Main Street Industry News - July 2015

INSIDE Major Moves: One Acquisition and One Merger » 7 Data: A Ton of it Stolen in 2014 Sadly, More to Come » 10 Workers Compensation: More of an E&O risk than you might think » 12 Too Much Social Change: Distressing? » 16 ObamaCare: The Decision a Done Deal? Not so Fast » 21 An Insurance Worry: Cyber Hacker Tactics Trying to Keep Up » 23 Cover Photo Credit: Mr. Nixter, Fireworks at Sunset, Nebraska

July 2015 | Published Monthly

Insuring the Midlands Since 1891 Andy Kraus, CPCU Vice President of Agencies 800-742-7433 akraus@fmne.com

Did you know that PIA has created a series of healthcare ads that PIA members can run in their local newspapers and on local radio stations?

PIA’s new ads ask the simple question, “Do you need help with health insurance?” The ads acknowledge that many Americans need assistance purchasing health insurance and suggest that consumers consult their local Professional Insurance Agent.

These ads are made available to PIA members through the PIA Branding Program. PIA members can preview the ads and download the ad files at www.piabrandingprogram.com.

As with previous ads made available through the PIA Branding Program, the new ads contain space for PIA members to add their agency contact information.

In addition to PIA’s healthcare ads, PIA members can download an extensive series of print and radio ads through the PIA Branding Program. Many of the ads are available in both English and Spanish.

If you are not yet a PIA member, please consider joining the association that arms agents with the tools they need to succeed. 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 Major Moves: One Acquisition and One Merger | 7 ACE Limited has agreed to acquire The Chubb Corporation. The price tag is $28.3 billion.

High Merger Activity & Smaller Insurers | 7 A.M. Best has been studying the recent spate of mergers.

Are Auto Insurers Spending too Much Money on Advertising? | 9 J. Robert Hunter of the Consumer Federation of America thinks auto insurers are spending too much money advertising.

Data: A Ton of it Stolen in 2014 Sadly, More to Come | 10 Here’s a frightening statistic. By 2019, breaches on a global level — says Juniper Research — will cost the world’s economy a staggering $2.1 trillion.

Workers Compensation: More of an E&O risk than you might think | 12 Dress Codes: A New Era | 8 Dress codes are relaxing everywhere.

Business consultants used to recommend a more formal code.

How Can this Be? Self Driver Cars in Near Accident | 14 The future is here. Self-driving autos and soon to be self-flying airplanes.

IMF Wants a Federal U.S. Insurance Regulator | 15 The International Monetary Fund (IMF) worries about the U.S. economy.

Work Comp: Small Employers & Video Cameras | 15 Workers’ compensation fraud is a big concern for employers big and small.

Too Much Social Change: Distressing? | 16 Social change is upon us in a big way.

Anthem Buys Cigna: Now What? | 19 Anthem just picked up Cigna for $54.2 billion.

ObamaCare The Decision a Done Deal? Not so Fast | 21 The U.S. Supreme’s edict that the state subsidies are legal at the federal level seemed to put a final nail in the efforts of opponents to do away with the Affordable Care Act. ObamaCare Fines Increase | 22 Like when we all played hide and seek as kids and it was time to bag it and go home the cry would go out.

An Insurance Worry: Cyber Hacker Tactics Trying to Keep Up | 23 Though there is much income to be made from cyber insurance business, the insurance industry also worries about the increase in the purchasing of said insurance.

PIA NE IA Events CPIA Classes | 24 PIA & SAMIC | 25 Upcoming Events Calendar 2015 | 27

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July 2015 | Main Street Industry News | www.pianeia.com | 4

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We pledge to always conduct ourselves in a manner that enhances the public image of PIA and adds real value to our members.

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Top Stories

Major Moves:

Another deal was the acquisition of Towers Watson by Willis Group Holdings. Willis is the third largest broker in the nation and Towers Watson is a highly respected risk advisor. The deal creates a firm with a combined market value of $18 billion.

One Acquisition and One Merger

Evan Greenberg

ACE Limited has agreed to acquire The Chubb Corporation. The price tag is $28.3 billion. It comes in the form of cash and stock.

Combined, the new company has $46 billion in equity and $150 billion in investments, cash and other assets.

ACE CEO Evan Greenberg said, “This transaction advances our strategy in a meaningful way and represents an outstanding opportunity to create significant value over a reasonable period of time for both ACE and Chubb shareholders. We are combining two great underwriting companies that are highly complementary. We will make each other better and create a unique company in a class of its own that has greater growth and earning power than the sum of the two companies separately.”

Willis owns 50.1% of the company. It will be called Willis Towers Watson and will be headquartered in Ireland.

Willis CEO Dominic Casserley said, “The rationale for the merger is powerful. At one stroke, the combination fast-tracks each company’s growth strategy and offers a truly compelling value proposition.”

James McCann will be the firm’s chairman and Towers Watson CEO Jack Haley will be the CEO. There will be 12 directors on the new board — six from each company. n Source links: insurancejournal.com and Carrier Management

High Merger Activity & Smaller Insurers

Chubb’s president and CEO John Finnegan said the deal is a “compelling transaction.

