This message was sent to ##Email##
Editor's note: Due to technical difficulties, last week's issue of PIA Weekly Industry News may not have reached your inbox. To view of a copy of last week's issue, click here.
PIA Western Alliance
Washington's only agent and company conference and trade show will be here next week. Not only is it the only conference of the year, but it's the best possible use of a couple of days of your time.
The 2018 PIA and IIBW WA Joint Conference and Trade Show is September 19 – 21 at the beautiful Hyatt Lake Washington.
This is a one-size fits all event that features education, the latest in products and services, inspiring speakers, networking and — best of all — fun!
All agents/brokers, CSRs and marketing reps are encouraged to attend. And the best part is Agents actively employed by an agency can attend the Trade Show on Friday for FREE thanks to the generous support of our sponsors.
Outside of time spent with the industry you love, you can also enjoy one of the finest resorts in the Northwest. It is the Hyatt Regency Lake Washington at Seattle's Southport. This is a AAA Four Diamond award winner and perfectly combines the natural beauty of the Pacific Northwest with modern amenities.
Click here to register
Click here to see this year's agenda
Click here to see this year's sessions & workshops
We hope to see you there!
PIA Western Alliance
A prediction from industry analysts at Marsh, Berry & Co. says for the second year in a row mergers and acquisitions will top 500. The prognosis is based on the 289 deals done through the end of July.
Last year's number ended up at 557 with five of the top 10 brokers completing transactions.
MarshBerry Executive Vice President Phil Trem said his company came to that conclusion after analyzing data from an S&P Global Market Intelligence report and noted it will be the second time 500 has been reached since 2005. That year saw the first time M&A activity hit the 500 figure.
This year private equity-backed broker consolidations are at the top of the list. Others making an impact on the list are public and independent insurance brokers as well as banks and thrifts.
Leading the pack:
Assured Partners — 19 deals
BroadStreet Partners — 19 deals
Alera Group — 18 deals
Acisure — 17 deals
Hub International — 16 deals
The amount of money involved in these deals is rising significantly.
Trem went on to say, “The average base purchase price, as of the 12 months ending June 30, 2018, has exceed (eight times) earnings before interest, tax, depreciation, and amortization (‘EBITDA’) for the first time in our records. Demand for quality firms is helping drive the activity and values.”
He does — however — predict a slowdown because of rising interest rates and the recent tax reforms. What Trem wouldn’t predict is when.
MKL has decades of experience in navigating the complicated process of selling insurance agencies - we work tirelessly to find the right buyer for every seller, in all 50 states.
PIA Western Alliance
Smart home technology is worrisome to cyber security experts. It's pretty easy for bad guy players to attack your now web-connected refrigerator, microwave oven or any number of other items in your well-connected home.
Two forms of technology aren’t a worry to former NSA hacker Jake Williams. The one-time hacker has since left government and founded the info security firm Rendition Infosec. Williams said the fastest growing areas of smart home technology is Amazon's Alexa and Google’s Home. More and more they're being tasked with running household items.
You’d think that makes them a major-league target for hackers. Williams says yes they are but no they aren't. And the reason they aren’t is because both companies work hard at making the products secure.
"Would-be attackers don’t care what you're talking about at home. They're looking to monetize data," he said and added there is more data to be had getting to your bank account than these two products.
In fact, getting to that bank account or to those important passwords and account information is much easier via your laptop or smartphone. There’s a lot of software installed on them that is used on a daily basis. Most of us don’t do the regularly recommended software security checks.
Nor do we often make sure software we download is from a trustworthy site.
Smart speakers — as he calls Alexa and Google Home — do not work the same way. The first way they work is impossible to hack because it's your voice giving a command. The second is the servers at Google or Amazon.
They're very secure.
Williams said Alexa Skills is one possible target area and is one that the user needs be careful with. The skills you download to Alexa need to be from — much emphasis here — a trusted source.
The security system you need to use — Williams adds — is one that enables a multi-factor authentication and sets up sets up full encryption. This is especially important for phones and laptops.
PIA Western Alliance
Prudential just unveiled a new direct-to-consumer financial services link called appropriately, LINK. Or LINK by Prudential to be specific. What it does — for the first time in the firm's 143-year history — is allow consumers to do their own personalized planning without the traditional Prudential advisor.
LINK offers personalized financial planning and recommendations for insurance, annuities and investments. So clients can manage their portfolios with some help from remote advisors. Or to put it another way, the company's large network of advisors who’ve — until now — managed the company's $1.4 trillion in assets are eliminated from the process.
