primary agent - december 2010 - de edition

ALSO INTHISISSUE:________________

Company Satisfaction Indexresults

Executive ManagementConference recap

DELAWARE

G17427_Covers.qxp:Dec2010Primary 11/17/10 1:37 PM

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17427_IFC-IBC-OBC.qxp:Layout 1 11/17/10 1:43 PM Page 1

www.emcinsurance.com

© Copyright Employers Mutual Casualty Company 2009 All rights reserved

MAKE EMC YOUR CHOICE FOR MAIN STREET BUSINESSWhen you think main street business, start thinking about the EMC Choice® Businessowners Program. Small and midsize businesses will enjoy the flexible coverage options designed to meet their specific insurance needs, the added value of free loss control services, plus the responsive service from an EMC branch office nearby. So if you still think EMC is just for niche programs, think again. Count on EMC ® for your main street commercial lines marketing, too. For more details, contact your local EMC branch office.

I used to think EMC was ju st for niche commercial programs. Then again, I used to think that chocolate milk came from brown cows.

Valley Forge Service Office: 800.362.3620 | Home Office: Des Moines, IA

G17427_1-11.qxp:December2010 11/17/10 2:24 PM Page 1

Member Agent Panels: Building blocks of successTwice a year they gather. They catch up over breakfast or lunch, and then theyget down to business – talking industry issues and trends, sharing strugglesand accomplishments, and driving their association forward. Welcome toIA&B’s Member Agent Panels.

Page 12

Straight talk: Members rate their carrier experiencesEvery two years IA&B members receive a fresh perspective on carrierperformance. The association’s biennial Company Satisfaction Index (CSI)allows them to rate – and then review and compare – their carrier experiences.

Page 22

Technology tips help agency owners run tighter shipsWelcome to the information age, where advancements occur at a more rapidpace – and have a greater influence on daily existence – than ever before.Members spoke, and IA&B responded to their uncertainties, frustrations andlearning curves with the October 2010 Executive Management Conference,dedicated to technology.

Page 24

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22

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ContentsP R I M A R Y A G E N T M A G A Z I N E

Copyright 2010. All rights reserved. No material may be reproduced in whole or in part without written consent of the publisher. The information in this publication is general in nature and is not intended to serve as legal, accounting, financial,insurance, investment advisory or other professional advice as to any reader’s particular situation. Users are encouraged to consult withcompetent legal, financial, insurance, investment advisory and or other professional advisors concerning specific matters before makingany decisions and we disclaim any responsibility for any decisions or actions by readers. Statements of fact and opinion in PrimaryAgent are the responsibility of the authors alone and do not imply an opinion on the part of the officers or the members of the IA&B.Participation in IA&B events, activities and/or publications is available on a non-discriminatory basis and does not reflect IA&Bendorsement of the products and/or services.

Subscriptions: Non-member price: $2.25 per copy or $15 per year.

All communications for publications, including news, features, advertising copy, cuts, etc., must reach the editor by 1st of month two monthsprior to publication. Advertising rates furnished upon request.

Address inquiries to:Primary Agent EditorPO Box 2023Mechanicsburg, PA 17055-0763Phone (800) 998-9644 or (717) 795-9100 Fax (717) 795-8347

Periodical postage paid at Mechanicsburg, Pa. and additional entry post office.

Postmaster: Send address changes to above address.Primary Agent (ISSN 1543-3110), Permit # 638-620, Issue # 2010-12) is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

4 Chair of the Board’s Message5 Member FAQ6 State News8 Preventing Errors & Omissions9 Glance at Events

10 Coverage Corner21 IA&B Partners28 Advertisers Index28 Classified Ads28 Last & Least

In every issue

Mission StatementPrimary Agent delivers ideas to helpInsurance Agents & Brokers’ membersnegotiate their unique position asguardians of trust between insuranceconsumers and companies whilefacing the challenges of maintaining a small business. Primary Agent also supports IA&B’s mission topreserve and advocate the AmericanAgency System.

That’s

w

With our “A” Rated Treasury Listed bonds wec Why shopa If we can’t writet We specialize in bonding those “less than p

We’ve beenw N And by the way, we’ll even write thatb Call now and get results not excuses.


“No bond, no job. No job,no commission.”

We know times in the construction business are tough andthat even the best of clientsare having problems. That’swhy when your client needs abond Commonwealth Surety should bethe first call you make. With our “A” Rated Treasury Listed bonds wecan provide the bond you never thought you could get. Why shoparound, get buried with paperwork and hear excuses? If we can’t writethe bond nobody can! We specialize in bonding those “less than perfect” clients, without cash collateral or Letters of Credit, and we’ll getyou that “YES” that you want to hear in 24 hours or less. We’ve beenwriting bonds for small and midsized companies for over 20 years. No bond is too big or too small. And by the way, we’ll even write thatbond for your perfect clients. Call now and get results not excuses.TOLL FREE: 1-800-886-7760FAX TOLL FREE: 1-800-566-7761

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OfficersDavid Rosenkilde, CIC

Chair of the BoardReisterstown, Md.

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-PVice Chair of the BoardWest Chester, Pa.

Kathleen M. Glattly, ChFC, CLU, CPCUImmediate Past Chair of the BoardFactoryville, Pa.

MembersJoyce M. Bailey, CIC, CRM, CPIW

Newark, Del.

Norman F. Basso, CPCUYork, Pa.

Vincent D. “Chip” Boylan Jr., CPCURockville, Md.

Henry “Butch” Bradley, Jr.Crofton, Md.

Timothy P. BurrisThompsontown, Pa.

John T. “Chip” Colwell Jr., CICCorry, Pa.

N. Lee Dotson, CIC, AAIWilmington, Del.

John L. FrankenfieldTelford, Pa.

G. Greg Gunn, CICLemoyne, Pa.

Diana M. Hornung-Momot, ACSRWilmington, Del.

Jocelyn R. Howard-Sinopoli, CIC, CISRButler, Pa.

Robert S. Klinger, LUTCFGermantown, Md.

Michael F. McGroarty Sr.Pittsburgh, Pa.

Ann Gallen Moll, CICReading, Pa.

Scott C. Rogers, CPIAYork, Pa.

Susan A. Sallada, CIC**Ft. Washington, Pa.

David B. Wasson Sr., CICState College, Pa.

James M. Watkins*Dover, Del.

King W. “Kip” White, LUTCFFallston, Md.

* IIABA National Director** PIA National Director

Board of Directors

How slowing down can move you ahead

‘Tis the season … to run, run, run from one obligation to the next.To make your list of to-dos, check it twice and then run somemore. And then there’s the office, as hectic as ever with Januaryrenewals around the corner.

I encourage you to stop. For a few moments, put down theBlackBerry, the laptop, the stack of expense reports. Instead, pick up mug of coffee and put up your feet. Reflect on the year,where you and your agency have succeeded and where you aim to improve.

IA&B does the same thing — throughout the year. Yourassociation’s Member Agent Panels (MAPs) meet across the tri-state area twice a year to discuss industry trends and memberconcerns, evaluate IA&B’s initiatives and pinpoint where and how IA&B can do more.

This issue of Primary Agent includes a feature article on MAPs and what your association has accomplished thanks to MAPparticipants’ insight and feedback. Give it a read, and then consider how you could contribute. IA&B is recruiting for the 2011-2012 MAP cycle.

