Spring 2019 - ufaa.com · tion report show so many Bristol West and 21st Century executives, when...

Spring 2019

ELECTRONIC SERVICE REQUESTED

UNITED FARMERS AGENTS ASSOCIATION9785 MACKENZIE ROADSUITE 104ST. LOUIS, MO 63123

NON-PROFIT ORG.U.S. POSTAGE

PAIDLITTLE ROCK, AR

PERMIT #2001

ARKANSAS - ALABAMA - GEORGIA - TENNESSEE (30) Bill Miller, Little Rock, AR (P) 501-258-0278 [email protected]

ARIZONA - NEW MEXICO (43) Bill Wise, Gilbert (P) 480-620-6244 [email protected]

CALIFORNIA (02) Jim Melin, San Jose (P) 408-272-1700 [email protected] (08) Damien Simeone, San Diego (P) 858-272-0234 [email protected] (10) Julian Buck, Glendora (P) 626-335-6800 [email protected]

COLORADO (27) Steve Rogge, Littleton (P) 303-797-1207 [email protected] (46) Steve Dugger, Loveland (P) 970-667-8080 [email protected]

IDAHO (28) Duffy Benton, Boise (P) 208-345-5900 [email protected]

ILLINOIS - INDIANA (21) Anil Sharma, Chicago, IL (P) 630-854-0997 [email protected]

KANSAS (13) Chuck Simpson, Olathe (P) 913-205-6277 [email protected]

MICHIGAN (45) Mike Lillo, Kentwood (P) 616-281-2888 [email protected]

MINNESOTA - NORTH DAKOTA - SOUTH DAKOTA (17) Greg Scollard, Rogers, MN (P) 612-309-6314 [email protected]

MISSOURI (41) Mel Hollandsworth, Granite City, IL (P) 618-407-0530 [email protected]

MONTANA - WYOMING (51) Klaas Tuininga, Bozeman, MT (P) 406-587-0765 [email protected]

NEBRASKA - IOWA (19) Tom Dahulick, Omaha, NE (P) 4 02-572-9344 [email protected]

OHIO - CONNECTICUT - MARYLANDNEW JERSEY - NEW YORKPENNSYLVANIA - VIRGINIA (44) Dennis Long, Galion, OH (P) 419-468-1352 [email protected]

OKLAHOMA (15) Robert Stewart, Muskogee (P) 918-683-1801 [email protected]

OREGON (14) Lowell Yost, Portland (P) 503-331-0450 [email protected]

TEXAS (33) Ray Ruiz, El Paso (P) 915-240-1166 [email protected] (34) Kent Underwood, Duncanville (P) 972-709-0907 [email protected] (35) Robert Fox, Houston, (P) 281-920-2315 [email protected] (36) Jeff Felger, Austin (P) 512-250-2334 [email protected]

UTAH-NEVADA (39) Brian Lee, Heber, UT (P) 435-654-1911 [email protected]

WASHINGTON (22) Jack McLaughlin, Olympia (P) 360-352-6073 [email protected]

WISCONSIN (20) John MacDonald, Williams Bay (P) 262-245-0555 [email protected]

PresidentTom Schrader(P) 913-515-1871Email - [email protected]

Vice PresidentMike Ward(P) 918-258-6612Email - [email protected]

SecretaryPaige Underwood(P) 918-576-4066Email - [email protected]

TreasurerJohn Hall(P) 254-760-1401Email - [email protected]

Dir of MembershipJohn Wiley(P) 918-637-2427Email - [email protected]

Dir Media RelationsChuck Simpson(P) 913-205-6277Email - [email protected]

Dir Legal ActivitiesKim Rich(P) 877-393-8532Email - [email protected]———————————

UFAA TechAlex Conger(P) 866-441-8018Email - [email protected]

For information, contact any Board Member, Chapter President or the UFAA National OfficeOR VISIT OUR WEBSITE UFAA.COM

2 - The Voice UFAA - ”Agents Helping Agents”® Spring 2019

National Board Chapter Presidents

United Farmers Agents Association National Office9785 Mackenzie Road Ste 104

St. Louis, MO 63123

Phone: 314-631-7898 Fax: 314-631-7963Email: [email protected]

Office Hours: 8 am to 5 pm Central Time

Mission Statement - The United Farmers Agents Association is a pro-fessional Association committed to helping our members through educa-tion, communications, support and information, and to establish a true partnership with Farmers Group, Inc.

The general objectives of the Association are:

A. To create meaningful communication between the Management Company Attorney-In-Fact FGI and Agents;B. To improve the professional status of Farmers and its Agents in the community;C. To improve the relationship between the Management Company Attorney-In-Fact FGI and clients;D. To improve Agent to Agent relationships;E. To maintain and encourage the use of the UFAA code of ethics;F. To have compensation schedules included in the Agents’ contract;G. For Agents to receive ownership of all policies and expirations;H. For terminations to be for just, stated causes only;I. To create a two way negotiated contract between Agents and the Management Company Attorney-In-Fact FGI;J. For all Agents and their authority to be treated equally and justly;K. To help Farmers become the premier insurance company in the country;L. To foster cooperation, for mutual benefit, with other Agent Associa- tions;M. To stand united to accomplish these objectives;

If you would prefer to only receive a digital copy of UFAA’s quarterly publication The Voice please fill out the information below and send it to the National Office, (fax) 314-631-7963 or send an email to [email protected] with your Name, City , State and Non-Farmers email address.

[ ] I wish to only receive the email/digital version of UFAA’s Publication The Voice. Please discontinue sending me a printed copy of TheVoice.

Spring 2019 UFAA - ”Agents Helping Agents”® The Voice - 3

Coming Events and Notices

THE ICEBERGS IN LIFE Pg 4

FARMERS IN 2018 Pg 6

IT’S NOT TOO LATE!!! Pg 8

2018 EXECUTIVE COMPENSATION Pg 15

WAKE UP CALL Pg 24

REPOSSESSED Pg 26

Inside this issue:

June 10, 2019 Convention Early Registration Deadline

August 19, 2019 Convention Registration Deadline

October 1-3, 2019 2019 UFAA National Convention

DO WE HAVE YOUR NON-FARMERS EMAIL ADDRESS

You may or may not know it, but FGI has the ability to stop certain emails from coming into your FGI email account. That is why we need

your non-Farmers email address to be sure you receive the UFAA Direct Emails. Notify no@ufaa.

com if we don’t have you non-Farmers email.

The Voice is published four times per year byThe United Farmers Agents Association, aprofessional Association committed tohelping our members through education,communication, support and information andin establishing a true partnership withFarmers Group, Inc. The content of TheVoice is the responsibility of the electedNational Board Members who comprise TheVoice committee.

Products and services advertised are notendorsed by United Farmers AgentsAssociation, Inc. or its affiliates. Complaintsor inquiries should be forwarded directly tothe advertisers. All purchases are at thecomplete discretion of the customer.

The opinions expressed by the authorspublished in The Voice are not necessarilythose of UFAA, its officers, directors ormembers, and should not be construed aslegal advice.

Name City, State Non-Farmers Email Address


THE ICEBERGS IN LIFEA young and enthusiastic individual is recruited and pre-sented with an opportunity that just seems to good to be true. That evening the young man tells his wife that surely everything I was told by this insurance sales representa-tive in my initial meeting can’t be true. I can’t wait for him to meet with both of us tomorrow and go over the details again so that we can decide if this is our future. The next evening the insurance sales representative makes his pitch to the young couple and they are sold. The picture that is being painted and the promises that are made seem like the opportunity of a lifetime. The young man signs the paperwork and commits to becoming a Farmers Insurance Agent.

About a year goes by and even though the young man is somewhat stressed by the business overhead costs and the large amount of money he had to borrow to buy a small agency, he seems to be relativity content. All of a sudden, he hits an iceberg lurking beneath the surface of the water and his agency starts showing signs of im-pending disaster. The first sign of real trouble is that the young salesman realizes that the insurance premiums are no longer competitive, and his retention is starting to take a nosedive. On top of all that, it seems no one told the young man about the pending commission cuts and reduction of Contract Value/Contract Value Bonus. Suddenly, the young man finds he is upside down be-cause the new business and renewal commissions are no longer paying the overhead, the loans or providing a livable income. Then he receives a phone call from the same individual who recruited him that they need to have a meeting. It seems he is no longer meeting “Acceptable

Business Results”, because of the lack of production and retention. The young man responds in his meeting that the rates are not competitive, and he has no control over the rates. But his words fall on deaf ears. The young man decides to look at his Contract Value to entertain leaving the business. That’s when he discovers that because he only has 1,000 PIF he can only receive 50% of his Contract Value. The young man realizes he owes more than he borrowed, because he paid 1 ½ times Contract Value for the small agency not realizing with only 1,000 PIF, that what he bought was actually only worth 50% of the base Contract Value.

The young man goes home and tells his wife, “Do you remember that I originally said, it sounds too good to be true? Well, guess what, it was not what they promised!”This a very common story UFAA hears every day.

Mr. Dailey, you recently stated that your own data shows that Farmers has a lot of work to do to improve the agent experience. It isn’t a talking point and it really isn’t that complicated. Provide a competitive insurance product at a competitive price and pay a competitive commission. Why is Farmers Insurance ranked #9 by the NAIC with a 3.01% market share? Why did Zurich/FGI decide it was necessary to cut the Agent’s Contract Value/Contract Value Bonus when Zurich’s own annual financial report shows that the Exchanges, FGI/Zurich increased their annual profit? Why does the 2018 Executive Compensa-tion report show so many Bristol West and 21st Century executives, when 21st Century is only in California and Hawaii?

Iceberg Theory

The Iceberg Theory is a writing style characterized by a very minimized presentation of details within a story, which forces readers to read carefully in order to understand a much bigger picture than that presented. American au-thor Ernest Hemingway is most associated with this writing style.

The theory is so named because, just as only a small part of an iceberg is visible above water, Hemingway’s sto-ries presented only a small part of what was actually happening. The rest is up to the reader to derive by piecing together what is not presented within the text and properly placing it in context.

