Industry News

On November 29, PIA National met with Federal Insurance Office (FIO) Director Michael McRaith at the U.S. Treasury Department. McRaith requested the meeting to discuss PIA’s views on regulatory modernization priorities. McRaith met with PIA Executive Vice President & CEO Leonard C. Brevik, Senior Vice President Patricia A. Borowski and Assistant Vice President of Federal Affairs Mike Becker. PIA’s comments were on the record and will be included in FIO’s report to Congress.

PIA National is preparing detailed written remarks to be submitted to the FIO. The written comments are due in mid-December. Our comments and ensuing discussion primarily focused in four areas:

1. That we believe insurance is efficiently regulated by the states and independent agents play a valuable role in serving consumers.
2. That FIO should support and compliment state regulation of insurance without federal preemption of state laws.
3. That FIO could help in addressing some of the licensing challenges faced by producers:

a.   support the National Insurance Producer Registry (NIPR) 
b.   Resolve foreign corporation issues

That FIO should ensure the solvency and financial soundness of foreign carriers operating in the U.S. domestic market.

Director McRaith had a number of follow up questions and the exchange was constructive.

An insurance company’s new campaign takes a crack at the increasing number of funny insurance commercials. Erie Insurance has been running ads that take aim at the Geico gecko, the Aflac duck, Flo, the Progressive spokeswoman, and Allstate’s mayhem guy. The company’s newest ad says, “It’s nice to have a good laugh now and then. But really...shouldn’t billions of dollars in humorous insurance ads be put to better use? We think so. For seriously good insurance, take a look at Erie Insurance.” The ad promises: “We give you great insurance.” A guy in a Groucho Marx getup drives the point home.

Erie Insurance Group is a member of The PIA Partnership.

Here’s Erie ad: http://www.seriouslygoodinsurance.com/landing.cfm

WASHINGTON, Tuesday, June 21, 2011  - The National Association of Professional Insurance Agents (PIA) is pleased to announce that Selective Insurance Company of America (Selective) has joined The PIA Partnership.

Comprised of senior insurance company executives, The PIA Partnership identifies areas of opportunity in the agency-company partnership, facilitates dialogue between senior company executives and PIA leaders and conducts solution-oriented research to enable the creation of practical hands-on tools for agents.

"We are extremely pleased that Selective, a distinguished company with a solid track record of supporting the American agency system, has joined The PIA Partnership," said PIA National Vice President/Treasurer Andrew C. Harris. "Selective's participation demonstrates its ongoing commitment to the continuing success of professional independent agents across the country."

"We believe in PIA's value proposition," said John Marchioni, Executive Vice President, Insurance Operations, of the company's decision to participate in The PIA Partnership. "Your advocacy, your objectives and your business tools align with Selective's commitment to the independent agent channel."

"I've seen first-hand the work PIA is doing on behalf of independent agents in our distribution system," Marchioni said. "The Partnership has developed some valuable tools and agents who are able to leverage this insight will be able to increase their value to their customers."

Selective Insurance Company of America is a subsidiary of Selective Insurance Group, Inc., a holding company for seven property and casualty insurance companies rated "A+" (Superior) by A.M. Best. Through independent agents, the insurance companies offer primary and alternative market insurance for commercial and personal risks, and flood insurance underwritten by the National Flood Insurance Program. Selective maintains a website at www.selective.com.

Founded in 1996 with start-up funding from PIA National, The PIA Partnership identifies areas of opportunity in the agency-company partnership, facilitates dialogue between company executives and PIA leaders and conducts solution-oriented research designed to enable both agents and companies to profit from these opportunities. Recent projects of The PIA Partnership have included Reaching Gen Y and Making the Internet Work for You; A Practical Guide to Successful Planning; and Perpetuation Central.

Founded in 1931, PIA is a national trade association that represents member insurance agents and their employees who sell and service all kinds of insurance, but specialize in coverage of automobiles, homes and businesses. PIA members are Local Agents Serving Main Street America (SM). PIA's web address is www.pianet.com.

PIA National's Ted Besesparis previews the battle that's looming in Congress in 2011, as the forces advocating for federal regulation of insurance plan another assault on state regulation, in an article in the September issue of American Agent & Broker magazine. You can read it here.

