AM Best has recently downgraded 32 P&C carriers in the first half of 2023, and as a result, now is a good time to revisit SwissRe’s policy language and agency best practices. Should you have any questions, please don’t hesitate to contact IIAW staff.   
 
SwissRe’s policy language as it pertains to carrier downgrades, insolvency, and the exclusions within the policy:  

Section V. EXCLUSIONS, E. INSOLVENCY is deleted and replaced with the following:  

E. INSOLVENCY. The financial inability to pay, insolvency, receivership, bankruptcy or liquidation of any insurance company, any Individual Practice Association, Health Maintenance Organization, Preferred Provider Organization, Dental Service Plan, Risk Retention Group, Risk Provider Group, self-insured plan or any pool, syndicate, association, or other combination formed for the purpose of providing insurance or reinsurance, or any healthcare provider or any reinsurer with which the INSURED directly placed the subject risk.  
 
However, this exclusion does not apply if, at the time the INSURED placed the subject risk with any of the above-described entities, such entity or entities were rated by AM Best as B or higher, or alternatively, such entities were member insurers of the state guaranty fund, guaranty association or the Wisconsin Insurance Security Fund in the state or states of domicile of the subject risk, or such entities were guaranteed by a governmental body or bodies and/or operated by a governmental body or bodies, the INSURED placed the coverage with an insurance carrier through a state established residual market insurance program, or the INSURED placed the coverage with a County Mutual or Town Mutual reinsured by carriers rated B or higher, or the coverage was placed with an insurance carrier admitted in the state or states of domicile of the subject risk and rated A or higher by Demotech.  
 
Guidance as it pertains to carrier downgrades: When an insurer is downgraded below a B, the policy language states, “or alternatively, such entities were member insurers of the state guaranty fund, guaranty association or the Wisconsin Insurance Security Fund in the state or states of domicile of the subject risk” would make this exclusion no longer apply.   For example, Badger Mutual is covered by the Wisconsin Insurance Security Fund. As a result, agencies can continue to represent Badger Mutual and renew and place business with Badger Mutual so long as they follow the procedures as outlined below.  
 
Best practices for agency procedures when continuing business with a carrier with a rating below a B: so long as the state guaranty association covers the carrier, the insolvency exclusion will not apply.  
 
Agencies should notify ALL affected policyholders of the rating change in writing and electronically.  Suppose an agency intends to place new business with a carrier that has been downgraded (such as Badger Mutual). In that case, they should also inform these customers of Badger's rating in writing, what it means, what their options are, and have the customer sign off that they still want their business placed with them despite the low carrier rating.  
 
To help with this, SwissRe has prepared the letter linked below for agencies to use. While you are not required to use the letter, we recommend doing so to cover necessary communications with your clients.   
 
There is no right or wrong decision regarding moving coverage, however, the agency SHOULD NOT make that decision for any of their customers.  Inform the customers and let them decide what they wish to do.  Every E&O claim involving carrier insolvency starts with what the agency knew, when it knew it, and when did it informed its customers. SwissRe’s ability to defend these claims depends on how the client answers these questions, your agency’s ability to follow these procedures for all clients that are impacted and the agency’s thorough documentation in the file.   
 
Click Here for a Sample Carrier Ratings Downgrade Letter  


Guidance as it pertains to carrier Receiverships and Rehabilitations 
First and foremost, the agency must keep its clients informed of the situation. In most cases, the carrier will communicate with their policyholders regarding the situation. The agency can provide additional guidance on the client's options at this time, based on the regulatory action taken by the Office of the Commissioner of Insurance. The agency should NOT notify clients if the carrier has not been placed under an order by OCI. A general rule of thumb would be: if the carrier is not sending client notification, the agency likely does not need to either.  If a carrier is notifying clients of carrier receivership or rehabilitation and the agency does not contact the policyholder/client, a situation could arise where the policyholder/client is not clear on what they need to do. Subsequently, a claim by the policyholder/client could be made that is not covered by the client's policy with the rehab/receiver/liquidated carrier. All of which could lead to an E&O claim against an agency. It is recommended that you try and communicate both electronically and by USPS. 

