July/August 2008 National Association of Professional Insurance Agents

Urgent PIA Grassroots Aler t page 11

H.R. 5840 Becomes a Federal Power Grab...A Conversation on Contingents...NY DOI Considers Banning Contingents After Courts Declare Them Legal...PIA Sends Letters to Congress, All State DOIs

PIA Opposes H.R. 5840, A Bill That Enables Federal Insurance Regulation

2 July/August 2008www.pianet.com

From the President

T here is no other insurance association that is moresteadfast in opposition to federal regulation ofinsurance than PIA. So when legislation started

moving earlier this year that threatened to undermine theauthority of the states to regulate the business of insurance, there was no question whatwe would do: PIA spoke up clearly in opposition.

The Insurance Information Act of 2008 (H.R. 5840) started out as a bill to create aninformation resource for members of Congress on insurance matters. But as the weekswent by, it evolved into a platform that could be used — as suggested in the TreasuryDepartment’s report on regulatory modernization — to “prepare” the insurance indus-try to be made part of an integrated financial services structure with banking and securi-ties, all regulated by one federal regulator.

As an independent insurance agent, I resent anyone saying they will “prepare” me foranything that threatens my ability to succeed in my chosen business. Creating a federalor dual state/federal regulatory system by letting the federal government ride roughshodover our state Insurance Commissioners is a significant threat to Main Street agents.

It is PIA’s responsibility to let our members and colleagues know what is really going on.

The supporters of federal regulation of insurance know that they cannot win astraightforward, up-or-down vote in Congress. So, they have decided to try to circum-vent the opposition through stealth. First, they break up their proposals into small piecesthat, when viewed separately, do not federalize insurance regulation. But when passedand then connected, presto, federalization takes place, the state DOIs are out of businessand the state premium taxes go to Washington, D.C.

And to smooth the way, they cut side deals that effectively neutralize groups whosemembers oppose all of this, with promises of “a seat at the table.”

There, I’ve said it. So far, I haven’t been struck down by lightening.

One of PIA’s strengths as an association is the fact that we are member-driven. PIA isnot a top-down organization; our power comes from our grassroots. Main Street insur-ance agents are individuals whose businesses are built on their core values of honesty,integrity and individual responsibility. That’s why the attempt to ban our contingentcommissions when we did nothing wrong is so offensive.

It is critical that all PIA affiliates continue to work with their state Departments ofInsurance to bring about the needed modernization of the state system of insurance reg-ulation at the state level, in order to ensure that we don’t end up with federal regulationby default.

Telling the truth may be unusual in Washington, D.C., but for PIA members, it ispart of who we are.

President Harry S. Truman was giving a speech once in which he was lambastingCongress. A person in the crowd shouted, “Give ‘em Hell!” To which President Trumanresponded, “I just tell the truth, and they think it’s Hell!”

Robert P. PagePresident

PresidentRobert P. Page (LA)cpageinsurance@aol.com

President-ElectKenneth R. Auerbach, Esq. (NJ)kauerbach@e-kinsurance.com

Vice President/TreasurerJon D. Spalding (MI)jdspalding@spaldinginsurance.com

Secretary/Assistant TreasurerBrian Marino (FL)brian@familyinsuranceservices.com

Immediate Past PresidentDonna L. Pile, CIC, CPIW (KY)donnapi@pianet.org

Executive Vice PresidentLen Brevik (PIA National)lenbr@pianet.org

PIA National Image Committee ChairmanWayne Wehr (HI)waynew@servco.com

Publisher/Editor-in-ChiefTed Besesparistedbe@pianet.org

Managing Editor/AdvertisingAlexi Papandonalexipa@pianet.org

Government/Regulatory AffairsExecutive EditorPatricia A. Borowski, CPIW, CAEpatbo@pianet.org

Contributing EditorsMike BeckerKellie BrayDavid Eppstein

Production EditorLaurel Prucha Moranlaurel@blueroomstudio.com

PIA Connection is published ten timesyearly by the National Association ofProfessional Insurance Agents.400 North Washington Street,Alexandria, Virginia 22314©2008 All rights reserved.

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P roposed legislation that started outas a bill to create an insuranceinformation office has been

changed to enable federal regulation ofinsurance.

When H.R. 5840, the innocuous-sounding Insurance Information Act of2008, was introduced earlier this year, itssupporters said it was simply an effort tocreate an information resource for mem-bers of Congress on insurance matters.

“This bill has been misleading fromthe outset,” said PIA National PresidentRobert Page, in a press statement that wasfeatured prominently in the NationalUnderwriter. “The title of the bill is amisnomer and the rhetoric of its support-ers is designed to conceal what is reallygoing on here. This piece of legislation ispart of a coordinated, frenetic push byadvocates of federal insurance regulationto sweep away opposition and advance

their agenda.”As the drafting process for H.R. 5840

proceeded in the House, the Treasury Sec-retary’s powers were expanded, giving himauthority to preempt state insurance laws,regulations and practices, not only whenhe says they conflict with internationalagreements, but also when he says theyconflict with “national insurance policy”as set by the Treasury Department.

By the time that the House CapitalMarkets Subcommittee approved H.R.5840 on July 8, 2008, the bill had beentransformed into legislation that wouldenable a federal takeover of most insur-ance regulation:

• Under H.R. 5840, Congress grantsnew powers to the Secretary of theTreasury, making the Secretary theprincipal federal authority fordomestic and international insur-ance issues of national interest with

the power to determine which statelaws, regulations and industry prac-tices will be preempted.

• H.R. 5840 effectively guts theMcCarran-Ferguson Act of 1945and the Gramm-Leach-Bliley Actof 1999, which establish and affirmthat the states are the regulators ofthe business of insurance.

