Policy Magazine, summer 2012

POLICYProject CAP: New IIABA Web PortalProud President

Summer 2012magazineOklahoma’s

RICHLY DESERVEDBecause Vaughn Graham exemplifies the highest ideals of IIAO, he is the latest to receive the Eagle of Excellence Award

We understand the coverage needs of contractors and property owners.

Construction is one of the primary industry segments served by Mid-Continent,

but our support doesn’t end with General Liability. We also have specific

expertise in Contractors Surety, Builder’s Risk, Installation Floaters, Contractors

Equipment and Motor Truck Cargo.

M I D - C O N T I N E N T G R O U P

1437 South Boulder I Suite 200 Tulsa, Oklahoma 74119

www.mcg-ins.com

Mid-Continent is a member of Great American Insurance Group.

301 E. Fourth Street I Cincinnati, OH 45202 I www.GreatAmericanInsurance.com 0042-13-MCG (01/11)

®

PUBLISHER Dan Ramsey, CIC EDITOR Kathy Rose, CPIW MANAGING EDITOR Kathryn Jenson White ASSISTANT EDITOR Sarah Cavanah PRODUCTION EDITOR Susan Titus, PMP

PRESIDENT/ CHIEf ExECUTIvE OffICER Dan Ramsey, CIC

CHIEf OPERATING OffICER Susan J. Titus, PMP

CHIEf fINANCIAL OffICER Malinda Day

OkMAP ADMINISTRATOR Cindy Munden, CISR

EDUCATION DIRECTOR Susie Current

EDUCATION/MEMBERSHIP COORDINATOR Cathy Cinotto

fARM/RLI PROGRAM MANAGER Cindy Munden, CISR

E&O PROGRAM MANAGER Lyra Roberts

EDITORIAL STAff

PROfESSIONAL STAff

POLICY is the official publication of the Independent Insurance Agents of Oklahoma. POLICY is published quarterly and distributed to all member agen-cies and other interested parties in Oklahoma. Manuscripts and contributions are welcome, and will be considered for publication at the discretion of the IIAO Publications Committee.

Correspondence and advertising inquiries may be ad-dressed to IIAO, P.O. Box 13490, Oklahoma City, OK 73113. Ph: 405-840-4426 or 1-800-324-4426

The Independent Insurance Agents of Oklahoma is the

largest insurance trade association in Oklahoma. With

more than 475 independent insurance agencies, we

represent nearly 4,000 independent insurance agents

and their employees. IIAO member agencies range in

size from one person to some of the largest agencies in

the region.

Founded in 1906 as the Oklahoma Association of Local Fire

Insurance Agents, IIAO is a result of the consolidation of

the Independent Insurance Agents of Oklahoma, Inc. (IIAO)

and the Oklahoma Association of Professional Insurance

Agents (OAPIA) on Jan. 1, 1992.

IIAO policy is set by a board of directors elected at the an-

nual convention. Policy is implemented by a professional

staff located in Oklahoma City. IIAO’s mission, shown below,

is carried out through a variety of programs designed to

enhance the business of independent insurance agencies.

IIAO is an active advocate on behalf of independent agents

before legislative, regulatory and judicial groups in Okla-

homa and at the federal level.

IIAO is affiliated at the national level with the Independent

Insurance Agents and Brokers of America with offices in

Alexandria, Va., and Washington, D.C.

IIAO is an excellent source of information through

POLICY magazine, published quarterly, and the

Oklahoma Agent, a monthly newsletter of time-sensitive

material for its members.

ABOUT IIAO

The mission of the Independent Insurance Agents of Oklahoma, working in the public’s best interests, through active member participation, is to be the unrelenting advocate of independent insurance agents and to fulfill the education, political and business needs of its members.

IIAO MISSION STATEMENT

ON THE COVER2012 IIAO chairman Jed Dillingham of Enid’s Dillingham Insurance presents Vaughn Graham of Tulsa’s Rich & Cartmill with the Eagle of Excellence award at Hypopanty 2012. The Independent Insurance Agents of Oklahoma created the Eagle of Excellence award in 1981. The association bestows the award only when an individual’s efforts clearly call to the association’s officers and executive committee to recognize him or her. The last recipient was IIAO CEO Dan Ramsey in 2009. (See Newsmakers story on Page 17 for more information.)

COLUMNS 2 CHAIRMAN Jed Dillingham 4 ExTRA Dan Ramsey, CIC 6 LEGAL ISSUES Tom Cooper 7 YOUNG AGENTS COMMITTEE Ryan Bebee 8 EDUCATION Susie Current 10 STATE DIRECTOR Vaughn Graham, CIC, CPCU, AFSB 11 OKLAHOMA INSURANCE COMMISSIONER John Doak

fEATURES 13 OkPAC and InsurPac Investors 23 Optimize Yourself 24 Certificate Stories 26 RLI Protection for Home-Based Businesses 28 Advocacy: Not Easily Quantified 30 KIS 32 Did You Feel That?

Vol. 34, No. 4

NEWSMAkERS page 16

THE BIG STORY

18PROJECT CAPDenise Johnson and Tom Minkler

CHAIR

REGIONAL DIRECTORS

2 POLICY Summer 2012

IIAO LEADERSHIP

Jed Dillingham

OFFICERS

RED CARPET ZONE 1

Phil Eitzen, CIC

Eitzen Agency, Fairview

GREAT PLAINS ZONE 2

Larry Neal, CIC, AAI, LUTCfJ.T. Neal Agency,

Lawton

GREEN COUNTRYZONE 3

Thad Leonard

Carl M. Leonard & Son, Tulsa

FRONTIER COUNTRYZONE 4

Donna Baker, CIC, CPIW

C.L. Frates & Co., OKC

LAKE & TRAIL ZONE 5

Mike Somers, CIC

Somers Insurance Agency, Lindsay

KIAMICHI ZONE 6

kelly Smith, CIC

JWB Insurance, Holdenville

CHAIRMAN-ELECTEd McGrath, CICWilcox & McGrath

Insurance, OKC

VICE CHAIRMANDavid Eaton, CIC

Advantage Insurance Group, El Reno

SECRETARY-TREASURERMark Carlin, CIC

Cole Paine & Carlin, OKC

STATE DIRECTORvaughn Graham, CIC, CPCU, AfSB

Rich & Cartmill, Tulsa

IMMEDIATE PAST CHAIRMAN

Denise Johnson, CICECI Insurance, Piedmont

DIRECTORSBrad Berrong

Berrong Insurance Agency, Weatherford

Tom CarawayAgar-Ford-Jarmon & Muldrow/INSURICA,

Norman

Bruce Jordan, CICJordan Carris Agency,

McAlester

Wes Magill, CICMagill Insurance Agency,

Weatherford

Mark Tedford, CICTedford Insurance,

Jenks

Chris Torres, CICOklahoma Agents

Alliance, OKC

Dillingham Insurance, Enid

CHAIRMAN

Whether the storm clouds are gathering, important insurance business is brewing in Washington, D.C., or networking and education opportunities are taking place, IIAO is part of the picture.

IIAO On the Scene

Congratulations to the Oklahoma City Thunder on the amazing season and postseason the team are having in this compressed NBA season. It seems as if there is a game on television almost every night. The Thunder

mascot is named Rumble. Last night I realized how ap-propriate both of these names are for an Oklahoma team.

Not long ago, two supercells rose up to the heavens and dropped grapefruit-sized hail in towns like Woodward, Moreland, Sharon and Mutual. Tornados spun up and down as the storms moved southeast toward the Red River. The thunder rumbled, and the lightning flashed.

We were lucky that only two individuals were injured from breaking glass.

Many insurance agencies, like Dillingham Insurance, activated their catastrophe plans to reach out to clients in the affected areas. We had just finished updating our plan using IIAO-provided resources to improve it. You can do this as well by accessing the Oklahoma specific plan avail-able at iiaok.com, under News/Press Releases.

I was looking at Facebook a couple of nights ago to find out what my children are up to and noticed a new posting from ECI Insurance on my wall. It caught my eye because of its focus on tornado season and the resources available from Trusted Choice on what to do before, during and after a tornado. You can access this valuable information at TrustedChoice.com. You can use the articles you find there in your newsletters and social media communications to your clients. Denise, congratulations for your leading edge use of social media to get meaningful information to your clients.

It has certainly been a crazy spring season. I hope the state survives the remainder of this hail, lightning and tornado season without too much property damage or any more injuries.

A team from your executive committee and young agents descended upon Washington, D.C., in late April. Our goal was to straighten out our legislators, but the reality is that

they are already doing everything they possibly can to bring fiscal responsibility to our federal government and shrink the ever-growing national debt. We need a leader at the top who can inspire everyone to get behind a program to accomplish this. This will be painful for all, but if we truly would set this as a national priority, we could get it done.

During our trip, your State Director Vaughn Graham won election to the IIABA executive committee. Vaughn has done a wonderful job as our SND and will do great things for our industry in his new position. Vaughn, thanks for your service to Oklahoma. We appreciate everything you have done and will continue to do when you are elected.

Hypopanty was a great success this year. Our program featured two nationally renowned speakers: Ed Lamont and Jon Persky. Their sessions included CE that is available to you as an IIAO member. We were also honored to have with us IIABA Vice Chairman Thomas Minkler.

