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2005 Legislative Session - Independent Insurance Agents of Maryland


  • pg 1
           A U G U S T 2 0   0 5

       2005 Legislative
       Session                By Shelley Arnold, CPCU,

                              AU, ARM, AAI

                      O       THE   2005 GENERAL
                              ASSEMBLY HAS COMPLETED
                                                              BACK IN   2006. WE NEED
                              THEIR WORK FOR THE YEAR.        TO BE PROACTIVE IN OUR


                              HAVE LEFT PRODUCERS WITH        LEGISLATORS ON ISSUES
                              A SLIGHT SCRATCH, BUT FOR       CRITICAL TO OUR INDUSTRY.
                      E       THE MOST PART, UNHARMED.        WE LOOK TO YOU FOR

                      T       MANY, INCLUDING MARVIN

                              MANDEL, IIAM’S LEGISLATIVE
                                                              SUPPORT. WE NEED YOU

                                                              TO CONTACT LEGISLATORS,
                              LOBBYIST, ARE PREDICTING A      EDUCATE CONSUMERS AND

                              THE   2006 SESSION.   MANY OF   SO HERE IS THE SKINNY!
                              THE BILLS THAT DIDN’T QUITE     (con’t on page 6 )
                              MAKE IT IN   2005 WILL   BE

in this issue . . .

    t a b l e                                                  o f                     c o n t e n t s
                                                          Columbus American            G.M. Pusey & Associates,      New Associate Member:
                                                          Insurance Agency, Inc.       Inc.                          State Auto Insurance
      WELCOME                                             7206 Good Luck Rd.           12101 Salt Point Rd.          Company

                  new members
                                                          Lanham, MD. 20706            Bishopville, MD. 21813        518 E. Broad St.
                                                          301-552-1342                 302-436-0882                  Columbus, Ohio 63215
                                                          301-552-9730                 302-436-0887                  614-464-5000
                                                          Columbus Okpali, Principal   George Pusey, Principal       614-719-0311

                                                                                                                     Rob Gritton, Marketing
 Session                                                                     Representative

       1 St.

                            IIAM OFFICERS 2005-2006
                                                    12                     Stephen Earll                          Chairman of the Board

     13               What
 IRC Study
                            Denise Carnes, CPCU                    President

                                                                           Thomas C. Lowe, CPCU                   State National Director
                      CEO Panel

                                                                           Heather Parker, ACSR                   President-Elect

                                                                           Berry Brown                            Vice President

                                                                           Angela Ferguson                        Director-At-Large
 Act”                    Shelley Arnold, CPCU, AAI              Executive Vice President

 Qualifier    23

               THE MARYLAND MESSENGER INDEPENDENT AGENTS                                              OF   MARYLAND, INC.
               Editor: Shelley Arnold, CPCU, AU, ARM, AAI
               Graphic Designer: Laurie Hare
               Advertising: Info @ www.iiamd.org
               The Maryland Messenger is a monthly publication published for the exclusive use of regular and
               associate members of the Independent Insurance Agents of Maryland. Publication of any article, let-
               ter to the editor or advertisement in the Maryland Messenger should not be deemed an endorse-
               ment by IIAM of the opinions expressed or products advertised. Questions and comments should
               be directed to the editor, Shelley Arnold.

               Editorial Office, IIAM, 2408 Peppermill Drive, Suite A, Glen Burnie, MD 21061
               phone 410.766.0600 • fax 410.766.0993 • email iiamarnold@aol.com • www.iiamd.org

    AUGUST   2005:3
president’s m e s s a g e
                               Denise Carnes, CPCU
               It’s summer, many are enjoying          IIAM also has on-line continuing education
                 vacations, and various family         courses. There is an on-line flood course
                    activities and it just seems       available. Don’t forget that flood insurance
                      to be the prefect time to        continuing education is mandatory for those
                        bring up the fun topic         Agents selling Homeowners Insurance. Along
                           of “continuing              with flood, IIAM has filed and received approval
                             education. ”We            on 15 additional on-line programs which range
                                may be taking it a     from 1 to 7 credit hours.
                                  little easier than
                                    usual but your     I encourage you to checkout our Association’s
                                 Association           website for any and all educational issues. The
                     is hard at work offering a        website is full of useful information and not just
           variety of courses guaranteed to            about education either.
 increase your knowledge and fulfill those nasty
 continuing education requirements.                    Just in case you don’t know it, the website
                                                       address is www.iiamd.org
 In August, there are three classroom offerings
 that provide 6 credits each. Speaking from
 experience, the August 30th class, Best Practices
 Errors and Omissions Loss Control, is a terrific
 class. I encourage everyone to take this one at
 least once!

 September, October, November & December
 also have various classroom courses sure to
 interest those needing C.E. for renewals in the
 upcoming months.