The recommended course of action for agencies to consider: 

• Run a list from your agency management system to identify potentially impacted clients. 
• Contact the clients to advise them of the situation. Initial contact can be by telephone (document your file!) with a follow-up using one of the sample letters, tailored to your needs (below). 
• If there are other documents provided by the DOI/Receiver that can be shared with the client, include them with your letter (example: FAQ). 
• Document any communications with the carrier/Receiver in your carrier file. 
• Be ready with additional markets to assist your clients. 
• Any newly quoted policies should be reviewed for coverage differences. 
• DO NOT offer to pay any outstanding (or new) claims for your clients OR refund unearned premiums!!! 
• DO NOT rely on the Rehabilitator/Receiver to contact your clients on your behalf. 
• Consult your E&O policy’s Insolvency Exclusion and report any potential incidents to IIAW and SwissRe’s Claims Department. 
• It should be the policyholder/client's decision on the course of action. 
• ALWAYS DOCUMENT THE CLIENTS FILE WITH EVERY COMMUNICATION. 

Finally, your agency’s communication should be clear and concise, and advise the policyholder/client to contact your office immediately to discuss potential options. The agency must inform their policyholders/clients of the situation, what impact it has on their coverage, and what their coverage options are moving forward, and let them decide what they wish to do. Most policyholders are confused as to what to do and what this means for their insurance coverage. While stressful for your agency’s employees, these essential steps will help your agency guard against E&O claims that might arise against your agency from policyholders/clients of carriers in receivership/rehabilitation.  

Click here to download a sample letter for carrier placed in receivership or rehabilitation by OCI. 

 
Guidance as it pertains to carrier insolvency 
On November 1, 2023, the Wisconsin Office of the Commissioner of Insurance (OCI) filed a Petition for Liquidation of Wisconsin Reinsurance Corporation and 1st Auto & Casualty Insurance Company, collectively the WRC Group. The liquidation will have a direct impact on 1st Auto policyholders, and OCI is asking you to immediately start working with your clients who have a 1st Auto policy to assist them in finding replacement coverage prior to January 1, 2024. 

Please visit OCI’s website at oci.wi.gov/WRC for up-to-date information. 

• You can review the notice being mailed to agents here
• You can review the notice being mailed to policyholders here

The IIAW and SwissRe have put together sample forms for agencies to use when a carrier goes insolvent, when an agency is unable to procure coverage the client has requested, when a client is non-renewed and the agency is unable to replace coverage with another carrier. Click the links below to access the sample letters.  

As always, please don’t hesitate to contact the IIAW should you have any questions.  

Click here to access sample letter for carrier insolvency 

Click here to access sample letter for when an agency is unable to procure coverage that the client has requested 

Click here to access sample letter for when client is non-renewed and the agency is unable to replace coverage with another carrier 

Happy Wednesday! In this week's Big I Buzz, we are discussing how natural disasters can affect health insurance enrollment and the inherent risks to owning a hot tub.

Natural Disasters Make People More Likely to Get Health Insurance, Study Finds

A recent study conducted by researchers from the University of Louisiana at Lafayette and Louisiana State University explored the connection between natural disasters and health insurance enrollment. Examining a decade of health care data from the Louisiana Health Insurance Survey and disaster data from FEMA, the study found a slight increase in health insurance enrollment among those who had experienced losses from hurricanes and floods between 2005 and 2017. This surge in enrollment can be attributed to survivors' heightened sensitivity to risk after a traumatic event, increased workforce needs during recovery, and the availability of health insurance in temporary positions related to disaster response. The study suggests that public policy could benefit from a better understanding of how disasters affect people's lives and that improving post-disaster health outcomes is essential. While specific policy recommendations are not provided, the findings could guide future research and influence government agencies and public officials in addressing health care needs after disasters.

Matthew Perry and Hot Tub Risk, Insurance Concerns

The recent death of actor Matthew Perry in his hot tub on October 28, 2023, has highlighted the risks associated with owning hot tubs and raised concerns about liability and insurance. More than 300 people annually suffer hot tub-related accidents, with children being particularly vulnerable. When combined with home swimming pools and spas, the annual injury count exceeds 6,000. Common causes of hot tub injuries include slips and falls, suction mishaps, overheating, and chemical imbalances, which can lead to accidental drownings. Homeowners with hot tubs, swimming pools, or spas require insurance coverage for potential accidents and damage to these amenities, resulting in higher homeowners' insurance costs. The complexity of hot tub insurance claims has led to questions about their equivalence to swimming pool claims, coverage for mechanical equipment, and the nature of damage claims. Some insurance providers may refuse to cover hot tubs due to their inherent risks or require added endorsements for coverage.

