Page 1

WE LOVE YOUR BUSINESS! To celebrate we are extending our 5% new business commission program. Bring your business home to New Mexico Mutual and celebrate with a 5% increase in commission on NEW BUSINESS* bound with effective dates through August 31, 2012. We appreciate your business and our partnership! We look forward to providing your clients the opportunity to put their business with a New Mexico company. If you have any questions, please feel free to contact your sales representative.



New Mexico’s Experts in Workers’ Compensation Insurance. 3900 Singer Blvd. NE • Albuquerque, NM 87109 • 505.345.7260 or 800.788.8851 •

*Excludes accounts that were insured with New Mexico Mutual in the previous 6 months, short-term policies, rewritten policies, and renewal policies.

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


Independent Insurance Agents of NM 1511 University Blvd. NE Albuquerque, NM 87102. (505) 843-7231. Fax (505) 243-3367. Web site 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 for details

IIANM Staff President/CEO Thom Turbett Vice President Lorri Gaffney Communications Director Rachel Sheffield


"The Voice" of Independent Agents since 1934

o VZ

Among Those Shopping for Car Insurance, More Are Switching Insurers 05 IIANM's Southern Seminar! 15 hours of CE in Las Cruces, NM


Fireman's Fund Insurance Made The Golden Gate Bridge A Reality


5 Keys to Effective Time Management


Unlock Your Big "I" Benefits


When Residents Have No Coverage... and Worse


IIANM Welcomes New VP of Member Services, Consuelo Trujillo


Help Clients Achieve Long-Term Financial Stability


Lessons Learned About Agency Contracts


"Cat Skinning" (a.k.a. Risk Managing an ATV Exposure)


2012 IIANM Company Partners


Death by Powerpoint


Workers Comp Premium Likely to Rise


In Every Issue Tech Talk


Insurance Programs Administrator Julie A. Franchini

ABEN - The Next Big Thing in Continuing Education


Member Services Associate Renee Trujillo

June's Clickable Calendar


Odds n Ends


2011-2012 Officers Chair Scott Jones Vice-Chair PJ Wolff Secretary/Treasurer Diana Hobbs National Director Sam Conlee Immediate Past Chair Kathy Yeager

Advertiser Index Acuity Burns & Wilcox Hallmark Insurance Company Litchfield Special Risks Lovelace Health Plan Market Finders, Inc. MexiPass Mountain States Insurance Group New Mexico Health Insurance Alliance (NMHIA) New Mexico Mutual Trustco

19 10 05 09 21 16 23 12 23 02 34

90% of Calls Answered within 30 Seconds. *

There is a new Hallmark Personal Lines, dedicated to providing our New Mexico agents, policy holders, and claimants the most responsive, personalized customer service in the industry. Hallmark couples this renewed focus on service with highly competitive rates, generous commissions and an exclusive contingency bonus program for personal auto business.

For more information, contact our business support specialists at 800-486-5616 or marketing@ Your success is essential to our success, which is why �Service is our Hallmark.�

*2012 Goal

Among those Shopping for Auto Insurance, More Are Switching Insurers The auto insurance shopping rate has reached the lowest point in the past five years, with only 25 percent of insurance customers indicating they shopped for a new insurer in the past 12 months, down eight percentage points from 2011, according to the J.D. Power and Associates 2012 U.S. Insurance Shopping StudySM released today. The study, now in its sixth year, examines consumer shopping and purchasing behaviors and overall satisfaction among buyers who recently purchased insurance across three factors (in order of importance): distribution channel; policy offerings; and price. While only one-fourth of auto insurance customers shopped for a new policy, 43 percent of those shoppers switched providers--the highest rate since the study first began measuring retention in 2008, and an increase of 3 percentage points from 2011. "Although fewer consumers are shopping for insurance, more current customers who do are willing to make a switch based on competitive quotes," said Jeremy Bowler, senior director of the global insurance practice at J.D. Power and Associates. "The increase in the proportion of shoppers actually switching suggests that fewer price-checkers are gathering quotes they are less likely to act upon, perhaps a direct result of the lower typical savings derived from switching, which has decreased from an average of $412 in 2010 to only $359 in the past 12 months." Bowler notes that customer retention rates are increasing at a time when auto insurance companies are spending more money to entice customers to switch insurers. Industry-wide, advertising expenditures increased by 12 percent in 2011, compared with 2010, according to an analysis of statutory filings data for 2011 performed by Dowling and Partners, LLC. "The industry spent $5.7 billion on advertising and allowances in 2011, but this increased spend does not appear to have generated a commensurate increase in market churn," said Bowler. The study finds that 52 percent of auto insurance shoppers start their shopping process online, and 73 percent visit at least one insurer's Web site at some point during their shopping experience. More significantly, 32 percent of customers solely obtain quotes online, and today 34 percent of all recent shoppers state they would most prefer to purchase their new policy online.

"Shoppers now expect to be able to visit an insurer's Web site and complete their purchase in the same visit," said Bowler. "In most cases, shoppers can compare many policies online and narrow down their search field entirely via this self-service paradigm. From that point, they can then decide if they need to speak with an agent or to continue their online purchase process." Insurance Shopper Customer Satisfaction Rankings The Hartford ranks highest among auto insurers in providing a satisfying shopping experience, and receives a score of 857 (on a 1,000-point scale). The Hartford performs particularly well in policy offerings and price. Rounding out the top three highest-ranked insurers are Liberty Mutual (850) and American Family (845). This year's report management discussion is available for download, please click here. The management discussion examines the role of the Web in consumer shopping behavior, and highlights the strategic choices available to insurers as they strive to adapt their traditional sales models to better align with rapidly evolving customer preferences. The 2012 U.S. Insurance Shopping Study is based on responses from more than 16,100 shoppers who requested an auto insurance price quote from at least one competitive insurer in the past 12 months and includes more than 50,000 unique insurer evaluations. The study was fielded from January to February 2012. About J.D. Power and Associates Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services company operating in key business sectors including market research, forecasting, performance improvement, Web intelligence and customer satisfaction. The company's quality and satisfaction measurements are based on responses from millions of consumers annually. For more information on car reviews and ratings, car insurance, health insurance, cell phone ratings, and more, please visit J.D. Power and Associates is a business unit of The McGraw-Hill Companies.

Independent Insurance Agents of New Mexico - - * June 2012

Page 5

Attention southern New Mexico

Get your 15 hours of Continuing Education for both Property & Casualty and Life & Health Licenses.

We know how important education is to you! So we’ve put together our best classes... Please join us at the New Mexico State University Campus on July 10th & 11th. 16th Annual

Southern Seminar 2012

Page 6

Independent Insurance Agents of New Mexico - - * June 2012

16th Annual

Southern Seminar 2012

(ACSR class credit)

Southern Seminar Continuing Education:

P&C Pre-licensing Exam Review Course:

Company Sponsors & Exhibitors:


Independent Insurance Agents of New Mexico - - * June 2012

Page 7

Source: Business Wire, Inc.

Insurance Made Golden Gate Bridge A Reality San Francisco’s Golden Gate Bridge – a bridge that has become a global icon of the San Francisco Bay Area – recently celebrated their 75th anniversary. A little-known fact is the San Francisco insurance company that contributed to making this possible.

Did you know?

Back in the 1930s, construction of the Golden Gate Bridge was insured by a local Bay Area company, and that company still exists today – Fireman’s Fund Insurance Company.

