2012 February La Voz

“La Voz� is the official monthly publication of the

"The Voice" of Independent Agents since 1934

Independent Insurance Agents of NM

a L

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. 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.

Advertising rates are available upon request.

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

IIANM Staff President/CEO Thom Turbett Vice President Lorri Gaffney Communications Director Rachel Sheffield Insurance Programs Administrator Julie A. Franchini Member Services Associate Renee Trujillo

2012-2012 Officers

Features

o VZ

Thank You 2012 IIANM Company Partners

04

2012 Spring Seminar!

07

Featuring The Republic Group - Farm & Ranch

08

Earning A Return on Agency Loyalty

11

Economics Overshadows Underwriting

14

New Mexico Mutual Prevails in Contentious Legal Battle

16

Insuring Personal Trusts

19

Industry Tidbits - Allstate

21

How Credible is Your Website?

23

7 Tips to Hiring Right the First Time

24

Agents Want More Carriers to Use Real Time Systems

27

Align Advertising

28

In Every Issue Tech Talk

12

Education Edge

30

ABEN - The Next Big Thing in Continuing Education

31

February's Clickable Calendar

32

Odds n Ends

33

Advertiser Index Acuity

22

Chair Scott Jones

American Mining Insurance Company

15

Burns & Wilcox

06

Vice-Chair PJ Wolff

Litchfield Special Risks

18

Market Finders, Inc.

10

Secretary/Treasurer Diana Hobbs

MexiPass International Insurance Services, LLC

25

National Director Sam Conlee

Mountain States Insurance Group

20

New Mexico Mutual

02

Immediate Past Chair Kathy Yeager

THANK YOU

2012

independent insurance agents of new mexico

Partners Program

Bridge the gap between your clients’ exposures and their protection.

It starts with the breadth of our product knowledge. And extends to our unparalleled access to markets. At Burns & Wilcox, our experts possess the resources to protect your clients against any risk. From Property to Excess, Professional to Environmental, we can handle your clients’ exposures no matter what industry they are in. Plus, our quick quoting capabilities can grant them protection in no time. That way, if a mistake does happen, it will be water under the bridge.

Albuquerque, New Mexico | 505.822.0018 toll free 866.643.8538 | fax 505.822.0092 scottsdale.burnsandwilcox.com • Commercial • Personal • Professional • Brokerage • Binding • Risk Management Services

Get a jump start on obtaining your required 15 hours of continuing education!

No testing!

Welcome to the Independent Insurance Agents of New Mexico's

52nd Annual Spring Seminar

This seminar is designed to specifically meet the annual continuing education requirement for licensed NM insurance agents.

We encourage you and your staff to join us on

March 21st & 22nd, 2012 at The Albuquerque Sheraton Airport Hotel.

This two-day program offers educational opportunities, a great Trade Show with industry exhibitors, and provides a venue for industry professionals, agents, CSRs and company representatives to network.

Career Tracks

DayONE March21

DayONE March21

DayTWO March22

DayTWO March22

morning

afternoon

morning

afternoon

Commercial Lines

Cyber Liability

Boiler & Machinery

(It’s Not What It Used To Be)

Business Income ---------Commercial Inland Marine

Commercial Property

Betsy Carlson

Paul Walden

Jeff Straight

Jeff Straight

Personal Lines

Personal Auto

PL Related Coverages

Mobile Home Personal Umbrella HB Business

Flood

Jeff Straight

Jeff Straight

Bob Pratte

Jack Cleary

Business/Insurance Technology

Agency Optimization

Agency Management

&Health

Life

Websites Decoded

Doug Johnston

Paul Martin

Ted Baker

Ted Baker

Risk Management & Insurance

Improving Your Insurance Skills

E&O / Loss Control

Disaster Planning & the Insurance Marketplace

Chris Krahling

Chris Krahling

Jack Cleary

Bob Pratte

Upcoming Exchanges COBRA Update ---------& the Impact on Small Latino Health Solutions Business Owners Carole Henry

Ethics

C.A.P. Presentation Making Technology (Consumer Agent Portal) Work For You

Dr. Carlos Assante

Employee Benefit Planning

What You Don’t Know About Life Insurance

Joan Buckner

Michael Stark

4:00pm - 5:00pm

4:00pm - 5:00pm

Register Exhibitors Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

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IIANM’s Company Partner

SPOTLIGHT

Farm & Ranch

the liability limits of the Farm and Ranch Policy if you suffer a liability loss greater than your primary coverage. This policy can also extend coverage over the Farm Auto and Workers’ Compensation – Employers’ Liability Policies.

You love it out here and so do we.

Our roots date back to 1903, and we understand Farm and Ranch. While standard insurance products may not provide adequate protection, our team of rural experts specifically designed policies to insure your unique needs as a farm or ranch owner.

Farm & Ranch Policy Every farm and ranch is different, that’s why our Policy offers you flexible coverage for Residential, Farm Property and Liability.

• Residential covers your residence, related private structures, personal property and additional living cost in the event of a covered loss.

• Farm Property covers your barns, tenant dwellings, machinery, tools and livestock.

• Liability provides protection for personal and farmrelated operations.

Equipment Breakdown Equipment breakdowns can sidetrack your success. That’s why you need protection that covers mechanical and electrical breakdown of farm and home equipment and appliances, including air conditioners, refrigerators, hot water heaters, TVs and other media systems, computers, generators, compressors and well pumps. We also offer coverage for upgrades to efficient “green” improvements when a breakdown occurs.

Equine Coverage We are dedicated to protecting your equestrian investment.

Our Equine Liability coverage offers you peace of mind for operations ranging from private saddle animals to boarding, breeding, and training. In addition, our property coverage and enhancements protect your facilities.

Farm Business Auto

Identity Recovery

Farm vehicles are an essential part of maintaining your farm or ranch investment. Our comprehensive coverage protects your farm vehicles, private passenger vehicles, sport utility vehicles and personal pickup trucks.

Should you experience the misfortune of identity theft, we stand ready to assist with practical support. We insure up to $15,000 and go beyond by offering personal attention through case management services to help you recover your identity.

Farm Umbrellas

Underwriting

Accidents happen, especially on farms and ranches. Our Farm Umbrella gives you an extra layer of protection above

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Your Farm and Ranch team at Republic is headed by Roll

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Wagner. Our New Mexico Underwriter is Blake Deaton and underwriting support is provided by Kat Krasner and Wes Lockwood.

Contact Casey Dove, your Marketing Representative, for more information about our products and target market segments.

Financial Strength The companies of The Republic Group are rated A(Excellent) by A.M. Best Company The rating of Excellent is assigned to companies that have excellent financial strength, operating performance and market profile. In the opinion of A.M. Best Company, we have strong ability to meet our ongoing obligations to policyholders. A.M. Best is the leading authoritative source of insurance company ratings based on financial strength and operating performance.

