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Q. What’s New in 2013? A. Policy Corner To better serve our policy holders, we have created Policy Corner, a self service area which will provide access to more detailed policy information, such as policy documents, billing transactions, account statements and claims summaries. Please stay tuned as we roll out additional features in this area over the next several weeks. Enhancements will include a wage reporting integrated application. This service is available through our website.

NewMexicoMutual.com > Employers > Policy Corner • An employer log-in will be required to utilize these new features.

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

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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

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"The Voice" of Independent Agents since 1934

2013 - Become an IIANM Company Partner

04

Annual Education Seminar - Get Your 15 CE Hours

05

Pick Up in Fracking Activity Could Cause Headaches for Insurers

07

9 Ways to Secure Agency Data

08

The Digital Shopping Mall - Be There or Be Nowhere

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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.

2013 Taxes What’s New for Agents & Consumers

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Unclaimed Life Insurance Benefits Top $1 Billion

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Union Standard’s League of YA Heavy Hitters

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Advertising rates are available upon request.

Young Agent Spotlight - Joseph Menicucci

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

The Devil Made Me Do It!

20

Big “I” Federal Political Action Committee Beefs Up Web Presence

22

2013 Milage Rates and Deductibility of Dues

23

The Top 5 Sales Myths Debunked

24

ISO Commercial Property Changes: Which Coverages Are Broader?

26

Liability Issues Create Potholes on the Road to Driverless Cars

28

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

2012-2013 Officers

In Every Issue Tech Talk

12

March's Clickable Calendar

30

Odds n Ends

31

Advertiser Index Acuity

16

Chair PJ Wolff

Burns & Wilcox

Vice-Chair Diana Hobbs

Litchfield Special Risks

14

Lovelace Health Plan

10

Secretary/Treasurer Gabe Portillo

Market Finders, Inc.

06

National Director Sam Conlee

New Mexico Mutual

Immediate Past Chair Scott Jones

Back Cover

Mountain States Insurance Group

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The companies listed below have made a commitment to support the strongest agents' association in New Mexco. In turn, as members, please show your thanks by utilizing their varied products and services!

Become a Partner! We invite companies to experience the 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. Click here for more info!


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

One Day One Morning

Day One Afternoon

Business Income

BOP

3/19/13

Commercial Lines

3/19/13

The Mystery & How to Solve It Bob Pratte, CIC

Betsy Carlson, RPLU, CIC, ASLI

E&O Risk Management - Meeting the Challenge of Change

Personal Lines Young Agents Professional Development Life & Health

Jeff Straight, CIC, LUTCF, AAI *Policyholders of Swiss Re/Westport Insurance and Fireman’s Fund, this E&O course has been approved for credit on your E&O renewal. The number of required participants is based on agency staff size. Contact Julie Franchini at Julie@iianm.org or 505-999-5802 to determine your agency attendance requirement.

Goal Setting & Goal Getting PJ Wolff

Ethics

3/20/13

Day Two Afternoon 3/20/13

Anatomy of a Claim / Green Insurance Coverage

Selected Problems & Solutions

Commercial Insurance

Jeff Straight, CIC, LUTCF, AAI

Bob Pratte, CIC

Personal Insurance

Parents:

Dilemmas, Issues & Solutions

Your Kids & Your Personal Lines Policies

Bob Pratte, CIC

Jeff Straight, CIC, LUTCF, AAI

NM Legislative Update

The Insurance Industry Leader

Thom Turbett

Dr. Theresa Cross, Phd

NM Health Connections

Disability Income

Affordable Care Act & Exchange Update

Michael Stark

Patty Padon, LUTCF, CIC, AAI

two Day Two Morning

Brian Taylor

COBRA Compliance Update

History of Health Insurance

C. Sue Bisbee

C. Sue Bisbee

4pm - 5pm

4pm - 5pm

Click here to view full brochure and to register Independent Insurance Agents of New Mexico - www.iianm.org - * March 2013

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


Pickup in Fracking Activity Could Cause Headaches for Insurers Source: Claims Management

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awsuits associated with high-volume, hydraulic fracturing (fracking) are increasing amid the escalation in fracking activity. In the wake of several multi-million dollar settlements, the insurance industry has a major stake in understanding the scope and extent of risks potentially posed by fracking, writes LeClairRyan partner Michael J. Case in an article in the January issue of Claims Management magazine. Landowners who allow gas exploration or production activity on their property, typically through lease agreements, may be held responsible under common law for dangerous conditions on their property, explains Case. And oil and gas leases often contain provisions indemnifying the landowner for claims arising from a gas company's operations and requiring the developer to obtain liability insurance covering the landowners for claims arising from such operations. This places the lease terms at the forefront in analyzing fracking-related liability, he notes in the article entitled "Fracking Know-How: Risks and Risk Allocation in High-Volume Hydraulic Fracturing for Shale Gas." Insurance adds another layer of complexity, adds Case, who represents insurers and reinsurers in litigation and arbitration, as well as businesses and individuals in environmental liability and insurance cases. For example, well operators or landowners whose liability has not been transferred in the lease documents may look to their insurers to assume their retained liability. However, he advises, the likelihood of payment under such circumstances is far from certain. Many insurers had already issued policies to landowners, contractors and well-site operators at a time when the volume of fracking activity was more limited. The exponential expansion of high-volume fracking activity may give rise to increased claims against policyholders, he warns in

the article. Examples include Chesapeake Energy's $1.6 million payment to settle allegations of water well pollution in Bradford County, Pa., and a reported $4.1 million settlement with Cabot Oil & Gas Corp. by residents of Dimock, Pa., who claimed that their drinking water was contaminated by fracking-related methane gas. Some state and federal courts have held that costs incurred pursuant to a governmental remedial directive may be recovered under a general liability insurance policy, Case notes. Although recently-issued policies likely contain a pollution exclusion barring coverage for discharge or other release of pollutants, New York's highest court has limited the exclusion to environmental claims, declaring that the exclusion may not be relied upon to defeat coverage for injuries involving exposures that are not deemed to be environmental in nature. Case also notes that general liability policies often include a separate coverage grant for personal injury, which includes wrongful entry, eviction or other invasion of the right of private occupancy. Many state courts have held that claims for environmental contamination do not fall within the separate coverage grant for personal injury. However, he cautions, policyholders may seek to test the principle in the fracking context. Generally, a threshold step in evaluating the potential claims arising from high-volume fracking involves clearly comprehending the roles potentially insured persons and entities are likely to play in the gas development process, as well as the legal and liability stage upon which those roles are played, writes Case. Ultimately, the facts giving rise to liability, coupled with the applicable policy provisions, will determine whether and to what extent, liability arising from fracking-related risks comes to rest upon the insurance industry.

