Happy April - we hope that everyone enjoyed their holiday weekend! In today's Big I Buzz, we are discussing how insurers are facing the cryptocurrency craze, additional support heading to small business in Wisconsin and why you should put this year's Big I Legislative Conference on your calendar. 

Insurers Have Not Yet Embraced Cryptocurrency Craze Despite Demand

According to Reuters, Insurers have yet to catch up with the growing acceptance of cryptocurrencies as an investment and in commerce. "Insurers and brokers estimate that of the few that provide such insurance, none can offer coverage beyond $750 million for any client." Recently, Elon Musk announced that Tesla's customers can now use bitcoin as payment. However, if Tesla wanted to insure all of its recent $1.5 billion bitcoin investment against hacks, theft and fraud, it would be out of luck. 

Brokers say that they see a growing demand for coverage, but they cannot match with sufficient supply. Read more here.

Gov. Evers Announces More Than $46 Million in Support to Small Businesses

On April 6, 2021, Gov. Evers, the WEDC and the DOR announced more than $46 million will go to support an estimated 9,300 small businesses across Wisconsin which will receive a $5,000 grant through the "We're All In" grant program. "The new grants are funded through the federal Coronavirus Aid, Relief and Economic Security (CARES) Act. CARES funds were slotted to expire at the end of 2020, a federal omnibus bill signed before the end of the year extended the deadline until the end of 2021," according to the State of Wisconsin bulletin. Read the entire bulletin here. 

8 Issues Big "I" Members Will Champion During the Legislative Conference

This year's Big I Virtual Legislative Conference will be held April 13-16. Every day at 1 p.m. CST, sessions will run between 45 and 60 minutes. Here are 8 issues that Big I Members will champion during the conference: 

1. Maintain small business tax fairness

2. Oppose federal intrusion into insurance regulation

3. Secure a long-term flood insurance reauthorization

4. Concerns with the PRO Act

5. Preserve employer-sponsored health insurance

6. Defend the Federal Crop Insurance Program (FCIP)

7. Responding to future pandemics

8. Advocating for legal protections for independent insurance agents

You won't want to miss this conference AND registration is free to all Big I Members. Register and learn more about all of the topics being covered at the 2021 Big I Virtual Legislative Conference here. 

OCI Bulletin: Voluntary Extension of Special Enrollment Period for Products Offered Outside the Federal Marketplace

According tot he OCI Bulletin, "On January 28, 2021, President Biden signed an Executive Order reopening the HealthCare.gov marketplace to permit individuals to enroll in comprehensive health insurance coverage. The Centers for Medicare and Medicaid Services (CMS) announced the federal marketplace would reopen for a three-month Special Enrollment Period (SEP) beginning February 15, 2021 through May 15, 2021. In March, President Biden announced an extension to this SEP through August 15, 2021. 

OCI is encouraging insurers offering qualified health plans that have implemented a parallel SEP to provide an extension through April 15, 2021. If an issuer has already offered a SEP for their off-exchange plans, they are asked to submit a simple letter confirming extension of the off-exchange SEP be sent to ociratesforms@wisconsin.gov. 

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. Don’t forget you can stay up-to-date on other industry news as its happening on our Online Community. You can join the Online Community (exclusive to IIAW members)  here. We hope that everyone has a great rest of their week.

Happy Wednesday! In this week's Big I Buzz, we are discussing today's ruling from the Wisconsin Supreme Court, we are announcing tech solution, Catalyit, and the behavioral changes to driving during the pandemic. 

Wisconsin Supreme Court Strikes Down Statewide Mask Mandate

Today (Wednesday, March 31st), the Wisconsin Supreme Court blocked Gov. Tony Evers from issuing any new public health emergency orders to mandate face masks without the approval of the Wisconsin Legislature. The statewide mask mandate was set to expire on Monday, but now ends immediately following the ruling. According to the Milwaukee Journal Sentinel, "The nonpartisan Legislative Fiscal Bureau told Wisconsin lawmakers in January that the state's FoodShare program could lose its extra funding of about $50 million a month if the state's emergency were extended." Read more here.

Introducing Catalyit!

The IIAW is proud to announce tech solution, Catalyit! Catalyit is simplifying technology for insurance agencies. The number of ways that you can leverage tech to increase profits and serve customers is nearly unlimited. Catalyit offers tools, guides & reviews, community, training and consulting to give you all the agency tech guidance you need in one place. Learn more about Catalyit by heading to their website www.catalyit.com. If you sign up for their email list, you'll receive their Top 10 Tech Tips today, and you'll be the first to hear when their free assessment is available. 

Catalyit is launching in June 2021! Click here for more details.

Distracted Driving Behaviors Increased During Pandemic

According to Insurance Journal, one in four drivers think that roads are safer today than they were before the pandemic, yet a growing number of drivers are texting or emailing while driving - in part as more of them feel pressured to be available for their jobs wherever they are."

