La Voz january 2013

LOVE

We your business.

Bring your business home to New Mexico Mutual and celebrate with a 5% increase in commission on NEW BUSINESS* bound with effective dates through February 2013.

We appreciate your business and our partnership! We look forward to providing your clients the opportunity to put their business with a New Mexico company.

If you have any questions, please contact your sales representative.

SM

SM

New Mexico’s Experts in Workers’ Compensation Insurance.

3900 Singer Blvd. NE • Albuquerque, NM 87109 • 505.345.7260 or 800.788.8851 • www.NewMexicoMutual.com *Excludes accounts that were insured with New Mexico Mutual in the previous 6 months, short-term policies, rewritten policies, and renewal policies.

“La Voz� is the official monthly e-publication of the

La

Independent Insurance Agents of NM 1511 University Blvd. NE Albuquerque, NM 87102.

(505) 843-7231. Fax (505) 243-3367.

Web site www.iianm.org.

This publication is intended to provide accurate and authoritative information on the subject matter covered, but is distributed with the understanding that neither IIANM, nor any contributing author, publisher, contributor or advertiser is rendering legal, accounting or any other professional service and assume no liability whatsoever in connection with its use.

Further, the electronic links to our advertisers and/or contributors found in this publication are provided as a courtesy to our readers and do not necessarily indicate an endorsement by IIANM.

Features

o VZ

"The Voice" of Independent Agents since 1934

2013 - Become an IIANM Company Partner

04

LEGISLATIVE MIXER

05

Sneaking a Peek at our Upcoming Ed Seminar

05

Networking & Associations

09

IRS Issues New Mileage Rates

10

News items from members of Independent Insurance Agents of New Mexico and the general insurance industry are encouraged.

The advertising deadline is the fifteenth day of the month, preceding publication.

IIANM Dues Deductibility

10

Are You Prepared for Obamacare?

14

Potential Pitfalls of "Free Insurance" with Purchase

17

Advertising rates are available upon request.

The Cost of Not Training

18

Please contact Rachel Sheffield at rachel@iianm.org for details

Do Insurance Agents Have a Duty to Advise

20

IIANM's 2013 Calendar of Events

24

Seven Keys to a Powerful Sales Presentation

27

On the Hill - NCOIL Passes Certificates of Insurance Model Act

29

IIANM Staff President/CEO Thom Turbett Vice President of Member Services Consuelo Trujillo

In Every Issue

Vice President of Insurance Programs Julie A. Franchini

Tech Talk

12

Communications Director Rachel Sheffield

January's Clickable Calendar

30

Odds n Ends

31

Member Services Associate Renee Trujillo

2012-2013 Officers

Advertiser Index Acuity Burns & Wilcox

11

Back Cover

Litchfield Special Risks

06

Lovelace Health Plan

08

Vice-Chair Diana Hobbs

Market Finders, Inc.

08

MexiPass

23

Secretary/Treasurer Gabe Portillo

Mountain States Insurance Group

19

New Mexico Health Insurance Alliance

22

New Mexico Mutual

02

Trustco

22

Chair PJ Wolff

National Director Sam Conlee Immediate Past Chair Scott Jones

Become a Partner!

We invite companies to experience the enormous networking, recruiting and branding opportunities presented by becoming an IIANM Corporate Partner. Our Associate's Partnership program puts supporters front and center in a meaningful and memorable fashion.

The Partners Program is a win-win situation for both IIANM and its Partners.

Our Partners appreciate this "one-stop" approach to supporting IIANM and its members. From IIANM's point-of-view, it saves time and resources formerly spent soliciting for event sponsors.

Benefits to you: • Support the Agency Distribution System: Your backing makes it possible for IIANM to develop affordable, quality programs that enhance the professionalism of New Mexico's independent insurance agents.

• Substantial Savings: The value of the various benefits you receive as an IIANM Partner far exceeds the cost!

• Unique Perks: Many of the perks you receive as an IIANM Partner are not available to other companies - at any cost.

• First Pick: Diamond, Platinum, and Gold Partners are guaranteed first pick of sponsorships and exhibit space at IIANM events.

• No Hassle: We will not solicit money from you again this year!

Six levels of participation are available:

Diamond

Gold

Bronze

Platinum

Silver

Copper

For more information, to view a graph with a breakdown of what each level is entitled to, and for a pledge form, click here.

Contact Consuelo Trujillo at 505-999-5804 or consuelo@iianm.org with any additional questions.

Sneaking a Peek at our Annual CE Seminar

Get Your 15 Hours of Continuing Education Commercial Lines / Personal Lines Young Agents Professional Development / Intro to AAI / Life & Health

March 19th & 20th, 2013 Crowne Plaza, Albuquerque NM

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 5

Your state association contact: Julie A. Franchini 505-999-5802 julie@iianm.org

A monthly reminder of your membership benefits As an IIANM member, Big “I” Markets (BIM) is your exclusive online market access program. It features specialty/ niche coverages, program business, and hard-to-find markets. BIM offers competitive commissions, no registration fees, and no volume commitments. For the complete BIM product guide, click here. You can register for Big “I” Markets online and be quoting business in as little as 10 minutes. If your agency hasn’t registered yet, click here for instructions.

MOBILE FOOD VENDOR MARKET BIM recently expanded its restaurant offerings to include a program designed specifically to serve the insurance and risk management needs of the mobile food vending industry. There are more mobile food trucks than ever before, as a recent Albuquerque Journal article noted.

Many of the vendors have culinary experience and harbor hopes of opening up their own restaurants someday.

While their dream may be financially out of reach for now, they can afford a food truck. The mobile food vendor market has been one of the healthier growth markets of the past few years.

Eligible Classes • Mobile Kitchens: Hot Trucks - Food prepared and served from truck • Lunch Trucks: Cold Trucks - Sells prepackaged food • Catering Trucks • Gourmet Coffee Trucks • Stationary Food Trailers - Pop Up Restaurants

BIM Website Training Webinars

Ineligible Risks

For all you folks who recently registered for Big "I" Markets, remember you can participate in a webinar from the comfort of your office to help you learn how to navigate around the system.

Every Thursday at 2:00 p.m. EST we'll show you how to navigate the Big "I" Markets platform, including how to submit a quote! Register for the webinar by sending an email with your name and company name to bigimarkets@iiaba.net. Include "Website Navigation Webinar" in the subject line or body of your email. A recording of this webinar can be found under "Publications" after logging into Big "I" Markets.

• Mobile Food Vendors without a valid operator's license • All Non-Motorized food vendors (pushcarts, etc.) except for Stationary Food Trailers - Pop Up Restaurants • All Mobile General Merchandize (Non-food) Vendors • Mobile Food Vendors selling Alcohol and/or Tobacco Products Visit www.bigimarkets.com for complete details.

