Main Street Industry News - January 2017

INSIDE PIA National Reacts: No More Federal Insurance Anything » 7 Anthem-Cigna Deal: In the Judge’s Hands » 14 What’s Keeping You Up at Night? » 18 Flood: Getting Closer to an NFIP Renewal » 24 Cover Image: Miles Bannan Spikes at Sunset

January 2017 | Published Monthly

Andy Kraus, CPCU | Vice President of Agencies | 800.742.7433 | akraus@fmne.com

fmne.com

Did you know that PIA’s company council, The PIA Partnership, has conducted nationwide research about the insurance buying preferences of small business owners?

The research is encouraging because it found that small business owners strongly prefer independent insurance agents as they make choices in today’s online world.

However, the results also serve as a wake-up call that agents must take steps to continue to demonstrate their value and also be more engaged online.

PIA and the companies belonging to The PIA Partnership have created a public website that helps agents understand PIA’s findings.

PIA members also have access to a private website containing a series of strategies and tools to help them stay ahead of online competition in commercial lines.

To access the newest PIA Partnership project, Small Business Insurance & The Internet — The Voice of the Commercial Lines Customer, visit us at www.pianet.com/voiceoftheclcustomer.

If you are not a PIA member and want to access all of the tools available through this program, contact us for a membership application or visit us online at www.pianet.com/joinpia.

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 Reacts: No More Federal Insurance Anything | 7 Last week Weekly Industry News reported that Federal Insurance Office (FIO) Director Michael McRaith is leaving his post at the end of this week.

Compensation & Technology: Independent Agents in 2017 | 8 Tension is growing between independent insurance agents and carriers.

Annual Insurance Regulation Report Card | 10 Every year R Street grades the insurance regulators of the nation’s states.

The High Cost of Negative Workplace Behavior | 12 McKinsey Quarterly — a publication of McKinsey & Company — did an article recently on workplace behavior and on incivility in particular.

Anthem-Cigna Deal: In the Judge’s Hands | 14 Phase one of the Anthem-Cigna merger lawsuit is now in the hands of U.S District Judge Amy Berman Jackson.

The Enormous Cost of False Insurance Claims | 14 Sometimes government is the insurance industry’s best friend.

Cyber Attackers will be More Cunning in 2017 | 16 Every year cyber attackers and hackers get more sophisticated and bolder.

What’s Keeping You Up at Night? | 18 We live in difficult times. Most of us are worried about more things today than our parents and grandparents.

More P&C Predictions 2017 | 20 At the beginning of any year the prognosticators pop out the crystal balls and begin making predictions about what this business or that can expect.

ObamaCare: Ongoing Drama Leads to Uncertainty | 22 President Obama’s policies, executive orders and much of what a Democrat-controlled Congress passed, and what the party could keep in a split powered Congress is in danger.

Flood: Getting Closer to an NFIP Renewal | 24 Sometime in 2017 Congress is going to have to come to grips with what to do about the National Flood Insurance Program (NFIP).

PIA NE IA Events Upcoming Events Calendar 2017 | 26

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January 2017 | Main Street Industry News | www.pianeia.com | 4

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Top Stories

PIA National Reacts

No More Federal Insurance Anything Last week Weekly Industry News reported that Federal Insurance Office (FIO) Director Michael McRaith is leaving his post at the end of this week. McRaith’s decision pleased PIA National Executive Vice President Mike Becker and other key players in the association.

With McRaith gone and with a Republican Congress looking at major modifications of the Wall Street reforming Dodd-Frank Act, PIA wants the House Financial Services Committee to not only do away with the FIO when the Financial CHOICE Act is acted upon but eliminate its replacement, the Office of the Independent Insurance Advocate. And the association sent a letter to committee chairman and Texas Republican Rep. Jeb Hensarling requesting that change.

“We are concerned that merging the FIO into such a new office could unintentionally establish an even stronger federal insurance entity with an even broader mandate,” Becker said.

In the letter to Hensarling, PIA National said it, “respectfully asks that the 115th Congress use the Financial CHOICE Act to fully repeal the FIO without shifting its current duties into a new federal office. It is possible to achieve the goals of streamlined federal efficiency, a unified voice in international negotiations, and the provision of resources to the independent member of FSOC without the creation of this office. We would welcome the opportunity to discuss such solutions.”

For his part, McRaith defended his work on behalf of the FIO and his Department of the Treasury bosses and said he defended the industry and was not a threat to state regulation. “We are not here to take from the states what McCarran-Ferguson has given to them but we are here to serve the national interest,” McRaith said in his resignation letter.

