MARYLAND

ALSO INTHISISSUE:_________________

Health care reform in 2012

G23857_January2012Covers_January2012Primary 12/19/11 1:08 PM Page 2

HANOVER FIRE & CASUALTY serves the working families of our region by offering the insurance they need. No games. No tricks. Just good, solid insurance available to those who really need it. We settle claims promptly and fairly, and we manage to hold our rates. And the fact is, for nearly 100 years, our customers return and renew with us; well, that just drives the point home, doesn’t it?

Would you like to be a Hanover agent? For more information call 800-919-FIRE or visit www.hanoverfire.com. Learn more about our portfolio of products, our easy-to-use agent portal, and our com-petitive commission structure. Call today!

The Secret Is Out!Hanover Agents Love To Tell Their Customers

Why They Are Happy To Be Associated With Us.

G23857_IFC-IBC-OBC_Layout 1 12/19/11 1:04 PM Page 1

Putting the freeze on LTC objections

The objections to LTC insurance are numerous, but so are the reasons for securingit. Check out the new LTC riders that offer client appeal and producer approval.

Page 10

Health care reform in 2012

These days the only constant is change for health care. Read up on a few of theways the insurance industry will be affected by health care reform legislation in2012.

Page 16

10

16

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

Copyright 2012. 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 EditorMechanicsburg, 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 # 2012-1) is published monthly by IA&B Service Group Inc., a subsidiary of IA&B.

2 Chair of the Board’s Message3 Member FAQ4 State News6 Coverage Corner8 H.R. Headquarters9 Glance at Events

15 IA&B Partners22 Technology Update24 Advertisers Index24 Classified Ads24 Last & Least

In every issueMission StatementPrimary Agent delivers ideas to help InsuranceAgents & Brokers’ members negotiate their uniqueposition as guardians of trust between insuranceconsumers and companies while facing thechallenges of maintaining a small business. PrimaryAgent also supports IA&B’s mission to preserve andadvocate the American Agency System.

Get social with IA&B

G23857_01-09_January2012 12/19/11 1:40 PM Page 1

OfficersRobert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P

Chair of the BoardWest Chester, Pa.

Norman F. Basso, CPCUVice Chair of the BoardYork, Pa.

David Rosenkilde, CICImmediate Past Chair of the BoardReisterstown, Md.

MembersJoyce M. Bailey, CIC, CRM, CPIW

Newark, Del.

Henry “Butch” Bradley, Jr.Forest Hill, Md.

Timothy P. BurrisMifflintown, Pa.

N. Lee Dotson, CIC, AAIWilmington, Del.

John L. FrankenfieldTelford, Pa.

G. Greg Gunn, CICLemoyne, Pa.

John B. HollisterMilford, Pa.

Diana M. Hornung Hanby, ACSRWilmington, Del.

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

Robert S. Klinger, LUTCF, CPIA+

Germantown, Md.

Douglas A. Loesel, CPCUErie, Pa.

Michael F. McGroarty Sr.Pittsburgh, Pa.

Ann Gallen Moll, CICReading, Pa.

April E. Ressler, CICAltoona, Pa.

Scott C. Rogers, CPIA*York, Pa.

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

Lawrence A. Wilson, CIC, CPIA, CPCU, ARM**New Castle, Del.

* Pa. IIABA National Director** Del. IIABA National Director+ Md. PIA National Director

Board of Directors

[ 2 ]

Robert B. Hall, CPCU, CLU, ChFC, ARM, ARM-P

Chair of the Board’sM E S S A G E

Driving members to distinction.

New year, new start

Welcome to 2012 — a fresh start, a clean slate, a new chancefor you to achieve your goals. That’s what I love about thenew year. Even when times are tough, it offers you a chanceto brush yourself off and get back on the horse.

It’s no secret that the independent agent community is facingits fair share of challenges: the lingering soft market, carriers’increasing demands and, perhaps most concerning, directwriters’ deep pockets and visible advertising presence. Butthere’s no time like the present to push ahead and persevere.

That’s just the attitude the IA&B Boards of Directors has taken. While at times it seems like an uphill battle, we are determined to fortify our members, fight back against the competition and win the independent agencysystem’s viability.

Over the next year IA&B will provide you with practicalguidance for marketing your agency and for branding theindependent agency system as a whole. I encourage you totake advantage of these and additional association offeringsand to make 2012 your best year yet.

Wishing you a happy new year and a prosperous year ahead,

Bob

G23857_01-09_January2012 12/19/11 1:40 PM Page 2

Member FAQ

ANSWER:The use of signature flags, or “X” designations, is not aviolation of law, and is not, per se, an E&O “no no.”However, by using a “sign here” flag, the producer isclearly opening himself up to a potential claim by hisclient, that he was misled into signing something that hedid not intend to sign, or into selecting a limit that he didnot intend to select.

If an agency insists on using a “sign here” flag, thenproducers need to take every precaution to insure thatthe line they are asking the client to sign is the correctline, and perhaps also include in the cover letter arequest to the client to double-check the selections thatare being made by the client.

About pre-filled applications, generally

The signature flags issue begs the more general question of how a producer should handle anapplication that is essentially pre-filled, or completed by the agency, and then sent to the client for execution.Are there other pitfalls?

On a purely customer service level, this practice iscommon. Agents often know their clients well, and areable to complete a majority of the information in anapplication without the client’s help. In addition, anagency often has a prior application in its file from which the agent can copy the relevant information onto a new application. Doing this saves the client a lot of time and hassle in dealing with the completion of an application.

However, when an agent decides to complete anapplication on behalf of his client, he should dothe following:

� make sure the information is correct. When indoubt, call the client to verify;

� request that the client review the application andverify the information it contains;

� make the client sign the application. Don’t EVER sign for the client, and verify (if possible) that the client in fact is the one whosigned the application. As an example, if theapplication is signed by an unauthorized person(i.e. office worker, spouse, etc.), the carrier mightget stuck paying for the loss (despite materialmisrepresentations in the application), and look to the agency for indemnification.

Finally, even though a producer completes anapplication, when the client signs the application, he or she is attesting to the accuracy and truth of theinformation in the application. This is a defense that will be used on E&O claims.

DO YOU HAVE A QUESTION? E-mail it to us at iab@iabgroup.com. Please use“Primary Agent FAQ” in the subject line of your message.You can also fax your question to (717) 795-8347. We look forward to answering your questions!

QUESTION: We were recently told that the use of signature flags, highlighters or

x-marks to identify where the client is supposed to sign could create an E&O issue.

Is it true? If we can’t do that, what can we do?

