Thanksgiving Thoughts & Georgia’s YAC

Last year at this time, I wrote a post that expressed my thanks to my readers for their interest in my blog posts and encouraged you to post comments about what I have written or suggest topics of interest for future posts.  It’s that time of year again and I want to say thanks to my readers for their continued interest in my posts.   My invitation to suggest topics of interest for future posts still stands.  I am close to 200 posts on this blog and finding new things to write about that would be of interest to my readers is always a challenge.

In addition to being thankful for my readers, I would also like to acknowledge yet another award for the Young Agents Committee of the Independent Insurance Agents of Georgia.  At the IIABA Fall Conference in New Orleans last month, Georgia’s YAC was given the Outstanding Communications Award “for achievement in establishing and maintaining an excellent communication vehicle for the young agents in their state.”  After winning the award two out of the past three years, the Outstanding Young Agents Committee of the Year went to the Young Agents Council of the Florida Association of Insurance Agents this year.  I see a pattern developing, as the one year out of the past three that award was not given to Georgia’s YAC, it won the Outstanding Communications Award.  If the pattern holds, Georgia’s YAC is on course to be named the Outstanding Young Agents Committee in 2016.

Regardless of what may happen in the future, congratulations are due to YAC’s chair, Jarrett Bridges, the Vice Chair, Robbie Moore, and the Secretary-Treasurer, Jimbo Floyd, during the time period covered by the Outstanding Communications Award, as well as the Communications Chair on YAC’s Board of Directors.  As noted in my post about last year’s Outstanding Committee award given to Georgia’s YAC, the future of the Big I is in good hands with these outstanding young agents and its strong Young Agents Committee in general.

Finally, although the upcoming holiday is mainly about giving thanks for our many blessings, it is also a time to acknowledge those who are not as fortunate and to think about what we can do to make their lives better.  There was a post last week on the LifeHealthPro blog that discussed seven things independent insurance agencies can do with respect to charitable causes that will create a beneficial impact on their agencies, as well as on their communities.  Building a sense of teamwork within an agency, as well as with its referral sources, while providing needed items, services, or money for charitable causes in the local community, can be a great “win-win” for any agency.  Read the post for ideas on how to make that happen.



Using Technology to Make Agencies More Productive

In my last blog post, I discussed the need for insurance agents to focus on doing things that educate their customers and potential customers about the benefits of having a particular insurance coverage.  By doing so, an agent can come to be seen as a resource for them, instead of someone who is just trying to sell them something.  However, such an approach takes time and thus, requires an agent and by extension his or her agency to be as efficient as possible in performing their other tasks, so they will have the time it takes to successfully implement this approach.

The natural inclination for agents and agencies who are looking to become more efficient in their work is to look to technology.  I wrote a blog post over two years ago about some apps and other technology solutions that can improve efficiency for agents and agencies.  But the IIABA’s 2014 Future One Agency Universe Study found that 66% of the agents surveyed were disappointed in the increases in efficiency obtained by the use of technology.

A recent article in the IA newsletter explains how to approach the implementation of technology in an agency so that it is likely to get the greatest benefit from the technology.  The author advises agencies to “start simple” by defining the problem to be solved (the “pain point”) and then researching the technologies available to address that problem.  If the problem is lack of productivity, Applied has created an e-book that provides productivity standards for each agency function and suggests ways to meet those standards using technology.  If an agency is looking for a way to better organize its customer prospecting efforts, interactive prospecting management systems offer a solution (click here for a post about them).

Before making the decision to buy one of those technologies, agency owners need to make sure they are committed to taking the time that it will require to fully implement the chosen technology and then be willing to do what it takes to get buy-in from their employees on the use of the new technology.  Without such buy-in, it is unlikely that the new technology will be used for the greatest benefit, if it is used at all.  Such buy-in can only be obtained if the employees are shown and understand how the proper use of that technology will make their jobs easier.  Consulting with employees about the problems they face and what would help them do their jobs more efficiently before a decision is made on what technology to implement is one sure way to help achieve the needed buy-in, as they will better understand why the new technology is being obtained.

