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Certificates of insurance. Reviewing contracts for customers. Accepting premium payments. Employee moonlighting. Initiating policy cancellations. Disaster planning. Employee internet usage. Furnishing MVRs to customers. HIPAA and other privacy rules. In addition to typical agency operations, does your agency have procedures in place for these activities? If not, you can now.

Agency owners often ask, “How long should I keep expired insurance policies?” When we’re talking about liability policies, the new answer may be “forever.”
An agency has both a premium trust account and an operating account at a local bank. The agency owner has been told by some other agents that separate accounts are not necessary. Is this correct? Is it a legal issue or a “best practices” issue?
When MVRs are run for underwriting reasons on drivers of a business, the employer often asks the agency for a copy or the agency, perhaps as a value-added service, provides a copy to the employer? Should the agency be doing this?
Email evidence was a highly publicized part of the Microsoft antitrust case, with both sides resurrecting chatty notes that are several years old. The case has shed light on some sobering facts about email. Not only is it more than idle chatter, it's also very hard to get rid of. In this article, Jack Fries demonstrates how ill-conceived, dogmatic email can come back to bite you and your agency. Do you know what your CSRs, producers and others are saying to others? For a chilling look at a major E&O exposure, keep reading....
What is the agency’s responsibility if the insurance carrier alters coverage at renewal? Most state statutes require the insurance carrier to notify the insured – not the agent. But should the agent undertake any action.
CLUE Reports are a common underwriting tool. According to research, more than 80 percent of consumers are unaware these even exist. Further, those who do know they exist likely don’t know much about them. This article provides basic information necessary to educate your clients.
Over the next several months we are going to explore how you can protect your data from a data breach and what the federal and state laws say you must do to protect it and what you must do in the event of a data breach. Stay tuned while we take you through a process on how you should be taking proactive, strategic steps to protect your customer and employee data — and for developing a plan on how you would respond should something occur that compromises that data.
This page has evolved from our original Hurricane Katrina Resource Page. Except for a few links to articles available only to IIABA member agencies and paid VU subscribers, all of this content may be used for noncommercial purposes. If you have any questions or suggestions, please email This page has evolved from our original Hurricane Katrina Resource Page. Except for a few links to articles available only to IIABA member agencies and paid VU subscribers, all of this content may be used for noncommercial purposes.
Unless there is a legal requirement, is there a reason to issue a written binder on an account? We posed this question to the VU faculty and got a mixed bag of responses. What do you think?
Over the years I’ve seen many agents spend thousands of dollars on a Procedures Manual,... one you’ve bought…one you’ve paid a consultant to come in and do…or one you’ve struggled for years to implement but can never quite seem to get there. And you know why…
For years your agency has not followed up on insurer cancellations for nonpayment. Now you feel that you are staffed to be able to do this. From an E&O (or other) standpoint, is this a good idea?
When there are changes in policy conditions related to coverage, price or other terms and conditions, most states require the insurance carrier to notify the insured a specified amount of time before renewal. These are known as conditional renewal guidelines. All but four states address this in statute.
Do you know why that Privacy Notice is on your website? Or are you one of many that haven't taken the time to even put one there? Would you be surprised to know that this is effectively mandated by federal law?
Many agency owners take great pride in generating low loss ratios year after year. These agencies are often small but very, very profitable. These agency owners are not happy with many carriers who have de-emphasized loss ratios. They cannot fathom why any carrier would not LOVE their good loss ratios. They do not understand that loss ratios that are too low are not in some companies’ best interests. How can too high of a profit margin be bad?
After years of preaching to agencies that they should not call customers whose direct bill policies are in a “pending cancellation” state due to non-payment of premium, at least one insurer is suggesting that agents make a “courtesy call” on most clients whose direct bill policies are unpaid past their due dates. Could this present an E&O exposure for the agency?
There are some excellent excess and surplus lines markets in this industry, many providing products and services superior to those in the standard market. However, there are inherent dangers in using some E&S markets that agents should be aware of. In this article, we'll present thirteen of them.
Do you have a good handle on your accounts receivable for agency-billed business? How do you measure up to industry standards or best practices ranges?