G23857_01-09_January2012 12/19/11 1:40 PM Page 3

Primary Agent | January 2012

State NewsKicking off the 2012legislative sessionThe new year marks the start of a newlegislative session. The state legislaturefaces a full plate, to include several hottopics for insurance producers. But IA&Bmembers, take heart: Your association ispoised to hit the ground running.

� Certificates of insurance – IA&B andits partners advocated for last year’spassage of HB 982/SB 656, whichmade it unlawful for a person torequire an insurer or producer toprepare or issue, or for apolicyholder to provide, a certificateof insurance that contains false ormisleading information. Ultimately,the bill did not include a provisionthat requires the filing of certificateforms, so IA&B will seek additionallegislation to address this problem.

� State health exchange – Last yearthe legislature and O’MalleyAdministration made substantialheadway when they passed theMaryland Health Benefit ExchangeAct of 2011. As the newly appointedgoverning board studies theforthcoming exchange and preparesto make recommendations, IA&B will monitor developments andpromote the important role of agentsand brokers.

� Coastal underwriting –Commissioner Goldsmith called for amid-December 2011 quasi-legislativehearing on availability andaffordability issues for coastalmarkets. IA&B testified that legislationor regulation to address availability isnot necessary. However, IA&B willcontinue to study the impact and

opportunities associated with somecarriers fleeing the market and willupdate the Maryland InsuranceAdministration and legislatorsaccordingly.

� Producer fees – IA&B is gatheringinput and discussing the impact thesefees may have on disclosurerequirements and competition in thesoft market.

Help IA&B help you inAnnapolis. Yourmonetary support ofAgentPAC helps IA&Bto educate andinfluence legislators

on the issues mostimportant to you.

Read more and contribute:www.iabgroup.com/AgentPAC

ERIE agency-agreement analysesavailableIA&B lent a fresh pair of eyes to the newERIE agency agreement.

Agency-agreement analyses are a benefit ofmembership. IA&B staff most recentlyreviewed the ERIE contract and workedclosely with the company to addressconcerns and request clarifications.

The review is available online. Members still are encouraged to closelyread the agreement in conjunction withIA&B’s analysis.

Access this and past analyses:www.iabgroup.com/md/carriers/agreements

[ 4 ]

G23857_MDStateNews_Jan2012 12/19/11 1:10 PM Page 2

[ 5 ]

Open enrollmentfor child-onlypoliciesAttention health agents: Child-onlyhealth insurance policies will beavailable with no denials or exclusionsfor pre-existing conditions throughoutJanuary. CareFirst BlueCross BlueShieldand Kaiser Foundation Health Plan of the Mid-Atlantic States will offer the policies.

Read more by visiting the MIA website:http://www.mdinsurance.state.md.us

Deadline to fileIrene lossesextendedFloat some good news to customers:FEMA extended the deadline for flood insurance policyholders to fileHurricane Irene-related losses. The 60-day extension — FEMA's secondfor flood policyholders who incurreddamage between Aug. 26 and Sept. 4— pushes the deadline until Jan. 23.

State receivesfederal funding toestablish healthexchangeMaryland will receive another boostfrom the federal government toestablish its state-run health insuranceexchange. The Department of Healthand Human Services (HHS) granted$27.2 million to the state for:

� Hiring of initial staff

� Policy analysis aimed at thetechnical operation of theexchange

� Computer and informationtechnology systems, includingthe platform to be implemented

� Addressing product licensing,system integration andindependent verification andvalidation

To date, Maryland has received $34.4million from HHS to plan and build theexchange. The state's Exchange Boardmet throughout the summer to discussselective contracting, how to includenavigators and how to build uponexisting state resources. The board isexpected to make recommendations tothe legislature on these and otherissues in early 2012.

IA&B continues to advocate for the roleof producers and to monitor the effectsof the federal health care law and itsimplementation across the state.New Members

W E L C O M E

Client 4 Life Insurance & Financial ServicesLaurel, Md.

Sandra L Priester InsuranceKensington, Md.

Protect your clients while managingyour agency’s E&O. IA&B’s new full-day seminar, “Cyber Liability —Exposures and Solutions,” will identifyunique first- and third-party risksassociated with electronic exchange ofinformation and intellectual property.

Learn about first-party cyber liabilityfor losses sustained by your clientsthrough things like:

� Electronic spying� Destruction of property and data� Business interruption due tohacker or virus attacks

� Software failure

Learn about third-party cyber liabilitywhen your client’s clients sufferdamages such as:

� Losses due to data theft or destruction

� Damage caused by forwardedcomputer viruses

� Contractual penalties due to IT failures

� Intellectual property and privacyinfringements

This new CE program will be offeredon March 6 in Baltimore.

Register:www.iabgroup.com/cyberliability

Cyber liabilityseminarcoming toBaltimore in March

G23857_MDStateNews_Jan2012 12/19/11 1:10 PM Page 3

CoverageC O R N E R

[ 6 ]

JERRY M. MILTON, CIC

Jerry M. Milton, CIC 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.

Primary Agent | January 2012

Two parties get together.They want to do business –build something, leasesomething, sell something –you name it. There will be acontract; you can bet on that.The contract will spell out theterms and conditions of theiragreement and the costs ofwhat is to be built, leased or sold.

That contract also will containtwo sections that weinsurance people are all too familiar with: theindemnification provisionsand the insurancerequirements. The contractnot only obligates the partiesto do or not do something, italso transfers the obligationto pay for the financialconsequences of certainlosses from one party(indemnitee) to the otherparty (indemnitor).

Who will be the indemniteeand the indemnitor isdetermined when thecontract is negotiated. Theparty holding the mostpower will be the

indemnitee. The indemniteeoperates from a position ofpower, and the indemnitoroperates from a position of weakness.

The indemnitee will call all ofthe shots, make no mistakeabout that. The contract willbe drawn up by theindemnitee’s attorney. Thatattorney will require theindemnitor to indemnify,save and hold harmless theindemnitee for all forms ofmalice, malcontent and evil.

The indemnitee does nottransfer its liabilities — ittransfers the obligation topay for certain liabilities. Ifthe indemnitor cannot payfor these liabilities, theindemnitee will be financiallyresponsible. Therefore theindemnitee will require theindemnitor to purchase andmaintain certain policies ofinsurance and provide proofof the required insurance.Insurance may pay for some,or all, of the obligationsassumed in the indemnityagreement. However, the

insurance is completelyindependent of the obligationto indemnify.

I know absolutely nothingabout the law. I’m aninsurance guy. Attorneys whodraw up these contracts, forthe most part, knowabsolutely nothing aboutinsurance. And that is theproblem. All too oftenattorneys require anindemnitor to indemnify theindemnitee for losses, costsand expenses that can’t beinsured. And then tocompound the problem, they include insurancerequirements that can’t be satisfied.

