Industry News

  • NAIC: Seek a Better Deal With the EU

    February 22, 2017

    The National Association Insurance Commissioners (NAIC) wants lawmakers in Congress to seek a new covered agreement with the European Union governing how insurance is regulated between the United States and the European Union (EU). A covered agreement, negotiated by the U.S. Treasury Department and its Federal Insurance Office (FIO), was reached with the EU and submitted to the House Financial Services Committee on January 13. The agreement is not subject to congressional approval and becomes effective after a 90-day review period before Congress.

    On Feb. 16, the House Financial Services subcommittee on Housing and Insurance held a hearing to discuss the agreement, about which there was disagreement.

    “This covered agreement is not the answer, and we urge the Trump administration to reopen negotiations with the EU to obtain a better deal for the United States,” said Ted Nickel, NAIC president and Wisconsin Commissioner of Insurance. “State regulators can support an agreement which achieves clear and permanent mutual recognition for our time-tested U.S. insurance regulatory system, includes meaningful state regulator input and transparency.” Nickel has said most state regulators were not allowed to participate in the process.

    National Association of Mutual Insurance Companies (NAMIC) President and Chief Executive Officer Charles Chamness said the agreement could be better. He was critical of the section that removes U.S. collateral requirements for EU reinsurers, if they meet all the other qualifying requirements to do business in the United States, saying it “particularly disadvantages smaller insurers, which are more reliant on reinsurance” and that “the small insurance companies will not have the same negotiating power as larger companies.”

    Former FIO Director Michael McRaith defended the agreement, as did the American Insurance Association (AIA). Lee Ann Pusey, AIA president and CEO, calling it a “win-win” that protects the industry and “the U.S. system of insurance regulation.”

    Rep. Blaine Luetkemeyer (R-MO), a former insurance agent, criticized both trade groups for their differences over the agreement and congratulated McRaith for his work. “Today we have an example of the problem we have in the insurance industry. We have two groups representing two different groups of insurance companies that disagree,” he said. “I will tell you from my perspective they had better get on the same page. I am up to here with this dysfunctional infighting.”

    PIA commented following the hearing. “The fact that two groups representing insurance companies disagree substantively on the value of the covered agreement demonstrates that the agreement can be improved,” said Lauren Pachman, PIA National counsel and director of regulatory affairs. “Such differences could have been reconciled in advance, had state insurance regulators been fully included in the negotiating process. Although the agreement appears to respect the Unites States’ state-based system of insurance regulation, the valid concerns expressed by smaller insurers should be addressed.”

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  • PIA at Trump Transition Meeting

    January 18, 2017

    PIA National was represented by Vice President of Government Relations Jon Gentile at a meeting with senior members from the Trump Transition Team in early January. The meeting’s focus was on financial services issues broken into three issue buckets: Dodd Frank, regulatory relief, and housing and insurance.

    PIA National spoke of the importance of a long-term reauthorization of the National Flood Insurance Program (NFIP) that expires in September of this year, as well as the need to grow the private flood market. In addition, PIA was the only organization to call for the full repeal of the Federal Insurance Office. We will continue to engage with the Trump Transition Team leading to January 20 when President-elect Trump takes the oath of office.

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  • Michael Consedine Named CEO of NAIC

    December 14, 2016

    Michael Consedine

    Former Pennsylvania Insurance Commissioner Michael F. Consedine has been named Chief Executive Officer (CEO) of the National Association of Insurance Commissioners (NAIC), effective in early 2017.

    Consedine will lead the NAIC’s Washington, D.C. office with primary responsibility over state and federal government affairs and international activities. He will work closely with NAIC members, representing their interests as an advocate and spokesperson for the association.

    Outgoing NAIC President John Huff said the NAIC needed someone with Consedine’s experience with international, insurance industry and state regulatory affairs. “Mike brings valuable experience and energy to this role during a time of transition with a new administration and Congress,” said Huff. “He is highly respected by members of the NAIC and served this body with distinction when he was Pennsylvania’s Insurance Commissioner.”