When carefully thought through and then fully implemented, technology has the ability to make an agency’s employees much more efficient in the performance of their duties, thereby giving them more time to become a resource for the agency’s customers and potential customers.

Are You a Problem Solver?

There is an article in this week’s IA Newsletter that makes the argument, to be  successful in today’s information overloaded world, an insurance agent must first be a teacher, not a salesperson.  Instead of asking yourself how can I sell this policy to customer X, an agent should be asking how can I show customer X why having the policy will benefit them, their family, or their business.  What problem in the customer’s life will having the policy solve or at least, make more manageable?   By helping your customers and those who you would like to have as customers understand how having a particular insurance product will make their lives easier, you can become a resource for them, not just a salesperson.

The article suggests asking yourself three questions as a way to begin the transformation from salesperson to resource.  First, what questions or concerns do my customers and target customers have about the insurance products I am trying to sell?  Second, how can I best answer those questions or address those concerns, and third, what is the best way to reach my customers and target customers with the answers to their questions?  The idea, which is not a new one, is for the agent to be seen by their customers and target customers as some one who can make their life easier by solving insurance related problems.  (Click here for the website of a Georgia insurance agency that has branded itself as the “problem solvers.”)

In becoming a resource for your customers and target customers, it is important not to include sales messages in your communications that are intended to explain how a particular insurance policy will solve a problem they have or otherwise make their lives easier.  Including such a message will only lead your customers and potential customers to conclude that you are just trying to sell them something, so why should they believe anything else you have to say.  Once they understand why they need such a policy, they will look to the person who helped them understand that need to satisfy it.

A recent article on Property Casualty 360 discussed 14 things that an agent should not do when trying to sell an insurance policy.  Many of those don’ts also apply to an agent’s efforts to become a resource for their customers and target customers.  Failing to listen to the customers’ questions or to follow-up on the questions asked, avoiding accountability for your answers to their questions, and choosing the wrong medium to communicate with them are all things that will undermine your attempts to be seen as a teacher/problem solver.

As noted above, the idea of becoming a teacher/problem solver as the best way to market an agent’s (or attorney’s) services is not a new one, but it is one that many agents (and attorneys) have not yet embraced.  The IA Newsletter article is a good reminder of why every agent should incorporate one or more elements of that approach in their marketing efforts.


Insurance Certificate Update

It’s been almost a year since my last post on insurance certificates.  That post dealt with the application of Georgia law to insurance certificates issued for property, operations, or risks that are located outside Georgia.  My conclusion was that Georgia law did not govern what could be put on such insurance certificates.  Instead, an agent must look to the law of the state in which the property, operations, or risks are located to determine what can and cannot be put on insurance certificates for them.

The subject of insurance certificates is a standing agenda item for each meeting of IIAG’s Commercial Lines Committee.  At last week’s meeting, the consensus was that the number of problems with insurance certificates had dropped off as everyone became more familiar with the requirements of Georgia law.  It appears that most of the problems now concern certificates for out of state projects, which is understandable given the variety of the rules in other states for insurance certificates.

However, there was a recent article in Property Casualty 360 about an  International Risk Management Institute study that found over 90% of the hundreds of insurance certificates that were audited over a period of four years contained at least one misrepresentation of the coverage actually provided by the underlying policy.  That study focused on the construction industry and found most mistakes were made with additional insureds and the scope of environmental coverage.

The majority of the mistakes regarding additional insureds were due to a misuse of a blanket endorsement for additional insureds and the failure to properly complete endorsements that named the additional insureds.  Both of these mistakes were the result of the agent failing to read the endorsements in question to make sure they provided the coverage required by the construction contract.  A simple review of the latter type of endorsement (e.g., ISO CG 20 10 and CG 20 37) would have revealed that it failed to actually name or otherwise identify those entities who were additional insureds under the policy in question.

The problem with the blanket endorsement (e.g., ISO CG 20 33) is that it only applies to entities with whom the named insured has a written contract that requires that entity to be named as an additional insured and that status only exists for as long as the named insured is actually performing services for the entity.  The use of such an endorsement will not provide additional insured status for anyone else.  If the contract requires that such status be given to any of the contracting entity’s subcontractors or affiliates, a blanket endorsement for additional insureds will not do that.

