Florida Association of Insurance Agents

IN THIS ISSUE:

Football season is getting close and FAIA is pleased to announce that we will be offering two free CE classes (plus free breakfast) at our office in Tallahassee on two weekends when the FSU Seminoles play in town.

Mark your calendars now for September 18, for FSU vs. Brigham Young University and November 27, for the big game of "Noles vs. Gators!" While the exact schedule is subject to change based on kickoff times, here is what we have planned:

September 18, at 8:00 a.m. show up at the FAIA office for a free breakfast, cooked for you by FAIA staff. From 9:00 a.m. until 11:00 a.m. I'll be presenting my class titled, "Rental Cars - More Than Meets the Eye." Click here to register.

Then on November 27, it's the same basic schedule. That day, however, I've specially created a "football & college kid themed" CE class titled, "Don't Fumble These Coverages." Rumor has it that the Atlantic Coast Conference will be sending one of their referees to the class and he will be available to answer your football rules questions prior to and after class. Click here to register.

It's our way of saying, "Thanks for your membership." Space is limited for both classes so sign up now. Plan to come by for breakfast and quality education and still have plenty of time for your personal tailgate party!

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Those of you who have taken FAIA's "Suitability of Annuity Sales to Seniors" CE class (course ID #70519, authority CE 9911 - Senior Suitability) may recall our discussion regarding the issue of whether equity indexed annuities are considered a security, to be regulated by the Securities and Exchange Commission (SEC), or insurance, to be regulated by the individual states as fixed annuities are now. We discussed how on June 25, 2008, the SEC proposed and later adopted Rule 151-A, which declared EIAs to be regulated as a security effective January 12, 2011.

Shortly after the ruling, the National Association of Fixed Annuities (NAFA) and the Coalition of Indexed Annuities filed a lawsuit protesting the SEC's decision. Jump ahead to July 12, 2010, when the federal court vacated the rule. Then, on July 15, the U.S. Senate passed the Financial Regulations Bill, which, among other things, prevents the SEC from declaring regulation over EIAs.

The reasons for the court's ruling and the Senate bill passage make compelling reading, but suffice it to say that grassroots efforts and NAIC (National Association of Insurance Commissioners) influence carried the day.

The bottom line for life agents is that the sale of EIAs will not require a securities license as issued by the Financial Industry Regulatory Authority (FINRA), thus allowing life licensees to continue to sell EIAs alongside fixed annuities in terms of regulation—at least for the time being. These types of issues are always fluid in nature, so life agents should "keep their ears to the ground."

Regardless of the ruling, just remember that the sale of EIAs still falls under the requirements that life insurance agents must adhere to the rules of determining suitability of the product for their senior clients, and that a comparison of products must be performed for the client(s) in cases of replacement. Both of these activities require the use of specific forms as provided by Florida's DFS.

If you're a life agent and need the three-hour CE class "Suitability of Annuity Sales to Seniors" offered by FAIA, or you're simply interested in the rules for determining suitability for senior clients, click here to register.

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FAIA staff and agent volunteers recently returned from our annual Planning Session in Palm Beach to discuss many topics, one being InVEST. The InVEST Task Force met to discuss future needs and ideas to continue to improve InVEST's developing insurance talent to meet the needs of agents for years to come. One of those needs is to develop a pool of insurance professionals from agencies and company partners that will make a difference by volunteering in the classroom.

As many of you know InVEST has partnered with the Young Agents Council (YAC) to help fill that need, but they cannot do it alone. We need all insurance professionals to make a difference. If you already volunteer, please accept our thanks. But if you do not, please consider stepping up as you will make a difference. Florida InVEST is the leading program in the country and we want to keep it that way; volunteering is the key to staying #1. InVEST continues to add high schools each year, so the need for additional volunteers is a high priority.

Shortly, we will issue a press release with this year's InVEST scholarship winners for Florida. The national InVEST program awarded over $56,000 in scholarship dollars with the majority of the recipients in Florida. That speaks volumes about Florida InVEST; however, we need to keep moving the program forward. Please reach out to volunteer by contacting your Local Board, Young Agents Council, or me to get involved in this great program. FAIA and IIABA also have InVEST information on our websites. Please consider volunteering your time to these young people; it will benefit our agencies and our industry. Click here to learn more about InVEST.

