January 24, 2013 In this Issue ...

MAIA News: 1 • MAIAFilesComplaintAgainst GEICOwithDOI&MRB

Comp. Corner: 2 •“StopWork“Ordersan IssueAgain

Member Milestones: 2 •G&NAgencyTurnsThree

projectcap News: 3 - 4 •What‘stheDealwith Twitter?

Long Term Care News 3•MAIAOfferingState- MandatedEightHourLong- TermCareTraining

E&O Loss Control: 4 - 6•DoInsuranceAgentsHaveaDUTYTOADVISE?

Thanks Company 6Partners

ACT News: 7 • RegisterforUpcoming FREEACTWebinars

• ACTandAUGIEUrgeIndustry toEmbraceKeyTechnology Priorities

MAIA News:MAIA Files Complaint Against GEICO with DOI and MRB ...

MAIAhasfiledaformalcomplaintwithbothDivisionofInsurance(DOI)andtheMeritRatingBoard(MRB)allegingthatGEICOhasfailedtoreportatleastone at-faultaccidenttotheMRBasrequiredbystateregulation.MAIAhasreportedthespecificsoftheclaiminquestiontotheMRBforreview,buttheMRBislookingtotheDOIforguidanceininvestigatingthematter.

ThisisnotthefirsttimethatGEICOhasshirkeditsreportingresponsibilities.Previously,GEICOdidnotreportnewpolicyinformationtotheRegistryofMotorVehicles‘UninsuredMotoristSystem.Thisfailuretoreportnewbusinessresultedinthecancellationofthepriorpolicyfornon-paymentand,insomecases,revocationoftheconsumer’sregistrationandplates.

MAIAhasprovidedtheDOIandtheMRBwithevidencethatGEICOhasonatleastoneoccasionfailedtonotifytheMRBofanat-faultaccidentinvolvingoneofits policyholders.Acompany’sfailuretoreportat-faultaccidentinformationtotheMRBcouldresultinafineofnotmorethan$500foreachviolation.MAIAhasrequestedthattheDOIandtheMRBinvestigatenotonlythespecificcaseweoutlinedbutalsorequireGEICOtoprovideproofthat,withtheexceptionofthiscase,GEICOisincompletecompliancewiththereportingrequirements.

IntheletterofcomplainttotheCommissioner,MAIAnotedthatunder“managedcompetition“somecompanieshavean“accidentforgiveness“factorwherethepolicyholderdoesnotreceivesurchargepointsforthefirstat-faultaccident;however,theexistenceofaforgivenessfactorinacompany‘srateandformfilingdoesnotrelievethecompanyfromtheresponsibilityofproperlyreportingat-faultaccidentdatatotheMeritRatingBoard.“

InOctober2012,CommissionerMurphyclarifiedtheat-faultaccidentclaimreportingrequirementsprescribedinregulation211CMR134.04forcollisionandlimitedcollisioncoverageswhena“disappearingdeductible“isappliedtoalossbyreiteratingthattheregulation“requiresthatinsurersreportcollisionandlimitedcollisionclaimsresultingfromanat-faultaccidenttotheMRBifthereisaclaim paymentofmorethan$500inexcessofanyapplicabledeductible.AccordingtotheCommissioner‘sletter,thereferenceto“applicabledeductibleor“vanishingdeductible“inthiscontextreferstothedeductibleoptionpurchasedbythe policyholder.

MAIAnotedthatunder“managedcompetition“somecompanieshavean “accident“forgiveness“factorwherethepolicyholderdoesnotreceivesurchargepointsforthefirst-at-faultaccident;however,theexistenceofaforgivenessfactorinacompany‘srateandformfilingdoesnotrelievethecompanyfromthe responsibilityofproperlyreportingat-faultaccidentdatetotheMeritingRatingBoard.“

TheMAIAcomplaintaddedthatadrivingrecordwhichisaccurateandcompleteistheonetruepictureofaperson‘sdrivinghistoryandpolicyeligibility.Atfaultaccidentinvolvementandconvictionofmovingviolationsarecrucialtoeverycompany‘sratingandunderwritingprocess,andeverycompanyhasa responsibilitytoreportproperly.

