Maryland Primary Agent - December 2015

DECEMBER DECEMBER 20152015 | PENNSYLVANIA | MARYLAND

YEAR IN REVIEW REFLECTIONS AND NEXT STEPS

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IN THIS

ON THE COVER 12

REFLECTIONS ON 2015 Peruse our accomplishments from the past year— and how you can benefit from them.

ALSO 14

EMPOWERING SMALL AGENCIES FOR BIG SUCCESSES View a recap of our 2015 Executive Management Conference, held in late October outside of Allentown, Pa.

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UPDATE YOUR GOOGLE MY BUSINESS ACCOUNT Google is now requiring that Google My Business users periodically verify their accounts. It’s a worthwhile step, as it increases the likelihood that your agency will show up in a Google Search results page.

IN EVERY ISSUE 2

Chairman of the Board’s Message

3

Ask Our Experts

4

Preventing Errors & Omissions

6

Coverage Corner

8

State News

11

IA&B Partners

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Advertiser’s Index

IBC My Events IBC Classified Ads Periodical postage paid at Mechanicsburg, Pa. and at additional mailing offices. Postmaster: Send address changes to Insurance Agents & Brokers, 5050 Ritter Road, Mechanicsburg, PA 17055.

Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2015-12, is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

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Copyright 2015. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and not intended to serve as legal, accounting, financial, insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult with competent legal, financial, insurance, investment advisory and/or other professional advisors concerning specific matters before making any decisions. We disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in Primary Agent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of IA&B. Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&B endorsement of the products and/or services.

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CHAIRMAN OF THE BOARD’S MESSAGE

RESOLVE TO TAKE ADVANTAGE OF YOUR MEMBERSHIP

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INSURANCE AGENTS & BROKERS 5050 Ritter Road | Mechanicsburg, PA 17055 800-998-9644 | IABforME.com

OFFICERS Chair of the Board

Robert S. Klinger, LUTCF, CPIA

elcome to December – a month crammed with commitments, deadlines and activity. Yet as we plow through the remaining days of 2015, it’s critical that we all take a few moments to reflect on where we’ve been and where we’re headed in the year ahead.

On the IA&B Boards of Directors, we do much of the same: evaluating what the organization has accomplished and steering it forward. And when we have these conversations and make these decisions, we always conduct them with a nod to member agent feedback.

As you contemplate your agency’s next steps, I encourage you to look to your agents’ association. Chances are that IA&B is on the same page (thanks to that agent feedback I mentioned) and can help you meet your goals. For instance, IA&B will focus on agency perpetuation and staff development in the year ahead, launching an online jobs board, establishing its Futures Program for young agents, recreating its popular CSR conference, and expanding upon its career track offerings.

Now for the same line, different day: It’s up to you to take advantage of your membership.

Resolve to utilize your agents’ association and its resources in the year ahead.

There’s so much for the taking. Just look to IABforME.com, Agent Headlines, the Professional Training Schedule and even Primary Agent magazine to learn about what IA&B has to offer. Don’t reinvent the wheel or squander your dues payment when there’s so much for the taking!

Have a wonderful holiday season, and I’ll see you in 2016. n

Vice Chair of the Board

Michael F. McGroarty Sr. Immediate Past Chair of the Board

Diana M. Hornung Hanby, ACSR

MEMBERS E. Stephen Burnett, CIC, ARM Wilmington, Del.

Richard F. Corroon, CPCU Wilmington, Del.

N. Lee Dotson, CIC, AAI Wilmington, Del.

Michael P. Ertel+ Columbia, Md.

Bryan C. Hanes, JD Hagerstown, Md.

John B. Hollister Milford, Pa.

Jocelyn R. Howard-Sinopoli, CIC, CISR Butler, Pa.

David C. King Lancaster, Pa.

Douglas A. Loesel, CPCU Erie, Pa.

Crag S. Mader

Gambrills, Md.

Ann Gallen Moll, CIC Reading, Pa.

Mark J. Monroe

West Chester, Pa.

Joseph R. Pastor, CPCU, AAI Oil City, Pa.

Richard M. Rankin, CIC Lancaster, Pa.

April E. Ressler, CIC Altoona, Pa.

Scott C. Rogers, CPIA* York, Pa.

Best,

Glenn R. Strachan

Ft. Washington, Md.

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM** New Castle, Del.

Robert S. Klinger, LUTCF, CPIA Chairman of the Board

J. Marshall Wolff, CIC, CPCU Easton, Pa.

* Pa. IIABA National Director ** Del. IIABA National Director + Md. PIA National Director

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DECEMBER 2015

Ask Our Experts This month’s answer was provided by Don Bankus, our legal affairs manager.

Question: I need a copy of my producer license(s) ASAP. Where can I go to access and print a copy?

Answer:

F

ortunately, whether you need a copy of your resident license, or any (or all) of your non-resident licenses, there’s a “one-stop shop” available.

WHERE DO I GO, AND HOW DO I PROCEED? The simplest avenue to access and print your license(s) is to go to the National Insurance Producer Registry website, which is commonly referred to as NIPR. To access and print your Pennsylvania license: • Go to www.nipr.com.

• Under the “How to” subheading, click on “Print your License….”

• On the Producer Licensing Map, click on Pennsylvania.

• You will be redirected to a Pennsylvania Insurance Department (PID) webpage, where you should follow the very simple instructions.

You will need to have your Pennsylvania producer license number available in order to access and print your license. There is no charge associated with this service.

To access and print your Delaware or Maryland license:

Have a question?

Ask our experts!

• Go to www.nipr.com.

