On Thursday, in a stunning unanimous decision, a New York Appellate Court sided with Big I NY, ruling that the 2018 amendment to Insurance Regulation 187 (AKA, the “best interest regulation) is unconstitutionally vague. Big I NY contended that, among many other issues, the regulation is unclear on what specifically producers must do in order to comply. The ruling is the latest development in Big I NY's ongoing legal challenge to the regulation, which began shortly after the regulation was adopted in 2018. The DFS is has 30 days to decide if they will appeal the ruling to the state's highest court, the New York Court of Appeals.
On Wednesday, our campaign to make the auto photo inspection voluntary at the discretion of carriers achieved a major milestone when it cleared a vote by the Assembly Insurance Committee. This is the first time since 2014 the bill has passed a committee vote. The bill advances to the Assembly floor, where it must be voted on by the entire Assembly, and also pass a committee vote and floor vote in the Senate, before being sent to the Governor. The committee vote followed a call-in day where Big I NY member agents called insurance committee members and urged them to vote in favor of the bill.
Contact Scott Hobson with any questions
The next great financial crisis could come from a cyber attack. At least, that's according to New York State Department of Financial Services (DFS) Superintendent Linda Lacewell in a statement regarding DFS' recent report outlining its investigation into the SolarWinds attack. The report summarizes the attack, the response by DFS-regulated companies and key measures to prevent future events of a similar nature.
Cyber insurance can serve as “the final safety net" for your agency in the worst-case scenario that something happens to you. It cannot act as a replacement for the cyber security controls that you should be implementing. Rather, it is there to provide a financial safety net, as well as breach response, to help you through the doomsday scenario.
Under the revised National Flood Insurance Program (NFIP), 3.8 million homeowners are expected to see their insurance costs increase, according to ValuePeguin.com. A majority of policyholders — 80% or more — in Hawaii, Texas, Mississippi, West Virginia, Florida and Louisiana are expected to see premiums increases, the site reported. Additionally, more than 10,000 households in Florida, Texas, Louisiana, New Jersey and New York are projected to experience the highest price increases ($240 or more annually).
The construction segment has endured many challenges during the COVID-19 pandemic, from supply chain disruptions and material shortages to social distancing requirements and ill workers. However, 2021 offers a silver lining as the economy rebounds, with 84% of owners expressing optimism about the strength of this year's peak season and their businesses' preparation to meet increased demand.
Coronavirus long-haulers have been in the news for some time now, with symptoms from the virus stalking them for months after they've contracted it. This in turn has had implications for workers' comp claims, but what's coming down the pike for such claims is yet to be determined.
According to the U.S. Bureau of Labor Statistics, over the next few years, approximately 400,000 employees are expected to retire from the insurance industry. The issue is compounded by a lack of interest from millennials, who are choosing careers in technology or health sciences rather than insurance.
In the pandemic era, small businesses are finding more negotiating power than ever before. If your agency is re-negotiating a lease, it may be easier to get cuts on things like maintenance costs and utilities, instead of the rent itself. Extending to a longer-term contract may also work in your favor.
Ransomware is a dominant source of concern in the cyber insurance community today. In recent years, there has been a significant uptick in the frequency and severity of ransomware attacks, impacting businesses of all sizes and in all sectors. Hackers have grown more sophisticated and targeted in their attacks, aiming for larger organizations that can afford bigger ransoms. As a result, cyber insurance claims have exploded in severity.
InsurBanc—the bank established to serve our community—is 20 years old. It opened in 2001 with an initial investment from the Big “I" and capital from the W.R. Berkley Company.
The Big “I" created InsurBanc to help independent agents compete with bank entrants into the insurance distribution space.
The new site is packed with tools for you, it's much easier to navigate and will help you propel your agency forward.
Today, we achieved a monumental victory for independent insurance agents with a unanimous ruling that the controversial “best interest” standard (the first amendment to Regulation 187) for life insurance and annuities imposed by the NYSDFS is unconstitutionally vague. While other member associations backed down over the course of this fight, Big I New York has continuously challenged the amendment since November 2018.
[Read the complete text of the ruling]
“Today’s ruling is a victory, not just for the state’s independent insurance agents and brokers, but for our customers,” said David MacLachlan, CPCU, Big I NY Chair of the Board. “This regulation has been virtually impossible for brokers to meaningfully comply with, raising concerns that many would stop selling life insurance and leave customers without the trusted advice they need.”
While the trial court initially ruled in favor of the NYSDFS, we remained concerned and appealed the ruling in March.