    Consedine will fill the post left open since former U.S Sen. Ben Nelson left on Jan. 31, 2016. Nelson reflected on his insurance career in an interview in PIA Connection [“Mr. State Insurance Regulation”] conducted by PIA National Senior Vice President Patricia A. Borowski. Nelson will continue as a consultant to the NAIC through January 2017.

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  • PIA?s Gary Blackwell on the Resilience of Agents

    December 14, 2016

    Despite all the hype about how online sales may “disrupt” the independent agent’s hold on the small commercial market, it just isn’t happening, points out PIA National President Gary Blackwell in an op-ed in the December issue of the National Underwriter [“Resilience in a Digital Age”].

    “Survey after survey continues to show that the owners of small and midsize businesses want to work with their insurance agents, much to the ongoing frustration of various direct writers,” Blackwell says. “Clearly, the best strategy for carriers is to continue to support their agency force in providing their customers with what buyers want.”

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  • PIA Open Letter to Carriers

    December 13, 2016

    PIA National is running an “Open Letter to Carriers” in the December issue of the National Underwriter. In it, PIA notes that the relationship between an independent insurance agency and its multiple carrier partners is designed to achieve mutual benefit, accomplishing together what the parties cannot alone. We offer to every carrier an open door to be a sounding board for changes they may be contemplating. “Such communication can foster more successful results,” we note. You can read PIA’s ad here.

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  • PIA Calls for Repeal of Federal Insurance Office

    November 29, 2016

    Regulation

    (PIA) is proposing that the Federal Insurance Office (FIO) be repealed.

    The election of Donald Trump as president and a Republican majority in both houses of Congress will bring about a unique opportunity to reexamine the regulatory framework for insurance. As part of regulatory reform, PIA is calling on policymakers to fully repeal the FIO.

    PIA opposed the creation of the FIO from the outset. In 2010, advocates of federal insurance regulation succeeded in getting the FIO established as part of the Wall Street Reform and Consumer Protection Act (Dodd-Frank)—but PIA, along with the NAIC, fought back attempts to give this office broad authority. In the end, a prohibition on the FIO acting as a regulator of the business of insurance was included.

    While over the years the FIO has adhered to this restriction, there have been repeated indications that it favors more federal involvement. Former NAIC CEO Ben Nelson once felt compelled to state that “the FIO does not speak for insurance regulators.” Former Connecticut Insurance Commissioner Thomas Leonardi recently observed, “Since its creation, the FIO has often taken positions in direct contradiction to the views of the state regulators.”

    FIO Director Michael McRaith once gave a speech saying that the insurance sector should be treated the same as the banking and securities sectors, prompting a strong rebuke from PIA.

    “One should never forget that all insured risks will always be local,” commented PIA National Senior Vice President Patricia A. Borowski at the time. “The United States has an effective and efficient state-based insurance regulatory system that protects policyholders and offers them a broad array of competitive choices from many insurance carriers. To those who want a different system, we simply say they are woefully misguided.”

    “If the goal is to eliminate unnecessary federal regulation, getting rid of the FIO makes good sense,” said PIA National Vice President of Government Relations Jon Gentile. “Doing so would reaffirm that regulation of insurance should continue to be the responsibility of the states. PIA will remain vigilant in its efforts to ensure that no new paths to the federal regulation of insurance are created as part of any Dodd-Frank rollback.”

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  • Judge Temporarily Blocks DOL Overtime Rule

    November 29, 2016

    A federal judge has issued a preliminary injunction blocking implementation of the U.S. Department of Labor’s (DOL) overtime rule. The injunction, issued by Judge Amos L. Mazzant of the U.S. District Court for the Eastern District of Texas, puts a hold on implementation of the rule nationwide. The final rule was to go into effect on Dec. 1.

