In an announcement released today, AIIA President Malcolm Dunaway has requested that all AIIA members be informed of this latest development. Dunaway says, “For years Independent Agents have seen their slice of the economic pie shrink. Associations are born from the common needs of many. Recently AIIA announced a major savings to all agents by not having to send privacy notices in Alabama. Now AIIA is proud to advise that agents can charge fees for services beginning first of the year. Both of these actions are from efforts of your Association. Your membership does pay!”

The Alabama Insurance Department issued a bulletin December 20, 2001, granting authority for an agent fee schedule to be effective January 1, 2002.  The bulletin was issued based on a provision in the Model Licensing Act permitting agents to charge specific consumer fees as authorized by the Insurance Commissioner in addition to the premium charges.  The scheduled fees may be charged at the discretion of the agent. Only the scheduled fees may be charged and the maximum charges per transaction are listed below. No fees, other than those authorized in the schedule, may be charged.  In addition, notice of any fee charges must be disclosed to the consumer in writing prior to any policy transaction.

        The authorized fee schedule is as follows:

        New Policy Application Fee  $25                        Motor Vehicle Report   $Cost
        Client Office Payments    $5                               Application Rewrite   $25
        Reinstatement Fee   $10                                     Photograph Fee    $5
        Homeowners Reinspection  $25

These administrative fees are separate and distinct from the insurance company's premium and must be disclosed to consumers as a separate charge by the producer.

AIIA Director of Education and Technical Affairs Victor D. McCarley, CIC, states, “Agents have long had extensive costs with regards to production, and with a declining commission base, it has made it more difficult for agents to do business. The new fee schedule should make it easier for them to do business by easing some of the burden.” 

Ken McFeeters of PAC Insurance in Birmingham remembers the onslaught of new business after the mandatory automobile insurance passed the Alabama, “A year and a half ago, many of us realized the forthcoming challenge that occurred from this regulation. I expressed my concerns to AIIA’s Executive VP Ron Scott, and he was thinking the same thing. If you ever wonder what the association does for its members, they definitely have legislative power. Individually as agents, we could not have gotten this passed, but through the Association collective, we have great influence.”

“Earlier this year the efforts of AIIA allowed us to get an agent exemption from mailing privacy notices to all of our agency clients.  The mailing costs for our members would have been astronomical. With the ability to charge administrative fees on P&C contracts and other activities, this has been a doubly rewarding year for our legislative and regulatory efforts,” says AIIA Executive Vice President Ron Scott.  “I think that all the members can agree that the dues they pay for the association activities are monies well invested.” 

Auto-Owners Verdict Reversed
Alabama Supreme Court justices reversed a jury’s decision to award $1 million to a Choctaw County man who sued his insurance company for not paying $2,000 in medical bills. In an opinion written by Justice Gorman Houston, the court agreed with an appeal from Auto-Owners Insurance Co. that a Choctaw County Circuit Court judge should have thrown the case out in the first place. The case went to trial; jurors awarded David Abston $500,000 in compensatory damages and $500,000 in punitive damages. Abston, who had insurance through Auto-Owners, had charged the company with breach of contract, bad-faith failure to pay and fraud because the company did not pay him directly. 

Citigroup to spin off Travelers
Citigroup announced a plan to spin off Travelers Property Casualty, creating a new, publicly traded insurance company, as well as the return of Bob Lipp as Chairman and CEO. Lipp’s return is essential to taking this new company to the public because he knows the financial community, and they know him. Lipp was a critical part of Travelers return to health in the 1990's. “The spin off creates new opportunities for us to focus solely on challenges in the property-casualty marketplace,” says Chuck Clarke of Travelers. “As the events of the past year have demonstrated, the need for risk protection has never been more important than it is now. And the strong partnerships that we’ve forged over the years position us well to meet those challenges.” According to Clarke, neither strategies nor priorities will be changing as 2001 closes and 2002 begins. Travelers will continue to operate with a focus on the needs of agents and their customers.

Alabama Creates Two New Divisions in Department of Insurance
Alabama Insurance Commissioner D. David Parsons announced the creation of two new divisions within the state’s insurance department, the Division of Insurance Fraud and the Market Conduct Division. The Division of Insurance Fraud, which is officially effective January 1st, will be headed by Terry Raycraft and will oversee fraud cases relating to insurance. Raycraft served as Associate Counsel at the Department of Insurance for over 16 years. During his tenure in the Legal Division, Raycraft prosecuted numerous cases of 
insurance fraud. Prior to joining the Insurance Department, he was in the private practice of law. The commissioner also named Jack M. Brown to manage the new Market Conduct Division. Brown will be responsible for organizing, implementing and managing market conduct functions for the department. Prior to his appointment, he supervised the financial field examiners for the DOI.

GuideOne Restructuring Due to Poor Homeowners
GuideOne announced that they are no longer accepting new Homeowners applications with effective dates of January 15, 2002, or later, claiming poor Homeowners experience and poor year-to-date calendar losses. GuideOne will also be reunderwriting each risk individually in their book of business and nonrenewing those risks with the highest potential for loss. According to Bill Sammon, AVP of Personal Lines Operations, GuideOne has taken substantial actions in the past few years to improve loss ratios with no success. “We have continued to be optimistic about this situation over the last several month believing we would see the monthly loss ratios start to improve,” says Sammon. “Unfortunately this has not happened. Hopefully we will see improvement in 2002 and be able to get back to business.” Existing policy holders will continue to be serviced if they should need a new policy due to their purchase of a new home or a refinance. This does not effect Standard Auto or Commercial Lines. 

Selective Ins. Group Joins Trusted Choice Branding Initiative as a Founding Partner
Selective Insurance Group signed on as a founding sponsor of Trusted Choice, the new consumer marketing brand created by IIAA, announces IIAA CEO Robert A. Rusbuldt.  Selective Insurance Group Inc, headquarter in Branchville, N.J., is a holding company for five P&C insurance companies that offer primary and alternative market insurance for commercial and personal risks. Both A.M. Best and Standard & Poor’s insurance rating services rate Selective Insurance Companies as A+. The consumer rollout of the Trusted Choice Brand will begin next February with pilot markets in Louisville, Ky, and Seattle/Tacoma Wash.

AIIA’s Lauren Mashburn selected as “One to Watch”
ConventionSouth has named Lauren Mashburn, AIIA’s Director of Education Administration, as one of their Meeting Professionals to Watch in 2002. Selected for her professionalism, creativity and dedication to the meetings and convention industry, she was profiled in ConventionSouth’s December 2001 issue. Join us in saying congratulations Lauren!