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

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9 Ways to Secure Agency Data Benjamin Franklin once said that distrust and caution are the parents of security. His expression is still relevant in today’s world, especially when it comes to protecting sensitive client data. Change passwords often. Set a standard timeframe for your agency and enforce it. If you ever have any reason to believe that your password has been compromised, change it immediately. Carrier portals continually request password changes from users to minimize fraudulent access. Make sure your agency management system has password management capabilities, so when you change your password on the carrier site, you can also change it in the agency management system and retain your real time access. Changing these passwords for multiple employees, carriers and other entities is cumbersome, but an industry movement known as the ID Federation is working to streamline these processes.

by Kate Gluck

Independent agents have an ever-increasing responsibility to keep a lock on their client records. Here are nine ways to mitigate the risk of a data security breach:

Keep data in a password-protected, encrypted space. There’s always a danger that laptops, tablets and smartphones may be lost or stolen, so store client data on those devices in a way that makes it inaccessible to unauthorized users. The best way to do so is to encrypt and password-protect it. This can be done by storing data in your agency management system, which is password-protected; encrypting a folder on your hard drive where data outside of the system can be kept; or encrypting an entire hard drive if you’d prefer not to save information to one folder. When using smartphones and tablets, promptly delete emails with personal data and avoid transmitting messages through unsecure email. Use password protection on these devices and employ a remote wiping technology, so they can be restored to their original manufactured state with all data removed if they are lost or stolen.

Create “strong” passwords and keep them secure. Your password is the first line of defense in preventing unauthorized file access, so create strong passwords and store them in a safe place. Avoid writing them down—but if you must, don’t carry them around with you and don’t keep them in easily accessible places. Page 8

Keep user permissions tightly controlled. Many agencies not only share their agency management system passwords among staff members, but they also leave the user permissions wide open. But because sensitive data is stored in the system, only employees who use it regularly should have access. Use your user permissions well. Make sure you: • Understand the levels of permission you can set within your system. • Understand the access that employees need to your system to perform their job. • Implement permissions based on your agency’s best practices. • Make sure employees understand they should not share passwords.

Remember to log out. Logging out is one of the more important steps for securing data. If you are signed in, it doesn’t matter how many layers of security you have or how good your password is—anyone who has your computer or mobile device can access your data.

Protect outbound data. Protecting your outbound data is just as essential as securing information on your computer or device. Use real time, which automatically encrypts communication to a carrier and keeps it within the agency’s and carrier’s manage-

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


ment systems. In addition, secure your email with transport layer security (TLS) email encryption. You may need to use a proprietary email solution for clients, or set up a secure client portal on the agency website, when sensitive personal data is transmitted to the client. When storing or saving client emails, attach them to files in your agency management system instead of saving them in your email application.

Use security software. If you are using a reputable online-hosted agency management system, the data in your system should be protected with Internet and server firewall data protection, malware and antivirus protection, and weekly security patch updates to Windows. Your agency management system provider should send maintenance window updates to let you know these measures are updated. If your agency management system is housed in the agency, make sure similar security hardware and software are employed. To protect data saved outside your agency management system, use an antivirus program and a spyware scanner regularly, and keep your PDF reader updated with the latest version.

Be careful when using public Wi-Fi. Free public Wi-Fi is convenient, but if you fail to protect yourself against data thieves and hackers, the convenience will come at a price. There are ways you can protect your

data and still access the Internet while you are on the road: • Never pick a free wireless network that is not identified clearly as a usable network by the provider. • Always select the public network option when prompted while setting up the Internet connection. • Read the network’s terms and conditions, if displayed, and be familiar with its security and associated liabilities. • Use a virtual private network when accessing your agency’s system. • Purchase and use a wireless Internet card from a wireless carrier.

Create a security-minded agency culture. At your agency, employees should understand major information security risks, which are explained in a security plan and procedures. It is also critical to understand state and federal privacy and data breach notification laws that are applicable to your agency. Train your employees so they are aware of the security risks facing the agency—or in the words of Franklin, a healthy sense of “distrust and caution.” Kate Gluck is director of marketing and Paul Fuller is executive vice president, product management, for Strategic Insurance Software. The full version of this story, which includes more security tips, is on the Agents Council for Technology website.

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

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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. And giving you even organizations. we’re notcare finished. Our focus remains on more to about Lovelace day.giving you even bringing thelove best health care to every you. And more to love about Lovelace every day. It’s proof positive that we’re changing the way healthcare delivered. It’sisproof positive that we’re changing the way healthcare is delivered.

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The Digital Shopping Mall: Be There or Be Nowhere

An agency website should be more than an online brochure to appeal to Web-savvy consumers.

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hink your agency website only needs to provide a general overview of services, essentially acting as an online brochure? Consider these facts:

by Marty Agather

• 20% of all consumers currently purchase their auto insurance online. • 58% of Generation Y, or millennials (everyone born from about the early 1980s to the early 2000s), use carrier websites to gather information on insurance. • 48% of younger users gather quotes directly from carrier websites. • While 52% of all life insurance purchasers prefer to buy directly from an agent, 21% prefer to make this important financial purchase online. Sources: Comscore 2011 Online Auto Insurance Report, 2011 JD Power Shopping Study, Accenture. As your youngest prospects (those most comfortable with online shopping) continue to age, the volume of online business transactions will likely continue to rise. So what are the minimum requirements to compete in this virtual mall?

Make your agency easy to find online. This requires

you to produce and update content for your site. If you have a blog, at a minimum post weekly. Keep your blog conversational, fresh and relevant. Avoid a hard sell, positioning yourself instead as a trusted resource, so that a customer ready to buy will think of you first. An Accenture study found that 75% of purchasers rank trust as a primary measure of selection. Ultimately, if consumers trust the agent, they feel better about their purchase decision and are more likely to remain loyal. Steady, valued communication is a key element to building this trust. It doesn’t happen overnight.

Update your website regularly through news content and links. Liking, following or leaving replies on other sites are simple ways to build your online footprint. Select online tools that best suit your purposes. If you are seeking to engage the public through a community service project, Facebook is a natural choice. Trying to entice major business clients? Focus on LinkedIn, or post whitepapers on topics that demonstrate your expertise in a particular specialty. The goal is to make your agency visible, accessible and relevant. Tools from Project CAP can help simplify your task. As the

launch of its consumer portal nears, get your other online material in place and ready for customer review.

Ensure that you’re speaking with one voice, and presenting your brand with a consistent, positive, cohesive effort. If you feel as if you have too much on your plate, concentrate on only one or two online efforts. It’s better to execute a few online projects well than to dabble halfheartedly in many. Any work now will pay off later. When the consumer is ready to shop those virtual shelves for insurance, your products and your brand will be right at eye level—ready to be pulled and put into that prized shopping cart. So, ready or not, the online, virtual shopping mall is in place. People are already accustomed to making purchases, or at least window shopping virtually. And this trend isn’t slowing—it’s accelerating. In fact, statista.com found that in 2010, 172.3 million Americans were online shoppers and had at least once browsed products, compared prices or bought merchandise online. During that year, e-commerce sales amounted to $228 billion. What’s more, the researchers at Statista project a 20.6% increase in just six years to 206.8 million online shoppers by 2016. The train, as they say, has left the station. Are you on board? Project CAP is offering special digital marketing packages to help agencies and producers connect with consumers online and achieve new levels of success this year. To learn more, visit dmm.projectcapmarketing.com.