If the insurance certificate contains anything that indicates the policy underlying it provides coverage for all the additional insureds required by the policyholder’s contract with the certificate holder and either of the above problems exist, the agent who issued that certificate will have a problem.   This is one more reason for agents not to make any such representation on an insurance certificate.  Such a certificate should only refer to any additional insured or other endorsements by name or identifying number and leave it to the certificate holder to review those endorsements and decide if the contract’s requirements have been met.

Update on Agency Handling of Subpoenas

I received a call recently on the Free Legal Service program that I run for members of the Independent Insurance Agents of Georgia that caused me to take another look at the law governing the service of subpoenas and how they can be contested.  Some of my readers may remember a post that I did on this subject a little over two years ago.  In that post, I stated the Georgia Civil Practice Act required any objection to a subpoena to be filed within 10 days after its service.  That statement was correct as far as it went, but did not cover the possibility that the date specified in the subpoena for the production of documents was less than 10 days after its service.  In that situation, an objection to the subpoena, known as a motion to quash, must be made on or before the date and time specified in the subpoena for the production of the documents described in it.

My earlier post was focused on the use of subpoenas and requests to produce documents in the time period before trial, during what is known as the discovery phase of litigation.  My recent call was about the service of a subpoena to testify and produce documents at the trial itself.  The caller had been served with a subpoena only a little over 24 hours before the date and time that he was supposed to appear in court at the trial and did not have enough time to get together all the documents requested and some of those documents concerned customers who were not parties in the trial.

While Georgia law does mandate that a subpoena must be served a minimum amount of time before the person served must produce documents or appear to testify, that time is only 24 hours.  Beyond that, it is up to the trail court to decide if “under the circumstances of each proceeding the subpoena was served within a reasonable time” before the person served was required to appear.  There is not much that can be done to get out of a subpoena to testify, if it is served within “a reasonable time”, unless the trial will be held in a county other than the one in which the person served resides.  If that is the case, for the subpoena to be enforceable, the person served must also be given payment for one day’s witness fee ($25), “plus mileage of 45 cent(s) per mile for traveling expenses for going from and returning to his or her place of residence by the nearest practical route.”   This extra requirement does not apply if the subpoena is issued on behalf of a government agency or the defendant in a criminal proceeding.

If, as in my caller’s case, the subpoena also requires the production of documents or other things, a motion to quash it can be filed on the grounds that its requirements are “unreasonable and oppressive.”  That can be the case if not enough time was given to gather the documents requested or the number requested is excessive in light of what the person serving the subpoena actually needs, as well as other reasons.

The advice given in my earlier post about what to do when served with a subpoena for discovery purposes also applies in the trial situation, if the documents requested involve a customer who is not a party to the trial.  If they involve a party to the trial, that party will have an opportunity to object to their use at the trial.





What You Missed at the IIAG Fall Conference

I was able to spend some time last week at the Independent Insurance Agents of Georgia Fall Insurance Extravaganza, which was held in Macon.  Next to the opportunity to network with other agents and company representatives (there were over 150 in attendance), the best thing about this event is that it is free for IIAG members and provided an opportunity for agents to get up to eight hours of continuing education credit at no cost.  I arrived in time for lunch on Thursday and stayed for the afternoon education sessions and the evening dinner.

Apparently, the conference started with a bang, as everyone I met mentioned  the opening general session at 8 a.m. that morning.  A fellow insurance agent, John Immordino, spoke on Cyber Liability exposures for insurance agencies and agents and said some things that had everyone concerned.  After that, it was on to less scary topics, although the E&O Loss Control presentation had some things in it that should cause agencies and agents concern, especially with respect to social media.  As the presenter, Becky McCormack of the Independent Insurance Agents and Brokers of South Carolina, noted, the potential liability exposures with social media are essentially the same as with other communication media, but due to its more casual feel, instantaneous and worldwide distribution, and the permanence of what is posted, those exposures are magnified. That is why it is crucial for agencies to have a policy about the use of social media by their employees in connection with the performance of their duties. The Agents Council for Technology has created a guide to help agencies in creating such a policy. (Click here for a link to it, sample policies, and articles on related topics.)

