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1998-2008
Southeastern
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Volume 3, Issue 2 | August 2008

IBC merger
// Life Insurance
10,685 more producers debate centers
Producers may miss LTC
Partnership deadline
licensed in Pa. in 2007 on competition
IBC, Highmark CEOs see no effects
By Todd Karpovich Pennsylvania Department of Insurance.
A Pennsylvania deputy insurance commis- while competitors fear combination
A slump in the financial markets has The number of viatical brokers in-
sioner said agents may miss the LTC
not deterred professionals in Pennsylva- creased to 458 in 2007, compared to 112 By Todd Karpovich
Partnership training requirement deadline nia from pursuing careers in the insur- the previous year, state regulators said. The CEOs of Independence Blue
because the regulations have not been ance industry. Jeffrey Taggart, president of the Na- Cross and Highmark Inc. tried at four
finalized. The number of licensed producers in tional Association of Insurance and Fi- hearings before Pennsylvania Insurance
Page 2 the state increased to 174,583 in 2007, nancial Advisors, said Pennsylvania is Commissioner Joel Ario to convince him
compared to 163,898 the prior year, ac- bucking the trend because the numbers that the proposed merger between the
cording to the most recent data from the of new producers is See “Licenses” on p18 two firms will not have a negative impact
// Regulation
on competition in the state.
The wait is over for However, some lawmakers, competi-
Commissioner Ario Canines bite tors and several health care associations
have lined up to prove them wrong.
Thirteen months after being
appointed, Joel Ario was
homeowners Ario held a series of hearings in Pitts-
burgh, Harrisburg and Philadelphia to
New study finds that dog bites account
confirmed as the Pennsylva- get more input on how the proposed
for a third of all homeowners’ claims.
nia insurance commissioner, merger would affect the local market.
See story on page 7.
succeeding Diane Koken. Highmark and IBC See “King” on p11

Page 5

// Financial Services
‘Huge problem’ Pa garners ‘D,’ Number Check
Producers dropping seen in online CE N.J. earns ‘B’ for

31
their Series 6 licenses
Faced with the time and expense of com-
Pa. regulators ‘looking for fraud’ as
concerns about Internet courses grows
P/C regulations
pliance, more independents are ditching Consumers’ freedom to pick right auto,
By Bob Graham
homeowners policies addressed
their Series 6 licenses. An official with the Pennsylvania
Page 10 Insurance Department said there is “a By Molly Greeley
huge problem” with online continuing Pennsylvania was one of five states
education programs and his office is to earn a grade of “D” in a recent study
// Health Insurance
“looking for fraud.” of property/casualty insurance regula-
‘New-old’ dental Speaking recently to the Pennsylva- tion in the United States.
Percentage chance of married couples
with a guaranteed source of retirement
plans can cut costs nia chapter of the National Association New Jersey earned a “B” grade and other than Social Security income
of Insurance and Financial Advisors, Delaware earned a “C.” making $75,000 at retirement outliving
Jamie Black explains how this “new-old” Ron Gallagher, a deputy insurance com- The study, created by the Competi- their financial assets if they retain their
approach, using group scheduled missioner, said the department is look- tive Enterprise Institute, a nonprofit ad- pre-retirement standard of living.
reimbursement dental plan, can cost Source: Ernst & Young
ing at how to ensure See “CE” on p26 vocacy group based See “Grades” on p20
employers significantly less than PPO or
indemnity plans. Departments
Page 10 CALENDAR 20 DEALS 9 PEOPLE 15 Your only source for the latest local industry
CAPITOL HILL 19 LEGAL BRIEFS 17 NEW PRODUCTS 2, 25 news, as well as new products, sales advice,
ratings, and national insurance and financial
COMPANIES 12, 22 LIFE/FINANCIAL 20 RECORD/FINES 27 service news updated daily.
Insurance dept. says producers may
miss LTC Partnership training deadline
By Bob Graham
A deputy insurance commissioner for
Pennsylvania recently said producers may
miss the Dec. 31 deadline for completing
required continuing education course-
work to sell the Pennsylvania Long-Term
Care Partnership insurance policies.
Deputy Commissioner Ron Gallagher
said not meeting that requirement “is not
a problem” because the specifics of the
requirements have not been completed
by the Pennsylvania Insurance Depart-
ment yet. Therefore, he said, it’s imprac-
tical to think that people can meet them.
He said regulations to address the situa-
tion should be forthcoming in the next
Something
to think
about.
few months.
The department “is more producer-fo-
cused than [on] the sunset date of Dec. 31.”
On the insurance department’s Web
site, producers are told in Notice 2008-05,
dated April 19, that they must complete a
one-hour training course prior to any
sale, solicitation or negotiation of a qual-
ified Partnership policy and complete an
eight-hour training course (which may
include the 1-hour course) by Dec. 31.
Many agents have completed the one-
hour coursework, but not the eight hours.
Pennsylvania is one of the first states
to roll out the LTC Partnership program
so course requirements are not final. IFA
NEWPRODUCTS Insurance & Financial Advisor | IFAwebnews.com
Wind coverage for financial losses available
Property/ Insurance broker Marsh, along with catastrophe modeling firm Risk Man-
Casualty agement Solutions and wind station operator WeatherFlow Inc., developed
an insurance product to address financial exposures faced by businesses due to hurri-
cane-force winds.
WindX-SI provides indemnification for economic losses that result when a named storm
generates winds that exceed a specified velocity within a defined vicinity of a business
location. Coverage is triggered by the combination of two events: wind speed exceeding
a defined velocity and the business suffering a financial loss as a result.
The product is designed to trigger a wide range of risk transfer contracts, including over-
the-counter derivatives, catastrophe bonds and industry loss warranties.
Flexible guaranteed life product launched
Life MetLife launched a new universal life insurance policy, Guarantee Advan-
Insurance tage UL, which offers enhanced flexibility with guaranteed protection
through customizable durations of coverage and premium payments, the company said.
The new product is a permanent life insurance policy that offers individuals a tool for
estate and business planning, as well as income replacement to protect families from
the loss of an employed family member. The policy’s optional Coverage Continuation
Rider features a secondary no-lapse guarantee that coverage will remain in force, even if
the cash value has been reduced to zero.
The product is built using the 2001 Commissioners’ Standard Ordinary Mortality Table,
allowing clients to reduce their annual premiums by extending payments up until age 121.

Enhanced variable annuity product unveiled

The IROQUOIS Group ® Life
Insurance
Hartford Financial Services Group Inc. enhanced its variable annuity product
lineup and introduced Hartford Leaders, combining the options, features,
benefits, service and support from two prior products into one variable annuity.
For commercial and personal insurance, Iroquois Mid-Atlantic, may provide The product offers a choice of 12 professional money managers with 81 total
the solution to your needs. investment options, according to Hartford.
Why consider joining Iroquois? In addition, the product offers an enhanced guaranteed lifetime withdrawal benefit
Here’s what you will get: designed to have the potential to grow as the contract holder’s income needs to grow
over time, the company said.
Direct access to additional carriers*
Lower volume commitments
Competitive commission rates Program for real estate owners, managers offered
Profit sharing opportunities
Property/ The Hanover Insurance Group Inc. unveiled a new insurance program offer-
Discounts on agency-related products and services Casualty
Access to large commerical products ing specialty coverages for commercial real estate owners and managers.
and specialty markets Real Estate Advantage offers coverages for commercial property, general liability, com-
mercial crime, commercial auto, commercial umbrella and workers’ compensation.
As an Iroquois Member Agent you won’t get:
Property owners may also broaden their coverage and increase limits beyond the basic
Initiation fees package, according to the company.
Interference with current direct contracts The program’s endorsements include coverage for alternative key systems, anchor store
Restrictions on using outside markets
business income, denial of access, lease cancellation, lost keys, movement of property,
A loss of equity in your agency
outdoor property, paved areas, realty taxes, tenant move back expense and unintentional
More than 1,500 independent agents in 35 states have discovered the property reporting errors.
benefits of Iroquois membership. For more information, contact Matt Ward
at 804-320-6984 or email him at mward@iroquoisgroup.com. You may also
visit our website at www.iroqma.com. Individual health plan with basic benefits started
Health HealthPartners introduced a new health plan for individuals that offers a
*subject to individual company approval Insurance set of basic benefits designed for a broad audience from young people to
early retirees. In addition to three free office visits per year per person, “Three For
Free” also includes $5 co-pay for all generic drugs, 100% coverage for up to $200 pre-
IROQUOIS
®
ventative care annually and a $250 co-pay for an emergency visit. Premiums for the
plan start at $69 per month.
Mid-Atlantic
Creating Productive Agency-Carrier Relationships for over 25 Years.
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2 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008
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Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 3
 Quotes // PUBLISHER’S NOTE

“Producers are Dusting off the crystal ball to

overwhelmed by the predict soft market end
compliance function, Sister Kay,the “renowned psychic” who
yet all of the has a storefront (complete with a neon
“open” sign in the window) just down
complexity is not the road from the IFA offices, probably
can predict what is going to happen in
giving clients a better the property/casualty markets in the
PA • NJ • DE Edition
to see a return to a hard market next
year. But since the price of gas plays
such a major role in the U.S. economy
— and the world economy — some Tony Ondrusek
say the soft market could continue Publisher
well into 2010. tony@IFAmedia.com

understanding of the next year or two. And much of this is beyond the con-
Bob Graham
No expert really has any better indi- trol of the average insurance agent,
product they are cator than what Sister Kay can see in her carrier executive, the U.S. Treasury, or
Executive Editor
bgraham@IFAmedia.com

buying and we are crystal ball, or Tarot cards, or whatever even the president of the United States.
she uses to foretell future economic and The fluctuations are due to Arab oil in- Todd Karpovich
continuing to lose financial indicator conditions. Senior Editor
tkarpovich@IFAmedia.com
What would Sister Kay say
qualified producers.” about the current market,
What would Sister Kay say about
Sharon Schafer
which many say is as soft as a the current market, which many Advertising Sales Director
Robert Kerzner bowl of ice cream sitting in a sschafer@IFAmedia.com
President/CEO of LIMRA hot August sun? say is as soft as a bowl of ice
Page 1 Keisha Beckles
In many cases, particularly
in the personal lines market, cream sitting in a hot August sun? Advertising Sales Associate
kbeckles@IFAmedia.com
“People who build houses on
agents are feeling the pinch. In
sand dunes should expect to
some cases, such as the recently an- terests (gas prices) and investors Terri Reuter
pay higher homeowners Assistant Editor
nounced acquisition of HRH by Willis, it (mortgage crisis) who have rigged the
insurance rates than those who treuter@IFAmedia.com
might be fueling mergers and could find mortgage and petroleum industries for
live well inland.”
some corporate folks unemployed. their own benefit.
Eli Lehrer Molly Greeley
Worse, though, is that this soft market At least one recent expert stated that Editorial Associate
Senior fellow at the CEI is unlike many in recent memory due to because premiums declined in June this mgreeley@IFAmedia.com
Page 1
several factors that are creating a “perfect year at a rate less than the drop in June
storm” and are highly UN-predictable. 2007, we might be nearing the end of the Jonathan Herndon
Graphics Manager
“It used to be a stock broker Soft markets are often cyclical, and a soft market.
jherndon@IFAmedia.com
was a stock broker. And an return to a hard market is sometimes But at this point, Sister Kay’s predic-
insurance agent was an easy to predict. But many agents are talk- tion would hold about as much water as Carol Ondrusek
insurance agent. The lines have ing about the mortgage crisis and the that from the most sophisticated, well- Circulation Manager
rising price of gas, which, no pun in- educated economist. subscribe@IFAmedia.com
somewhat been muddled.”
tended, fuels the fire. What is your prediction? Shoot me an • • •
Jeffrey Taggart Before the price of gas began to email at tony@IFAmedia.com, and we
NAIFA President Mission Statement
Page 1 spike, agents predicted that even with will let the rest of our readers know what
To provide an objective and relevant report
the mortgage issue, one could expect you see in your own crystal ball. IFA of news and issues that affect
the business and success of local
“This is a double-edged sword.
insurance & financial service professionals.
There are producers who take Prior to Eliot Spitzer’s investigation that led to the • • •
their courses online for Insurance & Financial Advisor
legitimate purposes.” settlements on contingent commissions, many of 10600 York Rd., Suite 203
Hunt Valley, MD 21030
Jack Yanosky Willis’ competitors would have argued that Willis phone: 703-807-2001
Pennsylvania Department
of Insurance had an unfair advantage. The playing field for fax: 410-667-7977
Page 1
Willis’ competitors then was as uneven as it prob- Insurance & Financial Advisor SOUTHEAST PA-NJ-DE is pub-
lished by New Horizon Group Inc. The paper is free for retail
“As the cost of health care ably seems now to Willis and the others who set- insurance and financial service professionals in the Greater
Philadelphia, South Jersey and Delaware areas.
increases, it’s more important
than ever to have an agency to
tled contingent commissions cases in New York. The publisher also owns Insurance & Financial Advisor –
MARYLAND & WASHINGTON, D.C. EDITION and Insurance &
field complaints and work for fair Financial Advisor –VIRGINIA EDITION.
coverage for consumers.” - From Bob’s Post Insurance & Financial Advisor and its content is protected by
Rep. John on Blog.IFAwebnews.com U.S. copyright law. Content may not be reproduced or copied
in any form without permission.
Yudichak
Page 23 News, photos and articles are published free. Submissions
may be edited or altered, and become the publisher’s property.
The publisher assumes no liability for errors or omissions.

