Top Accomplishments in 2009
Health care reform. Commission disclosure. Certificates of insurance. 2009 wasn’t for the faint of heart. To look on the bright side (yes, grab those rose-tinted glasses), the challenges gave IA&B plenty of ways to prove its value to members. Read on for IA&B’s top accomplishments of the year.
February: Addressed certificates of insurance
Take this scenario: Independent contractor asks rule-abiding producer to alter certificate of insurance per general contractor’s request. Rule-abiding producer denies request. Contractor finds unscrupulous producer who will modify the certificate. Rule-abiding producer loses the account to unscrupulous producer. Sound familiar?
According to participants in IA&B’s Member Agent Panels, requests to modify certificate language are commonplace, as is losing business to producers who are willing to make the change.
In November 2008, IA&B successfully prompted the Maryland Insurance Administration to issue a bulletin addressing the alteration of certificates and then moved on to the Pennsylvania Insurance Department. In February 2009, Pennsylvania Commissioner Joel Ario released a notice confirming that the alteration of certificates is improper and subject to enforcement.
Now Maryland and Pennsylvania producers can provide proof to their demanding insureds of why they cannot modify certificates. And that helps to level the playing field. Take that, unscrupulous producer!
February: Launched Political Action Center
“Insurance agents rank at the top as the most influential lobbyists in any district and are considered a reliable source of information,” Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, once said.
Recipe for change: Take “most influential lobbyists.” Add IA&B’s new Web-based Political Action Center. Shake up with a controversial issue, such as health care reform. And KABOOM!
IA&B launched its Political Action Center in February. An extension of iabgroup.com, the site allows members to stay on top of state and federal issues by reading bill summaries and status reports, as well as IA&B positions. Plus it simplifies contact with legislators by storing contact information, talking points and form letters.
Thanks to the health care reform shouting match – er, um … “debate” – of 2009, plenty of IA&B members gave the Political Action Center a spin.
April: Released fiduciary resource
Say that Option A provides FDIC protection up to $250,000 for an agency’s single fiduciary account. But Option B provides it up to $250,000 per policyholder and per carrier on whose behalf the agency is holding funds. Talk about a no-brainer.
Amid the faltering economy of late 2008 and early 2009, IA&B released a three-part tool to help members understand their fiduciary duties under the law, how to stay compliant and which accounts maximize FDIC protection.
Part I tackles the state and federal requirements that affect producers who hold monies in a fiduciary capacity and the security of those fiduciary accounts. Part II addresses commingling – what is permissible and what is not, what conditions must be met and what to look out for. And Part III reveals tips on how to choose the aforementioned and highly coveted Option B for FDIC protection.
April: Added to Member Agent Panels
IA&B added a new destination on the MAP in 2009: Dover, Del.
MAPs, or Member Agent Panels, are meetings where IA&B leadership and staff gauge members’ needs and discuss ways to support them. They were the impetus for the development of IA&B’s HR Solution© and Emergency and Business Continuity Planning Manual.
Members volunteer to serve two-year terms that involve meetings each spring and fall in towns across Maryland and Pennsylvania … and, as of April, in Delaware, too. During all 13 lucky 2009 MAPs, members shared their economic, technological and carrier-related challenges and explained how IA&B could help.
May: Restored Maryland condo law
Coverage upheaval! An April 2008 Maryland Court of Appeals decision reversed over 25 years of insurance practice by not requiring a condo association’s master policy to cover damage to an individual unit.
The result (along with much head scratching)? Confused producers. Confused insurers. Confused condo association managers. Confused – not to mention underinsured – condo unit owners.
IA&B spearheaded a coalition and worked steadily for a fix throughout 2008 and into 2009. And the hard work paid off when Gov. O’Malley signed HB 287 and SB 201 into law on May 19. The legislation restored clarity – and common insurance practice.
June: Introduced Pennsylvania HB 1780
It’s a bird. It’s a plane. No, it’s … HB 1780 to the rescue!
Pennsylvania members shared with IA&B that several business entities lacked workers’ compensation (WC) coverage. So the association partnered with legislators to draft HB 1780 – legislation that would allow insurers, including the State Workers’ Insurance Fund, to provide WC coverage for members of an LLC, partners of a partnership and sole proprietors.
