flood insurance through The Hartford. The program is available in all states. The Hartford Flood program offers an easy enrollment process, competitive commissions and allows you to broaden what you can offer to customers in areas susceptible to flooding. For PIA members enrolled in The Hartford Flood Program, the following Surplus Lines flood insurance coverages are available through WNC First Insurance Services: • Excess Flood Insurance with policy limits in excess of the maximum NFIP limits are property coverage up to $15,000,000 in all states and contents coverage up to $1,000,000. There is no commercial contents coverage excess. • CBRA & OPA Areas with eligible properties including residential properties and condominium units and townhouses. Want information? Contact Joseph Surowiecki, Jr. of The Hartford at 860-547-5006 or joseph.surowiecki@thehartford.com. Have a question for PIA? Contact us at alexipa@pianet.org.

National Association of Professional Insurance Agents 400 N. Washington St., Alexandria, VA 22314-2353 www.pianet.com | membership@pianet.org | (703) 836-9340

Top Stories PIA National Sets Federal Legislative Summit | 7 If you think your opinion doesn’t matter — think again. Insurance Rates — Continuing to Wrap Up 2012 | 10 In the fourth quarter commercial insurance rates continued to rise. Former Safeco CEO Mike McGavick on Rate Increases | 12 Former Safeco CEO Mike McGavick has always been outspoken about the insurance industry and how things should be done. AIG Survey — Cyberattack a Big Worry | 13 AIG surveyed 258 corporate executives and found most are now more worried about cyberattacks and breaches of their data systems than they are about damage to their properties or investments made that may be risky. Insurance Proposals — a potentially powerful E&O prevention tool | 14 Most agencies and their respective producers probably look at the insurance proposals they provide to customers and prospects as one of the key tools that will determine whether they land the account. PIA National Pushes States to Approve Certificate of Insurance Law | 16 PIA National is urging state Legislatures to pass the National Conference of Insurance Legislators (NCOIL) model law that governs certificates of insurance.

PIA National — 500th Agent Microsite in Partnership with Agoragate | 17 PIA National’s online marketing program with Agoragate has reached what the association calls “critical mass.” ObamaCare 1: Costs & Concerns | 20 The Congressional Budget Office (CBO) took a fresh look at the costs of the Patient Protection and Affordable Care Act to U.S. taxpayers over the next 10-years. ObamaCare 2: Out of Pocket Expenses | 20 Much media focus is being given to the ongoing increases in health insurance costs. It is pointed out that in spite of the Patient Protection and Affordable Care Act being sold by supporters in Congress and the administration as a way to control those rising costs, costs are rising. TRIA Renewal — A Very Tough Road | 22 Legislation has been introduced in the U.S. House to extend the Terrorism Risk Insurance Act (TRIA) until the end of 2019.

PIA NE IA Events Upcoming Events Calendar 2013 | 24

Advertisements Wanted, For Sale and Opportunities Contact us to place a classified ad.

February 2013 | Main Street Industry News | www.pianeia.com | 4

Acquisition Strategy

#11

LOSS CONTROL SERVICES

“ Reducing losses adds value for your clients.” Chad Veach, Engineering Services Supervisor Provide more than protection to your clients. Provide the added value of EMC’s no-fee loss control services, which could help reduce the cost of their insurance. It’s just one of the many reasons policyholders Count on EMC®.

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Home Office: Des Moines, IA

Advertise in Main Street Main Street Industry News format is done in an ultra high quality style that makes your ad stand out. We are one of the most popular and best-read insurance news publications in Nebraska and Iowa.

Main Street Industry News is issued electronically to over 8,000 Professional Insurance Agents throughout NE & IA, PIA state and national associations and other organizations that provide products or services to insurance agencies. To advertise contact PIA of Nebraska and Iowa – Executive Director, Cathy Klasi at (402) 392-1611.

IS YOUR E&O X-DATE HERE? PIA for Nebraska and Iowa PIA Association for Nebraska and Iowa is committed to focusing its resources in ways that cast the most favorable light on its constituents. We are dedicated to providing the type of programs, the level of advocacy, and the dissemination of information that best supports the perpetuation and prosperity of our members. We pledge to always conduct ourselves in a manner that enhances the public image of PIA and adds real value to our members.

