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Insurance Community University www.InsuranceCommunityUniversity.com1
Insurance Proposals and Submissions
The webinar will begin shortly.
There is no audio at this time.
This presentation is being recorded for your viewing pleasure at a future date.
The attendance and proctor forms are available under ‘Materials’ in the Webinar’s Console to the right.
The PowerPoint presentation is also available under ‘Materials’.
You will receive the course number for your state near the end of class.
Use the ‘chat’ window for questions on the content.
100% Participation in Polling Questions is required to receive credit for this class. Even if you do not intend to receive credit, please participate in the polls.
Insurance Community University www.InsuranceCommunityUniversity.com
Welcome to your Insurance Community University
• All of you are currently on mute – Un-mute your own system– Telephone Option
• Select Telephone on your screen• Dial in the PIN number so that your number becomes active
– Microphone and/or Speaker Option• You can use this option if you have a headset that you use with
your computer
Audio
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Insurance Community University www.InsuranceCommunityUniversity.com
Participation & Chat Window• You will receive information from the monitor via the
‘Chat’ window. – Please locate window in the control panel
• Q & A is welcomed during the presentation and at the end of the presentation
• You will find the question box on your control panel– Write your question in that box – and send it to the presenter/organizer
• The presenter will take those• questions in the order submitted
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Insurance Community University www.InsuranceCommunityUniversity.com
DOI Requirements• When you see a slide with the hand up
symbol, touch the “hand” icon on your control panel– Click ONCE only
• If you do not raise your hand, the monitor will be in contact with you in the chat box
• If you are in a group, the designated proctor is responsible to make certain you are all in attendance at all times
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= Hand is down
Insurance Community University www.InsuranceCommunityUniversity.com
Polling• Throughout the class we will be
conducting periodic polls • We need 100% participation on the polls• The polls are intended to check
participation but also to create discussion topics throughout the presentation
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Insurance Community University www.InsuranceCommunityUniversity.com
Forms To Complete for CE• After class ends
– Return attendance form– Proctors – return your form to email
address• Email address is in chat window or in
email sent to you today
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Insurance Community University www.InsuranceCommunityUniversity.com
DOI Requirements• We will file your hours with the DOI
after the completion of this webinar and we have received the attendance form.
• You have 48 hours to return the form• You will be sent a Certificate of
Attendance/Completion by email. Please retain this for your records for five years.
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Insurance Community University www.InsuranceCommunityUniversity.com
Internet Disruption• If the presenter looses internet
connection STAY ON THE LINE• The administrators will communicate
with you
Insurance Community University www.InsuranceCommunityUniversity.com
Internet Failure
• If the internet fails and all participants are kicked off line by Go To Training or other source then the seminar will be terminated
• You will receive instructions by email as to how we will proceed
• This is a precautionary notice, only
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Insurance Community University www.InsuranceCommunityUniversity.com
This class is being recorded
• Available in the University• Does NOT qualify for CE
Insurance Community University www.InsuranceCommunityUniversity.com
Test YOUR Knowledge
• After class you will link to a Quizflash on today’s topic in your follow up email
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Insurance Community University www.InsuranceCommunityUniversity.com
DisclaimerInsurance forms and endorsements vary based on insurance company; changes in edition dates; regulations; court decisions;
and state jurisdiction. This instructional material provided by Insight Insurance Consulting and the Insurance Community
Center is intended as a general guideline and any interpretations provided by Insight, Insurance Community or presenters do not modify or revise insurance policy language. When ISO language is included in the materials, all ISO content is protected by the ISO copyright. All parties to this presentation and creation of
materials assume neither liability nor responsibility to any person or business with respect to any loss that is alleged to be
caused directly or indirectly as a result of the instructional materials provided.