                                                                                             AUGUST   2005:4
 passed ?
        (con’t from cover)                        We have added a two hour flood             six bills were passed this past session
                                                  seminar to our on-line continuing          relating to youthful drivers.
        HB56-(Chapter 521)                        education offerings. If you are
        The Social Security Number Privacy        interested in taking the on-line class     HB617-(Chapter 563)
        Act. It is intended to curb the           go to http://vu.iiaa.org/LMS/User/         The Life Insurance Freedom to
        frequency of ‘identity theft’. A          login.aspx?ReturnUrl=%2flms%2fde-          Travel Act passed. This bill prohibits
        person (which includes businesses)        fault.aspx. The flood c.e. bill that       an insurance carrier from refusing
        may not post, print on a card             passed last year required producers        to insure an individual based on
        (credit, medical, etc.), require          writing flood to obtain the credits. It    the individual’s past lawful travel
        someone to transmit over the              was broadened this year to include         experiences. The bill was apparently
        Internet (unless through a secure,        all producers writing homeowners.          the result of some carriers refusing
        encrypted connection), or use one’s                                                  to write individuals who have
        number to access the Internet, one’s      HB393-(Chapter 542)                        traveled to the Middle East over
        social security number (unless            relates to minors with provisional         the past several years.
        required by state or federal law). The    driving licenses. It prohibits the minor
        bill does have one drawback, primari-     from transporting other minors,            HB1081-(Chapter 415)
        ly you, as an individual, must request,   unless they are a member of the            Extends the bill that passed last year
        in writing, to stop the use of your       same household, or if there is             regarding spousal immunity and limits
        individual social security number.        another driver in the vehicle that is      of automobile insurance to apply to
                                                  over 21. It is a secondary moving          parent-child immunity. The right of
        HB160-(Chapter 33)                        violation and is in effect from the        action may not be restricted by the
        passed with flying colors. This bill      issuance of the provisional until the      doctrine of parent-child immunity or
        requires licensed producers who           151st day. SB50/HB394-                     by any insurance policy provisions, up
        write homeowners in the State to          (Chapter 544) also relates to              to the limits of motor vehicle liability
        obtain continuing education hours in      minors. It prohibits minors under a        coverage or uninsured motor vehicle
        flood. It is our understanding,           provisional learners’ permit to use a      coverage. This provision previously
        producers will be required to obtain      wireless communication device. A           read ‘mandatory minimum limits
        two (2) hours of flood related c.e. by    similar bill has been introduced for       required of §17-103.
        2006. In order to assist our agents,      the past several years, one which          (con’t on page 7)
        we have held five free flood seminars.    would apply to all drivers. A total of

    AUGUST   2005:6
(con’t from page 6)                         Designee’ to file notices. This portion of   effective dates after January 1, 2005.
HB1281-(Chapter 599)                        Maryland law, 19-406 relates to notices.     The provisions found in the initial §24-
Extends the termination date for            This legislation added non-renewal to        214, which allowed insureds to go
financial assistance as a result of         the current cancellation provisions and      directly to the Society and providing
Hurricane Isabel. All claims must be        requires that in either case, cancellation   those physicians that go direct a 4%
received by the Department of Housing       or non-renewal (with the exception of        rebate were eliminated. Surviving that
by 9/30/05 and may be considered for        non-payment of premium), the Workers         cut, however, the Society may not pay a
assistance until 5/31/06.                   Compensation Commission’s Designee           commission at a rate higher than 5%.
                                            receives a notice. It also eliminates the    This provision initially applied to all
SB43-(Chapter 242) Task                     potential to have notices rescinded due      providers of medical malpractice liability,
Force to Study Identity Theft (passed       to grammatical, typographical or other       but was amended to apply to the
last year, this legislation changes the     errors and even erroneous information,       Society only. It remains effective from
required participants of the Task Force).   if in the absence of that information, the   1/11/05 through 12/31/09.
                                            policy would still have been cancelled or    (con’t on page 8)
SB61-(Chapter 108)                          non-renewed. This bill also changes
                                            certified mail to certificate of mail.
Trailers & Semi-trailers-Registration-
Changed weight and fees for certain
types of semi-trailers.
                                            SB836-(Became Law
                                            without Governor's
SB85-(Chapter 115) Makes                    signature per MD
it clear that MAIF employees are state      Constitution - Chapter 1)
employees with respect to the Maryland      Maryland Patients’ Access to Quality
Tort Claims Act.                            Health Care Act of 2004-Corrective

