main street industry news - june 2014
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PIA of Nebraska and Iowa, Main Street Industry News. Politics, Insurance, News and more.TRANSCRIPT
June 2014 | Published Monthly
National Alliance Names Annual Outstanding CSRs »18
PIA National Agent of the Year Profiled by National Underwriter »7
INSIDE
ObamaCare Marketplace Registration Coming Soon »23
Insurance Business America — The Next Generation »12
Cover Photo Credit: Katie Morrow, Nebraska summer morning
Insuring the Midlands Since 1891
Andy Kraus, CPCURegional Director of Agencies
National Association of Professional Insurance Agents400 N. Washington St., Alexandria, VA 22314-2353www.pianet.com | [email protected] | (703) 836-9340
Did you know that PIA has figured out a way to make selling flood insurance easier?
PIA has entered into an exclusive partnership with Floodbroker.com which allows PIA members’ clients and prospects to learn about their flood risks and request a quote for flood insurance from their local, participating PIA member agency.
Floodbroker has automated the process of obtaining a flood insurance quote through the National Flood Insurance Program (NFIP) and makes this technology available to participating PIA member agents through their very own agency-branded, flood insurance microsites.
Agents direct their clients and prospective insureds to their Floodbroker microsite where they can learn what flood zone they are in and request a flood insurance quote. After answering a few simple questions the quote is emailed to their agent who completes the sale offline using their agency’s regular flood insurance carrier. Even in cases where an actual quote cannot be generated online, the prospect can still submit the information they have input into the form so that their agent can get back to them and continue the flood insurance sale offline.
Learn more about this program at www.pianet.com/floodbroker.
Not a PIA member? Please consider joining the association that arms agents with the tools they need to succeed. Contact us for a membership application or visit us online at www.pianet.com/joinpia.
May 2014 | Main Street Industry News | www.pianeia.com | 4
Regulating Insurers too Big to Fail — Part 2 | 17
National Alliance Names Annual Outstanding CSRs | 18
PIA National on NFIP Rate Changes | 19
Goodbye to the American Dream? | 20The American dream is famous the world over. For decades was why immigrants came to this nation’s shores.
PIA Partners with Floodbroker.com — Flood Insurance Sales Easier? | 22PIA National has formed a groundbreaking partnership with floodbroker.com.
ObamaCare Marketplace Registration Coming Soon | 23
Small Business & ObamaCare | 23
The Affordable Care Act’s Silver Plan — 2.6% Rise in 2015 | 24
The ObamaCare Penalty—4-Million to Pay | 24
PIA National Agent of the Year Profiled by National Underwriter | 7Virginia insurance agent Cole Tucker — the 2014 PIA National Professional Agent of the Year — is profiled in the cover story of the June issue of National Underwriter.
Road to TRIA Renewal Rocky — PIA Praises Senate Committee Action | 8Last week the Senate Committee on Banking, Housing and Urban Affairs for unanimously approved the Terrorism Risk Insurance Program Reauthorization Act (S. 2244).
Explanation — The Importance of TRIA & Why the P&C Markets are Stable | 10The property and casualty insurance industry is stable. And — fingers crossed and barring a major catastrophe or two — it will likely remain that way all through 2014 and into 2015.
May’s Rates — Still Trending Up | 11
Financial Literacy — The 10 Least Literate States | 11A study commissioned by NAIFA shows financial professionals — and that includes insurance producers — as very important to consumers.
Insurance Business America — The Next Generation | 12
Cyber Insurance — Growing Interest & Urgency | 14These days cyber security is a hot topic for business and government.
Regulating Insurers too Big to Fail — Part 1 | 16
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piA Ne iA eveNTS
Branch Out With PIA - Agent Convention | 26
Upcoming Events Calendar 2014 | 36
AdverTiSeMeNTS
Wanted, For Sale and Opportunities | 37Contact us to place a classified ad.
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May 2014 | Main Street Industry News |www.pianeia.com| 7
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Cole TuckerVirginia Insurance Agent
2014 PIA National Professional Agent of the Year
June issue of National Underwriter. The magazine calls
him the “Emperor of Virginia”
Virginia insurance agent Cole Tucker — the 2014 PIA National Professional Agent of the Year — is profiled in the cover story of the June issue of National Underwriter. The magazine calls him the “Emperor of Virginia”.
It’s an interesting title.
Tucker is the president and owner of Mechanicville, Virginia’s Tucker-Franklin Insurance Group. He spends his days overseeing his agency, working with PIA National, meeting with clients and teaching, and maintaining a well-balanced personal life with his wife of 20 years and teenage son and daughter.
His has a successful life. Tucker’s agency generates more than $3 million in premium — with about 85% to 90% personal lines and the rest small commercial and life & health.
PIA National Agent of the Year Profiled by National Underwriter
Tucker — who works hard for PIA — loves the association but joining wasn’t his idea.
“One of the first things I did when I opened my agency with my friend Gerald Hemphill was to join PIA, but it was not my decision. My grandmother — who is with me here today — gave me the dues to join PIA. Her agency wrote the insurance for PIA of Virginia & D.C., and when she gave me the dues check, she said ‘You go talk to Elsie [Reamy, the late executive vice president of PIA of Virginia & DC]; she’ll tell you what to do.’ I did, and I’ve been here ever since.”
Tucker — to all who know him is a pretty amazing person — yet he talks very little about his accomplishments. His humility is at once genuine and disarming. n
Click here to read the entire National Underwriter Cole Tucker profile of Cole Tucker.
May 2014 | Main Street Industry News | www.pianeia.com | 8
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Last week the Senate Committee on Banking, Housing and Urban Affairs for unanimously approved the Terrorism Risk Insurance Program Reauthorization Act (S. 2244). The bill — if passed intact — will renew the Terrorism Risk Insurance Act (TRIA) for seven-years.
TRIA will expire at the end of 2014.