    The rule would expand the pool of employees eligible for overtime by doubling the salary threshold to $47,476. A preliminary injunction is not a permanent order and is subject to modification (including an order making it permanent), or it could be vacated entirely. The DOL issued a statement saying it disagreed with the decision and was “currently considering all of our legal options.”

    Prior to the injunction, PIA issued a FAQ on the impending changes.

    PIA National has strongly opposed the rule due to its negative impact on small businesses, including independent insurance agencies. We are pleased with the granting of the preliminary injunction before the rule was to take effect. After the injunction was issued, PIA distributed this analysis.

    PIA will continue to urge Congress to pass legislation to permanently stop implementation of the overtime rule, and we will continue to monitor judicial activities out of the Eastern District insofar as they affect the future of the rule.

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  • PIA Calls for Repeal of Federal Insurance Office

    November 22, 2016

    The election of Donald Trump as president and a Republican majority in both houses of Congress will bring about a unique opportunity to reexamine the regulatory framework for insurance. As part of regulatory reform, PIA calls on policymakers to fully repeal the Federal Insurance Office (FIO).

    “With Congress poised to significantly roll back key provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank), we ask that they repeal the FIO,” said PIA National Vice President of Government Relations Jon Gentile. “A June 2013 report issued by the Government Accountability Office (GAO) found the state-based system of insurance regulation helped to mitigate the negative effects of the financial crisis on our industry. This report highlights the unnecessary bureaucracy that the FIO represents.  Our longstanding and robust state-based insurance regulatory regime does not require this level of federal oversight.”

    “If the goal is to eliminate unnecessary federal regulation, getting rid of the FIO makes good sense,” Gentile said. “Doing so would reaffirm that regulation of insurance should continue to be the responsibility of the states. PIA will remain vigilant in its efforts to ensure that no new paths to the federal regulation of insurance are created as part of any Dodd-Frank rollback.”

    With control of both houses of Congress and the White House, Republicans are likely to concentrate on the broad goals of reducing regulations, cutting taxes, and generally pursuing business-friendly policies that promote economic growth. PIA looks forward to working with President-elect Trump and the 115th Congress to achieve these goals.

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  • PIA Partners with National Underwriter on Agent Survey

    November 16, 2016

    National Underwriter Property & Casualty, in partnership with PIA National and Flaspöhler, part of NMG Consulting, will conduct the 2017 National Underwriter/PIA Independent Agent Survey, a project whose findings will provide deep, revealing insight into the challenges, needs, and demographics of independent property & casualty insurance agents across the U.S.

    The survey, which launches this week, will be hosted online by renowned intelligence firm Flasphler Research, with which National Underwriter has enjoyed a decade-long editorial relationship. The questionnaire, crafted by NU, PIA and Flaspöhler, will be distributed to NU’s proprietary lists of agents and brokers nationwide as well as by PIA to PIA’s national membership.

    The results of this project will be shared in print and online as a data-rich cover feature of charts, graphs and editorial analysis in National Underwriter's February print edition, as well as on PropertyCasualty360.com.

    “A survey of this size and scope has never before been attempted, and the findings and insight gained from this project will be a benefit to the industry,” said Shawn Moynihan, National Underwriter's Editor-in-Chief. “Our alliance with PIA in this effort will help us all gain broader perspective on the needs of the people who sell P&C products every day, and will help inform our editorial coverage going forward as we continue to serve them.”

    “PIA is pleased to partner with the National Underwriter and Flaspöhler in this groundbreaking survey, which will provide our industry with the most comprehensive and accurate picture of what professional independent insurance agents need to best serve their P&C clients,” said PIA National Executive Vice President & CEO Mike Becker. “Independent agents have achieved an unparalleled track record of success as the preferred distribution system for P&C products. This survey will help them stay on top.”