SUBSCRIBE or comment Professional Insurance Agents NE IA Attention: Editorial Main Street Industry News 920 S 107 Avenue, Ste. 305 Omaha, NE 68114 Email: office@pianeia.com Ph: 402-392-1611 www.pianeia.com

Considering a change? Let the PIA quote your E&O Phil Fried (402) 392-1611 Phil@pianeia.com

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Top Stories

PIA National Sets

Federal Legislative Summit If you think your opinion doesn’t matter — think again. Today, it is more critical than ever that you — the individual independent insurance agent and the independent insurance agency and company — have your voice heard on Capitol Hill. With a brand new Congress recently sworn-in, it is a good time for PIA members to invest in the future with a trip to Washington D.C. to attend the 2013 PIA Federal Legislative Summit (FLS). Put these dates on your calendar and start planning your trip. They are April 10 and 11. The FLS begins with a legislative briefing for participants at the Marriott Crystal City in Arlington, Virginia. That is PIA National’s FLS headquarters hotel. The evening continues as you attend a reception and the annual PIAPAC Awards Dinner in a rooftop venue overlooking Washington’s beautiful skyline. The following morning, April 11, you’ll start your day with a breakfast program, followed by a full day of scheduled meetings with your members of Congress and their staffs in their Capitol Hill offices. For more information and to register for the 2013 PIA Federal Legislative Summit, click here. For questions, contact Mike Becker, PIA National Vice President of Federal Affairs at mikebe@pianet.org.

2011 Federal Legistlative Summit: Cap Peterson, Mark Suhr, Sen Mike Johannes, Pres NE IA Ryan Loecker, Mike Bowman, Cathy Klasi

Want to know why it’s important to participate in programs like the PIA’s Federal Legislative Summit? Here’s just one reason. The Government Accountability Office (GAO) did a study of federal rules and regulations. It found that 35% of regulations and rules with an economic impact of $100 million or more are issued without offering the public a period to comment. “This is a missed opportunity, because GAO found that when agencies did respond to public comments they often made changes to improve the rules,” the report notes. Here are the statistics from 2003 to 2010: • Federal agencies and departments issued 568 major rules.

February 2013 | Main Street Industry News |www.pianeia.com| 7

Top Stories • Those same agencies also issued 30,000 of what the GAO considers “non-major” rules. • On 35% of the major rules, officials “failed” to offer notice. • Of the non-majors, they failed 41% of the time. The departments when questioned by the GAO said they were instructed to issue the rules and regulations without notice. Other excuses included a deadline and no time to allow for comment. When it comes to the non-major rules, officials questioned said most were “mundane” or “procedural.” Even if the agency did take comment, the GAO finds most fail to reply to those commenting. It notes that one of the Patient Protection and Affordable Care Act (ObamaCare) regulations had 4,600 comments. None of them got a response from the agency responsible. Of those 4,600 comments, 4,100 of them were on just one aspect of the proposed regulation. “When agencies do not respond to comments requested, the public does not know whether the agency considered their comments, or if it intends to change the rule.”

click here. For questions, contact Mike Becker, PIA National Vice President of Federal Affairs at mikebe@pianet.org. That leads to some interesting questions. In a seven-year period the federal government issued 568 major rules and regulations without allowing public comment. Two questions. Though we don’t know the gist of the 568, does that number seem excessive? And does no public comment worry you? Second, there were 30,000 non-major rules and regulations issued in that same time period. And again, without allowing public comment. Like the 568, does this number seem excessive and do you think you should have been able to comment? Last. Does the federal government — or any government for that matter — do a good job of informing us that comment can be given? And if not, how can that be improved? n

YOUR PERSONAL INVITATION

The Environmental Protection Agency had the best response record of any federal agency. For more information and to register for the 2013 PIA Federal Legislative Summit,

CLICK TO PLAY VIDEO

February 2013 | Main Street Industry News | www.pianeia.com | 8

PIA Brings Main Street to Capitol Hill PIA FEDERAL LEGISLATIVE SUMMIT APRIL 10-11, 2013

★ WASHINGTON DC ★ WWW.PIAFLS.COM

February 2013 | Main Street Industry News |www.pianeia.com| 9

Top Stories

Insurance Rates

Continuing to Wrap Up 2012 In the fourth quarter commercial insurance rates continued to rise. So did the rates for personal lines. Is it a hard market? The economic experts say no but hard market or not, it’s good to see rates rising instead of falling like they did during the worst of the soft market. MarketScout’s latest figures are from the fourth quarter of 2012. Overall commercial rates for P&C insurers saw a 5% rise. Breaking it down: Small Accounts

