Industry News

Did you see the 2016 PIA National Guide to Member Benefits inserted into the January issue of PIA Connection? Below we’ve listed just a few of the PIA programs highlighted in the most recent Guide to Member Benefits.

DocIT for Agents: Save time and money by placing drivers with the right auto insurance carrier earlier in the quoting process using DocIT for Agents’ online database of driver violation data.

PIA Agency Marketing Guide: Our hands-on marketing tips from industry experts, published annually.

Floodbroker.com: A unique tool for the flood insurance industry that provides National Flood Insurance Program (NFIP) information to PIA members’ clients and prospects to quickly and easily get a flood insurance quote.

Rough Notes Producer Online: Helps identify risk exposures and provides detailed coverage analysis. PIA members get a special rate.

Hartford Flood Insurance: Easy enrollment, dedicated local sales directors and book transfer/rollover team, training/CE, free certified zone determinations, 24/7 claims reporting and great commissions. Not comfortable with flood insurance? Try the “Flood Solutions” option.

The PIA Partnership: Our national company council continually conducts real life applicable research campaigns and makes the results available to PIA members as a dynamic, evolving process — not simply discussed and put on a shelf.

Employee Profiling from OMNIA: OMNIA's behavioral assessment programs give you the insight to take the guesswork out of personnel decisions. Whether you are hiring a new employee, deciding on future roles for current employees, team building or creating a succession plan for your business, Omnia can help.

Agency Revenue Tools: Boost personal lines sales by engaging in employee worksite marketing using your appointed markets at regular commission rates.

In a recent Nationwide survey, 66 percent of small business owners said they still lack business interruption insurance, and 75 percent said they do not have a disaster plan in place. About 51 percent of owners said they are taking steps to prepare for the impact of climate change and El Niño on their companies, though many are divided on the impact of climate change and El Niño. Nationwide President and COO Mark Berven said small business clients should be reminded about the benefits of business interruption insurance. “Some of America's small business owners may be feeling overconfident, even as we head into the spring storm season. There hasn't been a major U.S. disaster in years, so there may be a sense of complacency,” he said.

This is a further update and summary on PIA's previously issued special bulletins on the National Flood Insurance Program (NFIP) and these changes.  It is more critical than ever that PIA members work very closely with their WYO partners through this next set of changes.

Despite the efforts of both the Flood Insurance Producers' National Committee and WYOs and the Insurance Institute for Business & Home Safety (IBHS) Flood Committee, as of this moment the REVISED Manual incorporating the April 1, 2016 changes has NOT yet been published (as final revisions are being polished).

Thus far, the inventory of NFIP bulletin references involved in these changes can be found here and here.

2016

w-16010 – Changes to the FEMA Mapping Center Services - As FIPNC requested.

w-16003 - Addendum #3 to the April 1, 2016 Changes – a rate table

w-16002 – Revised & Approved EC & Floodproofing Cert.

2015

w-15063 – Addendum #2 to April 1, 2016 Changes – Correction to premium language

w-15055 – Addendum #1 to April 1, 2016 Changes – Revised rates - high-rise condos

w-15046 – The original and core content of April 1, 2016 changes

Be sure to review the procedures for the Newly Mapped Program and its transition. We also encourage members to read the section for property owners, and the one for lenders on this subject as well so that you have a fully rounded appreciation.

PLEASE NOTE: The FEMA/NFIP Specific Rating Guidelines "paper" published by FEMA in December for the April 1, 2016 changes is no longer completely accurate.   So, please rely on your WYO for guidance and education/information.

WHY Flood Coverage & WYOs ARE Important: Since 4^th quarter 2010, and more especially since 4^th quarter 2015, many areas of mid-America and elsewhere that have not experienced flooding in a long time have been flooded, and most are experiencing repeating events.

