Main Street Industry News - March 2017

INSIDE Insurance Prices: The Good, The Bad & The Even More Bad » 7 Your Customer: Phone Calls & On Hold » 12 Agent Commissions: Change Likely Coming » 18 The American Health Care Act: Republicans Roll It Out » 22

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March 2017 | Published Monthly

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

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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 Insurance Prices: The Good, the Bad & the Even More Bad | 7 While rates continue to — in most cases — stagnate, direct written premiums (DPW) have not.

Greenberg Blames NY Attorneys General for AIG Fall | 10 The downfall of Maurice “Hank” Greenberg — founder and former CEO of AIG — started in 2005 when then New York Attorney General Eliot Spitzer accused Greenberg and his former CFO Howard Smith of cooking the books.

Can You Hear Me Now? Maybe Not | 11 A new study released by the Centers for Disease Control and Prevention (CDC) found 40 million of us have some sort of hearing loss because of exposure to noise.

Your Customer: Phone Calls & On Hold | 12 Agency owners, managers, company CEOs. True confession time. Do you use a phone answering system to answer calls? You know how that goes.

“Thank you for calling company name.

2017’s Biggest Business Fear: Cyber Attacks| 14 Businesses in the United States are not the only businesses worried about cyber attacks.

Stress in America | 15 People are more stressed now than they’ve been in a long time ... worries about home, family, finances and politics.

Agent Commissions: Change Likely Coming | 18 When the Affordable Care Act was passed and being implemented, PIA National, the representatives of the PIA NE IA and others

in insurance pleaded with the Department of Health and Human Services (HHS) to not include agent commission in the medical loss ratios.

Retiring Poor: A Huge Worry | 19 As the Baby Boomer generation starts retiring in droves one huge, glaring problem keeps emerging.

Republicans Target Too Big to Fail Designation | 19 House Financial Services Committee Chairman and Republican Rep. Jeb Hensarling and other Republicans on his committee want changes in the process by which financial institutions are designated as too-big-to-fail.

Regulatory Reform: Another Trump Executive Order | 20 President Trump is determined to unclog the nation’s regulatory process when it comes to regulations that hamper business.

The American Health Care Act: Republicans Roll It Out | 22 President Donald Trump made a somewhat profound understatement when he said, “Nobody knew that healthcare could be so complicated.

PIA NE IA Events Upcoming Events Calendar 2017 | 26

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Cathy Klasi, Executive Director (402) 392-1611

March 2017 | 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

Insurance Prices

The Good, The Bad & The Even More Bad While rates continue to — in most cases — stagnate, direct written premiums (DPW) have not. We saw a record $585 billion in DPW in 2015 — a 2.5% jump over 2014 — or $14.2 billion.

Through quarter three of 2016 — the last figures available — the aggregate increase is 3.9%. That’s good news of sorts but the increase is based on the top 25 insurers. They did even better at 12.4% or $10.8 billion over three quarters of the year. Combined, they account for 63% of the growth of the industry’s DPW. The rest of the industry saw a rise of 1.8% or $6.3 billion. Overall, however, 2016 should shatter the 2015 DPW record once all the results for the year are available.

Wells Fargo issued its 2017 Insurance Market Outlook. It doesn’t take into account DPW but does look at pricing for the year. The bank says 2017 will be another buyer’s market and we’ll see more medium to high single-digit to low double-digit rate decreases.

The good news is the reductions won’t be as high as they have been the last couple of years.

Here’s what that means: • The pace of reductions is slowing • The market is getting more stable

• The degree of positive underwriting gains is decreasing This will result in more underwriting discipline than we’ve seen in the past and because of that — the report says — some insurers will be turning down deals they perceive as unprofitable.

These are the trends the report says we’ll see in 2017: • More terrorist events will happen on U.S. soil • More high-profile data breaches and imposter fraud will occur and you’ll see an increase focus on cybercrime and reputational loss risk mitigation • More data analytics focus • Surplus capital will be used to beef up existing and emerging product lines • More underwriting discipline — as noted earlier

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

Top Stories • Larger guaranteed-cost and lowdeductible programs over $1 million will be harder to underwrite In property, competition will continue to be the watchword of the day. Carriers will battle for market share.

