Great news! Governor Hochul has taken favorable action on two key bills affecting IAs and their customers.
On December 23rd, the Governor signed into law a Big I NY priority bill, A.4668-B, which will require carriers to run an insurance motor vehicle record before binding coverage. This will protect customers from unscrupulous quoting and pricing practices whereby certain carriers will bind a policy only to later run the MVR and substantially raise the premium. Responsible insurance agents and companies utilize all available underwriting resources prior to binding a policy for an insured. The practice of intentionally disregarding driver history information in order to present a false price to an insurance consumer undermines the credibility of the insurance industry as a whole.
The governor also vetoed a sweeping bill which would have banned the use of all noncompete agreements in New York. Big I New York strongly opposed this bill, as it did not include and explicit exemption for the sale or purchase of a business. We lobbied the Governor to veto the bill on the basis that it would significantly harm the independent agency system.
The governor signed the quoting fairness law on the condition that “chapter amendments" will be made to the law by the legislature. This means the legislature will quickly pass minor changes to the bill before it goes into effect. At this time we do not have the specific chapter amendment language, but based on conversations with the Governor's office we anticipate that the bill will apply only to new business and not renewals. The law will take effect on June 20th, 2024.
The Governor had proposed reasonable limits to the noncompete bill but was unable to come to an agreement with the legislature, and therefore vetoed the bill outright. We anticipate that the legislature and the governor will continue to negotiate to reach a compromise in the coming session.
Big I NY Has Your Back:
We will continue to lobby to ensure that the noncompete bill, if passed, includes reasonable limitations to protect independent agencies and their customers. We will also work to educate independent agents on the coming changes to the quoting fairness law.
This legislative session has been a powerful demonstration of the importance of agent advocacy. This year, we have now scored major legislative victories: the passage of the photo inspection reform law, passage of insurance quoting fairness law, and the veto of a noncompete ban bill. For each of these bills, agent participation, through emails phone calls and legislative meetings has been a key factor of our success.
Want to do even more to help us amplify our impact in Albany? Contribute to IAPAC, our political action committee today!
Insurers writing auto insurance coverage in New York must refund premiums to insureds who have rejected Supplemental Spousal Liability Insurance coverage, the New York State Department of Financial Services (DFS) said Monday. The announcement came in a circular letter the department published late on December 18 addressed to carriers, producers, the New York Automobile Insurance Plan, and others.
The letter, signed by Deputy Superintendent of Insurance Avani Shah, stated:
"It has come to the Department’s attention that some insurers are not specifying a premium for SSL insurance or permitting a named insured to decline the insurance with an appropriate premium reduction. As discussed further below, an insurer must specify the premium for SSL insurance and provide an appropriate premium reduction when a named insured declines the SSL insurance. …
The law and regulation require that the SSL insurance notification include the insurer’s premium for the insurance. Therefore, an insurer must include the premium for the SSL insurance in the SSL insurance notification. An insurer may not inform a named insured that there is no charge for the SSL insurance or otherwise specify “$0.00” on the notification. The premium for SSL insurance should be based on the bodily injury limits if there are split limits under the policy or the total liability limits if there is a combined single limit under the policy. An insurer may not charge a flat dollar amount for SSL insurance for all policies regardless of each policy’s liability coverage limits. In addition, if a named insured declines the SSL insurance, then the insurer must provide the named insured with a premium reduction, even if the insurer considers the premium reduction to be nominal. …
SSL insurance is an optional coverage. If a named insured elects, in writing, and in such form as the Superintendent determines, to decline and refuse SSL insurance, the policy may not include SSL insurance and an insurer may not prohibit a named insured from declining the coverage. …
The Department expects insurers to comply with the amendments to Insurance Law § 3420(g) and 11 NYCRR 60-1 and with the guidance set forth in this Circular Letter."
This will mark a change in procedure for some carriers, so will likely not see immediate changes. However, once carriers receive approval for new rate filings from DFS, you can expect to see refunds being credited to insureds who reject the coverage.