The combination brings together two highly respected and successful companies with complementary capabilities, assets and geographic footprints.”

A.M. Best has been studying the recent spate of mergers. In a many worded title typical of the industry — Insurance and Reinsurance Market Conditions Set the Scene for Further Takeover Activity — A.M. Best said there have been 14 major mergers in the last 15-months. The report worries that continued merger activity at this rate will harm the nation’s smaller insurers.

Greenberg will head the new company and Finnegan will be the executive vice chairman for External Affairs of North America. The company board expands from 14 to 18.

The report said, “The losers from this spate of takeover deals are likely to be the smaller [insurers/reinsurers] and brokers, especially those that are unable to demonstrate particular

July 2015 | Main Street Industry News |www.pianeia.com| 7

Top Stories expertise. Smaller reinsurers will continue to struggle as dominant companies can have more influence on terms and conditions or can steer business towards an affiliate.”

Policyholders — A.M. Best said — are also at a possible risk. On one hand, fewer choices mean higher prices but stronger, more financially sound carriers can also produce the same result. It can also produce product expansion and with sophisticated underwriting, greater security.

Thus the mergers will continue. “A.M. Best expects industry consolidation to remain at the forefront of the management agenda as companies attempt to drive cost efficiencies, diversify both geographically and by product and increase market share,” the report added.

A.M. Best also pointed out what is driving M&A activity: • Continued pressure on rates and terms and condition in the reinsurance sector.

• Well-capitalized primary insurers retaining more risk on their balance sheets.

• Well-capitalized insurers and reinsurers buying back shares, boosting dividends and paying special dividends.

• Specialist property/casualty insurers/ reinsurers who may explore mergers to help use additional capital to consolidate competitive positions and grow in new areas/locations.

• The desire to reduce expenses and boost cost efficiencies.

• Low interest rates enabling cheap borrowing to financial deals. n Source: A.M. Best Co.

Dress Codes: A New Era Dress codes are relaxing everywhere.

Business consultants used to recommend a more formal code. Today — with Millennials beginning to rule the retail roost — things have changed.

And the first place we’re noticing the change is with large employers who — says retail consultant Neil Stern — find the choice to be a no-brainer. “When you start to compete for workers, there’s both hard and soft benefits.

The hard benefits are what I am going to pay you. But people are also paying attention to all the other quality-ofworkplace environmental issues that go along with it.”

Smart businesses are cutting back — or even eliminating — hard benefits.

So relaxing the soft ones and pumping them up makes perfect business sense.

And it makes the most perfect sense when dealing with Millennials.

“If you don’t allow them to have some freedom, they’re not going to work for you,” Stern said. Do demand cleanliness and make sure your employees are wellgroomed.

The definition of well-groomed is where things get sticky. You’ll — no doubt — figure it out. n Source link: Insurance Business America

July 2015 | Main Street Industry News | www.pianeia.com | 8

Top Stories Also, lobbying expenses and other such anticonsumer expenses are in the rates in all states except California,” he said.

And insurance advertising — especially on TV — is expensive. GEICO spent $4.5 million alone — or $150,000 per second — for its 30-second commercial in the last Super Bowl.

Hunter’s point doesn’t stop there. GEICO — stats say — spends $6 of every $100 of premium dollars collected on advertising. The company’s advertising budget last year hit $1.2 billion — that’s billion with a B and not million.

Allstate spent $900 million. Progressive’s budget hit $600 million on Flo’s commercials and ads.

Dr. Robert Hartwig — who heads the Insurance Information Institute (I.I.I.) — waved off Hunter’s criticism. He said advertising is a small slice of a company budget. Most insurance money is spent on claims.

Are Auto Insurers Spending too Much Money on Advertising?

J. Robert Hunter of the Consumer Federation of America thinks auto insurers are spending too much money advertising. He contends the $6 billion a year spent trying to sway consumers is the reason many of them are raising their rates.

How big is the $6 billion figure? It puts the insurance industry in the top-10 biggest advertisers in the nation. Spending is so high that Hunter says insurance outstrips other industries by 8%. “It drives rates up since every penny of the ads is built into the rates.

Hartwig said Hunter’s goal is federal regulation of insurance. “Bob Hunter’s model is that insurance should be offered by a single federal insurer prohibited from spending anything on advertising.”

Here’s what SNL Financial says were the top industry advertisers in 2013. The figures quoted in the body of this story are from 2014. n 1. Berkshire Hathaway who owns Geico — $935.1 million 2. Allstate — $654.8 million 3. State Farm — $608.1 million 4. Progressive — $604.2 million 5. Nationwide — $296.7 million 6. Liberty Mutual — $197.0 million 7. UnitedHealth — $193.3 million 8. Farmers Insurance — $165.8 million 9. American Family — $148.7 million 10. United Services Auto — $133.0 million Source link: Insurance Business America

July 2015 | Main Street Industry News |www.pianeia.com| 9

Top Stories

Data: A Ton of it Stolen in 2014 Sadly, More to Come

Here’s a frightening statistic. By 2019, breaches on a global level — says Juniper Research — will cost the world’s economy a staggering $2.1 trillion.