The Fireman’s Fund Errors & Omissions Policy for insurance agents is one of the best deals in the marketplace today. Call Julie Franchini for a quote on this IIANM endorsed product. 505-999-5802

According to the Golden Gate Bridge: “History of the World and People,” on November 4, 1930, voters within the recently designated Golden Gate Bridge and Highway District went to the polls and put up their homes, farms and business properties as collateral to support a $35 million bond issue to finance the bridge. Fireman’s Fund underwrote the construction surety bond for what - at the time - was a staggering amount of money. Opponents of the bridge felt that the timing of the bond election was considered economically reckless, as it would create bonded indebtedness during the Great Depression; proponents saw the construction as economic relief from the Depression. In the final vote, 145,697 voted for construction, while just 47,005 opposed the idea. Having the construction bond insured by Fireman’s Fund helped to create confidence in the project. "We are so proud to share in the rich history of this iconic bridge whose extraordinary architecture and beauty has led it to become a symbol of the gateway to San Francisco," said Lori Fouché, President and CEO of Fireman’s Fund. “Since 1863, Fireman’s Fund has been an integral part of the San Francisco Bay Area, partnering with so many innovative businesses and families that call the Bay Area home.” Insuring the building of the Golden Gate Bridge was not the first time that Fireman’s Fund had demonstrated specialized expertise, dependability and innovation in its underwriting.

Boston Fire (1872) One year after the Chicago fire, a major fire destroyed Boston. Fireman’s Fund paid all claims. San Francisco Earthquake (1906) The company’s headquarters were completely destroyed, but Fireman’s Fund paid the claims of all policyholders, with a combination of cash and stock. Charles Lindbergh’s Trans-Atlantic Flight (1927) Fireman’s Fund insured the construction of the Spirit of St. Louis, which Lindbergh flew nonstop from New York to Paris. The “Talkies” (in the late 1920s) Fireman’s Fund insured movie studios concerned about the risk of introducing movies with sound – the “talkies.” Since then the company has played a significant role in underwriting insurance for major motion pictures. Refurbish of the Golden Gate Bridge (1982) Again, Fireman’s Fund stepped up and underwrote the construction bond for the refurbishing of the Golden Gate Bridge. About Fireman’s Fund Insurance Company

Below is a timeline that illustrates Fireman’s Fund’s history of insuring major events: Great Chicago Fire (1871) While many insurers went bankrupt, Fireman’s Fund paid Page 8

all claims, even though its losses exceeded its assets. This demonstration of endurance earned the company a national reputation.

Founded in 1863, Fireman’s Fund Insurance Company is a premier property and casualty insurance company providing personal and commercial insurance products backed by industry-leading claims and risk management solutions. Since 2004, it has donated more than $29 million in grants to local fire departments across the U.S. as part of its commitment to safer communities. For additional information, visit

Independent Insurance Agents of New Mexico - - * June 2012

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 largest independent wholesale broker and underwriting manager. Need help with personal insurance? No one has you covered like Burns & Wilcox. Albuquerque, New Mexico | 505.822.0018 toll free 866.643.8538 | fax 505.822.0092 • Commercial • Personal • Professional • Brokerage • Binding • Risk Management Services Page 8 Independent Insurance Agents of New Mexico - - * June 2012

We all have the same amount of time in a day - 24 hours. So why do some people seem to get a week’s worth of work done in a day, while others get a day’s worth of work done in a week? More often than not, the amount of work people get done during the day comes down to how effective they are at managing their time. So how can we get more done in less time and make the most effective use of our 24 hours each day?

5 Keys to Effective Time Management 1) Have a plan. You may have heard the saying: If you fail to plan, you plan to fail. Without a plan, you’re like a rudderless ship trying to navigate the open ocean and your business will more than likely end up on the rocks. Your plan does not have to be big and complicated, in fact, you want it to be as simple and easy to follow as possible. The most effective “simple” plan is a list of important items you need to get done during the day, prioritized from most important to least important. The most effective way to follow your plan is to start with the most important task and work on it until it is done. After you finish the first task, move to the second most important item on your list and work on that one until complete. Continue in this fashion until you finish your items or run out of time in the work day. At the end of each day, make a list of items for the following day. Point to keep in mind: Studies have shown that every 15 minutes of planning saves you an hour of work. 2) Have the self-discipline to stick to your plan. Once you have a plan, you have to have the self-discipline to stick to the plan. Phone calls, e-mails, and other items, both business related and personal, will try to throw you off during the day. Your objective is to stick to your plan and not allow other distractions to get in your way. Granted, there will be times when you have to respond to other items during the day and temporarily jump off your plan, the goal though is to keep those to a minimum. Remember, if you don’t stick to your plan, even the best plan in the world will be ineffective. Point to keep in mind: If you leave a task, it takes an average of 10 minutes to get back to where you were before you left the task. 3) Get organized. How much time do you spend during the day looking for things like car keys, that important piece of paper, or someone’s phone number or mailing address? It’s amazing how much of the day can be consumed looking for items in a messy, unorganized home, office, or workspace. Keep these areas clean and know where everything is. Keep similar items such as business cards,

contact information, files on clients, and other items in one location. Keep keys, and items you use every day, in the same spot each time so you don’t have to remember where you left them. If you’re messy by nature, take five minutes at the end of the day to clean, organize, and get your work area uncluttered. Point to keep in mind: The average person spends 24 minutes a day looking for things they’ve misplaced. That’s almost 3 1/2 full work weeks a year. 4) Find out where you’re wasting your time. Keep a time log for a week and keep track of where you spend your time during the day: Two hours on personal calls, 35 minutes on Sudoku, 24 minutes looking for Joe’s e-mail with contact information, an hour and 45 minutes at lunch with Keith, 11 minutes in line at Costco. If you haven’t done this exercise before, you will be amazed where you end up spending, and wasting, a lot of time. Point to keep in mind: Come up with solutions to this wasted time: time limits on calls, going shopping at slower times, etc. 5) Work hard, work smart Work when you’re at work. Develop a sense of urgency and work hard only on work at work. Do just one more thing in the morning and another before you quit for the day. If you have to, start your day earlier and stay later. Be the hardest working person you know. Follow the 80/20 Rule. This rule states that 20% of your work produces 80% of your results and vice versa. Spend time on doing the 20% really well and delegate as much of the 80% as possible. Also, use best practices, don’t reinvent the wheel. Find the really successful people who are getting a lot done and find out what they do. The five steps above can double, triple, and even quadruple the amount you get done in the same amount of time. The bottom line: Have a plan along with the self-discipline to do what needs to be done when it needs to be done. Work smart, but be willing to work as hard as you have to when you have to in order to get the job done. John Chapin is an award winning sales speaker, sales trainer, coach, and co-author of the gold-medal winning "Sales Encyclopedia" a comprehensive how-to guide on selling. "Sales Encyclopedia" is written for sales professionals in all industries at any level of experience. Utilizing more than 21 years of sales experience and as a number one salesperson in three industries, John co-founded Complete Selling Incorporated, a company helping salespeople double their sales and find their motivation. If you would like access to John's free white paper on what it takes to be successful in sales along with a monthly newsletter, you can visit John's website at http://www. For permission to reprint, or to reach John, email him at

Independent Insurance Agents of New Mexico - - * June 2012

Page 11

Mountain States Insurance Group is pleased to introduce a new suite of property enhancement endorsements. The following are some highlights of our Premier Endorsement. Contact your underwriter for more details and pricing. ADDED COVERAGES Business Income & Extra Expense Actual Loss Sustained – Up To 12 Months $250,000 From Dependent Properties $50,000 Expanded Blanket Limit $250,000 Accounts Receivable Valuable Papers and Records (Other then Electronic Data) Debris Removal Outdoor Signs not Attached to Buildings Expanded Crime Blanket Limit $25,000 Employee Dishonesty Forgery or Alteration Money and Securities Money Orders and Counterfeit Money Credit Card Invoices Computer Fraud Computers, Media & Electronic Data - In One Policy Year $100,000 Foundation $25,000 Lock Replacement $2,500 Covered Crime Reward $10,000 Brands and Labels $25,000 Business Personal Property - Seasonal Increase 25% or $50,000 INCREASED LIMITS Outdoor Property $25,000 Tree, Shrub or Plant $2,000 Pollutant Cleanup & Removal $25,000 Ordinance or Law Coverage $250,000 Property of Others $25,000 Property Off-Premises $25,000 Fine Arts $25,000 Sewer & Drain Backup $25,000

Stable – Secure – Permanent Page 28 Page 10 - 505.764.1400 5051 Journal Center Boulevard N.E., Albuquerque, NewofMexico Mexico, 87109 Independent Insurance Agents Agents of New - - * June- *2012 Independent Insurance New Mexico - June 2012

Unlock Your Big “I” Benefits!