Click here to view a list of Big “I” Market FAQs

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 7

s . m e smi ile. fe v . o l e le. feeelltthheelov AWARDS & RECOGNITION AWARDS & RECOGNITION TOp RANkED ppO IN NEW MExICO NCQA’s Private Health Insurance Plan TOp RANkED ppO IN NEW MExICO Rankings, 2011-2012 NCQA’s Private Health Insurance Lovelace Insurance Company,Plan Inc. Rankings, 2011-2012 4-STARInsurance RATING Company, Inc. Lovelace Center for Medicare & Medicaid Services 4-STAR RATING Lovelace Health Plan Center for Medicare & Medicaid Services BEST plACES TO WORk Lovelace Health Plan Modern Healthcare Magazine for 2011 BEST plACES TO WORk Lovelace Women’s Hospital Modern Healthcare Magazine for 2011 Lovelace Westside Hospital Lovelace Women’s Hospital ROADRuNNER RECOGNITION Lovelace Westside Hospital Quality New Mexico ROADRuNNER RECOGNITION Lovelace Women’s Hospital Quality New Mexico Lovelace Westside Hospital Lovelace Women’s Hospital BREAST IMAGING CENTER Of ExCEllENCE Lovelace Westside Hospital College of Radiology BREAST IMAGING CENTER Of ExCEllENCE Lovelace Women’s Hospital’s Diagnostic College of Radiology Imaging Center Lovelace Women’s Hospital’s Diagnostic Only hospital in Albuquerque recognized as Imaging Center TOp pERfORMER ON kEy QuAlITy MEASuRES Only hospital in Albuquerque recognized as The Joint Commission TOp pERfORMER ONHospital kEy QuAlITy MEASuRES Lovelace Westside The Joint Commission Only hospital in New Mexico Lovelace Westside Hospital CARf ACCREDITED IN SIx pROGRAMS Only hospitalRehabilitation in New MexicoHospital Lovelace CARf ACCREDITED IN SIx pROGRAMS GET WITh ThE GuIDElINES Lovelace Rehabilitation Hospital STROkE SIlvER pluS pERfORMANCE AChIEvEMENT AWARD GET WITh ThE GuIDElINES American Heart Association/STROkE SIlvER pluS pERfORMANCE AChIEvEMENT AWARD American Stroke Association American Heart Association/ Lovelace Medical Center American Stroke Association BEST plACES WORk Lovelace Medical TO Center New Mexico Business Weekly for 2011 BEST plACES TO WORk Lovelace Health Plan New Mexico Business Weekly for 2011 Lovelace Health Plan LHP 976-0112 LINC 483-0112

things just keep getting better. things just keep getting better.

A few years back, we began telling you that you’re going to

loveyears Lovelace. we didn’t just you tell you we began toto show A few back, But we began telling that–you’re going you.

We made commitment to change the way healthcare love Lovelace.

Butawe didn’t just tell you – we began to show is delivered just here in Albuquerque, the whole you.

We made not a commitment to change the but wayinhealthcare state. Wenot made commitment to hard but workinand is delivered justahere in Albuquerque, the providing whole quality to recruiting the best and to state.

We healthcare, made a commitment to hard workemployees and providing providing affordable, accessible plans to businesses quality healthcare, to recruiting the health best employees and to and individuals. providing affordable, accessible health plans to businesses and individuals.

Our commitment is showing results. Today, Lovelace Health System is proudisto be recognized by these independent Our commitment showing results. Today, Lovelace Health organizations.

But not finished.

Ourindependent focus remains on System is proud to bewe’re recognized by these bringing theBut best health to you.

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It’s proof positive that we’re changing the way healthcare delivered.

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Lovelace Health System, Inc. • Lovelace Insurance Company Lovelace Health System, Inc. • Lovelace Insurance Company

lovelace.com

lovelace.com

exceptional care for

and Associations

by Chris Burand

Networking with peers has always been a popular and useful endeavour, especially for agency owners. Whether it occurs at state association meetings, company meetings, or agency management system user group conventions.

I have spoken at more than 200 insurance industry networking events and I have personally run several agency networks for more than fifteen years. Based on my experiences, I've concluded the most important quality for distinguishing one network from another is not whether the focus is on sales, trade, technology or management.

The most important quality is whether the network is a feel-good network or one that truly builds a person and their business. The best achieve both, at least for some of the participants. It is likely impossible to achieve both for all participants because for some people, building a better business is emotionally so difficult they cannot truly feel good while they're doing it.

Through the years, I have witnessed a full spectrum of meetings and audiences. The spectrum runs from meetings that are pure social events, to groups that look and act serious but spend a lot of time at the bar or even the strip clubs, to meetings where the attendees are there solely to improve their agencies.

I am not writing to suggest one type is better than another. Everyone has their own needs, desires and tastes.

I am simply pointing out this distinction is critical to an agency owner finding the association that suits him or her best. Sometimes identifying the true nature of a group is exceptionally difficult, especially the groups posing as truly focused on building the business but really acting as a well done charade for socializing.

The primary difference between ones truly focused on building the business and ones just posing as building the business involve pure accountability. One indication is that pure accountability is next to impossible to achieve in large groups so if the network is large, odds are it is closer to the posing than reality on the spectrum.

Another indication is whether personal accountability for the agency owner is part of the agenda. By this I mean hard, tangible personal accountability for improving their agency, for bringing true value to the network and for accepting consequences for failure. The quickest way to separate the chaff from the wheat in networks is to introduce personal accountability. The posers leave quickly.

Another key test if the network is mostly sales oriented is to ask some of the members for hard and fast proof sales have increased specifically due to their participation.

Don't settle for stories.

Some agency owners get so caught up in attending association meetings they become "meeting junkies." They attend so many association and network meetings they don't have time to write business. I have visited agencies where the principals attend so many meetings, the staff becomes overwhelmed by all the ideas the principals bring back, especially if the principals do not work to fully implement the first ideas before coming back with more. The key here is to only take three ideas out of each meeting and then work hard to implement each idea. It is tough to let go of all the other great ideas you'll get, but necessity demands focus. Your staff will appreciate this approach because they won't be overwhelmed and they will see the agency progress faster further. This builds morale and teamwork.

The most valuable role a network designed to help its members build their businesses is to create personal accountability. As a business owner, it is difficult to create true accountability. Your peers within the network can really help, if you will ask and allow them to do so. Quite honestly, when I have seen this occur within my own networks, it is incredibly rewarding for all involved.

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 9

IRS ISSUES NEW MILEAGE RATES FOR 2013

The Internal Revenue Service (IRS) this week issued the 2013 optional standard mileage rates used to calculate the deductible costs of operating a vehicle for business, charitable, medical or moving purposes.

Beginning Jan. 1, the standard mileage rate for using a car for business will be 56.5 cents per mile. The standard mileage rate for using a car in service of charitable organizations is 14 cents per mile.

Taxpayers always have the option of calculating the actual costs of using their vehicle rather than using the standard mileage rates.

Deductibility of dues / Lobbying Percent By federal law, we are required to provide each of our members with the following disclosure regarding their 2011-2012 dues.

Dues to the Independent Insurance Agents & Brokers of America (IIABA) are not deductible as a charitable contribution but may be deductible as an ordinary and necessary business expense. To the extent that IIABA engages in lobbying, the portion of the dues that relate to lobbying expenses is not deductible as an ordinary and necessary business expense.

This law was enacted in 1993, effective January 1, 1994 [Section 13222 of the Omnibus Budget Reconciliation Act of 1993 (OBRA 1993)]. The non-deductible portion of dues for 2011-2012 is 22.29%.

