MAIA News: In this Issue... March 26, E&O Update: Does Your Agency Perform the Mirror Test? 3. Auto News: Documenting Transfers of Insurance 4-5

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1 MAIA News: Gove & Feldman Newest Five Star Agency MAIA is pleased to announce that Gove & Feldman Insurance Agency of Rockport, MA recently earned the Five Star Agency Designation after undergoing an intensive review process. The Five Star Agency Designation is awarded by MAIA to independent agencies that go through a vigorous review based on five imperatives: Customer Focus, Management/Leadership Excellence, Human Resource Excellence, Product & Process Excellence and Future Success Initiatives. Upon earning a qualifying score, an agency becomes a Five Star Agency Designee. In the past year this Agency has made great strides. From a physical perspective they built a new office that is more professional in look and feel and shows a true commitment to the community that they serve. They changed their name from Gray, Gove and Gove to Gove and Feldman, keeping with their history but better reflecting who they are today. In addition to these visual changes, they have also defined their mission and vision, illustrating who they are, what they value and where they want to go in the future. They have restructured themselves to become more efficient, using their people capabilities to the best of their abilities. While going through all of these changes they have always stayed focused on their business of service, their customers and providing them with the best value and service possible. Because of these items I mention, as well as many more outstanding characteristics, they have clearly established themselves as a Five Star Agency, and we congratulate them on their accomplishments and their continued success, said Frank Mancini, President and CEO of MAIA. Bruce Feldman, owner of Gove & Feldman Insurance Agency, noted: While we have been transitioning our agency and working hard on many improvement initiatives, we have remained constant with our goal of providing our customers with superior service and the best protection available for their assets. Our employees are an integral part of all that we do, and we fully value their contributions. Regardless of what is going on, they work towards servicing our clients; working with great integrity, with a smile on their faces and putting the best foot forward for our Agency. David W. Murphy David W. Murphy, CPCU, a former President of one of MAIA s predecessor associations, passed away on January 21. Mr. Murphy served on the Board of Directors of the Independent Insurance Agents of Massachusetts (IIAM) from and was the association President in Mr. Murphy joined Stevenson & Company, a Pittsfield insurance agency, in 1966 and retired as the agency s President in Prior to being with the agency, Mr. Murphy was with the Travelers in its Springfield office. During Mr. Murphy s years with Stevenson & Company and in Berkshire County, his volunteer work benefited a wide range of organizations including: Pittsfield Little League, Pittsfield Girls Club, Hancock Shaker Village, Berkshire Center for Children and Families, American Red Cross, Berkshire Housing Development Corp. and St. Teresa and Sacred Heart parishes. Mr. Murphy was predecesaed by his wife of 53 years, Callie Murphy. He leaves three sons, two daughters and 19 grandchildren. In this Issue... March 26, 2015 MAIA News: Gove & Feldman Newest Five Star Agency 1 David W. Murphy 1 Education News: 2015 Oustanding CSR of the Year 2 Industry News: Ride-Sharing Insurance Update 2 Vermont Mutual s Catto to Retire 2 E&O Update: Does Your Agency Perform the Mirror Test? 3 Auto News: Documenting Transfers of Insurance 4-5 More Auto News: New Law Re. Use of Headlights 5 Automation News: Please Complete AUGIE Survey 5 Opinion Piece: Study Shows Everybody Loves Older Workers 6 Thanks Company 6 Partners

2 MAIA Education News: 2015 Outstanding CSR of the Year... You or someone you know may be the next Outstanding CSR of the Year! 2 Nominate the National Winner and Receive a $1,000 cash award! Nominations are now being accepted in all 50 states and Puerto Rico for the 2015 National Outstanding CSR of the Year. This award is the highest honor for insurance customer service representatives who have distinguished themselves through contributions to their industry and profession. Open to everyone regardless of affiliation or professional designation, candidates must: Be an insurance customer service representative, or have primary responsibility for customer service duties. Write an essay of no more than two pages double-spaced (approximately 1,000 words) on