Rely on our experts to answer your most perplexing questions.

Visit the Ask Our Experts section of IABforME.com (find the link in the website footer) to submit your question and review answers to other frequently asked questions. Or email your question to us at IAB@IABforME.com.

We look forward to hearing from you.

• Under the “How to” subheading, click on “Print your license….”

• On the Producer Licensing Map, click on either Delaware or Maryland, from which you will be redirected to the State Based Systems website.

• Enter the applicable information under the subheading “License Search.”

You will need to have either your National Producer Number or your Delaware or Maryland producer license number available in order to access and print your license.

For Delaware and Maryland, you can access and print a free copy of your license in conjunction with any of the following: (1) original license approval; (2) renewal approval; (3) name and/or address change; and (4) adding and/or deleting a line of authority. If you haven’t experienced any of these circumstances which make you eligible to print a free copy, you will need to register for either Delaware or Maryland’s Online Licensee Services, and pay a fee from $2.95 to $5.95.

If you wish to access and print a copy of a producer license for states other than Delaware, Maryland or Pennsylvania, simply choose the applicable state on the NIPR Producer Licensing Map referenced above, after which you will be directed accordingly.

AFTER ACCESSING MY LICENSES(S), WILL I BE ABLE TO SAVE A COPY TO MY COMPUTER? Yes, you will, and it’s recommended that you do so. (It could save you some time in the future, and perhaps a couple of dollars as well). n

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PREVENTING ERRORS & OMISSIONS

LIGHTING THE WAY: BRIGHT IDEAS FOR E&O PREVENTION IN 2016

By Utica National E&O Program

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s we close out another year, it’s a good time to reflect on what you need to do to be more successful and to reduce the likelihood of an E&O claim being presented against your agency in the coming year.

Here is one area that, if discussed openly and implemented effectively, could make a noticeable difference.

At the next staff meeting, dedicate some time to discuss E&O. Specifically discuss with each of the staff what he thinks his E&O exposure is in the agency. For

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some of the staff, this is going to be very easy. There is no doubt that CSRs and producers generally know and understand their role and the exposure associated with it. How about receptionists and claims staff? They may not totally understand that what they do (or in some cases, don’t do) can result in an E&O claim against the agency.

For example: • A direct bill client comes into the agency and proceeds to give the receptionist money for her auto

DECEMBER 2015

coverage. Seems fairly harmless.

But what if the policy was cancelled yesterday? By the receptionist taking the premium, the client could argue that she assumed that everything was taken care of and that coverage was in effect.

• Or an agency claims person not sending a claim in to the carrier, assuming it wasn’t covered, only to find out that it would have been covered.

• Or what happens when you send in a claim late … potentially a disclaimer for late notice? This is not as farfetched as it may sound because, unfortunately, it is occurring more and more.

For each of the staff, it would be beneficial to ask him to identify a list of activities (at least five) that he could do in the year ahead that has the likelihood of reducing his E&O claims potential and, at the same time, improve his work product/efficiency.

Here are some examples to consider: Receptionist – Based on the example provided, it may be prudent to request that the CSR that handles that specific account meet with the client before any monies are exchanged. Another possible improvement could be that when a client calls to request a change in her coverage, the receptionist makes it very clear that the client needs to speak with the producer or CSR for that change to be effective.

CSR / Account Executives – The areas here are numerous as the activity and workloads are heavy. Maybe a commitment to improve account rounding to ensure that clients are aware of gaps and have the opportunity to secure coverage to address those gaps. Or a greater focus on the issues involving Excess and Surplus Lines and the importance of binding coverage prior to the effective date, or to ensure that renewal policies from E&S carriers are checked against the expiring coverage to identify any changes. Certainly the issue of dealing with certificates warrants some involved discussion.

Producers – This is a key area where a strong commitment can pay big dividends. Do you know what you sell and sell what you know? If not, take the time to educate yourself on the exposures of your clients. They are relying on you for your expertise and knowledge – be up to the challenge. The various Exposure Analysis Programs (through AMS, Rough Notes, etc.) are excellent resources. (Editor’s note: See sidebar.)

Claims – Do you have staff that will make that “judgment call” as to whether or not there is coverage? What if you did not promptly handle that claim on behalf of your client? Could they suffer additional loss by your lack of attention?

Marketing – A key area that can position your agency extremely well in your community. Develop a newsletter that explains policy coverages, limitations, exclusions, etc. For example, a recent article in an insurance periodical stated that 75 percent of U.S. women’s diamond rings are not insured. Why? Do clients think that the contents section of the Homeowners’ policy adequately covers them? What if the stone comes out and is lost? There is no coverage unless it is specifically scheduled under some type of inland marine coverage.

GIVE PRODUCERS A HELPING HAND INTERESTED IN an Exposure Analysis Program like the author touts? Subscribe to Rough Notes Producer Online … at a member discount. The risk evaluation and coverage resource helps producers identify hidden exposures through personal and commercial lines risk survey modules, while the policy forms and manual analysis provides greater understanding of the products they sell.

IABforME.com/MD/rough_notes

Don’t be afraid to discuss E&O with the staff. Let them know the major role they play in ensuring the future success (production and profitability) through solid E&O loss control activities. n The Utica National E&O Program supplied this article. Our sales center is the exclusive agent for the Utica E&O program in Delaware, Maryland and Pennsylvania.

For questions regarding this article or your E&O coverage, contact IA&B at 800-998-9644 or IAB@IABforME.com.

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COVERAGE CORNER

LIMITING YOUR PREMISES AND OPERATIONS COVERAGE Jerry M. Milton, CIC

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e tend to forget how broad the Commercial General Liability (CGL) policy is. You currently own one location, but during the year you lease or acquire several new locations.