Here’s the market outlook: • Property — Flat to 10% decrease • CAT property — Flat to 10% decrease • Primary general liability — Flat to 10% decrease • Primary auto liability — Flat to 15% increase • Umbrella liability — Flat to 10% decrease • Excess liability — Flat to 10% decrease • Loss-sensitive Workers’ Compensation — Flat to 10% decrease • Guaranteed-cost/low-deductible Workers’ Compensation — Flat to 10% increase • International — flat to +5% • Environmental — 5% decrease to 5% increase • Aviation — Flat to 10% decrease • D&O — 5% to 10% decrease • Fiduciary liability — 5% decrease to 5% increase • Private/non-profit management liability — Flat to + or - 5% • Employment practices liability — Flat to + or - 5% • Crime — Flat to + or - 5% • Medical malpractice — 5% to 10% decrease • Kidnap, ransom, extortion — Flat to 5% decrease • Representations and warranties — 5% to 10% decrease

• Technology and Professional E&O — Flat to 5% decrease • Cyber — Flat to 5% decrease • Contract surety — 5% to 10% increase • Commercial surety — 5% to 10% increase Click here for the entire report.

A.M. Best said insurers had a mixed year in 2016.

There were more upgrades than downgrades but the ratio of negative outlooks to positive outlooks in P&C insurance has increased.

“The commercial lines segment recorded 28 upgrades compared with 20 downgrades, while in the personal lines segment, upgrades totaled 26 compared with 15 downgrades. Just over three-quarters of the US P/C industry’s ratings carried a stable outlook in 2016, a modest decline from 2015. Contributing to this decline was the continued higher amount of negative outlooks relative to positive outlooks,” the report said.

Volatility in insurance has been problematic for P&C insurers for the last 18 months and that’s mostly because of the increased severity and frequency of auto claims. That’s being blamed on distracted drivers generating claims because they’re on phones or interacting with voice response systems in vehicles.

A.M. Best has concluded there will be a negative outlook for both commercial lines and reinsurance for 2017 and a stable outlook for personal lines. For commercial lines the problem will be increased competition and pricing.

In commercial, increased competition and the pricing environment contributed to the lessthan-positive forecast and reinsurance had overcapacity with capital coming in from third parties.

Sources: Wells Fargo, PropertyCasualty360.com, MyNewMarkets.com, Insurance Business America

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

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PIA of Nebraska & Iowa (402) 392-1611 www.pianeia.com March 2017 | Main Street Industry News |www.pianeia.com| 9

Top Stories

Greenberg Blames NY Attorneys General for AIG Fall The downfall of Maurice “Hank” Greenberg — founder and former CEO of AIG — started in 2005 when then New York Attorney General Eliot Spitzer accused Greenberg and his former CFO Howard Smith of cooking the books.

Greenberg admitted a couple of weeks ago that he approved two fraudulent insurance deals to make AIG’s financial status look better.

A decade and change later Greenberg and Smith agreed to give back $9 million.

After making the admission, Greenberg fired back. “AIG is a shadow of what it was, people lost millions of dollars, billions of dollars.

Pension funds, the same thing. For what? So I can pay $9 million?” he said.

At the time of the indictment, and AIG’s agreement to pay back $1.6 billion to the U.S. Securities and Exchange Commission (SEC) and others, AIG was the largest and most successful insurance company in the world.

Then came the subprime mortgage crisis of 2008 and AIG’s near collapse. The federal government stepped in and bailed out AIG to the tune of $182.3 billion. That money has all been paid back. But it’s too late in Greenberg’s mind. He says it all started with Spitzer’s enforcing the Martin Act. That law gives prosecutors a wide brush to combat white collar crime.

“To have a law like that in the hands of people not responsible is disgraceful,” Greenberg said.

All that aside, Greenberg and Smith did not admit to fraud or any wrongdoing. All they did

is agree to pay the fine and called the two deals “honest mistakes.” Those mistakes cost him about $200 million in legal fees.

St. John’s University law professor Anthony Sabino more or less agrees with Greenberg.

He calls New York’s aggressive attack on Greenberg, Smith and AIG an overzealous work of an attorney general trying to score political points.

“Why did the state of New York spend over a decade pursuing Greenberg when the injuries had already been fully addressed? Surely the New York attorney general had better things to do. Again, the states have a right to enforce the law in their own domains. But when the problem is solved or nearly so, why fight for years, especially here when the final ‘gain,’ if you can call it that, is trifling,’” Sabino said.

Shortly after the accusations by Spitzer flew, Greenberg was forced out by the AIG board.

Not long after that, the firm’s decline began.

Adding in his two-cents is Smith who agreed with Sabino, “From the beginning this was not about the facts. It was about getting press releases for political gain.”

