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COVERAGE

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Five Reasons Your Customers Should Be Protected By New Mexico Mutual

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CREATED FOR NEW MEXICO BUSINESSES

Created by New Mexicans for New Mexicans, we understand the diverse operations of our state’s workforce. By placing business with our company, premium dollars stay in New Mexico. We are an A-(Excellent) A.M. Best Rated company and take ownership of providing New Mexico businesses cost-effective workers’ compensation coverage.

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Our tagline, coverage @ work, states our purpose. We protect businesses as well as employees. We ensure that your customers’ business investments are protected from the costs of an accidental injury and provide programs and services to keep their employees safe at work and rehabilitate those who may suffer a workplace injury.

EXCELLENT CUSTOMER SERVICE We distinguish ourselves from the competition by providing the highest standard of customer service. We are a local company that understands the state and your customers’ specific needs, not a faceless 800 number. We are committed to service excellence and our local team of safety and claims professionals know how to take care of injured workers and provide useful and practical information to keep workplaces safe. Our website, which includes safety videos (streaming or checkout), Pay My Bill, File a Claim and many other features, is another valuable resource available to all employers and their employees.

LEADERSHIP AND ADVOCACY FOR NEW MEXICO BUSINESSES

New Mexico Mutual works to ensure that New Mexico continues to be a good place to do business by monitoring legislative and regulatory bodies throughout the year. We are an industry leader in collecting and providing workers’ compensation data to the state of New Mexico. We represent our clients and their employees in Santa Fe by advocating legislation that protects businesses and workers, while keeping the cost of workers’ compensation insurance to a minimum.

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PROTECTION FOR EMPLOYEES, SECURITY FOR YOUR CUSTOMERS

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INTEGRITY

New Mexico Mutual is recognized as one of the most ethical companies in New Mexico and we’ve earned that designation by being forthright and respecting the relationships we’ve built with our agents, policyholders and injured workers. We have fair processes for employees and employers that are all handled locally. We are financially strong and can be trusted to back your customers when they need us most.

New Mexico’s Experts in Workers’ Compensation www.iianm.org Insurance

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

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 Chief Strategy Officer Marit Peters VP of Member Services Consuelo Trujillo Insurance Programs Administrator Suzie Dodds, CIC Communications Director Rachel Sheffield Member Services Associate Renee Trujillo

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Independent Insurance Agents of New Mexico

Independent Insurance Agents of NM

iianm’s

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Anniversary

On the Cover:

Celebrating 80 Years in New Mexico

This month’s iconic New Mexico locale: Oregon Mountains-Desert Peaks On May 21, 2014, President Barack Obama established the Organ Mountains-Desert Peaks National Monument. The new monument possesses a rich diversity of Chihuahuan Desert wild lands and unique Pre-American, New Mexican, and American history including training sites for the Apollo Space Mission, the Butterfield Stagecoach Trail, Billy the Kid’s Outlaw Rock, Geronimo’s Cave, World War II aerial targets, and thousands of Native American petroglyphs and pictographs.

Features Win An Evening Out! - IIANM’s Gala Contest

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Insurance Shopping: Millennial’s Care Less About Price than Boomers

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Roswell CE Seminar Registration 09 The Estate Plan that Outlives the Person

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Four Things That Keep Your E&O Underwriter Awake at Night

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Free E&O Loss Control Credit Seminar

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Workers Comp Underwriting & Commercial Roof Issues Free Workshop 14 The Biggest Myth About Cyber Insurance

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Legionnaires’ of the Rich and Famous

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Just Because Its Not Covered, Doesn’t Mean Its Not Covered

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New Technology Count End Multiple Log-in Nightmare

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Fed Aims to Silence Critics with New Head of Insurance

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In Every Issue IIANM 2014 Company Partners! 04 Tech Talk 16 July’s Clickable Calendar 26 Odds n Ends 27

2013-2014 Officers Chair Diana Hobbs Vice-Chair Gabe Portillo

Advertiser Index Acuity 21 Burns & Wilcox Back Cover Litchfield Special Risks

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Secretary/Treasurer Connie Sevier

Market Finders, Inc. 08

National Director Sam Conlee

Mountain States Insurance Group

Immediate Past Chair PJ Wolff

Risk Placement Services (RPS) 15

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Molina Healthcare 18

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New Mexico Mutual 02 Towerstone Insurance Services 11

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These carriers have partnered with our association to support the vitality of the independent agent system in New Mexico.

Take a moment to visit their new page on our site and take advantage of their varied products and services.

Independent agents have the freedom to choose!

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Insurance Shopping: Millennials Care Less About Price than Boomers

By Jacquelyn Connelly

bypassing the agency channel altogether, that means it’s crucial to use the agency website as a platform to highlight what makes your business special. “One of the foundational things I would establish on your website is ‘You’re going to get a level of service at my agency in your community that’s above and beyond what you can get from a direct model,’” Bowler says. “Maybe it’s that my staff is highly trained or that we’re available with extended hours.

When selecting insurance, younger generations are less likely to choose the cheapest option than are baby boomers, according to the J.D. Power 2014 Insurance Website Evaluation Study. That might be a victory in the price war, but fair warning: your website - whether agency or carrier - better impress. While 47% of boomers and 51% of pre-boomers selected the lowest-priced insurance brand, only 35% of both Gen X and millennials did the same.

So what matters most to younger insurance shoppers?

According to the study, 40% of both Gen X and millennials are more likely to select insurance from websites that offer easy navigation, compared to only 36% of boomers and 33% of pre-boomers. “It was only a couple years ago that we would have told you the No. 1 thing that drives customer impression of a company is the agent,” says Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates. “That’s been diluted in the last handful of years. These folks live on the Web. They’re much more apt to say, ‘I don’t get it—why doesn’t it work like Amazon?’