“This is no longer a bill that is onlyabout creating an insurance informationoffice,” said PIA National President-electKenneth R. Auerbach, Esq. “The currentversion of this bill would effectively layopen to review and approval by the Secre-tary of the Treasury the laws and practicesof all 55 United States jurisdictions inmost matters relating to insurance.”

“The Office of Insurance Informationconcept is being used by advocates as a

July/August 2008 3www.pianet.com

Continued on page 8

H.R. 5840 Becomes a Federal Power GrabBill for Information Office Grants Treasury Secretary Broad New Powers

AmTrust North AmericaAn AmTrust Financial Company

Editor’s Note: Recently, Montana Commissioner of InsuranceJohn Morrison sat down with PIA National President-electKenneth R. Auerbach, Esq., to discuss the topic of contingentcommissions. The session was arranged by PIA NationalDirector from Montana Fred Thomas.

KEN AUERBACH: Commissioner, what is your perspective onthe issue of contingent commissions being received by MainStreet insurance agents? I ask this in light of some of the mega-broker settlement agreements that followed in the wake of EliotSpitzer’s investigations almost five years ago.

COMMISSIONER MORRISON: When this arose in late2004 and culminated in an NAIC model in January of 2005, myopinion was the NAIC model should focus on what EliotSpitzer’s cases were about, which was brokers that had made apledge of undivided loyalty to a client secretly receiving contin-gent commissions and rigging bids to steer business in a way thatwas not consistent with the best interest of the client.

It often happens in government that when a problem is twofeet wide and five feet deep, the government passes a solution that’sfive feet wide and two feet deep. My objection was to the proposalby some that would have required all producers to disclose allcommission arrangements to all consumers in the retail market.

NAIC developed a two-part model. The first part essentiallysaid that a traditional broker was required to provide specific dis-closure of a compensation arrangement to a client and get a writ-ten acknowledgment of it. Part two said all other producers wererequired to do was generally disclose to their customers if theywere getting some compensation from the company on the otherend, without the requirement of disclosing specific produceramounts, arrangements with specific companies, without therequirement of getting a specific acknowledgement.

Now, the NAIC Model was not adopted anywhere that Iknow of. And the NCOIL model was adopted in about 5 states,and the NCOIL model was essentially just the first part of theNAIC model.

Then, the other entry into this field was perhaps the biggestand most important one. The state of New York in its agree-ments with Marsh, Aon and Willis essentially just banned con-tingent commissions for those brokerage firms. They voluntarilyagreed to that, although recently it’s my understanding that theregulator in New York has agreed to allow them to continue theircontingent commission practices with disclosures for three moreyears and then phase it out.

If you go into an appliance store, you don’t ask the salesmanwhat his commission is on the washing machine, you just shopto see what kind of washing machine you like and who has thebest price. So, my feeling is that if it’s a retail insurance agent, itis not necessary for contingent commission arrangements — orany commission arrangements — to be disclosed. However, Ithink we should deal firmly and harshly with those people in thebrokerage market who are cheating people.

In my personal opinion, if you’re being paid to be loyal to one

side, you should-n’t be paid by theother side. Ifyou’re not beingpaid for a dutyof undividedloyalty to oneside, then youcan be paid how-ever you want.

A lawyer, forexample, is paid to have an undivided loyalty to the client. Now, ifyou’re getting divorced and you go and hire a divorce lawyer, youwouldn’t want that divorce lawyer to also be paid by your ex-wife.

KEN AUERBACH: I don’t think that there’s a problem if thebroker is up-front with the client and discloses that there might besome sort of compensation from the carrier in addition to the fee.

COMMISSIONER MORRISON: I would entertain that asreasonable, only because it’s a commercial arrangement, so youhave sophisticated clients and if a broker receives a brokerage feefrom a business and that business is sophisticated. If it’s an unso-phisticated client then it still bothers me on a personal level.

The other bottom line is that if a broker is being paid to findthe best deal for the client, the broker must not give the client alesser deal in order to maximize the commission of the broker.

KEN AUERBACH: Underlying PIA’s position on the contin-gent issue is an assumption we think is correct, that giving carri-ers the ability to reward some agents more than others — agentsthat provide them with better underwriting information, forinstance — that it is in the consumer’s interest. We think havingthat kind of compensation system that rewards doing a profes-sional job in the end makes for more stable insurance companiesand lower premiums for consumers. We think that got lost insome of these settlements.

COMMISSIONER MORRISON: My recommendation as amember of the NAIC Task Force that addressed the contingentcommission issue at that time was that we narrow our focus tothose situations where there’s a duty of undivided loyalty reflect-ed by payment from the client to the broker and insure thatthere’s no dishonest dealings in that slice of the market.

It was unfortunate in my view that it was expanded to a trans-parency issue for the entire insurance producer community. But,three years later nobody adopted the model. So basically this isnot a national issue as much as it is with the domestic regulatorsin New York and Illinois.

KEN AUERBACH: Do you think it is still an issue or do yousee a resolution coming down the pike?

COMMISSIONER MORRISON: I haven’t really heard any-thing about it for a couple of years.

A Conversation on ContingentsMontana Insurance Commissioner John Morrison Speaks with PIA National President-elect Ken Auerbach

July/August 2008 5www.pianet.com

Ken Auerbach John Morrison

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P IA of New York Past PresidentJohn W. Bailey, CIC, testified onJuly 23 at a joint public hearing on

producer compensation and disclosure.The hearing was the second in a series ofthree this month held by the New YorkState Insurance Department and Attor-ney General’s office. Eight individualstestified at the hearing, held in Albany,representing producer and companygroups from the property/casualty andlife/disability sectors.