If we insurance folks had anyinput, maybe we couldresolve some of the conflictsthat exist between theindemnification provisionsand the insurancerequirements. Here are a few thoughts:

� Limit the indemnity toloss attributable to bodilyinjury, sickness, disease

WHAT IF WE WROTE THE CONTRACTS?

G23857_01-09_January2012 12/19/11 1:40 PM Page 6

[ 7 ]

or death, or to injury to ordestruction of tangible propertyincluding loss of use. (Insurancedoes not cover indemnification for “any and all injuries anddamages.”)

� Do not require indemnification for consequential damages suchas loss of use, fines, penalties, etc.(Again, those expenses are notcovered by the indemnitor’sinsurance.)

� Indemnification should be limitedto losses arising out of any act oromission of the indemnitor or itsemployees. (I know a few statesallow the indemnitee to make the indemnitor financiallyresponsible for the indemnitee’ssole negligence. But most of ouradditional insured endorsementsrequire that the loss arise out ofan act or omission of the namedinsured (indemnitor) or itsemployees, thereby excluding solenegligence coverage for theadditional insured (indemnitee). In addition, many of our insurersare attaching the Amendment Of Insured Contract Definitionendorsement (CG 24 26) whichexcludes coverage if theindemnitee is solely negligent.

� Do not ask for waivers ofsubrogation on the CommercialGeneral Liability and BusinessAuto policies. They are notneeded. Both policies permit theinsured to waive recovery prior tothe loss. However, the Workers’Compensation And EmployersLiability policy does not.

� If the indemnitor is a contractor,do not ask for the AdditionalInsured – Owners, Lessees OrContractors endorsement (CG 20 10 Edition 11/85). Most

of our insurers will not write.Accept the current CG 20 10 plusthe CG 20 37, which coverscompleted operations.

� Do not ask to be added as anadditional insured on the BusinessAuto Policy. It’s not needed. The BAP automatically coversanyone liable for the conduct ofan “insured,” to the extent of that liability.

� Do not ask to be added as anadditional insured on the Workers’Compensation And EmployersLiability policy. It ain’t going to happen!

� As a certificate holder, do not ask to be notified if the insured’spolicies are cancelled or non-

renewed. That is not required inthe policy. Therefore, we have noobligation to notify the certificateholder, unless the policy has been endorsed.

Oh well, wishful thinking! But I thinkthis would be a pretty good start. I’m sure y’all can add to this list.

Y’all take care!

At Harford Mutual, we’re committed to being here for our independentagents and policyholders. Accessible. Experienced. Accountable. Responsive. That’s Harford Mutual. That’s what mutual success is all about. Learn more about opportunities for mutual success with Harford Mutualat harfordmutual.com.

G23857_01-09_January2012 12/19/11 1:40 PM Page 7

H.R.H E A D Q U A R T E R S

[ 8 ]

JEFFREY W. GERHARTCEBS, MBA

Jeffrey W. Gerhart, CEBS, MBA,

provided this article on behalf of

Mosteller & Associates, IA&B’s

contracted human resources

consulting firm.

IA&B members have access to

HR Solution©, a compilation of

products and services to help

them establish or improve their

human resources program.

Included are base-level

consultation services and

discounted professional services

from Mosteller & Associates.

I recently had theopportunity to talk with anagency owner who had anemployee called to juryduty. The question waswhether there is a legalrequirement to continue theemployee’s pay while heserves the court in thatcapacity. To complicate thescenario, this employeemay be involved on a jury over a period of several months.

While there is no legalrequirement for employersto continue pay for juryduty, employees areafforded certain protectionwhile they serve. The JurySystem Improvement Act of1978 protects employeesfrom adverse employmentdecisions as a result ofperforming their civicservice. In other words,employees who serve onjury duty are to be treatedas any other regularlyemployed person. Inaddition, Delaware,Maryland and Pennsylvaniahave similar laws thatfollow the federal act, andnone require continuationof pay.

Many employers want to support employees who fulfill their civicresponsibility and providesome form of compensationfor wages lost while on juryduty. Some allow the use ofaccrued paid time off;others adopt a separate juryduty policy that providesadditional paid time offwhile serving. For suchpolicies, limits of three tofive (or more) days of payare common, as this periodcovers most types ofservice. If the jury dutycontinues after the limits ofthe policy, employers oftenallow employees to usetheir accrued personal time off.

Jurors are entitled to thestipend received from thecourt when they serve.Some employer policiesrequire that their paycontinuance for jury dutybe offset by the stipendamount, and that practice ispermissible under federaland state law. While thisoffset is permissible, youmay chose not toincorporate it into yourpolicy after you consider

your administrative time toprocess the adjustment inrelation to the daily stipendpaid to jurors and theexpected frequency thatyour employees may becalled to serve.

If you adopt a jury dutypolicy, caution should betaken with respect toexempt employees: Theycannot be docked pay for apartial week of work.Exempt employees maysubstitute the jury duty timewith other bona fide paidtime off programs if yourpolicy permits it. But if yourpolicy does not, the exemptemployee must receive hisfull weekly salary for apartial week of work. Onthe other hand, an exemptemployee who is absentfrom work for an entireweek is not entitled toreceive pay.

HR Solution© offers asample jury duty policy for yourconsideration. Sign in atwww.iabgroup.com/HR.From there, go to page 52of the Associate Handbooktemplate.

JURY DUTY: WHAT IS MY RESPONSIBILITY?

Primary Agent | January 2012

G23857_01-09_January2012 12/19/11 1:40 PM Page 8

[ 9 ]

Date Topic Location

JANUARY 2012

18 Workers' Compensation—Who and What It Covers Newark/Wilmington, Del.

25 CISR—Agency Operations Course York, Pa.

26 CISR—William T. Hold Seminar Philadelphia, Pa.

31 CISR—Personal Auto Course Pittsburgh, Pa.

FEBRUARY 2012

1 CISR—William T. Hold Seminar Salisbury, Md.

2 Understanding Cyber Liability Exposures and Solutions Seminar Pittsburgh, Pa.

7 CISR—Personal Auto Course Philadelphia, Pa.

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

14 CISR—William T. Hold Seminar Allentown, Pa.

CISR—Personal Auto Course Mechanicsburg, Pa.

15 CISR—William T. Hold Seminar York, Pa.

CISR—Personal Auto Course Reading, Pa.

16 CISR—Personal Auto Course Wilkes-Barre, Pa.

20-23 CIC—Personal Lines Institute Harrisburg, Pa.

