OKLAHOMA

VOICE
MAY 2015

Next Chapter 15 Meeting will be Thur. May 7th

11:30 AM. SHANGHAI AVENUE SUPER BUFFET 803 N. Aspen. Next to Arvest Bank @ S/E corner of S. 145 East Ave. (Aspen) & 71st St. (Kenosha) Broken Arrow. OK.

Chinese - Japanese - American Foods

Accepts all major credit cards.

Non Members Welcome

The First Amendment to the U.S. Constitution

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances. Logo

NOTICE TO: Mid-West Terrirory & District Offices:

The first Thursday of each month has been dedicated by Oklahoma UFAA Chapters 12 & 15 as OUR day to peacefully assemble and meet. Not even Congress can prohibit such peaceful actions.

We would request that State and District meetings NOT be held on the first Thursday of any month between the hours of 10:30AM and 2:30PM to avoid violation of this law. Please mark your calendars accordingly. Thanks in advance. -Chapters 12 &15.

Chapter 15 Eastern Oklahoma

Pres: Mike Gately 918-481-3277chapter15@ufaa.com

V. Pres: Glenn Johnson gjohnsonins@ymail.com

Sec: John Wiley jwiley1811@sbcglobal.net

Treas: Terry Wilson ufaa15editor@ufaa.com

Join us May 7th at 11:30AM at the Shanghai Avenue Super Buffet 803 North Aspen S/E Corner of S. 145th East Ave & E. 71st St. next to Arvest Bank

Meeting Agenda From the President:

Newsletter advertiser speaker.....Sheila/Bethel Body Shop

Commission cut

District meeting DMM rant & Okla DM Leaving Farmers

FGI Reinstates Employee Bonuses

Lawsuit update

NON-MEMBERS ARE WELCOME

If you plan to join us for lunch, Please Arrive for Lunch Promptly @11:30

UFAA Meeting begins at Noon.

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"I did not realize what UFAA was or what they could do, until I started attending chapter meetings & annual conventions sharing information with agents across the U.S." UFAA Member

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Farmers Declares War on Agency Force

TO: Farmers Management, Zurich Management, UFAA, etal

I have been a Farmers Agent in California for more than 30 years. I am also a broker and do business with other carriers. In my years I have never heard such a condescending, self-serving video from any carrier, including Farmers, as the one I recently watched by Roy Smith about our new Smart Plan Home product.

To make the statement that our lack of competitiveness is our high expense ratio of which the primary cause is our commission structure is absolutely ludicrous. Farmers pays less commission already than a great number of carriers in the homeowners' insurance market in California and to reduce it further is simply insulting.

When Mr. Smith states that Farmers has made the "Tough Decision" about agent compensation what he is really saying is Farmers management has made the easy decision to bamboozle the agents by cutting commissions and contract value by 30% instead of cutting the obscene management fee taken off the top, reducing our bloated executive salaries, and reducing our massive infrastructure costs...

Echoes from the Agency Force

Over the past few years we have heard that there is no way to organically grow an agency, the only way to grow is by the cannibalization (buying of another agency) of those around you. Though there is a provision in the new 2013 contract to be able to buy another agency there has been a "Freeze" on this in most states. One has to ask, if there is no way to grow an agency organically but no current Farmers agent is able to buy the Book of Business from another agent, (the whole reason we were encouraged to sign the new 2013 contract) why is it the Agency Growth Model? Haven't you just created an unsolvable conundrum?

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A couple years ago I sent a reply email to my DM that was questioning my business practices since I keep getting close to the magical 2000 PIF level but never exceeding it. My reply was that he does not have a single agent in his district that has ever exceeded 2000 PIF without acquiring another agent's book of business. At the next district meeting he announced to everyone that an agent in our district told me the only way to exceed 1000 PIF is if Farmers gives them policies.

Farmers knows this. How else would they like the idea of seeding agency with policies from former agents.

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There seems to be a two pronged problem, first that Farmers knows they've made it all but impossible to grow organically and secondly, that they're claiming that agency acquisition is the only way to grow yet they don't allow that to actually happen. What is an agent to do? We are out-priced in just about every market but the company wants growth. Perhaps this is why they went from PIF (Policies in Force) to BOP (Business Operating Profit)!