Enjoy the holiday season and best of luck to you in the new year.

See you in 2011,

Dave

[ 4 ]

David B. Rosenkilde Sr., CIC

Chair of the Board’sM E S S A G E


?QUESTION: A producer in myagency is asking if he might lose hislicense if he files for bankruptcy. Isthat the case?

ANSWER: Sadly, this question is onthe rise. Each regulator can handle thissituation slightly differently based on thestate statute and its interpretation of thestatute. In this case, our three states are fairly consistent. Here is howDelaware, Maryland and Pennsylvaniacurrently handle producers’ personal bankruptcies.

In addition, we must mention a couple ofother situations, namely state income taxand child-support issues, which can, insome cases, be part of a personalbankruptcy and interfere with a license renewal.DelawareBusiness bankruptcies or personalbankruptcies involving funds held onbehalf of others must be reported to theDelaware Department of Insurance(DOI). If it is a personal bankruptcy thatdoes not involve funds held on behalf of others, the DOI does not need to be notified.

On the other hand, failing to comply withan administrative or court orderimposing a child-support obligation, orfailing to pay state income tax or complywith any administrative or court orderdirecting payment of state income tax,can cause serious problems. They are, bystatute, acceptable reasons for denying alicense. Such issues should be addressedupfront with the bankruptcy attorney andthe DOI. Losing a producer’s license afterfiling for bankruptcy would bedevastating and counterproductive for allparties involved by depriving theproducer of his ability to earn a living.MarylandIf it is a personal bankruptcy only, theMaryland Insurance Administration (MIA)does not require notification. Notifyingthe MIA is only necessary for businessbankruptcies.

The failure to pay state income tax or a child-support obligation would,however, trigger the Maryland producerlicensing statute and could jeopardize alicense renewal.

Any producer contemplating anindividual bankruptcy should voice theseissues with the bankruptcy attorneyand/or discuss it upfront with the MIA inorder to prevent any fallout. PennsylvaniaIf it is a personal bankruptcy only, theInsurance Department states that thereshouldn’t be any problem with thelicense renewal. However, as in Delaware and Maryland, if the individualhas failed to pay state income tax or isbehind in child-support payments, there could be some ramifications: The producer licensing statute containssimilar provisions as the other two states.

As an example, if the Department ofRevenue indicates that the producer isnon-compliant with state taxes, then the Insurance Department likely will take action unless the producer hasentered into an agreement with theDepartment of Revenue to come into andmaintain compliance.

As a result, it is best to err on the side ofcaution and pay close attention to anyincome tax debt – as well as any child-support obligation – with the bankruptcyattorney before proceeding. As in theother states, contacting the InsuranceDepartment ahead of time could behelpful as well.

DO YOU HAVE A QUESTION? E-mail it to us at [email protected] use “Primary Agent FAQ” in thesubject line of your message. You canalso fax your question to (717) 795-8347.We look forward to answering your questions!

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Primary Agent | December 2010

State NewsHow to play by the N.Y. State Fund rulesThanks to changes in New York’sWorkers’ Compensation (WC) Law, thenumber of Delaware businesses usingthe New York State Insurance Fund(NYSIF) to fulfill their WC obligations ison the rise.

Advise these clients about the NYSIFcancellation/non-renewal procedure. Or face the consequences: cancellationfor non-payment, drastic short rates and more.

By law, the NYSIF requires 30 days’advance notice to non-renew a policy ...that is, for the client to notify the carrier.Miss the deadline? Save the sob story:The NYSIF displays little flexibility forproducers and clients who don't abide.

Members are encouraged to:

w Familiarize themselves with thesespecial procedures

w Flag all policies placed with NYSIF

w Confirm in writing any possibledeviation from these practicesdiscussed with NYSIF

Read additional recommendations:www.iabgroup.com/de/wc/nysif

Multi-statelicensees, bewareThe taxman cometh – even if you hold anon-resident license. Most states requireout-of-state producers to register withtheir department of state before applyingfor a non-resident license. And thatregistration can obligate the producer toannual filings and taxes.

Reporting requirements and tax filingsvary from one state to the next. Soagencies that are licensed, and thereforeregistered, in multiple states mustmonitor and abide by each state’sspecific obligations.

DAIAB members have reported issueswith Ohio and, more recently, New York.The link below profiles one member’sexperience and DAIAB's recommendedresponse.

Review a sample issue andrecommendation:www.iabgroup.com/de/corp_franchise_tax

[ 6 ]

New MembersW E L C O M E

Affordable Property Insurance Inc. Newark, Del.

Check outDAIAB’s

2009-2010annualreport —video style!

G17427_6_7_DE.qxp:Dec2010 11/17/10 1:42 PM Page 2

Red Flags RuleenforcementnearsThe FTC’s impending Red Flags Ruleenforcement could mean costlypenalties for non-complying“creditors.” The broad definitionincludes some insurance agencies,along with lawyers, accountants andhealth care professionals.

As this issue of Primary Agent went toprint, the outcomes of several law suitsand a bill pending in Congress aimingto exempt certain professions andsmall creditors were uncertain.

Enforcement is set to begin Dec. 31,2010, so now is the time to determineif your agency is affected. Most will not be; however, some may qualifybased on their circumstances and/orbusiness decisions.

Access DAIAB's Red Flags Ruleresource: www.iabgroup.com/de/red_flags

Reminder: Even if the Red Flags Ruledoesn’t apply to your agency, otherapplicable privacy regulations covermany of the same elements.

Access DAIAB’s privacy review:www.iabgroup.com/de/privacy

What the new yearcould bring for allwho write in New YorkWrite in the Empire State? Then adopt aNew York state of mind and preparenow for impending commission-disclosure requirements. Resident andnon-resident licensees are affected by anew producer-compensation regulation,slated to take effect Jan. 1, 2011.

As this issue of Primary Agent went toprint, the judge had yet to hand downa decision in producer groups’ legalchallenge to the regulation. The lawsuitquestioned the New York StateInsurance Department’s authority topromulgate such a rule and the factssupporting its position to do so.

With the judge’s decision uncertain,affected producers are encouraged tolearn more about the regulation.

Access resources:www.iabgroup.com/de/ny_disclosure

DCRB PipelineTips and tidbits, directfrom DCRBDelaware allows up to eight officers of a corporation and up to fourmembers of a Limited LiabilityCompany (LLC) to be excluded.

The agreement for ExecutiveOfficer/LLC member exclusion form is available on the DelawareCompensation Rating Bureau’s(DCRB’s) website, www.dcrb.com,under “Forms.” When there is noinsurance carrier, exclusion forms forconstruction corporations/LLC’ ssubject to Title 30, Chapter 25 of theDelaware Code should be submitted to the DCRB for posting.

Read, follow or jointhe discussionThe time to dismiss social networkingas a passing fad has come and gone.The fact is, the longer you put offjoining the conversation, the moreyou’re missing. DAIAB is facilitatingprofessional and informativeexchanges on the social Web.

Discuss trendsand networkwith colleaguesby joiningDAIAB’s LinkedIn group.

Read timelyupdates on yourassociation’sactivities and breaking industry newsby following DAIAB on Twitter.

New to Web 2.0? There’s no betterway to learn how social networkingworks — and how it can work for youragency — than seeing how it’s done.

