Rick Dudney to Serve as IIAT Chair

New board members and officers were introduced during IIAT’s annual business meeting in Fort Worth on June 17. Rick Dudney, CIC, LRM, CRM, of TCOR Management in New Braunfels, was elected as IIAT chair for 2017-2018. Jeff Brady of Brady, Chapman, Holland & Associates in Houston, will serve as chair-elect; and Mark Ray of Borden Insurance in Corpus Christi, will serve as vice-chair.

Elected to the board of directors for three-year terms each were William Page of Wortham Insurance in Austin; Brad Hempkins of Hempkins Insurance in Allen
and Nathan Sawyer of Sawyer & Associates in Monahans.

Go to iiat.org’s Press Room to read more about the officers and board members.


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Award Winners Honored at Annual Conference

U.S. Senator John Cornyn Receives IIAT Independent Leadership Award
IIAT’s Governmental Affairs Director Lee Loftis presented Sen. John Cornyn with the IIAT Independent Leadership Award at the Annual Celebration & Business Luncheon on Saturday, June 17, during IIAT’s 120th Annual Conference & Trade Show in Fort Worth. This award is given to outstanding individuals who demonstrate profound leadership in the spirit of independence — the hallmark of the independent agency system.

Sen. Cornyn has served the people of Texas for the last three decades, first as a district judge and later as a member of the Texas Supreme Court and Texas Attorney General. Sen. Cornyn strongly believes that we need more Texas solutions in Washington, which is why he consistently fights to bring the Lone Star State’s commonsense solutions to the federal level.

“Those who have had the privilege of knowing and working closely with Senator Cornyn know him to be a strong leader, as is reflected in his being selected as the Senate Majority Whip, where he skillfully leads without being overbearing or heavy handed,” said IIAT Governmental Affairs Director Lee Loftis. “Senator Cornyn is a true Texan and someone who has earned the respect and admiration of those whom he leads.  In Washington, this is a very rare distinction”

André P. Juneau ELITExas Young Professional of the Year Award
Tyler Spears of BKCW in Austin was named the André P. Juneau Young Professional of the Year. This award is given annually to a young insurance professional who has achieved success through hard work, community engagement and industry participation in a manner that would be considered exceptional for a person of his or her age.

CSR of the Year Award
Cheryl Rogers, account manager at K&S Insurance in Rockwall, was named the CSR of the Year. This award is given annually to a CSR in Texas who exemplifies outstanding leadership and service to the independent agency system and to the public.

Read more about the award winners and their accomplishments.


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Thanks to 2017 Annual Conference Underwriters and Sponsors

IIAT’s 120th Annual Conference & Trade Show was a success due in part to the generous contributions of numerous conference underwriters and industry sponsors. Be sure to thank representatives from our sponsoring companies the next time you see them. Each year, they help make the conference special.

Special thanks go to IIAT’s lead underwriters: 

  • VIP Insurance
  • Union Standard Insurance Group
  • Republic Group
  • United Fire group
  • Allied Trust
  • Mercury Brokerage Group
  • Central Insurance Companies
  • Service Lloyds
  • Texas Mutual Insurance Company
  • AmTrust North America
  • Travelers
  • Safeco Insurance
  • State Auto Insurance Companies
  • Liberty Mutual Insurance
  • Capstone Associated Services


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View Pictures from IIAT’s 120th Annual Conference & Trade Show


View photos from IIAT’s 120th Annual Conference & Trade Show.


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The Importance of Pre-Call Planning

A recent Texas Agent article on “seeking first to understand” stressed the importance of listening during an opening appointment. This article extends that concept to pre-call planning even before the opening appointment is secured. Good pre-call planning enables you to learn about a prospective customer’s concerns, business agenda, business pressures, and key decision-makers which can be used in networking, drip marketing, cold-calling and to set the agenda for the opening appointment.

Useful Information to consider:
(Taken from the Pre-Call Planning Primer in IIAT’s Sales Management Toolkit)

  • Organizational overview including organizational mission, vision and values as well as number of employees, geographic scope, revenues
  • Names of key decision-makers or potential influencers inside and outside the company
  • Relationships of key decision-makers to other organizations, industries, community
  • News about recent product or operational developments, key hires, acquisitions
  • Information about subsidiaries, branches, and other business relationships
  • Prospect’s target client segments
  • Prospect’s competitive value proposition in promotional material
  • Prospect’s competition or competitors
  • Vendors serving prospect
  • Company’s position within the industry
  • Industry’s growth or decline in recent years
  • Industry’s operational, political, economic, or regulatory issues

Sources of information:

  • Company materials (i.e., website, brochures, annual reports, erc.)
  • Mutual centers of influence, vendors
  • Industry resources (i.e., trade group/association websites, publications, etc.)
  • Government resources – bls.gov, osha.gov, sba.gov, bea.gov, publicrecords.netronline.com
  • Free or inexpensive resources –  Google the company/key decision-makers, manta.com; hoovers.com
  • Telemarketing – use an external or internal telemarketer to gather information


Time is running out to sign up for this summer’s Producer Development Program, sponsored by Texas Mutual.

