|  Big I NY Photo Inspection Reform Bill Clears Legislature:
This week, we celebrated a major milestone in our campaign to end mandatory CARCO inspections, with the State Senate passing our photo inspection reform bill by a vote of 55-8. The bill passed the Assembly in March, meaning that final step is for the Governor to sign it into law. The bill next must be “sent" by the Assembly to the Governor, which triggers a ten-day period for her to take executive action. Big I NY is working with the Governor and Assembly to ensure this process happens swiftly. We are optimistic the bill will be signed, as the language is identical to language that Governor Hochul included in her own executive budget proposal earlier this year. Nonetheless, we are urging all agents to call the Governor and register their support for this common-sense reform. Excess Lines Reform Bill Advances in Senate: Big I NY-priority legislation to eliminate the “diligent effort" requirement for commercial excess lines policies cleared the Senate Insurance Committee and advanced to the Senate floor, where it will soon be voted on by the full chamber. The bill must also pass the Assembly Insurance Committee and a floor vote by the full Assembly before being sent to the Governor. State Insurance Fund Reform Bill Introduced: On April 3rd, Assemblyman David Weprin, Chair of the Assembly Insurance Committee, introduced comprehensive legislation which would level the playing field between the State Insurance Fund (SIF) and private carriers. The bill would require that the State insurance Fund be licensed by the Department of Financial Services (DFS) and subject to the same requirements as other insurance companies providing workers' compensation insurance, and would require that the Superintendent of DFS approve the rules adopted by SIF for the conduct of its business. It would also eliminate the requirement for SIF policyholders to provide 30 days' notice to withdraw from the Fund, and allow the payment of commissions. Big I NY strongly supports this bill and will work with Chairman Weprin to advance it this session.
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| NOTE: This is a rerun of a blog post we originally published in May 2022. Since then, the carrier has informed its agency force of a commission reduction that will impact many more agents. Some Big I New York members have contacted us about it. Big I New York cannot and will not advise members regarding with whom they should or should not do business. We wish to re-emphasize the advice at the end of this post. Big I New York has asked Kemper Auto & Home to delay its announced commission reductions on certain auto insurance policies. The carrier was told in a meeting this week that the suddenness of its move is unreasonable and bad for its independent agents. The carrier informed many of its New York agencies this week that it is reducing the commission rate on its Kemper PrimeSM personal auto insurance product to an extremely low level. The change will take effect on June 1, 2022. Several Big I New York members contacted our office to ask whether the carrier's action is legal. We have concluded that it is, for two reasons: - New York insurance law regulates carrier commission reductions only in situations where the carrier has terminated an agency's contract. For any personal lines policies that the law requires the carrier to continue, the carrier must pay the prevailing commission rate in effect at the time of the termination. For commercial lines, the carrier must pay the commission rate applicable to that agent at the time of the termination. New York law does not regulate commission changes in other situations.
- A review of the carrier's agency contract indicates that it gives the carrier the right to change the commission schedule at any time in compliance with applicable state law.
While it appears that the carrier has the legal right to take this action with little advance notice, Big I New York President and CEO Lisa Lounsbury met with carrier representatives on May 19 to register strong objections. They explained that the carrier took the action after unsuccessfully seeking rate relief from state regulators. During frank remarks, Lounsbury stressed the unfairness of giving agencies little more than two weeks' advance notice of such a large reduction. She asked them to consider delaying implementation to dates further into the summer. Their response was noncommittal. She had a subsequent conversation with Bob Otis, the carrier's president of personal insurance, on May 20 with the same result. As of this writing, we suggest that members who represent this carrier: - Assume the announced reduction will take effect on schedule,
- Respond in the best interests of their clients and their businesses , and
- Contact their Kemper Auto & Home marketing representatives to explain the impact this change will have on their agencies
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| By Julie Furst  (The WNY local group is great at creating opportunities to come together. A little axe throwing, anyone?! Thanks to Carrie Shaw for the photo.)
Connecting, Interacting, Networking.
For over a century, the insurance industry has been built on relationships. They've made everything possible.
The last few years have caused us to develop new tactics for connection. Magic happens when those new ways are married with the traditional methods. As we continue to come back out of our shells and overcome the get-out-the-door hurdle many have developed, here's a reminder of the gifts awaiting in networking.
- Building relationships: Networking provides an opportunity to build and maintain relationships with people who can help you professionally and personally.
- Expanding opportunities: Meeting new people can lead to new job prospects, business partnerships, and other meaningful opportunities.
- Learning from others: Networking allows you to learn from other people's experiences and knowledge, which can help you grow.
- Building your reputation: Building a strong network can help you establish your reputation and credibility in the industry.
- Staying up-to-date: Networking can help you stay up-to-date with the latest industry trends and news, and best practices, which is vital for professional growth and profitability.
- Support and advice: A strong network can provide you with support and advice when you need it. Solutions to problems can be at your fingertips.
Networking and connecting as a community can make a difference for your agency, professional life, and personally. That's why your Big I NY team is committed to giving you those opportunities.
Here are a few fantastic opportunities.
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| The insurance industry is dedicated to assisting people in times of need. As such, the industry is uniquely suited to be a philanthropic leader, adapting its skill-set to charitable endeavors. On behalf of the Insurance Industry Charitable Foundation, Big I NY is pleased to invite your company or agency to nominate a charitable organization for a local grant.