Marty Agather is vice president of client development for Project CAP. Project CAP provides digital marketing tools and services to help independent agencies, brokers and insurance carriers build their online brands and visibility in order to attract and interact with today's digital consumers. Project CAP was created through an alliance of the Big "I" and affiliated state associations, Trusted Choice® and insurance carriers to expand the independent agent's share of the personal lines insurance market.

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

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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!)

Rating Services Your Agency Should Be Using Prior to just a couple of years ago, if a client had a good experience with your agency they might have told a few of their friends. Positive word of mouth would spread - although slowly - and you might get a few referrals. Today, word of mouth - both positive and negative - spread as fast as electrons can travel. Someone "likes" your agency on Facebook and their friends and family see it. There are many social platforms where people share information on businesses they like. Consumers have a voice today unlike any time in the past. Ratings and review sites make it easy to take it a step further, allowing consumers to rate and share things they do with friends as well as complete strangers. No longer do customers have to take a chance on bad service or products. While driving around town, they can search for places nearby that friends and large numbers of strangers have rated. This is a prime opportunity for your agency. Following are a few sites where you might want to "claim your business" and monitor and encourage your satisfied clients to talk about your agency. Yelp: A popular local information provider, especially in larger cities, Yelp is listed as having at least 54 million unique visitors per month. Unfortunately, as with any of these services, it's important to note that the reviews are not moderated, so anyone can say anything. If a negative review is posted, there isn't much you can do about it. Since the site does have such a large user base, it's a great resource for marketing your agency.

Local.com: Like its name, Local.com is set up to help localize the Internet. Since many consumers simply want to know about businesses in their own local area, Local.com allows a user to stay in his or her neighborhood. In addition to providing information about local businesses, the site also provides coupons and discount information. When you log in to the site, it automatically loads your own area's information based on the data it gathers about your location. Encourage your best customers to post reviews in order to help new customers find you while searching the site. Taap.it: "Taap.it helps you look further inside a place," Taap.it's community manager Debbie Tran says. "The process of discovery, review, and documentation are pretty much the same with Yelp or Foursquare, who provides reviews and tips on places. But Taap.it is all about the interesting things; items, dishes, decorations, or just any details inside those places." This app turns ratings and reviews into a fun game, offering points for each review you post. Those points can be traded for real-life gifts, like $20 coupons and free food items. Manta: This site is specifically geared toward small businesses. Think of it as local social networking for the small business community. Not only will you be able to get the word out about what you are doing to the consumer market, you'll be able to network with other small businesses in your community in order to build a strong alliance.

Merchant Circle: This site can help you in several ways. It allows you to list your agency and be found by local shoppers. You can also network with other small businesses in your community and across the country. Merchant Circle's Page 12

services aren't just limited to its own website. It also helps you get listed with the top search engines and just might help send new customers your way.

Being able to compete effectively with the larger online insurance companies can be challenging, to say the least. By making sure your agency is listed on as many local sites as possible, you'll be able to reach out to consumers in your own community and maximize your marketing efforts.

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


Check for TLS Email Encryption Protecting private client information should be a top priority for any insurance organization. The consequences of a data breach can be significant. Using unencrypted email to send private client information to insurance company underwriters continues to be a vulnerability. An easy first step to plug this vulnerability is to implement TLS (Transport Layer Security) wherever it is available. TLS creates an encryption tunnel between two email servers that both have TLS active. When TLS is in place, users from both parties can send email to each other without doing anything extra to encrypt the email or its attachments. Passwords are not required to open a given email message or attachments. This greatly simplifies the process for protecting confidential information, because no extra steps are required by the sender or receiver. But, how do you determine which organizations have TLS enabled on their email servers? Fortunately, there are a couple of options available. The first option is to look on the ACT (Agents Council for Technology) website where they have listed insurance companies that have enabled TLS encryption on their email servers. But, this site only lists carriers that have provided this information to ACT. The second option is to use a TLS testing service like CheckTLS.com. This site has several different tests you can use to determine which people you sent emails to have TLS implemented on their email servers.

The Basic Receiver Test allows you to test an individual email address and a report about the TLS encryption available for that email address. As you can see below, the summary information is very nice. My certificate could not be verified because my Outlook Exchange server is hosted. However, this report does confirm that emails sent to me will go by TLS protocols as long as the sending email server is also TLS-enabled. If you are interested, there is a fair amount of technical information following the summary. The above services are free. There are additional paid subscription levels: • Individual: Free • Professional: $10 per month or $100 per year • Corporate: $25 per month or $250 per year An agency told me they signed up for the corporate version so they can set up recurring batch testing of email addresses to determine which are secure and which are not. They also will include documentation in their Information Security Plan on how to use this website to determine if an employee can send secured information by email. This same agency also exported a list of insurance and brokerage email addresses from their agency management system database and did a batch test of 1,660 email addresses to determine how many were hosted on TLSenabled email servers. After culling out the bad email addresses, only 70 of those email addresses were on email servers that did NOT have TLS enabled. So, almost 96% of their insurance company/brokerage partner relationships use email servers that have TLS enabled on them. TLS is a simple and easy way for any insurance organization to properly secure the information that flows between them and their insurance company partners.

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

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


Taxes What’s New for Agents & Consumers?

The ‘fiscal cliff’ legislation includes provisions affecting agencies, life insurance and retirement. Major debates on federal spending and debt lie ahead, as the recent “fiscal cliff” legislation excluded measures to significantly cut expenses and increase revenues. But while the law—the American Taxpayer Relief Act—left most people’s tax bills largely unchanged, it also included some lesser-known provisions, including those affecting independent insurance agents and their clients in 2013. What’s in the legislation? The American Taxpayer Relief Act, signed into law Jan. 2, maintains income taxes at similar levels for most taxpayers. It preserves the Bush-era tax rates for individuals with incomes under $400,000 and for families with incomes under $450,000, and brings back the 39.6% tax rate for incomes in excess of those amounts. In addition, the act provides a permanent patch for the alternative minimum tax, continues a number of expired tax extenders, increases the maximum capital gains and dividend tax rates to 20% and sets the estate/gift tax at 40%. Many of these changes were anticipated, although the maximum dividend tax rate of 20% was a pleasant surprise for higher wage earners. However, the employee payroll tax holiday rate (4.2% in 2011 and 2012) is not extended for 2013. That means virtually all working Americans, particularly low- and middle-income wage earners, are taxed at the usual—and higher—6.25% rate. What does it mean for agencies? The capital gain rate was more favorable than expected. For agency owners considering selling their businesses, the rate (plus, if applicable, the new 3.8% Medicare tax from the Patient Protection and Affordable Care Act) will presumably be lower than their ordinary income tax bracket. Most agency owners will not be affected by the higher income tax rates because the 39.7% tax bracket begins at $400,000/$450,000 income levels. With regard to business-specific provisions, Code Section 179 with Small Business Expensing is enhanced and extends through 2013. Also, a 50% bonus depreciation provision applies for 2013 for qualifying expenditures.