Students get a solid foundation in commercial insurance and learn how to apply the knowledge in selling situations. The program includes five days of technical training in commercial lines, five days of sales and marketing training and two-and-a-half days dedicated to guidance on building a quality book with mandatory ethics training for all licensees. The first segment starts July 10. View the curriculum and register today.

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Register for FEMA Flood Insurance Webinars for Agents this month for FREE!


Earn CE with this month’s FEMA Flood Insurance Webinars for Agents Presented by the National Flood Insurance Program. The webinars are available for FREE on a first come, first served basis.

Key Fundamentals of Flood Insurance for Agents

Part One: June 28, 10 a.m. – 12 p.m. CDT – Register
Part Two: June 29, 10 a.m. – 12 p.m. CDT – Register

This webinar is a two-part course on the National Flood Insurance Program. It includes the topics listed in the Federal Register notice on training and education requirements related to Section 207 of the Flood Insurance Reform Act of 2004, otherwise known as FIRA 2004.

It brings participants the latest information on reform legislation impacting the NFIP as it reviews the key elements that insurance agents need to know about the NFIP and how it works. It also discusses many of the federal flood program’s general rules as well as some more advanced topics. For more information visit the Key Fundamentals of Flood Insurance overview.

Attendees must complete both sessions in order to cover all topics required by the Flood Insurance Reform Act (FIRA) of 2004.

Questions? Contact Aaron Montanez at producer@h2opartnersusa.com

FEMA Mapping Changes: How to help your clients make the transition

June 29, 2-4 p.m. CDT – Register (No Continuing Education credits are offered for this course in any state.)

This webinar provides insurance agents a practical look at how FEMA flood map changes can affect property owners in their roles as flood insurance policyholders as well as borrowers.

Find out how to ease the transition to new flood maps for your clients. Learn how to provide better service to them by understanding how mapping changes affect policy rates, premiums, and the mandatory purchase of flood insurance.

This course will also review flood mapping issues related to Letters of Map Change and the Newly Mapped procedure. Enroll in an upcoming session and learn how to best help your clients both before and after map changes occur.

If you have questions regarding NFIP Training, please email nfiptraininginfo@h2opartnersusa.com.

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See You in Fort Worth! A Plethora of Prizes and Sen. Cornyn Closes Out the Conference on Saturday

We’re packing up and heading to Fort Worth tomorrow for IIAT’s 120th Annual Conference & Trade Show which kicks off Thursday at the Fort Worth Convention Center. Here are a couple of things you might want to take note of for the conference:

Prize drawings galore!
We will be giving away a $250 attendance prize at all conference sessions, plus, we’ll have a $500 attendance prize drawing at the Thursday afternoon session, “The Greatest Industry that No One Knows About,” and at the Friday morning general session, “Be Your Own Superhero.” Additionally, a total of four lucky attendees will win $500 each at the Trade Show on Friday and Saturday. Make sure you are at all these events for a chance to win!

ELITExas sessions for young professionals
ELITexas is hosting a special conference track just for young insurance professionals age 40 and under. Click here to take a look at the special ELITExas schedule. Here’s why you or your agency’s young agents should come to the ELITExas sessions at the conference:

  • Learn how to go from agency producer to partner.
  • Discover the mentality you must have to become an agency owner.
  • Find out how to take advantage of the tremendous opportunities insurance professions provide.
  • Meet potential new hires for your agency (insurance students and other young professionals outside the industry will be in attendance to learn about the insurance industry)
  • Learn effective recruitment strategies to attract new talent into the industry and explore how to dynamically promote our industry to young job seekers.


Senator Cornyn speaks at the Saturday Celebration Lunch.
Big “I” President Bob Rusbuldt will host a candid conversation with U.S. Senator John Cornyn to close out the conference at the Celebration & Business luncheon on Saturday afternoon starting at noon. You won’t want to miss this exclusive chance to hear a top U.S. legislator discuss the salient issues of the day:

  • Healthcare reform,
  • Tax reform/reductions
  • Flood insurance reauthorization (expires in September)
  • The challenges facing the Republican majorities in Congress, and more!