Click here to read The OFC That Wouldn't Die (American Agent & Broker 9/10)

Former Federal Reserve Chairman Paul Volcker wants the nation's banks to be prohibited from owning and trading risky securities. He is proposing that commercial banking be separated from investment operations. To achieve that goal, Congress would have to enact a modern-day version of the 1933 Glass-Steagall Act, which mandated separation.

Volcker was chairman of the Fed from 1979 to 1987, and he currently serves as head of President Obama's Economic Recovery Advisory Board, which makes him the administration's most prominent outside economic adviser. The problem for Volcker is he doesn't seem to have great influence within the administration. At age 82, he is dealing with Treasury officials who are young enough to be his grandchildren. More importantly, they are veterans of investment banks. The administration has said it will not separate commercial banking from investment operations.

Volcker's proposal would roll back the nation's commercial banks to an earlier era, when they were restricted to commercial banking and prohibited from engaging in risky Wall Street activities. The Obama team, in contrast, would let the giants survive, but would regulate them extensively, so they could not get themselves and the nation into trouble again.

"The banks are there to serve the public," Volcker said in an interview with the New York Times. "And that is what they should concentrate on. These other activities create conflicts of interest. They create risks, and if you try to control the risks with supervision, that just creates friction and difficulties" and ultimately fails. Volcker wants to break up the financial giants, which have been getting even bigger since the federal government bailed them out.

The remarks by Volcker were echoed in a recent speech by Bank of England Governor Mervyn King. "The massive support extended to the banking sector around the world, while necessary to avert economic disaster, has created possibly the biggest moral hazard in history," King said in a speech in Scotland. "The 'too important to fail' problem is too important to ignore. Never in the field of financial endeavor has so much money been owed by so few to so many. And, one might add, so far with little real reform."

"People say I'm old-fashioned and banks can no longer be separated from nonbank activity," Volcker said in the interview, acknowledging criticism that he is nostalgic for an earlier era. "That argument," he added ruefully, "brought us to where we are today."

Volcker Fails to Sell a Bank Strategy (New York Times 10/20/09)

Here's a quick quiz. Which industry groups said this?:

"…the current regulatory structure is complex, but variety in regulatory perspective provides a 'healthy check against any one regulator neglecting its duties.'"

Was it PIA, arguing against a federal insurance regulator and in favor of state regulation? It could have been, but in this case it was not.

The groups making this robust argument against consolidating regulatory authority in one federal regulator are … The American Bankers Association (ABA) and the Independent Community Bankers of America (ICBA). Both groups sent a letter to Senate Banking Chairman Chris Dodd (D-Conn.), who is a leading proponent of the single regulator concept for banks, urging him to maintain the system of multiple regulators at the federal and state level.

What It Means to Agents:  It is interesting to note that the same groups who argue vehemently that state regulation of insurance is duplicitave and inefficient and want a federal insurance regulator suddenly start singing a different tune - the one independent agents sing - when they find it to their advantage.

Webster's dictionary defines hypocricy as "a feigning to believe what one does not." Something to keep in mind the next time these bankers get back up on their high horses and start preaching sermons about the benefits of federal regulation - for us, but not for them.

Bankers Oppose Plans to Consolidate Regulators (FinReg21 10/21/09)

Astrid Thoenig works full time in bookkeeping, A/P and general administrative support for the Thorton Agency Inc., a PIA member agency in Parsippany, New Jersey. Thoenig works five days a week and brings work home in the evenings. But last week, she spent a little extra time at her desk at the agency opening birthday cards that said, "Happy 100th."

Thoenig was interrupted by a steady stream of deliverymen bringing bouquets, chocolate-dipped strawberries and stacks of cards to the Thornton Insurance agency in Parsippany, New Jersey where she's been answering phones, keeping financial records, handling payroll and typing up documents for 32 years.

"It's another day - it's hard to explain," Thoenig said of turning 100. "I don't feel old, and I don't think old." Born Sept. 24, 1909, in Bloomfield, New Jersey, Thoenig's earliest memories start in 1918, when she witnessed something so traumatic, "it erased all memories of my childhood before that."

"I remember coming down the stairs from my bedroom and saw these two coffins in the living room: one white, for my sister, and the other for the grown person," she said, recalling how the flu pandemic of 1918 killed her father and her 10-year-old sister within hours of one another. "To see my father and sister -- of all the things I can't remember - that's very vivid in my mind."
Thoenig, her remaining sister, and her mother also were infected but survived. Her mother lived until 101 and her sister, who suffered permanent hearing loss from the illness, was 95 when she died.