Copyright 2010 – 2013 All Rights Reservedwww.insurancecommunitycenter.com
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Insurance Community University www.InsuranceCommunityUniversity.com
Proposals and Submissions
Your Presenters Today
Casey Roberts, CIC, AFIS, ACSRPresident, Laurus Insurance Consultingwww.laurusinsuranceconsulting.comcasey@laurusinsuranceconsulting.com
Insurance Community University www.InsuranceCommunityUniversity.com
What This Course Will Cover
• Submissions—The Basics• The Process
• Account Review—Identifying Exposures
• Applications/Marketing• Proposals • Issuance of Policy and Review
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Insurance Community University www.InsuranceCommunityUniversity.com
Polling Question #1
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Submissions The BasicsStandard of Care
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Based on Regulations
To the Insurance Customer
To the Insurance Company
Insurance Community University www.InsuranceCommunityUniversity.com
Basics of Standard of CareBased on Regulations• Compliance with such issues as GLBA, Privacy Acts,
authority as an agent/broker
To the Insurance Company• That the submission qualifies for the insurance carrier• That you are honest and accurate
To the Insurance Customer• Ordinary care to obtain the coverages they have requested
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Standard of Care and Submissions• The submission for insurance is the
culmination of several steps in a process– Acquiring the customer– Identifying exposures to risk that can be
transferred to insurance– Gathering all the necessary information to
provide the appropriate insurance AND to understand the transfers of risk the insured has assumed OR transferred
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The ProcessAccount Review
Identifying Exposures
Insurance Community University www.InsuranceCommunityUniversity.com
Account Size May Dictate Process
• Whether small or large premium, all deserve and expect a certain level care, due diligence and service
• Agent/broker may differentiate based on size of account: small, mid, large– This will differ by agency/brokerage– Procedure manual should specify procedures– All staff should follow
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Polling Question #2
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Account Size May Dictate Process
SmallLimited Marketing
EligibilityApplicationCover Letter
Mid SizeAccount Review
Coverage AnalysisMarketing
ProposalCoverage Summary
Supporting Documents
LargeMore DetailedMore OptionsMore Policies
Risk SurveyIndependent
Inspections, etc
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The Case Of The “Small Account”• The insured had a small woodworking
shop insured with an agent as a “single shot account” (No supporting business)
• The account was an accommodation because the agency handled the son’s account which was a sizable premium
• The agent spent a lot of time with the son, reviewing values, going over the renewals
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The Case Of The “Small Account”• With the woodworking account the
agent just kept renewing it year after year “as is” for THIRTY YEARS
• The woodworker burned to the ground• The policy had been issued on a basic
fire form without any inflation guard• Result???????
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Basic Account Review
Who, What, Where
Locations / OperationsGross Sales/Payroll
Current InsuranceMissing Coverages
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Larger Account Review
Survey Risk ExposuresCoverage Checklists
LocationsOperations
Gross Sales/Payroll
Flow Charts Of All Facets
Of Operations
Web Search and
Review
Review of all
supporting contracts
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Survey Risk Exposures & Coverage Checklists • Physical Inspection
– A Must– Many carriers require for large or small– Survey checklist– Take experts with you
• Coverage Checklists– By line– Exposure based
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Insurance Community University www.InsuranceCommunityUniversity.com
Survey Risk Exposures & Coverage Checklists • Coverage Checklist and
Recommendations– To reduce oversight – Organized approach
• The Insurance University has a library of coverage checklists for its university members
• Today, we will be using the Proposal Checklist
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Polling Question #3
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Locations/Operations-Flow Charts• Graphically view account’s
operations• Assists in identifying:
– Geographic exposures• Property / Liability• Product / Services• Employees
– Dependency on other businesses– Shipping
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Flow Chart Of All Facets Of The Operation• Locations• Operations• Employees• Manufacturing bottlenecks
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Operations Flow Chart Sample
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SuppliesSuppliers
ContributorsSub-Contractors
Sub-manufacturers
DomesticForeign
Method of TransitTruck / RailShip / Air
Party Responsible For Damage
Type of OperationManufacture
SellBuild
Recipients of Products or
Services
Contract Review
Insurance Community University www.InsuranceCommunityUniversity.com
Relationship with other Entities--Suppliers
Supplier
Heilind
RTD
Parts Supplied
Electric Switches
Motors & Hydraulics
Location
Indiana
China
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Insurance Community University www.InsuranceCommunityUniversity.com
Relations with Customers
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Pistons
Seals/Glands
Piping 10% of Sales
30% of Sales
48% of Sales Arizona
Puerto Rico
England
Insurance Community University www.InsuranceCommunityUniversity.com
Basis of Structuring Coverage
• Client information and risk assessment• Document review
– Vendor agreements– Contracts– Leases
• Availability of coverage• Premium