up 6%

Medium Accounts

rose 5%

Larege Accounts

up 4%

MarketScout CEO Richard Kerr is one of the few contending that the hard market has arrived. “The commercial market is continuing its slow but steady upward trajectory in rates and premiums. Couple this with slight increases in exposures and the overall premium written on an expiring account is frequently up 8 to 9 percent.” Looking at the different lines: Commercial property and general liability

up 6%

Business-owner policies & commercial auto

up 5%

Workers’ compensation, professional liability and D&O

up 4%

Inland marine, business interruption, umbrella/excess & EPLI

up 3%

Fiduciary & crime

up 2%

Surety

up 1%

Kerr said 2013 started well, too. January rates rose by a composite average of 5%. Personal lines also did very well in January. Kerr said the lines averaged increases of 4% compared to January of 2012. Another report is just as encouraging. The Council of Insurance Agents and Brokers also have statistics showing a 5% average hike in rates for the fourth quarter of 2012. CIAB President and CEO Ken Crerar said it’s the best quarter of last year. Rates jumped 3.9% in the third quarter, rose 4.3% in the second and were up 4.4% in the first quarter of 2012. “I think you can characterize the fourth quarter as more of the same. Carriers were still cautious about the risks they were putting on their books and pushed for price increases where they could get them,” Crerar said. He, too, broke down the results by account size: Small Accounts

up 5.5%

Medium Accounts

rose 5.1%

Larege Accounts

increased 4.4%

A dash of negative and positive to go along with the positive. A.M. Best looked at commercial lines in its latest Review/Preview. In spite of continuing rate hikes, A.M. Best gave the lines a negative outlook for the future. “As more and more commercial lines insurers are demonstrating their ability to achieve rate increase, premium growth in commercial lines appears sustainable. The question is to what degree? While pricing trends are encouraging, A.M. Best believes commercial insurers still

February 2013 | Main Street Industry News | www.pianeia.com | 10

Top Stories have a way to go before they can declare this a hard market.” The ratings firm thinks this year rates going into negative territory will outnumber rates going the other direction. This is A.M. Best’s fear: a stagnant economy and high unemployment. They continue to be problematic. A.M. Best worries that, like the beginning of the recession in 2008, a down economy will cause billions in insurable risks to go away and insurers will be faced with the same challenges seen at the beginning of the recession. The report predicts sectors like construction insurance which are critical to carrier income will continue to be slow. “In essence, any new commercial lines growth prospects will have to come from rate increases as new business opportunities are likely to be neutralized by the slow-growth economy.” There is, however, good news in the report. A.M. Best is impressed with the achievement of rate increases but expressed disappointment that the rate increases are incremental. “Barring a major catastrophe, A.M. Best believes commercial-lines pricing in 2013 will continue to improve, but will moderate slightly compared with the rate increases garnered in 2012. A.M. Best believes price moderation has already taken place and will likely be prompted by competitive pressures and an abundance of capital,” the report said. A.M. Best also looked at personal lines in Review/Preview. It gave personal lines a stable outlook but warns the now more frequent severe weather events will have an impact on personal lines. “Although property line volatility continues to be a drag on overall results, it has not materially weakened the segment’s overall capital position, and auto results continue to be stable despite some margin compression,” the report notes.

A.M. Best expects more of the same in the near future. “Whether it’s an issue of frequency, severity, or sometimes both, the expectation is that regardless of the underlying causes, the erratic and volatile weather patterns experienced over the past few years will continue, and significant rate increases cannot be the only action taken to stabilize results.” The rating firm praised carriers for thinking beyond rate increases to address these concerns. The report points out more risk management initiatives like higher deductibles and improved geocoding. n Source: MarketScout, CIAB, PropertyCasualty360. com, Insurance Journal

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Former Safeco CEO Mike McGavick on

Rate Increases Former Safeco CEO Mike McGavick has always been outspoken about the insurance industry and how things should be done. McGavick is now XL Group’s CEO and he’s adamant about his firm’s bottom line. And that bottom line means increasing rates. “This is the first quarter in which I feel that those of us who operate insurance businesses on the whole are finally ‘getting it. You can see that rate is starting to grow year-on-year,” McGavick said. Rate increases have been a long time coming but are not unexpected. “We have been expecting this, because in these interest-rate environments, the rate levels that are being priced into these risks have not made sense. So it is really good to be hearing the kinds of commentary I’ve heard across the market about rate and about underwriting discipline overall, particularly on the primary side.”

