in this issue >>> -Annual Convention -Welcome Angie Cooper -5 hrs FREE CE -4 Ways to Grow Your Business -In Memory of Stanley Reynolds and more. . .

Agent Newsletter July 28, 2022

Registration is open for the Annual Convention. The IIAI Annual Convention & Tradeshow will return to Prairie Meadows on August 30 & 31. These dates are a bit earlier than usual so be sure and put them on your calendars today. We anticipate the convention to be back to normal with a full tradeshow; great speakers; CE credits available; and a host of network opportunities. The Convention will be highlighted by our keynote speaker, Frank Somma. Golf will be hosted this year at the beautiful Legacy Golf Course in Norwalk. Whether you are a first time attendee or returning after a long few years of virtual events, we hope to see you in August.

Bill Pearson Named Chair of Crop Committee Congratulations to Bill Pearson of Huisenga-Pearson Agency in Sibley for being named Chairman of the Crop Insurance Subcommittee of the Independent Insurance Agents & Brokers of America (IIABA). This is a great honor and large responsibility to many farmers and insurance agents in our state. Bill has been attending the Legislative Conference in Washington, DC for many years representing the interests of Iowa agents.

Concerning Data Privacy Legislation Passed Out of House Committee H.R. 8152, the “American Data Privacy and Protection Act" (ADPPA) was passed out of the U.S. House of Representatives Committee on Energy and Commerce by a vote of 53-2. The legislation had previously been introduced by the Chairman of the House Committee on Energy and Commerce, Rep. Frank Pallone (D-New Jersey) and the committee's top Republican, Rep. Cathy McMorris Rodgers (R-Washington). Before the bill was introduced, Reps. Pallone and McMorris Rodgers, as well as Sen. Roger Wicker (R-Mississippi), the top Republican on the U.S. Senate Committee on Commerce, Science, and Transportation, announced that they had reached a deal on data privacy legislation. Notably, Sen. Maria Cantwell (D-Washington), the chairwoman of the Committee on Commerce, Science, and Transportation, opposes the ADPPA and remains committed to her own legislation, S. 3195, the “Consumer Online Privacy Rights Act." If enacted, the ADPPA would create a national standard on what kinds of data companies can gather from individuals and how they can use it. While the legislation includes a limited small business exemption from some provisions, it would still require small businesses to publicly display a lengthy privacy policy including a description of the companies' data security practices, the length of time data is retained, and the processing purposes of the data. Additionally, businesses must notify all customers if there is a change in the privacy policy or practices at the company. Soon after a draft of the legislation was released, the Big “I" worked with the American Property Casualty Insurance Association (APCIA), the National Association of Mutual Insurance Companies (NAMIC) and the Council of Insurance Agents and Brokers (CIAB) to identify two of the most significant concerns with the legislation. Those concerns were then outlined in a letter addressed to leaders of the House Energy and Commerce Committee. The first concern was related to the Gramm-Leach-Bliley Act (GLBA). The financial services industry, including the insurance industry, was the first sector of the economy to come under comprehensive nationwide privacy regulation when GLBA was enacted over 20 years ago. GLBA set forth a rigorous regulatory framework for protecting the privacy of nonpublic personal information of financial services consumers. The framework is enforced against insurers, agents and brokers by state insurance regulators. While the ADPPA includes a GLBA provision, APCIA, NAMIC, CIAB and the Big “I" have concerns and are advocating for language that would clearly exempt insurers, agents and brokers from the scope of the ADPPA. The second concern addressed in the letter is the legislation's inclusion of a broad private right of action, which would allow an individual or a group of individuals as part of a class action, to pursue litigation against a company that illegally shares their data or uses it in ways the law prohibits. A broad private right of action would likely mean an increase in claims costs for insurers, which in turn could lead to higher insurance rates for consumers. This is not in the interests of consumers. The joint trade associations made clear that it would be much better for the government to enforce privacy laws which would mean consistent interpretation and implementation leading to a more stable privacy landscape for businesses and consumers. As Congress continues to discuss ways to better protect consumer privacy, the Big “I" will continue to provide members with updates in the weekly News & Views e-newsletter.

IIAI Welcomes Angie Cooper

Angie Cooper has been hired to replace longtime employee Cindy Grim at the Big “I”. Angie comes to us with a wealth of insurance experience from both the company and agency sides of the business. If you are in the neighborhood, stop by and say hello to Angie or for those of you attending our Convention August 30th & 31st please introduce yourselves to her there.

REMINDER: Big I Markets Commission Changes

Over the past several years we've encouraged all Big “I" Markets agents to enroll to receive commissions via electronic funds transfer (EFT) as part of our disaster recovery plan. Great progress has been made and we're grateful so many agents have supported the initiative.  EFT enrollment is now required for all Big 'I' Markets agents to ensure we can fulfill our obligation to remit earned commission to you. The change is effective Sept. 1. To add or update EFT information, log in here. If you need assistance, view our step-by-step tutorial for detailed instructions. Another new commission distribution procedure will also go into effect Sept. 1. Commission payment will not be made until the net accumulated amount is $50 or greater. This will improve the efficiency and timely distribution of payments during the monthly commission cycle while decreasing processing expenses.  Please contact Big “I" Markets staff with any questions and, as always, thank you for doing business with Big “I" Markets.

Big I Government Affairs Has Your Back!

The Big “I" government affairs team has your back as it continually advocates for independent agents on Capitol Hill…both on the front lines and behind the scenes. The team's significant recent accomplishments have helped agents protect and promote their businesses, and we've included these wins in a new video featuring Charles Symington, Big “I” senior vice president, external, industry and government affairs, and Wyatt Stewart, Big “I” assistant vice president of federal government affairs. The piece is available to state and local associations for use at meetings, in newsletters and on websites, and it provides a comprehensive recap for all member agents and brokers.