In the last few years the Management Company has adopted the Iceberg Theory...telling the Agency Force just enough to cover themselves but not enough for an agent to make a plan more than a few months out. How can I plan for the year when I don’t know what is going to come down the pike next week?

Tom Schrader, President


NEW GUYSSo, you are a new Farmers Agent? You went career in 2013 or since. Let’s take a closer look at what you’ve got here.

• When you end your career with less than 751 PIF you have vested 25% toward your Contract Value.



• Only if you end your career with more than 2000 PIF will you have 100% toward your Contract Value.

Yea, yea, yea, the DM told you that you could sell the agency. But really, if it isn’t worth much to you, do you really think it will be worth much to someone else? Independent Agents often get 2-3+times one year of commission when they sell and you are likely to walk away with less than 1 times?

What you should know that nobody told you is that any seasoned Farmers Agent who signed the same appointment agreement you are on was offered an addendum. The adden-dum adds a time element into the equation. A time element

included in the prior agreement which is removed from your agreement. Even if they end their career with 500 PIF or less, after 15 years, that agent gets 100% of their Contract Value. Somehow it doesn’t seem fair to you?

But maybe you were only interested in the income the agency gives while you are a Farmers Agent? Are we suppose to think that millennials are not interested in owning anything? Millennials rent high priced apartments rather than own property, right? Farmers is really offering the opportunity to earn commissions while you are an agent and after that, who knows what you’ll have? It’s kind of like renting an agency? Sure they call you an agency owner but, what is it that you own? Do you think you’ll have 2001 PIF when you’re 65? For the record, the average Farmers Agent in 2012 had rough-ly 800 PIF. I guess that’s 50% Contract Value. Is that good enough?

If you’re thinking of leaving maybe this would tip the scales back for Farmers? At least offer the DM a chance to do the right thing and offer you the addendum before you leave.

Kim Rich, Director of Legal Activities

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FARMERS IN 2018According to the newly released Zurich financials for 2018 Farmers is reporting a gross written premium growth for continuing operations of 4%. This growth was supported by the continued successful expansion of the Farmers Exchanges into the east-ern United States. The largest growth is in Business Insurance partially driven by an agreement with Uber to provide commer-cial rideshare insurance in two US states. Higher premium volumes supported higher management fees at Farmers Manage-ment Services and an improved gross management result.

Growth for the Exchanges is in all lines of business and driven by a combination of rate increases, improved retention as a re-sult of Farmers’ customer-focused strategy, further expansion into the eastern United States and the agreement with Uber to provide commercial rideshare insurance in Georgia and Pennsylvania. The expansion into the eastern U.S. continues to deliver strong growth, with gross written premiums exceeding USD 1bn in 2018. The footprint has been further widened, with Farm-ers brand open for business in Florida since July 2018. The Uber agreement generated USD 150m of gross written premiums in 2018.

In October 2018, Farmers launched Toggle, a new and innovative offering aimed at digitally active millennials in Illinois and Wisconsin, which includes elements of game design to deliver customizable coverages and offerings. Through the new renter’s insurance offering, subscribers can choose options that cover damage to their residence caused by their pet, or covers the things members use to make extra money on the side, like the camera for a food blogger, or the laptop and sound equipment for a DJ. Further Expansion of Toggle is planned in 2019.

Key financial figuresin USD millions, for the years ended December 31 2018 2017Gross written premiums and fees 1 52,689 52,005Consists of USD 49,485 million gross written premiums and policy fees, as well as USD 3,204 million Farmers management fees and other related revenues in 2018

Financial highlightsin USD millions, for the years ended December 31, unless otherwise stated 2018 2017 ChangeFarmers business operating profit 1,643 1,691 (3%)Farmers Management Services management fees and other related revenues 3,204 2,892 11%Farmers Management Services managed gross earned premium margin 7.0% 7.0% –Farmers Re gross written premiums and policy fees 194 995 (81%)Farmers Life new business annual premium equivalent (APE) 2 84 91 (7%)

Farmers Exchangesin USD millions, for the years ended December 31 2018 2017 ChangeGross written premiums 20,325 19,908 2%Gross earned premiums 20,171 19,841 2%

Top-line growth in continuing operations was partially offset by the run-off of discontinued operations, consisting primarily of two books of business: 21stCentury outside of California and Hawaii and approximately USD 200m of gross written premims of business insurance distributed through independent agents, to which renewal rights were sold in February 2018. It is expected that the impact on growth from the run-off of this portfolio will reduce significantly in 2019.

Zurich reported USD 1.6 bn from Management services related to property and casualty insurance.

The report stated “Farmers Exchanges remain focused on improving the quality and performance of their agents. The shift towards a capitalized agency model is well on track. Farmers’ experience shows that capitalized agents are able to provide a better customer experience, reflected in higher net promoter score, and show higher retention and productivity levels.

UFAA National Board



FGI as the appointed attorney-in-fact of the Farmers Exchanges, which are managed but not owned by FGI, a wholly owned subsidiary of the Group, is permitted by policyholders of the Farmers Exchanges to receive a management fee of up to 20 percent (up to 25 percent in the case of the Fire Insurance Exchange) of the gross premiums earned by the Farmers Exchange. Other related revenues include reimbursement of certain ancillary service costs incurred by FGI on behalf of primarily the Farmers Exchanges that are not covered under the attorney-in-fact contracts. The amounts incurred for these services are reimbursed to FGI at cost in accordance with allocations that are subject to approval by the Farmers Exchanges Board of Gov-ernors.

FGI has historically charged a lower management fee than the amount allowed by policyholders. The range of fees has varied by line of business over time and from year to year. The gross earned premiums of the Farmers Exchanges were USD 20.2 billion and USD 19.8 billion for the years ended December 31, 2018 and 2017, respectively.

Farmers Group, Inc. and its subsidiaries (FGI) provide certain non-claims administrative, management, and ancillary services to the Farmers Exchanges, which are managed by Farmers Group Inc., a wholly owned subsidiary of the Group. Non-claims and management services primarily include risk selection, preparation and mailing of policy documents and invoices, premium col-lection, management of the investment portfolios and certain other administrative and managerial functions. Fees for these services are primarily determined as a percentage of gross premiums earned by the Farmers Exchanges. Ancillary services primarily include information technology services that are not covered under the attorney-in-fact contracts. The finances and operations of the Farmers Exchanges are governed by independent Boards of Governors

To view the full Annual report visit the Investor Relations page of the Zurich Website, https://www.zurich.com/en/investor-re-lations/results-and-reports

Larger and better quality agencies have also the highest potential to serve customers across multiple lines of business.”

Farmers by the number

Spring 2019 The Voice - 7 UFAA - ”Agents Helping Agents”®

Larger and better quality agencies have also the highest potential to serve customers across multiple lines of business.” Farmers by the number

FGI as the appointed attorney-in-fact of the Farmers Exchanges, which are managed but not owned by FGI, a wholly owned subsidiary of the Group, is permitted by policyholders of the Farmers Exchanges to receive a management fee of up to 20 percent (up to 25 percent in the case of the Fire Insurance Exchange) of the gross premiums earned by the Farmers Ex-changes. Other related revenues include reimbursement of certain ancillary service costs incurred by FGI on behalf of pri-marily the Farmers Exchanges that are not covered under the attorney-in-fact contracts. The amounts incurred for these services are reimbursed to FGI at cost in accordance with allocations that are subject to approval by the Farmers Exchanges Board of Governors. FGI has historically charged a lower management fee than the amount allowed by policyholders. The range of fees has var-ied by line of business over time and from year to year. The gross earned premiums of the Farmers Exchanges were USD 20.2 billion and USD 19.8 billion for the years ended December 31, 2018 and 2017, respectively. Farmers Group, Inc. and its subsidiaries (FGI) provide certain non-claims administrative, management, and ancillary ser-vices to the Farmers Exchanges, which are managed by Farmers Group Inc., a wholly owned subsidiary of the Group. Non-claims and management services primarily include risk selection, preparation and mailing of policy documents and invoic-es, premium collection, management of the investment portfolios and certain other administrative and managerial func-tions. Fees for these services are primarily determined as a percentage of gross premiums earned by the Farmers Exchang-es. Ancillary services primarily include information technology services that are not covered under the attorney-in-fact con-tracts. The finances and operations of the Farmers Exchanges are governed by independent Boards of Governors To view the full Annual report visit the Investor relations page of the Zurich Website, https://www.zurich.com/en/investor-relations/results-and-reports

in USD millions, for the 12 months ended December 31, unless other-wise stated

2018 2017 Change4 in USD

Farmers Exchanges2 Gross written premiums 20,325 19,908 2% Combined ratio 99.9% 101.6% 1.7pts Surplus ratio 39.4% 38.7% 0.7pts Farmers Farmers business operating profit (BOP) 1,643 1,691 (3%) Farmers Management Services (FMS) management fees and related revenues6

3,204 2,892 11%

Farmers Re combined ratio 99.1% 100.1% 1.0pts Farmers Life annual premium equivalent (APE) 84 91 (7%) Farmers Life new business value (NBV) 113 100 13%

Management Fee Trends—5 year 2018 2017 2016 2015 2014

Management fees and other related revenues

$3,204,000,000 $2,892,000,000 $2,867,000,000 $2,786,000,000 $2,791,000,000

Gross written premiums $20,325,000,000 $19,908,000,000 $19,714,000,000 $19,077,000,000

$18,635,000,000

Management Fee % 15.76% 14.53% 14.54% 14.60% 14.98%


Larger and better quality agencies have also the highest potential to serve customers across multiple lines of business.” Farmers by the number