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  • Who Says Insurance Is Boring? Not Millennials

    November 8, 2016

    Millennials

    Four out of five millennials are “optimistic” or “very optimistic” that the insurance industry will evolve to attract the next generation of insurance talent, due to productivity and efficiency gains from technology adoption, according to Vertafore’s second annual “Millennial Revolution” study. PIA examined the research results in an article in PIA Connection.

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  • Register Now for the Upcoming Management Track of Omnia Group Webinars!

    November 2, 2016

    As a PIA member exclusive benefit with The Omnia Group, we recently created educational webinar tracks for a variety of positions within an agency. The first series which started September 14th features subjects for those in management roles.

    The next webinar in the series titled How to Succeed as a First Time Manager will take place on Wednesday, November 16th at 2pm EST.

    Sign up for one or all of the newly created webinars with Omnia by selecting the track that best suits you.

    View the full schedule and descriptions at http://www.omniagroup.com/pia-webinar-registration/ Space is limited so sign up now!

    Want to learn more about Omnia as a member benefit?

    When first contacting Omnia, PIA members receive a free online, instant assessment or a free custom assessment of an agency employee or prospective employee. Plus, if you buy a package of Omnia Profiles you’ll receive one free.

    Get started on your track to success today by calling Carletta Clyatt of The Omnia Group at 800-525-7117, x 1226 or email her at cclyatt@omniagroup.com and be sure to tell her you are a PIA member.

    Or visit The Omnia Group website at www.omniagroup.com/pia-members/

    /news/insurance-news/2016/register-now-for-the-upcoming-management-track-of-omnia-group-webinars

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  • PIA?s Tom Adderhold Remembers Arnold Palmer

    September 29, 2016

    Many people in the insurance industry—especially agents—have a particular affinity for the sport of golf. That’s why the news of the passing of Arnold Palmer, whom many considered to be among the greatest professional golfers of all time, hit hard. Palmer passed away at the age of 87 on September 25 in Pittsburgh.

    PIA National Past President Tom Adderhold of Duluth, Georgia was General Chairman of the PGA Championship in 2011. Tom shares some thoughts on the passing of Arnold Palmer:

    “The world has lost one of the true legends of the game of golf, business and life. Arnold Palmer and television turned a game into a mega-million enterprise and influenced the lives of so many people, both in golf as well as the non-golfer. Mr. Palmer established a Legacy to live by: ‘Be a person of principle.’ He liked to say, ‘Success depends less on strength of body than upon strength of mind and character. Winning isn’t everything, but wanting it is.’”

    “Mr. Palmer always had time for the fans, the kids and the volunteers. He gave back in so many ways, such as hospitals and scholarships. He was a ferocious competitor, but always a gentleman. He personally answered his own mail and autographed millions of items with a signature that is legible. I hope we all in the insurance world will adopt his legacy and strive to be the best agents in servicing our customers and our industry.”

     

    Tom Adderhold

    Past President, PIA National

    General Chairman of the 2011 PGA Championship

     

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  • PIA Statement on Financial CHOICE Act (H.R. 5983)

    September 14, 2016

    PIA National issued this statement on the draft of the Financial CHOICE Act (H.R. 5983). The bill was introduced on September 9, 2016 by its sponsor, House Financial Services Committee Chairman Jeb Hensarling (R-TX). It then went to a committee markup on September 13, 2016.

    In PIA’s statement, we express serious concerns about the creation of a new federal office called the independent insurance advocate, stating that “we remain unconvinced of the need to create a permanent insurance office in the federal bureaucracy.”

     

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  • Leonardi Slams FIO, Warns of Regulatory Chaos

    September 7, 2016

    Days before he is set to speak in Washington, D.C. at a Property Casualty Insurers Association of America (PCI) roundtable discussion about international insurance regulation, former Connecticut Insurance Commissioner Thomas Leonardi gave an interview which reminded everyone about his well-deserved reputation for outspokenness.

    Leonardi
    In a wide-ranging interview with Best’s News Service, Leonardi said international regulators need to be more transparent in developing global insurance capital standards and maintain an open dialogue with the carriers they seek to supervise, as well as U.S. state regulators.