PIA National Executive Vice President and CEO Mike Becker said, “PIA applauds the action by the Senate Banking Committee to advance the reauthorization of TRIA and urges the full Senate to follow suit. PIA strongly supports a clean bill providing for a long-term reauthorization.”
The Senate bill makes some significant changes in the current version of TRIA. Federal financial help for a terrorist act kicks in currently at $27.5 billion in losses. The bill changes that and adds $2 billion a year from that amount until it reaches $37.5 billion in five-years.
Another change is the amount the government will cover. It’s currently 85% and it will drop to 80% over five-years.
Road to TRIARenewal Rocky PIA Praises Senate Committee Action
South Dakota Democrat Sen. Tim Johnson is the committee chairman. He said, “This seven year extension of TRIA will continue to help promote economic growth and provide certainty for commercial property development and job creation across the country while protecting the taxpayer. With such a substantial bipartisan vote out of the Banking Committee, I thank my colleagues on both sides of the aisle and plan to continue working with them to move the bill through the Senate in a timely manner.”
While the changes in the TRIA renewal aren’t what the industry really wants, it’s acceptable to most insurance industry groups including the PIA. Here’s a list of the bill’s supporters:
American Insurance Association (AIA)•
National Association of Mutual Insurance • Companies (NAMIC)
Property Casualty Insurers Association of • America (PCI)
The Coalition to Insure Against Terrorism • (CIAT)
The National Governors Association•
The U.S. Chamber of Commerce•
Also joining the battle to renew TRIA is professional sports:
The National Football League (NFL)•
The National Basketball League (NBA)•
Major League Baseball (MLB) •
The National Hockey League (NHL)•
They and other sports associations sent a letter to the member of the senate and said, “It is critical that arenas and stadiums continue to be
Mike Becker, PIA National Executive Vice President
May 2014 | Main Street Industry News |www.pianeia.com| 9
insured against a terrorist act.” So the bill has passed the Senate Banking Committee and is expected to be passed by the full Senate. What will happen in the House is another story and where TRIA’s ultimate fate
lies is still up in the air.
House Financial Services Subcommittee on Housing and Insurance Chair and Texas Republican Randy Neugebauer is circulating a draft framework among committee Republicans. He calls his version TRIM and it will reauthorize the program for just three years. Neugebauer’s idea is to permanently phase out TRIA over time.
Worse, House Financial Services Chairman and Texas Republican Jeb Hensarling wants to change the TRIA trigger from $100 million to $500 million in losses.
PIA National Director of Federal Affairs said
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Randy Neugebauer — Texas Republican, Head of the House Financial Services
Subcommittee on Housing and Insurance Chair
the association does not support going that direction and will work to change Neugebauer and Hensarling’s minds. “PIA has long advocated for a straightforward reauthorization of this important law. We look forward to working with the full Senate and the House Financial Services Committee to reauthorize TRIA in as straightforward a way as possible. Acts of terrorism do not fit the definition of insurable risk and it remains difficult, if not impossible, for underwriters to accurately determine premiums based on sound actuarial calculations. A TRIA backstop is needed to ensure that this coverage remains available and affordable, especially for small and mid-size commercial insureds.”
The House Financial Services Committee will vote on Neugebauer’s extension later this month. Committee member, New York Congressman — and Republican — Rep. Peter King says neither Neugebauer or Hensarling’s version will be the final bill passed by Congress.
At the annual Advisen Property Insights Conference, King called Neugebauer’s proposal and that of Hensarling “untenable” and said, “Now, we’re negotiating.”
King is predicting an extension of five-years and hopes for something similar to what TRIA is today. n
Rep. Peter King — Republican, Committee member and New York Congressman
Jeb Hensarling , Texas Republican — House Financial
Services Chairman
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The property and casualty insurance industry is stable. And — fingers crossed and barring a major catastrophe or two — it will likely remain that way all through 2014 and into 2015.
Or so say experts like Insurance Information Institute (I.I.I.) President Dr. Robert Hartwig.
He and others gave an assessment of the P&C industry at a recent Advisen/Allied World North America webinar. The conclusion was few catastrophe events, an equity market that remains strong, an improved economy and interest rates creeping up are stabilizing insurance and are leading to positive returns.
Also noted is the fact that TRIA — the Terrorism Risk Insurance Act — will likely be passed by Congress in a workable version that is acceptable to the industry.
ExPLANATIONThe Importance of TRIA & Why the P&C Markets are Stable
Hartwig’s concern is that many in Congress are associating TRIA with the National Flood Insurance Program (NFIP). TRIA has yet to be used and the NFIP is $24 billion in debt. What TRIA does is provide for an active terrorism insurance market and allows companies to sell terrorism risk insurance. Without TRIA and federal government reinsurance, the industry would not be able to offer that line.
The bottom line on insurance — says Lou Iglesias who is the president of Allied World North America — is an industry that is well-capitalized and able to take care of more risk than it could 10-years ago. “I think industry is better able to understand and write that risk.”
Talking TRIA, Iglesias said the industry wants a long term deal, “if we get a three-year renewal, we’ll be talking the next day about what will happen three years down the road.”
All agreed this is a great time to be an insurance buyer. Prices are more stable and increases are fewer. Even better, retention rate is very high because of agent and broker performance and more willingness on their part to contact clients on a weekly and sometimes daily basis. n
Dr. Robert Hartwig
Lou Iglesias, Allied World’s president, North America
Platform
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MarketScout’s May rate report for commercial and personal lines has rates still trending up. On average both jumped 3%. MarketScout CEO Richard Kerr said on his firm’s barometer both lines range between flat and no movement at all and “adjusting upward.”
The 3% rise for commercial lines beat the 2% jump seen in April. Leading the way is property, business owners and general liability with plus 2% to plus 3% increases. Small accounts from $25,000 to $250,000 in premiums rose 3%. Large accounts to $1 million hit a 2% hike.
Personal lines increases were led by homeowners of less than $1 million in insured value. Those rates went up an average of 4%. Those with more than $1 million in value jumped 3%.