FGI as the appointed attorney-in-fact of the Farmers Exchanges, which are managed but not owned by FGI, a wholly owned subsidiary of the Group, is permitted by policyholders of the Farmers Exchanges to receive a management fee of up to 20 percent (up to 25 percent in the case of the Fire Insurance Exchange) of the gross premiums earned by the Farmers Ex-changes. Other related revenues include reimbursement of certain ancillary service costs incurred by FGI on behalf of pri-marily the Farmers Exchanges that are not covered under the attorney-in-fact contracts. The amounts incurred for these services are reimbursed to FGI at cost in accordance with allocations that are subject to approval by the Farmers Exchanges Board of Governors. FGI has historically charged a lower management fee than the amount allowed by policyholders. The range of fees has var-ied by line of business over time and from year to year. The gross earned premiums of the Farmers Exchanges were USD 20.2 billion and USD 19.8 billion for the years ended December 31, 2018 and 2017, respectively. Farmers Group, Inc. and its subsidiaries (FGI) provide certain non-claims administrative, management, and ancillary ser-vices to the Farmers Exchanges, which are managed by Farmers Group Inc., a wholly owned subsidiary of the Group. Non-claims and management services primarily include risk selection, preparation and mailing of policy documents and invoic-es, premium collection, management of the investment portfolios and certain other administrative and managerial func-tions. Fees for these services are primarily determined as a percentage of gross premiums earned by the Farmers Exchang-es. Ancillary services primarily include information technology services that are not covered under the attorney-in-fact con-tracts. The finances and operations of the Farmers Exchanges are governed by independent Boards of Governors To view the full Annual report visit the Investor relations page of the Zurich Website, https://www.zurich.com/en/investor-relations/results-and-reports

in USD millions, for the 12 months ended December 31, unless other-wise stated

2018 2017 Change4 in USD

Farmers Exchanges2 Gross written premiums 20,325 19,908 2% Combined ratio 99.9% 101.6% 1.7pts Surplus ratio 39.4% 38.7% 0.7pts Farmers Farmers business operating profit (BOP) 1,643 1,691 (3%) Farmers Management Services (FMS) management fees and related revenues6

3,204 2,892 11%

Farmers Re combined ratio 99.1% 100.1% 1.0pts Farmers Life annual premium equivalent (APE) 84 91 (7%) Farmers Life new business value (NBV) 113 100 13%

Management Fee Trends—5 year 2018 2017 2016 2015 2014

Management fees and other related revenues

$3,204,000,000 $2,892,000,000 $2,867,000,000 $2,786,000,000 $2,791,000,000

Gross written premiums $20,325,000,000 $19,908,000,000 $19,714,000,000 $19,077,000,000

$18,635,000,000

Management Fee % 15.76% 14.53% 14.54% 14.60% 14.98%


IT’S NOT TOO LATE!!!That’s right! It’s not too late to register for the upcoming 2019 UFAA National Convention to be held at the Golden Nugget Hotel & Casino in Las Vegas, October 1st-3rd. You will find the registration form on page 9 in this issue of The Voice or you can go online to our website at www.ufaa.com. The National Convention starts Tuesday, October 1st and concludes on Thursday, October 3rd. The National Board arrives on Saturday, September 28th and will meet on Sunday, September 29th. The Chap-ter President’s arrive on Sunday, September 29th and will meet on Monday, September 30th. Delegates and attendees arrive on Monday, September 30th and will enjoy hospitality/vendor night from 5-8pm. The National Convention meeting sessions start on Tuesday, October 1st at 8 am with registration and the meeting following. The Conven-tion meeting sessions continue Wednesday, October 2nd at 8 am. A cocktail reception is set for 6 pm with the banquet at 7 pm followed by the evening’s entertainment starting around 8 pm. The Convention meeting session wraps up Thursday, October 3rd concluding at noon. What a stellar lineup of speakers scheduled for this year’s Convention. Here are just a few of the speakers scheduled to speak at the upcoming convention. Bill Gough-Bill was a highly successful Allstate agent for over 30 years. So successful, he was elected to the Allstate Hall of Fame. After he left Allstate he created a company called BGI Systems which deals with sales, marketing, agency operations and dealing with employees. BGI

Systems has been featured on numerous TV channels such as NBC, ABC, CBS, CNN, and Yahoo News to name a few. Thomas Rich- Thomas works for Bradford & Company which deals with tax saving strategies. He will show us simple legal tax reduction strategies that most self-employed business owners miss out on. He will show us how Insurance & Financial Professionals can cut their 2019 taxes by $2,500 or more. Has this got your attention yet? Glenn Cannon-Glenn is a successful Farmers Agent who regularly qualifies for the achievement clubs year after year. He will share with us what makes his agency so successful each and every year. Shaine Reece-Shaine is one of the Top Commercial Producers within Famers and is going to share with us how he has grown his agency writing Commercial Insurance. Begin making your plans now to attend. If you haven’t attended one of our Conventions in a while, please look at attending this year. If you have never attended, you don’t know what you have been missing out on. Go ahead and fill out the registration form today and get it sent in. Start looking for your airfare and then all you have to do is pack your suitcase. Start the process now and we will see you at the upcoming 2019 UFAA National Convention in Las Vegas!

Mike Ward, Vice President

Schedule of Events

Sunday, September 29, 20199:00 am – 5:00 pm Executive Board Meeting Monday, September 30, 20197:00 am – 8:30 am Breakfast Buffet for CP Meeting Attendees8:30 am – 5:00 pm CP Meeting5:00 pm – 8:00 pm Registration/Hospitality/Vendor Exhibits (Registration closes at 7:00 pm) Tuesday, October 1, 20198:00 am – 8:30 am Sign in for UFAA Business Meeting Continental Breakfast for Registered Meeting Attendees8:30 am – 5:00 pm UFAA Business Meeting & Presentations

Wednesday, October 2, 20198:00 am – 8:30 am Sign in for UFAA Business Meeting Continental Breakfast for Registered Meeting Attendees 8:30 am – 4:30 pm UFAA Business Meeting & Presentations6:00 pm – 7:00 pm Cocktail Reception7:00 pm – 8:30 pm Banquet Dinner8:30 pm – 10:00 pm Entertainment-Marcus Wilson, Comedian/Juggler Thursday, October 3, 20198:00 am – 8:30 am Sign in for UFAA Business Meeting Continental Breakfast for Registered Meeting Attendees8:30 am – 12:00 pm UFAA Business Meeting & Presentations12:00 pm – 2:00 pm Executive Board Meeting/TBA Convention Attendees Depart

Saturday, Sept 28 Executive Board Arrives

Sunday Sept 29 Chapter Presidents Arrive

Monday, Sept 30 Convention Attendees Arrive

Spring 2019 UFAA - ”Agents Helping Agents”® The Voice - 9 Spring 2019 UFAA - ”Agents Helping Agents”® The Voice - 9 Spring 2019 The Voice - 9 UFAA - ”Agents Helping Agents”®

United Farmers Agents Association, Inc. 2019 NATIONAL CONVENTION REGISTRATION FORM

Convention October 1—3, 2019 EARLY REGISTRATION ENDS JUNE 10, 2019 REGISTRATION CLOSES AUGUST 19, 2019

Room Reservations must be made by each individual on or before August 19, 2019. Call the Golden Nugget at 1-800-331-5731. Use Code GSUFARM in order for you to get UFAA’s room rate. Carson Tower room rates are Sun-Thurs at $69 per night plus a $20 “Resort Fee” and tax, Fri-Sat at $115 per night plus a $20 “Resort Fee” and tax. Chapters will be reim-bursed only for Delegates at the Carson Tower room rate at $25.14 per night and only for those staying at the Golden Nugget through UFAA’s contracted program during the convention dates. UFAA will not honor any other accommoda-tions or arrangements. The Convention Registration fee schedule is listed above. The last day to register with the National Office is August 19, 2019. THE COMPLETE REGISTRATION FORM AND PAYMENT MUST BE RECEIVED IN THE NATIONAL OFFICE BY August 19, 2019. Please, there can be no exceptions granted after August 19, 2019, as we cannot accommodate any last minute requests. Cancellation Policy: Only notices received at the National Office by Friday, September 27, 2019, will be eligible for a registration refund. No exceptions will be granted.

Delegate/Alternate/Member x 1 $

CP/CP Representative/Additional Attendee x $ This meeting is an additional meeting to the Convention

Spouse/Guest/Child x $

Total $

Credit Card # CVV Code: Expiration:

Billing Address for Credit Card:

Signature: Printed Name:

Make Checks payable to UFAA Mail to : UFAA National Office 9785 Mackenzie #10 St. Louis, MO 63123

Credit Card payments may be mailed OR faxed 314-631-7963 OR emailed [email protected]

Guest Name (actual name used on badge)

Hospitality $110 Banquet $110 Both Events $220 Circle One

Guest Name (actual name used on badge) Hospitality $110 Banquet $110 Both Events $220

Circle One

Guest Name (actual name used on badge)

Hospitality $110 Banquet $110 Both Events $220 Circle One

Guest Name (actual name used on badge) Hospitality $110 Banquet $110 Both Events $220

Circle One

Spouse/Guest/Child Social Events Registration

Delegate / Alternate / Member (Circle one)

Attendee Name (actual name used on badge)

Chapter Number: Early Registration Fee by June 10, 2019 - $250

After June 10 but no later than August 19, 2019 - $300 Includes Social Events

Meetings open to all Members

Chapter President / CP Representative / Additional Attendee (Circle one)

Attendee Name (actual name used on badge)

Chapter Number: Early Registration Fee by June 10, 2019 - $100

After June 10 but no later than August 19, 2019 - $125 Meetings open to all Members

This meeting is an additional meeting to the Convention

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MIXED BAGCourt of Appeals Ruling

In a recent decision, the California Court of Appeals reversed a trial court ruling and determined that UFAA has association-al standing to challenge Farmers’ performance standards and office requirements. According to the Court:

UFAA essentially sought declarations that the Agreements categorically forbid Farmers from terminating an agency based, in whole or in part, on its dissatisfaction with the agent’s office location or failure to meet performance standards. Farmers did not dispute that it considers such factors when deciding whether to terminate an Agree-ment, and has, in fact, terminated Agreements for such reasons. The only issue before the court, therefore, was whether the Agreements permit Farmers to terminate agencies for such reasons. To decide that issue, the court needed only interpret and construe the terms of the Agreements; it did not need to consider evidence related to individual agents or the specific circumstances under which their agencies were terminated. The claims, there-fore, satisfied the third Hunt requirement, and UFAA had standing to pursue them.

UFAA is pleased by this validation from the Court of Appeals of its ability to speak for, and take action on behalf of, its members.