by Dave Evans

What should clients know? One particular tax-favored vehicle, life insurance, has not been affected. In fact, the legislation actually enhances the use of cash values of permanent life insurance. The chief purpose of life insurance is the income-tax-free death benefit and liquidity it provides upon the death of the insured. However, when there are other savings objectives, permanent life insurance can provide a tax-deferred investment vehicle, which can complement other savings that an individual may have as part of their overall investment portfolio. Life insurance is also an important and efficient way to pay for estate taxes, which have been in a state of flux going back to 2001. The American Taxpayer Relief Act set the maximum federal estate tax at 40%—which is lower than the scheduled 55%—with an exemption at $5 million per person, indexed annually for inflation. This will hopefully provide some sense of certainty for estate planners and life insurance agents. If you have commercial and personal lines clients with estates that will reach the threshold, discuss their needs and how, when properly structured within an irrevocable trust, life insurance can pay estate taxes in an efficient way. Meanwhile, effective in 2013, 401(k) participants can convert their regular before-tax 401(k) balances to a Roth 401(k) account, if their employer offers that option under their plan. Roth 401(k) accounts can be withdrawn income-tax-free in retirement and are not subject to the minimum distribution requirements that regular 401(k)s and IRAs are subject to when the account holder turns age 70 ½ (and is no longer working, if he has a 401(k) plan but does not have ownership in an agency).

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

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$1,000,000,000 CELEBRATING ONE BILLION IN WRITTEN PREMIUM! DOUBLE DIGIT GROWTH has pushed ACUITY over the $1 billion revenue mark! In the past 14 years, we’ve quadrupled our written premium and you are responsible for that. Thank you! We have the agents, employees, and strategic plan to allow our growth to keep compounding on the path to becoming a multibillion-dollar insurer.

www.acuity.com Page 16

facebook.com/acuitywow For All That Matters Independent Insurance Agents of New Mexico - www.iianm.org - * March 2013


Unclaimed life insurance benefits top $1 billion I

By Herb Weisbaum, TODAY contributor

n this age of data bases and search engines, it’s hard to imagine that anyone could be the beneficiary of a life insurance policy and not receive the money. But it happens all the time. Consumer Reports investigated the problem of lost insurance policies for its February issue. They found there’s currently about $1 billion in life insurance benefits waiting to be claimed by beneficiaries. “The average unclaimed life insurance benefit is $2,000, but some payouts have been as high as $300,000,” senior editor Jeff Blyskal told me. The magazine calculated the odds that you are owed money from a lost, forgotten or unknown policy are about one in 600. Why is this happening? Sometimes it’s a communication problem. All too often, people buy life insurance and don’t let their beneficiaries know about it. But Consumer Reports points a finger at the insurance industry. “Over the years, insurance companies have not made much of an effort to find these people,” Blyskal said. “When one of their policy holders dies they don’t always go looking for the beneficiaries.” In 2011, New York State began looking into how life insurance companies handled their claims. Last week, Governor Andrew Cuomo announced that this investigation has resulted in more than $665 million being paid to more than 89,000 people across the country. “It’s only fair for families and individuals who lost loved ones to receive life insurance benefits they are entitled to,” Gov. Cuomo said in a statement. New York’s findings match what California regulators discovered in audits of insurance companies going back to 2008. They found “an industry-wide practice of failing to pay death benefits” even though the companies had access to federal death records. And in some cases, payments were withheld despite direct confirmation from relatives that the policyholder had died. Worse yet, some companies continued to collect premiums after the policyholder died and the payments stopped by drawing down the policy’s cash reserves. Once the reserves were gone, the policy was cancelled. "For decades, too many insurers have fleeced their policyholders," said California State Controller John Chiang in a statement. Insurance companies agree to change their ways

Six big insurance companies have now settled charges brought by a multi-state task force looking into this payout problem. AIG, Forethought, John Hancock, MetLife, Nationwide and Prudential have agreed to use the Social Security Administration’s Death Master File to find beneficiaries. When beneficiaries cannot be located, payouts will be turned over to state unclaimed property offices. As part of a settlement with Florida, AIG recently turned over more than $25 million in unclaimed life insurance benefits. “These new accounts represent dollars loved ones set aside to secure financial stability for their families,” said Florida Chief Financial Officer Jeff Atwater in a statement. “Holding companies accountable means these dollars will now be returned to their rightful owners across the state.” The life insurance industry acknowledges the problem of unpaid benefits, but insists it’s a relatively minor one. How to find and collect an unpaid life insurance benefit Do you think you might have been named as a beneficiary by someone who died more than a few years ago? Visit missingmoney.com where you can search records for 38 states, the District of Columbia, Puerto Rico and most of Canada all at once. Or go to unclaimed.org, the website of the National Association of Unclaimed Property Administrators, to access individual unclaimed property offices. You should check all the states or Canadian provinces where the deceased lived and may have purchased a life insurance policy. The American Council on Life Insurance also has detailed information on its website about finding a Missing Life Insurance Policy. Of course, communication can help prevent these lost payouts from happening. “If you take out a life insurance policy, let the beneficiary know,” advised Steven Weisbart with the Insurance Information Institute. “You don’t have to tell them how much money is involved, but you ought to tell them that they are the beneficiary of an insurance policy, who the insurance company is and how to find them.” The American Council of Life Insurers has a new My Insurance Log tool on its website, to make this easier.

SB312, sponsored by Senator Carroll Leavell seeks to remedy this problem.

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

Page 17


Union Standard Insurance Group®

League of Heavy Hitters

Union Standard is committed to working with young independent agents because they are the future of our business. That’s why we are partnering for success with New Mexico’s Young Agents. Union Standard recognizes the need to foster the growth of new talent to perpetuate the Independent Agency System as well as provide young agents a competitive advantage.

Union Standard and the League of Heavy Hitters, Now that’s a Winning Team!

POW, BAM...WOW!

Congratulations 2013 League of Heavy Hitters Anna Byers Brad Tillotson Chad Hewitt Charlie Estrada Jeff Wilson Joe Cito Joe Menicucci Kelly Mancha Michael Dennis Michelle Wilson Mike Parisi Robert Lilley Ryan Brennan Sadie Ary Samantha Sanchez Tanesha Vigil Will Gorham

J. S. Ward & Son Cress Insurance Consultants J. S. Ward & Son Pat Campbell Insurance Insurance One Berger Briggs Berger Briggs Insurance One Free Market Insurance Meridian Financial Holdings Western Assurance Wells Fargo Berger Briggs Free Market Insurance J. S. Ward & Son Rio Grande Insurance Wells Fargo

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PRESENTED BY

Young Agent Spotlight! The first Young Agent Spotlight in our 2013 series is Joseph Menicucci of Berger Briggs Real Estate & Insurance. Joseph is an Albuquerque native, a graduate of St. Pius X High School and alum of Benedictine College and New Mexico State University. He is the son of John and Muffin Menicucci, has two older siblings, John Jr. and Janea, and a younger brother Jason. In his “spare time” he enjoys sports, hunting, fishing, outdoors and sporting clays. Joseph currently sits on the Board of Directors of St. Pius X High School Foundation, Golf Committees for Associated Builders and Contractors, American Subcontractors Association, AND he is the President of the League of Exceptional Gentlemen.