“The Republic Group� is an industry designation for a group of affiliated insurance companies which provide personal and commercial property and casualty insurance products. Visit www.RepublicGroup.com for more information.

Companies of The Republic Group include: Republic Underwriters Insurance Company Republic Fire and Casualty Insurance Company Republic Lloyds Republic-Vanguard Insurance Company Southern County Mutual Insurance Company Southern Insurance Company Southern Underwriters Insurance Company Southern Vanguard Insurance Company

The Republic Group 5525 LBJ Fwy Dallas, TX 75240 RepublicGroup.com

New Mexico Marketing Representative:

Casey Dove casey.dove@republicgroup.com

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

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Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Earning A Return on Agency

LOYALTY

by, JoAnna Brandi

By making customer loyalty a priority,

agencies are better positioned to reap long-term benefits including steady profits.

H

ave some New Year's resolutions regarding career or business success? In today's high-speed, competitive market you'd be crazy not to—and even crazier not to keep customer loyalty front and center of your intentions.

Former Dell CIO Jerry Gregoire alluded to the critical importance of achieving customer loyalty when he said, "The customer experience is the next competitive battleground."

Amen! The customer experience makes or breaks customer loyalty. With so many choices today, it's the quality of the experience—how you repeatedly make your customers feel at each and every touchpoint—that will determine whether or not they'll come back, purchase more, and refer their colleagues and friends to you.

It's all about your customers' perception of the value you deliver, both tangible and intangible. You may think you know the kind of customer experience you're delivering, and that your customers share your views. You may think that because your customers stick around and don't complain they are loyal.

In fact, you may be mistaking customer inertia for loyalty.

It's easy to do. Remember that loyalty is a genuine emotional attachment that occurs when your customers appreciate the value of your product or service, as well as the way you deliver it. Because they repeatedly feel powerful, positive emotions in dealing with you they'll choose you above your competitors—even if they have to go out of their way or pay a bit more.

Yes, strong customer loyalty pays. It puts your business into a profit-building cycle in a number of common sense ways: • Loyal customers buy more and are often willing to pay more. This creates a steadier cash flow.

• Loyal customers refer others to your business, saving you the marketing and advertising costs of acquiring customers.

• Loyal customers are more forgiving when you make mistakes—even big ones (especially if you have a system in place that empowers employees to correct errors on the spot.).

• A loyal customer's endorsement can surpass the most extravagant marketing efforts. Proof of the pudding: A lowbudget film can become a blockbuster hit thanks to positive word of mouth. Mega stars and publicity blitzes can't prevent high-profile films from tanking. The “word on the street” is more powerful.

• Thriving companies with high customer loyalty usually have loyal employees—and loyal employees save you money in a variety of ways. You don't have to spend money attracting, hiring and training new employees, and you have knowledgeable people at all levels of the organization serving the customers and each other. And those employees get very smart over time. In a culture that values them and their contributions, they can be responsible for countless system improvements and millions in savings.

• Thriving companies with high customer and employee loyalty are generally known to outpace their competitors in innovation. In addition, their cultures support continuous learning. In today's market, if you're not continuously learning and innovating, there's no question that you're falling behind.

• Loyal customers understand your processes and can offer suggestions for improvement. Their feedback can help with R&D efforts as well as improvement efforts.

• Profits, profits, and did we say profits? An increase in your retention of customers can boost your bottom line profit significantly, depending on your fixed costs.

JoAnna Brandi is a consultant, speaker and author of two books on customer loyalty.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

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by, Steve Anderson

Home Inventory Services

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remember the first time I had to tell a homeowners client who had a fire that they would have to provide an inventory list of all the items that were destroyed to the insurance company adjuster as part of the claims process. Like most people, they had never created an inventory and had no idea where to start.

individual items to the secure platform.

There are a number of Internet-based home inventory services available that allow clients to track their "stuff."

Archive Your Home is one example, but with a nice twist.

It is a web-based home inventory system specifically designed for P&C agents to provide to their homeowners and renter insurance clients as a free service for doing business with the agency.

The monthly cost of the service is based on the number of clients using it and starts at $10 per month for up to 25 clients. Providing this service (and promoting it) can help set you apart from other agents.

Once signed up, the agency receives a unique website link so you can brand the service with your own agency logo and contact information, which a client will see each time they log in. Individual producers and/or CSAs can also be added and their contact information will display on the client screen.

Once a client creates an account on the agency-branded site, they can add individual items to their personal inventory. They can also upload pictures of entire rooms or

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In addition, agents are able to generate a summary dollar report (but not individual items) on their clients’ total assets, which they can then use to speak with them about policy coverage amounts.

Here are several companies that you can compare: • • • • • •

Archive Your Home My Personal Data Safe American Home Inventory Protection Asset Watch Custom Home Inventory Quality Home Inventory Service, Inc.

IIABA also has a Trusted Choice ® Mobile App that has a home inventory feature, along with many others. Check it out at: www.projectcapmarketing.com

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

C

Project CAP Is Here! onsumers are searching online for insurance solutions. They demand information quickly, but they also expect the quality service you have built your business providing. That’s where Project CAP comes in.

Project CAP aims to help you navigate the world of Internet marketing. If your agency website could use an update, Project CAP is for you. (Maybe you have yet to create a website.) If you don’t know the difference between a blog and a tweet, Project CAP is for you. If a phrase like ‘Search Engine Optimization’ makes your eyes glaze, Project CAP is for you.

Choose a Plan that’s Right for You With Project CAP, there are many options to choose from: • Free Bronze program offers a complete overview of online marketing with content and tools you can start using right away.

• Silver and Gold packages build on the free resources with even more education for you and a content library for your customers, among other things.

• Full-service Platinum and Diamond programs are with you every step of the digital way, from personal consultation and social media, to custom blogs and email marketing.

• QuickStart packages will advance your online presence immediately and provide free prospects for a one-time fee. (Promotion ends February 17!)

An exciting new Trusted Choice® Mobile app customized for your agency can boost your credibility in this smartphone age.

With it, consumers can dial or email you with one touch, create a home inventory, document an accident and more.

No matter which plan you choose, you’ll have access to the Consumer Portal where insurance consumers can: • Learn more about the insurance they’re shopping for • Get an auto insurance quote • Find an agent in their area (you pay a nominal fee for prospects) It’s a new year and there’s a new way to find and serve customers. It’s called Project CAP. If you want to find out more, IIANM will offer a 3 hour class about CAP at our Annual Spring Seminar in Albuquerque on March 21st (including CE credits!).

The time is now to take action. Implementing CAP will take some time, some investment and some planning, but the benefits could be huge, especially for early adopters. Visit ProjectCapMarketing.com and get started today.

T

High Number of Small Data Breaches

he American Health Information Management Association (AHIMA) recently published an article in the Journal of AHIMA about so-called “small data breaches” reported to Health and Humans Services (HHS) and the Office of Civil Rights (OCR). These are defined as breaches of less than 500 patients and for covered entities, but not for business associates and sub-contractors.

