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Volume 9: August 10, 2010 Edited by Kevin McKechnie, Executive Director Assistant Editor, Renee Galbraith, Health Policy Manager Contents: ABIA’s 2010 Annual Conference Compliance and Regulation News Educational Opportunities Member News ABIA’s 2010 Annual Conference September 22 – 24, 2010 JW Marriott Desert Ridge, Phoenix, AZ Early Bird Registration Rate Has Been Extended to August 13!! Don’t Miss this Opportunity to Save! The Early Bird registration rate discount of $200 has been extended to August 13th. Register today to attend the only event devoted strictly to the bank-insurance business. And a multiple bank/agency discount is available after your organization’s first registration. Register to attend the premier event for the bank insurance industry, where you can network and learn from your industry peers. Register Online or if registering more than one attendee: Print and fax to 202-828-6073 Return to top. Opportunities to Exhibit at ABIA’s Conference Available Don’t Delay in Selecting Exhibit Space – Exhibit Hall over 66% Sold! Visit www.theabia.com for Exhibit and Sponsorship Opportunities for ABIA’s 2010 Conference The ABIA Conference is a key variable in your formula for success! Enhance the bottom line – market a new product – meet face-to-face with influential bank insurance executives – build rapport – establish and renew contacts – and much more! Return to top. ABIA Golf Tournament: Sponsored by WNC Insurance Services, Inc If you enjoy playing Golf then register for to play at the ABIA Conference! Come and enjoy a round and network with your industry friends! Join us for the ABIA Conference Golf Tournament sponsored by WNC Insurance Services, Inc. on September 22 at Wildfire Golf Club, at the JW Marriott Desert Ridge Resort from 7:30 a.m. – 12:30 p.m. Space is limited, but there are still slots available, so please register today. Take advantage of a special opportunity sponsored by AEGON Direct Marketing Services, Inc. to win a trip to the 2011 Masters Tournament with A HOLE-IN-ONE! Register for the Golf Tournament today!: Follow the link to the Golf Registration Form Please contact Sonia Murphy at firstname.lastname@example.org or 202-663-5510 if you have any question or want to discuss your participation in the 2010 ABIA Annual Conference. We look forward to seeing you in Phoenix, AZ in September! Return to top. Don’t be Uninformed: Check the Advance Conference Program for the New Schedule! The 2010 ABIA Advance Conference Program for the upcoming Annual conference, September 22-24, 2010, JW Marriott Desert Ridge, is available. This year’s program is full of informative, forward looking sessions that will help grow your business. Among the changes to this year’s schedule: • All of the breakout session presenters are from banks or bank-owned agencies. Take this opportunity to learn from your bank-insurance peers about successful programs and initiatives. • New features this year are Banker Power Breakfast Sessions on Thursday and Friday. See the article below for details. Do not miss the premiere event in the Bank Insurance industry! Register online today! Return to top. Banker Power Breakfast Session Highlights: Open & Free Breakfast to All Bank/Agencies Attendees COVERDELL Thursday, September 23 7:45 a.m. to 8:45 a.m. The Coverdell Team is pleased to invite you to its Banker Power Breakfast: “Peace of Mind.” Coverdell’s expertise and innovation have resulted in new partnerships. In the “Peace of Mind” Session being launched at the ABIA Annual Conference, you will learn how two industry leaders are using their synergies to continue to provide high value fee-income solutions. And you will learn how you can benefit your clients’ relationships and how to enhance the bottom line. INSURANCE DIALOGUE Thursday, September 23 7:45 a.m. to 8:45 a.m. Be Insurance Dialogue’s guest at its Banker Power Breakfast: “The Medicare Gold Rush—How to Profit from it.” Thousands of Americans turn 65 each day…many of them your clients. In this seminar, Insurance Dialogue will show you how to mine for the Medicare gold. Medicare is highly regulated and very complex, this educational seminar, presented by Medicare specialists at Insurance Dialogue, will simplify the Medicare complexities and educate you on how the Medicare market provides a great opportunity for your company to drive revenue. The gold lies in your database – learn where the money is and how you can drive revenue off of those turning 65, while bringing additional value to your clients. AFFINION Friday, September 24 8:00 a.m. to 9:00 a.m. Join the Affinion Panel in its Banker Power Breakfast: “Retention, Loyalty and Engagement.” The insurance industry has extolled the virtues of offering customers insurance, but the industry has never quantified the results for customers. In this Power Breakfast you will hear the Affinion Team share the findings of a recently completed survey of insured customers’ perceptions of the Financial Institutions that they are purchasing insurance through. A small hint, the numbers are exceptional. Return to top. 2010 ABIA Annual Conference Session Highlights: Earn ABA Compliance Certification Credit Compliance Basic Bank-Insurance Compliance: Everything You Could