Comp. Corner:“Stop Work Orders" An Issue Again ...

Lastspringafterarashof“stopworkorders“(SWO)wereissuedbytheDepartmentofIndustrialAccidents(DIA)basedonnothavingasecondarylocationlistedonaworkers‘compensationpolicy,MAIAandtheWorkers‘ CompensationRatingandInspectionBureau(WCRIB)workedwiththeDIAtoagreeonaproceduretobefollowedbytheDIAwhenfacedwithalocationissue.Theprocedureappearsbelow:

PartofthediscussionsamongtheDIA,MAIAandtheWCRIBwasanagreementthateachlocationofaninsureddoesnothavetobelistedonthepolicysolongas“Massachusetts“islistedin3Aofthepolicy.If“Massachusetts“islisted,alllocationsandallemployeesoftheinsuredarecoveredunderthepolicy.However,whiletheDIAagreeswiththisposition,itwill“respectthepositionoftheinsureriftheinsurerdeniescoverageforanunlistedlocation.“Assuch,thebestadviceistoremindyourworkers‘compensationclientsthatiftheyopenanewlocationtheyshouldadviseyouinadvancesoyoucanhavethelocationaddedtothepolicy.

ThecurrentDIAenforcementproceduresinvolvingsecondary,tertiaryorotherpermanentlocationsofemployersoperatingintheCommonwealthundertheprovisionsofanactiveMassachusettsWorkers’Compensation insurancepolicyareasfollows:

1. Theaddressandlocationonthepolicywillalwayscontrolthedecision.Thismeansthattheaddressand locationonthepolicyisthemainbusinesspremiseslistedinthepolicyandthereforeemployeesatthatlocationwillbecovered.Otherlocationswillbelookedatwiththatbasicfactbeingestablished.NoStopWorkOrderwouldeverbeissuedwithoutfirstconductinganinvestigation.

2. Temporaryworksitesawayfromtheinsuredmainbusinesspremisesarenotconsideredtobeadifferent permanentlocationforthepurposeofdeterminingcoverage.The“insuredmainbusinesspremises”,willbethelocationlistedinItem1ofthepolicyinformationpage.Atemporaryworksiteisanylocation,notshowntobeapermanentplaceofwork,andfromwhichtheworkersoftheinsuredwillreturnatsometimeinthefuture.

3. Whenfacedwithapotentialmultiplelocationsissuetheinvestigatorwillcontacttheinsurancecarriertode-terminewhethertheemployeesattheadditionallocationarecoveredundertheemployer’spolicy. ContactingtheinsurancecarrierisacrucialpartoftheinvestigationandwillbedonebeforeanyStopWorkOrderisissued.

Intheeventtheemployerattheadditionallocationisadifferentanddistinctlegalentityfromtheemployerlistedonthepolicy’sinformationpagetheinvestigatorshallemploythesameprocedureonthisotherlegalentityandshallonlyissueastopworkordertothatotherentityintheeventheconfirmsnocoverageexistsfortheemployeesoftheentityattheotherlocation.Thedifferentanddistinctlegalentitywillhavetoshowco-verageunderaseparatepolicyofitsownorprovideproofthatitisproperlycoveredbythesamepolicyissuedtotheemployerlistedonthepolicyinformationpage.

Ifyouhaveanyquestionsaboutthispolicy,pleasecontactFrankMancini,PresidentandCEOofMAIAorDanFoley,VPofGovernmentAffairs&GeneralCounselat800.972.9312or508.634.2900orbyemailat fmancini@massagent.com ordfoley@massagent.com.

Member Milestones: G & N Insurance Agency Turns Three ... What‘s So Special About That?