Auto rates were up 3%, too.
In summing up the report, Kerr said, “Large, admitted insurers control the vast majority of the U.S. personal lines market. Because of their size and ability to withstand market trends, the large insurers don’t normally respond to unfounded price aberrations in any given market. A strong balance sheet enables these insurers to stick to their guns on a long-term basis. However, smaller insurers will vary pricing almost monthly, as permitted by respective state insurance regulations. Regardless, the volume of the larger insurers has a significant impact on the U.S. personal lines composite rate. Thus, the reason for another month of steady results at plus 3%.” n
May’s RatesStIll trENDINg Up A study commissioned by NAIFA shows financial
professionals — and that includes insurance producers — as very important to consumers. It found that people need sound financial advice to survive in today’s difficult economy.
It’s available to them and more available than it has probably ever been available.
What’s unfortunate is how few people avail themselves of sound, expert financial planning. The study found in some areas of the country just two in five adults actually have a working budget. Those same individuals have racked up $73 billion in new credit card debt since 2012.
In other words, many spend more than they earn and few have rainy day funds.
When it comes to finances and understanding finances, three PIA Western Alliance states are among the 10 least financially literate states. They are Arizona, New Mexico and Nevada. n
Financial Literacy The 10 Least Literate States
10 Michigan
9 Arizona
For knowledge of finances and
education in finances Arizona ranks 38th out of 51. When doing
financial planning or managing
spending, individuals in
Arizona rank 41st out of 51.
8 Kentucky
7 Alabama
6 Rhode Island
5 New MexicoThe state ranks 47th out of 51 for financial knowledge
and education. On how people plan their finances
and on their spending behavior, New Mexico ranks
37th out of 51.
4 Louisiana
3 NevadaLooking at financial
knowledge and education, Nevada ranks 41st out of 51. For financial planning and spending behavior it is 50
out of 51.
2 Arkansas
1 Mississippi
10Th WORST TO ThE FIRST WORST
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INSURANCE BUSINESS AMERICA The Next Generation
The publication cites statistics showing we’ll be losing a quarter of those working in the industry by 2018. Workers are going into retirement or are dying, and the hiring of younger people to fill those positions is lagging.
You’ll find the kickoff of the articles in the July/August issue. Insurance Business America wants you to be a part of their work on this and have asked that you take a survey.
To do that click here: TAKE SURVEY
The publication does note that the future of the industry is very bright and decent wages are to be had for those going into the business. The Bureau of Labor Statistics says there will be over 200,000 jobs in insurance by 2022.
That report also highlights the industry’s problem:
Today the average age of insurance • professionals is 45.
Just 5% of millenniums — those born after • 1980 — are interested in an insurance career.
The publication writes about a College of America study on the advantages of working in six insurance positions and what is needed to get those jobs. Melissa Goldberg is the author of the study and she told Insurance Business, “We’re thinking through career paths that an
Photo Credit: Bureau of IIP, Portrait of a female executive
Insurance Business America is doing a
series of very interesting stories on the future of insurance. The series is titled Next Generation
and it looks at what it calls the “plight” of insurance agencies
everywhere.
May 2014 | Main Street Industry News |www.pianeia.com| 13
individual might take in the insurance industry, and it was very interesting to me to see that for all but one [of these six], we observed a fair amount of growth in demand. These kinds of occupations are not going away, but there is a large investment of money and time being made to make significant changes to them.”
Customer Service Representative (CSR) There were 289,000 jobs in 2012. By 2022 it is estimated the need will grow by 8%. The median wage today is $30,580.
Insurance Sales AgentIn 2012 there were 346,000 positions. By 2022 there will be an increase of 12% for agent jobs. The current median wage is $48,150.
Business AnalystThere were 42,300 of them in 2012. It is estimated there will be a 26.2% increase in those positions by 2022. The median wage at $79,680 is a good one.
Claims Adjuster, Examiner or Investigator2012 had 208,000 jobs. By 2022 there will be an increase of 6% in the need for these positions. The median wage in 2014 is $59,960.
Insurance underwriter95,300 were employed in this sector in 2012. The demand in 2022 will be up 7%. This is another excellent wage with the median income in 2014 being $62,870.
Actuary2012 had 13,000 of them. By 2022 the need will rise 22%. Today’s median wage is an outstanding $93,680. n
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Photo Credit: Peter Hayes, Businesswoman consulting a partner
Source: Insurance Business America
IBA’S NExT GENERATION OF INSURANCE PROFESSIONALS
Remember to take a minute to participate in the survey.
CLICK hERE
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Cyber Insurance GROWING INTEREST & URGENCY
These days cyber security is a hot topic for business and government.
The U.S. Government Accountability Office has waded into the issue. Its focus is federal agencies and the report Information Security, Agencies Need to Improve Cyber Incident Response Practices says federal agencies need to do a better job of making themselves secure.
Federal agencies — or at least 46 of them — saw a huge increase in incidents in 2013 compared to the three previous years. The report said the number of hits in 2013 was an astounding 46,160. “Cyber-based attacks on federal systems have become not only more numerous and diverse, but
also more damaging and disruptive,” the report said.
The GAO report was also critical of some of those agencies failing to document response activity. It said that’s what happened in 65% of the cases. “Agencies identified the scope of an incident in the majority of cases, but frequently did not demonstrate that they had determined the impact of an incident. In addition, agencies did not consistently demonstrate how they had handled other key activities, such as whether preventive actions to prevent the reoccurrence of an incident were taken.”
Threats — the GAO notes — was not just external. It mentions the leaking of information by people like ex-National Security
Administration contractor Edward Snowden. Those like Snowden — the report notes — will “continue to pose a persistent challenge, as trusted insiders with the intent to do harm can exploit their access to compromise vast amounts of sensitive and classified information as part of a personal ideology or at the direction of a foreign government.”
The GAO wants changes. And soon. “Having policies, plans, and procedures in place to guide agencies in responding to a cyber incident is critically important to minimizing loss and destruction, mitigating the weaknesses that have been exploited, and restoring information technology services,” the report concluded.
