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Fighting the Good Fight for PIA Members

"You may have noticed that lately, some people have been taking a lot of shots at professional insurance agents," said PIA of Tennessee outgoing President...
July 1, 2005

PIA of Tennessee Presents PIA Boxing Gloves to PIA National

"You may have noticed that lately, some people have been taking a lot of shots at professional insurance agents," said PIA of Tennessee outgoing President Britt Linder, during the PIATN annual convention. "The folks at PIA National have been quick to speak up on our behalf - to state attorneys general, at the NAIC, in Congress, with carriers and in the press."

Linder noted that recently, the National Underwriter reported on PIA National Executive Vice President & CEO Len Brevik's criticisms of a mega-broker's suggestion that contingency commissions for Main Street independent agents should be eliminated. The magazine put Brevik's picture and quote on its front cover, under a big boxing glove.

PIA of Tennessee outgoing President Britt Linder presents PIA National Executive Vice President & CEO Len Brevik with a custom pair of boxing gloves with the PIA logo at the PIATN annual convention.

"It's nice to know that when we have to stand up for our interests, the staff at PIA National is always there to 'fight the good fight' for us," Linder said. "So, as a token of out appreciation, the members of PIA of Tennessee would like to present you with this custom pair of boxing gloves with the PIA logo. We know you'll be able to use them."

In his remarks to PIA of Tennessee, Len Brevik noted the mission statement in PIA National's new Strategic Long Range Plan: "To promote, protect and defend the integrity of our members, the value of their profession and the success of their businesses."

"This says it all," he said. "It is what PIA is all about. At times, it is a difficult task, but our job is to speak truth to power."

He noted that PIA has been in the forefront of the public policy debate resulting from the investigations by New York Attorney General Eliot Spitzer.

"From the moment the first Spitzer story broke, PIA National shifted its focus," said Brevik. "First, we responded to the initial news with a public statement, and assured that all of PIA was on the same page.  Then, we got about the task of exercising our influence with policymakers, to assure that any new regulatory or legislative initiatives did not create a competitive disadvantage for PIA members."

Brevik noted that PIA National has been engaged with the NAIC, NCOIL and with state legislatures across the country, in an effort to ensure that any new legislation is not burdensome for agents. He also noted that at times during the post-Spitzer period, it has been necessary for PIA to go on the offensive.

He pointed out that when a consumer activist, J. Robert Hunter, told Congress that the performance bonuses agents receive are "kickbacks" and implied agents may delay claims filings, PIA took Hunter to task in public. When Consumer Reports magazine advised consumers that by buying coverage from direct writers like State Farm, they can avoid "the bid rigging problem," PIA challenged them in public by releasing the story to the National Underwriter, which reported that Consumer Reports offered no evidence that independent agents were involved in bid rigging.

On the issue of insurance regulation, Brevik says PIA's position is crystal clear. "PIA is a steadfast supporter of state regulation of insurance - always has been, always will be," he said. "PIA has worked closely for decades with the NAIC. But when the NAIC adopted a broker disclosure model that was not in the interest of our members, PIA opposed it publicly."

Another recent area of focus has been company-specific disclosure requirements. Recently, a few insurers have begun to impose what they term "voluntary" compensation disclosure requirements on their insurance agencies.

"These requirements are 'voluntary' only in the sense that no law requires them," Brevik noted.

PIA believes regardless of whatever immediate, short-term, focused reason that outside counsels think they have for pushing carriers into such actions, in the larger, longer-term interests of the insurance industry as a whole, they are ill-conceived. They unwisely tread on current, well-defined insurance law that defines PIA members' agent-broker legal issues within which their E&O insurance and practices operate daily.

Brevik said any disclosure requirements by companies are premature, and that carriers would be wise to consider that the issues raised by compensation disclosure continue to evolve, and that any disclosure requirements created by insurance companies at this time would be premature, leaving the possibility of an expanded view of both producers' and insurers' individual and mutual obligations in terms of compensation disclosure.

"Let it be clear: PIA adamantly opposes any such compensation disclosure requirements imposed by carriers," Brevik said, noting that PIA recently sent a letter to carriers advising them that insurer-created "voluntary" compensation disclosure provisions that may provide strategic and competitive benefits for the insurer "will be met with extreme resistance."

Insurance Commissioner Paula A. Flowers attended the PIA of Tennessee convention, offering to continue to work closely with PIA members. Brevik thanked Flowers for her accessibility and for soliciting the thoughts and opinions of PIA members.

"Please tell your fellow insurance commissioners at the NAIC that PIA is a state's rights organization," Brevik said to Commissioner Flowers. "We support state regulation of insurance and we are opposed to an optional federal charter. In fact, we are always looking to join coalitions with those who share our views."

"Tell the NAIC that when it comes to state regulation, PIA is in this fight to stay," Brevik said. "As one of the most powerful insurance organizations, PIA looks forward to continuing to work with you and the NAIC to defend Main Street insurance agents and the state regulatory system that oversees our industry."

PIA Connection

This article originally appeared in the June 2005 PIA Connection.

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