AccordingtoG&NInsuranceAgencyco-ownerMattNaimoli,LUTCF,ALOT!Here‘swhatMatthadtosayabouthisandpartnerZackGould‘syoungagency:“MybusinesspartnerandIstartedouragencyfromscratchinJanuary2010afterleavingadirectwriterthatweworkedatforthreeplusyears.Wejusthitourthree-yearanniversaryforthecompanyandhavegrownorganicallyveryfast.Wearethesizethatmany30+yearagenciesare,andwearefarfromslowing.Wehaveagreatgroupofemployeesandfeellikeweutilizetechnologyandsocialmediatocontinuetopushusaheadofthecurve.Needlesstosay,weareveryproudofouroperationandexcitedforwhatthenext3yearshaveinstore!“

CongratulationsMatt,ZackandG&NInsuranceAgency.Yoursistrulyarefreshingstorytohear,especiallyduringatougheconomicclimate.WeatMAIAwishyoumanyhappyreturns.

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projectcap News: What’s the Deal with Twitter?

written by Dave Wencel

AsanaccountmanagerwithProjectCAPIgettotalkwith independentinsuranceagentseverydayaboutInternet marketingandcreativenewwaystheycanusedigital communicationstohelpgrowtheirbusinesses.Withoutquestion themostconfoundingaspectofInternetmarketingIhearishow toleveragesocialmedia.Morespecifically,Twitter.

Tobehonest,I’vefoundTwittertobeahardplatformtogetmyhandsaroundaswell.Itseemslikeaplacewheremillionsofpeopleare“tweeting”outmessagesthatnooneislisteningtoorcaresabout.ItwaswiththisinmindthatIdecidedtoresearchwhatpeoplearesayingabouteffectiveusesofthispopularandgrowing communicationplatform. What Exactly Is Twitter?Inanutshell,Twitterisareal-timemicro-blogwherepeoplecanpostshortmessagesupto140characters.Itspurposeisforpeopletoshare(tweet)shortthoughts,events,newsstories,reviews,informationfromthoughtleaders,etc.Tweetsyoupostgoouttopeoplewhohavechosentofollowyou(followers),whileyoureceivetweetsfrompeopleyouarefollowing.Thegreaternumberoffollowersyougenerate,thegreaterwillbeyouraudience.

ThinkofTwitterasbeinglikeagiganticcocktailpartywhereinformationandstoriesarefluidlyexchanged.Millionsofguestsaroundtheworldgatherandtweetideas,followalongandshareinconversationsthatinterestthem.OneextremelyimportantthingtorememberwithTwitteristhatitisatwo-waystreet.It’sbothofferingideasandlisteningtoothers.Backtothecocktailpartyanalogy,nobodywantstogetstuckwiththeguywhogoesonandonabouthimself.Help–getmeoutofhere!Andatthispartyitcouldn’tbeeasiertostepawayfromtheconversation.

Peopleappreciatewhenotherslistento,respectandconsidertheirthoughts,needsandfeelings.SamegoeswiththeTwittercommunity.Youwillfindthemoreyoulistenandmakementionofothers’ideas(tweets),thefasteryourcommunityoffollowersandchampionswillgrow.

Twitter EtiquetteHereareafewbestpracticesreferencedbyTwitter.

4 Share –Sharephotosandbehindthescenesinfoaboutnotonlyyourbusinessbutalsothecommunity.

4 Listen –Monitorcommentsaboutyourcompany.

4 Ask–Questionscanhelpgainvaluableinsightsfromyourcustomers.

4 Respond–Alwayscomplimentothersfortheircomplimentsandfeedback.

4 Reward–Tweetupdatesaboutspecialoffers,discountsanddeals.

4 Demonstrate leadership and know-how–Referencearticlesandlinksaboutthebiggerpictureasit relatestoyourbusiness.

4 Champion your stakeholders –Retweetandreplytoyourfollowersandcustomers.

4 Establish voice –Twitteruserspreferadirect,genuineandlikabletonefromyourbusiness.Thinkabout yourvoiceasyoutweet.HowdoyouwantyourbusinesstoappeartotheTwittercommunity?

ThereareaninfinitenumberofwaystouseTwitter,frombuildingyourbrand,generatingleadsandrecruiting,tokeepinguponindustrytrends,communitynewsandimportantinformation.

I’veincludedafewarticlesyoumightwanttocheckoutonbusinessusesforTwitter:

4 “80 Ways to Use Twitter” asasmallbusinessowner,byLisaBarone.