SB97/HB265- (Chapter
                                            Provisions. This bill thankfully, removed
                                            many of the provisions that IIAM               PASSED:
117) provides that the Commissioner         objected to in the initial offering.
SHALL order an insurer, under a             Specifically, SB836 repealed the
                                                                                           HB56-(Chapter 521)
personal automobile policy, to pay          provisions initially passed in §19-104.1
                                            and adding §19-801 through 19-808, the         HB160-(Chapter 33)
attorney fees if the insured must attend
a hearing and the Commissioner finds        ‘Maryland Health Care Provider Rate            HB393-(Chapter 542)
                                            Stabilization Fund’. It also repealed and
that the insurer did not state an actual                                                   HB617-(Chapter 563)
reason for an increase in premium,          amended §24-211, which requires that if
                                            Med Mutual files for a rate increase of        HB1081-(Chapter 415)
cancellation, non-renewal or reduction
in coverage (not in accordance with         7.5% or more and their surplus is more         HB1281-(Chapter 599)
§27-501, the insurer’s filed rating plan    than 500% of its authorized control            SB43-(Chapter 242
                                            level risk based capital, the
or underwriting standards, or the lawful
                                            Commissioner may determine whether
                                                                                         HB1281-(Chapter 599)
                                                                                          SB61-(Chapter 108)
terms and conditions of the policy).
                                            the Society’s surplus is excessive and         SB85-(Chapter 115)
SB128-(Chapter 285)                         after a hearing, may in fact order the         SB97/HB265- (Chapter 117)
                                            rates to be re-filed. The legislation
relates to Workers Compensation and                                                        SB128-(Chapter 285)
                                            capped increases for medical malprac-
methods of cancellation and non-                                                           SB836-(Became Law without
                                            tice premiums at 5% for policies with
renewal. It identifies a ‘Commission’s                                                     Governor's signat u re per MD
                                                                                           Constitution - Chapter 1)ter

     AUGUST   2005:7
                      One of the disturbing factors of the origi-   emergency legislation because of the
                      nal bill, which remained, is the establish-   ‘Medical Malpractice’ crisis….when did
2005   LEGISLATIVE    ment of the ‘People’s Council’. The           Homeowners sneak in? The ‘Council’ will,
                      People’s Council has been established to      if they find that consumers are affected,
                      evaluate all medical professional liability   appear before the Commissioner and the
                      and homeowners matters pending before         courts if necessary, on behalf of the
                      the Commission. Their charge is to            consumer. They will also review any
                      determine if the interests of insurance       proposed rate increases of 10% or more
                      consumers are affected. I understand that     and determine if they are inadequate,
                      HB2 was introduced and passed as              unfairly discriminatory or excessive an
                                                                    will appear before the Commissioner on
                                                                    behalf of consumers, regarding the rate
                                                                    filings. The ‘make-up’ of the Counsel will
                                                                    be appointed by the Maryland Attorney
                                                                    General and will consist of persons that
                                                                    have been admitted to practice law in the
                                                                    State. Another example that proves my
                                                                    theory, ‘lawyers know everything about
                                                                    everything, now actuary science! By the
                                                                    way, after the ‘People’s Council’ was
                                                                    established, the legislators thought they
                                                                    should determine a way to fund the new
                                                                    division and HB882 was introduced.
                                                                    Unfortunately, the bill received an ‘unfavor-
                                                                    able report’ from House Economic Matters.
                                                                    WAY TO GO GUYS!

                                                                    AND NOW, WHAT DIDN'T
                                                                    MAKE THE GRADE . . .

                                                                    (con’t on page 9)

                                                                                            AUGUST   200 5: 8
   W H AT D I D N ’ T M A K E T H E G R A D E ?

(con’t from page 8)                          insurer. The insured’s signature is             HB1280-This was ‘our’ bill. We
                                             required on the statement. It defines           introduced this bill on behalf of our
HB64/SB437- This bill would                  additional/optional coverage as a               membership and the problems that many
have required insurers or an insurance       coverage or service that covers the             of our members have voiced when
producer to provide written annual           structures, contents, property, or              dealing with mortgage companies and
statements that provide a summary            activities on property that is available        banks that require their insureds to
of coverage. The bill was introduced         for purchase in connection with a               insure for ‘full loan value’ without
last year (HB1071) and failed, which         standard homeowners policy. This bill is        consideration of ‘true replacement cost’.
appeared to be happening this year           certain to reappear. Your comments will         §12-124 addresses the issue, but only
as well. The Senate bill received an         be beneficial.                                  with respects to a ‘first’ mortgage or
unfavorable report from Senate Finance,                                                      deed of trust. Most of the infractions seen
but after the fact, amendments were          HB117, which would have required                by agents are with re-financing, etc.
introduced and the Senate bill passed with   insurers that write HO in Maryland to           Besides, most mortgage companies aren’t
a vote of 46-0. The House version            provide coverage for losses that result         paying one bit of attention to the law.
of the bill did receive a favorable report   from mold or mold remediation received          IIAM has prepared information to assist
with house amendments and a vote of          an ‘unfavorable report’ from the House          your insureds in filing complaints when
136-0. Fortunately, the two chambers         Economic Matters Committee.                     §12-124 has been violated. Please go to
could not agree on the amendments                                                            http://www.iiamd.org/
and the matter has been sent to a            HB158 didn’t make the grade either.             Loan%20vs.%20RC%20paper.PDF for a
conference committee consisting of           This bill was introduced at the request of      copy of that information. IIAM would also
Senators Astle, Hafer and Kelley. I IAM      the MIA. It would clarify situations where      request your assistance. We will be
has opposed this bill from the beginning     an insurer moves an insured from one            re-introducing this bill in the 2006
because of the additional responsibilities   carrier to an affiliated carrier. Problems      session. Please contact your legislators
placed on producers. I am certain that       have surfaced where carriers use this           now and let them know of the problems.
this bill had something to do with Isabel    practice to write an insured as ‘new’           Keep in mind that not one legislator on
and Homeowners not aware of the fact         instead of the ‘renewal’ it should be.          the House Economic Matters Committee
that the HO policy does not provide                                                          voted for this bill. Please send any and all
flood coverage. I was positive that HO       HB540-This bill was 23 pages long               complaints to our office. We are tracking
policies were still delivered with the       and affected several different parts of the     violations. The banking lobby informed
warning that the policy did not provide      insurance code, most dealing with notice        the legislators last year that they have no
flood. There are adequate disclaimers        provisions for cancellation and non-            reports of complaints. We will prepare
that would make it clear that the            renewal. It provided carriers with a 30         written statements for the legislators.
 summary is not part of the contract and     day ‘free look’ period for new business
that the insured should read their policy,   binders (personal automobile, homeown-          SB872- Would have authorized the
however, it also provides that the           ers and commercial property and                 Maryland Automobile Insurance Fund to
producer that sells or negotiates home-      casualty). The bill also clarified the 45 day   provide directly or indirectly for the
owners shall provide an applicant, at        notice with respects to premium                 financing of premiums charged on policies
the time of the application for              increases. It was unsuccessful this year,       issued by the Fund; and authorized the

