R. C. Chaffin, CIW

The first quarter of 2013 was a very busy time with members of the Executive Committee visiting Lloyd's, the Automation Conference in Scottsdale and University East in Atlanta.

The Executive Committee met with Corporate Lloyd's, Lloyd's Brokers, Managing Agents, Syndicates and Companies, and our AAMGA members in the Market. A presentation was also provided to members of the London & International Insurance Brokers Association. Over the course of 3 days, 36 meetings took place with 118 Lloyds and London insurance professionals to address emerging risks, the use of models and predictive analytics, any issues they had, review information on new developments, regulations and guidance and provide details on the state of the US Wholesale Insurance business.

The Automation Conference was a great success again this year with 320 attendees. I was very impressed with the expertise assembled in Scottsdale to help all of us stay up to date, or better yet, ahead of the technology challenges and opportunities that we face every day in our own businesses. Kudos to the Automation Committee for their hard work in putting this big event together every year.

For the first time, University East was held on the campus of Georgia State University with 200 in attendance. In addition to our Active and Associate members, we had students from Appalachian State, Georgia State, St. Joseph's, and the University of North Carolina participating in the classes. In addition to the Senior Leadership Track and UFO Leadership Institute classes, University East had introductory classes for those new to our business, advanced classes covering many important underwriting topics and the always popular "Executive Panel". Thanks to University Chancellor, Curtis Anderson, CIC and University Director, Jeff Henry for their hard work to ensure the success of this conference.

I look forward to seeing everyone at the 2013 Annual Meeting in New Orleans, May 19-22. Our registration numbers are "off the charts" and well ahead of all projections.  I chose this year's theme "A Commitment to Service" to highlight the many ways our members serve our country and our industry. For the first time, our Opening Reception will be held offsite at the new Freedom Pavilion at the WWII Museum in downtown New Orleans. This is an evening you won't want to miss and promises to be the perfect kickoff for our Keynote Speaker, General Colin Powell at Monday's Opening Breakfast. You will notice some other changes from past Annual Meetings including the Golf Tournament which is scheduled for Sunday, May 19 at the beautiful TPC Louisiana course. Purtzer Golf will manage our tournament for the first time and your golf fees will include great prizes and a golf clinic with Paul Purtzer. You won't want to miss it! University Classes have been moved to Wednesday, May 22 with this year's timely topic "Cyber Liability". Suzanne and I are very excited about the speakers, presentations and tours we have planned and hope you will make your plans to join us in the "Big Easy" next month.

I want to congratulate and welcome our newly elected Board members, President-Elect Gary Peterson, and Directors Corrine Jones and Ed Dickerson. We also welcome our new Associate Board Member, Peter Barrett of Bell + Clements, and our UFO Liaison, TC Anderson, IV, CIW of RPS Scottsdale.

I also want to congratulate our good friend and colleague Bob Schacher, former president of RPS Continental, CMGA in Roswell, GA, who has been named by the Board of Directors as an Honorary Member of the AAMGA. Bob was always very active in the Association and the University, as well as on the Committees. His leadership on the Board of Directors (2006 - 2008) helped advance the Association and its members forward, and we are delighted to have him join the ranks of this august body.

This will be my last "President's Message" to our membership and I want to thank you for your support during my term. I want to extend a big "thank you and kudos" to the Board, the fine team at AAMGA Headquarters, Committee Chairs and Vice Chairs and all the Committee members for your many hours of hard work, mostly behind the scenes, to make the AAMGA the strong and stable organization we are today. It has been an honor and a privilege to serve.

See you in New Orleans!

The wholesale insurance industry will be attending the AAMGA's 87th Annual Meeting at the Marriott Hotel in New Orleans, LA on May 19-22, 2013. Over 980 members from the United States, Germany and England have already registered to attend this annual opportunity for wholesale insurance professionals to network, conduct business, and attend the always important and popular Wholesale Insurance Trade and Vendor Show. A listing of all those currently registered can be seen by clicking here: Annual Meeting Roster by Name.

Complete details and registration information pertaining to the Annual Meeting can be obtained by clicking here.