Did you know? The Big I website is actually TWO sites in one? Go to and you will be on the New Mexico specific homepage. If you click on the “IIABA” in the top menu bar, you will be taken to the national association site. You can also access many areas of the national site from links on the IIANM pages, or use the direct addresses below to go directly to specific pages.

What will your email address and password help you access on the Big “I” Website?

Log in and see what treasures you may find!

Virtual University • • • •

Research Library Ask the Expert Register for on-line CE classes and webinars Sign-up for the free newsletter

IA Magazine Access online articles from the monthly print publication and read your weekly Insurance News & Views newsletter.

Legal Advocacy (Click on “Legal Advocacy”) or visit iianm’s Advocacy page. • • • •

Carrier Contract Reviews Hot topics on Capitol Hill Information on insurance related Federal court cases Industry Legal Issues FAQ’s & ‘white’ papers

Big “I” Markets Access commercial and personal lines products such as affluent homeowners and commercial package products from top carriers, with no fees and no production minimums.

Member Marketing Activity Center

Big “I” Professional Liability Risk management Website “E&O Happens” Dive into a wealth of resk management resources available to Swiss Re policyholders.

Trusted Choice agents Access logos, advertising material, branding guidelines plus your agency’s profile and account information.

Member Directory This Directory is extremely useful to IIANM’s members. It contains: A listing for all Agency, Associate and Affiliate members of IIANM A section that includes the numbers for the State of New Mexico Insurance Division, contacts for IIABA National Departments, and ‘Frequently Called Insurance Organizations’

It is important that names and email addresses for each agency employee be listed in our member database. Many of our website pages are proprietary and may only be accessed with your user ID and password. Your email address is your user ID. If you don’t know your password select the “Forgot username or password?” option listed on any page of the IIANM website ( and it will be sent to you.

Use your login credentials to purchase the on-line underwriting and sales reference library.

Feel free to contact us at (800) 221-7917 with questions on these resources or other member benefits.

Access a suite of marketing resources including leads, postcards and email campaign ideas.

Big “I” Professional Liability Virtual Risk Consultant

Independent Insurance Agents of New Mexico - - * June 2012

Page 13

Steve by, Steve Anderson

Three Videos Every Agency Should Create Video is a powerful way to share information and educate both clients and prospects. The challenge in creating video is that it takes a bit more than writing a simple article. Writing an article is relatively easily and you can simply hit Submit. Your content is then instantly available online and searchable by various search engines.

viewers aren't just seeing a talking head the whole time. This can also save you a lot of time and frustration if you are not as comfortable writing.

Video is not complicated but it does take a bit more work. For starters, someone has to be in the video, on camera, unless you're doing animation or something else. At the very least you need decent (if not great) lighting and good quality audio. Furthermore, it does matter, at least a little bit, how you look in your video -- presentation does matter.

Insurance is complicated. Most people don't really understand what an insurance policy covers and how a piece of paper will protect them if they have an accident. By creating a series of short coverage explanation videos, you will create a library that people can go back to again and again. These videos should be quick (less than three minutes), edited, and then shared via several different mediums.

One of the biggest reasons insurance agencies don't use video as a strategy is because there's a misconception about production value. Many agency owners believe the video has to be high-end and then produced and edited by a pro. That's simply not the case anymore. The public's expectation of video has changed. There are customers and prospects who can get value from the information you have to share. So here are three different types of videos you can create and add into your marketing strategy right away.

1. Make a video case study. This can be as simple as setting up a web cam or flip video and interviewing one of your customers, then mixing that video with a very simple editor or presentation tool (these are low cost and some are even free). This is authentic, off the cuff, and tells your agency story better than you can. The video can be shared via your website, through email, and on different social platforms.

2. Make a video article. You should keep in mind that different people want different kinds of content. You can create a simple video article by turning on your web cam and hitting Record. I would suggest you create an outline of what you would like to say, but would suggest you don't read a finished written article. You want to sound like a conversation between you and the person watching. Again, a simple web editor tool can allow you to very quickly and elegantly add other visuals, so your Page 14

3. Coverage explanations.

There are a number of agencies that are being very creative in their use of videos to communicate and educate both prospects and clients. When you begin experimenting with video you will be amazed at the impact it can have to enhance relationships. Learn the Basics of Web Video... The Right Way There can be a lot to learn with web video. So many strange terms, so much confusing technology and so many people saying this, that and the other thing. For most agents, it can be overwhelming. But wouldn’t it be great if you could cut through all the hype and have a simple, plain blueprint that you could follow... a blueprint that would tell you exactly what to do... step by step... for creating high-quality videos and getting them online? In other words, just the stuff you need to know to get great looking videos online... all in a straight to the point, nononsense format. It’s in a new course called Web Video ABC’s. This course is designed specifically for beginners. Or people who started, got frustrated and stopped. Or anyone who wants to know the basics of doing web video the right way. I have personally taken this course and can highly recommend it. Click here to take a look to see if it’s right for you.

Independent Insurance Agents of New Mexico - - * June 2012

Check and Update Your Trusted Choice Profile If your agency is a member of IIANM then you have likely been hearing a lot about the changes in the Trusted Choice program and the coming launch of the Consumer Agent Portal. This portal will help consumers discover your agency by using the Agency Locator hosted at the Trusted Choice website. As the advertising initiative gears up, hopefully consumers will find your agency online and contact you for more information and quotes. You should make sure the information listed at Trusted Choice for your agency is complete and accurate. Take these simple steps to verify your profile:

M ber fit!

1. Go to and search for your agency by zip code.

s with d print ce® es and


tagged ormatheir r cam-

Zip/Postal Code

Ladies and Gentlemen – Life as we know is changing! Okay, I know that is pretty dramatic when writing about insurance. However, you all know that the way we communicate with our clients, the way we prospect for new clients, the way we market ourselves – all those things have been changing. That is not news to most of you. Some Sobering Statistics • ComScore, Inc. tells us that a full 75 percent of insurance consumers start their research for auto insurance on the web • Allstate, Geico, Progressive Direct, and State Farm spend $2.6 billion in marketing and advertising per year, most getting consumers to shop the web for insurance • These four insurance companies get 71% of online quotes submitted • 28% of consumers want to interact with their insurance provider via their mobile device

2. To change update the information go to TrustAreorYou Being Located and log in to the site using your by Prospects? User ID (likely your email address) and Password. If you don't know them or don't yet have an account, follow the instructions on the site to benefits retrieve of your password or set One of the immediate being a up a new account. ®

ce® grams ncy hat ions yone ough it

Trusted Choice agency is the ability to be found

3. Select "My Account" the bottom of the page to by prospective clientsatsearching for an indepenupdate your Agency Profile.

visit ents.

dent agent through the online Trusted Choice

4. Add and update the agency information ®as neces® agency locator. National Trusted sary. Make sure to fully complete the Choice information about directs consumers to TrustedChoice. your advertising agency including additional locations, agency description, carriers represented, etc. A key com where they can enter their zip code toelement find a is to make sure your agency website address is listed. I local agent. Only Trusted Choice® agencies are recommend that you create a separate "Trusted Choice" listed. landing page on your website and use that link here. Using a landing page will allow you to customize the experience when a consumer clicks on the link.

sumers local ely on ice® ocal ple, releassafety

To take full advantage of this benefit, IIANM

This short video, Updating Your Trusted Choice Profile, members are encouraged to complete their onwill walk you through the process. line profile by logging into

It willagents take 24 hours for the information to be updated on and updating or adding information about the Trusted Choice website. (A quick search of several their agencies. Principals who have not received location agencies shows that there is currently limited a “welcome” e-mailinoran a launch in the mail information contained agencykitprofile.)

edncy’s n on w.

brand agenndance ted brand meant


Join the Cause to Increase Your Market Share.


should contact Trusted Choice at (800) 221-

Taking this simple step will help your agency take a small 7917 or step to maximize its Internet presence and become more visible to the new digital consumer.

