Wisconsin businesses who had been facing hundreds of millions of dollars in unexpected state tax liability on loans they received from the federal Paycheck Protection Program (PPP), can rest easy now with the enactment of Assembly Bill 2 - this session’s first piece of legislation signed into law by Governor Evers as 2021 Wisconsin Act 1. The Paycheck Protection Program was part of the $2.2 trillion CARES Act passed by Congress in March 2020 to help keep small businesses afloat during the pandemic. Any PPP loan proceeds used for qualifying costs i.e. payroll, health insurance for paid sick, medical, or family leave, mortgage interest payments, rent and utility payments, and 60% of the loan proceeds are used for payroll costs, the federal government forgives the loan. While a loan does not generate taxable income, a forgiven loan generally does. Congress took steps to address this issue by clarifying that forgiven PPP loans under the CARES Act are not included in taxable income for federal tax purposes. But some states like Wisconsin were looking at PPP loans as taxable income and a revenue generator for state coffers. Wisconsin businesses were facing a tax increase to the tune of about $450 million. A large coalition of statewide business groups, including IIAW, quickly organized with grassroots member advocacy and lobbying state lawmakers to deal with this issue. Legislators in both parties and the Evers Administration acknowledged they were overwhelmed by the thousands of communications they received from local businesses and constituents all across the state. It was an impressive, collective, grassroots effort assembled in a short amount of time and a prime example of the importance and value of membership in a trade association like the IIAW. On behalf of our members and their customers, the Association thanks all 114 legislators who voted in a bipartisan manner to support the bill and keep our economy moving forward.

COVID-19 Liability Protections Closer To Becoming Law

IIAW, working in conjunction with other major business associations, has been working since last year advocating with state lawmakers on the importance of passing COVID-19 liability protections for our state. Following several failed attempts at passing legislation and through lots of subsequent negotiations with stakeholders, a measure to protect businesses, schools, non-profit organizations and other entities from civil lawsuits related to the Coronavirus pandemic, is now closer to becoming law. Special Session Senate Bill 1 overwhelmingly passed the State Senate on a bipartisan 27-3 vote and the Assembly is slated to also pass it. Governor Evers has publicly stated that he intends to sign the bill into law as part of other measures dealing with updating the state’s Unemployment Insurance (UI) system. The liability protection language was added as an amendment to separate legislation that Evers has prioritized with the state’s outdated UI system that has been overburdened by the pandemic due to the volume of claims. Under the amended bill, reasonable protections are created from civil liability caused by an act or omission resulting in exposure to COVID-19. Such protections would not apply if the entity engaged in reckless or wanton conduct or intentional misconduct. The legislation would help ensure that business and other entities are implementing protocols to protect public health and welfare by affording them protection from potentially bankruptcy-causing lawsuits. The bill also gives employers a needed level of certainty that they will be protected from such liability and would help ensure businesses are comfortable reopening and staying open. If Wisconsin’s economy is going to successfully rebound from the global pandemic, our members and their customers cannot be hampered with the threat of lawsuits tied to COVID-19.

Having a fair and predictable state liability system is vitally important for a stable insurance climate and the Association applauds the members of the Legislature for working hard to get the job done.

Governor Evers Unveils $91 Billion State Spending Plan

Governor Tony Evers (D) delivered virtually his 2021-23 executive state budget plan to the Legislature this month proposing an overall operating budget of $91 billion over a two year period. Evers’ 1,846-page budget proposal will be carefully examined and changed by the Legislature’s 16-member Joint Finance Committee over the next several months before both houses of the Legislature debate and take votes until a final budget bill is passed by both houses.

The budget timeline and process will be:

• The Joint Finance Committee will hold agency briefings and conduct public hearings on the budget
  
• The Joint Finance Committee will then begin to vote – agency by agency – on changes to the budget and send its version to the the Assembly and Senate
  
• In June, the budget will be debated and eventually passed by both houses of the Legislature
• The Governor will review budget for potential line item vetoes and sign bill into law

See more details on the Governor’s budget proposal

Happy St. Patrick's Day! In this week's Big I Buzz, we are discussing InsurCon2021, how renovations made during the pandemic could impact home insurance and record amount of debt Americans paid off in 2020.