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Do you think that the ultimate goal of the Company is to frustrate us to the point that we quit? When I heard that the only way I was going to grow was to buy an agency, I knew that the Company realized that it had ruined our ability to compete in the market place and I had to find additional sources of revenue that did not have anything to do with Farmers. Why is Farmers so darn fired up about SMART OFFICE when there will be no one coming in to our offices?

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Organic stagnation is not just a Farmers problem. It is an industry wide problem. Most companies are finding it more difficult to grow organically. The one major change insurance companies have made during this time of organic stagnation is black box technology. All companies have gotten much more sophisticated in weeding out prospects they don't want. In the past they accepted applications merely knowing whatever prior history could be obtained by the agent and the MVR.

The problem is that despite the fact that some prospects pose a higher risk on paper, it has not proven to lead to higher profit by running them off. Companies have begun specializing in certain risk categories similar to automobile manufacturers targeting categories of the public for a specific model of their line of cars. Unfortunately for us Farmers thinks they are in the luxury category.

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Just got an email that the District Office will be contacting us to schedule our Smart Skills Assessment which is required to see if we know how to sell insurance:

1) What brings you to Farmers?
2) What has you shopping for insurance?
3) Are we the first company you called?
4) Who is your current insurance provider and are you satisfied with your agent?
5) How much do you currently pay for insurance?
6) What is important to you besides a good price for your insurance?

After asking these 6 questions we are supposed to go into the 4 steps of smart selling which includes 18 bullet points of what we are supposed to ask each person who wants a quote.

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In a climate where we are already uncompetitive on a level playing field where other carriers pay the same prevailing commission the solution is not in cutting the sales forces commissions. If anything the commission should be increased to provide incentive. It is an untenable, unrealistic position to cut the sales force commissions and expect the agents to expend more capital to add staff, advertise, market and promote the insurance products when you lower the commissions. The reality is that the cost cutting should not be taken on the backs of the sales force, as they are the only income revenue providing asset within the company. Everyone else that is an employee is an expense on the balance sheet. Farmers should be looking at reducing employee/management/claims expenses, before they attempt to cut the commissions of the only individuals that provide the revenue to the company.

I truly believe it is disingenuous to blame the uncompetitive products on the sales force, by claiming their commission is too high. It's amazing how the other carriers can pay the same commission rate and be thousands of dollars less on their fire products. Maybe, just maybe it's that 16-20% Management Fee that FGI/Zurich take off the top of every GWP dollar in premium written.

"We (UFAA) don't advise or condone everything in this letter, but the author like many other Farmers agents completely agree.".

FGI Reinstates Employee Bonuses

UFAA has been informed a profit bonus plan for the FGI employees is to be reintroduced. It won't be as large as the bonuses in the past. The management company has taken in 6.5 billion over last 2 years and will be cutting the agency force commissions by 30% to make the company more competitive in the marketplace. Really? Or, does the commission cut finance the bonuses?

LOS ANGELES, April 14, 2015 /PRNewswire/ -- Farmers Insurance, one of the nation's largest multiline insurers, announced the first round of 60 winning teachers of its Thank America's Teachers $2,500 educational grant program. Farmers, inspired by the great work done by teachers every day, created the Thank America's Teachers initiative, to say thank you to teachers and give away more than $1 million in educational grants in 2015.

Alan Glidemeister Appointed Chairman Of Fire Insurance Exchange Board Of Governors

Perhaps, Alan is the one to contact concerning Fire Commission reductions

Farmers Insurance, LA government hacker sentenced to prison
LOS ANGELES (AP) - A hacker who helped break into the computer systems of DirecTV, Farmers Insurance and the Los Angeles Department of Public Works is going to federal prison.

Oklahoma family fighting for tornado coverage in trial against Farmers Insurance

KFOR TV OKC April 29, 2015 Moore Oklahoma Home Destroyed by Tornado May 20, 2013

Attorney Jeff Marr told the jury that Farmers Insurance paid only 38 cents on the dollar toward the damage amount to the home. Now, a larger offer is on the table to avoid trial!

Oklahoma Quakes Caused by Human Activity

OKLAHOMA CITY -The Oklahoma Geological Society says it is "very likely" that most of the state's recent earthquakes have been triggered by the subsurface injection of wastewater from oil and natural gas drilling operations.