The following is a recap of the non-deductible portion of dues for the past six years:

Page 10

FY 2006-07

Estimated 22.98%

Actual 24.93%

FY 2007-08

Estimated 25.16%

Actual 17.99%

FY 2008-09

Estimated 18.23%

Actual 17.35%

FY 2009-10

Estimated 17.72%

Actual 21.37%

FY 2010-11

Estimated 21.92%

Actual 22.19%

FY 2011-12

Estimated 22.83%

Actual 22.29%

FY 2012-13

Estimated 22.71% Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

RELAX. WE’VE GOT YOUR BACK.

FOR ALL

THAT MATTERS

www.acuity.com

facebook.com/acuitywow Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013 Page 11

Steve

Anderson.com by, Steve Anderson (Always feel free to email me with comments, new ideas or products that have worked for you.

I will check them out and spread the word!)

Top 6 Tips for Shooting Great Video with your Smartphone

plugs into your phone. There are a number of different types you can use to improve the audio quality of your video. Simply search for "audio microphone [Your smartphone brand]" to see listings of possible products.

2. Hold it Steady As with all cameras (both still and video), a steady hand is the key to achieving a shot that's free from blurring and distortion. Grip the phone with both hands when recording video, taking care to avoid blocking both the camera and the onboard mic with your fingertips. If you have a tough time limiting movement, consider resting your phone on a table to help add stability. You also can purchase a small tripod that will help steady the camera.

Video should be a key part of every insurance producer's sales toolkit. Smartphone video has improved in quality to the point that today's phones allow you to take High Definition (HD) quality video quickly and easily. Insurance producers currently can use video to create great connections with people they can't see in person, explain complicated processes to an underwriter, and demonstrate why certain coverage is important for a prospect to consider.

But, creating a good video is not as easy as pushing the start button. With the right knowledge, skills, and equipment anyone can transform your mobile device into a powerful video camera to record effective video.

Here are 6 key things to remember when using your cell phone to shoot video:

1. Audio is Key People will put up with lower quality video with good quality audio much longer than the reverse. It is important to take steps to record the audio well. Unfortunately, the built-in microphone in most smartphones is not very high quality.

And, it is susceptible to recording wind and other ambient noise.

If at all possible, record your video in a quiet place. You also might want to invest in an external microphone that Page 12

3. Shoot Horizontally Most people are accustomed to holding their cell phone handset vertically, however, video recorded like this doesn't look very good when it's replayed on a horizontal computer screen or television. Once you've launched the video camera, hold the camera horizontally during all video shoots to maintain consistency between clips.

4. Get Closer Since most mobile phones do not offer an optical video zoom feature, you'll need to move closer to your subject to ensure your subject is clearly visible on the video. This also helps your viewers know exactly what the subject of your video is, since video that's shot in widescreen can be confusing and filled with numerous subjects that distract from your main point.

5. Light it Up Aim to record cell phone video in well-lit areas to prevent shadows and dark areas on the clip, however, don't aim directly at any light source -- this will make your video virtually impossible to watch. Because the sensors in cell phone cameras tend to be very basic they are unable to handle wide variations in lighting, so be sure to record in an area that has a steady light source.

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Finding Your Lost Mobile Device 6. Make Sure There's Room Video files are large and can quickly max out the onboard memory on your mobile phone. Before you begin recording, check how much memory is available on your device.

If possible, expand the memory capacity of your phone by adding an optional memory card such as a micro-SD card.

By following these 6 tips, you'll be able to record great videos using your cell phone or other mobile device.

Test Your Websites Using Multiple Browsers Browser market share statistics as of September 2012 are: • IE-38% • Firefox-25% • Chrome-21% • Safari-8% • Mobile-7% This means your websites must render correctly on at least these 5 different platforms. You should make sure to test your website on each browser platform to make sure the pages and content displays correctly.

You could install each browser on both a Windows and Apple computer so you could load your website and test all of the pages. However, this is at best a cumbersome process.

Enter Adobe BrowserLab. Adobe BrowserLab is a free, web-hosted, cross-browser compatibility tool that lets you test both modern and legacy browsers, including all of the browsers listed above.

The BrowserLab platform provides a number of ways to view pages, including a full-page view in a single browser, as well as side-by-side comparisons of browsers as well as an onionskin view.

This service works by taking screenshots of your webpage using hosted versions of each of the browsers that you select. You can create predefined browser sets that contain the specific browsers you want to test. This allows you to test only the browser versions you are interested in, although you should test every browser (including multiple versions).

You can't find your phone and you start to panic. There is perhaps nothing more stressful than leaving your phone someplace or having it stolen. Losing your phone is like losing your wallet with $700 in cash, plus your emails, contacts, and passwords. And if you use it for business, the data breach implications are huge.

There are several ways you can track and, hopefully, find and recover your lost or stolen mobile devices - if you take steps to install one of the many services that can help find lost devices. Some are platform specific, others work with a variety of smartphones, tablets and laptops.

Following are a few suggestions: Find My iPhone (iOS: free): Very popular for finding an Apple device. It has key features including geolocation, remote alarm, and remote wipe. All you need to do is enable the app from your device settings.

Prey (iOS, Android, Linux, OSX, Windows: free and premium): This works across platforms including phones, tablets, and laptops.

Lookout Mobile Security (iOS, Android: free and premium): The free version lacks remote wipe and lock, but does include other features like security and data backup.

Dropbox (iOS, Android, Linux, OSX, Windows: free and premium): While not generally thought of for mobile security, this service has a hidden feature that could help you find a lost device. The Security tab of your Dropbox account shows a list of devices that are linked. Under "Most recent activity" you will find the last logged IP address.

You can use this to look up the location.

The service is hosted and provided by Adobe. To use the service you will need to create an Adobe ID and password. If you currently use other Adobe products you may already have an account set up.

Lojack for Laptops (Windows, Mac OSX: $39.99/yr): Like Lojack for your car, this software offers remote file, geolocation, and remote locking with message display.

There is no cost to use this service as of today. Adobe could change this and charge for the service at any time.

Test your website by going to Browserlab.adobe.com.

For your own peace of mind, I suggest you do something to help you locate your device if it is ever lost or stolen.

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 13

Are You Prepared for

Obamacare?

The dawn of 2013 also signals the impending arrival of ‘Obamacare’. The Obama administration now prefers the term ‘Affordable Care Act’ (or ACA) for their landmark legislation, which will transform our healthcare system as we know it. The reforms contained in the legislation really start to kick in this year, so this article was created to help independent agents prepare themselves and their clients for the changes that are coming. (Including the New Mexico Health Insurance Exchange, which is scheduled to launch in late fall, 2013.)

The information contained in this article is essentially in three parts: The first will summarize the health insurance market reforms associated with ACA; the second part will focus on what individuals should know; and the final segment will deal with employer issues including information on the structure of the NMHIX (NM Health Insurance Exchange.)

Market Reforms Guaranteed Availability of Coverage Health insurance issuers generally would be prohibited from denying coverage to people because of a pre-existing condition or any other factor. Individuals generally would need to buy coverage during open enrollment periods. In addition, individuals would have new special enrollment opportunities in the individual market when they experience certain losses of other coverage.