4 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008
Ario confirmed as
Pa. commissioner
13 months after Rendell’s nomination,
Senate approves Koken’s successor
Joel Ario, Gov. Edward
Rendell’s nominee for
insurance commis-
sioner, was confirmed by
the Pennsylvania Senate,
nearly 13 months after
his nomination.
The confirmation of
Joel Ario
Ario, a former Oregon
insurance commissioner, had been held
up because the Senate feared Ario was too
close to Rendell. Sen. Don White (R-Indi-
ana), chair of the Senate Banking and In-
surance Committee, led the effort to block
the confirmation of Ario, 54, because of
concerns over how he would handle the
proposed merger of Independence Blue
Cross and Highmark Inc., the state’s two
largest health insurers.
White ended his delaying of the con-
firmation after the legislature passed a
measure allowing members of the House
of Representatives and Senate insurance
committees to weigh in on the proposed
merger, which would create one of the
largest health insurers in the nation and
one that controls more than half the
state’s health insurance marketplace.
White also agreed that Ario had been
acting independently of Rendell, another
condition he imposed on moving the con-
firmation forward, according to reports.
In the same week, Ario was authorized by
the Pennsylvania General Assembly to ap-
prove or reject the merger of the two com-
panies, not just the combining of the for-
profit operations of the two companies.
Ario told Insurance & Financial Advisor
several months ago that Rendell warned him
that his confirmation might be delayed in-
definitely. IFA

// PROPERTY/CASUALTY

New Jersey auto carrier

expands to Pennsylvania
A New Jersey-based auto carrier has
been approved to write private auto in-
surance in Pennsylvania, company offi-
cials announced.
IFA Insurance Co., which has been
writing rate auto insurance in New Jersey
since 1972, said the agreement with
Pennsylvania regulators is the first time
they company expanded out-of-state.
The company said it hopes to attract
some customers through its Web site. IFA

Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 5

North Carolina firm expands to New Jersey, Delaware
Tapco Underwriters provides software for agents to use for binding and quoting of policies, implements rewards program for agents
Burlington, N.C.-based Tapco Under-
writers Inc. has expanded its products,
quoting and binding process to retail
agents in Delaware and New Jersey.
With New Jersey, Delaware in the fold,
Pennsylvania is ‘in the works,’ officials say.
The company’s software helps reduce
the quoting and binding process to a five-
minute phone call, Tapco officials said.
Last year, Tapco reported that it provided
more than 500,0000 telephone quotes to
20,000 agents and producers, generating
more than $200 million in annual revenue.
The expansion into New Jersey and
Hiring the Best People Isn’t Everything;
It’s the Only Thing
Delaware comes on the heals of similar ability; general, specialty, and artisan
programs in California and Texas. Ex- contractors; property; vacant property
pansion into Pennsylvania “is in the and builder’s risk; and dwelling/home-
works,” a company spokeswoman said. owners, among other lines.
Tapco Underwriters has also imple-
mented a rewards program for agents
who bind policies with its underwriters.
For each policy an agent binds through
Tapco, the producer receives a bonus
Tapco Underwriters gather basic un- commission in the form of a bank-is-
derwriting information from agents and sued debit card that can be used any-
enter data into comparative rating soft- where Visa cards are accepted.
ware, which generates multiple quotes The company began with just three
immediately. people but has since grown to five offices
Tapco Underwriters has the binding that employ 180 people, service 8,000
authority for more than 1,000 classes of agencies and currently write in 12 states,
business, including all types of general li- company officials said . IFA
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// HEALTH INSURANCE
Notari to lead Aetna’s regional
small-group market sales
David Notari,a former
regional vice president
for UnitedHealthcare’s
regional small-group
business, has been
named to a similar po-
sition in Aetna’s mid-
Atlantic region.
David Notari
Notari will be re-
sponsible for driving profitable growth
and retention in the 2-50 member busi-
ness segment, company officials said. In
this role, Notari will lead a team of 48
professionals who are responsible for
promoting small-business benefit solu-
tions and building strong broker rela-
tionships that create opportunities in the
2-50 market across the region, which in-
cludes Pennsylvania, Maryland, Virginia,
Delaware, Southern New Jersey and the
District of Columbia, officials said.
Notari spent six years at United-
Healthcare, serving in local, regional and
national sales leadership roles with the
small-business group serving employers
up to 99 lives. He was in charge of small
group for UnitedHealthcare when it tran-
sitioned away from Mid Atlantic Medical
Services Inc. or MAMSI, with which it
had merged in 2003. As part of that tran-
sition, UnitedHealthcare began allowing
brokers in the mid-Atlantic region to start
selling its products. Under MAMSI, only
its own brokers could sell its products, an
approach that raised the ire of many
health insurance brokers in the region.
Notari has more 20 years of experi-
ence building and managing sales and
marketing organizations, with revenues
of up to $1.2 billion. IFA
// COMPANY NEWS
Shareholders approved
Palisades, North Atlantic
Holdings merger
Shareholders approved the merger be-
tween Berkley Heights, N.J.-based Pal-
isades Safety and Insurance Association
and National Atlantic Holdings Corp., of
Freehold, N.J., the companies announced.
Both companies only write policies in

Karr Barth Associates, Inc New Jersey and state regulators must still
approve the deal. If approved, the merger
will be finalized in this year’s third quarter
Financial professionals are contracted with AXA Advisors,
LLC and AXA Network, LLC, which do not own or o
and is expected to boost Palisades’ market
perate Karr Barth Associates Inc. (KBA).
Equal Opportunity and Affirmative Action Employer M/F/D/V.
www.karrbarth.com share as the second largest independent
agency underwriter of auto insurance in
AGE-40970(7/07)(7/09)
the state, according to reports. IFA

6 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008

Dog bite claims increase to more than $350 million annually
By Todd Karpovich
Dog bites are becoming an increasingly
bigger problem in the insurance industry
and now account for one-third of all home-
owners insurance liability claims, costing
$356.2 million in 2007, up 10.5% from the
previous year, according to a report by the
Insurance Information Institute.
The average cost of dog bite claims in-
creased by 11.5% in 2007 to $24,511, ac-
cording to the most recent data in the re-
port. Since 2003, the cost of these claims
has risen nearly 28%, but the number of
claims paid by insurers has remained sta-
ble over the past three years at about
14,500, researchers said.
As a result, some insurance compa-
nies are raising premiums with home-
owners and renters insurance policies if
a client’s dog bites someone. Most poli-
cies cost between $100,000 to $300,000 in
liability coverage, and if the claim ex-
ceeds the limit, the dog owner is person-
ally responsible for all damages above
that amount, including legal expenses,
according to researchers. .
Some companies will require dog
owners to sign liability waivers for dog
bites. Others will cover a pet if the owner
takes the dog to classes aimed at modi- $10 million, and covers broad types of li-
fying its behavior. ability. Most insurance companies have
“Any time specific claims rise that required minimum amounts of underly-
rapidly, our members take note, but ing coverage – typically at least $250,000
overall, the bigger problem for our of protection from an auto policy and
members is when insurers exclude dogs $300,000 of protection from a home-
based on breed rather than biting his- owners’ policy, according to the report.
tory,” said Kevin Nemith, chairman of “This has been on out radar for a num-
the Insurance Agents & Brokers Service ber of years,” Lynn Knauf, director of per-
Group. “Given the trend toward in- sonal lines for the Property Casualty In-
creased dog-bite claims, it is reasonable surers Association of America, said in an
to expect that insurers will rely more interview with Insurance & Financial Ad-
heavily on breed-based exclusion poli- visor. “Lots of times, insurers are just un-
cies when they can.” derwriting the risks. Lots of times, they
The amount of umbrella liability cov- might not even know in some cases
erage usually ranges from $1 million to which of their clients even have dogs. IFA
// Bites worse than barks for dog owners
Industry experts said agents should remind dog
owners that they are liable for any injuries their
pets cause in various scenarios, including:
• If the owner knew the dog had a tendency to
cause that kind of injury;
• If a state statute makes the owner liable,
whether or not the owner knew the dog had a
tendency to cause that kind of injury;
• If the injury was caused by unreasonable care-
lessness on the part of the owner.
// RECOGNITION
Murray recognized with third
employee ownership
communications award
Murray Risk Management and Insur-
ance, is the recipient of the national
ESOP (Employee Stock Ownership Plan)
Association’s 2008 Annual Awards for
Communication Excellence in the cate-
gory of Educational Materials, ESOP In-
tranet. Winners in this category are rec-
ognized for their educational efforts to
inform employee owners about how
their ESOP works or about company fi-
nances, new employee orientation,
training classes and other ESOP-related
communications.
The AACE Awards recognize the out-
standing communications program of
the association’s members and winners
are chosen by a panel of five judges made
up of both management and non-man-
agement employee owners.
Murray established its employee stock
ownership plan in 1994. IFA
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Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 7
Economy will not slow specialty program market
Sector remains ‘vibrant’ and is ‘an increasingly attractive target for new capital,’ practice researcher says
The program market has grown and will
continue to expand this year, as insur-
ance companies focus on core concerns
of new business production, premium
writing and rate profitability, according
to a Guy Carpenter & Co. study.
However, several new trends emerged
so far this year as the market’s appetite
for mergers and acquisitions increased,
along with a growing interest in the use of
outside capital to fuel new endeavors.
"The program market remains vibrant
and has become an increasingly attrac-
tive target for new capital," said Carl
Bach, head of Guy Carpenter’s Program
Manager Solutions Specialty Practice.
"Across programs of all sizes, organi-
zational structures, technology platforms
and servicing capabilities, we continue to
see a strong interest from carriers in do-
ing business with program administra-
tors and managing general agencies."
Evolving appetites explored
Guy Carpenter’s fourth annual survey
of domestic insurance companies writing
specialty program business through pro-
gram administrators examines insurance
carriers’ evolving appetites for program
business through program administra-
So many eyes,
tors and managing general agents and
touches on key trends, including market
size and dynamics and operating plat-
forms.
Interest by carriers to do more busi-
Interest by carriers to do more business with
PAs and MGAs extends across many areas.
ness with PAs and MGAs extends across
a number of areas, including providing
insurance for programs, partnering in ex-
panding operations to grow revenues
and even potentially purchasing a
PA/MGA operation via merger or acqui-
sition, said Bach. "Given these largely
positive trends, all indicators point to an
exciting and active year in the program
marketplace," he said.
Majority says market will grow
The survey found that 56% of survey
respondents expect the market to grow in
2008, while 32% expect it to remain flat.
Only 12% expect the market to contract.
Respondents perceive the PA/MGA
market to be large, with 92% estimating
the total PA/MGA market to be at least
$20 billion in gross written premium.
Some 33% specified a range of $20 billion
to $30 billion, with 38% estimating the
market at between $30 billion and $40
billion. More than 20% believe that the
PA/MGA market generates GWP in ex-
cess of $40 billion.
Profitability perceptions remained
fairly consistent with the Guy Carpen-
ter’s 2007 survey. Some 92% of respon-
dents estimate a combined ratio for the
market of 90% to 100%, with 68% put-
ting the market at 90% to 95%.
Respondents identified their primary
challenges as new business production
(77%), premium growth (66%) and main-
taining rate levels (58%). The survey also
identifies the compatibility of systems as
an increasing challenge, given carriers’ in-
creasing flexibility in the use of front-end
rate, quote, bind, and issue systems. IFA

so many options. // EXPANSION

Reach every insurance agency and retail Russell Bond & Co. opens
financial service office in the mid-Atlantic region. New Jersey office
In print, email and online. Buffalo-based Russell Bond & Co.
opened its first office in New Jersey.

Be seen. The new office is called the called the

Call 703-807-2001.
Financial Institutions Underwriting Of-
fice and has its headquarters in Hamil-
ton, N.J.
The office, which holds binding au-
thorities on behalf of underwriters at
Lloyd’s London, specializes in excess
flood, forced-placed property and related
coverage, according to the company’s an-
nouncement and is open for retail and
wholesale producers nationally. IFA

8 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008
 DONEDEALS Insurance & Financial Advisor | IFAwebnews.com

Unitrin teams with Guidewire Software

Property/ Unitrin Inc., a financial services company, selected Guidewire ClaimCenter,
Casualty a Web-based claims management system from Guidewire Software, to
improve its end-to-end claims adjusting processes, reduce claims costs and enhance
customer service.
Unitrin’s property/casualty companies will implement ClaimCenter to handle their entire
claim volume of 700 to 800 claims per day, according to Guidewire. The first project
release will encompass claim intake in 2009.