• A whopping 84% of millenials use the comments of others to help with purchase decisions; 70% of boomers do the same • Almost 1/3 of millenials won’t purchase insurance without some other commentary from other consumers To make matters worse, the vast majority of independent agencies won’t even show up in the first few pages of the search results when a consumer does a search for personal lines insurance. While each of these facts provides individual challenges and unique opportunities, they clearly tell us that the consumer expectations are growing and that to remain relevant, the independent insurance industry must change. Sadly, the average consumer thinks an “independent agent” is the direct writer’s office down the street from them. Since he is a small business like we are, they often lump us all together – and we know that could not be further from the truth! We not only offer Choice – but advocacy on claims and customization of coverage, as well. This is what sets us apart from the directs and captives. So, I encourage you to visit the program website at http:// and watch for more information on CAP. Then take a moment to think about the branding power that exists through this new endeavor. ~Adapted from Marty Agather’s article, “A Tip of the CAP”

Independent Insurance Agents of New Mexico - - * June 2012

Page 15

When Residents Have No Contents Coverage... A woman living alone at her parents’ secondary home is denied coverage for her stolen belongings.

...and Worse by Bill Wilson

An agency insures a couple who has two HO-3 policies in Maryland. One property is occupied by the couple’s daughter as her primary residence, but she is not a named insured.

occupied by an insured, and she has no liability coverage because she's not an insured.

The daughter filed a claim for loss of her personal property because the residence was burglarized. But the insurance company denied the claim under her parents’ HO-3 because she is not a resident of their household, even though she is a relative.

Worst of all, it’s quite possible the homeowners themselves would have no coverage on the dwelling if it were damaged or destroyed. Coverage A applies to the dwelling "where you reside." Since her parents don't reside there, according to some legal decisions, there is no Coverage A. HO-3 eligibility requires owner/occupancy and, according to ISO, the instant a person no longer resides in a home, he loses his Coverage A.

“Who is right?” the agency asked Big “I” Virtual University faculty, noting that it would have written a dwelling policy for the house and suggested an HO-4 for the daughter— had it been fully notified of the living arrangements. This type of situation is exceedingly common, and according to VU experts, the company’s denial of coverage is probably correct. Often, an agency does not know about such revised living arrangements. Most likely, there is no real increase in risk, yet the circumstances may result in a coverage gap. In this case, VU faculty finds one for the tenant. The daughter is not an insured as defined by the policy. She is not a named insured, nor is she a member of the named insureds' household because she would have to be living with them for that to be the case. Instead, she's a tenant or permissive resident and has no personal property coverage, not even that which would normally be available for a guest, which is as follows: 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: 1. Others while the property is on the part of the "residence premises" occupied by an "insured"; 2. A guest or a "residence employee," while the property is in any residence occupied by an "insured." As noted above, the daughter has no worldwide coverage because she is not an insured. She also has no incidental on-premises coverage because the residence is not

Take the Maryland case, Shepard v. Keystone Ins. Co. 743 F.Supp. 429, 432-33 (D. Md. 1990). The court held that there was no coverage because the named insured(s) didn't reside there anymore. Based on this, it is imperative that the dwelling be rewritten as a dwelling program account with all haste. As noted by the agent, the daughter needs her own HO-4. Another example of where this type of coverage gap can arise - typically without the knowledge of the agency - is when a person is in a hospital or nursing home and a decision is reached that the person will be unable to return to his home. Arguably, at the instant this decision is made, that person's HO Coverage A vanishes because he technically no longer resides there. The full version of this story, which includes other expert responses, is on the VU. For help accessing the website, email to request login information. This story was also featured in the May issue of IA magazine with these other stories about coverage for swimming pools under homeowners and commercial general liability policies.

Independent Insurance Agents of New Mexico - - * June 2012

Page 17

elcomes... IIANM W Our New Vice President of Member Services, Consuelo Trujillo!

Consuelo Trujillo considers herself an ‘insurance brat’, having been exposed to the industry at an early age by relatives working in insurance in her hometown of Las Vegas, New Mexico. She began her actual insurance career in 2001 under the direction of her Uncle, the late Tony Trujillo, owner of The Trujillo Agency. At the time she was working part-time while attending West Las Vegas High School. After graduating, she began working full time as a customer service representative and later became a licensed agent for Northern Insurance in Las Vegas. While working for Northern, Consuelo also began attending New Mexico Highlands University. She graduated in 2008 with a Bachelor’s Degree in Business Administration & Management, and the agency rewarded her with a promotion to Operations Manager. After deciding to relocate to Albuquerque, she commuted to the Northern Insurance branch in Santa Fe, New Mexico. Consuelo has always aspired to play a larger role in supporting the insurance industry, and when an opportunity to work for the Association presented itself, her boss and IIANM Vice-Chair PJ Wolff III encouraged her to apply. It seems that the stars have aligned and her insurance background, management degree, new hometown, and her vision to help the industry have all come together. She can now channel that inner insurance brat by helping independent agents and agencies to succeed. We hope you will join us in welcoming Consuelo to our team. Her enthusiasm, work ethic, and passion for helping people will serve her well in her new role of Vice President of Member Services.

Dear Members, We want to ask for your help in an important research project that is currently underway. The Independent Insurance Agents and Brokers of America (IIABA) recently launched the 2012 AGENCY UNIVERSE STUDY. Conducted every two years, the result of this comprehensive survey will provide critical information for the independent agency system, for our association and for the insurance carriers you represent. Future One, a cooperative effort of IIABA and more than 20 leading independent agency companies, has carried out this research since 1983. Results will be reported in Independent Agent magazine and many other industry publications, as well as be used to help other industries and consumers be better informed about our industry. IIABA is working with Zeldis Research Associates, an independent market research firm, to carry out the survey and ensure the quality and confidentiality of the data. During the past week each member agency should have received an email from IIABA’s President & CEO Bob Rusbuldt inviting it to participate in this research. There is a proprietary link in the email to the website where you can complete the survey. We ask that all members please participate in this research project by clicking on the link and sharing their responses and opinions. Your responses will be kept completely confidential and will help the independent agency system, IIABA, our state association and carriers provide the products and support you need most. IIABA recognizes that your time is extremely valuable. As a token of its appreciation, everybody who completes the survey will be entered into a drawing for 12 prizes totaling $3,500, including a $1,000 grand prize, two $500 second prizes, four $250 third prizes and five $100 prizes. Thank you for taking the time to participate in this important survey. Please send any questions about the survey to Madelyn Flannagan, vice president of agent development, education and research, at