Fair Health Insurance Premiums Health insurance issuers in the individual and small group markets would only be allowed to vary premiums based on age (within a 3:1 ratio for adults), tobacco use (within a 1.5:1 ratio and subject to wellness program requirements in the small group market), family size, and geography.

All other factors – such as pre-existing conditions, health status, claims history, duration of coverage, gender, ocPage 14

cupation, and small employer size and industry – would no longer be able to be used by insurance companies to increase the premiums for those seeking insurance.

Under the law, states can choose to enact stronger consumer protections than these minimum standards. In addition, starting in 2017, states have the option of allowing large employers to purchase coverage through the Exchanges. For states that choose this option, these rating rules also would apply to all large group health insurance coverage. These proposed rules standardize how health insurance issuers can price products, bringing a new level of transparency and fairness to premium pricing.

Single Risk Pool Health insurance issuers would be required to maintain a single statewide risk pool for each of their individual and small employer markets, unless a state chooses to merge the individual and small group pools into one pool. Premiums and annual rate changes would be based on the health risk of the entire pool. This provision prevents insurers from using separate insurance pools within markets to get around the market reforms and to charge people with greater health problems higher premiums by increasing their premiums at higher rates than other, healthier risk pools.

Guaranteed Renewability of Coverage The proposed rule would reaffirm existing protections that individuals and employers have with respect to coverage renewal. For example, these protections would prohibit issuers from refusing to renew coverage because an individual or employee becomes sick or has a pre-existing condition. In addition, the proposed rule includes some additional provisions to protect consumers and increase choice for small employers.

Catastrophic Plans The proposed rule also includes provisions for enrollment in

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

catastrophic plans. Catastrophic plans have lower premiums, protect against high out-of-pocket costs, and cover recommended preventive services without cost sharing— providing affordable individual coverage options for young adults and people for whom coverage would otherwise be unaffordable.

vidual who makes less than $14,856 per year, or a family of four who makes $30,556 per year, can be eligible for Medicaid. Every state, however; is not required to abide by that change, according to the Supreme Court ruling – and it will depend upon the state where you reside whether you will be eligible. (New Mexico has not yet decided).

What Individuals Need to Know About ACA

6. How does the new law impact seniors?

1. If I get health coverage through my employer, will I have to change plans, or can I keep my own?

Thus far, the majority of employers have opted to continue providing coverage for employees, as well as dependents under the age of 26. The United States Department of Health and Human Services is currently in the midst of defining the minimum requirements for the various benefit levels that must be adhered to by insurers and the market.

Your employer is not obligated, necessarily, to keep the exact same plan, and the company has the ability to change premiums, deductibles, co-payments and the doctors in your network.

2. Will I get more incentives from my employer if I lead a healthier lifestyle?

Many employers are choosing to enroll their employees in wellness programs and other initiatives that promote healthier lifestyles. Under the new law, employers do have the ability to adjust contributions and premiums based upon an individual’s participation in these programs. Starting next year, you will start to notice more employers who will be measuring employee participation and providing incentives, and maybe even penalties, in certain situations.

3. Will my insurance company pay for preventative services?

Starting January 2014, consumers will be eligible for preventative services such as breast cancer screening and cholesterol screening, without being charged any out-ofpocket costs. In addition, individuals with preexisting conditions cannot be denied coverage.

4. If I don’t have insurance will I have to buy it?

Beginning in 2014, consumers will be required to purchase insurance, or they will have to pay a fine that will start at $95 a year per adult and $47.50 per child, up to a family maximum of $285 or 1 percent of income, whichever is greater. The penalty escalates each year, and by 2016 the penalty will be a family maximum of $2,085 per year or 2.5 percent of household income. Although stated in annual terms, the penalties are actually assessed for every month that a person goes uncovered.

Consumers will have to indicate on their tax return whether they have adequate coverage, and this will continually be monitored by their Internal Revenue Service to enforce the penalties. For those who cannot obtain coverage, they may end up qualifying for Medicaid.

5. If I can’t buy coverage, am I eligible for Medicaid?

Beginning in 2014, the Medicaid program can be expanded by funding from the federal government so that an indi-

A key component of the Affordable Care Act is that seniors will be able to reduce their responsibility for prescription drug costs in what has typically been known as the donut hole. Seniors will still be responsible for about 25 percent of their prescription drug costs, but the coverage gap will be closed entirely by the year 2020. Seniors will also be able to receive coverage of preventative services, such as screening for colon, prostate and breast cancers, as well as an annual wellness visit. Those individuals in the Medicare Advantage Plan may end up paying more than before since the federal government has reduced payment to those insurance plans managing Medicare Advantage options.

7. How will the new law affect my taxes?

Starting in 2013, individuals making more than $200,000 and married couples making more than $250,000, will pay a Medicare Payroll Tax of 2.35 percent. Also, individuals with a higher income could face a 3.8 percent tax on unearned income, such as dividends and interest. In 2018, the Cadillac Tax kicks in, at which point there is a 40 percent tax on employer-sponsored benefits (this does not include dental and vision), which exceed $10,200 per year, and $20,500 for families. Starting next year there will also be taxes imposed on medical device manufactures, health insurers and a tax on brand name drugs.

8. Will I be able to keep my doctor?

Many insurance companies are now looking at improving efficiencies of their provider networks by closely monitoring the quality of care being delivered by doctors. As a result, it is possible that once the law is fully implemented, some of your doctors may no longer be part of an insurers’ network if they don’t meet certain standards of established criteria. The law also calls for the establishment of accountable care organizations, which is intended to create greater coordination between doctors, hospitals and other practitioners to ensure greater compliance and better outcomes.

9. Will I have to wait longer to see my doctor under the new law?

While there are no immediate changes anticipated in ones’ ability to see his or her doctor, there is a projected shortage of primary care physicians over the next 10 years that could create challenges for the system, as more people will have insurance and are expected to utilize health care services. The government is evaluating options to increase the number of physicians for physician training in order to accommodate the anticipated need.

Click here to view the full article

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 15

Potential Pitfalls of “Free Insurance” with Purchase

By Richard F. Lund, J.D., Vice President, Senior Underwriter, Swiss Re* Recently a major automobile manufacturer has introduced a program offering one year’s free car insurance with the purchase or lease of eligible vehicles. The insurance is automatically included and the cost is borne by the manufacturer. This type of manufacturer-sponsored program has been tried in the past. The long-term viability of such a program remains to be seen but as agents you may have customers that obtain coverage through such a program or you may get questions from insureds. At this point there are many unanswered questions but here are some errors and omissions (E&O) considerations.

The biggest challenges will likely come from the a-typical situation where your customer might suddenly have two automobile insurance policies. This raises some potential E&O implications when the coverage provided substitutes or duplicates coverage that is already in place for an auto or autos owned by the consumer and insured through an independent agent. These policies may also have different levels of limits that the insured may not contemplate.

Another consideration to be aware of is that the free car insurance program may also assert that the policy can be excess of the existing policy already in place. This should be reviewed with both carriers.

Many, if not most, automobile policies provide immediate coverage for newly purchased vehicles with notice requirements to continue the coverage on the newly purchased vehicle. If one of the vehicles obtained in this new program is a replacement vehicle, the consumer has a duty to notify the agent so the coverage can either be continued on the new vehicle or cancelled. If the automobile obtained is a new vehicle and not a replacement, the agent may not be aware of the purchase or lease.

