Insurance Societies and Associations

Robert A. Rusbuldt, CEO

Independent Insurance Agents & Brokers of America

Alexandria, Va.

Q: What were your organization's chief accomplishments in 2005?

Among other things, I'd cite the following:

-We established the Big "I" Katrina Relief fund with a $100,000 contribution

-We worked with the National Conference of Insurance Legislators to produce a solid agent and broker compensation disclosure model law, and worked with state legislatures and insurance departments on their producer compensation and consumer provisions. Meanwhile, a number of insurers adopted IIABA's policy on producer compensation disclosure.

-We supported legislation to 1) create national standards for data security and functional insurance regulation, 2) create a federal reinsurance program for natural disasters and 3) extend the federal backstop for terrorism insurance.

-We helped get a class action reform and a flood insurance reform bill (with a five-year reauthorization) signed into law.

-We worked with Congressional leaders on the latest draft of the State Modernization and Regulatory Transparency Act and with the Risk Management Agency to mitigate antiagent and anticompetitive provisions in the Federal Crop Insurance Program.

-We created comprehensive guides for independent agency disaster planning and management, and for security exposure management.

-We re-launched www.ACTtech. org, a Web site listing carriers that offer real-time and download solutions through various agency management systems.

-We strove to make commerciallines download work better. We produced a report on agency testing processes that also documented the idiosyncrasies of certain carriers' downloads. Our Agents Council for Technology worked with AUGIE (an association of users-group leaders, with staff support from ACORD) produced system-specific commerciallines download training materials and other information to help bring agencies online.

-We enhanced and updated our Best Practices study for independent agents and brokers.

-Our Trusted Choice branding initiative grew to more than 5,200 agencies and 31 company partners.

-Project InVEST launched new programs in community colleges and high schools nationwide to interest students in the insurance industry and train them for leadership in the independent agency system.

-We added new products to Big "I" Markets for ILABA members.

-InsurBanc helped independent agencies grow and perpetuate their agencies.

-Our Virtual University added state-of-the-art online courses and grew its "Ask the Expert" service.

-InsurPac, our political action committee, grew to more than $1 million.

-IIABA enhanced its diversity and young agents programs.

-President Bush addressed our National Legislative Conference, the largest in the association's history.

Q: What are our members' chief concerns, and how will your organization address them in 2006?

Toward the end of 2005, members were concerned about hurricane recovery efforts along the Gulf Coast. The Big "I" will continue to assist independent agencies in devastated areas.

Agents worry that the lack of a federal terrorism backstop and proposed terrorism exclusions will disrupt the marketplace, so we will continue to work for TRIA extension.

In Michigan, California and other jurisdictions, legislation has been proposed that, if passed, would hinder healthy competition and ultimately prove detrimental for consumers. We will work to defeat such legislation and to defend the independent agency system.

We also will lobby for agent licensing uniformity and reciprocity, and for insurance regulatory reform. We will defend agent incentive compensation and will continue to work for improvement of the Federal Crop Insurance Program and the National Flood Insurance Program.

We will advocate for fair tax treatment of intangible assets and for tax reform legislation that favors small business.

We will continue to provide and improve such products and services as agents E&O insurance and Big "I" Markets.

Ken A. Crerar, President

The Council of Insurance Agents & Brokers

Washington, D.C.

Q: What were your organization's chief accomplishments in 2005?

The Council worked with the National Association of Insurance Commissioners to establish compensation disclosure and transparency standards at both federal and state levels. We encouraged our members to embrace disclosure and transparency in their business relationships and defended our members' reputations to ensure that isolated instances of wrongdoing did not tarnish the entire industry and undermine trust between brokers and customers.

We also continued working to eliminate countersignature requirements that interfere with the free flow of commerce. We have won every case that has been settled-and only two judgments are still to be rendered.

In Washington, D.C., we represented our members' interests on such critical issues as regulatory reform and extension of the Terrorism Risk Insurance Act.

Q: What are your members' chief concerns for 2006 and how will your organization address them?

The Council is concerned about catastrophic events that affected the insurance industry in 2005-such as Hurricanes Katrina Rita and Wilma, the ongoing threat of another terrorist act, and the impact such events could have on insurer solvency.

Solvency is a critical component of the trust issues brokers face in placing large commercial risks, but it's regulators, rather than agents and brokers, who evaluate insurers' solvency. Some states struggle with regulating large companies, as we've seen in their oversight of Kemper and Reliance. We need a better system for monitoring insurer solvency and will address this issue in 2006.

Len Brevik, Executive VP & CEO

National Association of Professional Insurance Agents

Arlington, Va.

Q: What were your organization's chief accomplishments in 2005?

After New York Attorney General Eliot Spitzer announced his investigation into alleged abuses at several major brokerage firms, he made some statements that unfairly cast suspicion on our entire industry, including independent insurance agents. We spent the first half of 2005 countering such distortions and working to change the terms of the public debate on the issue of broker disclosure and compensation.