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And the Obama administration — as you remember — has made some strong suggestions on what businesses need to do to keep themselves secure. Apparently the federal government — this report says — is not following its own advice.
Here’s why getting better prepared for cyber attacks is imperative. A new study from Pricewaterhousecoopers (PwC), CSO magazine, the CERT Division of the Software Engineering Institute at Carnegie Mellon University and the U.S. Secret Service says the cyber security efforts of businesses and government don’t come close to being equal to what “cyber adversaries” can do.
The report is titled The 2014 U.S. State of Cybercrime Survey.
PwC’s David Burg said, “Cyber criminals evolve their tactics very rapidly, and the repercussions of cybercrime are overwhelming for any single organization to combat alone. It’s imperative that private and public organizations collaborate to combat cybercrime and gain intelligence about security threats and how to respond to them. A united response will prove to be an indispensable tool in advancing the state of cybersecurity.”
Of the 500 firms surveyed, the report found the average number of incidents in the last year was 135 per organization and 14% reported their monitory losses from cyber crime has increased.
Munich Re has a report that says businesses are getting the drift that they need to prepare for attacks and have some sort of insurance in place.
77% of mid-size to large • companies say they’ll have cyber insurance of some type in place within the next 12-months.
42% of risk managers • are going to increase their level of cyber insurance or will be purchasing it for the first time.
82% of risk managers • think the policies with the protection they need exists.
23% won’t be • purchasing cyber insurance because they don’t feel insurance has the coverage they need to make it a good purchase.
One of the big concerns of risk managers is the use of cloud software for the storage of data:
43% won’t use or won’t • increase their use of the cloud.
29% said hacking is their • main cloud concern.
25% worry about data •
theft from cloud storage.
22% worry about loss the • control of that data.
13% worry about losing • data they post on the cloud.
11% worry they can’t • access the data once they store it on the cloud.
Those same risk professionals are also taking steps to find ways to minimize cyber attack and loss risk:
42% conduct regular • network penetration tests.
16% are hiring security • personnel with expertise in cyber attack.
15% are doing security • patch updates.
12% are outsourcing • information technology.
9% are working on • policies and procedures.
7% are buying • insurance.
But does that insurance meet their needs? Maybe. Maybe not. Finding out has become a high priority for many businesses and corporations after eBay got hacked and lost personal information for 145-million of its customers.
That incident and that of Target during the holidays has agents, brokers and companies taking a long, hard look at cyber insurance and what it does and doesn’t do
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and what information they should pass onto their clients and to consumers.
Eduard Goodman heads up security for Identity Theft 911. He’s in the mood to give lessons. In an interview with Insurance Business America he said, “A lot of folks buy cyber and think they’ll be covered for a loss of personal and private data, but then they’re completely out of luck when it comes to having access to money for letters to be sent, lawyers to be hired, and remediation to be conducted. One of the big, gaping holes is that cyber policies are not built or equipped to deal with more common risks, which is actual personal data exposure.”
He said to really make sure a client is properly insured producers need to send them to specialists — like his firm — who know what to do. n
REGULATING INSURERS TOO BIG TO FAIL
PArT 1AIG and Prudential Financial have been deemed by the Dodd-Frank Act’s Financial Stability Oversight Council (FSOC) as systemically significant to the nation’s overall economic health.
In other words, they’re too-big-to-fail. And unless steps are made to protect the economy from them, if they fall, the whole economic system falls.
The too-big-to-fail designation means the Federal Reserve now will oversee the financial dealings of both insurers via a complex set of regulations. Many in the insurance business think the FSOC and the Fed are making decisions on insurers based on how banks operate. Insurance and banking — as you know — are light years apart when it comes to how they operate and how they should be regulated.
Apparently the Fed got the message — finally — and has appointed former Connecticut Insurance Commissioner Thomas Sullivan to a position to assist with the rollout of those regulations on these insurers and others if other insurance firms are found to be systemically important.
Officials at the Fed and within the FSOC hope this will silence critics who continue to point out that insurance and banking operate much like night and day.
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REGULATING INSURERS TOO BIG TO FAIL
PArT 2The now famous — at least in insurance circles — amendment to the Collins Amendment has been pushed through the U.S. Senate and is now in the House for consideration.
S. 2270 is the Insurance Capital Standards Clarification Act of 2014. It — along with the House’s version H.R. 4510 — tells the Federal Reserve to apply insurance-based financial standards to insurance companies deemed too-big-to-fail rather than bank standards.
The two are night and day different in regulatory needs.
Under the financial industry reforming Dodd-Frank Act the Fed is charged with overseeing any financial institution deemed to be
The National Association of Insurance Commissioners (NAIC) — who has been very critical of the FSOC and the Fed and the lack of an insurance voice in the regulatory decisions — is pleased. NAIC President Adam Hamm like Sullivan and says he’s a perfect fit for the rollout.
“Tom’s strong regulatory experience, comprehension of the insurance sector, and through understanding of America’s national system of state-based insurance regulation will be a tremendous asset to the board on both domestic and international issues,” Hamm said.
Critics of Dodd-Frank say what the FSOC has been doing, combined with the creation of the Federal Insurance Office (FIO) is an attack on states regulating insurance.
What also makes Sullivan appealing to insurers and insurance associations is his adamant support of state-based insurance regulation. A couple of years ago Sullivan was quoted as saying, “The insurance sector is critically important, but the business of insurance has not created the kinds of unrestrained and unregulated systemic risks that reform efforts seek to manage or prevent.” n
dangerous to the entire U.S. economy. The bill was hot-lined through the Senate. That means no senators objected so it got sent to the House without debate and having to be voted upon. n
Maine Senator Susan Collins
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Each year, a group of exceptional insurance professionals are chosen by The National Alliance for Insurance Education & Research to represent their states and compete to become the National Outstanding CSR of the Year. This prestigious award — regarded as the foremost national award of its kind — recognizes the contributions and commitment of those who serve clients within the insurance industry.