The same report totaled all of the records compromised in 2014. There were 290.5 million reported. That’s reported. The unreported numbers — if discovered and published — would pump that number up significantly.

The Identity Theft Resource Center and Identity Theft 911 said in 2014 there were a record 783 breaches. Breaches were 27.5% more than 2013. And again, by 2019 the cost of breaches will hit $2.1 trillion.

The average cost of a major hacking is also way up. It’s up 9%.

Few of those doing the hacking are every caught and prosecuted making data base hacking an almost perfect crime. And still governments and companies world wide seem

powerless to stop the onslaught. Worse, they offer no solutions.

Here are the top-10 breaches of all-time in descending order.

10. The Home Depot — close to 56 million credit and debit cards were compromised and the loss is expected to approach $56 million.

9. Sony Pictures — Recovery cost will be $100 million as 100 terabytes of data were stolen and malware was installed that erased company data.

8. Anthem — Maybe the worst hacking of all. It will cost up to $100 million and the information of 80-million people was compromised. And this isn’t just credit card info. It’s addresses, salaries, medical histories, Social Security numbers and more.

July 2015 | Main Street Industry News | www.pianeia.com | 10

Top Stories 7. Heartland Payment Systems — $140 million is the total cost of repair and reparations as 130 million credit and debit card numbers were exposed.

3. Hannaford Bros — It’s a grocery chain based in Maine. Hannaford was hacked for 4.2 million credit and debit card numbers. To make things good cost $252 million.

6. TJ Maxx — This breach was done by the same group that did Heartland Payment Systems. Over 100 million credit card numbers were taken and it cost the chain $118 million to cover the damages.

2. Veterans Administration — 26.5 million veterans saw their personal information compromised. This one comes from data housed on a laptop computer that was taken home. A robbery happened, the laptop was stolen. The cost will be somewhere between $100 million to $500 million.

5. Target — The breach was close to the Christmas holidays on Black Friday and hackers getting access to 110 million customers cost the chain $162 million.

4. Sony PlayStation — Over 100 million customer records were stolen. The cost $171 million to Sony and the company had to shut down the profitable Playstation Network.

1. Epsilon — For the first time experts are talking costs up to ten digits and not seven. It’s $100 million to $4 billion in losses from hackers who got email addresses and names from Epsilon’s marketing division. It’s clients are Best Buy, TiVo, JPMorgan Chase, Capital One, Citi, and Target. n

Source link: PropertyCasualty360.com

®

July 2015 | Main Street Industry News |www.pianeia.com| 11

Top Stories

Workers Compensation:

More of an E&O risk than you might think

by Curtis M. Pearsall, CPCU, AIAF, CPIA, President, Pearsall Associates Inc. Special Consultant to the Utica National Agents E&O program If you asked most agents about the errors-andomissions risk involving workers compensation, it is a good bet the vast majority would say it presents minimal, if any, real E&O claims potential.

In reality, with a number of E&O carriers, E&O claims arising from the sales and service of workers compensation is in the top 5, generating upwards of 10% of all E&O claims every year.

This is a line of business to which agents should be sensitive.

In most states, the legal standard of an agent is to provide the coverage the client specifically requests. In the early 1980s, the Massachusetts E&O case Rae vs. Air Speed put a slightly different spin on this. The case, which was eventually appealed to the Massachusetts Supreme Judicial Court, concluded that if the coverage at issue is compulsory, an injured third party can assert a negligence claim against the tortfeasor’s agent. As a result, it seems incumbent for agents to know the customers they are dealing with (or looking to deal with) and whether there is a workers compensation exposure that must be addressed.

A potential fraud issue

There are a variety of factors that go into calculating and determining the appropriate premium with workers compensation. These include job classification codes, experience modifications, payroll, SIC codes, etc.

Insurance carriers expect the application to reflect correct information. The determination of these factors (or the intentional misclassification of these factors) has been a central issue for fraud. It is generally believed that when businessowners seek a lower premium through the misrepresentation of the nature or class of the business, employees’ specific duties, or under-reporting payroll, they are committing premium fraud. Agents must be aware of this to avoid becoming an unknowing participant in any fraud scenarios.

Does the subcontractor have workers compensation?

Most agents insure a contractor or two.

This class of business poses a number of E&O issues. When an agent writes workers compensation for a contractor, the agent may believe his or her job is done. However, there is significant potential for problems to develop. While the contractor needs workers compensation, it is important the client knows whether any subcontractors he or she hires has workers compensation, too. It’s probably best to verify this via a certificate.

If an employee of the sub is injured on the job and the sub does not have workers compensation, the contractor that retained the sub could be deemed to be the employer

July 2015 | Main Street Industry News | www.pianeia.com | 12

Top Stories and have to provide workers compensation benefits. This issue also presents auditing concerns because the payroll for the sub could now get factored in the development of the workers compensation audit, resulting in some significant additional premiums.