21-23 L&H Licensing Study Course Philadelphia, Pa.

21 Understanding Cyber Liability Exposures and Solutions Seminar Mechanicsburg, Pa.

CISR—Personal Auto Course Allentown, Pa.

22 Understanding Cyber Liability Exposures and Solutions Seminar Allentown, Pa.

CISR—Personal Auto Course York, Pa.

28 CISR—Personal Auto Course Frederick, Md.

29 CISR—Personal Auto Course Wilmington, Del.

CISR—William T. Hold Seminar Pittsburgh, Pa.

Glance at Events

J A N U A R Y & F E B R U A R Y C A L E N D A R

G23857_01-09_January2012 12/19/11 1:40 PM Page 9

COVERAGES

Putting the freeze onLTC objectionsHow to warm up customers to the idea with riders

The objections to LTCinsurance are numerous,but so are the reasons for securing it. Check outthe new LTC riders thatoffer client appeal andproducer approval.

G23857_10-15_January2012 12/19/11 1:45 PM Page 10

[ 11 ]

Primary Agent | January 2012

Adding riders to enhance the features of a base lifeinsurance policy has been popular since the earlydays of the industry. Whether it’s one that doublesthe death benefit in the case of an accidental death

or waives the premium in the event of the insured becomingdisabled, both insurance companies and agents have foundthat adding these riders can greatly increase themarketability of insurance contracts by customizing the lifeinsurance policies to address specific concerns of anindividual client.

For example, a guaranteed insurability rider can be added toa life insurance policy that will guarantee the client theability to purchase a specific amount of insurance at certainpoints in time in the future. This type of rider is oftenfavorable for a client who is starting a family and isanticipating the need for additional insurance upon the birthof children.

The accelerated benefit rider is another example of one thathas been very popular in the past. It’s often triggered by aterminal illness or permanent disability. It’s particularlyappealing since it creates a “living benefit” for the client inaddition to the basic death benefit from the policy by payingthe client up to 100 percent of the death benefit for aqualifying event.

Some riders now allow clients access to their death benefitin the event they are in a nursing home or long-term carefacility. This new twist on an old idea has substantial clientappeal since it provides an effective argument to countermany of the objections to purchasing a traditional long-termcare (LTC) plan.

How it worksWhile there are several types of LTC “hybrid” products thatare currently on the market for life and annuity contracts, thefocus here is on those that can be added to life insurancecontracts.

The most common structure of these riders is in the form ofan “accelerated benefit” that provides the client with aspecified percentage of the death benefit each month thatcan be accessed to offset the cost of long-term care.

Assume, for example, that a female client needs $300,000 of permanent life insurance. Along with the life insuranceprotection, a needs analysis reveals that the client canbenefit from LTC protection of $200/day in the event of being admitted to a nursing home. To address the need, a 2 percent LTC rider will be added to the policy so the clientcan access up to $6000/month of the total death benefit forLTC payments.

A

At least 70 percent of

those over the age of

65 will require some

form of LTC at some

point in their lives.

G23857_10-15_January2012 12/19/11 1:45 PM Page 11

COVERAGES

[ 12 ]

To qualify for benefits, therider’s requirements are thesame as a normal LTC plan: Theclient needs assistance with twoout of the six activities of dailyliving. After the waiting period(90 days on most riders), aclient can begin collectingbenefits each month until thedeath benefit is exhausted.Some riders currently on themarket have an “enhanced”benefit feature that doubles thebenefit pool for LTC purposes.

Most of these plans pay on areimbursement basis. The clientsubmits the LTC bills and issubsequently reimbursedaccordingly for LTC facilities,home health care or nursinghome care. If the client does notuse the full benefit each month,the unused portion remains inthe pool for later use. If therider is never used, however,the client’s beneficiaries will bepaid the full death benefit.

The needA U.S. Department of Heath andHuman Services study foundthat at least 70 percent of thoseover the age of 65 will requiresome form

of long-term care at some pointin their lives. This is anoverwhelming statistic for mostpeople and demonstrates theclear need that most Americansface for LTC coverage. When thehigh probability of needing careis combined with the coststatistics for average nursinghome care, the numbersbecome staggering.

According to most estimates,the average nursing home costsabout $200/day, and theaverage stay is about 2 ½ years.When the costs are added up,on average about 70 percent ofpeople will incur a bill of morethan $180,000 (this figure canbe significantly higher inmetropolitan areas).

Even with all the data, manyconsumers choose not topurchase LTC policies. Giventhis often-daunting situation, aproducer must look at everypossible solution and that’swhere the LTC rider canprovide an attractivealternative to atraditional LTC plan.

________________________________

Riders can provide an intriguing solution

to the complexitiessurrounding the sale oftraditional LTC plans.

________________________________

An alternative solutionThere are many objections thatclients come up with to justifydelaying or completelydismissing the purchase of LTCinsurance. However, most ofthese fall into the followingthree concerns, which anadvisor should be prepared toaddress simply and clearly.

Cost: Cost is the most commonobjection to purchasing anindividual LTC plan. If we lookat a typical individual plan withthe same parameters for thesame 65-year old female client($6,000/month for five years),the policy would cost about

$3,000/year. However,adding the LTC rider to the$300,000 insurance policycosts only $400/year. Ata time when most

G23857_10-15_January2012 12/19/11 1:45 PM Page 12

Americans admit to beingunderinsured, this rider canprovide added motivation toobtain adequate insurance tocover the life insurance needand LTC coverage gap.

Failure to use: The secondreason consumers give for notpurchasing LTC is the possibilitythat they may never use thebenefits. Some life carriersattempt to mitigate theseconcerns through return-of-premium LTC plans. However,this adds significant costs toalready expensive plans.

Presenting the LTC rider to aclient can successfullyovercome this objection.Because the rider is added to anunderlying insurance contract,there always will be a deathbenefit paid to the client’sbeneficiaries if the rider is neverused. When the rider is added toa life insurance plan with cashvalue, there is the addedflexibility so the client canaccess the cash forsupplemental retirement oremergency income needs.

Sufficient savings: The thirdobjection is expressed by theclient with sufficient assets thatmitigate the need for an LTCpolicy. Based on our example, aclient would need at least$300,000 of liquid assets setaside for LTC.

These so-called “lazy assets” aretypically held in very low-yield,low-risk securities such asmoney market funds or CDs.However, if the client takes lessthan one-third of thisemergency fund (about $85,000

in this case) and purchases asingle-pay life insurance policythat includes an LTC rider, shecan obtain the same $300,000benefit pool. Along with theleverage this gives the client,there is the added benefit of anadditional $300,000 of lifeinsurance, which can then beused to offset estate taxes or tocreate a legacy.

