The anchor september 2013

The Anchor

THIRD QUARTER 2013

Battle for Marketshare:2012 RI Results

THE INDEPENDENT INSURANCE AGENTS OF RHODE ISLAND MAGAZINE

The Anchor

ALSO IN THIS ISSUEYoung Agents: Earn CPIA Designation with your Peers!It’s Time to Engage on Project CAPNew Issues Arise in WC Court: How Agents Can Help2013 Legislative Wrap-up

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IIARI OFFICERS President Howard Thorp, AAI, CIC President Elect Greg Troy, CIC, CLU, AAI Vice President RobertT.Hartnett National Director Robert Slocum, CPCU, CIC Immediate Past President Doug Mayhew, CIC

IIARI BOARD OF DIRECTORSDistrict Vice Presidents

Central Andrew Palazzo East Bay Richard B. Paquin Southern Tom Regan, AAI Northern David White, AAI

At Large District Vice PresidentsJohn Kaull, AAI

GarryMansfield,CICDavid Woodmansee, CIC

DistrictRepresentativesCentral

Edward F. Bishop, CIC

East BayColetteMcKeon,CIC

Ken Thompson, Jr.

NorthernMarc Nadeau, CPIA

Denise Smith

SouthernKimberly Raymond, CIC

Stan Tabak

IIARI STAFFMarcia L. Berthiaume, AAI, ACSR

State Account Manager

Helen CollinsE&O Administrator & Member Coordinator

Sean R. Donaghey, CPCUSenior Vice President, State Account Executive

Mark A. MaleExecutive Vice President

Jean E. Nagle, AAI, ACSR, AISAssistant Vice President, Director of Education

Maureen McNamaraFinance & HR Manager

Sarah Van GrootheestMembership & Administration

Battle for Marketshare: 2012 Market Results

New Issues Arise in WC Court:How Agents Can Help

Legislative Wrap-Up

Prepare Your Clients for Peak Hurricane Season

table of contents

The Anchor is published by the Independent Insurance Agents of Rhode Island (IIARI). Statement of fact and opinion is made based on the responsibility of the authors alone and does not imply an opinion on the part of IIARI, it’s officers, directors or members.Subscription rate for members is $15, which is included in dues. Subscription rates for non-members is $75 per year (single copies $10). Reprint requests should be referred to IIARI.Copyright©2013, Independent Insurance Agents of Rhode Island.

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Third Quarter, 2013 The Anchor3

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information about us and learn about various insurance products in all states. That’s today - real time! They won’t be able to secure a real-time quote unless they are located in Minnesota or Indiana but consumers can still access the web-site to search for an agent - that’s why it is imperative that every IIARI mem-ber update their online profile in Trusted Choice as soon as possible. Currently, all Trusted Choice agencies are listed in every geographic search re-gardless of how specific the consumer is in their search criteria. Agencies that have completed a new TrustedChoice.com agency profile are listed at the top of the search results and are listed in or-der by matching specific entered search criteria. In other words, please complete your TrustedChoice.com agency profile ASAP! On a recent trip to the IIABA Nation-al Legislative Conference in D.C., I had the chance to sit with one of our long-time members Roger Messier from But-ler & Messier. We chatted for a while about various insurance related issues including the future of the independent agency system. He proceeded to tell me an interesting story. Roger got out of the army in January 1954. His father-in-law, Thomas Butler, owned the Butler Insurance agency and offered Roger a job. Roger attended his first convention at the Biltmore Hotel in Providence in April 1954. After the convention Tom took Roger aside and asked him what he thought. Roger proceeded to tell him that he thought he would probably go back in the Army! Apparently, one of the convention speakers had given a long talk about impending doom for

Howard Thorp, AAI, CICIIARI President


It’s Time to Engage - Project CAP

My tenure as your President and a member of the board of IIARI is quickly drawing to a close. I will soon be pass-ing the torch into the capable hands of Greg Troy at our October Annual Meet-ing. I’ve made some great friends and learned a lot. I joined the board in the summer of 2007 after having served on the Com-munications Committee. Dennis Char-land was our Executive Director at the time and David Soucy was President. Coastal issues had begun to consume many of us given our state geography and proximity to the coast. We were promoting Trusted Choice and there was talk of the Consumer Agent Portal (CAP) being rolled out soon. CAP was going to be great! Since then Dennis went on to start his own agency in Scituate and our current executive, Mark Male, came on board in December of 2007. Today we continue to struggle with coastal insurance issues and pray for rate and market stabiliza-tion. Trusted Choice has continued to grow in name recognition and CAP is becoming a reality.

Project CAP If you have not yet looked at CAP, I urge you to take a moment to visit the website at www.TrustedChoice.com. The comparative rating function rolled out on June 30th in two states, Minnesota and Indiana. More states will be added soon - in fact, Rhode Island is slated to be operational by the end of this calen-dar year! Despite the timeline the portal is active in all states. What that means is that customers, and potential custom-ers, can look to “find a local agent”, get

from the president

The Anchor Third Quarter, 20136

The Independent Insurance Agents of Rhode Island proudly introduces the 2013 Partners Program. The 2013 Partners Program is a mechanism to allow companies to demonstrate their support of the American Agency System and IIARI.

Be sure to thank your companies for their unparalleled support of IIARI and all independent insurance agents. Look for all of our sponsors throughout the coming year as we acknowledge their commitment at all IIARI events and functions.

American Commerce Insurance Co.EMC Insurance CompaniesPhenix Mutual Fire Insurance Co.The Andover Companies

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the independent agency system. The direct writers were entering the market, and there would be no place for the in-dependent agent. Roger’s father-in-law proceeded to tell him about a similar speech he had heard at the 1928 conven-tion about the imminent demise of the independent agency system. Needless to say, Roger hung in there. The relevance of the independent agency system has been questioned for longer then any of us have been in the business. We’ve always had competi-tion and naysayers. It’s been good for us. It’s forced us to adapt, improvise and overcome, and we have done so with great success. We are as relevant today as ever. New ways of doing busi-ness are a fact of life. First, direct writ-ers and then the Internet were going to put us out of business. AARP, NFIB and others offer property casualty insurance as a member benefit. SelectQuote pro-vides property casualty quotes and we are BOMBARDED on a daily basis with geckos, pigs, cavemen, and other cutesy, nonsensical advertising messages that seek to dumb down our product and ser-vices, or discount our contribution to the insurance equation. Auto insurance has been commoditized through the in ear-nest efforts of many direct writers. It’s hard not to be frustrated and a little con-cerned for the future. I know that I am. However, fundamentals are just that… fundamental. Society will inevitably

return to what made our nation great. Insurance has been the foundation of in-dustrial growth and individual growth as well. People WANT to do business with people that they know, trust, and whose advice they respect. That’s where we re-main as stalwarts of our country. Some consumers will shop strictly based on price - there will ALWAYS be some-one cheaper. Stick to the fundamentals! You are the trusted advisor and counsel to your clients. They know you, they trust you, and they respect you! One final thought about the Consumer Agent Portal (CAP). I’m convinced that CAP will help to level the playing field for independent agents. As revolution-ary as it will be remember we are in our infancy stage. There may be mistakes, there may initial bugs, and there will be continual changes. Mark shared with me that at a meeting where the CAP CEO spoke he assured every executive in the country that the portal will never be done - it will be an ongoing improve-ment process to continually make it the optimal site for consumers to secure ac-cess to the best insurance distribution system in the world. But remember, it will be up to us to be responsive to inquiries from prospective clients and they will expect a response in “Internet time.” The bar has been raised, and we will rise with it. We always have, we always will.

From the President Continued from Page 5


because of injury to or destruction of property of others in any one acci-dent or seventy-five thousand dollars ($75,000) combined single limit.

The law was last amended in 1991, so it’s over twenty-two years since sub-stantive changes were made. Let’s face it, these limits are not adequate. But can they be changed? Should they be changed? Let’s consider the arguments. Insurance companies are not over-ly motivated to update the limits even though common sense dictates that they should. There are two sides to the story of modifying this law. Some side with the argument: it will reduce underin-sured claims; shift how consumers se-cure auto insurance; and, increase confi-dence that drivers carry adequate limits to cover both bodily injury and property damage claims. On the other hand, pre-miums may increase to reflect increased limits which could lead to an increased number of consumers willing to com-pletely forego carrying insurance due to the cost potentially adversely impact-ing a delicate state economy. Although it would be in the public’s best interest to purchase proper insurance limits, the public may be unwilling to do so. So why discuss automobile limits now? Does anyone really care? Any-one who spends anytime in front of a television or listens to a radio cannot avoid the “save 15% or more” direct writers. The billions spent on adver-tising by the big competitors for direct business have effectively commoditized auto insurance to the point where many consumers believe it’s okay to carry minimum limits and that the real critical factor in insurance decision-making is

In July I attended the annual IIA state executives meeting in Newport and after speaking with many of my counterparts across the country, I find change is in the wind and I am motivated to try some-thing new as a result. “Relevance” is the new buzz word echoing throughout the association in-dustry these days and causing organiza-tions – like ours – to re-examine how we do business. One session in New-port suggested that the stalwart founda-tions and underlying principles of asso-ciations have changed forever and will never return to the way they used to op-erate. One of those tenets espoused is that people are no longer interested in learning about what happened in the past and that reflecting on association activi-ties on a retrospective basis no longer has the same level of relevance it once enjoyed. People are more apt to read something that challenges the norm or to causes them to think outside the box. Consequently, this begins my departure from the norm and into a new approach fueled by the unknown.