4 “5 Ways I Use Twitter as an Insurance Agent”containssomegreattipsyoucanuseatyouragencyfrom RyanHanley,arisingstarintheinsuranceindustry.

IfI’vehearditonceI’vehearditathousandtimes:“Dave,Ijustdon’tseehowTwittercandoanythingforusintheinsuranceindustry.”(Theprevioussentenceisthemaximumlength ofatweet–140characters.)

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projectcap News ... continued from page 2

4 “Top Ten Hashtags for the Car Insurance Industry on Twitter.”Hashtags(#)serveasathemeforyour tweet.Usingthemwillmakeyourmessagesearchablebypeoplelookingfortopicsofsimilarnature. JessicaDunlapofferssomegreattipstohelpyoustandout.

4 Finally,TwitterhasaPDFentitled“Handbook for Small Business.”

Twitterisanotherarrowinyourquiverasanagencytotakeadvantageofsocialmediaasamarketing/advertisingtool.Itisnottheend-allforyourmarketing,butitdoesprovideanotherwindowtogetyourmessageouttoyourcommunity.Maybemoreimportantly,Twitterwouldappeartobeaplatformthatisgoingtocontinuetogrowinnumbersandutilization,sogettingtappedintoitnowisagoodidea.Contact me to talk about the possibilities.

Goodluckandhappytweetingin2013!

Long-Term Care Insurance News: MAIA Offering State-Mandated Eight Hour Long-Term Care Training ...

EffectiveJanuary1,2013theplayingfieldhaschanged.AllProducerswho“market”longtermcareinsuranceinMassachusettsarenowrequiredtocompleteaninitialone-timeeighthourcoursefollowedbyafourhourrefreshercourseeverytwoyears.

TheDivisionofInsurancehasappliedaverybroaddefinitionoflongtermcareinsurancethatincludes:• stand-alonelongtermcareinsuranceproducts• lifeinsuranceandannuityproductswithlongtermcarebenefits• lifeinsuranceproductsthatallowaccelerateddeathbenefitstopayforlongtermcare.

MassAHUandMAIAhaveteamedupsothatyoucangetthisrequirementunderyourbeltassoonaspossible.SignupfortheeighthourclassnowandbeoneofthefirstProducersinthestatetobeincompliance.

New Mandate in Summary: • MassachusettshasnowadoptedtheNAICproducertrainingrequirements.• ExistingProducers(licensedbefore1/1/13)mustcompletetheinitialeight-hourtrainingby7/1/14.• NewProducers(licensedafter1/1/13)mustcompletethetrainingbeforesellingLTCinsuranceinMassachusetts.• Aftertheinitial8-hourtraining,a4-hourrefreshercoursewillberequiredevery24months.

State Mandate:OnOctober25,2012,theDivisionofInsuranceenactedChapter312oftheActsof2012aspartofSenateBill2359.Chapter312createsanewChapter176UoftheGeneralLaws,aswellasotherstatutoryprovisions,thatapplytotheofferorrenewaloflong-termcareinsuranceproductsintheCommonwealthonandafterJanuary1,2013.

Section6ofM.G.L.176Ucreatesnewtrainingrequirementsforthoseproducersmarketinglong-termcareinsuranceproducts,includingthecompletionofaone-timeeight-hourcourseandatleastfourhoursofongoingtrainingevery24months.Producerscurrentlymarketinglong-termcareinsuranceproductshavetosatisfythisone-timeeight-hourtraining requirementbyJuly1,2014andthencompletetheongoingtrainingrequirementofatleastafour-hourtrainingprogramevery24monthperiodbeginningthedayfollowingthecompletionoftheone-timetraining.

