Tennessee agent AUGUST/SEPTEMBER 2011
VOL. 53, NO. 4
IN THIS ISSUE PIA President Elaine Morton and Family Recapping the 2011 Convention & Trade Show Certificates of Insurance
OFFICERS Elaine Morton, CPIA President Morton Insurance Agency, Inc., Bartlett Ph: 901-382-4600 email: email@example.com Steve Peay President-elect Boyle Insurance, Memphis email: firstname.lastname@example.org Tina Hutsenpiller, CPIA Vice President Hutsenpiller Insurance Services, Mt. Juliet email: email@example.com Herbert Montgomery Secretary Clay & Land Insurance, Inc., Memphis email: firstname.lastname@example.org Donnie Hogan, CIC Treasurer Fred M. Smith & Son, Inc., Springfield email: email@example.com Glen Page, CIC, CPIA Immediate Past President Page, Chaffin & Riggins Insurance, Cordova email: firstname.lastname@example.org
N AT I O N A L D I R E C T O R June W. Taylor, CIC, CPIA, CPIW, DAE Wilkinson Insurance Agency, White House email: email@example.com
DIRECTORS Carl Butcher, CIC, CPA C. L. Butcher Agency, Knoxville email: firstname.lastname@example.org Andrea Bond Johnson, CPIA Golden Circle Insurance Agency, Brownsville email: email@example.com
Tennessee agent TA B L E O F C O N T E N T S August/September 2011 Vol. 53, No. 4
Articles 2011-12 Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . .9 Unlocking the Treasures Photos from PIA’s 76th convention and trade show. . . . . . . . . .11 Certificates, Binders, Evidence of Insurance Chris Burand discusses the differences and why each is important. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16 E&O Prevention Curt Pearsall discusses how acquisitions and broker of record letters can hold significant E&O exposure for agencies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18 Tech Bit Phishing anyone? Gregg Marshall discusses how to avoid these schemes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
John Keisling, CPIA, CISR Keisling Insurance Agency, Inc., Byrdstown email: firstname.lastname@example.org Joe Kerr, CIC, CPIA Kerr Insurance Services, LLC, Brentwood email: email@example.com Britt Linder, CIC Peterson Insurance Services, Inc., Bartlett email: firstname.lastname@example.org Bill Oglesby, II, CIC, CPIA Brown Insurance Group, Crossville email: email@example.com Barry Wilson, CIC Mid-South Insurance Office, Inc., Memphis email: firstname.lastname@example.org
Columns Welcome New Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 President’s Perspective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Vision for the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 PIA Calendar & Education . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
S TA F F Brennan J. Paris, CIC, CRM Executive Vice President email: email@example.com Pamela D. Cass, CPIA Convention, Education, Membership firstname.lastname@example.org Sandy Clive, CPIA E&O, Member Services email@example.com Lochiel Gaines Communications, Trade Show firstname.lastname@example.org
The Tennessee Agent (ISSN 1081-566X) is published bimonthly by the Professional Insurance Agents of Tennessee, Inc. Statement of fact or opinions expressed in any article are solely that of the author and does not imply opinions of the officers, directors or staff of PIA of Tennessee, Inc. The publishing of any article or advertisement does not imply endorsement by PIA of Tennessee, Inc. No material within this publication may be reproduced in whole or in part without the consent of the Editor.
