The South Shore Independent Insurance Agents Association is a continuation of the old Braintree, Weymouth and Quincy Agents Associations, founded in 1970. “The purpose or focus of the meetings is for local independent agents to share ideas on numerous industry topics,” says Frank Douglas, a 2012 member of the association and the proprietor of W.G. Bridges & Sons Insurance in Weymouth. “The association gives members a change to openly discuss what we see individually and collectively in the industry that has meaning to our agencies.”
For example, each month, the SSIAA holds an early breakfast meeting from 8:00am to 9:00am which includes a different speaker from the Massachusetts insurance industry. Insurance Commissioner Joseph Murphy spoke to and fielded questions from a full-house of agents that included representatives from The Murphy Insurance Group of Braintree, H.R. Hatch Insurance Agency and Brownstone Insurance both of Boston, as well as the 2012 members agencies of the SSIAA.
While the association is open to all insurance-related businesses, members generally are from the South Shore area. Douglas stresses, however, that meetings are open to anyone and non-members are more than welcome.
2012 will be a year of reorganization at The Division of Insurance
Commissioner Murphy started off the morning by introducing Karen Blomquist who is the DOI’s new Deputy Commissioner for Communications & Operations. He informed agents that during 2012 the DOI will be undergoing a department-wide reorganization that will focus on bringing more efficiency and transparency to the agency. As such, Producer Licensing will now be under the ambit of Ms. Blomquist’s duties.
As the Division strives to become even leaner and efficient, Commissioner Murphy also noted that a recent National Association of Insurance Commissioners study showed that the DOI is already a good deal for the state. In fact, it turns a profit for the Commonwealth’s coffers. In 2011, the DOI actually earned $13.5 billion from assessments and fees from the insurance industry for the state. In addition, the Massachusetts Division of Insurance ranks 53rd in the U.S. (including all 50 states and US territories) in terms of the average resources used by its staff of 118 employees all-the-while being the 10th largest insurance market in the country with the 14th largest population.
2011 showed the importance of insurance and the dangers of being under-insured
With four separate catastrophic events last year, including the major tornado which hit Central and Western Massachusetts, 2011 was unfortunately a year in which many insureds understood why having the proper insurance coverage matters. The Commissioner told the agents that total claims from the tornadoes last year now number around 1,900 and have topped the $200 million mark.
Overall as a result of this and the other catastrophic events which have hit the Commonwealth, the Division has been collecting information from the industry in order to assess the aftermath of these events and more importantly said Murphy to better understand the issue of under-insurance. The goal of this effort is to evaluate what happened in 2011 in order to encourage consumers to think about insurance and the importance of having proper limits.
The rate hearing processes should be depoliticized
Commissioner Murphy also commented on the fact that two proposals for rate hikes had come to the Division of Insurance this year from both the Massachusetts Property Insurance Underwriting Association and the Worker’s Compensation Rating & Inspection Bureau.
The Mass FAIR Plan is requesting that the Commissioner approve a 7.4 percent increase in its homeowners insurance rates and an even higher increase for the coastal areas. Murphy who hinted that the homeowner’s market was due for a restructuring similar to the auto insurance marketplace in 2008, said that he and his team are reviewing the tools used in evaluating homeowner’s insurance, particularly the integrity of the hurricane models and whether they are appropriate for the New England area.
The WCRIB has requested a 19.3 percent rate hike beginning in September 2012. While the Commissioner said he couldn’t comment on the actual issue prior to the hearing, he felt that overall the worker’s compensation market in Massachusetts has made great strides resulting in many benefits to workers. He did contend, however, that the whole rate hearing process could be improved upon and that in his opinion it would be beneficial to all to depoliticize the process somewhat.
A reminder that Agents must comply with their Continuing Education requirements
Before opening up the meeting to questions, Murphy mentioned the Division of Insurance’s effort to bring agents into compliance on their continuing education credits. For those agents who do not know, the DOI issued a Bulletin last year after doing a long-overdue audit to see whether agents are in compliance with their Continuing Education requirements. Based on the results, the DOI gave agents until December 31, 2011 to come into compliance. Murphy said that while the statute concerning this issue is pretty antiquated, compliance is a necessary evil and he and his staff had tried to come up with the most reasonable approach possible to solving this problem.
During the Question & Answer period an agent voiced his frustration over the licensing process and the complicated and labor-intensive nature of the varying licensing processes from state to state. Commissioner Murphy noted that Massachusetts is now tying into the National Insurance Producer Registry (NIPR) system and that he personally found it frustrating that agents still had to file a paper application for a license in the state. He said the Division is reviewing regulations and would like to make the entire licensing process easier and more efficient for agents and their agencies.
Another agent commented on what he considered the dubious practices of direct writers in the state. Ultimately, the Commissioner said, it is up to the DOI to help consumers to better understand that the marketplace has changed and that they have more personal responsibility in deciding what type of insurance to buy. “Insurance isn’t sexy,” said the Commissioner and so it is not something people want to focus on and learn more about until it’s often too late. Commissioner Murphy said the Division has to do a better job in informing consumers that the marketplace has changed and that consumers need to understand what types of insurance are out there in order to make the most informed choice.
Next month’s SSIAA keynote speaker will be Attorney Owen McGowan. Agents interested in attending may contact Bill Cordaro, of the A. Gordon Insurance Agency.
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