Are these new locations covered? Yes. You are a wholesaler. However, you decide to begin a manufacturing operation. Is this new operation covered? Yes, unless the CGL has some type of classification limitation endorsement attached.

These new locations and operations are not free. That’s why the CGL is subject to an audit.

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Occasionally you will encounter an insurer that does not want to automatically cover these new locations and operations, and they will attach the Limitation Of Coverage To Designated Premises Or Project endorsement (CG 21 44). The insuring agreement of this endorsement is short and sweet.

This insurance applies only to “bodily injury,” “property damage,” “personal and advertising injury” and medical expenses arising out of: 1. Th e ownership, maintenance or use of the premises shown in the

DECEMBER 2015

Schedule and operations necessary or incidental to those premises; or 2. The project shown in the Schedule.

If a loss occurs away from the designated premises, the insured is faced with the task of showing that the operation was necessary or incidental to the premises.

Of course, the endorsement does not explain or define what is “necessary or incidental,” so this will be subject to interpretation. Who will decide? The insured? Certainly not. The claims department? They’ll try. Ultimately, it will probably be determined by the

courts. Court interpretations of the Limitation Of Coverage To Designated Premises Or Project endorsement have not been uniform.

In Sallie v. Tax Sale Investors, Inc., 149 Md. App. 141 (Md. App. 2002), the issue before the Maryland court was whether a liability policy with the Limitation Of Coverage To Designated Premises Or Project endorsement attached provided coverage for a tenant’s claim for wrongful eviction from a rental apartment owned by the insured. The court adopted the analysis employed by many courts of whether there was a sufficient connection between the wrongful eviction and operations that were incidental to the designated premises. The court ruled that the insured’s business rendered the designated premises or project endorsement ambiguous with respect to whether it provides coverage for the wrongful eviction that occurred on premises other than the premises designated in the endorsement. The court ruled in favor of the insured and reversed the lower court’s grant of summary judgment in favor of the insurer.

In Western Heritage Insurance Co. v. Darrah, 2012 U.S. Dist. LEXIS 71768 (M.D. Pa. May 23, 2012), the United States District Court for the Middle District of Pennsylvania had to consider the effect of the designated premises or project endorsement on the insured’s operations.

Western Heritage insured Darrah’s Automotive And Recycling under a CGL. The policy’s Declarations originally described Darrah’s business as “Auto Sales/Salvage and Repair Garage.”

However, the description was amended by a subsequently issued Limitation Of Coverage To Designated Premises Or Project endorsement. No information was entered in the “premises” box, but the “project” box described Darrah’s operations as “Auto Dismantling and Recycling.”

Darrah’s Automotive And Recycling sought defense and indemnification for a suit brought by an individual who claimed to have suffered scarring and disfigurement while working on Darrah’s premises. The individual alleged that he was injured while repairing a vehicle in the repair/body shop. Western Heritage denied coverage on the basis that their policy’s coverage was limited to “auto dismantling and recycling operations.”

Darrah argued that the endorsement provided coverage for injuries incurred at the premises. In a 2010 decision, the district court agreed with Western Heritage, finding that the effect of the endorsement was to limit coverage under the policy to a specific area of work. The court found that since the “project” box contained information and the “premises” box was empty, the endorsement only applied to Darrah’s operations, not its premises.

The injured individual then amended his complaint to allege that the premises where he was injured was used for dismantling and recycling operations.

However, he did not allege that he was injured while performing dismantling or recycling operations. Western Heritage argued that the new allegations only described the premises and did not alter the fact that the individual was injured while performing work outside the scope of the policy’s coverage.

The U.S. District Court rejected the amended complaint finding that the “repair/body shop was not being used at the time of the injury as part of the dismantling and recycling operation.”

The Limitation Of Coverage To Designated Premises Or Project endorsement serves no good purpose for the insured or the insured’s agent. Avoid it, if you can.

Y’all take care! n

Jerry M. Milton, CIC, teaches and consults on industry issues. The legal profession recognizes him as an expert on insurance coverages. He also serves as our education consultant, working with our CISR, CIC and continuing education programs. Catch him at one of our upcoming seminars: IABforME.com/MyTraining.

CIC CORNER Throughout our 2015 Primary Agent magazines, we’ve offered insight and advice on approaching the CIC program from our CIC education consultants. Here we share some of their top tips.

“Review the agenda and familiarize yourself with the various topics – ahead of time. Don’t wait until the night before the class or until the class itself.”

– Jim Harrison Jr., CIC, ChFC, CLU, CPCU “Pay close attention throughout the entire time period, but concentrate on the issues that the instructor emphasizes.”

– Jerry M. Milton, CIC “Being nervous is normal, but try to channel that energy and direct it toward a positive attitude. Be careful and concerned but confident.”

– Dan Lawyer, CIC, CPCU Nationally recognized and highly respected, the CIC program challenges agents to take their knowledge to a higher level with five intensive institutes. Designees are set apart by their ability to maximize coverage in innovative ways for their customers. Visit our website to read more about the program and to register for an institute near you.

IABforME.com/CIC

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STATE NEWS

MARYLAND TO LIMIT DEFINITION OF SMALL EMPLOYER President Barack Obama in October signed H.R. 1624, the Protecting Affordable Coverage for Employees (PACE) Act, into law. The legislation redefines “small employer” under the Affordable Care Act (ACA) as one with 50 or fewer employees and gives states the option to expand the definition to include employers with up to 100 employees.