Cover Photo: PIA President Elaine Morton is surrounded by her parents, Dean and Joy Morton, her sister, Lisa Wagner, and her nephews, Hayden and Harper Wagner. Editor: Lochiel Gaines, email@example.com Advertising inquiries should be made to the Editor, The Tennessee Agent, 504 Autumn Springs Court, A-2, Franklin, TN 37067. Telephone 615/771-1177 Fax 615/771-3456 Email – firstname.lastname@example.org Website – www.piatn.com
Welcome, New Members Active/Agency
Christi Humphrey Kathy Muse Broadway Insurance Knoxville Jessica Parrott Rains Agency, Inc. Jamestown
Bailey Special Risks, Inc. Janet Smith Sandy Hall, CIC Vickie Harmon, CMA Hendersonville www.bsrins.com
Burns & Wilcox, Ltd. Jim Epting, CIC Becky Cox Alpharetta, GA www.burnsandwilcox.com
Accident Fund Insurance Co. of America Jim Petty, CPCU, CIC Lansing, MI www.accidentfund.com
Consumers Insurance Dennis Putthoff, CSP, ARM Murfreesboro www.ciusa.com GMAC Insurance Doug McCracken Winston-Salem, NC www.gmacinsurance.com Kentucky National Insurance Co. Enoch Roberts Mike Buecker Jim Maden, CPIA Lexington, KY www.kynatins.com Keystone Insurers Group Colin Buzzard York, PA www.keystoneinsgrp.com Safeco Insurance Gregg Safford Olivia Crow Alauna Pearce, CIC www.safeco.com
THE TENNESSEE AGENT August/September 2011
President’s Perspective BY ELAINE MORTON, CPIA
s I write my first article for the Tennessee Agent, I find myself reminiscing over the past 40 plus years with PIA. My father, Dean Morton, started our agency in 1964 and began his involvement with PIA in the early 70’s; in 1989 he became PIA president. As many of you know, I grew up thinking everyone went to Gatlinburg, Tennessee for summer vacation…EVERY year! That’s because PIA held the convention in Gatlinburg…EVERY year. My sister, Lisa, and I had the stuffed black bears and cedar boxes to prove our yearly trek to the mountains and to the PIA conventions along with the stuffed goodie bags with all of the company pens, oven mitts, magnets, matches, note pads, recipes, pencil sharpeners, yard sticks, t-shirts and whatever else you could put a company logo on. Now when I see kids at our convention it brings those memories back in an instant. As I look at them, I wonder to myself, do you think they have any idea that they just may be president of this association one day? Of course, the answer is no, but it definitely is something I think about when I see the little munchkins running around with bags of goodies at the convention. PIA members have a very special connection—we are extended family. We celebrate each others’ accomplishments, we support during trying times, we learn and grow together, we laugh together and we even cry together— it’s what makes us who we are. It is an honor for me to serve as your PIA president for the next 12 months. I hope you are excited as I am. Our association is headed in new and positive directions that you will begin to see, if you already haven’t. In May we were fortunate to have Brennan Paris join our team as the new EVP and with him comes an abundance of energy and new ideas to move PIA forward. He hit the ground running and has not slowed down. He jumped in and helped with the final preparations for convention, along with bringing many new ideas
THE TENNESSEE AGENT August/September 2011
to the table immediately. We have a lot of new and exciting things before us, as you will read and hear about in the days and weeks to come. Already in the pipeline are: • regionalization with the PIA of Mississippi; • markets for our start-up agencies; • more markets for placing your agency’s E&O coverage; • a restructure of committees; • increased visibility of the PIA brand in the state; • a new recognition structure for our company partners; • having a “face” in the social media world; • a brand new PIA of Tennessee website. If you were at convention, you heard me say that “things are not always as they seem.” I will remind you that PIA needs much more from you than dues and a name on our membership roster. We need YOU to be involved, and YOU need to be involved in YOUR Association. As I mentioned above, I am restructuring our committees this year. There will be two standing committees—the Convention Committee and the Government and Industry Affairs Committee. Focus groups will be formed to address other topics and issues as needed, and as a PIA member you may be called upon to participate in one (or more!) of these groups. I think that focus groups will help us to pay closer attention to the different needs in different parts of the state. Being a West Tennessee agent, I know that our issues are not always the same as our members in the eastern part of the state. The benefit of this restructuring will help us meet the needs of our members. On a personal note, I want to thank Liz Maden for her many years of service to the PIA. For those of you that are not aware, Liz left our PIA family at the end of July. On this page, though, I want to tell Liz, “We wish you only the best that life has to give and thank you for all you have given us in your 22 years of service.” As PIA embarks in this new direction, I sincerely hope that you as agent members as well as our company partners will join us on this exciting ride. My two new best friends are about to be Geritol and Red Bull! Buckle up because here we go…don’t be left behind! •
A Vision for the Future B Y B R E N N A N J . PA R I S , C I C , C R M EXECUTIVE VICE PRESIDENT
