Spreading The Word

Brokers and underwriters plan to discuss emerging risks and legislative priorities.
By: | October 1, 2013

NAPSLO members will be updated on legislative efforts and given opportunities to develop leadership abilities and network with industry leaders at their conference this month.

Wholesale insurance brokers are “innovators of new and emerging risks the standard market is unable or unwilling to cover.”

That’s one of the messages the National Association of Professional Surplus Lines Offices Ltd. (NAPSLO) wants to send out during its annual convention from Sept. 30 to Oct. 2 in San Diego.

“We want to be proactive and ensure retail agents know that wholesalers — particularly NAPSLO members — can be counted on to bring value to the insurance transaction,” said Brady Kelley, the trade group’s executive director. “They are cost-effective and efficient distributors of specialty insurance products. They adapt insurance products to meet customer needs, and design solutions for the most complex risks.”

Wholesale brokers, Kelley said, have access to carriers that provide surplus lines of coverage — and have “the capital and capacity to manage the insured’s risk.” They also are responsive to insured’s needs.

“NAPLSO member wholesalers have the ability to be flexible and adapt insurance products to meet customer needs because they are not fitting them into the standard product categories often found in the standard market,” he said.

The annual convention is “the premier event” for the surplus lines industry, focused almost entirely on networking for the group’s members, Kelley said.

Attendees can network and conduct business with carriers in four large ballrooms. More than 3,500 brokers, underwriters and vendors are expected to attend, the largest number of attendees for the annual conference to date.

Members will also be updated on legislation affecting the trade group as well as its advocacy efforts.

Of particular interest to the group are issues surrounding the Nonadmitted and Reinsurance Reform Act, which created a national framework for uniformity and efficiency in surplus lines regulation and taxation, Kelley said.

“In the three years since its passage, the NRRA’s establishment of home state regulation and taxation is greatly improving and streamlining the compliance process for our industry,” he said.

“Rather than requirements for brokers and carriers to make multiple filings, and broker requirements to pay taxes in multiple states for one transaction, surplus lines transactions are now governed by the home state of the insured; now, one state regulates and taxes the transaction, producing tremendous efficiencies.”

The trade group continues to advocate for home state taxation, where surplus lines taxes are calculated at the home state’s tax rate on 100 percent of the premium and retained 100 percent by the home state.

“We believe this is the only viable and uniform national solution,” he said.

Conference attendees will also be briefed on additional state legislative activities, including amendments to existing California law that will allow contractors registered as limited liability corporations to obtain liability coverage from an eligible surplus lines insurer, Kelley said. That legislation is awaiting signature by Gov. Jerry Brown to become effective.

Another update the attendees will be briefed on is a law approved by the Connecticut legislature that eliminates the diligent search affidavit requirement, he said. Licensees and insureds are now required to submit signed statements that coverage is not available in the admitted market after a diligent search, and that the amount of coverage procured in the nonadmitted market was limited to the portion not available on an admitted basis.

Effective Oct. 1, these statements must be filed quarterly and are due on the 15th of February, May, August and November.

Other state actions include a North Dakota law enacted in April to allow domestic surplus lines insurers to conduct business in that state — the seventh state to do so, and a Virginia law that shifted the responsibility for premium tax oversight from the Department of Insurance to the Department of Taxation.

On the federal front, conference attendees will learn about the latest efforts in Congress to enact the National Association of Registered Agents and Brokers (NARAB) legislation, Kelley said. NAPSLO has strongly supported the initiative and has worked with other industry trade associations to see the legislation passed this year.

“If passed, NARAB will establish a national agent/broker licensing entity to provide a one-stop licensing system for agents operating outside of their home state, while preserving important state regulatory authority and consumer protections,” he said.

“It supports a more competitive insurance market and improves state insurance regulation to the benefit of consumers. If passed as written, NARAB will greatly increase efficiency and compliance in the licensing process for NAPSLO members participating on a multistate basis.”

The effort to enact the legislation was expected to “pick up steam” again after Congress’ annual August recess, with likely passage this year, he said.

The Next Generation

To facilitate opportunities for up-and-coming wholesale brokers to network with leaders in the industry, the convention includes a “Next Generation” networking initiative for members under 40, Kelley said.

On Tuesday, Oct. 1, NAPSLO’s Next Generation will hold a panel discussion, “Stepping Up When It Counts,” in which industry leaders share how they’ve handled challenging situations, said Yiana E. Stavrakis, vice president, client relationships at AmWINS Group LLC in New York, and president of NAPSLO Next Generation.

“After Superstorm Sandy and the transitional market we’re currently facing, it is really important for the younger generations to understand how to lead and react to change or adverse situations,” Stavrakis said. “The take-away for members is learning how successful the [panelists] experiences were, what they learned along the way and what they will look for in the future.”

The panel features two wholesale brokers, Brenda (Ballard) Austenfeld, executive vice president of the property division at Westrope in Kansas City, Mo., and James Drinkwater, president of the brokerage Division at AmWINS Group Inc. in Charlotte, N.C.. It will also feature two senior executives from excess and surplus line carriers, Louis Levinson, president of the excess and surplus lines unit at The Argo Group US, Inc. in New York, and Gerald Dupree, senior vice president, general property at Torus Insurance in New York.

Stavrakis said the panel members will likely discuss Superstorm Sandy, which was an “unprecedented” adverse situation in the Northeast.

“It was very challenging serving all of our clients in the region when so many people were affected,” she said. “Carriers had to worry whether they had enough people in the field, as there was a lack of claims adjusters because they, too, were impacted by the storm.”

While the aim of the panel will be to enlighten Next Generation brokers under the age of 40, the discussion should be “beneficial to all generations, as everyone can learn from the panelists’ past experiences — learning what to do and what not to do crosses all generations,” Stavrakis said.

NAPSLO’s Next Generation also scheduled a leadership workshop during the conference on Monday, Sept. 30, hosted by Marcus Payne, managing director at All Risks Ltd. in Waxahachie, Texas.

“This is a workshop on leadership, but that doesn’t necessarily mean that it’s just for people in management,” Payne said.

“If a person’s goal is to be the best producer, underwriter or whatever job, this session will help teach them leadership principles that they can apply to everything they do in business.”

The 90-minute workshop was to consist of a lecture, case studies and breakout, he said. Participants would learn how to identify their own personal leadership style and how to take responsibility for actions, regardless of outcome.

“A really important part of the workshop is learning how to lead in times of change and stress, which includes having integrity in everything they do,” Payne said.

“It’s important that everyone consider their style of leadership in how they react in a rapidly changing environment, and that whatever their style, they keep themselves and their employees productive, healthy and safe — particularly in times of change and stress.”

NAPLSO’s conference will also feature a keynote address on Wednesday, Oct. 2, by Ben Stein, an economist and columnist for The Wall Street Journal, Barrons and The New York Times.

Stein was also a speechwriter and aide for Presidents Richard Nixon and Gerald Ford, as well as a TV game show host and a commentator for CBS News, Fox News and CNN.

Stein’s address is part of the trade group’s E.G. Lassiter Lecture Series, presented by the Derek Hughes/NAPSO Educational Foundation.

Katie Kuehner-Hebert is a freelance writer based in California. She has more than two decades of journalism experience and expertise in financial writing. She can be reached at [email protected].