Jump onboard:www.iabgroup.com/soc_media

[ 7 ]

Save the date forbreakfast, CE withJerry MiltonDAIAB welcomescoverage guru,Jerry Milton, onWednesday, Jan.19. He will teachthe seminarCertificates ofInsurance,Contractual Liability and Additional Insureds.

Watch your e-mail for additionalinformation.

G17427_6_7_DE.qxp:Dec2010 11/17/10 1:42 PM Page 3

PreventingE R R O R S A N D O M I S S I O N S

[ 8 ]

PAUL E. WALTERS

Paul E. Walters is claims

manager for Utica Mutual

Insurance Company.

Insurance Agents & Brokers

Service Group Inc. is the

exclusive agent for the Utica

E&O program in Delaware,

Maryland and Pennsylvania. For

questions regarding this article

or your Errors & Omissions

coverage, contact IA&B at

(800) 998-9644 or by e-mail at

[email protected].

NAVIGATING THE MINEFIELD OF LIABILITYCOVERAGE FOR CONTRACTORS


Today’s construction industryis in a crisis mode in manyareas of the country. Extreme financial pressuresare being brought to bear oncontractors. Money hastightened up. Cutthroatbidding exists. Contractors are finding their profitmargins dwindling.

Expenses related to Workers’Compensation and GeneralLiability coverages are puttingfurther pressure oncontractors’ finances. The costof General Liability coveragefor contractors is increasing asa result of greater costs todefend and indemnifycontractors.

Whether it’s suits brought byworkers or suits claimingdamage due to faultyconstruction, carriers’ costsare on the rise. Theseincreases are forcing carriersto up premiums, decrease thecoverage offered or opt of outof that line altogether.

Agents caught in themiddleAs carriers get out of this lineof business, other carriers —many in the surplus linesmarket — are filling the void.Contactors want to keeppremiums down, and manywill choose the least-expensive solution. Agents arecaught in the middle.

If an agent quotes a standardCGL without restrictivelanguage, there is a goodchance the premium will notbe attractive to the contractor.Conversely, if an agent quotesa premium for GL coveragethe contractor findsacceptable, chances are thecoverage offered is restrictivecompared to the standardGCL. The first scenario is notan E&O concern, but thesecond is likely to become aproblem if a loss occurs.

It is common these days tosee contractors’ CGL policiesthat either do not grant

contractual liability coverageor severely limit the types ofcontractual indemnityscenarios that are covered.

It is also common for carriersto add an endorsement thatexcludes coverage when theclaim is made by a worker onthe jobsite. In fact, manypolicies offered today haveboth of the above coveragerestrictions, making coveragefor the types of claims acontractor will be faced withalmost non-existent.

Agent pays $235,000In one claim example, anagent replaced one policywith another for a contractor.The old policy was a standardCGL. The new policy severelylimited coverage forcontractual indemnity and didnot apply to hold-harmlessclauses seen in a standardconstruction contract. Anemployee of the contractorwas electrocuted on the joband sued the jobsite owner. In


Date Topic Location

1 CISR—Personal Residential Course Altoona, Pa.

1-4 CIC—Life & Health Institute Hunt Valley, Md.

2 CISR—Personal Residential Course Hagerstown, Md.

7-9 P&C Licensing Study Course Mechanicsburg, Pa.

L&H Licensing Study Course Pittsburgh, Pa.

Glance at EventsD E C E M B E R C A L E N D A R

[ 9 ] [ 9 ]

turn, the owner sued the contractor,alleging contractual indemnity andclaiming it should be held harmlessby the contractor.

The new carrier disclaimed based onthe restrictive language regardingcontractual indemnity in the policy.The agent was then sued by thecontractor, who stated he expectedthe new policy to provide the samecoverage as the policy it replaced. The agent did not notice the changesbetween policies when coverage wasprocured. The agent’s share of thesettlement? $235,000.

No documentationIn another example, an agency had a general contractor client who spokelittle English. The agency procured a CGL policy that contained anendorsement excluding claims made by any employee of anysub-contractor. A sub-contractor’semployee fell from a ladder andmade a claim against the agency’s

client. The carrier denied coveragebased on the exclusionary language inthe endorsement. The agent stated hediscussed the exclusionary languagewith the client and offered to secure aCGL without the exclusionarylanguage at twice the premium. Perthe agent, the client refused andchose the less expensive policy.

Following the disclaimer by thecarrier, the client made a claimagainst the agent, stating he was nottold about the exclusion and was notoffered an option to purchase a policywithout the exclusion. With nodocumentation in the agency’srecords concerning the agent’sdiscussion with the client, the claimwas settled — with the agent’s sharetotaling $84,000.

Put it in writingAgents must familiarize themselveswith the differences in coverage thatcarriers are offering to contractors.When a policy is quoted, the agent

should specifically ask whether thereare restrictions in coverage comparedto the standard CGL. If there are, theagent should fully explain thosedifferences to the client, and then givethe client the option to purchase apolicy without restrictive language.

All communications concerning thisprocess should be done in writing,clearly spelling out what wasdiscussed, what was offered and whatwas agreed upon. A little bit of extradocumentation on the front end canprotect an agency from claims madeby contractors at a later date.


CoverageC O R N E R

[ 10 ]

JERRY MILTON, CIC

Jerry M. Milton teaches

and consults on industry

issues. The legal profession

recognizes him as an

expert on insurance

coverages. He is also the

education consultant for

IA&B, working with CISR,

CIC and continuing

education programs.

CERTIFICATES OF INSURANCE — THE LAWSUITS CONTINUE


I’m fairly certain that at onetime or another I’ve discussedcertificates of insurance in thiscolumn. But, even if I have, itwon’t hurt to talk about themagain. There are severalreasons.

w They are one of the mostdangerous documentsthat float aroundbetween insureds and allkinds of other parties.

w Certificate holders don’treally understand whatthey are; they think it’s awarranty or a guarantee.

w They are a constantconcern to the insuranceagencies and insurersthat issue them … atleast that’s what I’mhearing from y’all.

w They are an increasingsource of lawsuits againstagents and insurers:Lawsuits involvingcertificates of insuranceare growing at the rate of25-30 percent per year.

Question number one is, “Whydo we issue certificates ofinsurance?” The answer

usually is, “My insured signeda contract which required thecertificate.” My question is, “A certificate of what?” Acertificate indicating theinsured has certain policies ofinsurance, or a certificateindicating the insured’spolicies will satisfy thecontractual requirements?

The first thing we need to do isunderstand exactly what acertificate of insurance is.

Black’s Law Dictionary definesa certificate of insurance as:“Document evidencing factthat an insurance policy hasbeen written and includes astatement of the coverage ofthe policy in general terms.”

Please note the “a statementof the coverage of the policy ingeneral terms” in the abovedefinition. Some folks say thata certificate of insurance is asnapshot of the policycoverages and limits at thetime of issuance of thecertificate. I disagree! Forexample, have you ever issueda certificate of insurance andshowed the insured had CGLaggregate limits of $2,000,000,

when that aggregate limit mayhave been reduced by priorclaims?

We all know that thecertificates of insurancecontain disclaimers saying thatthey do not “amend, extend oralter” the underlying policy.Does that mean that thecertificate cannot trump thepolicy terms? I would think so.

In two recent court cases, thecourts have used languagethat was added on thecertificate to find coverage forthe certificate holder.