ince this is my first article for our magazine, I thought it would be a good chance for me to update you on our plans for making a better and more visible PIA of Tennessee. Our focus is and will always be to continually provide value added benefits for your loyalty and support of the PIA. Everything that we do here will be driven by that concept and in doing that we will create a much more vibrant association and assist in making your agencies and companies even more successful. I want it to be clearly visible why anyone associated with the insurance industry should be a part of our association. From the continuing education opportunities to the accessibility of more markets to providing a collective voice for agencies of all sizes to be heard on the hill, our association will excel in bringing great value for your support. One of our primary goals is to expand our membership base so that our convention and other events throughout the year create a larger audience for our company partners. With a larger and more active membership base, the PIA will have a much stronger presence throughout the state. I plan on establishing the Young Insurance Professionals Society here in Tennessee to develop young agents and producers to step in as leaders in your agency or company as well as in your communities. Along with the Young Insurance Professionals, the PIA of Tennessee will participate with collegiate insurance programs throughout Tennessee. I see this as an ideal way to put our agency members in touch with future agents and CSRs that can step in and make an impact in your agency and preserve the future of it. I have already begun working with Middle Tennessee State University and Dr. Ken Hollman’s program to create a bridge to his graduates as they start their careers in the insurance industry. Being a former company person, I’ve heard many times how agency principals are in need of properly educated personnel, both producers and CSRs, and
what better place to find these future insurance professionals than right out of a collegiate insurance program with the necessary education to step right in and make a difference in your office. We also want to constantly bring our members cutting edge services and products, and we are going to start by redesigning our website to become a useful tool for your agency or company. We have begun developing the redesign of our site with one of the main objectives being to provide an impressive first impression of the PIA of Tennessee. The internet is a powerful tool for research and data collection, and we must make sure that when the PIA of Tennessee is “googled” the viewer sees a useful and visually impressive site. Furthermore, we must utilize our site to be a marketing tool for the PIA of Tennessee, and to do that we must create a consistent flow of traffic. The new website will be a resource for our agency members to easily research industry news, as well as give each of you the ability to register online for CE classes and any other PIA functions throughout the year, including our annual convention. Our desire is to create an exciting website that has tools and resources to assist your agencies on a routine basis. By creating much more traffic to our site and making it a resource for our members, www.piatn.com will also be used as a marketing and advertising venue for our company partners. This will provide a great arena for these companies to be recognized on a site that has a captive audience with a desire to support PIA Partners. Along with the new website, we will have a mobile site created for easy access to key items right from your smartphone. It seems we all move at the speed of light these days, and we want to make sure you have a convenient option to access the PIA wherever you may be in a clear and condensed format. We will begin the redesign in a matter weeks and should go live in the 4th quarter of this year, so stay tuned for updates on the roll out date and demo sessions. Another item we have spent a lot of time working on over the last two months is a partnership with the PIA of Mississippi. I am very excited to inform you that we are in the final stages of getting this partnership completed. This is going to be a great chance for us to grow the PIA across a large
THE TENNESSEE AGENT August/September 2011
geographic region of the south. The staff and I will manage and essentially run every aspect of the PIA in Mississippi, from selling E&O and other products, providing marketing and promotional material to all PIA members and companies, as well as handling the majority of all administrative duties needed for in Mississippi. Increasing membership growth will be a major focus in that state, as well as including them in our convention providing a much larger audience that I know will be well received by our company partners. This is a great opportunity for us to create a more visible brand throughout the south and increase participation in the PIA. Staying with our theme of bringing value to the table, we are partnering with IMG, which is the marketing firm
THE TENNESSEE AGENT August/September 2011
for Vanderbilt University Athletics and the University of Tennessee Athletics as well as the majority of the SEC Conference, to bring more marketing and advertising opportunities for our company partners and also provide year round networking events for companies and agent members to socialize and build even better relationships. No longer will our annual convention be the sole event we hold to bring agents and companies together, but each season of the year, we will have an event for all of you to participate in at an SEC sporting event. We are excited about this opportunity to partner up with IMG in yet another demonstration of the PIAâ€™s dedication to building a stronger brand with a focus of bringing significant value to our supporters throughout the entire year.