So they’re much more critical of something that’s clunky or awkward or tough to figure out. They’re interpreting that if your website sucks, you probably can’t be that good of a company.” Millennials are also more concerned with the ability to research while shopping - 29% are more likely to select a brand that provides the appropriate amount of information on its website, and 36% are more likely to opt for one that does so in a clear and intelligible way. It’s part of an ongoing trend of consumer self-empowerment in which clients think, “I want to direct the service more on my terms,” Bowler says.

At the agency level, Bowler likens the website to a professional resume presented to the marketplace - it should feature key information a shopper needs to know about that agency and the services they offer. Since personal lines customers can secure adequate coverage even while

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Whatever it is you’re presenting as the virtues or benefits of your agency, you’re going to want to make sure that billboard is very clear and easy to access for the shopper.”

Equally important is maintaining a Web presence that’s up to date with current Internet trends. “The worst possible offense is the website that’s very dated in appearance and in terms of its functionality,” Bowler says. “If you’ve got a very dated-looking website that doesn’t let me do a lot, where I have to scroll down to see the rest of it because you’ve got so many options listed and you’ve got every possible link on your first page - consumers just shriek when they see that.

‘Ease of navigation’ doesn’t mean putting it all on the landing page so everything is one click away.” As a remedy, Bowler encourages agencies to consider use of images, color and font to speak to who makes up the target audience.

“If I’ve got a good contingent of retired persons in Florida who are in my territory, I’ve got to think about that font size,” he says. “I’ve got to make sure it’s legible and I’ve got to make sure it’s not industry jargon so much as describing the need for which I can provide solutions. Click on the need - I’ll take you to the solution.” And using best practices for SEO and social media is key. “More customers today start the shopping process by going to the Web to do their research,” Bowler says. “Website design that promotes search engine optimization is one of the first things I’d recommend. And if you’re going to be strategically competing in this new channel, you have to have a balanced approach that includes social.”

Think optimizing your agency’s Web presence isn’t worth the investment? That won’t be true in the near future.

“These are the customers of tomorrow - that segment is growing,” Bowler says. “You want to put yourself in the conversation wherever the customer is. If the consumer is dissatisfied or struggling to get effective service and they go and post on your Facebook page and you’re not seeing that, you’re going to be at a competitive disadvantage.”

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We have a rock solid history.

Mountain States has been around for more than 75 years. Our knowledge of the local landscape and long-standing reputation in the state of New Mexico give agents a unique advantage when choosing the best policy options for their business customers.

The Mountain Stands Behind You. www.msig-nm.com Albuquerque, New Mexico 505.764.1400

Jemez Mountains New Mexico

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Representing some of the most financially strong and innovative insurance companies in the specialty marketplace

“FINDING MARKETS FOR THE AGENTS OF NEW MEXICO SINCE 1977” WE THANK YOU FOR YOUR BUSINESS!!

Top-Tier Markets For:

Commercial / Public Auto General Liability Property / Vacants Garage / Dealers Liquor Liability Special Events Inland Marine Directors & Officers Liability Professional Liability / E&O Commercial Umbrella Watercraft / Motorcycles / ATVs Personal Umbrellas Homeowners Mobile Homes Dwelling Fire / Vacants New Mexico’s Locally Owned Managing General Agency

ESTABLISHED IN 1977

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LIFE & HEALTH

By, Dave Evans Source: IA Magazine

The Estate Plan that Outlives the Person The well-known adage "failure to plan is planning to fail" is often right on the mark. People procrastinate on developing a plan for their personal goals for many reasons. While everyone knows even the best-laid plans can collide with unexpected realities, that shouldn't serve as an excuse to neglect taking the time to create a plan that’s adjustable based on unforeseen life changes—especially considering the legions of examples where a lack of planning resulted in unintended consequences. Almost everyone is familiar with the issues that arise when someone dies "intestate," meaning without a will.

Dying without a will means the respective state or states will get involved in adjudicating the decedent's estate, which can result in extending the timeframe and cost involved in settling the estate. It can also create significant problems for divorced people with children from a prior marriage or people who own real estate outside their state, and often creates ill will among family members as the process of probate commences.

The probate process is a public event, with court documents available to anyone who wishes to view them. Even if the decedent's estate doesn't involve significant assets relative to federal income taxes, the state estate tax threshold in a number of states is lower than the federal level and an inefficient or nonexistent plan may needlessly incur state estate taxes that could have been avoided.

People with unique situations can establish a revocable or irrevocable trust in order to avoid probate and ensure their objectives are carried out. A revocable trust doesn't reduce

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the amount of estate taxes since the grantor retains the right to change the trust document until their death. But upon death, the trust becomes irrevocable and the provisions become operative. An irrevocable trust can result in lower estate taxes because the trust's assets are no longer included in the decedent's estate - if no "strings" are allowed to the grantor, the gift is of a "present interest" and three years have passed. Many people also often overlook the importance of providing guidance on how their chosen beneficiaries should utilize the inheritance.

For example, a married couple in their late 50s should discuss whether or not to pay off the mortgage if one spouse dies. And if the deceased spouse had life insurance, how should the surviving spouse spend the proceeds? Another consideration is whether the decedent had any 401(k) plan and IRA assets and whether to roll them into the surviving spouse's 401(k) plan and IRA. The tentative plan should also take into account the Minimum Required Distribution rules, which typically require the spouse to commence distributions on the April 15 of year following the year they turn age 70½ - unless they are still working and don't have ownership within their employer.