An agency would like to provide additional services to valued clients. One of the suggestions was to provide a drop box for customer payments for both agency and direct bill payments assuming it would be used after hours and on weekends. From an E&O perspective, what are the risks of providing this service? Would a disclaimer on the drop box lessen the risk?
It is almost embarrassing to say, but most insurance agents reckon their success by the balance in their checkbook. They don’t pay attention to those superb Operating Statements (Profit & Loss Statements) produced by their expensive Agency Management Systems and most don’t even print their Balance Sheets because either they don’t recognize the importance of the information contained in them – or they wish to bury their heads in the sand because they feel that what they don’t know about the health of their agency can’t hurt them. WRONG!  WRONG! WRONG!
Quite a few agencies now practice agency underwriting by establishing minimum limits that they will write for auto, CGL, etc. There are definitely advantages to doing this and, in general, it's a great idea. However, there can also be pitfalls that agents should be wary of....
You have an insured who has declared bankruptcy. How does this affect any premiums the insured owes? How does it affect any return premiums due the insured? How does bankruptcy affect cancellation due to nonpayment of premium? Can the insurer cancel on the basis that the bankruptcy itself represents an increase in risk? While we aren't attorneys and can't give you legal opinions, we can provide some guidance on dealing with these issues.
What is Benchmarking? It is a management tool in which an independent agent can analyze the agency’s financial and operating results against other agencies within its own peer group. This article explores a FREE service where you can add your own data and see how it compared to your peers.
Your agency/company contract has been amended as follows: 'The Agency shall have no authority on behalf of the Company to provide new coverage or increase existing coverage when the National Weather Service has issued a tornado warning, tropical storm watch or warning or hurricane watch or warning for an area within a 200 mile radius of the risk location.' Does this create problems for your agency?
You're a small agency with a lot of big business connections, but you don't have the markets or the staff to sell and service these types of major commercial accounts. One possibility is to broker them through a larger agency. While there are a number of contractual, E&O, and other issues (and pitfalls) to consider, let's focus on compensation. How much should you get for placing, referring, servicing, etc. such accounts? Let our agency management gurus give you some tips....
Can an agency that fronts money for an insured cancel the policy when the insured refuses to pay? If you think the answer is 'yes,' then you'll definitely want to read this article!
An insured received her commercial property renewal and paid it in full. She then received a cancellation notice. According to the insurer, they failed to bill the insured three years ago for a policy and wanted the premium for that term. She refused to pay it so they are cancelling the current policy for nonpayment. Can they do this?
Throughout the soft market, rates dropped and companies endured increasing losses as the price to pay for cash flow and market share. Now carriers are reacting to loss ratios much more intensely. Reserves will be adjusted and agencies will be targeted for action as carriers try to reserve their shrinking capacity for agencies that have low loss ratios. In this article, you'll learn what agencies can proactively do to maintain their favorable relationship with their carriers.
An insured's account renewed in May, but the policies were not delivered until June. The agent believed that late delivery made these policies June items, payable to the insurer by August 15, 45 days following closing of the June account. However, when the insurer didn't receive payment on the policies by JULY 15, they put out direct notice of cancellation to the client! Is that right?!
CLUE reports, like MVRs, have become a staple of most personal lines underwriters. However, what happens when someone discovers an error on a CLUE report? What are the ramifications for declining an account based on inaccurate information and what can the consumer do to get the problem corrected?
By now, most property and casualty insurance agents are aware that a majority of their customers (approximately three-fourths) actually benefit from underwriters using their credit behavior to set insurance policy rates.  However, when asked the reasons why, very few can articulate them.  A lack of knowledge and understanding, along with the voices of the remaining one-fourth of customers, has resulted in a growing number of complaints to state Department of Insurance (DOI) divisions over the past few years.
Here are the components of a Disaster Recovery Program (DRP) that was unfortunately missing in New Orleans and was woefully inadequate in the State of Louisiana. As critical as the attack on New York was on 9/11, the comparison of Mayor Giuliani’s leadership and coordination and that of the lack of the same in New Orleans is simply stark.