This event provided a great opportunity for all of us to network and catch up with longtime industry friends. For the third year in a row we ran our conference in conjunc-tion with that of the Young Agents. This exciting group of young people is the key to the future of our industry and association. We welcome them, too, with a special “Hello.”

Finally, I would like to thank the executive committee, board of directors and IIAO staff for making my year an en-joyable one. With everyone else working so hard on behalf of IIAO, my job as chairman has been much easier than it otherwise would have been. Thank you all very much.

You can access catastrophe plans specific to Oklahoma at iiaok.com under News/Press Releases.

Emails and teleconferencing may be time-savers, but there is no substitute for the one-to-one relationships with insurance professionals who know you and your community. Early on, EMC Insurance Companies realized the value of being close to agents and policyholders. That value continues to pay off in products and services tailored to individual market needs. Whatever the future holds, insurance will always be a relationship business and EMC will continue to keep those relationships as close to your office as possible.

We’re celebrating our 100th year by planning for our next 100 years.

Tanya Wentzel, Des Moines Branch Marketing ManagerTroy Boysen, Minneapolis Branch Commercial UnderwriterConnie Jarzynka, Omaha Branch Claims Adjuster

Wichita Branch: 800.223.0562 | Home Office: Des Moines, IA www.emcins.com

© Copyright Employers Mutual Casualty Company 2011 All rights reserved

5269_EMC_AD_Group_OkAsscInsAgents7.5x10.indd 1 1/5/11 9:09 AM

ExTRA

Dan Ramsey CIC

PRESIDENT CHIEF ExECUTIVE

OFFICER

Our Oklahoma representatives in the U.S. Legislature are friends and supporters. Our conferences are well attended and informative. Our leadership continues to excel. Oklahoma independent agents have it all.


Good Times for IIAO

So many positive things have been going on around IIAO the past 30 days that it is really hard to know what to begin to write about.

Let’s start with the IIABA Legislative Conference in Washington, D.C. Our annual

call on the Oklahoma congressional delegation was another huge success thanks in large part to the active participation of 25 IIAO representatives. We are extremely fortunate to have a delegation that, for the most part, supports our issues in Washington. You know you are off to a good start when your senator greets you with a big hug – and that’s exactly the way our meeting began with Sen. James Inhofe, R-Okla. Spending time with him is always a great delight. Rep. Frank Lucas, R-Okla., is the chairman of the House Agriculture Committee and is extremely knowledge-able about the issues of flood and crop insurance. Rep. John Sullivan, R-Okla., is an old friend of mine from the

Oklahoma Legislature: We were in the class of 1994. We swapped stories of our legislative days and talked about his representing the speaker at the recent Supreme Court hearings on the federal health care law.

Unfortunately, we were unable to visit with Rep. Tom Cole, R-Okla., or Sen. Dan Boren, D-Okla. They have both been great allies of ours. We were especially disappointed not to see Boren, as he is not seeking reelection this year.

One of the highlights of that week was the election of Vaughn Graham of Rich & Cartmill. in Tulsa as the at-large member of the IIABA Executive Committee. With his elec-tion, IIAO will have two members holding positions on the six-person leadership team. Bob Bramlett of the Bramlett Agency in Ardmore is chairman-elect. He will be installed as the national chairman in September. We are extremely proud that both men will greatly influence the direction of IIABA over the next several years. Having known both

SAVE SOME TREES & YOUR SANITY WITH www.EagleEZLife.comNO COMMISSION REDUCTION | COMPLETELY PAPERLESS | ONE APP, MULTIPLE CARRIERS

800-627-3100 | www.EagleEZLife.com

Go Visit www.EagleEZLife.com. We’ve invested in our own technology to make your life easier. Unlike other systems, it’s free to you, and completely paperless.

Shop Get quotes instantly, and go from quote to submission in under 5 minutes. And best of all, you never have to retype a thing if changing carriers mid-stream.

Relax EagleEZLife.com helps you service your clients faster, which makes you look like a true expert in their eyes. There’s no cost, no risk, or commission reduction. It simply couldn’t be easier.

Visit EagleEZLife.com with your next application. Or, give us a call today at 800-627-3100 with questions. You’ll be amazed at how “EZ” life can be.

www.EagleEZLife.com

ExTRA

POLICY Summer 2012 5

of them for more than 30 years, I can assure you that our national organization is in extremely capable hands.

Upon returning to Oklahoma, the Trusted Choice inde-pendent insurance agents of Oklahoma participated again this year in the state FFA Convention. What a truly remark-able event. High school students from every corner of the state gathered at the Cox Convention Center in OKC, and IIAO was very visible in this participation. Our booth at the trade show drew crowds as we once again, through the help of Wes Magill, had Pistol Pete there with us: perfect crowd, perfect venue. IIAO Chairman Jed Dillingham was a featured speaker at the annual legislative dinner; he in-spired as he informed a large group of sponsors, students and legislators about Trusted Choice agents.

Most recently, we concluded what I believe was our finest Hypopanty event. We had approximately 800 people attending events throughout the week. The golf tournament was packed; Bricktown Brewery seemed packed wall-to-wall with people — around 250 we estimate. About 450 attended the meetings and trade show, and more than 100

remained for the Young Agents Leadership Conference. Young agents were treated to a truly outstanding program on the need to de-commodify insurance by emphasizing service and value over lowest price.

I was proud but not surprised to see how the events came together and ran so smoothly. The programs were out-standing. Tom Minkler, vice chairman of the Independent Insurance Agents and Brokers of America, gave our members their first real look at Project CAP, the latest in online presence for independent agents. Read more about that later in this issue of the magazine.

IIAO members elected Ed McGrath as chairman for the coming year. We swore in a new slate of officers to assume their responsibilities July 1. We were especially proud to present Vaughn Graham the Eagle of Excellence Award in recognition of his many years of service to IIAO and the insurance industry.

Thanks to everyone who attended. Your IIAO board and staff are already working on our plans to make Hypopanty even bigger and better next year.

Our cOMPreHensiveMOBile HOMeOwners insurance

rewarDs Our agents.

• 20% new Business commission

• Partnership Profit sharing

• 100,000 Maximum Policy limits

• 50+ age Of insured Discounts

• newer Home Discounts

• Fast Online Quotes, Policies and endorsements

National Security strives to provide competitive, affordable insurance for policyholders, but we also reward our agents with some of the highest commissions in the industry, a partnership profit sharing program and an award-winning web site that provides fast online quotes, policies, and endorsements. Find out more by calling 1-800-239-2358 x213 or visit us on the web at www.nationalsecuritygroup.com. Elba, Alabama • 800-239-2358


Pignato, Cooper, Kolker &

Roberson, P.C.

Tom Cooper

LEGAL

COLUMNIST

Oklahoma’s statutes on when clients can successfully sue an agent for placing them with a company that goes under are vague, but cases from other states can provide good guidance for client and self protection.

Insurer Insolvency and Agent Responsibility

Over the past several years, I have handled a handful of cases in which at least one of the allegations concerns the insured’s criticism of the agent for placing the insured with a company that eventually became insolvent.

Typically, these types of claims arise in the context of surplus lines insurers.

What duty, if any, does a producer have to investigate the financial condition of an insurer from whom coverage is sought? The Oklahoma Insurance Code simply states that “a surplus line broker shall not knowingly place any such coverage in an insurer which is in an unsound financial condition.” There is no case law in Oklahoma that elabo-rates upon this statute or that otherwise defines or describes the extent to which a producer should make an independent inquiry as to an insurer’s financial condition. Some cases from other jurisdictions, however, warrant some discussion.

The appellate court in our neighbor state of Arkansas handed down a helpful decision in Williams-Berryman v. Morphis. There, the insureds suffered a fire loss and submitted a claim to the insurer. The insurer was unable to pay because of insolvency. The insureds alleged that the agency chose the companies from whom to obtain quotes and further alleged that the agency “owed a duty to its cus-tomers to secure insurance policies in solvent companies.” The court dismissed the case, observing that the insurer was “duly authorized to do business in Arkansas and was solvent insofar as the insurance commissioner, or anyone else, knew when the policy was issued.” The court further observed that where there is no evidence that an agency knew, or by exercise of reasonable care could have known, of an insurer’s insolvency at the time the policy was issued, there can be no liability on the part of the agency.

In Higginbotham and Associates, Inc. v. Greer, an ap-pellate court in Texas had an opportunity to determine the extent of a producer’s obligation in this regard. The insured brought suit against the agent for negligence and misrepre-sentation after the insurer failed to pay a valid claim. The Texas appellate court determined that an insurance agent is not liable for an insured’s unpaid claim as a result of an insurer’s insolvency if the insurer was solvent at the time the policy is procured, unless at that time, or at a later time when the insured could be protected, the agent knows or by exercise of reasonable diligence should know of facts or circumstances that would put a reasonable agent on notice that having coverage with the subject insurer presents an unreasonable risk. Therefore, Texas seems to expand the

obligation beyond the initial time of procurement, but only in rare circumstances (i.e. when the agent is somehow put on notice before the general public of a significant problem with a particular insured).