Clients with current/emerging multistate exposures

It is not uncommon for a business to do business in other states. Many years ago, providing coverage for employees in these additional states was handled by the Broad Form All State Endorsement. This form no longer in exists and the industry has developed a new method for handling this exposure.

For states in which an employer actively conducts business operations, at the effective or renewal date of the policy the state must be listed in Item 3A of the policy. The remaining states where the employer may, at some time in the future, conduct business operations must be listed in Item 3C of the policy. If an employer begins operations in a 3C-listed state, the standard policy requires the employer to notify the insurance company as soon as work begins.

That state should now be listed in Item 3A. There are a handful of states, called “monopolistic fund states,” that require that workers compensation coverage be purchased from the state fund. Monopolistic fund states typically do not have a provision for providing an “all states” provision.

Agents must communicate this information to their clients and have a means to identify a change in the business operation, such as an expansion of states. This information should also be included on proposals.

Sole proprietor/partnership issues

If you have a client acting as a sole proprietor or partnership, oftentimes there have been issues as to whether the sole proprietor or partners

are actually covered by their own workers compensation coverage. As the agent, you wrote a workers compensation policy for the business, but are the individual or partners covered by that policy? Unfortunately, the discovery of this matter seems to normally surface at claims time when it is difficult to do much about it.

Agents must know how their state handles this issue. Some states exclude “this class of employees” and they have to “opt in” if they want coverage. Other states include these employees and they have to “opt out.”

Typically, such key decisions need to be made at the inception or renewal anniversary of the coverage. Bottom line, for those clients that you insure that operate as a sole proprietor or partnership, do the key executives know if they are covered? Documentation of discussions centering on this issue should be detailed and memorialized back to the client.

When certificates of insurance are completed and the objective is to show evidence of workers compensation coverage, there is a question on the certificate that agents must answer: Any proprietor/partner/executive officer/member excluded? Make sure it is answered correctly because the implications are significant.

Is the policy subject to audit?

There have been situations where the customer buys a workers compensation policy and receives a significant “additional premium” upon audit. The customer brings an E&O action against the agent claiming he or she was unaware of the audit provision. Agents should ensure that proposals/offerings of coverage include statements detailing any audit provisions. All discussions regarding this issue should be well documented.

Workers compensation presents more E&O issues than many agents think. Understand these issues and put procedures in place to avoid any part of E&O litigation. n

July 2015 | Main Street Industry News |www.pianeia.com| 13

Top Stories

The future is here. Self-driving autos and soon to be self-flying airplanes. Sit back in the safety of your cushioned existence, text away, watch a movie, take a nap and — like Greyhound used to say — leave the driving to us.

How safe do you feel with the thought of being in a vehicle that drives itself? Most of us aren’t sure. Now, now the experts say. No need to worry. Your computerized vehicle knows just what to do, how to get you where you need to go and you are completely safe.

Then you read a report like this one and not sure becomes even less sure. And maybe this close call is because the two computer systems of the two vehicles involved were busy computing and got sidetracked.

Here’s what happened. Two self driving vehicles — one done by Google and the other by Delphi Automotive had a close call on a street somewhere in Silicon Valley. Vehicle one — Delphi’s prototype Audi Q5 with lasers, radar, cameras and special computer hardware — was changing lanes. It got cut off by a Google prototype self driving Lexus RX400h with all the same computing and camera gear.

Brakes were hit and no collision.

But it makes you wonder. The Google vehicle, powered by the same computer as the Audi ought to have known the Audi was there.

No comment from either team. n Source link: Carrier Management

Since they both speak the same language, maybe that’s the reason.

July 2015 | Main Street Industry News | www.pianeia.com | 14

Top Stories

IMF Wants a Federal U.S. Insurance Regulator

Work Comp: Small Employers & Video Cameras

The International Monetary Fund (IMF) worries about the U.S. economy. It says in 2015 the U.S. economy will only grow 2.5%. That’s down from the 3% predicted in April. As a result, the IMF is urging the Federal Reserve to not to raise interest rates until the economy is cooking.

It also worries about insurance and wants the U.S. to fully implement the Dodd-Frank banking and financial reforms. Not content to stop there, the IMF report also calls for the federal government to create an independent insurance regulator at the national level.

“Before the memory of the crisis begins to fade, it will be important to complete the reform agenda and resist attempts to overturn previously agreed measures,” the IMF report said.

The every five-year report went on to say, “The regulatory landscape remains fragmented resulting in gaps, overlaps, and the potential for delayed responses to emerging risks, and should be simplified over time.”

The IMF wants the U.S. to get more serious about pinpointing those businesses and corporations — banks and non-banks — that could bring down the U.S. economy. n Source links: Carrier Management and Bloomberg Business

Workers’ compensation fraud is a big concern for employers big and small. One of the weapons being employed to prevent such fraud is video cameras. And it’s small employers who are leading the pack on this one.