There are several issues that should be of concern: • Are the deductibles and limits the same as the consumer’s other policies placed with the independent agent?

• Do the “free insurance” limits meet the minimum primary requirements for an umbrella or excess policy currently in place which could result in a gap in coverage between the primary policy and the umbrella or excess policy?

• Does the “free insurance” policy match the terms, conditions and coverages of the policy that it replaces including, but not limited to, additional drivers, towing, glass repair, medical payments, emergency road service, uninsured/underinsured motorist, car rental and travel expense, loss of earnings, use of non-owned vehicles, etc.

Does it cover other vehicles owned by the consumer?

• If all vehicles are not covered by the consumer’s company through the independent agency, are there provisions that only apply if all the vehicles are insured with that company?

• Are the consumer’s other autos covered under commercial auto, garage keepers or a similar policy? Are there provisions in those policies that may be in conflict with the “free insurance” policy?

• What happens after the one year policy expires? The customer will have to be alert and diligent in continuing coverage or finding an alternative insurance policy with an independent agent. This could lead to last minute submissions to the agency which could create issues such as gaps in effective dates.

• Upon expiration of the free policy form and placement with another carrier be sure to review the policy for any differences in policy provisions or gaps in coverage and communicate these in writing to the customer.

• What if your insured is required to show proof of insurance and that proof is filed with a state motor vehicle department? Will the “free insurance” provide satisfactory evidence of insurance similar to an SR-22 filing?

This is not an exhaustive list, but only points out some basic issues. So what should you do? If you become aware of a customer who has obtained one of the vehicles under one of these programs, you should immediately discuss with them to determine if there are any areas of concern. Be sure to review their current policy or policies to make sure there are no gaps or conflicts. Make a note of the expiration date and contact them as that date draws near to try to obtain replacement coverage when that policy expires.

It is impossible to anticipate all of the potential issues that could arise as result of this type of program, but by being aware and cognizant of the potential issues, you can help to reduce your exposure to an E&O issue.

This article is intended to be used for general informational purposes only and is not to be relied upon or used for any particular purpose. Swiss Re shall not be held responsible in any way for, and specifically disclaims any liability arising out of or in any way connected to, reliance on or use of any of the information contained or referenced in this article.

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 17

The Cost of (Not) Training

What are you doing to further the career of a young agent you know?

The future of our industry depends on it.

By Dr. Don Wetmore

Help

As a full-time professional speaker for the last twenty years, I have been asked so many times, "How much does your training cost?" I have learned to reply, "Would free be too much?"

Training is not a cost. It's an investment. It really doesn't matter what we pay for an investment. What's relevant is what we get in return. One of the best ways to jeopardize an organization's future in today's world and increase the probability of troubled times is to look at training as a cost and pay the price of not training or provide substandard training that operates only as a BandAid for the training requirements.

It's a simple principle. An organization's staff is where they are currently, in terms of competence and success, in direct relationship to what they know and how well they apply what they know. We all come into this world the same way, broke and naked. (And we all leave the same way: broke, they give us some clothes.) We knew how to do nothing when we arrived but then we learned.

The more we learned and knew and the more we applied what we knew, the greater our success and thereby, the organization's success has been.

Some like to quantify the results from training. Here's a good example. A person being paid $50,000 per year who is wasting just one hour per day is costing the organization $6,250 per year (excluding benefits, overhead, opportunity costs, etc.). If, for example, through one of our Time Management Seminars, that person can learn how to re-capture just one hour per day, that translates into a payback to the organization of $6,250 per year. If there is a group of 25 people involved in the same training and they all receive a similar benefit, the return to the organization is $156,250 per year. (And this does not include other benefits to the organization such as profitability, reduced turnover, improved morale, enhanced teamwork, better customer service, greater creativity, etc.) Over five years, the payback is $781,250. What should an organization invest to achieve that return and payback?

Page 18

Many find it difficult to get the time for training. This is another false economy. (They are so busy doing it the wrong way that they cannot take out a little time to figure out how to do it the right way.) When someone says they cannot afford to take three days out of their next week for training, I know they are looking at training as an "expense", and not as an "investment". Three days out of five is 60% of the week and that would be a big expense. But three days out 365 is a drop in the bucket and if that investment provides just one idea that saves one hour per day, every day, the payback on the investment of three days is over 250 hours just in the next year.

Not so many years ago training, beyond showing employees the basics of doing the job, was an option for most organizations.

Today it is no longer an option. If any of us continues to do what we do the same way, within five years most of us and our organizations will become obsolete. Why? Because our competitors are helping their people to become more effective through training. If we look closely at companies that are doing well in the long run, they almost always have in place a well thought out and executed training program for their people. They understand that the price for not training is the real expense of training.

2013 is promising to be an exciting time to be a Young Agent! IIANM is currently developing a Young Agent Leadership Program, with leadership training and networking opportunities giving them the skills they need to improve and enhance their agencies and their state young agents programs. Through such educational opportunities and association involvement, IIANM will help to develop the next generation of association and industry leaders.

So keep an eye out for some exciting technology, sales and coverage education coming your way.

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

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Dave Garner, Senior Vice President of Swiss Re claims, asked the Hassett Law Firm of Phoenix, Arizona to provide a state-by-state analysis of insurance agents’ duty to advise so that the standard of care, and any associated liability trends, could be better understood on a national level. To accomplish this, Myles P. Hassett, Esq. and Julie K. Moen, Esq. researched the law in all 50 states and Washington D.C., with assistance from Swiss Re lawyers practicing in each jurisdiction, and produced a comprehensive review of applicable standards.

Lucas N. Frank, Esq. of the Hassett Law Firm’s Albuquerque, New Mexico, office also assisted in the compilation of the summary.

Do Insurance Agents have a

DUTY TO ADVISE?

by Myles P. Hassett & Julie K. Moen Consumers expect independent insurance agents to be knowledgeable and professional, and increasingly rely on those agents to obtain the most appropriate policy based on their insurance needs. States also mandate the minimum level of knowledge and ability their agents must exhibit through statutes and regulations that govern agent licensing, solicitation and sales. Yet despite consumer expectations and a high level of regulation, the law in most states doesn’t automatically consider insurance agents to be “professionals” with a duty to advise their customers, similar to attorneys or accountants.

However, in the context of a duty to advise the customer, there is a difference between what the law requires and what best practices dictate. Legal requirements establish minimum standards for agent conduct, while best practices go beyond mere compliance with the law and emphasize a higher level of performance. The duty to advise customers about their insurance needs, when it applies, provides a good example of the difference between legal standards and best practices. As outlined below, different states have established different legal standards for when insurance agents have a duty to advise. However, best practices generally require that independent agents advise customers about their coverage needs so that their choices are properly guided in the increasingly complex world of insurance. As a practical matter, offering coverage to meet all of the customers’ insurable exposures helps to avoid E&O claims, while also maximizing potential agency revenue.