homeowner’s insurance, a written             but I would think it would resurface            Fund to accept premiums on
statement that lists all additional/         during the 2006 session.                        an installment basis.                  2005:9

optional coverages available from the
                                                      St. Paul Travelers writes more farm and ranch business
                 AGRIBUSINESS                         through independent agents than any other carrier. As
                                                      the premier provider of agricultural insurance, we have a
                                                      broad appetite for entities that grow crops or raise live-
                                                      stock. We have the underwriting expertise to handle
                                                      large complex agricultural businesses and the automation
                                                      to be a low cost provider to small farming operations.

                                                      We have a broad appetite in the agricultural field to
                                                      include gentleman farms, equine, row croppers and a
                                                      variety of other farming operations. We offer a wide
                                                      range of coverage, including Automobile, Property,
                                                      General Liability and Excess, tailored to protect each
                                                      farming operation. Additional endorsements to meet
                       RECENTLY   WE MET WITH THE     your individual customer¤™s needs are also available.
                                                      These include enhanced pollutant, extra expense and busi-
                                                      ness income, disruption of farming operation and foreign
                       LEADERSHIP OF   ST. PAUL
                                                      objects in machinery coverage endorsements; the latter
                                                      of which is excluded in most standard farm policies.
                       TRAVELERS AGRIBUSINESS
                                                      For additional information on insuring
                       DIVISION. THEY   EXPRESSED A   your customers growing business, feel
                                                      free to contact:
                       STRONG INTEREST IN FURTHER

                                                      Tammy Matsey, Account Executive
                       DEVELOPING THEIR BUSINESS IN 804-330-6633

                       MARYLAND. ADDITIONAL
                                                      Becky Carpenter, Account Manager
                       COMMENTS FROM     ST. PAUL     804-330-6630
                       TRAVELERS, ALONG    WITH

                                                      Carl Miller, Regional Vice President
                       CONTACT INFORMATION, ARE
                       OUTLINE BELOW.

    AUGUST   2005:10
                       LOOKING FOR A
                       BOAT MARKET?
                                         NATIONAL MARINE UNDERWRITERS, INC. (NMU), IN
                                         ANNAPOLIS, MD HAS JUST WHAT YOU ARE LOOKING FOR.

                                         NMU IS A LOCAL AGENT AND MEMBER OF IIAMD. BOATS ARE
                                         ALL NMU DOES SO YOU DON’T HAVE TO WORRY ABOUT

                                         EXPOSING THE REMAINDER OF YOUR ACCOUNT. TO GET
                                         SIGNED UP SIMPLY CALL OUR TOLL FREE NUMBER                800-
                                         BOATINSURANCE (800-262-8476) AND REQUEST A BROKER
                                         KIT. THERE ARE NO MINIMUM PREMIUM OR POLICY REQUIRE-

                                         MENTS.   WE    ARE HERE TO HELP YOU COVER YOUR CUSTOMERS.

                       Boats up to 64’ in length and $400,000 in value are accepted into the primary program.
                       Coverage for larger vessels, higher valued vessels, and personal watercraft can be secured
                       through other markets by NMU. Quotes can be completed on the phone or real-time on
                       the Internet at www.nmu.com. A normal quote can be completed in as little as 5 minutes.
                       Once the initial quote is completed and accepted by the customer NMU does the rest of
                       the work. We issue the policy, bill the customer, collect the premium, service the
                       account and renew the policy. You can sit back, relax and collect your commission on
                       new and renewal policies. If a claim were to occur a sister company of NMU’s,
                       International Loss Management, would be involved in the claims process.

                       The policies are written on admitted A+ paper in all states, excluding Alaska and Hawaii.
                       The policy is an all risk agreed value policy. Liability limits up to $500,000 are available.
                       Other included coverages are: personal effects, medical payments, towing, and uninsured
                       boaters. The navigational area includes inland and coastal waters of the US and coverage
                       can be increased to allow for navigation to the Bahamas and Caribbean for qualified boats.
                       NMU can write many risks that other markets are not interested in including many high
                       performance boats. Coverage for six passenger charter vessels is also available.