Save the Date for InsurCon2021

Join us August 10-11 at the Kalahari in Wisconsin Dells for InsurCon2021. We are looking forward to seeing you all for this safe, in-person event, as well as welcome our keynote speaker, Hall of Fame quarterback, Joe Theismann. Safety is at the top of our mind, and we will be following all guidelines outlined by the Kalahari, the Wisconsin Department of Health Services and the CDC. The Kalahari's new convention center gives us the space to follow all safety precautions, while still being able to enjoy this amazing event. We have a great lineup of speakers for this year's event! In addition to Joe, we'll also be welcoming Beth Ziesenis and Bill Pieroni. Beth, aka Your Nerdy Best Friend will provide a light-hearted, entertaining look at tools and apps that will help you increase efficiency. Bill will offer an in-depth, yet enthusiastic, discussion of the independent agency carrier arena. We are looking forward to seeing you all in-person this summer! Head to our website for more information and to register today. 

Renovations During Pandemic Could Impact Home Insurance

According to NerdWallet, three out of every five homeowners did a home improvement project during the first half of the pandemic. Turning a bedroom into a home office likely won't have an impact on home insurance, but other remodels that have become popular during the pandemic could. According to 10 News San Diego, "Renovation insurance is something to consider to cover expensive materials or unexpected issues that might come up during a project. Backyard pools have become a hot commodity as well. Some home insurance companies see them as added liability, which could increase your premium. They may also require fences or other security features. 

"When you think about removing fireplaces, security systems, upgrading electricity or plumbing, those are things that in a big way can improve your home. And then, if you think about the roof as one of the biggest things that's going to protect your home from weather or other elements," said Stephen Kates, a certified financial planner and analyst at Bankrate. None of these changes should drastically change your home insurance policy unless you've done a total gut of the home. 

Americans Paid Off a Record $83 Billion in Credit Card Debt in 2020

While COVID brought many hardships, for some people this has led to better budgeting. While being forced to stay home, consumers have been paying down debt and saving more than they have in decades. Along with this, many are leveraging low interest rates to refinance and lower their monthly bills. According to a Credit Card Study by WalletHub, Americans repaid almost $83 billion in credit card debt during 2020. The study also found that by the end of last year, the average household credit card balance fell to $8,089. Many experts expect a surge in spending once people are vaccinated and COVID-related restrictions are lifted. 

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: Mallory Cornell | IIAW Vice President & Director of Risk Management

Do you ever wonder what types of errors are most often the cause of E&O claims? Does high occurrence also mean high costs? In a recent review of E&O claim data from our partners at Swiss Re Corporate Solutions, it was found that Wisconsin insurance agents incur the highest claim costs from failing to recommend coverage, but that’s not the most common type of error in the state. In fact, only about 7% of Wisconsin E&O claims arose from failing to recommend coverage.

The data shown in the tables is provided by Swiss Re Corporate Solutions and captures claim information from January 2015 - December 2019.

While we can only speculate specific reasons for why certain error and omission allegations are more prevalent in Wisconsin than nationally, we can learn from this information and use it to improve agency operations and employee E&O awareness.

For   example,   if   28%   of   E&O   claims   in   Wisconsin   are   due   to   failing   to   procure coverage   then   agencies   should   have   a   heightened   awareness   around   agency workflows to review applications and policy information. Failing to procure coverage is often the result of missing one of more aspects of the insureds request. It might be an additional vehicle or adding an endorsement for requested coverage. As the data shows, these types of errors can also be costly accounting for about 22% of incurred claim costs.