Bailey reiterated PIA’s long-standingposition that contingent commissions arelegal, effective compensation for producersthat benefit New York state’s consumersand economy. He told the panel that,beyond their inherent ethical behavior, acompetitive market ensures that agents actin the best interests of the consumer.

Bailey and several testifiers pointedout contingent commissions, paid byinsurance companies to retail independ-ent insurance agents, are not the same as“placement service accounts,” which cer-tain mega-brokers used in bid-riggingschemes and which the attorney generalinvestigated and settled in 2004.

PIA testified that voluntary disclosureexists in the market, and that mandatingdisclosure would mislead consumers, per-haps implying that producers’ compensa-tion is negotiable between the customerand the agent. To the contrary, “our com-pensation is set by the companies andapproved by the insurance department aspart of the rate approval process,” Baileyexplained.

Court Says ContingentsNot Illegal

The series of three hearings was quick-ly announced following a June 19, 2008decision by the 1st Appellate Division ofthe New York Supreme Court whichdeclared that contingent commissionagreements are not illegal.

The court’s action throwing out allclaims relating to contingent commissionagreements came in a case that stemmedfrom a May 2006 fraud and bid-riggingsuit originally filed against Liberty Mutu-al by former New York Attorney GeneralEliot Spitzer. While other insurers and

mega-brokers faced investigations of sim-ilar allegations since 2004 and opted tosettle with Spitzer and other state author-ities, Liberty Mutual vowed to fight theallegations in court. Some of the settle-ments banned the payment of contingentcommissions, while others mandated theuse of a disclosure form that was legallyflawed and would place agents at risk oferrors and omissions claims.

PIA National President-elect KennethR. Auerbach, Esq. described the courtdecision as a resounding victory for MainStreet insurance agents across the nationand the American Free Enterprise System.It is also a vindication of the actions takenby PIA to turn back the attacks on a com-pensation system that has always beenlegal and ethical, despite Eliot Spitzer’sincorrect assertions to the contrary.”

“This marks the end of the Spitzerera,” Auerbach said. “Common sense isfinally beginning to prevail. The courthas stated unequivocally that being com-pensated with commission, contingent orotherwise, is neither illegal nor unethicaland has thrown out as baseless all claimsto the contrary. We are hopeful that thecertainty of this ruling will serve to deterany further attempts by ambitious andmisguided state Attorneys General fromtargeting the legal compensation of thosewho never engaged in wrongdoing.”

Auerbach added that PIA appreciatesthe fact that Liberty Mutual decided notto enter into a settlement as other carriers

did, opting instead to fight in court. “PIAagents are grateful to Liberty Mutual forremaining steadfast, being our allies insupport of common sense and fightingfor what is right.”

PIA Fights for MembersRights

On September 19, 2006 PIA filed anamicus brief with the United States Dis-trict Court for the District of New Jersey,in opposition to one of the proposed set-tlements. In its brief, PIA noted that thesettlement attempted to create a remedyfor alleged wrongdoing and then imposeit on those who were not involved in anywrongdoing — retail Main Street insur-ance agents.

The PIA filing also noted that severalof the original settlements reached in2004 were subsequently amended bystate attorneys general to liberalize earlierprohibitions against contingency earn-ings — while such changes were notmade for Main Street agents, who hadnever been accused of any wrongdoing.

PIA provided the most comprehen-sive legal briefs on behalf of independentinsurance agents in that case, speakingto the legally incorrect disclosure formbeing imposed on agents by the settle-ment actions, as well as the litany ofunfair and adversely disparate treat-ments PIA agencies were being subjectedto by being denied due process throughthe misuse of the settlement process,which was conducted in secret and fromwhich independent insurance agentswere excluded.

“In light of all of these court rulings,we believe it is time for state attorneysgeneral to revisit settlement agreementsthat impose these adverse effects indis-criminately on all producers, specificallythose who never had anything to withalleged wrongdoing, and give them backtheir rightful earnings,” said PIA Nation-al Senior Vice President Patricia A.Borowski.

But rather than eliminating the restric-tions on contingent commissions, NewYork State officials are now consideringexpanding them to include all agents andbrokers.

NY DOI Considers Banning ContingentsAfter Courts Declare Them Legal

July/August 2008 7www.pianet.com

“We believe it is time for

state attorneys general to

revisit settlement agreements

that impose these adverse

effects indiscriminately on

all producers, specifically

those who never had any-

thing to with alleged wrong-

doing, and give them back

their rightful earnings.”

8 July/August 2008www.pianet.com

vehicle to enable creation of the initialfederal insurance regulatory infrastruc-ture that, once it is established, can berapidly transformed into the office of afederal insurance regulator,” said PIANational Executive Vice President &CEO Leonard C. Brevik. “PIA is opposedto federal insurance regulation, so PIA isopposed to H.R. 5840. This is dual regu-lation. They are one and the same.”

PIA believes that consumers are bestserved by the current system under whichthe business of insurance is regulated bythe states. PIA opposes federal regulationof insurance, and also opposes proposalswhich would create a dual regulatory sys-tem through an optional federal charterfor insurers, which would essentially allowthem to decide whether to be regulated bythe states or the federal government.

In a speech in April to the MaineInsurance Agents Association Auerbachsaid that despite the arguments advancedby advocates of federal insurance regula-tion, what is really underway is a compe-tition for market share by major players.