The society investigated dozens of earthquakes in central and north-central Oklahoma. It said Tuesday that, based on seismicity rates and geographical trends following major oil and gas operations that produce a lot of wastewater, the rates of earthquakes are "very unlikely" to be the result of a naturally occurring process.

The society said the "primary suspected source" is not hydraulic fracturing, or fracking, but wastewater injections.

Geologists historically recorded an average of 1.5 earthquakes of magnitude 3 or greater each year. The state is now recording an average of 2.5 magnitude 3 or greater earthquakes each day.

Okla. USGS KRMG 04.21.15

Should Okla. Ins. Commissioner Doak review

and update his decision on Okla. Earthquakes?

Oklahoma Seismic Activity 1970 - 2015

EARTHQUAKES IN OKLAHOMA
What We Know

We know that Oklahoma experienced 109 magnitude 3+ earthquakes in 2013 and five times that amount in 2014. The pace of earthquake activity has accelerated this year. The current average rate of earthquakes is approximately 600 times historical averages.

While we understand that Oklahoma has historically experienced some level of seismicity, we know that the recent rise in earthquakes cannot be entirely attributed to natural causes. Seismologists have documented the relationship between wastewater disposal and triggered seismic activity.

The Oklahoma Geological Survey has determined that the majority of recent earthquakes in central and north-central Oklahoma are very likely triggered by the injection of produced water in disposal wells.

Oklahoma's response to the recent rise in earthquakes is constantly evolving based on the growing body of knowledge dedicated to exploring the issue. The resources on this page inform our understanding of Oklahoma's earthquakes and provide the foundation for our regulatory response. http://earthquakes.ok.gov/what-we-know/

Pennsylvania: Fracking Exclusion Not Allowed in Homeowners Earthquake Endorsements
The Pennsylvania Insurance Department issued a notice telling insurance companies that earthquake endorsements to homeowners insurance policies in Pennsylvania cannot exclude coverage for earthquakes that may be caused by "human activity" such as fracking.
But Pennsylvania's Acting Insurance Commissioner Teresa D. Miller wrote in the notice that determining with certainty that human activity caused an earthquake is very difficult. Insurance claims by homeowners should not go unpaid during a long and arduous investigative process that will likely uncover no definitive proof linking the earthquake to human activity, Miller said.
"Insurers and rating organizations are therefore instructed that earthquake endorsements that attach to homeowners insurance policies in this Commonwealth should cover all earthquakes, whether believed to be 'naturally occurring' or caused by 'human activity,'" the notice stated.

However, Okla Insurance Commissioner Doak seems to bounce around the subject of "eliminating exclusions of coverage for earthquakes that may be caused by "human activity" such as "waste water injections."

Oklahoma Insurance Commissioner John Doak wants insurance companies to make sure they are not abusing the "man-made" earthquake and preexisting damage exclusions in earthquake policies in order to deny claims based on the trend only 8 out of 100 Okla. quake claims have been paid.

Doak states in his March 3, 2015 letter to all Property & Casualty Companies licensed in the State of Okla., "In general, it would be correct to say that earthquake insurance excludes loss due, in whole or part, to any "man-made" cause such as construction, mining, oil and gas exploration and production."

But, Insurance Comm. Teresa D. Miller's statement above makes much more professional sense for protecting the insuring public & Pennsylvania Agents.

As one actuary stated, if homeowners purchased coverage for earthquake damage, they should be compensated for earthquake damage. This seems like the correct move by the Pennsylvania DOI. If insurers are concerned about increased earthquake exposure due to fracking, they should charge more and/or subrogate against those responsible for causing the quakes. [Otherwise, it could lead to a multitude of Agent E&O claims.] -ed

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Learn more about our advertisers as you or your clients may need their services in the future.

Educate yourself so you can give your clients more detail about the services they offer.

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Pulse of the Agent Poll Results
No polls last issue

9 P&C firms named to Fortune's 'Most Admired' list

Two insurance firms earned top spots on Fortune's" Most Admired 2015" companies list, placing in the highest 50 out of 1,400 eligible global businesses. And of those two, one P&C company grabbed the bronze ring--placing third, behind Apple and Google.

The "Most Admired 2015" list covers 55 industries, and nearly 350 companies received the "Most Admired" designation.