The team at the IIAW provides continuing education, valuable storytelling, and increased E&O awareness for member agencies. In Wisconsin, we are legally required to procure coverage requested or inform the customer if coverage cannot be obtained (also known as “order taker” status). However, almost every agency has a requirement to do more than this because of the special circumstances that exist in the relationship with a customer. A special relationship is easier than ever to argue in court. With social media and websites stating services, qualifications, and promising coverage reviews, you likely have a higher duty to your customer than what you might expect. This is not always a negative, but everyone in the agency needs to be delivering the same level of customer service for each insurance transaction. Do what you say and say what you do. Seems simple enough, but oftentimes our statements and promises can get away from us.

So, what can the IIAW do to help? Our commitment to offering services for agency exposures is ongoing. As your E&O insurance provider and dedicated team of agency risk management professionals, we offer E&O Risk Management classes, Agency Operational Improvement Reviews and one-on-one support to review agency workflows and customer experiences.

Protecting your future and your agency from a costly E&O claim is important to us. You are always invited to reach out to any IIAW team member with questions about agency operations or E&O risk mitigation services through the Association.

Happy Wednesday and welcome to the month of March. In this week's Big I Buzz, we're discussing a few upcoming events that you won't want to miss, how insurance agents can avoid being victims to hackers and the Join Task Force on Payroll Fund and Worker Misclassification's recommendations for Gov. Evers. 

Upcoming Events to Put on Your Calendar NOW:

InsurCon2021 - August 10-11, 2021

Join us August 10-11 at the Kalahari Resorts & Convention Center in Wisconsin Dells for our safe, in-person convention.The Kalahari is home to Wisconsin's largest indoor waterpark and brand new events and convention center. You won't want to miss our keynote speaker and Hall of Fame quarterback, Joe Theismann! Our other amazing speakers include Beth Ziesenis and Bill Pieroni.

Beth Ziesenis

Beth, a.k.a. your nerdy best friend, has authored six books, and she keeps up with the latest technology to educate and entertain attendees with the fast-changing world of technology.

Bill Pieroni

Bill is the President & CEO of ACORD, the standards-setting body for the global insurance industry. His career has spanned technology, operations and top executive roles at several top insurers, brokers and consulting firms. Bill's areas of particular expertise include digitization, change management and the strategic and capability imperatives for a high performance in the insurance industry.

We will be following all safety guidelines outlined by the Kalahari, the Wisconsin Department of Health Services and the CDC. As guidelines evolve as we move closer to the event, we will be clearly communicating any requirements or changes as we approach InsurCon2021.

Registration will be opening soon! Keep an eye out as we continue to release new information about the schedule of events. If you have any questions about InsurCon2021, please visit iiaw.com/insurcon2021. Exhibitors can reach out to our Membership & Event Coordinator, Andrea Michelz, (andrea@iiaw.com) for more information. 

Big "I" Virtual Legislative Conference - April 13-16, 2021

The Big "I" has your back, especially in uncertain times. While you are helping your clients, the Big I team is working around the clock to protect your industry. Join us from the comfort of your computer or mobile device, and get up to speed on the many legislative, regulatory and legal challenges to your profession happening now. Hear from legislators, carriers and industry leaders and walk away with a plan to help you lead the way and protect your industry. 

Schedule of Events: 

Tuesday, April 13th at 1 p.m. CST:
Congressional Leaders: Agenda for Small Business

Wednesday, April 14th at 1 p.m. CST:
Legislative Update: A Briefing from the Hill

Thursday, April 15th at 1 p.m. CST: 
Capitol Hill: Messages from the Middle

Friday, April 16th at 1 p.m. CST: 
Conversations: Industry Leaders and National Commentators

Hackers Targeting Insurance Agents

There has been an increase in the number of insurance agents being targeted by online hackers. According to Steve Anderson, "Hackers have been systematically tracking and collecting the email addresses of insurance agency employees. They are now targeting the passwords used by insurance agency employees, and data shows that in some cases, passwords can be acquired. When successful, hackers can access the quote applications. Phishing emails are sent to consumers using false company identity, email addresses and insurance company logos to collect additional information." 