REGULATORS GIVE RIDESHARING DRIVER ENDORSEMENTS THE GREEN LIGHT Last spring ISO filed several ridesharing endorsements. We spoke with our regulatory contacts at the Maryland Insurance Administration and verified that the following endorsements are not yet approved (as of the time of this writing) and will carry an effective date of 01/01/16 at the earliest.

PAP FORMS FILING PP-2015-OTNFR “Introduction of a Reinforced Public or Livery Conveyance Exclusion and Related Optional Coverage Endorsements” • PP 23 40 10 15 – Public Or Livery Conveyance Exclusion Endorsement • PP 23 41 10 15 – Transportation Network Driver Coverage (No Passenger) • PP 23 45 10 15 – Limited Transportation Network Driver Coverage (No Passenger) PUP FORMS FILING DL-2015-OTNFR “Introduction of a Reinforced Public or Livery Conveyance Exclusion” • DL 99 12 10 15 – Personal Umbrella Liability Policy Public Or Livery Conveyance Exclusion Endorsement Despite the varying effective dates, the multistate filing numbers (showing the 10 15 date) will not change.

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DECEMBER 2015

With the ink barely dry on the new law, the Maryland Insurance Administration (MIA) released a bulletin clarifying that, since Maryland law has been drafted to follow federal law, the state will not expand its definition of small employer.

This means that for plan years that begin on or after Jan. 1, 2016, small employers will be those that during the preceding calendar year employed an average of not more than 50 employees.

Starting in 2016, the ACA was scheduled to expand the definition of the small group market to include all employers with 1-100 employees – adding employers in the 51-100 employee category. The likely effect of such an expansion would have been further disruption to the health insurance market, including increased premiums for an estimated two-thirds of workers in small to mid-size firms as a result of new rating restrictions.

The new law, championed by the business community and passed with strong bipartisan support, protects small to midsized employers and employees at those firms from significant premium increases by enabling states to keep the current definition of a small group market in health insurance at 50 or fewer employees.

annual notification requirement. This change followed a lengthy chain of legal and legislative action in the state.

MIA CLARIFIES UNDERWRITING REQUIREMENTS FOR DOG-BREED EXCLUSIONS While Maryland’s dog-related liability exclusions have not changed, the data insurers may use to justify their underwriting standard have. The Maryland Insurance Administration (MIA) issued Bulletin 15-25 this fall to clarify that insurers may use national experience statistics (rather than only Maryland-specific experience) to support their filings.

In Maryland, insurers may not refuse to issue, cancel or non-renew a policy simply because the homeowner owns a particular breed of dog. However, insurers that file and receive MIA approval may: • Issue policies that exclude coverage for claims or losses resulting from particular breeds of dogs • Deny, cancel or non-renew a policy after a dog bite claim has been submitted As of last year, homeowners’ and renters’ insurance policies with dog-breed exclusions are subject to a mandatory

In April 2012, the Court of Appeals of Maryland Tracey v. Solesky decision imposed a new liability standard for pit bull owners and landlords. Later that year, the Court of Appeals modified its decision to apply only to purebred pit bulls. Then in April 2014, following issuance of a 2013 Maryland Department of Legislative Services report, the Maryland General Assembly passed legislation segregating liability between dog owners and non-owners and removing the inherently dangerous label on pit bulls.

IABforME.com/dog_breed_exclusion

REDMER DELIVERS ON GOAL OF NEW CARRIERS The state’s workers’ compensation and life insurance markets have seven new players. The Maryland Insurance Administration (MIA) announced this fall that it granted Certificates of Authority to: • NorthStone Insurance Company • PinnaclePoint Insurance Company • SummitPoint Insurance Company • MEMIC Casualty Company • Southern Insurance Company of Virginia • Explorer Insurance Company • Assured Life Association

COMMISSION SHARING AMONG TITLE INSURANCE PRODUCERS General commission-sharing rules do not apply to title insurance producers. According to recently released Maryland Insurance Administration (MIA) Bulletin 15-24: Except as permitted under Section 11-407(c) of the Insurance Article, title insurance producers are expressly prohibited from paying or receiving any consideration[emphasis added] to solicit, obtain, retain or arrange real estate settlements.

This state prohibition is consistent with the federal Real Estate Settlement Procedures Act, which prohibits the payment/receipt of any form of kickback in connection with specific real estate settlements. (For more, see our online referral fee resources at IABforME.com/ resource_center/referral.)

The latest announcement follows the MIA’s Bulletin 15-22, issued in July, on the subject of commission sharing. As previously reported in Agent Headlines and Primary Agent, the first bulletin explained that, in exchange for a referral, an insurer or its appointed producer is permitted to pay a referral fee or split a commission with a licensed producer who is not appointed by the applicable insurer.

The subsequent bulletin explains that the original bulletin did not apply to title insurance producers in connection with the settlement of real estate transactions.

WELCOME NEW MEMBERS THE HILB GROUP OF MARYLAND Crofton, MD

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PLATINUM PROFILE

Insurance Agents & Brokers proudly recognizes Liberty Mutual Insurance as one of its Platinum Partners. IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

FOCUSED ON RESULTS FEATURED PARTNER Liberty Mutual Insurance

A

t Liberty Mutual Insurance, we’re here to help you reach your goals. You know that having the right kinds of support can make all the difference for your customers. That’s why we make sure you’ve got the technology, services, and local expertise you need, with the flexibility to work the way that’s best for you. From our local underwriters and territory managers to our claims and risk control consultants and Small Business Service Center representatives, our people are committed to one thing: providing the resources and support you need to succeed.