Work comp carrier Employers did a survey of small employers and found one in 10 are worried that fraud is happening and a quarter of them — 25% — have installed surveillance cameras to monitor their on-the-job behavior.

Is it extreme paranoia? Maybe says Ranney Pageler of Employers. Those who have been burned — he notes — are more likely to employ the cameras.

“You may have 90 percent of policyholders who aren’t paying attention,” but for those who have been burned, “Boy, that is their hot button.”

Pageler said agents are paying attention, too and some are exploring the issue in continuing education. The survey found many small employers — 21% — aren’t sure whether work comp fraud is occurring or not. So he also advises agents to recommend cameras to their clients.

They appear to be producing positive results.

The survey also asked employers what activities they found that led to work comp fraud: • The employee has a history of claims — 58% • There were no witnesses to the incident — 52% • The employee did not report the injury or

illness in a timely manner — 52% • The reported incident coincides with a change

in employment status — 51% Source link: insurancejournal.com

July 2015 | Main Street Industry News |www.pianeia.com| 15

Top Stories

Too Much Social Change:

Distressing?

Here is one of the questions. Would you describe yourself as comfortable or uncomfortable with the country’s overall direction on social issues these days?

Strongly comfortable

14%

Somewhat comfortable

21%

Somewhat uncomfortable

21%

Strongly uncomfortable

42%

No opinion

2%

Here’s the percentages of those uncomfortable with the country’s direction on social issues:

Social change is upon us in a big way. For many Americans the pace and kind of change being experienced is uncomfortable. At least that’s the conclusion of a Washington Post-ABC News poll.

How uncomfortable? Try 63% of us not liking the direction the nation is taking and 40% of those polled say they feel strongly uncomfortable.

All adults

63%

Democrats

43%

Independents

68%

Republicans

82%

Whites

69%

Non-whites

51%

Men

60%

Women

66%

Breaking it down a bit more, the three most controversial measures of social change discussed by the people polled are gay marriage, the Affordable Care Act (ObamaCare) and what to do about the Confederate flag. And the level of discomfort depends largely on a person’s political party relationship, their view of President Obama and whether they’re on — as the pollsters put it — on the “losing side” of the social changes outlined.

As you just noted, over 80% of Republicans are uncomfortable while just 43% of Democrats say the same thing. Independents — however — sit at 68%. n Source link: Washington Post

July 2015 | Main Street Industry News | www.pianeia.com | 16

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Anthem Buys Cigna

Anthem just picked up Cigna for $54.2 billion.

Earlier reports had the price a bit lower at $48 billion and said Cigna was hesitant to pull the trigger because of the low $184 per share price.

A few days later when Anthem upped the ante, Cigna picked up $188 per share and the biggest deal in health insurance history became reality.

The trigger was — indeed — pulled.

Not only is it the biggest deal, but it creates the biggest health insurer in the nation. The new entity insures 53 million. United Health will become the nation’s second largest health insurer with 45 million insured.

But —as we all know — a deal isn’t a deal until the regulators say so. Antitrust questions will be asked about the impact on competition for personal and commercial insurance and for Medicare clients. It also drops the number of publicly traded health insurers from five to three. Aetna — as you remember — bought Humana for $37 billion a few months ago.

a second. The American Journal of Health Economics said its studies show health insurance premiums tend to be lower when more insurers are in the marketplace.

Punctuating that comment is an American Economic Association study that pointed out the 1999 merger between Aetna and Prudential saw premiums rise 7%. Leemore Dafny who co-authored the report and at one time worked for the Federal Trade Commission (FTC) said, “There’s no good evidence out there that scale is associated with lower premiums or improvements in plan quality.”

The Wall Street Journal quotes a senior Justice Department official as saying the merger has the potential of disrupting the market, limiting competition and sending premiums skyward.

California Insurance Commissioner Dave Jones is very much against the merger. He said his department is going to very carefully review the merger details.

“California’s health insurance market already suffers from consolidation, with the four largest health insurers in the individual market controlling more than 85 percent of the market.

Further consolidation will result in even less competition among health insurers and will leave consumers and employers with fewer choices and the potential for greater premium increases. Studies of prior mergers of health insurers found that health insurance prices increased as a result of mergers,” he said.

Anthem and Cigna hope to complete the deal by the middle of 2016.

Jones added, “Health insurers are enjoying record share values and profits, which are paid for by consumers and employers. There is no requirement that any savings from these mergers be passed along to consumers or employers. In California, there is no authority to reject excessive health insurance rate increases, unlike 35 other states.” n

Supporters and critics are already chiming in. Promises of savings aren’t believed for

Source links: two from Insurance Business America — link 1 and link 2

July 2015 | Main Street Industry News |www.pianeia.com| 19

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ObamaCare: The Decision a Done Deal? Not so Fast Premiums are rising. In some cases in 2016 they’re proposed to go up as much as 30%.

That, too, could hurt. That’s especially true when the premise was sold to the public as reducing health insurance costs. No doubt state insurance regulators will step in — where they can — and put the kibosh on the increases and slow them down.