Breach reporting is a provision of the HITECH Act, which modified HIPAA to require that covered entities report breaches of unsecured protected health information to Health and Human Services (HHS).

Breaches involving 500 or more people must be reported within 60 days of their discovery. HITECH directs HHS to publish these reports on its website. (It also requires covered entities to notify the affected individuals and the major media in the region.)

Covered entities must report breaches affecting fewer than 500 individuals annually, within 60 days of the end of the calendar year in which the breaches occurred. HHS is not required to publish these reports; HITECH only stipulates that the department compiles them for annual reporting to several Congressional committees.

In a written justification of its 2012 budget request, the Office for Civil Rights reports that as of September 30, 2010, it had received 9,109 reports of breaches affecting fewer than 500 individuals. That represents one complete year of reports—an average of 25 reports per day.

This highlights the fact that data breaches are occurring at alarming rates for smaller businesses. The breaches reported to HHS are only for HIPAA-related breaches. In sheer number, the reports of “small” breaches swamp those of the muchpublicized large breaches.

This highlights the fact that virtually every one of your commercial clients needs to be made aware of the exposure they face for a data breach. To learn more about data breach requirements for insurance agencies, sign up for our ‘Cyber Liability” class at our Annual Spring Seminar.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

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Source: A.M. Best

Economics Overshadows Underwriting as January Renewals Open New Year

W

ith the exception of catastrophe-prone accounts, Jan. 1 reinsurance renewals appear to have been muted, and economic conditions may drive the global reinsurance market in 2012 more than underwriting concerns, according to industry participants.

Brian Boornazian, chief executive of Aspen Re, voiced the frustration of reinsurers about current conditions in a Jan. 3 conference call. Boornazian said significant changes to key catastrophe models, along with record low investment yields and pricing, should lead to a hardening trend.

"What actually happened on Jan. 1 is that we saw a market hardening in certain lines, but not a 'classic' hard market," he said. "The signs all point to an industry awareness that the risk being assumed needs more rate to produce adequate returns. The insurance and reinsurance markets are starting to accept the need for change. But, so far, only cat-exposed and loss-affected contracts are experiencing any significant improvement to rates."

Boornazian said the market is "beginning to adjust" to the several ongoing factors that would all, individually, necessitate a market hardening. "But we are still only at the beginning," he said. "More change is needed to reach rate levels that are adequate for exposures, and the other external factors that affect our industry's profitability."

He added that in many areas, pricing remains at, or below, 1999 levels.

In its reinsurance market outlook for 2012, broker Aon Benfield said reinsurers were critical to supporting primary insurers throughout 2011 and its series of big natural catastrophes. Despite the losses, reinsurance capital "remains strong and competition still exists in the reinsurance market for program participants."

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Broker Willis Re said in its "1st View" report that "outside of a few specific problem areas, rates at Jan. 1, 2012 for long tail-classes have remained unchanged. Some reserve releases are still coming through from earlier underwriting years to help cushion quarterly results, but there is an increasing divergence among reinsurers, as some are increasing reserves for catastrophe losses earlier in the year and a few are posting increases for asbestos-related claims."

The story of 2011 was one of catastrophes, capital, reserve releases and the economy, said Key Coleman, managing director at consultancy Grant Thornton LLP. "If you were to say at the beginning of last year that the industry would have $100 billion of cat losses and see only a tentative market hardening, some reinsurers might have questioned your credibility," he said.

Coleman said capital was a big part of the way the year played out for reinsurers. The market started the year with about half a trillion dollars in capital, and "once the dust settles from the fourth quarter, we'll probably end up in about the same place," he said. "That probably puts some downward pressure on rates," he said.

Catastrophe-exposed accounts will see significant price increases, said Coleman. But other lines will be less affected, except by non-underwriting factors.

Aon Benfield said preliminary experience from Jan. 1 renewals show that "the capacity required by clients ... was achieved at accretive prices, terms and conditions."

The broker noted that certain factors led to a muted January renewal season. Among them, some of the largest catastrophe-hit accounts won't renew until April, June or July.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Aon Benfield also noted that some catastrophe-exposed insurers in Western Europe and the United States shifted catastrophe cover demand to the capital markets in the form of catastrophe bonds, where pricing is more predictable. Other insurers appear to be waiting until some of the market uncertainty clears, the broker said.

Both Aon Benfield and Willis Re said significant changes in catastrophe models do not seem to have driven pricing significantly.

Continuing low investment income and a dwindling of reserve redundancy releases that marked 2011 and previous years will have negative effects on reinsurer income, said Coleman. "There's not going to be that sort of 'get out of jail free' card in 2012," he said.

A dampened economic climate will work against underwriting profit as well. Coleman noted that with workers' compensation, for example, claims could rise as people lose their jobs. Workers who might have been reluctant to file a claim will more likely do so if they lose their job.

Coleman said January renewals showed a predictable hardening of rates in catastrophe-hit areas and those exposed to catastrophes that hadn't been it in 2011. But for the rest of the nonlife lines of business, rates are not moving much.

Asked about the 2012 renewals rounds yet to come, he said there should be some stability, but "the jury's still out" on possible hardening of rates.

Willis Re said in its report that the market "is increasingly segmented with rate movements being driven by individual loss history and perceived exposure movements and not by an overall blanket increase.

"While this is a superficially logical approach, it has led to significant differences in rate levels which some buyers have found difficult to assimilate as they struggle to manage the margin between their original pricing and the cost of reinsurance," said Willis Re. "At the same time rate increases are largely being driven by an immediate earnings challenge and not the classic capital shortage of an historic hard market rating turn."

Willis Re added it is "unclear" whether the reinsurance market will see a sustained hardening trend. Economic factors outside the underwriting cycle look to be important factors.

"The key to a sustained market hardening is much more likely to lie in the impact of the current economic turmoil in the euro zone and elsewhere and how this works through to diminish the capital bases of reinsurers," Willis Re said.

“insurance from people who know mining”

I n s u r a n c e for: We offer Workers’ Compenasation Insurnace

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Coal mines: surface and underground coal truckmen

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other types of mining mining related risks

For more information, contact Bryant Brown, V.P. Marketing • 1.800.448.5621, x 249.