Since 1926, AAMGA members in the US and UK have been committed to the service of their country. In 2013, we will take a moment to honor them at the Annual Meeting.

AAMGA Members having served in the military can click here to enter their branch, rank, and dates of service whether attending the Annual Meeting or not. Be a part of the AAMGA veterans who have already been added to our Honor Roll that scrolls on the Annual Meeting's Home Page, and allow General Colin Powell and all of us to salute you at the Annual Meeting.

On Sunday, May 19, 2013, the AAMGA's annual golf tournament will take place at one of the most the popular golf courses in the United States: the TPC Louisiana. Organized this year by the PGA professionals at Purtzer Golf, there is still time to join with your agent, company and vendor friends and colleagues and get in on the "shamble" style tournament. Registration details can be obtained by clicking here: Golf Registration Form.

The Tournament benefits the AAMGA Education Foundation, enabling the University to continue developing its curriculum with courses tracks and special leadership and professional development programs focused specifically on the wholesale insurance marketplace. Sponsorships for the Tournament are still available and can be obtained by clicking here: Golf Sponsorship Form. Whether you are able to play in the tournament or not, please take advantage of the opportunity of making a tax-deductible contribution to the Education Foundation, today.

General Colin Powell (USA, Ret'd.), will be the keynote speaker at the AAMGA's Opening Breakfast at the Annual Meeting on May 20, 2013 in New Orleans, LA. As part of the event, General Powell has agreed to autograph copies of his book: "It Worked for Me: In Life and Leadership".

Please click here to order your autographed copy(ies) today. The book will make an excellent gift for members of your staff, customers, family and friends, for those graduating from high school or college, or anyone interested in life lessons from one of the America's heroes. General Powell's memoir reveals the principles that have shaped his life and career, and is a powerful message of strength and endurance from a man who has dedicated his life to public service, It Worked for Me is a book to show readers how to achieve a more fulfilling life and career.

Only $20.00/book will reserve your copies today. Pick-up your copies at the Annual Meeting, or have them shipped to your office.

Coming to the AAMGA Annual Meeting? Stay connected with updates before, during and after the conference, share your experiences, network with your colleagues on Twitter using #AAMGA2013; or on our Facebook page.

Did you know that:

• 52% of all AAMGA MGA member employees are under the age of 40 years old
• The 241 MGA members wrote a combined $20.6 billion in annual written premium in E&S and Admitted business in 2012
• The UFO now has 355 active members
• 101 volunteers comprise the AAMGA's 6 standing committees, of which 32% are female and 61% are from the MGA member category

Get all the facts and figures about your Association by clicking here.

The AAMGA University will offer a cutting edge educational opportunity on Wednesday, May 22, 2013 at the Annual Meeting. It's an opportunity to hear from the experts on the growing exposures and underwriting solutions to risks related to the protection of financial data, informational technology and the transaction of insurance electronically. Each of these exposures are combining to become one of the largest emerging liability exposures for the future.

• What coverage forms and manuscript endorsements can provide protection from these unique risks?
• What are the best practices to be employed in underwriting the respective exposures?
• What is the nature of the liability and consequences of a security breach or identity theft?
• What exposure do managing general agents face?

Our panel of cyber liability experts from the wholesale insurance market will provide a practical review of the current state of the risks and coverages, outline best practices for MGA's and companies to employ, and examine ways in which to help retain producers understand the risks of policyholders. This interactive session may well be the best four hours spent at the Annual Meeting on new coverages available to offer to your customers.

Steven A. Zappia

Steven Shallau

The AAMGA Education Foundation is proud to announce and congratulate the winners of the annual White Paper Contest open to college and university students across the country. The 2013 winners are Steven Shallau a Senior majoring in Marketing, Risk Management & Insurance, Finance & Banking at Appalachian State University for his insightful research and presentation on the problems and solutions for North Carolina and South Carolina's Coastal Property insurance programs; and Steven A. Zappia, a Senior at Utica College, for his innovative look at ways to curb risks associated with under-age drinking and a new approach to Liquor Liability Insurance. Copies of the winning papers can be downloaded by clicking here.