a topic, In today s political, economic, and social environment, the use of the English language has undergone significant change. Even in our insurance industry, words, partial words, and titles can have a multitude of meanings some of which are unclear and even vague. In the current insurance agency environment, the meaning of the term, "Customer Service Representative," has frequently been replaced with the terms "Account Manager," Account Executive," Client Service Advisor," etc. In your judgement, is there any important difference in the meaning of these titles in terms of one s knowledge, expertise, compensation, and responsibilities? Do you believe these different titles make a difference to your clients, coworkers, and insurance companies? Submit letter(s) of recommendation from a professional reference(s). To nominate a colleague or co-worker, click here for the Nomination Form. You may also nominate yourself by using this form. Industry News: Ride-Sharing Insurance Update... According to an article in the Pittsburgh Post-Gazette, Progressive is offering an auto insurance policy that will cover Lyft drivers in Pennsylvania under a pilot program. The company s ride-sharing auto insurance policy replaces the Lyft drivers existing personal auto policy and will provide coverage for qualifying drivers while they are using their vehicles personally or when they re on the clock with Lyft. The Progressive program is limited to Lyft drivers only. The ride-sharing product offered by Geico Commercial is also designed to replace the driver s personal auto policy with coverage for both personal ride-sharing needs of Uber and Lyft drivers at significantly lower rates than that of taxi and commercial policies. Geico is offering the product in Virginia, recently received approval for its use in Maryland, and hopes to roll out the product in more states this year. In February, USAA began a pilot program in Colorado that provides TNC company drivers the option to purchase ride-sharing insurance. At the end of February, USAA announced it will introduce a similar product in Texas for members driving for ridesharing companies. The USAA policy offers coverage from the moment their mobile app is turned on until they are matched with a passenger. USAA charges between $6 and $8 a month for the ride-sharing coverage ( which SEEMS to END when the real ridesharing BEGINS). We re keeping our ear to the ground on this entire issue. It s our understanding that the Baker Administration is re-examining the Ride-Sharing regulation which was hastily implemented at the beginning of the year over the strong opposition of the taxi and limo operators. You will recall that MAIA and other insurance organizations provided testimony on the insurance requirements contained in the original version of the regulation. We ll keep you posted! In the meantime, if you have questions or need additional information, feel free to contact Donna McKenna by at dmckenna@massagent.com or by phone at or Vermont Mutual s Catto to Retire Vermont Mutual Insurance Group has announced that Group President and Chief Executive Officer, William A. Catto, CPCU, will retire from the company on June 30, Catto s distinguished career in the property casualty business spans more than 40 years. Prior to joining the Company in 1995, he was President of the Granite Mutual Insurance Company in Barre, Vermont, which is now an affiliated member of the Vermont Mutual Insurance Group. After 17 years of helping to lead the Group in his role as Executive Vice President, Catto was elected President of the Group companies in 2012 and Chief Executive Officer in In announcing the Group plans, Catto noted It has indeed been a privilege to serve as President and CEO for this group of companies that is so well respected in the industry. The dedication of our employees and the commitment that we share with our Independent Insurance Agency Partners have produced historically exceptional results for our company and policyholders. I am confident that the transition plan we initiated several years ago will enable Vermont Mutual to sustain superior operating performance and financial stability, and maintain our position as a highly regarded insurer throughout the Northeast. Under Catto s leadership, Vermont Mutual has experienced significant growth and has been recognized by Ward Group as a Top 50 U.S. Property and Casualty company for six straight years. Additionally, in December 2014 Vermont Mutual was upgraded to A+ (Superior) by international rating agency A. M. Best Company. After his June retirement, Mr. Catto will continue to play an integral role on Vermont Mutual Insurance Group s Board of Directors.

