THE MASSACHUSETTS AGENT

Transcription

1 THE MASSACHUSETTS AGENT OFFICIAL NEWSLETTER OF THE MASSACHUSETTS ASSOCIATION OF INSURANCE AGENTS November 17, 2011 Circulate to: Management Personal Commercial Claims Other In this issue: Page 1 MAIP/CAR News Gov. Committee Appointments Assignment Period Page 2 InsurBanc News Express Leasing Member Milestones St. Germain Agency Wins Torch Award FAIR Plan Corner HO-2,3 Drop; HO-4, 6 Increase Comp. Corner W/C Online App. Will Be Mandatory 1/1/13 MAIA News Award Winners Page 3 MAIA News continued More MAIA News Latest Auto Filings Pages 4 7 Moe MAIA News continued Industry News Hanover Survey Results Page 8 THANK YOU Company Partners MAIP/CAR News: Commissioner Makes CAR Governing Committee Appointments CAR received copies of letters appointing Ms. Carol M. Berthold, Residual Market General Manager of GEICO and Mr. John P. Tierney, Sr. Vice President & Chief Actuary, of Quincy Mutual Group as members of the Governing Committee. Both appointments are effective as of October 31, 2011 through June 30, More MAIP/CAR News: CAR Addresses MAIP Assignment Period; Discusses Voluntary v. MAIP Rate Access CAR s MAIP Steering Committee has adopted MAIP Rule amendments that will set out what will be allowed once a risk has been in the MAIP for three years. The CAR Governing Committee was expected to approve the amendments at its meeting this week. The amendments are as follows: For risks whose assignment period ends prior to March 31, 2012, the assigned company: may offer to continue to write the risk beyond the period of three consecutive years by offering to write a third renewal; may offer to write the risk on a voluntary basis; or may non-renew the risk. For risks whose assignment period ends on or after April 1, 2012, the assigned company: may offer to write the risk on a voluntary basis; or may non-renew the risk. The MAIP Steering Committee also continued its discussion regarding providing producers with both the MAIP rate and the assigned company s voluntary rate when a risk is assigned to the MAIP. Currently, the producer is only provided the MAIP rate for an assigned risk. Under Massachusetts law, an insured placed in the MAIP pays the lower of the MAIP rate or the assigned company s voluntary rate. In almost all cases, the company s voluntary rate is lower. However, the producer does not have access to that rate now from CAR. CAR staff and the Steering Committee continue to explore options on how best to provide producers with the voluntary rates and the costs to establish the system. In the interim, the Steering Committee voted to require all companies to provide producers with access to their voluntary rates. Some companies already do this. But, don t look for all the voluntary rates soon. This requirement still has a long way to go before it can be finalized. Questions regarding the above CAR developments should go to Frank Mancini at the MAIA offices by phone at or or by at fmancini@massagent.com. Massachusetts Association of Insurance Agents massagent.com Professionalism through Independence 91 Cedar Street Milford, MA Francis A. Mancini, Esq. Donna M. McKenna