Don't forget if you haven't already updated your information to head back to this week's Big I Buzz email so you can receive our monthly email curated for you and your role. For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here  to add your email to our emailing list.

Happy Wednesday! In this week's Big I Buzz, we have a few registration reminders that you won't want to wait on.

"How to Succeed in a Hard Market" featuring MarshBerry

1 to 5 p.m. (happy hour to follow) on November 2, 2023 at the Park Hotel in Madison, WI

Our afternoon of learning from MarshBerry is quickly approaching and registration will be closing soon. If you haven't already, click here to get registered. You'll learn how to better communicate your value in a hard market, improve your strategy for growing organically and improve your internal culture. Plus, following the event, join us for drinks and apps!

InsurCon2024 Attendee Registration Price Increases on November 1st

Join the IIAW as we celebrate 125 years at InsurCon2024, happening on May 15-16, 2024 at the iconic Lambeau Field! Don't wait to register, as our Early Bird pricing is only available until the end of the day on October 31st.  

If you haven't already, check out what's included with attendee registration:

• An Evening with Charles Woodson
  Includes Past Presidents' Cocktail Hour
  Charles Woodson Keynote Presentation
  Bottle of Charles' Whiskey or Wine
  Meet & Greet Led by Professional Photographer
  
  
• Meet Packers Head Coach Matt LaFleur
  Includes Meet & Greet with Matt LaFleur
  Cornhole Tournament
  Ultimate Tailgate Dinner
  
  
• E&O Risk Management Course
  Includes 3 Ethics CE Credits
  
  
• Insightful Panel Discussions
  IIAW Past Presidents' Panel
  Green Bay Packers Risk Management Panel
  CEO Panel
  
  
• Wisconsin's Largest Insurance Exhibitor Showcase
  Ability to network an win BIG prizes (cash, door prizes and Blackout Bingo prizes)
  
  
• Agency Appreciation Luncheon (Invite Only)
  Open to agency personnel, Exclusive Supporting Company Members and those who receive a special invitation. Includes access to the Champions Club, lunch, a presentation featuring Packers Director of Public Affairs, Aaron Popkey, and a fast-paced CEO Q&A
  
  
• Exceptional Dining Experience
  Agency Appreciation Luncheon (Invite Only)
  Ultimate Tailgate Cuisine During Tailgate Party
  Continental Breakfast
  Gourmet Lunch Overlooking Lambeau Field
  Evening Celebration Dinner in Lambeau Field Atrium
  
  
• Guided Lambeau Field Stadium Tour and Hall of Fame Tour
  Join us on Friday, May 17th to redeem your guided Lambeau Field Stadium Tour and self-led Hall of Fame Tour
  
  

Learn more about this year's milestone event and register before our Early Bird savings are gone: https://www.iiaw.com/page/insurcon 

Don't forget if you haven't already updated your information to head back to this week's Big I Buzz email so you can receive our monthly email curated for you and your role. For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here  to add your email to our emailing list.

Happy Wednesday! In this week's Big I Buzz, we are discussing 9 mistakes homeowners make when filing an insurance claim and a look at Q3 personal and commercial lines rates.

9 Mistakes Homeowners Commonly Make When Filing an Insurance Claim

According to the Insurance Information Institute's (Triple-I) review of claims date from 2017-2021 about 1 in 20 home policyholders will have a claim each year. Here is a list of nine common mistakes homeowners make when filing an insurance claim, according to Forbes Advisor: 

9. Filing too many claims - Insurance companies consider previous claims history when setting rates, and policyholders with a record of filing claims are likely to be considered a higher risk of generating more claims in the future. Forbes Advisor noted that sometimes it is wiser for a homeowner to pay for small repairs rather than filing a claim. 

8. Cleaning up too fast - While most people want to clean up after an accident as soon as possible, homeowners who have a loss such as a fire or flood should wait until all the damage is properly documented.

7. Not documenting damage - Forbes Advisors noted photos are a policyholder's friend when filing a claim and ideally they would have photos before and after the loss event. 