We lobbied for renewal of the Terrorism Risk Insurance Act and testified regarding the State Modernization and Regulatory Transparency Act, trying to improve the draft without endorsing it, since the bill had not yet been written or introduced. PIA also launched the Insurance Technology Coalition (ITC) and held a first meeting on Capitol Hill. We inaugurated the PIA "Take Back Personal Lines" campaign and debuted our Spanish-language PIA Web site.

Q: What are your members' chief concerns, and how do you plan to address them in 2006?

Because our members always need markets and have a stake in the continued solvency and stability of our industry as a whole, PIA's priorities include renewal of TRIA and the creation of a natural catastrophe program.

The widespread devastation caused by hurricanes in 2005 illustrated that no single state or region can fund or support a catastrophe reserve fund. Consequently, we will encourage Congress to adopt and fund a coordinated public-private natural catastrophe program.

During the past decade, consumers have increasingly favored the independent agency system. As this trend continues, demands on PIA will grow. We will speak and act forcefully on behalf of our members' business interests.

James R. Marks, CAE, CPCU, AIM

Executive Vice President

CPCU Society

Malvern, Pa.

Q: What were your organization's chief accomplishments in 2005?

The Society made scores of programs available to its members, including three new National Leadership Institute courses. These courses and other member benefits helped the Society exceed its membership goal for the year and maintain support levels from members' employers. Also, 885 new CPCU designees joined the Society.

Donald J. Hurzeler, CPCU, CLU, the 2004-2005 CPCU Society president, published a book, "Designated for Success."

On behalf of our chapters in those areas affected by Hurricane Katrina, we created an emergency relief fund that will allow us to contribute at least $30,000 in member and Society chapter donations to the American Red Cross.

Q: What are your members' chief concerns, and how do you plan to address them in 2006?

Society members are concerned about the industry's image. We will continue to uphold our commitment to ethics to offset negative publicity surrounding New York Attorney General Eliot Spitzer's allegations of widespread insurance industry corruption.

In a year of record catastrophe losses, members also are concerned about future industry profitability. We will continue to offer technical education programs to address profitability issues.

Our members also are concerned about their ability to maintain both their membership in the Society and their level of activity within the Society. The Society will continue to educate the industry's employers on the benefits of employing CPCU Society members and encourage them to support employees who pursue the CPCU designation.

Bernd G. Heinze, Esq.

Executive Director

American Association of Managing General Agents

King of Prussia, Pa.

Q: What were your organization's chief accomplishments in 2005?

We worked with and testified before the National Association of Insurance Commissioners to obtain an exemption for wholesale agents and brokers from requirements to disclose the amount of their commissions under the broker disclosure amendment to the Producer Licensing Model Act.

Two of our other accomplishments pertain to education. First, we created a class to teach the fundamentals of our industry to college students and professionals in other trades and-we hope-attract them to our industry. This new class complements the business and insurance ethics curriculum presented in the E. Max Williamson Business and Ethics Insurance School, the Insurance for Beginners class, the Family Business School and a new insurance marketing curriculum, as well as our regular stand-alone classes.

Second, we produced five CD-ROMs on a range of insurance-related topics. They explain, for example, how E&S insurance works, how to identify and prevent insurance fraud, how to prepare an application for submission and how to respond to claims.

In October, the AAMGA board met with representatives from Lloyd's, its syndicates and other London markets to discuss trends, security, capacity, combined ratios and other topics. For the first time, we also met with the Financial Services Authority, the United Kingdom's insurance regulation and compliance authority. We explained who our members are and how events in the London marketplace affect them.

We wrote op-ed pieces and placed ads in insurance publications to educate members of the insurance industry and others about the value of the wholesale insurance market and the AAMGA University's professional education designations.

In 2005 AAMGA joined the American Justice Partnership (www.americanjusticepartnership.org), an organization that promotes tort reform and works to stop lawsuit abuse.

We established about 20 special-interest groups that focus on various coverages and niches, as well as on regulatory matters, like the SarbanesOxley Act, Terrorism Risk Insurance Act and the State Modernization and Regulatory Transparency Act. We created a database of interested members so we can notify them of developments, including when cases are being heard or new regulations take effect. For example, when the U.S. Department of Transportation issued new hours-of-service regulations for truckers engaged in interstate commerce, we e-mailed a chart comparing the old regulations to the new ones to those AAMGA members who underwrite commercial auto insurance or handle related claims.

Q: What are your members' chief concerns, and how will your organization address those in 2006?

Regulatory issues are among the main concerns. Our members are following the progress of the SMART Act and proposed federal charter legislation, both of which are pending in Congress. In the fall of 2005, the AAMGA Board approved formation of the Insurance Integrity Political Action Committee to educate regulators and legislators about the E&S marketplace and support candidates who will advocate for freedom of rate and form.

Because technology and automation play an increasingly important role in the insurance marketplace, we host an automation and technology conference every March. Our 2006 event will be held in San Antonio.