Sources: PIA National, Insurance Journal

PIA National Vice President of Government Relations Jon Gentile said neither an FIO or an Office of the Independent Insurance Advocate is needed. “If the goal of the new Congress is to eliminate unnecessary federal regulation, getting rid of the FIO makes good sense. Doing so would reaffirm that regulation of insurance should continue to be the responsibility of the states,” Gentile said.

January 2017 | Main Street Industry News |www.pianeia.com| 7

Top Stories

& Technology

Independent Agents in 2017 Tension is growing between independent insurance agents and carriers. Much of the conflict involves growing margins while rates are declining. That was the conclusion of W.R. Berkley president and CEO Robert Berkley in the first quarter of last year.

A survey from the Insurance Journal’s research partner Channel Harvest Research bears out much of Berkley’s concerns. It’s the ninth time the two have partnered on the subject and the fifth where comments on compensation have been included. The Key Success Factors in Agent/Carrier Relationships 2016 Survey looked at what independent agents want most from a carrier and what they feel will help make them more profitable.

• Compensation ranks first with 90% considering it either very important or somewhat important.

• 40% are not satisfied with their compensation saying is average or below average.

Peter van Aartrijk is Channel Harvest’s principal. He said, “Market forces can squeeze everyone along the value chain and this survey indicates agents want to have a constructive dialogue with carriers about how to overcome margin issues. Compensation is a hot button that carriers should not leave to chance or a business-as-usual attitude — if they truly seek to attract or retain valuable agencies.”

January 2017 | Main Street Industry News | www.pianeia.com | 8

Top Stories Commercial carriers rated quite high with agents in a number of areas. Solid marks were given for: • Financial strength • Underwriting responsiveness and expertise • Customer service • Brand reputation Where commercial carriers faltered is in: • Tech support • Marketing support

The Insurance Digital Transformation Survey has: • 60% rating their websites as average to

poor • Just 8% rate them as excellent • 70% have proactive strategies set to adapt

to new technology but aren’t • 25% of independent agents have

comparative raters • Just 16% use chat or instant messaging to

communicate with customers On the last bullet point, the survey said, “This is a relatively inexpensive technology and easy to implement, so the low percentage is surprising.”

• Training • Digital and social media support But the good news for carriers is those items are at the bottom of the agent expectation list.

“Ask agents what’s important to them and they usually put underwriting and claims at the top of the list. But we were intrigued to find that some of those attributes are more prominent in our current survey than back in 2011,” van Aartrijk said.

Technology — van Aartrijk said — is an area that carriers have improved upon. “It’s also no surprise carriers score a bit higher today for their technology. But another constant then and now is agency compensation, where agents tend to have a mixed-to-negative opinion of their lead carrier,” he said.

A different survey — and one cosponsored

by PIA National and the ACORD User Groups Information Exchange and another agent association — says independent agents, while more conscious of the need to update and improve their use of technology, fail miserably at execution.

PIA National President and CEO Mike Becker said agencies are also failing to present their websites and other digital services in formats their customers want. The survey finds just 21% of agencies have developed mobile apps to assist their customers. That — Becker said — needs to be a much higher priority.

“Agents can’t assume that no news is good news. When it comes to customers’ digital requirements, that’s never true. Look at banking — many institutions did not know how popular online and mobile banking would be with their customers until they adopted it. The same is true for insurance.”

Sources: Insurance Journal, Insurance Business America

& Technology

January 2017 | Main Street Industry News |www.pianeia.com| 9

Top Stories

Annual Insurance Regulation Report Card Every year R Street grades the insurance regulators of the nation’s states. The grading is done by R Street Senior Fellow R.J. Lehmann and it is on how — in his words — “effectively and efficiently they discharge their duties to monitor insurer solvency and to foster consumer choice and competitive, private insurance markets.”

It’s the fifth year R Street has done the report and for two years in a row Vermont — with the only A+ score — has been tabbed as having the best insurance regulatory system in the nation. North Carolina — again — is pegged as the worst and picked up an F. About the survey, Lehmann said, “We believe states should regulate only those market activities where government is best-positioned to act; that they should do so competently and with measurable results; and that their activities should lay the minimum possible financial burden on policyholders, companies and, ultimately, taxpayers.”

Here are the 10 categories and the percentages that the insurance regulators are judged by: • • • • • • • • • •

Politicization —10% Solvency — 10% Consumer Protection — 5% Anti-Fraud Resources — 5% Fiscal Efficiency — 10% Auto Insurance Market — 15% Home Insurance Market — 15% Workers’ Compensation Market — 10% Rate Regulation — 10% Underwriting Freedom —10%

The top-10 are: 1.

2.

3.

4.

5.

6.

7.

8.

9.

10.