I was also able to sit in on Tamara Gatson’s presentation on time management.  I have been to such presentations for attorneys and the principles are the same, but she made a basic point that is often overlooked.  In order to take control of your time, you need to track how you are currently spending your time both at work and outside of work and compare it to the way you want to be spending your time.  Once you know these basic facts, you can take control of your life by cutting down on what you don’t want to be doing and doing more of what you want to be doing.  She also made the point that you can’t wait for specific events to occur to be happy.  Like life, happiness is a voyage and should be sought in all the activities of your life.

Perhaps the most entertaining presentation I attended was on a subject that is usually considered somewhat boring and technical.  Its title was “Insurance & BBQ” and addressed issues related to commercial property and general liability insurance policies.  The link between Insurance and barbecue was the use by the presenter, David Thompson of the Florida Association of Insurance Agents, of some of the many barbecue restaurants he has visited to explore those issues.  His critiques of the restaurants were fun and made after he discussed a particular issue related to the restaurant.  He made the obvious point that agents should read the policies they are selling and pointed out some endorsements to watch for and avoid if possible (generally, any endorsement that contained the words “limitation” or “exclusion.”).  He also made the not so obvious point that when responding to a customer’s question about the existence of coverage, an agent should begin his or her answer with the statement “there is no coverage, except” in certain situations, instead of “there is coverage, but limited” to certain situations.  I think most of my readers can guess why the first response is better than the second, especially if they have taken an E&O Loss Control course.

Must an Agency Website Contain a Privacy Statement?

A recent question about the use of privacy statements on websites maintained by insurance agencies prompted me to look again at the basic laws that govern when and how such statements must be given to the customers of insurance agencies.  On  the federal level ,there is the Gramm, Leach, Bliley Act (“GLBA”) passed by Congress in 1999 and in Georgia, there is Section 33-39-1, et seq., of the Insurance Code, which was enacted by the General Assembly in 1982 and became effective on January 1, 1984.  The GLBA permits its requirements to be superseded by state laws that impose greater requirements on the giving and contents of privacy statements.

Unfortunately, for Georgia insurance agents, the Georgia law does impose greater requirements than the GLBA on the giving and contents of privacy statements.  Fortunately, the requirements of both laws only apply to “personal information” (Georgia law) and “nonpublic personal information” (GLBA), which means that privacy notices need not be given to insureds or potential insureds who have or are seeking commercial lines coverages that do not involve the collection of personally identifiable information about individuals.  In all cases where such information will be collected by an agency in connection with the obtaining of an insurance coverage, a privacy notice must be given.

Georgia law specifies different times for when such notices must be given in connection with an initial application for insurance, depending on the sources from which personal information about the applicant will be collected before a policy is issued.  If such information will only be collected from the applicant and public records, a privacy notice need not be given until the policy is delivered to the applicant.  If such information will be collected from any other source, a privacy notice must be given when any personal information is first collected about the applicant.

Thus, if an insurance agency has a website that allows a potential customer to get a quote by providing certain personally identifiable information about themselves and before providing that quote, the agency will get any more personal information about the potential customer from a source other than public records, the website must give the customer the required privacy notice when the customer first enters their personal information.  The privacy notice in this situation required by Georgia law is more extensive than the one required by GLBA.  Among other things, that notice must tell the customer of their right to inspect personal information about themselves in the records of an insurance institution, agent, or insurance support organization, to get other information from those entities, and to request a correction of any such information.

The Georgia law requires a privacy notice to be “in writing”.  However, given the subsequent passage of the Georgia Uniform Electronic Transactions Act and the enactment last year of a revised Section 33-24-14 of the Georgia Insurance Code (click here for blog post), which specifically applied the provisions of that Act to the Insurance Code, if the requirements of the Act are met, the required privacy notice can be given electronically on the agency’s website.  Those requirements have been explained in an article I wrote for the Dec Page magazine.  If an agency would prefer not to put a full blown privacy notice on its website, the Georgia law permits an abbreviated notice to be given that informs the customer that (i) personal information may be collected from persons other than the customer, (ii) such information as well as other personal or privileged information subsequently collected by the agency may in certain circumstances be disclosed to third parties without authorization, (iii) a right of access and correction exists with respect to all personal information collected; and (iv) a complete privacy notice will be furnished to the customer upon request.