The change is for Millennials who have a lot of purchasing power but don't really want a personal relationship with a advisor. The impersonal computer with a texting advisor works just fine for them.
Obviously the decision is not going to set well with Prudential's fleet of financial advisors. Prudentials chief operating officer Stephen Pelletier said the intention is not to do away with them. They'll still play a "critical role" in the company's success. All this does — he notes — is give younger customers a "seamless experience" where they can pick up financial products and insurance on the same site and pick the level of advisory service they want.
Pelletier said LINK is going to be available to 20 million people via workplaces.
|| MISSED AN ISSUE OF PIA WEEKLY INDUSTRY BRIEF? VISIT AND SEARCH THE ARCHIVE TODAY.|
PIA Western Alliance
Concerned about consumers when it comes to insurance? The National Association of Insurance Commissioners (NAIC) is accepting applications for the 2019 Consumer Liaison Program.
The deadline is October 31, 2018. Applicants will be selected in December and then notified in early 2019.
Julie Mix McPeak is the NAIC President and Tennessee's Commissioner of Commerce and Insurance. She said, "The insight we get from consumer representatives is invaluable as we weigh the impact of changes to insurance regulation on the consumers in our states. They provide a unique perspective and voice, which is critical as we make decisions at the NAIC."
If you're not familiar with the program, the Consumer Liaison Program was set up in 1992 and gives consumers access and — more importantly — interaction with members of the NAIC. The program funds representatives of various groups and lets them participate in NAIC meetings by providing travel expenses.
Those consumer groups — national, state or local — must be set up to protect the interests of consumers as they relate to the regulation of insurance.
Stephen Taylor is Commissioner of the District of Columbia Department of Insurance, Securities and Banking. He chairs the Consumer Liaison Committee and noted, "Partnering with consumer representatives ensures that we never lose sight of who we are working for U.S. consumers. Working with consumer advocates brings into focus our collective vision for protecting policyholders."
More information regarding the NAIC's Consumer Liaison Program and the application process is available online at: https://www.naic.org/consumer_participation.htm.
PIA Western Alliance
There is a lot of focus these days on California and the wildfires that have devastated the state. Of equal concern is the potential for even more disaster due to drought. From an insurance perspective, most homeowners in the state’s driest and most fire dangerous areas have homeowners insurance.
What they don't have is insurance for earthquakes.
A report in The New York Times notes just 13% of Californians have earthquake insurance. This is in spite of an aggressive marketing plan engineered by the California Department of Insurance.
Businesses do even worse. Just one in 10 commercial entities — high-rise towers to low-rise office buildings — are insured against earthquake. Some are self-insured but most say the high price of the insurance keeps them from making the purchase.
Just as puzzling is banks issuing loans that don't require homeowners and businesses to purchase earthquake insurance.
Scientists say since California lies on a huge number of geological faults it is just a matter of time before the "big one" hits. University of California, Berkeley earthquake expert Mary Comerio says, "What are we going to do when no-one has insurance and everyone has damage? I’m terrified of what's going to happen."
Swiss Re's disaster specialist Alex Kaplan notes that earthquakes are potentially the largest "uninsured exposure from a natural disaster in the U.S."
Add to that the average cost of a California home. It tops $500,000. So a major earthquake could end up costing the uninsured — and the taxpayer as well — billions and billions of dollars.
PIA Western Alliance
Summer doesn’t officially end until September 22nd. By the way, if you're keeping track, the exact time of the Autumnal Equinox is 6:54 p.m. Pacific Daylight Time.
However, for most of us the three-day Labor Day weekend is the traditional end of summer. It's the three months that most of us use for vacations. And we all know they are that couple of weeks — more or less — where we recharge and refocus.
Or do we?
A Harris Poll done by the American Psychological Association (APA) concludes that for 64% of us, the feel-good of vacation wears off in just a few days of the daily grind.
24% lose the benefits within a couple of days
40% say they are running on fumes within the same time frame
In other words, APA Center for Organizational Excellence head David Ballard notes, "Employers shouldn't rely on the occasional vacation to offset a stressful work environment. Unless they address the organizational factors causing stress and promote ongoing stress management efforts, the benefits of time off can be fleeting. When stress levels spike again shortly after employees return to work, that's bad for workers and for business. Employers can do better."
