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Oct. 7th, 2022 - A publication of the Independent Insurance Agents & Brokers of California
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Bob Teshima
President
IIABCal
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President's Message
Enough Is Enough!
Why is it that insurance companies no longer want to provide insurance in the once prosperous Golden State marketplace? Why must California independent insurance agents and brokers perform triage on policyholders every day to find them basic coverage at an inordinately high price to insure a minimal of their financial assets? And most importantly, why is no one in government responding appropriately to the availability crisis now confronting California’s insurance consumers?
What's The Answer?
The answer is not confined to Prop 103 - the outdated, legacy law enacted in 1988 that requires a politicized government bureaucracy to approve almost all property/casualty insurance rates before an insurance company can sell policies in California – but has become centered on the Insurance Commissioner’s refusal to evaluate rate change requests, and to give insurers any opportunity to earn a fair return for the massive exposures they would otherwise be willing to underwrite.
Prop. 103 was always a fraud on voters—promising free money in the form of premium refunds that were unconstitutional. But today, the combination of the Commissioner’s inactions and the rigid limitations in the law have produced a crisis in availability that denies insurance consumers the ability to insure their biggest financial asset – their homes and businesses.
Not An Impossible Challenge!
Without question, insuring fire risks in California is a challenge, but it’s not impossible. In fact, insurance companies are actuarially figuring out how to make it work through new models that better spread risk during an unprecedented time of climate change, forest mismanagement, utility negligence, and significant population growth (and building) in the wildland-urban interface. Some insurers are ready to begin offering coverage in California through these new models, which would take pressure off the California FAIR Plan, which was never intended to become a market of first resort. Unfortunately for insurance consumers, insurance companies face a regulatory environment in which years pass with no action on rate increase requests, and politicians abuse their discretion to suppress rates below levels that are actuarially sufficient to underwrite the massive claims that wildfires are now producing.
Economic theory says the best way to organically drive down price is by market supply over demand. That is how we solve California’s insurance market problems. Streamlining the months and years of bureaucratic, prior-approval rate hearings in California would provide insurance companies the flexibility, timing, and incentive to see the Golden State as a welcoming insurance landscape once again. Most importantly, it would result in more companies offering coverage that would drive competition for the ultimate betterment of insurance consumers.
Something Must Be Done!
What we don’t understand is why California Insurance Commissioner Ricardo Lara and state lawmakers don’t do something about this on behalf of the state’s insurance consumers.
Well, enough is enough! IIABCal continues to challenge state leaders, and has engaged outside legal counsel to assist us in developing a comprehensive legal strategy, with regulatory, legislative, and potentially even judicial components, in the fight on behalf of California insurance consumers so they can once again live in a state with a viable, competitive insurance marketplace. Stay tuned! More details shortly!
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CEO Corner
Let's Be Friends!
One of our membership goals is to “meet you where you are.”
To that end, we have enhanced our social media presence and we are posting timely, interesting, and fun content across various platforms. Please take a moment to follow, friend, like, share, and re-tweet our content!
Here is how to find us. See you there!
Facebook, LinkedIn, Twitter, Instagram.
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Jill Epstein
Chief Executive Officer
IIABCal
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More than 700 people participated in IIAB-Sacramento Big I Day! IIABCal staff Jill Epstein, Mike Orrick, and Jenn Pouey loved seeing Past IIABCal Presidents Tabb Randolph, Paul Bystrowski, and Rob Oates at the busy IIABCal booth. Congratulations to Tabb Randolph for winning the local association Lifetime Achievement Award!
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IIABCal Joins CDI Workshop on Potential New Underwriting Restrictions
Ensuring the interests of independent insurance agents and brokers are protected in any future regulatory proceeding, IIABCal participated in a California Department of Insurance “prenotice workshop” on Sept. 21 intended to signal potential amendments to existing regulations that govern insurers’ use of artificial intelligence, or “AI,” in evaluating underwriting risks.
IIABCal General Counsel Steve Young, who participated in the hearing, said it was highly likely that CDI would propose a variety of new disclosure and training requirements—and that IIABCal would examine such proposals very carefully to ensure that neither the Department, nor insurers, attempted to foist undue compliance burdens upon producers.
This workshop focused on the insurance industry’s use of algorithmic tools, such as machine learning tools, artificial intelligence tools, and other technologies designed to examine big data to make judgments about consumers, marketing, underwriting and other decisions or practices relating to insurance transactions—which the Department believes may result in bias, or unfair discrimination.
For the complete story, click here.
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Steve Young
Senior Vice President & General Counsel
IIABCal
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Member Markets
IIABCal Introduces Exciting
New Insurance Products
Four new insurance products have been added to IIABCal’s product portfolio – Personal Lines from Progressive, BOP from Coterie, Workers’ Comp from Synchronosure and Pet Insurance from Prudent Pet – for use by member agents and brokers.
In addition, IIABCal has a wide range of insurance markets and business products that you can sell to your clients or use for your agency. Check out all of IIABCal’s member products.
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Need Help On Placing A Policy?
Mike Orrick, Vice President of IIPSC & Member Relations, is ready to help you with your insurance market needs. Give him a call at 925-426-3310 or email him at morrick@iiabcal.org.