3490 Independence Drive • Birmingham, Alabama 35209 WWW.AMERICANMINING.COM Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Page 15

New Mexico Mutual Prevails in Contentious Legal Battle Although a number of similar businesses exist in New Mexico, and several have switched insurance agencies or

by Thom Turbett

I

carriers after hearing this pitch; this particular legal case involves only one such company: Three Rivers Trucking,

nsurance agencies in New Mexico that specialize in oil &

Inc. of Farmington, NM (which we will refer to as “TRT’).

gas accounts have been following a legal battle for

almost three years now. It’s a complicated case that has

This case effectively began in March of 2009, when TRT’s

stirred up a lot of controversy, debate, and unfortunately, a

insurance agent asked their carrier, New Mexico Mutual, to

good bit of animosity between usually friendly competitors.

change the classification from 7228 to class 6216 on their renewal policy. They also requested that New Mexico Mu-

It began almost three years ago when a Utah based consul-

tual , based on advice from the consultant, return substan-

tant began visiting independent agencies with an interesting

tial amounts of premium from previous policy periods that

proposition: if you’ll work with us, we can help you get or

were ‘incorrectly” classified.

retain business by identifying misclassified codes on workers compensation policies. Although they claimed a general

New Mexico Mutual refused, citing multiple areas of flawed

expertise in evaluating construction, oil field, and transporta-

reasoning by the consultant, including the following:

tion related codes, the controversy created seemed to center on just two such codes and one type of business.

1. The NCCI Basic Manual is the only manual filed and approved by the NM Insurance Division, and therefore

The target businesses were companies that hauled water in support of the oil and gas industry. (A lot of water is used in a process called ‘fracking’, whereby water is pumped down a well to fracture subsurface rock, which releases the oil or gas trapped within it). Companies that hauled water and did not perform the actual fracking operations were traditionally classified as class 7228 (Trucking: Local Haul Only—All Employees and Drivers).

is the only manual that contains the rules that determine how classifications are assigned. The NCCI Basic manual clearly classifies TRT’s operations as class 7228.

2. Although the NCCI also publishes another manual called the Scopes Manual, it is a non-filed, non-binding manual that can only be used only as a guide or reference tool. The consultant used the Scopes Manual to make their argument for re-classification to code 6216. When (as in this case) there is a conflict between the Basic and Scopes

The consultant believed that its clients could take advan-

manuals, the former always takes precedence.

tage of a classification error they had identified. By re-

3. The consultant also incorrectly reasoned that TRT was

classifying employees from class 7228 into class 6216 (Oil

not a water hauler, but an oil field construction contractor

or Gas Lease Work, NOC—By contractor), insured’s that

(as required to qualify for code 6216).

hauled water could save a great deal of money on workers compensation premiums.

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When negotiations between the carrier and insured to Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

resolve the issue failed, TRT requested a formal hearing

premium; as well as the NCCI approval of the change in

before the New Mexico Workers Compensation Appeals

classification.

Board to resolve the issue. In response, New Mexico Mutual requested a classification inspection of TRT operations by NCCI. As the legal wrangling intensified, so did the animosity over the issue as insurance agencies began to take sides.

The consultants were making a concerted effort to talk with oil & gas insurance specialists about their classification theory. Some agencies bought into it and others

New Mexico Mutual filed an appeal of that decision to Superintendent of Insurance Mo Chavez. Shortly thereafter a hearing officer, Tom Rushton, was appointed to oversee the appeal . The case languished as Superintendent Chavez and hearing officer Tom Rushton both resigned their positions in the coming months.

didn’t. Unfortunately, water hauling clients were caught in

It took two full years of legal maneuvering and cancelled

the middle of the debate, not knowing who to believe.

hearings before the case was finally resolved on January 13, 2012. On that date the new Hearing Officer, Craig

In the fall of 2009, with the inspection report complete,

Dunbar, issued his decision from a hearing held late in

NCCI issued a Notice of Classification Change that

2011. His 41 page decision was a strong affirmation of

favored TRT. Although New Mexico Mutual disputed the

New Mexico Mutual’s arguments. It not only reversed

findings of the inspection report and asked for further

the earlier decision of the WC Appeal’s Board due to

clarification on the findings, NCCI chose not to respond

faulty conclusions, but also rebuffed actions of both the

and instead scheduled an Appeals Board Hearing for De-

consultant and the NCCI, ordering the latter to delete the

cember 1st, 2009. That hearing resulted in an affirmation

language in the Scopes Manual that conflicted with the

of the TRT classification change request, including back

Basic Manual in regard to code 6216.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

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Insuring Personal Trusts

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Sometimes a trust will take ownership/possession of autos, homes or other property.

This can occur following an untimely death of an insured or a trust may be established for someone who hasn't reached the age of maturity. Increasingly, trusts are being used in estate planning to convey assets in a manner that attempts to minimize taxes and liability. In any case, such property and the parties involved must be properly insured....

"What is the proper procedure to insure a personal auto that has been placed in a trust? I am unable to find an endorsement that applies to the situation for the PAP. It would be my belief that adding the trust as a Named Insured would be inappropriate. Do you have a solution or can you point me in the right direction? Thank you." -- Connecticut agent "I have a question regarding individuals that purchase property in the name of a family trust or, for tax purposes only, a corporation. I have been adding these locations to their primary homeowners policy and listing the trust or corporation as an Additional Insured. If these locations are not personally owned, but are occupied by the insured, don't I need to list them under their umbrella policy also?" -- Florida agent While trusts have been around for years, there appears to be an increasing use of them for tax and liability purposes, as directed by estate planners, CPA's, and attorneys. Only recently has ISO begun to address insurance issues in the personal lines area. The primary problem with using traditional HO and PAP policies to insure trusts is that these forms are designed for individuals and the policy language is such that, if the named insured is a trust (particularly one that is not a person, such as a corporation or LLC) there will most likely be major coverage gaps...since coverage applies largely to "you" (named insured and resident spouse) and "family members," if the trust is not a natural person, then it cannot have a spouse or family members. Also, the HO program generally requires that a named insured own AND occupy the dwelling.

ISO has now addressed the trust issue to great extent from the standpoint of personal property and liability exposures.

Under its new HO2000 program, ISO makes it relatively easy to insure homes that have been placed in trust. In this program, there is a "Residence Held in Trust" (HO 05 43 10 00) endorsement designed for this exposure. The policy is written in the name of the Trust and the Trustee. As long as the dwelling is occupied by the Trustee, Grantor or Beneficiary it can be written on the HO policy; otherwise it must still be written on a dwelling policy. The Trust gets the benefit of all Section I & II coverages. The party that resides on the premises -- Trustee, Grantor or Beneficiary -- gets the benefit of all coverages except Section I A & B (dwelling and other structures).

However, a residence owned by a corporation would not qualify for this new endorsement and commercial insurance for the trust, along with HO4 coverage for the occupants may continue to be necessary. All that being said, there are companies that will pretty much do what they want to do when it comes to a home owned by a trust. As usual, it's important to check with the carrier to see if they have established their own criteria for

insuring trusts. If so, be sure to question the underwriter about how the policy language (particularly that regarding coverage for "you" and "family members") will be interpreted.

