Western insurance associations: How the West is run

Editor’s note:This is the first article in a series on Western insurance associations. Part II of this article will appear in a future issue.

As people migrate to the West to enjoy the weather and opportunities for outdoor activities, insurers’ businesses must evolve as well. Several associations are available to aid agents and brokers in those efforts, and to help them understand the ins and outs of their communities.

Whether it’s dealing with new insurance legislation, education or simply making new connections, the western associations want to ensure that their agent and broker members have a pulse on the industry. Thus, those associations are generally proactive, member-driven groups dedicated to amplifying their members’ success and advocating on their behalf.

The associations usually provide standard functions such as education, conventions and newsletters. But more importantly, “we are fierce defenders on behalf of our agents against unnecessary and unwarranted laws and regulations,” said Alan Smith of the Western Independent Insurance Agents Association, Rancho Cordova, Calif.

“We are at an age in the industry when we are challenged to get more aggressive … As issues get tougher, the more important it is for us to come together as an industry, and we are known for being a fragmented industry,” added Carole Walker, executive director for the Rocky Mountain Insurance Information Association headquartered in Greenwood Village, Colo. “It’s tough for state trade associations at times when they compete with the nationals despite a firm, and relevant position in the industry. But, the state trade associations play a unique and vital role to our members and to the industry … If we don’t evolve with the challenges of the marketplace, we loose our foothold,” she said.

Steve Baugh, executive director, Utah Association of Independent Insurance Agents, Salt Lake City, imagined a world where insurance associations didn’t exist. “It would only take a few big issues before agents would begin to feel like legislature was being a bit tough and they needed a group to speak out on issues — a support group. It’s good to have a support group to look after your interests,” he said.

To find out a little more about the support being offered in the West — the 13 states of Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, New Mexico, Nevada, Oregon, Utah, Washington and Wyoming — Insurance Journal wrangled up some of the heads of the western broker and agents associations. Here’s how the west is being run, as well as highlights of a few topics the associations say will be on the legislative and regulatory horizon in 2006.

Alliance of Insurance Agents and Brokers
The Alliance of Insurance Agents and Brokers, also known as the American Agents Alliance, or the Alliance, is a nonprofit trade association representing independent property and casualty professionals in California. The group is based in Indian Wells, Calif., and is “dedicated to protect and serve independent insurance producers and consumers.”

The Alliance started in 1966 as a group of independent auto agents that decided to pool their resources to form a Yellow Pages advertising cooperative. The name chosen — AAACO — made it the first business listed under “insurance.” Through advertising as a collective, the members saved on advertising costs.

Later, the Alliance’s members met to discuss the California Automobile Assigned Risk Plan’s intention to expand coverage beyond basic liability. The members discovered they had many auto issues in common, and that they could accomplish much more as a united force, rather than as individuals.

The group now is entering its fourth decade of service to independent agents and brokers, and covers much broader topics than auto insurance. For example, the group now works closely with the insurance departments and legislatures in California and Arizona to protect the rights of its members and define its 2006 objectives.

The group also wants to develop and build upon existing coalitions of industry partners with other companies and organizations with similar goals. The association strives to develop grassroots legislative councils comprised of Alliance member agents and brokers to serve as key contacts for legislators in their local district. And, the Alliance backs legislation and regulatory issues that support the foundation of a fair, open and competitive marketplace.

“Whether we are fighting an unfriendly bill, supporting positive legislation or creating our own political stir, the Alliance makes sure our elected officials don’t just hear what we are saying, but that they listen,” the association said.

Recently, the Alliance was pleased the California Department of Insurance backed down on fiduciary duty regulations., said Ken Nigohosian, executive director, upon learning that Commissioner John Garamendi would withhold issuing a new draft of regulations imposing fiduciary duties against insurance agents and brokers.