To qualify for the top state honor, the 2014 candidates submitted an essay on the following topic: “It is generally agreed that both new and renewal business are crucial to the success of an agency. Explain whether new business or renewal business is more important to the long-term value and profitability of an agency. Identify four ways a CSR, Account Executive, or Account Manager can have a meaningful impact on the new and/or renewal business written by their agency.”
Additionally, entrants must have demonstrated commendable service to their agencies, their industry, and their community. The only eligibility requirement for this award is that the candidate must be an insurance customer service representative, or have primary responsibility for insurance customer service duties.
Danielle Janecka who is the Senior Vice President of The National Alliance said, “The Outstanding CSR of the Year Award is an opportunity to connect with and recognize exceptional customer service representatives across the nation. Each of the state winners meets a new standard for personal and
National AllianceNames Annual Outstanding CSrs
professional excellence as demonstrated by their essay, contributions to their agencies and the industry, and their letters of recommendation. They clearly understand and appreciate the most precious of our assets — our customers!”
Each state winner receives a framed certificate and is eligible to compete for the national honor, which carries a $2,000 cash award, a gold and diamond pin, $1,000 cash award for the nominator, and a scholarship for the recipient’s employer to any program offered by The National Alliance.
Additionally, the name of the Outstanding CSR of the Year is inscribed on a sculpture permanently displayed at the national headquarters of The National Alliance for Insurance Education & Research in Austin, Texas. n
Winner from the PIA Nebraska/Iowa States
IowaRebecca J. Plagge,
CISR, CRISFirst Gabrielson Agency
OUTSTANDING
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PIA National on NFIP rate Changes Cover Memo:U.S. Department of Homeland Security500 C Street, SW | Washington, DC 20472May 29, 2014
The purpose of this memorandum is to provide notification of program rate changes the NFIP will implement effective October 1, 2014. The October 1, 2014 rate changes revise premium rate tables to comply with Section 5 of the Homeowner Flood Insurance Affordability Act of 2014 (HFIAA) Pub. Law No. 113-89 (March 21, 2014), which prohibits FEMA from increasing premiums more than 15 percent a year within a single risk class and not more than 18 percent for an individual policy. In every case, the attached rates are the same or lower than the October 1, 2013 premium rates. The attached HFIAA Section 5 premium rates are to be used for all new and renewal policies effective on or after October 1, 2014.
**FEMA will also use these rate tables to calculate premium refunds required under Section 3 of HFIAA. Additionally, to the extent a policyholder was charged a premium in excess of the premium increase caps mandated under Section 5 of HFIAA, FEMA will use these rate tables to calculate the refund. FEMA will continue consulting with WYO companies to finalize refund guidance for facilitating refunds under Sections 3 and 5 of HFIAA. The guidance will include underwriting and accounting guidelines, modifications to the Transaction Record Reporting and Processing (TRRP) Plan, the accounting exhibits, and edit specifications document. FEMA anticipates finalizing its guidance by July 2014 with refunds beginning in fall 2014.
For comments or questions, please contact Joe Cecil at (202) 212-2067.
[End of FEMA memo].
On May 16, 2014, PIA issued a Special Edition Newsline, with information for the National Flood Insurance Program (NFIP) that we’ve been sharing over the last two months to that point. n
Access that article on the link below: Click here
The Federal Emergency Management Agency (FEMA) issued W-14027, Revision to Compliance Date for Large-Font Policy Documents on 5/30/14, which revises and further delays the compliance date for large-font policy documents.
Most importantly, FEMA is sending new flood insurance premium rate sheets to insurers that reflect the provisions of the 2014 Homeowner Flood Insurance Affordability Act.
According to a memo sent to the Write Your Own (WYO) companies — reproduced here — the new premiums show rate increases in each risk class, effective October 1, 2014.
The new rates are included in Bulletin w-14026:
October 1, 2014 Program Changes – Section 5 of the Homeowner Flood Insurance Affordability Act of 2014 (HR 3370); issued 5/29/14.
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The American dream is famous the world over. For decades was why immigrants came to this nation’s shores. It’s also why today many pay huge fees and go through tremendous expense to get here. And then there are those who suffer enormous physical hardships to come here illegally.
No country on Earth has more appeal and more to offer. Worldwide it is known that opportunity exists and that hard work and perseverance can lead to a better life. Resources are available for anyone to use to achieve their dreams.
But has that dream — at least for Americans — changed?
According to a new CNNMoney poll it has. And it has changed dramatically. A big percentage of Americans now perceive the American dream as impossible to attain.
here are the stats:Question: Do you think you are better off financially or worse off financially than you parents were when they were your age?
Question: Looking to the future, do you think most children in this country will grow up to be better off or worse off than their parents?
Question: Do you agree or disagree — the American dream has become impossible for most people to achieve.
Goodbye to the American Dream?
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In contrast:
Pew Charitable Trusts’ Economic Mobility Project Director Erin Currier helped with the survey. She said, “The pessimism is reflective of the financial realities a lot of families are facing. They are treading water, but their income is not translating into solid financial security,” she said.
Those thinking the dream is the most unattainable is the 18 to 34 age group. They have suffered more than other groups since the economy took a dive in the Great Recession. The survey reflects that and has 63% of them feeling the American dream is quite impossible. n
Main Street Industry News Poll: What do you think? Is the American dream over? Email your opinions to [email protected]
Question: Do you think you are better off financially or worse off financially than you parents were when they were your age?
Question: Looking to the future, do you think most children in this country will grow up to be better off or worse off than their parents?
Question: Do you agree or disagree — the American dream has become impossible for most people to achieve.