The saleIn a highly competitive marketwhere products are constantlychanging and information iseasily available to consumers, itis vital that advisors be preparedwith a level of knowledge tobenefit their clients. Long-termcare riders can provide anintriguing solution to thecomplexities surrounding thesale of traditional LTC plans.

The concept can be used eitherto open the door to a new clientor to provide a compellingreason to revisit the insuranceneeds of current clients. Thisnew twist on an old idea shouldprove to be a beneficial sourceof revenue as peopleincreasingly try to get the mostvalue out of their insurancepolicies in the tight monetaryenvironment.

________________________________

Josh O’Gara contributed thisarticle. He is a brokerage managerat First American InsuranceUnderwriters Inc., the Needham,Mass.-based brokerage firm thatspecializes in coaching lifeinsurance producers that want togrow their practices. He can becontacted at jogara@faiu.com or800-444-8715.

[ 13 ]

the “A” way — Attitude, Assistance, Adaptability

ATLANTIC SPECIALTY LINES

Independently OwnedReliable & Experienced Underwriters

www

DIANNE SPRAGUE

BARBARA BEAVERSON

PERSON

G23857_10-15_January2012 12/19/11 1:45 PM Page 13

Platinum Profile

MMG Insurance, a progressiveregional property/casualtyinsurance company, has been

serving policyholders since 1897.

We believe that behind everyaccomplishment you’ll find hard workand a commitment to excellence.That belief has been a big part of our success.

In 2006 we took steps to diversify intothe mid-Atlantic states and expandedour model into Pennsylvania. Metwith great success and a bright future,we expanded into Virginia in 2011.

To differentiate ourselves from thelarger companies, MMG works toensure top-notch service. We take a tremendous amount of pride inbeing there when our agents andpolicyholders need us. We still answerthe telephone in person, which is rare, and have empoweredemployees to resolve issues quickly.

We do business exclusively throughindependent agents and live by thephilosophy that people do businesswith people.

MMG management and staff meetface to face with agents to see whatthey are dealing with and bringinnovative ideas back, makingchanges where necessary.

We strive to add value to the agents’operations, so our major focus ismaking it easy for them to dobusiness with us, particularly throughcutting-edge automation. It’s thatcombination of high-tech, high-touchthat enables business to flow quicklyfrom the agents to us and back andultimately benefits the policyholder.

MMG is honored to have recentlyreceived the following awards:

2010 Top Performing Company Insurance Agents & Brokers of PA

2010—2011 Company of the Year Maine Insurance Agents Association

2011 Excellence in ServiceProfessional Insurance Agents of NH

2011 Interface Partner AwardApplied Systems

Insurance Agents & Brokers proudly recognizes

MMG Insurance as one of itsPlatinum Partners.

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

FEATURED PARTNERMMG Insurance Company

PRESIDENT & CHIEFEXECUTIVE OFFICER

Larry M. Shaw, CPCU

COMPANY LOCATIONSHome Office, Presque Isle, ME

Concord, NHAllentown, PA

1-800-343-0533

A.M. BEST RATINGA- (Excellent)

WEBSITEwww.mmgins.com

G23857_10-15_January2012 12/19/11 1:45 PM Page 14

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.

PLATINUM LEVELACUITYBerkley Mid-Atlantic GroupDonegal Insurance GroupErie Insurance GroupHarleysville InsuranceHighmark Casualty Insurance CoInsurance Agents & BrokersService Group Inc

MMG Insurance CompanyMillers Mutual GroupMillville Mutual Insurance CoMutual Benefit GroupOhio CasualtyPenn National InsuranceSelective Swiss ReThe Main Street America GroupUtica National Insurance Group

GOLD LEVELProgressive

SILVER LEVELAccess Insurance Company Allied InsuranceAmerican Mining Insurance CoCumberland Insurance GroupFrederick Mutual Insurance CoJuniata Mutual Insurance CoPSBA Insurance TrustThe Philadelphia ContributionshipWestfield Insurance

BRONZE LEVELAegis Security Insurance Co

Agency Insurance Company

AmWINS Program Underwriters Inc

Auto-Owners Insurance Company

Briar Creek Mutual Insurance Company

Builders Insurance Group

Chubb Group of Insurance Companies

Countryway Insurance Company

Encompass Insurance

First General Services

Foremost Insurance Group

Goodville Mutual Casualty Company

Guard Insurance Group

Harford Mutual Insurance Co

Hanover Fire & Casualty Insurance Company

Insurance Alliance of Central PA Inc

Insurance Placement Facility of PA

Keystone Insurers Group Inc

Lebanon Valley Insurance Company

Mercer Insurance Group

Merchants Insurance Group

Mercury Casualty

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 Motorists Insurance Group

The Mutual Service Office Inc

Travelers

Tuscarora Wayne Insurance Company

Zenith Insurance

Primary Agent January 2012

G23857_10-15_January2012 12/19/11 1:45 PM Page 15

INDUSTRY NEWS

Health care reform in 2012The bruised and battered PPACA lives on

These days the onlyconstant is change forhealth care. Read up on afew of the ways theinsurance industry will beaffected by health carereform legislation in 2012.

G23857_16-21_January2012 12/19/11 12:57 PM Page 16

[ 17 ]

Primary Agent | January 2012

The Patient Protection and Affordable Care Act(PPACA) clock began ticking in March 2010, whenPresident Obama signed the contentious bill into law. Since then, despite repeated attempts to

dismantle it — think: a series of lawsuits (see “A supremechallenge” sidebar) and continued legislative maneuvering –the provisions’ effective dates keep arriving. And thecountdown until complete implementation in 2014 keeps nearing.

This year will be no exception: Several portions of the lawwill come due. And IA&B members — some as healthproducers, others as small-business owners — will facechanges and challenges as a result.

The following pages outline what the insurance industry canexpect from PPACA in 2012.

Uniform explanation of coverage documents(section 2715)Implementation deadline: March 23, 2012

Affected parties: health insurers and group health plan sponsors/administrators

Penalty for noncompliance: up to $1,000 perviolation/enrollee

Health insurance policyholders, applicants, enrollees andcertificate holders must receive a summary of their benefitsand coverage. PPACA requires uniformity in those documentsand outlines their specifics, including (among others):

� A four-page limit

� Uniform definitions of insurance and medical terms

� Coverage exceptions, reductions and limitations

� Examples of “common benefits scenarios”

� Contact phone number and Web address

Ensuring the quality of care (section 2717)Implementation deadline: March 23, 2012

Affected parties: health insurers and group health plan sponsors/administrators

Penalty for non-compliance: to be determined by the U.S. Department of Health and Human Services Secretary Kathleen Sebelius

New federal guidelines dictate the monitoring of thefollowing changes (among others):

� Improvements to “case management, care coordination,chronic disease management, and medication and carecompliance initiatives”

T

A supreme challengeThe legality of PPACA’s individualmandate will be decided once and forall. The U.S. Supreme Court in mid-November agreed to hear the case,which, at its core, questions therequirement of all Americans to buyhealth insurance or face a penalty.