The U.S. Supreme’s edict that the state subsidies are legal at the federal level seemed to put a final nail in the efforts of opponents to do away with the Affordable Care Act. Not so fast.

While the decision seems to cement ObamaCare into law, the push to repeal continues. Republicans are shooting for a little known fast-track bill passing process called reconciliation. It could move an Obamacare repeal forward with a simple majority of 51 votes.

Even if that happens — and we all know the House will go along — President Obama will veto and Republicans cannot muster enough votes to overcome one.

Another problem for the federal government and the Obama administration is 13 more states looking at bagging their exchanges and joining HealthCare.gov. It means more people for the administration that hasn’t managed health care that well to manage.

A study by Kaiser Family Foundation shows we’re looking at increases of 4% on average.

This year’s average hit 2%. So it’s a 2% increase over this year’s increase.

Kaiser’s Larry Levitt said a huge challenge for the administration is doubling the number of people signing up. Currently, 10.2 million are on the ObamaCare rolls. A good mix of healthy people is needed to offset the payouts of those that aren’t so healthy.

To get there the administration needs another 10 million. “The biggest challenge ahead is increasing enrollment. Getting more people signed up is central to the law’s primary aim.

Increasing enrollment is also key to keeping premiums under control.”

And the legal challenges are not done. A suit was filed by the House Republicans claiming the president is overreaching his authority.

He’s accused of spending money on costsharing reductions that are not appropriated.

Obama has given insurers money to reduce the deductibles of the insured to help low income people. Those funds were not appropriated. n Source link: The Hill

July 2015 | Main Street Industry News |www.pianeia.com| 21

Top Stories

ObamaCare Fines Increase

Education

Register Online for PIA NE IA education: Click here or call (402) 392-1611 Like when we all played hide and seek as kids and it was time to bag it and go home the cry would go out. Olly olly oxen free. No penalty.

Game over. Olly olly oxen free was given to non-participants of the Affordable Care Act in year one. If you didn’t obey the law and participate, no problem Year two was a much different story. Fines for not participating were handed out. In all 6.6 million were issued. That’s 10% more than the Obama administration said would happen and the fine was up to 1% of a person’s total income.

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That came to a whopping average of $190 says the National Taxpayer Advocate. It’s the inhouse ombudsman for the IRS. Of the people fined, 300,000 over paid by an average of $110.

www.piatrust.com

Term Life  STD  AD&D Business Overhead Expense Hospital Indemnity

No decision yet by the IRS as to whether checks will be issued for the overpayment or if they’ll just issue credits. n Source link: Employee Benefit News

Insurance Plans Designed with PIA Members in Mind

(800) 336-4759 Insurance Program Administered by Lockton Risk Services

July 2015 | Main Street Industry News | www.pianeia.com | 22

Top Stories

Though there is much income to be made from cyber insurance business, the insurance industry also worries about the increase in the purchasing of said insurance. With the rapid rise of cyber attacks comes a rapid rise of insurance payouts.

Attacks are scaled: Hackers use spam

campaigns that involve hundreds of IP addresses. This keeps IP-based spam products from noticing the hack.

Trusted doorways are a weakness:

Something — everyone agrees — needs to be done. But what? And how?

Hackers use malware that embeds itself in tools a user trusts. Or in something we view as benign. In other words, they hide in plain sight.

What we tend to get in reports these days is how bad things are and how bad they are likely to be in the future. Nobody — it seems — has much in the way of solutions. There is a reason for no solutions and the reason why comes from a study done by Cisco Systems.

Guerrilla warfare tactics: If one thing doesn’t work, try another, and then another.

Remove a weakness and probes are sent to find a new one.

It’s titled Cisco’s Security Capabilities Benchmark Study and the study says its hard — maybe impossible — to keep up with cyber criminals. The report’s chilling conclusion contends hackers are changing their tactics and these constant changes make it easier for them to get into an IT system and to evade detection when they get there.

And worse, those changes make it almost impossible to stop them. Here are five things the Cisco study found:

Hackers are shape shifters: Tactics are

changed as are tools and they’re changed from moment to moment. They do their damage and disappear quickly, or if discovered, rapidly change to a different method to penetrate the system.

Digital camouflage: First establish a

presence and keep it hidden. Or establish a presence that blends in with everything else the target does. Patience is the key. It can take weeks or months to get the multiple footholds necessary to penetrate an infrastructure or a database. When it’s all set up, then execute.