“Federal involvement is being market-ed as a way of making insurance regula-tion more efficient, but the subprimemortgage meltdown occurred under fed-eral regulation,” Auerbach said. “All at thesame time that the insurance industry —which is under state regulation —remained on a firm financial footing,achieving record profits and lower pricesfor consumers.”

“So our question is, why would it bemore efficient for the one sector of financialservices that has prudently conducted itsbusiness to be subsumed into a federal regu-latory structure that has failed in the super-vision of banking and securities?” he said.

The initial version of H.R. 5840 dealtwith setting up a federal insurance infor-mation office. It also addressed interna-tional insurance agreements, granting theTreasury Secretary power to preemptstate insurance laws and regulations hedetermined to be in conflict with interna-tional agreements.

On June 10, the Capital Markets sub-committee held a hearing on H.R. 5840.Illinois Insurance Commissioner MikeMcGrath surprised everyone by sayingthat the NAIC could support H.R. 5840with some key changes that limited the

scope of preemptions.When McGrath registered objections

to the preemption provisions, one of thecommittee’s prime sponsors of anOptional Federal Charter, Rep. MelissaBean (R-Ill.) told McGraith that hewould make “an ideal candidate” for fed-eral insurance regulator. When NCOILPresident Brian Kennedy said giving theNAIC and not NCOIL a lead role in thisoffice “allows the tail to wag the dog,”Rep. Kanjorski quickly offered to giveNCOIL a seat on the OII AdvisoryGroup and asked if that would assuagetheir objections to the bill.

It was unusual to see such bare-knuck-les tactics being utilized in a public hear-ing, as opposed to behind closed doors.

The Manager’s AmendmentIn response to comments filed with

the subcommittee by PIA, NCOIL andNAIC, a new version of the bill (calledthe Manager’s Amendment) was draftedby committee staff. While it did narrowthe scope of preemptions a little, thischange was negated by expanded newpowers granted to the Treasury Secretary.Now, in addition to being able to pre-empt state law in relation to internationalinsurance agreements, that power wasbroadened to include “national insurancepolicy,” which was to be set by Treasury.

So what began as a bill to set up aninsurance information office and dealwith relatively narrow concerns regardinginternational treaties was now a bill thateffectively put the U.S. Treasury Secretaryin charge of most insurance matters inthe country.

The bill’s supporters maintained thatthe concerns of its opponents were mis-placed, that the bill should be read morenarrowly.

“People have been encouraged to readthe bill more narrowly than this,” Auer-bach said. “If that is the case, then PIAwants the actual language in the bill toarticulate that narrowness. The currentlanguage provides the power to deter-mine which state laws, regulations andindustry practices will be preempted,without any proper legislative authorityacting to do so.”

“This is a federal power grab,” Auer-bach concluded.

NAIC’s “Conditional”Support

As the Capital Markets subcommitteeapproached a scheduled mark-up of therevised H.R. 5840 on July 8, a letter tothe subcommittee was received that hadbeen signed by NAIC President SandyPraeger. In it, she endorsed the revisedH.R. 5840, on behalf of the NAIC.

This was a major bombshell. TheNational Conference of Insurance Legis-lators (NCOIL), comprised of state law-makers involved in setting insurance pol-icy in their states, had been conducting anationwide campaign warning state offi-cials of the dangers posed by H.R. 5840.PIA supported NCOIL in the effort.

Supporters of state regulation wereperplexed. How could the NAIC endorsea bill on behalf of its members that wouldgive away much of their members’authority? As a trade association, theNAIC has no authority to cede power tothe federal government on behalf of indi-vidual states. Only the states can do that.

An NCOIL-NAIC discussion sessionwas held July 14 by NCOIL at their sum-mer meeting. NCOIL President andRhode Island State Rep. Brian Kennedysaid that he was “baffled” by the endorse-ment of a bill that could preempt stateinsurance regulation.

During the session, North DakotaState Rep. George Keiser, R-Bismarck (R)said, “I felt sold out. I’m not looking for a‘seat at the table.’” He said that if statelegislators and regulators are going tooppose federal oversight, then a clearposition has to be taken.

New York State Sen. William J. Larkin(R) added his disappointment in theNAIC’s position, noting that “we’re therepresentatives of the people.” He sug-gested that the NAIC was acting like afederally recognized charitable organiza-tion that is being run by its staff, ratherthan the state insurance commissioners.Larkin also criticized pending federal leg-islation that would create an optional fed-eral charter for insurers. If a federal char-ter is put in place, he said, New Yorkstands to lose $3.3 billion in revenue.

Action DelayedAs the House worked feverishly to

OII Is Broad Assault on State RegulationFrom page 3

adjourn by August 1, there was a riskthat H.R. 5840 would be sent to a voteon the House floor, bypassing the fullFinancial Services Committee. Therewere reports earlier that the bill wouldbe considered by the full committee onJuly 15, but that session had been can-celled.

An attempt to pass H.R. 5840 in thefinal three days before adjournmentwas mounted. The bill would bebrought up under the “suspension cal-endar.” As this began to unfold, PIAwent out with a strongly-worded pressrelease declaring that the bill was not asdescribed by its supporters, but wasreally legislation that enabled federalregulation of insurance. PIA alsolaunched a nationwide grassroots alert,asking all members to contact theirMembers of Congress.

One day later, when the bill wasexpected to come up, the NationalUnderwriter broke the news that itwould be delayed until September,when Congress returns from its Augustrecess.

No companion bill has been intro-duced in the Senate as yet, but BankingCommittee Chairman Chris Dodd (D-Conn.) indicated H.R. 5840 could seeaction there soon.