Vermont Utah Maine Illinois Idaho Arizona Wisconsin New Hampshire Kentucky Nevada

Here are the PIA NE IA state grades: 11. Iowa — Grade B+ • • • • • • • •

Politicization — 10.0 Fiscal Efficiency — 12.9 Solvency — 9.8 Auto — 8.3 Home — 6.6 Residual — 15.0 Underwriting — 9.3 Score — 71.9

20. Nebraska — Grade B • • • • • • • •

Politicization — 6.4 Fiscal Efficiency — 12.9 Solvency — 11.1 Auto — 8.2 Home — 3.1 Residual — 15.0 Underwriting — 12.7 Score — 69.5

Source: Insurance Journal

January 2017 | Main Street Industry News | www.pianeia.com | 10

Utica’s Agents’ Errors & Omissions Program is all about…

TALKING DIRECTLY TO THE DECISION MAKERS

PIA of Nebraska & Iowa (402) 392-1611 www.pianeia.com

Top Stories

The High Cost of Negative Workplace Behavior McKinsey Quarterly — a publication of McKinsey & Company — did an article recently on workplace behavior and on incivility in particular. The publication said hurtful behavior like an employee being intentionally ignored, belittled publicly or undermined by co-workers can create lasting damage to the company and that employee, and other employees.

The article says it impacts performance, increases the always dreaded turnover and can — in some cases — cause harm to customer relationships.

Christine Porath — who is an associate professor at McDonough School of Business at Georgetown University — penned the article.

She’s spent 18 years researching employee treatment in the workplace and said incivility is dangerously on the rise: • 49% of the workers surveyed in 1998 said

they were treated rudely once a month • In 2011 that figure was 55% • In 2016 it’s at 62% “Workplace relationships may be fraying as fewer employees work in the office and feel more isolated and less respected.

Some studies point to growing narcissism among younger workers. Globalization may be causing cultural clashes that bubble beneath the surface. And in the digital age, messages are prone to communication gaps and misunderstanding — and unfortunately putdowns are easier when not delivered face to face,” she wrote.

Porath said it’s important for a company victimized by incivility to get it under control.

The 13% jump in incivility reports since 1988 are proof that change needs to happen and soon. “As the workplace becomes fasterpaced, more technologically complex, and culturally diverse, civility matters. Among other things, it helps dampen potential tensions and furthers information sharing and team building,” she noted.

Here are incivility problem areas based on 800 interviews:

Workplace Performance

Scores get settled when a person is treated poorly.

• 47% say they decrease time spent at work.

• 38% say they intentionally decrease the

quality of their work.

• 66% admit to their performance declining.

• 78% say their commitment to the company

declined.

• 80% lost work time worry about an

incident of incivility.

• 63% lost work time avoiding the offender.

Employee Turnover

Those quitting in response to incivility rarely tell their employer why they are leaving.

• 12% of those interviewed said they left a

job because of uncivil treatment.

January 2017 | Main Street Industry News | www.pianeia.com | 12

Top Stories The experience of customers

Many consumers will not purchase from a company they deem as being uncivil whether the rudeness is directed toward them or toward other employees.

• 25% of those interviewed said they often took their poor treatment by coworkers or supervisors out on customers.

Collaboration

Porath said, “When people feel disrespected, it eats away at them — and their potential.

Engagement, teamwork, knowledge sharing, innovation, and contributions wane even among those who choose to work around the slights.”

Or to paraphrase — incivility kills collaboration.

• 35% say they feel psychologically safe

when offered a suggestion in a

civil rather than an uncivil manner.

Porath said negative or draining experiences de-energize employees and a company and they have four to seven times greater impact on a company than positive experiences.

my research, the number-one attribute that garnered commitment and engagement from employees was respect from their leaders. In fact, no other leadership behavior had a bigger effect on employees across the outcomes measured. Being treated with respect was more important to employees than recognition and appreciation, communicating an inspiring vision, providing useful feedback, or even providing opportunities for learning, growth, and development,” she said.

In fact, Porath says those getting respect from their leaders have much higher levels of health and well-being. They get more enjoyment, satisfaction and meaning from their jobs.

“Those feeling respected were also much more likely to engage with work tasks and more likely to stay with their organizations,” she added.

Conversely, Porath said, “Organizations that neglect values, role model inappropriate behavior, fail to instill meaning at work, or don’t take collaboration seriously will be fertile soil for problem behavior. When organizations address these issues systematically, more civility will follow.”

Source: McKinsey & Company

“Where possible, weed out toxic people before they join your organization. Interview for civility, using structured interviews with behavioral questions. Check references thoroughly, but also go beyond provided references, chasing down leads and hunches,” she writes.