We proudly partner with independent agents and brokers in Delaware, Maryland, Pennsylvania, and throughout the Mid-Atlantic region and are committed to helping them grow their businesses. We offer comprehensive coverages to tailor insurance from a family owned start-up to a Fortune 500 global company, and every size and type of business in between.

“Successful businesses are the result of strong relationships. We foster these relationships with our appointed agents by maintaining local decision-making, providing familiar, knowledgeable field staff and offering consistent ease of doing business service and technology.” -Connie Bayne Liberty Mutual Insurance gives its agents a single point of access to a wide range of commercial insurance, including BOP/ package, commercial auto, construction, energy, excess casualty, general liability, multinational, property, third-party administration, umbrella and workers compensation. We are the third largest property and casualty insurer in the United States,* as reported by the National Association of Insurance Commissioners. We’re also ranked on the Fortune 100 list of largest companies in the United States.** Learn more about us at www.libertymutualgroup.com/business. n

REGIONAL HOME OFFICE Fairfield, Ohio REGIONAL OFFICES Camp Hill, PA; Columbia, MD; Fairfield, OH; Lexington, KY REGIONAL LEADERSHIP David Lamparella, Regional Vice President, Chesapeake; Donald Waardenburg, Regional Vice President, Pennsylvania UNDERWRITING OFFICES Camp Hill, PA; Columbia, MD; Delaware Valley, PA; Pittsburgh, PA NATIONAL ACCOUNTS LEADERSHIP Thomas Kelley, Vice President & Managing Director, Mark Morneau, Vice President & Division Underwriting Manager NATIONAL ACCOUNTS UNDERWRITING OFFICE Bala Cynwyd, PA A.M. BEST RATING “A” (Excellent) WEBSITE www.libertymutualgroup.com/business

*based on direct premium written **based on annual revenue

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PRESIDENT Connie Bayne, Business Insurance Mid-Atlantic Region

DECEMBER 2015

PARTNERS PROGRAM

Listed below are those companies that strongly support the independent agency system and Insurance Agents & Brokers.

Thank you for your continued sponsorship.

WHAT IS IA&B PARTNERS? The IA&B Partners program gives company and allied businesses the opportunity to demonstrate their commitment of support to independent agents and receive maximum market exposure. As an IA&B Partner, you will also realize the benefits of IA&B membership to help you succeed in the insurance industry.

PLATINUM LEVEL

BRONZE LEVEL

ACUITY

Aegis Security Insurance Co

Berkley Mid-Atlantic Group

Agency Insurance Company

Donegal Insurance Group

AmWINS Program Underwriters Inc

Erie Insurance Group

ARI Insurance Companies

Harleysville Insurance

Auto-Owners Insurance Company

Insurance Agents & Brokers Service Group Inc

Bailey Special Risks Inc

Liberty Mutual Insurance

Briar Creek Mutual Insurance Company

MMG Insurance Company

Conemaugh Valley Mutual Insurance Co

Millers Mutual Group

Countryway Insurance Company

Mutual Benefit Group

Encompass Insurance

Penn National Insurance

Foremost Insurance Group

Swiss Re

GMI Insurance

The Main Street America Group

Goodville Mutual Casualty Company

United Fire Group

Guard Insurance Group

Utica National Insurance Group

HM Workers’ Compensation

Brethren Mutual Insurance Company

Insurance Alliance of Central PA Inc

DO YOU SEE YOUR NAME? To become an IA&B Partner, choose the sponsorship package that matches your commitment of support.

Contact the Member Sales Center at 800-998-9644, 717-795-9100 or visit us online at IABforME.com to get started.

GOLD LEVEL

Amerisafe Progressive Westfield Insurance

Insurance House Insurance Placement Facility of PA Keystone Insurers Group Inc Lackawanna Insurance Group Lebanon Valley Insurance Company Merchants Insurance Group

SILVER LEVEL

Mercury Casualty

Access Insurance Company

Millville Mutual Insurance Co

American Mining Insurance Co

PennPRIME Municipal Insurance

Cumberland Insurance Group

Reamstown Mutual Insurance Company

Farmers Mutual Insurance Company of Western Pennsylvania

Rockwood Casualty Insurance

Frederick Mutual Insurance Co Juniata Mutual Insurance Co

State Auto Mutual Insurance Company TAPCO Underwriters Inc The Motorists Insurance Group

MAPFRE Insurance

The Mutual Service Office Inc

PSBA Insurance Trust

Travelers

Selective

Tuscarora Wayne Group of Companies

The Philadelphia Contributionship

Zenith Insurance

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REFLECTIONS ACCOMPLISHMENTS, BENEFITS

. . .

I

ndependent agents of Delaware, Maryland and Pennsylvania are the driving force behind our work. As we close out 2015, we pause to share what IA&B accomplished on your behalf over the past year. And we share it through the lens of what IA&B means to you, as your advocate, agency, training, connection and support.

MY ADVOCATE Our lobbyists continued to protect your interests with state regulators and lawmakers, and through their work as your advocate, netted three valuable legislative victories this year: 1) In Delaware, we successfully pushed for passage of House Bill 40. The legislation alleviated the administrative burden caused by requiring notarization of the surplus lines diligent effort form.

2) In Maryland, we secured agent-friendly language in the new ridesharing law. Now drivers must be instructed, in writing, to contact their insurance agent before accepting a request for a ride.

3) In Pennsylvania, we made notable headway to advance our legislative priority to increase the state’s woefully low minimum auto liability insurance limits. The Senate passed the legislation, and two companion bills now reside in House committee.