Berkshire selects DI illustration system you had the

Life
Insurance
Berkshire Life Insurance Co. of America selected Insurance Technologies
ForeSight to enhance its disability income insurance illustration system.
freedom to offer
As part of a launch of an individual disability income insurance line, Berkshire will provide your clients more...
its sales force with a Web- and desktop-enabled illustration system to deliver marketing
opportunities and upgraded efficiencies for field releases, the company said.
In addition, it will allow integration with the Berkshire mainframe and Web-based applica-
tions. ForeSight will enable Berkshire to provide each channel, broker dealer, agent or
agency with a branded interface, product list, product variations and marketing content,
all using one set of code, company officials said.

HUB California acquires Nett & Champion

Employee Hub International of California Insurance Services Inc. acquired the assets of
Benefits Nett & Champion Insurance Services, which specialized in employee bene-
fit consulting and brokerage services.
The Nett & Champion team will join HUB California at its existing office. HUB California
president, Kirk Christ, said that the acquisition added “greater depth and breadth to the
specialized practices that Hub International continues to build.”
Terms of the transaction were not disclosed.
YOU WOULD OFFER INDIVIDUAL DISABILITY INCOME (DI) INSURANCE
FROM METLIFE. Help your clients build a safety net to prepare for the if in
Life Brokerage Partners allies with Allianz Life life. With MetLife, you’re choosing a company with 140 years of experience
Life Life Brokerage Partners announced its latest association with Allianz Life that provides employee benefits to more than 90 of the top one hundred
Insurance Insurance Co. of North America. Life Brokerage Partners can now offer
FORTUNE 500® companies1.
Allianz Life’s fixed annuities and life of long-term care insurance products in most states
across the country. We work with Brokers and independent agents to help you recommend
comprehensive disability income coverage for your clients.
MetLife to become first marketing partner of stadium For Quotes or to request a DI Proposals Request form:
Life MetLife Inc. reached an agreement in principle to be the first major market- Barbara Woessner – Brokerage Sales Specialist
Insurance ing partner of the new Meadowlands stadium in New Jersey, future home BWoessner@metlife.com
of the New York Giants and Jets. Toll Free: (800) 280-8339 x 4211
As a corporate partner, the New York-based life insurer will have the exclusive naming For Questions:
rights to brand one of the four main entrances to the new stadium as well as one of the
four main scoreboards inside the stadium. MetLife will also become the official life insur- Kevin Handforth – Brokerage Account Executive
ance company of the Giants and Jets. Khandforth@metlife.com
The insurer said the sponsorship fits in perfectly with MetLife’s significant sports promo-
Toll Free: (800) 280-8339 x 4196
tion strategy, which includes its three blimps and its TV network partnerships to cover Brendhan Crowley – Brokerage Account Executive
major sporting events. BCrowley@metlife.com
Toll Free: (800) 280-8339 x 4213
BenefitMall acquires BenefitPort Southwest
Health BenefitMall, a broker services company, acquired BenefitPort Southwest, a
Insurance full service general agency that provides solutions for individual, group and Benefits for the if in life.SM
senior clients. BenefitMall will gain an office in Fort Worth, Texas, where BenefitPort
Southwest is headquartered, and expand their presence in San Antonio. 1FORTUNE 500®, April 2007 and MetLife Customer Relationship Datamart. FORTUNE 500® is a registered trademark of FORTUNE®
magazine, a division of Time Inc. Metropolitan Life Insurance Company, New York, NY 10166. ©2008 MetLife, Inc. © UFS
0707-5083 L04089402(exp0409)
For the latest Done Deals, go to IFAwebnews.com.

Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 9
 DentalFocus
‘New-old’ dental plans can help small
business control premium spikes
Since 2001, premiums for PPO and indemnity dental
plans have risen as much as 56%, according to the
National Association of Dental Plans. That leaves many small busi-
nesses unable to afford coverage. While more than 90% of
companies with 1,000-plus employees
offer group dental benefits, as many as
60% of companies with 6 to 24 employ-
ees do not.
This presents a need for an alternative
plan to fill the void left by surging dental
premiums – a plan that allows smaller
companies to offer group coverage while
keeping their spending under control.
Insurance providers looking to help
small businesses solve this dilemma have
turned to the past, dusting off a tried-and-
true concept: the scheduled
reimbursement dental plan.
Group scheduled reimbursement den-
tal plans often cost employers
significantly less than PPO or indemnity
plans set up to pay based on reasonable
and customary (R&C) charges, since they
are not subject to inflationary trends.
With a choice of benefit levels,
employers can select their schedule
based on the company’s budget and spe-
cific needs. The schedules can be
adjusted or maintained as desired, mean-
ing lower group premiums and higher
plan satisfaction for employees.
An employer can couple the scheduled
// LITIGATION
Supreme Court elects not to rule on life insurance case
The U.S. Supreme Court chose not to
rule on a case of a widow denied $426,000
in life insurance benefits because federal
retirement law does not permit her to
seek compensation, according to pub-
lished reports.
The woman, who lives in Houston,
wanted the court to rule that her hus-
band’s employer breached its fiduci-
ary duty.
Under the Employee Retirement In-
come Security Act of 1974, beneficiaries
are entitled to sue to obtain equitable
relief, including a court injunction or
restitution.
However it does not include legal relief
or monetary damages.
10 | Southeastern Pennsylvania / New Jersey / Delaware
By Jamie Black More producers ditching
their Series 6 licenses
Compliance discourage independent hold at least one FINRA license, they are
agents from selling registered products increasingly dropping their Series 6 be-
cause of regulatory issues. In the report,
many producers said the volume of in-
By Terri Reuter
Citing burdens with compliance reg- vestment business did not justify the ad-
ulations, more independent producers ditional requirements or expense.
are dropping their Series 6 license, ac- “I am aware of several people being
cording to a recent study by LIMRA In- dropped form broker-dealers because of
ternational. failure to meet minimum production re-
plan with a PPO as a “buy-up” option to
More than one–third of the independ- quirements and then throwing in the
provide even greater flexibility for employ-
ent producers surveyed said they towel,” said David Barol, regional con-
ees who might want a more
dropped their Series 6 license over the sultant in the mid-Atlantic region for
comprehensive plan. Any way you slice it,
past two years. The Series 6 license per- Penn Mutual Life Insurance Co.
the employer’s cost will always be lower
mits a producer to sell mutual funds, “The reasoning behind the increasing
than the traditional dental premium …
variable annuities and variable life in- minimums is the proposition that low pro-
and stay that way!
surance products. ducers cost the broker-dealer more, even
Employees benefit because there are
no network restrictions, no waiting peri-
ods or “guesswork” as to what the One-third of independent producers said they
insurance company pays per procedure. dropped Series 6 license in last two years.
Even before a procedure is started, the
employee can “negotiate” with the den-
The survey consisted of more than 600 though the payouts are low which in turn
tist about the balance due.
members of LIMRA’s producer panel who leads to higher broker-dealer margins,”
Since scheduled reimbursement dental
described how compliance has affected Barol said. “The rationale is that the lack of
plans offer savings and cost stability for a
their business practices and the sources activity causes the producers to make mis-
company, while giving employees access
they use to stay informed about new takes, leading to client lawsuits and that
to quality dental care, they present bro-
compliance regulations. the lack of activity causes these producers
kers with an excellent opportunity to
“I think it [survey] indicates people’s to require extra help from the broker-
increase their dental plan portfolios.
legitimate concerns about all of the com- dealer staff to get basic work done.”
Reimbursement plans are easy to
pliance,” said Randy Scritchfield, Inde- Half of the producers surveyed said it
understand, include an orthodontia bene-
pendent representative and a recent of- takes too much time to meet the in-
fit and encourage the insured to be a
ficer for the Greater Washington chapter creasing requirements and it confuses
savvy consumer of dental benefits!
of the National Association of Insurance clients. Managers of larger agencies said
about the author and Financial Advisors. Scritchfield, who they added specific compliance person-
Jamie Black is an MGA for AIG’s Group said he has a series 7 license because it is nel to handle regulation issues. About
Benefits Portfolio and can be reached at more comprehensive that a Series 6, 50% said their agency managers handled
610-292-9200 or jabrdl@aol.com.
added, he “does not reject good compli- compliance issues and 12% said they
ance in any way.” outsourced, the report said.
A Series 7 license, the most compre- The survey also indicated that 46% of
hensive and one of the most difficult cer- affiliated agents said they receive infor-
tification tests to pass, enables someone mation from their agency’s compliance
The 5th U.S. Circuit Court of Appeals
to be a stockbroker who can sell stocks, office, but that number drops to 9% for
ruled that ERISA prohibited her from
bonds, options, limited partnerships and independent producers.
seeking the monetary damages equaling
investment company products like open- “If you are serious about the business
the insurance benefit.
and close-end funds. Series 6 and Series and it pays for itself, or you are not, and
Aetna denied the woman, Melissa Am-
7 licenses are regulated by FINRA, the the compliance is not worth the income
schwand, benefits because her sick hus-
successor to the NASD. generated,” said John F. Dallavalle of the
band never returned to work. To trigger
“The report underscores the problems Western Maryland chapter of the Soci-
the life policy, he needed to return for at
associated with today’s complex compli- ety of Financial Services Professionals.
least one day.
ance requirements,” said Robert Kerzner, Barol said that he has not seen any
Amschwand alleges that the employer
president and CEO of LIMRA. “Producers studies that showed low volume produc-
was responsible for the error because
are overwhelmed by the compliance ers as the cause of litigation against bro-
employees never told them or provided
function, yet all of the complexity is not ker-dealers.
documents explaining the return-to-
giving clients a better understanding of “Nevertheless, as broker-dealers raise
work requirement, and told them that
the product they are buying and we are minimums, they will continue to shove
they would be covered when the em-
continuing to lose qualified producers.” the occasional producer out of the busi-
ployer switched plans from another com-
While more than 80% of the producers ness,” he said. IFA
pany to Aetna. IFA
Insurance & Financial Advisor | IFAwebnews.com August 2008
// Editor’sPicks Highlights and exclusives from online
Merger: Debate over competition goes on
IFAwebnews.com/Pennsylvania From page 1 riers in the state, including Philadelphia-
based Cigna, Aetna and UnitedHealth-
A FEW HIGHLIGHTS AND EXCLUSIVES FROM ONLINE
executives said their markets do not over- care. Officials with those companies tes-
Agents, brokers should see no effects from OFC lap. They said the merger will give the tified that IBC and Highmark are already
combined company 53% of the market, succeeding as separate companies.
plan, creator says. but an analysis by an expert with CRA Stephanie Bernaciak, a vice president
Insurance agents and brokers should not be hurt by the federal government’s plan for International put that number at 73%. of sales and account management for
reform of insurance and financial service reform is approved, a chief architect of the U.S. As a result, the merger would give the UnitedHealthcare, testified her company
Treasury Department’s plan said. companies an unfair advantage to the has made “significantly lower, more com-
“I can’t see how this would be detrimental to insurance agents and brokers,” said David G. combined company as far as pricing, petitive” offers when bidding against
Nason, assistant secretary for financial institutions and a senior advisor for the federal agency. consumer choice and perhaps quality, Highmark in the Western part of the state.
Nason spoke as members of the House Financial Services Committee’s capital markets according to Monica
subcommittee approved two insurance reform bills. By voice vote, the subcommittee the Noether, an executive // Far reaching effects
National Association of Registered Agents and Brokers Reform Act (H.R. 5611), a bill creat- vice president at CRA
ing a national organization for licensing of producers, something originally proposed in the International, a con- The affected subsidiaries from the consolidation of Highmark Inc. and
Independence Blue Cross include:
Gramm-Leach-Bliley Act, a financial services reform measure, several years ago. sulting firm.
First Priority Life Insurance Co. Keystone Health Plan West
70% market share Gateway Health Plan United Concordia Cos.
AugustPicks IFAwebnews.com/Pennsylvania
“When competi- HM Casualty Insurance Co. United Concordia Dental Plans
HM Health Insurance Co. of Pennsylvania
■ Philadelphia mayor joins other city leaders in call for universal health tive entry is difficult, d/b/a Highmark Health United Concordia Life and
as appears to be the Insurance Co. Health Insurance Co.
Mayors of some of the nation’s biggest cities, including Philadelphia Mayor Michael
case in Pennsylvania, HM Life Insurance Co. QCC Insurance Co.
A. Nutter, are pushing for some type of universal health program to support the Highmark Casualty Insurance Co. Keystone Health Plan East
a single company
uninsured and help bail out residents faced with skyrocketing premiums. Highmark Senior Resources AmeriHealth HMO
with more than 70% HMO of Northeastern Vista Health Plan
■ Pennsylvania, New Jersey men indicted on fraud charges of the market is likely Pennsylvania Region 6 RX Corp.
Two former New Jersey insurance agents were recently indicted along with two to have the ability to d/b/a First Priority Health
Pennsylvania men on charges that they stole hundreds of thousands of insurance exert market power,
premium dollars and left insurance customers without valid insurance. which means they
possess the ability to profitably raise However, because of Highmark’s domi-
■ Pa. passes bill giving insurance commissioner authority over merger
price or reduce quality, innovation or nance in the region, the company comes
The Pennsylvania Senate and House of Representatives passed a bill authorizing
choice in ways that can harm con- back to buy the business with a still-lower
the Pennsylvania insurance commissioner to approve or reject the proposed
sumers,” Noether testified. bid, she said.
merger of the state’s two largest health insurers.
The companies disputed that num- “This sounds like good news for the
ber, saying it was unclear how Noether members, who will save on their health
IndustryPicks came to that conclusion. Furthermore, insurance costs,” Bernaciak said. “The
Each day our editors deliver the most important and relevant national insurance industry news to
Kenneth Melani, president and CEO of irony is that the lower rates will only be
post at IFAwebnews.com. These stories only appear online at IFAwebnews.com.
Highmark, said the merger would boost offered because Highmark faced com-
the market because it will have 18,000 petition from my company, United-
Health IFAwebnews.com/Health employees between the two companies; Healthcare.”
■ Bipartisan bill submitted for universal healtht provide $113 million in paid taxes; and State Sen. Don White, a Republican
provide $1 billion in savings that will go who chairs the Senate Banking and In-
■ Number of people without access to care continues to grow, report says
back to cutting health care costs. surance Committee, has been one of the
■ PEOs, outsourcing of human resources functions pose threat to health agents “The proposed transaction will not re- most vocal critics of the proposed merger.
duce competition or choice in any mar- White has asked federal lawmakers to
Life Insurance IFAwebnews.com/Life ket in Pennsylvania,” Melani said. “Sim- take more of an active role in scrutinizing
ply put, the two companies and their the proposal.
■ Life insurers forging closer marketing ties with banks Pennsylvania insurance subsidiaries do “Make no mistake: This merger will
■ CFP board says new standards will give 'greater measure of confidence’ not compete with each other.” eliminate competition now and in the
to consumers future,” White testified. “It is absolutely
Facing the national carriers unfathomable that it won’t eliminate ex-
■ Penn Life to pay $925,000, offer restitution to settle unsuitable annuities
Neither disagreed and said Highmark isting and potential competition.”
sales allegations and IBC do not compete because they Executives from both companies said
had a 10-year non-compete agreement they would not seek to be for-profit enti-
Property-Casualty IFAwebnews.com/Property that expired on the “eve of their an- ties. Both companies operate as non-
nounced plan to combine.” The deal, profit health insurers. IFA
■ Without contingent commission agreement change, Willis could not acquire
covering the five-county region of
HRH, Willis CEO says Greater Philadelphia, ended in 1996, of- Want more on the merger?
■ Lawmaker proposes program to help homeowners in vulnerable areas ficials said. For more coverage of the proposed
for disasters Melani countered that the combined merger, including articles about each day’s
companies will also be able to better hearings and breaking news, go to the best
■ Smallest agencies, brokers face biggest threat with distribution consolidation compete against some of the national car- source, IFAwebnews.com/Pennsylvania.

Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 11
 Excellent products.
High compensation. COMPANYNEWS
Great service. Insurance & Financial Advisor | IFAwebnews.com

Fireman’s Fund receives social responsibility award

Property/ In recognition of the achievements of Fireman’s Fund Insurance Co.’s corpo-
Casualty rate philanthropy initiative, Fireman’s Fund Heritage, the company was
awarded a 2008 American Business Award for Best Corporate Social Responsibility Pro-
gram in the nation.

The insurer donated more than $18 million to more than 1,000 different fire
departments across the country, according to Fireman’s Fund. The Fireman’s Fund Her-
itage program was designed to provide needed equipment, training and educational
tools to local fire departments.

Farmers Group puts company history on display

Property/ Farmers Group Inc.’s board of governors recently dedicated The Farmers
Casualty Heritage Center to celebrate 80 years of history since the founding of the
company in Los Angeles, Calif.

The center, located at the University of Farmers in Agoura Hills, Calif., displays thousands
of pictures, memorabilia, mementos, signs, film, publications and buttons detailing the
company’s history.
At the center’s dedication, seven long-time members of the Farmers Insurance Cos.
were honored. They included Charles Brisco, the first Farmers insured, and Duane Gen-
gler, who earned every district production, size and profitability record in the organization
during his nearly 40-year term as a Farmers district manager.

MetLife honored for its multicultural hiring efforts

Life MetLife was recognized by Working Mother magazine as a 2008 Best Com-
Insurance pany for Multicultural Women for the third year in a row. The initiative
celebrates employers that are establishing groundbreaking diversity policies and
Spend more time prospecting programs to encourage the hiring and advancement of African-America, Hispanic, Asian-
and less on paperwork: American and Native American women, according to MetLife.

• A team of professionals that understands your needs This year’s winners had to complete a detailed application process, with questions focus-
• Fast service on new applications ing on the representation, recruitment and retention of women of color, MetLife said.
• Expertise to find the best solution for special situations
• 24-7 access to forms, quotes, software, application
submission, and carrier and product information
Aetna unveils new physician relations principles
Health Aetna recently unveiled its Guiding Principles for Physician Relations, which
• Access to advanced commissions, bonuses, incentives Insurance formally define the company’s continued commitment to building its rela-
• Real-time case status using our EStatus web page
tionships with the medical community.
• Easy online contracting
The principles coincide with the expiration of the Physicians Settlement Agreement with
Let us help you build your business with: Aetna and are relevant at a time when concerns about health care access, quality and
affordability are on the minds of Americans, the company said.
• Annuities • Impaired Risk •Disability
• Life • Long-Term Care Among the items that Aetna committed to are allowing physicians to terminate from the
company’s network 90 days after giving notice, with no need to show cause; maintain-
ing the Physician Advisory Board, which provides advice on issues of importance to
Underwriting Specialists, Inc. doctors; and not using all-product or “gag” clauses in contract.
Serving the brokerage community since 1975
215-540-4470 www.undspec.com
800-652-5700 info@undspec.com
Gen Re opens liaison office in India
Office Gen Re recently opened a new liaison office for life/health reinsurance busi-
in partnership Expansion ness in Mumbai, India. The official opening ceremony was held at the Taj
Mahal Hotel in Mumbai, where several senior managers of the Indian life insurance
industry came together with a group of Gen Re senior managers.

For the latest Company News, go to IFAwebnews.com.

12 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008
Pa., N.J. better than rest of nation with uninsured // NEW PRODUCT

Unum expands small

CDC report shows mid-Atlantic region had 12.2% people without health coverage business program to Phila.
Unum added a new program, Simply
Pennsylvania and New Jersey are doing under age 65 in the United States had centage of uninsured individuals un- Unum, for Philadelphia and 40 other
better than other parts of the country private health insurance, whereas 13.2 % der age 65 in 2004-2006 and the South- cities.
with the number of uninsured, according had insurance through Medicaid or State west had the highest, according to a re- The launch began in April after a pilot
to a report from the Centers for Disease Children’s Health Insurance Program and port from the Centers for Disease phase during which sales for Simply
Control and Prevention’s National Cen- Unum were nearly 60% ahead of projec-
ter for Health Statistics. tions, company officials said. To date,
Pennsylvania, New Jersey did well in covering Overall, 91.1% of New Englanders had nearly 1,000 lines of coverage have been
those under age 18 and under age 65. some kind of health insurance in 2004- sold through the Simply Unum offering,
2006. The Southwest had the greatest company officials said.
Control and Prevention’s National Center 3.4 % had other types of public coverage, proportion of uninsured – 18.2% of chil- Designed specifically for small to mid-
for Health Statistics. leaving 16.6% uninsured during the dren and nearly 30% of adults. size businesses, Simply Unum provides
The mid-Atlantic, which included the 2004-2006 period. The report is based on data collected group disability and life insurance cou-
two states, had an uninsured percent- from 240,000 people under age 65 as part pled with voluntary benefits. More than
age (12.2%) lower than U.S. overall New England was best of the 2004-2006 National Health Inter- 28,000 product combinations possible,
(16.6%), according to the report. New England had the lowest per- view Survey. IFA company officials said. IFA
Delaware had a sample size that was
too small and was excluded from the
state-specific analysis.
Pennsylvania ad New Jersey also per-
formed better than the rest of the nation
with the percentage of people under 65
years of age who were uninsured, and
the percentage of children under 18 years
of age who were uninsured, covered by
private health insurance, or covered by
Medicaid or SCHIP. Pennsylvania Gov. Ed
Rendell is further trying to combat the
problem through a sweeping program
called, “Prescription for Pennsylvania,”
and New Jersey has taken steps toward
universal health care with a bill, expected
to be signed by Gov. Jon Corzine, that ex-
pands health insurance program for low-
income families.

Employers must help

“New Jersey can no longer afford to
provide health care for individuals whose
employers refuse to provide even a min-
imum amount of health benefits,” said
New Jersey Sen. Sweeney, a Democrat
serving Gloucester, Cumberland and It’s no secret what GBS stands for. As a benefits plan administrator that offers self-funded
Salem and chair of the Senate Labor products, we provide you with strategic advantages to attract and retain clients. Partner with us
Committee. “Over half of New Jersey’s 1
for innovative product and plan designs, advanced technology and superior service. To find out
million uninsured individuals either
work or have a family member who more about us – and to gain your competitive advantage – give us a call. GBS stands for you.
works, yet are not provided with health
benefits. It’s time for large employers to
meet their responsibilities and provide
health care benefits.”
New Jersey did not perform as well
as the rest of the nation for the per-
centage of persons under 65 years of
age who were uninsured at the time of
interview, by percent of poverty level 6 North Park Drive, Suite 310, Hunt Valley, Maryland 21030 800.638.6085
coming in at 35.1%, compared to 2400 Research Blvd., Suite 420, Rockville, Maryland 20850 800.359.9065
29.7% nationally
email: sales@gbsio.net www.gbsio.net
Nationally, 67.8% of the population

Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 13
 Revised, refreshed.
Retrieve. Find It Fast. Even more news – updated daily – is only a click away.
The new and improved IFAwebnews.com delivers even more
of the local, regional and national insurance news and industry
information that you have come to expect from us. But that’s just
part of the story. IFAwebnews.com also boasts a wide range of
information and resources that beyond the printed page.

Quick Access
Our top navigation
enables you to go Timely Analysis
where you want at
Two Tools of the
any time, whether
Trade blog gives
it’s local news, our publisher and
national news or the executive editor a
many other features chance to dig
of the Website. deeper than the
headlines with
commentary ranging
from the serious
to the sublime.

Regional News
Get a quick read
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or click on any area Advancement
to get all of
its latest news. IFAwebnews.com
has partnered
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offer job postings,
as well as courses
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education credits
and designations.

14 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008
 PeopleNews Insurance & Financial Advisor

The Philadelphia Chapter of the Char-
tered Property Casualty Underwriting
Society announced its 2008-2009 officers
and directors. The new officers are Presi-
dent Dawn Upperman, President-Elect
Kellie Goldfien, Vice President Shannon
Rodgers, Secretary Cindy Wolkiewicz
and Treasurer Larry White. The new direc-
tors are: Margo Turtureja, Donna
O’Brien, Mayleen Gallagher, Michael
Etemad, Theresa Gregory and Anita
Devan.
Patrick T. Cassidy was
named vice president
and managing director
opment, education and organizational Wright was with Aon Risk Services. Harleysville Insurance Co. made several
effectiveness initiatives. staff additions. Theodore A. Majewski
Allstate recently gave out several awards
was named president and chief operating
Geraldine Henley was appointed vice at the sixth annual Allstate Leaders
officer of Harleysville Life Insurance Co.;
president and director of claims for Com- Forum. Among the recipients were: Ren-
Beth Friel was named vice president of
merce Insurance Services. Previously, nel Rodarmel, an exclusive agency owner
human resources for Harleysville
Henley worked for the Graham Co. in from Williamsport, Pa., who was inducted
Insurance; Danielle Bartosiewicz was
Philadelphia, Pa. into Allstate’s 2008 Hall of Fame; Neil
named assistant vice president of
Greco of Roseland, N.J., who was recog-
York, Pa.-based E.K. business planning and analysis; and Vere
nized as one of three top performing
McConkey & Co. Inc. Bryan as vice president commercial lines.
Allstate exclusive agency owners with a
announced several
2007 Best in Company Award; and Mark Kevin W. Conboy was hired as chief
recent staff additions,
VanArnam of Aston, Pa., who secured his executive officer by The NIA Group,
nominations and
Best in Company honor as Allstate’s high- based in Paramus, N.J. Conboy is the for-
awards: Karen Mum-
est producing personal financial mer president and CEO of Acordia.
mert was nominated to
representative for 2007. (Continued on Page 16)
the board of directors of

Dependable?
of Wilmington Trust of Karen Mummert
the Central PA Chapter
Pennsylvania. Cassidy
of the Construction
works in WTPA’s
Financial Management
Philadelphia office.
Association. Mummert
William J. Shelow Jr. Patrick T. Cassidy leads McConkey’s con-
was appointed president struction/surety division.
of Duncan Financial Group’s Virginia- Barbara Matthie was
based subsidiary, Atlantic Financial named Ambassador of
Group. Shelow previously served as presi- the Year by the York Barbara Matthie
dent and chief operating officer of County Chamber of
Harleysville Life Insurance Co. in Pennsyl- Commerce. Matthie is an account execu-
vania. tive with York, Pa.-based McConkey.
Karen Sterner earned her Life and Health
Chris Vincent joined
license. Sterner is a select account admin-
Devon, Pa.-based Bala
istrator with McConkey Benefits &
Financial Group as a
Financial Services.
financial representative.