Porath also suggests that employees need to be involved and hold their managers and colleagues accountable for living up to what is termed “normal” civility. The support of leadership in that accountable category — she suggests — can help. “In January 2017 | Main Street Industry News |www.pianeia.com| 13

Top Stories

Anthem-Cigna Deal In the Judge’s Hands Phase one of the Anthem-Cigna merger lawsuit is now in the hands of U.S District Judge Amy Berman Jackson. She heard closing arguments in mid-December and would not say when she’ll issue her decision.

The Enormous Cost of False Insurance Claims

The first phase looked at the impact of the merger on large employers. Phase two started a week before Christmas and it looks at the impact on small employers and consumers.

The Justice Department filed the suit saying the merger — and that of Humana and Aetna — will hurt competition in the nation’s health insurance markets by reducing the number of insurers.

Anthem argues that the combined company will have operation efficiencies that will allow it to give doctors and hospitals better rates and those savings will be passed onto employers and eventually to consumers. The government disagrees and says in the 14 states where Cigna and Anthem compete, costs are kept down for employers because of the competition.

The insurer also told the judge that the merged company will make superhuman efforts to keep prices down and affordable if the sale is allowed.

Coming soon is the Aetna takeover of Humana which the Justice Department also opposes.

Sources: Insurance Business America, Insurance Journal, Insurance Networking News

Sometimes government is the insurance industry’s best friend. In fiscal 2016, the U.S. Department of Justice got more than $4.7 billion in settlements and judgments from fraud and false claims.

January 2017 | Main Street Industry News | www.pianeia.com | 14

Top Stories Some of them involved insurance.

This is the third highest total in False Claims Act history. And since 2009, the fiscal average has topped $4 billion a year. Even more impressive is the total from 2009 to 2016. It’s $31.3 billion.

Of the $4.7 billion, $2.5 billion came from the health care industry including drug companies, medical device companies, hospitals, doctors, nursing homes, etc. It was the largest group.

Second most recoveries came from the financial industry at $1.7 billion.

Whistleblowers filed 702 suits in 2016 and those suits generated $2.9 billion in recovered funds. Those whistleblowers picked up $519 million for their efforts.

The pharmaceutical and medical device industry paid out the most at $1.2 billion.

Wyeth and Pfizer paid $784 million on false claims it made on an acid reflux drug. Of that $371 million went to state Medicaid programs.

Novartis Pharmaceuticals paid $390 million for giving kickbacks to specialty pharmacists for recommending an anti-rejection drug for kidney transplant recipients.

Wells Fargo coughed up $1.2 billion and Freedom Mortgage paid out $113 million for housing and mortgage “mistakes.”

Source: Insurance Journal

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Top Stories

Cyber Attackers

Will Be More Cunning In 2017

Every year cyber attackers and hackers get more sophisticated and bolder. An Aon company Stroz Friedberg said look for 2017 to be even worse than previous years. Its report on the subject is titled 2017 Cybersecurity Predictions and those predictions are dire.

Ed Stroz — the firm’s co-founder — said, “In 2016 we witnessed everything from cyber attacks influencing public opinion to hacked IoT devices and the introduction of new cyber security regulations. This year we’ll see an intensification of these threats, along with new

January 2017 | Main Street Industry News | www.pianeia.com | 16

Top Stories challenges and a blurring of lines between the actions and responsibilities of the state, markets, businesses and civil society.”

What we saw in 2016 — he added — just scratches the surface. “The flood of fake news and nation state-backed attacks in this past year’s election are just a sign of things to come, as attackers find new ways to seek faster and wider access to data and exploit sensitive information.”

The conclusion is obvious. Cyber attack risk is just part of doing business whether you’re a business or government and finding ways to protect yourself from hacking is critical.

And with that here are some of the Stroz Friedberg predictions: • Criminals will use more Internet of Things devices to attack infrastructure.

• Data integrity attacks will increase.

“Criminals will seek to sow confusion and doubt over the accuracy and reliability of information, impairing decision-making across the private and public sector,” the report predicted.

• Phishing and social engineering attacks will be more targeted and more advanced.

These criminals know the human element is the weakest link and easiest access to the proverbial door. This is called socialengineering tactics.

• Red teaming will increase. It is ethical hacking designed to detect system flaws.

• Cyber attacks from nations will continue to be problematic and could end up influencing global and political policy.

“As government, business, and consumers balance rapid innovation in technology with changing cyber threats, every year sees an intensification of existing risks, and many new emerging ones; 2017 will be no different in that respect,” the report added.

Look for governments — like the U.S. under a Trump administration — to take a tougher stance on online attacks from other countries.