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Members Matter
Congratulations to Eleven IIABCal Members Selected as Best Practice Agencies
This year, an outstanding group of 282 agencies across 48 states – 11 of them IIABCal members - qualified as Big “I” Best Practices Agencies.
The annual Best Practices Study (BPS) originated in 1993 as an initiative by the IIABA to help members build and maintain the value of their most important assets, their agencies. By studying the leading agencies and brokers in the country, the Big “I” hoped to provide member agents with meaningful performance benchmarks and business strategies that could be adopted or adapted for use in improving agency performance, thus enhancing agency value. The Big I retained the principals of Reagan Consulting to create and perform the first Best Practices Study.
Each of the winning agencies submitted extensive financial and operational data for review and represent the highest performers based on their growth and operational excellence. We recognize and appreciate the following IIABCal members for their high standards and leadership:
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CalNonprofits Insurance Services, Capitola
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Cavignac, San Diego
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C3 Risk & Insurance Services, San Diego
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DiBuduo & DeFendis Insurance Brokers, Fresno
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Hal Rakowski Insurance, Lakeside
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Morris & Garritano, San Luis Obispo
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MST Insurance Solutions, Torrance
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Rancho Mesa, Santee
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Socher Insurance Agency, Burlingame
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Teague Insurance Agency, La Mesa
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Woodruff-Sawyer & Co., San Francisco
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The 2022 Best Practices Study is an essential business tool for all agencies with more than 3,000 data points.
To obtain a copy of year’s Best Practices Study, click here.
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Member Question of the Month
Are Agents Required To Report Drivers With Diminished Skills?
Q. We recently became the agent for a driver who is over 70 years old. He meets the “good driver” definition under California law, but he recently sideswiped a parked vehicle. There were no injuries, and the physical damage was relatively minor, but in the process of assisting him with the claim, it became immediately apparent that his mental capacity was seriously in doubt. Do we have a legal duty—or do we incur liability if we fail—to report our concerns to the California DMV? Should we notify the insurer of our concerns? As best we can determine, he lives alone and does not have any immediate family nearby.
A. California Health & Safety Code Section 103900 requires physicians and surgeons to report disorders characterized by lapses of consciousness, as well as Alzheimer’s disease and related disorders to local health officials, and are permitted to report any other condition if they believed it would affect a driver’s ability to drive safely. However, there is no law imposing any such duty on broker-agents. Likewise, there is also no law prohibiting a broker-agent (or any other citizen) from confidentially notifying DMV of concerns about a potentially unsafe driver.
For the complete answer, click here.
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IIABCal’s “Member Question of the Month” features questions from agents & brokers.
IIABCal General Counsel Steve Young provides answers to your legal questions as part of your membership benefits.
Have a question? Email Steve Young at syoung@iiabcal.org.
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News from the Big "I"
Big "I" CEO Announces Retirement Plans
Big "I" CEO Bob Rusbuldt announced his retirement, effective August 2023. Bob has served as the CEO for the last 23 years and has been with the national organizations for the past 37 years. IIABCal wishes Bob a happy and joyful retirement when it starts next year! Click here for the full story.
Costello Named New Big "I" Chair
During the September Big "I" Fall Leadership Conference, John Costello, vice president and construction practice member at USI Insurance Services in Rochester, New York, was sworn in as the new Big “I" chairman. Costello was sworn in by his two sons before he addressed the more than 400 attendees at the Big “I" Installation of Officers Luncheon.
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Bob Rusbuldt
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John Costello
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Member Spotlight
IIABCal Welcomes Newest Member - Stonemark
IIABCal welcomes its newest associate member, Stonemark, an independent and industry-leading premium financing company uniquely positioned to finance a broad spectrum of policies across Commercial and Personal Lines in the U.S. and Canada. Stonemark’s financing solutions span emerging risk categories, including Cannabis, which its bank-owned competitors are prohibited from financing.
Click here to read the full member spotlight story.
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Dream Team: From left, Christopher Antonson, National Account Executive; Amanda Burke, Marketing Specialist; Tram Mascia, Vice President
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Sacramento Sip, Sip, Hooray
In April, IIAB Sacramento’s Community Service Committee, chaired by Diana Davis of Travelers Property Casualty, put on Sip, Sip, Hooray, which was an awesome event with wine tasting, appetizers and raffle prizes! Proceeds benefitted the Volunteers of America Sacramento Senior Safe House.
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San Diego Wine & Wishes Gala
Trusted Choice generously supported the Make-A-Wish San Diego by sponsoring their annual Wine & Wishes Gala. All proceeds from this event go directly to the Make-A-Wish San Diego to help make children's wishes come true. This black-tie event was held at the Fairmont Grand Del Mar last week. Representatives from IIABCal and IIAB San Diego attended on behalf of Trusted Choice.
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IBA-SFV Brings Back Monte Carlo Casino Night!
After two long years of COVID, IBA San Fernando Valley brought back Monte Carlo Casino Night. It was held at the Valley Relics Museum which is an amazing historical journey of the San Fernando Valley. The event was well attended, and everyone is ready to get back to normal life. IBA-SFV’s next event is the 2022 grand finale Company Appreciation Night 2022 which will be at the Woodland Hills Country Club Nov. 16th.
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