So as you can see itâ€™s been a busy summer as we work to revitalize this association with better brand name recognition across Tennessee and even into Mississippi. We have jumped out to a fast start in these first few months, and in that short time frame we have put in motion several new and exciting items that will make us a better association. We will continue to bring you services that will make your agency more successful and we will create a stronger platform for our company partners to grow their volume and make Tennessee, and soon to be Mississippi, two of their most successful states. My hope is that it is evident the excitement I have for the future of this association, and I look forward to working with each of you to create a better PIA. â€˘
Meet 2011-12 Board of Directors
Front row, left to right: Herbert Montgomery, Glen Page, Elaine Morton, Steve Peay, Donnie Hogan and Tina Hutsenpiller. Back row, left to right: Bill Oglesby, Barry Wilson, John Keisling, Carl Butcher and June Taylor.
laine Morton, CPIA, is PIA of Tennessee’s 75th President. She was installed into the office at the 2011 Convention and Trade Show and is the second female president in the history of the association. The installation ceremony was conducted by June Taylor, national director and the first female to serve as PIA of Tennessee President. Elaine’s association with PIA goes back to 1971 when her father Dean became a PIA member. As she reminisces in her message in the President’s Perspective, she and her sister Lisa began attending PIA conventions as youngsters. Back then, the convention was held every year in Gatlinburg, so the Morton family made the annual family trek to the Smoky Mountains for the convention/family vacation. Elaine is vice president of Morton Insurance Agency in Bartlett. She was first elected to PIA of Tennessee’s Board of Directors in 1999. She is active in the PIA Memphis chapter and served as president in 2002. Elaine resides in Bartlett, and when she isn’t working she enjoys traveling. She also is an avid photographer and a devoted aunt to her niece and two nephews. Steve Peay of Memphis was elected president-elect. Steve is senior vice president of Boyle Insurance Agency, Inc. in Memphis. Tina Hutsenpiller, CPIA, was elected vice president. Tina is owner of Hutsenpiller Insurance Services, LLC, in Mt. Juliet.
Herbert Montgomery was elected secretary. Herbert is a producer with Clay and Land Insurance in Memphis. Donnie Hogan, CIC, was re-elected treasurer. He is the owner of Fred M. Son & Son, Inc. in Springfield. Immediate past president is Glen Page, CIC, CPIA, of Cordova. Glen is a partner in Page, Chaffin and Riggins. Directors Two new directors were elected to the board and will serve a three-year term. They are Andrea Bond Johnson, CPIA, and John Keisling, CPIA, CISR. Mrs. Johnson is a partner in Golden Circle Insurance Agency, Inc. in Brownsville. Mr. Keisling is principal of Keisling Insurance Agency in Byrdstown. Continuing service as directors are: Carl Butcher, CIC, CPA, C.L. Butcher Agency, Knoxville; Joe Kerr, CIC, CPIA, Kerr Insurance Services, LLC, Brentwood; Britt Linder, CIC, Peterson Insurance Services, Bartlett; Bill Oglesby, CIC, CPIA, Brown Insurance Group, Crossville; and Barry Wilson, CIC, Mid-South Insurance Office, Memphis. June W. Taylor, CIC, CPIA, CPIW, DAE, Wilkinson Insurance Agency, White House, continues her term on the PIA National Board of Directors as Tennessee’s representative. • THE TENNESSEE AGENT August/September 2011
Agent of the Year Brad Butler
he 2011 Agent of the Year award was presented to Brad Butler, CIC, CPIA, CRIS, vice president of The Butler Company in Nashville. Brad has been active in PIA for 11 years. He served as president of the association in 2008 and was first elected to the board in 2003. He also has served as a TINSPAC trustee and has chaired the PIA Advantage Services Corporation Board. Brad has led the way in The Butler Company’s use of social media. He writes a blog and utilizes Twitter and YouTube to post insurance-related information and news. Outside of the agency, he is a licensed private investigator and a licensed armed security officer. He holds a 3rd degree black belt in karate and is a master Mason. Brad and his wife, Stefanie, live in Mt. Juliet with their two children.