However, UFAA is disappointed that the court allowed the trial court’s ruling on the underlying causes of action to re-main in place. Specifically, UFAA challenged Farmer’s ability to terminate agents’ contracts for failure to meet performance standards or failure to meet Farmer’s arbitrary office location requirements. By affirming the trial judge on these issues, the Court of Appeals … at least for the moment … gives Farmers carte blanche to continue these unfair practices.

The court agreed with UFAA that the contracts do not ex-pressly impose these obligations on agents. It noted: “UFAA is correct that the Agreements to not expressly prohibit specific office locations or require agents meet performance stan-dards.” But the court relied on the 90-day termination provi-sion within the contract to justify Farmers’ actions: The parties may invoke the provision and terminate the Agreement at any time, and for any or no reason, so long as they provide sufficient notice. It follows that Farmers may ter-minate an agency under the no-cause termination provision for reasons not specifically listed in the Agreement, including dissatisfaction with the agent’s office location or failure to meet performance standards.

UFAA respectfully disagrees with this assessment, and it has filed a Petition for Rehearing. In that petition, UFAA asks the question:

If Farmers always had the power to impose performance standards on the agents and then terminate agents for failing to achieve those standards, then why did Farmers need to revise their Agent Appointment Agreement in 2009 to add [language that introduces “performance standards” for the first time]?

With its organizational standing affirmed, an energized UFAA remains committed to these issues of critical importance to the Farmers agency force. It will aggressively pursue its Peti-tion for Rehearing and, if necessary, further appellate relief.

This article is for information purposes only. The contents should not be construed as legal advice and UFAA expressly disclaims any such advice.

Dirk Beamer, UFAA General Counsel


Spring 2019 UFAA - ”Agents Helping Agents”® 11 - The Voice

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UFAA Pages.indd 1 1/30/2019 10:50:23 AM

United Farmers Agents Association Application for Membership 9785 Mackenzie Rd, Ste #104, St. Louis, MO 63123

Phone 314-631-7898 • Fax 314-631-7963 • Email: [email protected] “Agents Helping Agents”®

Mission Statement - The United Farmers Agents Association is a professional Association committed to helping our members through education, communications, support and information, and to establish a true partnership with Farmers Group, Inc.

APPLICANT INFORMATION Name Agent Since: Agent Code Mailing Address, City, State, Zip [ ] Home Address [ ] Office Address Physical Address if different: Office Phone: Cell Phone: Fax:

Non Farmers Email: Farmers Email: TYPE OF MEMBERSIHP – Please Select One

FULL

MEM

BER

SHIP

BEN

EFIT

S Regular: Farmers Insurance Agents with an in force Agent Appointment Agreement. [ ] Annual $320 first year – Renews at $420 Annually after the first year.

[ ] Semi-Annual $160 first year – Renews at $210 after first year.

[ ] Monthly EFT $26 a month for the first year – Renews at $35 a month after first year- Attach a copy of a voided check. [ ] Associate ($75 Annual): Former Farmers Agents who ARE NOT employees, agents, representatives of and DO NOT hold

appointments with an insurance company that offers one or more of the same lines of insurance as Farmers. [ ] Affiliate ($100 Annual): Former Farmers Agents who ARE employees, agents, representatives of or hold appointments

with an insurance company that offers one or more of the same lines of insurance as Farmers. [ ] Advocate ($75 Annual): All persons who have never held an Agent Appointment Agreement with Farmers. [ ] Career Agent ($50 First Year): Active Farmers Agent still in the Career Program -Renews at regular rate after 1st Year.

[ ] Limited Membership - Health (Annual $156): This Membership affords you access to the UFAA Sponsored Health Plan ONLY.

Limited Member - E&O ($156 Annual Prorated) This membership only available through the E&O Website: www.groupeando.com IN ADDITION TO MY DUES, I WISH TO CONTRIBUTE:

$ to the General Fund $ to the Legal Fund $ to the AGM DRA Lawsuit PAYMENT MODE – PLEASE SELECT ONE

[ ] EFT (Monthly) Attach a copy of a voided check [ ]$26 [ ]$35 [ ]$40 [ ]$45 [ ]$50 [ ]$_______ [ ] I authorize UFAA to make electronic withdrawals from my account in the amount stated above. Withdrawals will occur on or about

the 10th of every month. This authorization agreement is effective as of the signature date below and will remain in full force, including renewal, conversion or future changes in membership dues, until UFAA has received notification from me of its termination by me in writing and until they actually receive such notice.

[ ] Check Please Make Checks payable to UFAA and mail to the address above

[ ] Visa [ ] MasterCard - I authorize this amount to be charged to my credit card: $____________ Credit Card Number Expiration Date CVV Code: Billing Address: [ ]Same as mailing

CHAPTER SELECTION –if you do not select a Chapter you will be placed in the closest Chapter to your zip code [ ] Please place me in Chapter ______ (Local Chapter numbers can be found on the back of The Voice) [ ] UFAA does not publish or distribute its membership list, but if you wish to be enrolled in UFAA’s Anonymous Program please check the box to the left. By doing so you understand that you will not be part of the UFAA Agent Referral Program. Referred By:____________________________________________________________________ How did you hear about UFAA? Why are you joining?

Membership Identification question and answer: Mother’s Maiden Name [ ] I wish to only receive the email/digital version of UFAA’s Publication The Voice. I agree that I will not share the Member’s Only version of the publication. Please discontinue sending me a printed copy of The Voice.

I do hereby apply for membership in the United Farmers Agents Association, Inc., and agree to abide by the Bylaws and the Code of Ethics. I further agree with the general objectives of UFAA. ____________________________________________________________________________________________________ Signature of applicant Date

08/2018 Voice


MANY DECISIONS TO MAKE

YOUR NEW NATIONAL SECRETARY

By now, Agents that were contemplating leaving on June 30, 2019, when the Contract Value freeze ends, have made their decisions. I am sure this was a difficult decision, which is what seems to happen every year now with FGI. Agents are so worried about their future it is difficult to focus on selling and growing their Agencies. I was hoping by now that FGI would have come to their senses and started to act like an actual In-surance Company wanting to write new business, but it hasn’t happened yet. I am sure Agents would love to see FGI change their direction and become a part of the Insurance World again. It has been a while since Farmers Agents have had peace of mind so they could just run their business, grow their Agen-cy and support their family.

I am sure there are many changes ahead and all Agents should want an organization fighting for them as UFAA does. I know at times it doesn’t seem like we are gaining much ground, but then something will happen and you can see a small light coming thru. Now is the time for all Agents to go to ufaa.com and look at what UFAA has to offer. We work daily behind the scenes to help our members be better-informed Agents. It is a difficult job but UFAA does keep plugging away. All Agents need to be a member of UFAA to give the Agency Force a larg-er voice with FGI. You get $100 off your first year’s dues and your dues are a tax deduction. Why not have your Chapter use the recruitment program UFAA sent out recently. If the Chap-ter recruits 10 members, the program will cost the Chapter nothing. It just takes a little time from your Chapter and it has already been proven to work.

I would encourage any Agent who has received information

that may be helpful to other Agents to pass that information along to the National Office ([email protected]) so we can get the information out to everyone. UFAA would love to have an article from you on your thoughts, etc. We can’t get all articles in every time, but we will get most of them in The Voice which goes out quarterly. The Board, along with Libby and Maggie at the National Office, can’t always know what some of you know so your articles are welcomed.

I hope everyone is planning on going to this year’s convention in Las Vegas. You can get a registration form from ufaa.com to register you and your significant other. I know there will be good speakers and many Agents from all over the country to talk with who are going through exactly what you are going through. So, if you have never been to a UFAA convention why not go this year. There will also be vendors there for you to ask questions and get information. I would really encourage anyone who has not been to go this year and not keep putting it off.

Don’t forget to support the Legal Fund as the lawsuit is still moving forward. We should not let this lawsuit die until we have exhausted all avenues legally. It is baffling to me how the court hears everything they do from the witnesses and still thinks FGI is abiding by the contract. Even though FGI wrote the contract in their favor to begin with, they still don’t want to honor what they put in the contract. UFAA must fight the fight and not give up after coming this far.

Hope to see everyone at the convention this year!!

For those of you I haven’t had the privilege of meeting yet, my name is Paige Underwood and I am honored to serve UFAA as the interim Secretary. I started my journey with Farmers as an agent in 2011, and have been a member of UFAA since 2015. I am a fifth generation Oklahoman; proud wife and mom; and love, love, love insurance.

I am now an independent insurance adjuster and travel with my work. I have a Bachelor’s degree in Communications from Baylor University and have been leveraging that education for more than 10 years in the insurance and financial services fields as a licensed agent, adjuster, and financial services repre-sentative.

As Secretary, I will focus my efforts on improving the website and streamlining UFAA Tech for the overall benefit of mem-bership. I will work within the scope of my responsibility to identify potential cost efficiencies and technical needs of the organization.

I welcome the input of any of our members in this venture. As times change and technology advances, we have a great opportunity to analyze our current situation and continue the mission of “Agents Helping Agents”®.

I look forward to earning your support and trust. I can be con-tacted via email at [email protected].

John Wiley, Director of Membership

Paige Underwood, Secretary


SHARE YOUR LEAD VENDOR KNOWLEDGE As an Agency Manager, there are few things less frustrat-ing than spending a lot of time and money with a lead vendor that isn’t resulting in sales. On the other hand, it is rewarding to find a lead program that works or get tips from another Farmers Agent on how they tweaked a lead vendor program to make it work for them. My District Office is simply too limited on the amount of information they have on lead vendors. The UFAA Chapter Presidents want to establish a place where all Farmers Agents can access and share their lead vendor knowledge. We are simply asking that Farmers Agents email your experiences with lead vendors to the following Chapter Presidents:

Kent Underwood (Dallas-Fort Worth) : [email protected] Felger (Austin): [email protected]

Here is an example of information that I would like to share:

I hooked up with All Web Leads through Agency Market-

ing for several years but, with poor results (even my DM assistant admitted the leads were over worked by too many agents). However, I x-dated them and they resulted in sales later. The ratio of sales to cost isn’t favorable.

My District Office Assistant suggested I try boat owner leads obtained free through the state of Texas database. The sales have not been immediate and some leads are not going to change agents but they are free leads.