Unfortunately, there is not as simple a way (at least yet) to insure a trust in the ISO PAP program. The closest it comes is the PP 03 33 06 98 endorsement "Certificate of Insurance Trusts" which can only be used, under ISO rules, if a vehicle is jointly owned by the trust and a named insured. The certificate (which is just evidence of liability coverage) says, "The vehicles described in the Schedule, if owned jointly by the named insured and a trust, are insured for automobile liability coverage under the policy indicated in the Schedule above.

If this policy is terminated, notice will also be mailed to the Trustee(s) named in the Schedule."

Otherwise, following pure ISO rules, the vehicle is supposed to be covered by a Business Auto policy since the trust can't be a named insured under ISO PAP rules. Even if the policy was issued with the trust as named insured, the broadest coverage is available only to "you" (named insured and resident spouse) and "family members"...and it's unlikely that the trust has a resident spouse and family members. Permissive users would have some coverage while operating that vehicle, but none otherwise.

So, currently, the only viable "PAP" method is to issue the PAP in the name of the person(s) to whom the vehicle is entrusted and/or both that person or persons and the trust jointly.

If insurable interest is an issue, another possibility, in working around the manual rules, would be for the trust (if legal owner) to execute a written lease of at least six months to the person(s) having custody of the vehicle so they can insure it under a PAP and additionally insure the trust as if they were the lessor or lienholder.

Again, the alternative (and probably the "ISO-preferred" method) would be for the trust to obtain a Business Auto policy and attach Drive Other Car coverage for the person/ spouse entrusted with the auto, being sure to name any other family members specifically.

Complex stuff, relatively speaking. Hopefully, ISO will introduce a trust endorsement in the next PAP revision to simplify the process.

In the meantime, AAIS has published an EXCELLENT, comprehensive report called "Insuring the Personal Trust." AAIS advises that they will be revising the article in the coming months after they file their new Homeowners trust endorsement.

There is also an excellent article entitled "Personal Umbrella Liability and Personal Trusts" at the GeneralCologne Re web site, though you need a login to access it.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

culty

Page 19

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industry tidbits Allstate to Raise Homeowners Rates

by Up to 10% It looks as if Allstate’s character in commercials, Mr. Mayhem, is doing too good a job. Homeowners insured with Allstate Corp. will soon be hit with rate increases of as much as 10 percent, the company said last month.

Rate increases for renewals and new business will range from 4 percent to 10 percent annually, which translates into monthly increases of $4 to $9, effective March 26, said spokeswoman Shaundra Turner.

The rate hike is due to increased claims for water, wind and hail damage, Turner said.

Northbrook-based Allstate, the nation’s largest publicly held personal lines insurer, joins other insurance companies in raising rates in the past year amid higher industry catastrophe losses, which hit $35.9 billion nationally in 2011. That compares to an average $23.8 billion loss for 2000 to 2010, according to the Insurance Information Institute.

Bloomington-based State Farm, which insures one of every three homes in Illinois, raised its rates an average of 6.7 percent in Illinois last year and an average 3.6 percent nationally. State Farm declined to discuss whether it plans to raise rates this year.

Allstate Also Promises Satisfaction Guaranteed on Claims to Auto Customers Allstate is promising that if you buy a policy and are not satisfied with your claims service, you'll get a refund.

Under the money-back claims satisfaction guarantee, eligible customers who are dissatisfied with the service on a paid auto claim can receive a credit to their premium if they complain in writing within 180 days of the incident that caused the claim. Last year, Allstate tested the guarantee in four states -- Georgia, Indiana, Michigan and Ohio -- and had very few requests for refunds, says Allstate spokeserson Kevin Smith.

Because the guarantee was successful in the test states, Allstate is expanding its customer satisfaction guarantee to a total of 31 states, with more to follow in coming months.

"We had very few applicants for the satisfaction guar-

antee in those test states, which led us to believe, one, this would be successful for us and, two, our processes continue to be performing very well," Smith says.

No exceptions Allstate isn't charging more for the personal auto insurance policies that come with the new guarantee. There are no qualifiers or exceptions. If customers are dissatisfied with the way their claim was handled at any time for any reason, they can apply for a credit.

"From their first phone call after the accident, to their last in the claims process, if there's any part they're dissatisfied with, that's where the claim satisfaction guarantee comes in," says Smith.

Customers will receive a credit equal to six months of their premiums, says Smith. Allstate is offering the guarantee as a way to distinguish itself from other insurance companies.

A consumer advocate's perspective Doug Heller, executive director of the nonprofit Consumer Watchdog organization in Santa Monica, Calif., says it would be better for consumers if Allstate promised that customers would be satisfied with the way their claims are resolved. For example, if someone receives a low payment for a major claim, returning their premium won't solve the problem, he adds.

"If you buy a rotten apple and take it back to the store, and they give you your money back, you're back where you started," he says. "But if you get your money back on your car insurance premium because you're dissatisfied with the claim service you received, you still may be out thousands of dollars in unpaid car repair and medical bills."

According to Mark LaNeve, an Allstate senior executive vice president, the guarantee is an assertion by the company that it has confidence in its claims adjusters and agency owners. If a customer isn't happy, he says, the company isn't doing its job.

We’ll be interested to see how this spin works out in the long run.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Page 21

trust. acuity.com

Page 20

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

How Credible is Your Website?

by, Bill Wilson, director of the Big “I” Virtual University

Tips for improving your site’s credibility and popularity.

In other articles I've written about measures you can take, particularly in the area of content, to get insureds and prospects to come back to your website. However, when they come to your website for the first time, what is the most impressionable thing about your website? That is, what makes them think they can trust you enough to return again and, hopefully, give you their business? The answer, in a word, is credibility.

Now, how do you make your website credible in the eyes of consumers? Stanford University recently completed a study on what causes people to believe or not believe what they find on a website. What the study demonstrated is that consumers paid far more attention to the superficial aspects of a site than to its content.

This doesn't mean that content is not valuable, nor does it mean that the content doesn't have an effect on repeat visits. What it does mean is that a visitor's trust in the accuracy of your information or the reliability of your services is dependent largely on how professional your web site looks.

How can you boost your website's credibility? Here are Stanford's 10 guidelines for building website credibility: 1. Make it easy to verify the accuracy of the information on your site. Be sure to include citations, references, and sources for any content on your website and only link to reputable websites.

2. Show that there's a real organization behind your site.

Be sure to include, on every page, the physical address of your agency. Consider including a photo of your office.

List any important affiliations, such as membership in the chamber of commerce or Better Business Bureau. If your agency has been around for many years, highlight that fact. Include testimonials from satisfied customers, particularly those that are well known and respected in the community.

3. Highlight your organization’s expertise and the services it provides in the site content. If you have staff who are recognized experts or authorities, make that clear, particularly for your target markets. Let people know if you are affiliated with respected organizations, include your IIABA and Trusted Choice logos, and link to credible outside organizations So if you are targeting contractors, include any affiliations with homebuilders or similar organizations.

