Weekly Dispatch: Feb. 22, 2024

February 22, 2024


Carrier do’s and don’ts: Commission cuts

To anyone who works in the insurance industry, it is clear that the marketplace is going through a period of transition. The increasing occurrence of severe weather, growing interest rates, and increasing replacement cost are a few of the drivers that are creating this transition—which is leading many carriers to change their underwriting appetites. For clients, this may mean increased premiums or policy cancellations. For agents, this may mean a reduction of commission levels. A common question is: Is an insurance carrier permitted to reduce agency commissions? Unfortunately, the answer is almost always yes. But, why can carriers do this? And what rights do agents have?

Gallagher: Nearly three-quarters of employers lack internal communicator AI protocols

According to a recent study from Gallagher in its 2023/24 State of the Sector report, 71% of organizations “do not provide internal communicators guidance on when, where or how to use [artificial intelligence].” In addition, half of the respondents were “skeptical or even fearful” about the applications of the technology. AI has the potential to reduce costs and save time, but the study’s findings stress that understanding the basic function and application of AI should come before anything else.

AP: Northeast should brace for more winter flooding due to climate change

Climate change has led to rising sea levels and warming ocean temperatures, meaning that flooding and storms along the northeast are becoming more frequent and destructive. Earlier this month a snowstorm brought flooding to Massachusetts and New Hampshire. The Associated Press reported that the communities in the region are bracing themselves for more devastating storms in the future: communities are starting to rebuild homes higher or choosing not to rebuild altogether and go further inland. For more information on the recent flooding, PIA Northeast members can access the PIA Flood Insurance Tool Kit.

NHID adopts the NAIC’s position on ESG

As the National Association of Insurance Commissioners address the ever-evolving Environmental, Social, and Governance policies in the insurance sector, the New Hampshire Insurance Department released a press release expressing support for the NAIC’s goals. The NAIC asserts it does not foresee implementing regulatory mandates to either require or prohibit insurance companies from adopting ESG policies. However, the organization emphasizes its ongoing efforts in addressing critical areas such as climate risk, racial equity in insurance, corporate governance, and other factors directly related to safeguarding policyholders and overseeing insurers’ financial well-being.

N.J.: Court rules against casino in COVID-19 business interruption claim

In the wake of the COVID-19 pandemic, the legal battles over business interruption claims took center stage in the property/casualty insurance industry. The latest example of these disputes is New Jersey Supreme Court’s ruling in the case of AC Ocean Walk LLC v. American Guarantee and Liability Insurance Co. Initially, the trial court sided with Ocean Walk, interpreting the inability to use the casino and hotel facilities due to the virus as a “direct physical loss.” However, this ruling was overturned by the Appellate Division, and the case escalated to the New Jersey Supreme Court for further scrutiny.

Vt.: Gov. Scott requests major disaster declaration

Gov. Phil Scott has made a formal request to President Joe Biden for a Major Disaster Declaration to help communities in Essex, Lamoille, Orange, Orleans, Rutland, Windham and Windsor counties recover costs for repair of public infrastructure damage caused by rainfall and severe flooding on Dec. 18 and 19, 2023. If granted, a federal Major Disaster Declaration unlocks Federal Emergency Management Agency Public Assistance Program funding to reimburse municipalities for 75% of eligible costs like debris removal, road and public building repairs, and staff overtime responding to and cleaning up after the storm.


N.Y.: Risk retention placement reports due March 15

New York State Insurance Law Section 5904 requires producers placing New York state business with risk retention groups not chartered in the state to report this business by Friday, March 15, 2024. To comply with the law, if a business has been placed with a risk retention group not chartered in New York, the producer of record is required to report such business on the Statement of Business Placed with Risk Retention Groups not Chartered in New York form. This form is due no later than March 15 of each year.


N.Y.: Private flood-insurance market study passes Senate 

Last week, the New York state Senate passed legislation that would direct the New York State Department of Financial Services to—in part—study the possibility of supporting a private flood insurance market. The bill (S.8167), sponsored by Sen. Neil Breslin, D-46, would tackle the increasing challenges faced by property owners in New York state concerning insurance premiums and flood loss coverage. The primary objective of this legislation would be to conduct a detailed study through the DFS, focusing on the reasons behind rising property insurance costs, the scarcity of insurance options for flood damage, and the potential establishment of a private flood insurance market to supplement the National Flood Insurance Program.