An insured makes a payment by personal check on a policy that is scheduled to cancel for nonpayment. The check is received before the cancellation date and the company issues a reinstatement notice. Three weeks later, the insured and agent receive another cancellation notice stating that the policy is cancelled retroactively to the previous cancellation date because the check was returned 'NSF' by the bank for 'insufficient funds.' Is this correct? For the answer and an important message about the value of your state association, keep reading....
The time that your staff spends on collection is much more expensive than the returns. If you establish a procedure that suggests that payment will be made by the agency if the insured does not pay a direct billing, legal precedent exists for an assumption of the same expectation in the future. A warning to agents who are direct billed but continue to advance money on behalf of personal lines clients -- Stop Now!
Do your employees spend, what seems to you to be, an inordinate amount of time on the internet at work...whether during business hours or their personal time? Ever wonder what they're doing? Ever wonder about the nature of the emails they send or receive? To control net use (and abuse), you need a formal policy.
Our Tennessee association has produced an outstanding new disaster plan that includes information on earthquakes, inland storm systems and flooding, fire conflagrations, transportation and industrial accidents, terrorism, and other types of disasters. IIABA members can now download this plan and adapt it for use in their agencies.
When a commercial lines client requests an agency to run an MVR on a new employee in conjunction with adding him/her as a driver to the BAP, the agency may be able to do so without the written permission of the employee. That is, under the FCRA, Section 604, it's legal if necessary to 'the underwriting of insurance.' However, that doesn't mean you can do it....
A respected client of the Agency Consulting Group recently analyzed the impact of direct bill income on the working capital and asset base of their independent agency. They found it difficult to maintain a 'healthy' 30 day working capital requirement to satisfy financial institutions because of a conversion of much of its premium base from agency bill to direct bill. Our investigation revealed a hidden asset...
April 14, 2004, that's the compliance date for the HIPAA Privacy Rule for small health plans. A small health plan is defined as a plan that spends less than $5,000,000 in premium annually if fully insured, or pay less than $5,000,000 in claims annually if self-insured. Are you in compliance?
Buried in the Health Information Technology section of ARRA was legislation that will forever change how your agency handles information for your employee benefits clients. Following the HIPAA Privacy and Security Rules is not optional. As state attorney generals become more aware of how to pursue noncompliance by business associates the greater your chance of an audit.
Has your agency started the implementation of security policies and procedures to meet HIPAA Security Rule requirements? What about other laws for essential security requirements? Have you developed your security training plans? Just what are these requirements? The answer comes right from the final security rule....
April 14, 2004, that's the compliance date for the HIPAA Privacy Rule for small health plans. A small health plan is defined as a plan that spends less than $5,000,000 in premium annually if fully insured, or pay less than $5,000,000 in claims annually if self-insured. Are you in compliance?
Following up on her original article on HIPAA, Judi Newman provides more information about the nature and scope of HIPAA implementation that will help you better understand the compliance implications and how you can explain them to your staff and clients.
Just because an independent agency places more business with one company rather than another does not mean anything nefarious is occurring such as unethically steering business. Even if the insurance company benefiting the most pays the most, this does not mean anyone is doing anything wrong. But to people willing to jump to conclusions, it could appear that way.
An agency has had several requests from mortgage brokers and lawyers asking for binders showing the new mortgagee without having set closing dates on new loans. They insist that the binder and not an Evidence of Property Insurance form be provided before they will set a closing date. Do they have an insurable interest in the property and is a binder appropriate prior to closing??
Some independent contractors sell L&H insurance and split commissions with a bank-owned agency. The agency does not get a copy of any of the documentation, from application to policy. Servicing is done solely by the insurer. Because of the way business is done, there is nothing that is recorded on the agency management system (no upload, no download, no nothing). Does this present a problem?
The insured is sued for damages arising out of an occurrence that took place many years ago. The insured is unable to find the policy in force at that time, so the insurer says they won't respond. What do you do when a policy is lost?
Do you ever call customer service for a company and get a message that the call may be recorded or monitored? Most likely this is a quality control function and something you may do in your own agency to measure your customer service or E&O exposure. Keep in mind that there are legal ramifications of doing this and certain caveats to consider.