Minimum automobile insurance limits – is it time to update the limits? Rhode Island General Law § 31-32-24 (2) (i), (ii) and (iii) establishes mini-mum limits for motor vehicle liability policies. They are as follows:

• Twenty-five thousand dollars ($25,000) for bodily injury or death of two (2) or more persons in any one accident: and

• Subject to the limit for one person, fifty thousand dollars ($50,000) because of bodily injury to or death of two (2) or more persons in any one accident; and

• Twenty-five thousand dollars ($25,000)

Time to Change Minimum Auto Liability Limits?

Mark A. MaleIIARI Executive

Vice President

president perspectivesexecutive vice

how much it will cost. Cheapest is best. How many direct writers spend time explaining why increased limits should be purchased? There is no connection to the potential consequences of opting for lower limits to keep your premium down. My son is a great example and at 29 he represents our future customer in that he purchases most of everything online. Likewise, he purchased his in-surance online and opted for minimal limits and didn’t even think about the potential consequences of doing so and that his financial security could be in jeopardy. When we are together in a car I always point out certain cars and ask him how much he thinks that car costs? His response is usually eerily accurate. I immediately follow up with this ques-tion: If he had the misfortune of being involved in an accident with such an ex-pensive car, would he have adequate in-surance limits to protect himself and his assets? Those conversations eventually

yielded a more educated consumer and he has since increased his limits at my strong suggestion. But how do we reach others like him? Consumers have numerous channels to explore when purchasing auto insurance and many of those channels sell price and not limits. The Wall Street Journal and Dow Jones reported in January that in 2010 $5.1 billion was spent on auto insurance advertising, and most of that came from the direct writers. Spending on advertising continues to increase and the momentum of consumer behavior to secure minimum limits to save on insur-ance premium continues and appears to be unstoppable. Maybe it’s time for us to begin thinking about how we can ef-fect behavior change in Rhode Island. Maybe it’s time to enter into a serious dialogue with the insurance companies about changing minimum limit laws in RI? I’d love to hear your thoughts.

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Trusted Choice® Expands 2013 Reimbursement ProgramProgram reimburses members up to $500 for expenses for co-branding.

Trusted Choice® released revised guidelines for the Marketing Reimbursement Program (MRP) that has been extended for 2013.

The program reimburses expenses incurred in 2013 by Trusted Choice agencies for co-branding materials such as business cards, letterhead, envelopes and marketing or advertising materials. It also provides reimbursement for creating or updating a digital presence to include the Trusted Choice logo, link to trustedchoice.com and the Pledge of Performance.

In order to qualify for a reimbursement, the activity must Include the Trusted Choice logo in external messaging with Consumer impact, documentation that an expense was incurred and paid and that the nature of the expense is correlated to the external messaging and consumer impact.

In addition to covering advertising, the 2013 guidelines remove a lifetime cap on MRP benefits that was implemented in 2012, so agencies that previously reached the maximum reimbursement will be eligible for funds again in 2013.

Program guidelines & application available at trustedchoice.com/mrp.

We Are The Calm Before The Storm

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Wells Fargo Special Risks


about or interested in and learn more, or become involved. We may have had a future IIARI president or committee chair in our midst. We’re taking our next steps now with a flexibly scheduled Certified Professional Insurance Agent (CPIA) designation program. While we value a “Lunch and Learn” format, we also value higher educational objectives with different focuses including sales, insurance knowledge, social media and more. We want your Young Agents to know the basic fundamentals as well as the new stuff coming down the road so that they are well positioned to help bring your agency into the future. The committee agreed the CPIA program was a great place to begin. Not only can we deliver 21 CE credits but the class guarantees an increase in sales within 6 months. That’s a win-win for everyone: don’t forget your producers are not your only sales force, your entire staff is in sales, from the front door to IT, President to processor, and we are all in the business of selling. We took what is normally a three day class and spread it over a number of weeks so that no one needs to be out of the office more than one day at a time. The dates are spread through August and September, with the option of make up dates in October. We hope the freedom involved will make this a fantastic option for all Young Agents and their respective agencies. We invite you to join our mission, and encourage your Young Agents to attend our events, find something that they are passionate about and get involved. Finding what Young Agents love and letting them get involved is a great way to ensure a lifer and chances are your agency will benefit from it.

It always amazes me how quickly the year goes by but the fact is we are standing in the third quarter, and before you know it we’ll be closing out the year. The Young Agents took their time this year, setting up a new com-mittee and game plan, asking questions and gathering information and trying to take strategic steps towards a bright future for today and tomorrow’s Young Agents. We have a revised mission state-ment: “The Mission of the IIARI’s Young Agent Committee is to encour-age young agents and those new to the industry to become engaged and aware of all aspects of the insurance industry. Fostering talent, encouraging education, and providing opportunities for growth in the future leaders of the insurance industry.” In an effort to engage our Young Agents and make them aware of differ-ent aspects of the insurance industry we decided to start at home. At the end of June we held our first social event of the year, an Association Night held at IIARI headquarters. Association Night was a chance for Young Agents to come together in the company of IIARI board and committee members with the intent of learning more about the Associa-tion, its’ functions and value it brings to Independent Agents. Young Agents don’t always get to attend conventions and other meetings/events held by IIARI; they may not read the Anchor and information about the association may not trickle down to them. This night was their chance to learn about the Association as a whole, learn what the committees do and, if interested, how to get involved. Our intent was to open a door for Young Agents to find something that they are passionate

Kelly TownsendYoung Agents Chair

Join Us: Earn a CPIA Designation

young agents


Melissa E. Darigan, Esq.Partner

Partridge Snow & Hahn, LLP

istrator appointed by the DBR in its Bulletin, which describes the nature of the dispute and provides all policy and insurer information. The administrator will evaluate the request for mediation to determine if it is eligible under the program. If the claim is not eligible, the administrator will provide the policyholder with the specific reasons for the rejection. If the request for mediation is accepted, the administra-tor will select a mediator from a list of those persons approved by the DBR to conduct mediations under Regulation 110 and the mediation conference will be scheduled within 30 days. Requirements on insurers. All insurers authorized or admitted to do business in Rhode Island, along with the FAIR Plan, are required to partici-pate in a mediation conference com-menced by a policyholder and sched-uled by the administrator. Surplus lines insurers and risk retention groups may “opt in” and voluntarily participate in mediations on a case-by-case basis. Insurers are responsible for payment of the fees of the mediator and the admin-istrator, except where a policyholder fails to appear at the mediation confer-ence without good cause. If the poli-cyholder fails to present good cause, the costs of the cancelled mediation conference and any rescheduled confer-ence will be split equally between the parties. The mediation fee schedule will be published in the Bulletin issued to establish the mediation program. All other fees, costs and expenses incurred in connection with the mediation will be borne by the party incurring the ex-

The Department of Business Regu-lation (“DBR”) has created a media-tion program for residential property damage claims arising from hurricanes. Regulation 110 – Property Insurance and Weather Related Claims is being amended to implement the General Assembly’s directive in R.I. Gen. Laws §§ 27-76-5 that the DBR design a non-binding forum for resolving disputed hurricane claims. Coverage disputes, non-hurricane losses, National Flood Insurance Program claims and denials for there being no policy are expressly exempted from the mediation program. Otherwise, any policyholder with an unresolved, open claim for damage caused by a hurricane may request mediation through the DBR, and insur-ers doing business in Rhode Island are required to participate.

Announcement of the availability of mediation following a hurricane. The mediation program is triggered when, following a hurricane, the DBR issues a specific Bulletin announcing the availability of a mediation program for claims arising from that hurri-cane. This announcement is made at the discretion of the DBR and will be publicized online and distributed to the DBR’s notice list.

Commencing mediation. When policyholders and insurers can-not resolve a hurricane-related claim that is subject to a Bulletin announcing the availability of mediation, policy-holders, at their option, may initiate mediation by submitting a written request for mediation to the admin-

Mediation Available for Hurricane Claims

legal briefs

pense, unless otherwise agreed at media-tion. In addition to participating at and paying for the mediation, insurers must provide written notice to policyhold-ers about the opportunity to request a mediation conference and the procedure for initiating the process. The DBR’s post-hurricane Bulletin announcing the availability of mediation will include a sample notice to policyholders for use by insurers for this purpose.

Mediation conference. At the mediation conference, parties may submit documents and bring wit-nesses with knowledge about the dispute such as adjusters, appraisers and con-tractors. Insurers are required to bring the entire claim file and to designate a representative for the conference who knows the facts and circumstances of the claim, the provisions of the policy and has settlement authority. Either party may bring counsel or public adjust-ers upon giving five days notice to the

opposing party and the administrator or assigned mediator. A DBR representa-tive may attend any mediation session. Otherwise, the mediation conferences are confidential and no oral or written statements made during the mediation are admissible in a civil action on the same claim, except for an insurance fraud investigation or action. Settlement. If the parties reach a settlement, the mediator will prepare a written settle-ment agreement. The policyholder will have three days to rescind the agree-ment, unless the policyholder has cashed or deposited any funds disbursed as a result of the mediation. If the agreement is not rescinded, then it operates to fully release all claims presented and settled at the mediation.