In Charter Oak Fire InsuranceC. v. Lexington Insurance Co.(TN), a fire destroyed a Chili’srestaurant in Nashville, Tenn.The building owner wasnamed as an additionalinsured on Chili’s propertyinsurance policy and was paidfor the fire loss. The buildingowner submitted an additionalclaim for loss of rental income,but Chili’s insurer denied the claim.

The building owner’s insurerpaid the rental income lossand then filed a subrogationaction against Chili’s insurer


[ 11 ]

for recovery. The building owner’sinsurer’s theory was that since thebuilding owner was an additionalinsured under Chili’s policy, he wasentitled to rental income coverage.

Chili’s insurer argued that the certificateof insurance limited coverage becauseit contained wording that the buildingowner was added for physical damageonly, and not rental income. The courtdisagreed since the certificatecontained disclaimers saying that itdoes not “amend, extend or alter thecoverage afforded by the policy.” Thecourt determined the certificate has noeffect on the coverage afforded by thepolicy and determined that the buildingowner’s additional insured status wasnot limited in any way. Therefore, thecertificate could not be used to restrictthe building owner’s coverage.

In another case, J.A. Jones ConstructionCo. v. Hartford Fire Insurance Co. (IL),the court determined that thesubcontractor’s CGL policy providedcoverage for the general contractor’ssole negligence. The subcontractor’sinsurer argued that the certificatecontained a statement that the generalcontractor was an additional insured“to the extent of the subcontractor’snegligence.” The court disagreedbecause of the disclaimer languagewhich states the certificate does not“amend, extend or alter the coverageafforded by the policy.” Since the CGLpolicy did not restrict the generalcontractor’s liability, the certificatecould not be used to deny coverage.

Sounds like to me that you can say allyou want to on a certificate ofinsurance, but it doesn’t make anydifference. What does the policy say?That’s the ultimate answer.

Issuing certificates of insurance is likelaying land mines. Be careful. Don’tstep on one!

Y’all take care!

STRONG RELATIONSHIPSPRODUCE RESULTS

Celebrating 166 years of service � 1844 - 2010

There is no better time tobecome part of The CumberlandInsurance Group Team. We arenow appointing agents in CentralPennsylvania.

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ASSOCIATION AT WORK

Twice a year they gather.They catch up overbreakfast or lunch, andthen they get down tobusiness – talking industryissues and trends, sharingstruggles andaccomplishments, anddriving their associationforward.

Welcome to IA&B’sMember Agent Panels.

Building blocks of successReaching new heights thanks to Member Agent Panels


[ 13 ]


Member Agent Panels, best known by theiracronym MAPs, meet in 13 locations across thetri-state region. IA&B members — most oftenagency principals and producers — serve

two-year terms, during which they weigh in and providedirection on the association’s activities.

Since the inaugural meetings in 2003, MAP participants havehad a significant impact on IA&B’s initiatives. (Note: WhileDelaware MAPs began in 2009, attendees already haveprovided great input — particularly in directing the stateassociation’s public affairs committee.) The following pageshighlight 10 of the many association accomplishments thatstemmed from MAPs. As you’ll notice, even those initiativesthat began in one state often benefited IA&B membersacross the tri-state region.

Read on to (re)discover member resources, familiarizeyourself with how your association works for you and learnhow MAPs operate.

InsolvencyThe year was 2003. On the heels of the White Hall Mutualliquidation, Pennsylvania MAP participants vented aboutmonitoring their carriers’ solvency. They felt unprepared and unwarned.

IA&B responded with an extensive Q&A resource, coveringeverything from how to handle notices and commissions torefunds and deadlines.

When the next big insolvency drama occurred withVesta/Shelby, members were prepared — and appreciative.

www.iabgroup.com/pa/insolvency

Thanks to a struggling economy and lingering soft market,the issue reared its ugly head again in 2010. Rating servicesdowngraded carriers, and MAP attendees questioned when,if and how to notify their clients.

IA&B responded with two sample client-notification lettersalong with instructions for keeping E&O carriers, and clients, happy.

Del.: www.iabgroup.com/de/ratings#considerations

Md.: www.iabgroup.com/md/ratings#considerations

Pa.: www.iabgroup.com/pa/ratings#considerations

De facto terminationIA&B of Pennsylvania MAP attendees first expressed concernabout commission cuts and their downward-spiral effect onagency contracts in early 2004.

Have your sayIA&B is recruiting for the

2011-2012 MAP cycle. The

obligation is minimal, but the

payoff is great — for you and

your association.

Learn more or complete a

statement-of-interest form:

www.iabgroup.com/get_involved

“The meetings are wellorganized for efficientuse of time. I reallyappreciate the up-to-date information andopportunity toexchange thoughts.” —MAP participant

M


The Pennsylvania InsuranceDepartment did not recognize de facto terminations — thereduction or elimination ofcommissions in an effort toforce out an agency. Inresponse, MAP attendeessuggested amendments to Act 143, the state’s agency-termination statute.

IA&B carefully crafted a positionthat addressed MAP participants’concerns: not coming acrossgreedy, yet educating agents ontheir rights.

This issue regained the spotlightas well. In 2009 a carriereliminated an IA&B member’scommissions without offering Act 143 protections, including a one-year rehabilitation or run-off period.

IA&B represented the agencyand won: For the first time thePennsylvania InsuranceDepartment recognized theconcept of de facto terminations.

www.iabgroup.com/12_10_agency_term_case

Accident reportsProving that IA&B takesconcerns of all sizes to heart, in2004 the association workedwith the Pennsylvania Chiefs ofPolice Association, thePennsylvania Fraternal Order ofPolice and the State Police toaddress traffic accident reports.

A MAP participant expressedconcern with police failing toshare the reports. If the insureddid not take a copy of the reportbefore leaving the accidentscene and then provide it to the

agent, police refused to providea copy, calling it privateinformation. This, in turn,severely slowed down theprocess of filing a claim.

IA&B drafted an op ed article,published in the Fraternal Orderof Police magazine, to explainwhy an insurance agent needsimmediate access to accidentreports.

PrivacyIt was no surprise in 2005 whenMAP attendees shared theirconfusion about privacycompliance. IA&B respondedwith an Agent Issues e-mailseries that walked membersthrough its complianceresources.

Later, during 2010 MAPmeetings, participants sharedtheir concerns over expandingprivacy regulations. Growingobligations under HIPAA and theHITECH Act intertwined withalready cumbersomerequirements. So IA&Bresponded with a revampedprivacy resource, beginning withan audit and walking membersdown the (many) paths tocomplete compliance.

Del.: www.iabgroup.com/de/privacy

Md.: www.iabgroup.com/md/privacy

Pa.: www.iabgroup.com/pa/privacy

Strategic directionDuring the fall 2006 MAPmeetings, IA&B chargedparticipants with charting theassociation’s path for thefollowing 18-24 months.Attendees identified criticalinitiatives and brainstormed key projects.

Generally, members identifiedtechnology, perpetuation andhuman resources as areas ofconcern. Members shared theirfrustration about spending timeon agency management andoperations rather than sellingand growing their business.

The IA&B boards of directorstook the message to heart andsteered product, program andresource-development towardthose MAP-identified needs.Examples include executivemanagement conferences onperpetuation and technologyand a suite of human resourcesproducts (HR Solution©).

www.iabgroup.com/HR

Loan to valueIA&B of Pennsylvania membersfirst expressed concern aboutlenders requiring full loan valueinstead of replacement cost atthe spring 2007 MAP meetings.