I tried Connected Leads, which is a lead vendor that has a telemarketer connect with live leads via Skype. The Con-nected Leads were expensive and non-productive at first. However, after tweaking their system with a better phone track and choosing only the most competitive zip codes they started to work out well.

We have not yet decided on a format to share the infor-mation that you share with us but, I promise that the knowledge will be shared. This is what the United Farmers Agents Association is about... “Agents Helping Agents”®


2018 EXECUTIVE COMPENSATION2018 Supplemental Compensation Exhibit

Year Salary Bonus Stock Awards

Option Awards

All Other Compensation

Reported Total

FIE President, CEO Principal Executive Officer 2018 1,000,000 1,320,000 1,834,728 518,251 4,672,980 Jeffrey Dailey 2017 1,000,000 1,320,000 1,580,632 177,435 498,385 4,576,451

FIE Chief Financial Officer Principal Financial Officer 2018 390,150 673,431 258,855 1,322,436 Ronald Mayhan 2017 388,090 689,696 110,322 163,516 1,351,624

FIE Chief Claims Officer Robert P Howard 2018 310,971 296,842 81,018 688,831 Robert P Howard 2017 248,672 229,571 57,377 535,621

FIE Claims Executive Frank A Carni 2018 284,588 297,894 58,814 641,296 Frank A Carni 2017 278,146 273,531 59,744 611,422

FIE Claims Executive/Employee Craig A Orraj 2018 258,512 268,393 56,925 583,830 Craig A Orraj 2017 250,983 199,640 50,303 500,926

FIE Claims Executive/Employee Timothy E Felks 2018 257,908 278,420 41,234 577,562 Timothy E Felks 2017 248,252 265,986 47,233 651,471

FIE Secretary Doren Hohl 2018 253,523 166,860 60,896 42,340 523,617 Doren Hohl 2017 245,261 175,125 73,791 40,927 535,104

FIE Claims Executive/Employee Todd M Williams 2018 240,581 238,229 35,163 513,972 Todd M Williams 2017 235,000 166,613 34,224 435,837

FIE Claims Executive/Employee Jeffrey D Hathaway 2018 265,700 209,562 30,030 505,282 Jeffrey D Hathaway 2017 257,308 214,702 28,277 500,287

FIE Claims Executive/Employee Ray P McLaughlin 2018 253,704 186,181 41,889 471,774 2017

21st Century President William Donald Loucks 2018 396,781 158,712 150,275 -91,014 614,754

21st Century Treasurer Thersa Leona Harm 2018 194,182 56,413 32,740 12,772 296,107 Thersa Leona Harm 2017 185,981 53,706 39,837 12,237 291,761

21st Century Vice President Ronald Mayhan 2018 390,150 673,431 258,855 1,322,436 Ronald Mayhan 2017 388,090 689,696 110,322 163,516 1,351,624

21st Century Actuary James Leslie Nutting 2018 305,082 219,425 120,154 62,165 706,826 James Leslie Nutting 2017 296,196 230,424 146,513 51,506 724,639

21st Century Vice President Robert Paul Howard 2018 310,971 296,842 81,018 688,831 2017

21st Century Assistant Treasurer Jeffrey Len Pepper 2018 224,231 109,675 53,693 36,563 424,162 Jeffrey Len Pepper 2017 202,728 105,160 67,968 35,460 408,316

21st Century Secretary Maura Crough Popp 2018 226,868 66,742 39,615 15,003 348,228 Maura Crough Popp 2017 220,172 71,018 48,125 14,569 353,884

Bristol West President (Vice Presi-dent 2016)

Eric Kappler - President 2018 336,539 159,986 68,098 44,378 609,001 Eric Kappler - President 2017 252,135 102,074 83,416 38,266 475,891

Bristol West Treasurer Maria Aguilera 2018 203,567 61,338 14,114 279,019 Maria Aguilera 2017 203,567 75,784 13,966 293,317

Bristol West Vice President Ronald Mayhan 2018 390,150 673,431 258,855 1,322,439 Ronald Mayhan 2017 388,090 689,696 110,322 163,516 1,351,624

Bristol West Vice President Todd Williams 2018 240,581 238,229 35,163 513,973 Todd Williams 2017 235,000 166,613 34,244 435,837

Bristol West Vice President Victoria Louise McCarthy 2018 226,870 93,817 59,914 39,150 419,751 Victoria Louise McCarthy 2017 220,519 95,256 72,722 40,734 429,231

Bristol West Secretary Martin Brown 2018 213,317 111,825 55,985 36,147 417,274 Martin Brown 2017 207,334 117,146 68,177 34,946 427,603

Bristol West Vice President Maite Baur 2018 247,892 100,800 39,871 288,563 Maite Baur 2017 235,962 121,495 36,767 394,224

16 - The Voice UFAA - ”Agents Helping Agents”® Spring 201916 - The Voice Spring 2019 UFAA - ”Agents Helping Agents”®

FARMERS’ EN BANC APPELLATE VICTORY IN ANTI TRUST CASE

Reprint from globallegalchronical.comOn March 4, 2019 – after an exceedingly rare grant of an en banc petition prepared by Weil – the U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal with prejudice of federal antitrust claims in an en banc review of a consolidated appeal in the multidistrict litigation (MDL) entitled In re Auto Body Shop Antitrust Litigation. The court’s 8-1 ruling in favor of the defendants, including Weil client Farmers Insurance and various affiliates, rejected a prior opinion by a divided panel of the Eleventh Circuit (with one judge sitting by designation from an out-of-circuit district court) that overturned key victories on motions to dismiss in a num-ber of component cases. The MDL is centralized in Florida federal court and comprises dozens of cases across the country brought by auto repair shops alleging that Farmers and a number of other insurers artificially suppress reimbursement rates for auto body repairs, in violation of antitrust, RICO, and other federal and state stat-utes. In September 2015, Weil won the dismissal with prejudice of all claims in the lead case of the MDL, and over the course of the following year, Weil secured the dismissal of 13 related cas-es in the MDL. Plaintiffs in five of the dismissed cases appealed these decisions to the Eleventh Circuit, which in September

2017 issued a 2-1 panel decision, over a vigorous dissent, re-versing the trial court rulings and remanding for further pro-ceedings. The defendants then petitioned the Eleventh Circuit for a full rehearing en banc. The majority of the Eleventh Circuit concluded that the auto body repair shops failed to allege plausible facts of a price-fixing conspiracy or a group boycott orchestrated by the insur-ers. As for the plaintiffs’ alleged price-fixing conspiracy, the court of appeals concluded that the challenged conduct – of insurers telling body shops they will pay no more than State Farm and using aftermarket replacement parts instead of new parts – could not plausibly infer a conspiracy because the al-leged commercial conduct is a “rational and legitimate business strategy” of “follow-the-leader practices.” As for the group boycott claim, the court of appeals remarked that those allega-tions were “even weaker” than the allegations of price-fixing because the supposed “boycotting methods” would “logically be employed by any insurer to dissuade its insureds from using a disfavored shop.” The Eleventh Circuit also affirmed the dis-missal of the auto body repair shops’ various unjust enrichment and quantum meruit state law claims, and vacated the dismis-sal of, and remanded for further proceedings, the state law tortious interference claims.

I wish to make a one-time donation to UFAA. Please apply my donation to… [ ] AGM DRA Lawsuit [ ] UFAA’s Legal Fund [ ] UFAA’s General Fund [ ] UFAA’s Recruitment Fund [ ] Wherever UFAA needs the funds the most __________________________________________________________________________________________ Name Non-Farmers Email Address [ ] $100 [ ] $200 [ ] $300 [ ] $500 [ ] $_______ [ ] My check is enclosed OR [ ] Please charge my Credit Card

Credit Card Number: CVV Code Expiration date:

Credit Card Billing address if different than mailing address

Signature Printed name

UFAA National Office Email Fax 9785 Mackenzie Road Ste 104 OR [email protected] OR 314-631-7963 St. Louis, MO 63123

On March 4, 2019 – after an exceedingly rare grant of an en banc petition prepared by Weil – the U.S. Court of Appeals for the Eleventh Circuit affirmed the dismissal with prejudice of federal antitrust claims in an en banc review of a consolidated appeal in the multidistrict litigation (MDL) entitled In re Auto Body Shop Antitrust Litigation.

The court’s 8-1 ruling in favor of the defendants, including Weil client Farmers Insurance and various affiliates, rejected a prior opinion by a divided panel of the Eleventh Circuit (with one judge sitting by designation from an out-of-circuit district court) that overturned key victories on motions to dismiss in a number of component cases.

The MDL is centralized in Florida federal court and compris-es dozens of cases across the country brought by auto repair shops alleging that Farmers and a number of other insurers artificially suppress reimbursement rates for auto body re-pairs, in violation of antitrust, RICO, and other federal and state statutes. In September 2015, Weil won the dismissal with prejudice of all claims in the lead case of the MDL, and over the course of the following year, Weil secured the dismissal of 13 related cases in the MDL. Plaintiffs in five of the dismissed cases appealed these decisions to the Eleventh Circuit, which

in September 2017 issued a 2-1 panel decision, over a vigorous dissent, reversing the trial court rulings and remanding for fur-ther proceedings. The defendants then petitioned the Eleventh Circuit for a full rehearing en banc.

The majority of the Eleventh Circuit concluded that the auto body repair shops failed to allege plausible facts of a price-fix-ing conspiracy or a group boycott orchestrated by the insurers. As for the plaintiffs’ alleged price-fixing conspiracy, the court of appeals concluded that the challenged conduct – of insurers telling body shops they will pay no more than State Farm and using aftermarket replacement parts instead of new parts – could not plausibly infer a conspiracy because the alleged com-mercial conduct is a “rational and legitimate business strategy” of “follow-the-leader practices.” As for the group boycott claim, the court of appeals remarked that those allegations were “even weaker” than the allegations of price-fixing because the supposed “boycotting methods” would “logically be employed by any insurer to dissuade its insureds from using a disfavored shop.” The Eleventh Circuit also affirmed the dismissal of the auto body repair shops’ various unjust enrichment and quan-tum meruit state law claims, and vacated the dismissal of, and remanded for further proceedings, the state law tortious interference claims.