Insurance law is:more about creating versusresolving.

Jennifer Cervenka

Insurance, Chair CLOSER TO THE ISSUES

www.psh.com • 401-861-8200

A good insurance lawyer knows how to resolve disputes and protect your

interests. A great one also sees the law as an opportunity to create value and

build your business. With Jenn Cervenka’s knowledge and skills on your side,

you’ll be free to focus on the future — confident that you’re moving forward

within the boundaries of the law.

Melissa E. Darigan ([email protected]) is Chair of the Litigation Group at Partridge Snow & Hahn LLP, a Providence based business and litigation law firm.



Battle for Marketshare:2012 RI ResultsBy Roger L. Messier, CPCU

Last year turned out to be a very good year for the property and casualty insurance companies writing in Rhode Island. The total writings for all Group 1 Lines increased almost $92 million over 2011. Paid to earned loss ratio decreased 9.4% and incurred to earned loss ratio decreased 7.2%. Now, those numbers should bring a big smile to underwriters.

Private passenger auto showed an increase of about $23 million over 2011 and the liability incurred to earned loss ratio dropped by 6.2% to 67.8%. Physical damage incurred to earned loss ratio increased 7.1% but on much lower premium writings.

Homeowner written premium jumped $18 million and incurred to earned loss ratio was a whopping 36.7% - down from 69.2% in 2011. According to Best, we continued to lose market shares in private passenger auto premiums and homeowner premiums. All of the writing of Peerless goes into Liberty Mutual’s numbers, Encompass into Allstate, and all the Metlife agents writings go into Metlife’s numbers as a direct writer.

Eight of the Top Ten auto insurance writers are classified as direct writers - something that continues to erode marketshare for independent insurance agents. Agents need to get away from selling on price only - that only makes insurance a commodity. Let’s get back to explaining insurance and show insureds the value of doing business with knowledgeable, informed agents who provide options to consumers.

Data Source:Best’s Data Services, Best’s State/Line Report - Property/Casualty - US

STATE SPECIFIC RESULTS BEGIN ON NEXT PAGE

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2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Allstate 8.7 9.2 9.0 156,832,000 56.0 49.2 2 Liberty Mutual 7.8 7.7 7.8 140,564,000 58.0 63.3 3 Amica 7.1 7.0 6.6 128,329,000 50.6 56.1 4 Progressive 6.6 6.6 7.1 119,631,000 60.6 57.45 Nationwide 6.0 4.9 5.3 109,143,000 58.553.4 6 Beacon Mutual 5.6 5.2 5.0 101,367,000 74.4 61.5 7 Travelers 4.9 5.0 5.6 88,728,000 49.3 40.4 8 GEICO 4.6 - - 83,184,000 67.0 73.2 9 MetLife 4.5 4.5 4.5 82,036,000 56.0 56.7 10 USAA 2.8 2.7 2.5 51,206,000 60.5 60.9 11 American Int. Group 2.6 2.9 3.0 47,916,000 104.9 151.6 12 Chubb 2.4 2.4 2.3 43,058,000 32.1 57.7 13 Mapfre USA 2.0 2.0 2.0 35,992,000 58.4 61.014 Selective 1.9 1.8 1.6 34,358,000 50.2 64.615 Hartford 1.9 2.0 2.1 34,253,000 54.5 31.7 16 Zurich 1.7 1.8 1.4 30,910,000 47.0 23.1 17 Main St. America 1.6 1.6 1.5 28,429,000 66.6 57.8 18 CNA 1.2 1.2 1.2 22,267,000 42.3 46.0 19 EMC 1.2 1.2 - 21,925,000 49.7 40.4 20 Providence Mutual 1.2 - - 21,598,000 52.2 60.5

2012 2011 2010 TotalWrittenPremium:1,811,954,000 1,719,986,0001,686,957,000PaidtoEarnedLossRatio: 58.6 68.049.8IncurredtoEarnedLossRatio: 60.0 67.2 50.8

TOP 20 WRITERS - ALL GROUP LINES

2012 2011 2010Private Pass. Auto Liability 474,501,000 455,448,000 448,644,000Private Pass. Phys. Damage 225,885,000 221,007,000 217,830,000Homeowners 321,117,000 303,117,000 293,653,000WorkersCompensation 170,943,000 162,073,000 147,771,000Products Liability 12,510,000 11,700,000 9,354,000Comm’lMulti-Peril(Non-Liab.) 91,435,000 85,440,000 81,400,000Comm’lMulti-Peril(Liability) 52,001,000 47,318,000 47,015,000Other Liability 102,800,000 100,818,000 160,999,000Comm’l Auto Liability 67,744,000 66,083,000 69,657,000Comm’l Auto Phys. Damage 15,967,000 14,790,000 15,437,000Inland Marine 62,610,000 53,438,000 52,775,000MedicalMalpractice 39,984,000 35,710,000 43,815,000Other Than MMJUA Fire 46,662,000 42,088,000 43,846,000Allied Lines 34,554,000 31,767,000 35,153,000

2012 RHODE ISLANDResults By Line


special article

Includes Independent Agency Volume Direct Sales

2012 2011 2010 TotalWrittenPremium: 474,501,000 455,448,000 448,644,000PaidtoEarnedLossRatio: 9.4 69.5 66.7IncurredtoEarnedLossRatio: 67.8 74.0 66.5

2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Progressive 17.2 17.2 18.1 81,452,000 57.9 55.2 2 Allstate 13.7 14.3 13.6 64,833,000 75.9 69.4 3 Amica 11.6 11.6 11.0 55,247,000 57.0 59.0 4 GEICO 11.0 - - 51,982,000 67.7 71.8 5 MetLife Auto 8.1 8.0 8.0 38,297,000 70.2 74.56 Nationwide 7.5 7.1 7.8 35,632,000 79.3 65.9 7 Liberty Mutual 7.5 7.0 6.6 35,552,000 67.8 2.5 8 Mapfre 3.8 3.7 3.7 18,140,000 70.7 80.6 9 Travelers 3.8 3.8 3.8 18,115,000 66.5 66.1 10 USAA 3.8 3.5 3.3 17,968,000 83.6 83.4 11 Main St. America 1.9 1.9 1.7 8,872,000 84.1 76.6 12 Integon 1.6 2.1 2.3 7,691,000 92.0 58.6 13 Providence Mutual 1.2 .8 .6 5,543,000 52.0 75.0 14 Quincy Mutual 1.1 1.0 1.0 5,224,000 76.6 80.015 Selective 1.1 1.0 .7 5,178,000 56.6 72.316 Hartford .8 .7 .8 3,594,000 86.3 84.3 17 Farmers .6 - - 2,686,000 76.6 87.6 18 State Farm .5 .6 .6 2,566,000 78.2 68.1 19 Tower Group .5 .6 1.4 2,342,000 74.4 60.0 20 Ohio Mutual . 5 .8 - 2,269,000 128.4 89.7

PRIVATE PASSENGER AUTO LIABILITY

2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Allstate 14.0 16.1 16.4 31,587,000 42.4 40.3 2 Progressive 12.5 12.1 12.8 28,325,000 70.6 71.1 3 Amica 11.2 10.7 10.6 25,184,000 68.5 67.4 4 MetLife Auto 10.8 10.3 9.8 24,484,000 52.1 50.7 5 GEICO 10.4 - - 23,572,000 74.1 73.6 6 Liberty Mutual 8.6 8.1 7.8 19,455,000 60.6 60.47 Nationwide 6.9 6.5 7.0 15,608,000 55.2 54.0 8 USAA 5.7 5.2 4.8 12,790,000 71.5 71.1 9 Travelers 4.0 3.9 3.9 8,934,000 69.2 65.810 Mapfre 3.3 3.4 3.6 7,502,000 64.3 66.111 Main St. America 1.8 1.8 1.6 4,153,000 79.3 78.912 Selective 1.4 1.2 .9 3,210,000 69.6 73.413 Integon 1.2 1.5 1.5 2,793,000 70.5 69.514 Providence Mutual 1.1 .8 .6 2,547,000 87.7 87.315 Quincy Mutual 1.0 .9 .9 2,179,000 70.0 70.516 State Farm .7 .7 .7 1,584,000 72.2 70.317 Farmers .6 - - 1,462,000 56.6 58.218 EMC .6 - - 1,280,000 66.3 62.919 Ohio Mutual .5 .9 - 1,205,000 50.0 49.520 Hartford .5 .6 .7 1,166,000 50.0 52.1

PRIVATE PASSENGER AUTO PHYSICAL DAMAGE

2012 2011 2010 TotalWrittenPremium: 225,685,000221,077,000 217,830,000PaidtoEarnedLossRatio: 63.6 58.3 61.8IncurredtoEarnedLossRatio:65.3 58.261.0