Last but not least, the decedent must have trusted advisors they can rely on to do their best to carry out their wishes - even if the beneficiaries have different plans for their increase in assets. Failure to plan can indeed result in planning to fail when carrying out the wishes of someone who has worked hard to provide for his or her family in a way that they believe will benefit them in the long run. www.iianm.org

PASSIONATE PEOPLE. UNIQUE SOLUTIONS. IF THEY’RE INJECTING “ICOWONDER INTO THOSE OIL WELLS TO

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ENHANCE PRODUCTION AND REDUCE POLLUTION?

Pat Ashcraft Energy Insurance Expert On the job since he saw his first pumpjack.

At Towerstone, we look to the future to shape the solutions you need to protect your assets and manage your risk. Whether it’s Oil & Gas, Construction or the Environment, our industry-specific risk management strategists have access to custom-designed wholesale insurance programs and the expertise to implement them. We’ve been living and breathing insurance our whole lives, and our hands-on approach allows you to focus your energy where it should be — on satisfying your clients’ risk concerns.

www.towerstonecorp.com/solutions Toll Free: 972-725-2100 WHOLESALE INSURANCE BROKERAGE | MANAGING GENERAL AGENCY CA: dba Towerstone Insurance Services (Lic#0F60676)

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Four Things that Keep Your E&O Underwriter Awake at Night

Chances are that your actions - and inactions - are stressing out your E&O underwriter.

In the following article, agency consultant Chris Burand shares the big four: what they are, why they’re risky, and how to mend your ways and, in turn, protect your agency.

1. Publishing reckless website copy

2. Eliminating policy reviews

Agencies are growing careless regarding what their websites indicate the agency does or will do for their clients.

Such carelessness is partially a result of good intentions with bad consequences, and a growing result of outsourcing website development.

Some agencies have cut back staff so much due to the tough times that they no longer are reviewing all policies at renewal. Others, believe it or not, may have cut staff so their productivity numbers look better for the various bast-practice type competitions in which they compete.

Outsourcing website development is a perfect breeding ground for grand promises without the wherewithal to uphold those promises. Website developers will certainly look much better in the eyes of the agency if they make the agency look great. Website developers often have a flair for thinking of all the services and qualities agencies can provide clients. Meanwhile, agency owners love to see how great they are, especially when a third party writes the script and publishes it on the Internet for all to see.

Big egos can lead to stupid decisions. Others are just greedy, but the savings today will be spent tomorrow in E&O claims and employee dissatisfaction. Penny wise and pound foolish.

And yet when everyone gets done with the love fest, someone has to do the work. If an agency advertises that they will find the best combination of price and coverage, they had better find the best combination of price and coverage for every single client or put a caveat of their site advising they will only really do this for some clients.

Advising you are an expert is great if you are and if you provide expert attention to every singe insured. Advertising that you can write any risk may mean finding a home for every risk. Advising that you will review insureds’ exposures may mean reviewing every insured’s exposures every year.

Agents likely are mistaken in believing they can advertise how great they are without having to prove that greatness to every single account every single year.

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I am not going to change those agency owners’ minds with this article. But hopefully by making other agencies aware of what is happening, they will see wedges they can use to compete with such wrong-thinking agencies. The customers deserve better.

3. Foregoing coverage discussions for longtime insureds This is scary to E&O underwriters because, over time, even simple homeowners’ exposures tend to change materially.

For example, a study some years ago showed that a majority of homeowners who renovate their home forget to tell their agent. The result is a severe under-insured homeowner. This is a problem that has plagued this industry for at least the last 25 years. To help your E&O underwriter sleep better at night, regularly contact your clients, especially the ones from whom you never hear.

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4. Dismissing coverage checklists E&O underwriters know a coverage checklist is the best way to eliminate E&O exposures, and yet, few agencies use them consistently. Maybe some E&O underwriters are just numb on this point, and their sleep is no longer hindered. But take pity on the new underwriters. They are not numb yet to the huge risks they see, which could be mitigated by a relatively simple tool. They know it is not a matter of “if” but “when.”

This particular situation is actually a fascinating proof of how humans assess risk. When risk is not imminent, most people cannot assess risk correctly. The further someone is from the risk themselves, the clearer they can see it. Just like agents and underwriters. Exacerbating the problem is how differently humans perceive frequency and severity.

The industry is pretty good at addressing frequency problems, but it is not so good at addressing severity.

For example, UM claims have a tendency to be few but severe. People can mentally assess why they need insurance if they have a 25 percent chance of incurring a claim, even if the claim is likely to be small. But hey have a really difficult time assessing the importance of insurance when the chance is less than 1 percent, and if it occurs, is likely to be a very large claim.

Humans as a whole have a large blind spot when it comes to severity, which is why so many producers and agency owners under-estimate the value of a coverage checklist.

But have one claim where a checklist would have saved them, and they will be an immediate convert.

Checklists to check out Chris Burand touts the value of using checklists - and he’s not alone. It’s a consistent recommendation among E&O carriers and agency consultants alike.

Take advantage of your discounted access to the Virtual Risk Consultant, an online sales and service resource that will increase your staff’s productivity while limiting your agency’s W&O exposure.

The risk analysis system helps producers and CRS to: • Understand the business exposures in 650+ industries • Access questionnaires to collect information needed on ACORD applications • Properly document customer files with customer-signed checklists.

For details, contact Suzie Dodds, CIC at (505) 999-5802 or suzie@iianm.org

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Workers Compensation Underwriting &

ISSUES

Date:

Thursday, July 24, 2014 Time:

8:45 AM to 2:30 PM (includes Continental Breakfast and Lunch)

Location: IIANM Conference Room (1511 University Blvd, NE, Albuquerque, NM 87102) Subject: Workers Compensation Underwriting, and Commercial Roof Issues Guest Speaker: Paul Martin CE Credits: 4 Hours Free CE Credits!