Here is the listing

Are you receiving the UFAA Quarterly National Voice print publication?

Each year UFAA mails thousands of quarterly issues of the National Voi

ce. You should have already received the Spring 2015 issue if your name and address is updated on UFAA Agent records at

no@ufaa.com

There are many well written articles and editorials in each issue and is very educational of what in going on across the country in Farmers.
Click here for current issue. -ed

What Agents Should Know About Flood Insurance Changes in Effect April 1

Beginning April 1st, when flood insurance policyholders go to renew their policies, they could be quoted premium increases ranging from 15 to 18 percent on average if their home is their primary residence and up to 25 percent if it is a secondary home or a home that has suffered repetitive losses.

They will also face new surcharges, $25 for primary homes and $250 for all others including secondary or multi-families. Read more

Top 10 & Bottom 10 Listing of Housing Markets in U.S.: Nationwide home pic

TULSA is on the list!

The U.S. housing market is at its healthiest level since 2001, according to a new index from economists at insurer Nationwide who evaluated the housing market nationally and for 373 metropolitan areas.

Housing markets in the vast majority of metropolitan statistical areas, or MSAs, are healthy, according to the index, with the healthiest being in Pittsburgh, Cleveland and Philadelphia and the least healthy in Bismarck, N.D. and Atlantic City, N.J. Read more

State Farm Ranks Top States for Hail Losses Claims Journal 04.13.2015

As temperatures warm there's an increased risk for the formation of hail. Damage to homes and cars as a result of hail cost State Farm policyholders more than $2.4 billion in 2014. Hail is one of the most frequent causes of property damage. While hail storms most frequently impact the Great Plains and Midwest, every state in the nation is susceptible.

The Top 10 States for State Farm Hail Claims (Home and Auto) in 2014

1. Texas 51,193 claims. 2. Illinois 43,821 claims

3. Colorado 42,365 claims 4. Missouri 23,019 claims

5. Nebraska 21,326 claims 6. South Carolina 20,170 claims

7. Pennsylvania 19,088 claims 8. Iowa 12,869 claims

9. South Dakota 12,367 claims 10. Kansas 11,562 claims

Trades needed for any disaster including ice, tornado, strong winds, flood and earthquake, or just when a client needs a referral for a repair.

2015 Spring Forecast Warns of Severe Thunderstorms, Hail, Tornadoes

'Severe' Criteria'

Severe thunderstorms aren't just the kind of showers that show up to rain out a baseball game. The National Weather Service said for a storm to reach the classification of severe, it has to have hail at least an inch (2.5 centimeters) in diameter or winds gusting to at least 58 miles (93 kilometers) per hour.

"Lightning, no matter how frequently it is striking, is not a criterion for determining whether a storm is severe," according to the weather service.

For anyone who has watched a tree get uprooted in a severe thunderstorm, it probably isn't hard to imagine the difference between a summer boomer and something that is going to ruin the house. For everyone else, the numbers tell the tale.

In the U.S., insured losses from severe thunderstorms reached $12.3 billion in 2014, according to the Insurance Information Institute in New York. From 2005 to 2014, 1,606 people were killed by the storms, which caused losses of $180 billion, second only to hurricanes. Read more

We need our readers to assist us in developing an Emergency
Responder Listing in times of disaster or need
This space is reserved for advertisers that desire to post a line ad in the Oklahoma Voice. We are attempting to build an emergency responder listing to assist agents with referrals in times of disaster. We are seeking paid advertising from the following trades-

State Registered Roofers,
Licensed Plumbers,

Fencing Contractors

Guttering Contractors

Tree Trimming & Removal

Licensed Electricians

Debris Removal & Hauling

If you have a client doing an honest business in the above trades or other trades that would be in demand following a disaster please contact Oklahoma Voice Editor. Their ad would appear similar to this-

11/15

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ServiceMaster X Recovery of Residential & Commercial Disaster Restoration Services. Emergency Response: 918-806-6600 Serving in Tulsa Creek Counties & beyond.

And,

website link, if applicable. The ad cost is $120.00 annually. Acceptable company logos are $30 extra depending on size and acceptable format. The ads would run for 12 months in our Oklahoma Voice Newsletter sent to Farmers Agents across the state. Editor

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Fire, Water, Storm Damage & Other Perils

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Oklahoma Continuing Education

Source: OID website UPDATED: 01/09/2015

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Requirements and Renewal Guidelines

All resident agent producers, Title producers, CSRs and adjusters are required to complete continuing education biennially prior to license renewal.