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2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Allstate 15.7 15.6 15.4 50,382,000 40.0 30.8 2 Amica 13.3 12.8 12.0 42,830,000 34.7 40.1 3 Liberty Mutual 9.6 9.7 9.8 30,687,000 32.7 32.44 Nationwide 8.5 7.2 7.8 27,360,000 44.8 44.2 5 MetLife Auto 5.6 5.7 5.8 18,023,000 34.8 27.4 6 NBIC 5.3 4.6 3.3 16,996,000 30.8 45.5 7 USAA 5.2 5.0 4.6 16,550,000 27.6 29.7 8 Chubb 3.9 4.3 4.5 12,533,000 27.5 27.7 9 Andover 3.7 3.6 3.6 11,982,000 32.2 32.8 10 Providence Mutual 3.2 3.5 3.5 10,241,000 52.1 59.7 11 Mapfre 3.1 3.0 2.9 9,802,000 33.3 26.4 12 Travelers 2.7 3.1 3.3 8,788,000 30.0 25.6 13 NLC Pool 2.6 2.8 3.0 8,468,000 58.4 40.8 14 Amer. Int. Group 1.9 1.8 1.6 6,234,000 20.9 100.8 15 Main St. America 1.9 2.0 2.1 6,129,000 37.1 26.816 Selective 1.4 1.2 - 4,429,000 36.0 33.7 17 United P&C 1.1 - - 3,566,000 33.2 77.1 18 Homeside 1.1 - - 3,439,000 39.6 55.0 19 Country Financial .8 1.0 - 2,696,000 31.0 33.4 20 EMC .8 1.0 1.1 2,648,000 34.8 19.7

2012 2011 2010 TotalWrittenPremium: 321,117,000303,117,000293,653,000PaidtoEarnedLossRatio: 37.2 61.2 44.6IncurredtoEarnedLossRatio:36.7 69.2 44.1

HOMEOWNERS

2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Beacon 59.3 55.3 57.6 101,367,000 74.4 61.52 Hartford 7.7 8.3 8.2 13,103,000 63.4 48.2 3 Liberty Mutual 5.3 5.2 7.7 9,053,000 137.8 162.7 4 Travelers 5.1 4.3 5.5 8,762,000 65.2 32.9 5 Zurich 3.6 2.9 1.9 6,069,000 49.9 41.1 6 Amer. Int. Group 2.3 6.3 3.3 3,864,000 108.9 61.7 7 Berkshire Hathaway 2.0 - - 3,345,000 50.5 69.2 8 MEMIC 1.3 1.5 1.7 2,141,000 80.3 81.0 9 CNA 1.2 1.3 1.7 2,118,000 128.1 109.2 10 Chubb 1.2 1.7 1.7 2,108,000 44.4 63.7 11 Fairfax 1.2 1.2 - 1,999,000 26.2 50.9 12 W. R. Berkley .9 .8 .8 1,500,000 54.1 56.7 13 Meadowbrook .8 .4 .6 1,368,000 43.0 65.7 14 Markel Corp. .7 .8 .8 1,216,000 50.1 62.0 15 AmTrust Financial .7 .5 .4 1,213,000 102.9 102.9 16 Arbella .6 .7 .7 1,060,000 79.8 56.0 17 Old Republic .6 .9 .6 1,006,000 67.6 106.1 18 ACE INA .5 .8 1.1 879,000 244.7 42.4 19 Arch .5 - - 776,000 30.6 90.2 20 Allianz .5 - - 770,000 34.1 88.8

WORKERS’ COMPENSATION

2012 2011 2010 TotalWrittenPremium: 170,943,000 162,073,000147,771,000PaidtoEarnedLossRatio: 76.7 76.9 77.3IncurredtoEarnedLossRatio:66.6 66.4 68.8


MARKET SHARE BREAKDOWN

2012 2011 2010

Nat’l Agcy 11.1 13.5 14.6

State & Reg 27.3 26.5 26.2

Direct61.6 60.0 59.2

special article

2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Travelers 11.0 12.0 12.8 7,469,000 53.8 50.0 2 Progressive 10.2 9.4 10.5 6,939,000 52.1 27.3 3 Liberty Mutual 9.6 10.5 9.3 6,530,000 48.2 45.04 Selective 6.6 6.9 6.9 4,479,000 80.5 45.65 Nationwide 6.5 3.0 3.1 4,397,000 49.0 34.2 6 EMC 6.1 5.5 4.9 4,158,000 43.5 28.8 7 Arbella 4.5 5.4 4.8 3,064,000 34.7 34.5 8 Philadelphia 3.6 3.9 - 2,457,000 37.0 37.99 Hartford 3.5 3.2 3.1 2,484,000 25.5 37.3 10 Zurich 3.3 3.9 3.8 2,253,000 120.2 28.5 11 Hanover 3.2 2.6 1.7 2,195,000 17.2 14.4 12 Main St. America 2.9 2.9 2.7 1,945,000 71.6 68.2 13 Amer. Int. Group 2.6 1.6 3.3 1,754,000 .6 -87.4 14 Ohio Mutual 2.5 2.1 - 1,693,000 23.2 28.7 15 Integon 1.9 1.9 - 1,262,000 49.1 43.4 16 Amer. Nat. P & C 1.7 1.9 1.7 1,144,000 62.2 33.5 17 CNA 1.5 1.4 1.6 1,003,000 54.2 44.8 18 Merchants 1.4 1.4 1.6 981,000 52.7 12.7 19 W. R. Berkley 1.4 1.6 1.6 943,000 32.4 36.9 20 Allstate 1.2 - - 813,000 51.8 64.8

COMMERCIAL AUTO LIABILITY

2012 2011 2010 TotalWrittenPremium: 67,744,000 66,083,000 69,657,000PaidtoEarnedLossRatio: 50.8 46.5 37.8IncurredtoEarnedLossRatio:36.2 42.2 43.3


2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Travelers 11.4 11.5 10.8 1,817,000 49.2 52.1 2 Liberty Mutual 8.1 8.8 8.9 1,295,000 90.6 91.3 3 Progressive 7.4 8.1 9.1 1,183,000 63.2 63.94 Selective 7.2 7.7 7.5 1,151,000 81.4 87.25 Nationwide 6.9 3.0 3.2 1,097,000 45.9 48.2 6 EMC 6.2 5.7 5.2 992,000 66.6 62.4 7 Zurich 4.2 3.9 4.1 674,000 49.2 48.2 8 Arbella 4.1 4.4 3.3 656,000 40.2 42.8 9 Hanover 3.3 2.9 1.9 532,000 58.8 66.810 Hartford 3.1 2.8 3.0 493,000 51.0 53.9 11 Main St. America 2.9 3.0 2.8 468,000 74.8 74.8 12 Philadelphia 2.7 3.0 - 424,000 55.6 62.4 13 Amer. Nat. Group 2.6 3.2 2.9 413,000 56.8 61.8 14 Munich-American 2.3 2.1 2.0 369,000 40.3 43.1 15 Ohio Mutual 2.1 1.7 - 341,000 90.7 97.9 16 W. R. Berkley 2.0 1.7 1.4 319,000 78.0 72.4 17 Integon 1.6 - - 248,000 66.5 61.1 18 Merchants 1.5 1.8 1.8 240,000 139.7 141.7 19 CNA 1.5 2.1 2.0 237,000 31.6 23.0 20 Maiden Group 1.4 - - 219,000 10.3 33.0

COMMERCIAL AUTO PHYSICAL DAMAGE

2012 2011 2010 TotalWrittenPremium: 15,967,000 14,790,00015,437,000PaidtoEarnedLossRatio: 65.2 77.4 71.3IncurredtoEarnedLossRatio:64.6 77.4 70.4

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2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Travelers 10.8 11.9 12.5 5,603,000 44.6 21.6 2 Liberty Mutual 10.6 11.4 11.0 5,515,000 43.0 102.13 Nationwide 9.7 3.4 3.4 5,047,000 82.1 51.1 4 Main St. America 8.1 8.4 9.0 4,226,000 62.7 65.9 5 Philadelphia 6.3 6.4 - 3,280,000 47.1 53.8 6 Chubb 4.7 4.4 3.8 2,478,000 15.1 12.3 7 Hanover 4.2 4.3 2.5 2,198,000 19.1 42.08 Hartford 3.5 4.0 4.2 1,837,000 72.6 87.8 9 Ohio Mutual 3.1 2.6 2.6 1,636,000 16.8 11.1 10 CNA 2.9 2.5 2.2 1,523,000 104.7 20.6 11 EMC 2.9 2.7 2.3 1,514,000 35.3 25.6 12 Merchants 2.4 2.9 2.6 1,261,000 33.6 6.6 13 Quincy Mutual 2.4 2.6 2.4 1,237,000 38.1 3.2 14 Vermont Mutual 2.0 2.0 1.8 1,034,000 20.6 -9.5 15 Allstate 1.9 2.2 1.9 998,000 88.9 10.316 Selective 1.6 1.5 1.4 835,000 19.6 23.3 17 Amer. Int. Group 1.4 1.6 1.6 746,000 29.3 24.8 18 W. R. Berkeley 1.4 - - 731,000 209.2 26.9 19 Zurich 1.1 1.5 - 556,000 8.9 121.1 20 Arch 1.0 - - 526,000 91.4 24.9

COMMERCIAL MULTI-PERIL (LIABILITY)

2012 2011 2010 TotalWrittenPremium:52,001,000 47,318,000 47,015,000PaidtoEarnedLossRatio:57.4 55.955.0IncurredtoEarnedLossRatio:56.0 41.850.5