For an example of a case in which an agent went too far and could not gain a dismissal of the action, a case from Pennsylvania is illustrative. In Al’s Café v. Sanders Insurance Agency, a man suffered severe personal in-juries in an automobile accident after Al’s Café served him alcohol when he was already visibly intoxicated. He sued Al’s Café, which turned the claim over to its liquor liability insurer under a policy that the Sanders Insurance Agency had procured. Unfortunately, the insurer was not licensed to do business in Pennsylvania and was in such poor financial condition that at the time of the loss it had been placed into liquidation. The evidence revealed that at the time the policy was sold to Al’s Café, the agent af-firmatively told the insured, without any factual basis, that the insurer was “a AAA rated company,” notwithstand-ing that even a cursory review of the insurer’s financial condition “would have revealed that it had suffered and was suffering financial losses and in fact had the lowest rating in the industry.”

In summary, the law on this particular issue is typically quite favorable to agents. Insurance professionals have an obligation to place a customer with a financially sound in-surer, but that obligation is generally graded as of the time of procurement of the policy. And, generally speaking, the agent has every right to rely upon the same publicly avail-able information available to the customer. As stated by one leading treatise on agent and broker liability, “Brokers do not have special insight into insurer’s financial status, nor do they have access to insurer’s financial information beyond that which is publicly available.”

What duty, if any, does a producer have to investigate the financial condition of an insurer f rom whom coverage is sought?


The spring saw an impressive series of events for young agents, and even more opportunities are on the way for those who want to continue improving their professional opportunities.

YAC

CHAIR, YOUNG AGENTS

COMMITTEE

Ryan Bebee

Cole Paine & Carlin

A Good kind of Busy

The Young Agents have a lot of exciting events and activities going on. The Future Insurance Leaders of Oklahoma kicked off on March 28, and I was very happy to welcome 28 new young agents to the 2012 program. We are the only

state association and young agent program in the nation to have a leadership program of this nature. It was formed in 2008, so this is our fourth class and by far the largest participation we have had.

This may become an every-other-year program depend-ing on response and demand. Participants are from small, large, rural and metro agencies. FILO participants are guided through six separately scheduled modules, includ-ing IIAO orientation, legislation and regulatory affairs, claims and risk management, sales/production motivation, leadership and a community service project. This year’s group is truly a super one.

We had a very successful Day at the Capitol in April. About 50 agents and company representatives, both young

and young-at-heart, gathered for a reunion lunch at Coles Garden. A big thanks to OSLA members for sponsoring the luncheon.

Trent Willis, YA incoming chairman, and Daniel O’Neil represented the Oklahoma Young Agents at the National Big “I” Legislative Conference in Washington, D.C., April 25-28. This was Daniel’s first trip to the conference.

“I have a whole new respect and interest in the process of our legislative team fighting on our behalf now,” he said. “I look forward to getting more involved and to helping educate others who really just don’t get it. The time spent visiting our representatives on Capitol Hill was like going to a professional sports game or live concert. You just have a whole new respect once you see it firsthand.”

The Young Agents Conference was May 10-11. We had record attendance once again this year and a wonderful speaker. Look in the next Policy issue for all of the details

from conference. Please get involved in our upcoming opportunities.

We rotate between Oklahoma City and Tulsa for lunch to give Young Agents an opportunity to network. The Lunch Bunch dates for the rest of the year are Aug. 28, Sept. 25, Dec. 4 and Dec. 18. I invite you to attend a lunch and start getting involved. I also encourage agency owners to send their young producers for networking and educational opportunities.

Effective July 1, I pass the reins to Trent as the new Young Agents chairman. I have enjoyed my time as chair-man, and I encourage each and every one of you to get in-volved and make a difference in this great industry. Please contact Lyra Roberts at IIAO for more information about getting involved and check us out online at youngagents.com and facebook.com/OKYAC).

Thank you for a wonderful year.

Garage General Liability

Property

TransportationPremium Finance

Liquor Liability

Transportation and Garage - 1.800.672.0347Amanda Covington or Colby Yarbrough

Property / General Liability - 1.800.824.1740Josh Blevins

Professional - 1.800.824.1740Tricia Zeff Lewis

For Transportation visit www.insurewithnai.com

For quick quotes call or visit us on the web1-800-672-0347 or www.nsb-nai.com

I encourage agency owners to send their young producers to YAC for networking and educational opportunities.

We’re on top of changes to the designation courses so you don’t have to be; check out our up-to-date guide of what’s available and what’s required of you to fulfill CE requirements and/or earn designations.


Course Update News

EDUCATION DIRECTOR

Susie Current

EDUCATION

Over the last several years, the CIC and CISR classes have gone through many transforma-tions in assigning the number of CE hours you receive for taking these classes. We are happy to be able to offer you all the hours

you need with the CIC/CRM/CISR courses. Here’s how it works now.

The statute states you must take 24 or more hours of an approved designation course and that those will give you all the hours you need to fulfill your insurance license requirement for that licensing period.

Each CIC is approved for 20 hours of CE, including two hours of ethics and one hour of legislative credit. It is this way because if you take two CICs you will be well past your 24 hours of CE and will be able to get your other ethics and legislative credits as well. So by taking one CIC a year — two CIC Institutes in a single licensing period — you will have all the hours you need to fulfill

your license requirement. It is structurally this way for both the CIC and the CRM.

This works well for almost everyone who is either working on her or his designation or is maintaining that designation

Expanding your range of niche

business is one way of increasing it.

Bituminous gives agents an “in” with

a wider variety of contractors. And, our

programs –appealing to contractors’

specific needs – encourage valuable

repeat business.

Bituminous remains the stable source

for specialty business. Visit us online at

www.bituminousinsurance.com

to see how you can run with our ideas.

Member of the Old Republic Insurance Group9GREAT IDEASFOR AGENCY GROWTH

General & Building Trades Contractors

Transportation Construction Contractors

Utility Construction Contractors

Land Improvement Contractors

Water Well Drilling

Structural Moving

Construction Materials Suppliers

Forest Products

On Shore Oil & Gas Extraction

Oklahoma City Branch Office1601 NW Expressway, Suite 700P.O. Box 12936Oklahoma City, OK 73157-2936(405) 767-2064 or 1-800-947-0809FAX (405) 767-9438www.bituminousinsurance.com

If you have thought about starting your designations, know that you can take the test to work toward your designation risk free for the classroom courses.


EDUCATION

because of the need to take one CIC a year. The CISR courses are much shorter but work

similarly. If you take three CISR courses per li-censing period, you will have met your licensing requirement. Each course is approved for eight hours, including one hour of ethics and one hour of legislative credit.

We have worked very hard with the insurance department to show how valuable these classes are and how much participants get out of these courses.

If you have thought about starting your CIC/CRM/CISR designations but are nervous, know that you can take the test to work toward your designation risk free for the classroom courses. In addition to paying nothing extra for the test, you will earn your CE whether you pass or fail the exam. With the CE rules helping you receive all of the CE needed toward your license, now is a great time to start working toward your designation.

The CIC program consists of 20 hours of class-room education on one of these five topics: agency management, commercial casualty, commercial property, life and health, and personal lines. After the classroom course, you may take an optional essay exam. You have five years from the time you pass your first exam to pass the rest of the courses. Once you have passed all five courses, you will have earned the CIC designation.

The CISR courses are eight-hour courses. The five topics for CISR are agency operations, com-mercial casualty, commercial property, personal auto and personal residential. This exam consists of 50 multiple choice questions, and you have three years from the time you pass your first exam to complete your designation.

We have many options for you, not only to fulfill your CE requirements but also to experience qual-ity education to help you in your daily business by enabling you to gain new customers while serving current clients better.

Visit our education calendar at iiaok.com/edu-cation for more information. You may also call or email me with your questions. We look forward to serving all of your education needs.

Some agents have seen it all.

That's whenthey call on us.

workerS' comp inSurance

american interstate insurance company

Silver oak casualty inc.

toll free: 1.800.381.6378 fax: 1.800.450.1091 www.amerisafe.com

You’re an independent agent.

Who’s got

your back?

Protect.Our superior coverage through

Swiss Re and our expert claims

teams are in your corner in the

event of a claim.

Prevent.Our risk management

resources keep your agency

from making common

preventable mistakes.

Prosper.When you know you have the

best agency E&O protection,

you can focus on growing your

most important asset–your

business.

www.independentagent.com/EO

The Big “I” Professional Liability Program

The Big “I” and Swiss Re are jointly committed to providing IIABA members with leading

edge agency E&O products and services. The IIABA and its federation of 51 state

associations endorse Swiss Re’s comprehensive professional liability program.

Insurance products underwritten by Westport Insurance Corporation, Overland Park, Kansas.

Westport is a member of the Swiss Re group of companies and is licensed in all 50 states and the District of Columbia. ©2008 Big “I” Advantage, Inc. and Swiss Re


OKLAHOMA INSURANCE

COMMISSIONER

John Doak

OID UPDATE

The Federal Insurance Office was created to fill a regulatory void that doesn’t exist.

“fixing” the Unbroken

For more than 150 years, the states have pro-tected consumers while maintaining vibrant and solvent insurance markets. Unfortunately, in the wake of the 2007-08 financial crisis the federal government believes it must assume

these responsibilities.Effective regulatory systems are in place in every state

for insurance product filing, licensing and consumer assis-tance. State insurance departments also collect insurance taxes, monitor company solvency and investigate fraud.

Insurance commissioners are elected by the people in 11 states. Most others are appointed by their governors. Unlike federal bureaucrats, these commissioners and di-rectors serve in roles closer and more responsive to voters.