2 The Massachusetts Agent November 17, 2011 Page 2 InsurBanc News: FAIR Plan News: HO-2, 3, 5 Drop; HO-4, 6 Increase Leasing: A Seamless Customer Experience InsurBanc would like to reintroduce you to - Agents' Express Leasing. Not only does this program offer a seamless customer experience, it helps manage your needs and your cash. Click here for details. Statistics released recently by the FAIR Plan show that over the last year the number of HO-2, 3 and 5 policies written by the Plan has dropped by 3.1%, while the number of HO-4 and 6 policies have increased. All FAIR Plan territories have experienced a drop in the number of HO 2, 3 and 5 policies written between September 30, 2010 and September 30, Even coastal territories have seen a reduction: Barnstable, Dukes, Nantucket 1.3%; Fall River 7.8%; New Bedford 4.5%. On the other hand, over that same period, the number of HO-4 policies written by the Plan has increased 14.6%. The reasons for the surge seem to fall into three categories: more lease requirements that renters have insurance; homeowners who have lost their homes, moving to apartments and buying insurance; and same auto writers offering discounts for clients with renters insurance. As regards HO-6 policies, the FAIR Plan s increase in policy count over the last year is 3.4%. Reasons for this increase are less clear. It seems, however, that more banks are requiring insurance as condo owners refinance. Comp. Corner: W/C Online Assigned Risk Applications Mandatory as of January 1, 2013 The Workers Compensation Rating and Inspection Bureau (WCRIB) will require that all producers use its Online Assigned Risk (OAR) application by January 1, Currently, 7 of the new applications are submitted using the OAR system. The system is easy and efficient and eliminates issues related to mailing applications and payments to the WCRIB. If you are currently not using the OAR system, you should become familiar with its procedures and prepare your agency in advance of the deadline for use. A scanner will be needed to use OAR. For more information on OAR go to and click on Producer Community. There you will find a section titled New Applications Submitted through OAR. Under that section, in addition to the OAR producers section you, will find sections titled Frequently Ask Questions and Users Guide to OAR. Also from the WCRIB The WCRIB is working with its servicing carriers on a system that will provide for the request and delivery of certificates of insurance to be done by . We will let you know when the system is operating. MAIA News: MAIA Announces Award Winners at The BIG Event During the Annual Business Meeting of our recently-concluded convention, MAIA awarded a number of prestigious awards. We are pleased to share the good news with those who weren t able to attend. Pacesetter of the Year: Russ Martorana, CIC, CWCA, President of Farrell-Backlund Insurance Agency, Inc. in Taunton, North Dighton and Rehoboth, was honored as the recipient of MAIA s highest award the Pacesetter of the Year. The Pacesetter Award is given annually to the Massachusetts independent insurance agent who through hard work, perseverance, compassion and charity has set the pace at a level achieved by very few in the industry. Martorana s career in the insurance industry has spanned three decades. During that time he has obtained and maintained the respect and admiration of his colleagues on both the insurance company and independent agency sides of the business because of his tireless efforts on behalf of the insurance industry, particularly his work on behalf of his fellow independent agents. In this picture, Russ (L) receives the Pacesetter award from MAIA Board Chairman John E. Toole, CIC, LIA, AAI, CWCA.

3 The Massachusetts Agent November 17, 2011 Page 3 MAIA News continued from page 2 Chairperson of the Year: Beth Sylvia Caldwell, CIC, Vice President and Chief Operating Officer of Sylvia Group of Insurance Agencies, and James Herrick, Jr., CIC, Vice President of Personal Lines for Berkshire Insurance Group, were honored as the recipients of the Chairperson of the Year Award for their leadership as co-chairs of the Young Agents Task Force. The award was presented in recognition of the hard work that has been done to revitalize the MAIA Young Agents Council (YAC). Young Agent of the Year: Ben Carvallo, a principal in Cavallo and Signoriello Insurance Agency, Inc., was honored by the MAIA as the recipient of one the insurance association s highest awards Young Agent of the Year in recognition of the hard work that has been done this year in an effort to revitalize the MAIA Young Agents Council (YAC). Revitalization of the YACs to help provide networking and other opportunities for the young insurance professionals who will be tomorrow s leaders of the insurance agency system. More MAIA News: Latest Scoop on Personal Auto Filings Here is the latest information on private passenger auto insurance filings placed on file with the Division of Insurance: Amica 9/1/11-New and Renewal 4/1/12-New and Renewal New Certificate of Insurance MA Amendatory Endorsement 9/11 edition Arbella Citizens/Hanover 8/25/11 9/1/11-New and Renewal 10/15/11-New 12/15/11-Renewal 9/1/11-New 10/1/11-Renewal 11/1/11-New and Renewal +3.4% Commerce 11/1/11-New and Renewal Base Rates Category Factors changed to Tiers Rule and Rate Manual Changes (Tiers) Supplemental Application Updated Supplemental Application, Declarations Page and Merit Rating Statement New Snowplow Endorsement New Rule 36. Snowplow Endorsement Multi-car Discount now extends to inexperienced operators Adopted ISO Rate Symbols Changes to Transition Adjustment Factors/Years of Experience Curve Renewals Recalibration of Rating Factors and Territory Factor Changes New Changes to Rules 11, 29 and 55 EFT Discount Base Rate Adjustments Risk Factor Adjustments (Rule 26B) Household Level Factor Adjustment (Rule 26E) Removal of the Implicit Surcharge Factors Liability Symbol Factor Adjustments Substitute Transportation Adjustments