Better 54% Same 4%
Worse 41% No Opinion 1% Better Same
Worse No Opinion
Better Same
Worse No Opinion
Better 34% Same 2%
Worse 63% No Opinion 1%
Agree - May 2014 59%
Disagree - May 2014 40%
Agree - October 2006 54%
Disagree - October 2006 45%
Agree - 2014 Disagree - 2014
Photo Credit: Brian Wilson, Young Patriot
May 2014 | Main Street Industry News | www.pianeia.com | 22
PIA National has formed a groundbreaking partnership with floodbroker.com. Through PIA’s exclusive partnership with Floodbroker your clients and prospects will be able to learn about their flood risks and request a quote for flood insurance.
It’s a huge change in how you’ve been able to access such insurance in the past. Floodbroker has automated the process to obtain a flood insurance quote through the National Flood Insurance Program (NFIP). This technology is available to participating PIA member agents through their very own agency-branded, flood insurance microsites.
You direct your clients and prospective insureds to your microsite where they can learn what flood zone they are in and request a flood insurance quote. After answering a few simple questions the quote is emailed to you, and you complete the sale offline using your regular flood insurance carrier. PIA National President John G. Lee said, “Over the past few years many communities throughout America have been devastated by floods, yet many still do not realize that typical homeowners and commercial insurance policies do not protect them against this type of natural disaster. PIA wants to educate property owners and make it as easy as possible for agents to sell flood insurance so that more Americans will purchase this important coverage.” Floodbroker’s flood zone database tracks with the Federal Emergency Management Agency’s digital flood insurance rate maps (DFIRMs). While many people using an
PIA Partners with Floodbroker.comFlood Insurance Sales Easier
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agency’s Floodbroker microsite can receive an NFIP quote simply by answering the online questions, there are communities around the country that are not yet digitally mapped. In those situations the Floodbroker system will not be able to generate the final quote.
If that happens — or if all of the form’s questions cannot be answered — the individual completing the online form can still submit what information they have onto the form and send it. When you receive it you can get back to them.
Evan Spindelman is the president of floodbroker.com. He said, “As an independent insurance agent myself, I have long noted the lack of flood insurance sales by many agents. Floodbroker can help agents tap the tremendous flood sales potential that lies within their current book of business, rounding accounts and improving their agency’s retention rate. Promoting an agency’s Floodbroker website may also potentially reduce an agency’s errors and omissions exposure when it comes to flood insurance.” PIA National’s Vice President of Marketing Alexi Papandon said, “Many property owners believe that they could never be struck by a flood because they don’t live in a flood prone area. What they don’t realize is that 20% of flood insurance claims originate in low to moderate risk areas.” The association’s president Mike Becker agrees. “Floodbroker gives PIA members an excellent opportunity to protect property owners in their communities while generating substantial revenue for their agencies. Plus it gives PIA members a real point of differentiation as this tool is not available to other independent agents, captive agents or direct writers.” For more information about PIA’s program with floodbroker.com, please visit PIA’s website at www.pianet.com/floodbroker. n
May 2014 | Main Street Industry News |www.pianeia.com| 23
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The Centers for Medicare and Medicaid Services (CMS) reminds you — agents and brokers — that registration for the 2015 plan year in the Affordable Care Act’s Federally-facilitated Marketplace (FFM) will be available beginning in early July 2014. At that time agents and brokers wanting to participate may begin completing their FFM registration requirements for the 2015 plan year.
To participate you must complete certain registration requirements on an annual basis.
For more information on FFM agent and broker registration requirements for the 2015 plan year, please see a new resource CMS has posted: Registering to Participate in the Federally-facilitated Marketplace for the 2015 Plan Year: What Agents and Brokers Need to Know.
In addition, please click here to visit this page. There you will find the new and updated resources specifically tailored to agents and brokers. n
Aflack’s Workforces Report has unveiled some chilling facts. It measures steps small business employers have made to comply with the Affordable Care Act and whether they have been successful. The report also looks at their employees.
What makes this important is most of you work with small and medium-size businesses. Here’s the gist:
27% of employers with 50 employees • or less say they really understand their responsibility in the Affordable Care Act.
The report checked in with close to 2,000 decision-makers for employee benefits and with 5,000 employees. It came out as a mixed-bag of news and it starts with learning the goal of a huge number of employers these days is managing the cost of health insurance.
These are what employers with less than 50 workers have done in the past year:
56% raised co-pay and premium sharing • for employees.
39% hired a private contractor or • consultant(s) to sort it all out for them.
21% moved full-time employees to part-• time employee status.
22% dropped or reduced employee • benefits.
19% migrated to high-deductible plans • and accompanying HSAs.
ObamaCareObamaCare Marketplace Registration Coming Soon
Small Business & ObamaCare
May 2014 | Main Street Industry News | www.pianeia.com | 24
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When looking at employees, concerns grow.
Most are very aware that they are going to have to take on more of the cost of health care. However, they view the health care system and the health insurance system as a giant morass. They don’t have the know enough about the topic and don’t have the time to manage things effectively.
The report says 51% “prefer not to have more control over their health care expenses because they don’t have the time or knowledge to effectively manage them” and they do not have the time “needed to evaluate the quality of health care providers and the appropriateness of proposed treatment or medication needs.”
And employees say they don’t have any idea of the true cost of those services. n
The Congressional Budget Office (CBO) is non-partisan. It recently took a look at the Affordable Care Act’s silver plan. That’s the mid-range option between the “inexpensive” bronze plan and the higher priced gold and platinum plans.
The CBO doesn’t think the cost of the silver plan is going to rise that much in 2015:
Predictions are for a rise of 2.6% to $3,900.•
The Plan cost $3,800 in 2014.•
By 2016 the CBO says the silver plan will cost • $4,400 — 15% lower than the 2009 forecast.
In 2024 the cost will be $6,900.•
Reaction to the CBO prediction was immediate. Some say it’s out of touch with reality. Reuters and other news outlets are reporting
We all know the law. If you don’t have health insurance and didn’t register on an exchange for health insurance, or if your employer does not provide you with such insurance and you don’t go out and purchase some, you pay a fine.
Several million people ignored the law.