    Leonardi is a steadfast supporter of state regulation of insurance. He sounded a warning about the Federal Insurance Office (FIO), a part of the U.S. Treasury Department.  FIO and the Treasury are now in negotiations for a covered agreement with European regulators, who have pushed the U.S. to adopt a system of federal insurance regulation similar to theirs. There are concerns that possible outcomes of these covered agreement talks could threaten the U.S. system of state-based insurance regulation.

    “Since its creation, the FIO has often taken positions in direct contradiction to the views of the state regulators,” Leonardi said. “We are seeing this happen right now in the context of the negotiations around the covered agreement.”

    “FIO’s approach is one of ‘we’ll let you know what happens’ as opposed to having the state regulators, that are ultimately responsible for prudential regulation of insurers in this country, actively at the table,” Leonardi said.

    State regulators need to be involved in the process, Leonardi said, adding that he supports the Transparent Insurance Standards Act of 2016 (H.R. 5143), a bill endorsed by PIA that sets objectives for U.S. negotiators regarding international insurance standards, grants Congress 90 days to approve or reject proposed agreements, and mandates a public comment period.

    “The state regulators regulate 6,600 insurance companies in this country and that is not going away anytime soon,” Leonardi said. “It’s really important that the Fed and FIO not enter into an agreement that is not supported by the state regulators. Otherwise you have chaos.”

     

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  • Louisiana Flood Damage At Least $8.7 Billion

    September 7, 2016

    LA Flood

    Louisiana Gov. John Bel Edwards says his state had more than $8.7 billion in damage in both insured and uninsured losses from catastrophic flooding in August, and the figure will increase as officials finish assessing damage to roads and other public infrastructure.

    A storm that started Aug. 12 dumped as much as two feet of rain in some parts of Louisiana over two days, and the flooding has been described as the worst disaster in the U.S. since Superstorm Sandy struck the East Coast in 2012.

    READ: 6 Tips for Flood Survivors on Avoiding Fraud and Scams

    Edwards said documented flood damage has affected more than 55,000 houses in Louisiana, and that could double as aid applications and inspections continue. He said initial evaluations show the majority of flooded households were resided in by people with low to moderate incomes, and 20 per cent of flooded homes were resided in by renters.

    READ: Agent Tools for Flood Insurance

    More than 6,000 businesses flooded, with more than $2.2 billion in damages to buildings, equipment and inventory, Edwards said. He also said there are “conservative estimates” of more than $110 million in damage to agriculture.

    Louisiana Insurance Commissioner Jim Donelon says officials have said that the August flood event will be the fourth most costly event for the National Flood Insurance Program (NFIP). Approximately 28,000 claims have been filed with the NFIP, and Donelon expects that number to rise to approximately 30,000.

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  • Aetna Letter to DOJ Threatened ACA Pull-Back

    August 24, 2016

    Aetna Inc. warned U.S. officials more than a month ago that it would pull out of Obamacare’s government-run health insurance markets if antitrust officials attempted to block its $37 billion merger with Humana Inc.

    In a July 5 letter to the Justice Department from Chief Executive Officer Mark Bertolini, Aetna said that challenging the merger “would have a negative financial impact on Aetna and would impair Aetna’s ability to continue its support” of plans sold under the Affordable Care Act (ACA). Such a challenge would leave the insurer “with no choice but to take actions to steward its financial health.”

    READ: In Reversal, Aetna Pulls Back From ACA

    “If the DOJ sues to enjoin the transaction, we will immediately take action to reduce our 2017 exchange footprint,” Bertolini wrote. He said that the cost of litigation and debt taken on by Aetna, the need to plan for a breakup fee it would owe Humana, as well as cost savings already anticipated as a result of a successful deal, would all factor into Aetna’s need to pull back.

