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Aug 28
Insurance is a Commodity ... Until You Need To Use It

call-center-4012099_1280.pngPatrick Wraight is out with an important point about the downside of "fast, cheap, and easy insurance purchasing." He describes the case of a driver injured by another at-fault driver and who was let down by both her own carrier and that of the other driver.

This is the unintended consequence of self-service, fast, cheap, and easy insurance buying. When people are buying insurance, no one thinks to themselves that they are going to have issues if there is a claim. In fact, most people think that they’ll never have a claim so that never enters into their thought process. They are simply looking for insurance that they can afford. They don’t consider what may go into the fast and cheap parts. GEICO and Progressive achieve fast and cheap by taking that local agent out of the loop. I know that they have local agents, but that’s not where the lion’s share of their business come from.

That means that in every interaction, the customer has to get online, or call into a call center, to reach someone who doesn’t know them, doesn’t care about them, and doesn’t have any reason to extend themselves for them. The customer is just another voice on the other end of their phone. Whether the customer wants insurance now, or they want their claim paid now, they’re just another voice in the representative’s ear. Either way, when the call is disconnected, the representative will note the file, move it to the proper queue, and take the next call.

In the end, the person who suffered damage (both bodily injury and property damage) is still not made whole. They aren’t indemnified. They are waiting on the promise of the insurance company that told them they could save 15% in 15 minutes and on the insurance company that told someone else to name their own price.

This is what you get when you go after fast, cheap, and easy.

Those TV commercials that make us laugh don't seem so funny when something like this happens. There's more to insurance than price and entertainment. This is a message we all need to hammer home over and over to consumers, whether they want to hear it or not. The only way the message will get through is if it we repeat it until we turn blue: Cheap, fast insurance that doesn't protect is too expensive.

Aug 26
Two Minutes With Tim - Car Sharing

​If you have a New York personal auto insurance policy, in most cases you automatically have coverage for damage you do to a vehicle you rent. What about if you get a vehicle from a car sharing service? Does the insurance apply to that car? Watch the video to find out. Spoiler alert: Keep your debit card handy.

Aug 23
New Rules in Effect for LLC Political Contributions

imageEffective January 31st of this year, Limited Liability Corporations (LLCs) are subject to new rules when making political contributions. These rules affect contributions to state and local (but not federal) candidates and political action committees. As such, any agency or brokerage incorporated as an LLC is subject to these new requirements when making a contribution to Big I NY's Independent Agents Political Action Committee (IAPAC).

  • An LLC/PLLC is limited to a total of $5,000 in political contributions in a calendar year. Note this is a limit on all contributions, not per candidate or 
  • All contributions made to a campaign or political committee by an LLC/PLLC must be attributed to each member of the LLC/PLLC in proportion to the member's ownership interest in the company. 
  • By December 31st of any year in which an LLC/PLLC makes a contribution or expenditure, the LLC/PLLC must file with the New York State Board of Elections a statement of identity​ of all direct and indirect owners of the membership interests in the company and the proportion of each direct or indirect member's ownership interest.

Contact Scott Hobson with any questions.

Aug 19
On Mary's Mind - Agency Continuity and Planning

By Mary Byrnes​AAI-M, AU​, Education Department​​

Since the days in the early 80s when I went to work for an agency, things have really changed. The fax machine that we all marveled at and the first computer that we used only for proposals are both now a long ago memory.  These days, there are so many moving parts to an agency, and some of those tried and true ways have gone by the wayside.

As I've mentioned many times, we get a LOT of questions about licensing. Most are along the lines of how do I does this or what does this mean. More often than not, we say, “Let's take a look at the DFS license database".  While we do that we've started to at the same time, take a look at the sub-licensees of the LLCs and Corporations. When we see only one sub-licensee, we mention to the sole sub-licensee about the need to really think about the need to plan for the unexpected.  We don't even need to consider high drama here.  But what happens if the sole sub-licensee is in an auto accident, has a health condition that prevents them from their usual role in the agency.  It could be any number of things and most of them are not of a permanent nature. 

We've seen large agencies where the sub-licensee moves on and suddenly that agency has no one as a sub-licensee.

​Our message is always about the preservation and smooth running of your agency.  So when we encourage the addition of an additional sub-licensee it is always with that thought in mind.  ​

As long as we're in a “what if" frame of mind, does your agency have a plan on how everyone will respond or how you'll be available in the case of an emergency or an inability to get to the office.  We are approaching the anniversary of the 1998 Labor Day Storm that rolled through the Syracuse and Central New York region.  This storm caused widespread damage to some huge buildings and homes alike.  Road were closed, there was no electricity for days.  I'm sure that you too have a weather event in your own community that sticks in your head, whether it's the extreme damage of Superstorm Sandy, ice storms along the North Country, western NY snowstorms, etc. Then there's the devastation of something as awful as 9/11.