And you are at risk of solutions that are not fair. The attack has started but it’s not too late to respond,” McGavick said. He suggested this response: • Tell the media and the public the truth — you help millions of people every day. • You employ 1000s of people in meaningful, family friendly jobs. • You are the pillars of your communities. McGavick also said that insurers need to spend more money advertising who we are and the benefits of insurance. You see more and more of that happening especially in auto insurance. Reported spending in 2011 — the last year for figures — for auto insurance ads was $5.9 billion. GEICO was the biggest spender at $1 billion. It is followed by State Farm’s $813.5 million and Allstate’s $745.3 million. Does the advertising work? Ace Metrix checks these things and with a top score of 950, the best insurance could do was a 589. That’s a Liberty Mutual ad Beautifully Imperfect World — click below to watch.

To keep profits up, McGavick said XL Group will walk away from business that won’t generate a profit. He urges other insurers to do the same. “I do feel strongly there’s now a bit more tailwind to our efforts than there has been in the past.” A few years ago McGavick said the industry does not do a very good job of defining what it is and how we help people. His advice then was very good, and it’s still very good advice. So we offer a repeat of what he told us in that interview. “You help thousands of people every day but the story everyone remembers is the one person that doesn’t get helped. You are headed for more regulation because people have lost faith that private institutions will solve their problems.

A last note on McGavick. XL Group had a net income of $85 million for the fourth quarter. It’s a tremendous improvement over the loss of $514 million in the fourth quarter of 2011. Revenues, McGavick said, are up 11% — $185 million — to $1.9 billion. n Source: Weekly Industry News, PropertyCasualty360.com

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AIG Survey

Cyberattack a Big Worry AIG surveyed 258 corporate executives and found most are now more worried about cyberattacks and breaches of their data systems than they are about damage to their properties or investments made that may be risky. The survey included risk managers, senior execs and insurance brokers around the U.S. and Canada. It found: 85% are very, or somewhat concerned about cyber risks. 80% are concerned about property damage. 76% worry about investment risks and securities.

AIG’s Tracie Grella who heads up the professional liability for global financial lines said, “Clients are more aware today than even a year ago that this risk is really not just an IT exposure. It really needs to be addressed through risk management.” There is a growing need for cyber-risk coverage and David Derigiotis of wholesale broker Burns & Wilcox said he’s seen double-digit increases in sales in the last year. “Cyber has been a really tough sell. It’s just over the last year we’ve started to turn the corner and grow... People are realizing the value.” Grella notes news of cyberattacks is driving interest. Large and mid-size firms — she says — now buy cyber-risk protection about 70% of the time.

Other survey results: 80% have trouble keeping up with cyber risks because they are evolving so quickly. 69% worry more about risk to reputation from a cyberattack than financial loss. 75% say new regulations on protecting client data is driving them to worry more about data breaches. 82% think hackers are the major source of attacks and 71% find human error as a component of risk.

AIG did the survey to help promote the addition of a new mobile app for iPad. It is part of AIG’s CyberEdge risk management portfolio and is designed to provide information about cyber risk and how to respond to a cyberattack and mitigate the damages. Spokesman John Bambale said, “These new survey findings confirm that business leaders view cyber risk as a top business concern, with great potential for reputational and financial loss. At AIG, the first company to introduce cyber insurance in 1999, we are working to address these concerns and provide a valuable additional layer of support through our comprehensive risk management solution for cyber insurance.” n Image Credit: Some rights reserved by elhombredenegro

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Insurance Proposals a potentially powerful E&O prevention tool Educate Customers and Prospects by Curtis M. Pearsall, CPCU, AIAF, CPIA, President – Pearsall Associates, Inc., and Special Consultant to the Utica National E&O Program

Most agencies and their respective producers probably look at the insurance proposals they provide to customers and prospects as one of the key tools that will determine whether they land the account. In many respects, this is correct. While a great proposal does not guarantee success, a poor proposal almost certainly guarantees failure. Typically, the insurance proposal is broken down by line of business and lists the coverages offered/proposed and the corresponding premium. That’s fine and probably serves the purpose. For example, say you are providing a proposal to a hardware store. The store’s owner undoubtedly knows the hardware store business well, but how knowledgeable is he or she on the finer points of the insurance business? Imagine you are the hardware store owner who is receiving this proposal. Does the proposal help you understand the insurance program? Does it include references to terms such as ACV/RC or co-insurance? Are these terms defined?