And just how bad is it really? Very. The study said, “security professionals say they’re optimistic that they’re well prepared to hold back online attackers. Yet adversaries continue to steal information, make money through scams, or disrupt networks for political goals. In the end, security is a numbers game: Even if an organization blocks 99.99 percent of billions of spam messages, some will make it through. There is no way to ensure 100 percent effectiveness.” n

July 2015 | Main Street Industry News |www.pianeia.com| 23

CPIA 3 – 9/22/2015 – Lincoln, NE CPIA 3 – 10/13/2015 – Des Moines, IA

Professional Insurance Agents NE IA 920 S 107th Ave, Ste 305 Omaha, NE 68114 402-392-1611 www.pianeia.com

PIA & SAMIC Joint Rural and Town Agents Seminar September 29, 2015 ~ York, NE Plan to attend this full-day seminar held jointly with the NE IA PIA and the State Association of Mutual Insurance Companies (SAMIC) providing timely topics affecting rural agencies in the insurance industry today. Sign up soon for an opportunity to learn on these important topics.

“The ‘Toys’ We Enjoy” and

“Ethics In & Out of the Agency” Morning Session: “The ‘Toys’ We Enjoy” - In this course, we will discuss the many exposures presented to farm clients with the acquisition of hobbies, collections, practices, competitions, and other means of expressing their enthusiasm to using farm equipment and livestock in ventures outside what the standard farm policy allows.

Afternoon Session: “Ethics In & Out of the Agency” - Insurance Sales and Service ethics required in today’s marketplace to avoid E & O claims, employee dissatisfaction, customer challenges and suits, even Departments of Insurance oversight hearings and verdicts.

Robert Fulwider: Bob graduated from Iowa State University with a Bachelors of Science degree in Agricultural Education.

After teaching high school vocational agriculture for three years, he returned to Iowa State where he obtained an M.S. Degree and completed course work towards a Ph.D in Higher Education-Administration. Bob joined the family insurance agency in West Liberty in 1973. During his insurance career, he has worked tirelessly on behalf of independent agents at both the state and national levels. Bob served on the Executive Committee of the Independent Agents and Brokers of Iowa (IIABI) for 13 years, as President in 1991 – 92 and as State National Director from 1998 to 2002. He has also chaired a number of committees for the Independent Insurance Agents and Brokers of America (IIABA), including Farm Agri-business, Personal Lines, Markets Development and Government Affairs. He represented IIABA on the USDA Commission to Improve the Federal Crop Insurance Program and was invited by President Clinton to represent IIABA at the National Rural Conference. He has received two Presidential Citations for his national committee work and in 2003 received the Sidney O. Smith Award, the Association’s highest individual government affairs honor. He currently serves on the IIABA Executive Committee.

8:30am 9:00 12:00 - 1:00 4:00

SCHEDULE

Registration with Rolls and Coffee Seminar Begins Lunch Conclusion

Bring another agent who has not attended the Farm Seminar within the last 3yrs and the guest registration fee will be discounted 50%!!

3hrs P/C & 3hrs Ethics Applied For

Name:

PIA Member

Agency/Company:

SAMIC Member

NPN#:

Address: Phone:

Email:

Return form with fee to: PIA of NE IA, 920 South 107 Avenue, Suite 305, Omaha, NE 68114

*Limited to the first 85 registrants*

Date: Tuesday, September 29, 2015 Registration: $80 PIA & SAMIC Members (includes lunch) $95 Non-Members (includes lunch) Location: Holthus Convention Center – 3130 Holen Ave York, NE Recommended Hotel: Hampton Inn – 309 W David Dr, York **Call 402-362-0222 for reservations Reference PIA for $115 Room Rate (Due to the limited space/ meal arrangements, we are unable to offer these courses separately.)

Register online at ~ Pianeia.com

Card or Check#: Exp. Date: Verification Code: Name on Card: PIA & SAMIC Members: $80.00 Non-Members: $95.00

[S:/Farm Seminar/2015 Farm Seminar]

PIA NE IA Events

Upcoming

Events Calendar 2014-2015 For information and to register Click Here or call (402) 392-1611.

Date

Class/Webinar

Where

When

July 6, 2015

Get in the Ring: A look at Property Claims, Fights, & Decisions

NE/IA

Webinar 12:00 PM - 3:00PM

July 9, 2015

Food Borne Illness & Insurance Coverage

NE/IA

Webinar 12:00 PM - 3:00PM

July 9, 2015

CISR: Insuring Commercial Property

Davenport

Saint Ambrose University

July 14, 2015

Personal Lines Complications: Because Simple is just too darn Easy

NE/IA

Webinar 3:00 PM - 6:00 PM

July 16, 2015

Ethics: Taking it to the Streets

NE/IA

Webinar 12:00 PM - 3:00PM

July 15 - 17, 2015

CIC: Life & Health Institute

Omaha

Hilton Garden InnOmaha

July 20, 2015

Life Insurance Concepts for the Property & Casualty Agent

NE/IA

Webinar 12:00 PM - 3:00PM

July 21, 2015

Contractors: Insuring the Property Exposures

NE/IA

Webinar 12:00 PM - 3:00PM

July 21, 2015

CPIA 2: Implement for Success

Omaha

Hilton Garden InnOmaha

July 22, 2015

CPIA 2: Implement for Success

Des Moines

Hilton Garden Inn Des Moines/Urbandale

July 23, 2015

CISR: Insuring Personal Auto Exposures

West Des Moines

LaMair - Mulock Condon Insurance (LMC)

July 28, 2015

Social Networking: OMG or E&O?