Steve recommends taking these steps to avoid hacking, 

Agencies should use a password management program for every computer in the office (or at home for remote workers), so that every employee can have a complex and unique password for every site. 

Next, inform employees of the potential for suspicious emails. Before anyone clicks on a link, they should understand where the link will actually lead to. "In Outlook, you can do this by hovering your mouse over the link. A small pop-up will show the actual link address. If it looks suspicious, delete it," Steve says. 

If the link looks legitimate, you can then type the link address into your browser rather than clicking the link within the email. 

Finally, head to the IIABA's website to download the latest Agency Cyber Guide to forward to all of your employees. Follow-up with a short meeting to emphasize the importance of protecting client information. For more information click here. 

2021 Joint Enforcement Task Force on Payroll Fraud and Worker Misclassification Report

The Joint Task Force on Payroll Fraud and Worker Misclassification submitted its annual 2021 report with a series of recommendations to Governor Evers this week. A number of recommendations, including establishing an Insurance Fraud Bureau, would impact Workers' Compensation and would require the Legislature to pass enabling legislation in order for them to be enacted into law. It remains to be seen whether the Legislature will act upon recommendations from the report. For a full list of task force recommendations, head to page 8 of the report 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.

Happy Wednesday! We are closing in on the start of March, and that means spring is on its way (eventually). In this week’s Big I Buzz, we are discussing the uninsured rate among young adults, the top risks facing the technology sector in 2021 and the best retirement spots for insurance pros, according to Property Casualty 360.

A Medicaid expansion is largely to thanks for the number of young adults without health insurance plummeting between 2011 and 2018. According to Inquirer, its not unusual for young adults to historically have high uninsured rates because they’re less likely to have full-time jobs that offer insurance and can’t afford a plan on their own. Healthy young adults might not see the value in purchasing insurance if they don’t use medical services frequently. “But between 2011 and 2018, the uninsured rate among adults age 19 and 25 fell by nearly half - from 30% to 16% - as many gained coverage under Medicaid or through the ACA marketplaces, with help from income-based tax credits, according to the Urban Institute report. The ACA also made more young eligible adults stay on their parents’ insurance by raising the age to 26, though that’s no help if the parents are among the pandemic unemployed. You can read more about this report here.    

The Top Risks Facing the Technology Sector in 2021

Willis Towers Watson has released a new report warning that the move towards economic nationalism is causing “increasing concern” to the technology sector and may result in lasting impacts on supply chains and IP. According to the report, these are the top risks to the technology sector in 2021: 

• Political aftershocks of COVID-19
• Political uses and abuses of technology
• European Union tech regulation
• Economic nationalism

Willis Towers Watson’s U.S. political risk product leader of financial solution, Laura Burns, said, “The technology sector will continue to develop and adapt, but its ability to work in a volatile business environment is critical.” Read more about the report here.    

12 Best States for Insurance Pros to Retire to in 2021

Approximately 400,000 insurance-industry employees are expected to retire from the workforce within the next few years, according to the U.S. Bureau of Labor Statistics. Unfortunately, due to the effects of the pandemic, 1 in 4 people expect to retire later than they anticipated. Affordability is a top concern for people when they retire, and some states are more affordable than others. For example, Hawaii’s cost of living index for retirees is 2.3 times higher than it is in Mississippi. 

WalletHub compared the 50 states across the key dimensions of affordability, quality of life and health care, evaluating those dimensions using 45 relevant metrics. We're partial to the fishing spots, golf courses and cheese we have here in Wisconsin, but here’s the top 12 states WalletHub suggests: 

• Missouri
• Wyoming
• New Hampshire
• Minnesota
• Utah
• Idaho
• Montana
• North Dakota
• Virginia
• Delaware
• Colorado
• Florida

You can see the full list from WalletHub 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.