Class Topics:1. ReviewChapter312oftheActsof2012“AnAct

EstablishingStandardsforLong-TermCareInsurance”2. LongTermCareIndustry3. TypesofLongTermCare4. RiskFactorsforLongTermCare

DATE LOCATION CITY GL # MEMBERS NON-MEMBERS

3/27/13 AssociationHeadquarters Milford,MA 247547 $95.00 $190.00

4/17/13 HolidayInn Tewksbury,MA 247546 $95.00 $190.00

6/13/13 HamptonInn Chicopee,MA 247549 $95.00 $190.00

10/17/13 ComfortInnRandolph Randolph,MA 247550 $95.00 $190.00

12/11/13 CapeCodResortand Hyannis,MA 247552 $95.00 $190.00 ConferenceCenter

5. SettingWhereCareisDelivered6. CostofLongTermCare7. FundingforLongTermCare8. Suitability9. TrendsinLongTermCare

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E&O Loss Control:

DaveGarner,SeniorVicePresidentofSwissReclaims,askedtheHassettLawFirmofPhoenix,Arizonatoprovideastate-by-stateanalysisofinsuranceagents’dutytoadvisesothatthestandardofcare,andanyassociatedliabilitytrends,couldbebetterunderstoodonanationallevel.Toaccomplishthis,MylesP.Hassett,Esq.andJulieK.Moen,Esq.researchedthelawinall50statesandWashingtonD.C.,withassistancefromSwissRelawyerspracticingineachjurisdiction,andproducedacomprehensivereviewofapplicablestandards.LucasN.Frank,Esq.ofthe HassettLawFirm’sAlbuquerque,NewMexico,officealsoassistedinthecompilationofthesummary.

Consumersexpectindependentinsuranceagentstobeknowledgeableandprofessional,andincreasinglyrelyonthoseagentstoobtainthemostappropriatepolicybasedontheirinsuranceneeds.Statesalsomandatethe minimumlevelofknowledgeandabilitytheiragentsmustexhibitthroughstatutesandregulationsthatgovernagentlicensing,solicitationandsales.Yetdespiteconsumerexpectationsandahighlevelofregulation,thelawinmoststatesdoesn’tautomaticallyconsiderinsuranceagentstobe“professionals”withadutytoadvisetheircustomers,similartoattorneysoraccountants.

However,inthecontextofadutytoadvisethecustomer,thereisadifferencebetweenwhatthelawrequiresandwhatbestpracticesdictate.Legalrequirementsestablishminimumstandardsforagentconduct,whilebestpracticesgobeyondmerecompliancewiththelawandemphasizeahigherlevelofperformance.Thedutyto advisecustomersabouttheirinsuranceneeds,whenitapplies,providesagoodexampleofthedifference betweenlegalstandardsandbestpractices.Asoutlinedbelow,differentstateshaveestablisheddifferentlegalstandardsforwheninsuranceagentshaveadutytoadvise.However,bestpracticesgenerallyrequirethat independentagentsadvisecustomersabouttheircoverageneedssothattheirchoicesareproperlyguidedintheincreasinglycomplexworldofinsurance.Asapracticalmatter,offeringcoveragetomeetallofthecustomers’insurableexposureshelpstoavoidE&Oclaims,whilealsomaximizingpotentialagencyrevenue.

Thelegalstandardsforestablishinganinsuranceagent’sdutytoadvisedifferfromstatetostate.Somestateshold agentstoaprofessionalstandardofcarethatincludesanaffirmativedutytoadvise.Attheotherendofthespectrum,afewstatesuseanorder-takerstandardthatimposesonlyanobligationtoprocurerequested coveragewithoutanydutytoadvise.Thevastmajorityofstatesapplyatestthatrequiresfindinga“special relationship”beforeanydutytoadvise willbeimposedontheagent.Thesestatescanbecategorizedintojurisdictionsthatmakeitmoreorlessdifficulttoestablishthepredicate“specialrelationship”beforethedutytoadvisearises.Belowisamapthatshowshoweachstateregardsthedutytoadvise.

Do Insurance Agents have aDUTY TO ADVISE?

A summary of the law governing insurance agents’ obligations to advise their customers.By Myles P. Hassett, Esq. and Julie K. Moen, Esq.

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1. The General Rule: Agents Must Use Reasonable Care,

Skill and Diligence.Areviewofthelawinthe50statesandWashington,D.C.revealsthatagentsacrossthenationhaveasimilargeneraldutytotheir customerstousethedegreeofcare,skillanddiligencethatareasonableinsuranceagentwouldinthesameorsimilarcircumstancestoprocuretheinsurancerequestedbythecustomer.Iftheagentcannotprocuretheinsurance,theagenthasadutytonotifythecustomerofthisfactinatimelyfashion.