July/August 2008 9www.pianet.com

PIA Sends Letters to Congress, All State DOIsBill a “Broad Assault on the Authority of All States”

PIA National has sent letters to all of the nation’s state commissioners ofinsurance and to Members of Congress, warning against the unintendedconsequences of the Insurance Information Act of 2008 (H.R. 5840).

“Some in Congress may be tempted to think that there is consensus withinthe insurance industry regarding H.R. 5840. This is not the case,” said PIA Exec-utive Vice President & CEO Leonard C. Brevik. “Our letter to Congress alongwith our letter to all of the state insurance commissioners points out that thereis no consensus on this bill.”

What started out as a bill to create an insurance information office and dealwith insurance issues in international agreements has become legislation thatwould enable federal regulation of insurance. Under H.R. 5840, Congress grantsnew powers to the Secretary of the Treasury, making the Secretary the principalfederal authority for domestic and international insurance issues of nationalinterest with the power to determine which state laws, regulations and indus-try practices will be preempted.

H.R. 5840 effectively guts the McCarran-Ferguson Act of 1945 and theGramm-Leach-Bliley Act of 1999, which establish and affirm that the states arethe regulators of the business of insurance.

“PIA is concerned that Congress is trying to ride roughshod over our statedepartments of insurance,” Brevik said. “This bill has been quietly transformedinto legislation enabling federal insurance regulation.”

PIA believes that consumers are best served by the current system underwhich the business of insurance is regulated by the states. PIA opposes federalregulation of insurance, and also opposes proposals which would create a dualregulatory system through an optional federal charter for insurers, which wouldessentially allow them to decide whether to be regulated by the states or thefederal government.

“Supporters of H.R. 5840 are now attempting to convince members of Con-gress that these powers are not new, will only be exercised under very limitedcircumstances, and only as a last resort,” said the PIA letter to the state com-missioners of insurance. “Unfortunately, the actual language of the bill does nottrack with the narrowness of these comments, and press comments do not mit-igate that problem. Hence, those that desire to transfer insurance regulationfrom the states to the federal government may do so under this current lan-guage.”

“PIA believes that the current version of H.R. 5840, the Insurance InformationAct of 2008, effects a broad assault on the authority of all states and the Depart-ments of Insurance that regulate the business of insurance,” the letter goes on.“We respectfully suggest that you contact your federal elected officials toexpress your concerns about this flawed legislation.”

A separate letter has been sent to all Members of Congress detailing theflaws in H.R. 5840 and its potential for creating unintended consequences.

PIA Members:Contact your Members of Congresstoday and ask them to stop H.R. 5840!

Please log on towww.pianet.com/GRASSROOTS and take action now!

July/August 2008 11www.pianet.com

U R G E N T P I A G R A S S R O O T S A L E R T

TELL YOUR MEMBERS OF CONGRESS: STOP H.R. 5840!

PIA National is in the midst of a Grassroots Action campaign, and we need YOUR help!

The supporters of federal regulation of insurance have come up with a stealth strategy to advance their agen-da. They are using the excuse of international trade concerns — and exploiting the current downturn in theeconomy — to advance their goal of a federal takeover of insurance regulation.

We are asking PIA members to help disrupt their strategy.

Federal regulation advocates have hijacked H.R. 5840, the Insurance Information Act of 2008, and changed itinto a bill that would grant new powers to the U.S. Treasury Secretary that effectively put him in charge ofmost insurance matters in the country.

H.R. 5840 has been expanded, to lay the groundwork for a federal takeover of insurance:

• Under H.R. 5840, Congress grants new powers to the Secretary of the Treasury, makingthe Secretary the principal federal authority for domestic and international insuranceissues of national interest with the power to determine which state laws, regulations andindustry practices will be preempted.

• H.R. 5840 effectively guts the McCarran-Ferguson Act of 1945 and the Gramm-Leach-Bliley Act of 1999, which establish and affirm that the states are the regulators of thebusiness of insurance.

PIA is a staunch supporter of state regulation of insurance!PIA opposes a federal takeover of insurance regulation!

Supporters of H.R. 5840 are now attempting to convince members of Congress that these powers are not new,and will only be exercised under very limited circumstances, and only as a last resort.

But the language of the bill is not that narrow. And federal law is created only by what is expressed in a bill —not the assurances its supporters offer in the press!

H.R. 5840 grants one, unelected political appointee in Washington, D.C. — the Treasury Secretary — thepower to preempt any state insurance law, regulation or practice. Under the bill, this can happen without anyaction by Congress, the states or the courts.

PIA believes that H.R. 5840 is the first step in the campaign to create a system of federal insurance regulation.We believe that H.R. 5840 will also be used to advance dual regulation under an Optional Federal Charter.

TAKE ACTION NOW! Send a message to your Member of Congress, telling him or her to oppose H.R.5840! Send your message now by logging on to:

www.pianet.com/GRASSROOTS

Send your message now — Congress could vote on this bad bill as early as September!

July/August 2008 13www.pianet.com

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Make sure you’re in the PIA Connection Marketplace!

77th Annual Business Meeting

Sunday, September 21, 2008 — 8:00 am

Sheraton Austin Hotel, Austin, Texas

Agenda

President Robert P. Page Presiding

Call to Order R. PageSecretary’s Report B. MarinoPrevious Minutes B. Marino

Treasurer’s Report J. SpaldingBylaws Amendments NONEAdjournment R. Page

Log ontowww.pianet.com

today!

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sneumayer@omniagroup.com

Where Did You

Go Wrong?