NJCRIB upgrades the online assigned risk system

The New Jersey Compensation Rating and Inspection Bureau announced its newly upgraded Online Assigned Risk System. Benefits included are: access to OAR 2.0 through the Central Security System for validation of credentials; improved stability that is designed to maximize bandwidth and establish greater efficiency and reliability for the user; and standardization between web application data and data elements within the ACORD forms. In conjunction with the release of OAR 2.0, revisions have been implemented to the ACORD 132NJ and ACORD 133NJ forms that include provisions for employer and producer email addresses, as well as an acknowledgement that the policy Final Premium is determined by the audit after the completion of the policy. These updates were addressed in Manual Amendment Bulletin #513.


Last chance: Nominate an industry professional for PIACT’s Awards of Distinction

PIACT is calling for nominations for its 2024 Awards of Distinction, and nominations are due this Friday (Feb. 23, 2024). The association will honor insurance professionals who exemplify the qualities and actions that serve as a model of excellence in the insurance industry and for the independent agency system. Nominations are being sought for these awards: Professional Agent of the Year, Community Service Award and Company Person of the Year. Click here for a full description of each award or a nomination form, click here.

Educating insurance agents

Conn./N.J./N.Y.: Ethics for insurance producers

Ethics is a word frequently used in the industry, but what does it really mean? Agents have ethical guidelines that they must follow, but how do you abide by them to their fullest extent? These questions and more will be answered in the webinar On the Right Path to Producer Ethics Development, which will be held on Thursday, Feb. 29, 2024, from 10 a.m. to 1 p.m. and taught by Stephen P. Tague, CPIA. This course has been approved for continuing-education credits in Connecticut (3 LRE), New Jersey (3 ETH) and New York (3 BR, C1, C3, LA, LB, LSB, PA, PC, TIA).


Grow your network at the Connecticut Convention

PIA’s Connecticut Convention is back at Foxwoods Resort Casino from March 27-28, 2024. Alongside our education seminars, there will be plenty of opportunities to network with your industry peers. The trade show will provide you with the chance to network with vendors and other attendees. Additionally, there will be a Networking Lunch Buffet, as well as a Bloody Mary & Mimosa Bar and a Wine & Cheese Reception. Finally, there is the evening reception with DJ Mike Nigretti: enjoy the music, the open bar, and your new connections. Register today at a 15% discount. Sponsor and advertising opportunities also are available.

N.H.: Consumer webinar on policy inclusions and exclusions

Policyholders can be intimidated by the language of an insurance policy, which leads them to be unsure of what is covered and what isn’t. To help them have a better grasp of what’s included in an insurance policy, the NHID is offering a webinar Understanding Inclusions and Exclusions in Your Insurance Policy on Tuesday, Feb. 27, 2024, at 1:30 p.m. Let your clients know about this class, it may help you start a conversation about their insurance needs.

N.J.: Venture out into the virtual green with NJYIP

Bring your best golf swing for the NJYIP Swing and Connect at Baseline Social NJ. This networking event, which is hosted by NJYIP, will be held on Tuesday, March 5, 2024, from 3-6 p.m. Enjoy Baseline Social’s fully immersive golf simulation as you grow your industry connections. Even if you’re not a golfer, you can still enjoy the company at the open bar; a light dinner also will be served. Register for the event here.

N.J.: Deep Dive Series back for personal lines and small commercial policies

PIANJ’s Deep Dive Series jumps right into the roundtable discussion focusing on Selling and Servicing Personal Lines and Small Commercial Policies in Today’s Marketplace. This event will be held virtually on Thursday, March 7, 2024, starting at 11 a.m. It will feature the speakers PIANJ President Connie Mahoney, Utica National’s E&O Attorney Darren K.G. Shaw, Esq., PIANJ Communications Committee Chairperson Walter Conroy, and PIANJ Director of Government & Industry Affairs for PIA Northeast Bradford J. Lachut, Esq. Register for this Deep Dive now.

Register now

Tuesday, March 5, 2024: NJYIP Swing & Connect

Thursday, March 7, 2024: PIANJ Deep Dive

Tuesday, March 26, 2024: CTYIP Welcome Reception

March 27-28, 2024: Connecticut Convention

Wednesday, April 17, 2024NY-YIP Pre-Buffalo I-Day Event

Thursday, May 23, 2024: PIANJ Women’s Leadership Alliance–Pickleball Tournament and Networking

Save the date

Tuesday, March 19, 2024: Connecticut Legislative Reception

Thursday, April 18, 2024: PIANY at Buffalo I-Day

Wednesday, May 8, 2024: NJYIP Golf Open

Sunday, June 2, 2024: NJYIP Nitecap

June 2-4, 2024: PIA New Jersey | PIA New York Annual Conference

Tuesday, June 4, 2024: NJYIP Fun Run to benefit Special Olympics New Jersey

Tuesday, June 18, 2024: CTYIP Golf Open

Monday, Aug. 5, 2024: NY-YIP Golf Open

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