4. Show that honest and trustworthy people stand behind your site. If agreeable to your staff, include photos and bios of your employees. You might also include photos of employees involved in charitable or civic events.

5. Make it easy to contact you. Include complete contact information on every page of your website, including your address, phone number, fax number, and general email address. Also include a staff contact listing.

6. Design your site so it looks professional. Consider using a professional web designer (not a web developer) to design a consistent, professional look and feel for your website.

7. Make your site easy to use and useful. Beyond the look and feel of your site, it is still important to focus on usability. You should have ample content that is valuable and relevant to your visitors and that content should be easy to find. Forget the hype and hyperbole and concentrate on what your clients or prospects would want from your site. Forget about dazzling people with web technology like Flash animation -- you don't need it to have a professional, credible website.

8. Update your site's content often or at least show it's been reviewed recently. Keep your content fresh and growing. Consider including a "What's New" section on your homepage to demonstrate that your website is an ongoing, viable part of your operations.

9. Use restraint with any promotional content (e.g., ads, offers). Avoid advertisements if possible. In any event, never use pop-up ads.

10. Avoid errors of all types, no matter how small they seem. Typographical errors, poor grammar, and bad links can ruin your credibility. Triple check every word on your website so that it does not create an image that your organization is inaccurate or unreliable.

Want to learn more? We have two classes at Annual Spring Seminar about website development: “Cap Presentation” on Wednesday afternoon and “Websites Decoded” on Thursday, March 21 & 22.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Page 23

Insurance Organizations Can’t Afford to Mis-Hire!

N

7 Tips to Hiring Right the First Time

o matter what department or staffing level you are hiring for, you can't afford a hiring mistake! In this day and age, making the wrong hiring decision can cost an organization a minimum of 3 to 4 times the base salary!! That's a high price to pay, and it’s a conservative figure when you factor in the emotional pressures of training, evaluation, termination and then starting the hiring process all over again. By refining your hiring process, you can turn hiring into a profitable and successful venture.

There are several steps to creating an effective recruitment program: 1. The first starts with the basics - the job description.

Many organizations only have job descriptions without specific expectations spelled out. It’s very difficult to describe a position to a candidate, without having it completely defined. It's important to detail the expected job performance outcome, and be very specific in what is needed and expected. The job description should have 30-, 60-, 90- and 180-day objectives, so the candidate has a clear understanding what is expected for the job.

Be sure to review and update job descriptions regularly, as organization needs and expectations for a position are bound to change.

2. The next step is to define where to recruit candidates or target your recruiting process. Now that you have an idea of what you need and expect for the position, where do you find this treasured person? There are many resources: Referrals, recruiters, newspaper ads, college placement centers, .com listings, etc. Referrals are usually one of the best sources for candidates and giving out the job description to business associates and friends may reveal the perfect candidate. When working with recruiters, it is very important to be as specific as possible to avoid your time being wasted with unqualified candidates. According to Arnie Winkler of the Northwest Public Power Association, “Organizations must be specific in understanding what they want in technical competency, cultural fit and behavioral characteristics.” The same is true for ads so that the ad is as definitive as possible. College placement centers are not only good for recruiting college grads, but usually have facilities to list positions that require extensive experience too. They can be especially helpful if they are in close contact with the alumni association.

3. Soon in your hiring process, you will be faced with a big pile of resumes. Look for resumes that are specific to your needs and notice the presentation style, which will tell you

Page 24

by Dana Borowka, MA Lighthouse Consulting Services LLC, Santa Monica, CA

Special Note: Towards the end of the article, you’ll have an opportunity to download a list of telephone and face to face interview questions. a great deal about the candidate. It is helpful to decide what the priorities are for the position and look for those first in the resumes.

4. Once you have settled on a few resumes, we suggest the two step approach to interviewing. The first is the telephone interview, which can save you valuable time and effort. Ask the candidate a set of specific questions, such as: Why are you interested in this position? Please describe three key attributes that you have to offer to our company? Give me one significant program that you had an impact on in the last six months? Listen carefully to the candidate to see if the response fits the job description. This process allows the candidate to earn a face-to-face interview.

5. When interviewing in person, it is important to listen and not let emotions take over. The candidate should talk about 80 percent of the interview and the interviewer only 20 percent. The goal for interviewing effectively is to note their thinking patterns, and not get caught up in appearances, impressive schools or companies. During the interview, questions that are more specific are helpful in making successful hiring decisions. Some examples are: What significant impact have they had at three or more companies on their resumes - ask for specifics, percentage of change; Please describe in detail what brought about the change; What was their process, from A to Z? and ask how the candidate would handle a specific problem that you have seen in the position.

6. Once a candidate has been selected to be hired, then the most difficult part of the hiring process begins - reference checking. Many firms find professional organizations helpful when making background checks.

7 Yet, as the old saying goes, "You never know someone until you work with them, travel with them or live with them”.

Through in-depth work style and personality testing, you can reduce the possibility of making a hiring error. An in-depth assessment can be like a MRI to identify inner traits of a candidate if the appropriate assessment is selected.

When researching profiles, here are some things to keep in mind: • Training or degrees required for interpretation of the data.

Weekend training programs can be problematic since testing and human behavior is a very complex subject. When mak-

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

making hiring or internal decisions, organizations need as much understanding as possible as the consequences can be very costly.

• A copy of the resume should be supplied to the testing company to review when discussing the assessment results. We suggest to make sure that they require this as part of the process so it is used when reviewing the assessment results.

• Scale for “Impression Management” to understanding accuracy of results and if someone is trying to ‘fake good’.

The questionnaire needs at a minimum of 164 questions to gather enough data for this scale.

• Number of studies conducted and there should be multiple studies for validation purposes.

• How long has the profile been used – what is the history.

• How often is the normative database updated and where is the data coming from. (For example, U.S. Census) • Cultural bias – is it built into the profile and for which countries.

• Does the profile meet U.S. government employment standards? Has it been reviewed for ADA compliance & gender, culture & racial bias?

• Reading level required (5th grade English, etc).

• Number of profiles administered.

• Number of actual primary scales as defined by the “Big 5” testing standards. Many tests will claim to have more scales than they actually have - this can lead to misrepresentation of data.

• Validity, reliability and basis.

A common inquiry from companies and organizations is about the legal guidelines in providing assessments to candidates. Since industries vary, it is always best to check with a trade association or a legal representative.

The general rule is that a test or any set of hiring questions needs to be administered to all final candidates in order to assure that discrimination is not taking place.

More information may be found at the EEOC website, in the Disability-Related Inquiries and Medical Examinations of Employees section: Another question is how do new hires usually feel about taking an in-depth, work style assessments. It shows that a company is serious about who they hire. If the company presents the testing program as a method of assuring both parties that they are making the right decision, the individual usually responds very well. The bottom line is that hopefully turnover is greatly reduced.