Union Standard, and IIANM are pleased to offer a workshop for Workers Compensation Underwriting, and Commercial Roof Issues to anyone in your office that would like to attend. We encourage you to be part of this free workshop sponsored by Union Standard, and IIANM. Those of you that attended Paul’s seminar last year are aware of what a great job he does in our workshops.

Workers Compensation Underwriting (Filed for 2 CE Hours) This portion of the workshop will explore the elements of evaluating employers and their workers compensation exposure with an eye toward understanding the carrier reaction to applications, how to approach rehabilitation of poorer risks, and how to educate employers on making themselves attractive to insurers.

Commercial Roof Issues (Filed for 2 CE Hours) This portion of the workshop will explore some common problem areas when managing the risks of commercial building roofs and developing sound insurance approaches with customers.

So that we may have a head count for the workshop and lunch, we ask that you please RSVP as early as possible as space may be limited. The expected last day to register will be July 11, 2014, however, this may be flexible depending upon registrations. Please respond to Jeff Weddle at jweddle@usic.com. We have a maximum attendee count based upon the space, so please respond as early as possible in order to get an accurate attend count.

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SERVING NEW MEXICO WITH QUALITY PRODUCTS AND SERVICES

Placing a call to us will put you on the fast track to providing the best solution for your clients.

• Underwriting & Brokerage capabilities • Proud members of AAMGA, NAPSLO, PLUS and various state independent agency associations • Excellence in service • Relationship driven COVERAGES • Excess & Umbrella • Fiduciary & Crime • Garage Liability & Physical Damage • General Liability • Inland Marine • Personal Lines • Products Recall

• Professional Liability, including D&O, E&O and EPLI • Programs • Property • Public Entites • Real Estate • Technology & Cyber • Transportation • And More!

Visit our online Marketing Library to learn more about all our specialty products, programs and contact directories.

Strength of a National Network Providing Local Expertise www.iianm.org

SCOTTSDALE, AZ 800.475.2626 RPSins.com

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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!)

The Three Steps to Take Advantage of

The term “newsjacking” was first described by David Meerman Scott in his book Newsjacking, published in 2011. In his book, Scott describes how to inject your ideas into a breaking news story and generate tons of media coverage.

In racing, drafting is a technique that is used to gain a small but important advantage over the person in front. By “drafting” behind the person they are able to use less effort to maintain their speed—giving them the slight advantage.

In a similar way, newsjacking is a powerful tool that anyone can use to draft off the momentum created by a breaking news story. You can take advantage of the media created by the news story, interject your own point of view, and offer further help and information to your audience.

For those who are paying attention, it can create a level playing field—literally anyone can newsjack.

Two weeks ago I was able to newsjack the breaking news story about the recently discovered vulnerability in Internet Explorer and Windows XP. I was able to, in Scott’s words, inject my ideas into a breaking news story and generate additional exposure to my audience.

Chip, a senior editor at LinkedIn Pulse, contacted me via email asking: “Hope all is well on your end. We're seeing a lot of discussion on LinkedIn about the Internet Explorer XP security hole. Would you have any interest in writing something about it? If so, we'd be sure to promote it widely.

Many thanks, as always, for considering.”

I don’t know about you, but when a senior editor at LinkedIn asked if I’d be willing to write an article they will “widely promote,” I stopped what I was doing and began writing an article.

My angle was the increased likelihood of a data breach due to the combination of a security hole in Internet Explorer, and the lack of support for updating Windows XP. Forty-seven states have data breach laws and if a breach occurred due to this IE / XP flaw, the firm would likely face unwanted regulatory scrutiny. You can read the full article here.

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ing

I worked on the article that afternoon and, after letting it sit overnight, published it the next morning on LinkedIn. I sent the information to Chip.

His reply: “Steve, fantastic work! This is a terrific piece, and I love the angle you seized on here. Really appreciate you jumping on the news so quickly. We'll make sure to promote it widely.” That article generated over 7,000 views, 175 likes, and 49 comments.

How you can take advantage of newsjacking opportunities: 1) Be observant.

News opportunities are everywhere—if you just pay attention. Spring storms provide you with opportunities to talk about insurance coverages as well as disaster recovery tips. Bill Wilson at the IIABA Virtual University used newsjacking when he wrote an article about the insurance coverage implications for the recent landslide in Darrington, Washington.

2) React quickly.

You need to be able to react quickly. There is a constant stream of fresh news so you shouldn’t wait a few days or a week to bring your point of view about a current news event. I suggest you have some broad topic ideas with content already written that you can draw upon to customize for a particular event.

3) Write well.

Learning how to express yourself in words is a skill that can be developed. Have someone else read what you’ve written to make sure it makes sense. You may have noticed that I let my article sit overnight and reviewed it again in the morning before publishing. This is to make sure that the article communicates well.

Pay attention to newsjacking opportunities—it will help you increase your reach and position you as an authority. www.iianm.org

An Alternative to Adobe Acrobat Pro The standard electronic document format for the insurance industry is Adobe System’s PDF. Professional strength PDF software is a must for all insurance organizations. Many use Adobe Acrobat Pro but, at a retail price of $450, it can get expensive to add to every desktop.

Fortunately, there are very capable alternatives. One that I have been testing is the new version of Nuance Communications PDF software – Power PDF Advanced. It is a full-featured, professional PDF program that costs at least one-third the price of Acrobat. A 30-day free trial is also available.

Nuance also offers the Power PDF Standard at $100, but the PDF Advanced ($150) is what you will want.