One crucial aspect that insurance agencies should prioritize is performing a comprehensive book of business review. The data in your agency management system is full of valuable information that can help you protect your revenue and grow your agency. Having accurate and up-to-date information in your agency management system gives you insight into the makeup of your book. Let us explore the significance of some reports and why reviewing them is essential for your successful operations.
|When you use a SIC code or NAICS code, you can easily pull reports on type of business written by carrier.
- Provides insights on carrier appetite and competitiveness
- Assist when marketing new/renewal policies.
- Identify significant volume of policies with one carrier; consider exploring a special niche program with that carrier
Consider a carrier Service Center for small business.
- Identify cross selling opportunities and potential coverage gaps by routinely running these reports (Find these gaps before your competitor does).
- Identify account rounding opportunities.
- Uncovering potential gaps in coverage and offering additional coverages/policies that your customers will benefit from
- Offer higher limits on policies.
These increase revenues, improve client retention, strengthen customer relationships, and help prevent errors and omissions liability claims.
- Develop a risk management and communication plan 90-120 prior to renewal.
- Check for policies that have not been renewed, rewritten, or cancelled.
- Identify up-sell and cross-sell opportunities and minimize potential gaps in coverage.
- Identify follow-ups that have lapsed and addres them.
|Review for inconsistent coding:
- Line of Business, Servicer, Producer
- Parent/Writing Company
- Commission Rate
- Unbilled policies, and Unrenewed policies
All of these can impact on your bottom line. Once cleaned-up, review on a quarterly basis.
|Retention rate shows your ability to retain customers over time. You can identify patterns and trends that may impact customer loyalty.
|Review for non-renewals or messages related to non-renewals.
|Verify that commission rates match between insurance company and agency. Research discrepancies by reviewing policies. This process is tedious but can be outsourced.
Performing a book of business review is a critical practice for insurance agencies focused on thriving in a competitive market. By regularly reviewing reports, agencies can proactively address policy renewals, identify cross-sell opportunities, and mitigate potential risks. Embracing these practices will position agencies as trusted advisors in meeting their clients evolving insurance needs.
Visit our consulting page for more helpful information.
For most independent insurance agency owners, their agency is their most valuable asset. It is a part of who you are, and a big part of your life. It is understandable that selling your agency will no doubt be a significant milestone in your career. Whether you are planning to perpetuate internally or sell externally, preparing to sell your agency is a complex and multifaceted process. The more time you give yourself to prepare in advance the more options you will have for your agency's future. To help you navigate this journey, we have compiled a list of the top 5 things you should do to prepare for a successful sale.
Get Your Financials in Order
The first step in preparing to sell your independent insurance agency is to ensure that your financial records are well-organized and up to date. Prospective buyers will want to scrutinize your financial statements to assess the agency's profitability, so it is crucial to have accurate and transparent records. Well in advance of a sale, you should work with an accountant who understands the inner workings of an independent insurance agency to ensure your financial statements are in order and show a consistent reflection of your revenue, expenses, and overall profitability. They can also help you identify any outstanding debts, including loans or unpaid commissions, and work on resolving them. Be ready to provide detailed financial statements that will accurately reflect the agency's historical financial performance as that is a key factor in predicting the agency's future performance.
Understand Your Agency's Value
Before putting your agency on the market, it is essential to have a realistic understanding of its value. Many factors influence the agency's worth, including revenue, profitability, retention rate, loss ratios, growth rate, mix of business, carrier mix, customer concentration, health of the book of business, niche, staff expertise, and location. Consider hiring a professional valuation expert with experience in the insurance industry to help determine your agency's value. They can provide an objective assessment and identify the opportunities for you to maximize your agency's value. Enhance Your Agency's Appeal
To make your agency more attractive to potential buyers, focus on optimizing its operations and increasing its efficiency and profitability. This might involve streamlining processes, improving customer retention, or expanding your product offerings. Buyers will be more interested in agencies that can demonstrate their growth potential and efficiency. You may consider focusing on some of the following areas to strengthen your agency:
Develop a Transition Plan
- Invest in staff training and development to build a skilled and motivated team.
