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Feb. 3rd, 2023 - A publication of the Independent Insurance Agents & Brokers of California
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Jonathan Schreter
President
IIABCal
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President’s Message
Consumers Need Healthy Insurance Competition in California
A vibrant insurance market in California is critical to the growth of the state’s economy. If the Golden State is expected to sustain its status as the fourth largest economy in the world, California’s independent insurance agents and brokers must have access to insurance markets competing for their policyholders’ risks. Insurance drives entrepreneurship, innovation, and capitalism.
IIABCal members have been impacted by carriers that have either exited personal lines or stopped accepting new property and/or auto business; other carriers have imposed significant underwriting restriction on new risks. For IIABCal’s 14,000 members, who serve as the front line for consumers, it has become increasingly difficult - if not impossible - to secure insurance.
Seizing The Initiative
The backlog of carriers’ rate filings at the California Department of Insurance (CDI) is a significant factor in the carriers’ decisions. Current rate levels are inadequate, and California Insurance Commissioner Ricardo Lara refuses to consider rate increase requests or approve rates commensurate with the amount of exposure insurers are being asked to assume after catastrophic disasters. IIABCal members are left to deliver the bad news to policyholders. In what General Counsel Steve Young described as the “worst crisis facing the industry – and consumers – in the past 34 years,” Lara and state lawmakers do nothing. However, IIABCal is now seizing the initiative!
IIABCal has hired a nationally prominent insurance law firm, Eversheds Sutherland, and the highly respected insurance actuarial firm, Milliman, that has researched and drafted legislation that could reopen the property insurance marketplace by giving insurers credit for reinsurance expenses, permitting them to use state-of-the-art loss modeling tools, and expediting CDI’s prior approval rate process.
We Need Your Help To Enact This Legislation!
Tell us your stories! In this issue of the Insider, you will see a short questionnaire we are asking our members to complete and send back to us. How are you being impacted? How are your clients being harmed?
Our greatest weapon in this fight is you!
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CEO Corner
It Takes a Village
With the legislature back in full swing, I will be attending my first meet-and-greets with key legislators as the IIABCal CEO. I look forward to building relationships and educating the elected officials about the challenges faced by our members and constituents.
However, this education will need to come from many sources – our lobbyist, John Norwood, our SVP, Steve Young, and YOU! Your stories illustrate the marketplace issues better than anything else! See below how you can share your stories.
And, speaking of villages, a key person in the IIABCal village celebrates a total of 15 years at IIABCal this month! Jenn Pouey, VP Operations and Member Services, has basically grown up in our village. We are grateful for her beautiful spirit and never-ending contributions!
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Jill Epstein
Chief Executive Officer
IIABCal
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Congratulations Jenn on 15 years of service! From the IIABCal village.
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IIABCal Advocacy
IIABCal Preparing Legislation to Restore Property Insurance Marketplace
IIABCal is going on the offensive to restore the California property insurance marketplace and is now finalizing a sweeping legislative proposal that would give insurers significant reasons to resume writing and renewing property insurance risks, even in high fire severity risk zones.
Our Plan!
The IIABCal plan, being developed by legal and actuarial experts hired by the Association, has three elements:
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First, permitting insurers to build their reinsurance costs into their rate filings. Incredibly, CDI does not allow insurers to include reinsurance costs in the formulas that determine the maximum allowable rates. Especially in the wildland urban interface, where the risk of catastrophic wildfire loss—and the cost of reinsurance—is greatest, this deliberate omission virtually guarantees rate inadequacy.
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Second, allowing insurers to use the empirical risk modeling in ratemaking. Currently, insurers are required to justify rates solely on their own historic loss history. This carries two potentially significant disadvantages: 1) the larger the data base, the more reliable actuarial analysis can be, so it makes no sense to prohibit insurers from using credible industry wide data; 2) prospective risk modeling is a far more accurate way to assess probable future losses. Such modeling is already in wide use in California, by CalFire and the California Earthquake Authority, as well as by private insurers in other states.
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Third, by preventing the Department of Insurance from ignoring or indefinitely stalling its review of rate change applications. California law has long included a provision that gives the Commissioner six months to evaluate proposed rate change applications. If the Commissioner has not acted upon those requests within that time, then the applications are “deemed approved.” However, CDI has routinely pressured insurers to “waive” or forego this requirement—which has led to rate applications languishing in the Department for multiple years. Our proposal would require action from the Department within six months.
"Insurers, and their trade associations, are understandably reticent to criticize the Commissioner too harshly because of the vast authority he wields over their operations and profitability—but we operate under no similar constraints," IIABCal President Jonathan Schreter said.