4 The Massachusetts Agent November 17, 2011 Page 4 More MAIA News continued from page 3 Commerce continued 11/1/11 12/1/11 Encompass 7/1/11 9/23/11 Rule Changes: Rule 11 Premium Calculation removed implicit surcharge exclusion factor Rule 12 Premium Rounding changed to reflect change to Rule 11 The Rules reflect the same changes now including the Tablet Computers and are part of the endorsements Rule 35 AAA Member Package Rule 36 Commerce VIP Package Rule 37 Optional Endorsement (Commerce Enhancer Package Endorsement) Rule 41 Stated Amount Coverage Section C Fire Stated Amount was adjusted Rule 55 Pre-insurance Inspection updated to eliminate the need for an insured to have their vehicle inspected Form Revisions: Application for Insurance CIC Added Trailer weight to Vehicle Info. Section and removed Pre- Insurance Inspection; AAA Member Package Endorsement, CIC-2114; Commerce VIP Package, CIC-2123; Enhancer Package Endorsement, CIC 2122 New MAIP Application Manual Revised Rule 35 Auto Rating Tier Revised Auto Premium Calculation Worksheet Revised Table of Contents Revises Rules 19 & 46 Miscellaneous Rate Pages Farm Family 12/1/ % Adopted 1/1/10 ISO Model Year 2011 Transition Factors Adopted AIB 4/1/09 Advisory Filing Rule Changes Rule 13 Discounts: # of Years Driving Experience Rule 21 VRG Program Rule 56 Merit Rating increased credits GEICO 10/14/11 New 11/25/11 Renewal +.01 GEICO General +.04 GEICO Empl. Base Rate Transition Factors Revised Rule PPA-P-01 Risk Tier to introduce a new characteristic & update the definition of Negligent Accidents

5 The Massachusetts Agent November 17, 2011 Page 5 More MAIA News continued from page 4 Harleysville/Worcester IDS 1/28/12 9/26/11 New 11/15/11 Renewal 2/16/12 Metropolitan P&C 12/1/11 2/2/ % Rule 19. J. New Policyholder Discount applies to current in-force policies only. New on or after 9/26/11 is not eligible Rule 56. Merit Rating Codes 96 and 76 eliminated Rule 64. First Accident Forgiveness removed exception to policy surcharge for new business coming with a loss in the experience period that was waived by the previous carrier +9.1% Base Rate Revisions New Symbols Rule 11. Premium Calculation revised to show new discount Rule 19. Discounts Welcome Discount NEW Flexible Pay Plan National Grange 9/1/ Introduces Merit Rating to Optional BI Base Rates for Medical Payment revised Category Factors for BI, PD, PIP, Comprehensive and Collision revised Factors for Model Year 2012 Comprehensive and Collision Rates added Rule Changes: Rule 11. Premium Calculation Rule 19. Discounts Rule 20. Model Year Rating include 2012 Rule 29. K. Category Factors revised to reflect proposed factors contained in tables Rule 55. Pre-Insurance Inspection modified due to changes in regulation Rule 56. Merit Rating revised to reflect OBI Participation Clause to replace signature Tower Group/One Beacon/Mass. Homeland 11/1/ Base Rates revised Rule 11. Reflect new discounts Rule 19. Discounts 3 new discounts added: Good Student, Student Away and Clean 6 Years discount Multi-Car discount went from 5% to 7% Rule 59. Category Placement revised to clarify scoring process to policy Plymouth Rock 11/1/ % Coverage Selections Page revised Deductible Dollars, Accident Forgiveness removed updated discounts section Accident Forgiveness End. PRAC-MA /11 ed.