Page 18

Independent Insurance Agents of New Mexico - - * June 2012



THAT MATTERS Independent Insurance Agents of New Mexico - - * June 2012 Page 17

Help Clients Achieve by Dave Evans

Long-Term Financial Stability Life insurance is vital for those starting families at an older age and working later in life. With the economy sputtering along since 2008, any signs of economic improvement have been welcomed by the public. At the close of the first quarter of 2012, one positive sign is that sales of new automobiles have been improving. One of the chief reasons given is that with rising gasoline prices, consumers were looking to purchase more fuel efficient vehicles to lower their weekly gas expenditures. With the average age of Americans’ cars at 10 years, many consumers are also looking to replace their older vehicles and take advantage of advances in technology the new cars provide. This should generate higher personal auto commissions for independent insurance agents because newer cars typically have higher auto premiums. As consumers determine that purchasing a new car with the current low-interest rates makes sense to gain better fuel efficiency and lower their operating costs, it brings to mind a similar issue with purchasing life insurance. Most agents have experienced the analytical client who believes that buying term and investing the difference makes the most sense. Of course, studies show that most consumers rarely follow through on investing the difference. Still, for clients who have a long-term need to provide an immediate estate and liquidity upon their death, a fresh look at the permanent versus term debate is in order. Meanwhile, the halcyon days of high-interest rates followed by high-stock-market returns when rates began their decline are a faded memory. Many agents who sold life insurance during that time in the 1980s can remember clients insisting on seeing 12% equity return assumptions for their variable life insurance proposal and 8% interest rate assumptions for their universal life illustrations. In comparing term versus permanent life insurance, what is Page 20

a realistic long-term assumption when calculating an appropriate discount rate and earnings assumption for an internal rate of return or net present value analysis? With rates for 10-year Treasury bonds hovering around 2% and 30-year treasuries less than 5%, a more realistic discount rate assumption might be a net 6% or lower and a net investment return of 7% (that is, net of investment management fees and execution costs). Agents may want to discuss assumptions with clients and explain that permanent insurance may be the more cost-effective way to purchase insurance over the long haul. Of course, agents should always first develop the client’s life insurance need and then discuss the most efficient way to purchase the coverage. For younger clients, a combination of term—using a conversion rider that allows for the ability to purchase amounts without evidence of insurability—and permanent insurance may be most appropriate. In addition, some consumers neglect to consider that life insurance only goes up in price as the person ages. So, just like the consumer who is buying a new car to lower his future operating expenses, agents should remind their customers that permanent insurance rates go up materially at attained ages of 45 and older. One crucial issue is that many people do not perceive a long-term need for insurance. They may be purchasing it to pay off a mortgage in the event of their death, or to provide income for college expenses for their dependents. But many people are now getting married and having children later in life. It’s now common for people to work until an older age, and it’s possible that the eligible age for Social Security benefits will be pushed further back. Given these trends, the reality is that most families will need to guarantee replacement income in the event either spouse dies. If agents take the time to have this conversation with clients and do the math, chances are they’ll increase their sales of life insurance while helping clients achieve financial security.

Independent Insurance Agents of New Mexico - - * June 2012

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 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.

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

exceptional care for

I read an article about an 85-year-old contractor who still does business on a handshake. Through all his years in business, he has never been involved in a lawsuit. He is proud of his track record, as he should be. But that does not mean anyone should follow his example. Perhaps part of his success is his ability to read people or perhaps he wields enough power in his business relations so he never gets sued. But at least part of his success is based on luck, and to count on luck for success is dangerous.

Lessons Learned about Agency Contracts by Chris Burand So if you do not want to depend on good luck, below are some lessons learned about agency contracts and getting sued. 1. Hire someone who knows the insurance industry to work with your attorney to write your contracts. I have only met a couple of attorneys that knew enough about insurance agencies to write a proper contract. It does not matter if it is an employment contract, a buy-sell contract, or even a corporation's bylaws. Independent agencies are unique. To write a proper contract, the clauses in the contract have to be specific for insurance agencies. The attorney who writes a bad contract is not going to give you your money back and is not going to pay you damages. It is your responsibility to make sure the contract meets your needs. Do not sign the contracts your attorney provides without reading them first. I have seen agencies decimated because their attorneys wrote the wrong contracts. They did not understand insurance agencies adequately and the agency owners did not read the contracts before signing them. Frankly, in many of those cases, the agency owners deserve to wear a dunce cap because there really is no excuse for not reading the contracts once the attorney returns them. At the very least, have someone knowledgeable about insurance agencies read them on your behalf. 2. If at all possible, settle if sued. Unfortunately, in my opinion, the bar for filing a lawsuit is too low. This gives rise to my gut instinct that people should fight when sued. Some of the errors and omission (E&O) claims, employment claims, shareholder lawsuits and divorce valuations that I have seen have been so incredibly ridiculous that I often have difficulty understanding how any court would even give the plaintiff the time of day. That said, it is very expensive to litigate principle. So when possible, the wise choice may be to settle. 3. Beware the other side's attorney who does not want to settle because he or she will not make enough money. Make sure you have a strategy to eliminate that attorney's ability to stretch out the litigation. 4. Because of #2 and #3, make sure you ALWAYS observe #1. 5. The fact you haven't been sued yet often has nothing to do with skill. I have seen an agency with great E&O practices be sued multiple times. While they won 95 percent of the claims without even going to trial, they still had to endure the suits. On the other hand, an agency with absolutely the worst E&O practices I have ever witnessed has never been sued once. Never, ever believe that just because you haven't been sued that you are better than anyone else, especially if you have not taken specific actions to improve your procedures and obtain excellent agency contracts. Similarly, I have seen horrible employment agreements, poorly written and maybe even illegal. And yet nothing ever came of them. Sometimes the agency had so much more power than the employee, the employee would not sue. But this is a poor strategy. What kind of employees will those agencies attract? 6. Right and wrong have little to do with the outcome in court.

Page 22

Independent Insurance Agents of New Mexico - - * June 2012

First, if you go to court, you lose, even if you win. Second, assuming that you will win because your case is so strong is a bad assumption. Those who have been in heavily litigated cases know that truth is not the goal. The legal system is not truly designed to arrive at "the truth." It is designed so that in many cases, the least bad choice is made and whether that decision is right or wrong is not part of the equation. I have seen too many agents who were in the right lose because they either did not have the deepest pockets, the jury or judge was sympathetic to the other side, or the attorney for the other side was better. Right and wrong have little to do with the outcome. 7. Deep pockets matter. It is no secret that good attorneys cost more. My experience is that hiring slightly better than average attorneys may not pay off, but hiring the best does. This is true when having contracts written and it is true when going to court. Similarly, do not hire attorneys who are jacks of all trades and masters of none. An attorney who mostly writes contracts is rarely the attorney you want at trial. In fact, if you think you might go to trial over a contract, hire a trial attorney to analyze your contract because it is that perspective that will matter. Deep pockets matter too when a case goes to court because if the employee or insured is considered the poor plaintiff or defendant and you look like the rich capitalist, your odds of winning decrease. This is why items #1 - #6 are so important. Agency contracts are rarely in the forefront of agency owners' minds until something bad happens and then, almost inevitably, the owners wish they had better contracts. Have your contracts not only written by quality attorneys, but also have them reviewed by someone who really knows the insurance industry.

Did you know? IIABA has analyzed dozens of carrier contracts and has posted the reviews on their website. You can access the reviews by clicking on the “Legal Advocacy� menu item.

Insurance agents!

You spoke, we listened! New plans and more options now available!

Click here to visit our website. Independent Insurance Agents of New Mexico - - * June 2012

Page 23

“cat skinning”


VU Fac

(a.k.a. risk managing an atv exposure) There's an expression that says, "There's more than one way to skin a cat." In a manner of speaking, that's another way to describe the risk management process. As you'll see below, insurance isn't the only tool you have when helping your insureds manage risk.