FARMERS’ EN BANC APPELLATE VICTORY IN ANTI-TRUST CASE

Reprint from globallegalchronical.com


Jammal v American Family Decision Overturned by Court of Appeals

The Jammal v American Family “employee” misclassification case was originally filed in Ohio and was tried over twelve days before a judge and advisory jury. The Judge issued his option in agreement with the advisory jury in favor of Jam-mal.

The detailed analysis by the trial court looked at over thirty different agency work situations and found that the detailed oversight, or interference, by American Family created an employment situation rather than the independent contrac-tor status that was claimed in the Agent’s Agreement. The trial court found that the agents were employees and there-fore entitled to all the benefits offered to other American Family employees. It was no surprise that American Family appealed the decision that would have forced them to dra-matically change the way they dealt with and treated their agents. On January 29, 2019 the Sixth Circuit of the United States Court of Appeals found that the Agents were not in fact employees for the purposes of ERISA (Employee Retire-ment Income Security Act). The significance of the issues we expect the agents to ask the United States Supreme Court to hear an appeal. That process will most likely take over a year.

The Appeals Court summarized the arguments on both sides:

American Family• All agents signed a written contract, stating they were

independent contractors;• Agents paid their own taxes;• Agents deducted their business expenses• Agents were paid commissions, not salaries• Agents were not provided vacation pay, holiday pay, sick

pay, or paid time offAdditionally, American Family calls its agents “business owners, and partners,” telling new agents they will own their own businesses and that they will need to invest in “their business.” AmFam agents work at their own office location, set their own hours, pay their own staff, and provide most of the resources necessary to fund their agencies such as office furniture and supplies.

American Family Agents• Everyone else at American Family is classified as an em-

ployee• Agents are required to report to a Sales Manager• Sales Managers had no training on the Independent

Contractor status, or how to treat the agents differently than employees

• Managers exerted a great amount of control over day to day activities

- Requiring daily activity reports

- Prioritizing sales- Requiring night “life calls”- Controlled office location and relocation- Being involved in hiring and firing of agent’s staff

Additionally, the court reviews the facts that agents can only sell American Family products and are forbidden to sell for other carriers, are prohibited for a year from soliciting for insurance prior customers and are discouraged from taking other work, even noninsurance work. Also, the Agents Agree-ment has no set duration, and the agents do not own their agencies, or the policies assigned to them, and thus cannot sell either their agencies or the policies, unlike other business owners.

Our Country’s System of Justice works on the basis of prec-edent. That means that once a court has decided a question of law that decision is controlling in all similar cases in the future. The precedent case for ERISA issues is Nationwide Mutual Insurance Co v Darden, decided in 1992. Darden enunciates the following standard for determining who quali-fies as an “employee” under ERISA, saying:

“In determining whether the hired party is an em-ployee under the general common law of agency, we consider the hiring party’s right to control the manner and means by which the product is accomplished. Among the other factors relevant to this inquiry are the skill required; the source of instrumentalities and tools; the location of the work; the duration of the relation-ship between the parties; whether the hiring party has the right to assign additional projects to the hired party; the extent of the hired party’s discretion over the when and how to work;. The method of payment; the hired party’s roll in hiring and paying assis-tants; whether the work is part of the regular business of the hiring party, whether the hiring party is in the business; the provision of employ-ee benefits and the tax treatment of the hired party.”

In the latter case, the court added that an express agreement between the parties would also be a relevant consideration.

The crux of the Darden common law agency test is the hiring party’s right to control the manner and means by which the product is accomplished. The Court of Appeals found that the (Continued on page 30)

UFAA National Board


NAIC 25 MARKET SHARE REPORT

The National Association of Insurance Commissioners has released its annual market share report for 2018 of the larg-est Property & Casualty Insurance compa-nies nationwide for all lines of insurance.

The annual report, compiles the list based upon filings submitted to the NAIC ranks the top 25 Property & Casualty Insurance Companies based upon Countrywide Premium as reported on the State Page of the NAIC’s annual statement for insurers.

A look at the overall numbers of The Top 25 P&C insurance marketplace in the U.S.

As of March 18, 2019, the industry total of Direct Premiums Written in 2018 for this group of U.S. insurers was $674,763,189,749 dollars. Direct Pre-miums Earned was $660,722,431,972 dollars.

Noteworthy movements from this year’s Market Share Report

As stated in past reports, the only Mas-sachusetts-based insurer making the list, is Boston-based Liberty Mutual Group. In 2016, Liberty Mutual overtook Allstate to become the third largest insurer in the U.S., a spot that it continues to hold this year as well. Berkshire Hathaway contin-ues to rank as the second largest insurer in the land, while State Farm still dom-inates at the top, albeit by less market share than in past years. Berkshire Ha-thaway continues to increase its market share across the country.

After doing a quick comparison between this year’s and last year’s Top 25, here are some of the other major movements in market share noticed:

• Progressive moves up a spot to over-take Allstate as the third largest P&C insurer in the nation,

• Allstate moves down to fifth place on this year’s list,

• In addition to Progressive, American Family, AutoOwners, Tokio Marine all moved up a spot from their position last year,

• In addition to Allstate, Erie, American Financial, and WR Berkley all moved down a spot,

• The largest move upwards was first Assurant which moved up five spots, followed by Fairfax Financial which increased three spots on the list,

• The largest move downwards was AmTrust which fell down eight places from last year,

• AXA was new to the 2018 list rank-ing this year as the 24th largest P&C insurer this year.

Rank Company Name Direct Premium Written Direct Premium Earned Market Share1. State Farm Group $65,856,898,170 $65,548,126,371 9.76%2. Berkshire Hathaway $43,869,809,385 $42,425,299,246 6.50%3. Liberty Mutual Group $34,605,081,217 $34,188,052,776 5.13%4. Progressive Group $33,754,922,894 $31,972,011,125 5.00%5. Allstate Ins Group $33,251,176,400 $32,751,848,252 4.93%6. Travelers Group $26,244,171,590 $25,641,953,421 3.89%7. Chubb Ltd. Group $22,008,957,111 $21,869,143,670 3.26%8. USAA Group $21,984,970,084 $21,428,303,127 3.26%9. Farmers Ins Group $20,309,965,620 $20,151,472,075 3.01%10. Nationwide Corp Group $18,416,860,937 $18,617,031,408 2.73%11. American Intl Group $14,724,754,898 $15,251,392,318 2.18%12. Zurich Ins Group $12,412,211,313 $12,659,561,445 1.84%13. Hartford Fire & Cas Group $11,054,644,065 $11,093,788,238 1.64%14. CNA Ins Group $10,690,865,252 $10,381,388,244 1.58%15. American Family Ins Group $8,939,812,246 $8,642,091,092 1.32%16. Auto Owners Group $7,918,031,340 $7,560,713,373 1.17%17. Assurant Inc Group $7,199,061,040 $6,726,481,832 1.07%18. Tokio Marine Holdings Inc Group $7,167,501,411 $6,943,486,690 1.06%19. Erie Ins Group $7,119,635,524 $6,895,406,221 1.06%20. Fairfax Fin Group $6,077,237,304 $5,844,942,917 0.90%21. American Financial Group $5,997,652,323 $5,906,642,987 0.89%22. WR Berkley Corp Group $5,930,759,725 $5,863,556,250 0.88%23. AmTrust Financial Serv Group $5,915,667,790 $5,861,233,705 0.88%24. AXA Ins Group $5,256,829,296 $4,913,088,117 0.78%25. Markel Corp Group $ 5,255,184,549 $4,960,485,829 0.78%

Reprint from agencychecklists.comMarch 26, 2019 by Julia Ybarra

Farmers Agents face several issues related to record keep-ing that make them vulnerable to E&O claims. Fortunate-ly, many of the issues are easily solved with good record keeping, underwriting documentation, and employment of an agency management system.

Keeping copies of all documents outside of the Farmers system is incredibly important. Many agents believe that the Farmers quoting and record keeping system is oper-ated for their convenience. Unfortunately, some find the system less than convenient when documents go missing.

The first thing to remember is that the records in the system belong to Farmers, not the agency. Farmers may deny the agency access to these records at any time, for a number of reasons. Agents have been placed in the po-sition where they must subpoena their insured’s records from Farmers in order to defend themselves in court.

Examples of missing documents include photos of inspec-tions, UM waiver forms, CIS reports, and other docu-ments that virtually all states require Farmers to safe-guard. This has been especially true when Farmers has converted from one record keeping system to another, failing to transfer prior records. Securing copies of their own documents in their own system will save agents a massive headache in the event of an E&O claim.

In addition to secured document management, agents also must be vigilant in documenting their interactions with underwriting. Agents who have discussed a risk by phone with underwriters and relied upon the underwriter to note the conversation have found that the notes never appear and there is no record of any call. This leaves the agent unable to prove what they represented to the un-derwriter and what the instructions were. The agent has to remember that it is not Farmers’ responsibility to make the agent’s file notes.

Claims adjusters are now trained to observe underwriting guidelines and inspect risks at the point of loss for ineligi-bilities. If found, ineligibilities are reported to the Farmers subrogation department for review. The subrogation de-partment investigates with the intent to transfer the cost of the loss to the agent or their E&O Insurance.

The absence of documentation in these circumstances leaves the agent in a guilty until proven innocent position that can not only result in an E&O claim but may have an effect on their Agency Appointment Agreement for misrepresentation or exceeding authority. Agents must document their interactions with underwriters. An email follow-up to a phone call is the best way for agents to protect themselves.

The same precaution should be taken when dealing with insureds. Agents must assume that any phone call related to coverage will be forgotten or denied by the insured, should a loss go uncovered. Agents should follow up all phone calls with an email to the insured, confirming the conversation and clearly articulating the expected actions of both parties.

Lastly, an outside agency management system might not be required by Farmers but is always a good idea. Man-agement systems are no longer difficult to use, slow, and expensive. For as little as $75 a month, agents can be set up with a web-based management system that will track policies, manage files, and allow notes and diaries to be kept in an organized, easily accessible system.