The legal standards for establishing an insurance agent’s duty to advise differ from state to state. Some states hold agents to a professional standard of care that includes an affirmative duty to advise. At the other end of the spectrum, a few states use an order-taker standard that imposes only an obligation to procure requested coverage without any duty to advise. The vast majority of states apply a test that requires finding a “special relationship” before any duty to advise will be imposed on the agent.

These states can be categorized into jurisdictions that make it more or less difficult to establish the predicate “special relationship” before the duty to advise arises. To the right is a map that shows how each state regards the duty to advise.

1. The General Rule: Agents Must Use Reasonable Care, Skill and Diligence.

A review of the law in the 50 states and Washington, D.C. Page 20

reveals that agents across the nation have a similar general duty to their customers to use the degree of care, skill and diligence that a reasonable insurance agent would in the same or similar circumstances to procure the insurance requested by the customer. If the agent cannot procure the insurance, the agent has a duty to notify the customer of this fact in a timely fashion.

Absent a special relationship, the general duty of care in most states does not include an affirmative duty to advise customers about additional types and limits of coverage. A customer’s request for “full” or “sufficient” coverage rarely creates the kind of special relationship that imposes upon the agent a duty to give advice about the types and limits of coverage available, although some courts require agents to clarify the customer’s request in those cases.

2. Professional Standard of Care States.

A few states have adopted a relatively stringent standard of care, in recognition of the fact that agents play an advisory role similar to that of an attorney or accountant. In order to comply with the standard of care in Alabama, Arizona, Idaho and New Jersey, an agent must inform the customer about the existence and advisability of additional types and limits of coverage.

To comply with the standard of care in Maryland and Washington D.C., agents must advise their customers about other types of available coverage. However, absent a special relationship, insurance agents have no duty to advise their

customers about obtaining additional limits of coverage.

the insured to decide.

Pennsylvania splits the duty by line of coverage, requiring agents to advise personal lines customers about other types and limits of coverage. But, absent a special relationship, agents have no duty to provide advice to commercial lines customers. insurance counselors separately from insurance agents.

Counselors are paid specifically to review a customer’s insurance and provide information and advice about additional types or limits of coverage that would best suit the customer’s needs.

B. Independent View of the Special Relationship Test.

3. The “Special Relationship” Test.

Many states agree that to impose a blanket affirmative duty on agents to advise about types and limits of available coverage would reward insureds for taking an “intellectual” gamble purchasing less insurance now (for less money), then later claiming they would have purchased better (and more expensive) coverage if only the agent had advised them to do so. This removes the burden from insureds for determining their own best interests and turns agents into financial guidance counselors. As a matter of public policy most states thus require that the insured first establish from the circumstances that the agent-customer relationship was “special” before any duty to advise can arise.

Courts generally define “special circumstances” as including one or more of the following factors: 1) the agent agrees to advise the customer; 2) the agent accepts additional compensation beyond the premium for the advice; 3) a (long-term) course of dealing between the agent and customer in which the agent is on notice that the customer seeks and relies upon the agent’s advice; 4) the agent holds himself out as an expert and the customer relies on that representation; 5) the customer specifically requests advice; and 6) the agent makes representations about the coverage upon which the customer relies.

The states with no affirmative duty to advise, absent a special relationship, fall into three subcategories: states that tend to find a special relationship, states with no clear preference and states that rarely (if ever) find a special relationship.

A. States That Tend to Find a Special Relationship Between Agent and Customer.

The courts in Florida, Louisiana, Minnesota, New Mexico, Ohio, South Carolina, Tennessee, Texas and Washington liberally interpret the facts with the intention of finding a special relationship. South Carolina also requires agents to explain the coverage and limitations to customers.

Some Louisiana cases assume a limited fiduciary duty between an insurance agent and the insured. But Louisiana has not held that insurance agents have a “spontaneous” duty to advise, absent an agreement by the agent to advise the customer or the agent holding herself out as an advisor.

In Tennessee, an agent cannot omit or reject coverage because he thinks the insured does not need it or will not benefit from it. Instead, the agent must offer the coverage to the insured, advise of its usefulness (if any) and allow

There are many middle-ground states with no clear preference for finding or not finding a special relationship. These include Alaska, California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Maine, Massachusetts, Mississippi, Nebraska, Nevada, New Hampshire, North Dakota, Oregon and South Dakota. Illinois has a statutory duty of care that requires agents to use ordinary care to procure, renew, bind, or place coverage for an insured.

Nebraska and Oregon require agents to explain coverage and limits to customers, but Oregon has not yet ruled on whether agents must advise customers about which coverages or limits to purchase.

C. Conservative View of the Special Relationship Test.

Some states have conservatively set a high bar for finding a special relationship, rarely finding that the facts establish a special relationship. These states include Arkansas, Georgia, Michigan, Missouri, New York, North Carolina, Oklahoma, Vermont, Virginia, Wisconsin and Wyoming. In fact, New York courts have yet to find the existence of a special relationship establishing an agent’s duty to advise his customers.

These states also generally require the insured to have specifically requested the insurance she claims the agent failed to procure. A request for “full” or “adequate” coverage, or the “best coverage available,” does not generally create an obligation for the agent to seek out or procure a specific type of insurance for the customer.

4. Order-Taker States.

Some states do not impose an affirmative duty to advise and make no exception for the existence of a “special relationship.” Instead, the agent’s only obligation is to procure the coverage requested by the customer and timely notify the customer if the agent cannot obtain the insurance.

Even the existence of a fiduciary relationship imposes no additional duty, so that the agent is still only responsible for procuring the coverage requested by the insured These order-taker states are Montana, Rhode Island, Utah and West Virginia. Even in these states, however, agents may be liable if they provide incorrect or misleading information.

5. Conclusion.

Our research indicates that the general trend is moving toward the imposition of professional standards of care by the courts, guided in many instances by the use of a predicate “special relationship” test before imposing an affirmative duty to advise. Prudent agents are responding to this trend by promoting best practices and awareness of the insured’s needs.

Independent insurance agents should accordingly not content themselves with minimally-compliant conduct that merely satisfies legal standards, but should instead aim to provide service that exceeds these standards, consistent with the goals of earning and keeping customer trust and confidence.

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 21

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Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Looking for Instructors

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Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 23

IIANM’s 2013 Calendar

(tentative)

January

1st

Office Closed - New Year’s Day

8th & 9th

Property & Casualty License Exam Review

Kitty Leslie

IIANM

10th

Life & Health License Exam Review

Bob Ouellette

IIANM

21st

Office Closed - Martin Luther King Day

30th

Legislative Mixer

La Posada, Santa Fe

February 5th & 6th

Property & Casualty License Exam Review

Jack Cleary

IIANM

7th

Life & Health License Exam Review

Jeff Straight

IIANM

18th

Office Closed - Presidents Day

20th

AAI 83A Principles Agency Management (8 CE hrs)

Jeff Straight

21st

AAI 83B Agency Company Relations (8 CE hrs)

Jeff Straight

March 5th & 6th

Property & Casualty License Exam Review

Kitty Leslie

IIANM

7th

Life & Health License Exam Review

Bob Ouellette

IIANM

14th

ACSR #1 Homeowners (8 CE hrs) Jack Cleary IIANM

19th & 20th

53rd Annual Education Seminar (15 CE hrs)