So is Greenberg correct? Did all this ruin AIG? The firm does seem to be in an up and down cycle. The latest is down. Fourth quarter losses for AIG hit $3.04 billion. And that’s a much higher figure than most expected. When the losses were announced share values fell 9%.

Sources: Carrier Management, Insurance Journal, Insurance Business America

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

Top Stories

Can You Hear Me Now? Maybe Not

and public transportation wearing them — loud music through headphones and earbuds.

Anne Schuchat is the CDC Acting Director She said, “Noise is damaging hearing before anyone notices or diagnoses it. Because of that, the start of hearing loss is under recognized.”

A new study released by the Centers for Disease Control and Prevention (CDC) found 40 million of us have some sort of hearing loss because of exposure to noise. This is sometimes of the everyday variety from things like leaf blowers or lawn mowers and sirens to more extreme noise from rock music, rock concerts and other sounds.

Back to the earbuds and headphones.

Schuchat said 19% of people between the age of 20 and 29 have some form of hearing loss.

She calls it alarming.

That 40 million figure accounts for 25% of people age 20 to 69.

Next up for the CDC is studying is the effects of those earbuds and headphones and other personal listening devices. In the meantime, Schuchat says protect your ears. Use earplugs or headphones at noisy events for protection.

The CDC report is found in the weekly publication the Morbidity and Mortality Weekly Report. It says hearing loss is the third most common chronic health condition in the country and it is twice as common as diabetes or cancer.

And what’s oddest about the report is most of the 25% believe they have good to excellent hearing.

Another odd fact. A whopping 53% say they have no regular exposure to loud noise at work. That leaves other environmental factors as the cause like — and you see people on the street, in cars

Hearing loss comes from a combination of volume and length of exposure: • One minute of hearing a 120-decibel siren will damage hearing • Two-hours of exposure to a 90-decibel leaf blower will damage hearing • 14 minutes at a 100-decibel sporting event will damage hearing • Two-minutes at a 110-decibel rock concert will damage hearing • And if you think it’s too loud at the gym, you are right

What’s also interesting is the federal government has no regulations for noise outside of the workplace. It can’t regulate how loud your earbuds are or — as another example — how loud your auto can get.

One solution — she suggests — is primary care doctors routinely asking patients about hearing loss. Caught early it can be prevented.

Source: The Washington Post

March 2017 | Main Street Industry News |www.pianeia.com| 11

Top Stories

Your Customer Phone Calls and On Hold

Agency owners, managers, company CEOs. True confession time. Do you use a phone answering system to answer calls? You know how that goes. “Thank you for calling company name. Listen carefully as our menu has changed. Press 1 for this or that” and off you go.

It’s likely a huge percentage of you will answer yes and that you do use a phone answering system or auto attendant of some kind.

But is it a good idea to use one? And is it a good idea to use one in an industry that relies so much on customers and that wants customers to trust them with their most personal items and needs?

Once that’s answered then the next question is a no brainer. Is it a good idea to rely heavily on voicemail? Here’s some statistics we dug up from a publication called The Modern Firm: • An American Express survey in 2011 found 67% of your customers hang up when they can’t talk to a real person.

• Harris Interactive said 75% of those having to push buttons or who are on hold think they’re pushing too many buttons or are on hold too long before talking to a real person.

• Consumer Reports said 72% hang up as soon as the automated attendant starts its spiel.

• Forbes says your customers form an impression of your business in the first 7 seconds of contact. That’s at about, “Please pay attention as our menu has changed.”

The Modern Firm said its research on its own callers found 50% hang up if they don’t get a live person immediately. The publication also notes that those people hanging up or getting impatient while on hold probably call your competitor or competitors next.

“If your office has an automated system handling your calls, you absolutely need to find and analyze your call logs and statistics. There is a good chance that a significant number of callers are hanging up without you ever knowing they called. That’s the big danger of automated call handling, incoming calls are happening and callers are being forced to make choices before your phone makes a peep.

Without reports you are flying blind and there is no data to challenge your assumptions about how things are going,” the publication said.

Then there’s voicemail. People hate voicemail.

And they hate it even more when they’re in a hurry for an answer and the person they need to reach can only be reached via voicemail. Even more irritating is that promise that they’ll return your call within one or two business days.

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

Top Stories “With a live receptionist you can all but eliminate voicemail by having the receptionist take a personal message when you’re not available and deliver it by email or text. You can even have the receptionist follow a script and ask situation specific questions to get more information about the prospective client.