NE/IA

Webinar 12:00 PM - 3:00PM

July 29, 2015

Words Mean Things & Insurance is a Foreign NE/IA Language

Webinar 12:00 PM - 3:00PM

August 4, 2015

CPSR: Systems, Operations & Procedures

July 2015 | Main Street Industry News | www.pianeia.com | 26

Columbus Dusters

PIA NE IA Events

August 6, 2015

CISR: William T. Hold: Advanced Learning Seminar

Cedar Rapids

Kirkwood Continuing Education Training Center

August 11 - 12, 2015

Ruble: Graduate Seminar (NE)

La Vista

Embassy Suites Omaha - La Vista

August 19, 2015

CISR: Agency Operations

Des Moines

Hilton Garden Inn Des Moines/Urbandale

August 26 - 28, 2015

CIC: Life & Health Institute

Cedar Rapids

Cedar Rapids Marriott

September 2, 2015

CISR: Insuring Personal Residential Property Davenport

Saint Ambrose University LaMair - Mulock Condon Insurance (LMC)

September 17, 2015

CISR: Agency Operations

West Des Moines

September 22, 2015

CPIA 3: Sustain Success

Lincoln

Marriott Courtyard

September 23 - 25, 2015 CIC: Agency Management Institute

Lincoln

Marriott Courtyard

October 7, 2015

CISR: Insuring Commercial Property

Cedar Rapids

Kirkwood Continuing Education Training Center

October 13, 2015

CPIA 3: Sustain Success

Des Moines

Hilton Garden Inn Des Moines/Urbandale

October 14 - 16, 2015

CIC: Agency Management Institute

West Des Moines

Holiday Inn Hotel & Suites

October 15, 2015

CISR: Personal Lines Miscellaneous

Des Moines

Hilton Garden Inn Des Moines/Urbandale

October 20, 2015

CPSR: Residential Property

Pierce

Town & Country Insurance

November 5, 2015

CISR: Agency Operations

Davenport

Saint Ambrose University

November 11 - 13, 2015

CIC: Commercial Property Institute

La Vista

Embassy Suites Omaha - La Vista

November 16 - 17, 2015

Ruble: Graduate Seminar (IA)

West Des Moines

Holiday Inn Hotel & Suites

November 18, 2015

CISR: Insuring Personal Residential Property

Des Moines

Hilton Garden Inn Des Moines/Urbandale

July 2015 | Main Street Industry News |www.pianeia.com| 27

11:00am Registration 12:00pm Shotgun 4 person scramble

402-392-1611

www.pianeia.com

Thursday, September 10, 2015 Ashland, NE

Help us Insure the Future Agent by Attending!

Mulligan’s For Sale - See Other Side Name ____________________________________________________________________________________________________________ Agency/Company Name

_________________________________________________________________________________________________________

Address ________________________________________________ City ___________________________ State ____ Zip_______________ Phone ________________________________ Fax _________________________________ E-mail _________________________________ Please put me in a foursome with: 1.____________________________________2._____________________________________ 3.____________________________________ Cost:

$95 Member $100 Non Member (Includes green fees, cart, refreshments on the course, prizes and dinner)

Total enclosed $_____ Pay by: 

Check 

Visa



MasterCard

Credit Card Number _______________________________________________________Exp. _________VCode ____________ Name on card (print) ______________________________________________________________________________________

DINNER ONLY RESERVATIONS ON REVERSE SIDE OF SHEET Mail check and Reservation Form to: Professional Insurance Agents of NE IA, 920 S 107th Ave, Ste 305, Omaha, NE 68114 Questions??? - Please contact Jenn at education@pianeia.com or 402-392-1611

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PIA Trust Insurance Plans INSURANCE PLANS DESIGNED WITH LOCAL AGENTS IN MIND As a PIA Member* serving Main Street America, you and your employees have access to a variety of high-quality, competitively priced insurance plans.

With PIA Trust Insurance Plans, you have the flexibility to customize your protection to best meet your family’s insurance needs. With the exception of Basic Life**, your employees are also eligible to apply for all of the plans without your participation.

Plans available include: > > > >

Basic Term Life** Voluntary Term Life Dependent Term Life Hospital Indemnity

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Long Term Disability Short Term Disability Business Overhead Expense Accidental Death & Dismemberment

PIA SERVICES GROUP INSURANCE FUND

For more information about PIA Trust Insurance Plans, please contact your local PIA Affiliate or call the Plan Administrator at 1-800-336-4759.

Additional information is also available on-line at www.piatrust.com. **Only available if 100% employer paid and if the employer and 100% of the employees enroll. No medical underwriting necessary up to guaranteed issue limits.

Policies or provisions may vary or be unavailable in some states. Policies have exclusions or limitations which may affect any benefits payable.

Underwritten by Unimerica Insurance Company, Association Administrative Address, P.O. Box 17828, Portland, ME 04112-8828.

Insurance Program Administered by Lockton Risk Services