If your proposals are structured strictly to provide an overview, you may be missing an important element – one that may actually play a role in landing the account while also providing some quality errors and omissions protection. What is it? Look for your proposals to educate your prospects and help them understand their insurance program. Educating customers and prospects has been shown to be a key issue in minimizing E&O claims activity. If an E&O claim developed, the defense attorney (defending the agency) and the plaintiff’s attorney (defending your customer) would review the agency file as well as all of the specific documents involved in the procurement of the coverage. You can bet that the proposal provided will be reviewed in depth. The goal is to ensure that when this occurs, the proposal helps your case, not hurts it. Customers and prospects heavily rely on proposals to make informed purchasing decisions. The best proposals clearly lay out the coverages offered, with documentation ultimately being made to detail what was – and was not – purchased. To ensure there is no misunderstanding, it is highly suggested to secure the insured’s signature/acknowledgement detailing his or her buying decision. Moreover, to ensure thoroughness and consistency, the agency should have a standard template detailing what the proposal should include and how it should be communicated. Without this, the potential exists that proposals will lack the necessary detail and explanation.

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Key Ingredients of a Proposal

Include A.M. Best information for each of the carriers, with an explanation of what the rating means. It is recommended to use the exact definition as provided by A.M. Best.

Detailed explanations and definitions of key terms. Just because the agency understands the terms does not mean the client does. Educating your client on the finer points of the proposal will help him or her better understand the insurance program and should also help minimize the potential for an E&O claim. As you present the proposal, look for opportunities to ensure that the prospect understands the material. Avoid abbreviations if there is any chance the customer will not understand they mean.

Where applicable, include a statement that clearly denotes that higher limits are available. This would certainly be applicable in references to an umbrella or excess limits policy.

Easy-to-understand information. The language should not be above the ability of the prospect to understand it.

Reference any mortgagee or loss payee you know of.

Be as detailed as necessary. For example, if you are providing a proposal for Commercial Auto and some drivers are excluded, a reference to the excluded (or conversely acceptable) drivers is appropriate. When dealing with Workers Compensation, based on the corporate structure of the entity, reference should be made to whether the policy affords coverage for sole proprietors/ partners. On General Liability, it should be clearly stated if the policy is “subject to audit.” For a Professional Liability/ D&O policy, provide clarification on issues such as “retro date” and whether the defense is within or outside of the limit of liability.

Include a disclaimer. There is no way the proposal can include every single aspect of the insurance program. A disclaimer, such as the following, will provide a degree of E&O protection: >> Information contained in this proposal is intended to provide you with a brief overview of the coverages provided for reference purposes only. It is not intended to provide you with all policy exclusions, limitations and conditions. The precise coverage afforded is subject to the terms, conditions, and exclusions of the policies issued. >> In addition, if your agency has relied upon information provided directly by the prospect, consider including a statement such as “this proposal is based on information provided and we cannot attest to the accuracy of this information.”

If any of the carriers referenced is non-admitted, provide an explanation of what this means. Verbiage such as the following is suggested: The insurance company does not participate in any of the insurance guarantee funds created by (the applicable state) law should the insurance company become insolvent and be unable to honor claim payments.

A Clearer Understanding

At the end of the day, while your proposals may be a little longer, your client will have a much clearer understanding of the coverages proposed and how they work. This could very well be the difference that helps you land the account. Plus, if a problem develops down the road, the detail provided in your proposal could be key in the defense of your agency. n February 2013 | Main Street Industry News |www.pianeia.com| 15

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PIA National PUSHES States to Approve

Certificate of Insurance Law PIA National is urging state Legislatures to pass the National Conference of Insurance Legislators (NCOIL) model law that governs certificates of insurance. NCOIL passed its model in November of last year in a move to eliminate the improper use of certificates of insurance. PIA National advocated for passage of the model and played an integral role in guiding it to approval by the state legislators. Andrew Harris, PIA National’s president said, “We are very pleased with this outcome and we appreciate all the hard work the legislators and interested parties put into these models. We believe this certificates model, combined with a binder model, Andrew Harris, will alleviate some PIA National’s President of the confusion we have been seeing in the marketplace concerning certificates for decades.” One of the states looking at enacting the law is the PIA Western Alliance state of New Mexico. State Senator Carroll Leavell (NM) was President of NCOIL during much of the time the certificates model was debated. He introduced the model legislation in New Mexico. The New Mexico bill is modeled after a bill introduced in the New Jersey State Assembly