Ever Want to Know About It A revised and expanded edition of "Essentials for Bank-Insurance Compliance" that details all aspects of bank- insurance operations – licensing, compensation, marketing, consumer protection, compensation, and much more! Advanced Bank-Insurance Compliance: The Political and Regulatory Future What bank-insurance compliance issues are on the horizon? We will use the “Essentials for Bank-Insurance Compliance” as a starting point to discuss federal regulatory and legislative initiatives – including the new Consumer Financial Protection Agency – NAIC activities, and revisions to federal banking regulations. Debt Protection Products Everything You Need to Know About Compliance and Credit Protection Programs This session provides an in-depth look at the requirements of the Federal Reserve’s Regulation Z, including all recent changes and proposed changes; the OCC’s debt protection rule; and various federal and state laws that impact debt protection products. These sessions will be given by our outside Counsels Jim McIntyre, Chrys Lemon, Jim Sivon and Eli Peterson. All three session have been approved for 3.5 hours credit towards the ABA Compliance certification. Register online today! The Early Bird registration rate discount of $200 has been extended to August 13th. Register today to attend the only event devoted strictly to the bank-insurance business. And don’t miss out on the additional discounts for multiple bank/agency attendees. Return to top. 2010 ABIA Annual Conference Session Highlights Employee Benefits Practice – A Good Revenue Stream for Uncertain Times Bank Insurance Agencies have found that adding Employee Benefits to their line of business allows for more cross-selling opportunities with the Banks commercial customer base and provides a stable and profitable revenue stream. This session will focus on how this one agency has developed this product line and plans for future sales growth and management. William M. Bohn, President and Chief Executive Officer, Associated Financial Group, LLC Come to this session at the ABIA Annual Conference on Thursday, September 24, 2010 at 10:30 AM th Register for the Annual Conference today before the Early Bird ends this Friday, July 30 ! Return to top. Compliance and Regulation News Compliance Corner: Sharing and Use of Customer Information Among Affiliates Most bank-insurance compliance officers are intimately familiar with the Gramm-Leach-Bliley Act’s (GLBA) privacy provisions affecting the sharing of customer information with non-affiliated third-parties. Less familiar are the rules and restrictions governing information shared among affiliates. The Fair Credit Reporting Act (FCRA) regulates the sharing and use of certain types of information by affiliates. FCRA Information Sharing Basics: • “Transaction and experience” information may be shared with affiliates without restriction. • Transaction and experience information is limited to information learned through transactions or experiences with customers. • All “other” information – including information learned prior to any transactions or unrelated to the execution of a transaction – may only be disclosed to an affiliate if a customer is first provided an opt out notice and the customer does not opt out. FCRA Information Use Restrictions: • FCRA restricts the use of shared information. Information shared with an affiliate for “marketing purposes” may only be used by the affiliate if a customer has received an opt out notice and has not elected to do so. That notice must inform a customer that his or her information will be shared with affiliates for marketing purposes. There is an exception that permits the affiliate to use the information for marketing without first providing an opt out notice if the affiliate has its own established business relationship with the customer. Do you have further questions about this compliance issue? Other compliance questions you would like to see addressed? Please send your comments or questions to Valerie Barton at email@example.com. Articles in the Compliance Corner are provided for informational purposes only by ABIA’s outside counsel McIntyre & Lemon, PLLC. They are not intended to be legal guidance. Readers should consult with legal counsel before implementing any requirements that are addressed. Return to top. OFC will be on Congress’ 2011 Agenda During the July meeting of the National Conference of Insurance Legislators (NCOIL), Representative Barney Frank (D-MA), Chairman of the House Financial Services Committee, announced that establishing an Optional Federal Charter (OFC) will be on Congress’ 2011 agenda. Creation of an OFC has strong bipartisan support and, according to Rep. Frank, the upcoming debate on the need for federal oversight is “not surprising” after passing H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act. Although Rep. Frank pledged to remain neutral during the debate, he did assert that he “saw no need for federal oversight of auto insurance.” Rep. Frank advised opponents of an OFC to contact their representatives “early and often.” Supports of an OFC, including ABIA, have also taken this advice and are contacting and meeting with staffers on both sides of the aisle during the August recess. Return to top. Educational