IA&B responded with legislativeadvocacy, and in July 2008 Gov.Rendell signed The MortgageProperty Insurance Coverage Actinto law. The legislationprohibits mortgage lenders fromrequiring borrowers to insuretheir property in excess of thevalue of structures on the land.

ASSOCIATION AT WORK

[ 14 ]


[ 15][ 15]


The law was a win forhomeowners — and their agentswho often found themselvesstuck between a lender’sdemands and an insured’s actual needs.

www.iabgroup.com/07_07_mortgage_property_act

Producer agreementsMAP participants, along withother IA&B members, expressedconcerns about entering intoproper agreements with theirproducers. By late 2008 the trendwas clear: Members wouldcontact IA&B after an employeewould leave the agency, possiblywith proprietary information.

IA&B responded by updating itsmember resources. The revisedinformation covers:

w Trade secrets, non-competeand non-piracy

w E&O considerations forindependent contractors

w How geographic area relatesto non-compete language

w Considerations forimplementing agreementswith existing employees

w How contracts cansupersede law

Based on member feedback, theorganization revised the toolkitonce again in late 2009.

www.iabgroup.com/patoolkit

Fiduciary dutiesNews regarding AIG’sgovernment bailout broke in fall2008, so it was no surprise thatMAP discussion turned to carriersolvency, FDIC protection andfiduciary accounts.

After the MAP meetings, IA&Bdeveloped a three-part resourcethat explains agencies’ fiduciaryduties and offers advice foraccount set-up andmaintenance. During the spring2009 meetings, MAP attendeesreviewed and offered feedbackto refine the resource.

www.iabgroup.com/fiduciary

Agency newslettersWhile independent agenciesstruggled with the soft market,direct writers increased theircompetition, spending hugesums on advertising. MAPparticipants expressed their needfor a communication vehicle toenhance and promote their valueto customers and prospects.

IA&B researched variousvendors and partnered withForesight Publishing, specialistsin insurance marketingcommunications, to offermembers discounted access toan e-newsletter service.

The service boasts simple set-upand mailing-list management,customizable templates, real-time reporting and availability ofprofessionally written articles.

www.iabgroup.com/enews

TechnologyDuring the spring 2009 MAPs,IA&B learned that only a handful of members used social-networking tools as a businessstrategy while many had interest.The organization also identifieda similar trend with goingpaperless: Members wanted toget there but needed help.

In response, IA&B dedicated itssecond annual executivemanagement conference totechnology. Industry expertspresented workshops on socialnetworking, electronic documentmanagement, agencymanagement systems and client data security.

IA&B also launched its ownLinkedIn and Twitter accounts tointeract with agents in a newmedium and, in some cases, lead the way in Web 2.0.

www.iabgroup.com/soc_media

Parting thoughtsMargaret Mead said, “Neverdoubt that a small group ofthoughtful, committed citizenscan change the world. Indeed, itis the only thing that ever has.”

Those words reflect MAPs well.It is a group of thoughtful,committed members who arechanging their agency, theirassociation and the independentagency system for the better —one meeting and one brainstorm at a time.

Access a list of 2009-2010MAP participants online.www.iabgroup.com/MAPvolunteers

ASSOCIATION AT WORK

[ 16 ]


[ 17 ]

Transportation Division Local - Intermediate - Long Haul Physical Damage

Extended Towing Combined Deductible Trailer Interchange Non Owned Trailer Coverage

CargoCarriers & Owners Forms Pollution available Collision of Load available Terminal Coverage available

General Liability Outstanding claims service Loss Prevention Service Available

Brandon Green x244 [email protected]

Tri-State General Insurance Agency 1-800-556-7894

We write more than just “trucking”….Visit us at www.tsgia.com

* Maryland * Pennsylvania * Delaware * Virginia *

Crystal Moir x262 [email protected]

Frederick Mutual Insurance Company, an AM BESTA- (Excellent), VI property/casualty insurer writing inMaryland and Pennsylvania is currently looking forexperienced property/casualty insurance agents licensedto write personal and commercial lines business inMaryland and Pennsylvania. Frederick Mutual, a nichecompany, specializes in writing Small ArtisanContractors, Mainstreet BOP Business, Homeowners,Dwelling Fire and Personal Umbrella.

Established in 1843, we pride ourselves on our qualityof service and desire to partner with equally dedicatedprofessionals.

Additional background information regarding FrederickMutual is available on our website at www.fredmut.com.

57 Thomas Johnson Drive, Frederick, MD 21702-4301301-663-9522

ecurity in Your Time of Need

nparalleled Customer Service

orporate Integrity

ompetitive Pricing

ase of Doing Business

uperior Financial Strength

ound Products

SSUUCCCCEESSSS

At Frederick Mutual, we adhere to the following

Pillars of SUCCESS


Vincent D. “Chip” Boylan Jr., CPCUWillis of Maryland Inc.

Rockville, Md.

Henry “Butch” Bradley Jr.The Pennoyer Group Inc.

Crofton, Md.

John T. “Chip” Colwell Jr., CICRossbacher Insurance Service

Corry, Pa.

Timothy P. BurrisSausman Insurance Agency

Mifflintown, Pa.

John L. FrankenfieldFranconia Insurance & Financial Services

Telford, Pa.

N. Lee Dotson, CIC, AAIBellevue Insurance Services

Wilmington, Del.

David Rosenkilde, CICChair of Board

ABCO/ICS Insurance Services Inc.Reisterstown, Md.

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-PVice Chair of the Board

Francis Hall Insurance Services West Chester, Pa.

Kathleen M. GlattlyCPCU, ChFC, CLU, AIM

Immediate Past Chair of the BoardDGK Insurance & Financial Services

Factoryville, Pa.

Joyce M. Bailey, CIC, CRM, CPIWAAA Mid Atlantic

Newark, Del.

Norman F. Basso, CPCUE.K. McConkey & Co. Inc.

York, Pa.

2010-2011IA&B Leadership

IA&B Service Group ChairDavid Rosenkilde, CIC

ABCO/ICS Insurance Services Inc.Reisterstown, Md.

IA&B Service Group Vice ChairRobert B. Hall,

CPCU, CLU, ChFC, ARM, ARM-PFrancis Hall Insurance Services

West Chester, Pa.

IA&B Service GroupImmediate Past Chair

Kathleen M. Glattly, CPCU, ChFC, CLU, AIMDGK Insurance & Financial Services

Factoryville, Pa.

Delaware Association of IA&B ChairDiana M. Hornung-Momot, ACSR

Wilmington, Del.

Delaware Association of IA&B Vice Chair

Joyce M. Bailey, CIC, CRM, CPIWAAA Mid Atlantic

Newark, Del.

IA&B of Maryland ChairKing W. “Kip” White Jr., LUTCF

American InsuranceFallston, Md.

IA&B of Maryland Vice ChairHenry “Butch” Bradley Jr.The Pennoyer Group Inc.

Crofton, Md.

IA&B of Pennsylvania ChairTimothy P. Burris

Sausman Insurance AgencyMifflintown, Pa.

IA&B of Pennsylvania Vice ChairG. Greg Gunn, CICGunn-Mowery LLC

Lemoyne, Pa.

IIABA National DirectorScott C. Rogers, CPIAThe Glatfelter Agency

York, Pa.

IIABA National DirectorJames M. Watkins

Pfister Insurance Inc.Dover, Del.