All Farmers records should be retained in the outside system, especially if a Farmers Agency is placing agency bill business outside of Farmers. The carrier and General Agent has no liability to the insured for failure to notify the agent of an upcoming renewal. Because the agent usually indemnifies the general agent in the appointment contract, the agent is liable for a notification failure, even if it is the general agent’s fault.

When an agency maintains records thoroughly, docu-ments interactions with underwriters and clients, and takes advantage of an agency management system, that agency is not only in a better position to defend itself in the event of a claim, the likelihood of a claim is reduced. The United Farmers Agents Association E&O program includes a risk management evaluation and helpful strate-gies specifically designed to help Farmers Agents.

FARMERS AGENCY STRATEGIES FOR MINIMIZING E&O RISK

Kevin Dahlke, UFAA E&O Designated Program Underwriter



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WOODLAND HILLS, Calif., March 18, 2019 /PRNewswire/ -- ToggleSM, an innovative, insurance brand aimed at today’s consumer, and backed by Farmers Insurance®, has expanded its affordable, customizable renters insurance to nine additional states: Colorado, Indiana, Iowa, Kansas, Minnesota, Missouri, Ohio, Utah and Virginia.

“We’re thrilled with the way consumers in our first two states of Illinois and Wisconsin have embraced Toggle and that has driven our team to begin implementing the next phase of our plan to bring our brand to nine new mar-kets,” said Stephanie Lloyd, head of Toggle. “We look for-ward to bringing Toggle to consumers in additional states and to continue to build momentum in the marketplace.”

The insurance ninjas at Toggle are intent on changing the way today’s consumers view insurance with a dynamic, digital platform and a uniquely customized experience. Toggle tossed out the industry standard renters’ insur-ance product and replaced it with a shorter, easier-to-un-derstand policy that still includes coverage for things like flood and earthquake, which are typically excluded.

With Toggle, renters can choose an insurance subscrip-tion that is unique to them by toggling different coverage elements up, down, on or off, and choosing from optional add-on features designed to simplify and help them solve for their needs.

The foundation of the service is three subscription levels – basic, standard and premium – starting as low as $5 per month. While the policy is based on an annual coverage period, customers have the opportunity to make changes or cancel at any time. All subscriptions carry a minimum of $100,000 in liability coverage, at least $1,000 in blan-ket contents coverage, and offer the ability to increase coverage as needed to cover additional belongings. Toggle also offers optional add-on coverages designed to support customers through their life’s journey, including:

Credit LiftSM, powered by RentTrack®, which reports on-time rent payments to all three major credit card bureaus to help build their credit score. On average, users see their credit scores increase by 29 points after just 2 months. Always On Portability means belongings are covered at

home, on the road, during a move, or anywhere in be-tween. Pet ParentSM offers protection for injuries caused by their pet to another person, boarding costs if a covered loss or damage makes their residence unfit to live in, and dam-age to their residence caused by their pet. Side HustleSM covers the things customers use to make extra money on the side, like the camera for a food blogger, or the laptop and sound equipment for a DJ. It even covers personal injury for social influencers and lost wages due to a covered loss. Identity Protector provides instant identity alerts, al-lowing the customer to take action in real time, to help protect their identity.

Toggle is backed by the financial strength and experience of Farmers Insurance®, giving it a foundation of 90 years of industry-leading product development and first-rate customer service.

Toggle is now available in eleven states across the coun-try, including: Colorado, Illinois, Indiana, Iowa, Kansas, Minnesota, Missouri, Ohio, Utah, Virginia, and Wisconsin. Additional state rollouts are expected throughout 2019.

“The insurance marketplace is changing and our team of inspired disruptors – our Toggle brainiacs – also happen to be experienced insurance professionals, so when we are developing new products and services, we’re able to start much higher on the development curve,” said Lloyd. “We’re excited about the future and we’re excited about our role in bringing innovative leadership to our industry.”

About ToggleSM

Toggle is a brand name of Farmers®. Insurance is un-derwritten by 21st Century Assurance Company or 21st Century Premier Insurance Company, members of the Farmers Insurance Group of Companies®. Coverage is currently available in Illinois, Wisconsin, Colorado, Indi-ana, Iowa, Kansas, Minnesota, Missouri, Ohio, Utah and Virginia. Policy issuance is subject to underwriting review and approval. Whether a specific loss is covered depends on the coverage purchased and the specific facts, policy exclusions and conditions, and the limits of insurance purchased.

TOGGLE(SM) EXPANSION DELIVERS REIMAGINED INSURANCE BRAND BUILT FOR DIGITALLY-POWERED CONSUMERS TO NINE NEW MARKETS

Reprint from insurancenewsnet.com


WAKE UP CALLHello! My name is Bill Gough and like you, I was an insur-ance agency owner with a captive company for 27 years. UFAA has invited me to speak at your convention in Las Vegas in September and I look forward to meeting and shar-ing with you my proven systems and process that will help you take your agency to the next level. Right now and next quarter, I am going to share with you a couple of things that will help you out until we meet in October.

There’s an old story about a lion and gazelle, you may be familiar with it.

And… It applies perfectly to all of us, especially for all of you that are in the business of selling and servicing insurance.

Every morning in Africa, a gazelle wakes up. She says I must run faster than the fastest lion, or I will be eaten. Also, every morning, a lion wakes up thinking a similar thought. I must run faster than the slowest gazelle, or I will starve to death.

What is the moral for us? It doesn’t matter whether you are a lion or gazelle - when the sun comes up, you better be up and running.

The world you live in today is moving faster than ever … and … will continue to speed up. If you are not proactive in establishing goals, plan to reach them, and actively taking action on these goals, like the slower lion or gazelle, your business may die.

Take some time to consider the following 5 questions:1. What are you doing when you first wake up?2. Are you controlling your day or are you allowing forces to control you and your team?3. How can you improve your plans and actions to achieve your definition of success?4. Are you doing everything possible to achieve that success?5. What can you improve or change to get your agency on the right track?

I want to share with you an example of how the world and outside forces are controlling the majority of people not only in the USA, but also in every civilized nation on the planet:

Most people sleep with their so-called smartphone next to

the bed or worse in the bed. Now, if this was solely for the purpose of an alarm clock that may be okay. You know this is not the case, and the first thing it’s not very smart. And I will tell you why…

Usually, the first thing people do when they wake up is to grab that smartphone and start checking their email and/or getting sucked into social media. When this happens, you become a prisoner to outside forces and lose all control.

People ask me a lot, how do I get so much done?

Believe me, for years I was as trapped by technology and got caught up in allowing outside forces to control me.

That changed for me in 2004 when I had a major break-through and learned the value of my time when I was work-ing PRODUCTIVELY.

Never confuse being busy at work with productive work!!

What I am about to share with you right now, do not let it offend you, I am not trying to be religious or change your ways, I am just trying to tell you what WORKS for me…

For about nine years now, I practice a ritual of beginning and ending my day on a positive note by spending several minutes in:• Prayer• Meditation &• Concentrated breathing

Since I’ve been practicing these tools for years, I have gotten pretty good at it … but … I have to be careful not to just read or say the words without meaning.

The beginning time each morning gets me thinking about the 24 hours ahead and to make sure to ask my God for help in my thinking and actions.

At night just before going to sleep my thoughts are of grati-tude, and I do a nightly inventory review to see if I’ve been wrong, resentful, where I could have done better, and more.

At the end of each WORK DAY…

Bill Gough, Insurance Hall of Fame Member


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REVIEW YOUR OPTIONS

(Continued from page 24)

I write down three or more wins for the day plus what I will be working on tomorrow. At the end of each week, I review my wins and list a few MAJOR ITEMS that I need to imple-ment in the following week. These major implementing items should align with my strategic goals.

Recently, I added a live 45-60 minute Weekly Accountability Call (WAC) for our TPC Mastermind members – their results have been amazing, and will continue by practicing these principles in their agencies and personal lives.

Years ago in my insurance agency we began using daily task lists.

Our agency built systems and processes for sales, marketing, operations and building a winning team. So you can take control of the business instead of the business controlling you. (Next quarter, in this publication, I will be sharing more on this.)

You can also make this switch from being controlled by out-side forces (employees, clients, email, social media, family, etc.) by deciding how you are going to do your work.

If you are overwhelmed, nothing will ever change until you make some changes.

If you’re guilty of sleeping with your phone and having the world dictate to you, MOVE IT tonight and wake up in peace asking your higher power to guide you in your thoughts and actions today.

It takes 60 seconds or less.

If you’d like some of the material that I meditate on starting and ending each day, please email [email protected] with “Meditate” in the subject line.

About the Author: Bill Gough started his career in insur-ance in 1984 with Allstate working in a booth at a Sears Department store. Since the early 90s Bill’s agencies have consistently ranked in the top 1-5% of all Insurance Agencies across the country. Bill has won 117 insurance sales awards in personal lines (including life insurance) and small com-mercial, but none of these awards mean as much to Bill as the philanthropic work he does through his son’s memorial charitable fund. Since his son’s death in January of 2007, Bill has donated over $750,000.00 with a goal to donate $1,000,000.00 by November 2018 - exactly 10 years after starting BGI Systems.

REPOSSESSEDCaptive carriers maintain enough con-trol of an agent’s business to ques-tion their classification. The carriers ultimate control is held through the “at will” provision of the appointment agreement. The agreement may be le-gally terminated by either party at any time, without cause merely by provid-ing written notice. Only the company is afforded leverage with the “at will” provision leaving the agent under a constant threat to either comply with every management company demand and mandate of operation, or be termi-nated. The agent really has no leverage.

Some independent contractors are contracted for a specific time. Some are contracted for completion of a task. When the allotted time has passed or task is complete, the contract termi-nates. Contrarily, captive insurance agents have open-ended contracts. Agreements with no time limit and no specific task to complete. Agents are signing a short term agreement for an open-ended term. Unfortunately, the captive agent may not have failed in any duty or breached the agreement in any way yet, at any time they may find themselves threatened and terminated without good cause.

Trials such as Jammal v AmFam, Par-ry/O’Sullivan v Farmers and Sheldon/Hunsberger v St Farm question the classification. Courts are split but, still seem focused that agents agree to be independent contractors. Ignoring the fact both parties agreed to allow the agent “sole discretion” to run their operation as they choose yet, the company ultimately maintains control, ownership and sole discretion with the open-ended, “at will” AAA.