Since 1871, the National Association of Insurance Commissioners has facilitated state regulators’ efforts to set benchmarks and pursue mutual goals. Working cooperatively, state insurance departments have modern-ized insurance regulation and developed standards that facilitate business across state lines.

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 gave the federal government broad powers to usurp state insurance regulation. A legislative byproduct of the financial collapse of 2007-08, in part, Dodd-Frank created the Federal Insurance Office. This new agency within the U.S. Department of the Treasury provides additional oversight for an industry already among the nation’s best-regulated.

This might be understandable if insurers played any significant role in the financial meltdown, but they did not. Even in the case of taxpayer-rescued AIG, it was not the conglomerate’s insurance business that tanked. Periodic financial examinations and strong capital requirements by state regulators minimize such failures. Each state also maintains a guarantee fund protecting consumers in the event of a company’s insolvency, and no state’s guarantee fund has ever failed to pay when a company went under.

It is ironic that the Federal Insurance Office was birthed because the feds failed so miserably at assessing systemic risk in the financial markets. Washington’s track record on creating effective bureaucracy is poor, yet the FIO gives Washington new powers over an industry it has never before policed.

Beyond the small-print stating “we promise to get it right this time” are practical concerns about bureaucratic redun-dancies escalating costs, clouding enforcement and stifling product innovation, and the prospect that this is the first step in an ill-advised federal takeover of insurance regulation.

The FIO introduces another agency to which companies

must report – one that assesses systemic risk in the industry (though states already monitor solvency), gathers information on insurers’ business practices (by subpoena if necessary), and has the power to “recommend” to the new Financial Stability Oversight Council that an insurer be designated a “nonbank financial company” supervised by the Federal Reserve.

Staffing for this dubious work will cost Americans in federal taxes, while insurers’ compliance expenses will cost Americans on their premiums. Proposals that would give insurers the choice of federal chartering rather than state li-censing raise jurisdictional questions about insurance crime investigation and strip state commissioners of their ability to halt suspect insurers through prompt license revocation.

The FIO also will determine whether to preempt certain state insurance laws. Such significant authority invested in a sub-division of a federal agency that never before held any jurisdiction over insurance is ominous. So are linguistic red flags within the voluminous Dodd-Frank legislation.

Title V stipulates the legislation shall not be construed to establish or provide the Federal Insurance Office or Treasury with “general supervisory or regulatory authority” over insurance, yet the law already grants specific and sub-stantial authority, including these powers to preempt state law. In a truly open-ended passage, the FIO is empowered “to perform such other related duties and authorities as may be assigned” by the secretary of the Treasury.

Finally, the director of the Federal Insurance Office shall submit to Congress a report on “how to modernize and improve the system of insurance regulation in the United States.” A 60-day period for public comments to be incorporated in this report recently began. In the report, the director is to identify “gaps in state regulation” and consider “regulation of insur-ance companies and affiliates on a consolidated basis.”

One needn’t be a states-rights alarmist to see the writ-ing on the wall for state insurance departments. The FIO drives a wedge between insurers, policyholders and rightful regulators in each state Capitol.

Sufficient laws governing insurance are on the state books. While these laws force insurers to tailor offerings for each market, they also discourage one-size-fits-all policies and encourage innovation. Legislatures are far more nimble than Congress at reforming insurance laws, and consumers everywhere would lose if the federal government were left investigating fraud or resolving claim disputes.

States have successfully regulated insurance since Oklahoma was Indian Territory. But preserving state regula-tion of the insurance industry isn’t a matter of territory or tradition. It is a matter of trust.


STATE DIRECTOR

vaughn Graham CIC, CPCU, AfSB

SD

I’m pleased to turn the position of state national director over to the talented and experienced Denise Johnson and proud to continue serving you as a member of IIABA’s Executive Committee.

The Next Step

I can report to each of you what a sight it was to see between 1,100 and 1,200 Trusted Choice inde-pendent insurance agents climb the Capitol steps in Washington during April’s National Legislative Conference and make personal calls on their states’

members of Congress. It is amazing to witness the power of IIABA’s advocacy

in the offices and halls of Congress with the legislators and their staffs who hold our livelihood in their hands through their rules- and regulation- making abilities and through the legislation they consider on a daily basis. Our meetings with each congressman and both senators in Oklahoma’s delegation reinforced our work done in Oklahoma and in Washington to build trust and relationships relating to insurance matters and how they will affect Oklahomans.

I would be remiss if I did not take this opportunity to remind us of a couple of things. First, as my good friend Mike Larges, director from Michigan, points out, InsurPac is the fuel that runs the legislative advocacy engine for IIABA members. Many in authority do not perceive our involvement as a benefit, only an expense. InsurPac not only allows us to help those who understand the value we bring to the insurance-buying public but also to tell our story to others in the hope of educating them about the value we bring to public on all things insurance.

If you have not yet done so, please make your invest-ment in InsurPac and also — not in lieu of — to our own state PAC, OkPac. When you do so, you make a vitally important investment.

On a related note, if you have never been to Washington to participate in our National Legislative Conference, please consider joining other Oklahoma independent insur-ance agents in April 2013 for a couple of days. Better yet, encourage and make it happen for the younger agents you work with or know, so they can see for themselves what I am talking about. This is about all our futures.

This will be my last opportunity in this space writing as Oklahoma’s state director to IIABA. That makes it my last chance to give you information on various subjects affect-ing the Oklahoma insurance environment from a national perspective. Going forward, Denise Johnson, Oklahoma’s newly elected state director, will have that pleasure. Denise will represent Oklahoma and IIAO members well.

In September, at IIABA’s Fall Directors’ Meeting, Bobby Bramlett will become the third Oklahoman to chair the Independent Insurance Agents and Brokers of America. I would encourage you to make plans to celebrate his elec-

tion in Atlanta or in the event we will host in Oklahoma. I am very pleased and, frankly, very humbled to have

recently been elected to IIABA’s Executive Committee following Oklahomans Dick Teubner, Courtney Wood, Bob McKown and Bobby Bramlett to lead the premier independent insurance agents and brokers association.

Over the last 12 months as I have visited with my di-rector peers in all 50 states and the District of Columbia, my vision for IIABA has become very focused and clear: We are one association; we must be a seamless one not seen as divided by any conditions. We share the common features of agents’ advocacy in Oklahoma City and in Washington, D.C., and with the companies we represent. We provide world class representation and development of exclusive, core products and services available only to IIABA member agents, including, but not limited to, our agents E&O protection, IA magazine, Trusted Choice, Virtual University, the Consumer Agent Portal and the Agents Council on Technology. IIABA should be seen by our customers, consumers and in all parts of the insur-ance marketplace as providing our members a “sustaining competitive advantage.” This important organization helps ensure no independent insurance agent will feel left behind or left out of our profession’s forward progress.

Thank you for giving me this special honor of represent-ing IIAO members as a member of the board of directors for the Independent Insurance Agents and Brokers of America. This experience is one Candace and I will always hold dear.

It is amazing to witness t h e p o w e r o f I I A B A ’ s advocacy in the offices and halls of Congress with the legislators and their staffs who hold our livelihood in their hands.


Insure Your Future! InsurPac OkPac Independent Insurance Agents & Brokers of America Independent Insurance Agents of Oklahoma c/o IIAO, PO Box 13490, OKC, OK 73113 IIAO, PO Box 13490, OKC, OK 73113 P: 202/863-7000, F: 405/840-4450 [email protected] P: 405/840-4426; F: 405/840-4450 [email protected] _____________________________________________________________________________________________________________________ OkPac Contribution

Yes, I want to INSURE MY FUTURE with a Personal Contribution to OkPac! (Check contribution below.)

$5000 Millenium $2500 Platinum $1000 Centennial $500 Gold $250 Pioneer $150 Founders $100 Young Agent Other $_______ InsurPac Contribution

Yes, I want to INSURE MY FUTURE with a Personal Contribution to InsurPac! (Check contribution below.)

$5000 Millenium $2500 Platinum $1000 Centennial $500 Gold $250 Pioneer $150 Founders $100 Young Agent Other $_______ _____________________________________________________________________________________________________________________

Contributor Information Name ____________________________________________________ Occupation ______________________

Agency _____________________________________________________________________________________

Address ____________________________________________________________________________________

City _________________________________________ State _____________ Zip ______________________

Phone _________________________________ Email ______________________________________________

Declaration: The contribution listed above was freely and voluntarily given by me from my personal property. I have not, directly or indirectly, been compensated or reimbursed for the contribution listed above. Signature ______________________________________________________________ Date ______________ _____________________________________________________________________________________________________________________

Payment Information (All contributions must be made by PERSONAL check or PERSONAL credit card.)

Personal Check – Separate personal checks made payable to InsurPac and OkPac. $____________ to InsurPac $____________ to OkPac Personal Credit Card – One-time personal credit card contribution. $____________ to InsurPac $____________ to OkPac

Credit card information: MasterCard Visa American Express Credit Card Number ________________________________________________ Expiration Date ____________

Name as it appears on card _____________________________________________________________________

Contributions or gifts to InsurPac and OkPac are not deductible as charitable contributions for purposes of federal income tax.Federal and State law require us to use our best efforts to collect and report the name, mailing address, occupation and name of employer

for each individual. Your contribution should be considered strictly voluntary. Any corporate contributions are prohibited.