- Strengthen client relationships and improve customer retention rates.
- Develop a defined area of focus or niche.
- Implement a defined carrier strategy to focus on your core partnerships and maximize your opportunity for contingencies.
- Focus on account rounding to increase your policies per customer and retention rates.
- Consider implementing modern technologies to improve operational efficiency.
Selling an insurance agency is a significant change for both you, your staff and your clients. A well-thought-out transition plan will help minimize disruptions and ensure a smooth handover to the new owner. Key elements of a transition plan include:
- Identifying potential buyers and establishing a clear process for evaluating offers.
- Communicating with your clients and reassuring them about the transition.
- Documenting your agency's procedures and best practices to facilitate a seamless transfer of knowledge to the new owner.
- Working with valuation, legal, tax, and accounting advisors to create a binding sales agreement that protects your interests and outlines the terms of the sale.
Seek Professional Guidance
Selling an independent insurance agency is a complex process that involves legal, financial, tax, and operational considerations. To navigate it successfully, it is essential to plan ahead and seek the appropriate professional guidance. Engage with experienced professionals such as attorneys, accountants, business brokers, and valuation consultants who specialize in the sale of insurance agencies. Their expertise will help you make informed decisions and ensure a successful sale.
The reality is everyone will eventually transition the ownership of their agency to someone else. Knowing that you only sell your independent insurance agency once and that it is a significant undertaking, giving yourself the gift of time can make a dramatic difference in your process. The more time you have to prepare for that transition the more options you will have. With careful preparation and professional guidance, you can maximize the value of your agency and ensure a smooth transition for both you, your staff, and your clients. By getting your financials in order, understanding your agency's value, enhancing its appeal, developing a transition plan, and seeking professional guidance, you can position yourself for a successful sale and a bright future beyond your agency ownership. Remember, preparation is the key to a successful sale and a new chapter in your career.
New York First is a partnership that brings together insurance company leaders and independent insurance agents that are members of Big I NY to advance issues and do research on behalf of the insurance industry. A recent example was in 2022 when the NY First governing committee spearheaded and funded an aggressive public relations campaign to allow insurance companies in New York to waive burdonsome CARCO inspections. This will save valuable staff time and help avoid situations where customers lose coverage because they were unable to complete an inspection.
Currently, New York First is providing essential data to support Big I NY's meetings with top insurance regulators to discuss the alarming state of the insurance market. Carriers that are intererested in joining NY First should contact Kathy Lawler at (315) 432-4218 or email@example.com
With the New York State Department of Financial Services' (DFS) recent adoption of the second amendment to the Cybersecurity Requirements For Financial Services Companies regulation, members have naturally been contacting us to ask what they're required to do. The overwhelming majority of Big I NY members qualify for the limited exemption. If you're agency is one of them, here are the sections of the regulation you must comply with regardless of your agency's size:
- Section 500.2, Cybersecurity Program - you must have a program in place to protect your computer network and any nonpublic information (NPI) stored on it. The program is made up of the devices you use, the protective devices and software you have in place, and the policies and procedures the users of your network follow.
- Section 500.3, Cybersecurity Policy - you must have written policies and procedures for protecting your computer systems and the NPI stored on them.
- Section 500.7, Access Privileges and Management - to the extent it's feasible for your agency, your cybersecurity policy must set limits on the parts of your system and NPI different users can access. It also must set limits on system administrator accounts and set procedures for regular management of all users' access.
- Section 500.9, Risk Assessment - at least annually, you must perform an assessment of your cybersecurity risks, identify system vulnerabilities, and develop a plan to address them.
- Section 500.11, Third-Party Service Provider Security Policy - your cybersecurity policy must include policies and procedures for ensuring the security of your systems and NPI that are accessible to, or held by, third-party service providers.
- Section 500.12, Multi-Factor Authentication - by November 1, 2024, your agency will have to implement authentication through verification of at least two types of factors such as passwords, tokens, and face scans.