And with that the firm suggested some things business can do to protect itself: • Optimize your company’s cyber security posture. Continually assess and prioritize cyber threats and vulnerabilities, and improve incident response (IR) readiness.

• Evaluate insider risk. Ensure your formal program is current.

• Conduct M&A pre-deal cyber due diligence early. Perform alongside compliance and financial due diligence. Assess, protect and leverage intellectual property, and commercially valuable information.

• Consider self-regulation by adopting higher security standards in products and services prior to going to market, even if cost is prohibitive.

Source links: Carrier Management, Insurance Journal

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Top Stories

What's Keeping You Up At Night?

We live in difficult times. Most of us are worried about more things today than our parents and grandparents. Worries always intrigue pollsters.

They’re also a hot topic for insurers because insurance is about people.

And insurers worry about people and worry about what people are worrying about.

Always interested in worries, Aon looked at worries by talking to 800 employers.

ObamaCare and what will replace it and what the new Congress has in mind for Medicare topped the list for 48% of those polled.

It was the largest percentage. Here’s what else Aon found: • 17% worry about prescription drug costs • 15% worry about excise taxes • 10% are upset about possible tax

exclusion limitations on employer-

sponsored health insurance • 8% worry about paid leave laws • 2% fret over wellness programs PIA members will be soon seeing an email from PIA National about what keeps you up at night.

The association is partnering with National Underwriter Property & Casualty and Flaspöhler on the survey titled the 2017 National Underwriter/PIA Independent Agent Survey.

It promises a look at and deep and revealing insights from independent agents on: • What they desire most from carriers • How they perceive the P&C market and

changing distribution channels • How their commissions are structured • What their greatest technology challenges

are • What they need to grow their books of

business You’ll receive the questionnaire in the mail this week — if you haven’t already — and are encouraged to do it and send it back.

PIA National President Gary Blackwell said, “PIA is pleased to partner with National Underwriter and Flaspöhler in this groundbreaking survey.

This provides a powerful opportunity to PIA members to share their views with the entire industry and focus attention on their needs. I urge PIA members to participate.”

National Underwriter’s Editor-in-Chief Shawn Moynihan agreed and said, “As we near the finish line on this project, we want to hear from PIA members about the issues that concern them most and directly affect their agencies. When the link lands in your inbox, make your voice heard.”

Sources: Employee Benefit Advisor, PropertyCasualty360.com

January 2017 | Main Street Industry News | www.pianeia.com | 18

January 2017 | Main Street Industry News |www.pianeia.com| 19

Top Stories

More P&C Predictions 2017 At the beginning of any year the prognosticators pop out the crystal balls and begin making predictions about what this business or that can expect. For insurance — and they’re just two of many — Ernst & Young and Willis Towers Watson have written their thoughts about the coming year.

Willis Towers Watson’s 2017 Marketplace Realities predicts another year that favors those purchasing insurance. It says market conditions are going to be dictated by ample capacity and that buyers will be able to negotiate good deals.

Matt Keeping — who heads broking for Willis North America — put the report in perspective.

“The mix of increases and decreases, while subject to some change line by line, overall remains steady. The marketplace continues to offer opportunities for buyers, but as always, strategic planning yields the best results.

The key point for buyers is to understand the nuances of the market so they can optimize their risk management programs,” he said.

Declines will continue for property lines at 7.5% to 10% on average for companies writing business not exposed to significant natural disaster. Those writing that kind of business can expect to see a 10% to 12.5% drop.

“While insurance companies have been struggling to achieve the level of growth that shareholders and industry analysts hope to see, the overall stability of the industry — its ability to absorb losses, pay claims following catastrophes and support sustainable business growth — is a positive sign,” Keeping said.

Rate Changes by Line Non-CAT Risks • -7% to -10%

CAT-Exposed Risks • -10% to -12.5%

• General Liability: -5% to flat to +5% to

+10% for risks with losses • Umbrella/Excess: -10% to flat

• Worker’s Compensation: -2.5% to +2.5% • Auto: +3% to +10% • D&O: -7.5% to flat

• E&O with good loss experience: Flat to

+5%

• E&O with bad loss experience: +15% to

+20%

• EPLI: Flat to +3%, PIA members in

California will see +5% to +15% • Fiduciary: -5% to +20%

Look for decreases in: • Property • Aviation • D&O • Energy • Fidelity • Health care professional • International • Marine

January 2017 | Main Street Industry News | www.pianeia.com | 20

Top Stories

Others see gloom and doom in what Trump might do.

• Political risks • Terrorism

Munich Re — in the report — predicts a big decline in premium growth from 4% to 1.5%.

Investment income for insurers fell from an early $31.6 billion prediction for 2016 to $25.5 billion by mid-year last year. The 2017 outlook doesn’t look much better.