Jack AllenDonna BakerNeil BarfieldRyan BebeeBrad BerrongMark BlackstenKent BradfordBob BramlettTravis BrownTom CarawayKent CarlinMark CarlinMax J ClaybakerJeffrey ClymerScott CorneliusJames H CouchWilliam C CoxMalinda Day

John Kelly DeerChad DillinghamJed DillinghamGeoff EatonDavid EatonPhil EitzenBen GorrellVaughn Graham Vaughn Graham JrRaymond Hale IIIRon HammondJohn HarperC Ross HarrisRobert HessAlan HodgesMary Leanna HoltMel HoltClayton Howell

Erin HowellDon JacksDenise JohnsonKasey JonesSteven C JordanBruce JordanTheresa KamlerRuss KellerMichael Ryan KnowlesGuy LandesThad LeonardMark LongBruce MagillMelissa ManusEd McGrathCody McNeillMark McPhersonKelly Miller

Jon MoonMike MosleyChris MoxleyCindy MundenLarry NealHeidi NeaseDaniel O’NeilAllen PaineRob PiearcyStephen PolemanDan RamseyLyra RobertsJanet RogersKathy RoseWill RosebureMichael RossTraci RoweBruce Schutte

Karl SeizingerClark SmithDabney Smith Jr Kelly A. SmithDaniel Somers Mike SomersAdriane StachmusMichael SwentonGary TaberRichard TeubnerRyan TeubnerSusan TitusSteven TolsonBrad WatsonBill WetzelTrent WillisJennifer Wood

Donna BakerJohn BattaliouRyan BebeeBrad BerrongKent BradfordNanette BramlettRobert BramlettTravis BrownTom CarawayKent CarlinScott CorneliusJames CouchWilliam CoxMalinda Day

Jed DillinghamDavid EatonRyan EatonPhillip EitzenBen GorrellVaughn GrahamVaughn Graham JrRaymond Hale IIIRon HammondJohn HarperCharles HarrisChris HayesRobert HessMary Leanna Holt

Mel HoltErin HowellDenise JohnsonKasey JonesTheresa KamlerRyan KnowlesGuy LandesThad LeonardMark LongCraig MagwireMelissa ManusEd McGrathCody McNeillKelly Miller

Jon MoonChris MoxleyLarry NealHeidi NeaseStephen PolemanDan RamseyKathy RoseWill RosebureMike RossTraci RoweBruce SchutteKarl SeizingerClark SmithKelly Smith

William SmithDaniel SomersMike SomersAdriane StachmusRichard TeubnerRyan TeubnerSusan TitusBrad WatsonBill WetzelTrent WillisBernie Zalaznik

2012 OkPAC Investors

2012 InsurPac Investors

OkPAC is IIAO’s political action committee. It provides financial support for state elected officials who will provide support for or have shown support of issues affecting the insurance industry and to those who share our business philosophies. Only individuals or partnerships can make contributions to OkPAC. Under Oklahoma law, OkPAC can accept no contributions from corporations.

InsurPac is IIABA’s political action committee. It pools the voluntary and individual financial contributions of thousands of independent insurance agents to help elect candidates to Congress who share IIABA’s business philosophies. InsurPac is the largest property-casualty insurance industry PAC in the country.

Is your name not on the list? Use the contributor’s statement on the front of this page to donate.

Platinum

Diamond

Independent Insurance Agents of Oklahoma

www.iiaok.com

GoldPatriot National Underwriters Inc./Old Glory Insurance Company

Taber Brokerage ServicesHome Value Insurance Company

Silver Midlands Management Corporation Safeco Insurance National American Insurance Company M.J. Kelly Company Columbia Insurance Group Hartford Insurance Group Chartis Insurance CNA Insurance Access Insurance Company State Auto Insurance Companies Chubb Group of Insurance Companies Union Mutual Insurance Company

Bronze Swett & Crawford of Texas Risk Placement Services, Inc. Farmers Alliance Insurance Companies Acton Inc. Triangle Insurance Company Graham-Rogers Inc. Westphalen Insurance Services AMERISAFE Republic Group of Insurance Companies Equity Insurance Company

2012

E A G L EA G E N C Y

Independent Insurance AgentsAssociation of OKC

Partners

SPECIALTY INSURANCE MANAGERS of Oklahoma


Sharron Barton, 30-year veteran of the insurance industry, will join the Casualty Practice Group, returning to Oklahoma after working for a time in Texas.

Barton joined Swett & Crawford in March 2011 as branch administrative manager in Dallas and has relocated to Oklahoma.

In her role as casualty broker, Barton will bring her experience as an underwriter, manager and marketer into play. Before joining Swett & Crawford, she served as senior executive vice president of Underwriters Service Agency., overseeing day-to-day operations of that MGA. She has also held positions as marketing director of Gerald Grimes & Associates, the marketing arm of MEGA Life and Health Insurance Company, and as underwriting supervisor of the Workers’ Compensation Division of MEGA Life.

“Sharron’s unique experience in underwriting, marketing and management will be a real asset to the growing Casualty Practice Group in Oklahoma,” said Jim Bishop, sales leader of the Swett & Crawford of Texas office. “We are pleased to have her as a member of our team.”

Swett & Crawford, the nation’s oldest and best-regarded* wholesale intermediary, has 97 years of experience in helping to mitigate the risks of doing business here and around the globe. Headquartered in Atlanta, Ga., the blended strength of Swett & Crawford and Coo-per Gay delivers the world’s largest global wholesale brokerage and reinsurance organization, with more than 1,500 insurance professionals in 60 offices on four continents. Swett & Crawford serves independent agents and brokers through specialized property, casualty, oil and gas/energy, professional services, transportation, reinsurance and underwriting practice groups. These groups provide access to commercial insurance prod-ucts and programs, including property and casualty coverages, products liability, reinsurance, professional liability, commercial and public auto liability as well as a host of customized bind-ing authorities and exclusive programs tailored to specific industries, businesses and professionals.

* For the sixth year in a row, the Business Insurance Readers Choice survey named Swett & Crawford the best wholesale broker in the business.

Additional information may be found at www.swett.com

Sharron Barton relocates to Oklahoma with Swett & Crawford

NEWSMAKERS

Dear IIAO....


NEWSMAKERSNEWSMAKERSThe distinguished honor of Office of the Year 2011 went to Brown and Brown Agency of Insurance Professionals during the annual Brown and Brown corporate meeting, held recently in Orlando.

Brown and Brown of Pryor, located at 208 North Mill Street, competed with 175 other offices in 38 states to win this prestigious award. Competi-tion was based on new business growth, retention of clients and increased operating profits.

Lance O’Rourke, executive vice president of the Pryor office, accepted the award. He expressed sincere appreciation to Brown and Brown’s loyal clients, carriers and employees.

“We would not have received this award without the valuable relation-ships with our loyal customers, who have entrusted us with their insur-ance and risk managements needs,” O’Rourke said. “We would also like to thank each of our carrier partners for the trust they have exhibited in our office throughout the years. Every employee contributed to making 2011 a great year for us. It was truly a team effort. We look forward to an even better 2012.”

Pryor office wins national Brown and Brown Office of the Year

Back, from left: Mary Rowe, Tommy Harvey, Kendal Roberts, Marsha Mines, Katie Gann, Lance O’Rourke, Jennifer Flory, Angie Brannon, Adrienne Moon, Amanda Harvey, Levi Richardson and Marla Monett; Front, from left: Bob Slyter, Kathy Hammers, Kerry Casey, Shelly Lawson, Heather Chezem, Laura Bradshaw and Chris Floyd; Not pictured: Shay Veloquio, Joyce Pinkley, Prudence Hagan and Yolanda Haney.

Graham joins elite groupDear IIAO....

The person who receives the Eagle of Excellence award is one the IIAO board presents to recognize a member who has, through exemplary dedication and effort, made an outstanding contribution to the cause of independent insurance agents and who, through actions and words, personifies the charge of the Code of Ethics of the Independent Insurance Agents & Brokers of America.

Vaughn Graham received the award at Hypopanty 2012. Graham, who was elected as an at-large member of the IIABA execu-tive committee for 2013, meets all the criteria for the honor, IIAO CEO Dan Ramsey says.

“Vaughn is a key figure both in IIAO and the insurance industry,” Ramsey says. “His long and illustri-ous career continues to bring just praise to both him and our state. He joins a long line of impressive recipients.”

Roster of Recipients1981 Richard Teubner1982 C. Courtney Wood1990 Robert S. McKown1993 Charles E. Simone1998 James Ware2002 Kent Carlin2008 Bruce Magill2009 Robert M. Bramlett, Jr.2009 Dan Ramsey2012 Vaughn Graham


Welcometo

project

CAP


What is Project CAP? What does Project

CAP do? The Consumer Agent Portal, LLC is a digital marketing product

and service provider to the independent agency, insurance carrier

and broker channel for home and auto personal lines. The name

“Project CAP” was adopted as the working name to be used while

initial development work on products and services is done and a

formal name, identity and brand are developed.

Project CAP is the product of a powerful industry initiative

led by the partnership and investment of Independent Insurance

Agents & Brokers of America and select insurance carriers.