Commissioner Ommen Issues Consent Order Against BlockFi Lending LLC

Iowa Insurance Commissioner Doug Ommen recently issued a consent order against BlockFi Lending LLC (BlockFi) after BlockFi offered and sold securities in Iowa that were not registered or permitted for sale in Iowa as well as offering and selling securities in Iowa without being registered as a broker-dealer or agent. BlockFi was ordered to pay an administrative fine in the amount of $943,396.22 and cease and desist from making any untrue statement of material facts regarding securities. “While innovations, like cryptocurrencies, may provide for growth and evolution in the financial system, it is important that regulators ensure this occurs within an appropriate framework that protects investors while still facilitating responsible capital formation,” Iowa Insurance Commissioner Doug Ommen said. “Iowans can always double-check before investing to make sure an investment is properly registered with the Iowa Insurance Division by calling 877-955-1212.” The consent order is part of the conclusion of a broader multi-state investigation, where the U.S. Securities and Exchange Commissioner (SEC) and state securities regulators from 53 jurisdictions came together as members of the North American Securities Administrators Association (NASAA) to investigate. BlockFi will pay settlements up to $50 million in total to the 53 jurisdictions following the investigation as well as another $50 million to the SEC. The consent order found that in addition to offering and selling unregistered securities, BlockFi made misrepresentations and omissions about the level of risk in its loan portfolio which did not allow investors to have complete and accurate information to evaluate the risk of the investment. Specifically, BlockFi stated in multiple website posts that its institutional loans were "typically" over-collateralized when in fact most loans were not over-collateralized. Twenty-four percent of the institutional digital asset loans BlockFi made in 2019, 16% of the loans made in 2020, and 17% of the loans made in the first half of 2021 were over-collateralized. BlockFi's statements that their loans were "typically" over-collateralized suggested to investors that they had secured more protection from default than BlockFi had actually secured. “Whatever investors’ knowledge or interest in cryptocurrency, investors need accurate information to base their decisions on,” Ommen said. “Iowans are encountering new innovations in the investment area with the advent and greater adoption of cryptocurrencies, however, speculative investments such as these should be handled just as such – as speculative. Iowans should make sure they are only investing what they may be willing to lose.” As of December 31, 2019, BlockFi and its affiliates held approximately $267,626 in assets from Iowa residents. As of December 31, 2020, BlockFi and its affiliates held approximately $5,551,884 in assets from Iowa residents. As of December 31, 2021, BlockFi and its affiliates held approximately $14,665,519 in assets from Iowa residents.

Mark your calendars - details coming soon!

4 Ways to Grow Your Business, Not Potential E&O Claims Growing your business can carry risks. Here are four things to keep in mind to avoid potential errors & omissions claims as you look to improve. Every insurance agent or agency feels some degree of pressure to grow their business. In fact, that pressure is felt in the broader world. We hear comments all the time like, “In this league, if you're not improving, you're getting worse," from the pundit on ESPN. Or, “What's your five-year plan to grow your business?" from the speaker at the seminar. And, of course, in the movie “The Graduate," the character giving Dustin Hoffman advice: “Plastics!" Unfortunately, growing your business can carry risks. While I am not able to offer tips to make you rich—no “plastics!" here—here are four things to keep in mind to avoid potential errors & omissions claims as you look to improve your business: 1) Don't try to do too much. Let's say a customer informs you that he has purchased a vacation home out of state in Texas and needs to insure it. Rather than find an agent in Texas, you might decide to take care of it yourself to show the customer your cando spirit. However, you might not know that homes on the coast are considered Tier 1 properties, and standard homeowners policies don't include losses from windstorms. If there is a significant wind loss and no coverage, an E&O claim is likely. 2) New practice areas require new expertise. You may decide to grow your business by branching out into new aspects of insurance. An agency that already sells liability insurance to construction companies might look at developing a construction bond practice. The agency should keep in mind that such bonds can have very technical requirements. Rather than try to reinvent the wheel, it is best to develop that new part of the business by bringing in someone who already has experience with bonds and can avoid pitfalls. 3) Avoid overpromising in your marketing. As part of growing your business, it is natural to put your best foot forward when marketing your agency. There is nothing wrong with a little boasting. However, avoid statements such as “we are your risk managers" or “we will assess all your risks and make sure you have proper solutions." If there is litigation over an uncovered loss, an attorney may take those statements out of context to argue that you agreed to take on additional duties and that their client relied on you. 4) Hire adequate staff. When the focus is on bringing in new business, do not let plans for servicing that new business become an afterthought. If the workload gets too heavy for you or your staff, tasks may get delayed or missed. That ultimately results in E&O claims. What's more, even if you and your staff do not make any mistakes, being too busy can mean that you do not document what you have done. Maybe you called a client and confirmed they did not want to increase limits, but you did not send a confirmation email and did not leave a note in the file. If there is a loss that exceeds the client's policy limits, the lack of documentation could become an issue. By all means, consider steps to grow your business, but remember to include steps to avoid potential E&O claims.

In Memory of Stanley Reynolds Stanley (Stan) Reynolds passed away in Des Moines on July 6th. Stan started Reynolds & Reynolds Insurance Agency in Des Moines in 1976 and was a long time member of the Big “I”. Our condolences to Stan’s family, friends, and co-workers.

Independent Insurance Agents of Iowa 4000 Westown Parkway, Suite 200 West Des Moines, IA 50266 515.223.6060 | 800.272.9312 www.iiaiowa.org

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