                       If you have any questions or would like to sign up please call John
                       Beachley at 800-262-8467.

    AUGUST   2005:12
      IRC Study
       Auto                             MALVERN, Pa.— Auto injury claimants from four states seek different types
                                        of medical treatment, even though they report similar injuries. A new study of

     Injury                             insurance claims by the Insurance Research Council(IRC) examined auto injury
                                        claiming behavior in California, Illinois, Texas, and Washington. Comparing

   Medical                              auto injury claims from these four tort states, IRC finds that California
                                        claimants go to chiropractors most often, Illinois claimants are most likely to

Treatment                               see an emergency room physician, and Washington claimants are most likely
                                        to go to general practitioners, as well as alternative medical providers, such

 Differs by                             as massage therapists. From 1997 to 2002, per-claimant medical expenses
                                        increased the most in Texas, compared with the other three states.

      State                           The recently released IRC study, Analysis of Auto Injury Insurance Claims in Four
                       by Risa Pitman Tort States, examines detailed information from auto injury claims that closed
                                      with payment in 4 states with similar auto insurance regulations: California, Illinois,
                                      Texas, and Washington. The analysis reveals the following differences and
                                      similarities among bodily injury liability (BI) claims in these 4 states:

                                        •• In each of the four states, neck or back sprains were the most serious
                                        injury for at least seven in ten BI claimants and at least three-quarters suffered
                                        no disability from the accident.
                                        •• In California, 57 percent of BI claimants went to a chiropractor compared
                                        with 28 percent in Illinois, 43 percent in Texas, and 46 percent in Washington.
                                        •• More than half (53 percent) of California BI claimants’ medical fees came
                                        from chiropractors, compared with 26 percent in Illinois, and 44 percent in
                                        both Texas and Washington.
                                        •• From 1997 to 2002, average claimed medical expenses increased by 39
                                        percent in Texas, compared with 25 percent in California, 24 percent in
                                        Illinois, and 9 percent in Washington. Over this same time period, medical
                                        cost inflation was 22 percent, according to the CPI.
                                        (con’t on page 18)

    AUGUST   2005:13
                          INDUSTRY         LEADERS WILL EXAMINE MAJOR

                          INDUSTRY ISSUES DURING                    SEPTEMBER         EVENT

                BIG “I”   ALEXANDRIA, Va., July 26, 2005—Five top insurance industry leaders will
                          participate in a CEO panel discussion during the opening session of the
                          Independent Insurance Agents & Brokers of America’s (Big “I”) Convention
     ANNOUNCES            in New York, announces Big “I” CEO Robert A. Rusbuldt.

                          CEOs participating as panelists for the discussion are: Frederick H. Eppinger,
                          CEO, Allmerica Financial Corp.; Robert J. Joyce, chairman and CEO, Westfield
       CEO PANEL          Group; Charles M. Kavitzky, president and CEO, Fireman’s Fund; Axel P.
                          Lehmann, CEO, Zurich North America Commercial; and William J. Mullaney,
                          president, MetLife Auto & Home.
             FOR NEW
                          Thousands of independent insurance agents, brokers and other insurance
                          professionals are expected to attend the Association’s premier event, which
                          will be held Sept. 10 through 12 at the Hilton New York & Towers in
                 YORK     New York City.

                          Rusbuldt will moderate the discussion, which will tackle major issues affecting
    CONVENTION            the independent agency system and the insurance industry. Panelists are expect-
                          ed to discuss current challenges facing the insurance industry, federal and state
                          legislative and regulatory issues, market trends, technology initiatives, industry
                          diversity activities, the future of the independent agency system and more.

                          “Once again, we have an excellent panel this year, comprised of a great cross
                          section of industry leaders who are vitally important to independent agents
                          and brokers,” Rusbuldt says. “These leaders will provide an expert and insider
                          look at the future of the independent agency system and the property/casualty
                          industry as a whole. Our members are greatly looking forward to hearing
                          these movers and shakers share their insights with us in New York.”

                          The Big “I” Convention will feature nationally recognized speakers, such as
                          “America’s Mayor,” Rudy Giuliani, who revitalized New York City during his
                          tenure (1993-2001) and inspired his city—and the nation—to come together
                          and move forward in the wake of the Sept. 11, 2001, terrorist attacks.

                          The convention also features insightful continuing-education workshops, numer-
                          ous networking events and the largest trade show in the insurance industry.

                          Online registration for the Big “I” Convention is also available at the website.

                          For more information about the Big “I” Convention, contact the Convention
    AUGUST   2005:14      and Meetings Department at (800) 221-7917.
For more information about the
Big “I” Professional Liability
Program, please contact
Wanda Spargos at 410-766-0600.
quality   BIG “I”        B E L I E V E S T R E A S U RY A NA LYS I S
          R E F L E C T S N E E D F O R F E D E R A L RO L E I N
          T E R RO R I S M I N S U R A N C E
          A sso c iatio n disagr ees w it h a number o f r epo r t ’s spe cific s but w ill w o r k
          fo r feder al backst o p

          WASHINGTON, D.C., -The Independent Insurance Agents & Brokers of America
          (Big “I”) expressed both cautious optimism and concern over Administration
          comments regarding a federal backstop for terrorism insurance.