Both students win $1,000 scholarships and along with their professors, Dr. Dave Wood and Dr. Pamela R. Hurley, respectively, receive the opportunity to attend and be recognized at the Association's Annual Meeting in New Orleans next month.

During the recent visit with members in the London Market, the AAMGA Executive Committee was also invited to meet with various senior corporate representatives of Lloyd's. As part of the ongoing collaborative relationship on matters impacting the wholesale insurance industry, the AAMGA was invited to provide comment to the newly proposed Binding Authority Agreement for Coverholders in the United States.

The Governmental Affairs Committee and Executive Director, Bernie Heinze, spent considerable time reviewing the proposed Wordings and drafted responses that were forwarded on to Lloyd's. The new revised wordings are anticipated to be released on or before July 1, 2013, and will be in place by January 1, 2014.

We continue our mutually beneficial relationship with our colleagues at Lloyd's and look forward to working toward a consensus on standards that afford a reasonable regulatory framework while, at the same time, advancing the ability of US Coverholders to access the Lloyd's platform through their Lloyd's brokers in a seamless and expedient fashion.

On March 19, 2013, the AAMGA submitted written testimony for inclusion in the record on the benefits NARAB II will have for wholesale insurance professionals. Click on the link to see the complete copy of the AAMGA's Testimony in Support of NARAB II submitted to the U.S. Senate. The statement was submitted to the US Senate Committee on Banking, Housing and Urban Affairs and its Subcommittee on Securities, Insurance and Investment in regard to their work on streamlining regulation, improving consumer protection and increasing competition in the insurance markets.

The statement concluded by noting that "the Act is an important step in sustaining the insurance market's effective, efficient and economical services to the public and private sector, while streamlining the processing, licensing and compliance components. Most importantly, it will develop and create a uniform and consistent foundation on which essential state based regulation can continue without restraining the creativity, investment and security provided by the wholesale insurance market. NARAB II will further facilitate the open market, enhance competition, allow agents, brokers and insurers to be more responsive to consumer needs and provide the flexibility in the buying decisions being made. The AAMGA looks forward to working with you Mr. Chairman, Ranking Member Johanns, Members of the Subcommittee and co-sponsors of the National Association of Registered Agents and Brokers Reform Act of 2013, as well as on other matters in furthering to develop the specifics and implementation of commercial insurance reform and modernization."

The AAMGA was in attendance at the Spring Meeting of the National Association of Insurance Commissioners (NAIC), which took place in Houston Texas, April 5-9, 2013, with an overriding theme of taking a stand against outside threats to state regulation in full effect.

Newly appointed NAIC CEO and former US Senator Ben Nelson upped the rhetoric against federal insurance supervision during the course of the meeting on numerous occasions. The main focus of concern is in the form of the Patient Protection and Affordable Care Act (ACA) and the Federal Insurance Office (FIO).  The apprehension focused on the inability of small-to-medium size companies to be heard in the face of federal legislation, and the potential problems with a "one-size-fits-all" approach to supervision and regulation on a federal basis.

The NAIC has begun to look at their role in overseeing the insurance market as the ACA rolls out. One of the most important jobs of state insurance departments is to conduct oversight of health insurers and make sure they comply with the law. But right now, most insurance departments don't have the processes and structures in place to collect data (e.g. consumer complaints), track and analyze the data, and conduct audits for ACA-specific reforms. A small working group at NAIC will attempt to develop a market oversight framework that DOIs can implement in their own states.

Brooke Stringer of the NAIC offered the Working Group an update on proposed reforms to the National Flood Insurance Program (NFIP) and discussed catastrophe related federal legislation. As for the NFIP reforms, the new law eliminates some artificially low rates and discounts which are no longer sustainable.  Most flood insurance rates will reflect full risk, and flood insurance is likely to rise on some policies to more accurately reflect risk.  Several bills have been introduced in the House of Representatives relating to catastrophe insurance.  Each bill addresses the issues in different ways:  