How to get there is the big question. The first stop in finding the answer is identifying the cause — or causes — of that stress:
No growth opportunity
Unrealistic job expectations
That means those returning to work after a vacation return to those stresses and those stresses quickly overwhelm them. Plus, vacations really aren’t vacations:
66% report vacations reduce stress and boost energy, motivation and work quality
But 20% say vacations are almost as stressful as work
28% of employees end up working more than they planned while on vacation
42% say they dread going back to work
Most employees say vacations are aren’t “welcomed” by their supervisors
Just 41% are encouraged to take time off
Only 38% of supervisors say they encourage employees to take a vacation
The APA says that is odd — and wasteful of employee health — because companies that support vacations tend to have happier workplaces. Those employees feel more valued and satisfied with their jobs.
Ballard said, “Websites and magazine articles offer plenty of tips on how to make the most of time out of the office, but often put the onus on the individual employee and ignore important organizational factors. A supportive culture and supervisor, the availability of adequate paid time off, effective work-life policies and practices, and psychological issues like trust and fairness all play a major role in how employees achieve maximum recharge.”
That message — Ballard says — comes from the top and “a culture that supports time off [that] is woven throughout all aspects of the workplace.”
Those organizations — the APA notes — provide stress management resources. This is a critical factor in creating happy employees because 35% say they experience chronic work stress and only 40% have employers that give them stress-management resources.
Last. Ballard said employers who add mental health resources to the work environment will have employees following a healthier lifestyle. “Chronic work stress, insufficient mental health resources, feeling overworked and under supported — these are issues facing too many workers, but it doesn’t have to be this way,” he said.
PIA Western Alliance
Bill Gatewood is the corporate vice president and director of personal insurance for Burns and Wilcox. Speaking about wildfires — and the California wildfires specifically — he said many of the insured having damages from wildfires are underinsured. This is a problem that can be solved in the future by insurance agents who are educated in proper insurance techniques.
With that he issued some advice for agents and brokers and put the problem of California wildfires — and wildfires in the other wildfire prone states in the West — in perspective. "Agents and brokers need to properly educate and counsel their clients on the differences between replacement costs of a home and the real estate value of a home because they can be very different,"” he said.
Plus, Gatewood noted the construction industry — from building to lumber to supplies — is not able to keep up with the demand for rebuilding or repairing homes and businesses harmed by those fires. That is going to increase costs so insurance policies need to reflect that fact.
Another result of the fires — Gatewood notes — is big changes in the insurance marketplace. "We have insurance carriers who are limiting the amount of business they’re writing in these wildfire areas of California. We've had carriers leave a particular segment of the marketplace, and insurance companies are changing their underwriting guidelines and appetites, so I think it'’s really important that agents and brokers in California are really in tune with what's going on in the market," he added.
While companies aren’t threatening to leave areas of the other Western states, this advice is still good for agents in those states.
"Proper insurance to value is really a big part of what agents and brokers are there to do, to provide that expertise to make sure that client has enough insurance to replace their home," he said. "It’s something that not a lot of insurance buyers understand. They know what their house is worth from a sale perspective, but what their house is worth or the amount that they have on their mortgage really has no significant bearing on what it’s going to cost to rebuild that house, particularly when we’re dealing with total losses like this."
California Insurance Commissioner Dave Jones says the insured residential and commercial losses from the state’s Carr and Mendocino Complex fires will end up close to $845 million. He says they now rank among the most destructive wildfires in California history.
Jones blames global warming.
“Our wildfire history tells the story of how our fire season has changed over the years from a four-month season to a year-round threat. Over the past two decades, the frequency and severity of wildfires has increased and caused significant property damage and the tragic loss of life in the wildland-urban interface areas of the state. Even more troubling is that areas once considered not to be high risk are now being scorched by wildfires,” he said.
A report from a wildfire review from Allianz called Burning Issues says 3.6 million residential properties lie within the state’s urban-wilderness boundary. More than one million of them are dangerously exposed.
As of last week there were more than 4,000 wildfires burning in California. Countless more are burning in the other states in the West. The California fires have scorched — so far — 600,000 acres and is more than quadruple the five-year average.
The California Department of Insurance says the Carr and Mendocino Complex fires destroyed over 8,800 homes and 329 businesses. They also totaled over 800 private autos and commercial vehicles. Other types of property are also added to the over 10,000 claims that have been filed.
Those totals are shared with dozens of the state’s larger fires and the larger fires in other states.
Jones worries that the destruction will not stop there. In a new report titled Trial by Fire: Managing Climate Risks Facing Insurers in the Golden State, Jones said,“We should remember that the vast majority of California's most destructive fires occurred after September 1st, and fire experts tell us that the worst fires for 2018 may still be ahead of us.”
The same goes for other states.