to ban changes to certificate forms and to assert that certificates are not insurance policies and don’t provide different or extra coverage than the policy does. Other states looking at the law are New Jersey, Indiana and Wisconsin. PIA plans to continue work with carriers and lenders to craft a special ACORD binder for commercial lending transactions that can be used as evidence of coverage until a policy is available. This concept will essentially merge the ACORD 75 binder and the ACORD 28 certificate, giving lenders a document they can rely upon as evidence of coverage and that also contains some basic coverage information. PIA National’s David Eppstein said input by Harris was instrumental in brokering a compromise among insurers, lenders and legislators, which led to the successful passage of the model certificates law. “This model is an excellent product that reflects many months of extensive examination by the legislators. In the end, their work paid off with a model that will make it clear that certificates of insurance can not conflict with the insurance policy itself, and that it’s illegal to demand that an agent improperly change or add to a certificate.” Eppstein has nothing but praise for the NCOIL effort. “The legislators identified a problem in the marketplace, deliberated the best way to solve it and then acted in a timely manner. This shows the strength of state regulation and how well state legislators can react to improve market conditions.” n

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PIA National th

500 Agent Microsite in Partnership with Agoragate PIA National’s online marketing program with Agoragate has reached what the association calls “critical mass.” Last week PIA National said its internet marketing partner Agoragate has placed the 500th independent agent microsite product in its EnhanceInsurance.com web portal. Agoragate (pronounced “AGRA gate”) has independent agent subscribers in 48 states. Each has a microsite through EnhanceInsurance.com. These microsites are part of a vast network of insurance-related web pages that have been written by Agoragate authors to closely match the search terms that web surfers type into Google and other search engines. When a searcher lands on an EnhanceInsurance.com web page, the profile of the nearest participating independent agent appears prominently alongside the article. That agent is positioned as a resource the web searcher can contact for more information and assistance with their insurance needs. PIA National President Andrew Harris said, “The beauty of Agoragate’s EnhanceInsurance.com web portal is that it allows people to find a local agent on their terms, and keeps the agent involved in the buying process to act as the advocate for the consumer. When a person conducts February 2013 | Main Street Industry News |www.pianeia.com| 17

Top Stories an Internet search on an insurance-related topic, they want to be in the driver’s seat as they seek an answer to their question. Enhance Insurance provides them with a high-quality answer to their inquiry, and then makes it easy for them to contact a knowledgeable independent agent in their area for more information and to purchase an insurance product.” The 500 microsite products on EnhanceInsurance.com are just a fraction of the almost 5,000 pages of unique, insurancerelated blogs and articles on the website, each optimized to match popular keywords used by online searchers. This large quantity of high-quality web pages is the reason for EnhanceInsurance.com’s rapid ascension in search engines. Already, many local and longtail Enhance Insurance articles and blog posts are ranking among the first results on Google, Bing and other search engines, including “Insurance friendly cars,” “Daycare insurance agent,” and “Insuring an older home.” As new articles are added to the website, each benefits from the “domain authority” that Enhance Insurance has already built with its vast collection of highly targeted articles. Domain authority is a measure a website’s trustworthiness and value based on links, size, age, traffic, and other factors. With two dozen writers adding about fifty pages of insurancerelated content each day, Enhance Insurance web pages will increasingly place ever more highly in search engine results pages, driving

greater traffic while providing participating agents with access to an increasing number of warm prospects. PIA National Executive Vice President Ron Von Haden said, “It’s thrilling to be a witness as this future insurance marketing behemoth tips the search engine scales and increasingly becomes a magnet for insurance-related web searches. It’s equally thrilling to know that they are doing this while all the time positioning independent agents as knowledgeable, local heroes, here to guide their clients through the insurance landscape. In a marketplace that increasingly commoditizes the insurance buying process and attempts to reduce the decision down to a comparison of price and price alone, this is a breath of fresh air. Indeed, Agoragate is dedicated to helping agents develop a meaningful relationship with potential insureds.” PIA members receive a substantial discount on the cost of the Enhance Insurance microsite products. This opportunity is being offered to PIA members as part of the PIA Branding Program. Through this program, PIA provides its members with marketing materials such as print and radio advertisements as well as internet marketing tools and marketing guidance. Funding for the PIA Branding Program is provided in part by PIA’s Pinnacle Partners. Pinnacle Partners are highly regarded insurance

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Top Stories companies that demonstrate their commitment to the independent agency distribution system and financially support the development of new marketing tools which are made available to PIA members through PIA Branding Program. The 2013 Pinnacle Partners are: • Bankers Insurance Group • Encompass Insurance • Erie Insurance • Harleysville Insurance • Progressive Insurance • QBE the Americas • State Auto Group • The Hartford • The Motorists Insurance Group PIA National’s Vice President of Marketing and Affiliate Relations Alexi Papandon said, “We know that while many people start their search for insurance online, most want to buy their insurance from a local insurance professional in their community. Agoragate helps bring these web searchers together with local, independent insurance agents in an environment that supports both of their goals.” n Want to learn more about Agoragate. Go online at www.insuranceagoragate.com or on PIA’s website at www.pianet.com/agoragate. To explore the Enhance Insurance site, visit www.EnhanceInsurance.com.