1. H.R. 1101, The Homeowners and Taxpayers Protection Act of 2013 requires pre-funding for catastrophe losses using private insurance premium dollars to protect homeowners from natural catastrophes and provides dedicated funding from insurance premiums to improve catastrophe preparedness, loss prevention and mitigation;  
2. H.R. 240, The Homeowners Insurance Protection Act of 2013 creates a National Commission on Catastrophe Preparation and Protection, and authorizes the Treasury to establish a tax exempt program to provide reinsurance coverage above a retention level for eligible state programs;
3. H.R. 549, The Homeowner Catastrophe Protection Act of 2013, amends the IRS Code to create Policyholder Disaster Protection Funds to permit insurers to create a tax-deferred reserve to cover losses form future national disasters and amends the IRS Code to create  Catastrophe Savings Accounts to permit individuals to create tax-exempt catastrophe savings accounts to pay expenses incurred as a result of a disaster; and
4. H.R. 737 The Homeowners Defense Act of 2013, creates a National Catastrophe Risk Consortium which is designed to create an inventory of catastrophe risk obligations of state entities, issue securities and other financial instruments inked to state catastrophe risk, and act as a repository of state risk information.

At the Working Group meeting, Karen Clark of Karen Clark & Company also presented a new risk assessment tool that is intended to more accurately assess risks relying upon characteristic events trends rather than CAT Models. The Working Group also received updates regarding Hurricane Sandy.

Superstorm Sandy struck the Northeast US, leaving devastating flooding and storm damage in its wake across wide swaths of the Mid-Atlantic and Northeast.  Some estimates now place the total damage at approximately $50 billion, with covered insurable loss potentially as high as $22 billion.

States employed a variety of measures to assist consumers who suffered losses:  

• Hurricane Deductibles:  7 States and the District of Columbia declared that hurricane deductibles should not be utilized because Sandy did not qualify as a hurricane-level storm;
• Claims Handling:  Several states ordered insurance companies to implement expedited and simplified claims processes;
• Delay in Payment:  Several states also instructed insurance companies to grant policyholders an extended grace period for premium payments or to accept reasonable delays in the cancellation and renewal of policies, payment of premiums, and reporting of claims.

When considering whether a state can legislate the insurer-insured contractual relationship, most courts will give deference to such governmental action.  It was noted during the meeting that cedents and reinsurers should, however, give careful consideration as to the impact of such governmental action on a reinsurance relationship.  For instance, do "Follow the Fortunes" clauses also include the potential for governmental action altering the contractual relationship of insurer to insured?  These and other issues will continue to be followed closely as the effects of Superstorm Sandy are still felt in the industry.

The Summer 2013 issue of the AAMGA's "Wholesale Insurance News" magazine is in the process of being printed for distribution at the Annual Meeting, and mailing to members, as well as to all 1,220,107 million others now receiving the digital edition in 40 countries around the world.

Articles in this issue of WIN include:

• Cover Story: Welcome Home: Employment Opportunities in Wholesale Insurance for our National Guard
• Liability Insurance at the Inflection Point
• A View from the AAMGA Chair of Risk Management & Insurance
• Lloyd's: Engaging the New World of Risk
• Coastal Property Insurance: The Carolinas
• Liquor Liability Insurance: Innovating to comply with "21 and Over"
• Century Online and Beyond: Best Practices for Supporting the Ever-Changing MGA Model
• In the WIN - ner's Circle: An Interview with AAMGA President R.C. Chaffin

Michael Gabor; Robert H. Sanders, Jr., CPCU, ASLI; Danielle S. Wade, CPCU, CIC; Karen J. Alford, MBA, SCLA

Please join us in congratulating Michael Gabor of Gabor Insurance Services, Inc. for advancing to President for the 2013-2014 term. Also joining the UFO Board of Directors for the 2013-2014 term are Robert Sanders, Jr., ASLI, CPCU of Preferred Specialty LLC, and Danielle Wade, CPCU, CIC of Jackson Sumner & Associates as Vice Presidents, and Karen Alford, MBA, SCLA of Scottsdale Insurance Company as Associate Chair. The UFO Board of Directors will formally transition in May 2013.
 