The hurricanes of 2004 and 2005 are predicted to cost insurers more than $80 billion. Our members wonder what overall impact such catastrophes will have on insurers' capacity, security and ratings. Will reinsurance capacity hold up? How can we obtain more aggregate capacity? How will companies pay claims in Alabama, Mississippi, Louisiana and Florida and still be able to respond to claims in the year ahead? Are we heading toward a harder market? Are companies going to narrow the terms and conditions of policies and endorsements? Will they abandon certain lines?

To help answer such questions, we added to our Web site (www.aamga. org) a component called InContext: AAMGA's Online Insurance Channel. Every three or four weeks, we will interview a prominent insurance company executive, or someone with information of interest to our members or their agents. The 15- to 20-minute interviews will be available free online to anyone who visits our site.

Scan M. Fitzpatrick, Esq., 2005 President

Professional Lability Underwriting Society

Minneapolis, Minn.

Q: What were your organization's chief accomplishments in 2005?

First, we launched a project to create a new, improved curriculum for the Registered Professional Liability Underwriter (RPLU) designation, which will be phased in over the next several years. It will feature state-of-the-art learning tools, including Web-based training, and will also provide a framework for PLUS to expand its technical education offerings for professional liability practitioners at all stages of their careers. second, we continued to strengthen and expand our regional chapters by offering more and better educational and networking opportunities at the local level.

Q: What are your members' chief concerns, and how do you plan to address those in 2006?

We're dealing with a number of major issues-from a softening market in D&O and other lines to potential reinsurance capacity dislocations caused by Hurricanes Katrina, Rita and Wilma-while the rules that govern the insurance market itself are in flux.

New York Attorney General Eliot Spitzer's investigation into insurance market practices has caused the industry to re-examine its producer compensation and customer communication practices. It will be some time before we see what changes in the insurance market result from the Spitzer investigation. In the meantime, PLUS will help educate its members on these issues and create a forum for discussing them.

Richard Bouhan, Executive Director

National Association of Professional Surplus Lines Offices Ltd.

Kansas City, Mo.

Q: What were your organization's chief accomplishments in 2005?

We hired a lobbyist to help us educate Congress about E&S business, our association and our position on federal legislative issues, especially the SMART Act, optional federal charters and TRIA.

In response to the Eliot Spitzer inquiry, we created and published two statements defending the use of contingency fees in wholesale insurance transactions. We also worked with the National Association of Insurance Commissioners and the National Conference of Insurance Legislators to exempt wholesale producers from the producer disclosure requirement of the NAIC's Producer Licensing Model Act.

We increased the size of our E&S School by 15% and the NAPSLO Advanced School by 10%. We also expanded our summer internship program to 10 interns, from eight. The Derek Hughes/NAPSLO Educational Foundation increased its annual scholarship to $3,000 from $2,000 for each of its 12 recipients and added a second college E&S symposium.

Finally, we enhanced our members' business prospects by hosting 3,200 attendees-the largest number in NAPLSO history-at our 2005 annual convention in San Francisco.

Q: What are your members' chief concerns, and how do you plan to address those in the year ahead?

Market conditions are always a major concern for NAPSLO members-wholesale brokers and surpluslines companies alike-and that interest has intensified as the market has appeared to soften. NAPSLO will respond by offering programs focusing on the insurance market and surpluslines marketplace at its meetings and educational workshops. We'll also provide information about market conditions in our publications and e-mail service.

NAPSLO members are always interested in how legislation and regulations may affect the marketplace. Since the current state regulatory structure could be modified-or even drastically re-structured-by future federal legislation, we will step up our representational efforts in Washington, D.C. in 2006. We also plan to add to our staff a government-relations professional who will focus primarily on state regulatory and legislative affairs.

NAPSLO members have requested more educational programs. In response, we will offer a second E&S School in 2006 and are considering adding a second Advanced School session each year and creating a series of "career development" seminars.

Glenn Clark, CPCU, Director

Target Markets Program Administrators Association

Wilmington, Del.

Q: What are some of your organization's chief accomplishments during the past year?

We added 60 new members, so our , total is 200 now. We now have 35 insurance carriers, 35 vendor partners and 130 program administrators. We also added a track for smaller programs. Many of our members were frustrated with carriers' reluctance to get involved with smaller programs, so we developed a strategy that includes some regional carriers, fronting companies and those I call "aggregators"-people who put together several smaller programs and market them to insurers as a single program. We created two new committees. One is building a set of best-practices criteria that will ultimately result in a "seal of approval" for program administrators who meet them. The other committee has undertaken a benchmarking initiative, the results of which will help our members measure their performance in areas of time management, service, profitability, etc. We also offered an E&O program for our members.

Q: What are your members' chief concerns, and how do you plan to address those in the coming year?

Smaller programs and start-up programs are a big concern because they can be difficult to get off the ground. Most carriers would love to talk with you if you have a $10 million program with a five-year history-but even those programs had to start somewhere. At our annual meeting, we'll offer presentations and workshops to help people with small programs learn more about carriers' marketing strategies and appetites.