Company Representative of the Year Dyson Massengill he 2011 Company Representative of the Year award was presented to Dyson Massengill, CPIA, Grange Insurance Senior Territory Manager for Middle and West Tennessee. Dyson joined Grange in 1973 and has held several positions. In his current position, he is responsible for training Grange agents in all three of the company’s business units – personal lines, commercial lines and life. Over the past five years, he has appointed 18 agencies to represent Grange. During agency visits, he always provides at least one new sales idea that the agency can use. Dyson’s accomplishments have not gone unrecognized. In 2006, he was PIA of Tennessee’s Company Representative of the Year, and he went on to win the award at the National level that same year. The Ohio PIA also has recognized him as the Field Representative of the Year, in 1985 and 1992. Dyson and his wife, Bonny, reside in Murfreesboro.
10 THE TENNESSEE AGENT August/September 2011
Certificates of Insurance, Binders and Evidences of Insurance—what’s the difference? BY CHRIS BURAND
visit a lot of agencies and interview hundreds of customer service representatives, account managers, account executives and processors every year. I find that 50 percent or more today have a serious lack of basic knowledge about certificates of insurance, binders and evidences of insurance. The lack of knowledge is more obvious at the staff level because these are the people who process the forms. However, a huge percentage of producers also don’t know the difference, which contributes greatly to the problem. These producers tell clients certain things can be done because they don’t know enough, and then they tell the CSR to do it anyway when she or he advises it can’t be done. This greatly increases errors and omissions (E&O) exposure. It also detracts greatly from the agency’s professionalism.
Chris Burand is president of Burand & Associates, LLC, an insurance agency consulting firm. Readers may contact Chris at (719) 485-3868 or by e-mail at email@example.com. 16 THE TENNESSEE AGENT August/September 2011
Binders I often ask agency personnel the question, “What is the basic difference between a binder and a certificate of insurance?” Far less than half seem to know that the key difference is a binder is a contract of insurance and a certificate of insurance is a form of proof of insurance. They do not understand that when they “bind” coverage, they are creating an insurance contract, whereas when they issue a certificate of insurance, they are simply warranting certain coverages exist at a given moment. This is why many agency personnel use binders and certificates and evidences of insurance almost interchangeably, which is a huge mistake. Because binders are contracts, the people writing the contracts absolutely must know whether they have the authority to do so. This is why binding guidelines are provided to every agency that has binding authority with a particular carrier. Some carriers have made it more difficult to find these
guidelines in recent years, but the guidelines still exist. I often find that less than 25 percent of an agency’s staff has a copy of the agency’s binding authority. In some cases, agency management does not want the staff to know and simply allows them to write binders anyway. This is just plain stupid. If staff and producers have agency management’s authority to write binders, and assuming management wants the job done correctly, they must know the agency’s binding authority! (“Guidelines” is a misnomer as it is really a list of the agency’s contractual binding authority by line.) Some agency managers do not want staff to write binders, but they fail to communicate this to the staff. At the same time, so few staff really understand binders, half the time they are binding risks and they do not even know that’s what they are doing. None of these situations are in the best interest of the agency. Here are a few key points: If the agency says it will or is binding coverage, it has issued a binder. Whether the agency has authority, whether an actual binder is created (which is an entirely different issue), and whether a binder is even necessary does not matter once an agency has stated “coverage is bound.” Just because a carrier states it will write a risk does not automatically mean the company is binding the risk. Writing and binding are not necessarily the same thing. An agency never, ever has binding authority with excess and surplus (E&S) markets. Thus, when an E&S broker states it will bind a risk, the agency should never tell the client that the agency is binding the risk because it is not—the broker is binding the risk. The semantics are important. Furthermore, an agency should not tell the client the
broker is binding the risk based on a conversation. The agency should get what the E&S broker promised in writing. Simply because a client demands a binder does not mean the agency has to give the client a binder unless the client really does need a temporary contract of insurance. If the client really just needs proof of insurance, then the agency should issue the proper proof—not a binder. Very few clients possess insurance licenses, so rarely do they really know what form they need. The agency is the entity with the license and should do what is right. Many times binders are issued because the insurance policy has not been delivered. I am amazed at how Detroit can manufacture an automobile faster than some insurance companies can print a boilerplate insurance policy. But be that as it is, agencies should rarely write a temporary contract on top of an insurance policy that already exists. Just because the paper policy has not arrived, does not necessarily mean coverage does not exist.
