By: Matt Banaszynski | CEO of IIAW

Thank you!

I want to start off by thanking all our company sponsors. Without their support, the IIAW could not do what we do on behalf of the independent  agency channel. Their support is critical to our mission of serving independent agents. As a member of the association, please take a moment the next time to chat with one of our company supporters and thank them for their support of your association.

Schedule Rating Update

As you may know, several carriers have been advocating for the implementation of schedule  rating. Early last year the IIAW Board of Directors voted unanimously to oppose efforts within the  Workers Compensation Rating Bureau (WCRB) to recommend to the Commissioner of Insurance that Wisconsin move to adopt schedule rating. As a result, IIAW Government Affairs Chairman Jeff Thiel and I have been very active in presenting at and attending WCRB meetings and voicing our opposition to any  effort to adopt schedule rating. The IIAW has also discussed our opposition with Insurance  Commissioner Mark Afable and his staff.

On September 2, 2020 a motion was brought forward within the WCRB’s rating committee that would have advanced the exploration of schedule rating in 

Wisconsin. The vote on the motion resulted in a 6-6 tie. In the event of a tie, the motion goes to OCI to break the tie. On September 16th, the IIAW was notified that OCI had chosen to abstain from voting on the motion whether to move forward with further evaluating the extent of industry support for schedule rating in Wisconsin.Pursuant to WCRB Bylaws, Article XI, Paragraph 2, because a majority of members of the Rating Committee did not assent to the motion and the OCI abstained, the motion did not pass.

We will continue to monitor the situation, but we hope, for now, the issue of advancing schedule rating in Wisconsin is dead. If more action is taken, we will be sure and communicate accordingly to our members and move aggressively to defeat it. The IIAW wishes to thank those carriers that voted against schedule rating and stood with their independent agency sales force in opposition. If you have any  questions regarding the events that occurred and would like additional insight and information, please do not hesitate to contact me.

City of Milwaukee Contractor Insurance Requirements

Over the last month, I have been contacted by several agency members regarding whether the City of Milwaukee’s standards preclude permitting  contractors who meet the City’s insurance requirements through surplus lines insurance. The City of Milwaukee (or one or more of its departments) has denied permits to contractors who seek to meet the City’s insurance requirements through surplus lines insurance. The City has relied on contract terms which require that a contractor’s insurance carrier “be  authorized to sell insurance in the State of Wisconsin and . . . submit its agent’s license with the certificates [of insurance].” The City’s reliance on those terms appears to be misplaced.

In working with IIAW’s Legal Counsel, Josh Johanningmeier, we reviewed the sample terms which the City has cited when denying contractor clients permits. According to the team at Godfrey & Kahn S.C., “the short answer is that the City’s standards  likely do not preclude the use of surplus lines insurance. As an initial matter, Wis. Stat. § 618.41  permits domestic surplus lines insurers and nondomestic insurers that have not been licensed by the State to place surplus lines coverage in  accordance with the statute. Such surplus lines insurers are, thus, “authorized” to sell insurance in Wisconsin.

In addition, published terms and conditions governing City of Milwaukee contracts require that contractors provide the City with a certificate of insurance that is either issued by a company licensed to do business in the State of Wisconsin or signed by an agent licensed by the State of Wisconsin. A contractor should thus be permitted to meet the City of Milwaukee’s insurance requirements through surplus lines insurance,  provided the contractor supplies the City with a certificate of insurance signed by a licensed surplus lines agent.”

I wanted to share this information with you in the event you are having any similar issues with the City of Milwaukee or any other municipality as it relates to their insurance requirements. IIAW’s legal counsel has prepared a memo for the Association on this topic that is available to members to provide to municipalities in the event you are faced with a similar situation or interpretation. If you are, please do not hesitate to contact me to discuss the situation further and receive this memo.