6 The Massachusetts Agent November 17, 2011 Page 6 More MAIA News continued from page 5 Plymouth Rock continued 11/1/11 11/15/ % Merit Rating added language re. accident forgiveness Territory Base rates voluntary and MAIP Rule 11. adjusted for new discounts Rule 16. Deductibles Parts 7, 8 & 9 added a new Section D. Credits from Deductible Dollar endorsement Rule 19. Discounts Class 15 changed name of discount to Age 65 & Older; Companion Policy modified language; Companion Commercial Policy New Discount; Pain in Full Discount New Discount Rule 26. Mileage Banding Rating removed language if vehicle is new to insured Rule 28. Private Passenger Classification A. Operators, removed language All operators and replaced with licensed household members and any others who customarily are operators Rule 29. Policy Underwriting Tiers chart revised Rule 37. Accident Forgiveness replaced rule with endorsement Get Home Safe Endorsement PRAC MA /11 ed. allows one $50 reimbursement for a taxi ride home Preferred Mutual 11/1/ % Installment Payment Plan Increased premiums by territory and amount of increase varies by territory Increased Years Licensed Factors and Rule 29. Years Licensed Factors Increased Account Credit with HO Policy from 12 to 14% Rule 19. Discounts One Pay Plan Credit for paid-in-full policies 3% Quincy Mutual 11/15/11 Adopted AIB VRG for Model Year 2011 & subsequent keeping existing VRG for Model Year 2010 & prior Changes in Rules 11, 19, 21, 25, 27, 32, 39, 41, 45 and 47. Gross Vehicle Weight Rating included in VRG Safety 11/1/11 4/1/12 Rule 56. Merit Rating modified Adopted AIwB s MA Amendatory Endorsement 9/11 ed.

7 Industry News: The Massachusetts Agent November 17, 2011 Page 7 More MAIA News continued from page 6 Travelers 11/1/ % Updated Liability Symbols Auto Loan/Lease GAP Coverage TMV 0002E 11/11 Changes to Rules 6, 11, 19, 26, 35, & 56 Advanced Issue Discount revised; New Car Discount (new) Added Accident Forgiveness, Increased Limits & Surcharge Exclusion Factors Miscellaneous Rating Factors revised New Forms Index and revised Base Rates Hanover Survey Results Show Small Business Owners Trust Independent Insurance Agents and Commercial Insurance Carriers Significantly More Than Other Financial Services Businesses The Hanover Insurance Group, Inc. (NYSE: THG), a leading provider of property and casualty insurance products nationwide, today announced the results of a new survey that demonstrates small business owners trust independent insurance agents and commercial insurance carriers significantly more than other financial services businesses. The study was commissioned by The Hanover as part of a broader effort to stay appraised of the evolving needs of small businesses and to build upon its expertise in that area. These efforts are intended to help ensure that it offers small businesses the most valuable and innovative products and services for today s current economic environment. The finding that independent agents and carriers are perceived as having a higher level of trust is important, especially as it comes in a time when trust and confidence in the financial services industry are at an all-time low, as witnessed by thousands of protesters hosting Occupy Wall Street events across the country to force change within the financial system. In fact, the survey found trust to be the single most important consideration when choosing an insurance provider, with 86 percent of small business owners rating trust very important. This study underscores that in these times, trust is a very important attribute for small business owners when they are selecting a business insurance provider. In a time of considerable economic uncertainty, small business owners want to know they are working with an agent and a carrier they can count on. This study confirms what we at Hanover have always believed - that it s critical for companies to establish and maintain trust and confidence of those they serve, said Michael Keane, president, small commercial at The Hanover. The study also uncovered that small business owners actually have the highest level of trust in Independent Agents, compared with all the other financial services industries in the survey. In fact, the majority of small business owners reported that they consider Independent Agents as being trustworthy. The trust that small business owners place in Independent Agents, underscores Hanover s strategy of partnering closely to distribute our unique portfolio of small business products and services through a selective group of professional Independent Agents says Keane. He added, For nearly 160 years, we have been delivering on our promises to our agent partners and their customers so that they can trust that we will be there for them when it matters most. That commitment stands today and will continue tomorrow.

8 The Massachusetts Agent November 17, 2011 Page 8 Flood Insurance News: Status of Flood Insurance Extension... As many of you know, the current continuing resolution (CR) keeping the federal government funded is set to expire on November 18 th. Included in this funding is the authorization of the National Flood Insurance Program (NFIP). At this time the House and Senate are expected to pass another CR by this Friday (the 18 th ) that will keep both the federal government and the NFIP running until December 16 th and avoid any federal government or NFIP interruptions. Due to an ongoing stalemate in the Senate between the parties unrelated to flood insurance, we do not believe that Congress will have completed its consideration of the long-term extension/reform bill by mid-december. However, it is currently expected that another short-term extension of the NFIP will be included in the next government funding bill considered in December.