Opportunities ABA Schedules Series of Telephone Briefings on Regulatory Reform ABA is hosting a series of telephone briefings aimed at helping bankers understand the major changes included in the Dodd-Frank regulatory reform bill (H.R. 4173). • “The Impact on Wealth Management and Institutional Trust” -- Wednesday, August 11 • “Systemic Regulation: What Will Change and Who Will Be Impacted” -- Wednesday, August 18 Each briefing will run from 2 to 4 p.m. EDT. Discounts are available for those who purchase multiple briefings. Read more or register. For more information on the reform bill, including an in-depth summary, visit www.aba.com/RegReform. In addition, the ABIA is holding a telephone briefing on October 7 to discuss the impact of the Dodd-Frank regulatory reform bill (H.R. 4173) on the Bank-Insurance business. Continue to watch this space for more details. Return to top. Michael White-Prudential Report Bank Insurance Brokerage Income Hits Record for Second Straight Quarter Marking the highest quarterly results achieved, first-quarter bank holding company (BHC) insurance brokerage income of $3.32 billion was up 9.6% from $3.03 billion in first quarter 2009, according to the Michael White- Prudential Bank Insurance Fee Income Report. The last two quarters have registered the highest watermarks ever recorded in BHC insurance brokerage fee income. Thus far in 2010, 60.2% of BHCs engaged in insurance brokerage activities. Compiled by Michael White Associates (MWA) since 2001 and sponsored by Prudential's Individual Life Insurance business, a proud member of the American Bankers Insurance Association (ABIA), this report measures and benchmarks the banking industry's performance in generating insurance brokerage and underwriting fee income. Results are based on data from all 7,177 commercial banks and FDIC-supervised savings banks and 951 large top-tier bank holding companies operating on March 31, 2010. Learn More. Return to top. BOLI Assets Reach $135.8 Billion in 1Q 2010 According to Report Issued by Michael White and Meyer- Chatfield Bank-owned life insurance (BOLI) assets reached $135.8 billion in the first quarter of 2010, reflecting a 1.6% increase from $133.7 billion in the first quarter of 2009, according to the Michael White-Meyer-Chatfield Bank- Owned Life Insurance (BOLI) Holdings Report. The first quarter 2010 total for BOLI holdings is the sum of BOLI assets held by large bank holding companies (BHCs), stand-alone banks, and savings associations. BOLI is used to recover costs of employee benefits and offset the liabilities of retirement benefits, helping banks to keep up with the rising benefit costs. Compiled by Michael White Associates, LLC (MWA) and sponsored by Meyer-Chatfield, the Michael White- Meyer-Chatfield BOLI Holdings Report measures and benchmarks the cash surrender values (CSV) of life insurance and ratio of CSV to capital possessed by BHCs and banks. The data herein were reported by 951 large top-tier BHCs with assets greater than $500 million and 7,932 commercial banks, thrifts and FDIC- supervised savings banks operating on March 31, 2010. Among the study's most significant findings are these: • Large top-tier BHCs increased their BOLI holdings by 1.8% from $123.7 billion in first quarter 2009 to $125.98 billion in first quarter 2010. • Of 1,443 stand-alone banks, those without BHCs, 423 or 29.5% recorded $2.42 billion in first quarter BOLI holdings, up 1.6% from $2.39 billion in first quarter 2009. • Of 755 savings association, 346 or 45.8% recorded $7.44 billion in BOLI holdings, down 2.1% from $7.60 billion in first quarter 2009. • Of the 951 large top-tier BHCs, 770 or 81.0% reported holding BOLI assets in first quarter 2010, representing a 2.3% increase in their number from the 753 in first quarter 2009. • BHCs with assets greater than $10 billion reported the highest incidence of BOLI ownership, as 65 of 77 BHCs, or 84.4%, reported having BOLI assets. • Of 7,932 banks and savings associations operating on March 31, 2009, 3,820 or 48.2% reported holding BOLI assets of $123.52 billion, an increase of 8.1% from $114.28 billion in first quarter 2009. • Total bank BOLI holdings increased 0.58% from $122.81 billion at year-end 2009 to $123.52 billion year-to-date on March 31, 2010. • The total number of banks and thrifts reporting BOLI assets increased 245 or 6.9% from 3,575 in first quarter 2009 to 3,820 banks in first quarter 2010. (See Table 2.) • Banks with assets between $1 billion and $10 billion had the highest rate of reporting BOLI assets, as 418 of 575 banks or 72.7% reported having them in the first quarter of 2010. • The largest banks, those over $10 billion in assets, accounted for the largest dollar increase - $6.22 billion - in their combined BOLI assets. Banks with assets between $300 million and $500 million registered the largest percentage increase in total BOLI assets, rising 16.0% from $2.63 billion in the first quarter of 2009 to $3.05 billion in first quarter 2010. (See Table 1.) • The largest increase in the number of banks reporting BOLI assets occurred among banks with $100 million to $300 million in assets. Their number increased by 108 from 1,324 banks in first quarter 2009 to 1,432 in first quarter 2010. (See Table 2.) • According to