PIA agencies know the value of risk management for their agency and their customers.  Hence, it is critical that all private sector insureds remember that the typical private sector property insurance policy does not cover the perils of, nor damage from, floods and flooding events to include mud-flows.  Further, property insureds should also be aware that the federal government program, NFIP, provides coverage for property and contents from damage by flood and flooding events to include mud-flows.  While NFIP is not as complete a claims answer for your customers as anyone would like, the private sector property insurance policies are no answer to the damage after a flood.

PIA members operate best in off

Google is shuttering Google Compare, its U.S. comparison-shopping site for auto insurance, credit cards and mortgages, according to a report in the Wall Street Journal. The company said in an email to its partners that Google Compare’s U.S. and U.K. services would start winding down this month and terminate on March 23, according to the Journal. Google said the service didn’t meet its expectations and that the company will now focus on AdWords and future innovations, the paper reported citing the email.

“Google has apparently discovered what independent insurance agents have always known: when it comes to insurance, customers appreciate that it is a complex transaction that requires professional advice,” said PIA National Executive Vice President & CEO Mike Becker. “PIA’s research has consistently shown a strong preference among both personal lines and commercial lines customers for doing business with a local agent.”

“However, independent agents should not interpret this decision to wind down Google Compare as an indication that they need not compete in the digital arena,” Becker cautioned. “Customers also want local agents as experts who are capable of online interaction concerning their accounts and are backed by the efficiency of the Internet.”

(Left to right) Bill Hartnett, Keith Savino, Mike Becker

Just what does the independent agent “Buy Button” mean? How could utilizing technology to allow an agent to bind policies in real time anywhere he or she decided—in person by the agent during a consultation, or after hours on the agent’s website by the customer—be an advantage? What are the possible pitfalls?

The Buy Button is being likened by its advocates to earlier milestones in technology development in the insurance industry.

ACORD’s Bill Hartnett discusses these issues with PIA’s Mike Becker and Keith Savino, following up on an industry-wide discussion session that was convened by PIA in January and held at the headquarters of ACORD in Pearl River, New York. [video]

PIA National Executive Vice President & CEO Mike Becker discusses the need to determine what customers want, then deliver it, in an op-ed in Insurance Journal. He discusses the research findings regarding the current buying preferences of our customers, compiled by The PIA Partnership. He also talks about an industry meeting PIA held to discuss the inability of a consumer to bind a policy on an independent agent’s website.

“The customer is always right. This is such a simple concept, but it often gets lost. Only by listening to your customers can you find out what they want. If we listen and then deliver accordingly, we will thrive. Our customers win, too – and so do our carriers,” said Becker.

Sen. Ben Nelson—Doing The Right Thing: On January 31, 2016, Senator Ben Nelson stepped down after three years as CEO of the National Association of Insurance Commissioners (NAIC). For the past 50 years, no one person has done more to ensure that the insurance industry of the United States has a firm, sensible, state-based regulatory system.

Last month, PIA published Part One of a two-part interview focused on Nelson’s insurance career. In this month’s Part Two, Nelson reflects on his political career, his accomplishments, his role in the Affordable Care Act (ACA) and what he thinks it will take to end the gridlock on Capitol Hill.

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PIA’s 2016 Advocacy and Policy Priorities have been released. They include preserving the role of agents in healthcare reform; defending state regulation of insurance; cultivating agent licensing uniformity; promoting small business & tax reform; and safeguarding important property/casualty programs. The full document is available here.

“This Congress has broken free of gridlock to act on many issues to the benefit of professional insurance agents and their customers, approving bills endorsed by PIA,” said PIA National Vice President of Government Relations Jon Gentile. “We look forward to continuing to work with lawmakers to support the independent agency system and Main Street insurance agents everywhere.”

PIA’s 2016 Advocacy and Policy Priorities have been released. They include preserving the role of agents in healthcare reform; defending state regulation of insurance; cultivating agent licensing uniformity; promoting small business & tax reform; and safeguarding important property/casualty programs.

The full document is available at: /docs/2016/piapolicyplan2016/.