Is this how other

The company is a mem- Lincoln Financial Group appointed
ber of John Hancock Bobby Greenberg, Austin Rosenthal and

carriers deal with

Financial Network, a Todd Manke to head the innovation initia-
Chris Vincent
national network of inde- tives for its Retirement Income Security

an emergency?
pendent career firms. Ventures group, a research and develop-
ment.
Harry A. Dinger Jr. was
appointed to senior vice Brandon Shuman
president and surety joined Murray Risk
practice leader for Hilb Management and
Rogal & Hobbs Co.’s Insurance as a commer-
Metro Northeast region, cial producer in the
which includes New company’s Quarryville,
Jersey and southeastern Pa., branch office. Previ- At Denex Dental, dependability is more account management team that keeps
Harry A. Dinger Jr.
Pennsylvania. Dinger ously, Shuman worked Brandon Shuman than just a claim. It has been proven the issues off your desk. Wa nt
has more than 25 years of experience in as a commercial account since 1965. dependable? Choose Denex Dental.
the field. representative for a local broker and as a
mature market associate manager for AIG. From unrivaled plan flexibility down to See how 43 years of experience makes
Mindy Colby was named as an exclusive
3 life groups, to a straightforward us the dental carrier you can depend on
agent for Allstate New Jersey Insurance. Donald W. Wright Jr.
enrollment process, to a dedicated at www.denexdental.com
was appointed manag-
Donna M. Denver was named senior vice
ing director and casualty
president of learning, development and
practice leader for Hilb
process improvement at Harleysville
Rogal & Hobbs Co.’s
Insurance. In her new role, Denver will be
metro northeast region, Please call Sales Support at 866-433-6398 or visit our
responsible for enhancing the quality of www.denexdental.com
which includes New
the company’s workforce through the
Jersey. Previously, Donald W. Wright Jr.
implementation of learning, career devel-

Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 15
 PeopleNews Insurance & Financial Advisor

(Continued from Page 15) tive Insurance Group Inc., made several for the Chubb Corp. before joining Selec- Manufacturers Insurance. Also elected
recent appointments: Fred J. Ferraro was tive in 2005. Deborah J. Gangemi was were Mitchell Livingston as assistant
appointed senior vice president and equity appointed assistant vice president of the secretary and counsel and Ryan Diehl as
Paula Mayers Styles joined GAB Robins
portfolio manager. Previously, Ferraro was flood service center. Gangemi joined actuary.
North America Inc. as director of learning
an analyst with J.P. Morgan. Robert J. Selective in 1999. Debra H. Paziora was
and organizational development for North
Butler was made vice president of flood appointed assistant vice president and
American Operations. She was a senior
operations. Previously, Butler served as bond underwriting manager. Pazoria joined
learning consultant at Horizon Blue Cross.
assistant vice president of flood Selective in 2005.
Mary Jane Wharton operations. Cynthia B. Heismeyer was
was named 2008 Insur- appointed vice president of marketing and
ance Woman of the Year communications. Heismeyer joined Selec-
by the Insurance tive in 1986. Alison J. Mahan was made
Women of Sussex vice president of business operations. Prior Brian F. McKittrick J. David Scott
County, Del. Wharton is to this appointment, Mahan served as
Several financial profes-
a personal lines team assistant vice president and manager of
sionals with Devon,
supervisor with personal lines operations. Bruce B. Mona-
Mary Jane Wharton Pa.-based Bala Finan-
Atlantic/Smith, Crop- han was appointed vice president of Clarence Kegal Marla Redding
cial Group qualified for
per & Deeley. internal audit. Prior to joining Selective,
the ACE Awards. They
Monahan was assistant vice president at Murray Risk Manage-
William D. Gruccio was promoted to sen- are: Marc J. Lowen-
Liberty Mutual Group. Steven M. Pass- ment and Insurance,
ior vice president of The Penn Mutual Life berg, Brian F.
man and John E. Wisinger were made based in Lancaster, Pa.,
Insurance Co.’s career agency system. McKittrick, J. David
vice presidents and assistant general coun- named three new assis- William Wilk
Previously, Gruccio was vice president of Scott and William Wilk.
sels. Most recently, Passman served as tant vice presidents.
the CAS.
managing attorney for Selective’s East Clarence Kegal was
Selective Insurance Co. of America, a Hanover Staff Counsel Office. Wisinger previously an account Send Your News!
subsidiary of Branchville, N.J.-based Selec- was vice president and associate counsel Marsha Quade
executive in Murray’s • The easiest way to submit events is online:
commercial sales and
services division. Marla Redding was a
Phone: 215.227.2024 Fax: 410.667.7977
sales and service support supervisor in the Email: edit2@IFAwebnews.com
construction services division prior to being
promoted to assistant vice president. Mar-
sha Quade was previously a human // PROPERTY/CASUALTY

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The National Association of Insurance
and Financial Advisors—Pennsylvania
elected the following leaders to 2008-1009
at its annual convention in Harrisburg: Ran-
Dianne Sprague dall Kaufmann as president; William
Sr. VP & Principal
Krause as president-elect; Joseph G.
Marrazzo Jr. as vice president; and Jason
Muskey as secretary. Kathleen Nieder-
mayer, Tracy Rush and Brad Small were
elected to the board of directors. John C.
Hynes, Robert Donlan, Darrell Westby
and Frank Lazarus were elected as
regional vice presidents.
Christopher J. Maguire was appointed as
the chief operating officer for Philadelphia
Insurance Cos. Maguire served as the
company’s executive vice president and
chief underwriting officer since February
2003.
Fred Gismondi joined Allstate New Jer-
sey as an exclusive agent.
Michael O’Neil and Lee Bellarmino were
elected as vice presidents of New Jersey
New BOP set for smaller,
property-driven risks offered
Harleysville Insurance introduced
its new Businessowners Program, which
targets smaller, property-driven risks in
hundreds of different business classes,
according to the company. Market seg-
ments targeted include habitational,
mercantile, office, service/processing
and wholesalers. The product was intro-
duced under Harleysville’s StarAdvantage
banner in Pennsylvania and New Jersey.
The new program includes class-spe-
cific enhancements for funeral directors,
printers, professional offices and veteri-
narians, as well as options that can fur-
ther tailor coverage to the specific needs
of clients within the core business classes
typically written by the company’s
agents. Higher liability limits—up to $2
million per occurrence with a $4 million
aggregate—are also available.
Coverage for actual loss of equipment
breakdown and spoilage from a power
outage are included in the policy. IFA

16 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008
 LEGALBRIEFS Insurance & Financial Advisor | IFAwebnews.com

Penn Life agrees to unsuitable annuities fine

Life Pennsylvania Life Insurance Co. agreed to a $925,000 fine and to offer resti-
Insurance tution to up to 2,200 purchasers of annuities that Wisconsin regulators say
were unsuitable.
The Wisconsin Office of the Commissioner of Insurance said Penn Life sold more than
$55 million in annuities that may have been unsuitable, mostly to Wisconsin senior citi-
zens, between 2000 and 2007.
Under the settlement agreement, Penn Life is ordered not to sell annuities in Wisconsin
for four years, comply with Wisconsin law regarding suitability and sales practices and
supervise its insurance agents to ensure compliance with the law. Penn Life also agreed
that Wisconsin officials may revoke its license to do business in Wisconsin if it is deter-
mined to have materially violated the settlement agreement.
The settlement also requires Penn Life to offer up to 2,200 Wisconsin consumers who
were sold annuities or asset enhancer policies by its agents or brokers the opportunity to
have their purchase reviewed by an independent remediation firm. If it is determined
that the sales was improper, the consumer will be offered remediation according to the
terms of the settlement.
with SAVOY ASSOCIATES.
State Farm wins case in Texas appeals court
Property/State Farm Insurance won a case in a Texas appeals court against the
Casualty state’s Department of Insurance in a dispute over the company’s
homeowner’s insurance rates. As a leading health and ancillary general agency, Savoy
The dispute involved a 2003 order by the insurance department that State Farm lower its
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rates by 12%. The department said that the company was overcharging its customers
by that percentage, according to written reports. with our continuing education programs, online knowledge
State Farm refused to lower its rates, and the legal fight that ensued over the past five base, expert advice, and renowned industry professionals
years brought the total of the alleged overcharges to $650 million, reports said.
The appellate court found unanimously in favor of the insurer, saying that it was denied
- all at your service. And our unique team-based structure
due process when the department ordered it to lower its rates. gives us the flexibility to personalize the type of assistance
State Insurance Commissioner Mike Geeslin will be charged with reviewing State
that works best for you and the business owners who put
Farm’s rates again, now using a tougher standard to find out how much the company’s
customers have been overcharged since 2003, reports said. their trust in you.

N.J. allows drivers to sue for emotional distress

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Insurance als may be eligible to sue for emotional harm after witnessing the death or
serious injury of a relative in a car accident, according to written reports. Wield your Talent Elevate your Service
In a 4-3 decision, the court overturned an appeals court ruling in a case involving a
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mother’s death in a car accident. The Supreme Court’s decision means that the verbal
threshold provision in the state law limiting the ability of a driver to sue does not apply in
some cases involving emotional distress, reports said. The Insurance Council of New
Jersey expressed concerns over the implications of the ruling to New Jersey’s auto
Visit our website to learn more and to view our schedule of
insurance reforms, according to reports.
free Continuing Education courses!
Delaware court rules in favor of insurer
Property/ An insurer recently prevailed in a case involving the Delaware City oil refin-
Casualty ery. The state’s Supreme Court rejected an appeal by Premcor Refining
Group and Valero Energy over the ruling that Premcor’s insurance company was only
obligated to cover up to $9 million in compensatory damages for two wrongful death 877.584.8112
actions. In addition, the Superior Court ruled that the insurer was not responsible for cov-
ering punitive damages brought against Premcor in the deaths of two workers in 2005. www.savoyassociates.com

For the latest Legal News, go to IFAwebnews.com.

Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 17

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Insurance & Financial Advisor
Consumer protections lacking
Report says Del., N.J. and Pa. make it hard for individuals to buy health coverage
People trying to buy individual health
insurance in most states, including Penn-
sylvania, Delaware and New Jersey, lack
some consumer protections, often making
it hard to get coverage, or to keep it when
they get sick, according to a recent report.
The report from consumer advocacy
group Families USA was a 50-state survey
of insurance departments that looked at 14
categories of consumer protections to find
to what extent regulatory safeguards ex-
isted in each state as of March of this year.
Pennsylvania and Delaware received
“full credit” in only three categories,
while New Jersey received full credit in
nearly half of the categories.
According to the report, only five
states guarantee that all insurers will sell
all policies to individuals regardless of
health. In 35 states, including Delaware
and Pennsylvania, there are no limits on
how much companies can raise premi-
Producers: 10,000 more licensed in Pa.
From page 1
down slightly nationally. He said one of
possible reasons for the increase is that
more financial advisors are getting li-
censed in insurance to make themselves
even more marketable to clients.
“It used to be a stock broker was a stock
broker,” Taggart said. “And an insurance
agent was an insurance agent. The lines
have somewhat been muddled.”
Pennsylvania did not break the new
producers into their different lines.
Frank Lazarus, vice
president and broker-
age manager of Mass-
Mutual Financial
Group in Bala Cynwyd,
Pa., said the weak job
market is also con-
tributing to the number
Frank Lazarus
of producers in the
state. He said college graduates have less
attractive opportunities in a slow job
market, and many gravitate to financial
services as perhaps a “default career.”
“Some will prosper, others will not, sta-
tistics perhaps not much different than his-
torical results,” Lazarus said. “We continue
to see that banks and brokerage firms are
getting reps insurance licenses, that would
contribute to the growth also.”
However, Lazarus said consolidation
among those firms could eventually slow
| IFAwebnews.com
ums based on an insured’s health status.
In 19 states, consumers have no right to
appeal if their coverage is revoked. And
20 states and Washington, D.C., do not
approve premium rates before they go
into effect.
Pennsylvania was one of five states
commended by the report for guarantee-
ing that at least one designated insurer
will offer coverage or certain policies to all
individuals regardless of their health. The
state was also praised for proposing to
limit private insurers’ profit by suggesting
an 85% minimum medical loss ratio.
New Jersey received full credit for re-
quiring insurers in the individual mar-
ket to spend at least 75 cents of every
premium dollar on medical care, as well
as for being one of only five states re-
quiring insurers to accept all applicants
and prohibiting higher premiums based
on health status. IFA
the rate of growth in the industry with
new producers.
Steven D. Earhart, co-president and
managing partner of Karr Barth Associ-
ates Inc. in Bala Cynwyd, sees a completely
different trend. He has noticed an increase
in non-traditional licensees such as CPAs
and bankers getting licensed, and a de-
crease on the traditional side.
Another part of the business that is
appealing to more people is the oppor-
tunity to work for themselves, Taggart
said. Many financial professionals can
get frustrated working for a huge firm,
and the idea of opening their own busi-
ness appears to be a viable alternative.
“You are seeing a lot of people look to
insurance as a second career, where they
haven’t been 20 or 30 years,” Taggart said.
“A college graduate who enters into the
corporate marketplace can find it very
unappealing because they are not able to
control their own destiny. That is where
you are seeing the market grow.”
Taggart said universal health care and
uncertainty with an optional federal
charter should not be a deterrent for new
people to enter the industry.
“Most of us view ourselves as part of
the solution and not part of the problem,”
Taggart said. “One of the most frustrating
aspects is the ever-increasing rates, which
are driven by several things like mandates
and unnecessary lawsuits.” IFA
August 2008
 On the Hill
News From The Nation’s Capitol
House committee passes
natural disaster measure
The House Financial Services Committee
approved the Community Building Code
Administration Grant Act of 2008, designed
to encourage communities to establish and
enforce strong building codes by offering
federal grants.
The Independent Insurance Agents & Bro-
kers of America supported the measure
because “strong building codes are the first
defense against the damage caused by nat-
ural disasters, said Charles E. Symington Jr.
senior vice president of government affairs
for the Big I.
The bill introduced by Rep. Dennis Moore
(D-Kan.) would establish a Community
Building Code Administration Grant
Program, which would provide awards to
local governments for building code admin-
istration and enforcement. The bill
authorizes the program to give out $100
million over a five-year period, with awards
capped at $1 million per jurisdiction. States
and towns will also be required to match a
portion of the funds awarded, and the bill
outlines eligible uses of funds and selection
criteria, with preference offered to govern-
ments in financial distress.
NAIC member testifies on
Office of Insurance Information
Illinois Insurance Director Michael T. McRaith
testified recently before the U.S. House Sub-
committee on Capital Markets, Insurance
and Government Sponsored Enterprises
about legislation that would establish a fed-
eral Office of Insurance Information.
McRaith testified on behalf on the National
Association of Insurance Commissioners,
according to reports.
State insurance regulators support the bill’s
objectives of allowing a federal agency to
work with state insurance regulators to
receive and analyze industry data and estab-
lishing a central point of contact in the
federal government for foreign governments
regarding international insurance matters,
reports said.
McRaith said in his testimony that state
insurance regulators support efforts to
“help U.S. insurers compete globally,” but
Southeastern Pennsylvania / New Jersey / Delaware
associationnews
added that they would object to the OII
“or any other federal entity having the
authority to preempt consumer
protections and solvency standards
adopted by the states.”
Millions eligible, but not
enrolled in SCHIP
About 25% of Americans who do not
have health insurance are eligible for pub-
lic insurance coverage but are not signed
up, according to a report by the National
Institute for Health Care Management.
Half of the nearly 12 million Americans who
are eligible for public programs are children. Del. agents award two $1,500 scholarships
Alex Hahn, a Caesar Rodney High School student from Camden-Wyoming, Del., and Amanda John-
Reasons cited for the lack of enrollment in ston, a Caravel Academy student from Middletown, Del., received $1,500 Joann Scott Memorial
programs like Medicaid and the State Chil- Scholarships from the Delaware Association of Insurance Agents & Brokers. Joann Scott was em-
dren’s Health Insurance Program are that ployed by Kinnamon Taylor and Dawes, of Wilmington, Del. She was active in the DAIAB and dedi-
many people are unaware of the existence cated to furthering the education of independent insurance agents. Pictured (from left) are John Yasik,
DAIAB chair, Amanda Johnston, Alex Hahn and Denise Kozel.
of the programs or their eligibility, as well as
a concern about the stigma of enrolling in Send photos of your company events and happenings: edit@IFAwebnews.com
public health programs.
Most of the people who could be receiving
publicly funded health coverage but are not
participating are from low-income families.
Insurance fraud groups, federal
Supreme Court refuses investigators to join forces
to hear life benefits case Three insurance fraud groups and two • Influencing the public policy debate
federal agencies have joined forces to de- and shaping the future agenda;
The U.S. Supreme Court chose not to rule
velop strategies to uncover scams. • Maximizing the objectives of various
on a case of a widow denied $426,000 in
The so-called Consortium to Combat associations.
life insurance benefits because federal
Medical Fraud is a joint project of the “These criminals are smart – they
retirement law does not permit her to seek
Coalition Against Insurance Fraud, the leverage cutting-edge technology to
compensation, according to reports.
National Health Care Anti-Fraud Associ- probe for the soft under- belly of the
The woman, who lives in Houston, wanted ation and the National Insurance Crime health care system. As a result, we need to
the court to rule that her husband’s Bureau. The group also is working with modernize our approach to combating
employer breached its fiduciary duty. the FBI and the Department of Justice, to them,” stated Dennis Jay, Executive Di-
aggressively pursue people or groups that rector, Coalition Against Insurance Fraud.
Under the Employee Retirement Income
commit medical fraud. “Never before The Consortium also will put together
Security Act of 1974, beneficiaries are enti-
have different parts of the insurance sys- joint educational programs designed to
tled to sue to obtain equitable relief,
tem cross-pollinated to seek new ways help property/casualty insurance and
including a court injunction or restitution.
to prevent fraud. This approach will health insurance investigators learn each
However it does not include legal relief or
break down barriers and increase aware- others techniques and strategies in or-
monetary damages.
ness across insurance lines so that we der to encourage cooperation across
The 5th U.S. Circuit Court of Appeals ruled share information and coordinate our lines of insurance in detecting and in-
that ERISA prohibited her from seeking approach more systematically,” said vestigating fraud. It will also conduct in-
the monetary damages equaling the insur- Louis Saccoccio, executive director of the dustry-wide research focused on gather-
ance benefit. National Health Care Anti-Fraud Associ- ing information across lines of insurance
ation. to better understand the current trends
Aetna denied the woman, Melissa
This Consortium has already devel- seen in insurance fraud.
Amschwand, benefits because her sick hus-
oped a strategy to help catch fraud by: The first study is scheduled to focus on
band never returned to work. To trigger the
• Sharing information across industry state medical boards to evaluate how well
life policy, he needed to return for at least
and among stakeholders; they are disciplining licensees who com-
one day.
• Leveraging industry best practices; mit fraud. IFA
Insurance & Financial Advisor | IFAwebnews.com August 2008 | 19
 Calendarof Events
■ August
1-3 – Life/Health Pre-licensing
Course. 8:30 a.m.-5 p.m. Pittsburgh, Pa.
Contact: Diana Ruslander, 412-242-8140, or
email, info@ruslanderassociates.com.
5 – Underwriters Marketing Service
Annual Sales Symposium. Trump Taj
Mahal Hotel & Casino, Atlantic City, N.J.
Contact: 800-524-1774.
6-8 – James K. Ruble Graduate
Seminar – IAB-Delaware and
Pennsylvania, PIA. Hershey, Pa. Contact:
717-795-8347, or email, iab@iabgroup.com.
8-10 - Life/Health Pre-licensing
Course. 8:30 a.m.-5 p.m. Pittsburgh, Pa.
Contact: Diana Ruslander, 412-242-8140, or
email, info@ruslanderassociates.com.
■ September
11 – Commercial Lines Coverage
Basics-online course – PIA-NJ.
Contact: 800-424-4244.
11 – Beyond the Basics: Garage
Liability and Commercial Umbrellas –
PIA-NJ. Contact: 800-424-4244.
11 – New Employee Orientation for
Agency Personnel-online course –
PIA-NJ. Contact: 800-424-4244.
11-13 – James K. Ruble Graduate
Seminar – IAB-Delaware and
Pennsylvania, PIA. Erie, Pa. Contact:
717-795-8347, or email, iab@iabgroup.com.
12 – Personal Lines-Homeowners’,
Auto & Umbrella – IAB-Del. 7:30 a.m.-5
p.m. Embassy Suites Newark/Wilmington
South, Newark, Del. Contact: 800-998-9644,
or email, iab@iabgroup.com.
12 – Property & Casualty Licensing
Study Course – IAB-Pa. 7:30 a.m.-5 p.m.
Hilton Garden Inn, Ft. Washington, Pa.
Contact: 800-998-9644, or email,
iab@iabgroup.com.
18 – Golf Outing – GPAHU. Philadelphia
Country Club, Gladwyne, Pa. Contact: Karen
Grades: Pa. fares worse than N.J. and Del.
From page 1
in Washington, D.C., and The Heartland
Institute, a nonprofit research and edu-
cation organization, used data collected
in 2006 to rank how free consumers are to
decide what insurance products meet
their needs and how free insurers are to
provide products that meet consumers’
needs. The ranking system was similar
to a school grading system, with “A” being
the highest grade a state could receive
and “F” being the lowest.
The study focused on homeowners
and automobile insurance
Pennsylvania’s “D” rating was based
in part on its system of rate regulation.
The state requires regulators to pre-ap-
prove all rates, which tends to lower rates
for groups that take large risks and raise
rates for those who avoid risks, according
to the report. In addition, the state scored
low because it bans the territorial rating
of property.
20 | Southeastern Pennsylvania / New Jersey / Delaware
Mardis, kwmardis@gpahu.net.
20 – Board Meeting – IIAB-N.J.
Forsgate Country Club, Jamesburg, N.J.
20 – CISR-Agency Management
Institute – IAB-Pa. Crowne Plaza Valley
Forge, King of Prussia, Pa. Contact: 800-998-
9644, or email, iab@iabgroup.com.
20 – DI Day Training Webinar: Special
Risk Insurance - The Plus Group. 2-
2:30 p.m. Contact: 800-995-6532, or email,
greg@fsgbrokerage.com.
22-24 - Life/Health Pre-licensing
Course. 8:30 a.m.-5 p.m. Pittsburgh, Pa.
Contact: Diana Ruslander, 412-242-8140, or
email, info@ruslanderassociates.com.
4 – Annual Golf Outing – IIA-Essex
and Passaic Counties. Cedar Hill Golf
Course, Livingston. N.J.
6-9 – 64th Annual Meeting &
Seminars – CPCU. Philadelphia Marriott
Downtown, Philadelphia, Pa. Contact: 800-
932-CPCU.
8 – PIA-NJ Golf Classic. 10 a.m.
Knickerbocker Country Club, Tenafly, N.J.
Contact: Terri Vierschilling, 800-424-4244,
ext. 273.
8 – Delivering Quality Service to the
Customer and Employer-online
course – PIA-N.J. Contact: 800-424-4244.
8 – Beyond the Basics: Commercial
Property Policy – PIA-NJ. Contact: 800-
424-4244.
Send Your Events!
• The easiest way to submit events is online:
Phone: 215.227.2024 Fax: 410.667.7977
Email: edit2@IFAwebnews.com
File-and-use favored
“People who build houses on sand
dunes should expect to pay higher
homeowners insurance rates than those
who live well inland,” Lehrer said in the
report. “Those in neighborhoods
plagued by auto theft and vandalism
should expect to pay higher automobile
insurance rates than those in more se-
cure neighborhoods.”
In contrast, New Jersey’s “B” rating
was the result of the state recently
changing to a file-and-use system of set-
ting rates, as well as seeing a decline in
automobile insurance premiums. New
Jersey also said that it will shrink its
residual automobile insurance market,
according to the study.
In addition, the study found that New
Jersey maintains “highly competitive
markets” and limits territorial rating.
Research focused on regulatory envi-
ronments instead of regulators. IFA
Insurance & Financial Advisor
Life Insurance
Financial Services
Study: Buying LTC
insurance sooner is better
Up to 33% of applicants over 60 denied coverage
Significant benefit is found in starting 10% to 20% each year.
the planning process of buying long- “The savings can amount to hundreds
term care insurance in prior to reaching of dollars a year for a couple,” Slome said,
retirement age, new research finds. “and they won’t be taken away in the future
Research conducted by the American should your health change.”
Association for Long-Term Care Insur- About 8 million Americans have long-
ance, a national professional trade or- term care insurance protection on an in-
ganization, examined data from 10 in- dividual basis or through their employer.
surers to determine the
percentage of long-term care Percentage of LTC Applicants
insurance applicants who Who Qualify for Good Health Discount
qualified for preferred health
Age of Applicant Avg. 2007 Avg. 2005
discounts as well as the per-
Under 30 63.2% 66.5%
centage who did not qualify for
insurance as a result of an ex- 30 to 39 66.3% 61.0%
isting health condition. The 40 to 49 66.8% 53.7%
survey looked at more than 50 to 59 51.5% 44.2%
250,000 people’s experiences.
60 to 69 42.2% 31.9%
“Individuals mistakenly
70 to 79 24.2% 18.8%
think long-term care planning
is something that can wait until 80 and Over 12.9% 11.2%
after retirement, but because of Source: AALTCI
health changes that tend to oc-
cur in our 50s and early 60s, the facts show About 400,000 people obtained coverage in
otherwise,” said Jesse Slome, the associa- 2007, and 83% of individuals purchased
tion’s executive director. before age 65. IFA
Existing health issues matter Insurance stocks losing
Between 20% and 33% of individuals
who submitted an application for long-
$396 billion so far this year
term care insurance between ages 60 and Publicly traded insurance-related or-
69 were declined coverage because of an ganizations followed by the A.M. Best stock
existing health condition, according to the indexes collectively lost $396 billion in
biennial study. market capitalization since the start of
The industry average for declined ap- 2008. But despite a generally downward
plicants between ages 60-to-69 was 22.9%. direction, some insurance organizations
For ages 50-to- 59 it was 13.9%. gained market cap during that same pe-
While insurers can decline individuals riod, according to a story in BestWeek
who apply for coverage with existing U.S./Canada.
health conditions, most reward those who The aggregate market capitalization for
apply while in relatively good health. the 179 companies in the A.M. Best in-
dexes stood at $1.36 trillion as of the U.S.