14 July/August 2008www.pianet.com

affil

iate

sNEBRASKA/IOWAPIA of Nebraska/Iowa, 920 South 107th Avenue, Suite 305, Omaha, NE 68114PHONE: (402) 392-1611 • FAX: (402) 392-2228e-mail: piane@pianebraska.com • Web Site: www.pianebraska.comNEW HAMPSHIREPIA of New Hampshire, P.O. Box 997, Glenmont NY 12077-0997PHONE: (800) 424-4244 • FAX: (518) 434-2342e-mail: pia@pia.org • Web Site: www.piaonline.orgNEW JERSEYPIA New Jersey, P.O. Box 997, Glenmont NY 12077-0997PHONE: (800) 424-4244 • FAX: (518) 434-2342e-mail: pia@pia.org • Web Site: www.piaonline.orgNEW YORKPIA New York, P.O. Box 997, Glenmont NY 12077-0997PHONE: (800) 424-4244 • FAX: (518) 434-2342e-mail: pia@pia.org • Web Site: www.piaonline.orgNORTH CAROLINAPIANC, 16976 Justice Branch Road, Littleton, NC 27850PHONE: (704) 892-4645 • (877) 337-4262 • FAX: (704) 892-4645e-mail: jimpianc@yahoo.com • Web Site: www.piaofnc.comNORTH DAKOTAPIA of North Dakota1211 Memorial Hwy Holiday Park Office #6, Bismarck, ND 58504-5213PHONE: (701) 223-5025 • (800) 733-1050 ND&MN onlyFAX: (701) 223-9456 • e-mail: info@piand.com • Web Site: www.piand.comOHIOPIA of Ohio, Inc., 600 Cross Pointe Road, Gahanna, OH 43230PHONE: (614) 552-8000 • (800) 555-1742 • FAX: (614) 552-0115e-mail: ohpia@ohiopia.com • Web Site: www.ohiopia.comOKLAHOMAPIA of Oklahoma, P.O. Box 12921, Oklahoma City, OK 73157PHONE: (405) 942-1119 • FAX: (405) 943-4380e-mail: bill@piaok.com • Web Site: www.piaok.comOREGON/IDAHOPIA of Oregon/Idaho, 3205 Northeast 78th Street, #104, Vancouver, WA 98665PHONE: (503) 287-7570 • FAX: (360) 571-7600e-mail: piawest@piawest.com • Web Site: www.piawest.comPENNSYLVANIAInsurance Agents & Brokers of Pennsylvania P.O. Box 2023, Mechanicsburg, PA 17055-0763PHONE: (717) 795-9100 • FAX: (717) 795-8347e-mail: timw@iabgroup.com • Web Site: www.iabgroup.comPUERTO RICO & CARIBBEANPIA of Puerto Rico and the Caribbean IncPO Box 192389, San Juan, PR 00919-2389PHONE: (787) 792-7849 • FAX: (787) 792-4745e-mail: marcos@piaofpr.com • Web Site: www.piaofpr.comRHODE ISLANDPHONE: (703) 836-9340 • FAX: (703) 836-1279e-mail: teresale@pianet.org • Web Site: www.pianet.comSOUTH CAROLINAPIA of South Carolina, PO Box 21367, Columbia, SC 29221-1367PHONE: (803) 772-0557 • (888) 742-6372 • FAX: (803) 772-0846e-mail: PIASC@piasc.net • Web Site: www.piasc.netSOUTH DAKOTAPHONE: (703) 836-9340 • FAX: (703) 836-1279e-mail: teresale@pianet.org • Web Site: www.pianet.comTENNESSEEPIA of Tennessee Inc, 504 Autumn Springs Court Suite A-2, Franklin, TN 37067PHONE: (615) 771-1177 • FAX: (615) 771-3456e-mail: piatn@piatn.com • Web Site: www.piatn.comTEXASTexas Insurance Professionals, P. O. Box 90908, Austin, TX 78709-0908PHONE: (512) 301-0226 • FAX: (512) 301-0265e-mail: pia@piatx.org • Web Site: www.piatx.orgUTAHUtah Association of Independent Insurance Agents4885 S. 900 E., Suite 302, Salt Lake City, UT 84117PHONE: (801) 269-1200 • FAX: (801) 269-1265e-mail: stevebaugh@uaiia.org • Web Site: www.uaiia.orgVERMONTVermont Insurance Agents Association, P.O. Box 1387, Montpelier, VT 05601PHONE: (802) 229-5884 • FAX: (802) 223-0868e-mail: rcoyle@viaa.org • Web Site: www.viaa.orgVIRGINIA/DCPIA Assn of Virginia & DC, 8751 Park Central Dr., Ste 140, Richmond, VA 23227PHONE: (804) 264-2582 • FAX: (804) 266-1075e-mail: dennis@piavadc.com • Web Site: www.piavadc.comWASHINGTON/ALASKAPIA of WA/AK, 3205 Northeast 78th Street, #104, Vancouver, WA 98665PHONE: (360) 571-7100 • FAX: (360) 571-7600e-mail: piawest@piawest.com • Web Site: www.piawest.comWEST VIRGINIAPHONE: (703) 836-9340 • FAX: (703) 836-1279e-mail: teresale@pianet.org • Web Site: www.pianet.comWISCONSINPIA of Wisconsin, Inc., 6401 Odana Road, Madison, WI 53719-1126PHONE: (608) 274-8188 • (800) 261-7429 • FAX: (608) 274-8195e-mail: rvonhaden@piaw.org • Web Site: www.piaw.orgWYOMINGAssoc. of Wyoming Ins. Agents, PO Box 799, Sundance, WY 82729-0799PHONE: (307) 283-2052 • FAX: (775) 796-3122e-mail: awia@vcn.com • Web Site: www.awia.com