Also joining the AAMGA UFO Board of Directors for the 2013-2014 term as Senior Vice Presidents will be Timothy Chaix of R.E. Chaix & Associates Insurance Brokers, Inc. and Adam Rothert of Rothert Insurance, CMGA. TC Anderson, IV, CIW of RPS Scottsdale will serve as the Immediate Past President beginning in May of 2013.

The electronic version of the AAMGA's 2nd volume of its "Proud History - A Bright Future (1991-2011)" has been up loaded to the Home Page of the Association's website. Click here to download your copy today and keep this memorable publication bookmarked for future reference.

Tom Stamm, President of Markel-West/Scottsdale, several past Presidents of the Association and the AAMGA Operations Committee, all worked tirelessly to compile photographs and chronicle the advancement of the Association during the last 2 decades.

Members interested in additional hard copies of the book can also pick them up at the registration desk of the Annual Meeting in New Orleans, May 19-22.

• June 21-22, 2013: Committee Day - DoubleTree Hotel, Chicago O'Hare Airport: Click on the link for the Committee Day Agenda 
• August 15-13, 2013: University West - Scottsdale, AZ. Classes to include:
• Intermediate Casualty
• Intermediate Property
• Negotiation Skills
• Lloyd's Track
• Introduction into Excess & Surplus Lines
• Program Business
• Ethics
• Personal Lines
• Leadership Track
• DISC Profile
• Underwriting Disciplines
• September 12-14, 2013: UFO 22nd Annual Meeting - Samoset Resort on the Ocean, Rockport, ME
• March 1-4, 2014: Automation & Technology Conference - Orlando, FL
• May 18-21, 2014: AAMGA 88th Annual Meeting - Hilton Waikaloa Village, Hawaii

Watch for further details coming soon.

The following entities have applied for and been accepted by the Board of Directors for membership into the AAMGA. Please join us in welcoming them into the Wholesale Insurance Community:

Member Company Name	Member Type
AmWINS Group	Affiliate
Arch Specialty Insurance Company	Associate
Channel Syndicate	Associate
CJ Coleman & Company, LTD	Associate
R & Q Managing Agency Limited	Associate
Fowler Rodriguez	Business Services
IVANS	Business Services
LaMarche Associates	Business Services
Morris, Manning & Martin, LLP	Business Services
Oceanwide	Business Services
Perr & Knight	Business Services
Pre-Fill Services, LLC	Business Services
Work At Home Vintage Employees LLC	Business Services
Abacus Insurance Brokers	Managaing General Agent
Agency Intermediaries, Inc.	Managaing General Agent
AmWINS Brokerage of Michigan	Managaing General Agent
Associated Insurance Administrators, Inc.	Managaing General Agent
Chelsea Surplus Underwriters, Inc.	Managaing General Agent
Commercial Insurance Group, LLC	Managaing General Agent
DeCotis Insurance Associates	Managaing General Agent
Insurance Program Managers Group LLC	Managaing General Agent
Keating Group	Managaing General Agent
McSweeny Agency Inc.	Managaing General Agent
NeitClem Wholesale Insurance Brokerage, Inc. d/b/a Xylem Insurance Services	Managaing General Agent
Rodco Worldwide Inc.	Managaing General Agent
Specialty Underwriters Group	Managaing General Agent
Trinity Underwriting Managers, Inc.	Managaing General Agent
Whitecap Insurance, Inc. d/b/a Countrywide Brokerage	Managaing General Agent

AAMGA Committee Days
Chicago, IL

August 15-16, 2013 University West Scottsdale, Arizona

September 12-14, 2013 UFO 22nd Annual Meeting Samoset Resort On The Ocean
Rockport, ME

March 1-4, 2014 Automation and Technology Conference Orlando, Florida

May 18 - 21, 2014 AAMGA Annual Meeting
Hilton Waikoloa Village, Hawaii

May 17 - 20, 2015 AAMGA Annual Meeting Gaylord National Resort National Harbor, MD

May 22-25, 2016
AAMGA Annual Meeting J.W. Marriott Desert Ridge Resort
Scottsdale, Arizona

© 2013 American Association of Managing General Agents