2012 2011 2010 MARKET MARKET MARKET WRITTENRANK COMPANY NAME SHARE SHARE SHARE PREMIUMS P/E I/E 1 Travelers 8.5 9.4 10.0 7,814,000 56.7 1.92 Nationwide 8.0 4.3 4.4 7,346,000 44.5 36.6 3 Liberty Mutual 7.8 9.1 8.9 7,147,000 18.4 22.2 4 Chubb 7.6 7.5 7.0 6,929,000 23.4 13.15 Hartford 6.0 6.6 7.2 5,507,000 21.6 11.9 6 Zurich 5.5 6.0 4.9 5,025,000 76.9 52.4 7 Allstate 5.1 5.6 5.2 4,632,000 56.0 47.0 8 Philadelphia 3.9 4.0 - 3,534,000 54.9 147.3 9 CNA 3.6 3.1 3.2 3,274,000 27.3 37.0 10 Hanover 3.5 3.5 2.1 3,190,000 29.9 26.2 11 Allianz 2.6 2.5 - 2,414,000 37.6 39.6 12 Quincy Mutual 2.5 2.7 2.9 2,303,000 28.9 16.1 13 Vermont Mutual 2.3 2.2 2.1 2,065,000 25.9 20.1 14 QBE Group 2.2 - - 2,043,000 35.3 30.4 15 EMC 2.0 1.8 1.8 1,805,000 42.1 44.1 16 Great American 2.0 - - 1,784,000 67.9 113.9 17 Greater NY 1.9 2.1 2.2 1,742,000 87.1 65.8 18 Main St. America 1.9 1.7 1.5 1,697,000 28.9 13.3 19 Providence Mutual 1.7 1.8 2.2 1,577,000 35.9 31.6 20 Amer. Int. Group 1.7 1.6 - 1,511,000 11.2 12.9

COMMERCIAL MULTI-PERIL (NON-LIABILITY)

2012 2011 2010 TotalWrittenPremium: 91,435,000 85,440,00081,400,000PaidtoEarnedLossRatio: 40.2 63.0 72.0IncurredtoEarnedLossRatio:37.2 59.583.8

special article

The Rhode Island Workers’ Com-pensation Court is embarking upon a number of significant changes in procedure that will directly reflect the process of insurance applications and renewals. This brief article is intended to touch upon these changes and ex-plain why it is more important than ever that the agent and his/her staff properly identify employers who are insured under a workers’ compensation insurance policy in the State of Rhode Island.

All workers’ com-pensation issues in Rhode Island are liti-gated at the Work-ers’ Compensation Court. While the court is administrative in nature and its proce-dures are different, the constitutional pro-tections afforded its litigants are consistent with any other court. One of these dif-ferences relates to notice. In the Supe-rior Court, a plaintiff files a complaint and engages a sheriff or constable to serve the defendant with the complaint. The complaint is served upon the in-dividual or in case of a corporation, its designated agent for service of process that is identified at the Secretary of State’s office. The defendant has twenty days after service to file an answer with the Court. In the Rhode Island Work-ers’ Compensation Court, a “petition” is filed at the Court by a “petitioner.” If it is a petition filed by an injured

worker against his or her employer, the “respondent” and its workers’ com-pensation insurance carrier is presently “served” a copy of the petition with a notice of pretrial hearing by mail. This mail is now generated by the Court. Legislation enacted by this year’s General Assembly and changes in pro-cedure at the Court are changing this process. These changes will necessitate greater attention to detail in identifying an insured employer in a workers’ com-pensation insurance policy and properly identifying that employer when an injury takes place.

More specifically, the petitioner at the Court will now be responsible for serving notice on a respondent. This means that in the case of an employee generated petition (for example an employee trying to get workers’ compensation benefits), the employee’s attorney will be mailing the petition and the notice of pretrial hear-ing to the employer and its insurance company. This process assumes that the application for insurance properly identifies the employer as the attorney for the injured worker will be relying upon the insurance coverage database at the Department of Labor and Train-ing. It also assumes that the corporate database in the Secretary of State’s Office is up to date with the employer consistently identified with the insur-

New Issues Arise in WC Court:How Agents Can Help

“In the event of a claim, the first report properly and

consistently identifies the employer and the proper

name of the insurance com-pany. If any of these things

do not occur, the proper employer runs the risk of getting defaulted at the

Court.”

Michael LynchVice President, Legal

Beacon Mutual


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ance application and a responsible agent for service of process listed. Finally, the process assumes that in the event of a claim, the first report properly and consistently identifies the employer and the proper name of the insurance com-pany. If any of these things do not occur, the proper employer runs the risk of getting defaulted at the Court.

The Court is now implementing procedural changes to get this new process off the ground. It is dismissing petitions, albeit without prejudice, when the proper parties are not clearly and consistently named. The delays arising from these dismissals cost employers and employees money in the form of indem-nity benefits owed or overpaid.

In summary, it is more important than ever to ensure that parties are prop-erly identified in both the corporate and workers’ compensation setting. Please ask your staff and customers to be diligent in this regard. Failure to do so runs the risk of increased costs and an increase in claims litigation.


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IN DISASTER RESTORATIONRHODE ISLAND’S LEADERRHODE ISLAND’S LEADERRHODE ISLAND’S LEADER

A frequent speaker and writer, Michael D. Lynch is Vice-Pres-ident of Legal Services for the Beacon Mutual Insurance Company. A graduate of Providence College and the Gonzaga University School of Law, he is former president of the Defense Counsel of Rhode Island, a member of the Governor's Insurance Council and lobbies on workers' com-pensation issues at the General Assembly.

special article

As you are aware examples of what you can call for in a background check include some of the following:

As part of your preliminary process-ing of candidates, there should be a com-pleted employment application as well as a signed background release form to complete the background check process. The candidate should be informed at time of interview or screen that such an activity is going to take place.

In the next article, we will deal with other hot human resource topics. If you have done your homework up to this point, this is less complicated than if you haven’t. Thanks for your time. See you next quarter.

Dave Nichols Quality Transitions, Inc.

Avoid Negligent Hiring with Background Checks

This is a continuing article in the series of human resource articles for the “Independent Agent.” My goal is to bring value to your organization in accomplishment of the Essentials of Human Resources. In past articles, we dealt with a variety of topics from hir-ing to termination. Hopefully, your or-ganization has the appropriate systems in place for your workforce that in the event you have to exercise a personnel action that you are in good shape. For this article, we want to discuss or review the importance of background checks in the hiring process.

It is no secret that conducting em-ployee background checks is important, but actually putting this idea into prac-tice is a bit more overwhelming whether your company has five or five hundred employees, nothing good comes out of skipping this critical hiring step.

Negligent hiring lawsuits are continu-ing to increase. These lawsuits occur if an employee does something that hurts someone else; whether it is physical or verbal damage. If this occurs, an em-ployer could be liable and forced to pay high legal fees, and in many cases the entire company’s reputation is sudden-ly at stake. Performing a background check is the easiest and safest way to make sure that a bad apple does not sneak by and cause this damage to the organization.

• Criminal Background• DriversLicenseVerification

and Background History• SocialSecurityVerification• AddressVerification• EducationVerification• Credit (some states do not

allow this today)

Dave Nichols is the principal of a human resource management business, Quality Transitions, Inc. located in Charlestown, Rhode Island. He has 25 years of experience in the field and also retired from the US Army as a Lieutenant Colonel. If you are interested in learning more, please visit his website at www.qualitytransitions.net.


hr corner


ing $120,000 in damages, which was $20,000 more than the policy limit. The plaintiff then sought confirmation of the award in Rhode Island Superior Court. Encompass objected to the petition to confirm, arguing that under Rhode Island law, Encompass could not be made to pay in excess of the policy limits. After hearing, the Superior Court issued a bench decision, holding that an uninsured/underinsured motorist policy limit may not be expanded to include prejudgment interest even though the injured party may be entitled to recover prejudgment interest from the party who caused the injury. Accordingly, the Superior Court confirmed the award except to the extent that it exceeded the policy limit.

The plaintiff appealed the Superior Court’s decision to the Supreme Court of Rhode Island. The Supreme Court held that arbitration awards may only be modi-fied in limited circumstances as specifically provided by Rhode Island statute. For example, Rhode Island law allows for modification where: 1) there is an evident material miscalculation of figures, or an material mistake in the description of any person, thing or property; 2) the arbitrators have awarded on a matter not submitted to them; and 3) the award is imperfect in matter of form not affecting the merits of the controversy. The Supreme Court further held that errors of law are not the type of limited circumstances allowing for modification. It noted, “it is settled beyond a hint of contradiction that a mistake of law is not grounds for upsetting an arbitra-tion award.” Accordingly, the Supreme Court vacated the Superior Court’s decision and remanded the matter back to the Superior Court with instructions to confirm the award, requiring Encompass to pay more than its policy limits.

Wheeler v. Encompass Insurance Company, Rhode Island Supreme Court, 66 A.3d 477 (May 24, 2013).

Summary: The Supreme Court of Rhode Island recently found that the Rhode Island Superior Court, Providence County, had erred in modifying an arbitration award that awarded damages in to an injured insured in excess of her policy limits for uninsured/underinsured coverage. By state statute, arbitration awards may only be modi-fied in very narrow circumstances and the error of law committed by an arbitration panel in awarding damages beyond policy limits was not such a circumstance.