In-depth work style and personality assessments can be very helpful for personnel development and succession planning. As a hiring tool, they can be used to develop additional questions for interviewing and confirming the interviewer's intuition that might be overlooked. This process gains more reliable and accurate data in order to

effectively manage individuals to make hiring and personnel decisions a win-win for everyone.

As a special gift… here is a list of telephone and face to face interview questions: If you are a hiring manager and would like to see a sample of an in-depth work style and personality assessment profile, please call or email us. For more information, please contact Dana Borowka at Lighthouse Consulting Services, LLC, (310) 453-6556, extension 403 or email at dana@lighthouseconsulting.com.

As you have seen, a successful hiring program requires many components that work together to provide the needed information for difficult personnel decisions. Combining a well-defined job description, targeted recruiting and focused interviewing with an effective in-depth work style and personality evaluation program, turns hiring into a profitable and rewarding process.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, workshops, and executive & employee coaching. To order the book, “Cracking the Personality Code” please go to www.crackingthepersonalitycode.com.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Page 25

Survey Says“Sky is the limit” on what agents can do with time freed up because of real-time programs, an agent says. For independent agent Joyce Sigler, one hour of time can be the difference between a carrier that uses a real-time system and one that does not.

A

n agent works on an auto policy with three vehicles and three drivers, each with a different rating. It takes less than minute—a click of a button—to move the information from the agency management system to the carrier using a real-time system, says Sigler, vice president of administration of Jones & Wenner Insurance in Fairlawn, Ohio.

But for a carrier using its own portal, the agent spends an hour rekeying the information and verifying it for accuracy, she adds.

“That time could be spent evaluating renewals, it could be spent doing other marketing programs, it can be spent looking at coverages,” says Sigler, whose agency employs 15 people and offers insurance for trucking and transportation, professional enterprises and personal lines. “The sky is the limit as to where it could be spent.”

Sigler agrees with other independent agents and brokers who say more insurance carriers should offer real-time capabilities to improve workflow efficiency at their agencies, according to a recent Real Time/Download Campaign survey with more than 3,100 respondents.

Using a five-point scale, survey participants prioritized 11 types of enhancements to real-time programs, according to the campaign.

Six of 10 survey respondents gave “additional carriers with real-time capabilities” the highest rating, according to the campaign. Agents and brokers also prioritized “broader carrier participation” and having “consistent lines of business/real-time functions offered across carriers.”

Agents Want More Carriers to Use

Real Time Systems by, Victoria Goff

The number of carriers using real-time systems is growing, but there’s still more work to be done, says Stuart Durland, vice president of Seely & Durland Insurance in Warwick, N.Y., who has long supported real-time models.

For Durland’s nine-person agency, which specializes in business and personal property-casualty insurance, not all of the carriers have real-time functions—or are fully carrying them out. The same is true for other agencies too.

To receive a quote for a client, an agent may only need to enter information into the agency management system and click a button, sending the information to a carrier through a real-time program, he says. But for another carrier that’s partially implemented real-time, the agent may need to log in to the carrier’s website to add more information before receiving a rate. And for a carrier not using real-time, the agent may need to start from scratch by retyping all of the client’s information in a carrier’s portal.

“It’s an inconsistent workflow at this point,” Durland says.

In addition to carriers, more agencies could also use realtime, he says. Some aren’t using it for reasons that may include staff size or lack of access to an IT professional, but Durland notes it may seem “more overwhelming than it probably is just to get involved with it.”

“The companies have to implement it, but the agencies have to use it as well,” he adds. www.getrealtime.org More information about the Real-Time Campaign survey results is here.

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Page 27

Isn't it odd that people and businesses buy more financial products when prices are highest, rather than lowest? After all, the way to make money is to buy low and sell high. But as the real estate bubble showed, people generally do the opposite with financial products. This has been true forever and is a key reason bubbles inflate.

Aligning Advertising

by Chris Burand

panies are, what they offer, or even why they should call to get a quote. Buying a lot of advertising now is a deal.

I

sn't odd, too, that businesses buy more advertising in boom times than in bad times? Businesses buy more advertising when sales are already good and buy less when sales are the worst. I understand that pennies must be watched when business is not good, but to make money most businesses have to advertise. So why do businesses advertise their services and products less at a time when it is critical for them to be increasing sales? It is especially curious considering that advertising rates tend to be lower in bad times and it is easier to get more attention from advertisements since fewer entities are advertising.

One theory is that most executives do not advertise to increase sales. They advertise to tell the world how great their company is. When times are tough and there is less to crow about, they advertise less. But if company executives can set aside their egos and realize that advertising is a necessity rather than a luxury, now can be a great time to advertise.

Below are a few tips about how to advertise effectively that I rarely see considered:

Size Matters. Study after study shows that the bigger

the advertisement, the better the results. This has to do more with the message the size sends rather than the message itself. Size costs money. When a company is willing to spend a lot of money, people see that as a sign the company is successful and, therefore, they are more likely to do business with it.

President Lyndon Johnson put it well relative to political contributions. To paraphrase him, he said, "Why do contributors think politicians will pay attention to them for $1,000 contribution? It's not enough to get my attention. But spend $50,000 and I'll know everything about them!"

Why do GEICO and Progressive advertise so heavily? It's not as though any U.S. citizen cannot know who the com-

Page 28

Define a Purpose. Some advertising is for branding.

Other advertising is for attracting immediate sales. GEICO and Progressive commercials seem to have hit the gold mine of combining effective branding and immediate sales advertising.

Some advertising carries a secondary message such as the company is a great place to work. Many agencies fail to think about advertising for the best employees and even carriers. I am not talking about advertisements that are larger versions of help wanted ads. Rather, these are general advertisements, similar to branding advertising but aimed specifically at audiences from which the agency might draw the best employees. They subtly suggest that employees thrive at this agency.

Aim at a Target. All types of advertisements require focusing on an ideal customer. If a firm's ideal customer uses the Yellow Pages to find insurance, then the firm should advertise big in the Yellow Pages.

Web-oriented advertising is similar to advertising in the Yellow Pages. I don't mean to rain on anyone's parade, but most of these customers are passive, extremely price sensitive, and don't value an independent agent over a captive.

Most of these ads are really nothing more than inducements to get a prospect to call. This is great, provided that prospect is the agency's ideal customer. Agencies should not fall for fast sales pitches that web-based marketing is the "end-all and be-all" of marketing. It is valuable, but webbased advertising is only one part of the puzzle.

If an agency has more than one ideal customer (kind of oxymoronic but common), then two completely different advertising campaigns are necessary. There is no "killing two birds with one stone" advertising for run-of-the-mill personal auto clients and high-end manufacturing. An agency that does this ends up creating the oxymoronic statement seen on many agency business cards, "We specialize in auto,

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

home, life, business and health insurance." No one competently specializes in all five areas. These statements are really announcements that the agency is a jack-of-all-trades and master of none.

confuse the two. Using publicity well requires considerable effort and planning.