Download the conference app.
Everything you need to know about the conference — including agendas, speakers, attendees, exhibitors, and much more — is in the IIAT mobile app. If you haven’t yet, please go to the iTunes or Google Android app store on your mobile device and search for “IIAT” to download the app.

Still haven’t registered to attend? You can register for the conference on-site at the Fort Worth Convention Center.


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Free MarshBerry Webcast: Creating an Agency Sales Culture

Register to view a free webcast hosted by MarshBerry and IIAT on Tues., June. 27 (10-10:30 a.m.).

Predictable, profitable, organic growth requires focus on the “three T’s” critical to driving changes within your organization’s culture. During the webcast, MarshBerry VP Nick Kormos will tell you about the three “T’s” and what you need to do to implement them. There is no CE for this webinar.

Click Here to Register

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2017 Company Appointment Guide Now Available Online

IIAT staff recently surveyed IIAT member insurance companies in Texas to update their agency appointment strategies, resulting in the 2017 edition of IIAT’s Company Appointment Guide. Find out which companies are considering additional agency representation in various parts of the state.

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Bringing Nonsubscribers into the Texas Workers’ Compensation System with Captive Insurance

By S. Lance McNeel, CPCU, ARM

Capstone Associated Services, Ltd.

What is the Texas Nonsubscriber Option?

There has been much discussion in recent times on the topic of workers’ compensation opt-out statutes making their way through state legislatures. Our good neighbors to the north in Oklahoma have passed such a law, but it was declared unconstitutional by the Oklahoma Workers’ Compensation Commission. That decision is currently being appealed. South Carolina and Tennessee have had bills stall in recent months, and only time will tell the outcome of these initiatives. And then there is Texas!

Early in the 20th century, the topic of how to protect workers from job-related injuries was hotly debated throughout the country. It was generally acknowledged that powerful companies had an advantage in cases where employees sued for work-related injuries. Defenses included contributory negligence, assumption of risk and the fellow servant rule. These defenses were limited by federal and state governments shortly after the turn of the century by the issuance of employer liability laws, however, these simply left employers as vulnerable as the employees were previously. A fair and equitable solution was needed that provided benefits to employees and protection to employers.

In 1911, Wisconsin passed the first workers’ compensation law followed quickly by most of the other states by the end of the decade. The initial Texas workers’ compensation legislation was passed in 1913, and yes it was elective from the beginning. The provisions for elective workers’ compensation resulted from real concerns in Texas that a mandatory workers’ compensation system was unconstitutional, since it limited both the employer’s and employee’s right to bring a lawsuit for damages. For this reason, both employers and employees in Texas have the right not to subscribe to the system.

There was little interest in opting out of the system, which generally worked well, until the 1980s when decades of attorney involvement in even minor claims and inflated medical costs pushed the system to the brink of collapse. During that time, over 40% of Texas employers looked to nonsubscription to avoid a corrupt system. Today, the Texas Department of Insurance estimates that 44% of Texas employers are nonsubscribers and 20% of Texas employees are employed by non-subscribing employers. Of those employers, the highest percentage of nonsubscription occurs in manufacturing (53%), finance (51%) and wholesale/retail (49%).  See: A study of Nonsubscription to the Texas Workers’ Compensation System; http://www.tdi.texas.gov/reports/wcreg/nonsub93.html1

Why choose not to subscribe?

Cost is the primary reason for choosing not to subscribe, however that goal can take different forms. Cost savings that can be realized through eliminating workers’ compensation premiums can often be replaced with a lower cost occupational accident policy. Many argue that the cost reduction is the result of far lower benefits to the employees, while others argue that the benefits are comparable and the cost reduction is based on the elimination of fraud and waste in the workers’ compensation system. An employer may also wish to have greater control over the choice of medical provider or to coordinate better with a group health plan. Finally, the employer may want to retain tort defenses that are given up under the workers’ compensation system. The common thread in these goals is to take greater control of an increasingly large expense facing the employer.

Why choose to remain in the workers’ compensation system? 

The primary reason to remain in the system is that if you leave, you no longer have the no-fault protections of the workers’ compensation system. Employers’ liability coverage can be purchased, but will it adequately protect the employer? Also, many employers have contractual relationships that require them to be covered by statutory workers’ compensation coverage. Examples of this include a sub-contractor agreement with the contractor, or a professional employer organization that is obligated to provide workers’ compensation. These businesses cannot choose to be nonsubscribers. Finally, many employers are in industries that are competing for qualified employees and do not want to give the appearance of providing sub-standard benefits to workers.