The underlying facts were that the plaintiff, Joyce Wheeler, had been injured in a motor-vehicle collision with an underinsured driver. The underinsured driver was insured by Progressive Insurance Company (“Pro-gressive”) for a liability limit of $25,000 in bodily injury coverage, which policy limit was paid by Progressive. Plaintiff then made a claim under her own automobile policy issued by Encompass Insurance Company (“En-compass”), which provided $100,000 in uninsured/underinsured coverage. Encompass disputed the claim, following which Encompass and the plaintiff agreed to submit the dispute to binding arbitration before a panel of three arbitrators.

The panel found that plaintiff’s damages amounted to $150,000, $25,000 of which had been already paid by Progressive and $5,000 of which had been paid by the plaintiff pursuant to her Medical Payment provision of the policy. The panel held that the plaintiff was entitled to prejudgment interest on the $25,000 paid by Progres-sive and Encompass was responsible to pay the remain-

CASE LAW

NOTE

This feature of The Anchor reviews recent case law involving the insurance industry. Contact the author for more information: Jennifer R. Cervenka, Esq. ([email protected] or 401-861-8228), Partridge, Snow & Hahn LLP.

Superior Court Erred in Modifying Arbitration Award to Reduce Damages that Exceeded Policy Limits

IIARI Annual Meeting Thursday, October 17Crowne Plaza HotelWarwick @ 5:30 P.m.

Mark YourCalendars


pay attention to you. They also expect to receive email offers and already have a high tolerance for them. It’s because most of them are already doing business through email. So, if you have been focusing all of your energy on social media and Web rankings, you may want to take a step back and look at the number one tool in new media – email marketing. Here are some tips for your email marketing campaign:

John HouleJH Communications

The Most Powerful Media Tool is Still in Front of Us All Day Long...Email

I have heard the drum beat from the younger masses that email is dead, but if you’re serious about reaching business people in new media, then email mar-keting is still King. Email has 2.9 billion users world-wide. That is nearly three times as many users as Facebook and Twitter, which combined make up 0.2% of the number of emails sent out each day. And it’s not just social media that email marketing trounces. Web searches made on ev-ery search engine every day equal only 1/100th of daily email traffic. It could be the reason why business investment in email marketing in 2012 increased by 60 percent, since it had a proven Return on Investment of 4,000 percent. It’s completely understandable, when you think about social media today. Most business-minded people are not using Facebook for private, one-on-one conversations. But, business people and consumers are opening their email and connecting with their customers and friends every hour, and sometimes every minute during the business day. Put simply, email is the first, best social media channel. It is the most cost effective mechanism to deliver a mes-sage directly into a customer’s mailbox. A tweet or Facebook update may never be seen, since it may be part of a much larger timeline featuring hundreds of other people. This does not mean that you should eliminate social media in your new marketing strategy. But, your first fo-cus should be email marketing. You, of course, need to say things worth read-ing, and if you do, your customers will

☑ Update your email lists.

You need to go through them and make sure the names are accurate and the emails are current.

☑ Personalize your lists.

Most blast email programs allow you to include a personalized greeting. If a person you email is named Alison, but she goes by Ali, then this should be the name you send to. Set up a field in your contact list of “preferred name,” and use this field for your personalized greeting.

☑ Segment your lists.

The best email blasts are targeted. Whenever you can segment your lists into categories, the more tailored you can make your message. For example, if you can categorize all your auto clients who do not have homeowner’s insurance into a list, you can email this list several times about the benefits of adding homeowner’s insurance.

marketing thoughts


Remember it’s best to focus your mar-keting activities on where your custom-ers are. Today, they’re on their email all day long, and when that paradigm shifts we’ll then reach out to them in another way. Is text messaging next?

☑ Use professional software.

Please don’t send a mass email and blindcceveryone.Useemailsoftware such as Constant Contact or MailChimp, but understand that like withanymarketinginitiative,itisnot 100 percent. Some of the larger companies may block email blast software,butthevastnumberofyour emails will get through.

☑ Keep your message clear/concise.

Your eblast should have one primary message that is to the point. People don’treademailswithflowingtextthatcontinuouslymakesyouscroll down. We’re all too busy, and we simplywon’tinvestthatmuchtime.

☑ Link articles/eNewsletters to a blog.

If you opt to move from a printed newslettertoanelectronicedition,keepyourarticlesshortandonlytoafewlines,andhouseyourfullarticlesonyourblog.Thiswillultimatelydrive people back to your blog and website, where you have the opportunity to sell them your product or service.

John Houle is the president of JH Communications and can be reached at 401.831.6123 or at [email protected].


The Government Affairs Committee had a busy year following the path of several interesting insurance bills that passed as well as following some bills of general business nature. The three most important insurance bills that passed were promoted and sponsored by Rep-resentative Brian Kennedy, Democrat from Hopkinton. Kennedy, a real estate broker and appraiser, is the long-time chairman of the House Corporations Committee. He was the primary sponsor of the insurance binder bill, certificate of insurance bill and a bill that will set up an electronic system to monitor compliance with our mandatory auto insurance law. Kennedy is a re-cent past president of NCOIL the National Conference of Insurance Legislators. NCOIL is a coalition of state legislators from around the country that are heavily involved in insurance legislation in their home state. IIARI member Senator David Bates, Republican from Barrington, is also a member of the NCOIL group. Bates was the primary sponsor of the binder and certifi-cate bills in the Senate. One of the benefits for NCOIL member legislators is that they are able to exchange

ideas and develop “model” legislation which is then brought back to the individual states for consideration by those respective legislatures. This year’s binder and certificates of insurance bills were NCOIL model bills that passed with some minor revisions. Our national association, IIABA, is usually able to have input at the NCOIL level and Mark Male our Executive Vice Presi-dent is able to access those resources and provide guid-ance for us here at the local level. With the same sex marriage issue settled early in the session the end was dominated by the budget. With a last minute revenue shortfall predicted assembly lead-ers had to scramble to find about $30 million. This forced an extension of the session into July. Near the end all the usual forces were at play. Labor unions, body shops and many liberals were promoting their agendas. One of the body shops bills passed that would prohibit an insurer from deeming a vehicle with less than 75% damage a total loss unless the insured signed to agree that the vehicle was a total. The labor unions almost passed a bill that had the business com-munity very concerned and would have changed the definition of an employee for the purpose of wages and benefits. The bill would have stricken the tried and true IRS definition of who is an employee versus who is an independent contractor in favor of letting the Rhode Island Workers Compensation Court decide who is an employee.

Ernest Shaghalian, Jr., CPCU, AAIGovernment Affairs ChairAlpine Insurance/Ernest Shaghalian Insurance Agency, Cranston

LEGISLATIVEWRAP-UP

BUSY INSURANCE YEAR AT GENERAL ASSEMBLYBinders, Certificates & Compliance with Mandatory Auto Insurance Enacted

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INSURANCE LEGISLATION PASSEDBINDERS (H5444/S 377) “Model Act Regarding Use of Property and Casualty Insurance Binders as Evi-dence of Coverage” This law goes into effect Octo-ber 1 and codifies statute rules for the use of insurance binders. One important item of note is this law man-dates that once a binder has been issued that the insurer must either issue a policy or cancel the binder. Up until now if a binder was issued it could expire without any further notice if a policy was not issued. Under the new law if the insurer decides to not issue a policy the in-surer must cancel the binder.

CERTIFICATES OF INSURANCE (H5607/S387) “Certificates of Insurance Model Act” This bill puts into law prohibitions and penalties against altering or issuing certificates with false or misleading informa-tion. It also dictates that notice requirements for certifi-cate holders is determined by the policy of insurance not by any language on the certificate itself.

COMPLIANCE WITH MANDATORY AUTO IN-SURANCE (H5438/S771) About five different bills were introduced to deal with the cost caused by the uninsured motorist population in Rhode Island. Our Association originally had no position on these bills. Mark Male and I attended a February House Corpo-

rations Committee hearing and listened to the testi-mony. A bill promoted by the insurance companies would have set up a system which would allow the DMV at the time of registration or police at the scene of an accident/violation to check a database to verify insurance. That bill would not have addressed indi-viduals who drop their insurance after the registering their vehicle. Another bill would have allowed cam-eras across the state to record license plates, identify the registered owners and cross check insurance rolls to verify if an insurance policy was in force. The bill that passed, Chairman Kennedy’s bill, will call for a vendor to match on a monthly basis the DMV’s list of registered vehicles and validate that list against a list of insured vehicles provided by all insurers. Any vehicle owner’s car that is registered and not insured for three consecutive months would be required to provide proof of insurance or face a suspension of registration and a $250 fine. At the February hearing a vendor testified they’ve done this in other states. The DMV testified that Kennedy’s bill would be the system easiest to set up and administer. We ended up supporting Kennedy’s bill and testifying in favor of it at a later hearing. This bill was signed into law by the Governor and is slated to be effective July 1, 2014.