The simple act of asking a few questions starts to build the relationship with the prospective client and helps you prepare for the return call. You can even set rules so that if questions are answered a certain way, perhaps indicating the caller needs urgent assistance, the receptionist will know to be more aggressive in trying to reach you by calling your cell and home or sending a text instead of just trying your office line or taking a message,” The Modern Firm writes.

valued, which will only serve to compound any annoyance felt as a result of being made to wait on hold. It’s essential to give careful consideration to what people hear whenever they make contact with your company,” Williamson said.

And then there’s what people hear if they stick with you while on hold.

Sources: The Modern Firm, Insurance Business America

A new study from the marketing firm PHMG says the music being played on hold could be driving your customers away. It found that 73% of customers will not come back and do business with a company when their first experience is a bad one.

One of the culprits? Generic music.

Audio is PHMG’s specialty. Firm spokesman Mark Williamson said it audited 360 insurance companies and found 42% force those on hold to listen to generic music.

PHMG suggests spending time on what your customers hear when they’re on hold. All sounds or music or audio talking about what you do is critical. “Hearing is one of our most powerful emotional senses so the sounds customers hear when they call a business will create a long-lasting impression. Every element of a music track, whether tempo, pitch or instrumentation, will stir different emotions so traders should ensure they convey the appropriate brand image.”

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“Call handling remains a critically undervalued element of customer service and marketing…

Therefore, it is important companies do their utmost to improve the experience,” he said.

A lot of companies — PHMG found — leave their customers in total silence or subject them to irritating beeps or ongoing ringing.

“Generic music, beeps, ringing or silence convey a message that the customer is not

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March 2017 | Main Street Industry News |www.pianeia.com| 13

Top Stories

2017’s Biggest Business Fear

Cyber Attacks Businesses in the United States are not the only businesses worried about cyber attacks.

Growing numbers of attacks worldwide combined with growing populism and political instability around the world have business people in 79 countries chewing their nails.

The Business Continuity Institute (BCI) and British Standards Institution said:

• 88% say they are extremely concerned or just concerned about hackers • A big concern about political upheaval is in the top 10 for the first time ever • Experts blame the election of Donald Trump for that BCI Executive Director David Thorp said, “Cyber-attacks and data breaches continue to cost organizations billions of dollars annually, a sum that is only likely to go up with the increasing integration of new pieces of technology into daily operations. Politics too has been a dominant topic this year, certainly more than in the recent past.”

Number-two is threat of a data breach. An unplanned telecom outage is third. New laws and regulations also made their first push into the top-10.

Source: PropertyCasualty360.com

Top Stories

Stress in America

People are more stressed now than they’ve been in a long time ... worries about home, family, finances and politics. It’s the highest rise in stress levels in the decade that the American Psychological Association (APA) has been doing the survey.

• In January 57% — of people of all political leanings — said the U.S. political climate was very or somewhat a significant source of stress.

• In August that same question got a 52% response.

This week the APA released more information as to the causes of the stress. It starts with questions:

• Do you check Twitter when waiting for the light to change?

• Do you read emails while brushing your teeth?

In other words, are you a constant checker, a person that absolutely must be connected to social media, or email, or your phone 24/7?

If you are the APA says you’re hurting your mental health.

The study is titled Stress In America: Coping With Change and it looks at the role that technology and social media play in contributing to stress. To start with the APA took a look at the increase and the use of social media: • Social media rose from 7% of all adults in 2005 to 65% in 2015 • The jump for people 18 to 29 is even steeper and goes from 12% in 2005 to 90% today

March 2017 | Main Street Industry News |www.pianeia.com| 15

Top Stories The concern is the people the APA asked questions to at the beginning of this article: • 43% of Americans admit to checking their emails, texts and social media accounts constantly Here’s the negative in all that checking.

The APA said on a 10-point scale, constant checkers say their stress levels at 5.3. For the rest of us that figure is 4.4.

Here’s where that significance comes into play: • The highest stress levels are those constantly checking their work email on days off — it’s a 6.0 • The APA says a pleasant Saturday afternoon — even though you may think so — is not working from home

• 42% of the constant checkers say political and cultural discussions cause them stress • 65% admit they ought to unplug and detox from social media • Just 28% will do it The APA offers some advice via Anthony Rostain who is a professor of psychiatry at the Hospital of the University of Pennsylvania: • Social media time needs time guidelines • Finish all tasks you need to get done before checking social media • Get the sleep you need And last — evaluate your progress every day and, Rostain said, “Don’t [lie] in bed at all hours with the screen in your face.”