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ObamaCare • More employers will pay the penalty for not insuring their employees than expected and that’s going to result in $13 billion in additional revenue for the program. • The CBO is also concerned about how ready the exchanges will be when the Affordable Care Act goes into effect in 2014 and how ready state Medicaid programs will be to absorb the new beneficiaries. Six Republican governors who balked at implementing the Patient Protection and Affordable Care Act are in mind-changing mode.

Costs & Concerns The Congressional Budget Office (CBO) took a fresh look at the costs of the Patient Protection and Affordable Care Act to U.S. taxpayers over the next 10-years. It’s now set at $1.3 trillion — up a bit from the $1.17 trillion suggested in August. The figure was released as part of the battle over the debt ceiling. CBO analysts say a Republican plan to dump ObamaCare will cost the U.S. $109 billion over 10-years. Report authors projected that 26 million people will enroll in the law's insurance exchanges by 2022 — 500,000 more people than the August report. Here are some alarming statistics: • The CBO estimates that seven-million people will lose their health insurance as a result of ObamaCare when it goes into full effect in January of 2014.

Other Republican governors on board are Michigan Gov. Rick Snyder who said yes to ObamaCare last Wednesday and Ohio’s John Kasich who last Monday said he’d support the law. That means 11 other Republican governors are either in the no camp or still sitting on the fence. Most are worried about Medicaid expansion. It will cover part of the coverage of anyone 133% below the federal poverty level. n Source: Washington Post

Out of Pocket Expenses Much media focus is being given to the ongoing increases in health insurance costs. It is pointed out that in spite of the Patient Protection and Affordable Care Act being

February 2013 | Main Street Industry News | www.pianeia.com | 20

PIA NE IA Events sold by supporters in Congress and the administration as a way to control those rising costs, costs are rising. What has been more or less ignored by media — this publication included — is what the plan will cost consumers. This is especially critical to the poorer among us who will have to shell out some hard to part with dollars to be part of the plan. But there are safeguards in the plan to limit of out of pocket expenses for health insurance coverage. The Department of Health and Human Services recently announced its Bronze Plan for the health insurance exchanges. It has the limits for out of pocket spending. HHS will limit out of pocket spending to $6,250 per year, per individual. A look at 9,752 current plans around the U.S. found that just 29% of them have lower out of pocket expenses than the new limit set by the Bronze Plan. Just 4% — though — had no limits at all on what a person has to pay out of pocket per year. The average out of pocket expense on all companies surveyed was $6,019. That’s slightly lower than the new regulations. The five states with highest limits were 28% higher than the limit set by the HHS.

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The most expensive state in terms of out of pocket expenses is Vermont at $10,013. Washington and Oregon are numbers two and three. Alabama and Florida are four and five. • Iowa — $5,015 is within the HHS out of pocket limits • Nebraska — $4,502 is within the HHS out of pocket limits n

February 2013 | Main Street Industry News |www.pianeia.com| 21

Top Stories National Association of Mutual Insurance Companies (NAMIC) spokesman Jimi Grande wants Congress to get TRIA renewed before the end of 2013 rather than wait until the last minute when it expires in 2014. “Failing to reauthorize the program, or even addressing it at the last minute, could have devastating consequences to the economy,” Grande said.

TRIA Renewal A Very Tough Road Legislation has been introduced in the U.S. House to extend the Terrorism Risk Insurance Act (TRIA) until the end of 2019. Experts think the bill is going to have a real tough time getting passed considering the current political climate. Naturally, a lot of New York members of Congress support the bill since the biggest losses from the 9/11 attack was the World Trade Center. New York Representatives Rep. Jeff Grimm — a Republican — and Carolyn Maloney — a Democrat and House Rules Committee Chairman Rep. Pete Sessions — a Republican — of Texas are the main sponsors. Also signing on are New York Republican Rep. Peter King and New York Democrats Rep. Carolyn McCarthy, Rep. Jeff Meeks and Rep. Tim Bishop. Others are Indiana Democrat Rep. Andre Carson and Republican Rep. Dennis Ross of Florida.