29th

Office Closed - Good Friday

Crowne Plaza Hotel

April 4th

ACSR #2 Personal Auto (8 CE hrs)

Jack Cleary

IIANM

9th & 10th

Property & Casualty License Exam Review

Jack Cleary

IIANM

11th

Life & Health License Exam Review

Jeff Straight

IIANM

24th

AAI 83C Agency Financial Management (8 CE hrs)

Jack Cleary

IIANM

25th

ACSR #8 Commercial Auto (8 CE hrs) Jeff Straight IIANM

May 1st

ACSR #3 Personal Lines Related Coverages (8 CE hrs)

Jeff Straight

IIANM

2nd

ACSR #9 Commercial Lines Related Coverages (8 CE hrs) Jeff Straight

IIANM

7th & 8th

Property & Casualty License Exam Review

Kitty Leslie

IIANM

9th

Life & Health License Exam Review

Bob Ouellette

16th IIANM/NMM Golf Tournament tbd 27th

Office Closed - Memorial Day

June 4th

ACSR #7 Commercial Liability (8 CE hrs) Jeff Straight IIANM

5th

AAI 81A - Principles of Insurance (8 CE hrs)

6th

ACSR #4 E&O Loss Control (8 CE hrs) Jack Cleary IIANM

25th & 26th

Property & Casualty License Exam Review

Jack Cleary

27th

Life & Health License Exam Review

Bob Ouellette

Jack Cleary

IIANM IIANM

July 4th

Office Closed - Independence Day

9th

AAI 81B - Personal Lines (8 CE hrs) Jack Cleary IIANM

10th

AAI 81C Special Commercial Lines (8 CE hrs)

Jack Cleary

IIANM

16th & 17th

Property & Casualty License Exam Review

Jack Cleary

IIANM

18th

Life & Health License Exam Review

Jeff Straight

IIANM

30th & 31st

Southern Seminar (15 CE hrs)

Las Cruces

August 6th & 7th

Roswell Seminar (15 CE hrs)

Jeff Straight

8th

Life & Health License Exam Review

Bob Ouellette IIANM

13&14

Property & Casualty License Exam Review

Kitty Leslie

IIANM

15th

ACSR #5 Professional Development (8 CE hrs)

Jeff Straight

IIANM

26th & 30th

Last Chance Seminar (15 CE hrs) (tentative)

Roswell

September 2nd

Office Closed - Labor Day

3rd & 4th

Property & Casualty License Exam Review

Jack Cleary

5th

Life & Health License Exam Review

Bob Ouellette IIANM

18th and 19th 79th Annual Convention (tentative)

IIANM Sandia Casino

October 9th & 10th

Property & Casualty License Exam Review

Kitty Leslie

IIANM

11th

Life & Health License Exam Review

Jeff Straight

IIANM

IIANM

November 5th & 6th

Property & Casualty License Exam Review

Jack Cleary

7th

Life & Health License Exam Review

Bob Ouellette IIANM

27th & 28th

Office Closed - Thanksgiving

December 5th

IIANM Holiday Party

IIANM

10th&11th

Property & Casualty License Exam Review

Kitty Leslie

IIANM

12th

Life & Health License Exam Review

Jeff Straight

IIANM

24th & 25th

Office Closed - Christmas

Join the Cause

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Seven Keys to a Powerful Sales Presentations 1) Make your presentation

by John Chapin

interesting and to-the-point.

Your presentation needs to catch and keep the prospect's attention and interest. Make it interactive. Ask the prospect questions and involve her in ways that make her an active member in the proposed solution. Use interesting examples and stories that mirror her situation and spell out how others have benefited from using you and your company in similar situations.

2) Deliver your presentation with energy, enthusiasm, and emotional logic.

You need to show energy, enthusiasm, and excitement for your product. At the same time, you don’t want to overwhelm the prospect with too much energy and excitement. If your prospect is a high-energy individual, match their energy level. If your prospect is more subdued, show energy and excitement that is one level above theirs.

In addition to showing energy and enthusiasm, you need to back your presentation up with logic. Remember: people buy on emotion and justify their decision on logic.

Bottom line: Put life, energy, and enthusiasm in your voice, and make sure your sales presentation makes good logical sense.

3) Address the specific needs, desires, and

concerns of the prospect, and speak to her hot buttons.

Each presentation will be different because each prospect has different needs, desires, and concerns. If you’ve done your work properly during previous calls, you understand what the prospect is looking for and you’ve uncovered some hot buttons. You will now educate the prospect on how your product or service fills her unique needs and desires. Show caring, understanding, and empathy for the prospect, and show that you are seriously interested in helping her out.

Make sure you focus on the benefits and what’s in it for the prospect. Features are fine, but you must articulate what those features mean to the prospect with regard to what is important to him or her.

4) Deliver your presentation in a clear, concise, and articulate manner.

Your sales presentation should be easy to understand, to the point, and it should be delivered in terms that the prospect will understand. You want to use as few words as possible while at the same time, using the most effective words possible. Also, no acronyms or other terms

and phrases that the prospect may not be familiar with.

Finally, keep your initial presentation to a maximum of three solid points. If you overwhelm the prospect with too many points, you will probably hear, “I want to think about it” or “send me some information.” If you have other legal items and disclosures that you have to cover, save those for the paperwork phase after the prospect has decided to buy.

5) Your presentation should lead naturally to the close.

Your sales presentation should be designed in such a way that it walks the prospect smoothly through the presentation, addressing all needs and concerns, and flows right into the close. If your presentation is straight-forward, conversational, and covers all the bases, the close is simply the natural conclusion of the presentation.

6) Have a presentation script.

While each presentation will be different based upon the individual prospect’s needs and desires, most of the pieces remain the same, you’ll simply use different ones and arrange them differently. Each feature and benefit, story, and piece of information you need to convey, must be well thought out, well prepared, written down, committed to memory, and most important, proven to work. Some people believe that having a written presentation is too unnatural—you may sound as though you are reading (if on the phone), or canned (if in person). The way to avoid this is by practicing, drilling, and rehearsing your presentation pieces to the point where you know them verbatim.

The goal of a script is to make sure you cover everything you need to cover in as few words as possible while at the same time, using the most effective words possible.

Writing out each piece of your presentation and committing them to memory will ensure consistency throughout your presentation, it will also help identify any problems with your presentation.

Note: Don’t reinvent the wheel, get a presentation script that you know works from one of the top people. You want their results, so use what they use.

7) Continuously update and improve your presentation.

The pieces of your presentation can always be better and you can always be more effective, so keep working on your presentation, keep honing it, and keep improving it.

You can always use more effective words, examples, and get better at delivery.

Visit John’s website at http://www.completeselling.com

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 27

Leasing: A Seamless Customer Experience

But don’t take it from us. Listen to your peers.

Agents Express Leasing is an effective solution to manage your clients needs with today’s best equipment technology. Jay Byrnes of Byrnes Agency experienced how easy our leasing solution is for his agency: “As a longtime member of the “Big I”, I always knew of InsurBanc and their commitment to the independent insurance agent. Recently we wanted to update the agency with a new computer network and desktops, so I turned to InsurBanc for leasing options.

