July 1 is the effective date for all laws passed by Georgia’s General Assembly in any year, which laws do not specify a different effective date. For Georgia insurance agents tomorrow is the effective date for three laws, two of which are of importance to them in particular and the other of which is of importance to all business owners. I have written both a blog post and an article for the Dec Page magazine about the first two laws.
All insurance policies that contain an audit provision and that are issued or renewed on or after July 1, 2014 can be canceled if the insured fails to submit to or allow an audit after having been contacted twice by the insurance company about the need for an audit. This may be good news for many insurance agents, but the law contains a potential trap for the unwary. It includes the agent for the insured in the list of persons that the insurance company must contact about the need for an audit. This may lead to E&O exposure if the agent does not attempt to contact the insured upon receiving such a notice from the insurance company, especially if the agent knew that the address being used for the insured by the insurance company was not correct or that the insured was unlikely to receive the notice for other reasons. In order to protect themselves from this potential E&O exposure, Georgia agents should consider including in their paperwork for insureds with policies that permit an audit a statement that they will assume no responsibility for notifying the insured of any attempts by the insurance company to contact the insured about scheduling an audit.
The other law of special significance for insurance agents specifically authorizes the electronic delivery of insurance policies, as well as other documents, including, but not limited to, cancellation or nonrenewal notices, that were previously required to be mailed. The bill imposes several conditions on the electronic delivery of such notices and other documents that do not apply to the electronic delivery of insurance policies. These conditions are discussed in my article in the Summer 2014 edition of the Dec Page Quarterly and are in addition to those imposed by the federal Electronic Signatures in Global and National Commerce Act. This means that the requirements of that Act regarding the electronic delivery of notices and other documents in consumer transactions must also be followed. Those requirements are extensive and are explained in an article found on my website.
The law that is of significance to all Georgia business owners is the Safe Carry Protection Act, which is commonly referred to as the “Guns Everywhere Act.” As of July 1, the places where licensed gun owners are allowed to carry their weapons will be greatly expanded. These places include businesses open to the public, unless the business has posted a notice prohibiting the bringing of firearms onto its premises. If the business owner wants to prohibit its employees from doing so, it must a create policy to that effect and make sure its employees are aware of the policy. However, there are restrictions on a business owner’s ability to regulate the bringing of firearms to work by its employees if those firearms are left in the employee’s motor vehicle. For a complete explanation of those restrictions and other information about this law click here.
In my last blog post, I talked about one of the educational presentations at this year’s IIAG annual convention that I found interesting and entertaining. At the end of the convention, there was a speech by an insurance industry executive that I also found interesting, which as I am sure anyone who has attended the convention can attest is not always the case. This year’s industry speaker was the CEO of Progressive Insurance, Glenn Renwick. Besides having an interesting accent (he is from New Zealand) and an unusual background for an insurance executive (he has a masters degree in engineering), his speech focused on five trends that he thinks will influence the insurance industry in the future.
Some of those trends were nothing new (consumers will increasingly want to access services digitally and on mobile devices) and are being acted on by everyone in the industry who wants to stay competitive, but others were not so obvious and if acted on by insurance agencies, could give them an advantage going forward. Two of those trends, in particular, offer insurance agencies an opportunity to “think outside the box” about how they can differentiate themselves from the competition.
Mr. Renwick spoke about how his company had partnered with another company to offer a service to its customers that it did not offer, but which would be needed by its customers. The idea is to provide a way for a company’s customers to satisfy as many of their needs related to the products or services offered by it as possible in one place. If your agency does not offer a type of insurance or a product or service that you know its customers need or would be interested in, look for someone in your community or nearby who does offer that product or service and work out an agreement to market it to your customers on your agency’s platforms and also to market your agency’s products and services to the partner’s customers on its platforms. An easy example is life and health insurance for a property and casualty agency or mortgage or real estate agent services or maybe even car repair services for such an agency.
The last example was one used by Mr. Renwick to explain another trend that is happening. He referred to it as “using time as a design criteria.” What he meant was finding ways to make a customer’s experience with your company take as little time as possible and thus, leave the customer with a good feeling about the company. For his company, that involved moving from a posture of just writing a check to the insured for the appraised cost of repairs to their car and leaving it up to the insured to find a competent person to make those repairs for that cost to one in which the company oversees the repairs to make sure they are done right and for the amount estimated.
In your agency, look for the services it provides that take the most time and/or create the most dissatisfaction for its customers and then try to figure out ways in which that service could be delivered more efficiently or in a way that is more pleasant for its customers. If you are successful in this effort, you will have more satisfied customers who will think that your agency cares about them, which is, as Mr. Renwick pointed out, the key to keeping them for the long term.
I just got back yesterday from the IIAG’s annual convention in Amelia Island. The two and a half day event had two educational programs, one of which I missed, a panel discussion about the upcoming legislative elections in Georgia, and speeches by IIABA’s Vice Chair and the CEO of Progressive Insurance, all of which I attended.
The educational program I attended focused on ways to energize both yourself and others in your agency to increase its sales. The speaker was Brian Cain, who got his start in the motivational business by assisting athletes in learning how to deal with the stresses of competition at the elite level of their respective sports. He made the point that salespeople like athletes have to learn how to deal with failure if they are ever going to get better at what they do. Salespeople also need to be able to focus in the moment when making a presentation, just as an athlete has to be able to focus on their performance and block out all distractions.