Addressing The Issue!
“In a politicized environment where the leading admitted insurers can’t use state-of-the-art underwriting tools, and can’t get approval of the rates they need in order to write the massive risks they are being asked to assume, it’s little wonder that most independent agency companies have curtailed or greatly restricted their new and renewal business,” Schreter said.
The wording of the IIABCal legislation is now being finalized, and work is underway behind the scenes to find a legislative author and build political support within the industry, and with outside allies, to support the Association’s bill.
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Will You Help Us Restore The Property Insurance Market?
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Why We Need You Help!
IIABCal has launched a major legislative offensive to restore a vibrant, competitive property insurance market.
We are sponsoring legislation (see story above) that would create powerful incentives for insurers to resume writing and renewing property insurance policies in California.
But in order to succeed, we must tell lawmakers in simple terms how consumers are being severely harmed by non-renewals, cancellations, marketplace withdrawals, coverages reductions, and exponential price increases.
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Please Respond To Survey Request
How Are You And Your Customers Being Harmed?
Please complete the 2023 IIABCal Property Survey and let us know if you or your clients might be willing to offer legislative testimony later this year.
Questions? Contact IIABCal General Counsel Steve Young at 925-426-3314 or syoung@iiabcal.org.
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IIABCal Launches Historic Fund-Raising Campaign
As an IIABCal member who depends on the vibrancy of the Independent Insurance Agency system to provide insurance coverage to your clients, we want you to be aware of our historic fundraising campaign to restore California's property insurance marketplace.
What is the IIABCal Legal Defense Fund?
The IIABCal Legal Defense Fund (LDF) was created more than a decade ago for precisely this purpose—to defend the business interests of independent insurance agents and brokers in California.
Please contribute to this campaign to support IIABCAL’s comprehensive legal strategy to restore the California property insurance marketplace and consider asking all of your producers to contribute today by visiting 2023LegalDefenseFund.org.
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2023 First Quarter Legislative Briefing
Members Learn How 2023 Bills May Impact Their Businesses
To better prepared members for whatever might come out of the California Legislature in 2023, IIABCal Lobbyist John Norwood & General Counsel Steve Young conducted a members-only Legislative Update Briefing this week.
The fast-paced session provided hundreds of members with an insider's assessment of the major issues affecting California employers and the business of insurance that are most likely to garner significant legislative attention this year.
To listen to the webinar, click here.
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John Norwood & Steve Young
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Big "I" Legislative Conference Registration Open
Registration for the 2023 Big “I" Legislative Conference is now open! The premier event for independent agents will take place April 26-28 at the Renaissance Washington, D.C. Downtown Hotel. Register and attend for your opportunity to join other agents and speak to your federal legislators in a unified voice.
Register today to take advantage of the early-bird registration discount, which will end on March 6. Don't delay making your guest room reservations.
Visit the dedicated Legislative Conference webpage to learn more, and stay tuned for more details to be released.
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Employee Benefits Basic Courses Now Available
IIABCal's Education Partner, New Agency Campus, introduced new Employee Benefits Basics Courses with a 20% member discount. Courses include:
- Introduction to Employee Benefits Basics
- Employee Benefits: Health Insurance Basics
- Employee Benefits Basics: Introduction to Ancillary Lines
- Employee Benefits: Health Insurance Basics Plus Ancillary Lines
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IIABCal Employment Practices Liability Insurance Program
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What Members Are Saying
EPLI markets are in complete distress these days. Premiums increasing at every renewal, and even worse deductibles (SIR) are going crazy ($25k-$50k and up).
The EPLI program through IIABCal
offers reasonable premiums and
better than market deductible options.
We have utilized the Association
program over the past two years with
over 75% of our EPLI book.
It’s also the easiest process on the
market for solid coverage. Literally
takes 5 minutes to complete the
application with premiums included.
The program offered through IIABCal help us stay competitive, while taking care of our Insureds. It’s a super valuable tool.
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Alon Ben-Nun
Universal Risk Insurance Services
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IIABCal Program Advantages:
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A+ Rated carrier
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Available coverage limits of $250,000, $500,000, and $1M
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Full “Prior Acts” coverage is included for accounts with prior EPLI coverage
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HR Pilot Services is provided free of charge to IIABCal members
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Free access to HR Care website (providing sample HB policies, employment law updates, and detailed risk management services)
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Third Party Liability Coverage automatically included (no sublimit)
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Punitive Damages Coverage included (where law allows)
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Claims Made Policy Form
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Terrorism coverage included
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Immigration Coverage Endorsement - $50,000 sublimit
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Wage & Hour Coverage Available - $100,000 sublimit for defense costs is now included in the rates for qualified risks
IIABCal’s Endorsed Product Partner, CRC Group, has more than 100 years of insurance expertise and can help you navigate the unstable EPLI market.