IICF helps communities and enriches lives by combining the collective strengths of the industry to provide grants, volunteer service, and leadership.
In an effort to expand the reach of IICF across communities in New York, New Jersey and Connecticut, the foundation is offering a variety of grants in the amount of at least $2,500. All charities awarded a grant must be sponsored by an insurance entity, so this your chance to nominate a worthy organization your company or agency supports or is familiar with in your community.
The application process is simple. Please communicate with your chosen nonprofit that you are nominating them to apply and ask the charity you are sponsoring to complete this application. They must provide the requested corroborating documentation and submit all items electronically to Rachel Boulton at rboulton@iicf.org by 5:00 PM on May 18, 2023. Read guidelines here.
We appreciate your help in recognizing outstanding charities in New York, New Jersey and Connecticut. Formed in 1994, the Insurance Industry Charitable Foundation (IICF) is a 501(c)(3) tax exempt public charity funded and directed by insurance industry professionals representing a broad spectrum of the industry. Since its inception, IICF has contributed over $40 million in local community grants, over 300,000 hours of volunteer service, and the leadership of over 100,000 industry volunteers. |
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The deadline for submitting the annual certification of compliance with New York's cybersecurity regulation for financial services companies is this Saturday, April 15. If you haven't submitted the certification for your agency yet, you must do so by the end of the day Saturday.
The certification is one of the requirements in the New York State Department of Financial Services (DFS) regulation Cybersecurity Requirements For Financial Services Companies, which is Part 500 of Title 23 of the New York Codes, Rules and Regulations (23 NYCRR 500.) Subsection (b) of Section 500.17 states:
"Annually each covered entity shall submit to the superintendent a written statement covering the prior calendar year. This statement shall be submitted by April 15th ... certifying that the covered entity is in compliance with the requirements set forth in this Part." You can submit the certification by visiting the DFS cybersecurity portal, logging in, clicking the link displayed under "Cyber Security Notice" on the next screen, clicking the COMPLIANCE button on the screen after that and following the prompts. Step-by-step instructions are available here. Your licensed employees who are covered by your agency's cybersecurity program are not required to submit this certification. More information about what is required is available in our blog post of January 13, 2023.
DFS intends to make several changes to the regulation this year. To learn about them, check out:
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| By: Carey Wallace
Several factors impact the value of your agency. Some of the biggest factors include maintaining a strong and consistent organic growth rate, retention rate, profitability rate, and overall performance. In addition, agencies being aware of the risk factors that impact the value of your agency is key. Once you know these factors, you can work to minimize the risk inside your agency and maximize your value. Knowing the overall risk inside your agency is also critical because it is what any future buyer will take into consideration to help them predict the ongoing performance of the agency. There are many different factors that will be considered when assessing both performance and risk inside an agency during a due diligence process, but for now, we are going to focus on only one of the key factors - policies per customer. Retention is one of the most impactful metrics inside an independent insurance agency. It is estimated that the average customer retention rate inside an agency is 85% while top-performing agencies achieve a 93-95% customer retention rate. The number of policies per customer can be used as a predictive indicator of the ongoing retention rate that can be expected in an agency. It is estimated that the average number of policies per customer for an independent agency is 2.5. For personal lines customers the average is 1.7 policies per customer and for commercial lines customers it is 4.4 policies per customer. The coverages required for a personal lines customer and a commercial lines customer vary greatly, and therefore, so does this statistic. It is important to keep in mind that these are just averages of the policies per customer and that this metric can vary widely due to the specific customer needs. Knowing your policies per customer is important and can help you strengthen your agency's performance and value. Agencies that have a strong account rounding and retention strategy will have a higher policy per customer than those that do not. This will put the agency that invests in this area in a great position to have higher revenue, higher retention rates, and the potential to build a higher level of trust with its customers. Building trust with customers will translate to higher customer loyalty and satisfaction and as a result, their customers will have a higher level of confidence in their agent and their ability to provide the right coverage and advice. We all know that the independent insurance industry is incredibly relationship-driven, and that trust and customer loyalty are great ways to strengthen the overall value of your agency. The reality is that clients with a higher level of satisfaction and confidence are far less likely to shop their insurance. In addition, the more policies in place, the more complex it is to make a change in their insurance. Insurance is complicated, and the thought of forming a new relationship, and going through the process of reading and researching what is needed can become both time-consuming and confusing. Satisfied customers are much more likely to stay with the agency that they know like and trust because they know that they are well taken care of! When an agency owner is ready to transition ownership, their customers will look to them for answers including who they should trust when things change. Agents that have built a high level of trust and loyalty with their customers will be able to transition those customer relationships much easier than agencies that have not built solid foundations with their clients. This is an area that is often overlooked but impacts the value of your agency in a significant way. If your customers are not willing to transfer to the new owner or team in that transition, the value of your agency will suffer. While generating new business is incredibly important, having a strong foundation and relationship with your current customers is equally important. If you want to strengthen your agency's value be sure you are identifying opportunities to cross-sell upsell and account round with your current customers. Putting incentives in place for your team to continue to account-round throughout the relationship will strengthen that relationship. It is incredibly important that your customers know they have a reliable source for their insurance needs. Continuing to build and reinforce that trust with your customers will strengthen your performance by improving your retention, your overall profitability, and ultimately improves the transferability of your agency. For more information on how to strengthen the value of your agency visit www.agency-focus.com or contact carey@agency-focus.com.
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