Some of the features of the advanced version include: • Redaction to black out sensitive information, including the ability to automatically search and redact.

• Bates stamping and advanced header and footer functionality.

• Secure delivery, encryption, and digital rights management capabilities.

• Integration with file-sharing sites such as Box, Dropbox, Evernote, Google Docs, or Office 365.

• Integrated Dragon Notes speech recognition, enabling users to add notes to PDF files by dictating text. Nuance sends the speech recording to its servers in the cloud to process.

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• Integrated OCR using the same technology as Nuance’s OmniPage.

• Watched folder and batch sequence capabilities to automate common tasks and move files from one location to another.

• Word processor-like ability to edit PDF content, including graphics and charts.

Of course, it also includes the features you would expect to find in a professional PDF program.

One of the most useful features just might be FormTyper.

Originally included in the Nuance PaperPort software, this program has improved significantly. It allows you to take a scanned image of a form and automatically convert it to a fillable version.

Fields are automatically added and you are provided with the ability to edit field properties. For example, you can enforce field formatting, validate field information, and apply mathematical functions to field data. You can also add fields to the form if the automatic conversion misses them.

Field types include: text box, button, radio button, check box, combo box, list box, and digital signature.

I’m sure there is a power PDF user who could find shortcomings in this program over Acrobat, but I couldn’t. I was able to do any of the tasks I would want with a PDF program.

Nuance Power PDF Advanced is currently available for $149.99. You can try Power PDF Advanced for yourself by downloading a free 30-day trial before deciding to get the full version.

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Introducing Molina Healthcare’s exciting 2014 Medicare Advantage Prescription Drug Special Needs Plan Molina Healthcare, a Fortune 500 Company, was created more than 30 years ago by Dr. C. David Molina. As an emergency room doctor, he believed that every person should have access to high-quality care.

Molina Medicare Options Plus HMO SNP Plan offers a competitive plan design with additional benefits that you can market year round to meet the needs of dual eligible customers.

• Large Provider Network • Comprehensive and Preventive Dental Services • Vision Exams and Eyewear • Transportation • Over-the-Counter Medications and Supplies • Strong Compensation Plan • Renewal Commissions • Competitive Plan • Market Year Round to Dual Eligible Customers

If you have a New Mexico Life and Health License, contact us to learn more.

Please contact: Broker Support Unit (866) 440-9788 broker@molinahealthcare.com

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By Caitlin Bronson Source: Insurance Business America

The biggest myth about cyber insurance The recent hacking of online merchandiser eBay, which put its 145 million “active buyers” at risk of data breach, has once again ignited the insurance community’s discussion of cyber liability insurance.

But beyond the obvious “headline as sales push” application, experts say the eBay hack has also taught agents and brokers important lessons on what they don’t know about cyber insurance—and what they ought to be passing along to clients.

Cyber insurance’s biggest myth As chief privacy officer for Identity Theft 911, Eduard Goodman knows exactly what cyber liability insurance covers and what it doesn’t. That’s not something he can say about all producers selling the product.

“The way I look at it, cyber insurance is sort of a poorly named catch-all,” Goodman told Insurance Business. “A lot of what cyber is designed to do is to address old timey, 1990s concerns—and that might as well be Victorian times from the tech standpoint. The market is starting to respond to data breaches, and agents and brokers are driving that, but they’re not selling specialized coverage for specific SMEs.” And the biggest misconception of all?

“A lot of folks buy cyber and think they’ll be covered for a loss of personal and private data, but then they’re completely out of luck when it comes to having access to money for letters to be sent, lawyers to be hired, and remediation to be conducted,” he said. “One of the big, gaping holes is that cyber policies are not built or equipped to deal with more common risks, which is actual personal data exposure.”

That’s where producers can point clients to breach response specialists, like ID Theft 911. These services hire

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experts to cater to the immediate aftermath of all data breaches, ensuring clients are in line with state and federal policies regarding data breaches.

Password protection tips are key Producers should also pass on tips for password safety, says Jean Chatzky, a personal finance expert and education partner with LifeLock.

Many consumers—like those victimized during the eBay hack—fail to create strong passwords and then change their passwords every four months. A strong password contains eight characters, including capital and small letters, numbers and symbols, Chatzky says. Together, they should not make out a word commonly found in the dictionary.

“My shortcut trick is to come up with a sentence that means something to you,” Chatzky said. “Take the first letter of each word in that sentence and substitute a letter or symbol where appropriate—for example 1 for ‘I.’” What’s at stake Producers who fail to learn about cyber insurance and pass along these tips are not only missing out on a potential revenue stream, they may also stand liable in court.

As for their clients, Chatzky says people involved in a data breach are affected financially one-quarter of the time.

“The most benign thing that happens is someone uses your credit card to make a purchase, your company notices, calls you and changes the card,” she said. “The most egregious is they use other information about you to create another version of you and apply for a tax refund or a loan in your name. That becomes very difficult to unwind.”

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Legionnaires' of the Rich and Famous

Insurance issues arise after bacteria makes Playboy Mansion partygoers sick.

By Paul Buse

After a party at the Playboy Mansion associated with a conference in Los Angeles, more than 150 people reported flu-like symptoms, some cases of which could be Legionnaires' disease or a milder form of the disease, Potomac Fever. Both conditions are caused by bacteria, and both cause significant insurance issues. Commonly added to all manner of insurance policies today are fungus/mold/bacteria exclusionary endorsements. Depending on the extent of injuries (Legionnaires' can be fatal), the insurance coverage in place and what caused the infection to spread, millions of dollars could be at stake. Most of these losses will be uninsured because of the exclusions for these contaminates.