          The Terrorism Risk Insurance Act (TRIA) is set to expire Dec. 31, and Congress
          has been waiting for the results of a Treasury Department study before deciding
          whether to renew it. The Treasury analysis was released today.

          The Big “I” commends the Administration for issuing the comments on time and is
          cautiously optimistic yet concerned about the statement’s tone, in which the
          Administration laid down parameters within which renewed legislation should fall.
          “We applaud the Administration and Congress for putting TRIA in place after the
          horrific attacks of 9/11 in order to stabilize the insurance market before the worst
          effects of the availability and affordability crisis further injured our economy,” says
          Charles E. Symington Jr., Big “I” senior vice president for government affairs and
          federal relations. “President Bush and Congress were correct in supporting a fed-
          eral backstop for terrorism insurance when it was first proposed, and we look
          forward to continuing our work with policymakers as they grapple with this very
          important issue once again with expiration of the current TRIA program looming.”

          “Agents and brokers serve as valuable professional trusted advisors between
          consumers and insurers, and we believe that the Administration’s comments
          suggest that there is an appropriate federal role to ensure a workable insurance
          marketplace in the event of terrorism losses,” Symington adds. “However, some
          of the Treasury conclusions may be more wishful thinking than business reality.
          We must ensure that we have markets for our business customers.”

          With the risk of catastrophic attacks on U.S. soil still very real, and the capability
          of both insurers and reinsurers to offer comprehensive terrorism coverage for an
          uninsurable risk still very limited, the Big “I” continues to push for the extension of
          a federal backstop by Congress.

          The Big “I” has consistently supported the continuation of the current terrorism
          insurance backstop or a modified one, and it has noted in testimony before

          (co n’t o n page 17)
                                                                                          AUGUST   2005:16
                                       ( co n’t fr o m page 16)

                                       Congress that action is needed as soon as possible, since businesses and
                                       insurers are starting to make decisions that impact operations beyond
                                       the expiration of TRIA.

                                       The Big “I” also notes that the availability and affordability of terrorism
                                       insurance is a business customer problem throughout the nation. In fact,
                                       take-up rates under TRIA have continued to grow across the country,
                                       and IIABA members have seen terrorism coverage purchased by a
                                       variety of interests, from small towns in Mississippi to small and large
                                       businesses in New York City. IIABA does not want its business
                                       customers to be in a position of having insurers exclude terrorism

                                       coverage, or having insurers stop writing certain commercial coverages
    T H E B I G ‘ I’ A N D
                                       altogether in some states that do not allow exclusions for terrorism
    OUR    300,000
                                       coverage. IIABA’s focus is on its customers, and it knows that many of
    I N S U R A N C E AG E N T S
                                       its business customers need this coverage.
    A N D B RO K E R S H O P E
    T H AT P O L I C Y M A K E R S
    W I L L D R AW O N T H E           “The Big ‘I’ and our 300,000 insurance agents and brokers hope that
    EXPERIENCES OF THE                 policymakers will draw on the experiences of the current program in
    C U R R E N T P RO G R A M         crafting a mechanism that will better serve consumers and protect our
    IN CRAFTING A                      economic security, and we urge members of Congress to move forward
    M E C H A N I S M T H AT           now and pass legislation to ensure a federal backstop for acts of
    W I L L B E T T E R S E RV E       terrorism,” says Brendan Reilly, Big “I” director of federal government
    CONSUMERS AND                      affairs. The Big “I” acknowledges the thorough work of the Treasury
    P ROT E C T O U R
                                       Department in issuing its study.
    E C O N O M I C S E C U R I T Y,
    A N D W E U RG E
                                       “While we disagree with a number of the conclusions in the report, we
                                       believe the Treasury Department’s analysis indicates that there is a role
    C O N G R E S S TO M OV E
    F O RWA R D N OW A N D             for the federal government to play in the terrorism insurance market-
    PA S S L E G I S L AT I O N TO     place to ensure the availability of adequate levels of insurance to allow
    ENSURE A FEDERAL                   businesses across America to continue operating and growing, and
    BAC K S TO P F O R AC T S          preserving jobs in the process. We agree that TRIA has been effective
    O F T E R RO R I S M .             in stabilizing the insurance marketplace following 9-11 and urge the
                                       Administration and Congress to extend a federal backstop promptly as
                                       the marketplace has not fully recovered,” Symington says.

                                                                                                            AUGUST   2005:17
                                      (con’t from page 13)
                                      Similar patterns emerged in first-party medical
                                      payments (MP) claims in California and Illinois, along
                                      with personal injury protection (PIP) claims in Texas
                                      and Washington.