Can you tell us a little about your current responsibilities? Joe: I am a Business Insurance and Contract Surety Sales Agent. I also manage the Bond Department for construction contractors.

How and why did you choose insurance as your career? Joe: My passion for the opportunity to sell products and my financial background really helped my decision to be in the business. I also enjoy meeting and helping multiple clients, especially creating business relationships that assist others in their quest for success. Working in the industry also allows me to create my own schedule. Additionally, Berger Briggs has been around since 1937; I have grown up with this institution in my life. I have always wanted to work here, so this is just another benefit to being a part of this industry.

Do you have any influences/role models that have helped to shape your career? Joe: My father, John, who is an honest and ethical businessman. The leaders of Berger Briggs, who have enjoyed continued success, set great standards and have supported me through everything that I have wanted to accomplish.

Young Agent Tips For Confident Cold Calling Be well prepared. Being well prepared not only enables you to make more targeted and more professional calls, but it also increases confidence because it helps you to know that you are going to make a great call. Maintain your intensity levels. Cold calling is more proactive, more productive and more fun when you keep up a healthy pace and a high level of intensity and energy. Challenge yourself to “go for it” and maintain your intensity levels every time you are on the telephone. Sit up, or better still, stand up, when on the phone. This is a particularly useful tactic at the start of cold calling sessions or when you are feeling your enthusiasm beginning to cool off. Sitting up or standing up will inject much needed energy and vitality into your calls. Don’t put the phone down between calls. Putting the phone down between calls can slow you down and impede your motivation. Keep the energy going by keeping the phone in your hand once you start your cold calling sessions. Keep asking yourself, “What can I do better next time?”

What do you think are the key challenges that young professional agents face in our industry?

The most important things in your life are worth recording. That’s why many top salespeople keep a sales success logbook. Record what works, what doesn’t, what you learned, what you’re proud of, how you are going to do things differently next time…

Joe: Conquering the “Cold Call” and the ability to get your foot in the door with a potential client. Calling on someone or just dropping off a business card is hard. Finding an opportunity to break through the long-standing relationships to become a part of them is difficult.

Make cold calling one of your sales success habits. Cold calling is something that you should do all of the time not just when you don’t have enough business.

Cold call consistently, even when you have enough business.

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

Page 19


The

devil made me do it!

ulty

VU Fac

Virtual University’s Ask an Expert

If you recall the old Flip Wilson TV show, he had a recurring sketch with the theme "The devil made me do it!" In the routine, his alter-ego, Geraldine, would get into trouble, then disclaim responsibility, blaming it on the devil. Too often, this happens in our business when liability is denied by the carrier. In this article, we'll take a look at a claim where there was clearly coverage under the policy... however, the carrier denied the claim, taking the position that the insured was not liable.

"Our insured is a car wash. The company has an endorsement on the CG 00 01 07 98 giving "ccc" coverage. A new Tahoe is damaged going through car wash ($2500). Somehow a piece of fishing line with a hook and lead weight got caught up in the brushes, and banged the heck out of the Tahoe. A pick up truck was just ahead of the Tahoe, and the car wash owner suspects that the line got tangled in the brushes from some fishing gear in the back of the pickup. The adjuster is refusing to pay the claim, saying the car wash wasn't legally liable for that...it was "just an accident." The adjuster also says it's even possible that an employee may have done it to sabotage the car wash and/ or that car wash should have been more careful about such things, but in no case are they "liable." Do I need to go back to Insurance 101, or is this adjuster (agent says she is very experienced) off the mark?"

Too often it seems that some adjusters try to figure out some way to avoid paying a claim by denying the insured was legally liable. Juries decide legal liability based on the facts and circumstances of the case so, if a suit is filed, the company will have to defend and the defense and court costs will unquestionably exceed $2,500. In a mutual benefit bailment, the bailee is responsible for ordinary care and negligence, and that's the issue here. Is the adjuster qualified to determine the degree of care owed by the car wash? Is there any kind of hold-harmless agreement on the ticket? It seems that a car wash should know that objects in the beds of pickup trucks could be thrown into other vehicles and it seems reasonable that the car wash employees should inspect vehicles for loose objects or at least warn the truck owners to remove such objects. I suspect that both the car wash and truck owner have some liability and that a court would find such. So, the adjuster can deny the claim, but if a lawsuit is filed alleging negligence on the part of the car wash, they've got to defend. I'd suggest that, in the future, the car wash procure a bailee's customer policy that provides all-risks coverage for damage to customers' property. Note: Another article that addresses this issue is: No Fault, No Coverage.

Ask an Expert is a Big “I” Members Only resource. Members using the Big “I” University sometimes need answers to questions that they can’t find in the Research Library, Classrooms or Student Lounge. In such instances, we have a volunteer faculty of experts who can usually answer, or find an answer, to your questions. Page 20

If you need help with your log-in information, email rachel@iianm.org.

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


M O U N TA I N S TAT E S INSURANCE GROUP® Underwriting Appetite

Mountain States’ underwriters have the skills, flexibility and decision-making abilities to provide insurance to meet our customers’ needs. We are known in the Southwest region as commercial construction specialists, but we have a broad risk appetite, and entertain many different types of accounts. Our underwriters are versed in all classes of businesses and work closely with our agents to place quality risks. RETAIL/WHOLESALE

HOSPITALITY

Furniture Stores

Luxury Hotels

Hardware Stores

Franchised Hotels/Motels

Building Materials Dealers

Bed and Breakfasts

Grocery Stores

Conference Hotels

Auto Accessories

Inns

MANUFACTURING

RESTAURANTS

Sign Manufacture

Cafés & Bakeries

Machine Shops

Delicatessens

Metal Goods Manufacture

High-end Dining

Concrete Products

Family Style Restaurants Franchised Restaurants

CONSTRUCTION

SERVICE

Electrical Contractors

Packaging

HVAC Contractors

Auto Body and Repair Shops

Glaziers

Janitorial

Metal Building Construction

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Garage Door Installers

Water Companies

Landscapers

Stable – Secure – Permanent www.msig-nm.com – 505.764.1400 5051 Journal Center Boulevard N.E., Albuquerque, New Mexico, 87109 Independent Insurance Agents of New Mexico - www.iianm.org - * March 2013

Page 21


Big ‘I’ Federal Political Action Committee Beefs up Web Presence Independent agents can take action at www.insurpac.com.