In 1976 at an American Legion convention in Philadelphia, hundreds of people became sick and more than 30 people died from a previously-unknown bacterium, Legionellosis.

This event became the namesake for Legionnaires' disease. The outcome from infection can range from death to bacterial pneumonia to a mere flu-like experience. So far, of those infected in Los Angeles, no fatalities have been reported and symptoms appear to be those associated with a milder infection—the less virulent version of “Legion Fever,” known as Potomac Fever.

Whatever the final outcome for those sickened at the mansion, the situation brings with it some very interesting insurance questions. The insurance coverage issues arise from insurers adding fungus, mold or bacteria exclusionary endorsements to all types of insurance policies.

“Today, we find the industry adding exclusionary endorsements to nearly every policy,” says David Dybdahl, president of the environmental/pollution insurance wholesaler on Big “I” Markets, American Risk Management Resources Network, LLC. “These exclusions go well beyond the expected elimination of coverage for being in the mold remedation or microbial decontamination business, which is usually completely excluded in the typical GL policy. These exclusions in the property and liability policies eliminate the insurance coverage for any firm that has or can be associated with a water intrusion problem in a building that results in the growth of any type of mold or anyone exposing others to any form of bacteria.”

According to Dybdahl, there is no better example of the surprising consequences of fungus/mold/bacteria exclusions than in two cases involving hotels where Legionellosis bacteria caused a loss. One of these is significant because of the death of a guest from exposure to the bacteria and the $4.5 million involved he says; the other, because the

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court case makes clear the fungus/mold/bacteria exclusion not only removed any insurance coverage for injuries from bacteria, it was ruled the insurer had no duty to defend the hotel owner.

“And if completely uninsured, if wrongful deaths from a hotel hot tub are not troubling enough to insurance buyers, another adverse outcome of the exclusion is developing when exclusions incorporate anticoncurrent causation language,” said Dybdahl. Armed with anti-concurrent causation language in the fungus/mold/bacteria exclusions in property and liability insurance policies, an insurance adjuster can conceivably decide any claim involving the smallest speck of any type of mold or bacteria is unpayable, even when mold or bacteria are only a very small part of the overall claim. Once the exposure and concern is identified, agents have two strategies for getting clients covered, says Dybdahl.

In rare cases, agents can get the exclusions removed from policies, but others probably have to purchase specially-modified environmental insurance coverage. Use caution in evaluating the adequacy of sublimits of coverage for fungus/mold/bacteria, as the actual loss exposure from these contaminates usually far exceeds the amount of the sublimit being offered. For example, exposing 150 partygoers to a potentially fatal disease will not be adequately insured with a $10,000 sublimit. “We have affordable commercial insurance products designed to pick up both the property and liability exposures from contaminants like mold, fungus and bacteria,” said Dybdahl. “We’ve been saying for some time that if your customer can have or be associated with causing a water loss, [he has] a risk management problem you can help [him] with.”

“Clearly, we have some evolving and troubling coverage issues that agents need to be aware of,” says the Virtual University’s Bill Wilson. Mark Wolf, vice president of professional liability on the Big I Advantage® team, indicates that agencies need to be aware of the E&O risk management tools and strategies available when insuring clients who may have a mold or fungus exposure. “We’ll coordinate with our technical affairs team at the VU and look at the agency E&O and risk management issues to get information in member’s hands,” Wolf says.

Members interested in specialty insurance coverage options can find access to American Risk Management Resources on Big “I” Markets at www.bigimarkets.com by selecting commercial coverage product “Environmental Impairment/Pollution.” For summary and interpretation of the various standard mold, fungus and bacterial exclusionary endorsements from the Insurance Service Office (ISO), go to the Policy Forms and Manual Analysis (PF&M) available on the Big “I” Virtual Risk Consultant at www.independentagent.com/vrc. www.iianm.org

For All That Matters

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just because it’s not covered doesn’t mean it’s not covered

By Bill Wilson

Virtual University’s Ask an Expert

The insured's brother-in-law was helping him clean up some storm damage when a tree limb damaged his lawn tractor. The adjuster denied the damage as a liability claim under the Damage to Property of Others because it requires the damage to be "caused by" an insured. In this case, the adjuster might be right...but that doesn't mean the damage is not covered.

When determining whether a policy provides coverage for an occurrence, it is critical to review the ENTIRE form. Often we receive "Ask an Expert" questions where the details of the loss are incomplete or we're emailed proprietary policy excerpts that consist of just a few pages from a policy with a couple of dozen pages. Here's a recent example: "My question is about the 'Damage to Property of Others' Additional Coverage in the HO 00 03 04 91. It says, 'We will pay at replacement cost up to $500 per occurrence for property damage to property of others caused by the insured.' My insured's brother-in-law was helping clear out some trees that had been damaged due to a windstorm at the insured premises. The brother-in-law's garden tractor was damaged by a tree limb and the insured presented a claim and was denied as it was not 'caused by the insured.' The brother-in-law was driving the tractor at the time of the loss.”

You don’t say how the tractor was damaged. In the "Damage to Property of Others" policy provision you cite in the ISO form, it does require the damage to by “caused by” an insured. In addition, it excludes loss arising out of the use of a motor vehicle, the only exception being certain recreational vehicles. Therefore, this additional coverage does not apply to this loss and we can't otherwise comment on potential liability coverage under Section II since we don't know what happened and whether the insured could be legally liable. Since the adjuster is citing the "no fault" additional coverage in Section II, presumably this is because s/he feels the insured was not liable for the damage..