Twenty-six states and the NationalFederation of Independent Businessseparately appealed the Supreme Courtto strike down the health care reformlaw in its entirety. The justices coulddecide that — or to invalidate theindividual mandate only, to delay aruling until the mandate takes effect in2014, or to leave the mandate (and therest of the law) in place.

Oral arguments are scheduled forMarch, and a ruling is due by July.

G23857_16-21_January2012 12/19/11 12:57 PM Page 17

� Implementation of hospitaldischarge programs thatprevent readmissions

� Improvement of patientsafety

� Promotion of health andwellness activities

Health insurers and healthplans must submit annualreports to the U.S. Departmentof Health and Human Services,as well as coverage and planenrollees and re-enrollees, thatoutline their compliance withthese improvement-of-caremeasures.

Patient-centered outcomesresearch fee (sections 6301,10602)Implementation deadline: Sept. 30, 2012

Affected parties: healthinsurers and group health plansponsors/ administrators

PPACA mandates establishmentof the Patient-centeredOutcomes Research Institute tohelp “patients, clinicians,purchasers and policy-makers”make informed healthdecisions. Research will“evaluate and compare healthoutcomes and the clinicaleffectiveness, risks and benefitsof two or more medicaltreatments [or] services….”

To support the institute, healthinsurance policies and plansdated from Sept. 30, 2012through Sept. 30, 2013 willinclude a $1 fee per person

INDUSTRY NEWS

[ 18 ]

States push forwardFederal law mandates each state to create a health exchange by 2014 for consumers to shop for and purchase health insurance products. IA&B continues to advocate for the preservation of producers’ role and to push for the exchanges to supplement, not overhaul, the existing health insurance marketplace. State-specific implementationupdates (as of late 2011) follow:

Delaware:Delaware formed a health care commission tasked with studyingways to implement the state’s exchange. The group, which includes a DAIAB presence, meets monthly.

Maryland:The Maryland Insurance Administration, General Assembly and theO’Malley administration worked quickly in 2011 to pass legislation thatestablishes the state exchange’s governing board and its initial role andduties, including conducting a study and making recommendations.

Pennsylvania:The state House Insurance Committee held spring 2011 hearings to studyoptions and learn from other states. Then in August, the InsuranceDepartment held public stakeholder meetings, in which IA&B staff andmember agents participated. The Insurance Department announced inNovember that the commonwealth will create its own exchange ratherthan letting the feds create one.

G23857_16-21_January2012 12/19/11 12:57 PM Page 18

covered. Then, until 2019, plansand policies will include a $2 feeper person.

Reducing health carecoverage costs (section 2718)Implementation deadline: Jan. 1, 2011

Reporting deadline: June 1, 2012

Affected parties: health insurersand group health plansponsors/ administrators

Penalty for non-compliance:first round of consumer rebates by Aug. 1, 2012

The law dictates a medical-lossratio provision, which limitshealth insurers’ spending onadministrate costs to 20 percentin the individual and small-group markets and 15 percent inthe large-group market. Reportson how premium dollars arespent must be made public, andfailure to comply with themedical-loss ratio requirementforces insurers to provideconsumer rebates.

Non-complying insurers areexpected to pay out up to$1.4 billion in rebates to nearly 9 million Americans. The U.S.Department of Health andHuman Services expects anaverage $164 rebate per personin the individual market.

Note: In December, the U.S.Department of Health andHuman Services issued its finalrule that includes producercommissions as administrativefees. As this issue of Primary

Agent magazine went to print, producer groups continuedto lobby for legislation thatwould exclude commissionsbecause they are pass-throughfees, delivered 100 percent tothird parties.

Additional changesBeyond the insurance industry,the medical community andMedicare beneficiaries will feel PPACA’s repercussions in2012. The following chronicles

[ 19 ]

Why our contracting coverages are built better than the rest:

We offer protection others don’t.

We’ve custom-built special liability coverages that meet the unique

needs of the contracting industry.� Blanket Additional Insured for Written Contract coverage� Blanket Waiver of Subrogation protection� Consolidated Insurance (Wrap-up) Program — limited exclusion� Electronic Data — $10,000 each occurrence/$10,000 aggregate� Limited Pollution Liability expanded limits up to

$1 million each occurrence with legal costs included� Voluntary Property Damage —

$5,000 limit per occurrence/$10,000 aggregate � Limited mold and bacteria coverage with limits of $10,000 and

$25,000 available. Legal expenses are included, subject to limits. (Not available in NJ)

Automatic endorsement protects against damage to your work.We clarified the policy to state that property damage to a contractor’s work performed on a contractor’s behalf by subcontractors, within the products-completed operation hazard, is an occurrence. Subject to all other general liability terms and conditions.This summary does not constitute a part of the insurance policy. See policy for complete terms and conditions.

Visit us at www.PennNationalInsurance.com to find out how you can become an agent with big opportunities for growth.

Primary Agent | January 2012

G23857_16-21_January2012 12/19/11 12:57 PM Page 19

— albeit briefly — some of the changes they can expectthis year.

Medicare health-systemintegration

Physicians and hospitals thatserve Medicare beneficiariesare encouraged to partner andform accountable careorganizations (ACOs). Thegoals of coordinated efforts areto improve care and reducehealth care costs associatedwith unnecessary testing,procedures and hospitaladmissions. The carrot? ACOscan retain some of the moneythey help save.

Data collection

The U.S. Department of Healthand Human Services will begincollecting racial, ethnic andlanguage data from federallyfunded and public healthprograms. The purpose is toidentify and, eventually, reducedisparities in access to care.

Electronic records

Requirements will begin forhealth plans to standardizebilling and adopt rules forelectronic exchange ofinformation. The goal is toreduce administrative burdens,costs and errors.

Medicare value-basedpurchasing

Hospitals’ performance will bepublicly reported, and thosethat improve their quality ofcare will receive financial

INDUSTRY NEWS

[ 20 ]

Chipping away at PPACA PPACA opponents can tally the April 2011 repeal of the 1099 mandate andthe October 2011 demise of the Community Living Assistance Services andSupports Act (CLASS) in the win column.