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MY AGENCY Our Sales Center is an independent agency just like yours. It’s staffed by licensed E&O experts who customized coverage to meet the needs of more than 1,750 policyholders over the past year.

We also offered specialized market access to hundreds of subproducers who placed thousands of personal umbrella, workers’ comp, home business and flood policies.

Beyond that, our Sales Center is backed by an entire organization that provided award-winning loss-control seminars, manuals for compliance and legal expertise.

DECEMBER 2015

MY TRAINING Our professional training and development offerings continued to evolve. We maintained our commitment to focus on individual agency staff members’ career goals and your agency’s unique needs. One way was through our inaugural Agency CSR Evolution – a full-day conference designed for service staff. Following its resounding success, we began plans to duplicate the event and to add a similar conference for sales staff.

In other professional development news, we launched a new e-Training Center to streamline on-demand training and allow us to offer live-streaming classes. We also supplemented our curriculum with seven special topic seminars on varied subjects, including the coordination of business and personal auto policies, flood insurance reforms and business income risks.

ON 2015 AND SNEAK PREVIEWS MY CONNECTION We remained your connection to legislative, industry and financial news. And we continued to provide you with insight and analysis through industry-leading communications.

We posted 771 Agent Headlines articles to our website, and then shared weekly Agent Headlines highlights through email. And based on member input, we expanded our social media presence this year to include Facebook. The initiative is part of our Futures Program and aims to give young agents a platform to connect, collaborate and expand their professional network.

Finally, this publication saw improvement as part of our commitment to enhancing your member benefits. In February, we unveiled a redesigned, refreshed Primary Agent magazine and introduced a digitally optimized version for smart phones and tablets.

Thanks to our volunteer leaders’ vision, our member agencies’ support, and our staff’s dedication, we logged another successful year at IA&B. Here, we highlight our accomplishments — and share how you benefit from them.

MY SUPPORT We remained responsive to your evolving needs by providing the support members requested, such as branding assistance. In the spring, we launched a Branding Center, an online hub with turnkey resources, including an expansion of our popular consumer education library.

And we supported it with a three-month online advertising campaign.

And as always, we were on standby to answer your questions on agency management, legal and regulatory compliance, and more.

In fact, we completed the legwork to streamline the process: In early 2016 we will launch an online, self-service platform for you to direct and track your inquiries.

CONCLUSION As we count our successes in 2015, we know that they are thanks to your input, your involvement and your membership. And we vow to continue working for you – meeting your needs and supporting your agency – in the year ahead and beyond. n

13

EMPOWERING SMALL AGENCIES

FOR

BIG SUCCESS

7th Annual Executive Management Conference

14

DECEMBER 2015

O

ver 100 independent agency principals from across the Mid-Atlantic region attended our seventh annual Executive Management Conference. This year’s event, which was designed for smaller agencies, was held Oct. 27-28 at Bear Creek Mountain Resort, outside of Allentown, Pa. The conference featured several prominent speakers – including Jeff Teschke, Steve Anderson, Sharon Emek, Rick Morgan and partners from Keidel, Weldon & Cunningham, LLP – who discussed a range of topics, from human resources and perpetuation, to technology and E&O prevention. Throughout the conference, workshops focused on the challenges of smaller agencies and provided practical, actionable insight.

The event also included opportunities for attendees to network with one another and with sponsors and exhibitors at a traditional welcome reception/tradeshow and in a more casual environment at an evening fall-themed dinner and campfire. n

More photos on next page.

15

7th Annual Executive Management Conference

CONFERENCE SPONSORS & EXHIBITORS A sincere thank-you goes to the sponsors whose generous support made our 2015 Executive Management Conference possible.

LEAD SPONSORS Donegal Insurance Group Insurance Agents & Brokers Service Group Progressive Additional sponsors Amerisafe Assurant Flood Solutions Berkley Mid-Atlantic Group Conemaugh Valley Mutual Cumberland Insurance Group Encompass Insurance Erie Insurance Frederick Mutual Insurance GMI Insurance HM Workers Compensation Hospitality Insurance Group ICW Group Insurance House Liberty Mutual MAPFRE Insurance Millers Mutual Mutual Benefit Group Pa. Lumbermans Mutual Insurance Penn National Program Brokerage Westfield Insurance

16

DECEMBER 2015

17

2015-2016 Board of Directors

E. Stephen Burnett, CIC, ARM

Delaware Association of IA&B Chairman Insurance & Financial Services Wilmington, Del.

Michael P. Ertel Sr. PIA National Director The Jacobs Company Columbia, Md.

Diana M. Hornung Hanby, ACSR

IA&B Service Group Immediate Past Chairwoman Thomas J. Hornung & Associates Wilmington, Del.

Robert S. Klinger, LUTCF, CPIA

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IA&B Service Group Chairman Klinger Insurance Group Germantown, Md.

Richard F. Corroon, CPCU

Delaware Association of IA&B Vice Chairman Weymouth, Swayze & Carroon Insurance Wilmington, Del.

Bryan C. Hanes, J.D.

Antietam Insurance Associates Inc. Hagerstown, Md.

Jocelyn R. Howard-Sinopoli, CIC, CISR C.W. Howard Agency Inc. Butler, Pa.

Douglas A. Loesel, CPCU

Loesel-Schaaf Insurance Agency Inc. Erie, Pa.

N. Lee Dotson, CIC, AAI Bellevue Insurance Services Wilmington, Del.

John B. Hollister

IA&B of Pennsylvania Chairman Rodgers-Olver-Polley Insurance Milford, Pa.

David C. King Horst Insurance Lancaster, Pa.