Source: Bloomberg

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Top Stories

Agent Commissions Change Likely Coming When the Affordable Care Act was passed and being implemented, PIA National, the representatives of the PIA NE IA and others in insurance pleaded with the Department of Health and Human Services (HHS) to not include agent commission in the medical loss ratios.

Those pleas fell on very deaf ears and agent commissions plunged for those writing health insurance. Many left that line of insurance altogether.

Now with the fate of the ACA — or ObamaCare as it is sometimes fondly known — is up in the air, Georgia Insurance Commissioner Ralph Hudgens is pushing newly appointed HHS Secretary Tom Price to delete agent commission from the medical loss ratios if those ratios are kept in the replacement of ObamaCare. He has allied himself with suffering agents and sent a letter to Price — who is also from Georgia — and said, the rule “has dramatically reduced the commissions insurance agents receive from the sale of health insurance products.”

In case you don’t remember or don’t know, the MLR rule states that 80% to 85% of all premium dollars must be spent on health care.

If there is an excess, it must be returned to insureds.

“Neither the current law nor any reform effort will be successful unless a large number of healthy Georgians decide to sign up for coverage. However, the previous administration had a fundamental distrust of the role agents play in the orderly delivery of health insurance,” his letter said.

Source: Insurance Business America

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

Top Stories

Retiring Poor A Huge Worry

Republicans Target Too Big to Fail Designation

As the Baby Boomer generation starts retiring in droves one huge, glaring problem keeps emerging. Many just aren’t ready to retire when their bodies and mental facilities say it is time.

With retirement on the mind — and while it may be no help for Baby Boomers — it’s no wonder that larger percentages of people are approving of the idea of the federal government allowing states to run their own retirement savings programs for those without access to one at work.

The National Institute on Retirement Security finds 85% of lawmakers in Congress don’t have a clue — not surprisingly — about the difficulty faced in building that retirement nest egg. In it assessment the institute said, “Americans are united in their anxiety about their economic security in retirement and in their dissatisfaction with national policy makers’ inaction to address the nation’s retirement crisis.”

The study also notes state run retirement plans are an effective way to help Millennials save for their retirement. This is especially true since younger people tend to change jobs quite often and the job philosophy of Millennials is so much different than their Baby Boomer parents and grandparents.

It also is helpful to small employers who cannot afford to be much help to their employees.

By the way, Millennials — so the study says — are more in tune to the importance of retirement planning. A large percentage are already planning with the highest percentage putting dollars into 401(k) plans.

Source: Employee Benefit News

House Financial Services Committee Chairman and Republican Rep. Jeb Hensarling and other Republicans on his committee want changes in the process by which financial institutions are designated as too-big-to-fail. A report done for the committee last week said the system used to determine which businesses are systemically important financial institutions (SIFI) is “arbitrary and inconsistent.”

The complaint — and one the PIA has made consistently from the onset of the Dodd-Frank Act to now — is that insurance companies and other financial institutions are being confused with and then lumped in with banks.

They are totally separate entities and operate much differently financially.

As part of the process, Hensarling’s committee will meet with new Treasury Secretary Steven Mnuchin who now heads the Financial Stability Oversight Committee (FSOC) which is charged with making the SIFI designations. One of the topics of discussion will be the report that says the SIFI process is opaque and confusing.

MetLife challenged its SIFI designation and the judge in the case found the FSOC to be — as the report notes — inconsistent and not in tune with the real world. The company had its designation overturned. Other companies are waiting to see what a Trump administration will do.

Source: Insurance Journal

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

Top Stories

Regulatory Reform Another Trump Executive Order

President Trump is determined to unclog the nation’s regulatory process when it comes to regulations that hamper business. An executive order was signed last week that goes along with his two regulations must go for every new one established.

His order forms a regulatory reform task force within every federal agency. The goal? Cut the red tape.

Robert Verchick heads the very liberal think tank the Center for Progressive Reform. He said the president’s order is “clearly aimed at embedding his overtly political, anti-protections agenda at federal agencies that are supposed to be using science and expertise to safeguard us all.”

Trump joins several other presidents including Ronald Reagan, Bill Clinton and George W. Bush in trying to control the growth of regulation. They did not succeed. But it appears Trump is more trying to do away with regulations President Obama instituted in his four years in office.

He says the executive orders signed by Obama and laws passed by Congress added 3,000 regulations to the federal register and cost business and consumers hundreds of billions of dollars. The Obama administration — in enacting the regs — said the benefits to the public outweigh the cost.

“Excessive regulation is killing jobs, driving companies out of our country like never before. Every regulation should have to pass a simple test; does it make life better or safer for American workers or consumers?” the president said as he signed the order.