Is there a middle ground?

There are a couple of ways that employers can potentially reduce the cost of risk and increase control over their workers’ compensation program while staying with the system and thus maintaining their tort protection. One involves filing as a certified self-insurer (CSI), and the other makes use of a negotiated deductible with a standard insurer writing workers compensation in Texas. I say potentially because both methods rely on a level of risk retention that could result in favorable or unfavorable results.

Filing as a CSI with the Texas Department of Insurance is an option to employers that meet certain size financial qualifications including manual insurance premiums in excess of $500,000, approved credit ratings, the posting of a minimum-security deposit of $300,000 and the posting of excess insurance in the amount of $5,000,000. While this is certainly an attractive alternative for very large employers with professional risk management and claims staff, it is a difficult hurdle for the great majority of employers in the state of Texas.  See:  Certified Self Insurance; http://www.tdi.texas.gov/wc/si/

The other option is much more realistic for middle market employers throughout the state. Most insurers will offer a negotiated deductible option with a statutory workers’ compensation program. The deductible credit and other terms are negotiated with the insurer, and can represent considerable premium savings with the assumption of a large deductible. The advantage to this option is that the insurer retains the responsibility for providing statutory benefits to Texas workers and that responsibility is further supported by the Texas Property and Casualty Insurance Guaranty Association. The complexity of creating and maintaining a deductible program is much lower than a CSI, and with the addition of an aggregate stop loss, the catastrophic loss potential can be managed effectively. Essentially the insurer pays the worker’s compensation claims directly and then bills the employer for the deductible amounts (or withdraws them from an escrow account). If the employer becomes insolvent, the employees are still protected, which is why insurers typically want a letter of credit from the employer.

Negotiated deductibles are a good option for many employers that want the protection, both for the company and the employees, of the Texas workers’ compensation system along with lower long-term risk costs. Is there anything else that can be done to make this a better option?

The captive insurance/deductible option

Negotiated deductibles can be an attractive alternative for middle market employers with good claims experience, or those who have poor experience that have made an honest commitment to institute effective loss control measures. When an employer combines this option with a captive insurance company whereby the captive issues an insurance policy for deductible reimbursement, this attractive alternative becomes a powerful strategic planning tool.

A captive insurance company is an insurer that has been established to cover the risks of affiliated insureds. A captive can eliminate exclusions, deductibles and retentions in the traditional commercial insurance through the creation of policies designed for the specific insureds and risk exposures. A captive is formed with the permission of various regulatory authorities throughout the world. It is a real insurance company that has a responsibility to its owners, its insureds and multiple jurisdictions. An insurance commissioner monitors the captive’s operations to ensure that certain criteria are met, including solvency and other regulatory parameters. Texas passed captive legislation in 2013, which means that Texas employers no longer must go out of state to form a captive insurance company.

When structured properly by an experienced team of corporate and tax attorneys, and insurance professionals, premiums paid to the captive insurer are tax deductible as are other commercial insurance premiums. The premiums received by the captive insurer are taxed at 0% for federal income taxes. Claim payments from the captive to the employer are taxed at regular C corp. rates since the premiums were tax deductible when paid.

The deductible option described in the previous section uses after-tax money to reserve for claims and then allows for a tax deduction when the claim is paid. By adding a captive, pre-tax funds in the form of deductible premiums are used as reserves in the captive and then taxed when the claims payments are made; often years after the injury occurred. Better yet, underwriting profits of the captive are not taxed at the federal level. When profits are returned to the owners as capital gains or dividends, the capital gains or dividend rates will apply. The employer realizes a tax deferral from the timing of claim payments and a tax reduction on the profits through capital gains. In addition, the captive is a financial institution that can make commercially reasonable loans as an investment.

Finally, we are not suggesting that nonsubscription is wrong or should be avoided. In fact, captive planning fits nicely into a nonsubscriber program as well. We believe that Texas was the only state that actually got it right. We should not force employers or employees to give up cherished constitutional rights. However, a strong workers’ compensation system is critical to the economic stability of Texas and the protection of its citizens. We should encourage willing employers to remain within or come back to the workers’ compensation system through risk assumption, loss control and captive insurance.

 Please visit Booth 412 at the IIAT 120th Annual Conference & Trade Show in Fort Worth if you would like to learn more about captive insurance planning for your customers or prospects.

Mr. McNeel is Vice President of Business Development for Capstone Associated Services, Ltd. Lance brings over 30 years of experience in all areas of the insurance industry, including property and casualty insurance, life and health insurance, and reinsurance.



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