As the political world becomes more technologically advanced, InsurPac is embracing that change and upgrading its Web presence. Now, independent agents can access valuable content and take action by visiting www. insurpac.com. The upgraded webpage allows visitors to see where their state ranks in terms of federal political involvement and, when logged in, see who in their state is a major InsurPac booster. Did you know that, in 2012, North Carolina agents invested the most money to InsurPac? Did you know that North Dakota led the country in most dollars invested per member agency? Where does New Mexico rank? More than 5,000 independent agents came together to support InsurPac in the 2012 election cycle, helping raise more than $1.8 million. That money was disbursed to nearly 300 federal campaign committees, helping elect officials from both sides of the aisle that understand and appreciate the independent agency system. While this was significant participation, InsurPac’s goal is to become a $1-million PAC per year and multimillion PAC per two-year election cycle. Today it is more important than ever to be engaged in the political process. The federal government is making decisions every day that affect the insurance market. Please visit www.insurpac.com to learn more about the federal political action committee for independent agents. Nathan Riedel is Big “I” vice president of political affairs.

Page 22

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


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: 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 - * March 2013

Page 23


As someone who has been in sales for over 24 years, and now as a sales trainer, speaker and coach, I continually hear debate over the following five sales myths. In this article I will expose and throw light on these top sales fairy tales.

The Top Five Sales Myths

D E de BUNK Sales Myth #1:

Sales is NOT a numbers game. by John Chapin

For access to John's free monthly newsletter and white paper on what it takes to be successful in sales, visit John's website at www.completeselling.com Have a sales question? E-mail John at johnchapin@completeselling.com John Chapin’s specialty is helping salespeople and sales teams double sales in 12 months. He is an award-winning sales speaker, trainer and coach, a number one sales rep in three industries, and the primary author of the gold-medal winning "Sales Encyclopedia". In his 24+ years of sales, customer service and management experience, he has thrived in some of the toughest markets and economies.

Page 24

The more people you talk to, the more business you will do; even a blind squirrel finds a nut if it keeps looking. Granted, you want quality behind the numbers and, depending upon your business, it may be helpful to do some research on the person you’re calling before you call. That said, in order to be successful in sales you need lots of good solid relationships and the only way to get those relationships is to go out and talk to lots of people. The bottom line is: if you talk to enough people during the day, you will eventually run into someone who says, “I need what you have” or “I know someone who needs what you have.” Know the number of people you need to talk to during the day in order to be successful, and then go out and talk to that many people and more.

Sales Myth #2:

Cold calling is a waste of time and doesn’t work. In over 24+ years I’ve built four different businesses primarily through cold calling. Cold calling is simply the fastest, most pro-active way to get leads. The reality is: if you are new in business or struggling, it’s more than likely you don’t have enough leads and you’re not getting enough through networking, referrals, and other sources... Time to cold call. Yes, cold calling is the most difficult, most time consuming task you can do, yet unless you have millions of dollars to spend on marketing campaigns, cold calling yields results like no other prospecting method. Also, cold calling builds character and keeps you grounded. The reality is: if you can cold call effectively and with confidence, nothing will stop you, you will be able to do any other sales task you need to do in order to be successful. That is why I recommend you never stop cold calling even when you are extremely successful. Granted, you may only make one or two cold calls a week at that point, but this will keep you sharp and on your toes. Independent Insurance Agents of New Mexico - www.iianm.org - * March 2013


Sales Myth #3:

Friday afternoon is a bad time to call on prospects and clients. Most salespeople believe that prospects either take Friday afternoons off or, if they do work, that they don’t want to be bothered by salespeople at this time. This is simply not true. Not only do most prospects work on Friday afternoons, they are also in a better mood at this time than at any other time during the week. As a result, Friday afternoon is a great time to prospect and close business. In addition, because most salespeople don’t make calls at this time, you will stand out as someone who is dedicated and hard-working. The bottom line is: Friday afternoon is one of the best times to prospect and close business.

Sales Myth #4:

A good salesperson can sell ice to Eskimos. The premise here is that a good salesperson could sell someone on something that is so obviously not needed. Nothing could be further from the truth. Top salespeople, over the long haul, don’t take advantage of people by selling them something they don’t need. Top salespeople make it all about the other person and they always do what is best for them, even to the point of sending someone to the competition on rare occasions. That said, are their some “temporary” sales successes who take advantage of people and make lots of sales by selling them items they don’t need? Yes. But in the long term those people get caught, burn out, find that their personal lives are in shambles, or a combination of all of these. The bottom line is: you can’t take advantage of people for long and live a happy, fulfilling, successful life. The top salespeople are honest, have integrity, and focus completely on the other person. They only make the sale if it is a win-win.

Big “I” Young Agents The future of the independent agency system YAC Chat Webinars We have a welcoming and educational environment for young agents entering the insurance industry. The national Young Agents Committee is offering a series of free webinars presented by award-winning young agent committees from all across the states.

Sales Myth #5:

The customer ISN’T always right. Salespeople I’ve seen with this attitude seem to have a chip on their shoulder. It’s an attitude of arrogance in which they seem to believe the customer should be privileged to be doing business with them as opposed to the other way around. If you have a mindset that the customer isn’t always right, chances are great that you will not go above and beyond, you will not do more than expected, and you will not deliver top-notch, second-to-none follow-up and service after the sale. If you do not do everything within your power to ensure the customer has a great experience, odds are they will have a mediocre experience at best and you will never stand out. That said, is the customer always right? No, but you’d better walk into that conversation convinced they are, or they will pick up on your suspicion and indifference quickly and as opposed to running into that 1% of unreasonable people, you’ll find the number closer to 50%.

March 14 - 11am MT: Outstanding Membership Development, The Young Agents Committee of the Independent Insurance Agents of Indiana, Inc. April 11 - 11am MT: Outstanding Communications: Young Agents Committee of the Independent Insurance Agents of North Carolina May 09 - 11am MT: Outstanding Meeting: Young Agents Committee of the Independent Insurance Agents of Arkansas.

Click here to read full descriptions and to register

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

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Part 1

ISO Commercial Property Changes:

Which Coverages Are Broader? Ted Kinney, Director of Education & Technical Affairs for AIIA .

Provisions include debris removal, extended business income and coverage radius.

T

he Insurance Services Office has made more than 40 changes to its commercial property policy forms and endorsements. The forms, which have an edition date of October 2012, will be effective in most states on April 1. Agents need to be aware of the changes, especially any reductions in coverage, to curb their errors & omissions exposure. In addition, not all companies are adopting them, so check with your carriers to find out if they’re using the new forms.

Coverage Radius When a described premise for tenant’s property is identified in terms of a room or suite instead of a building number or location address, coverage currently extends 100 feet from the described premises. The change states that the radius will be 100 feet from the building or 100 feet from the described premises, whichever distance is greater. This change applies to your business personal property, personal property of others and business income.

Below are some of the changes that broaden coverage:

Entrusted Property Exclusion 2.h. in the special cause of loss form excludes loss or damage caused by or resulting from dishonest or criminal acts by “anyone to whom you entrust property for any purpose,” which could apply to tenants or bailees. The revision distinguishes between those who have a role in the insured’s business—partners, managers, employees—and others to whom property may be entrusted—tenants and bailees. The exclusion is narrowed to apply only to theft to any person “to whom you entrust property.”