Stating the nation does not need 75% of the regulations in place, Trump said each agency will be required to “measure and report progress in achieving the president’s directives.

Each task force will make recommendations on which regulations to repeal or simplify.”

He calls them “repetitive, horrible regulations that hurt companies, hurt jobs.”

As expected Democrats are balking at the call for regulatory reform. They are especially concerned when the push seems to be coming from the president’s chief strategist Steve Bannon who is calling the deregulation push “the deconstruction of the administrative state.”

Trump’s two for one executive order also capped the annual cost of new regulations. But it doesn’t apply to most of the financial reform rules done by Obama and the Dodd-Frank Act. However, the freeze the president ordered on regulations pending review has stopped some of them from taking effect.

Source: Business Insurance

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

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Top Stories

The American Health Care Act Republicans Roll It Out President Donald Trump made a somewhat profound understatement when he said, “Nobody knew that healthcare could be so complicated. I have to tell you, it’s an unbelievably complex subject.”

He and other Republicans have referred to the Affordable Care Act as a disaster. That disaster now has a shot at being replaced as the Republicans in the House finally released their Affordable Care Act replacement — The American Health Care Act 0r AHCA.

— except for the controversial Cadillac Tax — and the expansion of Medicaid by capping federal payments.

The AHCA will replace all that with some subsidies to help Americans purchase health insurance. But how that is laid out is fairly controversial.

If it is replaced and this plan succeeds it will be the first time in history that Congress has done away with a social benefit program.

Two committees — the House Energy and Commerce Committee and the House Ways and Means Committee — will be marking the bills up by the time you read this. Both committees are expected to pass the bills onto the full House relatively intact. A full House vote should happen in the next couple of weeks.

The bill has two parts and will dismantle most of ObamaCare the mandate that requires all of us to have insurance, subsidies that help people purchase insurance, ObamaCare taxes

House Ways and Means Committee Chairman Rep. Kevin Brady of Texas thinks the legislation will pass with the support of almost all Republicans in the House. This prediction

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

Top Stories despite the controversy that arose over a leak of the program and the difficulty some Republicans and most Democrats had finding a copy of the bills.

In fact, last week Sen. Rand Paul dragged a copy machine to the House side of the capitol building demanding to get a copy. At the release of the plan on Monday evening, Paul who opposes the income-based tax credits of the plan tweeted: “Still have not seen an official version of the House Obamacare replacement bill, but from media reports this sure looks like Obamacare Lite!”

Four other key Republican senators oppose the plan. They are Ohio Sen. Rob Portman, West Virginia Sen. Shelley Moore Capito, Sen. Cory Gardner of Colorado and Alaska’s Sen. Lisa Murkowski. They’re from states that opted to expand Medicaid when the ACA became law and said they will oppose any plan that leaves millions of Americans uninsured.

In a letter sent to Senate Majority Leader Mitch McConnell, the group said, “We will not support a plan that does not include stability for Medicaid expansion populations or flexibility for states.”

Brady disagrees that this won’t float in the Senate and is completely positive it will pass the House. “We’ve been listening very carefully to our Republican members for months now to make sure we get it right. I am confident we are going to pass this,” Brady said.

House Speaker Paul Ryan agrees with Brady.

Contending that ObamaCare is — like the president says — rapidly collapsing, Ryan said this will give all Americans access to quality and affordable health care. “Working together, this unified Republican government will deliver relief and peace of mind to the millions of Americans suffering under ObamaCare. This will proceed through a transparent process of regular order in full view of the public,” he said.

One small problem is the Congressional Budget Office (CBO) hasn’t finished its analysis of the bill so the impacts and costs won’t be available before the bills are passed out of committee.

Critics say previous bills similar to these did not pass CBO muster.

Here’s how the plan does the tax credits: • $2,000 per year for those under 30

• Up to $4,000 per year for those over 60 • The full credit is available to those earning up to $75,000 a year • The full credit is available to married couples earning up to $150,000 a year • It keeps the wealthiest among us off of the program

What else does it do?

• Gone is the individual mandate • Preexisting conditions stays • Kids on parents’ plan until 26 stays • Medicaid expansion to help the poor stays in place until 2020 then it’s gone • The proposal promotes continuous coverage by requiring a 30% higher premium on those letting their policies lapse

Medicaid expansion — as noted — goes away in 2020. But in the meantime, it’s been overhauled in this plan. To appease a significant number of Republican governors and others in their states worried about the loss of millions of dollars to help lower-income people purchase insurance, the plan converts the program from an entitlement to per capita funding.