In an interesting twist on the old 80/20 rule, Mr. Cain made the statement that 80% of a salesperson’s results come from 20% of what that person does. In other words, most of a salesperson’s success is based on only 20% of the activities engaged in by that person, which means there is a lot of wasted effort. Of course, determining which is which is the trick, but Mr. Cain’s advice was to focus on those actions that are taken when success occurs and repeat those actions until they become a habit. The opposite should occur when there is failure. Analyze what went wrong and then do not repeat it.
The part of his presentation that I found most interesting was his advice on how to avoid bringing your work home with you, which leads to less time spent on your family and other things that are important to you. He suggested that, at the end of every work day, you review what happened and then plan what you want to do the next day, writing it down if you need to. Or if that is too much, the same thing could be done at the end of every work week. On Friday, review what happened that week and plan what you want to do the next week. By doing this, your mind is free to focus on the evening’s or weekend’s activities and will not be weighed down with thoughts about work.
On other thing that you missed by not attending the IIAG annual convention was the publication of the third edition of my Answers to Frequently Asked Questions booklet. A copy of that booklet, which contain the answers to 35 questions that I have heard most often from agents about their business activities, was given to each person who attended the annual convention. The questions range from what type of legal entity should be used to conduct an insurance agency business to the payment of fees or other compensation for the referral of business to the electronic delivery of insurance policies and an agent’s duty to report wrongdoing. If you would like a copy of the booklet, please contact me.
About this time last year, I did a post on traps for the unwary to avoid in the hiring of summer interns. Now that most schools in the Georgia are on summer break, I thought it would be a good idea to remind my readers of those traps and the associated risks in the hiring of summer interns.
The major risk arises if the intern is not paid anything or less than the current minimum wage for the time they spend working for a business. In that situation, the burden is on the business to prove that the intern was in fact a “trainee”, who does not have to be paid anything for their services, and not an “employee”, who must be paid at least the minimum wage for their services. That burden is higher for a profit-making business because the United States Department of Labor (the “USDOL”), which is responsible for enforcing the minimum wage law, will presume that such an intern is an “employee”. The USDOL has issued a Fact Sheet in which it establishes six criteria that must be met to prove an intern is a “trainee.” Last year’s blog post discusses some of those criteria, but the bottom line is that if the business owner derives any significant benefit from the services of an intern, that intern will most likely be considered an employee by the USDOL for purposes of the minimum wage law. (Click here for an article I have written that goes into greater detail about the USDOL’s position on unpaid interns.)
The fact that the intern willingly agreed to perform the services in question without being paid any compensation is irrelevant, as the United States Supreme Court has held that an individual can not waive their rights under the minimum wage law. Thus, an intern could decide, up to three years later, that maybe they should have been paid for all the services they performed for a business, if for whatever reason they now need the money or have a grievance of any kind against the business.
For a business that is considering hiring someone who is under 18 years of age, both the federal and state governments impose restrictions on the types of activities in which such a person can engage and for how long each day, regardless of whether they are a “trainee” or an “employee.” The main difference between the two sets of restrictions is that Georgia law requires a person under 18 to obtain an employment certificate, or work permit, from the school they last attended or the local county school superintendent. (Click here for a fact sheet from the USDOL on this subject and here for a summary of the restrictions imposed by federal and state law from the Georgia Department of Labor.) As noted at the bottom of the Georgia Department of Labor’s summary sheet, if the child is working in a business owned by his or her parent or guardian, only the restrictions regarding prohibited occupations will apply.
A few weeks ago, my blog post was about leadership qualities that are essential in running a successful insurance agency. One of those qualities is being able to recognize when the frustrations of running an agency are leading to burnout, which can be a problem not only for the continued success of the agency, but the health of its owner, as well. If the leader of an agency is experiencing burnout, it can result not only in the stagnation of the agency, but health problems for the leader. According to a white paper by Oak Street Funding that I recently came across, burnout at work increases the risk of heart attacks, heart disease, stroke, and sudden cardiac death as much as the more familiar risk factors of smoking, high cholesterol, and being overweight.
Most people recognize the symptoms of burnout, feeling constantly frustrated with daily activities, bored with having to engage in those activities, or actively avoiding them. The first step to combating burnout is to get away from the daily grind to give yourself time to recharge your batteries, so to speak. Take a vacation or at least build in time away from the office during the day to give yourself an opportunity to relax and relieve the stress that naturally builds up. A daily walk or work out has the added benefit of increasing your physical health. Another suggestion made in the white paper is to set aside one afternoon each week to do something that you enjoy, whether it is playing golf or volunteering at your child’s school.
Being away from the office will give you time to evaluate the current state of your agency and determine what changes may need to be made in both what the agency is doing and how you spend your workday. If you regularly feel at the end of the workday that you have not accomplished anything, it’s time to take a hard look at how you are spending your time and what changes can be made to allow you to do those things that you enjoy doing and that positively affect your agency. It’s always a good idea to periodically revisit your agency’s business plan and make sure what your agency is doing is adequately serving the needs of its customers, both current and prospective. If not, it’s time to make changes in the direction of your agency to address any disconnects between the business plan and what is actually happening.
Making changes in the direction of your agency and your daily work routine can have an energizing effect on both you and your staff. However, recognizing and implementing such changes can be difficult because it requires an honest, unemotional assessment of the status quo. For that reason, it may be a good idea to seek outside help from those that are familiar with but not emotionally attached to your agency (e.g., your attorney or accountant) or even from consultants who specialize in making such reviews and can help ensure that the necessary changes are made.