Absentaspecialrelationship,thegeneraldutyofcareinmoststatesdoesnotincludeanaffirmativedutytoadvisecustomersaboutadditionaltypesandlimitsofcoverage.Acustomer’srequestfor“full”or“sufficient”coveragerarelycreatesthekindofspecialrelationshipthatimposesupontheagentadutytogiveadviceaboutthetypesandlimitsofcoverageavailable,althoughsomecourtsrequireagentstoclarifythecustomer’srequestinthosecases.

2. Professional Standard of Care

States.Afewstateshaveadoptedarelativelystringentstandardofcare,inrecognitionofthefactthatagentsplayanadvisoryrolesimilartothatofanattorneyoraccountant.Inordertocom-plywiththestandardofcareinAlabama,Arizona,IdahoandNewJersey,anagentmustinformthecustomerabouttheexistenceandadvisabilityofadditionaltypesandlimitsofcoverage.

TocomplywiththestandardofcareinMarylandandWashingtonD.C.,agentsmustadvisetheircustomersaboutothertypesofavailablecoverage.However,absentaspecialrelationship,insuranceagentshavenodutytoadvisetheircustomersabout

obtainingadditionallimitsof coverage.

Pennsylvaniasplitsthedutybylineofcoverage,requiringagentstoadvisepersonallinescustomersaboutothertypesandlimitsofcoverage.But,absentaspecialrelationship,agentshavenodutytoprovideadvicetocommerciallinescustomers.

Threestates-Maryland,MichiganandNevada-alsodividethedutiesofvariousinsuranceprofessionalsbylicensinginsurancecounselorsseparatelyfrominsuranceagents.Counselorsarepaidspecificallytoreviewacustomer’sinsuranceandprovideinformationandadviceaboutadditionaltypesorlimitsofcoveragethatwouldbestsuitthecustomer’sneeds.

3. The “Special Relationship” Test.Manystatesagreethattoimposeablanketaffirmativedutyonagentstoadviseabouttypesandlimitsofavailablecoveragewouldrewardinsuredsfortakingan“intellectual”gamblepurchasinglessinsu-rancenow(forlessmoney),thenlaterclaimingtheywouldhavepurchasedbetter(andmoreexpensive)coverageifonlytheagenthadadvisedthemtodoso.Thisremovestheburdenfrom insuredsfordeterminingtheirownbestinterestsandturnsagentsintofinancialguidancecounselors.Asamatterofpublicpolicymoststatesthus requirethattheinsuredfirst establishfromthecircumstancesthattheagent-customerrelationshipwas“special”beforeanydutytoadvisecanarise.Courtsgenerallydefine“specialcircumstances”asincludingoneormoreofthefollowingfactors:1)theagentagreestoadvisethecustomer;2)theagentacceptsadditionalcompensationbeyondthepremiumfortheadvice;3)a(long-term)courseofdealingbetweentheagentandcustomerinwhichtheagentisonnoticethatthecustomerseeksandreliesupontheagent’sadvice;

4)theagentholdshimselfoutasanexpertandthecustomerreliesonthatrepresentation;5)the customerspecificallyrequestsadvice;and6)theagentmakes representationsaboutthecoverageuponwhichthecustomerrelies.Thestateswithnoaffirmativedutytoadvise,absentaspecialrelationship,fallintothreesubcategories:statesthattendtofindaspecialrelationship,stateswithnoclearpreferenceandstatesthatrarely(ifever)findaspecialrelationship.

A. States That Tend to Find aSpecial Relationship BetweenAgent and Customer.ThecourtsinFlorida,Louisiana,Minnesota,NewMexico,Ohio, SouthCarolina,Tennessee,TexasandWashingtonliberallyinterpretthefactswiththeintentionoffindingaspecialrelationship.SouthCarolinaalsorequiresagentstoexplainthecoverageandlimitationstocustomers.