Is Your Agency Taking Advantage of the Opportunities Created by the ACA?

In last week’s post, I discussed the reporting requirements imposed on employers by the Affordable Care Act (“ACA”), commonly known as Obamacare, which requirements are effective for 2015.  Informing or reminding an agency’s commercial lines customers who may be subject to those reporting requirements is one way that an agency can use Obamacare to its advantage, regardless of how its owners may feel about it.  Assisting such customers in determining how they will comply with those requirements and suggesting possible solutions for the handling the complexity created by them should go a long way in showing those customers how dedicated an agency is to providing added value services and becoming a trusted advisor for its customers.  Along these lines, the IRS has just created a webpage devoted to the 2015 filing requirements. It has links to the final versions of the forms that will be used to satisfy those requirements, as well as other pertinent information.

For those agencies that offer health insurance coverage, a recent study by AFLAC found that there is a growing market for voluntary coverages that plug the gaps created by the health insurance policies that are available to individuals on the federal and state exchanges created under the ACA.  Sixty-four percent of the employees surveyed recognized the need for other coverages beyond what they could get from their employer or the exchanges.  In addition to selling voluntary coverages, almost 60% of the brokers surveyed were working as navigators and/or producers for insurance coverages provided through the exchanges and those brokers reported on average that 35% of their total revenues were directly related to their exchange activities.

While initially the environment for insurance agents and brokers who wanted to engage in exchange related activities was not particularly welcoming, that is beginning to change as the Center for Consumer Information and Insurance Oversight (“CCIIO”) has recently announced that it will create a hotline dedicated to answering “general questions” related to the federal exchanges.  No date has been set for when the hotline will be created, but as B. Ronnell Nolan, president and CEO of the lobbying group Health Agents for America, recently stated, it is a step in the right direction towards leveling the playing field for insurance agents and brokers (click here for a recent article on the hotline and related topics).

Another step in the right direction occurred when the Centers for Medicare and Medicaid Services, which oversees the CCIIO, announced in August that it would partner with three organizations, the National Association of Health Underwriters, America’s Health Insurance Plans, and Gorman Health, to offer agent and broker training for the federal exchanges.  This will allow agents who choose to undergo the training required to participate directly in those exchanges to receive continuing education credit for doing so.  While agents must still begin the process on the CMS website to verify their identity, they will then have the option to receive the required training through the government website or go to one of the three outside vendors for the training.  There will be a cost associated with the training offered by the outside vendors, but that cost will be comparable to what an agent would have to pay for other continuing education courses. (Click here for a recent article on this subject.)  For those who would prefer not to have to pay for the training, there is one training session left this month, on September 25 at 1 p.m. EDT.  (Click here for registration information.)



What’s New With The ACA?

It’s been over nine months since my last post about the Affordable Care Act, commonly known as Obamacare.  In that post, I discussed the exemptions from the “pay or play” penalty that would be effective for the 2015 calendar and plan years.  Unfortunately for employers, the exemptions from that penalty do not apply to the reporting requirements imposed by Sections 6055 and 6056 of the Internal Revenue Code.  Those requirements relate to the type of health insurance coverage provided by employers to their employees during 2015 and later years.

All employers, regardless of size, who offer any type of group health insurance are required to file the Section 6055 report for each employee, a copy of which report on Form 1095-B is to be given to each employee.  Even those employers with less than 50 full-time equivalent employees are required to prepare and file this report.  Fortunately, for those employers who have fully insured plans, the provider of those plans is responsible for preparing the report, distributing it to the employees, and filing it with the IRS.  Those employers who self-insure their employees’ health insurance coverage will have to prepare, distribute, and file the required reports themselves.