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Polling Question #4
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Insurance Community University www.InsuranceCommunityUniversity.com37
Applications
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Applications and Marketing
Complete the application to various insurance carriers• Many are sent in incomplete
Obtain quotations
Choose the right company based on coverages; stability of the insurer and pricing
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Insurance Community University www.InsuranceCommunityUniversity.com
Polling Question #5
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You have submitted applications for your insured’s to ten insurance companies. Five companies declined and one company’s quotation was significantly less expensive than the other companies. What is the correct method of advising the insured of your marketing results.
Insurance Community University www.InsuranceCommunityUniversity.com
Application & Marketing • First to represented / admitted carriers• Know your market place
– Who are the specialists– What will they accept and not accept
• Size• Type
• Know your company policy forms• Know the rules—underwriting manuals
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Insurance Community University www.InsuranceCommunityUniversity.com
Application & Marketing
• Prepare Executive Summary– Synopsis of account for Underwriter– Outline submission attachments, projected
premium and need by date
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Market the Account
Know Your Market
Maintain Declinations
Show Companies on
Proposal
Show Ratings of the Companies
Create the marketing file
AMSFollow Up
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Producer / AMMarketing Manager
Insurance Community University www.InsuranceCommunityUniversity.com
Declinations
• In writing• Communicate in writing to insured
– Coverage summary– Separate document– Retain
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Additional Submission Items
• Supplemental applications (as required)• Financials• Statement of Values (SOV)
– Signed and dated by insured
• BI Worksheet– Completed, signed and dated by insured
• Advertising examples – hard copy, website
• Leases as required
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Insurance Community University www.InsuranceCommunityUniversity.com45
Proposals
Insurance Community University www.InsuranceCommunityUniversity.com
Proposal Purpose and Format
Standardize the ProcessTemplate Used By All Signature from Customer
CoveragesIdentifies Coverage Lines Terms and Conditions
Written CommunicationNew Business Renewal
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Proposals
• Accurate and complete• Use disclaimers
Proposal communicates insurance companies and coverages
Customer must sign the proposal
Changes to proposal must be initialed
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Polling Question #6
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Polling Question #7
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Initial Coverage Changes
Resubmit to quoting insurance companies
Obtain new coverage options and cost
Communicate coverage changes and cost to the customer
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Customer Authorization
Obtain permission to bind coverage in writing from the
insured
Issues binder OR obtain the policy number from the
insurance carrier and issue an evidence of insurance
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After Coverage is Bound or Authorized• Order coverage• If binding and replacing coverage – start
cancellation process• Suspense for receipt of policy• Review policy when received • Verify coverage matches EXACTLY what
was requested and ordered
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Proposals
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See Proposal Checklist
Insurance Community University www.InsuranceCommunityUniversity.com54
Issuance of the PolicyChecking and Double
Checking
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Finalize Placement
Corrections
• In writing to company
Bind
• Agency issues
• Company Issues
Follow Up
• Review policy
• Additional Corrections
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A Word to the “Wise” on Binders
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Binders
• A binder is a temporary contract with a maximum and minimum term determined by state law or underwriting instructions
• Confers full extensions of rights, duties and privileges under the insurance contract being bound
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Insurance Community University www.InsuranceCommunityUniversity.com
Binders• A binder must have the elements of CATS:
– Complete in all respects, both with what is covered and what is not
– Accurate in all respects– Timely with respect to inception and expiration
date of binder and with respect to jurisdictional limitations on length of binder
– Signed by someone with the authority to do so
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Insurance Community University www.InsuranceCommunityUniversity.com
Best Practices of Binder Issuance• Know binding authority granted by the
insurance company• Obtain binder from E & S broker• Binding maximum 60 days• Issue a binder on new business• Issue a binder on renewal business
when the policy has not been received
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Insurance Community University www.InsuranceCommunityUniversity.com
Best Practices of Binder Issuance
When possible – insurance company u/w issue
• If not – confirmation in writing that agent binding is authorized
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Insurance Community University www.InsuranceCommunityUniversity.com
Best Practices of Binder Issuance
Agency issue
• Signed by licensed authorized (by contract) resident or non-resident agent for the state(s) where coverage is provided must sign the form.