A national survey of more than 1,000 consumers and business managers was conducted for the 2021 Travelers Risk Index on distracted driving. Respondents reported on their dangerous driving behaviors including: 

• Texting or emailing (26%, up from 19% pre-pandemic)

• Checking social media (20%, up from 13% pre-pandemic)

• Taking videos and photos (19%, up from 10% pre-pandemic)

• Shopping online (17%, up from 8% pre-pandemic)

Travelers reported that such driving behaviors may have contributed in part to more hazardous road. According to the National Safety Council, "Motor vehicle deaths were up 8% in 2020 from 2019 - the highest percentage increase in 13 years." Read more about the findings from the 2021 Travelers Risk Index here. 

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. Don’t forget you can stay up-to-date on other industry news as its happening on our Online Community. You can join the Online Community (exclusive to IIAW members)  here. We hope that everyone has a great rest of their week.

By: David Thompson | CPCU, AAI, API, CRIS FAIA

Over the past few weeks I’ve received a flurry or emails about a customer who owns a fee simple home inside a Homeowners Association (HOA). There are various coverage options, but none of them being the “silver bullet.” Every solution has shortfalls.

While presenting classes at an insurance company about a month ago, several underwriters asked my view of the way to structure coverage. Their position, shared by many underwriters whom I know, is that they will not write a HO-6 policy unless it’s truly a condominium. They would not write a HO-4 policy, either, because their guidelines are that an owner-occupied dwelling does not qualify for the HO-4. That left them with the HO-3 as the only option. One underwriter stated, “Our agents don’t like that for a variety of reasons, two being price and the duplication of coverage between the master policy that often covers part of the dwelling and the HO-3 policy.” He asked, “What information do you have that I can use with agents.” Below are some of the points I made with the staff. Some of the points are my personal view, but I think they hold merit.

• Technically under ISO rules the HO-6 can only be used for

   a condominium unit or cooperative unit; it’s not available

   for a dwelling. Of course, some companies ignore ISO

   rules and make their own decisions.

• My main concern is trusting a HOA board to insure my

   investment that is typically in the hundreds of thousands

   of dollars. Why trust the board to buy a policy on my

   house? To me, it’s akin to asking someone, “Will you

   please buy my automobile insurance and take care of the

   payments?”

• The master policy could lapse and, without a HO-3, the

   owner is left in a bad situation. That exact occurrence

   took place about two months ago (and it’s not the first

   time I’ve seen it) when the HOA lost coverage and was

   unable to replace coverage timely. The agent in question

   received a phone call from a panicked customer who had

   no personal coverage of her own. The agent submitted

   an application for a HO-6 to an insurer who, once they

   underwrote it and saw it was not a condominium, issued a

  20-day cancellation notice.

• The master policy could be underinsured, resulting in a

   coinsurance or ACV penalty for the homeowner.

• The master policy may be lacking coverages. For

   example, there may be no ordinance or law coverage,

   losses might be settled on an ACV basis, the policy might

   not include water/sewer backup, and many more

   important coverages could be missing.

• Property loss checks would be paid to the HOA, not the

   property owner. Thus, the owner has no control over

   those funds and they are at the mercy of the HOA. In

   one recent instance involving roof damage, the

   association would not sign the claim check because only

   part of the roof was damaged and if that part was

   replaced then the entire roof would not match.

• Lenders may not accept a HO-6 policy with a Coverage A

   limit less than the replacement cost of the structure.

• Even with a HO-6 policy, there is the “duplicate

   coverage” issue between the HO-6 and the master policy.

   Whether the policy is HO-3 or HO-6, duplicate coverage

   exists.

• How is a Coverage A limit going to be determined under

   the HO-6? Regardless of HO-3 or HO-6, the best option is

   Coverage A equal to the replacement cost of the

   structure. How many customers will buy that much

   coverage under a HO-6 policy? How will they determine

   the Coverage A limit needed? It’s certainly not the agent’s

   job to do that.

As mentioned earlier, every solution has problems. I joke that if you Google “Control Freak” my photo appears! I’d never trust someone to insure my property. I’d buy the HO-3 policy and ignore any coverage provided by the HOA. I’d certainly rather have double coverage as opposed to no coverage.

By: Jason Kolb | Founder and CEO at DAIS

(March 17, 2021) West Bend Mutual Insurance Company, the Independent Insurance Agents of Wisconsin, and Dais have released the West Bend digital Business Owners Policy for select office classes. Matt Banazynski, CEO of the Independent Agents of Wisconsin, says this digital product is significant because independent agencies can now launch a product with a single line of code.

Murali Natarajan, CIO for West Bend, describes why this digital offering is important: “We understand that technology is moving quickly and we want to give our agents every advantage we can help provide. The West Bend team engineered workflows to take customer experience to the next level by working side by side with our underwriters, agency partners, and the IIAW.”  Agents can now get a “quick quote” for any operation in the Businessowners Policy (BOP) office segment using the Dais Agency Platform. This new feature allows agents to enter relevant information and receive a quote with our new digital product within minutes. The number of risks eligible for the quick quoting feature total more than 30 and include accounting services, graphic art and design, insurance agents, medical offices, and veterinarian or veterinary hospitals.