Preferred health discounts offered
market close on June 26, down from $1.76
About half (51.5%) of individuals who trillion at the start of 2008.
applied and were accepted for coverage A slumping market for equities is re-
last year between ages 50 and 59 quali- making the insurance lineup. American
fied for “preferred health” discounts, International Group Inc., which is weath-
Slome said. These discounts can reduce ering a change in leadership, leads in los-
the cost of long-term care insurance by ing the most market cap value. IFA
| IFAwebnews.com August 2008
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Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 21
HRH-Willis deal only possible because
of N.Y. amendment on commissions
By Bob Graham
The CEO of insurance brokerage
Willis North America told New York in-
surance regulators that its acquisition of
competitor, Hilb Rogal and Hobbs, would
not have occurred if its agreement pro-
hibiting contingent commissions had not
been amended.
The amendment to the agreement
with state insurance regulators allows
Willis to buy companies that have con-
The contingent commissions being accepted by
HRH will be phased out over three years.
tingent commissions in place, but re-
quires them to be phased out.
Richmond, Va.-based HRH offers con-
tingent commissions, but will have to
stop the practice as a result of the
amendment and pending acquisition,
said Don Bailey, Willis’ CEO.
The contingent commissions being
accepted by HRH will be phased out over
the next three years, Bailey said at the
first day of hearings in New York before
the state insurance commissioner and
attorney general’s office about broker
compensation and contingent commis-
sions. The hearings will be held through-
out the state this month.
Bailey encouraged regulators to end
contingent commissions for all broker-
ages, saying transparency wasn’t enough.
“As important as transparency is, it
still isn’t enough. We do not believe that
it is enough to just reveal a practice that
you know is not in your clients’ best in-
terest. That’s not honoring the spirit of
making your clients’ interests para-
mount,” Bailey said.
“We believe compensation should be
paid fairly and in a way that is appropri-
// PRESIDENTIAL POLITICS
Obama picks up where Hillary left off with health insurance
Presumptive Democratic presiden-
tial nominee Barack Obama wants to
offer tax breaks to small business to en-
courage them to provide health insur-
ance to their employees, a proposal that
would cost $6 billion a year, according
to press reports.
The senator’s plan is similar to one
proffered by his former rival, Sen.
Hillary Clinton.
“I’m announcing my plan to provide
22 | Southeastern Pennsylvania / New Jersey / Delaware
ate to the transaction. One of the reasons
we did away with the contingent pay-
ments is because we believe brokers
should not be paid for the volume or
profit of business guided toward a carrier,
but rather for the quality of their service
to clients, such as securing the best pos-
sible coverage and getting claims paid
promptly,” he added.
Ending the practice of contingent
commissions among all companies will
“level the playing field.”
Four years ago, Willis was the first ma-
jor carrier to voluntary stop using con-
tingent commissions as a means of
boosting business. The decision came in
the wake of former New York Attorney
General Eliot Spitzer’s investigation into
the practice, which led to several other
major brokerages, including Marsh and
Aon, eliminating contingent commis-
sions. However, many other brokerages
continue to offer them.
“We have three or four that don’t take
contingents, and tens of thousands who
do. And we struggle with that,” Bailey
said, noting that not taking contingent
commissions puts his company at a
“competitive disadvantage because our
prices appear higher than our competi-
tors, but they usually aren’t.”
Bailey suggested creating “a fair sys-
tem” without contingent commissions in
several ways. First, New York regulators
could force any broker renewing a license
in the state to end the practice of accept-
ing contingent commissions. Another
option is to challenge the insurance in-
dustry to resolve the issue.IFA
real relief for small business owners
crushed by rising costs, an idea champi-
oned by my friend Hillary Clinton, who’s
been leading the way in our battle to in-
sure every American,” Mr. Obama told
the National Council of La Raza, a Latino
group, according to press reports.
Small businesses could earn a refund-
able credit of up to half of the premiums
they pay for their employees, according
to the proposal. IFA
Insurance & Financial Advisor
COMPANYNEWS Insurance & Financial Advisor | IFAwebnews.com
Erie recognized for healthy lifestyle efforts
Company Erie Insurance was recently honored by the National Business Group on
Honors Health, a national non-profit organization of large employers, for its promo-
tion of a healthy workplace and encouragement of a healthy lifestyle for its employees
and families.
Erie Insurance was among 52 employers that received the Best Employers for Healthy
Lifestyles award. The company’s worksite wellness program, Healthy Directions, was
established to provide employees with the means to lead healthier lives. The program
includes lunchtime and after-hours exercise classes, indoor and outdoor walking
programs, corporate discounts to fitness facilities, lunch and learn programs and work-
day stretch breaks, according to Erie.
MetLife animates explanation of insurance
Life MetLife, the nation’s largest life insurer, released a new animated short film
Insurance entitled “Everybody into the Pool.” The film, which features Snoopy, aims
to demystify how insurance works by explaining in simple terms the powerful and effi-
cient financial principle that makes insurance possible and within reach: risk pooling.
With a catchy jingle, the “Everybody into the Pool” film is presented in the spirit of the
Schoolhouse Rock! animated songs from the 1970s and 1980s, company officials said.
MetLife’s new film – available at http://www.youtube.com/MetLife – is designed to help
the American public understand how insurance works and also explains as a public serv-
ice how insurance contributes to the good of society.
Farmers receives PR award for community work
Property/ Farmers Insurance Group of Companies received a Silver Anvil Award of
Casualty Excellence from the Public Relations Society of America. The award recog-
nizes outstanding strategic public relations planning and implementation.
Farmers received the award in the community relations category for its National March
of Dimes fundraising effort in 2007, when 15,000 Farmers agents, employees and their
families raised more than $4.5 million for the year, according to the company.
Liberty Mutual customizes standard policy
Property/Liberty Mutual Property, part of Liberty Mutual Group, enhanced the cov-
Casualty erage selection of its standard policy form to give customers greater
customization and pricing flexibility options. The form combines insurance for property
damage, business interruption and extra expense in one policy.
Other standard coverage enhancements to the RM Select policy include an expanded
definition for personal property of others, a capital expenditure provision and coverage
for computer virus and denial of access that now includes Web site disruption.
Aetna’s CEO testifies on health care system
Health Aetna chairman and CEO Ron Williams recently appeared before the U.S.
Insurance
Senate Finance Committee to address the challenges facing the U.S.
health care system, according to reports.
Williams urged Congress to focus on targeted solutions for improving coverage, quality and
affordability, emphasizing that millions of Americans receive health care coverage through
their employers and millions more through public programs, which could be made to work
better by enrolling all Americans who are currently eligible.”Let’s not pull the rug out from
under the 250 million Americans who have coverage, but rather let’s focus on encourag-
ing solutions that work for each segment of the uninsured,” Williams said.
For the latest Company News, go to IFAwebnews.com.
| IFAwebnews.com August 2008
Nationwide makes appeal for new type of wind/water policy
If approved, flood and wind would be covered in one
home insurance policy
Nationwide Insurance wants to create
a new homeowners insurance policy that
it says would avoid disputes over
“wind/water” issues for policyholders
across the country.
Authorized and regulated by the fed-
eral government, the proposed En-
hanced Homeowners Insurance Policy
would combine the wind insurance cov-
erage of a traditional homeowner policy
with flood insurance coverage similar to
that now offered by the National Flood
Insurance Program into one homeown-
ers insurance policy. Under the proposed
coverage, the private insurance market
would bear the primary responsibility of
paying claims, with the federal govern-
ment acting as a reinsurer and regulator.
“Americans need not suffer through a
catastrophic event lacking the compre-
hensive insurance coverage they need,”
said Jerry Jurgensen, Nationwide’s CEO.
“If Hurricane Katrina taught us anything,
it is that the market needs a home insur-
ance product that covers flooding as well
Group health market remains steady
Growing number of employers are shifting costs to employees to help bottom line
Employee benefits consultants report
little change in the market for group
medical insurance this year, with small,
medium and large employers continu-
ing to shift rising costs to their employees
in an effort to rein in the bill for health
coverage, according to the Council of In-
surance Agents & Brokers.
The cost of group medical care is in-
creasing at almost the same rate as was
reported in November 2007 for renewals,
regardless of the size of the account.
In the latest survey, benefits consult-
ants said 85% of renewals for small ac-
counts, those with 50 or fewer employ-
ees, experienced cost increases, with the
bulk of the hikes (46%) falling in the 11-
15% range. For medium accounts – those
with 51 to 500 employees – 90% of ac-
counts experienced increases, with 36%
seeing increases of 6-10%, and 39% ex-
periencing increases in the 11-15% range.
Three-quarters of the large accounts,
those with 501 or more employees, also
experienced premium hikes for their
group health policies, with most increases
(46%) falling in the 6%-10% range.
Southeastern Pennsylvania / New Jersey / Delaware
as wind damage in one policy.”
If authorized by Congress, those who
purchase the new home insurance product
would be assured that no matter how their
home may be damaged, coverage for wind
and water would be available in one policy.
Following Hurricane Katrina in 2005,
thousands of lawsuits were filed against
insurance companies challenging long-
held homeowner policy provisions that
exclude flood damage as a covered loss.
Even though the courts have upheld the
flood exclusion provisions as legal, Na-
tionwide engaged in conversations with
a variety of stakeholders to find a market-
driven solution to the “flood/wind” prob-
lem and to propose a product that would
meet customer needs.
Needs federal government support
“This solution will need the support of
the federal government to be imple-
mented,” Jurgensen said. “For the bene-
fit of all, Congress should begin the
process to make this new coverage op-
“Most price renewals come out in the
high teens and then are driven down
through plan changes and competitive
data,” one benefit consultant reported.
Among the changes frequently adopted
by employers to keep their medical ex-
penses in check were higher deductibles
and co-pays, increased employee share of
premium costs and assessing prescrip-
tion drug co-pays. Eliminating group
medical coverage was the least popular
cost-control option, with most brokers re-
porting that their clients seek other ways
to address the expense issue.
“The overall trend is to push for plan
changes that increase the employee cost
share, whether it be on the medical side
or the prescription drug side of the ac-
count,” said another.
Although still not a universally pop-
ular option, the brokers said more
clients were expressing interest in mov-
ing all or part of their health benefits
programs to high-deductible health
plans coupled with a health reimburse-
ment account or a health savings ac-
count to help control costs. IFA
Insurance & Financial Advisor
Houses lie in rubble after Hurricane Katrina in Bay St Louis, Mississippi.
tion available as quickly as possible.”
The enhanced homeowner insurance
policy would fold flood coverage into a
new, augmented homeowners policy that
insurers can voluntarily sell and home-
owners can voluntarily purchase. Neither
would be mandatory. The enhanced pol-
icy would be regulated by the U.S. Treas-
// LEGISLATION
Health care advocate bill passes in Pa. House Committee
A bill sponsored by Rep. John Yudichak
that would establish a state Office of Con-
sumer Advocate for Health Insurance to
help protect consumers in insurance
matters and dealing with claims took an-
other step toward becoming a reality af-
ter passing the Pennsylvania House In-
surance Committee.
The measure, House Bill 1121, would
establish the office as an independent or-
ganization within the Office of Attorney
General. The Office of Consumer Advo-
cate for Health Insurance would represent
consumers’ interests on any health insur-
ance matter before the Pennsylvania In-
surance Department, any other state
agency or court. The advocate also would
be responsible for identifying and tracking
trends in the health insurance industry,
recommending consumer protections, re-
sponding to consumer complaints and ed-
ucating state residents about health in-
surance issues and practices.
Yudichak , a Democrat who represents
Luzerne County, originally proposed the
new state office because he said residents
are having a difficult time dealing with
rising costs for health and auto insur-
| IFAwebnews.com
ury Department, which would also rein-
sure the flood portion to make sure that
coverage was financially feasible.
The enhanced policy would be an op-
tion that would increase both customer
choice and customer confidence, Na-
tionwide officials said. The policy would
be an additional option for customers. IFA
ance. He said an advocate, appointed by
the Pennsylvania Attorney General, could
serve as a watchdog over the insurance
industry and take insurers to court for
any type of wrongdoing.
However, opponents of the measure
argued that the Pennsylvania Depart-
ment of Insurance already does a com-
petent job overseeing the industry.
“As the cost of health care increases, it’s
more important than ever to have an
agency to field complaints and work for
fair coverage for consumers,” Yudichak said
after his measure passed the House. “This
office can look into whether insurance
companies are justified in raising their pre-
miums and help save consumers money.”
The office would be similar to the
one that exists within the Public Utility
Commission. Pennsylvania has an Of-
fice of Consumer Advocate within the
insurance department, but unlike the
PUC consumer advocate, the insurance
department’s consumer advocate cur-
rently does not have the authority or
the budget to challenge or litigate in-
surance company rate increases on be-
half of consumers. IFA
August 2008 | 23
 Free Yourself With Health insurance, workers’ comp.
Powerful Solutions From MBS among top small business concerns
Owners worrying about how rising costs
Affordable health plans for groups with two to 50 of insurance affect their operations
employees
Flexible plans, including HSA and HRA solutions Business costs, including the cost of
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Strong network access, including Aetna ASA sation coverage, are among the biggest
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24 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com
rating received. The 75 business prob-
lems evaluated are organized into 10
problem clusters with each cluster con-
taining all of the problems relating to a
single topic.
Half of the top 10 problems worrying
small business owners appear in the
“costs” cluster, with the cost of health in-
surance continuing its 20-year reign as
the number one problem for small busi-
ness owners. More than 56 percent say it
is a “critical problem.” Other cost issues
in the top 10 include the cost of fuels and
electricity, supplies, inventories and
worker’s compensation insurance.
“For four years, the economy provided
a good, stable foundation for small busi-
ness owners to do business, but as it
started to take a negative turn over the
last several months, they felt the effects of
rising costs of doing business as reflected
by these results,” said Bruce D. Phillips,
senior fellow at the NFIB Research Foun-
dation and co-author of the report with
NFIB Policy Analyst Holly Wade. “As the
economic outcome remains uncertain,
small business owners are searching for
innovative ways to reduce expenses and
increase sales.”
The remaining top 10 problems fall
into the “tax” cluster, including: federal
taxes on business income, property tax
(real, inventory or personal property), tax
complexity and state taxes on business
income. Tax complexity, a new problem
on this year’s survey, ranks fifth on the
survey and is a “critical” problem for 23
percent of business owners.
“As the economic downturn persists,
small business owners are even more
challenged by the costs of health insur-
ance and the complexity of taxes,” said
Rebecca Macieira-Kaufmann, executive
vice president and head of the small busi-
ness segment of Wells Fargo, which spon-
sored the study. IFA
// STUDY RESULTS
Liability costs stabilizing in
long-term care arena
For the first time in nine years of re-
search, long-term care liability costs are
stable on a national average basis, ac-
cording to a study by Aon Corp.
The study found that average general
liability and professional liability loss
costs nationwide are at $1,460 per bed
after peaking at $2,030 in 1998. IFA
August 2008
 NEWPRODUCTS Insurance & Financial Advisor | IFAwebnews.com
CHOOSE BLUE
SM