These days, when everyone wants help NOW, you want to be able to respond even if you can't make it to the office.  You need a plan and Big I NY members have some guidance in setting one up.  It doesn't have to be fancy or crazy.  Check out the ACT (Agent's Council on Technology)  Disaster Plan site for some really helpful hints.  Take a look at the ACT site to plan for that snowy, windy, rainy, icy day.

Aug 16
'Best Interest' Rules for Annuities Now in Effect
As you may be aware, Big I NY and PIANY filed a lawsuit against the New York State Department of Financial Services (DFS) in November of 2018 over an amendment to Regulation 187. We argued that the amendment sets a troubling new standard of “best interest” for life insurance sales, and improperly alters the agent/broker-customer relationship. We are disappointed to report that the court has ruled to uphold the amended regulation.

We remain concerned that this will have negative impacts on New York’s insurance-buying public, and that this amendment will restrict open, honest discussions with our clients—thus weakening the life insurance market and ultimately harming consumers.

Big I New York and PIANY – who collectively represent thousands of insurance agents and brokers across New York State – are carefully considering all available options.

New rules creating a "best interest" standard for annuity sales became effective August 1, 2019. Insurance carriers, agents and brokers must now comply with the new rules for all transactions related to annuity contracts. The same rules will apply to life insurance sales starting on February 1, 2020.

Visit Big I NY's Life Insurance & Annuities Best Practices (Reg 187) resource page for more information on compliance (you must be logged in to view this page).

Contact Scott Hobson if you have any questions.
Aug 16
​Governor Signs New Sexual Harassment Provisions Into Law

imageThis week, Governor Cuomo signed sweeping sexual harassment legislation into law. The legislation includes several significant changes affecting employers in New York.

Elimination of the “Severe and Pervasive" Standard: 

Sexual harassment no longer must be demonstrated to be “severe and pervasive" to be legally actionable. The new law re-categorizes sexual harassment as “unlawful discriminatory practices," and allows for legal action when an individual is subject to “inferior terms, conditions, or privileges of employment" due to their membership in a protected class (age, race, creed, color, national origin, sexual orientation, gender identity, military status, sex, disability, predisposing genetic characteristics, familial status, familial status, marital status, domestic violence victim status). Effective October 11 2019.

More time to file a claim:

The statute of limitations for sexual harassment claims in lengthened from one year to three. Effective August 12, 2020.

Non-disclosure agreements affected:

Prohibits non-disclosure agreements from including language restricting an employee from filing a sexual harassment claim. Effective October 11, 2019.

Notice provided to employees:

Requires that all employers must provide their employees, upon hire and at the time of the annual sexual harassment training, notice containing the employer's sexual harassment policy and information and the information presented at the sexual harassment training. Such notice must be in the employee's primary language. The Commissioner of Labor will create templates of the model sexual harassment policy in various languages. Effective immediately. 

Aug 14
NYSDFS Floats Rules For Health Insurance I.D. Cards


Health insurance identification cards will have to provide specific types of information and might not be physical cards at all, if regulations proposed today by the New York State Department of Financial Services (DFS) take effect. The proposed regulation on the content of the cards was published in the August 14 edition of New York State Register, the official publication of all state agency regulatory actions.

The proposed rule applies to:

  • Insurers licensed to write accident and health insurance in New York
  • Non-profit medical and dental indemnity corporations or health and hospital service corporations
  • Municipal cooperative health benefit plans
  • Health maintenance organizations
  • Student health plans

They will be required to provide health insurance I.D. cards within 30 days of the effective date of the individual's coverage under an accident and health policy that covers comprehensive hospital, surgical, and medical care. The cards must be issued to the primary insured and to that person's dependents who are over the age of 18.

The cards must be mailed individually to the primary insured and each dependent over age 18. If the dependent resides with the primary insured, they can be mailed together.

In a nod toward modern technology, the rules allow the cards to be in electronic format if the primary insured or dependent consents. This would permit insureds to store their health insurance information on their smart phones.

The rules require cards to provide at minimum the following information:

  • Primary insured's name and I.D. number
  • Each insured dependent's name and I.D. number (if applicable), either on the primary insured's card or on a separate card
  • The insurer's full legal name or its licensed name
  • A statement that the insurer provides and insures the coverage
  • The name of the insurance product or plan
  • A statement as to whether coverage includes out-of-network benefits
  • The names of any health care provider networks and formularies that apply to the product or plan. These names must also be posted on the insurer's website, and the names on the card and the website must match
  • Phone numbers where the insured or health care provider can readily obtain assistance; confirmation of eligibility; verification of benefits; and prior authorization of health care services, if applicable
  • Insurer's web address
  • Applicable annual or plan year deductible
  • Co-payment information that applies to participating health care providers for primary care office visits; specialist office visits; urgent care; and emergency room visits

If any of the information required to be on the card changes, the insurer must provide new cards to the primary insured and dependents over age 18 when the policy or plan renews. Cards issued by an administrator of a self-funded plan must state that the coverage is self-funded and not provided by the insurer.