insurance contract, it is not a binder, and it is not supposed to be used to increase coverage. Good Practices Because binders are contracts, there is more E&O exposure involved with binders than with certificates of insurance, assuming certificates are processed correctly. Given the statistics on the rising number of E&O claims related to certificates, it is clear that many certificates are not processed correctly. The need for binders today is also limited versus 20 years ago and many agencies are doing their best to not issue binders. Moreover, when certificates are processed correctly and binders are not issued except in rare situations, agencies spend less time and
money servicing accounts, which is important today. Most important though, knowledge of the differences among these forms, of which I’ve only touched lightly, is critical. Everyone in every agency needs to have a strong, basic knowledge of these differences. NOTE: None of the materials in this article should be construed as offering legal advice, and the specific advice of legal counsel is recommended before acting on any matter discussed in this article. Regulated individuals/entities should also ensure that they comply with all applicable laws, rules, and regulations. March 2011
Evidences of Insurance In personal lines, most insureds, banks and real estate agents need evidence of insurance, not binders. The policy is in effect but has not arrived. So why not provide evidence of insurance rather than a binder? Cer tificates of Insurance First, let’s call this area what it is—a mess. We have a mishmash of laws or lack of laws and regulations among the states such that what works in one state does not always have relevance in another state. This has become incredibly apparent with the new ACORD certificate form. Second, when an agency is trying to go the extra mile for its insureds by providing certificates that fit their needs, they should not overstep their authority. Agents do not have authority to change language, unless maybe a carrier gives the agency explicit written authority to do so. If an agency changes the language, the agency could be violating copyright law and changing the insurance company’s filing with the insurance department. Everyone knows what happens when there is a claim involving an agency changing its insurance company’s filing, right? The agency loses the E&O claim! Third, a certificate is proof of certain coverage at a certain time. It is not an THE TENNESSEE AGENT 17 August/September 2011
Acquisitions, broker of record letters can hold significant exposure B Y C U R T I S M . P E A R S A L L , C P C U , A I A F, C P I A S P E C I A L C O N S U LTA N T T O T H E U T I C A N AT I O N A L E & O P R O G R A M
ou just took over an account by broker of record and are probably feeling pretty good. You might even be thinking, â€œThat was pretty easy.â€? Before getting too giddy and complacent, though, it is important to realize your work is actually just beginning because acquiring an account by broker of record, if not handled correctly, has
Y Curt Pearsall is president of Pearsall Associates Inc. & special consultant to the Utica National Errors & Omissions Program.
18 THE TENNESSEE AGENT August/September 2011
some significant potential for an E&O claim. One of the key issues of acquiring an agency via a book transfer or acquiring an account via a broker of record is the unknown quality of the book/account. If the prior agent simply renewed the account as is and did not update it (which might have contributed to your
securing the account), you may find the insurance coverage for your new customer is significantly outdated. Another potential issue can be the type of account and/or specific class of business if it is one that your agency/ producer is not familiar with. Are you confident you know the exposures this type of risk faces? In addition, based on the quality of the job the prior agent did, there may be coverages available today that have not been discussed with your new customer but need to be—for exposures such as cyber liability or employment practices liability. The worst and the best Bottom line, you must be aware that duplicating the prior agent’s mistakes does not isolate your agency from the possibility of an E&O claim should a customer have a claim not completely covered by their insurance policies. Do not fall into the trap of just renewing “as is;” this is one of the worst things you could do. It is best to treat these new customers as if they were brand new prospects. Whether an agency acquisition, book transfer, or securing a single account through a broker of record, prove your value by conducting a comprehensive review of each and every file. This is highly recommended for all customers—especially the commercial accounts—and includes reviewing their current program, identifying their exposures and providing them with coverage options to consider. While this may seem like a somewhat daunting task, there are tools available to help you. One of the more effective and efficient means is using exposure analysis checklists. This software can be integrated into your agency management system. Two of the more popular and powerful checklists are Producer Plus through Vertafore and Producer Online through Rough Notes. These exposure analysis checklists have many benefits for you and your client. This includes: • Providing your staff with detailed information on over 600 different classes of business. • Helping your producers/account executives become “experts” on the class
and its exposures. • Providing the key questions your prospects/customers need to be asked in a systematic and logical approach. • More comprehensive and accurate submissions to your carriers. • Providing a thorough and professional-looking proposal for your prospects, if the particular checklist includes that capability. • A prompting to secure the customer’s signature as an acknowledgement if the customer rejects/declines coverage you proposed. This sign-off could be crucial if an E&O claim were to arise in the future. • An increased likelihood of selling more insurance and making solid strides in protecting your customers for claims that may arise.