“In 2015, PIA had great success in advocating for independent insurance agents at the federal and state level,” said PIA National Executive Vice President & CEO Mike Becker. “PIA successfully defended the independent agency system and advocated on behalf of independent agents at the federal level. We intend to build on that success in 2016.”

PIA helped achieve two victories in the year-end “omnibus” appropriations funding measure: a two-year delay of the “Cadillac Tax,” a 40% tax on certain employer-based health plans, and the passage of the Policyholder Protection Act.

PIA also successfully advocated for the reversal of a $3 billion cut to the Federal Crop Insurance Program. In addition, PIA actively advocated for the passage of the Protecting Affordable Coverage for Employees Act (PACE), enabling states to keep the current definition of a small group market in health insurance at 50 or fewer employees.

“This Congress has broken free of gridlock to act on many issues to the benefit of professional insurance agents and their customers, approving bills endorsed by PIA,” said PIA National Vice President of Government Relations Jon Gentile. “We look forward to continuing to work with lawmakers to support the independent agency system and Main Street insurance agents everywhere.”

PIA National hosted an industry meeting it called on January 21, 2016, at the headquarters of ACORD in Pearl River, New York, to discuss the concept of agents offering a level of purchasing capability on their websites, known as a “buy button.”

More than 50 agents, carriers and vendors attended the session, participating in discussions by three panels. There was a sense among participants that the industry is moving toward an online binding capability that independent agents may choose to utilize. Some participants likened development of a “buy button” capability to earlier milestones in technology development.

There was considerable discussion of whether or not independent agents offering an online purchasing/binding capability on their websites would undermine the agent value proposition, or add to the value that the agent brings to the process.

“We have to recognize as agents, we have an ability to possibly use this technology to reach a market segment that we’re not currently getting to—but yet, we also have to be aware of our value proposition. So, it’s kind of a delicate balancing act,” said PIA National President Robert W. Hansen, Jr.

PIA National conducted this forum to put the topic on the table, with agents and their views at the center of objective discussion, as a means of performing due diligence on an emerging issue.

“This is a new concept for many, so it’s important to carry out due diligence and have objective conversations about the effect it could have on the industry,” said PIA National Executive Vice President & CEO Mike Becker. “We are particularly grateful to ACORD for hosting this meeting, which enabled some the industry’s top forward-thinking leaders to share their thoughts on the matter.”

Stay tuned for additional details on the discussions held at this PIA National forum.

WASHINGTON – The National Association of Professional Insurance Agents (PIA) this week released PIA’s 2016 Advocacy and Policy Priorities, which include preserving the role of agents in healthcare reform; defending state regulation of insurance; cultivating agent licensing uniformity; promoting small business & tax reform; and safeguarding important property/casualty programs.

The full document is available at: /docs/2016/piapolicyplan2016/.

“In 2015, PIA had great success in advocating for independent insurance agents at the federal and state level,” said PIA National Executive Vice President & CEO Mike Becker. “PIA successfully defended the independent agency system and advocated on behalf of independent agents at the federal level. We intend to build on that success in 2016.”

PIA helped achieve two victories in the year-end “omnibus” appropriations funding measure: a two-year delay of the “Cadillac Tax,” a 40% tax on certain employer-based health plans, and the passage of the Policyholder Protection Act, which prohibits federal regulators from using assets designated to pay out insurance claims to “prop up” an affiliated bank.

PIA also successfully advocated for the reversal of a $3 billion cut to the Federal Crop Insurance Program. In addition, PIA actively advocated for the passage of the Protecting Affordable Coverage for Employees Act (PACE), enabling states to keep the current definition of a small group market in health insurance at 50 or fewer employees.

“This Congress has broken free of gridlock to act on many issues to the benefit of professional insurance agents and their customers, approving bills endorsed by PIA,” said PIA National Vice President of Government Relations Jon Gentile. “We look forward to continuing to work with lawmakers to support the independent agency system and Main Street insurance agents everywhere.”

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America^SM. PIA’s web address is www.pianet.com.

