UAIIA Newsletter

Thanks to our 2008 Associate Members: Acuity, Advanced Restoration, AIG, American Mining, Amtrust North America, Austin Mutual Insurance Co., Auto Owners Insurance Co., Bear River Mutual Insurance, BELFOR, Burns & Wilcox LTD, Cananwill Premium Funding, Capital Premium Finance, Chubb Group of Insurance Companies, CIBA Insurance Services, CSE Insurance Company, Colonial General Insurance, Colorado Casualty Ins. Co., Continental Western Group, Cresta Insurance, LLC, Dairyland Insurance Co., EMC Insurance Companies, Encompass/Allstate/Deerbrook, Germantown Mutual, Great American Insurance Co., Kemper, Legacy Insurance Services, MetLife Auto & Home, Mountain States Insurance Group, Multico Rating Systems Inc., Mutual of Enumclaw Ins. Co., National American Insurance Co., Networked Insurance Agents, PLUS Insurance, Premium Financing Specialists, Progressive Insurance, Republic Indemnity Company, Risk Placement Services – Salt Lake, Risk Placement Services – Scottsdale, Sagamore Insurance Co., Sequoia Ins. Co., Service Master by Restoration Xperts, State Auto Insurance, Statewide Insurance Corp., Surplus Line Assoc. of UT, Swett & Crawford, Inc., Telford Financial, Transwestern General Agency, Travelers, UAIC, UCA General Insurance, Unitrin Specialty, Utah Disaster Kleenup, Victoria Insurance, WCF.

1. Local Agents Rate High
2. Insurance Profits Take a Dive
3. Insurance Department Tips – Trust Accounts
4. Lawsuit of the Month
5. Legislative Rumors
6. What Have We Done For You Lately?
7. Northern Utah Earthquake Fault
8. 2008 InsurPac Contributors
9. Can You Say “Crop Damage?”
10. Happy Holidays

1. Local Agents Rate High According to a customer satisfaction survey from J.D. Power and Associates, auto and home insurance customers who deal with a local agency tend to be more satisfied than those who interact with their insurer’s call center. The study also found that agent served customers tend to be more loyal to their agent than they are to their insurer. Among customers who perceive their agent to be independent, 44 percent say they “definitely will” renew with their insurer, while 60 percent say they “definitely will” continue doing business with their agency.
The study also revealed the following insurance customer behavior pattern: One fourth of a customer’s overall impression of their agent, agency staff, or call center representative is driven by their courtesy and friendliness. Two in five customers meet with their agent in person, most visiting without a scheduled appointment.
2. Insurance Profits Take a Dive After-tax profits for the U.S. property and casualty industry through the first nine months of the year were $4.1 billion – a 91.8 percent decline from the $50 billion in profits earned the same period a year ago, according to ISO and the Property Casualty Insurers of America (PCI).
Insurers suffered $19.9 billion in net losses on underwriting through the first nine months of 2008, marking a $38.2 billion adverse swing from insurers’ $18.4 billion in net gains on underwriting seen in the comparable 2007 period.
The combined ratio – a key measure of losses and other underwriting expenses per dollar of premium, worsened to 105.6 percent in the first nine months of the year, down from the 93.8 percent combined ratio the industry saw in the first nine months of 2007.
The figures are consolidated estimates for all private property/casualty insurers based on reports accounting for at least 96 percent of all business written by private U.S. insurers. Source: Insurance Journal

3. Insurance Department Tips - Trust Accounts
Did you know the deposit slips for trust accounts need to have the words “trust account” on them? Or that trust account monies cannot be commingled with operating expenses or any other expenses? To make sure you are in compliance, check out the following Utah Department of Insurance website: http://le.utah.gov/~code/TITLE31A/htm/31A23a040900.htm

4. Lawsuit of the Month (Note: We sent this out on our paper newsletter and received an email that this lawsuit is a hoax according to http://www.snopes.com/. We apologize for that. It’s a pretty good story never the less in spite of its untruthfulness. If you want to see the gross picture, go to: www.snopes.com/photos/gruesome/drillnose.asp)

There’s a current lawsuit in the works by a Minnesota man named Henry Harleny. Mr. Harleny is suing a famous drill company for physical damages caused to him by their tools. Mr. Harleny claims that he wanted to eliminate an itch in his nose, so he placed a power drill bit up his nose that was still attached to the drill and turned it on.
He successfully got rid of the itch, but in the process he drilled off his nose. According to Mr. Harleny, “No where on the package, or the actual tool was there a warning that specifically tells the consumer not to place the drill up their nose, or any other orifice for that matter. These companies need to take responsibility for their products.”
Mr. Harleny is suing for $25 million. Editor’s note: a picture of Mr. Harleny at the hospital accompanied this article. It was too gross to print. We are speechless.

