© Copyright May/June 2012 Longevity Insurance— Agencies: To Text Put Your Life Insurance It’s on the Table or Not to Text? License to Work Page 15 Page 23 Page 30 May 28, 2012 Memorial Day IIABAZ Office Closed I was very proud to be part of “The Big ‘I’ Day on Capitol Hill,” which brought together June 13-15, 2012 more than 1,000 independent agents from around the country to Capitol Hill offices in CIC Life & Health Institute Washington, D.C., to lobby members of the House, Senate and their staffs. The annual Embassy Suites—North Phoenix conference took place Wednesday, April 25th through Friday, April 27th. June 26, 2012 CISR Dynamics of Service Seminar As this year’s President, I was ITEC Classroom—Phoenix honored to be one of the group of IIABAZ agents who traveled to July 4, 2012 Independence Day Washington D.C. to meet with the IIABAZ Office Closed Arizona Congressional delegation and lobby on behalf the most July 13, 2012 pressing issues for our agent IIABAZ Board Meeting members. ITEC Classroom—Phoenix The Arizona members who were in attendance from Arizona were insurers limit what they spend on myself, Mitch Childers of D.M. Lovitt administrative and marketing costs including Insurance, Tim Downey of AmWins payments to agencies. Since implementation Brokerage, Steve Goble of The of the MLR began in January, health Mahoney Group, Brett Rustand of Crest From L-R: Tim Downey, Carol Wede, Jackie insurance producers have said their Insurance, Wayne Syrek, Jr. of The Adams Wanta, Mitch Childers, AZ Congressman commissions have been cut. It is vital we Agency, and Scott Wede of the Surplus Jeff Flake, Scott Wede, Wayne Syrek, Jr., preserve consumer access to agents in Lines Association of Arizona. Brett Rustand, and Steve Goble. health insurance by excluding agent compensation from the Medical Loss Ratio Our members addressed issues important to the insurance industry such as the federal spending caps. flood insurance program which is set to expire at the end of May. In the last couple years this program has seen many short term extensions and even a couple lapses in To accomplish this H.R. 1206, S. 2288, and coverage. A lapse in the NFIP has a real effect on the insurance industry when property similar legislation, S. 2068, the Access to owners are unable to complete their mortgage transactions since Federal law requires Independent Health Insurance Advisors Act, that homes in designated flood-risk areas have flood insurance before a mortgage can be seek to "clarify" that producer compensation completed. Because the NFIP is effectively the only flood insurance available in the would not be considered part of MLR ratio. United States, a lapse in the program means home sales cannot close in designated flood This provision limits administrative costs in areas. health-insurance premiums to 15 percent of premiums for large insurance groups and 20 Our goal is to reform the national flood program so it has long-term solvency by percent for small groups. We stressed that reducing subsidies, dealing with repetitive loss properties and modernizing the commissions should not count toward these coverages. According to statistics on the program website, NFIP has 5.59 million administrative costs. policies in force nationwide, with a total insured value of $1.267 trillion, and from 2006 to 2010 the NFIP paid out $6.21 billion in losses. H.R. 1309 would extend the NFIP for Our members also discussed affects the five years and passed the House last year. S. 1940 has not been brought to the floor for down economy is having on independent a vote yet. If nothing is done, the NFIP will expire yet again on May 31, 2012 one day agents who write policies for businesses, before hurricane season begins. homes, and cars in a soft market where people are not buying cars, starting Another critical issue we discussed is exempting agent/broker commissions from the Medical Loss Ratio (MLR) provision. The new healthcare law mandates that health Continued on top of page 4 © Copyright Independent Insurance Agents and Brokers of Arizona, Inc.’s News & Views May / June 2012 Edition Page TECHNICAL HELP You may have seen the car with a camera mounted on its roof driving around your town shooting panoramic pictures for Google Earth. Now you can take your own panoramic pictures and video with Dot by Kogeto, an attachment that clicks directly to your iPhone! It is simple to use and makes creative and memorable videos all at a reasonable price. Check out Kogeto's Dot for sale at www.komando.com and see actual sample videos at www.kogeto.com. Another great gadget is the Foscam FI8910W. This little camera is packed with features including wired or wireless setup, remote internet monitoring, pan and tilt, microphone and speaker, motion detection and the list goes on! It works perfect for a baby/elderly parent monitor, home security, etc. Learn more about the Foscam