As expected, President Obama on Friday Jan. 8 vetoed legislation that would repeal much of the Affordable Care Act (ACA), including a provision repealing the upcoming 40% excise tax on so-called “overly generous” health plans—commonly known as the ‘Cadillac Tax’. Congressional Republicans say they will attempt to override the veto, but admit that they don’t have the votes to do so.

H.R. 3762 was advanced as a political statement. In addition to repealing much of Obamacare, it would also defund Planned Parenthood. The bill was passed by the Senate in December under the reconciliation process, meaning it required only 51 votes instead of 60 to pass and could not be filibustered. The House then passed it on January 7, on a party-line vote of 240-181.

While full repeal of the Cadillac Tax will die along with the broader bill, a budget agreement reached by lawmakers and enacted on December 18 included a two-year delay in its implementation, pushing it from 2018 to 2020.

PIA continues to strongly support repealing the Cadillac Tax entirely, and has endorsed S. 2045 by Sens. Dean Heller (R-NV) and Martin Heinrich (D-NM) in the Senate and a companion bill in the House (H.R. 2050) by Rep. Joe Courtney (D-CT ), who issued a call for repeal in an article he wrote for PIA Connection. The effort to repeal the excise tax on health benefits has attracted broad, bipartisan support.

PIA has praised Congress for reversing a $3 billion cut to the budget of the Federal Crop Insurance Program (FCIP). Restoration of the funds came in the form of an amendment to a highway spending measure that was approved by the House and the Senate on December 3. The legislative action delivered on promises made by congressional leadership to reverse the cuts, which had been included in the Bipartisan Budget Act of 2015 (H.R. 1314).

“This is a significant victory for America’s farmers and for our nation’s entire agriculture sector,” said PIA National Vice President of Government Relations Jon Gentile. “PIA insurance agents around the country engaged in an active campaign of advocacy to get these cuts restored, which contributed to this success.”

On October 30, Congress passed and the president subsequently signed a budget deal to raise the nation’s debt limit. Part of that deal—which had been negotiated in secret between President Obama and former House Speaker John Boehner—included the severe cut of $3 billion to the federal crop insurance program. When this came to light, PIA members inundated Congress with messages urging that no cuts be made to the crop insurance program. House and Senate leaders then quickly pledged to reverse the cuts.

“We are very pleased that Congress delivered on its promise,” Gentile said. “House and Senate leaders quickly responded to the calls from their constituents by pledging to make the crop insurance program whole again. These cuts would have seriously jeopardized the private sector delivery of crop insurance.”

PIA has joined with a coalition of 163 cosigners in sending a letter urging members of Congress to contact Administration officials, and urge them to reconsider proposed changes to overtime pay requirements. On June 30, 2015, the U.S. Department of Labor proposed to amend overtime regulations under the Fair Labor Standards Act (FLSA). The changes would be made to the exemptions for executive, administrative, and professional employees (the “white collar exemptions”).

The Department proposes more than doubling the salary level required to qualify for the white collar exemptions, from $455 per week/$23,660 per year to $970 per week/$50,440 per year. DOL also proposes automatically increasing this minimum salary going forward on an annual basis and publishing the increased minimum salary only 60 days before it becomes effective, with no opportunity for comment or input from employers who will have to comply. The Department is expected to finalize the rule in mid-to-late 2016.

What It Means to Agents: PIA is concerned that the proposed regulations will have unintended consequences for insurance agents and agencies. The proposed regulation, while well intentioned, will be unnecessarily burdensome for PIA member agencies leading to decreased opportunity and flexibility for agency employees.

Ben Nelson, CEO of the National Association of Insurance Commissioners (NAIC), said the U.S.’s state-based system will not become subservient to Solvency II regulations. Nelson made the remark in an interview with A.M. Best during the NAIC’s fall national meeting. The U.S. Trade Representative and Treasury Department are going to negotiate a covered agreement with the European Union E.U. and Nelson said that in achieving some measure of equivalence, “the state-based system is not going to become subservient to Solvency II. It’s not.”