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sALABAMAPIA of Alabama, 1276 Perry Hill Rd, Montgomery, AL 36109PHONE: (334) 244-7422 • FAX: (334) 244-9921e-mail: perry@piaal.com • Web Site: www.piaal.comARKANSASPIA of Arkansas Inc., 10 Corporate Hill Dr., Suite 130, Little Rock, AR 72205PHONE: (501) 225-1645 • FAX: (501) 225-2550e-mail: evp@piaar.com • Web Site: www.piaar.comCA/NV/AZ/NMPIA Group, 3205 Northeast 78th St #104, Vancouver, WA 98665PHONE: (888) 246-4466 • FAX: (360) 571-7600e-mail: piawest@piawest.com • Web Site: www.piawest.comCOLORADOPHONE: (703) 836-9340 • FAX: (703) 836-1279e-mail: teresale@pianet.org • Web Site: www.pianet.comCONNECTICUTPIA of Connecticut, P.O. Box 997, Glenmont, NY 12077-0997PHONE: (800) 424-4244 • FAX: (518) 434-2342e-mail: pia@pia.org • Web Site: www.piaonline.orgDELAWAREInsurance Agents & Brokers of DelawareP.O. Box 2023, Mechanicsburg, PA 17055-0763PHONE: (717) 795-9100 • FAX: (717) 795-8347e-mail: timw@iabgroup.com • Web Site: www.iabgroup.comFLORIDAPIA of Florida, Inc., 1390 Timberlane Road, Tallahassee, FL 32312-1766PHONE: (850) 893-8245 • (800) 277-1171 FL only • FAX: (850) 893-8316e-mail: oconnell@piafl.org • Web Site: www.piafl.orgGEORGIAThe PIA of Georgia, Inc., 3805 Crestwood Pkwy NW #140, Duluth, GA 30096PHONE: (770) 921-7585 • FAX: (770) 921-7590e-mail: jerry@piaga.com • Web Site: www.piaga.comHAWAIIPIA of Hawaii, 146 Hekili St # 201A, Kailua, HI 96734-2835PHONE: (808) 261-9460 • FAX: (808) 262-5355e-mail: piahi@hawaiiantel.net • Web Site: www.piahawaii.comILLINOISPHONE: (703) 836-9340 • FAX: (703) 836-1279e-mail: teresale@pianet.org • Web Site: www.pianet.comINDIANAPIA of Indiana, 600 Cross Pointe Road, Gahanna, OH 43230PHONE: (614) 552-8000 • (800) 555-9742 • FAX: (614) 552-0115e-mail: inpia@indianapia.com • Web Site: www.indianapia.comKANSASKansas Association of PIA103 SE 10th Ave., Topeka, KS 66612PHONE: (785) 232-4143 • FAX: (785) 232-0272e-mail: pia@pia.kscoxmail.com • Web Site: www.KansasPIA.orgKENTUCKYPIA of Kentucky, P.O. Box 4205, Frankfort, KY 40604-4205PHONE: (502) 875-3888 • FAX: (502) 227-0839e-mail: clemay@piaky.org • Web Site: www.piaky.orgLOUISIANAPIA of Louisiana Inc., 8064 Summa Avenue, Suite C, Baton Rouge, LA 70809PHONE: (225) 766-7770 • (800) 349-3434 LA only • FAX: (225) 766-1601e-mail: jody@piaoflouisiana.com • Web Site: www.piaoflouisiana.comMAINEMaine Insurance Agents Association, 432 Western Avenue, Augusta, ME 04330PHONE: (207) 623-1875 • FAX: (207) 626-0275e-mail: bigime@aol.com • Web Site: www.maineagents.comMARYLANDInsurance Agents & Brokers of Maryland P.O. Box 2023, Mechanicsburg, PA 17055-0763PHONE: (717) 795-9100 • FAX: (717) 795-8347e-mail: timw@iabgroup.com • Web Site: www.iabgroup.comMASSACHUSETTSPHONE: (703) 836-9340 • FAX: (703) 836-1279e-mail: teresale@pianet.org • Web Site: www.pianet.comMICHIGANThe Association of PIA, 4550 Cascade Road SE, Suite 205-B, Grand Rapids, MI 49546-3697PHONE: (616) 454-4461 • FAX: (616) 454-4491e-mail: pjames@mipia.com • Web Site: www.mipia.comMINNESOTAPIA of Minnesota, 3600 Holly Lane N. #90, Plymouth, MN 55447PHONE: (763) 694-7070 • FAX: (800) 546-3428e-mail: gsather@piamn.com • Web Site: www.piamn.comMISSISSIPPIPIA Association of Mississippi, 4 River Bend Place, #115, Jackson, MS39232PHONE: (601) 936-6474 • FAX: (601) 936-6477 • (800) 898-0136 MS onlye-mail: PIAofMS@aol.com • Web Site: www.piams.comMISSOURIMissouri Association of Insurance AgentsP.O. Box 1785, Jefferson City, MO 65102-1785PHONE: 573-893-4301 • FAX: 573-893-3708e-mail: lcase@moagent.org • Web Site: www.missouriagent.orgMONTANAPIA of Montana, 3205 NE 78th St Ste 104, Vancouver, WA 98665-0697PHONE: (888) 246-4466 • FAX: (360) 571-7600e-mail: piawest@piawest.com • Web Site: www.piawest.com

The PIA Main Street Store

D id you know that the store windowshown below is actually a picture that hasbeen borrowed from PIA National’s web-

site? That’s right, all of the products shown below are describedin much greater detail at www.pianet.com/PIAMainStreetStore.