PIA National DirectorSusan A. Sallada, CIC

Universal Service Agency Inc.Ft. Washington, Pa.


Susan A. Sallada, CICUniversal Service Agency Inc.

Ft. Washington, Pa.

David B. Wasson Sr., CICWasson Insurance Agency Inc.

State College, Pa.

King W. “Kip” White Jr., LUTCFAmerican Insurance

Fallston, Md.

2010 – 2011 Board of Directors

Diana M. Hornung-Momot, ACSRThomas J. Hornung & Associates

Wilmington, Del.

Jocelyn R. Howard-Sinopoli, CIC, CISR C.W. Howard Agency Inc.

Butler, Pa.

Michael F. McGroarty Sr.McGroarty & Bradburn Insurance, Inc.

Pittsburgh, Pa.

Ann Gallen Moll, CICGallen Insurance Inc.

Reading, Pa.

Scott C. Rogers, CPIA The Glatfelter Agency

York, Pa.

James M. WatkinsPfister Insurance Inc.

Dover, Del.

G. Gregg Gunn, CICGunn-Mowery LLC

Lemoyne, Pa.

Robert S. Klinger, LUTCF Klinger and Associates Inc.

Germantown, Md.


Platinum Profile

“Travelers values the 13,000agents around the country whosell our policies. We are alldedicated to helping consumersfind the right insurance to meettheir specific needs. Travelersappreciates the continuedpartnership and commitment toproviding the highest level ofcustomer service.”

– Kirk Larsen, Regional President

Travelers is one of the largestproviders of property casualtyinsurance products in the United

States. Our diverse portfolio ofofferings includes a wide range ofcoverages for both personal andcommercial customers. A Fortune 100company, Travelers has 30,000employees and 2009 revenues ofapproximately $25 billion.

In business for more than 140 years,Travelers has been an industry leaderfrom the start. The company wrote thefirst auto policy in 1897 and hascontinued to lead the industry in thedevelopment of innovative products

and services. From identity theftcoverage to wedding insurance, wepride ourselves on offering productsthat are in-synch with our customers’evolving risks. We also offer discountsfor growing sub-segments like hybridcar owners and coverageenhancements for commercialproperties to upgrade to greenbuilding materials and systemsfollowing a covered loss.

While delivering all the capabilities of anational carrier, Travelers possesses aunique local expertise that enables usto adapt our innovative products,services and technology to specificlocal market needs. We think nationallyand act locally. For example, through astate-dedicated product and pricingteam, we can take our products andgenerate rates specific to the uniquecharacteristics of a state, a county, acity and even a zip code. Our teamcomprises underwriting, claims andservice employees who work throughour six offices in Maryland, Delawareand Pennsylvania, and are all familiarwith the local needs and wants of ouragents and insureds.

We are committed to supporting ourmore than 13,000 independent agentsacross the United States in many ways.Agents who partner with Travelershave access to our marketing programand tools, accessible via state-of-the-artwebsites. Travelers also offers a widerange of customer acquisitionprograms, including print ads, publicrelations tools and direct mail pieces.Represented by the red umbrella,Travelers is one of the most recognizedinsurance brands in the country.Travelers understands that life andbusiness are inherently dynamic andthat the best way to serve customers isto deliver insurance in-synch withevolving risks. For more information,visit www.travelers.com.

**A.M. Best’s rating of A+ applies to certaininsurance subsidiaries of Travelers that aremembers of Travelers Insurance Companiespool; other subsidiaries are included in anotherrating pool or are separately rated. For a listingof companies rated by A.M. Best and otherrating services visit www.travelers.com. Ratingslisted herein are as of June 8, 2010, are usedwith permission, and are subject to changes bythe rating services. For the latest rating, accesswww.ambest.com.

Insurance Agents & Brokers proudly recognizes The Travelers Companies, Inc. as one of its Platinum Partners.

IA&B Platinum Partners dedicate the highest level of sponsorship to our organization.

FEATURED PARTNERThe Travelers Companies, Inc.

CHIEF EXECUTIVE OFFICERJay Fishman, Chairman & CEO

COMPANY LOCATIONSEXECUTIVE OFFICES:

New York, Hartford, Conn., Saint Paul, Minn. LOCAL OFFICES:

Pittsburgh, Pa., Philadelphia, Pa.,Blue Bell, Pa., Wyomissing, Pa.,

Mechanicsburg, Pa. and Hunt Valley, Md.

A.M. BEST RATINGA+ (superior)**


WHAT IS IA&BPARTNERS?The IA&B Partners

program gives company

and allied businesses

the opportunity to

demonstrate their

commitment of support

to independent agents

and receive maximum

market exposure. As an

IA&B Partner, you will

also realize the benefits

of IA&B membership to

help you succeed in

the insurance industry.

DO YOU SEEYOUR NAME?To become an IA&B Partner,

choose the sponsorship

package that matches your

commitment of support.

Contact the Member Sales

Center at (800) 998-9644,

(717) 795-9100 or visit us

online at www.iabgroup.com

to get started.

Listed below are those companies that strongly support the independent agency

system and Insurance Agents & Brokers.Thank you for your continued sponsorship.

PLATINUM LEVELACUITYBerkley Mid-Atlantic GroupErie Insurance GroupHarleysville InsuranceInsurance Agents & BrokersService Group IncMillers Mutual GroupMillville Mutual Insurance CoMutual Benefit GroupOhio CasualtyPenn National InsuranceSelective Swiss ReThe Main Street America GroupTravelersUtica National Insurance Group

GOLD LEVELAllied InsuranceMMG InsuranceProgressive

SILVER LEVELAccess Insurance Company American Mining Insurance CoCumberland Insurance GroupDonegal Insurance GroupFrederick Mutual Insurance CoHarford Mutual Insurance CoJuniata Mutual Insurance CoPSBA Insurance TrustThe Motorists Insurance GroupWestfield InsuranceZenith Insurance

BRONZE LEVELAegis Security Insurance Co

Agency Insurance Company

Auto-Owners Insurance Company

Briar Creek Mutual Insurance Company

Builders Insurance Group

Chubb Group of Insurance Companies

Encompass Insurance

First General Services

Foremost Insurance Group

Goodville Mutual Casualty Company

Grange Insurance Companies

Hanover Fire & Casualty Insurance Company

Insurance Alliance of Central PA Inc

Insurance Placement Facility of PA

Keystone Insurers Group Inc

Lebanon Mutual Insurance Company

Mercer Insurance Group

Merchants Insurance Group

Mercury Casualty

Penn Millers Insurance Company

Penn PRIME Municipal Insurance

Reamstown Mutual Insurance Company

Rockwood Casualty Insurance

State Auto Mutual Insurance Company

TAPCO Underwriters Inc

The Brethren Mutual Insurance Company

The Mutual Service Office Inc

Tuscarora Wayne Insurance Company

Primary Agent December 2010


ASSOCIATION AT WORK

Complete resultsAccess complete CSI results atiabgroup.com/csi.

w Quick facts

w Individual carrier results

w Carrier comparisons

Who responded?The CSI survey is open to allemployees within IA&Bmember agencies.

Every two years IA&B members receive a freshperspective on carrier performance. Theassociation’s biennial Company Satisfaction Index(CSI) allows them to rate — and then review and

compare — their carrier experiences.