During a wide-ranging interview for an article in an upcoming PIA Connection, Sen. Nelson told PIA National senior vice president of industry affairs Patricia A. Borowski that the bigger threat to state-based insurance regulation these days comes from the E.U. in the form of Solvency II.

“They [the E.U.] are now in a position that they feel they can dictate that you have to be equivalent,” Nelson said. “But there’s a difference between equivalent results and equivalent structure. Each group is comfortable with their own system because they know how it works. That I understand, but to try to export Solvency II to the United States is a failed effort because the different scope of what the protection is, is monumental. They protect the entity, we protect the public. So, if you can’t recognize and accept that difference, then you could be easily misled thinking that it wouldn’t hurt us to adopt their system. Well, yes it would. Yes it would.”

Born roughly between 1980-2000, Millennials are often portrayed as preferring texting to talking and online to real life. The truth is that they prize face-to-face meetings as much as previous generations. That's one of the conclusions of a report by the Meetings Mean Business Coalition (MMBC) and Skift, an industry intelligence and marketing platform in travel.

The report says there is a significant body of research supporting the importance that Millennials place on face-to-face meetings and goes on to cite examples. The report asserts that the top motivating factors to attend meetings and conventions revolve around considerations regarding destination, people, content and the overall meeting experience. One primary takeaway shows that Millennials desire to attend live meetings and events even more than older generations. Download the report here.

In the week since the release of research results compiled by The PIA Partnership, the findings are getting noticed in the industry. The National Underwriter/PC360 did an article on how small business owners strongly prefer independent insurance agents, but that agents must take steps to continue to demonstrate their value and also be more engaged online.

Carrier Management, a publication targeted to P/C insurance executives, also reported on the PIA Partnership research results. "Research findings determined that agents offered great value to small business clients, who sought relationships with those who understood their business, offered quick service responses, personal attention and could reassure them that they were making the right insurance decisions," the publication said. Insurance Business America also covered the news.

For more detailed research results, see the project website at www.voiceoftheclcustomer.com/.

Agents Win: Groundbreaking Research by The PIA Partnership (PIA 08/13/15)

This is the time of the year when forecasters issue predictions of how many tropical storms will be formed and how many will make landfall in the United States. The problem with this is people may only read a headline and conclude that there's not much to worry about.

PIA National President Richard "Richie" A. Clements points out that, "When it comes to hurricanes, it only takes one to cause massive death and destruction. The fact that it may be one of only a few storms during a season does not matter a whit." Read Richie's full President's message about the start of the hurricane season here.

The date May 4, 1989 will be etched in Gene Galligan's memory forever. On that day his home town Monroe, Louisiana was hit by a catastrophic hail storm. Soon after, Gene's agency was hit by carriers pulling out. But his agency survived, thanks to his PIA colleagues lining him up with a new carrier, when he needed it most.

"Because of our PIA affiliations, we were able to continue in business; from there we were able to plant with other companies," said Galligan "Twenty-six years later, we are still in business and still a member of PIA! From those acts, I realized that PIA agents are not just competitors but part of a family, and I needed to be an active member in that family." Read Gene Galligan's compelling story here.

My PIA Family Helped Me Save My Agency (PIA Connection April 2015)

The picture of millennials as wanting to do everything online continues to be challenged by what they say in surveys. Nearly 40% of the 2,122 people ages 21 to 48 surveyed by a retirement investment firm, Topeka, Kansas-based Security Benefit, say an adviser is a major source for financial information—more than twice the amount who listed the internet as their go-to resource. And people born between the mid-1960s to the early 1990s want in-person education.

Recently, another myth was exploded. It turns out that millennials don't all prefer to do their reading online. A University of Washington study of digital textbooks found that a quarter of students still bought print versions of e-textbooks that they were given for free. Pew studies show the highest print readership rates are among those ages 18 to 29, and the same age group is still using public libraries in large numbers.

Younger Workers Want In-person Education (Employee Benefit News 4/22/15)
Digital Natives Prefer Reading in Print (Washington Post 2/22/15)