Find out more about the IIABCal EPLI Program.
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Hire The Ideal Fit For Your Agency Team
Finding the right fit can be a burden. Skimming resumes, scheduling phone calls, conducting interviews, and responding to applicants is time intensive. And even after all that, your new hires may not work out!.
But despite the difficulty, hiring doesn’t have to be guesswork. Find out how!
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Member Question of the Month
Can Agents Submit MVRs To Employers?
Q. Is it true that insurance agents and brokers are prohibited from sending driving record information to employers?
A. Not precisely. The federal Fair Credit Reporting Act (FCRA) was amended by Congress many years ago to include “driving records” maintained by state motor vehicle departments within the definition of “consumer credit reports.” Consequently, it is illegal for an employer to make an “employment-related decision” (such as hiring, firing, promoting or demoting, …) using a driving record—unless the employer has notified and secured the consent of the employee (or job applicant). Click here for the full answer.
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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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Top-Notch Speaker Lineup Announced For 2023 BRC
IIABCal has announced the confirmed speakers for the 2023 Blue Ribbon Conference that will include an insightful discussion of the state's property marketplace with California FAIR Plan President Victoria Roach and IIABCal's Steve Young. Also slated to present dynamic educational sessions:
Meredith Powell who will show how to turn uncertainty into a competitive advantage.
Chris Cheetham-West will discuss strategies for managing and working on remote teams.
Rick Sessinghaus will cover key principles top athletes and executives train to shift from fear to flow.
Bob Jones will share how his POW experience can related to success today in business and life itself.
For more information, visit IIABCalBlueRibbon.org.
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Registration For Agribusiness Conference Ends Soon
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Join us in Sacramento, California, Feb. 5–7 for IRMI AgriCon, the premier event focused on agribusiness and farm risk management and insurance. Don’t delay! Register Today!
JUST ADDED! Lunch Video Keynote: Jewel Bronaugh, U.S. Deputy Secretary of Agriculture.
For full AgriCon Schedule, click here.
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Why Attend IRMI AgriCon?
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Renew your Agribusiness and Farm Insurance Specialist (AFIS®) certification—a $134 value!
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Earn up to 11 hours of continuing education (in most states) for attending IRMI AgriCon.
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Pursue your AFIS certification. Attend 2 of the 5 full-day AFIS courses offered during the Conference—voucher codes included.
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Access OnDemand session recordings for up to 6 months.
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IIABFresno Annual Board Appreciation Dinner Big Hit
The IIABFresno hosted its annual Board Appreciation Dinner Jan. 20th - a night of celebration of the past year and to acknowledge and support the association's incoming leaders.
The local group also hosted the 2022 IIABFresno Christmas Luncheon Dec.1st, for its brokers, company members and associate members. There were 250 attendees for lunch, and three $1,000 scholarships were presented to local high school and college students.
The recipients were Jocelyn Marin-Ybarra, Karley Western, and Hailey Schalk. Each excelled in academia and extracurricular activities.
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IIABFresno 2023 Board Dinner
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Three Scholarships Awarded by IIABFresno
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IIAB San Diego Installs 2023 Officers
IIAB San Diego installed its incoming officers Jan. 20th that included President Joe Hamilton from Hal Rakowski Insurance in Lakeside, President-Elect Susan McMillon from Cavignac & Associates Insurance Brokers in San Diego, and Secretary Treasurer Daniel Olson from AssuredPartners of California in San Diego.
It was a festive “Hawaiian” celebration at the Bal Hai restaurant. The association also presented the charitable contributions from 2022 which totaled nearly $19,000.00. The charities supported are The Burn Institute, Healing Wave
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2023 IIAB San Diego Leadership
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Aquatics, Benevolent and Protective Order of Elk, Lakeside Christian Help Center, and Jacobs & Cushman Food Bank.
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Blast From The Past!
IIABALA Honors Past Presidents During Historic Event
On Jan. 18, 1989, a local event was held that has yet to be surpassed in the history of Los Angeles independent insurance agents and brokers. The IIABALA honored 32 past presidents of the local association during a "Celebration of Presidents." More than 300 people attended the celebration, including then-IIABCal President Bob Sanford who installed the new IIABALA officers. The event included the participation of 91-year-old Bill Glassick who was the oldest IIABCal and IIABALA past president in attendance, serving in the leadership positions in 1940-41.
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