6. Waiting to file a claim - Policyholders shouldn't delay when filing a claim as this only prolongs the time it will take to get the property repaired. 

5. Not communicating clearly - Homeowners are often less than clear when describing property damage, and this poor communication can result in delays in the claims process. 

4. Not maintain a property - Insurance covers unexpected damage, not issues caused by failing to properly care for a home. Neglecting to correctly maintain a property can lead to a claim being denied, according to Forbes Advisor. 

3. Not having a home inventory - A complete list of a home's contents is a vital tool when dealing with an extensive loss. 

2. Having the wrong coverage - Along with not understanding what is covered, having the wrong type of coverage is a common mistake, according to Forbes Advisor, which gave the example of misunderstanding exclusions or confusing actual cash value with replacement cost. 

1. Not reading the policy - Not understanding what a policy covers can lead to disappointment when a homeowner goes to file a claim for an event that isn't covered, such as flooding. 

Read more here. 

Personal and Commercial Lines Rates Moderate in Q3

The third quarter of 2023 witnessed notable trends in the insurance industry, as reported by MarketScout. Personal lines in the United States held a composite rate of 4%, showing insurers' growing confidence in their results. However, concerns arise due to the record-breaking heat of the summer. For personal lines, home rates showed moderate increases, with homeowners under $1,000,000 value up by 3.7% and homeowners over $1,000,000 value up by 5.3%. In contrast, commercial insurance rates saw a more tempered rise, with business owners' policies (BOP) experiencing an increase from 3.2% to 5%. While reinsurers have been strict in the past, they are now showing signs of moderation, which is translating into better terms for insurers and customers. Increased interest rates are also contributing to the moderation in rates. The report suggests that some property underwriters anticipate ongoing rate hikes, potentially driven by the hottest summer on record in 2023. Furthermore, a report from the Consumer Federation of America highlights that CEOs of the top 10 personal insurance line businesses received substantial compensation as insurance prices continued to surge. Read the full article here. 

Don't forget if you haven't already updated your information to head back to this week's Big I Buzz email so you can receive our monthly email curated for you and your role. For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click here to add your email to our emailing list.

Happy Wednesday! In this week's Big I Buzz, we are sharing how consumers feel about AI insurance agents and we're giving you a closer look at the InsurCon2024 schedule. 

AI Insurance Agents? No Thanks, Consumers Say

A recent survey conducted by online insurance agency GetSure reveals that the majority of Americans are uncomfortable with the idea of interacting with AI insurance agents. The survey, which polled 1,000 respondents, found that only 9% of participants felt "very comfortable" with the concept of AI insurance agents, while a staggering 70% expressed discomfort. Even the prospect of discounted rates failed to sway opinions, with 55% still preferring human agents over computerized counterparts. The top concerns voiced by respondents regarding AI insurance agents were inaccurate recommendations (59%), potential job loss for human agents (53%), and the misuse of personal information (43%). However, despite their reservations, 68% of those surveyed believed that AI would dominate the insurance industry within the next two decades. GetSure emphasized the importance of maintaining an open dialogue with consumers to address their concerns and improve AI-based insurance offerings.

InsurCon2024 Schedule

Join us on May 15-16, 2024, as we celebrate our 125-year anniversary at our annual convention, InsurCon, a once-in-a-lifetime event set against the breathtaking backdrop of Lambeau Field. As Lambeau Field opens its doors exclusively for our 125th anniversary, you'll experience its legendary aura like never before. With cheers of the past, the energy of the present and the promise of the future - all converge in this unforgettable celebration. An extraordinary year like this means you'll receive more than ever with your event registration. Here's what you have to look forward to on our InsurCon2024 event schedule.

Day 1 (Wednesday, May 15th, 2024)

9 a.m. - Registration Opens

10:30 a.m. to 12:30 p.m. -  Agency Appreciation Luncheon *Open to agency personnel and those receiving a special invite.*

Celebrate the heart of our industry at the exclusive Agency Appreciation Luncheon, a gathering dedicated to recognizing our valued agency personnel and esteemed invitees. Hear how the Packers prepare for the 2025 draft, their marketing strategy and how they respond to negative events from Green Bay Packers Director of Public Affairs, Aaron Popkey. We'll also feature a fast-paced CEO Q&A.