The bill was introduced in the House in late June, and finally, after marathon (an understatement if there ever was one) budget debates, will be the subject of a House Insurance Committee fall public hearing. IA&B will be there to lobby for this top legislative priority.
July: Unveiled Emergency and Business Continuity Planning Manual
A lot of good an emergency plan does when it goes up in smoke with the agency.
That’s why IA&B’s Emergency and Business Continuity Planning Manual is housed online. No matter what happens to the folder or the flash drive that stores the plan, an IA&B member can access a backup copy any where, any time via the Internet.
Launched in July, the resource includes a Web-based input module and a personalized output (read: plan). The end result outlines the various scenarios that can disrupt an agency’s operation and then breaks down implementation of the plan into timeframes – the first 12-24 hours, day one through end of the emergency, and termination of the plan and restoration of normal operations.
According to the Institute for Business & Home Safety, a quarter of the small- and medium-sized businesses that suffer an operation-disrupting crisis never reopen. IA&B’s Emergency and Business Continuity Planning Manual improves members’ odds.
July: Advocated for health agents
As the temperatures soared in the summer of ’09, so did emotions. Health care reform was the hot topic.
IA&B elevated the issue by including nearly weekly Agent Headlines updates, unveiling an online Health Care Reform Action Center and prompting members to lobby their legislators.
In mid-July, association staff escorted several Delaware and Pennsylvania members to Washington, D.C. to lobby their legislators in person. They joined 1,000 other producers in an event that included over 400 meetings – including sessions between DAIAB and IA&B and Sens. Carper, Casey, Kaufman and Specter.
Throughout the summer and into the fall, IA&B’s battle cry remained constant: Maintain agents’ role in the delivery of health insurance!
September: Offered Compliance Pitfalls seminar
It pays to have friends in high places – like the Pennsylvania Insurance Department. Especially when discussing fear-in-the-pit-of-the-stomach topics, like privacy laws, rebates and surplus lines, to name a few.
IA&B and the agency joined forces in the fall to host four seminars across the state. The members-only workshops highlighted the 10 most common compliance violations. The Department’s Counsel and Director of Bureau Licensing and Enforcement shared real-world tales, and IA&B staff followed up with tips to remain compliant.
October: Addressed commission disclosure
All eyes were on the New York commission-disclosure brouhaha at the beginning of the year. But by May, the focus traveled south to Maryland, where Insurance Commissioner Ralph Tyler expressed his interest in mandating disclosures during a trade-publication interview. Then in June, Delaware Insurance Commissioner Karen Weldin Stewart shared that her team was researching the issue.
For Maryland, IA&B formed a coalition of like-minded groups to advocate for producers’ interests. The alliance met with Commissioner Tyler in October in hopes of learning his position and plans. The IA&B of Maryland Public Affairs Committee and then met in November to discuss strategy for the impending battle.
The DAIAB Public Affairs Committee hosted Delaware Department of Insurance representatives at an October event. There, DAIAB shared members’ interest in maintaining the status quo and received favorable feedback.
October: Held inaugural Executive Management Conference
Members spoke. IA&B delivered.
Word on the street (OK, and via more trusted sources, like Member Agent Panels and member surveys) was that agency principals were in need of management assistance. So in October IA&B held its first annual Executive Management Conference.
IA&B hired MarshBerry to craft a program unique to members’ needs for the first conference – a two-day event dedicated to perpetuation planning. Member agency principals learned how to establish financial benchmarks, attract young talent and cultivate leadership among employees, all with the end goal of a successful succession.
November: Represented member in agency termination case
It was déjà vu all over again when IA&B became involved in an agency termination case before the Pennsylvania Insurance Department.
After all, in January 2008, the association represented another member agency in a termination case against Everett Cash Mutual (ECM). In that case, the company sought to remove policies from a terminated agent long before the law prescribes.
In the 2009 situation, ECM reduced a member agency’s commission to 0 percent without abiding by ACT 143 protections. IA&B took on the case, arguing that the elimination of all commission is the same as a termination (called “de facto termination”) against the agent and that the company owned the agency ACT 143 protections, including a rehabilitation period.
As this issue of Primary Agent went to print, IA&B was preparing oral argument for a Nov. 3 hearing.