3 March 26, E&O Update: Does Your Agency Perform the Mirror Test? by Curtis M. Pearsall, CPCU, AIAF, CPIA President Pearsall Associates, Inc and Special Consultant to the Utica National E&O Program Ask virtually any agents errors-and-omissions carrier what it sees as its biggest issue/cause for concern and replacement of coverage will likely be in the top 3. After all, how often does an agency replace coverage for a client, moving the coverage from Company A to Company B? It occurs many times in a week, or possibly in any given day, at most agencies. will probably say that he or she wanted to save money, but was not looking to give up coverage. Bottom line, the client may take the position that he or she never would have approved you moving the account if he or she was aware coverage was being given up. There are several areas of possible difference. The more common include sub-limits, the actual coverage grant, specific endorsements, definitions for areas such as who is an insured, what is excluded on one policy compared to another, and the carrier s financial rating. In E&O policies, the scope of the covered professional services can vary greatly from one carrier to another. There have been E&O claims where the retro-date on the claims-made form was advanced, resulting in no prior-acts coverage. Many insurance clients carefully watch their insurance costs. At some point, they will express concern about the cost or, at a minimum, advise your agency that they believe they are paying too much for their insurance, adding that they might get coverage cheaper elsewhere. Fearful of losing the account, your agency might remarket the account to several of your other carriers. When you present the new proposals to your client reflecting the lower premium, it is possible he or she will focus strictly on the opportunity to save money. However, there s an important question to answer: Is the premium lower because the coverage is less? Note the Differences The key issue as you look to move the account from Company A to Company B is the possibility that the coverage with Company B is not as broad as Company A. If so, are the differences more so the reductions being brought to the client s attention and his or her signoff secured? The courts often refer to this as the Mirror Test. Attorneys could argue that failure to advise the client of the differences would lead the client to believe the coverages were at least the same. Think back over the last several years. Chances are your agency had some clients, personal and commercial, who were adamant in wanting some premium relief. Ask most agency staff when was the last time they moved an account and they will probably say yesterday or this morning. It definitely happens with some frequency. In addition, from time to time your agency may need to move an account from the standard to the E&S market. What could happen? Presume you move the account to another carrier where the coverage is not as broad in some areas. The client subsequently suffers a loss that would have been covered by Company A, but is not covered or not fully covered by Company B. If this happens, in all likelihood the client will question your agency about why the coverage was moved. The client The Best Approach The best approach is to take all the carriers you are considering and put the details on a spreadsheet, noting the various pertinent issues. This will take time, but it will be time well spent. On the spreadsheet, it is crucial to note the differences because simply moving the account and not advising the client of the differences could cause a problem down the road. Some agencies share this spreadsheet with the client and bring to his or her attention the detail the client needs to know. Most importantly, the client sees the differences and can make an educated decision. At a minimum, the reductions between the expiring policy and the other carriers you are considering should be brought to the client s attention. When the client has made his or her final decision, secure the client s signature noting which decision was made. This documentation will be vital if a claim occurs and your client finds out he or she didn t have the coverage the client thought. While your client may chose the lower price with the lesser coverage, your agency should have a defense should a problem occur if the client s decision is in writing. Based on market conditions, from time to time agencies will find it necessary to move coverage from the standard market to the excess-and-surplus-lines market. In these situations, the differences can be significant. This issue is further compounded by the fact that it is probable the wholesaler is not providing all of the coverage that was requested. Therefore, be sure to review the E&S proposal, comparing it to the prior policy and to the coverages requested. Identifying the differences is up to your agency to uncover. A Great Way Perform the necessary comparison when coverage is switched for a client from one carrier to another. This involves identifying the differences, bringing those differences to the client s attention and getting his or her written sign off. This is a great way to keep this issue from becoming a potential E&O problem in your agency.