The retracted reporting requirementPPACA originally included a mandate for all companies to file a Form 1099for any business-to-business transaction for goods or services totaling over$600 annually. While the goal was to offset PPACA costs by increasing taxcompliance, the requirement would have been burdensome – especially forsmall businesses. A bipartisan bill dismantled the mandate and, in turn,

placed the burden of fund raising on families required to repay taxcredits for health insurance premiums when their income

rises above the federal threshold.

The lost LTC programThe long-term care (LTC) insurance plan was designedas a voluntary insurance program where all workingadults would pay a monthly premium toward a benefitthey could collect if they became disabled. Fundswould have been earmarked for use toward homehealth services or nursing home bills.

Challengers targeted the program’s fiscal viability: PPACAoriginally mandated that CLASS be solvent for 75 years.The U.S. Department of Health and Human Services,however, reported that it could not be simultaneouslyaffordable and solvent while remaining voluntary. As aresult, the Obama Administration removed the planfrom the health care reform law before its planned2012 implementation.

G23857_16-21_January2012 12/19/11 12:57 PM Page 20

[ 21 ]

incentives. Planning will begin to create similarprograms for other medical facilities — such asskilled-nursing facilities and home-healthagencies — that treat Medicare patients.

Learn more about PPACA:http://www.healthcare.gov/law

Track challenges and state implementation:www.iabgroup.com/features/health

__________________________________________

Karen Robison is public relations director for IA&B.

Our ApartmentProgram offers a great combination of competitive pricingand coverage for your customers!

Five or more units are eligible for this great program. An optional Apartmentizer Coverage Endorsement isalso available which includes 34 additional coveragessuch as: Landlord/Owner Furnishings

Loss of EarningsLock ReplacementUtility InterruptionWater Back-Up of Sewers & Drainsand much more!

Apartment program available in DE, MD, NJ and PA

Contact: Dennis Marsaglia, Ext. 230dennis@brokerssurplusagency.comEvelyn Frisch, Ext. 227evelyn@brokerssurplusagency.com

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

IF YOU HAVE THE TOOLS,WE HAVE THE INSURANCE.

Residential Contractors with up to five employees canfind great deals on liability and tools insurance atBrokers Surplus Agency! We represent UTICAFirst Insurance, one of the largest writers of small contracting firms in the Northeast!

Blanket Additional Insured coverage and UTICA’sown “Toolbox Endorsement” which includes 7 bundledadditional coverages saves your customers hundredsof dollars! Call or e-mail us today for a quick quote.Artisan program available in DE, MD, NJ & PA

Contact: Dennis Marsaglia, Ext. 230dennis@brokerssurplusagency.comEvelyn Frisch, Ext. 227evelyn@brokerssurplusagency.com

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

G23857_16-21_January2012 12/19/11 12:57 PM Page 21

Primary Agent | January 2012 TechnologyU P D A T E

When working with agents ina recent Progressive socialmedia workshop, severalparticipants asked how theycould get their Facebookposts to new audiences.Fortunately, Facebook offers afew easy tools for expandingyour reach beyond currentfans, enabling you to tap intotheir networks of hundreds,even thousands of prospects.Here’s how:

Tool No. 1: taggingWhat is it?

Tagging creates a connectionbetween your agency’sFacebook page and theFacebook page of anotherlocal business you referencein your status update. Thereare two benefits of taggingrather than simply typing thebusiness’s name in yourstatus update. First, when youtag, not only does your statusupdate appear in your NewsFeed and on your wall, but italso posts directly to the wallof your subject’s Facebookpage, making it visible toanyone who visits your

subject’s Facebook page.Secondly, the tag creates alink between your page andtheirs; your fans can click thetag within your update to visityour subject’s page, and yoursubject’s fans can click thewall post to visit your page formore information.

How do you do it?

Before you can tag, you mustuse your agency page to“like” the subject’s businesspage. Once you’ve liked theirpage, you can now tag themin a status update. Whenreferring to your subject, typethe “@” symbol and theirFacebook page name. You’llsee a drop-down menu ofpotential subjects you can tag.Once you post your update, itwill appear on your wall andtheirs, and the subject willreceive a notification.

Example

You recently joined theTownsville Chamber ofCommerce, and at your firstmonthly meeting, you meetseveral small-business owners

in your area. Searching onFacebook, you find businesspages for both the TownsvilleChamber of Commerce andfellow Chamber member Bill’sBikes, a popular motorcycledealership. Both pages have500 fans. After using youragency page to “like” thepages for the Chamber andBill’s Bikes, you type thefollowing status update:

Great meeting today at the@Townsville Chamber ofCommerce. Met Bill Millerfrom @Bill’s Bikes. Planningto stop by this weekend tosee what’s on the showroomfloor and drop off a fewbusiness cards for hiscustomers.

By tagging their Facebookpages, 1,000 additional fans(primarily small businessowners and motorcycleowners) have the opportunityto see your update. TheChamber and Bill’s Bikesbenefit from your call-out,and fans of the Chamber andBill’s Bikes can click theupdate to visit your page and

THREE TOOLS FOR MAXIMIZING YOURAGENCY’S FACEBOOK REACH

KEVIN AMENT

Kevin Ament, marketing

communications manager

at Progressive Insurance,

can be reached at

John_K_Ament@Progressive.com.

Kevin produced this article for

ACT (www.iiaba.net/act ).

It reflects his views and should

not be construed as an official

statement by ACT.

[ 22 ]

G23857_22-24_January2012 12/19/11 12:59 PM Page 22

learn more about commercial auto andmotorcycle insurance from youragency.

Tool No. 2: questioningWhat is it?

Using the Question tool (rather thansimply asking a question in a statusupdate) enables your question tospread to the individual walls and NewsFeeds of anyone who answers. As yourquestion moves through your fans’social networks and beyond, manymore users have the opportunity toanswer your question and learn moreabout your agency.

How do you do it?

On your agency’s Facebook page, clickthe “Question” tab, then type thequestion you’d like to pose to yourfans. Check “Add poll options” to createa list of potential answers, and check“Allow anyone to add options” toenable participants to add to your poll.Doing so creates more opportunity forengagement and can help circulateyour agency name far beyond youroriginal fan base as others add optionsto your list.

Example

Your agency participates in a number ofcharity events in your town, includingseveral 5K walks. This year, three of thewalks fall on the same Saturday, andyour agency can attend only one.You’re having trouble choosing, so youask your Facebook fans to vote on theirfavorite cause by posting the followingQuestion:

XYZ Agency will be sponsoring one ofthe 5K walks below. Help us decidewhich one by voting for your favorite.