Look for increases in: • Auto • Cyber • Employee benefits • Employee practices liability

Banks are cutting growth outlooks as well. Bank of America predicts a drop from 2.1% to 1.8%.

• Errors & Omissions • Trade Credit

A mix of increases and decreases: • Casualty • Workers’ compensation

Ernst & Young predicts insurers will delve deeper into technology to meet people where they want to be met. New products and coverage options will also continue to be developed.

In other words, the report says insurance will face a lot of challenges in 2017 and the report notes they can be addressed in four ways:

• Environmental • Fiduciary • Kidnap & Ransom • Surety Ernst & Young’s report is titled 2017 U.S. Property-Casualty Outlook. It checked in with chief risk officers of several insurance companies. The worries are many and range from 70,000 expected to retire this year to what the Trump administration will do to the economy to — always — pesky regulations.

The company predicts overall growth in the industry as a moderate 2.1% However, these risk officers think a Trump administration’s tax cutting proposals and a push to spend more on the infrastructure could have a positive impact on insurance. Some think these policies will help with growth and profits.

• Focusing on new products and business models while still addressing customers’ needs and expectations.

• Using technology to help automate key processes, systematically applying advanced analytics enterprise-wide, and investing in key technologies to position companies for the future.

• Anticipating the growing cyber risk from hackers and taking steps to identify and mitigate their activities.

• Rethinking how companies attract and retain their workforce, including a clear understanding of how millennials view insurance and the opportunities it provides.

Sources: Carrier Management, PropertyCasualty360.com

January 2017 | Main Street Industry News |www.pianeia.com| 21

Top Stories

ObamaCare Ongoing Drama Leads to Uncertainty

President Obama’s policies, executive orders and much of what a Democrat-controlled Congress passed, and what the party could keep in a split powered Congress is in danger. Republicans are already moving on the Affordable Care Act and have plans for other changes.

While Republicans wait for the inauguration of Donald Trump to really get going, the Democrats are plotting roadblocks. That will set

up a Supreme Court Justice nominee tussle, tax reform fights and lots of pushback on Trump’s cabinet nominees.

On business, House Speaker Paul Ryan says President Obama overdid regulations and the Republican Congress is going to make some changes. “I hear probably more about the strangulation of regulations on business and their growth and their development than probably anything else. I think if we can provide regulatory relief right away, that can breathe a sigh of relief into the economy,” Ryan said.

But the battle that will be the most publicized is the growing controversy over the repeal of President Obama’s signature achievement, the Affordable Care Act. Repeal is a certainty but

January 2017 | Main Street Industry News | www.pianeia.com | 22

Top Stories no Republican plan is emerging out of all the bluster.

It’s a fact not lost on President Obama.

“If they’re so convinced they can do it better, they shouldn’t be afraid to make that presentation. It is interesting to try to figure out why is it that they’re trying to rush the repeal so quick? What is it that they’re afraid of?” Obama said in an interview.

The president wants to see a Republican plan put beside the Affordable Care Act so people can compare page for page. “Let the American people gauge: Is this going to result in something better than what Obamacare has produced?” Obama added.

He also said he’d definitely support a Republican plan if it’s better than what he managed to get passed and covers more people at a lower cost. “If it works, I will be the first one to say, ‘Great, you should have told me that back in 2009.’ I suspect that will not happen,” he said.

Vice President elect Mike Pence said the president elect is preparing a series of executive orders to assist once the Republican Congress repeals the Affordable Care Act. “We’re working now on a series of executive orders that will enable that orderly transition to take place even as Congress appropriately debates alternatives to and replacements for ObamaCare,” he said.

But — again — President Obama said cooler heads need to prevail. He met with Democrats last week to see what can be done to stave off disaster. “Despite the negativity, you have a big chunk of the country that wants this thing to succeed. There are real lives at stake in this thing,” Obama added.

Speaker Ryan countered and said Republicans are well aware that this is serving a big chunk

of America but it’s also a disaster. “This law has failed. Americans are struggling. We want to make sure we don’t pull the rug out from anybody during that transition. That’s the point we’re all trying to make,” Ryan said.

However, many Republicans like Sen. Bob Corker of Tennessee are worried that ObamaCare will just be dumped without a replacement. “It’d be best to do it all at one time, and not have the uncertainty. I realize that’s not the path that’s been taken. I think everyone would acknowledge that it’s fraught with potential destabilizations of the market and never finding a replacement, but that’s the path that obviously is being taken,” he said.

