in this issue >>>

-Young Agents Conference
-Microchip Shortage. . .
-Insurance Hall of Fame Nominations
-In Memory of . . .
and more. . .
Agent Newsletter April 29, 2022

Young Agents Conference is back with a great line up of speakers, CE opportunities, and networking with our fellow young agents!

We are excited to see all of our fellow young agents again, and get back to what has made this group great for many years!

Company Meetings
Company meetings were held virtually on April 19th. Members of the Association from across the state heard presentations from
Company leaders provided plans for future company initiatives, marketing objectives, and the important roles independent insurance agents play in their continued growth and success. Keep a lookout in our next Viewpoint magazine for their feature articles! Thanks to all who participated in this important event.

5 Minute E&O Fixes Webinar
The Big “I" Professional Liability Risk Management team invites Big “I" members to attend a complimentary new webinar, “Five Minute E&O Fixes: Tips, Tricks and Tiny Tweaks That Help Protect Your Agency." 

What can agents do in five minutes or less in their daily work that will have a big impact on errors & omissions prevention? And now we have some answers.

Join Big “I" Professional Liability staff and our guest risk management wizards, who will overview several easy tactics to keep your agency out of E&O harm's way.

Three sessions will be offered. All sessions contain the same content. All Big “I" members and staff are welcome and encouraged to participate.
Register now: 

·       Thursday, May 12 at 1-2 p.m. ET
·       Tuesday, May 24 at 1-2 p.m. ET
·       Tuesday, June 7 at 1-2 p.m. ET

Learn more about agency risk management and review articles, claims data, and more resources at E&O Happens.

Need CE's?
*note this is only for ABEN classes - click on image to view what is available.
Cindy Grim Retiring
After 18 years with the Big “I”, Cindy Grim is retiring from the Association. When people ask me what Cindy does at the association, the answer is easy….a little bit of EVERYTHING!  Cindy’s last day will be Friday, May 13th so feel free to reach out to Cindy and wish her well. We are looking to replace Cindy as soon as possible so anyone with any knowledge of someone looking for work, please have them reach out to Tom at [email protected]. Thank you. 
How the Microchip Shortage Is Impacting Personal Auto Insurance
The microchip shortage plaguing the auto supply chain is the result of a perfect storm that was brewing even before the coronavirus pandemic and will remain for the near future, according to a U.S. Department of Commerce study released in January.

Difficulties obtaining production equipment and components, as well as swelling demand for cars, were punctuated by Black Swan events such as factory fires, energy shortages, winter storms and, of course, COVID-19, the study explained. “Significant, persistent mismatch" in supply and demand for microchips; median demand for microchips rising 17% higher in 2021 than in 2019; and median inventory of semiconductor products falling from 40 days in 2019 to less than 5 days in 2021, means “the semiconductor supply chain remains fragile," the report said.

That's bad news for the personal auto insurance market. “A new car off the lot has approximately 1,000 chips in it these days, which is significantly higher than even five or 10 years ago," says Jim Hyatt, executive vice president and chief underwriting officer at Arbella Insurance Group. “An electric vehicle actually has around 2,000 chips in it—so with the demand for all the hybrid and electric vehicles, the demand for chips is extreme."

However, the microchip shortage joins a list of other factors impacting personal auto. “With the demand for car parts and new cars, the supply chain is slowing everything down, impacting not only the time it takes to get things, but the cost of the items," Hyatt says. “Due to the pandemic, people had been less comfortable taking public transportation, and preferred to buy cars to drive themselves. Many people moved out of the city to live in the suburbs, which has also driven up the demand for car sales."

The labor shortage is another big factor. “There are labor shortages in body shops and auto manufacturers, and that just raises costs and increases the time to get cars repaired or to manufacture them," Hyatt adds.

The extra time and money to repair or replace vehicles puts carriers in the hot seat, especially those that consider a smooth claims process as a differentiator. “The loss ratio strain that the auto insurers are feeling right now may mean a slight hit to profit-sharing for independent agents," he says.

“Agents may already be seeing how customers are frustrated with how long it takes a vehicle to be repaired," Hyatt continues. “They need to prepare their customers for the claims process and how it has been impacted by the supply chain."

As the cost to manufacture and repair increasingly chip-dependent cars continues to grow, “one big impact this may have on the industry in the future is that the cost to repair the vehicle is overwhelming the benefit of improved crash avoidance," he says. “All these vehicles are so much safer today because of the lane departure warnings and alarms that help avoid accidents. The expectation has been that eventually safer vehicles would drive down accident rates faster than the cost to repair, so auto rates would potentially come down. But now that's a bit more in question."