CONTINUED ON PAGE 35

special article

James C. Keidel, Esq. Partner

Keidel, Weldon & Cunningham, LLP

Christopher B. Weldon, Esq. Partner

Keidel, Weldon & Cunningham, LLP


we recommend agencies and brokerages scan every certificate they issue and then attach the scanned copy of the certifi-cate to an insured’s electronic file in the agency management system. However, if your agency or brokerage is unable to complete this task for any reason, or if the agency or brokerage only maintains paper files, we then recommend you print out and then retain a paper copy of the certificate that was actually issued. By doing so, you will preserve a copy of the certificate in the form in which it was actually issued and be able to present it in its true form in the event it is needed if an issue or claim arises. Electronic delivery of insurance poli-cies and other insurance documents is another area of technology where we fre-quently receive questions from agencies and brokerages. If you have attended one of the loss control seminars that we have presented you may have heard us say that one of the best defenses available in E&O claims and lawsuits is the insured’s duty to read his or her insurance policy. However, in order to rely on this defense in an E&O lawsuit, the policy must have been sent to the insured prior to the loss. In connection with this defense, you may have also heard us discuss the legal presumption of mailing that exists in the courts. That is, if the mail sent pursu-ant to an established office practice and procedure, it is presumed by the courts to be received by the recipient. It is for this reason that we suggest insurance policies be mailed to insureds. Many insurance agencies and brokerages are now deliver-ing insurance policies and other insur-ance documents to insureds in electronic form and not on paper. For this reason, we often receive inquiries from agents

Issues to Consider Concerning Agency Technology

We regularly receive phone calls from independent agents with questions on a wide variety of topics. Frequently, the topics relate to concerns regarding an agency or brokerage’s technology. Because technology issues seem to be a primary area of concern for so many independent insurance agents and bro-kers, we are sharing in this issue of The E&O Corner some of the more common technology questions raised to us. Almost one-half of all new errors and omissions claims, incidents and lawsuits that we defend for independent insurance agents and brokers involve, in one way or another, certificates of insurance. As such, it is important to have copies of the actual certificates issued by the agency or brokerage. Unfortunately, some agency management systems will only save the text of a certificate that is issued but will not save the date the certificate is issued. As such, each time a certificate of insur-ance is reprinted, it will show a new date for the certificate. When this happens, there can be a problem in defending an E&O claim or lawsuit because the reprinted certificate will not be a true and accurate copy of the original certificate that was actually issued by the agency or brokerage. This may also be an issue with applications, binders and evidence of insurance. If the agency management system does not save an exact copy of the document that has been prepared the agency or brokerage should then likewise for these documents keep a scanned copy or a hard copy of the document that was actually issued in the insured’s file. In order to rectify the problem that exists when agency management sys-tems do not save copies of the actual certificates of insurance that are issued,

e&o corner

can also automatically delete e-mail or classify it as junk mail. Therefore, the best practice for any agency or broker-age to follow in order to prove receipt of a policy sent via e-mail is to request that the recipient provide a response. There are also several website vendors which provide the ability to deliver documents through a down- load confirmation site. The way that these web- sites work is as follows: the policy is up- loaded to a website, the website sends an email to the insured to down-load the policy from the website and then when the insured downloads the policy, the website sends a confirmation back to the agency that the policy has been ac-cessed and downloaded. If technology is used incorrectly by an agency or brokerage, it could hinder the defense of an E&O claim or lawsuit. However, the prudent insurance agency or brokerage can use technology in a way that can help it be more efficient, provide better customer service, and also help protect against a potential E&O claim or lawsuit. Please feel free to contact us to discuss these and other technology issues that could protect your agency or bro-kerage as we move farther into this new technology world.

and brokers as to whether they can safely send insurance policies to insureds by e-mail instead of by US mail. Unfortunately, at this point in time, there is no presumption of receipt for e-mail similar to the presumption for items sent via US mail. Nevertheless, there are still ways an agency or brokerage may safely send electron-ic copies of policies to insureds in lieu of mailing. If an agency or brokeragedesires to email pol-icies to an insured,or deliver them by some other electron-ic means, the agency or brokerage should first obtain the in-sured’s written consent and understand-ing that from this point forward their policies will be sent electronically and, as a consequence, they will not receive a paper copy. Although this is currently not required to be done in Rhode Island, in some states the agency or brokerage is required to obtain an insured’s prior writ-ten consent before delivering insurance policies electronically. A sample of the language contained in the authorization to be signed and dated by the customer relating to electronic delivery of insur-ance documents should read something to the effect of the language shown in the table. We also suggest that when the policy is forwarded to the insured via e-mail, the agency or brokerage should attempt to receive back from the insured an af-firmative response acknowledging the insured’s receipt of the e-mailed policy. An agency or brokerage should never rely on simple automatic reply receipts to confirm that an e-mail that was sent was in fact received since sometimes they are falsely generated by e-mail server configurations. Also, antivirus software can delete and quarantine attachments preventing the recipient from receiving the attachments, and anti-spam software


The law firm of Keidel, Weldon & Cunningham, LLP concentrates its practice in handling errors and omissions claims, litigation and loss control for insurance agents and brokers. Please direct any comments or questions to either James C. Keidel or Christopher B. Weldon either by mail at the firm’s Rhode Island office located at 303 Jef-ferson Boulevard, Warwick, RI 02888, or by email at [email protected] or [email protected] or by telephone at 401-773-7730. The firm also maintains offices in White Plains, NY; Syracuse, NY; New York, NY; Wilton, CT; Philadelphia, PA and Bayonne, NJ.

This is to acknowledge that as of the date set forth below I have requested that the _____ agency provide me with electronic copies of my insurance documents. In addition, I further acknowledge my understanding that until such time as I specifically request in writing to the agency that this procedure be changed and the agency acknowledges its receipt of that request, I will only receive electronic copies of my insurance documents and I will not receive paper insurance documents.

Copyright 2013, Keidel, Weldon & Cunningham, LLPAll rights reserved


in more than $1.3 billion in paid flood insurance claims and many of the affected areas—particularly in the Northeast— were not prepared for a storm of that magnitude. Areas of New York, which hadn’t experienced a hurricane since 1985, Vermont, and northern New Hampshire all reported flash flood-ing. At least 26 river level records were broken from North Carolina to Vermont, and storm surges of three to six feet caused property damage along New York and Connecticut coastlines. Rivers in six Northeastern states reached Base Flood levels (a major flood event that has a one-percent or greater chance of occurring in any given year).

Irene demonstrated that hurricanes and tropi-cal storms are powerful systems that can travel far inland from the initial strike zone bringing powerful and heavy rains. Despite the risks, many home-owners did not think they would be affected by a devastating storm. Mary Martin and her family were forced to leave their Vermont home because of major flooding. By the time Hurricane Irene had dissipated, the Martin’s home was 85 percent dam-aged. Fortunately, they had flood insurance, and

Major hurricanes and tropical storms can hap-pen anytime during hurricane season, which spans from June 1 through November 30. However, peak hurricane season, which takes place mid-August through late October, is particularly active. Last year alone, there were 15 named storms between August and October whereas there were four named storms throughout the rest of hurricane season. Re-mind your clients of their increased risk for flooding during peak hurricane season and encourage them to purchase a flood insurance policy today.

Sandy, a recent peak hurricane season storm that is likely most vivid in everyone’s memory, made landfall on October 29, 2012. To date, there have been nearly 125,000 paid losses as a result of San-dy, totaling more than $6.7 billion in paid claims. Although Sandy was felt by many to be an anomaly, the National Oceanic and Atmospheric Administra-tion released research that suggests that later season storms tend to be larger.

In August 2011, Hurricane Irene left a devastat-ing imprint on the East Coast. The storm resulted

SPECIAL ARTICLE:Prepare Your Clients for Peak Hurricane Season

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the $450 annual premium was negligible when compared to the damage their house and belongings sustained. As an insurance agent, it’s important to ensure your clients are financially pre-pared for the next flood. Although your clients might not think that they’re at risk, floods can happen anytime during the year—especially during hurricane season. And, just a few inches of water can cause tens of thousands of dollars in damage.

At Agents.FloodSmart.gov, you can find tools and resources to help you have the flood talk with your clients, includ-ing speaking points and barrier busters to assist in getting the conversation started. You can use the Cost of Flooding Tool to illustrate just how much damage even a small amount of water can cost to repair a client’s home. You can even embed the tool on your website for easier access. In addition, feel free to share our compel-ling video testimonials with your clients to illustrate the devastating effects of a


Patricia Malafronte Celebrates 50 Years Do you remember what you were doing in August of 1963? Most people reading this article may not even have been born yet. On that date, 50 years ago, Patricia Malafronte started working at John Andrade Insurance Agency, Inc. “At the time there were two support staff and we needed to hire a third due to our growth. We passed the word out and then the owner of Hope Hardware recommended Pat, 19 years old at the time,” recalled John P. Andrade, Chairman. Pat has had many responsibilities over the years, but Pat is doing what she does best right now and that is welcoming the public with a smile and caring voice. “John and I are truly blessed to have the commitment, loyalty and stability that Pat stands for as an example to our office staff and the community at large,” added Mark W. Matrone, President. Congratulations Pat on your first 50!

Agents IN Action

flood. If you need information on selling and servicing flood insurance, refer to the Agent Field Guide.

If you haven’t already registered for the Agent Referral Program, then you’re missing out on free qualified leads. Pro-spective clients who visit FloodSmart.gov can enter their address into the Agent Lo-cator Tool and be connected to an agent in their area from FloodSmart’s Agent Refer-ral Program database. Additional oppor-tunities for leads come from FloodSmart direct mailings and the NFIP Referral Call Center, so join now.