Other Project CAP stakeholders include IIABA’s federation of

51 state affiliates as well as Trusted Choice agencies, brokers

and carriers that participate in Project CAP but are not inves-

tors. Market research shows independent agencies need effective

digital marketing, as demonstrated by the lack of independent

agencies near the top of a Google search for entries such as “auto

insurance madison wi.”

How can Project CAP compete with direct

writers? The independent agency channel must unite as a singular force

of aligned stakeholders and not remain a divided group of 22,000

individual agencies and 225 individual carriers. With the power

of digital marketing, Project CAP can help the independent

agency channel leverage search engine optimization and social

media methods to achieve “organic” visibility (or “earned media”)

and consumer affinity without needing to outspend the massive

budgets of direct writers. Project CAP does not need to create

online demand but only divert a portion of online insurance

consumers to the independent agency channel by

• First,enlistingasmanystakeholdersaspossi

bletopar-

ticipate in Project CAP and create “links” between their

respective online presences. This linking strategy cre-

ates tremendous lift in placement of Project CAP and its

stakeholder partners in search engine results and social

media visibility.

• Next,withProjectCAP’shelp,stakeholdersne

edtopub-

lish and promote unique, quality content.

• Then,insidethatcontent,stakeholdersneedto

implement

specific terms and words used for keyword searches.

• Finally,messagingmust create emotional co

nnections

with consumers to maximize traffic.

Why should agents participate in the portal?

Simply put, the portal provides a stream of qualified, exclusive,

inbound prospects at a very reasonable cost. The cost is low for

a direct, exclusive prospect referral.

What business markets does Project CAP

serve? Project CAP is dedicated to the success of the independent

agency channel with a focus on auto and home personal lines. In

addition, Project CAP will offer some general business insurance

coverages. Future opportunities will be evaluated as success in

this core market is achieved.

Will Project CAP allow companies that

compete against independent agents on

the portal? It is the specific policy of Project CAP to allow participation only

from agencies and carriers whose primary business is the distri-

bution of insurance products through the independent channel.

Where is Project CAP based?

Consumer Agent Portal, LLC is incorporated in the state of

Delaware, and its corporate offices are based in Minneapolis,

Minn., which offers cost management benefits including travel

to/from a central location, access to and cost of quality labor,

reasonable lease expense, and access to interim management.

Will Project CAP be fair and show agencies

and carriers equitably?

All carriers and agencies will be displayed equitably in the

Project CAP results area based on consumer fit. However, there

will be an advertising sponsor display area. Advertisers will be

rotated so not to disadvantage smaller agencies and/or carriers.

Which carriers may participate in the portal?

The portal will be available to all carriers that distribute their

personal lines products primarily through the independent agency

channel. National, super-regional, regional and single-state

domestic carriers are expected to participate.

What if carriers do not participate?

The portal will be available to all carriers that distribute their

personal lines products primarily through the independent agency

channel. National, super-regional, regional and mutual carriers

are expected to participate. Project CAP cannot compel carriers

to participate in the portal but will deliver industry education and

advocacy to encourage understanding of the benefits of participat-

ing. However, even if a carrier is not participating, agencies are

free to place business with any carrier they feel is the best fit.

Project CAP anticipates that the success of portal participation

will encourage increased carrier participation.

How can I get smarter about Project CAP?

• Participateinregularlyscheduledstateassoc

iationcalls

• Participateinongoingstateassociationwebin

ars.

• Make an effort to understand at a strategic level

what

agencies can do to improve their online presence.

• GotoProjectCapMarketing.com

• ProjectCAPisnotexpectingagenciestobeco

meInternet

marketing experts.


A bout two years ago, Johnson and her brother Scott Cornelius, whom she calls the “driving force” behind ECI Insurance Agency’s Web presence and e-marketing focus, had a Homer Simpson “Doh!” moment: They realized, Johnson says, that while they were excellent at selling insurance, they weren’t that great at website building and the related digital activities necessary to a successful virtual sales effort.“Our first website was awful; we were happy if we had 100 hits a month,” she says. “Now, we get 1,100 hits a month, with about 800 unique visitors. The average visit duration is 2 minutes and 26 seconds, and the number of pages per visit is 2.62. The bounce rate is 50 percent, which means people aren’t just jumping in and out. We get about 67 percent new visitors and 33 percent returning.”The numbers Johnson and Cornelius, who is president of the agency, like best, however, are these: They get six to 10 leads a day from their site. They don’t write all those, but they get a shot at the business. And their numbers were up about 22 percent last year.Johnson is sure in her understanding of what all the Google Analytics’ concepts and figures mean and even surer that the reason the bottom line numbers are so good is Insurance Website Builder, a product from ITC, the company ECI turned to for site building and upkeep.

“They’re in that business,” she says. “They know all the tools and tricks of the trade. They keep the website optimized so we appear on the first page of a search for, say, auto insurance Oklahoma City. Sometimes we are ahead of The Yellow Pages, sometimes just below. But we’re on the first page.“Our blog page is the second or third most-visited page on the site. The blogs are filled with search phrases. Insurance Website Builder is ahead of the curve; its experts know what people are interested in now, tornados, for example. We use a lot of company material as content, for which they get credit. So Travelers had a program on wedding insurance, and we featured that. Trusted Choice has fabulous articles we use a lot.”Johnson says the agency’s success in the virtual realm reinforces what she and her brother know: Independent agents cannot ignore the Web as a location for meeting prospective customers. They have on their own, using the expertise of Insurance Website Builder, taken many of the steps Project CAP is now beginning to help other Oklahoma agents take.

“When Project CAP is up and running, we’ll take advantage of that, as well,” she says. “It will be another part of our puzzle. Every single thing digital helps all things digital. The search engine optimization Project CAP provides will complement what we have done in that area. Project CAP will provide superb resources for those who want to get started and those who want to improve their digital marketing.”

Denise JohnsonProducer, ECI Insurance Agency, Piedmont


• Oursitemustbevisuallypleasingandinteresting;wemakevisual/design changes every six to nine months but keep some things constant, like the instant quote button.• Weneedtogivevisitorssomethingtodoorparticipatein.• Wemakeiteasyforthemtogetwherewewantthemtogo.• Peoplestillwanttotalktopeople:Whileitmaynotbethebest in design, we keep our phone number in large numbers at the very top of the page.• Whilewehaveaneasy-to-fill-outinstantquoteoption,95percent of people email and want to then talk. • Wehavetoworkfasttorespond:Wehavethreepeoplework-ing on emails from the site. They must respond within an hour or two. If the inquiry comes on a weekend, they must respond Monday morning. • Wehavelearnedtostudywhatthemajorcompaniesaredo-ing and think about how are they being proactive in Internet sales activities.• Wecan’talwayssayTwitterorFacebookortheWeboronespecific element of our e-marketing works well, but we can say that all those things together work very well for us. They are all pieces of the puzzle.• Wewantasmuchcommunicationaspossiblewithoutbe-ing spam: we started an email marketing program called AgencyBuzz, another ITC product. We enter all leads into this system. Those leads then receive personalized emails from Scott or me, which ITC’s agency marketing team gen-erates for us. They are timely, focused and tied to specific insurance needs. • Creativepartnershipsareveryimportant:Weareoneofget-out-of-debt guru Dave Ramsey’s endorsed local providers, so we get leads from him. They are viable leads because he is a credible source of information. Those who read him or attend his seminars learn about insurance as part of their process of becoming debt free.• Wefeatureascrollofourcompanies.Thesecompaniesaredoing great advertising costing millions of dollars. We benefit from their investment. Most of the consumer market isn’t familiar with the independent agent system. This connection gives us visual and automatic credibility. • Consumerstodayknowthat“real”businesseshaveweb-sites. If you don’t have one, you can’t look as professional or modern as those agencies and companies that do.

Johnson: What ECI Has Learned


Tom MinklerPresident, Clark-Mortenson Insurance in New Hampshire

Member, Project CAP board of managers

Vice chairman of Independent Insurance Agents and Brokers of America

Minkler starts his conversation about Project CAP, whose board

of management he is on and whose spokesman he has become,

by identifying himself as a Trusted Choice agent.

“While I’ve been intimately involved with Project CAP

since inception, I want to stress that I’m a practitioner just

like Policy readers,” he says. “I’m in New Hampshire rather than Oklahoma,

but other than that I’m in the same boat.”

That, in fact, is one of the key concepts behind Project CAP. It seems

counter-intuitive, but, in fact, everyone who sells insurance as an independent

agent is now in one big boat. While, historically, independent agents have been

independent business people building their own brands to reach consumers

in a geographically defined community, today the consumer conceives of

and looks for insurance in a different way. What used to be a geographical

community is now a virtual community, and brand building takes more than

just traditional media and promotional products.

“We have always counted on people who want to do business with us

coming through our brick-and-mortar-based doors,” he says. “Now we have

to attract them through an electronic door. No matter how a customer gets

there, what we offer remains the same. But we have to build the electronic

door because 75 percent of Americans buying personal lines insurance

start on the Web now.”

The metaphorical door is called, given Web-speak, a portal, the

Consumer Agent Portal to be precise.

An agent’s core job is selling insurance; those who manage Project

CAP have as their core jobs building websites and determining how

best to use social media and other digital tools. After 35 years selling

insurance, Minkler says, he knows this very well.