However, Section I of the policy says: COVERAGE C – Personal Property We cover personal property owned or used by an "insured" while it is anywhere in the world. At your request, we will cover personal property owned by others while the property is on the part of the "residence premises" occupied by an "insured"; It is a common misconception that the policy only covers property owned or rented by the insured. As the highlighted language shows, if the insured chooses to extend coverage, it will apply to the property of others as long as it's on the part of the premises occuped by an insured.

What about any exclusions pertaining to damage to motor vehicles? Motor vehicles are excluded under Property Not Covered, but the following exception is made: We do cover vehicles or conveyances not subject to motor vehicle registration which are…Used to service an "insured's" residence; Note that, unlike the HO 00 03 10 00 policy, the 1991 form does not require that the vehicle be used solely to service the insured's premises. So, as long as the cause of loss is covered, the claim should be covered under Section I, less the deductible. But, again, we don't know the cause of loss because the details of the occurrence are not provided.

In any case, one lesson here is that, just because the insurer correctly cites exclusionary language in one part of the policy, that doesn't mean that the loss is necessarily excluded if you can find coverage in another part of the policy.

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New Technology Could End Multiple Log-In Nightmare

By Jacquelyn Connelly

Ever wish you could access all carrier websites and agency platforms with one single login? Good news: Thanks to the ID Federation’s SignOn Once initiative, that could be a reality within a year or two.

A non-profit cooperative effort enacted by insurance carriers, technology providers, agents and brokers and associations, ID Federation recently announced the launch of a new technology that allows agents and brokers to use just one password for all their participating agency management and carrier systems.

“There’s been a gap in addressing the issue that agencies have in keeping track of all these passwords,” says Teresa Addy, business technology analyst at EMC Insurance Companies and one of two primary carrier representatives leading project management for SignOn Once. “It affects agent productivity and the security they’re looking for, as well as the security the carrier is looking for.”

What It Is Between constant password expirations, unwieldy spreadsheets containing login information and the practice of leaving carrier portals open all day in order to ensure access, current password practice is “almost like Russian roulette,” says Doug Johnston, vice president of Applied Systems, Inc. and a vendor representative implementing the initiative.

SignOn Once is designed to change all that. “The person logs into the agency system in the morning and they’re automatically logged in anywhere else they need to go in the

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insurance industry, without having to worry about password failures,” Johnston explains. “The only thing they have to do is maintain their password in their primary system of choice.”

Although a variety of companies have tried to solve the problem in the past, “this is the thing that’s going to stick,” says Nellie Massoni, senior product manager for connectivity at Vertafore and another vendor representative implementing the initiative. “It’s based on industry security standards for the world, and it’s seamless for an agency as long as they have an identity provider that’s certified. It’s also easy for the carriers, because the ID Federation has done all the heavy lifting.”

That includes nailing down the technical specifications—“how you create identity, how you communicate identity and how you authenticate it,” Johnson says—and legal guidelines, all of which the ID Federation has already secured in version 1.0 of SignOn Once. “When you sign up for ID Federation, it’s totally spelled out—the roles, the relationships, the responsibilities,” Johnston explains.

“Nobody wants to take automation that’s homegrown,” Addy adds. “We want to make sure everyone understands this is an industry standard and the trust framework is an agreement derived from all facets of the industry.”

How it Works Each agency user receives a unique identity token based on distinct credentials for that person, which is then authenticated and passed between technology providers and carrier systems. Once set up, the process is transparent to the agency user—and beyond agency and workflow management, it offers other benefits.

“The one person we keep forgetting about in this industry is the agency’s customers,” Johnston says. “If you’ve been with an independent agency for 20 years and you have policies with four different companies, what do you do if you have insurance questions at 11 p.m.?”

SignOn Once will address this by making policyholders part of the authentication process, which means agencies will be able to host customer service centers for their clients to log into 24 hours a day—allowing them to click a button on the agency’s website and be dropped directly to the carrier website. www.iianm.org

“As an industry, we really need to start including the customers of the independent agency as a constituent in all our thought processes,” Johnston says. “We don’t want to lose them to other markets that allow for easier 24-hour service. ID Federation isn’t just for making agency personnel’s lives easier—it’s for anybody that interacts with the independent agency channel.”

From a data security standpoint, SignOn Once is designed to address a host of problems, as well. Aside from eliminating the sticky notes and spreadsheets, which leave big gaps in data security if someone were to ever steal a password, SignOn Once will make it so that you never have to remove a past employee from dozens of carrier accounts ever again.

“It takes agents so long to deactivate a user who leaves the agency because they have to log into so many accounts turning that user off,” Addy says. “Now when someone leaves, you just deactivate that person within the management system, and he or she can no longer access any other system—it’s a single entry point.”

What’s Next?

So how can independent insurance agents get involved?

By spreading the word among carriers and vendors. Massoni notes that the group has developed an informational brochure to share with industry partners, and Addy suggests directing them to the ID Federation website (signononce.com), where they can download the trust framework and participation agreements so they can get them in front of their legal and IT departments.

“If it’s just three or four agency management solution providers and seven or eight insurance companies, we fail,” Johnston says. “Even if we get to 100 insurance companies, we fail. We’ve got to be at 90% or higher.”

ID Federation expects to spend 2014 raising awareness and getting people on board. Although Massoni notes at least two carriers should be ready to go before the end of the year, 2015 is when the group anticipates more widespread implementation to begin.

“We have to get out of the password management business and into the writing insurance business,” Massoni says.

“This is game-changing stuff.”

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Fed aims to silence critics with new head of insurance

By Caitlin Bronson Source: Insurance Business America

As part of the continued federal oversight into the non-bank financial industry, the Federal Reserve announced the appointment of former Connecticut Insurance Commissioner Thomas Sullivan to oversee the rollout of tougher regulation on insurance companies.