Also, be on the lookout in early fall for the improved Agents.FloodSmart.gov, just in time for peak hurricane season. The refreshed site will feature easier naviga-tion with more robust search functionality, making it easier for you to find the tools and resources you need to market and sell flood insurance.

special article


Michael LynchVice President, Legal

Beacon Mutual

this change;

Statutory Death Benefits. The burial expense in death cases in-creased by $5,000 from $15,000.00 to $20,000.00;

The “Gate”. The bill again extends and continues the use of the 1990 definition of the term “material hindrance” for purposes of an injured worker receiving more than 312 weeks of partial incapacity benefits;

Jurisdiction. Three procedural bills passed regarding the authority of the Supreme Court to call back retired Workers Compensation Court judges to hear cases.(S488, S545 and H 5663);

Information Sharing. As an indirect result of access to in-formation legislation passed last year, changes were necessary in the way in-formation concerning workers’ compen-sation claims could be obtained from the Department of Labor and Training;

One bill that did not pass and that may come up again next year would have given the Workers’ Compensation Court authorization to determine employment issues on complaints filed with the De-partment of Labor and Training alleg-ing misclassification, i.e. independent contractor vs. employee. This of course would increase the caseload of the Court and bears close watching in future Gen-eral Assembly sessions.

WORKERS’ COMPENSATION ADVISORY COUNCIL

The Workers’ Compensation Advisory Council has two active subcommittees

In its 2013 session, the Rhode Is-land General Assembly made relatively minor changes to the workers’ compen-sation laws of our state. Also an impor-tant decision was recently rendered by our Supreme Court. Additionally, the Workers’ Compensation Court and its Medical Advisory Board have made some significant changes to procedures and protocols. The following summary should help you navigate through one of the best functioning workers’ compen-sation systems in the country.

LEGISLATION The Workers’ Compensation Advi-sory Council fashioned an “Omnibus Bill” and made recommendations for legislative change. (S951 and H6164). The General Assembly considered those recommendations and, after hearing, passed the bill and the changes became law on July 16, 2013. The following is a summary of what occurred at the General Assembly this year that impacts workers’ compensation:

Uninsured Employers Fund. The General Assembly created an Un-insured Employer Fund in 2007 but has yet to capitalize its operation. This year, the General Assembly again delayed the Fund’s operation until funds are avail-able and its applicability to injuries that occur on and after January 1, 2015;

E-Filing Initiative at the Workers’ Compensation Court. The Court is spearheading the Rhode Is-land Judiciary’s efforts in going paper-less by mandating the electronic filing of petitions early next year. Statutory changes were necessary to implement

Workers’ Compensation: What is Going On?

wc update


The Court is also overseeing efforts, and working with the Executive Office of Health and Human Services (EEOHS), to revise the Rules and Regulations of EEOHS regarding Medicaid and Child Support liens in workers’ compensation and help streamline its processes.

RHODE ISLAND SUPREME COURT

The Rhode Island Supreme Court rendered a decision in Nichols v. R & D Construction 60 A. 3rd 932 (2013). In its opinion, the Court affirmed the Ap-pellate Division and the Trial Judge in finding that the 312 week “Gate” applied in cases where employees were working and collecting varying partial benefits and that working at a modified position did not qualify as a “material hindrance” thus not entitling the injured worker to more than 312 weeks of partial incapac-ity benefits. More importantly, the Court rejected a constitutional challenge to the 312 week “Gate”. This maintains the status quo and upholds the reforms of the 1990’s.

MEDICAL ADVISORY BOARD On May 21, 2013 the Board adopted a revised Pharmaceutical Protocol and a Chronic Non-Interventional Non-Can-cer Pain Protocol. These two protocols guide the prescribing and use of opioids in workers’ compensation in Rhode Is-land.

In conclusion, many developments continue to occur that both directly and indirectly impact our state’s well func-tioning workers’ compensation system. Without staying aware, our system and its efficiencies could shift to the detri-ment of its primary stakeholders; the employees and employers of our state. Please feel free to contact anyone here at Beacon with questions in regards to the above.

meeting in advance of next year. The first is studying the employer’s burden of proof in prosecuting petitions to re-view at the Court. The second subcom-mittee is working to implement change at the Donley Center consistent with re-cent legislative and protocol change.

DEPARTMENT OF LABOR AND TRAINING

The Department’s Fee Schedule Task Force is actively meeting and it is study-ing all medical fees, including the cost of pharmaceuticals. It is expected that the Director will be making changes to the medical fee schedule this fall. The Department also just announced that the assessment on insurers and self-in-sured employers of 6.75% will remain the same for fiscal year 2014. This as-sessment funds the entire Rhode Island workers’ compensation system.

WORKERS COMPENSATION COURT

The Workers’ Compensation Court has amended its Rules of Practice as approved by the Supreme Court and adopted on April 2, 2013. The changes include consideration of:

• The increase in jurisdiction of the Court to include “Injured on Duty” appeals for police and fire personnel from the State Retirement Board;

• Appeals from determinations made by the Medical Advisory Board on physi-cian suspension;

• Rules on submission of a PPN to the Medical Advisory Board and various trial practice changes.

The Chief Judge is chairing the con-tinuing Donley Center committee as referenced above. The Committee is seeking to broaden the mission of the Donley Center to include the non-inter-ventional treatment of chronic pain and helping to prevent reliance on narcotics and to get injured workers with chronic pain back to work.

www.iiaba.net/Flood

Don’t get caught - Big “I” Flood can help!Failure to offer flood insurance to each of your personal and commercial clients can create an enormous E&O liability for your agency. Why risk facing lawsuits from clients who experience flood damage? Make documenting your offer of flood coverage part of your agency’s Best Practices. Not only will you protect your agency, your clients have an opportunity to purchase this important coverage. And Big “I” Flood has the forms to use!

Big “I” Flood provides:ACCESS - In, Above & Outside of the NFIP!EDUCATION - Classroom CE or the new Flood Learning Center on VUADVOCACY - Representation on Capitol Hill & NFIP advisory committees

Learn more at www.iiaba.net/Flood, or contact Big “I” Flood Program Manager Linda Mackey at [email protected] or (800) 221-7917. Let us explain how we operate in, above, and outside the NFIP!


LEGISLATIVE UPDATEContinued from Page 27

Workers Compensation court for determination. This would have subjected many businesses to two sets of rules one by the IRS for taxes and another set of rules for state wages and benefits. This was a union backed bill that was poised to become law near the end of the session but seems to have been fought off by the busi-ness community including many of the Chambers of Commerce, our Association, Terry Martiesian our leg-islative lobbyist and others.

BIWEEKLY PAY (S980/H6065) This was a business backed bill that passed but only after labor was able to extract a requirement that biweekly pay would only be allowed if the employer paid wages to employees which averaged two times the minimum wage or $16.00/hour. Rhode Island is about the only place in the nation that biweekly pay is not allowed. Effective 1/1/14.

ALCOHOL RELATED TRAFFIC OFFENSES EX-PUNGEMENT (H5664/S489) This bill will keep driver’s alcohol related traffic court offenses on their driving record for five years instead of three years. This will make the Traffic Court/MVR rules the same as District Court on alcohol offenses. Drivers apply-ing for insurance will have these alcohol violations on their MVRs for five years instead of three. Surcharges can only be levied for three years but these convictions can cause someone to be declined because of a major conviction during the last five years.

I’d like to thank the Government Affairs Committee. Besides tracking legislation each year, members attend legislative fund raisers on behalf of our IIARI PAC. It’s important that we attend these to show our presence as local insurance people and get our message out. We need our membership to contribute to our PAC. If you haven’t done so already please make a contribution. There are many groups fighting for their cause and it’s important that we do as well.

Any Association members that wishes to read any of the actual pieces of legislation above or review our Bill Log that includes all the bills the Committee tracked can contact Maureen McNamara at Association head-quarters.

TOTAL LOSS DETERMINATION (H5263/S465) The auto body shop lobby was able to get this bill passed and made major changes to the bill this year which prevented it from being vetoed by the Governor. This year’s bill will prevent a vehicle with less than 75% of damage, based on book value, from being deemed a total loss unless the insured agreed and signed a form to allow the vehicle to be deemed a total loss. If the vehicle has more than 75% damage the insurer can deem the vehicle a total without the insured’s permis-sion. The Governor signed this legislation and became effective upon passage. Last year the body shop bill vetoed by the Governor had a provision that allowed body shops to sue insurers if they didn’t agree on body shop labor rates and had a total loss provision which required a vehicle to be repaired regardless of the in-sured’s preference if there was less than 75% damage. This year the labor rate issue was a separate bill which didn’t pass.

WORKERS COMPENSATION (H6164/S951) This bill will make some procedural changes including notice requirements and increase burial benefits to $20,000 (from $15,000).

TRAVEL INSURANCE (H5453/S376) This bill estab-lishes requirements for travel insurance producers and agents who sell travel insurance.

OTHER LEGISLATIONCRIMINAL BACKGROUND CHECK (Ban the Box) (S357/H5507) This bill becomes effective January 1 and prohibits an employer from asking about criminal convictions on the initial application for employment. The employer can ask during an interview. There are some exemptions for certain classes of employers when a conviction would legally preclude employment.

EMPLOYEE CLASSIFICATION (S368/H6153) This bill did not become law but came very close to doing so. The bill passed the Senate and was sent to the House for concurring approval. The bill would have changed the definition of who is an employee versus who is an independent contractor. The legislation would have stricken from Rhode Island law the long standing IRS definition and placed the matter into the Rhode Island

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