Thoenig says "thinking young" has helped her take a century's worth of technological changes in stride. The daughter of Swedish immigrants, she credits her strong constitution, a wonderful family and getting up every day to get dressed and go to work with keeping her mind sharp. She still drove until age 98 when a botched hip operation made it difficult to get around.
She works alongside her son, John Thornton, who drives her to work, and grandson Peter at the PIA member, family-owned insurance agency.

New Jersey Insurance Worker on Turning 100 (Associated Press 9/28/09)

PIA National Immediate Past President Robert Page and Senior Vice President Patricia A. Borowski participated in a panel during the National Roundtable on Insurance Literacy on October 15. The panel was conducted by the Financial Literacy and Education Commission of the U.S. Treasury Department. Page and Borowski were panelists on Face to Face with the Consumer: A Report from the Frontlines, which covered the perspective of insurance agents in educating consumers about their options, including bad decisions witnessed by agents and lessons learned.

Page recounted his experiences with his clients in the aftermath of Hurricanes Katrina, Rita and Ivan, which caused damage in his southern Louisiana community of Houma.

"On behalf of the member agencies of PIA National, I thank you for the opportunity to participate in this conference," Page said. "As you clearly see, we are already well engaged in all parts of the insurance sector, providing accurate educational information about insurance. These are messages and efforts about many insurance issues that consumers need to be aware of and understand when they engage in various transactions conducted in the business of insurance."

The Financial Literacy and Education Commission was established under the Financial Literacy and Education Improvement Act, which was part of the Fair and Accurate Credit Transactions (FACT) Act of 2003, to improve financial literacy and education of persons in the United States. The Commission is headed by the U.S. Treasury Secretary. It coordinates the financial education efforts throughout the federal government, supports the promotion of financial literacy by the private sector while also encouraging the synchronization of efforts between the public and private sectors.

A special edition of PIA Connection has been published that details "PIA's Roadmap to State Regulatory Modernization."

"While it is critical that we speak out against proposals that would be bad for PIA members, it is also important that PIA work to bring about positive change as we see it," said PIA National President Robert Page, writing in his monthly letter in the magazine. "The first step is defining the positive changes we want and presenting a path to achieve them. This special issue of PIA Connection is devoted exclusively to PIA's Roadmap to State Regulatory Modernization."
 
"For the better part of the past year, PIA National's member policy committees have engaged in an ongoing review of the various reform proposals and approaches," Page said. "They have also reviewed current established PIA policy, to assess how much of our PIA plan has already been accomplished by the hard work of PIA states and members, and then determine our association's ongoing strategy. As part of this process, our committees have developed and approved PIA's own blueprint for reform, which is what you see detailed in this issue of our magazine."

The PIA Roadmap to State Regulatory Modernization:

• Preserves the state-based structure of insurance oversight.
• Achieves insurance regulatory modernization.
• Protects the integrity and standing of state insurance law.
• Ensures competitive equity for all marketplace participants in an efficient and cost-effective manner.

The hard copy of this special edition of the PIA Connection is in the mail, but you can read it now online here. If you would like to begin by reading President Robert Page's special letter regarding the PIA Roadmap, you can access it here.

Robert Page's President's Letter

Special Edition of PIA Connection (PDF file)

PIA National has announced the promotion of Mike Becker to Director of Federal Affairs. Since joining PIA, Becker has managed the day-to-day responsibilities associated with running the Professional Insurance Agents Political Action Committee (PIAPAC), including PAC governance and oversight, grassroots initiatives and fundraising. He also serves as staff liaison to the PIAPAC Board of Directors.

"We congratulate Mike Becker on his promotion and look forward to benefiting from his expertise," said PIA National Executive Vice President & CEO Leonard Brevik, in making the announcement. "Mike brings a wealth of talent and political acumen to PIA's Capitol Hill advocacy on behalf of professional insurance agents."

It is with sadness that PIA National also announced the resignation of Assistant Vice President for Government Affairs Kellie Bray, to accept a position as Government Affairs Leader for CropLife America. Bray joined PIA in 2001.
 
"PIA National has benefited greatly from Kellie Bray's work for us over the past seven years," said PIA National Senior Vice President Patricia A. Borowski. "PIA members greatly appreciate all of her excellent efforts on their behalf. We wish Kellie continued success throughout her career."