Through the partnership with Dais, Big I members appointed with West Bend are able to start quoting West Bend products, and other complementary products, with a single line of code on their web site. Matt Banaszynski explained why this type of initiative is important for independent agents: “Online financial and insurance transactions are up 50% by most estimates, and the trend is clearly not going away. Our agents need the right tools and the right partners to compete in this new world, and we’re excited to see some of our agents’ favorite companies like West Bend enabling agents.”

Jason Kolb, CEO of Dais, explained why this is such a great partnership: “All of us believe in independent agents. They are the risk experts, the marketing and sales experts, and they are entrepreneurs. The shift to digital is an opportunity for growth, and it’s our job to provide the right tools. We are giving agents a single line of code that opens up a million possibilities, and this is just the beginning.”

About West Bend Mutual Insurance

Headquartered in West Bend, Wisconsin, the company employs more than 1,300 associates and partners with 1,500 independent insurance agencies in 13 states to offer their customers a broad personal lines coverage package and a full range of commercial products and services, including insurance for specialty lines and bonds. West Bend has been rated A (Excellent) or better by A.M. Best since 1971, and consistently ranks higher than its competitors in an agency loyalty survey.

About IIAW

The IIAW is one of the largest and most influential insurance agent associations in the state representing over 5,000 member agents.

The IIAW was founded in 1899 and are one of the oldest association’s in the state of Wisconsin. Now led by Matt Banaszynski, the IIAW has 120 years of experience and knowledge of the industry.

About Dais 

Dais provides a cloud-based insurance platform that is used by agents and carriers to bring new products to market and to make it easier to do business with them. They use the Dais platform to quickly create new products, distribute them to policyholders, and make the insurance-buying and insurance-servicing lifecycle easier for everyone. For more information please visit dais.com

By: Chris Boggs, IIABA Executive Director of Risk Management and Education

February 2020 seems like a lifetime ago. The then new Coronavirus was only a brief mention on the nightly news, few paid much attention to it. We had heard about pandemics before.

Move forward one month to March 2020 and our whole world changed. Cities, counties and even entire states introduced various measures in immoderate attempts to curtail the spread of the virus. The now infamous if not misquoted phrase or promise, “15 days to flatten the curve,” has dragged into its 11th month.

American business owners and the insurance industry saw something that neither EVER anticipated, the wholesale closure of businesses considered “non-essential.” No one in the business world or insurance business would have ever considered the idea that any government in the US would prevent a legal business from operating, especially for several months at a time.

Prior to COVID, few if any “main street” agents would have anticipated the need to ask about much less search out coverage for governmental actions such as these experienced in the last year. One problem is that few markets existed for such coverage; another issue is that very few agents or brokers even knew these markets existed; and lastly, the cost for such coverage was high (maybe prohibitively high).

From the perspective of the “reasonable man” (or “reasonable agent”) test, it would be unreasonable to hold the agent responsible for something that had never happened on such a large scale in anyone’s lifetime. This was not a risk that could or should have reasonably been anticipated.

Although agents may likely see an uptick in errors and omissions (E&O) claims in the coming months, the anticipation is that few cases will be lost because of the “reasonable man” test. But now COVID has happened, and what may have been an “unreasonable” expectation before is no longer “unreasonable.”

COVID has happened, now what?

Agents are practicing in a new world of probabilities if not possibilities. Previously there was little or no need to address the question of mass government closures of business in the absence of property damage or natural catastrophe because nothing like it had occurred before. Now it has and agents must address the exposure.

A few recommendations for this timid new agency world are:

•Undertake a reasonable search of the agency’s

   available markets and those with which the

   agency has a relationship to ascertain whether

   the necessary coverage is available or not. This

   is not an exhaustive search of the entire

   marketplace as theoretically coverage is

   available for any risk of loss. Rather this is a

   survey of the agency’s standard markets and

   the brokers with which the agency has an

   on-going  relationship and maybe two or three

   additional brokers. If a market is found, learn

   about the market, coverages offered and the

   pricing scheme. If no market is found, state so

   on all proposals and program deliverables.

• During the prospecting and renewal process,

   specifically address the exposure with the

   insured. If the agency has an available market,

   ask the insured if a quote is desired. If the

   agency does not have a market, state that the

   agency was not able to locate a market. (Never

   state that no market exists, only that the agency

   was not able to find a market.)

• Like with any other exposure, make sure that

   the prospect/client signs or initials that the

   exposure has been discussed and what options

   are available from the agency.

• In the proposal, the exposure should be

   addressed again along with the agency’s

   available options (i.e., “The agency does not

   have an available market;” “The agency has a

   market, but could not get a quote because of

   ‘X,’ ‘Y’ or ‘Z’” (whatever the reason); “The

   agency was able to obtain a quote,” then

   provide the coverage specifics)).

• Resist the temptation to create a narrow

   disclaimer focused solely on COVID or a

   COVID-type exposure. Disclaimers should

   be general in nature.

Now that COVID has occurred, anticipating such losses is no longer unreasonable. Agents must now address this loss possibility with prospects and clients. The “one bite” allowance previously available from the “reasonable man” test may no longer be available. Businesses have been bit, now agents must address the exposure.