is important to bring to your customer’s attention the differences between their current coverage and the options you are proposing, making sure to document all discussions. An additional exposure essential to resolve when acquiring accounts via broker of record is when your agency technically becomes the official agent. Is the account switching all its business or just some of it? Is this effective at the next renewal or mid-term? What are the wishes of the parties? What is the position of your carriers? Resolve these matters with your insured and carriers to ensure any coverage modifications or claims issues are handled properly. This issue has definitely resulted in the mishandling of certain issues—and thus E&O claims—because of the confusion.
Questions to consider If the account is a personal lines client as opposed to a commercial one, meeting with them could be a bit more challenging. However, it is still recommended you treat the account as if it were brand new. The exposure analysis checklists contain key questions to ask these accounts to ensure that you are identifying the various exposures. It
Proper attention Whether you are acquiring an agency or an account, ensure that proper attention is given to every file. Working with your accounts to identify their exposures and discussing coverage options are key. Do not “renew as is!” You could be duplicating the prior agent’s mistakes, and this does not isolate your agency from the possibility of an E&O claim. •
THE TENNESSEE AGENT 19 August/September 2011
Tech Bit Phishing Anyone? BY GREGG MARSHALL
o, it’s not time to enroll in your local bass fishing tournament. This article is about a different kind of fishing, spelled phishing. When spelled phishing, it’s referring to when someone tries to get sensitive information from someone else by posing as someone they’re not. As P.T. Barnum is credited with saying, “There’s a sucker born every minute,” and this is what people or groups doing phishing are hoping unsuspecting recipients will be. You don’t want to be one of them. Most phishing has taken place through email, but more and more attempts are being made via social media, such as Facebook. Facebook phishing attempts often appear as wall posts of a friend, or from a friend, that mimic those automatic postings
20 THE TENNESSEE AGENT August/September 2011
many websites now include as part of a sign up process. When you click on the link supplied, often a malicious app is installed into your Facebook profile. Alternatively you are taken to what looks like a legitimate website and asked to complete a form that includes the sensitive information the person doing the phishing is after. Very often a phishing email will appear to be from some bank or other institution you might have an account with. Very recent phishing emails have even appeared to be from the IRS, which pretty much never is willing to send any information via email. Visually, a phishing email will usually look like it’s from the real source. Getting accurate visual elements is easy since they can be copied from legiti-
mate emails or the company’s website. Sometimes, if the phishing email is not sophisticated, you might notice slight grammar or spelling mistakes. Other times, the phishing is sophisticated and the message you get looks like it from the legitimate source in every way. That makes it really tough to know if a given email is legitimate or not. Also, the link you click will actually appear to be legitimate, taking you to a site that also looks just like the one you might be expecting. Often the only clue is the URL (web address) isn’t “quite” right. For instance, the web address you are expecting is www.example.com and the actual link is to a web address like www.example.co or www.example.com.ag. Another common ruse is to show the legitimate web address like www.example.com, but the hyperlink actually is a different web address, taking advantage of HTML’s ability to have any text link to another place like this link (which will take you to www.example.com). And, the email will appear to come from the legitimate source, taking advantage of the SMTP “flaw” of being able to spoof, or forge, email headers, which include the from address. Often this forging is so sophisticated that you can only see the real sender’s identification if you can see the entire email header records, which most email programs hide. So how to you avoid getting hooked? The best defense is a healthy dose of paranoia, especially when it comes to emails and Facebook posts. After clicking on a link that was supposed to have shown me additional Facebook analytics that installed an app I still can’t uninstall, I now pretty much ignore any wall posts on my profile, or any friends’ profile, that might be interesting. If a post sounds really interesting, I’ll use Google to find the legitimate URL for what’s being offered. Similarly, I never, ever click on any link in an email that might be from any institution that I might have an account with. I’ll manually type the web address into my web browser. More and more legitimate emails from financial institutions, etc. don’t include a link, but direct you to manually go to their website using the main web address.