                                      In all four states, average BI payments exceeded claimed
                                      economic losses, reflecting auto insurance
                                      payments for general damages, sometimes referred
                                      to as pain and suffering. In 2002, claimed economic
                                      losses, mainly consisting of medical expenses, were high-
                                      est in Illinois and California BI claims,
                                      averaging $5,506 and $5,409 respectively. The
                                      corresponding average insurance payments to BI
                                      claimants were $7,850 in Illinois and $7,830 in


                                      California. In comparison with these two states, Texas
                             TEXAS    claimants averaged lower reported economic losses
                                      ($4,483) and BI payments ($5,768). Washington BI
                           IILINOIS   claimants’ economic losses averaged $3,833, the
                                      lowest of the four states. However, average BI
                        CALIFORNIA    payments were $7,594 in Washington, near the levels in
                                      Illinois and California. “Auto insurance claimants often
                       WASHINGTON     seek different types of medical treatment for the same
                                      types of injuries, and this apparently varies by the state
                                      in which the accident occurs,” explained Elizabeth A.
                                      Sprinkel, senior vice president of the IRC. “Regardless
                                      of treatment type, however, insurers’ BI payments
                                      exceeded claimed expenses on average in each of these
                                      four states.”

                                      For more detailed information on the study’s
                                      methodology and findings, contact Elizabeth Sprinkel by
                                      phone at (610) 644-2212, ext. 7568; by fax at (610)
                                      640-5388; or by e-mail at irc@cpcuiia.org. Or visit
                                      IRC’s Web site at www.ircweb.org. Copies of the study
                                      are available at $100 each in the U.S. ($115
                                      elsewhere) postpaid from the Insurance Research
                                      Council, 718 Providence Rd., Malvern, Pa. 19355-0725.

                                      Phone: (610) 644-2212, ext. 7569.
    AUGUST   2005:18                  Fax: (610) 640-5388.
            Education Corner
August 10                                        September 20
Miscellaneous Commercial Lines                   Market Conduct & Maryland Law
9:00 a.m.- 4:00 p.m.                             9:00 a.m.-12:00 p.m.
Susan Reese                                      Shelley Arnold
6 hrs. c.e.                                      3 hrs. c.e.

August 17Commercial General Liability            September 21
9:00 a.m.- 4:00 p.m.                             Personal Automobile
Trish Hanneman                                   9:00 a.m.-4:00 p.m.
6 hrs. c.e.                                      Joe Conroy
                                                 6 hrs. c.e.
August 30
Best Practices Errors & Omissions Loss Control   September 26-30
9:00 a.m.- 4:00 p.m.                             Pre-Licensing
Stanley Lipshultz                                Registration Deadline:
6 hrs. c.e.                                      9-5-05
                                                 8:30 a.m. - 4:30 p.m.
September 7-8                                    Joe Conroy
P/C Cram Course**                                00 hrs. c.e.

8:30 a.m .- 4:30 p.m.

Joe Conroy                                                                           AUGUST   2005:19
0 hrs. c.e.**
                                               T i d bits
                                        Since the Gramm-Leach-Bliley Act           Tom Walden, community bank
NEW D&O/COMPANY                         of 1999, community banks have              specialist, Insurance Alliance in
                                        ventured into activities well beyond       Houston, Texas. "Non-erosion of
                                        the traditional banking arena. John        their limit of liability is key."
                                        Wells, director of Progressive's
Changing Banking Environment
                                        Professional Liability Group said:         "I'm in constant discussions with
Leads To Increased Need for
                                        "Bankers are concerned about not           bankers regarding new subsidiaries
Insurance Flexibility
                                        only depositor and lender liability, but   and services they are offering," said
                                        are looking for broad coverage for all     Walden. "The new Progressive
                                        their professional services. They also     product provides me the flexibility to
response to the increasing complexity
                                        now understand that a significant          select coverages currently needed for
of community banking, Progressive
                                        number of lawsuits are coming from         these services, while providing broad
Casualty Insurance Company
                                        third parties, which are not typically     coverage for new services that may
(Progressive), underwriter for the
                                        covered under the policies in the          be contemplated in the future. And at
ABA-sponsored insurance program,
                                        market today."                             the end of the day, I can reassure the
has released a new D&O/Company
                                                                                   bankers that their personal coverage
Liability Policy for Financial
                                        The policy continues to provide a          is not compromised."
Institutions. The new policy allows
                                        special "non-erosion" feature that
bankers to protect the directors,
                                        ensures that limits are available to       The policy has been approved in
officers and the bank itself against
                                        protect directors' and officers' per-      most states, and is available through
exposures arising from the many
                                        sonal liability, even if claims are paid   independent agents. For more
services they now provide, under
                                        for suits against the bank itself. "As     information, contact Judi Kovach at
either a broad-form contract or on
                                        coverage for the bank itself is expand-    (800)274-5222, or visit
an individual named peril basis.
                                        ed, bankers want to know that their        www.banks.progressive.com.
                                        own personal liability is covered," said

Beginning July 16th, DC police officers will be handing out $300.00 tickets to those unable to show proof of insurance.
Motorists in DC must be able to show proof of automobile insurance following an accident, during a routine traffic
stop and even at 'checkpoints'. Make sure your insured has their automobile card and that they carry it at all times.