New and renewal policies should be reviewed thoroughly for completeness and accuracy before delivery to the insured. However, at certain times of the year when there is a heavy backlog, this could mean that insureds get their policies months into the policy period. So, how do you balance quality with responsiveness, particularly given the importance of the insured reading his/her policy forms prior to loss?
Do you want to provide superior customer service to your clients?  Do you want to improve productivity?  These are proven results that you too can achieve by implementing the Real Time features available today. In this article, noted agency workflow expert Laura Nettles discusses the importance of rethinking agency workflows to incorporate Real Time. Laura makes a very convincing profitability case for agencies to implement Real Time NOW.
One of your insurers has initiated a surcharge program for renewals of insureds who have had even a single claim in the past three years. Is this legal? Is it equitable? What do you think? To find out what our faculty think about this, read their heated debate.
An insured requested that a second location be removed from his policy. He made the request on 09/29/06. The second location was sold 06/24/04 and he requested that it be removed effective 06/24/04, the date he sold the property, with a return of premium. He presented court house records showing that the property had been sold on that date. The insurer is only willing to remove the property effective 07/12/06 which was the current policy's renewal date. Who's right and why?
Some folks from the CIRMS group discussed below presented a paper at a recent seminar on Telework Risks and Liabilities. Within that paper was a sample Office Technology Policy. They have graciously allowed me to share it with you for your review and possible use. This is just another example of the wealth of information shared within this Yahoo! group beyond just the insurance and risk management discussions of community associations.
When proof of insurance is requested, which is most appropriate, the ACORD 27 - Evidence of Property Insurance or the ACORD 75 - Insurance Binder?
In the midst of the credit crisis and economic turmoil, some very important accounting standards are coming to the forefront.  Accounting is almost as boring as IT for most agency principals, but it is worth paying attention because the impact on this industry and your opportunities are significant.
When automobile claims come in we always talk to the insured about the benefits of self-insuring the loss if they can, but more and more we are seeing lawsuits being filed for claims sometime down the line. If the insured reports the claim to us (the agency) and we note their account, but they decide to self-insure (not report the claim to the insurer), are we in any way jeopardizing their coverage? Do you think this agency is jeopardizing someone's coverage?
Almost a year ago, we ran an article called '13 Caveats in Using E&S Markets.' While there are issues that agents should be aware of when using E&S markets, in an increasingly hard market, we think it's time we pointed out the many pluses that E&S markets bring to the table. To do that, we polled our faculty and a number of agents and risk managers from around the country and the world.
With more stringent underwriting that has resulted from a proliferation of mold and water damage claims, agents and others are facing increased demands for background reports when real estate is purchased or an insurance application made. However, providing this information (commonly through CLUE reports) can be hazardous to your agency's E&O health.
We've recently received several questions about trust accounts. How does an agency with an internal premium finance program know if it is in or out of trust? Can a trust be held in an interest bearing account? In this article, we'll take a look at some of these issues. As other arise, we'll be updating the article.
Recently, our 'Ask an Expert' service received a simple, one-sentence question: 'How do you get your submissions noticed by an underwriter?' In this article, we'll give you some tips from our expert faculty, underwriters, and fellow agents on how to submit an account that floats rather than sinks.
Insureds, especially commercial clients who hire drivers, often ask their agent to furnish them with copies of MVRs on current or prospective employees. Under the Fair Credit Reporting Act (FCRA), there are strict guidelines governing the release of such information...and potentially serious penalties for violations (not to mention the exposure to civil suits).
Increasingly, we are receiving inquiries from agents wondering about the impact of HIPAA on their operations. Well, if you thought Gramm-Leach-Bliley was a pain, in the words of Al Jolson, you ain't seen nothin' yet. Although we're only a few months away from implementation, very few agents understand what HIPAA means to them and their clients, and how serious the penalties can be for noncompliance.
Here's what we do know about HIPAA:  _____Here's what we don't know about HIPAA:  ∞This article includes links to authoritative and otherwise web sites that may answer many of your questions about HIPAA compliance.
We all know that binders have historically been issued for 30-day terms. Why is that and can a binder be issued for longer terms, perhaps even as long as the 12-month policy period? In this article, our faculty will discuss the historical significance of this 'rule' (as best as we know it), along with some caveats to consider.

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