Michael F. McGroarty Sr.

IA&B Service Group Vice Chairman McGroarty & Bradburn Insurance Inc. Pittsburgh, Pa.

Craig S. Mader

Ann Gallen Moll, CIC

Joseph R. Pastor, CPCU, AAI

Richard Rankin, CIC

IA&B of Maryland Chairman Craig S. Mader Insurance Agency Inc. Crofton, Md.

IA&B of Pennsylvania Vice Chairman Barr’s Insurance Oil City, Pa.

Scott C. Rogers, CPIA IIABA National Director The Glatfelter Agency York, Pa.

Gallen Insurance Inc. Shillington, Pa.

Mark J. Monroe

Griffith Insurance, LLP West Chester, Pa.

April E. Ressler, CIC

Murray Securus Lancaster, Pa.

Teeter Insurance Agency Inc. Altoona, Pa.

Glenn R. Strachan

J. Marshall Wolff, CIC, CPCU

IA&B of Maryland Vice Chairman Strachan Insurance Agency Inc. Ft. Washington, Md.

Kressler Wolff & Miller Inc. Easton, Pa.

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM IIABA National Director S.T. Good Insurance New Castle, Del.

19

IA&B Financial Reports Attachment A1 INSURANCE AGENTS & BROKERS COMBINING STATEMENT OF ACTIVITIES March 31, 2015

IAB OF PA Revenues: Membership Dues Professional Training Events & Member Products Publications Royalties & Commissions Other Total Revenues

IAB of MD

Combined IAB Associations

DAIAB

469,777 1,516,315 118,948

90,273 384,171 9,246

26,262 57,687 69,347

586,694 3,017 2,694,751

139,973

862 43,828 197,986

623,663

Expenses: Membership Commission Professional Training Events & Member Products Publications Advocacy Corporate & Management Governance Total Expenses

97,058

3,736

5,153

1,179,861 40,969

322,871 8,285

55,209 47,430

39,915 1,233,921 20,232 2,611,956

55,640 252,087 7,289 649,908

Net Operating Income (Loss)

82,795

(26,245)

Other Income (Expense): Contributions & interest to designated funds Depreciation & amortization Interest & dividends on cash equivalents Net investment income PAC income(loss), net of expense Pension expense Life insurance income Deferred compensation expense Pension related changes Income tax benefit (expense) Total Other Income (Expense) Change in Net Assets

586,312 1,958,173 197,541 0 727,529 46,845 3,516,400

835 10,280 (4,615)

87,150 1,960,733 1,519,575 3,567,458

10,488 60,758 7,355 186,393

3,100,509 41,915 3,347,176

11,593

68,143

220,282

2,029 0

(189,532)

614 1,983 3,705

69,497

6,500

6,302

152,292

(19,745)

17,895

Intercompany Eliminations

(4,045)

105,947 0 1,557,941 96,684 0 106,043 1,546,766 34,876 3,448,257

2,029

6,111 66,124 (4,767)

IAB Service Group

(8,000) (14,196) (1,519,567) (1,545,808)

131,956 (49,515) 72,796

7,560 78,387 (5,677) 0 0 0 0 0 82,299

1,449 2,386 (787,675) 69,222 (212,502) 414,956 248,558 (453,138)

150,442

(1,499,575) (1,549,090) 3,282

Combined IAB

582,267 1,958,173 189,541 72,954 2,688,262 46,853 5,538,050

105,947 131,956 1,508,426 96,684 72,796 106,043 3,147,700 76,791 5,246,343 291,707

2,029 (189,532)

(3,282)

(3,282)

(232,856)

0

9,009 77,491 (5,677) (787,675) 69,222 (212,502) 414,956 248,558 (374,121) (82,414)

Attachment A1 INSURANCE AGENTS & BROKERS COMBINING STATEMENT OF FINANCIAL POSITION March 31, 2015 ASSETS IAB OF PA Cash & Cash Equivalents Cash, Premium Fiduciary Account Accounts Receivable Prepaid Expenses Deferred Income Tax Inventory Investments - Mutual Funds & ETFs Total Current Assets

IAB of MD

Combined IAB Associations

DAIAB

1,810,811

293,177

151,437

119,207 84,633

48,842 3,430

13,561 3,283

11,671 1,986,732 4,013,054

98 261,302 606,849

152 264,067 432,500

Property & Equipment, net Cash whose use is limited, board & Donor Designated Inter-corporate Loans Investment in Big I Reinsurance Co. Investment in IAB Service Group Other Assets, Net of Amortization Cash Value, Life Insurance Deferred Income Tax Total Other Assets

417,819 558,624 90,000 486,082

22,484

16,670

102,013

30,000 12,005

IAB Service Group

2,255,425 0 181,610 91,346 0 11,921 2,512,101 5,052,403

463,517 344,546 300,922 64,372 26,400 9,750 60,756 1,270,263

0

1,340,239

1,552,525

124,497

58,675

456,973 558,624 120,000 600,100 0 0 0 1,735,697

Total Assets

5,565,579

731,346

491,175

6,788,100

Total Current Liabilities

1,511,009

Intercompany Eliminations

(367,095)

(367,095)

Combined IAB 2,718,942 344,546 115,437 155,718 26,400 21,671 2,572,857 5,955,571 1,340,239

64,348 1,021,235 483,937 1,569,520

(1,158,724)

456,973 0 120,000 0 64,348 1,021,235 483,937 3,486,732

4,180,022

(1,525,819)

9,442,303

(558,624) (600,100)