“I’m one of the guys with the grey hair who could be sitting back

and saying ‘Naw. This isn’t for me,’” he says. “Actually, though, the

opposite is the case. In my 35 years I’ve seen a million marketing

and sales gimmicks, proposals and ideas put in front of me. This is

the first one I know is going to be successful in a way that will have

a real impact on my agency.

“Frankly, Project CAP has revitalized our agency from a personal

lines standpoint. Personal lines is a big part of my revenue, but

in the last five years of so we have seen a change. While, histori-

cally, we had about a 10 percent attrition as people died or moved

away, we usually picked up about 10 percent coming in: the next

generation, friends, neighbors, etc. That changed when consum-

ers started to look at insurance as they do all the other products

they buy. The national direct companies have put tremendous

amounts of money into advertising. That has had an impact on

that 10 percent. It’s lower now. Project CAP lets the people who

might want to do business with us find us.”


Minkler: Some Key Points About Project CAP• It’samultifacetedproject,ofwhichoneofthepiecesis the consumer portal.• The portal will be housed at trustedchoice.com,the brand of Trusted Choice independent agents of America. This website will soon start to show up on the first page of search engine results and consumers will be led to drill down to find a local advocate. • Theotherpiecesaretheelementsofwhatisanin-dustry services side, a variety of tools to help agents become more proficient in social media, digital mar-keting and anything else that takes advantage of the online world with a consumer slant. • ProjectCAPwill offer options for individual cus-tomization in the form of digital packages. There’s something for everyone. At the beginner’s level is the

Bronze Package. To put an agency’s digital market-ing and social media on the fast track, the Platinum Package is at the top of the list. Agents can upgrade when they want. Pricing ranges from free, the Bronze Package, to several thousand dollars, the Platinum Package, with many intermediate steps between to fit all levels of knowledge and skill as well as budget.• Thedigitalpackagesareoutnow.Morethan1,000have already purchased one of them. Minkler is traveling the country to talk to independent agents to get the message out. The definitive launch live date isn’t set yet, but Minkler predicts late 2012 or early 2013. He advises agents to start now, however, think-ing about their plans and working internally with the package products.

FEATURE

When it comes to potential liabilities in certificate of coverage cases, it’s the small things that can add up to a big advantage for the plaintiff. Here’s what to watch for.


FOUNDER, SHAREHOLDER &

CO-MANAGING PARTNER

Pignato, Cooper, Kolker &

Roberson, P.C.

Certificate StoriesTom Cooper

Dan Ramsey has asked me to give examples of some things gone awry in the context of cases involving certificates of coverage. I would like to talk about one case in par-ticular, in which multiple separate problems

ultimately gave the plaintiff quite a bit of leverage.The insured was in a business with a high turnover of

equipment. The insured purchased, among other things, an inland marine policy from the agent. The insured, quite unsophisticated in insurance matters (or at least claiming to be), put the agent in touch with the third party equipment supplier, so the two of them could have direct communica-tions about which pieces of equipment needed to be added to and/or deleted from the policy.

Here is red flag No. 1: Dealing directly with persons/entities other than your own customer.

When the insured rented equipment from the supplier, the supplier was adamant about its equipment being added to the insured’s inland marine policy. So as the insured rented various pieces of equipment, a representative of the supplier would call and/or fax the agency requesting proof that the newly rented equipment was covered.

A relatively new CSR assigned to this particular ac-count was in charge of issuing the certificates of coverage. The first few times, the CSR got it right. On one occasion, however, the supplier faxed a request to the agency to make certain that a particular piece of equipment the insured was about to rent was added to the inland marine policy. The CSR, who misunderstood the meaning and effect of “blanket” coverage, sent the third party supplier a fax along with a certificate of coverage. The certificate of coverage only generally described the piece of equipment; it did not

We’ve built our business by

delivering on our promises

and providing quick, quality

service. At M. J. Kelly, we

combine a national

company’s purchasing

power with a neighbor’s

personal attention.

M. J. Kelly Company

Managing General Agents

Surplus Lines Brokers 1-800-725-7211

www.mjkelly.com

SERVICE. EXPERIENCE. STABILITY. INTEGRITY. They’re not just buzz words, but our creed.

Convenient in-house financing available.





combine a national



personal attention.

M. J. Kelly Company



www.mjkelly.com







combine a national



personal attention.

M. J. Kelly Company



www.mjkelly.com







combine a national



personal attention.

M. J. Kelly Company



www.mjkelly.com




FEATURE

include the serial number (which was important because the insured was renting, at that particular time, several pieces of equipment made by the same manufacturer). The fax also misstated that certain pieces of equipment, including the one at issue, would be always covered unless specifically excluded, which was wrong.

Here is red flag No. 2: No one, particularly no producer, was supervising the CSR on these issues.

The supplier, believing its property was covered, rented the equipment to the insured. The insured damaged the equipment while using it for business purposes. When the insured returned the equipment, the supplier noted the problem and demanded payment from the insured. The insured turned to the agency, who made a claim to the inland marine insurer. The inland marine insurer promptly denied the claim because the equipment was not listed anywhere on its schedule. It turns out the CSR had failed to send information to the insurer letting the insurer know

of the additional equipment which was being rented by the insured.

During the insurer’s investigation of the claim, it sent the agency a request for information about whether the equip-ment was supposed to have been on the schedule. Both the insured and the supplier were arguing that the agency had notice of the subject equipment and that the insurer should, therefore, acknowledge coverage. But when the insurer asked the agency for information, the request was handled by the same CSR who made the original mistake.

Here is red flag No. 3: An insurer’s friendly “request for information” is usually not that friendly; therefore, be careful whom you assign to the task.

The CSR — whether accidentally, intentionally or something in between — told the insurer she had no record of any requests being made to add that particular piece of equipment. Based upon the agent’s statement contrary to the insured’s position, the insurer denied coverage for the claim.

The insured sued the insurer for breach of contract and bad faith. When a subpoena was sent to the agency, the agency turned the matter to its E&O carrier, who then hired me to assist. We gathered the responsive documents and sent them to the insurer. At that point the parties learned that there had, indeed, been a written request to the agency to add the particular equipment at issue and that the agency had assured the supplier that the equipment was added. This, of course, made the insurer’s original coverage deci-sion appear ridiculous. The insurer ultimately paid a large some of money to settle the bad faith action by the insured. The insurer then came after the agency.

A n i n s u r e r ’ s f r i e n d l y “request for information” is usually not that friendly; therefore, be careful whom you assign to the task.

FEATURE

Home-based businesses are increasing dramatically, and these small business operations have specific insurance needs. RLI offers IIAO members a special policy designed to meet those needs.


RLI Protection for Home-Based Businesses

The explosive growth in the number of people operating home-based businesses is well docu-mented. Current estimates place the number of home-based businesses operators at more than 43 million people. Not so well known, perhaps,

are the unique insurance needs these entrepreneurs face. The RLI in-home business policy available to all IIAO members is designed specifically for the needs of these individuals.

The policy gives business owners in more than 100 classes of coverage often excluded by their homeowners policy. Typical homeowner policy exclusions include liability for clients injured while patronizing a home-based business; inventory, supplies and equipment especially when off-premises; and off-premise liability, such as damage to other people’s property.

RLI’s policy covers these gaps and, at the same time, protects agents from E&O losses. The products affordable premiums — starting at $150 — and its standalone nature make it ideal for

retail and service businesses operated from the home. Eligible classes of businesses include the following: ac-

counting, photography, database management, call phone/pager sales, website design, interior decorating, monogram-ming, candle sales and many computer consulting services.

Coverage options include the following:• Upto$50,000businesspersonalpropertycoverage,

including theft both on and off premise• Coverageforlossofbusinessincome• Optionalcoveragesformoneyandsecuritiesand

electronic data processing• Upto$1millioninbusinessgeneralliabilityprotec-

tion both on and off premises• Premiumsstartingaslowas$150dependingonthe

location and type of businessFor more information, call Cindy Munden at

405.840.4426.

JGSI N S U R A N C E

A subsidiary of

We See a Bright FutureMore options await you with PreferredProperty Program’s umbrella policiesOur umbrella programs are designed to offer the most comprehensive coverageso the future is never in doubt. Our umbrella liability policies are writtenby XL Insurance, with Chubb Insurance Group for the excess layer, featuringflexible, broad coverage that includes:

• $5 to $25 Million in umbrella coverage with up to $50 Million in total limits.

• Hi-Rise apartments up to 35 stories eligible, with higher eligible by referral.

• Excess of D&O, General Liability, Auto, Employers Liability, EmployeeBenefits and more.

• Developer-sponsored boards eligible.

Contact us for a quote:

[email protected]

Service is our specialty; protecting you is our mission ®

960 Holmdel Road, Holmdel, NJ 07733

7.5 x 4.625jgs_brightfuture_7.4x4.625v1June 2011

XL Insurance is the global brand used by XL Group plc's insurance companies.Preferred Property Program’s XL policies are underwritten by Greenwich Insurance Company.

®

FEATURE

We might not be able to assign an exact dollar amount to how much money our non-governmental advocates save for agents each year, but you might want to ask yourself what your world would be like without them.


Capitol Agency

Shawnee Mission, Kan.

KAIA PRESIDENT

Lee Hays, LUTC, CSA

Advocacy: Not Easily Quantified

NOTE: This article appeared in the 2012 January/February issue of KIA&B titled “Advocacy is not Easily Quantified.” We have included it in Policy because its contents are rel-evant to IIAO and Oklahoma agents, as well.