If advertising fits in your agency's business model, now is a great time to put an advertising plan into action.

Measure Results. Many businesses do not know if

their advertising works because they do not have the right measures in place. Why even advertise in good times, egos aside, if there is no way to know if it is working?

Immediate sales advertising is easy to measure. Activity, and sales, should immediately increase. Special telephone numbers and web-sites can be used to track the quote activity resulting from advertising.

Branding advertising is generally an expensive, long-term process from which direct results are difficult to measure through sales. However, surveys can be used to determine if consumers know the brand better after the campaign.

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Integrate. After an agency has made the decision to

advertise, settled on what kind of advertising campaign to wage, designed a campaign to attract its ideal target, and figured out how to measure the effectiveness of the advertising, it still has one more step. The agency needs to incorporate the advertising effort into producer compensation, producer duties and agency publicity.

After all, is a producer who makes sales partially or wholly created by advertising worth the same commission as a producer who makes sales completely on his or her own? I don't think so. Too many agencies make the mistake, and pay dearly for it, of paying for all the advertising from which their producers reap the benefits. If producers are going to benefit from significant advertising, marketing, leads lists, loss control, or whatever tools the agency provides, shouldn't they pay part of the price?

- Not Your Grandfathers' Diversity Click here - Using the Best Practices Study Click here - Being Savvy About Cyber Security Click here - Workers Comp Exp Rating Click here - Agency Valuation Click here - Catastrophic HO Policy 'Exclusion' Click here - Excess and Surplus Lines Click here - NonProfit Executive Liability I Click here - NonProfit Executive Liability 2 Click here * Not approved for CE in New Mexico Please email Rachel if you need your log-in information.

Next, align the agency's advertising with producer and agency duties. Too many agencies are advertising services they do not really provide. For example, if an agency is going to advertise it specializes in something, it must have special expertise in that area. Or if an agency advertises that it finds the best combination of coverage and price for customers, then the agency must market ALL accounts every year. Or what about agencies that advertise they will take care of the clients' coverage needs but they do not use coverage checklists? An agency's procedures and services must match whatever promises it makes in its advertising.

Otherwise, the errors and omissions (E&O) exposure and, in extreme cases, the fraud exposure can be significant.

Publicity is the last piece of integration to consider. I find few agencies have a publicity plan. Free publicity for doing good work and achieving awards should not be underestimated. I see many agencies generating publicity for ego purposes more than business purposes. Please do not Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Page 25

page 29

IIANM’s

EducationEDGE Insurance Education Programs in New Mexico are critical to a successful and profitable career in the insurance industry. Every year, we offer exciting opportunities to expand your professional horizons.

All of these education programs are designed to help insurance agents thrive in the most competitive of marketplaces.

The pre-licensing classes are designed to be a review for the state licensing examination.

We recommend that students be familiar with the study material prior to attending class.

Pre-Licensing Classes Study materials are NOT included in class prices.

Property & Casualty Review Class (2 days)

Life & Health Review Class (1 day)

Regular Price: $150 Member Price: $120

Regular Price: $115 Member Price: $90

Instructor:

Chris Krahling - February 7 - 8

8am - 5pm

Instructor:

Kitty Leslie - March 13 - 14 8am - 5pm

Click here for a full listing of our education program.

Instructor:

Jeff Straight - February 9 8am - 5pm

Instructor:

Bob Ouellette - March 15

8am - 5pm

The FINE PRINT: IIANM reserves the right to cancel/reschedule classes. Please call ahead to verify when classes will run. Decisions will be made three days prior to class. Cancellations received after 5 business days, will be assessed a $50.00 cancellation fee. Cancellations received on or after deadline and ‘no shows’ will forfeit the registration fee altogether. A substitute is always welcome, with no extra fee, but prior notification would be appreciated.

Class Name/Date: Full Name:

Method of Payment:  Bill Agency (Members Only)

First Name for Badge:

 Check Enclosed (Payable to IIANM)

Agency / Company:

 M/C  Visa  Disc  Amex

Address:

Amount:

(all prices include tax)

Card No:

City, State, Zip:

Exp. Date:

Telephone: ( Fax: ( Send in your registration:

Page 30

)

E-Mail:

Signature:

) Go on-line: www.iianm.org or E-mail: rachel@iianm.org

Give us a call: (505) 843-7231 (800) 621-3978

Mail in: 1511 University Blvd. NE Albuquerque, NM 87102

Fax in: (505) 243-3367

Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

INTRODUCING

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ABEN's Live Webcasts will stream professional instructors right into your office, along with related course material. You can follow along with the presenter’s powerpoint, submit questions, take notes, get full access to written materials, and you have the ability to ask questions and chat with other students.

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Additionally, ABEN’s help desk is standing by 24/7 to assist you, should you encounter any difficulty with the technology.

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Independent Insurance Agents of New Mexico - www.iianm.org - * February 2012

Page 31

February 2012 Clickable Calendar

Sunday

Monday

Tuesday

Wednesday

Click on class title to register

Thursday

2

1 P&C

5

6

12

13 Office Closed 19 20

Classifieds

26

27

Pre-licensing Class

Friday

Saturday

3

4

10

11

L&H

Pre-licensing Class

7

8

14

15

16

17

18

21

22

23

24

25

28

29

9

CE Committee Meeting

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 there 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!

Od d s n Ends All across the state tonight, New Mexicans will be asking one important question:

10

Is eating out cheaper than cooking? As grocery prices go up and restaurants struggle to hold the line on menu prices, dinner from the kitchen isn't necessarily the most economical.

Click here to get a read on the relative value of dining out vs eating in.

5 Best Reasons to

Drink Water

Deductions You Shouldn’t will tell you lots of things Even Try People are deductible, and you may be

Of all the food and beverage choices you face every day, what’s calorie-free, virtually costfree, and, oh yes, essential to keeping you alive?

Plain ol’ water.

able to write off some. But these 10 ideas are more likely to cause you trouble than save you money.

But those aren’t the only reasons to drink it.

In this age of email, handwritten notes can make a big impact. Think about it: when was the last time you received a handwritten note? vLetter is a company that will reproduce your own handwriting as a custom font that you can install and use like any other font on your computer. This allows you to use the speed of typing to create a handwritten look on notes and letters.

FREE Work Comp 101 Class If one of your employees had a work-related accident, would you know what to do?

New Mexico Mutual’s Claims Department offers a free training program, Work Comp 101, for employers who would like to learn the basics of workers’ compensation claims handling, law, and benefits.

The next class will be held on March 6, 2012, 8:30am – 11:30am

How Does A Plastic Bottle Get

Recycled Into A Pair Of Jeans?

Ever look at a piece of clothing that’s labeled “eco-friendly” and wonder just how recycled its materials really are?

See and Learn!