This regulation has been proposed by the DFS and is not in force yet. The department will accept public comments on the proposal until October 13, 2019.

Aug 12
On Mary's Mind: Active Shooter Coverage

By Mary Byrnes​AAI-M, AU​, Education Department​​

The recent news of the Gilroy Garlic Festival, El Paso & Dayton mass shooting incidents has sent us all reeling and left with so many unanswered questions.  The horrors of the individuals and families impacted by these events are unfathomable.  ​

These incidents and the ones that have come before them bring the question of coverage to the forefront for not only our industry but also for insureds who want coverage.  We are starting to see “Active Shooter Coverage" becoming available.  The most interested in coverage are likely to be places where there are large gatherings of people.  If you provide coverage to schools, churches, special events, municipalities, etc. it's not outside of the realm that you'll be questioned about the exposure or coverage.  These types of insureds won't just be looking for the coverage, but they'll probably also be interested in the risk management features of preparedness and crisis management if it's ever needed.

Would this exposure be covered by the CGL and umbrella?  They may be or perhaps not. The trigger on much of the coverage on these forms is “legal liability" of the insured.   Was the insured negligent in some way or did they conduct their business in a reasonably prudent manner?  Many of the types of operations have policies designed for that type of entity specifically and they will vary from carrier to carrier. That question cannot be answered definitely.  Defense may be provided as the duty to defend is usually provided if there is a chance of legal liability on the part of the insured.    

Will the Terrorism Coverage apply?   Terrorism is defined and acts are declared as acts of terrorism at the Federal level (TRIA).

The best advice to gauge whether coverage applies or not is to become very familiar with the policy forms and endorsements. As you're aware…the ifs, ands, buts and howevers all have a world of meaning. 

If you have an insured who is interested in active shooter response training, New York State, Homeland Security and Emergency Services has a training program that is conducted in the Utica area.  They have a train the trainer workshop “Active Shooter Exercise Development Workshop".  There is no fee for the course.  They state, “Participant Audience have come from but are not limited to: Law Enforcement, Elected and Appointed Officials, Schools, Houses of Worship, Entertainment Venues, Health Care, Fire Services, Emergency Management, Emergency Medical Services and Hospitals. Attendees must also be a U.S. citizen or have prior approval to attend. The New York State Division of Homeland Security and Emergency Services (DHSES) reserves the right to determine eligibility for this course."  Under the Lodging portion of the info, it says that they provide lodging for public sector personnel with some specific criteria listed.  Their calendar is available if you have an insured that might be interested.

It was never anticipated that this would be a subject that we would ever have to tackle.  On that sad note, I hope that this provides you with some answers to help you guide your insureds.

Aug 12
Reminder: It's Peak Hurricane Season

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Lynne McChristian of the Insurance Information Institute has an important reminder today:

Peak hurricane season has arrived. ...

Mid-August through the end of October historically is when most hurricanes form. Remember HIM? Hurricanes Harvey, Irma and Maria made landfall between mid-August and the end of September in 2017. Two Category 4 storms and one Category 5 occurred in a matter of weeks in a season predicted to be slightly above average.Last year’s Hurricane Michael hit in late October. While this year’s latest prediction is for a “near-average season,” hurricane researchers will tell you that it only takes one hurricane making landfall near you to break the law of averages.

To that list, I would add:

This can be a very dangerous time of the year, and you don't have to be located near the Atlantic Ocean to feel the impact of a major storm. Insurance agents, this is an excellent time to contact your clients about storm preparedness. That message makes a good impression on your clients because:

  • It shows you care about their well-being
  • You don't benefit financially; the money they spend to get ready will not go to you
  • It's not an attempt to sell them anything

The northeast does not normally experience the destruction from storms that our fellow citizens in the south face, something for which we can all be grateful. However, damage to our properties and injuries and deaths are very real possibilities. A smart phone app can't help your clients prepare, but you can, and it's a great way to prove your worth to them.

Aug 09
Reminder: 'Best Interest' Rules For Annuities Now In Effect

​Big I New York members are reminded that new rules creating a "best interest" standard for annuity sales are now in effect. The same rules will apply to life insurance sales starting next winter.

The changes to New York Insurance Regulation 187 require insurance carriers, agents and brokers to adopt a number of procedures and practices to act in the "best interest" of the client with regard to annuity and life insurance transactions.

Effective August 1, 2019, insurance carriers, agents and brokers must comply with the new rules for all transactions related to annuity contracts. However, they are not required to comply with regard to life insurance transactions until February 1, 2020. Visit the Life Ins. & Annuities Best Practices (Reg. 187) page in the Answer Center of the Big I New York website for guidance and tools you can use for compliance.

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