Only those employers with 50 or more full-time equivalent employees have to file the report required by Section 6056.  The employer is responsible for preparing this report, filing it with the IRS, and giving it to each full-time employee on Form 1095-C by January 31, 2016.  This report must be prepared, filed, and delivered, even if the employer does not offer health insurance coverage to its employees and would be exempt from the penalty for not doing so because it had 30 or fewer true full-time employees (i.e., those who regularly work 30 or more hours a week).  In addition, the employer must prepare and file with the IRS a transmittal form, Form 1094-C, for the Form 1095-Cs, which requires information about the insurance coverage provided and the number of employees on a monthly basis.  For a more detailed explanation of the reporting requirements imposed by Sections 6055 and 6056 and what information must be provided click here.  Even though the deadline for completing the required employee forms is only a little over four months away, the IRS has not yet released final versions of those forms for 2015.  Click here for draft copies of those forms.

Earlier this month, there was a post on the Employee Benefit Adviser site that cautioned against seven myths about the above reports.  For those employers who are planning on doing everything themselves, the author noted that the instructions for Form 1094-C and 1095-C are 14 pages long and written in the usual dense prose of the IRS.  In addition, the IRS has released another 14 pages of clarifying questions and answers.  For those who think they can wait a while longer before deciding what they will do, the author notes that information must be reported to the IRS on a monthly basis and many of the vendors who are offering their services in this area are increasing their fees the closer the deadline gets.

Although the IRS has indicated for this first year of reporting it will give some relief for improperly completed or filed reports under Sections 6055 and 6056,  it has stated there will be no relief from the fines for failing to meet the requirements of those Sections for employers that cannot show a good faith effort to comply to the extent possible or who fail to timely file with the IRS or give a required report to their employees.  Those fines are $250 for each form that is not filed or is incorrectly completed and filed with the IRS and for each form that was not properly delivered to an employee.

What Are You Doing to Ensure the Success of Your Agency’s Producers?

Last week I wrote about the need for an agency to have a perpetuation plan and what goes into creating such a plan.  For those agency owners who want to pass on their agency to family members or other employees, it is important to have both a healthy agency operation and able buyers.  These two ingredients go together in that a healthy agency operation means its producers are growing their books of business and by doing so they become more financially able to buyout the agency owner.

A recent article in the IA newsletter discussed 11 reasons why producers fail to achieve success in growing their books of business.  By doing what they can to help their producers avoid these reasons, an agency owner can go a long way toward ensuring their agency’s healthy operation.  The reasons involve failures on the part of the producer (not asking for help, not learning the people side of the business, all talk, no action), as well as the agency management (no training program, not connecting the producer with other staff that could help, not using readily available referral sources).  Perhaps the most interesting point made in this article was that studies have suggested that prospects are not generally ready to buy from a salesperson until at least five prior contacts have been made and maybe as many as 10 or 12.  So it is important for the producer to be persistent in their dealings with prospective customers.

Another recent IA newsletter article discussed eight tips for successful sales appointments that would be a helpful guide for all producers.  The tips focus on the importance of the producer being comfortable with themselves and putting themselves in the shoes of the prospect to arrive at an approach that would be of interest to the prospect and would make things as easy as possible for the prospect to decide to do business with the producer.  Perhaps the most important tip is the first one.  The producer should be clear about the purpose of each contact they make with a prospect.  Until the producer decides what they want to achieve with each contact, it will be difficult to decide on the proper approach.   What they want to achieve will depend on where in the sales process the producer is and who they are dealing with.

This IA newsletter article also suggests a couple of approaches to getting appointments that involve using the names of existing customers.  That is one of the approaches suggested in a recent article in the Property Casualty 360 newsletter that discusses eight great opening lines for producers.  The others range from being honest about the possibility that what the producer may have to say may not be of interest to the prospect to suggesting the use of online presentations.

Finally, for those producers who just can’t seem to get going, another recent article in the Property Casualty 360 newsletter suggests eight steps that can be taken to overcome the tendency to procrastinate.  These steps are probably familiar to anyone who has dealt with this problem, but they offer a handy guide for what to do and why to do it.

If an agency owner wants to be able to successfully transition from owner to retiree, there is no more important thing they can focus on than how to make their producers as successful as possible.