Insurance agents make large invest-ments in their business. Success re-quires they make a leap of faith and ignore the short term contract. Agents are led to believe they have “owner-ship” in their business yet, the carriers retain ownership of any and all material associated with the agency! Begging the question, is “ownership” of the agency a misclassification? What does

the agent own apart from chattel and possibly real estate if the Contract Value or termination payment is merely consideration for a non-compete?

Is the Appeal ruling in Jammal v Am-Fam an example of passing the buck? Is it justice to lump all independent contractor agreements together? These contracts are not all the same! The court recognized agents have special-ized skills. They pay their own taxes, hire their own staff, choose where to purchase office supplies and equipment and they agreed to be independent contractors. Based on that yes, they are. However, courts must also recog-nize whatever title and sole discretion offered the agent doesn’t really exist.

District Judge Nugent and Appeals Judge Clay saw the light. In contrast, Appeals Judges Boggs and Rogers ig-nore the fact that by their own defini-tion, AmFam employee managers also have “specific acquired skills!” AmFam employee managers also have “sole discretion to hire and fire assistants” exactly as independent contractors! Additionally, they ignored the fact American Family refers to agents as agency owners yet, the company holds title, full authority and the power to repossess the so-called ownership at any time, for any reason.

Another point ignored is the fact these agents are not suing to become em-ployees!!! They are not suing to gain benefits. They are trying to be treat-ed fairly, according to their contracts and stop mistreatment. To gain title, control and sole discretions afford-ed them through their agreements. Because there is no other way for agents to police injustice to themselves and consumers, they must call for the question in court. How long will courts continue to allow captive carriers to induce citizens into contracts which grant sole discretion, only to have the carrier deprive the agent their discre-tion under a veiled threat of short term termination?

The agent brings the business they

supposedly own to the carrier. When a company terminates the agent for no “good” reason, the company severs the relationship made between the customer and the agent. Creating that relationship is a skill worth more than investing a lifetime and fortune only to lose everything to a carrier trying to save the equivalent of an employee benefit.

If you are looking for a silver lining two out of the four judges ruled in favor of Jamal, along with a jury. Though it seems our legal system affords the most justice to the party with the most money. In this case that includes all the captive carriers. Not that the other carriers contributed money to help AmFam but the Judges know the huge disruption to the entire captive industry if they ruled in favor of Jammal.

In UFAA v Farmers AGM DRA Judge Alarcon opened the trial stating the facts were too complex for a jury to understand so, despite UFAA’s demand for a jury, UFAA was denied. The DRA merely pointed to several provisions of the appointment agreement to show one party is not holding up their end of the bargain. The open-ended at will provision leverages the company into total control. That is not complicated! A jury would likely agree, the sole discre-tion offered the agent in the agreement is stripped away by the “at will” provi-sion. Did Judge Alarcon simply pass the buck by only allowing his own ruling and denying UFAA members the justice of a jury?

A silver lining here, the Appeals panel overruled Judge Alarcon that UFAA DOES have standing. Meaning members of the Association have the standing as an Association to bring the question to court rather than forcing an individual to go it alone. THIS IS HUGE FOR ALL ASSOCIATIONS as agents stand little chance on their own. To prevail against the billions available to man-agement you need a united association. That is what agent associations have done. That is why you join.

Kim Rich, Director of Legal Activities



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NEWS FROM UP NORTHIn review of my personal upcoming home and auto insur-ance, I discovered a couple things:

Signal Program - I signed up for signal so I could speak to clients factually and from a consumer standpoint. I contacted service ops because of the lack of transparency from Farmers renewal documentation regarding my signal discount. I did receive the 5% “sign on” discount in 2018. Service ops was unable to advise me how much of the .5-15% Signal discount would be applied to my renewal. Week after week I get notifications through the signal app that my driving is 100% distraction free. Somehow my comparative score of 60 - to other drivers -63- puzzled me. Service ops gave me a phone number to the folks at signal. Following up with Signal, I learned that upon my renewal, I would be receiving a .5% discount (yes, 1/2 of 1%)! I questioned how my score of 60 was determined - the rep-resentative couldn’t give me an explanation! I asked how I could only get a .5% discount considering that 60 out of a potential 100 score is 60% and 60% of a possible 15% discount should equate to a 9% discount. The represen-tative could not explain how the driving score correlates to the discount amount! That conversation was followed by an email to those up the Farmers Food Chain. Two days passed and I received a call but was advised that they couldn’t answer any of my questions and that they would have to get back to me, as a side note I was thanked for “all I do”. As of this writing I have not re-ceived any communication from Farmers with answers to these questions and, I am sorry to say, I have little confi-dence that I’ll hear back.

This seems like this is just one more data gathering exer-cise disguised as a discount. Clearly the lack of transpar-ency and information available to me, an agent, leads me to believe that due diligence and caution must be used whenever discussing this product. We all want to offer our clients the best coverage with the greatest discounts but when discounts seem arbitrary and can’t even be ex-plained by those that are supposed to know what is going on inside the black box it must give you pause. Dealing with a client who feels they have been deceived and continues to see rate increases year after year and loses discounts unexplainably may very well present some unnecessary risks surrounding agent/client relation-ships in ethics, trust and personal personal integrity. This could be the last straw that pushes our long time loyal cli-ents out the door. And those that already have one foot out the door will move to a competitor that much faster. Consider the steps and consider the response - will you retain customers with a scenario like this?a. Client contacts agent (agent contacts service ops)b. Service ops can’t help, has agent contact signalc. Signal people can’t explain details d. Agent seeks help from support system at Farmers to no avail.e. Farmers representatives can’t provide answersf. A week passes, agent still has nothing to report back to the client. Never have I experienced such a total and complete blun-der in a new product roll out. We are being asked to sell a product that cannot be explained, has no transparency nor has any correlation to distracted free trips or overall driving score to a supposed “discount”? This boggles the mind and all sense of logic! Six months after the product roll out and still, a “veil” of secrecy surrounds the product as it did at the outset. Farmers Agent Discount - As I reviewed my policies, I also noticed that my Farmers Agent Discount had been removed upon renewal. After being on chat for about 20 minutes and them not being able to put the agent dis-count back on, I was advised that this discount is consid-ered an “affinity” discount and was being removed.

Recent Member of the Farmers Family


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MY HOTEL CALIFORNIAHotel California by The Eagles was playing on the radio as I drove to work this morning and I thought that I would write this article. I became a Farmers Agent 23 years ago. It has been a good ride, but up ahead in the distance I see trouble.

I launched the agency as you would any start-up with some seed money, a solid business plan and a cadre of good professionals to support and mentor me. The play-ing field wasn’t quite level then (we were a B++ company then owned by big tobacco), so in order to achieve my goals of freedom and wealth, I had to do what I had to do. For one, I had realized early on that auto/home poli-cies are just a commodity, so I focused on commercial in-surance instead. It paid off. Every time Farmers took rate increases, tightened underwriting, or cut personal lines commissions, I remained relatively isolated. The online lizards and price shoppers didn’t come knocking. I contin-ued to specialize in commercial, and I thrived. Toppers! Championship! Elite Agent! Then all hell broke loose.

Hotel Insurance is one of my key areas of specialty. We ran with the HBOP program when it was first introduced in 2010. It was a solid product, much like our real estate BOP, and we wrote medium to large size accounts na-tionally (currently in 15 states). I played an active role in developing the HBOP and gave the company real-time intelligence on the competition as I had outside appoint-ments and easy access to key players in this industry. We made the company lots of money and I also took a good chunk of it home. The folio grew at a steady 12% (rather remarkable if you think about it), I was profitable, and ranked amongst the top commercial producers in my state. We played this game right. Then Farmers pulled the plug.

The HBOP book will all be non-renewed – lock, stock and barrel. So much for believing in a solid program and a company that takes pride in its commercial insurance heritage. I now stand to lose 27% of my Farmers renewal income in the coming months. Here I am, a successful agent, an ambassador of Farmers, who will be cheated out of one-third of his income. No one from Corporate ever consulted with me about this, and I have the largest HBOP book with them. Ponder this for a minute.

Farmers was grossly negligent in the way they promoted

and administered the HBOP program. Their vision was driven by greed and unbridled growth, and the company simply looked the other way as seedy motels sneaked into the book. It was only a matter of time before such shenanigans created underwriting nightmares and losses. Now Farmers is throwing the baby out with the bathwa-ter.

Farmers has checked me in at Hotel California, and check-ing out won’t be easy. All other headaches aside, you can well imagine what this will do to my Contract Value. You can also be sure that this move will relegate me to the dark quadrant of the AGM as premiums evaporate. I can also kiss achievement clubs and bonuses goodbye for a while. Maybe I should focus on the Expanded Restaurant program, and try to cut my losses. Maybe Farmers will also get out of this class after a few large liquor liability claims. But I will be alright once I get out of this night-mare. I have a healthy book of outside business, money in the bank, and I know some good people in the insurance industry...and did I mention, I know a few good lawyers too.

Elite Commercial Agent in Oregon

(Continued from page 17)

trial court had incorrectly applied the legal standards in de-termining the Darden factors relating to the skill required of an agent and the hiring and paying of assistants. The Appeals Court goes on to say that had the trial court done this prop-erly, the decision would have been in favor of independent contractor status rather than an employee.

There is a 10-page dissenting opinion by one of the judges on the appeals panel. He says that the analysis by the ma-jority is erroneous. He disagrees with the majority’s method of finding “facts” when they should have been left alone on appeal. He disagrees in detail with the findings of the major-ity regarding the two Darden facts they use to support the reversal. This well written and reasoned dissent is a great read and shows how like-minded individual judges can ear-nestly disagree on how the law should be applied to Captive Insurance Agents.

For the most recent developments in the Jammal v American Family case you can visit the Class Action website, www.americanfamilyclassaction.com

The dissenting opinion starts on page 19 of the Sixth Court of Appeals Decision found here, http://www.americanfamily-classaction.com/case-documents.aspx.

For more information or a confidential meeting in your area:

JEFF WILSON 877-452-5476 (toll free) [email protected]

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