"A property owner who owns a 70-acre farm was asked to allow friends with ATV's to access the property for off-road riding. This owner is concerned about the liability associated with this permission should he consent. Is there any recommended disclaimer or hold harmless form that this individual can use to protect himself against possible future damages or lawsuits should an accident occur? I realize this is a question that is best consulted about with a professional attorney, but is their some guidance that we as a commercial agent can reference?" Bob...I've included excerpts from our faculty responses below. The consensus was that providing "recommended disclaimer or hold harmless" wording would come pretty close to practicing law without a license. Our faculty members had either not seen any such wording or strongly recommended that it not be the agent that supplied it...essentially, explain that this is a serious legal exposure that must necessarily be addressed by a qualified attorney. I think you'll see from the responses below that our best suggestion would be to discourage your insured from using his property for this purpose. One of our faculty members is very strong in risk management and has seen "friendly" situations such as this escalate into extraordinary

liability claims once a serious injury transpires. If the insured insists that he wants to do this, then he should be very aware that the situation could ("probably" might be a better word) come back to haunt him (no pun intended...this really could get serious). If so, YOU would probably be the one who would want a hold harmless agreement, though that wouldn't protect you from possible third-party actions that have been recognized in some legal jurisdictions. Again, all you can do is provide the coverage (with some REALLY big limits) and suggest that he work this out with a good attorney...better yet (again), beg him not to pursue this...just show him some of the ATV statistics provided by one of our faculty members below. Even if he got an ironclad hold harmless agreement with the ATV owners, that wouldn't protect you from unknown riders, nor from claims by other third parties injured by the ATV's on your premises. This scenario is a great illustration of Risk Management 101. IF your insured is insistent upon allowing this activity to take place on his property, you'd certainly want to make sure that proper coverage and high limits are in he willing to pay for this to maintain these friendships? Perhaps his excuse for not allowing this would be to just show these folks how much this is going to cost him in increased insurance premiums. And, if they offer to reimburse him, let him know that, with such remuneration, he may now have a "business" exposure not covered by his policy. Wish we could give you more specifics on this but, in this case, the old risk management technique of "avoidance" is probably most appropriate...I doubt that the other RM techniques (e.g., loss control, insurance, and risk transfer) would be feasible or affordable. Let me know if we can help further. - Bill P.S. Here are some web sites with info about ATV's and accident statistics: • Insurance Journal • Children's Safety Network • Risk Management Internet Services (subscription only)

Page 24

Independent Insurance Agents of New Mexico - - * June 2012

Faculty Response: Let me suggest caution in regard to the Faculty Response: Concerned, and rightly so. I'd practice ATV question. I have dealt with situations involving ATV's and property owners for almost twenty years. Almost all of them were bad. Really bad.

the risk management technique of avoidance and simply say "no" to the request. Even with an "agreement," you're going to wind up in court.

One project was to perform a risk assessment for a private community following a catastrophic ATV mishap. They owned several thousand mountainous acres surrounding a lake and housing area. ATV use had been very popular in the community. The tragedy was quite an education for everyone, the seriousness of the situation accentuated somewhat by the payment of several hundred thousand dollars not covered by insurance.

Faculty Response: Though I'm not an attorney, I'm aware of a couple of problems with using a hold harmless to control the liability exposure. First, they're only effective if they're signed by each person attending, not just the riders. Second, they're not effective with minors as they're not capable of contracting.

Faculty Response: This may be way too conservative,

but I think if a client wants some suggested language for ATV operation is dangerous. A sizeable number of mostly a disclaimer or hold harmless, the agent should recomyoung people are killed on these machines every year. A far mend that the client see an attorney. I believe that an agent larger number suffer catastrophic injury. The injury profile providing such suggested language, even “boilerplate lanarising from ATV use includes a high incidence of debilitating guage,� might be way too close to the line in practicing law. intracranial and cervical trauma. If the riders wears helmets, the injury patterns are more upper and lower cervical, with Agent Response: This was a good article and while a reduced incidence of intracranial trauma. The secondary there is no good way to protect oneself from litigation, traumatic pattern tends toward legs and pelvis areas. A not other than the normal remedies, we here "Up in Maine" uncommon problem is brain embolism. Both primary and sechave taken this issue one step further. Legislation was ondary traumatic injury patterns frequently result in permanent enacted (Title 14, 159-A, Limited liability for recreational or disability or death. harvesting activities). Our agency does a lot of business with loggers and truckers who operate on private logging ATV operators are usually young, and the costs associated with fatalities often pale in comparison to the expense of caring roads throughout the state. The public also has access to these same roads but "at their own risk." We have referred for a permanently and totally disabled youth. As you pose the question about reducing or transferring liability, let me suggest many subro-recovery adjusters to this law and the cases you assume the situation from which you have to defend your- were dropped as soon as they read it in detail. It has been upheld in a number of situations. I know nothing is foolproof self is a quadriplegic or catastrophic brain injured youth facing fifty years of nursing home confinement. This is more common but maybe if more states adopted this proactive approach, many of these lawsuits might be thrown out. than you think and juries are quite sympathetic. - Mark Fox, Sargent, Tyler & West, Brewer, Maine The ATV industry reached an agreement with the U.S. Department of Justice several years ago. The industry agreed to take the three-wheeled ATV's off the market and develop safety standards for the use of the four-wheeled models. The industry has also worked to develop some procedures for the operation of ATV's on private land and address the issue of liability. The industry materials are usually available from ATV dealers. I found them to be excellent. The issues of liability are complicated. Since each state has differing laws with regard to negligence, the involvement of an attorney is very important. A separate problem with ATV operation is the uninvited user. If an area is used by one party, other ATV riders may show up uninvited and use the site as if it were public property. This creates a different set of problems. With regard to insurance, it is important to make sure the ATV operators have coverage and to provide evidence. You want to trigger contractual coverage of the party using the property, even though that is likely to be of little comfort to you when you are sued for an injury or death described above. One final comment...ATV's often cause severe erosion and soil compaction problems. The farmer in question needs to watch the impact of the ATV's on his land very closely. He may find portions of his land compacted and suitable for paving in a remarkably short period of time. - Jim Mahurin

The Next BIG Thing in Continuing Education!

High quality continuing education for independent insurance agents, brought to you via live streaming video.

For more information and to view course listings click here

Independent Insurance Agents of New Mexico - - * June 2012

Page 25



independent insurance agents of new mexico

Partners Program

We’ve all been there at one time or another. It’s Friday afternoon after a big lunch. As the lights dim and the laptop begins to purr, we are suddenly lulled into a semi-comatose state. The presenter prepares to introduce the first of more than 30 slides and we prepare for the grueling endurance test that lies ahead, perhaps second only to the Iditarod. But if we dread it so much, why has it been estimated that there are more than 30 million Powerpoint presentations taking place all around the world each day? There has to be a reason that Powerpoint has been the industry program and the most common presentation software on the market since Microsoft introduced it in 1990, effectively replacing the 35mm projector, presentation boards and, in some cases, even handouts. Unfortunately, the number one reason for Powerpoint’s popularity may be the wrong reason. Too many people have used Powerpoint as a crutch, a way to circumvent their most dreaded fear - public speaking. As one executive explained, “Fear of public speaking ranks slightly below night-landing a plane on an aircraft carrier during a storm.” But he also points out that Powerpoint can actually help those with a public speaking phobia. “When they freeze up and forget their own name, they can just read it off the first slide.” So, it’s Powerpoint to the rescue! But in our haste to hide in the dark, glaring errors are committed that can prove lethal to even the most well thought-out presentation. In a recent survey of 750 business professionals who incorporate Powerpoint presentations in their business, only 22% were ultimately happy with what they have accomplished, with 88% saying they felt they needed to shorten their presentation. Explains one industry leader, “Presenters mistakenly assume that if the number of slides is modest, the audience will not believe the presentation adds much value.”

Death by Powerpoint Truth or Myth?

by Steve White

Here is what is referred to as the “Seven Deadly Sins of Powerpoint,” as put forth by Dr. Joseph Sommerville, head of a Houston-based firm specializing in helping professionals develop their presentation skills. Avoid distracting special effects (fade-outs, wipes, dissolves, etc.) and sound-effects. Avoid clip-art. It shows a lack of creativity. Try to use only your own scanned photos or purchase a CD of good-quality stock photos. Avoid templates. Why fit your original ideas into somebody else’s pre-packaged design. Create your own distinctive look and put your company logo at the bottom righthand corner. Avoid text-heavy slides. Don’t use paragraphs, quotes or even complete sentences. Limit your slides to no more five lines of text. Don’t use your slides as speaker notes. Avoid small type. It’s ok to read 12-pt type in this article, but for a Powerpoint presentation, a minimum of 40-pt. type is the way to go.

The problem isn’t usually the number of slides, but what is actually on them, which in many cases is too much text. In a medium made for bullet points, why do so many people write whole paragraphs after each bullet and then recite them from the slides? This is something that particularly angers one advertising VP; “If you are going to just read the slides, why not e-mail them and don’t make everyone come to the meeting?”