“However, based on the DOI’s press release, the Alliance is concerned that the DOI expects the industry to impose self-created disclosures patterned after the withdrawn regulations that lacked authority under case or statutory law,” Nigohosian said. The Alliance is adamantly opposed to the legal position issued by the California Department of Insurance regarding insurance agent and broker fiduciary duties.

The California DOI also agreed to amend its proposed “agency appointment” regulations, according to the association, which it attributes to pressured applied this past summer by its members.

The association’s champion for California commissioner, Steve Poizner, outlined his goals indicating insurance agents and brokers are strategically placed to best convey the needs of both insurance consumers and insurance carriers. He expressed interest in creating an agent-broker advisory council if he is elected insurance commissioner in 2006.

“You [insurance agents and brokers] are in the trenches, working with consumers and carriers. You have direct personal contact with consumers and you can provide valuable first-hand feedback,” Poizner said.

Association of California Insurance Companies
For more than 50 years, the Association of California Insurance Companies, Sacramento, has been the voice of California insurers. Its mission is “to successfully advocate a financially sound, competitive insurance marketplace which promotes the availability and affordability of insurance essential to the business and personal needs of the people of California.”

The Association of California Insurance Companies is an affiliate of the Property Casualty Insurers Association of America (PCI) and represents more than 300 property casualty insurance companies doing business in California. ACIC member companies write 39.2 percent of the property casualty insurance in California, including 53 percent of personal auto insurance, 43 percent of commercial automobile insurance, 35 percent of homeowners insurance, 31 percent of business insurance and 43 percent of the private workers’ compensation insurance.

PCI is composed of more than 1,000 member companies companies that write 40.7 percent of the nation’s automobile, homeowners, business and workers’ comp insurance, representing a broad cross-section of insurers. The association serves as the voice of the property casualty insurance industry before state and federal policymakers; state and federal courts; key insurance industry, governmental, and business groups; the news media; and public.

California Insurance Wholesalers Association
The California Insurance Wholesalers Association based in Glendale, Calif., is a California State professional organization that promotes the role of the wholesaler in the industry. The group also promotes the role of insurers, which distribute their products through wholesalers, as well as vendors, which service wholesalers.

Among CIWA’s objectives are to: advance fellowship and mutual cooperation by contact with individuals sharing the same interests; promote recognition of its position in the insurance industry; discuss and mutually solve problems particular to the business of its members; promote ethical practices in the production, writing and servicing of insurance; foster good public relations between members and all those involved or concerned with the insurance industry; promote education and provide educational data regarding the industry; advise members with information on all pertinent legislation, orders, regulations and directives relative to its business; communicate and cooperate with the California Department of Insurance; and support and promote the Independent Agency System of providing insurance.

Ultimately, CIWA is committed to promoting the welfare of its members; creating a collective voice for the membership; exchanging information of concern to members; communicating educational and legislative data that will likely make its members more effective and efficient in all forms of insurance, and offering agents relevant and up-to-date information and representation.

Latin-American Agents Association
The Latin-American Agents Association, headquartered in El Monte, Calif., was established in 1998, created from the need for adequate representation for those who provide insurance services to the Hispanic community, as well as other minority communities.

Created and managed by agents and brokers, LAAA helps to keep its members informed, connected and well-represented, the association said. Guided by a dedication to insurance community interests, the association’s mission is to: Be an unrelenting legislative, judicial, regulatory and industry advocate on behalf of its members and to promote the value of their services. It offers its members skill strengthening seminars and other training avenues; effective communication; and advocacy on behalf of members, according to the association.

The organization strives to strengthen its position as the voice of independent agents and insurance brokers producing Hispanic business in California.

LAAA strongly supports legislation that assures consumer protection and a level playing field for members in distributing integrated financial services. The association also pushes for better policing of existing laws and regulations.

In 2006, the Latin-American Agents Association will be hosting its 7th annual convention from June 8-11 at the Renaissance Hotel in Long Beach, Calif.

Topics California Carriers Legislation Agencies Property Market Training Development Casualty