SomeLouisianacasesassumealimitedfiduciarydutybetweenaninsuranceagentandtheinsured.ButLouisianahasnotheldthatinsuranceagentshavea“spontaneous”dutytoadvise,absentanagreementbytheagenttoadvisethecustomerortheagentholdingherselfoutasanadvisor.

InTennessee,anagentcannotomitorrejectcoveragebecausehethinkstheinsureddoesnotneeditorwillnotbenefitfromit.Instead,theagentmustofferthecoveragetotheinsured,adviseofits usefulness(ifany)andallowtheinsuredtodecide.

B. Independent View of theSpecial Relationship Test.Therearemanymiddle-groundstateswithnoclearpreferenceforfindingornotfindingaspecialrelationship.TheseincludeAlaska,California,Colorado,Connecticut,Delaware,Hawaii,Illinois,Indiana,Iowa,Kansas,Kentucky,Maine,Massachusetts,Mississippi, Nebraska,Nevada,NewHampshire,

7NorthDakota,OregonandSouthDakota.Illinoishasastatutorydutyofcarethatrequiresagentstouseordinarycaretoprocure,renew,bind,orplacecoverageforaninsured.

NebraskaandOregonrequireagentstoexplaincoverageandlimitstocustomers,butOregonhasnotyetruledonwhetheragentsmustadvisecustomersaboutwhichcoveragesorlimitstopurchase.

C. Conservative View of theSpecial Relationship Test.Somestateshaveconservativelysetahighbarforfindingaspecialrelationship,rarelyfindingthat thefactsestablishaspecial relationship.ThesestatesincludeArkansas,Georgia,Michigan, Missouri,NewYork,NorthCaroli-na,Oklahoma,Vermont,Virginia,WisconsinandWyoming.Infact,NewYorkcourtshaveyettofindtheexistenceofaspecialrelationshipestablishinganagent’sdutytoadvisehiscustomers.

Thesestatesalsogenerallyrequiretheinsuredtohavespecificallyrequestedtheinsurancesheclaimstheagentfailedtoprocure.A requestfor“full”or“adequate”coverage,orthe“bestcoverageavailable,”doesnotgenerally

createanobligationfortheagenttoseekoutorprocureaspecifictypeofinsuranceforthecustomer.

4. Order-Taker States.Somestatesdonotimposean affirmativedutytoadviseandmakenoexceptionforthe existenceofa“specialrelationship.”Instead,theagent’sonlyobligationistoprocurethecoverage requestedbythecustomerandtimelynotifythecustomeriftheagentcannotobtaintheinsurance.Eventheexistenceofafiduciaryrelationshipimposesnoadditionalduty,sothattheagentisstillonlyresponsibleforprocuringthecoveragerequestedbytheinsured.Theseorder-takerstatesareMontana,RhodeIsland,UtahandWestVirginia.Eveninthesestates,however,agentsmaybeliableiftheyprovideincorrectormisleadinginformation.

5. Conclusion.Ourresearchindicatesthatthegeneraltrendismovingtowardtheimpositionofprofessional standardsofcarebythecourts,guidedinmanyinstancesbytheuseofapredicate“special relationship”testbeforeimposinganaffirmativedutytoadvise.Prudentagentsarerespondingtothistrendbypromotingbestpracticesandawarenessofthe

For a list of the each state’s most pertinent cases, visit the Big “I” Risk Management Website www.iiaba.net/eohappens and click on “Standard of Care.”

insured’sneeds.Independentinsuranceagentsshouldaccordinglynotcontentthemselveswithminimally-compliantconductthatmerelysatisfieslegalstandards,butshouldinsteadaimtoprovideservicethatexceedsthesestandards,consistentwiththegoalsofearningandkeepingcustomertrustandconfidence.About the AuthorsMyles P. Hassett, was originally admitted to practice in Ireland and is licensed in Arizona and California. For over 20 years, Mr. Hassett’s focus has been on litigating the defense of claims against insurance agents and brokers. He has appeared as lead counsel in numerous ArizonaSupreme Court and Court of Appeals insurance cases, and has established leading precedent insulating agents from third-party liability.

Julie K. Moen earned her law degree from the University of Arizona in 2005. Ms. Moen practices with the Hassett Law Firm primarily in the area of insurance litigation and regulation. She is a memberof the Arizona State Bar and the American Bar Association.