- Section 500.13, Asset Management and Data Retention Requirements - your agency's cybersecurity policy must include policies and procedures for periodically and securely disposing of NPI you no longer need. By November 1, 2025, you will also have to maintain a written inventory of all your computer systems' devices, including who has them and where.
- Section 500.14, Monitoring and Training - by November 1, 2024, you must provide regular cybersecurity awareness training to the users of your computer systems.
- Section 500.17, Notices to Superintendent - you must notify DFS within 72 hours of determining that certain types of cybersecurity incidents have occurred. Also, between January 1 and April 15 each year, you must submit to DFS either a certification that your agency was in material compliance with the regulation the prior calendar year or an acknowledgement that you were not in material compliance with one or more sections. If it's that second one, you must report what you are doing about it.
For more information, visit:
More resources will be available soon. Watch our bi-weekly newsletters and this website for announcements.
This year we used Elfster.com, an online Secret Santa Generator, for some hybrid holiday cheer. Elfster is a free, simple way to set up an online gift exchange for your friends, family, or coworkers.
Less work: As the person setting up the exchange, I didn’t want to do any work, so this was for me! I was able to set a spending max, send a link via email, teams, or social media to anyone that wants to participate and set a date to RSVP by.
Hybrid teams: Our office has a mix of in-person and remote team members that opted to participate in the gift exchange and for those of us that work further away, we are easily able to shop online and ship gifts to the office. For those celebrating in-person, we can do things the old-fashioned way, by also shopping online.
Wishlist: One of Elfster’s best features is that everyone was able to create a wish list by choosing from brands, stores, trending gifts or sorting by price. We are also able to add custom wish list items with our own links, photos, sizes, and preferences.
The bottom line: Elfster is turning out to be a great platform for our group to connect without the awkward water cooler whispers about who got stuck with who and what they would want. And this year, I know I will not receive a cinnamon & rosemary candle that someone mistakenly thinks I would enjoy wafting around my home because as they can see, it is not on my Elfster wish list.
P.S. from the team (self-described peanut gallery)
1: Forced fun is not fun - keep it optional. Like really optional, not the behind-the-scenes shame kind of optional.
2: Keep the maximum $ amount low. Very few people have extra cash.
3: Make it non-denominational - anyone can participate!
Big I CNY had a full house for annual Legislative Breakfast held today in Syracuse.
Legislators and attendees discussed issues impacting independent insurance agents and the insurance industry in New York.
A celebratory toast was shared to celebrate the Big I NY's Photo Inspection bill being signed into law!
We need you.
Our committees and volunteer leaders drive the future of the association, and in turn, your agency. This is your association and you are invited to get involved.
Interested? Not sure where to start?
Whether you're ready to dive right in and get started or just looking for more information, we'd love to help get you engaged in your association, Big I New York.
Where will you share your voice?
Board of Directors
The Board of Directors is responsible for the strategic vision and administrative and financial oversight of the association. You will represent your peers and help nurture a healthy insurance market in New York.
NextGen is a group of young insurance pros who come together to network, grow skills, and give back to the community. Young professionals are the rising leaders of our industry and the NextGen committee helps develop a pathway for them to enhance their careers and create new growth opportunities.
This committee is responsible for supporting our strategic goal of helping our members leverage technology. This group will provide direct input on the technology resources and insights that help independent agents thrive and increase customer engagement to drive more profit. Plus, you will have the opportunity to provide input to insurtech companies building solutions for agents.
Talent Development Committee
Attracting and developing new talent for independent agents is a top priority of this committee. If you have connections with high schools, community colleges and colleges in your area, we need you! You will have the opportunity to directly engage with students and job changers to showcase our great industry.
Legislative & Goverment Relations Committee
If you have insurance expertise and a desire to impact laws and regulations for our industry, lend your voice to this committee. You will have the opportunity to weigh in on proposed legislation and regulations from the agents perspective. Also, if there are improvements that can be made to existing laws and regulations, this is your chance to make a difference. Plus, if you have political relationships, this is a great way to support the association.