Changes in the Policy Form Debris Removal Additional Coverage This change adds removal of other debris (other than covered property debris) that is on the described premises when caused by a covered cause of loss. The coverage does not apply to the cost of: • Removing debris of insured’s property not insured on the policy, or property in the insured’s possession that is not covered property. • Removing debris of property owned by or leased to the landlord, unless there is a contractual obligation to insure and the property is insured on the policy. • Removing any property not covered, including property addressed in the outdoor property coverage extension. • Removing property of others of a type not covered on the form. • Removing deposits of mud or earth. When no covered property sustains direct damage, coverage for removal of debris of others’ property is limited to $5,000. The additional limit is increased from $10,000 to $25,000. In addition, the outdoor property extension is revised to include debris removal of trees, shrubs and plants not owned by the insured—except when the insured is a tenant and the trees, shrubs and plants are owned by the owner of the described premises. This is broadened coverage for removal of certain property of others, and increased additional limit of insurance and trees, shrubs and plants that are property of others. Extended Business Income, Extended Period of Indemnity The business income forms are revised to double the number of days for extended business income at the end of the “period of restoration” from 30 days to 60 days. Any additional days provided by the extended period of indemnity option will begin after the automatic 60-day extension. Page 26

Wear and Tear Exclusion—Special Form The current form excludes wear and tear unless the wear and tear results in a “specified cause of loss.” Coverage is being expanded for water damage in the “specified causes of loss” to include accidental discharge, leakage, water or waterborne material as the result of the breaking apart or cracking of certain off-premise systems due to wear and tear. The provision in the form is revised to make it explicit that there is no coverage for losses that are otherwise excluded under the terms of the policy’s water damage exclusion. Changes to Endorsements Debris Removal; Outdoor Trees, Shrubs and Plants Under the debris removal additional coverage in the policy form, the additional limit has been increased from $10,000 to $25,000. The form also revises the outdoor property extension to include debris removal expense for trees, shrubs or plants not owned by the insured, or, if the insured is a tenant, by the insured’s landlord.

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


Debris Removal Additional Insurance (CP 04 15) The endorsement is revised to reference $25,000 as the underlying amount of additional insurance. This revision does not change the coverage. Outdoor Trees, Shrubs and Plants (CP 14 30) The endorsement is revised to specify that the applicable limit of insurance for loss or damage includes debris removal expense. The revision broadens coverage to include debris removal expense. Business Income Report/Work Sheet (CP 15 15) The extended business income and extended period of indemnity provisions in the business income form have been changed to increase the number of days from 30 to 60. The work sheet is being revised to reflect the change to 60 days. There is no ISO Reduces Coverage for change in the usNewly Acquired Property age of the report/ The current forms, under Coverage worksheet. Extensions, provides up to $100,000 Specified Property Away from Premises (CP 04 04) CP 04 04 Specified ISO decided this is more appropriBusiness Personal ately handled by a change form or a Property Tempovalue reporting form. Therefore, the rarily Away from extension is being removed, which Premises is being represents a reduction in coverage. introduced to pro~T.K. vide coverage for property temporarily away from the described premises in the course of daily business activities, such as a laptop while it’s off-premises.

for newly acquired business personal property for the earlier of policy expiration, 30 days or when values are reported.

The property must be described in the schedule and a limit must be entered. It is not intended to apply to sales activities and does not cover property held by salespersons. Also, it does not apply to property in the care of a common or contract carrier or bailee for hire. Theft from a vehicle is covered if there is evidence of theft. The exclusion of waterborne or airborne property is reiterated and the policy territory applies. There could be some overlap

with other policy provisions, such as the property off-premises extension and property in transit additional coverage extension. In such cases, the endorsement specifies the insured can elect to be paid under the provision that affords the most coverage, but will not be paid under more than one provision. This is the first story in a three-part series on 2012 revisions to policy forms and endorsements.

Click here to read Part 2: ISO Commercial Property changes that represent new coverage.

Click here to read Part 3: Revisions that are expected to leave coverage unchanged.

For more information on the October 2012 edition ISO commercial property form and endorsement changes, including other revisions that broaden coverage, watch a recorded webinar from the Big “I” Virtual University.

Webinar to Explain 2013 ISO CGL Changes Register for the April 10 webinar to learn about new coverages and endorsements. For the first time in six years, ISO has made numerous changes to its commercial general liability policy forms and endorsements. There are about a dozen coverage form changes and more than 80 new or revised endorsements, including major changes in additional insured endorsements, a revision of the liquor liability exclusion for BYOB establishments and pollution exclusion changes. The Big “I” Virtual Univeristy will highlight some critically important coverage gaps and issues in the CGL program during the April 10 webinar, Be Careful What You Ask For… The NEW 2013 ISO CGL Changes. Registration is now open. Tuition is $59 per internet connection, so you only pay a single fee for your entire staff to attend the broadcast in a conference or meeting room at your agency. If you are in a state that files this program for CE, there may be a per person cost due to regulatory requirements. Tuition also includes: • An 18-page white paper on the CGL changes. This webinar is limited to about one hour and focuses on the major CGL changes in the ISO filing. There may be other changes of interest to you. For that reason, webinar attendees will receive a detailed analysis of the changes written by Ted Kinney, CIC, CPCU, ARM, AU, AAM, AAI, AINS, CPIA, CRIS.

• Access to the archived webinar recording. • A copy of the PowerPoint presentation. • A post-webinar Q&A document. • A chance to receive a free copy of the 645-page “General Liability Insurance Coverage: Key Issues in Every State” reference book by Randy Maniloff and Jeffrey Stempel. Email webinar staff with questions.

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

Page 27


A

rizona lawmakers last year were debating a law laying out guidelines for an up-and-coming technology: selfdriving vehicles. Then they got to a question they couldn't steer around: Who is to blame if a driverless car gets in a

wreck?

When there is no driver, the answer turns complicated, and the possible targets of lawsuits expand. Is it the company that designed the technology? The car's owner, or a passenger who should have assumed control? The automaker? Concerns from the last group helped keep a bill introduced last year by Arizona State Rep. Jeff Dial from leaving committee. "Their concern is that somebody comes along and modifies their vehicles, and they could be held liable if that technology doesn't work," said Mr. Dial, a Republican.

Vehicles developed 22 pages of rules governing driverless vehicles and licensed Google, Audi and auto-parts maker Continental AG to test them on public roads, said DMV director Troy Dillard. So far, Nevada doesn't allow self-driving cars for anything but testing. The vehicles must first go through 10,000 hours of testing on closed tracks, and the tester has to put up a bond of at least $1 million to cover any potential liability. Special licenses for private owners of driverless vehicles are on the horizon, Mr. Dillard said. "Autonomous vehicles 1.0 is what we've come up with." Bryant Walker Smith, a lecturer at Stanford Law School who has studied driverless vehicles, said the new laws leave many issues unaddressed. In part, that is because fully driverless vehicles are years away.

Liability Issues Create Potholes on the Road to Driverless Cars The skirmishing over laws to allow self-driving cars is a lesson in the difficulties that arise when new technologies run into the dollars-and-cents concerns of corporations. Fully driverless cars that can move you from home to work with the push of a button are years away, experts say. But automakers and technology companies including Google Inc. have been testing the technology for years and say it can lead to safer, faster and less polluted roads.