• The agency must be licensed in all states where coverage is bound
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If the Account Is Not Written
• Send a thank you letter to the company underwriter whose quote was not accepted
• Send a thank you letter to the company underwriter who does not wish to quote– Good relationship building
• If unable to quote send a letter documenting same to the client
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Proposal
Application
Binder
Policy
Summary
Certificates
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Match
Did ALL of these items match and issued correctly?
Insurance Community University www.InsuranceCommunityUniversity.com
Policy Review
• Some clients don’t want to take the time – do your best to insist on proper review time
• Restrictions and limiting endorsements and coverage language– Be aware and educated– Learn how to communicate these issues to
the insurance buyer
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Key Issues to Review on Policy Checking • Correct effective / expiration dates • Name Insured correct
– First Named insured– All other entities included or written
separately– Inactive entities included
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Insurance Community University www.InsuranceCommunityUniversity.com
Key Issues to Review on Policy Checking • Locations• Limits / Deductibles• Endorsements as requested• Endorsements added by company• Limiting language• Warranties• Edition dates match proposal and quote
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Polling Question #8
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Standard of Care and Submissions
• Deliver or mail (email) the • Include a summary of coverages if that is
your procedure• Include a letter with the delivery that asks
the insured to read their policy and state that the policy provisions supersede all prior documents pertaining to this submission including but not limited to the proposal
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Summaries of Insurance
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Polling Question #9
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Summaries of Insurance• Summaries “summarize” coverages that
have been issued. They supersede the proposal.
• The summary should also indicate that the policies supersede any binders previously issued and that those documents are now null and void
• Note any differences between requested and issued coverages
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Insurance Community University www.InsuranceCommunityUniversity.com
Summaries of Insurance• Explain any special exclusions or
limitations contained in the policy received
• There must be disclaimer language on the summary indicating that it does not change any of the terms or conditions of the policy as issued.
• Customer should sign and date the summary / policy receipt
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Sample Summary Disclaimer Language
The purpose of this summary is to recap the insurance program that has been issued for the agency. This summary should be used for reference purposes only as this summary in no way changes nor interprets the terms and conditions of the policy issued.
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Summary
• Identify, quantify exposures• Establish coverage requirements• Confirm with customer• Ask for coverage correctly• Verify that you received what you
asked for• Document the process and the
results
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Insurance Community University www.InsuranceCommunityUniversity.com
Upcoming ClassesUpcoming University/Paid CE Classes
FREE to University Members$50.00/charge for non university members
7/18 OCIP/CCIP
7/24 and 25 Errors and Omissions
7/30 Personal Auto Policy Problems & Solutions
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Upcoming Community Classes FREE to University Members$25.00/charge for non university members
7/16 New Commercial Property Form (1 hr CE)
Join the University TODAY. www.insurancecommunitycenter.comClick Join University at the top of the bar