Most of the blame for fire is humans. The University of Colorado in Boulder did a study and found 84% of the fires in the two-decades before 2012 were human caused.
The university also came up with these frightening statistics. The number of wildfires per year larger than 100 acres:
1980 - 1989 — 140
1990 - 1999 — 160
2000 - 2012 — 250
The length of the wildfire season:
Early 1970s — 5 months
Today — 7+ months
By the way, one of the main causes of fires in the Golden State is equipment owned by the state’s public utilities. One utility — PG&E — is now liable for something like $1.5 billion for damages and deaths in a couple of last year’s fires in wine country.
It and other companies want a change in the strict liability law that says they’re not liable if they maintain their equipment properly and acts of God — so to speak — cause them to fail. Insurers would then be on the hook for the damages and oppose the push.
Apparently so did — even though Governor Brown supported the idea — the California Legislature. What the Legislature has done for the power companies instead is pass a law that allows them to charge their users fees and to sell bonds to cover those losses. That doesn't work for a lot of consumer advocates nor did it work for the Utility Reform Network head Mark Toney. “This is a bailout in sheep's clothing. PG&E gets to bill for costs resulting from negligent and even criminal behavior,” he said.
California Senator Bill Dodd disagrees. "This is about protecting ratepayers, not helping utilities. The fact of the matter is ratepayers would be hurt in a utility bankruptcy."
PIA Western Alliance
Idaho: Medicare Workshop:
A free Medicare Workshop for individuals turning 65 and those approaching Medicare eligibility will be held Wednesday, September 19, from 5:00 p.m. to 6:30 p.m. at the Hailey Public Library, located at 7 West Croy St., Hailey, Idaho. Caregivers and all those interested in learning how Medicare works are encouraged to attend.
The workshop will be led by Senior Health Insurance Benefits Advisors (SHIBA), a unit of the Idaho Department of Insurance. SHIBA presenters will introduce the various parts of Medicare, and explain some of the vocabulary associated with the program. Topics to be covered include:
Timeframes for enrolling in Medicare
Enrollment periods for Medigap, Medicare Advantage and Prescription Drug Plans
How the different parts of Medicare work together – and when they don't
To register for the workshop, please contact the SHIBA office at 1-800-247-4422.
Oregon — From the Department of Insurance: The Oregon Division of Financial Regulation recently announced the following Proposed Rulemaking hearing:Medicare Workshop:
Amendment to Standard Bronze and Silver Plans for 2019
Rules affected: OAR 836-053-0013
To clarify that coverage provided under the standard plans must meet the requirements of HB 3391.
This rule makes permanent amendments to OAR 836-053-0013 and its exhibits. The changes contained in the rules were previously adopted via a temporary rule. These amendments are needed to ensure that the standard bronze and silver plan designs adopted by the department under ORS 743B.130 comply with the requirements of House Bill 3391 (2017).
Filed: August 31, 2018
Public hearing: September 25, 2018 1:30 p.m.
Last day for public comment: October 2, 2018, 5 p.m.
The agency requests public comment on whether other options should be considered for achieving the rule's substantive goals while reducing the negative economic impact of the rule on business.
For more information on this proposed rule, please visit the Division's website:
Bulletin 2018-07: Regulation of Association Health Plans in Oregon:
The Oregon Division of Financial Regulation (the division) has received numerous inquiries about its guidance concerning associations and Multiple Employer Welfare Arrangements (MEWAs). This bulletin summarizes and clarifies guidance for issuers, associations, MEWAs, insurance agents, and producers in light of the recent United States Department of Labor (DOL) final regulation titled "Definition of Employer Under Section 3(5) of ERISA-Association Health Plans" (AHP rule).
Attached is the full bulletin as released by the Department of Consumer and Business Services (DCBS).
More information will be made available on the Division of Financial Regulation website https://dfr.oregon.gov bulletin2018-07 — https://content.govdelivery.com/attachments/ORDCBS/2018/09/10/file_attachments/1069511/bulletin2018-07.pdf
The Oregon Division of Financial Regulation recently adopted the following rule:
ID 30-2018 & ID 32-2018: Adoption of requirements for sale of Medicare Supplement plans on or after January 1, 2020
Rules affected: OAR 836-052-0114, 836-052-0119, 836-052-0141, 836-052-0143, 836-052-0144
Clarifying applicability of exhibits to OAR 836-052-0160.
Filed: August 28, 2018
Effective: September 1, 2018
Rules affected: OAR 836-052-0114
Refiled to correct error in Exhibit 1.