5. Legislative Rumors Our president, Kay Howland, recently attended a meeting where possible legislative bills were discussed. Below are some potential bills that we might see (of which some are good, others are bad): Towing notice requirements – Utah Interactive will keep a data base of private tows to prevent insurance carriers from being charged large storage fees with some notice of where the vehicle is after a tow; Notice to buyers of salvaged vehicles – would allow anyone to bid on salvaged vehicles, which would open up the market for insurance companies; Utah Common Interest Ownership Act – would clarify in a condo policy that the master condo policy is primary and the unit owners policy is secondary. This will prevent gaps when the master policy has a large deductible; Prejudgment Interest – would change the way interest is charged on a medical bill. Rather than go back to the accident date, it would go back to the date of service; Loss of Consortium – would allow the policy limit to be paid twice. Once for the injured and again for the family member; Stacking PIP Benefits – would allow stacking of PIP limits; Survival Statute – would allow survivor to get benefits if the claimant dies of another cause other than the injury in which the claim is paying pain and suffering for; Underinsured Motorist Subrogation – would limit the right of subrogation; Bid Car Legislation – would allow anyone to bid on damaged cars; Premium Tax for license plate scan system – would allow a license plate scan system to reduce crime, to be funded by insurance company premium tax.

6. What Have We Done For You Lately? Probably the greatest accomplishment of the Independent Insurance Agents and Brokers of America (IIABA) in 2008 was getting an agent and broker licensing reform bill known as NARAB II introduced and passed by the House. This represents an incredible reform of agency licensing problems, and we made great progress on this in 2008, hopefully laying the foundation for its passage in 2009. The quagmire of agent licensing is a top priority for the Big “I” and this is the most significant progress we’ve seen in decades.
Another major legislative issue in 2008 was the National Flood Insurance Program (NFIP), which was reauthorized for 6 months, although this will need more extensive and long-term reform in 2009.
We also made progress on a host of other issues, including the farm bill for agencies that sell crop insurance to eliminate the premium reduction program; the excess and surplus bill, which passed the House again; and natural disaster legislation, which passed the House and shows that Congress is interested in natural disaster reform.
While we have made inroads on these issues, most legislative matters move at the speed of sludge in Congress, which might be a good thing when all is considered.

7. Northern Utah Earthquake Fault Utah State University geologists say a close look at a deep trench along the East Cache Fault has uncovered good news. There is no evidence of recent earthquakes along that section of the fault. USU geology associate professor Susanne Janecke said that could mean there is a smaller chance of a “large future damaging earthquake” in the southern part of Cache Valley near the community of Avon.
More tests need to be done, but there is not any evidence of tremblers occurring there in the last 10,000 years.

8. 2008 InsurPac Contributors Thanks so much to those listed below who contributed to InsurPac in 2008. Until the rules change in how the game is played in Washington D.C., donations to InsurPac are important.

Centennial Club ($1000)
C. Brett Nilsson
Gold Club ($500)
J. Curtis Breitweiser
Joseph E. Hansen
Pioneer Club ($250)
Howard Green
Kay Howland
Eric Kingdon
Kenneth Miller
Craig Timothy
Marilee Wilson
Craig Wiseman
Robert Wiseman
Founders Club ($150)
Steve Baugh
John Fogg
Tom Stanger
Allen Steadman
James Welch
General Contributor
Shawn Iverson
Matt Libutti
Cheryl Lyman
Steve Mordue
Michael Walker

9. Can You Say “Crop Damage?” We usually don’t hear much about crop damage in Utah, but recently, Utah Governor Jon Huntsman issued an agricultural disaster declaration for six counties that sustained damage from extreme weather or wildfire totaling nearly $29 million. The six counties are Box Elder, Garfield, Kane, Millard, Piute and Sanpete. Most of the farmers and ranchers in these counties sustained crop and forage production losses of at least 30 percent.


10. Happy Holidays! May you and yours enjoy the holiday season from the Board of Directors and Staff of UAIIA.