American Insurance Association (AIA) President and CEO Leigh Ann Pusey agrees. “TRIA provides a much-needed backstop to insurance companies for large certified terrorism events, above a $100 million loss, while requiring insurers to offer terrorism insurance to commercial policyholders. As a result, insurers are able to offer terrorism coverage to commercial policyholders while TRIA provides all-important market stability. The program’s triggers and recoupment mechanism protect taxpayers and greatly mitigate its costs. TRIA and its successor programs have worked at little to no taxpayer expense and continue to make terrorism coverage widely available,” she said. The Coalition to Insure Against Terrorism (CIAT) wants TRIA renewed as well. It consists of real estate, manufacturing, construction and retail interests as well as representatives from the entertainment industry. These are members of the American Bankers Association, the Financial Services Roundtable, National Association of Home Builders, American Hotel & Lodging Association, Walt Disney Co. and National Basketball Association. NAMIC’s Grande added, “Unlike hurricanes or fire, terrorism risk is almost entirely unpredictable, and will adapt to counter efforts to mitigate against it. Additionally, much of the information an insurer would need to measure a particular risk — such as the number of times a property has been targeted or the potential means of attack — are rightfully kept classified by federal law enforcement.” n Source: PropertyCasualty360.com, InsuranceJournal.com Photo Credit: Photographer, Reza Baktar

February 2013 | Main Street Industry News | www.pianeia.com | 22

Top Stories

February 2013 | Main Street Industry News |www.pianeia.com| 23

PIA NE IA Events

Upcoming Events Calendar 2013 For information and to register Click Here or call (402) 392-1611.

Date

Event

City

State

February 26, 2013

Legislative Luncheon

Lincoln

February 27, 2013

CISR Insuring Commercial Property

Davenport

March 6, 2013

CISR Insuring Personal Residential Property

Johnston

March 12, 2013

CPIA 1 Position for Success

Omaha

March 13-15, 2013

CIC Agency Management Institute

Omaha

March 20, 2013

CISR Commercial Casualty II

Marion

March 26, 2013

CISR Personal Lines/Miscellaneous

W Des Moines

April 10, 2013

CISR Agency Operations

W Des Moines

April 16, 2013

CPIA 1 Position for Success

Marion

April 17-19, 2013

CIC Agency Management Institute

Cedar Rapids

May 2, 2013

CISR Insuring Commercial Property

Marion

May 8-10, 2013

CIC Commercial Property Institute

Lincoln

May 15, 2013

CISR Insuring Personal Auto Exposures

Johnston

May 22, 2013

CISR Insuring Personal Residential Property

Davenport

June 4-5, 2013

Convention

Kearney

June 19, 2013

CISR Agency Operations

Marion

June 26-28, 2013

CIC Commercial Property Institute

Des Moines

June 26, 2013

CISR William T. Hold Seminar

W Des Moines

July 10, 2013

CISR Personal Lines/Miscellaneous

Marion

July 17, 2013

CISR Insuring Personal Residential Property

Johnston

July 17-19, 2013

CIC Personal Lines Institute

Omaha

July 24, 2013

CISR Commercial Casualty I

Davenport

August 7, 2013

CISR Insuring Personal Auto Exposures

Marion

August 21-23, 2013

CIC Personal Lines Institute

Cedar Rapids

February 2013 | Main Street Industry News | www.pianeia.com | 24

PIA NE IA Events August 28, 2013

CISR Insuring Commercial Property

W Des Moines

September 10, 2013

Scholarship Golf Outing

Ashland

September 12, 2013

CISR Commercial Casualty II

W Des Moines

September 18-20, 2013

CIC Commercial Casualty Institute

Lincoln

September 19, 2013

CISR Dynamics of Service Seminar

Johnston

September 26, 2013

CISR Agency Operations

Davenport

October 3, 2013

CISR Insuring Personal Residential Property

Marion

October 16, 2013

CISR Insuring Personal Auto Exposures

Davenport

October 16-18, 2013

CIC Commercial Casualty Institute

Des Moines

November 13-15, 2013

CIC Life & Health Institute

Omaha

November 21, 2013

CISR William T. Hold Seminar

Marion

December 5, 2013

Greater Omaha Committee Christmas Party

Omaha

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Omaha Branch: 800.338.9735

Home Office: Des Moines, IA

February 2013 | Main Street Industry News |www.pianeia.com| 25