Advocacy is at the top of the list of those benefits KAIA provides for each and every member, yet it is one of the most vague .The dictionary defines advocacy as “giving aid to cause” or “active verbal support for a cause

or position.” Well, the cause of KAIA is you. We often think of government when we speak of ad-

vocacy for agents and the independent insurance agency system. How could you not when every year there is an effort to have agents contribute to KIAPAC (the state PAC that enables KAIA to support candidates running for state

offices) and InsurPac (the national PAC that enables the Big I to support candidates running for national offices)? But the advocacy of KAIA and the Big I on behalf of agents is so much deeper, from monitoring single issue legislation to working with companies and vendors to speaking to local organizations about the role of agents and specific issues.

Advocacy is not easily quantified — you can’t count or measure the results as you can operating expenses, income and profit. As a business man who likes to know the numbers and compare, I know this can cause heartburn. But let’s try this exercise.

How much is it worth to you to have someone monitor-ing every bill in the Kansas Legislature for language that may have a negative impact on you and your business? This language includes words and phrases like agent fee

For additional information, have your agent contact: Midlands Management CorporationPhone: 800.800.4007 • [email protected]

A Member of Old Republic Companies

WebsourceCapitalize on our risk control resources by utilizing any or all of the complimentary services listed below. • e-Learning Opportunities • Video / DVD Library • Disaster Preparedness Tool • Technical Bulletins • Online Forums • Web Events • Engineering & Safety Services

The Official Workers’ Compensation Providerof the Oklahoma Restaurant Association.Designed for professionals like you, to use the insurance agent of YOUR choice. • Restaurants • Golf & Country Clubs • Sales & Service • Food Distributors • Non-Commercial (Food Service Operation Only)

Benefits Include • Electronic Claim Reporting 24 hours a day, 7 days a week • Risk Control Services • Risk Evaluation • Loss Prevention Training

We are SERIOUS about your SUCCESS!


FEATURE

increases, licensing requirements, unfair competitive ad-vantages and sales taxes on professional services.

How much is it worth to have someone monitoring every proposed regulation, working with companies and vendors on forms and processes and participating in work groups, task forces and committee meetings to educate on the role of agents and prevent bad ideas from becoming reality?

How much is it worth to you to have a lawyer available to review legislation, proposed regulations, forms, etc. as well as be available for consultation?

How much is it worth to you to have updates on any new information that has a direct impact on your business, such as changes made to work comp statutes?

How much is it worth to have someone educate elected officials about the basic deficiencies of Farm Service Agency delivering the crop insurance program over the independent crop insurance agents. This farm bill, which

includes the crop insurance program, must be renewed by the end of September of this year. Jen McPhillips, the Big I crop insurance lobbyist, will deliver the latest updates on the program at the Kansas Agents Legislative Day.

Let me give you a picture of what some pay for these services: a contract lobbyist who makes a living watching legislation and lobbying on issues may be paid anywhere from $15,000 to more than $100,000 per year, per client. To have a lawyer on retainer would cost just as much. To have someone on staff who can research and present on changes to statutes, regulations, forms, etc., would cost a professional salary as well.

So, would you rather shell out over $200,000 a year for these services? Or would you rather be a member of KAIA?

There is a saying that goes something like “If you aren’t at the table, then you might be on the menu.”

KAIA is at the table and keeping you off the menu.

FEATURE

Adding long-term care to your offered coverage is possible as long as you stick to KIS: Keep It Simple.


kIS

Taber Brokerage Services

Zach Taber

Long-term care costs can add up quickly and sometimes become a black hole. In Oklahoma, the average daily cost of care for a semi-private room is $135, or $4,050 per month. The average length of stay in a nursing home is approxi-

mately three years. The math using those numbers leads to a whopping $145,800 for those three years. And this assumes only the averages.

How many of your clients or their parents are financially prepared for this risk?

If you read my last article in Policy, I suggested you rebuild your marketing plan to include new products you can offer to increase your revenue. Offering a solid prod-uct to help your clients leverage LTC risk can give you an advantage against the competition. However, you don’t need to be an expert in the long-term care business, just

to recognize the opportunity to talk with your client about available options. The key is to remember one thing: Keep It Simple, or KIS.

A great way to KIS is to add an LTC rider to a permanent life insurance policy. Many of you already offer, present and talk about life insurance. Think of the attention you’ll get when you ask the client, “How about we look into a long-term care rider on your life insurance policy?” or “What have you done to plan for LTC expenses?”

It’s a no-brainer. Here’s how most LTC riders work. The death benefit,

or face amount of the life insurance policy, is accelerated by a predetermined dollar amount or percentage. Some companies call them chronic illness riders, others LTC riders. No matter what they call it, companies generally write the rider to include the six activities of daily living,

800-627-3100 | TaberBrokerage.com

We’ve got you covered. Since 1973, Taber Brokerage has built a solid and well-deserved reputation for helping you get tough life insurance cases underwritten. In fact, we’ve helped agents with thousands of cases others couldn’t work out, making us a premier brokerage for your atypical needs.

Substandard Underwriting Financial Underwriting Avocation/Foreign Travel

At Taber Brokerage, we make doing business easy. Call us today to � nd out how we can help you with the hard cases.

Tough casesgot you stumped?

“We make doing

business easy.”


FEATURE

or ADLs. When a client is unable to perform two of the ADLs, the rider becomes relevant.

These riders are very inexpensive, and some companies don’t charge for the rider until a claim is made. The claims payment models are one of the following:

• Reimbursement,byprovidingreceiptsthecompanywill reimburse up to the rider amount

• Indemnity,meaning the claim ismade and themoney is paid until the policy benefit is exhausted.

Either way, any unused LTC benefit will be paid as death benefit.

Here are some statistics that might surprise you. Sixty-three percent of people over 65 will need some sort of long-term care, according to the American Association of Long Term Care Insurance (AALTCI.org). Beginning in January 2011, 10,000 baby boomers began to turn 65, everyday. That will continue for 19 years.

Remember KIS. Traditional long term-care insurance is expensive, not to mention confusing, and the insured may never use it. If an LTC rider is added to a life policy, either

the rider will be exercised and LTC claims will be paid, or the insured will die and the death benefit will transfer tax free to the beneficiary(s).

ADLsEating

Dressing

Bathing

Transferring

Maintaining Continence

Toileting

JIMMY HOLLAND, MARKETING MANAGERP.O. Box 803143 • Dallas, Texas 75380 • www.patriotnational.com(972) 239-1458 • (800) 291-6846 • Fax (972) 233-3487

��

MGA WITH COMPETITIVE PRICINGAND QUICK RESPONSE

Auto Liability & Physical DamageProperty

Inland MarineGeneral LiabiltyProducts Liabilty

Excess & Umbrella LiabilityEnvironmental Liability (Pollution/GL)

Miscellaneous Professional

STANDARD WORKERS’COMPENSATION

Quick ResponseCompetitive CommissionCompetitive Pricing

Direct Bill

Marketed & Underwritten throughPATRIOT NATIONAL UNDERWRITERS

Members of Heartland Security Insurance Group

Broad range of target classes including:Retail, Wholesale, Manufacturing & Services

IIAO Half page ad:Layout 1 7/24/2009 11:14 AM Page 1

FEATURE


How is Oklahoma like California? Not in many ways, but after Nov. 6, 2011, significant earthquakes joined the short list; read on to learn about exposure resources for faulty ground.

Did You feel That?

If you think an earthquake can’t happen in your part of the country, think again. The 5.9 earthquake that hit Virginia in August was felt up and down the East Coast and served as a vivid reminder that nature can be unpredictable and costly.

Natural catastrophes can expose your agency to costly E&O claims. That is why as an insurance agent you need to have all the resources available to protect your clients as well as yourself.

The potential E&O exposures that insurance agents could face from natural catastrophes were discussed in the recent webinar “Avoiding E&O Claims from Catastrophes.” Robert Hartwig from the Insurance Information Institute presented important statistics on catastrophic events and key considerations for agents when offering insurance to their customers.

Swiss Re policyholders can go to iiaba.net/

eohappens to access the webinar from the home tab, along with other earthquake resources and agency risk management tools. Other IIAO members can access the webinar here: www1.gotomeeting.com/ register/195118920.

Remember, it takes an uncovered loss to create an E&O claim for your agency.

While you have your customers’ attention, take this opportunity to inform them about their current limits and protection (or lack thereof) for earthquake coverage and document your file accordingly.

Visit Trusted Choice online for information on earth-quake coverage (trustedchoice.com) that you can use as the basis for sharing with your customers.

The Insurance Information Institute also provides plenty of information on relating to earthquakes at iii.org.

Your Agency Can Offer All the Options

405.463.0888 | oaaonline.netOklahoma Agents Alliance

Partnerships with leading national and regional companies | Access by direct appointment

We can get you bigger bonuses

Our members say it best! Visit www.oaaonline.net to hear from them.

OAA_CanDo_Ok.indd 1 12/29/11 10:11 AM

Independent Insurance Agents of OklahomaPO Box 13490Oklahoma City, OK 73113

RETURN SERVICE REQUESTED

PRSRT STDU.S. POSTAGE

PAID Oklahoma City, OKPermit No. 1659

Documents

Policy Magazine, summer 2012