Avoid passing out handouts of your Powerpoint presentation before the event. They will be reading it rather than listening to you.

The slides should not serve as notes…. most grown-ups haven’t enjoyed being read to aloud since they were four years old. And if the audience is doing all the reading, then they aren’t listening to you. But before they can listen to you, they have to find you—which means don’t stay attached to your laptop at the back of the room. It’s like telling the audience “Hey, don’t look at me. I’m not important, I’m just an accessory to the equipment.” Use a remote, not a mouse. Get out front and lead the presentation—don’t let it lead you.

Even though one legal scholar proposed a constitutional amendment banning Powerpoint, and we assume he was speaking in jest (maybe), millions of business people throughout the world will continue to use it and refine it, as the technology upgrades. If used correctly and in tandem with a strong and confident speaker, it can be a powerful presentation tool, one that holds the audience’s attention and accomplishes it’s ultimate goal—to drive home a single, indelible point.

Proponents of Powerpoint tell us it can be an effective tool, one that puts powerful features at our fingertips, once we learn how to use them. “Powerpoint doesn’t bore people - people bore people,” they are quick to point out. True enough, but how do we handle those features? Perhaps the most effective way to know how to use Powerpoint to the best of our abilities is to first understand what not to do.

However, if used with little foresight and preparation, with graphics that appear to have been drawn by a small child, an over-abundance of text that flies around the screen like a swarm of locust, and a narration that drones on like verbal elevator music, the result will be like comparing Powerpoint to what one expert calls “corporate karaoke”: Tough to listen to, but we all applaud each other when it’s over.

Page 28

Avoid faith in technology. It’s the law of nature—machines break down. Have a backup of either another machine or transparencies or, at the every least, handouts.

Independent Insurance Agents of New Mexico - - * June 2012

Leasing: A Seamless Customer Experience

But don’t take it from us. Listen to your peers. Agents Express Leasing is an effective solution to manage your clients needs with today’s best equipment technology. Jay Byrnes of Byrnes Agency experienced how easy our leasing solution is for his agency: “As a longtime member of the “Big I”, I always knew of InsurBanc and their commitment to the independent insurance agent. Recently we wanted to update the agency with a new computer network and desktops, so I turned to InsurBanc for leasing options. From start to finish I experienced firsthand how seamless it was to conduct business with them. We have a 35 person agency so to update everyone’s computers was a decent size upgrade. InsurBanc made the process very easy and offered attractive terms and competitive rates which helped to manage the agency’s cash flow”. – Jay Byrnes ~ Byrnes Agency How it works: • Lease terms are 24, 36, 48 or 60 months with a minimum transaction of $5,000 • You can finance most out-of-pocket expenses, such as installation, freight, software and training • No down payments or advance payments are required • Monthly payments can be customized to meet your special business needs

We invite you to see for yourself. Contact us today for help preserving your cash flow with an equipment lease solution. Agents’ Express Leasing is a program of De Lage Landen Financial Services, Inc, benefitting InsurBanc clients. Lease financing is subject to lessee credit, vendor, and equipment approval by De Lage Landen. This is not a commitment to lend. Other terms and conditions may apply.

Member FDIC 11INR051


Please visit our web site at or contact one of our Relationship Managers at 800.957.0858.

Workers Comp Premiums Likely to Rise Big “I” offers guidance on NCCI experience rating change that would affect premiums. by Bill Wilson, Big “I” vice president of education and research. Agents may email Wilson with any questions.

limiting the contractor’s ability to obtain work. (See Addendum 3 for an explanation of why the mod should not be used for this purpose.) Sometime between now and the end of next year, agents are likely to begin hearing from customers about changes in their workers compensation premiums. Tens of thousands of employers can expect potentially significant increases in their workers compensation premiums based solely on a change the National Council on Compensation Insurance is making to its experience rating plan. The Big “I” is providing member agencies with a memorandum that includes some background information and a one-pager that member agents can give to customers. In addition, agents can look to the NCCI booklet, “The ABC’s of Experience Rating,” which explains the premise for the split point. According to Exhibit 5 in the NCCI Circular CIF-2011-14, this filing should cause the experience mods of 17.8% of risks to increase by 0.02 points or more, 13.5% of risks to increase by 0.05 points or more, and 7.0% of risks to increase by 0.10 points or more. Given that there are about 675,000 experience rated risks in total, this could result in an increase in the experience mod by 0.10 points or more for more than 47,000 employers. For an increase in mod of 0.05 or more, this number jumps to more than 91,000, and for increases of 0.02 or more, more than 120,000 employers could be affected. One of the hypothetical examples provided by NCCI shows a mod increase due to this change from 1.00 to 1.06. Another example shows an increase from 1.09 to 1.20. For example, assume these employers are contractors or other businesses that perform work under contract. What are the potential implications of this increased mod? One or more of the following could occur: • In order to cover the increased cost of workers compensation insurance, the contractor must increase its bids on various projects and, as a result, loses work. • Many government entities and larger corporations will not contract with a business whose workers compensation experience mod is greater than 1.00 to 1.10, thus Page 30

• Because of fewer jobs due to higher bids or restrictions on engaging entities with mods in excess of 1.xx, the contractor must lay off employees or curtail the subcontracting of work. • Because of reduced revenues, the business is no longer viable and must shut its doors or go bankrupt—again with the loss of jobs and tax revenues. • The business could decide to operate without insurance and might be inclined to issue fraudulent certificates of insurance to get work. The potential for uninsured injuries is obvious. • If the business was considering selling or merging with another entity, the impact of a higher mod might result in the lower valuation of the business, or the inability to find a buyer or merging company. • Aside from the effect of the increased mod itself, the workers compensation insurer might non-renew the account, resulting in the risk being moved into the assigned risk plan at a higher rate and an ARAP surcharge—not to mention possible loss of scheduled credits. • In addition to scheduled credits, at least three states (CT, IL, OR) of 13 states (AK, CT, FL, HI, IL, MD, MO, MT, NE, NM, OK, OR, VA) in NCCI’s Contracting Classification Premium Adjustment Program require participating employers to have a mod of 1.00 or less. The credits in this program can be substantial and could be lost by an employer whose mod exceeds 1.00 solely because of this rating change. NCCI says the impact of this change is “revenue neutral,” meaning that mods will increase and decrease in a manner that results in no overall additional premium effect for all insured entities. It is not clear whether this actuarial premise considers the potential premium impact of the migration of risks into assigned risk plans or nonstandard markets. Given the fragile and slowly recovering economy, re-population of the residual marketplace and the potential loss of jobs by an already imperiled construction industry, it is not something that will be looked on favorably in the current political climate.