What Republicans do agree upon is making whatever passes much simpler. Sen. David Perdue of Georgia said, “We need to put patients in charge of their health-care choices with a free-market solution that increases access and lowers the overall spiraling costs of health care, which Obamacare did nothing to address.”

Republicans have a ton of problems to overcome and the biggest of all may be a replacement that doesn’t cover everybody.

Senate Majority Leader Mitch McConnell and Speaker Ryan won’t address the topic when questioned. Both have avoided a direct answer.

However, MSNBC Morning Joe host Joe Scarborough asked Trump advisor Kellyanne Conway, “If Americans have healthcare today under the Affordable Care Act, will they have healthcare — it sounds like Donald Trump is saying they will have healthcare — under whatever replaces it?”

Her answer was immediate. “That is correct. We don’t want anyone who currently has insurance to not have insurance,” she said.

Sources: New York Times, The Hill, Insurance Business America, Washington Post, Carrier Management

January 2017 | Main Street Industry News |www.pianeia.com| 23

Top Stories

FLOOD Getting Closer to an NFIP Renewal Sometime in 2017 Congress is going to have to come to grips with what to do about the National Flood Insurance Program (NFIP). It expires in September. Members of Congress and the insurance industry are all on the same page so the good news this time around is no one expects anything like the 17 temporary extensions we saw in 2012.

The House Financial Service Committee’s Subcommittee on Housing and Insurance has already held two hearings this year. And what all attending agree upon is the status quo being unacceptable. The NFIP is $24 billion in debt and there is a bipartisan effort to find a way to turn that around.

That likely means moving it more into the private sector.

In fact, that was the focus of the January 13th hearing. And the industry is responding positively which is — says Tom Glassic of the Property Casualty Insurers Association of America — ironic.

“In the mid-2000s, if you talked to the major insurers about offering primary Flood or first-dollar Flood, those were fighting words,” he said.

Dr. Robert Hartwig — formerly of the Insurance Information Institute (I.I.I.) — said change in the availability of capital and some risk changes are driving the interest of insurers. Another plus is advancements in the modeling of flood risk.

Things are also changing in Congress. When passing the Biggert-Waters Flood Insurance Reform Act of 2012 (BW-12), Hartwig said legislators showed interest and it “was the first-time Congress was somewhat willing to deal with the fact that the industry couldn’t get in because it couldn’t be competitive based on rates charged by NFIP.” But Biggert-Waters is moving rates to a more be more sound actuarily and the industry feels it can compete with the government. While that’s a positive, some in the industry and in Congress are warning that private insurance may cherry pick and just take the least risky properties and leave the more expensive potential losers to the NFIP. Source: PropertyCasualty360.com

January 2017 | Main Street Industry News | www.pianeia.com | 24

Top Stories

January 2017 | Main Street Industry News |www.pianeia.com| 25

PIA NE IA Events

Upcoming Events Calendar 2016 For information and to register Click Here or call (402) 392-1611.