4 Auto News: Documenting Transfers of Insurance... We ve received quite few complaints from members regarding the information some insurers are requiring in order to cancel or non-renew a policy. Most notable was a complaint about Allstate. Fortunately, we were able to resolve the matter (after a fashion) directly with the insurer. Below is the text of our complaint letter sent to Allstate: To whom it may concern: I have on my desk this morning 13 pieces of paper representing a Massachusetts independent insurance agent s attempts to notify Allstate that a consumer has purchased a new policy with a different company and requesting the Allstate agent to cancel the old policy. The first Transfer of Insurer notice went out on 10/21/14 indicating that the insured was transferring to the new agent on 11/8/14, the date the Allstate policy was due to expire. Two other notices on 12/10/14 and 1/14/15 were also met with a refusal on the part of Allstate to cancel the policy. In addition, the agent has made numerous telephone calls to Allstate in an effort to get the 11/8/14 renewal policy cancelled flat back to the inception, since it never should have been renewed. The agent finally came to us for assistance. Before we file a formal complaint with the Division of Insurance and the Office of the Attorney General, I decided to make one more attempt to get this matter resolved. As you can see from the printout from the Registry of Motor Vehicles computer, the new insurance carrier has filed a new certificate of insurance with the RMV effective 11/8/2014. The new certificate of insurance filed by the new carrier with the RMV should have triggered the Automatic Termination provision of the MA Auto Policy: 4 Automatic Termination Massachusetts law provides that your policy automatically terminates and a Notice of Cancellation will no be sent to you when: 1. You return the registration plates for your auto to the Registry of Motor Vehicles. 2. You purchase a new policy with another company covering your auto and a new Certificate of Insurance is filed with the Registry of Motor Vehicles. 3. You transfer title to your auto, and you do not register another auto. In this case, the policy will terminate 30 days from the date of transfer of title. However, if more than one auto is described on the Coverage Selections Page, the termination of coverage applies only to the auto involved in an of the situations described above. I d like to remind you that the Division of Insurance issued a regulatory bulletin (Bulletin ) regarding documenting transfers of insurance which is still an active bulletin today. It says, in part: Certain producers failure to comply with the notification procedures on a timely basis has resulted in instances in which consumers have found themselves with duplicative coverage and obligations for two premiums. Some consumers records also may be affected negatively by these practices. If the prior insurer cancels the policy for nonpayment because the prior producer failed to notify the prior insurer that the consumer had transferred his/her policy to a new insurer, an insured may be wrongly identified as someone who failed to pay the premium. Consumers have a statutory right to cancel insurance on a registered motor vehicle at any time and to obtain coverage from another insurer, subject to certain conditions, pursuant to M.G.L. c. 175, 113A(2). They also may choose not to renew insurance at the end of a policy period and to replace it with a policy from a different insurer. The Division will not tolerate any interference with these substantive consumer rights. The producer of record for the new policy must notify the prior producer of record, if known, or the prior insurer of the transfer of coverage as soon as possible. Prior producers of record must accept the notices of transfer or other forms of insurance verification from insureds, insurers or producers of record for the new policies, provided the notices meet at least the following standards: (1) The notice must be signed by the producer of record for the new policy or, it must be on the company s letterhead, if it is issued by the new insurer; and (2) The notice must bear the registry stamp of the new insurer. The stamp may be in electronic format.

5 Auto News... continued from page 4 Producers must accept these notices regardless of whether they are generated in hard copy or in electronic format. They must forward such notices to the prior insurer as soon as possible so that consumers rights are not affected negatively. Producers also are expected to assist their customers to correct any perceived inaccurate information on a notice of transfer rather than reject these notices automatically. The Division is committed to monitoring and investigating any complaints regarding these issues. Please confirm that this policy has been cancelled flat back to the effective date of the renewal policy which should never have been renewed because it was already replaced with Commerce with proper notice to Allstate prior to the effective date. Thank you for your attention to this matter. This letter was sent on February 13, 2015, from MAIA VP of Communications, Donna McKenna, to Allstate s General Counsel at the company s headquarters in Northbrook, IL. Within a couple of days, Donna received a call from an Allstate representative indicating that they would be happy to cancel the policy flat as soon as they heard directly from their client. Donna reminded the Allstate representative that the client was no longer their client and that the Form 2A furnished by the new agent back in October met the requirements of MA Division of Insurance Bulletin The Allstate representative refused to send a confirmation to the new agent indicating that the policy had been cancelled because that would violate their customer s privacy. Allstate did, indeed, cancel the policy -- but not flat back to the inception of the new policy which never should have been renewed. Two more phone calls FINALLY resolved the issue. As far as the Esurance policy was concerned, all we