Lisa Lounsbury, CAE, President and CEO of Big I New York, said, “As advocates for their customers, independent insurance agents share the NYSDFS’s interest in protecting consumers; but the so-called ‘best interest’ regulation did the opposite. It provided little if any protection beyond the already robust laws of conduct and accountability for insurance agents, and actually harmed consumers by reducing access to affordable life insurance products and the trusted advice of an agent.”
Big I New York is represented by the firm of Keidel, Weldon, and Cunningham of White Plains. Jim Keidel, the association’s counsel, said, “I am very pleased with the court’s unanimous decision finding that the amended Insurance Regulation 187 is unconstitutional. It is apparent from reading the decision that the judges took the time to understand the serious issues and problems that this regulation creates.”
When it comes to standing up for you and your customers, Big I NY always has your back.
The New York State Workers Compensation Board has announced that the maximum weekly Workers Comp benefit will increase in July. The new maximum weekly benefit will be $1,063.05.
Under New York Workers' Compensation Law, the maximum weekly disability benefit must be adjusted every year on July 1 to equal two-thirds of the statewide average weekly wage. According to the announcement, the New York State Department of Labor recently reported to the state Department of Financial Services that the average weekly wage in 2020 was $1,594.57.
The new maximum applies to workers' compensation claims with dates of injury during the period from July 1, 2021, through June 30, 2022. The current maximum is $966.78.
By Jim Lombardo, CPCU, AAI, AIM, MBA, AVP of Learning & Development
Life Is so unpredictable, I stopped trying to predict it a long time ago. When I made that decision, a wonderful thing happened- my stress level went down! Now, it didn’t go away completely, and I still prepare for what might happen, but I have learned not to get upset if things don’t always go my way.
For example, I had a big meeting coming up with a new group of people whom I never met before- I was warned about their personalities, their quirks, their potential expectations- I spent hours researching and preparing and was driving myself nuts. Then I said to myself, “Jim, you have been having meetings with new groups of people all your career and things always work out- people are just people”.
So, I did some research. I, of course, wanted to know a little about their organization and learn a bit about each person (boy, the internet is a treasure trove of information).
I went to my meeting and within three minutes I knew all would be ok.
I share this with you for three reasons - I suggest you try it and you will see immediate stress reduction. Secondly, when you focus less on what may go wrong and more on genuinely trying to start new relationships you will be rewarded and lastly, life is too short!! Have fun while you work.
That being said, you DO have to prepare for your CE – here are some upcoming classes you may want to learn more about.
E&O Risk Mgmt: Updated & Meeting the Challenge of Change
VU Why Certificates of Insurance - Just Why?
AAI 81 B Personal Insurance
Earlier this week, I and members of the Big I NY board and staff joined employer groups from virtually every sector of the economy at a press conference to voice concerns with the “NY HERO Act", a bill mandating new workplace airborne infectious disease rules and regulations. The bill has now passed both the Senate and Assembly, and will soon head to the Governor's desk.
The intent of this bill is noble – protecting workers from airborne diseases. But the reality for employers, particularly small businesses, is more crushing red tape, bureaucracy, and liability.
Broadly speaking, the bill mandates the Department of Labor (DOL) to implement sweeping regulations requiring workplace plans, standards, protective equipment, and responses to “airborne infectious diseases", which includes not just COVID-19, but potentially any airborne disease such as the flu. The regulations could end up mandating costly equipment upgrades, disinfection procedures, modifications to work hours and schedules, and employee health screenings, to name a few. Troublingly, the bill allows any employee to file a civil suit against their employer for any alleged violations of the exposure plan.
What is perhaps most disappointing with this bill is the extent to which small businesses – those who will bear costs of compliance most heavily - were shut out of the process. No public hearings were held. The bill was rushed through, with only cursory changes. With only one exception, the bill draws no distinction between a national retail chain and an insurance agency with eight employees. This will contribute to our already dismal business climate and hamper our economic recovery.
To be clear: small businesses rose to the challenge of COVID, and made the health and safety of our employees a top priority. This was evidenced in the data that the Governor himself frequently touted – workplace transmission accounted for less than 5% of COVID cases. Businesses are willing and ready to do our part to protect health and safety; our ask was simply for a seat at the table. To quote another business leader present at the press conference, this bill is, “…a slap in the face to every business that has operated during the pandemic or is operating now."