Date

Class/Webinar

Where

When

February 7, 2017

Personal Lines Complications: Because Simple is just too darn Easy

NE

Webinar: 12:00PM - 3:00PM

February 9, 2017

CISR: Personal Lines Miscellaneous

Des Moines

Hilton Garden Inn Des Moines/Urbandale

February 15, 2017

How to be the Agent Advocate at Claim Time

NE/IA

Webinar: 12:00PM - 3:00PM

February 23, 2017

CISR: Commercial Casualty 1

Davenport

Saint Ambrose University

February 22-24, 2017

CIC: Agency Management Institute

West Des Moines

Holiday Inn Hotel & Suites

February 24, 2017

And the CHAOS Continues

NE/IA

Webinar: 8:00AM - 11:00AM

March 9, 2017

Regarding Ethics

NE

Webinar: 1:00PM - 4:00PM

March 9, 2017

CISR: Insuring Personal Residential Property

Hiawatha

Kirkwood Linn Regional Center

March 14, 2017

Executive & Management Liability

NE/IA

Webinar: 8:00AM - 11:00AM

March 15-17, 2017

CIC: Commercial Property Institute

Omaha

Hilton Double Tree Omaha SouthWest

March 22, 2017

CISR: Elements of Risk Management

Des Moines

Hilton Garden Inn Des Moines/Urbandale

April 5, 2017

CISR: Insuring Personal Auto Exposures

Davenport

Saint Ambrose University

April 5-8, 2017

Federal Legislative Summit & Governance Meetings

Washington DC

Crystal City Marriott, Arlington, VA

April 12, 2017

CISR: Insuring Commercial Property

Hiawatha

Kirkwood Linn Regional Center

April 19, 2017

CISR: Commercial Casualty 2

Des Moines

Hilton Garden Inn Des Moines/Urbandale

April 19-21, 2017

CIC: Commercial Property Institute

Cedar Rapids

Cedar Rapids Marriott

April 25-26, 2017

Ruble: Graduate Seminar

Omaha

Embassy Suites Omaha La Vista

May 11, 2017

CISR: Insuring Personal Residential Property

Des Moines

Hilton Garden Inn Des Moines/Urbandale

May 17-19, 2017

CIC: Agency Management Institute

Lincoln

Marriott Courtyard/ Haymarket

January 2017 | Main Street Industry News | www.pianeia.com | 26

PIA NE IA Events

May 24, 2017

CISR: Personal Lines Miscellaneous

Hiawatha

Kirkwood Linn Regional Center

June 6-7, 2017

PIA Annual Convention

Nebraska City, NE

Lied Lodge, Nebraska City

June 13, 2017

CISR: Insuring Commercial Property

Davenport

Saint Ambrose University

June 14-16, 2017

CIC: Commercial Multi Line Institute

West Des Moines

Holiday Inn Hotel & Suites

June 22, 2017

CISR: Commercial Casualty 1

Des Moines

Hilton Garden Inn Des Moines/Urbandale

July 11, 2017

CISR: Commercial Casualty 1

Hiawatha

Kirkwood Linn Regional Center

July 18, 2017

CISR: William T. Hold: Advanced Learning Seminar

Des Moines

Hilton Garden Inn Des Moines/Urbandale

July 19-21, 2017

CIC: Commercial Casualty Institute

Omaha

Hilton Double Tree Omaha SouthWest

July 25-26, 2017

Ruble: Graduate Seminar

West Des Moines

Holiday Inn Hotel & Suites

August 8, 2017

CISR: Insuring Personal Auto Exposures

Des Moines

Hilton Garden Inn Des Moines/Urbandale

August 22, 2017

CISR: Insuring Personal Residential Property

Davenport

Saint Ambrose University

August 23-25, 2017

CIC: Personal Lines Institute

Cedar Rapids

Cedar Rapids Marriott

August 24, 2017

Greater Omaha Committee Scholarship Golf Outing

Ashland

Iron Horse Golf Club

September 13, 2017

CISR: Agency Operations

Hiawatha

Kirkwood Linn Regional Center

September 13-16, 2017

Fall Governance Meetings

Minneapolis, Marquette Hotel, MN Minneapolis, MN

September 19, 2017

CISR: Dynamics of Service

Des Moines

Hilton Garden Inn Des Moines/Urbandale

September 20-22, 2017

CIC: Commercial Multi Line Institute

Lincoln

Marriott Courtyard/ Haymarket

October 11-13, 2017

CIC: Commercial Casualty Institute

West Des Moines

Holiday Inn Hotel & Suites

October 18, 2017

CISR: Agency Operations

Des Moines

Hilton Garden Inn Des Moines/Urbandale

October 26, 2017

CISR: Personal Lines Miscellaneous

Davenport

Saint Ambrose University

November 9, 2017

CISR: Commercial Casualty 2

Hiawatha

Kirkwood Linn Regional Center

November 14, 2017

CISR: Insuring Commercial Property

Des Moines

Hilton Garden Inn Des Moines/Urbandale

November 15-17, 2017

CIC: Life & Health Institute

Omaha

Hilton Double Tree Omaha SouthWest

January 2017 | Main Street Industry News |www.pianeia.com| 27

You Can’t Always Prevent An Accident...

But You Can Prepare For One With The PIA Trust

Accidental Death and Dismemberment Insurance Plan AD&D COVERAGE DESIGNED WITH LOCAL AGENTS IN MIND As a PIA Member* serving Main Street America, you and your employees** have access to a high-quality, competitively priced AD&D plan through the PIA Services Group Insurance Fund.

Accidents can occur anytime, anywhere. With the PIA Trust Accidental Death & Dismemberment Insurance Plan, you and your qualified dependents can be covered in case of an accident 24 hours a day, anywhere in the world -- at home, at work, or on vacation.

For more information about the PIA Trust Accidental Death & Dismemberment Insurance Plan, please contact your local PIA Affiliate or call the Plan Administrator at (800) 336-4759.

PIA SERVICES GROUP INSURANCE FUND

Additional information is also available on-line at www.piatrust.com. * PIA National membership, when required, must be current at all times ** No minimum participation required

The policy or its provisions may vary or be unavailable in some states. The policy has exclusions and limitations which may affect any benefits payable.

Underwritten by Unimerica Insurance Company, Association Administrative Address, P.O. Box 17828, Portland, ME 04112-8828, under Policy Form ADD-6001-A (UIC).

Insurance Program Administered by Lockton Affinity, LLC.