Independent Insurance Agents of New Mexico - - * June 2012

One of the problems with this filing is that there is no individual employer cap on how much a mod may increase as a result of this change. The closest thing is a general maximum debit mod that is also being changed in this filing. According to NCCI, the change in the maximum debit mod formula “will increase the mod cap for small policies.” Given the lower credibility of the actual loss data of very small risks, one would think the maximum mod cap should be lower—not larger—for such risks. In addition, “revenue neutral” in the aggregate is a hard pill to swallow if a business is one of the tens of thousands of employers whose experience mod will increase by 0.10 or more, solely because of this change. Imagine the impact if this change is coupled with an unexpected bad loss or two, a manual rate increase, loss of carrier and movement to the assigned risk plan, application of an ARAP surcharge, and/or loss of scheduled credits (and/or addition of scheduled debits). It is difficult to explain to such employers why this change is fair because it’s “revenue neutral.” It’s rather like pricing a can of green beans at a grocery store at 50 cents, then charging a lot of people only 10 cents and a few people $10 and saying it’s fair because it’s “revenue neutral” to the store. The “fairness” of this rating plan is not likely to be understood by those most adversely affected, keeping in mind that the entire experience rating scheme is not based on immutable physical laws of the universe, but rather on probabilistic actuarial formulas and theories. And this is just the beginning. The potential impact above is based on an increase in the experience mod calculation split point from $5,000 to $10,000 in 2013. The filing increases the split point to $13,500 in 2014 and to an “indexed” $15,000 in 2015. Beginning in 2015 and going forward, the split point will change annually based on an inflationary index. Currently, NCCI is predicting that, because of this indexing, the actual 2015 split point will be closer to $17,500 than the publicized and filed “indexed $15,000”—more than triple the current split point. According to NCCI, the average workers compensation claim cost is $8,787, as of Jan. 1, 2011. To compound the problem for agents and their customers, the rating factors necessary to project what the new mod will be with certainty will not be available until late summer for a few states and possibly September or October for most other states. Employers will likely have completed their budgets long before they are aware of what their workers compensation premium will be. Until that rating information is filed and approved, NCCI will be making preliminary mods available based on actual loss data, but using factors (for example, D-ratios) based on the current $5,000 split point. Employers can access their experience rating worksheets at least two months prior to their rating effective date at by entering their Risk ID and a PIN number supplied by NCCI.

Prior to publication of mods based on the new $10,000 split point, NCCI says that employers can ballpark their new mod by recalculating the mod using $10,000 instead of $5,000 as a split point and increasing the D-ratios on the worksheet by 50%. Use of an automated tool like Zywave’s ModMaster® software should simplify this process. In a Casualty Actuarial Society presentation, NCCI said, “If an employer has no losses, or no losses greater than $5K, [this filing] will reduce their mod…If an employer has a relatively large [number of] losses approaching or exceeding $10K, [this filing] will increase their mod.” To determine the effective date of this filing for your state, refer to Addendum 1. So, with this information, what can agents do? • First, communicate this change to customers. Members can use this one-pager (Addendum 2) to communicate this information to clients. • Second, if agents have insureds that have debit mods, they can provide a copy of their experience rating worksheets. If they are based on preliminary mods, agents can use the “ballpark” method outlined above to project the mod following the split point change. • Third, keep state and national Big “I” associations aware of any marketplace problems, including very large mod increases that are attributable to this change, inability to bid on projects due to a mod greater than 1.00 (and the increase due to this filing), and any potential political repercussions of influential business owners who might seek a regulatory or legislative remedy. If customers experience problems with contract bids that hinge on the experience mod, Addendum 3 can be provided to the contracting party. This document explains in detail why using the workers compensation experience mod to pre-qualify contractors or other employers for work is not an intended or valid use of this insurance rating factor. To learn more about workers compensation experience rating, the Big “I” offers a two-hour webinar that details everything agents would want to know about the current experience rating methodology. It also includes a comprehensive reference manual, dozens of real-life examples with explanations of how to identify and correct worksheet errors, and frequently-asked-questions documents with more than 100 questions and answers. To access the webinar and to learn more about it, go to

Independent Insurance Agents of New Mexico - - * June 2012 Page 25

page 31

June Sunday



Clickable Calendar Click on class title to register












Pre-licensing Class






















8 CE

83/A Principles of Agency Management



8 CE

17 24


#4 E&O Loss Control


Pre-licensing Class

14 8 CE


#5 Professional Development


New Mexico’s Job Bank Looking to fill a position within your agency? Trying to find a job but don’t know where to look? Whether you are looking for somewhere new to share your special skills or an employer looking for quality, professional employees, we are there to lend a helping hand. Click here to take advantage of IIANM’s Job Bank. Do you have an agency you’re trying to sell, or in the market to buy one? Check out our Classifieds!

Clean up your air with the right houseplants Clean air is essential to good health at home and in the workplace. One simple way to keep the air you breathe fresh and free of odors and chemicals is to keep a few houseplants around. They’ll clean the atmosphere and make your surroundings more pleasant and relaxing. Pick up some of these:

Oddsn Ends

June is known for the large number of marriages that occur over the course of the month. According to one etymology, June is named after Juno (Hera). Juno was the goddess of marriage and a married couple's household, so some consider it good luck to be married in this month. Events this month...

June 8 Albuquerque Comic Expo Comic book, pop culture & entertainment convention. Exhibitors, vendors, a gaming area, Artist Alley...

June 7-16 Savor Albuquerque 10 day festival celebrating Abq’s finest arts, culture, cuisine and culminates with the Centennial celebration.

June 10-16 Festival Flamenco Distinguished as the most important and longest standing flamenco event outside of Spain...

June 16 New Mexico Centennial Summerfest Explore the cultural history of NM’s statehood through a free day-long celebration of arts, dance, music, cuisine, science and the exciting atmosphere of Route 66 For more details and a complete event listing, visit:

In Iceland, folklore says that if you bathe naked in the morning dew on the morning of June 24, you are supposed to keep aging at bay for longer.

• English ivy. This climbing vine grows in hanging baskets and low planters, and it helps clear away formaldehyde. (Be aware that it requires regular misting, especially during the winter months.) • Peace lily. A flowering plant, the peace lily will eradicate toxins like acetone, benzene, and ammo¬nia from the air. Remember to wash the leaves every once in a while. • Rubber plant. This plant is hardy enough to survive cool temperatures and low light, making it ideal even if you’re not particularly good with plants. Like the English ivy, it acts to reduce formaldehyde in the air as long as it gets plenty of water. June is the month with the longest daylight hours of the year in the Northern Hemisphere and the shortest daylight hours of the year in the Southern Hemisphere. Don’t get caught without an updated business card An acquaintance who asks for your business card is paying you a professional compliment. Don’t blow the opportunity. Always have a card handy, and follow these tips: • Set a goal. You’ll be less likely to forget your cards if you have a plan for using them strategically. For instance, you might set a goal of giving out five to 10 cards every day. • Invest in a good design. Make sure your cards look professional and attractive so you’ll enjoy handing them out. This will also serve as a motivation to keep your cards with you. • Practice your presentation. How are you going to introduce yourself and offer your card? How are you going to make a positive impression? • Keep your cards neat. Buy a nice business card case instead of jamming cards into your pocket or wallet where they’ll get bent. • Keep business cards everywhere. Store them in your glove compartment, in your gym bag, in your desk drawer, in your coat pocket, and in your briefcase so you never have to admit, “I don’t have one with right now.”

Independent Insurance Agents of New Mexico - - * June 2012


page 33

Homeowners Catastrophe Insurance Trust

Your preferred homeowners clients deserve the broadest possible coverage for their homes and personal property. As an active member of IIANM, you have the original -- the very best such program available to you right now. The HCIT Difference in Conditions (DIC) policy supplements basic homeowners coverage by providing protection for catastrophic losses, including FLOOD and EARTHQUAKE.

Just contact:

Trustco, Inc. - HCIT Program Administrator

2063 East 3900 South Ste. 100, Salt Lake City, UT 84124 1-800-644-4334 / Fax: 801-278-9051

Bobbi Phillips / Eric Kingdon /

Ex IIAN clusiv e M Dis Membe cou nt! r Now that you’ve narrowed down your candidates... Get the most out of every interview and hire more people like your top performers. When it comes to employee hiring, our consultants can help you with everything from evaluating your most promising applicants to redesigning your current selection system. You will learn what qualities are needed for success with your company, how to determine if someone has them and how to hire right the first time. How Can a Personality Assessment Help Me Hire the Best? With the Caliper Profile, our consultants can provide you with a clear, accurate picture of an individual’s strengths, limitations, motivations and potential. Then, these results are compared to our unparalleled database of information about the qualities it takes to succeed in virtually every position, as well as the information you provide about your corporate culture, your management style and the responsibilities of the job. From here, our consultants can tell you if an individual is a natural fit for that position. This is what we call “job-matching.”

Calculate the cost of turnover

June La Voz 2012  
June La Voz 2012  

The Official Ezine for Independent Insurance Agents in New Mexico