                                                                                                               AUGUST   2005:20
                      member Benefit

The summer months are full of all kinds of special events, and that means a marketing
opportunity for you. The litigious nature of our society has made it increasingly necessary for
organizations of all kinds to require and need insurance to provide protection during their
special events, hence the need for event liability insurance. While weddings and receptions are
a common source of event liability sales, the following are events largely associated with the
summer months that you may not realize present an opportunity for you to insure:

Sidewalk sales; craft shows, antique shows, concerts, picnics, livestock shows, and street fairs.
For a comprehensive list of events that you can insure on Big "I" Markets, visit

So seek out event sponsors and let them know that they need to insure their events, and that
you can do it for them. Then cross sell the sponsors for their auto, home, life, etc.! Now that
would be special.

B I G “ I ” P E R S O N AL U M B R E L LA R AT E D A + !

On June 28th, 2005, RLI Group, RLI Insurance Company
and RLI Indemnity all received "Superior" ratings from
A.M. Best and their Best Ratings service. Those of you
writing RLI personal umbrella (PUP) and in-home
business through the Big "I" endorsed relationship with
RLI should take note of this affirmation of their claims
paying ability. PUPs are perhaps one of the most important
policies you sell to have a strong financial resume from the
covering insurer. For more information you can go to our
website at www.iiamd.org and to Insurance Programs,
where you will find an RLI PUP application and rate sheet,
as well as a BOP application, which can be rated on-line.
So hurry up and make sure all of your clients have an
umbrella, lest something go wrong at one of their summer
special events and they find themselves being sued.

                                                                                             AUGUST   2005:21
                                                Big “I” HAILS
                                                House passage
                                                of ‘Health Act’

          WASHINGTON, D.C., - ”The Independent Insurance Agents & Brokers of America (the Big “I”)
          hailed the House of Representatives passage of a medical liability reform bill as a great step forward
          in legal reform.

          H.R. 5, the Help Efficient, Accessible, Low-Cost Timely Healthcare (HEALTH) Act, sponsored by
          Rep. Phil Gingrey (R-Ga.), includes a number of provisions that will reduce the excessive liability
          burden on physicians and, in the process, increase consumer access to quality medical care. Leading
          provisions include:

         · Three-year statute of limitations

         · $250,000 limit on noneconomic damages

         · Allowance for courts to restrict payment of attorney fees

         · Limitations on punitive damages to “malicious intent” or “failure to avoid
           unnecessary injury”

         · Limitations on liability for manufacturers, distributors, suppliers and
           providers of medical products that comply with Food and Drug
           Administration (FDA) standards.

         (co n’t o n page 23)

                                                                                                  AUGUST   2005:22
IIAJC Maryland Qualifier                                                                                      Joe Rice, Chris
                                                                                                              O'Neil and Klley
                                                                                                              Manders. Joe is the
The IIAJC Maryland qualifier was held on July 7, 2005.                                                        son of Joe Rice of
This year's male qualifier, out of a field of 18, and                                                         J.E. Rice Insurance in
our represenatative at the National Tournament is
Mark Hammond, a 17 year old from Ijamsville,
Maryland. The female qualifier is Jessica Unger, a 17
year old from Bethesda. Jessica played in the Virginia
tournament. We congratulate both golfers and wish                Mark Hammond, male
                                                                   qualifier with Steve
them luck at the Nationals. We would also like to
                                                                    Earll, Chairman of
express our sincere thanks to Steve Earll, Chairman,                    Maryland's IIAJC.
for his continued efforts to make this a wonderful
tournament for our youth.

 (co n’t fro m page 22)

 “We are very pleased this bill has passed the House of

 Representatives,” says Charles E. Symington Jr., Big “I” senior
 vice president of government affairs and federal relations. “It
 puts into place common-sense legal standards that will reduce
 the financial burden on physicians. This ultimately will be good
 for consumers, who have been hit with rapidly rising costs for
                                                                                            LAURIE HARE
 quality medical care. The out-of-control medical liability system                          GRAPHIC DESIGN
 has been a major component in these rising costs.”
                                                                                            Please call Laurie
                                                                                            at !!"#!$%#!$&&
 “With the possibility of being sued at the drop of a hat, not only                         or email me at
 have medical costs skyrocketed, but many doctors have retired                              lauriehare'()!@
                                                                                            yahoo#com to
 or gone out of business because they can’t afford their premi-
                                                                                            discuss your ideas
 ums,” says Brendan Reilly, Big “I” director of federal government                          for BROCHURES*
                                                                                            ADS* DIRECT
 affairs. “This has been particularly true in specialized fields like
                                                                                            MAILERS* LOGOS*
 obstetrics, to the degree that in many parts of this country, it                           INVITATIONS* ETC!
 has become excessively difficult for patients to find doctors for
 certain medical needs. H.R. 5 is a pro-patient bill that will reduce
 costs and help good doctors remain in business, and we urge the

 Senate to pass it as well.”
                                                                                                                       AUGUST   2005:23

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