[Option 1] Townsville Walk for Wishes

[Option 2] Walk for the Cure indowntown Townsville

[Option 3] Walk for Hunger supportingthe Townsville Food Bank

As your fans vote, the poll posts to theirindividual News Feeds, bringing yourphilanthropic message to their friendsand family. The poll not only gives youa free way to promote your agencybeyond your fan base, but it aligns youragency with a popular cause or localbusiness. If these events (or the groupsorganizing them) have Facebook pages,you can “tag” these pages in the list ofoptions you post, building additionalawareness for your agency.

Tool No. 3: contestsWhat is it?

Using a third party vendor, Facebookallows you to host contests on youragency’s page. You can choose fromseveral different types, including photo,video, sweepstakes, trivia and more.These contests can be used to buildFacebook fans, generate customerengagement and leverage your fans’networks to generate prospects andbuild broader awareness of youragency.

How do you do it?

Select a third party vendor (Progressiveuses Wildfire) that offers turnkeyFacebook contests. There are a numberof affordable options, some chargingjust $5 per campaign with an additional$1 a day while the contest is live. Createyour contest online, using the vendor’sWeb interface. You’ll need to providedetails on timing, official rules, thewinner-selection process andinformation you want to collect fromyour participants. Once you’ve builtyour contest, you can publish it to youragency’s page and website, and youcan promote it to your customersthrough email, Facebook or any othermedium, using the unique contest URL.As your fans participate in the contest,they can post their submission to theirown Facebook pages and invite theirfriends to vote on an entry, buildingengagement and awareness. Vendorsoffer detailed measurement and data-export functionality, so you can easily

capture leads while monitoring traffic,submissions, engagement (commentsand votes) and the effectiveness of yourpromotional communication.

Example

Say you want to promote a pet-relatedcoverage to pet lovers in yourcommunity. You hope to leverage yourcustomers’ social networks to reachtheir friends and family, so you host aPet Photo Contest on Facebook tospread the word. Customers can submittheir pet pictures online in twocategories – pet/owner look-alike andcutest pet – then vote on their favorites.After setting up the contest, you emailthe link to your customers, asking themto upload pictures of their pets andencourage their friends and family tovote for their submission. Customersinvite their friends and family to vote onthe contest site, which includesinformation about pet-related coverageand contact information for youragency. The contest engages customerswho are passionate about their petsand, as they ask their friends and familymembers to vote, helps buildawareness of your agency and collectvaluable leads you can target withfuture marketing.

These three tools, when usedstrategically and creatively, extend yourreach on Facebook, engage existingfans and build connections with otherbusinesses in your community. Be sureto incorporate these tools into yourFacebook strategy and learn how to useall the resources available to get thegreatest return from your social media investment.

Editor’s noteFor additional resources on digitalmarketing, visit www.iabgroup.com.Select Technology from the left-handmenu bar, then Other Resources.

[ 23 ]

G23857_22-24_January2012 12/19/11 12:59 PM Page 23

Atlantic Specialty Lines . . . . . . . . . . . . . . . . . . .13

Brokers Surplus Agency . . . . . . . . . . . . . . . . . .21

Guard Insurance Group . . . . . . . . . . . . . . . . . .21

Hanover Fire & Casualty . . . . . . . . . . . . . . . . .IFC

Harford Mutual Ins Co . . . . . . . . . . . . . . . . . . . .7

IA&B Cyberliability Seminars . . . . . . . . . . . . .IBC

IA&B Partners Program . . . . . . . . . . . . . . . . . . .15

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

Penn National Insurance . . . . . . . . . . . . . . . . . .19

Preferred Property Program . . . . . . . . . . . . . .IFC

Ad Index

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

DISCOVER THE BENEFITSOF A PARTNERSHIP

WITH FAYETTEINSURANCE ASSOCIATES

Uniontown, PA 15401Website: www.fayins.comEmail: info@fayins.com

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.

If you would like to place a

Classified Advertisement, simply

fax your ad on company letterhead

to (717) 795-8347, and we will take

care of the rest.

[ 24 ]

The autumn 2011 satellite debris freefalls posed aninteresting question: Who covers resulting personal injuryor property damage losses?

The sky is falling!In late September, a 20-year-old NASA research satellitecrashed into the atmosphere, slamming approximately 26 pieces into the Pacific Ocean. Then, one month later,an out-of-use German research satellite broke through theatmosphere, sending nearly 30 pieces torpedoing towardSoutheast Asia, most likely into the Indian Ocean orAndaman Sea.

There’s a convention for that. According to the United Nations-adopted 1972 Conventionon International Liability for Damage Caused by SpaceObjects, the government which launched the satellitewould be responsible “to pay compensation for damagecaused by its space object.”

Insurers could take the fall. Thanks to the recent increase of private satellites, a fewinsurers offer space coverage. Many operators, includingDirectTV and Google Inc., have coverage of up to $500million for freefalls, launch malfunctions and effectiveoperation of their $200 to $300 million satellites.

Source: “Falling satellites? Uncle Sam’s got it covered, mostly,” InsuranceJournal, Sept. 22, 2011; “Satellite debris could have hit Asia, or thesea,” Associated Press, Oct. 23, 2011

----------------------------------------------------------------———————-------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 iab@iabgroup.com, subject line: Last & Least. The editor will happily protect sources’ anonymity upon request.

Heads up on satellite debris liability

G23857_22-24_January2012 12/19/11 12:59 PM Page 24

LET’S PUT OURHEADS TOGETHER

������������Exposures and Solutions

Risks associated with the electronic exchange ofinformation and intellectual property are changingas fast as technology itself. This new IA&B seminar helps agents identify first- and third-party exposures and develop solutions to protect clients and manage E&O risk.

TOPICS TO INCLUDE:

� What The Exposures are� When Traditional Policies Will/Won’t Work� Cyber Risk Management � Crisis Management� And more

Driving members to distinction.

LOCATIONS AND DATES

Pittsburgh, Pa. February 2Mechanicsburg, Pa. February 21Allentown, Pa. February 22Baltimore, Md. March 6Philadelphia, Pa. March 7Newark, Del. March 22

CE CREDITSPa. = 8

Submitted for 8 credits in Del., and Md.Also submitted for loss-control credits.

LEARN MORE AND REGISTER AT IABGROUP.COM/CYBERLIABILITYOR CALL (800) 998-9644.

Protecting agencies and their clients in the digital domain

G23857_IFC-IBC-OBC_Layout 1 12/19/11 1:04 PM Page 2

G23857_IFC-IBC-OBC_Layout 1 12/19/11 1:05 PM Page 3