Another future trend that agents should keep an eye on is “a number of startup auto insurance companies around the country are based on data-driven pricing models, but many of these companies have outsourced their claim organizations in totality," Hyatt adds. “With these massive increases in chip costs and the supply chain challenges, I think some of these startup auto insurers will really begin to struggle, if they haven't already."
REMINDER - Annual Planning Meetings
This year’s annual planning meetings will take place in person at Prairie Meadows Convention Center on May 25th at 10 a.m. If you have signed up for a committee, please plan on attending your respective meeting and joining all of your peers for lunch. Information will be sent to you individually regarding the starting times and meeting rooms for each committee. Thanks you for your participation in this important event.  
Iowa Insurance Hall of Fame Nominations
The 2022 Iowa Insurance Hall of Fame Induction Ceremony will be held on Tuesday, October 18th at The Meadows at Prairie Meadows in Altoona. Those of you in attendance at last year’s event know what an awesome evening it was honoring outstanding members of the insurance industry as well recognizing our scholarship recipients from Drake University and the University of Iowa.
We need your help to continue this tradition. Nominations are now being accepted. The updated online nomination form can be found at Nominations for 2022 will be accepted through June 30. Please feel free to forward this email.
The list of past inductees can be found here.
2022 ISO Homeowners Changes in Chart Form
Insurance Services Office (ISO) in mid-2021 released its first multi-state homeowners filing in over 11 years. This most recent filing took effect beginning March 1, 2022. Within this filing, ISO:
·   Introduced one new coverage form (the HO 00 14);
·   Created and introduced 12 new endorsements;
·   Revised 120 forms and endorsement; and
·   Withdrew 11 forms and endorsements.
Several changes in the various HO forms have resulted in updated special limits of coverage and a change in the exception to the watercraft exclusion. Because of these changes, many of the special and sub values we have committed to memory over the last two decades have changed.
The Virtual University created several charts to help insurance practitioners keep track of key factors, values and provisions in ISO's homeowners coverage forms; however, two different versions of these charts are now required based on the coverage form edition dates:
·   Charts for HO policy forms with edition dates prior to March 1, 2022; and
·   Charts for HO policy forms with edition dates effective March 1, 2022 and beyond.
(Note that these charts differ based on the edition date of the coverage form, not the policy's effective date. Some states may not yet have adopted these forms and some carriers have not yet adopted these changes.)​
The VU also has a webinar that reviews these changes. Click here to see available dates.
2022 Legislative Session
As of this notice, the Iowa legislators are still in session for 2022. The House and Senate remain at an impasse over several items namely education and taxes. After 100 days of session, the legislators stop receiving their daily per dieum for their living and travel expenses. That date ended on Tuesday, April 19th. At this point it is impossible to predict which bills will make it through to the Governor’s desk and which will fail. We will provide a full update once they gavel out for the year.
ACA Transitional Policies Extended Indefinitely
Iowa Insurance Commissioner Doug Ommen issued a bulletin providing guidance to Iowa consumers and insurers regarding the Centers for Medicare and Medicaid Services (“CMS”) decision to allow transitional policies to be extended. CMS announced on March 23, 2022, that health insurers will be allowed to continue transitional policies for policy years beginning after October 1, 2022, and will remain in effect until CMS announces that all such coverage must come into compliance with the specified requirements.

“I appreciate federal authorities listening to Iowa and providing flexibility to the Iowa Insurance Division to extend transitional policies indefinitely. Without this option, roughly 58,295 Iowans would be forced off their healthcare plans. These thousands of Iowans have renewed their transitional insurance plans that were originally purchased prior to 2014. Iowans should be assured that they have access to healthcare coverage that fits their needs and not be forced to purchase unaffordable coverage,” Ommen said. “Congress should amend the ACA to recognize this decision.”

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In Memory of Howard Omdahl
Howard Omdahl passed away on April 19, 2022 in Algona. Howard joined the family insurance business in Algona in 1972 and he served as District Director for the Big “I”. Howard was inducted into the Iowa Insurance Hall of Fame in 2019 for his many contributions to the insurance industry. Our condolences to Howard’s wife Sharon, his family, and friends.
In Memory of Ed Butler
Ed Butler passed away on April 4, 2022 in Oskaloosa. Ed co-owned the Butler-Brown Insurance Agency in Oskaloosa for many years. Ed served on the Board of Directors for the IIAI and was President of the Association in 2003-2004. Ed was also honored as Young Agent of the Year by the association in 1979. Our condolence’s to Ed’s wife Dorothy as well his entire family and friends.
Independent Insurance Agents of Iowa
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