can say is that it was amazing how manual and hands-on the cancellation of policy purchased online became. More Auto News: New Law RE. Use of Headlights The Legislature has passed a new law that would require drivers to turn on their headlights whenever they turn on their windshield wipers. The new law, M.G.L. c. 85, 15 takes effect on April 7, Below is the wording of the new section of the law: A vehicle, whether stationary or in motion, on a public way, shall have attached to it headlights and taillights which shall be turned on by the vehicle operator and so displayed as to be visible from the front and rear during the period of 1/2 hour after sunset to 1/2 hour before sunrise; provided, however, that such headlights and taillights shall be turned on by the vehicle operator at all other times when, due to insufficient light or unfavorable atmospheric conditions, visibility is reduced such that persons or vehicles on the roadway are not clearly discernible at a distance of 500 feet or when the vehicle s windshield wipers are needed; provided further, that this section shall not apply to a vehicle which is designed to be propelled by hand; and provided further, that a vehicle carrying hay or straw for the purpose of transporting persons on a hayride shall display only electrically operated lights which shall be 2 flashing amber lights to the front and 2 flashing red lights to the rear, each of which shall be at least 6 inches in diameter and mounted 6 feet from the ground. As a result, the list of surchargeable incidents has been amended by adding two new requirements effective April 7, Motorists are now required to turn on headlights and taillights whenever the windshield wipers are on. 2. Motorists are also required to turn on headlights and taillights when visibility is reduced so that persons or vehicles are not visible at 500 feet due to insufficient light or unfavorable atmospheric conditions. The requirement to turn on headlights and taillights 1/2 hour after sunset and 1/2 hour before sunrise has not changed. Automation News: 5 Please Complete AUGIE Survey... AUGIE (ACORD-User Groups Information Exchange) is seeking agent input into their 2015 priorities. A survey has been set up for you to complete. Please click this link. Please enter MAIA in question 6. where it asks for a code. The information you provide in the survey will be shared with MAIA.

6 Opinion Piece... by Sharon Emek, president, Work At Home Vintage Employees (WAHVE) HR Study Shows Everybody Loves Older Workers -- But Few Are Hiring Them. It s a demographic fact: The American workforce is getting older, and just about every industry stands to lose from it especially insurance. The U.S. Bureau of Labor Statistics projects that nearly one in four members of the U.S. workforce will soon be 55 years or older. Many of these older workers are already gone from the labor market due to downsizing, disability or simply retirement. The bureau projects that baby boomer s participation in the labor force will plummet to only 40 percent after they turn 55. This talent drain could deal a crippling blow to businesses that are unprepared for their departure. Preparing for an Aging Workforce, a recent study conducted by the Society for Human Resource Management (SHRM), confirms what we in the insurance have known for years: although most businesses are concerned about this loss of talent, few are prepared to address it. Healthcare, nonprofits, government, and utilities top industry sectors for those with the most workers aged 55 and older. The financial sector (which includes finance, insurance and real estate) comes in near the top, with 28.7% of its work force comprised of older workers. The SHRM survey shows that only one-fifth of organizations have conducted in-depth assessments about what the retirement of older works means to them in terms of filling potential skills gaps, and only a third of responders said their businesses had taken steps to fill those gaps. One in five said their organizations had no strategies in place to transfer knowledge between the older and younger generation of employees. There s a lot to like about older workers. Survey respondents said that older workers bring more work experience (77 percent), more maturity or professionalism (71 percent), a stronger work ethic (70 percent), mentoring skills (63 percent) and more reliability (59 percent). In spite of these convictions, however, more than half of the survey respondents said they did not actively recruit older workers. The ultimate irony is that many of today s retirement-aged workers can t, or choose not to, retire. Typical of the baby boom generation, which blazed trails in so many other areas of society, workers 55 and older are rethinking retirement, the workplace and employment. A recent report published by the Federal Reserve found that while over half of retirees followed the traditional retirement model, only 26 percent of workers who have thought about retirement plan to follow their lead. In fact, workers in their 20s and 30s say they re more interested in following the traditional retirement path; only 15 percent of people in their 60s or older plan to jump from a full-time job into retirement. So what are they doing instead? The Fed report finds that these non-traditional thinkers are doing retirement on their terms. Alternatives include, working for themselves (10 percent), and cutting back on hours (10 percent). Another 6 percent said they never plan to retire at all. This is great news for insurance, and especially independent agents and brokers, which are especially vulnerable to losing talent to retirement. However, the disconnect between how businesses can benefit from older workers and what they re doing about hiring and keeping them will keep both sides of the equation from benefiting from what could be a mutually satisfactory arrangement. U.S. businesses need to take off the blinders and put aside their ageist attitudes with the goal of creating a working environment where talented people of all ages can learn from each other. 6