It is hoped that Sullivan’s appointment will silence critics who say the country’s central bank knows nothing of the insurance industry.

“I’m excited and anxious to start,” Sullivan, who headed the Connecticut Insurance Department during the financial crisis, told Reuters.

Fed spokesperson Barbara Hagenbaugh confirmed the hire, but did not provide any further details.

The appointment comes after the Fed received the authority to regulate insurers like Prudential Financial and American International Group (AIG) after both carriers were deemed “too big to fail,” meaning their failure would be enough to destabilized financial markets. General Electric’s finance arm was also deemed “systemically important” by the Financial Stability Oversight Council. AIG was the recipient of a taxpayer-funded bailout that eventually exceeded $180 billion.

Adam Hamm, president of the National Association of Insurance Commissioners, lauded Sullivan’s appointment on the basis of his intimate knowledge of the insurance business.

“Tom’s strong regulatory experience, comprehension of the insurance sector, and through understanding of America’s national system of state-based insurance regulation will be a tremendous asset to the board on both domestic and international issues,” Hamm noted.

Sullivan is a long-time proponent of the state-based regulatory system, something several in the industry have said is under fire thanks to provisions in the Dodd-Frank Act and the creation of the Federal Insurance Office.

In a 2009 testimony on the Dodd-Frank law, Sullivan famously pushed lawmakers not to do damage to the current state-based framework.

“The insurance sector is critically important, but the business of insurance hasn’t created the kinds of unrestrained and unregulated systemic risks that reform efforts seek to manage or prevent,” Sullivan said.

Prior to his service as Connecticut’s chief insurance regulator, Sullivan worked as a partner with PricewaterhouseCoopers and executive with The Hartford Financial Services Group.

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July 2014

Click on a class to register:

Sunday

Monday

Tuesday

1

6

7

8

P&C Exam Review

Wednesday

2

3

9

10

Kitty Leslie

13

14

15

16

8 CE Hours

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Friday

4

L&H Exam Review

e c i f f O osed Cl

Saturday

5

11

12

18

19

25

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Bob Ouellette

PL Related Coverages (ACSR3)

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Thursday

23 E&O Risk Management Seminar

17

Commercial Property Coverages (ACSR6) 8 CE Hours

24 Workers Comp & Commercial Roof Issues Workshop jwddle@usic.com

8 CE Hours

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29

30

Roswell P&C Seminar

15 CE Hours

31

Personal Auto (ACSR2)

8 CE Hours

JOB BANK Attention hiring managers, students or insurance professionals. View available job listings and descriptions or post your resume for prospective employers.

We will be encouraging university’s to use this resource for job placement and will need agencies and companies to be actively posting job opportunities as they become available.

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

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an d

Odds ends

25 Signs You’re Succeeding At Life (Even If It Doesn’t Feel Like It)

You’re doing so much better than you give yourself credit for. Most of us are so busy trying to dodge life bullets, we forget to stop and appreciate the little victories.

Consider for a moment that you’re doing a tremendous job at life. Living isn’t an easy thing to do, but it can be enjoyable when we start to see the good instead of focusing on the bad.

You are actually living a good life by recognizing these 25 signs

One small asteroid puts a ring on it The planet Saturn is known for its spectacular rings, along with other gas giants like Jupiter, Neptune, and Uranus in our solar system. Until recently scientists had observed rings only around large celestial bodies, but in a surprising discovery by the European Southern Observatory, a small, distant asteroid named Chariklo has been found to possess two dense, thin rings of its own.

Chariklo orbits the sun between Saturn and Uranus, and is about 155 miles in diameter. It’s classified as a “centaur,” one of a group of small objects with unstable orbits that share characteristics of both asteroids and comets.

The origin of its newly discovered rings is unknown, but astronomers speculate they may have been formed from a collision with another body, creating a circle of debris.

If we knew what it was we were doing, it would not be called research, would it? ~Albert Einstein

A few fun facts about the July 4th Declaration You probably know that the Declaration of Independence wasn’t actually signed by delegates from all 13 colonies until August 2, 1776. But did you know these other interesting facts about our nation’s founding documents?

They come from the U.S. National Archives and Records Administration website: • The original Declaration wasn’t written on ordinary paper, but engrossed (a process of preparing an official document in a large, clear hand) on parchment—an animal skin that’s stretched and treated with lime to create a strong, enduring document.

• The copy on display in the National Archives in Washington, D.C., is one of 26 “Dunlap Broadsides,” printed on paper on the night of July 4, 1776. Twenty-one are owned by American institutions, two are held by British institutions, and three are in the possession of private owners.

National Ice Cream Month Established in 1984 by President (and ice cream lover) Ronald Reagan to celebrate the popularity of the tasty dessert. National Ice Cream Day is celebrated on the third Sunday of July as well. www.iianm.org

• On the bottom left corner of the original Declaration is a handprint whose origins are unknown. Attempts to clean the handprint would damage the document. Also, the back of the signed Declaration bears the words “Original Declaration of Independence, dated 4th July 1776,” upside down at the bottom of the page.

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If you cannot place all of your clients’ personal insurance needs, they will find someone who can.

When it comes to personal insurance, every part matters.

Because when one piece goes missing, the entire account could come undone. At Burns & Wilcox, we can insure individual portions of their coverage or the whole account.

So you do not have to turn away any business. We have the expertise, resources and experience that can only come from being the leader in wholesale personal insurance. That is why no one has you covered like Burns & Wilcox.

Albuquerque, New Mexico | 505.346.2583 toll free 866.643.8538 | fax 505.822.0092 albuquerque.burnsandwilcox.com Commercial • Personal • Professional • Brokerage • Binding • Risk Management Services

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