From start to finish I experienced firsthand how seamless it was to conduct business with them. We have a 35 person agency so to update everyone’s computers was a decent size upgrade. InsurBanc made the process very easy and offered attractive terms and competitive rates which helped to manage the agency’s cash flow”.

– Jay Byrnes ~ Byrnes Agency How it works: • Lease terms are 24, 36, 48 or 60 months with a minimum transaction of $5,000 • You can finance most out-of-pocket expenses, such as installation, freight, software and training • No down payments or advance payments are required • Monthly payments can be customized to meet your special business needs

We invite you to see for yourself. Contact us today for help preserving your cash flow with an equipment lease solution.

Agents’ Express Leasing is a program of De Lage Landen Financial Services, Inc, benefitting InsurBanc clients. Lease financing is subject to lessee credit, vendor, and equipment approval by De Lage Landen. This is not a commitment to lend. Other terms and conditions may apply.

Member FDIC 11INR051

10/11

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by Wes Bissett, Senior Counsel of Government Affairs Educate Congress on Insurance

Hot Topics on Capitol Hill

On the Hill NCOIL Passes Certificates of Insurance Model Act Big “I”-endorsed effort clarifies and improves certificate process.

Recently, the National Conference of Insurance Legislators adopted the “Certificates of Insurance Model Act” during NCOIL’s annual meeting in Point Clear, Ala. The model is based in significant part on the legislative template initially developed by the Big “I” in 2010, and the association assisted NCOIL in the development and adoption of this proposal.

A certificate of insurance is an informational document that provides a courtesy snapshot of an insurance policy and useful information about the coverage in place, and the model responds to the serious certificate-related problems that confront many agents and brokers today.

Many third parties exploit their marketplace leverage to demand the issuance of certificates that do not accurately reflect the underlying insurance policies. The model is designed to eliminate such behavior and ensure that certificates are utilized for their intended purpose.

Addressing the improper use of certificates has been a Big “I” priority in recent years, and the Big “I” has successfully secured the passage of laws similar to the new NCOIL model in numerous jurisdictions.

This action is the latest step in that national effort and NCOIL’s action is expected to bolster these ongoing advocacy efforts.

The model act addresses certificate issues in a number of ways, including:

Filing of certificates. The model law requires certificates of insurance to be filed with state insurance regulators prior to use, and state regulators have the authority to disapprove forms that are unfair, misleading, deceptive or against public policy.

Current editions of ACORD, AAIS and ISO certificate forms are not subject to this requirement. Any certificate forms containing specific content and wording established by federal or state law also do not need to be filed.

The model only permits forms to be filed by or on behalf of an insurer, and there is no mechanism for non-insurers to submit their own proposed certificate forms.

Restrictions on issuance. The model law prohibits any person from preparing or issuing a certificate of insurance that contains false or misleading information concerning the underlying policy or one that purports to alter, amend or extend coverage. A certificate also may not warrant that the policy referenced in the certificate complies with the insurance or indemnification requirements of a particular contract.

Application to third parties: In an effort to help eliminate or reduce requests for improper or misleading certificates, the model law applies specific requirements and extends the jurisdictional reach of state regulators to third parties who make such requests. Specifically, the model prohibits a person from requesting or requiring the issuance of a certificate that contains false or misleading information concerning the underlying policy; purports to alter, amend or extend coverage; or is issued on a form not filed with the commissioner.

State regulators are also given the authority to issue ceaseand-desist orders and fines against third parties who violate these requirements.

Status of certificates. In an effort to further reduce any incentive that a party might have to request an improper certificate, the model confirms that a certificate is distinct from an insurance policy and codifies the principle that a certificate does not alter, amend or extend coverage or independently confer rights. The model also provides that any certificate issued in violation of the act is null and void.

The Big “I” publically thanked NCOIL for its action on this important issue, especially Kentucky State Representative Steve Riggs, NCOIL’s Property-Casualty Insurance Committee chairman, for his leadership.

Independent Insurance Agents of New Mexico - www.iianm.org - * January 2013

Page 29

January 2013 Sunday

Monday

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Pre-licensing Class

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NM Legislature Begins 2013 Session

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New Mexico’s Job Bank Looking to fill a position within your agency? Trying to find a job but don’t know where to look?

Whether you are looking for somewhere new to share your special skills or an employer looking for quality, professional employees, we are here to lend a helping hand.

Click here to take advantage of IIANM’s Job Bank.

Do you have an agency you’re trying to sell, or in the market to buy one? Check out our Classifieds!

The word soup, according to

January

Wikipedia, comes from the French word ‘soupe’. The word is actually Germanic in origin... from the word “sop”- a piece of bread used to soak up the broth of stew.

S up

Nation

al

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Soup is popular throughout the world. In the U.S. alone, Americans eat about 2.5 million bowls of Campbell’s tomato, cream of mushroom, and chicken noodle soups each year. In U.S. restaurants, the most popular soup orders (according to the Chew and Chat blog) are: • Chicken noodle • Clam chowder • Tomato

Always be a first-rate version of yourself, instead of a second-rate version of somebody else.

• Vegetable • French onion

~Judy Garland

Across the globe, the most popular soups include: • Chicken noodle (U.S.)

Simple Ideas for Inexpensive FUN

• Miso (Japan)

If you’re resolving to save a little cash in 2013, check out these simple tips for spending less this year:

• Gazpacho (Spain)

• Rent a classic movie instead of going out to see a new release.

• Dahl (India)

• Go on a picnic in the park instead of a meal in a restaurant.

• Visit museums on free days. (Most museums and other attractions have them from time to time.)

• Minestrone (Italy) • Hot and sour soup (China) • Borscht (Ukraine, Russia, Poland) • Tortilla soup (Mexico) • French onion (France)

• Take a bike ride for relaxation and exercise.

• Leek and potato (Ireland)

• Pick your own fruit in the summer and fall for a fun outing and store for later.

Some surprising facts about U.S. cash.

• The biggest bill. The highest U.S. denomination is the $100,000 bill, bearing the likeness of Woodrow Wilson and the largest bill in public circulation is the $10,000 bill, bearing the face of Salmon P. Chase.

• The smallest bill. Paper money was first introduced in the U.S. during the Civil War to combat a shortage of coins. Bills were printed and distributed in denominations of 20 cents, 25 cents, and 5 cents.

• Ceviche (Portugal, Spain)

Popular New Year's Resolutions These New Year's resolutions are popular year after year. Find resources to help you achieve your goals: • Drink Less Alcohol • Eat Healthy Food • Get a Better Education • Get a Better Job • Get Fit

• Groovy coins. A dime has 118 grooves along its edge; a quarter has 119. Ridges originally were added to make counterfeiting difficult; today they mainly serve the purpose of helping people with impaired vision to identify coins by touch.

• Lose Weight

• The weight of wealth. One million dollars in one-dollar bills would weigh about 2,040 pounds; in 100-dollar bills, that cool million would weigh in at about 20.4 pounds.

• Quit Smoking

• Old vs. new money. A dollar bill typically lasts about 18 months in circulation before being “retired.” Five-dollar bills endure for about two years. Fifty- and hundred-dollar bills hang on for nine years.

• Manage Debt • Manage Stress • Reduce, Reuse, & Recycle • Save Money • Take a Trip • Volunteer to Help Others

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