FI8910W at www.komando.com. INSIDE THIS EDITION Big “I” Agents Lobby In D.C. Cover Arizona Agent Sentenced to Prison for Diverting Premiums Page 5 Big “I” Praises Senate Introduction of NARAB II Page 5 Accidental Discharge Versus Sewer Backup Page 6 Loyalty to Independent Agents Remains Strong Page 8 Political Analysts Barnes and Kondracke Debate Before Big “I” Page 12 Best Practices Answers Agency Questions Page 13 Regulation Proposal Creates New Retirement Planning Options Page 15 Rep. Tiberi Discusses Taxes at Big “I” Conference Page 18 Local Insurance Community Leader Recognized Page 18 The Importance of Online Marketing Page 19 Superior Insurance Coverage for Serious Collectors Page 19 Lawmakers Address Big “I” Agents Page 20 The Reality of Texting for Insurance Agencies Page 23 Dissection of Expectations in the Agency Environment Page 24 5 Keys to Effective Time Management Page 26 Big “I” Testifies Before Congress on National Flood Insurance Page 29 Breathing Life Into a P&C Agency Page 30 Advertisements Acuity Insurance Company Page 7 American Summit Insurance Company Page 11 AmTrust North America Page 14 Berkshire Hathaway Homestate Companies Page 17 The E&O Department Page 32 Freedom National Insurance Services Page 27 Guard Insurance Group Page 31 Hallmark Insurance Company—Personal Lines Page 3 Kowalski Construction, Inc. Page 2 MexiPass International Insurance Services Page 2 Pekin Insurance Company Page 9 Preferred Property Program Page 4 Risk Placement Services, Inc. Page 22 © Copyright Independent Insurance Agents and Brokers of Arizona, Inc.’s News & Views May / June 2012 Edition Page 2 © Copyright Independent Insurance Agents and Brokers of Arizona, Inc.’s News & Views May / June 2012 Edition Page 3 continued from front page passed in the U.S. House. S. 2342 has just been introduced in the Senate. Both bills would save agents time by creating a one-stop-shop for agent licensing. Finally we emphasized the goal of keeping insurance regulation solely at the state level by ensuring that the newly created Federal Insurance Office does not exceed its limited non-regulatory mandate in the Dodd-Frank law was voiced. “The Big ‘I’ Day on Capitol Hill” was a great demonstration of how Independent agents and From L-R: Tim Downey, Jackie Wanta, brokers are powerful and Wayne Syrek, Jr., AZ Congressman Edward Pastor, Mitch Childers, and Brett Rustand. influential constituents. We are civic and business businesses or building houses. They also addressed the upcoming leaders of our communities tax changes with their legislators and how burdensome taxes to that often contribute to small businesses will affect independent agents who own their own our representatives’ business, since the majority of our members are organized as political campaigns. pass-through entities. Authors: Jackie Wanta, CIC, CPCU, ARM, CRIS—President We also brought up the importance of streamlining the process of of the Independent Insurance Agents and Brokers, Inc. with licensing nonresident agents to make it easier to write insurance in assistance from Russell Reiten—Government Affairs, other states was also presented. H. R. 1112, NARAB II, has already Independent Insurance Agents and Brokers of Arizona, Inc. © Copyright Independent Insurance Agents and Brokers of Arizona, Inc.’s News & Views May / June 2012 Edition Page 4 Attorney General Tom Horne recently announced that 33 "Arizonans need to be confident that their insurance year-old Jeffery Ray Capshaw of Flagstaff was sentenced in providers operate with integrity and that the regulatory Maricopa County Superior Court to 3 years in prison for system protects consumers," Horne said. "The individual Forgery, a class 4 felony as a result of a plea agreement with sentenced in this case violated that trust for his own the State. Capshaw was indicted for Insurance Fraud, Theft personal gain and was fortunately brought to justice. I am and Forgery for collecting payments for insurance premiums very pleased with the efforts of the Department of after his insurance license had been revoked and providing a Insurance working with my office to bring this forged certificate of insurance. prosecution to a close." Capshaw's insurance license was revoked by the Arizona Capshaw was also ordered to pay total restitution of Department of Insurance on March 8, 2011. Between April $29,838.99 to Dawn Mickelson of Mickelson 10, 2011 and June 14, 2011, after Capshaw lost his license, he Jeffrey Capshaw Construction, Ynez Cross of Helping Hearts, John Merell of continued to collect premiums from small business owners Golden Shore General Store, and Christine Wijcik. but did not forward the money to insurance companies so no policies were ever issued. In one instance, when asked by the This matter was handled by Assistant business owner for a copy of their policy, Capshaw created a Attorney General Beverly Rudnick.