If you visit the PIA Main Street Store, you’ll not only find acomprehensive listing of insurance products, financial products,discounts and PIA member-only special offers, you’ll find detailsabout the programs along with web links and phone numbers soyou can get started.

As a PIA member, you owe it to yourself to visit the PIAMain Street Store and browse around. Simply type the addressabove into your web browser or go to www.PIANET.com andclick on the PIA Main Street Store button on the left side of thepage.

Visit www.PIANET.com for additional Member Benefits including the PIA Branding Program, Guide toSuccessful Planning, Perpetuation Central, Agency Agreement Review Service, PIA logos and more.

Insurance Productsn Errors and Omissions InsuranceSolid E&O protection built around yourunique needs. (800) 742-6900 Ext. 382

n Penn National Insurance Agent’sUmbrella ProgramComprehensive and affordable excessinsurance protection includes E&O andBusiness Liability coverage with availableendorsements for EPL and Personal Cov-erage. Call your local PIA affiliate or (800)742-6900 Ext. 382

n The Insurance On-line Network (ION)Easy-to-use, on-line, multi-carrier, term lifequoting system. www.PIANET.com/ION

n Agency Revenue ToolsEmployee worksite marketing using yourappointed markets at regular commissionrates. (703) 518-1363

n Catastrophe Major MedicalThe $2,000,000 Catastrophe Major MedicalInsurance Plan picks up where your basiccoverage leaves off! (800) 503-9230;https://www.personal-plans.com/pia

n GE Money-Warranty ServicesMarket a proven vehicle service contract program to auto dealerships. (800) 782-9753.

n PIA HealthQuality health insurance for you, youremployees and families through a top insur-er in your area. Coverage and product avail-ability vary by state. (800) 742-6900 Ext. 382

n Hartford Flood InsuranceEasy enrollment process, competitive com-missions, advanced Internet services, plus avariety of programs and surplus lines. Call(888) 410-2963 x73932 or visit www.hartfordfloodinsurance.com

n Unimerica ProductsBasic, Voluntary and Dependent Term Life;Long Term Disability; Short Term Disability;ADD; Hospital Indemnity (800) 336-4759;www.piatrust.com

Financial Servicesn Bank of America Financial ProductsTell the BoA operator you are a member ofthe “National Association of ProfessionalInsurance Agents.” Personal cards: (800)932-2775. Business cards: (800) 598-8791.Gold Option Loan Program: (888) 332-5233.CDs: (800) 900-6653.

“PIA Plus” Products/Discountsn PIA Logo Wear & GearShirts, jackets, mugs and more with the PIAMain Street Logo featuring PIA’s new tagline,Local Agents Serving Main Street AmericaSM.http://promotiontechnology.com/pia.html

n On-Line CE and Skills CoursesAvailable to agents in participating statesat www.PIANET.com/Education For othereducational programming, including designation programs, please contactyour local PIA affiliate.

n Alamo Car RentalGet unlimited mileage and up to 20% offalready low retail rates. 1-800-GO-ALAMO(1-800-462-5266) (I.D. # 93140)

n Central Licensing BureauSave time and money by using CLB for allyour agency licensing needs. (501) 664-8044n Consumer BrochuresAnswer clients’ questions with professionalbrochures from PIA. (703) 518-1353.n Free SubscriptionPIA members, receive a free subscriptionto Rough Notes magazine atwww.pianet.com/FreeSubscriptionsn Mines Press Calendar ProductsPersonalized calendars at member onlyprices. (800) 447-6788n Omnia Employee ProfilingSkills and personality testing. Contact Sean Neumeyer at (800) 525-7117 Ext. 1242.n Online Data Backup & RecoveryBackup critical files to a secure, remotelocation through Courtesy Computers, the insurance agency specialists.www.pianet.com/courtesyn Rough Notes Agency OnLineHelps identify risk exposures and providesdetailed coverage analysis. Avail. to PIA mem-bers for $400 annually (reg. $1,699). Call 800-428-4384. Use your PIA member ID#above name on mailing label.n Sircon’s Producer WorkbenchMeet your licensing and renewal needsquickly and easily on the web. PIA member-only 15% discount. Visit www.PIANET.com/Sirconn United Parcel ServiceReceive reduced rates on many popularovernight and 2nd day air shippingoptions. Call (800) 325-7000 or your localUPS representative and mention “BidCode #CP990007896.”

Visit the PIA Main Street Store at www.PIANET.com or use the information below to act now.

PRSRT STANDARDU.S POSTAGE

PAIDPERMIT #593

MERRIFIELD, VA400 N. Washington StreetAlexandria, VA 22314

Help Build Your Family’s Financial Future With

PIA Trust Insurance Plans

INSURANCE PLANS DESIGNED WITH LOCAL AGENTS IN MIND

As a PIA Member* serving

Main Street America, you and

your employees have access

to a variety of high-quality,

competitively priced

insurance plans.

Plans available include:

! Long Term Disability! Short Term Disability! Business Overhead Expense! Accidental Death & Dismemberment

! Basic Term Life**! Voluntary Term Life! Dependent Term Life! Hospital Indemnity

PIA SERVICES GROUPINSURANCE FUND

For additional information, contact your local PIA A�liateor call the Plan Administrator at 1-800-336-4759.

Information also available on-line at www.piatrust.com.*PIA National membership, when required, must be current at all times.

**Only available if 100% employer paid and if the employer and 100% of the employees enroll.No medical underwriting necessary up to guaranteed issue limits.

Policies or provisions may vary or be unavailable in some states. Policies have exclusions or limitations which may a�ect any bene�ts payable.Underwritten by Unimerica Insurance Company, Portland, ME. Administered by Lockton Risk Services.