LIABILITIES & NET ASSETS

Inter-corporate Loans Retirement Obligations Total Long-term Liabilities

20

289,894

106,368

1,907,271

668,545

(446,797)

2,129,019

478,922 877,888 1,356,810

(478,922)

0 877,888 877,888

100 600,000

(100) (600,000)

0

0

0

0 0 0

Net Assets, unrestricted Capital Stock Additional Paid-in Capital Designated Funds Undesignated Total Net Unrestricted Assets

417,388 3,637,182 4,054,570

22,536 418,916 441,452

16,474 368,333 384,807

0 0 456,398 4,424,431 4,880,829

1,554,567 2,154,667

(600,100)

0 0 456,398 5,978,998 6,435,396

Total Liabilities & Net Assets

5,565,579

731,346

491,175

6,788,100

4,180,022

(1,525,819)

9,442,303

(478,922)

DECEMBER 2015

IA&B maintains a strong balance sheet with $9.4 million in assets, $6.4 million in member equity and no long-term debt, with almost $292,000 net operating income for the year.

IA&B supports the activities that our members value – effective advocacy, timely compliance resources and quality education.

We’re over 1,300 members strong across three states. Approximately 6,600 participants attend over 185 IA&B classes annually. And members buy more than 1,750 policies for their agency insurance coverage through us.

This allegiance to IA&B, combined with our carrier partnerships, supports the financial strength of the organization.

The accountants’ review for the fiscal year, which ended March 31, is on file at IA&B headquarters. These statements are a summary of that report.

UPDATE YOUR GOOGLE MY BUSINESS ACCOUNT A

By Steve Anderson, CIC

key to mastering your Internet presence is to create and maintain a Google Business Page for each agency location. This is an essential search engine optimization step every agency should already have in place. It is a simple process.

If you have not taken this step, just go to Google My Business (google.com/business) and follow the step-by-step instructions.

Once you have completed the verification process, your agency has a higher possibility (there are no guarantees) of showing up in a Google Search results page.

UPDATE YOUR EXISTING LISTING For those agencies that have already completed this process, Google is now requiring that U.S. accounts periodically log into their Google My Business account and update any information necessary to prove that the account continues to be active. While Google has not provided specific guidelines, it appears you should log into your account at least once every six months.

If Google determines the account might be inactive, they will email the address on the account (make sure that address actually comes to a person in your agency) and

provide a two-week notice of the pending unverification. If the account status is changed, the agency listing will no longer be included in any search results.

Here is the notice from Google: In some cases, we may contact Google My Business users via email to confirm that they are still actively managing a business page. If a user is unresponsive to our attempts to contact him or her and has not logged into Google My Business for a significant length of time, then we may unverify pages in the account. We’re doing this in order to continue to provide users

with the best experience when they’re looking for local businesses like yours.

If you find that a page in your account has been incorrectly unverified, please contact support [support.google.com/ business] to get assistance restoring verification.

It’s a good idea to keep an eye on the inbox associated with your Google My Business (Locations) account. It’s also a good idea to regularly log into Google My Business (Locations) to confirm that your agency information is current and accurate.

21

HEAR FROM STEVE THROUGHOUT 2016

Simply follow these three easy steps: 1. Sign into your Google My Business account.

2. Review and update your information for each page.

CAN’T GET enough of what agency technology expert Steve Anderson has to say? You’re not alone. That’s why we’re excited to offer a webinar series – which we developed and Steve compiled and will facilitate – beginning early next year.

The program, which dovetails off of our 2015 Executive Management Conference presentations on agency management system selection and implementation, will consist of 15 one-hour component webinars, with a different agency management system featured each week, delivered through our new My E-Training Center.

IABforME.com/AMSwebinars

22

3. Click the “Done editing” button.

Make sure to set a reminder or suspense item for every six months and repeat the process.

It is up to your agency to make sure your information is accurate. It is also a good time for you to update any keywords and descriptions contained in your listing.

Google is constantly trying to make sure the information they provide in a search result is as accurate as possible to enhance the user experience. n Steve Anderson, CIC, authored this piece, which originally appeared as one of his TechTips. Steve is an authority on Insurance agency technology, productivity and profitability – and a frequent presenter at our annual Executive Management conference. Check out his free weekly newsletter, “TechTips,” and other resources for the insurance industry at steveanderson.com.

DECEMBER 2015

Training where, when and how you want it.

My E-Training Center is IA&B’s new online portal for on-demand CE and webinars.

7.5X4.625 General JGS Umbrella Program ad

New Programs Added This Fall Checkout “Essentials of Homeowners’” and other CE topics specifically for CSRs.

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23

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DECEMBER 2015

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CLASSIFIED A DV E R TI S E M E N TS

My Events

SOUTHEAST PA PRODUCERS & AGENCIES

December 2015 DATE TOPIC

LOCATION

DECEMBER 1

William T. Hold: Policy Language Surprises

Lancaster, PA

1-3

PA P&C Licensing Study Course

Mechanicsburg, PA

1-3

PA P&C Licensing Study Course

Pittsburgh, PA

2

E&O Risk Management: Meeting the Challenge of Change

Newark, DE

2-5

CIC Personal Lines Institute

Philadelphia, PA

8

CISR Commercial Casualty II

Philadelphia, PA

8

Business vs. Personal Auto

Pittsburgh, PA

9

CISR Commercial Property

Mechanicsburg, PA

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Contact Ray Reinard at 215-357-8600, Ext. 119.

If you would like to place a classified advertisement, please contact Laura Gaenzle at Laura.gaenzle@theygsgroup. com or (717) 430-2351.

Right Policy. Right Price. Every Time. www.interstate-insurance.com