In other words, if a person in one of the 31 states that opted into ObamaCare is getting subsidies, they will continue to get them but how much Medicaid money a state gets will depend on the number of people covered.

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

Top Stories But in 2020 everything changes. Those who are still on the program will continue to be on it and 90% of the cost will be covered. And as long as those people remain eligible the state will get that income to help them. Once they drop off, that’s it.

And no new people will be added after that time.

The19 states that did not opt into ObamaCare will split $10 billion over five years. And the states can use that money anyway they want to subsidize insurance or to subsidize hospitals and other health care providers.

On other items, Republicans say the incomebased phase-out of the credit funds the plan without taxes on employer-based and provided insurance. That was considered as an option in earlier talks.

Critics — like the Kaiser Family Foundation — point out the plan gives the poorest among us and older people less financial assistance than younger people with higher incomes.

Democrats also warn phasing out the Medicaid expansion and the smaller tax credits will mean the 20 million people who gained coverage in recent years will lose it.

Republicans say — yes — the plan will cover fewer people. But they’re not going to force people to buy insurance and say the system is a lot less intrusive into people’s lives.

Assuming it passes the House, things will not go so smoothly in the Senate. Other than Paul and the four senators mentioned earlier, some very conservative Republican critics aren’t so crazy about it either. They call the tax credits the new entitlement and say they have enough votes to kill what some have now dubbed ObamaCare 2.0.

As noted in the bullet points, those with preexisting conditions will also be protected under this plan and cannot be denied coverage by insurers. While not requiring people to sign up for insurance, the plan does encourage healthy people to participate by charging 30% higher premiums if there is a gap in coverage.

All taxes but the Cadillac Tax are gone but it doesn’t go into effect until 2025. So all it does is keep the new law — if it is passed — affordable to the federal government and add to the deficit. Neither Republicans or Democrats particularly like the tax and look for it to go away sometime before 2025.

White House press secretary Sean Spicer said the president likes the plan and said, “President Trump looks forward to working with both chambers of Congress to repeal and replace ObamaCare.”

Democrats like Reps. Richard Neal of Massachusetts and Frank Pallone of New Jersey — the top Democrats on the two committees marking up the bill — predictably criticized the bills. They said they were drafted in secret and introduced less than two days before the bills are to be marked up. As a whole — their statement said — it “would rip healthcare away from millions of Americans.”

And Senate Minority Leader Charles Schumer has already named the plan after Donald Trump and he hates the plan. “Trumpcare doesn’t replace the Affordable Care Act, it forces millions of Americans to pay more for less care,” Schumer said.

Sources: The Hill, Insurance Business America, The Washington Post

Call today to learn how DCIS tools can help your customers manage risk and enhance profitability.

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

Nick Oswald

Brian Jacobsen

(712) 249-4803

(402) 619-8884

Iowa

Nebraska

Expect More.

Diversified Crop Insurance Services is a company of CGB Enterprises, Inc. and is an EOP.