RENEWAL GUIDELINES -

CE providers are required to report course completions (electronically) within 10 business days of course completion. The transcript must show CE COMPLIANT, at least 3 business days before the licensee will be allowed to process their renewal application online. Best Practice: CE should be completed at least 30 days prior to the license expiration date to allow ample time for the CE provider to report the credit. This will also allow time for the licensee to process their renewal prior to expiration.

CE REQUIREMENTS BY LICENSE TYPE

Effective January 1, 2015 a new CE course for earthquake will be required for licensees' holding a PROPERTY line of authority. Refer to the appropriate license type below for details.

Resident Producers (excluding Title producers) are required to complete 24 hours of continuing education. The 24 hours should consist of 3 hours of ethics, 2 hours of legislative update and 19 hours of producer general. A licensee holding a property line of authority is required to complete a 1 hour earthquake course, which will be counted as part of the 19 hour general requirement.

Additional Selling CE Requirements (counts toward 19 hours of producer general credit):

Producers that sell, solicit, or negotiate long term care insurance must take the initial 8 hour long term care partnership course prior to offering this type of product and complete a 4 hour long term care partnership course each renewal cycle thereafter. http://okltcpartnership.org/)
Producers that sell, solicit, or negotiate Annuity products are required to take a onetime 4 hour course on Annuity products.

Customer Service Representative (CSR)

is required to complete 13 hours of continuing education. The 13 hours should consist of 3 hours of ethics, 2 hours of legislative updates and 8 hours of producer general. A licensee holding a property line of authority is required to complete a 1 hour earthquake course, which will be counted as part of the 8 hour general requirement.

Are you age 65 and been a licensed agent for 20+ years? you may qualify for the free Okla. CE Mentoring Course worth 24 hrs credit hours and takes 10 minutes to complete. See CE Mentor letter HERE by Commissioner John Doak with short form on page 2. This became available in 2011.

No documentation required. Just sign off on the simple OID form and return it prior to your renewal date.

Oklahoma Voice has reprint rights. Copyright 1995-2015 WestStar TalkRadio Network. Reprinted with permission. No further republication or redistribution is permitted without the written consent of WestStar TalkRadio Network. Visit Kim Komando and sign up for her free e-mail newsletters.

KimKomando.com

From the Oklahoma Insurance Department

The following "Final Orders" are from the OID public information legal section of the OID website. These violations and penalties are shown here to ONLY warn, inform and educate you on Okla. Insurance Laws.

OID Producer, Adjuster, CSR Information Page

OID Notices to Producers:

Rate and Form Filings 2014
Click link heading above. Then, scroll to bottom of page and click [month] 2014. Then, scroll the entire document for rate & form filings for all companies in alpha order.

As we [the OID] work to help you comply, we will vigorously enforce 59 O.S. � 1310 (A) (21) which relates to failure to notify of change of address.

Okla Ins Dept: Change of address or name more than 30 days after the change occurred shall be no less than a $100 fine.

The Oklahoma Insurance Department encourages all licensees to update their mailing personal and business addresses and email addresses as often as possible. This feature is available free of charge by visiting the SBS website

More than 2,500 Oklahoma Agents Take Earthquake Coverage Class
"Consumers need to understand these policies," Doak said. "This is major, catastrophic coverage. It's not light coverage. You really have to have major damage or something significant to happen."
Doak said he is concerned that a growing number of policies exclude from coverage earthquakes that are induced by man-made activity. Read more here

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Check out the UFAA Chapter 15 Home Page with more Farmers, industry news, member benefit information, newsletter archives, including breaking news too late or too large to publish above.

Click our Home Page link for more company information on the
SMART HOME POLICY.

Just click the Home Page Link >> Here <<

UPDATED: Latest Okla. Company Comparison Rate Charts- Auto & Home:

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Have you joined UFAA? We just can't make it much easier. Just mouse the Join UFAA logo to obtain the a membership application. Fill it out and attached a check and mail or use the bank card option and fax it to 1-314-631-7963. United we stand. Divided we fall.