The Congressional Budget Office — that is non-partisan — says just 4-million of the millions who didn’t get insurance are going to pay the Affordable Care Act’s financial penalty. That’s one-third less than original government estimates.
Why?
The Obama administration has created a bunch of exemptions. They include foreclosure on a home, bankruptcy and a death in the family and more. That means 2-million fewer will be paying and the government will take in $3 billion less than originally estimated. n
The AffordableCare Act’s Silver Plan2.6% rise in 2015
The ObamaCare Penalty4-Million to Pay
insurers predicting double-digit hikes for the ObamaCare exchanges in 2015. Optimists are saying we can look for 6% to 9% rises and higher rates for states where enrollment in the exchanges has not been that good.
The Obama administration disagrees with critics. It says the CBO report is proof that the Affordable Care Act is working.
To back its claim of very low price increases, the CBO says lower growth in medical costs for the federal government and in the private sector, and adding healthier enrollees to the exchanges in 2015 will keep health insurance rates down.
The CBO is predicting 13 million enrollees in ObamaCare for 2015 and as many as 25 million by 2017. n
The Professional Insurance Agents of Nebraska Iowa held their 65th Annual Convention on June 3rd and 4th, 2014. The convention was held at the Lied Lodge and Conference Center in Nebraska City with the theme of “Branch Out with PIA.” The convention began on June 3rd with a golf outing at Arbor Links Golf Course in Nebraska City and continued with a trade fair at the Lied Lodge. At the trade fair, Exhibitors had the opportunity to network with PIA members and were recognized for their contributions along with other PIA event sponsors and Star Partners. Following the trade fair, the golf prizes and trophies were awarded to the day’s winners. The evening entertainment, sponsored by Farmers Mutual Insurance Company of Nebraska, began at 7:00pm with a special presentation by UNL Basketball Coach, Tim Miles. Not dampened by the harsh storms, it was a very memorable evening for all convention participants.
On June 4th, the day’s festivities began at 7:00 am with a breakfast to honor PIA Past-Presidents. This event was followed by an Education class entitled “How to Turn your Technical Knowledge into Dollars.” The featured speaker was Becky Lathrop, CIC, CPIA from Lake Worth, FL, recently voted the 2012 AIMS Society/CPIA Instructor of the Year. At 12:15pm, the Achiever’s Luncheon began and awards were presented to Company of the Year, Agent of the Year and Marketing Rep of the Year. The $1,000 Leadership Scholarship was awarded as were the designation achievements of Nebraska CPSRs and CPIAs. PIA President Amy Rademacher, CIC, CPIA, CPSR, of Loop Agency, was recognized for her contributions to PIA and was honored with a plaque noting her accomplishments. New PIA Board members were installed and the new PIA President, Joe Bob Atkins, CIC, CPIA, AAI, AIS, of Arnold Insurance gave his inaugural address to conclude the convention events.
Professional Insurance AgentsNE IA Award Winners for 2014All Awards were presented during the Achiever’s Luncheon on 6/4/2014 as part of PIA’s 65th Annual Convention in Nebraska City, NE.
Company of the Year: Farmers Mutual Insurance Company of Nebraska.
This is Farmers Mutual’s tenth win since 1995; they most recently celebrated this achievement in 2013. Les Hileman and Andy Kraus accepted the award on behalf of their company and Les was also recognized with a certificate for his many years of service to the PIA. Congratulations to Farmers Mutual and Les!
65th Annual Convention
CoachTim Miles
Arbor Links Golf Course in Nebraska City
Marketing Rep of the Year: Julie Richt with Liberty Mutual Insurance
Julie has been a Commercial Lines Territory Manager with Liberty Mutual in Omaha, NE since March of 2011. She works with a select group of agencies throughout Nebraska offering an array of insureds comprehensive coverage for their business risk exposures. This is her first time winning the Marketing Rep of the Year award. Congratulations Julie!
Agent of the Year: Charles Micek with Town & Country Insurance Agency.
Chuck joined the Town & Country Insurance Agency in Pierce, NE in 1985. He is a owner/producer and is licensed in personal,
Amy Rademacher presented Andy Kraus and Les Hileman from Farmers Mutual Ins Co of NE – PIA Company of the Year
Joe Bob Atkins presented Julie Richt with Liberty Mutual Insurance – PIA Marketing Rep of the Year
commercial, crop, life, health and securities. He is a Past President of the PIA, having served from 1998-1999. This is the second time that he has won the Agent of the Year Award; he previously won in 1999. Congratulations Chuck!
PIA Leadership Scholarship: Krayton ConellKrayton is a graduate of Centennial High School in Utica, NE. She plans to attend the University of Nebraska at Kearney and major in Business Administration with an emphasis in Accounting. She then hopes to achieve her Master’s Degree and CPA Designation, ultimately starting her own accounting firm. She is the granddaughter of PIA Member June Klute from Otoupal Insurance in York, NE. Congratulations Krayton!
2013 PIA Agent of the Year Steve Plummer presenting Chuck Micek with 2014 PIA Agent of the Year
Cap Peterson presents - 2014 PIA Leadership Scholarship Winner - Krayton Conell
Cap Peterson presents - 2014 PIA Leadership Scholarship Winner - Krayton Conell
PIA President Joe Bob Atkins presented Amy Rademacher with a plaque noting her as PIA Immediate Past President
PIA NE IA National Director & PIA National Vice President/Treasurer Robert Hansen Jr., CPIA, LUTCF updates members
on local and national events.
Fun times atArbor Links Golf
Course
UNL Basketball Coach, Tim Miles
65th Annual Convention
Past President Mike Smolsky presenting Immediate Past
President Amy Rademacher with her red past president shirt.