Green coverage for manufacturers debuts

Property/
Casualty
Manufacturers who already have, or are interested in adopting environmen-
tally sustainable practices, can now purchase green insurance coverage
for your group
from Fireman’s Fund Insurance Co.
Fireman’s Fund’s new green endorsement provides coverage for manufacturers that
want to reduce water and energy use and lower their overall carbon footprint. The com-
AND
pany is offering insurance premium reward incentives to manufacturers who employ
environmentally friendly initiatives, practices and products.
The new Manufacturers’ Green Coverage Endorsement provides green upgrade cover-
age and certified green building coverage.
individual clients!
Help available for retirees who fear outliving savings
Life Symetra Life Insurance Co. launched a new product to help protect retirees TEarn competitive commissions
Insurance from outliving their savings. The Symetra Freedom Income Annuity func-
tions as “longevity insurance,” enabling clients to use a small portion of current savings and bonuses.
to buy guaranteed income for their later years of retirement.
Using the product, clients can buy future income at today’s prices with a small portion of
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TIncrease sales with our online toolkit
Symetra Freedom includes several optional features including a death benefit, an annual for individual products.
payment increase to help counter the effects of inflation and an installment refund.

Professional risk coverages expanded TSimplify your sales process with

Property/ ACE USA, the Philadelphia-based retail operating division of the ACE Group
Casualty of Cos., expanded its professional risk insurance product offerings to our unique ROAM system,
include a stand-alone, admitted policy to address the unique risk management needs of
elected and appointed officials at various levels of government. including easy online enrollment.
The ACE Municipal Advantage Public Entity Liability Policy offers comprehensive man-
agement liability, professional liability and employment practices liability coverage for
municipalities and special district authorities of all sizes. Learn more about our NEW individual
Offered through ACE Professional Risk, a division of ACE USA, the policy offers cover-
age to public officials with limits up to $20 million. and small group programs from the
region’s number one health insurer.
Variable annuity living benefit rider improved
Life ING LifePay Plus, a variable annuity living benefit rider, was refined with
Insurance more flexible withdrawal options, according to ING USA Annuity and Life Contact your
Insurance Co.
Among the improvements to the product is the ability of annuity owners to take a with- IBC broker executive
drawal during the first 10 years without ending the 7% compounding step-up—for each
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In addition, the product has new maximum annual withdrawals of 6% at age 70.

Green auto insurance for commercial fleets available

Property/ Fireman’s Fund Insurance Co. introduced new vehicle replacement cover-
Casualty age for commercial fleets—insuring the full replacement cost of vehicles
that are total losses for up to their first three model years. In addition, a hybrid upgrade
endorsement is available, to enable business’ fleets to “go green,” the company said.
Commercial vehicles will be replaced with the most current make and model available,
including similar equipment and options, even if a new model year vehicle costs more
than the original cost of the totaled vehicle when it was new. There is no depreciation
reduction, but rather the increased cost to replace with a new vehicle is covered, the
www.ibx.com
company said. Independent licensee of the Blue Cross and Blue Shield Association.
For the latest New Products go to IFAwebnews.com.

Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com August 2008 | 25

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26 | Southeastern Pennsylvania / New Jersey / Delaware Insurance & Financial Advisor | IFAwebnews.com
CE: Pa. officials see
‘huge problem’
From page 1
that people completing coursework on-
line meet the requirements.
The department is performing an
analysis of online courses it has approved
to see if they are complying with the
state’s CE laws.
Concerns rise as numbers grow
Over the last few years, as use of online
CE courses has grown, so have concerns.
Gallagher said one agent a year ago
completed 24 hours of CE in 8 hours. He
also mentioned how there is not a time
limit on how quickly someone can move
from slide to slide on an online test.
Jack Yanosky, director of the Pennsyl-
vania Insurance Department’s bureau of
producer services, said someone who
was licensed in life and health since 1984
completed all of the necessary CE re-
quirements in 80 minutes by taking basic
term insurance, life insurance and LTC
basic courses online. In another case,
Yanosky said, the highlighting used to in-
dicate correct answers on a practice test
happened to remain on the screen dur-
ing an actual test.
Gallagher said the department is re-
sponding to concerns by “slowing down
how slides are gone through and how
[courses] are offered.”
‘Double-edged sword’
Yanosky does not want to eliminate
online CE courses.
“This is a double edged sword,”
Yanosky said. “There are producers who
take their courses online for legitimate
purposes.” He said legitimate uses of on-
line instruction include those producers
who are geographically removed from
testing locations, which is a big problem
if a course is cancelled at the last minute.
“To take [online courses} away com-
pletely would put the burden on the pro-
ducer,” Yanosky said.
In some cases, the department has
forced course providers to refund money
to test takers because of problems with
the way the tests were proctored.
Gallagher said the insurance depart-
ment is working toward a “tightened ap-
proach to web-based self-study.”
August 2008
 For the Record
Pennsylvania agent & carrier fines
The following summaries are based on information
obtained from the Pennsylvania Department of Insurance.
■ Joshua Paul Novello
Woodbridge, N.J.
Action: Fined $1,000; ordered to pay costs of $125.
Synopsis: Novello issued a check to the department
for payment of a licensing fee that was dishonored
for insufficient funds, and failed to replace the check.
Case E08-22
■ AmeriChoice of New Jersey Inc.
Newark, N.J.
Action: Ordered to pay $300,000.
Synopsis: Company failed to adhere to quality as-
surance and utilization management regulations with
regard to a member’s care; and failed to fully respond
to a department subpoena.
Case E08-35
■ First Keystone Risk Retention
Philadelphia, Pa.
■ Four Seasons Insurance Agency
Langhorne, Pa.
■
■ Patricia Weg
Englewood Cliffs, N.J.
Action: Revocation of insurance license; ordered to
pay restitution of $273,277.55; fined $27,000; or-
dered to pay costs of $3,412.50.
Synopsis: Weg engaged in the business of insurance
prior to obtaining a license; collected fees without
proper fee agreements and in excess of the maxi-
mum allowed fees; conducted insurance business as
Sean’s Rapid Agency prior to registering the name
with the department; and conducted insurance busi-
ness as Sean’s Travel & Insurance Agency without
registering the name with the department.
Case E08-34
Fines from Other States
The following actions were taken against local agents
and businesses by other state regulators.
■ Robert John Parker
Mullica Hill, N.J.
Action: Parker was barred from association with any
FINRA member in any capacity.
Synopsis: Parker received checks totaling $35,100
from public customers for investment purposes; ne-
gotiated the checks; converted the proceeds for his
own use and benefit; and failed to respond to FINRA
requests for information.
FINRA Case 2007008486601
■ Robert James Roesch Jr.
Red Bank, N.J.
Action: Ordered to pay $5,000 and suspended from
association with any FINRA member in any capacity
for three months.
Synopsis: Roesch wrote checks totaling $2,200
payable to himself against a personal bank account
that had been closed, knowing that the checks would
be dishonored, but cashed them anyway.
FINRA Case 2007009042401
■ Robert Martin Sweeney III
Archbald, Pa.
Action: Ordered to pay $5,000; and suspended from
association with any FINRA member in any capacity
for three months.
Synopsis: Sweeney signed a customer’s name on a
tax certification form related to a life insurance pol-
icy without the customer’s authorization or consent.
FINRA Case 2007008997101
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■
Michael R. Etemad
Philadelphia, Pa.
Joseph B. Schmidt
Is your client frustrated with rising healthcare costs?
■ Christopher Stewart
Langhorne, Pa.
Action: Fined $20,000 ($4,000 per agent or com-
pany); ordered to pay costs of $10,000; revocation of
the Four Seasons’ and Stewart’s insurance licenses;
Schmidt voluntarily surrendered his license.
Synopsis: Stewart failed to provide timely notice of
criminal charges and his plea to the department; Four
Seasons facilitated First Keystone’s writing insurance
in territories prior to receiving department approval;
Four Seasons facilitated First Keystone’s failure to
fully identify all charges on invoices; First Keystone’s
rates failed to fully conform with its filed business
Self-funding may be the solution.
plan; and a 2005 Market Conduct Examination con-
ducted but not finalized by the South Carolina De-
With healthcare costs at an all-time high, self-funding with Brokerage Concepts is a solution that
partment of Insurance disclosed numerous instances
of actions and practices of First Keystone that failed is worth exploring. Self-funding provides a way for many employers to lower their costs through
to conform with New Jersey laws and regulations.
Case E08-33 more active plan management. At BCI, we’ve assembled one of the most knowledgeable and
■ Kenneth McCoy
■ Kevin McCoy broad-based groups of employee benefit experts, all dedicated to helping your client in ways
■ Earl J. McCoy Agency
Hamilton, N.J. that deliver products, technology and technical expertise to win self-funded business for you,
■ Joshua McCoy, aka Earl J. McCoy Jr.
Newtown, Pa.
Alan C. Chen
the broker. Our strategy is to deliver… Benefit Solutions for Everyone.
Mariton, N.J.
Action: Kenneth McCoy, Kevin McCoy, Joshua
McCoy and the McCoy Agency were fined $90,000 To learn more about the advantages
and ordered to pay costs of $10,000; Chen was fined
$22,500 and ordered to pay costs of $2,500; and the of self-funding, call BCI today:
individual respondents entered into separate agree-
ments with the Office of the Insurance Fraud Prose-

610-491-5040
cutor in which they agreed to additional fines and
attorney fees totaling $125,000.
Synopsis: Submitted insurance applications to insur-
ers containing inaccurate information; and Kenneth
McCoy and Kevin McCoy failed to exercise appropriate
oversight over the business conducted at the agency.
Case E08-32
Offices located in Pennsylvania, New Jersey, Delaware, and Massachusetts
■ Dennis J. Mojares
Chatham, N.J. NATIONAL HEADQUARTERS
Action: Ordered to pay $500.
Synopsis: Mojares paid his license renewal fee with
1021 West 8th Avenue • King of Prussia, PA 19406
a check that could not be negotiated. www.bcitpa.com
Case E08-27.

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