    “By contrast, if the deal proceeds without the diverted time and energy associated with litigation, we would explore how to devote a portion of the additional synergies (which are larger than we had planned for when announcing the deal) to supporting even more public exchange coverage,” Bertolini said in the letter.

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  • Post-Brexit Insurance Deal Could Be Fast-Tracked

    August 23, 2016

    US and UK Flags

    An agreement that would provide regulatory equivalency for U.K. and U.S. insurers could be fast-tracked for approval after Britain exits the European Union, according to Michael McRaith, the director of the U.S. Federal Insurance Office. U.S. and European Union officials are currently negotiating such a regulatory agreement, and until the U.K. completes its “Brexit,” the covered agreement would also apply to Britain, which is home to the world’s hub for specialty lines of insurance. A separate agreement covering UK and U.S. insurers probably would be needed once Britain goes through with the split.

    “Our view is, until the U.K. withdraws from the EU, that we are dealing with the EU,” McRaith told members of the U.S. Treasury’s Federal Advisory Committee on Insurance, which is comprised of state insurance regulators and consumer groups along with many of world’s leading insurance companies, including Marsh & McLennan Cos., Inc., American International Group Inc., Lloyds of London and Liberty Mutual Co., and other insurance research and analysis groups.

    READ: NAIC, Industry Renew Calls for Equivalency

    There are concerns that possible outcomes of covered agreement talks between the U.S. Treasury Department and the European Union could threaten the U.S. system of state-based insurance regulation. PIA strongly supports the Transparent Insurance Standards Act of 2016 (H.R. 5143), which enhances Congress’s oversight of international deliberations relating to insurance standards by requiring the U.S. Treasury Department and Federal Reserve to consult with Congress and state insurance regulators before approving any international insurance standards.

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  • NAIC Panel Draft Seeks NFIP Reforms

    August 16, 2016

    A National Association of Insurance Commissioners’ (NAIC) panel has drafted recommendations to reform the National Flood Insurance Program (NFIP) as part of a congressional 2017 reauthorization, including measures designed to aid private flood insurance market growth. The panel has put forward objectives that include support for long-term reauthorization of at least 10 years in order to avoid short-term extensions and program lapses; encouraging greater private market growth; and encouraging mitigation to reduce losses.

    The committee draft also supports final passage of H.R. 2901, the Flood Insurance Market Parity and Modernization Act, which clarifies that private flood insurance meets the mandatory purchase requirement. The bill passed the House in an overwhelmingly bipartisan 419-0 vote on April 28.

    PIA supports the long-term reauthorization of the NFIP when it comes up for renewal in 2017.  PIA opposes the immediate privatization of the National Flood Insurance Program (NFIP), but supports sensible solutions for encouraging the growth of the private flood insurance market with measures like H.R. 2901.

     

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  • Insuring Your Drone? Talk to Your Agent

    August 10, 2016

    Drone

     

    The Federal Aviation Administration issued a rule in June that will make it easier to use unmanned aircraft systems — better known as drones — for commercial purposes such as aerial photography, equipment inspection and news gathering.

    Insuring your drone, however, is anything but simple. Drones pose myriad risks, including damage to the drone itself, to people or property hit by a drone and invasion of privacy claims.

    READ: The Latest on Drone Regulations

    Homeowners or renters policies might — or might not — cover some or all of these risks if you’re flying a drone for fun, but it won’t cover business use. See PIA National’s one-page issue sheet, Hobbyist Drones (PIA member login required).

    If you use a drone to make money, your general business insurance might cover the drone itself, but you usually need a specific aviation-liability policy to cover damage it inflicts on people or property. As with any type of insurance, you must read the exclusions carefully, and if you don’t understand them, talk to your agent.

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  • Chinese Regulators Echo U.S. on Global Insurance Standards

    August 3, 2016

    Chinese insurance regulators echoed the sentiments of U.S. regulators, urging the international regulatory community to take a gradual approach to the development of international insurance capital standards that should allow for jurisdictional control over implementation.

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