The Hassett Law Firm, P.L.C.(www.hassettlawfirm.com) is an AV-rated civil litigation law firm with offices in Phoenix, Arizona and Albuquerque, NewMexico. Copyright 2010, The Hassett Law Firm, P.L.C. - All Rights Reserved.

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Upcoming WebinarsRegisterforUpcomingfreeACTWebinars.

Getting a Grip: How to manage your independent agency‘s social media(Friday,February15,1:00--2:00PMeasterntime) Socialmediahasprovidedmanyindependentinsuranceagencieswithapowerfulnewmarketing,communications& brandingtoolwhichispoweringgrowthforthem.Buthowdotheseagenciessuccessfullymanagetheirsocialmedia initiative?Thiswebinarwillprovide“bestpractice”advicefromagentsandotherindustryleadersonhowtosuccessfully manageasocialnetworkinginitiativeandprovideoptionsformakingsocialmediamanagementeasierforyouragency. Thisinteractivepanelofindustryexpertswillansweryourquestionsaroundsuchtopicsas:

• HowdoIbudgettimeonsocialmedia?• WheredoIgetcontent?• Whoshouldmanagemyfirm’ssocialmedia?• HowdoIprotectmyselffromnegativecomments?

Webinarparticipantsinclude:RickMorgan,AartrijkGroup,Moderator MikePeterson,ProjectCAPRyanHanley,TheMurrayGroup AngelynTreutel,SouthGroupGulfCoastChrisParadiso,ParadisoFinancialServices&Insurance MikeWise,WebWisedomLLCKatiePeet,StateAuto JeffYates,ACTExecutiveDirector,Host Pleaseclick heretoregisterforthewebinar.

ACT AND AUGIE LEADERS URGE INDUSTRY TO EMBRACE KEY TECHNOLOGY PRIORITIESJointEffortsFocusonIDFederation,RealTime,E-signaturesandSelf-serviceCapabilities

TheleadersoftheIndependentInsuranceAgents&BrokersofAmerica’sAgentsCouncilforTechnology(ACT)andACORD’sUserGroupInformationExchange(AUGIE)recentlyconcludedjointplanningsessionsandagreedtoworktogetherto advancefourimportantindustryprioritiesin2013:IDFederation,RealTime,e-signaturesandclientself-servicecapabilities.

ACTandAUGIEhaveworkedtogetheronnumerousissuesinrecentyearsandthisrecenteffortispartofthatcontinuingpartnership.

ThefourkeyprioritiestheAUGIEandACTleadersurgetheindustrytoworktogetherontoimplementin2013are:

• TosupporttheIDFederationandmovementtofederateddigitalidentitiestoreplacepasswords.Effortsareunderwaytoencouragevendorstobecomeidentityprovidersandthecarrierstosupporttheinitiative.ThedevelopmentofaneffectivedigitalidentityinfrastructureisalsolikelytoincreaseagencyuseofRealTimeandenableagenciestoprovidegreatercustomerfunctionalitythroughtheagencywebsite,suchastomakeapayment.

• ToincreaseagentandcarrieradoptionofRealTime.Thegroupsareencouragingcarrierstobuildouttheirtransactionsfollowingtheindustryrecommendedworkflows,sothatagencieswillhaveaconsistentexperienceacrosstheircarriers.ThisincludesincreasingtheuseofRealTimeforcommercialbusiness,includingprogramandE&Sbusiness,and supportingtheall-industryRealTimeDaytobeheldApril9,2013.

• Toencourageagenciestoincorporatee-signaturetoolsintotheirclientworkflowsandcarrierstosupporttheiragenciesemployingthesetools.Thegroupsalsoareseekingintegrationofe-signaturetechnologieswiththeagency managementsystems.

• Toenhanceagencies’abilitytoofferclientsselfservicecapabilitiesthroughtheagencywebsitewhichintegratewithcarrierfunctionality,suchastomakeapayment.

TheACTandAUGIEleadershipwillcontinuetomeetquarterlyandreviewtheprogressontheseindustrypriorities.