Filed: August 30, 2018
Effective: September 1, 2018
ID 30-2018 Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id30-2018_rule-order.pdf
ID 32-2018 Permanent Administrative Order — https://dfr.oregon.gov/laws-rules/Documents/id32-2018_rule-order.pdf
For more information, please visit the Division's website:
Washington — Kreidler Issues Fines:
Insurance Commissioner Mike Kreidler issued fines in July totaling $115,050 against insurance companies, agents and brokers who violated state insurance regulations.
Agents and brokers
T-Mobile USA Inc., Bellevue; fined $20,000 order 18-0085
T-Mobile, a cell phone carrier, is also a licensed insurance producer in Washington state. The company offered to pay off phone loans and early termination fees for Verizon customers who switched to T-Mobile and purchased its insurance between May 31 and Aug. 2, 2017. The offer is illegal in Washington state because it induces people to purchase insurance. During the promotion, 927 Washington consumers purchased the plan, which cost $15 per month.
Linna A. Callaham, Bainbridge Island, Wash.; license revoked, order 18-0288
Callaham collected insurance premiums from a commercial client but failed to send them to the insurance company, causing two policies to be canceled and a commercial building to be uninsured for eight months. She never refunded the unpaid premium of more than $5,000 to the client.
APPS Insurance Services Inc., Puyallup, Wash., and James M. Shirreff, Fircrest, Wash.; fined $3,000, order 18-0303
The insurance commissioner conducted four financial examinations that found APPS delayed sending premium refunds totaling nearly $1,500 to three commercial clients. Shirreff is an insurance producer and is responsible for APPS, an insurance agency.
Geoffrey Wayne Leininger, Plano, Texas; license revoked, order 18-0319
A consumer filed a complaint with the insurance commissioner after Leininger placed a homeowner’s policy without the consumer’s consent. The insurer, Liberty Mutual Insurance, refunded the $649 premium payment to the consumer and canceled the unwanted policy.
GSIS, Inc., and Glenn Stebbings, Redondo Beach, Calif.; fined $2,500, order 18-0243
Kenneth E. Kukral, Beachwood, Ohio; fined $3,500, order 18-0246
GSIS and Stebbings were not licensed to sell surplus lines insurance policies in Washington state. To avoid becoming properly licensed, they used Kukral as a “courtesy filer” at least 49 times to obtain surplus lines policies, a violation of state insurance laws.
The insurance commissioner disciplined the following insurance producers for failing to notify the agency of administrative actions against them:
Daniel Lee, New Orleans; fined $250, order 18-0192
Horace Thomas Gaines, Nashville; fined $250, order 18-0193
Walter A. Ringfield, Phoenix; fined $500 and revocation rescinded, order 18-0197
One Resource Group Corp. and Todd Jeffrey Stewart, Roanoke, Ind.; fined $500, order 18-0281
Alex Belfort, Sinking Spring, Penn.; license revoked, order 18-0302
Benjamin Stutts IV, Sandy, Utah; license revoked, order 18-0322
The insurance commissioner fined the following companies for filing their rates late or using the wrong rates:
Kaiser Foundation Health Plan of Washington Options, Inc., Seattle; fined $3,500, order 18-0222
Kaiser Foundation Health Plan of Washington, Seattle; fined $3,500, order 18-0228
GEICO, Chevy Chase, Md.; fined $2,500, order 18-0126
First National Insurance Co. of America, Keene, N.H.; fined $20,000, order P18-0275
Pennsylvania Manufacturers Indemnity Co., Blue Bell, Penn.; fined $1,500, order 18-0332
The insurance commissioner fined the following organizations for violating state insurance laws:
Pioneer Title Co. of Walla Walla, Inc., Walla Walla, Wash.; fined $250, order 18-0258
Oregon Association of Health Underwriters, Portland, Ore.; fined $800, order 18-0304
Washington — Clarification: Clarifying adjuster licensing requirements (R 2017-04) rule withdrawn
We have withdrawn the notice to start rulemaking (CR-101) on the clarifying adjuster licensing requirements rule R2017-04. We withdrew the notice to start rulemaking because as we progressed through the process for this proposed rule, the broad language in RCW 48.17.010(1) that defines "Adjuster" will not allow us to narrowly identify the role of adjusting in insurance claims.
For more information, including the withdrawal letter, please visit the rule's webpage — https://www.insurance.wa.gov/clarifying-adjuster-licensing-requirements-r-2017-04?utm_content=&utm_medium=email&utm_name=&utm_source=govdelivery&utm_term=
7701 Las Colinas Ridge, Ste. 800, Irving, TX 75063