Throughout the summer of 2010, members were encouragedto complete the online survey, which asked them to rate theirtop carriers on:

w Products, pricing and underwriting

w Policy service and claims

w Agency/company relationship

w Technology

Over 400 members participated, rating 74 personal-linescarriers and 82 in commercial lines. Of those, carriers with10 or more completed surveys were included in the finalresults. That left 39 in personal lines and 38 in commercial.

Respondents showed the most satisfaction with carriers’policy service and claims and, as in years past, showed theleast in the area of technology. And when separated byfootprint and direct premium written, carriers operating in 11 to 34 states received the most favorable results.

For more on the survey structure and complete results, visit iabgroup.com/csi.

Straight talkMembers rate their carrier experiences

E

[ 22 ]

41%Principals

25%CSRs

17%Producers

16%Managers

1%Others


Insurance for RestaurantsFamily Style, Pizza Shops, Take-Out, Fast Food, Donut Shops,

Diners, Cafes, Bagel Stores, Franchises

Brokers Surplus Agency wants to quote your restaurants!

We have a terrific BOP program that’s packed with the coverages you need.New Ventures eligible!Liquor liability coverage available!

Contact us by phone or email today!(215) 443-9900

Brokers Surplus AgencyP.O. Box 2849

Warminster, PA 18974

Dennis Marsaglia, Ext. [email protected]

Evelyn Frisch, Ext. [email protected]


Welcome to the information age, whereadvancements occur at a more rapidpace — and have a greater influence on daily existence — than ever before.

ASSOCIATION AT WORK

Technology tips help agencyowners run tighter shipsIA&B holds executive management conference, annual meeting


[ 25 ]


The independent agency system is not immune. Infact, technology is acting as an equalizer, affectingagencies regardless of sales volume or staff size orcarrier representation or lines of insurance sold.

Members spoke, and IA&B responded to their uncertainties,frustrations and learning curves with the October 2010Executive Management Conference, dedicated to technology.

Executive management conferenceHeld in Lancaster, Pa., the two-day event brought togetherindustry experts on agency management systems, datasecurity, electronic document management and socialnetworking. Seminars offered management-level educationwith the end goals of improved efficiency and compliance.

“Our members shared that technology has become more of a hindrance than a help,” said Dave Rosenkilde, chairman of IA&B Service Group. “This conference aimed to change that by providing practical information andimplementation guidelines.”

The 150-plus attendees also benefited from opportunities tonetwork with fellow participants, not to mention the 19exhibitors and sponsors — ranging from insurancecompanies to software vendors.

Annual meetingBefore the conference, IA&B held its annual meeting — anopportunity to showcase the year’s achievements, recognizethose who have made those accomplishments possible andposition the association for 2011.

The annual meeting also marked a change in leadership. Aboard listing and photos are available on pages 18-19.

It is thanks to the dedication and direction of thesevolunteers that IA&B can proactively assess members’ needsand provide resources, such as the Executive ManagementConference, to meet them.

Conferenceexhibitors

and sponsorsAll Risks

Berkley Mid-Atlantic Group

Broadview Networks

Chubb Group of Insurance Companies

Cumberland Insurance Group

Donegal Insurance Group

docStar

Frederick Mutual Insurance Co.

Harleysville

Millville Mutual Insurance Company

Mutual Benefit Group

Ohio Casualty

PaperWise

Penn National Insurance

Progressive

SehHey

Vertafore

Westfield Insurance

Xpress-pay.com

T

Delaware Association of Insurance Agents & Brokers Inc.Joyce M. Bailey, CIC, CRM, CPIWAAA Mid Atlantic, Newark, Del.

N. Lee Dotson, CIC, AAIBellevue Insurance Services, Wilmington, Del.

Insurance Agents & Brokers of Maryland Inc.Robert S. Klinger, LUTCFKlinger and Associates, Germantown, Md.

Insurance Agents & Brokers of Pennsylvania Inc.John L. FrankenfieldFranconia Insurance & Financial Services, Telford, Pa.

Ann Gallen Moll, CICGallen Insurance, Shillington, Pa.

Jocelyn R. Howard-Sinopoli, CIC, CISRC.W. Howard Agency, Butler, Pa.

A special welcome to the six members newly elected to IA&B’s boards of directors:


IA&B Financial Reports

IA&B remains in goodfinancial health with strongreserves; continues toprovide and expandprograms, products andservices to meet members’needs; and is poised forfuture growth.

The accountants’ review forthe fiscal year, whichended March 31, is on fileat IA&B headquarters.These statements are asummary of that report.

Combined member equityincreased to $6.160million, on $8.427 millionof total assets and $2.602million of total liabilities.

Combined net operatingloss was $(66) thousand ontotal revenues of $5.744million and total expensesof $5.811 million. Thecombined change in netassets was $395 thousand.

COMBINING STATEMENT OF ACTIVITIES

YEAR ENDED MARCH 31, 2010

Combined IAB Intercompany Combined

IAB of PA IAB of MD DAIAB IAB-Associations Service Group Eliminations IAB

Revenues: Membership Dues 336,582 102,059 18,120 456,761$ (3,863) 452,898$ Professional Training 1,544,994 413,576 60,324 2,018,894$ (1,570) 2,017,324$ Events & Member Products 109,751 33,727 74,127 (3,675) Royalties & Commissions 613,365 110,101 30,032 753,498$ 2,132,579 - 2,886,077$ Other 24,674 (1,287) 4,389 27,776$ 1,447,111 (1,300,792) 174,095$ Total Revenues 2,629,366$ 658,176$ 186,992$ 3,474,534$ 3,579,690$ (1,309,900)$ 5,744,324$

Expenses: Membership 96,335 11,210 1,035 108,580 108,580 Member Services - 149,772 (1,570) 148,202 Professional Training 1,269,211 371,654 63,427 1,704,292 (1,241) 1,703,051 Events & Member Products 53,263 8,196 56,911 (6,476) Publications 99,575 99,575 Advocacy 147,376 50,042 10,931 208,349 (338) 208,011 Corporate & Management 1,142,288 213,085 57,368 1,412,741 3,007,405 (1,300,275) 3,119,871 Depreciation - 160,414 160,414 Taxes & Other - 151,039 - 151,039 Total Expenses 2,708,473$ 654,187$ 189,672$ 3,552,332$ 3,568,205$ (1,309,900)$ 5,810,637$

Net Operating Income

(Loss) (79,107)$ 3,989$ (2,680)$ (77,798)$ 11,485$ -$ (66,313)$

Pension related change 132,027$ 132,027

Investment gain from 272,727$ 44,780$ 1,582$ 319,089 10,411$ 329,500 mutual funds

Change in Net Assets 193,620$ 48,769$ (1,098)$ 241,291$ 153,923$ -$ 395,214$

INSURANCE AGENTS & BROKERS

ASSETSCombined IAB Intercompany Combined


Cash & Cash Equivalents 2,126,683$ 322,727$ 297,550$ 2,746,960$ 687,522$ -$ 3,434,482$

Premium Fiduciary Cash 376,489 376,489

Accounts Receivable 88,001 10,040 4,116 102,157 316,348 (226,827) 191,678

Mutual Fund Investments 1,308,363 214,821 7,588 1,530,772 49,950 - 1,580,722

Prepaid Taxes - - - - 33,346 - 33,346

Prepaid Expenses 65,621 23,704 4,158 93,483 79,757 (7,864) 165,376

Total Current Assets 3,588,668 571,292 313,412 4,473,372 1,543,412 (234,691) 5,782,093