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

March 1, 2017

Additional Insureds: The Quandry

NE/IA

Webinar: 12:00PM - 3:00PM

March 7, 2017

Man Vs. Machine

NE/IA

Webinar: 8:00AM - 11:00AM

March 9, 2017

Regarding Ethics

NE/IA

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 14, 2017

CPIA 1: Position for Success

Omaha

Hilton Garden Inn- Omaha

March 15-17, 2017

CIC: Commercial Property Institute

Omaha

Hilton Double Tree Omaha SouthWest

March 22, 2017

Top 12 Coverage Countdown

NE/IA

Webinar: 12:00PM - 3:00PM

March 22, 2017

CISR: Elements of Risk Management

Des Moines

Hilton Garden Inn Des Moines/Urbandale

March 24, 2017

**LAST TIME**Words Mean Things & Insurance is a Foreign Language

Nebraska

Webinar: 8:00AM - 11:00AM

March 28, 2017

Commercial Property Claims that Cause Problems

NE/IA

Webinar: 12:00PM - 3:00PM

March 29, 2017

Commercial Liability Endorsements To Watch Out For

NE/IA

Webinar: 12:00PM - 3:00PM

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

Street Level Ethics

NE/IA

Webinar: 12:00PM - 3:00PM

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 20, 2017

E&O Loss Prevention

NE/IA

Webinar: 12:00PM - 3:00PM

April 25-26, 2017

Ruble: Graduate Seminar

Omaha

Embassy Suites Omaha La Vista

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

PIA NE IA Events

April 27, 2017

Cyber Liability - the 21st Century Peril

NE/IA

Webinar: 12:00PM - 3:00PM

April 27, 2017

Tricks to Fix: Closing Coverage Gaps in Home, Work and Auto

NE/IA

Webinar: 8:00AM - 11:00AM

April 28, 2017

Construction Defects: Property Damage and the ISO CGL

NE/IA

Webinar: 8:00AM - 11:00AM

May 3, 2017

CPSR: Personal Auto

Columbus

Holiday Inn Express Columbus

May 4, 2017

And the CHAOS Continues

NE/IA

Webinar: 12:00PM - 3:00PM

May 9, 2017

Leases & Contracts Vs. The Insurance Policy

NE/IA

Webinar: 8:00AM - 11:00AM

May 10, 2017

Certificates and Additional Insureds: Navigating the Maze

NE/IA

Webinar: 12:00PM - 3:00PM

May 11, 2017

CISR: Insuring Personal Residential Property

Des Moines

Hilton Garden Inn Des Moines/Urbandale

May 15, 2017

Regarding Ethics

NE/IA

Webinar: 12:00PM - 3:00PM

May 17-19, 2017

CIC: Agency Management Institute

Lincoln

Marriott Courtyard/ Haymarket

May 19, 2017

FLOOD INSURANCE

NE/IA

Webinar: 8:00AM - 11:00AM

May 23, 2017

Commercial Property Claims that Cause Problems

NE/IA

Webinar: 12:00PM - 3:00PM

May 24, 2017

CISR: Personal Lines Miscellaneous

Hiawatha

Kirkwood Linn Regional Center

May 25, 2017

How to be the Agent Advocate at Claim Time

NE/IA

Webinar: 12:00PM - 3:00PM

June 6-7, 2017

PIA Annual Convention

Nebraska City, NE

Lied Lodge, Nebraska City

June 8, 2017

Current Trends & Changes: The Homeowner & Auto Marketplace

NE/IA

Webinar: 12:00PM - 3:00PM

June 13, 2017

CISR: Insuring Commercial Property

Davenport

Saint Ambrose University

June 14, 2017

Executive & Management Liability

NE/IA

Webinar: 12:00PM - 3:00PM

June 14, 2017

E&O Loss Prevention

NE/IA

Webinar: 8:00AM - 11:00AM

June 14-16, 2017

CIC: Commercial Multi Line Institute

West Des Moines

Holiday Inn Hotel & Suites

June 15, 2017

Additional Insureds: The Quandry

NE/IA

Webinar: 12:00PM - 3:00PM

June 21, 2017

Top 12 Coverage Countdown

NE/IA

Webinar: 12:00PM - 3:00PM

June 22, 2017

Commercial Liability Endorsements To Watch Out For

NE/IA

Webinar: 12:00PM - 3:00PM

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

PIA NE IA Events

June 22, 2017

CISR: Commercial Casualty 1

Des Moines

Hilton Garden Inn Des Moines/Urbandale

June 27, 2017

Man Vs. Machine

NE/IA

Webinar: 1:00PM - 4:00PM

June 28, 2017

Street Level Ethics (NE)

Nebraska

Webinar: 12:00PM - 3:00PM

June 28, 2017

Street Level Ethics

NE/IA

Webinar: 12:00PM - 3:00PM

June 28, 2017

Tricks to Fix: Closing Coverage Gaps in Home, Work and Auto

NE/IA

Webinar: 8:00AM - 11:00AM

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

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

March 2017 | Main Street Industry News | www.pianeia.com | 28

PIA NE IA Events 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

March 2017 | Main Street Industry News |www.pianeia.com| 29

Help Keep Your Agency Active If You Should Become Disabled...

Cover Overhead Expenses With The PIA Trust

Business Overhead Expense Insurance Plan BOE COVERAGE DESIGNED WITH LOCAL AGENTS IN MIND As a PIA Member* serving Main Street America, you have access to a highquality, competitively priced BOE plan through the PIA Services Group Insurance Fund.

Office expenses don’t stop because you become disabled. Bills keep coming in whether or not you’re in the office. Those overhead expenses could become a real problem if your agency’s revenues are dependent on you. With the PIA Trust Business Overhead Expense plan, you can help maintain your agency until you are able to resume your duties.

For more information about the PIA Trust Business Overhead Expense 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

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, Maine 04112-8828, under Policy Form ADI-4001-A (UIC).

Insurance Program Administered by Lockton Affinity, LLC.