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Management help, including sample job descriptions, training manuals, office organization, and hiring practices, is available on FAIA's website. Just click on the "Ops in a Box" logo on the left. While you're there, check out all the topics and learn how to run your agency better! This section is frequently updated as we discover new and better information. Remember, you'll need to log in; this valuable resource is for FAIA members only!

What does your grandfather have to do with the National Flood Insurance Program (NFIP)? Probably nothing, unless he somehow was associated with the insurance industry!

While your grandfather may not have dealt with flood insurance, the concept of "grandfathering" does relate to flood insurance. By understanding this issue, many consumers can "lock in" (grandfather) an old map or old Base Flood Elevation (BFE) as flood maps change around the country. That can mean substantial premium savings for them, at times.

We've added an article to our Education Library titled, "Grandfathering and the NFIP" and it's available by clicking here. It's great reading material, and if you are fortunate enough to still have your grandfather around, show it to him, too!

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I was driving to work the other day while listening to a local talk radio. The subject was how far off the hurricane predictors have been. Later that day, I read an article that stated if the hurricane season wants to live up to expectations it needs to put it in high gear. I was amazed at the talk of the predictions not on pace or the disappointment of the "slow season" so far. These complainers definitely did not live in Florida in 2004 and 2005, because they would welcome a slower-than-predicted season. As you know, many of the major storms to strike Florida, did not appear until late August (Hurricanes Andrew and Charley), September, (Hurricane Ivan), October (Hurricane Wilma), or even November (Hurricane Kate). With about three months left in the 2010 season, we need to be ready as if it were the first day of the season. So, if you haven't, take time to look at FAIA's Disaster Command Post or volunteer to help your fellow agents if the need arises. If you have any questions about volunteering or FAIA's Agency Catastrophe Task Force, please contact me at jodom@faia.com.

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Utility Services. Recently a question was asked involving the utility services exclusion and how the direct and indirect endorsement options work. For a quick overview of the exclusion, which creates the need for these endorsements, check out FAIA's Community Commercial Insurance Miscellaneous Help Forum.

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by Melissa Champany, CCSR, API

What do you see when you look toward your future? Did you intend to be in the insurance industry or did your career just "fall in your lap?" Or, perhaps, insurance is your second career. Whatever the case, Florida's Future Insurance Leaders (FFIL) may be the program to help you achieve and surpass your goals. This two-year long program (now, doesn't that sound daunting?) is an advanced leadership immersion program focusing on education and mentorship that affords you access to FAIA Board meetings; attend FAIA's Legislative Fly-In, Convention, and Planning Session; learn more about catastrophe planning; and much, much more. FFIL applications are being accepted now for the new class starting December.

Thanks to everyone who participated in this year's SmartStart4Kids. It was a phenomenal success. We collected nearly $30,000 worth of school supplies for underprivileged children and garnered some positive publicity for our industry (not that we collected the supplies for the publicity, but it was a nice side effect). We owe a special thanks to our company sponsors—American Integrity Insurance Group; Auto-Owners Insurance; Gulfstream Property & Casualty Insurance Company; Progressive Insurance; Tower Hill Insurance Group, Inc.; and United Property & Casualty Insurance Company. Additionally, YAC Zone 6 with 17,750 points and Franklin Street Insurance Services, LLC, in Tampa with 11,167 points took this year's YAC awards for collecting the most supplies overall. Congratulations to all involved.

And, as we near the close of our 2009/2010 fiscal year, FAIA's YACs have held steady with nearly 300 members. This has been the case for the past few years. However, we'd really like to increase our numbers. We will discuss what you want and need from your YAC membership during our task force meetings at FAIA's Planning Session. If you weren't able to attend and have specific comments about the programs we've prepared the past couple of years, send me an email at melissac@faia.com.

In closing, keep in mind these upcoming dates:

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DISCLAIMER All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the prior written permission of the Florida Association of Insurance Agents.

NOTE: FAIA is not in the business of giving legal advice. Whenever questions arise, agents are urged to seek the counsel of a competent attorney licensed in Florida and familiar with the Florida Insurance Code.

Please note that all coverage analysis done by FAIA is based on standard ISO forms. Many carriers in Florida file their own forms with the OIR, some of which are derivations of ISO and some that are unique. It is imperative that you carefully read your carriers' forms to make an informed decision about coverage questions.