First and foremost, I want you, our members, to know that we had your back on this, and will continue to do so. Big I NY will work with our allies in the employer community to urge the legislature to consider reasonable amendments, and if the bill is enacted, provide feedback on the DOL regulations. Second, I want to call attention to the heightened urgency that we face in Albany to defend our industry and our customers. If this bill is any indication, Albany's indifference and hostility toward small businesses is on the rise, and your membership in Big I NY is more important now than ever. Thank you for your continued support.
David MacLachlan, CPCU
Big I NY Chair of the Board
Dominick Falcone Agency, LLC
We want to reaffirm to those of you who have limited exemptions under the New York cybersecurity regulation that it does not require you to perform network penetration testing.
Some members have reported to us emails sent by a cybersecurity services vendor. These messages stated that the New York State Department of Financial Services (DFS) is requiring all entities covered under the regulation, Cybersecurity Requirements for Financial Services Companies, to perform regular penetration testing of their computer networks. The vendor has said that DFS is requiring covered entitites to do this, regardless of their size.
The regulation defines "covered entity" as "any individual or any non-governmental entity operating under or required to operate under a license, registration, charter, certificate, permit, accreditation or similar authorization under the (New York) Banking Law, the Insurance Law or the Financial Services Law." Anyone with a New York insurance agent or broker license is a covered entity.
A penetration test is "a simulated cyber attack against your computer system to check for exploitable vulnerabilities." Typically performed by companies' internal information technology (IT) departments or outside cybersecurity consultants, the average cost of these tests is between $10,000 and $30,000, depending on the size and complexity of the network.
Section 500.5 of the cybersecurity regulation does require covered entities that do not continuously monitor their networks for intrustions to perform "periodic penetration testing and vulnerability assessments." However, Section 500.19 states that covered entities with fewer than 10 New York employees, less than $5 million in New York revenue, or less than $10 million in gross assets are exempt from the requirements of Section 500.5. If your agency meets any one of these three criteria, the regulation does not require you to perform penetration testing.
We have found nothing on either the DFS website nor communications from DFS indicating that this has changed. Since the regulation took effect on March 1, 2017, DFS has changed it once - to extend the annual deadline for submitting the certification of compliance from Feb. 15 to April 15.
Visit www.biginy.org/cyber for more information on how to comply with the regulation.
The Basic Cybersecurity Controls That Every Company MUST Have
When it comes to cybersecurity, don't underestimate the importance of basic controls. You and your employees are exposed in the pandemic-induced work from home environment to new cyber risks, raising the stakes for cyber best practices and education. Cyber criminals seek out the lowest hanging fruit. They're attacking organizations without the most basic controls, such as those with insecure remote desktop protocol (RDP) and those that lack multi-factor authentication (MFA) for remote access or administrative access into corporate networks. Make sure your agency is promoting basic cybersecurity measures.
Employee benefits offerings that were important a year and a half ago might not seem as important to employees now, and benefits they had never even thought about might now be at the top of their wish list. Be sure you are in tune with your employees so that you can retain those that are of value to you.
As more individuals receive vaccines for COVID-19, businesses have begun to make the shift from a work from home environment and are now adjusting to a hybrid that blends remote and in-person engagement. There have been four issues affecting employment practices liability: the coronavirus, social inflation, a rise in biometric claims and an increase in sexual harassment claims. Are you adequately covering your commercial clients?
Email marketing may seem like a black box for you, especially if you don't have much experience with launching such campaigns, but there are a few key steps and tips that can help demystify the process.
Trusted Choice has marketing materials you can start using today. Get started.
From homeowners to auto coverage to health and life insurance, cannabis use may not have automatic repercussions, but there certainly are areas where pot can sneak in to affect personal lines clients' premiums. Be sure you are educating your staff and your policyholders on these risks.
Big “I" Chairman Jon Jensen presented the State of the Association address to Big “I" Virtual Legislative Conference attendees, offering hope and encouragement after what can only be described as a very difficult year.
Sen. Joe Manchin (D-West Virginia) encouraged congressional leaders to reach across the aisle to support America's economic recovery and return Capitol Hill to its founding principles.
“Despite what you may see on Twitter, TV and on cable news with all the screaming and yelling, there's still plenty of us that are focused on where we can get agreement and where we can find common-sense solutions," Rep. Josh Gottheimer (D-New Jersey) said.
Sen. Rick Scott (R-Florida) discussed how federal overreach by the Biden administration will negatively impact small businesses and the economy's recovery from the coronavirus pandemic.
Rep. Blaine Luetkemeyer (R-Missouri) warned that for small businesses to continue to recover, stimulus via the federal government should be temporary.
On April 20, the startup insurance company Lemonade announced its plans to launch Lemonade Car within the year. Interested customers can register online now for updates as the company rolls out the coverage at a later date.