Property and Equipment, net - - - - 1,535,423 - 1,535,423

Cash whose use is limited, board and donor 358,986 23,011 5,031 387,028 387,028

Investment in Big I Reinsurance Co. 90,000 30,000

Investment in IAB Service Group 486,082 102,013 12,005 600,100 (600,100) -

Other Assets - 602,137 602,137

Total Other assets 935,068 125,024 47,036 1,107,128 602,137 (600,100) 1,109,165

Total Assets 4,523,736$ 696,316$ 360,448$ 5,580,500$ 3,680,972$ (834,791)$ 8,426,681$

LIABILITIES AND NET ASSETS

Combined IAB Intercompany Combined


Total Current Liabilities 1,434,200 240,083 76,810 1,751,093 658,404 (234,691) 2,174,806

Long-term liabilities, retirement obligations - 427,483 - 427,483

Total Long Term Liabilities - - - - 427,483 - 427,483

Net assets, unrestricted:

Designated funds 360,149 23,386 5,281 388,816 175,000 563,816

Undesignated 2,729,387 432,847 278,357 3,440,591 2,755,809 (600,100) 5,596,300

Total Net Unrestricted Assets 3,089,536 456,233 283,638 3,829,407 2,930,809 (600,100) 6,160,116

Accumulated other comprehensive loss, defined benefit pension plan, net of deferred tax (335,724) (335,724) Total Liabilities and Net assets 4,523,736$ 696,316$ 360,448$ 5,580,500$ 3,680,972$ (834,791)$ 8,426,681$

March 31, 2010

COMBINING STATEMENT OF FINANCIAL POSITION

INSURANCE AGENTS & BROKERS

[ 26 ]


[ 27 ]

IF YOU HAVE THE TOOLS,WE HAVE THE INSURANCE.

Residential Contractors with up to 5 employeescan find great deals on liability insurance atBrokers Surplus Agency. We represent Utica First Insurance, one of the largest writers of small contracting firms in the Northeast, and we cangive you a free quote on all your coverage needs!Call or email us today!

Contact: Dennis Marsaglia, Ext. [email protected] Frisch, Ext. [email protected]

Brokers Surplus Agency, P.O. Box 2849,Warminster, PA 18974 � Call (215) 443-9900

Make Our Experience,Your Advantage.

200 North Main Street • Bel Air, Maryland • 21014-3544

Join our team today. Contact us to learn more:

www.harfordmutual.com800-638-3669

Through AgentPAC, IA&B can work to elect legislators whounderstand you. IA&B is a strong advocate for you, but even the

strongest advocate cannot succeed unless there are legislators whounderstand the issues faced by independent agents —

that is where your support matters!

Help IA&B support legislators who understand independent agents. Contribute to your state AgentPAC.

VISIT IABGROUP.COM OR CALL THE IA&B MEMBER SERVICE CENTER TOLL FREE AT (800) 998-9644 OR LOCALLY AT (717) 795-9100, OPTION 0 FOR MORE INFORMATION.

YOUR SUPPORT MATTERS.CONTRIBUTE TOAGENTPAC.

Driving members to distinction


ACUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15

Brokers Surplus Agency . . . . . . . . . . . . . . .23, 27

Commonwealth Ins Co . . . . . . . . . . . . . . . . . . . .3

Cumberland Insurance Group . . . . . . . . . . . . .11

Donegal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .IFC

EMC Insurance Companies . . . . . . . . . . . . . . . .1

Frederick Mutual Ins Co . . . . . . . . . . . . . . . . . .17

Harford Mutual . . . . . . . . . . . . . . . . . . . . . . . . .27

IA&B Partners Program . . . . . . . . . . . . . . . . . . .21

IA&B Series Ad . . . . . . . . . . . . . . . . . . . . .27, IBC

Interstate Insurance Mngmnt. . . . . . . . . . . . .OBC

Mutual Benefit Group . . . . . . . . . . . . . . . . . . . .11

Preferred Property Program . . . . . . . . . . . . . . . .5

Tri-State General Ins Ag . . . . . . . . . . . . . . . . . .17

Ad Index

ClassifiedA D V E R T I S E M E N T S

SOUTHEAST PA PRODUCERS & AGENCIES

Professional agency since 1926 locatedin Feasterville, Bucks County, Pa. Call for confidential information and a review of our services. Contact Ray Reinard at (215) 375-8600, Ext. 119.

LOOKING TO BUY!

Agency in Snyder, Union andNorthumberland Counties. All inquiries kept confidential.Call Gary at (570) 524-7670.

If you would like to place a Classified Advertisement, simply fax your ad on company letterheadto (717) 795-8347, and we will take care of the rest.

[ 28 ]

Tracing the history of insurance terminology

An etymology is the origin of linguistics – where, whenand how a word began and how it changed throughoutthe centuries.

Here’s a look at etymologies of a few insurance terms:

Insurance: 1550s, “engagement to marry,” a variant ofensurance. Commercial sense of “security against lossor death in exchange for payment” is from 1650s.

Policy: “written insurance agreement,”1560s, from Middle Frenchpolice “contract, bill of lading”(late 14c.), from Italian polizza“written evidence of atransaction,” from MedievalLatin apodissa “receipt for

money,” from Greek apodexis“proof, declaration,” from apo- “off”

+ deiknynia “to show,” cognate with Classical Latindicere “to tell”

Underwrite: early 15c., loan-translation of Classical Latinsubscribere. Used literally at first; modern sense of “toaccept the risk of insurance” (1620s) is from notion ofsigning a marine insurance policy. Meaning “to supportby a guarantee of money” is recorded from 1890.

Source: Online Etymology Dictionary(http://www.etymonline.com)

----------------------------------------------------------------———————-------The Last & Least column is dedicated to the industry’s oddities —from creative claims and kooky coverages, to (tasteful) jokes andstrange stories. Submit yours to [email protected], subject line: Last & Least. The editor will happily protect sources’ anonymityupon request.


CONFIDENCE THAT YOUREMPLOYEES HAVE THE SKILLS

TO HELP YOUR CLIENTS

IF IA&B HAS TRAINED THEM,YOUR EMPLOYEES HAVE WHATTHEY NEED TO DO THE JOB RIGHT.Through in-depth review of coverage and coverage gaps, IA&B will provide your staff the skills they need to understand the complex insurance needs of yourcustomers. With help from IA&B, you can rest assured that your staff has the skills to do the job right.

FOR MORE INFORMATION ON IA&B TRAINING PROGRAMS, VISIT WWW.IABGROUP.COMOR CALL THE IA&B MEMBER SERVICECENTER AT (800) 998-9644.

That's how we deliver distinction.

Driving members to distinction


In Pennsylvania2307 Menoher Boulevard • Johnstown, PA 15905814-255-7878 • 1-800-452-0297 • Fax: 814-255-6010In Maryland111 Warren Road • Suite 1B • Cockeysville, MD 21030410-628-1744 • 1-800-759-7779 • Fax: 410-628-6914In Ohio635 Park Meadow Road • Suite 206 • Westerville, OH 43081614-794-0800 • 1-800-701-5587 • Fax: 614-794-0840In West Virginia706 Bluestone Road • Beckley, WV 25801304-253-5147 • Fax: 304-253-5060

interstate-insurance.com


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