1  to 4 p.m.  - E&O Risk Management Course (3 Ethics CE Credits)

Earn 3 Ethics CE credits during Mallory Cornell's Less Risk. More Reward. E&O Risk Management course. This course will be full of storytelling, statistics and E&O risk mitigation tips and it is premium credit approved by Swiss Re. 

4:30 to 9 p.m. - IIAW 125th Anniversary Tailgate Party [Meet Green Bay Packers Head Coach, Matt LaFleur]

Gear up for an exciting tailgate party, featuring an exclusive Meet and Greet with Packers Head Coach, Matt LaFleur, an exhilarating cornhole tournament, tailgate games and dinner.

Day 2 (Thursday, May 16th, 2024) 

8 to 9 a.m. - Continental Breakfast

Stop by registration outside of the Legends Club Room to pick up breakfast before the panels begin. 

9 to 9:45 a.m. - IIAW Past Presidents' Panel

We'll engage in insightful discussions with our four esteemed former presidents of the IIAW, delving into their experiences and perspectives on the industry's evolution. 

Past Presidents Include: Mary Hosmer, Paul Leitch, Darrel Zaleski and Marc Petersen

10 to 11:15 a.m. - Green Bay Packers Risk Management Panel

Join us as we listen to local leaders in risk management and crisis management and how they mitigate their exposures. Hear how professionals plan for Packer game day events and other potential hazards that face the city and events in Green Bay.

11:30 a.m. to 12:30 p.m. - CEO Panel

Gain valuable insights into the insurance industry's future trajectory from top CEOs in our CEO Panel, as they discuss emerging trends, challenges and innovative strategies shaping the landscape. Panels to be announced.

12 to 1:30 p.m. - Gourmet Lunch

12:30 to 3:30 p.m. - Exhibitor Showcase

Network and connect during our Exhibitor Showcase on the North Balcony, overlooking the Lambeau Field Atrium. Agency attendees can win great prizes during Blackout Bingo and exhibitor Super Door Prize giveaways. 

5 to 6 p.m. - Cocktail Reception Honoring IIAW Past Presidents

All attendees are invited to our special cocktail hour preceding the evening's celebration as we set the stage for a spectacular night with a photo opportunity overlooking Lambeau Field. 

6 to 9 p.m. -  Evening Celebration with Keynote Speaker Charles Woodson

Friday, May 17th, 2024

9 a.m. to 12 p.m. Lambeau Field Stadium & Hall of Fame Tours (Must Reserve Time Slot via Separate Registration)

Lambeau Classic Stadium Tour and Hall of Fame Combo is included with registration. 

Classic Stadium Tour Details: 1 hour guided tour visits the following locations: Lambeau Field Atrium, Player's Tunnel, Club Level Suite and Field Sideline

Hall of Fame Tour Details (Self-Guided): A tribute to the greatest story in sports, the facility uses technology, enhanced interactive displays and a treasure trove of artifacts to educate and inspire visitors about the rich history of the Packers, as well as the teams of today. Guests are able to see Packers legends describe historic games in their own words and can scroll through touch screens to click on audio segments and game video clips that tell the team's story. The Hall of Fame also displays trophies from the Packers' 13 world championships, including four Lombardi trophies. The hall's most popular exhibit is a replica of Vince Lombardi's office. 

Prepare for an unforgettable evening of celebration and inspiration, as we commence with an esteemed awards ceremony and a presentation from Charles Symington, IIABA CEO. We'll enjoy a delicious dinner and journey through the rich history of the IIAW over the last 125 years. Charles Woodson will lead a keynote presentation that promises to leave a lasting impact. Cap off the night with an exclusive Meet & Greet session, offering the chance to connect with Woodson up close and personal.

Registration is now open! Reserve your spot today and take advantage of our early bird pricing, ending at the end of the month! If you're an exhibitor, visit iiaw.com/insurconexhibitor to reserve your booth. Don't wait as booth space is limited.

Don't forget if you haven't already updated your information to head back to this week's Big I Buzz email so you can receive our monthly email curated for you and your role. For more news, check out the Action News section of our weekly e-newsletter, Big I Buzz. If you aren’t subscribed, click  here to add your email to our emailing list.