Join this complimentary webcast for a deep dive into the research, while hearing about real world examples from agents who are winning with digital. During the webcast you will learn how to:
- Embrace digital transformation successfully through research and case studies
- Identify which specific digital capabilities to implement to drive revenue growth
- Learn what high growth agencies are prioritizing in 2021.
There's no fee to attend.
Read this new blog post
from Tim regarding “Lessons From Recent DFS Cybersecurity Enforcement Actions”.
Learn about CATALYIT
– All the agency tech guidance you need … in one place !
Get your nomination in now
for an agent under age 40 who has displayed outstanding commitment to their clients, their agency and their industry.
for our 2021 E&O Loss Control Seminar. There will be some acting of the highest quality by some of your friends at Big I NY – you don’t want to miss this.
Ditch an email
for a hand-written note. This idea came to me from Jim Petrie at Haylor, Freyer and Coon and I think it’s just what we need in this electronic age.
A recent survey of nearly 600 U.S.-based independent agents from Liberty Mutual and Safeco Insurance sought to understand how independent insurance agencies are evolving to meet new expectations. The results, published in the “Rise of the Digital Insurance Agency" report, found that digitally-savvy agencies grow an average of 60% more than their less digital counterparts.
See marketing materials from Trusted Choice here.
During the first quarter of 2021, commercial property & casualty rates saw an overall gain of 7%, according to MarketScout Corp., which reported umbrella, professional liability and D&O all saw double-digit increases. The best defense is a good offense, so talk with your customers now so they are not surprised at renewal.
Across the country, businesses are reopening in some fashion, but going back to work after months of operating from home will look very different. As you and your staff navigate returning to work during the pandemic, there are multiple issues to be considered as you balance the needs and concerns of your employees against those of your customers and clients.
Nearly 40% of U.S. motorists are somewhat or very concerned about cybersecurity and safety of connected and autonomous vehicles, according to a survey from Hartford Steam Boiler (HSB), a Munich Re division. Additionally, 35% said they feared a virus, hacking incident or other cyberattacks could damage or destroy a vehicle's data, software or operating systems.
Researchers compared the 50 states across the three tax types of state tax burdens — property taxes, individual income taxes, and sales and excise taxes — as a share of total personal income in the state and New York tops the list.
A panel of experts examine everything from SolarWinds, to the COVID-19 pandemic, to the best prevention methods and tips for you.
The firming of the cyber market is having a big impact you and your customers. Not only do you to work harder to secure adequate coverage for your clients, but you also have to educate yourself and continue to develop your technical skillsets around cybersecurity controls and best-practice cyber risk mitigation. This is vital if you want to differentiate yourself in a hardening market.
The Biden administration appears poised to reinstate masking and other social distancing rules for recalcitrant governors — at least in the workplace. The federal Occupational Safety and Health Administration is preparing to issue new short-term regulations to protect workers from catching COVID-19 on the job, according to lawyers tracking the agency's efforts.
The Federal Emergency Management Agency unveiled the details of an overhaul to the National Flood Insurance Program, the initiative's first major update in 50 years. Most homeowners in the program will have lower or stable premiums, but roughly 11% of homes — largely the highest value ones — will see increases in premiums of at least $10 a month. Those could continue to rise until they reach a cap of $12,000 a year.
New York Federal has denied an insurer's dismissal of a COVID-19 coverage case, issuing a favorable decision for an insured. In what stands as the first win for policyholders in a New York COVID-19 insurance coverage case, the ruling found that the contamination exclusion was ambiguous and that the Court lacked a sufficiently developed factual record to rule on whether the Loss of Use exclusion encompassed the insured's losses.
While COVID-19 was top of mind for everyone in 2020, dominating both our personal and our professional lives, it was not alone in determining the health of the global insurance industry. The industry had to deal with a very costly natural catastrophe year, combined with low interest rates, years of soft pricing, and certain types of social inflation or expectations.
CNA Insurance expects its corporate email and other functions to be fully operational soon as it continues its recovery efforts following a March 21 cyber attack. The company said it is now safe to conduct business and communicate with the insurer via email.
Zurich Insurance and Farmers Exchanges have closed on buying MetLife's U.S. property/casualty business for $3.94 billion. The business acquired includes 2.4 million MetLife Auto & Home policies, $3.6 billion of net written premiums (2019) and 3,500 employees, according to Zurich. The deal provides the Farmers brand an opportunity to gain more of a national presence and strengthen its position a major personal lines carriers in the U.S.