Also, beware of emails purporting to be from a company you don’t do business with. What prompted this article was an email from a domain registrar about my domain renewal. The problem was all my domains are registered with one company, and it wasn’t the company that sent the email in question. Had I clicked on the link and “renewed” my domain, I would have been actually starting a transfer to the new company and you can bet it wouldn’t have been at the great rate I get on domain registrations. And I might have end up finding I don’t even own my domain any more, if I had authorized the transfer I might not have noticed the domain owner also was changing. If you accidently follow a link you shouldn’t have, and gave some information you shouldn’t have, the first thing you should do is log on to the legitimate website and change your password. While you are there, check to see if the phishing has already accessed your account. Of course, if they have changed your password before you got there, get
on the phone right away! Even if all you can accomplish right away is to get your account locked while they sort it out, at least you are minimizing future damage. Go to any other websites where you might have used the same password and change the password for all those sites. Most people use the same password over and over, and these identity thieves know that. In fact, the account that was compromised might not be their real target. I know better and have to admit that I have a more limited selection of passwords I use. I have been a much better than I have been in the past, but I still have a lot of accounts with shared passwords. The bottom line is the bad guys are trying harder, and far more often, to steal valuable information from you. You have to be ever vigilant. • Gregg Marshall, CPMR, CSP, is a speaker, author and consultant. He can be reached by e-mail at firstname.lastname@example.org, or visit his website at http://www.repconnection.com.
THE TENNESSEE AGENT 21 August/September 2011
Calendar of Events PIA LOCAL CHAPTER MEETINGS • East Tennessee Contact Ron Welch, 865/689-6254 • Memphis Second Tuesday of every month in Memphis Contact Steve Peay, 901/766-0200 • Chattanooga Fourth Tuesday of every month in Chattanooga Contact Nancy Brannan, 423/892-6427
Classroom Education CPIA INSURANCE SUCCESS SEMINARS • CPIA 3 November 3, 2011 in Nashville 8 hours C.E.
Online Education P R E - L I C E N S I N G E D U C AT I O N • Online Study and Traditional Self-Study Property & Casualty, Life & Health, Series 6 & 63 TRAINING FOR NEW EMPLOYEES For employees with less than 12 months experience • Agency Orientation for New Staff • Delivering Quality Service to the Customer and the Employer • Personal Lines Coverage Basics 12 hours C.E. credit • Commercial Lines Coverage Basics 12 hours C.E. credit C O N T I N U I N G E D U C AT I O N
C.E. approved courses in all 50 states and D.C., the American College, the CPCU Society, the CFP Bord. Available 24/7. www.piatn.com/education/ceu.com • Learn.net (PIA National) Tennessee-specific courses; 12 hours for most. Ethics, flood, E&O, healthcare reform, long term care partnership, and more. www.piatn.com/education/learn.net D E S I G N AT I O N P R O G R A M S • Personal Lines Coverage Specialist (PLCS) Online self-study; C.E. approved • Commercial Lines Coverage Specialist (CLCS) Online self-study; C.E. approved www.piatn.com/education/designationprograms
• CEU.com (The American Institute for CPCU) 2 0 1 1 E D U C AT I O N P A R T N E R S Accident Fund of America • Arlington-Roe • Bolton & Co. • Grange Insurance PIA Advantage Services Corp. • ServPro • U.S. Risk Insurance Group • Utica National Insurance Group 22 THE TENNESSEE AGENT August/September 2011
PIA Boosters PIA thanks our Agent and Booster advertisers! For advertising information, fax the Tennessee Agent at 615/771-3456.
v P.O. Box 270 Columbia, Tennessee 38402 800/346-6071 800/296-0419 fax Tom Wilson, Marketing
3200 West End Ave. Nashville, Tennessee 37203 888/432-9488 ext. 3371 423/591-9337 fax Karen Tidwell, CPIA
Farmers Mutual of Tennessee P.O. Box 3428 Knoxville, Tennessee 37927 865/523-5153 Gordo Watson, CIC
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Toll Free: (877) 377-1212 E-mail: Info@XChange Insurance.com Website: http://www.XChangeInsurance.com THE TENNESSEE AGENT 23 August/September 2011
Tennessee agent 504 Autumn Springs Court, A-2 Franklin, Tennessee 37067
Published on Sep 8, 2011