"We don't actually have a fully self-guided car," Mr. Smith said. "We don't know how various aspects of that will be introduced. We don't know how they will ultimately perform or what 'safe' is . . . . It would be much easier to analyze the legal uncertainty if we had an actual product out there."

Liability was the sticking point in Arizona, said Mr. Dial, the state legislator. After he introduced his bill, he was contacted by a local representative of the Alliance of Automobile Manufacturers, the auto industry's main trade group, which raised the questions about automaker liability. Last week, he introduced a new bill that he hoped would allay those concerns, though now he is getting ques-

(Source: Dow Jones)

At the Detroit auto show this month, Nissan Motor Co. Chief Executive Carlos Ghosn predicted that driverless cars would be in showrooms by around 2020. Audi AG and Toyota Motor Corp. showed off self-driving technology at the Consumer Electronics Show in Las Vegas this month. Some states are starting to consider how the legal landscape should change for vehicles in which a driver isn't always in control. Arizona is one of more than half a dozen states that have weighed bills for the driverless road. But only California, Nevada and Florida have passed laws on the subject. And most of those measures haven't reached far. The main effect of a law passed in California last year was to direct the state's Department of Motor Vehicles to come up with rules by 2015. Florida's Legislature last year gave its motor-vehicle agency until 2014 to prepare a report on the cars. Nevada, where legislators have gone the furthest, in 2011 became the first state to pass legislation on the topic. At the Legislature's direction, Nevada's Department of Motor Page 28

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


tions from the insurance industry, he said. "You're seeing more and more people interested in developing these cars," Mr. Dial said. "I would like to just put some clarity out there, since we are seeing these cars already being demonstrated."

Do you and your staff want to increase your technical expertise and customer service skills? Earn the ACSR personal, commercial or life/health designations through The Institutes.

Florida has taken tentative steps toward addressing liability. A late amendment to that state's legislation exempted the original car maker from liability if injuries resulted from a modification into a self-driving vehicle. The provision was sought by the Alliance of Automobile Manufacturers. The group urged California Gov. Jerry Brown to veto that state's legislation, which lacked an exemption similar to Florida's. But the governor, a Democrat, signed the measure. Automakers trumpet the potential safety benefits of driverless cars, saying they could ease traffic jams and react to hazards more quickly that drivers can. There are "huge benefits" to the technology, said Gloria Bergquist, vice president of the automakers' alliance. But she said it is preferable for liability laws to come at the federal level to avoid a patchwork of different state laws. "The liability costs for this could be huge," she said. The federal government has done little on driverless cars, however. The National Highway Traffic Safety Administration in October said it planned to conduct research on automated driving but hasn't issued any rules.

Why ACSR? No annual dues No reaccreditation or mandatory update to maintain designation. More concentrated study in your area - personal, commercial, or life and health. Recognition by NAIW towards CPIW designation

ACSR's are better prepared with: - Increased product knowledge - Improved selling and account rounding skills - Enhanced productivity and confidence - Higher levels of professionalism and customer service Choose the ACSR designation that's right for you (only 5-6 courses): Personal Lines - Mod. 1 - Homeowners - Mod. 2 - Personal Automotive - Mod. 3 - Personal Lines Related Coverage - Mod. 4 - Agency E&O - Mod. 5 - Professional Development Commercial Lines - Mod. 6 - Commercial Property - Mod. 7 - Commercial Liability - Mod. 8 - Commercial Automobile - Mod. 9 - Commercial Lines Related Coverages - Mod. 4 - Agency E&O - Mod. 5 - Professional Development Life & Health - Mod. 10 - Life Insurance - Mod. 11 - Retirement Planning - Mod. 12 - Disability and Health Insurance - Mod. 4 - Agency E&O - Mod. 5 - Professional Development Click here for more information.

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

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March 2013

Clickable Calendar

Click on class title to register Sunday

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P&C Pre-Licensing Exam Review

L&H Pre-Licensing Exam Review

ACSR 1 Homeowners 8 CE

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53rd Annual Spring Seminar 15 CE

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IIANM’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! Page 28

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


Odds Ends n’

Miscellaneous items, remnants, or pieces.

St. Patrick’s Day in the U.S. Although St. Patrick’s Day is not an official holiday in the United States, it is still celebrated here with much enthusiasm, possibly because of the impact of Irish immigrants on our culture. Here’s a snapshot of the Irish presence in the U.S., from Census Bureau figures:

That are TRUE Some old wives' tales are myths, and some even dangerous -- but others are real, and backed by medical science. Check out this collection of old wives' tales that are true.

Let’s make a dent in the universe. ~Steve Jobs

• The number of Americans who claim Irish ancestry: 34.3 million. • Massachusetts has 24 percent of the population claiming Irish ancestry—that’s about twice the national average. • Irish Americans are better educated and better off financially than the population as a whole. Thirty percent of those age 25 and older have a bachelor’s degree or higher, and their median annual household income is $48,900.

New light on the horizon “Let there be light!” said a group of researchers at Wake Forest University, and there was light—or at least a new kind of light bulb. The FIPEL (field-induced polymer electroluminescent lighting technology) illuminates with a soft, white glow, and doesn’t produce the hum and yellow tint of fluorescents nor the sharp, bluish hue of LEDs. The advantages? FIPELs are said to be twice as efficient as compact fluorescent lights without any of the environmentally harmful elements of CFLs. They can be molded into bulbs, sheets, and panels for lighting that’s less obtrusive. Popular Science magazine estimates that FIPEL light could be available to consumers next year.

What day is Easter this year — and why? Easter falls on March 31 this year. But why does the date change from year to year? In the year 325, the First Council of Nicaea ruled that Easter would be celebrated on the first Sunday after the first full moon following the spring equinox; the equinox usually falls on March 20 in the northern hemisphere. That puts Easter anywhere between March 22 and April 25. Early Christians wanted Easter always to fall after the Jewish Passover, which was determined according to solar and lunar cycles. According to the Wikipedia website, under the Gregorian calendar Easter can fall on 35 possible dates. The last time it was celebrated on its earliest potential date, March 22 , was in 1818, but it won’t come on that date again until 2285. Easter won’t come on the latest potential date, April 25, until 2038. Independent Insurance Agents of New Mexico - www.iianm.org - * March 2013

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When it comes to placing personal insurance for high-net-worth clients, your success is our success. Grow your business by partnering with Burns & Wilcox. By working with our Elite Client Solutions team, you do not have to turn away clients: We have the products to cover all their needs. Our high-net-worth specialists have the expertise to create personalized solutions. Plus, our unrivaled access to markets allows us to create solutions with speed and diligence. Making personal insurance even more personal is what Burns & Wilcox does best as the largest independent wholesale broker. Albuquerque, New Mexico | 505.822.0018 | toll free 866.643.8538 fax 505.822.0092 | scottsdale.burnsandwilcox.com

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March La Voz 2013