federal banking regulators, it is generally not prudent for a bank to hold BOLI assets with an aggregate cash surrender value (CSV) that exceeds 25 percent of the sum of the institution's total capital. (Depending on the bank's charter, total capital is defined either as Tier 1 capital or the sum of Tier 1 capital and the allowance for loan and lease losses). Nationally, mean bank BOLI assets as a percent of the sum of Tier 1 capital and the loss allowances increased from 14.32% in first quarter 2009 to 16.33% in first quarter 2010. (See Table 3.) Among the largest bank holding companies (BHCs) with assets over $10 billion, the 36.4% increase in allowances for loan and lease losses from $180.8 billion in the first quarter of 2009 to $246.5 billion in the first quarter of 2010 resulted in an 8.2% increase in the sum of Tier 1 Capital and the allowances. The loss allowances nearly quadrupled from $64.2 billion in first quarter 2007, and Tier 1 capital rose 58% during the same period. These increases in capital and allowances for losses among the largest BHCs kept a lid on their BOLI-to-capital ratio and that of the industry. View Tables and Learn More. Return to top. 2010 Best Practice Panel Schedule Agency Integration Panel No Call in August October 4 Annuities Panel No Call in August September 22 – 24, 2010 ABIA Annual Conference, JW Marriott Desert Ridge, Phoenix, AZ October 19 Community Bankers Panel No Call in August September 22 – 24, 2010 ABIA Annual Conference, JW Marriott Desert Ridge, Phoenix, AZ October 21 Compliance Panel No Call in August September 22 – 24, 2010 ABIA Annual Conference, JW Marriott Desert Ridge, Phoenix, AZ November 9 Credit Insurance and Debt Cancellation Panel No Call in August November 23 Direct Marketing Panel No Call in August September 22 – 24, 2010 ABIA Annual Conference, JW Marriott Desert Ridge, Phoenix, AZ November 23 Life Coverages Panel August 26, 2010 “"What's New in Life Settlements - States Taking a Harder Look at Life Settlements" featuring Brian Casey with Locke Lord Bissell & Liddell, LLP. Please note new date! September 22 – 24, 2010 ABIA Annual Conference, JW Marriott Desert Ridge, Phoenix, AZ November 11 P& C Panel No Call in August November 18 Reinsurance/Risk Management Panel No Call in August November 9 Return to top. Member News Welcome ABIA’s New Members Cedar Security Bank, NE With over $30 million in assets, Cedar Security Bank is a full-service financial institution designed to meet the needs of the community it serves. Through Cedar Security Bank’s alignment with Cedar Security Insurance and Big Red Insurance Agency, their customers are putting the power of choice to work for them. Cedar Security Bank takes pride in providing its customers with friendly service, while helping the clients protect their assets and save money. GTPS Insurance, IL GTPS Insurance Agency and First Federal Saving Bank alignment delivers a full range of financial options. Because there are so many things for customers to think about when it comes to planning their insurance, it's easy to put things off. GTPS Insurance helps make this process easy for its clients. As an independent broker, GTPS Insurance Agency will shop around until it finds the best coverage at the best price. ReputationDefender, CA Created in 2006, ReputationDefender is the world's first comprehensive online reputation management and privacy company. They are the most experienced and most technologically innovative company of their kind. With customers in over 35 countries, ReputationDefender is proud to serve a global customer base throughout the world's largest community—the Internet. State Bank, IA State Bank is a locally owned, independent financial service organization focused on creating and maintaining very personalized customer relationships. Currently, State Bank has more than $40 million in assets, which translates into strong resources for the families, farms, and businesses in its area. With locations in Spencer, Everly, and Peterson, State Bank develops personal and lasting relationships within these communities and with their residents. The bank's commitment to provide quality financial products and services has kept them in tune with the current needs of their customers. Return to top. Resources For Information on Government Relations Contact Kevin McKechnie at firstname.lastname@example.org For Information on Insurance News Contact Renee Galbraith at email@example.com For Information on Conference Questions Contact Valerie Barton at firstname.lastname@example.org For Information on Dues and Publications Contact Valerie Barton at email@example.com For Information on ABIA Best Practices Panel Contact Mike Polychrones at firstname.lastname@example.org For more information on ABA Careers visit the Job Resume Bank at http://aba.careerbank.com/default.cfm Contact the ABIA Office for information on how to become a Premier Member. ABA Members: To unsubscribe and to manage your subscriptions, please visit ABA E-Mail Bulletins and check or uncheck the appropriate boxes. http://www.aba.com/Members+Only/bulletin.htm ABIA Members: To unsubscribe and manage your subscription, and for other inquiries, please contact Renee Galbraith at email@example.com.
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