Annual PastPresident Breakfast
Register Online for PIA NE IA education:
Click here or
call (402) 392-1611
EducAtION
May 2014 | Main Street Industry News | www.pianeia.com | 36
Date Event State TimeJune 3, 2014 CPIA 2: Implement for Success Omaha Omaha Marriott Hotel
June 12, 2014 CISR: Insuring Commercial PropertyWest Des Moines
LaMair - Mulock - Condon Insurance (LMC)
June 16 - August 1, 2014 MERG: New Agency Employee Orientation Online Online Course
June 16 - August 8, 2014 MERG: Commercial Lines Coverage Basics Online Online Course
June 16 - July 25, 2014MERG: Delivering Quality Service (to the Customer and the Employer)
Online Online Course
June 18 - 20, 2014 CIC: Commercial Property InstituteCedar Rapids
DoubleTree Hilton
June 26, 2014 CISR: Agency Operations Marion Kirkwood Training Center
July 9 - 11, 2014 CIC: Commercial Casualty Institute Omaha Omaha Marriott Hotel
July 10, 2014 CISR: Insuring Personal Auto ExposuresDes Moines
Hilton Garden Inn Des Moines/Urbandale
July 17, 2014 CISR: Personal Lines Miscellaneous Davenport Saint Ambrose University
July 21 - August 29, 2014 MERG: Personal Lines Coverage Basics Online Online Course
July 21 - September 5, 2014 MERG: New Agency Employee Orientation Online Online Course
July 22, 2014 CPSR: Residential Property Columbus Dusters
July 30 - August 1, 2014 CIC: Personal Lines InstituteWest Des Moines
Holiday Inn Hotel & Suites
August 6, 2014 CISR: Commercial Casualty 2 Marion Kirkwood Training Center
August 12, 2014 CPIA 2: Implement for SuccessDes Moines
Hilton Garden Inn Des Moines/Urbandale
August 13, 2014 CPIA 3: Sustain Success Omaha Omaha Marriott Hotel
August 18 - October 10, 2014 MERG: Commercial Lines Coverage Basics Online Online Course
August 18 - October 3, 2014 MERG: New Agency Employee Orientation Online Online Course
August 21, 2014CISR: William T. Hold: Advanced Learning Seminar
Des Moines
Hilton Garden Inn Des Moines/Urbandale
For information and to register Click Hereor call (402) 392-1611.
upcomingEvents Calendar 2014
piA Ne iA eveNTS
September 5 - October 31, 2014
MERG: New Agency Employee Orientation Online Online Course
September 10 - 12, 2014 CIC: Life & Health Institute LincolnHoliday Inn Lincoln - Downtown
September 10, 2014 CISR: Insuring Personal Residential PropertyDes Moines
Hilton Garden Inn Des Moines/Urbandale
September 15 - October 24, 2014 MERG: Personal Lines Coverage Basics Online Online Course
September 17 - 19, 2014 CIC: Commercial Casualty InstituteCedar Rapids
DoubleTree Hilton
September 24, 2014 CISR: Agency Operations Davenport Saint Ambrose University
September 25, 2014 CISR: Personal Lines Miscellaneous Marion Kirkwood Training Center
October 9, 2014 CISR: Commercial Casualty 2Des Moines
Hilton Garden Inn Des Moines/Urbandale
October 15 - 17, 2014 CIC: Agency Management Institute Omaha Omaha Marriott Hotel
October 20 - November 28, 2014MERG: Delivering Quality Service (to the Customer and the Employer)
Online Online Course
October 20 - December 12, 2014 MERG: Commercial Lines Coverage Basics Online Online Course
October 20 - December 5, 2014 MERG: New Agency Employee Orientation Online Online Course
October 23, 2014 CISR: Dynamics of Service Marion Kirkwood Training Center
October 29, 2014 CISR: Insuring Personal Residential Property Davenport Saint Ambrose University
November 5, 2014 CISR: Insuring Commercial PropertyWest Des Moines
LaMair - Mulock - Condon Insurance (LMC)
November 6, 2014 CISR: Commercial Casualty 1 Marion Kirkwood Training Center
November 11, 2014 CPIA 3: Sustain SuccessDes Moines
Hilton Garden Inn Des Moines/Urbandale
November 12 - 14, 2014 CIC: Life & Health InstituteWest Des Moines
Holiday Inn Hotel & Suites
November 17 - December 26, 2014
MERG: Personal Lines Coverage Basics Online Online Course
November 17 - January 2, 2015 MERG: New Agency Employee Orientation Online Online Course
November 18, 2014 CPSR: Commercial Casualty Omaha Omaha Marriott Hotel
piA Ne iA eveNTS
Post a classified ad!Your ad will stand out! Main Street Industry News is issued electronicallyto over 8,000 Professional Insurance Agents throughout NE & IA, PIA state and national associations and other organizations that provide products or services to insurance agencies.
To advertise contact PIA of Nebraska and Iowa – Executive Director, Cathy Klasi at (402) 392-1611.
The policy or its provisions may vary or be unavailable in some states. The policy has exclusions and limitations which may aff ect any benefi ts payable.Underwritten by Unimerica Insurance Company, Association Administrative Address, P.O. Box 17828, Portland, ME 04112-8828, under Policy Form ADD-6001-A (UIC).
Insurance Program Administered by Lockton Risk Services.
Accidents can occur anytime, anywhere. With the PIA Trust Accidental Death & Dismemberment Insurance Plan, you and your qualifi ed dependents can be covered in case of an accident 24 hours a day, anywhere in the world -- at home, at work, or on vacation.
You Can’t Always Prevent An Accident...But You Can Prepare For One With The PIA Trust
Accidental Death andDismemberment Insurance Plan
As a PIA Member* serving
Main Street America, you
and your employees** have
access to a high-quality,
competitively priced AD&D
plan through the PIA Services
Group Insurance Fund.
AD&D COVERAGE DESIGNEDWITH LOCAL AGENTS IN MIND
PIA SERVICES GROUPINSURANCE FUND
For more information about the PIA Trust Accidental Death & Dismemberment Insurance Plan, please
contact your local PIA Affi liate or call the Plan Administrator at (800) 336-4759.
Additional information is also availableon-line at www.piatrust.com.
* PIA National membership, when required, must be current at all times** No minimum participation required